The Members of K G Petrochem Limited
The Directors have pleasure in presenting this 36th Board’s Report of your Company together with the Audited Statement of Accounts and the Auditors’ Report of your company for the financial year ended, 31st March, 2016
(Rs. In Lacs)
Profit Before Interest and Depreciation
Profit Before Depreciation
Net Profit Before Tax
Provision for Tax
Net Profit After Tax
REVIEW OF OPERATIONS
During the Financial Year, the company was able to improve its performance in revenue from operation. The revenue from operation of the company for the year ended 31st March 2016 was Rs. 21432.63 lacs as against Rs. 18589.93 Lacs in F.Y 201415, an increase of 15.29% on a year to year basic.
Further Segment wise result of operation is as under:-
During the year, its revenue from operation was Rs. 21366.44 lacs including export sales of Rs 16574.67 lacs (fob) as against Rs. 18501.44 lacs including export of Rs. 14810.95 lacs in previous year, growth of 15.49 %. The division has performed well during the year under review.
During the year the agency division has sold HDPE/LLDPE Granules 16146.45 Mt. amounting to Rs. 16798.67 lacs in comparison of 21846 Mt. amounting of Rs. 25581 lacs and earned commission of Rs. 66.19 lacs as compared to last year Rs. 88.43 Lacs only due to plant of Gail was under maintenance about 2 months.
Garment division is doing 100% Job work for Textile Division.
CHANGE IN NATURE OF BUSINESS, IF ANY
There was no change in the business of the Company during the financial year 2015-16.
In order to conserve the resources of company the directors are not recommending any dividend.
AMOUNTS TRANSFERRED TO RESERVES
During the Financial year 2015-16, company has received capital subsidy under TUFF Scheme Rs. 446.44 lacs (Net of withdrawal), which added in capital reserve and Rs. 926.90 lacs transfer to surplus account.
INVESTOR EDUCATION AND PROTECTION FUND
There was no unclaimed / unpaid dividend, hence the company is not required to transfer any amount to Investor Education and Protection Fund (IEPF) pursuant to sections 124 and 125 of the Companies Act, 2013 and other applicable provisions.
There was no any change in share capital of the company during the financial year 2015-16.
MATERIAL CHANGE AND COMMIETMENTS
No material changes have occurred and commitments made, affecting the financial position of the company, between the end of the financial year of the company and the date of this report.
There is no order passed by any regulator or court or tribunal against the company, impacting the going concern concept or future operations of the company.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The company’s internal control system is commensurate with the size, scale and complexity of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks with best practices in the industry. The internal audit is entrusted to M/s. Arpit Vijay & Co, Chartered Accountants. The Internal Auditor of the company conduct the audit on regular basis and Audit Committee actively review the Internal Audit Report. The Management with Audit Committee periodically reviews the Internal Control System and procedure for the efficient conduct of the business.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
On the recommendation of Nomination and Remuneration Committee, the Board appointed Mr. Radhey Shyam Gemini, as an Additional Director of the company with effect from November 09, 2015, who shall hold office up to the Annual General Meeting, and is eligible for appointment as Director as provided under the Articles of Association of the Company. The Company has received notice under Section 160 of the Companies Act, 2013 from a member signifying his intention to propose the candidature of Mr. Radhey Shyam Gemini for the office of Independent Director.
As per the provisions of the Companies Act, 2013, Mrs. Savitri Kandoi will retire by rotation at the ensuing AGM and being eligible offered herself for re-appointment. The Board recommends her re-appointment.
Mr. Nitin Jaipuria, who was appointed as the Independent Director of the company on July 13, 2009 has resigned from the Board on November 06, 2015. The Board of Directors records their appreciation for the services rendered by Mr. Nitin Jaipuria during his tenure.
Ms. Navita Khunteta, who was the Company Secretory of the company on July 10, 2014 has resigned from the Company on February 04, 2016. The Board of Directors records their appreciation for the services rendered by Ms. Navita Khunteta during his tenure.
The Independent Directors have confirmed and declared that they are not disqualified to act as an Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors.
