FOR THE YEAR ENDED MARCH 31 2017
Your Directors have pleasure in presenting the 41st Annual Report of the Companytogether with the Audited Statement of Accounts for the year ended 31st March 2017.
Summary of Financial performance of the Company for the Financial Year 2016-17 isdepicted below:
|Particulars ||Year Ended 31-03-2017 ||Year Ended 31-03-2016 |
|Revenue from operations ||1023585134 ||1411779157 |
|Other income ||2823422 ||8523274 |
|Operating Expenditure ||999308379 ||1384736576 |
|Profit before Interest Depreciation & Tax ||27100177 ||35565855 |
|Depreciation ||8948265 ||9117199 |
|Interest ||16560170 ||18452221 |
|Profit before tax ||1591742 ||7996435 |
|Provision for income tax || || |
|i) Current year Tax ||(2625706) ||(4200000) |
|ii) Deferred Tax ||2100598 ||1790893 |
|Profit after tax ||1066634 ||5587328 |
|Profit/ (Loss) Brought forward from previous years ||90495712 ||86096919 |
|Profit/ (Loss) Carry forward to Balance Sheet ||91562346 ||90495712 |
|Earnings per share (Basic/ Diluted) ||1.35 ||7.07 |
STATE OF AFFAIRS OF THE COMPANY AND FUTURE OUTLOOK:
The Company passing through a critical phase during the year under review in view ofrecession in the country due to demonetization which resulted to prevail all products ofthe company like Cotton Seed De-oiled cakes Hulls Oils and Linters prices at abnormallylow level and no parity between cottonseed prices and its products from November 2016 tillMay ending. Further failure of crop also resulted to fall in processing volumes of cottonseed from 64957 MT to 38580 MT during the year under review.
As the weather forecast given by the experts is very positive in cotton growing areaswhich may yield better volumes and improve the availability of cottonseed your Directorsare optimistic in utilizing the full production capacities to ensure better workingresults in the ensuing years. Further Goods and Services Tax (G.S.T.) is also going to beimplemented in our country from the coming month of July 2017 onwards which willcertainly ease the cost of interstate tax burden on purchase of raw material from otherstate and the cost of purchase will be the same as equal to intra state purchase and thecompany can enjoy the input tax credit except the logistics cost.
EXPORT AND FOREIGN EXCHANGE EARNINGS:
Your Directors wish to inform that the Company has exported 2492.390 MT of CottonLinters worth 331032.90 lakhs during the year under review as against 1727.875 MT worth33425.78 lakhs in the previous year
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure - I andforms an integral part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as required under regulation 34 of theSEBI (LODR) Regulations 2015 forms part of the Annual Report as ANNEXURE NO:V
CHANGE IN THE COMPOSITION OF THE BOARD:
i. DIRECTORS LIABLE TO RETIRE BY ROTATION IN ENSUING ANNUAL GENERAL MEETING
Mr. Maddi Lakshmaiah (DIN- 00013387) and Mr. Maddi Venkateswara Rao (DIN- 00013393)retire by rotation under Article 122 of the Articles of Association of the Company andbeing eligible offer themselves for reappointment as Directors. The Board recommendstheir reappointment.
ii. DIRECTORS RE-APPOINTMENTS IN 40TH AGM:
Mr. Maddi Lakshmaiah (DIN- 00013387) and Mr. Maddi Venkateswara Rao (DIN- 00013393)retire by rotation under Article 122 of the Articles of Association of the Company andbeing eligible offer themselves for reappointment as Directors .The shareholders approvedtheir re-appointment as directors of the company at 40th Annual General Meeting of thecompany held on 10.08.2016
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Companies Act 2013 the Board is required to carryout annual evaluation of its own performance and that of its committees and individualDirectors. The Nomination and Remuneration Committee of the Board is also required tocarry out evaluation of every Director s performance. Accordingly your Company hascarried out the performance evaluation during the year under review.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
In terms with Section 149 (7) of the Companies Act 2013 All the Independent Directorsof the Company have declared that they meet the criteria of Independence in terms ofSection 149(6) of the Companies Act 2013 and that there is no change in status ofIndependence
NUMBER OF BOARD MEETINGS:
During the Financial Year 2016-17 Four (4) Meetings of the Board of Directors of theCompany were held viz25th May 2016 10th August 2016 10th November 2016 and 11thFebruary 2017 with a gap not exceeding a period of 120 days as prescribed under the Act.
