DIRECTORS' REPORT The Members, PERMANENT MAGNETS LIMITED. Your Directors have pleasure in presenting the 54th Annual Report of the Company together with the Audited Statements of the Accounts for the year ended 31st March, 2015. 1. YEAR IN RETROSPECT. The Sales for the financial year under review increased by appx. 7.60 % as compared to previous year. Profitability was also improved due to foreign exchange gain and operational efficiency during the year. 2. DIVIDEND: Due to the paucity of net profit and to conserve resources for growth, the Board has considered it prudent not to declare any dividend. 3. WORKING FOR 2015-16: The sales during April-July 2015 has been Rs. 21.83 Crores. The corresponding sales for the corresponding period of 2014-15 was Rs. 13.03 Crores. Sales is increased due to increase in sales of copper shunt and other developed products. 4. FIXED DEPOSITS: The company has not accepted any deposits from the public during the year pursuant to the provisions of section 58A of the Companies Act, 1956. 5. LISTING: The shares of the Company are listed on "Bombay Stock Exchange Limited" at Mumbai. The Company has paid the applicable listing Fees to the Stock Exchange, Mumbai till date. 6. DIRECTORS: At the 53rd Annual General Meeting of the company , the Company had pursuant to the provisions of Clause 49 of the Listing Agreement entered in to with stock exchanges, appointed Shri Arun Binani and Shri Rajeev Mundra as Independent Directors of the company for 5 consecutive years.. The Company has received declarations from the said Independent Directors of the company that they meet the criteria of independence as prescribed both under sub section (6) of Section 149 of the Companies Act, 2013 and under the said Clause 49.At Board Meeting held on 27th March, 2015, the Board appointed Ms Sunaina Taparia as non executive director, liable to retire by rotation as additional director. In accordance with the provisions of Comanies Act, 2013 Shri Mukul Taparia ,non executive director retires by rotation and being eligible offers himself for reappointment. 7. 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 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2015, 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 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 the Company as at March 31, 2015 and of the profit of the 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 the 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 8. CORPORATE GOVERNANCE: In terms of SEBI circular No. CIR/CFD/POLICY CELL/7/2014 dtd 15th September, 2014, compliance with the provisions of Clause 49 shall not be mandatory, for the time being, in respect of the 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. Accordingly, our company is fitting in to these criteria and we are not required to give corporate governance report detailing compliance on corporate governance. 9. SUBSIDIARIES: Since the Company has no subsidiaries, provisions of section 129(3) of the Companies Act, 2013 is not applicable. 10. AUDITORS: 10.1 STATUTORY AUDITORS M/s. Jayesh Sanghrajka & Co.LLP, Chartered Accountants, Mumbai, have been appointed as statutory auditors of the company at the last Annual General Meeting held on 22.09.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. 10.2 SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Arun Dash & Associates (CP No.:9309),Company Secretaries to undertake the secretarial audit of the company.The Secretarial Audit Report is annexed herewith as 'Annexure B'. 10.3 INTERNAL AUDITORS M/S G S Nayak & Co, Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time. 11. EXPLANATION ON AUDITOR'S COMMENT The Board have to state as under with reference to the Auditor's certain remarks as contained in the annexure to the Auditor's Report: a) With reference to para 7(a) and para 7(b) of the Annexure to the Auditor's Report the item relates to a company that has merged in the company. The matter is being looked into and shall soon be appropriately dealt with. b) With reference to para 9 of the Annexure to the Auditor's Report, the Central Excise Loan has remained unpaid as the matter is pending for the cause of implementing agency claiming compound interest on an interest free excise loan under a scheme of incentives. Matter with relevant agencies will be sorted out in due course of time. No material liability is expected in this regard. Please also refer to paragraph No. 27(f) in Accounts. As regard, the minor delay in repayment of instalments of term loan from bank was due to temporary cash flow gap, which has soon corrected. 12. MANAGEMENT DISCUSSION AND ANALYSIS. The Management Discussion and Analysis are annexed and forms an integral part of this report. 13. PARTICULARS OF EMPLOYEES: There are no employees covered by provision contained in Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules , 2014, as amended. 14. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS Honourable Bombay High Court has given interim stay order till 14th September, 2015, against the winding up order passed against the Company dated 15/04/2015. This was a lawsuit filed by a Freight Forwarder of the company who was deficient in services to the company. Company has deposited Rs. 19,05,179/- Lac with interest as per direction of Honourable Bombay High Court. 15. TECHNOLOGY DEVELOPMENT AND ABSORPTION: The R & D activity in the Company is mainly carried out by the key line manufacturing and technical personnel in alliance with the key technical sales personnel and outsourced consultants. Annexure A attached hereto provides the information required to be disclosed on the efforts made on Technology Development and Absorption as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014. 16. CORPORATE SOCIAL RESPONSIBILITY The provisions of Companies Act, 2013 regarding Corporate Social Reponsibility are not attracted to the company. 17. VIGIL MECHANISM/ WHISTLE BLOWER POLICY In order to ensure that the activities of the company and its employees are conducted in a fair and transparent manner by adoption of standards of professionalism, honesty, integrity and ethical behaviour, the company has adopted vigil mechanism policy. This policy is posted on the website of company. 