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Your Directors have pleasure in presenting the 33rd Annual Report together with Audited Financial Statements for the year ended 31st March, 2019. The Financial Statements have been prepared after giving accounting effect to the demerger of the business of CHANDNI TEXTILES ENGINEERING INDUSTRIES LIMITED (i.e. Engineering Division). The Financial Results of the Company have been summarized and given below:
1. FINANCIAL HIGHLIGHTS OF THE COMPANY
|Revenue from operations||10,86,47,114||49,04,34,932|
|Profit before depreciation, finance costs & tax||98,01,875||47,52,63,319|
|Profit before exceptional items and tax||20,28,416||1,98,07,728|
|Less: Exceptional Items||47,209||0|
|Profit before tax||19,81,207||1,98,07,728|
|Profit after tax||17,51,626||1,41,81,707|
|Balance brought forward from previous year||1,39,88,421||53,08,931|
|Add: Profit for the year||17,51,626||1,41,81,706|
|Less: Profit of demerged undertaking from appointed date (01/07/2016 to 31/03/2017) transferred to CMPL||0||(55,02,216)|
|Balance carried to balance sheet||1,57,40,047||1,39,88,421|
2. OPERATIONS OF THE COMPANY
Turnover of the company has drastically decreased from INR 49,04,34,932/- as compared to previous year to INR 10,86,47,114/- in the current year.
The Profit before tax has decreased from INR 1,98,07,728/- in the previous year to INR 36,89,249/- in the current year.
The Net Profit after tax decreased from INR 1,41,81,707/- in the previous year to INR 17,51,626/- in the current year.
In order to conserve the resources of Company, your Directors do not recommend any dividend.
4. TRANSFER TO RESERVES
An amount of INR 1,57,40,047/- is proposed to be retained in the Profit & Loss Account.
5. CHANGE IN NATURE OF BUSINESS, IF ANY
During the financial year, there has been no change in the business of the company or in the nature of business carried by the Company during the financial year under review.
6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATED AND THE DATE OF THE REPORT
No material changes and commitments, if any, affecting the financial position of the Company which have occurred between end of the financial year of the Company to which the financial statements relate and the date of the report.
7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES SUBSIDIARY COMPANY
As on 31st March, 2019 your Company has one subsidiary company incorporated on 11th January, 2019 in the name of "CHANDNI PLASTICS LIMITED" and is registered in India. The subsidiary company is engaged in the business of manufacture of Plastic crates, Battery Invertor casings, pail buckets and all types of injection plastic injection moulded parts.
8. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS
There are no significant and material orders passed by the regulators/ courts that would impact the going concern status and the Companys operation in future.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Amita Jayesh Mehta, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The Board of Directors recommends her re-appointment which has been annexed to this report as Annexure -F
Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013, the Board of Directors is seeking re-appointment of Mr. Rameshchand Garg, Mr. Bharat Sugnomal Bhatia and Mr. Vasant Gaurishankar Joshi as Non-Executive Independent Director for a term of 5 (five) consecutive years upto the conclusion of 38th Annual General Meeting. Details of the proposal for appointment of Mr. Rameshchand Garg, Mr. Bharat Sugnomal Bhatia and Mr. Vasant Gaurishankar Joshi are mentioned in statement pursuant to Section 102 of the Companies Act, 2013 in the Notice of Annual General Meeting. The aforesaid directors fulfill the conditions specified in the Companies Act, 2013 and rules made thereunder for their appointment as Independent Directors. The Board is of the opinion that their continued association as Independent Directors shall immensely benefit the Company. Accordingly, the Board recommends their appointment as Non-Executive Independent Directors by the shareholders upto the conclusion of the 38th Annual General Meeting in the calendar year 2024.
Mr. Rameshchand Garg, Mr. Bharat Sugnomal Bhatia and Mr. Vasant Gaurishankar Joshi are the Additional Non-Executive Independent Director of "CHANDNI MACHINES LIMITED" the listed company.
Information pertaining to these Directors is given in Corporate Governance Section which forms part of this annual report.
None of the Directors is disqualified for appointment/ re-appointment under Section 164 of the Companies Act, 2013. As required by law, this position is also reflected in the Auditors Report.
The Composition of the Board, meetings of the Board held during the year and the attendance of the Directors thereat have been mentioned in the Report on Corporate Governance in the Annual Report.
As required under Section 203 of the Companies Act, 2013, the Company has noted that Mr. Jayesh Ramniklal Mehta, Managing Director; Mr. Shailesh Pandurang Sankav, Chief Financial Officer and Ms. Khushboo Shah, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company.
10. NUMBER OF MEETINGS OF THE BOARD
During the year under review, six Board Meetings were conducted. The composition of the Board and other details relating to the Board meetings has been provided in the Corporate Governance Report. The gap between two Board Meetings did not exceed 120 days as per Section 173 of the Companies Act, 2013.
