On behalf of the Board of Directors (the "Board") of the Company it gives meimmense pleasure to present the 26th board's
Report along with the Balance Sheet Profit and Loss account and Cash Flow statementsfor the financial year ended March 31 2020.
Key highlights of financial performance of your Company for the financial year 2019-20are provided below:
| ||Current Year ||Previous Year |
| ||March 31 2020 ||March 31 2019 |
|Profit/(Loss) before Interest & Depreciation ||12443204 ||2941143 |
|Finance Cost ||17783986 ||20502936 |
|Profit/(Loss) before Depreciation ||(5340783) ||(17561793) |
|Depreciation ||2101508 ||6314721 |
|Profit/(Loss) before Tax ||(7442291) ||(23876514) |
|Tax Expenses: || || |
|Current tax ||0 ||0 |
|Deferred Tax Asset ||0 ||(2890957) |
|Profit / (Loss) after Tax ||(7442291) ||(26767471) |
Due to loss your Directors have not recommended any dividend.
Directors' Responsibility Statement:
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge confirms that:
a) in the preparation of the accounts the applicable accounting standards have beenfollowed along with proper explanations relating to material departure;
b) appropriate accounting policies have been selected and applied consistently and havemade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis; e) they have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS
To avoid repetition in Directors' Report and Management Discussion & Analysis yourDirectors have presented a composite summary of performance and functions of the Company.
As per the provisional estimates of Central Statistics Office (CSO) the Indian Economyis estimated to grow at a decent pace. Despite marginal slow down over the last yearIndia has cemented its credentials as the world's fastest expanding major economy in theworld. Going forward the economy is expected to display a better performance consideringthe pick-up in consumption and private investments. Besides a low inflation expectationfor financial year 2019-20 has created further room for monetary easing by the RBI whichis expected to support the growth momentum.
The recent elections have led to formation of a stable government at the Centre. Thegovernment is expected to carry forward the reforms agenda. It will continue to focus onbuilding infrastructure. Higher spending on roads railways airports waterways andaffordable housing will boost the economy and provide economic opportunities for citizensto grow and improve their income levels. While global economy is likely to remain muted onthe back of the ongoing trade dispute between US and China the domestic economy shouldbenefit from the government's investment momentum. In addition the government's boost torural India in the form of direct benefit transfer will give an impetus to consumption.
Industry Structure and development:
Garment and apparel industry is susceptible to fast changing trends and styles. It is alabour intensive industry and requires skilled and unskilled labour in large numbers.Further the industry is pre-dominated by unorganized sector leading to a cut throatcompetition in certain segment of the industry from unorganized sector. Internationallyalso the industry is facing tough competition from countries like Bangladesh and Vietnamwhere labour is very cheap.
As stated in the previous year's report due to unabated cut throat competition fromunorganized sector and international market leading to un-remunerative pricing yourCompany was compelled to suspended the garment manufacturing business. The garmentmanufacturing remained suspended in the financial year 2018-19 also. Efforts were made toclear the stocks of garments and fabrics. During the year under review processingdivision was also disposed off.
The Company's other business activities viz. property leasing and hostel business hasdone well compared to previous year. Though the property market in general was sluggishthrough-out the year under review property leasing business had shown some sign ofimprovement.
Performance of the Company:
As reported in the previous year manufacturing garments was suspended and processingdivision was disposed off. The Company sold off the stocks and generated revenue ofRs.121.93 lacs. Total revenue from operations was increased to Rs. 508.12 lacs as againstRs.456.50 lacs a year ago. The
Company incurred a loss of Rs.267.67 lacs as against a loss of Rs. 74.42 lacs in theprevious year.
MATERIAL CHANGES AND COMMITMENT
There was no material change and commitments affecting the financial position of theCompany between the end of the financial year and the date of this report.
Opportunity and threats:
The Company is totally out of the garment and apparel manufacturing activity andprocessing division a loss-making division. The Company will now be concentrating on itsleasing of property business and hotel business which will improve its profitability.
Followed by high prices of premises the rentals are constantly increasing. With morepremises of the Company coming under lease the rental income of the Company is expectedto increase substantially. Hostel business is also expected to show healthy growth. Withexpenses under control your Directors expects to earn modest profit in coming years.
Your Company does not have any subsidiary.
Consolidated Financial Statements:
Since the Company does not have any subsidiary company or associate or joint ventureconsolidated financial statements are not prepared.
