The Board of Directors present herewith the 25th Annual Report of the Company togetherwith the Audited Accounts for the year ended 31st March 2017. The ManagementDiscussion and Analysis has also been incorporated into this report.
The highlights of financial results of the Company are as follows: -
( Rs. in Lacs )
|Particulars ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
|Operating Revenues / Turnover ||2126 ||3117 |
|Profit before Depreciation & Amortization Finance charges ||122 ||292 |
|Depreciation & Amortization ||31 ||35 |
|Finance Charges ||- ||40 |
|Profit before tax ||91 ||217 |
|Provision for taxation (incl. deferred tax) ||- ||- |
|Profit after tax ||91 ||217 |
HIGHLIGHTS OF PERFORMANCE
- Operating Revenues for the year decreased by around 31.79 % to Rs. 2126 lacsas compared to Rs. 3117 Lacs in 2016-17
- Profit after tax for the year decreased by around 58.06 % to Rs. 91 lacs as comparedto Rs. 217 lacs in 2016-17. DIVIDEND
In view of the accumulated losses your Directors regret their inability to recommendany dividend for the financial year under review.
During the year under review no amount was transferred to General Reserve.
The paid up Equity Share Capital as at March 312017 stood at Rs.124985500. Duringthe year under review the Company has not issued shares with differential voting rightsnor has granted any stock options as sweat equity. As on March 31 2017 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The main thrust of internal audit is to test and review controlsappraisal of risks and business processes besides benchmarking controls with bestpractices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a Management Information System which is an integral part of thecontrol mechanism.
The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit play a key role in providing assurance to the Board of Directors. Significantaudit observations and corrective actions taken by the management are presented to theAudit Committee of the Board. To maintain its objectivity and independence the internalAudit function reports to the Chairman of the Audit Committee.
FINANCE AND ACCOUNTS
Your Company prepares its financial statements in compliances 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 and reasonablypresent the Company's state of affairs profits and Cash Flows for the year ended 31stMarch 2017.
LOANS GUARANTEES & 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.
The Company has not accepted any deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 or under Chapter V of the Act.
RELATED PARTY TRANSACTIONS
All the Related Party Transactions entered by the Company are on arm's length basis andin the ordinary course of business. All the Related Party Transactions as required underAS-18 are reported in the Notes to the financial statements.
In accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has formulated the Related Party Transactionspolicy and the same is uploaded on Company's website at the link : http://www.mplindia.in/category_img/pr_63.pdf
WHISTLE BLOWER POLICY.
The Company has a vigil mechanism to deal with instance of fraud and mismanagement ifany. It ensures that strict confidentiality is maintained whilst dealing with concerns andalso no discrimination will be meted out to any person for a genuinely raised concern. Anysuspected or confirmed incident of fraud / misconduct can be reported thereof.
The Whistle Blower Policy has been posted on website of the Company -http://www.mplindia.in/category_img/pr_64.pdf
RISK MANAGEMENT POLICY
There is a continuous process for identifying evaluating and managing significantrisks faced through a risk management process designed to identify the key risks facingbusiness. During the year a risk analysis and assessment was conducted and no major riskswere noticed.
PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration and other Committees. The same is found to be satisfactory.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS': -
At the time of appointing a Director a formal letter of appointment is given to himwhich inter alia explains the role function duties and responsibilities expected of himas a Director of the Company. The Director is also explained in detail the Compliancerequired from him under the Companies Act 2013 Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and other relevantregulations and affirmation taken with respect to the same.
The Chairman and Whole Time Director also has one to one discussion with the newlyappointed Director to familiarize him with the Company's operations. Further the Companyhas put in place a system to familiarize the Independent Directors about the Company itsproducts business and the on-going events relating to the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Shri Bansilal I. Vaghani and Shri Madhup B. Vaghani Directorsof the Company retires by rotation at the ensuing Annual General Meeting of the Companyand being eligible offers themselves for re-appointment.
The Shareholders are also requested to reappoint Mr. Viren Bhimani and Mr.Devendra Negias Independent Directors of the Company as mentioned in item no. 5 and 6 of notice ofAnnual General Meeting for their second term to act as Independent Directors.
The following are the Key Managerial Personnel of the Company:
|Shri Madhup B. Vaghani ||: Whole Time Director |
|Shri Pankaj B. Bhaya ||: Chief Financial Officer |
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
Appointment Letters' of Independent Directors and FamiliarizationProgramme' process to provide insights of the Company to Independent Directors are hostedon website of the Company - http://www.mplindia.in/category_img/pr_123.pdf andhttp://www.mplindia.in/category_img/pr_61.pdf respectively.
