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Nilkamal Ltd.

BSE: 523385 | NSE: NILKAMAL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE310A01015 | SECTOR: Plastics

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30-Day
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Annual Report

For Year :
2019 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Members,

The Directors are pleased to present the 33rd Annual Report and the Audited Statement of Accounts for the financial year ended March 31, 2019.

FINANCIAL PERFORMANCE:

The financial performance of the Company for the financial year ended March 31, 2019 is summarised below:-

(Rs. in Lakhs)

Particulars

2018-2019

2017-2018

Revenue and Other Income

232,127.53

211,569.24

Profit before Depreciation, Amortisation and Tax

20,832.49

22,722.46

Less: Depreciation and Amortisation charges

4,964.07

4,846.85

Profit before Tax

15,868.42

17,875.61

Less: Taxes

4,745.50

6,165.06

Profit after Tax

11,122.92

11,710.55

Add : Other Comprehensive Income

(122.94)

105.26

Total Comprehensive Income

10,999.98

11,815.81

Opening balance in Retained Earnings

36,783.59

30,677.21

Amount available for appropriation

47,783.57

42,493.02

i) Interim Dividend

596.90

596.90

ii) Final Dividend

1,343.03

1,044.58

iii) Total Tax on Dividend

339.13

170.07

Transfer to General Reserve

-

3,884.84

Closing balance in Retained Earnings

45,589.42

36,783.59

Earnings Per Share (Rs. )

74.54

78.48

Cash Earnings Per Share (Rs. )

107.80

110.96

Book Value per Share (Rs. )

592.65

534.21

YEAR IN RETROSPECT

Revenue from operations of your Company has increased by 9.31 % over the previous year to Rs. 230,418.37 lakhs. EBIDTA reduced by 7 % from the previous year to Rs. 22,412.39 lakhs, whereas the profit after tax decreased by 5% over the previous year to Rs. 11,122.92 lakhs. The plastic business has achieved a volume and value growth of 7% and 13% respectively.

''@home'' - the Company''s retail business of lifestyle furniture, furnishing and accessories, recorded a turnover of Rs. 21,089 lakhs for the current financial year and also achieved EBIDTA of Rs. 466 lakhs. The profit before tax of the said business stood at Rs. 126 lakhs.

RESERVES

There is no amount proposed to be transferred to Reserves out of profits of the financial year 2018 -19.

DIVIDEND

Your Directors are pleased to recommend a Final Dividend of Rs. 9 per equity share (90%) for the financial year 2018-2019, which is subject to consideration and approval of the Shareholders at the ensuing Annual General Meeting of the Company, and shall be paid within the statutory period to those members whose names appear in the Register of Members as on the date of book closure. Your Company had also declared interim dividend of Rs. 4 per equity share (40%) on October 29, 2018.

The aforesaid dividend pay-out for year under review is in accordance with the Company''s policy on Dividend Distribution which is linked to long term growth objectives of your Company to be met by internal cash accruals. The Dividend Distribution Policy of the Company can be viewed on the Company''s website at the following weblink:https://nilkamal.com/wp-content/uploads/2019/01/Dividend Distribution Policy.pdf

The total outflow on account of the interim dividend and the proposed final dividend (including distribution tax, surcharge and education cess) shall amount to Rs. 2,259 lakhs.

SHARE CAPITAL

The Company''s paid-up Equity Share Capital continues to stand at Rs. 14.92 crore as on March 31, 2019.

During the year, the Company has not issued any shares or convertible securities. The Company does not have any Scheme for issue of shares including sweat equity shares to the employees or Directors of the Company.

AWARDS AND CERTIFICATIONS

Your Company has received the following awards/ certifications during the year under review:

- The Company''s Sinnar unit was awarded the Energy Efficient Plant by the Confederation of Indian Industry (CII) at its 19th National Award for Excellence in Energy Management 2018.

- Company''s Pallets AP & SP series have obtained ISO-8611-1:2011 Compliance issued by TUV-Nord, Germany.

- Further, continuing the Company''s record of adopting the right practices for optimising the use of scarce resources and energy conservation, this year too your Company has bagged the Gold prize at the National Energy Conservation Award for Plastic Sector 2018 from BEE-Government of India for its Kharadpada unit in Silvassa.

- The Company has also received India Manufacturing Excellence Award issued from Frost and Sullivans for its Silvassa Plant, which certifies the enhanced Manufacturing and supply chain Excellence.

