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Directors Report of Kkalpana lndustries (India) Ltd.

Mar 31, 2014

To the Members,

The Directors have pleasure in presenting the 29th Annual Report on the business and operation of the Company together with Audited Statements of Accounts for the year ended 31st March, 2014.

Summarized Financial Results (Rs In Lacs)

2013-2014 2012-2013

Net Turnover and other Income 124558.53 118009.32

Profit before Depreciation, Interest & Tax 8171.22 6884.99

Less : Depreciation 1508.30 1189.33

Interest 3853.78 2633.80

Profit before Tax 2809.14 3061.86

Less : Provision for Tax 860.71 1064.80

Profit After Tax 1948.43 1997.06

Add: Profit brought forward from previous year. 10491.09 9158.17

Amount Available for Appropriation 12439.52 11155.24

Appropriation

Proposed final dividend on Equity Shares 225.78 225.78

Corporate Dividend Tax 38.37 38.37

Transfer to General Reserve 456.82 400.00

Surplus carried to Balance Sheet 11718.55 10491.09

Operations

During the year under review, your Company achieved total revenue of Rs. 1245.58 Crores including other income of Rs. 13.01 Crores as against total revenue of Rs. 1180.09 Crores including other income of Rs. 12.23 Crores in the previous financial year ended 31st March, 2013. The Profit after Tax was Rs. 19.48 Crore f or the Current year as against Rs. 19.97 Crore in the previous year. Despite of high finance cost and depreciation, your company has been able to generate PAT referred above.

The Company''s Production and Sales have recorded a significant growth over the previous year. Further, the operational efficiency has also resulted in Company''s financials.

The operational performance of the Company has been comprehensibly covered in the Management Discussion and Analysis Report.

Flexible Packaging and Ink Projects

As mentioned in 27th Annual Report, your company, in order to diversify its product concentration risk and take advantage of its in-house compounding knowledge, has set up an ambitious flexible packaging project at Dankuni, West Bengal. Your company has also set up a manufacturing unit of Industrial Ink as backward integration for Flexible Packaging unit. The commercial production has already been started. Your company has also commenced full scale marketing activities with its target customers so that the plant would be able to deliver quality products to prospective customers in multiple segments in the shortest possible time.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 1.20/- per equity share of Rs. 10/- each i.e. 12% for the f inancial year ended March 31st, 2014.The Dividend outgo would amount to Rs.262.40 lacs (inclusive of Dividend Distribution tax ). The dividend, subject to approval of the shareholders at the AGM on 26th September, 2014, wi ll be pai d to the members whose names appear i n the register of members as on the close of the business hours on 21st September, 2014

General Reserve

Out of the amount available for appropriation for the financial year 2013-14, an amount of Rs.4 .57Crore has been transferred to the General Reserve.

Fixed Deposits

Your Company did not invite or accept any deposits from public and /or shareholders during the year under review. As of 31st March, 2014, there were no fixed deposits pending with the Company

Research and Development

Your Company recognizes that Research & Development plays a critical role in supporting current operations as wel l as future growth. Your Company has focused its attention towards development of Products that have wide industrial application particularly in cable, piping packaging and footwear industry.

Insurance

The Company''s pl ants & machineries, factories and movables are adequately insured against various risks.

Directors

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

Mr.Sami r Kumar Paul and Dr. R Dasgupta have resigned from the Directorship of the Company with effect from 01.11.2013 and 31.03.2014 respectively. The Board places on record its appreciation for the services rendered by them to the Company.

According to Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. Nirmalendu Guha (DIN 01154485) as Independent Director for five consecutive years, with effect from 1 st Apri l, 2014 upto 31 st March, 2019.

Suitable resoluti ons for appointment / reappointment of Di rectors, as referred above, wil l be placed for approval of the members in the forthcoming Annual General Meeting. The brief resume and other information of the concerned directors, in terms of the provisions of clause 49 of the Listing Agreement with Stock Exchanges, have been detailed in the notice convening the forthcoming Annual General Meeting.

Your Company has received from the Independent Directors Certificate of Independence, as enumerated in section 149(6) of the Companies Act, 2013.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Compani es Act, 1956, the Di rectors hereby confirm that:

- in preparation of the annual accounts, the applicable accounting standards have been fol lowed. There are no material departures from these applicable accounting standards.

- the directors have selected such accounting policies and applied them consistently and made judgments and esti mates 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, 2014 and its profit for the year ended on that date.

- the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisi ons of the Act for safeguard ng the assets of the Company and for preventing and detecting fraud and other irregularities.

- the directors have prepared the annual accounts on a going concern basis.

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 confirmed their eligibility and willingness to accept office, if reappointed. The Audit Committee and the Board of Directors recommends the re-appointment of M/s. B.Mukherjee & Co., Chartered accountants, as the Auditors of the Company upto the conclusion of next Annual General Meeting.

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 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.

Internal Auditors

The Board of Di rectors 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 2014-2015.

