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Linc Pen and Plastics Ltd.

BSE: 531241 | NSE: LINCPEN | Series: NA | ISIN: INE802B01019 | SECTOR: Miscellaneous

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

Dear Shareholder’s

The Directors have pleasure in presenting their 24th Annual Report together with / the audited accounts of the Company for the year ended 31st March, 2018.

Financial Highlights (Rs. in Lakhs)

2017 - 18

2016 - 17

Revenue from Operations

33189.15

35049.34

Other Income

116.28

42.59

Profit before depreciation, interest and taxation

2693.32

3404.14

Finance Cost

485.24

216.66

Depreciation

960.29

792.83

Profit before Tax

1247.79

2394.65

Provision for Taxation - Current

267.00

543.00

- Deferred

196.68

125.33

Profit after Tax

784.11

1726.32

Total Other comprehensive Income

(2.11)

(9.37)

Total Comprehensive Income of the Year

782.00

1716.95

Add: Credit Balance of the previous year

996.39

1013.32

Amount available for Appropriation

1778.39

2730.27

Transfer to General Reserve

500.00

1200.00

Dividend

443.58

443.58

Corporate Tax on Dividend

90.30

90.30

Balance carried to Balance Sheet

744.51

996.39

An amount RS. 500 Lakhs is being transferred to the General Reserves of the Company as at 31st March, 2018

Dividend

Your Directors recommend a Dividend of RS. 1.50 per equity share (previous year RS. 3/- per equity share) for the year ended 31st March, 2018.

Financial Performance

During the year under review, the Company’s Revenue from Operations decreased by 5.3% to RS. 33189 Lakhs as compared to RS. 35049 Lakhs during the preceding year. However, the Revenue from Operations were not strictly comparable, as in the post GST scenario the calculation is net of GST, while earlier it was gross of excise. The Profit after Tax during the year was RS. 784 Lakhs as compared to RS. 1726 Lakhs in the previous year, a drop of about 54.6%.

The profits were effected on account of lower export revenue, continued rise in polymer prices and higher Interest and Depreciation on account of commissioning of new production facility at Gujarat w.e.f.15th July, 2017.

The year-end debtors are 50 days of the sales for the year as compared to 41 days in the previous year. The inventory holding is for 86 days’ sales as compared to 81 days in the previous year.

A full analysis and discussion on the performance of the Company as well business outlook is included in this Annual Report under the heading ‘Management Discussion and Analysis’ as Annexure to this Report.

New Facility at Umbergaon, Gujarat

The commercial production in the new manufacturing facility at Umbergaon was started on 15th July, 2017.

Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:-

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) 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) 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.

Corporate Governance

The Company had complied with the requirements of Corporate Governance in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report each on Corporate Governance (Annexure-B, along with Auditors’ Certificate on its due compliance) and Management Discussion and Analysis is attached to this report.

Secretarial Standards

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

Listing

The equity shares of the Company are listed on National Stock Exchange of India Limited (NSE), BSE Limited (BSE) and The Calcutta Stock Exchange Limited (CSE).

Directors and Key Managerial Personnel

In accordance with the Articles of Association of the Company, Shri Aloke Jalan, Whole Time Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.

The following persons were appointed as Key Managerial Personnel of the Company in Compliance with provisions of section 203 of the Companies Act, 2013:

Shri Deepak Jalan - Managing Director Shri Aloke Jalan - Whole Time Director Shri N. K. Dujari - Chief Financial Officer & Company Secretary Dr. Ranjan Das, Independent, NonExecutive Director has resigned from the Board w.e.f. 13th February, 2018. The Directors have placed on record their sincere appreciation for the valuable contribution and guidance provided by Dr. Ranjan Das during his tenure as Director.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

A statement pursuant to section 134 of the Companies Act, 2013, giving details of measures taken towards conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with the Companies (Accounts) Rules, 2014 is annexed as Annexure - C.

