Chandni Textiles Engineering Industries Ltd.
|BSE: 522292||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE713D01055|
|BSE 00:00 | 22 Mar||34.50||
|NSE 05:30 | 01 Jan||Chandni Textiles Engineering Industries Ltd|
|Mkt Cap.(Rs cr)||56|
|Mkt Cap.(Rs cr)||55.68|
Chandni Textiles Engineering Industries Ltd. (CHANDNITEXT) - Director Report
Company director report
Your Directors have pleasure in presenting the 32nd Annual Report togetherwith Audited Financial Statements for the year ended 31st March 2018. TheFinancial Statements have been prepared after giving accounting effect to the demerger ofthe business of CHANDNI TEXTILES ENGINEERING INDUSTRIES LIMITED (i.e. EngineeringDivision) along with a wholly-owned subsidiary company of your company CHANDNI MACHINESPRIVATE LIMITED. The Financial Results of the Company have been summarized and givenbelow:
(' In Lacs
During the year under review the turnover of the company has decreased from 5393.78lacs as compared to previous year to 4904.35 lacs in the current year. The Profit beforetax has increased from 60.10 lacs in the previous year to 198.07 lacs in the current year.The Net Profit increased from 44.10 lacs in the previous year to 141.82 lacs in thecurrent year.
In order to conserve the resources of Company your Directors do not recommend anydividend.
SCHEME OF ARRANGEMENT / DEMERGER
Scheme of Arrangement ("Scheme") between Chandni Textiles EngineeringIndustries Limited ("Demerged Company") and Chandni Machines Limited("Resulting Company") and their respective shareholders. Pursuant to the Schemeof Arrangement under section 230 to 232 read with Section 52 and 66 of the Companies Act2013 as sanctioned by the Hon'ble National Company Law Tribunal bench at Mumbai on 21stJanuary 2018 the Demerged Company i.e. Engineering Division of Chandni TextilesEngineering Industries Limited has been transferred and vested in the Resulting Company ona going concern basis with effect from July 012016 i.e. the appointed date under theScheme.
The Scheme of Arrangement became effective on 24th January 2018 being thelast date on which all the conditions and approvals referred to in the Scheme have beenfulfilled / obtained and therefore the effect of the Scheme was considered in thefinancial statements of the company for the year ended 31st March 2018. Interms of the Scheme the business and transactions of demerged undertaking were carried onand held by the Demerged Company in trust for and on account of the Resulting Company fromthe appointed date till the
Scheme became effective. Pursuant thereto all assets and liabilities have beentransferred to the Resulting Company at their respective book values on the appointed dateand duly adjusted by subsequent transactions carried on in trust.
Also the profit or income accruing or expenditure or loss arising or incurred relatingto the business of demerged undertaking from the appointed date are treated as the profitor income or expenditure or loss as the case may be of the Resulting Company. The Schemehas accordingly been given effect to in the accounts for the current year. As per theScheme the Resulting Company will issue equity shares in the ratio of 1:5 to theshareholders of the Demerged Company.
REORGANISATION OF SHARE CAPITAL
As per the Scheme of Arrangement the Securities Premium Account of the Demerged Companywill be reduced from Rs. 3 22 74330 divided into 32 27 433 equity shares of Rs. 10/-each in the ratio of 1:5 i.e. 1 equity shares of Chandni Machines Limited (CML) of Rs.10/- each fully paid up for every 5 equity shares of Chandni Textiles EngineeringIndustries Limited (CTEIL) of Rs. 10/- each fully paid up on the Record date of 20thAugust 2018.
ALLOTMENT OF SHARES BY THE RESULTING COMPANY
Chandni Machines Limited (CML) the Resulting Company will allot and issue to theshareholders of Chandni Textiles Engineering Industries Limited (CTEIL) the DemergedCompany 1 (One) Equity Shares of Rs. 10/- each fully paid up for every 5 (Five) EquityShares of Rs. 10/- each held by the shareholders of the record date. Accordingly3227433 equity shares of Rs. 10/- will be allotted and issued by Chandni MachinesLimited which will be adjusted from Securities Premium Account as per the Scheme ofArrangement and after rounding off the fraction to the nearest integer.
