Your Directors are pleased to present their 5th Annual Report on the business &operations of the Company together with the Audited Statement of Financial Accounts forthe Year ended 31st March 2022.
(Rs in lacs)
| ||For the year ended 31st March 2022 ||For the year ended 31st March 2021 |
|Net Sales ||61675 ||47615 |
|Other Income ||308 ||215 |
|Total Income ||61983 ||47830 |
|EBITDA ||8047 ||6063 |
|Depreciation ||1092 ||837 |
|Financial Expenses ||242 ||147 |
|Profit before Tax ||6713 ||5079 |
|Provision for Taxes ||2033 ||1499 |
|Profit After Tax ||4680 ||3580 |
|Other Comprehensive Income ||(18) ||(20) |
|Total Comprehensive Income ||4662 ||3560 |
During the year under review the Company achieved highest ever Net Sales of H617crores as against H476 crores in the previous year reflecting growth of 30% over theprevious year. The EBITDA for the year was H80 crores as against H61 crores in theprevious year up by 33% over the previous year. After providing for interestdepreciation and tax the profit after tax of the Company also grew by 31% from H36 croresto H47 crores resulting in EPS of H19.57 in the current year.
The Company reported highest ever Net Sales EBITDA and Profit after Tax during theyear as a result of its sustained focus on Customer relationship established distributionnetwork and diverse product portfolio.
As the Indian PVC Pipe market is on its continuous growth trajectory it is projectedto reach ~Rs. 600 billion growing at a CAGR of 11-12% by FY2025. Efforts of the Governmentof India to improve infrastructure and housing and introduce better irrigation facilitiesin agriculture will drive growth of the industry. Other key factors that fuel the demandfor PVC pipes include increase in disposable income high requirement of durable pipes foroil & gas transportation upsurge in demand for durable & cost-effective pipes inindustrial sectors and rise in need for PVC pipes in irrigation projects. The CentralGovernment's allocation of H60000 crore to 'Nal Se Jal'
scheme in the Union Budget 2022 shall also benefit the industry significantly.
The Packaging Industry in India is expected to register a CAGR of ~11 % and reach US$12.27 billion during the period from 2021-2025 and reach US at the back of risingpopulation increasing income levels changing lifestyles increased media penetrationthrough the internet television and growing economy. Heavy investments in foodprocessing personal care and pharmaceutical end-user industries are creating scope forexpansion of the packaging market due to its high impact strength high stiffness andhigh barrier properties. After creation of sizable capacity to cater the double digitdemand now focus comprises completing last mile capacity balancing increasingutilization and enhancing margins.
The Board of Directors of your Company is pleased to recommend a dividend of H1.20 perEquity Share of the face value of H10 each (i.e. @ 12%) payable to shareholders whose nameappears in the Register of members as on book closure / record date.
The dividend if approved by the members would involve a cash outflow of H287 Lakhs.
Your Company has always laid emphasis on its environmental commitment towards thesociety including its customers clients employees workers and public. The Companytakes effective steps to spread the environmental awareness among its employees andmotivates them to work in an environmentally responsible manner. The Company ensurescompliance with all applicable environmental laws at its plants which results inproviding safe and healthy workplaces to its employees.
Company is leader in implementation of initiatives towards Plastic Waste Management byrecycling reprocessing and reusing the plastic waste generated at shop floor as requiredunder guidelines on Extended Producer's Responsibility of Plastic Waste Management Rule(PWMR) 2016 issued under Environmental (Protection) Act 1986 (29 of 1986) videnotification dated 18th March 2016 and amended from time to time.
In addition to complying with all applicable environmental laws and regulationsCompany is committed to:
- 100% recycling of PVC Pipes Rejects/Process Waste in PVC Pipes and Fittings Division
- 100% recycling of Polyethylene film Rejects/Wastage
- Re-processing of Multilayer Plastic Rejects/Wastage for use in other applications.
- Maintaining Zero Liquid Discharge through Effluent Treatment Plant (ETP) fortreatment of waste water and re-use.
- Maintaining for zero air pollution through installation of Gas based thermic fluidheater.
- Adopt the latest environment improvement and management technologies i.e. highefficient emission & effluent control devices for environment conservation.
- Optimum use of the resources by increasing efficiency and implementing the energyconservation and water conservation practices
The Company is responsibly disposing plastic wastes either by re-processing in-house orthrough certified plastic recyclers.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany between the end of the financial year and the date of the report.
