Eskay Kn'IT (India) Ltd
Directors Reports
Dear Members,
Your Directors have pleasure in presenting the 32nd Annual Report of ESKAY
K'n'IT (INDIA) LIMITED along with the Audited Statements of Accounts for the Financial
Year ended 31st March, 2019.
FINANCIAL HIGHLIGHTS:
(Rs. in Lacs)
| Particulars |
2018-2019 |
2017-2018 |
| Revenue from operations |
803.24 |
3,095.04 |
| Finance Cost |
- |
4,350.01 |
| Depreciation and amortization Expense |
326.25 |
1,533.62 |
| Profit/ (Loss) before exceptional and extraordinary items and tax |
(5,778.49) |
(5,778.49) |
| Exceptional items |
|
|
| Extraordinary items |
|
|
| Profit/ (Loss) before tax |
(355.77) |
(5,778.49) |
| Deferred Tax Assets/(Liabilities) |
(259.25) |
40.90 |
| Provision for Taxation |
0.00 |
0.00 |
| Net Profit/(Loss) |
(615.02) |
(5,737.59) |
COMPANY PERFORMANCE:
During the year, the Revenue from operations of the Company has substantially decreased
to Rs. 803.24 Lacs as against Rs. 3095.04 Lacs in respect of the previous Financial Year
ended 31st March, 2018. The Company has suffered Loss before Tax Rs 355.77Lacs in the
financial year ended 31st March, 2019 as against loss of Rs. 5,778.49 Lacs in the previous
financial year ended 31st March, 2018. The Company has Net Loss of Rs. 615.02 Lacs after
considering deferred tax of Rs. (259.25) Lacs as against Net Loss of Rs 5,737.59 Lacs in
the previous financial year ended 31st March, 2018. However, there is no cash loss during
the year.
The Company has incurred Substantial losses due to markets resulting in poor sales.
The company experienced that the efficiency of plant and machineries, especially
Spinning Machines have gone down and set up an in house Expert Group to suggest measures
for Technology up gradation and Modernization. As per their recommendations, old machines
including Ring Frames, requiring expenditure towards repairs and maintenance consuming
high power with low output have been identified and shifted to workshop/godowns for
appropriate action.
Further, the Company after incurring huge losses and eroding its net worth completely
had made an application to be registered as a Sick Company with Board for Industrial and
Financial Reconstruction.
During the Year under review, the Company does not have any subsidiary, associate or
joint venture companies.
DIVIDEND:
In view of Loss of the Current year, your Directors are unable to recommend any
dividend on the equity shares for the year under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
As per provisions of Section 149, 150, 152 and any other applicable provisions of
Companies Act, 2013 and the rule made thereunder read with schedule IV to the Companies
Act, 2013, Shri Narayan Ghumatkar, existing Independent Directors of the Company, have
been appointed as an Independent Directors of Company who shall hold office from the date
of this Annual General Meeting till Annual General to be held in 2019. They shall not,
henceforth be liable to determination by retirement of Directors by rotation.
Further, the Board of Directors of the Company had appointed Shri Jaiprakash Mishra as
an Additional Directors w.e.f. 21st June, 2019. Pursuant to the provisions of
Section 160 of the Companies Act, 2013, Shri Jaiprakash Mishra shall hold office upto the
date of ensuing Annual General Meeting. The Notice pursuant to Section 161 of the
Companies Act, 2013, has been received from the Member proposing the candidature of Shri
Jaiprakash Mishra for appointed as Directors of the Company.
All the Independent Directors have given declarations that they meet the criteria of
independence as lay down under Section 149 (6) Of the Act and SEBI Listing Regulations. In
the opinion of the Board, they fulfill the conditions of independence as specified in the
Act and the Rules made there under and are independent of the management.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF
DIRECTORS:
Pursuant to the provisions of the Companies Act, 2013 and Regulations 17, 19 and other
applicable provision of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements), Regulations, 2015 (“SEBI Listing Regulations”), the
Board has carried out an annual evaluation of its own performance, performance of the
Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation criteria,
procedure and time schedule for the Performance Evaluation process for the Board, its
Committees and Directors.
The Board's functioning was evaluated on various aspects, including inter alia degree
of fulfillment of key responsibilities, Board structure and composition, establishment and
delineation of responsibilities to various Committees, effectiveness of Board processes,
information and functioning.
