Mar 31, 2018
Dear Members,
The Board takes pleasure in presenting its Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2018.
1. FINANCIAL SUMMARY
(Figs in Rs. in Crores)
Particulars |
2017-18 |
2016-2017 |
Total Income |
337.22 |
361.04 |
Profit before Finance Costs, Depreciation, Tax and Exceptional Items |
12.38 |
18.23 |
Less : Finance Costs |
4.18 |
2.85 |
Less: Depreciation and amortisation |
5.23 |
5.31 |
Less/ (Add): Exceptional items |
- |
- |
Profit before tax |
2.97 |
10.07 |
Less: Tax expenses |
1.17 |
3.32 |
Profit for the Year |
1.80 |
6.75 |
Other Comprehensive income for the year net of tax |
1.75 |
0.69 |
Total Comprehensive income for the year |
3.55 |
7.44 |
2. DIVIDEND
The Board of Directors recommends, for consideration of shareholders at the Annual General Meeting, a Dividend @ 20 % (Rs.2/-per share) on Equity Shares of Rs.10/- each for the year ended 31st March, 2018.
3. TRANSFER TO RESERVES
The Company has not transferred any amount to General Reserves during the current year.
4. OPERATIONS
During the year under review, the Companyâs sale was Rs.328.11 crores (including exports of Rs.75.74 crores) against sales of Rs.354.28 crores (including exports of Rs.57.45 crores) during the previous year. The production was 41968 M.T. against 40544 M.T. during the previous year. Revenue from operations is lower mainly due to lower raw jute prices having consequential impact on prices of Finished Goods.
Raw jute market remained sedate with steady availability during FY18 after having witnessed extreme volatility in Q1/Q2 FY17. We have seen favorable weather conditions during the March/April 2018 sowing time (which saw record number of Kalbaisakhi thundershowers) in the South Bengal belt which is the primary source for sacking jute for the industry. However, unconfirmed reports on sowing area reduction have offset the optimism on raw jute availability. During FY18, Bangladesh imposed a ban on exports of uncut jute to protect its own jute industry.
5. CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013; and as stipulated under the SEBI (Listing Obligations & Disclosure Requirements), 2015, a separate section on corporate governance along with a certificate from the Statutory Auditors of the Company confirming the compliance, is annexed and forms part of this Report.
6. EXTRACT OF THE ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return for the year ended 31st March, 2018 in Form No MGT 9 is annexed as Annexure II, forming part of this Report.
7. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS
The Company has not given any loan, guarantee or made any investments exceeding sixty per cent of its paid-up share capital, free reserve 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.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
A Related Party Policy has been devised by the Board of Directors for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to at the website of the Company www.ludlowjute.com. The Audit Committee reviews all related party transactions quarterly. Necessary approval of the Audit Committee and the Board of Directors were taken wherever required.
Further the members may note that the Company had entered into the following related party transactions at armâs length price:
- Property taken on lease from Kirtivardhan Finvest Services Limited.
- Availing of services like maintenance, upkeep, allied services and facilities, amenities, etc., from Belvedere Gardens Limited.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provisions of Section 134(3)(m) of the Companies Act 2013, read with Rule 8 of the Companies (Accounts) Rules 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed as Annexure I, forming part of this Report.
10. RISK AND MITIGATING STEPS
The Company has identified various risks faced from different areas. As required under the SEBI (Listing Obligations & Disclosure Requirements), 2015, the Board has adopted a Risk Management Policy whereby a proper framework is set up. Appropriate structures are present so that risks are inherently monitored and controlled. A combination of policies and procedures attempts to counter risk as and when they evolve.
The Company has also formed a Risk Management Committee which monitors the risk elements and mitigation procedures at periodical intervals. The constitution and terms of reference are set out in details in the Corporate Governance Report. The risks and its mitigating factors are discussed by the Committee and subsequently placed before the Board.
11. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Composition and terms of reference of the Corporate Social Responsibility Committee have been furnished in the Corporate Governance Report, forming part of this Report. The said policy may be referred to on the Companyâs official website www.ludlowjute.com.
The Company wishes to inform the members that it is well aware and taking care of its social responsibilities and during the year the gross amount spent by the Company as CSR expenditure is Rs.5.62 Lacs.
In terms of provisions under Section 135 of the Companies Act, 2013, the CSR expenses to be incurred by the Company during the year 2017-18 was Rs.8.60 lakhs. The Company complied with all the necessary provisions of the Companies Act, 2013, by spending the said amount on the activities as identified and approved by the CSR Committee.
12. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
A Vigil Mechanism/Whistle Blower Policy has been formulated by the Company for its Directors and Employees. The policy allows intimation by affected persons in good faith of any concern or misconduct through a written communication. The Audit Committee oversees the Vigil Mechanism for disposal of the complaints. The said policy may be referred to on the Companyâs website www.ludlowjute.com.
13. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. A. C. Mukherjee, Director of the Company, has expressed his desire/intent to resign from the post of directorship of the Company, w.e.f. 8th May, 2018, due to his advancing age and on health grounds. He has been serving as Director since 14th March, 1996. The Board has taken note and accepted the same. The Board laces on record its deep appreciation of the invaluable contributions made by Mr. A. C. Mukherji during his tenor of 22 (Twenty-two) years as Directors of the Company.
Mr. Bharat Kumar Jalan has been appointed as the Additional Director of the Company w.e.f. 7th May, 2018.
The Board condoled the untimely demise of Mr. L.G. Toolsidass, Director of the Company who passed away on 18th April, 2018. His contribution to the progress of the Company was recognised by the members.
None of the Directors of the Company are disqualified for being appointed as a Director, as specified in Section 164(2) of the Companies Act, 2013.
I. Declaration from Independent Directors on Annual Basis
The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.
II. Nomination and Remuneration Policy
The Company follows a policy on nomination and remuneration of Directors and Senior Management Employees. The Nomination and Remuneration Committee reviews the composition and diversity of the Board, keeping in view the requirements of Companies Act, 2013 and Listing Agreement and recommends to the Board, appointment/reappointment of eligible personnel including their terms of appointment and remuneration. The Nomination and Remuneration Policy including criteria for determining qualifications, positive attributes and independence of a Director has been formulated. The said policy may be referred to on the Companyâs website www.ludlowjute.com.
The performance of the Board has been evaluated as per the policy laid down in that regard.
III. Ratio of Remuneration of each Director
Details of Ratio of Remuneration of each Director to the median employeeâs remuneration is given Annexure IV, forming part of this Report.
14. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Directorsâ Responsibility Statement, it is hereby confirmed:
a) That in the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards had been followed;
b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were responsible 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/loss of the Company for that period;
c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) That the Directors have prepared the accounts for the financial year ended 31st March, 2018, on âa going concernâ basis;
e) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;
f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
15. BOARD MEETINGS
The Board of Directors of the Company met four times during the financial year ended 31st March, 2018, at a gap not exceeding one hundred and twenty days as per Section 173 of the Companies Act, 2013. Details are available in the Corporate Governance Report forming part of this Report.
16. AUDIT COMMITTEE
The composition and terms of reference of the Audit Committee have been furnished in the Corporate Governance Report forming a part of this Report. There have been no instances where the Board has not accepted the recommendations of the Audit Committee.
17. PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of remuneration exceeding the limit as prescribed under Section 134 of the Companies Act, 2013.
18. FIXED DEPOSIT
Your Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
19. SUBSIDIARY COMPANIES
During the year no Company became or ceased to be a subsidiary, joint venture partner or associate of the Company.
The Performance and Financial position of the subsidiaries are as hereunder: (âin 000)
Financial Position |
Sijberia Industries Ltd. |
Ludlow Exports Ltd. |
Reporting Currency |
INR |
INR |
Share Capital |
10440 |
2500 |
Other Equity |
11372 |
715 |
Total Assets |
21824 |
3268 |
Total Liabilities |
21824 |
3268 |
% of Shareholding |
53.91 |
100 |
Performance |
Sijberia Industries Ltd. |
Ludlow Exports Ltd. |
Turnover |
1148 |
188 |
Profit before Tax |
193 |
146 |
Provision for Taxation |
57 |
38 |
Profit after Tax |
136 |
108 |
20. CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements), Regulations 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited Consolidated Financial Statements together with Auditorsâ Report form part of the Annual Report.
21. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
No material changes and commitments affecting the Financial Position of the Company have occurred between 31st March, 2018 and the date of Boardâs Report.
22. LISTING WITH STOCK EXCHANGE
Your Company is listed with Bombay Stock Exchange Limited and has paid listing fees for the financial year 2018-19.
23. STATUTORY AUDITORS
In the 38th AGM held on 4th September, 2017, M/s. J. K. Agarwal & Associates., Chartered Accountants, had been appointed as Statutory Auditors of the Company for a period of five years. Ratification of the appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM.
Further, the report of the Statutory Auditors along with notes to Schedules is enclosed with this Annual Report. The observations made in the Auditorsâ Report are self explanatory and therefore do not call for any further comments.
24. COST AUDITORS
As per directives of the Central Government and in pursuance to the provisions of Section 148 of the Companies Act, 2013 read with Rules framed there under, the Company is required to carry out an audit of Cost Accounts maintained by the Company in respect of each financial year. Our serving Cost Auditorsâ firm, M/s. Prasad & Co., had been dissolved due to the death of one of its partners. On recommendation of the Chairman of the Audit Committee, M/s. SPK Associates., Cost Accountants, having the surviving partner of erstwhile M/s.Prasad & Co. as a Partner, has been appointed as the new Cost Auditor of the Company to conduct the audit of Cost Records of your Company for the financial year 2018-19. The remuneration proposed to be paid to them, recommended for ratification by the Audit Committee, requires ratification by the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM.
25. SECRETARIAL AUDIT:
In terms of Section 204 of the Act and Rules made thereunder, Mr. B.N. Khandelwal, Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure III to this Report. The Report is self explanatory.
26. ENVIRONMENT AND SAFETY
Pioneering green business practices is the buzzword today. Your Company firmly believes in environment protection and conservation of natural resources to the extent possible. We have taken initiatives to produce eco-friendly products while complying with environment and pollution standards. Safety, in all aspects of manufacturing, is given full attention by the Company. The Company has also obtained certification under ISO 14001:2004 for its Environmental Management Systems.
27. APPRECIATION
Your Directors wish to place on record their appreciation for the commitment and contributions made by the employees. We would like to express our sincere gratitude to the Banks, Government Authorities, Customers, Dealers, and all Stakeholders for their continued support to the Company. We value the enduring relation and co-operation from all associates.
For and on behalf of the Board
Registered Office:
KCI Plaza, 4th Floor,
23C, Ashutosh Chowdhury Avenue, R.V. Kanoria Ajay Todi
Kolkata - 700 019 Non-Executive Chairman Managing Director
Dated: 7th May, 2018
Mar 31, 2018
DIRECTORS REPORT
TO THE SHARE HOLDERS
The Directors have pleasure in presenting the Fifty Eighth Annual Report, along with the Audited Accounts of the Company for the financial year ended 31st March 2018.
Detailed information on the performance of your Company appears in the Annual Report. A discussion on the operations of the Company is given in the sections titled ''Year in Review'' and ''New Frontiers''. Some of the statutory disclosures, however, appear in this Report. The Report, read along with the other sections, would provide a comprehensive overview of the Company''s performance and plans.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March 2018 is summarized below:
Rs,Rs jn minion)
Particulars |
2017-2018 |
2016-2017 |
Total Income |
3,701.22 |
3,500.41 |
Profit before Depreciation, Finance Cost, Tax and Exceptional items |
364.87 |
512.15 |
Depreciation and Amortisation expenses |
211.88 |
204.32 |
Finance Costs |
70.58 |
32.67 |
Exceptional items |
- |
184.17 |
Profit before Tax |
82.41 |
90.99 |
Less: Tax expenses |
26.41 |
(96.21) |
Profit for the year |
56.00 |
187.20 |
Other Comprehensive income for the year, net of tax |
(23.84) |
1.49 |
Total Comprehensive income for the year |
32.16 |
188.69 |
OVERVIEW
During the year under review, the performance of the Company remained under pressure. The Chemicals business suffered from fluctuating commodity prices, particularly in inputs required for the products of the Company. Due to efficient functioning of both of its plants in Ankleshwar, Gujarat and Vizag, Andhra Pradesh, the Company has withstood the pressures in the market. The future, however, is looking much brighter.
The technological up gradation in the Formaldehyde plant at Ankleshwar was completed during this year. The Company is now looking to add a third location for a new plant in Andhra Pradesh.
In the solar power segment, generation continues to be good.
A brief description of the operations of the subsidiaries of the Company appears later in this report.
SCHEME OF AMALGAMATION
The Board of Directors, in its Meeting held on 18th May 2018, has approved a Scheme of Amalgamation for the amalgamation of the Company''s wholly owned subsidiary, Pipri Limited with the Company with effect from 1st April 2018, subject to necessary statutory and regulatory approvals, including sanction of the Hon''ble National Company Law Tribunal. The amalgamation will enable pooling and more effective utilization of the combined resources thereby benefiting the Company, its shareholders and all concerned.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments have occurred after the close of the financial year 2017-18 till the date of this Report, which affect the financial position of the Company.
DIVIDEND
The Board of Directors recommends, for consideration of the shareholders at the Annual General Meeting, a Dividend @ 30% (Rs. 1.50 per share) on Equity Shares of Rs. 5/- each for the financial year ended 31st March 2018.
CREDIT RATINGS
CARE Ratings Limited (CARE) has reaffirmed CARE A (Single A Plus) rating for the long-term bank facilities of the Company.
CARE has also reaffirmed CARE A1 (A One Plus) ratings for the short-term bank facilities and Commercial Paper.
CONSOLIDATED FINANCIAL STATEMENT
As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and provisions of the Companies Act, 2013, the audited Consolidated Financial Statement for the year ended 31st March 2018 has been annexed with the Annual Report.
