CMI FPE Ltd.
|BSE: 500147||Sector: Engineering|
|NSE: FLATPROD||ISIN Code: INE515A01019|
|BSE LIVE 14:10 | 19 Jan||430.00||
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
CMI FPE Ltd. (FLATPROD) - Director Report
Company director report
Your Directors have pleasure in presenting the Thirtieth Annual Report of the Companyon the business and operations of the Company together with the audited financialstatements for the financial year ended March 312016.
(Rs. in lacs)
In order to conserve resources for the operating business your Directors do notrecommend any dividend for the financial year 2015-16.
During the year the unclaimed dividend pertaining to the final dividend for the yearended March 31 2008 was transferred to the Investor Education and Protection Fund.
The year under review marked the deflation of commodity prices globally reducing thesteel prices. The growth in the demand for Indian steel lagged much behind theexpectations. The net revenue from operations of the Company dropped by almost 6.4%because of the uncertain business environment. However the profitability of the Companyincreased because of other income and measures taken by the Company to increase theefficiency. The combination of predatory prices and import has jeopardized the loansraised by the domestic steel industry for capacity expansion.
INDUSTRIAL INFRASTRUCTURE DEVELOPMENT
The government's focus on Make in India' and infrastructure looks to take off andtranslate into sustained demand for steel in the next couple of years. India is likely tobe among the few countries worldwide where steel demand will see an upswing. The Companythrough its experience and proven process in cold rolling and metal processing industrycontinuous innovation value engineering and cost effective solution will stand above itscompetitors.
As informed earlier the operations of the Company at Silvassa plant was discontinuedand the plant at Taloja was realigned with new infrastructure and machines.
During the year under review the Company had disposed off the related assets atSilvassa including the land and buildings on January 19 2016.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.
The paid up equity share capital of the Company as on March 312016 was ' 493.78 lacs.During the year under review the Company has not issued any shares. The Company has notissued shares with differential voting rights. It has neither issued employee stockoptions nor sweat equity shares. As on March 31 2016 none of the Directors of theCompany holds shares of the Company.
NEW LISTING AGREEMENT
The Company has entered into new Listing Agreement with BSE Limited in compliance withRegulation 109 of the Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009.
CHANGE OF REGISTRAR AND SHARE TRANSFER AGENT
Securities and Exchange Board of India ("SEBI") vide its order No.WTM/RKA/MIRSD2/41/2016 dated March 22 2016 had inter alia advised the Companieswho were clients of Sharepro Services (India) Private Limited ("Sharepro") toconduct an audit of the records and systems of Sharepro with respect to dividends paid andtransfer of securities to determine whether the dividends have been paid to actual /beneficiary holders and whether securities have been transferred as per the provisions ofthe law. The order also advised the Companies to switch over the activities of Registrarand Share Transfer Agent from Sharepro to another Registrar and Transfer Agent registeredwith SEBI.
In view of the above the Company had assigned the task of audit to M/s. VKM &Associates Practising Company Secretary and they have issued a report mentioning thatthere are no areas of default or concern relating to your Company.
The Board through a circular resolution dated April 15 2016 had approved theappointment of M/s. Bigshare Services Private Limited ("Bigshare") as theRegistrar and Share Transfer Agent of the Company in place of Sharepro with effect fromMay 1 2016. The Company has made necessary disclosures and communication to BSE Limitedas per the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
Your Company has not accepted any deposits from the public falling within the ambit ofSections 73 and 74 of the Companies Act 2013 read together with the Companies (Acceptanceof Deposits) Rules 2014.
Retire by rotation
In accordance with the provisions of Section 152 of the Companies Act 201 3 Mr.Fabrice Orban retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends his re-appointment forthe consideration of the members of the Company at the ensuing Annual General Meeting.
Re-appointment of Managing Director
The current term of Mr. Raman Madhok as the Managing Director of the Company expires onOctober 8 2016. At the meeting held on May 19 2016 the Board of Directors acting onthe recommendation of the
Nomination and Remuneration Committee have approved his re-appointment for a furtherperiod of 3 (three) years terms of remuneration etc. subject to the approval of themembers of the Company and Central Government if required. The necessary resolution forhis re-appointment is being placed before the members for approval.
Independent Directors Declaration
All Independent Directors have submitted the declaration of Independence as requiredunder Section 149(7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").
During the year under review there is no change in the Board of Directors of theCompany.
Brief profile of the Directors proposed to be appointed / re-appointed and otherinformation as stipulated under Listing Regulations and Secretarial Standard 2 are part ofthe Notice attached to this Report.