Members may additionally note that Board has decided not to proceed with member'sapproval dated 30th September 2021 towards shifting of Registered Office from State ofPunjab to NCT of Delhi. Any further development in this regard shall be appraised in timeto come.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant and material orders passed by any Regulators or Courts orTribunal impacting the going concern status of the Company during the financial year2021-22.
CHANGE IN NATURE OF BUSINESS IF ANY
There is no change in the nature of business in the financial year 2021-22.
DETAILS OF SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES
During the year ended 31st March 2022 there were no Subsidiary Joint Venture andAssociate Company of Prakash Pipes Limited.
AMOUNT CARRIED TO ANY RESERVE (IF ANY)
The Company transferred an amount of H20 Crores to its general reserve.
AMOUNT TRANSFERRED TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to applicable provisions of the Companies Act 2013 ("Act") readwith the Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 ("IEPF Rules") during the financial year under reviewCompany had transferred H95053.20 for the dividend on 79211 shares already transferred toIEPF.
During the year the evaluation of the annual performance of individual directorsincluding the Chairman of the Company and the Independent Directors Board and Committeesof the Board was carried out from time to time under the provisions of the act andrelevant rules and the corporate governance requirements as prescribed under Regulation 17of Listing Regulations 2015 and the circular issued by SEBI with respect to guidance noteon board evaluation.
In a separate meeting of Independent Directors performance of Non IndependentDirectors and performance of the Board as a whole was evaluated.
Further they also evaluated the performance of the Chairman of the Company takinginto account the views of the Executive Directors and Non-executive Directors.
THE BOARD AND COMMITTEES OF THE BOARD AND MEETINGS THEREOF
The Board and Committees of the Board of Directors are constituted in line with theprovisions of the Companies Act 2013 and applicable regulations of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The details of the Meetings of the Board and Committees held during the financial year2021-22 are given in the separate section of Corporate Governance Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 read with rule 6 of theCompanies (Appointment and Qualification of Director) Rules 2014 and Regulation 25(8) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS
In compliance with the requirements of Regulation 25(7) of the Listing Regulations2015 the Company has put in place a Familiarisation Programme for the IndependentDirectors to familiarise them with the Company their roles rights responsibilities inthe Company nature of the industry in which the Company operates and business model ofthe Company etc.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The following persons are the Key Managerial Personnel of the Company as per theprovisions of Section 203 of the Companies Act 2013.
i) Shri Kanha Agarwal Managing Director and Chief Executive Officer
ii) Shri Dalip Kumar Sharma Chief Financial Officer
iii) Shri Sonu Sharma Company Secretary and Compliance Officer
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Shri Vikram Agarwal retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for reappointment.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility has also been an integral part of the Company'sbusiness. The Company's initiatives towards fulfilling its Corporate Social Responsibilityinclude providing food to needy people and safe drinking water facilities around itsplant environmental sustainability and generating employment opportunities for localpeople.
In compliance with the requirements of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directorshave constituted a Corporate Social Responsibility Committee. The details of membership ofthe committee and the meetings held are detailed in the Corporate Governance Reportforming part of this report.
The Annual Report on Corporate Social Responsibility activities is annexed to thisreport as Annexure I.
Corporate Social Responsibility policy of the company is available on the website ofthe company viz. https:// prakashplastics.in /policies
Company has not accepted any deposits during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 (Act) the Board of Directorsto the best of their knowledge and ability confirm that:
I. in the preparation of the annual accounts the applicable standards have beenfollowed and there are no 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 at the end of the financial year and of the profitof the Company for that period
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 have prepared the accounts on a going concern basis
V. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.
VI. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively
AUDITORS & AUDITORS REPORTS
i) Statutory Auditor
M/s Chaturvedi & Co. Chartered Accountants (FRN:302137E) were appointed as theStatutory Auditors of the Company for a period of five years at the 1st Annual GeneralMeeting of the Company upto the conclusion of the 6th Annual General Meeting of theCompany. The Ministry of Corporate Affairs vide notification dated 7th May 2018 hasobliterated the requirement of seeking Members' ratification at every AGM on appointmentof Statutory Auditors during their tenure of five years. The Notes on financial statementreferred to in the Auditors' Report are selfexplanatory and therefore do not call for anyfurther explanation or comments from the Board under section 134(3) of the Companies Act2013.
ii) Secretarial Auditors
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 B K Bohra and Associates Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Secretarial Audit Reports are annexed herewith asAnnexure II in prescribed format MR- 3 as per Companies Act 2013 and under SEBI ListingRegulations.
iii) Cost Auditors
Pursuant to Section 148(1) of the Companies Act 2013 Company is required to maintaincost records as specified by the Central Government and accordingly such accounts andrecords are made and maintained.
