CONTINENTAL PETROLEUMS LIMITED
Your Directors have pleasure in presenting the 31st Annual Report of your Company alongwith the Audited Statements of Accounts for the year ended 31st March 2017.
|Financial Results || ||in Rupees |
|PARTICULARS || || |
| ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 |
| || || |
|Business Income ||200351702.00 ||205587973.00 |
|Other Income ||28897477.00 ||34158677.00 |
|Total Income ||229249179.00 ||239746650.00 |
|Profit/(Loss) before Interest Depreciation and Tax ||13690104.00 ||10323226.00 |
|Less: || || |
|Interest (finance cost) ||4916092.00 ||1315337.00 |
|Depreciation ||2320979.00 ||1779782.00 |
|Profit/(Loss) before tax ||6453033.00 ||7228107.00 |
|Exceptional Item ||-- ||-- |
|Less: || || |
|Current Tax ||1803213.00 ||1892074.00 |
|Deferred Tax ||(70781.00) ||282870.00 |
|Profit/(Loss) for the period ||4720601.00 ||5053163.00 |
|Balance brought forward from the previous year ||36861674.00 ||31808511.00 |
|Amount available for Appropriation ||41582275.00 ||36861674.00 |
|Capital Reserve ||-- ||-- |
|Total balance carried to Balance Sheet ||41582275.00 ||36861674.00 |
With the view to conserve the resources of company the directors are not recommendingany dividend for the financial year 2016-17.
No amount is carried to any reserves during the period under review.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFRENCE TO THEFINANCIAL STATEMENTS
The company has proper place and adequate internal control system commensurate with thenature of its business and size and complexity of its operations. internal control systemcomprising of policies and procedures and designed to ensure reliability of financialreporting timely feedback on achievements of operational and strategic goals compliancewith policies procedures applicable laws and regulations and all assets and resourcesare acquired economically used efficiently and adequately protected
During the year under review the Company has achieved a turnover of Rs.200351702/-as against Rs. 205587973/- in the previous year. The net profit of the company is Rs.4720601/-as against net profit of Rs. 5053163/- in the previous year. There was adecrease in net profit by 7.04% which was mainly due to fluctuations in price of crudeoil.
The year 2016-17 has seen downfall in some of the areas of the Indian economy. One ofthe major features of the fiscal year was the unfavorable market condition. However thecompany expects good performance even after stiff competition with big players. TheCompany is still in process of consolidation and efforts are being made to enhance the networth of the Company through renewed focus on core competence on Leasing and Investment.
The Company has not accepted any deposits during the year under review or in earlierYears.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
The observations made by the Auditors in their report read with relevant notes as givenin the Notes on Accounts annexed to the Accounts are self-explanatory and thereof do notcall for any further comments under Section 134 (3) (f) of the Companies Act 2013.
The Auditors of the Company have not raised any queries or made any Qualification onthe Accounts adopted by the Board which were then audited by them.
The Company has 2780312 Equity Shares of Rs. 10 each amounting to Rs. 27803120during the year under review; the Company has not issued any shares or any convertibleinstruments.
The Company has only one class of Equity Share having a par value of Rs. 10/-eachholder of share is entitled to one vote per share with same rights.
During the Year 2016-17 the company has not made any issue of equity shares withdifferential voting rights Sweat Equity Shares and Employee Stock Option.
EXTRACT OF ANNUAL RETURN
The Extract of the Annual Return in Form No. MGT- 9 has been included.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Corporate Governance Framework Adopted by the Company already encompassessignificant portion of the recommendations contained in the "Corporate GovernanceVoluntary Guidelines 2009" issued by the Ministry of Corporate AffairsGovernment of India.
SIGNIFICANT AND MATERIAL ORDERS
No significant or material order has been passed by the Regulators/Courts or Tribunalswhich can impact the going concern status and Companys operation in future.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS
The Corporate Governance and Management Discussion & Analysis Report which forms apart of this Report are set out separately together with the Certificate from theAuditors of the Company regarding compliance with the requirements of Corporate Governanceas stipulated in SEBI (LODR) Regulations 2015.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes occurred subsequent to the close of financial year ofthe company to which the balance sheet relates and the date of the report which can affectthe financial position of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3) (c) of the Companies Act 2013 yourDirectors state that:
That in preparation of the Annual Accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;
That they have selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 31stMarch 2017 and of the profit or loss of the Company for that period ;
That they have taken proper and sufficient care for the maintenance of properaccounting records in accordance with the provisions of the Companies Act 2013 and rulesmade there under for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
That they have prepared the annual accounts for the financial year ended 31stMarch 2017 on a going concern basis.