The Company has duly constituted the following mandatory Committees in terms of the provisions of the Companies Act, 2013 read with rules framed thereunder viz.,
i) Audit Committee
ii) Nomination and Remuneration Committee
iii) Stakeholders Relationship Committee
The composition of all such Committees, number of meetings held during the year under review, brief terms of reference and other details have been provided in the Corporate Governance Report which forms part of this Annual Report. All the recommendations made by the Committees were accepted by the Board.
12. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013 the Directors to the best of their knowledge hereby state and confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards have been followed and there are no material departures.
(b) the Directors 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 31st March, 2019 and of its profit for the year;
(c) the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by the Company and such Internal Financial Controls are adequate and were operating effectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
13. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated under Section 149(6) of the Companies Act, 2013.
There has been no change in the circumstances affecting their status as Independent Directors of the Company so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant regulations.
SEPARATE MEETING OF INDEPENDENT DIRECTOR
In terms of requirements of Schedule IV of the Companies Act, 2013, the Independent Director of the Company met separately on 14th February, 2019 to inter alia review the performance of NonIndependent Directors.
14. PUBLIC DEPOSITS
The Company has not accepted any public deposits within the meaning of Section 73 to 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review and there are no outstanding deposits which are pending for repayment.
15. COMPANYS POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Company has been following a policy with respect to appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The appointment of Directors on the Board is subject to the recommendation of the Nomination and Remuneration Committee (NRC). Based on the recommendation of the NRC, the remuneration of Executive Director is fixed in accordance with the provisions of the Companys Act, 2013 which comprises of Basic Salary, Perquisites, Allowances and Commission. The Remuneration of Non-Executive Directors comprises of sitting fees in accordance with the provisions Companies Act, 2013.
The criteria for appointment of Board of Directors and Remuneration Policy of your Company are placed on the website of the Company www.cteil.com
16. EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The details of performance evaluation have been mentioned in the Corporate Governance Report.
17. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company appointed M/s Ajay Anil Thorat & Associates, Practicing Company Secretaries to conduct the Secretarial
Audit of the Company for the financial year 2018-2019. The report is attached herewith as Annexure - II to the Boards Report.
M/s Ajay Anil Thorat & Associates, Practicing Company Secretaries, in their Secretarial Audit Report have made certain qualifications. The auditors qualifications and Boards explanation thereto are summarized as under:
|AUDITORS QUALIFICATION||BOARDS EXPLANATION|
|a) In the outcome of board meeting dated 14th November, 2018, the company has not disclosed forming of subsidiary decision taken by the Board, to the stock exchanges.||As per Regulation 30 read with Schedule III Part A Para A (4) of Securities and Exchange board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 the points mentioned thereunder are required to be disclosed in outcome of board meeting within 30 minutes of the conclusion of the board meeting.|
|However, company obtained Certificate of Incorporation on 11th January, 2019 and the same was disseminated to both the stock exchanges on 12th January, 2019 as per the format prescribed in SEBI Circular dated September 09, 2015.|
|b) Form MGT14 filed for special resolution passed by shareholders for confirming the continuation of Independent Director over the threshold age limit, the purpose of passing of resolution has been selected as Resolutions passed jn pursuance of exercise of powers of Board of Directors instead of others under Companies Act, 2013. Since the board of directors does not have powers to exercise for this matters. Further, in Form MGT 14 - declaration part - the date of board of directors meeting in which authority to file this form MGT 14 has been given is mentioned as 28th September, 2018; however there is no any board meeting on this date.||The Company inadvertently wrote the date of Annual General Meeting (AGM), however the e-form was approved without any error.|
|Hence, this date has been wrongly mentioned by the Company. Further, all the special business should be specifically discussed in the Board Meeting and once board confirms it then only it should be added in the Notice of Annual General Meeting.||The Company will take care in future.|
18. EXTRACT OF ANNUAL RETURN
The details forming part of extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of The Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, has been annexed with this report as Annexure -IIP
19. AUDITORS STATUTORY AUDITORS
M/s Ambavat Jain & Associates, LLP Chartered Accountants (Firm Registration No.: 109681W) were appointed as Statutory Auditors of the Company for a period of Five (5) years till the conclusion of Thirty Sixth Annual General Meeting of the Company.
20. STATUTORY AUDITORS REPORT
The Auditors Report on Standalone Financial Statements for the financial year 2018 -2019, issued by M/s Ambavat Jain & Associates, LLP Chartered Accountants, does not contain any qualification, observation, disclaimer, reservation or adverse remark.
21. PARTICULARS OF LOAN GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE ACT
The details of investments covered under the provisions of Section 186 of the Companies Act, 2013 are disclosed in Note No. 4 to the Financial Statements. The Company has not given any loans and guarantees under Section 186 of the Act during the Financial Year 2018-2019.
