The Members of
K G Petrochem Limited
Your Directors have pleasure in presenting this 37 Board's Report of yourCompany together with the Audited Statement of Accounts and the Auditors' Report of yourcompany for the financial year ended 31st March 2017.
(Rs. In Lacs)
| ||2016-2017 ||2015-2016 |
|Gross Income ||23052.77 ||21801.88 |
|Profit Before Interest and Depreciation ||3481.66 ||3050.82 |
|Interest Charges ||455.12 ||707.09 |
|Profit Before Depreciation ||3026.55 ||2343.73 |
|Depreciation ||1412.05 ||1360.95 |
|Net Profit Before Tax ||1614.50 ||982.78 |
|Provision for Tax ||718.88 ||55.90 |
|Net Profit After Tax ||895.61 ||926.88 |
R EVIEW OF OPERATIONS
During the Financial Year the performance of the company from revenue point of viewwas satisfactory as the Company has achieved turnover of Rs.22641.74 lacs as against Rs.21432.63 Lacs in the preceding financial year. The profit before tax for the year Rs.16.14 crores as compared to Rs. 9.83 crores in the previous year. The turnover wasincreased by 5.65% and PBT was increased by 64.19%.Profit after tax was decreased ascompared to previous year due to higher tax burden. Further Segment wise result ofoperation is as under:-
During the year its revenue from operation was Rs. 22561.57 lacs including exportsales of Rs 18870.78 lacs (FOB) as against Rs. 21366.44 lacs including export of Rs.16574.67 lacs in previous year growth of 5.59 %. The division has performed well duringthe year under review.
During the year the agency division has sold HDPE/LLDPE Granules 19795.22 Mt. amountingto Rs. 20360.94 lacs in comparison of 16146.45 Mt. amounting of Rs. 16798.67lacs andearned commission of Rs. 80.17 lacs as compared to last year Rs. 66.19 Lacs. The divisionhas performed well during the year under review.
Garment division is doing 100% Job work only for Textile Division.
CHANGE IN NATURE OF BUSINESS IF ANY
There was no change in the business of the Company during the financial year 2016-17.
In order to conserve the resources of company the directors are not recommending anydividend.
AMOUNTS TRANSFERRED TO RESERVES
During the Financial year 2016-17 company has withdrawn Rs. 85.45 Lacs being theproportionate amount of depreciation on the Capital Subsidy received from government underTUFS scheme. The amount was transferred to profit and loss account. The profit after taxof Rs.8.96 crores of the current year is carried to surplus account.
INVESTOR EDUCATION AND PROTECTION FUND
There was no unclaimed / unpaid dividend hence the company is not required to transferany amount to Investor Education and Protection Fund (IEPF) pursuant to sections 124 and125 of the Companies Act 2013 and other applicable provisions.
There was no any change in share capital of the company during the financial year2016-17.
MATERIAL CHANGES AND COMMITMENTS
No material changes have occurred and commitments made affecting the financialposition of the company between the end of the financial year of the company and the dateof this report.
There is no order passed by any regulator or court or tribunal against the companyimpacting the going concern concept or future operations of the company.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The company's internal control system is commensurate with the size scale andcomplexity of its operations. The main thrust of internal audit is to test and reviewcontrols appraisal of risks with best practices in the industry. The internal audit isentrusted to M/s. Arpit Vijay & Co Chartered Accountants. The Internal Auditor of thecompany conduct the audit on quarterly basis and Audit Committee actively review theInternal Audit Report. The Management with Audit Committee periodically reviews theInternal Control System and procedure for the efficient conduct of the business.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
On the recommendation of Nomination and Remuneration Committee the Board appointed Mr.Harshit Attar as a Company Secretary of the company with effect from May 27 2016.
The Company has received notice under Section 160 of the Companies Act 2013 from amember signifying his intention to propose the candidature of Mrs. Prity Singhalfor theoffice ofDirector and thus her appointment is proposed in the ensuing AGM.
As per the provisions of the Companies Act 2013 Mr. Manish Singhal will retire byrotation at the ensuing AGM and being eligible offered himself for re-appointment. TheBoard recommends his re-appointment.
