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Paramount Communications Directors Report, Paramount Comm Reports by Directors
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Paramount Communications

BSE: 530555|NSE: PARACABLES|ISIN: INE074B01023|SECTOR: Cables - Telephone
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Directors Report Year End : Mar '18    Mar 17

Directors'' Report

To,

The Members of

Paramount Communications Limited

The directors hereby present the 24th Annual Report along with audited statement of accounts of the Company for the year ended 31st March, 2018.

1. FINANCIAL HIGHLIGHTS

The financial performance of the Company for the year ended 31st March, 2018 is summarized below:

(Rs, in Lakhs)

Particulars

Year ended 31st March, 2018

Year ended 31st March, 2017

Total Revenue including Other Income

43,918

35,432

Less: Excise Duty

918

3,445

Net Revenue including Other Income

43,000

31,986

Profit/ (Loss) before Interest, Depreciation, Tax and Exceptional items

107

(4,395)

Interest

415

1,903

Depreciation & Amortization of FCMITDA

923

969

Profit/(Loss) before Tax and Exceptional Items

(1,231)

(7,267)

Exceptional Items

2,700

8,739

Tax Expenses

-

-

Profit/(Loss) after Tax and Exceptional Items

1,469

1,472

Other Comprehensive Income

(6)

(29)

Total Net Profit/(Loss) for the year including other Comprehensive Income

1,464

1,443

3. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

As a result of concerted and constant efforts of the promoters to revive and rehabilitate the Company, the Company has been able to settle majority of its secured creditors, viz. State Bank of India, State Bank of Patiala, IDBI Bank and Dena Bank, who have assigned their debts to an Asset Reconstruction Company(ARC) i.e. Invent Assets Securitization and Reconstruction Private Limited. Further, the Company has reached settlement with ARC and the settled amount is to be repaid in a phased manner The Company has entered into a One-Time Settlement with Standard Chartered Bank and the amount thereof has been duly paid.

During the financial year ended 31st March 2018, your Company recorded total revenue of RS, 439.18 Core as compared to the total revenue of RS, 354.32 Core recorded during the previous financial year ended 31st March 2017. Net Revenue from operations for the year ended 31st March 2018 has increased by about 34% over the corresponding period last year. The total Net Profit including other comprehensive Income of the Company for the financial year ended 31st March 2018, RS, 14.64 Crore as against RS, 14.43 Crore during previous year 2016-2017. Details of the Exceptional Items have been mentioned in Notes to the Financial Statements in this Annual Report.

2. DIVIDEND

Your directors do not recommend declaration of any dividend for the FY 2017-18.

5. TRANSFER TO RESERVES

In view of insufficient profits earned by the Company during the current financial year, your Company do not propose to transfer funds to the General Reserves.

6. PUBLIC DEPOSITS

During the FY 2017-18, your Company has not accepted any deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

7. BOARD OF DIRECTORS

In compliance with the provisions of Section 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the independent directors of the Company viz. Mr. S.P.S. Danni, Mr. Satan Pal, Mr. Vijay Bhutan and Mrs. Malini Gupta hold office for a fixed term of five (5) years and are not liable to retire by rotation.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Articles of Association of the Company, Mr. Sanded Agawam (DIN 00002646), is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for reappointment. The Board recommends his re-appointment as a Director.

In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief resume of the director proposed to be reappointed, the nature of expertise in specific functional areas, names of the companies in which he holds directorship(s) and membership/chairmanship of Board Committees, shareholding and relationships between directors inter-se, are forming part of the Notice of Annual General Meeting.

8. DECLARATION OF INDEPENDENCE

In compliance with the provisions of Section 149 (7) of the Companies Act, 2013, each Independent Director has given a written declaration to the Company, thereby confirming that he/she meets the criteria of independence as mentioned under Section 149 (6) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, your Directors hereby confirm that:

The Company has also arrived at a settlement with its unsecured creditors viz. US$ 7.5 Million Outstanding FCCB holders, and the outstanding bondholders have agreed to accept 7921 Equity Shares per Outstanding Bond, in lieu of dues payable to them. Consequently, during the financial year 2018-19, 1 1881500 Equity Shares of RS,2/- each, have been issued at a premium, at a price of RS,28.40/- per Equity Share, in accordance with the agreed terms.

