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Directors Report of Karnimata Cold Storage Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present their 4th Annual Report on the business and operations of your Company together with the Audited Accounts for the year ended 31st March, 2015.

The Financial performance of the Company for the year ended 31st March, 2015 is summarized below:-

Financial Result 31st March, 2015 31st March, (Rs. in lacs) 2014 (Rs. in lacs)

Profit for the year ended 6.29 6.64

Less: Provision for Taxation (1.21) (1.27)

Add: MAT credit entitlement 1.21 1.27

Profit after Tax 6.29 6.64

Add: Profit brought forward from previous 14.08 7.44 year

Balance carried over to Balance Sheet 20.37 14.08

DIVIDEND:

Your Directors feel that it is prudent to plough back the profits for future growth of the Company and do not recommend any dividend for the year ended 31st March, 2015.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, the details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as "Annexure X".

INFORMATION TECHNOLOGY AND COMMUNICATION:

During the financial year 2014-15, apart from upgrading the existing software application with enhanced/added features to meet the current and emerging business needs.

ENERGY CONSERVATION MEASURES, TECHNOLOGY ABSORPTION AND R & D EFFORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3) of the Companies Act, 2013, read with Role 8 (3) of Companies (Accounts) Rules, 2014, the relevant information is given below:

CONSERVATION OF ENERGY:

RESEARCH AND DEVELOPMENT:

The Company has no formal research and development department but the Company is continuously making efforts to strength research and development activities to improve quality and reduce cost.

TECHNOLOGY IMPORT ABSORPTION:

The Company has not imported any technology. Indigenous technology available is continuously upgraded to improve overall performance. The Company has not made any expenditure on Research & Development throughout the year.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review there was no earnings and outgo in foreign exchange.

CORPORATE GOVERNANCE REPORT:

Pursuant to the Clause 52 of the listing agreement with the SME Platform of Bombay Stock Exchange Limited, Report on Corporate Governance is annexed herewith as "Annexure-I"

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Clause 52 of the listing agreement with the SME Platform of Bombay Stock Exchange Limited, Report on Management Discussion and Analysis Report is annexed herewith as "Annexure- II"

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTOR AND KEY MANAGERIAL PERSONNEL:

Ms. Asha Ladia, director of the Company liable to retire by rotation and being eligible has offered herselves for re-appointment.

During the year Mr. Jay Prakash Heerwal (DIN: 03123914) who was the Independent director of the Company submitted his resignation from the directorship of the Company on 16th June, 2014, due to his full time engagement in the practice of Chartered Accountancy and Further Mrs. Sushila Lodha (DIN: 03504185), the Non- executive director of the Company submitted her resignation from the directorship of the Company on 16th June, 2014, due to some other pre-occupation. The same were accepted by the Board and the Board hereby places on record its sincere thanks and gratitude for the valuable contribution made by Mr. Jay Prakash Heerwal and Mrs. Sushila Lodha. The Board on behalf of all the members wishes both Mr. Jay Prakash Heerwal and Mrs. Sushila Lodha a healthy and successful life.

The Board has approved the appointment of Shri. Supreme Lodha, as the CFO of the Company with effect from 18th August, 2014. The Board has considered the recommendation of the Nomination and Remuneration Committee and Audit Committee regarding the said appointment.

Declaration by Independent Director:

Mrs. Kalpana Agrawal (DIN: 02976827) and Mrs. Venus Kedia (DIN: 06422518), independent directors of the Company have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013

Board Evaluation:

Pursuant to the provisions of Companies Act, 2013 and Listing Agreements, 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 Committee and Nomination and Remuneration Committee. The manner in which the evaluation has been carried out is mentioned in the Corporate Governance Report.

Remuneration Policy:

The Board has, on recommendation of the Nomination and Remuneration Committee formulated a policy for selection and appointment of Directors, senior managements and their remuneration.

Meetings:

The details of the number of Board Meetings and meetings of various Committees are given in the Corporate Governance Report. The intervening gap between the meetings was within the time period prescribed under the Companies Act, 2013.

