Dear Members,
The Directors present the 25th Annual Report together with the audited
accounts of your company for the year ended 31st March 2015.
1. FINANCIAL RESULTS
During the year under review, the company achieved an aggregate income
of Rs.3659.41 Lakhs. The highlights of the financial results are as
under:
Amount in (Rupees in '000)
Current Year Previous Year
2014-2015 2013-2014
Sales 363254.80 425662.71
Other Income 2686.09 2525.27
Gross Total Income 365940.89 428187.98
Profit before Interest, Depreciation 39810.15 42951.38
& Tax
Interest 19328.19 15559.09
Depreciation 16406.59 13848.61
Profit before Exceptional Items & 4075.37 13543.68
Extraordinary items and Tax
Exceptional Items - -
Profit before Tax and after Exceptional 4075.37 13543.68
Items & Extraordinary Items
Provision for Taxation 1761.34 4518.86
Profit after Tax 2314.03 9024.82
Balance in P&L A/c brought Forward 106474.63 97449.81
Adjustments under Schedule II of Companies (1192.34) -
Act,2013
Balance Available for Appropriation 107596.32 106474.63
Proposed Dividend 0.00 0.00
Tax on Proposed Dividend 0.00 0.00
Transfer to General Reserve 0.00 0.00
Balance carried to Balance Sheet 107596.32 106474.63
2. OVERVIEW AND REVIEW OF OPERATION
A review on division wise performance of the company is furnished
below:-
Tyre Division
The total income of the Tyre division for the year 2014-15 amounted to
Rs.1635.53 lakhs compared to Rs.2206.51 lakhs of in the previous year.
The profit before tax amounted to Rs. 73.97 lakhs as compared to profit
of Rs.71.15 lakhs previous year.
The Company is in process of effective reduction in its cost by growing
its productivity keeping the product quality intact. With the
reorganization of the merged units, the overall income reduced having
no adverse effect on profit.
Sadhurhat division
The unit has started its commercial production with effect from
01.12.2013. The unit is engaged in manufacturing MCP Tubeless Tires for
domestic market. The unit reported an income for the full year 2014-15
amounted to Rs. 671.36 lakhs as compared to the previous year Rs.
175.15 Lakhs (for a period of 4 months w.e.f. 01.12.2013) and the unit
reported the Profit before tax for the year 2014-15 of Rs. 47.45 lakhs
compared with previous year of Rs. (3.97) lakhs.
Due to preliminary & pre operative expenditure written off in its first
financial year the unit reported loss during the previous year whereas
from the current year the unit has started making profit. The unit
should increase its market reach and higher sales in the current year
to give better performance.
Wheel division
The total income of this unit for the year 2014-15 amounted to
Rs.348.71 lakhs compared to Rs.575.88 lakhs in the previous year. As in
the financial year 2014-15, the units has done the job work for other
group units at cost as a part of restructuring process which resulted
in change in structure of unit.
The unit reported the profit before tax for the year 2014-15 amounted
to Rs.3.95 lakhs compared to Rs. 106.46 lakhs in the previous year.
Plastic division
The total income of this unit for the year 2014-15 amounted to
Rs.145.08 lakhs compared to Rs.94.80 lakhs. The unit reported the
profit before tax for the year 2014-15 amounted to Rs.26.21 lakhs
compared to the loss of Rs. (2.53) lakhs.
The unit should perform better in the current years due to the increase
in production and capacity utilization.
Footwear division
The total income of the footwear division for the year 2014-15 amounted
to Rs. 946.30 lakhs compared to Rs1556.99 lakhs in the previous year.
The unit reported a loss before tax of Rs. (129.81) lakhs during the
year compared to loss of Rs. (47.87) lakhs in the previous year.
Due to adverse market condition and sluggish demand, the unit reported
a loss. The Company is taking steps to change the product and customer
mix for a stable business and specifically moving towards high value
added products and expecting turnaround in this business segment and
also we are working hard for further cost reduction for better bottom
line. Our tie up with VKC group has also started giving positive
results.
Engineering division
The total income of this unit for the year 2014-15 amounted to
Rs.607.24 lakhs compared to Rs.497.71 lakhs in the previous year.
The unit posted the profit before tax for the year 2014-15 amounted to
Rs.16.05 lakhs compared to Rs. 8.15 lakhs.
