KKalpana Industries (India) Ltd Directors Report.

To the Members of M/s Kkalpana Industries (India) Limited,

The Board of Directors, has pleasure to present the 35th Annual Report on the performance of the Company together with the Audited Statement of Accounts 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 11,764.11
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

Dividend

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 the Company for the Financial Year ended 31st March, 2020. The total outgo will be Rs. 112.89 lacs, if declared by the members at the ensuing Annual General Meeting.

COVID-19 Impact

The World Health Organization declared a global pandemic of the coronavirus disease (Covid-19) on 11th February, 2020. The impact of the disease is being felt in India, as well, and the central government declared a PAN India lockdown on 24th March, 2020. The lockdown has been extended several times since then. The effect of coronavirus (Covid-19) outbreak on public life and industries is also affecting the demand for the companys product in the country across several market segments.

However, your company started operations, in a phased manner, with reduced manpower. Gradually operations are being stepped up. Your company fully followed the guidelines issued by the Central Government for reopening of manufacturing units/offices. Your company also opened its head office, Delhi and Mumbai offices, keeping in view the employee safety first approach, and maintained social distancing and other health & safety norms to minimize the spread of disease.

While the pandemic is expected to have negative impact on the financial performance of company in the current year, the situation in the country still remains uncertain and, therefore, it is difficult to quantify the magnitude, and duration of such impact at this stage. However, preliminary estimates, based on sales trend in the past weeks and through interaction with your companys customers, indicate possibly sizeable reduction in turnover & profitability in respect of the financial year 2020-21. The companys focus on liquidity, supported by strong balance sheet & cost optimization initiatives would help the company in navigating near term challenges in the demand environment.

Your Directors are of the firm view that your company will be able to retrieve 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 that it will ultimately incarcerate the very survival of your company.

Industrial Scenario

Because of slowdown in demand, your directors feel that your companys approach in operational areas should be very effective. The year 2020-2021 is very challenging, particularly, because world economic scenario will definitely be gloomy and India will also face headwinds in its economy. Further, the impact of Covid-19 on the world economy will also have impact on the domestic economy.

Operations and State of Companys Affairs

During the year under review, your Company achieved total revenue of Rs. 1,762.21 Crores as against total revenue of Rs. 2,020.83 Crores in the previous financial year. The Profit after Tax is Rs. 30.64 Crores as against Rs. 25.62Crores in the previous year.

Future Prospects

Your directors feel that your companys Research and Development, which is of a very high standard, will enable your company to make inroads in new markets, both domestic and international from 2021-22.

Share Capital

There is no change in the Share Capital of the Company. As on 31st March, 2020, the paid up equity share capital of the company stood at Rs. 1881.46 lacs divided 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 profits for 2019-20 in the retained earnings.

Transfer of Amount to Investor Education and Protection Fund

Dividend for the financial year ended 31st March, 2013, which remains unpaid or unclaimed for a period of seven years, will be due for transfer to Investor Education and Protection Fund (IEPF) on 25th October, 2020. Members who have not yet enchased their dividend warrants for the financial year ended 31st March, 2013 or any subsequent financial years, are requested to lodge their claims without any 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 of unpaid 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 on the Companys website.

Fixed Deposits

Your Company has not accepted any deposits from public and /or members during the year under review, within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and accordingly as of 31st March, 2020, there were no unpaid fixed deposits with the Company.

Credit Rating

CRISIL has reaffirmed, vide its letter dated 05th July, 2020, the Credit Rating of A- (Long Term Rating) and A2+ (Short Term Rating) given to the company.

Research and Development

Your Company recognizes that Research & Development ("R&D") plays a vital role in supporting operations as well as future growth. Your Company focuses its attention on development of Products that have wide industrial applications, particularly in cable, piping, packaging and footwear industries. Through R&D, it endeavors to increase production, lower cost of production and lower wastage.

Directors and Key Managerial Personnel

Appointment/Re-appointment

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Rajesh Kumar Kothari (DIN -02168932), Whole Time Director of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.

