REPORT OF THE BOARD OF DIRECTORS
TO THE SHAREHOLDERS FOR THE YEAR ENDED MARCH 31 2018.
Your Directors are pleased to present the 32nd Annual Report and the AuditedStatement of Accounts for the financial year ended March 31 2018.
The financial performance of the Company for the financial year ended March 31 2018 issummarised below:-
(Rs. in Lacs)
|Particulars ||2017-2018 ||2016-2017 |
|Gross Turnover and Other Income ||211569 ||210686 |
|Net Turnover and Other Income ||207890 ||196866 |
|Profit before Depreciation and Tax ||22723 ||21773 |
|Less: Depreciation on Fixed Assets ||4847 ||4882 |
|Profit before Tax ||17876 ||16892 |
|Less: Provision for Taxes ||6165 ||5046 |
|Profit after Tax ||11711 ||11845 |
|Amount Available for Appropriations ||42404 ||36340 |
|Less: Appropriations: || || |
|i) Interim Dividend ||597 ||597 |
|ii) Final Dividend* ||1045 ||- |
|iii) Total Tax on Dividend ||170 ||50 |
|iv) Transfer to General Reserves ||3885 ||5000 |
|Leaving a Balance to be carried forward ||36707 ||30693 |
|Earnings Per Share (Rs.) ||78.58 ||79.38 |
|Cash Earnings Per Share (Rs.) ||111.06 ||112.09 |
|Book Value per Share (Rs.) ||534.31 ||467.17 |
*The final dividend amounting to ` 1045 lacs is for the financial year 2016-2017.
YEAR IN RETROSPECT
Revenue from operations of your Company has increased by 5.85% over the previous yearto ` 210796 lacs. EBIDTA rose by 4.5% from the previous year to ` 23972 lacs. Profitbefore tax increased by 5.82% over previous year to `?17876 lacs whereas theprofit after tax decreased by 1.14% over the previous year to ` 11711 lacs. The plasticbusiness has achieved a volume and value growth of 2% and 6% respectively.@home - the Companys retail business of lifestyle furniture furnishingand accessories recorded a turnover of ` 21478 lacs for the current financial year andalso achieved EBIDTA of ` 999.59 lacs. The profit before tax of the said business stood at` 440.13 lacs an increase of 38% from the previous year.
The Company proposes to transfer a sum of?` 3884.84 lacs to the General ReserveAccount out of the profits available.
Your Directors are pleased to recommend a Final Dividend of?` 9 per equity share(90%) for the financial year 2017-2018 which is subject to consideration and approval ofthe Shareholders 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 November 10 2017.
The aforesaid dividend pay-out for year under review is in accordance with theCompanys policy on Dividend distribution which is linked to long term growthobjectives of your Company to be met by internal cash accruals. The Dividend DistributionPolicy of the Company can be viewed on the Companys website at the followingweblink:http://www.nilkamal.com/Images/fckUploadedfiles/file/investor/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 ` 2247 lacsfor the financial year 2017-2018.
AWARDS AND CERTIFICATIONS
Your Company has received the following awards/ certifications during the year underreview:
- The Companys Sinnar unit was awarded the "Energy Efficient Plant" byThe Confederation of Indian Industry (CII) at its 18th National Award for Excellence inEnergy Management 2017.
- All the Companys plants are re-certified for the latest ISO 9001:2015 QualityManagement Systems from TUV-SUD Germany.
- The Company has obtained Environment Management Systems certifications ISO 14001:2004from TUV-SUD Germany for all its plants which shows the Companys commitmentand responsibilities towards environmental protection.
- The Company has also obtained Occupational Health and Safety Management Systemscertification OHSAS 18001:2007 from TUV-SUD Germany for all its plants which showsthe Companys commitment to identify control and eliminate the occupational healthand safety risks in all its processes.
- The Company has received the "BIFMA Compliance Certification" from the UKCertification and Inspection Limited for its Home Office Educational and ModularFurniture and Mattress range of products. This certification is an assurance ofmeeting quality standards by the Company during its manufacturing process.
