To The Members
Your directors present herewith the 74th Annual Report and the audited accounts for thefinancial year ended 31st March 2020.
1. Financial Results
The financial performance of the Company for the financial year ended 31st March 2020is summarized below:
|Particulars ||2019-20 ||2018-19 |
|Profit/ (Loss) before exceptional items and tax ||(162.09) ||(166.29) |
|Exceptional Items Profit/ (Loss) ||140.87 ||(29.30) |
|Profit/ (Loss) before tax ||(21.22) ||(195.59) |
|Tax Expenses / Deferred tax reversal ||45.85 ||1.00 |
|Net Profit/ (Loss) for the period ||(67.07) ||(196.59) |
|Other Comprehensive income / (Expense) ||0.38 ||2.42 |
|Total Comprehensive income for the period ||(66.69) ||(194.17) |
The Company suffered losses during the year under report due to the fact that themanufacturing operations of the Company were affected as the Company undertook relocationof its Plant from Chinchwad to Chakan. This was a part of the debt reduction plan agreedwith its secured lenders. Thus during the year Company concluded sale of its Land atChinchwad for a total consideration of Rs.217.50 Cr.
Subsequent to Pune Land Sale Company with its Sole secured lender i.e. EARC is in theprocess of restructuring its balance loans for a longer tenure. A part of therestructuring plan includes utilization of the receivables from Railways for meeting theworking capital needs.
I n view of the delays in receiving the said Government dues Company faces severeworking capital shortage resulting in temporary suspension of its operations at ChakanPlant hence the operations of the Company remain adversely affected throughout the year.
2. Debt of the Company
Company's bankers namely State Bank of India State Bank of Hyderabad and The Jammu& Kashmir Bank Ltd had assigned its entire banking facilities in the earlier years toEdelweiss Asset Reconstruction Company Limited (EARC). Corporation Bank the 4th lenderfor the Company however decided not to assign their loans to EARC and initiated recoveryactions against the Company since last year. Company had entered into an OTS terms withCorporation Bank during the last year with an upfront payment of 20% of OTS amount. Due toprocedural delays in obtaining the necessary approvals/permissions from variousauthorities relating to plant relocation and land monetization there were certain delaysin concluding the OTS payments as originally scheduled to Corporation Bank. While the landmonetization process was getting delayed Corporation bank had moved against the Companybefore NCLT during the last year for not completing the OTS payments as agreed.
During the current year the company has fully paid Corporation bank as per the termsof the One Time Settlement (OTS) arrived at with them during last financial yearutilizing a part of the Pune Land sale proceeds. Consequent to full payment of OTS amountthe petition filed by corporation bank before NCLT during the last year has beendisposed-off during the current year.
Accordingly currently EARC is the sole secured lender to the Company. Furtherutilizing Pune land sale consideration during the current year the Company has repaidRs.134. 71 Cr. towards its borrowings to EARC. As on 31st March 2020 the balanceprincipal amount due to EARC is Rs.163.44 Cr and accrued interest amount of Rs.208.44 Crhas been provided in the books. The balance loans are secured by way of pari-passu chargeon the Company's plant & machinery and current assets located at the plant at Chakan.EARC also holds an exclusive charge on the 41.55 acres of the Company's land located atKalyan/ Dombivali.
Subsequent to Pune Land monetization and reduction of debt the Company is in theprocess of concluding a comprehensive debt restructuring plan with EARC that includeexpected longer repayment tenure for its balance loans and infusion of funds for revivalof operations. Company and EARC were in the process of concluding the same by end March2020 and in view of the COVID lock down we expect this agreement to be concluded with EARCpost normalization of the current prevailing pandemic situation.
3. Manufacturing Activities at new plant at Chakan.
The Company had temporarily suspended its manufacturing operations due to paucity ofworking capital and the overall recessionary conditions in the economy coupled with theproduction stoppage due to the re-location of its plant on 3rd March 2020.
The Company has been working on expediting certain receivables from GovernmentAuthorities which when received would be available for meeting the working capitalneeds and other operating requirement as per the restructuring plan discussed andvirtually finalized with its sole secured lender Edelweiss Assets Reconstruction CompanyLimited.
The Company has substantially brought down its secured loans during the current yearand relocated its entire manufacturing operations to a new plant at Chakan from where theoperations would be normalized soon after receiving the dues from Government Authoritiesas stated above.
Further the Government of India ordered a nationwide COVID-19 lockdown on 24th March2020 and as assessed by the Management the impact of COVID-19 on the Company isconsidered to be minimal for short term and the Management does not foresee any materialrisk in the Company's operation due to COVID-19 pandemic subject to availability ofworking capital.
The Board has not recommended any dividend on equity shares due to losses incurred bythe Company.
