Your Directors are pleased to present the Twenty-Fifth Annual Report on the businessand operation of the Company together with the audited financial statements for the yearended March 31 2017.
1. Financial Performance of the Company
(Rs. In Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Gross Revenue ||8082.32 ||6881.44 ||10470.65 ||7478.08 |
|Net Revenue ||7291.36 ||6218.97 ||9794.63 ||6919.55 |
|EBIDTA ||1186.35 ||1039.23 ||1489.71 ||1099.23 |
|Finance Cost ||358.39 ||305.30 ||418.64 ||310.75 |
|Depreciation ||258.61 ||236.14 ||318.50 ||238.26 |
|Net Profit before Tax ||569.35 ||497.79 ||752.57 ||550.23 |
|Provision for Tax ||195.99 ||172.34 ||256.46 ||188.70 |
|Net Profit after Tax ||373.36 ||325.44 ||495.51 ||361.17 |
|EPS (Rs.) ||3.53 ||3.18 ||4.68 ||3.52 |
2. Brief description of the Companys working during the year/State ofCompanys affair
Your Company reported a top-line growth of 17.45% over the previous year. At standalonelevel the gross revenue from operations stood at Rs. 8082.32 Lakhs compared with Rs.6881.44 Lakhs in the Previous Year. The operating profit before tax stood at Rs. 569.35Lakhs as against Rs. 497.79 in the Previous Year. The Net Profit for the year stood at Rs.373.36 Lakhs compared to Rs. 325.44 Lakhs reported in the Previous Year.
The Consolidated Gross Revenue from operations for financial year 2016-17 was at Rs.10470.65 Lakhs as against Rs. 7478.08 Lakhs in the Previous Year registering a growth of40.00%. The Consolidated operating profit before tax stood at Rs. 752.57 Lakhs as againstRs. 550.23 in the Previous Year. The Net Profit for the year stood at Rs. 495.51 Lakhscompared to Rs. 361.17 Lakhs reported in the Previous Year.
3. Dividend and Reserves
Your Company has earned adequate profit during the financial year 2016-17. Thedirectors have decided to plough back the profit into the business therefore no dividedis recommend for the financial year ended March 31 2017. The Board proposes to transferbalance of profit to the General Reserve.
4. Share Capital
The authorized and paid up share capital of the company as at March 31 2017 stood atRs. 1250 Lakhs and 1058.02 Lakhs respectively. Your Company has allotted 330150 fullypaid-up equity shares on preferential basis at a face value of Rs. 10/- each in April 2016to the promoters and other public of the company and consequently the number of sharesincreased from 10250000 to 10580150.
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 2017none of the directors of the Company hold instruments convertible into Equity Shares ofthe Company.
5. Board of Directors
In accordance with the provisions of section 149 152 and other applicable provisionsof the Companies Act 2013 one third of the such of Directors as are liable to retire byrotation shall retire every year and if eligible offer themselves for re-appointment atevery AGM. Consequently Mr. Mahendra Karnawat Whole Time Director will retire byrotation at the ensuring Annual General Meeting and being eligible offer himself forreappointment. The Board recommends their reappointment for the consideration of Membersof the Company at the ensuring Annual General Meeting. A brief resume of the Directorproposed to be reappointed is furnished in the 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 year2016-17 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 the KMPs of 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 and the SEBI (Listing Obligationsand 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 Statements in 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 are reasonablypresent the Companys state of affairs profits and cash flows for the year endedMarch 31 2017.
12. Performance of Subsidiary Company
Your Company is having two subsidiaries
a. Polywood Green Building Systems Private Limited:
The Gross Revenue of the Company for financial year 2016-17 stood at Rs. 3324.87 Lakhscompared with Rs. 1532.12 Lakhs in Previous Year. The Profit After Tax for the year stoodat Rs. 60.25 Lakhs as against Rs. 36.09 Lakhs reported in the previous year.
b. Polywood Profiles Pvt. Ltd.: The Gross Revenue of the Company for financialyear 2016-17 stood at Rs. 2060.99 Lakhs. The Profit After Tax for the year stood at Rs.62.50 Lakhs.
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 ANNEXURE E.
13. Awards and Recognitions
During financial year 2016-17 your company has won three awards including
a. Best Employer Award 2015 by the Employers Association of Rajasthan Jaipur inNovember 2016. b. Runner Up of 7th National Award for Innovation in Polymer WasteManagement & Recycling Technology and Green Polymeric Materials & Products byHonorable Cabinet Minister Govt. of India Shri Ananth Kumar (ParliamentaryAffairs/Chemical & fertilizers dept.) at Vigyan Bhawan New Delhi. c. First Prize forthe most innovative product by the Centre for Development of Stones and FICCI.
14. Consolidated Accounts
The consolidated Financial Statements of the Company are prepared in accordance withrelevant Accounting Standards viz. AS-21 AS-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 increased by 40.00% to Rs. 10470.65 Lakhs as compared to Rs.7478.08 Lakhs in the previous year. However net profit after tax and after minorityinterest has grown by 37.20% to Rs. 495.51 Lakhs as compared to Rs. 361.17 Lakhs in theprevious year.
