Your Directors take pleasure in presenting the 24th Annual Report along withthe Audited Statement of Accounts of the Company for the year ended March 312018.
The financial performance of the Company for the financial year ended March 312018 issummarized below
(Rs. In Lakhs)
|FINANCIAL RESULTS ||2017-18 ||2016-17 |
|Total Income ||10028.38 ||9938.20 |
|Profit before Depreciation Finance Cost and Tax ||1339.19 ||1529.49 |
|Less : Depreciation Amortisation & Impairment ||147.30 ||95.96 |
|Less : Interest & Finance Cost ||145.77 ||60.82 |
|Profit before Taxation ||1046.12 ||1372.71 |
|Less : Current Tax ||234.20 ||313.18 |
|Deferred Tax ||58.22 ||76.61 |
|Profit after Tax ||753.70 ||982.92 |
|Other Comprehensive Income (net of tax) || || |
|Total Comprehensive Income ||(6.28) ||(2.91) |
|Add : Balance b/f from previous year ||3564.31 ||2634.30 |
|Balance available for appropriation ||4311.73 ||3614.31 |
|Appropriation: || || |
|Balance c/f ||4311.73 ||3614.31 |
|Less : Proposed Dividend / Interim Dividends (p.y.) ||220.01 ||- |
|Less: Dividend Tax ||44.79 ||- |
|Less : General Reserve ||50.00 ||50.00 |
|Balance c/f to Balance Sheet ||3996.93 ||3564.31 |
Figures of FY 2016-17 have been restated as per Ind AS and therefore may not becomparable with financials FY 2016-17 approved by the Directors an disclosed in thefinancial statement of previous year.
REVIEW OF OPERATION (STANDALONE)
Your company revenue from local operations has increased by 13.94% over the previousyear. The local revenue was ' 8437.05 lakhs (Net of Excise/GST) as compared to ' 7405.11lakhs (Net of Excise) in the previous year. This increase was mainly because of higherproduction by existing units.
The exports of the company were down at ' 1160.94 lakhs for the year as compared to '1780.23 lakhs in the previous year. The reduction is mainly due to loss of Latin Americanterritory in favour of overseas subsidiary.
The Company registered operating profit of '1832.54 Lakhs in comparison to ' 1825.75Lakhs in last year marginal increased inspite of increase in raw material price.
Net profit for the year was ' 753.70 lakhs as compared to ' 982.92 lakhs in last year.The main reason was lessor dividend from overseas Joint Venture Company. The Overseas J.Vhad adopted conservative policy on dividend due to its cash outflow on expansionactivities.
Your Company's performance is discussed in detail in the "Management Discussion& Analysis Report."
REVIEW OF OPERATION (CONSOLIDATED)
Your company achieved total revenue (Net) of ' 10533.90 lakhs as against ' 9419.04lakhs in previous year. An increase of 11.83% and net profits at ' 958.54 lakhs ascompared to ' 1050.30 lakhs in previous year.
However please note that due to implementation of IndAS from current year theoperations of overseas Joint Venture Company were consolidated on equity method the samewas consolidated on line to line basis till previous year.
The consolidated financial statement of your Company for the financial year 2017-18 areprepared in compliance with applicable provisions of the Companies Act 2013 read with theRules issued thereunder applicable Accounting Standards and the provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as the "Listing Regulations"). The consolidated financial statement has beenprepared on the basis of audited financial statement as of March 312018 of your Companyand Subsidiary and Joint Venture as on December 312017 as approved by the respectiveBoard of Directors.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA) on February 16 2015 notified that IndianAccounting Standards (Ind AS) are applicable to certain classes of companies from April 12017. Ind AS has replaced the previous Indian GAAP prescribed under Section 133 of theCompanies Act 2013 ("the Act") read with Rule 7 of the Companies (Accounts)Rules 2014. Ind AS is applicable to the Company from April 12017.
The reconciliations and descriptions of the effect of the transition from previous GAAPto Ind AS have been set out in in the notes to accounts in the standalone &Consolidated financial statement.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company. There has been no change in the nature of business of the Company.
AWARDS AND RECOGNITIONS
Your Company won Top Export Award recently declared by PLEX Council of Government ofIndia for its export performance for financial year 2016-17 and top Export Award (Runnerup) for financial year 2015-16.
Your Directors have recommended a final dividend of Rs. 2/- (20%) per equity share forthe financial year ended March 31 2018. The dividend payout is subject to approval ofmembers at the ensuing Annual General Meeting ("AGM").
