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Kabsons Industries Ltd Directors Report

Jul 19, 2024|09:56:00 AM

Kabsons Industries Ltd Share Price directors Report



Your Directors have pleasure in presenting the 31st Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2023.

FINANCIAL RESULTS: (Rs.in thousands except EPS)

Financial Year 2022-2023 Financial Year 2021-2022
Revenue from operations 1,69,955.88 1,13,517.56
Other Income 3,373.98 6,131.21

Total Revenue

1,73,329.86 1,19,648.76
Total Expenses 1,65,417.57 1,04,018.73
Profit before Finance Cost, Depreciation & exceptional items 14,009.06 20,817.07
Finance Cost 802.77 483.78
Depreciation 5,293.99 4,703.26
Exceptional items .01 383.41
Profit/ (Loss) before Tax 7,912.31 16,013.44
Tax Expenses (Earlier year Tax Paid) 15.49 0.05
Profit after Tax 7,896.82 16,008.36
Basic & Diluted Earnings per share of Rs.10/- each 0.45 0.92

The state of the companys affairs:

Operations and Business Performance:

During the year under consideration, the Company has generated a profit of Rs. 14,009.06 thousands before finance costs, depreciation and exceptional items as against a profit of Rs. 20,817.07 thousands during the previous year, which includes lease income and lease income is the major source of revenue to the Company. Your Directors are trying every opportunity for improving the performance with increased revenue in the next year.

Business Review

The Company has been focusing on Lease income and as per recent demand, a new Factory shed is offered for lease from the month of April 2023. The company also started bottling operations for another party also at our Ranchi bottling plant from the month of May 2023.

The Company acquired the some of the assets of plant and machinery and other equipment from the EIIL (who was operating our Bottling plant at Rohtak on lease) from 1st April, 2023 and envisaging to start a new project of mainly supplying Aerosol grade LPG to various industrial customers and our Company has also completed the repairs and maintenance jobs at this plant and awaiting for starting of operations.

Material changes and commitments if any affecting the financial position of the Company occurred between the end of the financial year to which this Financial Statements relate and the date of the report

There have been no material changes and commitments, affecting the financial position of the Company which occurred during between the end of the financial year to which the financial statements relate and the date of this report.

Details of significant and material orders passed by the regulators/ courts/ tribunals impacting the going concern status and the Companys operations in future.

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.

Share Capital:

Authorized Share Capital

During the year under review, there was no change in authorized share capital of the Company. Authorized share capital of the company as on March 31, 2023 was Rs.18,00,00,000/-, comprising of 1,80,00,000 equity shares of Rs.10/- each.

Paid-up Share Capital

During the year under review, there was no change in paid up share capital of the Company. Paid up share capital of the company as on March 31, 2023 was Rs.17,46,30,000/-, comprising of 1,74,63,000 equity shares of Rs.10/- each.

Buy Back of Securities

The Company has not bought back any of its securities during the year under review.

Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

Bonus Shares

The Company has not issued any bonus shares during the year under review.

Employees Stock Option

The Company has not provided any Stock Option Scheme to the employees.


Your Directors have not recommended any dividend on Equity Shares for the year under review.

Transfers to Reserves

Your Board of Directors does not appropriate any amount to be transferred to General Reserves during the year under review.


During the year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with rules made there under.

Subsidiaries, Joint Ventures and Associate Companies

The Company does not have any Subsidiary, Joint venture or Associate Company

Particulars of Contracts & Arrangements with Related Parties

All transactions entered by the Company with Related Parties were in the Ordinary course of Business and are at Arms Length pricing basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2022-2023 which were in conflict with the interest of the Company. The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 were given as Annexure - I to the Boards Report in form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.

Related party Transactions:

The details of the Related Party Transactions are furnished in Note 34.3.5 of the Notes on the Financial Statements attached to this Report.All the related party transactions have been on an arms length basis.

Particulars of Loans, Guarantees or Investments

Your Company has not given any Loans / Guarantees and not made any Investments during the FY 2022-23, as specified under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014.

