CMI Ltd Directors Report.
To the members,
The Board of Directors present the Fifty Second Annual Report of the Company, along with the financial the financial year ended 31 March, 2019.
1. Financial summary
The financial summary and performance highlights of the Company,
(Amount Rs. In Lakhs)
|Financial Results||Financial year|
|Less: Total Expenditure excluding Depreciation||59,821.45||53,533.73|
|Profit before Depreciation andtax||5,328.48||4,990.72|
|Add: Exceptional items||(2.69)||-|
|Less: Current Tax||(133.27)||(1,150.56)|
|Earlier year Tax||-||(26.78)|
|Net profit aftertax||4,494.13||2,584.98|
Considered necessary. Previousyears
2. Financial and operational performance
During the year under review, your Companys revenue from operations was Rs. 63,729.85 Lakhs. Further, in the Financial Year ended 31 March, 2019, the profit before tax (PBT) was Rs. 4,143.84 Lakhs as against Rs. 3,942.49 Lakhs in the previous year and profit after tax (PAT) was Rs. 4,494.13 Lakhs against Rs. 2,584.98 Lakhs in the previous financial year.
The Company has adopted adequate cost control measures throughout the year, and has been aggressive in its quest for new business. This helped to deliver a decent revenue growth. Your Company continuestofocuson broaden its customer base and to set a benchmark in the competitive market. With stable government at centre, the long term outlook of cable industry is expected to be favorable, driven by Power Sector Reforms, Modernization of Railways, new Metro Railways and other Infrastructures Developmental Projects.
3. 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 relate and the date of the report and details of significant and material orders passed By the regulators or courts or tribunals mpacting the going concern status and I companys operations In future
Board of Directors of the Company are pleased to inform you that the Scheme of Amalgamation between CMI Energy India Private Limited (Transferor Company) and CMI Limited (Transferee Company) has been approved by the Honble National Company Law Tribunal (NCLT), Principal Bench, New Delhi vide its order dated April 03, 2019 with appointed date March 01, 2016, under sections 230 to 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and other applicable provisions, if any.
After approval of the above Scheme of Amalgamation, all the property, rights, powers, liabilities of CMI Energy India Private Limited be transferred without further act or deed, to CMI Limited and accordingly the same shall, pursuant to section 232 of the Companies Act, 2013, be transferred to and become the Assets and Liabilities of the CMI
The Registrar of Companies (ROC) has also approved the amalgamationof CMI energyindia Private Limited servicing into CMI Limited on May 13, 2019.
4. Share capital
Authorised Share Capital of the Company as on 31 March, 2019 was Rs. 25,00,00,000/- (Rupees Twenty Five Crore Only) divided into 1,50,27,457 (One Crore Fifty lakhs Twenty Seven Thousand Four Hundred Fifty Seven) equity shares of Rs 10/- (Rupees Ten) each.
Pursuant to the implementation of the Scheme of Amalgamation between CMI Energy India Private Limited (Transferor Company) and CMI Limited (Transferee Company) as approved by the Honble National Company Law Tribunal (NCLT), Principal Bench, New Delhi vide its order dated 3rd April, 2019 effective from 01st March, 2016, the authorised share capital of the Transferor Company has been added to and forms part of the authorised share capital of the Transferee Company. Accordingly, the authorised share capital of the Transferee Company stands increased to the extent of the aggregate authorised share capital of the Transferor Company i.e. Rs. 175,00,00,000 (Rupees One Hundred and Seventy Five Crores) divided into 17,50,00,000 (Seventeen Crore Fifty Lakhs) Equity shares of Rs 10/- (Rupees Ten) each.
Clause V of the Memorandum of Association and relevant article(s) of the Articles of Associationof the Transferee Company stands modified to give the aforesaid increase in the authorised capital of the Transferee Company pursuant to the order of Honble National Company Law Tribunal (NCLT), Principal Bench, New Delhi.
