To the Members of M/s Kkalpana Industries (India) Limited
The Board of Directors has pleasure to present the 35thAnnual Report on the performance of the Company together with the Audited Statement ofAccounts for the year ended March 31 2020.
Summarized Financial Results
(Rs. In Lacs)
| ||Standalone ||Consolidated |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Net Turnover and other Income ||176221.02 ||202082.84 ||175741.92 ||199479.35 |
|Profit before Depreciation Financial Costs & Tax ||8788.6 ||11433.63 ||8737.55 ||11764.11 |
|Less : Depreciation ||1215.25 ||1647.35 ||1221.70 ||1667.14 |
|Financial Costs ||4540.74 ||5743.98 ||4541.75 ||5994.39 |
|Profit before Tax ||3032.61 ||4042.29 ||2974.10 ||4102.58 |
|Less : Provision for Tax ||(31.18) ||1480.54 ||(48.38) ||1501.24 |
|Profit After Tax ||3063.79 ||2561.75 ||3022.48 ||2601.34 |
|Add: Profit brought forward from previous year. ||20434.27 ||18144.26 ||20353.98 ||18022.7 |
|Non Controlling Interest ||- ||- ||- ||1.69 |
|Amount Available for Appropriation ||20434.27 ||20706.01 ||20353.98 ||20625.73 |
|Appropriation || || || || |
|Proposed final dividend on Equity Shares ||(225.78) ||(225.78) ||(225.78) ||(225.78) |
|Corporate Dividend Tax ||(45.96) ||(45.96) ||(45.96) ||(45.96) |
|Transfer to General Reserve ||- ||- ||- ||- |
|Surplus carried to Balance Sheet ||23226.34 ||20434.27 ||23104.73 ||20353.98 |
Your directors have pleasure in recommending payment of dividend @ 6%(Rs. 0.12p per equity share of face value Rs. 2/- each) to the equity shareholders of theCompany for the Financial Year ended 31st March 2020. The total outgo will beRs. 112.89 lacs if declared by the members at the ensuing Annual General Meeting.
The World Health Organization declared a global pandemic of thecoronavirus disease (Covid-19) on 11th February 2020. The impact of thedisease is being felt in India as well and the central government declared a PAN Indialockdown on 24th March 2020. The lockdown has been extended several timessince then. The effect of coronavirus (Covid-19) outbreak on public life and industries isalso affecting the demand for the company's product in the country across severalmarket segments.
However your company started operations in a phased manner withreduced manpower. Gradually operations are being stepped up. Your company fully followedthe guidelines issued by the Central Government for reopening of manufacturingunits/offices. Your company also opened its head office Delhi and Mumbai offices keepingin view the employee safety first approach and maintained social distancing and otherhealth & safety norms to minimize the spread of disease.
While the pandemic is expected to have negative impact on the financialperformance of company in the current year the situation in the country still remainsuncertain and therefore it is difficult to quantify the magnitude and duration of suchimpact at this stage. However preliminary estimates based on sales trend in the pastweeks and through interaction with your company's customers indicate possiblysizeable reduction in turnover & profitability in respect of the financial year2020-21. The company's focus on liquidity supported by strong balance sheet &cost optimization initiatives would help the company in navigating near term challenges inthe demand environment.
Your Directors are of the firm view that your company will be able toretrieve the loss in sales revenue within shortest possible time maybe within 2021-22.They do not feel that the ongoing liquidity crisis will have such a negative effect thatit will ultimately incarcerate the very survival of your company.
Because of slowdown in demand your directors feel that yourcompany's approach in operational areas should be very effective. The year 2020-2021is very challenging particularly because world economic scenario will definitely begloomy and India will also face headwinds in its economy. Further the impact of Covid-19on the world economy will also have impact on the domestic economy.
Operations and State of Company's Affairs
During the year under review your Company achieved total revenue ofRs. 1762.21 Crores as against total revenue of Rs. 2020.83 Crores in the previousfinancial year. The Profit after Tax is Rs. 30.64 Crores as against Rs. 25.62Crores in theprevious year.
Your directors feel that your company's Research and Developmentwhich is of a very high standard will enable your company to make inroads in new marketsboth domestic and international from 2021-22.
There is no change in the Share Capital of the Company. As on 31stMarch 2020 the paid up equity share capital of the company stood at Rs. 1881.46 lacsdivided into 94072930 equity shares of face value Rs. 2/- each.
Transfer to General Reserve
The Board of Directors decided to retain the entire amount of profitsfor 2019-20 in the retained earnings.
