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CMI Ltd.

BSE: 517330 Sector: Engineering
NSE: CMICABLES ISIN Code: INE981B01011
BSE 00:00 | 20 Nov 124.15 -4.40
(-3.42%)
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OPEN 131.05
PREVIOUS CLOSE 128.55
VOLUME 4538
52-Week high 371.60
52-Week low 115.50
P/E 7.91
Mkt Cap.(Rs cr) 187
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 131.05
CLOSE 128.55
VOLUME 4538
52-Week high 371.60
52-Week low 115.50
P/E 7.91
Mkt Cap.(Rs cr) 187
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CMI Ltd. (CMICABLES) - Director Report

Company director report

To

The Members of CMI Limited

The Board of Directors presents the Fiftieth (50th) Annual Report on thebusiness and operations together with the Company's Audited Financial Statements and theAuditor's Report thereon for the financial year ended March 31 2017. The consolidatedperformance of the Company and its wholly owned subsidiary has been referred to whereverrequired.

Financial Performance Summary

(Rs. in Lakhs)

Particular

Standalone

Consolidated

Financial Results 2016-17 2015-16 2016-17 2015-16
Total revenue 30946.46 24170.54 38269.36 25296.38
Less: Total Expenditure excluding Depreciation 27725.59 21596.37 34990.54 21723.74
Profit before Depreciation and Tax 3220.87 2574.17 3278.82 3572.64
Less: Depreciation 133.87 127.90 1013.32 127.90
Add: Exceptional items 0.72 5.58 0.73 5.59
Add: Extra-ordinary items - - - 7900.00
Profit Before Tax 3087.72 2451.85 2266.23 11350.33
Less: Current Tax (1030.95) (862.00) (1030.95) (862.00)
Deferred Tax (48.43) 109.74 1772.21 109.74
Net Profit for the Year carried to the Balance Sheet 2008.33 1699.60 3007.49 10598.07

OVERALL REVIEW

Overall 2016-17 has been a very successful year; there is an increase of 27.37% in theturnover (standalone) of the Company. The Profit before depreciation and tax (standalone)has increased by 25.12% while the Net Profit (standalone) has increased by 18.16%. TheCompany has adopted adequate cost control measures throughout the year and has beenaggressive in its quest for new business and maintained pricing disciplines. This helpedto deliver a decent revenue growth along the year with major improvement in margins. YourCompany continues to focus on production of quality cables to broaden its customer baseand to set a benchmark in the competitive market. With stable government at centre thelong term outlook of cable industry is expected to be favorable driven by Power SectorReforms Modernization of Railways new Metro Railways and other InfrastructuresDevelopmental Projects.

DIVIDEND

The Board of Directors has recommended a final dividend of Re.1/- per equity share ofRs.10/- each aggregating to Rs.177.86 Lakhs (including dividend distribution tax) subjectto the approval of the shareholders etc. at the ensuing Annual General Meeting of theCompany.

Total dividend (including dividend tax) as a percentage of net profit after tax is8.86% as compared to 9.47% (interim dividend) in the previous year.

RESERVES

During the year under review Reserves and Surplus as at 31st March 2017 isRs.8338.18 Lakhs on the basis of Standalone Financial Statement and Rs.18980.07 Lakhs asper Consolidated Financial Statement.

AUDITORS AND THEIR REPORT

M/s. Krishna Neeraj & Associates Chartered Accountants (Firm Registration No.023233N) was appointed as the joint Statutory Auditor by the members in the 49thAnnual General Meeting of the Company for one term of 5 consecutive years i.e. to holdoffice until the conclusion of the 54th AGM of the Company subject to ratification oftheir appointment by the members at every AGM of the Company.

Further the ratification by shareholders in respect of their appointment as theStatutory Auditors of the Company is proposed at ensuing AGM of the Company and in respectof which they have furnished a certificate of their eligibility confirming thatratification of their appointment if made at the ensuing Annual General Meeting would bewithin the limits specified under Section 139(1) and 141 of the Companies Act 2013 andthe rules framed thereunder.

The observations made in the Auditors' Report on the audited accounts of the Companyfor the year ended 31st March 2017 are self explanatory and therefore do not requirefurther explanation. The Auditors' Report does not contain any qualification reservationor adverse remark.

