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Commercial Engineers & Body Builders Company Ltd.

BSE: 533272 Sector: Engineering
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OPEN 36.50
VOLUME 31100
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P/E 26.57
Mkt Cap.(Rs cr) 326
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Sell Price 0.00
Sell Qty 0.00
OPEN 36.50
CLOSE 37.00
VOLUME 31100
52-Week high 43.25
52-Week low 11.45
P/E 26.57
Mkt Cap.(Rs cr) 326
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Commercial Engineers & Body Builders Company Ltd. (CEBBCO) - Director Report

Company director report

To the Members of

Commercial Engineers & Body Builders Co. Ltd

The Directors are presenting herewith the 40 Annual Report of the Companytogether with the Audited Accounts for the year ended 31 March 2020.

Financial Highlights

(Rs. in Lakhs)

Particulars For the year ended For the year ended
31 March 2020 31 March 2019
Revenue from Operations 12574.39 21579.96
Total Sales 12574.39 21579.96
Other Income 329.35 75.91
Total Income 12903.74 21655.87
Operating Expenses 12365.70 20389.60
Depreciation and Amortisations 831.74 1037.91
Finance Cost 617.17 2214.45
Proift/(Loss) before Tax and Exceptional Items (910.87) (1986.09)
Exceptional Items- (Gain)/Loss net (655.12) (10853.47)
Profit/(Loss) for the Year before Tax (255.75) 8867.38
Tax adjustments related to earlier years -241.78 0.00
Profit/(Loss) for the Year (13.97) 8867.38
Other Comprehensive Income/(Loss) (27.37) (1.20)
Total Comprehensive Income/Loss) for the year (41.34) 8866.18

Performance at glance

During the last financial year 2018-19 debt restructuring along with change inownership took place. With these positive changes the company started the activities withvigor.

The company re-registered the wagon manufacturing facility and was qualified forG-105Registration. With this the Company has given renewed focus to Railway Wagonbusiness.

The total sales during the year were Rs 125.8 crores as compared to 215.8 crores forlast year. The reduction is mainly attributable to significant slowdown in commercialvehicle industry affecting the tipper orders from OEMs. This was partly compensated byRailway Wagon shipment.

The Loss before tax and exceptional items for the current year is Rs 9.1 crores ascompared to Rs 19.9 crores for last year mainly attributable to lower sales in the tippersegment.

Please refer to Management Discussion and Analysis for comments on financialperformance.

COVID-19 – Impact on business.

Consequent to nation-wide lock down the Company's manufacturing facilities remainedshut. As a result major shipments for the month of March 2020 were impacted. The Companyhas resumed its operations in phased a manner from 25 April 2020 with reduced strength ofmanpower as per directives of the respective state governments or central governmentguidelines as applicable.

To effectively respond to and manage our operations through this crisis the Companyhas taken adequate measures in terms of use of safety masks and entry level scanning. Thenew 'work-from-home' model is implemented mainly for employees working at administrativeoffices.

Future Outlook

Due to lock down the GDP growth for the current year is estimated to come downsignificantly affecting the demand.

The commercial vehicle OEMs are facing severe challenges due to slowdown and change tonew emission norms applicable from current fiscal.

For Railway wagon business the company will continue to manufacture current orders inhand; 500 wagons from Indian Railway and 113wagons from private operators.

Since there is no complete visibility on Covid situation it is difficult to estimatethe impact on future business. The Company would closely monitor such developments infuture economic conditions and consider their impact on financial statement of therelevant periods.

Change in the Nature of Business If any

The Company has not undergone any change in the nature of the business during theFinancial Year.

Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred

during the end of the Financial Year of the Company to which the financial statementsrelate and the date of the report


In view of the losses incurred before the exceptional item no dividend has beendeclared for the FY 2019-2020

Changes in Share Capital

During the year the Company had forfeited 0.00001% Non-Convertible CumulativeRedeemable Preference Shares due to nonpayment of unpaid calls. These preference shareswere issued to erstwhile promoters in the year 2014-15 amounting to Rs. 2000 Lakhs ofwhich only Rs. 1 300 Lakhs was paid up. Out of the paid-up amount Rs. 655.12 Lakhs wasclassified as liability component of compound financial instruments as under therequirement of Ind AS 109. Pursuant to the forfeiture the Company had recognized a gainof Rs. 655.12 Lakhs as 'Exceptional Item' in the financial results of the previous period.

Directors and KMP

The Board of Directors comprises

Sr. No. Particulars Designation
1. Mr. Prakash Y Gurav Independent Director
2. Mr. M Venkat Rajarao Independent Director
3. Ms. VineetaShriwani Independent Director
4. Mr. Abhishek Jaiswal Whole time Director & C.E.O.
5. Mr. Asim Ranjan Das Gupta Non-Executive Director (w.e.f. 22 January 2019)
Tendered resignation on 22.05.2019
6. Mrs. Madhuchhanda Chatterjee Non-Executive Non-Independent Director (w.e.f. 22.05.2019)
7. Mr. Ganesan Raghuram Non-Executive Independent Director (w.e.f. 19.05.2020)

During the year following changes have taken place in Board of Directors due toresignation/cessation:

Mr. Asim Ranjan Das Gupta was appointed as Non-Executive Director on the Board ofDirectors of the Company in accordance with

Section 152 161 of the Act with effect from January 22 2019

Mr. Asim Ranjan Das Gupta tendered his resignation vide letter Dated May 22 2019 fromthe Board of CEBBCO due to personal


Dr. Mrs. Madhuchhanda Chhatterjeewas appointed as Non- Executive Non- IndependentDirector on the Board with effect from May 22 2019.

Dr. Chatterjee is acting as Executive Director of Anamika Kala Sangam a premiercultural organization of Kolkata. She has been a Lecturer in English in the Department ofEnglish Rabindra Bharati University and has been into academics Dr. Chatterjee hasworked as a Consultant in the Ministry of Culture Govt. Of India during the 150 yearsBirth Celebrations of Rabindranath Tagore steering the plans made by the Ministry. Shehas also been the Nodal Officer of a Digitization Project under the Indira National Centrefor the Arts Govt. of India.

In accordance with the provisions of the Act and other applicable provisions Mrs.Madhuchhanda Chatterjee Director of the

Company retires by rotation at the ensuing Annual General Meeting and being eligiblehas offered herself for re-appointment.

Mr. Ganesan Raghuram inducted as an Additional Independent Director on the Board ofCEBBCO w.e.f. 19.05.2020 pursuant the provision as contained in the LODR that companywithin the first 2000 listed entity based on the market capitalization must have at least6 (Six) Directors on the Board based on the recommendation of the NRC Committee Mr.Ganesan Raghuram was inducted as the member of the Board as an additional director subjectto approval of the Shareholders in the ensuing General Meeting to be held in the month ofSeptember 2020. Brief profile of Mr. Ganesan Raghuram forms the part of the Notice of theAnnual General Meeting.

Declaration by Independent directors

We confirm that the Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 as well as SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI LODR"). The Company hasdevised a Policy for performance evaluation of Independent Directors Board Committeesand other individual Directors which include criteria for performance evaluation of thenon-executive directors and executive directors.

The Board took on record the declaration and confirmation submitted by the independentdirectors regarding their meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under Regulation 25 ofthe Listing Regulations2015.

The Ministry of Corporate Affairs vide its circular dated 22 October 2019 furtheramended the Companies (Appointment and Qualification of Directors) Rules 2014 byrequiring an independent director to apply online within 1 May 2020 to the IndianInstitute of Corporate Affairs for inclusion of his/her name in the data bank for suchperiod till he/she continues to hold office of an independent director in any Company. Theindependent directors were also required to submit a declaration of compliance in thisregard. All the independent directors of the Company have submitted the declaration withrespect to the same.

Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2020 are: Mr. Abhishek Jaiswal Whole time Director and ChiefExecutive Officer Mr. Sanjiv Keshri Chief Financial Officer (w.e.f. 10.08.2019) and Mr.Amit K Jain Company Secretary.

The details of programs for familiarization of Independent Directors with the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company and related matters are put up on thewebsite of the Company at the link:

Board Evaluation

Pursuant to the provisions of the Act and the Listing Regulations the evaluation wasdone on the basis of criteria to cover

underlying objective for evaluation.

The performance evaluation of the Directors was completed during the year under review.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors and Non-Executive Director. The Board of Directorsexpressed their satisfaction with the evaluation process.

Managerial Remuneration

In compliance with the requirements of Section 197(12) of the Act read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement containing the remuneration details of Directors and employees is annexed as AnnexureIV.

Meetings of the Board of Directors

During the FY 2019-20 four meetings of the Board of Directors were held. For detailsof meetings of the Board please refer to the

Corporate Governance Report forming part of this report.

Board Committees

There are various Board constituted Committees as stipulated under the Act and ListingRegulations namely Audit Committee Nomination and Remuneration Committee StakeholdersRelationship Committee and Corporate Social Responsibility (CSR) Committee. Brief detailspertaining to composition terms of reference meetings held and attendance thereat ofthese Committees during the year has been enumerated in Corporate Governance report.

Audit Committee Recommendations

During the year all recommendations of Audit Committee were approved by the Board ofDirectors.

Directors Responsibility Statement

Your Directors state that:

a) in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards

have been followed along with proper explanation relating to material departures.;

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 2020 and of the profit orloss 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 Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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 operating effectively; 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.

Internal Financial Control Systems and their Adequacy

The Company has maintained adequate internal financial controls over financialreporting. These includes policies and procedures – (a) pertaining to the maintenanceof records that are reasonably detailed accurately and fairly reflects the transactionsand dispositions of the assets of the Company (b) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 as amended from time to time and that receipts andexpenditures of the Company are being made only in accordance with authorization ofmanagement and directors of the Company and (c) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material impact on the financial statements. Suchinternal financial controls over financial reporting were operating effectively as ofMarch 31 2020

Details in respect of frauds reported by auditors under sub section (12) of section 143other than those which reportable

to the Central Government

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 there under.

No fraud has been reported by the Auditors to the Audit Committee or the Board.

Details of Subsidiary Joint Venture or Associates

The Company does not have any subsidiary company associates' company or joint venture.Accordingly a statement of the

subsidiary Companies/ Associate Companies/Joint Ventures as per Form AOC-1 is notrequired to be filed with MCA/ROC.


The Company has not accepted any public deposits during the Financial Year ended March31 2020 and as such no amount of

principal or interest on public deposits was outstanding as on the date of the balancesheet.

Details of deposits not in compliance with the requirements of the Act

Since the Company has not accepted any deposits during the Financial Year ended March31 2020 there has been no non-

compliance with the requirements of the Act.

Extract of the Annual Return

The extract of Annual Return in Form MGT -9 for the Financial Year 2019-20 has beenenclosed with this report as Annexure III.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance Requirements set out by SEBI. As per Regulation 34(3)read with Schedule V of the Listing Regulations a separate section on corporategovernance practices followed by the Company together with a certificate from theCompany's Auditors confirming compliance forms an integral part of this Report.

Particulars of Loans given Investments made guarantees given

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan

or guarantee or security is proposed to be utilized by the recipient are provided inthe financial statements.

Contracts and Arrangements with Related Parties

No related party transactions (RPTs) were entered into by the Company during thefinancial year which attracted the provisions of section 188 of the Companies Act 2013.There being no 'material' related party transactions as defined under regulation 23 ofListing Regulations 2015 there are no details to be disclosed in Form AOC-2 in thatregard.