That they have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
The directors had devised proper and systems to ensure compliance with theprovisions of all applicable laws and those systems were adequate and operatingeffectively.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Board has appointed M/s MKGP & Associates Company Secretaries inWhole-time Practice to carry out Secretarial Audit of the Company under the provisions ofSection 204 of the Companies Act 2013. The Report of Secretarial Auditor is annexed withthis report as Annexure-4. The Report of Secretarial Auditor is annexed with thisreport as
RELATED PARTY TRANSACTIONS
All the related party transactions that were recorded during the financial year were onan arms length basis and were in the ordinary course of business. There are nomaterial/ significant related party transaction made by the Company which has a potentialconflict with the interest of the Company. Board has framed a policy on related partytransaction. Further as per Section 188 of the Companies Act 2013 Company does not haveany Contract or Arrangement during the financial year. Hence AOC-2 is not attached as itis not required.
Company values its Human Resources the most. To keep their morale high company extendsseveral welfare benefits to the employees and their families by way of comprehensivemedical care education housing and social security.
Our Companys Grievance Redressal Mechanisms ensure that all employees can raiseissues and concerns as simply as possible. The Whistle Blower Policy provide for reportingin confidence of issues like child labour etc. The Company has provide the opportunitiesto all its employeess to communicate to the respective authority or to report theirgenuine concerns details of which have been given in the Corporate Governance Report.During the year there have been no complaints alleging child labour forced labourinvoluntary labour and discriminatory employment.
Further as per the Child Labour (Prohibition & Regulation) Act 1986 company takesdue care about child labour and in the management of the company no employee is therewhose age is below 18 years of age
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The company has zero tolerance for sexual harassment at work places and has in place apolicy on prevention prohibition and redressal of sexual harassment at work place in theline of provisions of Sexual Harassment of women at work place (Prevention prohibitionand redressal) Act 2013 and the rules framed there under . At present company has nowomen worker in service.
DOCUMENTS PLACED ON THE WEBSITE (www.conpetco.com)
The following documents have been placed on the website in compliance with the Act:
Financial Statements of the Company.
Code of conduct for Insider Trading and Corporate Disclosure Practices.
RADHIKA KHANDELWAL Director of the Company is retiring by rotation at ensuingAnnual General meeting and being eligible offers himself for reappointment. The companyhas independent Directors on the Board and also one women Director as per requirement ofCompanies Act 2013.
APPOINTMENT REMUNERATION AND EVALUATION OF DIRECTORS
The Board has based on recommendations of the Nomination and Remuneration committeelaid down following policies: ? Appointment and removal of Directors KMP andSenior Management
The NRC will have the responsibility and authority to decide the essential anddesirable skills/competencies/Experience/criteria of independence required from theindividuals for the office of director KMP and senior management Personnel.
The experience required from Directors KMP and Senior Management personnel.
The NRC will review the criteria for the role and define the role specificationsfor the appointment.
The NRC shall review the criteria for the role and define the rolespecifications for appointment.
In case of directors and KMP in addition to above specifications the NRC shallensure that the candidate possesses the requisite qualifications and attributes as perApplicable laws.
? Identifying candidates who are qualified to become Directors KMP and seniorManagement personnel The NRC may assign the responsibility of identifying the candidatesfor the final interview by the NRC to the following
To the Managing Director / whole time Director and Chairman of NRC in case ofselection of directors and
To the Managing Director/ whole time Director in case of selection of KMP andSenior Managerial Personnel.
The NRC shall identify members of the Board who will interview the candidaterecommended to the NRC as above.
Upon selection of the candidate the NRC shall make a recommendation to theBoard for appointment of Director /KMP/Senior Management Personnel.
The appointment of directors and KMP shall be subject to the compliance of theAct Clause 49 of listing agreement and Articles of Association.
? Selection of Independent Directors
Considering the requirement of skill sets on the Board eminent people having anindependent standing in their respective field and who can effectively contribute to theCompanys business and policy decisions are considered by NRC for appointment as anindependent Directors on the Board. The committee inter alia considers qualification positive attributes area of experience and number of directorship held in otherCompanies by such person in accordance with the Companys policy for selection ofDirectors and determining Director independence . The Board considers thecommittees recommendation and take appropriate decision. Every Independent
Director at the first meeting of the Board in which he participates as Director andthereafter at the first meeting Board in every financial year gives a declaration that hemeets the criteria of independence as provided in the law.
