1.1 company overview
The TPL PLASTECH LIMITED is public limited company incorporated and domiciled in India and has registered office at 102, 1stFloor, Centre Point, Somnath Daman Road, Somnath, Dabhel, Nani Daman, Daman (U.T.) - 396210. It is incorporated under the Companies Act, 1956 and its shares are listed on the Bombay Stock Exchange and National Stock Exchange in India. The Company has Six plants situated across India. The Company is a subsidiary of Time Technoplast Limited.
b) Rights of Equity Shareholders
The Company has only one class of Equity Shares having par value of Rs. 10.each, holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holder of equity shares will be entitled to receive any of the remaining assets of the Company.
f) Dividend paid and proposed:
(i) The Board of Directors, in its meeting held on 25th May, 2017, proposed a final dividend of Rs.3 per share and the same was approved by the shareholders at the Annual General Meeting held on 29th September, 2017, this resulted in a cash outflow of Rs.281.65 lacs, including corporate dividend tax of Rs. 47.64 Lacs.
(ii) The Board of Directors, in its meeting held on 22nd May, 2018, have proposed a final dividend of Rs.3.5 Per Share for the year ended 31st March, 2018. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting and if approved would result in a cash outflow of Rs.328.59 lacs including corporate dividend tax of Rs.55.58 Lacs.
The company's pending litigation comprises mainly claims against the Company, proceedings pending with tax & other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonable expect the outcome of these proceedings to have a material impact on its financial statements. Future cash outflow in respect of the above are determinable only on receipts of judgements/decisions pending with various forums/authorities.
(iii) Capital Commitment: Rs.67,20,793 (Previous Year' Rs.3,07,646 )
2.2 The amount of exchange difference (net) of Rs.1,61,54,685 credited (Previous year Credited of Rs.29,386,171) to the statement of Profit & Loss for the year.
3.3 As per Ind As-108 segment Reporting
The Company's operations fall under a single segment i.e. Polymer Products and all its business operations are in India.
3.4 Trade Payables include Rs.147,422,561 (as at 31st March 2017 Rs.173,799,283) towards buyers credit facilities availed from Bankers out of their working capital facilities.
3.5 Sales of Products Includes Rs.74,76,640 (Previous year Rs.18,046,347) towards Advance Licence Duty benefits.
3.6 i) In the Opinion of the Management, any of the assets other than fixed assets and non-current investments have value on realization in the ordinary course of business at least equal to the amount at they are stated.
ii) The accounts of certain Trade Receivables, Trade Payables, Loans and Advances are however, subject to formal confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year's financial statements on such reconciliations/adjustments.
Notes :
No amounts in respect of related parties have been written off/written back/provided for during the year.
Related party relationships have been identified by the management and relied upon by the auditors.
Note 4 - Financial Risk Management
Financial risk management objectives and policies
The Company Financial risk management is an integral part of how to plan and execute its business strategies. The company risk management policy is set by the Managing Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
(i) Market Risk- Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the company's position with regards to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
(ii) Market Risk- Foreign currency risk.
The Volatility of the rupee against the dollar which severely affects the import dependent industries such as ours. We are importing the raw material (Polymers) which constitutes almost 70% of sale price. There have been large capacities added in GCC and Iran for production of polymers through gas cracking which are immune to future increase in prices of crude. We have seen substantial decline in raw material prices and this trend would continue at least for next 4/5 years until all these new capacities gets absorbed.
(iii) Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. To manage this, the company periodically assess financial reliability of customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly.
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of default occuring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the opertaing results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
(iv) Liquidity Risk
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time, or at a reasonable price. The company's treasury deparment is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the company's net liquidity position through rolling forecasts on the basis of expected cash flows.
a) The company has been sanctioned limit of working capital facilities Fund Based amounting to Rs. 4600 Lacs (as on 31st March, 2017 Rs.3850 Lacs) & Non Fund Facility of Rs.3650 Lacs (as on 31st March, 2017 Rs.3650 Lacs) which are secured to bank by 1st charge ranking pari passu on Current Assets (Present & Future) of the company & 1st Charge ranking pari passu on Fixed Assets (moveable & Immovable) of Silvassa Unit & 2nd pari passu charge on fixed assets (moveable & immovable) of pantnagar & moveable assets of Bhuj, Ratlam & Vizag Unit.
b) The company has been also sanctioned Term Loan of Rs.2245 Lacs (as on 31st March 2017 Rs.845 Lacs) which is secured to Bank by 1st Charge ranking pari passu on Fixed Assets (moveable) of Silvassa Unit, Pantnagar (Gadapur), Bhuj, Ratlam & Vizag Unit and 2ndpari passu charge on Current assets (present & future) of the company.
(vii) Capital risk management
The Company's objectives when managing capital are to
* Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders
* Maintain an optimal capital structure to reduce the cost of capital.
5 Financial instruments
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
6 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”
i) Gratuity: In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by Life Insurance Corporation of India under Group Gratuity Scheme.
|