A. Board Meetings
|S.No ||Date of meeting ||Total Number of directors as on the date of meeting ||Number of directors attended |
|1. ||25.05.2016 ||06 ||4 |
|2. ||10.08.2016 ||06 ||6 |
|3. ||10.11.2016 ||06 ||3 |
|4. ||11.02.2017 ||06 ||5 |
|S.No ||Name of the Director ||No of Meetings which were entitled to attend ||No. of Meetings Attended |
|1. ||Sri Maddi Lakshmaiah ||04 ||4 |
|2. ||Sri Maddi Ramesh ||04 ||4 |
|3. ||SriVadlamani VenkataSubramanya Ravi ||04 ||2 |
|4. ||Sri Maddi Venkateswara Rao ||04 ||4 |
|5. ||Smt Rallabandi Lakshmi Sarada ||04 ||1 |
|6. ||Sri Lakkaraju Shyam Prasad ||04 ||3 |
During the Financial Year 2016-17 40th Annual General Meeting of the Company was heldon Wednesday 10th August 2016. Except the 40th Annual General Meeting no other meetingsof the members were held in financial year 2016-17
| || || ||Attendance |
|Type of Meeting ||Date of Meeting ||Total No. of members entitled to attend ||No. of members attended ||% of total shareholding |
|Annual General Meeting ||10.08.2016 ||309 ||13 ||58.41 |
SEPARATE MEETING OF INDEPENDENT DIRECTORS
During the year under review Two meetings of Independent Directors was held on25.05.2016 and 10.02.2017 in compliance with the requirements of Schedule IV of theCompanies Act 2013.All independent directors were attended to their meeting held on25.05.2016 and 10.02.2017. The Independent Directors at the meeting inter alia reviewedthe Performance of Non-Independent Directors and Board as a whole. Performance of theChairperson of the Company taking into account the views of Executive Director andNon-Executive Directors. Assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
DIRECTORS RESPONSIBILITY STATEMENT:
In conformity with the provisions under Section 134 (3) (c) which is introduced by theCompanies Act 2013 your directors confirm that:- 33 in the preparation of the annualaccounts for the year ended March 31 2017 the applicable accounting standards read withrequirements set out under Schedule III to the Act have been followed and there are nomaterial departures from the same;3
b) the Directors have selected sound accounting policies and applied them consistentlyand made judgements 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 March 31 2017 and of the profit ofthe Company for the year 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 the 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) theDirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
(a) BRIEF DESCRIPTION OF TERMS OF REFERENCE:
The Terms of Reference of this committee cover the matters specified for AuditCommittee under Section 177 of the Companies Act 2013 and as follows: a. Oversight ofthe Company s financial reporting process and the disclosure of its financial informationto ensure that the financial statement is correct sufficient and credible. b.Recommending the appointment and removal of external auditor fixation of audit fee andalso approval for payment for any other services. c. Reviewing with management the annualfinancial statements before submission to the
Board focussing primarily on:
- Any changes in accounting policies and practices
- Major accounting entries based on exercise of judgment by management
- Qualifications in draft Auditors Report
- Significant adjustments arising out of audit
- The going concern assumption
- Compliance with stock exchange and legal requirements concerning financial statements
- Any related party transactions i.e. transactions of the company of material naturewith promoters or the management their subsidiaries or relatives etc. that may havepotential conflict with the interests of the Company at large.
d. Reviewing with the management external and internal auditors and the adequacy ofinternal control systems.
e. Reviewing the adequacy of internal audit function including the structure of theinternal audit department staffing and seniority of the official heading the departmentreporting structure coverage and frequency of internal audit.
f. Discussion with internal auditors of any significant findings and follow up thereon.
g. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the Board.
h. Discussion with external auditors before the audit commences the nature and scopeof audit as well as have post audit discussion to ascertain any area of concern.
i. Reviewing the Company s financial and risk management policies.
j. Other matters as assigned/specified by the Board from time to time.
k. The scope of the Audit Committee also includes matters which are set out in SEBI
(LODR) Regulations 2015 and the rules made there under as amended from time to time.
