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Punjab Chemicals & Crop Protection Directors Report, Punjab Chemical Reports by Directors
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Punjab Chemicals & Crop Protection

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Directors Report Year End : Mar '18    Mar 16

TO THE MEMBERS,

1. The Directors are pleased to present the 42nd Annual Report of the business and operations alongwith the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended on March 31, 2018.

2. FINANCIAL RESULTS:

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

(Rs. In lac)

Particulars

Consolidated*

Standalone

2017-18

2016-17

2017-18

2016-17

Revenue from Operations and Other Income

50692

54858

50219

45215

Earnings before Interest, Depreciation & Tax & Exceptional item (EBIDTA)

5262

2754

4567

3468

Depreciation/Amortisation

1394

1606

1394

1431

Finance Cost

1768

3068

1751

2174

Profit / (Loss) before Tax & Exceptional item

2100

(1920)

1422

(137)

Exceptional (Expenses) / Income

326

-

326

-

Profit / (Loss) before Tax (PBT)

2426

(1920)

1748

(137)

Income Tax Expenses:

Current Tax

297

-

297

-

Adjustment of tax pertaining to earlier periods

(51)

-

(51)

-

Deferred Tax

462

73

462

73

Total Income Tax Expenses

708

73

708

73

Profit / (Loss) after Tax (PAT)

1718

(1993)

1040

(210)

Other Comprehensive income / expense not to be reclassified to

(336)

373

(14)

13

profit or loss in subsequent period

Total comprehensive income for the period

1382

(1620)

1026

(197)

Earning per share (EPS)

Basic and diluted (in Rs.) (not annualized)

14.01

(16.25)

8.48

(1.71)

Notes:

a) *Consolidated accounts consist of standalone and overseas subsidiary Companies.

b) Figures for the previous period have been regrouped to the extent necessary.

3. ADOPTION OF IND-AS:

The Company adopted Indian Accounting Standards (Ind-AS) from 01 April, 2017 with the transition date of 01 April 2016 and accordingly these financial results have been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard (Ind-AS) 34-Interim Financial Reporting and other accounting principles generally accepted in India. Consequently, erstwhile Indian Generally Accepted Accounting Principles (IGAAP) results for the year ended 31 March 2017 has been restated to make them comparable. Reconciliation of net profit and equity as reported under erstwhile IGAAP and as restated now under Ind-AS is as under:

Standalone: (Rs. in lac)

Particulars

Equity

Net Profit

As at

Quarter ended

Year ended

31-Mar

31-Mar

31-Mar

(Audited)

(Audited)

(Audited)

2017

2017

2017

Net profit / (loss) as reported under erstwhile IGAAP

5,665

(402)

213

a) Actuarial gain on defined benefit plans reclassified to Other Comprehensive Income

-

13

(8)

b) Finance cost adjustment on account of Fair valuation of borrowings

532

(89)

(367)

c) Fair value of investments

(136)

-

-

d) Others

169

25

25

e) Tax*

957

150

(73)

Net Profit / (loss) now reported under Ind-AS

7,187

(303)

(210)

* Includes tax effect of above mentioned items and adjustment for reassessment of probability of realization of unrecognized deferred tax asset

Consolidated: (Rs. in lac)

Particulars

Equity

Net Profit

As at

Year ended

31-Mar

31-Mar

(Audited)

(Audited)

2017

2017

Net profit / (loss) as reported under erstwhile IGAAP

4,178

(1570)

a) Actuarial gain on defined benefit plans reclassified to Other Comprehensive Income

-

(8)

b) Finance cost adjustment on account of Fair valuation of borrowings

532

(367)

c) Fair value of investments

107

-

d) Others

65

25

e) Tax*

957

(73)

Net Profit / (loss) now reported under Ind-AS

5,839

(1993)

* Includes tax effect of above mentioned items and adjustment for reassessment of probability of realization of unrecognized deferred tax asset

4. STANDALONE RESULTS:

The Directors are happy to share that the revival steps taken by the Company’s Management have yielded results. It is satisfying that accumulated losses of the earlier years have been recouped in the year under review. The performance of all the divisions have improved and accordingly, on standalone basis, the Revenue from Operations increased to Rs. 502 crore and Profit before Tax increased to Rs. 17.48 crore against the revenue of Rs. 452 crore and loss of Rs. 1.37 crore in the previous year as per Ind AS.

