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Commercial Syn Bags Ltd.

BSE: 539986 Sector: Industrials
NSE: N.A. ISIN Code: INE073V01015
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VOLUME 12000
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52-Week low 30.15
P/E 7.77
Mkt Cap.(Rs cr) 50
Buy Price 41.00
Buy Qty 6000.00
Sell Price 42.50
Sell Qty 3000.00
OPEN 42.50
CLOSE 42.50
VOLUME 12000
52-Week high 46.00
52-Week low 30.15
P/E 7.77
Mkt Cap.(Rs cr) 50
Buy Price 41.00
Buy Qty 6000.00
Sell Price 42.50
Sell Qty 3000.00

Commercial Syn Bags Ltd. (COMMERLSYNBAGS) - Director Report

Company director report

BOARDS’ REPORT

To

The Members

Commercial Syn Bags Limited

The Directors take pleasure in presenting the 34th Annual Report together with theaudited financial statements for the year ended 31st March 2018.

HIGHLIGHTS OF FINANCIAL PERFORMANCE

Total revenue for the year was Rs. 16156.62 Lakhs as compared to Rs. 12098.16 Lakhsincreased by 33.55%

Net Revenue from operations for the year was Rs. 16097.25 Lakhs as compared to Rs.11901.47 Lakhs in the previous year increased by 35.25%

Profit before tax for the year was Rs. 898.20 Lakhs as compared to Rs. 758.84 Lakhs inthe previous year increased by 18.36%

Profit after tax for the year was Rs. 615.93 Lakhs as compared to Rs. 531.70 Lakhs inprevious year in the previous year increased by 15.84%

SUMMARISED PROFIT AND LOSS ACCOUNT ( Rs. in Lakhs)
Particulars Year ended
31.03.2018 31.03.2017
Total Revenue (Revenue from operations and other income) 16156.62 12098.16
Profit Before Tax (PBT) 898.20 758.84
Provision for Tax (282.27) (227.14)
Profit After Tax (PAT) 615.93 531.70
Balance brought forward from previous year 2423.88 1892.20
Less: Prior Period Taxations 0.00 (0.02)
Surplus carried to the next year’s account 3039.81 2423.88
Earning per share (Basic and Diluted) (Amount in Rs.) 5.21 4.87

STATE OF THE COMPANY’S AFFAIRS & REVIEW OF OPERATIONS

The Company is carrying business of manufacturer producers processors importersexporters buyers and sellers of FIBC BOPP Bulk Bags Poly Tarpaulin Woven Sacks/BagsBox Bags PP/HDPE Fabric Liner and Flexible Packaging etc. from its Plants located atPithampur District-Dhar (M.P) and the company is also having a solar power generatingsystem installed in Sitamau District-Mandsaur (M.P.) and the power generated is beingused as captive consumption at its manufacturing units hence no revenue is beinggenerated from this segment. The Company has also started business activities relating totrading of granules as DCA cum Consignment Stockiest of OPaL and has identified it as aseparate business segment.

Except that during the year under review there has been no change in the nature of thebusiness activities of the Company.

UPDATES ON ONGOING PROJECTS:

1. Commencement of commercial production at company’s SEZ Unit situated atPithampur (MP):

Commercial production at Company’s SEZ Unit situated at Indore Special EconomicZone Plot No. 15 to 18 Phase-1 Sector-III Pithampur (MP); has been successfullycommenced w.e.f. 22nd April 2018 with revised estimated total cost of Rs.3460 Lakhs andthe company has expanded operations at its existing Unit SEZ situated at Pithampur (MP);through capacity addition of 3900 MT p.a. and setting up of complete manufacturingfacilities by installation of Tape Line and Looms with clean room facilities formanufacturing of Food Grade FIBC Bags. The total production capacity (all units) of thecompany has been increased from 13100 MT p.a. to 17000 MT p.a.

2. Appointment as Training Partner/PIA under DDU-GKY for Skill Development Trainingand Placement Programme of MoRD

(Govt. of India):

Company has been appointed as Project Implementing Agency (PIA)/Training Partner andassigned the work of execution and implementation of the skill development programme underDeen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) a skill development and placementinitiative of the Ministry of Rural Development (MoRD) Government of India. It is a partof the National Rural Livelihood Mission (NRLM) - tasked with the dual objectives ofadding diversity to the incomes of rural poor families and caters to the careeraspirations of rural youth. Total 1540 candidates belonging to rural areas of variousdistricts of Uttar Pradesh will be covered under this project and will be providedindustrial and job oriented training by the company at training centre established for thepurpose at Nawabganj District- Gonda (UP). This move will help the company to get bettertrained workers for its operations.

