PERMANENT MAGNETS LIMITED
Your Directors have pleasure in presenting the 56th Annual Report of theCompany together with the Audited Statements of the Accounts for the year ended 31stMarch 2017.
| || ||(Rs In Lakhs) |
|Particulars ||31/03/2017 ||31/03/2016 |
|Sales ||7193.37 ||6744.56 |
|Other Income ||26.50 ||26.58 |
|PBIDT & Extra Ordinary Items ||447.89 ||381.11 |
|Interest ||165.88 ||160.10 |
|Depreciation ||140.04 ||137.16 |
|Profit before Extra Ordinary Items & tax ||141.97 ||83.84 |
|Extra Ordinary Items ||- ||- |
|Profit before Tax ||141.97 ||83.84 |
|Current Tax /Deferred Tax (excess prov of IT ) ||23.29 ||(9.44) |
|Profit/(Loss) for the year ||118.68 ||93.28 |
1. COMPANY'S PERFORMANCE:
The Sales for the financial year under review increased by appx. 7% as compared toprevious year. Profitability also improved due to foreign exchange gain and operationalefficiency during the year. The Company's total Revenue from operation stood at
Rs. 7193.37 lakhs and the revenue for previous year was Rs. 6744.56 lakhs. The revenuefrom operation comprises of export
Rs. 4390.11 lakhs. The Company earned Profit before Extra Ordinary Items & tax ofRs. 141.97 lakhs and profit after tax of Rs. 118.68 lakhs as compared to profit of Rs.93.28 lakhs.
2. DIVIDEND :
Due to the paucity of net profit and to conserve resources for growth the Board hasconsidered it prudent not to declare any dividend.
3. CHANGE IN THE NATURE OF THE BUSINESS:
There were no changes in the nature of business during the year under review asprescribed 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 financialyear.
The company has not accepted any deposits from the public during the year pursuant tothe provisions of section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014 or under Chapter V of the Companies Act 2013 (the Act).
The shares of the Company are listed on "BSE Limited" at Mumbai. The Companyhas 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 Independenceas required under Section 149(7) of the Act confirmingthat they meet the criteria ofindependence as provided under the Act and the Securities Exchange Board of India (ListingObligations and Disclosures Requirements) Regulations 2015 (Listing Regulations).
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of the Act and Articles of Association of theCompany Shri. Mukul Taparia non-executive director retires by rotation and beingeligible offers himself for reappointment.
The Board of Directors comprises of five directors of which two are Independent. TheChairman is an Independent and Non Executive Director. There were no director appointed orresigned during the year.
Smt. Bhavana Shah the Company Secretary and Compliance officer continue with theposition and ceased to be associated with the Company w. e.f March 30 2017.
On the recommendation of Nomination and Remuneration Committee the Board of Directorsof the Company at their meeting held on March 30 2017 has appointed Ku.Rachana Rane asthe Company Secretary and Compliance Officer of the Company.
Shri Sukhmal Jain Senior Vice President Finance acts as the CFO of the Company.
9. DIRECTORS RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Act : a) that in the preparation of the annual financialstatements for the year ended March 31 2017 the applicable accounting standards havebeen 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 beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March312017and profitof the Company for the year ended onthat date; c) that proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d) that the annual financial statements have been prepared on agoing concern basis; e) that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively. f) that systems to ensurecompliance with the provisions of all applicable laws were in place and were adequate andoperating effectively.
10. CORPORATE GOVERNANCE:
In terms of Regulation 27(2) read with Regulation 15(2) of Chapter IV of ListingRegulations compliance with the provisions of clauses relating to corporate governance isnot mandatory for the time being in respect of the companies having paid up equity sharecapital not exceeding Rs. 10 Crore and net worth not exceeding Rs. 25 Crore as on thelast day of the previous financial year. As our Company fits in these criteria it is notrequired to provide details on corporate governance.
11. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:
Since the Company has no subsidiaries Joint Ventures or associate companiesprovisions of section 129(3) of the Companies Act 2013 is not applicable. During the yearunder review no Companies have become or ceased to be Company's Subsidiaries JointVentures or associate companies. As the Company do not have any subsidiaries associatesor joint venture companies as per the Companies Act 2013 no report on the performance ofsuch Companies is provided.
