To the Members
The Board of Directors present the Fi y Third Annual Report of the Company along withthe financial statements for the financial year ended 31 March 2020.
1. FINANCIAL SUMMARY
The financial summary and performance highlights of the Company for the year underreview are as follows:
(Amount Rs. in Lakh)
|Financial Result || |
|Particulars ||2019-20 ||2018-19 |
|Total revenue ||51212.21 ||65149.93 |
|Less: Total Expenditure excluding Depreciation ||48986.09 ||59821.45 |
|Profi t before Depreciation and Tax ||2226.12 ||5328.48 |
|Less: Depreciation ||1167.78 ||1181.95 |
|Add: Excep onal items ||(25.48) ||(2.69) |
|Profi t Before Tax ||1032.86 ||4143.84 |
|Less: Current Tax ||- ||(133.27) |
|Deferred Tax ||(662.74) ||483.56 |
|Net Profit after Tax ||370.12 ||4494.13 |
Previous year's figures have been regrouped/ rearranged wherever considered necessary.
2. FINANCIAL AND OPERATIONAL PERFORMANCE
During the year under review your Company's revenue from opera ons was Rs. 51212.21Lakhs. Further in the Financial Year ended 31st March 2020 the profit before tax (PBT)was Rs. 1032.86 Lakhs as against Rs. 4143.84 in the previous year and profit after tax(PAT) was Rs. 370.12 Lakhs against Rs.4494.13 Lakhs in the previous financial year.
The Company has adopted adequate cost control measures throughout the year and hasbeen aggressive in its quest for new business. This helped to deliver a decent revenuegrowth. Your Company con nues to focus on produc on of quality cables to broaden itscustomer base and to set a benchmark in the compe ve market. With stable government atcentre the long term outlook of cable industry is expected to be favorable driven byPower Sector Reforms Modernization of Railways new Metro Railways and otherInfrastructures Developmental Projects.
3. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TOWHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT AND DETAILS OFSIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING
THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
Board of Directors of the Company are pleased to inform you that the Scheme of Amalgamaon between CMI Energy India Private Limited (Transferor Company) and CMI Limited(Transferee Company) has been approved by the Hon'ble Na onal Company Law Tribunal (NCLT)Principal Bench New Delhi vide its order dated 3rd April 2019 with appointed date 01 stMarch 2016 under sections 230 to 232 of the Companies Act 2013 read with Companies(Compromises Arrangements and Amalgama ons) Rules 2016 and other applicable provisionsif any.
A er approval of the above Scheme of Amalgama on all the property rights powersliabili es and du es of CMI Energy India Private Limited be transferred without furtheract or deed to CMI Limited and accordingly the same shall pursuant to section 232 of theCompanies Act 2013 be transferred to and become the Assets and Liabili es of the CMILimited.
The Registrar of Companies (ROC) has also approved the amalgama on of CMI Energy IndiaPrivate Limited into CMI Limited on May 13 2019.
4. SHARE CAPITAL
Pursuant to the implementa on of the Scheme of Amalgama on between CMI Energy IndiaPrivate
Limited (Transferor Company) and CMI Limited (Transferee Company) as approved by theHon'ble National Company Law Tribunal (NCLT) Principal Bench New Delhi vide its orderdated 3rd April 2019 e ec ve from 01st March 2016 the authorised share capital of theTransferor Company has been added to and forms part of the authorised share capital of theTransferee Company. Accordingly the authorised share capital of the Transferee Companystands increased to the extent of the aggregate authorised share capital of the TransferorCompany i.e. Rs. 1750000000 (Rupees One Hundred and Seventy Five Crores) divided into175000000 (Seventeen Crore Fi y Lakh) Equity shares of Rs. 10/- (Rupees Ten) each.
Clause V of the Memorandum of Associa on and relevant ar cle(s) of the Ar cles ofAssocia on of the Transferee Company stands modifi ed to give e ect to the aforesaidincrease in the authorised capital of the Transferee Company pursuant to the order ofHon'ble National Company Law Tribunal (NCLT) Principal Bench New Delhi.
