Your Directors have pleasure in presenting Twenty Fifth Annual Report on the businessand operations of your Company and Audited Financial Statement for the year ended 31STMarch 2016.
FINANCIAL RESULTS :
| ||(Rs. in lacs) |
| ||2015-16 ||2014-15 |
|Revenue from operations (Net) ||3477.36 ||3052.60 |
|Misc Sale (Net) ||0.23 ||0.23 |
|Other Income ||195.08 ||310.75 |
|Total Revenue ||3672.67 ||3363.58 |
|Less: Expenses || || |
|Cost of material consumed ||2588.04 ||2632.58 |
|Changes in Inventories of finished Goods & Work in Progress ||25.61 ||-11.89 |
|Manufacturing Expenses ||585.75 ||422.96 |
|Employee Benefit Cost ||86.70 ||97.80 |
|Depreciation and amortisation Expenses ||79.47 ||61.61 |
|Other Expenses ||147.83 ||153.07 |
|Total Expenses ||3513.42 ||3356.14 |
|Net Profit ||159.26 ||7.43 |
During the year under review only Paper Division was operational throughout the yearand produced 15096.18 M.T of Kraft Paper and achieved sales of Rs. 3477.36 Lacs as against12968.43 M.T ' and Rs. 3052.59 Lacs of the previous year. The net profit was Rs.
159.26 Lacs as against Rs. 7.43 Lacs of the previous year.
Company could not run Power Division due to non availability of bagasse raw materialfor Power generation during the year.
The streamlined operations of Paper Division will continue to give good results duringthe current year too.
During the financial year company has expanded its current capacity of paper divisionfrom 15000 TPA to 20000 TPA . Therefore we are expecting the additional production of 5000M.T of kraft paper every year. Further company is planning to expand capacity of paperdivision upto 25000 TPA in financial year 2016-17.
REHABILITATION SCHEME :
As you aware that company had been declared as a sick industrial unit by BIFR in 2007and thereafter filed the rehabilitation scheme through our operating agency M/s. IndianRenewable Energy Development Agency Ltd (IREDA) to the BIFR. Although BIFR in its orderdated 11.11.2014 had deregistered stating that there is a delay in submission ofrehabilitation scheme. Consequently company had filed the appeal to the AppellateAuthority for Industrial and Financial Reconstruction (AAIFR) against the aforesaid orderof BIFR. Subsequently AAIFR on order dated 22.04.2015 remanded the case back to BIFRaccepting the company's submission. Honourable BIFR has suggested certain modification inthe Draft Rehabilitation scheme already submitted and now accordingly company hasre-submitted draft rehabilitation scheme (DRS) duly incorporating the modificationssuggestions suggested through operating agency on 08/ 12/2015. The company has also filedspecial miscellaneous application 04/07/2016 requesting honourable BIFR to circulate theDRS at the earliest. Now it is expected that DRS scheme will be approved in the comingfinancial year.
In view of the small profit and carried forward losses of the Company it is notpossible for your Directors to recommend any dividend.
MATERIAL CHANGES AND COMMITMENT
There are no material changes and commitments affecting the financial position of theCompany occurred between the ends of the financial year to which this financial statementrelate on the date of this report.
As on 31st March 2016 Company has no fixed deposits.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
During the year under review company has entered into the material contract withrelated party as defined under Section 188 of the Companies Act 2013. Accordingly reportin form AOC 2 as required under the sub- section 2 of section 188 of Companies Act 2013for disclosing material related party transactions along with the justification forentering into such contract /arrangement is enclosed in annexure I in this Board Reportforms part of the Annual Report.
Transactions which were entered with the related parties on ordinary course of businessand based on arm's length prices with the prior approval of audit committee are mentionedin the note no. 30 of financial statement in this Annual Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
Mrs. Deepa Agarwal director of the company retire by rotation in ensuing generalmeeting and being eligible offers herself for reappointment at the ensuing Annual GeneralMeeting. The necessary resolution is being put in the Notice of the ensuing Annual GeneralMeeting for the consideration of the Members.
Mr. Niraj Chandra was appointed as a Chairman and Managing Director of the Company fora period of five years w.e.f. 01-01-2012. Accordingly his term of appointment expires on31.12.2016. The board of directors in its meeting held on 20th July 2016 haverecommended the re- appointment of Mr. Niraj Chandra as a Chairman and Managing Directorof the company for the further period of five years with effect from 1st January 2017.The necessary resolution is being put in the Notice of the ensuing Annual General Meetingfor the consideration of the Members.
