Your Directors have pleasure in presenting Twenty Sixth Annual Report on the businessand operations of your Company and Audited Financial Statement for the year ended 31stMarch 2017.
FINANCIAL RESULTS :
| || |
(Rs. in lacs)
| ||2016-17 ||2015-16 |
|Revenue from operations (Net) ||3466.85 ||3477.36 |
|Misc Sale (Net) ||1.08 ||0.23 |
|Other Income ||386.67 ||195.08 |
|Total Revenue ||3854.60 ||3672.67 |
|Less: Expenses || || |
|Cost of material consumed ||2595.27 ||2588.04 |
|Changes in Inventories of finished Goods & Work in Progress ||16.05 ||25.61 |
|Manufacturing Expenses ||612.96 ||585.75 |
|Employee Benefit Cost ||91.69 ||86.70 |
|Finance cost ||40.76 || |
|Depreciation and amortisation Expenses ||90.63 ||79.47 |
|Other Expenses ||219.96 ||147.83 |
|Total Expenses ||3667.32 ||3513.42 |
|Net Profit ||187.28 ||159.26 |
During the year under review only Paper Division was operational through out the yearand produced 15238.48 M.T of Kraft Paper and achieved sales of Rs. 3467.94 Lacs asCompared to 15096.18 M.T' and Rs. 3477.36 Lacs of the previous year. The net profit wasRs. 187.28 Lacs as against Rs. 159.26 Lacs of the previous year.Company could not runPower Division due to non-availability of bagasse the raw material for Power generationduring the year.
The streamlined operations of Paper Division will continue to give good results duringthe current year too.
ABOLITION OF SICK INDUSTRIAL COMPANIES ACT (SICA):
The Ministry of Finance vide a notification dated 25th November 2016 has repealed theSick Industrial Companies (Special Provisions) Act 1985 (SICA) with effect from 1st Dec2016 and any appeal preferred to the Appellate Authority or any reference made or inquirypending to or before the BIFR Board or any proceeding of whatever nature pending beforethe Appellate Authority or the BIFR Board under the Sick Industrial Companies (SpecialProvisions) Act 1985 (1 of 1986) shall stand abated. Further such appeal or reference orinquiry stands abated under this clause may make application to the National Company LawTribunal (NCLT) under the Insolvency and Bankruptcy Code 2016 (IB CODE) within onehundred and eighty days from the commencement of the respective provisions of Insolvencyand Bankruptcy Code 2016 (IBC 2016).
With view of the above and the fact that the company was registered under BIFR companyhad initially decided to file the application to the National Company Law Tribunal (NCLT)in accordance with the provisions of the Insolvency and Bankruptcy Code 2016 to continuethe protection which it had received from the BIFR Board and to request the extension ofperiod for repayment of deferred sales tax liability extension of period for fulfilmentof unfulfilled export obligation and allotment of share against the pending shareapplications. But later on Maharashtra sales tax dept' has agreed to provide theextension for repayment of sales tax liability. Further company has already agreed to paythe fixed monthly instalments for the repayment of outstanding term loan with the M/s.Indian Renewable Energy Development Agency Limited (IREDA). As aforesaid company hassettled its major dues with the lenders and creditors then there is no need to go to NCLTfor said protection.
According to the above company has decided not to go for NCLT application to get theprotection under the Insolvency and Bankruptcy Code 2016.
In view of the small profit and carried forward losses of the Company it is notpossible for your Directors to recommend any dividend.
MATERIAL CHANGES AND COMMITMENT
There are no material changes and commitments affecting the financial position of theCompany occurred between the ends of the financial year to which this financial statementrelate on the date of this report.
As on 31st March 2017 Company has no fixed deposits.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
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 notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED
During the year under review company has entered into the material contract withrelated party as defined under Section 188 of the Companies Act 2013. Accordingly reportin form AOC 2 as required under the sub- section 2 of section 188 of Companies Act 2013for disclosing material related party transactions along with the justification forentering into such contract /arrangement is enclosed in Annexure I in this Board Reportforms part of the Annual Report.
