REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS FOR THE YEAR ENDED MARCH 31 2019.
Your Directors are pleased to present the 33rd Annual Report and theAudited Statement of Accounts for the financial year ended March 31 2019.
The financial performance of the Company for the financial year ended March 31 2019 issummarised below:-
| || ||(Rs in Lakhs) |
|Particulars ||2018-2019 ||2017-2018 |
|Revenue and Other Income ||232127.53 ||211569.24 |
|Profit before Depreciation Amortisation and Tax ||20832.49 ||22722.46 |
|Less: Depreciation and Amortisation charges ||4964.07 ||4846.85 |
|Profit before Tax ||15868.42 ||17875.61 |
|Less: Taxes ||4745.50 ||6165.06 |
|Profit after Tax ||11122.92 ||11710.55 |
|Add : Other Comprehensive Income ||(122.94) ||105.26 |
|Total Comprehensive Income ||10999.98 ||11815.81 |
|Opening balance in Retained Earnings ||36783.59 ||30677.21 |
|Amount available for appropriation ||47783.57 ||42493.02 |
|i) Interim Dividend ||596.90 ||596.90 |
|ii) Final Dividend ||1343.03 ||1044.58 |
|iii) Total Tax on Dividend ||339.13 ||170.07 |
|Transfer to General Reserve ||- ||3884.84 |
|Closing balance in Retained Earnings ||45589.42 ||36783.59 |
|Earnings Per Share (Rs) ||74.54 ||78.48 |
|Cash Earnings Per Share (Rs) ||107.80 ||110.96 |
|Book Value per Share (Rs) ||592.65 ||534.21 |
YEAR IN RETROSPECT
Revenue from operations of your Company has increased by 9.31 % over the previous yearto Rs 230418.37 lakhs. EBIDTA reduced by 7 % from the previous year to Rs 22412.39lakhs whereas the profit after tax decreased by 5% over the previous year to Rs 11122.92lakhs. The plastic business has achieved a volume and value growth of 7% and 13%respectively.
@home' - the Company's retail business of lifestyle furniture furnishing andaccessories recorded a turnover of ` 21089 lakhs for the current financial year and alsoachieved EBIDTA of Rs 466 lakhs. The profit before tax of the said business stood at Rs126 lakhs.
There is no amount proposed to be transferred to Reserves out of profits of thefinancial year 2018 -19.
Your Directors are pleased to recommend a Final Dividend of Rs 9 per equity share (90%)for the financial year 2018-2019 which is subject to consideration and approval of theShareholders at the ensuing Annual General Meeting of the Company and shall be paidwithin the statutory period to those members whose names appear in the Register of Membersas on the date of book closure. Your Company had also declared interim dividend of ` 4 perequity share (40%) on October 29 2018.
The aforesaid dividend pay-out for year under review is in accordance with theCompany's policy on Dividend Distribution which is linked to long term growth objectivesof your Company to be met by internal cash accruals. The Dividend Distribution Policy ofthe Company can be viewed on the Company's website at the followingweblink:https://nilkamal.com/wp-content/uploads/2019/01/Dividend_Distribution_Policy.pdfThe total outflow on account of the interim dividend and the proposed final dividend(including distribution tax surcharge and education cess) shall amount to Rs 2259 lakhs.
The Company's paid-up Equity Share Capital continues to stand at Rs 14.92 crore as onMarch 31 2019.
During the year the Company has not issued any shares or convertible securities. TheCompany does not have any Scheme for issue of shares including sweat equity shares to theemployees or Directors of the Company.
AWARDS AND CERTIFICATIONS
Your Company has received the following awards/ certifications during the year underreview:
- The Company's Sinnar unit was awarded the "Energy Efficient Plant" by theConfederation of Indian Industry (CII) at its 19th National Award forExcellence in Energy Management 2018.
- Company's Pallets AP & SP series have obtained ISO-8611-1:2011 Compliance issuedby TUV-Nord Germany.
- Further continuing the Company's record of adopting the right practices foroptimising the use of scarce resources and energy conservation this year too your Companyhas bagged the Gold prize at the National Energy Conservation Award for Plastic Sector2018 from BEE-Government of India for its Kharadpada unit in Silvassa.
- The Company has also received India Manufacturing Excellence Award issued from"Frost and Sullivans" for its Silvassa Plant which certifies the enhancedManufacturing and supply chain Excellence.
