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Directors Report of Deccan Polypacks Ltd.

Mar 31, 2015

The Directors have pleasure in presenting their 31st Annual Report together with the Audited Accounts and Cash Flow Statements for the year ended 31st March 2015.

The financial results for the year ended 31st March 2015 are summarized Below.

(Rs. in Lakhs)

Particulars 2014-15 2013-14

Income from operations 183.27 2277.50

Gross Profit (-) 1369.01 36.50

Interest 145.12 214.62

Depreciation 21.86 30.91

Profit/(Loss) before taxation (-)1535.99 (-)209.04

Deferred Tax(Liability)/Asset (-) 18.66 48.74

Current tax - -

Net Profit/(Loss)After Taxation (-)1554.65 (-) 160.29

Balance brought forward 20.56 180.85 Balance carried to

Balance Sheet (-) 1534.09 20.56

1. Operations

The overall performance of the Company in terms of sales and turnover has been low in comparison with the previous year. During the year the under report the Company has incurred net loss of Rs 1554.65 Lakhs in comparison with net loss of Rs 160.29 Lakhs in the previous year. During the year the operations continued during the first quarter only and the production recorded was 99 MTs. Since the production was suspended with effect from 15th July 2014, the production figures and capacity utilization figures are not comparable with the previous year. The production was suspended due to increase in the prices of raw mateiral and fall in the selling price of the finished goods due to stiff competitions.

2. Erosion of Networth:

As on 31.03.2015 the net worth of the Company is 100% eroded and Company has become sick company under the provisions of the Sick Industrial Companies(Special Provisions) Act, 1985 (SICA). The Company would take steps to file report to the Board for Industrial and Financial Reconstruction (BIFR) in terms of the provisions of SICA.

3. Future Outlook

The Company is exploring options for revival including sale of the undertaking. The update status will be informed to the shareholders.

4. Disclosure as per Listing Agreement :

Clause 43 :

The Company's shares are listed on the Bombay Stock Exchange Ltd., P J Towers, Dalai Street, Fort, Mumbai . It is further informed that the listing fees for the year 2015-2016 has not been paid to the exchange due to shortage of funds and stoppage of operations.

5. Meetings of the Board of Directors :

During the year ended March 31st 2015, Six Board Meetings were held. The dates on which the Board Meetings were held are 29.05.2014, 14.08.2014, 26.09.2014,11.11.2014,09.02.2015 and 30.03.2015.

6. Statement on Declaration given by Independent Directors under Section 149(6)

The Independent Directors have submitted the declaration of independence as required pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Section 149(6).

7. Nomination and Remuneration Committee

The Nomination and Remuneration Committee consists of the following directors namely Sri K Goapl, Sri N S B Reddy and Sri N V S Rao.

Brief description of terms of reference :

a) Carry on the evaluation of every director's performance.

b) Formulation of criteria for determining qualification, positive attributes and independence of a Director.

c) Recommend policy to the Board relating to remuneration of the directors, key managerial personnel and other employees.

d) Devising a policy on board diversity

e) Any other matter as the board may decide from time to time.

Nomination and Remuneration Policy :

The objective of the policy :

a) Lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors and persons who may be appointed as key managerial persons and to senior management positions.

b) To provide reward directly linked to their effort, performance, dedication and achievement relating to company's operations.

c) To retain, motivate, promote talent to ensure long term sustainability of talented managerial persons and create competitive advantage.

d) Determine remuneration based on company's size and financial positions and trends and practices.

8. Particulars of Loans, Guarantees and Investments under Section 186

The Company has not given any loan, or guarantee, or provided any security in connection with a loan to any other body corporate or person during the financial year.

9. Particulars of contracts or arrangements with related parties referred to in Section 188(1) :

The particulars of contracts or arrangements with related parties referred to Sec 188(1) is prepared in Form NO. AOC-2 pursuant to Sec 134(3)(h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 and the same is enclosed as Annexure - 2 to this report.

10. Extract of Annual Return :

The extract of Annual Return is prepared in Form MGT- 9 as per the provisions of Companies Act, 2013 and Rule 12 of the Companies ( Management and Administration ) Rules, 2014 and the same is enclosed as Annexure -3 to this report.

11. Corporate Governance

The Company has implemented the Corporate Governance Code during the year under report. A detailed report is enclosed and forms part of this Annual Report.

12. Directors Responsibility Statement

The Board of Directors of the Company hereby declares and states that :

a) In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b) 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 at the end of the financial year 31.03.2015 and of the loss of the Company for the period ended 31.03.2015

c) the Directors have 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 have 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..

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.