Transfer of Amount to Investor Education and Protection Fund
Dividend for the financial year ended 31st March 2013which remains unpaid or unclaimed for a period of seven years will be due for transfer toInvestor Education and Protection Fund (IEPF) on 25th October 2020. Memberswho have not yet enchased their dividend warrants for the financial year ended 31stMarch 2013 or any subsequent financial years are requested to lodge their claims withoutany delay. Pursuant to the provisions of the Investor Education and Protection Fund(Uploading of information regarding unpaid and unclaimed amounts lying with companies)Rules 2012 the Company has already filed the necessary form and uploaded the details ofunpaid and unclaimed amounts lying with the Company as on the date of last AGM(i.e.27.09.2019) with the Ministry of Corporate Affairs. The related data is available onthe Company's website.
Your Company has not accepted any deposits from public and /or membersduring the year under review within the meaning of Section 73 of the Companies Act 2013read with the Companies (Acceptance of Deposit) Rules 2014 and accordingly as of 31stMarch 2020 there were no unpaid fixed deposits with the Company.
CRISIL has reaffirmed vide its letter dated 05th July2020 the Credit Rating of A- (Long Term Rating) and A2+ (Short Term Rating) given to thecompany.
Research and Development
Your Company recognizes that Research & Development("R&D") plays a vital role in supporting operations as well as futuregrowth. Your Company focuses its attention on development of Products that have wideindustrial applications particularly in cable piping packaging and footwear industries.Through R&D it endeavors to increase production lower cost of production and lowerwastage.
Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 of the Companies Act2013 Mr. Rajesh Kumar Kothari (DIN -02168932) Whole Time Director of the Companyretires by rotation at the forthcoming Annual General Meeting and being eligible hasoffered himself for re-appointment.
Mrs. Mamta Binani (DIN: 00462925) Independent Director of the Companyhas completed the term of 5 consecutive years of holding office as Independent Director ofthe Company and being eligible the Board has recommended her re-appointment for period of5 consecutive years pursuant to Section 149(10) of the Companies Act 2013. TheNomination and Remuneration Committee has also recommended on similar lines. She hasoffered herself for re-appointment as Independent Director for a term of 5 consecutiveyears from 29.09.2020 to 28.09.2025 at the ensuing Annual General Meeting. It is alsoinformed that she has submitted the requisite declarations and confirmations pursuant toSection 164 and 149(7) of the Companies Act 2013 ("the Act") Rules 6(1) and6(2) of the Companies (Appointment and Qualification of Directors) Rules 2014 ("theRules") Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("the SEBI Listing Regulations") as amended from time totime Circular No. LIST/COMP/14/2018-19 dated 20.06.2018 issued by BSE Ltd. and has alsogiven her consent to act as Independent Director of the Company for a further period of 5years in compliance with Section 149(10) of the Act details whereof has also been statedin the Statement pursuant to Section 102 of the Act annexed to the Notice convening the35th Annual General Meeting. The Board of Directors of your company hasaccordingly sought approval from members by way of special resolution in accordancewith Item No. 5 of the Notice convening this Annual General Meeting.
The necessary disclosures about Directors required pursuant toRegulation 36 of the SEBI Listing Regulations and Clause 1.2.5 of the SecretarialStandard are annexed to the Notice of 35th AGM forming part of the AnnualReport.
Mrs. Ramya Hariharan (DIN: 07824452) who was appointed as theAdditional Director w.e.f. 11thFebruary 2019 was appointed as IndependentDirector of the Company for a period of 5 years by the members of the company at thelast Annual General Meeting of the Company held on 27.09.2019. Further Mr. Dev KrishnaSurana (DIN: 08357094) was also appointed as Additional Director w.e.f 11thFebruary 2019 was also appointed as Whole Time Director of the Company for a period of 5years w.e.f. 28th May 2019 by the members of the Company at the last AnnualGeneral Meeting of the Company held on 27.09.2019.
Key Managerial Personnel
The Board has the following Key Managerial Personnel as on 31.03.2020:Mr. Narrindra Suranna- Chairman and Managing Director & CEO Mr. Dev Krishna SuranaWhole Time Director Mr. Rajesh Kothari- Whole Time Director Dr. Pranab Ranjan Mukherjee-Whole Time Director Independent Directors As on 31.03.2020 your company had followingIndependent Directors: Mr. Samir Kumar Dutta Mrs. Mamta Binani Mrs. Ramya Hariharan
None of the Independent Directors except Mrs. Mamta Binani (DIN:00462925) is due for re-appointment.
