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TO THE MEMBERS OF PUNIT COMMERCIALS LIMITED
The Directors take pleasure in presenting the Thirty - Fourth Annual Report together with the Audited Financial Statements for the year ended 31st March, 2019.
1. FINANCIAL RESULTS
Key highlights of Financial Results for Punit Commercials Limited for the financial year 2018- 19 is tabulated below:
|(Amount in Rs.)|
|Particulars||Year Ended 31st March, 2019||Year Ended 31st March, 2018|
|Revenue from Operations||220.127.116.117||18,50.69.595|
|Purchase of Stock - in - Trade||4,63.43.498||16,89,93,786|
|Changes in the inventories of finished goods Work - In - Progress and Stock - in - Trade||96,05.376||1,31,73,71 1|
|Employee Benefits Expense||6,27.160||1 1,97.660|
|Finance Costs||2.3 1.642||6.09.273|
|Depreciation and Amortization Expense||1.032||1 1,306|
|Other Expenses||8.1 1,288||18,37.581|
|Profit / Loss Before Tax||14,907||(21,33,341)|
|Less: Tax Expenses|
|Excess Provision of earlier years||0||10,370|
|Profit / Loss After Tax||14,929||(21,41,329)|
|Balance brought forward from last year||94,76,265||1.16,17.594|
|Balance carried forward to the Balance Sheet||94,91,193||94,76.265|
2. HIGHLIGHTS OF PERFORMANCE
Total income for the year decreased by 69.51% to Rs. 18.104.22.1687/- as compared to Rs. 18,36,89,975/- in the financial year 2017 - 18.
Total profit before tax for the year was Rs. 14,907/- as compared to Rs. (21.33,341)/- in the financial year 2017 - 18.
3. TRANSFER TO RESERVES
The Board of Directors has not recommended transfer of any amount to reserves.
With a view to deploy the profits into the existing operations of your Company, Board of Directors has not recommended any dividend for the year.
5. BUSINESS OPERATIONS
Your Company is operating in share trading and the income from operation is trading profit / loss.
6. DISCLOSURES UNDER SECTION 134 (31 (h OF THE COMPANIES ACT, 2013
No material changes and commitments which could affect your Companys financial position have occurred between the end of the financial year of your Company and date of this report.
7. SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2019 was Rs. 24 Lakhs. During the year under review, your Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. There was no change in your Companys share capital during the year under review. The Promoter and Promoter Group are holding 1.76.775 shares equivalent to 73.66% of the total Issued and Paid-up Share Capital.
8.1 Retirement by Rotation
Pursuant to Section 152(6) of the Companies Act. 2013 and in terms of the Articles of Association of your Company, Mrs. Purnima Mehta. Director, retires by rotation at the forthcoming Annual General Meeting. Being eligible, she offers herself for reappointment.
8.2 Re-Appointment of Director
Your Company has at its Board Meeting held on I3lh February, 2019 re-appointed Mr. Sujit S. Mehta as Independent Director for a second consecutive term of 5 years w.e.f. 01st April, 2019. The approval from Members has been proposed at Item No. 4 of the Notice of 34th Annual General Meeting.
8.3 Annual Board Evaluation
According to Regulation of 25(3) of the SEBI (LODR) Regulations, 2015 and Circular No. SEB1/HO/CFD/CMD/C1R/P/2017/004 dated 5,h January, 2017 issued by SEBI on Guidance Note on Board Evaluation, a meeting of the Board of Directors was held on 13th February, 2019 to inter alia, evaluate the performance of the Non - Independent Directors, including the Chairman.
8.4 Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of your Company pursuant to Section 2(51) and Section 203 of the Act, read with Rule 8(5)(iii) of the Companies (Accounts) Rules, 2014 framed thereunder.
1. Mr. Nirav Mehta, Managing Director
2. Mrs. Fatima Dsouza, CFO
None of the Key Managerial Personnel have resigned during the year under review.
8.5 Remuneration Policy
The Board has in accordance with the provisions of Section 178(3) of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management Employees.
