AFFLUENCE

DIRECTOR’S REPORT
Your Directors have pleasure in presenting their 17th Annual Report on the business and operations of the Company together with and the accounts for the financial year ended March 31st, 2016.
Financial Results
During the year under review, the performance of the Company as per financial statements is as under:
(Rupees in Lacs)

Review of Performance
The year under review the turnover of the Company has increased to Rs.34,706 lakhs from the previous year Rs. 32,854 lakhs. The company had suffered a loss of Rs. 2525 lakhs in the current year as compared to last years profit of Rs.337 lakhs in the previous year.

Your Board of Directors is of the view that the current years revenue has increased but due to high cost factor it has suffered a huge loss. The Company is vigorously pursuing various steps to improve sales coupled with cost conservation measures and reduction of overheads to improve profitability in coming years.

State of Company’s Affairs & Future Outlook

The Stove Kraft Private Limited (ISO 9001:2008 certified) is engaged in the business of Indian kitchen appliances and home appliances under the flagship brands, Pigeon and Gilma, each have a unique customer proposition and deliver high quality products. Across both brands, we offer premium kitchen solutions through our wide range of products including pressure cookers, non-stick cookware, gas and induction cooktops and mixer grinders among others.

The Company also launched new products Joy Mop, LED Bulbs and Juicer in the market during the year.
In the current year, the Company has entered into a Slump Sale Agreement dated March 31, 2016 with Saya Industries (the “Firm” or the “Saya”), a partnership firm in which the Company is a majority partner, for transfer all assets and liabilities of the Firm as a going concern and as is where is basis with effect from close of business hour on March 31, 2016 for a total consideration of Rs.75,000,000. As per the agreement with Saya, the mentioned purchase consideration has been adjusted against the balances in Partner's Capital Account and Current Account of Saya
The company is constantly working in the vision of the company as future outlook to establish the brand “STOVEKRAFT” as a global brand, known for its values, assertiveness and the acumen to adapt to an ever changing environment.
The company has the following manufacturing capacities:
Non stick Cookware: installed capacity up to 6.9 million units
Gas and Induction Cook-tops; Installed capacity up to 2.5 million units
Pressure Cookers: installed capacity up to 2.0 million units
Mixer Grinder: Installed capacity expansion of up to 0.6 million units

 Dividend
In view to conserve the resources of company for future planned business growth, your Directors deem it proper to preserve the resources of the Company for its activities and therefore, do not propose any dividend for the Financial Year ended March 31st, 2016.

Deposits
Pursuant to provision of Section 74 of the Companies Act, 2013, the Company has not accepted any deposits during the financial year ended March 31, 2016.

Transfer to Reserves
The Company has not transferred any amount to the Reserves during the year.
Extract of Annual Return

The extract of Annual Return, in form MGT-9 for the financial year 2015-16 has been enclosed with this report attached as Annexure I

Number of Board Meetings
During the Financial Year 2015-16, the Board met Four (4) times. The intervening gap between the Meetings was within the period prescribed limits under the Companies Act, 2013
Attendance of directors during year:

* Mr. Nikhil Balaraman resigned from the Board with effect from 14th September, 2015.

Share Capital/Issue Of Equity Shares With Differential Voting Rights
The paid up Equity Share Capital of the Company as on 31st March 2016 was Rs.189,001,100/-.
During the year under review, the Company has not issued shares or granted stock options or sweat equity.
Particulars Of Employees
During the year, the employee who was in receipt of remuneration of Rs. 5.00 Lacs per month or Rs. 60.00 Lacs per annum under review is attached as Annexure II. However, pursuant to section 134(3) (q) of the Companies Act, 2013 read with Rule 5(2) & (3) the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.






Particulars of loans, guarantees or investments under section 186
Details of Loans: the Company has not made any loans during the year.

Details of Investments: -

*Net of Rs. 75,000,000 purchase consideration adjusted against net asset taken over from Saya Industries
Note: In the prior years, the Company had invested a sum of Rs. 75,000 for 37.5% paid-up equity share capital of Pigeon Appliances Private Limited (PAPL). The business operations of PAPL are controlled by the majority shareholders of PAPL. The Company has noted certain irregularities in the business operations of PAPL and use of trademarks registered in the name of the Company, without the consent of SKPL. The Company has been continuing legal action against PAPL for irregularities noted in the business operations and unauthorized use of trademarks. On prudence basis, non-current investments in equity share capital of PAPL had been provided as at 31st March, 2015.
Details of Guarantee / Security Provided:

The Company has given a security for the Secured loans repayable on demand from banks are in the nature of working capital loans which are secured by way of hypothecation of inventory, receivables and other current assets, charge over fixed assets of the Company along with equitable mortgage of immovable properties. Loan repayable on demand from banks is also secured by personal guarantee of the directors Mr. Rajendra J Gandhi and Mrs. Sunita R. Gandhi.