Accordingly the Board of Directors in its meeting held on 9th May 2022 has appointedM/s. SKG & Co. (FRN :000418) Cost & Management Accountants on the recommendationof the Audit Committee for auditing the cost records of the Company for the financialyear 2022-23. Appropriate resolution seeking ratification of the remuneration of CostAuditors is included in the Notice convening the 5th AGM of the Company.
CHANGES IN CAPITAL STRUCTURE
During the financial year 2021-22 there is no change in the Authorised and Paid-upCapital structure of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies
Act 2013 if any are given in the notes to the financial statements.
RELATED PARTY TRANSACTIONS
The Company during the financial year entered into contracts or arrangements withrelated parties which were on arm's length basis. These transactions are not falling underthe provisions of Section 188(1) of the Act. All RPT's are placed before the AuditCommittee for review on a quarterly basis. All related party transactions entered duringthe year were in ordinary course of business and on arm's length basis and the same havebeen disclosed under separate section of the Notes to Financial Statements.
No material related party transactions arising from contracts/ arrangements withrelated parties referred to in the Section 188(1) of the Companies Act 2013 were enteredduring the year by the Company. Accordingly the disclosure of related party transactionsas required under Section 134(3) (h) of the Companies Act 2013 and rule 8(2) of theCompanies (Accounts) Rules 2014 in Form AOC-2 is not applicable.
The Policy on materiality of related party transactions and dealing with related partytransactions are available on the Company's website viz. https://prakashplastics.in/policies.
The details of the related party transactions as required under Section 134(3) (h) r/wRule 8 (2) of the Companies (Accounts) Rules 2014 and under Regulation 34(3) & 53(f)Para A of Schedule V of SEBI (LODR) Regulations 2015 are attached as Annexure III.
VIGIL MECHANISM AND WHISTLE BLOWER POLICY
To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behavior in all its operations the Company has adopted voluntarilya 'Whistle Blower Policy'. The details of the Vigil Mechanism and Whistle Blower Policyare available on the website of the Company.
NOMINATION AND REMUNERATION POLICY
For the purpose of selection of any Director the Nomination & RemunerationCommittee identifies persons of integrity who possess relevant expertise experience andleadership qualities required for the position. The Committee also ensures that theincumbent fulfills such other criteria with regard to age and other qualifications as laiddown under the Companies Act 2013 and SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 or other applicable laws. The Board has voluntarily frameda policy for selection appointment/ reappointment and remuneration of Directors &Senior Management which is available on the website of the Company.
Pursuant to the provisions of Section 134 (3) (a) of the Companies Act 2013 draftAnnual Return for the financial year ended 31st March 2022 made under the provisions ofSection 92(3) of the Act is available on the website of the Company i.e.www.prakashplastics.in
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosure pertaining to remuneration and other details required under provisions ofSection 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as annexure IV to thisreport.
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 2014during the financial year 2021- 22 there was no employee drawing remuneration in excess ofthe limits set out in the said rules.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.During the financial year ended 31st March 2022 no complaint pertaining to sexualharassment was received by the Company.
Report on Corporate Governance and Certificate of Practicing Company Secretariesregarding compliance of the conditions of Corporate Governance as stipulated in Part C ofSchedule V of the Listing Regulations 2015 with the Stock Exchanges are enclosed asAnnexure V & V-A and V-B respectively to this report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis on the operations of the Company as prescribedunder Part B of Schedule V read with regulation 34 (3) of the Listing Regulations 2015 isprovided in a separate section in page 8-12
INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company believes that internal control is a prerequisite of the principle ofGovernance and that freedom should be exercised within a framework of checks and balances.The Company has a well-established internal control framework which is designed tocontinuously assess the adequacy effectiveness and efficiency of financial andoperational controls. The management is committed to ensure an effective internal controlenvironment commensurate with the size and complexity of the business which provides anassurance on compliance with internal policies applicable laws regulations andprotection of resources and assets.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
As required under the provisions of section 134 of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 a statement showing the informationrelating to Conservation of Energy Research and Development Technology
Absorption and Foreign Exchange Earning and Outgo annexed as Annexure VI.
Your Directors wish to thank all stakeholders employees and business partners andCompany's bankers for their continued support and valuable co-operation. The Directorsalso wish to express their gratitude to investors for the faith that they continue torepose in the Company.
| || ||By Order of the Board |
| ||Kanha Agarwal ||Vikram Agarwal |
|Date: 9th May 2022 ||Managing Director & CEO ||Director |
|Place: New Delhi ||DIN:06885529 ||DIN: 00054125 |