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CIL Nova Petrochemicals Ltd.

BSE: 533407 Sector: Industrials
NSE: CNOVAPETRO ISIN Code: INE672K01025
BSE 11:55 | 19 Aug 26.85 0.75
(2.87%)
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27.30

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NSE 05:30 | 01 Jan CIL Nova Petrochemicals Ltd
OPEN 26.65
PREVIOUS CLOSE 26.10
VOLUME 4515
52-Week high 51.00
52-Week low 21.00
P/E 16.17
Mkt Cap.(Rs cr) 73
Buy Price 25.95
Buy Qty 9.00
Sell Price 26.80
Sell Qty 140.00
OPEN 26.65
CLOSE 26.10
VOLUME 4515
52-Week high 51.00
52-Week low 21.00
P/E 16.17
Mkt Cap.(Rs cr) 73
Buy Price 25.95
Buy Qty 9.00
Sell Price 26.80
Sell Qty 140.00

CIL Nova Petrochemicals Ltd. (CNOVAPETRO) - Director Report

Company director report

To

The Members

Your Directors take pleasure in presenting the 16th Annual Report on thebusiness and operations ofyour Company along with Audited Financial Statements for theFinancial Year ended 3151 March 2020.

1. FINANCIAL SUMMARY/HIGHLIGH TS OF PERFORMA NCE OF THE COM PA NY:

Financial Results Rs in Lakhs

Particulars Year ended 31st March 2020 Year ended 31st March 2019
Sales/Income from operations 19629.17 24896.81
Other Income 236.35 017.24
Total Income 19865.52 25114.05
Totai ixpenre 20170.31 25238.73
Depreciation 424.48 465.20
Profit Before Tax (295.50) (124.67)
Tax/Short/ (Excess) Provision of Income Tax 0.00 1.80
Profit After Tax (295.50) (126.47)

2. PERFORMANCE HIGHLIGHTS:

The total revenue during the year under review was Rs 19629.17 Lakhs as against Rs24896.81 Lakhs in the previous year showing a decrease of 21%. However produetinity wasincreased in comparison to previous year production. The Management of the Company istaking efforts for the progress of that Company. The performance of the Company isgradually improving with transient time. The improvement is evident from thefinancial statement of the Company.

3. DIVIDEND:

Due to loss during the year the Company is not able to declare Dividend.

4. RESERVES:

Your Company does not propose to transfer any amount from the current year's profits tothe General Reserve. (Previous year Nil)

5. SHARE CAPITAL:

During the year under review the Company had Authorized Capital of7'325000000comprising of 27500000 Equity Shares of '10/- Each and 500000 Prefeuence Shares af?100/- Each. Paid-Up Eqaity (share Capital of the Company as on date of this report standsat Rs 271000000 comprising of 2710Us000 equity Shares ofRs 10/- Each.

During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.

6. DEPOSITS:

Your Company has not accepted any deposits with me meaning of Section 73 of theCompanies Rct 2013 aad the Companies

(Acceptance of7 Deposits) Rules 2014.

7. FUTURE OUTLOOK:

Increased penetration of orejanized retail sector growing population and rising incomelevels are likely to drive demand for textile products) In India conrumption isincreasing year on year basis. Consnmption of Polyester fiber is gaining momentum due tofactors like fluctuation of Cotton prices increased presence & sourcing by globalbrands where polyester fiber dominates growth of7 women's wear segment growthof value retail etc.

The Government is exuected to announce itn new textile policy with an ambitious targetof achieving 20 pier cocern share of7 the global textile trade and helping thudomestic industry nttain a size of $650 biilion by 2024-25 toy focusing on invest meatskill development and labour law reforms.The policy blueprint termed the 'Vision Strategyand Aciion Plan' or the textiles and apparel industry lays thrust upon diversification oiexports thurogh new products and markets along with increasing value addition andpromoting innovation and R&D.

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Traditionally Indian textile and apparel manufacturing industries have been cottonfocused. Even today cotton has more than a 60 per cent share compared to 40 per centshare globally. But this scenario is changing fast. Manufacturers as well as brands areincreasingly looking towards other fibre options mainly polyester. With the increase inthe' Value Retailing' format in the domestic market and rising demand for syntheticfibre-based products from global brands and retailers demand for polyester is set togrow.