The existing Equity Share capital for an amount of Rs. 1 00 000/- represented by10000 Equity Shares of Rs. 10/- each held by Chandni Textiles Engineering IndustriesLimited in Chandni Machines Limited (Formerly known as "Chandni Machines PrivateLimited") will be cancelled and shareholders holding 10000 Equity Shares of Rs.10/- each of the Resulting Company on the effective date shall not be issued or allottedany new shares by the Resulting Company or by the Demerged Company against such sharesupon such cancellation. Consequently Chandni Machines Limited will cease to be the WhollyOwned Subsidiary Company of Chandni Textiles Engineering Industries Limited.
TRANSFER TO RESERVES
An amount of Rs. 139.88 lacs is proposed to be retained in the Profit & LossAccount.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Management Discussion & Analysisforms part of the Annual Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
There are no material changes and commitments affecting the financial position of theCompany except transfer of assets and liabilities for giving effect to the order fromNational Company Law Tribunal Division Bench Mumbai was recorded after Demerger pursuantto the Scheme of Arrangement to the close of the Financial Year.
The Company has not accepted any public deposits within the meaning of Section 73 to 76of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the year under review and there are no outstanding deposits which are pending forrepayment.
In line with requirements of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company is committed to the principles of good Corporate Governanceand continues to adhere good corporate governance practices consistently.
A separate section is given on Corporate Governance along with a certificate from theAuditors of the Company regarding compliance with conditions of Corporate Governance asstipulated under Regulation 34(3) read with
Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 which forms part of this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act 2013 and theArticles of Association of the Company Mrs. Amita Jayesh Mehta Director retires byrotation at the ensuing Annual General Meeting and being eligible offers herself forre-appointment. The Board of Directors recommends her re-appointment.
None of the Directors is disqualified for appointment/ re-appointment under Section 164of the Companies Act 2013. As required by law this position is also reflected in theAuditor's Report.
All the Independent Directors on the Board have given a declaration of theirindependence to the Company as required under Section 149(6) of the Companies Act 2013.
Ms. Gayatri Valan resigned as Company Secretary & Compliance Officer of the companywith effect from 14th December 2017.
Ms. Khushboo Shah was appointed as Company Secretary and Compliance Officer of thecompany in its Board Meeting held on 11th January 2018.
The Composition of the Board meetings of the Board held during the year and theattendance of the Directors thereat have been mentioned in the Report on CorporateGovernance in the Annual Report.
As required under Section 203 of the Companies Act 2013 the Company has noted thatMr. Jayesh Ramniklal Mehta Managing Director; Mr. Shailesh Pandurang Sankav ChiefFinancial Officer and Ms. Khushboo Shah Company Secretary are the Key ManagerialPersonnel of the Company.
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015 Independent Directorsat their meeting without participation of Non-Independent Directors and managementconsidered and evaluated the Boards' performance performance of the Directors.
The Board has carried out an annual evaluation of its own performance and performanceof the individual Directors as well as the Committee of Directors.
The details of programs for familiarization of Independent Directors with the Companytheir roles responsibilities in the Company and related matters are put up on the websiteof the company at the link http://www.cteil.com/pdf/Familiarization%20Program%20of%20Independent%20Directors.pdf
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The objective of the Policy:
(a) To lay down criteria and terms and conditions with regard to identifying personswho are qualified to become Directors (Executive and Non-Executive) and persons who may beappointed in Senior Management and Key Managerial positions and to determine theirremuneration.
(b) To determine remuneration based on the Company's size and financial position andtrends and practices on remuneration prevailing in peer companies.
(c) To carry out evaluation of the performance of Directors
(d) To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.
The Company for the year under review has not paid any remuneration by way of sittingfees to Non-Executive Directors.
The Company has in place a Board Level Audit Committee in terms of the requirements ofthe Companies Act 2013 read with rules made thereunder and Regulation 18 of the SEBI(Listing Obligations & Disclosure
Requirements) Regulations 2015 the details in respect of which are given in CorporateGovernance Report. Further there has been no instance where the Board of Directors hasnot accpeted the recommendation of Audit Committee.
