To
The Members
Konark Synthetic Limited
Your Directors present the 39th Annual Report together with the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended on 31st March 2023.
FINANCIAL HIGHLIGHTS:
(Rs. in Lakhs)
-
)
REVIEW OF BUSINESS OPERATIONS:
During the year under review your company earned a revenue from operations of Rs. 4736.37 lakhs as compared to Rs. 4009.76 Lakhs in the previous financial year. The company suffered a loss after tax of Rs. (873.11) Lakhs as Compared to a loss of Rs. (44.74) lakhs in the previous financial year
SHARE CAPITAL:
There was no change in Share Capital of the Company during the year 2022 - 23. As on 31st March, 2023, the paid up share capital of the Company stood at Rs.5,80,80,000/-(Rupees Five Crores Eighty Lakhs and Eighty Thousand Only) divided into 58,08,000 Equity shares of Rs. 10/ - (Rupee Ten Only) each.
DIVIDEND:
To conserve the resources for future business requirements of the Company, your Directors do not recommend any payment of dividend for the year under review.
RESERVES:
During the year the Company has not transferred any amount to General Reserves.
PUPLIC DEPOSITS:
During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.
EXTRACT OF ANNUAL RETURN:
The Annual Return as referred in Section 134(3)(a) read with Section 92 (3) of the Companies Act, 2013 and Rule 12 of Companies (Management and Administration) Rules, 2014 the Annual Return in e-form MGT-7 for the financial year ended March 31,2023 is placed on the website of the Company at https://konarkgroup.co.in/annual-return/.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management and Administration) Rules,
2014 and the Articles of Association of the Company, Mr. Shonit Dalmia, Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment and your Board recommends his re-appointment.
The Following changes took place in the composition of the Board and Key Managerial Personnel:
Mr. Shonit Dalmia (DIN: 00059650) resigned from the office of Non-Executive Director w.e.f 18th July 2022. Further Mr. Shonit Dalmia was appointed as Additional Director designated as Managing Director w.e.f. 18th July, 2022 subject to approval of shareholders at 38th Annual General Meeting. At the 38th Annual General Meeting held on Thursday 28th September, 2022, the members of the Company approved the Appointment of Mr. Shonit Dalmia as Managing Director w.e.f 18th July, 2022 for a period of 3 years.
Mr. Amitabh Kejriwal (DIN: 00005864) Managing Director of the Company resigned from the office w.e.f 24th June, 2022
Mr. Satish Deshmukh (DIN: 03535235) Independent Director of the Company resigned from the office w.e.f 28th June, 2022
Ms. Suvriti Gupta (DIN: 07766090) Independent Women Director of the Company resigned from the office w.e.f 18th July, 2022
Mr. Anshul Agrawal (DIN: 02060092) was appointed as Additional Non -Executive Director w.e.f 28th June, 2022 subject to the approval of shareholders at this Annual General Meeting. At the 38th Annual General Meeting held on Thursday 28th September, 2022, the members of the Company approved the Appointment of Mr. Anshul Agrawal (DIN: 02060092) as Non Executive Non Independent Director w.e.f 28th June, 2022.
Mr. Riyazuddin Khan (DIN: 09448909) was appointed as Additional Non -Executive Independent Director w.e.f 28th June, 2022 subject to the approval of shareholders at this Annual General Meeting. At the 38th Annual General Meeting held on Thursday 28th September, 2022, the members of the Company approved the Appointment of Mr. Riyazuddin Khan (DIN: 09448909) as Non-Executive Independent Director w.e.f 28th June, 2022 for a period of 5 years.
Ms. Priyanka Jha (DIN: 09671850) was appointed as Additional Non -Executive Independent Women Director w.e.f 18th July, 2022 subject to the approval of shareholders at this Annual General Meeting. At the 38th Annual General Meeting held on Thursday 28th September, 2022, the members of the Company approved the Appointment of Ms. Priyanka Jha (DIN: 09671850)) as Non-Executive Independent Director w.e.f 18th July, 2022 for a period of 5 years.
