TO THE MEMBERS OF
KHATOR FIBRE & FABRICS LIMITED
The Directors take pleasure in presenting the Thirty First Annual Report together with
the Audited Financial Statements for the year ended 31st March, 2017. The
Management Discussion and Analysis has also been incorporated into this report.
1. FINANCIAL RESULTS
Key highlights of the Financial Results for Khator Fibre & Fabrics Limited for the
financial year 2016-17 are tabulated below: (Amt, in Lacs)
| Particulars |
2016-2017 |
2015-2016 |
| Income from Operation |
5871.97 |
5550.43 |
| Revenue from ISDS |
666.94 |
30230 |
| Less : Manufacturing, Administrative & Selling |
5423.22 |
5074.84 |
| Expenses |
|
|
| Less: ISDS Expenses |
666.94 |
302.30 |
| Profit before Depreciation & Interest |
448.75 |
475.59 |
| Less: Interest |
149.47 |
179.54 |
| Depreciation |
210.30 |
209.50 |
| Provision for Taxation (Net Deferred Tax) |
28.47 |
27.03 |
| Profit after Taxation |
60.51 |
5932 |
| Add : Surplus Brought Forward From Previous Year |
18.35 |
18.83 |
| Less : Transfer to General Reserves |
60.00 |
60.00 |
| Balance carried forward to Balance Sheet |
18.86 |
1835 |
2. HIGHLIGHTS OF PERFORMANCE
• The total net sale for the year was Rs. 5857.73 Lacs as compared to Rs. 5507.23
Lacs in 2015-16, a growth of 6.36 %.
• Total profit before tax for the year was Rs. 88.98 Lacs as compared to Rs. 86.55
Lacs in 2015-16.
• Total profit after tax for the year was Rs, 60-51 Lacs as compared to Rs. 59,52
Lacs in 2015-16.
3. BUSINESS OPERATIONS
The total turnover of Company in processing and fabric sales increased by 6.36%. During
the financial year the Company engaged in ISDS schemes promoted by Govt, of India under
Skill India / Make In India & committed to economical & social responsibilities.
Further the Company is happy to inform its shareholders for being appointed as
Exclusive Channel Partner from F.Y. 2017-18, in the category of School Uniforms and
Corporate Uniforms for East, West & North Zone of India by M/s. The Bombay Dyeing
& Mfg. Co. Ltd.
There was no change in nature of business of the Company, during the year under review.
4. DIVIDEND
Your Directors do not recommend any Dividend for the year under review, so as to
conserve the resources of the Company.
5. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2017 was Rs.
4,21,09,500/-. During the year under review, the Company has not issued shares with
differential voting rights nor granted stock options nor sweat equity. There was no change
in the Companys share capital during the year under review.
6. TRANSFER TO RESERVES
The Company proposes to transfer an amount of Rs. 60.00 Lacs to the General Reserves.
An amount of Rs. 18.86 Lacs is proposed to be retained in the Statement of Profit and
Loss.
7. DEPOSITS
Hie Company has not accepted deposit from the public and shareholders falling within
the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of
Deposits) Rules,
2014. Hence, the requirement for furnishing details of deposits which are not in
compliance with the Chapter V of the Act is not applicable.
8. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section
186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
9. SUBSIDIARY COMPANIES
The Company has no Subsidiary Company.
10. DIRECTORS
10.1 Retirement by Rotation
Pursuant to Section 132 (6) of the Companies Act, 2013 and in terms of the Articles of
Association of the Company, Mr. Ashok S. Khator, Director, retires by rotation at the
forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.
10.2 Declaration by Independent Directors
The Company has received declarations from the Independent Directors of the Company
confirming that they meet with the criteria of independence as prescribed both, under
Section 149 (6) of the Companies Act, 2013 and under Regulation 17 of the SEBI (LODR)
Regulations, 2013.
10.3 Familiarization Programme for Independent Directors
The Program intends to provide insights into the Company so that the Independent
Directors can understand the Companys business in depth and the roles, rights,
responsibility that they are expected to perform/enjoy in the Company to keep them updated
on the operations and business of the Company thereby facilitating their active
participation in managing the affairs of the Company. In addition to the above, Directors
are periodically advised about the changes effected in the Corporate Law, the SEBI (LODR)
Regulations, 2013 with regards to their roles, rights and responsibilities as Directors of
the Company.
10.4 Annual Board Evaluation
According to Regulation of 25(3) of the SEBI (LODR) Regulations, 2015 and Circular No.
SEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January, 2017 issued by SEBI on
Guidance Note on Board Evaluation, a meeting of the Independent Directors was held on 14th
February,
2017 to inter alia, evaluate the performance of the Non-Independent Directors,
including the Chairman. The Board thereafter in its meeting held on the same day evaluated
the performance of the Independent Directors.
10.5 Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Company
pursuant to Section 2(51) and Section 203 of the Act, read with Rule 8(5)(iii) of the
Companies (Accounts) Rules, 2014 framed thereunder.
1. Mr. Kailash S. Khator, Managing Director
2. Mr. Ashok S. Khator, Whole-Time Director - CFO
None of the Key Managerial Personnel have resigned during the year under review.
10.6 Remuneration Policy
The Board has in accordance with the provisions of Section 178 (3) of the Companies
Act,
2013, formulated the policy setting out the criteria for determining qualifications,
positive attributes, independence of a Director and policy relating to remuneration for
Directors, Key Managerial Personnel and Senior Management Employees. The detail of the
same has been disclosed in the Corporate Governance Report.
10.7 Board Meetings
A calendar of Board Meetings is prepared and circulated in advance to the Directors.
During the year the Company has held 5 (five) Board Meetings which were held on 30th
May,
2016; 13th August, 2016; 14th November, 2016; 09th
December, 2016 & 14th February, 2017. The maximum interval between any two
meetings did not exceed 120 days.
11. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and
explanations obtained by them, your Directors make the following statements in terms of
Section 134(3)(c) of the Companies Act, 2013:
a) that in the preparation of the annual financial statements for the year ended 31st
March, 2017, the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial
Statements have been selected and applied consistently and judgement and estimates have
been made that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2017 and of the profit of the
Company for the year ended on that date;
c) that proper and sufficient care has been taken 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;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financial
controls were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were in
place and were adequate and operating effectively.
12. PLEDGE OF SHARES
None of the equity shares of the Directors of the Company are pledged with any banks or
financial institutions.
13. RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arms length basis, in the ordinary
course of business and are in compliance with the applicable provisions of the Companies
Act, 2013 and the SEBI (LODR) Regulations, 2015. There are no materially significant
related party transactions made by the Company with Promoters, Directors or Key Managerial
Personnel etc. which may have potential conflict with the interest of the Company at large
or which warrants the approval of the shareholders. Accordingly, no transactions are being
reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the
Companies (Accounts) Rules, 2014. However, the details of the transactions with Related
Party are provided in the Companys financial statements in accordance with the Accounting
Standards.
14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would
impact the going concern status of the Company and its future operations.
15. DISCLOSURES UNDER SECTION 134 (31 fit OF THE COMPANIES ACT. 2013
No material changes and commitments which could affect the Companys financial position
have occurred between the end of the financial year of the Company and date of this
report.
16. DISCLOSURE UNDER THF. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION.
PROHIBITION AND REDRESSAL1 ACT. 2013
As per the requirement of The Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 and Rules made thereunder, your Company has in
place a Policy for Prevention of Sexual Harassment of Women at Work Place and constituted
an Internal Complaints Committees (ICC). No complaint has been raised during the year
ended 31st March, 2017.
17. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES. JOINT VENTURES OR
ASSOCIATE COMPANIES
There are no companies which have become or ceased to be its Subsidiaries, Joint
Venture or Associate Companies during the financial year 2016-17.
18. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The criteria prescribed for the applicability of Corporate Social Responsibility under
Section 135 of the Companies Act, 2013 is not applicable to the Company.
19. BUSINESS RISK MANAGEMENT
The nature of business is manufacturing of Textiles. The inheritant risk to the
business of the company is as follows:
a) Foreign Exchange Risk
b) Yam Price Risk
c) Stiff Global Competition
d) Government Policy on incentives for exports
e) Risk elements in business transactions
f) Success of Cotton Crop
All the above risk has been discussed in the Management Discussion and Analysis Report.
The nature of risk is dynamic of business and entrepreneurship. The Company has not formed
Risk Management Committee since it is not applicable under Regulation 21 of the SEBI
(LODR) Regulations, 2015.
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The scope and authority of the Internal Audit (IA) function
is defined in the Internal Audit Charter. To maintain its objectivity and independence,
the Internal Audit function reports to the Chairman of the Audit Committee of the Board.
The Company monitors and evaluates the efficacy and adequacy of internal control system
in the Company, its compliance with operating systems, accounting procedures and policies
at all locations of the Company. Based on the report of internal audit function, process
owners undertake corrective action in their respective areas and thereby strengthen the
controls. Significant audit observations and corrective actions thereon are presented to
the Audit Committee of the Board.