The Agrochemicals Division Derabassi, which contributes almost 75% of the revenue, continues to strengthen its activities by adding new products and taking cost effective measures, wherever possible. Its revenue has increased by 22% from the revenue of previous year. The operations of the Specialty and Other Chemicals Division, Lalru and Industrial Chemical Division, Pune have also shown improved results compared to the previous year. There has been a substantial increase in the job work income, contributing to better results.

5. OVERSEAS SUBSIDIARY COMPANY RESULTS:

The Company adopted the strategy to divest its nonperforming assets and non-profitable businesses. The results of Sintesis Quimica were affecting the consolidated results of the Company, therefore, as approved by the members, the entire shareholding in the Company was sold by the overseas wholly owned subsidiaries of the Company vide Agreement dated 28th September 2017 to an unrelated party. Sintesis Quimica is therefore no longer a step-down subsidiary of the Company. The Financial Results up to the date of agreement were not available due to administrative reasons, therefore, the same could not be consolidated with the accounts of the year under review. However, the losses of investment and other related expenses have been taken into the books of account.

On 31st March, 2018, the Company had two overseas subsidiaries namely - SD AgChem (Europe) NV and STS Chemicals (UK) Ltd. During the year under review, the operational results were as follows:

(i) SD Agchem (Europe) NV:

The total income was Rs. 16.14 crore with net profit of Rs. 3.70 crore, compared to the Income of Rs. 5.66 crore and Profit of Rs. 1.29 crore in the previous year.

(ii) STS Chemicals (UK) Limited (STS):

There was no commercial activity in the Company. Therefore, there was a loss of Rs. 1 lac against loss of Rs. 24 lac during the previous year. The Company has taken steps to dissolve this Company because there was no business activity and also no further plans for doing business in this Company. The required approval of dissolution from the concerned authorities has been received.

In compliance with Section 129 of the Act, a statement containing requisite details including financial highlights of the operation of all the subsidiaries in Form AOC-1 is annexed to the report as Annexure 1.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of the subsidiaries are available on the website of the Company www.punjabchemicals.com. These documents will also be available for inspection during business hours at the Registered Office of the Company.

The Policy for determining material subsidiaries, adopted by the Board of Directors, pursuant to Regulation 16 of the SEBI (LODR) Regulations, 2015 (hereinafter called as “Listing Regulations”) can be accessed on the Company’s website www.punjabchemicals.com.

6. CONSOLIDATED RESULTS:

Your Company has prepared the Consolidated Financial Statements in accordance with Section 133 of the Companies Act 2013 read with Indian Accounting Standard IND AS 27 (Consolidated and Separate Financial Statements), IND AS 28 -(Accounting for Investments in Associates in Consolidated Financial Statements) and IND AS 31 (Financial Reporting of Interest in Joint Ventures) notified by the Companies (Accounts) Rules, 2014 and Companies (Accounting Standard) Amendment Rules 2016 except Sintesis Quimica, Argentina which was sold on 28th September, 2017 and the results upto the said period were not available as not shared by the buyer.

The audited consolidated financial statements of other subsidiary Companies together with Auditors’ Report form part of the Annual Report.

The consolidated accounts during the period under review show that the total revenue of Rs. 507 crore with a net profit before tax of Rs. 24 crore against the total income of Rs. 549 crore and net loss of Rs. 19.20 crore (including Sintesis Quimica) in the previous year.

7. RESERVES:

Your Directors do not propose to transfer any amount to the general reserve and entire amount of profit for the year forms part of the ‘Retained Earnings’.

8. DIVIDEND:

Your Directors after due consideration regret their inability to recommend any dividend for the financial year under review in view of the commitment towards Banks for alignment of debts.

9. KEY DEVELOPMENTS:

Prepayment of outstanding debts of the lenders:

As informed in the last Annual Report, the Company had entered into One Time Settlement with the Central Bank of India for the outstanding dues. The necessary adjustments in the books of account have been carried out after the payment of entire OTS amount in the accounts of the financial year under review. Union Bank of India, EXIM Bank and Allahabad Bank have accepted the proposal for prepayment of debts of the Company. The Company is in the process of completing all formalities in this regard.

Change of the Registered office:

As approved by the Members of the Company and other Regulatory Authorities, Registered Office of the Company was shifted from the Union Territory of Chandigarh to the State of Punjab at Milestone 18, Ambala Kalka Road, Village & P.O Bhankharpur, Derabassi, Distt. SAS Nagar, Mohali (Punjab)- 140201, India. The required information has been placed on the website of the Company, National Stock Exchange of India Limited and BSE Limited.

