Your Directors have pleasure in presenting the 33rd Annual Report and Audited FinancialStatements of the Company for the year ended 31st March 2019. The summarized financialresults are given below:
SUMMARISED FINANCIAL RESULTS:
(Rs. In Lakhs)
| ||2018-19 ||2017-18 |
|Sales & other receipts ||1210.57 ||1068.76 |
|Gross Profit/(Loss) before depreciations ||151.34 ||111.81 |
|Less : Depreciation ||17.08 ||2.24 |
|Profit(Loss) from regular Activities ||56.70 ||17.72 |
|Extraordinary items ||0 ||0 |
|Profit /(Loss)before taxation ||56.70 ||17.72 |
|Provision for tax ||5.50 ||0 |
|Profit /(Loss) after taxation ||51.20 ||17.72 |
|Add: Balance carried from earlier year ||(1222.55) ||(3840.27) |
|Balance carried forward to next year ||(1171.36) ||(1222.55) |
During the current year gross receipts of the Company was Rs 1210.57 lakhs against Rs1068.76 lakhs of the previous year and Gross Profit margin increased and Gross Profitamounted to Rs 151.34 lakhs (35.35% higher) to earlier year's 111.81 lakhs depreciationamounted to Rs 17.08 lakhs (against Rs 2.24 lakhs in last year) and Net Profit increasedto Rs 51.20 lakhs as against Rs 17.72 lakhs in last year.
In view of past losses your directors are unable to recommend payment of any dividendfor the year under review.
COURSE OF BUSINESS AND OUTLOOK
The Management's Discussion and Analysis Report as required under the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulation 2015is forming a part of this report and gives the state of affairs of the business of theCompany. The performance of your Company improved in line with the business engineeringwork undertaken in the previous year.
HEALTH SAFETY AND ENVIRONMENT
Top priority continues to be given to environmental protection for all the units of theCompany by keeping emission levels to the minimum possible. Adequate Insurance cover hasbeen taken for properties of the Company including Buildings Plant & MachineriesStocks and other assets.
The report on Management's Discussion and Analysis includes observations on healthsafety and environment compliances by the Company.
All Plant sites of the Company are environment regulations compliant.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 during the year under review. Hence the requirement for furnishingof details of deposits which are not in compliance with the Chapter V of the Act is notapplicable.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3) (m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 are set out as follows.
A. INFORMATION OF CONSERVATION ENERGY
The particulars of additional requirement proposed by the Companies (Amendment) Act1988 and the Companies (disclosures of particulars of the report of the Board ofDirectors) Rules 1988 in respect of the conservation of Energy do not apply to theproducts of your Company.
B. INFORMATION OF TECHNOLOGY ABSORPTION
The Company had initially entered into a Technological Collaboration with BAUKU ofGermany and the Company has deputed their engineers for training at the collaborator'splant. The engineers have been trained in process control production maintenance andother technology aspects. The Company has absorbed closely guarded technology enabling into produce wide range of plastic pipes which require much less raw material than anycomparable product. This has enabled the Company to produce pipes and tanks forapplications such as sewerage schemes effluent disposal projects storage tanks forchemicals etc.
INFORMATION OF FOREIGN EXCHANGE EARNED AND OUTGO
During the year under review your Company has neither spent any amount in foreignexchange nor earned any amount in foreign exchange.
Your Company's main business is "Polymer Processing" and all other activitiesof the company revolve around this main business. As such there are no separate reportablesegments within the Company and hence the segment wise reporting as defined in Ind AS 108- Operating Segments (Accounting Standards 17) is not applicable to the Company.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Your company does not have any subsidiary joint ventures or associate companies.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of your Company during the Financial Yearended 31st March 2019.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year of the Company i.e. 31st March 2019 andthe date of this Directors's Report i.e. 8th August 2019.
Your Company has always the philosophy of conducting its business with due complianceof laws rules regulations and sound internal control systems and procedures. As perClause 'CRs of Schedule V on Annual Report pursuant to Regulations 34(3) of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Company has complied with all the provisions of Corporate Governance and a reporton corporate governance is annexed hereto and forms part of this report. A certificatefrom the auditors of the company regarding compliance of conditions of corporategovernance has been included in this Annual Report for your information. Infuture theCompany intends to implement the non-mandatory recommendations as prescribed in Code ofCorporate Governance.
