Your Directors take pleasure in presenting the 25th Annual Report along withthe Audited Statement of Accounts of the Company for the year ended March 312019.
The Standalone financial performance of the Company for the financial year ended March312019 is summarized below
| || ||(In Lakhs) |
|FINANCIAL RESULTS ||2018-2019 ||2017-2018 |
|Revenue from Operation ||11140.00 ||9638.45 |
|Other Income ||478.45 ||389.93 |
|Total Income ||11618.45 ||10028.38 |
|Profit before Depreciation Finance Cost and Tax ||1136.08 ||1339.19 |
|Less : Depreciation Amortisation & Impairment ||201.04 ||147.30 |
|Less : Interest & Finance Cost ||247.88 ||145.77 |
|Profit before Taxation ||687.16 ||1046.12 |
|Less : Current Tax ||147.36 ||234.20 |
|Deferred Tax ||(6.79) ||58.22 |
|Profit after Tax ||546.59 ||753.70 |
|Other Comprehensive Income (net of tax) ||(3.61) ||(6.28) |
|Total Comprehensive Income ||542.97 ||747.43 |
|Add : Balance b/f from previous year ||3996.92 ||3564.31 |
|Balance available for appropriation ||4539.92 ||4311.73 |
|Appropriation: || || |
|Balance c/f ||4539.92 ||4311.73 |
|Less : Proposed Dividend ||220.01 ||220.01 |
|Less: Dividend Tax ||44.79 ||44.79 |
|Less : General Reserve ||50.00 ||50.00 |
|Balance c/f to Balance Sheet ||4225.12 ||3996.93 |
Review of Operation Standalone
Your company revenue from local operations has increased by 19.26% over the previousyear. The local revenue was र 10110.64 lakhs (Net of GST) as compared to र8477.51 lakhs (Net of GST) in the previous year. This increase was mainly because ofaddition of new products like Road Barriers Industrial Pallets by Unit II at Daman andhigher production by existing units. The exports of the company were down at र1029.35 lakhs for the year as compared to र 1160.94 lakhs in the previous year.
Earnings before Depreciation Finance Cost and Tax for the year was र 1136.08lakhs as compared to र 1339.19 lakhs in the last year. The decrease in EBITA wasmainly due to higher Raw Material Cost.
Your company achieved total revenue (Net) of र 13414.63 lakhs as against र10533.50 lakhs in previous year at a increase of 27.35 % and net profits at र 948.67lakhs as compared to र 950.34 lakhs in previous year.
Your Company's performance is discussed in detail in the Management Discussion &Analysis Report.
JOINT VENTURE & SUBSIDIARY COMPANIES
As at March 312019 the Company is having one Joint Venture Company Prima Dee-litePlastics S.A.R.L. located at Cameroon West Africa which has displayed yet another robustperformance. The turnover of the company has shown 24% growth in comparison with lastyear.
The Company is also having one Subsidiary company Prima Union Plasticos S.A. whichhas performed better than last year and registered marginal profit in its 2018 calendaryear and expected to earn better in current calendar year.
In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries/ Joint Venture Companies is set out in theprescribed form AOC-1 is annexed herewith as Annexure - A.
As per section 136 of the Companies Act 2013 the Annual Report of company containsstandalone & consolidated financial statements and is also available on itswebsite:www.primaplastics.com . Further Audited Financial Statement of Subsidiary Companyhas also been placed on its website: www.primaplastics.com
CASH FLOW & CONSOLIDATED ACCOUNTS
As required under the regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as the "SEBI ListingRegulations") a cash flow statement is part of the Annual Report 2018-2019.Theconsolidated financial statement of your Company for the financial year 2018-19 areprepared in compliance with applicable provisions of the Companies Act 2013 (hereinafterreferred to as the "the Act") read with the Rules issued thereunder applicableAccounting Standards and the provisions of SEBI Listing Regulations. The consolidatedfinancial statement has been prepared on the basis of audited financial statement as ofMarch 312019 of your Company and Subsidiary Company as approved by the Board of Directorsof respective Companies. Consolidated accounts with Joint Venture Company was prepared fortheir Audited Financial Statements as at December 312018.
TRANSFER TO RESERVES
The Company proposes to transfer र 50.00 Lakhs to the General Reserve out of theamount available for appropriations र 4275.12 and an amount of र 4225.12 Lakhsis proposed to be retained in the Profit and Loss Account. The Reserve on standalonebasis at the beginning of year were र 5284.30 Lakhs. The Reserve at the end of yearis र 5562.47 Lakhs.