"The authorised Share Capital of the Company is Rs. 1750000000 (Rupees OneHundred Seventy Five Crore only) divided into 175000000 (Seventeen Crore Fi y Lakhonly) Equity Share of Rs. 10/- (Rupees Ten) each with power to increase or reduce thecapital of the Company and to divide the shares in the capital for the me being intoseveral classes and to a ach thereto respectively such preferential deferred qualifiedor special right privileges or condi ons as may determined by or in accordance with theAr cles of Association of the Company and vary modify amalgamate or abrogate any suchright privilege or condi on in such manner as may for the me being be provided by theArticles of Association of the Company."
As on 31st March 2020 Paid up share Capital of the Company is Rs. 150274570/-(Rupees Fi een Crores Two lakhs Seventy Four Thousand Five hundred and Seventy Only)divided into 15027457 (One Crore Fi y Lakh Twenty Seven Thousand Four Hundred Fi ySeven only) equity shares of Rs 10/- (Rupees Ten) each.
5. CREDIT RATING
For the Finanical Year 2019-20 the CARE has rea rmed the ra ng to BBB+; Stable (TripleB Plus; Outlook Stable) for the Long Term Bank Facili es and CARE A3+ (A Three Plus) toShort Term Bank facili es availed by the Company.
However CARE has revised the ra ng from BBB+; stable (Triple B Plus outlook stable)to CARE BBB stable (Tripel B outlook stable) for the Long Term Bank facili es and CAREA3+ (A Three Plus) to CARE. A3 (A Three) for the stable Term Bank facili es availed by theCompany vide their le er dated 30.07.2020.
6. DIVIDEND AND RESERVES
Based on the Company's performance the Directors are pleased to recommend payment ofdividend on equity shares @ Re. 0.5/- per equity share (5%) for the financial year 2019-20(previous year Rs 1/- per share).
7. PUBLIC DEPOSITS
The Company has not accepted or renewed any fixed deposits during the period underreview. It has not accepted any deposits from the public within the meaning of theprovisions of Sec on 73 of the Companies Act 2013 and Rules made thereunder. Thereforeit is not required to furnish information in respect of outstanding deposits undernon-banking non-fi financial Companies (Reserve Bank) Direc ons 1966 and Companies(Accounts) Rules 2014.
8. SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES
As on 31st March 2019 the Company had a wholly owned subsidiary i.e. CMI Energy IndiaPrivate Limited. However pursuant to the order passed by Hon'ble NCLT dated 3rd April2019 CMI Energy India Private Limited amalgamated with the Company and ceases to be theSubsidiary of the Company.
As on 31st March 2020 the Company do not have any Associate or Subsidiary Company.Therefore disclosure in Form AOC-1 in terms of Sec on 129(3) of the Act is not required.
9. INTERNAL FINANCIAL CONTROLS
The Board/Management believes that based on the knowledge/information gained by themabout a airs of the Company from records the Company has e ec ve internal financialcontrol systems and policies and such controls are opera ng e ec vely. The internalcontrol systems include documented policies checks and balances guidelines andprocedures that are supplemented by robust internal audit processes and monitored connuously through periodical reviews by management to provide reasonable assurance that allassets are safeguarded; and all transactions entered into by company are authorizedrecorded and reported properly. Post-amalgamation the Board/Management is in the processreviewing the internal controls framework of the Company with an objec ve to have a robustinternal control framework commensurate with the size scale and nature of business of theCompany.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
As on 31st March 2020 the Company has 6 Directors with an Execu ve Chairman whichincludes 2 Execu ve Directors 3 Non-Execu ve Independent Directors inclusive of 1 WomanDirector and 1 Non-Execu ve Non-Independent Director.
