Your Directors have pleasure in presenting the 26th Annual Report togetherwith the Audited Financial Statements for the year ended 31st March 2016.
The Company's financial performance for the year ended 31st March 2016 issummarized below:
|Particulars ||2015-16 ||2014 - 15 |
|Total Turnover & Other Income ||14448.51 ||14618.22 |
|(Less) : Manufacturing and Other Expenses ||12851.26 ||13852.18 |
|Profit / (Loss) before interest and Depreciation ||1597.25 ||766.04 |
|(Less) : Interest ||13.12 ||8.5 |
|Profit / (Loss) After Interest ||1584.13 ||757.54 |
|(Less) : Depreciation and Misc. Expenses written off ||110.32 ||97.19 |
|Net Profit before Tax ||1473.81 ||660.35 |
|(Less) : Provision for Tax ||263.5 ||135.37 |
|Profit/(Loss) after tax ||1210.31 ||524.98 |
|Less : Proposed dividend ||- ||72.67 |
|Dividend Distribution Tax ||- ||14.87 |
|Balance Profit/(Loss) brought forward from Previous Year ||625.15 ||187.71 |
|Balance profit carried to balance Sheet ||1835.45 ||625.15 |
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:
The total net profit before tax of the Company has increased from Rs. 660.35 Lacs toRs. 1473.81 Lacs in 2016. The Net profit after tax has increased from Rs. 524.98 Lacs toRs. 1210.31 Lacs in 2016.
During the year the Company has undertaken production of CPC Crude and cuprouschloride. The production was undertaken on job work basis. The Company is trying toinitiate and streamline the operation cycle of the plant by bringing about structural andstrategic alterations in the plant and also by investing funds and resources for upgradingand tapping the production capabilities of the Company.
To conserve the resources for future requirements your Directors do not recommend anydividend for the year ended 31st March 2016.
The Company does not transfer any amount to General Reserve.
CHANGE IN NATURE OF BUSINESS:
There was no change in the nature of business activities of the Company during the yearunder review.
SUBIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have subsidiary joint venture and associate company.
On 7th February 2015 the Company had issued and allotted 2400000warrants for cash at price of Rs. 59/- each (including premium of Rs. 49/- each) onpreferential basis carrying an option/ entitlement to subscribe to equivalent number ofEquity Shares of Rs. 10/- each within a period of 18 months from the date of their issue.
The shareholders of the Company had approved the sub-division of equity shares havingface value of Rs.10/- each fully paid up into 10 equity shares of Re.1/- each in its 25thAnnual General Meeting held on 29th September 2015. Accordingly the EquityShares of Rs.10/- each had been sub divided into 10 equity shares of Re.1/- each w.e.f. 2ndNovember 2015.
During the year the Company has issued and allotted 20000000 Equity Shares of Re.1/- each upon conversion of 2000000 warrants on various dates. As on 31stMarch 2016 the issued subscribed and the paid up share capital of the Company stood atRs. 92673170/- divided in of 92673170 equity shares of Re. 1/- each.
On 7th April 2016 the Company further issued and allotted 4000000 EquityShares of Re. 1/- each upon conversion of 400000 warrants. After this allotment theissued subscribed and the paid up share capital of the Company stood at Rs. 96673170/-divided in of 96673170 equity shares of Re. 1/- each.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report except issue and allotment of 4000000 Equity Shares of Re.1/- each upon conversion of 400000 warrants.
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 Mrs. Snehlata D. Sharma (DIN:01854393) Non-Executive Director of the Company retires by rotation at the ensuing 26thAnnual General Meeting and being eligible has offered herself for re-appointment.
Your Board recommends the re-appointment of Mrs. Snehalata D. Sharma as Director of theCompany.
KEY MANAGERIAL PERSONNEL
Mr. Mohit P. Kaushik Executive Director of the Company was appointed as ChiefExecutive Officer (CEO) of the Company w.e.f. 30th May 2015. The currenttenure of Mr. Mohit Kaushik as an Executive Director expires on 8th December2016. Considering his contribution to the growth of the Company the Board of Directors ofthe Company in its meeting held on 12th August 2016 upon recommendation of theNomination and Remuneration Committee and approval of the Audit Committee reappointed Mr.Mohit Kaushik as an Executive Director for a further period of 3 (three) years w.e.f. 9thDecember 2016 on the payment of remuneration of Rs. 25000/- per month subject to theapproval of the shareholders. The Board recommends for your approval for his reappointment.
