To,
The Members,
C. Mahendra Exports Limited
Your Directors are pleased to present the 9th Annual Report and the Audited
Annual Accounts for the financial year ended 31st March, 2015.
FINANCIAL RESULTS
The financial performance of the Company, for the year ended 31st March,
2015 is summarized below:
|
|
(Rs in Million) |
| Particulars |
For the F. Y. ended 31st March, 2015 |
For the F. Y. ended 31st March, 2014 |
| Income from Operation: |
|
|
| Net Sales |
5835.09 |
20148.30 |
| Other Income |
380.51 |
93.05 |
| Total income from operations |
6215.60 |
20241.34 |
| Profit before Tax |
-1334.95 |
93.26 |
| Less: Current Tax |
- |
(18.00) |
| Mat Credit Entitlement |
- |
18.00 |
| Deferred Tax |
-4.61 |
16.61 |
| Wealth Tax |
0 |
0 |
| Less: Prior period income tax adjustment |
- |
-17.41 |
| Profit after Tax |
-1339.56 |
59.23 |
| Add: Profit brought forward |
1928.89 |
1869.66 |
| Amount Available for Appropriation |
589.33 |
1928.89 |
| Appropriation: |
- |
|
| Utilized for bonus shares issued during the year |
|
|
| Balance Carried to Balance Sheet |
589.33 |
1928.89 |
REVIEW OF OPERATIONS
During the year under review, the Company’s net sales were Rs. 5835.09 million as
against Rs. 20148.30 million.
Your Directors are continuously looking for lucrative ventures for future growth of the
Company.
BACKGROUND OF C. MAHENDRA GROUP
C. Mahendra Exports Ltd, a renowned and trusted name since 1974, is one of the leading
diamantaire and jewellery Company with a wide spread around the world.
The pioneers of the Company, Mr. Mahendra C. Shah and Mr. Champak K. Mehta commenced
the business in 1974. C. Mahendra Exports was formed in the year 1978 to carry on the
business of manufacturing and trading of diamonds. It is the flagship company of our CM
Group. C. Mahendra Exports set up its first state of the art factory for manufacturing cut
and polished diamonds in Surat, India in the year 1993. Subsequently three subsidiaries
were established to handle the expanded business.
Offices were opened outside India for effective and increased marketing. In2003 Ciemme
Jewels incorporated, in 2006, C. Mahendra Exports commissioned the second state of the art
manufacturing factory at Varachha Road, Surat, India to manufacture large size polished
diamonds, In Jan, 2007, C. Mahendra Exports converted from Partnership Firm into a private
company and March, 2007 changed from Private Company to Public Limited Company i.e. C.
Mahendra Exports Ltd.
C. Mahendra Exports Ltd. employs the latest and most advanced technologies for
manufacturing of cut and polished diamonds with ultimate brilliance diamonds. CM Group has
a highly skilled pool of human resources.
C. Mahendra Exports Ltd. has its Registered and Principal Sales Office in Mumbai from
where all the marketing, assorting, administration and finance operations are controlled.
The entire operation for manufacturing is controlled and managed from the Surat office. CM
Group is firmly established across major diamonds and jewellery centers globally in 5
countries namely.
• China - Hong Kong
• India - Mumbai
• UAE - Dubai
• Belgium - Antwerpen
• U.S.A - New York
C. Mahendra Exports Ltd. enjoys an envious position in the diamond industry of being
one of the top exporters with an unblemished client record. C. Mahendra Exports Ltd. has
its presence in the diamond studded jewellery business. Our branded jewellery is retailed
under the brand name "Ciemme" across the world.
C. Mahendra BVBA, the Antwerp based entity of the C. Mahendra Group is a member of the
Responsible Jewellery Council (RJC).The management of C. Mahendra B.VB.A., as a member of
the Responsible Jewellery Council (RJC) is committed to complying with the Code of
Practices of RJC.
PRINCIPAL ACTIVITIES
Diamond Manufacturing Facilities -
The Company set up its first factory for diamond production at Udhana, in 1993. The
Company established second diamond cutting and polishing factory in Varachha in 2006 (100
% EOU) but now EOU status has been expired and established a unit in SEZ.
Green Energy Division (Wind Energy) -
The Company started the activities related to its Green Energy Division, by setting up
Wind farm businesses at Sangli, Maharashtra in 2006 and Kutch, Gujarat in 2007.
