C. Mahendra Exports Limited
Your Directors are pleased to present the 9th Annual Report and the AuditedAnnual Accounts for the financial year ended 31st March 2015.
The financial performance of the Company for the year ended 31st March2015 is summarized below:
| || ||(Rs in Million) |
|Particulars ||For the F. Y. ended 31st March 2015 ||For the F. Y. ended 31st March 2014 |
|Income from Operation: || || |
|Net Sales ||5835.09 ||20148.30 |
|Other Income ||380.51 ||93.05 |
|Total income from operations ||6215.60 ||20241.34 |
|Profit before Tax ||-1334.95 ||93.26 |
|Less: Current Tax ||- ||(18.00) |
|Mat Credit Entitlement ||- ||18.00 |
|Deferred Tax ||-4.61 ||16.61 |
|Wealth Tax ||0 ||0 |
|Less: Prior period income tax adjustment ||- ||-17.41 |
|Profit after Tax ||-1339.56 ||59.23 |
|Add: Profit brought forward ||1928.89 ||1869.66 |
|Amount Available for Appropriation ||589.33 ||1928.89 |
|Appropriation: ||- || |
|Utilized for bonus shares issued during the year || || |
|Balance Carried to Balance Sheet ||589.33 ||1928.89 |
REVIEW OF OPERATIONS
During the year under review the Companys net sales were Rs. 5835.09 million asagainst Rs. 20148.30 million.
Your Directors are continuously looking for lucrative ventures for future growth of theCompany.
BACKGROUND OF C. MAHENDRA GROUP
C. Mahendra Exports Ltd a renowned and trusted name since 1974 is one of the leadingdiamantaire and jewellery Company with a wide spread around the world.
The pioneers of the Company Mr. Mahendra C. Shah and Mr. Champak K. Mehta commencedthe business in 1974. C. Mahendra Exports was formed in the year 1978 to carry on thebusiness of manufacturing and trading of diamonds. It is the flagship company of our CMGroup. C. Mahendra Exports set up its first state of the art factory for manufacturing cutand polished diamonds in Surat India in the year 1993. Subsequently three subsidiarieswere established to handle the expanded business.
Offices were opened outside India for effective and increased marketing. In2003 CiemmeJewels incorporated in 2006 C. Mahendra Exports commissioned the second state of the artmanufacturing factory at Varachha Road Surat India to manufacture large size polisheddiamonds In Jan 2007 C. Mahendra Exports converted from Partnership Firm into a privatecompany and March 2007 changed from Private Company to Public Limited Company i.e. C.Mahendra Exports Ltd.
C. Mahendra Exports Ltd. employs the latest and most advanced technologies formanufacturing of cut and polished diamonds with ultimate brilliance diamonds. CM Group hasa highly skilled pool of human resources.
C. Mahendra Exports Ltd. has its Registered and Principal Sales Office in Mumbai fromwhere all the marketing assorting administration and finance operations are controlled.The entire operation for manufacturing is controlled and managed from the Surat office. CMGroup is firmly established across major diamonds and jewellery centers globally in 5countries namely.
China - Hong Kong
India - Mumbai
UAE - Dubai
Belgium - Antwerpen
U.S.A - New York
C. Mahendra Exports Ltd. enjoys an envious position in the diamond industry of beingone of the top exporters with an unblemished client record. C. Mahendra Exports Ltd. hasits presence in the diamond studded jewellery business. Our branded jewellery is retailedunder the brand name "Ciemme" across the world.
C. Mahendra BVBA the Antwerp based entity of the C. Mahendra Group is a member of theResponsible Jewellery Council (RJC).The management of C. Mahendra B.VB.A. as a member ofthe Responsible Jewellery Council (RJC) is committed to complying with the Code ofPractices of RJC.
Diamond Manufacturing Facilities -
The Company set up its first factory for diamond production at Udhana in 1993. TheCompany established second diamond cutting and polishing factory in Varachha in 2006 (100% EOU) but now EOU status has been expired and established a unit in SEZ.
Green Energy Division (Wind Energy) -
The Company started the activities related to its Green Energy Division by setting upWind farm businesses at Sangli Maharashtra in 2006 and Kutch Gujarat in 2007.
