Your Directors are pleasured to present the 33rd ANNUAL REPORT together withthe Audited Financial Statements for the Financial Year 2016-17 ended 31stMarch 2017.
1. FINANCIAL RESULTS:
| || ||(Rs. in Lakh) |
|Particulars ||2016-2017 ||2015-2016 |
|Operating Profit (Before Interest & Depreciation) ||164.83 ||82.65 |
|Less: Interest ||153.55 ||124.17 |
|Profit/(Loss) before Depreciation ||11.28 ||(41.52) |
|Less: Depreciation ||6.38 ||6.38 |
|Profit/(Loss) before Exceptional items ||4.90 ||(47.90) |
|Add : Exceptional Items/Profit on sale of Plant & Machinery ||52.82 ||0.06 |
|Profit/ (Loss) Before Tax ||57.73 ||(47.84) |
|Less: Provision for taxation ||11.00 ||- |
|Profit/ (Loss) for the year after Tax ||46.73 ||(47.84) |
|(Debit) Balance brought forward from Previous year ||(1055.18) ||(1007.34) |
|(Debit) Balance carried to Balance Sheet ||(1008.45) ||(1055.18) |
There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2017 and date of this report.
With a view to conserve the resources for the working capital requirement of theCompany the Board of Directors has not recommend any dividend on the Equity Shares forthe year under review ended 31st March 2017.
3. SALES & WORKING RESULTS:
The Company has generated revenue of Rs. 1265.38 lakhs during the year under review ascompared to Rs.91.24 lakh during 2015-16. The Company has earned other income of Rs.93.90lakh during the year under review as compared to Rs.29.05 lakh during 2015-16.
The Profit before Interest and Depreciation during the year 2016-17 was Rs.164.83 Lakhas compared to Profit of Rs.82.65 Lakh during the year 2015-16. As the Company had toprovide for Interest of Rs.153.55 Lakh during the year under review the Profit beforeDepreciation was Rs.11.28 lakh compared with Loss of Rs.41.52 lakh during 2015-16. TheCompany provided Rs.6.38 lakh for Depreciation and therefore Profit before consideringExceptional items stood at Rs.4.90 lakh during the year under review compared to Loss ofRs.47.90 lakh for the year 2015-16. After taking into account Profit on Exceptional itemsof Rs.52.82 lakh the Net Profit for the year under review stood at Rs.46.73 lakh asagainst Net Loss of Rs.47.84 lakh during 2015-16.
4.1 During the year under review the Company was generally regular in payment ofPrincipal and Interest to the Financial Institutions/Banks. The Company is enjoyingWorking Capital Facilities from Mehsana Urban Co-Operative Bank Limited.
4.2 The Income-tax and Sales-tax Assessment of the Company have been completed up toAssessment Year 2014-15 and the Financial Year 2011-12 respectively.
5.1 One of your Directors viz. Ms. Nikita J. Patel retires by rotation in terms of theArticles of Association of the Company. However being eligible offers herself forreappointment.
5.2 Mr. Jayantilal S. Patel has resigned as Managing Director & Director of theCompany w.e.f. 21st November 2016.
5.3 Ms. Payal J. Patel has been elevated as Managing Director of the Company for aperiod of three years w.e.f 21st November 2016.
5.4 The Board of Directors duly met 8 times during the financial year under review.
5.5 The Company has received necessary declaration from each Independent Director ofthe Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet withthe criteria of their independence laid down in Section 149(6) of the Act.
5.6 Formal Annual Evaluation:
The Nomination and Remuneration Committee adopted a formal mechanism for evaluating theperformance of the Board of Directors as well as that of its Committees and individualDirectors including Chairman of the Board Key Managerial Personnel/ Senior Managementetc. The exercise was carried out through an evaluation process covering aspects such ascomposition of the Board experience competencies governance issues etc.
5.7 DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134 of the Companies Act 2013 it is herebyconfirmed:
(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March2017 being end of the financial year 2016-17 and of the profit of the Company for theyear;
(iii) that the Directors had taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors had prepared the annual accounts on a going concern basis.
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
6. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
7. MANAGERIAL REMUNERATION:
REMUNERATION OF DIRECTORS:
|Sr. No. ||Name of the Director & Designation ||Remuneration for the year 2016-17 ||% increase over last year ||Parameters ||Median of Employees Remuneration ||Ratio ||Commission received from Holding/ Subsidiary |
|1. ||Jayantilal S. Patel Managing Director* ||Rs. 116538/- ||N.A. ||Higher responsibility and time involvement due to current expansion & modernisation ||Rs.205150/- ||0.57:1 ||N.A. |
* Jayantilal S. Patel has resigned from the post of Managing Director and Directorw.e.f. 21st November 2016
The Board of Directors has framed a Remuneration Policy that assures the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivateDirectors Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. All the Board Members and Senior Management personnelhave affirmed time to time implementation of the said Remuneration policy.
The Nomination and Remuneration Policy are available on the Company's websitewww.promactplastics.com.
8. KEY MANAGERIAL PERSONNEL :
% INCREASE IN REMUNERATION OF DIRECTORS AND KMP:
|Sr. No. ||Name of the Director & KMP ||Designation ||Percentage Increase (If any) |
|1. ||Mr. Jayantilal S. Patel* ||Managing Director ||N.A. |
|2. ||Mr. Vipul Bhavsar ||CFO ||11.54 |
* Jayantilal S. Patel has resigned from the post of Managing Director and Directorw.e.f. 21st November 2016.
