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Kaira Can Company Ltd.

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Kaira Can Company is not listed on NSE

Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

To the Members,

The Directors present the Fifty Fifth Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2018.

1. FINANCIAL RESULTS

31fl March, 2018 (Rupees in Lakhs)

31March, 2017 (Rupees in Lakhs)

Total Revenue from operations (including Excise & Excluding GST)

14,881.88

14,412.29

Total Revenue from operations (excluding Excise & Excluding GST)

14,460.23

13,095.66

Other Income

38.28

32.80

Total Revenue

14,498.51

13,128.46

Profit before depreciation and tax

1,145.75

829.94

Less : Depreciation

452.74

440.50

Profit before tax

693.01

389.44

Less : Provision for current tax

268.68

131.89

Provision for Earlier years'' Tax

-

(12.58)

Provision for deferred tax

(56.09)

(3.41)

Net profit for the year amounts to

480.42

273.54

Balance brought forward from previous year

*(Net of Transffered to General Reserve, Dividend & Dividend distribution tax).

2,919.04*

2,801.00

The Disposable profit for the year

3,399.47

3,074.54

2. DIVIDEND

The Directors recommend dividend payment of Rs. 6.50/- per Equity Share of Rs.10/- each on 9,22,133 Equity Share of Rs.10/- each for the year ended 31st March, 2018, which, if approved by the members at the 55th Annual General Meeting to be held on Friday, 27th July, 2018.

The payout of Rs.59,93,865/- in respect of dividend, will be accounted during the Financial Year 2018-19, if approved by the Members in the ensuing Annual General Meeting.

3. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND

In terms of Section 125 of the Companies Act, 2013, the unclaimed dividend relating to the financial year ended 31st March, 2011 declared on 13th July, 2011 is due for remittance on 17th August, 2018 to Investor Education and Protection Fund established by the Central Government.

4. SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2018 is Rs.92,21,330/- comprises 9,22,133 shares of Rs.10/-each. During the year under review, the Company has not issued any Shares on Right basis and bonus to the shareholders.

5. REVIEW OF OPERATIONS

Your Company has achieved a total sales turnover of Rs.14,882 lakhs for the year ended 31st March, 2018 as compared to Rs.14,412 lakhs for the previous year, thereby registering a moderate growth of 3%. The profitability has also shown an improved trend as compared to previous year.

During the year under review, the Company has achieved a sales turnover of Rs.13,599 lakhs of metal cans and its components as compared to Rs.12,630 lakhs in the previous year, thereby registering a growth of 8%, consequent upon better realization and increased demand from dairies in Gujarat. The Company has executed export orders worth Rs.288 lakhs of metal cans and its components during the year under review as compared to Rs.498 lakhs in the previous year. This decline in export sales is mainly due to unfavourable international market conditions and reduction in our exports of metal components to Middle East countries due to volatile economic conditions prevailing there.

The work of installation of the another imported Printing machine with UV drying oven system is in the process at Kanjari Unit. The Printing machine will be ready for commercial production by mid of July 2018. This will cater to additional printing requirements of the company and it will help timely delivery of increased multi colour can requirements. In addition company will be able to take jobs of printed sheets.

The Sugar Cone Division has achieved a sales turnover of Rs.1,283 lakhs as compared to Rs.1,782 lakhs in the previous year.

In February 2018, the company has installed and commissioned new Ice cream Sleeve punching & forming Machine at GIDC Vithal Udyog Nagar in Cone factory. The Sleeve machine is having capacity to supply of Ice cream cone sleeves of different sizes as per the needs of various customers of Ice cream Cones.

By this measure we are now in a position to cater to the customers with timely supply of cones. This will help to improve competitiveness and better profitability.

6. DOMESTIC MARKET AND EXPORTS

The Company is one of the leading and established Company in tin packaging industry in India. The Company is doing aggressive marketing efforts and focusing on quality and uninterrupted supply throughout the year to dairy and food processing industries.