.Mr. Indrajit Kanase (Membership No.A51146 ) was appointed as Company Secretary and Compliance Officer w.e.f 1st April, 2022 who resigned from the office of Company Secretary and Compliance Officer w.e.f 1st August, 2023
DECLARATION OF INDEPENDENT DIRECTORS:
The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Ministry of Corporate affairs (MCA) vide notification no. G. S. R. 804(E) dated 22nd October, 2019 and effective from 1st December, 2019 has introduced the provision relating to inclusion of name of Independent Directors in the data bank maintained by Indian Institute of Corporate Affairs (IICA). All Independent Director of the Company are registered with IICA.
In the opinion of the Board, the Independent Directors hold highest standard of Integrity and possess the requisite qualification, experience, expertise and proficiency.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met once during the year on 14th February, 2023, to review the working of the Company, its Board and Committees.
The meeting decided on the process of evaluation of the Board and Audit Committee. It designed the questionnaire on limited parameters and completed the evaluation of the Board by Non-Executive Directors and of the Audit committee by other members of the Board. The same was compiled by Independent authority and informed to the members.
COMPANY?S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:
The policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Directors and also remuneration for Key Managerial Personnel and other employees is attached herewith and marked as ‘Annexure I'.
ANNUAL PERFORMANCE EVALUATION BY THE BOARD:
Pursuant to the provisions of the Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders' Relationship Committees. The Board has devised questionnaire to evaluate the performances of each of executive and non-executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board have from each of the directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas:
i. Attendance at Board Meetings and Board Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth of Company and its performance;
iv. Providing perspectives and feedback going beyond information provided by the management.
The details of the programmes for familiarization of 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 and related matters are put up on the website of the Company at the link: http://www.konarkgroup.co.in/investor relation/policies/Familiarisation programme for Independent Directors.
MEETINGS OF THE BOARD:
The Board meets at regular intervals to discuss and decide on Company / business policy and strategy apart from other Board business. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings.
The Board met Nine times during the financial year, the details of which are as under:
1. 01.04.2022
2. 30.05.2022
3. 28.06.2022
4. 18.07.2022
5. 13.08.2022
6. 14.09.2022
7. 14.11.2022
8. 14.02.2023
9. 04.03.2023
DIRECTORS? RESPONSIBILITY STATEMENT:
Your Directors, to the best of their knowledge and belief and according to the information and explanation obtained by them and as required under Section 134(3)(c) of the Companies Act, 2013, state that:
a. in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;
b. the directors 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 as at 31st March, 2023 and of the loss of the company for that period;
c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d. the directors have prepared the annual accounts on a going concern basis;
e. the directors 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. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF MANEGERIAL REMUNERATION AND OTHER DETAILS:
Disclosure with respect to the remuneration of Directors and employees as required under Section 197(12) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith and marked as ‘AnnexureII?.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS:
As on 31 st March 2023, the Company has one subsidiary company i.e. India Denim Limited and one Associate Company i.e Konark Infratech Private Limited. During the year, the Board of Directors reviewed the affairs of the subsidiary Company. As per Section 129(3) of Companies Act, 2013, the Company has prepared a consolidated financial statement of the Company, along with India Denim Limited (Subsidiary) and Konark Infratech Private Limited (associate company), which form part of the Annual Report. Further, a statement containing the salient features of the financial statements of the subsidiary in the prescribed format AOC-1 is attached herewith and marked as ‘Annexure III?. The statement also provides the details of performance and financial position of the subsidiary and associate.
In accordance with the provision of Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of its subsidiary, are available on our websit https://konarkgroup.co.in/subsidiaries/. These documents will also be available for inspection at the registered office of the Company and of the subsidiary company during business hours on all working days and during the Annual General Meeting.
The Company has one associate company namely Konark Infratech Private Limited by virtue of its holding of more than 20% of the respective equity share capital of this company.
