Kay Power & Paper Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting Twenty-Ninth Annual Report on the business and operations of your Company and Audited Financial Statement for the year ended 31st March 2020.

FINANCIAL RESULTS :

(Rs. in lacs)
2019-20 2018-19
Revenue from operations (Net) 2960.81 3962.63
Other Income 86.73 969.98
Total Revenue 3047.54 4932.61
Less: Expenses Cost of material consumed 1901.28 2638.34
Changes in Inventories of finished Goods & Work in Progress (15.87) (7.48)
Manufacturing Expenses 675.32 687.85
Employee Benefit Cost 119.04 128.32
Finance cost 19.72 131.13
Depreciation and amortization Expenses 84.02 83.06
Other Expenses 263.47 311.18
Total Expenses 3047.00 3972.40
Exceptional Items 0.00 952.03
Net Profit Before Tax 0.54 8.19
Less: Income tax provision 0.10 1.52
Net Profit After Tax 0.44 6.67

OPERATIONS :

During the year under review,the paper division produced 15108 M.T.of Kraft Paper as against 16673.61 M.T. in the previous year.

The operations of the company were closed from 22/03/2020 to 07/06/2020 due to the unprecedented COVID - 19 pandemic out break in the country and Govt. of India suddenly declared total lock down of all activities and it has impacted on the sales of the company. Further, it has also impacted on the availability raw material and supply of workforce. The operation of the company has been restarted partially from 08/06/2020.The full-fledged operations of the company will commence after joining of all the workforce and availability of raw material.

RESERVE AND SURPLUS

An amount of Rs. 0.44/- Lacs is proposed to be retained in the surplus:

STATEMENT ON RISK MANAGEMENT POLICY:

The management of the Company has duly adopted the Risk Management Policy as per the requirement of the Companies Act, 2013. Further, they had taken adequate care in its implementation by identifying various element of risk which may cause serious threat to the existence of the Company.

PROSPECTS:

The company has a well-established network of dealers all over western and southern India for sale of its paper products and continually working to strengthen the network and to get the new orders for Karft paper. The Company could sell its entire output without any difficulty. The Company produces wide range of Kraft paper from 80 gsm to 180 gsm, to meet the requirements of all the market segments.

Market for Kraft paper has revived and growing especially in the industrial packaging sector where craft paper is utilized. Plastic / wood packaging have been discouraged and hence the demand for packaging of Kraft paper is increasing day by day.

In view of the preventive measure and announcement of nation-wide lock down by the Government to contain the spread of COVID 19 pandemic, most of the industrial establishments had closed their operations from 24th March, 2020 onwards. The some industrial establishments are reopened after the easeof restrictions of lock down but some establishment are still closed. Our companys operations had also closed from 24th March, 2020 and restarted partially from 8th June, 2020.The Govt. of India have still not eased all the restrictions which were imposed on 24th March, 2020.

Under this scenario, the revenue of the financial year 2020-21 of the company will be affected adversely as well as the company is also facing the shortage of raw material and workforce. The company is continuously working on plans to overcome from this current situation and to minimize the impact on the revenue of the company in FY 2020-21.

The company is planning to install 3 MW power plant for captive consumption to curtail the power cost of Kraft Paper production. Further company is also planning to expand present manufacturing capacity of paper machineries from 25000 TPA to 30000 TPA. After the completion of said expansion, the company will produce Kraft Paper up to 30000 TPA in a year.

DIVIDEND:

In view of the small profit and carried forward losses of the Company, it is not possible for your Directors to recommend any dividend.

MATERIAL CHANGES AND COMMITMENT

There are no material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statement relates on the date of this report.

FIXED DEPOSIT:

As on 31st March 2020, Company has no fixed deposits.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

Related Party Transactions (RPT) excluding the material related party transaction that were entered into during the financial year were on an arms length basis and in the ordinary course of business.

During the year, company has not entered into any material contract/arrangement whichrequired prior approval of Board or shareholders of the company, hence report in the form AOC 2 under the sub-section 2 of section 188 of the Companys act 2013 is not provided in this Board Report.

The policy on dealing with RPT as approved by the Board is uploaded on the Companys website (http://www. kaypowerandpaper.com) The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of RPT, keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions. All RPT are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for RPT that are of repetitive nature and / or entered in the ordinary course of business and are at arms length. All RPT are subjected to independent review by a statutory auditor to establish compliance with the requirements of RPT under the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Your Directors draw your attention to Note No. 33 to thefinancial statements which sets out related party transaction.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

DIRECTORS:

Mrs. Deepa Agarwal, director of the company retires by rotation in ensuing general meeting and being eligible offers herself for reappointment at the ensuing Annual General Meeting of the company.

During the year, Mr. Kaustubh N. Wadikar and Mr. Sandeep R. Shahapurkar were reappointed as an independent director on the board of the company for the second term of 5 years and Mr. Arvind V. Kulkarni was appointed as an independent director on the board of the company for first term of 5 years, at the 28th Annual General Meeting of the company held on 23th September, 2019.