During the year 2019-20 pursuant to section 177 of the Companies Act 2013 andregulation 23 of Listing Regulations 2015 all

RPTs were placed before the Audit Committee for its approval.

Members are requested to refer to note no. 43 forming part of the Audited FinancialStatements which sets out related party


A detailed disclosure of these transactions with the Related Parties is annexed withthis Report in Form AOC-2 as Annexure V

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may

be accessed on the Company's website at thelink

The Policy intends to ensure that proper reporting; approval and disclosure processesare in place for all transactions between the Company and Related Parties. This Policyspecifically deals with the review and approval of Material Related Party Transactionskeeping in mind the potential or actual conflicts of interest that may arise because ofentering into these transactions. All the Related Party Transactions entered in theOrdinary Course of Business and at Arm's Length were reviewed and approved by the AuditCommittee. All Related Party Transactions are placed before the Audit Committee for itsreview on a quarterly basis. All Related Party Transactions are subjected to independentreview by a reputed accounting firm to establish compliance with the requirements ofRelated Party Transactions under the Act and Listing Regulations.

Significant and Material orders passed by the Regulators and Courts

No significant and material order has been passed by theregulators courts tribunalsimpacting the Company's operations in


Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Out Go in terms of section 134 (3)(m) of the act read with rule 8 of theCompanies (Accounts) Rules2014 forming part of the Director report for the year endedMarch 31st 2020.

Conservation of Energy:

1. Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.

2. No specific investment has been made in reduction in energy consumption.

3. As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.

Since the Company does not fall under the list of industries which are required tofurnish this information in Form A annexed to the

aforesaid Rules the information has not been given.

Technology Absorption

The Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company persistently endeavors towards improvement in quality of itsproducts.

Foreign exchange outgo and earning

During the year under the review the Company had Foreign Exchange Earnings Nil andForeign Exchange Outgo Nil.

Risk Management

Pursuant to section 134 (3) (n) of the Companies Act 2013 & Regulation 21 of thelisting of Debt Regulation a Risk Management committee is compulsorily to be constitutedby Top 500 Listed entities.As your company comes under first 2000 listed entities markhence there is no statutory requirements of constituting a Risk Management Committee.Please refer Corporate Governance Report.

(Refer Management Discussion and Analysis for potential risk and measures taken by thecompany to overcome risk)

Corporate Social Responsibility (CSR)

Due to paucity of profits the Company has not been able to undertake any CSR activityduring the year.

A Corporate Social Responsibility Policy (CSR Policy) demonstrating the activities tobe undertaken by the Company has been formulated by the Corporate Social ResponsibilityCommittee (CSR Committee)and recommended to the Board which has been approved by theBoard.

The CSR Policy may be accessed on the Company's website at the link:

The Annual Report on CSR activities has been annexed herewith as ANNEXURE – I

Human Resources

The company continued its focus on attracting new talents while investing indevelopment to helpemployees acquire new skills explore new roles and realize theirpotential.

The Company takes pride in the commitment competence and dedication of its employeesin all areas of the business. The Company has a structured induction process at alllocations and management development programs to upgrade skills of manager. Objectiveappraisal systems based on key result areas (KRAs) are in place for senior managementstaff.

CEBBCO believes in the potential of people to go beyond and be the game-changing forcefor business transformation and success. This potential is harnessed by fostering an openand inclusive work culture that enables breakthrough performance and comprehensivedevelopment of employees through the three pillars of Leading Self Leading Teams andLeading Business.


Presentation of financial statements

The financial statements of the Company for the year ended 31 March 2020 have beendisclosed as per Schedule III of the Companies Act 2013.

Indian Accounting Standards 2015

The annexed financial statements comply in all material aspects with Indian AccountingStandards (Ind AS) notified under section 133 of the Companies Act 2013 Companies(Indian Accounting Standards) Rules 2015 and other relevant provisions of the CompaniesAct 2013.

