Panama Petrochem Ltd
Directors Reports
Moving towards a stronger tomorrow
Amirali Rayani
Chairman
It is my privilege to write to you as the Chairman of Panama Petrochem
Limited and report to you that your Company has once again delivered consistent operating
performance, strong capital structure and liquidity position with healthy debt protection
metrics.
I feel honored to share with you all, that the Company during its 41
years of existence has constantly evolved to stay relevant and meet the needs of its
customers while simultaneously continued to contribute in building sustainable environment
for the society at large and upheld the principles of Panama Petrochem Limited.
Your Company continues to follow highest standards of corporate
governance and considers it as more of an ethical requisite than a regulatory necessity.
It is a matter of great pride that our success over the years has come without ever
compromising on integrity, environmental and social obligations.
I am thus pleased to share with you the 41st Annual Report
for the Financial Year 2022-23.
Your Company's total operating income grew by around 5% in F.Y.
2022-2023 majorly due to improved sales realizations. The operating profitability margins
have remained stable at 13.74% during the financial year ended March 31, 2023. This was on
account of healthy capacity utilization of its manufacturing facilities with favourable
changes in the product mix towards a higher share of value-added products and other
cost-control measures being implemented over a period of time.
The Company has also witnessed an enhancement in the liquidity profile,
backed by improvement in operating cycle, significant cash balance and low utilization of
working capital limits.
Although, we continue to derive our strength from the experience of our
Directors in the petrochemical industry, with diverse product offerings and long-standing
relationship with reputed clientele, however, we have experienced volatile situation
throughout the year, being constrained by vulnerability of the fluctuations in forex rates
and base oil prices which are crucial being a crude oil derivative, there had been a
dramatic increases in the global interest rates, which resulted in high cost of finance of
about '10 Cr. compared to ' 4 Cr. in the last year.
We had a notional exchange loss of around ' 12 Cr. The company's
operations are also exposed to high competition in the industry from other established
players. Despite these conditions, we have maintained EBITDA margins for the whole year of
about 14%, repaid all the short-term debt and have become a debt-free Company in true
sense. Additionally, the Company has also announced a final dividend of ' 5 in addition to
the interim dividend of ' 3 per share, totalling to ' 8 per share equal to 400%, thus
adhering to the dividend payout policy of the Company.
In our quest to achieving higher benchmarks, we have been expanding our
operational footprint nationwide and globally, setting new standards for operational
efficiencies, investing in global resources and redefining paradigms. Our focus on
building long lasting and trusted relationships with our customers, partners, employees
and other stakeholders, and the legacy of caring for our communities, remains the bedrock
of our long-term sustenance.
Today as we reflect on our journey, it gives us immense pride to say
that your Company has grown from strength to strength. We have expanded our market
presence, strengthened strategic alliances and embraced innovation to remain at the
forefront of our industry. Our commitment to excellence and relentless pursuit of customer
satisfaction have earned us a stellar reputation and trust of countless individuals and
businesses worldwide.
As we strive to lead in the petrochemical industry, we are also
committed to safeguarding the environment for future generations and developing our
business in a way that adds value to the local communities. We plan to set higher
benchmarks in terms of development standards, foster a culture of creativity,
collaboration and continuous learning within our organisation, we thrive to implement
cutting-edge, eco-friendly technologies and processes of energy management.
I take this opportunity to express my utmost confidence in the
capabilities of our entire team, acknowledge and place my sincere appreciation to the
contributions of the Board of Directors, team members, employees, and supplier partners
for their continuous and dedicated efforts, despite external pressures, I would also like
to express my deepest gratitude to all our stakeholders for your continuing interest,
commitment and support to the Company.
Together we can achieve greater and newer heights in the years to come.
| Best Wishes, |
| Amirali Rayani |
| Chairman |
#CSEnd#
#DRStart#
DIRECTORS' REPORT
Dear Members
Your Directors have pleasure in presenting the FORTY FIRST Annual
Report of the Company together with the Audited Statement of Accounts for the Financial
Year ended March 31, 2023.