Change in Directorship:
During the year under review there is change in the composi on of Board of Directorsof the Company in the FY 2019-20:
|S. No. Name of Director ||DIN ||Designa on ||Date of Appointment ||Date of Cessa on |
|1 Mr. Amit Jain ||00041300 ||Chairman Cum Managing Director ||01-10-2002 ||- |
|2 Mr. Pyare Lal Khanna ||02237272 ||Non-Execu ve Independent Director ||30-09-2004 ||30-09-2019 |
|3 Mr. Vijay Kumar Gupta ||00995523 ||Whole-Time Director ||15-01-2009 ||- |
|4 Ms. Archana Bansal* ||01129623 ||Non-Execu ve Independent Director ||01-05-2015 ||28-05-2019 |
|5 Mr. Kishor Punamchand Ostwal* ||00460257 ||Non-Execu ve Independent Director ||29-07-2016 ||18-11-2019 |
|6 Mr. Manoj Bishan Mi al ||00282676 ||Non-Execu ve Independent Director ||29-07-2016 ||- |
|7 Ms. Charu Jain ||03457247 ||Non-Execu ve Independent Director ||28-05-2019 ||- |
|8 Mr. Anil Arora* ||08653799 ||Non-Execu ve Independent Director ||30-12-2019 ||- |
|9 Mr. Kunal Singhal* ||08140142 ||Non-Execu ve Non- Independent Director ||31-03-2020 ||- |
* Ms. Archana Bansal and Mr. Kishor Punamchand Ostwal Non-Execu ve IndependentDirectors resigned from the directorship of the Company w.e.f. 28th May 2019 and 18thNovember 2019 respec vely.
Mr. Pyare Lal Khanna ceased from the directorship of the Company upon comple on of histenure w.e.f. 30th September 2019.
Further the Board of Directors on recommenda on of the Nomina on and RemunerationCommi ee and upon approval of Shareholders in 52nd Annual General Meeting appointed Ms.Charu Jain as a director in the category of Non-Execu ve Independent Director inaccordance with Sec on 149(4) of the Act with e ect from 28th May 2019 to hold o ce fora term of 5 (fi ve) consecu ve years.
Further the Board of Directors on recommenda on of the Nomina on and RemunerationCommi ee appointed Mr. Kunal Singhal as an addi onal director in the category of Non-Execuve Non-Independent Director in accordance with Sec on 149 of the Act with e ect from 31stMarch 2020 to hold o ce for a term of 5 (fi ve) consecu ve years. In terms of Sec on 161of the Act Mr. Kunal Singhal holds o ce up to the date of ensuing Annual General Meeting.The Nomina on & Remuneration Commi ee of the Board hereby recommends the resolu on inrela on to appointment of Mr. Kunal Singhal as a Non-Execu ve Non-Independent Director forthe approval by the members of the Company. Brief profile of Mr. Kunal
Singhal has been given in the No ce convening the Annual General Meeting.
Further the Board of Directors on recommenda on of the Nomina on and RemunerationCommi ee appointed Mr. Servagaya Jain as an addi onal director in the category ofNon-Executive Independent Director in accordance with Sec on 149 of the Act with e ectfrom 26th August 2020 to hold o ce for a term of 5 (fi ve) consecu ve years. In terms ofSec on 161 of the Act Mr. Servagaya Jain holds o ce up to the date of ensuing AnnualGeneral Meeting. The Nomina on & Remuneration Commi ee of the Board hereby recommendsthe resolu on in rela on to appointment of Mr. Servagaya Jain as a Non-Execu veIndependent Director for the approval by the members of the Company. Brief profile of Mr.Servagaya Jain has been given in the No ce convening the Annual General Meeting.
The Board of Directors on recommenda on of the Nomina on and Remuneration Commi eeappointed Mr. Anil Arora as an addi onal director in the category of Non-Execu veIndependent Director in accordance with Sec on 149(4) of the Act with e ect from 30thDecember 2019 upto the ensuing Annual General Meeting. However Mr. Anil Arora resignedfrom the directorship of the Company w.e.f. 26th August 2020.