Re-Classification of Excel Industries Limited from Promoter Group to Public Category:

The shareholders of the Company, on February 2, 2018 by means of special resolution passed through Postal Ballot, have given their approval for reclassification of Excel Industries Limited from Promoter Group to Public Category, as they were neither involved in the management nor holding any controlling stake in the Company. BSE and NSE have given approval for the re-classification of Promoter under Regulation 31A of SEBI (LODR) Regulations, 2015.

Presently, Shri Shalil Shashikumar Shroff along with his family and relatives collectively as “Shalil Shroff group” are the only Promoters of the Company.

10. STATE OF AFFAIRS OF THE COMPANY:

The State of Affairs of the Company is presented as part of Management Discussion and Analysis Report forming part of this Report.

11. OUTLOOK:

The main business of your Company is manufacturing Performance chemicals which includes Agro Chemicals and other specialty chemicals. We are present in both domestic and export markets. The Company has also an arrangement with few multinational Companies for contract manufacturing and sale of its products.

In view of the scenario described in the management discussions your Company is expected to grow with wide range of products and manufacturing expertise barring unforeseen circumstances.

12. FINANCE:

As stated in the Annual Report of last year, the Management has taken various steps to improve the liquidity position of the Company. The steps viz. sale of non performing assets and non profitable business, taking up toll manufacturing in a large scale and tie up with major customers to minimise the credit period have helped in running the business.

During the year the Company has not raised any additional borrowings except a few Inter Corporate Deposits for meeting part of the working capital requirements and taken few assets on lease.

13. PUBLIC DEPOSITS:

Your Company had not accepted any Public Deposits under Chapter V of the Companies Act, 2013.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Changes in the composition of the Board of Directors:

Smt. Sindhu Seth (DIN: 00109298), a Non-Executive Non Independent Director resigned from the Board due to personal reasons and the same was accepted by the Board of Directors in their meeting held on 29th May, 2018. The Board has expressed its gratitude and placed on record its appreciation for her contribution as a Director.

The Nomination and Remuneration Committee in its meeting held on 29th May, 2018 assessed the profile of Smt. Aruna R. Bhinge, Company Director, Consultant and Coach and recommended her appointment as Non Executive Non Independent Woman Director, liable to retire by rotation, to the Board of Directors of the Company. Pursuant to Section 161(1) read with section 149 of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Aruna R. Bhinge (DIN: 07474950) was appointed as an Additional Director designated as Woman Director w.e.f. 29th May, 2018 by the Board of the Company, who shall hold office up to the date of the ensuing Annual General Meeting. In terms of Section 160 of the Act, the Company has received a notice in writing from a Member signifying her intention to propose the candidature of Smt. Aruna R. Bhinge for the office of a Director.

b) Independent Directors:

As required under the Companies Act, 2013, the Company has three Independent Directors on the Board of the Company namely Shri Mukesh Dahyabhai Patel (DIN:00009605), Shri Vijay Dilbagh Rai (DIN:00075837) and Shri Sheo Prasad Singh (DIN: 06493455).

The Independent Directors have given the required undertaking for compliance of the criteria of independence laid down in Section 149 (7) of the Companies Act, 2013. The same has been received and placed before the Board in its meeting held on 29th May, 2018.

c) Retirement by rotation:

In terms of Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company, Shri Shivshankar Shripal Tiwari (DIN: 00019058), Director of the Company retires by rotation at the forthcoming Annual General Meeting. He being eligible, has offered himself for re-appointment. The Board of Directors has recommended his reappointment as Director of the Company, liable to retire by rotation.

d) Re-appointment of Managing Director and Whole Time Director:

The shareholders of the Company, on February 2, 2018 by means of special resolution passed through Postal Ballot, have given their approval for:

1. Re-appointment of Shri Avtar Singh (DIN: 00063569) as the Whole Time Director of the Company for a period of three (3) years from 14.11.2017 to 13.11.2020 on the terms and conditions including remuneration for the mentioned period.

2. Re-appointment of Shri Shalil Shashikumar Shroff (DIN: 00015621) as the Managing Director of the Company for a period of three (3) years from 15.01.2018 to 14.01.2021 on the terms and conditions including remuneration for the mentioned period.

e) The Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them to attend meetings of the Company.