Cost Auditors

As per the Cost Audit Order vide no. 52/26/CAB- 2010 dated November 6, 2012, issued by the MCA under Section 233B of the old Companies Act, 1956, the board had appointed M/s. D. Sabyasachi & Co., Cost Accountants, Kolkata to carry out the cost audit of the Company for the financial year 2012-13. The due date for fi ling the cost audit report for the financial year 2012-13 was September 30, 2013. This report was filed within the prescribed time in the XBRL format with the MCA

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 appointed M/s. D. Sabyasachi & Co., Cost Accountants, Kolkata, as the Cost Auditors of the Company for the financial year 2014-15. Ms. D. Sabyasachi & Co. have confirmed that their appointment is within the limits and they are free from any disqualifications as provided in section 141 of the Companies Act, 2013.

Particulars of Employees

None of the employees employed throughout the year or part of the year who was in receipt of salary of Rs. 5,00,000 /- or more per month or Rs. 60,00,000 /- or more per annum, therefore, no details have been provided or required under section 217 (2A) of the Companies Act, 1956 read with the Company (Particulars of Employees) Rules, 1975.

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 Staffs and Workers at al l 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 opti mizat ion of operati ons on a day to day basi s The Company has used fuels i n appropriate mix to attai n maximum savings.

As required to be disclosed in terms of Section 217(1) (e) of the Companies, Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the prescribed format as an Annexure to the Report and marked as Annexure ''A''.

Management''s Discussion and Analysis Report

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges in India, the Management''s 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 ''B''.

Corporate Governance

The Company believes in maintaining the highest standards of Corporate Governance and has complied with the applicable provisions of Corporate Governance under clause 49 of the Listing Agreement with the stock exchanges. A detailed report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is included in a separate section forming part of the Annual Report and marked as Annexure ''C''.

A certificate from the Auditors of the Company M/s B.Mukherjee & Co., Chartered Accountants, Kolkata, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

Acknowledgement

Your Directors take this opportunity to thank the Financial Institutions, Banks, Central and State Governments authorities, Regulatory authorities, Stock Exchanges and al l 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 Company''s employees and workers at all level for their enormous personal efforts as well as their collective contribution to the Company''s performance.

For and on behalf of the Board of Directors

Place: Kolkata Narrindra Suranna Date: 30th May, 2014 Chairman & Managing Director


Mar 31, 2013

Dear Shareowners,

The Directors take pleasure in presenting the 28th Annual Report on the business and operation of the Company together with Audited financial statements and accounts for the year ended 31 st March, 2013.

Financial Results

(Rs.In Lacs) 2012-2013 2011-2012

Net Turnover and other Income 117913.97 91323.21

Profit before Depreciation, Interest & Tax 6789.63 5788.27

Less: Depreciation 1189.32 883.52

Interest 2538.44 1685.62

Profit before Tax 3061.87 3219.13

Less: Provision for Tax 1064.80 794.77

Prof it After Tax 1997.06 2424.36

Add: Profit brought forward from previous year. 9158.17 7614.88

Amount Available for Appropriation 11155.24 10039.24

Appropriation

Proposed final dividend on Equity Shares 225.78 413.92

Corporate Dividend Tax 38.37 67.15

Transfer to General Reserve 400.00 400.00

Surplus carried to Balance Sheet 10491.09 9158.17

Operations

The Company has once again repeated an impressive performance in polymer compounds business. Revenue from Operations and other income for FY 2012-13 was Rs. 1179.14 Crore against Rs. 913 .23 Crore in the previous year 2011- 12 which is higher by 29.18 % compared to previous year. However, the PAT was Rs. 19.97 Crore for the Current year as against Rs. 24.24 Crore in the previous year. This is mainly due to high finance cost associated with new project at Dankuni.

The Company''s Production and Sales have recorded a significant growth over the previous year. Higher level of Capacity utilization backed by a strong volume growth, tighter cost control geared the company to register notable performance for the year, in spite of a miniscule price increase. Your Company has consciously been following a policy of steady growth in production for last several years.

Expansion

The Company successfully completed the expansion plan at Surangi, with capacity of handling 200000 TPA of the Company''s products. The production capacity of Bhiwadi, Daman and Silvasa - II has been shifted to this unit. This unit is producing various grades of Compounds which include XLPE, HFFR, Filled PP for furniture & appliances. Filled PE Compounds for antifab used for Woven Sack, white and black Master Batches, Rigid and Flexible PVC Compound used for Cable Insulation, Footwear & Pipe Jointing and other value added composition like Zero Halogen Fire Retardant Compound and Engineering Plastics. The Company continued its on-going effort to increase all - round efficiency and reduced cost.

New Projects

As mentioned in 27th Annual Report, your company, in order to diversify its product concentration risk and take advantage of its in-house compounding knowledge, has set up an ambitious flexible packaging project at Dankuni, West Bengal. A state of the art flexible packaging unit, complete with blown and extrusion film lines, printing, lamination, slitting and pouching facilities along with ink making facilities in Bhasa, West Bengal. The total project cost is estimated at Rs 150 Crores. The commercial production is expected to commence from 1st September, 2013. Your company has also commenced full scale pre-marketing activities with its target customers so that the plant, once commissioned, would be able to deliver quality products to prospective customers in multiple segments in the shortest possible time.

