The Members of
Paramount Communications Limited
Your directors are pleased to present the Twenty Sixth Annual Report on the Businessand operations of the Company together with the Audited Financial Statements for the yearended 31st March 2020.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended March 31 2020 is summarisedbelow:
( Rs in Lakhs)
|Particulars ||Year ended 31st March 2020 ||Year ended 31st March 2019 |
|Net Revenue including Other Income ||60889 ||61777 |
|Profit/ (Loss) before Interest Depreciation Tax and Exceptional items ||4770 ||4550 |
|Interest ||1030 ||770 |
|Depreciation & Amortization expenses ||1105 ||864 |
|Profit/(Loss) before Tax and Exceptional Items ||2635 ||2916 |
|Tax Expenses ||- ||- |
|Profit/(Loss) after Tax and Exceptional Items ||2635 ||2916 |
|Other Comprehensive Income ||(21) ||1 |
|Total Net Profit/(Loss) for the year including other Comprehensive Income ||2614 ||2917 |
During the financial year ended 31st March 2020 your Company recorded netrevenue Rs 60889 lakhs as compared to the total revenue of Rs 61777 lakhs recordedduring the previous financial year ended 31st March 2019. The total Net Profitincluding other comprehensive Income of the Company for the financial year ended 31stMarch 2020 was Rs 2614 lakhs as against Rs 2917 lakhs during previous year 2018-2019.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the provisions of the Act and Listing Regulations read with IndAS-110-Consolidated Financial Statement the consolidated audited financial statementforms part of the Annual Report.
2. SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
The Company does not have any Indian subsidiary company. However the Company has thefollowing direct wholly owned subsidiaries located outside India: a. *Paramount HoldingsLimited incorporated under the laws of Cyprus; b. **AEI Power Cables Limitedincorporated under the laws of England and Wales; c. 06196375 Cables Limited (formerlyknown as AEI Cables Limited) which was a subsidiary company is "inAdministration" (as per UK Laws) w.e.f 28th February 2014.
1) * The management of Paramount Holdings Limited are taking steps to liquidate theCompany in accordance with the applicable laws of the country.
2) **AEI Power Cables Limited United Kingdom has ceased to trade and became dormantw.e.f. 1st April 2017. The management of the Company intends to keep thecompany in existence for use in foreseeable future as and when required.
The Consolidated financials include un-audited financials of Paramount HoldingsLimited Cyprus and un-audited financials of AEI Power Cables Ltd. United Kingdom for theyear ended 31st March 2020.
The Company has no Joint venture with any other Company in India or abroad.
3. TRANSFER TO RESERVES
During the Period under review your Company does not propose to transfer funds to theGeneral Reserves.
Your directors do not recommend declaration of any dividend for the financial year2019-2020.
5. FUTURE OUTLOOK
Government initiatives such as Power for All' Atal Mission for Rejuvenation andUrban Transformation (AMRUT) thrust on expansion of Railway Network and Optical Fibertelecom connectivity across the country etc. will support the growth of wires and cables.As per the Finance Minister's Budget Speech 2020-21 the government has envisaged aninvestment of Rs 102 lakh crore for infrastructure development over the next 5 years.Moreover Rs 50 Lakh crores is earmarked for Indian Railway network between 2018 to 2030.Digital India BharatNet and introduction of 5G technology in the mobile spectrum shallcreate substantial demand for Optical Fibre Cables. Your Company enjoys a strongcompetitive edge being among the top national players in Telecom Railways and PowerSectors and shall be ideally positioned to take full advantage of the tremendousinvestment for the country's infrastructure.
The Company's focus for the future shall be to sustain and increase the momentum in itsmajor business segments namely Optical Fibre cables Railway Signalling cables and Powercables etc. by leveraging its inherent strength of possessing almost all the prestigiouscustomer approvals and pre-qualifications in the country based on its long track record ofsuperior quality and timely delivery coupled with continuous product development as perevolving industry standards.
We remain committed to drive increased sales and profitability through extending reachof our product offerings. Our sound financial position provides us ample scope to expandour capacities. Your Company's vision for the coming year is to be a key participant inevery relevant initiative of the Government so as to boost its growth prospects.
