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Permanent Magnets

BSE: 504132|NSE: PERMAGNET|ISIN: INE418E01018|SECTOR: Engineering
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Directors Report Year End : Mar '18    Mar 15

To,

The Members,

PERMANENT MAGNETS LIMITED

The Directors have pleasure in presenting the 57th Annual Report of the Company together with the Audited Statements of the Accounts for the year ended 31st March, 2018.

FINANCIAL RESULTS:

(Rs. In Lakhs)

Particulars

31/03/2018

31/03/2017

Sales

9276.60

7193.37

Other Income

44.60

117.20

PBIDT & Extra Ordinary Items

297.81

(159.69)

Interest

165.36

161.50

Depreciation

127.62

140.04

Profit before Exceptional Items & tax

590.79

141.85

Exceptional Items

96.93

-

Profit before Tax

687.72

141.85

Current Tax

140.22

23.29

Deferred Tax

8.68

-

Profit/(Loss) for the year

538.82

118.56

Other Comprehensive Income

2.50

0.09

Total Comprehensive Income for the period (XIII XIV) (Comprising Profit (Loss) and Other Comprehensive Income for the period)

541.32

118.65

1. COMPANY’S PERFORMANCE:

The Sales for the financial year under review increased by appx. 29% as compared to previous year. Profitability also improved due to foreign exchange gain and operational efficiency during the year. The Company’s total Revenue from operation stood at ‘ 9276.60 lakhs and the revenue for previous year was ‘ 7193.37 lakhs. The revenue from operation comprises of export Rs. 5668.67 lakhs. The Company earned Profit before Extra Ordinary Items & tax of Rs. 590.79 lakhs and profit after tax of Rs. 538.82 lakhs as compared to profit of Rs. 118.56 lakhs.

2. DIVIDEND :

In order to conserve the resources of the Company, the Board of Directors are not recommending any dividend for the Financial Year.

3. CHANGE IN THE NATURE OF THE BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8 of the Companies (Accounts) Rules, 2014.

4. TRANSFER TO RESERVE:

The Company has not transferred any amount to reserves in the current financial year.

5. DEPOSITS:

The company has not accepted any deposits from the public during the year pursuant to the provisions of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 or under Chapter V of the Companies Act, 2013 (the Act).

6. LISTING:

The shares of the Company are listed on “BSE Limited” at Mumbai. The Company has paid the applicable listing fees to the Stock Exchange till date.

7. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Act confirming that they meet the criteria of Independence under section 149 (6) of the Act and Regulation 16 (1) (b) of SEBI LODR Regulations.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with the provisions of the Act and Articles of Association of the Company, Smt. Sunaina Taparia, non-executive director retires by rotation and being eligible offers herself for reappointment.

The Board of Directors comprises of five directors of which two are Independent. Shri. Rajeev Mundra, Independent and Non Executive Director appointed as a Chairman of the Company.

Shri. Arun Binani, Independent Director of the Company has expressed his unwillingness to continue with the position and ceased to be associated with the Company w.e.f November 30, 2017. The Board places on record its sincere appreciation for the services rendered by Shri. Arun Binani during his tenure as an Independent Director of the Company.

On the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on December 26, 2017 has appointed Shri. Kamal Binani as an Additional Director (Non-executive, Independent) of the Company, subject to approval of the members at this Annual General Meeting.

Shri. Sukhmal Jain, Senior Vice President Finance acts as the CFO and Smt. Rachana Rane act as a Company Secretary of the Company.

9. DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Act :

a) that in the preparation of the annual financial statements 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) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made 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) that proper and sufficient care has been taken 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;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

10. CORPORATE GOVERNANCE:

In terms of Regulation 27(2) read with Regulation 15(2) of Chapter IV of Listing Regulations, compliance with the provisions of clauses relating to corporate governance is not mandatory, for the time being, in respect of the companies having paid up equity share capital not exceeding Rs. 10 Crore and net worth not exceeding Rs. 25 Crore, as on the last day of the previous financial year. As our Company fits in these criteria, it is not required to provide details on corporate governance.

11. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

Since the Company has no subsidiaries, Joint Ventures or associate companies provisions of section 129(3) of the Companies Act, 2013 is not applicable. As the Company do not have any subsidiaries, associates or joint venture companies as per the Companies Act, 2013, no report on the performance of such Companies is provided.

