DIRECTORS' REPORT TO THE MEMBERS, Your Directors have pleasure in submitting the 44th Annual Report together with Audited Accounts for the year ended 31st March, 2015. REVIEW OF OPERATIONS: During the year under review, your Company has achieved yet another milestone by crossing a record turnover of about Rs. 250 Crores. It is a matter of great satisfaction that your Company has continued to grow steadily. The inroads made into North America have started to become steady business. Your Company continues to lay emphasis on value added products and is creating the infrastructure towards that goal. During the year your Company successfully installed the region's first Roof Top Solar Plant and has shown a bold initiative towards renewable energy. Margins came under pressure during the later part of the year due to the drastic fall in value of the Euro. Accordingly, the bottom line of your Company has increased by only 5% and reached to Rs. 11.45 Crores as against Rs. 10.87 Crores in the earlier year. The trading activities as Del Credere Associate Cum Consignment Stockist of Indian Oil Corporation Limited (IOCL) have stabilized and is showing improved performance. CREDIT RATING ON CREDIT FACILITIES FROM BANK: Your Company's financial discipline and prudence is reflected in the Credit Rating affimed by the CRISIL as under: Long Term Rating : CRISIL BBB/Stable Short Term Rating : CRISIL A3+ DIVIDEND: Your Directors have recommended a dividend @ 12% (i.e. Rs. 1.20) per Equity Share for the financial year 2014-15. Dividend on Preference Shares is being recommended @ 12% according to the terms of their issue. PROSPECTS: Your Company continues to expand its manufacturing facilities. Technological upgradation in its plant and machinery is an ongoing process which will further improve the performance of your Company. The management continues to lay emphasis on exports of value added products and expanding the export market is your Company's priority. The third Multifilament Yarn Plant has stabilized and the product has been established in the market. The management is exploring new avenues in this segment. The outlook for the current financial year looks robust and positive. The withdrawal of Focus Product Scheme on our products in the newly announced export import policy will have only a marginal impact on the profitability of your Company due to the steps taken by the management to increase the value realization. The current year will also show increased volumes due to which the profitability is likely to improve. DEPOSITS: Your Company has taken Deposits from Corporates, Directors, Promoters and their relatives. The outstanding balance of which is Rs. 333.49 Lacs (including interest accrued thereon) as on 31/03/2015. In view of Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 all the deposits held by the Company are exempted deposits. DIRECTORS: Shri Shashank Agarwal, Director is retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. In view of the valuable guidance and support received from him, your Directors recommend his re-appointment. Dr. G. N. Mathur has vacated his office of Director w.e.f. 04/02/2015 as he could not attend the meetings of the Board for a period of 12 months. The Board acknowledges his valuable contribution and guidance during his tenure. Dr. R. G. Bagla was appointed as Additional Director (Independent) w.e.f. 25/05/2015 and being eligible offer himself to be appointed as Director in ensuing Annual General Meeting. During the year your Company has conducted 06 meetings of the Board of Directors. The details of the meeting and attendance therein are given under Corporate Governance Report. DECLARATION OF INDEPENDENT DIRECTORS The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. CORPORATE GOVERNANCE: Pursuant to Clause 49 of the Listing Agreement, Report on Corporate Governance and Management Discussion & Analysis Report are annexed to the Annual Report as Annexure 'A' which forms part of this Report. The Auditors' Certificate certifying that the Company has complied with the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement is attached and forms the part of this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2014-15 are annexed as Annexure 'B' which forms part of this Report. PARTICULARS OF EMPLOYEES: The information required under Section 197(12) of the Companies Act, 1956 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure 'C' which forms part of this Report. No employee of the Company covered under any of the clauses of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration ) Rules, 2014 are furnished in Annexure 'D' and is attached to this Report. LISTING: The Equity Shares of Company continue to be listed at Bombay Stock Exchange. We confirm that the Annual Listing Fees for the financial year 2015-16 has been paid. AUDITORS: I. STATUTORY AUDITORS M/s Pandey & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of 3 years in the Annual General Meeting held on 10/09/2014. Their continuance of appointment is placed for ratification at the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. There was no qualification, reservation or adverse remark made by the Auditors in their respective report. II. COST AUDITORS In view of the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable on your Company. III. SECRETARIAL AUDITORS The Company has appointed M/s Adesh Tandon & Associates, Practicing Company Secretaries as the Secretarial Auditors of your Company for the year 2014-15. There was no qualification, reservation or adverse remark made by the Auditor in their respective report. The Secretarial Audit Report, as placed by the Auditor is annexed with this Report as Annexure 'E'. IV. INTERNAL AUDITORS: The Company has appointed M/s Kapoor & Tandon, Chartered Accountants as the Internal Auditors of the Company for the year 2014-15. Their report is placed before the Audit Committee of the Company from time to time. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate system of internal control with reference to the financial statements. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by your Company. Company ensure proper and adequate systems and procedures commensurate with its size and nature of its business. CORPORATE SOCIAL RESPONSIBILITY In terms of Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 the Board of Directors of your Company has constituted a CSR Committee the details of which are given in Corporate Governance Report. CSR Committee of the Board has developed a CSR Policy which is enclosed and forms part of this report as Annexure -'F'. Annual report on CSR as required under rule 8(1) of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed with this report as Annexure 'G'. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Your Company has not made any loan or given any Guarantees or made any investment under Section 186 of the Companies Act, 2013. VIGIL MECHANISM (WHISTLE BLOWER POLICY) In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 and revised Clause 49 of the Listing Agreement, a Vigil Mechanism for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company. RISK MANAGEMENT The Company follows the risk management policy wherein the management keeps an eagle eye view on the markets, both domestic and foreign, related to the products, the Company manufactures and the raw materials required. The management also monitors the socio-economic changes worldwide and the changes in the currency parameters viz-a-viz indian market and foreign markets inter-se, currency and socio economic parameters. The Board members are regularly informed about the potential risks, their assessment and minimization procedures. The Board frames a plan for elimination / minimization of the risk and further lays out the steps for implementing and monitoring of the risk management plan. There are no risks which in the opinion of the Board are of the nature that can threaten the existence of the Company. However, the risks inter-se that are generally dealt in regular course of business and have to be taken care of are fluctuations in foreign exchange rates and raw material prices. MATERIAL CHANGES AND COMMITMENTS : No material changes or commitments which may affect the financial position of the Company has been occurred between the end of the financial year of the Company and the date of this report. BOARD EVALUATION: The Board annually evaluate its performance as well as the performances of its Committees and of Directors individually. For evaluating the performance of the Board as a whole, the Board reviews the periodical performances of the Company and the role of the Board towards achievement of the said performances and the future plans as set out from time to time. The performance of the Whole Time Directors is evaluated by the Board by linking it directly with their devotion towards implementation and management of the growth parameters of the Company and the actual achievements of the Company. The performance of the Non Executive / Independent Directors is evaluated on the basis of their contribution for adopting better corporate governance practices, transparency and disclosures in achieving the goal of the Company. The performance of the various Committees of the Board is reviewed on the basis of the achievement of the work designated to the specific committee. RELATED PARTY TRANSACTIONS: During the year no contract or arrangement was entered by the Company in terms of the provisions of Section 188(1) of the Companies Act, 2013. Form AOC-2 detailing the related party transactions is annexed herewith as Annexure 'H'. The policy to deal with the related party transactions is uploaded on the company's website. The weblink of the same is http://kanplas.com/wp-content/uploads/Policy-on-Related-Party-Transactions.pdf. COMPANY S' POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION: The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. The Company has duly constituted the Nomination and Remuneration Committee of the Board and the committee interalia periodically evaluates: 1. The need for change in composition and size of the Board; 2. Recommend/review remuneration of the Managing Director(s) and Whole-time Director(s) based on their performance. 3. Recommend the policy for remuneration of Directors, KMPs & other senior level employees of the Company and review the same in accordance with the performance of the Company and industry trend. The Remuneration Policy is annexed herewith as Annexure 'I' which forms part of this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE. There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:- i) in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures; ii) 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 or loss of the Company for that period; iii) 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; iv) the Directors had prepared the Annual Accounts of the Company on a going concern basis. v) 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. vi) 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. ACKNOWLEDGEMENT: Your Directors express their sincere gratitude for overwhelming cooperation and assistance received from State Bank of India, other Government Agencies and esteemed customers for their continued patronage and support during the year. Your Directors also place on record their appreciation for the contribution made by all the Officers, Staff and Workmen. The consistent growth of your Company was made possible by their hard work, cooperation and support. Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the company. For and on behalf of the Board SHASHANK AGARWAL Director (Technical) MANOJ AGARWAL Managing Director Place : Kanpur Date : 25th May, 2015 |