Kanpur Plastipack Ltd.
|BSE: 507779||Sector: Industrials|
|NSE: KANPRPLA||ISIN Code: INE694E01014|
|BSE 00:00 | 03 Feb||94.15||
|NSE 00:00 | 03 Feb||94.20||
|Mkt Cap.(Rs cr)||202|
|Mkt Cap.(Rs cr)||202.14|
Kanpur Plastipack Ltd. (KANPRPLA) - Director Report
Company director report
Your Directors are happy to submit 51st Annual Report ofKanpur Plastipack Limited together with Standalone and Consolidated Audited FinancialStatements for the financial year ended 31st March 2022.
(H in Lacs)
REVIEW OF OPERATIONS AND OUTLOOK:
As the new financial year started the world witnessed a second wave ofthe ongoing COVID-19 pandemic far more devastating and painful for the loss of thenear and dear ones it left behind. Thankfully Vaccinations had arrived and with the hugeGovernment machinery being proactive life started to trickle back to normalcy by themiddle of the year. This however took its toll on the global economy leading todisruptions in the logistics chain coupled with price volatility on raw materials andinputs.
Your Company dealt with the pandemic by a continuous focus onoperational excellence marketing strategies and keeping its employees and community atthe core of it. The health and safety of employees and the communities in which theCompany operates continue to be the foremost priority of the Company. Our focus on ourcommitments with customers remained unwavering throughout this period reflecting in therecord number of orders secured during the period.
During the year 2021-22 the Company once again crossed majormilestones in Turnover and Production despite the challenges we faced. We continued ourinvestments in capacity enhancement and your Company further added new territories in itsgeographical reach.
Our increasing dependency on Solar Power resulted not only into costsavings but also helped in reducing the carbon emission in the environment.
It is a matter of satisfaction that your Company is scaling new heightsyear on year. During the last fiscal your Company has achieved an all time high record inits Turnover at H637.75 Crores which is an increase of about 39% from the previous year.Although the bottom line was affected due to high volatility in Raw Material pricesincreased competitive pressure from the market and the impact of the Ukraine War in thelast quarter. An absence of growth in our main markets of USA and Europe affected us aswell. The extraordinary increase in ocean freight also resulted in resistance from buyersimpacting margins. Following are the highlights of the performance during the year underreview:
FY 2021-22 was a remarkable year we reported our best everTop-line and demonstrated significant progress on all strategically significant parametersas well as our sustainability ambitions. Even as we focused on improving productionefficiency go-to-market strategy and share of value-added products we continued toinvest in technologies to reduce carbon emissions drive resource efficiency aid theglobal transition to a low-carbon future and build a safer workplace.
During the year your Company?s plan to diversify its activitiesand enter into flexible packaging i.e. Cast Polypropylene Film (CPP) were begun. The newproject is well underway with the acquisition of land and building and is planned to becompleted by March 2023. The financial tie-ups were also concluded recently. This willadd to the Company?s performance in the FY 2023-24. We have ensured that the best inclass machines are being bought from Europe and the UK from global leaders. In the yeargone by we also made additional capital investments of H35.62 Crores in increasing ourRaffia capacity for Fabric FIBCs and an additional line of MFY. The CPP Project is a highcapex low manpower product and caters to an altogether different market segment than theone we have right now.
The operational performance of the Company has improved in every spheresupported by the phenomenal customer loyalty during the pandemic. Your Company furtheradded a total of 23 new customers and 3 new geographical regions during the year.
Volumes of Sales recorded during FY 2021-22:
The execution of 9.375 MW solar power procurement project underGroup Captive mode was completed during the year.
Your Company entered into a fresh agreement for installation ofa Roof Top Solar Power System of 2750 kWp capacity at Unit-3 under OPEX mode. This systembecame operational w.e.f. 1st April 2022. It is estimated to receive about 21Lacs units of electricity yearly under this agreement.
"We have availed a total of 89.14 Lacs units of power fromrenewable energy sources during the year resulting in savings of J 2.63 Cr.reducing the emission of carbon in the environment by about 6903.7 MT."
The Dealer Operated Polymer Warehouse activity of Indian OilCorporation Limited also showed improved performance. We sold 25954 MT in the currentyear as against 23503 MT in the previous year showing an increase of about 10% over theprevious year.
In our journey of 5-decades we have demonstrated a spirit ofresilience and an ability to grow in the face of an evolving environment and even afterbeing witness to seminal world events. Our approach remained consistent as it stayedagile reflecting our philosophy of growing responsibly growing together and ensuring asustainable future. To us that is a responsible growth.
With continued leveraging on technological upgradation &innovation your Company continues to lay emphasis on exports of value added products andexpanding the geographical reach of the export market.
