The Directors are pleased to present their Thirty-Sixth Annual Report and AuditedFinancial Statements for the year ended
31 March 2018.
1. FINANCIAL SUMMARY
| ||31-03-2018 ||31-03-2017 |
|Net Sales ||990497480 ||1069191166 |
|Other Income ||16143679 ||10351958 |
|Sales and Other Income ||1006641159 ||1079543124 |
|Operating Profit || || |
|(before Depreciation and Tax) ||65178974 ||50522060 |
|Less : Depreciation ||18210873 ||17857267 |
|Profit before tax ||46968101 ||46968101 |
|Less :Provision for tax || || |
|Current Tax ||16757000 ||8933000 |
|Deferred tax Credit ||473288 ||605456 |
|Profit after Tax ||29737813 ||23004755 |
|Short Provision of Tax || || |
|for Prior Years || ||60791 |
|Net Profit after prior || || |
|period items ||29737813 ||23065546 |
|Add : Balance brought || || |
|forward ||212133393 ||193054428 |
|Profit available for || || |
|Appropriation ||241871206 ||212133393 |
2 . Adoption of Indian Accounting Standards (Ind AS)
The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministryof Corporate Affairs with effect from 1st April 2017 with a transition date of 1stApril 2016. Ind AS 101 - First time adoption of Indian Accounting Standards requires thatall Ind AS's and interpretations that are issued an effective be applied retrospectivelyand consistently for all financial years presented.
The adoption of Ind AS and introduction of GST with effect from 1st July 2017 hasresulted in lower reporting of sales in the current year in comparison to the salesreported under the pre-GST/pre Ind AS structure of indirect taxes. With the change instructure of indirect taxes expenses are also being reported net of taxes. AccordinglyFinancial statements for the year ended 31 March 2018 and in particular Sales absoluteexpenses elements of Working Capital (Inventories Trade payable other currentassets/current liabilities etc.) and ratios in percentage of sales are not comparablewith the figures of the previous year.
3. Operations/State of Company's Affairs
During the year under review sales volume has increased by marginally 0.45% whilesales value has been reduced by 8% to Rs 990497480/- from Rs 1069191166/- in theprevious year.
The profit before tax has increased by 43.79% to Rs. 46968101/- from Rs.32664793/- in the previous year.
During the year under review availability of raw materials was comfortable howevervolatility in Exchange rate and upward phase in crude price will reflect in Raw MaterialPrice which may put pressure on margins during current year however with more domesticcapacity commissioned Raw Material availability is expected to be stable during currentyear.
No Material Changes have occurred from the end of the Financial Year till the date ofthis report affecting the Financial Position of the Company.
There is no Change in the nature of business during the year under review.
No significant and material orders have been passed by the regulators or Courts orTribunals impacting the going concern status and the company's operations in future duringthe year under review.
The Board of Directors have recommended a dividend of Rs.1.5 per equity share (15%) forthe year 2017-18.(Previous year Rs.1.2 per equity share 12 %) for approval at the AnnualGeneral Meeting. The dividend if approved will result in a cash outflow of Rs54.16 lacs(including dividend distribution tax of Rs. 9.16 ) as compared to Rs. 43.33 lacs includingdividend distribution tax of 7.33 lacs in previous year.
5. BOARD MEETINGS:
The Board of Directors met Seven times during the Financial Year 2017-18.
6. DIRECTORS AND KEY MANANGERIAL PERSONNEL :
Mr. Pheroze Kharas Director / Chairman retired by rotation at the last Annual GeneralMeeting held on 20th September 2017. The Board places on record its sincere appreciationfor the assistance and guidance provided by him during his tenure as Director of theCompany.
The Board at its meeting held on 27th November 2017 has appointed Mr. Mukul B. DesaiDirector as Chairman of the Company with effect from 27th November 2017.
Mrs. Charulata Patel Director of the Company would retire by rotation at the ensuingAnnual General Meeting and being eligible offers herself for re-appointment
The members at the 33rd Annual General Meeting held on 12th September 2015 had approvedthe appointment of Mr.
