DIRECTORS' REPORT To, The Members Gopala Polyplast Limited Dear Members, 1.The Directors submit this 31st Annual Report together with the Audited Accounts for the year ended 31st March, 2015. 2. STATE OF AFFAIRS OF THE COMPANY While the revenue from operations during the year 2014-15 was marginally higher than the same in the previous year the Company incurred net loss of Rs.470.86 lacs in the year 2014-15 as against net profit of Rs.301.16 lacs earned in the year 2013-14 for the following reasons. a. The company is engaged in the manufacture of HDPE / PP bags and price of its raw material i.e. plastic granules is affected by fluctuations in prices of crude oil and dollar. During the previous year 2014-15 particularly during October to December quarter there was steep fall in crude oil prices and consequently domestic prices of the company's raw material had also fallen sharply and as a result thereof the company has incurred substantial losses during 3rd quarter of the year 2014-15. Company's inventory holding level generally remains high due to nature of its product and the overall stock from raw materials to finished goods which comprises Granules, Tape, Fabric, Cut Pieces, Bags (stitched and unstitched) and Ready bags on an average remains at the high level and it is required to be maintained at such level to manage production cycle. So if there is steep fall in prices then there will be substantial loss in the value of stock held by the Company. The Company lost about Rs.600/- lacs during 3rd quarter of the year 2014-15 merely on stock holding. Further in the falling prices scenario, the falling prices of raw materials impacts sales price also and it so happened that the Company was forced to sell its products at a price lower than its cost to its regular high profile clients just to stay in competition. So this is the reason for losses in the 3rd quarter of the year 2014-15. In fact, the company reported net profit during the remaining three quarters of the year 2014-15. b. Increase in interest cost due to term loan availed by the company and increase in provision for depreciation due to capex under its expansion cum modernization programme have also put pressure on the bottom-line of the Company. The Company expects better performance during the year 2015-16 3. MATERIAL CHANGES DURING THE YEAR UNDER REVIEW No material changes and commitments have occurred during the year and between the end of financial year under review and the date of this report of the Board of Directors, which affects the financial position of the Company. 4. DIVIDEND No divined is being recommended by the Directors for the year ending 31st March, 2015 due to losses. 5. TRANSFER TO RESERVES The Board of Directors does not propose to transfer any amount to the General Reserve or to any other reserve. 6. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Sec. 134 (5) of the Companies Act, 2013 the Directors confirm : i) 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; ii) that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement 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 March 31, 2015 and of the profit of the Company for the year ended on that date; iii) 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; iv) that the annual financial statements have been prepared on a going concern basis. v) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. vi) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. 7. DIRECTORS AND KEY MANAGERIAL PERSONNEL Pursuant to provision of Section 149 and other applicable provisions of the Companies Act, 2013 Mr. Malay Dalal (DIN: 01896746) Mr. Balkrishna Mittle (DIN: 00448528) and Mr. Rajkumar Poddar (DIN: 03567333), were appointed as Independent Directors at the Annual General Meeting of the Company held on 30th September, 2014. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. They have submitted a declaration to the Board that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement. Pursuant to provision of Section 149(1) read with Section 161 (1) of the Companies Act, 2013 Ms. Nirali Patel (DIN: 01354974) was appointed as a woman director of the Company at the meeting of the Board of Directors held on 31st March, 2015. Subsequently, on resignation of Mr. Rajkumar Poddar, Independent Director, effective from 9th May, 2015, Ms. Nirali Patel was categorised as an Independent Director under Section 149 (4) of the Companies Act, 2013 at the meeting of the Board of Directors held on 31st July, 2015 subject to approval by the Company in General Meeting. The resolution seeking approval of the members for the appointment of Ms. Nirali Patel has been incorporated in the notice of the forthcoming Annual General Meeting of the Company along with the brief details about her. Ms. Nirali Patel has submitted a declaration to the Board that she meets with the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement The company has received a notice under section 160 of the Act, along with the requisite deposit proposing the appointment of Ms. Nirali Patel. Mr. Mahendra Somani retires by rotation and being eligible has offered himself for re-appointment. During the year, the non-executive director of the Company had no pecuniary relationship or transaction with the Company. Pursuant to provision of Section 203 (1) (iii) of the Companies Act, 2013 Mr. Krunal Shah was appointed as Chief Financial Officer of the Company w.e.f. from 1st June, 2014. 