The Company has received declaration from the Independent Directors that they meet thecriteria of independence as prescribed u/s 149(6) of the Companies Act 2013. In theopinion of the Board they fulfi ll the condi on for appointment/re-appointment asIndependent Directors on the Board. Further in the opinion of the Board the IndependentDirectors also possess the a ributes of integrity exper se and experience as required tobe disclosed under Rule 8(5) (iiia) of the Companies (Accounts) Rules 2014.
In accordance with the provisions of Sec on 152 of the Act and the Company's Ar cles ofAssocia on Mr. Vijay Kumar Gupta Whole Time Director re res by rota on at theforthcoming Annual General Meeting and being eligible o ers himself for re-appointment.The Board and Nomina on & Remuneration Commi ee recommend his re-appointment for theconsidera on of the Members of the Company at the forthcoming Annual General Meeting.
Mr. Vijay Kumar Gupta whole me director of the Company has a ained the age of 70(Seventy) years on 15th December 2019. Pursuant to Sec on 196 read with relevant rules ofCompanies Act 2013 no Company shall con nue the employment of any person as whole- medirector if he/she has a ained the age of seventy years. However the appointment of Mr.Vijay Kumar Gupta was approved by the shareholders upon a aining the age of 70 (Seventy)years on 15th December 2019 in the 52nd Annual general Meeting of the Company held on30th September 2019.
Directors liable to re re by rota on
Mr. Vijay Kumar Gupta is liable to re re by rota on at the ensuing Annual GeneralMeeting and being eligible o ers himself for reappointment.
None of the Directors are disqualified under the provisions of the Companies Act 2013.
Key Managerial Personnel
During the year under review in terms of the provisions of Sec on 2(51) and 203 of theCompanies Act 2013 the Key Managerial Personnel (KMP) of the Companywere as under:-
1. Mr. Amit Jain - Chairman cum Managing Director
2. Mr. Vijay Kumar Gupta- Whole Time Director
3. Mr. Ra an Lal Aggarwal- Chief Financial O cer ( ll 01.04.2020)
4. Mr. Subodh Kumar Barnwal - Company Secretary
5. Mr. Raj Kumar - Chief Financial O cer (w.e.f. 17.07.2020)
Changes in Key Managerial Personnel
During the year under review there is no change in the Key Managerial Personnel (KMP)of the Company in terms of the provisions of Sec on 2(51) and 203 of the Companies Act2013.
However Mr. Ra an Lal Aggarwal resigned from the designa on of Chief Financial O cerw.e.f. 1st April 2020 and Mr. Raj Kumar was appointed as Chief Financial O cer of theCompany w.e.f. 17th July 2020.
11. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Sub-section (5) of Sec on 134 of the Companies Act 2013 with respect tothe Director's Responsibility Statement it is hereby confirmed that:
i. In the prepara on of the Annual Accounts for the year ended 31st March 2020 theapplicable accoun ng standards read with requirements set out under Schedule III of theAct have been followed and no material departures have been made from the same;
ii. Appropriate Accounting Policies have been selected and applied consistently andhave made judgments and es mates that are reasonable and prudent so as to give a true andfair view of the state of a airs of the Company as at 31st March 2020 and of the profitof the Company for that year ended on that date except to the extent men oned in notes toaccounts;
iii. Proper and su cient care has been taken for the maintenance of adequate accoun ngrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preven ng and detec ng fraud and other irregulari es;
iv. The Annual Accounts have been prepared on a going concern basis;
v. The internal financial controls to be followed by the Company had been laid down andthat such internal fi financial controls are adequate and were opera ng e ec vely; vi. Theproper systems had been devised to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and opera ng e ec vely.
12 BOARD PERFORMANCE EVALUATION
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Commi ees and other individual Directors which include criteria for performanceevalua on of the Non-Execu ve Directors and Execu ve Directors.
