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Panchmahal Steel Ltd.

BSE: 513511 Sector: Metals & Mining
NSE: PANCHMSTEL ISIN Code: INE798F01010
BSE 00:00 | 01 Feb 144.00 2.45
(1.73%)
OPEN

146.00

HIGH

146.00

LOW

139.00

NSE 05:30 | 01 Jan Panchmahal Steel Ltd
OPEN 146.00
PREVIOUS CLOSE 141.55
VOLUME 572
52-Week high 174.00
52-Week low 121.10
P/E 6.96
Mkt Cap.(Rs cr) 275
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 146.00
CLOSE 141.55
VOLUME 572
52-Week high 174.00
52-Week low 121.10
P/E 6.96
Mkt Cap.(Rs cr) 275
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 48th Annual Report of the Companytogether with the Statement of Audited Accounts for the financial year ended 31st March2021.

FINANCIAL RESULTS

(Rs. in Lacs)
Particulars Year ended Year ended
31.03.2021 31.03.2020
Revenue from Operations 33898.11 33047.41
Operating Expenses 31588.18 32657.01
Operating Profit before Interest Tax Depreciation & Amortization 2309.93 390.40
Depreciation & Amortization Expense 745.27 762.86
Finance Costs 1017.73 1349.70
Other Income 434.07 202.78
Profit/(Loss) before Exceptional & Extraordinary Items and Tax 981.00 (1519.38)
Exceptional & Extraordinary Items - -
Profit/(Loss) before Tax 981.00 (1519.38)
Tax Expense (including Deferred Tax) - 1701.85
Profit/(Loss) for the year from Continuing Operations 981.00 (3221.23)
Other Comprehensive Income 11.65 44.36
Total Comprehensive Income for the year 992.65 (3176.87)

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profit for financialyear 2020-21.

STATE OF COMPANY AFFAIRS / REVIEW OF OPERATIONS

Your Company achieved a total revenue of Rs.343.32 crores and profit before tax ofRs.9.81 crores during the year under review despite the pandemic induced challenges andcomplexities as against revenue of Rs.332.50 crores and a loss of Rs.15.19 crores in theprevious year.

COVID-19 IMPACT

During the year the Government had imposed stringent lockdowns on account of COVID-19which severely impacted manufacturing and business activities of the Company.

The Board and the Management will continue to closely monitor the situation as itevolves and do its best to take all necessary measures in the interests of allstakeholders of the Company.

FUTURE OUTLOOK

The global economy has begun to recover after the severe negative impact on account ofthe Covid-19 situation. The steel industry in particular is witnessing an up-cycle afterstagnating for the past several years. Your Company is well poised to benefit from thechanging business environment and your directors are confident of improved performance andprofitability in the coming years.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION

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 2021.

SHARE CAPITAL

The paid-up Equity Share Capital of your Company as on March 31 2021 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 2021. There are no deposits which are not incompliance with the requirements of Chapter V of the Companies Act 2013.

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 2021 the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any; b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2021 andof the profit of the Company for the year ended on that date; c) they have taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities; d) they have prepared the annual accounts ona 'going concern' basis; e) they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.

CORPORATE GOVERNANCE AND MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Company is committed to maintain the highest standards of corporate governance andadheres to the corporate governance requirements set out by SEBI. The Company has beenpracticing the principles of good corporate governance over the years and lays strongemphasis on transparency accountability and integrity. The report on Corporate Governanceas stipulated under the Listing Regulations forms an integral part of Annual Report. Acertificate from the Practising Company Secretary of the Company certifying the complianceof conditions of Corporate Governance is also annexed thereto.

Pursuant to Regulation 34 (2)(e) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ('Listing Regulations') the Management Discussion andAnalysis Report is presented in a separate section forming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

As per the audited financial figures for the financial year 2020-21 the provisions ofSection 135 of the Companies Act 2013 with regard to corporate social responsibility arenow applicable to your Company.

In terms of sub-section (9) of Section 135 which has been newly inserted w.e.f.22.01.2021 by the Companies (Amendment) Act 2020 the requirement for constitution ofCorporate Social Responsibility Committee is not applicable to your Company as the amountto be spent on CSR activities under section 135(5) does not exceed fifty lakhs rupees.Therefore the functions of such committee provided under this section shall be dulydischarged by the Board of Directors of the Company.

The CSR policy as adopted by the Board of Directors of the Company which providesguidelines to conduct CSR activities of the Company is available on the Company's websiteat www.panchmahalsteel.co.in.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Your Company has not directly or indirectly: a) given any loan to any person or otherbody corporate other than usual advances envisaged in a contract of supply of materials ifany b) given any guarantee or provide security in connection with a loan to any otherbody corporate or person; and c) acquired by way of subscription purchase or otherwisethe securities of any other body corporate exceeding sixty percent of its paid-up sharecapital free reserve and securities premium account or one hundred percent of its freereserves and securities premium account whichever is more.