(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 22nd Annual General Meeting of the Company held on August 14 2014 needs ratificationby the members of the Company for the financial year 2017-18.
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 Companies Act 2013 and that theyare not disqualified for such appointment within the meaning of Section 141 of theCompanies Act 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 terms of Section 204 of Companies Act 2013 and rules made there under the Companyhas appointed M/s M Sancheti & Associates a firm of Company Secretaries in Practice(C.P. No. 8997) to undertake the Secretarial Audit of the Company. The Secretarial AuditReport submitted by them in the prescribed form MR-3 is enclosed as ANNEXURE Band forms part of this report. No adverse comment has been made in the said report by thePracticing Company Secretary. The report is self-explanatory and do not call for anyfurther 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 company needs not required to appoint cost auditor for thefinancial year 2016-17.
16. Internal Audit and Controls
Your Company has appointed M/s R Rawat & Associates as its Internal Auditor. Duringthe year the Company continued to implement their suggestions and recommendations toimprove the control environment. Their scope of work includes review of processes forsafeguarding the assets of the Company review of operational efficiency effectiveness ofsystems and processes and assessing the internal control strengths in all areas. InternalAuditors findings are discussed with the process owners and suitable corrective actionstaken as per the directions of Audit Committee on an ongoing basis to improve efficiencyin operations.
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 beenestablished. 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 downwards the 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 Company Dependency ondebt is very minimum and we have surplus funds with Banks to settle the entire debt incase the need arises.
(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 thebest HR practices across the industry and carrying out necessary improvements to attractand retain the best talent. By putting in place production incentives on time bound basisand evaluating the performance at each stage of work. Also recruitment is across almostall states of India which helps to mitigate this risk and we do not anticipate any majorissue for the coming years.
(d) Competition Risk
Your Company is always exposed to competition Risk particularly 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 can attract penal provisions. Your Company regularly monitoring and reviewof changes in regulatory framework. However by monitoring of compliance through legalcompliance Management tools.
(f) Industrial Safety Employee Health and Safety Risk The Plastic industry islabor intensive and are exposed to accidents health and injury risk due to machinerybreakdown etc. By development and implementation of critical safety standards across thevarious departments of the factory establishing training need identification at eachlevel 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 Annual Return in MGT9 as a part of this Annual Report as ANNEXURE 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
The Stock Exchange (BSE Ltd.) has granted the approval to migrate the Company from BSESME Platform to BSE Main Board on April 25 2017 and w.e.f April 27 2017 the EquityShares of the Company are dealing on the Mainboard Platform.
The Company has allotted 244095 Equity Shares of Rs. 10/- each to Promoters againsttheir shareholding in M/s Dynasty Modular Furnitures Pvt. Ltd. with the ultimate purposeof converting it as the WOS (Wholly Owned Subsidiary) of the Company.
Apart from above Management does not perceive any material changes occurred subsequentto the close of the financial year as on March 31 2017 before the date of report datedAugust 14 2017 affecting financial position of the Company in any substantial manner.
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 whereverapplicable.
24. Particulars of contracts 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- 2 in terms of section 134 of the Companies Act 2013 is notrequired.
Related party transactions have been disclosed under the Note 35 of significantaccounting policies and notes forming part of the financial statements in accordance withAccounting Standard 18. A statement in summary form of transactions withrelated parties in the ordinary course of business and on arms 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 with Stock Exchanges
The Equity shares of the Company were listed on the Bombay Stock Exchange SME Platform(BSE) which has migrated to the Main Board of BSE Limited effective from April 27 2017therefore currently the Equity Shares of the Company are listed on BSE Ltd. Main Board.
26. Corporate Governance
As per Regulation 34(3) read with 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 thecompany being 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 requires conduct of operations in such a manner so as toensure of all concerned compliances environmental regulations and preservation ofnatural resources. In the last 24 years Polywood has been an undeniable partof the 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 set upan Internal Complaints Committee to look into complaints relating to sexual harassment atwork place of any women employee.
The Company has been employing about 12 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 2016-17 your company has not received any complaint of harassment and henceno compliant is outstanding as on March 31 2017 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 year2016-17.
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 ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts on a going concern basis; and
(v) that the 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 Report as 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) of the 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 C an 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 2014 none of the employees drawing remuneration in excess of the limits set out inthe said rules are provided hereunder. Further the disclosures pertaining to remunerationand other details as required under section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed in ANNEXURE D an 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 2016-17.
33. Cautionary Statement
Statement in this Managements Discussion and Analysis detailing theCompanys objectives projections estimates expectations or predictions areforward-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 includeglobal and 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. Appreciation and 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 |
| ||Sd/- |
| ||Digvijay Dhabriya |
| ||Chairman & Managing Director |
|Jaipur August 14 2017 ||DIN: 00519946 |