POLICY ON Directors's APPOINTMENT AND REMUNERATION
Including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees
Policy on Directors's Appointment
Policy on Directors's appointment is to follow the criteria as laid down under theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. Emphasis is given to persons from diversefields or professions.
Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -
There has never been union since incorporation and is not likely to be there inview of cordial relation with workers. As such the Board felt that there is no need toform policy for unionized workers.
Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen is industry driven in which it is operating taking into account the performanceleverage and factors such as to attract and retain quality talent.
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed therein circulars and guidelines issued by CentralGovernment and other authorities from time to time.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The results of the evaluationare satisfactory and adequate and meet the requirement of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year Mr. S. C. Asnotkar (DIN: 01399862) Director of the Company resigned on10th August 2018 due to ill health and the Board noted the same.
Further Ms. Soniya P Sheth (DIN: 02658794) has been proposed for reappointment asManaging Director for 5 years subject to approval of members in the ensuing Annual GeneralMeeting and statement to that effect is annexed with notice.
Further Mr. Ujjawalkumar R. Jha (DIN: 06825669) Mr. Bhaskar T Iyer (DIN: 01711750) andMr. Sacariah Chacko (DIN: 06825623) have been proposed to be reappointed as an IndependentDirectors for second term of 5 years subject to approval of members in the ensuing AnnualGeneral Meeting and statement to that effect is annexed with notice.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in Section 149(6) of the Act and the same has been taken on recordby the Board of Directors of the Company.
Directors's RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(3)(c) of the Companies Act 2013 and on thebasis of explanation and compliance certificate given by the executives of the Companyand subject to disclosures in the Annual Accounts and also on the basis of discussionswith the Statutory Auditors of the Company from time to time we state as under:
That in the preparation of the accounts for the financial period ended 31stMarch 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures ;
That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial period and of the profit or loss of the Company for the period under review;
That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
That the Directors have prepared the annual accounts for the financial periodended 31st March 2019 on a 'going concernRs basis.
The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
The Directors have devised proper system to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
NUMBER OF MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year. For further detailsplease refer report on Corporate Governance in the Annual Report.
DETAILS OF COMMITTEE OF DIRECTORS
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors and Stakeholders Relationship/ Grievance Committee of Directors Number ofmeetings held of each Committee during the financial year 2018-19 and meetings attended byeach member of the Committee as required under the Companies Act 2013 are provided inCorporate Governance Report forming part of the report.
All the recommendations made by the Audit Committee were accepted by the Board.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY
There is no transaction with Related Party which requires disclosure under Section134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014.
There was no Material Related party transaction(s) made with the Company's promotersDirectors Key Managerial Personnel or their relatives as specified under Regulation 23 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
All Related Party Transactions are placed before the Audit Committee for their priorapproval. The Policy on Related Party Transactions as approved by the Board is uploaded onthe Company's website: www.kunststoffeindia.com.
Since all the transaction with Related Parties entered during the Financial Year2018-19 by the Company were in its ordinary course of business and on arm's length basisFORM AOC- 2 is not applicable to the Company.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
There is no Loan given investment made guarantees given and securities provided bythe Company to any entity under Section 186 of the Companies Act 2013.
INTERNAL FINANCIAL CONTROLS
The Company is having in place Internal Financial Controls System. The InternalFinancial Controls with reference to the financial statements were adequate and operatingeffectively.
During the year Directors have constituted a Risk Management Committee which has beenentrusted with the responsibility to assist the board in (a) Overseeing and approving theCompany's enterprise wide risk management framework; and (b) Overseeing that all the risksthat the organization faces such as strategic financial credit market liquiditysecurity property IT legal regulatory reputational and other risks have beenidentified and assessed and there is an adequate risk management infrastructure in placecapable of addressing those risks. A Group Risk Management Policy was reviewed andapproved by the Committee.
The Company manages monitors and reports on the principle risks and uncertainties thatcan impact its ability to achieve its strategic objectives.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance Task Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the Task Force or theChairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policymay be accessed on the Company's website at the link: www.kunststoffeindia.com.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of employees are set out in aseparate statement attached herewith and forming part of the report. (Annexure-I)
CORPORATE SOCIAL RESPONSIBILITY
As per section 135 of Companies Act 2013 all the companies having net worth of Rs 500crores or more or a turnover of Rs 1000 crores or more or a net profit of Rs 5 crores ormore during financial year will be required to constitute corporate social responsibility(CSR) committee of the board of directors comprising three or more directors at least oneof whom will be an independent director.
