Commercial Syn Bags Ltd Directors Report.

BOARDS’ REPORT

To,

The Members

Commercial Syn Bags Limited

The Directors take pleasure in presenting the 34th Annual Report together with the audited financial statements for the year ended 31st March, 2018.

HIGHLIGHTS OF FINANCIAL PERFORMANCE

Total revenue for the year was Rs. 16156.62 Lakhs as compared to Rs. 12098.16 Lakhs increased by 33.55%

Net Revenue from operations for the year was Rs. 16097.25 Lakhs as compared to Rs. 11901.47 Lakhs in the previous year, increased by 35.25%

Profit before tax for the year was Rs. 898.20 Lakhs as compared to Rs. 758.84 Lakhs in the previous year, increased by 18.36%

Profit after tax for the year was Rs. 615.93 Lakhs as compared to Rs. 531.70 Lakhs in previous year in the previous year, increased by 15.84%

SUMMARISED PROFIT AND LOSS ACCOUNT ( Rs. in Lakhs)
Particulars Year ended
31.03.2018 31.03.2017
Total Revenue (Revenue from operations and other income) 16156.62 12098.16
Profit Before Tax (PBT) 898.20 758.84
Provision for Tax (282.27) (227.14)
Profit After Tax (PAT) 615.93 531.70
Balance brought forward from previous year 2423.88 1892.20
Less: Prior Period Taxations 0.00 (0.02)
Surplus carried to the next year’s account 3039.81 2423.88
Earning per share (Basic and Diluted) (Amount in Rs.) 5.21 4.87

STATE OF THE COMPANY’S AFFAIRS & REVIEW OF OPERATIONS

The Company is carrying business of manufacturer, producers, processors, importers, exporters, buyers and sellers of FIBC, BOPP, Bulk Bags, Poly Tarpaulin, Woven Sacks/Bags, Box Bags, PP/HDPE Fabric, Liner and Flexible Packaging etc. from its Plants located at Pithampur, District-Dhar, (M.P) and the company is also having a solar power generating system installed in Sitamau, District-Mandsaur (M.P.) and the power generated is being used as captive consumption at its manufacturing units, hence no revenue is being generated from this segment. The Company has also started business activities relating to trading of granules as DCA cum Consignment Stockiest of OPaL and has identified it as a separate business segment.

Except that during the year under review, there has been no change in the nature of the business activities of the Company.

UPDATES ON ONGOING PROJECTS:

1. Commencement of commercial production at company’s SEZ Unit situated at Pithampur (MP):

Commercial production at Company’s SEZ Unit situated at Indore Special Economic Zone, Plot No. 15 to 18, Phase-1, Sector-III, Pithampur (MP); has been successfully commenced w.e.f. 22nd April, 2018 with revised estimated total cost of Rs.3,460 Lakhs and the company has expanded operations at its existing Unit SEZ situated at Pithampur (MP); through capacity addition of 3,900 MT p.a. and setting up of complete manufacturing facilities by installation of Tape Line and Looms with clean room facilities for manufacturing of Food Grade FIBC Bags. The total production capacity (all units) of the company has been increased from 13,100 MT p.a. to 17,000 MT p.a.

2. Appointment as Training Partner/PIA under DDU-GKY for Skill Development, Training and Placement Programme of MoRD

(Govt. of India):

Company has been appointed as Project Implementing Agency (PIA)/Training Partner and assigned the work of execution and implementation of the skill development programme under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), a skill development and placement initiative of the Ministry of Rural Development (MoRD), Government of India. It is a part of the National Rural Livelihood Mission (NRLM) - tasked with the dual objectives of adding diversity to the incomes of rural poor families and caters to the career aspirations of rural youth. Total 1,540 candidates belonging to rural areas of various districts of Uttar Pradesh will be covered under this project and will be provided industrial and job oriented training by the company at training centre established for the purpose at Nawabganj, District- Gonda (UP). This move will help the company to get better trained workers for its operations.

