The Directors are pleased to present the Twenty Fifth Annual Report and the Audited Financial Statements
for the year ended 31st March, 2016.
FINANCIAL RESULTS (Summary of key data)
[Rs. In Lacs]
Total Revenue Receipts including
Profit before Finance Cost,
Depreciation & Tax
Less: Finance Cost
Profit before tax
Less: Current Tax
Profit after tax
Balance brought forward from previous year 377
Profit available for appropriations
Adjusted for depreciation on assets where
remaining life was Nil, recognized in retained
Interim Dividend on Equity Shares
Proposed Final Dividend on Equity Shares
Tax on Dividend
Balance Carried to Balance Sheet
RESULTS OF OPERATIONS AND THE STATE OF COMPANY’S AFFAIRS
The highlights of the Company’s performance as compared to previous year are as under
- Revenue from operations increased to Rs. 35,528 lacs as against Rs. 34,580 lacs
- PBIDT increased by 10.96% to Rs. 2815 lacs as against Rs. 2537 lacs.
- Profit before Tax increased by 14.45% to Rs. 2510 lacs as against Rs. 2193 lacs
- Earnings per share increased by 12.42% to Rs. 17.29 as against Rs 15.38
- Cash Profit increased by Rs. 294 lacs to Rs. 2772 lacs as against Rs. 2478 lacs
- Net Profit after tax increased by 12.45% to Rs. 1834 lacs as against Rs. 1631 lacs
REVIEW OF OPERATIONS
During the year under review, your Company performed well in all areas of its operations, with top line
growth and consistent earnings, reflecting the effective corporate strategy of creating multiple drivers of
growth. Your Company has maintained its leadership, mainly due to continuous focus on Research, Development
and Technology up-gradation of innovative products and is reasonably confident to further improve its
performance in forthcoming years.
During the year, your Company has achieved a turnover of Rs. 35528 lacs as against Rs. 34580 lacs in the
previous year, registering an increase of 2.74% over the previous year. The growth in sales volume, despite a
subdued economic scenario, was made possible due to focus on value added products and development of new
products through R&D and better product mix.
Your Company achieved a direct export turnover of Rs. 9115 lacs. International buyers show preference to
your company''s product mainly because of its quality, technical support, R&D service. The international
market is expected to grow further, which will enable the company to achieve higher export turnover in the
years to come.
The Company has declared and distributed an interim dividend of Rs. 2.50 per equity share of Rs. 10 each
in March, 2016. This may be treated as final dividend for the year ended 31st March, 2016.
Through consistent efforts in maintaining and improving the international quality standards, your Company
has created good demand for its products. This has helped in facing price competition in both domestic and
international markets and also achieved increased volume. With sustained efforts, we expect further
improvements in our performance in the current year. Your Company will continue to seek new markets while
consolidating its hold over the existing customers.
RESEARCH AND DEVELOPMENT
Your Company considers R&D as an essential tool to maintain its technical advantage over competitors and
to develop innovative products. R & D is central to achieving excellence in product quality with improved
processes and optimization of available resources.
It makes continuous efforts to adopt and implement new technologies and to improve the
product-mix/process, so as to create higher value items at lower costs, to widen its range of new generation
master batches and to facilitate the production of customized products. It strives to leverage modern
advances in science and technology and blend the same with classical concepts of product development.
Your Company has, over the years, invested significantly in its Research & Development (R&D) facility, as
a key source of sustainable competitive advantage. The in-house R&D division of your Company, located at its
plant, is recognized by the Department of Science and Industrial Research (DSIR), Government of India.
Details appended in Annexure-I to this Report.
Your Company has established various quality initiatives to meet or exceed the expectations of its
customers. It has invested in various pilot plants and state-of-the-art testing equipments in order to carry
out all relevant tests for master batches, which support the smooth running of its customers'' production
Through close interaction with your Company''s customers and independent laboratories, your company
receives continuous feedback, which it takes on board for the continued optimization of its products and
STAR EXPORT HOUSE STATUS AND CRISIL RATING
Sustained exports has enabled your Company to maintain its Two Star Export House Status under the Foreign
Trade Policy 2015-2020, being eligible for the same.