Transactions which were entered with the related parties on ordinary course of businessand based on arm's length prices with the prior approval of audit committee are mentionedin the note no. 34 of financial statement in this Annual Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
Mr. Arvind Kulkarni director of the company retire by rotation in ensuing generalmeeting and being eligible offers himself for re-appointment at the ensuing Annual GeneralMeeting. The necessary resolution is being put in the Notice of the ensuing Annual GeneralMeeting for the consideration of the Members.
Mr. Niraj Chandra Chairman and Managing director of the company has re-appointed inthe 25th AGM held on 19th Sept 2016 for further period of five years with effect form01/01/2017 as a Chairman and Managing Director of the Company.
Pursuant to provisions of the Companies Act 2013 and SEBI Regulations mandates that theBoard shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors.
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board.
The evaluation process has been explained in the Corporate governance report section inthis Annual Report. The Board approved the evaluation results as collate by the nominationand remuneration committee.
None of the independent directors are due for re-appointment.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Company had 6 (Six) Board meetings during the financial year under review. TheDetails thereof are given in the corporate Governance Report. The intervening gap betweenthe meeting was within the period prescribed under the companies Act 2013
DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) We have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of 31st March 2017 and of the profitand loss of the company for that period;
(c) We have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;
(d) We have prepared the annual accounts on a going concern basis; and
(e) We have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.
(f) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The term of existing auditor M/s. Godbole & Co. Chartered Accountant Satara willexpire at the conclusion of 26th Annual General Meeting by rotation as per the Section 139(2) of the companies act 2013 and as per the said provision company cannot appoint suchauditor for next five years after expiry of his term. Further the board has recommended tothe Members to appoint M/s. A. C. Doshi & Co. (M. No. 103730) Chartered AccountantSatara as statutory auditor of the company in the place of M/s. Godbole & Co. for theterm of five years from the conclusion of this 26th Annual General Meeting to theconclusion of 31st Annual General Meeting of the company will be held in the year 2022(From the Financial Year 2017-18 to 2021-22).
Further the board of directors put necessary resolution in the notice of 26th annualgeneral meeting of the company for the consideration and approval of members of thecomapany and said appointment subject to ratification of auditor in every Annual GeneralMeeting of the company. The Company has received letter from him to the effect that theirappointment if made would be within the prescribed limits under Section 141(3) (g) ofthe Companies Act 2013 and that they are not disqualified for appointment. Theirappointment needs to be confirmed and their remuneration is to be fixed.
The observations of the Auditors report read with the relevant notes there on areself-explanatory and therefore do not call for any further comments under Section 134 ofthe Companies Act 2013.
M/s. Neha Doshi & Co. Practicing Company Secretaries was appointed to conduct thesecretarial audit of the Company for the financial year 2016-17 as required under Section204 of the Companies Act 2013 and Rules there under. The secretarial audit report for FY2016-17 forms part of the Annual Report as Annexure II to the Board's report.
SECRETARIAL AUDITOR'S REPORT :
The observations of the Secretarial Audit report are self-explanatory and therefore donot call for any further comments under Section 134 of the Companies Act 2013.
Pursuant to clause 49 of the Listing Agreement report on Corporate Governance alongwith Auditor's certificate on its compliance is attached as Annexure III to this report.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureIV and is attached to this Report.
INTERNAL FINANCIAL CONTROL
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
SIGNIFICANT AND MATERIAL ORDERS:
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future
As per the companies (Cost Records and Audit) Amendment Rules 2014 the company isexempted for cost audit from the financial year 2016-17. Hence company has not appointedcost auditor for the financial year 2017-18.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 the relevant informationpertaining to Energy Conservation Technology Absorption Foreign Exchange Earnings andOutgo are enclosed as Annexure V to the Board's report.
