PG Foils Ltd Directors Report.

Dear Shareholders,

We have pleasure in presenting the 38th Annual Report, together with the Audited Financial Statements of the Company for the Financial Year ended March 31,2017.

FINANCIAL HIGHLIGHTS

(Rs. in Lacs)
Particulars 2016-17 2015-16
Total Revenue 25633.92 21730.38
Total Expenses 22979.83 21047.89
Profit/(Loss) before Depreciation, Tax and Extraordinary Items 2654.09 682.49
Less: Depreciation Profit/(Loss) before Taxation and Extraordinary Items (252.73) (274.79)
2401.36 407.70
Add: Extraordinary Items NIL 999.94
Profit before Tax 2401.36 1407.64
Less: Current Tax 533.93 482.31
Less/(Add): Deferred Tax 54.40 (43.51)
Profit for the year 1813.04 968.84

DIVIDEND AND TRANSFER TO RESERVES

The Company has not transferred any amount to General Reserve during the year. During the year Board of Directors declared Interim Dividend @ 11% of Rs 1.10 per Equity Share of Rs 10/- each on 06th March, 2017 which has been paid. No final dividend was recommended by the Board and the Interim Dividend declared is the Dividend on the Equity Shares of the Company for the Financial Year Ended March, 2017.

OPERATIONS (GENERAL REVIEW)

During the year your company achieved a Gross turnover excluding trading turnover of Rs. 249.61 Crores as against Rs. 232.44 Crores in the previous year.

Profit before tax for the year is Rs. 24.01 Crores compared to profit of Rs. 14.08 Crores in last year, higher mainly due to extraordinary receipts.

Exports have increased to Rs. 2448.28 Lacs from Rs. 1710.85 Lacs in last year.

ISO 9001-2008 CERTIFICATION

The company have been awarded ISO 9001:2008 certificate on 01st May 2012 by BVQI.

DIRECTORS

Pursuant to the requirements of the Companies Act, 2013 and Articles of Association of the Company, Smt. Sakshi S Shah are liable to retire by rotation at the forth coming Annual General Meeting and being eligible, offers himself for re-appointment. Further the Board of Directors appointed Shri Sahil P Shah (DIN 01603118) as Whole-time Director of the Company with designation "Executive Director" for a period of five years effective from April 1, 2017 subject to the approval of the Shareholders at the ensuing Annual General Meeting. A Resolution to this effect is included as part of the Notice convening the forthcoming Annual General Meeting.

AWARD & RECOGNITION

Our Beloved Shri Pankaj P Shah, Managing Director has been honored and awarded "Indian Leadership Award for Industrial Development" by All India Achievers Foundation, New Delhi and Manufacturer of the year in Foil Industry of India, by Times of India Group, Jaipur.

MANAGEMENT DISUSSION AND ANALYSIS

Pursuant to SEBI (LODR) Regulations, 2015 Report on Management Discussion and Analysis is annexed separately.

INDUSTRIAL RELATIONS

The company continues to maintain cordial relation with its Workers, Supervisors & Officers in all divisions to enable it to achieve better performance.

DEMAT TRADING

As per the directives of The Securities and Exchange Board of India (SEBI), the Companys shares are being compulsorily traded in the dematerialization mode with effect from 2nd of April, 2001. Necessary agreements have been entered by the Company with NSDL, CDSL and with M/s BigShare Services Private Limited, who is registrar for transfer of shares (Demat and physical) of the company.

DIRECTORS RESPONSIBILITY STATEMENT

According to provision of Clause (c) sub-section (3) of section 134 of company act 2013 of your Directors would like to inform the members that the audited accounts for the financial year 31st March 2017 are in full conformity with the requirements of the Companies Act, 2013. The financial results are audited by the statutory auditors M/S Sharma Ashok Kumar & Associates, Chartered Accountants, Pali.