The Company''s Credit Rating is A/Stable/A1, assigned by CRISIL for its working capital borrowings, which
signifies a strong degree of safety with regard to timely payments. DIRECTORS AND KEY MANAGERIAL
PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the
Company, Ms. Mahima P. Agarwal retires by rotation at the ensuing Annual General and being eligible, has
offered herself for re-appointment.
The Company has received declarations from all the Independent Directors of the company confirming that
they meet the criteria of independent directorship as prescribed under the Act and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Remuneration
policy for selection and appointment of Directors, Senior Management and their remuneration.
The said policies are displayed on our company''s website.
The details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read
with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed
and marked as Annexure-ll to this Report.
The present tenure of appointment of Shri S.S.Poddar, Managing Director & CFO expires on 30.09.2016 and
the Nomination and Remuneration Committee of the Board, at its meeting held on 21.05.2016, recommended the
payment of revised remuneration for remaining term of appointment i.e. from 01.04.2016 to 30.09.2016 and for
re-appointment of Shri S.S. Poddar as Managing Director & CFO for a further period of three Years from
01.10.2016 to 30.09.2019.
Shri Gaurav Goenka has been appointed as an additional director of the company w.e.f. 28.05.2016.
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, five
Board Meetings and four Audit Committee Meetings were convened and held, the details of which are given in
the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed
under the Companies Act, 2013. For further details, please refer report on Corporate Governance of this
Your Company has been actively practicing the principles of good corporate governance over the years. It
is committed to maintain the highest standards of corporate governance and adhering to the corporate
governance requirements set out by SEBI. The Board of Directors supports the broad principles of corporate
governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency,
accountability and integrity.
The report on Corporate Governance (in accordance with
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors'' certificate on
compliance by the Company and the Management Discussion & Analysis, have been included in the Annual Report
as a part of this Report.
CONTRACTS AND ARRANGMENTS WITH RELATED PARTIES
All contracts/ arrangement/ transactions entered by the company during the financial year with related
parties were in the ordinary course of business and at arm''s length basis. There are no materially
significant related party transactions made by the company with promoters, key managerial personnel or other
designated persons which may have potential conflict with interest of the company at large.
Your Directors draw attention of the members to Note no. 33 to the financial statement, which sets out
the details of related party transactions.
COMPLIANCE WITH THE CODE OF CONDUCT
The Directors and Senior Management Personnel have reaffirmed their compliance with the code of
The company has neither accepted any deposits during the year under review, nor does it have any deposits
outstanding at the year-end.
The information required under Section 197 (12) of the Companies Act, 2013 read with Rules 5 (2) & 5 (3)
of the Company''s (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in the
Annexure-lll hereto forming part of the Report.
Your Company has put in place a policy on succession planning to assess, develop, and retain a talent
pool of associates, in order to ensure a continuity of leadership for all critical positions.
MECHANISM FOR EVALUATION OF BOARD Evaluation of all Board members is done on an annual
basis. The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors
with specific focus on the performance and effective functioning of the Board and Individual Directors.
The criteria covers various aspects for evaluation of Independent Directors and including participation
at the Board/Committee meetings, effective use of knowledge and expertise, management of relationship with
stakeholders, integrity and maintaining of confidentiality, unbiased behavior and judgment, exercise of
objective independent judgment in the best interest of the Company, ability to contribute to and monitor
corporate governance practice and adherence to the code of conduct for independent directors.
For evaluation of the Board aspects such as the development of suitable strategies and
business plans, implementation of robust policies and procedures, size, structure and expertise of the Board
For evaluation of the Managing Director and Director & CEO
aspects such as achievement of financial/business targets prescribed by the Board, Development and
management/ execution of business plans, operational plans, risk management and financial affairs of the
organization and development of policies and strategic plans which harmoniously balance the needs of
shareholders, clients, employees and other stakeholders, in alignment with the vision and mission of Company
For evaluation of Non-Executive Directors'' aspects such as participation in the
Board/Committee meetings, effective deployment of knowledge and expertise, Independence of behavior and
judgment are considered.