CREDIT RATING:

CRISIL Limited vide their letter number CSBL/203924/BLR/071801126 dated 27th July, 2018; has reviewed and reaffirmed the following

ratings to the bank loan facilities of Rs. . 71.50 Crores availed by the Company:

Total Bank Loan Facilities Rated Rs. 71.5 Crore (Enhanced from Rs. 62.55 Crore)
Long Term Rating CRISIL BBB/Stable (Reaffirmed)
Short-Term Rating CRISIL A3+ (Reaffirmed)

The aforesaid rating is valid till 31st March, 2019.

DIVIDEND

To strengthen the financial position and funding to the ongoing projects of the Company, no dividend is recommended by the Board for the Financial Year 2017-18. (Previous year Nil)

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of the knowledge and belief and according to the information and explanations obtained by them, your Directors confirms the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently. Judgments and estimates have been made 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, 2018.

c. that 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. that they have prepared the Annual Accounts on a going concern basis;

e. that they have laid down internal financial controls for the company and such internal financial controls were adequate and were operating effectively.

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

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2018 was Rs. 1181.74 Lakhs divided into 1,18,17,400 equity shares of Rs. 10/- each. During the year under review, the Company has not issued equity shares or shares with differential voting rights or granted stock options or sweat equity.

TRANSFER TO RESERVES

During the year under review the company has not transferred any amount to the general reserves. However the Company has transferred

Rs. 30.00 Lakhs received as Capital Subsidy to Capital Reserve during the year under review. (In previous year, your company has transferred Security Premium of Rs. 406.53 Lakhs (net of after writing off public issue expenses of Rs. 40.35 Lakhs)

FINANCE

Cash and Cash equivalent as at 31st March, 2018 is Rs. 269.73 Lakhs (Previous year Rs. 26.27 Lakhs).Your Company continues to focus on management of its working capital, Receivables, inventories and other working capital parameters are kept under continuous monitoring.

Cash & Cash equivalents as at 31st March, 2018 includes Rs. 246.47 Lakhs received as advance in the form of aid from Government to carry out skill development and placement project under DDU-GKY which is kept in current account.

Your directors place on record their appreciation to Bank of India, Bank of Baroda and HDFC Bank Limited, bankers of the Company for providing timely support for short term and long term financial requirements of the company.

DEPOSITS

Your Company has not accepted deposit from the public falling within the ambit of section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and there were no remaining unclaimed deposits as on 31st March, 2018. Further, the Company has not accepted any deposit or loans in contravention of the provisions of the Chapter V of the Companies Act, 2013 and the Rules made there under.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not provided any loan and guarantees and also not made any investment pursuant to Section 186 of the Companies Act, 2013.

CSR INITIATIVES

In view of the profits and turnover of the company, your Company was required to undertake CSR projects during the year 2017-18 under the provisions of section 135 of the Companies Act, 2013 and the rules made their under. As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken various activities, which are in accordance with CSR Policy of the Company and Schedule VII of the Companies Act, 2013.The Annual Report on CSR activities is annexed herewith as "Annexure A".

OCCUPATIONAL HEALTH & SAFETY (OH&S)

This initiative involved positive engagement of personnel on the plant at every level. With regard to contractor safety, two key areas of focus were identified, namely Facility Management for the contractors’ employees and Equipment, Tools & Material Management. The Facility Management initiative was implemented to ensure adequate welfare facilities for contract labor such as washrooms with bathing facilities, rest rooms, availability of drinking water etc. The Equipment, Tools & Material Management Program ensured that the tools used by contractors were safe. The process of screening of contractors was made more stringent to ensure that the contractors were aligned with the Company’s objectives to ensure ‘Zero Harm’.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION

AND REDRESSAL) ACT, 2013

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (‘Act’) and Rules made thereunder, your company has constituted Internal Complaints Committees (ICC). Statement showing the number of complaints filed during the financial year and the number of complaints pending as on the end of the financial year is shown as under: -

Category No. of complaints pending at the beginning of F.Y. 2017-18 No. of complaints filed during the F.Y. 2017-18 No. of complaints pending as at the end of F.Y. 2017-18
Sexual Harassment Nil Nil Nil

Since, there is no complaint received during the year which is appreciable as the management of the company endeavor to provide safe environment for the female employees of the company.

