Dear members,
The Directors have the pleasure in presenting the 21st Annual Report
together with the Audited Statement of Account for the year ending on
31st March, 2015.
Financial Results : (Amt. in Rupees)
Particulars Financial Year ended
Standalone
2014-2015 2013-2014
Revenue from operations 170,219,441 84,626,530
Other Income 6,242,542 13,837,705
Total revenue 176,461,983 98,464,236
Expenditure :
* Employee benefits expenses 668,486 2,037,802
* Other expenses 174,566,430 95,885,870
Total expenses 175,234,916 97,923,672
Profit before tax 1,227,067 540,564
Tax expense :
* current Tax 235,014 100,000
Excess Provision of I. Tax for earlier year -3,471,702 -
Net profit for the year 4,463,755 440,564
(Amt. in Rupees)
Financial Year ended
Particulars Consolidated
2014-2015 2013-2014
Revenue from operations 170,266,841 92,886,180
Other Income 7,461,448 15,988,072
Total revenue 177,728,289 108,874,252
Expenditure :
* Employee benefits expenses 1,631,554 3,161,402
* Other expenses 174,791,157 105,114,784
Total expenses 176,422,711 108,276,186
Profit before tax 1,305,578 598,066
Tax expense :
* current Tax 259,273 120,630
Excess Provision of I. Tax for earlier year -3,471,702 -
Net profit for the year 4,518,007 477,436
APPROPRIATIONS :
The Opening Balance of Surplus of Profit and Loss shown under the head
Reserves and Surplus was Rs. 44,326,350/ -. During the year under the
review, the profit of Rs. 4,463,755/-. was also added. The Closing
Balance of Surplus of the Profit and Loss shown under the head Reserves
and Surplus was Rs 48,790,105/-.
OPERATIONS :
During the year under the review there was an increase in total income
of 101.14 % in comparison to the previous year. The total expenses have
increased by 078.95 % and the net profit after tax has increased by
913.19%.
DIVIDEND :
As Company has inadequate Profit, your directors do not propose any
dividend for the current year to conserve the resources.
DETAILS OF DIRECTORS / KEY MANAGERIAL PERSONNEL APPOINTED / RESIGNED :
i. Retirement by Rotation :
Pursuant to the provisions of Section 152(6) of the Companies Act,
2013, Mr. Ismail Memon (DIN: 00209507), retires by rotation at the
ensuing Annual General Meeting and being eligible, offers himself for
re-appointment. Your directors recommend his re-appointment.
ii. Cessation :
There is no cessation of any director during the year.
iii. Appointment of Additional / Independent Women Director :
Mr. Ajazahmad Ansari and Mr. Aftabahmed Kadri were appointed as
Additional Directors of the Company with effect from 14th February,
2015 and Ms. Janki Ranjitsingh Vaghela was appointed as an Additional
Director (Independent Women Director) on the Board w.e.f. 31st March,
2015. Mr. Ajazahmad Ansari, Mr. Aftabahmed Kadri and Ms. Janki
Ranjitsingh Vaghela, Additional Director will hold office until the
date of ensuing 21st Annual General Meeting of the shareholders of the
Company. The necessary resolution proposing them appointment as
Independent Director has been proposed in the Notice convening the said
Annual General meeting.
iv. Appointment of CFO :
During the Year under review in compliance with the provisions of
Sections 197 and 203 and all other applicable provisions, if any, of
the Companies Act, 2013 Mr. Mohsin Ismail Memon was appointed as Chief
Finance Officer w.e.f. 14th February, 2015.
v. Key Managerial Personnel :
The following persons were designated as Key Managerial Personnel:
1. Ms. Sakina Aiyyaz Pimpalnerwala, Company Secretary
2. Mr. Babulal Hirani, Managing Director
3. Mr. Mohsin Ismailbhai Memon, Chief Financial Officer
DETAILS OF HOLDING / SUBSIDARY COMPANIES / JOINT VENTURES / ASSOCIATE
COMPANIES :
Your Company has Four wholly owned Subsidiary Companies i.e. KGN Bio
Tech Limited, KGN Green Limited, KGN Proteins Limited, KGN Oil & Gas
Private Limited.