Your Company has World Class state of art certified manufacturingfacilities and capacities to serve the needs of its customers. To follow the growthmomentum and to take a great leap forward your Company is gearing to rollout its newproject for diversification which will also be instrumental in opening up new avenues andnew markets for the Company. We believe we are well placed to serve our customers in theyears to come.
It shall be the company?s endeavor to seek business opportunitiesand enter into growth areas. Towards that step a new subsidiary company in Brazil hasbeen established and will begin trading during the next few months.
"New Subsidiary in Brazil to help in next stage of growth."
COVID 19 IMPACT
We began the year amidst the deadliest wave of the pandemic which tooka severe toll on lives and livelihoods not just in the country but the world over.
Even as the world experienced chaos and disruption we deliveredsignificant annual growth which required a company-wide orchestration of strengths deepcollaboration amongst our leaders and creating a synergy of all our business units.
Your Directors wish to place on record their appreciation to theCompany?s employees suppliers customers & Government authorities for theirselfless efforts which helped your Company not only to maintain continuity but to respondaggressively with all steps necessary for the safety and welfare of the employees.
We are glad to report that during the year the Credit Rating of theCompany has been upgraded. We now have two independent ratings from CRISIL and AcuiteRating & Research Limited. Both agencies have rated us with A- /Stable for Long Termand A2+ for Short Term Facilities.
During the year the Company did a Bonus Issue of 7154194 fullypaid-up equity shares in the ratio of 1:2 i.e. one new fully paid up equity shares forevery existing 2 equity share held by shareholder. As on 31.03.2022 your Company has totalshares capital of H214667580.00 divided into 214667580 equity shares of H10/- each.
There are two wholly owned subsidiary Companies of the Company as on 31stMarch 2022. During the year there has been no material change in the nature of thebusiness of the subsidiaries. As required under Section 129(3) of the Act the report onthe performance and financial position of each subsidiary company and salient features oftheir Financial Statements are attached in the prescribed form AOC-1 with the financialstatements which forms part of this Annual Report.
In accordance with the provisions of Section 136 of the Act and theamendments thereto read with the SEBI Listing Regulations the audited financialstatements including the consolidated financial statements and related information of theCompany and financial statements of the subsidiary companies are available on our websiteat www.kanplas.com.
There is no Company which became or ceased to be subsidiary jointventure and associate during the year under review. A new Foreign Subsidiary Company inBrazil was incorporated on 26/04/2022 in the name and style of KANPLAS DO BRASIL LTDA. TheForeign Subsidiary Company will do marketing and trading of the Company?s products inthe Brazilian market.
There is no material subsidiary Company in terms of regulation nos.16(1)(c) and 24 of the SEBI( Listing Obligation and Disclosure Requirements) Regulations2015.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (The Listing Regulations?) andSection 129(3) of the Act the consolidated financial statements have been prepared by theCompany as per the Indian Accounting Standards (Ind AS) and form part of this AnnualReport. The Consolidated Financial Statements shall also be laid at the ensuing AnnualGeneral Meeting of the Company.
During the year under review your Company has voluntarily adoptedDividend Distribution Policy to provide more transparency accountability and betterGovernance. Dividend Distribution policy is available on the website of the Company atwww.kanplas.com.
A Special Interim Dividend for the year 2021-22 @ 10% i.e. H1.00 perequity share was declared by the Board of Directors to mark the Golden Jubilee year. YourDirectors have further recommended a final dividend for the year 2021-22 @ 12% i.e. H1.20per Equity Share for the financial year 2021-22. Payment of dividend is subject to theapproval of shareholders at the ensuing Annual General Meeting.
Dr. Ram Gopal Bagla Independent Director has tendered his resignationwhich was placed before the Board on 23rd May 2022. The Board of Directorsplaced on record their gratitude and appreciation for the guidance support and advicereceived from Dr. Bagla throughout his association with the Company.
Shri Shashank Agarwal is retiring by rotation at the ensuing AnnualGeneral Meeting and is eligible for re-appointment. In view of the valuable servicesguidance and support received from him your Directors recommend his re-appointment.
There are no changes in the Board of Directors and the Board is havingoptimum combination of Independent and Promoter Directors as required under Section 149(4)read with Regulation 17 of SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 as amended.
MEETINGS OF THE BOARD OF DIRECTORS:
During the year your Company has conducted 6 meetings of the Board ofDirectors. The details of the meeting of the Board & Committees thereof includingattendance therein are given under Corporate Governance Report.
Your company has digitalized the Board Process and adopted paper lessBoard meetings platform.
KEY MANAGERIAL PERSONNEL:
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Boardthat they fulfill all the requirements as stipulated in Section 149(6) of the CompaniesAct 2013 so as to qualify themselves to be appointed as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.
In view of Section 73 to 76 of the Companies Act 2013 read withCompanies (Acceptance of Deposit) Rules 2014 your Company did not accepted any deposit.