FINANCIAL HIGHLIGHTS
| Particulars |
Standalone |
Consolidated |
|
Financial Year 2022-23 |
Financial Year 2021-22 |
Financial Year 2022-23 |
Financial Year 2021-22 |
| Revenue from operations |
1,708.24 |
1,539.56 |
2,248.72 |
2,132.35 |
| Other income |
6.22 |
5.55 |
6.58 |
5.73 |
| Total income |
1,714.46 |
1,545.11 |
2,255.30 |
2,138.08 |
| Expenses |
|
|
|
|
| Operating expenditure |
1,456.11 |
1,308.11 |
1,939.75 |
1,836.35 |
| Depreciation and amortization expense |
6.10 |
5.44 |
9.43 |
8.41 |
| Total expenses |
1,462.21 |
1,313.55 |
1,949.18 |
1,844.76 |
| Profit before finance costs, exceptional item
and tax |
252.25 |
231.56 |
306.12 |
293.32 |
| Finance costs |
10.10 |
4.24 |
11.57 |
7.06 |
| Profit before exceptional item and tax |
242.15 |
227.32 |
294.55 |
286.26 |
| Exceptional item |
0 |
0 |
0 |
0 |
| Provision towards legal claim |
0 |
0 |
0 |
0 |
| Profit before tax |
242.15 |
227.32 |
294.55 |
286.26 |
| Tax expense |
61.58 |
55.92 |
61.58 |
55.92 |
| Profit for the year |
180.57 |
171.40 |
232.97 |
230.34 |
| Opening balance of retained earnings |
531.97 |
384.77 |
648.63 |
442.49 |
| Closing balance of retained earnings |
658.10 |
531.97 |
821.92 |
648.63 |
OPERATIONAL PERFORMANCE
• Earnings before Interest, Depreciation, and Tax &
Amortization (EBIDTA) on a standalone basis for F.Y. 2022-23 was ' 258.35 Crv
which has resulted in an increase of 9.01% in comparison with the previous year's EBIDTA.
• The Net profit after tax for F.Y.2022-23 was ' 180.57 Crv
as against ' 171.40 Cr. in the previous year, resulting in 5.35% increase.
• The Company's standalone revenue from operations for F.Y.
2022-23 was ' 1,708.24 Cr. which is an increase of 10.96% over the previous year's
revenue.
• Additionally, the consolidated revenue from operations of the
Company for the year ended March 31, 2023 was ' 2,248.72 Cr. which has increased by 5.46%
on a Year on Year basis.
• Net Profit of the Company on a consolidated basis was ' 232.97
Cr. which has increased by 1.14% as that of the previous year.
• EPS on standalone basis improved to ' 29.85 as against ' 28.33
in the previous year.
• Furthermore, EPS on consolidated basis has increased to ' 38.51
from ' 38.08
DIVIDEND
The Board of Directors at its meeting held on May 30, 2023, has
recommended payment of ' 5 (250%) per equity share of the
face value of ' 2 each as final dividend for the financial year ended
March 31, 2023. The payment of final dividend is subject to
the approval of the shareholders at the ensuing Annual General Meeting
(AGM) of the Company.
During the year under review, the Board of Directors of the Company at
its meeting held on November 14, 2022, declared an Interim dividend of ' 3 (150%) per
equity share of ' 2 each. The total dividend amount for the financial year 2022-23,
including the proposed final dividend, amounts to ' 8 (400%) per equity share of the face
value of ' 2 each.
The dividend recommended is in accordance with the Dividend
Distribution Policy of the Company. The Dividend Distribution Policy, in terms of
Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is available
on the Company's website:
http://panamapetro.com/wp-content/uploads/2021/08/ddp-web.pdf
The dividend payout ratio of the Company for the year under review is
20.77%. The total outflow towards dividend on Equity Shares for the year would be ' 48.39
Cr.
The dividend will be paid to the members holding shares in electronic
form as per the beneficiary position downloaded from the Depositories i.e. National
Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) as at
the close of business hours on August 22, 2023 and to those Members holding shares in
physical form, after giving effect to valid transmission and transposition in respect of
valid requests lodged with the Company as at close of business hours, August 22, 2023.
Dividend will be paid within two weeks from the date of declaration of dividend.
TRANSFER TO RESERVES
The Company does not propose to transfer any amount to the General
Reserve out of the amount available for appropriations. CREDIT RATING
Based on the financial and operational performance of the Company for
the year under review, CARE Ratings Limited has reaffirmed the rating on long term bank
facilities to 'CARE A+; Stable' and upgraded the rating on Short Term Bank Facilities to
CARE A1+ from CARE A1.
ICRA Ratings Limited has upgraded its rating on long term bank
facilities/fund based limits to [ICRA]A+(Stable) and on shortterm bank facilities/non-fund
based limits to [ICRA]A1+
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2023 was ' 12.10 Cr.
During the year under review, the Company has not issued any shares. The Company has not
issued shares with differential voting rights. It has neither issued employee stock
options nor sweat equity shares and does not have any scheme to fund its employees to
purchase the shares of the Company.