The Board is of the opinion that the Independent Directors of theCompany possess requisite qualifications experience and expertise in their respectivedesignated fields.
The Independent Directors of the Company have undertaken requisitesteps towards the inclusion of their names in the data bank of Independent Directorsmaintained with the Indian Institute of Corporate Affairs (IICA) in terms of Section 150of the Companies Act 2013 (including any statutory modifications amendments/re-enactments if any) read with Rule 6 of the Companies (Appointment and Qualification ofDirectors) Rules 2014 as amended from time to time. Cessation Mr. Ramakant Mishra (DIN:06882372) Independent Director of the Company left for his heavenly abode on 27.02.2020.
Dr. Pranab Ranjan Mukherjee (DIN: 00240758) Whole Time Director of theCompany resigned from his office wef 30th June 2020.
None of the Directors are disqualified or debarred by SEBI or any otherstatutory authority from continuing office as Director
Declaration by Independent Directors
All Independent Directors of the Company have given declarations underSection 149(7) of the Act that they meet the criteria of Independence as laid down underSection 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. Interms of Regulations 25(8) of the Listing Regulations the Independent Directors haveconfirmed that they are not aware of any circumstance or situation which exists or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence. Theyhave also confirmed respectively pursuant to Circular No. LIST/COMP/14/2018-19 dated20.06.2018 issued by BSE Ltd. pertaining to enforcement of SEBI Orders regardingappointment/ re-appointment of Director/Independent Director that they are not debarredfrom holding office of Independent Director/ Director by virtue of any SEBI order or anyother statutory authority and are not disqualified from being continuing as IndependentDirectors in terms of Section 164 of the Act. They have also confirmed respectivelytheir compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualificationof Directors) Rules 2014 ("the Rules") as amended from time to time withrespect to registration with the Databank of Independent Directors maintained with IndianInstitute of Corporate Affairs.
Board membership Criteria and list of Core Skills/ expertise/competencies identified in the context of the business
The Board of Directors are collectively responsible for selection ofmember on the Board. The Nomination and Remuneration Committee of the Company followsdefined criteria for identifying screening recruiting and recommending candidates forselection as a Director on the Board. The criteria for appointment to the Board include:composition of the Board which is commensurate with the size of the Company itsportfolio geographical spread and its status as a listed Company; desired age anddiversity on the Board; size of the Board with optimal balance of skills and experienceand balance of Executive and Non-Executive Directors consistent with the requirements oflaw; professional qualifications expertise and experience in specific areas of relevanceto the Company; balance of skills and expertise in view of the objectives and activitiesof the Company; avoidance of any present or potential conflict of interest; availabilityof time and other commitments for proper performance of duties; personal characteristicsbeing in line with the Company's values such as integrity honesty transparencypioneering mindset.
The Board has identified the following skills/ expertise/ competenciesfundamental for the effective functioning of the Company which are currently availablewith the Board:- Leadership -experience of running large enterprise leadingwell-governed organization with an understanding of organizational systems and strategicplanning and risk management understanding of global business dynamics across variousgeographical markets industry verticals and regulatory jurisdictions. Strategy andplanning-Appreciation of long-term trends strategic choices and experience in guiding andleading management teams to make decisions in uncertain environments Governance-Experience in developing governance practices serving the best interests ofall stakeholders maintaining board and management accountability building long-termeffective stakeholder engagements and driving corporate ethics and values Financeand Accounting Experience Experience in handling financial management along with anunderstanding of accounting and financial statement Understanding use of Digital /Information Technology Understanding the use of digital / Information Technology acrossthe value chain ability to anticipate technological driven changes & disruptionimpacting business and appreciation of the need of cyber security and controls across theorganization Sales and Marketing-Experience in developing strategies to grow salesand market share build brand awareness and equity and enhance enterprise reputation.
