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Your Directors have pleasure in presenting the 43rd Annual Report and the Audited Accounts for the financial year ending on 31st March 2018.
|Particulars||As at 31st March 2018||As at 31st March 2017|
|Revenue from operations||4,169.59||4,378.29|
|Profit /(Loss) before Interest and Depreciation||126.49||87.22|
|Depreciation & Amortisation Expense||57.14||54.31|
|Profit /(Loss) before Tax||43.59||23.06|
|Provision for Tax||-||-|
|Profit /(Loss)after Tax||43.59||23.06|
|Proposed Dividend on Equity Shares||-||-|
|Balance Brought-forward from Balance -Sheet||(6,009.16)||(6,032.23)|
|Balance carried forward to Balance-Sheet||(5,965.57)||(6,009.16)|
STATE OF COMPANYS AFFAIRS
The revenue from operations recorded for the financial year ended 31st March 2018 was H4169.59 lakhs as compared to H4378.29 lakhs in the previous financial year ended 31st March 2017 marking a decrease in the turnover by 4.77 per cent. The growth was relatively lower due to the lingering impact of demonetization in November 2016 and implementation of the Goods and Service Tax (GST) during the year. Since the economy is slowly picking up again, the Company is taking necessary steps to further increase the turnover and margins during the current financial year. The Margherita unit of the Company has contributed substantially to the increase in the turnover of the Company. The operations at the Hosur Unit of the Company were suspended since 26th February 2018 after the workers illegally struck work on 27th November 2017 for an exorbitant wage increase and other unreasonable demands. However, the Company has made alternate arrangements for job work of its laminate products from Gujarat to maintain regular supply. This arrangement is meeting the demands of the Company since January 2018. The Companys paramount objective would be to improve its profitability by focusing upon cost saving measures and cutting down unproductive costs and at the same time strengthening its brand to realize its potential.
The working capital cycle needs improvement and the Company is continuously working upon this task.
HR policies of the Company are aimed at attracting, motivating and retaining employees at all levels. Relations with employees continue to be cordial and harmonious in the plywood division. However, the employees at the Hosur laminate plant have raised exorbitant and unreasonable demands, which the Company is currently suitably addressing.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of the business of the Company.
The paid up Equity Share Capital as on 31st March 2018 was H5.85 Crores. During the year under review, the Company has neither issued any shares or any convertible instruments, nor has bought back any of its securities.
Due to nominal profit available for appropriation, your Directors are unable to recommend any dividend for the year under review.
AMOUNT TRANSFERRED TO INVESTOR EDUCATION & PROTECTION FUND
The provisions of Section 125 of the Companies Act, 2013 is not applicable for the Company as there was no dividend declared and paid in the last financial year.
During the year under review, the Company has not accepted deposits falling within the ambit of Section 73 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, your Company has either made a loan, or given any guarantee or provided any security and/or made investments and thus the compliance of Section 186 of the Companies Act, 2013 is applicable.
SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES
Your Company has no Subsidiaries, Joint Ventures & Associate Companies.
The Companys shares are available for dematerialization with National Securities Depository Ltd. (NSDL) and Central Depository Services (I) Ltd. (CDSL). 74.90 per cent of the total shareholding of the Company was held in dematerialized form as on 31st March 2018.
Piyush Periwal, DIN: 00698796, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment. The term of Piyush Periwal as Vice-Chairman & Managing Director completed on 31st July 2017. As Piyush Periwal is presently associated with managing the affairs of the Company, it was decided to reappoint him as the Managing Director for a further period of 5 years commencing 1st August 2017. The Board decided to re-designate Piyush Periwal as the Chairman & Managing Director with effect from 1st August 2017. The Board also decided to revise the remuneration payable to Piyush Periwal, Chairman & Managing Director, on the recommendation of the Remuneration Committee.
Laxmi Narain Baheti, DIN: 08160915 was appointed as Independent Director of the Company with effect from 30th May 2018 as per Companies Act, 2013 by the Board. Necessary Resolution regarding his appointment has been incorporated in the Notice convening the 43rd Annual General Meeting.
Resolution seeking your approval on this item along with profile of the Director and the terms and conditions are included in the notice convening the Annual General Meeting.
As required under Regulation 34 read with Schedule V of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter called "the Listing Regulations"), a separate report on Corporate Governance is enclosed as a part of this Annual Report, duly certified by Jhunjhunwala & Co, Chartered Accountants, the Statutory Auditors of the Company, confirming the compliance of the conditions of Corporate Governance.
During the year under review, five Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The provisions of the Companies Act, 2013 and SEBI Regulations were adhered to while considering the time gap between two meetings.
DECLARATIONS BY INDEPENDENT DIRECTORS
Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under provisions of the Listing Regulations.
Independent Directors are familiarized with their roles, rights and responsibilities as well as with the nature of industry and business model through an induction program at the time of their appointment as Directors and through presentations on economy & industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time. The terms & conditions of appointment of Independent Directors can be accessed at www.nationalplywood.net.
