Mar 31, 2017
To
The Shareholders,
Kesar Enterprises Ltd.
Dear Members,
The Directors present to you the 82nd Annual Report and audited Statement of Accounts for the year ended 31st March, 2017.
Alignment of Financial Year
As per Section 2(41) of the Companies Act, 2013, to follow a homogeneous Financial Year starting from 1st April to 31st March of the following year, the previous Financial Year of the Company was made for 15 months i.e. from 1.1.2015 to 31.3.2016. Hence, the Financial Year under review is for 12 months.
FINANCIAL RESULTS:
(Rs. in Lakh)
2016-17 [12 Months] 1.4.2016 to 31.3.2017 |
2015-16 [15 Months] 1.1.2015 to 31.3.2016 |
|
Profit / (Loss) before interest, depreciation & taxation............ |
6761.32 |
1,887.63 |
Less: Interest and Finance Charges..................................... |
4033.26 |
4,210.33 |
Profit / (Loss) before Depreciation & taxation (Cash Loss)............ |
2728.06 |
(2,322.70) |
Less: Depreciation...................................................... |
1897.64 |
2,582.51 |
Less: Taxation (Deferred Tax)......................................... |
9.05 |
417.01 |
Profit / (Loss)............................................................ |
821.37 |
(5,322.22) |
For the Financial Year 2016-17, there is a profit of Rs.821.37 lakh as against a loss of Rs.5,322.22 lakh in the previous year [15 months].
During the year under review, the Company has made a profit and the cash flow is positive. However, over the last few years, the Sugar Industry was facing severe difficulties on account of high sugar cane prices set by the State Government, lower sugar prices and consequential inadequate recovery of cost of production. These factors have adversely affected the Company''s operations and financial performance. Hence, the entire net worth of the Company is eroded and its current liabilities are in excess of current assets.
In view of the above, your Directors have not recommended any dividend for the year 2016-17.
WORKING OF THE DIVISIONS Sugar Division
The crushing for the Season 2016-17 started on 13.11.2016 i.e. 14 days earlier as compared to 27.1 1.2015 in the previous season and ended on 10.03.2017 as against 24.2.2016 i.e. 24 days later than the previous season.
During the season, the plant crushed 65.08 lakh quintals of sugarcane in 118 days as against 44.47 lakh quintals in 89 days in the previous season. Crushing was higher by 20.61 lakh quintals during this season due to better cane yield and more supply of sugarcane by the farmers due to timely cane price payment to the farmers. The sugar recovery overall was higher at 10.81% as against 10.19% in the previous season. This was due to our cane development programme of changing the varieties into early maturing high sugar canes. The production of sugar was higher at 7.04 lakh quintals as against 4.58 lakh quintals in the previous season.
For the Season 2016-17, the Central Government had announced a Fair & Remunerative Price [FRP] of sugarcane at Rs.230/- a quintal at a base recovery of 9.50%. The UP Government had announced a State Advised Price (SAP) of sugarcane of Rs.305/-(normal variety) a quintal as against Rs.280/- a quintal in the previous season. The said price was to be paid to the farmers within 14 days. The UP State Government has not extended any relief to the Sugar industry during the crushing season 201617 in view of better sugar realisations. Besides this, the Hon''ble High Court, in two different matters, has quashed the Orders of the Cane Commissioner / Government, through which the Society Commission was reduced / refunded and interest on late payment of cane price waived for the previous year. The industry has decided to take up these issues with the High Court and also through a SLP in the Supreme Court.
During the last few years, the cost of production in UP was the highest in the country, which rendered the UP Sugar Industry unviable, cash-starved and uncompetitive. There is an urgent need to rationalize the cane pricing policy in UP and adopt a ''linkage formula'' as recommended by the Rangarajan Committee linking sugar cane price to sugar prices. The two major sugar producing States i.e. Maharashtra and Karnataka, who together contribute for almost 50% of the country''s sugar production, have adopted and implemented the ''linkage formula'' for determining cane price. It is understood that a team of senior officials from UP had visited Maharashtra and Karnataka to study their cane pricing system and have submitted their report to the State Government but no decision is taken till date in the matter. The U P Government had announced the formation of a high level Committee to determine a fair Sugarcane Pricing Policy. This is the only long term solution for stability & viability of the Sugar industry.
During the Season 2016-17, Molasses produced was 2.74 lakh quintals as against 2.10 lakh quintals the previous season 2015-16.
The UP Government had announced the Molasses Policy for 2016-17 (November-October), wherein the molasses reservation rate for the country liquor manufacturers had been retained at 25%. The Policy had been specifically formulated to help country liquor manufacturers, reserving a part of their total molasses production for the country liquor manufacturers at a rate, much lower than the market specified prices.
During the year under review, there has been an increase in sugar prices from the levels prevailing in December 2015. This has resulted in the Company generating operational profits for the quarter ended March 31, 2017. The industry outlook is also positive in the short term and long term with sugar prices expected to hold.
Power Division
During the Sugar Season 2016-17, the Plant started on 11.11.2016 as against 2 7.1 1.2015 and operated for 152 days as against 93 days, higher by 59 days than in the previous Season, due to higher crushing of sugarcane and purchase of additional alternate fuel. The Plant consumed 2.37 lakh MT of bagasse/alternate fuel to generate 1.21 lakh MW power as against 1.48 lakh MT of bagasse/alternate fuel to generate 0.69 lakh MW power in the previous Season. The total power exported to the grid was 0.91 lakh MW amounting to Rs.51.44 crore as against 0.49 lakh MW amounting to Rs.2 7.05 crore in the previous Season.
Spirits Division
During the year under review, the production of Rectified Spirit (RS) was nil as against 23.16 lakh bulk litres in 15 months period of the previous year. The production of Extra Neutral Alcohol (ENA) was nil as against 17.07 lakh bulk litres in 15 months period of the previous year. The quantity of Country Liquor supplied was nil as against 5.50 lakh cases in 15 months period of the previous year.
The Spirits Division was put out of operations as the Company is required to install multiple effect evaporation system to reduce the effluent volume as well as to do modifications in the Reverse Osmosis Plant & Bio-composting, which would enable the Distillery to become zero discharge compliant. As the Company does not have such capability, the Company has voluntarily taken a shut down for Distillery operations since October 2015. Hence, the Molasses was sold directly in the market.
SUBSEQUENT FINANCIAL YEAR 2017-18
Sugar Division
The crushing for the Season 2017-18 is expected to start in November 2017.
During the Financial Year 2017-18, there may be a steady increase in sugar prices. This may result into the Company generating operational profits gradually. The industry outlook is also positive in the short term and long term with sugar prices expected to be stable.
Power Division
The Cogen Power Plant is also planned to start in November 2017.
SHARE CAPITAL
The Paid up Share Capital as on 31.3.2017 was Rs.10.08 crore. During the year under review, the Company has not issued any shares.
BOARD MEETINGS
During the year 6 Board Meetings and 4 Audit Committee Meetings were heId. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review, Shri A S Ruia resigned as Director of the Company with effect from 29.4.2016 due to personal reasons. The Board of Directors placed on record its sincere appreciation for the valuable support and guidance given by Shri A S Ruia to the Company during his tenure as Director of the Company.
On 18.8.2016, Shri Mahesh A Kuvadia was appointed as Independent Director of the Company by the Shareholders of the Company, for the 1st term of 5 years, and Shri H R Kilachand was reappointed as Managing Director of the Company designated as "Chairman & Managing Director", subject to approval of the Central Government, by the Shareholders of the Company for a further period of 3 years with effect from 14.8.2016 on a remuneration within the limits prescribed under the Companies Act, 2013 and Schedule V thereof. Accordingly, the application was made to the Central Government by the Company, the approval for which is awaited.
Pursuant to Section 152 of the Companies Act, 2013, Shri D J Shah, Director & Company Secretary retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. As per the SEBI (LODR) Regulations 2015, a brief profile of Shri D J Shah, retiring by rotation, forms part of the Corporate Governance Report.
All the Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations 2015.
Pursuant to the provisions of Regulation 25 of the SEBI (LODR) Regulations 2015, the Company has formulated a programme for familiarising the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc through various initiatives. The details of the aforementioned programme are available at the Company''s website www.kesarindia.com/ Investor''s Corner/ Corporate Governance/ Policies.
BOARD EVALUATION / APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT
Pursuant to the provisions of the Companies Act, 2013, the Board carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee and Nomination & Remuneration Committee.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The details of the Nomination & Remuneration Policy are available on the website of the Company www. kesarindia.com/ Investor''s Corner/ Corporate Governance/ Policies.
MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR & DATE OF THIS REPORT:
There are no material changes & commitments affecting financial position.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, the Board of Directors to the best of their knowledge hereby state that :
i) in preparation of the annual accounts for the financial year ended on 31st March, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit for that period;
iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) the Directors had prepared the Annual Accounts for the financial year ended on 31st March, 2017 on a going concern basis.
v) the Directors had laid down proper internal financial controls in place and that such internal financial controls are adequate and were operating effectively.
vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
There are no contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 and hence Form AOC-2 is not annexed. The Members may refer Note 33 to the Notes to Accounts for further details of routine transactions entered into with the Related Parties.
A policy of Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company www.kesarindia.com / Investor''s Corner/ Policies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Accounts. Some of the credit facilities have been classified as Non-Performing Assets (NPA) by Banks.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The Company had filed a reference with BIFR, under Section 15 of SICA, on 15.5.2015. Thereafter, BIFR intimated the Company by a letter dated 21.9.2015 that the said reference was registered.
As the Sick Industrial Companies Act (SICA) was repealed with effect from 1.12.2016, the Reference filed by the Company under Section 22 of SICA stood abated. However, the Company has been allowed 180 days time to file fresh reference with the National Company Law Tribunal (NCLT) under the recently notified the Insolvency and Bankruptcy Code, 2016 & Regulations (IBC) issued there under.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
The Management Discussion & Analysis Report is annexed and forms part of this Annual Report. The Company has complied with the Corporate Governance requirements as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance, along with a Certificate from the Secretarial Auditors confirming the compliance, is also annexed and forms part of the Annual Report.
INSIDER TRADING
In compliance with the SEBI regulation on prevention of Insider Trading, your Company has framed a comprehensive code which lays down guidelines and advises the Directors and employees of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. During the year under review, the Company adopted Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
SEXUAL HARASSMENT POLICY
The Company has constituted an Internal Complaint Committee (ICC) for prevention and redressal of complaints / grievances on the sexual harassment of women at work places. As part of this policy, during the year under review the Company had arranged a session on Women''s Safety by Madhukar Katragadda, Major (Retd). During the year under review no incident had taken place.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 are given in the Annexure "A" forming part of this Report. During the year under review, there were no foreign Exchange Earnings (Previous year Nil) and Foreign Exchange Outgo was Nil (Previous Year Nil).
INSURANCE
The Company has taken adequate insurance for all its properties.
FIXED DEPOSITS
As per the Companies Act, 2013, the Company is not eligible to raise Fixed Deposits in terms of Section 73 of the Act. Hence, the Company has not accepted / renewed any Fixed Deposits. Further, as per Section 74(1) of the Companies Act, 2013, the Company has repaid the entire Fixed Deposit.
AUDITORS
In terms of the provisions of the Section 139(1) of the Company''s Act 2013, the appointment made of Haribhakti & Co. LLP, Chartered Accountants is placed before the Shareholders for their ratification.
AUDITORS'' REPORT
There is no qualification in the Auditors'' Report. With respect to para 40 of the notes forming Financial Statement, the explanation thereto is given in the above para Significant & Material Orders Passed by the Regulators or Courts.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
The Company has an adequate Internal Control System. All transactions are properly authorized, recorded and reported to the Management. The Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered Accountants to review critical areas of operations. The Audit Reports are reviewed periodically by the Management and the Audit Committee of the Board and appropriate measures are taken to improve the process.
COST AUDITOR
Pursuant to Sections 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and all other applicable provisions of the Companies Act, 2013, the Board had appointed Rishi Mohan Bansal, Cost Accountant as Cost Auditor of the Company to conduct Cost Audit for the products ''Sugar & Alcohol'' and ''Electricity Generation'' for the year ended 31.3.2017. The Cost Audit Report for the same will be submitted to the Central Government before 30.09.2017.
Similarly, as recommended by the Audit Committee and approved by the Board of Directors of the Company, the appointment and payment of remuneration to Rishi Mohan Bansal, Cost Accountant, Kanpur, as Cost Auditor will be placed before the Shareholders at the ensuing Annual General Meeting for their ratification, to conduct the audit of the Cost records of the Company relating to Sugar & Industrial Alcohol and Generation of Power for the year ending 31st March, 2018.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure "B". SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Ragini Chokshi & Co., Practicing Company Secretary, as Secretarial Auditor of the Company to undertake the Secretarial Audit and provide Secretarial Audit Report in Form MR3. The Report of the Secretarial Audit Report is annexed herewith as Annexure- "C". There are no qualifications, reservations or remarks in the Secretarial Audit Report.
CORPORATE SOCIAL RESPONSIBILITY
As required under Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee as the Company had a Net Profit of more than Rs.5 crore for the financial year 2016-17. However, the Company is not required to spend any amount during the subsequent financial year as per the applicable provisions of the Act. The Company has continued to play its role as a responsible corporate citizen, adding value to society and addressing the contemporary societal needs and challenges. The Corporate Social Responsibility philosophy ensures that while business objectives are met and shareholder value is enhanced, the Company equally focuses on engaging with the wider community and sustainably addressing environmental concerns in its sphere of operations.
EMPLOYEES
Relation with the employees remained cordial throughout the year. Your Directors place on record their sincere appreciation for the devoted services of the employees of the Company.
The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees on the payroll of the Company in India, is provided as Annexure-"D" which forms part of this report.
The information required pursuant to Section 197 read with Rule 5(2)&(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
Your Directors would like to place on record their grateful appreciation for the assistance and cooperation extended by the Banks, Financial Institutions and the wholehearted support extended by the Shareholders during the year under review.