The following are the details of respective core skills of BoardMembers:-
|Name of Director ||Core Skill |
|Mr. Narrindra Suranna (DIN: 00060127) ||Leadership |
| ||Strategy and Planning |
| ||Finance & Accounting Experience |
|Mr. Dev Krishna Surana (DIN: 08357094) ||Leadership |
| ||Strategy and Planning |
| ||Understanding use of Digital/ Information Technology |
| ||Sales and Marketing |
|Mr. Rajesh Kumar Kothari (DIN: 02168932) ||Leadership |
| ||Strategy and Planning |
| ||Finance & Accounting Experience |
| ||Sales and Marketing |
|Dr. Pranab Ranjan Mukherjee (DIN: 00240758) ||Leadership |
| ||Understanding use of Digital/ Information Technology |
| ||Sales and Marketing |
|Mr. Samir Kumar Dutta (DIN: 07824452) ||Governance |
| ||Finance and Accounting Experience |
|Mrs. Mamta Binani (DIN: 00462925) ||Governance |
| ||Understanding use of Digital/ Information Technology |
|Mrs. Ramya Hariharan (DIN: 06928511) ||Governance |
| ||Finance and Accounting Experience\ |
| ||Understanding use of Digital/ Information Technology |
|Mr. Ramakant Mishra (DIN: 06882372) ||Governance |
|till 27.02.2020 ||Finance and Accounting Experience\ |
| ||Understanding use of Digital/ Information Technology |
Committees of the Board
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
The details of the Committees along with their respective compositionnumber of meetings and attendance at the meeting are provided in the Corporate GovernanceReport which also forms part of this Annual Report.
Code of Conduct for Directors Senior Management Personnel andEmployees
Your Company has adopted a Code of Conduct ("the Code" or"CoC") for its Directors and Senior Management. In terms of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 all Directors and SeniorManagement Personnel have affirmed compliance with respective the code. The CEO andManaging Director has also affirmed and certified the same which certification isprovided in the Report on Corporate Governance. It also has in place an HR Policy for itsemployees at all levels.
Familiarization Programme for Independent Directors
The Company had organized familiarization programmes for theIndependent Directors as per the requirement of the Companies Act 2013 and Regulation25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and itconducts familiarization programme from time to time for its Independent Director. Allindependent directors inducted into the Board attended the familiarization programme. TheCompany has familiarized the Independent Director with the company their roles rightsresponsibilities in the company nature of the Industry in which the company operates andbusiness model of the company. The Company endeavors to update the Independent Directorsregarding the company's projects new ventures if any opening of new office sitesor manufacturing units shutdown/ closure of any manufacturing unit. It also keeps theIndependent Directors informed of any sluggishness in finance/ liquidity problems if any.The suggestions received from Independent Directors are taken note of and informed to theChairman and Managing Director who takes suitable measures if required on thesuggestions of the Independent Directors. Further at the time of the appointment of anIndependent Director the company also issues a formal letter of appointment outlininghis/her role function duties and responsibilities. The format of the letter ofappointment is available under the head draft letter of appointment on our website(www.kkalpanagroup.com/investor-relations.php)
The Board of Directors has devised a policy for performance evaluationwhich includes criteria for performance evaluation. It reviews the performance evaluationcriteria annually in accordance with Regulation 4(2)(f)(ii)(9) of SEBI (listingObligations and Disclosure Requirements) Regulations 2015 as amended from time to time.The Nomination and Remuneration Committee accordingly carries out an annual evaluation ofBoard's performance and the performance of its Committees as well as IndividualDirectors (both Executive and Non executive/ Independent Directors) in accordance withSection 178(2) of the Companies Act 2013. This involves receiving inputs from allCommittee members. The Board thereafter reviews and takes on record the performanceevaluation done by the Nomination and Remuneration Committee. The Board evaluates theperformance of Independent Directors pursuant to Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with Schedule IV to theCompanies Act 2013.
Pursuant to the provisions of the Section 178(2) Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the formalannual evaluation was carried out for the Board's own performance its committees& Individual Directors.
A structured performance evaluation form was prepared after taking intoconsideration inputs received from the Directors and on the basis of the evaluationcriteria laid down by Nomination and Remuneration Committee and as reviewed and approvedby the Board of Directors covering various aspects of the Board's functioningincluding adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligations and governance theeffectiveness of its processes information flow and functioning.
A separate meeting of Independent Directors is held to review theperformance of Non-Independent Directors the performance of the Board of Directors andthe performance of Chairman. The Directors evaluation was broadly based on parameters suchas meeting the expectation of stakeholders guidance and review of corporate strategyrisks participation Director's contribution to the Board of Directors and Committeemeetings including preparedness on the issues to be discussed as well as meaningful andconstructive contribution and inputs during the meeting and attendance at Board /Committee meetings interpersonal skills. The performance evaluation of the Chairman ofthe Company was undertaken by the Independent Directors taking into account the views ofExecutive Directors and Non Executive Directors. The Chairperson is evaluated on the keyaspects of their role their contribution to ensuing corporate governance leadershipqualities decision implementation understanding of market and industry scenario etc. TheIndependent Directors also assessed the quality quantity and timeliness of flow ofinformation between the Company's management and the Board.