(b) COMPOSITION MEETINGS AND ATTENDANCE DURING THE YEAR:
As on 31st March 2017 The Audit Committee comprises of Three Independent cumNon-Executive Directors. The committee comprises as follows:
|Directors ||Chairman/ Member ||Category |
|Mr.VadlamaniVenkataSubramanya Ravi ||Chairman ||I & N.E.D |
|Mrs. Rallabhandi Lakshmi Sarada ||Member ||I & N.E.D |
|Mr. LakkarajuShyama Prasad ||Member ||I & N.E.D |
During the year the Audit Committee was constituted under Section 177 of the CompaniesAct 2013 and its meetings were held four times during the year ended march 31 2017.
Audit Committee Meetings
|Sl. No. ||Date of meeting ||Total Number of directors as on the date of meeting ||Number of directors attended |
|1. ||23.05.2016 ||03 ||3 |
|2. ||09.08.2016 ||03 ||3 |
|3. ||09.11.2016 ||03 ||2 |
|4. ||10.02.2017 ||03 ||2 |
Attendance of Audit Committee Members
|Sl. No. ||Name of the Director ||No of Meetings which were entitled to attend ||No. of Meetings Attended |
|1. ||Mr.VadlamaniVenkataSubramanya Ravi ||04 ||4 |
|2. ||Mrs. Rallabhandi Lakshmi Sarada ||04 ||2 |
|3. ||Mr. LakkarajuShyama Prasad ||04 ||2 |
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on March 31 2017 the Board consists of six members three of whom areindependent directors. The Board periodically evaluates the need for change in itscomposition and size.
The policy of the Company on directors appointment and remuneration including criteriafor determining qualifications positive attributes independence of a director and othermatters provided under Sub-section (3) of section 178 of the Companies Act 2013 adoptedby the Board is recommended by the Nomination and Remuneration Committee. We affirm thatthe remuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.
NOMINATION AND REMUNERATION COMMITTEE: (a) TERMS OF REFERENCE :
The Company had constituted the Nomination and Remuneration Committee under Section 178of the Companies Act 2013.The scope of the Committee also includes matters which are setout in SEBI (LODR) Regulations 2015 and the rules made there under as amended from timeto time. The broad terms of reference are to determine and recommend to BoardCompensation payable to Executive Directors appraisal of the performance of the ManagingDirectors / Whole-time Directors and to determine and advise the Board for the payment ofannual commission/compensation to the Non-Executive Director and to recommend to the Boardappointment/ reappointment and removal of Directors. To frame criteria for determiningqualifications positive attributes and Independence of Directors and to create anevaluation framework for Independent Directors and the Board.
(b) COMPOSITION MEETINGS AND ATTENDANCE DURING THE YEAR :
The Nomination and Remuneration Committee comprises of total three Non-ExecutiveDirectors cum Independent Directors and it meets twice in a year.
The committee comprises as follows:
|Directors ||Chairman/ Member ||Category |
|Mr.Vadlamani Venkata Subramanya Ravi ||Chairman ||I & N.E.D |
|Mrs. Rallabhandi Lakshmi Sarada ||Member ||I & N.E.D |
|Mr. Lakkaraju Shyama Prasad ||Member ||I & N.E.D |
The Committee held two meetings during the year ended March 31 2017.
NOMINATION AND REMUNERATION COMMITTEEMEETINGS
|Sl. No. ||Date of meeting ||Total Number of directors as on the date of meeting ||Number of directors attended |
|1. ||09.11.2016 ||03 ||2 |
|2. ||10.02.2017 ||03 ||2 |
ATTENDANCE OF NOMINATION AND REMUNERATION COMMITTEE MEMBERS
|Sl. No. ||Name of the Director ||No of Meetings which were entitled to attend ||No. of Meetings Attended |
|1. ||Mr. Vadlamani Venkata Subramanya Ravi ||02 ||2 |
|2. ||Mrs. Rallabhandi Lakshmi Sarada ||02 ||0 |
|3. ||Mr. Lakkaraju Shyama Prasad ||02 ||2 |
(c) SELECTION AND EVALUATION OF DIRECTORS:
The Board has based on recommendations of the Nomination and Remuneration Committeelaid down following policies:
1. Policy for Determining Qualifications Positive Attributes and Independence of aDirector 2. Policy for Board & Independent Directors Evaluation
(d) PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS:
Based on the criteria laid down in the Policy for evaluation of Board and IndependentDirectors the Board carried out the annual performance evaluation of Board Committees andthe Independent Directors whereas at a separate meeting Independent Directors evaluatedthe performance of Executive Directors Board as a whole and of the Chairman. Nominationand Remuneration Committee also evaluated individual directors performance.
