REVIEW OF THE OPERATION, CURRENT TRENDS AND FUTURE PROSPECTS:
COMPANY PERFORMANCE
During the year under review the performance of your company was good. The turnover has
increased from Rs.136 Crores to Rs. 155 Crores. The table below shows comparative figures
of production and sales of the companys products in quantity. There has been a marked
improvement in the production and sales, quantitywise.
PRODUCTION AND SALES
The Production and Sale of the Companys products, FIBC bags and OE Spinning yarn were
as follows :
|
Year ended 31.03.2017 |
Year ended 31.03.2016 |
| 1. Production |
Quantity (Kgs.) |
Quantity (Kas.) |
| 1) FIBC Bags & PP Woven Bags |
72,39,476 |
62,20,520 |
| 2) PP Woven Fabrics |
1,24,021 |
1,17,173 |
| 3) PP Yarn |
13,84,579 |
12,13,348 |
| 4) Paper Bags |
44,994 |
64,466 |
| 5) Cotton Yarn & Fabric |
17,69,832 |
23,09,988 |
| 2. Sales |
|
|
| 1) FIBC Bags & PP Woven Bags |
74,76,099 |
63,32,535 |
| 2) PP Woven Fabrics |
1,24,021 |
1,17,173 |
| 3) PP Yarn |
13,84,579 |
12,13,348 |
| 4) Paper Bags |
52,263 |
57,197 |
| 5) Cotton Yarn & Fabric |
18,10,339 |
23,34,830 |
The global economy grew by 3.1% in the year 2016 compared to 3.41% in 2015. The Indian
economy witnessed another challenging year. The real GDP growth was 7.1% as against 7.9%
of the previous year, showing a slowdown. The IMF projects the world growth to rise from
3.1% to 3.5% in 2017 and to 3.6% for 2018. Every year the economy is affected by some
factor or other. The factors and trends may be fortunate or unfortunate. It is the
committed belief of the company to be always on the guard with cushioning effects, so that
the fundamental value of shareholders is not affected.
The production of the companys products has increased from 6220 Tons to 7239 Tons an
increase of 16%. The sales had increased from 6332 Tons to 7476 Tons an increase of 18%.
This trend will be sustained by adopting innovative production and marketing strategies.
The production capacity is constantly upgraded which will result in sustained sales and
profitability.
The cotton yarn production has decreased due to the conditions which were beyond the
control. However steps are being taken to maintain profitability.
The prospects for the current year is likely to be better with an increase in
profitability.
BOARD OF DIRECTORS
Yours directors regret to report the sad and sudden demise of our director Sri. S.
RENGANATHAN, on 21st November, 2016. His expertise and contribution to the
company was exceptional. The board places on record its grief over his demise and
expresses its gratitude for his contribution.
Sri. S.V. RAVI, Director, retries by rotation at the forthcoming Annual General
Meeting, and being eligible offers himself for reappointment.
Declaration by Independent Directors: - The Independent Directors of the company
have declared that they meet the criteria of Independence in terms of Section 149 (6) of
the Companies Act, 2013 and that there is no change in their status of Independence.
Policy of Directors Appointment and remuneration: - In accordance with Section
178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and
Remuneration Committee, the Board of Directors have approved a policy relating to
appointment and remuneration of Directors, Key Managerial Personnel and Other Employees.
The objective of the Nomination and Remuneration Policy is to ensure that the level and
composition of remuneration is reasonable, the relationship of remuneration to performance
is clear and appropriate to the long term goals of the Company. The policy also envisages
and takes into account the total involvement with dedication and human touch.
None of the Director is disqualified under Section 164 of the Companies Act, 2013.
BOARD EVALUATION
Pursuant to Section 134 (3) (p) of the Companies Act, 2013, and Regulation 25(4) of
LODR, Independent Directors have evaluated the quality, quantity and timeliness of the
flow of information between the Management and the Board, Performance of the Board as a
whole and its Members and other required matters. Pursuant to Schedule II Part D of LODR,
the Nomination and Remuneration Committee has laid down evaluation criteria for
performance evaluation of Independent Directors, which will be based on attendance,
expertise and contribution brought in by the Independent Director at the Board Meeting,
which shall be taken into account at the time of reappointment of Independent Director.
