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KCP Sugar Ind Corp Directors Report, KCP Sugar Reports by Directors
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KCP Sugar Ind Corp

BSE: 533192|NSE: KCPSUGIND|ISIN: INE790B01024|SECTOR: Sugar
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Download Annual Report PDF Format 2016 | 2013 | 2012
Directors Report Year End : Mar '16    Mar 15

The Directors present their 20th Annual Report and the audited statement of accounts for the year ended 31st March 2015. The financial statements have been presented in the new format in accordance with the changes brought about by the Revised Schedule III to the Companies Act, 2013.

I. FINANCIAL RESULTS:

For the

For the

Year ended

Year ended

31.03.2016

31.03.2015

Physical Performance

Cane crushed - in Tonnes

11,26,691

10,95,339

Sugar bagged - In Quintals

10,56,839

10,16,945

Financial Performance - Rs. Crores

Turnover

510.27

515.52

Other Income

9.02

8.94

Profit Before Tax

8.78

(27.54)

Profit After Tax

8.76

(16.17)

Surplus from Previous Year

88.74

106.27

Amount available for appropriation

97.50

90.10

Appropriations

Transfer to General Reserve

--

--

Proposed Dividend

2.83

1.13

Tax on proposed Dividend

0.58

0.23

Carried forward

94.09

88.74

2. PERFORMANCE:

During the financial year under review your Company recorded a Turnover of Rs. 510.27. crores (Prev. Year: Rs. 515.52 cr.) including Excise Duty of Rs. 17.69 crores (Prev. Year: Rs.12.96 cr.) and Inter-divisional transfers of Rs. 120.12 crores (Prev. year: Rs.108.05 cr.). The profit before finance cost and depreciation is Rs. 25.88 crores. Profit before tax is Rs. 8.78 crores and after adjustments relating to payment of Income Tax pertaining to earlier years and Deferred Tax, the Profit after tax is Rs. 8.76 crores.

3. DIVIDEND:

The Board of Directors recommends a dividend of Re.0.25 per equity share of face value of Re.1/- each on the Paid-up Equity Capital for the year ended 31.03.2016 as against Re.0.10 per equity share, approved for the previous year ended 31.03.2015. The dividend recommended by your Directors, if approved at the ensuing Annual General Meeting by the Shareholders would be paid within the stipulated time.

4. SHARE CAPITAL AND RESERVES:

The share capital of the Company is Rs.11.33 crores. There was no addition to General Reserve in the current year and hence the General Reserve stood at Rs.112.09 crores only as on 31.03.2016. The total Reserves and Surplus has increased to Rs.208.18 crores as on 31.03.2016 as against Rs.202.84 crores as on 31.03.2015.

5. SUBSIDIARY COMPANIES:

Your Company has two wholly-owned Subsidiaries, viz, The Eimco-K.C.PLimited and KCP Sugars Agricultural Research Farms Limited. Both the wholly-owned subsidiaries are unlisted companies and do not fall under the category ‘Material Subsidiary'' in terms of Regulations 16 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. There are no Associated Companies within the meaning of section 2(6) of the Companies Act, 2013 and there has been no material change in the nature of business of the subsidiaries. A statement containing salient features of the financial statement of subsidiaries in Form AOC-1, forms part of the Board''s Report - Annexure X.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A comprehensive discussion and analysis report on the industry''s structure as well as on the financial and operational performance of the Company is contained in the Management Discussion and Analysis Report, which forms an integral part of the Board''s Report (Annexure I).

7. CORPORATE GOVERNANCE REPORT:

Pursuant to Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Corporate Governance Report together with the Certificate from the Company''s Statutory Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure II to Board''s Report.

8. EXTRACT OF ANNUAL RETURN:

In pursuance of section 134(3) of the Companies Act, 2013, the extract of the Annual Return has provided under section 92(3) of the Companies Act, 2016, is given in Annexure III.