" The authorised Share Capital of the Company is Rs. 175,00,00,000 (Rupees One Hundred Seventy Five Crore only) divided into 17,50,00,000 (Seventeen Crore Fifty Lakhs only) Equity Share of Rs. 10/- (Rupees Ten) each with power to increase or reduce the capital of the Company and to divide the shares in the capital for the timebeing into several classes and to attach thereto respectively such preferential, deferred, qualified conditions as may determined by or in accordance withthearticlesassociationof the Company and vary, modify amalgamate or abrogate any such right, privilege or condition in such manner as may for the time being be provided by the Articles of Association of the Company."
5. Credit rating
During the year under review, the Company has improved its long term credit rating Positive. The BBB+ awarded by CRISIL moderate degree of safety regarding timely of financial obligation. The Companys credit rating has also improved to CRISIL A2 by CRISIL, reflecting moderate degree of safety regarding timely payment of financial CARE has reaffirmed the rating CARE BBB+ (Triple B Plus) / stable to the Long term bank facilitiesand CARE A3+ (A Three Plus) to the short term bank facilities.
6. Dividend and reserves
Based on the Companys performance, the Directors are pleased to recommend payment of dividend on equity shares @ Re. 1/- per equity share (10%) for the financialyear 2018-19 (previous year Rs 1/- per share). The dividend on equity shares, if approved by members, would involve payout of Rs 181.16 Lakhs including dividend distribution tax.
7. Public deposits
The Company has not accepted or renewed any fixed deposits during the period under review. It has not accepted any deposits from the public within the meaning of the provisions of Section 73 of the Companies Act, 2013 and Rules made thereunder. Therefore, it is not required to furnish information respect of outstanding deposits under non-banking, non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.
8. Subsidiaries, joint ventures or associate companies
As on 31 March, 2019, the Company has a wholly owned subsidiary i.e. CMI Energy India Private Limited. However, pursuant to the order passed by Honble NCLT dated 03 April, 2019, CMI Energy India Private Limited amalgamated with the Company and ceases to be the Subsidiary of the Company. Therefore, disclosure in Form AOC-1 in terms of Section 129(3) of the Act isnot required.
Special Further, during the year under review, CMI Agro Limited right, privileges or ceased to be the step down subsidiary of the Company.
9. Nternal financial controls I
The Board / Management believes that based on the knowledge/ informationgained by them about affairs of the Company from records, the Company has effective internal financial control systems and policies and such controls are operating effectively.
The internal control systems include documented policies, checks and balances, guidelines and procedures, that are supplemented by robust internalto CRISIL BBB+/ audit processes and monitored continuously through periodical reviews by management to provide reasonable assurance that all assets are safeguarded; and all transactions entered into by company are authorized, recorded and reported properly. Post-amalgamation, the Board/Management is in the process reviewing the internal controls framework of the Company with an objective to have a robust internal control framework commensurate with the size, scale and nature of business of the Company.
10. Directors and Key managerial personnel (Kmp)
Change in Directorship:
During the year under review there is no change in the composition of Board of Directors of the Company.
As on March 31, 2019, the Company has 6 Directors 196 with an Executive Chairman, which includes 2 Executive Directors, 4 Non-executive Independent Directors inclusive of 1 Woman Director. The Board consists of following members:
|Sl. No.||Name of Director||Din||Designation|
|1||Mr. Amit Jain||00041300||Chairman Cum Managing Director|
|2||Mr. Vijay Kumar Gupta||00995523||Whole-Time Director|
|3||Mr. Pyare Lal Khanna||02237272||Non-Executive Independent Director|
|4||Mr. Kishor Punamchand Ostwal||00460257||Non-Executive Independent Director|
|5||Mr. Manoj Bishan Mittal||00282676||Non-Executive Independent Director|
|6||Ms. Archana Bansal||01129623||Non-Executive Independent Director|
However, Executive Ms. Archana Bansal, Non-Independent Director resigned for the directorship of the Company on 28 May, 2019.
Further, the Board of Directors on recommendation of the Nomination and Remuneration Committee appointed Ms. Charu Jain as an additional director in the category of Non-Executive Director in accordance with Section149(4) of the Act, with effect from 28 May, 2019 to hold office for a term of 5 (five) consecutive years. In terms of office Section up to the date of ensuing Annual General Meeting.