CREDIT RATING:

CRISIL Limited vide their letter number CSBL/203924/BLR/071801126 dated 27th July2018; has reviewed and reaffirmed the following

ratings to the bank loan facilities of Rs. . 71.50 Crores availed by the Company:

Total Bank Loan Facilities Rated Rs. 71.5 Crore (Enhanced from Rs. 62.55 Crore)
Long Term Rating CRISIL BBB/Stable (Reaffirmed)
Short-Term Rating CRISIL A3+ (Reaffirmed)

The aforesaid rating is valid till 31st March 2019.

DIVIDEND

To strengthen the financial position and funding to the ongoing projects of theCompany no dividend is recommended by the Board for the Financial Year 2017-18. (Previousyear Nil)

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of the knowledge and belief and according to the information andexplanations obtained by them your Directors confirms the following statements in termsof Section 134(3)(c) of the Companies Act 2013:

a. that in the preparation of the annual accounts for the year ended 31st March 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

b. that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently. Judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2018.

c. that they 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. that they have prepared the Annual Accounts on a going concern basis;

e. that they have laid down internal financial controls for the company and suchinternal financial controls were adequate and were operating effectively.

f. that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and such system are adequate and operating effectively.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March 2018 was Rs. 1181.74Lakhs divided into 11817400 equity shares of Rs. 10/- each. During the year underreview the Company has not issued equity shares or shares with differential voting rightsor granted stock options or sweat equity.

TRANSFER TO RESERVES

During the year under review the company has not transferred any amount to the generalreserves. However the Company has transferred

Rs. 30.00 Lakhs received as Capital Subsidy to Capital Reserve during the year underreview. (In previous year your company has transferred Security Premium of Rs. 406.53Lakhs (net of after writing off public issue expenses of Rs. 40.35 Lakhs)

FINANCE

Cash and Cash equivalent as at 31st March 2018 is Rs. 269.73 Lakhs (Previous year Rs.26.27 Lakhs).Your Company continues to focus on management of its working capitalReceivables inventories and other working capital parameters are kept under continuousmonitoring.

Cash & Cash equivalents as at 31st March 2018 includes Rs. 246.47 Lakhs receivedas advance in the form of aid from Government to carry out skill development and placementproject under DDU-GKY which is kept in current account.

Your directors place on record their appreciation to Bank of India Bank of Baroda andHDFC Bank Limited bankers of the Company for providing timely support for short term andlong term financial requirements of the company.

DEPOSITS

Your Company has not accepted deposit from the public falling within the ambit ofsection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 and there were no remaining unclaimed deposits as on 31st March 2018. Further theCompany has not accepted any deposit or loans in contravention of the provisions of theChapter V of the Companies Act 2013 and the Rules made there under.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not provided any loan and guarantees and also not made any investmentpursuant to Section 186 of the Companies Act 2013.

CSR INITIATIVES

In view of the profits and turnover of the company your Company was required toundertake CSR projects during the year 2017-18 under the provisions of section 135 of theCompanies Act 2013 and the rules made their under. As part of its initiatives under"Corporate Social Responsibility (CSR)" the Company has undertaken variousactivities which are in accordance with CSR Policy of the Company and Schedule VII of theCompanies Act 2013.The Annual Report on CSR activities is annexed herewith as "AnnexureA".