Further, the Non-Convertible Redeemable Preference Shares (NCRPS), which were redeemable in the year 2023, were redeemed by the Company during the financial year 2017-2018, by way of fresh issue of Equity Shares of RS,2/- each, at a price of RS,5.25/- per share. This has resulted in improving the net worth of the Company on long term basis, as the obligation for repayment on redemption of preference shares has ceased. Accordingly, 17669000 Equity Shares of RS,2/- each, ranking pari-passu with the existing Equity Shares of the Company were issued to the holders of NCRPS.

Keeping in view the aforesaid settlement and the current position of the Company, the management expects a turn-around in the operations of the Company. The net worth of the company has already turned positive during the year under review.

Further, during the financial year 2018-2019, the Promoters and other persons/entities forming part of the Promoter group have infused funds amounting to RS,25.94 Core for strengthening the financial position of the Company, by way of issue of 17000000 Equity Shares on preferential basis.

4. FUTURE OUTLOOK

As a result of policies formulated by the Government of India, the domestic Optical Fiber Cables industry is expected to grow at a good pace. Other sectors like Power and Railways are also expected to grow at a better pace as compared to last year. However, competitive conditions are likely to persist over the medium-term in the cable industry. The Company''s focus in future, shall be to sustain and increase the momentum in its business segments namely, Optical Fibre Cables, Power Cables and Railway Signaling Cables etc. by leveraging its inherent strength of product development as per evolving industrial standards and superior project execution capabilities to drive both the short term and long term growth.

Your Company''s vision for the coming year is to be a key participant in every relevant initiative of the Government so as to improve growth and development prospects of the Company

12. KEY MANAGERIAL PERSONNEL

Mr. Sanjay Agawam, Chairman & CEO, Mr. Sanded Agawam, Managing Director, Mr. Shambhu Kumar Agawam, Chief Financial Officer and Ms. Tanned Sharma, Company Secretary are the Key Managerial Personnel of your Company under the provisions of Section 2(51) and Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There has been no change in the Key Managerial Personnel of the company, during the year under review.

13. DISCLOSURE OF RATIO OF REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL ETC.

As required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014, the details of the ratio of the remuneration of each director to the median employee''s remuneration and such other details as prescribed therein are given in Annexure-A, which is attached hereto and forms a part of the Directors'' Report.

14. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE

During the year, 8 (Eight) Board Meetings and 5 (Five) Audit Committee Meetings were convened and held. The details of these meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

15. AUDITORS

On the basis of the recommendations of the Audit Committee, the Board of Directors of the Company has appointed P. Bholusaria & Co., Chartered Accountants (Firm Registration No.: 000468N) as the statutory auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 23rd Annual General Meeting of the Company, till the conclusion of the 28th Annual General Meeting to be held in the year 2022.

Your Company has received a certificate from M/s. P Bholusaria & Co., Chartered Accountants confirming their eligibility to continue as Auditors of the Company in terms of the provisions of Section 141 of the Companies Act, 2013 and the Rules framed there under

16. AUDITORS REPORT-CLARIFICATIONS AND EXPLANATIONS

There is no qualification, reservation or adverse remark made by the Auditor in his Reports to the Financial

i) In the preparation of the annual accounts for the financial year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departure, if any;

ii) They had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review;

iii) They had 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;

iv) They had prepared the annual accounts for the financial year ended 31st March, 2018 on a ''going concern'' basis;

v) They had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) They had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has formed a policy to carry out performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee, Stakeholders'' /Investor''s Grievance Committee, Risk Management Committee and Share Transfer & Transmission Committee.

11. REMUNERATION POLICY

Based on the recommendations of the Nomination and Remuneration Committee, the Board has approved the Nomination and Remuneration Policy for Directors, KMP and all other employees of the Company. A copy of the Policy is available at the website of the Company.

