INCLUDING MANAGEMENT DISCUSSION & ANALYSIS REPORT
TO THE MEMBERS KHAITAN (INDIA) LIMITED
Your Directors present their Eightieth Annual Report together with the Audited Accountsfor the year ended 31st March 2017.
|financial results ||2016-2017 ||2015-2016 |
|Sales & Operating Income were Profit/(Loss) for the year ||1574.09 ||912.21 |
|was From which is deducted/added ||485.49 ||(579.57) |
| Depreciation ||(214.01) ||(176.05) |
| Income Tax relating to earlier year || ||(0.01)) |
|Leaving a Balance of To which is added : ||271.48 ||(755.83) |
|- Profit/Loss Brought Forward from previous year Making an available Surplus/Deficit of Which is Carried ||(2166.01) ||(1410.17) |
|For ward to Next Year ||(1894.53) ||(1410.17) |
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. 209.69 lacs compared tothe last years Rs. 309.94 lacs. During the end of the year 2016-17 your company hasalso started trading in fans appliances and other electrical items the turnover of thisbusiness is Rs. 700.16 lacs.
Sugar Division: The crushing of sugarcane was only 0.67 lacs quintals compared tolast years 0.75 lacs quintals. The Sugar Mill could start only at fag end of thesugar season and could operate only for 19 days with very low recovery. The reason for thesame was the adverse financial health of the Company as the overhauling work could not betaken up. Further due to flood that erupts during May 2016 had extensively damagedstanding Sugarcane crop.
The Crushing Operations for the season 2016-17 started on 19th December 2016 whichcontinued for 19 days compared to the last years 15 days. Performance of the SugarDivision compared to last year is as under:-
|DETAILS ||2016-17 ||2015-16 |
|Start of Crushing Season ||19.12.2016 ||16.03.2016 |
|Close of Crushing Season ||06.01.2017 ||30.03.2016 |
|Cane Crushed (in lacs Qtls) ||0.67 ||0.75 |
|Recovery (%) ||7.18 ||6.63 |
|Sugar Production (in Qtls) ||4709 ||4980 |
It is fact that all agriculture products are wholly dependent on nature. There washeavy rain which had damaged the standing Sugarcane Crop extensively
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 thesevere losses were very low exmill prices. The mills were unable to recover even the costof production 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 companys assets. All the transactions are properly authorised recordedand reported 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 2017 the total permanentemployees were 29 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 companys 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 Mrs. Sulekha Dutta (DIN-07114240) retire by rotation and being eligible offer herself for reappointment.
INCLUDING MANAGEMENT DISCUSSION & ANALYSIS REPORT BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulation 2016 the Board has carried out annual performanceevaluation of its own performance the directors individually as well as evaluates theworking of its Audit Nomination & Remuneration and Shareholders RelationshipCommittee. The method of evaluation has carried out been explained in Corporate GovernanceReport.
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. 2016-17 ||Remuneration Paid Ey. 2015-16 ||Increase in Remuneration from previous year ||Rab/Times permetion of Emplyoee Remuneration |
|1. ||Surendra Bafna (resigned w.e.f 30.11.2016 ||Executive Director ||3.83 lacs ||8.70 lacs (Including (LTA 1.26 Lac) ||-- ||Comparison not possible |
|2. ||Sulekha Dutta ||CS/ Director (KMP) ||1.42 lacs ||1.42 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 meetingwere held. The provisions of the Companies Act 2013 and of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2016 were adhered to while considering the time gapbetween two meetings.
directors responsibility statement
Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm that:
a) in the preparation of the annual Financial Statements for the year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) they 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 the financial year and of the loss ofthe company for the same period;
c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down proper internal financial controls (IFC) in the company that areadequate and were operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and these are adequate and are 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 SEBI (Listing Obligations and DisclosureRequirements) Regulation 2016. All material related party transactions that were enteredinto during the financial year were on an arm length basis and were in the ordinary courseof business. There are no materially significant related party transactions made by thecompany with promoters Directors Key managerial personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.
All related party transaction are placed before the Audit Committee and also the Boardfor approval.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website. None of the Directors has any pecuniary relationship ortransactions vis-a-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 (FRN 500128N) the StatutoryAuditor of the company were appointed to conduct the audit of the company till conclusionof the forthcoming Annual General Meeting.
