Your directors have pleasure in presenting the 20th board report together with the Audited Financial Statement of the Company for the Financial Year ended 31st March 2024 (“the period”).
FINANCIAL RESULTS
Your Company sustained a good performance during the FY 2023-24. The key highlights of the financial performance, as stated in the Audited Financial Statements, along with the corresponding performance for the previous year are as under:
|
Particulars
|
Year ended 31st March 2024 (INR)
|
Year ended 31st March 2023 (INR)
|
|
Turnover
|
5777.04
|
4317.89
|
|
Other Income
|
24.76
|
4.22
|
|
Total Expenses
|
5184.41
|
3867.46
|
|
Profit/(Loss) Before Tax
|
617.39
|
454.66
|
|
Current Tax
|
172.85
|
132.73
|
|
Deferred Tax
|
0.12
|
11.50
|
|
MAT Tax
|
-
|
-
|
|
MAT Credit Entitlement
|
-
|
-
|
|
Profit/(Loss) For the Year
|
444.42
|
310.43
|
FINANCIAL PERFORMANCE
Your Company’s directors are pleased to inform you that, company has earned a profit of Rs. 444.42 Lakhs as compared to previous year’s profit Rs. 310.43 Lakhs. Company has managed to increase the turnover from Rs. 4317.89 Lakhs to Rs. 5777.04 Lakhs. This jump in profits is due to growing sales and better performance of the company.
LEGAL AND REGULATORY
Compliance with laws and regulations is an essential part of your Company’s business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.
AWARDS AND RECOGNITION
The Company has received several awards and recognition as mentioned below:
|
Top Domestic Sales Award
|
M/S Pentagon Rubber Limited honored with Top Domestic Sales Award presented by AIRIA (All India Rubber Industries Association)
|
|
India SME 100 Award
|
M/S Pentagon Rubber Limited honored with India SME 100 Award presented by Shri Narayan Rane, Honble Minister of MSME
|
|
Business Excellence Award 2024
|
M/S Pentagon Rubber Limited honored with Business Excellence Award 2024 presented by Sr. Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, Government of India; Smt Mercy Epao, Joint Secretary Ministry of Micro Small and Medium Enterprises, Government of India and Shri Avinash Gupta, Managing Director and CEO India, Dim & Bradstreet
|
DIVIDEND
Considering future growth projects of the company, the board has decided not to declare any dividend to the shareholders for the financial year 2023-24.
SHARE CAPITAL
A) Authorized Share Capital
The Authorized Share Capital of the company as on 31st March, 2024 was Rs. 8,00,00,000 (Rupees Eight Crores only) divided into 80,00,000 (Eighty Lakhs Only) Equity shares of Rs. 10/- (Ten Only) each.
B) Paid Up Share Capital
The issued share capital of the company as on 31st March, 2024 was Rs, 7,71,00,000/- (Rupees Seven Crores Seventy-One lakhs only) divided into 77,10,000 (Seventy-Seven lakhs Ten Thousand Only) Equity shares of Rs. 10/- (Ten Only) each.
During the year under review, the company has issued 23,10,000 (Twenty-Three Lakhs Ten Thousand only) equity shares of the face value of Rs. 10/- (Ten Only) each pursuant to the Initial Public Offer ("IPO") of the Company.
MATERIAL CHANGES
Our company planned to expand its capital base, so on 07th January, 2023, the Board of Directors proposed to issue and list the shares of the Company on National Stock Exchange Limited (NSE)- SME Platform. On 11th January, 2023, the members of the company had passed a resolution and agreed with Board of Directors to list the securities. The company then commenced with issue process and took necessary steps like appointing lead merchant banker, share transfer agent, market maker etc. All the material contracts, material documents along with final prospectus copy has been filed with the Registrar of Companies, Chandigarh vide E- form GNL-2. On 07th July 2023 successfully got listed on the SME platform of National Stock Exchange Limited (NSE)- NSE Emerge.
The company had made a fresh issue up to 23,10,000 Equity shares which were oversubscribed by nearly 100 times. The Company expresses immense gratitude to all parties to issue for making this an affluent issue.
TRANSFER TO RESERVE
The Board has decided to retain the entire amount of profit for the Financial Year 2023-24 and not to transfer any amount to general reserve.