Pursuant to the provisions of the Act the Board has carried out an annual evaluationof its own performance the individual Directors (including the Chairman) as well as anevalua on of the working of all Board Committees. The Board of Directors was assisted bythe Nomina on and Remuneration Committee. Some of the performance indicators based onwhich evalua on takes place are experience exper se knowledge and skills required forachieving strategy and for implementa on of best governance practices which ulmately contributes to the growth of the Company in compliances with all policies of theCompany.
13. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review 8 (Eight) Board Meetings were duly convened and held. Thedetails of the number of meetings of the Board held during the Financial Year 2019-20forms part of the Corporate Governance Report.
14. COMMITTEES OF THE BOARD
The Board of Directors has the following Commi ees:
1. Audit Commi ee
2. Nomina on and Remuneration Commi ee
3. Stakeholders' Rela onship Commi ee
4. Corporate Social Responsibility Commi ee.
The details of the Committees along with their composi on number of meetings terms ofreference and a endance of members at the meetings are provided in the CorporateGovernance Report which forms part of this Annual Report. Further during the year underreview the board has accepted all the recommenda ons of the respec ve Commi ees.
15. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received the necessary declara on from each Independent Director thathe/she meets the criteria of Independence as laid out in Sec on 149(6) of the CompaniesAct 2013 read with the Schedules rules made thereunder and Regula on 25 of SEBI Lis ngRegula ons 2015.
16. NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in rela on toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.
The Policy broadly lays down the guiding principles philosophy and the basis forpayment of remuneration to Execu ve and Non-Execu ve Directors (by way of sitting fees andcommission) Key Managerial Personnel Senior Management and other employees. The policyalso provides the criteria for determining qualifi ca ons posi ve a ributes andIndependence of Director and criteria for appointment of Key Managerial Personnel /SeniorManagement and performance evalua on which are considered by the Nomina on andRemuneration Commi ee and the Board of Directors while making selec on of the candidates.The above policy has been posted on the website of the Company at h ps://cmilimited.in/img/pdf/Nomina on%20and%20Remunera on%20 Policy-new.pdf
17. VIGIL MECHANISM Cum WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Vigil Mechanism Cum Whistle Blower Policyframed by Board of the Company to deal with instances of fraud and mismanagement if any.Details of the same are given in the Corporate Governance Report.
The same has also been displayed on the website of the Company viz: - https://cmilimited.in/img/pdf/covid%20 manufacturing%20licence-2020%20MD9-new.pdf
18. RELATED PARTY TRANSACTIONS
All transactions entered with Related Par es for the year under review were on arm'slength basis and thus a disclosure in Form AOC-2 in terms of Sec on 134 of the Act is notrequired. Further there are no material related party transactions during the year underreview as defined under SEBI (Lis ng Obliga ons and Disclosure Requirements) Regulations2015 and adopted by the Board of Directors in the Related Party Transac ons Policy of theCompany. All related party transactions are men oned in the notes to the accounts. TheCompany has developed a framework through Standard Operating Procedures for the purpose ofiden fi ca on and monitoring of such Related Party Transac ons.
All Related Party Transac ons are placed before the Audit Commi ee for approval.Omnibus approval was obtained on a yearly basis for transactions which are of repe venature. Transac ons entered into pursuant to omnibus approval are verifi ed and details ofall Related Party Transac ons are placed before the Audit Commi ee and the Board forreview and approval on a quarterly basis.
The Policy on Related Party Transac ons as approved by the Board of Directors has beenuploaded on the website of the Company and can be seen at the link hps://cmilimited.in/img/pdf/Policy_on_Related_ Party_Transac ons-new.pdf. None of theDirectors has any pecuniary rela onship or transactions vis--vis the Company excepttransactions approved by Audit Commi ee and Board.