Further, the Company has successfully established its presence in export market in Middle East countries. The Directors are positive of the future growth in international market.

(a) Total Foreign Exchange Earned.

Product exports including deemed exports Rs. 343 lakhs

(b) Total Foreign Exchange Used.

Import of tinplate (main raw material), Stores & Spares, Capital Goods etc. Rs. 5,457 lakhs

7. FINANCIAL AND ACCOUNT STATEMENTS

Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and as mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company''s state of affairs, profits and cash flows for the year ended March 31, 2018.

There is no audit qualification in the financial statements by the statutory auditors for the year under review.

8. RATING

The Company has been by assigned a rating of CRISIL A-/ Stable for Long term facilities and CRISIL A2 Plus for short term facilities.

9. SUBSIDIARIES

Your Company does not have any subsidiary company.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, wherever applicable, are given in the notes to financial statements.

11. DISCLOSURES UNDER THE COMPANIES ACT, 2013

i) Extract of Annual Report:

Pursuant to section 92(3) of the Companies Act, 2013 (''the Act'') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is annexed as Annexure I.

ii) Number of Board Meetings:

The Board of Directors met four times during the year 2017-18. The details of the board meetings and the attendance of the Directors thereat are provided in the Corporate Governance Report, appearing as a separate section in this Annual report.

iii) Composition of Audit Committee

Kaira Can Company Limited has an Audit Committee that currently comprises of three Independent Directors and one Non-Executive Director. The Chairman of the Audit Committee is an Independent Director. The Independent Directors are accomplished professionals from the corporate fields. The Managing Director, Executive Director & CFO, GM (Finance and Accounts) and AGM - Accounts of the Company attend the meetings on invitation. The Company Secretary is the Secretary of the Committee.

During the year ended March 31, 2018 the Committee met four times.

The other details of the Audit Committee are given in the Corporate Governance Report, appearing as a separate section in this Annual Report.

iv) Related Party Transactions:

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit committee is obtained on a quarterly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for the approval on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at www.kairacan.com.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm''s length basis form AOC-2 is not applicable to the Company.

12. MANAGEMENT OF RISKS OF FRAUD, CORRUPTION AND UNETHICAL BUSINESS PRACTICES.

Whistle Blower Policy/ Vigil mechanism

The Company has whistle blower policy to deal with instances of fraud and mismanagement, if any.

In compliance with the requirement of the Companies Act, 2013 and Listing Agreement guidelines, the Company has established a Whistle Blower Policy /Vigil mechanism policy and the same is placed on the website of the Company at www.kairacan.com.

The employees of the company are made aware of the said policy at the time of joining the Company.

13. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the mandate provided to the Internal Auditors. The Internal Audit is entrusted to M/s. Kiran Patel & Co., Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisals of risks and business processes, besides benchmarking controls with best practices in the industry. To maintain its objectivity and independence, the Internal Auditor reports to the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

14. HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION

Your Company has complied with all applicable environmental laws and labour laws. The Company has been taking all the necessary measures to protect the environment and maximise worker protection and safety. The Company''s policy require conduct of operation in such a manner so as to ensure safety of all concerned, compliance of environmental regulations and preservation of natural resources.

In accordance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) 2013 and the rules made thereunder, the Company has constituted Internal Complaints Committee. During the year under review there were no complaints referred to the Committee.

The Company is having status of ISO - 9001-2015 certification, which is internationally recognised for the production, quality control and other qualities. The scope of certificate is for management system which is in line with the standards of the manufacturing and supply of metal cans and components.

15. EMPLOYEES'' STOCK OPTION PLAN

Your Company has not provided to any employee stock options.

16. DIRECTORS

The Board consists of Executive and Non-Executive Directors, including Independent Directors, who have wide and varied experience in different discipline of corporate functioning.