i) As per the said Policy evaluation criteria for evaluation Board inter alia covers:Composition in light of business complexities and statutory requirements; establishment ofvision mission objectives and values for the Company; laying down strategic road map forthe Company & annual plans; growth attained by the Company; providing leadership anddirections to the Company and employees; effectiveness in ensuring statutory compliancesand discharging its duties / responsibilities towards all stakeholders; Identificationmonitoring & mitigation of significant corporate risks; composition of variouscommittees laying down terms of reference and reviewing committee s working etc.
ii) Performance evaluation criteria for Executive Directors inter alia include: levelof skill knowledge and core competence; performance and achievement vis--vis budget andoperating plans; effectiveness towards ensuring statutory compliances; dischargingduties/responsibilities towards all stakeholders; reviewing/monitoring Executivemanagement performance adherence to ethical standards of integrity & probity;employment of strategic perception and business acumen in critical matters etc.
iii) Performance of Independent Directors is evaluated based on: objectivity &constructivity while exercising duties; providing independent judgment on strategyperformance risk management and Board s deliberations; devotion of sufficient time forinformed decision making; exercising duties in bona fide manner; safeguarding interests ofall stakeholders particularly minority shareholders; upholding ethical standards ofintegrity & probity; updating knowledge of the Company & its external environmentetc.
iv) Committees of the Board are evaluated for their performance based on: effectivenessin discharging duties and functions conferred; setting up and implementation of variouspolicies procedures and plans effective use of Committee s powers as per terms ofreference periodicity of meetings attendance and participation of committee members;providing strategic guidance to the Board on various matters coming under committee spurview etc.
(e) REMUNERATION POLICY FOR DIRECTORS:
The Committee has formulated Policy for Remuneration of Directors Key ManagementPerson and other employees. As per the Policy remuneration to Non-executive IndependentDirectors include: a. Sitting Fees for attending meetings of the Board as well asCommittees of the Board as decided by the Board within the limits prescribed under theCompanies Act. b. Travelling and other expenses they incur for attending to the Company saffairs including attending Committee and Board Meetings of the Company.
REMUNERATION TO EXECUTIVE DIRECTORS:
The appointment and remuneration of Executive Directors including Managing DirectorJoint Managing Director and Whole Time Director is governed by the recommendation of theRemuneration and Nomination Committee resolutions passed by the Board of Directors andShareholders of the Company. The remuneration package of Managing Director Joint ManagingDirector and Whole Time Director comprises of salary perquisites allowances and otherretirement benefits as approved by the shareholders at the General Meetings of theCompany.
REMUNERATION TO NON-EXECUTIVE DIRECTORS:
The Non-Executive Directors are paid remuneration by way of Sitting Fees. The Non-Executive Directors are paid sitting fees for each meeting of the Board and Committee ofDirectors attended by them.
REPORT ON CORPORATE GOVERNANCE:
Your Directors are pleased to inform that as per SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance Report with auditorscertificate thereon shall not be mandatory for the Company.
The Company has set up vigil mechanism to enable the employees and Directors to reportgenuine concerns and irregularities if any in the Company noticed by them. The WhistleBlower Policy/ vigil mechanism has been posted on the Website of the Company(www.capol.in)
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186
There were no Loans Guarantees Investments and securities given/made/provided by theCompany during the Year.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All related party transactions that were entered during the financial year were on anarm s length basis and were in the ordinary course of business. There are no related partytransactions made by the Company which may have a potential conflict with the interest ofthe Company at large and thus disclosure in Form AOC-2 is not required and the Details ofTransactions with the related parties were mentioned in the Notes forming part of theAccounts.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY.
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company
AMOUNTS TRANSFERRED TO RESERVES
The Board of the company has decided/proposed to carry 31066634/- to its reserves.
The management believes that the profits earned during the financial year must beretained and redeployed for the operations of the Company. As the Company needs furtherfunds to enhance its business operations upgrade the efficiency. No dividend is beingrecommended by the Directors for the Financial Year 2016-17
CHANGES IN SHARE CAPITAL
During the current year there has been no change in the capital Structure of thecompany.
