Your Directors are pleased to present the 28th Annual Report together withfinancial results for the year ended March 31 2019.
FINANCIAL PERFORMANCE SUMMARY
| || ||rs. in crores |
|FINANCIAL RESULTS ||2018-19 ||2017-18 |
|Revenue from Operations* ||460.67 ||337.96 |
|Earnings before Interest Taxes & Depreciation ||77.26 ||49.25 |
|Less: a) Finance Cost ||11.13 ||7.70 |
|b) Depreciation ||15.79 ||10.83 |
|Add: Other Income ||1.59 ||2.34 |
|Profit before tax ||51.93 ||33.06 |
|Less: Tax Expense ||16.85 ||13.00 |
|Profit for the Period ||35.08 ||20.06 |
|Add: Other Comprehensive Income (Net of Taxes) ||0.10 ||(2.04) |
|Total Comprehensive Income ||35.18 ||18.02 |
|Opening balance in Retained Earnings ||87.24 ||69.21 |
|Add: Share premium ||50.24 ||50.24 |
|Closing balance in Retained Earnings ||172.66 ||137.47 |
* Figures for Revenue from Operations are comparable numbers i.e Excise Duty has beenremoved as same does not form part of Revenue post GST implementation.
Highlights of Performance
During FY19 company put in a significant performance attaining net revenue fromoperations increased of Rs.460.67 crore as against Rs.337.96 crore in the previous year- agrowth of 21.6%.
Operating margins has increased to Rs.77.26 crore from Rs.49.25 crore in previous year.
This performance has rationale when it is factored with high oil prices and otherchallenging business environment both in domestic and international trades.
During the year under review the company has registered an impressive significantgrowth of 51% in net revenue from domestic market. This growth is remarkable when attainedat a time when Consumer sentiments remained suppressed for most part of the year withurban consumers feeling the overhang of inadequate job/income growth.
Despite a gloomy global outlook exports (including incentives) registered a growthof around 28% in value over the export of previous year.
CARE has carried out a credit rating assessment of the Company for both short term andlong term exposures and has re-affirmed rating at 'A-' for long- term bank facilities andassigned 'A Two' rating on the short term bank facilities at 'CARE A2'.
In view of expansion strategies which will facilitate in overall growth and performanceof the company your directors do not recommend any dividend for the year under review.
Material Changes and Commitments
There are no material changes which have occurred subsequent to the close of thefinancial year of the Company to which the Balance Sheet relates and the date of thereport such as
Settlement of tax liabilities;
Operation of patent rights;
Depression in market value of investments;
Institution of cases by or against the Company;
Destruction of any assets or disposal of a substantial part of undertaking;
Changes in capital structure; and
Material changes concerning purchase of raw material and sale of the product.
The paid-up equity share capital as on 31st March 2019 was Rs.8.16 croresdivided into 8166200 equity shares of face value of Rs.10/- each.
A) Issue of equity shares with differential rights
The Company did not issue equity shares with differential rights during the financialyear 2018-19.
B) Issue of sweat equity shares
The Company did not issue sweat equity shares during the financial year 2018-19.
C) Issue of employee stock options
The Company did not issue stock options during the financial year 2018-19.
D) Provision of money by Company for purchase of its own shares by employees or bytrustees for the benefit of employees
The Company does not have a scheme for purchase of its own shares by employees or bytrustees for the benefit of employees.
Maintenance of Cost Records
Pursuant to sub-section (1) of Section 148 of the Companies Act 2013 the maintenanceof Cost Records as specified by the Central Government is not required by the Company andaccordingly such records are not made and maintained by the Company.
During the year under review the Company did not accept any deposits from the publicwithin the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.
Directors and Key Managerial Personnel Change in Directorate
(i) Re-Appointment of Mr.Satpal Garg as an Independent Director for further period of5 years Pursuant to the provisions of the Companies Act 2013 the shareholders at the 23rdAGM of the Company held on 30th September 2014 had appointed Mr. Satpal Gargas Independent Directors to hold office for a term of five consecutive years up to theconclusion of the ensuing Annual General Meeting. His term will expire at the conclusionof the 28th AGM.