12.1 STATUTORY AUDITORS
As per the provisions of the Companies Act 2013 (the Act) the period of office ofM/s Jayesh Sanghrajka & Co. LLP Chartered
Accountants (Firm Registration No. 104184W/W100075) Statutory Auditors of the Companyexpires at the conclusion of the ensuing Annual General Meeting. As per the recommendationof Audit Committee it is proposed to appoint M/s Ramanand & Associates CharteredAccountants (Firm Registration No. 117776W) as Auditors of the Company for a term of 5(five) consecutive years. M/s Ramanand & Associates Chartered Accountants haveconfirmed their eligibility and qualification required under the Act for holding theoffice as Statutory Auditors of the Company.
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 Company hasappointed Shri Arun Dash (COP No.:9309) of M/s. Arun Dash & AssociatesCompanySecretaries to undertake the secretarial audit of the company. The Secretarial AuditReport is annexed herewith as "Annexure B". The observations made in theSecretarial Audit Report are self-explanatory.
12.3 INTERNAL AUDITORS
M/S. G S Nayak & Co.Chartered Accountants performs the duties of internal auditorsof 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 ascontained in the annexure to the Auditor's Report:
a) With reference to para VII(a) and para VII(c) of the Annexure to the Auditor'sReport the Income tax item i.e 0.54 lakhs relates to a company that has merged in thecompany and 9.36 lakhs pertaining to late filing fees & interest which are showingpayable as per Income Tax Department. The matter is being looked into and shall soon beappropriately dealt with.
b) With reference to para VIII of the Annexure to the Auditor's Report the CentralExcise Loan has remained unpaid as the matter is pending for the Clarification fromGovernment of India and implementing agency i.e ICICI Bank for claiming compound intereston an interest free excise loan under a scheme of incentives. Matter with relevantagencies will be sorted out in due course of time. No material liability is expected inthis regard.
14. MANAGEMENT DISCUSSION AND ANALYSIS.
The Management Discussion and Analysis are annexed and forms an integral part of thisreport.
15. PARTICULARS OF EMPLOYEES:
There are no employees covered by provision contained in Rule 5(2) and Rule 5(3) ofCompanies (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. Arun Dharmatti 5. Hemant Kore 6. AllenD'cunha 7. Bhavana Shah 8. Sunil Verma 9. Raghav Garg 10. Deepali Rane
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (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
Honourable Bombay High Court has given interim stay order till 14thSeptember 2015 against the winding up order passed against the Company dated 15/04/2015.This was a lawsuit filed services to the company. Company has deposited Rs. 1905179/-including interest as per direction of Honourable Bombay High Court.The Appeal shall beadded to appropriate board for hearing. But the same is not yet listed on the Board of HC.
17. CONSERVATION OF ENERGY TECHNOLOGY DEVELOPMENT AND ABSORPTION:
The Conservation of Energy R & D activity in the Company is mainly carried out bythe key line manufacturing and technical personnel in alliance with the key technicalsales personnel and outsourced consultants. "Annexure A" attached heretoprovides the information required to be disclosed on the efforts made on Conservation ofEnergy Technology Development and Absorption as per Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014.
18. CORPORATE SOCIAL RESPONSIBILITY
The provisions of the Companies Act 2013 regarding Corporate Social Responsibility arenot applicable to the company.
19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Vigil Mechanism Policy for directors and employees to reportgenuine concerns and to provide for adequate safeguards against victimization of personswho 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 financialyear 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/transactionwith related parties which could be considered material.Members may refer to Note 8 ofNotes to Account of the standalone financial statement which sets out
The information on transactions with related parties pursuant to Section 134(3)(h) ofthe 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. 12 (b) of Notes to accounts for the foreign exchangeoutgo and earnings of the Company which is required to be disclosed under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014.
22. PARTICULARS OF LOANS GIVEN GUARANTEES AND INVESTMENTS MADE GUARANTEES GIVEN ANDSECURITIES PROVIDED:
There was no loans made guarantees given or securities provided during the yearpursuant to Section 186 of the Companies Act 2013.