- The Company has obtained the "SEDEX Members Ethical Trade Audit (SMETA)"compliance certification from TUV SUD Germany for its Vasona unit which is an assuranceof responsible and ethical business practices.
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. The Companys CSR policy isplaced on the Companys website at http://www.nilkamal.com/Images/fckUploadedfiles/file/CSR%20POLICY.pdf. The Company has contributed an amount of ` 259.01lacs towards various CSR activities majorly in the fields of education healthcare andenvironmental sustainability in lines with its CSR policy alongwith undertaking otheractivities in terms of Schedule VII of the Companies Act 2013. The said activities werecarried by the Company directly and vide its Implementing Agency viz Nilkamal Foundation -a Section 8 Company.
Further during the year under review the Company had also led a cleanliness drive"Blue for Green" for promoting the Swatchh Bharat Abhiyan around the area of itscorporate office.
The Annual Report on CSR activities is annexed herewith as "Annexure A".
MATERIAL CHANGES AND COMMITMENTS
Except as disclosed elsewhere in this Report no material changes and commitments whichcould affect the Companys financial position have occurred between the end of thefinancial year of the Company and date of this Report.
BUSINESS RESPONSIBILITY REPORT
As required pursuant to the Regulation 34 of the Listing Regulations your Company hasprepared a Business Responsibility Report for the financial year 2017-2018. However as agreen initiative the said Report is hosted on the Companys website which can beaccessed at http://www.nilkamal.com/menudetails/investors-zone/ corporate-governance/358.
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 Report as 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 inthe nature of business of the said companies.
During the year under review the Companys subsidiary companies at SriLanka andAjman have showed subdued performance. Further Nilkamal Foundation a Section 8Company - is the Companys Implementing Agency for undertaking the CSR activities ofthe Company which has contributed towards various institutions/ projects for the saidpurpose. The Companys German Joint Venture Company has displayed a topline growthand showed a satisfactory performance; whereas the US Joint Venture Company has displayeda robust performance 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 nor has it made any investmentscovered under the provisions of Section 186 of the Companies Act 2013.
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 alongwith 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 Company trends in theindustry qualifications experience past performance and past remuneration etc. TheNon-Executive Directors are paid sitting fees for every meeting of the Board and itsCommittees attended by them. The Nomination and Remuneration policy of the Company isavailable on the website of the Company athttp://www.nilkamal.com/Images/fckUploadedfiles/file/investor/Nomination_and_Remuneration_Policy.pdf .
AUDITORS AND AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Act read with applicable Rules framedthereunder M/s. B S R & Co. LLP having ICAI Registration No. 101248W/W-100022 were appointed as the Companys Statutory Auditors at the 28th AnnualGeneral Meeting to hold office for a period of four years till the ensuing Annual GeneralMeeting.
Further pursuant to the provisions of Section 139 they are eligible forre-appointment as Auditors for one more term of five consecutive years from theconclusion of the ensuing Annual General Meeting till the conclusion of the 37th AnnualGeneral Meeting. M/s. B S R & Co. LLP being eligible have expressed their willingnessto such re-appointment as the Statutory Auditors. A certificate from them has beenreceived to the effect that their appointment as Statutory Auditors if made would be inaccordance to the provisions of Sections 139 and 141 of the Companies Act 2013 and Rulesframed thereunder. A resolution seeking their re-appointment forms a part of the Noticeconvening the 32nd Annual General Meeting and the same is recommended for yourconsideration and approval. The notes to accounts referred to in the Auditors' Report areself-explanatory and therefore do not call for any further comments.
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 2017-2018. They being eligible and willing to be re-appointed as Cost Auditors wereappointed as the Cost Auditors of the Company for the financial year 2018-2019 by theBoard of Directors upon the recommendation of the Audit Committee. The resolution seekingratification of the remuneration to the said Cost Auditors for the financial year2018-2019 is set out in the Notice calling the 32nd Annual General 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 year2017-2018. The Secretarial Audit Report is annexed herewith as "Annexure B".