COST AUDITOR

As per the requirement of Central Government and pursuant to provisions of Section 148of the Companies Act 2013 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 andCo. Cost Accountants as Cost Auditor to audit the cost records and accounts relating tocable manufacturing for the financial year ending March 31 2018. As per the requirementof the aforesaid section a resolution ratifying remuneration payable to Cost Auditorsforms part of the Notice convening the 50th Annual General Meeting.

INTERNAL AUDITOR

As per the requirement of Section 138 read with Rule 13 of the Companies (Accounts)Rules 2014 of the Companies Act 2013 the Board of Directors on recommendation of AuditCommittee has appointed Mr. Raj Kumar as an Internal Auditor of the Company.

Mr. Raj Kumar Internal Auditor of the Company presents report and makes presentationsto the audit committee on internal audit which is reviewed by the audit committee fromtime to time.

SECRETARIAL AUDITOR

Pursuant to provision of Section 204 of the Companies Act 2012 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas appointed M/s Pooja Anand & Associates Practicing Company Secretaries forconducting Secretarial Audit of the Company for the financial year 2016-17.

The Secretarial Audit Report is annexed as Annexure-1. The Secretarial Audit Reportdoes not contain any qualification reservation or adverse remark except the Company hasspent Rs.218000/- (Rupees Two Lakh Eighteen Thousand only) towards CSR which is lessthan the prescribed amount that the Company was required to spend pursuant to theprovisions of Section 135 of the Companies Act 2013 during the financial year underreview but the Company is in process of conceptualizing a structured programme in theFY2017-18 to meet its CSR objective and to comply with the provisions of the aforesaidsection.

INTERNAL CONTROL SYSTEM

The Company has a well placed proper and adequate internal control system whichensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly. The Company's internal control systemcomprises audit and compliance by in-house internal Audit Division. The Internal Auditorsindependently evaluate the adequacy of internal controls and concurrently audit themajority of the transactions in value terms. Independence of the audit and compliance isensured by direct reporting of Internal Audit Division and Internal Auditor to the AuditCommittee of the Board.

CREDIT RATING

During the year under review the Company has improved its long term credit rating toCARE BBB. The BBB rating awarded by Care Analysis and Research Limited (CARE) reflectsmoderate degree of safety regarding timely servicing of financial obligation. TheCompany's short term credit rating has also improved to CARE A3 by Care Analysis andResearch Limited (CARE) reflecting moderate degree of safety regarding timely payment offinancial obligations.

SEGMENT WISE PERFORMANCE:

Company operates only in one segment.

RISK MANAGEMENT

In compliance with the requirement of the Companies Act 2013 the Company has put inplace Risk Minimization and Assessment Procedures. In order to effectively and efficientlymanage risk and address challenges the Company has formulated Risk Management Policy. TheCompany manages the risk in line with current risk management best practices. Thisfacilitates the achievement of our objectives operational effectiveness and efficiencyprotection of people and assets informed decision making and compliance with applicablelaws and regulations.

MATERIAL CHANGES:

There are following material changes and commitments affecting the financial positionof the Company between the end of financial year of your Company and the date ofDirector's Report:

• The Company has allotted 250000 (Two Lakh Fifty Thousand) Equity Shares havingface value Rs.10/- (Rupees Ten only) each at a premium of Rs.290/- Per Equity Share toMrs. Himani Jain Promoter/Promoter group on a preferential basis in accordance withprovisions specified under Chapter VII of SEBI (ICDR) Regulations 2009 after obtaining inprinciple approval from the Bombay Stock Exchange Limited and National Stock Exchange ofIndia Limited vide its letter no. DCS/PREF/SD/PRE/1762/2016-17 dated March 16 2017 andNSE/LIST/10914 dated April 05 2017 respectively. Thereafter the Company got the listingapproval of 250000 equity shares from Bombay Stock Exchange and National Stock Exchangeof India Limited vide its letter no. DCS/PREF/SD/PRE/1946/2017-18 dated May 24 2017 andNSE/LIST/11601 dated May 26 2017 respectively. The Company has also got trading approvalfrom Bombay Stock Exchange and National Stock Exchange of India Limited vide letter no.DCS/PREF/TP/SD/4920/2017-18 dated June 19 2017 and NSE/LIST/12132 dated July 20 2017respectively.