PUBLIC DEPOSITS
During the year under review, your Company has neither accepted nor renewed any deposits from the public within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your directors confirm that Secretarial Standards issued by the Institute of Company Secretaries of India, have been complied with.
HOLDING, SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES:
As on 31st March 2024, the Company does not have any Holding, Subsidiary, Associate or Joint Ventures.
RELATED PARTY TRANSACTION
There are no contracts or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The details of Loans and Investments and guarantees covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements forming part of Annual Report.
BOARD MEETINGS
The Board has met 13 times during the financial year 2023-24.
|
S. No.
|
Dates
|
Number of Directors Present
|
|
1.
|
10th April, 2023
|
6
|
|
2.
|
28th April, 2023
|
6
|
|
3.
|
02nd May, 2023
|
6
|
|
4.
|
18th May, 2023
|
6
|
|
5.
|
04th July,2023
|
6
|
|
6.
|
05th July,2023
|
6
|
|
7.
|
01st September, 2023
|
6
|
|
8.
|
22nd September, 2023
|
6
|
|
9.
|
14th November, 2023
|
6
|
|
10.
|
30th December, 2023
|
6
|
|
11.
|
29th January, 2024
|
6
|
|
12.
|
06th February. 2024
|
6
|
|
13.
|
30th March, 2024
|
6
|
EXTRACT OF ANNUAL RETURN
In accordance with section 134(3 )(a) of the Act, the annual return as referred in section 92(3) of the Act, for the financial year under review shall be placed on the website of the Company at www.pentagonrubber.com.
DEMATERIALIZATION OF SHARES
Company’s shares are in dematerialization form with National Security Depository Limited (NSDL).
DETAILS OF FRAUD REPORTED BY AUDITORS
During the year under Review, no details of fraud reported by auditors of the company under Section 143(12) of the Companies Act, 2013.
ADEQUACY OF INTERNAL CONTROLS SYSTEM AND THEIR COMPLIANCE
Your Company has in place adequate internal financial controls with reference to financial statements. The internal financial controls with reference to the Financial Statements are adequate in the opinion of the Board of Directors. Also, your Company has a proper system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions are authorized, recorded and reported correctly.
During the Financial Year 2023-24, such controls were tested and no reportable material weakness in the design or operation was observed.
STATUTORY AUDITORS AND THEIR REPORT
M/s. S Jain & Co., Chartered Accountants (FRN: 0088469) were appointed as the Statutory Auditor of the Company to hold office for period of 5 (Five) years from the conclusion of the Annual General Meeting of the Company held in the year 2019 till the conclusion of the Annual General Meeting of the Company to be held in the year 2024. Now, there tenure is expiring in the ensuing Annual General Meeting.
Pursuant to this, M/s. S Jain & Co., Chartered Accountants (FRN: 0088469), are proposed to be re-appointed as the Statutory Auditors to audit the accounts of the Company for a period of 5 consecutive financial years starting from 2024-25 to 2028-29.
Further, the notes on financial statements referred to in the Auditors’ Report are self -explanatory and do not call for any further comments. They do not contain any qualification, reservation, disclaimer or adverse remarks.
SECRETERIAL AUDIT
M/s PDM & Associates, Practising Company Secretaries were appointed as the Secretarial Auditors of the Company on 30.12.2023 for conducting a secretarial audit of the company for a tenure of three years from the financial year 202324 to financial year 2025-26 pursuant to provision of section 204 read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Secretarial Audit Report of the Company as prescribed under Section 204 of the Companies Act, 2013, for the FY ended March 31, 2024, is annexed herewith as “Annexure III” to this Report. The Secretarial Audit report does not contain any qualification, reservation or adverse remarks.
RESERVATION AND QUALIFICATION ON AUDITOR’S REPORT
The Auditors’ Report on the financial statements of the Company for the financial year ended 31st March 2024 does not contain any qualifications, reservations, adverse remarks or disclaimers. The Auditor’s Report is enclosed with the financial statements forming part of the Annual Report.
