The Board of Directors present their 34th Annual Report of the Company together withAudited Financial Statements for the year ended 31st March 2021.
(Rs in Lakh)
|Particulars ||Financial Year 2020-21 ||Financial Year 2019-20 |
|Income from Operations ||29.98 ||180.73 |
|Profit / (Loss) before Interest Depreciation and Tax ||(23.80) ||(43.90) |
|Less: Interest Paid ||- ||- |
|Profit / (Loss) before Depreciation and Tax ||(23.80) ||(43.90) |
|Less: Depreciation / Amortisation ||0.26 ||0.15 |
|Profit / (Loss) before & After Tax ||(24.06) ||(44.05) |
During the year under review the Company continued to undertake its business of Tradingof Chemicals However due to volatility in market price of the Raw Materials andslowdown of the world Economy due to COVID 19 the Company too limited risk while doingInternational Business resulting in lower volumes of sales. Accordingly the Company'sIncome from Operations was 29.98 Lakh as against the Income from Operations of Rs.180.73Lakh in the corresponding previous year. The Company incurred a loss of Rs.23.80 Lakhbefore Interest and Depreciation as compared to a Loss of Rs.43.90 Lakh in thecorresponding previous year. The Company incurred Net loss of Rs.24.06 Lakh during theyear as against a loss of Rs.44.05 Lakh in the corresponding previous year.
There has been change in the promoters of the Company pursuant to the acquisition ofthe shares from the existing promoters by Mr. Purshottam Kejriwal and his family members.The Promoters have plans to diversify the business of the Company. The Board subject tothe approval of the members in forthcoming Annual General Meeting of the Company andsubject to the approval of Registrar of Companies Maharashtra Mumbai has proposed tochange the Objects of the Company by Altering the objects clause of the Memorandum ofAssociation of the Company.
Due to the COVID-19 pandemic the Company's business in trading chemicals gotdisrupted. As the situation evolves the Company continues to closely monitor the impactof the COVID-19 pandemic on all aspects of the Company. The second wave of COVID issweeping through the country. This is affecting the economy much deeper than the firstwave. It is also affecting young people. The Government of India can only combat this withrapid vaccinations. The ultimate impact of the COVID-19 pandemic on operating resultscash flows and financial condition is likely to be determined by factors which areuncertain unpredictable and out of the Company's control at this time. The situationsurrounding COVID-19 remains fluid and if disruptions do arise they could adverselyimpact the operations of the Company.
In view of Loss incurred by the Company the Directors regret their inability torecommend any dividend for the Financial Year ended 31st March 2021.
The Company has not accepted any deposits from the public and as such no amount ofprincipal or interest was outstanding as on the balance sheet date.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not availed/given any loans guarantees or investments under provisionsof Section 186 of Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Particulars with respect to the conservation of energy and technology absorption asrequired to be disclosed pursuant to provision of Section 134(3)(m) of the Act read withRule 8(3) of the Companies (Accounts) Rules 2014 are not relevant to the Company. Foreignexchange earnings and outgo as stipulated under Section 134 of the Act read with theCompanies (Accounts) Rules 2014 is set out in the Annexure I to this report.
PARTICULARS OF EMPLOYEES DIRECTORS AND KMP's:
The disclosure on the details of remuneration to Employees and Directors and other KeyManagerial Personnel pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is set out in AnnexureII to this report.
RELATED PARTY TRANSACTIONS:
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is available on thewebsite of the Company at www.pentokey.com. The Policy intends to ensure that properreporting; approval and disclosure processes are in place for all transactions between theCompany and its Related Parties.
All Related Party Transactions are placed before the Audit Committee for review andapproval and are in accordance with the Policy. All transactions entered by the Companywith Related Parties were in ordinary course of business and on arm's length basis.
Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with rule 8(2)of the Companies (Accounts)Rules 2014 is set out in Annexure III to this report.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
In accordance with the applicable provisions of Companies Act 2013 read with InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") all unclaimed dividends along with shares are required to betransferred by the Company to the IEPF after completion of seven (7) years.