In terms of the Provisions contained in Section 129 (3) of the
Companies Act, 2013, Read with rule 5 of the Companies (Accounts)
Rules, 2014, a report on the performance and the financial of each of
the subsidiaries is provided as Annexure A i.e 'AOC-1' to this Report.
DEPOSITS :
The Company has not invited/ accepted any deposit, other than the
exempted deposit as prescribed under the provision of the Companies
Act, 2013 and the rules framed there under, as amended from time to
time. Hence there are no particulars to report about the deposit
falling under Rule 8 ( 5 ) ( v ) and ( vi ) of Companies ( Accounts )
Rules, 2014.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR
COURTS OR TRIBUNALS:
During the year under review there were no significant and material
orders passed by any Regulators or Court or Tribunals which may have
impact on the going concern status. Neither there are any orders passed
which may have impact on the Company's operation in future.
INTERNAL FINANCIAL CONTROLS :
The internal financial controls with reference to the Financial
Statements are commensurate with the size and nature of business of the
Company. The Company has adopted the policies and procedures for
ensuring the orderly and efficient conduct of its business, including
adherence to Company's policies, safeguarding of its assets, prevention
and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable
financial information.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Pursuant to Rule 8 (3) of Companies (Accounts) Rules, 2014, the Board
of Directors hereby declares that there are no particulars to report
for the Conservation of Energy & Technology Absorption. There is no
foreign exchange earnings and outgo during the year under the review.
ENVIRONMENTAL PROTECTION :
Your Company is engaged in the manufacturing activities for which
Company has taken approval of Gujarat Pollution Control Board and the
directors inform with regret that there were no manufacturing
activities during the financial year 2014-15.
PERSONNEL :
There was no employee drawing remuneration requiring disclosure under
the Rule 5 (2) of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
There was no employee drawing remuneration requiring disclosure under
section 197(12) and Rule 5 (1) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014. Required details are
annexed to this Report as Annexure B.
VIGIL MECHANISM :
Pursuant to Section 177(9) of the Companies Act, 2013, the company has
adopted Whistle Blower Policy to deal with any instance of fraud and
mismanagement. The employees of the company are free to report
violations of any laws, rules, regulations and concerns about unethical
conduct to the Audit Committee under this policy. The policy ensures
that strict confidentiality is maintained whilst dealing with concerns
and also that no discrimination with any person for a genuinely raised
concern.
AUDIT COMMITTEE :
The Audit Committee of the Board of Directors of the Company was
re-constituted and presently consists of three Directors viz. Mr.
Aftabahmed Kadri, Mr.Ajazahmed Ansari and Ms.Janki Vaghela. All members
of the Audit Committee are non-executive Directors. Mr. Aftabahmed
Kadri, is the Chairman of the Audit Committee.
During the Year under review, total four Meetings of the Board of
Directors of the Company were held.
The Composition and the Terms of Reference of the Audit Committee is as
mentioned in the provisions of Section 177 of the Companies Act, 2013
and clause 49 of the Listing Agreement with the Stock exchanges as
amended from time to time. The Statutory Auditor, Internal Auditor and
Chief Finance Officer usually attend the Meeting of the Audit
Committee. The Company Secretary of the Company Ms. Sakina Aiyyaz
Pimpalnerwala acts as Secretary of the Committee.
AUDITORS :
i. Statutory Auditor and their Report :
In the last AGM held on 29th September, 2014, M/s. Kirit & Company,
Chartered Accountants, (having Registration No. 132282W) Chartered
Accountants, have been appointed Statutory Auditors of the Company for
a period of 2 (Two) years. Ratification of appointment of Statutory
Auditors is being sought from the members of the Company at the ensuing
AGM. They have confirmed their eligibility and willingness to accept
office, if re- appointed.
The observations made in their report and dealt with in the notes
forming part of the Accounts at appropriate places are
self-explanatory.
ii. INTERNAL AUDITOR :
M/s. A.Y. Pathan & Associates, Chartered Accountant, are Internal
Auditors of the Company. The Audit Committee of the Board of Directors
in consultation with the Internal Auditors, formulate the scope,
functioning periodicity and methodology for conducting the internal
audit.
iii. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT :
The Board of Directors of the Company has, in compliance with the
provisions of Section 304(1) of the Companies Act, 2013 and rules made
in this behalf, appointed M/S. Umesh Ved & Associates, Company
Secretaries to carry out Secretarial Audit of the Company for the
financial year 2014-15. The Report of the Secretarial Auditor is
annexed to this Report as Annexure C which is self explanatory and give
complete information.
