The Board of Directors present their 33rd Annual Report of the Company together withAudited Financial Statements for the year ended 31st March 2020.
| || ||(Rs. in Lakh) |
|Particulars ||Financial Year 2019-20 ||Financial Year 2018-19 |
|Income from Operations ||180.73 ||948.14 |
|Exceptional Item ||- ||97.07 |
|Profit/(Loss) before Interest Depreciation and Tax ||(43.90) ||31.76 |
|Less: Interest Paid (Net) ||- ||0.66 |
|Profit/(Loss) before Depreciation and Tax ||(43.90) ||31.10 |
|Less: Depreciation/Amortisation ||0.15 ||0.28 |
|Profit/(Loss) before Tax ||(44.05) ||30.82 |
|Less: Tax Expense ||- ||(0.35) |
|Net Profit/(Loss) after Tax ||(44.05) ||31.17 |
During the year under review the Company continues to undertake its business of Tradingof Chemicals. However due to volatility in market price of the Raw Materials and slowdown of the world Economy the Company has taken limited Risk while doing the InternationalBusiness. Further the Company has formulated the strategy to import the key raw materialsfor distribution and expected to gain the market share in the ensuing year. Accordinglythe Company's Income from Operations was Rs.180.73 Lakh as against the Income fromOperations of Rs.948.14 Lakh in the corresponding previous year. The Company incurred aloss of Rs.43.90 Lakh before Interest and Depreciation as compared to a profit of Rs.31.76Lakh in the corresponding previous year. The Company incurred Net loss of Rs.44.05 Lakhduring the year as against a profit of Rs.31.17 Lakh in the corresponding previous year.
In view of Loss incurred by the Company the Directors regret their inability torecommend any dividend for the Financial Year ended 31st March 2020.
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 into by theCompany with Related Parties were in ordinary course of business and on arm's lengthbasis.
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 all unclaimed dividends forthe FY 2011-12 along with shares corresponding thereto to the IEPF.
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:
In accordance with the provisions of Section 152 and other applicable provisions ifany of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 including any statutory modification(s) or re enactment(s) thereoffor time being in force; Mr. Shrinivas Mokashi Non-Executive Non-independent Director isliable to retire by rotation at the ensuing Annual General Meeting and being eligible haveoffered himself for re-appointment.
During the year under review Mr. Devendra Shrimanker & Mr. Shyam Balsekar werereappointed as the Independent Directors of the Company for the further period of 5 (Five)years at the AGM held on 26th September 2019. Further Ms. Surabhi Vartak had resigned asCompany Secretary and Compliance officer of the Company w.e.f. 15th November 2019. Hencepursuant to the recommendation of Nomination and Remuneration Committee Mr. Akshay Joshi(ACS 34724) was appointed as Company Secretary and Compliance office of the Company w.e.f.2nd January 2020.
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the Act and the ListingRegulations.
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 provisions of Section 177of the Companies Act 2013 read with the Rules issued thereunder. The members of the AuditCommittee are financially literate and have experience in financial management.
The Audit Committee comprises of Mr. Devendra Shrimanker Mr. S. Mohan Mr. ShyamBalsekar and Ms. Prajakta Shidhore. All recommendations made by Audit Committee wereaccepted by the Board of Directors of the Company. Further details on the Audit Committeeare 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 2020 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 2020 and of the loss ofthe Company for the year ended 31st March 2020;
(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.
EXTRACT OF ANNUAL RETURN:
The extract of the Annual Return of the Company as on 31st March 2020 in Form MGT-9 inaccordance with Section 92(3) read with Rule 12 of the Companies (Management andAdministration) Rules 2014 is set out in Annexure V to this report and the same isalso available on the website of the Company 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. Anirudha M. Bhat Practicing Company Secretary (Membership No.1560) as the Secretarial Auditor of the Company to conduct an audit of the SecretarialRecords for financial year ending 31st March 2020.
The Secretarial Audit Report for financial year ending 31st March 2020 is annexed as AnnexureVI 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.
The Auditor's Report for the financial year ended 31st March 2020 on financialstatements of the Company is a part of this report and is annexed as Annexure VII tothis Annual Report The Auditor's Report does not contain any qualification reservation oradverse remark on the financial statements for the year ended 31st March 2020.
The provisions of Cost Audit as prescribed under Section 148 of the Act are notapplicable to the Company.
MANAGEMENT DISCUSSIONS AND ANALYSIS:
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.
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 indentify 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 athttp://www.pentokey.com/pdf/Code_of_Practices_and_Procedures_for_Fair_Disclosure_of_Unpublished_Price_Sensitive_Information_(Amended).pdf
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 2020. 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. However The Company's operations were impacted in the month of March2020 due to nationwide lockdown announced by the Government of India in view of COVID-19.Due to compulsory Lockdown imposed by the Government the Company had also experiencedreduction in sale during the 1st Quarter of the Financial Year 2020-21. However owing tocertain relaxation granted by the Government from 1st June 2020 your Directors areexpecting that the sales of the Company will gradually return to its normal in the ensuingquarters of the Financial Year 2020-21.
The shares of the Company are listed at the BSE Limited (BSE). The applicable annuallisting fees have been paid to BSE Limited before their due date.
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 also 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. S. Mohan ||Mr. Devendra Shrimanker |
|Director ||Director |
|DIN: 03184356 ||DIN: 00385083 |
|Date : 11th August 2020 || |
|Place : Mumbai || |