• The Company pursuant to pertinence of Section 233 of Companies Act 2013 andCompanies (Compromises Arrangements and Amalgamations) Rules 2016 effective from 15thDecember 2016 vide notification no. S.O.3677(E) dated 7th December 2016 duly issued byMinistry of Corporate Affairs which governs the amalgamation of a wholly owned subsidiarycompany with its Holding Company filed the Scheme of Amalgamation between CMI EnergyIndia Private Limited (wholly owned Subsidiary Company) {"the TransferorCompany"} and CMI Limited {"the Transferee Company"} under the channel offast track merger with effect from 01.03.2016 being the Appointed Date and pursuant toRules becoming effective and in compliance with the provisions obtained approval fromBoard of Directors in their Board Meetings held on 16th January 2017 in addition to theapproval already obtained from Board of Directors on 30th March 2016. The Scheme was alsoapproved by the respective Members and Creditors (Secured and Unsecured) of both thecompanies. Approval of BSE Limited under Regulation 37 of Listing Regulations was alsobeen obtained. The approval of the Scheme was being taken up by the Regional Director(North) who referred the matter to Hon'ble NCLT Delhi and filed an Application with theHon'ble NCLT for considering the Scheme and passing the necessary orders. The Order of theNCLT approving & registering the Scheme is awaited.

Material changes and commitments held during the FY2016-17:

• The Company has applied for the listing of 700000 Equity shares consequent uponconversion of warrant into equity and received Listing Approval of 700000 Equity sharesfrom the Bombay Stock Exchange Limited vide its letter no. DCS/PREF/MR/PRE/1379/2016-17dated October 24 2016 and got trading approval from BSE Limited vide its letter no.DCS/PREF/TP/MR/3717/2016-17 dated November 07 2016.

• The Company had applied for new listing on National Stock Exchange of IndiaLimited (NSE) and got listing approval (New Listing) from NSE vide its letter no. Ref No.NSE/CML/33701 Circular no: 974/2016 dated November 25 2016 and the dealing becomeeffective from November 29 2016.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were checked and no reportablematerial weaknesses were observed.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

As on 31st March 2017 the Company has one wholly-owned subsidiary i.e. CMI EnergyIndia Private Limited (formerly known General Cable Energy India Private Limited) andpursuant to provisions of Section 129 (3) of the Companies Act 2013 Regulation 33 andany other applicable provisions of SEBI Listing Obligations and Disclosure RequirementsRegulations (LODR) 2015 and Accounting Standards the Consolidated Financial statementsof the Company including of its subsidiary company duly audited by the Statutory Auditorsof the Company have been prepared and forms part of the Annual Report.

A report in Form AOC-1 stating the performance and financial position of its subsidiaryCompany pursuant to provision of Section 139 read with Rule 5 of Companies (Accounts)Rules 2014 of the Companies Act 2013 is annexed and marked as Annexure-2.

Further pursuant to the provisions of section 136 of the Act the Company'sconsolidated financial statements along with relevant documents and separate auditedfinancial statement of subsidiaries are available on the website of the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Change in Directorship

During the year no change has occurred in the total strength of Board of Directors ofthe Company. The Company has total 7 Directors with an Executive Chairman which includes2 Executive Directors 5 NonExecutive Independent Directors as on 31.03.2017. The Boardconsists of following members:

Name of Director DIN Designation
Mr. Amit Jain 00041300 Chairman Cum Managing Director
Mr. Vijay Kumar Gupta 00995523 Whole-Time Director
Mr. Pyare Lal Khanna 02237272 Non-Executive Independent Director
Mr. Ramesh Chand 02759859 Non-Executive Independent Director
Mrs. Archana Bansal 01129623 Non-Executive Independent Director
Mr. Kishor Punamchand Ostwal 00460257 Non-Executive Independent Director
Mr. Manoj Bishan Mittal 00282676 Non-Executive Independent Director

Changes in Key Managerial Personnel

• Mr. Ghan Shyam Dass resigned as Chief Financial Officer of the Company w.e.f.December 05 2016 and Mr. Rattan Lal Aggarwal was appointed as Chief Financial Officer ofthe Company w.e.f. December 05 2016.

• Mr. Amit Jain Chairman cum Managing Director; Mr. Vijay Kumar Gupta Whole-TimeDirector; Mr. Rattan Lal Aggarwal Chief Financial Officer and Mr. Subodh Kumar BarnwalCompany Secretary are the KMPs of the Company as per provisions of the Act.

• Directors liable to retire by rotation Mr. Vijay Kumar Gupta is liable to retireby rotation at the ensuing Annual General Meeting and being eligible offers himself forreappointment.

