Your Directors have pleasure in presenting their 24thAnnual Report on thebusiness and operation of the Company along with the audited financial statements for thefinancial year ended March 31 2016.
1. Financial Performance of the Company
| || ||(Rs.In Lakhs) |
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Gross Income ||6881.44 ||7264.83 ||7478.08 ||7756.16 |
|EBIDTA ||1039.23 ||953.17 ||1099.24 ||1048.69 |
|Finance Cost ||305.30 ||293.14 ||310.75 ||296.69 |
|Depreciation ||236.14 ||229.84 ||238.26 ||232.51 |
|Net Profit before Tax ||497.79 ||430.19 ||550.23 ||519.49 |
|Provision for Tax ||172.34 ||151.69 ||188.69 ||179.15 |
|Net Profit after Tax ||325.44 ||278.50 ||361.17 ||339.78 |
|EPS (Rs.) ||3.18 ||3.08 ||3.52 ||3.75 |
2. Brief description of the Companys working during the year/State ofCompanys affair
The Company is engaged in the business of Manufacturing and Retailing of PVC & uPVCproducts. There has been no change in the business of the Company during the financialyear ended March 31 2016. Your Company recorded a satisfactory performance despitechallenging second half of the year. Your Company reported a marginal decline of 5.28%over the previous year due to sluggish market demand inspite of having good order book.
At standalone level the gross revenue from operations stood at Rs. 6881.44Lakhscompared with Rs. 7264.83 Lakhs in the Previous Year. The operating profit before taxstood at Rs. 497.79 Lakhs as against Rs. 430.19 in the Previous Year. The Net Profit forthe year stood at Rs. 325.44 Lakhs compared to Rs. 278.50 Lakhs reported in the PreviousYear registering a growth of 16.85% on standalone basis.
The Consolidated Gross Revenue from operations for financial year 2015-16 was at Rs.7478.08 Lakhs as against Rs. 7756.16 Lakhs in the Previous Year registering a slightdecline of 3.59%. The Consolidated operating profit before tax stood at Rs. 550.23 Lakhsas against Rs. 519.49 in the Previous Year. The Net Profitafter minority interestfor theyear stood at Rs. 361.17 Lakhs compared to Rs. 339.78 Lakhs reported in the Previous Year.
3. Dividend and Reserves
Your Company has earned adequate profit during the financial year 2015-16. Thedirectors have decided to plough back the profit into the business therefore no dividedis recommendfor the financial year ended March 31 2016.The Board proposes totransferbalance of profitto the General Reserve.
4. Share Capital
Theauthorized and paid up share capital of the company as at March 31 2016 stood atRs. 1250 Lakhs and 1025 Lakhs respectively.During the year under review your company hasincreased its authorised share capital fromRs.1000 Lakhs toRs.1250 Lakhs.
Your Company has allotted 2050000 fully paid-up bonus equity shares of face value ofRs. 10/-each in October 2015 to the shareholders of the company in proportion of 1:4 andconsequently the number of shares increased from 8200000 to 10250000.
During the year under review the Company has not issued shares with differentialvoting rights nor has granted any stock options or sweat equity. As on March 31 2016none of the directors of the Company hold instruments convertible into Equity Shares ofthe Company
5. Board of Directors
In accordance with the provisions of section149 152 and other applicable provisions ofthe Companies Act 2013one third of the such of
Directors as are liable to retire by rotation shall retire every year and ifeligible offer themselves for re-appointment at every AGM. Consequently Mrs. AnitaDhabriya Whole Time Director will retire by rotation at the ensuring Annual GeneralMeeting and being eligible offerherselffor re-appointment. The Board recommendstheirre-appointment for the consideration of Members of the Company at the ensuring AnnualGeneral Meeting.A brief resume of the Director proposed to be reappointed is furnished inthe notice of the AGM.
During the year under review there is no change in the Board of Directors of theCompany.
6. Number of Meetings of the Board
The details of the number of Meetings of the Board held during the financial year2015-16 forms part of the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
7. Key Managerial Personnel
The following are the Key Managerial Personnel of the Company:
|Sl. No. ||Name of Person ||Designation |
|1. ||Mr. Digvijay Dhabriya ||Chairman & Managing Director |
|2. ||Mrs. Anita Dhabriya ||Whole Time Director |
|3. ||Mr. Mahendra Karnawat ||Whole Time Director |
|4. ||Mr. Shreyansh Dhabriya ||Whole Time Director |
|5. ||Mr. Hitesh Agrawal ||Chief Financial Officer |
|6. ||Mr. Sparsh Jain ||Company Secretary |
During the year under review there is no change in theKMPsof the Company.