MAINTENANCE OF COST RECORDS :

The company is not required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

RISK MANAGEMENT POLICY AND INTERNAL CONTROL ADEQUACY

The Company is operating in manufacturing and trading of FIBC, Bulk Bags, Poly Tarpaulin, Woven Sacks/Bags, Box Bags, PP/HDPE Fabric, Liner and Flexible Packaging etc. The major risks factors involved in the manufacturing and trading process is constantly maintaining high quality standards, fluctuations in the price of raw materials, risks from international competitors, fluctuations in currency rates, etc. Other than this, the government policy, local area authority, taxation policy may adversely affect the profitability of the Company subject to various process and clearance etc. as may be decided by the concerning State Government. Further, general market conditions relating to the demand, supply, and price relating to the products of the company also affect the business operations of the Company.

1. Internal Financial Control & its effectiveness

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has appointed Internal Auditors and the scope and authority of the Internal Audit (IA) function is defined in the procedure and appointment letter. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board.

Based on the report of internal audit and process the company undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon, if any, are presented to the Audit Committee of the Board.

2. Vigil Mechanism/Whistle Blower Policy

The Company has a vigil mechanism named vigil mechanism/whistle blower Policy to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy are annexed to the Board Report as "Annexure B" and are also posted on the website of the Company. (Link - http://comsyn.com/wp-content/uploads/2017/10/CSBL_Vigil-Mechanism-Whistle-Blower-Policy.pdf)

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE OF THE COMPANY

The Company does not have any subsidiary, associate or joint venture during the financial year 2017- 18 as well as at the beginning or closing of the financial year. Therefore, the financial statement is prepared on standalone basis and the requirement for disclosure in the Form AOC-1 is not applicable. However, the Company is an associate of Super Sack Pvt. Ltd. which is holding 31,14,000 equity shares representing 26.35% of total paid up equity share capital of the Company as on 31st March, 2018.

BOARD OF DIRECTORS, THEIR MEETINGS & KMPs

1. Constitution of the Board

The Board of directors are comprising of total 6 (Six) Directors, which includes 3(Three) Independent and 1 (One) Women director. The Chairman of the Board is Promoter and Managing Director. The Board members are highly qualified with the varied experience in the relevant field of the business activities of the Company, which plays significant roles for the business policy and decision making process and provide guidance to the executive management to discharge their functions effectively.

2. Board Independence

Our definition of ‘Independence’ of Directors is derived from Regulation 16 of SEBI (LODR) Regulations, 2015 and Section 149(6)

of the Companies Act, 2013. The Company is having following independent directors;

1. Mr. Hitesh Mehta

2. Mr. Neetesh Gupta (From 20.06.2015 to 10.05.2017)

3. Mr. Milind Mahajan (w.e.f. 10.05.2017)

4. Mr. Chintan Pushpraj Singhvi

As per provisions of the Companies Act, 2013, Independent Directors were appointed for a term of 5 (five) consecutive years and shall

not be liable to retire by rotation.

3. Declaration by the Independent Directors

All the Independent Directors have given their declaration of Independence stating that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013.Further that the Board is of the opinion that all the independent directors fulfill the criteria as laid down under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 during the year 2017-18.

4. Directors liable to retire by rotation

In accordance with the provisions of the Companies Act, 2013 and in terms of the Articles of Association ofthe Company, Mr.Virendra Singh Pamecha, Whole Time Director (DIN:07456367) of the Company is liable to retire by rotation at ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends to pass necessary resolutions for approval of the members as set out in the notice of the annual general meeting.

