DIRECTORS' REPORT TO THE MEMBERS: The Board of Directors of your Company presents herewith its 31st Annual Report and Audited Accounts for the financial year ended 31st March, 2015. The report also includes the Management discussion and Analysis Report in accordance with the guidelines of Corporate Governance. INTERNATIONAL BUSINESS : The Company's export during the year under review has increased to Rs.436847Lacs as compared to Rs.385510 Lacs during the previous year resulting an increase of 13.32%. DIVIDEND RECOMMENDED Your Directors have recommended a dividend of 65% (Rs. 6.50/- per Equity Share of Rs. 10/- each) subject to approval of shareowners in the ensuing Annual General Meeting of the Company. The aforesaid Dividend is tax free in the hands of the shareowners. SUBSIDIARIES AND ASSOCIATES The Company has, as on 31st March, 2015 eight subsidiaries namely Sukhdham Constructions & Developers Ltd., MK Web-Tech Pvt. Ltd., KPL Exports Pvt. Ltd. as its Wholly Owned Subsidiary Companies and Kothari Products Singapore Pvt. Ltd., Pinehills (Singapore) Pte. Ltd. (A wholly owned subsidiary of Kothari Products Singapore Pvt. Ltd.), Riverview Land Developers Pvt. Ltd., Blackplinth Realtors Pvt. Ltd. & Savitrimata Realtors Private Limited as its Subsidiary Companies. Further, the Company also has, as on 31st March, 2015, Seven Associate Companies as mentioned in the Note No. 30 of the Standalone Financial Statements of the Company. During the year under review "Bhojeshwar Realtors Pvt. Ltd." ceased to be an associate company and "Neelanchal Con-tech Pvt. Ltd". became an associate company. The prescribed salient features of the financial statements of the aforesaid subsidiary companies as per sub section 3 of section 129 of the Act have been disclosed in a separate statement attached to the consolidated Balance Sheet. The Company hereby undertakes that the Annual Accounts of the subsidiary companies and their related detailed information shall be made available to the shareowners of the holding and subsidiary companies seeking such information at any point of time and shall also be placed on the website of the holding Company. The Annual Accounts of the subsidiary companies shall also be kept for inspection by any shareowner at the head office of the holding company and of the subsidiary companies concerned. DIRECTORS Sri Mitesh Kothari, Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment. NUMBER OF THE BOARD MEETINGS The Company held Seven Board Meetings during the year 2014-15 the details of aforesaid meetings are given in the Corporate Governance Report. FIXED DEPOSITS The Company has not accepted any Fixed Deposits hence the particulars relating to the aforesaid are not applicable. DIRECTORS' RESPONSIBILITY STATEMENT As required under Sec.134(3)(c) read with Sec. 134(5) of the Companies Act,2013, your Directors confirm: (i) That in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed; (ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for the year under review; (iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (iv) that the Directors have prepared the annual accounts for the year under review on a going concern basis. (v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. (vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. KEY MANAGERIAL PERSONNEL During the year Sri Anurag Tandon, who was already Vice President (Accounts & Finance) of the Company, was re-designated as Chief Financial Officer of the Company. Sri Deepak Kothari & Sri Raj Kumar Gupta, Chairman & Managing Director and CS & Compliance Officer respectively of the Company were appointed as such before the Companies Act, 2013 come into force and they have also been re-designated as Key Managerial Personnel of the Company. COMMITTEES OF THE BOARD Pursuant to the provisions of the Companies Act, 2013 and provisions of the Listing Agreement, the Company has constituted following committees:- 1. Audit Committee. 2. Stakeholders Relationship Committee. 3. Nomination & Remuneration Committee. 4. Corporate Social Responsibility Committee. 5. Risk Management Committee The Composition, Scope and Powers of the aforementioned Committees together with details of their meetings held during the period under review, forms part of the Corporate Governance Report. ANNUAL REPORT ON CSR ACTIVITIES As required by the Companies (Corporate Social Responsibility Policy) Rules, 2014 the annual report on CSR activities undertaken by the Company during the year under review is attached as 'Annexure-1' to this Directors Report. POLICIES OF THE COMPANY Pursuant to the provisions of the Companies Act, 2013 and provisions of the Listing Agreement, the Company has framed following Policies:- 1. Corporate Social Responsibility Policy. 2. Nomination & Remuneration policy. 3. Risk Management Policy. 4. Whistle Blower Policy/Vigil Mechanism. 5. Policy on Material Subsidiaries. 