Statutory Auditors

M/s B S R & Co. LLP Chartered Accountants were appointed as Statutory Auditors ofthe Company at the 37th Annual General meeting (AGM) held on September 27 2017 to holdoffice up to 42nd AGM. The Company wanted to align its Auditors with the Auditors ofInvestor Company which was discussed with M/S BSR & Co. LLP. Accordingly theytendered resignation on August 14 2020 as statutory auditors of the Company with effectfrom the conclusion of the board meeting wherein the results for the limited review forquarter ended 30 June 2020 would be approved.

The resignation was considered by the Audit Committee and Board of Directors on August14 2020 and the resignation was


The Audit Committee and Board of Directors in their meetings held on August 24 2020approved the appointment of M/s. Walker Chandiok& Co LLP Chartered Accountants (ICAIFirm Registration No. 001076N/N500013) as Statutory Auditors of your Company to fill thecasual vacancy caused by the said resignation. The appointment will be effective till theconclusion of the forty fifth Annual General Meeting of the company.

Their appointment will be subject to approval by the shareholders in the ensuing (AGM).Please refer to the notice of AGM proposing shareholders' approval of appointment of M/s.Walker Chandiok & Co LLP Chartered Accountants (ICAI Firm Registration No.001076N/N500013) as Statutory Auditors of your Company.

The Auditors' Report for the financial year ended 31st March 2020 does not containany qualification reservation or adverse remark. The Notes on financial statementreferred to in the Auditor's Report are self- explanatory and do not require any furthercomments and explanations.

Secretarial Audit

The Board has appointed Mr. S.K. Gupta Practicing Company Secretary to conductSecretarial Audit for the financial year 2019-2020. The Secretarial Audit Report for thefinancial year ended March 31 2020 is annexed herewith marked as ANNEXURE II tothis Report. The Secretarial Audit Report does not contain any qualification reservationor adverse remark. The Secretarial Audit Report is self-explanatory and do not call forany further clarification.

In addition to the above and pursuant to SEBI circular dated 8 February 2019 a reporton secretarial compliance by Mr. S. K Gupta for the year ended 31 March 2020 is beingsubmitted to stock exchanges. There are no observations reservations or qualifications inthe said report.

Secretarial Standards

Pursuant to the approval given on 10 April 2015 by the Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings(SS-2) came into effect from 1 July 2015.The said standards were further amended w.e.f. 1October 2017. The Company is in compliance with the same. The Company complies with theapplicable Secretarial Standards issued by the 'Institute of Company Secretaries ofIndia'.


CSR Committee

The CSR Committee comprises Mr. Manchi Venkat Raja Rao (Chairman) Mr. P. Y.Gurav(Member) and Mr. Abhishek Jaiswal

(Member) as other members.

Audit Committee

The Audit Committee comprises Mr. Prakash Yashwant Gurav (Chairman) Mr. Manchi VenkatRaja Rao (Member) Mr. Abhishek Jaiswal (Member) and Ms. Vineeta Shriwanias other members.All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics Officer and other Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the Ethics Officer and otherForce or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistleblower policy may be accessed on the Company's website at thelink


There is no employee in the company whose particulars are required to be disclosedunder the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of theCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and amendmentthereto.

Prevention of Sexual Harassment at Workplace under Sexual Harassment of Women &Workplace (Prevention

prohibition & redressal) Act 2013

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under. During theyear under review there were no complaints pertaining to sexual harassment.

Awards & Recognition

We are proud to inform you all that in the month of April 2019 the Company was inconferred award by the Volvo Eicher

Commercial vehicle (VECV Ltd.) for Best Performer in Applications Category.


Your Directors take this opportunity to express their gratitude to the customersemployees bankers /financial institutions and

vendors for their continued support and guidance.

For on behalf of the Board
Place : Jabalpur
Date : 24 August 2020 P.Y. Gurav Abhishek Jaiswal
Director Whole Time Director & C.E.O.
(DIN: 02004317) (DIN: 07936627)