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Panchmahal Steel Ltd.

BSE: 513511 Sector: Metals & Mining
NSE: PANCHMSTEL ISIN Code: INE798F01010
BSE 00:00 | 30 Jul 99.40 -1.75
(-1.73%)
OPEN

104.50

HIGH

104.70

LOW

96.30

NSE 05:30 | 01 Jan Panchmahal Steel Ltd
OPEN 104.50
PREVIOUS CLOSE 101.15
VOLUME 9591
52-Week high 111.75
52-Week low 17.60
P/E 19.34
Mkt Cap.(Rs cr) 190
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 104.50
CLOSE 101.15
VOLUME 9591
52-Week high 111.75
52-Week low 17.60
P/E 19.34
Mkt Cap.(Rs cr) 190
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Panchmahal Steel Ltd. (PANCHMSTEL) - Director Report

Company director report

To

The Members

Your Company's Directors are pleased to present the 47th Annual Report of the Companytogether with the Statement of Audited Accounts for the financial year ended 31st March2020.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars Year ended 31.03.2020 Year ended 31.03.2019
Revenue from Operations 33047.41 45305.27
Operating Expenses 32657.01 43019.24
Operating Profit before Interest Tax Depreciation & Amortization 390.40 2286.03
Depreciation & Amortization Expense 762.86 763.57
Finance Costs 1349.70 1361.79
Other Income 202.78 219.29
Profit/(Loss) before Exceptional & Extraordinary Items and Tax (1519.38) 379.96
Exceptional & Extraordinary Items - -
Profit/(Loss) before Tax (1519.38) 379.96
Tax Expense (including Deferred Tax) 1701.85 124.11
Profit/(Loss) for the year from Continuing Operations (3221.23) 255.85
Other Comprehensive Income 44.36 -
Total Comprehensive Income for the year (3176.87) 255.85

TRANSFER TO RESERVES

No amount has been transferred to the Reserves in view of losses incurred during theyear under review.

STATE OF COMPANY AFFAIRS / REVIEW OF OPERATIONS

The total revenue (including other income) of the Company during the year was Rs.332.50crores as compared to Rs.455.25 crores in the previous year. The Company has incurred Lossbefore Tax of Rs.15.19 crores for the year under review (previous year Profit before Taxof Rs.3.80 crores). However the Company has incurred Total Comprehensive Loss of Rs.31.77crores for the year under review due to Deferred Tax & MAT adjustment of Rs.17.01crores.

The year has been a challenging for most businesses across the globe. Thestainless-steel industry faced a number of challenges due to slowdown in economic growthamidst global muted demand geopolitical tensions and falling steel prices. Thesemacroeconomic headwinds and operational challenges have adversely affected the contours ofthe business environment in which we operate. Further the outbreak of COVID-19 pandemiccreated an unprecedented socio-economic disruption across the globe. Uncertainty continuesto prevail in the COVID-19 environment.

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which these financialstatements relate and the date of this Report.

DIVIDEND

The Directors do not recommend any dividend for the year ended 31st March 2020.

SHARE CAPITAL

The paid-up Equity Share Capital of your Company as on March 31 2020 was Rs.19.08crores. The Company has not issued shares with differential voting rights/Bonus Shares norhas granted stock options/sweat equity and has not bought back any of its securitiesduring the year under review.

FIXED DEPOSITS

The Company has not accepted or renewed any deposits during the year. There are nooutstanding deposits as at 31st March 2020.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:

a) in preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2020 and of the profit of theCompany for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a 'going concern' basis;

e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Company has implemented procedures and adopted practices in conformity with theCode of Corporate Governance as stipulated under Regulation 34 read with Schedule V(C) ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015. TheCompany has implemented Code of Conduct for all its Executive Directors and SeniorManagement Personnel Non-Executive Non-Independent and Independent Directors who haveaffirmed compliance thereto. The said Code of Conduct has been posted on the website ofthe Company.

The Management Discussion and Analysis Report and the Corporate Governance Reportappearing elsewhere in this Annual Report forms part of Directors Report. A certificatefrom the Statutory Auditors of the Company certifying the compliance of conditions ofCorporate Governance is also annexed thereto.