Mrs. Mamta Binani (DIN: 00462925), Independent Director of the Company has completed the term of 5 consecutive years of holding office as Independent Director of the Company and being eligible, the Board has recommended her re-appointment for period of 5 consecutive years, pursuant to Section 149(10) of the Companies Act, 2013. The Nomination and Remuneration Committee has also recommended on similar lines. She has offered herself for re-appointment as Independent Director for a term of 5 consecutive years from 29.09.2020 to 28.09.2025, at the ensuing Annual General Meeting. It is also informed that she has submitted the requisite declarations and confirmations pursuant to Section 164 and 149(7) of the Companies Act, 2013 ("the Act"), Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014 ("the Rules"), Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the SEBI Listing Regulations"), as amended from time to time, Circular No. LIST/COMP/14/2018-19 dated 20.06.2018 issued by BSE Ltd. and has also given her consent to act as Independent Director of the Company for a further period of 5 years, in compliance with Section 149(10) of the Act, details whereof has also been stated in the Statement pursuant to Section 102 of the Act, annexed to the Notice convening the 35th Annual General Meeting. The Board of Directors of your company has accordingly, sought approval from members, by way of special resolution, in accordance with Item No. 5 of the Notice convening this Annual General Meeting.

The necessary disclosures about Directors, required pursuant to Regulation 36 of the SEBI Listing Regulations and Clause 1.2.5 of the Secretarial Standard, are annexed to the Notice of 35th AGM, forming part of the Annual Report.

Mrs. Ramya Hariharan (DIN: 07824452) who was appointed as the Additional Director, w.e.f. 11thFebruary, 2019 was appointed as Independent Director of the Company, for a period of 5 years, by the members of the company, at the last Annual General Meeting of the Company held on 27.09.2019. Further, Mr. Dev Krishna Surana (DIN: 08357094) was also appointed as Additional Director, w.e.f 11th February, 2019 was also appointed as Whole Time Director of the Company, for a period of 5 years, w.e.f. 28th May, 2019, by the members of the Company, at the last Annual General 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 Surana Whole 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 following Independent 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 the Company possess requisite qualifications, experience and expertise in their respective designated fields.

The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs (IICA), in terms of Section 150 of the Companies Act, 2013 (including any statutory modifications, amendments/ re-enactments, if any) read with Rule 6 of the Companies (Appointment and Qualification of Directors) 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 the Company, resigned from his office, wef 30th June, 2020.

None of the Directors are disqualified or debarred by SEBI or any other statutory authority, from continuing office as Director

Declaration by Independent Directors

All Independent Directors of the Company have given declarations under Section 149(7) of the Act, that they meet the criteria of Independence, as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulations 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. They have also confirmed, respectively, pursuant to Circular No. LIST/COMP/14/2018-19 dated 20.06.2018 issued by BSE Ltd., pertaining to enforcement of SEBI Orders regarding appointment/ re-appointment of Director/Independent Director, that they are not debarred from holding office of Independent Director/ Director by virtue of any SEBI order or any other statutory authority and are not disqualified from being continuing as Independent Directors in terms of Section 164 of the Act. They have also confirmed, respectively, their compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014 ("the Rules"), as amended from time to time, with respect to registration with the Databank of Independent Directors maintained with Indian Institute 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 of member on the Board. The Nomination and Remuneration Committee of the Company follows defined criteria for identifying, screening, recruiting and recommending candidates for selection 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, its portfolio, geographical spread and its status as a listed Company; desired age and diversity on the Board; size of the Board with optimal balance of skills and experience and balance of Executive and Non-Executive Directors consistent with the requirements of law; professional qualifications, expertise and experience in specific areas of relevance to the Company; balance of skills and expertise in view of the objectives and activities of the Company; avoidance of any present or potential conflict of interest; availability of time and other commitments for proper performance of duties; personal characteristics being in line with the Companys values, such as integrity, honesty, transparency, pioneering mindset.