The Indian Rehab Care Equipment Market has stated accepting the Brand
"iCare" which was very encouraging for our company and the same is also
noticeable from the current year itself.
Company has always taken a long term view of this business and the
company is also in process to come with more similar products for the
disabled persons in the coming year. And the company is also expecting
very high demand due to weaker rupee and stronger USD & Chinese Yuan
due to which we will be very competitive not only in India but all
around the world. This currency situation will help us to increase our
sales quickly.
2. DIVIDEND
In order to strengthen the financial position of the company the Board
of Directors have decided not to recommend any dividend for the
Financial Year ended 31st March, 2015 and plough back the profits of
the company in its business.
3. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES
At present, the company does not have any subsidiary, Joint ventures or
associates.
4. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under Listing
agreement with Stock Exchange:-
A. Industry Structure & Developments:-
Krypton Industries Limited (KIL) had an average performance during last
year due to difficult market conditions and high input cost and
manufacturing expenses.
The company is mainly focused in market expansion in Indian Market as
well as overseas market for its tire and hospital/disabled support
equipment business. Company will open its sales depot in different
states for all of its products which will help to reach smaller dealer
and increase market penetration. Company is also planning to open sales
& marketing office in Europe for our rehab care parts sales & for
bicycle tires. Company is also focusing on high end products for
disables persons and to increase its product portfolio. We have started
working on de bottle necking our production facilities and to upgrade
our machinery with very minimal capital outlay which help us to enhance
our production capacity.
The company had a negative growth from its footwear business and the
company has also restructured the business to get better results in the
current and future years. The company is also focusing to change the
product and customer mix for a stable business. Company is also working
in reduction of cost and increasing its efficiency. In footwear segment
also we are looking to enter safety shoe segment which will help
company to achieve high turnover and high profitability.
B. Outlook and opportunities
Your Company has identified the following opportunities and future
building business areas:
The company is mainly focused on its tire and rehab care business which
also derives better profitability compare to previous year regardless
marginal growth of sales. Primarily, the PU tire for Bicycle, rehab
care products and industrial application tire business will be our main
focus this year and years to come for the domestic as well as
international market.
With hospital / disabled support equipment business, the company is now
recognized as a serious good quality supplier, the future looks very
promising. With some new quality certification of the products as
required for government orders, this product line will be better
positioned to do business with government tenders, defense, NGO's &
hospitals. With new government in place, Medical support to every
person seems a focus area for the new government, there will be more
opportunities for this business and the company is also in process to
come with more new advanced higher quality products for disabled
persons.
With new structuring of the footwear division, the cost control and
redefining on the business process will give incremental benefit in
future. Safety shoes business has huge potential in coming future and
we are working on it to give quality product to Indian markets.
C. Outlook on threats, risk and concern
1. Business Risks:
Company is more focused in its tires and wheel business, where the PU
Bicycle tires, is comparatively a new product in this line and is also
in its growing stage of market establishment and business stability.
Our tires are completely new to the market and we have a tough
competition with rubber tires and wheels which were easily available in
the market and globally prices of rubber has decreased substantially
which can impact our sales.
The company also had a tougher competition, in relation to its Hospital
/ disable support equipments business with that of Chinese products in
India as well as across the world. Also foreign currency fluctuation
can have adverse as well as positive impact our business.
Company is normally engaged in import of Raw Materials and export sales
during its course of business which exposes it to exchange fluctuation
and crude & petrochemicals prices, cost of manufacturing are also the
areas of concern which we are mitigating it by cost reduction in each
area possible.
Company also needed to improve its overall performance in both monetary
as well as non monetary terms by emphasizing its product quality &
market capture and increasing its sales and reducing its overall cost
of sales including reduction of Cost of raw materials and other fixed
and variable overheads.
2. Financial Risks:
Majority of raw material are imported, so any major fluctuation in US$
can affect the performance of the company. Although foreign exchange
risks somewhat balanced by exports and company is regularly covering
such risk.
The interest cost is still on the higher side although RBI started
reducing interest rates and banks will take some time to pass on the
benefit to borrowers. Company is exploring the other means to reduce
interest cost.
3. Legal & Statutory Risks
Company is complying regularly with all the regulatory requirements
with respect to manufacturing, taxations, statutory requirements,
company law, SEBI etc, with new laws coming in, this exercise will need
more inputs which company is working towards.