Number of Board Meetings held

The Board of Directors duly met 4 times during the financial year from 1st April, 2022 to 31st March, 2023, the details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and Secretarial Standard -1.Details of these meetings of the Board as well as its committees have been given in the Corporate Governance Report, which forms parts of the Annual Report.

Sub Committees of the Board

The Board has Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee.

The composition and other details of these committees have been given in the report on the Corporate Governance which forms part of the Annual Report.

Directors and Key Managerial Personnel

During the year under review, the following were the ‘Key Managerial Personnel of the Company: Sri. Rajiv Kabra – Managing Director Sri. Krishna Murthy Motamarri - Chief Financial Officer; and Sri. Nagaraju Musinam – Company Secretary and Compliance Officer


The Company is well supported by the knowledge and experience of its Directors and Executives. In terms of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Ms. Riha Kabra, Non Executive Director of the Company is liable to retire by rotation and being eligible, has offered herself for reappointment.

Mr.Sumit Jaiswal was appointed as an additional director independent for five years on 12.08.2023 subject to approval of shareholders In the opinion of the Board, the independent director appointed during the year possess requisite integrity, expertise, experience and proficiency.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under section 164 of the Companies Act 2013.

Declaration by Independent Directors

The Independent Directors of the Company have submitted their declarations as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as per sub-section (6) of Section 149 of the Act.

Familiarization programme for Independent Directors

The Company proactively keeps its Directors informed of the activities of the Company, its management and operations and provides an overall industry perspective as well as issues being faced by the industry.

Independent Directors Meeting

The Independent Directors met on 14.02.2023, without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole; the performance of the Chairman of the Company, taking into account the views of Executive Director and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

Board Evaluation:

The Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc.

Secretarial Standards

The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

Directors Responsibility Statement as required under Section 134(5) of the Companies Act, 2013:

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 the Board of Directors states 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) They 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 and loss for that period;

c) They 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) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

f ) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Policy on Directors Appointment and Remuneration and Other Details

The Companys policy on directors appointment and remuneration and other matters provided in Section 178 (3) of the Companies Act, 2013 have been disclosed in the corporate governance report. Under Section 178 (3) of the Companies Act, 2013, the Nomination and Remuneration Committee of the board has adopted a policy for nomination, remuneration and other related matters for directors and senior management personnel. A gist of the policy is available in the Corporate Governance Report.

Statutory Auditors

M/s. K S Rao & Co., Chartered Accountants, (Firm Registration No.003109S), was appointed as the statutory auditors of the Company, to hold office for the second term of five consecutive years from the conclusion of the 30th AGM of the Company held on September 23, 2022, till the conclusion of the 35th AGM to be held in 2027, as required under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Qualification by Statutory Auditor

Information & Explanation in respect of Qualification / Reservation or Adverse remarks contained in Independent Auditors Report under Paras: Basis for Qualified opinion, Emphasis of Matter and Other Matters:

1 The company has not adopted and complied with requirements of IND AS 19 ‘Employee Benefits in respect of the gratuity liability which constitute a departure from the Indian Accounting Standards.

2 In the financial statements which states that the Company has not provided for the interest expense amounting to Rs.6,12,049/- for the year and Rs.1,34,05,415/- for earlier years against the Trade Deposits received from the Dealers/ Distributors. Consequently, the same has resulted in overstatement of profit for the year by Rs.6,12,049/- overstatement of the balance in the retained earnings, in other equity, by Rs.1,40,17,464/- and understatement of Current Liabilities by Rs.1,40,17,464/-

Management View: 1) In view of very limited strength of employees, presently working with the Company, the requirements of AS-19 Employee Benefits in respect of gratuity could not be complied with. However, provision for gratuity as required under Payment of Gratuity Act has been provided for. 2) Interest for the year Rs.6,12,049/- on deposits of Dealers/Distributors has not been provided in view of Companys adverse financial position and will be negotiated for waiver resulting to overstatement of profit by that amount and understatement of Current liabilities by Rs.1,40,17,464.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s. B S S& Associates, Practicing Company Secretaries for conducting Secretarial Audit of the Company for the financial year 2022-2023. The Secretarial Audit Report is annexed herewith as Annexure - II.

