The Members of KG Petrochem Limited
The Directors have pleasure in presenting this Board's Report of the Companytogether with the Audited Statement of Accounts and the Auditors' Report of your companyfor the financial year ended 31st March 2019.
1. FINANCIAL HIGHLIGHTS
| ||2018-2019 ||2017-2018 |
|Gross Income ||25665.69 ||23357.47 |
|Profit Before Interest Depreciation and Tax ||3907.45 ||3055.88 |
|Finance Cost ||677.7 ||521.07 |
|Profit Before Depreciation ||3229.75 ||2534.81 |
|Depreciation and Amortized Expense ||1704.77 ||1554.8 |
|Net Profit Before Tax ||1524.98 ||980.01 |
|Tax Expenses ||655.43 ||198.52 |
|Net Profit After Tax ||869.55 ||781.49 |
2. REVIEW OF OPERATIONS AND STATE OF COMPANY'S AFFAIRS
During the Financial Year the performance of the company from revenue point of viewwas improved as the Company has achieved turnover of Rs. 24907.43 Lacs as against Rs.22727.38 Lacs in the preceding financial year. There was increase in the turnover of thecompany in comparison to last year. The profit before tax for the year Rs. 1524.98Lacs ascompared to Rs. 980.01 Lacs in the previous year. Further Segment wise result of operationare as under:-
During the year revenue from operation from Textile Division was Rs.22920.36 Lacsincluding export sales of Rs 19717.37 Lacs (FOB) as against Rs. 22634.61 Lacs includingexport of Rs. 18897.23 Lacs in previous year the growth of the division is notsubstantial. The performance of the division was average.
During the year the Agency Division has sold HDPE/LLDPE Granules 20635.00 Mt.amounting to Rs. 22073.00 Lacs in comparison of 23367.50 Mt. amounting of Rs. 22809.55Lacs and earned commission of Rs. 82.01 Lacs as compared to last year Rs. 92.77 Lacs. Thedivision has performed well during the year under review.
Garment division is doing 100% Job work only for Textile Division.
Technical Textile Division
During the year its revenue from operation was Rs. 1905.06 Lacs. During the yearcompany has started production with the 1 coating line Further Plant and Machinery areexpected to arrive by the end of July 2019 and expected to complete by the end of next FY.
3. CHANGE IN NATURE OF BUSINESS IF ANY
There was no change in the business of the Company during the financial year 2018-19.
In order to conserve the resources of company the Board of Directors are notrecommending any dividend this year.
5. AMOUNTS TRANSFERRED TO RESERVES
During the year company has revalued its Land & Building therefor revaluationreserve of Rs. 4482.51 is created.
|S. No. ||Reserve Head ||Opening Balance ||Addition ||Deduction ||Closing Balance |
|1. ||Revaluation Reserve ||0.00 ||4498.76 ||(16.25) ||4482.51 |
|2. ||General Reserve ||36.47 ||16.25 ||0.00 ||52.72 |
|3. ||Retained Earnings ||5306.30 ||869.55 ||0.00 ||6175.85 |
6. TRANSFER OF UNCLAIMED/ UNPAID DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to sections 124 and 125 of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 (IEPF Rules) there was no unclaimed/ unpaid dividend hence the companyis not required to transfer any amount to Investor Education and Protection Fund
7. SHARE CAPITAL
The paid-up equity share capital as on 31 March 2019 was Rs. 5.22 Crore. There were noPublic Issue Right Issue issue bonus issue or preferential issue etc. during the year.The Company has not issued shares with differential voting rights or sweat equity sharesnor has it granted any stock options.
8. MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year and the date of thisreport
9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the year under review there were no significant and material order passed byany Regulator or Court or Tribunal against the company which may impact the going concernstatus or future operations of the company.
10. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The Internal Control is intended to increase transparency and accountability in anorganization's process of designing and implementing a system of internal control. Theframework requires a company to identify and analyze risks and manage appropriateresponses. The Company has successfully laid down the framework and ensured itseffectiveness. The company's internal controls system is commensurate with the sizescale nature and complexity of its operations. These have been designed to providereasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable statutes safeguarding assets fromunauthorized use executing transactions with proper authorization and ensuring compliancewith corporate policies. The company has appointed M/s. Arpit Vijay & Co CharteredAccountants (FRN-017737C)to oversee and carry out internal audit. The audit will be conducted on quarterly basis and Audit Committee will actively review the Internal AuditReport. The Management with Audit Committee periodically reviews the Internal ControlSystem and procedure for the efficient conduct of the business.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the period under review the following changes have occurred in the constitutionof Directors and Key Managerial Personnel (KMP) of the company:
|S.No ||Name ||Designation ||Date of appointment ||Date of cessation ||Mode of Cessation |
|1 ||Mr. Rajkumar Agarwal ||Independent Director ||- ||September 26 2018 ||Resignatio n |
|2 ||Mr. Pramod Agarwal ||Additional Director ||October 12 2018 ||February 26 2019 ||Resignation |
|3 ||Mr. Rameshwar Pareek ||Independent Director ||- ||February 7 2019 ||Resignation |
|4 ||Mr. Radhey Shyam Gemini ||Independent Director ||- ||February 7 2019 ||Resignation |
|5 ||Mr. Jai Prakash Khandelwal ||Casual Vacancy ||February 14 2019 ||- ||- |
|6 ||Mr. Pawan Jain ||Additional Director ||February 14 2019 ||February 26 2019 ||Resignation |
|7 ||Mr. Bridhi Chand Sharma ||Additional Director ||February 26 2019 ||- ||- |
|8 ||Mr. Ramesh Chand Maheshwari ||Whole Time Director ||- ||March 8 2019 ||Resignation |
|9 ||Mr. Saied Mohammad ||Company Secretary cum Compliance Officer || ||September 6 2018 ||Resignation |
|10 ||Ms. Neetu Sharma ||Company Secretary cum Compliance Officer ||October 12 2018 || || |
The Board express their grateful appreciation for the assistance and guidance providedby Mr. Ramesh Chand Maheshwari Mr. Rameshwar Pareek Mr. Radhey Shyam Gemini Mr. RajKumar Agarwal and Mr. Pramod Agarwal during their tenure Further the Companies Act 2013mandates that at least two thirds of the total number of directors (excluding independentdirectors) shall be liable to retire by rotation. Accordingly Mrs. Prity Singhal WholeTime Director (DIN: 02664482) being the longest in the office amongst the directors liableto retire by rotation retire from the Board by rotation this year and being eligibleoffers her candidature for re appointment. The Board recommends her re-appointment. Aresolution seeking shareholders' approval for her re-appointment forms part of the Notice.
Brief details of Prity Singhal Whole Time Director who is seeking re appointment aregiven in the notice of Annual General Meeting.The Independent Directors have confirmed andhave submitted declarations that each of them meet the criteria of independence asprovided in Section 149(6) of the Act along with Rules framed thereunder and Regulation16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI Listing Regulations). There has been nochange in the circumstances affecting their status as independent directors of the CompanyAs per provision of the Section 203 of the Companies Act 2013 Mr. Gauri Shanker KandoiChairman cum Managing Director Mr. Manish Singhal and Mrs. Prity Singhal Whole TimeDirectors Mr. Shiv Ratan Sharma Chief Financial Officer (CFO) and Ms. Neetu SharmaCompany Secretary are the Key Managerial Person of the Company as on March 31 2019.
12. BOARD AND COMMITTEE MEETINGS
Seven meetings of the Board were held during the year under review. For details ofmeetings of the Board please refer to the Corporate Governance Report which is a part ofthis report.
13. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. More details on the same are givenin the Corporate Governance Report.Separate exercise was carried out to evaluate theperformance of the board including the Chairman of the Board who were evaluated onparameters such as level of engagement and contribution independence of judgmentsafeguarding the interest of the Company and its minority shareholders etc. The Companyhas prepared an Annual Performance Evaluation Policy for performance evaluation ofIndependent Directors Board and its Committees. The performance evaluation of theIndependent Directors was carried out by the entire Board. The performance evaluation ofthe Chairman and the Non Independent Directors was carried out by the IndependentDirectors who also reviewed the performance of the Secretarial Department.
14. NOMINATION AND REMUNERATION POLICY
In accordance with the provisions of Section 178(3) of the Companies Act 2013 Companyhas Nomination and Remuneration Policy and the same is given in the Corporate GovernanceReport forming part of this Report.
15. CREDIT RATING
Investment Information and Credit Rating Agency (ICRA) has assigned and continued along-term rating of ICRA BBB (pronounced ICRA Triple B) and short-term rating of ICRA A3+(ICRA A three Plus) vide letter dated 16.07.2018.
16. DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMEN AT WORK PLACE (PREVENTION
PROHIBITION AND REDRESSAL) ACT 2013
During the Financial Year ended on 31st March 2019 the internal complain committee onSexual Harasment of Women did not receive any compliant regarding sexual harasment ofwomen at workplace by any employee.
17. LISTING STATUS
Securities of the Company are listed on the Bombay Stock Exchange.
18. INFORMATION ABOUT JOINT VENTURE/ SUBSIDIARY/ AND ASSOCIATE COMPANY
The company does not have any Joint Venture/ Subsidiary and Associate company.
19. BOARD COMMITTEES
The Company have following Committees as on March 31 2019: a. Audit Committee b.Nomination and Remuneration Committee c. Stakeholder Relationship Committee d. CorporateSocial Responsibility (CSR) CommitteeThe composition of the Committees charters anddetails of meetings held during the year and attendance there at are given in the Reporton Corporate Governance forming part of the Annual Report.