Outlook for polyester as calculated by experts shows that consumption of polyester yarnwill be double to that of cotton lay 202022. As more and more demand for fitness apparelshort fashion cycle requirement of low cost and high performence material for automotiveand industrial use. The Untapped opportunity remains in Man Made Fiber (MMF)based productcategories which can give an exponential growth to India's export of textile and apparel.Consumption of MMF based products will increase in dvmeseic Market in foil owing

Segment:

a. Women's w estern wear & lingerie-increasing women participation in workforce;

b. Active wear-India's large young population base with increasing awareness towardsfitness;

c. Mobiltech products-India's emergences as global automobile manufacturing hub;

d. Work wear/Uniform-Increasing no. of school going children & consciousness ofcorporate towards their image;

e. Hygiene products-Awareness of Indian women for hygiene will cause increasing usen ofhygiene products

To reap maximum benefits of the future scenario India needs focus on manufacturing ofMMF based products .A drastic change is expected in the consumption of polyester yarnshare of which is projected to grow to 53% by 2020-22.

Future course of action:

Looking the scenario of polyester yarn we need to upgrade by innovation increase thevolume integration R&D and branding. Future demand is very promising.

8. PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION EXPENDITURE ON RESEARCHAND DEVELOPMENT FOREIGN EXCHANGE INFLOW/OUTFLOW ETC.:

In accordance with the provisions of Section 134 (3) (m) the Companies Act 2013 readwith Rule 13 (3) Companies (Accounts) Rules 2014 the relevant information pertaining toconservation of energy technology absorption foreign exchange earnings and outgo isgiven in ANNEXURE - I and forms part of this report.

9. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The Covid - 19 pandemic is much more than a health crisis and is having anunprecedentedimpact on people and economic worldwide. As per th e directive of the Central and Stategovernments in the wake of7 Covid t I9pandemictht Company had suspendedoperations with effect from 29rd March 2020 which adversely impacted thebusiness during the last quarter of the year. Though the scenariois grim currentiy it isexpected to show sign of revival from the second half of7 this financial year.

All safety protocols related to Covid - 19 as advised by the Governments beingimplemented and observed at factories and offices af tire Company. The Company continuesto fulfill its obligations with respects to all exciting contrast and agreements asCompany has sufficient stock.

Company does net foresee any material impact on the account ofnon-fulfillment of obligation by any party in existing contracts and agreements.

The Company has also instituted across all its operations focused cost controlprograms and sanctioned on ly necessary va pi tal expenditure to conserve its finance.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As required under Regulation 34 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") the Management Discussion and Analysis Report of the Company for theyear under review is presented ire a separate section forming part of the Annual Report.

N1. DETAILS OF SIGN IF ICANT AND MATERIAL ORDERS:

No such Orders have been passed by the Regulators/Court or Tribunals which can impactthe going concern status and Company's operation in future.

12. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company had no Subsidiary or Joint Ventures or Associate Companies ar on 31stMarch 2020.

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13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENT BY THE COMPANY:

Details of Loans (Guarantees and Investments if any covered under the provisions ofSection 186 of the Act are given in the notes to the Financial Statements.

14. EXTRACTS OF ANNUAL RETURN:

In accordance with Section 134 (3) (a) of the Companies Act 2013 an extract of theAnnual Return in the prescribed format will be available on www.nLcpl.com.

15. RELATED PARTY TRANSACTIONS:

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in its ordinary coarse of business and on an arm' strengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered comreerial in accortince withthe policy of7 the Company on materiality of related party transactions orwhich is required to be reported in Form No. AOC-2 in terms of Section 134(3)(h) read withSection 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules 2ni4.

The Board has formulated Policy on Related Party Transactions detailed policy is alsoavailable at http://cnpcl.com/corporate-policies/

16. KEY MANAGERIAL PERSONNEL:

As required under Section 203 of the Companies Act 2013the Comp.ny has notpd that Mr.Poosansingh MaehuriaWhole-time Director Mr. Pradip Khandelwal Chief Executive OfficerMr. Satish Bhatt Chief Ficancial Officer and Mr. Harsh Hirpara Company Secretary werethe Key Managerial Personnel of the Company for the year ended 31st March2020.