- Mr. Vamanrai V. Parekh Chairman and Mr. Sharad V. Parekh Managing Director of theCompany were honoured with the Life Time Achievement Award for their immense contributiontowards the plastic industry by The Economic Times in their Polymers Awards 2019 Excellence in Plastics.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is committed to Corporate Social Responsibility and strongly believes thatthe business objectives of the Company must be in congruence with the legitimatedevelopment needs of the society in which it operates. Pursuant to the provisions of theSection 135 of the Companies Act 2013 (the Act) your Company has constituted a CSRCommittee to monitor the CSR activities of the Company details of which are provided inthe Corporate Social Responsibility Report forming part of this Report.
The Company's CSR policy is placed on the Company's websiteathttps://nilkamal.com/wp-content/uploads/2019/01/ CSRPOLICY.pdf The Company hascontributed an amount of Rs 336.05 lakhs towards various CSR activities mainly focused inthe areas of promotion of education & healthcare rural development and providingdrinking water and sanitation facilities along with undertaking other activities in termsof Schedule VII of the Companies Act 2013. The said activities were carried by theCompany directly and vide its Implementing Agency viz Nilkamal Foundation - a Section 8Company.
The Annual Report on CSR activities is annexed herewith as "Annexure A".
MATERIAL CHANGES AND COMMITMENTS
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 date of this report.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT
A separate section on corporate governance practices followed by the Company togetherwith a certificate from the auditors confirming its compliance forms a part of thisAnnual Reportas per SEBI Regulations. Further as per Regulation 34 read with Schedule Vof the Listing Regulations a Management Discussion and Analysis report is annexed to thisreport.
SUBSIDIARIES AND JOINT VENTURES
During the year under review your Company has three direct subsidiaries: NilkamalFoundation in India Nilkamal Eswaran Plastics Private Limited at Sri Lanka and NilkamalCrates and Bins FZE at UAE and one step-down subsidiary: Nilkamal Eswaran MarketingPrivate Limited at Sri Lanka; and two Joint Venture Companies: Nilkamal Bito StorageSystems Private Limited which is the Indo-German Joint Venture and Cambro NilkamalPrivate Limited which is the Indo-US Joint Venture.
There has been no material change in the nature of business of the said companies.
During the year under review the Company's subsidiary companies at Sri Lanka hasexhibited a subdued performance whereas the subsidiary at Ajman showed a decentperformance. Further Nilkamal Foundation a Section 8 Company - is the Company'sImplementing Agency for undertaking the CSR activities of the Company which hascontributed towards various institutions/ projects for the said purpose.
The Company's German Joint Venture Company has showed a top line growth and displayed asatisfactory performance; whereas the US Joint Venture Company has showed a robustperformance thus achieving topline growth as well as profits.
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC-1which forms part of the Annual Report.
In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone and the consolidatedfinancial statements has been placed on the website of the Company www.nilkamal.com.Further as per fourth proviso of the said section audited annual accounts of each of thesubsidiary companies have also been placed on the website of the Companywww.nilkamal.com.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Your Company has not given any Loans or Guarantees covered under the provisions ofSection 186 of the Companies Act 2013.
Further during the year under review the Company has made an additional investment of25370 equity shares of Beta Wind Farm Private Limited for the purpose of availing windenergy from them for the company's unit situated at Hosur in the State of Tamilnadu.
NOMINATION AND REMUNERATION POLICY OF THE COMPANY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy relating to remuneration of the Directors Key Managerial PersonnelSenior Management Personnel and other employees along with the criteria for appointmentand removal of the Directors Key Managerial Personnel and Senior Management Personnel ofthe Company. The Nomination and Remuneration Committee is fully empowered to determine/approve and revise subject to necessary approvals the remuneration of managerialpersonnel after taking into account the financial position of the Companytrends in theindustry qualifications experience past performance and past remuneration etc. TheNon-Executive Directors are paid sitting fees for every meeting of the Board and itCommittees attended by them. The Nomination and Remuneration Policy of the Company isavailable on the website of the Company at the https://nilkamal.com/wp-content/uploads/2019/01/Nomination_and_Remuneration_Policy.pdf.
AUDITORS AND AUDITORS' REPORT
Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. B S R & Co. LLP having ICAIRegistration No. 101248W/ W-100022 were appointed as Statutory Auditors for a second termof five years to hold office from the conclusion of 32nd Annual General Meetingup to the conclusion of the 37th Annual General Meeting of the Company.
The requirement of seeking ratification of the members for continuance of StatutoryAuditors appointment has been withdrawn consequent upon the changes made by the Companies(Amendment) Act 2017 w.e.f. May 7 2018. Hence the resolution seeking ratification ofthe members for their appointment is not being placed at the ensuing Annual GeneralMeeting.