20.WHISTLE BLOWER POLICY AND VIGIL MECHANISM
Pursuant to the provisions of Section 177 (9) of the Companies Act 2013 and Regulation22(1) of SEBI (Listing
Obligations and Disclosure Requirements) Regulation 2015 as amended company hasformulated a vigil mechanism (whistle blower policy) for its directors and employees ofthe Company. The Whistle Blower Policy and Vigil Mechanism provides a mechanism for thedirector/employee to report without fear of victimization any unethical behaviorsuspected or actual fraud violation of the Code of Conduct etc. violations and nowinstances of leak of Unpublished Price Sensitive Information which are detrimental to theorganization's interest. The mechanism protects whistle blower from any kind ofdiscrimination harassment victimization or any other unfair employment practice. TheCompany affirms that no employee has been denied access to the Audit Committee.
The Vigil Mechanism Policy is placed on the website of the Company athttp://www.kgpetro.in.
21. CODE OF CONDUCT
Regulation 17(5) of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 requires every listed company to lay down a code of conduct for itsdirectors and senior management incorporating duties of directors as laid down in theCompanies Act 2013.
In this regard the Directors Key Managerial Personnel and senior management of theCompany have confirmed compliance with the Code of Conduct applicable to the Directors andemployees of the Company and the declaration in this regard made by the Chairman cumManaging Director is attached as Annexure "I" which forms a part of this Report.The Code of Conduct is also available on the Company's website www.kgpetro.in
22.. HUMAN RESOURCE MANAGEMENT HEALTH AND SAFETY
During the year the Company had cordial relations with workers staff and officers. Theshop floor management is done through personal touch using various motivational tools andmeeting their training needs requirements. The company has taken initiative for safety ofemployees and implemented regular safety audit imparted machine safety training wearingprotective equipment's etc Company continued to focus on attracting new talent whileinvesting in organic talent development to help employees acquire new skills explore newroles and realize their potential. The Company believes in empowering its employeesthrough greater knowledge team spirit and developing greater sense of responsibility. Thetotal count of regular employees as at March 31 2019 was 1123.
23. PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 regarding employees is given in Annexure 'II'.There were noemployee in the company drawing remuneration in excess of the limits set out in the Rule5(2) and 5(3) of the Companies (Appointment and remuneration of Managerial Personnel)Rules 2014.
24. EXTRACT OF ANNUAL RETURN
As per the requirements of Section 92(3) of the Companies Act 2013 and read withCompanies(Management and Administration) Rules 2014 the extract of the Annual Return forthe Financial Year 2019 is given in Annexure 'III' in the prescribed Form No. MGT-9 whichis a part of this report.
25. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. During the Year thecompany has not entered into any contracts/ arrangements/ transactions with relatedparties which could be considered material in accordance with the policy of the company onmateriality of related party transaction hence Form No. AOC-2 is not applicable to thecompany.
During the year 2018-19 as required under section 177 of the Companies Act 2013 andregulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 all related party transactions were placed before the Audit Committee for approval.
A statement showing the disclosure of transactions with related parties as requiredunder Ind AS 24 is set out separately in this Annual Report.
26. CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview pursuant to the provisions of Section 135 of the Companies Act 203 are set out inAnnexure 'IV' of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. For other details regarding the CSR Committee pleaserefer to the Corporate Governance Report which is a part of this report. The CSR policyis available on http://kgpetro.in/corporate_responsibility.php.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
Information on conversation of energy technology absorption foreign exchange earningsand out go pursuant to section 134 (m) of the Companies Act 2013 read with the Companies(Accounts)Rules 2014 is given in Annexure V of the report.
28. CORPORATE GOVERNANCE
A separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report as Annexure 'VI' and the Certificate from Mr. Sandeep KumarJain Practicing Company Secretaries (M. No. F. 5398) confirming compliance with therequirements of Corporate Governance as stipulated in Schedule V of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 is annexed as Annexure 'VII'.
29. MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report as required under Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is given in Annexure'VIII'.
30. STATUTORY AUDITORS AND REPORT THEREON
Pursuant to the section 139 of the Companies Act 2013 R Sogani & AssociatesChartered Accountants (FRN 018755C) were appointed as the Statutory Auditors of theCompany for a term of five years from the conclusion of thirty fourth Annual GeneralMeeting of the company till the conclusion of thirty ninth Annual General Meeting of thecompany. Accordingly the term of R Sogani & Associates would be completed upon theconclusion of this Annual General Meeting of the company.
The Board of Directors after considering the recommendations of the Audit Committeehas recommended the appointment of R Sogani & Associates Chartered Accountants (FRN018755C) as the Statutory Auditors of the Company for a second term of five consecutiveyears commencing from the conclusion of this Annual General Meeting till the conclusion ofthe forty forth Annual General Meeting of the company.