17. DIRECTORS:

In accordance with the provisions of Section 1 h2 ofrthe Companies Acf2013and Articles of Association of the Company Mr. Jyotiprasad Chiripal (DIN: 00155695)retires by rotation atthe ensuing Annual General Meeting and being eligible in termsofSection 164 of the Act offer. himself for re-appointme nt.

None of the Directors is disqualified furture appointment/reappointment under Section164 of the Companies Act 2013 as required by law this position is also reflected in theAuditors' 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.

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.

18. EVALUATION OF BOARD COMMITTEES AND DIRECTORS:

The evaluation of Chairman all the Directors and the Board and Committees thereof as awhole was conducted based on the criteria and frame work adopted by the Board. Theevaluation process has been explained in the Report on Corporate governance inthis Annual Report. The Board noted the evalustion results that were collated andpresented to the Board.

19. POL ICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:

The [Board has on the recommendation odthe Nomination& Remuneration Committeeformulated criteria for determining Qualification Positive Attritutes and Independence ofa Director and also a Policy for remuneration of Directors Key managerial Patsonnel andsenior management. The details cot csiferia laid down and the Remuneration Policy aregivsn in thu Corporate Governance Report. Further the said policy is nls o available athttp://cnpc l.com/co rporatu-solicies/

20. PARTICULARS REGARDING EMPSOYEES REMUNERATION:

The /statement containing particulars of employees as requires under Section 197 112)of7 the Companies Act 2013 read with Rsle 5 (2) of fhe Companies (Appointmontand Remuneration of Managerial personnel) Rules2014formr part of this SSeport as Annexure- II.

21. COMMITTEES OF THE BOARD:

In accordance with the Companies Act 2013 and Listing Regulations the Company hasfollowing Committees in place:

• Audit Committee

• Nomination and Rimunenation Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibilities Committee

Details of the said Committees along with their charters composition and meetings heldduring the financial year are provided in the "Report on Corporate Governance"as a part of this Annual Report. Details of committee is also available athttp://cnpcl.com/

22. CORPORATE SOCIAL RESPONSIBILITY POLICYANDINITIATIVES:

The Company has implemented Corporate Social Responsibility Policy and initiatives asthe provisions of Section 135 of the Act and Rules made there under governing CorporateSocial Responsibility and the same is available at http://cnpcl.com/ and details are alsoavailable in Corporate Governance Report forming part of the Annual Report.

The (disclosures as pier Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 are made and the same is enclosed as Annexure- III.

23. STATUTORY AUDITORS:

M/s.Samir M. Shah & Associates Chartered Accountants (FRN 122377W) were appointedas Statutory Auditors of your Company at the Previous Annual General Meeting held on 23rdSeptember 2017.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. The notes to the accounts referred to in the Auditors' Report areself-explanatory and therefore do not call for any further comments.

There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their Report.

74. SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act 2013 a7d Rules madethere under the Company had appointed M/s. K. Ja tin & Co. Practicing CompanySecretaries as Secretarial Auditor o1 the Company to undertake the Secretarial /audit forthe financial rear 2019-20.

The Secretarial Audit Report for financial year 2019-20 issued by M/o. K. Jatin &Co. Practicing Company Secretaries has been appended as Annexure - IV to this report.There were no qualifications or adverse remarks in their Report.

75. COSC /AUDITORS:

As per the provisions of Section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014 as amended from time to time the Board of Directorsof the Company on recommendation of Audit Committee has appointed M/s. A.G. Tulsian&. Cost Accountants as Cost Auditor of the Company to conduct audit of Cost Accountsof the Company for the Financial Year 2019-20. There has been no qualificationreservation adverse remark or disclaimer given by the Auditars in their Report.

26. SEXUAL HARRASMENT POLICY:

Te Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Work plaoe (Prevention Prohibition& Redressal) Act 2013. Internal Com plans Committee has been setup to redresscomplaints received regarding sexual harassment. All employees are covered under thidpolicy. During the year 2019-20 no sexual harassment commaints has been registered withthe Company.

27. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM:

Company has implemented as integrated risk management approach through which it reviewsand assesses significant risks on a regular basis o help ensure that there is a robustsystem of risk controls and mitigation in place. Senior management periodically reviewsthis risk management framework to keep updated and address emerging challenges. Majorrisks identified for the Company by the management are Compliances of various applicableLaws Regulatory changes Manufacturing & Supply Litigation Technological Changesend new capitalicity investments return. The management is however of the view that noneof the above risks may threaten the existence of the Company as robust Risk mitigationmechanism is put in place to ensure that there is nil or minimum impact on the Company iocase ary of these risks materialize. Further Company had formulated Risk ManagementCommittee also however later on it was dissolved as separate Committee for the same wasnot required considering the size of your Company So Audit Committee lno Us for the RiskManagement after dissolution of Risk Management Committee.

The Company has an Internal Control System commensurate with rize scale andcomplexity of its operations. The internal financial controls are adequate and areoperating effectively so as to ensure orderly and efficient conduct of businessoperations. The Company has appointed M/s. Jhaveri Shah and Co. Chartered Accountants asan Internal Auditors of the Company. the Audit Committee in consultation with tireinternal auditors formulates the scope functioning periodicity and methodology forconducting the internal audit. The internal auditors carry out audit covering inter aliamonitoring and evaluating she efficiency & adequacy of internal controlsystems in the Company its compliance with operating systems accoucting pronedures andpolicies at all locations and submit their periodical internal audit reports to the AuditCommittee. Based on thk internal audit report and review by the Audit committen processowners undertake necessary actions in their respective areas. The internal auditors haveexpressed that the internal control the Company is robust and effective. The Board hasalso put in place requisite legal compliance framework to ennure compliance of all theapplicable laws and that such systems are adequate and operating effectively.

28. VIGIL MECHANISM/WHISTLE BLOWERPOLICY:

The Company has a Whistle Blower Policy to report genuine concerns and grievances.Details Whistle Blower Policy has been mentioned in the Report of Corporate Governancethe same is available at http://Enpctcom/corporate-potcies/

29. DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of clause (c) of sub-section (3) of Section 134 ofthe Companies Act 2013 and to the best of their knowledge belief and according to theinformation and explanations obtained by them your Directors state that-

i. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

ii. the Directors have selected such accounting) policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so an to give a true andfair view ofthe state of affairs of the Company at the end of the financial year and of t0

iv. the directors had prepared the annual accounts on a going concern basis;

v. the directors had laid down internal financial controls to be followed by thecompany 0and that such internal financial the controls are adequate and were operatingeffectivelyand000

vi. the directors had device proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operation fining) effectively.

30. CORPORATE GOVERNANCE:

As required by Schedule V(C) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a detailed report on Corporate Governance is given as apart of the Annual Report. The Company is in full compliance with the requirements an ddisclosures that have to be made in this regard. The Secretarial Auditors' Certificate ofthe compliance with Corporate Governance requirements by the Company is attached to theReport on Corporate Governance.

31. GENERAL SHAREHOLDER INFORMATION:

General Shareholder Information is given in Report on Corporate Governance forming partof the Annual Report.

32. ACKNOWLEDGEMENTS:

Your Directors wish to express their grateful appreciation for the co-operation andsupport received from Government Customers Shareholders Financial institutions Banksand the Society at large. Deep appreciation is also recorded or the dedicated efforts andcontribution of the employees at all levels as with out their focus is commitment andhard work the Companys consistent growth would not have been possible despite thechallenging environment.

For and on behalf of the Board

SP/- Pooransingh Mathuria Whole Time Director DIN:07430356
Pla ce: A hmedabad Date: 14th September 2020

CONSERVATION OF ENERGY/ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. CONSERVATION OF ENERGY:

i. The Steps taken or impact on conservation of energy:

• Company has started using fuel efficient Coal instead of Lignite and Local Coaland this will in-turn reduce the fuel and maintenance c ost of the Company.

• Replaced old Fork lifter used for unloading raw material to save diesel.