During the year under review the Company has conducted five Board Meetings on thefollowing dates: 30th May 2016 11th August 2016 11th November2016 7th February 2017 and 28th March 2017. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013.
Pursuant to the provisions of Section 139 of the Companies Act 2013and Rules madethere under the term of office of Messers Mehta Chokshi and Shah Chartered Accountants asthe Statutory Auditors of the Company will conclude from the close of ensuing AnnualGeneral Meeting of the Company. The Board of Directors places on record its appreciationto the services rendered by Messers Mehta Chokshi and Shah Chartered Accountants as theStatutory Auditors of the Company. Subject to the approval of the Members the Board ofDirectors of the Company has recommended the appointment of Messers Bastawala andAssociates Chartered Accountants (ICAI Firm Registration Number 121789W) as theStatutory Auditors of the Company pursuant to Section 139 of the Companies Act 2013.Accordingly the Board recommends the resolution in relation to appointment of StatutoryAuditors for the approval by the shareholders of the Company. There is no auditqualification for the year under review.
As required under Section 204 of the Companies Act 2013 Secretarial Audit Reportobtained from Mr. Shailesh Kachalia Practising Company Secretary is annexed and formspart of the Board Report.
OBSERVATIONS - AUDITOR & SECRETARIAL AUDITOR
The Board of Directors observations regarding the qualifications contained in theSecretarial Audit Report are as below :
1. Non-appointment of Company Secretary under the Provisions of Section 203 of theCompanies Act 2013 we would like to state that the Company took effective steps toappoint the Company Secretary but considering the status of the Company being BIFRCompany scope of work and non availability of opportunities in the field of variouscorporate laws the Company was not in a position to appoint and retain the services ofCompany Secretary.
However the Board of Directors are making continuous efforts to appoint CompanySecretary as required.
2. Non-appointment of Woman Director as required under the provisions of Section 149 ofthe Companies Act 2013 and Clause 17 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 we would like to state that as the Company is SICKCompany and registered with BIFR we are restricted to make any changes in theconstitution of Board of Directors. Hence in view of the said facts the Company has notappointed Woman Director as required.
3. The Company has appointed Mr. Pankaj B. Bhaya as Compliance Officer who is notqualified Company Secretary. Once the Company gets appointment of qualified CompanySecretary the company will appoint him as Compliance Officer.
There is no audit qualification in financial statements by the statutory auditors forthe year under review.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form No. MGT-9 as provided under sub-section (3) ofSection 92 of the Companies Act 2013 is annexed and forms part of the Board Report.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes having taken place affecting the financial position ofthe Company from the date of closure of financial year till the signing of Accounts.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS.
There are no significant and material orders passed by the Regulations / courts thatwould impact the going concern status of the Company and its future operations.
ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental regulations and preservation ofnatural resources.
DISCLOSURE IN TERMS OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company took all necessary measures to ensure a harassment free workplace and hasinstituted an Internal Complaints Committee for redressal of complaints and to preventsexual harassment. No complaints relating to sexual harassment were received during theyear.
As per Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Report on CorporateGovernance' practices followed by the Company together with a certificate from thePractising Company Secretary confirming compliances forms integral part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134 (3) (c) of the Companies Act 2013:
a. that in the preparation of the annual financial statements for the year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgement and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at 31st March 2017 and of the profit of the Company for theyear ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION
A) Conservation of Energy:-
a) The Company has taken all measures to conserve the Energy by installing latestequipments for conservation of Energy.
b) The cumulative effect of the Energy conservation steps taken by the Company hasconsiderably reduced the consumption of Energy and saved the cost of the Company.
B) Information relating to Technology absorption
1. Research & Development (R & D)
(a) Specific areas in which R & D is carried out by the Company.
New product development New manufacturing process development Product upgradationCost reduction Mould designing and development New application of thermoware productWater Purification System.
(b) Benefits derived as a result of the R & D.
(i) Company is in position to introduce varied new products every year to meet changingconsumer preferences.
The Company is in position to cater to a wider segment of consumer durables andplastics based industrial products.
(c) Future Plan of Action.
(i) Emphasis is being laid on development & marketing of new product and valueaddition to existing range of products for both export as well as domestic market.
(ii) Business Process Re - Engineering.
(d) Expenditure on Research & Development under the head "product Design &Development Expenses" is being accounted under relevant heads of expenses.
2. Technology Absorption Adaptation and Innovation.
(a) Efforts in brief made towards technology absorption adaptation and innovation asenumerated in Clause 1 above.
(b) Benefits derived as a result of the above efforts product up gradation costreduction & new products developments as enumerated in Clause 1 above.
C) FOREIGN EXCHANGE EARNINGS AND OUT GO:
Foreign exchange spent Rs. NIL
Foreign exchange earned Rs. NIL.
