You are here » Home » Companies » Company Overview » Classic Electricals Ltd

Classic Electricals Ltd.

BSE: 512213 Sector: Others
NSE: N.A. ISIN Code: INE02BR01017
BSE 05:30 | 01 Jan Classic Electricals Ltd
NSE 05:30 | 01 Jan Classic Electricals Ltd

Classic Electricals Ltd. (CLASSICELECTRIC) - Director Report

Company director report

Dear Members

The Board of Directors are pleased to present the Company's Thirty Fourth Annual Reportand the Audited Financial Statement for the financial year ended March 31 2019.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2019 is summarizedbelow:

(Rupees in Lakhs)
2018-19 2017-18
Revenue from Operations 47.48 89.92
Less: Expenses
- Employee benefits Expenses 6.70 5.57
- Depreciation and amortization 5.84 6.51
- Other Expenses 22.43 17.98
- Finance Cost 1.08 -
Total Expenses 36.05 30.07
Profit/ (Loss) before Tax 11.43 59.85
Tax Expenses
- Current Tax 2.20 11.41
- MAT Entitlement/ Set off 0.39 (7.87)
- Deferred Tax (1.50) 0.81
- Earlier years (0.09) (0.18)
Net Profit after Tax carried Forward 10.43 55.68

RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY

The Company has earned profit of Rs. 10.43 Lakhs for the year ended March 31 2019against profit of Rs. 55.68 Lakhs in the previous year.

MATERIAL CHANGES AFFECTING THE COMPANY

There are no material changes and commitments have occurred after the close of thefinancial year till the date of this report which affect the financial position of theCompany.

DIVIDEND AND TRANSFER TO RESERVE

The Board of Directors of your company after considering holistically the relevantcircumstances has decided that in order to conserve the financial resources for the longterm needs of the Company it would be prudent not to recommend any Dividend and noamount is transferred to Reserves for the financial year 2018-19.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31 2019 stood at Rs. 14852100/-divided into 1485210 Equity Shares of Rs. 10/- each. During the year under review theCompany has not issued shares or convertible securities or shares with differential votingrights nor has granted any stock options or sweat equity or warrants. As on March 312019 none of the Directors of the Company hold instruments convertible into Equity Sharesof the Company.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors' and ‘General Meetings' respectivelyhave been duly followed by the Company.

DIRECTOR'S RESPONSIBILITY STATEMENT

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2019 and of the profitand loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the 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 have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions that were entered into during the financial year endedon March 31 2019 were on an arm's length basis and in the ordinary course of businessunder Section 188(1) of the Act and the Listing Regulations.

However there was a transactions in the ordinary course of business in the previousyear which was at arm's length basis as defined under section 188 of the Companies Act2013 still the board seeks approval of the shareholders by way of abundant caution andfor good corporate governance. All the relevant details of the said transaction have beenfilled in AOC-2 which is enclosed as Annexure - II and forms part of this director'sreport. There were no materially significant Related Party Transactions made by theCompany during the year that would have required Shareholder approval under the ListingRegulations.

Your Directors draw attention of the members to Note 26 to the financial statement incompliance with the provision of Section 134(3)(h) of the Companies Act 2013 and whichsets out related party disclosures in accordance with the Ind AS - 24 issued by theInstitute of Chartered Accountants of India.

All Related Party Transactions are placed before the Audit Committee for approval.Omnibus approval was obtained on a yearly basis for transactions which are of repetitivenature. Transactions entered into pursuant to omnibus approval are verified and astatement giving details of all Related Party Transactions are placed before the AuditCommittee and the Board for review and approval.

DEPOSITS

During the year under review the Company has not accepted any deposits within themeaning of Sections 73 and 74 of the Companies Act 2013 read with Chapter V of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014(including any statutory modification(s) or re enactment(s) for the time being in force)hence there is no details to disclose as required under Rule 8(5)(v) and (vi) of theCompanies (Accounts) Rules 2014.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As the Company does not fulfill the criteria specified in Section 135 of the CompaniesAct read with Rule 3 of the Companies (Corporate Social Responsibility Policy) Rule 2014(CSR Rules) CSR provisions are not applicable to the Company.

RISK MANAGEMENT

The Risk Management Policy has been framed implemented and monitored. Major riskidentified by the businesses and functions are systematically monitored through mitigatingactions on continuing basis.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate financial control with reference to financialstatements. During the year such controls were tested and no reportable materialweaknesses in the designed operations were observed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152 of the Companies Act 2013 readwith the Companies (Appointment and Qualification of Directors) Rules 2014 and theArticles of Association of the Company Shri. Rajesh Hirji Shah Managing Directorretires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment. The Nomination and Remuneration Committee has recommended hisre-appointment.