RISK MANAGEMENT
Periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the company to control risk through a properly defined plan. The risks are classified as financial risks, operational risks and market risks. The risks are considered while preparing the annual business plan for the year. The Board is also periodically informed of the business risks and the actions taken to manage them. The Company has formulated a policy for Risk management with the following objectives:
•Provide an overview of the principles of risk management
•Explain approach adopted by die Company for risk management
•Define the organizational structure for effective risk management
•Develop a “risk” culture that encourages all employees to identify risks and associated
•opportunities and to respond to them with effective actions.
•Identify, access and manage existing and new risks in a planned and coordinated manner with minimum disruption and cost, to protect and preserve Company’s human, physical and financial assets.
APPLICATION MADE UNDER INSOLVENCY AND BANKRUPTCY CODE 2016
The Company has not initiated any proceedings under Insolvency Bankruptcy Code 2016 during the financial year 2023-24.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Company has adopted a Policy under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 and rules framed thereunder. Company is committed to provide a safe and secure environment to its women employees across its functions and other women stakeholders, as they are considered as integral and Important part of the Organization. An Internal Complaints Committee (ICC) with requisite number of representatives has been set up to redress complaints relating to sexual harassment, if any, received from women employees and other women associates. All employees (permanent, contractual, temporary, trainees) are covered under this policy, which also extends to cover all women stakeholders of your Company. The following is the summary of sexual harassments complaints received and disposed off during the financial year ended March 31,2024.
• No. of Complaints Received - Nil
• No. of Complaints disposed off - Nil
• No. of Cases Pending for more than 90 Days - Nil
• No. of Workshops of awareness program against sexual harassment carried out : Mention Any Training Program conducted during year under review Nature of action taken by the employer or district officer; Nil.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH & DEVELOPMENTAND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014 forming part of Directors' Report for the year ended 31 March, 2023 is as under:
Conservation of Energy: The Company's operations involve low energy consumption. However efforts to conserve and optimize the use of energy through improved operational methods and other means will continue.
Technology Absorption: The Technology available and utilized is continuously being upgraded to improve overall performance and productivity.
Research & Development: Your Company believes that research & development is a continuous process for sustained product improvement. Our research & development activities help us in product and service improvement, new cutting edge product development and are focused to provide unique benefits to our customers. Such methods do not involve any specific cost burden to the Company.
Foreign Exchange Earnings & Out go: (in lakhs)
|
Total Foreign Exchange Earnings in 2023-24
|
Total Foreign Exchange outflow 202324
|
Total Foreign Exchange Earnings in 2022-23
|
Total
Foreign
Exchange
outflow
2022-23
|
|
110.01
|
1767.69
|
100.80
|
1135.50
|
DIRECTOR’S RESPONSIBILITY STATEMENT
As required under provisions of Section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
i. In the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
ii. The Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the of the company at the end of the financial year and of the Profit/loss of the Company for that period;
iii. the Directors had 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. 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.
CORPORATE GOVERNANCE
As per Regulation 15 read with Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 relating to Corporate Governance Disclosure does not apply to your Company listed on the SME platform. Hence, your Company is not required to make disclosures in Corporate Governance Report.
BOARD EVALUATION
The Company is led by a diverse, experienced and competent Board. The performance evaluation of the individual members of the Board (including the Chairman) for financial year 2023-24, was carried out internally. This was based on a structured questionnaire which cover various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Member’s strengths and contribution, execution and performance of specific duties, obligations and governance and feedback from each Director.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSON
The Directors and Key Managerial Personnel of the Company as on date are:
|
Name
|
Designation
|
Address
|
Date of Appointment
|
|
Mr. Ashish Jain
|
Chairman cum Managing Director
|
45, Sector-7, Panchkula, Haryana-134109, India
|
26/04/2004
|
|
Mr. Anil Jain
|
Whole-Time Director
|
Olive 701, Salcon the Verandas, Golf Course Road, Sector-54, Gurgaon, Haryana-122011, India
|
26/04/2004
|
|
Mr. Saurabh Jain
|
Whole-Time Director
|
409, Sector-7, Panchkula, Haryana-134109, India
|
26/04/2004
|
|
Mr. Lalit Jain
|
Non-Executive Director
|
Villa-105, Laburnum Sushant Lok, Block-A, Sector-28, Gurgaon, Haryana-122001
|
26/04/2004
|
|
Mr. Manish Verma
|
Independent Director
|
322, Lane 9 G, Behind Kisan Bhawan, Sector - 3 5A, Chandigarh - 160022
|
11/01/2023
|
|
Mrs. Preet Kamal Kaur Bhatia
|
Independent Director
|
152, Golden Avenue, Near Har Krishan Public School, Amritsar-143001, Punjab, India.