The Statutory Auditor has confirmed their eligibility and submitted the certificate inwriting that they are not disqualified to hold the office of the statutory auditor.Further in terms of the Listing Regulations the Auditors have confirmed that they hold avalid certificate issued by the Peer Review Board of the ICAI.
The Auditors' Report to the Members on the Accounts of the Company for the year endedMarch 31 2019 is a part of the Annual Report. The said Audit Report does not contain anyqualification reservation or adverse remark. During the year 2019 the Auditors had notreported any matter under Section 143(12) of the Act therefore no detail is required tobe disclosed under Section 134(3)(ca) of the Act.
M/s. B. F. Modi and Associates Cost Accountants were appointed as the Cost Auditorsof the Company to carry out audit of the cost records of the Company for the financialyear 2018-2019. They being eligible and willing to be re-appointed as Cost Auditors wereappointed as the Cost Auditors of the Company for the financial year 2019-2020 by theBoard of Directors upon the recommendation of the Audit Committee.
The resolution seeking ratification of the remuneration to the said cost auditors forthe financial year 2019-2020 is set out in the Notice calling the 33rd AnnualGeneral Meeting of the Company.
Mr. Pratik M. Shah Practising Company Secretary was appointed as the SecretarialAuditor of the Company to undertake the Secretarial Audit for the financial year2018-2019. The Secretarial Auditor's report to the members does not contain anyqualificationreservation and adverse remarks and the same is annexed to this report as"Annexure B".
During the FY 2018-2019 your Company has complied with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
EXTRACT OF ANNUAL RETURN
The Extracts of the annual return in Form MGT 9 as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 has been placed on the website of the Company and can be accessed at link https://nilkamal.com/mgt-9/
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 read with the Listing Regulations.
Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) (Amendment) Regulations 2018 consent of the Members by way of SpecialResolution is required for continuation of a Non-Executive and Independent Directorsbeyond the age of 75 years w.e.f. April 1 2019.
Accordingly pursuant to the provisions of the Listing Regulations and based on therecommendation of the Nomination and Remuneration Committee the continuation ofdirectorship Mr. K. Venkataramanan (DIN 00001647) after attaining the age of 75 yearstill the completion of his present term i.e. upto the conclusion of the Thirty FourthAnnual General Meeting to be held in calendar year 2020 is placed for the approval of theMembers through a Special Resolution at the 33rd Annual General Meeting.
Further pursuant to the provisions of the Companies Act 2013 ("the Act")the members at their 28th Annual General Meeting had appointed Mr. Mahendra V.Doshi (DIN 00123243) Mr. Mufazzal S. Federal (DIN 03409798) and Mr. S. K. Palekar (DIN01723670) as an Independent Non-Executive Directors to hold office for five consecutiveyears upto the conclusion of the 33rd Annual General Meeting of the Company.Mr. Mahendra V. Doshi Mr. Mufazzal S. Federal and Mr. S. K. Palekar are eligible for re-appointmentas an Independent Non-Executive Director for the second term of five years from the dateof Annual General Meeting of the Company to be held in the calendar year 2019.
Accordingly pursuant to the provisions of the Act and based on the recommendation ofthe Nomination and Remuneration Committee the re-appointment of Mr. Mahendra V. DoshiMr. Mufazzal S. Federal and Mr. S. K. Palekar for a period of five years is placed for theapproval of the Members through a Special Resolution at the 33rd Annual GeneralMeeting.
During the year under review the Company has by way of postal ballot approved thecontinuation of Directorship of Mr. Vamanrai V. Parekh (DIN 00037519) who is above 75years of age as a Non-Executive Director and also the continuation of the existing tenureof directorship of Mr. K. R. Ramamoorthy (DIN 00058467) who is above 75 years of age asan Independent Director and re-appointment of Mr. K. R. Ramamoorthy as an IndependentDirector for a second term of 5 years from the date of the Annual General Meeting of theCompany to be held in the calendar year 2019.
Further the Company has received declarations from all the Independent Directorsstating that they meet the criteria of independence as given under Section 149 of theCompanies Act 2013 and the relevant provisions of the Listing Regulations.
Further in accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Hiten V. Parekh (DIN: 00037550) Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-election.
The required information of the Directors being re-appointed pursuant to theprovisions of the Listing Regulations forms part of the Annual Report.