DEPOSITS
During the year under review, the Company has not accepted any deposits from the public and that as at the end of the year there were no outstanding deposits under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with respect to financial statements. The policies and procedures adopted by the Company ensure prevention and detection of frauds and errors, accuracy and completeness of the records and timely preparation of reliable financial statements. No reportable material weakness in the design or operation was observed during the year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on 14th November 2017, has re-appointed Shri R. V. Kanoria (DIN: 00003792) as the Managing Director of the Company for further period of three years with effect from 10th January 2018, subject to the approval of the shareholders of the Company.
On the recommendation of the Nomination and Remuneration Committee, the Board of Directors, at its meeting held on 18th May 2018, has appointed Shri Sidharth Kumar Birla (DIN: 00004213) as an Additional Director of the Company in the category of Independent Director, not liable to retire by rotation, for a period of 5 consecutive years with effect from 18th May, 2018, subject to the approval of the shareholders.
Shri Sidharth Kumar Birla has given his consent to act as Director and declared that he is eligible for appointment as a Director and meets the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 (âActâ) and the Listing Regulations.
In the opinion of the Board, Shri Sidharth Kumar Birla fulfills the conditions for appointment as Independent Directors as specified in the Act and the Listing Regulations and is also independent of the Management.
As per Section 161 of the Companies Act, 2013, Shri Sidharth Kumar Birla as an Additional Director holds office up to the date of the 58th Annual General Meeting. The necessary resolution for his appointment as an Independent Director of the Company, not liable to retire by rotation, for a period of 5 consecutive years with effect from 18th May 2018, is being placed at the 58th Annual General Meeting for the approval of the shareholders. The Board of Directors recommends appointment of Shri Sidharth Kumar Birla as a Director in the interest of the Company.
Shri S. V. Kanoria (DIN: 02097441) retires by rotation at the ensuing AGM, under the applicable provisions of the Act, and being eligible, offers himself for appointment as a Director of the Company.
None of the Directors of the Company is disqualified for being appointed as a Director, as specified in Section 164(2) of the Act.
Additional information, pursuant to the Listing Regulations, in respect of Directors seeking appointment/re-appointment is given in the AGM Notice of the Company.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from all the Independent Directors of the Company, confirming that they meet the criteria of independence, as prescribed under the Companies Act, 2013 and the Listing Regulations.
PERFORMANCE EVALUATION
The Company has framed the criteria for performance evaluation of Independent Directors, the Board, the Board Committees and other individual Directors. Criteria for performance evaluation of the Chairman & Managing Director, Executive Director and Non-Independent Director have also been framed.
The criteria for performance evaluation of Directors among others includes factors such as preparation, participation, engagement, personality and conduct, value addition, strategic planning and vision, team spirit and consensus building, leadership quality, understanding and focus on key business issues, independent thinking and judgment, quality of analysis, experience and business wisdom, management qualities, awareness, motivation, integrity, ethics and receptivity. The criteria for evaluating the Board''s functioning/effectiveness inter alia includes its structure, strategic review, business performance review, internal controls, process and procedures.
On the basis of the criteria framed, a process was followed by the Board for evaluating the performance of individual Directors, its own performance and its Committees. The Nomination and Remuneration Committee also evaluated the performance of every individual Director. The Independent Directors in their separate Meeting also carried out the performance evaluation of the Chairman & Managing Director, Executive Director and other non-independent Director as well as the Board of the Company. The Directors expressed overall satisfaction on the performance and functioning of the Board, its Committees and the Directors.
FAMILIARISATION PROGRAMMES
The details of programmers to familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model/procedures/processes of the Company, etc. through various programmers are put on the website of the Company and can be accessed at the link: http://www.kanoriachem.com/images/FamPro.pdf.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the Financial Year 2017-18, the Company held four Meetings of the Board of Directors. The details of the Meetings and attendance of each of the Directors thereat are provided in the Report on Corporate Governance forming part of the Annual Report. The maximum gap between any two consecutive Board Meetings did not exceed 120 days.
AUDIT COMMITTEE
The Audit Committee of the Company comprises of Shri Amitav Kothari, Shri H. K. Khaitan and Prof. S. L. Rao, Independent Directors, and Shri R. V. Kanoria, Chairman & Managing Director of the Company. Shri Amitav Kothari is the Chairman of the Committee. The terms of reference of the Committee have been provided in the Corporate Governance Report.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee of the Company comprises of Shri H. K. Khaitan and Shri Amitav Kothari, Independent Directors and Shri S. V. Kanoria, Wholetime Director of the Company. Shri H. K. Khaitan is the Chairman of the Committee. The terms of reference of the Committee have been provided in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Company comprises of Prof. S. L. Rao, Shri H. K. Khaitan, Shri Ravinder Nath and Shri G. Parthasarathy, Independent Directors, and Shri R. V. Kanoria, Chairman & Managing Director of the Company. Prof. S. L. Rao is the Chairman of the Committee. The terms of reference of the Committee have been provided in the Corporate Governance Report.
The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated the Nomination and Remuneration Policy, which contains the matters with regard to criteria for appointment of Directors and determining Directors'' independence and policy on remuneration for Directors, Senior Managerial Personnel and other employees, and the same may be accessed at the Company''s website at the link: http://www.kanoriachem.com/images/NomRemPol.pdf.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee of the Company comprises of Smt. Madhuvanti Kanoria, a Director, Shri R. V. Kanoria, Managing Director and Shri
H. K. Khaitan, an Independent Director. Smt. Madhuvanti Kanoria is the Chairperson of the Committee. The terms of reference of the Committee have been provided in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company acts as a good Corporate Citizen and as its philosophy always strive to conduct its business in inclusive, sustainable, socially responsible, ethical manner and to continuously work towards improving quality of life of the communities. The Company has in place a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. The Corporate Social Responsibility Policy of the Company enables it to continue to make responsible contribution towards welfare of the society.
Initially, the Company''s focus will be on the following areas:
- Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly and the differently baled and livelihood enhancement projects.
- Empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens.
- Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation.
The Company may also undertake other need based initiatives in compliance with Schedule VII to the Companies Act, 2013.
The CSR Policy may be accessed on the Company''s website at the link: http://www.kanoriachem.com/images/CSRPol.pdf.
During the year, the Company has spent Rs. 1.80 million on the CSR activities.
The Annual Report on the CSR activities, pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided as Annexure to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is a part of the Annual Report.
SUBSIDIARIES
APAG Holding AG, Switzerland (âAPAGâ) and Pipri Limited are the wholly owned subsidiaries of the Company. Kanoria Africa Textiles Plc, Ethiopia is a subsidiary of the Company. During the year, APAG incorporated a new wholly owned subsidiary in Canada by the name of APAG Electronic Corp., to set up a manufacturing plant to cater to the North American market. Further, APAG Electronic S. De R.L. De C.V. and APAG Services S. De R.L. De C.V., the wholly owned subsidiaries of APAG, in Mexico which were not in operation were liquidated. APAG now has APAG Electronic AG, APAG Electronic s.r.o, CoSyst Control Systems GmbH, APAG Electronic LLC and APAG Elektronik Corp. as its wholly owned subsidiaries.
The performance of the Automobile Electronics business in Europe, carried out by APAG Group has been exceedingly good during the year and strategic initiatives have proved to be rewarding. In a span of five years, the turnover of this business has increased by over 250%. The bottom line is also showing commensurate growth.
The Denim plant of Kanoria Africa Textiles Plc. in Ethiopia is now showing signs of turning the corner. The most difficult issues of labour turnover and consistent quality have been largely overcome. In order to align the product mix to current market requirements, fresh investments are being made for adding a ring spinning section. Further, the company is also getting into integrated manufacturing by adding garmenting in a small way. The loss during the year is much lower than the previous years and further improvement in performance is expected in the coming years.
A report on the performance and financial position of the subsidiaries of the Company, as per the Companies Act, 2013, is provided in the Annual Report and hence, the same is not repeated here for the sake of brevity.
The Policy for determining Material Subsidiaries as approved by the Board may be accessed on the Company''s website at the link: http://www.kanoriachem.com/images/MatSub.pdf.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED
Details of loans given, investments made, guarantees given and securities provided as covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Note No. 36 of the Standalone Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm''s length basis. None of the transactions with any of the related parties were in conflict with the Company''s interest. The Company had not entered into any transaction with related parties during the year which could be considered material, in terms of materiality threshold for the related party transactions.
The Policy on Related Party Transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.kanoriachem.com/images/RelPar. pdf.
VIGIL MECHANISM
The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. In compliance with the provisions of Section 177(9) of the Companies Act, 2013 and the Listing Regulations, 2015, the Company has in place a Whistle Blower Policy for its Directors and Employees to report concerns about unethical behavior, actual or suspected fraud or violation of applicable laws and regulations and the Company''s Codes of Conduct. The concerns may be reported to the Audit Committee through the Nodal Officer and, in exceptional cases, may also be reported to the Chairman of the Audit Committee. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. During the year under review, no employee was denied access to the Audit Committee.
The Whistle Blower Policy may be accessed on the Company''s website at the link: http://www.kanoriachem.com/images/WhiBlo.pdf.
CORPORATE GOVERNANCE
The Company adheres to good governance practices. Corporate Governance at KCI extends to all stakeholders and is embodied in every business decision. The Company places prime importance on reliable financial information, integrity, transparency, empowerment and compliance with the law in letter and spirit. While Management Discussion and Analysis Report that is an annexure to the Directors'' Report, appears in the Section titled Year in Review in the Annual Report, the Corporate Governance Report and the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance are annexed hereto and form a part of the Directors'' Report.
There is a conscious effort to ensure that the values enshrined in the Codes of Conduct for the Directors and Senior Management Personnel and the Employees respectively, are followed in true spirit across all levels of the Company.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return of the Company as on the financial year ended 31st March 2018 is given in Form no. MGT- 9 as an Annexure to this Report.
AUDITORS AND AUDITORS'' REPORT
As per the provisions of Section 139 of the Companies Act, 2013, M/s. Jitendra K Agarwal & Associates, Chartered Accountants (Firm Registration No. 318086E) were appointed, at the 57th Annual General Meeting of the Company held on 4th September, 2017, as the Statutory Auditors of the Company for a term of 5 years commencing from the conclusion of the 57th AGM till the conclusion of the 62nd AGM.
The Auditors'' Report for the financial year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark.
FRAUD REPORTING
During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013, the Board has, on the recommendation of the Audit Committee, approved the appointment of M/s N. D. Birla & Co., Cost Accountants (Firm Registration No. 000028), Ahmadabad, as the Cost Auditors for conducting the audit of the cost records of the Company for the financial year ending on 31st March 2019, at a remuneration of Rs. 1,45,000/- (Rupees One Lakh Forty Five Thousand only) plus applicable taxes and reimbursement of travelling and other incidental expenses to be incurred in the course of cost audit.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s Vinod Kothari & Co., Practicing Company Secretaries (UIN: P1996WB042300), to conduct Secretarial Audit of the Company for the financial year 2017-18. The Secretarial Audit Report for the financial year 2017-18 is provided as an Annexure to this Report. The Report does not contain any qualification, reservation or adverse remark.
RISK MANAGEMENT
The Company''s management systems, organizational structures, processes, codes of conduct together form the basis of risk management system that governs and manages associated risks. The Risk Management Committee of the Company assesses the significant risks that might impact the achievement of the Company''s objectives and develops risk management strategies to mitigate/minimize identified risks and designs appropriate risk management procedures. The Board does not foresee any risk which may threaten the existence of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO
As required under Section 134 of the Companies Act, 2013 and the rules framed there under, the statement containing necessary information in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in the Annexure to this Report.
EMPLOYEES INFORMATION AND RELATED DISCLOSURES
As required under Section 197(12) of the Companies Act, 2013 read with the Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures of remuneration and other details/particulars of the Directors and employees of the Company are provided in the Annexure to this Report.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development and a safe workplace. Its approach to environment management is guided by the principle of provision of safe working environment through continuous up-gradation of technologies, prevention of pollution and conservation of resources and recycling waste.
As a result of its sustained compliance to Health, Safety, Environment and Quality standards, the Company''s Alco Chemical Divisions at Ankleshwar and Vishakhapatnam are ISO 9001, 14001 and OHSAS 18001 certified.
The Company has a documented Health & Safety Policy that is displayed and communicated to all employees at plant locations. With the view to achieve a ''Zero Accidents'' status, the Company has developed health and safety procedures as well as safety targets and objectives.
The Company also lays thrust on renewable energy sources and solar energy.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The Company''s human resource development is founded on a strong set of values. The policies seek to instill spirit of trust, transparency and dignity among all employees. The Company continues to provide ongoing training to its employees at different levels.
Industrial relations with the employees and workers across all locations of the Company continued to be cordial during the year.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(5) of the Companies Act, 2013:
a) that in the preparation of the annual financial statements for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies have been selected and applied consistently and judgment and estimates have been made 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 2018 and of the profit of the Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and are operating effectively; and
f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the year under review, no case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS
During the year under review, no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication of the employees for their untiring personal efforts as well as their collective contributions at all levels that have led to the growth and success of the Company. The Directors would like to thank other stakeholders including lenders and business associates who have continued to provide support and encouragement.
For and on behalf of the Board,
Registered Office
''Park Plaza''
71, Park Street R. V. Kanoria
Kolkata 700 016 Chairman & Managing Director
Date: 18th May 2018 DIN:00003792
Mar 31, 2016
Dear Members,
The Board takes pleasure in presenting its Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended 31st March, 2016.
1. FINANCIAL SUMMARY (Rs. in crores)
Particulars |
2015-16 |
2014-15 |
Sales excluding excise duty |
351.58 |
230.20 |
Profit before Finance Costs and Depreciation |
17.64 |
(4.58) |
Less : Finance Costs |
3.14 |
4.26 |
Gross Profit |
14.50 |
(8.84) |
Less: Depreciation and amortization |
5.86 |
7.13 |
Profit before Exceptional Items and Tax |
8.64 |
(15.97) |
Less/ (Add): Exceptional items |
- |
9.31 |
Profit before tax |
8.64 |
(6.66) |
Less: Tax expenses |
3.00 |
2.12 |
Profit for the year |
5.64 |
(4.54) |
Add: Balance as per last Financial Statements |
16.25 |
22.21 |
Adjustment for Depreciation (net of tax) |
- |
(0.96) |
Add: Adjustment for tax of earlier year |
- |
0.19 |
Profit available for appropriations |
21.89 |
16.90 |
Appropriations : |
||
General Reserve |
0.28 |
- |
Proposed Dividend on Equity Shares |
1.62 |
0.54 |
Corporate Dividend Tax |
0.33 |
0.11 |
Total |
2.23 |
0.65 |
Balance carried forward to Balance Sheet |
19.66 |
16.25 |
2. DIVIDEND
The Board of Directors recommends, for consideration of shareholders at the Annual General Meeting, a Dividend @ 15% (Rs. 1.50 per share) on Equity Shares of Rs. 10/- each for the year ended 31st March, 2016.
