Your Directors have pleasure in presenting the 33rd Annual Report together with AuditedFinancial Statements for the year ended 31st March 2019. The FinancialStatements have been prepared after giving accounting effect to the demerger of thebusiness of CHANDNI TEXTILES ENGINEERING INDUSTRIES LIMITED (i.e. EngineeringDivision). The Financial Results of the Company have been summarized and given below:
1. FINANCIAL HIGHLIGHTS OF THE COMPANY
| || ||(In Rupees) |
| ||2018-2019 ||2017-2018 |
|Revenue from operations ||108647114 ||490434932 |
|Other Income ||6060924 ||10781288 |
|Total Revenue ||114708038 ||501216220 |
|Profit before depreciation finance costs & tax ||9801875 ||475263319 |
|Less: Depreciation ||6280316 ||5776772 |
|Finance Costs ||1493143 ||368401 |
|Profit before exceptional items and tax ||2028416 ||19807728 |
|Less: Exceptional Items ||47209 ||0 |
|Profit before tax ||1981207 ||19807728 |
|Tax Expense || || |
|Current tax ||634684 ||4060897 |
|Deferred tax ||(405103) ||1565124 |
|Profit after tax ||1751626 ||14181707 |
|Balance brought forward from previous year ||13988421 ||5308931 |
|Add: Profit for the year ||1751626 ||14181706 |
|Less: Profit of demerged undertaking from appointed date (01/07/2016 to 31/03/2017) transferred to CMPL ||0 ||(5502216) |
|Balance carried to balance sheet ||15740047 ||13988421 |
2. OPERATIONS OF THE COMPANY
Turnover of the company has drastically decreased from INR 490434932/- as comparedto previous year to INR 108647114/- in the current year.
The Profit before tax has decreased from INR 19807728/- in the previous year to INR3689249/- in the current year.
The Net Profit after tax decreased from INR 14181707/- in the previous year to INR1751626/- in the current year.
In order to conserve the resources of Company your Directors do not recommend anydividend.
4. TRANSFER TO RESERVES
An amount of INR 15740047/- is proposed to be retained in the Profit & LossAccount.
5. CHANGE IN NATURE OF BUSINESS IF ANY
During the financial year there has been no change in the business of the company orin the nature of business carried by the Company during the financial year under review.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATED AND THE DATE OF THE REPORT
No material changes and commitments if any affecting the financial position of theCompany which have occurred between end of the financial year of the Company to which thefinancial statements relate and the date of the report.
7. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES SUBSIDIARY COMPANY
As on 31st March 2019 your Company has one subsidiary company incorporated on 11thJanuary 2019 in the name of "CHANDNI PLASTICS LIMITED" and is registeredin India. The subsidiary company is engaged in the business of manufacture of Plasticcrates Battery Invertor casings pail buckets and all types of injection plasticinjection moulded parts.
8. 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.
9. 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 which has beenannexed to this report as Annexure -F
Pursuant to Section 149 and other applicable provisions of the Companies Act 2013 theBoard of Directors is seeking re-appointment of Mr. Rameshchand Garg Mr. Bharat SugnomalBhatia and Mr. Vasant Gaurishankar Joshi as Non-Executive Independent Director for a termof 5 (five) consecutive years upto the conclusion of 38th Annual General Meeting. Detailsof the proposal for appointment of Mr. Rameshchand Garg Mr. Bharat Sugnomal Bhatia andMr. Vasant Gaurishankar Joshi are mentioned in statement pursuant to Section 102 of theCompanies Act 2013 in the Notice of Annual General Meeting. The aforesaid directorsfulfill the conditions specified in the Companies Act 2013 and rules made thereunder fortheir appointment as Independent Directors. The Board is of the opinion that theircontinued association as Independent Directors shall immensely benefit the Company.Accordingly the Board recommends their appointment as Non-Executive Independent Directorsby the shareholders upto the conclusion of the 38th Annual General Meeting in the calendaryear 2024.