The company has invested Rs. 68 Crores in the Green Energy in the state of Maharashtraand Gujarat. In the year 2005-06 the Company has installed eight Wind Turbine Generators(WTGs) each of 1.25 MW total having 10 MW in the state of Maharashtra for sale of energyto MSEDCL. Further in the year 2007-08 company has installed two Wind Turbine Generators(WTGs) each of 1.50 MW total having 3.00 MW in the state of Gujarat for the captiveconsumption (Wheeling) for its units at Udhana & Varachha in Surat.
The Company has various domestic and international subsidiaries and step-downsubsidiaries:
1) C. Mahendra International Limited
2) C. Mahendra BVBA Antwerp (Belgium)
3) C. Mahendra DMCC Dubai UAE
4) C. Mahendra International Limited Mauritius
5) International Gems and Jewellery FZE
6) AL DASPA Gems and Jewellery FZE
7) Ciemme Jewels Limited
8) C. Mahendra USA Inc.
9) C. Mahendra Exports (HK) Limited
CONSOLIDATED FINANCIAL STATEMENTS
As the audit of the International Subsidiaries of the Company has not been completedhence the Consolidated Financial Statements are not annexed.
CHANGE IN THE NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business.
The Company is availing Working Capital requirements from the Consortium of 14 Bankersand has obtained adequate finance during the year under review. The debt is secured byimmovable properties current assets and others. The banks have classified the loans givento the Company as NPA.
Due to losses during the year under review the directors regret their inability todeclare any dividend for the year under review.
ISSUE OF SHARES ON CONVERSION OF SHARE WARRANTS
Bennett Coleman & Co. Ltd have opted to convert the share warrant issued in theirfavour into 567780 fully paid up equity shares. The same were converted allotted andlisted on the stock exchanges.
ISSUE OF BONUS SHARES
Further the Company declared Bonus Shares in the ratio 1:1 to the Equity Shareholdersof the Company. The Bonus shares allotted to the promoters are yet to be listed on thestock exchanges. Exchange have imposed penalty for delay in compliance of Clause 41 of theListing Agreement.
LISTING ON STOCK EXCHANGES
The Shares of the Company continue to be listed on BSE Limited and National StockExchange of India Limited both having nationwide terminals.
The shares of the Company have been delisted from MCX-SX.
The Company has not accepted any public deposits during Fiscal 2015.
1. Ms. Bindya Vasani (DIN: 03636726) and Mr. Diwakar Singh (DIN: 07255277) wereappointed as Non-Executive Independent Directors of the Company. Ms. Bindya Vasani is alsothe Women Director of the Company pursuant to clause 49 (II) (A) (1) of Listing agreementand Section 149 of the Companies Act 2013 w.e.f. 20th June 2015.
The Company has received Notices in writing from a Member alongwith requisite depositsof money proposing the aforesaid two directors to the office of Directors under theSection 160 of the Companies Act 2013.
The Board recommends their appointment as Independent Directors of the Company notliable to retire by rotation. Necessary resolutions for obtaining approval of the Membersin respect of the above appointments have been incorporated accompanying notice of AnnualGeneral Meeting.
2. Appointed Mr. Chetan N. Bafna (06968721) as Non-Executive Independent director ofthe company w.e.f. 13th November 2014.
3. Appointed Mr. Swapnil T. Dafle as the Company Secretary and Compliance officer (KeyManagerial Personnel of the Company) w.e.f. 7th May 2014.
4. Resignation of Mr. Kailashchandra C. Chaudhary Non-Executive Independent directorfrom the directorship of the Company w.e.f. 8th June 2014 and the sameaccepted by the board.
5. Resignation of Mr. Sandeep M. Shah Whole time director from the directorship of theCompany w.e.f. 29th December 2014 and the same accepted by the board.
6. Resignation of Mr. Vittala. S. Hegde Non-Executive Independent director from thedirectorship of the Company w.e.f. 18th September 2014 and the same acceptedby the board.