Aligning with the guidelines the Company has already constituted Corporate SocialResponsibility Committee. The committee is responsible for formulating and monitoring theCSR policy of the Company. As per Section 135 of the Companies Act 2013 the Companyneeds to spend 2% of Average net profit of last three years on CSR activities. During theyear ended 31st March 2019 the Net Profit of the Company is '51.20 Lakhs. As the Companydoes not meet the criteria specified under section 135 it is not require to spend anyamount on CSR Activity.
EXTRACT OF ANNUAL RETURN
Pursuant to the provision of Section 134(3) (a) and 92(3) of the Companies Act 2013read along with Rule 12 of the Companies ((Management & Administration) Rules 2014 anextract of Annual Return as of 31st March 2019 in Form No. MGT-9 is annexed herewith asAnnexure II to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules should be provided in the Annual Reports.None of the Company's employees were covered by the disclosure requirement.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 arenot provided in the Annual Report but will beprovided to shareholders on asking for the same.
Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to themembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours and any member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.The full Annual Report including the aforesaid information is being sent electronically toall those members who have registered their email addresses and is available on theCompany's website.
Electronic trading of the Company's Equity Shares has been made compulsory by theSecurities & Exchange Board of India (SEBI) from 30th October 2000. As on 31st March2019 about 78.58% share holding representing 5414049 Equity Shares of the Company havebeen dematerialized. Your Company has executed agreements with both NSDL and CDSL fordemat of its shares.
INTER-SE TRANSFER OF SHARES AMONG PROMOTERS
During the year there is inter-se transfer of shares among promoters which is carriedout in compliance with the provision of the Companies Act 2013 and rules and regulationof SEBI (LODR) Regulation 2015.
AUDITORS AND AUDITORSRs REPORT
In terms of Section 139 of the Companies Act 2013 ("the Act") and theCompanies (Audit and Auditors) Rules 2014 made thereunder the present StatutoryAuditors of the Company M/s. A. V. Jobanputra & Co. Chartered Accountants (FirmRegistration No. 104314W) will hold office until the conclusion of the ensuing AnnualGeneral Meeting and will not seek re-appointment as his term of five years completed.
The Board of Directors at its meeting held on 8th August 2019 after considering therecommendations of the Audit Committee had recommended the appointment of M/s. AkshayKirtikumar & Associates Chartered Accountants (Firm Registration No.138182W) as theStatutory Auditors of the Company for approval of the members.
Subject to approval of members in the ensuing Annual General Meeting M/s. AkshayKirtikumar & Associates Chartered Accountants (Firm Registration Number.138182W)will be appointed as the Statutory Auditors of the Company to hold office from theconclusion of this 33rd Annual General Meeting (AGM) till the conclusion of the 38thAnnual General Meeting (AGM) i.e. for the Financial Years from 2019-20 to 2023-24.
The notes on financial statement referred to in the AuditorsRs Report are selfexplanatory and therefore do not call for any further explanation. The Auditor's Reportdoes not contain any qualification reservation or adverse remark. IND AS is Applicablefrom FY 2017-18.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read along withRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Board of Directors of the Company had appointed M/s. K. Pratik & AssociatesPracticing Company Secretaries (C.P.No.: 12368) as Secretarial Auditor for the yearending 31st March 2019. The Secretarial Audit Report contains Qualifications Reservationand explanations which are self explanatory.
The Secretarial Auditor has submitted its Report in Form No. MR-3 for the FinancialYear ended 31stMarch 2019 and the same is set out in "Annexure III forming part ofthis Report.
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 receiveany 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.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Yours Directors place on record their deep appreciation of the continued supportreceived from shareholders and bankers.
| ||On behalf of the Board || |
| ||For Kunststoffe Industries Limited || |
| ||Soniya P. Sheth ||U. R. Jha |
| ||Managing Director ||Director |
|Place: Mumbai || || |
|Date: 8th August 2019 || || |
|Registered Office: || || |
|Kiran Building 128 || || |
|Bhaudaji Road || || |
|Matunga (E) || || |
|Mumbai- 400 019. || || |
|CIN: L65910MH1985PLC037998 || || |
|E-mail: email@example.com || || |
|Website: www.kunststoffeindia.com || || |