Mr. R.V Srinivasan who was appointed as a Chief Financial Officer of the Companyw.e.f. 30th May 2015 has resigned on 5th December 2015 and Mrs.Manali M. More was appointed as Chief Financial Officer of the Company w.e.f. 5th December2015.
Mr. Anil V. Rajkotia Company Secretary and Compliance Officer of the Company resignedfrom the services of the Company w.e.f. 13th May 2016.
Mr. Parambadi M. Nair was appointed as Company Secretary and Compliance Officer of theCompany w.e.f. 24th May 2016.
During the year under review the Company has not accepted or renewed any depositswithin the meaning of Section 73 and 76 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014.
EXTRACTS 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 attached herewith andmarked as 'Annexure 1'.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Board met 13 (Thirteen) times during the year. The details of the meetings aregiven in the Corporate Governance Report. The intervening gap between the two meetings waswithin the period prescribed under the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby confirms that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2016 and ofthe profit of the company for period ended on that date;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company have given the requisite declaration pursuantto Section 149(7) of the Companies Act 2013 to the effect that they meet criteria ofindependence as provided in Section 149(6) of the Act.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:
The Board on the recommendation of the Nomination and Remuneration Committee of theCompany has framed a policy for selection and appointment of Directors Senior Managementand their remuneration. The Remuneration Policy is attached herewith and marked as 'Annexure2'.
CORPORATE SOCIAL RESPONCIBILITY:
Pursuant to Section 135 of the Companies Act 2014 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 the Company has formed Corporate SocialResponsibility Committee and a Policy on Corporate Social Responsibility (CSR)
The Company is looking for proper project to make expenditure towards its CSRobligations.
The brief outline of the CSR Policy of the Company and the initiatives undertaken bythe Company on CSR activities during the year is set out in 'Annexure 3' of thisreport in the format prescribed in the Rule 8 of Companies (Corporate SocialResponsibility Policy) Rules 2014.
M/s. Sayeed Khan & Associates Chartered Accountants (FRN:252227W) Mumbai theStatutory Auditors of the Company hold office until the conclusion of the ensuing 26thAnnual General Meeting and are eligible for re-appointment. The Company has received aletter from them to the effect that they are willing to continue as Statutory Auditors andif re-appointed their re-appointment would be within the limits prescribed under Section139 of the Companies Act 2013 and they are not disqualified from being appointed asAuditors.
Your Directors recommend the re-appointment of M/s. Sayeed Khan & AssociatesChartered Accountants Mumbai as Statutory Auditors of the Company to hold office fromthe conclusion of the ensuing 26th Annual General Meeting upto the conclusionof 27th Annual General Meeting of the Company and to audit financial statementsfor the financial year 2016-17.
SECRETARIAL AUDIT REPORT:
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 hasappointed M/s. M Baldeva Associates Company Secretaries Thane to undertake theSecretarial Audit of the Company. The Secretarial Audit Report is attached herewith andmarked as 'Annexure 4'.
The Company has appointed M/s. Deepak Bansal & Co. Chartered Accountants Mumbaias Internal Auditors. The Internal Auditors monitor and evaluate the efficiency andadequacy of internal control systems in the Company its compliances with operatingsystems accounting procedures and policies at all locations of the Company and reportsthe same on quarterly basis to the Audit Committee.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS: Therewere no qualifications reservations or adverse remarks made by the Statutory Auditors intheir report.
