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Chennai Ferrous Industries Ltd Directors Report

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Jul 12, 2024|03:41:00 PM

Chennai Ferrous Industries Ltd Share Price directors Report

To the Members,

The Directors present the 13th Annual Report of

Chennai Ferrous Industries Limited ("the Company") along with the Audited Financial Statements for the financial year ended 31st March, 2023.

FINANCIAL RESULTS

Rupees in lakhs

S.N Particulars Financial Year 2022-23 Financial Year 2021-22
01. Revenue from Operations (Net) 14,124.93 9,586.13
02. Other Income 104.84 9.26
03. Total Income 14,229.77 9,595.40
04. Operating Profit (PBIDT) 439.94 2,639.37
05. Finance Cost 2.07 0.06
06. Depreciation and Amortisation Expenses 108.47 108.95
07. Profit before tax 329.40 2,530.36
08. Tax Expense - -
09. Net Profit before the year 329.40 2,530.36
10. Other Comprehensive Income/Losses - -
11. Total Comprehensive Income for the period 329.40 2,530.36
12. Earnings per share (in Rs.) 9.14 70.20

PERFORMANCE REVIEW

The Companys review from operations for the year under review is Rs.14,124.93 lakhs as compared to Rs. 9,586.13 lakhs in the previous year. The Profit After Tax is at Rs. 329.40 lakhs as compared to Rs. 2530.36 lakhs in the previous year. The net profit generated during the year has been transferred to Retained Earnings under Reserves & Surplus.

SHARE CAPITAL

During the year under review, there were no changes in the share capital of the Company.

DIVIDEND

The Directors have not recommended any Dividend on equity shares of the company for the year ended 31st March 2023.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013 ["the Act"], the Directors of the Company, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts for the year ended 31st March 2023, the applicable accounting standards have been followed and there are no material departures;

b. 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 as at 31st March 2023 and of the profit of the Company for the year ended on that date;

c. they 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. they have prepared the annual accounts of the Company on a going concern basis;

e. 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: and

f. the have devised proper systems to ensure compliances with provisions of all applicable laws and that such systems are adequate and operating effectively.

Based on the framework of the internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors including the audit of internal financial controls over the financial reporting by the statutory auditors and reviews performed by the management and the audit committee, the Board of Directors is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2022-23.

DIRECTORS & KEY MANAGERIAL PERSONNEL

The shareholders of the Company at their 12th Annual General Meeting held on 29th June 2022 approved the re-appointment of Mr. R. Natarajan as Chairman and Managing Director, liable to retire by rotation, with effect from 13th August 2022 up to 12th August 2027 and appointment of Mr.Venkata subramanian Pichai swaminathan as a Director, liable to retire by rotation, pursuant to the applicable provisions of the Act and the rules made thereunder.

Based on the recommendation of the Nomination and Remuneration Committee, Board of Directors of the Company ("Board") appointed Mr. Nagarajan

Ramakrishnan (DIN: 08315738), and Mr. Muthaiyan Saravanan (DIN : 10277688) as Additional Directors (Non-Executive, Independent) with effect from 14th August 2023 to hold office up to the date of ensuing Annual General Meeting (‘AGM), pursuant to the provisions of Section 161 of the Companies Act, 2013. Resolutions seeking shareholders approval for their appointment as Independent Directors of the Company including their profile and particulars of experience, attributes and skills that qualify them for the Board membership forms part of the Notice.

Mr. Balasubramanian Anandan, Non-Executive Independent Director and Mr. Venkatasubramanian Pichaiswaminathan, Non-Executive Non-Independent Director resigned from the Board of Directors of the Company with effect from close of business hours on 14th August 2023. The Board places on record their sincere appreciation for the valuable contribution made by them during their tenure as Directors of the Company.

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. R. Natarajan, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. A resolution seeking shareholders approval for his re-appointment forms part of the Notice.

Details of the proposed appointment of the abovementioned Directors are mentioned in the Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 of the Notice of the 13th AGM. The Company has received declarations from all the Independent Directors of the Company under Section 149 (7) of the Companies Act, 2013 confirming that they meet the criteria of independence as prescribed both under Section 149 (6) of the Companies Act, 2013 and applicable Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI Listing Regulations"].

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act read with Rule 8 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Key Managerial Personnel of the Company as on 31st March 2023 are Mr. R. Natarajan, Chairman and Managing Director, Mr. Karthikeyan Kunjithapatham, Chief Financial Officer and Ms K.V.Lakshmi- Company Secretary. There has been no change in the Key Managerial Personnel during the year.

MEETINGS

Board Meetings

The Board of Directors met eight times during the financial year 2022-23. The meetings were held on 13th April 2022,07th May 2022,02nd June 2022,04th August 2022,20th October 2022,09th November 2022,20th January 2023 and 02nd February 2023. In order to transact urgent business, approval of the Board/ Committees were taken by passing resolutions through circulation pursuant to Section 175 of the Companies Act, 2013, which were noted at the subsequent meeting of the Board /Committees, as the case may be.

Committee Meetings

The Audit Committee met four times during the year 2022-23. The meetings were held on 07th May 2022, 04th August 2022 , 09th November 2022 and 02nd February 2023.

