The Members of Cineline India Limited
Your Directors have pleasure in presenting their Thirteenth Annual Report together withthe Audited Accounts and Auditors Report of the Company for the Year ended March 312015.
1. FINANCIAL OVERVIEW:
|Particulars ||March 31 2015 ||March 31 2014 |
| || |
(Rs. in Lacs) (Rs. in Lacs)
|Gross Income ||2659.74 ||2270.98 |
|Profit before Interest Depreciation and tax ||1965.16 ||1604.26 |
|Interest & Financial Charges ||777.90 ||661.09 |
|Depreciation/ Amortisation ||611.27 ||481.14 |
|Profit/(loss) before exceptional items and taxes ||575.99 ||462.03 |
|Exceptional Items ||214.99 ||0.00 |
|Profit/(loss) before tax ||790.98 ||462.03 |
|Provision for Tax (including Deferred) ||396.04 ||151.45 |
|Profit/(loss) after Tax ||394.94 ||310.58 |
|Profit brought forward from previous year ||2342.74 ||2032.16 |
|Amount available for Appropriation ||2737.68 ||2342.74 |
Gross revenues increased to Rs. 2659.75 Lacs a growth of around 17.12% against Rs.2270.98 Lacs in the previous year. Profit before depreciation and taxation was Rs. 1965.16Lacs against Rs. 1604.26 Lacs in the previous year. After providing for depreciation andtaxation of Rs. 611.27 Lacs & Rs. 396.04 Lacs respectively the net profit of theCompany for the year under review was placed at Rs. 394.94 Lacs as against Rs. 310.58 Lacsin the previous year.
2. DIVIDEND AND RESERVES:
With a view to conserve the resources for future operations your Directors havethought it prudent not to recommend dividend on equity shares for the financial year2014-15.
During the year under review no amount was transferred to General Reserve.
3. SHARE CAPITAL:
The paid up equity share capital as on March 31 2015 was Rs. 14.00 Crores. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options nor sweat equity.
Cash and cash equivalents as at March 31 2015 were Rs. 131.81Lacs. The companycontinues to focus on judicious management of its working capital Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
Your Company prepares its financial statements in compliance with the requirements ofthe Companies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India.The estimates and judgments relating to the financial statements are made on a prudentbasis so as to reflect in a true and fair manner the form and substance of transactionsand reasonably present the Company's state of affairs profits and cash flows for the yearended March 31 2015.
There is no audit qualification in the financial statements by the statutory auditorsfor the year under review.
5. SUBSIDIARY COMPANIES:
The Company does not have any subsidiary.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY:
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Directors' Report.
7. PUBLIC DEPOSIT:
Your Company has not accepted any public deposits within the meaning of Section 73 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Company has Six (6) directors consisting of Whole Time Director ManagingDirector Non-executive Director and Three (3) Independent Directors as on 31.03.2015.
9.1 Independent Directors:
In terms of the definition of "Independence" of Directors as prescribed underClause 49 of the Listing Agreement entered with the Stock Exchanges and section 149(6) ofthe Companies Act 2013 and based on the confirmation / disclosure received from theDirectors the following Non-Executive Directors are Independent
1. Mr. Kranti Sinha
2. Mr. Utpal Sheth
3. Mr. Anand Bathiya
9.2 Woman Director:
In terms of the provision of Section 149 of the Companies Act 2013 and Clause 49 ofthe Listing Agreement the Company has appointed Mrs. Hiral Kanakia as Additional WomanDirector on the Board of the Company.
9.3 Directors retiring by rotation:
During the year under review Mr. Himanshu Kanakia Managing Director of the Companyretires by rotation and being eligible offers himself for re appointment. The Board ofDirectors recommends Mr. Himanshu Kanakia for re-appointment.
9.4 Appointment / Resignation from the Board of Directors:
D u r i n g t h e y e a r u n d e r r e v i e w M r . Shivaramakrishnan Iyer anIndependent director and Mr. Sanjay Sanghavi a Non-Executive Director have submittedtheir resignations to the Board on February 5 2015 due to their other pre-occupations.The same was accepted by the Board in its meeting held on February 5 2015. The Boardhereby places on record their sincerest thanks and gratitude for the i n v a l u a b l e co n t r i b u t i o n m a d e b y M r. Shivaramakrishnan Iyer and Mr. Sanjay Sanghavitowards the growth and development of the company during their tenure as a directors.