MEETINGS
During the year Seven Board Meetings were held. The details of the Meetings of the
Board and its various Committees are given in the Corporate Governance Report.
ORDERS PASSED BY REGULATORS
Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no
significant and material orders have been passed by the Regulators or Courts or Tribunals,
which would impact the going concern status of the company.
INTERNAL FINANCIAL CONTROLS
The Company has implemented and evaluated the Internal Financial Controls which provide
a reasonable assurance in respect of providing financial and operational information,
complying with applicable statutes and policies, safeguarding of assets, prevention and
detection of frauds, accuracy and completeness of accounting records. The Directors and
Management confirm that the Internal Financial Controls (IFC) are adequate with respect to
the operations of the Company.
INTERNAL AUDIT
Sri. P.S. Ramanathan, the Internal Auditor, submits Quarterly reports to the audit
committee which are reviewed periodically by Audit Committee as well as by the Board.
Further, the Board annually reviews the effectiveness of the Companys internal control
and audit system.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that the Company
has not given any loans, guarantees and no investments has been made in bodies corporate
or firm.
REPORTON CORPORATE GOVERNANCE:
The Company has complied with the requirements of Corporate Governance as stipulated in
Listing obligations and Disclosure Requirements. A report on Corporate Governance is
annexed herewith and it forms part of the Directors Report as per Annexure - I as required
under Schedule V (C) of LODR. A certificate from the Secretarial Auditor confirming
compliance is also attached as Annexure - II, as required under Schedule V (E) of LODR.
The code of conduct as approved by the board is provided in the above annexure and
website.
CORPORATE SOCIAL RESPONSIBILITY
Company has taken corporate social responsibility initiatives. The Committee comprising
one Independent Director and two directors has been constituted as CSR Committee to
develop CSR policy and implement the CSR initiatives whenever it is applicable to the
Company.
The company has contributed Rs.6,05,000/- to health care and education projects. There
are certain other projects which have been identified and depending upon their
implementation and fulfillment, balance contribution will be made in due course. The
material disclosure is made in Annexure - III.
AUDITORS:
Krishnan and Raman, Chartered Accountants, Auditors of the company retries at the
conclusion of forthcoming 32nd Annual General Meeting. Since they are
completing the period of three years, the company has to appoint statutory auditors of the
company in the place of existing auditors as per the provisions of the Company Act, 2013.
The board of directors proposed the appointment of M/S. SRITHAR AND ASSOCIATES (Firm
Registration No. 015896S), Chartered Accountants, Chennai, as Statutory Auditors of the
Company for a period of one year, subject to the approval of the share holders at the
forthcoming 32nd Annual General Meeting of the company.
COST AUDITORS:
As per provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost
Records and Audit) Rules, 2014, the Government has not notified the products of our
company to which the Cost Audit would be applicable. Hence, the Cost Audit was not
conducted for your company for the financial year 2016 - 17.
SECRETARIAL AUDITOR
Pursuant to Provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, Your
Company has appointed Mr. B. Subramanian, Company Secretary in Practice, Chennai to
conduct the Secretarial Audit of the Company for the Financial year ended 31st
March, 2017.
The Secretarial Audit Report (in Form MR - 3) is attached as Annexure - IV to this
report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information required under Section 134(3) (m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014, regarding Conservation of Energy,
Technology Absorption, Foreign Exchange earnings and outgo are given in Annexure - V to
this report.
EXTRACT OF ANNUAL RETURN
The details regarding extract of Annual Return for the financial year ended 31st
March, 2017 in Form No: MGT-9 pursuant to Section 92 of Companies Act, 2013 and Rule 12(1)
of the Companies (Management and Administration) Rules, 2014, is annexed herewith as
Annexure - VI.
WOMEN AT WORK PLACE
The company has constituted an Anti-Sexual Harassment Policy in line with the
requirements of the sexual harassment of Women at the work place (Prevention, Prohibition
and Redressal) Act, 2013. Internal complaints committee (ICC) has been set up to redress
complaints received regarding sexual harassment. During the year, the company has not
received any complaints of harassment.
PUBLIC DEPOSITS:-
The company has not accepted any fixed deposit from the public during the year under
section 73 of the Act.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22
of the LODR, the Company has established a Vigil Mechanism and has a Whistle Blower
Policy. The policy is available at the Companys website.