21. INFORMATION SYSTEM
In a business where information is critical, Information Technology plays a vital role,
facilitating informed decision making to grow the business. Over the years, the Company
has invested extensively in infrastructure, people and processes with the objective to
capture, protect and transmit information with speed and accuracy.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if
any. The detail of the Whistle Blower Policy is explained in the Corporate Governance
Report.
23. AUDITORS
23.1 Statutory Auditors
M/s. S. R. Goyal & Co., Chartered Accountants, the outgoing auditors has completed
his term as auditor pursuant to Section 139(2) of the Act at the end of conclusion of the
31 " Annual General Meeting.
It is proposed to appoint M/s. Giriraj & Lohiya, Chartered Accountant as Statutory
Auditor of the company for the Companys financial year 2017 - 18 to hold office from the
conclusion of the this Annual General Meeting of the Company till the conclusion of the
next Annual General Meeting in place of M/s. S. R. Goyal & Co., Chartered Accountants.
The Company has received a letter from M/s. Giriraj & Lohiya, Chartered Accountant to
the effect that their appointment if made would be maintain be within the prescribed limit
under Section 141(l)(g) of the Companies Act, 2013 and that they are willing to act as
statutory auditors of the company. As required under Regulation 33 of the SEBI (LODR)
Regulations, 2015, the auditors have also confirmed that they hold a valid certificate
issued by the Peer Review Board of the Institute of Chartered Accountants of India.
23.2 Statutory Auditors Observations
The notes on financial statements referred to in the Auditors Report are
self-explanatory and do not call for any further comments. The Auditors Report is an
Un-modified report and does not contain any qualification, reservation, adverse remark or
disclaimer.
23.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed M/s P. P. Shah & Co., Practicing Company Secretary to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed
herewith as "Annexure A".
23.4 Qualifications in Secretarial Audit Report
A) Appointment of Company Secretary:
As per Section 203 (1) (ii), the Company is required to appoint Company Secretary. The
Company has not appointed Company Secretary, consequently the Annual Audited Financial
Statements are not signed by Company Secretary. In this regard the management of the
Company has provided the following reply:
(i) The Company has appointed Mr. Omprakash Bajaj as Compliance Officer of the Company
who looks after the compliance of the Companies Act, 2013 and SEBI Act and rules made
thereunder;
(ii) The Company has availed the services of Practicing Company Secretary for advising
on compliance of the Companies Act, 2013 and SEBI Act and rules made thereunder;
(iii) The Volume and Scope of work for the Company Secretary is less and it is not a
full time work and the job of Company Secretary is not attractive commensurate with the
scope of work and salary.
B) Appointment of Internal Auditor:
As per Section 138 of the Companies Act, 2013, the Company is required to appoint
Internal Auditor. The Company has not appointed Internal Auditor. In this regard the
management of the Company has provided the following reply:
(i) The size of operation of the Company is very small accordingly, it is not viable to
appoint Internal Auditor but the Company has established the internal control system.
C) Website Posting:
As per the various sections of the Companies Act, 2013, regulations of the SEBI (LODR)
Regulations, 2015 and Secretarial Standard - 2, the Company is required to post various
information / policies on the website of the Company. The Company has not posted any
information / policies on the website of the Company. In this regard the management of the
Company has provided the following reply:
(i) The Company is filing regularly all the information with BSE and all the
information is available on the website of BSE.
D) Dematerialization of Promoters Shareholding:
As per Regulation 31 (2) of the SEBI (LODR) Regulations, 2015, the listed entity shall
ensure that 100% of shareholding of promoters and promoter group is maintained in
dematerialize form and the same is maintained on a continuous basis. In this regard the
management of the Company has provided the following reply:
(i) One of the promoter holding 49,500 equity shares constituting 1.16% of total equity
share capital listed on BSE Limited is not held in dematerialized form.
(ii) One of the deceased promoter holding 15,010 equity shares constituting 0.35% of
total equity share capital listed on BSE Limited is not held in dematerialized form.