8. MEETINGS OF THE BOARD Seven meetings of the Board were held during the year. For details of the meeting of the board, please refer to the corporate governance report, which forms part of this report. The maximum time gap between two consecutive meetings of Board did not exceed the limit prescribed under the Companies Act, 2013. The Agenda papers along with agenda notes were circulated well in advance to the Members of the Board for their review and to facilitate them to take informed decisions, if any. The Company's last Annual General Meeting was held on 30th September, 2014. 9. BOARD EVALUATION The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors based on inputs from the directors pursuant to the provisions of the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI') under Clause 49 of the Listing Agreements. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings. Also, the Chairman was also evaluated on the key aspects of his role. In the separate meeting of independent directors, performance of non independent directors, performance of the board as a whole and performance of the Chairman was evaluated. The same was discussed in the Board meeting that followed the meeting of the independent directors, at which the performance of the Board, its committee and individual director was also discussed. 10. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report. 11. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has adequate internal financial controls commensurate with the nature & size of business of the Company 12. AUDIT COMMITTEE The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 13. AUDITORS At the 30th Annual General Meeting held on 30th September, 2014, M/s. V. K. Moondra & Co., Chartered Accountants were appointed as statutory auditors of the Company to hold office till the conclusion of the 33rd Annual General Meeting. In terms of the first proviso of Section 139 of the Companies Act, 2013, the appointment of Auditor shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. V. K. Moondra & Co., Chartered Accountants, as statutory auditors of the Company is placed for ratification by the members. In this regard, the company has received a certificate from the Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. 14. AUDITOR'S REPORT AND SECRETARIAL AUDITOR'S REPORT The auditor's report and secretarial auditor's report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial audit is given as an annexure which forms part of this report. 15. RISK MANAGEMENT The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. Major risks identified are systematically addressed through mitigating actions on a continuing basis. 16. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT During the year under review, the Company has not granted any Loans, guarantees or provided securities in excess of the limits prescribed under Section 186(2) of the Companies Act, 2013 and has not made any investment through more than two layers of investment Companies. 17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC-2 is annexed hereto in Annexure - I and forms part of this report. 18. CORPORATE SOCIAL RESPONSIBILITY The CSR Policy is not applicable to our company. 19. SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES There were no companies which have become or ceased to be subsidiary, joint ventures or associate companies 20. EXTRACT OF ANNUAL RETURN An extract of Annual Return of the Company as on 31st March, 2015 as required under Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 in Form MGT-9 is annexed hereto in Annexure - II and forms part of this report. 22. DISCLOSURE REQUIREMENT As per Clause 49 of the listing agreement entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion analysis are attached, which form part of this report. Details of the familiarization programmed of the independent directors are available on the website of the company (www.gopalapolyplast.com ). Policy of dealing with related party transactions is available on the website of the Company (www.gopalapolyplast.com ). The Company as formulated a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions of this policy are in line with the provisions of Section 177(9) of the Act and revised clause 49 of the Listing Agreements with stock exchanges. The Whistle Blower Policy is available on the website of the company (www.gopalapolyplast.com ). There has been no complaint received on Sexual Harassment during the year under review. 23. DEPOSITS The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount on account of principal or interest on such deposits was outstanding as on the date of the balance sheet. 24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of Energy Under modernisation and expansion programme undertake during last two years, the Company has overhauled its major old machinery by installing new machinery which is consuming less power. Technology absorption, adaption and innovation The company continues to use the latest technologies for improving the productivity and quality of its products. The Company's operations do not require import of technology. Research and Development : Specific areas in which R&D was carried out by the Company No R & D was carried out by the Company in specific areas. Expenditure in R&D : Rs. Nil 25. SIGNIFICANT AND MATERIAL REGULATORY ORDERS There are no orders issued by any regulatory authorities or courts or tribunals in favour/against the Company impacting the going concern status and Company's operations in future. 26. ACKNOWLEDGEMENT The Directors wish to convey thanks to the Company's employees, customers, vendors, bankers, various Central and State authorities for their co-operation and look forward to their continued support for the years to come. For and on behalf of the Board of Directors Mahendra Somani Chairman Place : Santej Date : 31st July, 2015 |