4. Political Risks
Any major change in local, national or international can effect the
business but as, at the moment, company does not have any business with
government entities, the risk is minimal. Although company is trying to
secure government business at the moment, this can impact positively as
well as negatively in a small percentage of growth of the company.
D. Internal Control System and their adequacy:
Your Company believes that Internal Control is a required principle of
governance that freedom of management should be exercised within a
framework of appropriate checks and balances. Your Company remains
committed to ensuring an effective internal control environment that
provides assurance on the efficiency of operations and security of
assets.
The company has an Audit Committee, the details of which have been
provided in the Corporate Governance Report. Internal auditor performs
their duty and audit committee reviews internal auditor reports and
other reports and provides suggestions for improvement /takes
corrective actions. The committee also meets the Company's Statutory
Auditors to ascertain, interalia, their views on the Adequacy of
Internal Control Systems in the company and keeps Board of Directors
informed from time to time.
E. Financial Performance
Over all financial Performance of the company is on right track but
needs lot of improvements and which your company will surely do this
year and in the years to come.
F. Human Resource Developments:
During the fiscal 2014-2015 company has 270 Persons on its payroll.
Apart from this company has generated indirect employment to more than
500 persons in nearby locations. Company is working on to restructure
the total organization to help its growth with further recruitment in
the top and middle management level at different positions.
5. SHARE CAPITAL
The paid up equity share capital as at March 31, 2015 is Rs. 14.69
Crores, divided into 1,46,97,130 equity shares of face value Rs. 10
each.
During the year under review, the Company has not issued any equity
shares with differential rights or sweat equity shares or under any
employee stock option.
6. DEPOSITS
During the year under review, the Company has neither invited nor
accepted any fixed deposits from the public within the meaning of
section 73 of the Companies Act, 2013 and the rules made there under.
The company has also repaid all the deposits within 31st March, 2015
which were accepted before the Commencement of the Companies Act, 2013
and falls in ambit of the Deposits as specified under Companies Act,
2013 and the Companies (Acceptance of Deposits) Rules, 2014.
7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The particulars of the loans given, Investments made, Guarantees or
Securities provided during the year have been disclosed under the Note
no. 13, 14 & 32 to the financial statement.
8. PARTICULARS OF THE CONTRACTS OR ARRANGEMENTS WITH THE RELATED
PARTIES
All transactions/ contracts/arrangements entered with the Related
Parties as defined under section 188 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement during the financial year were in
the Ordinary course of business and on arm's length basis and without
any conflict of interest. Moreover, the company has not entered into
any transaction of material nature with the promoters, directors,
management, subsidiaries or any significant related party during the
financial year that may have potential conflict with the interests of
the company at large.
Since all the related party transactions entered into by the Company
were in the ordinary course of the Business and on an arm's length
basis. Thus, Form AOC-2 is not applicable to the company.
The details of the transactions/ contracts /arrangements held with the
related parties have been disclosed in the Notes to the financial
statements.
9. MATERIAL CHANGES AND COMMITMENTS
There has been no material changes have been occurred affecting the
financial position of the company in between the period from the close
of the financial year of the company to which the Balance Sheet relates
and the date of the report.
10. AUDITORS
Statutory Auditors & their Report
M/s. Jagdish Agarwal & Associates (Registration No.320253E), Auditors
of the Company have been appointed at the Annual General Meeting on
August 27, 2014 for a term of 3 years, subject to the ratification by
the members ateach Annual General Meeting. The Company has received
consent of the Auditors for continuation of office for the Current
year.
The observations made by the Statutory Auditors in their report for the
financial year ended 31st March 2015 read with the explanatory notes
therein are self-explanatory and therefore, do not call for any further
explanation or comments from the Board under Section 134(3) of the
Companies Act, 2013. The Auditors' Report does not contain any
qualification, reservation or adverse remark.
Secretarial Audit Report
Pursuant to section 204 of the Companies Act, 2013, the Board has
appointed M/s M.R. & Associates, Practicing Company secretaries to
undertake the audit of Secretarial and other related records of the
company. The Secretarial Audit Report issued by M/s MR & Associates in
Form MR-3 for the financial year ended 31st March, 2015, is also
annexed herewith in Annexure-VI. Your directors wish to clarify the
observations made by the Auditors regarding the cases being shown as
pending in the Bankshall Courts which were actually being resolved
during the past years itself and for which a letter is being sent to
the Registrar for removal of such cases from the pending list.