Considering his vast knowledge experience expertise and contribution made by himduring his tenure as an Independent Director the Nomination & Remuneration Committeeand the Board of Directors has recommended reappointment of Mr. Satpal Garg asIndependent Director for second term of five consecutive years from the conclusion of theensuing 28th AGM till conclusion of 33rd AGM.
The Company has received declaration from Mr. Satpal Garg that he continues to fulfillthe criteria of independence as prescribed under the provisions of the Companies Act 2013read with the Schedules and Rules issued thereunder as well as Regulation 16 of theListing Regulations (including statutory re-enactment thereof for the time being inforce).
(ii) Appointment of Ms.Purva Kansal who was appointed as an Additional and IndependentDirector on the Board of the Company on 28th September 2018 be and is herebyappointed as a Director and Independent Director of the Company for a period of 5 yearsw.e.f.28th September 2018
Pursuant to the provisions of the Section 149 150 152 and other applicable provisionsof the Companies Act 2013 and the rules made thereunder (including any statutorymodification(s) or re-enactment thereof for time being in force) read with Schedule IV ofthe Companies Act 2013read with the Rules issued thereunder and the Listing RegulationsMs. Purva Kansal (DIN 08205836) as Independent Director on the Board of Directors of thecompany for a period of 5 years w.e.f 28th September 2018.
The Company has received declaration from Ms. Purva Kansal that she fulfills thecriteria of independence as prescribed under the provisions of the Companies Act 2013read with the Schedules and Rules issued thereunder as well as Regulation 16 of theListing Regulations (including statutory re-enactment thereof for the time being inforce).
(iii) Appointment of Mrs. Renu Sood who was appointed as an Additional and IndependentDirector as on 13h June 2019be and is hereby appointed as a Director andIndependent Director of the Company for a period of 5 years w.e.f 13th June2019.
Pursuant to the provisions of the Section 149 150 152 and other applicable provisionsof the Companies Act 2013 and the rules made thereunder (including any statutorymodification(s) or re-enactment thereof for time being in force) read with Schedule IV ofthe Companies Act 2013read with the Rules issued thereunder and the ListingRegulationsMs. Renu Sood (DIN 02280975) as Independent Director on the Board of Directorsof the company for a period of 5 years w.e.f 13th June 2019.
The Company has received declaration from Mrs. Renu Sood that she fulfills the criteriaof independence as prescribed under the provisions of the Companies Act 2013 read withthe Schedules and Rules issued thereunder as well as Regulation 16 of the ListingRegulations (including statutory re-enactment thereof for the time being in force)
(iv) Appointment of Mr. Ashutosh Pradeep Sardesai in place of Mr.Sachin Kumar Bhartiyaas Nominee Director.
In accordance with the provisions of Section 161(3) and other applicable provisions ifany of the Companies Act 2013 (including any statutory modification(s) orre-enactment(s) therefore the time being in force) and the Articles of Association of theCompany Mr. Ashutosh Pradeep Sardesai (DIN 07860331) has been appointed as NomineeDirector of the Company with effect from 27th June 2019 in place of SachinKumar Bhartiya (DIN 02122147). His appointment is by virtue of an agreement withLighthouse Emerging India Investors Limited. In accordance with the provisions of theCompanies Act 2013 and the Articles of Association of the Company the Nominee Directoris not liable to retire by rotation.
(v) Resignation of Mr.Mahavir Singh as an Independent Director w.e.f.13thMarch 2019
Mr.Mahavir Singh Independent Director of the company has resigned from the Board ofDirectors on personal grounds on 13thMarch 2019. He has confirmed that therewere no material reasons other than stated in his resignation letter.
Company has immensely benefitted from his guidance. The Board places on recordappreciation for his thoroughness dedication and commitment.