6. DETAILS OF MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR TILL THE DATEOF THIS REPORT
Global Pandemic - COVID-19
The Outbreak of Coronavirus (COVID-19) Pandemic globally and in India has had an impacton almost all entities directly or indirectly causing significant disturbance andslowdown of economic activity. The COVID-19 Pandemic developed rapidly into a globalcrisis forcing Indian Government to enforce nationwide lockdown from March 24 2020 for21 days which further got extended till May 3 2020 to prevent the community spread ofCOVID-19 in India. Various local restrictions and prohibitions are still continuing inseveral parts of the country resulting in disturbances in the supply chain and otheraspects including manpower.
During April 2020 the Company has partially commenced production and supply of goodsat its manufacturing locations after obtaining permission of the appropriate governmentauthorities and post completion of mandatory safety checks and training of personnel onphysical distancing health & hygiene as per the guidelines stipulated by the Ministryof Home Affairs of the Government of India.
Change in Capital Structure
During the year under review the Company has issued and allotted in aggregate22400000 warrants at a price of Rs 9.81/- to Promoter and Promoter Group onPreferential Basis. The Allottee(s) has paid the 25% of the warrant issue price asprescribed by the SEBI (ICDR) Regulations at the time of allotment of warrants.
The Share Allotment Committee of the Board has issued and allotted 12350000 equityshares of face value of Rs 2/- each consequent to conversion of warrants to the eligibleallottees from Promoter Group on payment of 75% balance amount. Accordingly the paid-upshare capital of the Company has increased from 171783965 Equity Shares of face valueof Rs 2/- each to 184133965 Equity Shares of face value of Rs 2/- each.
7. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 dividend whichremains unpaid or unclaimed for a period of seven years from the date of its transfer tothe unpaid dividend account is required to be transferred by the Company to InvestorEducation and Protection Fund (IEPF) established by the Central Government under theprovisions of Section 125 of the Companies Act 2013. During the year under review theCompany was not required to transfer any amount to the Investor Education and ProtectionFund.
In terms of the requirement of Section 124 (6) of the Companies Act 2013 read withExplanation to Rule 6 (1) of Investor Education and Protection Fund ( IEPF) Authority(Accounting Audit Transfer and Refund) Rules 2016 ("the Rules") which hascome into effect from 20th August 2019 all equity shares in respect of whichdividend has been transferred to Investor Education and Protection fund on or before 7thSeptember 2016 shall also be transferred by the Company to the IEPF Account establishedby the Central Government.
The Company has sent individual communication to the concerned shareholders whoseshares are liable to be transferred to IEPF Account as per the said Rules. The details ofsuch shareholders is displayed on the website of the Companyhttp://www.paramountcables.com/.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL a) Composition
i) Your Company's Board has an optimum combination of Executive Non-executive andIndependent Directors with two women Directors as per the requirements of Regulation 17of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBIListing Regulations') as on date. The composition of the Board and the IndependentDirectors of the Company meet all the criteria mandated by SEBI Listing Regulations 2015and the Companies Act 2013.
ii) None of the Whole-time Key Managerial Personnel (KMP) of the Company is holdingoffice in any other Company as a Key Managerial Personnel.
iii) Further none of the Directors / KMP of the Company is disqualified under any ofthe provisions of the Companies Act 2013 and relevant Regulations of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
b) Change in Director(s) and Key Managerial Personnel
In accordance with the provisions of the Act and the Company's Articles of AssociationMr. Sandeep Aggarwal (DIN 00002646) Managing Director of the Company will retire byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment.
The Board of Directors has approved:
i) Re-appointment of Mrs. Malini Gupta as a Non-Executive Independent Director of theCompany for a further term of five years effective from April 01 2020;
ii) Appointment of Mrs. Praveena kala as a Non - Executive Independent Director of theCompany for a period of 5 (five) years in terms of the provisions of section 149 of theCompanies Act 2013.
iii) Re-appointment of Mr. Sanjay Aggarwal as Whole Time Director designated asChairman & CEO for a further period of three years effective March 01 2021; and
iv) Re-appointment of Mr. Sandeep Aggarwal as Managing Director for a further period ofthree years effective March 01 2021 The Board of Directors on the recommendation of theNomination and remuneration Committee commends their appointment/re-appointment at theensuing AGM.
