|BSE: 526689||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE138D01014|
|BSE 00:00 | 02 Aug||Fenoplast Ltd|
|NSE 05:30 | 01 Jan||Fenoplast Ltd|
|BSE: 526689||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE138D01014|
|BSE 00:00 | 02 Aug||Fenoplast Ltd|
|NSE 05:30 | 01 Jan||Fenoplast Ltd|
Your Directors have pleasure in presenting herewith the 44thAnnual Report on thebusiness of Your Company together with the Audited Accounts for the Financial Year ended31st March 2019.
During the year under review your Company has achieved gross revenues amounting to Rs.21208.08 Lakhs as against Rs.27210.44 Lakhs in the previous year.
For the year under review production of PVC LC was 72.31 LLn. Mtrs as against theprevious year's production of 81.70 LLn. Mtrs. Production of PVC Film was 5611.88 MT asagainst the previous year's production of 10095.60 MT.
There has been a decline in the sales for the year 2018-19 in both the segments due tothe prevailing market conditions.
The main reasons of slow down in the PVC Leather Cloth division is due to slow down inthe OEM market and financial liquidity crunch in the domestic market.
The company is working in getting into other market sectors such as shoe industry tobolster the production.
The decline in the PVC Film division is primarily due to the fear of ban on short lifePVC. This ban was actually on one time use and low guage thickness of carry bags.Unfortunately this was misconstrued by the market and until clarification and orders fromthe National Green Tribunal came there was a confusion in the market.
This period was utilised by the Company to re condition it's machines to improveproductivity reduce rejections and this upgradation should also help the company todevelop better value added products.
Furthermore the implementation of GST had it's own effects on the domestic market.
The company is further working on forward integration in this division like thermoforming and PVC insulation tapes .
Your Directors did not recommend any dividend for the year 2018-19
TRANSFER TO RESERVES:
Your Company has not transferred any amount to the general reserve.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL
During the year under review Mr. Haridas Krishna Kumar Director of the Company retiresby rotation and being eligible offered himself for re-appointment.
The Board of Directors based on the performance evaluation and recommendation of theNomination and Remuneration Committee recommend the re-appointment of Mr. B. KamalakarRao Dr. K. Malhar Rao and Mr. P. Niroop as Independent Non-Executive Directors for afurther consecutive period of 5 years with effect from 1st April 2019 in accordance withsection 149 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Board of Directors also recommend to the members the re-appointment of Mr. HaridasNarsaiah as the Non-Executive Non-Independent Director in terms of regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Company has evaluated the performance of Independent Directors Board Committeesand other individual Directors as per the Policy adopted for performance evaluation whichincludes criteria for performance evaluation of the non-executive directors and executivedirectors.
The Shareholders in their meeting held on 27.09.2017 approved the appointment of M/s.Venugopal & Chenoy Chartered Accountants Hyderabad as the Statutory Auditors of theCompany to hold office for a period of five years from the conclusion of the 42nd AnnualGeneral Meeting.
The Board has appointed Mr. Sanisetty Venkata Ramarao of M/s. SVRR & AssociatesCost Accountants for conducting the audit of cost records of the Company for varioussegments for the Financial Year 2019-20 as recommended by the Audit Committee. As requiredunder section 148 and Rule 14 of the Companies (Audit and Auditors) Rules 2014 aresolution is being placed at the ensuing AGM for ratification of remuneration payable tosaid Cost Auditors.
M/s.P.S.Rao & Associates Practicing Company Secretaries were appointed to conductthe Secretarial Audit of the Company for the Financial Year 2018-19 as required underSection 204 of the Companies Act 2013 and Rule 9 thereunder. The Secretarial Audit reportfor the Financial Year 2018-19 forms part of this Report as Annexure - 1. The Boardhas appointed M/s.P.S.Rao & Associates Practicing Company Secretaries as SecretarialAuditors of the Company for the Financial Year 2019-20.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is enclosed herewith as Annexure 2.
RISK MANAGEMENT POLICY
Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations2015 the Company has formulated and adopted a policy on the Risk Management.The Risk Management Policy of the Company is posted on Company's website:www.fenoplast.in. Major risk to the Company apart from the general business risks relatedto the industry is competition from small/ unorganized players.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.
Through Internal Audits the Company monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the audit reports theunits undertake corrective action in their respective areas and strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board periodically.