Provisions of para C D and E of Schedule V of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 are not applicable to your Company.
Hence report on Corporate Governance is not annexed.
Loans Guarantees and investments:
The Company has not given any loan or guarantee nor has provided any security. TheCompany has made investments in shares and commercial properties details of which areprovided in the financial statements.
Your Company has not accepted any deposit from the public its shareholders oremployees during the year under review.
Conservation of Energy etc.:
Information pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo as required under the provisions of Section 134 (3) (m) of theCompanies Act 2013 read the rules made there under are as under is annexed as AnnexureI.
Transactions with related parties:
All the transactions with related parties entered into during the financial year2018-19 were on arm's length basis and also in the ordinary course of business. Details ofall related party transactions are placed before the audit committee. The policy onrelated party transactions as approved by the Board of Directors is placed on theCompany's website.
Since all the transactions with the related parties entered into by the Company were inordinary course of business and were on arm's length basis Form AOC-2 is not applicable.
Directors and key managerial personnel:
During the year under review there was change in constitution of the Board ofDirectors of your Company. Mr. Asit Sharma an Independent Directors resigned from theboard. The Nomination & Remuneration Committee has identified Mr. Anshul DarshanKukreja and recommended his appointment as an Independent Director. Based on therecommendation of the Nomination and Remuneration Committee the Board of Directors in itsmeeting held on 28th November 2019 appointed Mr. Mr. Anshul Darshan Kukreja asan Additional (Independent) Director. Pursuant to the provisions of Section 160 of theCompanies Act2013 Mr. Sharma will be vacating the office at the ensuing Annual GeneralMeeting.
Mr. Anshul Darshan Kukreja is the Commerce Graduate. He has varied experience ofworking with manufacturing companies running his own exclusive regional distributorshipand also providing professional consultancy services for business development. The Boardof Directors is of the view that associating Mr. Anshul Darshan Kukreja as Director theCompany would benefit immensely. Hence in compliance with the provisions of Section 149of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 it is proposed to appoint Mr. Anshul DarshanKukreja as an Independent Director of the Company to hold office for a consecutive term offive years commencing from 28th November 2019.
To comply with the requirements of the Companies Act 2013 and Articles of Associationof the Company Mrs. Kavita N. Hingorani shall retire by rotation at the forthcomingAnnual General Meeting. Being eligible she has offered herself for reappointment.
During the year under review none of the non-executive directors had any pecuniaryrelationship or transactions with the Company. Mr. Narain Hingorani Managing Director ofthe Company is Chief Executive Officer. Mr. D.S. Karnale was appointed as Chief FinanceOfficer with effect from 15th July 2019.
The Company appointed Mr. Mayank Agrawal Company Secretary in the 25thAnnual General Meeting held on 20th August 2019.
Disclosure by Independent Directors:
All the Independent Directors have furnished declarations that they meet the criteriaof independence as laid down under Section 149 (6) of the Companies Act 2013.
The Committee presently comprises of Mrs. Roopa Teckchandani Mr. Anshul DarshanKukreja both Independent Directors and Mrs. Kavita Hingorani. All the members of theCommittee are having financial and accounting knowledge. The Committee met 4 times duringthe financial year 2019-20.
Nomination & Remuneration Committee:
The said committee presently comprises of Mr. Anshul Darshan Kukreja Mrs. RoopaTeckchandani and Mrs. Kavita Hingorani. The Committee met twice during the year.
The Nomination and Remuneration Policy recommended by the Nomination & RemunerationCommittee is duly approved and adopted by the Board of Directors. The said policy isannexed to the report as Annexure II.
Stakeholder Relationship Committee:
The Stakeholders' Relationship Committee consists of two members viz. Mr. NarainHingorani and Mr. Anshul Darshan Kukreja to look into redressal of Shareholders andinvestors grievances with respect to transfer of Shares dematerialization of sharesnon-receipt of declared dividend or Annual report etc. and other matters relating toshareholder relationship. The committee met four times during the year. During the yearended on March 31 2020 the Company did not receive any complaint from any of its members.
Eight meetings of the Board were held during the year under review. One meeting of theIndependent Directors was held during the year.
Pursuant to the provisions of the Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors had done the annual evaluation ofits own performance its committees and individual directors. The Nomination andRemuneration Committee reviewed the performance of the individual directors on the basisof criteria such as the contribution of the individual director to the Board and committeemeetings.