7. Resignation of Mr. Ashish Kumar Shrivastava Company Secretary and Complianceofficer (KMP) from the Company w.e.f 31st March 2014 and the same accepted bythe board.
No Directors are liable to retire by rotation in the ensuing Annual General Meeting.
The Properties and Assets of the Company are adequately insured.
During the year the Company has not accepted any deposit.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the financialyear with related parties were on an arms length basis in the ordinary course ofbusiness and were in compliance with the Section 188 of the Companies Act 2013 read withRule 15 of Companies (Meeting of Board and its Powers) Rules 2014 and the Clause 49 ofthe Listing Agreement. There are no materially significant Related Party Transactions madeby the Company with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.
A statement of all Related Party Transactions is placed before the Audit Committee forits review
The Company has adopted a Related Party Transactions Policy and is uploaded on theCompanys website There have been no materially significant related partytransactions between the Company and Directors the management subsidiaries or relatives.
During the Fiscal 2015 there are no material transactions between the Company and therelated parties as defined under Clause 49 of the Listing Agreement. Further alltransactions with related parties have been conducted at an arms length basis andare in ordinary course of business. Accordingly there are transactions that are requiredto be reported in Form AOC-2 and as such form annexure I in Directors Report.
PARTICULARS OF EMPLOYEES
The Company does not have any employee/Director who is in receipt of remunerationaggregating to the sum prescribed in Section 197 of the Companies Act 2013 ("theAct") read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules 2014
The required disclosures with respect to Remuneration and other details are set out inAnnexure - II to this Report.
The relations between the management and the employees generally remained cordial inthe year under review.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
The details of Loans Guarantees or Investments made during the year are given below:
|Sr. No. Companies ||Nature of Transaction ||Loans ||Guarantees ||Investments |
|1 C. Mahendra International Limited ||Investment Capital ||- ||- ||20128000 |
|2 C. Mahendra BVBA ||Investment Capital ||- ||- ||616896799 |
|3 C. Mahendra DMCC ||Investment Capital ||- ||- ||2560920 |
|4 Ciemme Jewels Limited ||Investment Capital ||- ||- ||384000000 |
|5 C. Mahendra trading ||Investment Capital ||- ||- ||374301301 |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Act read along with Rule 8of the Companies (Accounts) Rules 2014 is Annexed III
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 the Directors state that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) Appropriate accounting policies have been selected and applied consistently and havemade judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the profitand loss of the Company for the year ended March 31 2015;
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Proper internal financial controls were followed by the Company and such internalfinancial controls are adequate and were operating effectively;
f) Proper systems are devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
During the year under review 12 (twelve) Board Meetings were convened and held.Details of the composition of the Board and its Committees and of the Meetings held andother relevant details are provided in the Corporate Governance Report.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Companys policy on Directors appointment and remuneration and othermatters provided in Section 178(3) of the Act has been disclosed in Corporate GovernanceReport which forms part of Annual Report. AUDITORS Statutory Auditors
The Auditors M/s R. H. Modi & Co. Chartered Accountants (Firm Reg. No. 106486W)will retire at the conclusion of the forthcoming Annual General Meeting and are eligiblefor re-appointment. Members are requested to consider their re-appointment on suchremuneration as may be mutually agreed to between the Statutory Auditors and the Board.
M/s V. A. Parikh & Associates Chartered Accountants and M/s NSM & AssociatesChartered Accountants are the internal auditors of the Company.
M/s Nanty Shah & Associates were the Cost Auditors of the Company. The Company hasbeen exempted from Cost Audit is not applicable to the Company vide MCA Circular and sincethen the Cost Audit has been discontinued.
M/s H.S Associates Practicing Company Secretaries were appointed as SecretarialAuditor to conduct the Secretarial Audit of the Company for the Financial Year 2014-2015pursuant to section 204 of the Companies Act 2013 read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Secretarial AuditReport is attached as Annexure IV. The Secretarial Auditors Report for thefinancial year 2014-15 does not contain any qualification reservation or adverse remark.