19. CORPORATE SOCIAL RESPONSIBILITY In compliance with Sec on 135 of the CompaniesAct 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014 asamended the Board of the Company has formed Corporate Social Responsibility("CSR") Committee. Details of CSR Commi ee along with their composi on numberof meetings terms of reference and attendance of members at the meetings are provided inthe Corporate Governance Report. The policy on CSR as approved by the erstwhile Board ofDirectors is also uploaded on the website of the Company i.e. h ps://cmilimited.in/img/pdf/Corporate%20Social%20 Responsibility%20Policy.pdf
Disclosures of transactions of the Company with any person or en ty belonging tothe promoter/promoter group which hold(s) 10% or more shareholding in the listed en ty isspecified in Note No 39 of financial Statement.
Pursuant to Sec on 135 of the Companies Act 2013 read with CSR policy of the Companyit is required to spend two percent of the average net profit of the Company for threeimmediately preceding financial years. Annual Report on CSR ac vi es as required under theCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended have beenannexed as Annexure-1 and forms integral part of this Report.
a) Statutory Auditor
M/s Krishna Neeraj & Associates Chartered Accountants (Firm Registra onNo.023233N) were appointed as Statutory Auditors of the Company for a period of fiveconsecu ve years at the Annual General Meeting (AGM) of the Members held on 28thSeptember 2016 on a remuneration mutually agreed upon by the Board of Directors and theStatutory Auditors. Their appointment was ubject to ra fi ca on by the Members at everysubsequent AGM held after the AGM held on 28th September 2016.
Pursuant to the amendments made to Sec on 139 of the Companies Act 2013 by theCompanies (Amendment) Act 2017 e ec ve from 7th May 2018 the requirement of seeking rafi ca on of the Members for the appointment of the Statutory Auditors has been withdrawnfrom the Statute. Hence the resolution seeking ratification of the Members forcontinuance of their appointment at this AGM is not being sought.
There is no audit qualification reservation or adverse remark for the year underreview except a disclosure with respect to the ma er is included in the Auditor's Reportunder section 197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is within elevenper cent of the net profits computed in the manner laid down in section 198 of the Act.However the amount paid to its Chairman Cum Managing Director is in excess of Rs.5717313 (Rupees Fi y Seven Lakh Seventeen Thousand Three Hundred Thirteen only) over andabove of permissible limit as specified under section 197 read with schedule V of the Act.
In this regard the Company wishes to inform you that pursuant to Sec on 197(10) readwith Schedule V of the Companies Act 2013 the remuneration paid / payable to Mr. AmitJain was well within the limits prescribed under the Companies Act 2013. However duringthe fi financial year 2019-20 the Company has earned inadequate profit and remunerationpaid to him amoun ng to Rs. 57.17 Lakhs was in excess of the limits laid down under theprovisions of Sec on 196 197 read with Schedule V and other applicable provisions ifany of the Companies Act 2013 (the Act) read with the Companies (Appointment andRemuneration of Managerial
Personnel) Rules 2014 (including any statutory modifi ca on(s) or any amendment(s)thereto or any subs tu on(s) or any re-enactment(s) thereof for the me being in force) theCompany will seek to obtain the approval for the said amount by way of a Special Resolu onby the Members for remuneration paid under Sec on 197(10) of the Companies Act 2013.
b) Secretarial Auditor
Pursuant to provision of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas appointed M/s Pooja Anand & Associates Prac cing Company Secretaries for conducng Secretarial Audit of the Company for the fi financial year 2019-20.
The Secretarial Audit Report for FY 2019-20 as submi ed by Secretarial Auditor in FormMR-3 is annexed as Annexure-2.
There is no secretarial audit qualifi ca on for the year under review except:
1. During the year under review Mr. Pyare Lal Khanna ceased to be the IndependentDirector of the Company w.e.f. September 30 2019 and the in ma on for the same was givento stock exchange on October 15 2019 which is to be given within twenty four hours fromthe occurrence of event as specifi ed in the Regula on 30 read with Part A of Schedule IIIof SEBI (LODR) Regula ons 2015;
In this regard the Company wish to inform you that the tenure of Mr. Pyare Lal Khannaexpired on 30th September 2019. Cessa on is due to comple on of tenure.