OCCUPATIONAL HEALTH & SAFETY (OH&S)

This initiative involved positive engagement of personnel on the plant at every level.With regard to contractor safety two key areas of focus were identified namely FacilityManagement for the contractors’ employees and Equipment Tools & MaterialManagement. The Facility Management initiative was implemented to ensure adequate welfarefacilities for contract labor such as washrooms with bathing facilities rest roomsavailability of drinking water etc. The Equipment Tools & Material Management Programensured that the tools used by contractors were safe. The process of screening ofcontractors was made more stringent to ensure that the contractors were aligned with theCompany’s objectives to ensure ‘Zero Harm’.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION

AND REDRESSAL) ACT 2013

As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (‘Act’) and Rules made thereunder yourcompany has constituted Internal Complaints Committees (ICC). Statement showing the numberof complaints filed during the financial year and the number of complaints pending as onthe end of the financial year is shown as under: -

Category No. of complaints pending at the beginning of F.Y. 2017-18 No. of complaints filed during the F.Y. 2017-18 No. of complaints pending as at the end of F.Y. 2017-18
Sexual Harassment Nil Nil Nil

Since there is no complaint received during the year which is appreciable as themanagement of the company endeavor to provide safe environment for the female employees ofthe company.

MAINTENANCE OF COST RECORDS :

The company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of section 148 of the Companies Act 2013.

RISK MANAGEMENT POLICY AND INTERNAL CONTROL ADEQUACY

The Company is operating in manufacturing and trading of FIBC Bulk Bags PolyTarpaulin Woven Sacks/Bags Box Bags PP/HDPE Fabric Liner and Flexible Packaging etc.The major risks factors involved in the manufacturing and trading process is constantlymaintaining high quality standards fluctuations in the price of raw materials risks frominternational competitors fluctuations in currency rates etc. Other than this thegovernment policy local area authority taxation policy may adversely affect theprofitability of the Company subject to various process and clearance etc. as may bedecided by the concerning State Government. Further general market conditions relating tothe demand supply and price relating to the products of the company also affect thebusiness operations of the Company.

1. Internal Financial Control & its effectiveness

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has appointed Internal Auditors and the scopeand authority of the Internal Audit (IA) function is defined in the procedure andappointment letter. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman of the Audit Committee of the Board.

Based on the report of internal audit and process the company undertakes correctiveaction in their respective areas and thereby strengthens the controls. Significant auditobservations and corrective actions thereon if any are presented to the Audit Committeeof the Board.

2. Vigil Mechanism/Whistle Blower Policy

The Company has a vigil mechanism named vigil mechanism/whistle blower Policy to dealwith instance of fraud and mismanagement if any. The details of the Vigil MechanismPolicy are annexed to the Board Report as "Annexure B" and are alsoposted on the website of the Company. (Link -http://comsyn.com/wp-content/uploads/2017/10/CSBL_Vigil-Mechanism-Whistle-Blower-Policy.pdf)

SUBSIDIARY ASSOCIATE AND JOINT VENTURE OF THE COMPANY

The Company does not have any subsidiary associate or joint venture during thefinancial year 2017- 18 as well as at the beginning or closing of the financial year.Therefore the financial statement is prepared on standalone basis and the requirement fordisclosure in the Form AOC-1 is not applicable. However the Company is an associate ofSuper Sack Pvt. Ltd. which is holding 3114000 equity shares representing 26.35% of totalpaid up equity share capital of the Company as on 31st March 2018.

BOARD OF DIRECTORS THEIR MEETINGS & KMPs

1. Constitution of the Board

The Board of directors are comprising of total 6 (Six) Directors which includes3(Three) Independent and 1 (One) Women director. The Chairman of the Board is Promoter andManaging Director. The Board members are highly qualified with the varied experience inthe relevant field of the business activities of the Company which plays significantroles for the business policy and decision making process and provide guidance to theexecutive management to discharge their functions effectively.

2. Board Independence

Our definition of ‘Independence’ of Directors is derived from Regulation 16of SEBI (LODR) Regulations 2015 and Section 149(6)

of the Companies Act 2013. The Company is having following independent directors;

1. Mr. Hitesh Mehta

2. Mr. Neetesh Gupta (From 20.06.2015 to 10.05.2017)

3. Mr. Milind Mahajan (w.e.f. 10.05.2017)

4. Mr. Chintan Pushpraj Singhvi

As per provisions of the Companies Act 2013 Independent Directors were appointed fora term of 5 (five) consecutive years and shall

not be liable to retire by rotation.

3. Declaration by the Independent Directors

All the Independent Directors have given their declaration of Independence stating thatthey meet the criteria of independence as prescribed under section 149(6) of the CompaniesAct 2013.Further that the Board is of the opinion that all the independent directorsfulfill the criteria as laid down under the Companies Act 2013 and the SEBI (LODR)Regulations 2015 during the year 2017-18.

