kesar petroproducts ltd Directors report

To,

The Members of

KESAR PETROPRODUCTS LIMITED

Your Directors presents the 33rd Annual Report together with the Audited Financial Statements for the year ended 31st March, 2023.

FINANCIAL RESULTS:

The Companys financial performance for the vear ended 31st March, 2023 is summarized below:

(Rs. In Lakhs)

Particulars	2022-23	2021-22
Revenue from operations	11,996.16	15309.93
Other Income	148.78	122.57
Total Turnover & Other Income	12,144.93	15432.50
Less : Manufacturing and Other Expenses	11,338.20	14509.78
Profit / (Loss) before interest and Depreciation	806.73	928.77
Less : Finance Costs (Interest)	105.31	24.49
Profit / (Loss) after Interest	701.42	904.27
Less : Depreciation and Misc. Expenses written off	603.46	602.19
Net Profit / (Loss) before exceptional items and tax	97.97	302.08
Exceptional Items	0.00	6.05
Profit / (Loss) Before Tax	97.97	296.02
Less: Tax Expense (including Deferred Tax)	51.17	28.74
Profit/(Loss) after tax	46.80	267.28
Earnings Per Share (EPS)	0.38	0.28

REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

The total net Profit before tax in the current year was Rs. 97.97 Lakhs as against net profit before tax of Rs. 296.02 Lakhs in the previous year. The Company has made a Net Profit after Tax of Rs. 46.80 Lakhs in the current year as compared to Net Loss after tax Rs. 267.28 Lakhs in the previous year.

The business outlook for the Company was less than rosy in the current year due to factors beyond the control of the management. The war in Europe had caused a major disruption in logistics. This led to abnormal prices in raw material and reduction in the offtake of the our finished good. To cap this situation China imposed a countervailing duty on the imports of our finished goods. Due to this single factor the production had to be curbed and effectively capacity utilization has to be curtailed at around 70% of last year. The sales thus were down sharply.

The dye intermediate sector was more severely hit because of the overall business scene. The DNCB as a product along with its downstream products took a tail spin. The Company has started other dye intermediates to replace the Beta Naphthol intermediates and hope to do better in this sector.

The turbulence in the intermediate market coupled with reduction in value addition of CPC was a setback in this year. The Company however has recovered from this set back during the current year and prospect is looking upbeat.

The new capital expenditure in captive power plant and zero liquid discharge which the Company has undertaken will make the Company in a unique position of reducing its utility cost and at the same time going in zero discharge were practically no water will be required as input and no waste water as output. In the process the Company will recover bye products which were going in the waste water.

The Company is hopeful that this coming year will be better than the previous though the signs of headwinds in terms of recession is seen by the Company. Despite the overall negative climate, the Company has made a small profit of about 47 Lakhs.

The Companys products however remain fairly well established and the Company has a loyal set of customers.

DIVIDEND:

In view of limited Profit, your Directors intend to plough back the profits in to the Companys operations and hence do not recommend any dividend for the year ended 31st March, 2023.

RESERVES:

The Company did not transfer any amount to General Reserve.

CHANGE IN NATURE OF BUSINESS:

The Company is engaged in the business manufacturing Phthalocyanine range of pigments and Dye Intermediates. There was no change in the nature of business activities of the Company during the year under review.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

The BSE vide its notice dated Feb 10, 2023, revoked the suspension of trading of equity shares of the Company w.e.f February 14, 2023 as per the order passed by the Honble Securities Appellate Tribunal on December 15, 2022.

SUBIDIARY, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have subsidiary, joint venture and associate company.

DEPOSITS:

During the year under review, the Company has not accepted or renewed any deposits within the meaning of Section 73 and 76 of the Companies Act 2013 read with the Companies (Acceptance deposits Rules), 2014. There was no deposit which remained unclaimed and unpaid at the end of the year.

EXTRACT OF ANNUAL RETURN:

The Annual Return of the Company in Form MGT-7 has been uploaded on the website of the Company and is available at the following link: https://www.kesarpetroproducts.com/archives.html

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As per Section 152(6) of the Companies Act, 2013 Mr. Dinesh Shankarlal Sharma (DIN: 01231046), who retires by rotation and being eligible, offers himself for re-appointment as the Director of the Company.

