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Your Directors take pleasure in presenting the 25th Annual Report along with the Audited Statement of Accounts of the Company for the year ended March 31,2019.
The Standalone financial performance of the Company for the financial year ended March 31,2019 is summarized below
|Revenue from Operation||11,140.00||9,638.45|
|Profit before Depreciation, Finance Cost and Tax||1,136.08||1,339.19|
|Less : Depreciation, Amortisation & Impairment||201.04||147.30|
|Less : Interest & Finance Cost||247.88||145.77|
|Profit before Taxation||687.16||1,046.12|
|Less : Current Tax||147.36||234.20|
|Profit after Tax||546.59||753.70|
|Other Comprehensive Income (net of tax)||(3.61)||(6.28)|
|Total Comprehensive Income||542.97||747.43|
|Add : Balance b/f from previous year||3,996.92||3,564.31|
|Balance available for appropriation||4,539.92||4,311.73|
|Less : Proposed Dividend||220.01||220.01|
|Less: Dividend Tax||44.79||44.79|
|Less : General Reserve||50.00||50.00|
|Balance c/f to Balance Sheet||4,225.12||3,996.93|
Review of Operation Standalone
Your company revenue from local operations has increased by 19.26% over the previous year. The local revenue was र 10,110.64 lakhs (Net of GST) as compared to र 8,477.51 lakhs (Net of GST) in the previous year. This increase was mainly because of addition of new products like Road Barriers, Industrial Pallets by Unit II at Daman and higher production by existing units. The exports of the company were down at र 1,029.35 lakhs for the year as compared to र 1,160.94 lakhs in the previous year.
Earnings before Depreciation, Finance Cost and Tax for the year was र 1,136.08 lakhs as compared to र 1,339.19 lakhs in the last year. The decrease in EBITA was mainly due to higher Raw Material Cost.
Your company achieved total revenue (Net) of र 13,414.63 lakhs as against र 10,533.50 lakhs in previous year at a increase of 27.35 % and net profits at र 948.67 lakhs as compared to र 950.34 lakhs in previous year.
Your Companys performance is discussed in detail in the Management Discussion & Analysis Report.
JOINT VENTURE & SUBSIDIARY COMPANIES
As at March 31,2019 the Company is having one Joint Venture Company, Prima Dee-lite Plastics S.A.R.L., located at Cameroon, West Africa which has displayed yet another robust performance. The turnover of the company has shown 24% growth in comparison with last year.
The Company is also having one Subsidiary company, Prima Union Plasticos S.A., which has performed better than last year and registered marginal profit in its 2018 calendar year and expected to earn better in current calendar year.
In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries/ Joint Venture Companies is set out in the prescribed form AOC-1 is annexed herewith as Annexure - A.
As per section 136 of the Companies Act, 2013, the Annual Report of company contains standalone & consolidated financial statements and is also available on its website:www.primaplastics.com . Further Audited Financial Statement of Subsidiary Company has also been placed on its website: www.primaplastics.com
CASH FLOW & CONSOLIDATED ACCOUNTS
As required under the regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the "SEBI Listing Regulations"), a cash flow statement is part of the Annual Report 2018-2019.The consolidated financial statement of your Company for the financial year 2018-19 are prepared in compliance with applicable provisions of the Companies Act, 2013 (hereinafter referred to as the "the Act") read with the Rules issued thereunder, applicable Accounting Standards and the provisions of SEBI Listing Regulations. The consolidated financial statement has been prepared on the basis of audited financial statement as of March 31,2019 of your Company and Subsidiary Company as approved by the Board of Directors of respective Companies. Consolidated accounts with Joint Venture Company was prepared for their Audited Financial Statements as at December 31,2018.
TRANSFER TO RESERVES
The Company proposes to transfer र 50.00 Lakhs to the General Reserve out of the amount available for appropriations र 4,275.12 and an amount of र 4,225.12 Lakhs is proposed to be retained in the Profit and Loss Account. The Reserve on standalone basis, at the beginning of year were र 5,284.30 Lakhs. The Reserve at the end of year is र 5,562.47 Lakhs.