The Company had sent individual notices and also advertised in the newspapers seekingaction from the shareholders who have not claimed their dividends for 7 (seven)consecutive years or more. Details of shares/shareholders in respect of which dividend hasnot been claimed are also provided on the website of the Company atwww.pentokey.com/Financial_Info.htm
During the year under review the Company had transferred unclaimed dividends ofRs.534000/- for the FY 2012-13 along with 249568 shares corresponding thereto to theIEPF.
SUBSIDIARIES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiaries and Associates therefore details under FormAOC 1 is not applicable.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review there was no change in the Board of Directors of theCompany. The Board of Directors upon recommendation of the Nomination and RemunerationCommittee appointed Mr. Purshottam Kejriwal and Ms. Jyoti Devi Kejriwal as an additionalDirectors on the Board of the Company with effect from 24th June 2021 and Mr. Arun Goenkaas Additional Director of the Company with effect from 12th August 2021 who shall holdthe office up to the date of ensuing Annual General Meeting. Further the Nomination andRemuneration Committee and the Board have also recommended to the members of the Companythe appointment of Mr. Purshottam Kejriwal Ms. Jyoti Devi Kejriwal and Mr. Arun Goenka asa Non-Executive Non Independent Directors.
As mentioned elsewhere Mr. Purshottam Kejriwal and his family have pursuant to theacquisition of shares from the existing promoters and the open offer has been categorisedas promoters. Hence Mr. Purshaottam Kejriwal and Ms. Jyoti Kejriwal will be categorisedas Promoter Directors.
Mr. Mohan Somanathan Non Executive Non- Independent Director and Mr. ShrinivasMokashi Non Executive NonIndependent Director of the Company resigned from the Board ofthe Company with effect from the conclusion of the meeting of Board of Directors held on24th June 2021; The Board placed on record their sincere appreciation for the immensecontributions made by both Mr. Mohan Somanathan and Mr. Shrinivas Mokashi to the growth ofyour Company during their tenure with the Company.
Mr. Shyam Balsekar Non Executive Independent Director of the Company resigned fromthe Board of the Company with effect from the conclusion of the meeting of Board ofDirectors held on 12th August 2021. The Board placed on record their sincere appreciationfor the immense contributions made by Mr. Shyam Balsekar to the growth of your Companyduring his tenure with the Company.
Mr. Akshay Joshi had resigned as Company Secretary and Compliance officer of theCompany w.e.f. 31st March 2021. Hence pursuant to the recommendation of Nomination andRemuneration Committee Ms. Kiran Jadhav (ACS 50422) was appointed as Company Secretaryand Compliance office of the Company w.e.f. 14th April 2021.
Further Mr. Balachandran Nair Chief Executive Officer (CEO) and Mr. Sunil RaghavChief Financial Officer (CFO) resigned with effect from the end of the working hours of12th August 2021. Pursuant to the recommendation of Nomination and Remuneration CommitteeMr. Rajendra Babulal Gujrathi and Mr. Sanjeev Dubey were appointed as Chief ExecutiveOfficer (CEO) and Chief Financial Officer (CFO) respectively with effect from 13th August2021.
As on the date of this report the Board of Directors comprises of - Five (5) Directorsincluding Two (2) Independent NonExecutive Directors and three (3) Non-ExecutiveNon-Independent Directors. Independent Directors provide their declarations both at thetime of appointment and annually confirming that they meet the criteria of independence asprescribed under Companies Act 2013.
The Company's policy on appointment and remuneration of directors is available onwww.pentokey.com.
MEETINGS OF THE BOARD:
During the financial year 4 (four) meetings of the Board of Directors were held.Particulars of meetings held and attended by each Director are given in the CorporateGovernance Report which forms part of this Annual Report.
NOMINATION & REMUNERATION POLICY:
The remuneration paid to the Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013.