COMMITTEES OF THE BOARD
During the year, in accordance with the Companies Act, 2013, the Board re-constituted some of its Committees. There are currently three Committees of the Board, as follows:
• Audit Committee
• Nomination and Remuneration Committee
• Stakeholders' Relationship Committee
The Details of Number of Meetings held and composition of Committee is as under:
The Audit Committee met six times during the year under review as under
1. 30.05.2022
2. 28.06.2022
3. 18.07.2022
4. 13.08.2022
5. 14.11.2022
6. 14.02.2023
The Composition of Audit Committee is as under:
The Nomination and Remuneration Committee met four times during the year under review as under
4. 14.02.2023
The Composition of Nomination and Remuneration Committee is as under:
The Stakeholder Relationship Committee met Six times during the year under review as under
The Composition of Stakeholder Relationship Committee is as under:
RISKS AND AREAS OF CONCERN:
The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-
business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. All major properties of the Company are insured.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT 2013:
All transactions with the related parties entered during the year are ongoing and on arm's length basis. No Material Related Party Transaction was entered during the year by your Company as per Section 188 of the Companies Act, 2013. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act, 2013 in Form AOC-2 is not applicable.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
The details as required under Section 186 of the Companies Act, 2013 of loans and guarantee made by your Company during the financial year 2022-23 are given under Notes to Accounts on financial statements. The Company has not made any investments during the year.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS IN FUTURE:
There was no significant or material order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on Company's operations in future.
INTERNAL FINANCIAL CONTROL WITH REFRENCE TO THE FINANCIAL STATEMENTS:
The Company has Internal Financial Control System commensurate with the size, scale and complexity of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system in place, its compliance with operating systems, accounting procedures and policies.
MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.
WHISTLE BLOWER/VIGIL MECHANISM POLICY:
The Company has a Vigil Mechanism / Whistle Blower Policy on our website www.konarkgroup.co.in. to deal with instance of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases. The details of the Vigil mechanism Policy is posted on the website of the Company at https://konarkgroup.co.in/wp-content/uploads/2016/04/Vigil-Mechanism- Policy.pdf. We affirm that during the financial year 2022- 23 no employee or director was denied access to the Audit Committee.
STATUTORY AUDITOR:
The Members at the 37th Annual General Meeting of the Company held on 30th September, 2021, appointed M/s Jhunjhunwala Jain & Associates LLP, Chartered Accountants, Mumbai (FRN: 113675W), as Statutory Auditors of the Company for a period of 5 (five) years and who shall hold such office from the conclusion of 37th Annual General Meeting till the Conclusion of 42nd Annual General Meeting to be held for the financial year 2025-26. M/s Jhunjhunwala Jain & Associates LLP, Chartered Accountants and Statutory Auditors of the Company have tendered their resignation w.e.f 14th August, 2023 for non-acceptance of their request by the Audit Committee and the Board for increase in remuneration for carrying out audit services from the financial year 2023-24 onwards. This has resulted in a casual vacancy in the office of Statutory Auditors of the Company. Accordingly, the Board of Directors of the Company at their meeting held on 5th September, 2023, on the recommendation of Audit Committee, approved and recommended the appointment of M/s Bhuwania & Agrawal Associates, Chartered Accounts, Mumbai having FRN: 101483W and Peer Review Certificate No. 014197 issued by Peer Review Board of ICAI , as Statutory Auditors to fill the casual vacancy caused by the resignation of M/s Jhunjhunwala Jain & Associates LLP. Statutory Auditors who shall hold such office from 15th August, 2023 till the conclusion of 39th Annual General Meeting of the Company. M/s Bhuwania & Agrawal Associates, Chartered Accounts, Mumbai, have given their consent and eligibility to this effect.
Further, the term of M/s Bhuwania & Agrawal Associates, Chartered Accounts, Mumbai having FRN: 101483W and Peer Review Certificate No. 014197issued by Peer Review Board of ICAI as Statutory Auditors to fill the casual vacancy caused by the resignation of M/s Jhunjhunwala Jain & Associates LLP. Statutory Auditors expires at the conclusion of 39th Annual General Meeting and being eligible have given their consent and eligibility for appointment as Statutory Auditors of the Company; .
Subject to the approval of members it is now proposed to appoint M/s Bhuwania & Agrawal Associates, Chartered Accounts, Mumbai having FRN:
101483W and Peer Review Certificate No. 014197 Issued by Peer Review Board of ICAI as Statutory Auditors for a period of 5 (five) years from the conclusion of 39th Annual General Meeting till the conclusion of 44th Annual General Meeting.
the Board of Directors of the Company based on the recommendation of the Audit Committee, unanimously recommends the Ordinary Resolution as set out in Item No.3 and 4 of this Notice for the approval of the Members of the Company.
