NATIONAL PLASTIC INDUSTRIES LIMITED
Your Directors present their 30th Annual Report together with the AuditedAccounts of the Company for the year ended 31st March 2017.
| || ||(Rs in Lacs) |
|Particulars ||2016-2017 ||2015-2016 |
|Sales & Other Income ||11217.77 ||11407.64 |
|(Loss) / Gross Profit before Depreciation Interest & Tax ||776.71 ||1022.11 |
|Less : Depreciation ||211.83 ||178.91 |
|Interest ||270.11 ||393.90 |
|(Loss) / Profit for the year ||294.76 ||449.29 |
|Less: Prior Period Adjustment ||- ||12.33 |
|Less : Deferred Tax Liabilities ||188.06 ||239.26 |
|(Loss)/ Net Profit after Tax ||106.70 ||197.70 |
|Add: Balance brought forward from previous year (Adjusted) ||238.68 ||150.85 |
|Balance Available for appropriation ||345.37 ||348.56 |
|Appropriation: || || |
|Proposed Dividend ||91.30 ||91.30 |
|Dividend Tax ||18.59 ||18.59 |
|Transfer to General Reserve ||- ||- |
|Balance c/f to Balance Sheet ||235.49 ||238.68 |
COMPANY'S OPERATIONAL PERFORMANCE
During the financial year ended 31st March 2017 the Total Sales & OtherIncome for the year was at Rs 112.18 Crores as against Rs 114.08 Crores for the year2015-16. Out of this exports were Rs 15.62 Crores as against Rs 23.88 Crores for the year2015-16. Your Company is working on consolidating its strengths in the key markets andexploring avenues to penetrate in the European markets to increase export sales in thecoming years.
Net Sales were Rs 98.06 Crores as against Rs 99.53 Crores in the previous year. Theprofit after tax for the year under review was at Rs 106.70 Lacs.
Due to various initiatives taken by the Company the Interest and Finance cost havedecreased by Rs 123.79 Lacs i.e. from Rs 393.90 Lacs to Rs 270.11 Lacs.
The Company has endeavored to bring out new & unique moulded furniture forimproving the sales of the products.
The Company is taking all necessary steps to reduce wastages and make production costefficient and will surely be able to achieve its targets.
The PVC flooring Mats business in Nellore Andhra Pradesh in the southern part of thecountry under the brand name INSTA has done fairly well during the year 2016-17.
The air-cooler business of the Company was marginal during the year and did notprogress as was expected. However the Company is expecting good growth in this productline in the future.
The Board of Directors of your Company are pleased to recommend a Dividend of '1/- perequity share (10%) of face value of Rs 10/- each (previous year '1/- per share). The totaloutflow on account of Equity Dividend will be Rs 109.89 Lacs (inclusive of tax of Rs 18.59lacs) which is provided in the accounts for the purpose of Dividend. The Dividend payoutis subject to the approval of the shareholders at the ensuing Annual General Meeting ofthe Company.
The Company does not have any Subsidiary Company.
During the year under review there has been no change in the capital structure. Thepaid up Equity Share Capital as on 31st March 2017 was Rs 912.96 lacs.
TRANSFER TO RESERVES
The Company has not appropriated any profits to general reserves for the year 2016-17.
EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extract of the Annual Return as at 31st March 2017 forms partof this report as Annexure 1.
NUMBER OF MEETINGS OF THE BOARD
Regular meetings of the Board are held to discuss and decide on various businesspolicies strategies and other businesses. The Board met four (4) times during the FY2016-17 viz. on 27th May 2016 10th August 2016 9thNovember 2016 and 9th February 2017. The maximum interval between any twomeetings did not exceed 120 days.
