The Members of Cineline India Limited
Your Directors have pleasure in presenting their Seventeenth Annual Report togetherwith the Audited Accounts and Auditors Report of the Company for the Year ended March 312019.
1. FINANCIAL RESULTS:
|Particulars || ||Standalone ||Consolidated |
| || ||(Rs. In Lacs) ||(Rs. In Lacs) |
| ||March 31 2019 ||March 31 2018 ||March 31 2019 |
|Gross Income ||3493.94 ||3234.53 ||3493.94 |
|Profit before Interest Depreciation and tax ||2678.32 ||2462.45 ||2677.61 |
|Interest & Financial Charges ||961.53 ||775.89 ||961.53 |
|Depreciation/ Amortisation ||364.23 ||358.03 ||364.23 |
|Profit/(loss) before tax ||1352.56 ||1328.53 ||1351.85 |
|Provision for Tax (including Deferred) ||366.97 ||273.72 ||366.97 |
|Profit/(loss) after Tax ||985.59 ||1054.81 ||984.88 |
|Add: Surplus brought forward from previous year ||5413.49 ||4525.50 ||5413.49 |
|Amount available for Appropriation ||6399.08 ||5580.31 ||6398.37 |
|Appropriation: || || || |
|Other comprehensive income / (loss)* ||(0.32) ||1.68 ||(0.32) |
|Payment of Dividend (Including Tax) ||- ||(168.50) ||- |
|Surplus Carried to Balance Sheet ||6398.76 ||5413.49 ||6398.05 |
Note: : Figures are regrouped wherever necessary to make the information comparable
Gross revenues of the Company for the Financial Year 2018-19 stood at Rs. 3493.94 Lacs.Profit before interest depreciation and taxation stood at Rs. 2678.32 Lacs. Afterproviding for depreciation and taxation of Rs. 364.23 Lacs and Rs. 366.97 Lacsrespectively the net profit of the Company for the year under review were placed at Rs.985.59 Lacs as against Rs. 1054.81 Lacs in the previous year.
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 year2018-19.
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 2019 was Rs. 1400 Lacs. 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 2019 were Rs. 2213.18 Lacs. 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 2019 forms part of thisreport as Annexure 1.
The same has been placed on the website of the Company and can be accessed atwww.cineline.co.in
7. SUBSIDIARY COMPANIES:
Your Company has invested in a wholly owned subsidiary being "Transquare RealtyPrivate Limited" on 11th February 2019. There are no associatecompanies or joint venture companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act").
Pursuant to the provisions of Section 129(3) of the Act a statement containing thesalient features of financial statements of the Company's subsidiary in Form AOC-1 formspart of this report as Annexure 2.
Further pursuant to the provisions of Section 136 of the Act the financial statementsof the Company consolidated financial statements along with relevant documents andseparate audited financial statements in respect of subsidiary are available on thewebsite of the Company at www.cineline.co.in
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 Director's 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 31.03.2019.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Mr. Rasesh Kanakia Chairman retires by rotation atthe forthcoming Annual General Meeting and being eligible offers himself forre-appointment. The Board recommends his re-appointment for the consideration of theMembers of the Company at the ensuing Annual General Meeting.
During the financial year 2018-19 there is no change in the Board of Directors of theCompany.
Further pursuant to Regulation 17(1A) of SEBI (Listing Obligation and DisclosureRequirements) 2015 notified vide Notification No: SEBI/LAD-NRO/GN/2018/10 dated 9th May2018 directorship of Mr. Kranti Sinha as NonExecutive Independent Director has beendiscontinued with effect from 1st April 2019.
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. Vipul Parekh* ||Chief Financial Officer |
|3 ||Mr. Jatin Shah ||Company Secretary |
*During the year under review Mr. Sunil Ranka resigned as CFO of the company witheffect from 16th April 2018 and Mr. Vipul Parekh was appointed as CFO of thecompany with effect from 12th October 2018.
12. DECLARATION GIV EN 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.
INDEPENDENT DIRECTORS' MEETING
The Independent Directors met on 13th February 2019 inter alia to
a) review the performance of the Non-Independent Directors and the Board of Directorsas a whole;
b) review the performance of the Chairman of the Company taking into account the viewsof Executive Directors and Non-Executive Directors
c) assess the quality content and timeliness of the flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform its duties
During the year the Board met 5 (Five) times. The details of which are given in theCorporate Governance Report which forms part of Annual Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013 and the SEBI(Listing Obligation & Disclosure Requirements) Regulations 2015.
14. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has complied with the applicable mandatory Secretarial Standards issued bythe Institute of Company Sectaries of India.
15. 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 31-03-2019 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.
16. COMMITTIES OF THE BOARD:
The Board of Directors of your Company has constituted various Committees as follows:
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Risk Management Committee
The details with respect to the composition powers roles terms of reference numberof meetings held attendance at the meetings etc. of Statutory Committees are given indetail in the Corporate Governance Report.
17. AUDIT COMMITTEE:
The Audit Committee of the Board has been constituted in terms of SEBI (ListingObligation & Disclosure Requirements) Regulations 2015 and Section 177 of theCompanies Act 2013. The constitution and other relevant details of the Audit Committeeare given in the Corporate Governance Report. All the recommendations made by the AuditCommittee were accepted by the Board of Directors.
18. 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 aligningwith this Guidance Note.
19. FAMILIARIZATION PROGRAMME:
The Familiarization Programme seeks to update the Independent Directors on variousmatters covering
Company's strategy business model operations organization structure finance riskmanagement etc. It also seeks to update the Independent Directors with their rolesrights responsibilities duties under the Companies Act 2013 and other statutes.