EXPLANATION TO THE QUALIFICATIONS IN AUDITOR'S REPORT AND SECRETARIAL
AUDIT REPORT :
There are no qualifications or adverse remarks in the Auditor's Report.
Explanation on qualification adverse remark made in Secretarial Audit
Report is as under.
Qualification/ Adverse Remark Explanation :
The Form MR-1is yet to be filed by The company is in process of
the Company with the Registrar of filing the requisite forms and
Company as specified under the the compliance of the same will
provisions of Section 203 under be made soon.
the Companies Act, 2013 in respect
of the return of appointment of
a Chief Financial Officer.
The requisite Form DIR-12 are yet However, Board assures that it
to be filed by the Company with the will be complied with now
Registrar of Company as onwards.
specified under the provisions
of Section 170 under the Companies
Act, 2013 in respect of the
particulars of appointment of a
Chief Financial Officer and Two
Directors.
The requisite Form MGT-14 are yet to
be filed by the Company with the
Registrar of Company as specified under
the provisions of Section 179
under the Companies Act,2013 in
respect of Disclosure of Interest,
appointment of Secretarial Auditor,
Internal Auditor, Chief Financial
Officer, approval of Quarterly
Results of Financial Year 2014-15 and
Annual Financial Statements and
the Board's Report of Financial Year
2013-14.
The Form ADT-1is yet to be filed by the
Company with the Registrar of Company
as specified under the provisions
of Section 139 under the Companies Act,
2013 in respect of Information to the
Registrar for appointment of Auditor
for Financial Year 2014-15.
Company has not complied and/or made All qualifications are relating
late submission of the to late filing of some of the
documents as required under quarterly compliances with
various clauses of listing agreement. the stock Exchanges.
However, Board assures that it
will be complied with now
onwards
The Company did not provide the Since, the E- voting introduced
e-voting facility in the Annual for the first time, the company
General Meeting held on 26th could not do it on
September, 2014 as specified time and skip the compliance.
under Clause 35B However, Board assures to comply
of the Listing Agreement. with the same soon as possible.
LISTING :
The shares of the company are listed at BSE Limited and Metropolitan
Stock Exchange of India Limited. Listing fees of BSE Limited and
Metropolitan Stock Exchange is paid for the year 2015 - 2016.
The Company proposes to get the shares delisted from Metropolitan Stock
Exchange of India Limited since there is no trading being made at the
Stock Exchange.
DIRECTORS RESPONSIBITLY STATEMENT :
As required under the provisions of Section 134 of the Act, your
Directors report that:
(a) In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures.
(b) 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 profits of
the Company for that period.
(c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
(d) The Directors have prepared the annual accounts on a going concern
basis.
(e) The Directors have laid down internal financial controls as required
by Explanation to Section 134(5)(e) of the Act) to be followed by the
Company and such internal financial controls are adequate and are
operating effectively.
(f) The Directors have devised proper systems to ensure compliance with
the provisions of applicable laws and such systems are adequate and
operating effectively.
RELATED PARTY TRANSACTIONS :
During the year under review the Company has entered into the
transactions with the related parties, the details of each are provided
in point No. 27 under the head notes on Financial Statements.
PARTICULARS OF LOANS / GUARANTEES / INVESTMENT :
The Particulars of loans, guarantee or investment made under Section
186 of the Companies Act, 2013 are furnished in the Notes to the
Financial Statements for the year ended 31st March 2015.
INVESTMENT IN UNQUOTED SHARES :
The Company has made investment in unquoted shares.