4. Directors liable to retire by rotation

In accordance with the provisions of the Companies Act 2013 and in terms of theArticles of Association ofthe Company Mr.Virendra Singh Pamecha Whole Time Director(DIN:07456367) of the Company is liable to retire by rotation at ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. The Board recommends to passnecessary resolutions for approval of the members as set out in the notice of the annualgeneral meeting.

5. Changes in Directors and Key Managerial Personnel

Mr. Anil Choudhary Chairman & Managing Director Mrs. Ranjana Choudhary WholeTime Director Mr. Virendra Singh Pamecha Whole Time Director Mr. Ravindra ChoudharyCEO Mr. Abhishek Jain CFO and CS Megha Parmar Company Secretary & ComplianceOfficer have been categorized as Key Managerial Personnel within the meaning of section203 of the Companies Act 2013.

There was no change in the composition of Directors and Key Managerial Personnel duringthe Financial Year 2017-18 except the following:

1. The tenure of Mrs. Ranjana Choudhary (DIN: 03349699) Whole Time Director wasexpired on 31st May 2017 therefore upon the recommendation of Nomination andRemuneration Committee the Board of Directors at their meeting held on 9th March 2017has re-appointed her for a further term of 5 (Five) years w.e.f. 1st June 2017. Herappointment was also approved by the members at their 33rd Annual General Meeting held on22nd September 2017.

2. Mr. Neetesh Gupta (DIN: 06689342) Independent Director has resigned from the Boardw.e.f. 10th May 2017 vide his resignation letter dated 2nd May 2017. The Board ofDirectors at their meeting held on 10th May 2017 accepted his resignation.

3. Upon the recommendation of Nomination and Remuneration Committee of the Board theBoard of Directors at their meeting held on 10th May 2017 has appointed Mr. MilindMahajan (DIN:00155762) as Additional Director under the category of Independent Directorfor a term of 5 (Five) years w.e.f. 10th May 2017. His appointment was also approved bythe members at their 33rd Annual General Meeting held on 22nd September 2017.

6. Meetings of the Board

The Board meets at regular intervals to discuss and decide on company/business policyand strategy apart from other Board business. The notice of Board meeting is given well inadvance to all the Directors. Meetings of the Board are held in Indore at the RegisteredOffice. The Agenda of the Board/Committee meetings is circulated at least a week prior tothe date of the meeting. However in case of urgent business needs notice & agenda ofBoard/Committee meetings were circulated on shorter notice period with consent andpresence of Independent Directors at the Meeting. The Agenda for the Board and Committeemeetings includes detailed notes on the items to be discussed at the meeting to enable theDirectors to take an informed decision. The Board met 5 (Five) times in theFinancial Year 2017-18 viz.10th May 2017; 29th May 2017; 4th August 2017; 8thNovember 2017; 28th February 2018.The maximum interval between any two meetings did notexceed 120 days.

7. Separate Meeting of Independent Directors:

As stipulated by the Code of Independent Directors under the Companies Act 2013; aseparate meeting of the Independent Directors of the Company was held on 8th November2017 to review the performance of Non-Independent Directors (including the Chairman) andthe entire Board. The Independent Directors also reviewed the quality content andtimeliness of the flow of information between the Management and the Board and its’Committees which is necessary to effectively and reasonably perform and discharge theirduties.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Policy of the Company on Directors’ appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a Directorand other matters provided under section 178(3) uploaded on company’s website (Link-http://comsyn.com/wp-content/uploads/2018/08/RevisedNOMINATION-AND-REMUNERATION-POLICY-2-1.pdf.)Due to changes in the Regulation 19 of the SEBI (LODR) Regulations 2015 and section 178of the Companies Act 2013 the Committee amended the Nomination and Remuneration Policyin compliance with these amendments and same was approved and adopted by the Nomination& Remuneration Committee and Board w.e.f. 2nd August 2018.

1. Annual evaluation by the Board

The evaluation framework for assessing the performance of directors comprises of thefollowing key areas:

i. Attendance of Board Meetings and Board Committee Meetings

ii. Quality of contribution to Board deliberations

iii. Strategic perspectives or inputs regarding future growth of company and itsperformance

iv. Providing perspectives and feedback going beyond the information provided by themanagement

v. Commitment to shareholder and other stakeholder interests

The evaluation involves self-evaluation by the Board Member and subsequently assessmentby the Board of directors. A member of the Board will not participate in the discussion ofhis/her evaluation.