Attendance of each Director at these meetings is as under:
|Name of Director ||Category ||No. of Board Meetings Attended |
|Mr. Paresh V. Parekh ||Promoter Executive ||4 |
|Mr. Ketan V. Parekh ||Promoter Executive ||4 |
|Mrs. Jyoti Palekar ||Non-Executive Independent ||4 |
|Mr. Dilip Thaker ||Non-Executive Independent ||4 |
|Mrs. Neeta Parekh ||Non-Executive ||2 |
Separate Meeting of Independent Directors
A meeting of the Independent Directors of the Company was held on 27th May2016 and the same was attended by Mr. Dilip Thaker and Mrs. Jyoti Palekar.
NUMBER OF MEETINGS OF COMMITTEES OF THE BOARD OF DIRECTORS
The Company has the following Committees of the Board:
1. Audit Committee
The Audit Committee is constituted as required under Section 177 of the Companies Act2013. The scope of activities and powers of the Audit Committee includes the areasprescribed under Section 177 of the Companies Act 2013.
Four (4) Audit Committee meetings were held during the financial year 2016-2017 on 27thMay 2016 10th August 2016 9th November 2016 and 9thFebruary 2017. The composition of the Audit Committee and the attendance of the AuditCommittee Members at the said meetings are as below:
|Sr. No. Name of the Director ||Position ||Meetings Attended |
|1 Mr. Dilip Thaker ||Chairman ||4 |
|2 Mrs. Jyoti Palekar ||Member ||4 |
|3 Mr. Paresh V. Parekh ||Member ||4 |
2. Stakeholders Relationship Committee
The Stakeholders Relationship Committee met four (4) times during the financial year2016-17 viz. on 27th May 2016 10th August 2016 9thNovember 2016 and 9th February 2017. The composition of the StakeholdersRelationship Committee and the attendance of the Stakeholders Relationship CommitteeMembers at the said meetings are as below:
|Sr. No. Name of the Director ||Position ||Meetings Attended |
|1 Mrs. Jyoti Palekar ||Chairman ||4 |
|2 Mr. Paresh V. Parekh ||Member ||4 |
|3 Mr. Ketan V. Parekh ||Member ||4 |
3. Nomination and Remuneration Committee
The Nomination and Remuneration Committee met two (2) times during the financial year2016-17 viz. on 27th May 2016 and 10th August 2016. The compositionof the Nomination and Remuneration Committee and the attendance of the Nomination andRemuneration Committee Members at the said meetings are as below
|Sr. No. Name of the Director ||Position ||Meetings Attended |
|1 Mrs. Jyoti Palekar ||Chairman ||2 |
|2 Mr. Dilip Thaker ||Member ||2 |
|3 Mrs. Neeta Parekh ||Member ||1 |
|4. Executive Management Committee || || |
The Executive Management Committee met twenty five (25) times during the financial year2016-17 viz. on 4th April 2016 5th May 2016 9th May2016 4th June 2016 6th June 2016 17th June 2016 22ndJune 2016 2nd July 2016 13th July 2016 20th July 20165th August 2016 8th August 2016 3rd October 2016 14thOctober 2016 27th October 2016 10th November 2016 24thNovember 2016 26th December 2016 9th January 2017 23rdJanuary 2017 1st February 2017 9th February 2017 6thMarch 2017 14th March 2017 and 24th March 2017 The composition ofthe Executive Management Committee and the attendance of the Committee Members at the saidmeetings are as below:
|Sr. No. Name of the Director ||Position ||Meetings Attended |
|1 Mr. Paresh Parekh ||Chairman ||22 |
|2 Mr. Ketan Parekh ||Member ||25 |
|3 Mrs. Neeta Parekh ||Member ||22 |
The Board consists of Mr. Paresh V. Parekh (DIN 00432673) and Mr. Ketan V. Parekh (DIN00432734) as Executive Directors of the Company in the capacity of Managing Director andJoint Managing Director respectively Mrs. Jyoti Palekar (DIN 03043009) and Mr. DilipThaker (DIN 00260231) are Independent Directors of the Company and Mrs. Neeta Parekh (DIN00811690) is non-executive Director of the Company.