Particulars of Employees and related disclosures

Disclosure as required Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as Annexure - D.

Policy on Directors’ Appointment and Remuneration

Policy on Directors’ Appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Regulations, 2015 and good corporate practices. Emphasis is given to persons from diverse fields or professions.

Policy on Remuneration - Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is -

- Remuneration to unionised workmen is based on the periodical settlement with the workmen union.

- Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen (non Unionised) is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent.

- For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time.

Declaration by Independent Directors

Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section.

Related Party Transactions

All related party transactions that were entered into during the year under report were on an arm’s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year. Thus, provisions of section 134(3)(h) and 188(1) of the Companies Act, 2013 are not applicable and therefore, Form No. AOC-2 has not been attached. Related Party Transactions Policy is available on weblink http://www.lincpen.com

Risk Management

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section.

Credit Rating

The Company’s credit ratings ascribed by CRISIL are - Long Term - CRISIL A/Stable; and Short Term - CRISIL A1.

Annual Evaluation by Board

The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.

Whistle Blower Mechanism

Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is given in Corporate Governance Report forming part of this report.

Extract of Annual Return

Extract of Annual Return is annexed as Annexure - E.

Meeting of the Board of Directors

Five (5) meeting of the Board of Directors, including a meeting of independent Directors, without the attendance of the Non-Independent Directors and members of management, were held during the year. The details of the same are provided in the Corporate Governance Report.

Auditors

M/s Singhi & Co. (FRN: 302049E), Chartered Accountants were appointed as the Statutory Auditor of the Company in 23rd Annual General Meeting held on 1st September, 2017 for a period of 5 consecutive years commencing from the conclusion of the 23rd Annual General Meeting till the conclusion of the 28th Annual General Meeting of the Company.

In accordance with the Companies Amendment Act, 2017 enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Secretarial Audit

The Company had appointed M/s D. C. Sahoo & Co., Practising Company Secretaries as the Secretarial Auditor of the Company for the financial year 2017-18. The report of the Secretarial Auditor is annexed as Annexure - F. The report does not contain any qualification.

Internal Finance Control

The Company has put in place adequate system of internal finance controls, commensurate with its size and nature of its operations. During the year no material weakness in its operating effectiveness was observed.

Corporate Social Responsibility

With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by Ministry of Corporate Affairs, the Company has undertaken activities as per the CSR Policy and the details are contained in the Annual Report on CSR activities given in Annexure - G forming part of this report.

The amount required to be spent on CSR activities during the year under review in accordance with the provisions of Section 135 of the Companies Act, 2013 is RS. 44.43 Lakhs and the company has spent RS. 39.80 Lakhs during the current financial year. The spending was less as the Company wanted to utilize the funds in justifiable, sustainable and measurable activities. The shortfall in the spend during the year under review is intended to be utilized in future on projects within the Company’s CSR Policy.

Further as a responsible corporate citizen, the Company had been involved in CSR activities since its inception. Some of these activities will not fall under 2% CSR spend as per Schedule VII read with Section 135 of the Companies Act, 2013. But the Company decided to continue with them, since those activities are integral to the business of the Company.

Prevention of Sexual Harassment at workplace

The Company has in place a Policy against Sexual Harassment of Women at Workplace in line with the requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complain Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. No complaints were received by the Committee during the year under review.

General

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

- There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

- Details relating to deposits covered under Chapter V of the Act.

- The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

- No 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.

- No fraud has been reported by the Auditors to the Audit Committee or the Board.

Acknowledgement

Your Directors express their appreciation to all the employees for their valuable contribution. Your directors also wish to express their gratitude for the continued co-operation, support and assistance provided by all the valued Channel Partners, Distributors, Suppliers, Bankers, Shareholders, the Central and State Governments.

For and on behalf of the Board

Deepak Jalan K. N. Ranasaria

Place : Kolkata Managing Director Director

Dated : 30th May, 2018 DIN: 00758600 DIN: 00201370

Director’s Report