CORPORATE SOCIAL RESPONSIBILITY

The provisions as prescribed under Section 135 of the Companies Act 2013 with regardto corporate social responsibility along with Rules made thereunder are not applicable tothe Company. The Corporate Social Responsibility Policy and the Committee shall be framedand constituted as and when required.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Your Company has not directly or indirectly:

a) given any loan to any person or other body corporate other than usual advancesenvisaged in a contract of supply of materials if any

b) given any guarantee or provide security in connection with a loan to any other bodycorporate or person; and

c) acquired by way of subscription purchase or otherwise the securities of any otherbody corporate exceeding sixty percent of its paid-up share capital free reserve andsecurities premium account or one hundred percent of its free reserves and securitiespremium account whichever is more.

RELATED PARTY TRANSACTIONS

The Company has formulated a policy on Related Party Transactions for the purpose ofidentification and monitoring of such transactions.The said Policy on Related PartyTransactions as approved by the Board is uploaded on the Company's web-site.

There were no related party transactions entered into by the Company during thefinancial year which attracted the provisions of Section 188 of Companies Act 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment

Based on recommendation of Nomination and Remuneration Committee Mr. Kalpesh J. Parmarwas appointed as an Additional Director (Non-Executive Non-Independent) by the Board ofDirectors effective from February 14 2020 subject to approval of Members at ensuingAnnual General Meeting. A resolution seeking appointment of Mr. Kalpesh J. Parmar asDirector is provided at item no. 3 of notice of the 47th AGM of the Company. Members arerequested to consider and approve his appointment.

Cessation

During the year Mr. Pradeep Sharma Director (Operations) resigned from the servicesand as Director of the Company with effect from 13th November 2019.

Your Directors wish to place on record their appreciation for his service and valuablecontribution made during his long association with the Company.

Re-appointments

Mr. Amal D. Dhru and Mr. Milan P. Shah were re-appointed as an Independent Directors atthe forty-sixth Annual General Meeting (AGM) held on September 28 2019 for a period offive years from the conclusion of 46th AGM and upto the conclusion of the 51st AGM of theCompany in the calendar year 2024. Mr. Samir M. Parikh was also re-appointed as anIndependent Director in the said AGM for a period of 5 years w.e.f. 4th February 2019 to3rd February 2024.

In accordance with the provisions of Section 152(6) of the Companies Act 2013 andRules made thereunder Ms. Suchita Shah retires by rotation at the forthcoming AnnualGeneral Meeting and being eligible offer herself for re-appointment. The Board recommendsher re-appointment.

Declaration by Independent Directors

The Company has received necessary declaration from each of the Independent Directorsunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(B) & Regulation 25 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.

In terms of the Rule 6 of the Companies (Appointment and Qualification of Directors)Rules 2014 all Independent Directors of the Company have enrolled themselves on theIndependent Directors Databank.

Performance Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 the Board hascarried out an annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of Board Committees viz. AuditCommittee Nomination & Remuneration Committee Stakeholders' Relationship Committee.The details of Board evaluation process have been provided under the Corporate GovernanceReport.

Familiarization Program for Independent Directors

All Independent Directors are familiarized with your Company their roles rights andresponsibilities in your Company nature of the industry in which your Company operatesbusiness model strategy operations and functions of your Company through its ExecutiveDirectors and Senior Managerial Personnel.

In compliance with the requirements of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 the Company has put in place a familiarization programfor Independent Directors. The details of familiarization program are explained in theCorporate Governance Report.

Remuneration Policy

The Board on the recommendation of the Nomination and Remuneration Committee had frameda policy for selection and appointment of Directors Senior Management and theirremuneration. The details of the Remuneration Policy form part of Corporate GovernanceReport of this Annual Report.

Number of Meetings of the Board and its committees

During the year under review 4 (four) meetings of the Board of Directors of theCompany were convened and held. The detailed information on the meeting of the Board andits various Meetings are included in the Corporate Governance Report forming part of thisreport. The Company has complied with the applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

Committees of the Board

The Board of Directors has the following Committees:

1. Audit Committee

2. Remuneration and Nomination Committee

3. Stakeholders' Relationship Committee

The details of the Committees along with their composition number of meetings held andattendance at the meetings are provided in the Corporate Governance Report.