In accordance with the provisions of the Companies Act, 2013 and the Companies Articles of Association, Shri Pavan Kumar Singh and Shri Utsav R. Kapadia retire by rotation and being eligible offer themselves for the re-election.

17. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of the section 149 of the Companies Act, 2013 as well as Regulations 16 (b) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. The Board confirms that the said Independent Directors meet the criteria as laid down under the Companies Act, 2013 as well as SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.

18. CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management, which is available on the company''s website. All Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

19. EVALUATION OF THE BOARD''S PERFORMANCE

In compliance with Companies Act, 2013, and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, and in line with the Guidance notes issued by SEBI the performance evaluation of the Board as a whole and of the Individual Directors was carried out during the year under review. With the help of a structured questionnaire which was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board''s functioning, Board culture, execution and performance and specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.

The Directors expressed satisfaction with the evaluation process.

20. KEY MANAGERIAL PERSONNEL

During the year under review, the following are the Key Managerial Personnel of the Company:

Sr. No.

Name of the Key Managerial Personnel

Designation

1

Shri. Ashok B. Kulkarni

Managing Director

2

Shri. K. Jagannathan

Executive Director & Chief Financial Officer

3

Shri. Hiten P Vanjara

Company Secretary

21. PARTICULARS OF THE EMPLOYEES

Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act, and the Rules framed thereunder is enclosed as Annexure to the Board’s Report. The information in respect of employees of the Company required pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136 of the Companies Act 2013, the Report and Accounts are being sent to the Members and other entitled thereto, excluding the aforesaid Annexure 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. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

22. NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy is explained in the Corporate Governance Report.

23. STATUTORY AUDIT

As per the provisions of Section 139 of the Companies Act 2013, the term of office of M/s Kalyaniwalla & Mistry LLP, Chartered Accountants as Statutory Auditors of the Company, will conclude from the close of the forthcoming Annual General Meeting of the Company. They have been our Auditors for past 10 years. The Board of Directors places on record its appreciation for the services rendered by M/s Kalyaniwalla & Mistry LLP, Chartered Accountants. as the Statutory Auditors of the company.

Subject to the approval of the Members, the Board of Directors of the Company has recommended the appointment of Messrs. MSKA & Associates, Chartered Accountants (ICAI Firm Registration Number 105047W) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013. Members'' attention is drawn to a Resolution proposing the appointment of Messrs. MSKA & Associates, Chartered Accountants, as Statutory Auditors of the Company which is included at Item No. 5 of the Notice convening the Annual General Meeting.

24. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Mr. Prashant S. Mehta, Practicing Company Secretary ACS 5814 (C.P.No.17341) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included in the Directors'' Report and forms an integral part of this report and is annexed as Annexure - II

25. COST AUDIT

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Can Division.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s P. D. Modh & Associates as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking member''s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General meeting.

26. BUSINESS RISK MANAGEMENT

Pursuant to SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 the Company has laid down a framework to inform the Board about the particulars of risk assessment and minimisation procedures. These procedures are reviewed by the Board annually to ensure that executive management controls risk through the mechanism of a properly defined framework.

The Company has a robust Business Risk Management framework to identify, evaluate, access business risks and their impact thereupon. The key business risk elements identified by the Company and bifurcated under different Heads are as under:

a. Raw Materials: This head covers Cost of raw materials, non-availability of raw materials, etc.

b. Financial : This head covers risk elements such as dwindling financial ratios, foreign exchange fluctuations, drop in credit rating, investor relations, fraud, inadequate insurance, etc.

c. Operations : This head includes risk elements such as non-availability of Labour, labor unrest, non-availability of power, non-availability of water, breakdown, non-availability of competent personnel, pollution control, legal compliance, safety, logistics / transport, machinery spares and equipment issues, etc.

d. Market : This head includes risk elements such as price of finished products, demand Supply mismatch, substitute products, bad debts, service / product complaints, brand image, etc.

