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Prima Plastics Directors Report, Prima Plastics Reports by Directors
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Prima Plastics
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Directors Report Year End : Mar '13    « Mar 12
Dear Shareholders,
 
 The Directors submit the 19th Annual Report along with the Audited
 Statement of Accounts of the Company for the year ended March 31, 2013.
 
                                                        (Rs. In Lacs)
 
 FINANCIAL RESULTS                              2012-2013  2011-2012
 
 Gross Income                                    7,569.21   6,110.02
 
 Profit before Depreciation, Finance 
 Cost and Tax                                      596.91     520.38
 
 Less : Depreciation                               160.70     150.91
 
 Less : Finance Cost                                96.78      93.70
 
 Profit/(Loss) before Taxation                     339.43     275.77
 
 Less : Current Tax                                 76.00      56.84
 
 Profit /(Loss) after Tax                          263.43     218.93
 
 Add : Balance b/f from previous year            1,837.23   1,796.15
 
 Balance available for appropriation             2,100.66   2,015.08 
 
 Appropriation :
 
 Balance c/f                                     2,100.66   2,015.08
 
 Less : Proposed Dividend                          110.00     110.00
 
 Less: Dividend Tax                                 17.85      17.85
 
 Less : General Reserve                             50.00      50.00
 
 Balance c/f to Balance Sheet                    1,922.81   1,837.23
 
 DIVIDEND
 
 Based on the Company''s performance, the Directors are pleased to
 recommend a dividend of Rs.1/- per Equity Share (last year Rs.  1/- per
 Equity Share) for the financial year ended March 31, 2013 amounting to
 Rs.127.85 lacs (inclusive of tax of Rs.17.85 lacs).  The dividend pay
 out ratio for the current year, inclusive of corporate tax on dividend
 distribution, is at 48.53%. This Management had balance the dual
 objectives of rewarding shareholders by dividends and retaining equally
 for future growth.
 
 TRANSFER TO RESERVES
 
 The Company proposes to transfer Rs.50 lacs to the General Reserve out
 of the amount available for appropriations and an amount of
 Rs.1922.81lacs is proposed to be retained in the Profit and Loss
 Account.
 
 OPERATIONAL PERFORMANCE
 
 It was a challenging year for the Indian Economy due to higher
 inflation, steady interest rate and allegation of corruptions in higher
 places resulting into policy impediments to investment. The Global
 environment too was not encouraging due to several European economies
 experienced recession due to high unemployment, banking fragility,
 fiscal tightening and sluggish growth. Amongst Asian economies, China
 going through a political transition experienced considerably slow
 growth etc. Despite these constraints and the challenging environment,
 your Company performed reasonably well and delivered positive growth in
 sales, however there is marginal decline in operating margins.
 
 Your Company achieved higher net sales in moulded furniture segment of
 Rs. 6,679.69 lacs as against Rs. 5,572.35 lacs in the last year. The
 growth in sales is healthy at 20% in percentage terms. The exports were
 higher at Rs.1,526.15 lacs as compared to Rs.  1,070.05 lacs in last
 year. The growth in export too is very impressive at 43% in percentage
 term. The moulded furniture division has earned its operating profit of
 Rs. 137.10 lacs as against Rs. 397.83 lacs in last year due to
 fluctuations in material prices and one time write off of Bad Debts of
 Rs. 75.00 Lacs.
 
 However the performance of ACP business has adversely impacted due to
 continuous sluggish commercial real estate sector resulting into under
 utilization of installed capacity. The sales of ACP division was at Rs.
 436.56 lacs as compared to Rs. 464.71 lacs in last year and resulted
 into a loss of Rs. 153.85 lacs before interest as compared to loss of
 Rs. 101.32 lacs in last year. The Loss for the year partially
 attributed to one time write off of Bad Debts of Rs. 115.00 lacs.
 
 The main raw material for ACP division is Coated Aluminum Coil and
 prices of the Aluminum are driven by global market and at present the
 prices are within the reasonable range. The Company mainly sources, its
 raw materials from China & other leading countries.
 