Key Management Personnel

Pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act 2013read with Rules framed thereunder the following persons have been designated as KeyManagement Personnel of the Company:

1. Mr. Ashok Malhotra Chairman & Managing Director

2. Mr. Pradip Gupta Chief Financial Officer (Retired on 31st December 2019)

3. Mr. Nilesh Shah Chief Financial Officer (appointed as CFO w.e.f. 30th June 2020)

4. Mr. Deepak Nagar GM (Legal) & Company Secretary.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

At the 46th AGM held on September 28 2019 the Members approved the appointment of M/sCNK & Associates LLP Chartered Accountants (Firm Registration No. 101961W) asStatutory Auditors of the Company to hold office for a period of five years from theconclusion of that AGM untill the conclusion of the 51st AGM of the Company. In terms ofthe provisions relating to statutory auditors forming part of the Companies Amendment Act2017 notified on May 7 2018 ratification of appointment of Statutory Auditors at everyAGM is no more a legal requirement. Accordingly the Notice convening the ensuing AGM doesnot carry any resolution on ratification of appointment of Statutory Auditors.

The Notes on financial statements referred to in the Auditor's Report areself-explanatory and do not call for any further comments. The Auditor's Report does notcontain any qualification reservation adverse remark or disclaimer.

No fraud has been reported by the Auditor under section 143(12) of the Companies Act2013 requiring disclosure in the Board's Report.

Internal Auditors

During the year under review your Company has appointed M/s. Keyur Patel & Co.Chartered Accountants Vadodara as Internal Auditors to carry out the Internal Audit ofvarious operational areas of the Company with effect from 14th February 2020. The saidappointment was made in order to fill up the causal vacancy cuased by the resignation ofthe erstwhile Internal Auditors of the Company namely M/s Saurabh Shah & Co.Chartered Accoutants Vadodara on account of closure of their firm.

Cost Auditors

M/s. Kiran J. Mehta & Co. Cost Accountants Ahmedabad the Cost Auditors of theCompany carried out the audit of cost records for steel Plant of the Company during theyear.

The Board of Directors on the recommendation of the Audit Committee has appointed M/sKiran J. Mehta & Co. Cost Accountants (Firm Registration Number 000025) as CostAuditor to audit the cost records of the Company for the financial year 2020-21. Asrequired under the Companies Act 2013 a resolution seeking members' approval for theremuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting for their ratification.

The Cost Audit Report for the financial year 2018-19 was filed with the Ministry ofCorporate Affairs on 5th September 2019.

Secretarial Auditor

In terms of the provisions of Section 204 of the Companies Act 2013 Mr. NirajTrivedi Practising Company Secretary Vadodara have been re-appointed by the Board asSecretarial Auditor of the Company for the financial year 2020-21. The Secretarial AuditReport as issued by the Secretarial Auditor in Form No. MR-3 for the financial year2019-20 is annexed herewith as "Annexure-A" and forms integral part of thisAnnual Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark. The Company has complied with applicable SecretarialStandard during the year.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return as required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014forms part of this Report as "Annexure-B".

AUDIT COMMITTEE

During the year the Board has accepted all recommendations of Audit Committee andaccordingly no disclosure is required to be made in respect of non-acceptance of therecommendation of the Audit Committee by the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism named Whistle Blower Policy to deal with instances offraud and mismanagement if any. The details of the Whistle Blower Policy are explained inthe Corporate Governance Report and also posted on the website of the Company.

RISK MANAGEMENT POLICY

The Company has a Risk Management Policy to ensure appropriate risk management withinits systems and culture. The Board of Directors and the Audit Committee of the Companyperiodically reviews the Risk Management Policy of the Company. The provisions relating toRisk Management Committee are not applicable to the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope of the audit activity is broadly guided by theannual audit plan approved by the top management and audit committee. The InternalAuditors routinely test these systems and significant audit observations if any andfollow up actions thereon are reported to the Audit Committee.

The Company has in place adequate internal financial controls with reference tofinancial statements.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHNAGE EARNINGS &OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-C" to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Rule 5(1) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is attached as "Annexure-D" to this Report.

The statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out under Section 197(12) of the Act read withRules 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as "Annexure-E" to this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators /Courts which wouldimpact the going concern status of the Company and its future operations.

SUBSIDIARY JOINT VENTURES OR ASSOCIATE COMPANY

Honeyvick Enterprises Private Limited continues to be holding company holding 55.12%Equity Share Capital of the Company. The Company neither has anysubsidiary/associate/joint venture company nor any other company has become subsidiary/Associate/Joint Venture company of the Company during the year.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.

During the year under review the company has not received any complaint on sexualharassment and hence no complaints remain pending as of March 31 2020.

APPRECIATION

Your Directors thank the Banks Financial Institutions Shareholders Customers andSuppliers for their co-operation and support to the Company. The Directors express theirsincere appreciation for the dedication and commitment of all its employees.