Particulars of contracts or arrangements with related parties:
The Company has entered into contract or arrangements with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 in the ordinary course of business for company specific products at arm’s length transactions.
Explanation to Auditor’s Remark
The Report of the Auditors and their observations and notes to the accounts of the Company for the year under review are attached herewith which are self-explanatory and does not require further explanation.
Material changes and commitments, if any, affecting the financial position of the company
The Following changes have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:
the Company has entered into a Slump Sale Agreement dated March 31, 2016 with Saya Industries (the “Firm” or the “Saya”), a partnership firm in which the Company is a majority partner, for transfer all assets and liabilities of the Firm as a going concern and as is where is basis with effect from close of business hour on March 31, 2016 for a total consideration of Rs.75,000,000.
Details of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The prescribed particulars under Rule 8(3) of The Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, are furnished in the Annexure III to this Report.

Details of Subsidiary/Joint Ventures/Associate Companies
The Company does not have any Subsidiary Company, Joint Venture except an Associate company “Pigeon Appliances Private Limited” (PAPL) in which the Company Stove Kraft Private Limited (SKPL) holds 37.5% shares of the total paid up capital.
Risk Management Policy
Derivative Contracts
The Company enters into derivative contract in the nature of foreign currency swaps, currency options, forward contracts with an intention to hedge its existing assets and liabilities, firm commitments and highly probable transactions. Derivative contracts which are closely linked to the existing assets and liabilities are accounted as per the policy stated for Foreign Currency Transactions and Translations.
All other derivative contracts are marked-to-market and losses are recognised in the Statement of Profit and Loss. Gains arising on the same are not recognised, until realised, on grounds of prudence.
Hedging Policy:
In order to cover risk against foreign exchange fluctuations, the Company would obtain from time to time the appropriate forward covers from its Bankers for all foreign exchange transactions as per the Management assessment
Details of Directors and Key Managerial Personnel
The Company has the following change in the Board:

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

1. Company Law Board, Chennai Order in case of Pigeon Appliances Private Limited (PAPL):
The Company had filed petition under Section 397 and 398 of the Companies Act, 1956 with Company Law Board, Chennai alleging certain acts of oppression and mismanagement in the affairs of the Company. The details of a significant material order passed by the Company Law Board (CLB), Chennai, which may impact the going concern status of the Company and its future operations is that the Company was in transaction for contract and arrangement with PAPL for sale/purchase of goods will no longer exist.

2. In the Court of XVIII Additional City Civil Judge at Bengaluru:
Order No.OS2997/2015 dated 18 August, 2015 against PAPL for passing off, misuse and misrepresentation etc of brand ‘Pigeon’ which is a TM owned by the company
Stove Kraft faced an unethical business challenge for the registered Trade Mark of the Company – ‘Pigeon’ from a partly owned group company M/s Pigeon Appliances Private Limited. The day to day operations of PAPL are managed by its director Mr. Anraj Bhandari. Mr. Bhandari believed that he could benefit by passing off, infringing upon and unethically hijacking the brand name and registered trademark ‘Pigeon’ which is owned by Stove Kraft Private Limited.
The Company took legal recourse vide OS2997/2015 and the Honorable Additional City Civil Court, Bangalore, upheld our contention, being pleased to first passing an immediate ex-parte temporary injunction order during April 2015 and subsequently the temporary injunction order is now CONFIRMED until the completion of the trial. The court appointed a ‘Court Commissioner’ and he seized significant stocks of infringing goods at Bangalore & Andhra Pradesh. Essentially Pigeon Appliances Private Limited cannot sell any product, manufacture for either its own brand/model or for contract supply as OEM under the name and style of the company, cannot advertise, cannot correspond using the infringing name – ‘Pigeon Appliances Private Limited’. Legally, they are required to implement this order and recall infringing goods and media and any other products anywhere.
Statement in respect of Adequacy Of Internal Financial Controls With Reference to Financial

The Company has adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and Fixed Assets and the sale of goods during the year we have not observed any major weakness in such internal control system.

