The Board of Directors present their 32nd Annual Report ofthe Company together with Audited Financial Statements for the year ended 31st March2019.
| ||Financial Year ||Financial Year |
|Particulars || || |
| ||2018-19 ||2017-18 |
|Income from Operations ||948.14 ||488.43 |
|Exceptional Item ||97.07 ||80.03 |
|Profit / (Loss) before Interest Depreciation and Tax ||31.76 ||37.03 |
|Less: Interest Paid (Net) ||0.66 ||25.89 |
|Profit / (Loss) before Depreciation and Tax ||31.10 ||11.14 |
|Less: Depreciation / Amortisation ||0.28 ||6.26 |
|Profit / (Loss) before Tax ||30.82 ||4.88 |
|Less: Tax Expense ||(0.35) ||3.75 |
|Net Profit / (Loss) after Tax ||31.17 ||1.13 |
The Company's Income from Operations has been increased by Rs.459.71 Lakh to Rs. 948.14 as against the Income from Operations of Rs. 488.43 Lakh in thecorresponding previous year. The Company had a Profit of Rs. 31.76 Lakh before Interestand Depreciation as compared to a profit of Rs. 37.03 Lakh in the corresponding previousyear. The Company earned Net Profit of Rs. 31.17 Lakh during the year as against a profitof Rs. 1.13 Lakh in the corresponding previous year.
In order to conserve the resources of the Comapny the Directors regrettheir inability to recommend any dividend for the Financial Year ended 31st March 2019.
The Company has not accepted any deposits from the public and as suchno amount of principal 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 investmentsunder provisions of Section 186 of Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
Particulars with respect to the conservation of energy and technologyabsorption as required to be disclosed pursuant to provision of Section 134(3)(m) of theAct read with Rule 8(3) of the Companies (Accounts) Rules 2014 are not relevant to theCompany. Foreign exchange earnings and outgo as stipulated under Section 134 of the Actread with the Companies (Accounts) Rules 2014 is set out in the Annexure I tothis report.
PARTICULARS OF EMPLOYEES DIRECTORS AND KMP's:
The disclosure on the details of remuneration to Employees andDirectors and other Key Managerial Personnel pursuant to Section 197 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is setout in Annexure II to this report.
RELATED PARTY TRANSACTIONS:
In line with the requirements of the Companies Act 2013 and ListingRegulations your Company has formulated a Policy on Related Party Transactions which isavailable on the website of the Company at www.pentokey.com. The Policy intends to ensurethat proper reporting; approval and disclosure processes are in place for all transactionsbetween the Company and its Related Parties. All Related Party Transactions are placedbefore the Audit Committee for review and approval and are in accordance with the Policy.All transactions entered into by the Company with Related Parties were in ordinary courseof business and on arm's length basis.
Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act 2013read with rule 8(2) of the Companies (Accounts) Rules 2014 is set out in Annexure III tothis report.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
In accordance with the applicable provisions of Companies Act 2013read with Investor Education and Protection Fund (Accounting Audit Transfer and Refund )Rules 2016 ("IEPF Rules") all unclaimed dividends are required to betransferred by the Company to the IEPF after completion of seven (7) years. During thefinancial year 2019 20 the Company would be transferring unclaimed dividend amountand corresponding shares to IEPF for the financial year ended 31st March 2012. TheCompany had sent individual notices and also advertised in the newspapers seeking actionfrom the shareholders who have not claimed their dividends for 7 (seven) consecutive yearsor more. Details of shares/shareholders in respect of which dividend has not been claimedare also provided on the website of the Company at www.pentokey.com/Financial_Info.htm
SUBSIDIARIES AND ASSOCIATE COMPANIES:
The Company does not have any Subsidiaries and Associates thereforedetails under Form AOC 1 is not applicable.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In accordance with the provisions of Section 152 and other applicableprovisions if any of the Companies Act 2013 read with the Companies (Appointment andQualification of Directors) Rules 2014 including any statutory modification(s) orre-enactment(s) thereof for time being in force; Mr. S. Mohan Non-ExecutiveNon-independent Director is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible have offered himself for re-appointment.