MATERIAL CHANGES AFFECTING THE COMPANY
There have been no material changes and commitments affecting the
financial position of the Company between the end of the financial year and the date of
this report. There has been no change in the nature of business of the Company.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
As on March 31, 2023 your Company has only one subsidiary, Panol
Industries RMC FZE, UAE which is registered outside India.
The Consolidated Financial Statements of the Company and its subsidiary
are prepared in accordance with the Indian Accounting Standards notified under the
Companies (Indian Accounting Standards) Rules, 2015 (Tnd AS').
The Consolidated Financial Statements of the Company and its
subsidiary, form part of the Annual Report and are reflected in the Consolidated Financial
Statements of the Company.
The Company has adopted a Policy for determining Material Subsidiaries
in terms of Regulation 16(1)(c) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations').
The Policy, as approved by the Board, is uploaded on the Company's
website: http://panamapetro.com/wp-content/uploads/2015/12/msp.pdf
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
accompanying Financial Statements.
PERFORMANCE AND FINANCIAL POSITION OF PANOL INDUSTRIES RMC FZE
Net sales of Panol Industries RMC FZE have decreased from ' 592.80 Cr.
in the previous year to ' 540.48 Cr. during the F.Y 2022-23. Net profit during the period
reduced by 11.08% to ' 52.41 Cr., as compared to a net profit of ' 58.94 Cr. in the
previous year.
Panol Industries RMC FZE, UAE, is a wholly owned subsidiary of the
Company. The Company has a manufacturing facility in Ras Al Khaimah (UAE) with the
objective of manufacturing petroleum specialty products to cater to the GCC & MENA
regions.
There has been no material change in the nature of the business of the
subsidiary. There are no associates or joint venture companies within the meaning of
Section 2(6) of the Companies Act, 2013 ("Act").
The plant enjoys logistic advantage since it is situated on the port
and has direct dedicated pipelines to receive and discharge raw material and finished
products directly to bulk vessels.
During the year under review, no Company has become or ceased to be a
subsidiary of the Company. The Company does not have any associate or joint venture
companies. A statement containing the salient features of the financial position of the
subsidiary companies is detailed in Form AOC 1, annexed as Annexure A.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis, in the ordinary course of business and were
in compliance with the applicable provisions of the Act and the Listing Regulations.
No material Related Party Transactions were entered during the
financial year by the Company. Accordingly, the disclosure of Related Party Transactions,
as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the
Company and hence not provided.
No person or entity belonging to the promoter/promoter group, holds 10%
or more shareholding in the Company, hence disclosure of transactions entered into with
any such persons/entities is not applicable to the Company.
All Related Party Transactions are placed before the Audit Committee
for approval. Prior omnibus approval of the Audit Committee is obtained for the
transactions which are planned/repetitive in nature. Related Party Transactions entered
into pursuant to omnibus approval so granted are placed before the Audit Committee for its
review on a quarterly basis, specifying the nature, value and terms and conditions of the
transactions.
The Company has adopted a Related Party Transactions Policy. The
Policy, as approved by the Board, is uploaded on the Company's website at the web link:
http://panamapetro.com/wp-content/uploads/2022/Q4/Related-Party-Transaction-Policy.pdf
Details of the transactions with Related Parties are provided in the accompanying
financial statements.
RISK MANAGEMENT
Risks being uncertain events that materially impact the organizational
objectives. They are inherent in all business activities and must be balanced while
assessing returns. Successfully managing risks is therefore the key to achieve Company
objectives and ensure long-term sustainable growth of the Business. With this in mind and
in accordance with the provisions of the Act and Regulation 21 of the Listing Regulations
your Company has constituted a Risk Management Committee which has been entrusted with the
responsibility to assist the Board in (a) approving the Company's Risk Management
Framework and (b) overseeing all the risks that the organization faces such as strategic,
financial, liquidity, security, regulatory, legal, and other risks that have been
identified and assessed to ensure that there is a sound Risk Management Policy in place to
address such concerns / risks. The Risk Management process covers risk identification,
assessment, analysis and mitigation. The Audit Committee has additional oversight in the
area of financial risks and controls.
The Company has adopted a Risk Management Policy in accordance with the
provisions of the Act and Regulation 21 of the Listing Regulations.
DIRECTORS
As on March 31, 2023, your Company's Board comprised of 8 Directors
with considerable experience in their respective fields. Of these, 4 are Executive
Directors and 4 Non-Executive (Independent) Directors. The Chairman of the Board is an
Executive Director.
