Your Directors are pleased to present the 31st Annual Report along with the AuditedFinancial Statements for the year ended March 31 2020.
FINANCIAL SUMMARY AND HIGHLIGHTS
A summary of the Company's financial results for the Financial Year 2019-20 is asunder: ('in lacs)
|PARTICULARS ||2019-20 ||2018-19 |
|Revenue ||3037.32 ||3238.86 |
|Profit before Exceptional Item and Tax ||260.98 ||258.89 |
|Profit After Tax ||197.83 ||218.69 |
DIVIDEND AND RESERVE
With a view to current situation due to COVID pandemic and Company's performance yourDirectors have not recommend a dividend for the fiscal year ended on 31st March 2020.
During the year under review your Company has not transferred any sum to the GeneralReserve. PERFORMANCE
The Company achieved operating revenue of ' 2837.01 Lacs and total revenue of '3037.32Lacs as compared to ' 2984.43 Lacs and '3238.86 Lacs last year. Profit before tax is '260.98 Lacs and profit after tax stands at ' 197.83 Lacs during the year under review asagainst ' 258.89 Lacs and ' 218.69 Lacs respectively in the previous year.
The operations of the Company during the year was below expectations on the domesticfront whereas it was much better in the international market as compared to the previousyear.
The Company's PPSF plant and WTG located in Gujarat are operating satisfactorily.
The paid up capital in the previous year was ' 442.23 lacs which was reduced as aresult of buy back during the year to ' 394.41 Lacs as on 31/3/2020 consisting of3944136 numbers of Equity Shares of ' 10/- each. During the year under review theCompany has not issued any bonus shares equity shares neither any right shares withdifferential voting rights etc. nor granted any stock options or sweat equity.
APPOINTMENT/REAPPOINTMENT/CESSATION OF DIRECTORS/ KMP
The following Directors / KMP were appointed/ reappointed / resigned during the year:
Shri Pratip Patel (PAN AWOPP1911H) resigned w.e.f 30th November 2019
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Independent Directors have carried out an evaluation of the Board as well asevaluation of the working of its Audit and Nomination & Remuneration Committee. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.
SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY
Please refer Form AOC 1 at "Annexure A".
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors and KMP and also decides theirremuneration. The Remuneration Policy is spelt out in the Corporate Governance Report.
The Company continued to face strong headwinds in the domestic market whereas there wascertain improvement on the exports front. Continuous endeavor is in place by themanagement to evaluate and reduce expenses of the Company wherever practical for permanentlong term financial benefits. This has helped the Company vastly in fighting the currentuncertain situation. The Company has in the past kept surplus funds invested prudentlywithout any undue risk so as to ensure safety and liquidity of the funds.
The Company continues to be committed to maintain the highest standards of CorporateGovernance and adhere to all requirements as set out by law. The report on CorporateGovernance as stipulated under SEBI (LODR) Regulations 2015 forms an integral part ofthis Report. The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is attached to the report onCorporate Governance.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee has formulated and recommended tothe Board a CSR Policy indicating the activities to be undertaken by the Company whichhas been approved by the Board and hosted on the Company's website.
The Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES SECURITIES OR INVESTMENTS
The Company has not given any guarantees or securities covered under the provisions ofSection 186 of the Companies Act 2013. However the aggregate of loans and advancesgranted as also investments are within the limits of Section 186 of the Act. These havebeen disclosed in the Financial Statements.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Company has received declaration from all Independent Directors of the Company tothe effect that they meet the criteria of independence as stipulated u/s 149(6) of theAct.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the year under review;
c) they 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) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;
f) they have devised proper system to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188OF THE COMPANIES ACT 2013
There are no materially significant related party transactions made by the company withPromoters KMP
or other designated persons during the year which may have potential conflict withinterest of the Company at large. However detailed transactions are disclosed under notesof financial statements.
AUDIT COMMITTEE RECOMMENDATIONS
During the year the Board has accepted all recommendations of Audit Committee andaccordingly no disclosure is required to be made in respect of any non-acceptance ofrecommendation.
a) Independent Auditor
The Independent Auditor M/s.Surendra Modiani &Associates Charted Accountant havingF.R.N.126307W were appointed as Independent Auditors of the Company in the 28th AnnualGeneral Meeting of the Company for a period of five consecutive years based upon thedeclaration of their eligibility consent and terms of engagement.
The Independent Auditors have not reported any incident of fraud to the Audit Committeeof the Company for Financial Year 2019-20.
b) Internal Auditor
The Board of Directors has appointed M/s. Keyur Patel & Company as InternalAuditors of the Company.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in form MGT-9 is as Annexure B.
EXPLANATION/COMMENTS ON QUALIFICATION/RESERVATION/ADVERSE REMARK/DISCLAIMER BY THEAUDITORS IF ANY
Since there are no qualification/reservation/ adverse remark/disclaimer either by theAuditors or Secretarial Auditors in their respective report no explanation/comment isoffered.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all Employees in the course of day to day business operations ofthe company. The details of the Code are available on the website of the Company.