With respect to observations made by the Secretarial Auditors in their report we wouldlike to state that:
1. Inadvertently some forms could not filed or filed with delay with the ROC;
2. Inadvertently there was delay in depositing dividend amount in separate bank accountand posting of dividend warrants/credit through ECS;
3. Delay in delivery of share certificates received for transfer of shares was byoversight;
4. The Company has filed an appeal before the Securities Appellate Tribunal (SAT)against the SEBI order no. WTM/PS/08/CFD/June/2013 dated 4th June 2013 readwith SEBI order no. WTM/ PS/ 134/ CFD/Jan/2016 dated 11th January 2016 and thematter is pending before the SAT; and
5. The delay in giving advance intimation of Board Meeting to BSE for the Board Meetingheld on 30th May 2015 and submission of Limited Review Report on theUn-audited Financial Results for the half year ended 30th September 2015 wasby oversight.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
There were no loans guarantees and investments made by the Company under Section 186of the Companies Act 2013 during the year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TO SECTION188(1) OF THE COMPANIES ACT 2013:
There were no contracts or arrangements or transactions with any related parties whichcould be considered material in accordance with the policy of the Company during the yearunder review. Hence the Company is not required to disclose details of the related partytransactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Details regarding conservation of energy technology absorption foreign exchangeearnings and outgo is attached herewith and marked as 'Annexure 5'.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of Section 134(3) of Companies Act 2013 read with Rule 8 ofThe Companies (Accounts) Rules 2014 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out an annual performance evaluationof its own performance the directors individually as well as the evaluation of theworking of its Audit Nomination and Remuneration Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:
The SEBI vide its order no. WTM/PS/134/CFD/Jan/2016 dated 11th January2016 for non-compliance of Regulations 19(2)(b) and 19A of the Securities Contracts(Regulation) Rules 1957 read with Clause 40A of the Listing Agreement with respect to notmaintaining minimum public shareholding by the Company has freezed the voting rights andcorporate benefits like dividend rights bonus shares split etc. of the promoter /promoter group with respect to excess of proportionate promoter / promoter groupshareholding in violatios of said regulations till such time it complies with minimumpublic shareholding requirements.
The Company has filed a petition against the said SEBI order before the SecuritiesAppellate Tribunal (SAT) and the matter is pending before the SAT.
INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has in place proper and adequate Internal Control System commensurate withthe size scale and complexity of its operations with reference to the financialstatements. The Company monitors and evaluates the efficacy and adequacy of internalcontrol system its compliance with operating systems accounting procedures and policies.
AUDIT COMMITTEE AND ITS COMPOSITION:
As on 31st March 2016 the Audit Committee comprised of Mr. Nazirsaheb M.Sayyad Mr. Sunil A. Sawant Independent Directors and Mr. Mohit P Kaushik ExecutiveDirector. Mr. Nazirsaheb M. Sayyad is a Chairman to the Committee.
The Audit Committee of the Company reviews the reports to be submitted with the Boardof Directors with respect to auditing and accounting matters. It also supervises theCompany's internal control and financial reporting process.
Other details with respect to Audit Committee are given in Corporate Governance Report.
VIGIL MECHANISM POLICY:
The Company has a Vigil Mechanism policy to deal with instance of fraud andmismanagement if any. The mechanism also provides for adequate safeguards againstvictimization of directors and employees who avail of the mechanism and also provide fordirect access to the Chairman of the Audit Committee in the exceptional cases. The detailsof the Vigil Mechanism Policy is explained in the Corporate Governance Report and alsoposted on the website of the Company. We affirm that during the financial year 2015-16 noemployee or director was denied access to the Audit Committee.
MANAGERIAL REMUNERATION AND OTHER DETAILS:
The necessary details/disclosures of Ratio of Remuneration to each Director to themedian employee's remuneration and other details pursuant to the section 197(12) of theCompanies Act 2013 and as per Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith and marked as 'Annexure 6'.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION ANALYSIS REPORT:
Pursuant to Regulation 34(3) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the following have been made a part of the Annual Reportand are attached to this report:
Management Discussion and Analysis Report
Corporate Governance Report
Declaration by Executive Director/CEO affirming with the compliance of the codeof conduct of Board of Directors and Senior Management
Auditors' Certificate regarding compliance of conditions of Corporate Governance
INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITONAND REDRESSAL) ACT 2013.
Internal Complaint Committee under Section 4 of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. During the year no complaintwas received by the Committee.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. Your Directors also acknowledgegratefully the support and confidence reposed by the shareholders of the Company.For& on behalf of the Board of Directors For Kesar Petroproducts Limited
Mohit P. Kaushik
Executive Director & CEO
Snehlata D. Sharma
Date: 12th August 2016