The Company is committed to maintain the highest standards of CorporateGovernance and adhere to the Corporate Governance requirements set out by the Securitiesand Exchange Board of India (SEBI).
The report on Corporate Governance as stipulated under the ListingRegulations is annexed to the Annual Report as Annexure A? andManagement Discussion and Analysis Report also forms part of this Report.
The Certificates certifying that
(i) the Company has complied with the requirements of CorporateGovernance in terms of SEBI (LODR) Regulations 2015; and
(ii) none of the Directors on the Board of the company have beendebarred or disqualified from being appointed or continuing as Directors of Companies bythe SEBI/ MCA or any such authority. are attached and forms the part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
Information as per Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 relating to conservation of energytechnology absorption and foreign exchange earnings and outgo for the financial year2021-22 are annexed as Annexure B? which forms part of this Report.
PARTICULARS OF EMPLOYEES:
The information required under Section 197(12) of the Companies Act2013 read with Rule 5(1) & 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed as Annexure C? which formspart of this Report.
I. STATUTORY AUDITORS AND THEIR REPORT
M/s Rajiv Mehrotra & Associates (FRN: 002253C) CharteredAccountants were appointed as Statutory Auditors of your Company for a period of 5 yearsin the Annual General Meeting held on 15/09/2017 till the conclusion of 51stAnnual General Meeting to be held in the year 2022. Their term as a statutory auditorswill conclude from the Conclusion of ensuing Annual General Meeting.
As per the provision of Section 139 of the Companies Act 2013 readwith rules made thereunder the firm of Chartered Accountants is eligible to be appointedas statutory auditors for two terms of five consecutive years each. The first term of M/sRajiv Mehrotra & Associates as statutory auditors of the Company expires at theconclusion of the ensuing AGM of the Company.
Considering their performance as auditors of the Company during theirpresent tenure on the recommendation of the Audit Committee the Board of Directors haverecommended the re-appointment of M/s Rajiv Mehrotra
& Associates as statutory auditors of the Company for a second termof five years to hold office from the conclusion of the 51st AGM till theconclusion of 56th Annual General Meeting to be held in the year 2027.
The Audit Report from the Statutory Auditors forms part of this AnnualReport. The said report does not contain any qualification reservation or adverse remark.
II. COST AUDITORS
As per Section 148 of the Companies Act 2013 read with Companies(Auditor?s Report) Order 2015 the Company has maintained all the costing records.
During the year under review Cost Audit was not applicable on yourCompany. However w.e.f. financial year 2022-23 the Cost Audit will be applicable on theCompany as per Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 as amended. Accordingly the Board of Directors have appointed M/sRakesh Misra & Company Cost Auditors to conduct the Cost Audit for the financial year2022-23. Their remuneration is placed before the shareholders for ratification at theensuing AGM.
III. SECRETARIAL AUDITORS
The Company has appointed M/s Adesh Tandon & Associates PracticingCompany Secretaries as the Secretarial Auditors of the Company for the year 2021-22. TheSecretarial Audit Report as placed by the Auditor is annexed with this Report as AnnexureD?. There was no qualification reservation or adverse remark made by theAuditor in their respective report.
IV. INTERNAL AUDITORS
During the year under review M/s S N Saraogi & AssociatesChartered Accountants were the Internal Auditors of the Company. Their reports were placedbefore the Audit Committee of the Company from time to time.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company has adequate system of internal control with reference tothe financial statements. All the transactions are properly authorized recorded andreported to the Management. The Company is following all the applicable AccountingStandards for properly maintaining the books of accounts and reporting financialstatements. The internal auditor of the company checks and verifies the internal controland monitors them in accordance with policy adopted by the company. Company ensures properand adequate systems and procedures commensurate with its size and nature of its business.
As per the requirement of Section 134(3)(a) read with Section 92(3) ofthe Companies Act 2013 the Annual Return for the year 2021-22 has been placed on thewebsite of the Company. The weblink of the same is https:/www.kanplas.com/en/corporate-governance.
The Equity Shares of the Company are listed with National StockExchange (NSE) and Bombay Stock Exchange (BSE). We confirm that the Annual Listing Feesfor the financial year 2022-23 have been paid within the stipulated time to both the StockExchanges.
CORPORATE SOCIAL RESPONSIBILITY:
In terms of Section 135 and Schedule VII of the Companies Act 2013read with the Companies (Corporate Social Responsibility) Rules 2014 the Board ofDirectors of your Company have constituted a CSR Committee the details of which are givenin Corporate Governance Report. CSR Committee of the Board have developed a CSR Policywhich is enclosed as part of this report Annexure-E?.