None of the Directors or Key Managerial Personnel of the Company and their relatives are, in any way, concerned or interested, financially or otherwise, in the Ordinary Resolution set out at Item No. 3 and 4 of this Notice, except to the extent of their respective shareholding, if any, in the Company
SECRETARIAL AUDITOR:
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. Amit Dharmani & Associates., Company Secretaries, Mumbai to undertake Secretarial Audit of the Company for the year 2022 - 23. The Secretarial Audit Report is annexed herewith as ‘Annexure IV' and forms part of this report.
INTERNAL AUDITOR:
The Company had appointed M/s. Kaushik Shahukar & Co., Chartered Accountants, Mumbai as its Internal Auditor for the financial year 2022-23. The Internal Auditor givestheir report on quarterly basis to the Audit Committee.
Based on the report of internal audit, management undertakes corrective action in respective areas and thereby strengthens the controls.
Further, based on the recommendations of the Audit Committee, the Company has appointed M/s. Kamlesh Duggar & Co, Chartered Accountants, Mumbai, as Internal Auditors of the Company for the Financial Year 2023-24.
COST AUDITORS:
As per Section 148 read with Companies (Audit & Auditors) Rules, applicable to cost auditors, the company was not liable to appoint Cost auditors for the financial year 2022-23.
REPORTING OF FRAUD BY AUDITORS
During the year under review, the Statutory Auditors, and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Act, details of which needs to be mentioned in this Report.
REMARKS ON QUALIFICATION BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS:
The Statutory Auditors' report does not have any qualification / observation/adverse remark and the report is selfexplanatory.
Further, there are no observations / adverse remark in the Secretarial Auditors Report..
REPORT ON CORPORATE GOVERNANCE:
As per Schedule V Part C of Listing obligation and disclosure requirements, the provision of corporate governance is not applicable to the Company as equity share capital of the company does not exceed 10 crores and net worth of the Company does not exceed 25 Crore as on last previous Financial Year.
Note - As per Schedule V Part C [(10) (i)] of Listing obligation and disclosure requirements, Company does not require to take certificate of ‘Non- Disqualification of Director' from practicing Company Secretary.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, is annexed under Annexure VI to this report.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has zero tolerance for sexual harassment at workplace and adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. There was no complaint on sexual harassment during the year under review.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Details regarding conservation of energy, technology absorption, foreign exchange earnings and outgo is given in ‘Annexure V?.
COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS:
Your Directors hereby confirm that the Company has complied with the necessary provisions of the revised Secretarial Standard 1 and Secretarial Standard 2 to the extent applicable to the Company.
CORPORATE SOCIAL RESPONSIBILITY:
Provisions Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable to the Company during the year under review.
Listing Fees:
The Company is Listed on BSE Limited. The Company has paid the Listing Fees for the Financial Year 2022-23. The Company has paid part of the Listing Fee for the financial year 2023-24.
OTHER DISCLOSURES
The company does not have any Employees Stock Option Scheme in force and hence particulars are not furnished, as the same is not applicable.
No application has been made under Insolvency and Bankruptcy Code: hence requirement to disclose the details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year is not applicable to the Company.
The requirement to disclose the details of difference between amount of valuation done at the time of onetime settlement and valuation done while taking loan from the Banks and Financial Institutions along with the reasons thereof is also not applicable.
ENHANCING SHAREHOLDER VALUE
Your company firmly believes that its success, the marketplace and a good reputation are among the primary determinants of value to the shareholder. The organizational vision is founded on the principles of good governance.
CAUTIONARY STATEMENT
Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations.. Important factors that could influence the Company's operation include global and domestic demand and supply conditions affecting selling prices of Raw Materials, Finished Goods, input availability and prices, changes in government regulations, tax laws, economic developments within and outside the country and various other factors.
ACKNOWLEDGEMENT:
Your Directors take this opportunity to express their sincere appreciation for the assistance and co-operation received from all the Government departments, Banks, Financial Institutions, other business constituents and members during the year under review and also look forward to their continued support in the future.
Your Directors also wish to place on record their deep appreciation for the committed services of the employees of the Company.