The Members of
KESAR PETROPRODUCTS LIMITED
Your Directors presents the 30th Annual Report together with the Audited FinancialStatements for the year ended 31st March 2020.
The Company's financial performance for the year ended 31st March 2020 is summarizedbelow:
(Rs. In Lakhs )
|Particulars ||2019-20 ||2018-19 |
|Revenue from operations ||12978.78 ||15474.19 |
|Other Income ||96.26 ||141.18 |
|Total Turnover & Other Income ||13075.04 ||15615.37 |
|Less : Manufacturing and Other Expenses ||12740.90 ||14993.54 |
|Profit / (Loss) before interest and Depreciation ||334.14 ||621.83 |
|Less : Finance Costs (Interest) ||90.33 ||109.52 |
|Profit / (Loss) after Interest ||243.81 ||511.95 |
|Less : Depreciation and Misc. Expenses written off ||508.80 ||474.10 |
|Net Profit / (Loss) before exceptional items and tax ||(264.99) ||37.85 |
|Exceptional Items ||(-)4.89 ||4.91 |
|Profit / (Loss) Before Tax ||(269.89) ||32.93 |
|Less: Tax Expense (including Deferred Tax) ||8.54 ||64.56 |
|Profit/(Loss) after tax ||(261.35) ||(31.62) |
|Earnings Per Share (EPS) ||(-) 0.27 ||(-) 0.03 |
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:
The total net Loss before tax of the Company in the current year was Rs. 269.89 Lakhsas against net Profit before tax of Rs. 32.93 Lakhs in the previous year. The Company hasincurred a Net Loss after tax of Rs. 261.35 Lakhs in the current year as compared to NetLoss after tax Rs. 31.62 Lakhs in the previous year.
The business outlook for the Company was less than rosy in the current year due tofactors beyond the control of the management; during the year the Company faced turbulencebecause of fire in the plant and then the resumption of operations became lethargic onaccount of ageing of the plant. The start of the COVID-19 pandemic since March 2020 andthe lockdowns that followed till 30th June 2020 to varying degrees of intensity both bythe Central Government and the Government of Maharashtra and still continuing hasimpacted the overall business environment substantially and your Company in particularleading to several economic downgrades; the resumption of normal activities have commencedin June 2020. The demand of the products in the pigment range remains luke warm and thedemand for the products in dye intermediate range have had severe roll back.
The focus of the Company to have dye intermediates as a substantial revenue generatoralso suffered a setback because of price crash in the dye intermediates. The Beta Naphtholseries of intermediates was then stopped. The Company has started other dye intermediatesto replace the Beta Naphthol intermediates and hope to do better in this sector.
The turbulence in the intermediate market coupled with reduction in value addition ofCPC was a setback in this year. The Company is hopeful that this coming year will bebetter than the previous year though the signs of headwinds in terms of recession is seenby the Company.
The Company's products however remain fairly well established and the Company has aloyal set of customers.
In view of Loss incurred your Directors do not recommend any dividend for the yearended 31st March 2020. RESERVES:
The Company did not transfer any amount to General Reserve.
CHANGE IN NATURE OF BUSINESS:
The Company is engaged in the business manufacturing Phthalocyanine range of pigmentsand Dye Intermediates. There was no change in the nature of business activities of theCompany during the year under review.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTSRELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which these financial statements relateon the date of this report.
SUBIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES:
The Company does not have subsidiary joint venture and associate company.
During the year under review the Company has not accepted or renewed any depositswithin the meaning of Section 73 and 76 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014. There was no deposit which remained unclaimed andunpaid at the end of the year.
EXTRACT OF ANNUAL RETURN:
An extract of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 readwith Rule 12 of the Companies (Management and administration) Rules 2014 is attachedherewith and marked as 'Annexure I'.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
As per Section 152(6) of the Companies Act 2013 Mrs. Snehlata Dinesh Sharma retires byrotation and being eligible offers herself for re-appointment as the Director of theCompany.
Mr. N. M. Sayyad resigned as an Independent Director with effect from 9th November2019. Mrs. Neelam Yashpal Arora was appointed as an Independent Director with effect from12th November 2019 by the Nomination and Remuneration Committee of the Board and herappointment was confirmed by the Board on 12th November 2019 subject to her appointmentbeing ratified by the shareholders in the ensuing Annual General Meeting.