A. Statutory Auditors:
Pursuant to section 139 of the companies Act2013 and rules made there under it ismandatory to rotate the statutory auditors on completion of the maximum term permittedunder the said provisions. The tenure of the existing auditors of the company M/s A.Ramachandra Rao & Co. Chartered Accountants completed at ensuing Annual GeneralMeeting of the company and shall not be eligible for re-appointment. On recommendations ofAudit Committee the Board has recommended and proposed the appointment of NATARAJA IYER& CO. Chartered Accountants as the statutory Auditors of the company for a period offive consecutive years from the conclusion of the 41st Annual General Meeting of thecompany scheduled on11th August 2017 till the conclusion of the 46th Annual GeneralMeeting to be held in the year 2022 subject to approval of shareholders of the company.
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force).
The Auditors Report for fiscal 2017 does not contain any qualification reservation oradverse remark. The Auditors Report is enclosed with the financial statements in thisAnnual Report.
B. Secretarial Auditors:
Pursuant to provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has engaged services of M/s. K. Srinivasa Rao & Co Company Secretaries inPractice Guntur to conduct the Secretarial Audit of the Company for the financial yearended March 31 2017. The detailed reports on the Secretarial Standards and SecretarialAudit in Form MR- 3 are appended as an Annexure III to this Report. There were noqualifications reservations or adverse remarks given by Secretarial Auditors of theCompany except non-compliance of section 203 of the Companies Act 2013 and regulation 6of SEBI (LODR) Regulations 2015 in respect to appointment the Company Secretary as KeyManagerial Person Compliance officer and non-compliance of regulation 31(2) of SEBI(LODR) Regulations 2015 in respect to maintenance of hundred percent of shareholding ofpromoter(s) and promoter group in dematerialized. The board clarification onqualifications of Secretarial Auditor is given below
The Board has made utmost effort for appointment of the Company Secretary as KMP butunable to appoint a Company Secretary due to lack of suitability of the Candidate to theprofile of the Company in terms of work location job profile and remuneration we hopethat the position is to be filled in the near feature. The Company has already entered anagreement with the NSDL and CDSL for dematerialization of equity shares of the Company.The company has directed all of the promoters to convert their physical shares into dematform we hope that maintenance of hundred percent of shareholding of promoter(s) andpromoter group in dematerialized will be complied soon.
C. Cost Auditors:
The Board of Directors of your Company on the recommendations made by the AuditCommittee at its meeting held on 29thMay 2017 has approved the appointment of M/s.Jithendra Kumar & Co Cost Accountants (Firm Registration No. 103347) Vijayawada asthe Cost Auditor of your Company to conduct the audit of cost records for the financialyear 2016-17. The remuneration proposed to be paid to the Cost Auditor subject to yourratification at the ensuing Annual General Meeting would not exceed 3320000/- (Rupeestwenty thousand only) excluding taxes and out of pocket expenses if any.
Your Company has received consent from M/s. Jithendra Kumar & Co Cost Accountantsto act as the Cost Auditor for conducting audit of the cost records for the financial year2017-18 along with a certificate confirming their independence and arm s lengthrelationship.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE END OF FINANCIAL YEAR AND THE DATE OF THEREPORT
There are no material changes since 31st March 2016 and until the date of this report.
CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information required to be given pursuant to Section 134 (3) (m) of the CompaniesAct 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014for the year endedMarch 31 2017 is given here below and forms part of the Director s Report (Annexure II)
PARTICULARS OF EMPLOYEES:
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 forms part of this Report in Annexure -IV. There were no employees in the Company asper Rule 5(2) of Chapter XIII the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Members who are interested in obtaining these particulars may alsowrite to the Managing Director at the Registered Office of the Company. The aforesaidAnnexure is also available for inspection by Members at the Registered Office of theCompany 21 days before the 41stAnnual General Meeting and up to the date of the AnnualGeneral Meeting during the business hours on working days.
Your Company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. Various employee benefits recreationaland team building programs are conducted to enhance employee skills motivation as also tofoster team spirit. Company also conducts in-house training programs to develop leadershipas well as technical/functional capabilities in order to meet future talent requirements.Industrial relations were cordial throughout the year.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of section 135 of the Act read with Companies (Corporate SocialResponsibility Policy) Rules 2014 are not applicable to the Company.
During the year According to the Section 134 (3) (n) of the Act the company had laiddown a policy for management of risk. The risk management framework defines the riskmanagement approach of the Company and also includes the periodical review of such risks.The board periodically discusses the significant business risks identified by themanagement and the mitigation measures to address such risks.