23. MEETINGS COMPOSITION OF THE BOARD AND COMMITTEES:
The Board of Directors of the Company met five times during the year on 28thMay 2016; 10th August 2016 ; 5th November 2016; 10thFebruary 2017 and 30th March 2017.
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. Arun Binani ||Chairman Independent and Non Executive Director ||3 ||- ||- |
|Shri. Sharad Taparia ||Managing Director ||- ||- ||- |
|Shri. Rajeev Mundra ||Independent and Non Executive Director ||2 ||- ||1 |
|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 arereckoned for the purpose. The details of the meetings attended by the Board during theyear are given below.
|Date of Board Meetings ||Shri. Arun Binani ||Shri. Sharad Taparia ||Shri. Rajeev Mundra ||Shri. Mukul Taparia ||Smt. Sunaina Taparia |
|28th May 2016 ||v ||v ||v ||v ||v |
|10th August 2016 ||v ||v ||v ||v ||- |
|5th November 2016 ||v ||v ||v ||v ||- |
|10th February 2017 ||v ||v ||v ||v ||- |
|30th March 2017 ||v ||v ||v ||v ||v |
The time gap between any two meetings did not exceed four months.
AUDIT COMMITTEE Constitution
During the year under review the committee consisted of four directors viz. Shri.Rajeev Mundra Chairman Shri. Arun Binani Shri. Mukul Taparia 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. Arun Binani Member ||Independent Non Executive Director |
|4. ||Shri. Mukul Taparia Member ||Non Executive Director |
*Smt. Bhavana Shah Company Secretary acts as the Secretary of the Committee Ceasedto be associated with the Company w. e. f March 30 2017 * Ku. Rachana Rane CompanySecretary acts as the Secretary of the Committee w.e.f March 30 2017
Audit Committee Meetings during the year and attendance -
|Date of the Meeting ||Attendance of Directors for Meetings held during the year 2016-2017 |
| ||Shri. Rajeev Mundra ||Shri. Sharad Taparia ||Shri. Arun Binani ||Shri. Mukul Taparia |
|28th May 2016 ||v ||v ||v ||v |
|10th August 2016 ||v ||v ||v ||v |
|5th November 2016 ||v ||v ||v ||v |
|Date of the Meeting ||Attendance of Directors for Meetings held during the year 2016-2017 |
| ||Shri. Rajeev Mundra ||Shri. Sharad Taparia ||Shri. Arun Binani ||Shri. Mukul Taparia |
|10th February 2017 ||v ||v ||v ||v |
|30th March 2017 ||v ||v ||v ||v |
The Audit Committee is to oversee the Company's financial reporting process anddisclosure of its financial Information to recommend the appointment of StatutoryAuditors and fixation of their fees to review and discuss with the Management &Auditors about internal control systems the scope of Audit including the observations ofthe Auditors adequacy of the internal audit system changes in accounting policies &practices and major accounting entries involving estimates compliances with accountingstandards and Listing Regulations and other legal requirements concerningfinancialstatements and related party transactions if any to review the Company'sFinancial and Risk Management Policies and discuss with the Internal Auditors anysignificant findings for follow-up thereon to review the Quarterly Half yearly andAnnual Financial Statements before they are submitted to the Board of Directors.
The Audit Committee has established a Vigil Mechanism and adopted a RevisedWhistle-Blower Policy which provides a formal mechanism for all Directors and employees ofthe Company to approach the Management of the Company (Audit Committee in case where theconcern involves the Senior Management) and make protective disclosures to the Managementabout unethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or ethics . The disclosures reported are addressed in the manner and within thetime frames prescribed in the Policy. The Company affirms that no director or employee ofthe Company has been denied access to the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE (NRC)
During the year under review the committee consisted of three directors viz Shri.Rajeev Mundra Chairman Shri. Arun Binani Shri. Mukul Taparia. During the year thecommittee met twice 28th May 2016 and 30th March 2017 the meetingwas attended by all members.
The Committee was mandated with the following terms of reference:
- Determination and approval of the remuneration commission and special allowance ifany payable to the Managing Director.
- Finalisation and approval of the annual increments if any to the Managing Director.
Further on the recommendation of the Board and the Nomination and RemunerationCommittee and subject to such other necessary approval(s) consent(s) or permission(s) asmay be required the consent of the members of the Company be and is hereby approves witheffect from this Annual general meeting the revision in the salary scale applicable toShri. Sharad Taparia as detailed in the statement forming part of the notice.