5. Changes in Directors and Key Managerial Personnel

Mr. Anil Choudhary, Chairman & Managing Director, Mrs. Ranjana Choudhary, Whole Time Director, Mr. Virendra Singh Pamecha, Whole Time Director, Mr. Ravindra Choudhary, CEO, Mr. Abhishek Jain, CFO and CS Megha Parmar, Company Secretary & Compliance Officer, have been categorized as Key Managerial Personnel within the meaning of section 203 of the Companies Act, 2013.

There was no change in the composition of Directors and Key Managerial Personnel during the Financial Year 2017-18 except the following:

1. The tenure of Mrs. Ranjana Choudhary (DIN: 03349699), Whole Time Director was expired on 31st May, 2017, therefore, upon the recommendation of Nomination and Remuneration Committee, the Board of Directors at their meeting held on 9th March, 2017 has re-appointed her for a further term of 5 (Five) years w.e.f. 1st June, 2017. Her appointment was also approved by the members at their 33rd Annual General Meeting held on 22nd September, 2017.

2. Mr. Neetesh Gupta (DIN: 06689342), Independent Director has resigned from the Board w.e.f. 10th May, 2017 vide his resignation letter dated 2nd May, 2017. The Board of Directors at their meeting held on 10th May, 2017 accepted his resignation.

3. Upon the recommendation of Nomination and Remuneration Committee of the Board, the Board of Directors at their meeting held on 10th May, 2017 has appointed Mr. Milind Mahajan (DIN:00155762) as Additional Director under the category of Independent Director for a term of 5 (Five) years w.e.f. 10th May, 2017. His appointment was also approved by the members at their 33rd Annual General Meeting held on 22nd September, 2017.

6. Meetings of the Board

The Board meets at regular intervals to discuss and decide on company/business policy and strategy apart from other Board business. The notice of Board meeting is given well in advance to all the Directors. Meetings of the Board are held in Indore, at the Registered Office. The Agenda of the Board/Committee meetings is circulated at least a week prior to the date of the meeting. However, in case of urgent business needs notice & agenda of Board/Committee meetings were circulated on shorter notice period with consent and presence of Independent Directors at the Meeting. The Agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. The Board met 5 (Five) times in the Financial Year 2017-18 viz.,10th May, 2017; 29th May, 2017; 4th August, 2017; 8th November, 2017; 28th February, 2018.The maximum interval between any two meetings did not exceed 120 days.

7. Separate Meeting of Independent Directors:

As stipulated by the Code of Independent Directors under the Companies Act, 2013; a separate meeting of the Independent Directors of the Company was held on 8th November, 2017 to review the performance of Non-Independent Directors (including the Chairman) and the entire Board. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its’ Committees which is necessary to effectively and reasonably perform and discharge their duties.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under section 178(3), uploaded on company’s website (Link -http://comsyn.com/wp-content/uploads/2018/08/RevisedNOMINATION-AND-REMUNERATION-POLICY-2-1.pdf.) Due to changes in the Regulation 19 of the SEBI (LODR) Regulations, 2015 and section 178 of the Companies Act, 2013, the Committee amended the Nomination and Remuneration Policy in compliance with these amendments and same was approved and adopted by the Nomination & Remuneration Committee and Board w.e.f. 2nd August, 2018.

1. Annual evaluation by the Board

The evaluation framework for assessing the performance of directors comprises of the following key areas:

i. Attendance of Board Meetings and Board Committee Meetings

ii. Quality of contribution to Board deliberations

iii. Strategic perspectives or inputs regarding future growth of company and its performance

iv. Providing perspectives and feedback going beyond the information provided by the management

v. Commitment to shareholder and other stakeholder interests

The evaluation involves self-evaluation by the Board Member and subsequently assessment by the Board of directors. A member of the Board will not participate in the discussion of his/her evaluation.