Disclosures under Sexual Harassment of Women At Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company is committed to provide a safe and conducive work environment to its employees. During the year under review, no case of sexual harassment was reported.
In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace in the board meeting held on 21st February, 2014 and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.
Disclosure on Establishment of Vigil mechanism Committee
The Company has constituted a Vigil Mechanism Committee under Section 177(9) of the Companies Act 2013, for hearing the grievances of the employees/directors or any other person working in the Company and to take necessary steps to resolve the issues amicably and also offences of serious nature may be awarded with appropriate punishment. The Board is in the process of identifying appropriate person to head the Committee.
The Company has adopted a policy for vigil mechanism policy prevention whistle Blower of the Company in board meeting held on 8th July, 2015 and has set up Committee for implementation of said policy. During the year, the Company has not received any complaint or grievances.
Statutory Auditors
M/s Deloitte Haskins & Sells, Chartered Accountants, Bangalore will continue to act as statutory auditors of the Company for the financial year 2016-17 as per the appointment made in the year 2014-15 for a period of 5 years (five) and also the said appointment is in conformity with the provisions of Section 139 of the Companies Act, 2013 which is to be ratified in the ensuing 17th Annual General Meeting of the Company.
Internal Auditors
The Board of Directors has pursuant to Section 138 of the Companies Act, 2013 and on recommendation of the Audit Committee has appointed Messrs. Manian & Rao, Chartered Accountants, No. 361 Floor I, 7th Cross, Jayanagar 1st Block, Bangalore, 560011 as the Internal Auditors of the Company for the financial year 2016-17. The Company has received consent from Messrs. Manian & Rao for their appointment.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Records of the Company relating to the business of “Stainless Steel Cookware” are required to be audited.

M/s. GS & Associates, a partnership firm has been appointed as the Cost Auditor of the Company to audit the Cost Record of the Company for the financial year 2016-17. The Company has received the non-disqualification certificate from the Auditor under Section 141 of the Companies Act, 2013.



Directors’ Responsibility Statement
In accordance with the provision of Section 134(5) of the Companies Act, 2013, your directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March, 2016 the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had 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 31st March, 2016 and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Acknowledgements
The Directors express their sincere appreciation to the valued Shareholders, Bankers, Distributors, Franchisers and Employees of the company. An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results.

For and on behalf of the Board of Directors
Stove Kraft Private Limited

Rajendra J Gandhi  Sunita R Gandhi
Managing Director Director
DIN: 01646143 DIN: 01676100
Registered office Add:
81/1, Medamaran halli Village,
Harohalli Hobi, Kanakpura Taluk,
Ramanagar District 562112, Karnataka                                                                                         

Date: 30th September, 2016
Place: Bangalore





Annexure I
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on Financial Year ended on 31st March, 2015

Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014

REGISTRATION & OTHER DETAILS:

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the company shall be stated)

PARTICULARS OF HOLDING , SUBSIDIARY AND ASSOCIATES COMPANIES

SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

Category-wise Share Holding

B) Shareholding of Promoter-

C) Change in Promoters’ Shareholding (please specify, if there is no change)

D) Shareholding Pattern of top ten Shareholders: (Other than Directors, Promoters and Holders of GDRs and ADRs):

E) Shareholding of Directors and Key Managerial Personnel:

F) INDEBTEDNESS -Indebtedness of the Company including interest outstanding/accrued but not due for payment.

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL-
A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Note: * The Ceiling limit as per Companies Act, 2013 is not applicable on the Private Companies for calculating the salary/remuneration.
B. Remuneration to other directors

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN-MD/MANAGER/WTD

XII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: N/A
Annexure – II
Statement of Particulars of employees pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Notes;
All appointments are / were non-contractual.
Remuneration as shown above comprises of Salary, Leave Salary, Bonus, Gratuity where paid, Leave Travel Assistance, Medical Benefit, House Rent Allowance, Perquisites and Company's Contribution to Provident Fund.
None of the above employees is related to any Director of the Company employed for part of the financial year.


Annexure III
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING
AND OUTGO, ETC.

Conservation of Energy:

Annexure - IV
Form No. AOC-2

Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto: 

Details of contracts or arrangements or transactions not at arm’s length basis:

(a) Name(s) of the related party and nature of relationship - N.A.
(b) Nature of contracts/arrangements/transactions - N.A.
(c) Duration of the contracts / arrangements/transactions- N.A.
(d) Salient terms of the contracts or arrangements or transactions including the value, if any - N.A.
(e) Justification for entering into such contracts or arrangements or transactions- N.A.
(f) Date(s) of approval by the Board - N.A.
(g) Amount paid as advances, if any - N.A.
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188- N.A.