Pursuant to the provisions of the Companies Act 2013 and SEBI Regulations mandatesthat the Board shall monitor and review the Board evaluation framework. The Companies Act2013 states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors.
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate governance report section in this Annual Report. The Board approved theevaluation results as collate by the nomination and remuneration committee.
None of the independent directors are due for re-appointment.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
The Company had 5 (five) Board meetings during the financial year under review. TheDetails thereof are given in the corporate Governance Report. The intervening gap betweenthe meeting was within the period prescribed under the companies Act 2013
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of 31st March 2016 and of the profitand loss of the company for that period;
(c) We have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;
(d) We have prepared the annual accounts on a going concern basis; and
(e) We have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.
(f) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
M/s. Godbole & Company Chartered Accountants (M. No. 104822) Satara StatutoryAuditors of the Company hold office till the conclusion of the ensuing Annual GeneralMeeting and are eligible for reappointment.
The Company has received letters from him to the effect that their re-appointment ifmade would be within the prescribed limits under Section 141(3) (g) of the Companies Act2013 and that they are not disqualified for reappointment. Their appointment needs to beconfirmed and their remuneration is to be fixed.
The observations of the Auditors report read with the relevant notes thereon are selfexplanatory and therefore do not call for any further comments under Section 134 of theCompanies Act 2013.
M/s. Neha Doshi & Co. Practicing Company Secretaries was appointed to conduct thesecretarial audit of the Company for the financial year 2015-16 as required under Section204 of the Companies Act 2013 and Rules there under. The secretarial audit report for FY2015-16 forms part of the Annual Report as Annexure II to the Board's report.
SECRETARIAL AUDITOR'S REPORT
The observations of the Secretarial Audit report are self explanatory and therefore donot call for any further comments under Section 134 of the Companies Act 2013.
Regulation 34(3) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 report on Corporate Governance along withAuditor's certificate on its compliance is attached as annexure III to this report.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureIV and is attached to this Report.
INTERNAL FINANCIAL CONTROL
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future
As per the companies (Cost Records and Audit) Amendment Rules 2014 the company isexempted for cost audit from the financial year 2015-16. Hence company has not appointedcost auditor for the financial year 2016-17.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Subsection (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 the relevant informationpertaining to Energy Conservation Technology Absorption Foreign Exchange Earnings andOutgo are enclosed as Annexure V to the Board's report.
PARTICULARS OF EMPLOYEES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure VI to the Board's report.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
LISTING OF EQUITY SHARES:
The Equity Shares of your Company are listed on BSE Ltd. where the same are tradedregularly and confirm that company has paid the listing fees for the financial year2016-17.
The Company has formulated a Whistle Blower Policy (the Policy) in compliance with theCompanies Act 2013 and Listing agreement to enable employees customers agents dealerssuppliers and other vendors that conduct business with Kay Power and Paper Limited toraise concerns and complaints about fraudulent practices.
Under the Policy the concerns/ complaints pertaining to General Managers and Mangersshould be raised before the Chairman of Audit Committee and concerns against otherEmployees should be addressed to the Vigilance officer and confirm that no personnel hasbeen denied access to the audit committee.
The Company has designated the Manager Mr. Arvind Patil as the Vigilance officer andhas created the following email accounts for facilitating the raising of such concerns.Chairman of Audit Committeefirstname.lastname@example.org Vigilance officer -email@example.com The Company aims to propagate a culture for maintaining higheststandard of conduct and professionalism and therefore this Policy is implemented infurtherance of the Code of Conduct of the Company.
The details of establishment of such mechanism have also been disclosed on companywebsite on following link - http:// www.kaypowerandpaper.com/download/Annoncement-KPPL.pdf
COMMITTEES OF THE BOARD
Currently the Board has four committees: the audit committee nomination andremuneration committee stakeholder's relationship committee and risk Managementcommittee. The role and responsibilities and composition of the aforesaid committees arementioned in the corporate governance report section in this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A comprehensive Management discussion and analysis Report is appended as Annexure VIIforming a part of the Corporate Governance is part of this Annual Report
Your Directors appreciate valuable contribution of employees at all levels. YourDirectors place on record their gratitude for the cooperation received from IndianRenewable Energy Development Agency Ltd. Maharashtra State Electricity DistributionCompany Ltd. IDBI Bank Ltd. HDFC Bank Ltd. Suppliers Customers and Shareholders of theCompany and look forward to their continuous support in coming years.
|For and on behalf of the Board of Directors || |
| ||Niraj Chandra |
|Date : 20th July 2016 ||Chairman and |
|Place : Satara ||Managing Director |