Your Directors also clarify that the listing fees of the Calcutta Stock
Exchange for the financial year is not being paid as the said stock
exchanges is suspended from long and expected that the exchange will
get de-recognised soon.
Cost Audit & Records
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Amendment Rules, 2014 the Company is
only required to maintain its cost records in respect of the products
being manufactured by the company. The Cost records are duly maintained
by the company and the same is being also filed with the Registrar as
required.
11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGES EARNINGS AND OUT GO:
The information as required under clause (m) sub section (3) of section
134 of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts) Rule, 2014 is annexed herewith in Annexure- I.
12. EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 forming part of the
Directors Report is duly attached herewith in Annexure-II.
13. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNAL IMPACTING GOING CONCERN STATUS AND COMPANY'S
OPERATIONS IN FUTURE
There were no significant & material orders passed by the regulators or
courts or tribunal which would impact the going concern status and
future operations of the company.
14. LISTING AT STOCK EXCHANGES
The equity shares of the company are listed on the stock exchanges at
Kolkata, Mumbai, Delhi and Jaipur. The annual Listing fees have been
paid for the financial year 2014-2015.
15. CORPORATE GOVERNANCE
A separate section on corporate governance together with a certificate
from the Auditors of the company regarding full compliance with the
provisions of Clause 49 of the Listing Agreement with the stock
exchanges forms a part of the Report under Annexure- IV.
16. MEETINGS
During the year under review, ten Board Meetings and four Audit
Committee Meetings were convened and held, the dates and attendance in
by each Directors are given in the Corporate Governance Report. The
maximum time gaps between the Meetings were within the period as
prescribed under the Companies Act, 2013 and Clause 49 of the Listing
Agreement.
The details of constitution of the Board and its Committee are given in
the Corporate Governance Report.
17. DIRECTORS
The company at its Board Meeting held on 18th March, 2015, has accepted
the resignation of Mr. Tansukh Gulgulia (DIN:00404343) from the board
of the Company with immediate effect and also appointed Mr. Ravi
Prakash Pincha (DIN:00094695) and Mrs. Vimala Devi Bardia (DIN:
07125170) as an Additional Director who will holds the office till the
conclusion of the ensuing Annual General Meeting.
The Company has received a notice as per the provisions of section 160
of the companies Act, 2013, from a member proposing the appointment of
Mr. Ravi Prakash Pincha. The company has also received a confirmation
from Mr. Ravi Prakash Pincha stating that he meets the criteria as
provided under section 149(6) of the companies Act, 2013 and in the
opinion of Board he is a person of integrity and posses relevant
expertise and experience for being appointed as Independent Director.
In accordance with the provision 152 (6) of the Companies Act, 2013 Mr.
T C Bachhawat (DIN:00580356), retires by rotation as director at the
forthcoming Annual General Meeting and is eligible for reappointment.
None of the Directors of the company are disqualified for being
appointed as Directors as specified under section 164 of the Companies
Act, 2013 and the rules made thereunder.
18. DECLARATION BY INDEPENDENT DIRECTOR
The Company has duly received the declaration from all the Independent
Directors as laid under section 149(6) of the Companies Act, 2013 and
clause 49 of the Listing Agreement.
19. KEY MANAGERIAL PERSONNEL
Mr. Vinay Sipani, Senior Accounts Executive of the company who is also
a member of the Institute of the Chartered Accountants of India has
been designated as the Chief Financial Officer of the Company with
effect from September 30, 2014.
Mr. Tarun Kumar Das, Company Secretary has resigned from the service of
the company with effect from September 1, 2014 and Miss Arti Bothra as
the Company Secretary cum Compliance officer of the company has been
appointed on September 30, 2014.
20. REMUNERATION POLICY
The Board, on recommendation of the Nomination & Remuneration Committee
has framed a policy for selection and appointment of Directors, Senior
Management and their remuneration which includes criteria for
performance evaluation of non-executive and executive directors. A
detailed Policy is also annexed herewith in Annexure- V.
21. RISK MANAGEMENT POLICY
In accordance with the Clause 49 of the Companies Act, 2013, the Board
of Directors of the Company are responsible for framing, implementing
and monitoring the Risk management plans of the Company. The Company
has also framed a Risk Management Policy defining the roles and
responsibilities of the Committee and the same has been approved by the
Board of Directors of the Company.