During the Year under review Mr. Anand Bathiya and Mrs. Hiral Kanakia joined the Boardof the Company as Additional Independent Director and Non-Executive Additional Directorrespectively with effect from February 05 2015.
Further the proposal for appointment of Mr. Anand Bathiya and Mrs. Hiral Kanakia asIndependent Director and Executive Director respectively is being placed before theshareholders for approval in the ensuing AGM; the relevant details are forming part of theAGM Notice.
9.5 Key Managerial Personnel:
During the year under review the Company has appointed the following persons as KeyManagerial Personnel:
|Sr. No. Name of the Person ||Designation |
| || |
|1 Mr. Himanshu Kanakia ||Managing Director |
|2 Mr. Jitendra Mehta ||Chief Financial Officer |
|3 Mr. Jatin Shah ||Company Secretary |
A calendar of meeting is prepared and circulated in advance to the Directors.
During the year four Board Meetings and four Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report which forms partof Annual Report. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013.
11. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i. In the preparation of the annual accounts for the year ended 31-03-2015 theapplicable accounting standards have been followed.
ii. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii. The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv. The Directors have 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.
vi. The Directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
12. COMPOSITION OF AUDIT COMMITTEE:
The Board has constituted the Audit Committee which comprises of Mr Kranti SinhaIndependent Director as Chairman and Utpal Sheth Independent Director Mr. Anand BathiyaIndependent Director as the members. More details on the Committee are given in theCorporate Governance Report which forms part of this Annual Report.
13. PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Appointment &Remuneration Committees. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors. The Board of Directors expressed theirsatisfaction with the evaluation process.
14. FAMILIARIZATION PROGRAMME:
The Company had conducted various sessions during the financial year to familiarizeIndependent Directors with the Company their roles responsibilities in the Company andthe technology and the risk management systems of the Company. Further the Directors areencouraged to attend the training programmes being organized by various regulators/bodies/institutions on above matters. The details of such familiarization programmes aredisplayed on the website of the Company (www.cineline.co.in).
15. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany has an Internal Control System commensurate with the size scale and complexityof its operations. The Internal and operational audit is entrusted to M/s Delloite Haskins& Sells a reputed firm of Chartered Accountants. The main thrust of internal audit isto test and review controls appraisal of risks and business processes besidesbenchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Audit Committee of the Board of Directors Statutory Auditors and the SeniorManagement are periodically apprised of the internal audit findings and corrective actionstaken. Audit provides a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans guarantees or investments covered under theprovisions of section 186 of the Companies Act 2013 and accordingly information requiredto be provided under Section 134 (3) (g) of the Companies Act 2013 in relation loansguarantees or investments covered under the provisions of section 186 are not applicableto the Company.
17. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business and that the provisionsof Section 188 of the Companies Act 2013 are not attracted. Thus disclosure in form AOC-2is not required. Further there are no materially significant related party transactionsmade by the company with Promoters Key Managerial Personnel or other persons which mayhave a potential conflict with the interest of the Company.
All such Related Party Transactions are placed before the Audit Committee for approvalwherever applicable. Prior omnibus approval was obtained from the Audit Committee for therelated party transactions which are of repetitive nature and for normal arm's lengthtransactions which cannot be foreseen. A statement of related party transaction givingdetails of all related party transactions entered into by the Company are placed beforethe Audit Committee and Board for review and approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company and the link for the same is(http://www.cineline.co.in/investor/corporate-governance.html).
18. EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2015 forms part of thisreport as Annexure 1.
19. POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down the criteria for selection and appointment of Board members.The Remuneration Policy forms part of this report as Annexure 2.
20. WHISTLE BLOWER POLICY:
The Company has a whistle blower policy to report genuine concerns or grievances andprovides for adequate safeguards against victimization of Whistle Blower who avail of suchmechanism and also provides for direct access to the Chairman of the Audit Committee inexceptional cases. The functioning of the Vigil mechanism is reviewed by the AuditCommittee from time to time. The Whistle Blower policy has been posted on the Company'swebsite www.cineline.co.in
21. RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act 2013 & Clause 49 of thelisting agreement the company has constituted a risk management committee. At present thecompany has not identified any element of risk which may threaten the existence of thecompany.
22. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to section 135 of the Companies Act 2013 the company has constituted aCorporate Social Responsibility Committee and has adopted Corporate Social ResponsibilityPolicy. As per the provisions of the Act Company is not required to undertake any CSRactivities for the financial year 2014-15 and accordingly information required to beprovided under Section 134 (3) (o) of the Companies Act 2013 read with the Rule 9 of theCompanies (Accounts) Rules 2014 in relation to disclosure about Corporate SocialResponsibility are currently not applicable to the Company.
23. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report covering a wide range of issues relatingto Performance outlook etc. is annexed as Annexure-A to this report.
24. CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of the Corporate Governance.The detailed report on Corporate Governance as stipulated under Clause 49 of the ListingAgreement forms Annexure-B to this report.
The Statutory Auditors of your Company have examined the Company's compliance and havecertified the same as required under the listing agreement. The certificate is reproducedas Annexure-C to this report.
25. MANAGING DIRECTOR AND CHIEF FINANCIAL OFFICER CERTIFICATION:
The Managing Director and Chief Financial Officer Certification as required underclause 49 of the Listing Agreement certifying that the financial statements do notcontain any untrue statement and these statements represent a true and fair view of theCompany's affairs. The said certificate is annexed is furnished in Annexure-D tothis report.
26.1 Statutory Auditors
M/s. Walker Chandiok & Co. LLP Chartered Accountants Mumbai will retire at theconclusion of the ensuing Annual General Meeting and being eligible offer themselves forre-appointment.They have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules framed there under for reappointment as Auditors of theCompany.Accordingly the Board of Directors has recommended the re-appointment of M/s.Walker Chandiok & Co. LLP Chartered Accountants as the Statutory Auditors of theCompany to hold office from the ensuing AGM till the conclusion of the next AGM onremuneration to be decided by the Board or Committee thereof to the shareholders forapproval.
26.2 Secretarial Audit
Pursuant to Section 204 of the Companies Act 2013 your Company had appointed Mr.Dharmesh Zaveri a Company Secretary in Whole-time Practice having Certificate of PracticeNo. 4363 and Membership No. 5418 as its Secretarial Auditors to conduct the secretarialaudit of the Company for the FY 2014-15. The Company provided all assistance andfacilities to the Secretarial Auditor for conducting their audit. The Secretarial AuditReport is included as Annexure-3 and forms an integral part of this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
27. CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Since the Company does not own any manufacturing facility the other particularsrelating to conservation of energy and technology absorption stipulated in the with rule(8)(3) of the Companies (Accounts) Rules 2014 are not applicable to the Company.
The Company has not made any foreign exchange outgo towards traveling marketing andimport of Capital Goods.
28. SEXUAL HARASSMENT DISCLOSURE:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment. During the year no complaints of sexualharassment were received.
29. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:
Your Company had 25 employees as of March 31 2015. The statement containingparticulars of employees as required under Section 197(12) of the Companies Act 2013 readalong with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is not applicable to the Company as no employees were in receipt inremuneration above the limits specified in Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The ratio of the remuneration of eachDirector to the median employee's remuneration and other details in terms of Section197(12) of the Companies Act 2013 read along with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure4 and forms part of this Report.
30. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts.The Code has been posted on the Company's websitewww.cineline.co.in.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
31. PREVENTION OF INSIDER TRADING:
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.
All Board Directors and the designated employees have confirmed compliance with theCode.
Your Board takes this opportunity to thank the Licensee vendors business partnersshareholders and bankers for the faith reposed in the Company and also thank theGovernment of India various regulatory authorities and agencies for their support andlooks forward to their continued encouragement. Your Directors are deeply touched by theefforts sincerity and loyalty displayed by the employees without whom the growth wasunattainable. Your Directors wish to thank the investors and shareholders for placingimmense faith in them and the plans designed for growth of your Company. Your Directorsseek and look forward to the same support in future and hope that they can continue tosatisfy you in the years to come.
| ||For and on behalf |
| ||of the Board of Directors |
|Date : May 27 2015 ||Rasesh B. Kanakia |
|Place: Mumbai ||Chairman |