The brief resume of the Directors and other related information has been detailed inthe Notice convening the AGM of your Company. Your Directors recommends his re appointmentas Executive Director of your Company for the consideration of the Members of the Companyat the forthcoming Annual General Meeting.

In terms of Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Ms. Rupali Dhiman has been appointed as Company Secretary andCompliance Officer of the Company with effect from 01st November 2018. The above said Ms.Rupali Dhiman is not related with any of the Directors of the Company.

The Independent Directors of your Company namely Mr. Sunil Hirji Shah and Mr. DhaneshVipin Parikh holds office upto 31st March 2020 and are not liable to retire by rotation.

Mr. Rajesh Hirji Shah Managing Director and Mr. Sunil Hirji Shah CFO are the KeyManagerial Personnel of your Company in accordance with the provisions of Sections 2(51)203 of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 (including any statutory modification(s) or reenactment(s) for the time being in force).

Declaration by Independent Directors:

All Independent Directors have given declarations to the effect that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 readwith Regulation 16 of SEBI (Listing obligations and Disclosures Requirements) Regulations2015. In the opinion of the Board Independent Directors fulfil the conditions specifiedin the Act Rules made there under and Listing Regulations.

Evaluation of Board's Performance:

The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy.

The detailed programs for familiarization of Independent Directors with the Companytheir roles rights and responsibilities in the Company nature of the industry in whichthe Company operates business model of the Company are being discussed.

The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on report on evaluation received fromrespective Committees.

The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors. Pursuant to the provisions ofthe Companies Act 2013 read with the Rules issued there under and the Listing Regulations(including any statutory modification(s) or re enactment(s) for the time being in force)the process for evaluation of the annual performance of the Directors / Board / Committeeswas carried out.

In a separate meeting of Independent Director's performance of non-independentdirectors performance of the board as a whole and performance of the chairman wasevaluated taking into account the view of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the Board its committees and individualdirectors was also discussed. Performance evaluation of independent directors was done bythe entire board excluding the independent directors being evaluated.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

M/s. N. B. Purohit & Co. Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 29th September2017 for a term of five consecutive years. They have confirmed that they are notdisqualified from continuing as Auditors of the Company. As per the provisions of Section139 of the Companies Act 2013 the appointment of Auditors is required to be ratified bythe members at every Annual General Meeting.

In accordance with Companies Amendment Act 2017 enforced on 7th May 2018by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part ofthis report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.

Secretarial Auditor

The Board has appointed M/s. D. Kothari & Associates Practicing Company Secretaryto conduct the Secretarial Audit for the financial year ended 2018-19. The SecretarialAudit report for the financial year ended March 31 2019 is annexed herewith and marked asAnnexure I to this report.

Regarding the observations in the Secretarial Audit Report directors wish to clarifythat due to financial constraints economic reasons and administrative difficultiesEquity Shares of the Company are in process of getting demat and company has during theFinancial year had appointed M/s. Purva Share Registry India Private Limited as theirRegistrar and Transfer Agent. Consequently the Company is now able to provide &conduct e-voting besides the share are not traded as also the floating stock of thepublic holding is very meager. The management has taken steps to comply the requiredcompliances within the constraints mentioned herein as soon as possible.

DISCLOSURES

(a) Meetings of the Board:

Four meetings of the Board of Directors were held during the year on the followingdates i.e. 30/5/2018 14/08/2018 14/11/2018 14/02/2019.

(b) Constitution Of Committees:

(1) Audit Committee:

The Company has constituted Audit Committee which comprises of following directorsnamely:

Mr. Dhanesh Vipin Parikh Chairman & Independent Director

Mr. Sunil Hirji Shah Independent Director

Mrs. Julie Mehul Shah Non Independent Director

All the recommendations made by the Audit Committee were accepted by the Board.

(2) Nomination & Remuneration Committee:

The Company has constituted the Nomination & Remuneration Committee of the Board isconstituted to formulate and recommend to the Board from time to time a compensationstructure for Managing Directors / Whole-time Directors and Managerial Personnel of theCompany. The nomination and Remuneration Committee comprises following directors namely:Mr. Dhanesh Vipin Parikh Chairman & Independent Director Mr. Sunil Hirji ShahIndependent Director Mrs. Julie Mehul Shah Non Independent Director

(3) Stakeholders Relationship Committee:

The Company has constituted stakeholders Committee comprises of following directorsnamely:

Mr. Dhanesh Vipin Parikh Chairman & Independent Director

Mr. Sunil Hirji Shah Independent Director

Mrs. Julie Mehul Shah Non Independent Director

(c) Remuneration and Nomination Policy:

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.The Policy broadly lays down the guiding principles philosophy and the basis for paymentof remuneration to Executive and Non-executive Directors Key Managerial Personnel SeniorManagement and other employees. The policy also provides the criteria for determiningqualifications positive attributes and Independence of Director and criteria forappointment of Key Managerial Personnel / Senior Management and performance evaluationwhich are considered by the Nomination and Remuneration Committee and the Board ofDirectors while making selection of the Annual Report 2018-19 Directors' Reportcandidates.