Mr. Harsh P. Parekh (DIN: 06854020) was appointed as the Additional Director of theCompany w.e.f. 1st June 2017 and he holds office upto the date of the ensuingAnnual General Meeting pursuant to Section 161 of the Companies Act 2013. He was alsoappointed as the Whole Time Director of the Company with effect from 1st June2017 for a period of five years subject to approval of the members at the ensuing 30thAnnual General Meeting.
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Ketan V. Parekh (DIN: 00432734) Joint Managing Directorof the Company retires by rotation at the ensuing Annual Genera Meeting and beingeligible has offered himself for re-appointment.
The Board recommends the appointment of Mr. Harsh Parekh and re-appointment of Mr.Ketan Parekh to the members for consideration at the ensuing 30th AnnualGeneral Meeting.
Brief resume of the Directors proposed to be appointed/re-appointed and theirshareholding forms part of the Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 your Directors confirm that:
i. in the preparation of the annual accounts for the year ended 31st March2017 the applicable accounting standards had been followed along with proper explanationsrelating to material departures;
ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2017 and of theprofits of the Company for the financial year ended 31st March 2017;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. they had prepared the annual accounts on a going concern basis;
v. they had laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and
vi. they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DECLARATION FROM INDEPENDENT DIRECTORS
The Board has received declarations from the Independent Directors as per therequirement of Section 149(7) of the Companies Act 2013 that they meet all the criteriaof independence as mentioned in Section 149(6) of the Companies Act 2013.
PERFORMANCE EVALUATION OF THE BOARD
Pursuant to the provisions of the Companies Act 2013 the performance of theNon-Independent Directors and the Board as a whole and its Committees were evaluated atthe meeting of the Independent Directors held on 13th May 2017. The parameterson which performance is evaluated are skills knowledge participation in meetingscompliance with code of ethics contribution towards growth of the Company etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard pursuant to the provisions of the Companies Act 2013 on parameters such asparticipation in the meetings performance of duties level of oversight professionalconduct and independence etc.
The Directors expressed their satisfaction with the evaluation process.
DETAILS OF REMUNERATION TO DIRECTORS
The information relating to remuneration of directors as required under Section 197(12)of the Companies Act 2013 is given in Annexure 2.
POLICY RELATING TO DIRECTORS
The policy framed by the Nomination & Remuneration Committee under Section 178(3)of the Companies Act 2013 is as below:
Appointment Criteria and Qualifications
a) The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.
b) The Committee shall identify the extent to which the appointee is likely tocontribute to the overall effectiveness of the Board work constructively with theexisting directors and enhance the efficiencies of the Company;
c) The Committee has discretion to decide whether qualification expertise andexperience possessed by a person are sufficient / satisfactory for the concerned position.
Remuneration to Directors
i. Remuneration to Whole-time / Executive / Managing Director:
The Remuneration/ Compensation/ Commission etc. to be paid to Director /ManagingDirector etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under including any amendments thereto or any other enactment for the timebeing in force. The Whole-time / Executive / Managing Director shall be eligible for amonthly remuneration as may be approved by the Board on the recommendation of theCommittee. The break-up of the pay scale and quantum of perquisites including employer'scontribution to PF pension scheme medical expenses club fees etc. shall be decided andapproved by the Board on the recommendation of the Committee and approved by theshareholders and Central Government wherever required.
If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration in accordance with the provisions in Schedule V of theCompanies Act 2013 and if it is not able to comply with such provisions with theprevious approval of the Central Government.
If any Whole-time Director/Managing Director draws or receives directly or indirectlyby way of remuneration any such sums in excess of the limits prescribed under theCompanies Act 2013 or without the prior sanction of the Central Government whereverrequired he/she shall refund such excess remuneration to the Company and until such sumis refunded hold it in trust for the Company. The recovery of such sums refundable shallnot be waived by the Company unless permitted by the Central Government.
ii. Remuneration to Non- Executive / Independent Director:
The Non-Executive/Independent Director may receive remuneration / compensation/commission as per the provisions of Companies Act 2013 and the rules made thereunder.The amount of sitting fees shall be subject to ceiling/ limits as provided under CompaniesAct 2013 and rules made there under including any amendments thereto or any otherenactment for the time being in force.