3. TRANSFER TO RESERVES
In view of the gains earned by the Company this year, Rs. 28.20 lacs has been transferred to the General Reserve.
4. OPERATIONS
During the year under review, the Company''s sale was Rs. 355.07 crores (including exports of Rs. 45.93 crores) against sales of Rs. 232.51 crores (including exports of Rs. 44.53 crores) during the previous year. The production was 45372 M.T. against 37195 M.T. during the previous year.
Your Company coped with the challenge posed by the serious dearth of orders in Q1 FY 16 by adopting a proactive approach whereby advance orders booked in Q4 FY15 were serviced in Q1 FY16 at a time when Government orders had dried up. This enabled us to increase production as well as tide over an otherwise difficult situation when several other mills closed down in the period May-July, 2015.
On the export front, yarn exports continue to suffer from competition from Bangladeshi export subsidy supported yarn produced with unregulated, exploited low cost labour. The spurt in raw jute prices in India in Q3 FY16 coupled with the ban on raw jute exports from Bangladesh in November, 2015 further caused an unfavorable situation.
5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
i) Industry Structure And Developments
Encouragement of eco-friendly jute packaging via JPM (Jute Packaging Materials) Act, 1987 was continued in the year gone by. However, due to acute shortage of raw jute after a second successive poor crop year, prices of raw jute increased rapidly from December 2015. As a corrective measure, Government of India diverted orders equivalent to 5.5 lac bales of jute sacking to synthetics. The jute industry also responded proactively in FY16 and a lighter 580 gms jute sacking bag was developed to replace the 665 grams bag, thereby conserving raw jute and also substantially reducing the cost of Jute sacks being procured by the Government.
The massive increase in wage costs due to steep increases in Dearness Allowance in FY16 continued to hugely impact the jute Industry.
ii) Opportunities
With increasing focus on climate change and growing environmental awareness, natural fibres are finding favour with the consumers world over. Jute is the most sustainable, renewable, biodegradable and eco-friendly natural fibre with a crop cycle of only 120 days and, thus, it provides sustenance as a extra soil-strengthening cash crop for farmers. It is high time that instead of looking at short term material costs, all stakeholders factor in the huge savings from jute resulting from its biodegradability, thereby avoiding the massive ecological problems that lie ahead due to non-biodegradable toxic waste generated out of synthetic sacking.
We are seeing increased exploration of Jute''s versatile applications for lifestyle and promotional bags, decorative, geo-textiles, apparels, composites, upholstery furnishings, and also non-wovenâs for both technical and non technical purposes.
Greater focus on Jute farming practices like use of certified seeds, row-sowing and mechanized de-weeding would help increase yields thereby enabling reduction in cost of raw jute.
iii) Threats/Risks And Concerns
Following are the major areas of risks and concerns:
a) Dilution of the Jute Packaging Material Act, 1987 remains a primary area of concern and uncertainty; inadequate leverage of the environment-friendly nature of Jute has been a bane for the industry.
b) Availability of skilled labour due to the rigorous nature of work involved. Uncapped increases in dearness allowance (with a 190% of DA payment liability imposed on the jute industry).
c) Lack of ground level direct linkage between wages and productivity in real terms in the jute industry due to legacy issues. Ad hoc absenteeism of workmen in jute mills compounds the problem. Existence of multiple trade unions due to which resolution of workers related issues is time consuming and difficult.
d) As an agricultural product, availability of raw jute depends on the vagaries of nature. Adverse weather conditions may adversely affect raw jute pricing and availability.
e) Continuous canvassing for Government support is essential. Bangladeshi Govt. supports its local jute industry by providing a 10% export subsidy on Jute goods exports along with moratorium on interest payments for investments in jute sector.
f) Duty-free imports dumped from Bangladesh are causing harm to the Indian Jute Industry while Indian Raw Jute importers have to pay 4% Duty on raw jute imports from Bangladesh.
iv) Segment-wise or Product-wise Performance
As the Company''s business activities fall within a single primary business segment, the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India stands complied.
v) Outlook
The industry has welcomed good governance in the monitoring of government procurement of food grain sacking bags which augurs well for the future.
With raw jute prices attaining historically highest levels last year, increased sowing across all jute producing areas in the current crop year has been reported. The Indian Meteorological Department has already predicted a good monsoon in 2016. Given this, the expectation of higher jute production in 2016 brings solace and optimism. We expect record jute production (even beyond 100 lac bales) in case actual weather conditions match MET predictions.
With higher food grains production also expected, higher government sacking offiake is expected. Hence, we expect adequate Government sacking orders for jute despite the possibility of diversion of some quantities to synthetics. However, the export markets for India, particularly Jute Yarn, remain highly competitive for reasons stated earlier.
In the Non-Government domestic markets, serious competition is expected due to dumping by the export subsidy aided and low wage cost assisted Bangladeshi Jute Industry. Increased focus on jute diversified would be the flavor of the year.
vi) Internal Control System and Their Adequacy
The Company has adequate internal control procedures, which provide reasonable assurance with regard to safeguarding the Company''s assets, preventing revenue leakages, promoting operational efficiency by cost control and compliance with various statutory provisions. Audit reports are placed before the Audit Committee on a periodical basis, for review. The Committee actively reviews the adequacy and effectiveness of the internal control systems which are well supplemented by surveillance of Internal Auditors. The Company''s Internal Financial Controls have been diligently studied and the required systems are in place.
vii) Industrial Relations Front
We are happy to inform that industrial relations at your Company remained cordial during the year under review. In addition to various staff welfare schemes, a renewed focus on sanitation and hygiene has been taken up. The Company seriously propagated the importance of the Jute specific PGDJTM course at Calcutta University and we plan to sponsor students for the course as well.
viii) Cautionary Statement
Statements made in this section of the report are based on the prevailing position in the jute industry and market conditions. Actual results might differ from what we perceive with respect to Company''s outlook and performance.
6. CORPORATE GOVERNANCE
The Company has complied with the corporate governance requirements under the Companies Act, 2013; and as stipulated under the SEBI (Listing Obligations & Disclosure Requirements), 2015, a separate section on corporate governance along with a certificate from the Statutory Auditors of the Company confirming the compliance, is annexed and forms part of this Report.
7. EXTRACT OF THE ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return for the year ended 31st March, 2016 in Form No. MGT 9 is annexed as Annexure II, forming part of this Report.
8. PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS
The Company has not given any loan, guarantee or made any investments exceeding sixty per cent of its paid up share capital, free reserve 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.
9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY
A Related Party Policy has been devised by the Board of Directors for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to at the website of the Company www.ludlowjute.com. The Audit Committee reviews all related party transactions quarterly. Necessary approval of the Audit Committee and the Board of Directors were taken wherever required.
Further the members may note that the Company has entered into the following related party transactions at arm''s length price :
- Property taken on lease from Kirtivardhan Finvest Services Limited.
- Availing of services like maintenance, upkeepment, allied services and facilities, amenities, etc., from Belvedre Gardens Limited.
10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNIGS AND OUTGO
Information in accordance with the provisions of Section 134(3)(m) of the Companies Act 2013, read with Rule 8 of the Companies (Accounts) Rules 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed as Annexure I, forming part of this Report.
11. RISK & MITIGATING STEPS
The Company has identified various risks faced from different areas. As required under the SEBI (Listing Obligations & Disclosure Requirements), 2015, the Board has adopted a Risk Management Policy whereby a proper framework is set up. Appropriate structures are present so that risks are inherently monitored and controlled. A combination of policies and procedures attempts to counter risk as and when they evolve.
The Company has also formed a Risk Management Committee which monitors the risk elements and mitigation procedures at periodical intervals. The constitution and terms of reference are set out in details in the Corporate Governance Report. The risks and its mitigating factors are discussed by the Committee and subsequently placed before the Board.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The composition and terms of reference of the Corporate Social Responsibility Committee have been furnished in the Corporate Governance Report, forming part of this Report. The said policy may be referred to on the Company''s official website www.ludlowjute.com.
The Company wishes to inform the members that it is well aware of its social responsibilities. However, CSR in terms of Section 135 of the Companies Act, 2013 was not mandated by the Board in view of impact on the shareholders given the then economic situation of the Company in FY 15 and going into FY 16.
The Board took note that there has been an improvement in the Company''s performance, but the jute industry being volatile in nature, the performance stability would be observed. Identification of activities for CSR is in process and is to be studied and presented to the Board.
13. VIGIL MECHANISM/WHISTLE BLOWER POLICY
A Vigil Mechanism/Whistle Blower Policy has been formulated by the Company for its Directors and Employees. The policy allows intimation by affected persons in good faith of any concern or misconduct through a written communication. The Audit Committee oversees the Vigil Mechanism for disposal of the complaints. The said policy may be referred to on the Company''s website www.ludlowjute.com.
14. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Puja Guin resigned as the Company Secretary of the Company w.e.f. 16th May, 2015 and in her place, Ms. Minu Rohila was appointed as the Company Secretary and Compliance Officer w.e.f. 2nd November, 2015.
None of the Directors of the Company are disqualified for being appointed as a Director, as specified in Section 164(2) of the Companies Act, 2013.
I. Declaration from Independent Directors on Annual Basis
The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.
II. Nomination and Remuneration Policy
The Company follows a policy on nomination and remuneration of Directors and Senior Management Employees. The Nomination and Remuneration Committee reviews the composition and diversity of the Board, keeping in view the requirements of the Companies Act, 2013, and Listing Agreement and recommends to the Board, appointment/re-appointment of eligible personnel including their terms of appointment and remuneration. The Nomination and Remuneration Policy including criteria for determining qualifications, positive attributes and independence of a Director has been formulated. The said policy may be referred to on the Company''s website www.ludlowjute.com.
The performance of the Board has been evaluated as per the policy laid down in that regard.
III. Ratio of Remuneration of each Director
Details of Ratio of Remuneration of each Director to the median employee''s remuneration is annexed as Annexure IV, forming part of this Report.
15. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed:
a) That in the preparation of the annual accounts for the financial year ended 31st March, 2016, the applicable Accounting Standards had been followed;
b) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were responsible 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/loss of the Company for that period;
c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) That the Directors have prepared the accounts for the financial year ended 31st March, 2016, on ''a going concern'' basis;
e) That the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;
f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
16. BOARD MEETINGS
The Board of Directors of the Company met four times during the financial year ended 31st March, 2016, at a gap not in exceeding one hundred and twenty days as per Section 173 of the Companies Act, 2013. Details are available in the Corporate Governance Report forming part of this Report.
17. AUDIT COMMITTEE
The composition and terms of reference of the Audit Committee have been furnished in the Corporate Governance Report forming part of this Report. There have been no instances where the Board has not accepted the recommendations of the Audit Committee.
18. PARTICULARS OF EMPLOYEES
No employee of the Company was in receipt of remuneration exceeding the limit as prescribed under Section 134 of the Companies Act, 2013.
19. FIXED DEPOSIT
Your Company has not accepted any deposits from public in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance and Deposits) Rules, 2014.
20. SUBSIDIARY COMPANIES
During the year no Company became or ceased to be a subsidiary, joint venture or associate of the Company.
The Performance and Financial position of the subsidiaries are as hereunder: (Rs. in 000)
Financial Position |
Sijberia Industries Ltd. |
Ludlow Exports Ltd. |
Reporting Currency |
INR |
INR |
Share Capital |
10440 |
2500 |
Reserves and Surplus |
10795 |
489 |
Total Assets |
21401 |
3172 |
Total Liabilities |
21401 |
3172 |
% of Shareholding |
53.91% |
100% |
Performance |
Sijberia Industries Ltd. |
Ludlow Exports Ltd. |
Turnover |
1351 |
241 |
Profit before Tax |
453 |
219 |
Provision for Taxation |
151 |
68 |
Profit after Tax |
302 |
151 |
Proposed Dividend |
Nil |
Nil |
21. CONSOLIDATED FINANCIAL STATEMENTS
As stipulated by Regulation 33 of the SEBI (Listing Obligations & Disclosure Requirements), Regulations 2015, the Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited Consolidated Financial Statements together with Auditors'' Report form part of the Annual Report.
22. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
No material changes and commitments affecting the Financial Position of the Company have occurred between 31st March, 2016 and the date of Board''s Report.
23. LISTING WITH STOCK EXCHANGE
Your Company is listed with Bombay Stock Exchange Limited and has paid listing fees for the financial year 2016-17.
24. STATUTORY AUDITORS
In the 35th AGM held on 5th September, 2014, M/s Singhi & Co., Chartered Accountants had been appointed as Statutory Auditor of the Company for a period of three years. Ratification of the appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM.
Further, the report of the Statutory Auditor along with notes to Schedules is enclosed to this Annual Report. The observations made in the Auditors'' Report are self explanatory and therefore do not call for any further comments.
25. COST AUDITORS
As per directives of the Central Government and in pursuance to the provisions of Section 148 of the Companies Act, 2013 read with Rules framed there under, the Company is required to carry out an audit of Cost Accounts maintained by the Company in respect of each financial year. In view of the same, M/s Prasad & Co., Cost Accountants have been appointed as Cost Auditors to conduct the audit of Cost Records of your Company for the financial year 2016-17. The remuneration proposed to be paid to them, recommended for ratification by the Audit Committee, requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM.
26. SECRETARIAL AUDIT
In terms of Section 204 of the Act and Rules made there under, Mr. B. N. Khandelwal, Practicing Company Secretary has been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure III to this Report. The Report is self explanatory.