None of the Directors of the Company for the financial year ending on 31st March, 2020 have been debarred or disqualified from being appointed or continuing as Directors on the board of the company by the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority

BOARD EVALUATION:

Pursuant to provisions of the Companies Act 2013 and SEBI Regulations mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

The evaluation process has been explained in the Corporate governance report section in this Annual Report. The Board approved the evaluation results as collate by the nomination and remuneration committee.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

The Company had 4 (Four) Board meetings during the financial year under review. The Details thereof are given in the corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the companies Act, 2013

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) We have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of 31st March 2020 and of the profit and loss of the company for that period;

(c) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) We have prepared the annual accounts on a going concern basis; and

(e) We have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(f) We have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS:

M/s. A. C. Doshi & Co, (M. No.103730), Chartered Accountants, Satara, were appointed as Statutory Auditors of the Company for a period of five consecutive years at the 26th AGM held on 18th September 2017, to hold office fromthe conclusion of the said meeting till the conclusion of the 31 st AGM of the Company to be held in the calendar year 2022.

AUDITORS REPORT:

The observations of the Auditors report read with the relevant notes thereon are selfexplanatory and therefore do not call for any further comments under Section 134 of the Companies Act, 2013. Auditor did not report any frauds under sub-section (12) of section 143 other than those which are reportable to the Central Government.

SECRETARIAL AUDITOR

M/s. Neha Doshi & Co., Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2019-20, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for FY 2019-20 forms part of the Annual Report as Annexure I to the Boards report.

SECRETARIAL AUDITORS REPORT

The observations of the Secretarial Audit report are self-explanatory andtherefore do not call for any further comments under Section 134 of the Companies Act, 2013.

CORPORATE GOVERNANCE:

Pursuant to regulation 34(4) of SEBI Listing Obligations and Disclosure Requirements (LODR) regulation 2015, report on Corporate Governance along with Auditors certificate on its compliance is attached as Annexure II to this report.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure III and is attached to this Report.Also the extract of Annual Return will be placed on the website of the Company as a part of Annual Report. Companys web address is www. kaypowerandpaper.com/reports.asp.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future

COST AUDITORS:

As per the companies (Cost Records and Audit) Amendment Rules 2014, the company is exempted for cost audit from the financial year 2015-16. Hence company has not appointed cost auditor for the financial year 2020-21.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Subsection (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, the relevant information pertaining to Energy Conservation, Technology Absorption, Foreign Exchange Earnings and Outgo are enclosed as Annexure IV to the Boards report.

PARTICULARS OF EMPLOYEES

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure V to the Boards report.

COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

The Companys policy on directors appointment and remuneration and other matters provided in section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of this report.

LISTING OF EQUITY SHARES:

The Equity Shares of your Company are listed on BSE Ltd., where the same are traded regularly and confirm that company has paid the listing fees for the financial year 2019-20.

VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy (the Policy) in compliance with the Companies Act 2013 and Listing agreement, to enable employees, customers, agents, dealers, suppliers and other vendors that conduct business with Kay Power and Paper Limited to raise concerns and complaints about fraudulent practices.

Under the Policy, the concerns/ complaints pertaining to General Managers and Mangers should be raised before the Chairman of Audit Committee and concerns against other Employees should be addressed to the Vigilance officer and confirm that no personnel has been denied access to the audit committee.

The Company has designated the Manager, Mr. Arvind Patil as the Vigilance officer and has created the following email accounts for facilitating the raising of such concerns.

Chairman of Audit Committee- chairmanaudit committee@gmail.com

Vigilance officer - arvindpatil.kppl@gmail.com

The Company aims to propagate a culture for maintaining highest standard of conduct and professionalism and therefore this Policy is implemented in furtherance of the Code of Conduct of the Company.

The details of establishment of such mechanism have also been disclosed on company website on following link - http:// www.kaypowerandpaper.com/download/ Annoncement-KPPL.pdf

COMMITTEES OF THE BOARD

Currently, the Board has four committees: the audit committee, nomination and remuneration committee, stakeholders relationship committee, and risk Management committee. The role and responsibilities and composition of the aforesaid committees are mentioned in the corporate governance report section in this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A comprehensive Management discussion and analysis Report is appended as Annexure VI, forming a part of the Corporate Governance is part of this Annual Report

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual

Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during F.Y. 2019-20.

ACKNOWLEDGEMENT:

Your Directors appreciate valuable contribution of employees at all levels. Your Directors place on record their gratitude for the cooperation received from Indian Renewable Energy Development Agency Ltd, Maharashtra State Electricity Distribution Company Ltd., IDBI Bank Ltd., HDFC Bank Ltd, Suppliers, Customers and Shareholders of the Company and look forward to their continuous support in coming years.