18. RELATED PARTY TRANSACTIONS There were no contracts or arrangements entered into by the company in accordance with provisions of Section 188 of the Companies Act, 2013 19. FOREIGN EXCHANGE EARNING AND OUTGO: Please refer to paragraph No. 12 b) of accounts for the foreign exchange outgo and earnings of the Company. 20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS There were no transactions for loans made, guarantees given or securities provided during the year pursuant to Section 186(4) of the Companies Act, 2013. 21. BOARD AND OTHER COMMITTEES During the year five Board Meetings and four Audit Committee Meetings were held. The details of the constitution and meetings of the Board and the Committees held during the year are given below. Board of Directors Composition: During the period under review, the Board of Directors comprises of four directors of which two are Independent directors . The Chairman is Independent and Non Executive Director. Mr. Mukul J. Taparia is appointed as additional Director of the company w.e.f. 12th August, 2014 as Non Executive Director of the company. The composition is as under: AUDIT COMMITTEE Constitution The Audit Committee is to oversee the Company's financial reporting process and disclosure of its financial Information to recommend the appointment of Statutory Auditors and fixation of their fees, to review and discuss with the Management & the Auditors about internal control systems, the scope of Audit including the observations of the Auditors, adequacy of the internal audit system, changes in accounting policies & practices and major accounting entries involving estimates, compliances with accounting standards and Listing Agreement entered into with the Stock Exchanges and other legal requirements concerning financial statements and related party transactions, if any, to review the Company's Financial and Risk Management Policies and discuss with the Internal Auditors any significant findings for follow-up thereon, to review the Quarterly, Half yearly and Annual Financial Statements before they are submitted to the Board of Directors. The Audit Committee has established a Vigil Mechanism and adopted a Revised Whistle-Blower Policy at its meeting held on May 29, 2014, which provides a formal mechanism for all Directors and employees of the Company to approach the Management of the Company (Audit Committee in case where the concern involves the Senior Management) and make protective disclosures to the Management about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. The Company affirms that no director or employee of the Company has been denied access to the Audit Committee. NOMINATION AND REMUNERATION COMMITTEE During the year under review, the committee consisted of three directors viz Mr. Rajeev Mundra, Chairman, Mr. Arun Binani , Mr. Mukul Taparia. During the year , the committee met twice, 12th August, 2015 and 12th February, 2015 and both meetings were attended by all members. The Committee was mandated with the following terms of reference: - Determination and approval of the remuneration, commission and special allowance, if any, payable to the Managing Director. - Finalisation and approval of the annual increments, if any, to the Managing Director. The remuneration policy of the company: Shri Sharad Taparia is paid salary of Rs. 12,75000/- p.a... exclusive of perquisites as mentioned in the resolution passed at the general meeting of shareholders of the company approving his appointment as Managing Director and remuneration. No remuneration is payable to the non executive directors. The company does not have any stock option scheme. STAKEHOLDER RELATIONSHIP COMMITTEE The Committee comprises of two Independent Directors and one non executive director . The Stakeholder Relationship Committee of the Board is empowered to oversee the redressal of investors' complaints pertaining to share/debenture transfers, non-receipt of annual reports, interest/dividend payments, issue of duplicate certificates, transmission (with and without legal representation) of shares and other miscellaneous complaints. The composition of the Stakeholder Relationship Committee and attendance at its meeting is as follows: Stakeholder Relationship Committee consists of Mr. Rajeev Mundra, Chairman of the Committee, Mukul Taparia and Mr. Arun Binani. The Company Secretary, Ms. Bhavana Shah, is the compliance officer for this purpose. The committee meeting was held on 7th November, 2014 and was attended by all three members, During the year the Company received NIL complaints. The Committee reviews the system of dealing with and responding to correspondence from all investors. Every complaint letter received from stock exchanges, SEBI, Dept. of Company Affairs etc. and the responses thereto are reviewed by this committee. The committee also reviews the feedback from the investors and approves initiatives for further improvements in investor servicing. The Committee also ensures the expeditious share transfers. 22. NONIMATION AND REMUNERATION COMMITTEE(NRC) / REMUNERATION POLICY The Company has a policy in place for identification of Independence, Qualifications and positive attributes of Directors. The remuneration of the Directors is recommended by NRC to the Board for their approval. 23. ANTI SEXUAL HARASSMENT POLICY The Company has in place a policy on Anti Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Work place (Prevention, Prohibition & Redressal) Act, 2013. There were no instances of Sexual Harassment that were reported during the period under review. 24. EXTRACT OF ANNUAL RETURN The extract of the Annual Return in the prescribed Form No. MGT 9 is appended as Annexure C. 25. APPRECIATION: Your Directors wish to thank all the shareholders, bankers and clients for lending their support in various activities of the Company. Your Directors would like to place on record their appreciation to all the employees who have continued their support during the year. FOR AND ON BEHALF OF THE BOARD, Sd/- Sharad Taparia Managing Director Sd/- Arun Binani Independent Director Date: 10th August,2015 Place: Mumbai. Corporate Office: B-3, MIDC Industrial Area, Village Mira, Mira Road 401104 Dist. Thane. |