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National Plywood Industries Ltd.
|BSE: 516062||Sector: Others|
|NSE: N.A.||ISIN Code: INE497C01016|
|BSE 00:00 | 20 Feb||11.21||
|NSE 05:30 | 01 Jan||National Plywood Industries Ltd|
National Plywood Industries Ltd. (NATLPLYWOOD) - Director Report
Company director report
Your Directors have pleasure in presenting the 43rd Annual Report and the AuditedAccounts for the financial year ending on 31st March 2018.
STATE OF COMPANY'S AFFAIRS
The revenue from operations recorded for the financial year ended 31st March 2018 wasH4169.59 lakhs as compared to H4378.29 lakhs in the previous financial year ended 31stMarch 2017 marking a decrease in the turnover by 4.77 per cent. The growth was relativelylower due to the lingering impact of demonetization in November 2016 and implementation ofthe Goods and Service Tax (GST) during the year. Since the economy is slowly picking upagain the Company is taking necessary steps to further increase the turnover and marginsduring the current financial year. The Margherita unit of the Company has contributedsubstantially to the increase in the turnover of the Company. The operations at the HosurUnit of the Company were suspended since 26th February 2018 after the workers illegallystruck work on 27th November 2017 for an exorbitant wage increase and other unreasonabledemands. However the Company has made alternate arrangements for job work of its laminateproducts from Gujarat to maintain regular supply. This arrangement is meeting the demandsof the Company since January 2018. The Company's paramount objective would be to improveits profitability by focusing upon cost saving measures and cutting down unproductivecosts and at the same time strengthening its brand to realize its potential.
The working capital cycle needs improvement and the Company is continuously workingupon this task.
HR policies of the Company are aimed at attracting motivating and retaining employeesat all levels. Relations with employees continue to be cordial and harmonious in theplywood division. However the employees at the Hosur laminate plant have raisedexorbitant and unreasonable demands which the Company is currently suitably addressing.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of the business of the Company.
The paid up Equity Share Capital as on 31st March 2018 was H5.85 Crores. During theyear under review the Company has neither issued any shares or any convertibleinstruments nor has bought back any of its securities.
Due to nominal profit available for appropriation your Directors are unable torecommend any dividend for the year under review.
AMOUNT TRANSFERRED TO INVESTOR EDUCATION & PROTECTION FUND
The provisions of Section 125 of the Companies Act 2013 is not applicable for theCompany as there was no dividend declared and paid in the last financial year.
During the year under review the Company has not accepted deposits falling within theambit of Section 73 of the Companies Act 2013.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review your Company has either made a loan or given anyguarantee or provided any security and/or made investments and thus the compliance ofSection 186 of the Companies Act 2013 is applicable.
SUBSIDIARIES JOINT VENTURES & ASSOCIATE COMPANIES
Your Company has no Subsidiaries Joint Ventures & Associate Companies.
The Company's shares are available for dematerialization with National SecuritiesDepository Ltd. (NSDL) and Central Depository Services (I) Ltd. (CDSL). 74.90 per cent ofthe total shareholding of the Company was held in dematerialized form as on 31st March2018.
Piyush Periwal DIN: 00698796 retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. The term of Piyush Periwalas Vice-Chairman & Managing Director completed on 31st July 2017. As Piyush Periwal ispresently associated with managing the affairs of the Company it was decided to reappointhim as the Managing Director for a further period of 5 years commencing 1st August 2017.The Board decided to re-designate Piyush Periwal as the Chairman & Managing Directorwith effect from 1st August 2017. The Board also decided to revise the remunerationpayable to Piyush Periwal Chairman & Managing Director on the recommendation of theRemuneration Committee.
Laxmi Narain Baheti DIN: 08160915 was appointed as Independent Director of the Companywith effect from 30th May 2018 as per Companies Act 2013 by the Board. NecessaryResolution regarding his appointment has been incorporated in the Notice convening the43rd Annual General Meeting.
Resolution seeking your approval on this item along with profile of the Director andthe terms and conditions are included in the notice convening the Annual General Meeting.
As required under Regulation 34 read with Schedule V of Securities Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinaftercalled "the Listing Regulations") a separate report on Corporate Governance isenclosed as a part of this Annual Report duly certified by Jhunjhunwala & CoChartered Accountants the Statutory Auditors of the Company confirming the compliance ofthe conditions of Corporate Governance.
During the year under review five Board Meetings were convened and held the detailsof which are given in the Corporate Governance Report. The provisions of the CompaniesAct 2013 and SEBI Regulations were adhered to while considering the time gap between twomeetings.
DECLARATIONS BY INDEPENDENT DIRECTORS
Your Company has received declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and under provisions of theListing Regulations.
Independent Directors are familiarized with their roles rights and responsibilities aswell as with the nature of industry and business model through an induction program at thetime of their appointment as Directors and through presentations on economy & industryoverview key regulatory developments strategy and performance which are made to theDirectors from time to time. The terms & conditions of appointment of IndependentDirectors can be accessed at www.nationalplywood.net.
DIRECTORS' RESPONSIBILITY STATEMENT
On the basis of compliance certificates received from the executives of the Company& subject to the disclosures in the annual accounts & also on the basis of thediscussions with the Statutory Auditors of the Company from time to time your Directorsmake the following statements pursuant to Section 134(3)(c) of the Companies Act 2013with respect to Director's Responsibility Statement:
a) that in the preparation of the annual accounts for the year ended 31st March 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b) that such accounting policies have been selected and applied consistently andjudgment and estimates have been made that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at 31st March 2018 and of theprofit 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 statements 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 systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
In compliance with the Companies Act 2013 and Regulation 17 of Listing Regulationsthe Board adopted a formal mechanism for evaluating its performance as well as that of itsCommittees and individual Directors including the Chairman of the Board. The exercise wascarried out through a structured evaluation process covering various aspects of theBoard's functions such as composition of the Board & Committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
The evaluation criteria of the Company can be accessed at
The Company has applied to the Bombay Stock Exchange for revocation of its suspensiondue to non-compliance issues. The BSE replied vide a letter dated 05th March 2018 statingin-principle approval of revocation of suspension subject to some formalities that theCompany is complying with at the earliest.