9. PERSONNEL AND H. R. D.:
9.1 INDUSTRIAL RELATIONS:
The industrial relations continued to remain cordial and peaceful.
The relationship between average increase in remuneration and Company's performance isas per the appropriate performance benchmarks and reflects short and long term performanceobjectives appropriate to the working of the Company and its goals.
9.2 PARTICULARS OF EMPLOYEES:
There is no Employee drawing remuneration requiring disclosure under Rule 5(2) ofCompanies Appointment & Remuneration of Managerial personnel) Rules 2014.
10. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT &SECURITIES PROVIDED:
Details of Related Party Transactions and Details of Loans Guarantees and Investmentscovered under the provisions of Section 188 and 186 of the Companies Act 2013respectively are given in the notes to the Financial Statements attached to the DirectorsRs.Report.
All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm's length basis. During the year theCompany had not entered into any transactions with related parties which could beconsidered as material in accordance with the policy of the Company on materiality ofrelated party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at www.promactplastics.com.
11. DEMATERIALISATION OF EQUITY SHARES:
Shareholders have an option to dematerialise their shares with either of thedepositories viz NSDL and CDSL. The ISIN No. allotted is INE818D01011.
12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
The information required under Section 134(3)(m) of the Companies Act 2013 and rule8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy andTechnology Absorption are not applicable as there are no manufacturing activities duringthe year under review. The Company has not earned or spent any foreign exchange during theyear under review.
13. CORPORATE GOVERNANCE AND MDA:
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Report on Corporate Governance ManagementDiscussion and Analysis (MDA) and a certificate regarding compliance with the conditionsof Corporate Governance are appended to the Annual Report as Annexure - A.
14. SECRETARIAL AUDIT REPORT:
Your Company has obtained Secretarial Audit Report as required under Section 204(1) ofthe Companies Act 2013 from M/s. Kashyap R. Mehta & Associates Company SecretariesAhmedabad. The said Report is attached with this Report as Annexure - B. As regardsthe observation of the Auditors the Company is in the process of identifying andappointing Whole-time Company Secretary and also developing functional website of theCompany.
15. EXTRACT OF ANNUAL RETURN:
The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure- C.
The Equity Shares of the Company are listed on Ahmedabad Stock Exchange Limited &BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company haspaid Listing fees up to the year 2017-18.
17. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERSRs.RELATIONSHIP COMMITTEE:
The details of various committees and their functions are part of Corporate GovernanceReport.
The present Auditors of the Company M/s. M. M. Salvi & Co. Chartered AccountsMehsana will retire at the ensuing 33rd Annual General Meeting.
The remarks of Auditors are self explanatory and have been explained in Notes onAccounts.
In terms of Section 139 of the Companies Act 2013 read with Companies (Audit &Auditors) Rules 2014 the Board of Directors has recommended the appointment of M/s. B.M. Modi & Co Chartered Accountants Mehsana as Statutory Auditors of the Company fora period of 5 years to hold office from the conclusion of the ensuing 33rd AGMtill the conclusion of 38th AGM on remuneration to be decided by the Board orCommittee thereof.
The Company has obtained consent from M/s. B. M. Modi & Co Chartered AccountantsMehsana to the effect that their appointment as Auditors of the Company for period of 5years commencing from the Financial Year 2017-18 to 2021-22 if made will be inaccordance with the provisions of Section 139 and 141 of the Companies Act 2013.
The Shareholders are requested to consider and approve the appointment of the StatutoryAuditors of the Company.
The movable and immovable properties of the Company including plant and Machinery andstocks wherever necessary and to the extent required have been adequately insured againstthe risks of fire riot strike malicious damage etc. as per the consistent policy of theCompany.
The Company has not accepted during the year under review any Deposits and there wereno overdue deposits.
18.4 RISKS MANAGEMENT POLICY:
The Company has a risk management policy which from time to time is reviewed by theAudit Committee of Directors as well as by the Board of Directors. The Policy is reviewedquarterly by assessing the threats and opportunities that will impact the objectives setfor the Company as a whole. The Policy is designed to provide the categorization of riskinto threat and its cause impact treatment and control measures. As part of the RiskManagement policy the relevant parameters for protection of environment safety ofoperations and health of people at work and monitored regularly with reference tostatutory regulations and guidelines defined by the Company.
18.5 SUBSIDIARIES/ ASSOCIATES/ JVS:
The Company does not have any Subsidiaries/ Associates Companies/JVs.
18.6 CODE OF CONDUCT:
The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management. All the Board Members and Senior Management personnelhave affirmed compliance with the code of conduct.
18.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
There have been no significant and material orders passed by any regulators or courtsor tribunals impacting the going concern status of the Company and its future operations.
18.8 ENVIRONMENT AND SAFETY:
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
18.9 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.
19. DISCLOSURE OF ACCOUNTING TREATMENT:
In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.
Your Directors express their sincere thanks and appreciation to Promoters andShareholders for their constant support and co-operation. Your Directors also place onrecord their grateful appreciation and co operation received from Bankers FinancialInstitutions Government Agencies and employees of the Company.
| ||For and on behalf of the Board |
|Place : Ahmedabad. ||Miteshkumar A. Patel |
|Date : 20th July 2017 ||Chairman |