DIRECTORS' REPORT TO THE MEMBERS, The Directors present the Fifty Third Report and the Audited Statement of Accounts of the Company for the year ended 31st March, 2016. 2. DIVIDEND AND RESERVE The Directors recommend payment of the following dividend for the year ended 31st March, 2016, which, if approved by the members at the Annual General Meeting to be held on Friday, 12th August, 2016, will be paid to those members of the Company who hold Equity Shares in physical form and whose names stand on the Register of Members of the Company as on 5th August, 2016 and to those members who hold their Equity Shares in Demat form and whose names appear on the list of members provided by NSDL/CDSL for that purpose. A dividend of 50% i.e. Rs.5/- per Equity Share of Rs.10/- each on 9,22,133 Equity Shares of Rs.10/- each aggregating to Rs.46,10,665/-. The Company has proposed to transfer an amount of Rs. 1,00,00,000/- to the General Reserves. An amount of Rs.27,65,36,962/- is proposed to be retained in the Statement of Profit and Loss 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, 2009 declared on 21st August, 2009 is due for remittance on 25th September, 2016 to Investor Education and Protection Fund established by the Central Government. 4. SHARE CAPITAL The Paid-up Equity Share Capital as on 31st March, 2016 is Rs.92,21,330/- comprises 922133 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.13,796 lakhs for the year ended 31st March, 2016 as compared to Rs.15,960 lakhs for the previous year- a drop of 14%. The decline is attributed to factors namely; the sales of OTS cans were badly affected due to poor mango season, the decline in demand by GCMMF Limited due to unfavourable domestic as well as international market conditions. As a results of the above, the Company Could only achieved a sales turnover of Rs.12,234 lakhs of metal cans and its components as compared to Rs.14,661 lakhs in the previous year - substantial reduction of 17%.The Company has executed export orders worth Rs.621 lakhs of metal cans and its components during the year under review as compared to Rs.901 lakhs in the previous year-a drop of 31% 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 political conditions prevailing there. The Sugar Cone Division has achieved a sales turnover of Rs.1,562 lakhs as compared to Rs.1,300 lakhs in the previous year - a growth of 20%.This increase in sales turnover of Sugar Cone is due to expansion of production capacity and increase in over all ice-cream demand. Our Company was carrying out its manufacturing operations of Anand unit at the premises which were taken on rental basis from Kaira Dist. Co-operative Milk Producers' Union Limited. As Kaira Dist. Co-operative Milk Producers' Union Limited required the premises for its own expansion, company has handed over Anand unit premises to Kaira Dist. Co-operative Milk Producers' Union Limited on 15th February, 2016. The Company has transferred and installed all the machinery at Kanjari factory. The Directors express their appreciation for the support and co-operation extended by Kaira Dist. Co-operative Milk Producers' Union Limited, since the inception of Anand unit. The Company is hopeful of better performance during the current year. 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 proccessing 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. 695 lakhs (b) Total Foreign Exchange Used. Import of tinplate (main raw material), Stores & Spares, Capital Goods etc. Rs. 5,261 lakhs 7. FINANCIAL AND ACCOUNT STATEMENTS Your Company prepares its financial statements in compliance with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect 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 31st March, 2016. There is no audit qualification in the financial statements by the statutory auditors for the year under review. 8. RATING The Company has been assigned by CRISL Limited 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 Return: 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 2015-16. 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 Dierctor, Executive Director & CFO and GM (Finance and Accounts) of the Company attend the meetings on invitation. The Company Secretary is the Secretary of the Committee. 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 the 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 a 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 their 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 a whistleblower 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 - 9001-2008 certification, which is internationally recognised for the production, quality control and other qualities. The scope of the 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. During the year under review The Company has appointed Shri.Laxman D. Vaidya as an Independent Director at the 52nd Annual General Meeting. Shri. Laxman D. Vaidya has more than 15 years rich experience in the field of finance. In accordance with the provisions of the Companies Act, 2013 and the Companies Articles of Association, Shri. Utsav R. Kapadia and Shri Nanak G Sheth, retire by rotation and being eligible offer themselves for re-election. The Board have further re-appointed Shri Ashok B Kulkarni as the Managing Director and Shri K Jagannathan as the Executive Director of the Company for a period of three years with effect from 1st July, 2016. At the ensuing Annual General Meeting, the requisite Resolutions for the said appointments are being placed before the members for their approval. 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 Independent Director under the provisions of 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. EVALUTION OF THE BOARD'S PERFORMANCE In compliance with the Companies Act, 2013, and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. 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 of 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 21. PARTICULARS OF THE MANAGERIAL REMUNERATION The information required pursuant to Section 197 read with Rule 5 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. 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 The Auditors M/s. Kalyaniwalla and Mistry, Chartered Accountants, who are statutory auditors of the Company hold office upto the ensuing Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Kalyaniwalla and Mistry that their appointment, if made, would be in conformity with the limits specified in the said Section. 24. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed Messrs V. Sundaram & Co., a firm of Company Secretaries in Practice (C.P.No.3373) 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 the 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 2016-17 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: I. Operations : This head includes risk elements such as non-availability of labour, labour unrest, no 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. II. Raw Materials : This head covers cost of raw materials, non-availability of raw materials, etc. III. Financial : This head covers risk elements such as dwindling financial ratios, foreign exchange fluctuations, drop in credit rating, investor relations, fraud, inadequate insurance, etc. IV. 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 As per the Companies Act, 2013, your Company is not falling under eligible company for accepting deposits from the public. Accordingly, the Company has discontinued its Fixed Deposit Scheme since 31st March, 2014. However, the Company is eligible to accept fixed deposits within the prescribed limits from the members. The Company has been 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 In accordance with the provisions of Section 134(3)(C), the Board confirm and submit the Directors' Responsibility Statement :- a) in the preparation of the annual accounts, for the year ended March 31, 2016, 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; e) the Directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and 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. 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 there under, 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 Company has identified initiative to promote Education for poor and needy students by joining hands with Jay Pasavnath Education Trust which runs Kalikund Elementry English School in Dholka, near Kanjari in Gujarat, and Annandale Education Society which runs Anandalaya School in Anand, Gujarat. The Company has also identified initiative to promote preventive health care by joining hands with Charutar Arogya Mandal, which runs Shree Krishna Hospital in Karamsad, Gujarat for advance treatment for Cancer and Cardiac of poor and needy patients.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. 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 improved lighting to achieve reduction in power consumption. The expansion and modernisation programme undertaken by the Company at its Kanjari Plant and Vithal Udyog Nagar Unit, Kheda District has been completed in time. 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 over all 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 CAUTIONARY STATEMENT Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices,changes in Government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations. 38. ACKNOWLEDGEMENT Your Directors express their appreciation for the assistance and co-operation received from the Gujarat Cooperative 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 UTSAV R. KAPADIA DIRECTOR (DIN:00034154) ASHOK B. KULKARNI MANAGING DIRECTOR (DIN: 1605886) Dated : 27th May, 2016 Place : Mumbai |