By Order of the Board of Directors
H R KILACHAND
19th May, 2017 Chairman & Managing Director
DIN: 00294835
Mar 31, 2016
DIRECTORS'' REPORT
To
The Shareholders,
Kesar Enterprises Ltd.
Dear Members,
The Directors present to you the 81st Annual Report and audited Statement of Accounts for the 15 month period ended 31st March, 2016.
Alignment of Financial Year
As per Section 2(41) of the Companies Act, 2013, to follow a homogeneous Financial Year starting from 1st April to 31st March of the following year, the Financial Year of the Company is made for 15 months i.e. from 1.1.2015 to 31.3.2016. The next Financial Year will be for 12 months.
FINANCIAL RESULTS: (Rs. in Lac)
2015-16 [15 Months] 1.1.2015 to 31.3.2016 |
2013-14 [18 Months] 1.7.2013 to 31.12.2014 |
|
Profit / (Loss) before interest, depreciation & taxation.......... |
(1,887.63) |
(3,928.00) |
Less: Interest and Finance Charges..................................... |
4,210.33 |
5,719.21 |
Profit / (Loss) before Depreciation & taxation (Cash Loss)......... |
(2,322.70) |
(9,647.21) |
Less: Depreciation......................................................... |
2,582.51 |
2,354.74 |
Less: Taxation (Deferred Tax).......................................... |
417.01 |
0 |
Profit / (Loss)............................................................... |
(5,322.22) |
(12,001.95) |
For the 15 months period Financial Year 2015-16, there is a loss of Rs.5,322.22 lac as against a loss of Rs.12,001.95 lac in the previous year for 18 months period.
The Company, over the last few years, has been incurring huge cash losses, due to which its net worth has been eroded and its current liabilities are in excess of current assets. The sugar industry is facing difficulties on account of high sugar cane prices set by the State Government, lower sugar prices and consequential inadequate recovery of cost of production. These factors have adversely affected the Company''s operations and financial performance. The finance cost has further added to the accumulated cash losses.
In view of the above, your Directors have not recommended any dividend for the year 2015-16.
WORKING OF THE DIVISIONS Sugar Division
The crushing for the Season 2015-16 started on 27.1 1.2015 i.e. 5 days earlier as compared to 2.12.2014 in the previous season and ended on 24.2.2016 as against 19.3.2013, 24 days earlier than the previous season. During the season, the plant crushed 44.47 lac quintals of sugarcane in 89 days as against 61.77 lac quintals in 107 days in the previous season. The crushing was lower by 17.30 lac quintals during this season due to a short period of crushing caused by lack of availability of sugarcane. The sugar recovery overall was higher at 10.19% as against 9.57% in the previous season. The production of sugar was lower at 4.58 lac quintals as against 5.94 lac quintals in the previous season.
For the Season 2015-16, the Central Government had announced Fair & Remunerative Price [FRP] of sugarcane at Rs.230/- a quintal at a base recovery of 9.50%. The U P Government had announced a State Advised Price (SAP) of sugarcane of Rs.280/- a quintal, the same as that in the previous season. The said price was to be paid to the farmers in two installments. The 1st installment was to be paid within 14 days @ Rs.230/- a quintal. The 2nd installment of Rs.50/-a quintal was to be paid within 3 months after crushing came to an end. The State Government had announced a reimbursement and subsidy of Rs.11.70 a quintal with a break-up of society commission @ Rs.6.90 a quintal; purchase tax @ Rs.2/- a quintal; entry tax on sugar @ Rs.2.80 a quintal. In addition to this, the U P Government had linked its additional support a maximum of Rs.23.30 a quintal to the average price of sugar and its byproducts and decided that if the price of sugar and its by-products viz. Sugar, Molasses, bagasse, Press Mud go below or above the benchmark prices viz. Rs.3,100/-; Rs.390/-; Rs.167/- & Rs.26/- per quintal respectively, during 1.10.2015 to 31.5.2016, it would either increase the support or reduce it in proportion. The average price of sugar from October 2015 till May 2016 in UP was Rs.3,013 per quintal.
Apart from this, to support the distressed Sugar Industries, the Central Government announced an export subsidy of Rs.4.50 per quintal of cane for the factories who export 80% of minimum indicated export qouta of average sugar production based on current season and preceding two sugar seasons.
The Company is eligible for this export subsidy @ Rs.4.50 per quintal on cane purchase during the season 2015-16 as it has completed the mandated 80% of Minimum Indicative Export Quota (MIEQ) provided by the Ministry before the date of withdrawal of schem.
The cost of production in U.P. became the highest in the country, which rendered the U. P. Sugar Industry unviable, cash-starved and uncompetitive. There is an urgent need to rationalize the cane pricing policy in U.P. and adopt a ''linkage formula'' as recommended by the Rangarajan Committee linking sugar cane price to sugar prices. The two major sugar producing States i.e. Maharashtra and Karnataka, who together contribute for almost 50% of the country''s sugar production, have adopted and implemented the ''linkage formula'' for determining cane price. It is understood that a team of senior officials from U.P. had visited Maharashtra and Karnataka to study their cane pricing system and have submitted their report to the State Government but no decision is taken till date in the matter. The U P Government had announced to form a high level committee to determine a fair Sugarcane Pricing Policy. This is the only long term solution for stability & viability of the sugar industry.
During the Season 2015-16, Molasses produced was 2.10 lac quintals as against 2.91 lac quintals.
The UP Government had announced its Molasses Policy for 2015-16 (November-October), wherein the molasses reservation rate for the Country Liquor manufacturers had been reduced from 34% to 15% and the same has been recently increased to 25%. The Policy had been specifically formulated to help country liquor manufacturers, which was required to reserve a part of their total molasses production for the Country Liquor manufacturers at a rate, much lower than the market specified prices.
During the current period, there has been a sharp increase in sugar prices from levels prevailing in December 2015. This has resulted in the Company generating operational profits for the quarter ended March 31, 2016. The industry outlook is also positive in the short term and long term with sugar prices expected to hold.
Power Division
During the Sugar Season 2015-16, the Plant started on 27.1 1.201 5 as against 30.11.2014 and operated for 93 days, lesser by 22 days due to lower crushing of sugarcane, as against 115 days in the previous Season. The Plant consumed 1.27 lac MT of bagasse as fuel to generate 0.69 lac MW as against 1.71 lac MT of bagasse as fuel to generate 0.91 lac MW in the previous Season. The total power exported to the grid was 0.49 lac MW amounting to Rs.27.05 crore as against 0.65 lac MW amounting to Rs.35.51 crore in the previous Season.
Spirits Division
During the 15 months period under review, the production of Rectified Spirit (RS) was 23.16 lac bulk litres as against 129.54 lac bulk litres in 18 months period of the previous year. The production of Extra Neutral Alcohol (ENA) was 17.07 lac bulk litres as against 59.72 lac bulk litres in 18 months period of the previous year. The quantity of Country Liquor supplied was 5.50 lac cases as against 14.85 lac cases in 18 months period of the previous year.
The Spirits Division was put out of operations as the Company needs to install multiple effect evaporation system to reduce the effluent volume as well as modification in Reverse Osmosis Plant & Bio-composting, which would enable the Distillery to become zero discharge compliant. As the Company does not have such capability, the Company has voluntarily taken a shut down for Distillery operations since October 2015. Hence, the Molasses was sold directly in the market.
SUBSEQUENT FINANCIAL YEAR 2016-17 Sugar Division
The crushing for the Season 2016-17 is expected to start in the last week of November 2016.
During the Financial Year 2016-17, there may be a steady increase in sugar prices. This will result into the Company generating operational profits gradually. The industry outlook is also positive in the short term and long term with sugar prices expected to increase further due to a lower production of sugar.
Power Division
The Cogen Power Plant is also planned to start in the last week of November 2016.
SHARE CAPITAL
As you are aware, the Annual Accounts for the year 2012-13 had reported a loss of Rs.1668.20 lac, which resulted in reducing the Net Worth of the Company. The Promoters / Promoter Group Companies had given non-interest bearing unsecured loans amounting to Rs.11,30,00,000/- to the Company as per the requirement of the Lending Bankers out of which the Company had converted earlier Rs.8,23,50,000/- into Equity Shares through Optionally Convertible Preference Shares Issue leaving the balance Unsecured Loan amount of Rs.3,06,50,000/-. Considering the immediate need of the Company to take steps to improve its net worth, as per the SEBI Regulations, on 27.3.2014, the Company had allotted 30,65,000 Zero Coupon Optionally Convertible Preference Shares ("OCPS") of Rs.10/- each aggregating to Rs.3,06,50,000/- to the Promoters / Promoter Group on Preferential basis with an option to convert the OCPS into Equity Shares of Rs.10/- each at a price of Rs.21/- per Equity Share (including premium of Rs.11/-) within a period of 18 months from the date of allotment of OCPS, in one or more tranches.
During the Financial Year 2015-16, on exercise of option to convert the balance 1,69,092 OCPS by the Promoter Group, on 4.8.2015 the Company had allotted 80,520 Equity Shares of Rs.10/- each at a price of Rs.21/- per Equity Share (including premium of Rs.11/-) aggregating to Rs.16,90,920/-. The balance 8 OCPS were cancelled. Thus, the Issued, Subscribed & Paid up Equity Share Capital of the Company stands increased from 99,99,162 Equity shares of Rs.10/-each aggregating to Rs.9,99,91,620/- to 1,00,79,682 Equity shares of Rs.10/- each aggregating to Rs.10,07,96,820/-. The total shareholding of the Promoters & Persons acting in concert with the Promoter & Promoter Group stands increased from the existing 69.764% to 70.005%. The Company has obtained the necessary Listing & Trading approvals from BSE & NSE for the same.
DIRECTORS & KEY MANAGERIAL PERSONNEL
Shri P Nayak (Nominee of General Insurance Corporation [GIC]), Director of the Company had resigned with effect from 15.5.2015 as GIC had withdrawn his Nomination, Shri Ajeet Prasad expired on 23.3.2016; Shri A S Ruia resigned as Director of the Company with effect from 29.4.2016 due to personal reasons.
The Board of Directors placed on record its sincere appreciation for the valuable support and guidance given by Shri P Nayak, Late Shri Ajeet Prasad and Shri A S Ruia to the Company during their tenure as Director of the Company.
Pursuant to Section 152 of the Companies Act, 2013, Shri D J Shah, Director & Company Secretary retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. As per the SEBI (LODR) Regulations 2015, brief profile of Shri D J Shah retiring by rotation forms part of the Corporate Governance Report.
All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (LODR) Regulations 2015.
Pursuant to the provisions of Regulation 25 of the SEBI (LODR) Regulations 2015, the Company has formulated a programme for familiarizing the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc through various initiatives. The details of the aforementioned programme is available at the Company''s website www.kesarindia.com/ Investor''s Corner/Corporate Governance/Policies.
MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR & DATE OF THIS REPORT:
Shri A S Ruia resigned as Director of the Company with effect from 29.4.2016 due to personal reasons.
On 11.7.2016, the Board has reappointed Shri H R Kilachand as the Managing Director of the Company designated as the Chairman and Managing Director, subject to approval of the Shareholders at the ensuing Annual General Meeting [AGM] and also of the Central Government, if required, for a further period of 3 years with effect from 14.8.2016 on a remuneration within the limits prescribed under the Companies Act, 2013 and Schedule V thereof. Shri Kilachand has not been drawing any remuneration from the Company since March 2014 in view of the heavy operational losses incurred by the Company.
On 11.7.2016, the Board has appointed Shri Mahesh A Kuvadia as an Additional Director of the Company and whose term of office is upto the ensuing AGM. His appointment as an Independent Director of the Company, for the 1st term of 5 years, is proposed at the ensuing AGM. As per the SEBI (LODR) Regulations 2015, brief profile of Shri Mahesh A Kuvadia, proposed to be appointed as Independent Director forms part of the Annexure to the Notice of the ensuing AGM.
BOARD EVALUATION / APPOINTMENT AND REMUNERATION POLICY FOR DIRECTORS AND SENIOR MANAGEMENT
Pursuant to the provisions of the Companies Act, 2013, the Board carried out an Annual Performance Evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee and Nomination & Remuneration Committee.
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. The details of the Nomination & Remuneration Policy are available on the website of the Company www.kesarindia.com/Investor''s Corner/Corporate Governance/Policies.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013 the Board of Directors to the best of their knowledge hereby state:
i) that in preparation of the annual accounts for the 15 months period financial year ended on 31st March, 2016, 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 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 loss for that period;
iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the 15 months period financial year ended on 31st March, 2016 on a going concern basis.
v) that the Directors have laid down proper internal financial controls in place and that such internal financial controls are adequate and were operating effectively.
vi) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
There are no contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 and hence Form AOC-2 is not annexed. The Members may refer Note-40 to the Notes to Accounts for further details of routine transactions entered into with the Related Parties.
A policy of Related Party Transactions as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company www.kesarindia.com/Investor''s Corner / Policies.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Accounts.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The Company had filed a reference with BIFR, under Section 15 of SICA, on 15.5.2015. Thereafter, BIFR intimated the Company by a letter dated 21.9.2015 that the said reference was registered and as per the decision of the Board, the Company has been restrained from disposing of or alienating in any manner any fixed assets of the Company without the consent of the Board. The Company has filed an Appeal before Appellate Authority for Industrial and Financial Reconstruction [AAIFR] against the said decision of BIFR, and is awaiting the decision at the next hearing thereof. The process of revival/ rehabilitation of the Company is under way in line with the prescribed procedures and rules under SICA.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
The Management Discussion & Analysis Report, is annexed and forms part of this Annual Report. The Company has complied with the Corporate Governance requirements as stipulated under Regulation 34 of the SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance, along with a Certificate from the Secretarial Auditors confirming the compliance, is also annexed and forms part of the Annual Report.
INSIDER TRADING
In compliance with the SEBI regulation on prevention of Insider Trading, your Company has framed a comprehensive code which lays down guidelines and advises the Directors and employees of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. During the year under review, the Company adopted Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
SEXUAL HARASSMENT POLICY
The Company has constituted an Internal Complaint Committee (ICC) for prevention and redressal of complaints / grievances on the sexual harassment of women at work places. During the year under review no incident had taken place.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 are given in the Annexure "A" forming part of this Report. During the year under review, there were no foreign Exchange Earnings (Previous year Nil) and Foreign Exchange Outgo was Nil (Previous Year Rs. 15763/-).