The Company has received declarations from all the Independent Directors of the Companyconfirming that:
i) They meet the criteria of Independence prescribed under the Act and the ListingRegulations and
ii) They have registered their names in the Independent Directors' Databank.
iii) They have also confirmed that they have complied with the Company's Code ofBusiness Conduct & Ethics.
In compliance with the provisions of Section 149 152 Schedule IV and other applicableprovisions if any of the Companies Act 2013 read with Companies (Appointment andQualification of Directors) Rules 2014 the independent directors of the Company viz. Mr.Vijay Bhushan Mr. Vijay Maheshwari Mrs. Malini Gupta and Mrs. Praveena Kala holds officefor a fixed term of five (5) years and are not liable to retire by rotation.
The above proposals for appointment and reappointment forms part of the notice of the26th Annual General Meeting and the relevant Resolutions are recommended foryour approval therein.
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 brief resume of the directors proposed to be appointed/ reappointed the nature ofexpertise in specific functional areas names of the companies in which they holdsdirectorship(s) and membership/ chairmanship of Board Committees shareholding andrelationships between directors inter-se are forming part of the Notice of Annual GeneralMeeting.
9. KEY MANAGERIAL PERSONNEL
Ms. Tannu Sharma Company Secretary and Chief Compliance officer of the Company hadresigned from the services of the Company with effect from closing hours of 31stMay 2019.
Consequent to Ms. Tannu Sharma's resignation the Board had appointed Ms. Rashi Goel asCompany Secretary and Compliance officer of the Company with effect from 1stJune 2019.
Mr. Sanjay Aggarwal Chairman & CEO Mr. Sandeep Aggarwal Managing Director Mr.Shambhu Kumar Agarwal Chief Financial Officer and Ms. Rashi Goel Company Secretary &Compliance Officer are the Key Managerial
Personnel of your Company under the provisions of Section 2(51) and Section 203 of theCompanies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
10. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
During the year 4 (Four) Board Meetings and 4 (Four) Audit Committee Meetings wereconvened and held. The details of these meetings are given in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013.
11. BOARD EVALUATION
The Company has a policy for performance evaluation of the Board Committees and otherindividual Directors (including Independent Directors) which include criteria forperformance evaluation of Non-Executive Directors and Executive Directors.
The evaluation process focused on various aspects of the functioning of the Board andCommittees such as composition of the Board and Committees experience and competenciesperformance of specific duties and obligations governance issues etc. The guidance noteissue by SEBI on Board Evaluation was duly considered while conducting the evaluationexercise. Separate exercise was carried out to evaluate the performance of individualDirectors on parameters such as attendance contribution and independent judgement.
12. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that :
i) In the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departure from the same;
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2020 and of the profit ofthe Company for the year ended on that date;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
iv) The Directors have prepared the annual accounts on a going concern basis;
v) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
vi) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
13. SECRETARIAL STANDARDS
The Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectively.
14. NOMINATION AND REMUNERATION POLICY
The Company has framed a Nomination and Remuneration Policy pursuant to Section 178 ofthe Companies Act 2013 and Regulation 19(4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Specified in Part D of the Schedule II). The detailedNomination & Remuneration Policy is also available on the website of the Company at www.paramountcables.comunder Investor Relations Section.
15. ANNUAL RETURN
In terms of the provisions of Section 134(3)(a) read with 92(3) of the Companies Act2013 and the relevant rules made thereunder a copy of the Annual return as prescribedunder Section 92 of the Companies Act 2013 as amended shall be made available on thewebsite of the Company www.paramountcables.com under the link https://paramountcables.com/wp-content/uploads/2020/09/ Extract-of-Annual-Return-MGT-9.pdf
16. RISK MANAGEMENT
As per the requirements of Section 134(3)(n) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasconstituted a Risk Management Committee to frame implement and monitor the riskmanagement plan for the Company .The Committee periodically monitors and assesses the riskmanagement plan and ensure its effectiveness along with the cost of treating risk andincorporates risk treatment plans in its strategy business and operational plans.
Further details on the key risks identified and their mitigations are covered inManagement's Discussion and Analysis section which forms part of the Annual Report.