MEETINGS OF THE BOARD OF DIRECTORS
During the year 2015-16, the Eight Board meetings were conveyed and held on 16/04/2015, 18/04/2015, 26/05/2015, 30/05/2015, 14/08/2015, 23/09/2015, 09/11/2015 & 13/02/2016. Other details pertaining to attendance at the meeting and sitting fee/ commission/ remuneration paid to them at the meeting are given in Corporate Governance Report attached with this Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings.
EVALUATION OF THE BOARD''S PERFORMANCE
In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Board was carried out during the year under review. More details on the same are given in the Corporate Governance Report.
The Company has prepared an annual performance evaluation policy for performance evaluation of Independent Directors, Board and the Committees.
Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc.
The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department.
The company follows a policy on remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination and Remuneration Committee and the Board. More details on the same are given in the Corporate Governance Report.
ICRA has assigned a long-term rating of ICRA BBB (pronounced ICRA Triple B) and short-term rating of ICRA A3 (ICRA A three Plus) vide letter dated 30.5.2016.ICRA BBB this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations. Such instruments carry moderate credit risk. ICRA] A3 Instruments with this rating are considered to have moderate degree of safety regarding timely payment of financial obligations.
Shares of the Company are listed on the Bombay Stock Exchange.
SUBSIDIARIES/ ASSOCIATES/ JOINT VENTURES
The company does not have any subsidiary/associate/joint venture.
STAKEHOLDER RELATIONSHIP COMMITTEE
The Stakeholder Relationship Committee constituted under section 178 of companies Act, 2013 comprises of Mrs. Savitri Kandoi as Chairman and Mr. Gauri Shanker Kandoi and Mr. Manish Singhal as members. The details of term of reference of the Committee member, dates of meeting held and attendance of the Directors are given separately in the Corporate Governance Report.
The Audit Committee constituted under section 177 of companies Act, 2013 comprises of Mr. Kamlesh Sharma as Chairman and Mr. Rameshwar Pareekand Mr. Raj Kumar Agarwal as members. The details of term of reference of the Audit Committee member, dates of meeting held and attendance of the Directors are given separately in the Corporate Governance Report.
The Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees of the Company for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the code of conduct of the Company as prescribed under the Companies Act, 2013 and Regulation 22(1) of SEBI (Listing Obligations and Disclosure Requirements), Regulation 2015. This vigil mechanism shall provide a channel to the employees and Directors to report to the management concerns about unethical behavior, and also provide for adequate safeguards against victimization of persons who use the mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.kgpetro.in.
CODE OF CONDUCT
Directors, Key Managerial Personnel and senior management of the Company have confirmed compliance with the Code of Conduct applicable to the Directors and employees of the Company and the declaration in this regard made by the CEO & Whole Time Director is attached as Annexure ''I'' which forms a part of this Report. The Code of Conduct is available on the Company''s website www.kgpetro.in
HUMAN RESOURCE MANAGEMENT, HEALTH AND SAFETY
During the year the Company had cordial relations with workers, staff and officers. The shop floor management is done through personal touch, using various motivational tools and meeting their training needs requirements. The company has taken initiative for safety of employees and implemented regular safety audit, imparted machine safety training, wearing protective equipment''s etc.
The Company believes in empowering its employees through greater knowledge, team spirit and developing greater sense of responsibility. There were 842 regular employees as at March 31, 2016.
DISCLOSURE UNDER SEXUAL HARSSEMET OF WOMEN AT WORK PLACE (PREVENTATION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has setup an internal complaints committee to redress complaints regarding sexual harassment. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, regarding employees is given in Annexure ''II''.
There was no employee in the company drawing remuneration in excess of the limits set out in the Rule 5(2) and 5(3) of the Companies (Appointment and remuneration of Managerial Personnel) Rules 2014.
EXTRACT OF ANNUAL RETURN
The particulars required to be furnished under Section 134(3)(a) of the Companies Act, 2013 read with Companies(Management and Administration) Rules, 2014 as prescribed in Form No. MGT-9 is given in Annexure ''III''.