The Board has identified the following skills/ expertise/ competencies fundamental for the effective functioning of the Company, which are currently available with the Board:- • Leadership -experience of running large enterprise, leading well-governed organization, with an understanding of organizational systems and strategic planning and risk management, understanding of global business dynamics, across various geographical markets, industry verticals and regulatory jurisdictions. • Strategy and planning-Appreciation of long-term trends, strategic choices and experience in guiding and leading management teams to make decisions in uncertain environments • Governance-Experience in developing governance practices, serving the best interests of all stakeholders, maintaining board and management accountability, building long-term effective stakeholder engagements and driving corporate ethics and values • Finance and Accounting Experience Experience in handling financial management along with an understanding of accounting and financial statement • Understanding use of Digital / Information Technology Understanding the use of digital / Information Technology across the value chain, ability to anticipate technological driven changes & disruption impacting business and appreciation of the need of cyber security and controls across the organization • Sales and Marketing-Experience in developing strategies to grow sales and market share, build brand awareness and equity, and enhance enterprise reputation.

The following are the details of respective core skills of Board Members:-

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 composition, number of meetings and attendance at the meeting are provided in the Corporate Governance Report, which also forms part of this Annual Report.

Code of Conduct for Directors, Senior Management Personnel and Employees

Your Company has adopted a Code of Conduct ("the Code" or "CoC") for its Directors and Senior Management. In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Directors and Senior Management Personnel have affirmed compliance with respective the code. The CEO and Managing Director has also affirmed and certified the same, which certification is provided in the Report on Corporate Governance. It also has in place an HR Policy for its employees at all levels.

Familiarization Programme for Independent Directors

The Company had organized familiarization programmes for the Independent Directors as per the requirement of the Companies Act, 2013 and Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and it conducts familiarization programme, from time to time, for its Independent Director. All independent directors inducted into the Board attended the familiarization programme. The Company has familiarized the Independent Director with the company, their roles, rights, responsibilities in the company, nature of the Industry in which the company operates and business model of the company. The Company endeavors to update the Independent Directors regarding the companys projects, new ventures, if any, opening of new office sites or manufacturing units, shutdown/ closure of any manufacturing unit. It also keeps the Independent Directors informed of any sluggishness in finance/ liquidity problems, if any. The suggestions received from Independent Directors are taken note of and informed to the Chairman and Managing Director who takes suitable measures, if required, on the suggestions of the Independent Directors. Further, at the time of the appointment of an Independent Director, the company also issues a formal letter of appointment outlining his/her role, function, duties and responsibilities. The format of the letter of appointment is available under the head draft letter of appointment on our website (www.kkalpanagroup.com/investor-relations.php)

Board Evaluation

The Board of Directors has devised a policy for performance evaluation, which includes criteria for performance evaluation. It reviews the performance evaluation criteria annually in accordance with Regulation 4(2)(f)(ii)(9) of SEBI (listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The Nomination and Remuneration Committee accordingly carries out an annual evaluation of Boards performance, and the performance of its Committees as well as Individual Directors (both Executive and Non executive/ Independent Directors) in accordance with Section 178(2) of the Companies Act, 2013. This involves receiving inputs from all Committee members. The Board thereafter reviews and takes on record the performance evaluation done by the Nomination and Remuneration Committee. The Board evaluates the performance of Independent Directors, pursuant to Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule IV to the Companies Act, 2013.

Pursuant to the provisions of the Section 178(2) Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the formal annual evaluation was carried out for the Boards own performance, its committees & Individual Directors.

A structured performance evaluation form was prepared after taking into consideration inputs received from the Directors and on the basis of the evaluation criteria laid down by Nomination and Remuneration Committee and as reviewed and approved by the Board of Directors, covering various aspects of the Boards functioning including adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance, the effectiveness of its processes, information, flow and functioning.

A separate meeting of Independent Directors is held to review the performance of Non-Independent Directors, the performance of the Board of Directors and the performance of Chairman. The Directors evaluation was broadly based on parameters such as, meeting the expectation of stakeholders, guidance and review of corporate strategy, risks, participation, Directors contribution to the Board of Directors and Committee meetings, including preparedness on the issues to be discussed as well as meaningful and constructive contribution and inputs during the meeting and attendance at Board / Committee meetings, interpersonal skills. The performance evaluation of the Chairman of the Company was undertaken by the Independent Directors taking into account the views of Executive Directors and Non Executive Directors. The Chairperson is evaluated on the key aspects of their role, their contribution to ensuing corporate governance, leadership qualities, decision implementation, understanding of market and industry scenario etc. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Companys management and the Board.

