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KCP Sugar & Industries Corporation Ltd.

BSE: 533192 Sector: Agri and agri inputs
NSE: KCPSUGIND ISIN Code: INE790B01024
BSE LIVE 09:07 | 24 Aug 28.05 0.45
(1.63%)
OPEN

28.05

HIGH

28.05

LOW

28.05

NSE 15:58 | 23 Aug 27.35 0.30
(1.11%)
OPEN

27.25

HIGH

27.70

LOW

27.00

OPEN 28.05
PREVIOUS CLOSE 27.60
VOLUME 600
52-Week high 42.90
52-Week low 25.50
P/E 8.50
Mkt Cap.(Rs cr) 318
Buy Price 28.05
Buy Qty 1400.00
Sell Price 28.50
Sell Qty 200.00
OPEN 28.05
CLOSE 27.60
VOLUME 600
52-Week high 42.90
52-Week low 25.50
P/E 8.50
Mkt Cap.(Rs cr) 318
Buy Price 28.05
Buy Qty 1400.00
Sell Price 28.50
Sell Qty 200.00

KCP Sugar & Industries Corporation Ltd. (KCPSUGIND) - Director Report

Company director report

Your Directors present their 20th Annual Report and the audited statement ofaccounts for the year ended 31st March 2015. The financial statements have beenpresented in the new format in accordance with the changes brought about by the RevisedSchedule III to the Companies Act 2013.

I. FINANCIAL RESULTS:

For the Year ended 31.03.2016 For the Year ended 31.03.2015
Physical Performance
Cane crushed – in Tonnes 1126691 1095339
Sugar bagged – In Quintals 1056839 1016945
Financial Performance – Rs. Crores
Turnover 510.27 515.52
Other Income 9.02 8.94
Profit Before Tax 8.78 (27.54)
Profit After Tax 8.76 (16.17)
Surplus from Previous Year 88.74 106.27
Amount available for appropriation 97.50 90.10
Appropriations
Transfer to General Reserve -- --
Proposed Dividend 2.83 1.13
Tax on proposed Dividend 0.58 0.23
Carried forward 94.09 88.74

2. PERFORMANCE:

During the financial year under review your Company recorded a Turnover of Rs. 510.27.crores (Prev.

Year: Rs. 515.52 cr.) including Excise Duty of Rs. 17.69 crores (Prev.Year: Rs.12.96cr.) and Inter-divisional transfers of Rs. 120.12 crores (Prev. year: Rs.108.05 cr.). Theprofit before finance cost and depreciation is Rs. 25.88 crores. Profit before tax is Rs.8.78 crores and after adjustments relating to payment of Income Tax pertaining to earlieryears and Deferred Tax the Profit after tax is Rs. 8.76 crores.

3. DIVIDEND:

The Board of Directors recommends a dividend of Re.0.25 per equity share of face valueof Re.1/- each on the Paid-up Equity Capital for the year ended 31.03.2016 as againstRe.0.10 per equity share approved for the previous year ended 31.03.2015. The dividendrecommended by your Directors if approved at the ensuing Annual General Meeting by theShareholders would be paid within the stipulated time.

4. SHARE CAPITAL AND RESERVES:

The share capital of the Company is Rs.11.33 crores. There was no addition to GeneralReserve in the current year and hence the General Reserve stood at Rs.112.09 crores onlyas on 31.03.2016. The total Reserves and Surplus has increased to Rs.208.18 crores as on31.03.2016 as against Rs.202.84 crores as on 31.03.2015.

5. SUBSIDIARY COMPANIES:

Your Company has two wholly-owned Subsidiaries viz The Eimco-K.C.P.Limited and KCPSugars Agricultural Research Farms Limited. Both the wholly-owned subsidiaries areunlisted companies and do not fall under the category ‘Material Subsidiary’ interms of Regulations 16 of SEBI (Listing Obligations & Disclosure Requirememnts)Regulations 2015. There are no Associated Companies within the meaning of section 2(6) ofthe Companies Act 2013 and there has been no material change in the nature of business ofthe subsidiaries. A statement containing salient features of the financial statement ofsubsidiaries in Form AOC-1 forms part of the Board’s Report - Annexure X.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A comprehensive discussion and analysis report on the industry’s structure as wellas on the financial and operational performance of the Company is contained in theManagement Discussion and Analysis Report which forms an integral part of theBoard’s Report (Annexure I).

7. CORPORATE GOVERNANCE REPORT:

Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 Corporate Governance Report together with the Certificate from theCompany’s Statutory Auditors confirming the compliance of conditions on CorporateGovernance is given in Annexure II to Board’s Report.