The Nomination & Remuneration Committee of the Board hereby recommends the resolutionin relation executive Independent Director, for the the members of the Company. Brief profile Charu Jain has been given in the Notice convening the Annual General Meeting.
In accordance with the provisions of Section 152 of the Act and the Companys Articlesof Association, Mr. Vijay Kumar Gupta, Whole Time Director retires by rotation at the forthcoming Annual General Meeting and, being eligible offers himself for re-appointment. The Board and Nomination & Remuneration Committee recommend his re-appointment for the considerationof the Members of the Company at the forthcoming Annual General Meeting.
Mr. Vijay Kumar Gupta, whole time director of the Company will attain the age of 70 (Seventy) years on 15 December, 2019. Pursuant to Section read with relevant rules of Companies Act, 2013, no company shall continue the employment of any person as whole-time director if he/she has attained the age of seventy years. However, the appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the for notice for such motion continuation of Mr. Vijay Kumar Gupta as Whole Time Director.
Directors liable to retire by rotation
Mr. Vijay Kumar Gupta is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment.
None of the Directors are disqualified under the provisions of the Companies Act, 2013.
Key managerial personnel
During the year under review, in terms of the provisions of Section 2(51) and 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company were as under: -
1. Mr. Amit Jain Chairman Cum Managing Director
2. Mr. Vijay Kumar Gupta- Whole Time Director
3. Mr. Rattanlal Aggarwal Chief Financial Officer
4. Mr. Subodh Kumar Barnwal Company Secretary
Changes in Key managerial personnel
There is no change in the Key Managerial Personnel (KMP) of the Company in terms of the provisions of Section 2(51) and 203 of the Companies Act, 2013
11. Directors responsibility statement
Pursuant to Sub-section Companies Act, 2013 with respect to the Directors Responsibility Statement, it is here by confirmed
I. In the preparation of the Annual Accounts for the year ended 31 March, 2019 the applicable accounting standards read with requirements set out under Schedule III of the Act have been followed and no material departures have been made from the same;
Ii. 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 31 March, 2018 and of the profit of the Company for that year ended on that date except to the extent mentioned in notes to accounts;
Iii. Proper and maintenance of adequate accounting accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing irregularities;
Iv. The Annual Accounts have been prepared on a going concern basis;
V. The internal financial controls to be followed by the Company had been laid down and that such internal financial operating effectively;
Vi. The proper systems had been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
12. Board perormance evaluation
The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation Non-Executive Directors and Executive Directors.
Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of of all Board Committees. The Board of Directors was assisted by the Nomination Committee. Some of the performance indicators experience, based on which evaluation expertise, knowledge and skills required for achieving strategy and for implementation of best governance practices which ultimately contributes to the growth (5)ofsection134ofthe of the Company in compliances with all policies of that: the Company.
13. Number of meetings of the board of Directors
During the year under review, 10 (Ten) Board Meetings were duly convened and held. The details of the number of meetings of the Board held during the Financial Year 2018-19 forms part of the Corporate Governance Report.
14. Committees of the board
The Board of Directors has the following Committees:
1. Audit Committee
2. Nomination and Remuneration
3. Stakeholders Relationship
4. Corporate Social Responsibility Committee. Records in The details of the Committees along with their composition, and detecting fraud and other and attendance of members at the meetings provided in the Corporate Governance Report which forms part of this Annual Report. Further, during the year review, the board has accepted all the recommendations of the Audit Committee.
15. Statement on declaration By independent directors controls are adequate and were Your Company has received the necessary declaration from each Independent Director that he/she meets the criteria of Independence as laid out in Section 149(6) of the Companies Act, 2013 read with the Schedules, rules made thereunder and Regulation 25 of SEBI Listing Regulations, 2015
16. Nomination and remuneration policy
The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior of Management of the Company.
