TO THE MEMBERS OF ARCHIDPLY INDUSTRIES LIMITED
Your Directors are pleased to present the Twenty First Annual Report together with theAudited Statement of Accounts for the year ended 31st March 2016.
The financial results of the Company during the year under review are summarized asunder:
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Net sales ||27841.50 ||26012.39 |
|Depreciation & Amortization Expenses ||475.14 ||491.91 |
|Finance Costs ||920.44 ||1109.15 |
|Profit before tax ||716.00 ||630.46 |
|Taxation ||114.67 ||74.84 |
|Profit after tax ||601.33 ||555.62 |
The company proposes to transfer an amount of ' 601.33 lakhs to the General Reserve.
The highlights of the Company standalone performance are as under:
The Net Sales During the year under review Increased by 7.03% from Rs. 26012.39lakhs in the previous year to 27841.50 lakhs.
The Profit Before Tax (PBT) increased by 13.56% from Rs. 630.46 lakhs in theprevious year to Rs. 716.00 lakhs.
Profit after tax (PAT) increased by 8.22% from Rs. 555.62 lakhs in the previousyear to Rs. 601.33 lakhs.
The Board regret its inability to recommend any dividend as it is considered prudentconserve the resources for investments in the business.
ODI IN MYANMAR
The Company along with its associate companies/entities invested in the newmanufacturing unit for the Company to be set up by the name Wartayar Veneer IndustriesPrivate Limited" for Manufacturing of Commercial Face Veneer Core Veneer SawnTimber Teak Veneer & Plywood in the Republic of the Union of Myanmar with a 19%investment in the shares of the Company by the Archidply Industries Limited and 81%investment in the shares of the Company by the associate companies & entities. TheWartayar Veneer Industries Private Limited has started its first phase of commercialproduction of manufacturing of face veneer and core veneer in the month of March 2016.
The paid up equity capital as on March 31 2016 was ' 2206.50 Lakhs. The Company hasnot issued shares with differential voting rights nor granted stock options nor sweatequity during the year.
Cash and cash equivalents as at March 312016 was ' 804.30 lakhs. The company continuesto focus on judicious management of its working capital Receivables inventories andother working capital parameters were kept under strict check through continuousmonitoring.
Brickwork Ratings India Pvt Limited has reaffirmed the Company's rating to BBB (outlookstable) for long term Bank loan facilities.
During the financial year under review the company did not accept any deposits coveredunder chapter V of the Companies Act 2013 and Section 73 of the Companies Act 2013 andthe Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
There were no Loans Guarantees and Investments covered under Section 186 of theCompanies Act 2013.
The details of the investments made by company is given in the notes to the financialstatements.
MATERIAL CHANGES AND COMMITMENTS
There is no material changes and commitments affecting our financial position betweenthe end of the financial year to which this financial statement relate and date of thisreport.
Significant and material orders passed by the regulators / courts / tribunals impactingthe going concern status and the Company's operations in future:
As such there is no significant and material order by the regulator/ court/tribunalsimpacting the going concern status and the Company's operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company had laid down guidelines policies procedures and structure to enableimplementation of appropriate internal financial controls across the company. Thesecontrol processes enable and ensure the orderly and efficient conduct of company'sbusiness including safeguarding of assets prevention and detection of frauds and errorsthe accuracy and completeness of the accounting records and timely preparation &disclosure of financial statements. Review and control mechanisms are built in to ensurethat such control systems are adequate and operating effectively. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & Managing Director.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
The enduring success of any business is influenced by the quality of its engagementwith its employees customers shareholders regulators the environment and the societyat large. Forwardlooking organizations define their personality through theircontributions to the community.
As part of its initiatives under "corporate social responsibility" (CSR) thecompany has contributed funds for the schemes of school infrastructure development andeducation.
Details about the CSR policy is available on our website http:// www.archidply.com/.
The annual report on our CSR activities is appended as Annexure A to the Board'sreport.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as prescribed under section 134 (3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 relating to conservation of energytechnology absorption foreign exchange earnings and outgo are annexed hereto and forms anintegral part of this report.
During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.
Mr. Deen Dayal Daga Chairman of the Company retires at this AGM beings eligible forreappointment offers himself for the appointment at the AGM.
A brief resume of the Director being re-appointed is attached to the Notice for theensuing Annual General meeting.
None of the Directors of your Company is disqualified as per provisions of Section164(2) of the Companies Act 2013. The Directors of the Company have made necessarydisclosures as required under various provisions of the Companies Act 2013.
All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and as per therequirement of SEBI (LODR) Regulation 2015.
CORPORATE GOVERNANCE REPORT:
The Company is committed to observe good corporate governance practices. The report onCorporate Governance for the financial year ended March 31 2016 as per regulation 34(3)read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 forms a part of this Annual Report. The requisite Certificate from theStatutory Auditors of the Company confirming compliance with the conditions of CorporateGovernance is annexed to this Report.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the formal annual evaluation was carried outfor the Board's own performance its committee & Individual directors.
The Independent Directors meeting to review the performance of the non-IndependentDirectors and Board as a whole was held on 11.02.2016.