Observation of the Board in regard its own performance
In regard to Financial Year ended 31st March 2020 theBoard of Directors of the Company after an exhaustive discussion on the captioned subjectmatter was of the opinion that operationally the Board as whole had issued effectiveinstructions from time to time and the same were duly carried out. The Company Secretaryof the Company issues on a quarterly basis the Consolidated Compliance Certificatebased on the reports submitted by the Unit/ Departmental Heads. The same is reviewed andtaken on record by the Board
Policy on Director's appointment and remuneration
The current policy is to have an appropriate mix of executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of 31st March 2020 the Board had 7members 4 of whom were executive and 3 were non-executive directors. As mentioned aboveMr. Ramakant Mishra (DIN: 06882372) Non Executive Independent Director of the Companyleft for his heavenly abode on 27.02.2020.
The Company's Policy for selection and appointment of Directorsand their remuneration is based on its Nomination and Remuneration policy which interalia deals with the manner of selection of the Directors and Senior Management Personneland such other matters as provided under section 178(3) of the Act and 19(4) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 including anyamendment thereto.
The policy of the Company on directors' appointment andremuneration including the criteria for determining qualifications positive attributesindependence of a director and other matters as required under section 178(3) ofCompanies Act 2013 is available on the company's website under the head Policy atwww.kkalpanagroup.com/investor-relations.php.
Your Directors affirm that the remuneration paid to the directors is asper the terms laid out in the Nomination and Remuneration Policy of the Company.
The Board met Six times during the financial year under review thedetails of which are given in the Corporate Governance Report which is annexed and forms apart of this report. The intervening gap between two consecutive Meetings was within theperiod prescribed under the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Directors' Responsibility Statement
Pursuant to the requirement clause (c) of sub-section (3) of Section134 of the Companies Act 2013 your Directors confirm that:
(a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) the directors had prepared the annual accounts on a going concernbasis; and
(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively ; and
(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
Statutory Auditors & Audit
The Statutory Auditors of the Company M/s. B. Mukherjee & CoChartered Accountants Kolkata (Firm Registration No. 302096E) were appointed asStatutory Auditors of the Company at the Annual General Meeting of the Company held on 23rdSeptember 2017 for a period of 5 consecutive years subject to ratification by membersof the Company at every subsequent Annual General Meeting. However as per the amendmentof Section 139 of the Companies Act 2013 which have been made effective from 07thMay 2018 ratification of the appointment of the auditor is no longer required. Hence thesame is not proposed at the ensuing Annual General Meeting. The Statutory Auditors havegiven a certificate of eligibility and consent that they are eligible and willing tocontinue as Statutory Auditors of your company for the Financial Year 2020-21.
Further the Auditors have confirmed that they have undergone the peerreview process of the Institute of Chartered Accountants of India (ICAI) and hold a validcertificate issued by the Peer Review Board' of ICAI. The Auditors' Reporton the accounts for the year ended 31st March 2020 does not contain anyqualification reservation adverse remark or observation.
Internal Auditors & Internal Audit
The Board of Directors of your Company has re-appointed M/s. DKD&Associates Chartered Accountants Kolkata (Firm Registration No.322657E) as InternalAuditors pursuant to the provisions of Section 138 of the Companies Act 2013 for thefinancial year 2020-2021 on the recommendation of Audit Committee. The Quarterly InternalAudit Report submitted by Internal Auditors during the Financial Year 2019-20 have beenreviewed by the Audit Committee and Board at their respective meetings and thesuggestions therein implemented to the extent possible.
Cost Auditors & Cost Audit
Pursuant to section 148 of the Companies Act 2013 and subject tonotification of rules thereunder the Board of Directors on the recommendation of theaudit committee has appointed M/s. D. Sabyasachi & Co. (Membership N0. 00369) CostAccountants Kolkata as the Cost Auditors of the Company for the financial year 2020-21.M/s. D. Sabyasachi & Co. have confirmed that their appointment is within theprescribed limits and they are free from any disqualifications as provided in section 141of the Companies Act 2013. The Cost Audit Report for the Financial Year 2019-20 does notcontain any qualification reservation adverse remark or observation
Secretarial Audit & Secretarial Audit
The Board had re-appointed Mr. Ashok Kumar Daga (Membership No.-FCS-2699 C.O.P No. 2948) Practicing Company Secretary to conduct Secretarial Audit for theFinancial Year 2020-21. The report of the Secretarial Auditors for the Financial Year2019-20 in Form MR-3 is annexed herewith as Annexure 1 to this report. The reportis self-explanatory and does not call for any further comments. The company does not haveany material subsidiary company and hence the provisions of Secretarial Audit for materialunlisted company pursuant to Regulation 24A of SEBI (listing Obligations and DisclosureRequirements) Regulations 2015 as notified by SEBI Circular No. CIR/CFD/CMD1/27/2019dated 08.02.2019 and inserted vide SEBI (Listing Obligations and Disclosure Requirements)(Amendment) Regulations 2018 is not applicable to your Company.