The Board of Directors of your company is pleased to recommend a dividend of र 1 per equity share of the face value of र 10 each (@10%) which is subject to consideration and approval of the Shareholders at the ensuing Annual General Meeting of the Company, and shall be payable to those Shareholders whose names appear in the Register of Members as on the Record Date. The total Dividend on equity shares including Dividend Distribution Tax for FY 2019 would aggregate to र 132.30 lakhs, resulting in payout of 19.25% of the Standalone Profit of the Company.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.
The Companys paid-up Equity Share Capital continues to stand at 1,100.05 lakhs as at March 31,2019.
During the year, the Company has not issued any shares or convertible securities. The Company does not have any Scheme for issue of shares including sweat equity shares to the employees or Directors of the Company.
AWARDS AND RECOGNITIONS
Your Company won Top Export Award declared by PLEX Council of Government of India for its export performance for financial year 2016-17 and top Export Award (Runner up) for financial year 2015-16.
The Board of Directors of the Company had adopted a policy for Determining Material Subsidiary Company in line with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the website of the Company www. primaplastics.com. Prima Union Plasticos S.A., Guatemala is Material Subsidiary for FY 2019-20.
DISCLOSURE RELATING TO BOARD, COMMITTEES AND POLICIES Board of Director
The Companys Board comprises of seven members. Shri. Bhaskar M. Parekh, Executive Chairman, Shri. Dilip M. Parekh, Managing Director and Smt. Hina V Mehta, Women director (Non-executive) which represents the Promoter Group of Company and further four other Non-Executive Directors includes - Shri. Mulchand S. Chheda, Shri. Krishnakant V Chitalia, Shri. Rasiklal M. Doshi, and
Shri. Snehal N. Muzoomdar (Additional Director) who are independent in terms of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013. The Directors are reputed persons with diverse functional expertise and industry experience relevant to fulfilling the Companys objectives and strategic goals.
As per the provisions of the Companies Act, 2013, Shri. Bhaskar M Parekh, Executive Chairman who retires by rotation at the Annual General Meeting and being eligible, offers himself for re-appointment to the Board. Him profile details are contained in the accompanying Notice of the AGM.
During the year Shri. Snehal N. Muzoomdar, was appointed as additional Director on January 29, 2019 by the Board of Directors till the conclusion of ensuing AGM, and was also appointed as Independent Director for a period of five years subject to approval of members at ensuing AGM.
The first term of Shri. Mulchand S. Chheda, Shri. Krishnakant V Chitalia and Shri. Rasiklal M. Doshi is expiring on August 12, 2019. The Nomination Remuneration Committee and board has recommended the reappointment of Shri. Mulchand S. Chheda, Shri. Krishnakant V Chitalia and Shri. Rasiklal M. Doshi as Independent Directors of the Company for 2nd term of five years based on evaluation report of Directors.
Further the current term of Shri. Bhaskar M. Parekh, Executive Chairman of the Company and Shri. Dilip M. Parekh, Managing Director of the Company are also expiring on August 31, 2019. The Board based on the recommendation of Nomination & remuneration Committee has recommended their re-appointed them for a period of three years subject to approval of members at ensuing AGM.
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 enhance organisation performance.
The committee has received declaration from all the Independent Directors of the Company confirming they meet the criteria of Independence under the Act and SEBI listing Regulation. Further Company have also take declaration complying various codes and policies applicable to Directors.
The Nomination and Remuneration Committee is fully empowered to determine /approve and revise, subject to necessary approvals, the remuneration of managerial personnel, after taking into account the financial position of the Company, trends in the industry, qualifications, experience, past performance and past remuneration, etc. The Non-Executive Directors are paid sitting fees for every meeting of the Board and its Audit Committee attended by them.