The Risk Management Policy is available on the website of the company,
www.kryptongroup.com.
22. VIGIL MECHANISM/WHISTLE BLOWER POLICY
In accordance with the provision of the Companies Act, 2013 read with
the Rules made therein and clause 49 of the Listing Agreement, every
listed company shall establish a Vigil Mechanism for the directors and
employees to report their genuine concerns and grievances. A framed
Vigil Mechanism is available on the company's website,
www.kryptongroup.com.
The Audit Committee is entrusted with the responsibility to oversee the
Vigil Mechanism.
23. BOARD EVALUATION
In accordance with the provisions of Companies Act, 2013 and Clause 49
of the Listing Agreement, the Board has carried out a formal Annual
performance evaluation of its own performance, directors individually
as well as the working of its various committees. The manner in which
the evaluation has been carried out is explained in the Corporate
Governance Report.
24. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) of the Companies Act, 2013, your
Directors hereby states:
* That in the preparation of the Annual Accounts, the applicable
Accounting Standards have been followed with proper explanation
relating to material departures if any;
* That the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are responsible
and prudent so as to give true and fair view of the state of affairs of
the company at the end of the financial year and of the profit of your
company for that period.
* 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
your company and for preventing and detecting fraud and other
irregularities, and
* That the directors have prepared the annual accounts on a going
concern basis and
* That proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively, and
* That the systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
25. PARTICULARS OF EMPLOYEES
The disclosure required under section 197(12) of the Companies Act,
2013 read with the Rule 5(1) of the Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith
in Annexure- III.
Further, in accordance with the section 197(12) of the Companies Act,
2013 read with the Rules 5(2) & 5(3) of the Companies (Appointment &
Remuneration of Managerial Personnel) Rules, 2014, the company hereby
confirm that:
* There was no employee employed throughout the financial year 2014-15
who was in receipt of remuneration in the financial year which, in
aggregate was not less than sixty lakh rupees;
* There was no employee employed for a part of the financial year
2014-15 who was in receipt of remuneration for any part of the
financial year which, in aggregate was not less than five lakh rupees
per month;
* There was no employee employed throughout the financial year 2014-15
or a part thereof, who was in receipt of remuneration in the financial
year which, in aggregate is in excess of that drawn by the Managing
Director or whole time director or manager and hold by himself or along
with his spouse and dependent children, not less than the two percent
of the equity shares of the company.
Your Directors state that during the year under review, there were no
cases filed pursuant to the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.
26. ISO 9001-2008 & IS 7454
Your company operates in ISO 9000 quality assurance system as per the
ISO 9001-2008 standards. The Audit was duly carried out during the year
2014-15. The new standards are mainly customer oriented and they will
help our Company to get much better controls to improve with best
customer satisfaction standards.
The company has been granted the license by Bureau of Indian Standards
(BIS) to use Standard Mark i.e. IS 7454 in respect of Rehabilitation
equipment- Wheelchairs Folding and Adult size according to which we will
manufacture highest quality of wheelchairs as per the specification.
27. APPRECIATION
Your Directors take this opportunity to record their appreciation for
the continued and sustained support and co-operation extended to the
Company by the Government of India, State Governments, Financial
Institutions and Banks, Dealers and Customers, Suppliers, Transporters,
Employees, Shareholders and all other Stakeholders.
Cautionary Note:
Certain statements made in the "Director's Report" and "Management
Discussion & Analysis Report " which seek to describe the company's
objectives, projections, estimates, expectation or predictions etc may
constitute "forward looking statements" within the meaning of
applicable laws and regulations. Actual result may differ from such
expectations, projections, etc., whether express or implied. Several
factors could make significant difference to the Company's operations.
These include climatic conditions and economic conditions affecting
demand and supply, government regulations and taxation, natural
calamities, etc. which the company doesn't have any direct control.
Registered Office : Falta Special Economic Zone By Order of the Board
Sector-1, Plot-31&32, Falta For Krypton Industries Limited
24-Parganas (S), Pin-743504
West Bengal
CIN : L25199WB1990PLC048791
Pradeep Kumar Singh
Chairman
Date: 30.05.2015 (DIN : 00386800)
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