All the Board Members and the Senior Management Personnel have confirmed compliancewith the Code. All KMP have been given appropriate briefing in this regard.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraudand mismanagement if any. In staying true to our values of Strength Performance andPassion and in line with our vision the Company is committed to the high standards ofCorporate Governance and stakeholder responsibility.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant toSEBI (Prohibition & Insider Trading) Regulations 2015 with a view to regulate tradingin securities by the Directors and Designated Employees of the Company. The details of theCode are available on the website of the Company.
All Directors and the Designated Employees have confirmed compliance with the Code.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year. For details pleaserefer the Corporate Governance section of this Report.
Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Upendra C Shukla
Company Secretary in practice to undertake the Secretarial Audit of the Company. TheSecretarial Audit Report for the financial year ended 31st March 2020 is annexed herewithmarked as "Annexure C" to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
The Company continuously keeps a watch regarding any possible risk threatening theexistence of the Company and ensures necessary mitigation of the same.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERNSTATUS/COMPANY'S OPERATIONS IN FUTURE
No significant/material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the Company or company's operations infuture.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 the company has proper system to receive thecomplaint and constituted Internal Complaints Committee. During the year no complaint wasreceived from any employee.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as per "Annexure D" to this Report.
Information required under Section 197 read with rules 5(2)(i) & 5(3) of Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 is not attached.Members interested in inspecting these particulars may do so at the Registered Office ofthe Company from 7 days before and upto one day before of the said AGM during normalbusiness hours on working days.
None of the employees was in receipt of remuneration exceeding '850000/- p.m. or'10200000/- p.a. MANAGEMEMNT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underRegulations 34 and Schedule V of the SEBI (LODR) Regulations 2015 is as under:
1. Industry Structure and Development
During the year under review there was somewhat contraction in the off take ofPolypropylene Fibre in the country from domestic sources. However in the long run notonly does the potential loom large there is certain movement in this direction whichaugurs well for the future. The management hopes the same will bear fruit at the earliest.The export market holds larger potential and all efforts are afoot to increase sales onthis front.
2. Segment wise Operational Performance
The Company operates manufacturing of Manmade Fibres and power generation through WindTurbine. Performances in terms of profits are commensurate to the production and sales androutine increase in costs:
| ||2019-20 ||2018-19 |
|Sales ||2837.01 ||2984.43 |
|Profit Before Tax ||260.98 ||258.89 |
|Profit After Tax ||197.83 ||218.69 |
(Quantity in MT)
| ||2019-20 ||2018-19 |
|Production ||2036.14 ||1771.90 |
|Sales ||1949.872 ||1909.93 |
Exports and sales of Yarn were 816.61MT (383.65MT) and 469.22MT (480.20MT)respectively.
3. Quality & Future Outlook
The outlook for the Polypropylene Staple Fibre is encouraging overall. Efforts arecontinually underway for growth in the international market whereby substantial potentialexists. Product quality of the company is in consonance with international standards andall efforts are made to adhere to the same.
4. Threats and Concerns
The Company is committed to manufacture and deliver quality products strictly as perrequirement of the customer. Constant feedback from the customers are received and allefforts made for continuous improvement in process performance and product qualitywherever required. With established production base of almost three decades the Companyis in a position to maintain production and supply of quality products smoothly. Thistestifies to the fact that there is virtually nil rejections of the Company's products.The Company has benefit of its long standing with its customers and can match the pricessuitably as per pricing policy as and when required.
For the above reasons no major threat is overseen and the Company is confident to faceany threat from the competition. The Company is also maintaining healthy liquidity to meetany unforeseen exigencies.
5. Internal Control Systems and their adequacy
The Company has appropriate Internal Control Systems for business processes financialreporting & controls compliance with applicable laws regulations etc. The Companyhas appointed statutory auditors to evaluate Internal Control System. Regular internalaudits and checks ensure that system and procedures are continuously improved. The AuditCommittee reviews the adequacy and effectiveness of Internal Control Systems and suggestsways of further strengthening them from time to time.
6. Human Resources and Industrial Relations
The Company has adequate and qualified human resources and enjoys cordial relationswith its employees. Numbers of employees were 77 as on 31st March 2020. The Board ofDirectors wishes to place on record its appreciation for the contribution made by all theemployees at all levels during the year.
7. Cautionary Statement
Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis may constitute forward looking statements within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumption the actual results might differ.
Industrial relations remained cordial throughout the year.
CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS ANDOUTGO
The Company has not imported any foreign technology and hence the company does nothave any information to offer in respect of Technology Absorption. However information inrespect of Conservation of Energy & Foreign Exchange Earnings and outgo is as per"Annexure-E".
The Company had completed all formalities regarding acquisition of Wind TurbineGenerator and the financial benefits from the same will start accruing from the firstquarter of FY 20-21.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY IFANY DURING THE PERIOD FROM 31ST MARCH 2020 TO THE DATE OF THE REPORT
There is no material change/commitment affecting the financial position of the Companyduring the period from the end of the financial year on 31st March 2020 to the date ofthe Report
The Company would like to thank all the Stakeholders Bankers Employees includinginter alia Suppliers Vendors and Investors and also place on record its appreciation toall the valuable customers for their consistent unstinted support throughout the year.
On behalf of the Board of Directors
|Date: 29/08/2020 ||Sanjeev Rungta |
|Place: Vadodara ||Executive Chairman |
| ||DIN:00053602 |