The Members of Cineline India Limited
Your Directors have pleasure in presenting their Sixteenth Annual Report together withthe Audited Accounts and Auditors Report of the Company for the Year ended March 31 2018.
1. Financial Results:
|Particulars ||March 31 2018 ||March 31 2017 |
| ||(Rs. in Lacs) ||(Rs. in Lacs) |
|Gross Income ||3235 ||3350 |
|Profit before Interest Depreciation and tax ||2463 ||2620 |
|Interest & Financial Charges ||776 ||836 |
|Depreciation/ Amortisation ||358 ||357 |
|Profit/(loss) before tax ||1329 ||1427 |
|Provision for Tax (including Deferred) ||274 ||375 |
|Profit/(loss) after Tax ||1055 ||1052 |
|Add: Surplus brought forward from previous year ||4526 ||3475 |
|Amount available for ||5581 ||4527 |
|Appropriation || || |
|Appropriation: || || |
|Other comprehensive income / (loss)* ||02 ||(01) |
|Payment of Dividend (Including Tax) ||(169) ||0 |
|Surplus Carried to Balance Sheet ||5414 ||4526 |
* Remeasurement of Post employment benefit obligations.
Note: Figures are regrouped wherever necessary to make the information comparable.
Gross revenues of the Company for Financial year 2017-18 stood at Rs. 3235 Lacs. Profitbefore interest depreciation and taxation Rs. 2463 Lacs. After providing for depreciationand taxation of Rs. 358 Lacs and Rs. 274 Lacs respectively the net profit of the Companyfor the year under review were placed at Rs. 1055 Lacs as against Rs. 1052 Lacs in theprevious year.
Indian Accounting Standards
Indian Accounting Standards the Ministry of Corporate Affairs (MCA) vide itsnotification in the Official Gazette dated February 16 2015 notified the IndianAccounting Standards (Ind AS) applicable to certain classes of companies. Ind AS hasreplaced the existing Accounting Standards prescribed under Section 133 of the CompaniesAct 2013 read with Rule 7 of the Companies (Accounts) Rules 2014. Attention of themembers is drawn to the notification dated February 16 2015 issued by the Ministry ofCorporate Affairs relating to the Companies (Indian Accounting Standards) Rules 2015.Pursuant to the said notification the Company has adopted Indian Accounting Standards(Ind AS) with effect from the year under review. Consequently the financial statementsfor the previous year (FY 16-17) have been restated as per Ind AS to facilitate a like-to-like comparison. The transition date opening balance sheet as at 1st April2016 has also been restated accoradingly.
With a view to conserve the resources for future operations your Directors havethought it prudent not to recommend dividend on equity shares for the financial year2017-18.
3. TRANSFER TO RESERVES:
During the year under review no amount was transferred to General Reserve.
4. SHARE CAPITAL:
The paid up equity share capital as on March 31 2018 was Rs. 14.00 Crores. During theyear under review the Company has neither issued shares with differential voting rightsnor granted stock options nor sweat equity.
Cash and cash equivalents as at March 31 2018 were Rs. 114 Crores. The companycontinues to focus on judicious management of its working capital receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
There is no audit qualification in the financial statements by the statutory auditorsfor the year under review.
6. EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3(a) of Section 134 and subsection (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and
Administration) Rules 2014 the extracts of the Annual Return as at March 31 2018forms part of this report as Annexure 1.
7. SUBSIDIARY COMPANIES:
The Company does not have any Subsidiary Joint Venture or Associate Companies.
8. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Directors' Report.
9. PUBLIC DEPOSIT:
Your Company has not accepted any public deposits within the meaning of Section 73 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
10. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Company has Six (6) Directors consisting of Whole Time Director ManagingDirector Executive Director and Three (3) Independent Directors as on 31.03.2018.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Himanshu Kanakia Managing Director retires byrotation at the forthcoming Annual General Meeting and being eligible offers himself forreappointment. The Board recommends his re-appointment for the consideration of theMembers of the Company at the ensuing Annual General Meeting.
During the year under review there is no change in the Board of Directors of theCompany.
11.2 Key Managerial Personnel:
The following are the Key Managerial Personnel of the Company for the year underreview:
|Sr. No. ||Name of the Person ||Designation |
|1 ||Mr. Himanshu Kanakia ||Managing Director |
|2 ||Mr. Sunil Ranka ||Chief Financial Officer |
|3 ||Mr. Jatin Shah ||Company Secretary |
During the year under review Mr. Jitendra Mehta has resigned as CFO of the Company on16th August 2017 and Mr. Sunil Ranka was appointed as the CFO of the Companyon 7th February 2018. However Mr. Sunil Ranka resigned as CFO of the Companyw.e.f. 16th April 2018.
12. DECLARATION GIVEN BY INDEPENDENT DIRECTOR:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
A calendar of meeting is prepared and circulated in advance to the Directors. Duringthe year Four (4) Board Meetings and Four (4) Audit Committee Meetings were convened andheld. The details of which are given in the Corporate Governance Report which forms partof Annual Report. The intervening gap between the Meetings was within the periodprescribed under the Companies Act 2013 and the SEBI Listing Regulations 2015.