The Company has received a eligibility certificate cum consent letter from R Sogani& Associates Chartered Accountants to the effect that the appointment if made wouldbe in accordance with limits specified under section 141 of the Companies Act 2013. Andas required under SEBI Regulations they have confirmed that they hold valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India. Aresolution proposing their appointment from the conclusion of this Annual General Meetingtill the conclusion of the forty forth Annual General Meeting of the Company at aremuneration to be fixed by the Audit Committee and/or Board of Directors and billedprogressively is submitted at the Annual General Meeting for approval of the members. TheBoard recommends the appointment of R Sogani & Associates Chartered Accountants asthe Statutory Auditors for approval of the members.
Further the Statutory Auditors' report do not contain any qualificationsreservations or adverse remarks.
31. SECRETARIAL AUDITORS AND REPORT THEREON
According to provision of the section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has re-appointed M/s Arms & Associates LLP Practicing Company Secretaries toundertake the secretarial audit of the Company for the financial year ended 31st March2019.
The Secretarial Audit Report Submitted by M/s Arms & Associates LLP PracticingCompany Secretaries for the financial year ended 31st March 2019 in the prescribed formMR-3 is annexed to the report as Annexure IX. The said secretarial audit report does notcontain any qualification reservation or adverse remark or disclaimer made by theSecretarial Auditor.
In addition to the above and pursuant to SEBI Circular dated 8 February 2019 a Reporton Secretarial Compliance by M/s Arms & Associates LLP for the year ended 31 March2019 is being submitted to stock exchanges. There are no observations reservations orqualifications in the said Report.
32. COST AUDIT
As per Sub Rule (3) of Rule 4 of Companies (Cost Records & Audit) Rules 2014Cost Audit for the FY 2018-19 is not applicable on the company as the export turnover ofthe company is more than 75% of its total turnover.
33. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
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 for the financial year 2018-19.
34. DEPOSITS FROM PUBLIC
The company has not accepted any deposits from public and as such no amount ofprincipal or interest on deposits from public was outstanding as at the Balance Sheetdate.
35. DEMATERIALISATION OF SHARES
The shares of the Company are being traded in electronic form and the Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of thenumerous advantages offered by the Depository system Members are requested to avail thefacility of dematerialization of shares with either of the Depositories as aforesaid. Ason March 31 2019 97.44% of the share capital stands dematerialized.
36. PREVENTION OF INSIDER TRADING
Pursuant to SEBI (Prohibition of Insider Trading Regulations) 2015 the Board hasformulated and implemented a Code of Conduct to regulate monitor and report trading byits employees and other connected persons and Code of Practices and Procedures for fairdisclosure of Unpublished Price Sensitive Information. The same is available on theCompany's website i.e. http://www.kgpetro.in
37. DIRECTORS' RESPONSIBILITY STATEMENt
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Board of Directors of theCompany to the best of their knowledge and belief confirms that-
(a) In the preparation of the Annual Accounts the applicable Accounting Standards hadbeen followed along with proper explanation relating to material departures;
(b) The directors had selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
38. PRESENTATION OF FINANCIAL STATEMENTS
The financial statements of the Company for the year ended 31 March 2019 have beendisclosed as per Division ll of Schedule III to the Companies Act 2013.
39. INDIAN ACCOUNTING STANDARDS 2015
The annexed financial statements comply in all material aspects with Indian AccountingStandards (Ind AS) notified under section 133 of the Companies Act 2013 Companies(Indian Accounting Standards) Rules 2015 and other relevant provisions of the CompaniesAct 2013.
40. SECRETARIAL STANDARDS OF ICSI
Pursuant to the approval given on 10 April 2015 by the Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2) came into effect from 1 July 2015. The said standards were further amended w.e.f. 1October 2017. The Company is in compliance with the same.
41. CAUTIONARY STATEMENT
Statements in this report describing the Company's objectives expectations and/oranticipations may be 'forward looking' within the meaning of applicable Securities Law andRegulations. Important factors that could influence the Company's operations includeglobal and domestic supply and demand conditions affecting selling prices of finishedgoods availability of inputs and their prices changes in the Government policiesregulations tax laws economic developments within the country and outside and otherfactors such as litigation and industrial relations.
Except as required by law the Company does not undertake to update any forward-lookingstatements to reflect future events or circumstances Investors are advised to exercisedue care and caution while interpreting these statements.
Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.
| || ||For and on behalf of the Board of Director |
| || ||KG Petrochem Limited |
|Date : 14.08.2019 ||Manish Singhal ||Gauri Shanker Kandoi |
| ||Whole Time Director ||Chairman & Managing Director |
|Place : Jaipur ||DIN : 00120232 ||DIN : 00120330 |