9. DIRECTOR’S RESPONSIBILITY STATEMENT:

As required by Section 134 of the Companies Act, 2013, your Directors certify as follows’. that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and that there were no material departures there-from; ii. that 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 ended 31st March 2016 and of the Profit of the Company 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 the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the Directors had prepared the annual accounts on a going concern basis’. That the directors had laid down internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively.vi. That 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.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SETION 186 OF THE COMPANIES ACT, 2013:

There is no loan / guarantee / investment covered under section 186 of the Companies Act, 2013, during the financial year 2015-16. During the financial year under review the Company has provided a loan to one of its wholly-owned subsidiary company and the amount has been fully recovered during the financial year itself. In pursuance of Rule 11 of Companies (Meetings of Board and its powers) Rules, 2014, the requirement of section 186(3) is not applicable.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The Company has entered into Rental Lease Agreements with related parties in the ordinary course of business and on arms length basis. The value of such transactions is well within the threshold limit prescribed under Rule 15 of Companies (Meetings of Board & its powers) Rules, 2014 and hence outside the ambit of section 188 of the Companies Act, 2013 - Annexure IX.

12. MATERIAL CHANGES AND COMMITMENT:

There is no change in the nature of business of the Company during the financial year under review. There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of Board''s Report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE INFLOW AND OUTGO:

Information relating to Conservation of Energy, Technology absorption, Foreign Exchange inflow and outgo, as required under section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of Companies (Accounts) Rules, 2014, is furnished in Annexure IV.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The CSR policy of the Company and the details about the measures taken by the Company on CSR activities during the financial year as required under Companies (Corporate Social Responsibility Policy) Rules, 2014, have been disclosed in Annexure V, in pursuance of section 135 of the Companies Act, 2013.

15. PARTICULARS OF EMPLOYEES:

Statement required under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not attached to this Report as none of the employees was in receipt of remuneration as prescribed under this Section and Rules.

The information required pursuant to section 197 of the Companies Act, 2013, read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is furnished in Annexure VI.

16. PERSONNEL AND INDUSTRIAL RELATIONS:

The Employee relations scenario continued to be harmonious and congenial. Acknowledging this, your Company has been awarded for outstanding efforts in maintaining cordial Industrial Relations and Labour Welfare by Government of Andhra Pradesh.

17. DIRECTORS:

Smt.V.Kiran Rao, Director, who retires by rotation at this AGM and is eligible for reappointment, is proposed to be reappointed as Director at this AGM. The Board recommends her reappointment and accordingly, resolution seeking approval of members for her reappointment has been included in the Notice for the forthcoming Annual General Meeting along with her brief profile.

18. AUDITORS:

Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed under Companies (Audit & Auditors) Rules, 2014, M/s.B.Purushottam & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company from the conclusion of 19th Annual General Meeting (AGM) held on 11th September 2014, till the conclusion of the 22nd AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. A written consent for appointment as Auditors and also a Certificate confirming that the appointment, if made, shall in accordance with the conditions as prescribed and in conformity with the criteria prescribed under section 141(3) of the Companies Act, 2013, have been received from them. Accordingly, the requisite resolution relating to the appointment of M/s. B.Purushottam & Co., Chartered Accountants, as statutory auditors of the Company, is placed before the members at this 21th Annual General Meeting for ratification in pursuance of 1st proviso to section 139(1) of the Companies Act, 2013.

19. COST AUDIT:

Mr. V. Srinivasan had been appointed by the Board of Directors of the Company as Cost Auditor to conduct the Cost Audit in respect of Sugar, Industrial Alcohol, Electricity, Fertilizer, Calcium Lactate and CO2 for the financial year 2015-16, and his remuneration was ratified by the members at the 20th Annual General Meeting held on 20.08.2015. The Cost Audit Reports for 2015-16 are due for submission on or before 27.09.2016.The Cost Audit reports for 2014-15 were e-filed with the Ministry of Corporate Affairs, New Delhi, vide, SRN S-39692728 dt. 30.09.2015.In pursuance of Section 148 of the Companies Act, 2013, your Directors, on the recommendation of the Audit Committee, subject to ratification of his remuneration by the shareholders at this AGM, have appointed Shri. V. Srinivasan, Cost Accountant, Chennai, as the Cost Auditor to conduct the Cost Audit of Sugar, Industrial Alcohol, Electricity, Fertilizer, Calcium Lactate and CO2, for the financial year ending 31st March 2017. Mr.V.Srinivasan has confirmed that his appointment is within the limits of section 148 of the Companies Act, 2013 and has also certified that he is free from any disqualifications specified under section 148 of the Companies Act, 2013. The Audit Committee has also received a certificate from the said Cost Auditor certifying his independence and arms length relationship with the Company.