27. ENVIRONMENT AND SAFETY
Pioneering green business practices is the buzzword today. Your Company firmly believes in environment protection and conservation of natural resources to the extent possible. We have taken initiative to produce eco-friendly product while complying with environment and pollution standards. Safety, in all aspects of manufacturing, is given full attention by the Company.
The Company has also obtained certification under ISO 14001:2004 for its Environmental Management Systems.
28. APPRECIATION
Your Directors wish to place on record their appreciation for the commitment and contributions made by the employees. We would like to express our sincere gratitude to the Banks, Government Authorities, Customers, Dealers, and all Stakeholders for their continued support to the Company. We value the enduring relation and co-operation from all associates.
For and on behalf of the Board
Registered Office :
6, Nandalal Basu Sarani
(formerly: Little Russell Street) R. V. Kanoria Ajay Todi
Kolkata - 700 071 Non-Executive Chairman Managing Director
Dated : 9th May, 2016
Mar 31, 2015
THE SHAREHOLDERS
The Directors have pleasure in presenting the fifty fifth Annual
Report, along with the Audited Accounts of the Company for the year
ended 31 st March 2015.
The detailed information on the performance of your Company appears in
the Annual Report. A discussion on the operations of the Company is
given in the sections titled ''Year in Review'' and ''New Frontiers''. Some
of the statutory disclosures, however, appear in this Report. Read
along with the other sections, this would provide a comprehensive
overview of the Company''s performance and plans.
FINANCIAL RESULTS
The financial performance of the Companyforthe year ended 31 st March
2015 is summarised below:
Rs million
2014-15 2013-14
Profit before Depreciation and Amortisation,
Finance Costs,
Exceptional Items and Tax Expenses 419.44 655.19
Depreciation and Amortisation 186.61 153.58
FinanceCosts 64.32 155.32
ProfitbeforeExceptionalltemsandTax 168.51 346.29
Exceptional Items 12.18 -
Profit before Tax 156.33 346.29
TaxExpenses: for earlier years (0.96) -
for Current year (Net) 4.43 73.27
Profit for the year 152.86 273.02
BalanceasperlastAccount 711.91 1,515.57
864.77 1,788.59
Appropriations
Transfer to General Reserve - 1,000.00
Proposed Dividend on Equity Shares 65.54 65.54
Provision for Dividend Tax 13.10 11.14
78.64 1,076.68
Closing Balance 786.13 711.91
OVERVIEW
Sluggish market conditions coupled with very high volatility in raw
material prices affected the performance of the chemical manufacturing
division. Profit margins were under pressure during the year. The
prices of raw materials, however, are now more stable and the margins
have improved.
The solar power segment witnessed stable operations during the year
under review.
The first phase of production in the composite textile plant to
manufacture denim fabrics in Ethiopia by the Company''s subsidiary,
Kanoria Africa Textiles PLC has been delayed.
The learning curve of doing business in an alien geography is proving
to be longerthan anticipated. It is expected that the full plant shall
become operational by August, 2015.
The brownfield expansion of APAG Elektroniks.ro. in the Czech Republic
was completed in record time and the state of the art plant has been
operational since December, 2014.
MATERIAL C HANGES AN D C OMMITMENTS
No material changes and commitments have occurred after the close of
the year till the date of this Report, which affect the financial
position of the Company.
DIVIDEND
The Board of Directors recommends, for consideration of shareholders at
the Annual General Meeting, a Dividend @ 30% (Rs. 1.50 per share) on
Equity Shares of Rs.5/- each forthe year ended 31 st March 2015.
CREDIT RATINGS
Credit Analysis & Research Limited (CARE) has reaffirmed CARE A1 (A
One Plus) rating forthe shortterm facilities of the Company. This is
their highest rating forshort term debt obligations and it signifies
very strong degree of safety fortimely payment of financial obligations
and carries lowest credit risk.
CARE has also reaffirmed CARE AA- (Double A Minus) rating forthe long
term facilities of the Company. This rating signifies high degree of
safety fortimely servicing of financial obligations and carries very
low credit risk.
CONSOLIDATE D FINANCIAL STATEMENT
As per the Companies Act, 2013 and the Listing Agreement with the Stock
Exchanges, the audited Consolidated Financial Statement has been
annexed with the Annual Report.
DEPOSITS
During the year under review, the Company has not accepted any deposits
from the public and that as at the end of the year there were no
outstanding deposits in terms of the Companies (Acceptance of Deposit)
Rules, 2014.
INTERNAL F INANCIAL C ONTROL
The Company has in place adequate internal financial controls with
respectto financial statements. The policies and procedures adopted by
the Company ensure prevention and detection of frauds and errors,
accuracy and completeness of the records and timely preparation of
reliable financial statements. No reportable material weakness in the
design or operation was observed during the year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
ShriA. Vellayan (DIN: 00148891), Prof. S. L. Rao (DIN: 00005675), Shri
G. Parthasarathy (DIN: 00068510), Shri AmitavKothari (DIN: 01097705),
Shri H. K. Khaitan (DIN: 00220049) and Shri Ravinder Nath (DIN:
00062186) were appointed in the last AGM as Independent Directors not
liable to retire by rotation.
Shri B. D. Sureka (DIN: 00049713) ceased to be a Director of the
Company with effect from 5th September 2014, as on retirement by
rotation at the last AGM, he did not seek re-appointment due to health
reasons.
Shri J. P Sonthalia (DIN: 01292249) resigned as a Director of the
Companywith effect from 1st November 2014, dueto pre-occupation and
personal reasons.
The Board puts on records its deep appreciation forthe valuable advice
and contribution received by the Company from Shri B. D. Sureka and
Shri J. P Sonthalia during theirtenure as Directors of the Company.
On the recommendation of the Nomination and Remuneration Committee, the
Board of Directors has re-appointed Shri R. V. Kanoria (DIN: 00003792)
as the Managing Director of the Company for further three years with
effect from 10th January 2015, subject to the approval of the
shareholders of the Company.
Shri T. D. Bahety (DIN: 00031572) retires by rotation at the ensuing
Annual General Meeting (AGM), underthe applicable provisions of the
Companies Act, 2013, and being eligible, offers himself forappointment
as a Directorof the Company.
On the recommendation of the Nomination and Remuneration Committee,
Smt. Madhuvanti Kanoria (DIN: 00142146), spouse of Shri R. V. Kanoria,
Managing Director of the Company, was appointed as an Additional
Directorof the Company by the Board of Directors with effect from 11th
February 2015 and as such she will hold office only upto the ensuing
Annual General Meeting.
The Company has received a notice in writing from a Member along with
the deposit of requisite amount under Section 160 of the Companies Act,
2013, proposing the candidature of Smt. Madhuvanti Kanoria forthe
office of Directorof the Company atthe ensuing AGM.
None of the Directors of the Company is disqualified for being
appointed as a Director, as specified in Section 164(2) of the
Companies Act, 2013.
Additional information pursuant to Clause 49 of the Listing Agreement
with the Stock Exchanges in respect of Directors seeking
appointment/re- appointment is given in the AGM Notice.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from all the Independent Directors
of the Company, confirming that they meet the criteria of independence,
as prescribed under the Companies Act, 2013 and the Clause 49 of the
Listing Agreement with Stock Exchanges. On the basis of such
declarations, the Board is of the opinion that they fulfill the
conditions of Independent Directors, as specified in the Companies Act,
2013 and the Listing Agreement and that they are also independent of
the Management.
PERFORMANCE EVALUAT ION
Pursuanttothe provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Company has framed the criteria for
performance evaluation of Independent Directors, the Board, the Board
Committees and other individual Directors. Criteria for performance
evaluation of the Chairman & Managing Director and Executive Director
have also been framed.
The criteria for evaluation of Directors among others includes factors
such as preparation, participation, engagement, personality and
conduct, value addition, strategic planning and vision, team spirit and
consensus building, leadership quality, understanding and focus on key
business issues, independent thinking and judgment, quality of
analysis, experience and business wisdom, management qualities,
awareness, motivation, integrity, ethics and receptivity.
On the basis of the criteria framed, a process of evaluation was
followed by the Board for evaluation of individual Directors, its own
performance and its Committees. The Nomination and Remuneration
Committee also evaluated the performance of every individual Director.
The Independent Directors in their separate Meeting also carried out
the performance evaluation of the Chairman & Managing Director and
non-independent Director as well as the Board of the Company.
FAMILIARISATION PROGRAMMES
The details of programmes to familiarise the Independent Directors with
the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business
model/procedures/processes of the Company, etc. through various
programmes are put on the website of the Company and can be accessed
atthe link: www.kanoriachem.com/images/Familiarisation%20Programme.pdf.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
During the Financial Year 2014-15, the Company held four Meetings of
the Board of Directors; on 17th May 2014,25th July 2014,1 st November
2014 and 11 th February 2015. The details of the Meetings are provided
in the Report on Corporate Governance.
AUDIT COMMITTEE
The Audit Committee of the Company comprises of Shri Amitav Kothari,
Shri H. K. Khaitan and Prof. S. L. Rao, Independent Directors, and Shri
R. V. Kanoria, Chairman & Managing Director of the Company. Shri Amitav
Kothari is the Chairman of the Committee. The terms of reference of the
Committee have been provided in the Corporate Governance Report.
STAKEHOLDERS RELATI0NSHIP C OMMITTEE
The Stakeholders Relationship Committee of the Company comprises of
Shri H. K. Khaitan, Shri Amitav Kothari, both Independent Directors,
and Shri T. D. Bahety, Wholetime Director of the Company. Shri H. K.
Khaitan is the Chairman of the Committee. The terms of reference of the
Committee have been provided in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Company comprises of
Prof. S. L. Rao, Shri H. K. Khaitan, Shri Ravinder Nath and Shri G.
Parthasarathy, Independent Directors, and Shri R. V. Kanoria, Chairman
& Managing Director of the Company. Prof. S. L. Rao is the Chairman of
the Committee. Theterms of reference of the Committee have been
provided in the Corporate Governance Report.
Pursuant to provisions of Section 178 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement, the Board of Directors of the
Company, based on the recommendation of the Nomination and Remuneration
Committee, has formulated the Nomination and Remuneration Policy, which
contains the matters with regard to criteria for appointment of
Directors and determining Directors independence and policy on
remuneration for Directors, Senior Managerial Personnel and other
employees, and the same may be accessed at the Company''s website at the
link:
www.kanoriachem.com/images/Nomination%20and%20Remuneration%20Policy.pdf.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee of the Company comprises
of Shri T. D. Bahety, Wholetime Director, as the Chairman and Shri R.
V. Kanoria, Managing Director and Shri H. K. Khaitan, an Independent
Director, as its Members.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee has formulated and
recommended to the Board, a Corporate Social Responsibility Policy (CSR
Policy) indicating the activities to be undertaken by the Company,
which has been approved by the Board.
The Company act as a good Corporate Citizen and as its philosophy
always strives to adopt socially inclusive and sustainable way of doing
business. The Corporate Social Responsibility Policy of the Company
would enable it to continue to make responsible contribution towards
society
The CSR Policy may be accessed on the Company''s website at the link:
www.kanoriachem.com/images/CSR%20Policy.pdf.
Initially, the Company has identified the following focus areas of
engagement:
- Eradicating hunger, poverty and malnutrition, promoting health care
including preventive health care and sanitation.
- Promoting education, including special education and employment
enhancing vocational skills especially among children, women, elderly
and the differently abled and livelihood enhancement projects.
- Rural Development activities/projects.
- Empowering women, setting up homes and hostels for women and orphans;
setting up old age homes, day care centres and such other facilities
forseniorcitizens.
- Ensuring environmental sustainability and ecological balance.
The Company may also undertake other need based initiatives in
compliance with Schedule VII to the Companies Act, 2013.
During the year, the Company spent Rs. 0.96 million, which is around
1.90 % of the average net profits of the last three financial years, on
CSR activities. This being the first year of structured implementation
of CSR initiatives, considerable time was spent on identifying
appropriate activities and putting systems in place to ensure effective
implementation of CSR initiatives.
The Annual Report on the CSR activities is provided as Annexure to this
Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis is a part of Annual Report.
SUBSIDIARIES
On acquisition of the balance 10% stake by the Company during the year
in its subsidiary, APAG Holding AG, Switzerland ("APAG"), it has become
a wholly owned subsidiary of the Company. APAG ElektronikAG, the wholly
owned subsidiary of APAG Holding AG and APAG Elektroniks.r.o., the
wholly owned subsidiary of APAG Elektronik AG are the step down
subsidiaries of the Company. Consequent to acquisition of 100% stake in
Cosyst Control Systems GmbH, Germany by APAG Holding AG during the year
2015-16, it has also become the step down subsidiary of the Company.
Pipri Limited is the other wholly owned subsidiary of the Company. The
status of Kanoria Africa Textiles Pic, Ethiopia ("KATP"), has changed
from the wholly owned subsidiary of the Company to a subsidiary of the
Company, on acquisition of shares in KATP by a private equity investor.
A report on the performance and financial position of the subsidiaries
of the Company, as per the Companies Act, 2013, is provided in Note no.
32 of the Consolidated Financial Statements hence not repeated for the
sake of brevity.
The Policy for determining Material Subsidiaries as approved by the
Board may be accessed on the Company''s website at the link:
www.kanoriachem.com/images/Policy%20for%20determining%20Material%20Subsidiaries.pdf.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Details of loans given, investments made, guarantees given and
securities provided as covered underthe provisions of Section 186 of
the Companies Act, 2013 are given in the Note No. 39 of the Standalone
Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on arm''s length basis. None of the transactions
with any of the related parties were in conflict with the Company''s
interest. The Company had not entered into any transaction with related
parties during the year which could be considered material, in terms of
materiality threshold for the related party transactions.
The Policy on Related Party Transactions as approved by the Board may
be accessed on the Company''s website at the link:
www.kanoriachem.com/images/Policy%20on%20Related%20Party%20Transactions.pdf.