? Term of appointment
The term of appointment of Directors shall be governed by provisions of the Actand clause 49 of listing agreement.
The term of KMP (other than the MD) and Senior Management Personnel shall begoverned by the prevailing policy of the company.
? Removal of Director KMP and Senior Management Personnel
Removal of Director KMP and Senior Management personnel may be warranted due toreasons such as disqualification prescribed under applicable laws and /or disciplinaryreasons.
? Remuneration of Director KMP and Senior Managerial Personnel
The remuneration payable to managing Director shall be determined by the NRC andrecommended to the Board for approval. Such remuneration is further subject to approval ofshareholders as per applicable provisions of the Act.
Remuneration payable to Non-Executive Directors: Only the sitting fee will bepaid to Non-Executive Directors which shall be determined by NRC.
Remuneration to KMP and Senior Managerial personnel: The NRC will approve policyfor remuneration payable to KMP and senior Managerial personnel. The NRC will approveremuneration payable to KMP and Senior Managerial Personnel Which will finally be approvedby Board.
? PERFORMANCE EVALUATION OF BOARD COMMITTEES AND DIRECTORS
Board is committed to assessing its own performance as Board is to identify itsstrength and areas in which it may improve its functioning.
NRC is responsible for carrying out evaluation of every Directorsperformance and the NRC will frame criteria for the same.
The evaluation of Board and Chairman will be reviewed by Independent Directorsat their meeting.
The directors individually as well as the evaluation of the working of itsAudit Nomination & Remuneration and Stakeholders Grievance Committee.
The Performance of the Board is evaluated by each individual Director as well ascollectively by the Board on the Annual Basis towards the end of the Financial Year.
The Board performance is evaluated on the basis of number of Board and Committeemeetings attended by individual director participation of director in the affairs of thecompany duties performed by each director and targets achieved by company during theyear.
Performance of Independent Directors is evaluated based on objectivity andconstructiveness while exercising duties providing independent Judgment and riskmanagement etc.
DIVERSITY OF BOARD OF DIRECTORS
NRC will ensure the diversity of Board of Directors is in order with the requirement ofsize of the Company. Further NRC will ensure scope of work of Directors in the Companyand portfolios which are going to be allocated to them shall be based on diverseexperience of Directors.
MEETINGS OF BOARD OF DIRECTORS
During the financial year 2016-2017 the board of directors met seven times
|Name of the Director ||Category ||No. of Meetings held ||No. of Meetings attended ||Attendance at the AGM |
|MADAN LAL KHANDELWAL ||Chairman and Managing Director ||11 ||11 ||Yes |
|RADHIKA KHANDELWAL ||Non-Executive Director ||11 ||11 ||Yes |
|RAM NATH KAROL ||Independent Director and Chairman of the Audit Committee. ||11 ||11 ||Yes |
|GOVERDHAN DASS SETHI ||Independent Director and Chairman of the Nomination and Remuneration Committee. ||11 ||11 ||Yes |
COMMITTEES AT BOARD LEVEL
In compliance with the Companies Act 2013 as on 31st March 2017 the Board has threeCommittee viz. Audit Committee Nomination and Remuneration CommitteeShareholders/Investors Grievance Committee. The Committees have optimum combinationof Executive Non Executive and/or Independent Directors .The Committees are constitutedwith specific terms of reference and scope to deal with specific matters expediently. Thedetails of the committees constituted by the Board are given below.
**Note: Further after the completion of Financial Year Company has formed one moreCommittee named as "Share Transfer Committee" via Board Resolution passedon04th April 2017
COMPOSITION AND ATTENDANCE
Board comprises of three qualified Directors viz. Ram Nath Karol Goverdhan Dass Sethiand Radhika Khandelwal with majority being independent. Madan Lal Khandelwal is theChairman Two of the members is having experience in finance law and business. During theyear under review the Audit Committee met 4 times on to deliberate on various matters. ThePresent Composition and Attendance of the Audit Committee is as follows:
The Audit Committee pursuant to the provisions of Section 177 of the Companies Act2013 the
|Name ||Category ||Designation || |
No. of Meetings during
| || || ||F.Y.2016-17 Held ||Attended |
|Ram Nath Karol ||Non- Executive & Independent Director ||Chairman ||4 ||4 |
|Goverdhan Dass Sethi ||Non- Executive & Independent Director ||Member ||4 ||4 |
|Radhika Khandelwal ||Non- Executive Director ||Member ||4 ||4 |
REMUNERATION OF NON- EXECUTIVE / EXECUTIVE DIRECTORS
All decisions relating to the remuneration of the Directors were taken by the Board ofDirectors of the Company and in accordance with the Share holders approval wherevernecessary.
