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CIL Nova Petrochemicals Ltd.

BSE: 533407 Sector: Industrials
NSE: CNOVAPETRO ISIN Code: INE672K01025
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VOLUME 80
52-Week high 42.00
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Mkt Cap.(Rs cr) 55
Buy Price 16.50
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CIL Nova Petrochemicals Ltd. (CNOVAPETRO) - Director Report

Company director report

To

The Members

Your Directors take pleasure in presenting the 14TH (Fourteenth) Annual Report onthe business and operations of your Company along with Audited Financial Statements forthe Financial Year ended 31st March 2018.

1. FINANCIAL SUMMARY/HIGHLIGHTS OF PERFORMANCE OF THE COMPANY:

Financial Results

Particulars Year ended 31st March 2018 Year ended 31st March 2017
Sales/Income from operations 25053.23 24775.84
Other Income 213.17 135.19
Total Income 25284.40 24912.03
Total Expense 24605.25 23679.80
Depreciation 515.46 538.66
Profit Before Tax 163.68 693.56
Tax 35.91 195.46
Profit After Tax 127.76 498.10

Previous year figure has been restated as per IND-AS reconciliation of the same isprovided in the notes to the Financial Statements note no. 46

2. PERFORMANCE HIGHLIGHTS:

The total revenue during the year under review was Rs. 25284.40 Lakhs as against Rs.24912.03 Lakhs in the previous year showing an increase of 1.49%. However productivity wasincreased in comparison to previous year production However Profit before tax (PBT) wasRs. 163.68 Lakhs as against Rs. 693.56 Lakhs showing a decrease of 76.4% and profit aftertax (PAT) stood at Rs. 127.76 Lakhs as against Rs. 498.10 Lakhs in the previous yearshowing a decrease of 74.35% due to market situation profit margins were reduced.

3. DIVIDEND:

Your directors have not recommend Divided for this Financial Year as Ploughing back ofprofits will be good strategy for future growth and development of your Company.

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 of Rs. 325000000comprising of 27500000 Equity Shares of Rs.10/- Each and 500000 Preference Shares ofRs.100/- Each. Paid-Up Equity Share Capital of the Company as on date of this reportstands at Rs. 271000000 comprising of 27100000 Equity Shares of Rs. 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 within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

7. FUTURE OUTLOOK:

Polyester filament Yarn Market scenario

In India consumption is increasing year on year basis. Consumption of Polyester fiberis gaining momentum due to factors like fluctuation of Cotton prices increased presence& sourcing by global brands where polyester fiber dominates growth of women's wearsegment growth of value retail etc.

Outlook for polyester as calculated by experts shows that consumption of polyester yarnwill be double to that of cotton by 2020-22. The Untapped opportunity remains in Man MadeFiber (MMF) based product categories which can give an exponential growth to India'sexport of textile and apparel. Consumption of MMF based products will increase in domesticMarket in following Segment:

a. Women's western wear &lingerie-Increasing women participation in work force;

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 uses 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 8 (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:

There were no such material changes occurred subsequent to the close of the financialyear of the Company to which the balance sheet relates and the date of the report whichcan affect the financial position of the Company.

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 in a separate section forming part of the Annual Report.

11. DETAILS OF SIGNIFICANT 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 as on 31stMarch 2018.

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 is appended to this Report as ANNEXURE-II.

15. RELATED PARTY TRANSACTIONS:

All transactions entered into with the Related Parties in terms of Section 2(76) andSection 188 of the Companies Act 2013 read with Regulation 2(zc) and Regulation 23 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 during thefinancial year were in the ordinary course of business and on arm's length basis and donot attract the provisions of Section 188 of the Companies Act 2013. There were noMaterial Related Party Transactions during the year. Thus disclosure in Form AOC-2 is notrequired.

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 2013 the Company has noted thatMr. Pooransingh Mathuria Wholetime Director Mr. Pradip Khandelwal Chief ExecutiveOfficer Mr. Satish Bhatt Chief Financial Officer and Mr. Harsh Hirpara CompanySecretary were the Key Managerial Personnel of the Company for the year ended 31st March2018.

17. DIRECTORS:

In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of Association of the Company Mr. Jyotiprasad Chiripal (DIN: 00155695) retiresby rotation at the ensuing Annual General Meeting and being eligible in terms of Section164 of the Act offers himself for re-appointment.

During the year under the review Mr. Rajendraprasad Shah (DIN: 01982424) had tenderedhis resignation on 13th February 2018.

None of the Directors is disqualified for appointment/reappointment under Section 164of 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 in this AnnualReport. The Board noted the evaluation results that were collated and presented to theBoard.

19. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS:

The Board has on the recommendation of the Nomination & Remuneration Committeeformulated criteria for determining Qualifications Positive Attributes and Independenceof a Director and also a Policy for remuneration of Directors Key managerial Personneland senior management. The details of criteria laid down and the Remuneration Policy aregiven in the Corporate Governance Report. Further the said policy is also available at http://cnpcl.com/corporate-policies/

20. PARTICULARS REGARDING EMPLOYEES REMUNERATION:

The statement containing particulars of employees as required under Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report as Annexure- III.

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 Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility 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 at http://cnpcl.com/

22. CORPORATE SOCIAL RESPONSIBILITY POLICY AND INITIATIVES:

The Company has implemented Corporate Social Responsibility Policy and initiatives asthe provisions of Section 135 of the Act and Rules made thereunder 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 per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 are made and the same is enclosed as Annexure- IV.

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 23 rdSeptember 2017 till the conclusion of ensuing Annual General Meeting.

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.

24. SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethereunder the Company had appointed Mr. Jatin Kapadia Practicing Company Secretaries asSecretarial Auditor of the Company to undertake the Secretarial Audit for the financialyear 2017-18.

The Secretarial Audit Report for financial year 2017-18 issued by Mr. Jatin KapadiaPracticing Company Secretaries has been appended as Annexure - V to this report. Therewere no qualifications or adverse remarks in their Report.

25. COST 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 2017-18. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report.

26. SEXUAL HARRASMENT POLICY:

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy. Duringthe year 2017-18 no sexual harassment complaints has been registered with the Company

27. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM:

Company has implemented an integrated risk management approach through which it reviewsand assesses significant risks on a regular basis to 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 Changesand new capital investments return. The management is however of the view that none ofthe 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 incase any 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 looks for the RiskManagement after dissolution of Risk Management Committee.

The Company has an Internal Control System commensurate with size 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 the internalauditors formulates the scope functioning periodicity and methodology for conducting theinternal audit. The internal auditors carry out audit covering inter alia monitoring andevaluating the efficiency & adequacy of internal control systems in the Company itscompliance with operating systems accounting procedures and policies at all locations andsubmit their periodical internal audit reports to the Audit Committee. Based on theinternal audit report and review by the Audit committee process owners undertakenecessary actions in their respective areas. The internal auditors have expressed that theinternal control system in the Company is robust and effective. The Board has also put inplace requisite legal compliance framework to ensure compliance of all the applicable lawsand that such systems are adequate and operating effectively.

28. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

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://cnpcl.com/corporate-policies/

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 and 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 as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

iii. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 and Rules madethereunder for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities;

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 and that such internal financial controls are adequate and were operatingeffectively and

vi. the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating 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 anddisclosures 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 for the dedicated efforts andcontribution of the employees at all levels as without their focus commitment and hardwork the Company's consistent growth would not have been possible despite thechallenging environment.

For and on behalf of the Board
Sd/-
Pooransingh Mathuria
Place: Ahmedabad Whole Time Director
Date: 14th August 2018 DIN:07430356