The Board of Directors has formulated and adopted a Policy which lays down a frameworkfor selection and appointment of Directors and Senior Management and for determiningqualifications positive attributes and independence of Directors in accordance with theprovisions of Companies Act 2013 read with the Rules issued thereunder and the ListingRegulations.
The salient features of the Policy are set out in the Corporate Governance Reportwhich forms part of this Annual Report and is available on the website of the Company atwww.pentokey.com
The composition of the Audit Committee is in alignment with the provisions of Section177 of the Companies Act 2013 read with the Rules issued thereunder. The members of theAudit Committee are financially literate and have experience in financial management.
During the year four meetings were held. The details on the Audit Committee meetingsare set out in the Corporate Governance Report which forms part of this Annual Report.
Details of all the other Committees of the Board are provided in the CorporateGovernance Report which forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT:
Pursuant to clause 15 (2) (a) of Listing Regulations compliance with CorporateGovernance provisions as specified in Regulations 17 to 27 and clauses (b) to (i) ofsub-regulation (2) of Regulation 46 and para C D and E of Schedule V of ListingRegulations is not applicable to the Company; however as a matter of good CorporateGovernance practice and in compliance with Regulation 34 of the Listing Regulations aseparate report on Corporate Governance along with a Compliance Certificate from theStatutory Auditor forms an integral part of this report and is set out in Annexure IV
Evaluation of performance of all Directors is undertaken annually. The Company hasimplemented a system of evaluating performance of the Board of Directors and of itscommittees and individual Directors on the basis of a structured questionnaire whichcomprises evaluation criteria taking into consideration various performance relatedaspects.
The Directors carried out the annual performance evaluation of the Board Committees ofBoard and individual Directors along with assessing the quality quantity and timelinessof flow of information between Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties. The details of the evaluationprocess are set out in the Corporate Governance Report which forms part of this AnnualReport.
DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors state that:
(a) In the preparation of the annual financial statements for the year ended 31stMarch 2021 the applicable Accounting Standards have been followed along with properexplanation to material departures;
(b) 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 31st March 2021 and of the loss ofthe Company for the year ended 31st March 2021;
(c) Proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities.
(d) The annual financial statements have been prepared on a going concern basis.
(e) Appropriate internal financial controls were followed by the Company and that suchinternal financial controls are adequate and operating effectively; and
(f) Proper systems to ensure compliance with the provisions of all applicable laws andthat such system are adequate and operating effectively.
Pursuant to the provisions of Section 134(3)(a) of the Act the Annual Return in formMGT-7 for the Company for the financial year 2020-21 is available on the Company's websiteat https://www.pentokey.com
AUDITORS AND AUDITORS REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard had appointed Mr. A. M. Bhat Practicing Company Secretary (Membership No. 1560) asthe Secretarial Auditor of the Company to conduct an audit of the Secretarial Records forfinancial year ending 31st March 2021.
The Secretarial Audit Report for financial year ending 31st March 2021 is annexed asAnnexure V to this Annual Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
Further under Regulation 24A of Listing Regulations the Company was not required tosubmit the Annual Secretarial Compliance Report as the Company falls under the criteria asspecified under Regulation 15 (2) of Listing Regulations.
M/s. Verma Mehta & Associates Chartered Accountants (Firm Registration No.112118W) were appointed as Statutory Auditors of the Company at its 31st Annual GeneralMeeting held on 21st September 2018 to hold office till the conclusion of the 36thAnnual General Meeting to be held in the year 2023.
The Auditor's Report for the financial year ended 31st March 2021 on financialstatements of the Company is a part of this report and is annexed as Annexure VI to thisAnnual Report The Auditor's Report does not contain any qualification reservation oradverse remark on the financial statements for the year ended 31st March 2021.
The provisions of Cost Audit as prescribed under Section 148 of the Act are notapplicable to the Company. MANAGEMENT DISCUSSIONS AND ANALYSUS (MD&A):
The Company is currently doing chemical trading activities. Since there was a shortageof Acetic Acid and due to volatile prices and foreign exchange fluctuations the Companyis now cautiously trading in Chemicals.