The manner and detail in which evaluation was carried out is stated in the CorporateGovernance Report which is annexed and forms a part of this report.
During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings was within the period prescribed under the Companies Act 2013.
A calendar of Meetings is prepared and circulated in advance to the Directors.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls established and maintained by theCompany reviews performed by Management in concurrence with the Audit Committee is ofthe opinion that the Company's internal financial controls were adequate and effective ason 31 March 2016.
In Compliance with section 134(5) of the Companies Act 2013 the Board of Directors tothe best of their knowledge and hereby confirm the following:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.
(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period.
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large.
The Company does not have any subsidiary company.
CODE OF CONDUCT:
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
The Code of conduct has been posted on the Company website www.archidply.com.
WHISTLE BLOWER POLICY:
The Company had implemented a vigil mechanism whereby employees directors and otherstakeholders can report matters such as generic grievances corruption misconduct fraudmisappropriation of assets and non-compliance of code of conduct to the Company. Thepolicy safeguards the whistle blowers to report concerns or grievances and also provides adirect access to the Chairman of the Audit Committee. During the year under review none ofthe personnel has been denied access to the Chairman of Audit Committee. The Company has avigil mechanism named Whistle Blower Policy to deal with instance of fraud andmismanagement if any. The Committee reports to the Board. The Policy on vigil mechanismand whistle blower policy may be accessed on the Company's websitehttp://www.archidply. com.
STATUTORY AUDITOR'S REPORT/ SECRETARIAL AUDITOR'S REPORT:
The observation made in the Auditor Report read together with relevant notes thereonare self-explanatory and hence do not call for any further comments under Section 134 ofthe Companies Act
Section 204 of the Companies Act 2013 read with rules made thereunder inter-aliarequires every listed company to annex with its Board report a Secretarial Audit Reportgiven by a Company Secretary in Practice in the Form MR-3.
The Board of Directors has appointed Mr. Deepak Sadhu Practicing Company Secretariesas Secretarial Auditor to conduct the Secretarial Audit of the Company for the FinancialYear 2015-16. The report did not contain any qualification reservation or adverse remark.The Secretarial Audit Report of the Company for the Financial Year 2015-16 is annexed tothis Report as Annexure D.
The Auditors M/s GRV & PK Chartered Accountants Bengaluru ratification to be theensuing Annual General Meeting and being eligible offer themselves for re-appointment.
EXTRACT OF ANNUAL RETURN:
An extract of the Annual Return in Form MGT-9 in compliance with Section 92 of theCompanies Act 2013 read with applicable Rules made thereunder is annexed to this Report asAnnexure E.
BUSINESS RISK MANAGEMENT:
The Company had put in place an enterprise wide risk management framework. Thisholistic approach provides the assurance that to the best of its capabilities theCompany identifies assesses and mitigates risks that could materially impact itsperformance in achieving the stated objectives. The Audit committee ensures that theCompany is taking appropriate measures to achieve prudent balance between risk and rewardin both ongoing and new business activities. The Committee reviews strategic decisions ofthe Company and on regular basis reviews the Company's portfolio of risks and considersit against the Company Risk Appetite. The Committee also recommends changes to the RiskManagement Technique and / or associated frameworks processes and practices of theCompany. A Risk Management Policy is available on our website http://www.archidply.com.
PARTICULARS OF EMPLOYEES:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. Particulars of employees remunerationas required under section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules
2014 forms a part of this report.
Considering first proviso to Section 136(1) of the Companies Act 2013 the AnnualReport excluding the said information was sent to the members of the Company and othersentitled thereto. The said information is available for inspection at the registeredoffice of the Company during working hours up to the date of ensuing annual generalmeeting. Any member interested in obtaining such information may write to the CompanySecretary in this regard.
PREVENTION OF SEXUAL HARRASSMENT:
In terms of the provisions of the Sexual Harassment of women at workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under the Company has laid downthe policy for prevention and redressal of complaints of sexual harassment at workplace.There was no complaint related to sexual / harassment during the year 2016.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS:
The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexures together with theCertificate from the auditors of the Company regarding compliance with the requirements ofCorporate Governance .
AUDIT COMMITTEE /STAKEHOLDER RELATIONSHIP COMMITTEE /NOMINATION AND REMUNERATIONCOMMITTEE /CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Board of Directors has constituted four Committees i.e audit committee stakeholderrelationship committee nomination and remuneration committee corporate socialresponsibility committee as per requirement of Corporate Governance under SEBI(LODR)Regulation 2015. The majority of the members of these committees are Independent andnon-executives.
The Equity shares of the Company are listed with Bombay Stock Exchange Ltd. (BSE) &National Stock exchange of India Limited (NSE). The annual listing fee for the year2016-17 was paid within the scheduled time to BSE & NSE.
The Board appreciates the commitment and dedication of its employees across all thelevels who have contributed to the growth and sustained success of the Company. We wouldlike to thank all our clients vendors bankers and other business associates for theircontinued support and encouragement during the year.
| ||For and on behalf of the Board of Directors || |
|Place : Bengaluru ||Shyam Daga ||Rajiv Daga |
|Date : 30th May 2016 ||(Managing Director) ||(Joint Managing Director) |