Ms. Prajakta Shidhore & Mr. Shrinivas Mokashi continue to beNon-Executive Independent Director & Non-Executive Non-Independent Director of theCompany respectively.
The first term of office of Mr. Devendra Shrimanker & Mr. ShyamBalsekar as Independent Directors expires on 12th August 2019. Basedon recommendation of Nomination & Remuneration Committee and subject to the approvalof the shareholders the Board has recommended re-appointment of both Mr. DevendraShrimanker & Mr. Shyam Balsekar as Independent Directors of the Company for a secondterm of 5 (five) consecutive years.
The Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed under theAct and the Listing Regulations.
MEETINGS OF THE BOARD:
During the financial year 4 (four) meetings of the Board of Directorswere held. Particulars of meetings held and attended by each Director are given in theCorporate Governance Report which forms part of this Annual Report.
NOMINATION & REMUNERATION POLICY:
The remuneration paid to the Directors is in accordance with theNomination and Remuneration Policy formulated in accordance with Section 178 of theCompanies Act 2013 and Regulation 19 of Listing Regulations.
The Board of Directors has formulated and adopted a Policy which laysdown a framework for selection and appointment of Directors and Senior Management and fordetermining qualifications positive attributes and independence of Directors inaccordance with the provisions of Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations.
The salient features of the Policy are set out in the CorporateGovernance Report which forms part of this Annual Report and is available on the websiteof the Company at www.pentokey.com
The composition of the Audit Committee is in alignment with provisionsof Section 177 of the Companies Act 2013 read with the Rules issued thereunder andRegulation 18 of the Listing Regulations. The members of the Audit Committee arefinancially literate and have experience in financial management.
The Audit Committee comprises of Mr. Devendra Shrimanker Mr. S. MohanMr. Shyam Balsekar and Ms. Prajakta Shidhore. All recommendations made by Audit Committeewere accepted by the Board of Directors of the Company. Further details on the AuditCommittee are set out in the Corporate Governance Report which forms part of this AnnualReport.
Details of all the other Committees of the Board are provided in theCorporate Governance Report which forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT:
Pursuant to clause 15 (2) (a) of Listing Regulations compliance withCorporate Governance provisions as specified in Regulations 17 to 27 and clauses (b) to(i) of sub-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
Evaluation of performance of all Directors is undertaken annually. TheCompany has implemented a system of evaluating performance of the Board of Directors andof its Committees and individual Directors on the basis of a structured questionnairewhich comprises evaluation criteria taking into consideration various performance relatedaspects.
The Directors carried out the annual performance evaluation of theBoard Committees of Board and individual Directors along with assessing the qualityquantity and timeliness of flow of information between Company Management and the Boardthat is necessary for the Board to effectively and reasonably perform their duties. Thedetails of the evaluation process are set out in the Corporate Governance Report whichforms part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors state that:
(a) In the preparation of the annual financial statements for the yearended 31st March 2019 the applicable Accounting Standards have been followed along withproper explanation to material departures; (b) The Directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2019 and of the profits of the Company for the year ended 31stMarch 2019; (c) Proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the 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 systemsto ensure compliance with the provisions of all applicable laws and that such system areadequate and operating effectively.
EXTRACT OF ANNUAL RETURN:
The extract of the Annual Return of the Company as on 31st March 2019in Form MGT-9 in accordance with Section 92(3) read with Rule 12 of the Companies(Management and Administration) Rules 2014 is set out in Annexure V to this reportand the same is also 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 2013read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Board had appointed Mr. A. M. Bhat Practicing Company Secretary(Membership No. 1560) as the Secretarial Auditor of the Company to conduct an audit of theSecretarial Records for financial year ending 31st March 2019. The SecretarialAudit Report for financial year ending 31st March 2019 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 wasnot required to submit the Annual Secretarial Compliance Report as the Company falls underthe criteria as specified under Regulation 15 (2) of Listing Regulations.
M/s. Verma Mehta & Associates Chartered Accountants (FirmRegistration No. 112118W) were appointed as Statutory Auditors of the Company at its 31stAnnual General Meeting held on 21st September 2018 to hold office till theconclusion of the 36th Annual General Meeting.
