National Plastic Industries Ltd.
|BSE: 526616||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE233D01013|
|BSE 00:00 | 28 Feb||23.15||
|NSE 05:30 | 01 Jan||National Plastic Industries Ltd|
|Mkt Cap.(Rs cr)||21|
|Mkt Cap.(Rs cr)||21.14|
National Plastic Industries Ltd. (NATLPLASTIC) - Director Report
Company director report
Your Directors are pleased to present the 32nd Annual Report on business andoperations of your company together with the Audited Financial Statements of the Companyfor the year ended March 31 2019.
*Amount in 2018 -2019 and 2017 are as per Indian Accounting Standards
The Directors in the Board Meeting held on May 20 2019 had recommended a finaldividend amounting to Re.1 per equity share subject to approval by the members in theAnnual General Meeting. Since as per the requirement of Para 12 & 13 of the IND AS 10- Events occurring after the Reporting Period provision for the proposed dividend isdisallowed and the same is not recorded as an appropriation for the FY 2018 - 2019 andwould be recorded on approval in the Annual General Meeting.
COMPANYS OPERATIONAL PERFORMANCE:
The Gross turnover of the company has improved to ' 129.16 Crore from ' 120.68 Crore inlast year registering a growth 7.03%.The growth in gross turnover was happened as thecompany came out with new and innovative range of product.
Your Company has registered lower profit before tax of ' 3.45 Crore as compared to '4.24 Crore in the previous year and net profit after tax of ' 2.23 Crore as compared to'3.25 Crore in previous year.
Your Company performed well during the year by efficiently managing the resourceswhich resulted into improved quality of the products. The Company has endeavored to bringout new & unique moulded furniture for improving the sales of the products. TheCompany 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 2018 -2019. The air-cooler business of the Company was marginal during the year
Your Directors are pleased to recommend a Final Dividend of ' 1 per equity share (10%)(previous year Re. 1 per share) for the financial year 2018 - 2019 which is subject toconsideration and approval of the Shareholders at the ensuing Annual General Meeting ofthe Company and shall be paid within the statutory period to those members whose namesappearing in the Register of Members as on the date of book closure. The total outflow onaccount of Equity Dividend will be '1.09 Crores (inclusive of Tax of ' 0.18 Crores)
SUBSIDIARIES AND JOINT VENTURES:
The Company does not have any Subsidiary Company or Joint Venture.
There was no change in the Company's share capital during the year under review. TheCompany's paid up Equity Share Capital to stand at ' 912.96 lakhs comprising of 9129600equity shares of '10 each as on March 312019.
TRANSFER TO RESERVES
There is no amount proposed to be transferred to Reserves out of profits of thefinancial year 2018 -19. EXTRACT OF ANNUAL RETURN
As required pursuant sub-section (3) of Section 92 of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014 the extract of theAnnual Return as at March 31 2018 forms part of this report as Annexure - 1.
NUMBER OF MEETINGS OF THE BOARD
During the year under review four (4) Board meetings were held. Details of which areas follows:
The maximum interval between any two meetings did not exceed 120 days.
Details of the meetings and the attendance of the Directors are mentioned in theCorporate Governance Report.
Separate Meeting of Independent Directors
A meeting of the Independent Directors of the Company was held on May 29 2018 and thesame was attended by Mr. Dilip Thaker and Mrs. Jyoti Palekar.
Number of Meetings of Committees of the Board of Directors
The Board has established various Committees as a matter of good corporate governancepractice and as per the requirements of the Companies Act 2013:
1. Audit Committee
2. Stakeholders Relationship Committee
3. Nomination and Remuneration Committee
4. Executive Management Committee
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review the Board of your Company is duly constituted inaccordance with the requirements of Companies Act 2013. During the year under review theBoard Comprised of 8 Directors out of which 3 are Executive Directors 1 Non-ExecutiveDirector and 4 Non-Executive Independent Director.
b) Retirement by Rotation:
As per the provisions of the Companies Act 2013 Mr. Paresh Vinod Parekh ExecutiveChairman who retires by rotation at the Annual General Meeting and being eligible offershimself for re-appointment to the Board. His profile details are contained in theaccompanying Notice of the AGM.
c) Regularization of appointment of additional Director:
During the year Mr. Nipun Shah was appointed as additional Director on November 132018 by the Board of Directors till the conclusion of ensuing AGM and was also appointedas Independent Director for a period of five years' subject to approval of members atensuing AGM.