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 Stakeholder Relationship Committee of the Board is empowered to oversee the redressalof investors' complaints pertaining to share/debenture transfers non-receipt of annualreports interest/dividend payments issue of duplicate certificates transmission (withand without legal representation) of shares and other miscellaneous complaints. Thecomposition of the Stakeholder Relationship Committee and attendance at its meeting is asfollows:
Stakeholder Relationship Committee consists of Shri. Rajeev Mundra Chairman of theCommittee Shri. Mukul Taparia and Shri. Arun Binani. The Company Secretary Smt. BhavanaShah is the compliance officer for this purpose. The committee meeting was held on 10thFebruary 2017 and 30th March 2017 and was attended by all three members.
During the year the Company received NIL complaints.
The Committee reviews the system of dealing with and responding to correspondence fromall investors. Every complaint letter received from stock exchanges SEBI Dept. ofCompany Affairs etc. and the responses thereto are reviewed by this committee. Thecommittee also reviews the feedback from the investors and approves initiatives forfurther improvements in investor servicing. The Committee also ensures the expeditiousshare transfers.
24. REMUNERATION POLICY
The Company has a policy in place for identification of Independence Qualificationsand positive attributes of Directors. The remuneration of the Directors is recommended byNRC to the Board for their approval.
25. ANTI SEXUAL HARASSMENT POLICY
The Company has in place a policy on Anti Sexual Harassment in line with therequirements of The Sexual Harassment of Women at the Work place (Prevention Prohibition& Redressal) Act 2013. There were no instances of Sexual Harassment that werereported during the period under review.
26. EXTRACT OF ANNUAL RETURN
An extract of Annual Return in the prescribed Form No. MGT 9 as referred to in section92(3) of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is appended as "Annexure C".
27 . ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Control Systems commensurate with its sizeand nature of business. Internal Audits are periodically conducted by an external firm ofChartered Accountants who monitor and evaluate the efficiency and adequacy of internalfinancial control systems in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company. Based on the report ofinternal audit function suitable corrective actions are taken and thereby controls arestrengthened. These Internal Audit reports are reviewed by the Audit Committee.
28. SHARE CAPITAL
The Paid-up Capital of the Company is Rs. 85984530/- and Authorised Capital of theCompany is Rs. 160000000/-.
29. COST RECORDS AND AUDIT
Under the Section 148 of the Act the Central Government has prescribed maintenance andaudit of cost records vide the Companies (Cost Records and Audit) Rules 2014 to suchclass of companies as mentioned in the Table appended to Rule 3 of the said Rules. Costaudit provisions are not applicable to the Company as of now.
30. EQUITY SHARES IN THE SUSPENSE ACCOUNT
In accordance with the requirement of Regulation 34 (3) and Schedule V Part F ofListing Regulations 2015 the Company reports the following details in respect of equityshares lying in the suspense account which were issued in dematerialised form pursuant tothe public issue of the Company: NA
|Particulars ||Number of shareholders ||Number of equity shares |
|Aggregate number of shareholders and the outstanding shares in the suspense account ||NIL ||NIL |
31. PERFORMANCE EVALUATION :
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBIListing Regulations').
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of criteria such as the composition of committeeseffectiveness of committee meetings etc. The reports on performance evaluation of theIndividual Directors were reviewed by the Chairman of the Board. In a separate meeting ofindependent directors performance of non-independent directors and the board as a wholewas evaluated taking into account the views of executive directors and non-executivedirectors.
Your Directors wish to thank all the shareholders bankers and clients for lendingtheir support in various activities of the Company. Your Directors would like to place onrecord their appreciation to all the employees who have continued their support during theyear.
| ||FOR AND ON BEHALF OF THE BOARD || |
| ||Sd/- ||Sd/- |
|Date: 14th August 2017 ||Sharad Taparia ||Arun Binani |
|Place: Mumbai. ||Managing Director ||Chairman |
|Corporate Office: || || |
|B-3 MIDC Industrial Area || || |
|Village Mira Mira Road - 401104 || || |
|Dist. Thane || || |