Mr. Rameshchand Garg Mr. Bharat Sugnomal Bhatia and Mr. Vasant Gaurishankar Joshi arethe Additional Non-Executive Independent Director of "CHANDNI MACHINESLIMITED" the listed company.
Information pertaining to these Directors is given in Corporate Governance Sectionwhich forms part of this annual report.
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.
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 and Compliance Officer are theKey Managerial Personnel of the Company.
10. NUMBER OF MEETINGS OF THE BOARD
During the year under review six Board Meetings were conducted. The composition of theBoard and other details relating to the Board meetings has been provided in the CorporateGovernance Report. The gap between two Board Meetings did not exceed 120 days as perSection 173 of the Companies Act 2013.
The Company has duly constituted the following mandatory Committees in terms of theprovisions of the Companies Act 2013 read with rules framed thereunder viz.
i) Audit Committee
ii) Nomination and Remuneration Committee
iii) Stakeholders Relationship Committee
The composition of all such Committees number of meetings held during the year underreview brief terms of reference and other details have been provided in the CorporateGovernance Report which forms part of this Annual Report. All the recommendations made bythe Committees were accepted by the Board.
12. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors to the best oftheir knowledge hereby state and confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed and there are no materialdepartures.
(b) the Directors 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 31st March 2019 and ofits profit for the year;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and such Internal Financial Controls are adequate and were operating effectively;and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated under Section 149(6) of the Companies Act2013.
There has been no change in the circumstances affecting their status as IndependentDirectors of the Company so as to qualify themselves to be appointed as IndependentDirectors under the provisions of the Companies Act 2013 and the relevant regulations.
SEPARATE MEETING OF INDEPENDENT DIRECTOR
In terms of requirements of Schedule IV of the Companies Act 2013 the IndependentDirector of the Company met separately on 14th February 2019 to inter alia review theperformance of NonIndependent Directors.
14. PUBLIC DEPOSITS
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.
15. COMPANY'S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Company has been following a policy with respect to appointment and remuneration ofDirectors Key Managerial Personnel and Senior Management Personnel. The appointment ofDirectors on the Board is subject to the recommendation of the Nomination and RemunerationCommittee (NRC). Based on the recommendation of the NRC the remuneration of ExecutiveDirector is fixed in accordance with the provisions of the Company's Act 2013 whichcomprises of Basic Salary Perquisites Allowances and Commission. The Remuneration ofNon-Executive Directors comprises of sitting fees in accordance with the provisionsCompanies Act 2013.
The criteria for appointment of Board of Directors and Remuneration Policy of yourCompany are placed on the website of the Company www.cteil.com
16. EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration and otherCommittees. The details of performance evaluation have been mentioned in the CorporateGovernance Report.
17. SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyappointed M/s Ajay Anil Thorat & Associates Practicing Company Secretaries to conductthe Secretarial
Audit of the Company for the financial year 2018-2019. The report is attached herewithas Annexure - II' 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:
|AUDITOR'S QUALIFICATION ||BOARD'S EXPLANATION |
|a) In the outcome of board meeting dated 14th November 2018 the company has not disclosed forming of subsidiary decision taken by the Board to the stock exchanges. ||As per Regulation 30 read with Schedule III Part A Para A (4) of Securities and Exchange board of India (Listing Obligations and Disclosure Requirement) Regulations 2015 the points mentioned thereunder are required to be disclosed in outcome of board meeting within 30 minutes of the conclusion of the board meeting. |
| ||However company obtained Certificate of Incorporation on 11th January 2019 and the same was disseminated to both the stock exchanges on 12th January 2019 as per the format prescribed in SEBI Circular dated September 09 2015. |
|b) Form MGT14 filed for special resolution passed by shareholders for confirming the continuation of Independent Director over the threshold age limit the purpose of passing of resolution has been selected as Resolutions passed jn pursuance of exercise of powers of Board of Directors instead of others under Companies Act 2013. Since the board of directors does not have powers to exercise for this matters. Further in Form MGT 14 - declaration part - the date of board of directors meeting in which authority to file this form MGT 14 has been given is mentioned as 28th September 2018; however there is no any board meeting on this date. ||The Company inadvertently wrote the date of Annual General Meeting (AGM) however the e-form was approved without any error. |
|Hence this date has been wrongly mentioned by the Company. Further all the special business should be specifically discussed in the Board Meeting and once board confirms it then only it should be added in the Notice of Annual General Meeting. ||The Company will take care in future. |
18. EXTRACT OF ANNUAL RETURN
The details forming part of extract of the Annual Return in Form MGT-9 in accordancewith Section 92(3) of The Companies Act 2013 read with the Companies (Management andAdministration) Rules 2014 has been annexed with this report as Annexure -IIP
19. AUDITORS STATUTORY AUDITORS
M/s Ambavat Jain & Associates LLP Chartered Accountants (Firm Registration No.:109681W) were appointed as Statutory Auditors of the Company for a period of Five (5)years till the conclusion of Thirty Sixth Annual General Meeting of the Company.
