Cineline India Ltd.
|BSE: 532807||Sector: Media|
|NSE: CINELINE||ISIN Code: INE704H01022|
|BSE 15:40 | 23 Mar||73.45||
|NSE 15:46 | 23 Mar||72.95||
|Mkt Cap.(Rs cr)||206|
|Mkt Cap.(Rs cr)||205.66|
Cineline India Ltd. (CINELINE) - Director Report
Company director report
The Members of Cineline India Limited
Your Directors have pleasure in presenting their Fifteenth Annual Report together withthe Audited Accounts and Auditors Report of the Company for the Year ended March 31 2017.
1. FINANCIAL RESULTS:
Gross revenues increased to Rs. 3310.74 Lacs a growth of around 5.64% against Rs.3134.12 Lacs in the previous year. Profit before interest depreciation and taxation stoodat Rs. 2580.87 Lacs. After providing for depreciation and taxation of Rs. 357.44 Lacs andRs. 375.36 Lacs respectively the net profit of the Company for the year under review wereplaced at Rs. 1056.06 Lacs as against Rs. 576.59 Lacs in the previous year.
The Board has recommended payment of dividend at Rs. 0.50/- (Rupees Fifty Paise Only)per equity share of face value of Rs. 5 each for the financial year 2016-17. The dividendif approved by the members at the Annual General Meeting ("AGM") will result ina cash outflow of Rs. 168.66/- Lacs including dividend distribution tax.
3. TRANSFER TO RESERVES:
During the year under review no amount was transferred to General Reserve.
4. SHARE CAPITAL:
The paid up equity share capital as on March 31 2017 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 2017 were Rs. 123.63 Lacs. 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 312017.
There is no audit qualification in the financial statements by the statutory auditorsfor the year under review.
6. 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 312017 forms part of thisreport as Annexure 1.
7. SUBSIDIARY COMPANIES:
The Company does not have any subsidiary Joint Venture or Associate Companies.
8. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
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.
9. 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.
10. 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.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Company has Six (6) directors consisting of Whole Time Director ManagingDirector Executive Director and Three (3) Independent Directors as on 31.03.2017.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mrs. Hiral Kanakia Wholetime Director retires byrotation at the forthcoming Annual General Meeting and being eligible offers herself forre-appointment. The Board recommends her re-appointment for the consideration of theMembers of the Company at the ensuing Annual General Meeting.
During the year under review there is no change in the Board of Directors of theCompany.
11.2 Key Managerial Personnel:
The following are the Key Managerial Personnel of the Company for the year underreview:
During the year under review there was no appointment or cessation of any KeyManagerial Personnel of the Company.
12. DECLARATION GIVEN BY INDEPENDENT DIRECTOR:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
A calendar of meeting is prepared and circulated in advance to the Directors.
During the year Four (4) Board Meetings and Four (4) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report whichforms part of Annual Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and the SeBi Listing Regulations 2015.
14. DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a. In the preparation of the annual accounts for the year ended 31-03-2017 theapplicable accounting standards have been followed.
b. 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.
c. The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d. The Directors have prepared the annual accounts on a going concern basis.
e. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f. The Directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
15. COMPOSITION OF AUDIT COMMITTEE:
The Board has constituted the Audit Committee which comprises of Mr. Kranti SinhaIndependent Director as Chairman and Mr. Rasesh Kanakia Executive Director Mr. UtpalSheth Independent Director Mr. Anand Bathiya Independent Director as the members. Moredetails on the Committee are given in the Corporate Governance Report which forms part ofthis Annual Report.
16. PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act 2013 and Regulation 4(2)(f) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Appointment & Remuneration Committees. Astructured questionnaire was prepared after taking into consideration inputs received fromthe Directors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture 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 based on the recommendation of the Nomination& Remuneration Committee.
Further The Securities and Exchange Board of India ('SEBI')vide circularno.SEBI/HO/CFD/CMD/CIR/P/2017 /004 dated January 05 2017 had come up with a"Guidance Note on Board Evaluation". The Board Evaluation framework of theCompany is align with this Guidance Note.
