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CIL Nova Petrochemicals Ltd.

BSE: 533407 Sector: Industrials
NSE: CNOVAPETRO ISIN Code: INE672K01025
BSE LIVE 15:40 | 15 Dec 42.20 0.95
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NSE 15:31 | 15 Dec 42.75 2.45
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OPEN 42.30
PREVIOUS CLOSE 41.25
VOLUME 8391
52-Week high 56.40
52-Week low 20.60
P/E 95.91
Mkt Cap.(Rs cr) 114
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 42.30
CLOSE 41.25
VOLUME 8391
52-Week high 56.40
52-Week low 20.60
P/E 95.91
Mkt Cap.(Rs cr) 114
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CIL Nova Petrochemicals Ltd. (CNOVAPETRO) - Director Report

Company director report

To

The Members

Your Directors take pleasure in presenting the 13TH (Thirteenth) AnnualReport on the business and operations of your Company along with Audited FinancialStatements for the Financial Year ended 31st March 2017.

1. FINANCIAL SUMMARY/HIGHLIGHTS OF PERFORMANCE OF THE COMPANY:

Financial Results

Rs. in Lakhs

Particulars Year ended 31st March 2017 Year ended 31st March 2016
Sales/Income from operations (Net of excise) 22277.90 20182.12
Other Income 61.97 38.06
Total Income 22339.87 20220.18
Total Expense 21105.39 19429.36
Depreciation 538.66 588.76
Profit Before Tax 695.82 790.82
Tax 195.46 243.19
Profit After Tax 500.36 547.62

2. PERFORMANCE HIGHLIGHTS:

The total revenue during the year under review was Rs.22339.87 Lakhs as againstRs.20220.18 Lakhs in the previous year showing a increase of 9.41%. However productivitywas increased in comparison to previous year production but Profit before tax (PBT) wasRs. 695.82 Lakhs as against Rs. 790.82 Lakhs showing a decrease of 13.65% and profitafter tax (PAT) stood at Rs. 500.36 Lakhs as against Rs. 547.62 Lakhs in the previous yearshowing a decrease of 9.45% due to market situation profit margins were reduced.

3. DIVIDEND:

Your directors have not recommend Divided for this Financial Year as Ploughing backof profits will be good strategy for future growth and development of your Company.

4. RESERVES:

Your Company does not propose to transfer any amount from the current year'sprofits to the General Reserve. (Previous year Nil)

5. SHARE CAPITAL:

During the year under review the Company had Authorized Capital of Rs.325000000comprising of 27500000 Equity Shares of Rs.10/- Each and 500000 Preference Shares ofRs.100/- Each. Paid-Up Equity Share Capital of the Company as on date of this reportstands at Rs. 271000000 comprising of 27100000 Equity Shares of Rs. 10/- Each.

Further During the year under review Company had alloted 13550000 Equity Shares offace value of Rs. 10/- each in ratio 1:1 on right basis at Rs. 14.50/- (including premiumof Rs. 4.50/-).

During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.

6. DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

7. FUTURE OUTLOOK:

Polyester filament Yarn (MMF) Market scenario

In India consumption is increasing year on year basis. Consumption ofPolyester fibre is gaining momentum due to factors like fluctuation of Cotton pricesincreased presence & sourcing by global brands where polyester fibre dominates growthof women's wear segment growth of value retail etc.

Outlook for polyester as calculated by experts shows that consumption of polyester yarnwill be double to that of cotton by 2030. The Untapped opportunity remains in MMF basedproduct categories which can give an exponential growth to India's export of textile andapparel. Consumption of MMF based products will increase in domestic Market in following

Segment:

a. Women's western wear &lingerie-Increasing women participation in work force;

b. Active wear-India's large young population base with increasing awareness towardsfitness;

c. Work wear/Uniform-Increasing no. of school going children & consciousness ofcorporate towards their image;

d. Hygiene products-Awareness of Indian women for hygiene will cause increasing uses ofhygiene products

To reap maximum benefits of the future scenario India needs focus on manufacturing ofMMF based products. A drastic change is expected in the consumption of polyester yarnshare of which is projected to grow to 53% by 2030

Future course of action: Looking the scenario of polyester yarn we need to upgradeby innovation increase the volume integration R&D and branding. Future demand isvery promising.

8. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ONRESEARCH AND DEVELOPMENT FOREIGN EXCHANGE INFLOW/OUTFLOW ETC.:

In accordance with the provisions of Section 134 (3) (m) the Companies Act 2013read with Rule 8 (3) Companies (Accounts) Rules 2014 the relevant information pertainingto conservation of energy technology absorption foreign exchange earnings and outgo isgiven in ANNEXURE – I and forms part of this report.

