Your Directors presents the 27th Annual Report together with the Audited FinancialStatements for the year ended 31st March 2017.
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
| || ||( Rs in Lakhs) |
|Particulars ||2016-17 ||2015-16 |
|Total Turnover & Other Income ||17443.01 ||14448.51 |
|Less : Manufacturing and Other Expenses ||14715.33 ||12851.26 |
|Profit / (Loss) before interest and Depreciation ||2727.68 ||1597.25 |
|Less : Interest ||61.34 ||13.12 |
|Profit / (Loss) after Interest ||2666.34 ||1584.13 |
|Less : Depreciation and Misc. Expenses written off ||129.71 ||110.32 |
|Net Profit / (Loss) Before Tax ||2536.63 ||1473.81 |
|Less: Provision for Tax (including Deferred Tax) ||528.39 ||263.5 |
|Profit/(Loss) after tax ||2008.24 ||1210.31 |
|Balance Profit/(Loss) brought forward from Previous Year ||1835.46 ||625.15 |
|Balance profit / (Loss) carried to balance Sheet ||3843.70 ||1835.45 |
Review of Business Operations and Future Prospects:
The total net profit before tax of the Company has increased from C1473.81 Lacs toC2536.63 Lacs in 2017. The Net profit after tax has increased from C1210.31 Lacs toC2008.24 Lacs in 2017.
During the year the Company started producing value added pigments Beta Blue. Thecoming years will see enhanced production in this field. This single activity has added tothe bottom line of the Company.
Apart from this the capacity constraint in the Alpha Blue was also attended to byde-bottlenecking. The gradual shift from CPC crude manufacturing to more value addedpigments will be the strategy going forward.
The Dye intermediate factory also has started and this year the production innaphthalene based dye intermediates will further add to the top and bottom line.
One major achievement of the Company was going into zero liquid discharge in the DyeIntermediates Plant. The same concept is being followed for the pigments which is likelyto commence functioning in the last quarter of the current year.
In view to conserve the resource of the Company your Directors do not recommend anydividend for the year ended 31st March 2017.
The Company has not transferred any amount to General Reserve.
Change in Nature of Business:
The Company is engaged in the business of manufacturing organic chemicals Bisphenol-A.There was no change in the nature of business activities of the Company during the yearunder review.
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.
On 7th February 2015 the Company had issued and allotted 2400000 warrants for cashat a price of C59/- each (including premium of C49/- each) on preferential basis carryingan option/ entitlement to subscribe to equivalent number of Equity Shares of C10/- eachwithin 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 C10/- each fully paid up into 10 equity shares of Re.1/- each in the 25thAnnual General Meeting held on 29th September 2015. Accordingly the Equity Shares ofC10/- each had been sub divided into equity shares of Re.1/- each w.e.f. 2nd November2015.
On 7th April 2016 the Company issued and allotted 4000000 Equity Shares of Re. 1/-each upon conversion of 400000 warrants. After this allotment the issued subscribedand the paid up share capital of the Company stood at C96673170/- divided in to96673170 equity shares of Re. 1/- each.
Subidiary Joint Ventures and Associate Companies:
The Company does not have subsidiary joint venture and associate company.
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 deposits Rules) 2014. There was no deposit which remained unclaimed andunpaid at the end of the year.
Extract of Annual Return:
An extract of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 readwith Rule 12 of the Companies (Management and administration) Rules 2014 is attachedherewith and marked as Annexure I'.
Directors and Key Managerial Personnel:
Mr. K. D. Fatnani was appointed as an Additional Director by the Board of Directorspursuant to Section 161 of the Companies Act 2013 to hold the office of Non ExecutiveIndependent Director of the Company w.e.f 30th May 2017. He is proposed to be appointedas a Non-Executive Independent Director at 27th Annual General Meeting. A brief profile ofMr. K. D. Fatnani is given in Annexure II to the Notice of 27th Annual General Meeting.
As per Section 152(6) of the Companies Act 2013 Mr. Mohit. P. Kaushik retires byrotation and being eligible offers himself for reappointment as the Director of theCompany.
Mr. Sunil Sawant ceased to be Director of the Company w.e.f. 22nd May 2017. The Boardof Directors placed on record its appreciation for his association with the Company andfor his valuable service and guidance.
Mr. Anil V. Rajkotia resigned as the Company Secretary and Compliance Officer of theCompany on 13th May 2016 and Mr. P. M. Nair was appointed as the Company Secretary andCompliance Officer of the Company w.e.f 24th May 2016.
Other than stated above there was no change in the Key Managerial Personnel of theCompany.
Composition of Board and Statutory Committees formed thereof:
The Composition of the Board and Statutory Committees thereof along with other detailsare given in Corporate Governance Report.
Number of Board Meetings conducted during the year under review:
The Board met 8 (Eight) times during the year. The details of the meetings are given inthe Corporate Governance Report. The intervening gap between the two meetings was withinthe period prescribed under the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
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.
Formal Annual Evaluation:
The Board has carried out an annual performance evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Audit Nominationand Remuneration Committees. The manner in which the evaluation has been carried out hasbeen explained in the Corporate Governance Report.
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 asAnnexure II'.
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 2017 and of the profitof 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.
