Your Directors present herewith the 5th Annual Report on the business & operationsof the Company alongwith the Audited Statement of Accounts for the financial year ended31st March 2019.
1. Financial Results
A summary of standalone and consolidated Financial Performance of the Company for thefinancial year ended on 31st March 2019 as compared to the previous year are summarizedbelow: (Rs. in lakhs)
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|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Revenue from Operations (Gross) ||0.40 ||0.57 ||4565.95 ||4300.06 |
|Profitbefore Finance Costs Tax Depreciation and Amortization ||11.08 ||(34.24) ||676.33 ||838.76 |
|Less: Depreciation & Amortization Expenses ||2.27 ||2.25 ||16.96 ||17.65 |
|Less: Finance Cost ||- ||- ||39.85 ||289.74 |
|Profit/(Loss) Before Tax ||8.81 ||(36.49) ||619.52 ||531.37 |
|Profit/(Loss) After Tax ||7.16 ||(36.49) ||574.08 ||518.54 |
2. Operating Performance / Status of Company's A3 air
Details on the state of affairs of the Company are covered in the Management Discussionand Analysis Report.
A detailed analysis of the Company's operations future expectations and businessenvironment has been given in the Management Discussion & Analysis Report which ismade an integral part of this Report and marked as Annexure "A".
3. Financial Performance 2018-19
During the Financial Year 2018-19 the Company incurred a Profitof Rs. 7.16 lakhs ascompared to loss of Rs. 36.49 lakhs in the previous year on standalone basis. Onconsolidated basis the Profitafter tax stood at Rs. 574.08 lakhs as compared to ProfitofRs. 518.52 lakhs in the previous year In view of inadequate pro3 ts the Board of theDirectors has not recommended payment of dividend.
There is no change in the nature of business of the Company. There were no significantor material orders passed by regulators courts or tribunals impacting the Company'soperation in future.
There were no material changes and commitments a3 ecting the financial position of theCompany which have occurred between the end of the financial year i.e. 31st March 2019 anddate of this report.
4. Public Deposits
During the year the Company has not accepted any deposits from the public underChapter V of the Companies Act 2013.
5. Share Capital
Paid up Share capital comprises of 10003102 Equity Shares with a face value ofRs.10/- totalling to Rs.100031020/- and 1300000 Preference Shares of Rs. 10/- eachtotalling to Rs. 13000000/- . During the year under review there has been no change inthe capital structure.
Your Company has not issued any shares/securities during the Financial Year 2018-19.
6. Subsidiary Associate and Joint Venture
During the year there was no change in the subsidiaries. The Company has 3 fivesubsidiaries. The Company has formulated a policy for determining material subsidiaries inline with the requirement of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The said Policy is being disclosed on the Company's website at theweblink http://birla-sugar.com/Assets/Palash/Palash-Securities-Policy-for-Determining-Material-Subsidiaries.pdf
The consolidated financial statements presented by the Company include financialinformation of its subsidiaries prepared in compliance with applicable AccountingStandards.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of the Companies (Accounts) Rules 2014 the details containing salient features of thefinancial statement of subsidiary companies in Form AOC-1 forms part of this Report andmarked as Annexure "G"
7. Human Resources
The Company continued to create a productive learning and caring environment byimplementing robust and comprehensive HR processes fair transparent performanceevaluation and taking new initiatives to further align its Human Resource policies to meetthe growing needs of its business.
The Board comprises of 5 (3 ve) Non-Executive Directors having experience in varied 3elds and a Managing Director. Out of 3 five Non-Executive Directors three of them areIndependent Directors. Mrs. Shalini Nopany is the Chairperson of the Company.
During the year Mr. Bal Kishore Malpani was appointed w.e.f. 10th August 2018 as anAdditional Director in the category of Non Executive Director and his appoinment wasregularised in the officeof Non-executive Director by the Shareholders of the Company attheir 4th Annual General Meeting held on 24th September 2018. Mr. Chandra Shekhar NopanyChairman & Non-executive Director has resigned from the directorship of the Companyvide his letter dated 3rd November 2018. The Board records its appreciation for hisunstinted support and counselling towards development of the Company while being in theoffice of Director.
Mrs. Shalini Nopany will retire by rotation at the ensuing Annual General Meeting andbeing eligible has offered herself for re-appointment as Director of the Company. TheCompany has received necessary declaration from each independent director under Section149(7) of the Companies Act 2013 that they meet the criteria of independence laid downin Section 149(6) of the Companies Act 2013 read with Regulation 25 of SEBI (LODR)Regulations 2015.