COMMITTEES OF THE BOARD

The Company has following five Committees:

(a) Audit Committee:

The Company has constituted Audit Committee as per requirement of section 177 of the Companies Act 2013 and Regulation 18 of the SEBI (LODR) Regulations, 2015. The terms of reference of Audit Committee are broadly in accordance with the provisions of SEBI (LODR) Regulations, 2015 and Companies Act, 2013.The constitution of the Audit Committee was approved by the Board of Directors and was re-constituted as per requirements. The Audit Committee comprises of the following Directors of the Company:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Hitesh Mehta Independent Director Chairman
2. Mr. Neetesh Gupta (till 10th May, 2017) Independent Director Member
3. Mr. Milind Mahajan (w.e.f. 10th May, 2017) Independent Director Member
4. Mr. Anil Choudhary Chairman & ManagingDirector Member

(b) Nomination and Remuneration Committee:

The Company has constituted a Nomination and Remuneration Committee in accordance with section 178 of the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015. The constitution of the Nomination and Remuneration Committee was approved by a Meeting of the Board of Directors and was re-constituted as per requirements. The Nomination and Remuneration Committee comprises of the following Directors of the Company:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Hitesh Mehta Independent Director Chairman
2. Mr. Neetesh Gupta (till 10th May, 2017) Independent Director Member
3. Mr. Milind Mahajan (w.e.f. 10th May, 2017) Independent Director Member
4. Mr. Chintan Singhvi Independent Director Member

(c) Stakeholders’ Relationship Committee:

The Company has constituted a shareholder/investors grievance committee ("StakeholdersRelationship Committee")to redress complaints of the shareholders. The Committee was constituted by the Board and was re-constituted on need basis. The Stakeholders’ Relationship Committee comprises the following Directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Neetesh Gupta (till 10th May, 2017) Independent Director Chairman
2. Mr. Milind Mahajan (w.e.f. 10th May, 2017) Independent Director Chairman
3. Mr. Hitesh Mehta Independent Director Member
4. Mr. Anil Choudhary Chairman & Managing Director Member

(d) Corporate Social Responsibility (CSR) Committee:

Company has constituted a CSR Committee in accordance with the provisions of section 135of Companies Act, 2013. The constitution of the CSR Committee was approved by a meeting of the Board and was re-constituted as per requirements. The CSR Committee comprises the following Directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Anil Choudhary Chairman & Managing Director Chairman
2. Mr. Hitesh Mehta Independent Director Member
3. Mrs. Ranjana Choudhary Whole Time Director Member

(e) Borrowing Committee:

Board of Directors has voluntarily constituted Borrowing Committee of the Board and powers of Borrowing under section 179(3)(d) of the Companies Act, 2013 were delegated to the said committee. This Committee comprises the following directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Anil Choudhary Chairman & Managing Director Chairman
2. Mrs. Ranjana Choudhary Whole Time Director Member
3. Mr. Virendra Singh Pamecha Whole Time Director Member
4. Mr. Hitesh Mehta Independent Director Member

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the Financial Year 2017-18 were on Arm’s Length Basis and were in the Ordinary Course of business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions were approved by the Audit Committee on omnibus basis or otherwise by the Board. The transactions entered into by the company are audited. The Company has developed Related Party Transactions Policy, Standard Operating Procedures for purpose of identification and monitoring of such transactions.

Due to changes in the Regulation 23 of the SEBI (LODR) Regulations, 2015, the Audit Committee and Board has adopted amended RPT Policy w.e.f. 2nd August, 2018 and same is available on the Company’s website (Link-http://comsyn.com/wp-content/uploads/2018/08/Revised-RPT-Policy.pdf).

Requirement of Form AOC-2 for annexed with the Board Report is not applicable on the company during the year 2017-18.