Annual Secretarial Compliance Audit
SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 08.02.2019 introduced thatlisted companies shall additionally on an annual basis require a check by PracticingCompany Secretary ("PCS") on compliance of all applicable SEBI Regulations andcirculars/ guidelines issued thereunder consequent to which the PCS shall submit areport to the listed entity. Mr. Ashok Kumar Daga (Membership No.-FCS- 2699 C.O.P No.2948) Practicing Company Secretary was appointed by the Board for the said purpose whohas since submitted his report to the Board which was place for consideration by Boardmembers at its meeting held on 29th June 2020 and subsequently submitted tothe Stock Exchange as per the requirement of the said circular. The Annual SecretarialCompliance Report issued by Mr. Ashok Kumar Daga (Membership No.-FCS- 2699 C.O.P No.2948) Practicing Company Secretary for the year ended 31st March 2020 doesnot contain any qualification reservation or adverse remark.
The SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 mandated the formulation of certain policies for all listed companies. All applicablepolicies are available under the head Policy on the Company'swebsite:www.kkkalpanagroup.com/investor-relations.php. The policies are reviewedperiodically by the Board and updated based on need and new compliance requirement.
Corporate Social Responsibility (CSR)
The Company has a Corporate Social Responsibility Committeeconstitution of which is detailed in the Corporate Governance Report forming part of thisReport. In compliance with Section 135 of the Companies Act 2013 read with Companies(Corporate Social Responsibility Policy) Rules 2014 as amended from time to time theCompany has adopted a CSR policy which is available under the head policy at:http://www.kkalpanagroup.com/investor-relations.php. The Annual Report on CSR expendituresfor the FY 2019-20 is annexed herewith and forms part of this report and marked as Annexure- 2.
Related party transactions
Your Company has formulated Policy on Related Party Transaction (RPT)which is available on Company's website www.kkalpanagroup.com. There were notransactions that required disclosure under section 134(3)(h) of the Companies Act2013in Form AOC-2 and hence your company has not provided any details of such related partytransactions. Further there are no material related party transactions during the yearunder review with the Promoters Directors or any Key managerial Personnel which may havea potential conflict of interest with the Company at large. All Related Party Transactionswere entered into by the company in its ordinary course of business and were at anarm's length. The Related Party Transactions for which Omnibus approval was grantedby the Audit Committee and Board of Directors of the Company at their respective meetingheld on 28.05.2019 were reviewed quarterly by the Audit Committee and Board of Directorsof the Company at their subsequent respective meetings.
Subsidiaries/ Joint Ventures / Associate Companies
M/s. Plastic Processors & Exporter Private Limited is a Subsidiaryof your Company and M/s Kkalpana Plastick Limited is the Associate company of yourcompany. During the Financial Year 2019-2020 M/s Plastic Processors and Exporter PrivateLimited became the wholly owned subsidiary of your Company. Further the Board at itsmeeting held on 28.10.2019 approved the incorporation of a Limited Liability Company as aSubsidiary of the Company in the name and style of M/s Kkalpana Plas Middeast (FZC) LLCunder the Laws of Sultanate of Oman however the project was decided to be shelved at theBoard's meeting held on 29.06/2020. Further at the meeting of Board of Directors ofthe Company held on 27.01.2020 the incorporation of Wholly Owned Subsidiary in the nameand style of M/s Kkalpana Plastic Reprocess Industries Middleeast FZE' in HamriyahFree Zone Sharjah United Arab Emirates was also approved. The financial position of M/sPlastic Processors & Exporter Private Limited (subsidiary) and M/s Kkalpana PlastickLimited (associate) is given in Form AOC- 1 and forms part of the report as Annexure3'. It may be noted that the operations have not yet commenced in thesubsidiaries/ projects that were approved to be incorporated during the FY 2019-20.