VIGIL MEGHANISM/WHISTLE BLOWER POICY
The Company has adopted a Whistle Blower Policy establishing a Vigil Mechanism thatenables the Directors and Employees to report genuine concerns. The Vigil Mechanismprovides for (a) adequate safeguards against victimization of persons who use the VigilMechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board ofDirectors of the Company in appropriate or exceptional cases. The policy is on the websiteof the Company.
CORPORATE SOCIAL RESPONSIBILITY The Board has constituted Corporate SocialResponsibility (CSR) Committee under the Chairmanship of an Independent Director pursuantto the subsection (1) of Section 135 of Companies Act 2013.
The CSR Committee has formulated CSR Policy of the Company which is available onCompanys website - www.cmelgroup.com
The Company has incurred loss in the year under review and due to the company turninginto NPA; the Company is yet to initiate its CSR activities RISK MANAGEMENT
The Company has devised and implemented a mechanism for risk management and hasdeveloped a Risk Management Policy. The Policy provides for creating a Risk Registeridentifying internal and external risks and implementing risk mitigation steps. The policyis on the website of the Company.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
There was one separate meeting of Independent Directors held on Friday 27thMarch 2015 and 2 (Two) Independent Directors were present i.e. Mr. Chetan Bafna(Chairman) and Mr. Prabodh N. Shah. In the Meeting the Independent Directors have reviewedthe performance of the Chairman of the Company- Mr. Mahendra C. Shah and the performanceof other Non Executive Directors and the Board as a whole. And assess the qualityquantity and timeliness of flow of information between the Company management. Afterreview the Independent Directors were of the opinion that the performances of all companyneed to have more stronger to face the currant losses and commit to overcome in nearfuture.
Pursuant to Clause 49 of the Listing Agreement the Company has adopted most of theprovisions of Clause 49 of the Listing agreement. A report on Corporate Governance alongwith a certificate from the Secretarial Auditor of the Company regarding the compliance ofconditions of Corporate Governance and also the Management Discussion and Analysis Reportare annexed to this report.
DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
The Company has in place a Remuneration Policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of the Act and Clause 49 of theListing Agreement the same is annexed. Due to the ongoing losses and paucity of fundsthe Promoter-Directors of the Company have foregone their salary.
DECLARATION BY INDEPENDENT DIRECTOR
Pursuant to Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement the Independent Directors of the Company have given the declaration to theCompany that they qualify the criteria of independence as required under the Act.
Pursuant to the provisions of Companies Act 2013 and clause 49 of the ListingAgreement the Board has carried out annual performance evaluation of its own performancethe directors individually as well the evaluation of the working of its Audit Nomination& Remuneration and Stakeholder committee including the Chairman of the Board who wereevaluated on parameters such as level of engagement and contribution and independence ofjudgment thereby safeguarding the interest of the Company. The performance evaluation ofthe Independent Directors was carried out by the entire Board. The performance evaluationof the Chairman and the Non Independent Directors was carried out by the IndependentDirectors. The Directors expressed their satisfaction with the evaluation process.
REPORT ON SEXUAL HARASSMENT IN THE FINANCIAL YEAR
In compliance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 the Company had constituted an Internal Complaints Committee forprevention and redressal of complaints of sexual harassment against women. The Committeecomprises of the following members:-
1. Ms. Kalpana D Thakkar (Presiding Officer - Senior Employee)
2. Mr. Sanjay M. Masugade (Member - Human Resources & Administration)
During the financial year the Company has received NIL compliant
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is AnnexureV herewith. COMMENT ON SECRETARIAL AUDITOR REPORT AND AUDITOR REPORT Secretarial AuditorReport and Auditor Report is self explanatory.
Your directors would like to place on record their deep sense of gratitude to theShareholders Banks Financial Institutions valued customers and business associates andvarious other government/semi-government agencies for all the guidance co-operationsupport and encouragement extended by them to the company.
Your directors would also like to take this opportunity to gratefully appreciate thehard work and dedicated efforts put in by the employees and look forward to theircontinued contribution in future endeavors of the company.
For and On behalf of the Board of Directors
| ||Sd/- |
|Date: 26/08/2015 ||(Mahendra C. Shah) |
|Place: Mumbai ||Chairman |