INSURANCE
The Company has taken adequate insurance for all its properties.
FIXED DEPOSITS
As per the Companies Act, 2013, the Company is not eligible to raise Fixed Deposits in terms of Section 73 of the Act. Hence, the Company has not accepted / renewed Fixed Deposits w.e.f. 1.4.2014. Further, as per Section 74(1) of the Companies Act, 2013, the Company was required to repay the existing Fixed Deposits on or before 31.3.2015. However, as per Section 74(2) of the Act, the Company had filed a petition with the Company Law Board, Mumbai Bench for extension of time to repay Fixed Deposits maturing after 31.3.2015. The approval for the same is awaited.
As on 31.3.2016, the outstanding Fixed Deposit principle amount is Rs.71,23,000/-. Rs.18,93,000/- remained unclaimed in respect of 33 Fixed Deposit holders.
AUDITORS
In terms of the provisions of the Section 139(1) of the Company''s Act 2013, the appointment of M/s Haribhakti & Co. LLP, Chartered Accountants is placed for approval by the Shareholders.
AUDITORS'' REPORT
With respect to para (viii) of the annexure to Auditors'' Report, the Shareholders may note that the Company had filed a Reference with Board for Industrial and Financial Reconstruction (BIFR) as required under Section 15 of "The Sick Industrial Companies (Special Provisions) Act, 1985" (SICA) and the said reference has been registered by BIFR on 21/09/2015. The process of revival/ rehabilitation of the Company is under way in line with the prescribed procedures and rules under SICA.
However, under the Companies Act, 2013, as per Section 253, sickness of a Company will be determined not on the basis of whether Accumulated Losses exceed Net Worth but on the basis of whether, on a demand by the secured creditors of the Company representing 50% or more of its outstanding amount of debt, the Company has failed to pay the debt within a period of 30 days of the service of the Notice of Demand. In such event, the said secured creditor may file an application to the National Company Law Tribunal [Tribunal] along with the relevant evidence for such default, non-repayment or failure to offer security or compound it, for a determination that the Company be declared as a Sick Company.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
The Company has an adequate Internal Control System. All transactions are properly authorized, recorded and reported to the Management. The Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered Accountants to review critical areas of operations. The Audit Reports are reviewed periodically by the management and the Audit Committee of the Board and appropriate measures are taken to improve the process.
COST AUDITOR
Pursuant to the directives of the Central Government under Section 233B of the Companies Act, 1956, the Board had appointed Mr. Rishi Mohan Bansal, Cost Accountant as Cost Auditor of the Company to conduct Cost Audit for the products ''Sugar & Alcohol'' and ''Electricity Generation'' for the 15 months period ended 31.3.2016. The Cost Audit Report for the same will be submitted to the Central Government before the due date.
Similarly, pursuant to Sections 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and all other applicable provisions of the Companies Act, 2013, as recommended by the Audit Committee and approved by the Board of the Company, the appointment and payment of remuneration to M/s. R M Bansal & Co., Cost Accountant, Kanpur, as Cost Auditor is proposed at the ensuing Annual General Meeting, to conduct the audit of the cost records of the Company relating to Sugar & Industrial Alcohol and Generation of Power for the 12 months period ending 31st March, 2017.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure "B". SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. Ragini Chokshi & Co., Practicing Company Secretary, as Secretarial Auditor of the Company to undertake the Secretarial Audit and provide Secretarial Audit Report in Form MR3. The Report of the Secretarial Audit Report is annexed herewith as Annexure- "C". There are no qualifications, reservations or remarks in the Secretarial Audit Report except that the Company has no Women Director.
The Board hereby clarifies that the Company has been trying since long to get a Women Director but is not able to get as the financial condition of the Company has deteriorated over a period of time and also the fact that the Company has filed a Reference with BIFR. However, attempts are being made shortly to induct a Women Director.
CORPORATE SOCIAL RESPONSIBILITY
Though your Company is not falling within the criteria prescribed under Section 135 of the Companies Act, the Company has continued to play its role as a responsible corporate citizen, adding value to society and addressing the contemporary societal needs and challenges. The Corporate Social Responsibility philosophy ensures that while business objectives are met and shareholder value is enhanced, the Company equally focuses on engaging with the wider community and sustainably addressing environmental concerns in its sphere of operations.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
The Management Discussion & Analysis Report, is annexed and forms part of this Annual Report as required under Regulation 34 of the SEBI (LODR) Regulations, 2015. A separate section on Corporate Governance, along with a Certificate from the Secretarial Auditors confirming the compliance, is also annexed and forms part of the Annual Report. EMPLOYEES
Relation with the employees remained cordial throughout the year. Your Directors place on record their sincere appreciation for the devoted services of the employees of the Company.
The information required pursuant to Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees on the payroll of the Company in India, is provided as Annexure-"D" which forms part of this report.
The information required pursuant to Section 197 read with Rule 5(2)&(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
Your Directors would like to place on record their grateful appreciation for the assistance and cooperation extended by the Banks, Financial Institutions and the wholehearted support extended by the Shareholders during the year under review.
By Order of the Board of Directors
H R KILACHAND
11th July, 2016 Chairman & Managing Director
DIN:00294835
Dec 31, 2014
Dear Members,
The Directors present to you the 80th Annual Report and audited
Statement of Accounts for the 18 months period ended 31st December,
2014.
CONSEQUENTIAL CHANGES AS PER THE COMPANIES ACT, 2013:
Alignment of Financial Year
As per Section 2(41) of the Companies Act, 2013, every Company is
required to follow a homogeneous Financial Year starting from 1st April
to 31st March of the following year within a transition period of 2
years from the date of commencement of the Companies Act, 2013. The
Financial Year of the Company was from 1st July to 30th June of the
following year. Hence to align the Financial Year, after obtaining the
necessary prior approval from the Registrar of Companies, Mumbai, the
Company had extended its Financial Year by 6 months i.e. from
01.07.2013 to 31.12.2014. Consequently, the next Financial Year will be
for 15 months i.e. from 01.01.2015 to 31.03.2016.
Applicability as to relevant Financial Year
As per General Circular 08/2014 dated 04.04.2014 issued by the Ministry
of Corporate Affairs, the Company is required to prepare its Financial
Statements (and documents required to be attached thereto), Auditor''s
Report and Directors'' Report for the Financial Year that commenced
earlier than 1st April, 2014 as per the relevant provisions / schedules
/ rules of the Companies Act, 1956. The same are therefore prepared
accordingly.
FINANCIAL RESULTS:
(Rs. in Lac)
2013-14 2012-13
[18 Months]
Profit / (Loss) before interest,
depreciation & taxation (3928.00) 3430.97
Less: Interest and Finance Charges 5719.21 3637.54
Profit / (Loss ) before Depreciation &
taxation (Cash Profit) (9647.21) (206.57)
Less: Depreciation 2354.74 1461.63
Profit / (Loss) (12001.95) (1668.20)
For the Financial Year 2013-14 for 18 months period, there is a loss of
Rs.12001.95 lac as against a loss of Rs.1,668.20 lac in the previous
year for 12 months period. The Company has incurred significant
operational losses in Sugar Division due to a steep decline in sugar
prices and unrealistically high cane prices set by the U P Government.
In view of the above, your Directors have not recommended any dividend
for the year 2013-14.
WORKING OF THE DIVISIONS Sugar Division
The crushing for the season 2013-14 started on 07.12.2013 i.e. 12 days
later as compared to 25.11.2012 in the previous season and ended on
26.03.2014 as against 15.04.2013, 20 days earlier than the previous
season. During the season, the plant crushed 58.91 lac quintals of
sugarcane in 109 days as against 85.80 lac quintals in 141 days in the
previous season. The crushing was lower by 26.89 lac quintals during
this season due to a short period of crushing for lack of availability
of sugarcane. The sugar recovery overall was lower at 8.96% as against
9.14% in the previous season. The production of sugar was lower at 5.51
lac quintals, as against 7.81 lac quintals in the previous season.
The crushing for the season 2014-15 started on 02.12.2014 i.e. 5 days
earlier as compared to 07.12.2013 in the previous season. During the
period from 02.12.2015 to 31.01.2015, the plant crushed 18.70 lac
quintals of sugarcane, the sugar recovery was at 9.60% and the
production of sugar was 1.80 lac quintals.
For the season 2013-14, on 20.02.2013, the Central Government had hiked
the Fair & Reasonable Price [FRP] of sugarcane from Rs.170/- a quintal
to Rs.210/- a quintal at a base recovery of 9.5%.
For the season 2014-15, on 14.02.2014, the Central Government had hiked
FRP of sugarcane from Rs.210/- a quintal to Rs.220/- a quintal at a
base recovery of 9.50%.
For the season 2013-14, the U P Government had announced State Advised
Price (SAP) of sugarcane of Rs.280/- a quintal same as that in the
previous season, much beyond the paying capacity of the Sugar Mills,
which resulted into substantial cane price arrears.
For the season 2014-15, the U P Government had announced a State
Advised Price (SAP) of sugarcane of Rs.280/- a quintal same as that in
the previous season. The said price would be paid to farmers in two
instalments. The 1st instalment would be paid within 14 days @ Rs.240/-
a quintal and if the payment is not made in 14 days, it would attract
interest. The 2nd instalment of Rs.40/- a quintal has to be made within
3 months after crushing comes to an end. The State Government also
announced a reimbursement and subsidy of Rs.20/- a quintal with a
break-up of society commission @ Rs.6.60 a quintal; purchase tax @
Rs.2/- a quintal; entry tax on sugar @ Rs.2.80 a quintal; & an
additional support @ Rs.8.60 a quintal on payment of entire cane price.
In addition to this, the U P Government has linked its additional
support of Rs.8.60 a quintal to market forces and has decided that if
the price of sugar and its by-products viz. Molasses, bagasse, Press
Mud go below or above the benchmark prices viz. Rs. 3,100/-; Rs. 390/-;
Rs. 167/- & Rs. 26/- per tonne respectively, during 01.10.2014 to
31.05.2015, it would either reduce the support or increase it in
proportion.
The cost of production in U.P. became the highest in the country, which
rendered the U. P. Sugar Industry unviable, cash-starved and
uncompetitive. There is an urgent need to rationalize the cane pricing
policy in U.P. and adopt a ''linkage formula'' recommended by the
Rangarajan Committee. The two major sugar producing States i.e.
Maharashtra and Karnataka, who together contribute for almost 50% of
the country''s sugar production, have adopted and implemented the
''linkage formula'' as recommended by the Rangarajan Committee for
determining the cane price automatically. It is understood that a team
of senior officials from U.P. had visited Maharashtra and Karnataka to
study their cane pricing system and have submitted their report to the
State Government but no decision is taken till date in the matter. The
U P Government had announced to form a high level committee to
determine a fair Sugarcane Pricing Policy.
Recently, the Supreme Court upheld the Allahabad High Court Order that
the Sugar Mills must sell the sugar stocks, given as security to the
Banks, to clear the sugarcane arrears to farmers.
The Banks have therefore become quite apprehensive due to seizure and
forced auction of sugar stocks of several Companies by the State
authorities, ignoring the first charge of Banks. The Banks have refused
to renew credit facilities for the current season as they want clarity
and transparency on the cane pricing policy to take further exposures
on U.P. Sugar Mills.
In February 2014, the Central Government had extended sugar export
incentives by way of subsidy @ Rs.3,300/- a tonne for export upto 4
million tonnes of raw sugar, which was increased to Rs.3,371/- a tonne
for August & September 2014, to improve domestic sugar price and in
turn the profitability of the Company.
In a move to bail out the ailing Sugar industry struggling with lower
prices and higher stocks, in August 2014, the Food Ministry had hiked
import duty on sugar from 15% to 25%; and raised the limit of Ethanol
blending with Petrol to 10%.
On 14.8.2014, the U P Government had notified the Molasses Policy for
2013-14 (November-October) with retrospective effect. According to the
new policy, 34% of the total molasses produced in U P were reserved for
production of liquor, up from 20% earlier. The Policy made it mandatory
for Sugar mills to sell molasses to country-liquor manufacturers at
prices lower than the market rates.
During the season 2013-14, Molasses produced was 2.71 lac quintals as
against 3.98 lac quintals. Bagasse produced was 18.23 lac quintals as
against 26.07 lac quintals in the previous season.
The U P Government had announced its Molasses Policy for 2014-15
(November-October), wherein the molasses reservation rate to the
country-liquor manufacturers had been reduced from 34% to 15%. The
Policy had been specifically formulated to help the sick driven Sugar
industry, which was required to reserve a part of their total molasses
production for the country-liquor manufacturers at a rate which is much
lower than the market specified prices.
For the season 2014-15, during the period 02.12.2014 to 31.12.2014,
Molasses produced was 0.84 lac quintals. Bagasse produced was 5.36 lac
quintals.
Power Division
During the sugar season 2013-14, the Plant started on 05.12.2013 as
against 01.10.2012 and operated for 131 days as against 250 days in the
previous sugar season. The Plant consumed 1.78 lac MT of bagasse as
fuel to generate 1.01 lac MW as against 3.95 lac MT of bagasse as fuel
to generate 1.89 lac MW in the previous sugar season. The total power
exported to the grid was 0.73 lac MW amounting to Rs. 34.31 crore as
against 1.47 lac MW amounting to Rs.70.22 crore in the previous sugar
season.
For the sugar season 2014-15, the Plant started on 30.11.2014 as
against 05.12.2013. During the period 30.11.2014 to 31.12.2014, the
Plant consumed 0.50 lac MT of bagasse as fuel to generate 0.25 lac MW.
The total power exported to the grid was 0.18 lac MW amounting to Rs.
10.25 crore.