• Re-appointment of Mr. Vijay Kumar Gupta as Whole-Time Director of the Company

On recommendation of Nomination and Remuneration Committee subject to approval ofshareholders at the 50th Annual General Meeting ('AGM') Board of Directors in their BoardMeeting held on 22nd February 2017 has approved the re-appointment of Mr. Vijay KumarGupta as Whole-Time Director of the Company with effect from 1st April 2017 for a tenureof 5 years on the same terms and conditions.

A brief resume and other relevant details in respect of all the above Directors beingproposed for reappointment are given in the explanatory statement to the Notice conveningthe Annual General Meeting as well as Corporate Governance Report of the Board.

None of the Directors are disqualified under the provisions of the Companies Act 2013.

• Increase in remuneration of Chairman cum Managing Director

The Board of Directors in their meeting held on 22nd November 2017 subject to approvalof shareholders of the Company has proposed to increase the remuneration of Mr. AmitJain Chairman cum Managing Director effective from 1st January 2018 toremaining tenure of his appointment. The requisite resolution along with the explanatorystatement is provided in the notice convening the ensuing Annual General Meeting.

Declaration by Independent Directors

The Independent Directors hold office for a fixed term of five years and are not liableto retire by rotation. The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under the Act and under the SEBI (LODR) Regulations 2015.

Evaluation of the Board its Committees and Individual Directors

The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the Non-Executive Directors and executive 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 anevaluation of the working of all Board Committees. The Board of Directors was assisted bythe Nomination and Remuneration Committee. Some of the performance indicators based onwhich evaluation takes place are experience expertise knowledge and skills required forachieving strategy and for implementation of best governance practices which ultimatelycontributes to the growth of the Company in compliances with all policies of the Company.

COMMITTEE OF THE BOARD

A. Audit Committee

The Composition of Audit Committee is as under:

Mr. Ramesh Chand Independent Director Chairman
Mr. Pyare Lal Khanna Independent Director Member
Mr. Vijay Kumar Gupta Whole-Time Director Member

The above composition duly meets the requirements of Regulation 18 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with Section 177 of theCompanies Act 2013.

Mr. Subodh Kumar Barnwal acts as Company Secretary of the Committee.

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

B. Nomination & Remuneration Committee

In adherence of Section 178 of Companies Act 2013 the Board of Directors of theCompany in their Meeting held on November 20 2015 approved a policy for determiningDirectors' appointment their remuneration including criteria for ascertainingqualifications positive attributes independence of a Director and other matters providedu/s 178(3) based on the recommendations of the Nomination and Remuneration Committee. TheBroad parameters covered under the policy are formulating criteria for determiningqualifications positive attributes and independence of a Director identifying personswho are qualified to become Directors and who may be appointed in Senior Management and asKMPs of the Company in accordance with the criteria laid down recommend to the Boardtheir appointment and removal recommending to the Board a policy relating to theremuneration of the Directors Senior Management KMP and other employees as may beapplicable formulating criteria for evaluation of Independent Directors and the Board andcarry out evaluation of every Director's performance devising a policy on Boarddiversity ensuring that level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully ensuring the relationship of remuneration to performance is clearand meets appropriate performance benchmarks carrying out any other function as ismandated by the Board from time to time and/or enforced by any statutory notificationamendment or modification as may be applicable and performing such other functions as maybe necessary or appropriate for the performance of its duties.

The Composition of Nomination & Remuneration Committee comprises of Mr. Pyare LalKhanna Independent Director as Chairman Mr. Ramesh Chand Independent Director as Memberand Mrs. Archana Bansal Independent Director as Member of the Committee.

The above composition duly meets the requirements of Regulation 19 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with Section 177 of theCompanies Act 2013.

Mr. Subodh Kumar Barnwal acts as Company Secretary of the Committee.

Accordingly in order to comply with the aforesaid provisions the following policiesare available on the website of the Company (www.cmilimited.in):

a. Policy for selection of Directors and determining Directors independence; and

b. Remuneration Policy for Directors Key Managerial Personnel and other employees.

C. Stakeholder Relationship Committee

In adherence with Regulation 20 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Stakeholder Committee is responsible for all mattersconcerning the share transfers transmissions issue of duplicate share certificates andattending grievances of the shareholders.

The Composition of Audit Committee is as under:

Mr. Pyare Lal Khanna Chairman
Mr. Ramesh Chand Member
Mr. Vijay Kumar Gupta Member

Mr. Subodh Kumar Barnwal acts as Company Secretary of the Committee.