Particulars of Loans Guarantees or Investments made under Section 186 of the CompaniesAct 2013:
Following are the particulars of loans guarantees and investments under Section 186 ofthe Companies Act 2013 of the Company:
|(A) Loans provided: || || ||(Amount in Rs) |
|Opening Balance ||Amount of Loans Given During The Year ||Amount of Repayment ||Closing Balance |
|215289189 ||13389114 ||1395070 ||227283233 |
No Guarantees were given during the year under review.
|(C) Investments made: || || || ||(Amount in Rs) |
|Nature of Investments ||Opening Balance ||Amount Invested during the year ||Amount Redeemed ||Closing Balance |
|Money Market Fund ||- ||10000000 ||- ||10000000 |
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.
Particulars of Employees:
There was no employee who was employed throughout the year or part thereof and inreceipt of remuneration aggregating to C10200000/- p.a. or more or who was employed forpart of the year and in receipt of remuneration aggregating to C850000/- p.m. or more.
Particulars as per Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:
The details related to employees and their remuneration as required under Section197(12) of the Companies Act 2013 and Rule 5(1) and 5 (2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 are mentioned in Annexure IV'to this Board's Report.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:
(A) Conservation of energy-
|(i) the steps taken or impact on conservation of energy; ||NIL |
|(ii) the steps taken by the company for utilizing alternate sources of energy; ||Exploring the possibility of power generation through sulphuric acid. |
|(iii) the capital investment on energy conservation equipment. ||NIL |
|(B) Technology absorption- || |
|(i) the efforts made towards technology absorption; ||NIL |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution; ||NIL |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- || |
|(a) the details of technology imported; || |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and ||NIL |
|(iv) the expenditure incurred on Research and Development. ||NIL |
|(C) Foreign exchange earnings and outgo- || |
|The Foreign Exchange earned in terms of actual inflows during the year; ||C 449.14 Lakhs (Previous year: C244.56 Lakhs) |
|The Foreign Exchange outgo during the year in terms of actual outflows. ||C 1019.39 Lakhs (Previous year: C1070.18 Lakhs) |
Significant/Material orders passed by the Regulators:
There was no significant material order passed by any regulator or court or tribunalwhich impacts the going concern status of the Company or will have bearing on company'soperations in future:
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. The Company monitors and evaluates theefficacy and adequacy of internal control system its compliance with operating systemsaccounting procedures and policies.
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 2016-17 noemployee or director was denied access to the Audit Committee.
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.
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 -Annexure V' Corporate Governance Report - Annexure VI' Declaration byExecutive Director/CEO affirming with the compliance of the code of conduct of Board ofDirectors and Senior Management - Annexure VII' Auditors' Certificate regardingcompliance of conditions of Corporate Governance - Annexure IX'
The term of M/s. Sayeed Khan & Associates Chartered Accountants Mumbai as thestatutory auditors of the Company expires in financial year 2016-17 pursuant to Section139 of the Companies Act 2013 and Rule 6(3) of the Companies (Audit and Auditors) Rules2014.
It is proposed to appoint M/s. A. Sachdev Co. Chartered Accountants Mumbai as thestatutory auditors of the Company for a period of five years commencing from financialyear 2017-18. A written consent for appointment and a certificate that appointment ifmade will be in accordance with the conditions of Section 141 of the Companies Act 2013and Rule 4 of the Companies (Audit and Auditors) Rules 2014 has been received by theCompany from M/s. A. Sachdev Co. Chartered Accountants Mumbai.
Your Directors recommend the appointment of M/s. A. Sachdev Co. Chartered AccountantsMumbai as Statutory Auditors of the Company to hold the office for a period of five yearscommencing from financial year 2017-18. The appointment if required will be ratified bythe members at every Annual General Meeting after the 27th Annual General Meeting.
The Company has appointed M/s. K. P. Kapadia & 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.
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. Mahesh Kandoi & Associates Company Secretaries Mumbai to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is attached herewithand marked as Annexure VIII'.
Explanation or comments on qualifications reservations or adverse remarks ordisclaimers made by the auditors and the practicing Company Secretary in their reports
There were no qualifications reservations adverse remarks made or fraud reported bythe Statutory Auditors in their reports.
With respect to observation made by Secretarial Auditor in his report we would like tostate that:
a) The term office of M/s Sayeed Khan & Co Chartered Accountants Mumbai who werenot subjected to peer review as statutory auditors was expiring on 31st March 2017 interms of Section 139 of the Companies Act 2013 and Rule 6(3) of the Companies (Audit andAuditors) Rules 2014 and hence change in auditor was not effected during the year underreview. However M/s. A. Sachdev Co. Chartered Accountants Mumbai who are proposed tobe appointed as the Statutory Auditors of the Company have confirmed that they aresubjected to peer review.
b) The Form IEPF-2 could not be uploaded within the prescribed time due toinadvertence.
c) Consequent upon change in the Registrar and Share Transfer Agent (RTA) the Companyhas submitted the tripartite agreement to NSDL through RTA a duly signed copy thereof isyet to be received.
d) Investor complaint report to be filed under Regulation13(3) of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 for quarter ended 30thSeptember 2016 could not be filed due to inadvertence.
Corporate Social Responsibility
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 initiativesundertaken by the Company on CSR activities during the year is set out in AnnexureIII' of this report in the format prescribed in the Rule 8 of Companies (Corporate SocialResponsibility Policy) Rules 2014.
Information under the Sexual Harassment of Women at Workplace (Prevention Prohibitonand Redressal) Act 2013
Internal Complaint Committee was formed under Section 4 of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year nocomplaint was 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.
| ||By Order of the Board of Directors |
| ||For Kesar Petroproducts Limited |
| ||Mohit P. Kaushik |
| ||Executive Director & CEO |
|Place: Mumbai ||DIN: 06463483 |
|Date: 14th August 2017 || |