2. During the year under review the remuneration paid to Mr. Amit Jain (Chairman cumManaging Director) is in excess of Rs. 5717313 (Rupees Fi y Seven Lakh SeventeenThousand Three Hundred and Thirteen only) over and above of permissible limit as specifiedunder section 197 read with Schedule V of the Companies Act 2013;
In this regard the Company wishes to inform you that pursuant to Sec on 197(10) readwith Schedule V of the Companies Act 2013 the remuneration paid / payable to Mr. AmitJain was well within the limits prescribed under the Companies Act 2013. However duringthe fi financial year 2019-20 the Company has earned inadequate profit and remunerationpaid to him amoun ng to Rs. 57.17 Lakhs was in excess of the limits laid down under theprovisions of Section 196 197 read with Schedule V and other applicable provisions ifany of the Companies Act 2013 (the Act) read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 (including any statutorymodification(s) or any amendment(s) thereto or any substitution(s) or any re-enactment(s)thereof for the time being in force) Company obtain seeks to approval of the said amountby way of a Special Resolution by the Members for remuneration paid under Sec on 197(10)of the Companies Act 2013.
3. During the year under review the Company has declared dividend in the AGM held onSeptember 30 2019 and transferred the amount of the dividend in the bank account inNovember 2019.
In this regard the Company wishes to inform you that the delay was due to unavoidablereason.
c) Cost Auditor
In terms of Sec on 148 of the Act the Company is required to maintain cost records andhave the audit of its cost records conducted by a cost accountant. Cost records are madeand maintained by the Company as required under Sec on 148(1) of the Act. The Board ofDirectors at its meeting held on 28th May 2019 appointed M/s Ajay Kumar Singh & Co(Firm Registra on Number 000386) Cost Auditors to conduct the Cost Audit for theFinancial Year 2019-2020.
For the financial year ending 31st March 2021 the Board of Directors of the Companyhas on the recommenda on of the Audit Commi ee approved the appointment of M/s AjayKumar Singh & Co as the cost auditors of the Company.
M/s Ajay Kumar Singh & Co Cost Accountants have vast experience in the field ofcost audit.
In accordance with the provisions of Sec on 148(3) of the Act read with Rule 14 of theCompanies (Audit and Auditors) Rules 2014 the remuneration payable to the cost auditorsas recommended by the Audit Commi ee and approved by the Board has to be ra fi ed by themembers of the Company.
Accordingly an appropriate resolu on for the proposed remuneration of Rs. 55000 perannum plus applicable taxes and out-of-pocket expenses payable to the cost auditors forthe Financial Year ending 31st March 2021 forms part of the no ce of ensuing AnnualGeneral Meeting for ra fi ca on.
21. OTHER INFORMATION
a) Details in respect of frauds reported by Auditors other than those which arereportable to the Central Government
The Statutory Auditors Secretarial Auditors Cost Auditors or Internal Auditors of theCompany have not reported any frauds to the Audit Commi ee or to the Board of Directorsunder Sec on 143(12) of the Companies Act 2013 including rules made thereunder.
b) Stock Op ons Scheme
The Company does not have any Scheme of Stock Op on for its employees Directors etc.
c) Disclosure under Sec on 43(a)(iii) and Sec on 54(1)(d) of the Companies Act 2013
During the year under review the Company has not issued any shares with di eren al vong rights and sweat equity shares and hence no information as required under Section43(a) (iii) & Sec on 54(1)(d) of the Companies Act 2013 read with applicable rules isrequired to be disclosed.
d) Risk Management
The Board/ management is reviewing the Risk management framework of the Company. TheCompany would put in place a suitable enterprise risk management framework for iden fyingand evaluating risks and opportunities that may have bearing on the organiza on. TheCompany recognises that these risks need to be managed and mi gated to protect theshareholders and other stakeholders interest.
