DIRECTORS' REPORT & MANAGEMENT DISCUSSION & ANALYSIS To The Members, The Board of Directors is pleased to present herewith the Twenty third Annual Report of your Company together with the Audited Accounts for the year ended 31st March, 2015. The Management Discussion and Analysis has also been incorporated into this report. HIGHLIGHTS OF PERFORMANCE • Operating Revenues for the year increased by around 0.80 % to Rs. 4524/- Lacs as compared to Rs. 4488/- Lacs in 2013-14. • Profit after tax for the year decreased by around 77.61 % to Rs.113.38 Lacs as compared to Rs.506.40 Lacs in 2013-14. DIVIDEND To consolidate the future position of the Company and support the fund requirements to stimulate growth, your Board of Directors regret their inability to recommend any dividend for the year. RESERVES During the year under review, no amount was transferred to General Reserve. SHARE CAPITAL The paid up Equity Share Capital as at March, 31, 2015 stood at Rs.1,24,985,500 During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options as sweat equity. As on March, 31, 2015, none of the Directors of the Company hold instruments convertible into equity shares of the Company. FINANCE AND ACCOUNTS Your Company prepares its financial statements in compliances with the requirements of the Companies Act, 2013 and the Generally Accepted Accounting Principles (GAAP) in India. The financial statements have been prepared on historical cost basis. The estimates and judgments relating to the financial statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for the year ended March, 31, 2015. There is no audit qualification in financial statements by the statutory auditors for the year under review. PARTICULATS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY Details of loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to Financial Statements. DEPOSITS The Company has never accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014, or under Chapter V of the Act. RELATED PARTY TRANSACTIONS All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. The Company has developed a Related Party Transactions framework through Standard Operating Procedures for the purpose of identification and monitoring of such transactions. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Your Company has an effective Internal control and risk-mitigation system which are constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a Management Information System, which is an integral part of the control mechanism. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee. RISK MANAGEMENT During the year under review. The Board took effective steps for risk management to identity and evaluate elements of business risk. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks. Some of the risks that the Company is expected to are : Financial Risks Given the interest rate fluctuations, the Company has adopted to prudent and conservative risk mitigation strategy to minimize interest costs. Commodity Price Risks The Company is exposed to the risk of price fluctuation of raw materials as well as finished goods. The Company proactively manages these risks through forward booking, inventory management and proactive vendor development practices. The Company's reputation for quality, product differentiation and service, coupled with existence of powerful brand image with marketing network mitigates the impact of price risk on finished goods. Regulatory Risks The company is exposed to risks attached to various statutes and regulations. The Company is mitigating these risks through regular review of legal compliances carried out through internal as well as external compliance audits. Human Resources Risks Retaining the existing talent pool and attracting new talent are major risks. The Company has initiated various measures including rolling out strategic talent management system, training and integration of learning and development activities. PERFORMANCE EVALUATION OF BOARD Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. DIRECTORS AND KEY MANAGERIAL PERSONNEL Details of Directors Seeking Appointment / Re-appointment at the Annual General Meeting. Mr. Bansilal I Vaghani, and Mr.Madhup B.Vaghani, Directors of the Company, retires by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for re-appointment. Mr. Chiranjiv I. Vaghani, Director has resigned during the year under review. Mr. Viren Bhimani and Mr.Devendra Negi both Independent Director of the Company were appointed by shareholders at the Extraordinary General Meeting held on 31st March, 2015. The Board of Directors had on the recommendation of remuneration and nominee committee appointed Mr. Pankaj Bhaya as Chief Financial Officer of the Company w.e.f. 29th May, 2014 and approved remuneration payable to him. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD MEETINGS During the year under review, the Company has conducted 6 Board Meetings on 29th May 2014,14th August, 2014,28th August, 2014, 14* November, 2014, 13th February, 2015 and 4th March, 2015. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. AUDITORS M/s. Mehta Chokshi and Shah, Chartered Accountants, Mumbai being eligible, offer themselves for re-appointment. If reappointed, it will be within the prescribed limits specified in Section 139 of the Companies Act, 2013. Members are requested to appoint the auditors and to fix their remuneration. SECRETARIAL AUDIT As required under Section 204 of the Companies Act, 2013, Secretarial Audit Report as obtained from Mr. Shailesh Kachalia, Practising Company Secretary is annexed and formspart of the Board Report. OBSERVATIONS - AUDITOR & SECRETARIAL AUDITOR There are no qualifications contained in the Auditors Report. Regarding the qualifications made in the Secretarial Audit Report in respect of: 1. Non-appointment of Company Secretary under the Provisions of Section 203 of the Companies Act, 2013, we would like to state that the Company took effective steps to appoint the Company Secretary but considering the status of the Company being BIFR Company, Scope of work and non availability of opportunities in the field of various corporate laws, the Company was not in a position to appoint and retain the services of Company Secretary. However, the Board of Directors are making continuous efforts to appoint Company Secretary as required. 