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY:

There were no such material changes occurred subsequent to the close of thefinancial year of the Company to which the balance sheet relates and the date of thereport which can affect the financial position of the Company.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Management Discussion and Analysis Report of the Company for theyear under review is presented in a separate section forming part of the Annual Report.

11. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS:

No such Orders have been passed by the Regulators/Court or Tribunals which canimpact the going concern status and Company's operation in future.

12. DETAILSfiOF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company had no Subsidiary or Joint Ventures or Associate Companies as on 31stMarch 2017.

13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENT BY THE COMPANY:

Details of Loans Guarantees and Investments if any covered under the provisionsof Section 186 of the Act are given in the notes to the Financial Statements.

14. EXTRACTS OF ANNUAL RETURN:

In accordance with Section 134 (3) (a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format is appended to this Report as ANNEXURE-II.

15. RELATED PARTY TRANSACTIONS:

All transactions entered into with the Related Parties in terms of Section 2(76) andSection 188 of the Companies Act 2013 read with Regulation 2(zc) and Regulation 23 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 during thefinancial year were in the ordinary course of business and on arm's length basis and donot attract the provisions of Section 188 of the Companies Act 2013. There were noMaterial Related Party Transactions during the year. Thus disclosure in Form AOC-2 is notrequired.

The Board has formulated Policy on Related Party Transactions detailed policy is alsoavailable at http://cnpcl.com/corporate-policies. 16. KEY MANAGERIAL PERSONNEL:

As required under Section 203 of the Companies Act 2013 the Company has noted thatMr. Pooransingh Mathuria Whole-time Director Mr. Pradip Khandelwal Chief ExecutiveOfficer Mr. Satish Bhatt Chief Financial Officer and Mr. Chintan Amlani CompanySecretary were the Key Managerial Personnel of the Company for the year ended 31stMarch 2017.

17. DIRECTORS:

In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of Association of the Company Mr. Pooransingh Mathuria (DIN: 07430356) retiresby rotation at the ensuing Annual General Meeting and being eligible in terms of Section164 of the Act offers himself for re-appointment.

During the year under the review Mr. Vedprakash Chiripal (DIN: 00290454) had tenderedhis resignation on 17th February 2017.

None of the Directors is disqualified for appointment/reappointment under Section 164of the Companies Act 2013 as required by law this position is also reflected in theAuditors' Report.

All the Independent Directors on the Board have given a declaration of theirindependence to the Company as required under Section 149(6) of the Companies Act 2013and Listing Regulations.

The composition of the Board meetings of the Board held during the year and theattendance of the Directors thereat have been mentioned in the Report on CorporateGovernance in the Annual Report.

18. EVALUATION OF BOARD COMMITTEES AND DIRECTORS:

The evaluation of Chairman all the Directors and the Board and Committees thereof as awhole was conducted based on the criteria and frame work adopted by the Board. Theevaluation process has been explained in the Report on Corporate Governance in this AnnualReport. The Board noted the evaluation results that were collated and presented to theBoard.

19. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:

The Board has on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining Qualifications Positive Attributes and Independenceof a Director and also a Policy for remuneration of Directors Key managerial Personneland senior management. The details of criteria laid down and the Remuneration Policy aregiven in the Corporate Governance Report. Further the said policy is also available at http://cnpcl.com/corporate-policies.

20. PARTICULARS REGARDING EMPLOYEES REMUNERATION:

The statement containing particulars of employees as required under Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report as Annexure- III.

21. COMMITTEES OF THE BOARD:

In accordance with the Companies Act 2013 and Listing Regulations the Company hasfollowing Committees in place:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Other Committee's

Details of the said Committees along with their charters composition and meetings heldduring the financial year are provided in the "Report on Corporate Governance"as a part of this Annual Report. Details of committee is also available at http://cnpcl.com.

22. CORPORATE SOCIAL RESPONSIBILITY POLICY AND INITIATIVES:

The Company has implemented Corporate Social Responsibility Policy and initiatives asthe provisions of Section 135 of the Act and Rules made thereunder governing CorporateSocial Responsibility and the same is available at http://cnpcl.com/ and details are alsoavailable in Corporate Governance Report forming part of the Annual Report.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 are made and the same is enclosed as

Annexure- IV.