TRANSFER TO RESERVES
The Company proposes to transfer Rs. 50.00 Lakhs to the General Reserve out of theamount available for appropriations Rs. 4311.73 and an amount of Rs. 3996.93 Lakhs isproposed to be retained in the Profit and Loss Account. The Reserve on standalone basisat the beginning of year were Rs. 4801.67 Lakhs. The Reserve at the end of year is Rs.5284.30 Lakhs.
JOINT VENTURE & SUBSIDIARY COMPANIES
Your company's Joint Venture Company Prima Dee-lite Plastics s.a.r.l. Cameroon WestAfrica has displayed yet another robust performance. The turnover of the company has shown22% growth in comparison with last year. Similarly Net Profits of the company were up by11%.
The subsidiary company Prima Union Plasticos S.A.at Guatemala in its first year ofoperation has displayed subdued performance. However it has a promising future andexpected to performance better in next year.
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-1 isannexed here with 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 its website:www.primaplastics.com . Further Audited FinancialStatement of Subsidiary Company has also been placed on its website:www.primaplastics.com
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. Presently there is no MaterialSubsidiary of the Company.
DISCLOSURE RELATING TO BOARD COMMITTEES AND POLICIES Board of Director
The Company's Board comprises of six members. Shri Bhaskar M. Parekh ExecutiveChairman (DIN-00166520) and Shri Dilip M. Parekh Managing Director (DIN-00166385) andSmt. Hina V. Mehta women director (Non-executive) (DIN-07201194) represents the PromoterGroup of the Company. Further three other Non-Executive Directors includes - Shri MulchandS. Chheda (DIN - 00179932) Shri Krishnakant V. Chitalia (DIN - 00443945) and ShriRasiklal M. Doshi (DIN- 00239580) who are independent in terms of Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and Companies Act2013. The Directors are reputed persons with diverse functional expertise and industryexperience relevant to fulfilling the Company's objectives and strategic goals.
None of the Independent Directors are liable to retire at the forthcoming AnnualGeneral Meeting ("AGM"). All Independent Directors have submitted declarationsthat they continue to meet the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 read with Regulation 16 (1)(b) of SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015.
As per the provisions of the Companies Act 2013 Smt. Hina V Mehta Non-ExecutiveDirector (DIN-07201194) who retires by rotation at the Annual General Meeting and beingeligible offers herself for re-appointment to the Board. Her profile details arecontained in the accompanying Notice of this ("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 enhanceorganizational performance.
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 detailed Remuneration Policy is available on the website of the Company www.primaplastics.com . The level and composition ofremuneration is reasonable and sufficient to attract retain and motivate directors and iswithin the prescribed limits of 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.
The Board of Directors met 4 times during financial year 2017-18. 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.
KEY MANAGERIAL PERSONNELS (KMP)
As on 31st Match 2018 Shri Dilip M. Parekh Managing Director (DIN No.00166385) Shri Manoj O. Toshniwal Chief Financial Officer and Ms. Nidhi M. Shah (w.e.f.14.12.2017) Company Secretary & Compliance Officer are the Key Managerial Personnel'sof your Company 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 Mr. Alok Desai resigned from the post of Company Secretary &compliance officer from 12.08.2017 and in his place Ms. Nidhi Shah was appointed asCompany Secretary & Compliance Officer w.e.f 14.12.2017.
The Board of directors of the Company carried out annual evaluation of BoardCommittees and other individual Directors (including Independent Directors) which includescriteria of performance evaluation of Non-Executive Directors and executive Directors. Astructured questionnaire was prepared after taking into consideration inputs received fromthe Directors covering various aspects of the Board's functioning composition ofCommittees culture execution and performance of specific duties obligations andgovernance in compliance with applicable laws regulation and guideline.
The Independent Directors in their meeting evaluated the performance of the Board theChairperson and the Non-Independent Directors Board evaluated the performance of all theDirectors. The result of the evaluation is satisfactory and adequate and meets therequirements 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 312018 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 312018 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.
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 2017-18.
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 beutilised by the recipient are provided in the standalone financial statement.
Further during the year under review 1) the Company has infused funds amounting to Rs.590.00 lakhs in Subsidiary Company to meet the working Capital demand and 2) grantedguaranty of Rs. 163.47 lakhs to the suppliers of Subsidiary Company.
Except above investment there were no other loans guarantees or investments made bythe Company under Section 186 of the Companies Act 2013 during the year under review.