The Independent Director shall not be entitled to any stock option of the Company.
The Committee shall carry out evaluation of performance of every Director at regularinterval (yearly).
The Committee may recommend to the Board with reasons recorded in writing removal ofa Director KMP or Senior Management Personnel subject to the provisions and compliance ofthe said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
APPOINTMENTS / RESIGNATIONS OF THE KEY MANAGERIAL PERSONNEL
Mr. Harsh P. Parekh resigned as the Chief Financial Officer of the Company with effectfrom 14th May 2017. He was appointed as the Additional Director and Whole TimeDirector of the Company with effect from 1st June 2017 subject to consent bythe Members at the ensuing 30th Annual General Meeting of the Company.
Mr. Umesh L. Shenoy was re-designated as the Chief Financial Officer of the Companywith effect from 14th May 2017.
Mr. Paresh Parekh Managing Director; Mr. Ketan Parekh Joint Managing Director; Mr.Harsh Parekh Whole Time Director; Mr. Umesh Shenoy Chief Financial Officer and Ms. SwatiZawar Company Secretary of the Company are the Key Managerial Personnel as per theprovisions of the Companies Act 2013.
None of the employees of the Company were drawing a remuneration exceeding Rs10200000/- per annum or Rs 850000/- per month or part thereof. The informationrequired under Section 197 (12) of the Companies Act 2013 read with Rule 5(2) & (3)of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedby Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016is given in the Annexure 3 to this report.
Your Directors value the commitment of the employees towards the Company and appreciatetheir valuable contributions for the progress and growth of the Company.
Pursuant to Section 139 of the Companies Act 2013 (the Act') and the rules madethereunder it is mandatory to rotate the Statutory Auditors on completion of the maximumterm permitted under the said section. Further every Company is required to appointauditors for a term of five years subject to their appointment being ratified at everyAnnual General Meeting.
M/s. Sheth Doctor & Associates Chartered Accountants Statutory Auditors of theCompany retire on the conclusion of the Thirtieth Annual General Meeting of the Company.
In view of the mandatory rotation it is proposed to appoint M/s. R. S. Prabhu &Associates Chartered Accountants (Firm Registration No. 127010W) as the statutoryauditors of the Company.
M/s. R. S. Prabhu & Associates Chartered Accountants are proposed to be appointedas the statutory auditors for a period of 5 (five) consecutive years from the conclusionof the Thirtieth Annual General Meeting till the conclusion of the Thirty Fifth AnnualGeneral Meeting of the Company subject to the ratification by the members every year.
The Company has received letter from the auditor to the effect that their appointmentif made will be in accordance with Section 139 read with Section 141 of the Act and thatthey are not disqualified for appointment.
M/s. R. S. Prabhu & Associates have confirmed that they have subjected themselvesto the peer review process of the Institute of Chartered Accountants of India (ICAI).
Members are requested to approve the appointment of M/s. R. S. Prabhu & AssociatesChartered Accountants and authorize the Board of Directors to fix their remuneration.
The report given by the retiring Auditors on the financial statements of the Companyforms part of the Annual Report.
The Auditors' Report for the financial year ended 31st March 2017 do notcontain any qualification reservation adverse remark or disclaimer.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed Mrs. Jayshree A. Lalpuria Company Secretary in practice as Secretarial Auditorof the Company for the financial year 2017-18.
Secretarial Audit Report as per Section 204 of the Companies Act 2013 for thefinancial year ended 31st March 2017 is annexed to this report at Annexure 4.The said report does not contain any qualification or reservation or adverse remarkrequiring explanation.
LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not given during the year under review any loan guarantee orinvested any funds falling under the purview of Section 186 of the Companies Act 2013.
Details of outstanding investments are given in the notes to financial statements.