The following are changes which occurred during the year and till the date of Directors Report:

Name	Designation	Appointment or Resignation	with effect from
Surya Prakash Sitaram Pandey	Non-Executive- NonIndependent Director	Resignation	25-04-2022
Dinesh Shankarlal Sharma	Non-Executive- NonIndependent Director	Appointment	25-04-2022
Saba Jameel Shaikh	Company Secretary and Compliance Officer	Appointment	26-05-2022
Ramchandra Dhondu Ghanekar	Whole Time Director	Resignation	28-06-2022
Govind Krishna Sharma	Non- Executive- Independent Director	Demise	15-08-2022
Nainesh Sumanti Rai Desai	Non- Executive- Independent Director	Appointment	12-11-2022
Satish Chand Mathur	Non- Executive- Independent Director	Appointment	27-12-2022
Parijat Vinod Kanetkar	Non-Executive- NonIndependent Director	Resignation	25-07-2022

COMPOSITION OF BOARD AND STATUTORY COMMITTEES FORMED THEREOF:

The Composition of the Board and Statutory Committees thereof along with other details are given in the Corporate Governance Report.

NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

The Board met 9 (Nine) times during the year. The details of the meetings are given in the Corporate Governance Report. The intervening gap between the two meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors of the Company have given the requisite declaration pursuant to Section 149(7) of the Companies Act, 2013 to the effect that they meet criteria of independence as provided in Section 149(6) of the Act.

FORMAL ANNUAL EVALUATION:

Pursuant to the provisions of Sec 134(3) of Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 and Regulation 4 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

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

The Board, on the recommendation of the Nomination and Remuneration Committee of the Company, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Salient features of the Remuneration Policy are:

The Remuneration Policy of the Company is divided into the following headings and the entire policy is available on the website of the Company www.kesarpetroproducts.com

(1) Preface (2) Commencement (3) Definitions (4) Purpose (5) Principles of Remuneration (6) Nomination and Remuneration Committee (7) Selection and appointment of the Board Members (8) Process for evaluation; and (9) Publication

DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby confirms that:-

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

(b) the directors 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 as at 31st March 2023 and of the profit of the company for period ended on that date;

(c) the directors 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) the directors have prepared the annual accounts on a going concern basis;

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

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

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

Following are the particulars of loans, guarantees and investments under Section 186 of the Companies, Act, 2013 of the Company:

(A) Loans providec

(Amount in Rs.)

Opening Balance	Amount of Loans Given During The Year	Amount of amounts (Loans repaid) received during the ear	Closing Balance
9,77,61,260	4,90,56,583	14,40,65,691	27,52,152

(B) Guarantees:

No Guarantees were given during the year under review.

(C) Investments made:

(Amount in Rs.)

Nature of Investments	Opening Balance	Amount Invested during the year	Amount Redeemed	Gain/Loss	Closing Balance
Union Long Term Equity Fund Growth	1,07,99,562.59			1,65,823.17	1,09,65,385.76
Total	1,07,99,562.59	-	-	1,65,823.17	1,09,65,385.76

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES PURSUANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013:

There were no contracts or arrangements or transactions with any related parties which could be considered material in accordance with the policy of the Company during the year under review. Hence, the Company is not required to disclose details of the related party transactions in Form AOC-2 pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

PARTICULARS OF EMPLOYEES:

There was no employee who was employed throughout the year or part thereof and in receipt of remuneration aggregating to Rs. 1,02,00,000/- p.a. or more or who was employed for part of the year and in receipt of remuneration aggregating to Rs.8,50,000/- p.m. or more.

PARTICULARS AS PER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The details related to employees and their remuneration as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) and 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are mentioned in Annexure ‘I to this Boards Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

(A) Conservation of energy-

(i) the steps taken or impact on conservation of energy;	NIL
(ii) the steps taken by the company for utilizing alternate sources of energy;	Exploring the possibility of power generation through sulphuric acid.
(iii) the capital investment on energy conservation equipment.	NIL

(B) Technology absorption-

(i)	the efforts made towards technology absorption;	Rs. 14 crore expansion invested in technology to have zero liquid discharge
(ii)	the benefits derived like product improvement, cost reduction, product development or import substitution;	NIL
(iii)	in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-	NIL
	(a) the details of technology imported;
	(b) the year of import;
	(c) whether the technology been fully absorbed;
	(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
(iv)	the expenditure incurred on Research and Development.	Rs. 90.00 Lacs

(C) Foreign exchange earnings and outgo-

The Foreign Exchange earned in terms of actual inflows during the year;	Rs. 524.49 Lacs
The Foreign Exchange outgo during the year in terms of actual outflows.	Rs. 530.07 Lacs

SIGNIFICANT /MATERIAL ORDERS PASSED BY THE REGULATORS:

Order was passed by Securities Appellate Tribunal, Mumbai, on December 15, 2022, wherein the order was passed stating

"Since, the fine has now been paid the suspension order should be revoked by the respondent" Accordingly, the respondent was directed to revoke the suspension order.