8. EXTRACT OF ANNUAL RETURN:

In pursuance of section 134(3) of the Companies Act 2013 the extract of the AnnualReturn has provided under section 92(3) of the Companies Act 2016 is given in AnnexureIII.

9. DIRECTOR’S RESPONSIBILITY STATEMENT:

As required by Section 134 of the Companies Act 2013 your Directors certify asfollows:i. that in the preparation of the annual accounts the applicable AccountingStandards have been followed and that there were no material departures there-from; ii.that the Directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year ended 31stMarch 2016 and of the Profit of the Company for that year; iii. that the Directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; iv. that theDirectors had prepared the annual accounts on a going concern basis.v. That the directorshad laid down internal financial controls to be followed by the Company and that suchfinancial controls are adequate and are operating effectively.vi. That the directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively.

10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SETION 186 OF THE COMPANIESACT 2013:

There is no loan / guarantee / investment covered under section 186 of the CompaniesAct 2013 during the financial year 2015-16. During the financial year under review theCompany has provided a loan to one of its wholly-owned subsidiary company and the amounthas been fully recovered during the financial year itself. In pursuance of Rule 11 ofCompanies (Meetings of Board and its powers) Rules 2014 the requirement of section186(3) is not applicable.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has entered into Rental Lease Agreements with related parties in theordinary course of business and on arms length basis. The value of such transactions iswell within the threshold limit prescribed under Rule 15 of Companies (Meetings of Board& its powers) Rules 2014 and hence outside the ambit of section 188 of the CompaniesAct 2013 - Annexure IX.

12. MATERIAL CHANGES AND COMMITMENT:

There is no change in the nature of business of the Company during the financial yearunder review. There are no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany and the date of Board’s Report.

13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE INFLOW AND OUTGO:

Information relating to Conservation of Energy Technology absortption ForeignExchange inflow and outgo as required under section 134(3)(m) of the Companies Act 2013read with Rule 8 of Companies (Accounts) Rules 2014 is furnished in Annexure IV.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The CSR policy of the Company and the details about the measures taken by the Companyon CSR activities during the financial year as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 have been disclosed in Annexure V in pursuance ofsection 135 of the Companies Act 2013.

15. PARTICULARS OF EMPLOYEES:

Statement required under Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is not attached to this Report as none of the employeeswas in receipt of remuneration as prescribed under this Section and Rules. The informationrequired pursuant to section 197 of the Companies Act 2013 read with Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnished inAnnexure VI.

16. PERSONNEL AND INDUSTRIAL RELATIONS:

The Employee relations scenario continued to be harmonious and congenial. Acknowledgingthis your

Company has been awarded for outstanding efforts in maintaining cordial IndustrialRelations and Labour Welfare by Government of Andhra Pradesh.

17. DIRECTORS:

Smt.V.Kiran Rao Director who retires by rotation at this AGM and is eligible forreappointment is proposed to be reappointed as Director at this AGM. The Board recommendsher reappointment and accordingly resolution seeking approval of members for herreappointment has been included in the Notice for the forthcoming Annual General Meetingalong with her brief profile.

18. AUDITORS:

Pursuant to the provisions of section 139 of the Companies Act 2013 and the Rulesframed under Companies (Audit & Auditors) Rules 2014 M/s.B.Purushottam & Co.Chartered Accountants were appointed as Statutory Auditors of the Company from theconclusion of 19th Annual General Meeting (AGM) held on 11th September 2014 till theconclusion of the 22nd AGM to be held in the year 2017 subject to ratification of theirappointment at every AGM. A written consent for appointment as Auditors and also aCertificate confirming that the appointment if made shall in accordance with theconditions as prescribed and in conformity with the criteria prescribed under section141(3) of the Companies Act 2013 have been received from them. Accordingly therequisite resolution relating to the appointment of M/s. B.Purushottam & Co.Chartered Accountants as statutory auditors of the Company is placed before the membersat this 21th Annual General Meeting for ratification in pursuance of 1st proviso tosection 139(1) of the Companies Act 2013.