COMMITTEES OF THE BOARD

The Company has following five Committees:

(a) Audit Committee:

The Company has constituted Audit Committee as per requirement of section 177 of theCompanies Act 2013 and Regulation 18 of the SEBI (LODR) Regulations 2015. The terms ofreference of Audit Committee are broadly in accordance with the provisions of SEBI (LODR)Regulations 2015 and Companies Act 2013.The constitution of the Audit Committee wasapproved by the Board of Directors and was re-constituted as per requirements. The AuditCommittee comprises of the following Directors of the Company:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Hitesh Mehta Independent Director Chairman
2. Mr. Neetesh Gupta (till 10th May 2017) Independent Director Member
3. Mr. Milind Mahajan (w.e.f. 10th May 2017) Independent Director Member
4. Mr. Anil Choudhary Chairman & ManagingDirector Member

(b) Nomination and Remuneration Committee:

The Company has constituted a Nomination and Remuneration Committee in accordance withsection 178 of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. Theconstitution of the Nomination and Remuneration Committee was approved by a Meeting of theBoard of Directors and was re-constituted as per requirements. The Nomination andRemuneration Committee comprises of the following Directors of the Company:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Hitesh Mehta Independent Director Chairman
2. Mr. Neetesh Gupta (till 10th May 2017) Independent Director Member
3. Mr. Milind Mahajan (w.e.f. 10th May 2017) Independent Director Member
4. Mr. Chintan Singhvi Independent Director Member

(c) Stakeholders’ Relationship Committee:

The Company has constituted a shareholder/investors grievance committee("StakeholdersRelationship Committee")to redress complaints of the shareholders.The Committee was constituted by the Board and was re-constituted on need basis. TheStakeholders’ Relationship Committee comprises the following Directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Neetesh Gupta (till 10th May 2017) Independent Director Chairman
2. Mr. Milind Mahajan (w.e.f. 10th May 2017) Independent Director Chairman
3. Mr. Hitesh Mehta Independent Director Member
4. Mr. Anil Choudhary Chairman & Managing Director Member

(d) Corporate Social Responsibility (CSR) Committee:

Company has constituted a CSR Committee in accordance with the provisions of section135of Companies Act 2013. The constitution of the CSR Committee was approved by a meetingof the Board and was re-constituted as per requirements. The CSR Committee comprises thefollowing Directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Anil Choudhary Chairman & Managing Director Chairman
2. Mr. Hitesh Mehta Independent Director Member
3. Mrs. Ranjana Choudhary Whole Time Director Member

(e) Borrowing Committee:

Board of Directors has voluntarily constituted Borrowing Committee of the Board andpowers of Borrowing under section 179(3)(d) of the Companies Act 2013 were delegated tothe said committee. This Committee comprises the following directors:

S. No. Name of director Nature of Directorship Designation in the Committee
1. Mr. Anil Choudhary Chairman & Managing Director Chairman
2. Mrs. Ranjana Choudhary Whole Time Director Member
3. Mr. Virendra Singh Pamecha Whole Time Director Member
4. Mr. Hitesh Mehta Independent Director Member

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the Financial Year 2017-18were on Arm’s Length Basis and were in the Ordinary Course of business. There are nomaterially significant Related Party Transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. All Related Party Transactions wereapproved by the Audit Committee on omnibus basis or otherwise by the Board. Thetransactions entered into by the company are audited. The Company has developed RelatedParty Transactions Policy Standard Operating Procedures for purpose of identification andmonitoring of such transactions.

Due to changes in the Regulation 23 of the SEBI (LODR) Regulations 2015 the AuditCommittee and Board has adopted amended RPT Policy w.e.f. 2nd August 2018 and same isavailable on the Company’s website(Link-http://comsyn.com/wp-content/uploads/2018/08/Revised-RPT-Policy.pdf).

Requirement of Form AOC-2 for annexed with the Board Report is not applicable on thecompany during the year 2017-18.

SIGNIFICANT AND MATERIAL ORDERSPASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.