APPOINTMENT & CESSATION OF DIRECTORS
In accordance with the provisions of Section 152 of the Act and the
Company's Articles of Association, Mr. Hussein Rayani (DIN:00172165), Director retires by
rotation and, being eligible offers himself for re-appointment. The Board recommends his
re-appointment for the consideration of the Members of the Company at the forthcoming
Annual General Meeting.
The Board of directors at its meeting held on May 30, 2023, on
recommendations of the Nomination & Remuneration Committee, and subject to approval of
shareholders, appointed Mr. Ashok Mukhi (DIN:01262560) and Mr. Arvind Shah (DIN:01645534)
as Additional Directors designated as Independent Directors on the Board of Directors of
the Company in accordance with Section 149(4) of the Act, with effect from August 01, 2023
to hold office for a term of 5 (five) consecutive years.
Furthermore, the Board of directors at its meeting held on May 30,
2023, on recommendations of the Nomination & Remuneration Committee, and subject to
approval of shareholders, appointed Mr. Arif Rayani (DIN:00245647) as Additional Director
designated as Whole-Time Director (Executive) on the Board of Directors of the Company in
accordance with Section 152 read with other applicable provisions of the Companies Act,
2013 ("the Act") and the Companies (Appointment and Qualification of Directors)
Rules, 2014 with effect from August 01, 2023 to hold office for a term of 5 (five)
consecutive years.
The Board of Directors at its meeting held on July 10, 2023, on
recommendations of the Nomination & Remuneration Committee and subject to approval of
shareholders, approved the re-appointment of Mr. Amirali Rayani (79 years) (DIN:00002616),
as a Whole-time Director designated as Chairman(Executive) of the Company with effect from
June 29, 2024.
Mr. Amin Rayani would relinquish his position of CEO and MD of the
Company with effect from October 01, 2023. The Board places on record its appreciation of
the invaluable services of Mr. Amin Rayani as the CEO and MD. The Board re-designated and
appointed Mr. Samir Rayani (DIN:00002674) as CEO and MD with effect from October 01, 2023
for a period of five years, subject to approval of the Members.
Brief profiles of the directors seeking appointment/re-appointment have
been given in the Notice convening the Annual General Meeting.
The Company has received disclosures from all the Directors of the
Company as mandated under Section 164(2) and Section 184(1) of the Companies Act, 2013.
Additionally, the Independent Directors of the Company have submitted declarations
confirming that they meet with the criteria of Independence as prescribed both under
sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(l)(b) of the
Listing Regulations.
The Board of Directors, based on the declaration(s) received from the
Independent Directors, have verified the veracity of such disclosures and confirm that the
Independent Directors fulfil the conditions of independence specified in the Listing
Regulations and the Act and are independent of the Management of the Company.
The Board is of the opinion that the Independent Directors of the
Company hold highest standards of integrity and possess requisite qualifications,
experience and expertise in the fields of science and technology, human resources,
strategy, auditing, corporate governance, etc.
The Independent Directors of the Company have included their names in
the data bank of Independent Directors maintained with the Indian Institute of Corporate
Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment
& Qualification of Directors) Rules, 2014.
In terms of Regulation 25(8) of the Listing Regulations, the
Independent Directors have confirmed that they are not aware of any circumstance or
situation, which exist or may be reasonably anticipated, that could impair or impact their
ability to discharge their duties.
During the year under review, the non-executive directors of the
Company had no pecuniary relationship or transactions with the Company.
Details of Familiarisation Programme for the Independent Directors are
provided separately in the Corporate Governance Report.
APPOINTMENTS/RESIGNATIONS OF THE KEY MANAGERIAL PERSONNEL
No Key Managerial Personnel has resigned or has been appointed during
the financial year 2022-2023.
BOARD AND COMMITTEE MEETINGS
Your Company's Board of Directors met four times during the financial
year under review. A calendar of Meetings is prepared and circulated in advance to your
Directors.
Audit Committee of the Company as constituted by the Board is headed by
Mr. Madan Mohan Jain with Mr. Samir Rayani and Mr. Mukesh Mehta as Members. There have not
been any instances during the year when recommendations of the Audit Committee were not
accepted by the Board. All the recommendations made by the Audit Committee were accepted
by the Board.
Details of the composition of the Board, its Committees and the
Meetings held and attendance of the Directors at such Meetings, are provided in the
Corporate Governance Report. The intervening gap between the Meetings was within the
period prescribed under the Act and the Listing Regulations.
PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTOR
The Nomination and Remuneration Committee is responsible for developing
competency requirements for the Board based on the industry and strategy of the Company.
Board composition analysis reflects in-depth understanding of the Company, including its
strategies, environment, operations, financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to
refresh the Board on a periodic basis, including each time a Director's appointment or
re-appointment is required. The Committee is also responsible for reviewing and vetting
the resume of potential candidates vis-a-vis the required competencies and meeting
potential candidates, prior to making recommendations of their nomination to the Board. At
the time of appointment, specific requirements for the position, including expert
knowledge expected, is communicated to the appointee.
CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES AND
INDEPENDENCE OF A DIRECTOR
The Nomination and Remuneration Committee has formulated the criteria
for determining qualifications, positive attributes and independence of Directors in terms
of provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule
II of the Listing Regulations.
Independence: In accordance with the above criteria, a Director will be
considered as an 'Independent Director' if he/she meets with the criteria for 'Independent
Director' as laid down in the Companies Act, 2013 and Regulation 16(l)(b) of the Listing
Regulations.
Qualifications: A transparent Board nomination process is in place that
encourages diversity of thought, experience, knowledge, perspective, and gender. It is
also ensured that the Board has an appropriate blend of functional and industry expertise.
While recommending the appointment of a Director, the Nomination and Remuneration
Committee considers the manner in which the function and domain expertise of the
individual will contribute to the overall skill-domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the
Companies Act, 2013, the Directors on the Board of the Company are also expected to
demonstrate high standards of ethical behavior, strong interpersonal skills and soundness
of judgment. Independent Directors are also expected to abide by the 'Code for Independent
Directors' as outlined in Schedule IV to the Act.
GOVERNANCE GUIDELINES
The Company has adopted Governance Guidelines on Board Effectiveness.
The Governance Guidelines encompasses aspects relating to composition and role of the
Board, Chairman and Directors, Board Diversity, Definition of Independence, Term of
Directors, and Committees of the Board. It also covers aspects relating to Nomination,
Appointment, Induction and Development of Directors, Director's Remuneration, Subsidiary
oversight, Code of Conduct, Board Effectiveness Review and Mandates of Board Committees.
ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS
COMMITTEES AND OF DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and Listing
Regulations, the Board has carried out annual evaluation of its own performance,
performance of the Directors as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluation
criteria, procedure and time schedule for the Performance Evaluation process for the
Board, its Committees and Directors.
The Board's functioning was evaluated on various aspects, including
inter alia structure of the Board, qualifications, experience and competency of Directors,
diversity in Board and process of appointment; Meetings of the Board, including regularity
and frequency, agenda, discussion and dissemination of information; functions of the
Board, including strategy and performance evaluation, corporate culture and values,
governance and compliance, evaluation of risks, grievance redressal for investors,
stakeholder value and responsibility, conflict of interest, review of Board evaluation and
facilitating Independent Directors to perform their role effectively; evaluation of
management's performance and feedback, independence of management from the
Board, access of Board and management to each other, succession plan
and professional development; degree of fulfillment of key responsibilities, establishment
and delineation of responsibilities to Committees, effectiveness of Board processes,
information and functioning and quality of relationship between the Board and management.
Directors were evaluated on aspects such as attendance and contribution
at Board/Committee Meetings and guidance/support to the management outside Board/Committee
Meetings. In addition, the Chairman was also evaluated on key aspects of his role,
including setting of the strategic agenda of the Board, encouraging active engagement by
all Board members, motivating and providing guidance to the Managing Director & CEO.
Areas on which the Committees of the Board were assessed included
degree of fulfillment of key responsibilities, adequacy of Committee composition and
effectiveness of meetings. The performance evaluation of the Independent Directors was
carried out by the entire Board, excluding the Director being evaluated. The performance
evaluation of the Chairman and the NonIndependent Directors was carried out by the
Independent Directors who also reviewed the performance of the Board as a whole. The
Nomination and Remuneration Committee also reviewed the performance of the Board, its
Committees and of the Directors. The Chairman of the Board provided feedback to the
Directors on an individual basis, as appropriate. Significant highlights, learning and
action points with respect to the evaluation were presented to the Board on regular
intervals.
The above criteria are broadly based on the Guidance Note on Board
Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
REMUNERATION POLICY
Your Company has adopted a Remuneration Policy for the Directors, Key
Managerial Personnel and Senior Management, pursuant to the provisions of the Act and
Listing Regulations.
The philosophy for remuneration of Directors, Key Managerial Personnel
of the Company is based on the commitment of fostering a culture of leadership with trust.