The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy relating to remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees, along with the criteria for appointment and removal of the Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The detailed Remuneration Policy is available on the website of the Company www.primaplastics.com . The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors and is within the prescribed limits of the Companies Act, 2013.
The Company periodically discloses details of holding of its promoter group and persons acting in concert in the shareholding pattern and other filings with the Stock Exchange.
Key Managerial Personnels (KMP)
As on March 31,2019, Shri. Dilip M. Parekh, Managing Director (DIN No. 00166385), Shri. Dharmesh R. Sachade (w.e.f. 03.11.2018), Chief Financial Officer and Ms. Nidhi M. Shah, Company Secretary & Compliance Officer are the Key Managerial Personnels of your Company in accordance with the provisions of Sections 2(51), read with 203 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
During the year Shri. Manoj O. Toshniwal resigned the post of Chief Financial Officer w.e.f. 02.11.2018 and in his place Shri. Dharmesh R. Sachade was appointed as Chief Financial Officer w.e.f 03.11.2018 by the Board of Directors.
The Board of Directors met 4 times during financial year 2018-19. The details of the meetings and the attendance of the Directors are mentioned in the Corporate Governance Report.
The Board has established various 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, Stakeholders Relationship Committee, Internal Complaints Committee and CSR Committee. The composition, terms of reference, number of meetings held and business transacted by the Committees is given in the Corporate Governance Report.
The Board of directors of the Company work with Nomination Remuneration Committee to lay down the evaluation criteria for the performance of the Chairman, the board, the committees, Executive, Non-Executive and Independent Directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning composition of Committees, culture, execution and performance of specific duties, obligations and governance in compliance with applicable laws, regulation and guideline.
The Annual Performance Evaluation was carried out for the financial year 2018 - 19 by the Board in respect of its own performance, the evaluation of the working Committees, Directors through peer evaluation excluding director being evaluated.
Further The Independent Directors, in their separate meeting also evaluated the performance of the Board, the Chairperson and the Non-Independent Directors. The result of the evaluation is satisfactory and adequate and meets the requirements of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on March 31,2019 and states that:
a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;
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 as at March 31,2019 and of the profit of the Company for the year ended on that date;
c) the Directors have taken proper and sufficient care 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 for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the Annual Accounts on a going concern basis;
e) 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
f) 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.
INTERNAL FINANCIAL CONTROLS
The Company has in place Internal Financial Control System, commensurate with size and complexity of its operations, to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. During the year under review, no material or serious observation were received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.
Internal Auditors comprising of professional Chartered Accountants monitor and evaluate the efficacy of Internal Financial Control Systems in the Company, its compliance with operating system, accounting procedures and policies at all the locations of the Company. Based on their report of Internal Audit function, corrective actions in the respective area are undertaken and controls are strengthened. Significant audit observations and corrective action suggested are presented to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this report and provides details of the overall industry structure, economic developments, performance and state of affairs of your Companys internal controls and their adequacy, risk management systems and other material developments during the financial year 2018-19.
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI Listing Regulations forms an integral part of this Report. The requisite certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Particulars of loans given, Investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the notes to the standalone financial statement.
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 arms length basis. However, the amount of loan given to Subsidiary in USD is increased as at March 31, 2019 due to fluctuation in Foreign Exchange rates, resulting in Material Related party transaction as per SEBI Listing Regulations. The policy on materiality of related party transactions as approved by the board may be accessed on Company website www. primaplastics.com
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 are stated in Annexure - B.
AUDITORS & AUDITORS REPORT Statutory Auditors & their Report
In accordance with the provisions of Companies Act, 2013, at the Annual General Meeting held on August 12, 2017 the shareholders had appointed M/s. Khimji Kunverji & Co. Chartered Accountants (Firm Registration No. 105146W) for a term of 5 years i.e. upto the conclusion of 28th Annual General Meeting. The Auditors have also confirmed that their appointment is as per the provisions of Section 141 of the Companies Act, 2013 and rules thereunder. Further the Statutory Auditors M/s. Khimji Kunverji & Co. has been converted into a LLP viz. Khimji Kunverji & Co LLP (Formerly Khimji Kunverji & Co - 105146W) w.e.f May 8, 2019, the board took the note of the same.