 The far sighted vision of the Promoters of the Company paid rich
 returns in the year under review and the Company had received a sum of
 Rs. 475.00 lacs as maturities proceeds of Keyman Insurance policies.
 These Policies were taken in the past and policy premium were spread
 over initial 10 years.
 
 Overall the Company''s performance is satisfactory and registered a
 profit before tax of Rs. 339.43 lacs.
 
 RECOGNITIONS
 
 The Company has been awarded the 2nd Runner-up for the category Best
 Focus Product Exporter'''' at the ECGC-D&B Indian Exporters'' Excellence
 Awards 2012.
 
 SUBSIDIARY COMPANY
 
 Due to sluggish world economies and overall weak global economic
 sentiments, the Company has defer in plans to set up trading and
 manufacturing base at UAE and decided to surrender license of its
 subsidiary Prima Global (FZE), to the Licensing Authorities of RAK
 SEZ Ras Al khaimah, UAE. The Company is under process to take necessary
 approvals / compliance from Indian and UAE Authorities for
 de-registrations.
 
 PERFORMANCE OF JOINT VENTURE
 
 Prima Dee-lite Plastics Pvt. Ltd., Cameroon, a Joint Venture Company
 manufacturing Moulded Articles and HDPE Woven Sack Bags. The total
 turnover of JV Company for the calendar year 2012 was INR 3,267.20 lacs
 as compared to previous calendar year of INR 1,855.70 lacs. The profit
 for the year after depreciation and tax was INR 491.86 lacs as compared
 to INR 357.31 lacs in the previous year.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Consolidated Financial Accounts form part of this Annual Report.
 
 Pursuant to the provision of Section 212(8) of the Act, the Ministry of
 Corporate Affairs vide its circular dated February 8, 2011 has granted
 general exemption from attaching the Balance Sheet, Profit and Loss
 Account and other documents of the Subsidiary Companies with Balance
 Sheet of the Company. The annual accounts of these subsidiaries / Joint
 Venture Companies and the related detailed information are available
 for inspection by any member at the registered office of the Company.
 The Company shall furnish a copy of details of annual accounts of
 subsidiary /Joint Venture Company to any member on demand.
 
 DIRECTORS
 
 The Board of Directors at their meeting held on May 29, 2013 approved
 the revision in terms of agreement and reappointed Shri Bhaskar M.
 Parekh as Executive Chairman and Shri Dilip M. Parekh as Managing
 Director for a period of 3 years with effect from July 01, 2013
 
 Shri Mulchand S. Chheda retires by rotation and being eligible, offers
 himself for reappointment at the ensuing Annual General Meeting. Brief
 resume of Shri Mulchand S. Chheda, Shri Bhaskar M. Parekh and Shri
 Dilip M. Parekh, nature of their experience are given in the section on
 Notice elsewhere in the Annual Report.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board
 of Directors of the Company hereby state and confirm that:
 
 I.  In the preparation of the annual accounts for the year ended March
 31, 2013, the applicable accounting standards read with requirements
 set out under Schedule VI to the Companies Act,1956, have been followed
 and there has been no material departure;
 
 II.  The Directors have 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 as at March 31, 2013 and of the profit of the Company
 for the year ended on that date;
 
 III.  The Directors have taken proper and sufficient care to the best
 of their knowledge and ability for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 1956. They confirm that there are adequate system and control for
 safeguarding the assets of the Company and for preventing and detecting
 fraud and other irregularities.
 
 IV.  Directors have prepared the Annual Accounts on a going concern
 basis.
 
 AUDITORS & AUDITOR''S REPORT
 
 M/s. G.P. Kapadia & Co., Chartered Accountants, Mumbai, Statutory
 Auditors of the Company, holds office until the conclusion of the
 ensuing Annual General Meeting and are eligible for reappointment.
 
 The Company has received letter from them to the effect that their
 reappointment, if made, would be within the limits prescribed under
 Section 224(1B) of the Companies Act, 1956 and that they are not
 disqualified for such reappointment within the meaning of the Section
 226 of the said Act.
 