8. Committees of the Board
The Board of Directors have the following committees:
1. Audit Committee
2. Nomination and Remuneration/ Compensation Committee
3. Stakeholders/ Investors Grievance Committee
The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
9. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 andthe SEBI (ListingObligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration Compensation andShareholders/Investors Grievance Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
10. Declaration by an Independent Director(s) and re-appointment if any
All Independent Directors have given declarations that they meet the criteria ofindependence as provided in sub-section (6) of Section 149 of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
11. Finance & Accounts
Your Company prepares its Financial Statementsin compliance with the requirements ofthe Companies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India.The Financial Statements have been prepared on historical cost basis. The estimates andjudgments relating to the Financial Statements are made on a prudent basis so as toreflect in a true and fair manner. The form and substance of transactions arereasonablypresent the Companys state of affairs profits and cash flows for the year endedMarch 31 2016.
12. Performance ofSubsidiary Company
Your Company is having one subsidiary namely Polywood Green Building Systems PrivateLimited. The Gross Revenue of the Company for financial year 2015-16 stood atRs.1532.12Lakhs compared with Rs.1925.94Lakhs in Previous Year. The ProfitAfterTaxfor theyear stood at
Rs. 36.09 Lakhs as against Rs. 61.84 Lakhs reported in the previous year.
Pursuant to sub-section (3) of section 129 of the Act the statement containing thesalient feature of the financial statement of a companys subsidiary or subsidiariesis given as ANNEXUREE.
13. Awards and Recognitions
Your Company has received Order of Merit Award 2016 for Saving of Trees by the SkochAchievers Award Committee in March 2016.
14. Consolidated Accounts
The consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS-21AS-23 and AS- 27 issued by the Institute ofChartered Accountants of India. The Audited Consolidated Financial Statements togetherwith Auditors Report thereon forms part of the Annual Report.
The consolidated turnover decreased by 3.59% to Rs. 7478.08 Lakhs as compared to Rs.7756.16 Lakhs in the previous year. However net profit after tax and after minorityinterest has grown by 6.30% to Rs. 361.17 Lakhsas compared to Rs. 339.78 Lakhs in theprevious year.
15. Auditors (a) Statutory Auditor
The Statutory Auditors of the Company M/s. Narendra Sharma & Co. CharteredAccountants(Firm Registration Number: 004983C) have audited the Financial Statements ofthe Company. The Statutory Auditors who were appointed by the members of the Company atthe 22ndAnnual General Meeting of the Company held on August 14 2014 needsratification by the members of the Companyfor thefinancial year 2016-17.
The Company has received consent letter from M/s Narendra Sharma & Co. CharteredAccountants to the effect that their ratification of appointment if made would bewithin the prescribed limits under Section 139 of the CompaniesAct 2013 and that they arenot disqualified for such appointment within the meaning of Section 141 of the CompaniesAct 2013.
The Auditors Report does not contain any qualification. Notes to Accounts andAuditors remarks in their report are self-explanatory and do not call for any furthercomments.
(b) Secretarial Auditor
In termsof Section 204 of Companies Act 2013 and rules made there under the Companyhas appointed M/s M Sancheti & Associates a firm of Company Secretaries inPractice(C.P. No. 8997)toundertake the Secretarial Audit of the Company. The SecretarialAuditReport submitted by them in the prescribed form MR-3is enclosed as ANNEXUREB and forms part of this report. No adverse comment has been made in the saidreport by the Practicing Company Secretary. The report is self-explanatory and do not callfor any further comments.
(c) Cost Auditor
As per the requirement of the Central Government and pursuant to section 148 of theCompanies Act 2013 read with Companies (Cost Records and Audit) Rules 2014 as amendedfrom time to time your company hereby confirms that the provisions of this section is notapplicable hence your companyneeds not required to appoint cost auditor for the financialyear 2015-16.