Annual report on CSR as required under Rule 8(1) of the Companies(Corporate Social Responsibility) Rules 2014 is annexed with this report as AnnexureF?.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Your Company has not made any Loan or given any Guarantees and thedetails of investments are given under note 4 and 8 of the Financial Statements. Howeverthe investments made does not exceeds the limits as prescribed under Section 186 of theCompanies Act 2013.
VIGIL MECHANISM (WHISTLE BLOWER POLICY):
In pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers)Rules 2014 and Regulations 34 (3) and 53 (f) of SEBI (LODR) Regulations 2015 a VigilMechanism for directors and employees to report genuine concerns about unethicalbehaviour actual or suspected fraud or violation of the Company?s code of conduct orethics policy has been established. The Vigil Mechanism Policy has been uploaded on thewebsite of the Company.
During the year under review no complaint was received by the AuditCommittee under the Whistle Blower Policy.
The Company follows the risk management policy wherein the managementkeeps an eagle eye view on the markets both domestic and foreign related to theproducts the Company manufactures and the raw materials required. The management alsomonitors the socio-economic changes worldwide and the changes in the currency fluctuationto minimize the risks.
The Board members are regularly informed about the potential riskstheir assessment and minimization procedures. The Board frames a plan for elimination /minimization of the risk and further lays out the steps for implementing and monitoring ofthe risk management plan.
There are no risks which in the opinion of the Board are of the naturethat can threaten the existence of the Company. However the risks inter-se thatare generally dealt in regular course of business have to be taken care of arefluctuations in foreign exchange rates and raw material prices.
MATERIAL CHANGES AND COMMITMENTS:
No material changes or commitments which may affect the financialposition of the Company has been occurred between the end of the financial year of theCompany and the date of this report.
INDIAN ACCOUNTING STANDARDS:
Your Company has adopted Indian Accounting Standards (Ind-AS?) with effect from 1st April 2017 pursuant to Ministry of CorporateAffairs notification dated 16th February 2015 notifying the Companies (IndianAccounting Standards) Rules 2015.
The Board annually evaluates its performance as well as theperformances of its Committees and of Directors individually.
For evaluating the performance of the Board as a whole the Chairman ofthe Company and the Whole Time Directors are evaluated linking it with the periodicalperformances of the Company role of the Board towards achievement of the saidperformances the future plans as set out from time to time and their devotion towardsimplementation and management of the growth parameters of the Company.
The performance of the Non Executive / Independent Directors isevaluated on the basis of their contribution for adopting better corporate governancepractices transparency and disclosures in achieving the goal of the Company.
The performance of the various Committees of the Board is reviewed onthe basis of the achievement of the work designated to the specific committee.
RELATED PARTY TRANSACTIONS:
During the year no contracts / arrangements were entered / renewed bythe Company with related parties in terms of the provisions of Section 188(1) of theCompanies Act 2013.
All the transactions with the related parties entered during the year2021-22 were in the ordinary course of business on arm?s length basis and approvedby the Audit Committee. Further no material related party transaction was entered duringthe year under review.
Disclosure as required under section 134(3)(h) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 in form AOC-2 is not applicable asall the contracts entered by the Company during the year are on arms length basis andthere was no material contract or arrangement.
The policy to deal with the related party transactions is uploaded onthe company?s website. The weblink of the same is https://www.kanplas.com/en/policies
COMPANYS?POLICYONDIRECTORS?APPOINTMENT AND REMUNERATION:
The current policy is to have an appropriate mix of executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. The Company has duly constituted the Nominationand Remuneration Committee of the Board and the committee interalia periodicallyevaluates:
1. The need for change in composition and size of the Board;
2. Recommend/review remuneration of the Managing Director andWhole-time Director(s) based on their performance.
3. Recommend the policy for remuneration of Directors KMPs & othersenior level employees of the Company and review the same in accordance with theperformance of the Company and industry trend.
The policy to deal with the selection appointment and remuneration ofthe Directors and Key Managerial Personnel and other senior level employees is annexedwith this report as
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS IN FUTURE.
There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations.
DIRECTORS? RESPONSIBILITY STATEMENT:
Pursuant to clause (c) of sub-section 3 of Section 134 of the CompaniesAct 2013 the Board of Directors of the Company hereby state and confirm that: -
i) in the preparation of the Annual Accounts the applicable AccountingStandards had been followed along with proper explanation relating to material departures;
ii) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;
iii) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the Directors had prepared the Annual Accounts of the Company on agoing concern basis.
v) The directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
vi) The directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your Directors express their sincere gratitude towards the Bankersother Government Agencies and esteemed customers for their continued patronage and supportduring the year.
Your Directors also place on record their appreciation for thecommitted contribution of all the officers staff and workmen for the consistent growth ofyour Company.
Your Directors also take this opportunity to place on record theirgratitude to the Members for their confidence with the Company.