D. Corporate Social Responsibility Committee

The Company has constituted a Corporate Social Responsibility Committee to dischargethe duties stipulated under Section 135 of the Companies Act 2013 which includesformulation and recommendation to the Board a Corporate Social Responsibility (CSR)Policy indicating the amount to be undertaken by the Company as per Schedule VII of theCompanies Act 2013 recommendations of the amount of expenditure to be incurred andmonitoring CSR Policy of the Company.

The Composition of Corporate Social Responsibility Committee is as under:

Mr. Ramesh Chand Chairman
Mr. Pyare Lal Khanna Member
Mr. Vijay Kumar Gupta Member

Mr. Subodh Kumar Barnwal acts as Company Secretary of the Committee.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure-3 of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. For other details regarding the CSR Committeeplease refer to the corporate governance report which forms part of this report.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY:

The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal or unethical behaviour. The Company has a Vigilmechanism and Whistle blower policy under which the employees are free to reportviolations of applicable laws and regulations and the Code of Conduct. Employees may alsoreport to the Chairman of the Audit Committee. During the financial year no employee wasdenied access to the Audit Committee.

PREVENTION OF SEXUAL HARASSMENT

The Company in its endeavour for zero tolerance towards sexual harassment at theworkplace has adopted Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 Policy. The Policy governs to maintain ethics transparency andaccountability by ensuring that the working environment at all our locations is conduciveto fair safe and harmonious relations based on mutual trust and respect between allassociates of the Company. The Internal Compliant Committee ('ICC') has been constitutedunder the policy which provides forum to all female personnel to lodge complaints herewithfor redressal. The Policy aims to provide the effective enforcement of basic human rightof gender equality and protection from sexual harassment and abuse.

During the year there was no complaint lodged with the ICC.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The particulars of Loans Guarantees and Investment in pursuance to Section 186 of theCompanies Act 2013 have been disclosed in the financial statements read together withNotes annexed to and forming an integral part of the financial statements.

RELATED PARTY TRANSACTIONS:

In adherence with provision of Section 188 and as per provisions of Regulation 23 ofSEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 the Companyentered into the Related Party Transactions during the financial year 2016-17 andParticulars of Contracts or Arrangements with Related parties referred to in Section188(1) are included in Form AOC - 2 (Annexure-4). The Company has also entered into thetransaction as per Accounting Standard 18 and the same has been disclosed in the Note 11of other explanatory information to accounts of the Financial Statement.

EXTRACT OF THE ANNUAL RETURN:

As required pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT 9 is a part of this Annual Report (Annexure-5)

REGULATORY ACTION:

• The Company received letter from BSE and NSE directing to file the financialresults for the quarter and the year ended March 31 2017 on or before June 30 2017 andalso stating the penalty to be paid as per SEBI circular CIR/CFD/CMD/12/2015 datedNovember 30 2015 and the action to be initiated as per SEBI circularSEBI/HO/CFD/CMD/CIR/P/2016/116 dated October 26 2016 in case non-filing of the financialresults continues after June 30 2017. The Company had already filed a letter on30.05.2017 to BSE NSE and SEBI requesting them to grant time for filing these financialresults as the Company's Application for merger under Section 233 of the Companies Act2013 was pending with the Central Government through Regional Director (North).

• Post receiving the letter the Company filed the Standalone and Consolidatedfinancial results for the quarter and the year ended March 31 2017 on June 29 2017 onrecommendation of Audit Committee and after obtaining approval from Board of Directors andcomplied with the provisions of Regulation 33 of SEBI (LODR) Regulations 2015 and therequirements of the letter from stock exchanges. The Company also paid the imposedpenalty.

• The Company got approval from Registrar of Companies NCT of Delhi and Haryanavide approval letter dated 23.08.2017 for extension of the Annual General Meeting for thefinancial year ended 31st March 2017 which is due to be held by 30.09.2017 as perrequirements of Section 96 of Companies Act 2013 for another period of 3 months.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Sub-section (5) of Section 134 of the Companies Act 2013 with respect tothe Director's Responsibility Statement it is hereby confirmed that:

i. In the preparation of the Annual Accounts for the year ended 31st March 2017 theapplicable accounting 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 estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 31 2017 and of theprofit of the Company for that year ended on that date except to the extent mentioned innotes to accounts.

iii. Proper and sufficient care has been taken 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.

iv. The Annual Accounts have been prepared on a going concern basis.

v. The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

NUMBER OF MEETINGS:

Board Meeting:

During the year Twelve (12) Board Meetings and one Independent Directors' Meeting wereheld. The Details of which are given in Corporate Governance Report. The provisions ofCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 were adhered to while considering the time gap between two meetings.