The Remuneration Policy of the Company is aligned to this philosophy.
The remuneration policy can be accessed at:
http://panamapetro.com/wp-content/uploads/2Q15/12/Nomination-and-Remuneration-policy.pdf
The Nomination and Remuneration Committee has considered the following
factors while formulating the Policy:
(i) The level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate Directors to perform in a manner of the quality
required to run the Company successfully;
(ii) Relationship of remuneration to performance is clear and meets
appropriate performance benchmarks; and
(iii) Remuneration to Directors, Key Managerial Personnel and Senior
Management involves a balance between fixed and incentive pay reflecting short and
long-term performance objectives appropriate to the working of the Company and its goals.
Details of the Remuneration Policy are given in the Corporate
Governance Report.
LISTING OF SHARES
Your Company's shares are listed on the BSE Limited and National Stock
Exchange of India Limited. The Company has paid the listing fees for the financial year
2Q22-2Q23. The GDRs of the Company are listed on Luxembourg Stock Exchange.
CORPORATE GOVERNANCE
Your Company has implemented all the mandatory requirements pursuant to
Listing Regulations. A separate report on Corporate Governance is given as a part of the
Annual Report along with the certificate received from the Practicing Company Secretary,
M/s. Milind Nirkhe & Associates, Company Secretaries, confirming the compliance.
PUBLIC DEPOSITS
During the year under review, your Company did not accept any deposits
from the public.
INSURANCE
Your Company has taken adequate insurance cover for all its assets.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial controls with
reference to financial statements. Your Company has adopted the policies and procedures
for ensuring the orderly and efficient conduct of its business, including adherence to the
Company's policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records and the timely
preparation of reliable financial disclosures.
The Audit Committee has satisfied itself on the adequacy and
effectiveness of the internal financial control systems laid down by the management. The
Statutory Auditors have confirmed the adequacy of the internal financial control systems
over financial reporting.
CORPORATE SOCIAL RESPONSIBILITY
As an integral part of our commitment to good corporate citizenship,
your Company strongly believes in adopting steps to improve the quality of life of the
people in the communities around us.
Founded on the philosophy that society is not just another stakeholder
in its business, but the prime purpose of it, the Company, across its various operations
is committed to making a positive contribution towards achieving long-term stakeholder
value creation.
As the operations have expanded, your Company has retained a collective
focus on the various areas of corporate sustainability that impact people, environment and
the society at large.
The Board has constituted a Corporate Social Responsibility Committee
headed by Mr. Mukesh Mehta as Chairman, with Mr. Amin Rayani and Ms. Nargis Kabani as
Members. The Company has adopted a Corporate Social Responsibility (CSr) Policy in
compliance with the provisions of the Companies Act, 2013. As part of its CSR initiatives,
the Company has undertaken projects in the areas of promoting health care and education.
The above projects are in accordance with Schedule VII of the Act. The Company has spent '
2.70 Cr. (after setting-off the excess amount spent during F.Y. 2021-22) towards the CSR
projects during the current Financial Year 2022-23.
The Annual Report on CSR activities is annexed as Annexure B.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT
WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the
Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under. The
Policy aims to provide protection to all its employees at the workplace and redress
complaints of sexual harassment and for matters connected or incidental thereto, with the
objective of providing a safe working environment, where employees feel secure. The
Company has also constituted an Internal Complaints Committee, to deal with the complaints
of sexual harassment and recommend appropriate action there upon.
The Company has not received any complaint of sexual harassment during
the financial year 2022-23.
TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, the
amounts of dividend remaining unpaid or unclaimed for a period of seven years from the
date of its transfer to the unpaid dividend account of the Company are required to be
transferred to the Investor Education and Protection Fund (IEPF) set up by the Government
of India. Consequently, no claim shall lie against the Company in respect of any such
amounts.
The amount of unpaid/unclaimed dividend up to the financial year
2014-2015 has been transferred to IEPF. Members who have not yet encashed their dividend
warrant(s) for the financial year ended March 31, 2016 and for any subsequent financial
year, are requested to make their claims to the Company without any delay, to avoid
transfer of their dividend/shares to the Fund/IEPF Demat Account.
Members are also requested to note that, pursuant to the provisions of
Section 124 of the Act and the IEPF Rules, the Company is obliged to transfer all shares
on which dividend has not been paid or claimed for seven consecutive years or more to an
IEPF Demat Account.