The Nomination and Remuneration Committee met once during the year 2022-23 on 2nd February 2023.

The Stakeholders Relationship Committee met twice during the year 2022-23. The meetings were held on 10th October 2022 and 31st March 2023.

Corporate Social Responsibility Committee

As per section 135 of the Companies Act,2013 every company having Net worth of Rs. 500 crore or more or Turnover of Rs.1000 Crore or more or Net Profit of Rs. 5 Crore or more during the immediately preceding financial year shall constitute the Corporate Social Responsibility Committee of the Board of Directors of the Company consisting of 3 or more directors.

Accordingly, since the Company fulfilled the aforesaid criteria, Board of Directors of the Company had constituted the Corporate Social Responsibility Committee. The CSR Committee comprises of the following members as on 31st March 2023:-

S N Name of the Member Executive/Non -Executive/ Independent Profile
1 Mr. Balasubramanian Anandan Non-Executive Independent Chairman
2 Mrs. Mohan Chitra Non-Executive Independent Member
3 Mr. R. Natarajan Executive Member

The Corporate Social Responsibility Committee met once on the 13th April 2022 during the year 2022-23.

BOARD EVALUATION

The Board of Directors has carried out the annual evaluation of its own performance, Board Committees and individual Directors pursuant to the provisions of the Companies Act, 2013 and the applicable SEBI Listing Regulations.

The performance of the Board was evaluated by the Board seeking inputs from all directors on the basis of criteria such as adequacy of the composition of the Board and its committees, Board culture, effectiveness of board processes and performance of specific duties, obligations and governance. The performance of the Committees was evaluated by the Board on the basis of criteria such as composition of committees, effectiveness of committee meetings, etc.,

The individual directors were evaluated on parameters such as level of engagement and contribution of the individual Director to the Board and committee meetings, independence of judgement, etc,.

In a separate meeting of the independent directors held on 2nd February 2023, performance of the non-independent directors and Board as a whole was reviewed and performance of Chairman of the Company was reviewed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

POLICY ON DIRECTORS APPOINTMENT & REMUNERATION

The Remuneration policy is directed towards rewarding performance based on review of achievements on a periodical basis. The remuneration policy is in consonance with the existing industry practice and is designed to create a high performance culture. It enables the Company to attract, retain and motivate employees to achieve results. The Company has made adequate disclosures to the members on the remuneration paid to Directors from time to time.

The Companys Policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178 (3) of the Act is available on the website of the Company at www.chennaiferrous.com.

ADEQUACY OF INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to the financial statements. During the year, such controls were evaluated and no reportable deficiency in the design or operation of such controls were observed.

AUDIT COMMITTEE

The Company has a qualified independent Audit Committee in compliance with the provisions of Section 177 of the Companies Act,2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and applicable SEBI Listing Regulations.

a) Composition

The Audit Committee is constituted in line with the provisions of Section 177 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and applicable SEBI Listing Regulations, as may be amended from time to time. The Committee comprises of the following members as on 31st March 2023:-

S. N Name of the Member Executive/Non- Executive/ Independent Profile
1. Mr. Balasubramanian Anandan Non-Executive Independent Chairman
2. Mrs. M. Chitra Non-Executive Independent Member
3. Mr. R. Natarajan Executive Member

All the members of the Audit Committee are financially literate.

b) Terms of reference:

The Audit Committee acts in accordance with the terms of reference as specified by the Board, pursuant to the provisions of Section 177 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014 and applicable SEBI Regulations.

Recommending the appointment, remuneration and terms of appointment of auditors of the company;

Examining the financial statement and auditors report thereon; Reviewing, with the management the quarterly financial statements before submission to the Board for approval; Approval or any subsequent modification of transactions of the company with related parties; Evaluating the internal financial controls and risk management systems; Calling for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and also discuss any related issues with the internal and statutory auditors and the management of the company. Reviewing the functioning of the whistle blower mechanism. Scrutiny of inter-corporate loans and investments; Valuation of undertakings or assets of the Company, wherever it is necessary;

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

AUDITORS

Statutory Auditor

Pursuant to the provisions of Section 139, 142 of the Companies Act,2013 read with Companies (Audit & Accounts) Rules,2014 M/s. S.K. Gulecha & Associates, Chartered Accountants, Chennai (Firm Registration No. 013340S) were appointed as the Statutory Auditors of the Company by the shareholders for the term of 5 Consecutive years, from the conclusion of the 10th Annual General Meeting (AGM) of the Company till the conclusion of the 15th Annual

General Meeting to be held in the year 2025. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away with pursuant to the Companies (Amendment) Act, 2017, effective from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM.

The Notes to 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 or adverse remark.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mr. M.K. Madhavan, M/s M.K. Madhavan & Associates, Practising Company Secretaries as Secretarial Auditor to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed herewith as Annexure-I to this Report. The Company inadvertently missed to upload the status of reclassification application filed for reclassification of certain members of Promoter and Promoter Group to public category.