12. AUDITORS:

12.1 STATUTORY AUDITORS

M/s Ramanand & Associates, Chartered Accountants (Firm Registration No. 117776W) are the statutory auditors of the Company for the year ended March 31, 2018. Their appointment as the statutory auditors will be ratified at the ensuing Annual General Meeting pursuant to the provisions of Section 139 of the Companies Act, 2013 and Rules made thereunder.

There is no audit qualification, reservation or adverse remark for the year under review.

12.2 SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Arun Dash & Associates, a firm of Company Secretaries in Practice (C.P.No. 9309) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as “Annexure-B” and forms an integral part of this Report.

The observations made in the Secretarial Audit Report are self-explanatory.

12.3 INTERNAL AUDITORS

M/S. G S Nayak & Co., Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

13. EXPLANATION ON AUDITOR’S COMMENT

The Board have to state as under with reference to the Auditor’s certain remarks as contained in the annexure to the Auditor’s Report:

a) With reference to para VII(a) of the Annexure - B to the Auditor’s Report the TDS i.e ‘ 8.63 lakhs pertaining to late filing fees & interest which are lying with the Income Tax Authorities and With reference to para VII(c) the matter is being looked into and shall soon be appropriately dealt with.

b) With reference to para VIII of the Annexure - B to the Auditor’s Report, the Central Excise Loan interest has remained unpaid as the matter is pending for the cause of implementing agency claiming compound interest on an interest free excise loan under a scheme of incentives. Matter with relevant agencies will be sorted out in due course of time. No material liability is expected in this regard. During the year Principal amount of central excise loan taken from ICICI Bank has been repaid in full.

14. MANAGEMENT DISCUSSION AND ANALYSIS.

The Management Discussion and Analysis are annexed and forms an integral part of this report.

15. PARTICULARS OF EMPLOYEES:

There are no employees covered by provision contained in Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended. As per latest amendment, name of top ten employees in terms of remuneration drawn is 1. Girish Mahajan 2. P A Kamath 3. Sukhmal Jain 4. Hemant Kore 5. Allen D’cunha 6. Sunil Verma 7. Raghav Garg 8. Deepali Rane 9. Priti Kulkarni 10. Dinesh Kadam

The information required under Section 197 of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in “Annexure D” which is part of this report.

16. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS

Honorable Bombay High Court has given interim stay order against the winding up order passed (against the Company) dated 15/04/2015. This was a lawsuit filed by a Freight Forwarder of the company who was deficient in services to the company. Company has deposited Rs. 19,05,179/- including interest as per direction of Honourable Bombay High Court. The Appeal shall be added to appropriate board for hearing. But the same is not yet listed on the Board of High Court.

17. CONSERVATION OF ENERGY, TECHNOLOGY DEVELOPMENT AND ABSORPTION:

The Conservation of Energy, R & D activity in the Company is mainly carried out by the key line manufacturing and technical personnel in alliance with the key technical sales personnel and outsourced consultants. “Annexure A” attached hereto provides the information required to be disclosed on the efforts made on Conservation of Energy, Technology Development and Absorption as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

18. CORPORATE SOCIAL RESPONSIBILITY

As contemplated under section 135 of the Companies Act, 2013 and rules framed thereunder along with revised schedule VII of the Act, the Company being covered under the provision of the said section in FY 17-18 and has taken necessary initial steps in this regard. The CSR policy is posted on the Company’s website - www.pmlindia.com.

A committee of the directors titled Corporate Social Responsibility (CSR) Committee has been formed by the directors consisting, Shri. Rajeev Mundra, as a Chairman, Shri. Sharad Taparia and Shri. Mukul Taparia as members.

19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Vigil Mechanism Policy for directors and employees to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The said policy is posted on the Company’s website - www.pmlindia.com.

20. RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on arms’ length basis.

During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material. Members may refer to Note 8 of Notes to Account of the standalone financial statement which sets out related party disclosures.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules, 2014 are given in “Annexure E” in Form AOC-2 which is part of this report.