- Mr. Vamanrai V. Parekh, Chairman and Mr. Sharad V. Parekh, Managing Director of the Company were honoured with the Life Time Achievement Award for their immense contribution towards the plastic industry by The Economic Times in their Polymers Awards 2019 - Excellence in Plastics.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to Corporate Social Responsibility and strongly believes that the business objectives of the Company must be in congruence with the legitimate development needs of the society in which it operates.

Pursuant to the provisions of the Section 135 of the Companies Act, 2013 (the Act), your Company has constituted a CSR Committee to monitor the CSR activities of the Company, details of which are provided in the Corporate Social Responsibility Report, forming part of this Report.

The Company''s CSR policy is placed on the Company''s website at https://nilkamal.com/wp-content/uploads/2019/01/ CSRPOLICY.pdf

The Company has contributed an amount of '' 336.05 lakhs towards various CSR activities mainly focused in the areas of promotion of education & healthcare, rural development and providing drinking water and sanitation facilities, along with undertaking other activities in terms of Schedule VII of the Companies Act, 2013. The said activities were carried by the Company directly and vide its Implementing Agency viz Nilkamal Foundation - a Section 8 Company.

The Annual Report on CSR activities is annexed herewith as Annexure A.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and date of this report.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

A separate section on corporate governance practices followed by the Company together with a certificate from the auditors confirming its compliance, forms a part of this Annual Report, as per SEBI Regulations. Further, as per Regulation 34 read with Schedule V of the Listing Regulations, a Management Discussion and Analysis report is annexed to this report.

SUBSIDIARIES AND JOINT VENTURES

During the year under review, your Company has three direct subsidiaries: Nilkamal Foundation in India, Nilkamal Eswaran Plastics Private Limited at Sri Lanka and Nilkamal Crates and Bins - FZE at UAE and one step-down subsidiary: Nilkamal Eswaran Marketing Private Limited at Sri Lanka; and two Joint Venture Companies: Nilkamal Bito Storage Systems Private Limited, which is the Indo-German Joint Venture and Cambro Nilkamal Private Limited, which is the Indo-US Joint Venture.

There has been no material change in the nature of business of the said companies.

During the year under review, the Company''s subsidiary companies at Sri Lanka has exhibited a subdued performance whereas the subsidiary at Ajman showed a decent performance. Further, Nilkamal Foundation - a Section 8 Company - is the Company''s Implementing Agency for undertaking the CSR activities of the Company, which has contributed towards various institutions/ projects for the said purpose.

The Company''s German Joint Venture Company has showed a top line growth and displayed a satisfactory performance; whereas the US Joint Venture Company has showed a robust performance, thus achieving topline growth as well as profits.

In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1, which forms part of the Annual Report.

In accordance with third proviso of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its standalone and the consolidated financial statements has been placed on the website of the Company, www.nilkamal.com. Further, as per fourth proviso of the said section, audited annual accounts of each of the subsidiary companies have also been placed on the website of the Company, www.nilkamal.com.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not given any Loans or Guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

Further, during the year under review, the Company has made an additional investment of 25,370 equity shares of Beta Wind Farm Private Limited, for the purpose of availing wind energy from them for the company''s unit situated at Hosur in the State of Tamilnadu.

NOMINATION AND REMUNERATION POLICY OF THE COMPANY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy relating to remuneration of the Directors, Key Managerial Personnel, Senior Management Personnel and other employees, along with the criteria for appointment and removal of the Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The Nomination and Remuneration Committee is fully empowered to determine /approve and revise, subject to necessary approvals, the remuneration of managerial personnel, after taking into account the financial position of the Company, trends in the industry, qualifications, experience, past performance and past remuneration, etc. The Non-Executive Directors are paid sitting fees for every meeting of the Board and it Committees attended by them. The Nomination and Remuneration Policy of the Company is available on the website of the Company at the https://nilkamal.com/wp-content/uploads/2019/01/Nomination_and_Remuneration_Policy.pdf.

AUDITORS AND AUDITORS'' REPORT

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, having ICAI Registration No. 101248W/ W-100022 were appointed as Statutory Auditors for a second term of five years to hold office from the conclusion of 32nd Annual General Meeting up to the conclusion of the 37th Annual General Meeting of the Company.