SIGNIFICANT AND MATERIAL ORDERSPASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

AUDITORS, THEIR REPORT & COMMENTS BY THE MANAGEMENT

1. Statutory Auditors

M/s Gupta & Ashok, Chartered Accountants, (ICAI Firm Registration No. 02254C), the Statutory Auditors were appointed for a term of consecutive 5 (Five) years at 30thAnnual General Meeting of the Company held on 30th September, 2014. As per the provisions of section 139 of the Companies Act, 2013, the appointment of Auditors was required to be ratified by Members at every Annual General Meeting; however in accordance with amendment made to section 139 vide Companies Amendment Act, 2017, enforced on 7th May, 2018, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. However, the company proposes to ratify their appointment at ensuing AGM as per terms of their original appointment and they will continue till the conclusion of 35th Annual General Meeting to be held in the year 2019.

As required under Regulation 33(d) of the SEBI (LODR) Regulation, 2015, the auditor has confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

Board is pleased to inform that there is no such observation made by the Auditors in their report which needs any explanation by the Board.

2. Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed M/s Ishan Jain & Co., Practicing Company Secretaries to undertake the Secretarial Audit of the Company for the year, 2017-18. The Report of the Secretarial Auditors in Form MR-3 is annexed herewith as "Annexure C" of this report. Your Board is pleased to inform that there is no such observation made by the Auditors in their report which needs any explanation by the Board, except that:

1) Some forms were filed by the Company after the prescribed time along with the adequate additional filing fee and this has reported as compliance by reference of payment of additional fees;

Management Comments: There was some delay in filing of the forms with ROC due to technical reasons and company has already complied with the same and has filed those Forms and paid additional filing fee as prescribed. Therefore, there is no default as such and same has been considered as compliance under the relevant provisions of the Companies Act, 2013.

2) Presently, about 42.00 Lakhs is the Un-spent amount towards Corporate Social Responsibility by the company as required under section 135 of the Act.

Management Comments: Company could not spend the remaining balance un-spent amount as the Company was in the process of identification of the suitable Projects and place for proper utilization of the CSR amount and need more time for verification of various proposal received from Implementing Agencies. Company is fully committed & dedicated towards its Social Responsibility. The company will endeavor to spend the unspent amount in the financial year 2018-19.

3) Penalty was confirmed on the Company as well as on Shri Virendra Singh Pamecha by the order of CESTAT dated 15.01.2018 u/s 114 and 125 of the Customs Act, 1962 due to confiscation of goods for furnishing wrong bill of Export and the same is already paid by the concerned.

Management Comments: The goods were confiscated by the adjudicating authority and a fine of Rs. 1,89,960/- was imposed on the

company. A nominal duty involvement of Rs. 23,479/- on additional supply was due to mis-declaration of the goods which was genuine mistake at the time of making the documents and there was no malafide intention or suppression of any material fact. Also, the goods wrongly dispatched by the company were finally exported out of India. The company has got substantial relief from Central Excise and Service Tax Appellate Tribunal against the order passed by Commissioner (Appeals), Customs, Central Excise & Service Tax,

Bhopal. The company has deposited duty amount of Rs. 23,479 along with interest and penalty amounting to Rs. 53,479/-. Mr. Virendra

Singh Pamecha has paid penalty of Rs. 23,479/-.

The Board of Directors at their Meeting held on 26th May, 2018, has re-appointed M/s Ishan Jain & Co., Practicing Company Secretaries to undertake the Secretarial Audit for Financial Year 2018-19.

DISCLOSURE FOR FRAUDS AGAINST THE COMPANY

In terms of provision of section 134(3) (ca) of the Companies Act, 2013, there were no instances of fraud reported to the Central Government by Auditors under section 143(12) of the Companies Act, 2013. Further that during the year 2017-18 there were no instances of fraud which are not reportable under section 143(12) of the Act.

CORPORATE GOVERNANCE

The Company being listed on the SME Platform of BSE Limited, is exempted from provisions of Corporate Governance as per Regulation15 of the SEBI (LODR) Regulations, 2015. Hence no Corporate Governance Report is required to be disclosed with Annual Report. It is pertinent to mention that the Company follows majority of the provisions of the corporate governance voluntarily as a part of Good Corporate Governance.