The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way fees and commission), Key Managerial the working sitting of Personnel, Senior Management and other employees. The policy also provides the criteria for determining qualifications, attributes and Independence of Director and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidates. The above policy has been posted on the website of the Company at http://www. Cmilimited.in/img/pdf/nomination%20and%20 Remuneration%20policy.pdf
17. Vigil mechanism Cum whistle blower policy
The Company has a vigil mechanism named Vigil Mechanism Cum Whistle Blower Policy, framed by Board of the Company, to deal with instances of fraud and mismanagement, if any. Details of the same are given in the Corporate Governance Report.
The same has also been displayed on the website of the Company viz: - http://www.cmilimited.in/img/ pdf/Vigil%20mechnism%20plocy-%20Whistle%20 Blower%20policy.pdf
18. Related party transactions
All transactions entered with Related Partiesfor the year under review were on arms length basis and thus a disclosure in Form AOC-2 in terms of Section 134 of the Act is not required. Further, there are no material related party transactions during the year under review as definedunder SEBI (listingobligations and Disclosure Requirements) Regulations, 2015 and adopted by the Board of Directors in the Related Party Transactions Policy of the Company. All related party transactions are mentioned in the notes to the accounts. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions
All Related Party Transactions are placed before the Audit Committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are verifiedand details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The Policy on Related Party Transactionsas approved by the Board of Directors has been uploaded on the website of the Company and can be seen at the link http://www.cmilimited.in/img/pdf/policy_on_ Related_party_transactions.pdf. None of the Directors has any pecuniary relationship the Company except remuneration.
19. Corporate social responsibility
In compliance with Section 135 of the Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Board of the Company has formed Corporate Social Responsibility ("CSR")
Committee of meetings, terms of reference and attendance of members at the meetings are provided in the Corporate Governance Report. The policy on CSR as approved by the Board of Directors is also uploaded on the website of the Company i.e. Http://www. Cmilimited.in/img/pdf/Corporate%20Social%20 Responsibility%20policy.pdf.
Pursuant to Section read with CSR policy of the Company, it is required to spend two percent of the average net profit of the Company for three immediately preceeding financial activities as required years.annualreportoncsr under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, have been annexed as Annexure -1 and forms integral part of this Report.
A) Statutory Auditor
M/s Krishna Neeraj & Associates, Chartered Accountants, (Firm Registration No.023233N) were appointed as Statutory Auditors of the Company for a period of five the at the Annual General Meeting (AGM) of the Members held on 28 September, 2016 on a remuneration mutually agreed upon by the Board of Directors and the Statutory Auditors. Ation ratific Their appointment was subject to by the Members at every subsequent AGM held after the AGM held on 28 September, 2016.
Pursuant to the amendments made to Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective from 7 May, 2018, the requirement of seeking ratification of the Members for the appointment of the Statutory Auditors has been withdrawn from the Statute. Hence the resolution seeking ratificationof the Members for continuance of their appointment at this AGM is not being sought.
There is no audit qualification,reservation or or transactionsvis-a-vis adverse remark for the year under review.
B) Secretarial Auditor
Pursuant to provision of Section 204 of the Companies Act, 2013, and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed M/s Pooja Anand & Associates, Practicing Company Secretaries for conducting Secretarial Audit of the Company for the financial year 2018-19.
The Secretarial Audit Report for FY2018-19 as submitted by Secretarial Auditor in Form MR-3 is annexed as Annexure-2.
There is no secretarial audit qualification for year under review.
C) Cost Auditor
In terms of Section148 of the Act, the Company is required to maintain cost records and have the audit of its cost records conducted by a cost accountant. Cost records are made and maintained by the Company as required under Section 148(1) of the Act. The Board of Directors at its meeting held on 30 May, 2018 appointed M/s Ajay Kumar Singh & Co (Firm Registration Number 000386), Cost Auditors to conduct the Cost Audit for the Financial Year 2018-2019.
For the financial year ending 31 March, 2020, the Board of Directors of the Company has, on ee, Committ therecommendationoftheaudit approved the appointment of M/s Ajay Kumar Singh & Co as the cost auditors of the Company. M/s Ajay Kumar Singh & Co, Cost Accountants have vast experience in the field of cost audit.
In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the cost auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the members of the Company.
