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Panchmahal Steels Ltd.

BSE: 513511 | NSE: PANCHMSTEL | Series: | ISIN: INE798F01010 | SECTOR: Steel - Medium & Small

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Annual Report

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

Director’s Report

DIRECTORS’ REPORT

To,

The Members

The Company''s Directors are pleased to present the 45th Annual Report of the Company together with the Statement of Audited Accounts for the financial year ended 31st March, 2018.

FINANCIAL RESULTS

(Rs. in lacs)

Particulars

Year ended 31.03.2018

Year ended 31.03.2017

Revenue from Operations

39821.93

36241.01

Operating Expenses

38172.03

34450.36

Operating Profit before Interest, Tax, Depreciation & Amortization

1649.90

1790.65

Depreciation & Amortization Expense

783.65

778.08

Finance Costs

1291.18

1351.15

Other Income

463.93

363.76

Profit/(Loss) before Exceptional & Extraordinary Items and Tax

38.99

25.18

Exceptional & Extraordinary Items

-

-

Profit/(Loss) before Tax

38.99

25.18

Tax Expense (including Deferred Tax)

(15.72)

(6.99)

Tax for Earlier Years

-

2.77

Profit for the year from Continuing Operations

54.71

29.40

Other Comprehensive Income

-

-

Total Comprehensive Income for the year

54.71

29.40

TRANSFER TO RESERVES

In view of inadequacy of profits for the financial year under review, no amount has been transferred to the Reserves. STATE OF COMPANY AFFAIRS / REVIEW OF OPERATIONS

The total revenue (including other income) of the Company during the year was Rs.402.86 crores as compared to Rs.366.05 crores in the previous year. The Company reported a total comprehensive income of Rs.54.71 lacs for the year under review. The business environment though challenging looks promising and optimistic, considering the overall economic environment and marketing strategy of the Company.

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standards (Ind- AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company''s state of affairs, profits and cash flows for the year ended March 31, 2018.

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statements relate and the date of this Report.

DIVIDEND

The Directors do not recommend any dividend for the year ended 31st March, 2018.

SHARE CAPITAL

The paid-up Equity Share Capital of your Company as on March 31, 2018 was Rs.19.08 crores. The Company has not issued shares with differential voting rights/Bonus Shares nor has granted stock options/sweat equity and has not bought back any of its securities during the year under review.

FIXED DEPOSITS

The Company has not accepted or renewed any deposits during the year. There are no outstanding deposits as at 31st March, 2018.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

a) in preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) 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 as at March 31, 2018 and of the profit of the Company for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a ''going concern'' basis;

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

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

CORPORATE GOVERNANCE REPORT AND MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Company has implemented procedures and adopted practices in conformity with the Code of Corporate Governance as stipulated under Regulation 34 read with Schedule V(C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Company has implemented Code of Conduct for all its Executive Directors and Senior Management Personnel, Non-Executives Non-Independent and Independent Directors, who have affirmed compliance thereto. The said Code of Conduct has been posted on the website of the Company.

The Management Discussion and Analysis Report and the Corporate Governance Report, appearing elsewhere in this Annual Report, forms part of Directors Report. A certificate from the Statutory Auditors of the Company certifying the compliance of conditions of Corporate Governance is also annexed thereto.

CORPORATE SOCIAL RESPONSIBILITY

The provisions as prescribed under Section 135 of the Companies Act, 2013 with regard to corporate social responsibility along with Rules made thereunder are not applicable to the Company. The Corporate Social Responsibility Policy and the Committee shall be framed and constituted as and when required.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not directly or indirectly:

a) given any loan to any person or other body corporate other than usual advances envisaged in a contract of supply of materials if any,

b) given any guarantee or provide security in connection with a loan to any other body corporate or person; and

c) acquired by way of subscription purchase or otherwise, the securities of any other body corporate exceeding sixty percent, of its paid-up share capital, free reserve and securities premium account or one hundred percent of its free reserves and securities premium account whichever is more.

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The said Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s web-site.

There were no related party transactions entered into during the financial year under Section 188 of Companies Act, 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Change in Directors

Mr. Hanish Malhotra, Director (Marketing) and Mr. Mohanraj M. Singhi, Independent Director, have resigned from the Board of Directors with effect from 17th May, 2017 and 8th July, 2017 respectively.

The Board records its appreciation for the valuable services rendered by both the Directors.

Re-appointments

In accordance with the applicable provisions of the Companies Act, 2013 and Rules made thereunder, Mr. Pradeep Sharma retires by rotation at the forthcoming Annual General Meeting and being eligible offer himself for reappointment. The Board recommends his re-appointment.

The Board has re-appointed Mr. Ashok Malhotra as Managing Director of the Company w.e.f. 1st April, 2018 for a period of 3 years. The Board recommends his re-appointment.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.

In accordance with the provisions of Section 152(6)(e) of the Companies Act, 2013, none of the Independent Directors are liable to retire by rotation.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the annual evaluation of the performance of the Board, its committees and of individual directors has been made by the Board of Directors of the Company. The details of Board evaluation process have been provided under the Corporate Governance Report.