(d) Vigil Mechanism:

The Company has a robust Vigil Mechanism Policy of the Company which also includesWhistle Blower Policy in accordance with provisions of the Act and Listing Regulations.The Vigil Mechanism is supervised by an Ethics and Compliance Task Force comprising seniorexecutives of the Company. Protected disclosures can be made by a whistle-blower throughan e-mail or dedicated telephone line or a letter to the Task Force or to the Chairman ofthe Audit Committee.

(e) Particulars of Loans given Investments made Guarantees given and Securitiesprovided:

The full details of loans given investments made guarantees given have been providedin the notes to the financial statement for the year ended 31st March 2019.The Company has not provided any security during the year.

(f) Conservation of Energy technology absorption:

The Company is not engaged in manufacturing process. Wherever possible the Company hastaken steps to conserve energy.

The Company has not taken any technology domestically nor imported any technology andhence furnishing the details required doesn't arise.

(g) Foreign Exchange Earnings and Outgo:

1) Foreign exchange earnings: NIL

2) Foreign exchange outgo : NIL

(h) Extract of Annual Return:

Pursuant to section 92(3) of the Companies Act 2013 (‘the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return inprescribed Form No. MGT - 9 is annexed as Annexure III and forms part of this report.

The Annual Return of the Company for the year ended 31st March 2019 prepared incompliance with Section 92 of the Companies Act 2013 and related Rules in prescribed FormNo. MGT 7 is placed on the website of the Company and can be accessed at the web link :www.classicelectricals.co.in.

(i) Particulars of employees and related disclosures:

The total number of permanent employee as on 31/3/2019 was 2. The Company has not paidany remuneration to Whole-time Director / Managing Director and hence the question offurnishing information regarding ratio of remuneration of each director to the medianremuneration of the employees of the Company is not applicable. There was no remunerationpaid to any director and hence furnishing the details regarding the comparison ofremuneration of the Key Managerial remuneration against company performance and percentileincrease key parameters for variable components is not applicable.

Market Capitalization as on 31/3/2018 Rs. 230.20 Lacs
Market Capitalization as on 31/3/2019 Rs. 230.20 Lacs
There is no change in market capitalization
PE ratio as on 31/3/2018 Rs. 4.13
PE ratio as on 31/3/2019 Rs. 22.14

The Company does not have any employee whose particulars are required to be disclosedin terms of the provisions of Section 197(12) of the act read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 hencefurnishing of the same does not arise.

(j) Significant And Material Orders Passed By The Regulators Or Courts:

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.

(k) Reporting of Frauds:

There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.

(l) Prevention of Sexual Harassment in the Company:

The Company values the dignity of individuals and strives to provide a safe andrespectable work environment to all its employees. The Company is committed to providingan environment which is free of discrimination intimidation and abuse. All employees arecovered under this policy. Your Directors state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (ProhibitionPrevention and Redressal) Act 2013.

(m)General:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as the provisions were not applicable to the company or there were notransactions on these items during the year under review:

- Issue of Equity Shares with differential rights as to dividend voting or otherwise.

- Issue of shares (including sweat equity shares) to employees of the Company.

- The Company does not have any scheme of provision of money for the purchase of itsown shares by the employees or by trustees for the benefit of employees.

- The Company does not have any subsidiaries hence the question of receivingremuneration or commission by the Managing Directors or Whole Time Directors of theCompany from subsidiary does not arise.

- The details of the top ten employees and employees who were drawing remuneration inexcess of limits prescribed under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 read with Section 197 of the Companies Act 2013.

ACKNOWLEDGEMENT

The Board of Directors would like to express the sincere appreciation for theassistance and cooperation received from banks government authorities and members duringthe year under review. The Board of Directors also wish to place on record its deep senseof appreciation for the committed services by the Company's executives staff and workers.

For and on behalf of the Board of Directors
Rajesh Hirji Shah Dhanesh B. Parikh
Managing Director Director
DIN : 00475776 DIN : 00676930
Sunil Hirji Shah Rupali Dhiman
CFO / Director Company Secretary
DIN : 02775683 M. No. : 54968
Place : Mumbai
Date : 26th April 2019.