KEY MANAGERIAL PERSONNEL
During the year under the review company has appointed Mr.G H. Rotithor as CFO fornext Two Years.
PARTICULARS OF EMPLOYEES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies
Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is appended as Annexure VI to the Board's report.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's policy on directors' appointment and remuneration and other mattersprovided in section 178(3) of the Act has been disclosed in the corporate governancereport which forms part of this report.
LISTING OF EQUITY SHARES:
The Equity Shares of your Company are listed on BSE Ltd. where the same are tradedregularly and confirm that company has paid the listing fees for the financial year2017-18.
The Company has formulated a Whistle Blower Policy (the Policy) in compliance with theCompanies Act 2013 and Listing agreement to enable employees customers agents dealerssuppliers and other vendors that conduct business with Kay Power and Paper Limited toraise concerns and complaints about fraudulent practices.
Under the Policy the concerns/ complaints pertaining to General Managers and Mangersshould be raised before the Chairman of Audit Committee and concerns against otherEmployees should be addressed to the Vigilance officer and confirm that no personnel hasbeen denied access to the audit committee.
The Company has designated the Manager Mr. Arvind Patil as the Vigilance officer andhas created the following email accounts for facilitating the raising of such concerns.
Chairman of Audit Committee- chairman audit firstname.lastname@example.org
Vigilance officer - email@example.com
The Company aims to propagate a culture for maintaining highest standard of conduct andprofessionalism and therefore this Policy is implemented in furtherance of the Code ofConduct of the Company.
The details of establishment of such mechanism have also been disclosed on companywebsite on following link - http:// www.kaypowerandpaper.com/download Annoncement-KPPL.pdf
COMMITTEES OF THE BOARD
Currently the Board has four committees: the audit committee nomination andremuneration committee stakeholder's relationship committee and risk Managementcommittee. The role and responsibilities and composition of the aforesaid committees arementioned in the corporate governance report section in this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
A comprehensive Management discussion and analysis Report is appended as Annexure VIIforming a part of the Corporate Governance is part of this Annual Report
Your Directors appreciate valuable contribution of employees at all levels. YourDirectors place on record the gratitude for the co-operation received from IndianRenewable Energy Development Agency Ltd. Maharashtra State Electricity DistributionCompany Ltd. IDBI Bank Ltd. HDFC Bank Ltd. Suppliers Customers and Shareholders of theCompany and look forward to their continuous support incoming years.
|For and on behalf of the Board of Directors || |
| ||Niraj Chandra |
|Date : 25th July. 2017 ||Chairman and |
|Place : Satara ||Managing Director |
Annexure - I FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.
This Form pertains to the disclosure of particulars of contracts / arrangements enteredinto by the Company with related parties referred to in Sub-section (1) of Section 188 ofthe Companies Act 2013 including certain arm's length transactions under third provisothereto.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions not at arm's length basis:
There were no contracts or arrangements or transactions entered in to during the yearended March 31 2017 which were not at arm's length basis.
2. Details of contracts or arrangements or transactions at Arm's length basis.
|SL. No. ||Particulars ||Details |
|a ||Name (s) of the related party & nature of relationship ||M/s. Kay Bouvet Engineering Limited |
|b ||Nature of contracts/arrangements/ transaction ||for design manufacturing supplying erecting and commissioning the paper machines for increase of current capacity of paper division for 20000 TPA to 25000 TPA |
|c ||Duration of the contracts/arrangements/ transaction ||Till the completion of above Expansion. |
|d ||Salient terms of the contracts or arrangements or transaction including the value if any ||Rs. 100000000/- (Ten Crores Only) plus taxes extra |
|e ||Date of approval by the Board ||20/07/2016 |
|f ||Amount paid as advances if any ||- |
On July 20 2016 the Board of Directors ('the Board') of the company authorized theCompany to execute the contract and related documents with the M/s. Kay Bouvet EngineeringLimited.