VIGIL MECHANISM
The Company promotes ethical behaviour in all its business activities
and has put in place a mechanism of reporting illegal or unethical
behaviour. In compliance with the provisions of Section 177(9) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company
has framed a Whistle Blower Policy for its Directors and Employees to
report concerns about unethical behaviour, actual or suspected fraud or
violation of applicable laws and regulations and the Company''s Codes of
Conduct. The reportable matters may be reported to the Audit Committee
through the Nodal Officer and, in exceptional cases, may also be
reported to the Chairman of the Audit Committee. The confidentiality of
those reporting violations is maintained and they are not subjected to
any discriminatory practice. During the year under review, no employee
was denied access to the Audit Committee.
The Whistle Blower Policy may be accessed on the Company''s website at
the link: www.kanoriachem.com/images/Whistle%20Blower%20Policy. pdf.
CORPORATE GOVERNANCE
The Company adheres to good governance practices. Corporate Governance
at KCI extends to all stakeholders and is embodied in every business
decision. The Company places prime importance on reliable financial
information, integrity, transparency, empowerment and compliance with
the law in letter and spirit. The Management certifies its adherence to
the Listing Agreement with the Stock Exchanges. While Management
Discussion and Analysis Report that is an annexure to the Directors''
Report, appears in the Section titled Year in Review in the Annual
Report, the Corporate Governance Report and the Certificate from the
Auditors of the Company confirming compliance of the conditions of
Corporate Governance are annexed hereto and form a part of the
Directors'' Report.
There is a conscious effort to ensure that the values enshrined in the
Codes of Conduct for the Directors and Senior Management Personnel and
the Employees respectively, are followed in true spirit across all
levels of the Company.
EXTRACTOFANNUAL RETURN
The extract of Annual Return of the Company as on the financial
yearended 31 st March 2015 is given in the Annexure to this Report.
AUDITORS AN DA UDITORS'' REPORT
Messrs Singhi & Co., Chartered Accountants, Statutory Auditors of the
Company, have confirmed their eligibility for being ratified as the
Auditors of the Company at the ensuing AGM of the Company.
The Notes on financial statement referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments. The
Auditors'' Report does not contain any qualification, reservation or
adverse remark.
COST AUDITORS
The Board had approved the appointment of M/s N. D. Birla & Co., Cost
Accountants, Ahmedabad, for conducting the audit of the cost records of
Company forthe financial year 2014-15 relating to Organic/lnorganic
Chemicals, Industrial Alcohol and Solar Power.
The Cost Audit Report of the Company forthe financial year 2013-14 has
been filed with the Ministry of Corporate Affairs within the stipulated
time.
SECRETARIAL AUDITOR
The Board had appointed Vinod Kothari & Co., Practising Company
Secretaries, to conduct Secretarial Auditforthe financial year 2014-15.
The Secretarial Audit Report for the financial year 2014-15 is provided
as Annexure to this Report. The Report is self-explanatory and does not
call for any further comments.
RISK MANAGEMENT
The Company''s management systems, organizational structures, processes,
codes of conduct together form the basis of risk management system that
governs and manages associated risks.The Risk Management Committee of
the Company assesses the significant risks that might impact the
achievement of the Company''s objectives and develops risk management
strategies to mitigate/minimise identified risks and designs
appropriate risk management procedures.
CONSERVAT ION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
As required under Section 134 of the Companies Act, 2013 and the rules
framed thereunder, the statement containing necessary information in
respect of conservation of energy, technology absorption, foreign
exchange earnings and outgo is provided as Annexure to this Report.
REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
Disclosure pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013, read with Rule 5(1)
of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, are provided in the Annexure to this Report.
PARTICULARS OF EMPLOYEES
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, particulars of the employees
concerned are provided in the Annexure to this Report.
AWARDS & RECOGNITION
During the year, the Company was awarded the prestigious ET (Economic
Times) Bengal Corporate Award, 2015 in the category of "Fastest Growing
Company" with turnover between Rs. 300 Crore and Rs. 1,000 Crore.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
During the year under review, no case was filed pursuant to the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development and a safe
workplace. Its approach to environment management is guided by the
principle of provision of safe working environment through continuous
up-gradation of technologies, prevention of pollution and conservation
of resources and recycling waste.
As a result of its sustained compliance to Health, Safety, Environment
and Quality standards, the Company''s Alco Chemical Divisions at
Ankleshwar and Vizag are ISO 9001,14001 and OHSAS18001 certified.
The Company has a documented Health & Safety Policy that is displayed
and communicated to all employees at plant locations. With the view to
achieve a ''Zero Accidents'' status, the Company has developed health and
safety procedures as well as safety targets and objectives.
The Company also lays thrust on renewable energy sources such as
bio-power, wind power and solar energy.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The Company''s human resource development is founded on a strong set of
values. The policies seek to instil spirit of trust, transparency and
dignity among all employees. The Company continues to provide ongoing
training to its employees at different levels.
Industrial relations with the employees and workers across all
locations of the Company continued to be cordial during the year.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(5) of the Companies Act,
2013:
a. that in the preparation of the annual financial statements forthe
year ended 31 st March, 2015, the applicable accounting standards have
been followed along with proper explanation relating to material
departures, if any;
b. that such accounting policies as mentioned in Note no. 1 of the
Notes to the Standalone Financial Statements have been selected and
applied consistently and judgement and estimates have been made 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, 2015 and of the
profit of the Company for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities:
d. thatthe annual financial statements have been prepared on agoing
concern basis;
e. that proper internal financial controls to be followed by the
Company have been laid down and thatthe financial controls are adequate
and were operating effectively; and
f. that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
Your Directors state that no disclosure or reporting is required in
respect of the following matters as there were no reportable
transactions/details on these items during the year under review:
1. Issue of Equity Shares with differential rights as to dividend,
voting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of the
Company underany scheme.
3. Neitherthe Managing Director northe Whole-time Director of the
Company receives Commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or
Courts orTribunals which impact the going concern status and Company''s
operations in future.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication
of the employees for their untiring personal efforts as well as their
collective contributions at all levels that have led to the growth and
success of the Company. The Directors would like to thank other
stakeholders including lenders and business associates who have
continued to provide support and encouragement.
For and on behalf of the Board
Registered Office
''Park Plaza''
71, Park Street R.V. Kanoria
Kolkata - 700 016 Chairman & Managing Director
(DIN: 00003792)
Dated, the 27th day of May 2015
Mar 31, 2014
Dear Shareholders
The Directors have pleasure in presenting their Annual Report and
Audited Accounts along with the Auditor''s Report thereon of the Company
for the year ended 31st March, 2014.
(Rs. in crorer)
2013-2014 2012-2013
FINANCIAL RESULTS
Profit before Depreciation 8.80 17.06
Less : Depreciation 4.64 4.05
Profit for the year 4.16 13.01
Less : Provision for Current Taxation 1.25 2.78
Less: Provision for Deferred Taxation 0.12 1.78
Less : Income Tax for earlier years (0.48) 0.01
Deferred Tax for earlier years 0.59 -
Profit after Tax 2.68 8.44
Add: Balance brought forward from
last year 21.55 17.10
Balance carried forward and
available for appropriation 24.23 25.54
Appropriated as under :
Transfer to General Reserve 0.13 0.84
Proposed Dividend 1.62 2.69
Corporate Dividend Tax 0.27 0.46
Balance carried to Balance Sheet 22.21 21.55
DIVIDEND
In view of the working results during the year, the Board of Directors
are pleased to recommend a dividend of Rs. 1.50 per share (i.e. 15%) on
1,07,73,120 equity shares, aggregating to Rs. 1,61,59,680.00 excluding
Corporate Dividend Tax of Rs. 27,46,338.00 subject to approval of the
members of the Company.
OPERATIONS
During the year under review, the Company''s sale was Rs. 275.74 crores
(including export of Rs. 43.13 crores) against sales of Rs. 275.42
crores (including export of Rs. 66.48 crores) during the previous year.
The production during the financial year was 48501 M.T. against 49190
M.T. during the previous year.
The Indian Jute Industry remained largely affected due to the
Government''s decision to further dilute The Jute Packaging Material
Act, 1987 in respect of mandatory jute packaging for sugar to 20% from
40%. Drop in demand for food grains packaging has resulted in increase
in Finished Goods inventories as well. Drastic production cuts have
been effected in almost all mills in the industry with some mills
forced to suspend production. The Indian Jute Mills Association has
requested various State Government and Central Government authorities
for restoration of 100% reservation for packaging of food grains and
sugar in jute bags.
Export of jute yarn has declined due to competition from subsidized
Bangladeshi exports. Bangladeshi yarn exporters enjoy a 10% export
subsidy on Jute goods. Significantly higher labour and power costs
along with the extra export subsidy granted by Bangladesh Govt. to the
local Jute Industry in Bangladesh, are making the Indian Jute Industry
uncompetitive.
ISO CERTIFICATION
The Company has been recertified under ISO 9001:2008 for all its
products/processes which is valid till 4th August, 2014.
The Company has also been certified under ISO 14001:2004 for its
Environmental Management Systems and this certificate is valid till
21st December, 2014.
DIRECTORS
i. Shri J. K. Bhagat and Shri L. G. Toolsidass retire from the Board by
rotation, and being eligible, offer themselves for reappointment at the
ensuing Annual General Meeting.
ii. Shri Satish Kapur, Shri J. K. Bhagat, Shri A. C. Mukherji, Shri L.
G. Toolsidass, Shri I. P. Poddar, Shri B. Choudhuri, non- executive
directors, whose period of office are liable to determination by
retirement of directors by rotation under the Companies Act, 1956, meet
all the criteria of independence laid down under Section 149(6) and the
Code for Independent Directors in Schedule IV of the Companies Act,
2013.
Accordingly, the Board appointed all the aforesaid directors as
Independent Directors of the Company to hold office for five
consecutive years for a term up to 31st March, 2019, whose period of
office shall not be liable to determination by retirement of directors
by rotation. Their candidatures are proposed by a member of the Company
for the position of Independent Director.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed:
i) That in the preparation of the annual accounts for the financial
year ended 31st March, 2014, the applicable accounting standards have
been followed along with proper explanation relating to material
departures.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that were
responsible 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 of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2014, on ''a going concern'' basis.
CORPORATE GOVERNANCE REPORT
The code of Corporate Governance as per Clause 49 of the Listing
Agreement with the Stock Exchanges, where the shares of the Company are
listed, has been implemented by the Company in its true spirit. The
Company has complied with all the mandatory requirements as prescribed
under the said clause of the Listing Agreement.
A report on the matters specified in the said code of Corporate
Governance, along with a certificate from the Company''s Auditors
confirming compliance is annexed and forms part of the report.
STATUTORY AUDITORS
The Statutory Auditors, M/s. Singhi & Co., Chartered Accountants,
retire at the conclusion of the ensuing Annual General Meeting of the
Company and offer themselves for re-appointment. The Company has
received a certificate from the Auditors to the effect that
re-appointment, if made, would be within the prescribed limit under
Section 139 and other applicable provisions of the Companies Act, 2013.
The Audit Committee and the Board recommends the re-appointment of M/s.
Singhi & Co., Chartered Accountants as Statutory Auditors of the
Company.
COST AUDITORS
As per directives of the Central Government and in pursuance to the
provisions of Section 148 of the Companies Act, 2013 read with rules
framed there under, the Company is required to carry out an audit of
cost accounts maintained by the Company in respect of each financial
year. Accordingly, the Central Government has approved the appointment
of M/s. Prasad & Co., Cost Accountants, to conduct the said cost audit
for the financial year ended 31st March, 2014.
PARTICULARS OF EMPLOYEES
As required under Section 217(2A) of the Companies Act, 1956, and the
Rules made there under, particulars of the employees concerned are
given in the Annexure, which is attached hereto and forms part of the
Directors'' Report.
ENERGY CONSERVATION
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act 1956, read with Companies (Disclosure of Particulars
in Report of Board of Directors) Rules 1988, regarding conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in the Annexure forming part of this Report.
CONSOLIDATED ACCOUNTS
As per the Listing Agreement with the Stock Exchange, Consolidated
Accounts has been annexed with the financial results of the Company.
ACCOUNTS OF SUBSIDIARIES
In view of the general exemption from the applicability of Section
212(8) of the Companies Act 1956, granted by the Ministry of Corporate
Affairs, vide its General Circular No.2/2011 dated 8th February 2011,
the Audited Statement of Accounts, the Reports of the Board of
Directors and Auditors of the Subsidiary Companies are not annexed.
Shareholders who wish to have a copy of the full report and accounts of
the Subsidiaries will be provided the same on receipt of a written
request from them. These documents will also be available for
inspection by any shareholder at the Registered Office of the Company
and also that of its Subsidiaries on any working day during business
hours.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and
safe operations. The Company''s policy requires the conduct of all
operations in such manner so as to ensure safety of all concerned,
compliance of statutory and industrial requirements for environment
protection and conservation of natural resources to the extent
possible.
The Company has also obtained certification under ISO 14001:2004 for
its Environmental Management Systems.
APPRECIATION
Your Directors would like to express their grateful appreciation for
the assistance extended by the Banks, Government Authorities, Dealers,
Customers and Shareholders and to all others who continue to give their
valued assistance to the Company.
For and on behalf of the Board
Registered Office :
6, Nandalal Basu Sarani
(formerly: Little Russell Street) S. S. Kanoria
Kolkata - 700 071 Executive Chairman
Dated : 9th May, 2014 DIN : 00089492
Mar 31, 2013
TO THE SHAREHOLDERS
The Directors have pleasure in presenting the fifty third Annual
Report, along with the Audited Accounts of the Company for the year
ended 31st March 2013.