The policy and details of familiarization programme imparted to the IndependentDirectors of the Company is available at www.cineline.co.in
20. 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 a reputed firm of Chartered Accountants. Internal controls were reviewed bydesignated firm and based on their evaluation it was concluded that the Company'sinternal controls are adequate and were operating effectively as of March 31 2019. Themain thrust of internal audit is to test and review controls appraisal of risks andbusiness processes besides benchmarking 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 apprised of the internal audit findings and corrective actionstaken. 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.
21. STOCK OPTIONS:
Your Company does not have any stock options scheme.
22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS :
Particulars of loans given and of the investments made by the Company as at 31stMarch 2019 are given in the Notes forming part of the Financial Statements. During theFinancial Year under review the Company made investment in 10000 equity shares of Rs.10/- each of Transquare Realty Private Limited being the 100% subsidiary of the Company.
23. RELATED PARTY TRANSACTIONS:
In line with the requirements of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 your Company has formulated a Policy onRelated Party Transactions which is available on Company's website at www.cineline.co.in.This policy deals with the review and approval of related party transactions. The Board ofDirectors of the Company has approved the criteria for giving the omnibus approval by theAudit Committee within the overall framework of the Policy on Related Party Transactions.
Omnibus approval was obtained for related party transactions which are of repetitivenature and entered in the ordinary course of business and at arm's length basis. Pursuantto Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 all related party transactions were placed before the Audit Committeeon a quarterly basis specifying the nature value and terms & conditions of thetransactions for their review and approval.
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. During the year theCompany had not entered into any new contract / arrangement / transaction with relatedparties which could be considered material in accordance with the policy of the company ona materiality of related party transactions. Particulars of contracts or arrangements withrelated parties referred to in Section 188(1) of the Companies Act 2013 in theprescribed form AOC-2 and are appended as Annexure 3 to this report.
24. 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 4.
25. WHISTLE BLOWER POLICY:
Your Company has formed a Whistle Blower Policy for establishing a vigil mechanism fordirectors and employee to report genuine concerns regarding unethical behaviour andmismanagement if any. The said mechanism also provides for strict confidentialityadequate safeguards against victimization of persons who use such mechanism and makesprovision for direct access to the Chairperson of the Audit Committee in appropriatecases. No personnel have been denied access to the Audit Committee pertaining to theWhistle Blower Policy. The Whistle Blower policy has been posted on the Company's websitewww.cineline.co.in
26. RISK MANAGEMENT:
Pursuant to Section 134(3)(n) of the Companies Act 2013 the Company has adequate riskmanagement mechanism and is periodically reviewed by the Board. At present the Company hasnot identified any element of risk which may threaten the existence of the Company.
27. 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 of theCompanies (Accounts) Rules 2014 in relation to disclosure about Corporate SocialResponsibility is annexed as Annexure - 5 and forms an integral part of thisReport.
28. 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.
29. 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) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms Annexure-B to this report. A Certificate from the Practising CompanySecretary confirming compliance
of the conditions of Corporate Governance as stipulated under Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed as Annexure-Cto this report.
30.1 Statutory Auditors
Based on the recommendations of the Audit Committee and the Board members of theCompany at the Sixteenth AGM held on September 27 2018 have approved the appointment ofM/s. Khimji Kunverji & Co. Chartered Accountants (Firm Registration No. 105146W) asthe Statutory Auditors of the Company for a period of five consecutive years i.e. till theconclusion of Twenty-First AGM. The requirement of ratification of appointment ofStatutory Auditors at every AGM has been omitted pursuant to Companies (Amendment) Act2017 notified on May 07 2018. Thus M/s. Khimji Kunverji & Co. will continue to holdoffice till the conclusion of Twenty-First AGM of the Company.
The Auditor's Report on Standalone and Consolidated Ind AS financial statements is apart of this Annual Report. There has been no qualification reservation adverse remarkor disclaimer given by the Auditors in their Report.
During the year the Statutory Auditors had not reported any matter under Section143(12) of the Companies Act 2013. Therefore no detail is required to be disclosed underSection 134(3)(ca) of the Companies Act 2013.
30.2 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 2018-19. The Company provided all assistanceand facilities to the Secretarial Auditor for conducting their audit. The SecretarialAudit Report is included as Annexure-6 and forms an integral part of this report.The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
During the year the Secretarial Auditors had not reported any matter under Section143(12) of the Companies Act 2013. Therefore no detail is required to be disclosed underSection 134(3)(ca) of the Companies Act 2013.
31. 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 2019.
32. 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.
33. 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 by the Company and hence there are no Complaints pending as on 31stMarch 2019.
34. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:
Your Company had 28 (including Directors) employees as of March 31 2019. 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 7 and forms part of this Report.
35. 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/ behaviours of any form and the Board has laid down thedirectives to counter such acts. The Code has been posted on the Company's websitewww.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.
36. 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 website www.cineline.co.in
The Board has approved and adopted revised Code of Conduct for prohibition of InsiderTrading and Code for fair Disclosure pursuant to the requirements of SEBI (Prohibition ofInsider Trading) (Amendment) Regulation 2018 with effect from 1st April 2019.
37. APPLICABILTIY OF COST RECORDS:
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 the activity of your Company falls under Nonregulatedsectors and hence maintenance of cost record is not applicable to the Company for theFinancial Year 2018-19.
Your Company has been able to perform better with the continuous improvement in allfunctions and areas which coupled with an efficient utilization of the Company's resourcesled to sustainable and profitable growth of the Organization. Your Directors express theirdeep sense of appreciation and extend their sincere thanks to every employee andassociates for their dedicated and sustained contribution and they look forward thecontinuance of the same in future.
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 |
| ||Rasesh Kanakia |
| ||Chairman |
| ||(Din: 00015857) |
|Date: May 09 2019 || |
|Place: Mumbai || |