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 the ordinary course of business. During the Year, the company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the company on materiality of related party transaction, hence Form no. AOC-2 is not applicable to the company.
CORPORATE SOCIAL RESPONSIBILITY
As per Section 135(5) of the Companies Act, 2013 and Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility Committee comprises of Mr. Gauri Shanker Kandoi as the Chairman and Mr. Manish Singhal and Mr. Raj Kumar Agarwal as the members.
The committee has decided the activities to be undertaken by the company and the expenditures to be incurred on the same and recommended the same to the board thereafter the board approved the CSR policy. The other detail related to CSR is given in Annexure- IV.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO:
Information on conversation of energy, technology absorption , foreign exchange earnings and out go pursuant to sec. 134 of the Companies Act, 2013 read with Rule of the Companies (Accounts)Rules, 2014 is given in “Annexure V” of the report.
A separate report of the Board of Directors of the Company on Corporate Governance is included in the Annual Report as Annexure ''VI'' and the Certificate from M/s Sandeep Kumar Jain and Associates, Practicing Company Secretaries confirming compliance with the requirements of Corporate Governance as stipulated in Schedule V of sEbI (Listing Obligations and Disclosure Requirement) Regulations, 2015 is annexed as Annexure ''VII''.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
The Management Discussion and Analysis Report, as required by Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is given in Annexure ''VIII''.
STATUTORY AUDITORS AND REPORT THEREON
Pursuant to the provisions of Section 139 of the Act and the rules framed there under, R Sogani & Associates, Chartered Accountants, (FRN 018755C) was appointed as statutory auditors of the Company from the conclusion of the thirty forth annual general meeting (AgM) of the Company held on September 27, 2014 till the conclusion of the thirty-ninth annual general meeting to be held in the year 2019, subject to ratification of their appointment at every AGM. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of R Sogani& Associates, Chartered Accountants, as statutory auditor of the Company is placed for ratification by the shareholders.
Pursuant to Section 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate from the Auditors to the effect, inter-alia, that their re-appointment, would be within the limits laid down by the Act and that they are not disqualified for such re-appointment under the provisions of applicable laws
The observation of the Auditors in their report read with relevant notes on the accounts, as annexed are self-explanatory and need no elaboration.
SECRETARIAL AUDIT AND REPORT
According to provision of the section 204 of the Companies Act 2013 read with rule 9 of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report Submitted by M/s Arms & Associates LLP, Practicing Company Secretaries ,for the financial year ended 31st March, 2016 is annexed herewith for your kind perusal and information. (Annexure -IX)
As per Sub Rule (3) of Rule 4 of Companies (Cost Records & Audit), Rules, 2014, Cost Audit for the FY 2015-16 is not applicable on the company as the export turnover of the company is more than 75% of its total turnover.
LOANS, GUARANTEES AND INVESTMENTS U/s 186.
There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable for the F.Y. 2015-16.
Your company has not accepted any deposit and accordingly no amount was outstanding as at the Balance Sheet date.
DEMATERIALISATION OF SHARES
The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid. As on March 31, 2016, 92.45% of the share capital stands dematerialized.
Statements in this report, describing the Company’s objectives, expectations and/or anticipations may be forward looking within the meaning of applicable Securities Law and Regulations. Important factors that could influence the Company’s operations include global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations.
The Company assumes no responsibility in respect of the forward-Booking statements, which may undergo changes in future on the basis of subsequent developments, information or events.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013 the Board of Directors of the Company confirms that-
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) 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 and loss of the company for that period;
(c) 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;
(d) The directors had prepared the annual accounts on a going concern basis; and
(e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(f) 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.
Your Directors wish to express their grateful appreciation to the continued co-operation received from the Banks, Government Authorities, Customers, Vendors and Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service of the Executives, staff and Workers of the Company.
For and on behalf of the Board of Directors
KG Petrochem Limited
Date: 13.08.2016 Manish Singhal Gauri Shanker Kandoi
Place: JAIPUR Director CMD
DIN NO. : 00120232 DIN NO. : 00120330