The Company has applied on 27th March 2018 to CSE for voluntary delisting of the equityshares of the company for which reply is still awaited from the exchange.
NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination & Remuneration Committee hasframed a policy for selection and appointment of Directors and Senior Management alongwith their remuneration. The remuneration paid to the Directors and the Senior Managementis as per the Managerial Remuneration Policy of the Company. Brief details of theManagerial Remuneration Policy are provided in the Corporate Governance Report.
The Nomination & Remuneration Policy of the Company can be accessed at www.nationalplywood.net.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems and procedures designed toeffectively control the operations of its various functions. The internal control systemsare designed to ensure that the financial and other records are reliable for thepreparation of financial statements and for maintaining assets.
Based on the deliberations with Statutory Auditors to ascertain their views on thefinancial statements including the financial reporting system and compliance toaccounting policies & procedures the Audit Committee was satisfied with the adequacyand effectiveness of the internal control and systems followed by the Company.
INDIAN ACCOUNTING STANDARDS (IND AS) 2015
The annexed financial statements comply in all material aspects with Indian AccountingStandards (Ind AS) notified under Section 133 of the Act [Companies (Indian AccountingStandards) Rules 2015] and other relevant provisions of the Act.
The Company has laid down a well-defined Risk Management Policy to identify the risksassociated with the business of the Company on a periodical basis and review theminimization programs to mitigate them. More details are given in the ManagementDiscussion and Analysis report in the Annual Report.
The Risk Management Policy of the Company can be accessed at
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 and Schedule - VII of the Companies Act 2013 Corporate SocialResponsibility (CSR) is not applicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as required under the Listing Regulationsforms part of this Report and is provided under Annexure 1.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
As per the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 every company is required to set up an InternalComplaints Committee to look into complaints relating to sexual harassment at work placeof any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women atWorkplace.
During the financial year ended 31st March 2018 the Company had not received anycomplaint of harassment.
The Prevention of Sexual Harassment Policy of the Company can be accessed at www.nationalplywood.net.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 are providedin Annexure 3 of the Report.
RELATED PARTY TRANSACTIONS
All the related party transactions of the Company are reviewed by the Audit Committeeand presented to the Board on a quarterly basis. These transactions were at arm's lengthbasis and in the ordinary course of business are compliant with the provisions of Section188 of the Companies Act 2013 read with Companies (Meeting of Board and its Powers)Rules 2014 and Listing Regulations. There were no materially significant related partytransactions entered into by the Company. Hence Form AOC-2 under these rules is notapplicable to the Company. The disclosures relating to related parties are explained inNote 25 in the Notes to Accounts attached to the Balance Sheet.
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 behavior. Noperson has been denied access to the Chairman of the Audit Committee.
During the financial year ended 31st March 2018 under review there were no casespertaining to Whistle Blower Policy.
The said policy of the Company can be accessed at
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.
STATUTORY AUDITORS AND AUDITORS' REPORT
The term of appointment of M/s. Jhunjhunwala & Co. Chartered Accountants Kolkata(Firm Registration No. 302169E) as the Statutory
Auditors of the Company will expire at the ensuing Annual General Meeting. As perprovision of Section 139(2) the Company cannot reappoint its retiring auditor if theyhave completed 5 years of consecutive services as the individual auditor of the Company.In view of this the Audit Committee has recommended that M/s. L.N. Malik & Co.Chartered Accountants New Delhi (Firm Registration No. 015992N) be appointed asStatutory Auditor of the Company at the next Annual General Meeting.
M/s. L.N. Malik & Co. Chartered Accountants New Delhi have expressed theirwillingness to accept their appointment as Statutory Auditor of the Company for thefinancial year 201819 and have further confirmed their eligibility for appointment asStatutory Auditor of the Company in accordance with Rule 4 of the Companies (Audit andAuditors) Rules 2014 read with third proviso of Section 139(2) of the Companies Act2013. The Board has recommended to the shareholders their appointment for the financialyear 2018-19 at the ensuing Annual General Meeting.
The report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remarks ordisclaimer given by the Auditors in their Report.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company has appointed M/S. Maheshwari R & Associates (Membership No.5126) Company Secretaries in Practice to undertake the Secretarial Audit of the Company.The Secretarial Audit Report for the financial year ended 31st March 2018 is provided asAnnexure 2. There were no qualifications reservations or adverse remarks given by theSecretarial Auditors of the Company.
PARTICULARS OF EMPLOYEES
No employee of the Company was drawing remuneration of HI .02 crores or more ifemployed for full year or H8.5 lakhs or more per month if employed for part of the year.Therefore the information required under Section 197 of
the Companies Act 2013 read with Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to the Company.
Information required under Section 197 of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areprovided in Annexure 4 to this Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of the Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
A statement giving details of conservation of energy technology absorption and foreignexchange earnings and outgo in accordance with Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is provided in Annexure 5 tothis Report.
The Directors place on record their sincere thanks and appreciation for the support andcooperation received from the financial institutions banks dealers supplierscustomers shareholders various government authorities and other business associates ofthe Company. Your Directors also place on record their appreciation for the dedication andcommitment of all employees in achieving and sustaining excellence in all areas of thebusiness and look forward to the continued support.