(vi) Resignation of Mr.Ravinder Krishan as an Independent Director w.e.f.30thJune 2019
Mr.Ravinder Krishan Independent Director of the company has resigned from the Boardof Directors on personal grounds on 30th June 2019. He has confirmed thatthere were no material reasons other than stated in his resignation letter.
Company has immensely benefitted from his guidance. The Board places on recordappreciation for his thoroughness dedication and commitment.
(vii) Retirement by Rotation and subsequent re-appointment
In accordance with the provisions of Section 152 and other applicable provisions ifany of the Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rule 2014 (including any statutory modification(s) or re-enactment(s)therefore the time being in force) and the Articles of Association of the CompanyMr.Manit Gupta (DIN 00889528) and Mr.Sachin Bhatla (DIN 08182443) are liable to retire byrotation at the ensuing AGM and being eligible have offered themselves for re-appointment.
Change in Key Managerial Person
In accordance with the provisions of Section 203 of the Companies Act 2013 thecompany has appointed Mr.Jatin as Company Secretary and Compliance Officer of the Companywith effect from 03rd June 2019 in place of Mr. Sridhar Pentela who hasresigned as Company Secretary and Compliance Officer of the company for pursuing externalopportunities.
During the year under review Eleven Board Meetings and four Audit Committee Meetingswere convened and held the details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.
The details of constitution of the Board and its Committees are given in the CorporateGovernance Report which forms part of this Annual Report.
Remuneration of Directors and Key Managerial Personnel
The remuneration paid to Directors is in accordance with Nomination and RemunerationPolicy formulated in accordance with the provisions of Section 178 of the Companies Act2013 Regulation 19 of the Listing Regulation (including any statutory modification(s) orre-enactment(s) thereof for the time being in force)
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modification(s) or reenactments) thereof for the time being in force) inrespect of Director and Key Managerial Personnel is set out in the Annexure VI
Nomination and Remuneration Policy
The company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Section 178 of the Companies Act 2013 read with Part Dof Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
The Remuneration Policy is approved by the Board of Directors and is uploaded on thewebsite of the Company.
Pursuant to the provisions of the Companies Act 2013 and Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardhas carried out an Annual performance evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination andRemuneration Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
Director's Responsibility Statement
In terms of the provisions of Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 the Directors state that:
a. in preparation of annual financial statements for the financial year ended March 312019 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
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 at the end of the financial year and ofthe profit or loss of the Company for that period;
c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a going concern basis;
e. the proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and
f. the systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
The composition of the Audit Committee is in alignment with provisions of Section 177of the Companies Act 2013 read with the Rules issued thereunder and Regulation 18 of theListing Regulations.
The Boards of Directors at their Meeting held on 30th June 2019 appointedMs.Purva KansalIndependent Director as a member of the Committee in place of Mr. RavinderKrishan who resigned as a Director w.e.f 30th June 2019.
All the members of the Audit Committee are financially literate and have experience inthe financial management.
The committee reviews the report of Internal Auditor every quarter.
Transparency is the cornerstone of the Company's philosophy and all requirements ofCorporate Governance are adhered to both in letter and spirit.
All the Committees of the Board of Directors meets at regular intervals as required interms of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. YourBoard of Directors has taken all necessary steps to ensure compliance with all statutoryand listing requirements. The Directors and key managerial personnel of your Company havecomplied with the approved 'Code of Ethics for Board of Directors and Senior Executives'of the Company.
The Report on Corporate Governance as required under the Listing Obligations andDisclosure Requirements Regulations 2015forms part of and is annexed herewith marked as"Annexure - II" The Auditors' Certificate on compliance with CorporateGovernance requirements is also attached to this Report.
Business Excellence and Quality Initiatives
The Company continues to be guided by the philosophy of business excellence to achievesustainable growth. Customer-focused culture towards building long-term customersrelationships is the key agenda of the Management.