Qualification by Secretarial Auditor

The Secretarial Auditors Report does not contain any qualifications, reservation or adverse remarks during the year review.

Internal Auditors

In pursuance of Section 138 of the Companies Act, 2013 read with rules made there under, the Board has appointed Mr. M Krishna Murthy, CFO of the Company as Internal Auditors of the Company to carry out internal auditing of books of accounts periodically.

Maintenance of Cost Records

The Central Government has not prescribed the maintenance of cost records under Section 148 of the Act, for any of the services rendered by the Company.

Vigil Mechanism / Whistle Blower Policy

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI (LODR) Regulations 2015, the Board has adopted Whistle Blower Policy. This policy aims for conducting the affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior.

A mechanism has been established for employees to report concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct and Ethics. The policy also provided adequate safeguards against the victimization of employees who avail of the mechanism and allows direct access to the Chairman of the Audit Committee in exceptional cases.

Your Company hereby affirms that during the year no Director / employee have been denied access to the Chairman of the Audit Committee and that no complaints were received.

Management Discussion and Analysis

Management Discussion and Analysis Report for the year under review, as stipulated under SEBI Listing Regulations, is annexed herewith as Annexure IIIwhich forms part of this report.

Risk Management

The Risk Management Committee duly constituted by the Board had formulated a Risk Management Policy for dealing with different kinds of risks attributable to the operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedure will be reviewed periodically by the Audit Committee and the Board.

Corporate Social Responsibility (CSR) Initiatives:

Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company ie. (a) networth of the Company to be Rs.500 crore or more; or (b) turnover of the company to be Rs. 1,000 crore or more; or (c) net profit of the company to be Rs. 5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of section 135 are not applicable to the Company.

Annual Return

Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the Annual Return in eform MGT 7 is placed at the company website at https://www.kabsons.co.in.

Information on Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and outgo

Pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 3 of Companies (Accounts) Rules, 2014, these particulars are not relevant to the companys operations and hence not furnished the same.

Companys Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace

The Company prohibits any form of sexual harassment and any such incidence is immediately investigated and appropriate action taken in the matter against the offending employee(s) based on the nature and the seriousness of the offence. The Company has a policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace (the Policy) and matters connected therewith or incidental thereto covering all the aspects as contained under the "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" notified by the Government of India vide Gazette Notification dated 24thApril, 2013.

There was no case of sexual harassment reported during the year under review.

Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure – IV.

Corporate Governance

The Company is committed to good corporate governance in line with the SEBI (LODR) Regulations, 2015 and Provisions, Rules and Regulations of the Companies Act, 2013. The Company is in compliance with the provisions on corporate governance specified in the SEBI (LODR) Regulations, 2015 with BSE. A certificate of compliance from B S S & Associates, Company Secretaries and the report on Corporate Governance form part of this Directors Report as Annexure – V.

Details in respect of frauds reported by Auditors under Section 143 (12) other than those which are reportable to the Central Government.

There were no frauds reported by the Statutory Auditors under sub-section 12 of Section 143 of the Companies Act, 2013 along with Rules made there under.

Details of application made or any proceeding pending under the Insolvency and bankruptcy code, 2016 during the year

The Company has not made any application under the Insolvency and Bankruptcy Code, 2016, during the year under report.

Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking Loan from the banks or financial institutions along with the reasons thereof

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

Awards and recognition

The Company has not received any award during the Financial Year.


The Directors wish to place on record their gratitude to shareholders and thank the customers, vendors, franchisees, bankers, Department of Explosives and their Officials, Central Excise, Pollution Control Boards and Commercial Tax Departments of respective States, host of other State and Central Government Departments, Security Exchange Board of India and Stock Exchanges at Mumbai, Ahmedabad and Kolkata and others for their continued support to the Companys growth. The Directors also wish to place on record, their appreciation for the contribution made by the employees at all levels, for their sincerity, hard work, solidarity and dedicated support to the Company.

By Order of the Board of Directors of
Kabsons Industries Limited
Rajiv Kabra
Place : Hyderabad Managing Director
Date : 12.08.2023

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