The requirement of seeking ratification of the members for continuance of Statutory Auditors appointment has been withdrawn consequent upon the changes made by the Companies (Amendment) Act, 2017 w.e.f. May 7, 2018. Hence, the resolution seeking ratification of the members for their appointment is not being placed at the ensuing Annual General Meeting.

The Statutory Auditor has confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the statutory auditor. Further in terms of the Listing Regulations, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the ICAI.

The Auditors'' Report to the Members on the Accounts of the Company for the year ended March 31, 2019 is a part of the Annual Report. The said Audit Report does not contain any qualification, reservation or adverse remark. During the year 2019, the Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

COST AUDITOR

M/s. B. F. Modi and Associates, Cost Accountants, were appointed as the Cost Auditors of the Company to carry out audit of the cost records of the Company for the financial year 2018-2019. They, being eligible and willing to be re-appointed as Cost Auditors, were appointed as the Cost Auditors of the Company for the financial year 2019-2020 by the Board of Directors, upon the recommendation of the Audit Committee.

The resolution seeking ratification of the remuneration to the said cost auditors for the financial year 2019-2020 is set out in the Notice calling the 33rd Annual General Meeting of the Company.

SECRETARIAL AUDIT

Mr. Pratik M. Shah, Practicing Company Secretary was appointed as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2018-2019. The Secretarial Auditor''s report to the members does not contain any qualification, reservation and adverse remarks and the same is annexed to this report as Annexure B.

During the FY 2018-2019, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

EXTRACT OF ANNUAL RETURN

The Extracts of the annual return in Form MGT 9 as required under Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 has been placed on the website of the Company and can be accessed at link - https://nilkamal.com/mgt-9/

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of your Company is duly constituted in accordance with the requirements of the Companies Act, 2013 read with the Listing Regulations.

Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, consent of the Members by way of Special Resolution is required for continuation of a Non-Executive and Independent Directors beyond the age of 75 years w.e.f. April 1, 2019.

Accordingly, pursuant to the provisions of the Listing Regulations and based on the recommendation of the Nomination and Remuneration Committee, the continuation of directorship Mr. K. Venkataramanan (DIN 00001647), after attaining the age of 75 years till the completion of his present term i.e. upto the conclusion of the Thirty Fourth Annual General Meeting to be held in calendar year 2020 is placed for the approval of the Members through a Special Resolution at the 33rd Annual General Meeting.

Further pursuant to the provisions of the Companies Act, 2013 (the Act”), the members at their 28th Annual General Meeting had appointed Mr. Mahendra V. Doshi (DIN 00123243), Mr. Mufazzal S. Federal (DIN 03409798) and Mr. S. K. Palekar (DIN 01723670) as an Independent Non-Executive Directors to hold office for five consecutive years upto the conclusion of the 33rd Annual General Meeting of the Company. Mr. Mahendra V. Doshi, Mr. Mufazzal S. Federal and Mr. S. K. Palekar are eligible for re-appointment as an Independent Non-Executive Director for the second term of five years from the date of Annual General Meeting of the Company to be held in the calendar year 2019.

Accordingly, pursuant to the provisions of the Act and based on the recommendation of the Nomination and Remuneration Committee, the re-appointment of Mr. Mahendra V. Doshi, Mr. Mufazzal S. Federal and Mr. S. K. Palekar for a period of five years is placed for the approval of the Members through a Special Resolution at the 33rd Annual General Meeting.

During the year under review, the Company has by way of postal ballot approved the continuation of Directorship of Mr. Vamanrai V. Parekh (DIN 00037519), who is above 75 years of age, as a Non-Executive Director and also the continuation of the existing tenure of directorship of Mr. K. R. Ramamoorthy (DIN 00058467), who is above 75 years of age, as an Independent Director and re-appointment of Mr. K. R. Ramamoorthy as an Independent Director for a second term of 5 years from the date of the Annual General Meeting of the Company to be held in the calendar year 2019.

Further, the Company has received declarations from all the Independent Directors stating that they meet the criteria of independence as given under Section 149 of the Companies Act, 2013 and the relevant provisions of the Listing Regulations.

Further, in accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Mr. Hiten V. Parekh (DIN: 00037550), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-election.

The required information of the Directors being re-appointed, pursuant to the provisions of the Listing Regulations, forms part of the Annual Report.

There was no change in the composition of the Board of Directors and the Key Managerial Personnel, except as stated above.