The Directors further confirm that:-

a. The applicable accounting standards have been followed in the preparation of the Annual Accounts and proper explanations have been furnished, relating to material departures, if any;

b. Accounting Policies have been selected and applied consistently and reasonably, and prudent judgments have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March 2017 and of the profit of the Company for the year ended on that date;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and detecting fraud and other irregularities.

d. The annual account has been prepared on a going concern basis.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the requirement of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee was constituted. Details of CSR activities as required under Section 135 of the Companies Act, 2013 are given in Annexure B.

CORPORATE GOVERNANCE

It has been the Endeavour of your Company to follow and implement best practices in corporate governance, in letter and spirit. The following forms part of this Annual Report:

i) Declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel;

ii) Management Discussion and Analysis Report;

iii) Report on Corporate Governance;

iv) Auditors Certificate regarding compliance of conditions of corporate governance.

PARTICULARS OF LOAN, INVESTMENT & GUARNTEE

The company has complied with all the provisions of section 186 of companies act 2013 in relation to Loan, Investment & Guarantee given by the company during the financial year ended 31st March 2017.

WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism/Whistle Blower Policy. The policy provides a channel to the employees to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the code of conduct policy. The mechanism provides for adequate safeguards against victimization of employees to avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. None of the personnel of the Company has been denied access to the Audit Committee.

VIGIL MECHANISM

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 & as per Regulation 22 SEBI (LODR) Regulations, 2015 Company have made a formal Vigil Mechanism Policy which provides detailed procedure to protect the i nterest of employees of the Company.

Your Company has in place a vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of your Companys Code of Conduct. Adequate safeguards are provided against victimization to those who avail of the mechanism and direct Access to the Chairman of the Audit Committee in exceptional cases. The Vigil Mechanism is available on your Companys website www.pgfoils.in

RELATED PARTY TRANSACTION

The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 of companies act 2013 is furnished in Note no. 45 and is attached to this report.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has adequate internal financial control procedures commensurate with its size and nature of business. The Company has identified and documented all key internal financial controls, which impact the financial statements, as part of its Standard Operating Procedures (SOP). The SOPs are designed for all critical processes across all its plants and offices wherein financial transactions are undertaken.

The financial controls are tested for operating effectiveness through ongoing monitoring and review process of the management and independently by the internal auditors. In our view the internal financial controls, affecting the financial statements are adequate and are operating effectively.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill the entire requirement as stipulated in Section 149(6) of the Companies act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies act, 2013 and the relevant rules.

AUDITORS

M/s Sharma Ashok Kumar & Associates, Charted Accountants, Pali the Auditors of the Company, to audit the accounts of the company for the Financial Year 2016-17. As required under the provisions of the Section 139 of the companies act 2013, the Company has obtained written confirmation from M/s Sharma Ashok Kumar & Associates, Chartered Accountants, Pali aware that their appointment if made would be in conformity with the limits specified in the Section.

AUDITORS REPORT

Observations in the Auditors Report read with relevant notes forming part of the accounts are self-explanatory and give the required information.

COST AUDIT

M/s. Rajesh & Company, Cost Accountants, Jaipur have been appointed for auditing cost accounting records of the Company for the year ending 31st March, 2018. Pursuant to the provisions of Section 148 of the Companies Act, 2013 and the Rules made there under, Members are requested to consider the ratification of the remuneration payable to M/s. M/s. Rajesh & Company, Cost Accountants, Jaipur.

The due date for filing of the Cost Audit Reports for the financial year 2016-17 was 30th September, 2017. The Company has filed the Reports with the Ministry of Corporate Affairs within due date. The Company has received letter from Cost Auditor to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.

SECRETARIAL AUDIT

During the year under review, M/S M Sancheti & Associates, Practicing Company Secretary who was appointed as the Secretarial Auditor of the Company has issued the audit report in respect of the secretarial audit of the Company for the financial year ended March 31,2017. The Secretarial Audit Report which forms a part of the Annual Report is self explanatory and requires no comments.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year 2016-2017, no complaints were received by the Company related to sexual harassment

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provision of the Clause (m) of sub-section (3) of section 134, read with Companies Disclosure of particulars in the report of Board of Directors Rules 2014, regarding conservation of Energy, Technology absorption & Foreign Exchange earnings and outgo is given in the Annexure "A" forming part of this report.