21. FOREIGN EXCHANGE EARNING AND OUTGO:

Please refer to paragraph No. 14 of Notes to accounts for the foreign exchange outgo and earnings of the Company which is required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

22. PARTICULARS OF LOANS GIVEN, GUARANTEES AND INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.

23. MEETINGS, COMPOSITION OF THE BOARD AND COMMITTEES:

The Board of Directors of the Company met five times during the year on 29th May, 2017; 14th August, 2017 ; 4th September, 2017; 30th November, 2017, 26th December, 2017 and 13th February, 2018.

Board of Directors Composition:

The composition is as under:

Name of the Director

Category

*Member of the Board of Other Companies

No. of other Committee Memberships held #

As Chairman

As Member

Shri. Sharad Taparia

Managing Director

-

-

-

Shri. Rajeev Mundra

Independent and Non Executive Director

2

-

1

Shri. Kamal Binani

Additional Director (Independent and Non Executive Director)

4

-

-

Shri. Mukul Taparia

Non Executive Director

1

-

-

Smt. Sunaina Taparia

Non Executive Director

-

-

-

*The above excludes Foreign Companies, Private Companies and alternate Directorships

# Only Audit Committee, Remuneration Committee and Shareholders Grievance Committee are reckoned for the purpose. The details of the meetings attended by the Board during the year are given below.

Date of Board Meetings

Arun Binani

Sharad Taparia

Rajeev Mundra

Kamal Binan

Mukul Taparia

Sunaina Taparia

29th May, 2017

V

V

V

NA

-

V

14th August, 2017

V

V

V

NA

V

-

4th September, 2017

V

V

V

NA

V

-

30th November, 2017

V

V

V

NA

-

V

26th December, 2017

NA

V

V

NA

V

V

13th February, 2018

NA

V

V

V

V

-

The time gap between any two meetings did not exceed one hundred and twenty days.

AUDIT COMMITTEE

Audit Committee of the Board of Directors (“the Audit Committee”) is entrusted with the responsibility to supervise the Company’s internal controls and financial reporting process. The composition, quorum, powers, role and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the Listing Regulations.

Constitution

During the year under review, the committee consisted of Three directors viz. Shri. Rajeev Mundra, Chairman, Shri. Kamal Binani and Shri. Sharad Taparia .

Composition, names of members and chairman

Sr. No.

Members

Category

1.

Shri. Rajeev Mundra , Chairman

Independent Non Executive Director

2.

Shri. Sharad Taparia, Member

Managing Director

3.

Shri. Kamal Binani, Member

Additional Director (Independent Non Executive Director)

* Smt. Rachana Rane, Company Secretary acts as the Secretary of the Committee.

Audit Committee Meetings during the year and attendance -

Date of the Meeting

Attendance of Directors for Meetings held during the year 2017-2018

Shri. Rajeev Mundra

Shri. Sharad Taparia

Shri. Arun Binani

Shri. Kamal Binani

29th May, 2017

V

V

V

NA

14th August, 2017

V

V

V

NA

4th September, 2017

V

V

V

NA

30th November, 2017

V

V

V

NA

13th February, 2018

V

V

NA

V

The Audit Committee inter alia performs the functions of approving Annual Internal Audit Plan, review of financial reporting system, internal controls system, discussion on financial results, interaction with Statutory and Internal Auditors, one-on-one Meeting with Statutory and Internal Auditors, recommendation for the appointment of Statutory Auditors and their remuneration, recommendation for the appointment and remuneration of Internal Auditors, Review of Forex policy, Management Discussions and Analysis, Review of Internal Audit Reports and significant related party transactions.

The Board has framed the Audit Committee Charter for the purpose of effective compliance of provisions of section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations. In fulfilling the above role, the Audit Committee has powers to investigate any activity within its terms of reference, to seek information from employees and to obtain outside legal and professional advice.

The Audit Committee, while reviewing the Annual Financial Statements also reviews the applicability of various Indian Accounting Standards (IND-AS) referred to in Section 133 of the Companies Act, 2013. Compliance of the Accounting Standards as applicable to the Company has been ensured in the preparation of the Financial Statements for the year ended March 31, 2018.

The Audit Committee also oversees and reviews the functioning of a vigil mechanism (implemented in the Company as a Whistle Blower Policy) and reviews the findings of investigation into cases of material nature and the actions taken in respect thereof.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

The Nomination And Remuneration Committee comprises of Three Directors. The Nomination And Remuneration Committee include Shri. Rajeev Mundra, Independent Director, Shri. Kamal Binani, Additional Director (Independent, Non-Executive) w.e.f 26th December, 2017 and Shri. Mukul Taparia, Non-Executive Director. The Composition of Nomination And Remuneration Committee is in accordance with the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations.