Further the notes on Financial Statements referred in the Auditors Report are self-explanatory and do not call for any further comments. There is no qualification or adverse remark in Auditors report. There is no incident of fraud requiring reporting by the auditors under Section 143(12) of the Companies Act, 2013.
Secretarial Auditors & their Report
The Board of Directors had appointed Shri. Sadashiv V Shet, Practicing Company Secretary to undertake the Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31,2019 is annexed herewith this report as Annexure - C. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
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. The same is also available available on www.primaplastics.com .
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:
a. Issue of equity shares with differential rights as to dividend or voting or otherwise.
b. Issue of shares (sweat equity shares) to employees of the Company under ESOS.
c. Details relating to deposits covered under chapter V of the Act.
d. Neither the Managing Director nor the Whole Time Director of the Company received any remuneration or commission from any of its subsidiary.
e. No significant material orders were passed by the Regulators or Courts or Tribunals which impacts the going concern status and Company operations in the future.
BUSINESS RISK MANAGEMENT
A Risk Management Policy and framework 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 Companys 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 Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company believes in the philosophy of giving back to the society. The Companys primary focus has been on health care along with ensuring up-lift of the differently abled persons belonging to the economically challenged and deprived sections of the society. The CSR Committee has formulated and recommended to the Board CSR Policy indicating activities to be undertaken by the Company. The Policy of the Company can be accessed at www.primaplastics.com
During the year under review, the Company spent र 1,200,070/- as against its statutory obligation of र 1,634,500/-. A brief report on CSR activities undertaken during the year and note on unspent amount, as required under Section 135 of the Companies Act, 2013, is annexed as Annexure - E to this Report.
PARTICULARS OF EMPLOYEES
During the year, there was no employee in receipt of remuneration as prescribed in the Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The prescribed particulars of employees as required under Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - F and forms part of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of energy, technology absorption, foreign exchange earnings and outgo required to be given pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure G and forms part of this report.
The Company has formulated Whistle Blower Policy with a view to (i) providing a mechanism for directors and employees to report their genuine concerns about unethical behaviour, actual or suspected fraud or violation of the companys code of conduct; (ii) the safeguards available against victimisation and (iii) direct access to the higher levels of supervisors/the Chairman of the Audit Committee, in appropriate or exceptional cases. The Whistle Blower Policy is put on the Companys website and can be accessed at www.primaplastics.com .
HEALTH, SAFETY & ENVIRONMENT
Your Company gives equal priority to ensuring Health and Safety of its employees and the Environment. Your Company has a Policy on Health, Safety and Environment and has received certification under ISO 14001:2015 Standard for Daman plant during the year under review.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("The Rules"), during the year the Company had transferred unpaid or unclaimed dividends of FY 2010-11 amounting to र 310,773/- and corresponding 11705 equity shares held by shareholders whose dividend was unclaimed and unpaid from last seven consecutive year to the IEPF Authority.
Further, the Company shall be transferring the unclaimed Dividend for the financial year 2011-2012 to the IEPF Account on expiry of seven years.
Details of date and year of declaration of dividend, the unpaid amount lying in the Unpaid Dividend Account in respect of the last seven years, due for transfer of such unpaid amount to the Fund, refund process and other details is given under Corporate Governance Report. Shri. Jayant Bhatt, Finance Manager is appointed as Nodal Officer of the Company.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
During the financial year, your Company has complied with applicable Secretarial Standards issued by Institute of Company Secretaries of India.
The Directors wish to convey their gratitude and appreciation to all of the employees of the Company at all its locations for their tremendous personal efforts as well as their collective dedication and contribution to the Companys 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 of Directors|
|Bhaskar M. Parekh|
|Date: May 22, 2019||(DIN - 00166520)|
|Place: Mumbai||Executive Chairman|