KEY MANAGERIAL PERSONNEL
During the year under review the Board had appointed Mr. Haresh Vala as the CompanySecretary of the Company being Key Managerial Personnel of the Company. As on date Mr.Raman Madhok Managing Director Mr. Akash Ohri Chief Financial Officer and Mr. HareshVala Company Secretary are the Key Managerial Personnel of the Company.
In compliance with the provisions of the Companies Act 2013 read with the Rules issuedthereunder and Regulation 17 of the Listing Regulations the Board with the assistance ofthe reputed consulting firm Aon Services India Private Limited (erstwhile HewittAssociates (India) Private Limited) had carried out an annual performance evaluationof its own performance of the directors individually as well as an evaluation of theworking of the Committees. Significant highlights learning and action points with respectto the evaluation were presented to the Board. The Board of Directors expressed theirsatisfaction with the evaluation process and with the findings. The Chairman discussedwith each Director individually regarding the findings of the evaluation.
The Company has adopted a Remuneration Policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of Companies Act 2013 and theListing Regulations. The policy lays down criteria for selection and appointment of BoardMembers. The details of this policy are explained in the Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 and Schedule V of the Listing Regulations are given in thenotes to the Financial Statements.
During the year under review 4 (four) Board Meetings and 4 (four) Audit CommitteeMeetings were convened and held the details of the meetings held and attendance ofDirectors at such meetings are provided in the Corporate Governance Report. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 201 3 and the Listing Regulations.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofthe provisions of Section 134(3)(c) of the Companies Act 2013 that :
a. in the preparation of the annual financial statements for the year ended March 312016 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b. such accounting policies as mentioned in the Notes to the financial statements havebeen selected and applied them consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2016 and of the profit of the Company for the year ended onthat date;
c. proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 201 3 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual financial statements have been prepared on a going concern' basis;
e. proper internal financial controls have been laid down and are being followed andthat such internal financial controls are adequate and are operating effectively; and
f. proper systems were in place to ensure compliance with the provisions of allapplicable laws and these were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Companies Act 2013 and the Rules made thereunder and theListing Regulations (erstwhile Listing Agreement entered into with the Stock Exchange).There were no materially significant Related Party Transactions made by the Company duringthe year that would have required members approval under the Listing Regulations.
All Related Party Transactions are placed before the Audit Committee and also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for transactionswhich are foreseen and are repetitive in nature. A statement of all related partytransactions is placed before the Audit Committee for its review on quarterly basisspecifying the nature value and terms and conditions of the transactions.
The Company has adopted a Related Party Transactions Policy. The Policy as approved bythe Board is uploaded on the Company's website at http://cmifpe.com/financialreport.aspx?Subcat=RPT Policy as per LODR&InvestorType=Policies.
Details of transactions with Related Parties are given in the Notes to the FinancialStatements in accordance with the Accounting Standards. There were no transactions duringthe year which would require to be reported in Form AOC 2.
None of the Directors has any pecuniary relationships or transactions vis-a-visthe Company.
a. Statutory Auditors
The Company's Auditors M/s. Deloitte Haskins & Sells Chartered Accountants holdoffice until the conclusion of the ensuing Annual General Meeting and are eligible forre-appointment as per Section 139 of the Companies Act 2013.
M/s. Deloitte Haskins & Sells have expressed their willingness to get appointed asthe Statutory Auditors of the Company and have furnished a certificate of theireligibility and consent under Section 141 of the Companies Act 2013. In terms of theListing Regulations the Auditors have confirmed that they hold a valid certificate issuedby the Peer Review Board of the Institute of Chartered Accountants of India. The Boardbased on the recommendation of the Audit Committee has recommended their appointment asAuditors of the Company till the conclusion of the 32nd Annual General Meetingof the Company to be held in the year 201 8 subject to ratification at every AnnualGeneral Meeting.
The members are requested to consider the reappointment of M/s. Deloitte Haskins &Sells Chartered Accountants as Auditors from the conclusion of this Annual GeneralMeeting till the conclusion of the 32nd Annual General Meeting in the year 2018subject to ratification at every Annual General Meeting.
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors in their report.
b. Cost Auditor
In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 the Company is required to audit its CostAccounting records for the financial year 2016-17. The Board of Directors on therecommendation of the Audit Committee has appointed M/s. Kishore Bhatia & AssociatesCost Accountants to audit the cost accounts of the Company for the financial year 2016-17on a remuneration of ' 2 lacs. As required under the Companies Act 2013 a resolutionseeking member's approval for the remuneration payable to the Cost Auditor forms part ofthe Notice convening the Annual General Meeting for their ratification.
c. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s. VKM & Associates Company Secretaries in Practice to undertake theSecretarial Audit of the Company for the financial year 2015-16. The Secretarial AuditorReport is annexed as Annexure A and forms an integral part of this Report.