Other information on the Director including required particulars of Director retiringby rotation is provided in the Notice convening the Annual General Meeting.
In pursuance of the provisions of the Companies Act 2013 and according to Regulation25(3) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Performance Evaluation Criteria has been laid downfor effective evaluation of performance of the Board of Directors the Committees thereofand individual Directors including the Chairperson of the Company. After detaileddiscussion at Board level as well as taking input from each Director Nomination andRemuneration Committee finalized the format / questionnaires containing various parametersto evaluate the performance of Board and its committee(s) Individual Directors andChairperson of the Company. The performance evaluation parameters are based on their rolesand responsibilities contribution to the Company's goals decision making process flowof information and various other aspects. The evaluation of performance of the Board as awhole Committees of the Board Individual Directors including the Chairperson of theCompany was carried out for the Financial Year 2018-19. Nomination and RemunerationCommittee evaluated the performance of the individual Director.
The Independent Directors in their separate meeting held on 2nd November 2018 carriedout the evaluation of the Board of Directors as a whole Chairperson of the Company andNon-Independent Directors. The evaluation of Independent Directors was carried out withoutthe presence of concerned Director.
The Chairman of Nomination and Remuneration Committee has submitted report of therespective evaluations to the Chairperson of the Company. Based on the questionnairesreceived from the Directors and considering the reports of Chairman of Nomination andRemuneration Committee the Board has evaluated its own performance and that of itscommittees and individual directors including independent directors.
9. Key Managerial Personnel
The following directors / executives of your Company are whole-time Key ManagerialPersonnel (KMPs) as on 31st March 2019 in accordance with the provisions of Section 203of the Companies Act 2013 a. Mr. Chand Bihari Patodia - Managing Director b. Mr.Deepak Kumar Sharma Chief Financial Officer c. Ms. Mayuri Raja CompanySecretary During the year under review there was no change in the Key ManagerialPersonnel.
All Directors Key Managerial Personnel and Senior Management of the Company haveconfirmed compliance with the Code of Conduct applicable to Directors & employees ofthe Company and a declaration to the said effect by the Managing Director is made part ofCorporate Governance Report which forms part of this report. The Code is available on theCompany's website at the weblink - http://birla-sugar.com/Assets/Palash/Palash-Securities-Code-of-Conduct.pdf. All Directors have confirmedcompliance with the provisions of Section 164 of the Companies Act 2013.
10. Remuneration Policy
The Board has framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy as adopted by the Board ofDirectors is available at the website of the Company at the weblink http://www.birla-sugar.com/Assets/Palash/PALASH-REMUNERTION-POLICY.pdf. The Nomination & Remuneration Committee hasalso framed criteria for performance evaluation of every Director and accordingly hascarried out the performance evaluation during the year under review.
The Remuneration Policy inter-alia includes the appointment criterion &qualification requirements process for appointment & removal retirement policy andremuneration structure & components etc. of the Directors Key Managerial Personnel(KMP) and other senior management personnel of the Company. As per the RemunerationPolicy a person proposed to be appointed as Director KMP or other senior managementpersonnel should be a person of integrity with high level of ethical standards. In case ofappointment as an independent director the person should fulfill the criteria ofindependence prescribed under the Companies Act 2013 rules framed thereunder and theListing Regulations. The Remuneration Policy also contains provisions about the payment offixed & variable components of remuneration to the Whole-time Director/ManagingDirector and payment of sitting fee & commission to the non-executive directors.
11. Corporate Social Responsibility Policy
The provisions of Section 135 of the Companies Act 2013 relating to CorporateSocial Responsibility are not applicable to the Company.
A calendar of Meeting is prepared and circulated in advance to the Directors. The Boardevaluates all the decisions on a collective consensus basis amongst the Directors. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013. During the financial year ended 31st March 2019 4 (Four) Meetings of the Boardof Directors of the Company were held. The details of the Board Meetings held during thefinancial year 2018-19 have been furnished in the Corporate Governance Report forming apart of this Annual Report.
The Company has complied with the applicable Secretarial Standards prescribed underSection 118(10) of the Companies Act 2013.