Spirits Division
During the 18 months period under review, the production of Rectified
Spirit (RS) was 129.54 lac bulk litres as against 83.88 lac bulk litres
in 12 months period of the previous year. The production of Extra
Neutral Alcohol (ENA) was 59.72 lac bulk litres as against 39.97 lac
bulk litres in 12 months period of the previous year. The quantity of
Country Liquor supplied was 14.85 lac cases as against 7.57 lac cases
in 12 months period of the previous year. The sale of IMFL was lower at
1.93 lac cases as against 2.94 lac cases in 12 months period of the
previous year.
Agrotech Division:
Seed Division
With effect from 1.7.2013, the Company has merged its Seed Division
into Agrotech Division, in view of surrender of the farm lands by the
Company in June 2013, which were declared as surplus under the U.P.
Imposition of Ceiling on Land Holding Act, 1960.
SUBSEQUENT FINANCIAL YEAR 2015-16 (15 Months)
Sugar Division
The crushing season 2014-15 is already started from 02.12.2014 and is
expected to continue up to end of March 2015.
The Central Government is likely to announce export incentives for the
year 2014-15 (October/ September) by way of subsidy of Rs.4,000/- a
quintal for export of about 1.4 million tonnes raw sugar to enable the
Sugar Mills to export raw sugar at a competitive global prices and to
trim inventry piled-up due to the 5th straight year of surplus output,
before the end of the season, which may result into increase in the
domestic price of Sugar.
Power Division
The Cogen Power Plant is already started from 30.11.2014 and is
expected to run up to 2nd week of April 2015.
Recently in December 2014, UP Electricity Regulatory Commission has
revised the tariff rate for sell of power from Rs.4.81 per unit to
Rs.5.50 per unit w.e.f. 01.4.2014, which will result into additional
revenue. The Company has applied for Renewable Energy Certificate for
5,271 units, which will generate additional revenue.
Spirits Division
The sugar cane crushing is expected to be the same as in the previous
season. Therefore, the total molasses availability will also be almost
the same.
RAISING FUNDS THROUGH OPTIONALLY CONVERTIBLE PREFERENCE SHARES
As you are aware, the Annual Accounts for the year 2012-13 had reported
a loss of Rs.1668.20 lac, which resulted in reducing the Net Worth of
the Company. The Promoters / Promoter Group Companies had given
non-interest bearing unsecured loans amounting to Rs.11,30,00,000/- to
the Company as per the requirement of the Lending Bankers out of which
the Company had converted earlier Rs.8,23,50,000/- into Equity Shares
through Optionally Convertible Preference Shares Issue leaving the
balance Unsecured Loan amount of Rs.3,06,50,000/-.
Considering the immediate need of the Company to take steps to improve
its net worth, as per the SEBI Regulations, on 27.3.2014, the Company
had allotted 30,65,000 Zero Coupon Optionally Convertible Preference
Shares ("OCPS") of Rs.10/- each aggregating to Rs.3,06,50,000/- to the
Promoters / Promoter Group on Preferential basis with an option to
convert the OCPS into Equity Shares of Rs.10/- each at a price of
Rs.21/- per Equity Share (including premium of Rs.11/-) within a period
of 18 months from the date of allotment of OCPS, in one or more
tranches.
During the Financial Year 2013-14, on exercise of option to convert
28,95,900 OCPS [leaving the balance 1,69,100 OCPS] by the Promoters /
Promoter Group, on 8.5.2014, the Company had allotted 13,79,000 Equity
Shares of Rs.10/- each at a price of Rs.21/- per Equity Share
(including premium of Rs.11/-) aggregating to Rs.2,89,59,000/-.
Thus, the Issued, Subscribed & Paid up Equity Share Capital of the
Company stands increased from 86,20,162 Equity Shares of Rs.10/- each
aggregating to Rs.8,62,01,620/- to 99,99,162 Equity shares of Rs.10/-
each aggregating to Rs.9,99,91,620/-. The total shareholding of the
Promoters & Persons acting in concert with the Promoter & Promoter
Group stands increased from the existing 64.927% to 69.764%. The
Company has obtained the necessary Listing & Trading approvals from BSE
& NSE for the same.
REDEMPTION OF PREFERENCE SHARES
In 2004, the Company had allotted 20,00,000 - 1% Cumulative Redeemable
Preference Shares (CRPS) of Rs.10/- each fully paid-up aggregating to
Rs.2,00,00,000 to Industrial Development Bank of India (IDBI), as per
the Consent Terms dated 17.10.2003 signed under the Negotiated
Settlement. The said CRPS were to be redeemed in 3 annual installments
respectively on 10.08.2011, 10.08.2012 and 10.08.2013. Accordingly, the
Company has paid all the 3 installments as on date. The Cumulative
Dividend for the years 2011-12 & 2012-13 will be paid on the respective
balance amounts as and when the Company declares Dividend on its Equity
Shares.
RESTRUCTURING OF TERM LOANS
In view of the operational losses in the Sugar Division, at the request
of the Company, Allahabad Bank and UCO Bank have restructured their
Term Loans for Cogen Project amounting to Rs. 43.73 crores and Rs 41.11
crores respectively. For the purpose of the restructuring, 01.07.2014
has been agreed as the cut-off date. As per the restructuring package,
the Company shall be allowed to repay the Cogen Term Loans as on the
cut-off date over a period of 8 years (including the moratorium period
of 2 years). The Company shall also be allowed to service the interest
on the Cogen Loans during the moratorium period (i.e. 01.07.2014 to
30.06.2016) from Funded Interest Term Loan [FITL] sanctioned under the
restructuring package. The FITL sanctioned is Rs.10.80 crore and
Rs.10.12 crore by the Allahabad Bank and UCO Bank respectively.
DIRECTORS
Shri K D Sheth resigned from the office of Director of the Company with
effect from 03.11.2014, due to old age; Shri K Kannan, expired on
18.12.2014; Smt. M H Kilachand resigned from the office of Director of
the Company w.e.f. 31.12.2014 as she was not able to participate
actively in the deliberations of the Board as a Director of the Company
due to her engagement in various social activities.
The Board of Directors placed on record its sincere appreciation for
the valuable support and guidance given by Shri K D Sheth, Shri K
Kannan and Smt. M H Kilachand to the Company during their tenure as
Director of the Company.
Shri P Nayak (Nominee of General Insurance Corporation [GIC]), Director
of the Company retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for reappointment. The brief
profile, pursuant to Clause 49 of the Listing Agreement of the
Directors retiring by rotation at the ensuing Annual General Meeting
and being eligible, for reappointment, forms part of the Corporate
Governance.
Shri H R Kilachand was reappointed as the Chairman and Managing
Director of the Company for a further period of 3 years with effect
from 14.8.2013. Kesar Terminals and Infrastructure Limited (KTIL) had
also reappointed Shri Kilachand as Whole Time Director designated as
Executive Chairman for a further period of 3 years with effect from
14.09.2013. However, the total remuneration drawn and retained by Shri
H R Kilachand from both the Companies shall not exceed the higher
maximum limit admissible from any one of the Companies i.e the Company
or KTIL as per the provisions of the Companies Act. Accordingly, Shri
Kilachand had drawn remuneration of Rs.9.05 lac from the Company from
01.07.2013 to 30.06.2014. Shri Kilachand opted for not drawing any
remuneration from 01.07.2014 in view of heavy operational losses
incurred by the Company.
Pursuant to the provisions of Sections 196, 197 read with Schedule V
and all other applicable provisions of the Companies Act, 2013 and the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 (including any statutory modification or re-enactment(s) thereof,
for the time being in force) and the Articles of Association of the
Company, subject to the approval of the Central Government, if
required, and as approved by the Nomination & Remuneration Committee
and the Board of Directors on 27.01.2015, Shri D J Shah was appointed
as a Whole Time Director of the Company for a period of 3 years with
effect from 27.01.2015 to 26.01.2018 on a remuneration, subject to your
approval, as mentioned in the Special Resolution as placed before the
Shareholders for approval.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to Section 21 7(2AA) of the Companies (Amendment) Act 2000,
the Directors state as under:
i) that in preparation of the annual accounts for the 18 months period
ended on 31.12.2014, 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 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
loss for that year;
iii) that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the 18
months period ended on 31.12.2014 on a going concern basis.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Particulars with respect to conservation of energy, technology
absorption and foreign exchange earnings and outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 are given in the Appendix ''A'' and
''B'' forming part of this Report.
INSIDER TRADING
In compliance with the SEBI regulation on prevention of Insider
Trading, your Company has framed a comprehensive code which lays down
guidelines and advises the Directors and employees of the Company on
procedures to be followed and disclosures to be made, while dealing in
securities of the Company.
INSURANCE
The Company has taken adequate insurance for all its properties.
FIXED DEPOSITS
Fixed Deposits of Rs.93,000/- due for repayment on or before 31.12.2014
were not claimed by 3 depositors as on that date.
Further, as per the Companies Act, 2013, since the Company does not
fall within the criteria stipulated under the Act, it has discontinued
acceptance and renewal of fresh / existing Fixed Deposits w.e.f
01.10.2013. Since the Company is facing a financial crunch, the Company
is not in a position to repay the entire outstanding Fixed Deposits on
or before 31.3.2015 as stipulated under Section 74 of the Companies
Act, 2013 and therefore will make necessary application to the
concerned authorities for permission to repay the Fixed Deposits on its
maturity date or at such extended time as may be approved by the
concerned authorities.
AUDITORS'' REPORT
With respect to para (x) of the annexure to Auditors'' Report, the
Shareholders may note that under the provisions of Section 2(o) of the
Sick Industrial Companies (Special Provisions) Act, 1985 [SlCA], the
Company is regarded as a Sick Industrial Company as at the end of the
Financial Year i.e. on 31.12.2014 for 18 months period, it has an
Accumulated Losses exceeding its entire Net Worth.
Under the Companies Act, 2013, as per Section 253, sickness of a
Company will be determined not on the basis of whether Accumulated
Losses exceed Net Worth but on the basis of whether, on a demand by the
secured creditors of the Company representing 50% or more of its
outstanding amount of debt, the Company has failed to pay the debt
within a period of 30 days of the service of the Notice of Demand. In
such event, the said secured creditor may file an application to the
National Company Law Tribunal [Tribunal] along with the relevant
evidence for such default, non-repayment or failure to offer security
or compound it, for a determination that the Company be declared as a
Sick Company.
As Section 253 is not yet Notified and the Tribunal is not yet formed,
the provisions of SICA will continue to apply to such Companies. As per
Section 15 of SICA, a reference to the Board for Industrial and
Financial Reconstruction [BIFR] will be made within 60 days from the
date of finalization of the audited Accounts that the Company has
become a Sick Industrial Company.
Report of the Board of Directors as to such erosion, causes for such
erosion
As per the audited Accounts of the Company for the 18 months period
ended 31.12.2014, the Loss of the Company is Rs.120.02 crore. The
Accumulated Loss is Rs.150.59 crore. The Net Worth is Rs.(114.53) crore
as calculated on the basis of book value of the Assets of the Company
(without considering Revaluation of its Assets amounting to Rs.232.06
crore).
Causes for erosion:
The performance of the Company was adversely affected during the years
2011-12; 2012-13 & 2013-14 (18 months) on account of the following
reasons:
1. In the year 2011-12, there was a loss of Rs.1998.50 lac, which
included a onetime Exceptional Item relating to the payment of
differential cane price of Rs.1281.54 lac pertaining to the Sugar
Season 2007-08 as per the Hon''ble Supreme Court Order dated 17.12.2012.
2. In the year 2011-12 the Company had to sell 10% of its total
production of sugar at levy price.
3. In the years 2011-12 and 2012-13, the State Advise Price (SAP) of
sugarcane was increased substantially by UP Government by Rs.40/- per
quintal in both the years, increasing it from Rs.200/- per quintal in
the year 2010-11 to Rs.240/- and further to Rs.280/- per quintal for
the years 2012-13 respectively and thereafter for 2013-14 also the same
SAP was fixed, which substantially affected the cost of production of
sugar in all the years. As compared to that the market price of sugar
remained lower at about Rs.2,650/- per quintal than the cost of
production during the years ranging between Rs.2,800/- per quintal and
Rs.3,600/- per quintal. The above resulted into huge losses in the
Sugar Division.
4. Sugarcane production went down due to excessive early rainfall
affecting yield & recovery.
5. The sugar recovery was lower in all the years as compared to that
in the year 2010-11.
6. Distillery was forced to shutdown for a while in the year 2012-13
due to the Kumbhmela.
Steps & Measures
1. Uttar Pradesh Power Corporation Limited (UPPCL) has revised the
power tariff upward, which will result into additional profit.
2. In view of the expectation of announcement for incentive on export
of raw sugar by the Central Government, the average realization of
sugar sale rate may improve.
3. In the year 2013-14, the promoters have brought in fresh capital
amounting to Rs.306.50 lac to improve the Net Worth.
4. Recovery is better this season due to wide spread rainfall and
better cane varieties planted.
With respect to para (xvii) of the annexure to Auditors'' Report, the
Directors would like to clarify that the necessary steps will be taken
to raise long term funds in due course.
AUDITORS
M/s. Haribhakti & Co. LLP, Chartered Accountants, the Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for appointment.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
The Company has an adequate Internal Control System. All transactions
are properly authorized, recorded and reported to the Management. The
Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered
Accountants to review critical areas of operations. The Audit Reports
are reviewed periodically by the management and the Audit Committee of
the Board and appropriate measures are taken to improve the process.
COST AUDITOR
Pursuant to the directives of the Central Government under Section 233B
of the Companies Act, 1956, the Board had appointed Mr. Rishi Mohan
Bansal, Cost Accountant as Cost Auditor of the Company to conduct Cost
Audit for the products ''Sugar & Alcohol'' and ''Electricity Generation''
for the 18 months period ended 31.12.2014. The Cost Audit Report for
the same will be submitted to the Central Government before the due
date.