The Vigil Mechanism Policy of the Company which also incorporates a Whistle BlowerPolicy in terms of the Listing Agreement/ SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 for directors and employees to report concern aboutunethical behavior actual or suspected fraud. Protected disclosures can be made by awhistle blower in writing to the Whistle Officer and under the said mechanism; no personhas been denied access to the Chairman of the Audit Committee.
The Vigil Mechanism Policy may be accessed on the Company's website at the linkhttp://www.cteil.com/pdf/ Vigil%20Mechanism%20or%20Whistle%20Blower%20Policy.pdf
NUMBER OF MEETINGS OF THE BOARD
During the year under review five Board Meetings were conducted. The details of thesame have been given in the Corporate Governance Report under Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forming part of thisReport.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the year the Company has not entered into any contracts/ arrangements with arelated party as specified under Section 188 of the Companies Act 2013 except for thepayment of remuneration to Managing Director and Key Managerial Personnel. Hencereporting under AOC-2 is not required. The policy materiality of related partytransactions and dealing with related party transactions is available on the Company'swebsite at the link:
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS
The details of investments covered under the provisions of Section 186 of the CompaniesAct 2013 are disclosed in the Note No. 4 to the Financial Statements. The Company has notgiven any loans and guarantees under Section 186 of the Act during the Financial Year2017-2018.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year no reportable material weakness in the design oroperation was observed in the internal financial controls.
RISK MANAGEMENT POLICY
Pursuant to section 134(3) (n) of the Companies Act 2013 and Regulation 21 of the SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015 the Company hasformulated a Risk Management Policy to mitigate the risks. Major risks identified by eachof the businesses and functions are systematically addressed through mitigation actions ona continuing basis and are reported periodically to the Audit Committee and the Board. Thedetails of the Risk Management functions are covered in the Corporate Governance Report.
As per Section 139 of the Companies Act 2013 M/s Ambavat Jain & Associates LLPChartered Accountants (Firm Registration No. : 109681W) were appointed as StatutoryAuditors of the Company for a period of Five (5) years till the conclusion of Thirty SixthAnnual General Meeting of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedM/s Ajay Anil Thorat & Associates Practicing Company Secretaries to conduct theSecretarial Audit of the Company for the financial year 20172018. The report is attachedherewith as Annexure - I to the Board's Report.
M/s Ajay Anil Thorat & Associates Practicing Company Secretaries in theirSecretarial Audit Report have made certain qualifications. The auditor's qualificationsand Boards explanation thereto are summarized as under:
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS
There are no significant and material orders passed by the Regulators/ Courts thatwould impact the going concern status and the Company's operation in future.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Conservation of Energy
i. Inspite of not being intensive your Company enforces strict discipline in reducingpower consumption
ii. Idle running of machinery consuming high power is restricted to the loading andunloading cycles of the respective machines.
b) Technology Absorption
Your Company has not imported any technology for manufacture of machinery.
c) Foreign Exchange Earnings and Outgo
EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3) (a) along with Section 92(3) of The Companies(Amendment) Act 2017 the details forming part of the Extract of Annual Return in FormMGT-9 is annexed herewith as Annexure -II to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5 (1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure III.
There are no employees employed throughout the financial year who was in receipt ofremuneration of INR 1.02 crore or more or employed for part of the year and in receipt ofINR 8.5 lakh or more a month as mentioned under Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) of the Companies Act 2013 with respect to Director'sResponsibility Statement it is hereby confirmed that in the preparation of the AnnualAccounts:
The applicable accounting standards had been followed along with properexplanation relating to material departures have been given;
The Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the 31stMarch 2018 and of its profit for the year;
Proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of this Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;
The annual accounts have been prepared on a going concern basis;
The directors have laid down internal financial controls to be followed by theCompany. Internal Financial Controls are adequate and were operating effectively;
Proper Systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION.PROHIBITION AND REDRESSAL) ACT. 2013
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
Your Directors acknowledge with gratitude the timely assistance and help extended bythe Bankers for having provided the required bank facilities. Your Directors wish to placeon record their appreciation of the contributions made by the employees at all levels forthe continued good performance of your company.