The detailed information on the performance of your Company appears in
the Annual Report. A discussion on the operations of the Company is
given in the sections titled ''Year in Review'' and ''New Frontiers''. Some
of the statutory disclosures, however, appear in this Report. Read
along with the other sections, this would provide a comprehensive
overview of the Company''s performance and plans.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March
2013 is summarized below:
(Rs.in million)
2012-13 2011-12
Profit before Depreciation and
Amortisation, Finance Costs, 275.76 427.59
Exceptional Items and Tax
Expenses
Less: Finance Costs 68.94 136.01
Depreciation and Amortisation 131.36 157.03
Profit before Exceptional Items and Tax 75.46 134.55
Add: Exceptional Items 3,570.37
Profit before Tax 75.46 3,704.92
Add: Taxation For earlier year 0.04 0.02
Less: Current Tax 10.44 1,055.53
Deferred Tax 17.39 (347.90)
Add: MAT Credit Entitlement 58.90
Profit for the year 47.67 3,056.21
Add: Balance in Profit
& Loss Account 1,549.58 91.51
1,597.25 3,147.72
Less Appropriations
Transfer to General Reserve 5.00 1,500.00
Proposed Dividend on Equity Shares 65.54 84.44
Provision for Dividend Tax 11.14 13.70
81.68 1,598.14
Closing Balance 1,515.57 1,549.58
OVERVIEW
During the year, the Company successfully commissioned a 5 MW Solar
Power Plant in Jodhpur district in the state of Rajasthan. The first
phase of the project constituting of 2.5 MW was completed on 22nd June
2012 and the balance 2.5 MW became operational on 8th February 2013.
The Company set up an automated Resin Plant at Vishakhapatnam, with a
capacity of 3,000 MT per annum of Phenol Formaldehyde resins.
During the year, a wholly owned subsidiary of the Company, Kanoria
Africa Textiles Plc. was incorporated in Ethiopia, Africa. A
manufacturing plant is being set up there to manufacture 12 million
metres of Denim per annum. Necessary land for the project has already
been allotted and preliminary work is progressing satisfactorily. The
Plant is expected to be commissioned by the end of 2014.
The Company acquired 90% stake in APAG Holding AG, Switzerland in the
year 2012. APAG Holding AG, through its wholly owned subsidiary, APAG
Elektronik is engaged in development and sale of electronic and
mechatronic modules and control devices for the automotive, consumer
goods, power tool electronics and building automation industries. The
designing and engineering facility of the company is located in
Switzerland, whereas the manufacturing facility is located in the Czech
Republic. APAG''s performance during the year was noteworthy with
significant new business opportunities in the automotive sector. It now
proposes to increase its production capacity through modernizing its
production line, as well as setting up an additional Greenfield plant
near its existing manufacturing facility in the Czech Republic. During
the year it also strengthened its development team to cater to
prospective new business.
BUYBACK OFFER
During the year, the Company made a Public Announcement on 17th August
2012, for Buyback of its Equity Shares of Rs. 5/- each from the
shareholders from the Open Market, at a maximum price not exceeding Rs.
42/- per Equity Share, for an aggregate amount not exceeding Rs. 50.40
Crore, excluding the transaction cost. The Buyback commenced on 4th
September 2012 and closed on 28th February 2013. The total number of
Equity Shares bought back under the Buyback offer was 12,603,167 and
the total amount utilized in this regard amounted to Rs. 49.42 Crore,
excluding the transaction cost. After the buyback and extinguishment of
its Equity Shares, the paid up Capital of the Company stands at Rs.
218,466,665/-.
Consequent to buyback of its Equity Shares and extinguishment thereof,
the Company has become a subsidiary of Vardhan Limited, a promoter
group company, with effect from 28th December, 2012.
DIVIDEND
The Board of Directors recommends, for consideration of shareholders at
the Annual General Meeting, a Dividend @ 30% (Rs. 1.50 per share) on
Equity Shares of Rs. 5/- each for the year ended 31st March 2013.
CREDIT RATINGS
Credit Analysis & Research Limited (CARE) has reaffirmed CARE A1 (A
One Plus) rating for the short term facilities of the Company. This is
their highest rating for short term debt obligations and it signifies
very strong degree of safety for timely payment of financial
obligations and carries lowest credit risk.
CARE has also reaffirmed CARE AA- (Double A Minus) rating for the long
term facilities of the Company. This rating signifies high degree of
safety for timely servicing of financial obligations and carries very
low credit risk.
FIXED DEPOSITS
The Company has neither accepted nor renewed any Fixed Deposits from
the public during the year and as on 31st March 2013, there were no
outstanding deposits.
CONSOLIDATED ACCOUNTS
As per the Listing Agreement with the Stock Exchanges, Consolidated
Financial Statements have been annexed with the Financial Results of
the Company.
DIRECTORS
Shri T. D. Bahety has been re-appointed as Wholetime Director of the
Company for a period of three years with effect from 20th May, 2013, as
per approval of the shareholders of the Company vide Special Resolution
passed through Postal Ballot on 30th March 2013.
Shri H. K. Khaitan, Shri J. P. Sonthalia and Shri Ravinder Nath,
Directors of the Company, retire by rotation at the ensuing Annual
General Meeting and, being eligible, offer themselves for
reappointment.
Brief resumes of the above Directors, names of other companies in which
they hold directorship, chairmanships and/or memberships of Committees
of the Boards are given in the Notice to the Shareholders and their
shareholdings in the Company are given in the Section on Corporate
Governance.
None of the Directors of the Company is disqualified for being
appointed as Director, as specified in Section 274 (1) (g) of the
Companies Act, 1956.
AUDIT COMMITTEE
The Audit Committee consists wholly of Independent Directors having
requisite knowledge and expertise in finance, accounts and corporate
laws. The terms of reference of this Committee encompass the whole of
the provisions contained in the SEBI Code as well as Section 292A of
the Companies Act, 1956. Prof. S. L. Rao, a Director of the Company,
has been inducted as a Member of the Committee with effect from. 8th
February, 2013. The Committee is chaired by Shri Amitav Kothari and
includes Shri B. D. Sureka and Shri H. K. Khaitan as its other Members.
CORPORATE GOVERNANCE
The Company adheres to good governance practices. Corporate Governance
at KCI extends to all stakeholders and is embodied in every business
decision. The Company places prime importance on reliable financial
information, integrity, transparency, empowerment and compliance with
the law in letter and spirit. The Management certifies its adherence to
the Listing Agreement with the Stock Exchanges. While Management
Discussion and Analysis that is an annexure to the Directors'' Report,
appears in the Section titled Year in Review in the Annual Report, the
Corporate Governance Report and the Certificate from the Auditors of
the Company confirming compliance of the conditions of Corporate
Governance are annexed hereto and form a part of the Directors'' Report.
There is a conscious effort to ensure that the values enshrined in the
Codes of Conduct for the Board of Directors and employees respectively,
are followed in true spirit across all levels of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
As required under the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988, the statements containing
necessary information in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo are annexed hereto and
form a part of the Directors'' Report.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development and a safe
workplace. Its approach to environment management is guided by the
principle of provision of safe working environment through continuous
up-gradation of technologies, prevention of pollution and conservation
of resources and recycling waste. The Company''s highly successful
''Waste to Wealth'' programme at its Alco Chemicals Division at
Ankleshwar, which includes extraction of water from distillery
effluent, generation of power directly from biogas and manufacture of
bio-compost, is a case in point to the proactive approach of the
Company in waste management.
As a result of its sustained compliance to Health, Safety, Environment
and Quality standards, the Company''s Alco Chemical Division at
Ankleshwar and Vizag are recertified under OHSAS 18001 (Occupational
Health & Safety Assessment Series).
The Company has a documented Health & Safety Policy that is displayed
and communicated to all employees at plant locations. With the view to
achieve a ''Zero Accidents'' status, the Company has developed health and
safety procedures as well as safety targets and objectives.
The Company also lays thrust on renewable energy sources such as
bio-power, wind power and solar energy.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The Company''s human resource development is founded on a strong set of
values. The policies seek to instil spirit of trust, transparency and
dignity among all employees and thus have contributed to continuous
growth. The Company continues to provide ongoing training to its
employees at different levels.
Industrial relations with the employees and workers across all
locations of the Company continued to be cordial during the year.
As required under Section 217(2A) of the Companies Act, 1956 and the
rules framed thereunder, the names and other particulars of employees
receiving remuneration above prescribed threshold are set out in the
annexure appended to this Report.
SOCIAL CONTRIBUTION
The Company has continuously strived to make socially useful investment
and corporate social responsibility is an important component of KCI''s
business strategy. Subsequent to the divestment of its Cholr Alkali
manufacturing at Renukoot where the company had a strong CSR programme,
KCI is now in the process of identifying other areas of intervention
and continues to fulfil its larger social commitment.
SUBSIDIARY COMPANIES
In compliance of the conditions of the Ministry of Corporate Affairs''
General Circular no. 2/2011 dated 8th February 2011, granting general
exemption from attaching the documents of its subsidiaries, as
specified under Section 212 of the Companies Act, 1956, with its
Balance Sheet, the Company is not attaching the said documents with
relation to its subsidiary companies, with its Balance Sheet. However,
the said documents of the subsidiary companies are available for
inspection by the members at the Registered Office of the Company and
that of the respective subsidiary companies. The members of the Company
interested in obtaining the said documents may write to the Company
Secretary at the Registered Office of the Company. The consolidated
financial statements of the Company include the financial results of
its subsidiary companies.
Kanoria Africa Textiles Plc., Ethiopia; Africa has become a wholly
owned subsidiary of the Company with effect from 23rd July 2012.
AUDITORS
Messrs Singhi & Co., Chartered Accountants, Auditors of the Company,
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for reappointment. With regard to comments in the Auditor''s
Report, the Note on Accounts referred to in the Auditor''s Report is
self-explanatory.
COST AUDITORS
The Central Government has approved the appointment of the following
Cost Auditors for conducting the cost audit of the Company for the
financial year 2012-13:
(1) For Organic and Inorganic Chemicals - M/s. N. D. Birla & Co., Cost
Accountants, Ahmedabad and M/s. Prasad & Co., Cost Accountants,
Kolkata.
(2) For Industrial Alcohol - M/s N. D. Birla & Co., Cost Accountants,
Ahmedabad.
The Cost Audit Reports of the Company for the financial year 2011-12
have been filed by the Cost Auditors with the Ministry of Corporate
Affairs on 28th February 2013, within the due date.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, the Board of Directors hereby confirms:
i) That in the preparation of the annual accounts, all the applicable
accounting standards have been followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the year ended 31st March 2013.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication
of the employees for their untiring personal efforts as well as their
collective contributions at all levels that have led to the growth and
success of the Company. The Directors would like to thank other
stakeholders including lenders and business associates who have
continued to provide support and encouragement.
For and on behalf of the Board
Registered Office
ÂPark Plaza''
71, Park Street R.V. Kanoria
Kolkata - 700 016 Chairman & Managing Director
Dated, the 23rd day of May 2013
Mar 31, 2012
The Directors have pleasure in presenting the fifty second Annual
Report along with the Audited Accounts of the Company for the year
ended 31st March 2012.
The detailed information on the performance of your Company appears in
the Annual Report. A discussion on the operations of the Company is
given in the section titled Year in Review. Some of the statutory
disclosures, however, appear in this Report. Read along with the other
sections, this would provide a comprehensive overview of the Company's
performance and plans.
FINANCIAL RESULTS
The financial performance of the Company for the year ended 31st March
2012 is summarised below:
(Rs. in million)
Profit before Depreciation
and Amortisation, Finance Costs, 427.59 858.94
Exceptional Items and Tax Expenses
Less: Finance Costs 136.01 232.65
Depreciation and Amortisation 157.03 410.33
Profit before Exceptional Items and Tax 134.55 215.96
Add: Exceptional Items 3,570.37 (1.56)
Profit before Tax 3,704.92 214.40
Add: Taxation For earlier year 0.02 -
Less: Current Tax 1,055.53 42.29
Deferred Tax (347.90) 2.32
Add: MAT Credit Entitlement 58.90 _
Profit for the year 3,056.21 169.79
Add: Balance in Profit & Loss Account 91.51 268.41
3,147.72 438.20
Less: Appropriations
Transfer to General Reserve 1,500.00 20.00
Proposed Dividend on Equity Shares 84.44 281.48
Provision for Dividend Tax 13.70 45.21
1,598.14 346.69
Closing Balance 1,549.58 91.51
OVERVIEW
As already mentioned in the last year's report, the Company divested
its Chloro Chemicals business. The transaction was completed in the
month of May 2011. The Company is in the process of developing new
businesses.
During the year, the Company successfully commissioned 5,600 TPA
Hexamine plant at Vishakhapatnam in the state of Andhra Pradesh, and
enhanced the Hexamine capacity at Ankleshwar by 2,000 TPA. With this,
the Company's combined Hexamine manufacturing capacity at both
locations has increased to 11,600 TPA.
The Company's is setting up a 5 MW Solar Power Project in Jodhpur
District in the state of Rajasthan. The Project is expected to be
commissioned in June 2012.
The Company has acquired 90% stake in APAG Holding AG, Switzerland on
2nd May 2012, at a purchase consideration of CHF 6.39 million. As per
the terms of the Share and Loan Purchase Agreement (SLPA), entered in
this regard on 20th April 2012, as amended vide Addendum Letter dated
30th April 2012, the Company will be acquiring the balance 10% stake by
30th June 2014, on the basis of a pre fixed formula set out in the
SLPA.
APAG Holding AG, through its wholly owned subsidiary, APAG Elektronik
AG, Switzerland, is engaged in development and sale of electronic and
mechatronic modules and control devices for the automotive, consumer
goods, power tool electronics and building automation industries. The
designing and engineering facility of the company is located in
Switzerland, whereas the manufacturing facility is located in the Czech
Republic under a wholly owned subsidiary APAG Electronik s.r.o.
The Company is in the process of setting up a textile manufacturing
unit in Ethiopia which is targeted to be completed by the end of 2013.
DIVIDEND
The Board of Directors recommends, for consideration of shareholders at
the Annual General Meeting, a Dividend @ 30 % (Rs. 1.50 per share) on
Equity Shares of Rs.5/- each for the year ended 31st March 2012.
FOREIGN CURRENCY CONVERTIBLE BONDS
The Company has redeemed the entire outstanding optionally convertible
FCCBs of US$ 20 million on 7th June 2011, as per the terms of its
issue.
CREDIT RATINGS
The Company has been assigned CARE A1 (A One Plus) rating for short
term facilities by Credit Analysis & Research Limited (CARE). This is
their highest rating for short term debt obligations and it signifies
strong degree of safety for timely payment of financial obligations and
carries lowest credit risk.