13. Audit Committee
The Audit Committee was constituted on 30th March 2017. The Committee now comprisesMr. Chhedi Lal Agarwal Mr. Arun Kumar Newar Mr. Dinesh Kacholia and Mr. Chand BihariPatodia. The Company Secretary acts as the Secretary to the Committee and the ChiefFinancial Officer is a permanent invitee to the meetings. During the year there were noinstances where Board has not accepted the recommendation of Audit Committee.
The details of the terms of reference number and dates of meetings held attendance ofthe Directors and remuneration paid to them are separately provided in the CorporateGovernance Report.
14. Stakeholders' Relationship Committee
The Stakeholders' Relationship Committee was constituted on 30th March 2017. TheCommittee now comprises of Mr. Chhedi Lal Agarwal Mr. Arun Kumar Newar and Mr. DineshKacholia. The Company Secretary acts as the Secretary to the Committee. The details of theterms of reference number and dates of meetings held attendance of the Directors andremuneration paid to them are separately provided in the Corporate Governance Report.
15. Nomination and Remuneration Committee
The Nomination and Remuneration Committee was constituted on 30th March 2017. TheCommittee now comprises of Mr. Chhedi Lal Agarwal Mr. Arun Kumar Newar and Mr. DineshKacholia. The Company Secretary acts as the Secretary to the Committee. The details of theterms of reference number and dates of meetings held attendance of the Directors andremuneration paid to them are separately provided in the Corporate Governance Report.
16. Loans Guarantee and Investments
During the year under review the Company has not given any loans and corporateguarantees covered under the provisions of Section 186 of the Companies Act 2013. Detailson particulars relating to investments under Section 186 of the Companies Act 2013 areprovided in Note 10 of the financial statement.
17. Related Party Contracts / Arrangements
All Related Party Transactions entered during the year were on arm's length basis andin the ordinary course of business. There have been no materially-signi3 cant relatedparty transactions made by the Company with the Promoters the Directors or the KeyManagerial Personnel which may be in conflict with the interests of the Company at large.Accordingly disclosure of contracts or arrangements with Related Parties as requiredunder section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable.
The Policy on Related Party Transactions as approved by the Board can be accessed onthe Company's website at the web-link http://www.birla-sugar.com/Assets/Palash/Palash-Securities-Related-Party-Transaction-Policy.pdf.The Policy on Related Party Transactions was aligned with the changes recommended by theMCA/SEBI in this regard.
The details of related party transactions are set out in the notes to the financialstatements.
18. Risk Management
Business Risk Evaluation and Management is an ongoing process within theOrganization. The Company has a robust risk management framework to identify monitor andminimize risks as also identify business opportunities.
19. Internal Financial Controls
The Company has laid down internal financial control's through a combination of Entitylevel controls Process level controls and IT General controls inter-alia to ensureorderly and e3 cient conduct of business including adherence to the Company's policiesand procedures accuracy and completeness of accounting records and timely preparation andreporting of reliable financial statements/information safeguarding of assets preventionand detection of frauds and errors. The evaluations of these internal financial controlswere done through the internal audit process and were also reviewed by the StatutoryAuditors. Based on their view of these reported evaluations the directors con3 rm thatfor the preparation of financial statements for the financial year ended 31st March 2019the applicable Accounting Standards have been followed and the internal financial controlsare generally found to be adequate and were operating effectively & that nosignificant defficiencies were noticed.
20. Whistle Blower / Vigil Mechanism
The Company has established a vigil mechanism and adopted whistle blower policypursuant to which whistle blowers can report concerns about unethical behaviour actual orsuspected fraud or violation of the Company's code of conduct policy. During the yearunder review there has been change in this policy with respect to leak or suspected leakof Unpublished Price Sensitive Information has been incorporated so that whistle blowerscan report concerns. The mechanism provides adequate safeguards against victimisation ofpersons who use this mechanism. The brief detail about this mechanism may be accessed onthe Company's website at the weblink http://www.birla-sugar.com/Assets/Palash/Palash-Securities-Whistle-Blower-Policy.pdf
During the year the auditors and the secretarial auditors have not reported any fraudunder Section 143(12) of the Companies Act 2013 and the Companies (Audit and Auditors)Rules 2014
21. Corporate Governance & Annual Return
Your Directors strive to maintain highest standards of Corporate Governance. TheCorporate Governance Report for the Financial Year 2018-19 is attached as Annexure"B" to this Report. The declaration of the Managing Director con3 rmingcompliance with the Code of Conduct' of the Company is enclosed as Annexure Annexure"C" to this Report and Auditor's Certificate con3 rming compliance with theconditions of Corporate Governance is enclosed as Annexure "D" to thisReport The extract of the Annual Return of the Company is attached as Annexure"F"to this Report and is also available on the Company's website viz.http://www.birla-sugar.com/About-Us-PALASH-SECURITIES-LIMITED#
22. Auditors Audit Qualifications and Board's Explanations
At the 2nd Annual General Meeting (AGM) of your Company held on 12th September 2016M/s. Agrawal Subodh & Co. Chartered Accountants having Firm Registration No.319260E were appointed as Statutory Auditors of your Company to hold office for a term of5 (3 ve) years at the 2nd Annual General Meeting (AGM) (subject to rati3 cation of suchappointment by the Members at every AGM) of your Company held on 12th September 2016 fromthe conclusion of 2nd AGM till the conclusion of the 7th AGM of your Company. They haveconfirmed that they are not disqualified from continuing as Auditors of the Company.
