To The Members of Kiri Industries Limited
The Directors have pleasure in presenting 14th Annual Report together
with Audited Accounts of the Company for the financial year ended on
31st March, 2012.
REVIEW OF STANDALONE PERFORMANCE:
(Rs. In Lacs)
Particulars 2011-12 2010-11
Net Sales and Other income 53704.08 57658.26
Profit Before Finance Cost, Depreciation,
Tax and Prior period adjustments 8735.22 11396.37
Less : Finance cost 5238.86 4389.28
Depreciation 3025.62 1861.55
Prior Period Adjustments 21.54 16.25
Profit before taxation and Extra ordinary Items 449.20 5129.29
Less : Extra Ordinary Items 2184.12 1283.88
(Loss)/Profit Before Taxation (1734.92) 3845.41
Less : Provision for Taxation 301.21 770.16
Deferred Tax 322.81 539.88
Add : MAT Credit Entitlement 0.00 (769.65)
Net (Loss)/ Profit After Tax (2358.94) 3305.02
Add : Surplus Brought Forward 9463.27 6654.78
Profit Available for Appropriation 7104.33 9959.80
1. Dividend on Equity Shares and tax thereon 0.00 331.23
2. Transferred to General Reserve 0.00 165.30
3. Debenture Redemption Reserve 800.00 0.00
Balance Carried to Balance Sheet 6304.33 9463.27
During the year under review, the Company has recorded a total income
of Rs. 53704.08 Lacs as against Rs. 57658.26 Lacs a decrease of 6.86
the performance was impacted as the worldwide economy went through
turmoil. Across the world, on account of economic crisis in various
countries, demand has gone sluggish and hence we could see under
utilization of our dyes production capacities making the same as loss
making units. Pile up of inventories on lack of demand has also added
to the wounds of the colours business. Profit before Finance Cost,
Depreciation, Tax and Prior period adjustments decreased from Rs.
11396.37 Lacs to Rs. 8735.22 Lacs in the reporting year, a decline by
23.35% as compared to the previous financial year. The sharp
depreciation of Rupee as against Dollar in FY 2011-12 had added to the
adverse impact of the company''s performance and for the first time in
the company''s history it reported a Net Loss. Out of the total Loss for
the year 2011-12 of Rs. 2358.94 Lacs as against a Net Profit of Rs.
3305.02 Lacs in the preceding financial year 2010-11, Rs. 2184.12 Lacs
is on account of forex losses.
REVIEW OF CONSOLIDATED PERFORMANCE:
(Rs. In Lacs)
Particulars 2011-12 2010-11
Revenue 410883.51 368182.11
Cost of Sales (306568.00) (273972.70)
Gross Profit 104315.51 94209.41
Expenditure (99165.84) (102878.86)
Other Income 11442.75 7148.10
Profit/(Loss) from Operating activities 16592.42 (1521.35)
Finance Cost (21161.58) (11079.70)
Loss before taxation (4569.16) (12601.05)
Income tax (expenses)/Credit (2299.86) 1360.59
Loss for the year (6869.02) (11240.46)
Other Comprehensive (Loss)/Income (388.31) 2424.78
Total Comprehensive (Loss) (7257.33) (8815.68)
During the financial year under review, the consolidated revenue
increased by 11.59% to Rs. 410883.51 Lacs from Rs. 368182.11 Lacs on
account of sustained efforts of the Management. The Cost of sales
increased by 11.90% as compared to the previous financial year from Rs.
273972.70 Lacs to Rs. 306568.00 Lacs. The gross profit of the Company
increased from Rs. 94209.41 Lacs to Rs. 104315.51 Lacs, showing an
increase by 10.73% as compared to the previous financial year. The
finance cost increased by 91% from Rs. 11079.70 Lacs to Rs. 21161.58
Lacs, mainly on account of increased borrowings. However, the total
comprehensive loss for the year has been reduced by 17.68% to Rs.
7257.33 Lacs from Rs. 8815.68 Lacs that of previous financial year.
In view of losses incurred during the financial year 2011-12, your
Directors do not recommend any Dividend for the year under review.
NON CONVERTIBLE DEBENTURES:
During the year under review, your Company has issued 400 Secured
Redeemable Non Convertible Debentures (NCDs) of Rs. 10.00 Lacs each,
aggregating to Rs. 4000.00 Lacs. The NCDs carry coupon rate of 10.75%
p. a. and redemption premium of 2% is payable on redemption of NCDs.
SUBSIDIARIES AND CONSOLIDATED FINANCIAL STATEMENTS:
As per General Circular No: 2/2011 dated 8th February, 2011 issued by
the Ministry of Corporate Affairs, Government of India, the Company has
not attached the Balance Sheet, Statement of Profit and Loss and other
documents of the subsidiary companies with the Balance Sheet of the
Company. The Company has prepared Consolidated Financial Statements and
its subsidiaries in accordance with the International Financial
Reporting Standards (IFRS). The same has been attached with the Annual
Report of the Company. The summary of financial information of each of
the subsidiary companies is attached herewith and forms part of the
The Company will provide the annual accounts of its subsidiary
companies and the related detailed information on the specific request
made by any shareholder(s). The said annual accounts are open for
inspection at the Registered Office of the Company during the business
hours on all working days, except Sunday and public holidays.