The Independent Directors have confirmed and declared that they are not disqualified toact as an Independent Director in compliance with the provisions of Section 149 of theCompanies Act 2013 and the Board is also of the opinion that the Independent Directorsfulfill all the conditions specified in the Companies Act 2013 making them eligible toact as Independent Directors.
BOARD AND COMMITTEE MEETINGS
The details of board and committee meetings held during the financial year 2016-17 areset out in Corporate Governance Report forming part of this report. The provisions ofCompanies Act 2013 Secretarial Standard I andListing Regulations were adhered to whileconsidering the time gap between two meetings.
EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. More details on the same are givenin the Corporate Governance Report.
The Company has prepared an annual performance evaluation policy for performanceevaluation of Independent Directors Board and the Committees.
Separate exercise was carried out to evaluate the performance of individual Directorsincludingthe Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors who also reviewed the performance of theSecretarial Department.
In accordance with the provisions of Section 178 of the Companies Act 2013 Company hasNomination and Remuneration policy in place and the same is given in the CorporateGovernance Report forming part of this Report.
ICRA has assigned a long-term rating of ICRA BBB (pronounced ICRA Triple B) andshort-term rating of ICRA A3+ (ICRA A three Plus) vide letter dated 20.07.2017.ICRA BBBthis rating are considered to have moderate degree of safety regarding timely servicing offinancial obligations. Such instruments carry moderate credit risk. ICRA] A3+Instruments with this rating are considered to have moderate degree of safety regardingtimely payment of financial obligations.
DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and Rules made thereunder Company hasconstituted Internal Complaints Committees (ICC) to look into complaints relating tosexual harassment at work place of any women employee. During the financial year ended31st March 2017 the Company did not receive any compliant and no compliant was pendingat beginning and at the end of the year.
Shares of the Company are listed on the Bombay Stock Exchange.
SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
The company does not have any subsidiary/associate/joint venture.
The board of directors of the Company constituted the following Committees: a. AuditCommittee b. Nomination and Remuneration Committee c. Stakeholder Relationship Committeed. Corporate Social Responsibility (CSR) Committee
The Committees composition caharters and meetings held during the year and attendancethereat are given in the Report on Corporate Governance forming part of the AnnualReport.
The Company has formulated a vigil mechanism (whistle blower policy) for its directorsand employees of the Company for reporting genuine concerns about unethical practices andsuspected or actual fraud or violation of the code of conduct of the Company as prescribedunder the Companies Act 2013 and Regulation 22(1) of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015. This vigil mechanism shall provide a channel tothe employees and Directors to report to the management concerns about unethical behaviorand also provide for adequate safeguards against victimization of persons who use themechanism and also make provision for direct access to the chairperson of the AuditCommittee in appropriate or exceptional cases.The Vigil Mechanism Policy has been uploadedon the website of the Company at http://www.kgpetro.in.
CODE OF CONDUCT
Directors Key Managerial Personnel and senior management of the Company have confirmedcompliance with the Code of Conduct applicable to the Directors and employees of theCompany and the declaration in this regard made by the CEO & Whole Time Director isattached as Annexure 'I' which forms a part of this Report.
The Code of Conduct is available on the Company's website www.kgpetro.in
HUMAN RESOURCE MANAGEMENT HEALTH AND SAFETY
During the year the Company had cordial relations with workers staff and officers. Theshop floor management is done through personal touch using various motivational tools andmeeting their training needs requirements. The company has taken initiative for safety ofemployees and implemented regular safety audit imparted machine safety training wearingprotective equipment's etc.
The Company believes in empowering its employees through greater knowledge team spiritand developing greater sense of responsibility. There were 604 regular employees as atMarch 31 2017.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12)of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 regarding employees is given in Annexure'II'.
There was no employee in the company drawing remuneration in excess of the limits setout in the Rule 5(2) and 5(3) of the Companies (Appointment and remuneration of ManagerialPersonnel) Rules 2014.
EXTRACT OF ANNUAL RETURN
The particulars required to be furnished under Section 134(3)(a) of the Companies Act2013 read with Companies(Management and Administration) Rules 2014 as prescribed in FormNo. MGT-9 is given in
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. During the Year thecompany has not entered into any contracts / arrangements / transactions with relatedparties which could be considered material in accordance with the policy of the company onmateriality of related party transaction hence Form No. AOC-2 is not applicable to thecompany.