8.6 Board Meetings
A calendar of Board Meetings is prepared and circulated in advance to the Directors.
During the year your Company has held 4 (Four) Board Meetings which were held on 30th May, 2018; 14th August, 2018; 05th November, 2018 and I3lh February, 2019. The maximum interval between any two meetings did not exceed 120 days.
9. PARTICULARS OF EMPLOYEES
During the year, there was no employee in receipt of remuneration as prescribed in the Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014. The prescribed particulars of Employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not given since no Director is drawing any remuneration.
10. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section I34(3)(c) of the Companies Act, 2013:
a) that in the preparation of the Annual Financial Statements for the year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) that such accounting policies as mentioned in Note 1 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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 of your Company for the year ended on that date;
c) that proper and sufficient care has been taken 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;
d) that the Annual Financial Statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
11. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY
Your Company maintains an adequate and effective Internal Control System commensurate with its size and complexity. We believe that these internal control systems provide, among other things, a reasonable assurance that transactions are executed with Management authorization and that they are recorded in all material respects to permit preparation of financial statements in conformity with established accounting principles and that the assets of your Company are adequately safe-guarded against significant misuse or loss.
An independent Internal Audit function is an important element of your Companys internal control system. The internal control system is supplemented through an extensive internal audit programme and periodic review by Management and Audit Committee.
Your Company has in place, adequate Internal Financial Controls with reference to Financial Statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
The Audit Committee reviewed the audit program and findings of the Internal Audit department and your Company when needed takes corrective actions.
12. SUBSIDIARY COMPANIES
Your Company has no Subsidiary Company.
13. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES
There are no companies which have become or ceased to be its Subsidiaries, Joint Venture or Associate Companies during the financial year 2018 - 19.
Your Company has not accepted deposit from the public and shareholders falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing details of deposits which are not in compliance with the Chapter V of the Act is not applicable.
15. PARTICULARS OF LOANS, GUARANTEES OR 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 the Financial Statements.
16. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by your Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of your Company at large.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.
None of the Directors has any pecuniary relationships or transactions vis-a-vis your Company.
17. CORPORATE SOCIAL RESPONSIBILITY
The criteria prescribed for the applicability of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 is not applicable to your Company.
18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules. 2014. is as under:
A. Conservation of Energy
The operations of your Company are not energy intensive. However, wherever possible your Company strives to curtail the consumption of energy on continued basis.
B. Technology absorption, adaptation and innovation
No expenditure has been incurred by your Company on research and Development activities during the year under review.
C. Foreign Exchange Earning & Outgo
|Foreign Exchange Earnings / Outgo||31/03/2019||31/03/2018|
|Foreign Exchange Earned||0||0|
|Foreign Exchange Outgo||0||0|
19. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
The paid up share capital of your Company is Rs. 24 Lakhs as on 31st March. 2019. The Reserve and Surplus is Rs. 97.36 Lakhs. Accordingly, the paid Lip capital and net worth is below the prescribed limit for mandatory applicability of Corporate Governance Clause. Your Company has decided not to opt for compliance of Risk Management Policy required under Regulation 21 read with Regulation 15 of the SEB1 (LODR) Regulations, 2015 for the time being due to the size of the business and your Company has not formed Risk Management Committee as it is not applicable under Regulation 21 of the SEB1 (LODR) Regulations. 2015.
20. VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. During the financial year 2017 - 18, in accordance with the Regulation 22 of the SEBI (LODR) Regulations and pursuant to Section 177(9) read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013, the company has adopted a Whistle Blower Policy. The Company promotes ethical behavior in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. As per the Whistle Blower Policy, the employees are free to report violations of laws, rules, regulations or unethical conduct to their immediate superior. The confidentiality of those reporting / violations is maintained and they are not subjected to any discriminatory practice.
21. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations.
22.1 Statutory Auditors
Your Companys Auditors, M/s. Diwan Gosalia & Associates. Chartered Accountants who retire at the forthcoming Annual General Meeting of your Company are eligible for re-appointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for re-appointment as Auditors of your Company.