The company has invested Rs. 68 Crores in the Green Energy in the state of Maharashtra
and Gujarat. In the year 2005-06, the Company has installed eight Wind Turbine Generators
(WTGs) each of 1.25 MW, total having 10 MW in the state of Maharashtra for sale of energy
to MSEDCL. Further, in the year 2007-08, company has installed two Wind Turbine Generators
(WTGs) each of 1.50 MW, total having 3.00 MW in the state of Gujarat for the captive
consumption (Wheeling) for its units at, Udhana & Varachha in Surat.
SUBSIDIARY COMPANIES
The Company has various domestic and international subsidiaries and step-down
subsidiaries:
1) C. Mahendra International Limited
2) C. Mahendra BVBA, Antwerp (Belgium),
3) C. Mahendra DMCC Dubai UAE,
4) C. Mahendra International Limited, Mauritius,
5) International Gems and Jewellery FZE,
6) AL DASPA Gems and Jewellery FZE,
7) Ciemme Jewels Limited
8) C. Mahendra USA Inc.,
9) C. Mahendra Exports (HK) Limited,
CONSOLIDATED FINANCIAL STATEMENTS
As the audit of the International Subsidiaries of the Company has not been completed,
hence, the Consolidated Financial Statements are not annexed.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
During the year, there was no change in the nature of business.
FINANCE
The Company is availing Working Capital requirements from the Consortium of 14 Bankers
and has obtained adequate finance during the year under review. The debt is secured by
immovable properties, current assets and others. The banks have classified the loans given
to the Company as NPA.
DIVIDEND
Due to losses during the year under review, the directors regret their inability to
declare any dividend for the year under review.
SHARE CAPITAL
ISSUE OF SHARES ON CONVERSION OF SHARE WARRANTS
Bennett, Coleman & Co. Ltd have opted to convert the share warrant issued in their
favour into 5,67,780 fully paid up equity shares. The same were converted, allotted and
listed on the stock exchanges.
ISSUE OF BONUS SHARES
Further, the Company declared Bonus Shares in the ratio 1:1 to the Equity Shareholders
of the Company. The Bonus shares allotted to the promoters are yet to be listed on the
stock exchanges. Exchange have imposed penalty for delay in compliance of Clause 41 of the
Listing Agreement.
LISTING ON STOCK EXCHANGES
The Shares of the Company continue to be listed on BSE Limited and National Stock
Exchange of India Limited both having nationwide terminals.
The shares of the Company have been delisted from MCX-SX.
FIXED DEPOSITS
The Company has not accepted any public deposits during Fiscal 2015.
DIRECTORS APPOINTMENT
1. Ms. Bindya Vasani (DIN: 03636726) and Mr. Diwakar Singh (DIN: 07255277) were
appointed as Non-Executive Independent Directors of the Company. Ms. Bindya Vasani is also
the Women Director of the Company, pursuant to clause 49 (II) (A) (1) of Listing agreement
and Section 149 of the Companies Act, 2013 w.e.f. 20th June, 2015.
The Company has received Notices in writing from a Member alongwith requisite deposits
of money proposing the aforesaid two directors to the office of Directors under the
Section 160 of the Companies Act, 2013.
The Board recommends their appointment as Independent Directors of the Company, not
liable to retire by rotation. Necessary resolutions for obtaining approval of the Members
in respect of the above appointments have been incorporated accompanying notice of Annual
General Meeting.
2. Appointed Mr. Chetan N. Bafna (06968721) as Non-Executive Independent director of
the company w.e.f. 13th November, 2014.
3. Appointed Mr. Swapnil T. Dafle as the Company Secretary and Compliance officer (Key
Managerial Personnel of the Company), w.e.f. 7th May, 2014.
4. Resignation of Mr. Kailashchandra C. Chaudhary, Non-Executive Independent director,
from the directorship of the Company w.e.f. 8th June, 2014 and the same
accepted by the board.
5. Resignation of Mr. Sandeep M. Shah, Whole time director from the directorship of the
Company w.e.f. 29th December, 2014 and the same accepted by the board.
6. Resignation of Mr. Vittala. S. Hegde, Non-Executive Independent director, from the
directorship of the Company w.e.f. 18th September, 2014 and the same accepted
by the board.
7. Resignation of Mr. Ashish Kumar Shrivastava, Company Secretary and Compliance
officer (KMP) from the Company w.e.f 31st March, 2014 and the same accepted by
the board.
ROTATION
No Directors are liable to retire by rotation in the ensuing Annual General Meeting.