CARE has also assigned CARE AA- (Double A Minus) rating to the Company
for long term facilities. This rating signifies high degree of safety
for timely servicing of the financial obligations and carries low
credit risk.
FIXED DEPOSITS
The Company has neither accepted nor renewed any Fixed Deposits from
the public during the year and as on 31st March 2012, there were no
outstanding deposits.
CONSOLIDATED ACCOUNTS
As per the Listing Agreement with the Stock Exchanges, Consolidated
Financial Statements have been annexed with the Financial Results of
the Company.
DIRECTORS
Shri J. P Sonthalia ceased to be Managing Director (Designate) - Chloro
Chemicals with effect from the end of business hours on 16th August
2011. However, he continues to be a Director of the Company.
Shri G. Parthasarathy, Shri T. D. Bahety and Shri Amitav Kothari,
Directors of the Company retire by rotation at the ensuing Annual
General Meeting and, being eligible, offer themselves for
re-appointment.
Brief resumes of the above Directors, names of other companies in which
they hold directorship, chairmanship and/or membership of Committees of
the Boards are given in the Notice to the Shareholders and their
shareholdings in the Company are given in the Section on Corporate
Governance.
None of the Directors of the Company is disqualified for being
appointed as Director, as specified in Section 274 (1) (g) of the
Companies Act, 1956.
AUDIT COMMITTEE
The Audit Committee consists wholly of Independent Directors having
requisite knowledge and expertise in finance, accounts and corporate
laws. The terms of reference of this Committee encompass the whole of
the provisions contained in the SEBI Code as well as Section 292A of
the Companies Act, 1956. The Committee is chaired by Shri Amitav
Kothari and includes Shri B. D. Sureka and Shri H. K. Khaitan as its
members.
CORPORATE GOVERNANCE
Good governance practices are ingrained in the business ethos of KCI.
Corporate Governance at KCI extends to all stakeholders and is embodied
in every business decision. The Company places prime importance on
reliable financial information, integrity, transparency, empowerment
and compliance with the law in letter and spirit. The Management
certifies its adherence to the Listing Agreement with the Stock
Exchanges. While Management Discussion and Analysis that is an annexure
to the Directors' Report, appears in the Section titled Year in Review
in the Annual Report, the Corporate Governance Report and the
Certificate from the Auditors of the Company confirming compliance of
the conditions of Corporate Governance are annexed hereto and form a
part of the Directors' Report.
There is a conscious effort to ensure that the values enshrined in the
Codes of Conduct for the Board of Directors and employees respectively,
are followed in true spirit across all levels of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
As required under the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988, the statements containing
necessary information in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo are annexed hereto and
form a part of the Directors' Report.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development and a safe
workplace. Its approach to environment management is guided by the
principle of provision of safe working environment through continuous
up-gradation of technologies, prevention of pollution and conservation
of resources and recycling waste. The Company's highly successful
'Waste to Wealth' programme at its Alco Chemicals Division at
Ankleshwar, which includes extraction of water from distillery
effluent, generation of power directly from biogas and manufacture of
bio-compost, is a case in point to the proactive approach of the
Company in waste management.
As a result of its sustained compliance to Health, Safety, Environment
and Quality standards, the Company's Alco Chemical Division at
Ankleshwar and Vizag are recertified under OHSAS 18001 (Occupational
Health & Safety Assessment Series).
The Company has a documented Health & Safety Policy that is displayed
and communicated to all employees at plant locations. With the view to
achieve a 'Zero Accidents' status, the Company has developed health and
safety procedures as well as safety targets and objectives.
The Company also lays thrust on renewable energy sources such as
bio-power, wind power and solar energy.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The human resource development initiatives of the Company are guided by
a strong set of values and policies and the spirit of trust,
transparency and dignity has contributed to its continuous growth. The
Company's commitment to building meaningful employee engagement has
resulted in significant enhancement in quality and productivity. The
Company continues to provide ongoing training to its employees at
different levels.
Industrial relations with the employees and workers across all
locations of the Company continued to be cordial during the year As
required under Section 217(2A) of the Companies Act, 1956 and the rules
framed thereunder, the names and other particulars of employees
receiving remuneration above prescribed threshold are set out in the
annexure appended to this Report.
SOCIAL CONTRIBUTION
Social welfare and community development are important components of
KCI's Corporate Social Responsibility philosophy and continues to form
a part of its larger social commitment.
SUBSIDIARY COMPANY
In compliance of the conditions of the Ministry of Corporate Affairs'
General Circular no. 2/2011 dated 8th February 2011, granting general
exemption from attaching the documents of its subsidiaries, as
specified under Section 212 of the Companies Act, 1956, with its
Balance Sheet, the Company is not attaching the said documents with
relation to Pipri Limited, the subsidiary of the Company, with its
Balance Sheet. However, the said documents of the subsidiary are
available for inspection by the members at the Registered Offices of
the Company and Pipri Limited. The members of the Company interested in
obtaining the said documents may write to the Company Secretary at the
Registered Office of the Company.
On acquisition of 90% stake in APAG Holding AG, Switzerland by the
Company on 2nd May 2012, it has become a subsidiary of the Company from
that date and, consequently, APAG Elektronik AG, Switzerland, the
wholly owned subsidiary of APAG Holding AG has become a subsidiary of
the Company from that date. APAG Elektronik s.r.o., the wholly owned
subsidiary of APAG Elektronik AG has also become a fellow subsidiary of
the Company from that date.
AUDITORS
Messrs Singhi & Co., Chartered Accountants, Auditors of the Company,
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment. With regard to comments in the Auditor's
Report, the Notes on Accounts referred to in the Auditor's Report are
self-explanatory and therefore does not call for any further comments.
COST AUDITORS
The Central Government has approved the appointment of the following
Cost Auditors for conducting cost audit for the financial year 2011-12:
1) For the Chemical Products - M/s. N. D. Birla & Co., Cost
Accountants, Ahmedabad and M/s. Prasad & Co., Cost Accountants,
Kolkata.
2) For Industrial Alcohol - M/s N. D. Birla & Co., Cost Accountants,
Ahmedabad.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, the Board of Directors hereby confirms:
i) That in the preparation of the annual accounts, all the applicable
accounting standards have been followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the year ended 31st March 2012.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication
of the employees for their untiring personal efforts as well as their
collective contributions at all levels that have led to the growth and
success of the Company. The Directors would like to thank other
stakeholders including lenders and business associates who have
continued to provide support and encouragement.
For and on behalf of the Board
Registered Office
"Park Plaza"
71, Park Street R.V. Kanoria
Kolkata - 700 016 Chairman & Managing Director
Dated, the 11th day of May 2012
Mar 31, 2011
TO THE SHAREHOLDERS
The Directors have pleasure in presenting the fifty-first Annual
Report along with the Audited Accounts of the Company for the year
ended 31st March 2011.
The detailed information on the performance of your Company appears in
two sections of the Annual Report under the titles Year in Review and
Beyond Business. A discussion on the operations of the Company is given
in the section titled Year in Review. Some of the statutory
disclosures, however, appear in this Report. Read along with the other
sections, this would provide a comprehensive overview of the Company's
performance and plans.
FINANCIAL HIGHLIGHTS -THE YEAR IN RETROSPECT
The net sales turnover of the Company during the year under review was
Rs. 4,852.24 million, up 15.21 % against Rs. 4,211.81 million in the
previous year. The operating profit was Rs. 858.94 million compared to
Rs 876.70 million in the previous period. The profit aftertax was Rs.
169.79 million as against Rs. 279.75 million in the previous year.
WORKING RESULTS
(Rs. in million)
2010-11 2009-10
Operating profit 858.94 876.70
Less: Interest & Finance Charges 232.65 232.35
Profit before Depreciation & Tax 626.29 644.35
Less: Depreciation & Amortisation 410.33 399.56
Profit before Exceptional Items & Tax 215.96 244.79
Exceptional Items (1.56) 143.15
Profit before Tax 214.40 387.94
Add: Taxation for earlier years - 0.71
Less: Provision for Taxation - Current 42.29 62.28
- Deferred 2.32 46.62
Net Profit 169.79 279.75
Add: Balance as per last account 268.41 231.87
438.20 511.62
Appropriations
Proposed Dividend on Equity Shares 281.48 84.44
Provision for Dividend Tax 45.21 8.77
Transfer to General Reserve 20.00 150.00
Balance carried to Balance Sheet 91.51 268.41
438.20 511.62
OVERVIEW
During the year, the Company successfully commissioned 105,000 TPA
Formaldehyde plant at Vishakhapatnam in the state of Andhra Pradesh.
With this, the Company's total Formaldehyde manufacturing capacity
increased from 75,000 TPA to 180,000 TPA. The 5,600 TPA Hexamine plant
is expected to be commissioned by June 2011.
As you are aware, the Company has, inter alia, been operating in the
Chloro Chemicals business for nearly five decades. In a move towards
leveraging new opportunity areas and exiting from high volume, low
value products, the Company, vide an Agreement dated 16th April 2011,
has transferred its Chloro Chemicals Division, consisting of
manufacturing plants situated at Renukoot, Uttar Pradesh and Salt Works
at Gujarat, to Aditya Birla Chemicals (India) Limited, by way of slump
sale at a mutually negotiated cash consideration of Rs. 8.30 billion.
The sale has been approved by the shareholders of the Company through
Postal Ballot Voting and the said Division stands transferred to Aditya
Birla Chemicals (India) Limited from the closing of business hours on
23d May 2011. The transaction would enable the Company to expand its
other existing businesses as well as to look for opportunities in new
and related businesses through both organic growth and acquisitions.
During the year, the Company exited from the Joint Venture, for setting
up a flavours and fragrance manufacturing facility with Soluciones
Extractivas Alimentarias S.L.A, Spain.
DIVIDEND
The Board of Directors recommends, for consideration of shareholders at
the Annual General Meeting, a Dividend @ 100 % (Rs. 5.00 per share) on
Equity Shares of Rs.5/- each for the year ended 31st March 2011.
FOREIGN CURRENCY CONVERTIBLE BONDS
As per the terms of issue, the Foreign Currency Convertible Bonds of
US$ 20 million, issued by the Company were optionally convertible into
Equity Shares till the close of business on 27th May 2011. As none of
the FCCBs were converted within the conversion period and are
outstanding, these are redeemable on 7th June 2011.
CREDIT RATINGS
The Company has been reaffirmed PR1 (PR One Plus) rating for short
term facilities by Credit Analysis & Research Limited (CARE). This is
their highest rating for short term debt obligations and it signifies
strong capacity for timely payment of short term debt obligations and
the lowest credit risk.
CARE has also reaffirmed CARE A (Single A Plus) rating to the Company
for long term facilities. This rating signifies adequate safety for
timely servicing of the debt obligations and low credit risk.
FIXED DEPOSITS
The Company has neither accepted nor renewed any Fixed Deposits from
the public during the year and as on 31st March 2011, there were no
outstanding deposits.
CONSOLIDATED ACCOUNTS
As per the Listing Agreement with the Stock Exchanges, Consolidated
Financial Statements have been annexed with the Financial Results of
the Company.
DIRECTORS
Shri B. D. Sureka, Shri A. Vellayan and Prof. S. L. Rao retire by
rotation at the ensuing Annual General Meeting and, being eligible,
offer themselves for re-appointment.
Brief resumes of the above Directors, names of other companies in which
they hold directorship, chairmanships and/or memberships of Committees
of the Boards are given in the notice to the shareholders and their
shareholdings in the Company are given in the Section on Corporate
Governance.
None of the Directors of the Company is disqualified for being
appointed as Director, as specified in Section 274 (1) (g) of the
Companies Act, 1956.
AUDIT COMMITTEE
The Audit Committee consists wholly of Independent Directors having
requisite knowledge and expertise in finance, accounts and corporate
laws. The terms of reference of this Committee encompass the whole of
the provisions contained in the SEBI Code as well as Section 292A of
the Companies Act, 1956. The Committee is chaired by Shri Amitav
Kothari and includes Shri B. D. Sureka and Shri H. K. Khaitan as its
members.
CORPORATE GOVERNANCE
Good governance practices are ingrained in the business ethos of KCI.
Corporate Governance at KCI extends to all stakeholders and is embodied
in every business decision. The Company places prime importance on
reliable financial information, integrity, transparency, empowerment
and compliance with the law in letter and spirit. The Management
certifies its adherence to the Listing Agreement with the Stock
Exchanges. While Management Discussion and Analysis that is an annexure
to the Directors' Report, appears in the Section titled Year in Review
in the Annual Report, the Corporate Governance Report and the
Certificate from the Auditors of the Company confirming compliance of
the conditions of Corporate Governance are annexed hereto and form a
part of the Directors' Report.
There is a conscious effort to ensure that the values enshrined in the
Codes of Conduct for the Board of Directors and employees respectively,
are followed in true spirit across all levels of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
As required under the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988, the statements containing
necessary information in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo are annexed hereto and
form a part of the Directors' Report.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development. The Company's
environment management is guided by the principle of provision of safe
environment through continuous up-gradation of technologies, prevention
of pollution and conservation of resources. Its 'Waste to Wealth'
programme at Ankleshwar substantiates the Company's approach in this
area. Converting waste into reusable water, distillery effluent into
bio-compost and generating energy from biogas are some of the
components of the Company's environment management initiatives.
As a result of its sustained compliance of Health, Safety, Environment
and Quality standards, the Company's Chloro Chemical Division at
Renukoot as well as Alco Chemical Division at Ankleshwar were
recertified under OHSAS18001 (Occupational Health & Safety Assessment
Series) for the year 2010-11.
Both divisions were also recertified with ISO 9001 and IS014001 after
surveillance audit for the year 2010-11.
The Company has established a Health & Safety Policy that is displayed
and communicated to all employees at plant locations. With an aim to
achieve 'Zero Accident' status, the Company has developed health and
safety procedures, as well as safety targets and objectives. The
Company continues to create grass root level awareness on safety
through the concept of Total Productive Maintenance (TPM).