Dividend

Your Directors are pleased to recommend a dividend of Rs. 1.20/- per equity share of Rs. 10/- each i.e. 12% for the financial year ended March 31st, 2013.The Dividend outgo would amount to Rs.264.15 lacs (inclusive of Dividend Distribution tax ). The dividend, subject to approval of the shareholders at the AGM on 26th September, 2013, will be paid to the members whose names appear in the register of members as on the date of book closure for the AGM.

General Reserve

Out of the amount available for appropriation for the financial year 2012-13, an amount of Rs.4 Crore has been transferred to the General Reserve.

Fixed Deposits

Your Company has not accepted any fixed deposit during the year under review in terms of Section 58A of the Companies Act, 1956 read with Companies (Acceptance of Deposit) Rules, 1975 and hence no amount of principal or interest was outstanding as at the Balance Sheet date.

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 towards development of Products that have wide industrial application particularly in cable, piping, packaging and footwear industry.

Insurance

The Company''s plants & machineries, factories and movables are adequately insured against various risks. Directors

Mr.lndranil Dasgupta resigned from the Directorship of the Company with effect from 16th November, 2012. Your Directors appreciate the service rendered by him to the Company.

The Board has appointed Mr. Samir Kumar Paul as Additional Director of the Company with effect from 15th February, 2013. Pursuant to section 260 of the Companies Act, 1956, Mr. Samir Kumar Paul would hold office upto the date of the ensuing Annual General Meeting. However, the company has received requisite notice from a member under section 257 of the Companies Act 1956, proposing the name of Mr. Paul as a candidate for the office of director liable to retire by rotation.

Mr. Nirmalendu Guha, Director liable to retire by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, has offered himself for re-appointment.

Suitable resolutions for appointment/ reappointment of Directors, as referred above, will be placed for approval of the members in the forthcoming Annual General Meeting. The brief resume and other information of the concerned directors, in terms of the provisions of clause 49 of the Listing Agreement with Stock Exchanges, have been detailed in the notice convening the forthcoming Annual General Meeting.

Directors'' Responsibility Statement

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

- in preparation of the annual accounts, the applicable accounting standards have been followed. There are no material departures from these applicable accounting standards.

- 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 31 st March, 2013 and its profit for the year ended on that date.

- the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

- the directors have prepared the annual accounts on a going concern basis. Auditors and Auditors'' Report

The Statutory Auditors of the Company M/s. B.Mukherjee & Co, Chartered Accountants, Kolkata, retire at the conclusion of this Annual General Meeting of the Company and confirmed their willingness and eligibility for re-appointment, if made, will be within the limits under section 224(1 B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of section 226 of the Companies Act, 1956.

The Audit Committee and the Board of Directors of your Company recommend the re-appointment of M/s. B.Mukherjee & Co., Chartered Accountants, as the Statutory Auditors of your Company. Members are requested to consider their re- appointment as auditors of your Company to hold office from the conclusion of ensuing AGM to the conclusion of next AGM on remuneration to be decided by the Board of Directors, based on recommendation of the Audit Committee of your Company.

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 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.

Cost Audit

M/s. D. Sabyasachi & Co., Cost Accountants, Kolkata have been appointed as Cost Auditors of the Company for the Financial Year 2013-14, commencing 1 st April, 2013, subject to approval of the Central Government. Compliance Audit relating to ''PVC Compound'' for the year ended 31st March, 2013, has been conducted by the said cost auditors and related report was submitted to the Ministry of Corporate Affairs, Government of India within the prescribed time.

Particulars of Employees

None of the employees employed throughout the year or part of the year who was in receipt of salary of Rs. 5,00,000 /- or more per month or Rs. 60,00,000/- or more per annum, therefore, no details have been provided or required under section 217 (2A) of the Companies Act, 1956 read with the Company (Particulars of Employees) Rules, 1975.

Human Resources and Industrial Relations

The Industrial relations of the Company with its personnel has continued to be cordial and amicable.t 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 Staffs and Workers at all levels and at all units.

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

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

As required to be disclosed in terms of Section 217(1) (e) of the Companies, Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the prescribed format as an Annexure to the Report and marked as Annexure ''A*.

Management''s Discussion and Analysis Report

In accordance with Clause 49 of the Listing Agreement with the Stock Exchanges in India, the Management''s 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''B''.

Corporate Governance

The Company believes in maintaining the highest standards of Corporate Governance and has complied with the applicable provisions of Corporate Governance under clause 49 of the Listing Agreement with the stock exchanges. A detailed report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is included in a separate section forming part of the Annual Report and marked as Annexure ''C.

A certificate from the Auditors of the Company M/s B.Mukherjee & Co., Chartered Accountants, Kolkata, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this Report.

Acknowledgement

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 Company''s employees and workers at all level for their enormous personal efforts as well as their collective contribution to the Company''s performance.

For and on behalf of the Board of Directors

Place: Kolkata Narrindra Suranna

Date: 14th August, 2013 Chairman & Managing Director

 
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