INSURANCE
The Properties and Assets of the Company are adequately insured.
PUBLIC DEPOSITS
During the year, the Company has not accepted any deposit.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the financial
year with related parties were on an arm’s length basis, in the ordinary course of
business and were in compliance with the Section 188 of the Companies Act, 2013 read with
Rule 15 of Companies (Meeting of Board and its Powers) Rules, 2014 and the Clause 49 of
the Listing Agreement. There are no materially significant Related Party Transactions made
by the Company with Promoters, Directors, Key Managerial Personnel or other designated
persons which may have a potential conflict with the interest of the Company at large.
A statement of all Related Party Transactions is placed before the Audit Committee for
its review
The Company has adopted a Related Party Transactions Policy and is uploaded on the
Company’s website There have been no materially significant related party
transactions between the Company and Directors, the management, subsidiaries or relatives.
During the Fiscal 2015 there are no material transactions between the Company and the
related parties as defined under Clause 49 of the Listing Agreement. Further, all
transactions with related parties have been conducted at an arm’s length basis and
are in ordinary course of business. Accordingly there are transactions that are required
to be reported in Form AOC-2 and as such form annexure I in Director’s Report.
PARTICULARS OF EMPLOYEES
The Company does not have any employee/Director who is in receipt of remuneration
aggregating to the sum prescribed in Section 197 of the Companies Act, 2013 ("the
Act") read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
The required disclosures with respect to Remuneration and other details are set out in
Annexure - II to this Report.
HUMAN RESOURCES
The relations between the management and the employees generally remained cordial in
the year under review.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
The details of Loans, Guarantees or Investments made during the year are given below:
| Sr. No. Companies |
Nature of Transaction |
Loans |
Guarantees |
Investments |
| 1 C. Mahendra International Limited |
Investment Capital |
- |
- |
20128000 |
| 2 C. Mahendra BVBA |
Investment Capital |
- |
- |
616896799 |
| 3 C. Mahendra DMCC |
Investment Capital |
- |
- |
2560920 |
| 4 Ciemme Jewels Limited |
Investment Capital |
- |
- |
384000000 |
| 5 C. Mahendra trading |
Investment Capital |
- |
- |
374301301 |
CONSERVATION OF ENERGY, 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 Act, read along with Rule, 8
of the Companies (Accounts) Rules, 2014, is Annexed III
DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act, 2013 the Directors state that:
a) In the preparation of the annual accounts, the applicable accounting standards have
been followed along with proper explanation relating to material departures;
b) Appropriate accounting policies have been selected and applied consistently and have
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 as at March 31, 2015 and of the profit
and loss of the Company for the year ended March 31, 2015;
c) 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) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls were followed by the Company and such internal
financial controls are adequate and were operating effectively;
f) Proper systems are devised to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively.
BOARD MEETINGS
During the year under review, 12 (twelve) Board Meetings were convened and held.
Details of the composition of the Board and its Committees and of the Meetings held and
other relevant details are provided in the Corporate Governance Report.
POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company’s policy on Directors’ appointment and remuneration and other
matters provided in Section 178(3) of the Act has been disclosed in Corporate Governance
Report, which forms part of Annual Report. AUDITORS Statutory Auditors
The Auditors M/s R. H. Modi & Co. Chartered Accountants (Firm Reg. No. 106486W),
will retire at the conclusion of the forthcoming Annual General Meeting and are eligible
for re-appointment. Members are requested to consider their re-appointment on such
remuneration as may be mutually agreed to between the Statutory Auditors and the Board.
Internal Auditors
M/s V. A. Parikh & Associates, Chartered Accountants and M/s NSM & Associates,
Chartered Accountants are the internal auditors of the Company.
Cost Audit
M/s Nanty Shah & Associates, were the Cost Auditors of the Company. The Company has
been exempted from Cost Audit is not applicable to the Company vide MCA Circular and since
then the Cost Audit has been discontinued.
Secretarial Auditor
M/s H.S Associates, Practicing Company Secretaries were appointed as Secretarial
Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2014-2015
pursuant to section 204 of the Companies Act, 2013 read with Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit
Report is attached as ‘Annexure IV’. The Secretarial Auditors Report for the
financial year 2014-15, does not contain any qualification, reservation or adverse remark.