22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of 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 are disclosed in Form AOC-2 pursuant to section 134(3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure - IV to this report. The company has framed a Policy on Related Party Transactions. The policy on related party transaction can be accessed on the website of the Company www.cteil.com
23. RISK MANAGEMENT
The Company has a risk management frame work for identification, assessment and mitigation of risks. This framework essentially creates transparency and minimize the risk and adverse impact on the business objectives and enhances the Companys competitive edge. This frame work consists of various risk models helping in indentifying risk, risk trends, exposure and potential influence analysis is separately for various business segments and at various levels of the Company.
Based on the operations of the Company new risks, if any, are identified, appropriate steps are taken to mitigate them. Our internal control encompasses various management system, structures of organisation, standard and code of conduct which all put together help in managing the risks associated with the Company.
24. AUDIT COMMITTEE
As on 31st March, 2019 the Audit Committee of the Board of Directors of the Company comprises of 3 (three) members namely:
1. Mr. Bharat Sugnomal Bhatia
2. Mr. Rameshchand Garg - [CHAIRMAN]
3. Mr. Vasant Gaurishankar Joshi
The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.
25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Audit committee defines the scope and authority of the Internal Auditor. The Audit Committee comprises of professionally qualified Directors, who interact with the statutory auditors, internal auditors and management in dealing with matters within its terms of reference. Your Company has a proper and adequate system of internal controls. These controls ensure transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.
26. ESTABLISHMENT OF VIGIL MECHANISM
The Companys vigil mechanism /Whistle blower Policy aims to provide the appropriate platform and protection for Whistle blowers to report instances of any actual or suspected incidents of unethical practices, violation of applicable laws and regulations including the Integrity Code, Code of Conduct for Prevention of Insider Trading in Securities, Code of Fair Practices and Disclosure. All employees and Directors have access to the Chairperson of the Audit Committee. Company investigates such complaints speedily, confidentially and in an impartial manner and take appropriate action to ensure that the requisite standards of professional and ethical conduct are always maintained.
The Vigil Mechanism/Whistle Blower Policy is available on the website of the Company www.cteil.com
27. CORPORATE GOVERNANCE
A report on Corporate Governance along with a certificate from Practicing Company Secretary of the Company confirming of corporate governance requirements as stipulated under Regulation 27 of SEBI (LODR) Regulations forms part of this Annual Report.
28. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company has in place Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The company has provided a safe and dignified work environment for employee which is free of discrimination. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of any such complaints of harassment.
Pursuant to requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with Rules thereunder, it is hereby declared that the Company has not received any complaint of sexual harassment during the year under review.
29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO AS STIPULATED UNDER SECTION 134(3) (M) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014
a) Conservation of Energy
Technology up gradation, modernization, and the introduction of control instrumentation are practiced realizing the full potential of energy conservation in our organization. The Company does a continual improvement for optimum utilization of resources to ensure minimize consumption of energy, water, natural resources while maximizing production volumes in eco friendly manner.
b) Technology Absorption
Your Company has not imported any technology for manufacture of textiles yarn or plastic crates.
c) Foreign Exchange Earnings and Outgo
|FY 2018-2019||FY 2017-2018|
|Total Foreign Exchange Outgo||1,06,095||NIL|
|Total Foreign Exchange earned (FOB)||NIL||NIL|
30. PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 197 of the Act, read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure - V to the Directors Report. There are no employees employed throughout the financial year who was in receipt of remuneration of INR 1.02 crore or more, or employed for part of the year and in receipt of INR 8.5 lakh or more a month, as mentioned under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year under review, as stipulated under Regulation 34 of SEBI (LODR) Regulations is presented in a separate section forming part of this Annual Report attached as Annexure - VF
32. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN SECURITIES
During the year, Company has amended the Code of Conduct for Prevention of Insider Trading in Securities ("Code") in accordance with SEBI (Prohibition of Insider Trading) Amendment Regulations, 2018, which is effective from April 01, 2019. The amended Code is uploaded on the website of the Company. The objective of the Code is to protect the interest of shareholders at large, to prevent misuse of any unpublished price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Persons, and employees.
Ms. Khushboo Lalit Shah is the Compliance Officer under the Code.
33. REPORTING OF FRAUD BY THE AUDITORS
In case the auditor has sufficient reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company or by the Company the Auditor shall forward his report to the Committee and the Committee shall send its reply or observations to the Auditor and such matters shall be reported to the Board by the committee.
All the properties/ assets including buildings, furniture/fixtures, etc. and insurance interests of the Company are adequately insured.
35. CAUTIONARY STATEMENT
Statements in Annual Report, including those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute forward looking statements within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.
The Directors wish to convey their appreciation to all employees for their enormous efforts at the individual level as well as their collective contribution to the Companys performance. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in management.
|For and behalf of the Board of Directors|
|Jayesh R Mehta|
|Chairman & Managing Director|
|Date: 14th August, 2019|