27. INSURANCE

The Assets of the Company are adequately insured against the loss of fire, riots, earthquake, etc. and other risks which considered necessary by the Management.

28. DEPOSITS

The Company has discontinued its Fixed Deposit Scheme w.e.f. 11th August, 2017. The Company has also stopped accepting fresh and renewing all fixed deposits from the members. The company has made arrangement to repay fixed deposit on maturity to fixed deposit holders.

The Company has assigned a rating of FA/Stable by CRISIL Limited for its Fixed Deposit Scheme, for the members.

29. INSIDER TRADING POLICY

As required under the new Insider Trading Policy Regulations of SEBI, your Directors have framed new Insider Trading Regulations and code of Internal Procedures and Conduct for Regulating Monitoring and Reporting of Trading by Insiders. For details please refer to the company''s website.

30. DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

31. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

During the year under review, relations between the employees and the management remained satisfactory at all the units of the Company. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business.

The Company is committed to nurturing, enhancing and retaining top talent through learning and organizational development as a part of human resource development function.

None of the employee is drawing salary in excess of the limits prescribed by the Companies Act, 2013 and rules made thereunder, which needs to be disclosed in the Directors'' Report.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and company''s operations.

33. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

Your Company is committed to good Corporate Governance practices and following to the guidelines prescribed by the SEBI and BSE Ltd from time to time and Pursuant to SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 the Company has implemented various provisions relating to Corporate Governance, a separate section on Corporate Governance practices, followed by the Company and Management discussion and analysis together with a certificate from the Company Secretary in practice confirming compliances, is set out in the Annexure forming part of this Report.

34. CORPORATE SOCIAL RESPONSIBILITY

The Company is committed to discharging its social responsibility as a good corporate citizen.

The Committee has identified a Registered Trust, viz., Vardhaman Seva Kendra, Gujarat Which taken up relief work for protection Animal in distress mostly affected by heavy rain in North Gujarat and Rajasthan in August 2017.

The Committee has as also contributed by way of donation to Registered Trust, viz., Charutar Arogya Mandal, located at Vallabh Vidya Nagar, Gujarat, which manages Shree Krishna Hospital, which cater to general public and needy people in and around Karamsad, near Kanjari and Anand. The Trust is dedicated to serve the public at reasonable rate for advance medical treatment of cancer and cardiac patients under its health care and preventive health care programme.

The Board provide a brief outline of the company''s CSR policy including the statement of intent reflecting the ethos of the company, broad areas of CSR interest and an over view of activities proposed to be undertaken. The CSR policy has been hosted on the website of the Company.

The CSR Committee consists of the following members :

Name of the Member

Designation

Shri. Premal N. Kapadia

Chairman of the Committee

Shri. Shishir K. Diwanji

Member

Shri. K. Jagannathan

Member

The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is included in the Directors’ Report and forms an integral part of this Report and is annexed as Annexure III.

35. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTIONS

Energy Conservation continued to be priority area for the Company for effective control on electricity and fuel consumption at all the Units.

During the year, further cost savings have been achieved as all the Units of the Company have now switched over with Natural Gas and replacing conventional lighting with LED lighting to achieve reduction in power consumption.

The Company continues its efforts in upgradation of systems and equipment, with a view to improving the quality of the products, minimizing manufacturing wastages, cost reduction in terms of better productivity and customer satisfaction through better product performance.

36. ENHANCING SHAREHOLDERS VALUE

Your Company believes that its Members are among its most important stakeholders.

Accordingly, your Company’s operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.

37. ACKNOWLEDGEMENT

Your Directors express their appreciation for the assistance and co-operation received from the Gujarat Co-operative Milk Marketing Federation Limited, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for the devoted services of the executives, staff and workers of the Company for its success.

On behalf of the Board of Directors

Place : Mumbai SHISHIR K DIWANJI

Dated : 28th May, 2018 CHAIRMAN

(DIN: 00087529)

Director’s Report