Accordingly, an appropriate resolution proposed remuneration of Rs. 45,000 per annum plus applicable taxes and out-of-pocket expenses payable to the cost auditors for the Financial Year ending 31 March, 2020, forms part of the notice of ensuing Annual General Meeting for
21. Other information
A) Details in respect of frauds reported by Auditors other than those which are reportable to the Central Government
The Statutory Auditors, Secretarial Auditors, Cost Auditors or Internal Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies including rules made thereunder.
The Company does not have any Scheme of Stock Option for its employees, Directors etc.
C) Disclosure under Section 43(a)(iii) and Section 54(1)(d) of the Companies Act, 2013
During the year under review, the Company has not issued any shares with differential voting rights and sweat equity shares and hence, no information as required under Section Section 54(1)(d) of the Companies with applicable rules is required to be disclosed.
D) Risk management
The Board/ management is reviewing the Risk management framework of the Company. The Company would put in place a suitable enterprise risk management framework for identifying and evaluating risks and opportunities that may have bearing on the organization. Recognises that these risks need to be managed and mitigated to protect the shareholders and other stakeholders interest.
E) Conservation energy, technology Absorption and Foreign exchange earnings and outgo
In accordance with Section 134(3)(m) Companies Act, 2013, read with the Rule 8(3) for the of the Companies (Accounts) Rules, 2014, as amended, the information on conservation of energy, technology absorptionand foreign exchange earnings and outgo are annexed as Annexure - 3 hereto and forms an integral part of this Report.
F) particulars ofemployees and Related Disclosures
Disclosures pertaining to remuneration and other details of the employees as required under Section 197(12) of the Companies Act 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are annexed to this report as
G) extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section integral part of this Report and is available on the Companys website http://www.cmilimited.in/ img/pdf/extract%2of%20Annual%20Report.pdf and annexed to this report as Annexure 5
H) Management Discussion & Analysis Report
The Management Discussion and Analysis Report on the operations of thecompany, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing in a separate sectionand forms an integral part of this Report.
I) particulars ofloans, Guarantees or Investments under Section 186
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no 9 & 10 to the Financial Statements.
J) Corporate Governance Report
The Company has complied with requirements of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on the Corporate Governance practices followed by the Company, together with a certificate from the Practicing Company Secretary regarding compliance are given as an Annexure 7 to this report.
K) Cost Records
As per the requirement of Central Government and pursuant to provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014 as amended from time to time, audit of cost records of the Company is being carried out. The Board of Directors, on recommendation of Audit Committee, has appointed M/s Ajay Kumar Singh & Co., Cost Accountants, as Cost Auditor to audit the cost records and accounts relating to cable manufacturing for the financial ending 31 March, 2020. As per the requirement of the aforesaid section, a resolutionratifying remuneration payable to Cost Auditors forms part of the Noticeconvening the 52nd Annual General Meeting.
Your Company has maintained cost records and 92 oftheact,whichformsan accounts as per Section148 (1) of the Companies Act, 2013. Further, the Cost Audit Report along with annexure for FY2018-19 was approved by board of Directors on 31 October, 2018.
L) Disclosure under the Sexual Harassment of Women at Work place (prevention,prohibition and Redressal) Act, 2013.
The Company has laid down Anti Sexual Harassment policy on Gender Equality, Gender Protection, Preventionof Sexual Harassment and Redressal System in line with the requirements ofregulations")isprovided the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, Apprenticeship) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed off during the year under review-
No. Of complaints received: Nil
No. Of complaints disposed of: NA
m) Secretarial Standards
The Company has in place proper systems to ensure compliance with the provisions of the applicable secretarial standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectively.
22. Cautionary note
Certain Statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook. Investors are cautioned that this discussion contains forward looking Statement that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, dependence on certain businesses, dependence on availability of qualified other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.
The Directors wish to place on record their gratitude to the Authorities, Banks, Business Associates and Shareholders for their unstinted support, assistance andco-operation.The Directors place on record their and trained manpower and deep appreciation to employees at all levels for their hard work, dedication and commitment.
|By order of the Board|
|For cmi limited|
|Place: new Delhi||Chairman Cum managing Director|
|Date: 13 August, 2019||Din: 00041300|