13. Energy, Technology and Foreign Exchange

Additional information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed in terms of section 134(M) read with Companies (Accounts) Rules 2014 ) is as per annexure 1 hereto and forms part of this report.

14. Risk Management Committee :

Risk Management Committee consists of the following Directors :

a) Sri K Gopal

b) Sri D R S P Raju

c) Sri D V Prudvi Raju

Risk Management Policy :

The Company has taken steps to mitigate the following risks

Raw Material Price:

Ours is a high volume manufacturing industry wherein the main raw material is PP / HDPE granules which are available indigenously and by imports. The raw materials are subject to frequent changes as their prices depend on petroleum products. The prices are closely monitored and depending on the requirement the stocks are maintained.

Competition and price pressure :

Our being a packing industry there are many players and there is severe competition and price cutting indulged by competitors. Action of one player is followed by other to either increase market share or offer low price to retain the volumes.

Foreign Currency Risks:

The Company's exposure to foreign currency is low. Majority purchase of raw materials through domestic market. The export volumes are low. The impact of foreign exchange fluctuation is almost negligible considering the volume of transactions in foreign currency.

15. Statutory Auditors

The Company, in terms of Section 139(1) and (2) of the Act 2013, is required to appoint statutory auditors for a term of five consecutive years i.e. till the conclusion of sixth annual general meeting and ratify their appointment, during the period, in every annual general meeting by an ordinary resolution.

The period for which any firm has held office as auditor prior to the commencement of the Act 2013 will be taken into account for calculating the period of five consecutive years, as per the fourth provision to Section 139(2) of the Act 2013 read with Rule 6(3) of the Companies ( Audit and Auditors ) Rules, 2014.

M/s M.Bhaskara Rao & Co., Chartered Accountants, Hyderabad who were earlier appointed as statutory auditors of the Company, at the annual general meeting held on 26th September, 2014, are eligible to be appointed for the remaining period of three years out of the first term of five consecutive years in terms of the Act 2013.

The Company has obtained necessary certificate under Section 141 of the Act 2013 from the auditor conveying their eligibility for the above appointment. The audit committee and board reviewed their eligibility criteria, as laid down under Section 141 of the Act 2013 and recommended their appointment as auditors for the aforesaid period.

16. Board of Directors

Sri K Gopal, Director is liable to retire by rotation at this Annual General Meeting and being eligible, offers him for re-appointment.

Sri N S B Reddy, Director ceased to be Director of the Company with effect 29.05.2015 consequent upon his resignation.

Sri N V S Rao, Director is liable to retire by rotation at this Annual General Meeting and being eligible, offers him for re-appointment.

Sri D R S P Raju, Director who ceased to be Managing Director and continued to be Director, his appointment as Director liable to retirement by rotation is being placed for approval of the members at the meeting.

Re-appointment of Sri D V Prudvi Raju, Whole Time Director is proposed at the ensuing Annual General Meeting since his term expired on 08.02.2015.

17. Directors and Key Management Personnel who were appointed or have resigned during the year

Sri K Gopal, Sri N S B Reddy and Sri N V S Rao were appointed as independent directors to hold office for a term of 5 years at the Annual General Meeting held on 26.09.2014.

Sri D R S P Raju, Managing Director resigned as Managing Director at the Board Meeting held on 14.08.2014 however he continues to be Director.

Kum. R Rama Devi was appointed as Additional Director ( independent Women Director ).

18. Secretarial Audit Report

Copy of the report of Sri V.B.S.S Prasad, Practicing Company Secretary (CP No : 4605) for the year under report in Form MR-3 is attached as Annexure 4 to this report. There are no qualifications in the Secretarial Report.

19. Particulars of appointment and remuneration of Managerial Personnel :

The statement of particulars of Appointment and Remuneration of Managerial Personnel in terms of Rule 5 of Companies ( Appointment and Remuneration of Managerial Personnel ) Rules , 2014 is enclosed as Annexure 5 to this report.

20. Insurance :

All properties and insurable interests of the Company including building, plant and machinery and stocks have been fully insured.

21. Change in nature of Business :

There is no change in the Companies nature of business during the financial year ending 31.03.2015 except that the production / operations continues to be suspended since 15th July 2014.

22. Internal Control System and their adequacy :

Considering the size of business and nature of operations and internal control systems and procedure adopted and reviewed periodically by the Board and Audit Committee the existing control systems are adequate.

23. Significant and Material orders passed by

Regulators : No such orders have been received during the year under report.

Material changes and commitments :-

There are no material changes and commitments in the business operations of the Company during the year under report except that the production continues to remain suspended since 15th July 2014.

