Your Directors have pleasure in presenting the 10th Annual Report along with theaudited statements of accounts of your Company for the financial year ended 31st March2020.
1. FINANCIAL RESULTS:
The audited financial statements of the Company as on March 31 2020 are prepared inaccordance with Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") and provisions of theCompanies Act 2013 ("Act").
The Financial highlight is depicted below:
(Rs. In Lakhs)
|Particulars ||Year Ended on 31.03.2020 ||Year Ended on 31.03.2019 |
|Revenue from operations ||3439.72 ||2737.97 |
|Other Income ||92.92 ||37.87 |
|Total Revenue ||3532.64 ||2778.83 |
|Operating and Administrative expenses ||3157.63 ||2476.77 |
|Operating Profit before finance costs Depreciation and Tax ||375.01 ||302.06 |
|Less: Depreciation and Amortization expenses ||106.74 ||109.97 |
|Profit before finance cost and tax ||268.27 ||192.09 |
|Less: Finance Costs ||38.58 ||57.20 |
|Less: Exceptional Item ||0 ||0 |
|Profit Before Tax (PBT) ||229.69 ||134.88 |
|Provision for Tax (Including Deferred Tax) ||54.77 ||41.24 |
|Profit after Tax ||174.92 ||93.64 |
|Other Comprehensive Income ||0 ||0 |
|Profit available for appropriation ||174.92 ||93.64 |
2. PERFORMANCE HIGHLIGHTS: A. REVENUE
During the year under review company has total revenue of Rs. 3532.64 lakhs as againstthe previous year turnover of Rs. 2778.83 lakhs which shows increase of 27.13% incomparison with the previous year. Profit before tax increase by 70.29% as compared toprevious year. The net profit after tax of the company increased by 86.80% with comparedto previous year.
B. OPERATING AND ADMINISTRATIVE EXPENSES
The operating Expenses of Rs. 3302.95 Lakhs during FY 2019-20 as compared to previousfinancial year incurred of Rs. 2643.95 lakhs. As compared to previous year the operativeexpense increased due to overall increase in employee expense and other operative andadministrative expense.
C. DEPRECIATION AND AMORTISATION EXPENSES
The depreciation Expenses of Rs. 106.74 Lakhs during FY 2019-20 as compared toprevious financial year incurred of Rs. 109.97 lakhs .
D. FINANCE COST
The finance cost of Rs. 38.58 Lakhs during FY 2019-20 as compared to previousfinancial year incurred of Rs. 57.28 lakhs . Decrease as compared to previous year.
E. TOTAL PROFIT AFTER TAX FOR THE YEAR
Profit after tax for the year was Rs. 174.92 Lakhs as compared to Profit after tax ofRs. 93.64 Lakhs in FY 2018-19. PAT get increased due to increase in turnover of thecompany as compared to previous year.
Due to the lockdown announced by the government of India from 22th March 2020 entireoperations of the company came to a halt. The supply chain was disrupted in view oflockdown during March-May 2020 due to closure of our plants as well as our vendors' plant.Further as per district collector's orders our plants resumed operations from 19th April2020. Due to the diverse base of clientele we have seen our order flow recover well afterresuming the operations. Our plant at Shapar (Gujarat) remained closed for 28 days.However the production activity has recovered post resuming operations. The supply chainwas disrupted in view of lockdown during March-May 2020 due to closure of plants of ourvendors. However the situation has improved materially in June 2020 with Central &states relaxing lockdown norms. There is no impact on internal financial controls due tothe COVID-19 situation. The company is well positioned to fulfil its obligations and alsodoes not foresee any significant impact on the business due to non fulfilment of theobligations by any party.
The Board of Directors of your company after considering holistically the relevantcircumstances and keeping in view the Company's dividend distribution policy has decidedthat it would be prudent not to recommend any Dividend for the year under review.
4. MATERIAL CHANGES AND COMMITMENTS:
There are no material changes which have occurred between the end of financial year ofthe company and the date of this report.
5. FIXED DEPOSITS:
During the year under review your Company has not accepted any fixed deposits withinthe meaning of Section 73 of the Companies
Act 2013 read with rules made there under.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL: A. BOARD COMPOSITION
- Mr. Anilbhai V. Bhalu (Managing Director)
- Mr. Shailesh K. Bhut (Whole Time Director)
- Mr. Prashant B. Bhatti (Chief Financial Officer) and
- Ms. Urvi H. Kesariya (company Secretary)
Are the Whole-time Key Managerial Personnel of the Company.