The detailed MDA is provided as Annexure VIII and forms a part of this report.
Pursuant to clause 15 (2) (a) of Listing Regulations compliance with CorporateGovernance provisions as specified under Regulations 17 to 27 and clauses (b) to (i) ofsub-regulation (2) of Regulation 46 and para C D and E of Schedule V of ListingRegulations are not applicable to the Company; however the Company operates with welldefined risk management policy to identify measures to mitigate various business risks.The copy of the Risk Management Policy is uploaded on the website of the Company athttp://www.pentokey.com/pdf/Risk-Management-Policy.pdf This framework seeks to createtransparency minimize adverse impact on the business objective and enhance the Company'scompetitive advantage and thus helps is managing market credit and operations risks.
In compliance with the provisions of Section 177 the Company has established a VigilMechanism Policy which includes a Whistle Blower Policy for its Directors and Employeesto provide a framework to facilitate responsible and secure reporting of concerns ofunethical behaviour instances of financial irregularities mala-fide manipulation ofCompany's records or violation of the Company's Code of Conduct & Ethics. Thismechanism also provides for adequate safeguards against victimization ofdirector(s)/employee(s) of the Company who report unethical practices or irregularities.
The Vigil Mechanism Policy is uploaded on the website of the Company athttp://www.pentokey.com/pdf/Vigil-Mechanism- Policy-New.pdf
PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated persons of the Companyas per SEBI (Prohibition of Insider Trading) Regulations 2015.
During the year the Company has amended the Insider Trading Policy in line withSecurities and Exchange Board of India (Prohibition of Insider Trading) (Amendment)Regulations 2018. The amended policy is available on the website of the Company at
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:
As per the requirement of Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (Act') and Rules made thereunder yourCompany has constituted Internal Complaints Committee (ICC). No complaints have beenreceived on Sexual harassment for the financial year ending 31st March 2021. The Companyis committed to providing a safe and conducive work environment.
CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to Section 135 of the Companies Act 2013 read with rules of Companies(Corporate Social Responsibility Policy) Rules 2014 the Company is not required to frameCorporate Social Responsibility Committee and Corporate Social Responsibility Policy.
INTERNAL FINANCIALS CONTROLS:
The Company has a sound internal control system which ensures monitoringimplementation of the action plans emerging out of internal audit findings. The terms ofreference of the Audit Committee includes reviewing the effectiveness of the internalcontrol environment. The Audit Committee of the Board addresses issues raised by both theInternal Auditors and the Statutory Auditors of the Company. During the financial yearunder review no material or serious observation has been received from the Statutory orInternal Auditors of the Company.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There are no material changes and commitments affecting the financial position of theCompany which have occurred from the end date of the financial year upto the date of thisBoard's Report.
MATERIAL CHANGES AFTER THE FINANCIAL YEAR END 31ST MARCH 2021:
The Promoters of the Company M/s. Sakarwadi Trading Company Private Limited M/s.Somaiya Agencies Private Limited M/s Godavari Biorefineries Limited and M/s JasmineTrading Company Private Limited; had entered into a Share Purchase Agreement with Mr.Purshottam Kejriwal ("Acquirer 1") Mr. Vibhu Kejriwal ("Acquirer 2")Mr. Shantanu Purshottam Kejriwal ("Acquirer 3") And Mr. Kostuv PurshottamKejriwal ("Acquirer 4") for selling 3970573 shares of Pentokey Organy (India)Ltd. equivalent to 63.30% and subject to actual response the acquirers may purchase600000 shares of Jasmine Trading Company Privet Limited. Pursuant to the saidarrangement for purchase of shares an Open Offer was triggered by the Acquirers on 14thMay 2021; The Acquirers had given Publication of DPS in the newspaper on 21st May 2021and had circulated Draft Letter of Offer to acquire 25.51% equivalent to 1599850 sharesat a price of Rs.8.75 per Equity Shares and the last day for revising the Offer Price/number of shares was 6th July 2021. The Open offer was closed on 23rd July 2021 and Mr.Purushottam Kejriwal has acquired 386 shares which were tendered through the Open Offer.