Your company was holding 99.99% of equity in the paid up capital of M/sPlastic Processors and Exporter Private Limited. However wef 18.02.2020 the same hasbecome the Wholly Owned Subsidiary of the Company. Your company also holds 36.23% ofequity in the paid up capital of M/s Kkalpana Plastick Limited.
Performance of Subsidiaries Associates and Joint Venture Companies andtheir contribution to the overall performance of the Company during the YEAR UNDER REVIEW
|Name of the Entity ||Share in Profit and Loss |
|Particulars ||PAT ||As a % age of Profit or Loss ||Amount |
| ||(Rs. In lacs) || ||(Rs. In Lacs) |
|Kkalpana Plastick Limited- Associate Company ||0.52 ||36.23% ||0.19 |
|Plastic Processors and Exporter Pvt Ltd - Subsidiary Company ||(41.50) ||100% ||(41.50) |
Change in nature of Business if any
There has been no change in the nature of business of the Company. YourCompany continues to be one of the leading manufacturers of Polymer compounds in theCountry.
Material changes and commitments affecting the financial position ofthe Company
There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year to which thefinancial statements relate and the date of the report.
Particulars of Loans Guarantees and Investments
The Company has not given loans guarantees or made investmentsexceeding sixty per cent of the aggregate of its paid-up share capital free reserves andsecurities premium account or one hundred per cent of its free reserves and securitiespremium account whichever is more as prescribed in Section 186 of the Companies Act2013.
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are provided in the financialstatement (please refer to Note 8 and 36 to the financial statement).
Risks and Concerns:
Risk factor is ingratiated to all business activities of all companiesthough in varying degrees and forms. As far as your company is concerned it has anapproved risk management policy by the Board of Directors. Risk evaluation and itsmanagement is ongoing process within your company and is periodically reviewed by theBoard of Directors of your company.
The main risks of your company are as under: Business risks
Your company has to face intense competition from unorganized sectorpertaining to plastic compounds. Further the raw material prices remain volatile. It isvery difficult to estimate the near future raw material cost. Technology risks Quality upgradation and product obsolation risks are intertwined with your company's businessmanagement. However the high standard of in-house research and development fortifies thetechnological risks to some extent. Financial risks
Currency war is looming on the horizon of global economy. This willmake the interest rates of banks rise progressively a factor which will squeeze marginrate of your company. Moreover it is feared that obtaining bank finance will also bedifficult because nearly all the Public Sector Banks (PSB) are already having large NPAs.Availability of finance will be a crucial factor for your company in the near future ifthe financial situations referred above do not take a positive turn in the country.
Risk Management Policy
The Board takes responsibility for the overall process of riskmanagement throughout the organization. In terms of requirement of the Companies Act2013 the Company has developed and implemented the Risk Management Policy and the AuditCommittee of the Board reviews the same periodically. The Company's business unitsand corporate functions address risk through an institutionalized approach aligned toCompany's objective. This is further facilitated by Internal Audit which is reviewedby the Board.
Significant and material orders passed by the regulators
During the year under review no significant and material orders werepassed by the regulators or courts or tribunals impacting the going concern status and thecompany's operations:
Disclosure as per Sexual Harassment of Women at workplace (PreventionProhibition and Redressal)Act2013.
As per the requirement of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules made thereunder as amendedfrom time to time the Company has in place Internal Complaints Committee (ICC) which hasbeen setup to redress complaints regarding Sexual Harassment. The following is the summaryof Sexual Harassment complaints received and disposed off during the year under review:
|No. of Complaints at the beginning of the Financial Year (i.e. 01.04.2019) ||- ||Nil |
|No. of Complaints received during the Financial Year (i.e. 2019-20) ||- ||Nil |
|No. of Complaints disposed off during the Financial Year (i.e. 2019-20) ||- ||Nil |
|No. of pending at the end of the Financial Year (i.e. 31.03.2020) ||- ||Nil |
All employees (permanent contractual temporary & trainees) arecovered under the captioned Act. Your directors are pleased to state that workingatmosphere of your company is very healthy for male and female employees/ workers.
Particulars of Employees
None of the employees employed during the year was in receipt ofremuneration in aggregate of Rupees 10200000 or more per annum for the financial year2019-20 or Rs. 850000 or more per month for any part of the Financial Year as set outin the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014Therefore no such details have been provided as required under section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of managerial Personnel) Rules 2014.