DIRECTORS RESPONSIBILITY STATEMENT
On the basis of compliance certificates received from the executives of the Company & subject to the disclosures in the annual accounts & also on the basis of the discussions with the Statutory Auditors of the Company from time to time, your Directors make the following statements, pursuant to Section 134(3)(c) of the Companies Act, 2013 with respect to Directors Responsibility Statement:
a) that in the preparation of the annual accounts for the year ended 31st March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2018 and of the profit of the Company for the year ended on that date;
c) that 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 for preventing and detecting fraud and other irregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
In compliance with the Companies Act, 2013 and Regulation 17 of Listing Regulations, the Board adopted a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functions such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues, etc.
The evaluation criteria of the Company can be accessed at www.nationalplywood.net.
The Company has applied to the Bombay Stock Exchange for revocation of its suspension due to non-compliance issues. The BSE replied vide a letter dated 05th March 2018 stating in-principle approval of revocation of suspension subject to some formalities that the Company is complying with at the earliest.
The Company has applied on 27th March 2018 to CSE for voluntary delisting of the equity shares of the company for which reply is still awaited from the exchange.
NOMINATION AND REMUNERATION POLICY
The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors and Senior Management along with their remuneration. The remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report.
The Nomination & Remuneration Policy of the Company can be accessed at www. nationalplywood.net.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems and procedures designed to effectively control the operations of its various functions. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets.
Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies & procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the internal control and systems followed by the Company.
INDIAN ACCOUNTING STANDARDS (IND AS), 2015
The annexed financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
The Company has laid down a well-defined Risk Management Policy to identify the risks associated with the business of the Company on a periodical basis and review the minimization programs to mitigate them. More details are given in the Management Discussion and Analysis report in the Annual Report.
The Risk Management Policy of the Company can be accessed at www.nationalplywood.net.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 and Schedule - VII of the Companies Act, 2013, Corporate Social Responsibility (CSR) is not applicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report as required under the Listing Regulations forms part of this Report and is provided under Annexure 1.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
As per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women at Workplace.
During the financial year ended 31st March 2018, the Company had not received any complaint of harassment.
The Prevention of Sexual Harassment Policy of the Company can be accessed at www. nationalplywood.net.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 are provided in Annexure 3 of the Report.
RELATED PARTY TRANSACTIONS
All the related party transactions of the Company are reviewed by the Audit Committee and presented to the Board on a quarterly basis. These transactions were at arms length basis and in the ordinary course of business are compliant with the provisions of Section 188 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 and Listing Regulations. There were no materially significant related party transactions entered into by the Company. Hence Form AOC-2 under these rules is not applicable to the Company. The disclosures relating to related parties are explained in Note 25 in the Notes to Accounts attached to the Balance Sheet.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for employees and directors to report concerns about unethical behavior. No person has been denied access to the Chairman of the Audit Committee.
During the financial year ended 31st March 2018 under review, there were no cases pertaining to Whistle Blower Policy.
The said policy of the Company can be accessed at www.nationalplywood.net.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY
There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Companys future operations.
STATUTORY AUDITORS AND AUDITORS REPORT
The term of appointment of M/s. Jhunjhunwala & Co., Chartered Accountants, Kolkata (Firm Registration No. 302169E) as the Statutory
Auditors of the Company will expire at the ensuing Annual General Meeting. As per provision of Section 139(2), the Company cannot reappoint its retiring auditor if they have completed 5 years of consecutive services as the individual auditor of the Company. In view of this, the Audit Committee has recommended that M/s. L.N. Malik & Co., Chartered Accountants, New Delhi (Firm Registration No. 015992N), be appointed as Statutory Auditor of the Company at the next Annual General Meeting.
M/s. L.N. Malik & Co., Chartered Accountants, New Delhi have expressed their willingness to accept their appointment as Statutory Auditor of the Company for the financial year 201819 and have further confirmed their eligibility for appointment as Statutory Auditor of the Company in accordance with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 read with third proviso of Section 139(2) of the Companies Act, 2013. The Board has recommended to the shareholders their appointment for the financial year 2018-19 at the ensuing Annual General Meeting.
The report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remarks or disclaimer given by the Auditors in their Report.
SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company has appointed M/S. Maheshwari R & Associates, (Membership No. 5126), Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2018 is provided as Annexure 2. There were no qualifications, reservations or adverse remarks given by the Secretarial Auditors of the Company.
PARTICULARS OF EMPLOYEES
No employee of the Company was drawing remuneration of HI .02 crores or more if employed for full year, or H8.5 lakhs or more per month if employed for part of the year. Therefore, the information required under Section 197 of
the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company.
Information required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure 4 to this Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of the Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
A statement giving details of conservation of energy, technology absorption and foreign exchange earnings and outgo in accordance with Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided in Annexure 5 to this Report.
The Directors place on record their sincere thanks and appreciation for the support and cooperation received from the financial institutions, banks, dealers, suppliers, customers, shareholders, various government authorities and other business associates of the Company. Your Directors also place on record their appreciation for the dedication and commitment of all employees in achieving and sustaining excellence in all areas of the business and look forward to the continued support.
|For and on behalf of the Board of Director|
|NATIONAL PLYWOOD INDUSTRIES LIMITED|
|Place: Kolkata||Chairman & Managing Director|
|Date: 30th May, 2018||DIN: 00698796|