Jaymin Desai as Managing Director of the Company for a period of 3 years from 1stOctober 2015 to 30th September 2018. The Board Proposes to re-appoint him as theManaging Director for a further period of 3 years i.e from 1st October 2018 to 30thSeptember 2021 at the ensuing Annual General Meeting.
SEBI vide its Notification No. SEBI/ LAD-NRO/ GN/ 2018/ 10 dated May 09 2018 hasnotified SEBI (Listing Obligations and Disclosures Requirement) (Amendment) Regulation2018In which there is a provision that Non Executive Director above the age of 75 yearswill be appointed or continued only after passing special resolution.
Considering their vast expertise and knowledge The Board proposes continuation of Mr.Dhananjay T Desai age 75 and Mr. Jehangir A. Moos age 74 till their original tenure ofdirectorship i.e 11th September 2020 and 19th September 2019.
7. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet the criteria of their Independence laid down in Section 149(6) of the Actand there has been no change in the circumstances which may affect their status asindependent director during the year. In the opinion of the Board the Independentdirectors possess appropriate balance of skills experience and knowledge as required.
8. AUDIT COMMITTEE
The Audit Committee of the company consists of following members.
I. Mr. Mukul Desai-Chairman II. Mr. Jehangir Moos III. Mr. Bhupendra Desai
9. POLICY ON DIRECTORS' APPOINTMENT AND
REMUNERATION AND CRITERIA FOR INDEPENDENT DIRECTORS
The Remuneration Policy for directors and senior management and the Criteria forselection of candidates for appointment as directors independent directors seniormanagement are placed on the website of the Company weblink <http://www.ecoplastindia.com/ Remuneration Policy for directors and seniormanagement.html>
There has been no change in the policies since the last fiscal year.
We affirm that the remuneration paid to the directors is as per the terms laid out inthe remuneration policy of the Company
10. VIGIL MECHANISM
The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. To maintain these standards the Company encourages itsemployees who have concerns about suspected misconduct to come forward and express theseconcerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower)mechanism formulated by the Company provides a channel to the employees and Directors toreport to the management concerns about unethical behaviour actual or suspected fraud orviolation of the Codes of conduct or policy. The mechanism provides for adequatesafeguards against victimization of employees and Directors to avail of the mechanism andalso provide for direct access to the Managing Director/ Chairman of the Audit Committeein exceptional cases.
11. DIRECTOR'S RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors have 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;
(c) the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors have laid down internal financial controls to be followed by thecompany in consultation with the experts and that such internal financial controls areadequate and were operating effectively.
(f) the directors have devised proper systems in consultation with the experts toensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
12. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has a proper and adequate system of internal financial controlscommensurate with its nature and size of business and meets the following objectives: vProviding assurance regarding the effectiveness and efficiency of operations; v Efficientuse and safeguarding of resources; v Compliance with policies procedures and applicablelaws and regulations; and v Transactions being accurately recorded and reported timely. vThe Company has a budgetary control system to monitor expenditures and operations againstbudgets on an ongoing basis.
v The Internal Auditor also regularly reviews the adequacy of internal financialcontrol system.
13. SUBSIDIARY COMPANY
A Statement Containing the Salient features of the Financial Statements of thesubsidiary Company is annexed as Annexure- I as a part of this Report.
During the year under review No Company has become or ceased to be Company'ssubsidiary joint venture or associate company.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company along with relevant documents and separate audited accounts in respect ofthe subsidiary are available on the website of the Company.
14. EXTRACT OF ANNUAL RETURN:
As provided under sub Section (3) of Section 92 of the Act the extract of annualreturn in Form MGT-9 is enclosed which forms part of the directors' report as Annexure II
At the 35th Annual General Meeting of the Company held on 20th day of September 2017M/s. Y.B. Desai & Associates Chartered Accountants Surat (ICAI Registration No.102368W) were appointed as the Auditors of the Company from the conclusion of 35th AGMtill the conclusion of the 40th AGM of the Company to be held in the year 2022.
16. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s Parikh & AssociatesPractising Company Secretaries wereappointed as the Secretarial Auditors for auditing the secretarial records of the Companyfor the financial year 2017-2018.