Observation of the Board in regard its own performance

In regard to Financial Year ended 31st March, 2020, the Board of Directors of the Company, after an exhaustive discussion on the captioned subject matter, was of the opinion that operationally, the Board, as whole, had issued effective instructions, from time to time, and the same were duly carried out. The Company Secretary of the Company issues, on a quarterly basis, the Consolidated Compliance Certificate, based on the reports submitted by the Unit/ Departmental Heads. The same is reviewed and taken on record by the Board

Policy on Directors appointment and remuneration

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of 31st March, 2020, the Board had 7 members, 4 of whom were executive and 3 were non-executive directors. As mentioned above Mr. Ramakant Mishra (DIN: 06882372), Non Executive Independent Director of the Company left for his heavenly abode on 27.02.2020.

The Companys Policy for selection and appointment of Directors and their remuneration is based on its Nomination and Remuneration policy which, inter alia, deals with the manner of selection of the Directors and Senior Management Personnel and 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 any amendment thereto.

The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under section 178(3) of Companies Act, 2013 is available on the companys website under the head Policy at www.kkalpanagroup.com/investor-relations.php.

Your Directors affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

Board meetings

The Board met Six times during the financial year under review, the details of which are given in the Corporate Governance Report which is annexed and forms a part of this report. The intervening gap between two consecutive Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors Responsibility Statement

Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm 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 had 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 the financial year and of the profit and loss of the company for that period;

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

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

Statutory Auditors & Audit

The Statutory Auditors of the Company, M/s. B. Mukherjee & Co, Chartered Accountants, Kolkata (Firm Registration No. 302096E), were appointed as Statutory Auditors of the Company, at the Annual General Meeting of the Company held on 23rd September, 2017, for a period of 5 consecutive years, subject to ratification by members of the Company at every subsequent Annual General Meeting. However, as per the amendment of Section 139 of the Companies Act, 2013, which have been made effective from 07th May, 2018, ratification of the appointment of the auditor is no longer required. Hence the same is not proposed at the ensuing Annual General Meeting. The Statutory Auditors have given a certificate of eligibility and consent that they are eligible and willing to continue as Statutory Auditors of your company for the Financial Year 2020-21.

Further, the Auditors have confirmed that they have undergone the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the ‘Peer Review Board of ICAI. The Auditors Report on the accounts for the year ended 31st March, 2020 does not contain any qualification, 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 Internal Auditors pursuant to the provisions of Section 138 of the Companies Act, 2013 for the financial year 2020-2021, on the recommendation of Audit Committee. The Quarterly Internal Audit Report submitted by Internal Auditors during the Financial Year 2019-20 have been reviewed by the Audit Committee and Board, at their respective meetings and the suggestions therein implemented to the extent possible.

Cost Auditors & Cost Audit

Pursuant to section 148 of the Companies Act, 2013 and subject to notification of rules thereunder, the Board of Directors, on the recommendation of the audit committee, has appointed M/s. D. Sabyasachi & Co. (Membership N0. 00369), Cost Accountants, 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 the prescribed limits and they are free from any disqualifications as provided in section 141 of the Companies Act, 2013. The Cost Audit Report for the Financial Year 2019-20 does not contain 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 the Financial Year 2020-21. The report of the Secretarial Auditors for the Financial Year 2019-20 in Form MR-3 is annexed herewith as Annexure 1 to this report. The report is self-explanatory and does not call for any further comments. The company does not have any material subsidiary company and hence the provisions of Secretarial Audit for material unlisted company, pursuant to Regulation 24A of SEBI (listing Obligations and Disclosure Requirements), Regulations, 2015, as notified by SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 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 that listed companies shall additionally, on an annual basis, require a check by Practicing Company Secretary ("PCS") on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, consequent to which, the PCS shall submit a report 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 who has since submitted his report to the Board which was place for consideration by Board members, at its meeting held on 29th June, 2020 and subsequently submitted to the Stock Exchange as per the requirement of the said circular. The Annual Secretarial Compliance 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 does not contain any qualification, reservation or adverse remark.

