To,
The Shareholders,
Your Directors have pleasure in presenting herewith the 44thAnnual Report on the
business of Your Company together with the Audited Accounts for the Financial Year ended
31st March, 2019.
| FINANCIAL RESULTS |
|
(Rs. In Lakhs) |
| PARTICULARS |
2018-19 |
2017-18 |
| Gross Income |
21,208.08 |
27,210.44 |
| Gross Income (Net of Excise Duty) |
18,578.76 |
24,597.31 |
| Less: Expenditure |
16,912.18 |
22,684.68 |
| Gross Profit |
1,666.58 |
1,912.62 |
| Less: Interest & Finance Charges |
1,360.70 |
1,488.51 |
| Less: Depreciation |
182.42 |
168.50 |
| Profit before Tax |
123.46 |
255.61 |
| Less: Current Tax |
31.82 |
47.52 |
| Less: Tax for the earlier years |
- |
- |
| Less: Deferred Tax |
24.66 |
(13.40) |
| Profit available for appropriations |
66.98 |
221.49 |
| Profit brought forward |
2,706.68 |
2,582.07 |
| Revised Depreciation of earlier years |
- |
- |
| Additional Deferred Tax Liability, |
|
|
| Adjustment on Sale of Investment, |
|
|
| Total Comprehensive Income |
60.28 |
96.89 |
| Balance carried forward |
2,766.96 |
2,706.68 |
BUSINESS REVIEW
During the year under review your Company has achieved gross revenues amounting to Rs.
21208.08 Lakhs as against Rs.27210.44 Lakhs in the previous year.
OPERATIONS:
For the year under review, production of PVC LC was 72.31 LLn. Mtrs as against the
previous years production of 81.70 LLn. Mtrs. Production of PVC Film was 5611.88 MT as
against the previous years production of 10,095.60 MT.
There has been a decline in the sales for the year 2018-19 in both the segments due to
the prevailing market conditions.
The main reasons of slow down in the PVC Leather Cloth division is due to slow down in
the OEM market and financial liquidity crunch in the domestic market.
The company is working in getting into other market sectors such as shoe industry, to
bolster the production.
The decline in the PVC Film division is primarily due to the fear of ban on short life
PVC. This ban was actually on one time use and low guage thickness of carry bags.
Unfortunately, this was misconstrued by the market and until clarification and orders from
the National Green Tribunal came, there was a confusion in the market.
This period was utilised by the Company to re condition its machines to improve
productivity, reduce rejections and this upgradation should also help the company to
develop better value added products.
Furthermore, the implementation of GST had its own effects on the domestic market.
The company is further working on forward integration in this division like thermo
forming and PVC insulation tapes .
DIVIDEND:
Your Directors did not recommend any dividend for the year 2018-19
TRANSFER TO RESERVES:
Your Company has not transferred any amount to the general reserve.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL
During the year under review Mr. Haridas Krishna Kumar, Director of the Company retires
by rotation and being eligible offered himself for re-appointment.
The Board of Directors, based on the performance evaluation and recommendation of the
Nomination and Remuneration Committee recommend the re-appointment of Mr. B. Kamalakar
Rao, Dr. K. Malhar Rao and Mr. P. Niroop as Independent Non-Executive Directors for a
further consecutive period of 5 years with effect from 1st April, 2019, in accordance with
section 149 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
The Board of Directors also recommend to the members the re-appointment of Mr. Haridas
Narsaiah, as the Non-Executive, Non-Independent Director in terms of regulation 17 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed both under the Act
and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Company has evaluated the performance of Independent Directors, Board, Committees
and other individual Directors as per the Policy adopted for performance evaluation which
includes criteria for performance evaluation of the non-executive directors and executive
directors.
AUDITORS
Statutory Auditors:
The Shareholders in their meeting held on 27.09.2017 approved the appointment of M/s.
Venugopal & Chenoy Chartered Accountants, Hyderabad, as the Statutory Auditors of the
Company to hold office for a period of five years from the conclusion of the 42nd Annual
General Meeting.
Cost Auditors:
The Board has appointed Mr. Sanisetty Venkata Ramarao of M/s. SVRR & Associates,
Cost Accountants for conducting the audit of cost records of the Company for various
segments for the Financial Year 2019-20 as recommended by the Audit Committee. As required
under section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014 a
resolution is being placed at the ensuing AGM for ratification of remuneration payable to
said Cost Auditors.
Secretarial Auditors:
M/s.P.S.Rao & Associates, Practicing Company Secretaries, were appointed to conduct
the Secretarial Audit of the Company for the Financial Year 2018-19, as required under
Section 204 of the Companies Act, 2013 and Rule 9 thereunder. The Secretarial Audit report
for the Financial Year 2018-19 forms part of this Report as Annexure - 1. The Board
has appointed M/s.P.S.Rao & Associates, Practicing Company Secretaries, as Secretarial
Auditors of the Company for the Financial Year 2019-20.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO
Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule
8 of the Companies (Accounts) Rules, 2014, is enclosed herewith as Annexure – 2.
RISK MANAGEMENT POLICY
Pursuant to the requirements of SEBI (Listing Obligations and Disclosure Requirements)
Regulations,2015, the Company has formulated and adopted a policy on the Risk Management.
The Risk Management Policy of the Company is posted on Companys website:
www.fenoplast.in. Major risk to the Company apart from the general business risks related
to the industry, is competition from small/ unorganized players.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations.
Through Internal Audits the Company monitors and evaluates the efficacy and adequacy of
internal control system in the Company, its compliance with operating systems, accounting
procedures and policies at all locations of the Company. Based on the audit reports the
units undertake corrective action in their respective areas and strengthen the controls.
Significant audit observations and corrective actions thereon are presented to the Audit
Committee of the Board periodically.