22.2 Statutory Auditors Observations
The Report given by the Auditors on the financial statements of your Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
22.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed M/s P. P. Shah & Co., Practicing Company Secretary to undertake the Secretarial Audit of your Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure A".
22.4 Qualifications in Secretarial Audit Report
A. Appointment of Company Secretary:
As per Section 203 (1) (ii), the Company is required to appoint Company Secretary. The Company has not appointed Company Secretary consequently the Annual Audited Financial Statements for the financial year ended 31s March, 2018 were not signed by Company Secretary. In this regard the management of the Company has provided the following reply:
(i) The Company has appointed Mrs. Fatima Dsouza, CFO as Compliance Officer of the Company who looks after the compliance of the Companies Act, 2013 and the SEBI Act and rules made there under;
(ii) The Company has availed the services of Practicing Company Secretary for advising on compliance of the Companies Act. 2013 and the SEBI Act and rules made there under;
(iii) The Volume and Scope of work for the Company Secretary is less and it is not a full time work and the job of Company Secretary is not attractive commensurate with the scope of work and salary.
B. Appointment of Internal Auditor:
As per Section 138 of the Companies Act, 2013, the Company is required to appoint Internal Auditor. The Company has not appointed Internal Auditor. In this regard the management of the Company has provided the following reply:
(i) The size of operation of the Company is very small accordingly, it is not viable to appoint Internal Auditor but the Company has established the internal control system.
C. E-Voting in Annual General Meeting:
As per Rule 20 of the Companies (Management and Administration) Rules, 2014. every listed company or a company having more than 1000 members must provide e- voting facility to its members while seeking their approval on resolutions proposed in the General Meeting. The Company did not provided e-voting facility to its members in respect of resolutions passed at the 33,d Annual General Meeting held on 11" August, 2018. In this regard the Management has given the following reply:
(i) The Company is having 11 shareholders under public category and 5 shareholders under promoter category. Of the 1 I shareholders from public category, I is the director of the Company and another is employee of the Company. Hence, the cost for availing e-voting is not viable.
D. Composition of Board of Directors:
The Company has 3 Directors out of which 2 are Promoter Directors of which I is Executive Director and 1 is Non-Executive Independent Director. The composition of the Board of Directors is in compliance with Section 149(4) of the Companies Act, 2013 but not in compliance with Regulation 17(2) of the SEBI (LODR) Regulations, 2015. In this regard the management of the Company has provided the following reply:
(i) The Company has availed exemption under Regulation 15(2) of the SEBI (LODR) Regulations, 2015 in respect of composition of Board of Directors as per Regulation 17(2) the SEBI (LODR) Regulations, 2015.
E. Composition of Audit Committee & Nomination and Remuneration Committee
The composition of Audit Committee & Nomination and Remuneration Committee is not in line with the requirements of Section 177 and 178 of the Companies Act, 2013. The same has been explained below:
Composition of Audit Committee:
As per Section 177 of the Companies Act, 2013. the Board of Directors of every listed company shall constitute an Audit Committee comprising of a minimum of 3 Directors with Independent Directors forming a majority. Since the Company has only 1 Independent Director, hence its Audit Committee is not as per the requirements of Section 177 of the Companies Act, 2013. The Company has decided not to opt for appointment of one more Independent Director due to the size of its business.
Composition of Nomination and Remuneration Committee:
As per Section 178 of the Companies Act, 2013, the Board of Directors of every listed company shall constitute an Nomination and Remuneration Committee comprising of a minimum of 3 Non-Executive Directors of which one half shall be Independent Directors. Since the Company has only I Independent Director and I Non-Executive Director, hence its Nomination and Remuneration Committee is not as per the requirements of Section 178 of the Companies Act. 2013. The Company has decided not to opt for appointment of one more Independent Director due to the size of its business.
23. COMPLIANCE OF SECRETARIAL STANDARDS
During the year under review, your Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
24. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT - 9 is annexed herewith as "Annexure B".