The Board of Directors of your company is pleased to recommend a dividend of र 1per equity share of the face value of र 10 each (@10%) which is subject toconsideration and approval of the Shareholders at the ensuing Annual General Meeting ofthe Company and shall be payable to those Shareholders whose names appear in the Registerof Members as on the Record Date. The total Dividend on equity shares including DividendDistribution Tax for FY 2019 would aggregate to र 132.30 lakhs resulting in payoutof 19.25% of the Standalone Profit of the Company.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report.
The Company's paid-up Equity Share Capital continues to stand at 1100.05 lakhs as atMarch 312019.
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 RECOGNITIONS
Your Company won Top Export Award declared by PLEX Council of Government of India forits export performance for financial year 2016-17 and top Export Award (Runner up) forfinancial year 2015-16.
The Board of Directors of the Company had adopted a policy for Determining MaterialSubsidiary Company in line with SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Policy is uploaded on the website of the Company www.primaplastics.com. Prima Union Plasticos S.A. Guatemala is Material Subsidiary forFY 2019-20.
DISCLOSURE RELATING TO BOARD COMMITTEES AND POLICIES Board of Director
The Company's Board comprises of seven members. Shri. Bhaskar M. Parekh ExecutiveChairman Shri. Dilip M. Parekh Managing Director and Smt. Hina V Mehta Women director(Non-executive) which represents the Promoter Group of Company and further four otherNon-Executive Directors includes - Shri. Mulchand S. Chheda Shri. Krishnakant V ChitaliaShri. Rasiklal M. Doshi and
Shri. Snehal N. Muzoomdar (Additional Director) who are independent in terms ofRegulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and Companies Act 2013. The Directors are reputed persons with diverse functionalexpertise and industry experience relevant to fulfilling the Company's objectives andstrategic goals.
As per the provisions of the Companies Act 2013 Shri. Bhaskar M Parekh ExecutiveChairman who retires by rotation at the Annual General Meeting and being eligible offershimself for re-appointment to the Board. Him profile details are contained in theaccompanying Notice of the AGM.
During the year Shri. Snehal N. Muzoomdar was appointed as additional Director onJanuary 29 2019 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.
The first term of Shri. Mulchand S. Chheda Shri. Krishnakant V Chitalia and Shri.Rasiklal M. Doshi is expiring on August 12 2019. The Nomination Remuneration Committeeand board has recommended the reappointment of Shri. Mulchand S. Chheda Shri. KrishnakantV Chitalia and Shri. Rasiklal M. Doshi as Independent Directors of the Company for 2ndterm of five years based on evaluation report of Directors.
Further the current term of Shri. Bhaskar M. Parekh Executive Chairman of the Companyand Shri. Dilip M. Parekh Managing Director of the Company are also expiring on August31 2019. The Board based on the recommendation of Nomination & remuneration Committeehas recommended their re-appointed them for a period of three years' subject to approvalof members at ensuing AGM.
The appointment and remuneration of Directors is governed by the Remuneration Policy ofthe Company to serve on the Board for guiding the Management team to enhance organisationperformance.
The committee has received declaration from all the Independent Directors of theCompany confirming they meet the criteria of Independence under the Act and SEBI listingRegulation. Further Company have also take declaration complying various codes andpolicies applicable to Directors.
The Nomination and Remuneration Committee is fully empowered to determine /approve andrevise subject to necessary approvals the remuneration of managerial personnel aftertaking into account the financial position of the Company trends in the industryqualifications experience past performance and past remuneration etc. The Non-ExecutiveDirectors are paid sitting fees for every meeting of the Board and its Audit Committeeattended by them.
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 detailed Remuneration Policy is available on the website of the Companywww.primaplastics.com . The level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors and is within the prescribed limitsof the Companies Act 2013.
The Company periodically discloses details of holding of its promoter group and personsacting in concert in the shareholding pattern and other filings with the Stock Exchange.
Key Managerial Personnels (KMP)
As on March 312019 Shri. Dilip M. Parekh Managing Director (DIN No. 00166385) Shri.Dharmesh R. Sachade (w.e.f. 03.11.2018) Chief Financial Officer and Ms. Nidhi M. ShahCompany Secretary & Compliance Officer are the Key Managerial Personnel's of yourCompany in accordance with the provisions of Sections 2(51) read with 203 of theCompanies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (including any statutory modification(s) or re-enactment(s) for thetime being in force).