20. SECRETARIAL AUDIT & SECRETARIAL STANDARDS:

In pursuance of section 204 of the Companies Act, 2013, the Board of Directors at its meeting held on 11.02.2016 appointed M/s. V.Mahesh & Associates, Company Secretaries in practice, as Secretarial Auditor for the financial year 2015-16 and their report is annexed with the Board''s Report. (refer Annex. VII). Pursuant to section 118(10) of the Companies Act, 2013, the Company observes Secretarial Standards 1 and 2 relating to Board Meetings and General Meetings, prescribed by the Institute of Company Secretaries of India.

- There are no disqualifications, reservations or adverse remarks or disclaimers in the Statutory Auditors, Cost Auditor and Secretarial Auditor''s Report.

- The Company, since inception, remains in the regime of unqualified financial statements. The Company will comply with SEBI circular dt. 13.08.2012 and Regulation 33 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and submit Form A along with Annual Report.

21. INTERNAL AUDIT:

Pursuant to Section 138(1) of the Companies Act, 2013, the Company has appointed Shri.S.Manisekaran, Chartered Accountant (Membership No. 026400) to conduct internal audit of the Company for the financial year 2015-16. The Internal Auditor reports to the Audit Committee and submits his reports on quarterly basis.

22. CREDIT RATING:

Credit Analysis & Research Ltd (CARE) has upgraded the Credit Rating on your Company as ‘CARE ‘A-'' (Single A minus) for long term bank facilities and ‘CARE A1'' (A One) for short term bank facilities and for Fixed Deposit it is CARE A-(FD) [Single A Minus (Fixed Deposit] assigned to your Company for the current year. The ratings for the financial year 2016-17 are awaited on this date. Measured through industry yardstick these ratings are considered to be having adequate degree of safety and very strong degree of safety respectively, for a sugar mill.

23. ISO CERTIFICATION:

Your Company has been certified consecutively for the past eight years under BS EN ISO 22000:2005, BS EN ISO 9001:2000, and OHSAS 18001:2007 for Manufacture of sugar, associated products and site activities, and Occupational Health and Safety Management system by Lloyd''s Registry Quality Assurance Limited.

24. FIXED DEPOSITS:

As on 31.03.2016 your Company had held deposits of Rs. 40.13 crores as against Rs. 33.04 crores as on

31.03.2015. As at 31.03.2016, there were matured and unclaimed deposits amounting to Rs. 0.48 crores in respect of 82 deposits. As on the date of this report, amount of unclaimed deposits is Rs.0.48 crores. As there was no deposit unclaimed more than seven years, there was no transfer of unclaimed deposits to Investors Education and Protection Fund constituted under Section 124 of the Companies Act, 2013, during the year.

25.CEO AND CFO CERTIFICATION:

The Managing Director and the Chief Financial Officer have provided the compliance certificate to the Board of Directors as specified under Part B of Schedule II in accordance with Regulation 17(8) of SEBI (LODR) Regulations, 2015, which was placed before the Board at its Meeting on 26.05.2016. Annexure VIII.

26.ACKNOWLEDGEMENT:

Your Directors would like to take this opportunity to express their deep sense of gratitude to the Cane growers, the Shareholders, Banks, Institutions, Central and State governments, Depositors, Sugar Dealers, Business Associates, as also other regulatory authorities for their continued support and cooperation. Your Directors would also to place on record their sincere appreciation for the total commitment, dedication and hard work put in by all the employees, which contributed to the Company''s progress during the year under review.

For and on behalf of the Board of Directors

Place : Chennai VINOD R. SETHI

Date : 26.05.2016 Executive Chairman

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