Members/claimants whose shares, unclaimed dividend, have been
transferred to the IEPF Demat Account or the Fund, as the case may be, may claim the
shares or apply for refund by making an application to the IEPF Authority in Form IEPF- 5
(available on iepf.gov.in) along with requisite fee as decided by the IEPF Authority from
time to time.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal
mechanism to the Directors, employees and other stakeholders of the Company, to report
their concerns about unethical behavior, actual or suspected fraud or violation of the
Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards
against victimization who avail the mechanism and also provides for direct access to the
Chairman of the Audit Committee. It is affirmed that no personnel of the Company have been
denied access to the Audit Committee.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or
Courts or Tribunals which would impact the going concern status of the Company and its
future operations.
AUDITORS
• STATUTORY AUDITORS
Pursuant to Sections 139 & 142 of the Companies Act, 2013, and the
Rules made thereunder, JMR & Associates LLP, Chartered Accountants, (Registration
No.106912W/W100300) Mumbai, was appointed as Statutory Auditors of the Company to hold
office for a period of 5 (Five) years from the conclusion of the Annual General Meeting
(AGM) held in 2020 until the conclusion of the Annual General Meeting to be held in the
year 2025.
The Notes on financial statement referred to in the Auditors' Report
are self-explanatory and do not call for any further comments. The Auditors' Report does
not contain any qualification, reservation, adverse remark or disclaimer.
The Auditors' Report for the financial year ended March 31, 2023 on the
financial statements of the Company is a part of this Annual Report.
• COST AUDITORS
The Company is required to maintain cost records as specified by the
Central Government under sub-section (1) of Section 148 of the Act, read with the
Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, and
accordingly such accounts and records are made and maintained in the prescribed manner.
Based on the Audit Committee recommendation at its meeting held on May
30, 2023, GMVP & Associates LLP (LLPIN:- AAG- 7360) has been appointed by the Board as
the Cost Auditors of the Company for conducting an audit of the cost accounting records of
the Company for financial year commencing from April 01, 2023 to March 31, 2024.
A Certificate from GMVP & Associates LLP, has been received,
confirming that they are free from the disqualifications, as specified in the provisions
of Section 141 of the Act and Rules framed thereunder.
Pursuant to the provisions of Section 148 of the Act read with the
Companies (Audit and Auditors) Rules, 2014, Members are requested to consider the
ratification of the remuneration payable to GMVP & Associates LLP.
• SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
of the Company had appointed CS. Milind Nirkhe, Practicing Company Secretary (Proprietor),
practicing under the name & style M/S Milind Nirkhe & Associates, CP No:2312 to
undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The
Secretarial Audit Report for the year under review is annexed as Annexure C.
The Auditors' Report and the Secretarial Audit Report for the financial
year ended March 31, 2023 do not contain any qualification, reservation, adverse remark or
disclaimer.
SECRETARIAL STANDARDS OF ICSI
The Company complies with all applicable secretarial standards issued
by the Institute of Company Secretaries of India. REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and
Secretarial Auditors have not reported to the Audit Committee, any instances of frauds
committed in the Company, by any of its Officers or Employees, under Section 143(12) of
the Companies Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
A. Conservation of Energy:
The Company is aware of energy consumption and environmental issues
related to it and is continuously making sincere efforts towards conservation of energy.
The Company is in fact engaged in the continuous process of further energy conservation
through improved operational and maintenance practices.
The Company has taken adequate actions to conserve the energy by
introducing technically improved blending system resulting in reduction of process time.
(i) Steps Taken or Impact on Conservation of Energy:
In line with the Company's commitment towards conservation of energy,
all plants continue to direct their efforts towards improving energy efficiency through
innovative measures, reduce wastage and optimize consumption. Some of the measures taken
by the Company in this direction are as under:
1. The Company has upgraded its regular mixing technology which has
resulted in a good amount of energy conservation.
2. Company has upgraded its process technology to maximum automation,
consequently saving a lot of energy that was initially utilized.
3. Solar power system have been installed resulting in huge reduction
of energy consumption.
4. At its Plants, the Company has carried out various actions to
optimize energy consumption and reduce losses.
5. Energy efficient motors and solar plants are being installed in
order to optimize use of power.
(ii) Steps taken by the Company for utilizing alternate sources of
Energy:
In addition to various initiatives around energy efficiencies, the
Company is also focused on renewable sources of energy. Various steps have been taken for
utilizing alternate sources of energy.
(iii) Capital Investment on Energy Conservation Equipment:
During the year, the Company has invested in various energy
conservation equipment, which included, various energy efficient electric motors. The
Company has also installed power efficient material handling and flowing system which has
played a major role in energy saving.