Familiarization Programme for Independent Directors

In compliance with the requirements of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization programme for Independent Directors to familiarize them with their role, rights and responsibilities as Directors, the operations of Company, business overview etc. The details of familiarization programme are explained in the Corporate Governance Report.

Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee had framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of the Remuneration Policy forms part of Corporate Governance Report of this Annual Report.

Number of Meetings of the Board

The details of the number of meetings held during the financial year 2017-18 forms part of the Corporate Governance Report. The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17(2) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 Committees of the Board

The Board of Directors has the following Committees:

1. Audit Committee

2. Remuneration and Nomination Committee

3. Stakeholders'' Relationship Committee

The details of the Committees along with their composition, number of meetings held and attendance at the meetings are provided in the Corporate Governance Report.

Key Management Personnel

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Management Personnel of the Company are - Mr. Ashok Malhotra, Chairman & Managing Director, Mr. Pradip H. Gupta, Chief Financial Officer and Mr. Deepak Nagar, GM (Legal) & Company Secretary. During the year, there were no changes in Key Management Personnel of the Company.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013, the Members at the 44th Annual General Meeting of the Company held on 21st September, 2017 appointed M/s Atul Parikh & Co, Chartered Accountant (Firm Reg. No.106496W) as statutory auditors of the Company from the conclusion of the 44th Annual General Meeting till the conclusion of 49th Annual General Meeting, covering one term of five consecutive years, subject to ratification by the members at each intervening Annual General Meeting.

The requirement to place the matter relating to appointment of Statutory Auditors for ratification by Members at every Annual General Meeting has been done away with vide notification dated May 7, 2018, issued by the Ministry of Corporate Affairs. Accordingly no resolution is proposed for ratification of appointment statutory auditors of the Company. They are eligible for re-appointment and have given their confirmation that they are not disqualified from continuing as Auditors of the Company.

There is no audit qualification, reservation or adverse remark or disclaimer given by the Auditors in their Report for the year under review.

Internal Auditors

Your Company has appointed M/s Saurabh Shah & Co., Chartered Accountants, Vadodara as Internal Auditors to carry out the Internal Audit of various operational areas of the Company.

Cost Auditors

M/s Kiran J. Mehta & Co., Cost Accountants, Ahmedabad, the Cost Auditors of the Company carried out the audit of cost records for steel Plant of the Company during the year.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Kiran J. Mehta & Co., Cost Accountants, (Firm Registration Number 000025) as Cost Auditor to audit the cost records of the Company for the financial year 2018-19. As required under the Companies Act, 2013, a resolution seeking members'' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

The Cost Audit Report for the financial year 2016-17 was filed with the Ministry of Corporate Affairs on 31st August, 2017.

Secretarial Auditor

In terms of the provisions of Section 204 of the Companies Act, 2013, Mr. Niraj Trivedi, Practicing Company Secretary, Vadodara, have been re-appointed by the Board as Secretarial Auditor of the Company for the financial year 2018-19.

The Secretarial Audit Report as issued by the Secretarial Auditor in Form No. MR-3 for the financial year 2017-18 is annexed herewith as Annexure -A and forms integral part of this Annual Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Company has complied with applicable Secretarial Standards during the year.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return required under Section 134(3)(a) and 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, forms part of this report as Annexure-B”.

AUDIT COMMITTEE

During the year, the Board has accepted all recommendations of Audit Committee and accordingly no disclosure is required to be made in respect of non-acceptance of the recommendation of the Audit Committee by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

RISK MANAGEMENT POLICY

The Company has a Risk Management Policy to ensure appropriate risk management within its systems and culture. The Board of Directors and the Audit Committee of the Company periodically reviews the Risk Management Policy of the Company. The provisions relating to Risk Management Committee are not applicable to the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. These systems are routinely tested by Statutory as well as Internal Auditors. Significant audit observations, if any and follow up actions thereon are reported to the Audit Committee.

The Company has in place adequate internal financial controls with reference to financial statements. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHNAGE EARNINGS & OUTGO 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(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure- C to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure- D to this Report.

The statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out under Section 197(12) of the Act read with Rules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure- E to this Report.

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 and its future operations.

SUBSIDIARY, JOINT VENTURES OR ASSOCIATE COMPANY

Honey Vick Enterprises Private Limited is a holding company of the Company, holding 55.12% Equity Share Capital of the Company. Neither the Company has any subsidiary/ associate/ joint venture company nor any other company has become subsidiary/ Associate/ Joint Venture company of the company during the year.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.

During the year under review, the company has not received any complaints on sexual harassment and hence no complaints remain pending as of 31 March, 2018.

APPRECIATION

Your Directors thank the Banks, Financial Institutions, Shareholders, Customers and Suppliers for their co-operation and support to the Company. The Directors express their sincere appreciation for the dedication and commitment of all its employees.

For and on behalf of the Board of Directors

Place : Vadodara Ashok Malhotra

Date : 11th August, 2018 Chairman & Managing Director

Director’s Report