24. Policy on Sexual Harrasment :

The Company has no women employee in the employment of the Company. The Company is in the process of framing and formulating policy on sexual harassment at workplace in accordance with Sexual Harassment of Women at workplace ( Prevention, prohibition and Redressal ) Act, 2013. During the year under report the Company has not received any complaints pertaining to Sexual Harassment.

25. Acknowledgements

The Board expresses its grateful thanks to the State Bank of India, State Bank of Hyderabad, various departments of the State and Central Government, customers, vendors and shareholders for their valuable support to the company, staff and employees. On behalf of the Board.

for DECCAN POLYPACKS LIMITED



Place : Hyderabad D V. Prudvi Raju

Date:29.05.2015 Whole Time Director


Mar 31, 2013

The Directors have pleasure in presenting their 29th Annual Report together with the Audited Accounts and Cash Row Statements for the year ended 31st March 2013.

The financial results for the year ended 31st March 2013 are summarized below.

(Rs. in Lakhs)

Particulars 2012-13 2011-12

Income from operations 2760.87 3208.05

Gross Profit 267.37 264.96

Interest 218.86 200.48

Depreciation 30.71 30.20

Profit/(Loss) before taxation 17.80 34.28

Deferred Tax(Liability)/Asset 5.42 9.02

Current tax (3.39) (6.53)

Net Profit/(Loss)After Taxation 19.83 36.77

Balance brought forward 161.02 124.25

Balance carried to

Balance Sheet 180.85 161.02



Operations

The overall performance of the company in terms of sales and turnover has been lower than the previous year. During the year the company has recorded production of 2010 MTs (previous year 2638 MTs). The production has been low in the year under report due to frequent power cuts'' leading to loss of production for almost 3 months. This has also affected the capacity utilization. The Company has recorded capacity utilization of 65.62% in comparison with the previous year 86.12%. The Company has focused in local sales hence has not recorded any exports.

The realization on sales during the year under report has marginally improved for woven sacks and fabric. The Company has recorded lower net profit of Rs. 19.83 lakhs as against Rs. 36.77 Lakhs in the previous. The company continued its efforts to reduce costs wherever possible to improve its overall performance. The company is hopeful of achieving improved performance in the coming years provided there is no disturbance on account of power supply and other factors. The company has made alternate arrangements to ensure continous and uninterrupted power supply by installing DG sets and supply through private companies.

Future Outlook

The power situation has not shown any improvement during the current year and the power crises is expected to continue. The Company is exploring the possibilities of purchasing power from Private Companies to mitigate the shortfall in power availability and ensure continous production. The raw material prices are expected to remain stable and continue at the same levels as previous year, The Government is making efforts to boost the construction activity by taking up various infrastructure projects and announcing various schemes to provide for housing to the economically weaker sections.Such actions would boost the production of cement and its requirement for its packing. The company mainly caters to the packing requirements of the Cement and Fertilizer industries whose operations has been affected due to present recessionary market conditions. The company has drawn strategic plans to strike balance between the domestic and export market to ensure improvement in performance in future.

Disclosure as per Listing Agreement: Clause 43:

The company''s shares are listed on the Bombay Stock exchange Ltd., P J Towers, Dalai Street, Fort, Mumbai. It is further informed that the listing fees for the year 2013-2014 has been paid to the exchange.

Corporate Governance

The company has implemented the Corporate Governance Code during the year under report. A detailed report is enclosed.

Directors Responsibility Statement

In terms of the provisions of Section 217 (2 A A) of the Companies Act, 1956 it is stated that:

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

(b) 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 at the end of the financial year and of the profit of the company for that period.

(c) the Directors have 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 have prepared the annual accounts on a going concern basis.

CRISIL RATING

Your company has been accredited with Crisil B / Stable/ Crisil A4 rating to the Company for the facilities availed from the Bank.

Energy, Technology and Foreign Exchange

Additional information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be. disclosed in terms of section 217(l)(e) of the Companies Act, 1956 as amended by the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Particulars of Employees

There is no employee in the company coming under the provisions of section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended.

Auditors

M/s Bhaskara Rao & Co. Chartered Accountants, the Statutory Auditors of the company retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Directors

Pursuant to the Provisions of Sections 255 and 256 of the Companies Act, 1956 Sri K. Gopal Director of the company retires by rotation at the ensuing Annual General Meeting and being eligible offer himself for re- appointment.

Secretarial Compliance Certificate

Secretarial Compliance Certificate in terms of section 383 A of the Companies Act, 1956 is attached and forms part of the report.