Similarly, pursuant to Sections 148 read with Rule 14 of the Companies
(Audit and Auditors) Rules, 2014 and all other applicable provisions of
the Companies Act, 2013, as recommended by the Audit Committee and
approved by the Board of the Company, the appointment and payment of
remuneration to M/s. R M Bansal & Co., Cost Accountant, Kanpur, as Cost
Auditor is proposed at the ensuing Annual General Meeting, to conduct
the audit of the cost records of the Company relating to Sugar &
Industrial Alcohol and Generation of Power for the 15 months period
ending 31st March, 2016.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 read with Rule 9 of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Board had appointed M/s. Ragini Chokshi & Co.,
Practicing Company Secretary, as Secretarial Auditor of the Company for
a period of 5 Financial Years starting from the financial year 2015-16
to conduct Secretarial Audit and provide Secretarial Audit Report in
Form MR3.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has continued to play its role as a responsible corporate
citizen, adding value to society and addressing the contemporary
societal needs and challenges. The Corporate Social Responsibility
philosophy ensures that while business objectives are met and
shareholder value is enhanced, the Company equally focuses on engaging
with the wider community and sustainably addressing environmental
concerns in its sphere of operations.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
As per Clause 49 of the Listing Agreement, the Management Discussion &
Analysis Report and the Corporate Governance Report, along with a
Certificate from the Secretarial Auditors'' confirming the compliance,
are annexed, which forms part of this Report.
CMD / CFO CERTIFICATION
As required under Clause 49 of the Listing Agreement, the CMD / CFO
Certificate forms part of this Report and is annexed hereto.
EMPLOYEES
Relation with the employees remained cordial throughout the year. Your
Directors place on record their deep sense of appreciation for the
devoted services of the employees of the Company. In terms of the
provisions of Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, the names and other
particulars of employees are prepared by the Company. However, as per
the provisions of Section 219(I)(b)(iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is sent to all the
shareholders of the Company and others entitled thereto. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
Your Directors would like to place on record their grateful
appreciation for the assistance and cooperation extended by the Banks,
Financial Institutions and the wholehearted support extended by the
Shareholders during the year under review.
By Order of the Board of Directors
H R KILACHAND
17th February, 2015 Chairman & Managing Director
DIN: 00294835
Jun 30, 2013
To The Shareholders of Kesar enterprises Ltd.
Dear Members,
The Directors present to you the 79th Annual Report and Audited
Statement of Accounts for the year ended 30th June, 2013.
FINANCIAL RESULTS:
(Rs. in Lacs)
2012-13 2011-12
Proft / (Loss) before interest,
depreciation & taxation 3430.97 1496.66
Less : Interest and Finance Charges 3637.54 1876.34
Proft / (Loss) before Depreciation
& taxation (Cash Proft) (206.57) (379.68)
Less : Depreciation 1461.63 558.29
Proft / (Loss) before
Exceptional Item & Tax (1668.20) (937.97)
Add / (Less): Exceptional Item 1281.54
Proft / (Loss) before tax (1668.20) (2219.51)
Add / (Less): Taxation
tax and MAt adjustment 182.67
(ii) Deferred tax Assets (403.68)
Proft / (Loss) after tax (1668.20) (1998.50)
For the year 2012-13, after considering Deferred tax Assets, there is a
loss of Rs. 1,668.20 lac as against a loss of Rs. 1,998.50 lac in the
previous year.
In view of the above, your Directors have not recommended any dividend
for the year 2012-13.
WORKING OF THE DIVISIONS Sugar Division
the crushing for the season 2012-13 started on 25.11.2012 i.e. 3 days
later as compared to 22.11.2011 in the previous season and ended on
15.4.2013 as against 14.4.2012, 1 day later than the previous season.
During the season, the plant crushed 85.80 lac quintals of sugarcane as
against 93.18 lac quintals in the previous season. the crushing was
lower by 7.38 lac quintals during this season due to lack of
availability of sugarcane. the sugar recovery overall was lower at
9.14% as against 9.48% in the previous season. the production of sugar
was lower at 7.81 lac quintals, as against 8.88 lac quintals in the
previous season.
As a part of Sugar Reforms, in April 2013, the Central Government
dispensed with the Regulated Release Mechanism of sugar for domestic
consumption with immediate effect. Further, obligation to supply sugar
as Levy on production @ 10% at a control rate for Public Distribution
System (PDS) has also been done away with for sugar produced form
October 2012. the PDS requirements will be procured by the states
through open market and the gap will be supported by the Central
Government. However, the Deregulation process has remained incomplete
as the issue of the State control on cane prices with lack of parity
between sugar and cane prices has not been addressed.
the Central Government had hiked the FRP of sugarcane on 26.7.2012 from
Rs. 145 per quintal to Rs. 170 per quintal at a base recovery of 9.5% for
the season 2012-13.
For the season 2012-13, the U. P. Government had announced a steep hike
of Rs. 40 a quintal in the State Advised Price (SAP) of sugarcane fxing
SAP at Rs. 280 a quintal as against an already steep Rs. 240 a quintal in
the previous year. the cost of production in U.P. has become the
highest in the country, which has rendered the U.P. sugar Industry
unviable, cash-starved and uncompetitive.
During the season, Molasses produced was 3.98 lac quintals as against
4.36 lac quintals. Bagasse produced was 26.07 lac quintals as against
31.43 lac quintals in the previous season. the Company had consumed
almost the entire quantity of bagasse for its Cogeneration Power Plant.
the Company had implemented major energy effcient measures in the
boiling house of the sugar factory at Baheri, thereby reducing steam
and power consumption signifcantly, resulting in large savings in
bagasse.
Power Division
With stupendous efforts of the employees of the Company and full
co-operation of manufacturers of various equipments & contractors, the
44 mw Bagasse based Cogeneration Power Plant at Baheri, U.P. was
completed in July 2012 in a record time of 18 months inspite of some
delay in receiving funds. the trial run of the Plant was made on
17.7.2012 and the plant started commercial operations from 1.10.2012.
It is the most effcient and largest capacity single plant in the sugar
Cogeneration Sector in U.P. and perhaps in the country having the
state-of-the-art Process Control systems with performance monitoring
software. During the year under review, the Plant operated for 250
days. the Plant consumed 3.95 lac Mt of bagasse as fuel to generate
1.89 lac MW. the total power exported to the grid was 1.47 lac MW
amounting to Rs. 70.22 crore. the Plant was stopped from 7.6.2013.
the Sugar Development Fund, Allahabad Bank, UCO Bank and Yes Bank Ltd.
have funded the said Project.
Spirits Division
During the year under review, the production of Rectifed Spirit (RS)
was 83.88 lac bulk litres as against 112.23 lac bulk litres in the
previous year. the production of extra Neutral Alcohol (eNA) was 39.97
lac bulk litres as against 52.43 lac bulk litres in the previous year.
the low production was due to the forced shutdown of the Distillery
during the period from 24.12.2012 to 22.2.2013 due to the Kumbhmela.
the quantity of Country Liquor supplied was 7.57 lac cases as against
11.25 lac cases in the previous year. the sale of IMFL was higher at
2.94 lac cases as against 1.98 lac cases in the previous year. the
Company has contract bottling arrangements with reputed parties, which
ensures a higher capacity utilisation and reduction in operating
overheads. the Company also has tie-up arrangements to get its own
brands manufactured in other States.
Agrotech Division: Farm Land
In the year 1933, the Company was granted agriculture land admeasuring
610 hectres at Khurpia and later the said land was converted into lease
for 20 years by the Superintendant of tarai & Bhabur under the
Government Grant Act. thereafter, it was marked as Bhumidhari. Whereas,
the Mundia & Bhavanipur farms were taken on lease. thus, the Company
was in possession of 706.89 hectres of agriculture land situated at
Mundia Farm in U.P. and Khurpia & Bhavanipur Farms in Uttaranchal, on
which the Company was growing various crops including sugarcane.
However, in the year 1976, the Prescribed Authority, Bareilly had
passed an Order on 5.7.1976 declaring the above land as surplus under
the U.P. Imposition of Ceiling on Land Holding Act, 1960. the Company
had fled an Appeal before the District Judge against the said Order,
which was partly allowed. thereafter, there were several court
hearings. Finally, on 22.3.2012, the High Court summarily dismissed the
Writ Petition against which the Company fled Review Application, which
was also dismissed. the Company then fled a Special Leave Petition
[SLP], which was dismissed by the Hon''ble Supreme Court. thereafter,
the Company once again fled a fresh Writ Petition in the Allahabad High
Court seeking relief for some time to enable the Company to harvest the
standing crop and to remove the belongings of the Company. Accordingly,
the Court granted time till February 2013. Meantime, the Company could
get back 11 hectares of land at Mundia farm and expects about 16
hectars of land at Khurpia farm.
Crops
So far, the Company has undertaken cultivation of high valued crops of
Vegetable and fowers and is developing Bio-pesticides and
Bio-fungicides for sugarcane cultivation such as trichoderma Verdi and
trichocards. Initial trials of these new products have been successful
and are now being replicated on a larger scale. the Company has a
tissue culture laboratory for rapid multiplication of different
sugarcane varieties.
Seed Division
Open Pollinated Seeds produced by the Company for wheat, paddy,
mustard, toria, urad and peas have been very well received by the
farmers. the Company has undertaken production & marketing of Hybrid
Seeds of paddy, maize, sorghum sudan grass & pearl millet and different
kinds of Vegetables. the Company has registered vegetable Seeds, which
are sold under the brand name of ''Kesar Seeds''. the Company has
obtained Seed Licenses in the States of Chattisgarh, Rajasthan, Uttar
Pradesh, Uttarakhand, Bihar, Madhya Pradesh, Punjab and Haryana. the
Research and Development (R&D) facility for hybrid crop seeds is fully
functional near Hyderabad. Simultaneously, the R&D facility for
development of vegetable seeds at Kichha, Uttarakhand has been
operationalised. enhanced seed processing capacity of 6 mt/ hr is
operational at Kichcha, Uttarakhand. the R&D department has released
two hybrids such as K-606 (UMANG) and K-707 (HARSH). Both hybrids are
well tested at feld level and all efforts are being taken to promote
them at the farmer''s level. this year the Company has revamped the
packaging of seeds to meet the expectation of industry and end users.
the Company has supplied the seeds taking immense care in production
and packing due to which complaints has been minimized.
SUBSEQUENT FINANCIAL YEAR 2013-14
Sugar Division
For the season 2013-14, the Sugar Factory is expected to start by last
week of November, 2013.
the Central Government has hiked the FRP of sugarcane on 20.2.2013 from
Rs. 170 per quintal to Rs. 210 per quintal at a base recovery of 9.5% for
the season 2013-14.
For the season 2013-14, the U P Government has not yet announced the
State Advised Price (SAP) of sugarcane.
Power Division
the Cogen Power Plant is expected to start by 2nd week of November 2013
and should run till June 2014.
Spirits Division
the sugar cane crushing is expected to be the same as the previous
season. therefore, the total molasses availability will also be the
same. the production of Rectifed Spirit / Special Denatured Spirit and
eNA should be higher during this year. the sale of Country Liquor will
be higher. IMFL is expected to be the same as in the previous year. the
contract bottling arrangements continue. the overall performance of the
Spirits Division for the current year is likely to be better as
compared to the previous year.
Seed Division
With effect from 1.7.2013, the Company has merged its Agrotech Division
into Seed Division, in view of surrender of the farm lands by the
Company in June 2013, which were declared as surplus under the U.P.
Imposition of Ceiling on Land Holding Act, 1960. the Company plans to
expand operations in the eastern part of the country by entering Odisha
and West Bengal, which hold enormous business potential for paddy and
other kharif crops. In the north, operations are being reinforced with
the induction of additional marketing force in Punjab and Haryana.
EXPANSION / MODERNISATION
Spirits Division
the Company is eligible to expand 25% capacity of the Distillery under
U. P. excise policy. Considering the current market scenario and in
order to reduce overall production cost, the Company is planning to
expand & modernise the production capacity of the Distillery from
50,000 BL per day to 62,500 BL per day at the frst opportunity.
Seed Division
It is proposed to set up two seed processing plants, one in east Uttar
Pradesh, which will service east U.P., Bihar, Jharkhand, Chattishgarh &
Odisha and second one in Madhya Pradesh. With these plants, processing
capacity is going to be doubled. Hybrid production is being increased
as it will result in improved proftability. to cater the need of the
existing customers and prospects of future growth, the Company has
started outsourcing of products, which will help us to expand the
geographical reach and to generate revenue to make the operations
effective & proftable.
COMPOSITE LOGISTICS HUB PROJECT AT MADHYA PRADESH
During the year, the Special Purpose Vehicle Company (SPV) Kesar
Multimodal Logistics Ltd (KMLL) formed by Kesar terminals &
Infrastructure Limited (KtIL), the Lead Member and the Company had done
the ''Bhoomipujan'' and ''Foundation Stone Laying'' Ceremony on 22.10.2012
at the Project site at Pawarkheda, Madhya Pradesh following which
construction activities commenced in full swing. the Composite
Logistics Hub, covering an area of 88.3 acres, includes development of
an entire range of logistics infrastructure including rail sidings for
cargo and container movement, rail-side warehouses, Inland Container
Depot (ICD), Cold Storage, food grains warehouse, Agri processing
units, development of common facilities, marketing of the same to
potential customers along with operation and maintenance thereof. this
Project land has been provided by the Madhya Pradesh State Agricultural
Marketing Board (Mandi Board) on a Design, Build, Finance, Operate and
transfer (DBFOt) basis through Public Private Participation (PPP). the
project will be developed in 2 phases. It is expected the 1st phase
will be operational by end of the year or early next year.
the necessary fnancial tie up of Rs. 108.11 crore has been arranged by
KMLL through a Consortium of Bankers i.e. Dena Bank as the Lead Bank
and Allahabad Bank and Union Bank of India as the Consortium Banks
amounting to Rs. 58.11 crore, Rs. 25 crore and Rs. 25 crore respectively. the
Company may not continue participation in this project of Madhya
Pradesh.
RAISING FUNDS THROUGH OPTIONALLY CONVERTIBLE PREFERENCE SHARES
You are aware that the Company had sought & got the approval of the
Shareholders to raise funds in order to enhance fnancial fexibility of
the Company to fund the capital expenditure plans of the Company and/or
to part fnance expansion/modernization of the sugar factory/
cogeneration projects at Baheri and/or acquisition/ investments in
similar facilities to the extent of Rs. 50 crore.