Details and brief resume of the Directors seeking re-appointment/appointmentas required by Regulation 26 (4) and 36 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) and as required under Secretarial Standards - 2 on General Meetings issued by The Institute of Company Secretaries of India are, are furnished in the Notice convening the Annual General Meeting forming part of the Annual Report.

Other details of the Directors have been given in the Corporate Governance Report attached to this Report.

f) Committees of the Board:

The Company’s Board has constituted the required Committees prescribed under the Companies Act and the Listing Regulations.

The details of Composition of the Committees and Attendance of the Committee Members in the meetings is given in the Corporate Governance Report forming part of this Annual Report.

g) Key Managerial Personnel (‘KMP’)

In terms of the provisions of Section 2(51) and Section 203 of the Act, the Board of Directors has nominated following as KMP of the Company:

- Mr. Shalil Shashikumar Shroff, Managing Director

- Mr. Avtar Singh, Executive Director

- Mr. Vipul Joshi, Chief Financial Officer

- Mr. Punit K Abrol, Sr. V.P. (Finance) & Company Secretary

- Mr. Jain Parkash, Sr. V.P. (Works)

15. LISTING WITH STOCK EXCHANGES:

The Company’s shares continue to be listed at the National Stock Exchange of India Limited and BSE Limited. The Annual Listing fee for the fiscal year 2017-18 has been paid to these Exchanges.

16. ENVIRONMENT AND POLLUTION CONTROL:

The effluent and emissions generated from the plants are regularly monitored and treated. The Company has an Effluent Treatment Plant with incinerator to treat the waste materials. In addition to this, the Company has also tied up with Common Effluent Treatment Plants set up in the nearby areas of the manufacturing sites. The Company commits for the clean and healthy environment in and around of its manufacturing sites.

17. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY:

i) Welfare Activities:

The Company through SDS Memorial Trust has taken up various social works for the betterment of the society.

The Company continues to organize a ‘Blood Donation Camp’ in the memory of Late Shri S.D. Shroff on 18th December every year. Around 92 employees donated blood this year.

ii) Corporate Social Responsibility:

Company’s Corporate Social Responsibility (CSR) Policy has been posted on the website at www.punjabchemicals.com in compliance with the disclosure about CSR Policy Rules, 2014.

During the year under review, the Company was to spend Rs. 38.06 lac based on the average net profit of the last three years on various activities for social welfare. Accordingly, the amount was spent on activities like upgradation of infrastructure of schools, preventive healthcare by way of medical camps in villages including eye operations, providing sanitation and drinking water facilities to neighboring institutions.

The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 has been attached as Annexure 2.

For other details regarding the CSR Committee, please refer to Corporate Governance Report, which forms part of this Report.

18. RESEARCH & DEVELOPMENT AND QUALITY CONTROL:

The activities of R&D consists of improvement in the processes of existing products, decrease of effluent load and to develop new products and by-products.

The Quality Control is the strength of the Company. All raw materials and finished products pass through stringent quality checks for better results.

19. INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

The Company has also taken Directors and Officers Liability insurance policy.

20. EMPLOYEES AND INDUSTRIAL RELATIONS:

The relation between the management and employees are healthy and cordial. There is a transparency in the dealings. The Welfare Schemes viz. preventive health check up, medical facilities in the campus, Co-operative stores, etc.are used extensively by the employees. Sports activities keep the employees fit and healthy.

The Board of Directors placed on record their appreciation for the sincere efforts and commitment of the employees. Their faith and confidence in the working are largely responsible for bringing turnaround in the Company. Their sense of belongingness is noteworthy and appreciated.

21. REGISTRAR AND SHARE TRANSFER AGENT:

M/s Alankit Assignments Ltd., Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

22. EXTRACT OF THE ANNUAL RETURN:

The information required under Section 134 (3) (a) of the Companies Act, 2013 (the Act) read together with Section 92 (3) of the Act regarding extract of the Annual Return is appended hereto as Annexure 3 and forms part of this Report.

23. NUMBER OF MEETINGS OF THE BOARD:

The Board met five (5) times during the Financial Year 2017-18, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

24. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of Executive and Independent directors to maintain the independence of the Board and separate its function of governance and management. As on March 31, 2018, the Board consists of 8 Members, 2 of whom are Executive Directors, 2 Non Executive Non Independent Directors, 3 Independent Directors and 1 Woman Director. The Board periodically evaluates the need for change in its composition and size.