25. HUMAN RESOURCES
The relations of the employees of your Company have been cordial during the year. Employees are considered to be team members being one of the most critical resources in the business which maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening your Companys Polices and Systems. Your Company maintains healthy, cordial and harmonious relations with all personnel and thereby enhancing the contributory value of the Human Resources.
26. ENVIRONMENT AND SAFETY
Your Company is conscious of the importance of environmentally clean and safe operations. Your 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.
27. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders. Accordingly, your Companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development.
28. GREEN INITIATIVES
Electronic copies of the Annual Report 2018 - 19 and Notice of the 34lh Annual General Meeting are sent to all members whose email addresses are registered with your Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2018 - 19 and the Notice of the 34lh Annual General Meeting under Section 101 of the Companies Act, 2013 are sent in the permitted mode. Members requiring physical copies can send a request to your Company.
29. MANAGEMENT DISCUSSION AND ANALYSIS
Your Company is operating in the share trading business which is very common and general. The size of operation of your Company is very small. Accordingly, it is not viable to provide report on Management Discussion and Analysis. Hence, your Company has decided not to provide Management Discussion and Analysis Report for the financial year ended 31st March, 2019.
30. CORPORATE GOVERNANCE
As per Regulation 15(2) of the SEBI (LODR) Regulations, 2015, the provisions of Corporate Governance are non-mandatory to the following class of Companies:
a. Companies having Paid-up Equity Share Capital not exceeding Rs. 10 Crore and Net worth not exceeding Rs. 25 Crore, as on the last day of the previous financial year;
Provided that where the provisions of Regulation 27 becomes applicable to a company at a later date, such company shall comply with the requirements of Regulation 27 within six months from the date on which the provisions became applicable to the company.
b. Companies whose equity share capital is listed exclusively on the SME and SME-ITP Platforms.
The Paid-up Share Capital of your Company is Rs. 24 Lakhs as on 31sl March, 2019. The Reserve and Surplus is Rs. 97.36 Lakhs. Accordingly, the Paid-up Capital and Net Worth is below the prescribed limit for mandatory applicability of Corporate Governance clause as per Regulation 15(2)(a) of the SEBI (LODR) Regulations, 2015. Your Company has decided not to opt for compliance of Regulation 27 for the time being. The letter for the same has been filed with BSE on 03rd June, 2019.
31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company firmly believes in providing a safe, supportive and friendly workplace environment - a workplace where our values come to life through the supporting behaviours. Positive workplace environment and a great employee experience are integral part of our culture. Your Company believes in providing and ensuring a workplace free from discrimination and harassment based on gender.
Your Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment, your Company provides the mechanism to seek recourse and redressal to the concerned individual subjected to sexual harassment.
Your Company has a Sexual Harassment Prevention and Grievance Handling Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Complaints Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
No complaint has been raised during the year ended 31bt March, 2019.
32. MD AND CFO CERTIFICATION
Certificate from Mr. Nirav P. Mehta, Managing Director and Ms. Fatima C. Dsouza, CFO, pursuant to provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the year under review was placed before the Board of Directors of your Company at its meeting held on 30th May, 2019.
33. INDIAN ACCOUNTING STANDARDS (IND-AS)
Your Company has followed the relevant Accounting Standards notified by the Companies (Indian Accounting Standards) Rules, 2015 while preparing financial statements.
34. CAPITAL EXPENDITURE
There was no Capital Expenditure during the year.
35. PLEDGE OF SHARES
None of the equity shares of the Directors of your Company are pledged with any banks or financial institutions.
36. INFORMATION SYSTEM
In a business where information is critical, Information Technology plays a vital role, facilitating informed decision making to grow the business. Over the years, your Company has invested extensively in infrastructure, people and processes with the objective to capture, protect and transmit information with speed and accuracy.
37. LISTING WITH STOCK EXCHANGES
Your Company is listed with BSE Limited and your Company has duly paid the listing lees to the Exchange.
Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of your Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of your Company for their unstinted commitment and continued contribution to your Company.
39. CAUTIONARY STATEMENT
Statements in the Boards Report describing your Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence your Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.