AUDITORS THEIR REPORT & COMMENTS BY THE MANAGEMENT

1. Statutory Auditors

M/s Gupta & Ashok Chartered Accountants (ICAI Firm Registration No. 02254C) theStatutory Auditors were appointed for a term of consecutive 5 (Five) years at 30thAnnualGeneral Meeting of the Company held on 30th September 2014. As per the provisions ofsection 139 of the Companies Act 2013 the appointment of Auditors was required to beratified by Members at every Annual General Meeting; however in accordance with amendmentmade to section 139 vide Companies Amendment Act 2017 enforced on 7th May 2018 theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting. However the company proposes to ratify their appointment at ensuing AGM as perterms of their original appointment and they will continue till the conclusion of 35thAnnual General Meeting to be held in the year 2019.

As required under Regulation 33(d) of the SEBI (LODR) Regulation 2015 the auditor hasconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.

Board is pleased to inform that there is no such observation made by the Auditors intheir report which needs any explanation by the Board.

2. Secretarial Auditors

Pursuant to the provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed M/s Ishan Jain & Co. Practicing Company Secretaries to undertake theSecretarial Audit of the Company for the year 2017-18. The Report of the SecretarialAuditors in Form MR-3 is annexed herewith as "Annexure C" of thisreport. Your Board is pleased to inform that there is no such observation made by theAuditors in their report which needs any explanation by the Board except that:

1) Some forms were filed by the Company after the prescribed time along with theadequate additional filing fee and this has reported as compliance by reference of paymentof additional fees;

Management Comments: There was some delay in filing of the forms with ROC due totechnical reasons and company has already complied with the same and has filed those Formsand paid additional filing fee as prescribed. Therefore there is no default as such andsame has been considered as compliance under the relevant provisions of the Companies Act2013.

2) Presently about 42.00 Lakhs is the Un-spent amount towards Corporate SocialResponsibility by the company as required under section 135 of the Act.

Management Comments: Company could not spend the remaining balance un-spent amountas the Company was in the process of identification of the suitable Projects and place forproper utilization of the CSR amount and need more time for verification of variousproposal received from Implementing Agencies. Company is fully committed & dedicatedtowards its Social Responsibility. The company will endeavor to spend the unspent amountin the financial year 2018-19.

3) Penalty was confirmed on the Company as well as on Shri Virendra Singh Pamecha bythe order of CESTAT dated 15.01.2018 u/s 114 and 125 of the Customs Act 1962 due toconfiscation of goods for furnishing wrong bill of Export and the same is already paid bythe concerned.

Management Comments: The goods were confiscated by the adjudicating authority and afine of Rs. 189960/- was imposed on the

company. A nominal duty involvement of Rs. 23479/- on additional supply was due tomis-declaration of the goods which was genuine mistake at the time of making the documentsand there was no malafide intention or suppression of any material fact. Also the goodswrongly dispatched by the company were finally exported out of India. The company has gotsubstantial relief from Central Excise and Service Tax Appellate Tribunal against theorder passed by Commissioner (Appeals) Customs Central Excise & Service Tax

Bhopal. The company has deposited duty amount of Rs. 23479 along with interest andpenalty amounting to Rs. 53479/-. Mr. Virendra

Singh Pamecha has paid penalty of Rs. 23479/-.

The Board of Directors at their Meeting held on 26th May 2018 has re-appointed M/sIshan Jain & Co. Practicing Company Secretaries to undertake the Secretarial Auditfor Financial Year 2018-19.

DISCLOSURE FOR FRAUDS AGAINST THE COMPANY

In terms of provision of section 134(3) (ca) of the Companies Act 2013 there were noinstances of fraud reported to the Central Government by Auditors under section 143(12) ofthe Companies Act 2013. Further that during the year 2017-18 there were no instances offraud which are not reportable under section 143(12) of the Act.

CORPORATE GOVERNANCE

The Company being listed on the SME Platform of BSE Limited is exempted fromprovisions of Corporate Governance as per Regulation15 of the SEBI (LODR) Regulations2015. Hence no Corporate Governance Report is required to be disclosed with Annual Report.It is pertinent to mention that the Company follows majority of the provisions of thecorporate governance voluntarily as a part of Good Corporate Governance.