E) Filing of Limited Review Report / Audit Report on Quarterly Basis:
As per Regulation 33(3)(c) of the SEBI (LODR) Regulations, 2015, in case the listed
entity submits Unaudited Financial Results to the Stock Exchange on quarterly basis then
the same shall be subject to limited review by the Statutory Auditors of the Company and
in respect of the last quarter, the Audited Financial Results shall be accompanied by the
Audit Report. The Company has not filed Audit Report in respect of Audited Financial
Results for the financial year ended 31st March, 2016 and Limited Review Report
in respect of the Unaudited Financial Results for the quarter ended 3(fh June
2016, 3(fh September, 2016 and 31st December, 2016 with BSE Limited
where its equity shares are listed.
24. CORPORATE GOVERNANCE
Your Company attaches considerable significance to good Corporate Governance as an
important step towards building investor confidence, improving investors protection and
maximizing longterm shareholders value. The certificate from M/s. S. R. Goyal & Co.,
Chartered Accountants, confirming compliance of conditions of Corporate Governance as
stipulated under Schedule V (E) of the Securities and Exchange Board of India (LODR)
Regulations, 2015 of the Stock Exchanges is annexed.
25. MANAGEMENT DISCUSSION AND ANALYSIS
As required under the Schedule V (B) of SEBI (LODR) Regulations, 2015, report on
"Management Discussion and Analysis is attached and forms part of this Annual
Report.
26. ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange
earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure
B".
27. LISTING WITH STOCK EXCHANGES
Your Company is listed with BSE Limited and the Company has duly paid the listing fees
to the Exchange.
28. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is annexed
herewith as "Annexure C".
29. PARTICULARS OF EMPLOYEES
During the year, there was no employee in receipt of remuneration as prescribed in the
Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. The prescribed particulars of Employees as required under Section 197 (12) of the
Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is attached as "Annexure D" and form part of this Report.
However, in accordance with the provisions contained in the proviso to Section 136(1)
of the Companies Act, 2013, the Annual Report and accounts excluding the aforesaid
information are being sent to the shareholders of the Company. Any member interested in
obtaining such particulars may write to the Compliance Officer at the Registered Office of
the Company for the same.
30. HUMAN RESOURCES
The relations of the employees of the Company have been cordial during the year.
Employees are considered to be team members being one of the most critical resources in
the business which maximize the effectiveness of the Organization. Human resources build
the Enterprise and the sense of belonging would inculcate the spirit of dedication and
loyalty amongst them towards strengthening the Companys Polices and Systems. The Company
maintains healthy, cordial and harmonious relations with all personnel and thereby
enhancing the contributory value of the Human Resources.
31. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safe
operations. The Companys policy requires conduct of operations in such a manner, so as to
ensure safety of all concerned, compliances of environmental regulations and preservation
of natural resources.
32. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.
Accordingly, your Companys operations are committed to the pursuit of achieving high
levels of operating performance and cost competitiveness, consolidating and building for
growth, enhancing the productive asset and resource base and nurturing overall corporate
reputation. Your Company is also committed to creating value for its other stakeholders by
ensuring that its corporate actions positively impact the socio-economic and environmental
dimensions and contribute to sustainable growth and development.
33. GREEN INITIATIVES
Electronic copies of the Annual Report 2016-17 and Notice of the 31st Annual
General Meeting are sent to all members whose email addresses are registered with the
Company / Depository Participants). For members who have not registered their email
addresses, physical copies of the Annual Report 2016-17 and the Notice of the 31st
Annual General Meeting under Section 101 of the Companies Act, 2013 are sent in the
permitted mode. Members requiring physical copies can send a request to the Company.
Your Company provides e-voting facility to all its members to enable them to cast their
votes electronically on all resolutions set forth in the Notice. This is pursuant to the
Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and
Administration) Amendment Rules, 2015.
34. ACKNOWLEDGEMENTS
Your Directors thank the various Central and State Government Departments,
Organizations and Agencies for the continued help and co-operation extended by them. The
Directors also gratefully acknowledge all stakeholders of the Company viz. customers,
members, dealers, vendors, banks and other business partners for the excellent support
received from them during the year. The Directors place on record their sincere
appreciation to all employees of the Company for their unstinted commitment and continued
contribution to the Company.
35. CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysis
describing the Companys objectives, expectations or forecasts may be forward-looking
within the meaning of applicable securities laws and regulations. Actual results may
differ materially from those expressed in the statement. Important factors that could
influence the Companys operations include global and domestic demand and supply
conditions affecting selling prices of finished goods, input availability and prices,
changes in government regulations, tax laws, economic developments within the country and
other factors such as litigation and industrial relations.
By Order of the Board of Directors
Kailash S. Khator Ashok S. Khator
Managing Director Whole-Time Director
Place: Mumbai Date: 30th May, 2017
+91-9892691696
