DIRECTORS' REPORT, MANAGEMENT DISCUSSION & ANALYSIS REPORT Dear Shareholders, Your Directors submit the 21st Annual Report along with the Audited Statement of Accounts of the Company for the year ended March 31, 2015. OPERATIONAL PERFORMANCE The consolidated gross revenue of the Company during 2014-15 grew by 14.37% at Rs. 12,650.62 lacs as compared with Rs. 11,061.20 lacs last year. The Company has achieved a standalone gross revenue of Rs. 9,628.49 lacs during the year under review, as compared with Rs. 8,710.38 lacs during the previous year a rise of 10.54%. Consolidated profit before tax increased to Rs. 1,038.26 lacs, as compared with Rs. 997.25 lacs in the previous year, an increase of 4.11% over last year. Standalone profit before tax increased from Rs. 407.34 lacs to Rs. 432.09 lacs, an increase of 6.08%. During financial year 2014-15, your Board of Directors have decided to close down the business of ACP Division which was incurring losses in past many years and looking to continuous slack in commercial segment of real estate, the core plant of ACP Division were sold in January 2015. However the land, building & other machinery were retained to accommodate additional requirement of factory space of plastic division and also to expand plastic business. The management expects improved profitability in future by this decision of closing down of ACP Division. DIVIDEND Your Directors have recommended a final dividend of Rs. 1.50/- (15%) per equity share (last year Rs. 1.00/- per equity share) for the financial year ended March 31, 2015, amounting to Rs. 198.01 lacs (inclusive of tax of Rs. 33.00 lacs), one of the highest payout in recent past of the Company on popular demand by shareholders. The dividend payout is subject to approval of members at the ensuing Annual General Meeting. The dividend will be paid to members whose names appear in the Register of Members as on September 18, 2015; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. TRANSFER TO RESERVES The Company proposes to transfer Rs. 50.00 lacs to the General Reserve out of the amount available for appropriations and an amount of Rs. 2,004.50 lacs is proposed to be retained in the Profit and Loss Account. The Reserve on standalone basis, at the beginning of year were Rs. 3,150.36 lacs. The Reserve at the end of year are Rs. 3,141.86 lacs. PERFORMANCE OF JOINT VENTURE Prima Dee-lite Plastics Pvt. Ltd., Cameroon is a Joint Venture Company manufacturing Moulded Articles and HDPE Woven Sack Bags. The total turnover of JV Company for the calendar year ended 2014 was INR 6,368.96 lacs as compared to previous calendar year of INR 4,724.71 lacs. The profit for the year after depreciation and tax was INR 479.58 lacs as compared to INR 436.85 lacs in the previous year. CONSOLIDATED FINANCIAL STATEMENTS As required by Accounting Standards AS- 21 and AS-27 of the Institute of Chartered Accountants of India, the financial statements of the Company reflect the consolidation of the Accounts of the Company, its Joint Venture Company Prima Dee-lite Plastics Pvt. Ltd., Cameroon. The performance and financial position of Joint Venture Company is detailed in 'Statement containing salient features of the financial statement of joint ventures' in form AOC-1 pursuant to section 129 of the Companies Act, 2013 is annexed herewith as "Annexure A''. MANAGEMENT DISCUSSION AND ANALYSIS A detailed review of the operations and performance of the Company and its national & international business are contained in the Management Discussion and Analysis Report which form part of the Directors Report. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY There are no material changes and commitments affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. March 31, 2015 and the date of the Directors' Report i.e. August 13, 2015. MATERIAL ORDERS OF REGULATORS/ COURTS/TRIBUNALS No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 There were no loans or guarantees, investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES All contracts or transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. The Company had not entered into any contract or transaction with related parties which could be considered material in accordance with the provision of the Companies Act, 2013. An omnibus approval has been granted by the Audit Committee of the Board for transactions 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 a quarterly basis. Statement containing salient features of the related party transactions' in form AOC 2 pursuant to section 189 of the Companies Act, 2013 is annexed herewith as "Annexure B''. BUSINESS RISK MANAGEMENT A risk management policy has been developed and implemented by the Company for identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. The key elements of the company's risk management framework have been captured in the risk management policy which details the process for identifying, escalating, prioritizing, mitigating and monitoring key risk events and action plans. The assessment of the risks covers Strategy, Technology, Financial, Operations & Systems, Legal & Regulatory and Human Resources Risks. The effectiveness of the risk management framework and systems is periodically evaluated by the Risk and Audit Committee. INTERNAL FINANCIAL CONTROLS The Company has in place, adequate systems and procedures for implementation of internal financial control across the organization which enables the Company to ensure that these controls are operating effectively. DIRECTORATE The appointment and remuneration of Directors is governed by the Remuneration Policy of the Company to serve on the Board for guiding the Management team to enhanced organizational performance. The detailed Remuneration Policy is contained in the Corporate Governance section of the Annual Report. The Company's Board comprises of six members, Shri Bhaskar M. Parekh, Executive Chairman (DIN-00166520) and Shri Dilip M. Parekh, Managing Director (DIN - 00166385) represents the Promoter Group and Executive Directors. Three other Non-Executive Directors -Shri Mulchand S. Chheda (DIN - 00179932), Shri Krishnakant V. Chitalia (DIN - 00443945) and Shri Rasiklal M. Doshi (DIN - 00239580) are independent in terms of Clause 49 of the Listing Agreement and Companies Act, 2013. Woman Director Smt. Hina V. Mehta (DIN -07201194 ) is Additional Director and represent Promoter Group. The Directors are reputed persons with diverse functional expertise and industry experience relevant to fulfilling the Company's objectives and strategic goals. None of the Independent Directors are liable to retire at the forthcoming Annual General Meeting. All Independent Directors have submitted declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. As per the provisions of the Companies Act, 2013, Shri Dilip M. Parekh retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment to the Board. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Smt. Hina V. Mehta will hold office upto the conclusion of the ensuing Annual General Meeting of the Company. The Company has also received notice from a member along with the deposit of requisite amount under Section 160 of the Act proposing the candidature of Smt. Hina V. Mehta for the office of Director of the Company. Their profile details are contained in the accompanying Notice of the forthcoming Annual General Meeting and in the Corporate Governance Report. The Board of Directors met 5 times during financial year 2014-15. The details of the meetings and the attendance of the Directors are mentioned in the Corporate Governance Report. The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Companies Act, 2013. The Committees are Audit Committee, Nomination and Remuneration Committee, Management Committee, Share Transfer Committee and Stakeholders' Relationship Committee. The composition, terms of reference, number of meetings held and business transacted by the Committees is given in the Corporate Governance Report. During the year, the Board has carried out the annual evaluation of its own performance as well as the evaluation of the working of its Committees and individual Directors, including Chairman of the Board. Individual and peer assessment of Directors based on parameters such as knowledge, contribution, level of engagement, communication/relationship with Board and Senior Management were received by the Chairman for individual feedback. The performance evaluation of the Chairman was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process and its result. The Company periodically discloses its promoter group and persons acting in concert in the shareholding pattern and other filings with the Stock Exchanges. DIRECTORS' RESPONSIBILITY STATEMENT As stipulated in Section134(3)(C) of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: I. In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Companies Act, 2013, have been followed and there has been no material departure; II. The Directors have selected such accounting policies and applied them consistently and made Judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; III. The Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013. They confirm that there are adequate system and control for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. IV. Directors have prepared the Annual Accounts on a going concern basis. V. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and VI The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. AUDITORS & AUDITORS' REPORT M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai bearing ICAI Registration (104768W) was appointed as Auditors of the Company at the 20th Annual General Meeting to hold office for a period of three years. As required under the Companies Act, 2013, the re-appointment of the Statutory Auditors is required to be placed before the Members at every subsequent annual general meeting for their ratification. Hence, the Board, based on the recommendation of the Risk & Audit Committee, proposes to ratify the re-appointment of the aforesaid Statutory Auditors of the Company at the ensuing Annual General Meeting. As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s. G.P Kapadia & Co., to such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable. The notes to accounts referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further comments. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed Mr. Sadashiv V. Shet, Practicing Company Secretary to undertake the Secretarial Audit for the financial year 2014-2015. The Secretarial Audit Report is annexed herewith as "Annexure C". INTERNAL AUDIT The Company continues to engage M/s. S. A. Sangani & Associates, Chartered Accountants as its Internal Auditor. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure D". VIGIL MECHANISM The Company has formulated Whistle Blower Policy with a view to providing a mechanism for employees to report violations and assure them of the process that will be followed to address the reported violation. The Policy also lays down the procedures to be followed by Senior Management for tracking of complaints, giving feedback, conducting investigations and taking disciplinary actions. It also provides assurances and guidelines on confidentiality of the reporting process and protection from reprisal to complainants. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder, your Company has constituted Internal Complaints Committees. In line with the said provisions, during the year the Company has not received any complaints with allegations of sexual harassment. PARTICULARS OF EMPLOYEES The Company does not have any employee drawing remuneration required to be disclosed pursuant to the Section 197 of Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The required disclosures with respect to Remuneration and other details are set out in Annexure E to this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Additional information given as required under the Companies (Disclosures of Particulars in the report of Board of Directors) Rules, 1988. ENERGY CONSERVATION Energy conservation program is an ongoing process, the Company continues to emphasize on energy conservation at the stage of selections of plant, equipment to optimize energy consumption and by installing necessary power saving equipments. RESEARCH & DEVELOPMENT The R & D activities carried out by the Company are directly working in the supervision and guidance of the Managing Director. The Company has been able to launch few new products in plastics in replacement of conventional wood and also few new designs of chairs developed internally. The Company further plans to develop and introduce new range of products in the current year. TECHNICAL ABSORPTION, ADAPTATION & INNOVATION The Company has not imported any technology or processes know how. The Machines and moulds used for manufacturing products are regularly upgraded to cater variety products in line with the market trend and demand. The new investments are made in new technology upgraded machines & moulds. As a result, the Company is able to give new & innovative designed product and has created strong demand of its products in export market. FOREIGN EXCHANGE EARNING AND OUTGO 1) Activities relating to exports, initiative taken to increase exports; development of new exports market for products and services; and export plans:- The Company's key markets for international business are Africa, Middle East and Latin America. The export products are well established in the international market and the exports were higher at Rs. 1,953.01 lacs as compared to Rs. 1,863.62 lacs in last year. The growth in export too is very impressive at 5% in percentage term due to repeated orders from its existing clients. 2) Total foreign exchange used and earned. FIXED DEPOSITS The Company has not accepted any Fixed Deposit from the Members or the Public during the year. CORPORATE GOVERNANCE The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report. HUMAN RESOURCE We believe that people are the backbone of the organization and hence we lay great emphasis on optimizing their performance. The Company provides employees with a fair and equitable work environment and support from the peers to develop their capabilities. The Company strongly believes that its team of capable and committed manpower, which is its core strength, is the key factor behind all achievements and trusting them with the freedom to act and to take responsibility successfully. Occupational health and safety are given the utmost importance in the Company. The relationship between the Company and the employees were cordial and the Company experienced peace and harmony through out the year. ACKNOWLEDGMENT The Directors wish to convey their gratitude and appreciation to all of the Company's employees at all its locations for their tremendous personal efforts as well as their collective dedication and contribution to the Company's performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, government and all other business associates for their continued support extended to the Company and the Management. For and on behalf of the Board Bhaskar M. Parekh (DIN - 00166520) Chairman Mumbai, August 13, 2015 |