CODE OF CONDUCT

Regulation 17(5) of the SEBI (LODR) Regulations 2015 requires listed companies to laydown a Code of Conduct for its directors and senior management incorporating duties ofdirectors as laid down in the Companies Act 2013. The Company has adopted a Code ofConduct for all Directors and Senior Management of the Company and same is hosted on thewebsite of the company at following link.(Link-http://comsyn.com/wp-content/uploads/2017/10/CSBL_Code-of-Conduct-for-BODKMPs-Senior-Management_.pdf)

CONSOLIDATED FINANCIAL STATEMENTS

Since the company is not having any subsidiary associates or joint venture thereforethe requirement for Consolidated Financial Statements in accordance with relevantAccounting Standards (AS) is not applicable to the Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureD".

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH

HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THIS REPORT

No material changes and commitments affecting the financial position of the Companyoccurred during the Financial Year to which this financial statements relate and the dateof report. Except that the company has started the commercial production at SEZ Unitsituated at

Indore Special Economic Zone Plot No. 15 to 18 Phase-1 Sector-III Pithampur (MP) ata revised estimated total cost of Rs. 3460 Lakhs.

NON APPLICABILITY OF THE INDIAN ACCOUNTING STANDARDS (IND-AS)

As per proviso to regulation Rule 4(1) of the Companies (Indian Accounting Standards)Rules 2015 notified vide Notification No.G.S.R.111(E) on 16th Feb. 2015 Companies whoseshares are listed on SME exchange as referred to in Chapter XB of SEBI (Issue of Capitaland Disclosure Requirements) Regulations 2009 are exempted from the compulsoryrequirement of adoption of IND-AS w.e.f. 1stApril 2017. As your Company is also listed onSME Platform of BSE Limited is covered under the exempted category and is not required tocomply with IND-AS for preparation of financial statements beginning with period on orafter 1st April 2017.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure E".

RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEE’S REMUNERATIONAND

PARTICULARS OF EMPLOYEES

Pursuant to provision of section 197(12) of Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and thedetails of Top 10 employees given in the Annexure F.

During the year none of the employees received remuneration in excess of Rs. One CroreTwo Lakhs or more per annum or Rs. Eight Lakhs Fifty Thousand per month for the part ofthe year in accordance with the provisions of Section 197 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.Therefore there is no information to disclose in terms of the provisions of theCompanies Act 2013.

INDUSTRIAL RELATIONS

During the year under review your Company enjoyed cordial relationship with workers andemployees at all levels.

PREVENTION OF INSIDER TRADING

In view of the SEBI (Prohibition of Insider Trading) Regulation 2015 the Company hasadopted a Code of Conduct for Prevention of Insider Trading with a view to regulatetrading in securities by the Directors and designated employees of the Company. The Boardof Directors at their meeting held on 26th May 2018 has adopted revised Code of FairDisclosure Policy and Code of Conduct under the SEBI (Prohibition of Insider Trading)Regulation 2015 and amended Code/Policy were also hosted on the website of Company.

(http://comsyn.com/wp-content/uploads/2018/05/CSBL_Code_of_Fair_Disclosure.pdf)

(http://comsyn.com/wp-content/uploads/2018/05/CSBL_Code_of_Conduct_for_Insider_under_SEBI_PIT_2015.pdf)

The Code requires Trading Plan pre-clearance for dealing in the Company’s sharesand prohibits the purchase or sale of Company shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. However there wereno such instances in the Company during the year 2017-18.

CAUTIONARY STATEMENT

The statements made in this Report and Management Discussion and Analysis Reportrelating to the Company’s objectives projections outlook expectations and othersmay be "forward looking statements" within the meaning of applicable laws andregulations. Actual results may differ from expectations those expressed or implied. Somefactors could make difference to the Company’s operations that may be due to changein government policies global market conditions foreign exchange fluctuations naturaldisasters etc.

ACKNOWLEDGMENTS

Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and cooperation extended by them. TheDirectors also acknowledge support of the BSE Ltd. NSDL CDSL Registrar &ShareTransfer Agent and all other stakeholders of the Company viz. customers members dealersvendors bankers and other business partners for the excellent support received from themduring the year. The Directors place on record their sincere appreciation to all employeesof the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of the Board
Place: Indore
Date: 2nd August 2018
Anil Choudhary
Chairman & Managing Director
DIN: 00017913