Patspin India Ltd Directors Report.
To the Members, Your Directors present the TWENTY EIGHTH Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2019
1. FINANCIAL RESULTS
(Rs. in lacs)
|Income from operations||54,851||52,284|
|Changes in Inventories||355||(739)|
|a) Cost of materials||33,781||32,348|
|b) Employee benefits expense||3,577||3,546|
|c) Other expenses||14,433||12,594|
|OPERATING PROFIT (EBITDA)||3,667||3,138|
|DEPRECIATION, AMORTISATION & TAX EXPENSES|
|Depreciation and Amortisation||1,033||1045|
|PROFIT/(LOSS) BEFORE TAX AND BEFORE EXCEPTIONAL ITEM||(289)||(1,215)|
|PROFIT ON SALE OF WINDMILLS & VRS EXPENSES (NET)||(16)||947|
|PROFIT/(LOSS) BEFORE TAX AFTER EXCEPTIONAL ITEM||(305)||(268)|
|a) Current Tax (MAT)||--||--|
|b) Deferred Tax Charge /||(69)||166|
|PROFIT/(LOSS) AFTER TAX||(236)||(434)|
2. FINANCIAL PERFORMANCE
Financial year 2018-19 witnessed many external challenges in the form of fluctuating demand constraints and tight liquidity conditions. Despite this, your company was able to improve its revenue to Rs.548.15 Cr. in FY 2018-19 from Rs.522.84 Cr. in the FY 2017-18. Exports were higher at Rs.306.40 Cr. in FY 2018-19 as against Rs.289.74 Cr. in the previous
FY 2017-18. Operating Profit (EBITDA) was higher at Rs. 36.67 Cr. as against Rs.31.38 Cr. in the previous year. Consequently, the net loss for the FY 2018-19 was lower at Rs.2.36 Cr. compared to the loss of Rs.4.34 Cr. in the previous FY 2017-18.
As regards the debt position, your company has since repaid 68% (Rs.173 Cr) of the outstanding debt of Rs.255 Cr. as at the date of the CDR i.e., 1st April, 2012. However, on account of continued stress in liquidity position, your company is in discussion with its Lenders to restructure its outstanding debts of Rs.82 Cr. as on date under RBIs prudential framework for resolution of stressed assets circular of 7th June 2019.
In view of the losses for the financial year ended 31st March 2019, the Board of Directors regret their inability to recommend any dividend for the year 2018-19 and accordingly, has not recommended / proposed declaration of any dividend.
4. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") is provided in a separate section and forms an integral part of this Report.
5. PUBLIC DEPOSITS
The Company does not have "Deposits" as contemplated under Clause V of the Companies Act 2013. Further, the company has not accepted any such deposits during the year ended 31st March 2019.
6. CORPORATE GOVERNANCE
The Company has always strived to adopt appropriate standards for good Corporate Governance.
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a Certificate from as well as Practicing Company Secretary confirming compliance, forms an integral part of this Report.
7. DIRECTORS AND KEY MANAGERIAL PERSONS
Shri N.K.Bafna (DIN: 00019372), Shri Prem Malik (DIN: 00023051) and Shi. S.Sundareshan (DIN: 01675195) will be completing their present term as Independent Directors of the company on 18th September 2019. On the recommendation of Nomination and Remuneration Committee, the Board in its meeting held on 7th August 2019, subject to the approval of shareholders by special resolution has recommended the reappointment of Shri N.K.Bafna (DIN: 00019372), Shri Prem Malik (DIN:cotton prices, 00023051) and Shi. S.Sundareshan (DIN: 01675195) as Independent Directors of the company for a further term of 5 years effective from 19th September 2019.
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, consent of the Members by way of Special Resolution is required for continuation of a Non-Executive and Independent Directors beyond the age of 75 years w.e.f. April 1, 2019.
Shri. N.K. Bafna and Shri, Prem Malik, Independent Directors are above 75 years of age. The Board recommends your approval by Special Resolution for their continuance in the Board.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of the independence as prescribed both under section 149(6) of the Companies Act, 2013 and under Regulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Further, in accordance with the provisions of Companies Act, 2013 and the Articles of Association of the Company, Shri B.K. Patodia (DIN 00003516), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-election.
Smt. Pamela Anna Mathew, Independent Woman Director has resigned from the Board due to her preoccupation with her business with effect from 7.8.2019. The Board records its sincere appreciation for her valuable contribution during her association with the company.
Shri. Rajen K Mariwala will be completing his present term as Independent Director of the company on 18th September 2019. Due to preoccupation, he is unable to continue his Directorship beyond his present term. The Board records its sincere appreciation for his valuable contribution during his long association with the company.
The required information of the Directors being reappointed, pursuant to the provisions of the Listing Regulations, forms part of the Annual Report.
There is no change in the composition of the Board of Directors and the Key Managerial Personnel, except as stated above.
8. KEY MANAGERIAL PERSONNEL
Shri Umang Patodia, Managing Director, Shri
T.Ravindran, Chief Financial Officer and Shri Dipu
George, Company Secretary were appointed as Key Managerial Personnel of your Company, in accordance with the provisions of Section 203 of the Companies Act 2013 and there is no change in the same during the year under review.
9. NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 4 times during the year ended 31st March, 2019 in accordance with the provisions of the Companies Act, 2013 and rules made there under. The details thereof are given in the Corporate Governance Report.
10. MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met once during the Financial Year under review. The Meeting was conducted without the presence of the Non-Independent Directors and members of management.
