National Plastic Industries Ltd.
|BSE: 526616||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE233D01013|
|BSE LIVE 15:45 | 19 Sep||61.65||
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
National Plastic Industries Ltd. (NATLPLASTIC) - Director Report
Company director report
NATIONAL PLASTIC INDUSTRIES LIMITED
Your Directors present their 29th Annual Report together with the AuditedAccounts of the Company for the year ended 31st March 2016.
(Rs. in Lacs)
The business environment was positive during the year with stability in the marketconditions and the raw material prices.
The year 2015-2016 was optimistic year for the Company Rs. s operations with risingtrends. The Company was able to achieve a turnover of Rs. 114.08 Crs for the year2015-16. Persistent efforts have been made by the Company to maintain higher sales volumeand reduce finance costs. There was intense competition both from the organized marketplayers as well as the local unorganized manufacturers. The Management believes that theoverall growth and new entrants in the organized market executing business transactionsthrough the ecommerce portals will bring transparency in doing business and a shift fromunorganized market players to organized market players.
STATE OF AFFAIRS
During the financial year ended 31st March 2016 the Total Sales & OtherIncome for the year was at Rs. 114.08 Crores as against Rs. 96.39 Crores forthe year 2014-15. Out of this exports were Rs. 23.88 Crores as against Rs. 23.43Crores for the year 2014-15. Your Company is working on consolidating its strengths in thekey markets to increase export sales in the coming years.
Net Sales were Rs. 99.53 Crores as against Rs. 82.84 Crores in theprevious year. The profit after tax for the year under review was at Rs. 197.70Lacs representing an increase of 55% over the previous year.
Due to various initiatives taken by the Company the Interest and Finance cost havedecreased by Rs. 12.64 Lacs i.e. from Rs. 406.54 Lacs to Rs. 393.90 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 2015-16.
The Company has also commenced the manufacturing of Air-coolers.
The Board of Directors of your Company are pleased to recommend a Dividend of Rs. 1/-per equity share (10%) as compared to Rs. 1/- in the previous year. The totaloutflow on account of Equity Dividend will be Rs. 109.89 Lacs (inclusive of tax of Rs.18.59 lacs) which is provided in the accounts for the purpose of Dividend. TheDividend payout is subject to the approval of the shareholders at the ensuing AnnualGeneral Meeting of the Company.
AWARDS AND RECOGNITIONS
The Company was conferred with the Largest Exporter of Plastic Furniture Award for theyear 2014-15 by the Plastic PLEX Council in FY15-16.
The Company does not have any Subsidiary Company.
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 2016 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 six (6) times during the FY2015-16 viz. on 14th May 2015 30th May 2015 30th June2015 14th August 2015 7th November 2015 and 12thFebruary 2016. The maximum interval between any two meetings did not exceed 120 days.
Attendance of each Director at these meetings is as under:
1Ceased to be the Director with effect from 7th November 2015.
2Appointed as Independent Director with effect from 29th September2015.
3Appointed as an Additional Director with effect from 7th November2015.
Separate Meeting of Independent Directors
A meeting of the Independent Directors of the Company was held on 30th May2015 and the same was attended by Mr. Dhirajlal Shanghavi and Mr. Ashwin Goradia.
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.
In view of the cessation of Mr. Dhirajlal Shanghavi and Mr. Ashwin Goradia from theDirectorship of the Company on 7th November 2015 the Audit Committee wasre-constituted by the Board on 7th November 2015. The present composition ofthe Committee is as under:
1Appointed as chairman of the Audit Committee with effect from 7thNovember 2015.
2Appointed as member of the Audit Committee with effect from 7thNovember 2015.
Four (4) Audit Committee meetings were held during the financial year 2015-2016 on 30thMay 2015 14th August 2015 6th November 2015 and 12thFebruary 2016. The attendance of the Audit Committee Members at the said meetings is asbelow:
Appointed as chairman of the Audit Committee with effect from 7th November2015.
2Appointed as member of the Audit Committee with effect from 7thNovember 2015.