INTERNAL CONTROL SYSTEM AND COMPLIANCE FRAMEWORK:
The Company has an Internal Control System commensurate with size scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and efficient conduct of businessoperations.
The Internal Control System of the Company has been designed to provide for:
Accurate recording of transactions with internal checks and prompt reporting.
Adherence to applicable Accounting Standards and Policies.
Compliance with applicable statutes policies and management policies andprocedures.
Effective use of resources and safeguarding of assets.
The Company has appointed Mr. P.L. Ranganadh and Mr. J.V. Kiran Kumar as InternalAuditors of the Company. The Audit Committee in consultation with the Internal Auditorsformulates the Scope functioning periodicity and methodology for conducting the internalaudit. The internal auditors carryout audit covering inter alia monitoring andevaluating the efficacy and adequacy of internal control systems in the Company itscompliance with operating systems accounting procedures and policies at all locations andsubmit their periodical internal audit reports to the Audit Committee. The internalauditors have expressed that the internal control system in the Company is effective. TheBoard has also put in place requisite legal compliance framework to ensure compliance ofall the applicable laws and that such systems are adequate and operating effectively.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition &Redressal) Act 2013 ( Act ) and Rules made there under your Company hasconstituted Internal formulate Complaints Committees (ICC). During the year Your Companyhas not received any complaints on Sexual Harassment under the Act.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
REGISTRAR S AND SHARE TRANSFER AGENTS:
Registrar and Share Transfer Agents of the Company are M/s Big share Services PrivateLimited 306 3rd Floor Right Wing Amrutha Ville Opp. Yashodha Hospital Raj BhavanRoad Somajiguda Hyderabad 500 082.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNT TO IEPF:
Pursuant to the provisions of section 124 of the Companies Act 2013 the declareddividends which remained un paid or unclaimed for a period of seven years have beentransferred by the company to the Investor Education and Protection Fund (IEPF)established by the Central Government.
The following are the details of dividends paid by the Company and respective due datesfor transfer of unclaimed dividend to IEPF.
|Dividend Year ||Date of Declaration of Dividend ||Due date for transfer to IEPF |
|2009-10 ||14-07-2010 ||15-08-2017 |
|2010-11 ||06-08-2011 ||07-09-2018 |
|2012-13 ||05-08-2013 ||06-09-2020 |
|2013-14 ||11-08-2014 ||12-09-2021 |
|2015-16 ||10-08-2016 ||11-08-2023 |
Your Directors wish to express their greatful appreciation to the continuedco-operation received from Canara Bank Our Banks Financial Institutions StockExchanges Government Authorities Customers Vendors and Stakeholders during the yearunder review. Your Directors also wish to place on record their deep sense of appreciationfor the committed service of the Executives staff and Workers of the Company.
| ||By Order of the Board of Directors |
| ||Sd/- |
| ||(Maddi Lakshmaiah) |
|Place : CHILAKALURIPET ||Chairman |
|Date : May 29 2017 ||(DIN:00013387) |
M/s. Coromandel Agro Products and Oils Limited Hyderabad.
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
| ||For K. Srinivasa Rao & Co. |
| ||Company Secretaries. |
| ||Sd/- |
|Place : Guntur ||K. Srinivasa Rao Partner |
|Date : 29th May 2017. ||FCS. No. 5599/ C. P. No: 5178 |
Annexure - IV TO THE DIRECTORS' REPORT
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
(i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year 2016-17 and the comparison of remunerationof each Key Managerial Personnel (KMP) against the performance of the Company are asunder:
|Name of the Director/KMP and Designation ||Remuneration of Director During the F.Y 2016-17 ||Ratio of remuneration of each Director/to median remuneration of employees ||Remuneration of Directors During the F.Y 2015-16 ||% Increase/(Decrease) in Remuneration in the Financial Year 2016-17 |
| ||(Amount In Rs) || ||(Amount In Rs) || |
|1 Maddi Ramesh Managing Director ||1983600 ||20.146 ||1983600 ||0.00 |
|2 Maddi Venkateswara Rao Director ||8000 ||0.081 ||6000 ||33.33 |
|3 Maddi Lakshmaiah Chairman ||8000 ||0.081 ||8000 ||0.00 |
|4 V.V.S. Ravi Director ||10000 ||0.102 ||10000 ||0.00 |
|5 L.Shyam Prasad Director ||11000 ||0.112 ||4000 ||175.00 |
|6 R.Lakshmi Sarada Women Director ||7000 ||0.071 ||14000 ||(50.00) |
i) The Median Remuneration of Employees of the Company during the Financial Year wasRs. 98460.