B. DIRECTOR RETIRING BY ROTATION
Pursuant to the requirements of the Companies Act 2013 and Articles of Association ofthe Company Mr. GOPAL DEVRAJBHAI KHICHADIA (DIN: 00127947) retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment. TheBoard recommends the re-appointment of Mr. GOPAL DEVRAJBHAI KHICHADIA for your approval.Brief details of the Director who is proposed to be re-appointed as required underRegulation 36 of the SEBI Listing Regulations are provided in the Notice of AnnualGeneral Meeting.
C. INDEPENDENT DIRECTORS AND THEIR MEETING:
Your Company has received annual declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of Independence provided in Section149(6) of the Companies Act 2013 and Regulations 16(1)(b) & 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as Independent Director during the year.Also your Company has received annual declarations from all the Independent Directors ofthe Company confirming that they have already registered their names with the data bankmaintained by the Indian Institute of Corporate Affairs ["IICA"] as prescribedby the Ministry of Corporate Affairs under the relevant rules and that the onlineproficiency self-assessment test as prescribed under the said relevant rules is applicableto them and they will attempt the said test in due course of time.
7. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to clause (c) of sub-section (3) and subsection (5) of Section 134 of theCompanies Act 2013 the Board of Directors to the best of their knowledge and abilitystate the followings:-
A. that in the preparation of the annual financial statement the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any;
B. that such accounting policies have been selected and applied consistently andjudgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2020 and of theloss of the Company for the year 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 statement 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 proper system to ensure compliance with the provisions of all applicable lawsincluding the compliance of applicable
Secretarial Standards were in place and were adequate and operating effectively.
8. BOARD EVALUATION:
The Board carried out an annual performance evaluation of its own performance and thatof its committees and individual directors as per the formal mechanism for such evaluationadopted by the Board. The performance evaluation of all the Directors was carried out bythe Nomination and Remuneration Committee.
The performance evaluation of the Chairman the Non-Independent Directors and the Boardas a whole was carried out by the Independent Directors. The exercise of performanceevaluation was carried out through a structured evaluation process covering variousaspects of the Board functioning such as composition of the Board & committeesexperience & competencies performance of specific duties & obligationscontribution at the meetings and otherwise independent judgment governance issues etc.
9. INTERNAL FINANCIAL CONTROL (IFC) SYSTEM AND THEIR ADEQUACY:
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completdefiness of accounting records. The InternalAudit Reports were reviewed periodically by Audit Committee as well as by the Board.Further the Board annually reviews the effectivdefiness of the Company's internal controlsystem. The Directors and Management confirm that the Internal Financial Controls (IFC) isadequate with respect to the operations of the Company. A report of Auditors pursuant toSection 143(3) (i) of the Companies Act 2013 certifying the adequacy of InternalFinancial Controls is annexed as an Annexure A name of head is Report on the InternalFinancial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act") with the Auditors report.
10. RELATED PARTY TRANSACTIONS:
There were no materially significant related party transactions which could have had apotential conflict with the interests of the Company. Transactions with related partiesare in the ordinary course of business on arm's length and are periodically placed beforethe Audit Committee and Board for its approvals and the particulars of contracts enteredduring the year in Form AOC-2 is enclosed as Annexure - C.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthere under and the Listing Agreement. This Policy was considered and approved by theBoard has been uploaded on the website of the Company.
11. AUDITORS & AUDITORS' REPORT:
A. AUDITORS DETAILS:
M/S SVK & ASSOCIATES Chartered Accountants Ahmedabad the Statutory Auditors ofthe Company have been appointed as Statutory Auditors of the Company by the Members of theCompany till the Conclusion of 13 Annual General Meeting of the Company to be held for thefinancial year 2024. They have confirmed that they are not disqualified from continuing asStatutory Auditors of the Company for financial year 2020-21.
B. AUDITORS' REPORT
In the opinion of the directors the notes to the accounts in auditor's report areself-explanatory and adequately explained the matters which are dealt with by theauditors.
C. COST AUDIT REPORT
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the Cost Audit Report is not mandatorily applicable to ourCompany for the financial year 2019-20 hence; no such audit has been carried out duringthe year.
.D. SECRETARIAL AUDIT REPORT
A qualified Practicing Company Secretary carries out secretarial audit and provides areport on the compliance of the applicable Acts Laws Rules Regulations GuidelinesListing Agreement Standards etc. as stipulated by the provisions of Section 204 of theCompanies Act 2013 read with the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Secretarial Audit Report forms part of this report as Annexure- B. The findings of the audit have been satisfactory.