6. Policy on Related Party Transactions. The details of the aforesaid policies are mentioned in the Corporate Governance Report and copies of the aforesaid policies are placed on the website of the Company. DECLARATION BY INDEPENDENT DIRECTORS Sri Pramod Kumar Tandon, Sri Vikas Chaturvedi and Dr. Avinash Gupta are Independent Directors on the Board of the Company. All the above named Independent Directors have given their respective declarations under Section 149(6) of the Companies Act, 2013 and the Rules made thereunder. In the opinion of the Board, the Independent Directors fulfill the conditions relating to their status as Independent Directors as specified in Section 149 of the Companies Act, 2013 and the Rules made thereunder. AUDITORS AND AUDITORS' REPORT M/s Mehrotra & Mehrotra, Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from M/s Mehrotra & Mehrotra, Chartered Accountants, to the effect that their re-appointment, if made, would be within the prescribed limits of Section 141 of the Companies Act, 2013 and that they are not disqualified for such re-appointment within the meaning of aforesaid Section. There are no qualification, reservation or adverse remark in the Auditors' Report which need explanation in the Directors' Report. SECRETARIAL AUDIT & ITS REPORT As required by section 204 of The Companies Act, 2013, Mr Adesh Tandon of M/s Adesh Tandon & Associates, Practicing Company Secretary of Kanpur was appointed as the Secretarial Auditor of the Company and he has carried out the Secretarial Audit of the Company and has submitted his Report which is annexed to this report as 'Annexure-2'. There are no qualification, reservation, adverse remark in the Secretarial Auditors' Report which need explanation in the Directors' Report. LOANS, GUARANTEES OR INVESTMENTS Loans, guarantees and investments covered under sec.186 of the Companies Act, 2013 form part of the financial statements provided in this Annual Report. STOCK EXCHANGE LISTING & COMPLIANCE The Shares of the Company are presently listed at Bombay Stock Exchange Ltd., Mumbai & National Stock Exchange of India Ltd., Mumbai and the Company is regularly complying with all the provisions of the listing agreement. CORPORATE GOVERNANCE REPORT A detailed Corporate Governance Report that also contains disclosures as per the Section 134 and 177 of the Companies Act, 2013 is attached and forms part of this Annual Report. A certificate from the statutory auditors of the Company regarding compliance with the conditions of Corporate Governance as required under Clause 49 of the Listing Agreement is part of this Annual Report. BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013 & clause 49 of the Listing Agreement, the Board has carried out an Annual performance evaluation of its own performance and the Directors individually. The evaluation of non-independent Directors, Chairman and the Board as a whole was done at a separate meeting held by independent Directors. The performance evaluation of independent Directors was done by the entire board, excluding Directors being evaluated. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has in place, an Anti-sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, Contractual, Temporary, Trainees) are covered under this policy. There were no complaint received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on 31.03.2015 for redressal. MANAGEMENT DISCUSSION & ANALYSIS REPORT The information, as required under clause 49 of the Listing Agreement, is as under :- a) INDUSTRY STRUCTURE AND DEVELOPMENTS As developed economies especially the U.S. made a gradual recovery, the global economy also registered a moderate growth. Overall global growth is expected to witness slow but steady revival over the next few years. Also the growth in the global economy remains irregular with the euro region still vulnerable and the slowdown in China due to lower investment by the government on fixed capital formation. Indian economy has also led to steady revival, backed by a very determined government focused on clearing fundamental hurdles and increasing the ease of doing business. Further, Indian Economy is poised to return to its high growth path, thanks to lower fiscal and current account deficits, falling inflation, falling cost of capital and structural reforms to boost investments. Further, almost stable currency market as compared to the previous year , contributed to stability in International Trade. "Make in India" initiative of the Indian Government is also expected to boost not only the growth of domestic industry but of the International Trade as well. Looking ahead, there is ample optimism about the International Trade to grow to high trajectory. b) OPPORTUNITIES & THREATS With the reform oriented and business friendly government at the center and India developing at a growth rate which is ahead of all other developing economies of the world, the opportunities for the company appears to be endless. However the trading industry may face the risk of imposition of a ban on import/export of a commodity by the government of any country, decrease in consumer demand, price war among key competitors. c) FINANCIAL PERFORMANCE We have during the financial year registered growth in our sales in the International Trade division alongwith a growth in profitability as well. The Company's sales turnover during the year under review has increased to Rs. 452163 Lacs from Rs. 417192 Lacs during the previous financial year. The Profit before depreciation & tax during the year has also increased to Rs. 7503 Lacs as against Rs. 6485 Lacs in the previous year. The Profit after Tax has also increased to Rs. 4931 Lacs as against Rs. 4229 Lacs of the previous year due to negative forex variations. However, profitability of the Company has decreased in Real Estate segment from Rs.1247 Lacs to Rs.791 Lacs whereas in Trading items segment the profit has increased to Rs. 8007 Lacs from Rs. 