5. Operations & Management Discussion and Analysis
The current year's operations are covered in the Management Discussion and AnalysisReport. This Report as stipulated under Schedule V to the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 is presented in a separate section formingpart of this annual report.
6. Corporate Governance
The Report on Corporate Governance as stipulated in Schedule V to the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 forms part of this Report.Further it is stated that:
(i) Five Board Meetings were held during the year ended 31.3.2020. The details aregiven in Item No 3 of the Corporate Governance Report.
(ii) The composition of Audit Committee and other particulars are given in item No 6 ofthe Corporate Governance Report
(iii) The Company has established a vigil mechanism for directors and employees toreport their genuine concern and grievances. No personnel had been denied access to theAudit Committee.
(iv) The Company has adopted Risk Assessment Procedure which provides an approach bythe Management to identify potential events that may affect the Company to manage therisk within its risk appetite and to provide reasonable assurance regarding theachievement of the objectives of the Company. The Management prioritizes the risk andfinalizes the action plan for mitigation of the key risks. The Board is of the opinionthat there are no elements of risk which may threaten the existence of the Company.
(v) The numbers of shares held by non-executive directors as on 31.03.2020 have beendisclosed in item No 12 of the Corporate Governance Report.
(vi) The meeting of Independent Directors was held during the year pursuant torequirements under Schedule IV of the Companies Act 2013.
(vii) The report on Corporate Governance as stipulated under SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is presented in a separate section formingpart of this annual report.
7. Directors and Key Managerial Personnel
Mrs. Rohita M. Doshi is retiring by rotation in accordance with the provisions of theCompanies Act 2013 and Articles of Association of the Company and being eligible offersherself for re-appointment.
In terms of SEBI Listing Regulation 17(1A) Mr. S.Padmanabhan Mr. Dilip J.Thakkar andDr. Udo Weigel (whose term as Independent Directors is upto 11.09.2019 as approved byshareholders at the 68th Annual General Meeting) ceased to be independent directors witheffect from 01.04.2019 upon attaining / crossing age of 75 years. The Board on therecommendation of Nomination and Remuneration Committee at their respective meetings heldon 22nd June 2019 has re-appointed these three directors for a second term of consecutivefive years with effect from 9th September 2019 to 8th September 2024
The present term of Mr Asit Javeri and Mr. Ramesh Adige as independent directorsexpired on 11th September 2019. The Board on the recommendation of Nomination andRemuneration Committee at their respective meetings held on 22nd June 2019 hasre-appointed these two directors for a second term of consecutive five years with effectfrom 12th September 2019 to 11th September 2024.
Each of the Independent Directors of the Company has given a declaration under Section149(7) of the Companies Act 2013 to the effect that each of them meets the criteria ofindependence as provided in sub-section 6 of Section 149 of the Companies Act 2013. TheBoard confirms that each of these Independent Directors is independent of the managementof the Company and has requisite qualification and experience to act as IndependentDirectors for the
Company and further that in the Board's opinion each of them is a person of integrityand possess relevant expertise and experience in various fields.
Further all Directors and Senior Management personnel have confirmed compliance withthe code of Conduct for Directors and Senior Management personnel.
8. Directors' Responsibility Statement as required under Section 134(5) of theCompanies Act 2013
The Directors state that -
(i) i n the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe loss of the Company for the year;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) the directors had prepared the annual accounts on a going concern basis.
(v) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
9. Conservation of energy technology absorption and foreign exchange earnings andoutgo
The details as required under Clause-3 of Rule 8 of the Companies (Accounts) Rules2014 are provided in Annexure - I to the Directors' Report
10. Fixed Deposits
The Company has not either invited or accepted or renewed deposits from the members andpublic during the financial year ended 31st March 2020 under Chapter-V of the CompaniesAct 2013.
As regards the deposits accepted by the Company under the Provisions of the CompaniesAct 1956 and unclaimed deposits outstanding as on 3.03.2020 the attention is invited toNote No.7(d) of the notes forming part of the Financial Statements.
11. Particulars of Loans Guarantees and investments under Section 186
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by the companyare given in the notes to the Financial Statements.
12. Particulars of Employees
The particulars of employees who were in receipt of remuneration not less than Rs.60lacs for the financial year ended on 31st March 2020 are given below:
|Name of the employee ||Mr. Maitreya Doshi |
|Designation of employee ||Chairman & Managing Director |
|Remuneration received ||' 113.00 Lakh |
|Nature of employment ||Contractual |
|Date of commencement of employment ||16.12.1985 |
|Qualification of the employee ||MBA BA (Eco) |
|Experience of the employee ||35 years |
|Age of the employee ||57 years |
|Last employment ||- |
Mr. Maitreya Doshi is related to Mrs. Rohita Doshi Director of the Company.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and remuneration of managerial personnel) Rules2014 and forming part of the Directors' Report for the year ended 31st March 2020 isgiven in a separately Annexure - II to the Directors' Report
13. Internal Auditors
Pursuant to provisions of Section 138 of the Companies Act 2013 and Rules framed thereunder M/s. Bolia Kavdia & Associates Chartered Accountants (ICAI Firm RegistrationNumber 148373 ) were appointed as Internal Auditor of the Company for the financial year2020-21 on a remuneration of Rs. 3 Lakh.