 The observations made in the Auditors'' Report, read together with the
 relevant notes thereon are self-explanatory and hence, do not call for
 any comments under section 217 of the Companies Act, 1956.
 
 PARTICULARS OF EMPLOYEES
 
 The Company does not have any employee drawing remuneration as
 stipulated under Section 217 (2A) of the Companies Act, 1956 read with
 the Companies (Particulars of Employees) Rules, 1975.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 Additional information given as required under the Companies
 (Disclosures of Particulars in the report of Board of Directors) Rules,
 1988.
 
 ENERGY CONSERVATION
 
 Energy conservation program is a ongoing process, the Company continues
 to emphasize on energy conservation at the stage of selections of
 plant, equipment to optimize energy consumption and by installing
 necessary power saving equipments.
 
 RESEARCH & DEVELOPMENT
 
 The R& D activities carried out by the Company are directly working in
 the supervision and guidance of the Managing Director. The Company has
 been able to launch few new products in plastics in replacement of
 conventional wood and also few new designs of chairs developed
 internally. The Company has developed first time in India a Rocking
 Chair and launching in this financial year for sale. The Company
 further plans to develop and introduce new range of products in the
 current year.
 
 TECHNICAL ABSORPTION, ADAPTATION & INNOVATION
 
 The Company has not imported any technology or processes know how. The
 Machines and moulds used for manufacturing products are regularly
 upgraded to cater variety products in line with the market trend and
 demand. The new investments are made in new technology upgraded
 machines & moulds.
 
 As a result, the Company is able to give new & innovative designed
 product and has created strong demand of its products in export market.
 
 II.  FOREIGN EXCHANGE EARNING AND OUTGO
 
 1) Activities relating to exports, initiative taken to increase
 exports; development of new exports market for products and services;
 and export plans:- The Company''s key markets for international business
 are the Africa, Middle East, and Latin America. The export products are
 well established in the international market and the exports were
 higher at Rs. 1,526.15 lacs as compared to Rs.1070.05 lacs in last
 year. The growth in export too is very impressive at 43% in percentage
 term due to repeated orders from its existing clients. The Company has
 won 14 top export awards from PLEXCONCIL of India in last 16 years.
 
 2) Total foreign exchange used and earned.
 
                                                                 (Rs.)
                                             2012-2013      2011-2012
 
  Foreign Exchange earned (FOB) – 
 (Finished Goods)                          133,840,727     97,460,862
 
  Foreign Exchange earned (Capital Goods)          NIL      1,283,250
 
  Foreign Exchange used                     52,798,331     52,545,142
 
 FIXED DEPOSITS
 
 The Company has not accepted any Fixed Deposit covered under Section
 58A of the Companies Act, 1956 from the Members or the Public during
 the year.
 
 CORPORATE GOVERNANCE
 
 The Report on Corporate Governance as stipulated under Clause 49 of the
 Listing Agreement forms part of the Annual Report.
 
 The requisite Certificate from the Auditors of the Company confirming
 compliance with the conditions of Corporate Governance as stipulated
 under the aforesaid Clause 49 is attached to this Report.
 
 ACKNOWLEDGEMENT
 
 The Directors thank the Company''s customers, vendors, investors and
 banks for their support to the Company.
 
 The Directors also thanks the Governments of other countries,
 Government of India, State Governments in India and concerned
 Government Departments/Agencies for their co-operation.
 
 CAUTIONARY STATEMENT
 
 Certain statements in the reports of the Board of Directors and
 Management''s discussions and analysis may be forward looking statements
 within the meaning of applicable securities laws and regulations.
 Actual results could differ materially from those expressed or implied
 since Company''s operations are influence by many external and internal
 factors beyond the control of the Company. The Company assumes no
 responsibility to publicly amend, modify or revise any of these
 statements on the basis of any subsequent developments, information or
 events.
 
 
 
                                        For and on behalf of the Board
 
 
 Mumbai                                              Bhaskar M. Parekh
 
 May 29, 2013                                                 Chairman
Source : Dion Global Solutions Limited
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