CORPORATE SOCIAL RESPONSIBILITY
The Company has CSR policy in place and he same can be accessed athttp://kgpetro.in/corporate_responsibility.php. The annual report on CSR activities isannexed as
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
Information on conversation of energy technology absorption foreign exchangeearnings and out go pursuant to sec. 134 of the Companies Act 2013 read with Rule of theCompanies (Accounts)Rules 2014 is given in "Annexure V" of the report.
A separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report as Annexure 'VI' and the Certificate from CS SandeepKumar Jain Practicing Company Secretaries confirming compliance with the requirements ofCorporate Governance as stipulated in Schedule V of SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 is annexed as Annexure 'VII'.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required by Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is given in Annexure'VIII'.
STATUTORY AUDITORS AND REPORT THEREON
Pursuant to the provisions of Section 139 of the Act and the rules framed there underR Sogani& Associates Chartered Accountants (FRN 018755C) was appointed as statutoryauditors of the Company from the conclusion of the thirty fourth annual general meeting(AGM) of the Company held on September 27 2014 till the conclusion of the thirty-ninthannual general meeting to be held in the year 2019 subject to ratification of theirappointment at every AGM. In terms of the first proviso to Section 139 of the CompaniesAct 2013 the appointment of R Sogani& Associates Chartered Accountants asstatutory auditor of the Company is placed for ratification by the shareholders.
Pursuant to Section 141 of the Companies Act 2013 and relevant Rules prescribed thereunder the Company has received certificate from the Auditors to the effect inter-aliathat their re-appointment would be within the limits laid down by the Act and that theyare not disqualified for such re-appointment under the provisions of applicable laws
The observation of the Auditors in their report read with relevant notes on theaccounts as annexed are self-explanatory and need no elaboration.
SECRETARIAL AUDIT AND REPORT
According to provision of the section 204 of the Companies Act 2013 read with rule 9 ofthe companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report Submitted by M/s Arms & Associates LLP PracticingCompany Secretaries for the financial year ended 31st March 2017 is annexed herewith foryour kind perusal and information. (Annexure -IX)
As per Sub Rule (3) of Rule 4 of Companies (Cost Records & Audit) Rules 2014Cost Audit for the FY 2016-17 is not applicable on the company as the export turnover ofthe company is more than 75% of its total turnover.
LOANS GUARANTEES AND INVESTMENTS U/s 186.
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 notapplicablefor the F.Y. 2016-17.
Your company has not accepted any deposit and accordingly no amount was outstanding asat the Balance Sheet date.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid. Ason March 31 2017 97.11% of the share capital stands dematerialized.
PREVENTION OF INSIDER TRADING
Pursuant to the provisions of the regulations the Board has formulated and implementeda Code of Conduct to regulate monitor and report trading by its employees and otherconnected persons and Code of Practices and Procedures for fair disclosure of UnpublishedPrice Sensitive Information. The same is available on the
Company's website i.e. http://www.kgpetro.in
Statements in this report describing the Company's objectives expectations and/oranticipations may be forward looking within the meaning of applicable Securities Law andRegulations. Important factors that could influence the Company's operations includeglobal and domestic supply and demand conditions affecting selling prices of finishedgoods availability of inputs and their prices changes in the Government policiesregulations tax laws economic developments within the country and outside and otherfactors such as litigation and industrial relations.
The Company assumes no responsibility in respect of the forward-looking statementswhich may undergo changes in future on the basis of subsequent developments informationor events.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Board of Directors of theCompany 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 had 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 at the end of the financial year and ofthe profit and loss of the company for that period;
(c) The directors had 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 had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.
| ||For and on behalf of the Board of Directors || |
| ||KG Petrochem Limited || |
|Date: 23.08.2017 ||Manish Singhal ||Gauri Shanker Kandoi |
|Place: JAIPUR ||Whole Time Director ||Chairman & Managing Director |
| ||DIN : 00120232 ||DIN : 00120330 |