7045 Lacs in the previous year. The segment wise financial performance of the Company has also been mentioned in the Notes on Accounts being part of this Annual Report. d) OUTLOOK With the global economy appearing to be on the path of revival and with the high income economies showing signs of firm recovery after years of low growth and/or recession, the outlook for the International Trading Industry in particular and Trading Industry in general appears to be bright. With the formation of the new stable Government at the Center and its focus on the development of the infrastructure of the country and with the rising demand for the houses the outlook for the real estate industry appears to be bright. In view of the aforesaid the outlook of the Company also appears to be bright. e) RISKS AND CONCERNS: These aspects have been mentioned under the Heading "Opportunities and Threats". f) INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has in place adequate Internal Financial Control Systems & other internal control procedures commensurate with the size of the Company and the nature of its business for the import & export of commodities, minerals etc., purchase of assets and with regard to the sale of goods to ensure proper recording of financial & operational information and compliance of various statutory compliances. g) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT Human Resource is the most important element of the organization. Our Core Values are discipline, trust, integrity and work style. Core Values are established to align all the people in the organization in the direction of achieving stated goals all throughout the organization. The Company is taking sufficient steps for employee engagement and motivation. This has resulted in reduction of employee turnover. Your Company focuses on recruiting and retaining the best talent in the industry. Moreover, Company provides them proper induction, training and knowledge upgradation for the individual as well as organizational growth. The Company continues to maintain its record of cordial and harmonious industrial relations without any interruption in work. Further, as on 31st March, 2015 the Company had 51 employees on its roll. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND The information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is as under:- [A] CONSERVATION OF ENERGY a) Energy Conservation Measures taken : The Company has taken all measures for conservation of energy most economically. b) Additional Investments & Proposals, if any, being implemented for reduction of consumption of energy: No such investment is proposed. c) Impact of measures at (a) & (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: These measures have led to consumption of energy more economically. Further, since there is no manufacturing activity in the Company, hence information on consequent impact on Cost of production is not applicable. d) Form 'A' is not applicable to the company. [B] TECHNOLOGY ABSORPTION: Since there is no manufacturing activity in the Company hence the Company has not imported any technology. Accordingly, no R&D department exists in the company. INDUSTRIAL RELATIONS : Cordial and harmonious industrial relations prevailed throughout the year. PARTICULARS OF Employees : The particulars of employees who were in receipt of remuneration as specified in Sec.197(12) of the Companies Act, 2013 read with Rule 5(1)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is attached herewith as 'Annexure-3' to this Report. Further, the information required under section Sec.197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is attached herewith as 'Annexure-4' to this Report. EXTRACTS OF THE ANNUAL RETURN As per Section 92(3) of The Companies Act, 2013, read with Rule 12 of The Companies (Management and Administration) Rules, 2014, an extract of the Annual Return of the Company in Form No. MGT-9 is attached to this report as 'Annexure-5'. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH Related PARTIES The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 have been enclosed with the report in the prescribed format AOC-2 as 'Annexure-6'. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS There are no significant, material orders passed by the regulators or courts or tribunals which would impact the going concern status of the Company and its future operations. CASH FLOW STATEMENT In conformity with the provisions of clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended 31st March, 2015 is forming part of this Annual Report. MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION There have been no material changes and commitments which have occured between the end of Financial year and the date of this report which can have impact on financial position of the Company. ACKNOWLEDGEMENT : Your Directors wish to place on record their sincere appreciation for the continued co-operation and support extended by various Government Departments, Bankers, Dealers & suppliers and also acknowledge and appreciate the contribution made by the employees. The Board also wishes to place on record its gratitude to the valued customers, members and investors for their continued support and confidence in the Company. For and on behalf of the Board Sd/- (DEEPAK KOTHARI) Chairman & Managing Director Sd/- (MITESH KOTHARI) Executive Director PLACE:KANPUR DATE : 27th May, 2015 |