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On behalf of the Board of Directors, it is our pleasure to present the 32nd Annual Report together with the Audited Statement of Accounts of Kkalpana Industries (India) Limited ("the Company") for the year ended March 31, 2017.
Summarized Financial Results
(Rs. In Lacs)
|Net Turnover and other Income||195726.5||187657.88||195726.5|
|Proit before Depreciation, Interest & Tax||9489.63||10925.19||9486.51|
|Less : Depreciation||1313.76||1448.92||1313.76|
|Proit before Tax||3737.14||4371.65||3734.02|
|Less: Exceptional Item||2668.98|
|Less : Provision for Tax||1163.09||563.32||1163.09|
|Proit After Tax||2574.04||1139.35||2570.93|
|Add: Proit brought forward from previous year.||12980.23||11840.90||12980.23|
|Less: Impact of depreciation as per schedule II of Companies Act, 2013||0||0||0|
|Amount Available for Appropriation||15554.29||12980.23||15551.16|
|Proposed inal dividend on Equity Shares||0||0|
|Corporate Dividend Tax||0||0|
|Transfer to General Reserve||0||0|
|Surplus carried to Balance Sheet||15554.29||12980.23||15551.16|
* M/s. Plastic Processors & Exporter Private Limited has become a Subsidiary of your Company during the inancial year under review. As per AS 21 issued by ICAI if on the irst occasion that Consolidated Financial Statements are presented, comparative igures for the previous period need not be presented.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA), vide its notiication in the Oficial Gazette dated 16th Febr uary, 2015, notiied the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. IndAS h as replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014. For your Company, Ind AS is applicable from 1st April, 2017.
Goods and Service Tax
Your Company has been preparing for migrating to GST. Changes across IT systems, supply chain and operations have been made keeping in mind the sweeping changes that GST would bring in. While there are few areas that need to be addressed, the Government has announced an intention to go live on GST w.e.f. 01st July, 2017 and your company will be ready for this transformative reform.
Taking into consideration, increased working capital requirement and expected substantial increase in operation in the year 2017-18, your directors do not recommend any dividend in respect of inancial year ended31st March, 2017.
Operations and State of Companys Affairs
During the year under review, your Company achieved total revenue of Rs. 1957.26 Crores as against total revenue of Rs. 1876.58 Crores in the previous inancial year. The Proit after Tax is Rs. 25.74 Crores as agai nst Rs. 11.39 Crores in the previous year.
The Companys production and sales have recorded a signiicant growth over the previous year. Higher level of Capacity Utilisation backed by strong volume growth, tighter cost control geared the Company to register notable performance for the year.
Transfer of Amount to Investor Education and Protection Fund
Dividend for the inancial year ended 31st March, 2010, which remains unpaid or unclaimed for a period of seven years, will be due for transfer to Investor Education and Protection Fund (IEPF) on 5th November, 2017. Members who have not yet enchased their dividend warrants for the inancial year ended 31st March, 2010 or any subsequent inancial 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 iled 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.29.09.2016), with the Ministry of Corporate Affairs.
Your Company did not invite or accept any deposits from public and /or shareholders during the year under review.
As of 31st March, 2017, there were no unpaid ixed deposits with the Company.
Transfer to General Reserve
The Company proposes not to transfer any funds out of its total proit of 25.74 Crore for the inancial year to the
Research and Development
Your Company recognizes that Research & Development plays a critical role in supporting current operations as well as future growth. Your Company has focused its attention on development of Products that have wide industrial applications, particularly in cable, piping, packaging and footwear industries.
Directors and Key Managerial Personnel
Shri Nirmalendu Guha ceased to be a Director on the Board due to his sudden demise on 23rd April, 2017. The Board of Directors places on record its sincere appreciation of the valuable contributions made by him during his tenure of office.In accordance with the provisions of Section 152 of the Companies Act, 2013, Dr. Pranab Ranjan Mukherjee (DIN -00240758), Whole Time Director (Technical) of the Company, retires by rotation at the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.
Further, the Board, on recommendation of Nomination & Remuneration Committee, approved the reappointment of Mr. Narrindra Suranna as Managing Director for a period of ive years w.e.f 01st August, 2017 andalso the reappointment of Dr. Pranab Ranjan Mukherjee as Whole Time Director (Technical) for a period of one year w.e.f 01st October, 2017, subject to the approval of the members. Accordingly, approval of the members is sought for reappointments of Mr. Narrindra Suranna and Dr. Pranab Ranjan Mukherjee at the forthcoming AGM.
The Board, pursuant to the recommendation of Nomination and Remuneration Committee, at its meeting held on 30th May, 2017, approved the resignation of Mr. A.B. Chakrabarty, Company Secretary of the Company w.e.f. 01st June, 2017 and appointed Ms. Tanvi Panday (ACS-31176) as the Company Secretary and Compliance Officer of the Company w.e.f. 01st June, 2017.
None of the Independent Directors are due for reappointment.
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 composition, number of meetings and attendance at the meeting are provided in the Corporate Governance Report.
Declaration by Independent Directors
The Company has received necessary declarations from each independent Director of the Company, pursuant to provisions of Section 149(7), conirming that they meet the criteria of Independence as prescribed both under Section 149(6) of the Companies Act,2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.
Familiarization Programme for Independent Directors
The Company has organized a familiarization programme 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. All new independent directors inducted into the Board attend the orientation programme. Further, at the time of the appointment of an Independent Director, the company 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)
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, 2017, the Board had 6 members, 3 of whom were executive and 3 were independent directors.