You are also aware that in view of unfavourable market conditions, at
that point of time, not conducive for the Issue of Rights Shares and
also in view of substantial reduction of Net Worth of the Company due
to loss in the year 2011-12, which resulted into taking immediate steps
to improve it, the Company had decided to consider the Rights Issue at
an appropriate time, and to consider frst, the Issue of Optionally
Convertible Preference Shares on Preferential basis to the Promoters /
Persons acting in concert with the Promoters in terms of Regulation
3(2) of the SeBI (Substantial Acquisition of Shares and takeovers)
Regulations, 2011.
Accordingly, on 6.2.2013, the Board had allotted 82,35,000 Zero Coupon
Optionally Convertible Preference Shares ("OCPSÂ) of Rs. 10/- each fully
paid-up aggregating to Rs. 8,23,50,000/- to the Promoters & Persons
acting in concert with the Promoters (Promoter Group Companies) on
Preferential basis with an option to convert the OCPS within a period
of 18 months from the date of allotment i.e. 6.2.2013, either partly or
fully, in one or more tranches, in one or more fnancial years, by
giving in writing 3 days advance notice to the Company as approved by
the Shareholders through Postal Ballot voting process on 22.1.2013.
thereafter, the Promoter & Persons acting in concert with the Promoters
(Promoter Group Companies) had exercised their option to convert OCPS
in two tranches of 38,47,500 OCPS and 43,87,500 OCPS in two fnancial
years 2012-13 & 2013-14. Hence, on 7.3.2013 i.e. during the Financial
Year 2012-13 and on 13.5.2013, i.e. during the Financial Year 2013-14,
the Board had allotted 8,55,000 equity Shares and 9,75,000 equity
Shares aggregating to 18,30,000 equity Shares of Rs.10/- each at a
premium of Rs. 35/- per share total aggregate amounting to Rs.
8,23,50,000/- by way of issue of new equity Shares.
thus, the Issued, Subscribed & Paid up equity Share Capital of the
Company stands increased from 67,90,162 equity Shares of Rs.10/- each
aggregating to Rs. 6,79,01,620/- to 86,20,162 equity shares of Rs. 10/-
each aggregating to Rs. 8,62,01,620/-. the total shareholding of the
Promoters & Persons acting in concert with the Promoters [Promoter
Group] stands increased from the existing 55.455% to 64.928%.
the Company has obtained the necessary Listing & trading approvals from
BSe & NSe for the same.
REDEMPTION OF PREFERENCE SHARES
In 2004, the Company had allotted 20,00,000 Â 1% Cumulative Redeemable
Preference Shares (CRPS) of Rs. 10/- each fully paid-up aggregating to Rs.
2,00,00,000 to Industrial Development Bank of India (IDBI), as per the
Consent terms dated 17.10.2003 signed under the Negotiated Settlement.
the said CRPS were to be redeemed in 3 annual installments respectively
on 10.8.2011, 10.8.2012 and 10.8.2013. Accordingly, the Company has
paid all the 3 installments as on date. the Cumulative Dividend for the
years 2011-12 & 2012-13 will be paid on the respective balance amounts
as and when the Company declares Dividend on its equity Shares.
DIRECTORS
Shri P Nayak (Nominee of General Insurance Corporation [GIC]) and Shri
Ajeet Prasad, Directors of the Company retire by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
reappointment. the brief profle, pursuant to Clause 49 of the Listing
Agreement of the Directors retiring by rotation at the ensuing Annual
General Meeting and being eligible, for reappointment, forms part of
the Corporate Governance Report.
Shri P Nayak, General Manager, the New India Assurance Co. Ltd., Mumbai
was appointed as Nominee Director of the Company in place of Shri S
Sethuraman as requested by the General Insurers'' (Public Sector)
Association of India (GIPSA) with effect from 29.8.2013. the Board
placed on record its appreciation for the valuable services rendered by
Shri S Sethuraman during his tenure.
Pursuant to the provisions of Section 198, 269, 309, Schedule XIII read
with Section III thereto and other applicable provisions, if any, of
the Companies Act, 1956, and as approved by the Remuneration Committee
and the Board of Directors on 25.7.2013, Shri H R Kilachand was
reappointed as the Chairman and Managing Director of the Company for a
further period of 3 years with effect from 14.8.2013 at a remuneration,
subject to your approval as mentioned in the Special Resolution as
placed before the Shareholders for approval.
Your Company was informed by Kesar terminals and Infrastructure Limited
(KtIL) that on 11.7.2013 the Shareholders of KtIL had reappointed Shri
H R Kilachand as Whole-time Director designated as executive Chairman
for a further period of 3 years with effect from 14.9.2013. However,
the total remuneration drawn and retained by Shri H R Kilachand from
both the Companies shall not exceed the higher maximum limit admissible
from any one of the Companies i.e. the Company or KtIL as per the
provisions of the Companies Act.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the
Directors state as under:
i) that in preparation of the annual accounts for the fnancial year
ended on 30th June, 2013, 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 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 fnancial year and of the
loss for that year;
iii) that the Directors had taken proper and suffcient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the
fnancial year ended on 30th June, 2013 on a going concern basis.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Particulars with respect to conservation of energy, technology
absorption and foreign exchange earnings and outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 are given in the Appendix ''A''
forming part of this Report.
INSIDER TRADING
In compliance with the SeBI regulation on prevention of Insider
trading, your Company has framed a comprehensive code which lays down
guidelines and advises the Directors and employees of the Company on
procedures to be followed and disclosures to be made, while dealing in
securities of the Company.
INSURANCE
the Company has taken adequate insurance for all its properties.
FIXED DEPOSITS
Fixed Deposits of Rs. 3,01,000/- due for repayment on or before 30th
June, 2013 were not claimed by 3 depositors as on that date.
AUDITORS'' REPORT
With respect to para (x) of the annexure to Auditors'' Report, the
Shareholders may note that under the provisions of Section 23 of SICA,
the Accumulated Losses of the Company for the fnancial year ended 30th
June, 2013 have resulted in erosion of more than 50% of its peak Net
Worth during the immediately preceding four fnancial years. the Report
of the Board of Directors as to such erosion and the causes for such
erosion are given in the Annexure to the Notice of this Annual General
Meeting.
With respect to para (xvii) of the annexure to Auditors'' Report, the
Directors would like to clarify that necessary steps will be taken to
raise long term funds for which an enabling resolution is proposed in
the Notice of this Annual General Meeting.
AUDITORS
M/s. Haribhakti & Co., Chartered Accountants, the Auditors of the
Company, hold offce until the conclusion of the ensuing Annual General
Meeting and being eligible, offer themselves for appointment.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
the Company has an adequate Internal Control System. All transactions
are properly authorized, recorded and reported to the Management. the
Company has Independent Auditors M/s. Ashok Jayesh & Co., Chartered
Accountants to review critical areas of operations. the Audit Reports
are reviewed periodically by the management and the Audit Committee of
the Board and appropriate measures are taken to improve the process.
COST AUDITOR
Pursuant to the directives of the Central Government under Section 233B
of the Companies Act, 1956, the Board had appointed Mr. Rishi Mohan
Bansal, Cost Accountant as Cost Auditor of the Company to conduct Cost
Audit for the products Rs.Sugar & Alcohol'' and Rs.electricity'' for the year
ended 30.6.2013. the Cost Audit Report for the same will be submitted
to the Central Government before the due date.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has continued to play its role as a responsible corporate
citizen, adding value to society and addressing the contemporary
societal needs and challenges. the Corporate Social Responsibility
philosophy ensures that while business objectives are met and
shareholder value is enhanced, the Company equally focuses on engaging
with the wider community and sustainably addressing environmental
concerns in its sphere of operations.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
As per Clause 49 of the Listing Agreement, the Management Discussion &
Analysis Report and the Corporate Governance Report, along with a
Certifcate from the Auditors confrming the compliance, are annexed,
which forms part of this Report.
CMD / CFO CERTIFICATION
As required under Clause 49 of the Listing Agreement, the CMD (CeO) /
CFO Certifcate forms part of this Report and is annexed hereto.
EMPLOYEES
Relation with the employees remained cordial throughout the year. Your
Directors place on record their deep sense of appreciation for the
devoted services of the employees of the Company. In terms of the
provisions of Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of employees) Rules, 1975, the names and other
particulars of employees are prepared by the Company. However, as per
the provisions of Section 219(I)(b)(iv) of the Companies Act, 1956, the
Annual Report excluding the aforesaid information is sent to all the
shareholders of the Company and others entitled thereto. Any
shareholder interested in obtaining such particulars may write to the
Company Secretary at the registered offce of the Company.
ACKNOWLEDGEMENT
Your Directors would like to place on record their grateful
appreciation for the assistance and cooperation extended by the Banks,
Financial Institutions and the wholehearted support extended by the
Shareholders during the year under review.
By Order of the Board of Directors
H R KILACHAND
29th August, 2013 Chairman & Managing Director
Jun 30, 2012
To The Shareholders, Kesar Enterprises Ltd.
Dear Members,
The Directors present to you the 78th Annual Report and audited
Statement of Accounts for the year ended 30th June, 2012.
FINANCIAL RESULTS
(Rs. in Lac)
2011-12 2010-11
Profit before interest,
depreciation, exceptional item & tax 1498.51 2623.71
Less: Interest and Finance Charges 1876.35 1997.88
Profit/ (Loss) before depreciation,
exceptional item & (377.84) 625.83
Less: Depreciation 558.29 583.10
Profit / (Loss) before exceptional
item & tax (936.13) 42.73
Less: Exceptional Ltem 1281.54
Profit / (Loss) before tax (2217.67) 42.73
Add /(Less): Provision for Tax
(i) Income Tax- Deferred Tax Assets 403.68 320.99
(ii) Current Tax (consists of wealth
tax & MAT adjustment (184.51) (1.98)
Profit / (Loss) after tax (1998.50) 361.74
For the year 2011-12, after considering Deferred Tax Assets, there is a
loss of Rs. 1,998.50 lac, which includes a one time Exceptional Item
relating to the payment of differential cane price of Rs. 1,281.54 lac
for the Sugar Season 2007-08 as per the Hon'ble Supreme Court Order
dated 17.1.2012. This is applicable to all sugar mills in U. P. only.
This is as against profit after tax of Rs. 361.74 lac in the previous
year.
In view of the above, your Directors have not recommended any dividend
on Cumulative Redeemable Preference Shares and Equity Shares for the
year 2011-12.
WORKING OF THE DIVISIONS
Sugar Division
The crushing for the season 2011-12 started on 22.11.2011 i.e. 10 days
earlier as compared to 2.12.2010 in the previous season and ended on
15.4.2012 as against 30.3.2011, 15 days later than the previous season.
During the season, the plant crushed 93.18 lac quintals of sugarcane as
against 73.80 lac quintals in the previous season. The crushing was
higher by 1 9.39 lac quintals during this season. The sugar recovery
overall was slightly lower at 9.48% as against 9.68% in the previous
season. The production of sugar was higher at 8.88 lac quintals due to
higher availability of sugarcane, as against 7.18 lac quintals in the
previous season.
The Levy sugar price for the season 2011-12 was announced by the
Central Government on 3.3.2012, increasing it from Rs. 1,900.88 to
Rs.1,959.41 per quintal. The levy ratio is 10 %.
On 14.3.2011, the Central Government had hiked the 'Fair and
Remunerative Price' (FRP) of sugarcane from Rs. 139.12 per quintal to Rs.
145.00 per quintal at a base recovery of 9.5% for the season 2011-12.
For the season 2011-12, the U. P. Government had announced a hike of Rs.
35.00 a quintal in the State Advised Price (SAP) of sugarcane fixing
SAP at Rs. 240.00 a quintal as against Rs. 205.00 a quintal in the previous
year. During the season, Molasses produced was 4.36 lac quintals as
against 3.56 lac quintals. Bagasse produced was 31.43 lac quintals as
against 22.79 lac quintals in the previous season due to higher
crushing. The Company had stored the
ire surplus bagasse for its use in Cogeneration Power Plant, whereas in
the previous season, the Company had sold 7.75 lac quintals of bagasse.
The Company has implemented major energy efficient measures in the
boiling house of the sugar factory at Baheri, thereby reducing steam
and power consumption significantly, resulting in large savings in
bagasse. Over and above that, there is lower power and steam
consumption, resulting in reduced load on the boilers and turbines.
Spirits Division
During the year under review, the production of Rectified Spirit (RS)
was 112.23 lac bulk litres as against 131.42 lac bulk litres in the
previous year. The production of Extra Neutral Alcohol (ENA) was 52.44
lac bulk litres as against 39.42 lac bulk litres in the previous year.
The quantity of Country Liquor supplied was 11.25 lac cases as against
8.82 lac cases in the previous year. The sale of IMFL was 1.98 lac
cases as against 3.58 lac cases in the previous year. The Company has
contract bottling arrangements with reputed parties, which ensures a
higher capacity utilisation and reduction in operating overheads. The
Company also has tie-up arrangements to get its own brands manufactured
in other States.
Agrotech Division:
Crops
The Company has undertaken cultivation of high valued crops and is
developing Bio-pesticides and Bio-fungicides for sugarcane cultivation
such as Trichoderma Verdi and Trichocards. Initial trials of these new
products have been successful and are now being replicated on a larger
scale. The Company has also undertaken the development of floriculture
like rose, gladiolus and gerbera in greenhouses. The Division has been
producing sugarcane, rice, wheat, mustard and sunflower for seed
purpose and carries on cane development activities. The Company has a
tissue culture laboratory for rapid multiplication of different
sugarcane varieties.
Seed Division
Open Pollinated Seeds produced by the Company for wheat, paddy,
mustard, toria, urad and peas have been very well received by the
farmers. The Company has undertaken production & marketing of Hybrid
Seeds of paddy, maize, sorghum sudan grass & pearl millet. The Company
has registered Vegetable Seeds, which are sold under the brand name of
'Kesar Seeds'. The Company is getting the open pollinated seeds
produced and processed in Madhya Pradesh, Uttar Pradesh and
Uttarakhand. The Company has obtained Seed Licenses in the States of
Chattisgarh, Rajasthan, Uttar Pradesh, Uttarakhand, Bihar, Madhya
Pradesh, Punjab and Haryana. The Research and Development (R&D)
facility for hybrid crop seeds is fully functional near Hyderabad.