A forum to enable the concerned personnel of the Company to report any deviation or
other acts which are against the general code of conduct of personnel, business and other
activities has been created.
RISK MANAGEMENT POLICY
Company has developed and implemented a risk management policy, as required under
Regulation 17(9) of LODR and Pursuant to Section 134(3)(n) of the Companies Act, 2013. A
committee of the Board named as Risk Management Committee has been formed by the Board to
address and evaluate various risks impacting the Company, in practice with reference to
the forex and interest rate. At present the board has not identified any element of risk
which may threaten the existence and development of the company.
The Company has laid down a Risk Management Policy and Procedure to inform the Board
Members about the Risk assessment and minimization process, which is a vigorous and active
process for identification and mitigation of risks. Necessary inputs are provided to the
Audit Committee on a monthly basis. The production and sales are monitored and any
deviation from the projected is identified, solution found and necessary rectifications
are done periodically.
Audit Committee as well as the Board of Directors have adopted the Risk Management
Policy and the Audit Committee reviews the risk management and mitigation plan from time
to time.
MATERIAL CHANGES AND COMMITMENTS
No Material changes and commitments, affecting the financial position of the Company
has occurred between the end of the financial year 2016-17 and till the date of this
report.
PERSONNEL
The information required pursuant to Section 197 of the Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
in respect of employees of the Company and Directors are annexed as Annexure - VII and
forms part of this Report.
RELATED PARTY TRANSACTIONS:
There were no materially significant related party transactions which could have
potential conflict with the interests of the Company. Transactions with related parties
are in the ordinary course of business on arms length and are periodically placed before
the Audit Committee and Board for its approvals and Form AOC-2 is enclosed as Annexure-
VIII. An omnibus approved by the Audit committee is granted with reference to each party
and the ceiling amount. Since the transactions are at an arms length basis, there is no
significance.
The Board of Directors of the Company has, on the recommendation of the Audit
Committee, adopted a policy to regulate transactions between the Company and its Related
Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules
thereunder and the Listing Agreement. This Policy was considered and approved by the
Board, which has been uploaded on the website of the Company.
HUMAN RESOURCES
Your company treats its "human resources" as one of its most important
assets. Your company enjoys a very cordial relationship with workers and employees at all
levels.
Your company continuously invests in attraction, retention and development of talent on
an ongoing basis. A number of programs that provide focused attention are currently
underway. Your Companys thrust is on the promotion of talent internally, through job
rotation and job enlargement.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Investor Education Protection Fund (uploading of
information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the
company has already filed the necessary form and uploaded the details of unpaid and
unclaimed amounts lying with the company, as on the date of last AGM 15th
September, 2016 with the Ministry of Corporate Affairs. An amount of Rs. 3,08,129/-
unclaimed dividend pertaining to the year 2010 will be transferred to the IEP Fund before
01.10.2017.
CODE OF CONDUCT
The Board has laid down the code of conduct for Directors of the company and senior
management personnel.
The Directors shall follow in letter and spirit the provisions as contained in section
166 of the Companies Act, 2013. They shall also follow general principles of pillars of
character. The same with certain variation involving their nature of work applies to the
senior management personnel. All the directors of the board and senior management
personnel have confirmed the compliance with the code.
INSIDER TRADING
The company has formulated and implemented the code of conduct for prevention of
insider trading with regard to the securities by directors and designated person of the
company as per SEBI (Prohibition of Insider Trading) Regulations, 2015.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that
(a) in the preparation of the annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
(b) they had 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 at the end of the financial year and of the profit
and loss of the company for that period;
(c) they had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the annual accounts on a going concern basis;
(e) they 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
(f) they had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT
Your Directors wish to take this opportunity to place on record their gratitude and
sincere appreciation for the timely and valuable assistance and support received from
Bankers - City Union Bank, Share Transfer Agents, Customers, Suppliers, Share Holders and
Regulatory Authorities.
The Board also express and records its appreciation for the hard and dedicated efforts
of the employees as a team at all levels.
On Behalf of the Board,
For POLYSPIN EXPORTS LIMITED,
| Place : Rajapalayam |
S.V. RAVI |
R.RAMJI |
| Date : 24.07.2017 |
Director |
Managing Director |
+91-9892691696