11. DIRECTORS RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on 31st March 2019 and state that:
(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there are no material departures from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your company as at 31st March 2019 and of the profit or loss of the company for that period;
(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the Annual Accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and (vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
12. BOARD EVALUATION
Pursuant to the provisions of Companies Act and Listing Regulations, Annual Evaluation of the Board, the Directors individually as well as working of its constituted committees has been carried out from time to time.
13. FAMILIARISATION PROGRAMME FOR DIRECTORS
At the time of appointing a Director, a formal letter of appointment is given to him, which interalia explains the role, function, duties and responsibilities expected of him as a Director of the Company. This is to provide insights into the Company to enable the Independent Directors to understand its business in depth, to familiarize them with the process, business and functionaries of the Company and to assist them in performing their role as Independent Directors of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and other relevant regulations and affirmation taken with respect to the same.
The Chairman and the Management has also one to one discussion with the Directors to familiarize with the companys operations.
M/s. L.U.Krishnan & Co. (Regn.No.001527S) Chartered Accountants, Chennai were appointed as the Auditors of the Company at the 26th Annual General Meeting (AGM) held on 22nd September, 2017 to hold office from the conclusion of the 31st AGM of the Company.
Reports issued by the Statutory Auditors on the Standalone financial statements for the year ended 31st March 2019 are with unmodified opinion (unqualified).
15. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri. MRL Narasimha (C.P No. 799), Practicing Company Secretary to undertake the Secretarial Audit of the Company.
Secretarial Audit Report issued by Shri. MRL Narasimha, Practicing Company Secretary in Form MR-3 forms part to this report as Annexure I. The said report does not contain any observation or qualification requiring explanation or adverse remark
16. COST AUDITORS
Pursuant to the provisions of Section 148 (3) of the Companies Act, 2013, the Board of Directors on the recommendation of the Audit Committee, appointed M/s. Hareesh K.N and Associates, Cost Accountants, as the Cost Auditors of the company for the year ended 31st March, 2019. The remuneration payable to the Cost Auditor is subject to approval of the Members at the Annual General Meeting. Accordingly, the remuneration payable to the Cost Auditors forms a part of the Notice convening 28th Annual General Meeting and the resolution is recommended for your approval.
17. EXTRACT OF ANNUAL RETURUN
The extract of Annual Return in Form MGT-9 as per Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of Companies (Management & Administration) Rules, 2014 is annexed hereto as Annexure II and forms part of this report.
18. RELATED PARTY TRANSACTIONS
All transactions entered with related parties were on arms length basis and in the ordinary course of business.
There were no materially significant transactions with the related parties during the financial year and were not in conflict with the interest of the company. Thus, a disclosure in Form AOC -2 in terms of Section 134 of the Companies Act 2013 is not required. All related party transactions are placed before the Audit Committee as also before the Board for approval.
The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Regulations. This Policy has been uploaded on the website of the Company.
19. LOANS & INVESTMENTS
Details of loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements forming part of this report.
20. RISK MANAGEMENT
The company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor business risks. The Audit Committee and the Board periodically review the risks and suggest steps to be taken to manage/ mitigate the same through a properly defined framework.
During the year, a risk analysis and assessment was conducted and no major risks were noticed, which may threaten the existence of the company.
21. VIGIL MECHANISM / WHISTE BLOWER POLICY
The company has a Vigil Mechanism / Whistle Blower Policy to report genuine concerns or grievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on the companys website (www.patspin.com).
22. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of Section 135 read with the Section 198 of the Companies Act 2013, the company do not have CSR obligation for the year 2018-19. Accordingly, there has been no meeting of CSR Committee held during the year. The statutory disclosures with respect to CSR is annexed hereto forming part of this Report (Annexure III) Even though the provisions of Section 135 (5) of Companies Act, 2013 regarding Corporate Social Responsibility are not yet attracted, the company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.
23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in the Annexure IV forming part of this report
24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an effective internal control and risk mitigation system designed to effectively control the operations at its Head Office, Plants and Depots.
The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures. Independent Internal Auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards. Planned periodic reviews are carried out by Internal Audit. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.
Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the company.
25. NOMINATION & REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a frame work in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. More details on the same are given in the Corporate Governance Report.
26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) is already been functioned for redressing complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints under this policy during the year ended 31st March, 2019.
27. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIAL PERSONNEL) RULES, 2014
The information required pursuant to section 134 (3) (q) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered officeof the company during business hours on working days of the company up to the date of the ensuing Annual General meeting. If any Member is interested in obtaining a copy thereof, such member may write to the company in this regard.
30. PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no employees whose particulars are to be given in terms of Section 134(3)(q) of the companies Act,2013 read with Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerial personnel) Rules, 2014.
31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY
There are no significant and material the Regulators or Courts or Tribunals that would impact the going concern status of your Company and its future operations.
a) There was no issue of equity shares with differential rights as to dividend, voting or otherwise: and;
b) There was no issue of shares (including sweat equity shares) to the employees of the company under any scheme.
Your Directors place on record their gratitude to Central Bank of India, State Bank of India, Export-Import Bank of India, The Karur Vysya Bank Limited, IDBI Bank Limited, Oriental Bank of Commerce, Bank of Maharashtra and Canara Bank and the concerned Departments of the State and Central Government, Valuable customers, Employees and Shareholders for their assistance, support and co-operation to the Company.
|For and on behalf of the Board of Directors|
|B K PATODIA|
|Date: 7th August, 2019||Chairman|