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The Directors are pleased to present their Thirty-Sixth Annual Report and Audited Financial Statements for the year ended
31 March, 2018.
1. FINANCIAL SUMMARY
|Sales and Other Income||100,66,41,159||1,079,543,124|
|(before Depreciation and Tax)||65,178,974||50,522,060|
|Less : Depreciation||18,210,873||17,857,267|
|Profit before tax||4,69,68,101||46,968,101|
|Less :Provision for tax|
|Deferred tax Credit||473,288||605,456|
|Profit after Tax||2,97,37,813||2,30,04,755|
|Short Provision of Tax|
|for Prior Years||60,791|
|Net Profit after prior|
|Add : Balance brought|
|Profit available for|
2 . Adoption of Indian Accounting Standards (Ind AS)
The Company has adopted Indian Accounting Standards (Ind AS) notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. Ind AS 101 - First time adoption of Indian Accounting Standards requires that all Ind ASs and interpretations that are issued an effective be applied retrospectively and consistently for all financial years presented.
The adoption of Ind AS and introduction of GST with effect from 1st, July 2017 has resulted in lower reporting of sales in the current year in comparison to the sales reported under the pre-GST/pre Ind AS structure of indirect taxes. With the change in structure of indirect taxes, expenses are also being reported net of taxes. Accordingly, Financial statements for the year ended 31 March 2018 and in particular, Sales, absolute expenses, elements of Working Capital (Inventories, Trade payable, other current assets/current liabilities etc.) and ratios in percentage of sales, are not comparable with the figures of the previous year.
3. Operations/State of Companys Affairs
During the year under review, sales volume has increased by marginally 0.45% while sales value has been reduced by 8% to Rs 99,04,97,480/- from Rs 106,91,91,166/- in the previous year.
The profit before tax has increased by 43.79% to Rs. 4,69,68,101/- from Rs. 3,26,64,793/- in the previous year.
During the year under review availability of raw materials was comfortable however volatility in Exchange rate and upward phase in crude price will reflect in Raw Material Price which may put pressure on margins during current year however with more domestic capacity commissioned, Raw Material availability is expected to be stable during current year.
No Material Changes have occurred from the end of the Financial Year till the date of this report affecting the Financial Position of the Company.
There is no Change in the nature of business during the year under review.
No significant and material orders have been passed by the regulators or Courts or Tribunals impacting the going concern status and the companys operations in future during the year under review.
The Board of Directors have recommended a dividend of Rs.1.5 per equity share (15%) for the year 2017-18.(Previous year Rs.1.2 per equity share 12 %) for approval at the Annual General Meeting. The dividend if approved, will result in a cash outflow of Rs54.16 lacs (including dividend distribution tax of Rs. 9.16 ) as compared to Rs. 43.33 lacs including dividend distribution tax of 7.33 lacs in previous year.
5. BOARD MEETINGS:
The Board of Directors met Seven times during the Financial Year 2017-18.
6. DIRECTORS AND KEY MANANGERIAL PERSONNEL :
Mr. Pheroze Kharas, Director / Chairman, retired by rotation at the last Annual General Meeting held on 20th September 2017. The Board places on record its sincere appreciation for the assistance and guidance provided by him during his tenure as Director of the Company.
The Board at its meeting held on 27th November, 2017 has appointed Mr. Mukul B. Desai, Director as Chairman of the Company with effect from 27th November 2017.
Mrs. Charulata Patel, Director of the Company, would retire by rotation, at the ensuing Annual General Meeting and being eligible offers herself for re-appointment
The members at the 33rd Annual General Meeting held on 12th September 2015 had approved the appointment of Mr.
Jaymin Desai as Managing Director of the Company for a period of 3 years from 1st October, 2015 to 30th September, 2018. The Board Proposes to re-appoint him as the Managing Director for a further period of 3 years i.e from 1st October, 2018 to 30th September, 2021 at the ensuing Annual General Meeting.
SEBI vide its Notification No. SEBI/ LAD-NRO/ GN/ 2018/ 10 dated May 09, 2018 has notified SEBI (Listing Obligations and Disclosures Requirement) (Amendment) Regulation, 2018,In which there is a provision that Non Executive Director above the age of 75 years will be appointed or continued only after passing special resolution.
Considering their vast expertise and knowledge, The Board proposes continuation of Mr. Dhananjay T Desai , age 75 and Mr. Jehangir A. Moos, age 74 till their original tenure of directorship i.e 11th September, 2020 and 19th September, 2019.
7. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet the criteria of their Independence laid down in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the Independent directors possess appropriate balance of skills, experience and knowledge, as required.
8. AUDIT COMMITTEE
The Audit Committee of the company consists of following members.
I. Mr. Mukul Desai-Chairman II. Mr. Jehangir Moos III. Mr. Bhupendra Desai
9. POLICY ON DIRECTORS APPOINTMENT AND
REMUNERATION AND CRITERIA FOR INDEPENDENT DIRECTORS
The Remuneration Policy for directors and senior management and the Criteria for selection of candidates for appointment as directors, independent directors, senior management are placed on the website of the Company weblink < http://www.ecoplastindia.com/ Remuneration Policy for directors and senior management.html>
There has been no change in the policies since the last fiscal year.
We affirm that the remuneration paid to the directors is as per the terms laid out in the remuneration policy of the Company
10. VIGIL MECHANISM
The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. To maintain these standards, the Company encourages its employees who have concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment. A Vigil (Whistle Blower) mechanism formulated by the Company provides a channel to the employees and Directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Managing Director/ Chairman of the Audit Committee in exceptional cases.
11. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act, 2013, the Directors hereby 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) 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 at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors have 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) the directors have prepared the annual accounts on a going concern basis; and
(e) the directors, have laid down internal financial controls to be followed by the company in consultation with the experts and that such internal financial controls are adequate and were operating effectively.
(f) the directors have devised proper systems in consultation with the experts to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
12. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has a proper and adequate system of internal financial controls commensurate with its nature and size of business and meets the following objectives: v Providing assurance regarding the effectiveness and efficiency of operations; v Efficient use and safeguarding of resources; v Compliance with policies, procedures and applicable laws and regulations; and v Transactions being accurately recorded and reported timely. v The Company has a budgetary control system to monitor expenditures and operations against budgets on an ongoing basis.
v The Internal Auditor also regularly reviews the adequacy of internal financial control system.
13. SUBSIDIARY COMPANY
A Statement Containing the Salient features of the Financial Statements of the subsidiary Company is annexed as Annexure- I as a part of this Report.
During the year under review, No Company has become or ceased to be Companys subsidiary, joint venture or associate company.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company along with relevant documents and separate audited accounts in respect of the subsidiary are available on the website of the Company.
14. EXTRACT OF ANNUAL RETURN:
As provided under sub Section (3) of Section 92 of the Act, the extract of annual return in Form MGT-9 is enclosed, which forms part of the directors report as Annexure II
At the 35th Annual General Meeting of the Company held on 20th day of September, 2017, M/s. Y.B. Desai & Associates, Chartered Accountants, Surat, (ICAI Registration No. 102368W) were appointed as the Auditors of the Company from the conclusion of 35th AGM till the conclusion of the 40th AGM of the Company to be held in the year 2022.
16. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, M/s Parikh & Associates,Practising Company Secretaries were appointed as the Secretarial Auditors for auditing the secretarial records of the Company for the financial year 2017-2018.
Secretarial audit report as provided by M/s Parikh & Associates, Practising Company Secretaries is annexed to this Report as Annexure- III.
17. AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT:
The Auditors Report and Secretarial Auditors Report do not contain any qualifications, reservations or adverse remarks.
18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with Clause (m) of Sub-section (3) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure -IV.
The Company has not accepted any deposits during the year under report.
20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
As on 31st March 2018 the Company has provided the following Loans, Guarantees and Investments under section 186 of the Companies Act, 2013.
i. Loans :Rs.3,51,00,00/- to Synergy Films Private
Limited Wholly Owned Subsidiary
i. Guarantees: Rs.4,06,50,497 /- to Bank & Financial Institution for the Loans advanced to Synergy Films Private Limited Wholly Owned Subsidiary.
ii. Investments; Rs.2,30,25,048/-(Before Ind As Adjustment it was Rs.81,76,257) for 11,95,360 Equity Shares of Rs.10 each fully paid up in Synergy Films Private Limited Wholly Owned Subsidiary
21. RISK MANAGEMENT POLICY :
The Company has adopted a Risk Management Policy which is implemented throughout the Organisation; Special Emphasis on Risk Management is given during the Annual Budgeting Process and Periodical Monthly Meetings.
22. CORPORATE SOCIAL RESPONSIBILTY POLICY :
The Provisions of Corporate Social Responsibility under section 135 of the Companies Act, 2013 are not applicable to the company. However as a part of CSR initiative, The Company has adopted 15 Mentally Challenged Children who are under rehabilitation in Jaina anupam N.Parmar Charitable Trust, Valsad.
23. RELATED PARTY TRANSACTIONS
Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) in Form AOC- 2 are annexed as Annexure - V to this Report.
24. FORMAL ANNUAL EVALUATION:
An annual evaluation of the Boards own performance, Board committees and individual directors was carried out pursuant to the provisions of the Act in the following manner:
|Sr. No.||Performance evaluation of||Performance evaluation performed by||Criteria|
|1.||Each Individual||Nomination and||Attendance, Contribution to the|
|directors||Remuneration Committee||Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and g u i d a n c e p r o v i d e d , k e y performance aspects in case of executive directors etc.|
|2.||Independent directors;||Entire Board of Directors excluding the director who is being evaluated||Attendance, Contribution to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution, and guidance provided etc.|
|3.||Board, and its committees||All directors||B o a r d c o m p o s i t i o n a n d structure; effectiveness of Board processes, information and functioning, fulfillment of key responsibilities, performance of specific duties and obligations, timely flow of information etc. The assessment of committees based on the terms of reference o f t h e c o m m i t t e e s a n d effectiveness of the meetings|
25. PARTICULARS OF EMPLOYEES
Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the particulars of employees are annexed as Annexure - VI to this Report.
26. DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and Redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2017-18, the Company has not received any complaints on sexual harassment.
27. LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 to BSE where the Companys Shares are listed.
28. INSIDER TRADING REGULATIONS AND CODE OF
The Board of Directors has adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and is available on our website http://www.ecoplastindia.com/code-of-practices-and-procedures.html
29. CORPORATE GOVERNANCE:
In terms of the Regulation 15(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2017, The Company is not required to comply with corporate governance provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2017 during the financial year 2017-18.
Details of Directors Remuneration as required under Schedule V Part II, Section II (A) (IV) of Companies Act 2013 is annexed as Annexure - VII to this Report.
30. MANAGEMENT DISCUSSION ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2017, the Managements discussion and analysis is set out in this Annual Report.
31. SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.
The Directors wish to convey their appreciation to Customers, Suppliers, Bankers, other Stakeholders and specially the employees for their co-operation. The Directors also appreciate the confidence reposed in the Management of the Company by its shareholders.
For and on behalf of the Board of Directors
|Mukul B. Desai|
|Mumbai, 28th May 2018|