17. 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. Further at the time of appointment of an independentdirector the Company issues a formal letter of appointment outlining his/ her rolefunction duties and responsibilities as a director. The details of such familiarizationprogrammes and conditions of their appointment are displayed on the website of the Company(www.cineline.co.in ).
18. 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 Internal controls was reviewed bydesignated firm and based on their evaluation it was concluded that the Company'sinternal controls are adequate and were operating effectively as of March 31 2017. Themain thrust of internal audit is to test and review controls appraisal of risks andbusiness processes besides benchmarking 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 Senior
Management are periodically apprised of the internal audit findings and correctiveactions taken. 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.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans guarantees or provided any security or madeinvestments covered under the provisions of section 186 of the Companies Act 2013 andaccordingly information required to be provided under Section 134 (3) (g) of the CompaniesAct 2013 in relation loans guarantees security or investments covered under theprovisions of section 186 are not applicable to the Company.
20. 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. All such Related PartyTransactions are placed before the Audit Committee and the Board for their priorapprovals. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the company on a materiality of related party transactions.
Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribed form AOC-2 and are appended as Annexure2 to this report.
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 ).
21. 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 3.
22. 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 such mechanismand also provides for direct access to the Chairman of the Audit Committee in exceptionalcases. The functioning of the Vigil mechanism is reviewed by the Audit Committee from timeto time. The Whistle Blower policy has been posted on the Company's website www.cineline.co.in
23. RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act 2013 the company has adequaterisk management mechanism and is periodically reviewed by the Board. At present thecompany has not identified any element of risk which may threaten the existence of thecompany.
24. 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 and link for the same is www.cinelineindia.co.in The Report on informationrequired to be provided under Section 134 (3) (o) of the Companies Act 2013 read with theRule 9 of the Companies (Accounts) Rules 2014 in relation to disclosure about CorporateSocial Responsibility is annexed as Annexure 4 and forms an integral part of thisReport.
25. 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.
26. CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of the Corporate Governance.The detailed report on Corporate Governance as stipulated under Regulation 34 (3) readwith Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms Annexure-B to this report together with a Certificate from the StatutoryAuditors of the Company confirming compliance is annexed as Annexure-C to thisreport.
27. CHIEF FINANCIAL OFFICER CERTIFICATION:
Chief Financial Officer Certification as required under Regulation 17 (8) read withPart B of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 certifying that the financial statements do not contain any untruestatement and these statements represent a true and fair view of the Company's affairs hasbeen obtained.
28.1 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 the Company.Accordingly the Board of Directors has recommended the re-appointment of M/s. WalkerChandiok & Co. LLP Chartered Accountants as the Statutory Auditors of the Company tohold office from the ensuing AGM till the conclusion of the next AGM on remuneration to bedecided by the Board or Committee thereof to the shareholders for approval.
28.2 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 Auditor to conduct the secretarialaudit of the Company for the Financial Year 2016-17. The Company provided all assistanceand facilities to the Secretarial Auditor for conducting their audit. The SecretarialAudit Report is included as Annexure 5 and forms an integral part of this report.The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
29. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION ORADVERSE REMARKS MADE IF ANY:
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors on the Financial Statements of the Company in their report for thefinancial year ended 31st March 2017.
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
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.
31. 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.
32. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:
Your Company had 25 employees as of March 31 2017. 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 ofremuneration 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 Annexure6 and forms part of this Report.
33. 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 website www.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.
34. PREVENTION OF INSIDER TRADING:
The Board of Directors has adopted the Insider Trading Policy in accordance withrequirements of SEBI (Prohibition of Insider Trading) Regulations 2015. The InsiderTrading Policy of the Company lays down guidelines and procedures to be followed and
disclosures to be made while dealing with shares of the Company as well as theconsequences of violation. The Policy has been formulated to regulate monitor and ensurereporting of deals by employees and to maintain the highest ethical standards of dealingin Company Securities.
The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on the Company's website www.cineline.co.in.
Your Board takes this opportunity to thank our clients 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
Rasesh Kanakia Chairman (DIN: 00015857)
Date : May 23 2017
Place : Mumbai