The Company follows the principles of total quality management. The Company continuesto be certified under ISO 9001: 2015 certifications for complete range of laminatesmanufactured.
Auditors and Auditors' Report
M/s Mittal Goel & Associates Chartered Accountants (Firm Registration No. 017577N)are proposed to be appointed as auditors for a period of 5 years commencing from theconclusion of this AGM till the conclusion of the 31st AGM of the Company to be held in2022.
M/s Mittal Goel & Associates have confirmed their eligibility and qualificationrequired under Section 139 141 and other applicable provisions of the Companies Act 2013and Rules issued thereunder (including any statutory modification(s) or re-enactment(s)thereof for the time being in force)
The Auditors' Report for the financial year ended 31st March 2019 onfinancial statements of the Company is a part of this Annual Report. The Auditors' Reportfor the financial year ended 31st March 2019 does not contain anyqualification reservation or adverse remarks.
The company was not required to appoint Cost Auditor for the financial year ended 31stMarch 2019.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s Sanjiv K Goel Practicing Company Secretary to undertake SecretarialAudit of the Company for the financial year 2018-19.
The Secretarial Audit Report in Form MR-3 for the financial year ended March 31 2019is annexed herewith as "Annexure-.I". The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
Company has appointed Mr.Viay Bhatia General Manager as Internal Auditor of theCompany to carry our internal audit of the company. Mr.Vijay Bhatia is CharteredAccountant by qualification. Internal auditor conducts regular audits that are performedas per the annual Audit Plan. The Internal Audit team conducts its audits which arecarried out at factory branches and corporate offices with the objective to evaluate andcontinuously improve the effectiveness of internal controls and governance processes.Additional areas if any identified during the year are taken up as special assignments.The audit findings are reviewed by the Audit
Committee of Directors and corrective action as deemed necessary is taken. Companyalso has laid down procedures and authority levels with suitable checks and balancesencompassing the entire operations of the Company.
Extract of the Annual Report
The extract of the Annual Return of the Company as on 31st March 2019 inForm No. MGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are set out in the "AnnexureIV" of this report.
Related Party Transactions
All related party transactions that were entered during the financial year were in theordinary course of business and on an arm's length basis. There were no materiallysignificant related party transactions entered into by the Company with PromotersDirectors Key Managerial Personnel or other persons which may have a potential conflictwith the interest of the Company.
All related party transactions are placed before the Audit Committee for approval.Prior omnibus approval is also obtained from the Audit Committee for the related partytransactions which are of repetitive nature which can be foreseen and accordingly therequired disclosures are made to the Audit Committee on quarterly basis in terms of theapproval of the Committee.
The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the website of the Company.
Since all related party transactions entered into by the Company were in the ordinarycourse of business and were on an arm's length basis Form AOC - 2 is not applicable tothe Company.
Loans Guarantees or Investments
Pursuant to Section 186 of the Companies Act 2013 Company has not directly orindirectly
a) given any loan to any person or other body corporate other than usual advancesenvisaged in a contract of supply of materials if any
b) given any guarantee or provide security in connection with a loan to any other bodycorporate or person and
c) acquired by way of subscription purchase or otherwise the securities of any otherbody corporate exceeding sixty percent of its paid-up share capital free reserve andsecurities premium account or one hundred percent of its free reserves and securitiespremium account whichever is more.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) encompasses much more than social outreachprogrammes.
In accordance with the requirements of Section 135 of Companies Act 2013 Company hasconstituted a Corporate Social Responsibility Committee.
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed hereto as "Annexure - III"
The Company has contributed Rs.0.54 crore towards various CSR activities during theyear the Company has increased/scaled up its CSR intervention in the areas prescribed inthe Company's CSR policy.
As a socially responsible Company your Company is committed to increase its CSR impactand spend over the coming years with its aim of playing a larger role in India'ssustainable development by embedding wider economic social and environmental objectives.The Company has identified projects where contribution will be meaningful for the economicuplift of the society. Preference was given to allocate and spend higher amount onactivities pertaining to local area and areas around the Company's factories. Howeverbeing early years in implementation of CSR the Company has faced practical problems asregards to co-ordination and consensus amongst the beneficiaries local villagers grampanchayats and other related agencies to carry out the identified projects.