Audit Committee:

Upon the resignation of the Mr. Jay Prakash Heerwal and Mrs. Sushila Lodha, from the directorship of the Company, the Audit Committee of the Company reconstituted on 11th August , 2014 as follows;

Mrs. Venus Kedia (DIN: 06422518)-Non-executive Independent Director- Chairman

Mrs. Kalpana Agarwal (DIN: 02976827) - Non-executive Independent Director-Member

Mr. Pradip Lodha (DIN: 03006602)- Managing Director- Member

More details on the Committee are given on the Corporate Governance Report.

DIRECTOR'S RESPONSIBILY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed:

a) That in the preparation of the accounts for the financial year ended 31st March, 2015; the applicable accounting standards have been followed along with proper explanation relating to material departure.

b) That the Directors have selected such 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 and of the profit and loss of the Company for the year under review.

c) 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 the Company and for preventing and detecting fraud and other irregularities.

d) That the Directors have prepared the accounts for the financial year ended 31st March, 2015 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.

f) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

DETAILS PERTAINING TO REMUNERATION 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:

a. The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Person (KMP) against the performance of the Company are as under:

Sl. Name of Director/KMP & Remuneration % increase in No. Designation of remuneration in Director/KMP the Financial for the Financial Year 2014-15 Year 2014-15 (Rs. in lacs)

1 Pradip Lodha 2.16 Nil Managing Director

2 Supreme Lodha 2.27 26.11 Chief Financial Officer

3 Subrat Kumar Nayak 2.00 11.11 Company secretary & Compliance Officer

4 Karunamoy Bandyopadhyay 1.50 4.16 Manager(Operation)

Sl. Name of Director/KMP & Ratio of Comparison of No. Designation remuneration the of each remuneration Director/KMP of the KMP to median against the remuneration performance of of employees the Company

1 Pradip Lodha 3.27 The revenue of Managing Director the Company increases 2 Supreme Lodha 3.43 36.53% and the Chief Financial Officer profit of the Company 3 Subrat Kumar Nayak 3.03 decreases 5.27% Company secretary & Compliance Officer

4 Karunamoy Bandyopadhyay 2.27 Manager(Operation)

b. The median remuneration of employees of the Company during the financial year was Rs. 0.66 lakhs;

c. There were 13 permanent employees on the rolls of the Company excluding 4 KMPs as on March 31, 2015;

d. There is no change in remuneration of Managing Director as the Managing Director by self declaration denied to take his increased remuneration approved by the members in the 3rd AGM of the Company up to 31st March, 2015; and performance of the Company for the financial year ended 31st March, 2015 the revenue of the Company increases 36.53% and the profit of the Company decreases 5.27%.

e. Price Earnings ratio of the Company was 0.12 as at March 31, 2015 as compared to 0.18 on March 31, 2014;

f. The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendation of the Human Resources, Nomination and Remuneration Committee as per remuneration policy for Directors, Key Managerial Personnel and other employees.

g. The ratio of the remuneration of the highest paid director to that of the employees who are not directors and KMPs but receive remuneration in excess of the highest paid director during the year- Not applicable.

h. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other employees.

RELATED PARTY TRANSACTION:

All Related Party Transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

SUBSIDIARY COMPANY:

The Company does not have any subsidiary.

CODE OF CONDUCT:

The Company has a Code of Conduct which is applicable to directors and management personnel of the Company. The Company believes in conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations. The "Code of Conduct" is available on the Corporate Governance section of the Company's website www.karnimatacoldstorage.com.

The Code lays down the standard procedure of business conduct which is expected to be followed by the directors and management personnel in their business dealings and in particular on matters relating integrity in the work place, in business practices and complying with applicable laws etc.

All the directors and management personnel have submitted declaration confirming compliance with the code.

BONUS ISSUE

The Company has not allotted any bonus issue during the year.

PUBLIC ISSUE

During the year under review your Company has not issued any securities to the public.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Board of Directors of the Company on 11th August, 2014 has adopted a Vigil Mechanism/Whistle Blower Policy.

This Policy provides a channel to the employees and directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or legal or regulatory requirements, incorrect or mis-representation of any financial statements and reports etc.

This Policy intends to cover serious concerns that could have serious impact on the operations and performances of the Company and malpractices and events which have taken place or suspected to have taken place, misuse or abuse of authority, fraud or suspected fraud, violation of company rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies and other matters or activity on account of which the interest of the Company is affected and formally reported by whistle blowers concerning its employees.

