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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 43rd Annual Report of the Company together with the Statement of Audited Accounts for the financial year ended 31st March, 2016.

FINANCIAL RESULTS

(Rs. in crores)

Particulars

Year ended 31.03.2016

Year ended 31.03.2015

Revenue from Operations

290.17

390.61

Operating Expenses

292.02

380.06

Operating Profit/(Loss) before Interest, Tax, Depreciation & Amortization

(1.85)

10.55

Depreciation & Amortization Expense

8.19

8.65

Finance Costs

11.31

10.66

Other Income

2.63

1.05

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

(18.72)

(7.71)

Exceptional & Extraordinary Items

-

2.10

Profit/(Loss) before Tax

(18.72)

(5.61)

Tax Expense (including Deferred Tax)

(6.09)

(2.07)

Tax for Earlier Years

(0.04)

-

Profit/(Loss) after Tax

(12.59)

(3.53)

Balance brought forward from the previous year

32.80

37.12

Balance available for appropriation

20.21

33.59

Appropriations:

Adjustment relating to Fixed Assets

-

0.79

Balance carried to Balance Sheet

20.21

32.80

TRANSFER TO RESERVES

In view of loss for the financial year under review, no amount has been transferred to the Reserve.

STATE OF COMPANY AFFAIRS/REVIEW OF OPERATIONS

The sales and other income of the Company was lower at Rs.292.80 crores for the year under review as compared to Rs. 391.66 crores in the previous year. The performance during the year was adversely affected due to global economic uncertainties, recessionary trends, lower demand, depreciation of currency and volatile commodity market. The business environment continues to be challenging.

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, 2016.

SHARE CAPITAL

The paid-up Equity Share Capital of your Company as on March 31, 2016 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, 2016.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

a) in preparation of the annual accounts for the year ended March 31, 2016, 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, 2016 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 under the erstwhile Listing Agreement with the Stock Exchange upto 30th November, 2015 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 w.e.f. 1st December, 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 there under 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

There were no related party transactions entered into during the financial year under Section 188 of Companies Act, 2013. The Policy on Related Party Transactions as approved by the Board is uploaded on the Company''s web-site.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors

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

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 Mlahotra, Chairman & Managing Director, Mr. Pradip H. Gupta, Chief Financial Officer and Mr. Deepak Nagar, GM (Legal) & Company Secretary.

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.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as of the Audit, Nomination & Remuneration & Stakeholders Relationship Committees of the Board. 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 Regulations, 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 of Directors and Audit Committee

During the year 4 (four) Board Meetings, 1 (one) Independent Directors'' meeting and 4 (four) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

M/s. JRS Patel & Co., Chartered Accountants, Vadodara were appointed as Statutory Auditors of your Company at the previous Annual General Meeting held on 30th September, 2014 for a term of three consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report and hence, do not call for any comments under Section 134(3)(f) of the Companies Act, 2013.

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, Ahmadabad, 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 have appointed M/s. Kiran J. Mehta & Co., Cost Accountants for the financial year 2016-17. The Cost Audit Report for the Financial Year 2014-15 was filed with the Ministry of Corporate Affairs on 17th September, 2015.

Secretarial Auditor

During the year, Secretarial Audit was carried out by Mr. Niraj Trivedi, Practising Company Secretary, Vadodara, the Secretarial Auditor of the Company for the financial year 2015-16. There were no qualifications, reservation or adverse remarks given by Secretarial Auditors of the Company. The Secretarial Audit Report is appended as Annexure-A to this Report.

EXTRACT OF ANNUAL RETURN

The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure-B to this Report.

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 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

Consequent upon the coming into effect of the Scheme of Amalgamation between AMIL Enterprises Private Limited (the Transferor Company) and Honeyvick Enterprises Private Limited (the Transferee Company) as approved by the Hon''ble High Court of Gujarat, M/s Honeyvick Enterprises Private Limited, a person acting in concert with promoters of the Company has become the holding company of your Company with effect from February 24, 2016.

Your Company does not have any subsidiary, joint venture or associate Company.

LISTING AGREEMENT

As per the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company entered into Fresh Listing Agreement with the BSE Limited during February, 2016.

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 there under.

During the financial year 2015-16, the company has not received any complaints on sexual harassment and hence no complaints remain pending as of 31 March, 2016.

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 : 13th August, 2016 Chairman & Managing Director

Director’s Report