The Board vide its resolution dated 18th August 2017 has recommended the appointment ofM/s V K Tulsyan & Co. LLP Chartered Accountants Kolkata (FRN 326740E / E300015)subject to approval of shareholders at the Annual General Meeting.
To comply with provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2016 it is proposed to appoint M/s VK Tulsyan &Co. LLP Chartered Accountants Kolkata (FRN 326740E/E300015) as Statutory Auditors for aperiod of 5 continuous years from April 01 2017 to March 31 2022. The tenure of theiroffice will commence from the conclusion of the 80th Annual General Meeting till theconclusion of the 85th Annual General Meeting of the Company however their appointmentin 80th Annual General Meeting shall be as per the process laid down under the CompaniesAct 2013 and rules made there under and subsequent ratification at every Annual GeneralMeeting.
If appointed in 80th Annual General Meeting M/s V K Tulsyan & Co. LLP CharteredAccountants Kolkata (FRN 326740E/E300015) shall be responsible for Audit during the fivefinancial years 2017-18 2018-19 2019-20 2020-21 and 2021-22 as Statutory Auditors ofthe Company.
As per Regulation 33 of Listing Regulations Limited Review Report has to be issued byStatutory Auditors and hence Statutory Auditors to
be appointed in 80th Annual General Meeting for the financial year 2017-2018 isauthorised to do the Limited Review for the quarterly or half yearly or such period as maybe prescribed from time to time.
M/s V K Tulsyan & Co. LLP Chartered Accountants Kolkata (FRN 326740E/E300015)has confirmed their willingness and eligibility under the provision of the Companies Act2013 to be as statutory auditors of the Company which is subject to shareholders'approval. SECRETARIAL AUDITORS
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 Ms. Puja Agarwal (CP No. 14637) Company Secretary in Practice to undertake theSecretarial Audit of the company. The Secretarial Audit Report is annexed herewith asAnnexure 1. The observations of Secretarial Auditor are self explanatory. INTERNALAUDITORS
M/s S. Mandal & Co. (FR No.314188E) Chartered Accountants performs 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 at the beginning of each financial year. As suchan application has already been forwarded to the Central Government to approve theappointment for the current financial year.
CHANGE IN DIRECTORS AND KEY MANAGERIALS PERSONNEL
In accordance with the provisions of the Companies Act 2013 Mrs. Sulekha Dutta (DIN-07114240) retires by rotation and being eligible offer herself for reappointment.
During the year the following directors were appointed:
Mr. Anil Kumar Jain was appointed as an Additional Independent Director of the companyw.e.f 06.06.2016.
Mr. Sunay Krishna Khaitan was appointed as an Additional Director of the company w.e.f12.11.2016.
Mr. Srawan Kumar Jajodia was appointed as an Additional Independent Director of thecompany w.e.f 12.06.2017.
Mr. Shiv Kumar Bajaj who was appointed as an Additional Director w.e.f 12.11.2016resigned w.e.f 30.03.2017.
During the year Mr. Sunil K Khaitan resigned from the Board w.e.f 12.08.2016 Dr.V KRungta resigned from the Board w.e.f 12.08.2016 and Mr S Bafna resigned from the Boardw.e.f 30.11.2016. The Board noted its appreciation for his guidance during his tenure asDirector.
CORPORATE GOVERNANCE REPORT
As per SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 annexedto the said report a separate report on Corporate Governance as a part of the AnnualReport and the Auditors' Certificate on compliance 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.' EXTRACTOF 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 Personals) Rule 2014 in request of employeesof the Company is as follows:-
The company has one Executive Director who has been paid Rs. 3.83 lacs and to CompanySecretary Rs. 1.42 lacs.
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 Managerial Personal)Rule 2014 are (a) Employed throughout the year - NIL (b) Employed part of the year - NIL.
The remuneration paid to all key managerial Personnel was in accordance withremuneration 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 land through sale/long termlease of the company's agricultural land.
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 specially2015-16 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 measurable financial condition the company could not pay the various dues i.e.service tax gratuity wags to the workers premium for LIC Group Gratuity Scheme etc andother 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 confirmation from debtors /creditorsloans deposits etc.
The company has been well supported from all quarters and therefore your directors wishto place on record their sincere appreciation for the support and co-operation fromEmployees supplies Government of West Bengal cane growers depositors and theshareholders.
For and on behalf of the Board
The 18th August 2017
|Sunay K. Khaitan ||Anil Kumar Jain |
|(DIN 07585070) ||(DIN 07524177) |