Cineline India Ltd Directors Report.
The Members of Cineline India Limited
Your Directors have pleasure in presenting their Seventeenth Annual Report together with the Audited Accounts and Auditors Report of the Company for the Year ended March 31, 2019.
1. FINANCIAL RESULTS:
|(Rs. In Lacs)||(Rs. In Lacs)|
|March 31, 2019||March 31, 2018||March 31, 2019|
|Profit before Interest, Depreciation and tax||2678.32||2462.45||2677.61|
|Interest & Financial Charges||961.53||775.89||961.53|
|Profit/(loss) before tax||1352.56||1328.53||1351.85|
|Provision for Tax (including Deferred)||366.97||273.72||366.97|
|Profit/(loss) after Tax||985.59||1054.81||984.88|
|Add: Surplus brought forward from previous year||5413.49||4525.50||5413.49|
|Amount available for Appropriation||6399.08||5580.31||6398.37|
|Other comprehensive income / (loss)*||(0.32)||1.68||(0.32)|
|Payment of Dividend (Including Tax)||-||(168.50)||-|
|Surplus Carried to Balance Sheet||6398.76||5413.49||6398.05|
Note: : Figures are regrouped wherever necessary to make the information comparable
Gross revenues of the Company for the Financial Year 2018-19 stood at Rs. 3493.94 Lacs. Profit before interest, depreciation and taxation stood at Rs. 2678.32 Lacs. After providing for depreciation and taxation of Rs. 364.23 Lacs and Rs. 366.97 Lacs respectively, the net profit of the Company for the year under review were placed at Rs. 985.59 Lacs as against Rs. 1054.81 Lacs in the previous year.
With a view to conserve the resources for future operations, your Directors have thought it prudent not to recommend dividend on equity shares for the financial year 2018-19.
3. TRANSFER TO RESERVES:
During the year under review, no amount was transferred to General Reserve.
4. SHARE CAPITAL:
The paid up equity share capital as on March 31, 2019 was Rs. 1400 Lacs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options nor sweat equity.
Cash and cash equivalents as at March 31, 2019 were Rs. 2213.18 Lacs. The company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
There is no audit qualification in the financial statements by the statutory auditors for the year under review.
6. EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extracts of the Annual Return as at March 31, 2019 forms part of this report as Annexure 1.
The same has been placed on the website of the Company and can be accessed at www.cineline.co.in
7. SUBSIDIARY COMPANIES:
Your Company has invested in a wholly owned subsidiary being "Transquare Realty Private Limited" on 11th February, 2019. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").
Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiary in Form AOC-1 forms part of this report as Annexure 2.
Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiary, are available on the website of the Company at www.cineline.co.in
8. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors Report.
9. PUBLIC DEPOSIT:
Your Company has not accepted any public deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the regulators / courts that would impact the going concern status of the Company and its future operations.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Company has Six (6) Directors consisting of Whole Time Director, Managing Director, Executive Director and Three (3) Independent Directors as on 31.03.2019.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, Mr. Rasesh Kanakia, Chairman, retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.
During the financial year 2018-19, there is no change in the Board of Directors of the Company.
Further, pursuant to Regulation 17(1A) of SEBI (Listing Obligation and Disclosure Requirements), 2015 notified vide Notification No: SEBI/LAD-NRO/GN/2018/10 dated 9th May, 2018, directorship of Mr. Kranti Sinha as NonExecutive Independent Director has been discontinued with effect from 1st April, 2019.
11.2 Key Managerial Personnel:
The following are the Key Managerial Personnel of the Company for the year under review:
|Sr. No.||Name of the Person||Designation|
|1||Mr. Himanshu Kanakia||Managing Director|
|2||Mr. Vipul Parekh*||Chief Financial Officer|
|3||Mr. Jatin Shah||Company Secretary|
*During the year under review, Mr. Sunil Ranka resigned as CFO of the company with effect from 16th April, 2018 and Mr. Vipul Parekh was appointed as CFO of the company with effect from 12th October, 2018.
12. DECLARATION GIV EN BY INDEPENDENT DIRECTOR:
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
INDEPENDENT DIRECTORS MEETING
The Independent Directors met on 13th February, 2019 inter alia, to
a) review the performance of the Non-Independent Directors and the Board of Directors as a whole;
b) review the performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors
c) assess the quality, content and timeliness of the flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform its duties
During the year, the Board met 5 (Five) times. The details of which are given in the Corporate Governance Report which forms part of Annual Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015.
14. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with the applicable mandatory Secretarial Standards issued by the Institute of Company Sectaries of India.
15. DIRECTORS RESPONSIBILITY STATEMENT:
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments, which are measured at fair values, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (the Act), read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with applicable transition guidance. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
a) In the preparation of the annual accounts for the year ended 31-03-2019, the applicable accounting standards have been followed.
b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.
c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act 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 had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
f) The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
16. COMMITTIES OF THE BOARD:
The Board of Directors of your Company has constituted various Committees as follows:
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Risk Management Committee
The details with respect to the composition, powers, roles, terms of reference, number of meetings held, attendance at the meetings etc. of Statutory Committees are given in detail in the Corporate Governance Report.
17. AUDIT COMMITTEE:
The Audit Committee of the Board has been constituted in terms of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015 and Section 177 of the Companies Act, 2013. The constitution and other relevant details of the Audit Committee are given in the Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board of Directors.
18. PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
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 Board of Directors expressed their satisfaction with the evaluation process based on the recommendation of the Nomination & Remuneration Committee.
Further, The Securities and Exchange Board of India (SEBI) vide circular no. SEBI/HO/CFD/ CMD/ CIR/P/2017/004 dated January 05, 2017 had come up with a "Guidance Note on Board Evaluation". The Board Evaluation framework of the Company is aligning with this Guidance Note.
19. FAMILIARIZATION PROGRAMME:
The Familiarization Programme seeks to update the Independent Directors on various matters covering
Companys strategy, business model, operations, organization structure, finance, risk management etc. It also seeks to update the Independent Directors with their roles, rights, responsibilities, duties under the Companies Act, 2013 and other statutes.
The policy and details of familiarization programme imparted to the Independent Directors of the Company is available at www.cineline.co.in
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company has an Internal Control system, commensurate with the size, scale and complexity of its operations. The Internal and operational audit is entrusted to M/s Delloite Haskins & Sells, a reputed firm of Chartered Accountants. Internal controls were reviewed by designated firm and based on their evaluation, it was concluded that the Companys internal controls are adequate and were operating effectively as of March 31, 2019. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board of Directors, Statutory Auditors and the Senior Management are periodically apprised of the internal audit findings and corrective actions taken. Audit provides a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.
21. STOCK OPTIONS:
Your Company does not have any stock options scheme.
22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
Particulars of loans given and of the investments made by the Company as at 31st March, 2019 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made investment in 10,000 equity shares of Rs. 10/- each of Transquare Realty Private Limited being the 100% subsidiary of the Company.
23. RELATED PARTY TRANSACTIONS:
In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party Transactions which is available on Companys website at www.cineline.co.in. This policy deals with the review and approval of related party transactions. The Board of Directors of the Company has approved the criteria for giving the omnibus approval by the Audit Committee within the overall framework of the Policy on Related Party Transactions.
Omnibus approval was obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and at arms length basis. Pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all related party transactions were placed before the Audit Committee on a quarterly basis, specifying the nature, value and terms & conditions of the transactions for their review and approval.
All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. During the year, the Company had not entered into any new contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the company on a materiality of related party transactions. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed form AOC-2, and are appended as Annexure 3 to this report.
24. POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION:
The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down the criteria for selection and appointment of Board members. The Remuneration Policy forms part of this report as Annexure 4.
25. WHISTLE BLOWER POLICY:
Your Company has formed a Whistle Blower Policy for establishing a vigil mechanism for directors and employee to report genuine concerns regarding unethical behaviour and mismanagement, if any. The said mechanism also provides for strict confidentiality, adequate safeguards against victimization of persons who use such mechanism and makes provision for direct access to the Chairperson of the Audit Committee in appropriate cases. No personnel have been denied access to the Audit Committee pertaining to the Whistle Blower Policy. The Whistle Blower policy has been posted on the Companys website www.cineline.co.in
26. RISK MANAGEMENT:
Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company has adequate risk management mechanism and is periodically reviewed by the Board. At present the Company has not identified any element of risk which may threaten the existence of the Company.
27. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee and has adopted Corporate Social Responsibility Policy and link for the same is www. cineline.co.in. The Report on information required to be provided under Section 134(3)(o) of the Companies Act, 2013 read with the Rule 9 of the Companies (Accounts) Rules, 2014 in relation to disclosure about Corporate Social Responsibility is annexed as Annexure - 5 and forms an integral part of this Report.
28. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report covering a wide range of issues relating to Performance, outlook etc., is annexed as Annexure-A to this report.
29. CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of the Corporate Governance. The detailed report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms Annexure-B to this report. A Certificate from the Practising Company Secretary confirming compliance
of the conditions of Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed as Annexure-C to this report.
30.1 Statutory Auditors
Based on the recommendations of the Audit Committee and the Board, members of the Company at the Sixteenth AGM held on September 27, 2018 have approved the appointment of M/s. Khimji Kunverji & Co., Chartered Accountants (Firm Registration No. 105146W) as the Statutory Auditors of the Company for a period of five consecutive years i.e. till the conclusion of Twenty-First AGM. The requirement of ratification of appointment of Statutory Auditors at every AGM has been omitted pursuant to Companies (Amendment) Act, 2017 notified on May 07, 2018. Thus, M/s. Khimji Kunverji & Co., will continue to hold office till the conclusion of Twenty-First AGM of the Company.
The Auditors Report on Standalone and Consolidated Ind AS financial statements is a part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
During the year, the Statutory Auditors had not reported any matter under Section 143(12) of the Companies Act, 2013. Therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.
30.2 Secretarial Audit
Pursuant to Section 204 of the Companies Act 2013, your Company had appointed Mr. Dharmesh Zaveri, a Company Secretary in Whole-time Practice having Certificate of Practice No. 4363 and Membership No. 5418 as its Secretarial Auditor to conduct the secretarial audit of the Company for the Financial Year 2018-19. The Company provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Secretarial Audit Report is included as Annexure-6 and forms an integral part of this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
During the year, the Secretarial Auditors had not reported any matter under Section 143(12) of the Companies Act, 2013. Therefore, no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.
31. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARKS MADE, IF ANY:
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors on the Financial Statements of the Company, in their report for the financial year ended 31st March, 2019.
32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Since the Company does not own any manufacturing facility, the other particulars relating to conservation of energy and technology absorption stipulated in the with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company.
The Company has not made any foreign exchange outgo towards traveling, marketing and import of Capital Goods.
33. SEXUAL HARASSMENT DISCLOSURE:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. During the year no complaints of sexual harassment were received by the Company and hence there are no Complaints pending as on 31st March 2019.
34. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:
Your Company had 28 (including Directors) employees as of March 31, 2019. The statement containing particulars of employees as required under Section 197(12) of the Companies Act, 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company as no employees were in receipt of remuneration above the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure 7 and forms part of this Report.
35. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/ behaviours of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Companys website www.cineline. co.in
The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
36. PREVENTION OF INSIDER TRADING:
The Board of Directors has adopted the Insider Trading Policy in accordance with requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015. The Insider Trading Policy of the Company lays down guidelines and procedures to be followed and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The Policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company Securities.
The Insider Trading Policy of the Company covering code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on the Companys website www.cineline.co.in
The Board has approved and adopted revised Code of Conduct for prohibition of Insider Trading and Code for fair Disclosure pursuant to the requirements of SEBI (Prohibition of Insider Trading) (Amendment) Regulation, 2018 with effect from 1st April, 2019.
37. APPLICABILTIY OF COST RECORDS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the activity of your Company falls under Nonregulated sectors and hence, maintenance of cost record is not applicable to the Company for the Financial Year 2018-19.
Your Company has been able to perform better with the continuous improvement in all functions and areas which coupled with an efficient utilization of the Companys resources led to sustainable and profitable growth of the Organization. Your Directors express their deep sense of appreciation and extend their sincere thanks to every employee and associates for their dedicated and sustained contribution and they look forward the continuance of the same in future.
Your Board takes this opportunity to thank our, clients, business partners, shareholders and bankers for the faith reposed in the Company and also thank the Government of India, various regulatory authorities and agencies for their support and looks forward to their continued encouragement. Your Directors are deeply touched by the efforts, sincerity and loyalty displayed by the employees without whom the growth was unattainable. Your Directors wish to thank the investors and shareholders for placing immense faith in them and the plans designed for growth of your Company. Your Directors seek and look forward to the same support in future and hope that they can continue to satisfy you in the years to come.
|For and on behalf|
|of the Board of Directors|
|Date: May 09, 2019|