17 INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY.
In the opinion of the Board your Company has in place an adequate system of internalcontrol commensurate with its size and nature of business. This system provides areasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes safeguarding of assets of the Company and ensuringcompliance with corporate policies. Assurance to the Board on the effectiveness ofInternal Financial control through Internal Audit function and submission of InternalAudit Report to the Audit Committee of Board which reviews and approves performance ofinternal audit function and ensures the necessary checks and balances that may need to bebuilt into the control system.
18. INDUSTRIAL RELATIONS
Paramount is an equal opportunities employer. The Company does not discriminate ongrounds of age gender colour race ethnicity language caste creed economic orsocial status or disability. We handle global preferences and mindsets of both internaland external customers.
The Company humbly acknowledges employees contributions with best compensation andbenefits that appropriately reward performance. Pay revisions and other benefits aredesigned in such a way to compensate good performance of the employees of the Company andmotivate them to do better in future.
During the period under review your Company enjoyed healthy cordial and harmoniousrelationship with workers and employees at all levels.
19. RELATED PARTY TRANSACTIONS
During the financial year the Company has not entered into any materially significantrelated party contracts/ arrangements or transactions with the Company's promotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. All the contracts/arrangements or transactions entered intoby the Company with Related party(ies) are in conformity with the provisions of theCompanies Act 2013 and on an arm's length basis and do not attract the provisions ofSection 188 of the Companies Act 2013 and Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
During the year 2019-2020 pursuant to Section 177 of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 all Related PartyTransactions were placed before the Audit Committee and also for the Board approvalwherever required. Prior/ omnibus approval of the Audit Committee is generally obtainedfor the transactions which are of a foreseen and repetitive nature and these transactionsare reviewed by the Audit Committee on quarterly basis.
The policy on dealing with Related Party Transactions as approved by Board is put up onthe Company's website and can be accessed at www.paramountcables.com.
The Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 is set out as "Annexure-A" to thisreport.
Members may refer Note 47 to the Standalone Financial Statement which sets out relatedparty disclosures pursuant to Ind AS.
20. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism and a Whistle- Blower policy inaccordance with provisions of the Act and Listing Regulations. The Audit Committeeperiodically review the complaints and incidents if any. Protected disclosure can be madeby a whistle blower through an e-mail or letter to the chairman of the Audit Committee.The Vigil Mechanism and Whistle-blower policy is put up on the Company's website at www.paramountcables.com.
21. AUDITORS AND AUDITORS REPORT
a) Statutory Auditors:
P. Bholusaria & Co. Chartered Accountants was appointed as Auditors of the Companyfor a term of 5 (five) consecutive years at the AGM held on August 17 2017. The Auditorshave confirmed that they are not disqualified from continuing as Auditors of the Company.
The Notes on Financial Statement referred to in the Auditors' Report areself-explanatory. The Auditors' Report does not contain any qualification reservation oradverse remark.
b) Cost Auditors
As per Section 148 read with Companies (Audit and Auditors) Rules 2014 and otherapplicable provisions if any of the Companies Act 2013 the Board of Directors of theCompany have appointed M/s. Jain Sharma & Associates Cost Accountants as the CostAuditor of the Company for the financial year 2020-2021 on the recommendations made by theAudit Committee. The remuneration proposed to be paid to the Cost Auditor would beRs50000/- (Rupees Fifty Thousand only) and out of pocket expenses plus taxes. Theremuneration is subject to the ratification of the members in terms of Section 148 readwith Rule 14 of the Companies (Audit and Auditors) Rules 2014 and is accordingly placedfor your ratification.
The Company has received a letter from their firm to the effect that theirre-appointment would be within the limits prescribed under Section 141(3)(g) of theCompanies Act 2013 and that they are not disqualified for such re-appointment within themeaning of Section 141 of the Companies Act 2013.
c) Secretarial Auditor
The Board has appointed Mr. Abhishek Mittal Practicing Company Secretary to conductSecretarial Audit for the financial year 2019-20. The Secretarial Audit Report for thefinancial year ended March 31 2020 is annexed herewith and marked as Annexure-B tothis Report.
d) Annual Secretarial Compliance Report
A Secretarial Compliance Report for the financial year ended 31st March 2020 oncompliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunderwas obtained from Nitin Gupta Company Secretary in Whole Time Practice and submitted tothe stock exchange.