RELATED PARTY TRANSACTIONS

Related party transactions entered during the financial year under review are disclosedin Notes to the financial statements of the Company for the financial year ended 31stMarch 2021. These transactions entered were at an arm's length basis and in the ordinarycourse of business.

There were no materially significant related party transactions with the Company'spromoters directors management or their relatives which could have had a potentialconflict with the interests of the Company and fall under the scope of Section 188(1) ofthe Act. Accordingly the disclosure of related party transactions as required underSection 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2020-21and hence does not form part of this report.

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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment

Mr. Kalpesh J. Parmar and Ms. Suchita Shah have been appointed as Non-ExecutiveNon-Independent Directors of the Company liable to retire by rotation at the 47th AnnualGeneral Meeting of the Company held on 30th September 2020. Re-appointments Mr. Ashok R.Malhotra has been re-appointed as Managing Director of the Company for a period of threeyears effective from 1st April 2021 based on the recommendations of Nomination andRemuneration Committee. The said appointment is subject to your approval at the ensuingannual general meeting.

In accordance with the provisions of Section 152(6) of the Companies Act 2013 andRules made thereunder Mr. Ashok R. Malhotra also retires by rotation at the forthcomingAnnual General Meeting and being eligible offer himself for reappointment. The Boardrecommends his re-appointment.

Declaration by Independent Directors

All the Independent Directors have given declarations stating that for the financialyear 2020-21 they meet the criteria of independence as contemplated under Section 149(6)read with Schedule IV to the Act as well as SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the same were taken on record by the Board. In termsof the Rule 6 of the Companies (Appointment and Qualification of Directors) Rules 2014all Independent Directors of the Company have enrolled themselves on the IndependentDirectors 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 the Company their roles rights andresponsibilities nature of the industry in which your Company operates business modelstrategy operations and functions of your Company through its Executive Directors andSenior 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 programs 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 5 (five) 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. Nilesh Shah Chief Financial Officer (appointed as CFO w.e.f. 30th June 2020)

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

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

In terms of provisions of the Companies Act 2013 at the 46th Annual General Meeting(28.09.2019) of the Company M/s CNK & Associates LLP Chartered Accountants (FirmRegistration No. 101961W) Vadodara were appointed as statutory auditors of the Companyto hold the office from the conclusion of the 46th annual general meeting till theconclusion of 51st annual general meeting to be held in the year 2022. They have confirmedthat they are not disqualified from continuing as auditors of the company.

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 beenreported by the Auditor under section 143(12) of the Companies Act 2013 requiringdisclosure in the Board's Report.

Internal Auditors

Your Company has appointed M/s Keyur Patel & Co. Chartered Accountants Vadodaraas Internal Auditors of the Company to carry out the internal audit of various operationalareas of the Company for the financial year 2021-22.

Cost Auditors

The Company is required to maintain cost records as specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 and accordingly suchaccounts and records are made and maintained by the Company. M/s. Kiran J. Mehta &Co. Cost Accountants (FRN: 000025) Ahmedabad the Cost Auditors of the Company havecarried out the audit of cost records for steel Plant of the Company during the year.

The Board after considering the recommendations of its Audit Committee appointed theaforesaid firm as cost auditors for the financial year 2021-22. As required under theCompanies Act 2013 a resolution seeking members' approval for the remuneration payableto the Cost Auditor forms part of the Notice convening the Annual General Meeting fortheir ratification.

The Cost Audit Report for the financial year ended 31st March 2020 was filed with theMinistry of Corporate Affairs on 30th September 2020.

Secretarial Auditor

Your Board has appointed Mr. Niraj Trivedi Practising Company Secretary Vadodara asSecretarial Auditor of the Company for the financial year 2021-22.

The Secretarial Audit Report as issued by the Secretarial Auditor in Form No. MR-3 forthe financial year 2020-21 is annexed herewith as "Annexure-A" and formsintegral part of this Annual Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark. The Company has complied with applicableSecretarial Standard during the year.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021 is available on the Company's website on www.panchmahalsteel.co.in.

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. The composition of Audit Committee andother details are given in the Corporate Governance Report.

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-B" to this Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act 2013 read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 andCompanies (Appointment and Remuneration of Managerial Personnel) Amendments Rules 2016as amended from time to time in respect of Directors / employees of the Company is setout in "Annexure-C" 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 a holding company holding 55.12%Equity Share Capital of the Company. The Company neither has any subsidiary/ associate/joint venture company nor any other company has become subsidiary/ associate/ jointventure 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 in place anAnti- Sexual Harassment Policy 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 2021.

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.

For and on behalf of the Board of Directors
Place : Vadodara Ashok Malhotra
Date : 6th August 2021 Chairman & Managing Director
DIN : 00120198

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