Mrs. Manali More ceased to be Chief Financial Officer (CFO) of the company with effectfrom 25th October 2019; Mr. Jignesh Desai was appointed as the Chief Financial Officer(CFO) with effect from 12th November 2019.
Mr. P. M. Nair resigned as the Company Secretary with effect from 7th January 2020.Dr. V. G. Chari (FCS 2695) was appointed by the Nomination & Remuneration Committee ofthe Board on 13th January 2020 and his appointment was confirmed by the Board in itsmeeting held on 10th February 2020.
Other than stated above there was no change in the Directors and Key ManagerialPersonnel of the Company.
COMPOSITION OF BOARD AND STATUTORY COMMITTEES FORMED THEREOF:
The Composition of the Board and Statutory Committees thereof along with other detailsare given in the Corporate Governance Report.
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
The Board met 4 (Four) times during the year. The details of the meetings are given inthe Corporate Governance Report. The intervening gap between the two meetings was withinthe period prescribed under the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company have given the requisite declaration pursuantto Section 149(7) of the Companies Act 2013 to the effect that they meet criteria ofindependence as provided in Section 149(6) of the Act.
FORMAL ANNUAL EVALUATION:
Pursuant to the provisions of Sec 134(3) of Companies Act 2013 read with Rule 8 of TheCompanies (Accounts) Rules 2014 and Regulation 4 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annual performanceevaluation of its own performance the directors individually as well as the evaluation ofthe working of its Audit Nomination and Remuneration Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:
The Board on the recommendation of the Nomination and Remuneration Committee of theCompany has framed a policy for selection and appointment of Directors Senior Managementand their remuneration. The Salient features of the Remuneration Policy are:
The Remuneration Policy of the Company is divided into the following headings and theentire policy is available on the website of the Company www.kesarpetroproducts.com;
(1) Preface (2) Commencement (3) Definitions (4) Purpose (5) Principles of Remuneration(6) Nomination and Remuneration Committee (7) Selection and appointment of the BoardMembers (8) Process for evaluation; and (9) Publication
DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby confirms that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2020 and of the loss ofthe company for period ended on that date;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis;
(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
Following are the particulars of loans guarantees and investments under Section 186 ofthe Companies Act 2013 of the Company:
(A) Loans provided:
|Opening Balance ||Amount of Loans Given During The Year ||Amount of amounts (Loans repaid) received during the ear ||Closing Balance |
|214921438 ||1171836 ||213711434 ||2381840 |
No Guarantees were given during the year under review.
(C) Investments made:
(Amount in Rs.)
|Nature of Investments ||Opening Balance ||Amount Invested during the year ||Amount Redeemed ||Closing Balance |
|Union Capital Protection Oriented Fund ||13506250 ||- ||- ||12887500 |
|Total ||13506250 ||- ||- ||12887500 |
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TO SECTION188(1) OF THE COMPANIES ACT 2013:
There were no contracts or arrangements or transactions with any related parties whichcould be considered material in accordance with the policy of the Company during the yearunder review. Hence the Company is not required to disclose details of the related partytransactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of theAct and Rule 8(2) of the Companies (Accounts) Rules 2014.
PARTICULARS OF EMPLOYEES:
There was no employee who was employed throughout the year or part thereof and inreceipt of remuneration aggregating to Rs. 10200000/- p.a. or more or who was employedfor part of the year and in receipt of remuneration aggregating to Rs.850000/- p.m. ormore.