The Company has also improved its thermo packs to get better fuel
efficiency and lower emission stack.
B. Technology Absorption:
(i) Efforts made towards Technology Absorption:
Technology is a key enabler, core facilitator and is one of the
strategic pillars of the Company. Since inception your Company has been at the forefront
of leveraging technology to provide better products and services to its customers.
The Company has an updated R&D Centre at its Ankleshwar Plant. It
is the technical centre of the Company and has been the backbone for most of our major
product breakthroughs. This Centre at Ankleshwar is fully equipped with modern testing
& analytical equipment's. The Centre is operated by the team of well qualified
technocrats, as a result, the in-house R&D unit of your Company has been recognized by
the Ministry of Science & Technology & the Department of Scientific and Industrial
Research (DSIR). With the help of this recognition and the in-house R&D facility the
Company has been able to develop new products with higher quality.
Additionally, the Company shall continue to spend on R&D activities
which will also assist in research for import substitution, energy conservation and
control of pollution.
Our technical center has developed various innovative products with
international quality standards and techniques to ensure zero environmental impact. These
products are de-aromatized low & high viscosity oils with low PAH & PCA content as
per European norms as a result of which it is not only well accepted and appreciated in
domestic & international markets but is also used by all large rubber industries, Ink
& Textile industries.
Consequently, these products have reduced the amount of imports with
minimum environmental impact and carbon footprint.
Your Company is also in the process of developing ecofriendly
pesticides with minimum residual impact which is suitable for organic farming as well.
Your Company is planning to collaborate with leading agricultural universities for further
research in this regard.
(ii) Benefits derived like product improvement, cost reduction, product
development or import substitution:
Technology has responded by being true strategic partner with business.
The Company has derived many benefits from R&D and technology absorption which
includes product development, product improvement & effective cost management.
Technology has also played a major role in ensuring high level of service delivery.
(iii) In case of imported technology (imported during the last three
years reckoned from the beginning of the financial year):
(a) the details of technology imported: The Company has not imported
any technology during the last three financial years.
(b) the year of import: Not Applicable
(c) whether the technology has been fully absorbed: Not Applicable
(d) if not fully absorbed, areas where absorption has not taken place,
and the reasons thereof: Not Applicable Expenditure on research & development
The expenditure on R&D activities incurred during the year is given
hereunder:
| Particulars |
(' in Cr.) |
| Capital |
0.00 |
| Revenue |
0.00 |
| Total R&D Expenditure |
0.00 |
| Total Turnover |
1,708.24 |
| Total R&D Expenditure as a Percentage of total turnover |
0% |
C. Foreign exchange earnings and outgo:
i. Export Activities: During the year under review the Company has made
Import/Export as given in (ii) below.
ii. Foreign Exchange Earnings and Outgo:
| Total Foreign Exchange Inflow |
608.24 |
| Total Foreign Exchange Outflow |
863.67 |
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Act read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, and the information required under Rule 5(2) and (3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure D forming
part of this Report.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on March 31, 2023 is available on the Company's website at
http://panamapetro.com/wp-content/uploads/2023/07/Annual-Return 22-23.pdf
AUDITORS' REPORT
Comments made by the Statutory Auditors in the Auditors' Report are
self-explanatory and do not require any further clarification.
MANAGEMENT DISCUSSION & ANALYSIS, BUSINESS RESPONSIBILITY &
SUSTAINABILITY REPORT AND CORPORATE GOVERNANCE REPORT
The Management Discussion and Analysis Report, the Business
Responsibility & Sustainability Report and the Report on Corporate Governance, as
required under the Listing Regulations, forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of the provisions of Section 134(3)(c) and 134(5) of the
Companies Act, 2013, and to the best of their knowledge and belief and according to the
information and explanations obtained by them and same as mentioned elsewhere in this
Report, the attached Annual Accounts and the Auditors' Report thereon, your Directors
confirm that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material departures;
(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 the Company at the end of the
financial year and of the profit 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 Act, for safeguarding
the assets of the 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;
(vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
ACKNOWLEDGEMENT
We thank our Clients, Investors, Dealers, Suppliers and Bankers for
their continued support during the year. We place on record our appreciation for the
contributions made by employees at all levels. Our consistent growth was made possible by
their hard work, solidarity, co-operation and support.
|
By Order of the Board of Directors |
|
For Panama Petrochem Ltd. |
|
Amirali E. Rayani |
| Date : July 10, 2023 |
Chairman |
| Place : Mumbai |
DIN:00002616 |