16. Internal Audit and Controls
YourCompanyhas appointed M/sR Rawat & Associatesas its Internal Auditor. During theyear the Company continued to implement their suggestions and recommendations to improvethe control environment. Their scope of work includes review of processes for safeguardingthe assets of the Company review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. Internal Auditorsfindings are discussed with the process owners and suitable corrective actions taken asper the directions of Audit Committee on an ongoing basis to improve efficiency inoperations.
17. Vigil Mechanism/Whistle Blower Policy
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil
Mechanism for directors and employees to report genuine concerns has been established.The Vigil Mechanism Policy has been uploaded on the website of the Company athttp://www.polywood.org/Dhabriya.pdf
18. Risk Management
In todays economic environment Risk Management is a very important part ofbusiness. The main aim of risk management is to identify monitor and take precautionarymeasures in respect of the events that may pose risks for the business. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee. YourCompany has identified the following risks:
(a) Commodity Price Risk
Risk of price fluctuation on basic raw materials as well as finished goods used in theprocess of manufacturing. Your Company commands excellent business relationship with bothsuppliers and buyers. In case of major fluctuation either upwards or downwardsthe matterwill be mutually discussed and compensated both ways. Also by focusing on new value addedproducts helps in lowering the impact of price fluctuation in finished goods.
(b) Interest Rate Risk
Any increase in interest rate can affect the finance cost. Your Companysdependency on interest bearing debt is reasonably low therefore risk on account of anyunforeseen hike in interest rate is very nominal.
(c) Human Resource Risk
Your Companys ability to deliver value is dependent on its ability to attractretain and nurture talent. Attrition and non-availability of the required talent resourcecan affect the overall performance of the Company.By continuously benchmarking of the bestHR practices across the industry and carrying out necessary improvements to attract andretain the best talent. By putting in place production incentives on time bound basis andevaluating the performance at each stage of work. Also recruitment is across almost allstates of India which helps to mitigate this risk and we do notanticipate any major issuefor the coming years.
(d) Competition Risk
Your Company is exposed to competition risk particularly from China. The increase incompetition can create pressure on margins market share etc. However by continuousefforts to enhance the brand image of the Company by focusing on R&D quality costtimely delivery best customer service and by introducing new product range commensuratewith demands your Company plans to mitigate the risks so involved.
(e) Compliance Risk
Any default canattract penal provisions. Your Company regularly monitors and reviewsthe changes in regulatory framework through various legal compliance management tools toavoid any such compliance related risk.
(f) Industrial Safety Employee Health and Safety Risk
The Plastic industry is labor intensive and are exposed to accidents health and injuryrisk due to machinery breakdown etc.By development and implementation of critical safetystandards across the various departments of the factory establishing training needidentification at each level of employee.
19. Extract of Annual Return
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of AnnualReturn in MGT 9as a part of this Annual ReportasANNEXURE A.
20. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
Management does not perceive any material changes occurred subsequent to the close ofthe financial year as onMarch 31 2016before the date of report dated September 16 2016affecting financial position of the Company in any substantialmanner.
21. Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and companys operations in future
There are no significant and material orders passed by the Regulators/courts that wouldimpact the going concern status of the Company and its future operations.
22. Acceptance of Deposits
The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014.
23. Particulars of loans guarantees or investments
Details of Loan Guarantees and investments covered under the provisions of section 186of the Companies Act 2013 are given in the notes to Financial Statements.
24. Particulars ofcontracts or arrangements with related parties
All transactions entered with the Related Parties during the financial year were in theordinary course of business and on arms length basis and do not attract theprovisions of section 188 of the Companies Act 2013 and rules made there under. Thusdisclosure in form AOC-2in terms of section 134 of the Companies Act 2013is not required.
Related party transactions have been disclosed under the Noteno.35of significantaccounting policies and notes forming part of the financial statements in accordance with"Accounting Standard 18". A statement in summary form of transactions withrelated parties in the ordinary course of business andonarms length basis isperiodically placed before the Audit committee for review and recommendation to the Boardfor their approval.
None of the transactions with related parties were in conflict with the interest of theCompany. All the transactions are in the normal course of business and have no potentialconflict with the interest of the Company at large and are carried out on an armslength basis or fair value.
25. Listing withStock Exchanges
Your Companys shares are listed on the Bombay Stock Exchange SME Platform (BSE).The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The said regulationswere effective on December 01 2015. Accordingly all listed entities were required toenter into the listing agreement within six months from the effective date. Your Companyentered into Listing Agreement with BSE Limited within the stipulated time period given.