VIGIL MEGHANISM/WHISTLE BLOWER POICY
The Company has adopted a Whistle Blower Policy establishing a Vigil Mechanism that
enables the Directors and Employees to report genuine concerns. The Vigil Mechanism
provides for (a) adequate safeguards against victimization of persons who use the Vigil
Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of
Directors of the Company in appropriate or exceptional cases. The policy is on the website
of the Company.
CORPORATE SOCIAL RESPONSIBILITY The Board has constituted Corporate Social
Responsibility (CSR) Committee under the Chairmanship of an Independent Director pursuant
to the subsection (1) of Section 135 of Companies Act, 2013.
The CSR Committee has formulated CSR Policy of the Company which is available on
Company’s website - www.cmelgroup.com
The Company has incurred loss in the year under review and due to the company turning
into NPA; the Company is yet to initiate its CSR activities RISK MANAGEMENT
The Company has devised and implemented a mechanism for risk management and has
developed a Risk Management Policy. The Policy provides for creating a Risk Register,
identifying internal and external risks and implementing risk mitigation steps. The policy
is on the website of the Company.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities of the Company,
its management and operations and provides an overall industry perspective as well as
issues being faced by the industry.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
There was one separate meeting of Independent Directors held on Friday 27th
March, 2015 and 2 (Two) Independent Directors were present i.e. Mr. Chetan Bafna
(Chairman) and Mr. Prabodh N. Shah. In the Meeting the Independent Directors have reviewed
the performance of the Chairman of the Company- Mr. Mahendra C. Shah and the performance
of other Non Executive Directors and the Board as a whole. And assess the quality,
quantity and timeliness of flow of information between the Company management. After
review the Independent Directors were of the opinion that the performances of all company
need to have more stronger to face the currant losses and commit to overcome in near
future.
CORPORATE GOVERNANCE
Pursuant to Clause 49 of the Listing Agreement the Company has adopted most of the
provisions of Clause 49 of the Listing agreement. A report on Corporate Governance along
with a certificate from the Secretarial Auditor of the Company regarding the compliance of
conditions of Corporate Governance and also the Management Discussion and Analysis Report
are annexed to this report.
DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such, no amount on account
of principal or interest on deposits from public was outstanding as on the date of the
balance sheet.
REMUNERATION POLICY
The Company has in place a Remuneration Policy for the Directors, Key Managerial
Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the
Listing Agreement, the same is annexed. Due to the ongoing losses and paucity of funds,
the Promoter-Directors of the Company have foregone their salary.
DECLARATION BY INDEPENDENT DIRECTOR
Pursuant to Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing
Agreement, the Independent Directors of the Company have given the declaration to the
Company that they qualify the criteria of independence as required under the Act.
BOARD EVALUATION
Pursuant to the provisions of Companies Act, 2013 and clause 49 of the Listing
Agreement, the Board has carried out annual performance evaluation of its own performance,
the directors individually as well the evaluation of the working of its Audit, Nomination
& Remuneration and Stakeholder committee, including the Chairman of the Board who were
evaluated on parameters such as level of engagement and contribution and independence of
judgment thereby safeguarding the interest of the Company. The performance evaluation of
the Independent Directors was carried out by the entire Board. The performance evaluation
of the Chairman and the Non Independent Directors was carried out by the Independent
Directors. The Directors expressed their satisfaction with the evaluation process.
REPORT ON SEXUAL HARASSMENT IN THE FINANCIAL YEAR
In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013, the Company had constituted an Internal Complaints Committee for
prevention and redressal of complaints of sexual harassment against women. The Committee
comprises of the following members:-
1. Ms. Kalpana D Thakkar (Presiding Officer - Senior Employee)
2. Mr. Sanjay M. Masugade (Member - Human Resources & Administration)
During the financial year, the Company has received NIL compliant
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is Annexure
V herewith. COMMENT ON SECRETARIAL AUDITOR REPORT AND AUDITOR REPORT Secretarial Auditor
Report and Auditor Report is self explanatory.
ACKNOWLEDGEMENT
Your directors would like to place on record their deep sense of gratitude to the
Shareholders, Banks, Financial Institutions, valued customers and business associates, and
various other government/semi-government agencies for all the guidance, co-operation,
support and encouragement extended by them to the company.
Your directors would also like to take this opportunity to gratefully appreciate the
hard work and dedicated efforts put in by the employees and look forward to their
continued contribution in future endeavors of the company.
For and On behalf of the Board of Directors
|
Sd/- |
| Date: 26/08/2015 |
(Mahendra C. Shah) |
| Place: Mumbai |
Chairman |
+91-9892691696