ii) There were 214 permanent employees on the rolls of the Company as on 31st March2017.
iii) There were no employees in the Company as per Rule 5(2) of Chapter XIII theCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
iv) In the Financial Year 2016-17 There was a decrease of 0.94% in the medianRemuneration of employees.
v) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year Not Applicable; and
vi) The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theHuman Resources Nomination and Remuneration Committee as per the Remuneration Policy forDirectors Key Managerial Personnel and other Employees.
vii) It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
ANNEXURE-II TO THE DIRECTOR S REPORT
A. CONSERVATION OF ENERGY:
1. Energy Conservation Measures taken during the year:
In line with the company s commitment towards conservation of energy all unitscontinue with their endeavor to make more efficient use of energy through improvedoperational and maintenance practices. The measures taken in this direction at the unitsare as under:
a) Conservation of energy continues to be accorded high priority.
b) Our R&D team continuously reviews ongoing processes.
c) All manufacturing plants continue their efforts in conserving energy in variousforms like energy conservation projects use of alternate sources & resourcescontinuous monitoring etc. of energy consumption throughout all plants and curtailingwastages.
d) Saving in fuel consumption for steam generation boiler operation.
e) Eliminating steam leakages in distribution of generated steam.
f) Employees have been trained in energy conservation measures;
2. Impact of Energy Conservation Measures:
The Energy Conservation Measures which were undertaken in the Company have resulted inreduction in power consumption fuel consumption and improves the overall productionperformance.
3. Total energy consumption and energy consumption per unit of production:
(Form for disclosure of particulars with respect to conservation of energy)
|A POWER AND FUEL CONSUMPTION || || |
|. Particulars ||2016-17 ||2015-16 |
|1 Electricity: || || |
|a) Purchased Units ||3407345 ||6963135 |
|Total Amount ||30746472 ||47427474 |
|Rate/Unit ||9.02 ||6.81 |
|b) Own Generation || || |
|I) Through Diesel Generators: || || |
|Units ||7267 ||3785 |
|Units per Ltr. Of diesel Oil ||2.15 ||2.11 |
|Cost/Unit ||27.01 ||27.41 |
|II) Through Steam Turbine/Generators ||NIL ||NIL |
|2 Coal: (Specify quality & where used) Round Coal || || |
|"C" Grade used in Boiler. Quantity (Tonnes) ||NIL ||31.840 |
|Total Cost ||NIL ||127860 |
|Average Cost ||NIL ||4015.71 |
|3 Furnace Oil ||NIL ||NIL |
|4 Others/Internal Generation: || || |
|Rice Husk (Tonnes) ||2269.000 ||3267.635 |
|Total Cost ||5096427 ||8523363 |
|Average Cost ||2246.11 ||2608.42 |
B CONSUMPTION PER UNIT OF PRODUCTION:
|Particulars ||2016-17 ||2015-16 |
|1 ELECTRICITY: || || |
|Cotton Seed ||88.51 Units ||107.25 Units |
|2 COAL: || || |
|Cotton Seed ||- ||0.49 Kgs |
|3 Furnace Oil ||- ||- |
|4 RICE HUSK for Steam Generation || || |
|Cotton Seed ||58.81 Kgs ||50.30 Kgs |
4. Steps taken by the company for utilising alternate sources of energy: None
5. Capital investment on energy conservation equipment: None
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION:
Continuous efforts are being made towards technology absorption adaptation andinnovation. Quality being the thrust area the company has been taking effective steps tocontinue to improve quality to compete with international quality standards. LED lightsare installed in place of regular tube lights in plant to reduce energy consumption.
Installation of Energy Monitoring System for greater accuracy of energy consumption
1. Benefits derived as a result of the above efforts:
Improved capability and productivity to meet the customer requirements.
2. Efforts in brief made towards Technology absorption adaptation and innovation:
The Company is continuously taking steps to improve the product and process technologyin an effort to provide superior quality and cost effective products to consumers .
3. Imported Technology:
--- None ---
C. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:
Your Directors wish to inform that the Company has exported 2492.390 M.T. of CottonLinters worth 33 33331032.90 lakhs during the year under review as against 1727.875 M.T.worth 33425.78 lakhs in the previous year.