During the year Mr. Purnachandra Rao Dendukuri was appointed as additional Directoron November 13 2018 by the Board of Directors till the conclusion of ensuing AGM and wasalso appointed as Independent Director for a period of five years' subject to approval ofmembers at ensuing AGM.
d) Resignation of Director
During the year Mr. Dilip Thaker resigned as Independent Director of the Company w.e.f.13th November 2018. The Board placed on record its sincere appreciation forvaluable guidance received from Mr. Dilip during his tenure as Director of the Company.
e) Declaration by Independent Directors:
The Company has received declaration from all the Independent Directors of Companyconfirming that they meet with the criteria of Independence as prescribed pursuant to theprovisions of Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
f) Familiarization Program for Independent Directors
The Company has set Familiarization Program for Independent Directors with regard totheir roles rights responsibilities in the Company nature of the industry in which theCompany operates the business model of the Company etc. The details of which areavailable on the website of the Company (www.nationalplastic.com).
g) Board Evaluation
In terms of the provisions of the Companies Act 2013 a structured questionnaire wasprepared after taking into consideration the various aspects of the Board functioning likecomposition of the Board and its committees culture execution and performance ofSpecific duties obligations and governance.
The Independent Directors in their separate meeting held on May 29 2018 evaluated theperformance of the Board the Chairperson and the Non-Independent Directors. The result ofthe evaluation is satisfactory and sufficient and meets the requirements of the Company.
Further the Annual Performance Evaluation was also carried out by the Board for thefinancial year 2018 - 19 in respect of its own performance the evaluation of the workingCommittees Directors through peer evaluation excluding director being evaluated.
h) Key Managerial Personnel
Ms. Malvika Sharma has been appointed as Company Secretary and Compliance Officer w.e.f29th May 2018. Ms. Malvika Sharma resigned as Company Secretary and ComplianceOfficer on 12th April 2019 and Ms. Shraddha Bagwe has been appointed asCompany Secretary and Compliance Officer w.e.f 20th May 2019.
Mr. Paresh Parekh Managing Director; Mr. Ketan Parekh Joint Managing Director; Mr.Harsh Parekh Whole Time Director; Mr. Umesh Shenoy Chief Financial Officer and Ms.Shraddha Bagwe Company Secretary of the Company are the Key Managerial Personnel as perthe provisions of the Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuing compliances with theprovisions
of Section 134(3) read with Section 134(5) of the Companies Act 2013 in thepreparation of annual
accounts for the year ended on March 31 2019 and states that:
i. In the preparation of the annual accounts for the year ended March 312019 theapplicable accounting standards had been followed along with proper explanations relatingto 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 March 31 2019 and of the profits of theCompany for the financial year ended March 31 2019;
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; 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
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
a) 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 Wholetime / 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'scontribution to PF pension scheme medical expenses club fees etc. shall be decided andapproved 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
b) 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). Removal
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.
PARTICULARS OF EMPLOYEES:
None of the employees of the Company were drawing a remuneration exceeding '10200000/- per annum or ' 850000/- per month or part thereof. The informationrequired under Section 197 (12) of the Companies Act 2013 read with Rule 5(2) & (3)of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedby Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016is given 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.
AUDITOR AND AUDITORS REPORT:
a) Statutory Auditor
At the Company's 30th Annual General Meeting held on September 20 2017M/s. R.S. Prabhu & Associates Chartered Accountants (Firm registration No. 127010W)were appointed as Company's Statutory Auditors to hold office till the conclusion of the35th Annual General Meeting subject to ratification by the members at everyAnnual General Meeting until the expiry of the period of original appointment. Howeverthe Companies Amendment Act 2017 (Vide notification dated May 7 2018 issued by Ministryof Corporate Affairs) omits the provision related to Annual Ratification from CompaniesAct 2013 and the requirement of seeking ratification of appointment of statutory auditorsby members at each AGM has been done away with.. Accordingly no such item has beenconsidered in notice of the 32nd AGM of the Company.
The Auditors Report to the shareholders for the year under review contain the belowmentioned qualification.
Qualification: /4s per the information and explanationsprovided to us title deeds of immovable properties and lease agreements of leaseholdproperty are generally in the name of the Company except for freehold land held by theCompany located at Kashimira Mumbai Maharashtra title of which is under dispute.(Gross Block & Net Block as at 31/03/2019 '886603).
Management view: the Company is enjoying full ownership of the property andhas taken effective step to convert the property in his name.
The Notes on Financial Statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.
Reporting of fraud by the Auditor under Section 143(12) of the Companies Act 2013
The Board of Directors states that M/s. R.S. Prabhu & AssociatesCharteredAccountants Mumbai (Firm Reg no. 110639W) Statutory Auditors have not reported of anyfraud involving any amount committed by the Company to the Central Government or to theBoard of Directors or Audit Committee of the Company.
b) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s. Jayshree A. Lalpuria Practicing Company Secretaries to undertake theSecretarial Audit of the Company for the FY 2018 - 2019. The Report of the SecretarialAudit carried out is annexed herewith as Annexure -4.
The Secretarial Audit report as issued by the secretarial auditor in Form MR-3 containfollowing observations or qualifications requiring explanation or comments from the Boardunder Section 134(3) of the Companies Act 2013:
Observation 1: There was delay in few cases for issue of duplicate share certificatesbeyond period of 30 days as required under Regulation 39 of the SEBI(LoDr) 2015.