The Auditor's Report for the financial year ended 31st March 2019on financial statements of the Company is a part of this report and is annexed as AnnexureVII to this Annual Report The Auditor's Report does not contain anyqualification reservation or adverse remark on the financial statements for the yearended 31st March 2019.
The provisions of Cost Audit as prescribed under Section 148 of theAct are not applicable to the Company.
MANAGEMENT DISCUSSIONS AND ANALYSIS:
The Company is currently doing chemical trading activities. Since therewas a shortage of Acetic Acid and due to volatile prices and foreign exchangefluctuations the Company is now cautiously trading in Chemicals.
Pursuant to clause 15 (2) (a) of Listing Regulations compliance withCorporate Governance provisions as specified under Regulations 17 to 27 and clauses (b) to(i) of sub-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 theCompany's competitive advantage and thus helps is managing market credit andoperations risks.
In compliance with the provisions of Section 177 the Company hasestablished a Vigil Mechanism Policy which includes a Whistle Blower Policy for itsDirectors and Employees to provide a framework to facilitate responsible and securereporting of concerns of unethical behaviour instances of financial irregularitiesmala-fide manipulation of Company's records or violation of the Company's Codeof Conduct & Ethics. This mechanism also provides for adequate safeguards againstvictimization of director(s)/employee(s) of the Company who report unethical practices orirregularities.
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 InsiderTrading with a view to regulate trading in securities by the Directors and designatedpersons of the Company as 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(Prevention Prohibition & Redressal) Act 2013 (Act') and Rules madethereunder your Company has constituted Internal Complaints Committee (ICC). Nocomplaints have been received on Sexual harassment for the financial year ending 31stMarch 2019. The Company is committed to providing a safe and conducive work environment.
CORPORATE SOCIAL RESPONSIBILITY:
Pursuant to Section 135 of the Companies Act 2013 read with rules ofCompanies (Corporate Social Responsibility Policy) Rules 2014 the Company is notrequired to frame Corporate Social Responsibility Committee and Corporate SocialResponsibility Policy.
INTERNAL FINANCIALS CONTROLS:
The Company has a sound internal control system which ensuresmonitoring implementation of the action plans emerging out of internal audit findings. Theterms of reference of the Audit Committee includes reviewing the effectiveness of theinternal control environment. The Audit Committee of the Board addresses issues raised byboth the Internal Auditors and the Statutory Auditors of the Company. During thefinancial year under review no material or serious observation has been received from theStatutory or Internal Auditors of the Company.
MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY:
There are no material changes and commitments affecting the financialposition of the Company which have occurred from the end date of the financial year uptothe date of this Board's Report. Further there has been no change in the nature ofbusiness of the Company.
The shares of the Company are listed at the Bombay Stock ExchangeLimited (BSE). The applicable annual listing fees have been paid to BSE Limited beforetheir due date.
SECRETARIAL STANDARDS ISSUED BY ICSI:
The Company is in compliance with all the applicable SecretarialStandards as specified by the Institute of Company Secretaries of India (ICSI).
INDIAN ACCOUNTING STANDARDS:
The Ministry of Corporate Affairs (MCA) on 16th February 2015notified that Indian Accounting Standards (Ind AS) are applicable to certain classes ofCompanies from 1st April 2016 with a transition date of April 1 2015. Ind AS hasreplaced the previous Indian GAAP prescribed under Section 133 of the Companies Act 2013("the Act") read with Rule 7 of the Companies (Accounts) Rules 2014. Ind AS isapplicable to the Company from 1st April 2017.
RISKS AND CONCERNS:
In today's challenging and competitive environment strategies formitigating inherent risks in accomplishing the growth plans of the Company are imperative.The main risks inter alia include strategic risk operational risk financial risk andcompliances & legal risk.
Certain statement in the management discussion and analysis may beforward looking within the meaning of applicable securities laws and regulations andactual results may differ materially from those expressed or implied. Factors that wouldmake differences to Company's operations include competition price realizationchanges in government policies and regulations tax regimes economic development andother incidental factors.
The Board of Directors place on record appreciation for the exemplarycontribution made by the employees of the Company at all levels and also conveys itsappreciation for our business associates and shareholders for their continued support tothe 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 : 7th August 2019 || |
|Place : Mumbai || |