Promact Plastics Limited DIRECTORS' REPORT Dear Shareholders, 1. Your Directors present the 31st ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2014-15 ended 31st March, 2015. 2. DIVIDEND: As the Company has accumulated losses, your Directors are unable to recommend any Dividend for the Year 2014-15. 3. SALES & WORKING RESULTS: The Company has generated revenue of Rs. 83.20 lacs during the year under review as compared to Rs. 62.81 lacs during 2013-14. The Company has earned other income of Rs. 21.59 lacs during the year under review. The Profit before Interest and Depreciation during the year 2014-15 was Rs. 78.83 lacs as compared to Profit of Rs. 78.83 Lacs during the year 2013-14. As the Company had to provide for Interest of Rs. 152.93 Lacs during the year under review, the Loss before Depreciation was Rs. 74.10 lacs compared with Loss of Rs. 89.25 lacs during 2013-14. The Company provided Rs. 6.38 lacs for Depreciation and therefore Loss before considering Exceptional items stood at Rs. 80.48 lacs during the year under review compared to Loss of Rs. 97.02 lacs for the year 2013-14. After taking into account Profit on Exceptional items of Rs. 272.07 lacs, the Net Profit for the year under review stood at Rs. 191.59 lacs as against Net Loss of Rs. 76.38 lacs during 2013-14. 4. FINANCE: 4.1 During the year under review, the Company was generally regular in payment of Principal and Interest to the Financial Institutions/Banks. The Company is enjoying Working Capital Facilities from Mehsana Urban CoOperative Bank Limited. 4.2 The Income tax and Sales tax Assessment of the Company have been completed up to Assessment Year 2012-13 and the Financial Year 2009-10 respectively. 5. DISCONTINUANCE OF BUSINESS: The Company has discontinued the running business of HDPE/PP Woven Bags, Fabrics and Tarpaulin in view of unviable operations. 6. SALE OF WOVEN SACKS PLANT': As the operations of 'Woven Sacks' have been non-operational / unviable, the management decided to dispose off the 'Woven Sacks Plant' of the Company situated at Plot No. 392 to 403, GIDC Estate, Phase - II, Dediyasan, Mehsana - 384 002. The necessary approval of the members of the Company under Section 293(1)(a) and other applicable provisions, if any, of the Companies Act, 1956 were obtained pursuant to the provisions of Section 192A of the Companies Act, 1956 read with the Companies (passing of resolution through postal ballot) Rules, 2011, by way of Postal Ballot. The management is in the process of disposing off the plant. 7. DIRECTORS: 7.1 Ms. Nikita J. Patel, Director retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers herself for reappointment. 7.2 Mr. Jayantilal S. Patel has been appointed as Managing Director of the Company for a period of 3 years w.e.f. 29th July, 2014. 7.3 The Board of Directors duly met 5 times during the financial year under review. 7.4 The Board has made necessary evaluation of its own performance and that of its commitments and of individual Directors. 7.5 The performance evaluation of the Chairman, Executive and Non-Executive Directors was carried out by at the meeting of the Independent Directors held on 13th February, 2015. 7.6 DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed: (i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) that the Directors had 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 31st March, 2015 being end of the financial year 2014-15 and of the profit of the Company for the year; (iii) that the Directors had taken proper and sufficient care for 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; (iv) that the Directors had prepared the annual accounts on a going concern basis. (v) 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. (vi) 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. 8. MANAGERIAL REMUNERATION: 8.1 REMUNERATION OF DIRECTORS: The Company has not paid any Managerial Remuneration or other benefits to any of its Directors. The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. The Relationship of remuneration to performance is clear and meets appropriate performance benchmarks. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy. 9. KEY MANAGERIAL PERSONNEL : 9.1 % INCREASE IN REMUNERATION OF DIRECTORS AND KMP: Company has not paid any managerial remuneration to any of its KMP. Mr. Vipul Bhavsar, CFO was appointed during the end of the year 2014-15 hence, there is no increase in remuneration. 9.2 COMPARISON BETWEEN REMUNERATION OF KMP & PERFORMANCE OF THE COMPANY: As per the Remuneration Policy and based on the Recommendation of Nomination & Remuneration Committee the Relationship of remuneration to KMP & performance of Company is clear and meets appropriate performance benchmarks. 10. PERSONNEL AND H. R. D.: 10.1 INDUSTRIAL RELATIONS: The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals. 10.2 PARTICULARS OF EMPLOYEES: There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014. 11. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED: Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors' Report. 12. DEMATERIALISATION OF EQUITY SHARES: Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN No. allotted is INE818D01011. 13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption are not applicable as there are no manufacturing activities during the year under review. The Company has not earned or spent any foreign exchange during the year under review. 14. CORPORATE GOVERNANCE AND MDA: As per Clause 49 of the Listing Agreement and the Companies Act, 2013, Report on Corporate Governance and Management Discussion and Analysis (MDA) form part of this Annual Report. A certificate regarding compliance with the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement is also appended to the Annual Report as Annexure - A. 15. SECRETARIAL AUDIT REPORT: Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - B. As regards the observation of the Auditors, the Company is in the process of identifying and appointing Whole-time Company Secretary and also developing functional website of the Company. 16. EXTRACT OF ANNUAL RETURN: The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure - C. 17. LISTING: The Equity Shares of the Company are listed on Ahmedabad Stock Exchange Limited and BSE Limited and the Company has paid Annual Listing Fees to both the Stock Exchanges up to the year 2015-16. 18. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIP COMMITTEE: The details of various committees and their functions are part of Corporate Governance Report 19. GENERAL: 19.1. AUDITORS: The present Auditors of the Company M/s. M.M Salvi & Company, Chartered Accountants, Mehsana, will retire at the ensuing 31st Annual General Meeting. The Company has obtained from them consent to the effect that their reappointment as Auditors of the Company for period of 2 years commencing from the Financial Year 2015-16 to 2016-17, if made, will be in accordance with the provisions of Section 139 and 141 of the Companies Act, 2013. The remarks of Auditor are self explanatory and have been explained in Notes on Accounts. 19.2 INSURANCE: The movable and immovable properties of the Company including plant and Machinery and stocks wherever necessary and to the extent required have been adequately insured against the risks of fire, riot, strike, malicious damage etc. as per the consistent policy of the Company. 19.3 DEPOSITS: The Company has not accepted during the year under review any Deposits and there were no overdue deposits. 19.4 RISKS MANAGEMENT POLICY: The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work and monitored regularly with reference to statutory regulations and guidelines defined by the Company. 19.5 SUBSIDIARIES/ ASSOCIATES/ JVS: The Company does not have any Subsidiaries/ Associates Companies / JVs. 19.6 CODE OF CONDUCT: The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct. 19.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS: There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations. 19.8 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS: There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013. 20. ACKNOWLEDGMENT: Your Directors express their sincere thanks and appreciation to Promoters and Shareholders for their constant support and co operation. Your Directors also place on record their grateful appreciation and co operation received from Bankers, Financial Institutions, Government Agencies and employees of the Company. For and on behalf of the Board, Payal J. Patel Director Jayantilal S. Patel Managing Director Place : Ahmedabad. Date : 29th July, 2015 |