In a separate meeting of independent directors performance of non-independentdirectors performance of the Board as a whole was evaluated taking into account theviews of the management and non-executive directors.
Policy on appointment of directors and remuneration as provided in Section 178(3) ofthe Companies Act 2013 has been dealt with in the corporate governance report whichforms part of the Directors' Report.
The Company does not fulfil any of the three criteria specified in Section 135(1) ofthe Companies Act 2013 and as such is not required to comply with the provisions ofSection 135 and the Companies (Corporate Social Responsibility Policy) Rules 2014.
Internal Control System:
Adequate internal control systems are in place to maintain quality of product properaccounting as per norms and standards prescribed asset maintenance and its proper use.The Company has an independent internal auditor who periodically reviews the accounts andreports to the Audit Committee.
The Company has Risk Management Committee. This committee is responsible for reviewingthe risk management plan and its effectiveness. The audit committee also reviews thefinancial risk and its control. The management also continuously access the risk involvedin the business and all out efforts are made to mitigate the risk with appropriate action.All the assets of the Company are adequately covered by comprehensive insurance.
Relations between the management and employees remained cordial through-out the year.The Company had a total 4 permanent employees as on 31st March 2020.
The particulars of employees required under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are appended to this report as AnnexureIII and forms part of this report.
Information required under Section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Management Personnel) Rule2014 and forming part of Directors' Report for the year ended 31st March 2020is given in a separate annexure to this report. The said annexure is not being sent alongwith this report to the members of the Company in line with the provisions of Section 136of the Companies Act 2013. Members who are interested in obtaining these particularsmay write to the Company Secretary at the Registered Office of the Company. The aforesaidannexure is also available for inspection by the members at the registered office of theCompany 21 days before the 26th annual general meeting and up to the date ofthe said annual general meeting during normal business hours on working days.
According to Directors there is no adverse remark made by Statutory Auditors in theirreport. Notes to the accounts are self-explanatory to comments/observation made by theauditors in their report. Hence no separate explanation is given.
At the 25th AGM held on 20th August 2019 M/s. J. S. Uberoi &Co. Chartered Accountants (Registration No. 111107W) was appointed as Statutory Auditorsof the company for a term of 5 Years from the Financial Year 2019-20 onwards. AccordinglyJ. S. Uberoi & Co. Chartered Accountants will continue as statutory auditors of theCompany till the financial year 2023-24.
Pursuant to provisions of the Section 143(12) of the Companies Act 2013 neither theStatutory Auditors nor the Secretarial Auditor has reported any incident of fraud to theAudit Risk and Compliance Committee during the year under review.
Secretarial Audit Report:
During the year Secretarial audit was carried out by Mr. Abhishek Soni PractisingCompany Secretary for the financial year 20109-2020. The report on Secretarial Audit isappended as Annexure IV to this report. According to Board of Directors report does nothave any adverse remarks.
Details of Significant and Material Orders passed by the Regulators or Courts orTribunals:
No such order was passed by any of the authorities which impacts the going concernstatus and company's operations in future.
REPORTING OF FRAUD:
During the year no fraud whether actual suspected or alleged was reported to theBoard of Directors
Pursuant to the provisions of Section 92(3) and Section 134 (3)(a) of the CompaniesAct 2013 a copy of the Annual Return of the Company for the year ended 31stMarch 2020 is placed on the website of the Company at www.ceenikexports.in.
The Company has a vigil mechanism policy to deal with instances of fraud andmismanagement. The whistle blower policy adopted by the Board of Directors is hosted onthe website of the Company.
Prevention of Sexual Harassment at Workplace:
In compliance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 your Company has duly constituted an internal complaintcommittee. The Committee has formulated policy to ensure protection to its femaleemployees.
Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis may constitute forward looking statements within the meaning ofapplicable laws and regulations. Although the expectations are based on the reasonableassumption the actual results might differ.
The Directors wish to place on record their deep sense of appreciation to the Company'sBankers and all the staff members for their unstinted support. Your directors also wish tothank the shareholders for confidence reposed in the management of the Company.
By the order of the Board
For Ceenik Exports (India) Limited
| ||s/d |
|Place: Mumbai ||(N. N. Hingorani) |
|Date: 31/08/2020 Chairman & Managing Director |
| ||DIN: 00275453 |