During the year Shri. Manoj O. Toshniwal resigned the post of Chief Financial Officerw.e.f. 02.11.2018 and in his place Shri. Dharmesh R. Sachade was appointed as ChiefFinancial Officer w.e.f 03.11.2018 by the Board of Directors.
The Board of Directors met 4 times during financial year 2018-19. The details of themeetings and the attendance of the Directors are mentioned in the Corporate GovernanceReport.
The Board has established various Committees as a matter of good corporate governancepractice and as per the requirements of the Companies Act 2013. The Committees are AuditCommittee Nomination and Remuneration Committee Management Committee Share TransferCommittee Stakeholders' Relationship Committee Internal Complaints Committee and CSRCommittee. The composition terms of reference number of meetings held and businesstransacted by the Committees is given in the Corporate Governance Report.
The Board of directors of the Company work with Nomination Remuneration Committee tolay down the evaluation criteria for the performance of the Chairman the board thecommittees Executive Non-Executive and Independent Directors. A structured questionnairewas prepared after taking into consideration inputs received from the Directors coveringvarious aspects of the Board's functioning composition of Committees culture executionand performance of specific duties obligations and governance in compliance withapplicable laws regulation and guideline.
The Annual Performance Evaluation was carried out for the financial year 2018 - 19 bythe Board in respect of its own performance the evaluation of the working CommitteesDirectors through peer evaluation excluding director being evaluated.
Further The Independent Directors in their separate meeting also evaluated theperformance of the Board the Chairperson and the Non-Independent Directors. The result ofthe evaluation is satisfactory and adequate and meets the requirements of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing compliances with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of annual accounts for the year ended on March 312019 and states that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there has been no material departure;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312019 and of the profit ofthe Company for the year ended on that date;
c) the Directors 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) the Directors have prepared the Annual Accounts on a going concern basis;
e) 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
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS
The Company has in place Internal Financial Control System commensurate with size andcomplexity of its operations to provide reasonable assurance with regard to recording andproviding reliable financial and operational information complying with applicablestatutes safeguarding assets from unauthorized use executing transactions with properauthorization and ensuring compliance with corporate policies. During the year underreview no material or serious observation were received from the Internal Auditors of theCompany for inefficiency or inadequacy of such controls.
Internal Auditors' comprising of professional Chartered Accountants monitor andevaluate the efficacy of Internal Financial Control Systems in the Company its compliancewith operating system accounting procedures and policies at all the locations of theCompany. Based on their report of Internal Audit function corrective actions in therespective area are undertaken and controls are strengthened. Significant auditobservations and corrective action suggested are presented to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this report andprovides details of the overall industry structure economic developments performance andstate of affairs of your Company's internal controls and their adequacy risk managementsystems and other material developments during the financial year 2018-19.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Company has also implemented several best Corporate Governancepractices as prevalent globally. The report on Corporate Governance as stipulated underthe SEBI Listing Regulations forms an integral part of this Report. The requisitecertificate from the Secretarial Auditors of the Company confirming compliance with theconditions of Corporate Governance is attached to the Report on Corporate Governance.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
Particulars of loans given Investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the notes to the standalone financial statement.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All contracts or transactions entered by the Company during the financial year withrelated parties were in the ordinary course of business and on an arm's length basis.However the amount of loan given to Subsidiary in USD is increased as at March 31 2019due to fluctuation in Foreign Exchange rates resulting in Material Related partytransaction as per SEBI Listing Regulations. The policy on materiality of related partytransactions as approved by the board may be accessed on Company website www.primaplastics.com
An omnibus approval has been granted by the Audit Committee of the Board fortransactions which are of a foreseen and repetitive nature with other related parties.Such omnibus approvals are subjected to review and monitored by the Audit Committee on aquarterly basis. Statement containing salient features of the related party transactionsare stated in Annexure - B.
AUDITORS & AUDITORS' REPORT Statutory Auditors & their Report
In accordance with the provisions of Companies Act 2013 at the Annual General Meetingheld on August 12 2017 the shareholders had appointed M/s. Khimji Kunverji & Co.Chartered Accountants (Firm Registration No. 105146W) for a term of 5 years i.e. upto theconclusion of 28th Annual General Meeting. The Auditors have also confirmedthat their appointment is as per the provisions of Section 141 of the Companies Act 2013and rules thereunder. Further the Statutory Auditors M/s. Khimji Kunverji & Co. hasbeen converted into a LLP viz. Khimji Kunverji & Co LLP (Formerly Khimji Kunverji& Co - 105146W) w.e.f May 8 2019 the board took the note of the same.