EXTRAORDINARY GENERAL MEETINGS

One Extra Ordinary General Meeting was held on 21st March 2017 during the year2016-2017.

SHARE CAPITAL

The Company's shares are listed on the Bombay Stock Exchange (BSE) and National StockExchange (NSE) and are traded on both the stock exchanges actively.

a. EQUITY SHARES

• The Board of Directors of the Company at their meeting held on 12th August 2016has allotted 700000 Equity Shares in consequent to conversion of 700000 warrants issued@ Rs.64/-per warrant (including premium of Rs.54/- per warrant) to promoters on apreferential basis in accordance with provisions specified under Chapter VII of SEBI(ICDR) Regulations 2009.

• The Company has filed listing application for listing of above said 700000Equity Shares and received Listing Approval of 700000 Equity shares from the Bombay StockExchange Limited vide its letter no. DCS/PREF/MR/PRE/1379/2016-17 dated October 24 2016and got trading approval from Bombay Stock Exchange vide its letter no.DCS/PREF/TP/MR/3717/2016-17 dated November 07 2016.

• The Company has made preferential allotment of shares during the year and dulycomplied the requirements of section 42 and 62 of the Companies Act 2013. Accordinglythe amount raised have been applied for the purpose of which funds were raised.

FIXED DEPOSITS

During the year under review the Company has not accepted any deposits within themeaning of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules.The Company did not have any unclaimed or overdue deposits as on March 31 2017.

HUMAN RESOURCES

Your Company has put in place effective human resource acquisition and maintenancefunction which is benchmarked along with best corporate practices designed to meet theorganizational needs and it takes pride in its highly motivated manpower that contributedits best to the Company. The Employees' relations within the organization have been verycordial and harmonious during the year.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

The Company is committed to maintain highest standards of Corporate Governance andadhere to Corporate Governance requirement set out by SEBI. The Company has alsoimplemented best Corporate Governance practices. Your Company has taken adequate steps toadhere to all the stipulations as per the relevant provisions of Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 for theFY2016-17.

As per SEBI LODR Regulation

• A report on Corporate Governance Report is included as a part of this AnnualReport.

• Certificate of the CFO and Managing Director inter alia confirming thecorrectness of the financial statements compliance with Company's Code of Conductadequacy of the Internal Control measure and reporting of matters to the Audit Committeeis attached and forms part of this report.

• Certificate from the Practicing Company Secretaries confirming the compliancewith the conditions of Corporate Governance is attached to this report.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

The detailed analysis of the operating performance of the Company for the year thestate of affairs and the key changes in the operating environment has been included in theManagement Discussion and Analysis section which forms part of the Annual Report.

HEALTH SAFETY AND ENVIRONMENTAL (HSE) REVIEW

CMI Limited is committed to maintain highest standards in the areas of Health Safetyand Environment. It has made good progress in these areas with no fatal accident reportedduring the Period.

With an aim to certify its operational location CMI Limited Plot No. 71 & 82Sector-06 Faridabad Haryana - 121006 with the integrated Management system OHSAS 18001and ISO 14001 - Occupational Health Safety and Environment CMI Limited has gotexternally accreditation for its said manufacturing location by M/s American QualityAssessors.

MANAGERIAL REMUNERATION:

The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is mentionedin Annexure-6

No employees is in receipt of remuneration as specified under section 197(12) of theAct read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The disclosure of particulars with respect to conservation of energy technologyabsorption research and technology and foreign exchange earnings and outgo pursuant toSection 134(3)(m) of the Companies Act read with Rule 8(3) of the Companies (Accounts)Rules 2014 forming part of the Directors' Report are as under:

A. Conservation of Energy:

a. Energy conservation measures taken:-

A number of energy conservation techniques were initiated at large scale andsuccessfully implemented which helped in improving efficiency levels.

Some of the key initiatives were as follows:-

In the existing manufacturing units the Company continued various initiatives toconserve/reduce environmental impact by adapting to green manufacturing and concept of"Reduce Reuse and Recycle" viz.