And, on February 14, 2023, BSE passed an order for revocation of suspension in trading of equity shares of the company.

INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place proper and adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Company monitors and evaluates the efficacy and adequacy of internal control system, its compliance with operating systems, accounting procedures and policies.

VIGIL MECHANISM POLICY:

The Company has a Vigil Mechanism policy to deal with instance of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in the exceptional cases. The details of the Vigil Mechanism Policy is explained in the Corporate Governance Report and also posted on the website of the Company. We affirm that during the financial year 2022-23, no employee or director was denied access to the Audit Committee.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY:

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION ANALYSIS REPORT:

Pursuant to Regulation 34(3) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the following have been made a part of the Annual Report and are attached to this report:

• Management Discussion and Analysis Report - ‘ Annexure -II

• Corporate Governance Report - ‘Annexure III

• Declaration by Executive Director/CEO affirming with the compliance of the code of conduct of Board of Directors and Senior Management -‘Annexure IV

• Practicing Company Secretarys Certificate under sub-para 10(i) of Part C of Schedule V of SEBI (LODR), Regulations, 2015 - ‘Annexure V

• Auditors Certificate regarding compliance of conditions of Corporate Governance - ‘Annexure VI

STATUTORY AUDITORS:

At the Companys 32ndAnnual General Meeting held on 29th September, 2022, M/s. A. Sachdev Co., Mumbai, Chartered Accountants (Firm Reg. No. 001307C) appointed as the Statutory Auditor of the Company for a term of 5 years to hold office from the conclusion of the 32nd Annual General Meeting until the conclusion of the 37th Annual General Meeting of the Company.

INTERNAL AUDITORS:

The board has appointed M/s. ATJ & Co LLP, Chartered Accountants (having FRN: 113553W/W100314) as an Internal Auditor of the Company for the financial year 2022-23 in place of M/s. Sayeed Khan & Associates, Chartered Accountants, Mumbai as Internal Auditors. The Internal Auditors will monitor and evaluate the efficiency and adequacy of internal control systems in the Company, its compliances with operating systems, accounting procedures and policies at all locations of the Company and reports the same on quarterly basis to the Audit Committee.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Pankaj Desai & Associates, Company Secretaries, Mumbai to undertake the Secretarial Audit and Secretarial Compliance of the Company. The Secretarial Audit Report is attached herewith and marked as ‘Annexure VII.

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There were no qualifications, reservations, adverse remarks made or fraud reported by the Statutory Auditors in their reports. There are also no points for which separate explanation would be given.

There were no qualifications, reservations or adverse remarks made by the Secretarial Auditors in the Secretarial Compliance Report except for the following observations:

1. The company has received notice/mail dated 27.08.2021for non-compliance/ late compliances of certain clause of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in the past years.

The company has represented the matter before BSE Ltd but the BSE Ltd has taken action against company by suspending the trading of company equity shares on the stock exchange & freezing the demat account of the promoters of the company.

The BSE Ltd Partially waived off fine levied pursuant to SEBI circular SEBI/HO/CFD/CMD/CIR/P/2020/12 dated January 22, 2020 (erstwhile SEBI circular SEBI/HO/CFD/CMD/CIR/P/2018/77 dated May 03, 2018) on 19.04.2022 against which company has filed appeal before The Securities Appellate Tribunal Mumbai. On August 10, 2022 the order for was passed whereby the appeal was partly allowed and the fine was reduced but due to non-payment offine BSE had suspended the trading activities of the appellant, which was revoked upon successful payment of thefine amount. The Appeal of BSE was misconceived and rejected via order 03.02.2023.

CORPORATE SOCIAL RESPONSIBILITY:

The Provisions of Section 135 of the Companies Act, 2014 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, are not applicable to the Company and hence, the Company has dissolved its existing Corporate Social Responsibility Committee and a Policy on Corporate Social Responsibility (CSR).

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

The board is under process to formulate the Internal Complaint Committee under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, however no complaint was received by the designated person till the time Committee is formulated.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companys activities during the year under review. Your Directors also acknowledge gratefully the support and confidence reposed by the shareholders of the Company.

		By Order of the Board of Directors
Sd/-	Sd/-	Sd/-	Sd/-
RAMJAN KADAR	DINESH SHANKARLAL	SABA JAMEEL SHAIKH	JIGNESH DINESH
SHAIKH	SHARMA		DESAI
WHOLETIME DIRECTOR	DIRECTOR	COMPANY SECRETARY	CFO(KMP)
DIN:08286732	DIN: 01231046
Place: Mumbai
Date: 11th August, 2023