TO THE MEMBERS KHAITAN (INDIA) LIMITED
Your Directors present their Seventy ninth Annual Report together with the AuditedAccounts for the year ended 31st March 2016.
|FINANCIAL RESULTS ||2015-2016 ||2014-2015 |
|Sales & Operating Income were ||912.21 ||2664.98 |
|Profit/Loss for the year was ||(579.57) ||(371.60) |
|From which is deducted/added || || |
| Depreciation ||(176.05) ||(177.47) |
| Income Tax relating to earlier year ||(0.01) ||(9.65) |
| ||(755.83) ||(558.72) |
|Leaving a Balance of || || |
|To which is added: || || |
| ||(1410.17) ||(851.45) |
|-Profit/Loss Brought Forward from previous year || || |
|Making an available Surplus/Deficit of ||(2166.00) ||(1410.17) |
|Which is Carried Forward to Next Year || || |
In view of loss Directors do not recommend any dividend for the year.
MANAGEMENT DISCUSSION & ANALYSIS REPORT OPERATIONS
Performance of all the Divisions are as under:-
Marketing Division: The Company has earned royalty of Rs. 309.94 lacs compared tothe last year's Rs. 407.28 lacs.
Sugar Division: The crushing of sugarcane was only 0.75 lacs quintals compared tolast year's 5.92 lacs quintals. The Sugar Mill could start only at fake end of the sugarseason and could operate only for 15 days with very low recovery. The reason for the samewas the adverse financial health of the Company as the overhauling work could not be takenup. Further due to flood that erupts during May 2015 had extensively damaged standingSugarcane crop. The Crushing Operations for the season 2015-16 started on 16th March 2016which was continued for 15 days compared to the last year's 71 days. Performance of theSugar Division compared to last year is as under:-
|DETAILS ||2015-16 ||2014-15 |
|Start of Crushing Season ||16.03.2016 ||12-12-2014 |
|Close of Crushing Season ||30.03.2016 ||20-02-2015 |
|Cane Crushed (in lacs Qtls) ||0.75 ||5.93 |
|Recovery (%) ||6.63 ||8.35 |
|Sugar Production (in Qtls) ||4874 ||49504 |
It is fact that all agriculture products are wholly dependent on nature. There washeavy rain and the total area was under flood which had damaged the standing SugarcaneCrop extensively. Further due to late running of Sugar Mill the Sugarcane dried up andsupply of Sugarcane from captive farms were less compared to last year.
As stated last year that the Sugar Industry passed from a very pathetic situation forlast 4-5 years. It was sustaining losses consecutively in last 4-5 years which hasjeopardized the financial health of the industry. One of the main factors behind the severlosses were very low ex-mill prices. The mills were unable to recover even the cost ofproduction which causes huge losses. Further due to heavy stock of sugar with mills forlast 6 years in a row the situation was worsen which increased the outstanding of canegrowers. This adverse acute financial position did not permit the overhauling of millseven in spite of best efforts of the management. Due to certain measures taken by CentralGovernment the ex-Mills prices were marginally improved but still it was below the cost ofproduction. This had huge adverse impact on the financial health of the Sugar industry.
Internal Control Systems: The Company has adequate system of internal control tosafeguard company's assets. All the transactions are properly authorised recorded andreported to the management. The Company also has adequate budgetary control system andactual performance is monitored by the management consistently.
Human Resources: The Company believes that its employees are a vital resource inthe current business environment. The Company is enjoying good and congenial industrialrelations at all the Divisions of the Company. As on 31st March 2016 the total permanentemployees were 40 Nos.
WHISTLE BLOWER POLICY:
To ensure that the activities of the Company and its employees are conducted in a fairand transparent manner by adopting high standards of professionalism honesty integritythe company has adopted a vigil mechanism policy. This policy is explained in corporateGovernance and also posted on company's website.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The company has been addressing various risks impacting the company and the policy ofthe Company on Risk Management has been established. The Risk Management policy has beenuploaded on the website of the company.
DIRECTORS AND COMMITTEES
In accordance with the provisions of the Companies Act 2013 Mr. Sunil K. Khaitan (DIN00127698) and Mrs. Sulekha Dutta (DIN 07114240) retire by rotation and being eligibleoffer themselves for reappointment.
Pursuant to the provisions of the Companies Act 2013 and clause 49 of the listingagreement the Board has carried out annual performance evaluation of its own performancethe directors individually as well as evaluates the working of its Audit Nomination &Remuneration and Stakeholders Committee. The method of evaluation has carried out beenexplained in Corporate Governance Report.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGEMRIAL PESONNEL (KMP) / EMPLOYEES
The information required pursuant to Section 197 read with Rules of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company and Directors is furnished here under:-
|Sl. No ||Name ||Designation ||Remuneration Paid Fy. 2015-16 ||Remuneration Paid Ey. 2014-15 ||Increase in Remuneration from previous year ||Rab/Times permetion of Emplyoee Remuneration |
|1. ||Surendra Bafna ||Executive Director ||8.87 lacs (includ LTA 1.26 lac) ||7.06 lacs || ||8 Times |
|2. ||Sulekha Dutta ||CS/ Director (KMP) ||1.42 lacs ||0.06 lacs || ||1.3 Times |
The Board has on the recommendations of Nomination & Remuneration Committee frameda policy of selection/appointment of Directors Senior Management personal and theirremunerations. The remuneration policy is stated in Corporate Governance Report.