CORPORATE SOCIAL RESPONSIBILITY
The Company firmly believes that the industry owes duty of welfare to the society atlarge and it shall pursue the commitment of Social Responsibility and carry out the socialwork directly and/or through other registered welfare organizations.
The Company has no prescribed average net profits networth and turnover as per theprovisions of Section 135 of the Companies Act 2013. The Company has carried forwardlosses and its networth is negative.
However the Company voluntarily constituted Corporate Social Responsibility Committee(CSR) on 10th February 2016 consisting of the following members.
|SHRI BANSILAL I. VAGHANI ||: Member |
|SHRI VIREN BHIMANI ||: Chairman |
|SHRI DEVENDRA NEGI ||: Member |
The terms of reference of Corporate Social Responsibility Committee (CSR) broadlycomprises of following :
(a) Formulate and Recommendation of CSR Policy to the Board indicating the activitiesto be undertaken by the Company as specified in Schedule VII of Companies Act 2013.
(b) Recommend the amount of expenditure to be incurred on the activities referred to inclause(a).
(c) Provide guidance on various CSR activities to be undertaken by the Company and tomonitor its progress.
During the year under review the Committee met once to deliberate on various mattersreferred above. The details of attendance of the members is as below.
|Name of the Director ||Attended |
|SHRI BANSILAL I. VAGHANI ||1 out of 1 |
|SHRI VIREN BHIMANI ||1 out of 1 |
|SHRI DEVENDRA NEGI ||1 out of 1 |
In view of the average net profit turn over net worth of the Company not qualified bythe provisions of the Section 135 of the Companies Act 2013 the Committee did notrecommend the spending any amount towards the CSR activities.
The Audit Committee is headed by Shri Viren Bhimani as Chairman of the committee. ShriDevendra Negi and Shri Bansilal
I. Vaghani as Members. The details of all related party transactions if any areplaced periodically before the Audit Committee. During the year there were no instanceswhere the Board had not accepted the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee comprises of three Directors. Shri Bansilal IVaghani Shri Viren Bhimani and Shri Devendra Negi. Non Executive Independent DirectorShri Viren Bhimani is the Chairman of the Committee. The Composition of Nomination andRemuneration committee is pursuant to the provisions of Section 178 of the Companies Act2013 and Clause 19 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015
Meeting and Attendance
The Nomination and Remuneration Committee met on 11th November 2016. Thenecessary quorum was present. The Chairman of the Nomination and Remuneration Committeewas present at the last Annual General Meeting of the Company.
Terms of Reference :
The Committee shall :
1. Formulate the criteria for determining qualifications positive attributes andindependence of a Director.
2. Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy.
3. Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
DETAILS OF REMUNERATION PAID TO DIRECTORS FOR THE YEAR ENDED MARCH 31 2017
The Company has not paid any remuneration to Whole Time Director.
The Company reimburses the out of pocket expenses incurred by Directors of the Companyafter the review of the same by the Committee members.
The remuneration policy is directed towards rewarding performance based review ofachievements. It is aimed at attracting and retaining high calibre talent.
Refer http://mplindia.in/category_imp/pr_59.pdf regarding Remuneration policy of theCompany.
Particulars of the Company's Remuneration Policy and information required under Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and particulars of remuneration required under Section 197 of the Companies Act 2013 readwith Rules 5(2) of the companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of Directors / Employees of the Company are set out in the annexureforming part of this report.
PARTICULARS OF EMPLOYEES
No employee of the Company is receiving remuneration as per the limits prescribed inSection 197 read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
Company doesn't have any Subsidiaries or Joint Ventures or Associate companies as onthe report date as defined under the Companies Act 2013.
Statements in this report describing the Company's objectives projections estimatesexpectations or predictions may be forward looking statements considering the applicablelaws or regulations. These statements are based on certain assumptions and expectations offuture events. Actual results could however differ materially from those expressed orimplied. Important factors that could make a difference to the Company's operationsinclude global and domestic demand - supply conditions. Finished goods prices rawmaterials cost and availability fluctuations in exchange rates change in Governmentregulations and tax structure within India and the countries with which the Company hasbusiness contacts and other factors such as litigation and industrial relations.
Your Directors would like to express their grateful appreciation for the assistance andco-operation received from all organizations connected with its business during the yearunder review. Your Directors also wish to place on record their deep sense of appreciationfor the committed services of Executives and Staff of the Company. Your Directors are alsodeeply grateful for the confidence and faith shown by the Shareholders of the Company inthem.
| ||BY ORDER OF THE BOARD |
| ||For MPL PLASTICS LIMITED |
| ||B.I.VAGHANI |
| ||CHAIRMAN |
| ||(DIN: 00067088) |