Note:

1) * The management of Paramount Holdings Limited are taking steps to liquidate the Company in accordance with the applicable laws of the country

2) **AEI Power Cables Limited, United Kingdom has ceased to trade and became dormant i.e. 1st April, 2017. The management of the Company intends to keep the company in existence, for use in foreseeable future, as and when required.

The Consolidated financials include un-audited financials of Paramount Holdings Limited, Cyprus and un-audited financials of AEI Power Cables Ltd., United Kingdom for the year ended 31st March, 2018.

The Company does not have any Joint Venture with any other Company or any Associate Company in India or abroad.

20. MEASURES TAKEN FOR REVIVAL AND REHABILITATION OF THE COMPANY

As stated above in this Report, due to concerted and constant efforts of the promoters to revive and rehabilitate the Company, the Company has been able to settle majority of its creditors - both secured and unsecured. The Company has arrived into a settlement with its unsecured creditors viz. US$ 7.5 Million Outstanding FCCB holders, and the Company has agreed to offer 7921 Equity Shares of the Company for each outstanding Bond.

The liability of repayment to Non-Convertible Redeemable Preference Shares (NCRPS), which were redeemable in the year 2023, was also extinguished during the financial year 2017-2018, by way of fresh issue of Equity Shares of '' 2/each.

The Promoters and other persons/entities forming part of the Promoter group have infused funds amounting to ''25.94 Core in the financial year 2018-2019.

The management is exploring possibilities of new investors in order to invest funds in the Company for modernization, expansion and strengthening the financial position of the Company. The Company has also taken several measures to reduce its cost.

All the aforesaid has resulted in substantial reduction in financial commitments of the Company to a considerable extent, and the remaining debt/financial commitment are within manageable level of the Company. Keeping in view

Statements (both Standalone and Consolidated) for the financial year ended 31st March, 2018.

17. COST AUDITORS

As per Section 148 read with Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, the Board of Directors of the Company has appointed M/s. Jain Sharma & Associates, Cost Accountants as the Cost Auditor of the Company for the FY 2018-19 on the recommendations made by the Audit Committee. The remuneration proposed to be paid to the Cost Auditor, would be ''50,000/- (Rupees Fifty Thousand only) and out of pocket expenses, plus taxes. The remuneration is subject to the ratification of the members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification.

The Company has received a letter from their firm to the effect that their re-appointment would be within the limits prescribed under Section 141 (3)(g) of the Companies Act, 2013 and that they are not disqualified for such reappointment within the meaning of Section 141 of the Companies Act, 2013.

18. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. A.K. Poplin & Co., Practicing Company Secretaries, were appointed as the Secretarial Auditor of the Company for the FY 2017-18 to undertake the Secretarial Audit of the Company. The Secretarial Audit report for FY 2017-18 forms an integral part of this Annual Report as Annexure-B to the Board''s Report.

19. SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES

The Company does not have any Indian subsidiary company. However, the Company has the following direct wholly owned subsidiaries located outside India:

a. *Paramount Holdings Limited, incorporated under the laws of Cyprus;

b. **AEI Power Cables Limited, incorporated under the laws of England and Wales;

c. 06196375 Cables Limited (formerly known as AEI Cables Limited), which was a subsidiary company, is in Administration (as per UK Laws) i.e. 28th February, 2014.

The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 is set out as Annexure-C to this report.

25. LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

The details of the investments made by the Company are given in the notes to the financial statements.

26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee and to the Chairman & CEO and Managing Director of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee and the Board.

27. PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

28. PREVENTION OF SEXUAL HARASSMENT

As part of the legal responsibility and zero tolerance towards sexual harassment at the workplace, a policy for prevention of Sexual Harassment has been adopted by the Company

29. EXTRACT OF ANNUAL RETURN

In accordance with Sections 134(3)(a) and 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies

the aforesaid settlement and the current position of the Company, the management expects a turn-around in the operations of the Company.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as per the requirements of Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, are annexed hereto and forms an integral part of the report.

The Company constantly strives for maintenance and improvement in quality of its products and entire R&D activities are directed to achieve the aforesaid goal.