|
11/01/2023
|
|
Ms. Shubhi Kishore
|
Company Secretary
|
Gulabgarh Road, Village Behra Dist. S.A.S. Nagar,
Derabassi Mohali, Punjab-140507, India
|
16/01/2023
|
|
Mr. Vamn Jain
|
Chief Financial Officer
|
Gulabgarh Road, Village Behra Dist. S.A.S. Nagar, Derabassi Mohali, Punjab-140507, India
|
16/01/2023
|
There was no change in the directors and key managerial personnel during the Financial Year 2023-24.
BOARD AND COMMITTEES’ COMPOSITION AND THEIR MEETINGS
Annual Evaluation of Directors, its Committees and Board:
The formal annual evaluation of the performance of the board and that of its committees has been carried out through a structured evaluation process covering various aspects of the board’s functioning such as the Board structure & composition, effectiveness of the Board process, information flow & functioning, quality of relationship between the board and the Management, establishment, and delineation of the responsibilities to Committees etc. The performance of Individual Directors was evaluated on parameters such as professional conduct, performance of duties, role and functions, contribution to the Board / Committee etc. by self - evaluation process. The directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committee with your Company.
The composition of the Committee and the details of meetings attended by its members are given below:
AUDIT COMMITTEE
During the financial year under review, 5 (Five) meetings were held by the Audit Committee viz, 18th May 2023, 1st September 2023,14th November 2023,30th December, 2023 and 30th March 2024. Further, the intervening gap between the Meetings was within the period prescribed under the Act.
The composition of the Committee and the details of meetings attended by its members are given below:
|
S.NO.
|
Name of the Director
|
DIN
|
Total Number of Meetings attended
|
|
1.
|
Manish Verma
|
08034159
|
5
|
|
2.
|
Preet Kamal Kaur Bhatia
|
07070977
|
5
|
|
3.
|
Ashish Jain
|
00738412
|
5
|
NOMINATION AND REMUNERATION COMMITTEE
During the financial year under review, 2 (Two) meetings were held by the Nomination and Remuneration Committee viz, 1st September 2023 and 30th March 2024.
The composition of the Committee and the details of meetings attended by its members are given below:
|
S.NO.
|
Name of the Director
|
DIN
|
Total Number of Meetings attended
|
|
1.
|
Manish Verma
|
08034159
|
2
|
|
2.
|
Preet Kamal Kaur Bhatia
|
07070977
|
2
|
|
3.
|
Lalit Jain
|
00249128
|
2
|
STAKEHOLDER RELATIONSHIP COMMITTEE
During the financial year under review, 1 (One) meeting was held by the Stakeholder Relationship Committee viz, 14th November 2023.
The composition of the Committee and the details of meetings attended by its members are given below:
|
S.NO.
|
Name of the Director
|
DIN
|
Total Number of Meetings attended
|
|
1.
|
Manish Verma
|
08034159
|
1
|
|
2.
|
Ashish Jain
|
00738412
|
1
|
|
3.
|
Lalit Jain
|
00249128
|
Nil
|
SEPARATE MEETING OF INDEPENDENT DIRECTORS
As stipulated by the Code of Independent Directors under Schedule IV under the Companies Act, 2013 and the Listing Regulations, 2015, separate meetings of the Independent Directors of your Company were held on 01st September, 2023 and 30th March, 2024 to review the performance of Non-Independent Directors, the Board as whole and evaluation of performance of your Company. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which are necessary to effectively and reasonably perform and discharge their duties.
STATUTORY DISCLOSURES
None of the Directors of your Company is disqualified as per the provisions of Section 164(2) of the Act. The Directors of your Company have made necessary disclosures, as required under various provisions of the Act.
DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS
The provisions of Section 149 of the Companies Act, 2013 with respect to appointment of Independent Directors are applicable to your Company for the financial year ending March 31,2024.
The Board, after undertaking due assessment of the veracity of the declaration submitted by the Independent Directors under sub section (6) of Section 149 of the Companies Act, 2013 was of the opinion that the Independent Directors meet
the criteria of independence, are independent from Management and have necessary integrity, expertise, skills and experience required for their appointment as Independent Director.