The Company has complied with the Secretarial Standards as applicable to the Companypursuant to the provisions of the Companies Act 2013.
14. DIRECTOR'S RESPONSIBILITY STATEMENT:
The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS) under the historical cost convention on accrual basis except for certainfinancial instruments which are measured at fair values the provisions of the Act (tothe extent notified) and guidelines issued by the Securities and Exchange Board of India(SEBI). The Ind AS are prescribed under Section 133 of the Companies Act 2013 ('theAct') read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 andCompanies (Indian Accounting Standards) Amendment Rules 2016. The Company has adopted allthe Ind AS standards and the adoption was carried out in accordance with applicabletransition guidance. Accounting policies have been consistently applied except where anewly issued accounting standard is initially adopted or a revision to an existingaccounting standard requires a change in the accounting policy hitherto in use.
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a) In the preparation of the annual accounts for the year ended 31-03-2018 theapplicable accounting standards have been followed.
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review.
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
d) The Directors have prepared the annual accounts on a going concern basis.
e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) The Directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.
15. COMPOSITION OF AUDIT COMMITTEE:
The Board has constituted the Audit Committee which comprises of Mr. Kranti SinhaIndependent Director as Chairman and Mr. Rasesh Kanakia Executive Director Mr. UtpalSheth Independent Director Mr. Anand Bathiya Independent Director as the members. Moredetails on the Committee are given in the Corporate Governance Report which forms part ofthis Annual Report.
16. PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Companies Act 2013 and Regulation 4(2) (f) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration Committees. Astructured questionnaire was prepared after taking into consideration inputs received fromthe Directors covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance.
The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors. The Board of Directors expressed theirsatisfaction with the evaluation process based on the recommendation of the Nomination& Remuneration Committee.
Further The Securities and Exchange Board of India ('SEBI') vide circular no.SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated January 05 2017 had come up with a "GuidanceNote on Board Evaluation". The Board Evaluation framework of the Company is alignwith this Guidance Note.
17. FAMILIARIZATION PROGRAMME:
The Company had conducted various sessions during the financial year to familiarizeIndependent Directors with the Company their roles responsibilities in the Company andthe technology and the risk management systems of the Company. Further the Directors areencouraged to attend the training programs being organized by various regulators/bodies/institutions on above matters. Further at the time of appointment of an independentdirector the Company issues a formal letter of appointment outlining his/ her rolefunction duties and responsibilities as a director. The details of such familiarizationprograms and terms and conditions of their appointment are displayed on the website of theCompany ( HREF="http://www.cineline.co.in/">www.cineline.co.in ).
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany has an Internal Control System commensurate with the size scale and complexityof its operations.
The Internal and operational audit is entrusted to M/s Delloite Haskins & Sells areputed firm of Chartered Accountants. Internal controls were reviewed by designated firmand based on their evaluation it was concluded that the Company's internal controls areadequate and were operating effectively as of March 31 2018. The main thrust of internalaudit is to test and review controls appraisal of risks and business processes besidesbenchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Audit Committee of the Board of Directors Statutory Auditors and the SeniorManagement are periodically appraised of the internal audit findings and correctiveactions taken. Audit provides a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans guarantees or provided any security or madeinvestments covered under the provisions of section 186 of the Companies Act 2013 andaccordingly information required to be provided under Section 134 (3) (g) of the CompaniesAct 2013 in relation loans guarantees security or investments covered under theprovisions of section 186 are not applicable to the Company.
20. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. All such Related PartyTransactions are placed before the Audit Committee and the Board for their priorapprovals. During the year the Company had not entered into any new contract /arrangement / transaction with related parties which could be considered material inaccordance with the policy of the company on a materiality of related party transactions.
Particulars of contracts or arrangements with related parties referred to in Section188 (1) of the Companies Act 2013 in the prescribed form AOC-2 and are appended asAnnexure 2 to this report.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company and the link for the same is (HREF="http://www.cineline/">www.cineline . co.in).
21. POLICY ON DIRECTOR APPOINTMENT AND REMUNERATION:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down the criteria for selection and appointment of Board members.The Remuneration Policy forms part of this report as Annexure 3.
22. WHISTLE BLOWER POLICY:
The Company has a whistle blower policy to report genuine concerns or grievances andprovides for adequate safeguards against victimization of Whistle Blower who avail of suchmechanism and also provides for direct access to the Chairman of the Audit Committee inexceptional cases. The functioning of the Vigil mechanism is reviewed by the AuditCommittee from time to time. The Whistle Blower policy has been posted on the Company'swebsite HREF="http://www.cineline.co.in/">www.cineline.co.in
23. RISK MANAGEMENT:
Pursuant to section 134 (3) (n) of the Companies Act 2013 the company has adequaterisk management mechanism and is periodically reviewed by the Board. At present thecompany has not identified any element of risk which may threaten the existence of thecompany.
24. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
Pursuant to section 135 of the Companies Act 2013 the company has constituted aCorporate Social Responsibility Committee and has adopted Corporate Social ResponsibilityPolicy and link for the same is www. cineline.co.in The Report on information required tobe provided under Section 134 (3) (o) of the Companies Act 2013 read with the Rule 9 ofthe Companies (Accounts) Rules 2014 in relation to disclosure about Corporate SocialResponsibility is annexed as Annexure - 4 and forms an integral part of this Report.
25. MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report covering a wide range of issues relatingto Performance outlook etc. is annexed as Annexure-A to this report.
26. CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of the Corporate Governance.The detailed report on Corporate Governance as stipulated under Regulation 34 (3) readwith Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 forms Annexure-B to this report together with a Certificate from the StatutoryAuditors of the Company confirming compliance is annexed as Annexure-C to this report.
27. CERTIFICATION UNDER REGULATION 17(8) OF SEBI LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015
The Certification as required under Regulation 17 (8) read with Part B of Schedule IIof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015certifying that the financial statements do not contain any untrue statement and thesestatements represent a true and fair view of the Company's affairs has been obtained fromthe Managing Director of the Company.
28.1 Statutory Auditors
In terms of the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. Walker Chandiok & Co. LLP CharteredAccountants (ICAI Firm Registration No. 001076N/N500013) the Auditors of your Companyshall hold office till the conclusion of the ensuing AGM and they shall not be eligiblefor re-appointment due to expiry of the maximum permissible tenure as the Auditors of yourCompany. Your Board places on record its deep appreciation for the valuable contributionsof the Auditors during their long association since the inception of your Company andwishes them success in the future.
Your board is under process of appointing new Statutory Auditor of the Company pursuantto completion of tenure of the existing Auditor and is reviewing profiles of various auditfirms. Once there is selection of Statutory Auditor based on the recommendation of theAudit Committee the proposal for their appointment shall be included in the Noticeconvening the Sixteenth AGM for obtaining approval of the Members of the Company.
28.2 Secretarial Audit
Pursuant to Section 204 of the Companies Act 2013 your Company had appointed Mr.Dharmesh Zaveri a Company Secretary in Whole-time Practice having Certificate of PracticeNo. 4363 and Membership No. 5418 as its Secretarial Auditor to conduct the secretarialaudit of the Company for the Financial Year 2017-18. The Company provided all assistanceand facilities to the Secretarial Auditor for conducting their audit. The SecretarialAudit Report is included as Annexure-5 and forms an integral part of this report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
29. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION ORADVERSE REMARKS MADE IF ANY:
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors on the Financial Statements of the Company in their report for thefinancial year ended 31st March 2018.
30. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
Since the Company does not own any manufacturing facility the other particularsrelating to conservation of energy and technology absorption stipulated in the with rule(8)(3) of the Companies (Accounts) Rules 2014 are not applicable to the Company.
The Company has not made any foreign exchange outgo towards traveling marketing andimport of Capital Goods.
31. SEXUAL HARASSMENT DISCLOSURE:
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. An Internal Complaints Committee has been set up to redresscomplaints received regarding sexual harassment. During the year no complaints of sexualharassment were received.
32. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:
Your Company had 28 (including Directors) employees as of March 31 2018. The statementcontaining particulars of employees as required under Section 197(12) of the CompaniesAct 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to the Company as noemployees were in receipt of remuneration above the limits specified in Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The ratio ofthe remuneration of each Director to the median employee's remuneration and other detailsin terms of Section 197(12) of the Companies Act 2013 read along with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure 6 and forms part of this Report.
33. CODE OF CONDUCT:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The Code has been posted on the Company's websiteHREF="http://www.cineline/">www.cineline . co.in.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
34. PREVENTION OF INSIDER TRADING:
The Board of Directors has adopted the Insider Trading Policy in accordance withrequirements of SEBI (Prohibition of Insider Trading) Regulations 2015. The InsiderTrading Policy of the Company lays down guidelines and procedures to be followed anddisclosures to be made while dealing with shares of the Company as well as theconsequences of violation. The Policy has been formulated to regulate monitor and ensurereporting of deals by employees and to maintain the highest ethical standards of dealingin Company Securities.
The Insider Trading Policy of the Company covering code of practices and procedures forfair disclosure of unpublished price sensitive information and code of conduct for theprevention of insider trading is available on the Company's websiteHREF="http://www.cineline.co.in/">www.cineline.co.in .
Your Board takes this opportunity to thank our clients business partnersshareholders and bankers for the faith reposed in the Company and also thank theGovernment of India various regulatory authorities and agencies for their support andlooks forward to their continued encouragement. Your Directors are deeply touched by theefforts sincerity and loyalty displayed by the employees without whom the growth wasunattainable. Your Directors wish to thank the investors and shareholders for placingimmense faith in them and the plans designed for growth of your Company. Your Directorsseek and look forward to the same support in future and hope that they can continue tosatisfy you in the years to come.
| ||For and on behalf of the Board of Directors |
|Date : May 28 2018 ||Rasesh Kanakia |
|Place: Mumbai ||Chairman |