During the year four (4) Board meetings and one independent directors' meeting wereheld. The provisions of the Companies Act 2013 and of listing agreement were adhered towhile considering the time gap between two meetings.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and accessing to the information andexplanation obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013.
1. That in the preparation of the Annual Accounts the applicable accounting Standardshad been followed except AS-22.
2 That the Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the loss of the company for the period.
3. That the Directors have taken proper and sufficient care for preventing anddetecting fraud and other irregularities.
4. That the annual financial statements have been prepared on a going concern basis.
5. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
RELATED PARTY TRANSACTIONS
There were no contracts or arrangements entered into by the company in accordance withthe provisions of Section 188 of the Companies Act 2013. However there were no materialrelated party transactions in terms of clause 49 of the listing agreement. All materialrelated party transactions that were entered into during the financial year were on an armlength basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the company with promoters Directors Keymanagerial personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
All related party transactions are placed before the Audit Committee as also the Boardfor approval.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website. None of the Directors has any pecuniary relationship or transactionsvis--vis the company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the company and its future operations.
The Company had not accepted / renewed any deposit during the year under review andthere was no outstanding deposits.
M/s O. P. Sharma & Associates Chartered Accountants retire at the ensuing AnnualGeneral Meeting and are eligible for re-appointment.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rule 2014 the company hadappointed M/s N K & Associates (CP No 3725) Company Secretaries to undertake theSecretarial Audit of the company. The Secretarial Audit Report is annexed herewith asAnnexure 1'.
M/s S. Mandal & Co. (FR No.314188E) Chartered Accountants perform the duties ofinternal auditors of the company and their report was reviewed by the Audit Committee.
Your Board has appointed M/s A B & Co. (Reg. No.00256) qualified Cost Accountantsto carry out Cost Audit of the Cost Accounts maintained by the Company in respect of SugarDivision. This appointment has to be made within 6 months from beginning of financialyear. As such an application has already been forwarded to the Central Government toapprove the appointment for the current financial year.
CHANGE IN DIRECTORS AND KEY MANAGERIALS PERSONNEL
During the year Mr. M. K. Jalan resigned from Directorship of the Company. The Boardnoted its appreciation for his guidance during his tenure as Director.
CORPORATE GOVERNANCE REPORT
As per Clause 49 of the Listing Agreement annexed to the said report a separate reporton Corporate Governance as a part of the Annual Report and the Auditors' Certificate oncompliance is annexed to the said report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGOING
The information on conservations of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure 2.'
EXTRACT OF ANNUAL RETURN
The details for forming part of the extract of Annual Return in Form MGT 9 is annexedas Annexure 3'.
PARTICULARS OF EMPLOYEES
The information required pursuant to section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnels) Rule 2014 in respect of employeesof the Company is as follows:-The company has one Executive Director who has been paid Rs.8.87 lacs and to Company Secretary Rs. 1.42 lacs. Due to financial constraints no increasewas made in salary/wages except increase in VDA as per Agreement with the unions. Rs. 1.40lac was paid as sitting fees to the Directors.
The particulars of the employees who are covered by the provisions contained in Rule5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnels) Rule 2014 are (a) Employed throughout the year NIL (b) Employed part ofthe year NIL. The remuneration paid to all key Managerial Personnel was inaccordance with remuneration policy adopted by the company.
IMPAIRMENT OF ASSETS
Due to financial constraints and to reduce the liability of the Company to some extentyour directors have to undertaken impairment of company's agriculture land throughsale/long term lease.
FINANCIAL VIABILITY OF COMPANY
Although the Ex-Mill prices have been increased but still it did not cover even cost ofproduction. Due to unsatisfactory condition of sugar industry for last 4-5 years specially2014-15 which has jeopardized the financial position of the company and effected theoperation of sugar mill. However the company is exploring various avenues for revival ofthe company.
Due to miserable financial condition the company could not pay the various dues i.e.service tax excise duty gratuity wages to the workers etc and other dues.
Deferred Tax Assets represent brought forward balance for earlier years which shall bewritten off in due course. The company is taking steps to get the balance confirmationfrom debtors /creditors loans deposits etc.
The Company in taking all necessary steps to filfull the requirement of Environment(Protection) Act 1986 the Water (Prevention) & control of pollution) Act 1974 &the Air (Prevention & Control of Pollution) Act 1981.
Well supported from all quarters and therefore your directors wish to place on recordtheir sincere appreciation for the support and co-operation from Employees suppliersGovernment of West Bengal cane growers depositors and the shareholders.
| ||For and on behalf of the Board |
|Kolkata ||Sunil K. Khaitan Chairman |
|The 6th June 2016 ||(DIN 00127698) |