Policies

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All applicable policies are available under the head Policy on the Companys website:www.kkkalpanagroup.com/investor-relations.php. The policies are reviewed periodically by the Board and updated, based on need and new compliance requirement.

Corporate Social Responsibility (CSR)

The Company has a Corporate Social Responsibility Committee, constitution of which is detailed in the Corporate Governance Report forming part of this Report. 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, the Company 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 expenditures for 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 Companys website www.kkalpanagroup.com. There were no transactions that required disclosure under section 134(3)(h) of the Companies Act,2013, in Form AOC-2, and hence your company has not provided any details of such related party transactions. Further, there are no material related party transactions, during the year under review, with the Promoters, Directors or any Key managerial Personnel which may have a potential conflict of interest with the Company at large. All Related Party Transactions were entered into by the company in its ordinary course of business and were at an arms length. The Related Party Transactions for which Omnibus approval was granted by the Audit Committee and Board of Directors of the Company, at their respective meeting held on 28.05.2019, were reviewed quarterly by the Audit Committee and Board of Directors of the Company, at their subsequent, respective meetings.

Subsidiaries/ Joint Ventures / Associate Companies

M/s. Plastic Processors & Exporter Private Limited is a Subsidiary of your Company and M/s Kkalpana Plastick Limited is the Associate company of your company. During the Financial Year 2019-2020, M/s Plastic Processors and Exporter Private Limited became the wholly owned subsidiary of your Company. Further, the Board, at its meeting held on 28.10.2019, approved the incorporation of a Limited Liability Company as a Subsidiary of the Company, in the name and style of M/s Kkalpana Plas Middeast (FZC) LLC, under the Laws of Sultanate of Oman, however the project was decided to be shelved, at the Boards meeting held on 29.06/2020. Further, at the meeting of Board of Directors of the Company held on 27.01.2020, the incorporation of Wholly Owned Subsidiary in the name and style of M/s Kkalpana Plastic Reprocess Industries Middleeast FZE, in Hamriyah Free Zone, Sharjah, United Arab Emirates was also approved. The financial position of M/s Plastic Processors & Exporter Private Limited (subsidiary) and M/s Kkalpana Plastick Limited (associate) is given in Form AOC- 1 and forms part of the report as Annexure 3. It may be noted that the operations have not yet commenced in the subsidiaries/ 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/s Plastic Processors and Exporter Private Limited. However, wef 18.02.2020 the same has become the Wholly Owned Subsidiary of the Company. Your company also holds 36.23% of equity in the paid up capital of M/s Kkalpana Plastick Limited.

Performance of Subsidiaries, Associates and Joint Venture Companies and their 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. Your Company continues to be one of the leading manufacturers of Polymer compounds in the Country.

Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of the report.

Particulars of Loans, Guarantees and Investments

The Company has not given loans, guarantees or made investments exceeding sixty per cent of the aggregate of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more, as prescribed in Section 186 of the Companies Act, 2013.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are provided in the financial statement (please refer to Note 8 and 36 to the financial statement).

Risks and Concerns:

Risk factor is ingratiated to all business activities of all companies, though in varying degrees and forms. As far as your company is concerned, it has an approved risk management policy by the Board of Directors. Risk evaluation and its management is ongoing process within your company and is periodically reviewed by the Board 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 sector pertaining to plastic compounds. Further, the raw material prices remain volatile. It is very difficult to estimate the near future raw material cost. Technology risks Quality up gradation and product obsolation risks are intertwined with your companys business management. However, the high standard of in-house research and development fortifies the technological risks to some extent. Financial risks

Currency war is looming on the horizon of global economy. This will make the interest rates of banks rise progressively, a factor which will squeeze margin rate of your company. Moreover, it is feared that obtaining bank finance will also be difficult 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, if the 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 risk management throughout the organization. In terms of requirement of the Companies Act, 2013, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically. The Companys business units and corporate functions address risk through an institutionalized approach aligned to Companys objective. This is further facilitated by Internal Audit which is reviewed by the Board.

Significant and material orders passed by the regulators

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and the companys operations:

Disclosure as per Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal)Act,2013.