Secretarial audit report as provided by M/s Parikh & Associates Practising CompanySecretaries is annexed to this Report as Annexure- III.
17. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT:
The Auditors' Report and Secretarial Auditors' Report do not contain anyqualifications reservations or adverse remarks.
18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with Clause (m) of Sub-section (3) of Section 134 of theCompanies Act 2013 read with the Companies (Accounts) Rules 2014 is annexed to thisReport as Annexure -IV.
The Company has not accepted any deposits during the year under report.
20. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
As on 31st March 2018 the Company has provided the following Loans Guarantees andInvestments under section 186 of the Companies Act 2013.
i. Loans :Rs.3510000/- to Synergy Films Private
Limited Wholly Owned Subsidiary
i. Guarantees: Rs.40650497 /- to Bank & Financial Institution for the Loansadvanced to Synergy Films Private Limited Wholly Owned Subsidiary.
ii. Investments; Rs.23025048/-(Before Ind As Adjustment it was Rs.8176257) for1195360 Equity Shares of Rs.10 each fully paid up in Synergy Films Private LimitedWholly Owned Subsidiary
21. RISK MANAGEMENT POLICY :
The Company has adopted a Risk Management Policy which is implemented throughout theOrganisation; Special Emphasis on Risk Management is given during the Annual BudgetingProcess and Periodical Monthly Meetings.
22. CORPORATE SOCIAL RESPONSIBILTY POLICY :
The Provisions of Corporate Social Responsibility under section 135 of the CompaniesAct 2013 are not applicable to the company. However as a part of CSR initiative TheCompany has adopted 15 Mentally Challenged Children who are under rehabilitation in Jainaanupam N.Parmar Charitable Trust Valsad.
23. RELATED PARTY TRANSACTIONS
Particulars of Contracts or Arrangements with Related parties referred to in Section188(1) in Form AOC- 2 are annexed as Annexure - V to this Report.
24. FORMAL ANNUAL EVALUATION:
An annual evaluation of the Board's own performance Board committees and individualdirectors was carried out pursuant to the provisions of the Act in the following manner:
|Sr. No. ||Performance evaluation of ||Performance evaluation performed by ||Criteria |
|1. ||Each Individual ||Nomination and ||Attendance Contribution to the |
| ||directors ||Remuneration Committee ||Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and g u i d a n c e p r o v i d e d k e y performance aspects in case of executive directors etc. |
|2. ||Independent directors; ||Entire Board of Directors excluding the director who is being evaluated ||Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided etc. |
|3. ||Board and its committees ||All directors ||B o a r d c o m p o s i t i o n a n d structure; effectiveness of Board processes information and functioning fulfillment of key responsibilities performance of specific duties and obligations timely flow of information etc. The assessment of committees based on the terms of reference o f t h e c o m m i t t e e s a n d effectiveness of the meetings |
25. PARTICULARS OF EMPLOYEES
Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the particulars of employees areannexed as Annexure - VI to this Report.
26. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITIONAND REDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and Redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the financial year2017-18 the Company has not received any complaints on sexual harassment.
27. LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 toBSE where the Company's Shares are listed.
28. INSIDER TRADING REGULATIONS AND CODE OF
The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and isavailable on our websitehttp://www.ecoplastindia.com/code-of-practices-and-procedures.html
29. CORPORATE GOVERNANCE:
In terms of the Regulation 15(2) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2017 The Company is not required tocomply with corporate governance provisions of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2017 during the financialyear 2017-18.
Details of Directors Remuneration as required under Schedule V Part II Section II (A)(IV) of Companies Act 2013 is annexed as Annexure - VII to this Report.
30. MANAGEMENT DISCUSSION ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2017 theManagement's discussion and analysis is set out in this Annual Report.
31. SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by the Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively.
The Directors wish to convey their appreciation to Customers Suppliers Bankers otherStakeholders and specially the employees for their co-operation. The Directors alsoappreciate the confidence reposed in the Management of the Company by its shareholders.
For and on behalf of the Board of Directors
| ||Mukul B. Desai |
| ||CHAIRMAN |
| ||DIN:00015126 |
|Mumbai 28th May 2018 || |