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.

All the Board of Directors and designated employees have confirmed compliance with the Code.

RISK MANAGEMENT POLICY:

Pursuant to section 134(3) (n) of the Companies Act, 2013, the Board of directors of the Company on 12th March, 2015 has adopted a Risk management Policy of the Company. The Company is committed to identifying and managing risk in a manner appropriate to achieve its objectives.

This Policy intends to cover concerns that could have serious impacts on the operational and financial performance of the Company. The scope of the policy is to identify, assess and treat the risk associated with the Company and building framework and risk management programs, reviewing of the effectiveness of such programs and collectively to achieve the target of the Company.

INTERNAL CONTROLS:

The Company has maintained adequate internal control system to ensure that its assets are protected against loss of unauthorized use and improper handling. During the year the company appointed M/s Kshitiz & Co., 51, Nalini Sett Road, 5th Floor, Room No- 19, Kolkata- 700007. The firm is authorized to by the Audit Committee to access the adequacy and compliance of internal control process, statutory requirements etc. The Audit Committee met regularly to review reports submitted by the Internal Auditor. The Audit Committee upon discussion with internal auditor set up applicable control measures for the Company.

AUDITORS:

STATUTORY AUDITORS

At the 3rd Annual General Meeting held on 25th September, 2014, M/s Bidasaria & Associates, Chartered Accountants were appointed as statutory auditors of the Company to hold office till the conclusion of 8th Annual General Meeting of the Company. In the terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Bidasaria & Associates, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this, regard, the Company has received a certificate from the Auditors to the effect that if they are re-appointed, it would be in-accordance with the provisions of Section 141 of the Companies Act, 2013.

AUDITORS' REPORT:

The observations of the auditors in their report are self-explanatory and therefore, in the opinion of the Directors, do not call for further comments.

SECRETARIAL AUDITOR:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Mr. B L Patni, a whole time Company Secretary in practice having Membership No. 1321, to undertake the Secretarial Audit of the Company.

SECRETARIAL AUDIT REPORT:

As required under section 204(1) of the Companies Act, 2013 the Company has obtained a Secretarial Audit Report. The Secretarial Audit report is annexed herewith as "Annexure Y"

The Report doesn't contain any qualification.

PARTICULARS OF EMPLOYEE:

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.

INVESTOR COMPLAINTS AND COMPLIANCE

All the investor complaints duly resolved and as on date there is no complaints pending.

LISTING OF SHARES:

The equity shares of your Company are listed on the SME Platform of BSE Limited, 25th Floor, P.J. Towers, Dalal Street, Mumbai - 400001 and listing fees for the year 2014-15 has been paid.

ACKNOWLEDGEMENT:

Your directors place on record their appreciation for co-operation and support extended by the Banks, SEBI, Shareholders, Bankers to the Issue, RTA and farmers and Traders for their continued support extended to the Company at all times.

The Directors further express their deep appreciation to all employees for high degree of professionalism and enthusiastic effort displayed by them during the year.

For and on behalf of the Board of Director

Date: 31/07/2015 PRADIP LODHA

Place: Paschim Medinipur Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present their 3rd Annual Report on the business and operations of your Company together with the Audited Accounts for the year ended 31st March, 2014.

The Financial performance of the Company for the year ended 31st March, 2014 is summarized below:-

Financial Result 31st March, 2014 31st March, 2013 (Rs. in lacs) (Rs. in lacs)

Profit for the year ended 6.64 2.77

Less: Provision for Taxation (1.27) (0.53)

Add: MAT credit entitlement 1.27 0.53

Profit After Tax 6.64 2.77

Add: Profit brought forward from previous year 7.44 4.67

Balance carried over to Balance Sheet 14.08 7.44

DIVIDEND:

Your Directors feel that it is prudent to plough back the profits for future growth of the Company and do not recommend any dividend for the year ended 31st March, 2014.

PARTICULAR OF EMPLOYEES:

During the year under review, no employee of the Company was in receipt of the remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended.

INFORMATION TECHNOLOGY AND COMMUNICATION:

During the financial year 2013-14, apart from upgrading the existing software application with enhanced/added features to meet the current and emerging business needs.