Directors were evaluated on aspects such as attendance and contribution at Board/
Committee Meetings and guidance/ support to the management outside Board/ Committee
Meetings. In addition, the Chairperson was also evaluated on key aspects of his role,
including setting the strategic agenda of the Board, encouraging active engagement by all
Board members and motivating and providing guidance to the Managing Director.
Areas on which the Committees of the Board were assessed included degree of fulfillment
of key responsibilities, adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entire
Board, excluding the Director being evaluated. The performance evaluation of the
Chairperson and the Non-Independent Directors was carried out by the Independent Directors
who also reviewed the performance of the Board as a whole.
The Nomination and Remuneration Committee also reviewed the performance of the Board,
its Committees and of the Directors.
The Chairperson of the Board provided feedback to the Directors on an individual basis,
as appropriate. Significant highlights, learning and action points with respect to the
evaluation were presented to the Board.
CORPORATE GOVERNANCE:
As required by Regulation 34 read with Schedule V of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements) Regulations 2015, a report on
corporate governance is appended along-with a certificate from the Auditors.
EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and
Administration) Rules, 2014, the extract of Annual Return in form MGT-9 is annexed as Annexure
A.
BOARD AND COMMITTEE MEETINGS:
A calendar of Board and Committee Meetings to be held during the year was circulated in
advance to the Directors. 4 (four) Board Meetings were convened and held during the year.
The Board has constituted an Audit Committee with Mr Narayan Ghumatkar as Chairman and
Mr. Manmohan Ahluwalia and Mr. Trivendra Singh as the Members. There have not been any
instances during the year when recommendations of the Audit Committee were not accepted by
the Board.
The Company has also constituted various other Committees viz. Nomination &
Remuneration Committee, Stakeholder Relationship Committee, Management and Finance
Committee and Sexual Harassment Committee.
Details of the composition of the Board and its Committees and of the Meetings held and
attendance of the Directors at such Meetings, are provided in the Corporate Governance
Report Attached to this Directors' Report.
The intervening gap between the Meetings was within the period prescribed under the Act
and the Listing Regulations.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that they
fulfill all the
requirements as stipulated in Section 149 (6) of the Companies Act, 2013 so as to
qualify themselves to be appointed as Independent Directors under the provisions of the
Companies Act, 2013 and the relevant rules.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors, to the
best of their knowledge and ability, confirm that:
a. in the preparation of the annual financial statements for the year ended March 31,
2019, the applicable accounting standards have been followed and there is no material
departures;
b. they have selected such accounting policies and applied them consistently and made
judgment and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as at March 31, 2019 and of the profit of the
Company for the year ended on that date;
c. they 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;
d. they have prepared the annual financial statements have been prepared on a going
concern basis;
e. they have laid down internal financial controls to be followed by the Company and
such internal financial controls are adequate and operating effectively;
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.
DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL
IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant material orders passed by the Regulators / Courts / Tribunal
which would impact the going concern status of the Company and its future operations.
Hence, disclosure pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules, 2014 is not
required.
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 Note 12 of the Notes to the financial
statements.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company familiarizes its Independent Directors with the Company, their roles,
rights, responsibilities in the company, nature of the industry in which the company
operates, business model of the company etc. through various programmers.
The details of such familiarization programmed shall be disclosed on the Company's
website at the following web link: http:// eskayknitindia.com/wp/
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 function is
defined in the Internal Audit Manual. To maintain its objectivity and independence, the
Internal Audit function reports to the Chairman of the Audit Committee of the Board &
to the Chairman & Managing Director.
The Internal Audit Department monitors and evaluates the efficiency 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 recommendations along with corrective actions
thereon are presented to the Audit Committee of the Board.
CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to the
Members of the Board and all employees in the course of day to day business operations of
the company. The Company believes in “Zero Tolerance” against bribery,
corruption and unethical dealings / behaviors of any form and the Board has laid down the
directives to counter such acts.
The code laid down by the Board is known as “code of business conduct” which
forms an Appendix to the Code. The Code has been posted on the Company's website
www.eskayknitindia.com. The Code lays down the standard procedure of business conduct
which is expected to be followed by the Directors and the designated employees in their
business dealings and in particular on matters relating to integrity in the work place, in
business practices and in dealing with stakeholders. The Code gives guidance through
examples on the expected behaviour from an employee in a given situation and the reporting
structure. All the Board Members and the Senior Management personnel have confirmed
compliance with the Code. All Management Staff were given appropriate training in this
regard.
MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Management Discussion & Analysis Report, which form an integral part of this
Report, are set out as separate Annexure, together with the Certificate from the auditors
of the Company regarding compliance with the requirements of Corporate Governance as
stipulated by SEBI Listing Regulations.
RELATED PARTY TRANSACTIONS:
All transactions entered by the Company with Related Parties were in the Ordinary
Course of Business and at Arm's Length pricing basis. There were no materially significant
transactions with Related Parties during the financial year 2018-19 which were in conflict
with the interest of the Company. Suitable disclosures as required under AS-18 have been
made in Notes to the financial statements.
The Company has also adopted Related Party Transaction Policy as required under
Regulation 23 of SEBI Listing Regulations.
The Board has approved the policy on Related Party Transactions and Material
Subsidiary. The policies have been uploaded on the Company's website, under the web link:
http://eskayknitindia.com/wp/related-party- transactions.
Material changes and commitments affecting the financial position of the Company which
have occurred between 31st March 2019 and 13th August, 2019.
There were no material changes and commitments affecting the financial position of the
Company between the end of financial year (31st March, 2019) and the date of the Report 13th
August, 2019.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in Section
188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure-B
to the Board's report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The Directors are happy to state that the relations between the Company and its
Employee remained cordial throughout the year. The Directors acknowledge and express their
appreciation for the contributions made by the employees at all levels. Focused attention
was given for knowledge updating and application of new technologies available to reduce
costs and to meet the business challenges.
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule
5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, none of the employees drew remuneration of Rs10,200,000/- or more per annum/
Rs. 8,50,000/- or more per month during the year or drew remuneration in excess of the
remuneration drawn by Managing Director or Whole-time Directors or Manager and does not
hold either by himself or through his spouse or dependent children 2 per cent or more
equity shares of the company. Disclosures pertaining to remuneration and other details as
required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided
in the Annexure-C forming a part of Annual Report.
In terms of the provisions of Section 136(1) read with its relevant proviso of the
Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent
to the members of the Company. The said information is available for inspection at the
Registered Office of the Company during working hours and any member interested in
obtaining such information may write to the Company Secretary and the same will be
furnished without any fee and free of cost.
CONSERVATION OF ENERGY:
a) Company ensures that the manufacturing operations are conducted in the manner
whereby optimum utilization and maximum possible savings of energy is achieved.
b) No specific investment has been made in reduction in energy consumption.
c) As the impact of measures taken for conservation and optimum utilization of energy
are not quantitative, its impact on cost cannot be stated accurately.
TECHNOLOGY ABSORPTION:
Company's products are manufactured by using in-house know how and no outside
technology is being used for manufacturing activities. Therefore no technology absorption
is required. The Company constantly strives for maintenance and improvement in quality of
its products and entire Research & Development activities are directed to achieve the
aforesaid goal.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
During the period under review there was no foreign exchange earnings or out flow.
REMUNERATION POLICY:
The Remuneration policy of the Company comprising the appointment and remuneration of
the Directors, Key Managerial Personnel and Senior Executives of the Company including
criteria for determining qualifications, positive attributes, independence of a Director
and other related matters has been provided in the Corporate Governance Report which is
attached to this Report.
RISK MANAGEMENT:
The Company has adopted a Risk Management Policy in accordance with the provisions of
the Act and SEBI Listing Regulations. It establishes various levels of accountability and
overview within the Company, while vesting identified managers with responsibility for
each significant risk.
The Internal Audit Department facilitates the execution of Risk Management Practices in
the Company, in the areas of risk identification, assessment, monitoring, mitigation and
reporting. Through this programme, each Function and Unit addresses opportunities and
risks through a comprehensive approach aligned to the Company's objectives. The Company
has laid down procedures to inform the Audit Committee as well as the Board of Directors
about risk assessment and management procedures and status.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Vigil Mechanism/ Whistle Blower Policy, to provide a formal
mechanism to the Directors and employees to report their concerns about unethical
behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or
ethics policy. The Policy provides for adequate safeguards against victimization of
employees who avail of the mechanism and also provides for direct access to the
Chairperson of the Audit Committee. It is affirmed that no personnel of the Company has
been denied access to the Audit Committee.
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view
to regulate trading in securities by the Directors and designated employees of the
Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits
the purchase or sale of Company shares by the Directors and the designated employees while
in possession of unpublished price sensitive information in relation to the Company and
during the period when the Trading Window is closed.