Subsequently at the AGM held on Sept 19 2016 the shareholders approved the aforesaidrelated party agreement/ contract with the M/s. Kay Bouvet Engineering Limited.
Further after the approval of said contract in AGM the company has not purchased anymachines for increase in above capacity of paper division till the end of Financial YearMarch 2017.
| ||For and on behalf of the Board of Directors |
|Date: - 25th July 2017 ||Niraj Chandra |
|Place: - Satara ||Chairman and Managing Director |
Annexure - II
Form No. MR-3
FOR THE FINANCIAL YEAR ENDED 31.03.2017
Company No.: L21099MH1991PLC061709
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
KAY POWER AND PAPER LIMITED
Gat No. 454/457 At Post Borgaon Satara-415519
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by
M/s. Kay Power and Paper Limited
(hereinafter called the 'company'). Secretarial Audit was conducted in a manner thatprovided me a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.
Based on my verification of the Kay Power and Paper Limited's books papers minutebooks forms and returns filed and other records maintained by the company and also theinformation provided by the Company its officers agents and authorized representativesduring the conduct of secretarial audit I hereby report that in my opinion the companyhas during the audit period covering the financial year ended on 31st March 2017 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-processes and compliance-mechanism in place to the extent in the manner and subjectto the reporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by M/s. Kay Power and Paper Limited ("the Company") for thefinancial year ended on 31st March 2017 according to the provisions of:
1. The Companies Act 2013 (the Act) and the rules made there under;
2. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules made thereunder;
3. The Depositories Act 1996 and the regulations and Bye-laws framed there under;
4. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ('SEBI Act'):-
I. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011
II. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 and The Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015; -
III. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; (Not Applicable to the Company during the AuditPeriod)
IV. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
V. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not Applicable to the Company during the Audit Period);
VI. The Securities and Exchange Board of
India (Buyback of Securities) Regulations 1998 (Not Applicable to the Companyduring the Audit Period)
VII. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not Applicable to the Company during the Audit Period)
VIII. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) guidelines 1999 and securities exchange board of India(share based employee benefits Regulations 2014 notified on 28th October 2014 (NotApplicable to the Company during the Audit Period);
IX. The Securities and Exchange Board of India (listing obligations and Disclosurerequirements) regulations 2015
5. Other Laws Specifically Applicable to Company
Indian Boiler Act 1923
I have also examined compliance with the applicable clauses of the following:
1. The Equity Listing Agreements with Bombay Stock Exchange (BSE LTD).
2. Secretarial Standards issued by The Institute of Company Secretaries of India. Thecompany has complied with Secretarial Standard issued by ICSI.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above subject to the followingobservations:
A. The company had been declared as a sick industrial unit by BIFR (Board forIndustrial and Financial Reconstruction) in 2007. The Ministry of Finance vide anotification dated 25th November 2016 has repealed the Sick Industrial Companies (SpecialProvisions) Act 1985 (SICA) with effect from 1st Dec 2016 and any appeal preferred tothe Appellate Authority or any reference made or inquiry pending to or before the BIFRBoard or any proceeding of whatever nature pending before the Appellate Authority or theBIFR Board under the Sick Industrial Companies (Special Provisions) Act 1985 (1 of 1986)shall stand abated. Further such appeal or reference or inquiry stands abated under thisclause may make application to the National Company Law Tribunal (NCLT) under theInsolvency and Bankruptcy Code 2016 (IB CODE) within one hundred and eighty days from thecommencement of the respective provisions of Insolvency and Bankruptcy Code 2016 (IBC2016).
With view of above and company was registered under BIFR company had initially decidedthat to file the application to the National Company Law Tribunal (NCLT) accordance withthe provisions of the Insolvency and Bankruptcy Code 2016 to continue the protectionwhich had received from the BIFR Board and to request the extension of period forrepayment of deferred sales tax liability extension of period for fulfillment ofunfulfilled export obligation and allotment of share against the pending shareapplications. But later on Maharashtra sales tax dept' has agreed to provide theextension for repayment of sales tax liability. Further company has already agreed to paythe fixed monthly instalments for the repayment of outstanding term loan with the M/s.Indian Renewable Energy Development Agency Limited (IREDA). As aforesaid company hassettled its major dues with the lenders and creditors than there is no need to go forNCLT for said protection.