3Ceased to be member of the Audit Committee with effect from 7thNovember 2015 4Ceased to be chairman of the Audit Committee with effect from 7thNovember 2015
2. Share Transfer and Stakeholders Relationship Committee
The nomenclature of the Committee has changed to "Stakeholders RelationshipCommittee" by the Board of Directors at its meeting held on 14th August2015.
In view of the cessation of Mr. Ashwin Goradia from the Directorship of the Company on7th November 2015 the Stakeholders Relationship Committee was re-constitutedby the Board on 7th November 2015. The present composition of the Committee isas under:
Appointed as chairman of the Stakeholders Relationship Committee with effect from 7thNovember 2015.
The Share Transfer and Stakeholders Relationship Committee/Stakeholders RelationshipCommittee met eight (8) times during the financial year 2015-16 viz. on 6thApril 2015 13th April 2015 12th May 2015 9th June2015 23rd June 2015 14th July 2015 4th August 2015 and12th February 2016. The attendance of the Committee Members at the saidmeetings is as below:
Appointed as chairman of the Stakeholders Relationship Committee with effect from 7thNovember 2015. 2Ceased to be chairman of the Stakeholders RelationshipCommittee with effect from 7th November 2015.
3. Nomination and Remuneration Committee
In terms of Section 178 of the Companies Act 2013 read with rules framed thereunderthe Board of Directors of the Company have constituted Nomination and RemunerationCommittee. The present composition of the Committee is as under:
1Appointed as chairman of the Nomination and Remuneration Committee with effectfrom 14th August 2015. 2Appointed as a member of the Nomination andRemuneration Committee with effect from 7th November 2015.
The Nomination and Remuneration Committee met four (4) times during the financial year2015-16 viz. on 30th May 2015 14th August 2015 6thNovember 2015 and 12th February 2016. The attendance of the Committee Membersat the said meetings is as below:
Appointed as chairman of the Nomination and Remuneration Committee with effect from 14thAugust 2015. 2Appointed as a member of the Nomination and RemunerationCommittee with effect from 7th November 2015. 3Ceased to be memberof the Nomination and Remuneration Committee with effect from 7th November2015.
4. Executive Management Committee
The Executive Management Committee was constituted by the Board of Directors at theirmeeting held on 14th August 2015. The present composition of the Committee isas under:
Appointed as a member of the Executive Management Committee with effect from 7thNovember 2015.
The Executive Management Committee met twenty (20) times during the financial year2015-16 viz. on 19th August 2015 25th August 2015 1stSeptember 2015 9th September 2015 29th September 2015 7thOctober 2015 13th October 2015 27th October 2015 9thNovember 2015 26th November 2015 1st December 2015 10thDecember 2015 7th January 2016 19th January 2016 27thJanuary 2016 4th February 2016 29th February 2016 11thMarch 2016 17th March 2016 and 28th March 2016. The attendance ofthe Committee Members at the said meetings is as below:
Appointed as a member of the Executive Management Committee with effect from 7thNovember 2015. 2Ceased to be member of the Executive Management Committee witheffect from 7th November 2015.
The Board consists of Mr. Paresh V. Parekh and Mr. Ketan V. Parekh as ExecutiveDirectors of the Company in the capacity of Managing Director and Joint Managing Directorrespectively Mrs. Jyoti Palekar and Mr. Dilip Thaker are Independent Directors of theCompany and Mrs. Neeta Parekh is non-executive Director of the Company.
During the year under review your Company appointed Mrs. Jyoti M. Palekar and Mr.Dilip M. Thaker as Independent Directors with effect from 29th September 2015for a period of five years.
Mr. Ashwin Goradia and Mr. Dhirajlal Shanghavi resigned from the Directorship of theCompany with effect from 7th November 2015.
Further Mrs. Neeta K. Parekh was appointed as the Additional Director of the Companyw.e.f. 7th November 2015 and she holds office upto the date of the ensuingAnnual General Meeting pursuant to Section 161 of the Companies Act 2013.
The Board of Directors in terms of Section 152 of the Companies Act 2013 proposes toappoint Mrs. Neeta K. Parekh as a Director of the Company liable to retire by rotation.
In accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Paresh V. Parekh Managing Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-appointment. Board recommends his re-appointment to the members forconsideration in the ensuing 29th Annual General Meeting.