For evaluation of the Committees'' aspects such as discharge of its functions and duties
as per its terms of reference, process and procedures followed for discharging its functions & effectiveness
of suggestions and recommendations received are considered. For evaluation of the Chairperson
of the Board aspects such as managing relationships with the members of the Board and management,
providing ease of raising of issues and concerns by the Board members and promoting constructive debate and
effective decision making at the board are considered.
The evaluation process has been explained in the Corporate Governance Report section in this Annual
Report. The Board has approved the evaluation results as collated by the Nomination and Remuneration
AUDITORS AND AUDITORS'' REPORT Statutory Auditors
M/s K. N. Gutgutia & Co, Chartered Accountants, the present Statutory Auditors of the Company, hold
office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. They
have furnished a Certificate to the effect that the re-appointment, if made, would be within the limits
prescribed under Section 139 of the Companies Act, 2013 and that they are not disqualified for
re-appointment. They have confirmed their eligibility and willingness to accept office, if re-appointed.
The Notes on financial statement referred to in the Auditors'' Report are self-explanatory and do not
call for any further comments under Section 134 of the Companies Act, 2013. The Auditors'' Report does not
contain any qualification, reservation or adverse remark.
The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in
the year under review. Cost Auditors
Complying with the provisions of Section 148 of the Companies Act, 2013 and the MCA General Circular No.
15/2011 dated April 11,2011, (as amended vide General Circular No. 36/2012 dated 6th November, 2012) subject
to the approval of the Central Government, the Audit Committee has recommended and the Board of Directors had
appointed M/s. K. G. Goyal & Associates, Cost Accountants, Jaipur being eligible and having sought
appointment, as Cost Auditors of the Company to carry out the Cost Audit of all the products manufactured by
the Company for the year ended March, 2016. Your Company submits its Cost Audit Report with the Ministry of
Corporate Affairs within the stipulated time period.
Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and
Remuneration of Managerial Personnel ) Rules, 2014, the Board has appointed Shri B. L. Patni, Practising
Company Secretary, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report
for the financial year ended March 31, 2016 is annexed and marked as Annexure-IV to this Report. The
Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
ENVIRONMENT, SAFETY, ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
Your Company accords high priority to health, safety and environment, particularly in and around its
facilities. Safety awareness is provided through regular safety awareness programs, basic fire safety
training, mock drills etc. As a part of safety management system, a comprehensive safety manual has been
developed for use by the operating and safety personnel. There haven''t been any accidents reported during
the year under review.
In addition, energy conservation is a key priority for your Company and it continuously strives to
achieve this through process improvements and through the enhancement of equipment capabilities.
Particulars relating to Energy Conservation (Refer Annexure-V), Technology Absorption (Refer Annexure-VI
) and Foreign Exchange Earnings and Outgo (Refer Annexure-VI I ), as required under section 134 of the
Companies Act, 2013, are enclosed as a part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility is a commitment from the Company to improve the quality of life of the
workforce and their families and also the community and society at large. The Company believes in undertaking
business in such a way that it leads to overall development of all stakeholders and society.
The Corporate Social Responsibility policy was adopted by the Board of Directors on the recommendation of
Corporate Social Responsibility Committee. Report on Corporate Social Responsibility as Per Rule 9 of
Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure - VIII to this
The Company has spent Rs 42.60 Lacs, which is more than 2% of average net profit of the company for the
last three years.