• Efficient maintenance and daily monitoring of Capacitor Bank for improvement ofPower Factor.

• Replacing energy inefficient equipments with new technologies which areefficient with AC Drives.

b. The capital investment on energy conservation equipments or any other Additionalinvestments and proposals if any being implemented for reduction of consumption ofenergy:-

No material capital investment on energy conservation equipments or any otherinvestment was made for reduction of consumption of energy during the Financial Year andno separate records were kept for costs incurred on proper maintenance of all machineriesand Equipments.

c. Impact of measures on (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods:-

• The energy conservation measures maintained during the year have resulted intoyearly saving and thereby lowered the cost of production by equivalent amount. Thesemeasures have also led to better pollution control reduced maintenance time and costimproved hygienic condition and consistency in quality and improved productivity.

B. Technology Absorption Adaptation & Innovation

a. Efforts in brief made towards technology absorption adoption and innovationEnergy Conservation up gradation in manufacturing and Efficiency improvement

• Use of energy efficient LED and CFL lamps in whole plant

• Recycling the vacuum Pump cooling water for environment saving

• Company now updated with the manufacturing of all types of cables

• New and upgraded technology has been followed for energy conservation

b. Benefits derived as a result of the above efforts

• Reduction in power usage and thereby reducing cost of production

• Environmental saving

• Improved efficiency and productivity

• Cost and time saving

C. Research and Development
Standalone basis:
Specific areas in which R&D carried out by the Company Product Development and process improvement
Benefits derived as a result of the above R&D The Company can manufacture all types of cables in the area in which it operates
Future plan of action Technology Upgradation
Expenditure on R&D Capital Expenditure: Rs.37.04 Lakhs Recurring Expenditure: Rs.3.8 Lakhs
Consolidated basis:
Specific areas in which R&D carried out by the Company Product Development and process improvement
Benefits derived as a result of the above R&D The Company can manufacture all types of cables in the area in which it operates
Future plan of action Technology Upgradation
Expenditure on R&D Capital Expenditure: Rs.0.89 Lakhs Recurring Expenditure: Rs.0.63 Lakhs

D. Foreign Exchange Earnings and Outgo:

a. Activities relating to export Initiative to increase exports Development of Newexport markets for Products and Services and Export Plan.

The Company has continued to maintain its focus and avail of export opportunities basedon economic considerations. During the year on standalone basis the Company has exportsworth Rs.24.38 Lakhs from export of Cables.

The Company is continuously exploring new international markets and has exported sampleorders. During the year on consolidated basis the Company has exports worth Rs.63.15 Lakhsfrom export of Cables.

b. Total Foreign Exchange Expenditure:

Standalone basis: Amount in Rs.
a. CIF value of imports 3058.22 Lakhs
b. Expenditure in Foreign Currency 9.88 Lakhs
Total Foreign Exchange Expenditure:
Consolidated basis: Amount in Rs.
a. CIF value of imports 3238.7 Lakhs
b. Expenditure in Foreign Currency 9.88 Lakhs

ENVIRONMENTAL REVIEW

The Company has a defined environmental policy which is being followed rigorously byone and all across the organization. There were no environmental issues at the CMI plantand the statutory compliance was in line with Governmental requirements.

The Pollution Control parameters as defined by the State Pollution Control Board weretotally adhered to and effluent discharge levels were well within the prescribed limits.Air pollution has been tested and was in line with the requirement. Noise pollution levelwas contained by fixing all the generators in sound proof acoustic enclosures.

INDUSTRIAL RELATIONS

The Company has taken various steps to improve productivity across organization.Industrial relations remained harmonious at the manufacturing unit of CMI.

ACKNOWLEDGEMENTS

Your Directors place on record their gratitude to the Central Government StateGovernments and Company's Bankers for the assistance co-operation and encouragement theyextended to the Company. Your Directors also wish to place on record their sincere thanksand appreciation for the continuing support and unstinting efforts of Investors VendorsDealers Registrar and Transfer Agent Financial Institutions Business Associates Mediaand Employees at all levels in ensuring an excellent all around operational performance.

By Order of the Board
CMI LIMITED
Place: New Delhi Amit Jain
Date: 22.11.2017 Chairman & Managing Director
Registered Office: (DIN: 00041300)
Flat No. 501 - 503 5th Floor New Delhi House
27 Barakhamba Road New Delhi -110001
Email Id: info@cmilimited.in