As per the terms of Share Purchase Agreement dtd. 14th May 2021 M/s. Sakarwadi TradingCompany Private Limited M/s. Somaiya Agencies Private Limited M/s. GodavariBiorefineries Limited and M/s. Jasmine Trading Company Private Limited had ceased to bethe Promoters of the Company and the Acquirer Mr. Purshottam Kejriwal ("Acquirer1") Mr. Vibhu Kejriwal ("Acquirer 2") Mr. Shantanu Purshottam Kejriwal("Acquirer 3") and Mr. Kostuv Purshottam Kejriwal ("Acquirer 4") havebecome the new promoters of the Company. The Company will make an application to theconcern Stock Exchange for reclassification of old Promoters into Public Catagary.
As per the terms of Share Purchase Agreement dtd. 14th May 2021 M/s. Sakarwadi TradingCompany Private Limited M/s. Somaiya Agencies Private Limited M/s. GodavariBiorefineries Limited and M/s. Jasmine Trading Company Private Limited had ceased to bethe Promoters of the Company and the Acquirer Mr. Purshottam Kejriwal ("Acquirer1") Mr. Vibhu Kejriwal ("Acquirer 2") Mr. Shantanu Purshottam Kejriwal("Acquirer 3") and Mr. Kostuv Purshottam Kejriwal ("Acquirer 4") hasbecome the new promoters of the Company. The Company will The necessary disclosure in theLetter of Offer (LOO) dated 25th June 2021 has been made that Upon completion of openoffer formalities seller shall be denotified as promoters pursuant to regulation 31A(10)of SEBI(LODR) Regulations 2015 as amended and relinquish management control of the TargetCompany in favour of the Acquirer. Therefore as per the provisions of sub-regulation 10 ofRegulation 31A of SEBI (listing obligations and disclosure requirements) Regulation 2015as amended in case of reclassification pursuant to an open offer or a scheme ofarrangement the provisions of clause (a) of sub-regulation (3) and clauses (a) and (b) ofsub-regulation (8) of this regulation shall not apply if the intent of the erstwhilepromoter(s) to reclassify has been disclosed in the letter of offer or scheme ofarrangement. Also provisions or Regulation 31A(3)(c)(i) shall not apply in case ofreclassification pursuant to an open offer.
SECRETARIAL STANDARDS ISSUED BY ICSI:
The Company is in compliance with all the applicable Secretarial Standards as specifiedby the Institute of Company Secretaries of India (ICSI).
INDIAN ACCOUNTING STANDARDS:
The Ministry of Corporate Affairs (MCA) on 16th February 2015 notified that IndianAccounting Standards (Ind AS) are applicable to certain classes of Companies from 1stApril 2016 with a transition date of April 12015. Ind AS has replaced the previousIndian GAAP prescribed under Section 133 of the Companies Act 2013 ("the Act")read with Rule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicable to theCompany from 1st April 2017.
RISKS AND CONCERNS:
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The main risksinter alia include strategic risk operational risk financial risk and compliances &legal risk.
Certain statement in the management discussion and analysis may be forward lookingwithin the meaning of applicable securities laws and regulations and actual results maydiffer materially from those expressed or implied. Factors that would make differences toCompany's operations include competition price realization changes in governmentpolicies and regulations tax regimes economic development and other incidental factors.
The Board of Directors place on record appreciation for the exemplary contribution madeby the employees of the Company at all levels and conveys its appreciation for ourbusiness associates and shareholders for their continued support to the Company.
|For and on behalf of the Board of Directors For Pentokey Organy (India) Limited || |
|Mr. Purshottam Kejriwal ||Ms. Jyoti Devi Kejriwal |
|Director ||Director |
|(DIN: 02476745) ||(DIN: 06560100) |
|Date : 12th August 2021 || |
|Place : Mumbai || |