19. COST AUDIT:

Mr. V. Srinivasan had been appointed by the Board of Directors of the Company as CostAuditor to conduct the Cost Audit in respect of Sugar Industrial Alcohol ElectricityFertilizer Calcium Lactate and CO2 for the financial year 2015-16 and his remunerationwas ratified by the members at the 20th Annual General Meeting held on 20.08.2015. TheCost Audit Reports for 2015-16 are due for submission on or before

27.09.2016.The Cost Audit reports for 2014-15 were e-filed with the Ministry ofCorporate Affairs New Delhi vide SRN S-39692728 dt. 30.09.2015.In pursuance of Section148 of the Companies Act 2013 your Directors on the recommendation of the AuditCommittee subject to ratification of his remuneration by the shareholders at this AGMhave appointed Shri. V. Srinivasan Cost Accountant Chennai as the Cost Auditor toconduct the Cost Audit of Sugar Industrial Alcohol Electricity Fertilizer CalciumLactate and CO2 for the financial year ending 31st March 2017. Mr.V.Srinivasan hasconfirmed that his appointment is within the limits of section 148 of the Companies Act2013 and has also certified that he is free from any disqualifications specified undersection 148 of the Companies Act 2013. The Audit Committee has also received acertificate from the said Cost Auditor certifying his independence and arms lengthrelationship with the Company.

20. SECRETARIAL AUDIT & SECRETARIAL STANDARDS:

In pursuance of section 204 of the Companies Act 2013 the Board of Directors at itsmeeting held on 11.02.2016 appointed M/s. V.Mahesh & Associates Company Secretariesin practice as Secretarial Auditor for the financial year 2015-16 and their report isannexed with the Board’s Report. (refer Annex. VII).

Pursuant to section 118(10) of the Companies Act 2013 the Company observesSecretarial Standards 1 and 2 relating to Board Meetings and General Meetings prescribedby the Institute of Company Secretaries of India.

• There are no disqualifications reservations or adverse remarks or disclaimersin the Statutory Auditors Cost Auditor and Secretarial Auditor’s Report.

• The Company since inception remains in the regime of unqualified financialstatements. The Company will comply with SEBI circular dt. 13.08.2012 and Regulation 33 ofSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and submitForm A along with Annual Report.

21. INTERNAL AUDIT:

Pursuant to Section 138(1) of the Companies Act 2013 the Company has appointedShri.S.Manisekaran Chartered Accountant (Membership No. 026400) to conductinternal audit of the Company for the financial year 2015-16. The Internal Auditor reportsto the Audit Committee and submits his reports on quarterly basis.

22. CREDIT RATING:

Credit Analysis & Research Ltd (CARE) has upgraded the Credit Rating on yourCompany as ‘CARE ‘A-’ (Single A minus) for long term bank facilities and‘CARE A1’ (A One) for short term bank facilities and for Fixed Deposit it isCARE A-(FD) [Single A Minus (Fixed Deposit] assigned to your Company for the current year.The ratings for the financial year 2016-17 are awaited on this date. Measured throughindustry yardstick these ratings are considered to be having adequate degree of safety andvery strong degree of safety respectively for a sugar mill.

23. ISO CERTIFICATION:

Your Company has been certified consecutively for the past eight years under BS EN ISO22000:2005 BS EN ISO 9001:2000 and OHSAS 18001:2007 for Manufacture of sugar associatedproducts and site activities and Occupational Health and Safety Management system byLloyd’s Registry Quality Assurance Limited.

24. FIXED DEPOSITS:

As on 31.03.2016 your Company had held deposits of Rs. 40.13 crores as against Rs.33.04 crores as on 31.03.2015. As at 31.03.2016 there were matured and unclaimed depositsamounting to Rs. 0.48 crores in respect of 82 deposits. As on the date of this reportamount of unclaimed deposits is Rs.0.48 crores. As there was no deposit unclaimed morethan seven years there was no transfer of unclaimed deposits to Investors Education andProtection Fund constituted under Section 124 of the Companies Act 2013 during the year.

25.CEO AND CFO CERTIFICATION:

The Managing Director and the Chief Financial Officer have provided the compliancecertificate to the Board of Directors as specified under Part B of Schedule II inaccordance with Regulation 17(8) of SEBI (LODR) Regulations 2015 which was placed beforethe Board at its Meeting on 26.05.2016. Annexure VIII.

26.ACKNOWLEDGEMENT:

Your Directors would like to take this opportunity to express their deep sense ofgratitude to the Cane growers the Shareholders Banks Institutions Central and Stategovernments Depositors Sugar Dealers Business Associates as also other regulatoryauthorities for their continued support and cooperation. Your Directors would also toplace on record their sincere appreciation for the total commitment dedication and hardwork put in by all the employees which contributed to the Company’s progress duringthe year under review.

For and on behalf of the Board of Directors
Place : Chennai VINOD R. SETHI
Date : 26.05.2016 Executive Chairman