Acknowledgements

The Board expresses its grateful thanks to the State Bank of India, State Bank of Hyderabad, various departments of the State and Central Government, customers, vendors and shareholders for their valuable support to the company, staff and employees.



For and on behalf of the Board



G V S Raju D R S P Raju

Director (Commercial) Managing Director

Place: Hyderabad

Date: 30.05.2013


Mar 31, 2010

The Directors have pleasure in presenting their 26th Annual Report together with the Audited Accounts and Cash Flow Statements for the year ended 31st March 2010.

The financial results for the year ended 31st March 2010 are summarized below.

(Rs. in Lacs)

Particulars 2009-2010 2008-2009

Income from operations 3005.09 3330.25

Gross Profit 169.17 198.81

Interest 118.73 136.74

Depreciation 24.92 28.27

Profit/(Loss) before taxation 25.52 33.80

Deferred Tax(Liability)/Asset 27.32 (3.38)

Fringe Benefit Tax - (0.66)

Current tax (3.94) (3.41)

Net Profit / (Loss) After Taxation 48.90 26.35

Balance brought forward 51.11 24.76

Balance carried to Balance Sheet 100.01 51.11



Operations

The overall performance of the company in terms of production has been higher in comparison with the previous year. During the year the company has recorded production of 2652 MTs (Previous year 2482 MTs ), the volume of export sales has been low compared to previous year. The company has recorded capacity utilization of 86.58 as against 81.03% recorded in the previous year.

The company recorded income from operations of Rs 3005.09 lacs as against Rs 3330.25 lacs in the previous year. The company exported 150.54 MTs of its products valued at Rs. 144.30 lacs during the year under report as against 163 MTs valued Rs. 150.04 lacs in the previous year. The sales in the domestic market as well as export has reduced during the year under report. The realisation on sales has been low during the year under report due to recession and price under cutting due to steep competition. This is mainly due to slow down in the construction and infrastructure activities and general recession in the economy. In spite of such a scenario the company recorded increase in net profit mainly due to increase in deferred tax asset. The company has recorded net profit of Rs 48.90 lacs as against Rs. 26.35 lacs in the previous year. The company has continued its efforts to reduce costs wherever possible to improve its overall performance. The company is hopeful of achieving improved performance in the coming years.

Future Outlook

The recessionary trend in the present economic situation especially in the construction and infrastructure activity has severely affected the demand for companys products. The company mainly caters to the packing requirements of the Cement and Fertilizer industries whose growth has been affected due to present recessionary market conditions. The Government is making efforts to stabilize the economy by reducing interest rates, ensuring stability in stock markets announcing certain other measures to improve the demand position, however it would take some more time to see the results of the efforts put in by the Government. Similar is the situation in the export market. The economies in the Europe, America have been facing similar trends due to which the orders for exports have declined. The company has drawn strategic plans to strike balance between. the domestic and export.market to ensure improvement in performance in future.

Corporate Governance

The company has implemented the Corporate Governance Code during the year under report. A detailed report is enclosed.

Directors Responsibility Statement

In terms of the provisions of Section 217 (2AA) of the Companies Act, 1956 it is stated that:

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

(b) 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 at the end of the financial year and of the profit of the company for that period.

(c) the Directors have 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 have prepared the annual accounts on a going concern basis.

CRLS1LRATING:

Your company has been accredited with B/ Stable rating for Cash Credit Limits and P4 Rating for Non Fund Based borrowing by CRISIL. The Rating P4 indicates that the degree of safety regarding timely payment on the instrument is minimal and is likely to be adversely affected by short-term adversity or less favourable conditions.

Energy, Technology and Foreign Exchange

Additional information on conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed in terms of section 217(1 )(e) of the Companies Act, 1956 as amended by the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is annexed hereto and forms part of this report.

Particulars of Employees

There is no employee in the company coming under the provisions of sectio- 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees ) Rules 1975 as amended, hence not attached.

Auditors

M/s Bhaskara Rao & Co. Chartered Accountants, the statutory Auditors of the company retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Directors

Pursuant to the provisions of Sections 255 and 256 of the Companies Act, 1956 Mr. D V R Raju and Mr. N SB Reddy Directors of the company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Secretarial Compliance Certificate

Secretarial Compliance Certificate in terms of section 383 A of the Companies Act, 1956 is attached and forms part of the report.

Acknowledgements

The Board expresses its grateful thanks to the State Bank of India, State Bank of Hyderabad, various departments of the State and Central Government, customers, vendors and shareholders for their valuable support to the company, staff and employees.



For and on behalf of the Board

G V S Raju D R S P Raju

Director (Commercial) Managing Director

Place : Hyderabad

Date : 31.05.2010

 
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