The Company puts thrust on renewable energy sources such as bio-power
and wind power.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The human resource development initiatives of the Company are guided by
a strong set of values and policies. The spirit of trust, transparency
and dignity along with improved working facilities has contributed to
continuous growth of the Company. The Company's commitment to building
meaningful employee engagement has resulted in significant enhancement
in quality and productivity. The Company has been providing necessary
training on 'ongoing basis' to its employees at different levels by
in-house and outside faculty.
Industrial relations with the employees and workers across all
locations of the Company continued to be cordial during the year.
During the year, there was a wage revision for workmen of Chloro
Chemicals Division at Renukoot for a period of 3 years effective from
January 2010.
As required under Section 217(2A) of the Companies Act, 1956 and the
rules framed thereunder, the names and other particulars of employees
receiving remuneration above prescribed threshold are set out in the
annexure appended to this Report.
SOCIAL CONTRIBUTION
Social welfare and community development is at the core of KCI's
Corporate Social Responsibility philosophy and forms part of its larger
social commitment. This is evident from the Company's unique
participatory approach towards community development that has generated
tangible benefits in terms of improved access to water, education and
health facilities as well as opening avenues for self-employment.
SUBSIDIARY COMPANY
The Ministry of Corporate Affairs vide its General Circular no. 2/2011
dated 8th February, 2011 granted general exemption under Section 212(8)
of the Companies Act, 1956, exempting companies from attaching with its
Balance Sheet, the documents of its subsidiaries as specified under
Section 212 of the Companies Act, 1956, subject to fulfilment of
certain conditions. Your Company has fulfilled the required conditions,
including the disclosure of the prescribed information in the
consolidated accounts. Accordingly, the said documents with relation to
Pipri Limited, the subsidiary of the Company are not attached to the
Balance Sheet of the Company. However, the said documents of the
subsidiary are available for inspection by the members at the
Registered Offices of the Company and Pipri Limited. The members of the
Company interested in obtaining the said documents may write to the
Company Secretary at the Registered Office of the Company.
AUDITORS
Messrs Singhi & Co., Chartered Accountants, Auditors of the Company,
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment. The observations of the Auditors are in
the nature of general disclosures and are self-explanatory.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, the Board of Directors hereby confirms:
i) That in the preparation of the annual accounts, all the applicable
accounting standards have been followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the year ended 31st March 2011.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the annual accounts on agoing
concern basis.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication
of the employees for their untiring personal efforts as well as their
collective contributions at all levels that have led to the growth and
success of the Company. The Directors would like to thank other
stakeholders including lenders and business associates who have
continued to provide support and encouragement.
For and on behalf of the Board
R.V. Kanoria
Chairman & Managing Director
Registered Office
'Park Plaza'
71, Park Street
Kolkata-700 016
Mar 31, 2010
The Directors have pleasure in presenting the Fiftieth Annual Report
along with the Audited Accounts of the Company forthe year ended 31s1
March 2010.
The detailed information on the performance of your Company appears in
three sections of the Annual Report under the titles Consolidation,
Year in Review and Beyond Business. A discussion on the operations of
the Company is given in the section titled Year in Review. Some of the
statutory disclosures, however, appear in this Report. Read along with
the other sections, this would provide a comprehensive overview of the
Companys performance and plans.
The net sales turnover of the Company during the year under review was
Rs. 4,211.81 million as against Rs. 4,917.97 million in the previous
year. The operating profit was Rs. 876.70 million compared to Rs
1,149.59 million in the previous period. The profit after tax at Rs.
279.75 million was higher by 91.60 % as against Rs.146.01 million in
the previous year.
WORKING RESULTS
(Rs. in million)
2007-2008 2008-2009
Operating profit 876.70 1,149.59
Less: Interest & Finance Charges 232.35 294.40
Profit before Depreciation & Tax 644.35 855.19
Less: Depreciation & Amortisation 399.56 382.97
Profit before Exceptional Items & Tax 244.79 472.22
Exceptional Items 143.15 (243.43)
Profit before Tax 387.94 228.79
Add: Taxation for earlier years 0.71 0.80
Less: Provision for Taxation - Current 62.28 25.96
- Fringe Benefits - 2.83
- Deferred 46.62 54.79
Net Profit 279.75 146.01
Add: Balance as per last account 231.87 204.42
511.62 350.43
Appropriations
Proposed Dividend on Equity Shares 84.44 84.44
Provision for Dividend Tax 8.77 14.12
Transfer to General Reserve 150.00 20.00
Balance carried to Balance Sheet 268.41 231.87
511.62 350.43
The first phase of the Companys Greenfield project at Vishakhapatnam
for manufacturing 105,000 TPA and 5,600 TPA of Formaldehyde and
Hexamine respectively is in progress and is expected to be commissioned
by September 2010.
The Company also entered into a Joint Venture Agreement with Soluciones
Extractivas Alimentarias S.L.A., Spain. The Company together with its
subsidiary and associates is a minority stakeholder (26%) in the joint
venture for setting up a flavours and fragrance manufacturing facility
at Vishakhapatnam. The work on the project is progressing in phased
manner as per schedule. The first phase of the project is likely to be
completed by the last quarter of 2010.
During the year, there was shut down of one Power Plant at Renukoot
from 25* August 2009 to 19th October 2009 clue to break down of
generator. After repair, the generator again broke down on 28" October
2009. However, the same has been repaired and put to use from 12th
March 2010. Currently it is running at 75-80% capacity. Efforts are
being made to achieve the rated capacity. The generator will be
replaced by a new one.
The Board of Directors recommends, for consideration of shareholders at
the Annual General Meeting, a Dividend @ of 30% (Rs. 1.50 per share) on
Equity Shares of Rs. 5 each that have been allotted up to 30* April,
2010 (being the date of this Directors Report) and any further Equity
Shares, that may be allotted by the Company on conversion of Foreign
Currency Convertible Bonds prior to 15th July 2010 (being the Book
Closure date for the purpose of dividend entitlement), for the year
ended 31sl March 2010.
FOREIGN CURRENCY CONVERTIBLE BONDS
As per the terms of issue, the Foreign Currency Convertible Bonds of
US$ 20 million, issued by the Company are optionally convertible into
Equity Shares at any time from 5" June 2006 to close of business on
27th May 2011 and unless converted, are redeemable on 7th June 2011,
subject to the terms of issue. As at the end of the year, the entire
FCCBs were outstanding.
CREDIT RATINGS
The Company has been assigned PR1 + (PR One Plus) rating for short term
facilities by Credit Analysis & Research Limited (CARE). This is their
highest rating for short term debt obligations and it signifies strong
capacity for timely payment of short term debt obligations and the
lowest credit risk.
CARE has also assigned CARE A+ (Single A Plus) rating to the Company
for long term facilities. This rating signifies adequate safety for
timely servicing of the debt obligations and low credit risk.
FIXED DEPOSITS
The Company has neither accepted nor renewed any Fixed Deposits from
the public during the year and as on 31sl March 2010, there were no
outstanding deposits.
CONSOLIDATED ACCOUNTS
As per the Listing Agreement with the Stock Exchanges, Consolidated
Financial Statements have been annexed with the Financial Results of
the Company.
DIRECTORS
Shri T D. Bahety has been re-appointed as Wholetime Director of the
Company for a period of three years with effect from 20th May, 2010,
subject to the approval of the members in the ensuing Annual General
Meeting. Necessary resolutions for the approval of his appointment and
remuneration payable to him have been included in the Notice of Annual
General Meeting.
Shri H. K. Khaitan, Shri J. R Sonthalia and Shri Ravinder Nath retire
by rotation at the ensuing Annual General Meeting and, being eligible,
offer themselves for re-appointment.
None of the Directors of the Company is disqualified for being
appointed as Director, as specified in Section 274 (1) (g) of the
Companies Act, 1956.
Brief resumes of the above Directors, names of other companies in which
they hold directorship, chairmanships and/or memberships of Committees
of the Boards and their shareholdings in the Company are given in the
Section on Corporate Governance and in the Notice to the Shareholders.
AUDIT COMMITTEE
The Audit Committee consists wholly of Independent Directors having
requisite knowledge and expertise in finance, accounts and corporate
laws. The terms of reference of this Committee encompass the whole of
the provisions contained in the SEBI Code as well as Section 292A of
the Companies Act, 1956. The Committee is chaired by Shri Amitav
Kothari and includes Shri B. D. Sureka and Shri H. K. Khaitan as its
members.
CORPORATE GOVERNANCE
Good governance practices are ingrained in the business ethos of KCI.
Corporate Governance at KCI extends to all stakeholders and is embodied
in every business decision. The Company places prime importance on
reliable financial information, integrity, transparency, empowerment
and compliance with the law in letter and spirit. The Management
certifies its adherence to the Listing Agreement with the Stock
Exchanges. While Management Discussion and Analysis that is an annexure
to the Directors Report, appears in the Section titled Year in Review
in the Annual Report, the Corporate Governance Report and the
Certificate from the Auditors of the Company confirming compliance of
the conditions of Corporate Governance are annexed hereto and form a
part of the Directors Report.
CRISIL has assigned CRISIL GVC Level 3 rating to the Company on
corporate governance and value creation (GVC). The rating indicates
that the Companys capability with regard to corporate governance and
value creation for all its stakeholders is high.
There is a conscious effort to ensure that the values enshrined in the
Codes of Conduct for the Board of Directors and employees respectively,
are followed in true spirit across all levels of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS/OUTGO
As required under the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988, the statements containing
necessary information in respect of conservation of energy, technology
absorption, foreign exchange earnings and outgo are annexed hereto and
form a part of the Directors Report.
SAFETY AND ENVIRONMENT
The Company is committed to sustainable development. The Companys
environment management is guided by the principle of provision of safe
environment through continuous up-gradation of technologies, prevention
of pollution and conservation of resources. Its highly successful fly
ash utilisation programme at Renukoot and Waste to Wealth programme
at Ankleshwar substantiate the Companys approach in this area.
Converting waste into reusable water, distillery effluent into
bio-compost and generating energy from biogas are some of the
components of the Companys environment management initiatives.
As a result of its sustained compliance of Health, Safety, Environment
and Quality standards, the Companys Chloro Chemical Division at
Renukoot as well as Alco Chemical Division at Ankleshwar are certified
under OHSAS 18001 (Occupational Health & Safety Assessment Series).
Both divisions were also re-certified with ISO 9001 and IS0 14001 after
surveillance audit for the year 2009-10.
The Company has established a Health & Safety Policy that is displayed
and communicated to all employees at plant locations. With an aim to
achieve Zero Accidents, the Company has developed health and safety
procedures and has set safety targets and objectives. The Company has
also initiated efforts to create grass root level awareness on safety
through the concept of Total Productive Maintenance (TPM). All these
efforts have resulted into a safe and accident-free year.
The Company puts thrust on renewable energy sources such as bio-power
and wind power.
During the year, the Company initiated a number of measures that have
resulted in product quality improvement and better utilization of
effluents.
The Company has created and maintains large tracts of greenery in and
around its Renukoot plant. Around 60% of its land is covered with
plantations of different types and the balance encompasses the
manufacturing plant, residential staff quarters and other facilities.
HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The human resource development initiatives of the Company are guided by
a strong set of values and policies. The spirit of trust, transparency
and dignity along with improved working facilities has contributed to
continuous growth of the Company. The Companys commitment to building
meaningful employee engagement has resulted in significant enhancement
in quality and productivity. The Company has been providing necessary
training on ongoing basis to its employees at different levels by
in-house and outside faculty.
Industrial relations with the employees and workers across all
locations of the Company continued to be cordial during the year.
During the year, a wage agreement has been entered with the workmen at
Alco Chemical Division at Ankleshwar for a period of 3 years effective
from January 2009.
A wage agreement is under negotiation with the workmen at Chloro
Chemical Division at Renukoot for a period of 3 years effective from
January 2010.
As required under Section 217(2A) of the Companies Act, 1956 and the
rules framed thereunder, the names and other particulars of employees
receiving remuneration above prescribed threshold are set out in the
annexure appended to this Report.
SOCIAL CONTRIBUTION
Social welfare and community development is at the core of KCIs
Corporate Social Responsibility philosophy and forms part of its larger
social commitment. This is evident from the Companys unique
participatory approach towards community development that has generated
tangible benefits to the people, particularly in the 22 villages near
Renukoot that the Company has adopted. The result of this approach can
be evaluated in terms of improved access to water, education and health
facilities as well as opening avenues for self-employment. As part of
its income-generating initiatives, the Company assists villagers in
employment generating programmes involving agriculture, forestry, and
traditional crafts like bamboo artefacts, tailoring and basket weaving.
KCI is also engaged in making positive contribution for controlling
diseases like AIDS and Polio as well as in providing opportunities to
disabled persons. The Company, in association with NGOs, is also
actively engaged in creating awareness about the ills of female
foeticide.
It may be noted that the Company is a past recipient of the prestigious
ICC Award for Social Responsibility by Indian Chemical Council.
SUBSIDIARY COMPANY
As required under Section 212 of the Companies Act, 1956, the audited
Statement of Accounts, the Report of the Board of Directors and
Auditors Report for the year ended 31st March 2010 of Pipri Limited, a
subsidiary of the Company, are annexed to the Annual Report. The
statement required under Section 212 of the Companies Act, 1956 in
respect of the subsidiary company is also appended to the Annual
Report.
AUDITORS
Messrs Singhi & Co., Chartered Accountants, Auditors of the Company,
retire at the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment. The observations of the Auditors are in
the nature of general disclosures and are self-explanatory.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, the Board of Directors hereby confirms:
i) That in the preparation of the annual accounts, all the applicable
accounting standards have been followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements 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 of the Company for the year ended 31st March 2010.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the annual accounts on a going
concern basis.
ACKNOWLEDGEMENTS
Your Directors acknowledge with gratitude the commitment and dedication
of the employees for their untiring personal efforts as well as their
collective contributions at all levels that have led to the growth and
success of the Company. The Directors would like to thank other
stakeholders including lenders and business associates who have
continued to provide support and encouragement.
For and on behalf of the Board
Registered Office
Park Plaza
71, Park Street R.V. Kanoria
Kolkata - 700 016 Chairman & Managing Director
Dated, the 30th day of Apil 2010
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