Details for remuneration paid / to be paid to the Directors for the year under revieware as under
|NAME OF THE DIRECTOR ||BUSINESS RELATIONSHIP WITH THE COMPANY ||SALARY BENEFITS BONUS ETC PAID DURING THE YEAR 2016-17 ||COMMISSION DUE/PAID/PAYABLE FOR 2016-17 ||SITTING FESS(FOR BOARD AND ITS COMMITTEES) |
|Madan Lal Khandelwal ||Chairman & Managing Director ||1200000.00 ||0.00 ||0.00 |
|Radhika Khandelwal ||Non- Executive Director ||0.00 ||0.00 ||0.00 |
|Ram Nath Karol ||Independent Director ||0.00 ||0.00 ||0.00 |
|Goverdhan Dass Sethi ||Independent Director ||0.00 ||0.00 ||0.00 |
DETAILS PERTAINING TO REMUNERATION
As required under Section 197(12) of the companies act 2013 read with Rule 5 (1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) 2014:
(i) The ratio of remuneration of each Director to the median remuneration of theemployees of the company for the financial year 2016-17 and
(ii) The percentage increase in remuneration of each Director Chief Financial OfficerCEO Company Secretary or Manager if any in the financial Year.
REMUNERATION OF NON-EXECUTIVE DIRECTORS
1. Details pertaining to remuneration as required under section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) 2014
2. The ratio of remuneration of each Director to the median remuneration of theEmployees of the Company for the financial year 2016-17 and
3. The percentage increase in remuneration of each Director Chief Financial OfficerCEO Company Secretary or Manager if any in the financial Year
|SR. NO. NAME OF DIRECTORS/KMP AND ITS DESIGNATION ||REMUNERATION TO THE DIRECTOR/KMP FOR THE FINANCIAL YEAR 2016-2017 ||PERCENTAGE INCREASE/DECREASE IN REMUNERATION THE FINANCIAL YEAR 2016-2017 ||RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF EMPLOYEES |
|1. Mr. Madan Lal Khandelwal(Chairman and Managing Director) ||1200000/- ||0% ||9.40 |
|2. Balvinder Singh Guleri (Company Secretary) ||211877/- ||5.5% ||1.66 |
|2. Mr. Ram Nath Karol (Independent Director) || ||N/A ||0.00 |
|3. Mr. Goverdhan Das Sethi(independent Director) || ||N/A ||0.00 |
|4. Mrs. Radhika Khandelwal || ||N/A ||0.00 |
|5. Mr. Navneet Khandelwal (Chief Executive Officer) ||900000/- ||0% ||7.05 |
|6. Mr. Vikrant Khandelwal (Chief Financial Officer) ||780000/- ||0% ||6.11 |
? The number of employees on the roll of the company are 22
? There is no variable component in remuneration of Directors of the Company. ? Theratio of the remuneration of the highest paid director to that of the employees who arenot Directors but receive remuneration in excess of the highest paid director during theyear None. ? It is hereby affirmed that the remuneration paid is as per the remunerationpolicy of the company.
INDEPENDENT DIRECTORS MEETING
During the year under reference one meeting of Independent directors was held on 25thMarch 2017 in compliance with the requirement of Schedule IV of the Companies Act 2013.At the said meeting performance of non independent Directors Board as a whole andChairman of the Company was reviewed.
PREVENTION OF INSIDER TRADING
The Company has adopted a code of conduct for fair disclosure and prevention of insidertrading in order to regulate and control trading in securities by Directors and designatedemployees of the Company. The code requires pre-clearance for dealing in the Companyshares and prohibits the purchase and sales of Company shares by Directors and designatedemployees while in possession or unpublished price sensitive information in relation toCompany and during the period of closure of trading window.
(i) Demat/Remat of shares
No request was received for Remat during the financial year. Details of Demat asfollows; a) Number of shares Dematerialized 833858 b) Percentage of Shares Dematerializedas on 31st march 2017 29.99%
(ii) Disclosures a)There were no transactions of material nature with its relatedparties that may have the potential conflict with the interest of the company at large.Transactions with related parties are disclosed in Note No. of the financial statements.b)There were no instances of non-compliance nor have any penalties imposed by StockExchanges or SEBI or any other statutory authority on any matter related to capital marketduring the last here financial years. c) Managing Director of the company has certified tothe Board with regard to the compliance made by them in terms of Clause 49 of the listingagreement and the certificate form part of this report.