Remark: In few cases due to holidays or delay in courier the timeline prescribed bySEBI has not be followed.
The Board at its meeting held on May 20 2019 has on the recommendation of the AuditCommittee re-appointed M/s. Jayshree A. Lalpuria Practicing Company Secretaries asSecretarial Auditor for conducting Secretarial Audit of the Company for the FY 2019-2020.
c) Cost Auditor
M/s. N. Ritesh & Associates Cost Accountants are appointed as the Cost Auditorsof the Company under Section 148 of the Companies Act 2013 to conduct the audit of thecost records of the Company for the financial year 2018- 2019. Necessary resolution forratification of the remuneration to be paid to the Cost Auditors is incorporated in theNotice of the ensuing Annual General Meeting for approval of members.
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's length basis and were in the ordinary course of business. There were 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. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2is not applicable.
All Related Party Transactions as required under Indian Accounting Standards AS-24 arereported in Note 32 Notes to Accounts of the financial statements of the Company.
All related party transactions were placed before the Audit Committee and the Board forapproval.
The compliance with the provisions of Corporate Governance under the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 has been applicable to theCompany in the financial year 2018 - 2019. Hence the Report on Corporate Governance asstipulated under Regulation 33 (1) (e) read with Schedule IV of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 has been applicable to theCompany which is integral part of this Report. The Company is committed to maintain thehighest standards of Corporate Governance and adhere to the Corporate Governancerequirements set out by the Securities and Exchange Board of India (SEBI). The requisitecertificate from the Secretarial Auditors of the Company confirming compliance with theconditions of Corporate Governance is attached to the Report on Corporate Governance.
MANAGEMENTS 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 under review.
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 2018-19 andhence no complaints are outstanding as on March 31 2019 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'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 read with Rule 8(3) of Companies (Accounts) Rules 2014 form part ofthis report and are set out in the Annexure - 5 to this 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 has adequate internal financial control procedures commensurate with itssize and nature of business. The Company has appointed Internal Auditors comprisingprofessional Chartered Accountants who periodically audit the adequacy and effectivenessof the internal controls laid down by the management and suggest improvements. Based onthe audit observation and recommendations follow ups and remedial measures are beingtaken including review and increase in scope if necessary.
The Audit Committee of the Board of Directors periodically reviews the audit plansinternal audit reports and adequacy of internal controls. As a matter of proactiveplanning the Board has also constituted an Audit Committee which meets periodically toreview the financial performance and the accuracy of financial records. The managementduly considers and takes appropriate action on the recommendations made by the InternalAuditors Statutory Auditors and the Audit Committee of the Board of Directors.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the financial year your Company has complied with applicable SecretarialStandards issued by Institute of Company Secretaries of India.
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
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'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. Issue of equity shares with differential rights as to dividend or voting orotherwise.
e. No significant material orders were passed by the Regulators or Courts or Tribunalswhich impacts the going concern status and Company operations in the future.
The Company has paid the Annual Listing fees to BSE Ltd. for the Financial Year 2018 -2019. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year under review Your Company has transferred a sum of ' 788600.00/-(Rupees Seven Lakhs Eighty Eight Thousand Six Hundred only) to Investor Education andProtection Fund in compliance with the provisions of Section 124(5) of the Companies Act2013. The said amount represents dividend for the FY 2010 - 2011 which remained unclaimedby the members of the Company for a period exceeding 7 years from its due date of payment.
During the year 2018 - 2019 46397 equity shares in respect of which dividend has notbeen claimed by the shareholders for seven consecutive years for the final dividenddeclared in financial year 2010 - 2011 were transferred to the Investor Education andProtection Fund pursuant to the provisions of Section 124(6) of the Companies Act 2013and the rules there under.
Further the Company shall be transferring the unclaimed Dividend for the financialyear 2011-2012 to the IEPF Account on expiry of seven years.
Your Company has considered and adopted the initiative of going green and minimizingthe impact on the environment. The Company has been circulating the copy of the AnnualReport in electronic format to all those members whose email addresses are available withthe Company. Your Company appeals other Members also to register themselves for receivingAnnual Report/documents in electronic form. The E-Communication Registration Form has beenannexed at the end of the annual report.
AWARDS AND CERTIFICATION
Your Directors take immense pleasure in informing the members that the company hasreceived the below mentioned award/ appreciation during the year:
Received the award of Top Exporter of Plastic Furniture For The Year - 2015 -16 on 21stJuly 2018
Received the award of Second Best Exporter of Plastic Furniture For The Year 2016-17 on21st July 2018.
Your Directors take this opportunity to express their deep and sincere gratitude to thecustomers and investors for their confidence and patronage as well as to the vendorsbankers financial institutions and business associates regulatory and governmentalauthorities for their co-operation support and guidance. Your Directors would also liketo express a deep sense of appreciation for the support extended by the Company's unionsand commitment shown by the employees in its continued robust performance on all fronts.