The Board of Directors of the Company have adopted various policies like Related PartyTransactions policy Whistle Blower Policy such other procedures for ensuring the orderlyand efficient conduct of its business for safeguarding its assets prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
NOMINATION AND REMUNERATION POLICY
A committee of the Board named as "Nomination and Remuneration Committee" hasbeen constituted to comply with the provisions of section 178 Schedule IV of theCompanies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. As recommended by the Committee the Board adopted a policy on Directors' appointmentand remuneration including criteria for determining qualifications positive attributesindependence of a director and other matters to frame proper systems for identificationappointment of Directors & KMPs Payment of RemunerationEvaluation of theirperformance. Nomination and Remuneration Policy of the Company is enclosed herewith as Annexure 3 and is available on Company's website www.fenoplast.in.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES ANDINDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations2015 the Board has carried out the annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit and other Committees.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of Individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany etc. The performance evaluation of the Independent Directors was carried out bythe entire Board. The performance evaluation of the Chairman and the Non-IndependentDirectors was carried out by the Independent Directors. The Directors expressed theirsatisfaction with the evaluation process.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review the company did not fall under the purview of provisionsof section 135 read with Schedule VII of the Companies Act 2013. Hence the company hasnot made any contributions towards CSR Activities.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 Your Directors' confirm that:
i. In preparation of annual accounts for the Financial Year ended 31st March 2019 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;
ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended31st March 2019 and of the profit and loss of the Company for the year;
iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. The Annual Accounts for the year 2018-19 have been prepared on a goingconcern' basis;
v. The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 isannexed herewith as Annexure - 4.The same is available on the Company's websitewww.fenoplast.in
During the year under review Four Board Meetings were held. For further details pleaserefer report on Corporate Governance enclosed herewith.
Committees of Board
Your company has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The constitution of all the Committees is as per the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The details of theConstitution are mentioned in Corporate Governance Report which forms part of this AnnualReport.
Corporate Governance Report
Your Company has complied with the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. A Report on Corporate Governance includingAuditor's Certificate on compliance with the code of Corporate Governance is enclosed asAnnexure 5 to this report.
Management Discussion and Analysis
A brief note on the Management discussion and analysis for the year is enclosed asAnnexure - 6 to this report
In pursuance to the provisions of section 177 of the Companies Act 2013 and Regulation22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a VigilMechanism for Directors and Employees to report genuine concerns has been established.This mechanism enables the Whistle Blower to make protected disclosures to the Chairman ofthe Audit Committee. The Policy on Vigil Mechanism and Whistle Blower Policy may beaccessed on the Company's website at the link: www.fenoplast.in.
Remuneration ratio of the Directors/ Key Managerial Personnel/ Employees:
Statement showing disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is enclosed herewith asAnnexure 7.
PARTICULARS OF EMPLOYEES:
No employee of the Company was in receipt of remuneration during the Financial Year2018-19 in excess of the sum prescribed under Section 197(12) of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Details of the Loans guarantees and investments covered under Section 186 of theCompanies Act 2013 are given in the notes to the Financial Statements pertaining to theyear under review.
Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.
RELATED PARTY TRANSACTIONS:
Related party transactions entered during the Financial Year under review are disclosedin Note No.44E of the Financial Statements of the Company for the Financial Yearended 31st March 2019. These transactions were on arm's length basis and in the ordinarycourse of business. There were no materially significant related party transactions withthe Company's Promoters Directors Management or their relatives which could have had apotential conflict with the interests of the Company. Form AOC-2 containing thenote on the aforesaid Related Party Transactions is enclosed herewith as Annexure8.
The policy on materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board may be accessed on the Company's website.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
2. Issue of Shares (including Sweat Equity Shares) to employees of the Company underany scheme.
3. Neither the Managing Director nor the Whole-time Directors of the Company receivedany remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
5. No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the Financial Year and date of report.
Your Directors further state that during the year under review there were no casesfiled/registered pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Your Directors place on record their appreciation of the continued patronage extendedto the Company by Dealers Customers Suppliers Employees and Shareholders. The trustreposed in your Company by its esteemed customers helped stabilized growth during the yearunder review.
Your Company also acknowledges the support and guidance received from Canara BankState Bank of India and Syndicate Bank other Government agencies during the year underreview and look forward for continuing support.
For and on behalf of the Board of Directors
Place : Secunderabad
Date : 09-08-2019