20. STATUTORY AUDITORS REPORT
The Auditors Report on Standalone Financial Statements for the financial year 2018-2019 issued by M/s Ambavat Jain & Associates LLP Chartered Accountants does notcontain any qualification observation disclaimer reservation or adverse remark.
21. PARTICULARS OF LOAN GIVEN INVESTMENTS MADE GUARANTEE GIVEN AND SECURITIESPROVIDED UNDER SECTION 186 OF THE ACT
The details of investments covered under the provisions of Section 186 of the CompaniesAct 2013 are disclosed in Note No. 4 to the Financial Statements. The Company hasnot given any loans and guarantees under Section 186 of the Act during the Financial Year2018-2019.
22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of contracts or arrangements entered into by the company with relatedparties referred to in sub-section (1) of Section 188 of the Companies Act 2013 aredisclosed in Form AOC-2 pursuant to section 134(3) (h) of the Companies Act 2013 readwith Rule 8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure -IV' to this report. The company has framed a Policy on Related Party Transactions.The policy on related party transaction can be accessed on the website of the Company www.cteil.com
23. RISK MANAGEMENT
The Company has a risk management frame work for identification assessment andmitigation of risks. This framework essentially creates transparency and minimize the riskand adverse impact on the business objectives and enhances the Company's competitive edge.This frame work consists of various risk models helping in indentifying risk risk trendsexposure and potential influence analysis is separately for various business segments andat various levels of the Company.
Based on the operations of the Company new risks if any are identified appropriatesteps are taken to mitigate them. Our internal control encompasses various managementsystem structures of organisation standard and code of conduct which all put togetherhelp in managing the risks associated with the Company.
24. AUDIT COMMITTEE
As on 31st March 2019 the Audit Committee of the Board of Directors of the Companycomprises of 3 (three) members namely:
1. Mr. Bharat Sugnomal Bhatia
2. Mr. Rameshchand Garg - [CHAIRMAN]
3. Mr. Vasant Gaurishankar Joshi
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Audit committee defines the scope and authority of theInternal Auditor. The Audit Committee comprises of professionally qualified Directors whointeract with the statutory auditors internal auditors and management in dealing withmatters within its terms of reference. Your Company has a proper and adequate system ofinternal controls. These controls ensure transactions are authorized recorded andreported correctly and assets are safeguarded and protected against loss from unauthorizeduse or disposition.
26. ESTABLISHMENT OF VIGIL MECHANISM
The Company's vigil mechanism /Whistle blower Policy aims to provide the appropriateplatform and protection for Whistle blowers to report instances of any actual or suspectedincidents of unethical practices violation of applicable laws and regulations includingthe Integrity Code Code of Conduct for Prevention of Insider Trading in Securities Codeof Fair Practices and Disclosure. All employees and Directors have access to theChairperson of the Audit Committee. Company investigates such complaints speedilyconfidentially and in an impartial manner and take appropriate action to ensure that therequisite standards of professional and ethical conduct are always maintained.
