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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 2017 | 2016 | 2013 | 2012
Directors Report Year End : Mar '18    Mar 16

The Directors have pleasure in presenting the 23rd Annual Report and the audited financial statements for the year ended 31st March 2018.

1. FINANCIAL RESULTS:

For the Year ended

For the Year ended

31.03.2018

31.03.2017

Physical Performance

Cane crushed - in Tonnes

868552

740826

Sugar bagged - In Quintals

819141

683988

Financial Performance - Rs. Crores

Turnover

425.27

519.29

Other Income

57.76

33.88

Profit Before Tax

(7.35)

69.89

Profit After Tax

8.37

54.89

Earnings per share

0.73

4.84

2. PERFORMANCE:

During the financial year under review your Company recorded a Turnover of Rs. 425.27 crores (Prev.Year: Rs. 519.29 cr.) including Excise Duty of Rs. 4.84 crores (Prev.Year: Rs.22.33 cr.) and Inter-divisional transfers of Rs. 95.32 crores (Prev. year: Rs.90.27 cr.). The profit before finance cost and depreciation is Rs.16.00 crores. Loss before tax is Rs.7.35 crores and after adjustments relating to Deferred Tax, the Profit after tax is Rs.8.36 crores.

3. DIVIDEND:

The Board of Directors recommends a dividend of Re. 0.10 per equity share of face value of Re.1/- each on the Paid-up Equity Capital for the year ended 31.03.2018 as against Re.0.90 per equity share, approved for the previous year ended 31.03.2017. 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. Other equity as at 01.04.2017 was Rs. 247.70 Crores. After transferring profit for the financial year 2017-18 i.e. Rs. 8.36 Crores and after adjusting provision for dividend and tax thereon Rs. 12.28 Crores and other comprehensive income less tax of (Rs. 0.06 Crores) other equity as at 31 March, 2018 stood at Rs. 243.72 Crores.

5. SUBSIDIARY COMPANIES:

Your Company has two wholly-owned Subsidiaries, viz, The Eimco-K.C.P Limited 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 to Board’s Report.

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:

i. 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 2018 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.

v. 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 SECTION 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 2017-18. 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. Disclosure of particulars of contracts / arrangements entered into by the Company with the related parties in pursuance of section 188(1) of the Companies Act in Form AOC-2, forms part of the Board’s Report.

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:

Director retiring by rotation:

Shri. Vinod R.Sethi, 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 his reappointment and accordingly, resolution seeking approval of members for his reappointment has been included in the Notice for the forthcoming Annual General Meeting along with his brief profile.

18. AUDITORS:

M/s. Suri & Siva (FRN 004284S), Chartered Accountants, were first appointed as Statutory Auditors of the Company at the 22nd Annual General Meeting held on 15.09.2017. In terms of their appointment, they are holding office of Statutory Auditors of the Company upto the conclusion of the 27th Annual General Meeting, subject to ratification by members at every AGM. M/s. Suri & Siva, Chartered Accountants, have confirmed that their appointment is within the limits specified under section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified to be appointed as statutory auditors of the Company in terms of the provisions of the proviso to section 139(1), section 141(2) and section 141(3) of the Companies Act, 2013 read with the provisions of the Companies (Audit & Auditors) Rules, 2014.

The Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

As the Annual Ratification of the appointment of Statutory Auditors at every Annual General Meeting in pursuance of proviso to section 139(1) and Rule 3(7) of Companies (Audit & Auditors) Rules, 2014, has been dispensed with, with effect from 7th May 2018, the Company has not placed the matter relating to appointment of Auditors for ratification before the members at this Annual General Meeting.

19. COST AUDIT:

M/s. SRR & Associates, Cost Accountants, Chennai, (FRN 000992), 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 2016-17, and their remuneration was ratified by the members at the 22nd Annual General Meeting held on 15.09.2017. The Cost Audit Reports for 2017-18 are due for submission on or before 27.09.2018.

The Cost Audit reports for 2016-17 were e-filed with the Ministry of Corporate Affairs, New Delhi, vide, SRN G-52301405 dt. 07.09.2017.

M/s SRR & Associates confirmed that its appointment is within the limits of section 148 of the Companies Act, 2013 and has also certified that the Firm 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 Firm of Cost Auditors certifying its 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 09.02.2018 appointed M/s. VMahesh & Associates, Company Secretaries in practice, as Secretarial Auditor for the financial year 2017-18 and their report is annexed with the Board’s Report. (referAnnex. 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 2018-19. The Internal Auditor reports to the Audit Committee and submits his reports on quarterly basis.

22. CREDIT RATING:

Credit Analysis & Research Ltd (CARE) has reaffirmed the Credit Rating on your Company as ‘CARE ‘A (Single A) for long term bank facilities and reaffirmed ‘CARE A1’ (A One) for short term bank facilities and for Fixed Deposit it is CARE A (FD) [Single A (Fixed Deposit] assigned to your Company for the current year. The ratings for the financial year 2018-19 are awaited on this date. Measured through industry yardstick these ratings are considered to be having adequate degree of safety for a sugar mill.

23. ISO CERTIFICATION:

Your Company has been certified consecutively for the past nine 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 31.03.2018 your Company had held deposits of Rs. 68.78 crores (including unclaimed deposits) as against Rs.51.67 crores as on 31.03.2017. As at 31.03.2018, there were matured and unclaimed deposits amounting to Rs. 1.35 crores in respect of 124 deposits. As on the date of this report, amount of unclaimed deposits is Rs.0.57 crores.

In compliance with the provisions of Investors Education and Protection Fund constituted under Section 124 of the Companies Act, 2013, the Company has transferred 1 deposit amounting to Rs.0.30 lakhs which remained unclaimed beyond the period of seven years from the date of maturity to the Investor Education and Protection Fund.

25. 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 : 25.05.2018 EXECUTIVE CHAIRMAN

Source : Dion Global Solutions Limited
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