Simultaneously, the R&D facility for development of vegetable seeds at
Kichha, Uttarakhand has been operationalised. Enhanced seed processing
capacity of 6 mt/ hr is operational at Kichcha, Uttarakhand. The R&D
department has undertaken field trials of hybrid paddy at various
locations and the results have been excellent.
SUBSEQUENT FINANCIAL YEAR 2012-13
Sugar Division
For the season 2012 -13, the Sugar Factory is expected to start by last
week of November, 2012. The sugar season is expected to be better than
the previous season. The Levy sugar price for the season 2012-13 is yet
to be announced by the Central Government.
The Central Government has not revised the levy sugar price for the
years 2003-04 to 2008-09. In May 2004, in one sugar mill case, the
Supreme Court had mentioned that the SAP fixed by the State Government
needs to be taken into account in the computation of the levy sugar
price. On 31.3.2008, in another sugar mill case, the Supreme Court
directed the Central Government to refix the price of levy sugar taking
into account the SAP as against Statutory Minimum Price (SMP).
For the season 2012-13, the U. P. Government has not yet announced the
State Advised Price (SAP) of sugarcane.
Spirits Division
The sugar cane crushing is expected to be higher than the previous
season. Therefore, the total molasses availability will also be higher.
The prices of molasses may drop. The production of Rectified Spirit /
Special Denatured Spirit and ENA should be higher during this year. The
sale of Country Liquor will be higher. IMFL is expected to be the same
as in the previous year. The contract bottling arrangements continue.
The overall performance of the Spirits Division for the current year is
likely to be better as compared to the previous year.
Seed Division
The Company plans to expand operations in the eastern part of the
country by entering Odisha and West Bengal, which hold enormous
business potential for paddy and other kharif crops. In the north,
operations are being reinforced with the induction of additional
marketing force in Punjab and Jammu that will become operational for
ensuing kharif season.
EXPANSION / MODERNISATION
Cogeneration Power Plant
With stupendous efforts of the employees of the Company and full
co-operation of manufacturers of various equipments & contractors, the
44 mw Bagasse based Cogeneration Power Plant at Baheri, U.P. was
completed in July 2012 in a record time of about 18 months. The trial
run of the Plant was made on 17.7.2012. It is the most efficient and
largest capacity single plant in the sugar Cogeneration Sector in U.P.
and perhaps in the country, having the state-of-the-art Process Control
systems with performance monitoring software. The Plant started
commercial operations in October, 2012. The Company will substantially
export power to the grid and will benefit from the well established
government policies related to renewable energy and also get benefit of
carbon trading rights / renewable energy certificate. The Sugar
Development Fund, Allahabad Bank, UCO Bank and Yes Bank Ltd. have
financed the said Power Project.
Spirits Division
The Company is eligible to expand 25% capacity of the Distillery under
U. P. Excise policy. Considering the current market scenario and in
order to reduce overall production cost, the Company is planning to
expand & modernise the production capacity of the Distillery from
50,000 BL per day to 62,500 BL per day.
Seed Division
It is proposed to set up two seed processing plants, one in East Uttar
Pradesh, which will service East U.P., Bihar, Jharkhand, Chattishgarh &
Odisha and second one in Madhya Pradesh. With these plants, processing
capacity is going to be doubled. Hybrid production is being increased
as it will result in improved profitability.
JOINT PROJECT IN MADHYA PRADESH
A Consortium of Kesar Terminals & Infrastructure Limited (KTIL), the
Lead Member, and the Company had received a Letter of Award [LOA] from
The Madhya Pradesh State Agricultural Marketing Board (the Mandi Board)
confirming the Consortium as a successful bidder for setting up of a
"Composite Logistics Hub" at Pawarkheda, District Hoshangabad, Madhya
Pradesh on a Design, Build, Finance, Operate and Transfer (DBFOT) basis
through Public Private Participation (PPP). The project includes
development of an entire range of logistics infrastructure including
rail sidings for cargo and container movement, rail side warehouses,
Inland Container Depot (ICD), Cold Storage, food grains warehouse,
development of common facilities, marketing of the same to potential
customers along with operation and maintenance thereof. The estimated
Project cost is Rs. 150 crore. The said Project is being executed through
a Special Purpose Vehicle named "Kesar Multimodal Logistics Limited"
(KMLL) incorporated by KTIL & the Company in which the Company has
invested Rs. 2,50,000/- towards its equity share capital. KMLL has
executed a Concession Agreement with the Mandi Board on 24.10.2011 in
the matter. The Project is in progress as per schedule.
REDEMPTION OF PREFERENCE SHARES
In 2004, the Company had allotted 20,00,000 - 1% Cumulative Redeemable
Preference Shares (CRPS) of Rs.10/- each fully paid-up aggregating to Rs.
2,00,00,000 to Industrial Development Bank of India (IDBI), as per the
Consent Terms dated 17.10.2003 signed under the Negotiated Settlement.
The said CRPS are to be redeemed in three annual installments
respectively on 10.8.2011, 10.8.2012 and 10.8.2013. Accordingly, the
Company had paid the 1st instalment of Rs. 67,00,000/- on 10.8.2011 and
the 2nd instalment of Rs. 67,00,000/- on 10.8.2012. The balance amount of
Rs. 66,00,000/- will be payable on 10.8.2013.
RAISING FUNDS THROUGH RIGHTS ISSUE
The Board has approved raising funds up to an amount not exceeding
Rs.15 crore inclusive of premium, if any, by issue of further equity
share capital on Rights basis to the existing shareholders, subject to
the approval of SEBI & Stock Exchanges (BSE & NSE) on the terms and
conditions like offer ratio, quantum of shares, offer price etc. as may
be determined in consultation with the Lead Manager / Advisor to the
Rights Issue and such other authorities and agencies as may be required
to be consulted by the Company. The Shareholders have already passed a
Special Resolution under section 81(1A) of the Companies Act through
Postal Ballot process on 3.10.2012 to raise the funds through issue of
securities upto an amount not exceeding Rs. 50 Crore. To decide various
matters concerning the Rights Issue at the earliest and also for
administrative convenience, the Board has constituted a Rights Issue
Committee comprising of 4 Directors viz. Shri H R Kilachand, Chairman &
Managing Director, Shri A S Ruia, Shri K Kannan and Shri Ajeet Prasad.
DIRECTORS
Shri K Kannan and Shri A S Ruia, Directors of the Company retire by
rotation at the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. The brief profile, pursuant to
Clause 49 of the Listing Agreement of the Directors retiring by
rotation at the ensuing Annual General Meeting and being eligible, for
reappointment, forms part of the Corporate Governance Report.
Shri N ] Vakil resigned as Director of the Company from 14.2.2012. Shri
Prakash Dubey was appointed as Additional Director from 18.4.2012. Shri
S Sethuraman, General Manager, The New India Assurance Co. Ltd., Mumbai
was appointed as Nominee Director of the Company in place of Shri I S
Phukela as requested by The General Insurers' (Public Sector)
Association of India (GIPSA), New Delhi from 13.8.2012.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the
Directors state as under:
i) that in preparation of the annual accounts for the financial year
ended on 30th June, 2012, 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 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
loss for that year;
iii) that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the
financial year ended on 30th June, 2012 on a going concern basis.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Particulars with respect to conservation of energy, technology
absorption and foreign exchange earnings and outgo pursuant to Section
217(1)(e) of the Companies Act, 1956 are given in the Appendix 'A'
forming part of this Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
As per Clause 49 of the Listing Agreement, the Management Discussion &
Analysis Report and the Corporate Governance Report are annexed, which
forms part of this report.
INSURANCE
The Company has taken adequate insurance for all its properties.
FIXED DEPOSITS
Out of the total Fixed Deposits amount of Rs. 395 lac, the Fixed Deposit
of Rs. 1.82 lac due for repayment on or before 30th June, 2012 were not
claimed by 4 depositors as on that date.
AUDITORS' REPORT
With respect to paras (x) & (xvii) of the annexure to Auditors' Report,
the Directors would like to clarify as under:
(a) Para (x); that the current year's cash loss is mainly due to an
Exceptional item of a one time payment for differential sugarcane price
for the season 2007-08 as per the Supreme Court Order dated 1 7.1.2012.
However, the
Cogeneration Power Plant has started supplying power to the grid from
October, 2012, which will result into high earnings during the current
year;
(b) Para (xvii): that necessary steps will be taken to raise long term
funds partially inter-alia through Rights Issue.
AUDITORS
M/s. Haribhakti & Co., Chartered Accountants, the Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting and being eligible, offers themselves for appointment.
INSIDER TRADING
In compliance with the SEBI regulation on prevention of Insider
Trading, your Company has framed a comprehensive code which lays down
guidelines and advises the Directors and employees of the Company on
procedures to be followed and disclosures to be made, while dealing in
securities of the Company.
INTERNAL CONTROL SYSTEM & INTERNAL AUDITORS
The Company has an adequate Internal Control System. All transactions
are properly authorized, recorded and reported to the Management. The
Company has Independent Auditors M/s. Ashok jayesh & Co., Chartered
Accountants to review critical areas of operations. The Audit Reports
are reviewed periodically by the management and the Audit Committee of
the Board and appropriate measures are taken to improve the process.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has continued to play its role as a responsible corporate
citizen, adding value to society and addressing the contemporary
societal needs and challenges. The Corporate Social Responsibility
philosophy ensures that while business objectives are met and
shareholder value is enhanced, the Company equally focuses on engaging
with the wider community and sustainably addressing environmental
concerns in its sphere of operations.
EMPLOYEES
Relation with the employees remained cordial throughout the year. There
is no employee whose information is required to be given under the
provisions of Section 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and cooperation extended by the Banks & Financial
Institutions during the year under review. Your Directors wish to place
on record their deep sense of appreciation for the devoted services of
the employees of the Company for its success.
By Order of the Board of Directors
Registered Office:
Oriental House, D J SHAH
7, Jamshedji Tata Road, Sr. Vice President (Legal)
Churchgate, & Company Secretary
Mumbai - 400 020.
9th November, 2012
Jun 30, 2010
COURT SANCTIONED SCHEME OF ARRANGEMENT FOR DEMERGER:
The Directors thank you for approving the Scheme of Arrangement for
Demerger of the erstwhile Storage Division of the Company at the Court
Convened General Meeting on 22.12.2009, which was subject to approval
of the Honble High Court of Bombay.
Your Directors are pleased to inform you that the Honble High Court of
Bombay had passed an Oder on 12.3.2010 pursuant to Sections 391 to 394
of the Companies Act, 1956, sanctioning the Scheme of Arrangement by
way of Demerger, for transfer of the undertaking, business, activities
and operations pertaining to the Storage Division / Undertaking of the
Company into the erstwhile Wholly-owned Subsidiary Company viz. Kesar
Terminals & Infrastructure Ltd. [KTIL] as a going concern with effect
from the Appointed Date i.e. 1.1.2009. The Effective Date of the Scheme
is 29.3.2010. The effect of the above Arrangement has been given in the
Annual Accounts of the Company, in the financial year ended 30.6.2010.
In consideration of transfer of the Storage Undertaking, on 1.6.2010,
KTIL had issued and allotted 47,53,113 Equity Shares of Rs.10/- each
aggregating to Rs.4,75,31,130/- for consideration other than cash to
every member of the Company, whose name appeared in the Register of
Members of the Company on the Record Date i.e. 14.5.2010, in the ratio
of 10:7 i.e. for every 10 Equity Shares of Rs.10/- each held in the
Company, 7 Equity Shares of Rs.10/- each of KTIL were allotted either
in dematerialized or physical form. After the said allotment, the Share
Capital of KTIL is 52,53,113 Equity Shares of Rs.10/- each aggregating
to Rs.5,25,31,130/-. KTIL had consolidated the fraction entitlement,
which resulted into 510 Equity Snares. The said shares were credited in
the Demat account of the Trustee who will sell in the open market when
the shares get listed. The sale proceeds thereof will then be
distributed amongst the eligible shareholders of fractions.
The Listing Application made by KTIL has been approved by Bombay Stock
Exchange Ltd. [BSE]; The National Stock Exchange of India Ltd. [NSE],
and SEBI, subject to KTIL completing certain formalities. KTIL has been
taking steps to complete it as advised and will request BSE / NSE to
allow trading of its equity shares at the earliest.
FINANCIAL RESULTS:
Considering the above, after giving necessary effects in the Financial
Accounts, your Directors present to you the 76th Annual Report and
audited Statement of Accounts for the year ended 30.6.2010.
(Rs. in Lacs)
(*)
2009-10 2008-09
Profit before interest, depreciation &
taxation 2565.67 3346.26
Less: Interest and Finance Charges 1761.29 1517.63
Profit before Depreciation & taxation
(Cash Profit) 804.38 1828.63
Less: Depreciation 579.79 738.79
Profit before tax 224.59 1089.84
Add /(Less): Provision for Taxation
(i) Income Tax - Current à (167.98)
(ii) Income Tax - Deferred 16.30 (15.84)
(iii) Wealth Tax (1.59) (1.63)
Profit after tax 239.30 904.39
Add: Prior period adjustments 199.42 0.03
Profit available for appropriation 438.72 904.42
Appropriation:
(Less):(i) Transfer to General Reserve 43.87 90.44
(ii) Proposed Dividend on
Preference Share 2.00 2.00
(iii) Proposed Dividend on Equity Share 67.90 203.70
(iv) Corporate Tax on Dividends 11.61 34.96
Profit after appropriation 313.34 573.32
Add :Balance brought forward
from previous year 238.79 (118.99)
Less: Profit transferred to
KTIL [1.1.2009 to 30.6.09] Ã (215.54)
Balance carried forward to
Balance Sheet 552.13 238.79
(*) Previous years amounts are not comparable as the same include the
amounts pertaining to the erstwhile Storage Division. For the year
2009-10, there is a profit after tax of Rs.239.30 lacs as against
Rs.904.39 lacs in the previous year and it includes profit of the
erstwhile Storage Division.