The ratio of remuneration of each Director to the medianemployee's remuneration and other details in accordance with sub-section 12 ofSection 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 as amended forms part of this report and is markedas Annexure 4' Extract of Annual Return
Pursuant to the provisions of section 92(3) and 134(3)(a) of theCompanies Act 2013 (the Act') and rule 12(1) of the Companies (Management andAdministration) Rules 2014 extract of annual return is annexed and is marked as Annexure5'.
Pursuant to the requirement of the Section 177(9) of the Companies Act2013 the Company has established vigil mechanism which also incorporates a whistle blowerpolicy in terms of the SEBI Listing Regulations. Protected disclosures can be made by awhistle blower through an e mail or phone or letter to the chairman of Audit Committee.
Internal financial controls
The Board has adopted policies and procedures for governance of orderlyand efficient conduct of its business including adherence to the Company's policiessafeguarding its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures. The internal financial controls with reference to the Financial Statementsare commensurate with the size and nature of business of your Company. These have beendesigned to provide reasonable assurance with regard to recording and providing reliablefinancial and operational information complying with applicable Indian AccountingStandards (Ind AS) and relevant statures. The Internal Auditor and the Audit Committeereviews the Internal Financial Control system periodically.
Green Initiatives in Corporate Governance
Ministry of Corporate Affairs has permitted companies to sendelectronic copies of Annual Report notices etc. to the registered E-mail addresses ofshareholders. Your Company has accordingly arranged to send the electronic copies of thesedocuments to shareholders whose email addresses are registered with the Company/Depository Participant(s) wherever applicable. In accordance with the MCA and SEBIcirculars issued in view of the COVID-19 pandemic the Company can send only electroniccopies of notice of AGM and Annual Report on registered email addresses of theShareholders available with the company/RTA or the depositories. Hence physicalcirculation of notice of AGM and Annual Report is dispensed with; electronic circulationthrough E-mail shall suffice. Further the company has also availed the E-Mail updationfacility through SMS offered by NSDL and CDSL so as to reach the maximum number of memberspossible. In accordance with the MCA Circulars and SEBI Circulars in regards to norms tobe followed in view of COVID-19 your company has also adopted the facility of E-Voting atthe AGM in addition to the Remote E-Voting facility that is provided in accordance withprovisions of Section 108 of the Companies Act 2013 read with Rule 20 of the Companies(Management and Administration) Amendment Rules 2015 and Regulation 44 of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 as amended and SecretarialStandards on General Meetings (SS-2) issued by the Institute of Company Secretaries ofIndia.
Human Resources and Industrial Relations
The Industrial relations of the Company with its personnel hascontinued to be cordial and amicable. Your Directors acknowledge and appreciate theefforts and dedication of employees to the Company. Your directors wish to place on recordthe co-operation received from the Staff and Workers at all levels and at all units.
Particulars of Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo.
Your Company has directed its efforts to reduce energy costs byfocusing on energy savings through the best optimization of operations on day to daybasis. The Company has used fuels in appropriate mix to attain maximum savings.
As required under Companies (Accounts) Rules 2014 the particulars ofenergy conservation Technology Absorption and Foreign Exchange Earnings and outgo isgiven in the prescribed format as an Annexure to the Report and marked as Annexure6'.
Management's Discussion and Analysis Report
In accordance with Regulation 34 (e) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Management's Discussion andAnalysis Report for the year under review is presented in a separate section forming partof the Annual Report and marked as Annexure 7'.
The Company is committed to good corporate governance practices. Thereport on Corporate Governance for the financial year ended March 31 2019 as perregulation 34(3) read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of this Annual Report. The requisiteCertificate from the Statutory Auditors of the Company confirming compliance with theconditions of Corporate Governance is annexed to this Report and marked as Annexure8' Compliance with applicable Secretarial Standards
Your company has complied with the applicable provisions of SecretarialStandard-1 Secretarial Standard- 2 and Secretarial Standard-3 issued by the Institute ofCompany Secretaries of India.
Your Directors take this opportunity to thank the FinancialInstitutions Banks Central and State Government authorities Regulatory authoritiesStock Exchanges and all the various stakeholders for their continued co-operation andsupport to the Company. Your Directors also wish to place on record their appreciation toall of the Company's employees and workers at all level for their enormous efforts aswell as their collective contribution to the Company's performance.
| ||For and on behalf of the Board of Directors |
| ||NarrindraSuranna |
|Place: Kolkata ||(DIN: 00060127) |
|Date:29.06.2020 ||Chairman& Managing Director |