Promact Impex Ltd Directors Report.

Dear Members,

Your Directors are pleased to present the 36th ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2019-20 ended 31st March, 2020.

1. FINANCIAL RESULTS:

Particulars 2019-20 2018-19
Operating Profit (Before Interest & Depreciation) 94.07 201.00
Less: Interest 62.93 94.36
Profit before Depreciation 31.14 106.64
Less: Depreciation 6.41 6.38
Profit Before Tax 24.73 100.27
Less: Provision for taxation 2.45 10.00
(Add)/ Less: Tax of earlier years (2.00) (7.50)
Profit for the year after Tax 24.27 97.77
(Debit) Balance brought forward from Previous year (892.84) (990.60)
(Debit) Balance carried to Balance Sheet (868.56) (892.84)

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1st April, 2020 and date of this report.

2. DIVIDEND:

With a view to conserve the resources for the working capital requirement of the Company, the Board of Directors has not recommend any dividend on the Equity Shares for the year under review ended 31st March, 2020.

3. SALES & WORKING RESULTS:

The Company has generated revenue from operations of Rs.1647.69 lakh during the year under review as compared to Rs. 3151.45 lakh during 2018-19. The Company has earned other income of Rs. 9.34 lakh during the year under review during the year under review as compared to Rs. 8.33 lakh during 2018-19.The Profit before Interest and Depreciation during the year 2019-20 was Rs. 94.07 lakh as compared to Rs. 201.00 lakh during the year 2018-19. As the Company had to provide for Interest of Rs.62.93 lakh during the year under review, the Profit before Depreciation was Rs. 31.14 lakh as compared to Rs. 106.64 lakh during 2018-19. The Company provided Rs. 6.41 lakh for Depreciation during the year under review. After adjusting for taxes, the Net Profit for the year under review stood at Rs. 24.27 lakh as against Net Profit of Rs. 97.77 lakh during 2018-19.

4. FINANCE:

4.1 During the year under review, the Company was generally regular in payment of Principal and Interestto the Financial Institutions/Banks. The Company was enjoying Working Capital Facilities from Sarvodaya Commercial Co-op Bank Ltd. during the year under review.

4.2 The Income tax and Sales tax Assessment of the Company have been completed up to Assessment Year 2015-16 and the Financial Year 2015-16 respectively.

5. COVID-19 PANDEMIC:

IDue to outbreak of Covid-19 globally and in India, the Companys management has made initial assessment of likely adverse impact on business and financial risks on account of Covid-19. There is slow down in the business of the Company due to lockdown which had impact on operations. However, the management does not see any medium to long term risks in the Companys ability to continue as a going concern and meeting its liabilities and compliance with the debt covenants, applicable, if any.

6. LISTING:

The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2020-21.

7. SHARE CAPITAL:

The paid up Share Capital of the Company as on 31st March, 2020 was Rs. 6,51,18,000. As on 31st March, 2020, the Company has not issued shares with differential voting rights nor granted stock options nor do sweat equity and none of the Directors of the Company hold any convertible instruments.

8. RESERVES:

Your Company does not propose to transfer any amount to general reserve.

9. DIRECTORS:

9.1 One of your Directors viz. Mr. Ankit J. Patel (DIN:02351167), retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment.

9.2 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act.

9.3 Mr. Miteshkumar A. Patel (DIN:06731818) has been re-appointed as Independent Director of the Company at the 35th Annual General Meeting for a second consecutive term of 5 years i.e. up to conclusion of 40th Annual General Meeting.

9.4 It is proposed to re-appoint Ms. Nikita J. Patel (DIN:03092770) as Managing Director of the Company, for a period of 3 years with effect from 23rd September, 2020 to 22nd September, 2023 at the ensuing Annual General Meeting.

9.5 Brief profile of the Directors being appointed and re-appointed as required under Regulations 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings and the justification for appointment/ reappointment of Independent Directors are provided in the notice for the forthcoming AGM of the Company.

9.6 The Board of Directors duly met 6 times during the financial year under review.

9.7 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.8 DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had 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 the Company at 31st March, 2020 being end of the financial year 2019-20 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that 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 the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

11. MANAGERIAL REMUNERATION:

REMUNERATION OF DIRECTORS:

Sr. No. Name of the Director & Designation Remuneration for the year 2019-20 % increase over last year Parameters Median of Employees Remuneration Ratio Commission received from Holding/ Subsidiary
1. Nikita J. Patel Managing Director NIL N.A. - 2,29,000/- N.A. N.A.

The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Companys website www.promactimpex.com.

12. KEY MANAGERIAL PERSONNEL :

% INCREASE IN REMUNERATION OF DIRECTORS & KMP:

Sr. No. Name of the Director & KMP Designation Percentage Increase (If any)
1. Ms. Nikita J. Patel Managing Director N.A.
2. Mr. Vipul Bhavsar CFO NIL
3. Mr. Parth B. Thakkar CS & Compliance Officer

* Mr. Parth B. Thakkar was appointed as Company Secretary & Compliance Officer of the Company w.e.f. 19th November, 2018. Hence, previous year figures are not comparable.

13. PERSONNEL AND H. R. D.:

13.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful.

The relationship between average increase in remuneration and Companys performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website at www.promactimpex.com.

15. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of the depositories viz NSDL and CDSL. The ISIN No. allotted is INE818D01011.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption are not applicable as there are no manufacturing activities during the year under review. The Company has not earned or spent any foreign exchange during the year under review.

17. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance (on a voluntary basis), Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - A.

18. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the CompaniesAct, 2013 from M/s. Kashyap R. Mehta & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - B.

19. EXTRACT OF ANNUAL RETURN:

The extract of Annual return in Form - MGT-9 has been attached herewith as Annexure - C.

20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate Governance Report.

21. GENERAL:

21.1. AUDITORS:

STATUTORY AUDITORS:

At the 33rd Annual General Meeting held on 22nd September, 2017 M/s. B. M. Modi & Co., Chartered Accountants, Ahmedabad were appointed as Statutory Auditors of the Company to hold office for the period of 5 years i.e. for the financial years 2017-18 to 2021-22.

The remarks of Auditor are self explanatory and have been explained in Notes on Accounts.

21.2 INSURANCE:

The movable and immovable properties of the Company including plant and Machinery and stocks wherever necessary and to the extent required have been adequately insured against the risks of fire, riot, strike, malicious damage etc. as per the consistent policy of the Company.

21.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there were no overdue deposits.

21.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.

21.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiaries/ Associates Companies / JVs.

21.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

21.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There have been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

21.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

21.9 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

22. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

23. DISCLOSURE OF MAINTENANCE OF COST RECORDS:

Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company.

24. ACKNOWLEDGEMENT:

Your Directors express their sincere thanks and appreciation to Promoters and Shareholders for their constant support and co operation. Your Directors also place on record their grateful appreciation and co-operation received from Bankers, Financial Institutions, Government Agencies and employees of the Company.

For and on behalf of the Board,
Place : Ahmedabad. Miteshkumar A. Patel
Date : 21st July, 2020 Chairman
(DIN:06731818)