CODE OF CONDUCT

Regulation 17(5) of the SEBI (LODR) Regulations, 2015 requires listed companies to lay down a Code of Conduct for its directors and senior management, incorporating duties of directors as laid down in the Companies Act, 2013. The Company has adopted a Code of Conduct for all Directors and Senior Management of the Company and same is hosted on the website of the company at following link. (Link-http://comsyn.com/wp-content/uploads/2017/10/CSBL_Code-of-Conduct-for-BODKMPs-Senior-Management_.pdf)

CONSOLIDATED FINANCIAL STATEMENTS

Since the company is not having any subsidiary, associates or joint venture, therefore, the requirement for Consolidated Financial Statements in accordance with relevant Accounting Standards (AS) is not applicable to the Company.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure D".

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH

HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

No material changes and commitments affecting the financial position of the Company occurred during the Financial Year to which this financial statements relate and the date of report. Except, that the company has started the commercial production at SEZ Unit situated at

Indore Special Economic Zone, Plot No. 15 to 18, Phase-1, Sector-III, Pithampur (MP) at a revised estimated total cost of Rs. 3,460 Lakhs.

NON APPLICABILITY OF THE INDIAN ACCOUNTING STANDARDS (IND-AS)

As per proviso to regulation Rule 4(1) of the Companies (Indian Accounting Standards) Rules, 2015 notified vide Notification No.G.S.R.111(E) on 16th Feb., 2015, Companies whose shares are listed on SME exchange as referred to in Chapter XB of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, are exempted from the compulsory requirement of adoption of IND-AS w.e.f. 1stApril, 2017. As your Company is also listed on SME Platform of BSE Limited, is covered under the exempted category and is not required to comply with IND-AS for preparation of financial statements beginning with period on or after 1st April 2017.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure E".

RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE’S REMUNERATION AND

PARTICULARS OF EMPLOYEES

Pursuant to provision of section 197(12) of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the details of Top 10 employees given in the Annexure F.

During the year, none of the employees received remuneration in excess of Rs. One Crore Two Lakhs or more per annum, or Rs. Eight Lakhs Fifty Thousand per month for the part of the year, in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.Therefore, there is no information to disclose in terms of the provisions of the Companies Act, 2013.

INDUSTRIAL RELATIONS

During the year under review your Company enjoyed cordial relationship with workers and employees at all levels.

PREVENTION OF INSIDER TRADING

In view of the SEBI (Prohibition of Insider Trading) Regulation, 2015 the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Board of Directors at their meeting held on 26th May, 2018 has adopted revised Code of Fair Disclosure Policy and Code of Conduct under the SEBI (Prohibition of Insider Trading) Regulation 2015 and amended Code/Policy were also hosted on the website of Company.

(http://comsyn.com/wp-content/uploads/2018/05/CSBL_Code_of_Fair_Disclosure.pdf)

(http://comsyn.com/wp-content/uploads/2018/05/CSBL_Code_of_Conduct_for_Insider_under_SEBI_PIT_2015.pdf)

The Code requires Trading Plan, pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. However, there were no such instances in the Company during the year 2017-18.

CAUTIONARY STATEMENT

The statements made in this Report and Management Discussion and Analysis Report relating to the Company’s objectives, projections, outlook, expectations and others may be "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ from expectations those expressed or implied. Some factors could make difference to the Company’s operations that may be, due to change in government policies, global market conditions, foreign exchange fluctuations, natural disasters etc.

ACKNOWLEDGMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and cooperation extended by them. The Directors also acknowledge support of the BSE Ltd., NSDL, CDSL, Registrar &Share Transfer Agent and all other stakeholders of the Company viz. customers, members, dealers, vendors, bankers and other business partners for the excellent support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board
Place: Indore
Date: 2nd August, 2018
Anil Choudhary
Chairman & Managing Director
DIN: 00017913