PARTICULARS AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014:
The details related to employees and their remuneration as required under Section197(12) of the Companies Act
2013 and Rule 5(1) and 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules
2014 are mentioned in Annexure 'III' to this Board's Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO: (A)Conservation of energy-
|(i) the steps taken or impact on conservation of energy; ||NIL |
|(ii) the steps taken by the company for utilizing alternate sources of energy; ||Exploring the possibility of power generation through sulphuric acid. |
|(iii) the capital investment on energy conservation equipment. ||NIL |
(B) Technology absorption-
|(i) the efforts made towards technology absorption; ||NIL |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution; ||NIL |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- ||NIL |
|(a) the details of technology imported; || |
|(b) the year of import; || |
|(c) whether the technology been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and || |
|(iv) the expenditure incurred on Research and Development. ||NIL |
(C) Foreign exchange earnings and outgo-
|The Foreign Exchange earned in terms of actual inflows during the year; ||Rs. 107.11 Lakhs |
|The Foreign Exchange outgo during the year in terms of actual outflows. ||Rs. 828.48 Lakhs |
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS:
The following Orders were passed by the Securities and Exchange Board of India withregard to non-compliance of (i) Minimum Public Subscription; (ii) SEBI (SubstantialAcquisition of Shares and Takeovers) Regulations 2015 and SEBI (Prohibition of InsiderTrading) Regulations 2015:-
|Subject matter of the Notice ||SEBI Order dated ||Order passed by ||Penalties Levied |
|1 Non-compliance of Minimum Public Shareholding of 25% (MPS) ||30.01.2020 ||Adjudicating Officer (AO) ||Rs. 3 Lakhs to Rs. 3.50 Lakhs per person / entity |
|2 Non-compliance with yearly disclosures (SAST) ||09.03.2020 ||Whole-time Member (WTM) ||Concerned people barred from accessing or dealing in the Securities market for one year. |
|3 Non-compliance with Insider Trading Regulations (PIT) ||19.06.2020 ||Adjudicating Officer (AO) ||No penalties as disclosure was done by other means. |
The Company has filed an appeal in the Securities Appellate Tribunal in respect of theAO's Order on MPS. Other than the above there was no significant material order passed byany regulator or court or tribunal; none of the above SEBI Orders impact the going concernstatus of the Company or will have bearing on company's operations in future.
INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has in place proper and adequate Internal Control System commensurate withthe size scale and complexity of its operations. The Company monitors and evaluates theefficacy and adequacy of internal control system its compliance with operating systemsaccounting procedures and policies.
VIGIL MECHANISM POLICY:
The Company has a Vigil Mechanism policy to deal with instance of fraud andmismanagement if any. The mechanism also provides for adequate safeguards againstvictimization of directors and employees who avail of the mechanism and also provide fordirect access to the Chairman of the Audit Committee in the exceptional cases. The detailsof the Vigil Mechanism Policy is explained in the Corporate Governance Report and alsoposted on the website of the Company. We affirm that during the financial year 2019-20 noemployee or director was denied access to the Audit Committee.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THECOMPANY:
The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION ANALYSIS REPORT:
Pursuant to Regulation 34(3) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the following have been made a part of the Annual Reportand are attached to this report:
Management Discussion and Analysis Report - 'Annexure -IV'
Corporate Governance Report - 'Annexure V
Declaration by Executive Director/CEO affirming with the compliance of the codeof conduct of Board of Directors and Senior Management -'Annexure VI'
Practicing Company Secretary's Certificate under sub-para 10(i) of Part C ofSchedule V of SEBI (LODR) Regulations 2015 - 'Annexure VII'
Auditors' Certificate regarding compliance of conditions of Corporate Governance-'Annexure VIII' STATUTORY AUDITORS:
At the Company's 27th Annual General Meeting held on 28th September 2017 M/s. A.Sachdev Co. Mumbai Chartered Accountants (Firm Reg. No. 001307C) has been appointed asthe Statutory Auditor of the Company for a term of 5 years to hold office from theconclusion of the 27th Annual General Meeting until the conclusion of the 32nd AnnualGeneral Meeting of the Company.
The Company has appointed M/s. Sayeed Khan & Associates Chartered AccountantsMumbai as Internal Auditors. The Internal Auditors monitor and evaluate the efficiency andadequacy of internal control systems in the Company its compliances with operatingsystems accounting procedures and policies at all locations of the Company and reportsthe same on quarterly basis to the Audit Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Pankaj & Associates Company Secretaries Mumbai to undertake theSecretarial Audit and Secretarial Compliance of the Company. The Secretarial Audit Reportand the Secretarial Compliance Certificate are attached herewith and marked as 'AnnexureIX &X'.