DIRECTORS'' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors confirm the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same;

(b) that they 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 at the end of the financial year and of the profit of the Company for that period;

(c) that they have taken proper and sufficient care 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;

(d) that the annual financial statements have been prepared on a going concern basis;

(e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

As required under the regulation 34 of the Listing Regulations, a cash flow statement is part of the Annual Report 2018-2019. Further, the Consolidated Financial Statements of the Company for the financial year 2018-2019 are prepared in compliance with the applicable provisions of the Act, Accounting Standards and as prescribed by Listing Regulations. The said Financial Statements have been prepared on the basis of the audited financial statements of the Company, its subsidiaries and joint venture companies as approved by their respective Boards of Directors.

ADEQUACY OF RISK MANAGEMENT SYSTEMS

The Board of Directors have adopted an Enterprise Risk Management Policy framed by the Company, which identifies the risk and lays down the risk minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower Policy with a view to provide a mechanism for its Directors/employees to approach the Chairman of the Audit Committee, in case of any grievances or concerns related to fraud and mismanagement, if any. The details of the said Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

An Internal Complaints Committee has been constituted by the Company in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under to redress complaints received on sexual harassment. During the year, the Company received one Complaint of harassment and same has been disposed off after inquiry by Internal Complaints Committee.

During the course of the year, initiatives were undertaken to demonstrate the Company''s zero tolerance philosophy against discrimination and sexual harassment, which included creation of comprehensive and easy to understand training and communication. In addition, workshops were also run for the employees to enhance awareness and knowledge of other biases that may influence thinking and actions.

RELATED PARTY TRANSACTIONS

Your Company has formulated a Policy on materiality of dealing with related party transactions and the same has been hosted on its website at https://nilkamal.com/wp-content/uploads/2019/03/ Policyonmaterialityofanddealingwithrelatedparty 290120191.pdf

All the related party transactions are placed before the Audit Committee for their review and approval. Further, prior omnibus approval of the Audit Committee is obtained for related party transactions of repetitive nature and entered into in the ordinary course of business at an arms'' length basis.

Further, the Company has not entered into any material related party transaction during the year under review. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act, in form AOC-2 is not applicable to your Company.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015 the Board of Directors has undertaken an annual evaluation of its own performance, performance of its various Committees and individual Directors. The details of the said evaluations have been mentioned in the Report on Corporate Governance.

TRANSFER TO IEPF

Pursuant to the provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (The Rules),the Company had sent individual notices and also advertised in the newspapers seeking action from the shareholders who have not claimed their dividends for past seven consecutive years i.e for final dividend of the financial year ended 2010-2011, and thereafter, had transferred such unpaid or unclaimed dividends and corresponding 2,208 equity shares held by 22 shareholders to the IEPF Authority on October 3, 2018.

Shareholders /claimants whose shares, unclaimed dividend, have been transferred to the afore stated IEPF Suspense Account or the Fund, as the case may be, may claim the shares or apply for refund by making an application to the IEPF Authority in Form IEPF-5 (available on http://www.iepf.gov.in) along with requisite fee as decided by the IEPF Authority from time to time.

Further, the Company shall be transferring the unclaimed Dividend for the financial year 2011-2012 to the IEPF Account on or before October 2, 2019. The Company shall also be transferring the shares, on which the dividend has remained unclaimed for a period of seven consecutive years, to the IEPF Account simultaneously on the same date. The Company has sent individual letters to the shareholders for claiming the said dividend and has also advertised the same in the newspapers in accordance to the Rules. Members are therefore requested to ensure that they claim the dividends referred above, before they are transferred to the said Fund.

Details of shares/shareholders in respect of which dividend has not been claimed, are provided on our website at https://nilkamal.com/unclaimed-unpaid-dividend/. The shareholders are therefore encouraged to verify their records and claim their dividends of all the earlier seven years, if not claimed.

STATUTORY INFORMATION

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure C.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules forms a part of the Annual Report.

Further, the disclosures pertaining to remuneration and other details 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 also forms a part of the Annual Report.

However, having regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished without any fee.

Your Company has not accepted Deposits from public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company''s operations in future.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their sincere appreciation for the encouragement and co-operation received by the Company from the Bankers, State Government Authorities, Local Authorities and its Employees during the year.

For and on behalf of the Board

Place: Mumbai Vamanrai V. Parekh

Date: May 11, 2019 Chairman

Director’s Report