2. Non-appointment of Woman Director as required under the provisions of Section 149 of the Companies Act, 2013 and Clause 49 of listing agreement, we would like to state that as the Company is SICK Company and registered with BIFR, we are restricted to make any changes in the constitution of Board of Directors. Hence in view of the said facts, the Company has not appointed Woman Director as required. 3. In respect of non filing of notice of book closure to BSE Ltd., the Company replied to the show cause notice received with request to condone the error and undertake to file the same as required by listing agreement. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form No.MGT-9, as provided under Section 92 of the Companies Act, 2013, is annexed and forms part of the board report. MATERIAL CHANGES AND COMMITMENTS There are no material changes having taken place affecting the financial position of the Company from the date of closure of financial year till the signing of Accounts. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS. There are no significant and material orders passed by the Regulators / courts that would impact the going concern status of the Company and its future operations. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. and applied them consistently and made judgements 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, 2015 and of the profit of the Company for the year ended on that date.; c. that 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. that the annual financial statements have been prepared on a going concern basis; e. that the Directors 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. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A) Conservation of Energy a) TheCompany has taken all measures to conserve the Energy by installing latest equipments for conservation of Energy. b) The cumulative effect of the Energy conservation steps taken by the Company has considerably reduced the consumption of Energy and saved the cost of the Company. B) Information relating to Technology absorption 1. Research & Development (R & D) (a) Specific areas in which R & D is carried out by the Company. New product development, New manufacturing process development, Product upgradation, Cost reduction, Mould designing and development, New application of theremoware product, Water Purification System. (b) Benefits derived as a result of the R & D. (i) Company is in position to introduce varied new products every year to meet changing consumer preferences. The Company is in position to cater to a wider segment of consumer durables and plastics based industrial products. (c) Future Plan of Action. . (i) Emphasis is being laid on development & marketing of new product and value addition to existing range of products, for both export as well as domestic market. (ii) Business Process Re - Engineering. (d) Expenditure on Research & Development under the head "product Design & Development Expenses" is being accounted under relevant heads of expenses. 2. Technology Absorption, Adaptation and Innovation. (a) Efforts in brief, made towards technology absorption, adaptation and innovation, as enumerated in Clause 1 above. (b) Benefits, derived as a result of the above efforts, product up gradation, cost reduction & new products developments as enumerated in Clause 1 above. C) FOREIGN EXCHANGE EARNINGS AND OUT GO: Total foreign exchange used for Rs. NIL. Total foreign exchange earned Rs. NIL. AUDIT COMMITTEE The Audit Committee was re-constituted on 28th August, 2014. The Committee now comprises Mr.Devendra Negi as Chairman, and Mr.Viren Bhimani and Mr.Bansilal I Vaghani as members. The Whole Time Director and the Chief Financial Officer are permanent invitees to the meetings. The details of all related party transactions, if any, are placed periodically before the Audit Committee. During the year there were no instances where the Board had not accepted the recommendations of the Audit Committee. VIGIL MECHANISM The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. It ensures that strict confidentiality is maintained whilst dealing with concerns and also no discrimination will be meted out to any person for a genuinely raised concern. Any suspected or confirmed incident of fraud / misconduct can be reported thereof. NOMINATION AND REMUNERATION COMMITTEE The Company has constituted a Nomination and Remuneration Committee pursuant to Section 178(1) of the Companies Act, 2013 and has defined the policy on Directors' and Senior Managements' appointment and payment of remuneration including criteria for determining their qualifications, positive attributes and independence of a Director. PARTICULARS OF EMPLOYEES No employee of the Company is receiving remuneration as per the limits mentioned in Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. COST AUDIT As per the requirements of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to moulding Division every year. The Company is not required to audit the prescribed Cost Audit Records by practicing cost accountant as per the Companies (cost records and audit) (Amendment) Rules, 2015. The cost audit report for the financial year 2013-14 was filed with the Ministry of Corporate Affairs on 30th June, 2014. ENVIRONMENT AND SAFETY The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with BSE Ltd., a separate section on corporate governance practices followed by the Company, together with a certificate from the Practicing Company Secretary confirming compliances forms on integral part of this Report. SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES Your Company does not have any Subsidiaries or Joint Ventures or Associate companies, as defined under the Companies Act, 2013. ACKNOWLEDGEMENT Your Directors would like to express their grateful appreciation for the assistance and co-operation received from all organizations connected with its business during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives and Staff of the Company. Your Directors are also deeply grateful for the confidence and faith shown by the Shareholders of the Company in them. BY ORDER OF THE BOARD For MPL PLASTICS LIMITED B.I.VAGHANI CHAIRMAN (DIN: 00067088) CIN NO. U25209MH1992PLC066635 Website: www.mplindia.in E-mail: mplho@mplindia.in Registered Office: 2, Ashish Warehouse Corporation, Punjab Foundry Industrial Estate, Near Classic Studio, Mira Bhayander Road, Kashimira, Mira Road (East), Dist. Thane - 401104 Date: 14th August, 2015 Place: Thane. |