Pursuant to Section 134(3) (n) of the Companies Act, 2013 & under regulations 21 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, the Company had formulated a Risk Management
Policy for dealing with different kinds of risks which it faces in day to day operations of the Company. The
Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures that are
to be adopted by the Board. The company has adequate internal control systems and procedures to combat the
risk. The Risk management procedure is reviewed by the Audit Committee and Board of Directors on a quarterly
basis at the time of review of Quarterly Financial Results of the Company. This has also been covered in the
Management Discussion and Analysis, forming part of this report.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY In pursuant to the provisions of section 177(9) &
(10) of the Companies Act, 2013 and in terms of the Listing Agreements, a Vigil Mechanism, which is a whistle
blower policy for directors and employees to report genuine concerns has been established. The said policy
has been uploaded on the website of the Company.
PREVENTION OF INSIDER TRADING
SEBI (Prohibition of Insider Trading) Regulations, 2015 has came into effect from May 15, 2015. Pursuant
thereto, the Company has formulated and adopted a new code for the Prevention of Insider Trading. This was
done with a view to regulate trading in securities by the Directors and designated employees of the Company
during the period when the trading window is closed.
All properties and insurable interests of the Company including building, plant and machinery and stocks
have been fully insured.
INTERNAL FINANCIAL CONTROLS
Your company has well established systems & rules for ensuring the orderly and efficient conduct of
business, including adherence to company''s policies, safeguarding of its assets, prevention and detection of
frauds and errors, accuracy and completeness of accounting records and timely preparations of reliable
financial statements. The required systems needed, to carry out risk assessment to identify risks along with
their possible magnitude to determine risks in each process and to then develop and design internal controls
to mitigate each risk, are in existence.
Our company has a well tested ERP system with requisite internal control to ensure financial safety as
well as the timely preparation of reliable financial statements.
PARTICULARS OF LOAN, GUARANTEE AND INVESTMENT During the year, the company had given
inter-corporate deposit for a short period and the same has been squared off within the same year. The
details of the investments made by company are given in Note no. 11 & 14 to the financial statements.
EXTRACT OF THE ANNUAL RETURN As required pursuant to section 92(3) of the Companies Act,
2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return
in MGT-9 is annexed as a part of this Annual Report as Annexure-IX. DIRECTORS RESPONSIBILITY
STATEMENT Pursuant to Section 134 of the Companies Act, 2013, based upon the certification from
SMPs, the Directors confirm:
a) that in the preparation of the Annual Accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
b) that the directors have selected such accounting policies and applied them consistently and have
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 of 31st March, 2016 and of the profit of the Company for the period ended on that
c) that the directors have taken proper and sufficient care to ensure 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 directors have prepared the Annual Accounts on a ''going concern'' basis;
e) that 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) that the directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore
there were no funds that were required to be transferred to the Investor Education and Protection Fund (I
EPF). Pursuant to the provisions of the Investor Education and Protection Fund (Uploading of information
regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the
necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the
date of last AGM (i.e.11,h September, 2015), on the website of the Company (www.poddarpigmentsltd.com) and also on the website of the Ministry
of Corporate Affairs.
Your Directors state that no disclosure or reporting is required during the year under review as there
were no transaction on the following items:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Employees'' Stock options Scheme (ESOS).
3. Holding or Subsidiary or Associate company.
4. Significant or material orders were passed by the Regulators or Courts or Tribunals which impact
the going concern status and Company''s operations in future.
5. Issue of any sweat equity shares.
Your Directors further state that during the year under review, there were no cases filed pursuant to the
Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013.
No material changes and commitments have occurred, after the close of the year till the date of this
report, which affect the financial position of the Company.
The Management is grateful to the various government and semi-government authorities, bankers, investors,
marketing dealers, suppliers, vendors and customers for their valued support and co-operation.
The Directors also wish to place on record their appreciation for the dedication and excellent
contribution of the employees in realizing and achieving the objectives of the Company. The enthusiasm of the
executives, staff and workers has enabled the company to remain consistently on growth path.
For and on behalf of
the Board of Directors
PLACE: JAIPUR R.K. Sureka
S. S. Poddar
DATE : 28lh MAY, 2016 DIRECTOR & CEO
MANAGING DIRECTOR & CFO