22. ISO CERTIFICATION

The Company holds ISO 9001:2015 and ISO 14001:2015 certifications for both of its plants at Khushkhera, Rajasthan and Dharuhera, Haryana. In addition to this, the Company is certified by BASEC and LPCB for supply of its products in the European Market.

23. PARTICULARS OF EMPLOYEES

The Company is not required to make any disclosure under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as no employee is covered under the purview of the aforesaid Section/Rule.

24. RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on arm''s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

During the year 2017-2018, pursuant to Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all Related Party Transactions were placed before the Audit Committee and also for the Board approval, wherever required. Prior/omnibus approval of the Audit Committee is generally obtained for the transactions which are of a foreseen and repetitive nature and these transactions are reviewed by the Audit Committee on quarterly basis.

The policy on Related Party Transactions as approved by Board is available at the Company''s website www. paramountcables.com.

The policy ensures that strict confidentiality is maintained while dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. Accordingly, the Board of Directors have formulated a Vigil Mechanism/Whistle Blower Policy which is in compliance with the provisions of Sections 177(9) and 177(10) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy is also available on the website of the Company www.paramountcables.com.

30. RISK MANAGEMENT

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses the risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

As per the requirements of Section 134(3)(n) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has constituted a Risk Management Committee to oversee the risk management efforts in the Company The details of the committee are set out in the Corporate Governance Report forming part of this report.

Some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this report.

31. CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Company believes in Zero Tolerance against bribery, corruption and unethical dealings/ behaviors of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company''s website www.paramountcables.com.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practice and in dealing with shareholders.

All the Board Members and the Senior Management Personnel have confirmed compliance with the Code.

32. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

The provisions are not applicable to the Company. Hence, the Company is not required to make expenditure on CSR, and no CSR committee as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014, has been formulated.

33. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has vigil mechanism policy to deal with instances of fraud and mismanagement, if any

e) During the year under review, there were no cases filed or reported pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013. 2015, a separate section on Corporate Governance along with a certificate from the Auditors on its compliance, forms an integral part of this report. Further, Management Discussion and Analysis which includes detailed review of operations, performance and future outlook of the Company and its businesses forms a part of this report. 34. INSURANCE

All insurable interest of the Company including inventories, buildings and plant & machinery are adequately insured.

35. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company was not required to transfer any amount to the Investor Education and Protection Fund during the year under review.

36. LISTING OF SHARES

The equity shares of the Company are listed at The BSE Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The BSE & NSE have nation-wide trading terminals and therefore provide full liquidity to investors. Equity shares of the Company were also listed with the Calcutta Stock Exchange Ltd, however, the Company has applied for delisting on 03.03.2004 and the application is still pending for disposal at the exchange by the Calcutta Stock Exchange authorities.

37. INDUSTRIAL RELATIONS

Paramount is an equal opportunities employer. The Company do not discriminate on grounds of age, gender, color, race, ethnicity, language, caste, creed, economic or social status or disability. We handle global preferences and mindsets of both internal and external customers.

The Company humbly acknowledges employee''s contributions with best compensation and benefits that appropriately reward performance. Pay revisions and other benefits are designed in such a way to compensate good performance of the employees of the Company and motivate them to do better in future.

During the period under review, your Company enjoyed healthy, cordial and harmonious relationship with workers and employees at all levels.

38. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations,

(Management and Administration) Rules, 2014, the details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-D.

39. GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

c) Neither the Managing Director nor the Whole Time Director of the Company receives any remuneration or commission from any of its subsidiaries.

d) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

40. ACKNOWLEDGEMENT AND APPRECIATION

Your Directors are thankful to the Central and State Government Departments, Organizations and Agencies for the continued guidance and co-operation extended by them.

The Directors wish to place on record their appreciation to all valuable stakeholders viz. customers, shareholders, dealers, vendors, Banks and other business associates for their support. The Directors also acknowledge the unstinted commitment and valued contribution of all employees of the Company.

For and on behalf of the Board

Place: New Delhi (Sanjay Agawam)

Date: 4th August, 2018 Chairman & CEO

Source : Dion Global Solutions Limited
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