The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel. The same is appended as Annexure 4 and can be assessed at www.punjabchemicals.com.

25. AUDITORS’ REPORTS:

a. Statutory Auditor Report:

The Auditors Report on Standalone Financial Statements does not contain any qualification, reservation or adverse remarks.

However, the Statutory Auditors have “Disclaimer of Opinion” in the Auditor’s Report of Consolidated Financial Statements as follows:

“We draw attention to note 4 of the annual consolidated financial statements which explains that after completion of necessary legal formalities in India and Argentina, the Holding company has during the current year sold its entire stake in a overseas step down subsidiary to a unrelated third party on 28th September, 2017. The Holding Company is unable to obtain the relevant financial information relating to the period till the date of disposal from Sintesis Quimica and consequently, it is not in a position to consolidate in accordance with Indian Accounting Standard “Consolidated Financial Statement.”

In addition, as explained in note (i), the group has transitioned to Ind AS in the current year. It has except for the Ind AS adjustments as may be related to the aforesaid subsidiary, adjusted the comparative financial information for the differences in the accounting principles adopted by the Group on transition to the Ind AS, which have been audited by us.

On the basis of above, we were unable to determine whether any adjustments are necessary, in relation to the aforesaid subsidiary in the annual consolidated financial results for the year ended 31 March 2018, comparative period ended 31 March 2017 and as on the transition date of 1 April 2016.

Consequentially other relevant assertions in the Audit Report on the Consolidated Financial Statements and report on adequacy of the internal financial controls with reference to those consolidated financial statements have been also modified.”

The Board after consideration has given the following explanations and comment on the ‘Disclaimer of Opinion’:

“Since Sintesis Quimica (SQ) has been sold, we have not been able to get financial information for the period upto the date of disposal. Hence, we have not been able to consolidate SQ for the partial period in accordance with Indian Accounting Standard 110-”Consolidated Financial Statements.” It may be noted that the modification has no impact on consolidated net profit and other comprehensive income for the year ended 31st March, 2018.”

b. Secretarial Audit Report:

The Secretarial Audit Report for the financial year 2017-18 is annexed to this Report as Annexure 5 and forms part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

26. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Particulars relating to loans and guarantees or investments under section 186 of the Companies Act, 2013 are provided in the Note 6 to the standalone financial statement.

27. RELATED PARTY TRANSACTIONS:

There are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of repetitive nature. The transactions entered into pursuant to the omnibus and specific approval are reviewed periodically by the Audit Committee. As required under SEBI (LODR), detailed related party disclosures as per Accounting Standards, please refer Note 43 of the Standalone and Consolidated Financial statements.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at www.punjabchemicals.com.

None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.

Form AOC-2 pursuant to clause (h) of sub-section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure 6 and forms part of this Report.

28. MATERIAL CHANGES AND COMMITMENTS, IF ANY:

No material changes and commitments have occurred between the end of the financial year and the date of the Report which has effect on the Financial Statements.

29. PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as 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 7 and forms part of this Report.

30. RISK MANAGEMENT:

Pursuant to Schedule V of SEBI (LODR) Regulation, 2015, the Company has voluntarily constituted a Risk Assessment Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board’s Report.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has formulated Risk Management Policy which is posted at the website of the Company at www.punjabchemicals.com.

The Audit Committee also oversee the area of financial risks and controls.

31. BOARD EVALUATION:

The Board has carried out an annual performance evaluation of the directors individually, of the Chairman and of the Board as a whole, pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015,. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

32. DETAILS OF FAMILIARIZATION PROGRAMME:

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are posted on the website of the Company at www.punjabchemicals.com.

33. PARTICULARS OF EMPLOYEES:

The employees of the Company contributed significantly in achieving the results. In terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures pertaining to remuneration and other details of the concerned employees is annexed as Annexure 8.

34. WHISTLE BLOWER POLICY:

Regulation 22 of the Listing Regulations & Sub-section (9 & 10) of Section 177 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, interalia, provides, for all listed companies to establish a vigil mechanism called “Whistle Blower Policy” for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.

As a conscious and vigilant organization, the Company believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In its endeavour to provide its employee a secure and a fearless working environment, the Company has established the “Whistle Blower Policy”.