DIVIDEND
Your Directors recommend a dividend for the year 2009-10 @ 1% on
20,00,000 Cumulative Redeemable Preference Shares of Rs.10/- each
issued to IDBI Ltd. amounting to Rs.2.00 lac plus dividend tax as
applicable.
Your Directors also recommend a dividend for the year 2009-10 @ Re.1/-
per Equity Share of Rs.10/- each on 67,90,162 Equity Shares of the
Company plus dividend tax as applicable (Previous year Re.3.00 per
equity share, inclusive of Re.0.50 per Equity Share for the Platinum
Jubilee Commemoration, based on the total profit including that of the
Demerged Storage Division).
WORKING OF THE DIVISIONS
Sugar Division
The crushing for the season 2009-10 started on 29.11.2009 i.e. 5 days
later as against 24.11.2008 in the previous season and ended on
27.3.2010 as against 15.3.2009, 12 days later than the previous season.
During the season, the plant crushed 69.38 lac quintals of sugarcane,
in 119 days as against 56.15 lac quintals crushed in 111 days in the
previous year. The crushing was higher by 13.23 lac quintals in 8
additional days for this season. The sugar recovery overall was
marginally higher at 9.38% as against 9.35% in the previous season. The
production of sugar was higher at 6.52 lac quintals due to more
crushing of sugarcane, as against 5.24 lac quintals in the previous
season.
The Levy sugar price for the season 2009-10 was announced by the
Central Government after the season was over i.e. on 21.6.2010,
increasing it from Rs.1,330.77 to Rs.1,808.47 per quintal. However, the
Central Government has not revised the levy sugar price for the years
2003-04 to 2008-09. The levy ratio was changed by the Central
Government from 10% to 20% w.e.f. 1.10.2009 for this season only due to
the shortage of available sugar for levy.
On 22.10.2009, the Central Government had issued a Notification
amending the Sugarcane (Control) Order, 1966, by replacing Statutory
Minimum Price (SMP) with Fair and Remunerative Price (FRP), which
means the cane price is fixed by the Central Government for sugarcane
from time to time considering reasonable margins for the cane growers
on account of risk and profits. On 6.7.2009, the Central Government had
hiked FRP of sugarcane from Rs.107.76 per quintal to Rs.129.84 per
quintal at a base recovery of 9.5% for the season 2009-10.
Additionally, Clause 3B is inserted mentioning that - If any authority
or State Government fixes any price above the fair and remunerative
price fixed by the Central Government, than the said authority or State
Government, shall pay the differential amount, to the grower of
sugarcane.
Once again this year was very unusual for sugar. For the season
2009-10, the U. P. Government had announced a hike of Rs.25 a quintal
in the State Advised Price (SAP) of sugarcane fixing SAP of Rs.165 a
quintal as against Rs.140 a quintal in the previous year. However, the
sugarcane prices went up as high as Rs.270 a quintal due to shortage
and the Company was forced to pay such high prices for sugarcane, which
resulted into a higher cost of production of sugar. Similarly, sugar
prices also went up substantially to about Rs. 4,500 per quintal but
drastically came down by 30% to 35% in June 2010. This was due to
drastic measures undertaken by the government like restricting stock
limit for Institutional buyers & wholesalers, change in mechanism of
release order from monthly to weekly, higher monthly quota as against
the demand etc. and also due to reduction in prices by 40% in
International market on account of huge production estimate given by
Brazil. This ultimately resulted into lower profits.
During the season 2009-10, Molasses produced was higher at 3.14 lac
quintals as against 2.48 lac quintals due to higher crushing. Baggasse
produced was 22.39 lac quintals as against 18.96 lac quintals in the
previous season. Surplus baggasse sold was 7.08 lac quintals as
against 5.26 lac quintals in the previous season.
The Company has implemented major energy efficiency measures in the
boiling house of the sugar factory at Baheri, thereby reducing steam
and power consumption significantly, resulting in large savings in
bagasse and hence increase in revenue on sale of the saved bagasse.
Over and above that, there is lower steam and power consumption,
resulting in reduced load on boilers and turbines.
Spirits Division
During the year under review, the production of Rectified Spirit (RS)
was lower at 74.80 lac bulk litres as against 125.20 lac bulk litres in
the previous year due to high molasses prices in off seasons 2009 and
boiler shutdown in off season 2010. The production of Extra Neutral
Alcohol (ENA) was marginally lower at 24.36 lac bulk litres as against
24.44 lac bulk litres in the previous year. The quantity of Country
Liquor supplied was 51.13 lac bulk litres as compared to 60.72 lac bulk
litres in the previous year. The sale of IMFL was higher at 5.17 lac
cases as against 4.75 lac cases in the previous year. The Company has
contract bottling arrangements with reputed parties, which ensures a
higher capacity utilisation and reduction in operating overheads. The
Company also has tie-up arrangements to get its own brands manufactured
in other States. New semi-premium brands were introduced in various
markets.
Agrotech Division:
Crops
The Company has undertaken cultivation of high valued crops and is
developing Bio-pesticides and Bio-fungicides for sugarcane cultivation
such as Trichoderma Verdi and Trichocards. Initial trials of these new
products have been successful and are now being replicated on a larger
scale. The Company has also undertaken the development of greenhouse
for cultivation of flowers like rose, gladiolus and gerbera. The
Division has been producing sugarcane, rice, wheat, mustard and
sunflower and carries on cane development activities. The Company has a
tissue culture laboratory for rapid multiplication of different
sugarcane varieties.
Seed Division
Open Pollinated Seeds produced by the Company for wheat, paddy,
mustard, toria, urad and peas have been very well received by the
farmers. The Company has undertaken production & marketing of Hybrid
Seeds of Paddy, Maize, Sorghum Sudan Crass & Pearl Millet. The Company
has registered Vegetables Seeds, which are sold under the brand name
of Kesar Seeds. The Company is getting seeds produced and processed
in Madhya Pradesh, Uttar Pradesh and Uttarakhand. The Company has
obtained Seed License from the concerned authority in the States of
Chattisgarh, Rajasthan, Uttar Pradesh, Uttarakhand, Bihar, Madhya
Pradesh, Punjab and Haryana. The Research and Development (R&D)
facility for hybrid crop seeds is fully functional near Hyderabad.
Simultaneously, the R&D facility for development of vegetable seeds at
Kichha, Uttarakhand has been operationalised. Enhanced Processing
capacity of 6MT/Hr is operational at Kichcha, Uttarakhand. The R&D
department has undertaken field trials of paddy at various locations
and results have been excellent.
SUBSEQUENT FINANCIAL YEAR 2010-11
Sugar Division
For the season 2010-11, the Sugar Factory is expected to start by end
November, or first week of December, 2010. The sugar season is
expected to be normal as there is higher cane plantation by 15% to 20%.
The Levy sugar price for the season 2010-11 is yet to be announced by
the Central Government. The Central Government has not revised the levy
sugar price for the years 2003-04 to 2008-09. In May 2004, in one of
the sugar mill case, the Supreme Court had mentioned that the SAP fixed
by the State Government needs to be taken into account in the
computation of the levy sugar price.
For the season 2010-11, the Central Government has hiked the FRP of
sugarcane from Rs129.26 per quintal at a base recovery of 9.5% to
Rs.139.12 per quintal.
Recently, for the season 2010-11, the U. P. Government has announced a
record hike of Rs.40 a quintal in the State Advised Price (SAP) of
sugarcane fixing SAP of Rs.205 a quintal as against Rs.165 a quintal in
the previous year.
Spirits Division
The sugar cane crushing is expected to be much higher than the previous
season. Therefore, the total molasses availability will also be higher.
The prices of molasses may drop substantially. Due to this the
production of Rectified Spirit / Special Denatured Spirit and ENA will
also be higher during this year. The sale of Country Liquor will be
higher. IMFL is expected to be the same as in the previous year. The
contract bottling arrangements continue. The overall performance of the
Spirits Division for the current year is likely to be better as
compared to the previous year.
Erection of the boiler in the distillery at Baheri was completed in
August 2010 and was commissioned in September 2010.
Seed Division
We plan to expand our operations in the Eastern part of the country by
entering Odisha and West Bengal, which hold enormous business potential
for Paddy and other Kharif Crops. In the North, our operations are
being reinforced with the induction of additional marketing force in
Punjab and Jammu that will become operational for ensuing Kharif Season
starting March end 2011.
EXPANSION / MODERNISATION
Sugar Division
The Company will try to further optimise the operating parameters to
improve the energy efficiency measures in the boiling house of the
sugar factory at Baheri, thereby reducing steam percent cane from 42%
to 39%, resulting in further savings in bagasse and hence increase in
revenue on sale of saved bagasse.
Co-generation Power Plant
The Company has started implementation of the Co-generation Power Plant
Project of 25 MW at an estimated cost of around Rs.136 crore. The
Company will partially export power to the grid and will benefit from
the well established government policies related to renewable energy
and also get benefit of carbon trading rights. The Sugar Development
Fund, Allahabad Bank and UCO Bank have approved required funds for the
project.
Spirits Division
The Company is eligible to expand 25% capacity of the Distillery under
U. P. Excise Policy. Considering the current market scenario and in
order to reduce overall production cost, the Company is planning to
expand the production capacity of the Distillery from 50,000 BL per day
to 62,500 BL per day.
Seed Division
It is proposed to set up two seed processing plants, one in East Uttar
Pradesh, which will service East U.P., Bihar, Jharkhand, Chattishgarh &
Odisha and second one in Madhya Pradesh. With these plants, processing
capacity is going to be doubled.
FORFEITURE OF APPLICATION AMOUNT ON WARRANTS
On 22.12.2009, the Board had forfeited Rs.67,90,000/- being 10% of the
amount paid by the promoters and persons acting in concert towards
Share Warrant Application Money.
DIRECTORS
Shri A. S. Ruia, Director and Shri I. S. Phukela, Director [Nominee of
GIC] of the Company retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for reappointment.
During the year, Shri Ajeet Prasad was appointed as Additional Director
by the Board on 29.1.2010 whose term of office is upto the ensuing
Annual General Meeting and the proposal for his appointment as Director
has been received from a member, the same has also been included in the
Notice of the Annual General Meeting for your approval.
Pursuant to the provisions of Section 198, 269, 309, 316, Schedule XIII
read with Section III thereto and other applicable provisions, if any,
of the Companies Act, 1956, and as approved by the Remuneration
Committee and the Board of Directors on 3.8.2010, Shri. H. R. Kilachand
was reappointed as the Chairman and Managing Director of the Company
for a period of 3 years with effect from 14.8.2010 at a remuneration
subject to your approval as mentioned in the Notice of Annual General
Meeting, the Special Resolution of which is placed before the
shareholders for approval.
Your Company was informed by Kesar Terminals and Infrastructure Limited
(KTIL), the erstwhile subsidiary of the Company that the Shareholders
of KTIL had approved the appointment of Shri H. R. Kilachand as
Whole-time Director designated as Executive Director for a period not
exceeding 3 years with effect from 14.9.2010. However, the total
remuneration drawn and retained by Shri H. R. Kilachand from both the
Companies shall not exceed the higher maximum limit admissible from any
one of the Companies, i.e the Company or KTIL as per the provisions of
the Companies Act, 1956.
APPOINTMENT UNDER SECTION 314:
Considering the modernization and expansion plans of the Company, the
Board of Directors of the Company has appointed Shri Rohan H.
Kilachand, a relative (son) of Shri. H. R. Kilachand, Chairman and
Managing Director and Smt. M. H. Kilachand, Director of the Company, as
Executive (Projects) on a consolidated remuneration of Rs.50,000/- per
month w.e.f. 1.10.2010. The above remuneration will be reviewed for
fixing his salary in a Special Grade with a reasonable remuneration as
applicable to other employees in that grade, as may be recommended by
the Remuneration Committee and approved by the Board of Directors of
the Company, subject to prior approval of the Central Government.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies (Amendment) Act 2000, the
Directors state as under:
i) that in preparation of the annual accounts for the financial year
ended on 30th June, 2010, 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 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 for that year;
iii) that the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the Assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the Annual Accounts for the
financial year ended on 30th June, 2010 on a going concern basis.
MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT
As per Clause 49 of the Listing Agreement, the Management Discussion &
Analysis Report and the Corporate Governance Report are annexed, which
forms part of this report.
INSURANCE
The Company has taken adequate insurance for all its properties.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
Particulars with respect to conservation of energy, technology
absorption and foreign exchange earning and outgo pursuant to Section
21 7(1 )(e) of the Companies Act, 1956 are given in the Appendix A
forming part of this Report.
FIXED DEPOSITS
Fixed Deposits of Rs.3,66,000/- due for repayment on or before 30th
June, 2010 were not claimed by 8 depositors as on that date.
SUBSIDIARY COMPANY
As per the Honble High Court sanctioned Scheme of Arrangement for
Demerger, on allotment of 47,53,113 Equity Shares of Rs.10/- each fully
paid-up aggregating to Rs.4,75,31,130/- to the shareholders of the
Company by Kesar Terminals and Infrastructure Limited (KTIL) on
1.6.2010.
The post-allotment holding of the Company in KTIL has reduced from 100%
to 9.518% and therefore the Holding- Subsidiary Relationship between
the Company and KTIL has ceased with effect from 1.6.2010. Hence, the
audited Annual Accounts, Directors Report and Auditors Report in
respect of KTIL for the year ended 31.3.2010 is not annexed.
AUDITORS
M/s. Haribhakti & Co., Chartered Accountants, the Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting and being eligible, offers themselves for appointment.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and cooperation extended by the Banks & Financial
Institutions during the year under review. Your Directors wish to place
on record their deep sense of appreciation for the devoted services of
the employees of the Company for its success and also for your support
in the process of implementing successfully the Scheme of Arrangement
for Demerger.
By Order of the Board of Directors
Mumbai H. R. KILACHAND
22nd November, 2010 Chairman & Managing Director
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