However since the first provision to Sec 139(1) has been omitted by the CompaniesAmendment Act 2017 with effect from 7th May 2018 the rati3 cation of such appointmentat every AGM is not required. Accordingly M/s. Agrawal Subodh & Co. CharteredAccountants shall continue as Statutory Auditors of your Company till the conclusion ofthe 7th AGM of your Company.
The Notes to the Financial Statements read with the Auditor's Reports areself-explanatory and therefore do not call for further comments or explanations. Therehas been no qualification reservation adverse remark or disclaimer in the Auditor'sReports.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed Messrs Vinod Kothari & Co. Practising Company Secretaries to undertake theSecretarial Audit of the Company for the financial year 2018-19. The Secretarial AuditReport is annexed herewith as Annexure "E" which is self-explanatory.
There has been no qualification reservation observation disclaimer or adverse remarkin the Secretarial Audit Report of the Company. In addition to the above pursuant to newRegulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015introduced by SEBI on 8 February 2019 every material unlisted subsidiaries incorporatedin India shall undertake secretarial audit and shall annex with its annual report asecretarial audit report given by a company secretary in practice with effect from theyear ended 31st March 2019. Accordingly the Secretarial Audit Report of the materialunlisted subsidiaries of the Company viz-a-viz Allahabad Canning Limited and HargaonInvestment & Trading Co. Ltd is annexed herewith as Annexure "E1"& Annexure "E2" respectively which is self-explanatory.
Further there has been no qualification reservation observation disclaimer oradverse remark in the Secretarial Audit Report of Allahabad Canning limited and HargaonInvestment & Trading Co. Ltd.
23. Investor Education and Protection Fund
The provisions pertaining to Investor Education and Protection Fund (Uploading ofInformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany are not applicable to your company.
24. Disclosures Under Sexual Harassment of Women at Workplace (Prevention Prohibiton& Redressal) Act 2013
There has been no such case pending during the year under review.
25. Energy Conservation Technology Absorption and Foreign Exchange Earnings &Outgo
The provisions of Section 134(3)(m) of the Companies Act 2013 do not apply to ourCompany. There was no foreign exchange inflow or outflow during the year under review.
26. Particulars of Employees
There was no employee in the Company who was in receipt of remuneration as required tobe disclosed under section 134 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
27. 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 Companies Act 2013: a. that in the preparation of the annualfinancial statements for the year ended 31st March 2019 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any; b. that such accounting policies as mentioned in Note 3 of the Notesto the Financial Statements have been selected and applied consistently and judgement andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2019 and of the Profitorloss of the Company for the year ended on that date; c. that proper and su3 cient care hasbeen taken for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d. that the annual financialstatements have been prepared on a going concern basis; e. that proper internal financialcontrols were in place and that the financial controls were adequate and were operatingeffectively. f. that systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
28. CEO/CFO Certification
Mr. Chand Bihari Patodia Managing Director and Mr. Deepak Kumar Sharma ChiefFinancial Officer have submitted certificates to the Board as contemplated underRegulation 17(8) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations2015.
Your Directors wish to express their sincere thanks to the bankers and otherstakeholders for their continued co-operation and assistance.
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For and on behalf of the Board
| ||Chand Bihari Patodia ||Bal Kishore Malpani |
|Place: Kolkata ||Managing Director ||Director |
|Dated: 10th May 2019 ||DIN: 01389238 ||DIN: 00209006 |