Further the notes on Financial Statements referred in the Auditors Report areself-explanatory and do not call for any further comments. There is no qualification oradverse remark in Auditors' report. There is no incident of fraud requiring reporting bythe auditors under Section 143(12) of the Companies Act 2013.
Secretarial Auditors & their Report
The Board of Directors had appointed Shri. Sadashiv V Shet Practicing CompanySecretary to undertake the Secretarial Audit for the financial year 2018-19. TheSecretarial Audit Report for the financial year ended March 312019 is annexed herewiththis report as Annexure - C. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT - 9 is annexedherewith as Annexure - D. The same is also available available onwww.primaplastics.com .
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. Issue of equity shares with differential rights as to dividend or voting orotherwise.
b. Issue of shares (sweat equity shares) to employees of the Company under ESOS.
c. Details relating to deposits covered under chapter V of the Act.
d. Neither the Managing Director nor the Whole Time Director of the Company receivedany remuneration or commission from any of its subsidiary.
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.
BUSINESS RISK MANAGEMENT
A Risk Management Policy and framework has been developed and implemented by theCompany for identification of elements of risk if any which in the opinion of the Boardmay threaten the existence of the Company. The key elements of the Company's riskmanagement framework have been captured in the Risk Management Policy which details theprocess for identifying escalating prioritizing mitigating and monitoring key riskevents and action plans. The assessment of the risks covers Strategy TechnologyFinancial Operations & Systems Legal & Regulatory and Human Resources Risks. Theeffectiveness of the Risk Management framework and systems is periodically evaluated bythe Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company believes in the philosophy of giving back to the society. The Company'sprimary focus has been on health care along with ensuring up-lift of the differently abledpersons belonging to the economically challenged and deprived sections of the society. TheCSR Committee has formulated and recommended to the Board CSR Policy indicating activitiesto be undertaken by the Company. The Policy of the Company can be accessed atwww.primaplastics.com
During the year under review the Company spent र 1200070/- as against itsstatutory obligation of र 1634500/-. A brief report on CSR activities undertakenduring the year and note on unspent amount as required under Section 135 of the CompaniesAct 2013 is annexed as Annexure - E to this Report.
PARTICULARS OF EMPLOYEES
During the year there was no employee in receipt of remuneration as prescribed in theRule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. The prescribed particulars of employees as required under Section 197 (12) ofthe Act read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is attached as Annexure - F and forms part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of energy technology absorption foreign exchange earningsand outgo required to be given pursuant to Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as AnnexureG and forms part of this report.
The Company has formulated Whistle Blower Policy with a view to (i) providing amechanism for directors and employees to report their genuine concerns about unethicalbehaviour actual or suspected fraud or violation of the company's code of conduct; (ii)the safeguards available against victimisation and (iii) direct access to the higherlevels of supervisors/the Chairman of the Audit Committee in appropriate or exceptionalcases. The Whistle Blower Policy is put on the Company's website and can be accessed atwww.primaplastics.com .
HEALTH SAFETY & ENVIRONMENT
Your Company gives equal priority to ensuring Health and Safety of its employees andthe Environment. Your Company has a Policy on Health Safety and Environment and hasreceived certification under ISO 14001:2015 Standard for Daman plant during the year underreview.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
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") during the year the Company had transferred unpaid or unclaimeddividends of FY 2010-11 amounting to र 310773/- and corresponding 11705 equityshares held by shareholders whose dividend was unclaimed and unpaid from last sevenconsecutive year to the IEPF Authority.
Further the Company shall be transferring the unclaimed Dividend for the financialyear 2011-2012 to the IEPF Account on expiry of seven years.
Details of date and year of declaration of dividend the unpaid amount lying in theUnpaid Dividend Account in respect of the last seven years due for transfer of suchunpaid amount to the Fund refund process and other details is given under CorporateGovernance Report. Shri. Jayant Bhatt Finance Manager is appointed as Nodal Officer ofthe Company.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
During the financial year your Company has complied with applicable SecretarialStandards issued by Institute of Company Secretaries of India.
The Directors wish to convey their gratitude and appreciation to all of the employeesof the Company at all its locations for their tremendous personal efforts as well as theircollective dedication and contribution to the Company's performance. The Directors wouldalso like to thank the shareholders customers dealers suppliers bankers governmentand all other business associates for their continued support extended to the Company andthe Management.
| ||For and on behalf of the Board of Directors |
| ||Bhaskar M. Parekh |
|Date: May 22 2019 ||(DIN - 00166520) |
|Place: Mumbai ||Executive Chairman |