22. DETAILS IN RESPECT OF FRAUD REPORTED BY THE AUDITORS
There were no instances of fraud reported by the auditors.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Over the years the Company has focused on several corporate social responsibilityprogrammes like Empowering Children and Women Promoting Health & Sanitation andNurturing Communities. However the provisions of the Act related to CSR and Companies(Corporate Social Responsibility Policy) Rules 2014 are not applicable to the Company.
24. LOANS GUARANTEE(S) OR INVESTMENT(S)
During the year your Company has duly complied with the provisions of section 186 ofthe Companies Act 2013 and no loan and guarantee was granted by the Company under
Section 186 of the Companies Act 2013. The particulars of the investments made by theCompany are given in the notes to the financial statements.
25. ENVIRONMENT HEALTH AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources. As part of the legal responsibility and zero tolerance towardssexual harassment at the workplace a policy for prevention of Sexual Harassment has beenadopted by the Company.
In order to comply with provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder the Companyhas formulated and implemented a policy on prevention prohibition and redressal ofcomplaints related to sexual harassment of women at the workplace. An Internal ComplaintCommittee (ICC) has been set up in compliance with the said Act. During the year therewas no complaint lodged with the Internal Complaint Committee formed under "TheSexual Harassment of Women at Workplace.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
As required under Section 197(12) of the Act read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the details of theratio of the remuneration of each director to the median employee's remuneration and suchother details as prescribed therein are given in "Annexure-C" which isattached hereto and forms a part of this Report.
In terms of the provisions of Section 197 (12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee is covered under the purview of the aforesaid Section/Rule.
27. UTILISATION OF PROCEEDS OF PREFERENTIAL ALLOTMENT OF WARRANTS
The funds raised through preferential allotment of warrants to Promoter/Promoter Groupconvertible into equity shares have been utilized as per the objects / purpose of thepreferential allotment as stated in the Explanatory statement of the Postal Ballot Noticedated 08.11.2019 of the Company and there was no deviation in the utilization of proceeds.The details of utilization of proceeds are as under:
|Original Object ||Modi ed Object if any ||Original Allocation (Rs) ||Modi ed allocation if any ||Funds Utilised ||Amount of Deviation/ Variation if any |
|The Company has utilized the funds for Capital Expenditure for expansion and modernization of Business Activities working Capital Requirement and R & D Expenditure ||Not Applicable ||14.59 crores ||Not Applicable ||14.59 crores ||Not Applicable |
28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as "Annexure-D"and forms part of this Report.
The Company constantly strives for maintenance and improvement in quality of itsproducts and entire Research & Development activities are directed to achieve theaforesaid goal.
29. CORPORATE GOVERNANCE
The Company is committed to adheres to the Corporate Governance requirements set out bythe Securities and Exchange Board of India ("SEBI"). The report on CorporateGovernance as stipulated under the Listing Regulations forms part of the Annual Report.The requisite certificate from the Auditors of the Company confirming compliance with theconditions of Corporate Governance is attached to the report on Corporate Governance.
30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as "Listing Regulations") is provided in aseparate section and forms an integral part of this Report.
31. ISO CERTIFICATION
The Company holds ISO 9001:2015 and ISO 14001:2015 certifications for both of itsplants at Khushkhera Rajasthan and Dharuhera Haryana. In addition to this the Companyis certified by BASEC and LPCB for supply of its products in the European Market.
All insurable interest of the Company including inventories buildings and plant &machinery are adequately insured.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a) Details relating to deposits covered under Chapter V of the Act.
b) Issue of equity shares with differential rights as to dividend voting or otherwise.
c) Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
d) Neither the Managing Director nor the Whole Time Director of the Company receivesany remuneration or commission from any of its subsidiaries.
e) No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
f) There has been no change in the nature of business of the Company.
34. ACKNOWLEDGMENT AND APPRECIATION
The Board of Directors wish to place on record its deep sense of appreciation for thecommitted services by all the employees of the Company. The Board of Directors would alsolike to express their sincere appreciation for the assistance and co-operation receivedfrom the government and regulatory authorities banks customers vendors and membersduring the year under review.