The Board of Directors of the Company have adopted various policies like Related Party
Transactions policy, Whistle Blower Policy such other procedures for ensuring the orderly
and efficient conduct of its business for safeguarding its assets, prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information.
NOMINATION AND REMUNERATION POLICY
A committee of the Board named as "Nomination and Remuneration Committee" has
been constituted to comply with the provisions of section 178, Schedule IV of the
Companies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015. As recommended by the Committee the Board adopted a policy on Directors appointment
and remuneration, including criteria for determining qualifications, positive attributes,
independence of a director and other matters to frame proper systems for identification,
appointment of Directors & KMPs, Payment of Remuneration,Evaluation of their
performance. Nomination and Remuneration Policy of the Company is enclosed herewith as Annexure
– 3 and is available on Companys website www.fenoplast.in.
FORMAL ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND
INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act,2013 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations,2015, the Board has carried out the annual
performance evaluation of its own performance, the Directors individually as well as the
evaluation of the working of its Audit and other Committees.
A structured questionnaire was prepared after taking into consideration inputs received
from the Directors, covering aspects of the Boards functioning such as adequacy of the
composition of the Board and its Committees, Board culture, execution and performance of
specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of Individual Directors
including the Chairman of the Board, who were evaluated on parameters such as level of
engagement and contribution, independence of judgement, safeguarding the interest of the
Company etc. The performance evaluation of the Independent Directors was carried out by
the entire Board. The performance evaluation of the Chairman and the Non-Independent
Directors was carried out by the Independent Directors. The Directors expressed their
satisfaction with the evaluation process.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year under review, the company did not fall under the purview of provisions
of section 135 read with Schedule VII of the Companies Act, 2013. Hence the company has
not made any contributions towards CSR Activities.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors confirm that:
i. In preparation of annual accounts for the Financial Year ended 31st March, 2019 the
applicable Accounting Standards have been followed along with proper explanation relating
to material departures;
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 true and
fair view of the state of affairs of the Company at the end of the financial year ended
31st March, 2019 and of the profit and loss of the Company for the year;
iii. The Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
iv. The Annual Accounts for the year 2018-19 have been prepared on a ‘going
concern basis;
v. The directors had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were operating
effectively; and
vi. The directors had devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 is
annexed herewith as Annexure - 4.The same is available on the Companys website,
www.fenoplast.in
OTHER DISCLOSURES:
Board Meetings
During the year under review Four Board Meetings were held. For further details, please
refer report on Corporate Governance enclosed herewith.
Committees of Board
Your company has the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The constitution of all the Committees is as per the Companies Act, 2013 and SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the
Constitution are mentioned in Corporate Governance Report, which forms part of this Annual
Report.
Corporate Governance Report
Your Company has complied with the requirements of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015. A Report on Corporate Governance including
Auditors Certificate on compliance with the code of Corporate Governance is enclosed as
Annexure – 5 to this report.
Management Discussion and Analysis
A brief note on the Management discussion and analysis for the year is enclosed as
Annexure - 6 to this report
Vigil Mechanism:
In pursuance to the provisions of section 177 of the Companies Act, 2013 and Regulation
22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Vigil
Mechanism for Directors and Employees to report genuine concerns has been established.
This mechanism enables the Whistle Blower to make protected disclosures to the Chairman of
the Audit Committee. The Policy on Vigil Mechanism and Whistle Blower Policy may be
accessed on the Companys website at the link: www.fenoplast.in.
Remuneration ratio of the Directors/ Key Managerial Personnel/ Employees:
Statement showing disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed herewith as
Annexure –7.
PARTICULARS OF EMPLOYEES:
No employee of the Company was in receipt of remuneration, during the Financial Year
2018-19, in excess of the sum prescribed under Section 197(12) of the Companies Act, 2013,
read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Details of the Loans, guarantees and investments covered under Section 186 of the
Companies Act, 2013 are given in the notes to the Financial Statements pertaining to the
year under review.
DEPOSITS:
Your Company has not accepted any fixed deposits and as such no principal or interest
was outstanding as on the date of the Balance sheet.
RELATED PARTY TRANSACTIONS:
Related party transactions entered during the Financial Year under review are disclosed
in Note No.44E of the Financial Statements of the Company for the Financial Year
ended 31st March, 2019. These transactions were on arms length basis and in the ordinary
course of business. There were no materially significant related party transactions with
the Companys Promoters, Directors, Management or their relatives, which could have had a
potential conflict with the interests of the Company. Form AOC-2, containing the
note on the aforesaid Related Party Transactions is enclosed herewith as Annexure
–8.
The policy on materiality of Related Party Transactions and dealing with Related Party
Transactions as approved by the Board may be accessed on the Companys website.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the
following items as there were no transactions on these items during the year under review:
1. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.
2. Issue of Shares (including Sweat Equity Shares) to employees of the Company under
any scheme.
3. Neither the Managing Director nor the Whole-time Directors of the Company received
any remuneration or commission from any of its subsidiaries.
4. No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Companys operations in future.
5. No material changes and commitments affecting the financial position of the Company
have occurred between the end of the Financial Year and date of report.
Your Directors further state that during the year under review, there were no cases
filed/registered pursuant to the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the continued patronage extended
to the Company by Dealers, Customers, Suppliers, Employees and Shareholders. The trust
reposed in your Company by its esteemed customers helped stabilized growth during the year
under review.
Your Company also acknowledges the support and guidance received from Canara Bank,
State Bank of India and Syndicate Bank, other Government agencies during the year under
review and look forward for continuing support.
For and on behalf of the Board of Directors
Sd/-
B.KAMALAKAR RAO
CHAIRMAN
Place : Secunderabad
Date : 09-08-2019
+91-9892691696