ACKNOWLEDGEMENTS

The Board gratefully acknowledges the understanding and support received by the Company from its employees. It also places on record its deep gratitude for the unstinted support the Company has received from the Banks, Institutions, the Central Government, the various State Governments and the local authorities during the year.

Specific acknowledgement is also made for the confidence and understanding shown by the Members in the Company.

REGISTERED OFFICE
6, Neptune Tower, By order of the Board
Ashram Road, For P G Foils Limited
AHMEDABAD-380 009
Place : Pipalia Kalan ( PANKAJ P SHAH )
Date : August 10, 2017 Managing Director
DIN 00160558

ANNEXURE "A" TO DIRECTORS REPORT

STATEMENT OF PARTICULARS UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988

(A) CONSERVATION OF ENERGY

(1) POWER & FUEL CONSUMPTION

CURRENT YEAR PREVIOUS YEAR
(a) ELECTRICITY
(a) Purchased ( Unit KWH) 10291376 8986819
Total Amount (Rs.) 77490263 64475304
Rate per unit (Rs.) 7.53 7.17
(b) Own generation
(i) Through Diesel/ LDO N.A. N.A.
Generator (Units)
Unit per liter of Diesel/LD DO N.A. N.A.
Diesel/LDO Cost per liter N.A. N.A.
(ii) Through steam Turbine N.A. N.A.
Generator Unit
(b) COAL N.A. N.A.
(c) FURNACE OIL N.A. N.A.
Quantity(Liters) N.A. N.A.
Total amount (In lacs) N.A. N.A.
Average rate (per liter) N.A. N.A.

(d) OTHER/INTERNAL GENERATION

(2) CONSUMPTION PER UNIT OF PRODUCTION

Aluminium Foil including Poly coated Cable wrap & laminated flexible packaging

Electricity 1229 Kwh Per MT 1310 Kwh Per MT
Furnace Oil N.A. N.A

(B) TECHNOLOGY ABSORPTION

Efforts made in technology absorption are mentioned in form "B"

(C) FOREIGN EXCHANGE EARNING AND OUTGO

The company has made Export worth Rs. 2448.28 Lacs during the year. Total foreign exchange utilized Rs. 14694.51 Lacs.

FORM B

FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION RESEARCH & DEVELOPMENT

Research and Development (R&D) and benefits derived thereon :

(1) Specific areas in which R&D carried out by the company :-

a) Development of foil suitable for export mainly for Bangladesh.

b) Manufacturing of thin & ultra thin gauge (light gauge) aluminum foil of finer thickness from 6 micron to 200 micron and in widths from 10mm to 1000 mm.

c) Better control in process for improving quality of output

d) Power audit for saving energy and cost.

e) Development of imported foil substitute at new plant.

f) Establishment of ultra modern quality control equipments.

2) Benefits derived as result of the above R&D:-

a) Increase in export orders of Bangladesh & other countries

b) Maintaining competitive position in domestic market saving in power cost

c) Cost reduction in various consumables

d) Reduction in scrap percentage.

e) High Product Quality, one of the best in country.

f) Reduction in power consumption by 6%

3) Future plan of Action :-

a) To achieve zero defect quality.

b) Development of ultra light gauge and other foils as substitute of cheaper imported foil.

c) To create unique product range using different specifications.

4) Expenditure on R & D:-

Capital Expenditure as well as recurring expenditure incurred from time to time during the year on laboratory equipments, tools, spares, handling equipments and salaries of research personnel remain merged with various heads as per established accounting policy and expenditures incurred during the year under review on Research & Development are as follows :

(a) Capital Expenditure : NIL

(b) Recurring expenditure : NIL

(c) Total research & Development expenditure : NIL

d) Total R&D Expenditure as a percentage of total turnover : NIL

REGISTERED OFFICE
6, Neptune Tower, By order of the Board
Ashram Road, For P G Foils Limited
AHMEDABAD-380 009
Place : Pipalia Kalan (PANKAJ P SHAH)
Date : August 10, 2017 Managing Director
DIN 00160558