RELATED PARTY TRANSACTIONS
All the related party transactions that were entered into during the financial yearwere at arm's length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Directors Promoters KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2is not applicable.
All Related Party Transactions as required under Accounting Standards AS-18 arereported in Note 26B - Notes to Accounts of the financial statements of the Company.
All related party transactions are placed before the Audit Committee and the Board forapproval.
The compliance with the provisions of Corporate Governance under the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 is not applicable to theCompany. Hence the Report on Corporate Governance as stipulated under Regulation 33 (e)read with Schedule IV of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 does not form part of the Annual Report.
MANAGEMENT'S DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 the ManagementDiscussion and Analysis is set out in this Annual Report.
The Company has not accepted any Deposit covered under Section 73 of the Companies Act2013 from the Shareholders or the Public during the year.
All the insurable interests of the company including inventories building plant &machinery etc. are adequately insured.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy on Prevention of Sexual Harassment at Workplace inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The policy provides for protection against SexualHarassment of Women at Workplace and for prevention and redressal of complaints.
No complaints were received from any employee during the financial year 2016-17 andhence no complaints are outstanding as on 31st March 2017 for redressal.
The Company has formulated a Vigil Mechanism Policy for Directors and employees toreport their genuine concerns about unethical behaviour actual or suspected fraud orviolation of the Codes of Conduct or policy. The necessary mechanism is in line with therequirements under the Companies Act 2013. It provides for adequate safeguards againstvictimization of Directors and employees who avail of the mechanism and also provide fordirect access to the Chairman of the Audit Committee in exceptional cases. None of theWhistle Blowers have been denied access to the Audit Committee. The said policy isavailable on the Company's website www.nationalplastic.com under the Investor Section.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed pursuant to Section 134 of theCompanies Act 2013 form part of this report and are set out in the Annexure 5 to thisreport.
RISK MANAGEMENT POLICY
The Board of Directors of your Company has formulated a Risk Management Policy for theCompany. It aims to identify evaluate risks associated with the business viz. economicenvironment and market conditions fluctuations in foreign currency politicalenvironment contractual compliance credit risks technology obsolescence inflationcommodity prices price fluctuation of raw materials and finished goods etc. Mitigationplans for the identified risks are drawn up based on the type of risks.
In the opinion of the Board none of the above mentioned risks threaten the existenceof the Company.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Board has adopted policies and procedures for ensuring that all transactions areauthorized recorded and correctly reported all assets are safeguarded and protectedagainst loss from unauthorized use or disposition reducing wastages and maintenance ofproper accounting records for ensuring accuracy and reliability of its financialinformation. The Board has constituted an Audit Committee which meets periodically toreview the financial performance and the accuracy of financial records.
The Management duly considers and takes appropriate action on the recommendations madeby the Statutory Auditors and the Audit Committee of the Board of Directors.
a. There is no change in the nature of business of the Company.
b. In terms of the first proviso to Section 136 of the Companies Act 2013 the Reportand Accounts are being sent to all the shareholders and is available on the Company'swebsite.
c. There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company's operations in future.
The Company has paid the Annual Listing fees to BSE Ltd. for the Financial Year 2017 -2018.
Your Directors would like to place on record their gratitude for the co-operation andsupport they have received from the State Government Authorities Statutory AuthoritiesLocal Bodies Banks and Financial Institutions and other Regulatory agencies during theyear. Your Directors warmly acknowledge the faith and confidence reposed in the Company byits channel partners dealers and customers in supporting its business activities andgrowth. Your Directors express their gratitude to the other business associates of theCompany for their unstinting support. Your Directors are thankful to the Members forextending the trust and confidence shown.
| ||For and on behalf of the Board of Directors |
| || || |
| ||Paresh V. Parekh ||Ketan V. Parekh |
|Place: Mumbai ||Managing Director ||Joint Managing Director |
|Date: 10th August 2017 ||DIN 00432673 ||DIN 00432734 |