RISK MANAGEMENT

The Board of Directors has developed and implemented a Risk Management Policy for the company. The Board is responsible for reviewing the risk management plan and ensuring its effectiveness. The Audit Committee additionally overviews the financial risks and controls. The Risk Management Policy is available on the website of the Company at www.chennaiferrous.com.

VIGIL MECHANISM

The Company has established a Vigil Mechanism for Directors and Employees to report to the management about any unethical behaviour, fraud or violation of Companys code of conduct, pursuant to Section 177 (9) of the Companies Act, 2013, and the applicable SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and make provision for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases.

During the year the board has not received any complaints / grievances from the employees of the company. The Whistle Blower Policy is available on website of the Company at www.chennaiferrous.com.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not made, given or provided any loans or investment or guarantee or security to any person or body corporate under the provisions of Section 186 of the Companies Act,2013.

TRANSACTIONS WITH RELATED PARTIES

Information on transactions with related parties pursuant to Section 134 (3) (h) of the Act read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed herewith as Annexure-II to this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) read with Section 134 (3) (a) of the Companies Act, 2013, the Annual Return in Form MGT 7 shall be placed on the website of the company at www.chennaiferrous.com after the conclusion of the 13th Annual General Meeting.

PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act ,2013 read with Rule 5(1) of Companies (Appointment & Remuneration of Managerial Personnel), Rules ,2014 is annexed herewith as Annexure-III to this Report. Pursuant to Rule 5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, there are no employees drawing remuneration in excess of eight lakh and fifty thousand rupees per month or one crore and two lakh rupees per year during the year under review.

CORPORATE GOVERNANCE

In accordance with Regulation 15(2)(a) of the SEBI (LODR) Regulations ,2015, the compliance with the corporate governance provisions as specified in Regulations17,17A,18,19,20,21,22,23,24,24A,25,26,2 7 and clause (b) to (i) and (t) of sub-regulation (2) of Regulation 46 and para C, D, and E of Schedule V shall not apply in respect of-

The listed entity having paid up equity share capital not exceeding rupees ten crore and net worth not exceeding rupees twenty five crore, as on the last day of the previous financial year.

Since the paid up Equity Share Capital and Net-worth of the Company as on the last day of the previous financial year was below the stipulated limits as prescribed under Regulation 15 (2) (a) of SEBI (LODR) Regulations, 2015, the compliance with the corporate governance provisions shall not be applicable to the Company. As required under Schedule V (B) of SEBI Listing Regulations, Management Discussion and Analysis Report is attached and forms part of this report.

SECRETARIAL STANDARDS

The Company complies with all the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has formulated a Policy for Prevention of Sexual Harassment at Workplace pursuant to the requirements of the Sexual Harassment at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with relevant Rules made thereunder. Accordingly, Internal Complaints Committee ["ICC"] has been constituted for redressal of any sexual harassment complaint. The following is the summary of the complaints during the financial year 2022-23:-

a) Number of Complaints received during the financial year : Nil b)Number of Complaints disposed of during the financial year : Nil c)Number of Complaints pending as on end of the financial year : Nil

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from the 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.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to conservation of energy, technology absorption and foreign exchange earnings and outflow as required to be disclosed under Section 134 (m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 is annexed herewith as Annexure-IV to this Report.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to Section 135 of the Companies Act 2013 read with the relevant rules made thereunder, the Company shall spend, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy.

The prescribed CSR Expenditure for the year ended 2022-23, calculated as two percent of the Average Net Profits of the Company in accordance with provisions of Section 198 made during the three immediately preceding financial years pursuant to Section 135 of the Act comes to Rs. 22,37,851. During the year 2022-23, the Company has contributed Rs. 22,40,746 towards the CSR activities in compliance with the provisions of the Act, CSR Policy and Annual Action Plan, approved by the Board of Directors. Pursuant to Rule 7(3) of the Companies (Corporate Social

Responsibility Policy) Rules, 2014 , Board decided to carry forward an excess amount of Rs.2895 for set off against the requirement to spend under Section 135(5) up to immediate succeeding three financial years.

In accordance with the provisions of Section 134(3) (o) of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules,2014, details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year 2022-23 is annexed herewith and marked as Annexure-V to this Report.

STATE OF COMPANY AFFAIRS

Management of Discussion and Analysis Report for the year under review, as stipulated in Regulation 34(2) (e) of SEBI Listing Regulations is given as a separate part of the annual report. It contains a detailed write up and explanation about the performance of the company.

MATERIAL CHANGES & COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company which have occurred between 31st March 2023 and 14th August 2023.

SIGNIFICANT & MATERIAL ORDERS PASSED BY REGULATORS OR COURTS

During the Financial Year 2022-23, no order has been passed by any regulatory authorities or Courts impacting the going concern status and Companys operations in future.

ACKNOWLEDGEMENT

Your directors express their grateful appreciation for the assistance and cooperation received from the Banks, Government Authorities, Corporate Professionals, Customers, Vendors and Shareholders during the year under review, in aiding the smooth flow of operations. Continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.

For and on behalf of the Board of Directors

R. Natarajan

Chairman & Managing Director

Place:Gummidipoondi

Date : August 14, 2023

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