The Board is responsible for implementation of the Code. All Board Directors and the
designated employees have confirmed compliance with the Code.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has zero tolerance for sexual harassment at workplace and has adopted a
Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in
line with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide
protection to employees at the workplace and prevent and redress complaints of sexual
harassment and for matters connected or incidental thereto, with the objective of
providing a safe working environment, where employees feel secure. The Company has not
received any complaint of sexual harassment during the financial year 2018-19.
SAFETY, HEALTH AND ENVIRONMENT
Sustained and meticulous efforts continue to be exercised by the Company at all plants
of the Company, towards greener production and environment conservation. The Company
perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in
every employee, as well as vendors, by rigid compulsory annual training and refresher
courses, as well as frequent awareness programme. Mock drills of emergency preparedness
are regularly conducted at all the plants showing Company's commitment towards safety, not
only of its own men and plants, but also of the society at large.
Safety records, at all plants showed considerable improvement and accident statistics
showed downward trend. This was made possible by strict adherence to laid down procedures
and following of international guidelines. Involvement of workers in all safety matters
has been encouraged by their participation in shop floor safety meetings. To achieve the
goals, environment protection systems and processes are well in place. To meet the
challenge of environment protection in a proactive manner, unavoidable wastes are dealt
with in the most efficient and scientific way.
The health of employees and the environment in and around the Plant area have been
given due care and attention. The Company continued to comply with the prescribed
industrial safety environment protection and pollution control regulation at its
production plant, through periodic checks of the system involved and constant monitoring
to meet the standards set by the pollution control authorities, etc.
All the mills of the Company are eco-friendly and do not generate any harmful
effluents. They have facilities for captive power generation as a stand-by arrangement, to
meet any contingency. Safety devices have been installed wherever necessary, although both
the spinning and knitting activities are known to be quite safe and free from usual
hazards of water and air pollution.
INDUSTRIAL RELATIONS & HUMAN RESOURCES MANAGEMENT:
The Company is of firm belief that good Human Resource Management would ensure success
through high performance. HR strategy and plans of the Company are deeply embedded with
the organizational goals. In order to enhance the manpower productivity the goal is set to
increase the production capacity of the various plants and rationalize the manpower
through scientific study. All the operational goals of the top
management emanate from the business plan. The goals of MD are shared with his
subordinates who in turn share their goal with their respective subordinates and so on.
Regular visits by HR team are being made to all the plants to meet the employees and also
interaction meetings are conducted to get their feedback, based on which HR policies are
improved continuously. The process has resulted in better employee relationship.
The Company lays due emphasis on all round development of its human resource. Hence
training of the employees is aimed at systematic development of knowledge, skills,
aptitude and team work. Training is designed for the development of personal skills
necessary for the performance of the present job and to prepare them for future growth.
Individual development is given top priority to groom high caliber manpower.
FIXED DEPOSITS:
The Company has not invited/received any Fixed Deposits from the Public during the year
under report. INSURANCE:
The properties / assets of your Company are adequately insured.
Compliance with Secretarial Standard on Board and General Meeting
The Company has compiled with Secretarial Standard issued by the Institute of Company
Secretaries of India on Board Meetings and General Meetings.
AUDITORS:
Statutory Auditor:
M/s. Rishi Sekhri & Associates, Chartered Accountants, (Membership No. 126656 &
Firm Registration No.128216W) was appointed as Statutory Auditors for a period of Five
year commencing from the conclusion 30th AGM till Thirty Fifth Annual General Meeting of
the Company to be held on 2022, subject to ratification of their appointment at every AGM
if so required under the Act.
Cost Auditor:
As per the requirements of Central Government and pursuant to the provisions of Section
148 of the Companies Act, 2013 and Rules made thereunder, the Board of Director on
recommendation of the Audit Committee appointed Mr. Pradip Damania, Cost Accountant of the
Company for the financial year 2019-2020 and has recommended their remuneration to the
Shareholders for their ratification at the ensuring Annual General Meeting. The Company
carries out an audit of cost records every year.
Internal Auditor:
Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of
Directors of the Company had appointed Internal Auditor of the Company for the financial
year 2019-20 and Company carries out an Internal Audit on quarterly basis.
ACKNOWLEDGEMENT:
The Directors have pleasure in recording their appreciation of the assistance,
co-operation and support extended to your Company by the shareholders, all Government
Authorities, Financial Institutions, Banks, Consultants, Solicitors and Customers.
|
For and Behalf of the Board of Directors Sd/- |
| Place: Mumbai |
Trivendra Singh |
| Date: 13th August, 2019 |
Managing Director |
|
Din: 05240052 |
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