As required vide Rule 6 (1) & (2) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 they have registered their names in the Independent Directors’ Databank maintained by the Indian Institute of Corporate Affairs. Based on the declarations received from the Directors, the Board confirms, that the Independent Directors fulfil the conditions as specified under Schedule V of the Listing Regulations and are independent of the management. The Board of Directors are of the opinion that Mr. Manish Verma and Mrs. Preet Kamal Kaur Bhatia, Independent Directors of your Company meet the necessary criteria for continuing as Independent Directors of your Company.
REMUNERATION POLICY
The Company has formed Nomination and Remuneration Committee. The details are annexed as Annexure-1. CORPORATE SOCIAL RESPONSIBILITY (CSR)
During reporting period, the Company has not exceeded the threshold limit mentioned under Section 135 of the Companies Act, 2013.
Hence, the Company was not required to make any expenditure towards Corporate Social Responsibility.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, your Company encourages the employees to voice their genuine concerns without fear of censure, therefore company’s ultimate holding company has built in and set up the Vigil Mechanism Policy applicable to your Company, according to which all the directors, employees of your Company including third party, are eligible to make disclosures under the mechanism in relation to the matter concerning your Company.
Details of the Whistle Blower Policy are made available on your Company’s website www.pentagonrubber.com.
DISCLOSURE REGARDING CORPORATE SOCIAL RESPONSIBILITY (CSR)
In purview of Section 135 of the Companies Act, 2013, every company having net worth of rupees five hundred crore or more or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year needs to spend at least 2% of the average net profits of last 3 immediately preceding financial years for your Company’s Corporate Social Responsibility (CSR) policy.
So, in view of above your Company is coming under ambit of such criteria as envisaged herein above, therefore provisions relating to CSR is applicable to your Company. Hence, your Company has to spend at least 2% of the net profits of immediately preceding three financial years.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the Listing Regulations, 2015, Business Responsibility Report is not applicable to your Company.
COST RECORDS
Maintenance of cost records as specified by the central government under sub-section (1) of Section 148 is not applicable to company.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
The guiding principle of the Code of Corporate Governance is ‘harmony’ i.e., balancing the need for transparency with need to protect the interest of the Company, balancing the need for empowerment at all levels with the need for accountability.
The Company believes in die highest standards of good and ethical corporate governance practices. Good governance practices stem from the culture and mindset of the organization. It is therefore not merely about enacting policies
regulations and procedures but also about establishing an environment of trust and confidence among various shareholders.
The Company’s philosophy on the Code of Governance is that the Company should follow contemporary corporate practices and the guiding principle of the Code of Governance of the Company is Harmony i.e.:
(a) Balancing need for transparency with the need to protect the interests of the Company;
(b) Balancing the need for empowerment at all levels with the need for accountability;
(c) Interaction with all stakeholders including shareholders, employees, lenders and regulatory authorities.
PARTICULARS OF EMPLOYEES
The disclosure 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 are annexed herewith as “Annexure II” and forms part of this Report.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
The above clause is not applicable to your Company as your Company has not entered into any settlement from Banks or Financial Institutions during the year under review.
CAUTIONARY STATEMENT
Statements in the Board’s Report and the Management Discussion & Analysis Report describing your Company’s 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 Company’s operations include global and domestic market conditions affecting cost as well as the selling prices of the services, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
ACKNOWLEDGEMENT
The Directors wish to place on record their appreciation for the support by the employees of the Company at all levels. Your directors also wish to place on record their appreciation for the valuable co-operation and support received from the shareholders.
The Directors look forward to their continued support in future.
By order of the board
For PENTAGON RUBBER LIMITED
(Formerly Known as Pentagon Rubber Private Limited)
Sd/- Sd/-
ASHISH JAIN SAURABH JAIN
MANAGING DIRECTOR WHOLETIME DIRECTOR
DIN: 00738412 DIN: 00761460
ADD: H NO.45, SECTOR 7, ADD: #409, SECTOR -7, PANCHKULA
PANCHKULA HARYANA 134109 HARYANA 134109
Place: Derabassi Date: 20.08.2024
|