23. STATUTORY AUDITORS:

M/s. J. T. Shah & Co. Chartered Accountants (FRN 109616W) were appointed asStatutory Auditors of your Company at the Previous Annual General Meeting held on 26thSeptember 2016 till the Conclusion of 13th Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. The notes to the accounts referred to in the Auditors' Report areself-explanatory and therefore do not call for any further comments.

There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their Report.

As per the Provisions of the Section 139 of the Companies Act 2013 your Board ofDirectors recommend to Appoint M/s. Samir Shah and Co. Chartered Accountants to holdoffice from Conclusion of the Annual General Meeting till Conclusion of 18thAnnual General Meeting of the Company. Further the Company has obtained a writtenconfirmation under section 139 of the Companies Act 2013 from M/s. Samir Shah & Co.Chartered Accountants that their appointment if made would be in conformity with thelimits specified under the Act.

24. SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company had appointed M/s. Jatin Kapadia Practicing Company Secretariesas Secretarial Auditor of the Company to undertake the Secretarial Audit for the financialyear 2016-17.

The Secretarial Audit Report for financial year 2016-17 issued by M/s. Jatin KapadiaPracticing Company Secretaries has been appended as Annexure - V to this Report.There were no qualifications or adverse remarks in their Report.

25. COST AUDITORS:

As per the provisions of Section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014 as amended from time to time the Board of Directorsof the Company on recommendation of Audit Committee has appointed M/s. Kiran J. Mehta& Co. Cost Accountants as Cost Auditor of the Company to conduct audit of CostAccounts of the Company for the Financial Year 2016-17. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report.

26. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM:

Company has implemented an integrated risk management approach through which it reviewsand assesses significant risks on a regular basis to help ensure that there is a robustsystem of risk controls and mitigation in place. Senior management periodically reviewsthis risk management framework to keep updated and address emerging challenges. Majorrisks identified for the Company by the management are Compliances of various applicableLaws Regulatory changes Manufacturing & Supply Litigation Technological Changesand new capital investments return. The management is however of the view that none ofthe above risks may threaten the existence of the Company as robust Risk mitigationmechanism is put in place to ensure that there is nil or minimum impact on the Company incase any of these risks materialize. Further Company had formulated Risk ManagementCommittee also however later on it was dissolved as separate Committee for the same wasnot required considering the size of your Company So Audit Committee looks for the RiskManagement after dissolution of Risk Management Committee.

The Company has an Internal Control System commensurate with size scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and eficient conduct of business operations.The Company has appointed M/s. Jhaveri Shah and Co. Chartered Accountants as an InternalAuditors of the Company. The Audit Committee in consultation with the internal auditorsformulates the scope functioning periodicity and methodology for conducting the internalaudit. The internal auditors carry out audit covering inter alia monitoring andevaluating the eficiency & adequacy of internal control systems in the Company itscompliance with operating systems accounting procedures and policies at all locations andsubmit their periodical internal audit reports to the Audit Committee. Based on theinternal audit report and review by the Audit committee process owners undertakenecessary actions in their respective areas. The internal auditors have expressed that theinternal control system in the Company is robust and effective. The Board has also put inplace requisite legal compliance framework to ensure compliance of all the applicable lawsand that such systems are adequate and operating effectively.

27. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy to report genuine concerns and grievances.Details Whistle Blower Policy has been mentioned in the Report of Corporate Governancethe same is available at http://cnpcl.com/corporate-policies.

28. DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 and to the best of their knowledge and belief andaccording to the information and explanations obtained by them your Directors state that-

i. in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

ii. the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

iii. the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 andRules made thereunder for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;

iv. the directors had prepared the annual accounts on a going concern basis;

v. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and

vi. the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

29. CORPORATE GOVERNANCE:

As required by Schedule V(C) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed report on Corporate Governance is given as apart of the Annual Report. The Company is in full compliance with the requirements anddisclosures that have to be made in this regard. The Secretarial Auditors' Certificate ofthe compliance with Corporate Governance requirements by the Company is attached to theReport on Corporate Governance.

30. GENERAL SHAREHOLDER INFORMATION:

General Shareholder Information is given in Report on Corporate Governance forming partof the Annual Report.

31. ACKNOWLEDGEMENTS:

Your Directors wish to express their grateful appreciation for the co-operation andsupport received from customers shareholders financial institutions banks and thesociety at large. Deep appreciation is also recorded for the dedicated efforts andcontribution of the employees at all levels as without their focus commitment and hardwork the Company's consistent growth would not have been possible despite thechallenging environment.

For and on behalf of the Board
Sd/-
Jyotiprasad Chiripal
Place : Ahmedabad Chairman
Date : 12th August 2017 DIN: 00155695