1. KGN Bio- Tech Ltd. 50000 Shares
2. KGN Greens Ltd. 50000 Shares
3. KGN Oil & Gas Pvt. Ltd. 10000 Shares
4. KGN Proteins Ltd. 50000 Shares
RISK MANAGEMENT POLICY :
The Company has a structured risk management policy. The Risk
management process is designed to safeguard the organisation from
various risks through adequate and timely actions. It is designed to
anticipate, evaluate and mitigate risks in order to minimize its impact
on the business. The potential risks are inventorised and integrated
with the management process such that they receive the necessary
consideration during decision making. It is dealt with in greater
details in the management discussion and analysis section.
STATEMENT OF INDEPENDENT DIRECTORS :
The following Directors are independent in terms of Section 149(6) of
the Act:
a) Mr. Ajazahmed Ansari
b) Mr. Aftabahmed Kadri
c Mrs. Janki Ranjitsingh Vaghela
The Company has received requisite declarations/ confirmations from all
the above Directors confirming their independence.
EXTRACT OF THE ANNUAL RETURN :
Pursuant to provision of Section 92 and 134 and other applicable
provision of the Companies Act, 2013 and of Rule 12 ( 1 ) of Companies
( Management and Administration ) Rules, 2014 the extract of the annual
return in form MGT 9 for the Financial Year ended on 31st March, 2015
is annexed as Annexure D to this Report.
NUMBER OF BOARD MEETINGS :
The calendar of meetings to be held in a year is decided in advance by
the Board and circulated to the Directors. During the year, Four Board
meetings were convened and held. The gap between two consecutive
meetings was not more than one hundred and twenty days as provided in
section 173 of the Act.
CORPORATE SOCIAL RESPONSIBILITY :
The Provision of Section 135 of the Companies Act, 2013 regarding
Corporate Social Responsibility is not applicable to the company.
ANNUAL PERFORMANCE EVALUATION :
In compliance with the provisions of the Act and voluntarily under
Clause 49 of the Listing Agreement, the performance evaluation was
carried out as under:
Board :
In accordance with the criteria suggested by The Nomination and
Remuneration Committee, the Board of Directors evaluated the
performance of the Board, having regard to various criteria such as
Board composition, Board processes, Board dynamics etc. The Independent
Directors, at their separate meetings, also evaluated the performance
of the Board as a whole based on various criteria. The Board and the
Independent Directors were of the unanimous view that performance of
the Board of Directors as a whole was satisfactory.
Committees of the Board :
The performance of the Audit Committee, the Nomination and Remuneration
Committee was evaluated by the Board having regard to various criteria
such as committee composition, committee, processes, committee dynamics
etc. The Board was of the unanimous view that all the committees were
performing their functions satisfactorily and according to the mandate
prescribed by the Board under the regulatory requirements including the
provisions of the Act, the Rules framed thereunder and the Listing
Agreement.
Individual Directors :
(a) Independent Directors : In accordance with the criteria suggested
by The Nomination and Remuneration Committee, the performance of each
independent director was evaluated by the entire Board of Directors
(excluding the director being evaluated) on various parameters like
engagement, leadership, analysis, decision making, communication,
governance and interest of stakeholders. The Board was of the unanimous
view that each independent director was a reputed professional and
brought his/her rich experience to the deliberations of the Board. The
Board also appreciated the contribution made by all the independent
directors in guiding the management in achieving higher growth and
concluded that continuance of each independent director on the Board
will be in the interest of the Company.
(b) Non-Independent Directors : The performance of each of the
non-independent directors (including the chair person) was evaluated by
the Independent Directors at their separate meeting. Further, their
performance was also evaluated by the Board of Directors. The various
criteria considered for the purpose of evaluation included leadership,
engagement, transparency, analysis, decision making, functional
knowledge, governance and interest of stakeholders. The Independent
Directors and the Board were of the unanimous view that each of the non-
independent directors was providing good business and people leadership.
SEXUAL HARASSMENT :
The Company has constituted an Internal Complaint Committee as required
under Section 4 of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules made
thereunder. During the year under review, no complaints were reported.
APPRECIATION :
Your Directors wish to convey their thanks to all the bankers,
suppliers, customers and other persons for their continued support to
the company.
For and on behalf of Board of Directors of
KGN ENTERPRISES LIMITED
BABULAL HIRANI ISMAIL MEMON
Date : Mumbai MANAGING DIRECTOR CHAIRMAN
Place : 14.08.2015 DIN: 02362983 DIN: 00209507
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