e) Conserva on of Energy Technology Absorp on and Foreign Exchange Earnings and outgo
In accordance with Sec on 134(3)(m) of the Companies Act 2013 read with the Rule 8(3)of the Companies (Accounts) Rules 2014 as amended the information on conservation ofenergy technology absorp on and foreign exchange earnings and outgo are annexed as Annexure-3hereto and forms an integral part of this Report.
f) Particulars of Employees and Related Disclosures
Disclosures pertaining to remuneration and other details of the employees asrequired under Sec on 197(12) of the Companies Act 2013 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended areannexed to this report as
g) Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Sec on 92 of the Act which forms an integral part of this Report and is availableon the Company's website viz. h ps://cmilimited.in/img/pdf/extract-of-annual-report-2019-20. pdf and annexed to this report as Annexure5.
h) Management Discussion & Analysis Report
The Management Discussion and Analysis Report on the opera ons of the Company asrequired under the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regulations 2015(hereina er referred to as "Lis ng Regula ons") is provided in a separatesection and forms an integral part of this Report.
i) Particulars of Loans Guarantees or Investments under Sec on 186
Details of Loans Guarantees and Investments covered under the provisions of Sec on 186of the Companies Act 2013 are given in the note no. 9 & 10 to the FinancialStatements.
j) Corporate Governance Report
The Company has complied with requirements of Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. A report on the CorporateGovernance practices followed by the Company together with a cer fi cate from thePrac cing Company Secretary regarding compliance are given as an Annexure 6 to thisreport.
k) Cost Records
As per the requirement of Central Government and pursuant to provisions of Sec on 148of the Companies Act2013 read with Companies (Audit and Auditors) Rules 2014 as amendedfrom time to time audit of cost records of the Company is being carried out. The Board ofDirectors on recommendation of Audit Committee has appointed M/s Ajay Kumar Singh &Co. Cost Accountants as Cost Auditor to audit the cost records and accounts rela ng tocable manufacturing for the financial year ending 31st March 2021. As per the requirementof the aforesaid section a resolu on ra fying remuneration payable to Cost Auditors formspart of the No ce convening the 53rd Annual General Meeting.
Your Company has maintained cost records and accounts as per Sec on 148 (1) of theCompanies Act 2013. Further the Cost Audit Report along with annexure for FY 2019-20 wasapproved by board of Directors on 13th August 2019.
l) Disclosure under the Sexual Harassment of Women at Work Place (Preven on Prohibion and Redressal) Act 2013.
The Company has laid down Anti Sexual Harassment policy on Gender Equality GenderProtec on Preven on of Sexual Harassment and Redressal System in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary
Appren ceship) are covered under this policy. The following is a summary of sexualharassment complaints received and disposed of during the year under review-
No. of complaints received: Nil
No. of complaints disposed of: NA m) Secretarial Standards
The Company has in place proper systems to ensure compliance with the provisions of theapplicable secretarial standards issued by the Ins tute of Company Secretaries of Indiaand such systems are adequate and opera ng e ec vely.
22. CAUTIONARY NOTE
Certain Statements in the Management Discussion and Analysis' section may beforward-looking and are stated as required by applicable laws and regula ons. Many factorsmay a ect the actual results which would be di erent from what the Directors envisage interms of the future performance and outlook. Investors are cau oned that this discussioncontains forward looking Statement that involve risks and uncertainties including but notlimited to risks inherent in the Company's growth strategy dependence on certainbusinesses dependence on availability of qualified and trained manpower and other factorsdiscussed. The discussion and analysis should be read in conjunc on with the Company'sfinancial statements and notes on accounts.
The Directors wish to place on record their gra tude to the Authori es Banks BusinessAssociates and Shareholders for their uns nted support assistance and co-opera on. TheDirectors place on record their deep apprecia on to employees at all levels for their hardwork dedica on and commitment.
By order of the board For CMI Limited
Amit Jain Chairman cum Managing Director DIN: 00041300
Place: New Delhi
Date: 26th August 2020