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. TheCompany had not entered into any contract or transaction with related parties which couldbe considered material in accordance with the provision of the Companies Act 2013. Thepolicy on materiality of related party transactions as approved by the may be accessed onCompany 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 12th August 2017 the shareholders had appointed M/s. Khimji Kunverji& Co. Chartered Accountants (Firm Registration No. 105146W) for a term of 5 yearsi.e. upto the conclusion of 28th Annual General Meeting. M/s. Khimji Kunverji& Co. Chartered Accountants have consented to be the Auditors of the Company. TheAuditors have also confirmed that their appointment is as per the provisions of Section141 of the Companies Act 2013 and rules thereunder.
Further the notes on Financial Statements referred in the Auditors Report are selfexplanatory and do not call for any further comments. There is no qualification or adverseremark in Auditors' report. There is no incident of fraud requiring reporting by theauditors under Section 143(12) of the Companies Act 2013 Secretarial Auditors & theirReport
The Board of Directors have reappointed Shri Sadashiv V. Shet Practicing CompanySecretary to undertake the Secretarial Audit for the financial year 2017-18. TheSecretarial Audit Report for the financial year ended March 312018 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.
INTERNAL FINANCIAL CONTROLS
The Company has in place Internal Financial Control System commensurate with size andcomplexity of its operations to ensure proper recording of financial and operationalinformation and compliance of various internal controls & other regulatory andstatutory compliances. During the year under review no material or serious observationwere received from the Internal Auditors of the Company for inefficiency or inadequacy ofsuch 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.
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 Listing Regulations forms an integral part of this Report. The requisite certificatefrom the Secretarial Auditors of the Company confirming compliance with the conditions ofCorporate Governance is attached to the Report on Corporate Governance.
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.
c) Details relating to deposits covered under chapter V of the Act.
c) Neither the Managing Director nor the Whole Time Director of the Company receivedany remuneration or commission from any of its subsidiary.
d) 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 has been developed and implemented by the Company foridentification of elements of risk if any which in the opinion of the Board may threatenthe existence of the Company. The key elements of the Company's risk management frameworkhave been captured in the Risk Management Policy which details the process foridentifying escalating prioritizing mitigating and monitoring key risk events andaction plans. The assessment of the risks covers Strategy Technology FinancialOperations & 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
A brief report on CSR activities undertaken during the year as required under Section135 of the Companies Act 2013 is annexed as Annexure - E to this Report. During the yearunder review the Company spent Rs. 1300000/- as against its statutory obligation of Rs.1296258/-.
The Company has formulated Whistle Blower Policy with a view to providing a mechanismfor employees to report violations and assure them of the process that will be followed toaddress the reported violation. The Policy also lays down the procedures to be followed bySenior Management for tracking of complaints giving feedback conducting investigationsand taking disciplinary actions. It also provides assurances and guidelines onconfidentiality of the reporting process and protection from reprisal to complainants. TheWhistle Blower Policy is put on the Company's website and can be accessed atwww.primaplastics.com
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made thereunder yourCompany has constituted Internal Complaints Committees. In line with the said provisionsduring the year the Company has not received any complaints with allegations of sexualharassment.
|Workplace sexual harassment complaints received during the year ||2017-18 |
|Number of cases filed ||Nil |
|Disposal through conciliation ||Nil |
|Pending cases ||Nil |
|Number of workshops & awareness programme conducted ||1 |
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.
PARTICULARS OF EMPLOYEES
During the year there was no employee in receipt of remuneration as prescribed in theRule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014. The prescribed particulars of employees as required under Section 197 (12) of theAct 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 Annexure Gand forms part of this report.
The Company's financial discipline and prudence is reflected in strong credit ratingascribed by CRISIL. During the year under review your company's long term rating ismaintained at BBB/Positive and short term rating at A3+.
|Total Bank loan facilities rated ||Rs. 40.00 Crores |
|Long Term Rating ||CRISIL BBB/Positive |
|Short Term Rating ||CRISIL A3+ |
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the applicable provision of the Companies Act and rules thereunder thedividend on equity shares paid in September 2011 which is unclaimed and unpaid for 7 yearswill be due for transfer to IEPF Fund along with the shares on which dividend is unpaid& unclaimed from last seven consecutive years in October 2018. Investors who havenot yet claimed their dividend are requested to contact the Secretarial Team or R&TAgent. The Company is liable to transfer the said shares on expiry of seven years.
Further complying the applicable IEPF rules the Company has already transferred thedividend amount alongwith the shares which are unpaid and unclaimed from last 7 years(till FY 2009-10) to IEPF fund in the last year.
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 (DIN - 00166520)
May 28 2018