The Whistle Blower policy and establishment of Vigil Mechanism have been appropriately communicated within the Company. The Whistle Blower Policy is also posted on the website of the Company. The purpose of the policy is to create a fearless environment for the directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or Ethics Policy. It protects directors and employees wishing to raise a concern about serious irregularities within the Company.

During the year, the Company has not received any complaint under Vigil Mechanism / Whistle Blower Policy.

35. INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

The Company has appointed Internal Auditor to periodically audit and report of any deviation in depicting in the implementation of control. The management takes immediate corrective actions, if required.

36. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company is committed in creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in anatmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment had been rolled out and Internal Complaints Committee as per legal guidelines had been set up. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair inquiry process with clear time lines. The Policy on Prevention of Sexual Harassment is also posted on the website of the Company.

During the year ended 31st March, 2018, no complaints pertaining to sexual harassment was received by the Company.

37. CEO/CFO CERTIFICATION:

In terms of the Listing Regulations., the Certificate duly signed by Shri Shalil Shashikumar Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on March 31, 2018, at its meeting held on May 29, 2018. The said Certificate is also annexed to the Corporate Governance Report.

38. AUDITORS:

a) STATUTORY AUDITORS:

M/s. B S R & Co. LLP, Chartered Accountants, Mumbai (Firm Registration No. 101248W/W-100022), Statutory Auditors of the Company were appointed as Auditors of the Company, for a term of 5 (five) consecutive years, at the Annual General Meeting held on September 14, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company The requirement to place the matter relating to appointment of 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, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting held on September 14, 2017.

b) SECRETARIAL AUDITORS:

The Board upon recommendation of the Audit Committee has reappointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934), as the Secretarial Auditor of the Company for the financial year 2018-19, in terms of Section 204 of the Companies Act, 2013 and Rules thereunder.

c) COST AUDITORS:

The Board of Directors upon recommendation of the Audit Committee appointed M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar (Firm Registration No.100123) as the Cost Auditor of the Company to conduct audit of the cost accounts of all the Divisions of the Company for the financial year 2018-19. They have submitted a certificate of eligibility for the appointment.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought in the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2016-17 has been filed and the report for the year under review will be filed before the due date.

39. TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (‘IEPF Rules’), all the shares on which dividends remain unpaid /unclaimed for a period of 7 (seven) consecutive years or more has to be transferred to the demat account of the IEPF Authority as notified by the Ministry of Corporate Affairs. Accordingly, the Company has transferred 1,09,179 Ordinary Shares of the face value of Rs. 10 per share to the demat account of the IEPF Authority during the financial year 2017-18.

The Company had sent individual notice to all the shareholders whose shares were due to be transferred to the IEPF Authority and has also published newspaper advertisement in this regard. The details of such dividends/ shares transferred to IEPF are uploaded on the website of the Company at www.punjabchemicals.com.

The members/claimants whose shares and unclaimed dividend have been transferred to the IEPF Authority can claim the same by making an application to the IEPF Authority in Form IEPF- 5 along with requisite documents (available on www.iepf.gov.in) and sending duly signed physical copy of the same to the Company along with requisite documents prescribed in Form IEPF-5. Member/ claimant can file only one consolidated claim in a financial year as per the IEPF Rules. No claims shall lie against the Company in respect of the dividend/shares so transferred.

40. MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT:

(i) MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report on Company’s performance, industry trend and other material changes with respect to the Company and subsidiaries have been given separately in the Annual Report as required under para B of Schedule V of SEBI (LODR) Regulations, 2015.

(ii) CORPORATE GOVERNANCE REPORT:

The Company strives to maintain the required standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Report on Corporate Governance in accordance with para C of Schedule V of SEBI (LODR) Regulations, 2015 forms integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance

41. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company its future operations.

42. CHANGE IN THE NATURE OF BUSINESS:

There is no change in the nature of business of the Company.

43. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

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

b) the Directors 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 and loss of the Company for the year ended on that date;

c) the Directors have 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;

d) the Directors have prepared the annual accounts of the Company on a ‘going concern’ basis;

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

44. ACKNOWLEDGEMENT:

The Directors express their gratitude to Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company.

For and on behalf of the Board of Directors

MUKESH DAHYABHAI PATEL

Place: Mumbai CHAIRMAN

Date: May 29, 2018 DIN:00009605

Source : Dion Global Solutions Limited
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