26. Corporate Governance
As per Regulation 34(3) readwith schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the CompanysAuditors confirming compliance forms an integral part of this report.
(The Members hereby noted that according to the SEBI (LODR) Regulations 2015 thecompanybeing a SME Listed Company of BSE Ltd is exempted from the compliance ofcorporate governance requirements as provided under regulations 17 to 27 and clauses (b)to (i) of sub-regulation (2) of regulation 46 and para C D and E of Schedule V.)
27. Environment and Safety
The Company is conscious of the importance of environmentally clean and safeoperations. The Company Policy requiresconduct of operations in such a manner so as toensure of all concerned compliances environmental regulations and preservation ofnatural resources. In the last23years "Polywood" has been an undeniable part ofthe "Save Trees" campaign by bringing in the minds of people the use of PVCProfiles which was only confined to European Countries earlier.
In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee.
The Company has been employing aboutseven women employees in various cadres within thefactory premises. Your Company has set up Internal Complaints Committee for implementationof said policy. Complaints received if any are regularly monitored by women linesupervisors who directly report to the Chairman & Managing Director.During thefinancial year 2015-16 your company has not received any complaint of harassment and henceno compliant is outstanding as on March 31 2016 for redressal.
28. Corporate Social Responsibility
The Board of Directors of your company hereby confirms that the provisions of section135(1) of the Companies Act 2013 and Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is not applicable to our company for the financial year2015-16.
29. Directors Responsibility Statement
The Directors Responsibility Statement referred to in clause (c) of sub-section(3) of Section 134 of the Companies Act 2013 shall state that
(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) 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;
(iii)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;
(iv)the directors had prepared the annual accounts on a going concern basis; and
(v) thatthe directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(vi)that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
30. Transfer of Amounts to Investor Education and Protection Fund
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
31. Management Discussion and Analysis Report
The Management Discussion and Analysis Reportas required under regulation 34(3) readwith Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in the separate section forming part of this Annual Report.
32. Statutory Information
As per section 134(3) ofthe Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 the information on conservation of energy technology absorptionand foreign exchange earnings and outgo is annexed in ANNEXURE Can integralpart of this report.
In terms of provisions of section 197(12) of the Companies Act 2013 read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules are provided hereunder.Further the disclosurespertaining to remuneration and other details as requiredundersection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(pointmentAp and Remuneration of Managerial Personnel) Rules
2014is annexed in ANNEXURE Dan integral part of this report.
The Business Responsibility Reporting as required under Regulation 34(2) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is not applicable toyour company for the financial year 2015-16.
|Name ||Mr. Digvijay Dhabriya |
|Age ||51Years |
|Designation ||Chairman & Managing |
| ||Director |
|Remuneration ||Rs. 540000/-Per Month |
|Nature of ||Regular Employment |
|Employment || |
|Qualification ||B.E. (Mechanical) |
|Experience ||27Years |
|Date of ||October 20 1992 |
|commencement || |
|of employment || |
|Particulars of ||Started career with |
|Previous ||Polywood |
|employment || |
|% of Equity ||66.35% |
|Shares held || |
|Relationwith ||Mrs. Anita Dhabriya |
|Director ||(WTD) is wife & Mr. |
| ||Shreyansh Dhabriya |
| ||(WTD) is son of Mr. |
| ||Digvijay Dhabriya |
33. Cautionary Statement
Statement in this Managements Discussion and Analysis detailing theCompanys objectives projections estimates expectations or predictions are"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to the Companys operations includeglobaland Indian demand-supply conditions finished goods prices cyclical demand andpricing in the Companys principal markets changes in Government regulations taxregimes economic developments in India and other factors such as litigation and labornegotiations.
34. Appreciationand Acknowledgments
Your Directors place on record their deep appreciation to employees at all levels fortheir hard work dedication and commitment. The Board places on record its appreciationfor the support and co-operation your company has been receiving from its SuppliersRetailers Dealers & Distributors and other associated with the Company. The Directorsalso take this opportunity to thank all Investors Clients Vendors Banks Government& Regulatory Authorities and Stock Exchange for their continued support.
For & on behalf of the Board
Chairman & Managing Director
Jaipur September16 2016 DIN: 00519946