Brief resume of the Director proposed to be appointed and their shareholding forms partof 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 March2016 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 2016 and of theprofits of the Company for the financial year ended 31st March 2016;
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.However the Company is in the process of documenting the internal financial controls asper the requirements of the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by Institute of Chartered Accountants of India (ICAI); 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 were evaluated at the meeting of theIndependent Directors held on 27th May 2016. The parameters on whichperformance is evaluated are skills knowledge participation in meetings compliance withcode 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 Rs.s contribution to PF pension scheme medical expenses club fees etc. shall be decidedand approved 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. Paresh Parekh Managing Director; Mr. Ketan Parekh Joint Managing Director; Mr.Harsh Parekh Chief Financial Officer and Ms. Swati Zawar Company Secretary of theCompany are the Key Managerial Personnel as per the provisions of the Companies Act 2013.
None of the Key Managerial Personnel has resigned during the year under review.
None of the employees of the Company were drawing a remuneration exceeding Rs. 10200000/-per annum or Rs. 850000/- per month or part thereof. The information requiredunder Section 197 (12) of the Companies Act 2013 read with Rule 5(2) & (3) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended byCompanies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016 isgiven 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.
M/s. Sheth Doctor & Associates Chartered Accountants Statutory Auditors of theCompany hold office until the conclusion of the forthcoming Twenty Ninth Annual GeneralMeeting of the Company and being eligible offer themselves for re-appointment.
The Company has received letter from the auditor to the effect that his re-appointmentif made would be within the prescribed limits under Section 141(3)(g) of the CompaniesAct 2013 and that they are not disqualified for reappointment.
The report given by the Auditor on the financial statements of the Company is part ofthe Annual Report.
Explanations or Comments by the Board on every qualification reservation or adverseremark or disclaimer made by the auditor in the Audit Report
With regards to the Auditor Rs. s disclaimer of opinion on internal financial controlsthe Directors wish to clarify that there are adequate informal controls over theoperations of the Company and the Company is in the process of documenting the internalfinancial controls as per the requirements of Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by Institute of Chartered Accountants of India(ICAI).
The Notes on Financial Statements referred to in the Auditors Rs. 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 your Company hasappointed Ms. Jayshree A. Lalpuria Company Secretary in practice as its SecretarialAuditor.
Secretarial Audit Report as per Section 204 of the Companies Act 2013 for thefinancial year ended 31st March 2016 is annexed to this report at Annexure4. 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 Rs. s length basis and were in the ordinary course of business. There are 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. (Annexure 5)
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.
TRANSFER TO RESERVES
The Company has not appropriated any profits to general reserves for the year 2015-16.
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 2015-16 andhence no complaints are outstanding as on 31st March 2016 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 Rs. s website www.nationalplastic.comunder 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 6 tothis report.
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 Company Rs. s internal control systems commensurate with the size of the Companyand nature of its business has defined policies and procedures ensuring that alltransactions are authorized recorded and correctly reported all assets are safeguardedand protected against loss from unauthorized use or disposition reducing wastages andmaintenance of proper accounting records for ensuring accuracy and reliability of itsfinancial information. However the Company is in the process of documenting the internalfinancial controls as per the requirements of the Guidance Note
on Audit of Internal Financial Controls over Financial Reporting issued by Institute ofChartered Accountants of India (ICAI). The Board has constituted an Audit Committee whichmeets periodically to review the financial performance and the accuracy of financialrecords.
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 Rs. 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.
d. During the year 2015-16 the Company had adopted new substituted Articles ofAssociation to align with the provisions of Companies Act 2013 at the 28thAnnual General Meeting of the Company.
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 Rs. s operations in future.
The Securities and Exchange Board of India (SEBI) on 2nd September 2015issued the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Thesaid regulations were effective 1sl December 2015. Accordingly all listedentities were required to enter into the Listing Agreement within six months from theeffective date. The Company entered into Listing Agreement with BSE Limited duringDecember 2015.
The Company has paid the Annual Listing fees to BSE Ltd. for the Financial Year 2016 -2017.
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.