The Vigil Mechanism/Whistle Blower Policy is available on the website of the Company www.cteil.com
27. CORPORATE GOVERNANCE
A report on Corporate Governance along with a certificate from Practicing CompanySecretary of the Company confirming of corporate governance requirements as stipulatedunder Regulation 27 of SEBI (LODR) Regulations forms part of this Annual Report.
28. DISCLOSURES UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
The Company has in place Anti Sexual Harassment Policy in line with the requirements ofThe Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013. The company has provided a safe and dignified work environment for employeewhich is free of discrimination. The objective of this policy is to provide protectionagainst sexual harassment of women at workplace and for redressal of any such complaintsof harassment.
Pursuant to requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder it ishereby declared that the Company has not received any complaint of sexual harassmentduring the year under review.
29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOAS STIPULATED UNDER SECTION 134(3) (M) OF THE COMPANIES ACT 2013 READ WITH RULE 8 OF THECOMPANIES (ACCOUNTS) RULES 2014
a) Conservation of Energy
Technology up gradation modernization and the introduction of control instrumentationare practiced realizing the full potential of energy conservation in our organization. TheCompany does a continual improvement for optimum utilization of resources to ensureminimize consumption of energy water natural resources while maximizing productionvolumes in eco friendly manner.
b) Technology Absorption
Your Company has not imported any technology for manufacture of textiles yarn orplastic crates.
c) Foreign Exchange Earnings and Outgo
| ||FY 2018-2019 ||FY 2017-2018 |
|Total Foreign Exchange Outgo ||106095 ||NIL |
|Total Foreign Exchange earned (FOB) ||NIL ||NIL |
30. PARTICULARS OF EMPLOYEES
Information as required under the provisions of Section 197 of the Act read with Rules5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are set out in Annexure - V' to the Directors' Report.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.
31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of SEBI (LODR) Regulations is presented in a separatesection forming part of this Annual Report attached as Annexure - VF
32. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING IN SECURITIES
During the year Company has amended the Code of Conduct for Prevention of InsiderTrading in Securities ("Code") in accordance with SEBI (Prohibition of InsiderTrading) Amendment Regulations 2018 which is effective from April 01 2019. The amendedCode is uploaded on the website of the Company. The objective of the Code is to protectthe interest of shareholders at large to prevent misuse of any unpublished pricesensitive information and to prevent any insider trading activity by dealing in shares ofthe Company by its Directors Designated Persons and employees.
Ms. Khushboo Lalit Shah is the Compliance Officer under the Code.
33. REPORTING OF FRAUD BY THE AUDITORS
In case the auditor has sufficient reason to believe that an offence involving fraud isbeing or has been committed against the Company by officers or employees of the Company orby the Company the Auditor shall forward his report to the Committee and the Committeeshall send its reply or observations to the Auditor and such matters shall be reported tothe Board by the committee.
All the properties/ assets including buildings furniture/fixtures etc. and insuranceinterests of the Company are adequately insured.
35. CAUTIONARY STATEMENT
Statements in Annual Report including those which relate to Management Discussion andAnalysis describing the Company's objectives projections estimates and expectationsmay constitute forward looking statements' within the meaning of applicable laws andregulations. Although the expectations are based on reasonable assumptions the actualresults might differ.
The Directors wish to convey their appreciation to all employees for their enormousefforts at the individual level as well as their collective contribution to the Company'sperformance. The Directors would also like to thank the shareholders customers dealerssuppliers bankers Government and all the other business associates for the continuoussupport given by them to the Company and their confidence in management.
| ||For and behalf of the Board of Directors |
| ||Jayesh R Mehta |
| ||(DIN: 00193029) |
| ||Chairman & Managing Director |
|Place: Mumbai || |
|Date: 14th August 2019 || |