M/s Ajay Khandelwal & Associates were appointed as an Internal Auditors of theCompany for the year ended 31st March 2017 under the provisions of Companies Act 2013.The Company proposes to continue their services for the year 2016-17.
In Accordance of Section 177 of the Companies Act 2013 the Company has constituted aWhistle Blower policy/ Vigil Mechanism to establish a vigil mechanism for the Directorsand employees to report genuine concerns in such manner as may be prescribed and to reportto the management instances of unethical behavior actual or suspected fraud or violationor violation of companys code of conduct.
Company has implemented an integrated risk management approach through which it reviewsand assesses significant risk on a regular basis to ensure the there is a robust system ofrisk controls and mitigation in place.
Senior management periodically reviews the risk management. The management however ofthe view that no risk element is identified which in opinion of the board may threaten theexistence of the company.
INTERNAL CONTROL SYSTEM
The Company has an internal control system commensurate with the size and complexity ofoperations. The Company has appointed M/s Ajay Khandelwal & AssociatesChartered accountants Jaipur as internal auditors of the Company. The Audit committee hasalso taken effective steps to review internal control system from time to time.
M/s Gopal Sharma & Co. Chartered Accountants was appointed as StatutoryAuditors of the Company to hold office from the conclusion of this AGM till the conclusionof the Annual General Meeting to be held for the Financial Year ending on 31st March2018. In this regard the Company has received a certificate from the auditors to theeffect that if they are reappointed it would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has obtained a declaration from independent Directors the said independentDirector meets the criteria of independence as mentioned in Section 149 (6) of theCompanies Act 2013.
REPRESENTATION ON OBSERVATION OF SECRETARIAL AUDITOR
There were four observations found by the Secretarial Auditor during his audit for thefinancial year 2016-17 which are as under:-
1. 315000 shares are pending for listing under BSE
The Board of Directors would like to express their incapability to meet the abovecompliance under:-
1. The Company has already made the application and reminder mails for listing of315000 shares on BSE but does take any initiative action by it.
Company has been awarded a Contract worth Rs. 512498033.84 )rupees fifty One CroreTwenty Four Lacs Ninety Eight thousand Thirty Three Rupees and Eight Four paisa) by M.P.Poorv Kshetra Vidyut Vitaran Company Limited Jabalpur (Madhya Pradesh) for supply ofmaterials survey installation testing and commencing of 11 KV feeder under feederseparation programme for separation of non-agriculture and Agriculture consumersreplacement of bare LT Line with AB Cable in rural areas at (OQM) division Amarpatan ofSatna district of M.P. Poorv Kshetra Vidyut Vitaran Company Limited
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO AS REQUIRED UNDER SECTION 134 (3)(m) OF THE COMPANIES ACT2013: ? CONSERVATION
The Company takes appropriate measures from time to time for conservation of energy inthe operation of the plant
? POWER & FUEL CONSUMPTION
|Particulars ||Unit ||2016-2017 ||2015-2016 |
|i) Electricity own generation || || || |
|by D.G. Set Units ||KWH ||4382 ||8515 |
|Unit per Ltr. Of Disel Oil ||KWH ||0.250 ||0.235 |
|Cost*Unit ||Rs. ||11.50 ||11.30 |
|ii) Fuel Oil(Disel-LDO/FO/GO) || || || |
|Quantity ||Ltr. ||60438 ||117455 |
|Total Amount ||Rs. ||3444982 ||6278008 |
|Average Rate/Unit ||Rs. ||57.00 ||53.45 |
? TECHNOLOGY ABSORPTION
The Research and Development Department of the Company is dedicated to developenvironment- friendly processes and introduces new formulations for lubricants from timeto time.
? FOREIGN EXCHANGE
During the year under review the income in foreign exchange was Rs. 2387604/- and theout go on purchase of lubricants was Rs. 49259636/-
The Board would like to place on record its sincere appreciation to all the employeesfor their continued efforts towards the growth of the company. The Board also wishes toplace on record the support extended by its Bankers and the trust reposed in it by itsshareholders.
| ||By Order of the Board |
| ||For: Continental Petroleums Limited |
| ||CIN: L23201RJ1986PLC003704 |
| ||Sd/- |
|Date: 30th May 2017 ||Madan Lal Khandelwal |
|Place: Jaipur ||Chairman and Managing Director |
| ||DIN: 00414717 |