ENERGY CONSERVATION MEASURES, TECHNOLOGY ABSORPTION AND R & D EFFORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 217(1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, as amended the relevant information is given below:

CONSERVATION OF ENERGY:

RESEARCH AND DEVELOPMENT:

The Company has no formal research and development department but the Company is continuously making efforts to strength research and development activities to improve quality and reduce cost.

TECHNOLOGY IMPORT ABSORPTION:

The Company has not imported any technology. Indigenous technology available is continuously upgraded to improve overall performance.

FOREIGN EXCHANGE EARNINGS AND OUTGO:

During the year under review there was no earnings and outgo in foreign exchange.

INITIAL PUBLIC OFFERING

The Company has spent/utilized the proceeds of the fund raised under the IPO as per the Object of the issue upto 30th April, 2014.

STATEMENT OF UTILIZATION OF ISSUE PROCEEDS BY COMPANY AS ON 31st MARCH, 2014

The use of IPO proceeds as per the "object of the issue" is as follows: (Rs. In Lacs)

Funds raised through IPO (Initial Public Offering) 303.60

Deployed in providing Seasonal Loans to farmers/traders in FY 2013-14 267.30

Deployed in Issue Related Expenses 34.85

Deployed in providing Seasonal Loans to farmers/traders in FY 2014-15 1.45

CORPORATE GOVERNANCE:

Pursuant to the Clause 52 of the listing agreement with the SME Platform of Bombay Stock Exchange Limited, Report on Corporate Governance is annexed herewith.

Pursuant to Clause 52 of the listing agreement with the SME Platform of Bombay Stock Exchange Limited, Report on Management Discussion and Analysis Report is annexed herewith.

PUBLIC DEPOSIT

Your Company has not accepted any deposits from the public during the year.

DIRECTORATE

Ms. Asha Ladia, director of the Company liable to retire by rotation and being eligible has offered themselves for re-appointment.

Further appointment of Mrs. Venus Kedia and Kalpana Agrawal as per the applicable Sections of Companies Act, 2013 and any others Rules for a term of five years is also noted by the Board.

Your directors recommend the above re-appointment and appointments.

BONUS ISSUE

The Company has not allotted any bonus issue during the year.

PUBLIC ISSUE

During the year under review your Company entered into the Capital Market with a maiden Public Issue of 15,18,000 equity shares of Rs. 10/- each at a premium of Rs. 10/-per share aggregating to Rs.303.60 lacs . The issue received an overwhelming response and the same was oversubscribed by 2.33 times. The equity shares have been listed and are being traded on the SME platform of Bombay Stock Exchange Limited.

AUDITORS:

The Board of Directors of the Company has on recommendation of the Audit Committee proposed that M/s Bidasaria & Associates, Chartered Accountants, Kolkata be re-appointed as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting for a term of Five years have forwarded their certificates to the Company stating that their re-appointment, if made, will be within the limit specified in that behalf in Sub-section (1B) of Section 224 of the Companies Act, 1956.

Your Directors request you to appoint the auditors and fix their remuneration.

AUDITORS'' REPORT:

The observations of the auditors in their report are self-explanatory and therefore, in the opinion of the Directors, do not call for further comments.

INVESTOR COMPLAINTS AND COMPLIANCE

All the investor complaints duly resolved and as on date there is no complaints pending.

LISTING OF SHARES:

The equity shares of your Company are listed on the SME Platform of BSE Limited, 25th Floor, P.J. Towers, Dalal Street, Mumbai - 400001 and listing fees for the year 2013-14 has been paid.

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31st March, 2014; the applicable accounting standards have been followed along with proper explanation relating to material departure.

(ii) That the Directors have selected such 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 and of the profit and loss of the Company for the year under review.

(iii) 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, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2014 on a going concern basis.

ACKNOWLEDGEMENT:

Your directors place on record their appreciation for co-operation and support extended by the Banks, SEBI, Shareholders, Bankers to the Issue, RTA and farmers and Traders for their continued support extended to the Company at all times.

The Directors further express their deep appreciation to all employees for high degree of professionalism and enthusiastic effort displayed by them during the year.

For and on behalf of the Board of Director Date: 30/05/2014 Place: Paschim Medinipur PRADIP LODHA Chairman and Managing Director

 
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