The Companys Policy for selection and appointment of Directors and their remuneration is based on its NRC policy which, inter alia, deals with the manner of selection of the Directors 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. The policy of the Company on directors appointment and remuneration, including the criteria for determining qualiications, positive attributes, independence of a director and other matters, as required undersection 178(3) of Companies Act, 2013 is available on our website under the head Policy at www.kkalpanagroup.com/investor-relations.php.
There has been no change in the policy since last iscal. We afirm that the remuneration paid todirectors is as the per the terms laid out in the Nomination and Remuneration Policy of the Company.
The Board met Six times during the inancial 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 conirm 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 inancial year and of the proit and loss of the company for that period;
(c) the directors had taken proper and suficient care for the maintenance of adequate accounting rec ords 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 inancial controls to be followed by the company and that such internal inancial 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.
Auditors & Audit
The Statutory Auditors of the Company, M/s.B.Mukherjee & Co, Chartered Accountants, Kolkata (Firm Registration
No.302096E), retire at the ensuing Annual General Meeting and have conirmed their eligibility and willingness to accept office, if appointed. The Audit Committee and the Board of Directors recommends the appointment of M/s. B.Mukherjee & Co., Chartered accountants, as the Auditors of the Company for a continuous period of5 (ive) years subject to ratiication by the shareholders at every subsequent Annual General Meeting.
Further, the Auditors have conirmed that they have undergone the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certiicate issued by the Peer Review Board of ICAI. The observations of the Auditors in the Report on Accounts read with the relevant notes are self-explanatory and do not call for any further comments.
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 inancial year 2017-2018.
Pursuant to section 148 of the Companies Act,2013 and subject to notiication of rules thereunder, th e 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 inancial year 2017-18. M/s. D. Sabyasachi& Co. have conirmed that their appointment is within the prescribed limits and they are ee from any fr disqualiications as provided in section 141 of the Companies Act, 2013.
The Board had appointed Mr. Ashok Kumar Daga (Membership No.-FCS- 2699), Practicing Company Secretary, to conduct Secretarial Audit for the Financial Year 2016-17. The report of the Secretarial Auditors for the Financial Year 2016-17 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 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, 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 2016-17 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 (RTP) which is available on Companys website www.kkalpanagroup.com. There were no transactions entered with related parties for the year under review. Thus, disclosure required under section 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key managerial Personnel.
Subsidiaries/ Joint Ventures / Associate Companies
M/s. Plastic Processors & Exporter Private Limited has become a Subsidiary of the Company during the inancial year under review. Your Company has one Associate company. Theinancial position of these two companies is given in Form AOC- 1 and forms part of the report as Annexure 3.
Performance of Subsidiaries, Associates and Joint Venture Companies and their contribution to the overall performance of the Company during the period
M/s Plastic Processors and Exporter Private Limited became subsidiary of your company in the last quarter of 2016-17. There was no operation and hence its performance has not been detailed herein.
The operations, of the associate company, M/s Kkalpana Plastick Limited, remained suspended for the entire Financial Year 2016-17 and, therefore, its performance has not been detailed herein.
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 compound in the Country.
Material changes and commitments affecting the inancial position of the Company
There have been no material changes and commitments affecting the inancial position of the Company between the end of the inancial year to which the inancial 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 inancial statement (please refer to Note 12 and 13 to the inancial statement).
Risk Management Policy
In terms of the requirement of the Act, the Company has developed and implemented the Risk Management Policy and the Audit Committee of the Board reviews the same periodically.
Signiicant and material orders passed by the regulators
During the year under review, no signiicant 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.
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.
Committee has been setup to redress complaints received regarding sexual harassment and all employees are covered under this policy. During the inancial year 2016-17, no complaint of sexual harassment has een received b by the Company.
The Company has devised a policy for performance evaluation of Independent Directors and the Board, which includes criteria for performance evaluation of the non-executive and executive Directors.
Pursuant to the provisions of the 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 questionnaire was prepared after taking into consideration inputs received from the 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 speciic duties, obligations and governance.
A separate exercise was carried out for the evaluation of individual Directors (both Executive and Non executive/ Independent Directors), Board Committees and the Chairman. The Directors evaluation was broadly based on parameters such as, meeting the expectation of stakeholders, guidance and review of corporate strategy, risks, participation 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 Independent Directors also assessed the quality, quantity and timeliness of low of information between the Companys management and the Board. The directorsxpressed overall satisfaction on the evaluation process. Based on the feedback of the Board Evaluation Process, appropriate measures were taken to further improve the process and other aspects.
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 inancial year 2016-17, or Rs. 8,50,000 or more per month ny part of the for a Financial Year, as set out in the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Therefore, no such details have been provided or 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.
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 inancial controls
The internal inancial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.
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 case any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request from the shareholder. For members who have not registered their e-mail addresses, physical copies are sent in permitted mode.
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.
The Company is committed to good corporate governance practices. The report on Corporate Governance for the inancial year ended March 31, 2017, 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 Certiicate from the Statutory Auditors of the Company conirming compliance with the conditions of Corporate Governances annexed i to this Report and marked as Annexure - 8
Your Directors take this opportunity to thank the Financial Institutions, Banks, Central and State Governments 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 personal efforts as well as their collective contribution to the Companys performance.
|For and on behalf of the Board of Directors|
|Chairman& Managing Director|