During the year, the committee met once, 26th December, 2017 the meeting was attended by all members.

The Committee was mandated with the following terms of reference:

- Reviewing the overall compensation policy and other employment conditions of Managing Director(s) and Senior Management.

- To help in determining the appropriate size, diversity and composition of the Board;

- To recommend to the Board appointment/re-appointment and removal of Directors;

- To frame criteria for determining qualifications, positive attributes and independence of Directors;

After Resignation of Shri. Arun Binani, the Nomination And Remuneration Committee recommend to Shri. Kamal Binani in his place. The NRC policy is posted on the Company’s website - www.pmlindia.com.

The company does not have any stock option scheme.

STAKEHOLDER RELATIONSHIP COMMITTEE

The Committee comprises of two Independent Directors and one non executive director. The Stakeholders Relationship Committee comprises of three Directors. Shri. Rajeev Mundra, Independent Director is the Chairman of this Committee. Other members of Committee consist of Shri. Mukul Taparia, Non Executive Director and Shri. Kamal Binani, Additional Director (Independent, Non Executive).

Smt. Rachana Rane, is the compliance officer for this purpose.

The committee meeting was held on 13th February, 2018 and was attended by all three members.

The Committee looks into the matters of Shareholders/ Investors grievances along with approval of transfer of shares and issue of duplicate / split /consolidation /sub-division of share certificates.During the year the Company received NIL complaints. The Secretarial Department of the Company and the Registrar and Share Transfer Agent, Adroit Corporate Services Private Limited attend to all grievances of the shareholders received directly or through SEBI, Stock Exchanges, Ministry of Corporate

Affairs, Registrar of Companies, etc. The Minutes of the Stakeholders Relationship Committee Meetings are circulated to the Board and noted by the Board of Directors at the Board Meeting. The committee also reviews the feedback from the investors and approves initiatives for further improvements in investor servicing. The Committee also ensures the expeditious share transfers.

24. ANTI SEXUAL HARASSMENT POLICY

The Company has in place a policy on Anti Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Work place (Prevention, Prohibition & Redressal) Act, 2013. During the year under review, no complaints were reported to the Board.

25. EXTRACT OF ANNUAL RETURN

An extract of Annual Return in the prescribed Form No. MGT 9 as referred to in section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as “Annexure C”.

26. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

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

27. SHARE CAPITAL

The Paid-up Capital of the Company is ‘ 8,59,84,530/- and Authorised Capital of the Company is Rs. 16,00,00,000/-.

28. COST RECORDS AND AUDIT

Under the Section 148 of the Act the Central Government has prescribed maintenance and audit of cost records vide the Companies (Cost Records and Audit) Rules, 2014 to such class of companies as mentioned in the Table appended to Rule 3 of the said Rules. Cost audit provisions are not applicable to the Company as of now.

29. EQUITY SHARES IN THE SUSPENSE ACCOUNT

In accordance with the requirement of Regulation 34 (3) and Schedule V Part F of Listing Regulations, 2015 the Company reports the following details in respect of equity shares lying in the suspense account which were issued in dematerialised form pursuant to the public issue of the Company: NA

30. PERFORMANCE EVALUATION :

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the Listing Regulations, the Board has carried out the annual evaluation of its own performance, its Committees and Directors individually. Evaluation parameters of individual directors including the Chairman of the Board and Independent Directors were based on knowledge to perform the role, time and level of participation, performance of duties and level of oversight. The performance evaluation of the Chairman and Managing Director and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

31. APPRECIATION:

Your Directors wish to thank all the shareholders, bankers and clients for lending their support in various activities of the Company. Your Directors would like to place on record their appreciation to all the employees who have continued their support during the year.

Date: 13th August, 2018 FOR AND ON BEHALF OF THE BOARD,

Place: Mumbai.

Corporate Office: Sd/- Sd/-

B-3,MIDC Industrial Area,

Village Mira, Mira Road-401104 Sharad TaParia Mukul Taparia

Dist. Thane. Managing Director Director

Source : Dion Global Solutions Limited
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