As per the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, as amended from time to time, the Company has in place Internal Complaints Committee (ICC) which has been setup to redress complaints regarding Sexual Harassment. The following is the summary of 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) are covered under the captioned Act. Your directors are pleased to state that working atmosphere 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 of remuneration, in aggregate of Rupees 1,02,00,000 or more per annum for the financial year 2019-20, or Rs. 8,50,000 or more per month for any part of the Financial Year, as set out in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Therefore, no such details have been provided as required under section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of managerial Personnel) Rules, 2014.

The ratio of remuneration of each Director to the median employees remuneration and other details in accordance with sub-section 12 of Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, forms part of this report and is marked as ‘Annexure 4 Extract of Annual Return

Pursuant to the provisions of section 92(3) and 134(3)(a) of the Companies Act, 2013 (‘the Act) and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is annexed and is marked as ‘Annexure 5.

Vigil mechanism

Pursuant to the requirement of the Section 177(9) of the Companies Act, 2013, the Company has established vigil mechanism which also incorporates a whistle blower policy in terms of the SEBI Listing Regulations. Protected disclosures can be made by a whistle 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 orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of your Company. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable Indian Accounting Standards (Ind AS) and relevant statures. The Internal Auditor and the Audit Committee reviews the Internal Financial Control system periodically.

Green Initiatives in Corporate Governance

Ministry of Corporate Affairs has permitted companies to send electronic copies of Annual Report, notices, etc. to the registered E-mail addresses of shareholders. Your Company has accordingly arranged to send the electronic copies of these documents to shareholders whose email addresses are registered with the Company/ Depository Participant(s), wherever applicable. In accordance with the MCA and SEBI circulars, issued in view of the COVID-19 pandemic, the Company can send only electronic copies of notice of AGM and Annual Report on registered email addresses of the Shareholders available with the company/RTA or the depositories. Hence physical circulation of notice of AGM and Annual Report is dispensed with; electronic circulation through E-mail shall suffice. Further, the company has also availed the E-Mail updation facility through SMS offered by NSDL and CDSL so as to reach the maximum number of members possible. In accordance with the MCA Circulars and SEBI Circulars, in regards to norms to be followed in view of COVID-19, your company has also adopted the facility of E-Voting at the AGM in addition to the Remote E-Voting facility that is provided in accordance with provisions 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 (Listing Obligations & Disclosure Requirements) Regulations, 2015, as amended, and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

Human Resources and Industrial Relations

The Industrial relations of the Company with its personnel has continued to be cordial and amicable. Your Directors acknowledge and appreciate the efforts and dedication of employees to the Company. Your directors wish to place on record the co-operation received from the Staff and Workers, at all levels and at all units.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

Your Company has directed its efforts to reduce energy costs by focusing on energy savings through the best optimization of operations on day to day basis. The Company has used fuels in appropriate mix to attain maximum savings.

As required under Companies (Accounts) Rules, 2014, the particulars of energy conservation, Technology Absorption and Foreign Exchange Earnings and outgo is given in the prescribed format as an Annexure to the Report and marked as Annexure ‘6.

Managements Discussion and Analysis Report

In accordance with Regulation 34 (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 , the Managements Discussion and Analysis Report for the year under review, is presented in a separate section forming part of the Annual Report and marked as Annexure ‘7.

Corporate Governance

The Company is committed to good corporate governance practices. The report on Corporate Governance for the financial year ended March 31, 2019, as per regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of this Annual Report. The requisite Certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is annexed to this Report and marked as Annexure ‘8 Compliance with applicable Secretarial Standards

Your company has complied with the applicable provisions of Secretarial Standard-1, Secretarial Standard- 2 and Secretarial Standard-3 issued by the Institute of Company Secretaries of India.

Acknowledgement

Your Directors take this opportunity to thank the Financial Institutions, Banks, Central and State Government authorities, Regulatory authorities, Stock Exchanges and all the various stakeholders for their continued co-operation and support to the Company. Your Directors also wish to place on record their appreciation to all of the Companys employees and workers at all level for their enormous efforts as well as their collective contribution to the Companys performance.

For and on behalf of the Board of Directors
NarrindraSuranna
Place: Kolkata (DIN: 00060127)
Date:29.06.2020 Chairman& Managing Director