14. Statutory Auditors
M/s Jayesh Dadia & Associates LLP Chartered Accountants (ICAI Firm RegistrationNumber 121142W / W100122) were appointed as Statutory Auditors of the Company for a periodof five years at the 71st Annual General Meeting held on 14th September 2017.
15. Cost Audit
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Rule 14 of the Companies (Audit and Auditors) Rules2014 as amended from time to time your Company has been carrying out the audit of costrecords.
The Board has appointed ABK & Associates Cost Accountants (Regn.No.000036) toconduct audit of cost records for the Company's engineering machinery activities for thefinancial year 2020-21 on a remuneration Rs.1.65 lakh apart from reimbursement ofout-of-pocket expenses as recommended by the Audit Committee.
As required under Section 148(3) read with Rule 14 of the Companies (Audit andAuditors) Rules 2014 the remuneration approved by the Board is being placed forratification by the shareholders at the ensuing Annual General Meeting.
16. Other disclosures
The particulars as required under Section 134(3) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 are given below:
(i) The Company has in place adequate internal financial controls with reference tofinancial statements and such controls are adequate and are operating effectively.
(ii) The extract of the Annual Return made as on 31.3.2020 under Section 92(3) of theCompanies Act 2013 in Form MGT9 is given in Annexure - III to the Directors' Report andthe same has been placed on the website of the Company on the weblink:http://premier.co.in/annualreport.html
(iii) The Nomination and Remuneration Policy under Section 178(3) of the Companies Act2013 is given in Annexure - IV to the Directors' Report.
(iv) The report on the Corporate Social Responsibility under Companies (CorporateSocial Responsibility Policy) Rules 2014 is given in Annexure - V to the Directors'Report.
(v) The Secretarial and Legal Compliance Audit Report in Form MR3 prescribed under Rule9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014read with Section 204(1) of the Companies Act 2013 is given in Annexure - VI to theDirectors' Report.
(vi) There are no adverse remarks made by the Statutory Auditors or the CompanySecretary in practice in their respective reports.
(vii) The Nomination & Remuneration Committee of the Board has laid down the policyon Director's appointment remuneration and criteria for determining qualificationsindependence of directors etc. Para-11 of the Corporate Governance Report discloses thecriteria for payment of remuneration to Non-executive Directors and details ofremuneration paid to the Managing Director and that the Company does not have Stock OptionScheme.
(viii) Certificate of Non-disqualification of Directors pursuant to Regulation 34(3) ofSEBI(LODR) 2015 is given in Annexure - VII to the Director Report
(ix) The formal annual evaluation of the Board and individual directors has beencarried out at the meeting of the Independent Directors held on 14th February 2020 ascontemplated under the code for Independent Directors in Schedule VI to the Companies Act2013 as per the criteria laid down by the Nomination & Remuneration Committee of theBoard.
(x) The Company has not entered into contract with related parties within the meaningof Section 188(1) of the Companies Act 2013 read with Rule 15 of the Companies (Meetingsof Board and its Powers) Rules 2014.
(xi) The Company is not a subsidiary of any other company nor has a subsidiary company.The Company has existing associate company namely PAL Credit & Capital Ltd.(PCCL).The consolidated financial statements presented herewith include the financials of PCCL.PCCL has discontinued its operations due to lack of funds.
(xii) Pursuant to provisions of Section 134(3)(ca) of the Companies Act 2013 it ishereby confirmed that during the year 2019-20 there have been no frauds reported by theAuditor.
(xiii) No regulator or court or tribunal has passed any adverse significant andmaterial order impacting the going concern status and the Company's operations in future.
(xiv) The Company has adopted policy under Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and has constituted a Committee asrequired under the Act and the Rules thereunder. No cases filed or any complaints werereceived during the year.
(xv) The Directors confirm that the applicable Secretarial Standards i.e. SS-1 andSS-2 relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by your Company.
The Directors wish to express their appreciation of the continued support of theCompany's customers suppliers and shareholders. The Directors also wish to thankemployees at all levels for their contribution and co-operation during the difficultsituation of the Company.
On behalf of the Board of Directors
Chairman & Managing Director
Date: 31st July 2020