EXTRACT OF ANNUAL RETURN
As required pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12 ofthe Companies (Management and Administration) Rules 2014 the extract of the AnnualReturn in Form MGT 9 is annexed herewith as "Annexure C".
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 the provisions ofthe Companies Act 2013 ("Act") the members at their 29th Annual GeneralMeeting had appointed Ms. Hiroo Mirchandani (DIN: 06992518) as an IndependentNon-Executive Director to hold office for three consecutive years upto the conclusion ofthe 32nd Annual General Meeting of the Company. Ms. Hiroo Mirchandani is eligible forre-appointment as an Independent Non-Executive Director for another term of fiveconsecutive years i.e. upto the conclusion of the 37th Annual General Meeting.
Accordingly pursuant to the provisions of the Act and based on the recommendation ofthe Nomination and Remuneration Committee the re-appointment of Ms. Hiroo Mirchandani fora period of five years is placed for the approval of the Members through a SpecialResolution at the 32nd Annual General Meeting. Further the Company has receiveddeclarations from all the Independent Directors stating that they meet the criteria ofIndependence as given under Section 149 of the Companies Act 2013 and the relevantprovisions of the Listing Regulations. Further in accordance with the provisions ofCompanies Act 2013 and the Articles of Association of the Company Mr. Nayan S. Parekh(DIN: 00037597) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible has offered himself 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 annualaccounts the applicable accounting standards have been followed and that no materialdepartures have been made from the same; (b) that they have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit 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 goingconcern basis; (e) that they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; (f) that they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
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 2017-2018. Further the Consolidated Financial Statements ofthe Company for the financial year 2017-2018 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 the 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.
REPORTING OF FRAUDS
There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed thereunder either to the Company or to the CentralGovernment.
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 thereunder to redress complaints received on sexualharassment. During the financial year under review the Company has not received anycomplaints of sexual harassment.
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 athttp://www.nilkamal.com/Images/fckUploadedfiles/file/Related_Party_Transactions_Policy.pdf.
All the related party transactions are placed before the Audit Committee for theirreview and approval. Further prior omnibus approval of the Audit Committee is obtainedfor related party transactions of repetitive nature and entered into in the ordinarycourse of business at an arms length basis. Further the Company has not enteredinto any material related party transaction during the year under review.
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 inthe newspapers seeking action from the shareholders who have not claimed their dividendsfor past seven consecutive years i.e for final dividend of the financial year ended2009-2010 and thereafter had transferred such unpaid or unclaimed dividends andcorresponding 32113 equity shares held by 263 shareholders to the IEPF Authority onNovember 28 2017. Shareholders /claimants whose shares unclaimed dividend have beentransferred to the aforestated IEPF Suspense Account or the Fund as the case may be mayclaim the shares or apply for refund by making an application to the IEPF Authority inForm IEPF-5 (available on http://www.iepf.gov.in) along with requisite fee as decided bythe IEPF Authority from time to time. Further the Company shall be transferring theunclaimed Dividend for the financial year 2010-2011 to the IEPF Account on or beforeSeptember 26 2018. The Company shall also be transferring the shares on which thedividend has remained unclaimed for a period of seven consecutive years to the IEPFAccount simultaneously on the same date. The Company has sent individual letters to theshareholders for claiming the said dividend and has also advertised the same in thenewspapers in accordance to the Rules. Members are therefore requested to ensure that theyclaim the dividends referred above before they are transferred to the said Fund. Detailsof shares /shareholders in respect of which dividend has not been claimed are provided onour website athttp://www.nilkamal.com/unclaimed/investors-zone/unclaimed-unpaid-dividend/894. Theshareholders are therefore encouraged to verify their records and claim the dividends ofall the earlier seven years if not claimed.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the financial year your Company has complied with applicable SecretarialStandards issued by the Institute of Company Secretaries of India.
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 "AnnexureD".
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 withits relevant provision of the Companies Act 2013 the Annual Report excluding theaforesaid information is being sent to the members of the Company. The said information isavailable for inspection at the Registered Office of the Company during working hours andany member interested in obtaining such information may write to the Company Secretary andthe same will 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 Companys 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 2018 ||Chairman |