The initiatives taken by the Company will certainly help in deploying larger fundsacross social sectors and achieve rapid scale in utilizing its full CSR budget in thecoming financial years. The Company remains committed to the cause of CSR and will takenecessary steps to fulfill its CSR obligations during the coming financial years. TheCompany is however committed to the cause of CSR and will take necessary steps to fulfillits CSR obligations during the coming financial years.
The Company has proper and adequate system of internal controls which is in line withits size operations and complexity. These systems are verified and tested routinely bycertified auditors as well as internal audits which cover all the key areas of thebusiness. The internal control system ensures measurability and verifiability reliabilityof accounting management efficiency and management information. The system also ensurescompliance with all applicable laws and regulations protection of the Company's assetsand identification of critical risk areas to address them effectively.
During the year under review no fraud was reported by the Auditors of the Company tothe Audit Committee or the Board of directors.
Occupational Health Safety and Environment
Company has effectively deployed policies on Safety Occupational Health &Environment at all locations. It continually focusses on improving the effectiveness ofsystem processes.
During the year under review the Company has conducted various connect initiativeslike Architects' meet Distributors meet Dealers meet to drive brand visibility anddemand generation. This year also the Company budgeted an amount on Branding activitiesto attract new customers to create bigger footprint to enable expansion into new markets.
The Company's properties including building plant machineries etc and stocks areadequately insured against risks.
The equity shares continue to be listed on BSE Limited (BSE). The Company has paidannual listing fee for the financial year 2019-20.
Compliance with Code of Ethics for Board of Conduct for Directors and Senior ManagementPersonnel
All Directors and Senior Management Personnel have affirmed Compliance with the Code ofEthics for Board of Directors and Senior Executives. A Declaration to that effect isattached with the Corporate Governance Report.
Detail of Significant and Material Orders Passed by Regulators or Courts of TribunalsImpacting the Going Concern Status and Company's Operation in Future
There are no significant material orders passed by the Regulators/Courts which wouldimpact the Going Concern status of the Company and its future Operations.
Conservation of Energy and Technology Absorption and Foreign Exchange Earnings andOutgo
Information pursuant to Clause (m) of Sub-Section (3) of Section 134 of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure V".
The Company recognizes that the purpose of Human Resources is to be a catalyst andchange agent.
Over the years there has been a paradigm shift in the approach adopted by EmployeeRelations through different initiatives in various capacities. We drive sustainable growthand have been instrumental in bringing in thought leadership in building strong employeerelations. The Company is focused on building a high performance culture with a growthmindset. Developing and strengthening capabilities for all employees remained Company's anongoing priority. The Company maintains momentum on building speed and simplification inways of working.
Particulars of Employees
The information required pursuant to Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is 'Not Applicable' as no employee is in receipt of remuneration in excess of the limitsprescribed under this Section.
CEO and CFO Certification
Pursuant to Regulation 17(8) read with Pert B of Schedule II of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the CEO and CFO certification is attached with the annual report. The ManagingDirector and CEO and the Chief Financial Officer also provide quarterly certification onfinancial results while placing the financial results before the Board in terms ofRegulation 33 of the (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Board place on record their deep appreciation to employees at all levels for theirhard work dedication and commitment.
The Board also wishes to place on record its appreciation for the support andcooperation the Company has been receiving from its suppliers redistribution stockiestretailers and others associated with the Company as its trading partners.
The Directors also take this opportunity to thank all Investors Clients VendorsBanks Government and Regulatory Authorities and Stock Exchanges for their continuedsupport.
| ||On behalf of the Board |
|Place: Chandigarh ||Jagdish Gupta |
|Date: 26th August 2019 ||Managing Director Chairman |