There is no secretarial audit qualification for the year under review.
As required under Regulation 34(3) read with Schedule V(C) of the Listing Regulationsa separate section on Corporate Governance practices followed by the Company togetherwith a certificate from the Statutory Auditors of the Company confirming the complianceforms an integral part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as stipulated under the ListingRegulations forms part of the Annual Report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual
harassment at workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and Rules thereunder. AnInternal Complaints Committee has been constituted to inquire into complaints of sexualharassment and recommend appropriate action.
During the year under review the Internal Complaints Committee has not received anycomplaint of sexual harassment.
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 1 34(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed as Annexure B and forms anintegral part of this Report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 201 4 the extract of the Annual Returnis annexed as Annexure C and forms an integral part of this Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an adequate system of internal controls and risk-mitigationsystem which are constantly assessed and strengthened with the new / revised standardoperating procedures. These are commensurate with the size scale and complexities of itsoperations. The Internal Audit (IA) function is entrusted to KPMG. To maintain objectivityand independence the Internal Auditor reports to the Audit Committee.
During the year under review the Risk Management Committee of the Company had reviewedthe new requirement of Internal Control over Financial Reporting ("ICOFR")and finalized the detailed analysis of 10 key processes and these were presented forreview by the Statutory Auditors. The control mechanism and the process of testing ofcontrols were discussed with the Statutory Auditors. The Statutory Auditors have submittedtheir report on the Internal Financial Controls which forms an integral part of thisReport.
The Internal Auditor evaluates the adequacy of the internal control system in theCompany on the basis of Standard Operating Procedures instruction manuals accountingpolicy and procedures.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to deal with any instances of fraud andmismanagement in the Company. The mechanism provides for adequate
safeguards against victimization of Director(s) and Employee(s) who avail themselves ofthe mechanism. The Whistle Blower Policy is available on the website of the Company -
The Audit Committee is constituted in line with the regulatory requirements mandated bythe Companies Act 2013 and the Listing Regulations. The details of the Committee and itsterms of reference are set out in the Corporate Governance Report forming part of theBoard's Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee is constituted in line with the regulatoryrequirements mandated by the Companies Act 2013 and the Listing Regulations. The detailsof the Committee and its terms of reference are set out in the Corporate Governance Reportforming part of the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of the Companies Act 2013 and theRules framed thereunder the Board has constituted a Corporate Social Responsibility("CSR") Committee and the Company has adopted a policy for CSR. The textof this Policy is available on the Company's website - www.cmifpe.com.For the year under review the provisions of Section 135 of the Companies Act 2013 readwith the Companies (Corporate Social Responsibility) Rules 2014 are not applicable to theCompany. However the Company had spent an amount of ' 1.10 lac on CSR activities bydonating computer to the Raigad Zilla Parishad Prathamik School and internal repairsconducted at Anandham Ashram an old age home.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts ortribunals that would impact the going concern status of the Company and its futureoperations.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197(12) of the Companies Act 201 3 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed as Annexure D and forms an integral part of this Report.
The information required under Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 201 4 a statement showing the names andother particulars of the
employees drawing remuneration in excess of the limits set out in the said Rules willbe provided upon request. In terms of first proviso to Section 136 of the Companies Act201 3 the Report and Accounts are being sent to the members and other entitled theretoexcluding the information on employees' particulars which is available for inspection bythe members at the Registered Office of the Company during the business hours on workingdays of the Company upto the date of the ensuing Annual General Meeting. If any member isinterested in obtaining a copy thereof such member may write to the Company Secretary.
None of the employees listed in the said Annexure is related to any Director of theCompany. None of the employees hold (by himself or along with his / her spouse anddependent children) more than 2% of the equity shares of the Company.
BUSINESS RISK MANAGEMENT
The Board of Directors has constituted a Risk Management Committee. The Committeeoversees the risk management process including risk
identification impact and control assessment effective implementation of themitigation plans and risk reporting. The purpose of the Committee is to assist the Boardin fulfilling its oversight responsibilities with regard to business risk management.
The details and the process of Risk Management as implemented by the Company areprovided as part of the Management Discussion and Analysis which forms part of thisReport.
HEALTH AND SAFETY
The details on Health and Safety are provided in the Management Discussion and Analysiswhich forms part of this Report.
The industrial relations continued to be cordial at all levels throughout the year.Your Directors wish to thank all the Employees and Workmen of the Company for theircontribution support and continued co-operation throughout the year.
Your Directors would like to express their appreciation for the co-operation andassistance received from the Government authorities bankers financial institutionsvendors customers and shareholders during the year under review.
For and on behalf of the Board
Mumbai May 19 2016