According to above company has decided not to go for NCLT application to get theprotection under the Insolvency and Bankruptcy Code 2016.
B. The allotment against the Share Application money is pending for Rs.93600000/-.As informed to us it is proposed to refund the same considering the development in Aabove.
C. The quarterly results are accompanied by the Limited Review Report as per Regulation33 (1) (d) & 33 (3) (c) (LODR) Regulation 2015. As informed by the Company itsStatutory Auditor has not subjected himself to the peer review process of the ICAI -Institute of Chartered Accountants of India and he does not hold a valid certificateissued by the Peer Review Board of the ICAI.
D. The company has not published public notices and un-audited/audited quarterly resultin English daily newspaper as required to be published under Regulation 47 of (ListingObligations and Disclosure Requirements) Regulations (LODR) 2015. As informed by theCompany due to carry forward losses and inadequate profit during the year company couldnot spend money on publication of financial result in English newspaper. The aforesaidresults are made available on the company website and also on the website of the Bombaystock exchange Ltd for downloading.
E. As per Regulation 17 of the LODR
(Listing Obligation & Disclosure Requirements) regulation 2015 if Chairman isExecutive Director then half of the board shall be independent. Considering this termpresently company has total five directors. The management's opinion is that out of thetotal Directors Three Directors are Independent Directors as per the definition clause 16(B) of Securities And Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
Further only two directors are Independent Directors as per Companies Act 2013 whoseappointment is duly registered with Ministry of Corporate Affairs.
The management opines that respective compliance has been done towards appointment ofIndependent Directors as it is recognized differently under Companies Act 2013 andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
F. The company has two divisions paper and power. Paper Division was operationalthroughout the year. The Company could not run Power Division due to non -availability ofbagasse raw material for Power generation during the year.
Based on this the management declared that the company is not carrying multiplebusiness activity and it is in compliance with the provisions of Section 203 (1) of theCompanies Act 2013
G As per Section 203 (3) a whole- time Key Managerial Personnel shall not hold officein more than one company at the same time.
As per our observation Mr. Niraj Chandra is a whole time Key Managerial Personnel(KMP) as per section 203 (1) in M/s. Kay Power & Paper Limited and as ManagingDirector in one more company at the same time where appointment of Key Managerial Personis not mandatory as per section 203 (1).
As explained by the management the appointment of Managing Director in other CompanyKay Bouvet Engineering Ltd is done as per the provisions of the Companies Act 2013under section 196 and it does not amount to KMP due to non-applicability of the section203.
H. During the year Company has received Show Cause Notices from Commissioner of Customand Director General of Foreign Trade (DGFT) Pune regarding Guarantee executed which hasbeen expired and unascertained duty for unfulfilled and export obligation is outstandingin favour of customs for EPCG. The company has replied to all the show cause notices.
As explained by the management the same matter is under consideration by BIFR.
I further report that
1. The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors as per CompaniesAct 2013. The changes in the composition of the Board of Directors that took place duringthe period under review were carried out in compliance with the provisions of the Act.
2. Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
3. Majority decisions are carried through and there were no any dissenting members' andhence views for dissenting voting were not required to be captured and recorded as part ofthe minutes.
I further report that there are adequate systems and processes in the company whichcommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
I further report that during the audit period the company has no specificevents/actions having a major bearing on the company's affairs in pursuance of the abovereferred laws rules regulations guidelines standards etc.
| ||For Neha Doshi & Co. |
| ||Company Secretaries |
| ||Neha A. Doshi |
| ||Proprietor |
|Place: Satara ||FCS No.: 5373 |
|Date: 17th July 2017 ||C P No.: 4631 |