2. Details of material contracts or arrangement or transactions at arm’s length basis:
i)

     ii)

For and on behalf of the Board of Directors
Stove Kraft Private Limited



Rajendra J Gandhi  Sunita R Gandhi
Managing Director Director
DIN: 01646143 DIN: 01676100
Registered office Add:
81/1, Medamaran halli Village,
Harohalli Hobi, Kanakpura Taluk,
Ramanagar District 562112, Karnataka                                                                                         

Date: 30th September, 2016
Place: Bangalore
                                                                             

Annexure-V


Form AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/ associate companies/ joint ventures


Part “A”: Subsidiaries

(Information in respect of each subsidiary to be presented with amounts in Rs)

1. Sl. No.
2. Name of the subsidiary
3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period
4. Reporting currency and Exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries.
5. Share capital
6. Reserves & surplus
7. Total assets
8. Total Liabilities           -----------------------------------  Not Applicable---------------------------------
9. Investments
10. Turnover
11. Profit before taxation
12. Provision for taxation
13. Profit after taxation
14. Proposed Dividend
15. % of shareholding

Notes: The following information shall be furnished at the end of the statement:

Names of subsidiaries which are yet to commence operations
Names of subsidiaries which have been liquidated or sold during the year.







Part “B”: Associates and Joint Ventures


Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

Notes:


1. Names of associates or joint ventures which are yet to commence operations  : NIL
2. Names of associates or joint ventures which have been liquidated or sold during the year. : NIL

State of Company’s Affairs & Future Outlook The Stove Kraft Private Limited (ISO 9001:2008 certified) is engaged in the business of Indian kitchen appliances and home appliances under the flagship brands, Pigeon and Gilma, each have a unique customer proposition and deliver high quality products. Across both brands, we offer premium kitchen solutions through our wide range of products including pressure cookers, non-stick cookware, gas and induction cooktops and mixer grinders among others. The Company also launched new products Joy Mop, LED Bulbs and Juicer in the market during the year. In the current year, the Company has entered into a Slump Sale Agreement dated March 31, 2016 with Saya Industries (the “Firm” or the “Saya”), a partnership firm in which the Company is a majority partner, for transfer all assets and liabilities of the Firm as a going concern and as is where is basis with effect from close of business hour on March 31, 2016 for a total consideration of Rs.75,000,000. As per the agreement with Saya, the mentioned purchase consideration has been adjusted against the balances in Partner's Capital Account and Current Account of Saya The company is constantly working in the vision of the company as future outlook to establish the brand “STOVEKRAFT” as a global brand, known for its values, assertiveness and the acumen to adapt to an ever changing environment. The company has the following manufacturing capacities: Non stick Cookware: installed capacity up to 6.9 million units Gas and Induction Cook-tops; Installed capacity up to 2.5 million units Pressure Cookers: installed capacity up to 2.0 million units Mixer Grinder: Installed capacity expansion of up to 0.6 million units

Conservation of Energy: (i) the steps taken or impact on conservation of energy; The company has manufacturing units in Bangalore (Karnataka) and Baddi (Himachal Pradesh) and is consistently taking steps for conservation of energy. (ii) the steps taken by the company for utilizing alternate sources of energy; The company has Diesel Generators and Power controlled equipment’s installed in Bangalore and Baddi manufacturing Plants for units to supplement energy requirements. (iii) the capital investment on energy conservation equipments; The company has made a total investment of Rs.525,000/- on the same energy supplements.

Technology Absorption: (i) Efforts made towards technology absorption: The Company has imported technology from (AMV) for manufacturing of various kitchen appliances e.g. Roller Coating Unit etc. (ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Design and development of manufacturing tools and moulds for non-stick cookware. (iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): (a) Details of technology imported - Design and development of manufacturing tools and moulds for non-stick cookware. (b) Year of import-31st August 2012 (C) Whether the technology been fully absorbed -Yes (d) If not fully absorbed, areas where absorption has not taken place and the reasons thereof.-N/A iv) the expenditure incurred on Research and Development - Rs. 87,141,774/-

Foreign Exchange Earnings and Outgo: Actual Inflows(Exports) -Rs. 309,353,783/- Actual Outflows (Imports) - Rs. 550,936,292/- Actual Outflows (Expenses)- Rs. 7,607,409/-

In accordance with the provision of Section 134(5) of the Companies Act, 2013, your directors confirm that: (a) in the preparation of the annual accounts for the financial year ended 31st March, 2016 the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 31st March, 2016 and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.