kay power paper ltd Directors report

Dear Members,

Your Directors take pleasure in presenting the thirty second (32nd) Annual Report on the business and operations of your Company and Audited Financial Statement for the year ended 31st March 2023.

FINANCIAL RESULTS:	(Rs. in lacs)
Financial Year	2022-23	2021-22
Revenue from
operations (Net)	4344.89	3440.48
Other Income	64.28	3.03
Total Revenue	4409.17	3443.51
Less: Expenses
Cost of material consumed	3260.37	2632.80
Changes in Inventories of
fi nished Goods &
Work in Progress	-4.32	-27.52
Manufacturing Expenses	615.07	465.35
Employee Benefi t Cost	87.25	80.33
Finance cost	1.72	1.90
Depreciation and
amortization Expenses	83.15	83.27
Other Expenses	225.11	198.22
Total Expenses	4268.34	3434.36
Exceptional Items	0.00	0.00
Net Profi t Before Tax	140.83	9.14
Less: Income tax provision	0.00	00
Net Profi t After Tax	140.83	9.14

OPERATIONS:

During the year under review, the paper division produced 10936.740 MT. of Kraft Paper as against 8885.208 MT in the previous year.

The company has achieved sales of Rs. 4344.89 lakhs as compared to Rs. 3440.48 lakhs in previous year.

The company has installed a new boiler of six tons per hour capacity which has commissioned in month of June 2023. The company is saving substantial power & fuel after the operational of new boiler.

The company has replaced old wire parts with the new wire parts. The new wire part machinery is commissioned in the month of June 2023. This has improved the quality & increase the productivity.

PROSPECTS:

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

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

RESERVE AND SURPLUS

An amount of Rs.140.83/- lakhs 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 elements of risk which may cause serious threat to the existence of the Company.

DIVIDEND:

In view of the small profi t 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 fi nancial position of the Company occurred between the ends of the fi nancial year to which this fi nancial statement relates on the date of this report.

NATURE OF BUSINESS

There was no change in the nature of business during the year under review.

DEPOSITS:

During the fi nancial year under review, the company has not accepted or renewed any deposit from public within the meaning of section 73 and 76 of the Companies Act, 2013 (Act) read with the Companies (Acceptance of Deposit) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

T h e C o m p a n y h a s n o t d e v e l o p e d 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

Your Directors/Board of Directors of the company has entered into the contract/ agreement with the related party M/s. Satara Engineering Projects and Equipments Private Limited for supplying, erecting and commissioning the boiler of six tons per hour capacity and wire parts of paper machine total of Rs. 18, 00, 00,000/- (Eighteen Crores Only) plus taxes extra on prevailing market price, without obtaining the prior approval of shareholders of the company in general meeting for early completion of plant modifi cation work at site.

The company has taken a prior approval of audit committee and board of directors meeting held on 13th Feb, 2023 for said material related party transaction. But the company has failed to get the prior approval from shareholders of the company.

As per the related party transaction policy, audit committee have powers to give suitable directions to board of directors, if prior approval of material transaction with a related party has not been taken from shareholders of the company. The audit committee shall evaluate all options available to the Company, including ratifi cation, revision or termination of the related party transaction.

Accordingly, in the audit committee meeting held on 29th May 2023, the committee members had discussed this matters carefully and directed to board of directors that this material related transaction should require to ratify from shareholders of the company as prior approval of shareholders has not taken as per the related party transaction policy adopted by the company.

As per the direction of the Audit committee, board of directors of the company in it meeting held on 29th May, 2023 has recommended the special resolution in ensuing general meeting to ratify the material related transaction from shareholders of the company.

Accordingly, the board of directors put necessary special resolution in the notice of 32nd annual general meeting of the company for the consideration and approval of members of the company.

The report in the form AOC 2 under the subsection 2 of section 188 of the Companys act 2013 is provided in this Board Report as Annexure I.

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 specifi cally deals with the review and approval of RPT, keeping in mind the potential or actual confl icts 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. 32 to the fi nancial 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.

None of the Directors of the Company for the fi nancial year ending on 31st March, 2023 have been debarred or disqualifi ed 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.

N U M B E R O F B O A R D M E E T I N G S CONDUCTED DURING THE YEAR UNDER REVIEW:

The Company had 4 (Four) Board meetings during the fi nancial 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 2023 and of the profi t and loss of the company for that period;

(c) We have taken proper and suffi cient 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 fi nancial 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. Godbole & Company, (M. No. 104822) Chartered Accountant, Satara, were appointed as Statutory Auditors of the Company for a period of fi ve consecutive years at the 31st AGM held on 26th September 2022, to hold offi ce from the conclusion of the said meeting till the conclusion of the 36th AGM of the Company to be held in the calendar year 2027 (For the Financial Year 2022-23 to 2026-27).

AUDITORS REPORT:

The observations of the Auditors report read with the relevant notes thereon are self-explanatory 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 of the companies act 2013.

SECRETARIAL AUDITOR

M/s. Neha Doshi & Co., Practicing Company Secretaries, was appointed to conduct the secretarial audit of the Company for the financial year 2022-23, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for FY 2022-23 forms part of the Annual Report as Annexure II to the Boards report.

SECRETARIAL AUDITORS REPORT

The observations of the Secretarial Audit report are self-explanatory and therefore 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 certifi cate on its compliance is attached as Annexure III to this report.

ANNUAL RETURN:

Pursuant to the provisions of sub section 3 of Section 92 of the Companies Act, 2013, a copy of Annual Return for the fi nancial year 2022-23 is available on the website of the Company at 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 fi nancial disclosures.

SIGNIFICANT AND MATERIAL ORDERS

There are no signifi cant 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 fi nancial year 2015-16. Hence company has not appointed cost auditor for the fi nancial year 2022-23.

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

This Nomination and Remuneration Policy is being formulated in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and pursuant to regulations of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. This policy on nomination and remuneration of Directors, Key Managerial Personnel and Senior Management has been formulated by the Nomination and Remuneration Committee (NRC or the Committee) and has been approved by the Board of Directors and is available on companys website on link – www. kaypowerandpaper.com

LISTING OF EQUITY SHARES:

The Equity Shares of your Company are listed on BSE Ltd., where the same are traded regularly and confi rm that company has paid the listing fees for the fi nancial year 2022-23.

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 offi cer and confi rm that no personnel has been denied access to the audit committee.

The Company has designated the Manager, Mr. Hanmant Kadam as the Vigilance offi cer and has created the following email accounts for facilitating the raising of such concerns.

Chairman of Audit Committee- chairmanauditcommittee@gmail.com

Vigilance offi cer – kadam.h43@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. 2022-23.

DETAILS OF APPLICATION MADE OR PROCEDDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there were no applications made or proceedings pending in the name of the company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOANS FROM BANKS AND FINANCIAL INSTITUTIONS

During the year under review, there has been no onetime settlement of loans taken from Banks and Financial Institutions.

ACKNOWLEDGEMENT:

Your Directors appreciate valuable contribution of employees at all levels. Your Directors place on record their gratitude for the co-operation received from 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.

For and on behalf of the Board of Directors

NIRAJ CHANDRA

CHAIRMAN AND MANAGING DIRECTOR

DIN: - 00452637

Place: Satara

Date: 11th August 2023