• Improved utilization of Power Plant resulting in a rise of generated unit by10%o.

ii. Tiie Steps taken by the Company for utilizing alternate sources ofenergy:

• Compaay is now using fuel efficient Coal instead of Lignite agdlocal fuel bywhich fuel as well as power consumption of the company is reduced.

iii. The Capital investment on energy conservation equipment: Separate Shed leas beenestablished for storing the fuel efficient Coal by this Coal will remain dry during therain and will be protected from moist and so efficiency of the Plant and Machinery willbe maianained.

B. TECHNOLOGY ABSORdTION:

i. The efforts made towards technology absorption:

Company has started to use fuel efficient Coal this will directly have positive effecton durability of Boiler and Coal Plant so deterioration of the same will be reduced.

Fu rtheeCompany has done capital expenditure in Machinery and Compa nyis p I armingfor standbyequipment in utilityand power generation.

ii. Benefits derived like Product Improvement Cost Reduction Product Development orimport Substitution:

• As company is using fuel efficient Coal so overall Cost of Prodnction will bereduced .

• Company has developed unique products like POY Danniers 32/1425*14 and 212/14during the; year. Further these products are rarely produced in India and response fromthe marked is overwhelming soyour Company is planning accordingly.

s Comnanyduring the year established Paper Tube Plant forcaptiae use oflhe same red forselling it to the outside parties and

this will lead to;

a) Consistency in Quality of Packing Material;

b) Revenue will be increased and

c) Cost of Production will be decreased and this will lead to increase in profitmargins of the Company.

iii. In case of Imported Technology (imported during the last 3 years reckoned from thebeginning of the fi nan cial year) - Not

Applicable

iv. The expenditure incurred in Research and Development: Company has done expenditurein testing equipmentin order to have check in quality of the product and maintain thesame.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Details of foreign exchange earnings and outgo are given in the notes to the FinancialStatements.

ANNEXURE - II TO THE DIRECTORS REPORT

Die tails pertaining to remuneration as required underSection 197(12) ofth e CompaniesAct 2013 read with Rule 5H) ofthe Companies (Appointmentand Remuneration ofManagerialPersonnel) Rules 2014:

i. The ratio of the remuneration of each Director to the Median Rtmuneration of theyEmployees of the Company for the Financial Year 2019-20and

ii. The percentage increare it remuneratirn of7each Dirattor ChiefFinancier! Officer Chief Executive Offiter Company Secretary or Manager if any in theFinancial Year

(Rs in Lakhs)

Sr. No. *Name of Director/KMP and its Designation Remuneration to the Director/KMP forthe Financial Year 2019-2020 Remun eration ter the Director/KMP for the Financial Year 2018-201*) Percentage increase/decre ase in remuneration m the Financial Year 2019-2020 Ratio or Rem uneration of each Director to the Median Remuneration of Employees
1. Mr. Jyotiprasad Chiripal Director and Chairman -- -- -- --
2. Mr. Pooran Singh Mathata Whole-time Director i 7.84 17.54 1.71 5.68
3. Mr. Pradip Khandelwal Chief Executive Officer 34.11 32.17 6.30 10.86
4. Mr. Satish Bhatt Chief Financial Officer 10.96 10.95 0.18 3.49
5. Mr. Harsh Hirpara Company Secretary 4.88 4.85 0.62 1.55

* Only Sitting Fees is paid to Independent Directors.

iii. The Median Remuneration of Employees (MRE) of the Company is Rs 314228 for theFinancial Year 2019-12020. The MRE for the year increased by Rs 118057 as compared to Rs196170 during the previous financial year.

iv. The number of permanent employees on the rolls of the Company is 386 for the yearended 31st March 2020.

v. Average percentage increase made in the salaries of employees other than themanagerial personnel in the last Financial Year was approx. 9.40%. Managerial Remunerationwas not increased during the year under consideration the increase in remuneration isdetermined based on the performance by the employees ofthe Company.

vi. It is hereby affirmed that the remun eration paid is as per the Remuneratio nPolicy of the Company. The ratio ofthe remuneration ofthe highest paid director and otherdetails of the employees who are not directors but received remuneration in excess ofthehighest paid di-ector during the year is as below;

For and on behal0 of the Board

Sd/- Pooransingh Mathuria WholeTime Director DIN: 074303156
Place: Ahmedabbd Date: 14th September 2020

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