The Equity Shares of your Company are listed and actively traded on the
Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of
India Limited (NSE). The Company has paid annual listing fees to the
both stock exchanges for the year 2012- 2013. The Secured Redeemable
Non Convertible Debentures are listed on the Bombay Stock Exchange
Mr. Shanker R. Patel, Director of the Company retires by rotation at
the forthcoming Annual General Meeting and being eligible, offers
himself for re-appointment. A brief profile of Mr. Patel as required
under clause 49 of the Listing Agreement is given as Annexure to the
Mr. Yamal A. Vyas had resigned as a Director w.e.f 15th October, 2011
and Mr. Ajay Patel had resigned as a Director w.e.f. 14th August, 2012.
The Board of Directors places on record their sincere appreciation for
the valuable services rendered by them during their tenure.
The Board of Directors of the Company has, at its meeting held on 13th
February, 2012, appointed Mr. V. Anish Babu as a Nominee Director of
AUDITORS AND AUDITORS'' OBSERVATION IN AUDIT REPORT:
M/s. V. D. Shukla & Co., Chartered Accountants, Ahmedabad, Statutory
Auditors of the Company, retires at the ensuing Annual General Meeting
and are eligible for re-appointment. They have issued a certificate
stating that their appointment, if made, would be within the limits
prescribed under Section 224(1B) of the Companies Act, 1956.
In respect of the auditors observation regarding default in repayment
of principal and interest to banks and financial institutions, it is
hereby clarified that the said default in payment was temporary in
nature due to mismatches in cash flow on account of delay in
realization of receivables from the customers and global slowdown in
dyes and chemicals industries.
In respect of auditors observation regarding irregularity in payment of
statutory dues, it is hereby clarified that the said delay was due to
mismatches in cash flow and tight liquidity position of the Company.
As per notification F. No. 52/26/CAB-2010, dated January 24, 2012,
issued by the Ministry of Corporate Affairs, Government of India, the
Company is required to appoint a Cost Auditor for audit of the cost
accounting records for the financial year 2012-13. Pursuant to the
provisions of Section 233B read with Section 224(1B) of Companies Act,
1956, M/s. V. H. Savaliya & Associates had given their consent to act
as Cost Auditors of the Company and accordingly, the Board of Directors
at their meeting held on May 14, 2012, appointed them as Cost Auditors
of the Company for the Financial Year 2012-13.
The Central Government has approved the appointment of cost auditors
for conducting Cost Audit for the financial year 2012-13.
During the year under review, your Company has not accepted any
deposits as per the provisions of section 58A of the Companies Act.
DIRECTORS'' RESPONSIBILITY STATEMENT:
In compliance of Section 217(2AA) of the Companies Act, 1956, with
respect to Directors'' Responsibility Statement, it is hereby confirmed:
1. That in the preparation of the annual accounts for the financial
year ended 31st March, 2012, all applicable accounting standards have
been followed and no material departure have been made from the same.
2. That the Directors have selected appropriate accounting policies and
applied them consistently and made judgments and estimates that were
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 2011-12 and
of the loss of the company for the year under review.
3. That the Directors have taken proper and sufficient care to the best
of their knowledge and ability, for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 1956 for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities.
4. That the Directors have prepared the annual accounts for the
financial year ended 31st March, 2012 on a ''going concern'' basis.
The relations with the employees have been cordial throughout the year.
Your Directors place on record their sincere appreciation in respect of
the services rendered by the employees of the Company at all levels.
PARTICULARS OF EMPLOYEES:
The information required under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, is required to be set out in Directors1 Report. As per the
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
report is being sent to all the shareholders of the Company excluding
the aforesaid information. Any shareholder interested in obtaining the
particulars may obtain it by writing to the Company Secretary of the
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNING AND OUTGO:
Additional information on conservation of energy, technology
absorption, foreign exchange earning & outgo as required to be
disclosed in term of Section 217(1)(e) of the Companies Act, 1956, read
together with the Companies (Disclosures of Particulars in the Reports
of Board of Directors) Rules, 1988, is given as an annexure to this
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS:
A separate report on the Corporate Governance and Management Discussion
and Analysis Report, along with the Certificate from the Statutory
Auditors of the Company in compliance with clause 49 with the Listing
Agreement is annexed herewith and forms part of this Annual Report.
QUALIFYING PERSONS FOR INTER SE TRANSFER OF SHARES:
As per the information provided by the promoters and as required under
regulation 10(1)(a) of Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers) Regulations, 2011
persons constituting qualifying persons as defined in the said
regulations is given as under:
(1) Mr. Pravin Kiri, (2) Mr. Manish Kiri, (3) Mrs. Aruna Kiri, (4) Mrs.
Anupama Kiri, (5) Ms. Amisha Kiri, (6) Master Hemil Kiri, (7) Synthesis
International Limited, (8) Kiri Infrastructure Private Limited, (9)
DyStar Global Holdings (Singapore) Pte. Ltd. (formerly known as Kiri
Holding Singapore Private Limited), (10) Kiri International (Mauritius)
Private Limited, (11) Lonsen Kiri Chemical Industries Limited, (12)
Kiri Investment and Trading Singapore Private Limited, (13) Kiri
Peroxide Limited, (14) S.M.S. Chemicals Co. Limited, (15) APK Advisory
Services Private Limited, (16) Chemhub Exim Private Limited, (17)
Chemhub Tradelink Private Limited.
Your Directors wish to place on record their sincere appreciation for
the support received from the government, bankers and financial
institutions, customers, suppliers, business associates and
shareholders and look forward for their continues support in the
future. Your Directors would also like to place on record, sincere
appreciation for significant contributions made by the employees
through their dedication and commitment towards the Company.
For and on behalf of the Board of Directors
Place : Ahmedabad Pravin A. Kiri
Date : 3rd September, 2012 Chairman