12. CORPORATE GOVERNANCE:
Your Company has been complying with the principles of good Corporate Governance overthe years and is committed to the highest standards of compliance. Pursuant to the ListingAgreement read with Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith the corporate governance provisions as specified in regulations 17 to 27 and clauses(b) to (i) of Regulation 46 (2) and para C D and E of Schedule V shall not apply theCompany. However as a good Corporate Governance Practice the Company has generallycomplied with the Corporate Governance requirements and a report on Corporate Governanceis annexed as forms part of this Report. As required under SEBI (LODR) Regulations 2015the Management Discussion and Analysis Report is annexed as part of this Report ASANNEXURE E ..
13. MANAGEMENT DISCUSSION AND ANALYSIS:
A detailed report on the Management discussion and Analysis is provided as a separatesection in the Annual Report AS ANNEXURE D.
14. CORPORATE SOCIAL RESPONSIBILITY (CSR):
Company has generally taken corporate social responsibility initiatives. However thepresent financial position of the company does not mandate the implementation of corporatesocial responsibility activities pursuant to the provisions of Section 135 and ScheduleVII of the Companies Act 2013. The company will constitute CSR Committee develop CSRpolicy and implement the CSR initiatives whenever it is applicable to the Company.
A. NUMBER OF BOARD MEETING
The Board of Directors met 11 (ELEVEN) times during the year under review. The detailsof Board meetings and the attendance of the
Directors are provided in the Corporate Governance Report which forms part of thisReport.
B. COMMITTEES OF BOARD:
Details of various committees constituted by the Board of Directors as per theprovisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and the Companies Act 2013 are given in the Corporate Governance Report and forms partof this report.
C. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 are annexedto this Report as Annexure-A.
D. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy and has established the necessary vigilmechanism for employees and Directors to report concerns about unethical behaviour. Noperson has been denied access to the Chairman of the Audit Committee. The Vigil MechanismPolicy has been uploaded on the website of the Company.
E. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Particulars of loans guarantees or investments under Section 186 of the Companies Act2013 are given in the notes to the Financial Statement.
F. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.
G. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
I. CONSERVATION OF ENERGY
As required by Rule 8 to Companies (Account Rules 2014)
- Company ensures that the manufacturing is conducted in the manner whereby optimumutilization and maximum possible savings of energy is achieved.
- No specific investments have been made for reduction in energy consumption.
ii. TECHNOLOGY ABSORPTION
Company's products are manufactured by using in house/domestic know how and no outsideTechnology is being used for manufacturing activities. Therefore no technology absorptionis required. Further the company has not incurred any expenses towards Research &Development.
iii. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has not imported any raw materials spare parts and components during thefinancial year and company has earned Rs. 114622554/- as a earning in foreign exchange(Export of goods calculated on FOB basis) and there was no foreign exchange
H. PARTICULARS OF EMPLOYEES PERSONNEL
None of the employees is in receipt of remuneration in excess of the limit laiddown under Rule 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The information required pursuant to Section 197 of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company and Directors are annexed asAnnexure G and forms part of this Report.
I. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
The Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the work place (Prevention Prohibitionand Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The Company has not received anycomplaint under this policy during the year 2019-2020.
All the properties and the insurable interest of the company including building plantsand machinery and stocks wherever necessary and to the extent required have beenadequately insured.
K. LISTING AND DEMATERIALIZATION
The equity shares of the Company are listed on the SME Platform of Bombay StockExchange Ltd (BSE). All the shares of company are in dematerialize form. L. CERTIFICATIONOF STATUS OF DIRECTOR'S QUALIFICATIONS
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 CERTIFICATE OFNON-DISQUALIFICATION OF DIRECTORS annexed to this report as annexure H. M. UNCLAIMEDDIVIDEND
In the interest of the shareholders the Company sends periodical reminders to theshareholders to claim their dividends in order to avoid transfer of dividends/shares toIEPF Authority. 16. ACKNOWLEDGEMENT: Your Directors place on record their appreciation forassistance and co-operation received from various Ministries and Department of Governmentof India and other State Governments financial institutions banks shareholders of theCompany etc. The management would also like to express great appreciation for thecommitment and contribution of its employees for their committed services. Your Directorswish to place on record their sincere appreciation for the dedicated efforts andconsistent contribution made by the employees at all levels to ensure that the Companycontinues to grow and excel. Your Directors wish to take this opportunity to place onrecord their gratitude and sincere appreciation for the titimely and valuable assistanceand support received from Bankers Share Transfer Agents Auditor Customers Suppliersand Regulatory Authorities. The Board values and appreciates the valuable committedservices of the employees towards performance of your Company without which it would nothave been possible to achieve all round progress and growth. Your Directors are thankfulto the shareholders for their continued patronage.