There was no change in the composition of the Board of Directors and the Key ManagerialPersonnel except as stated above.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors confirm the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed that no material departures have been made from the same;
(b) that they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
(c) that they have taken proper and sufficient care 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 they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively;
(f) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS
As required under the regulation 34 of the Listing Regulations a cash flow statementis part of the Annual Report 2018-2019. Further the Consolidated Financial Statements ofthe Company for the financial year 2018-2019 are prepared in compliance with theapplicable provisions of the Act Accounting Standards and as prescribed by ListingRegulations. The said Financial Statements have been prepared on the basis of the auditedfinancial statements of the Company its subsidiaries and joint venture companies asapproved by their respective Boards of Directors.
ADEQUACY OF RISK MANAGEMENT SYSTEMS
The Board of Directors have adopted an Enterprise Risk Management Policy framed by theCompany which identifies the risk and lays down the risk minimization procedures. Theseprocedures are periodically reviewed to ensure that executive management controls riskthrough means of a properly defined framework.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower Policy with a view to provide a mechanism forits Directors/employees to approach the Chairman of the Audit Committee in case of anygrievances or concerns related to fraud and mismanagement if any. The details of the saidPolicy is explained in the Corporate Governance Report and also posted on the website ofthe Company.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
An Internal Complaints Committee has been constituted by the Company in line with theprovisions of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules there under to redress complaints received on sexualharassment. During the year the Company received one Complaint of harassment and same hasbeen disposed off after inquiry by Internal Complaints Committee.
During the course of the year initiatives were undertaken to demonstrate the Company'szero tolerance philosophy against discrimination and sexual harassment which includedcreation of comprehensive and easy to understand training and communication. In additionworkshops were also run for the employees to enhance awareness and knowledge of otherbiases that may influence thinking and actions.
RELATED PARTY TRANSACTIONS
Your Company has formulated a Policy on materiality of dealing with related partytransactions and the same has been hosted on its website athttps://nilkamal.com/wp-content/uploads/2019/03/Policyonmaterialityofanddealingwithrelatedparty_290120191.pdf All the related partytransactions are placed before the Audit Committee for their review and approval. Furtherprior omnibus approval of the Audit Committee is obtained for related party transactionsof repetitive nature and entered into in the ordinary course of business at an arms'length basis.
Further the Company has not entered into any material related party transaction duringthe year under review. Accordingly the disclosure of related party transactions asrequired under Section 134(3)(h) of the Act in form AOC-2 is not applicable to yourCompany.
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations 2015 theBoard of Directors has undertaken an annual evaluation of its own performance performanceof its various Committees and individual Directors. The details of the said evaluationshave been mentioned in the Report on Corporate Governance.
TRANSFER TO IEPF
Pursuant to the provisions of the Companies Act 2013 read with the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016("The Rules")the Company had sent individual notices and also advertised in thenewspapers seeking action from the shareholders who have not claimed their dividends forpast seven consecutive years i.e for final dividend of the financial year ended 2010-2011and thereafter had transferred such unpaid or unclaimed dividends and corresponding 2208equity shares held by 22 shareholders to the IEPF Authority on October 3 2018.
Shareholders /claimants whose shares unclaimed dividend have been transferred to theafore stated IEPF Suspense Account or the Fund as the case may be may claim the sharesor apply for refund by making an application to the IEPF Authority in Form IEPF-5(available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPFAuthority from time to time.
Further the Company shall be transferring the unclaimed Dividend for the financialyear 2011-2012 to the IEPF Account on or before October 2 2019. The Company shall also betransferring the shares on which the dividend has remained unclaimed for a period ofseven consecutive years to the IEPF Account simultaneously on the same date. The Companyhas sent individual letters to the shareholders for claiming the said dividend and hasalso advertised the same in the newspapers in accordance to the Rules. Members aretherefore requested to ensure that they claim the dividends referred above before theyare transferred to the said Fund.
Details of shares/shareholders in respect of which dividend has not been claimed areprovided on our website at https://nilkamal.com/unclaimed-unpaid-dividend/. Theshareholders are therefore encouraged to verify their records and claim their dividends ofall the earlier seven years if not claimed.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureC".
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said Rules forms apart of the Annual Report.
Further the disclosures pertaining to remuneration and other details as required underSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 also forms a part ofthe Annual Report.
However having regard to the provisions of Section 136(1) read with its relevantprovision of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the Registered Office of the Company during working hours and any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished without any fee.
Your Company has not accepted Deposits from public falling within the ambit of Section73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014during the year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company's operations in future.
Your Directors wish to place on record their sincere appreciation for the encouragementand co-operation received by the Company from the Bankers State Government AuthoritiesLocal Authorities and its Employees during the year.
| ||For and on behalf of the Board |
|Place: Mumbai ||Vamanrai V. Parekh |
|Date: May 11 2019 ||Chairman |