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS OR ADVERSE REMARKS ORDISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS
There were no qualifications reservations adverse remarks made or fraud reported bythe Statutory Auditors in their reports. There are also no points for which separateexplanation would be given.
The observations / qualifications / adverse remarks made by the Secretarial Auditorsrelate to SEBI Orders as mentioned above and have been adequately explained therein.
CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to Section 135 of the Companies Act 2014 read with Companies (CorporateSocial Responsibility Policy) Rules 2014 the Company has formed Corporate SocialResponsibility Committee and a Policy on Corporate Social Responsibility (CSR).
The Company could not spend the required amount on CSR activities as per the CSR policyof the Company because the Company could not identify proper project to make expendituretowards its CSR obligations. The brief outline of the CSR Policy of the Company and theinitiatives undertaken by the Company on CSR activities during the year is set out in'Annexure II' of this report in the format prescribed in the Rule 8 of Companies(Corporate Social Responsibility Policy) Rules 2014.
INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITONAND REDRESSAL) ACT 2013.
Internal Complaint Committee was formed under Section 4 of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year nocomplaint was received by the Committee.
DISCLOSURE ON IMPACT OF COVID-19 PANDEMIC ON THE BUSINESS AS ADVISED VIDE SEBI CIRCULARNO SEBI/HO/CFD/CMDI/CIR/P/2020/84 DATED MAY 20 2020
In accordance with the SEBI Circular information relating to COVID - 19 impact on thebusiness of the Company is given below:-
|Particulars As Per SEBI Circular Dated May 20 2020 ||Details of Disclosures |
|Impact of Covid 19 pandemic on the business ||The impact on the business has been very pronounced due to National State and Local Governments Lockdown for almost a period of 4 months |
|Ability to maintain operations including the Factories /units/office spaces functioning and closed down ||For more than 3 months the factory / office spaces could not function as 10% of the staff / workers were allowed to work as the company is not in the essential services sector |
|Schedule if any for restarting the operations ||There was no planned schedule as the lockdowns were not allowing for working as a continuous process industry. |
|Particulars As Per SEBI Circular Dated May 20 2020 ||Details of Disclosures |
|Steps taken to ensure smooth functioning of operations ||Given the constraints steps have been taken to mitigate the business and industry specific stress. |
|Estimation of future impact of COVID-19 on operations ||The past 4 months' experience has shown that the financial year 2020 - 2021 is going to be a very stressful and very far from smooth operations. |
|Details of impact of COVID-19 || |
|Capital ||Adequacy of Capital has been impacted very severely. |
|Profitability ||The area is in negative territory and very tough to get by. |
|Liquidity ||Operational liquidity was about just 25% and stress on meeting creditors' payments has become extremely difficult |
|Ability to service debts and other financial arrangements ||About 25% - 30% ability - the rest in in negative territory |
|Assets ||Impairment by about 40% |
|Internal Financial reporting and control ||Very Stressed reporting and control is weak. |
|Supply Chain ||Affected due to transport restrictions and movement of people. |
|Demand for products and services ||Demand for products has suffered due to the adverse supply chain impact |
|Existing contracts/agreements where' _ nonfulfilment of the obligations by any party will have significant impact on the listed entity's business ||Yes - the stress on contracts / obligations exists but so far these factors are not yet disruptive. The next 8 months would reveal the significance and extent of the impact on the company's business. |
|Other relevant material updates Though the impact of COVID-19 seems to about the listed entity's business ||The following are material updates:- |
| ||(1) The factory has been functioning with just about 45 - 50% normalcy. |
| ||(2) The Creditors and Debtors have so far been manageable. |
| ||(3) The liquidity is a problem area but the company endeavours to address this with innovative means by addressing these issues to the Company's creditors and debtors. |
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. Your Directors also acknowledgegratefully the support and confidence reposed by the shareholders of the Company.
By Order of the Board of Directors
|Place: Mumbai ||Mohit P. Kaushik ||Mrs. Snehlata D. Sharma |
|Date: 31st July 2020 ||Executive Director& CEO ||Director |
| ||DIN: 06463483 ||DIN: 01854393 |