Confidence Petroleum India Limited
The Directors are pleased to present to you the 25th Annual Report on the business and operations of your Company along with the audited Financial Statements of Account for the year ended 31 March 2019. The summarized results for the year ended 31 March 2019 are as under:
FINANCIAL RESULTS ( STANDALONE AND CONSOLIDATED)
The performance of the Company for the financial year ended 2018-19 is summarized below:
(Rs. In Lacs)
|Net Revenue from operations||87334.39||57364.22||100452.99||60674.91|
|Add: other Income||422.33||196.14||467.33||315.77|
|Operating Profit (PBIdT)||12082.44||6980.29||13113||7418.08|
|Less: Interest & Financial Charges||830.29||1051.52||1091.83||1208.96|
|Profit Before Tax & Exceptional Item||8436.92||3609.77||9041.64||3758.95|
|Less : Exceptional Item||0||0||0||0|
|Less : Extraordinary Item||0||0||0||0|
|Profit Before Tax||8436.92||3609.77||9041.64||3758.95|
|Less: Provision for Taxation:|
|1) Current Tax:||2005.53||899.98||2075.07||908.74|
|2) Deferred Tax:||525.54||182.96||532.59||193.56|
|Earnings Per Share (EPS)||2.16||0.98||2.44||1.04|
The Company has adopted Indian Accounting Standard (referred to as `Ind AS') with effect from 1 April 2017 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein prescribed under Section 133 of the Companies Act 2013 (Act) read with the relevant Rules framed thereunder and the other accounting principles generally accepted in India.
FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY'S AFFAIRS
(A) COMPANY'S PERFORMANCE (STANDALONE & CONSOLIDATED)
On a Standalone basis the Operating Revenue stood at Rs. 873.34 Crores in FY19 compared to Rs. 573.64 Crores in FY18. The of profitin FY19 was at Rs. 59.05 Crores as compared to a Profit Rs. 25.26 Crores last year. The Operating Revenue of the Company increased by 52.24% and PAT is increased by 133.76%.
On Consolidated basis the Operating Revenue stood at Rs. 1004.52 Crores in FY19 compared to Rs. 606.74 Crores in FY18. The profitin FY19 was at Rs. 64.33 Crores as compared to a Profit Rs. 26.56 Crores last year. The Operating Revenue of the of Company increased by 65.56% and PAT is increased by 142.20%.
(B) ANNUAL PERFORMANCE
Details of the Company's annual financial performance as published on the Company's website and presented during the Analyst Meet after declaration of annual results; can be accessed on the Company's website.
(C) COMPANY'S AFFAIRS/ CURRENT BUSINESS
The year 2018-19 has set the momentum for CPIL for achieving the strategic and operational goals set for the next three financial years. CPIL scaled new heights and recorded its best financial and operational performance. We continued to progress in our cylinder manufacturing division and LPG bottling division. We have made a good progress in developing our dealer and stockist network in new states and developing the right vendor relations to service our Auto LPG stations. Auto LPG as a transport fuel continues to grow and in 2019 we have initiated discussions and are also working alongside with various policymakers in the state and Central Government to introduce Auto LPG in the Northern States The Government's initiatives to provide clean fuel to every household has made India as the second largest consumer of LPG fuel globally. We have an ambitious capex plan over the next three years. The Company has planned capacity expansion for ALDS and bottling plants. The total capital expenditure planned is Rs. 4.44 billion.
The Dividend Distribution Policy framed in line with SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations) and is also uploaded on the Company's website. The Company has declared an interim dividend of 10% i.e. Rs. 0.10/- per share on 22 January 2019 during the Financial Year 2018-19. The Company has not declared any final Dividend. Your Company has formulated a Dividend Policy as provided to this Report and the same is disclosed on the website of the Company.
During the year the Company has allotted 15000000 Equity shares of Rs. 1 each at price of Rs. 52 per Share including Premium of Rs. 51 on Preferential basis. Consequently during the year the subscribed and paid up Share Capital of the Company has increased from Rs. 2588.35 Lacs to Rs. 2738.35 Lacs. Post closure of Financial Year 2018-19 the Company has issued 10176923 Convertible warrant at Rs. 52 (Including Rs. 51 as Premium) to Gaspoint Petroleum India Limited on dated 26 July 2019 on payment of 25% subscription amount.
As per Standalonefinancialsthe movement in the reserves of the Company for FY19 and FY18 is as follows: net
|(Amount in Rs. Lacs)|
|Particulars Standalone||As on 31 March 2019||As on 31 March 2018|
|Capital Subsidy Reserve||22.50||22.5|
The Board of Directors has decided to retain the entire amount of profits for FY19 in P&L account.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.
During the year ended 31 March 2019 your Company has not accepted any deposits from the public other than deposit on Cylinders from new customers. Further these deposits are secured against cylinders supplied to them. There is no other deposit remained unpaid/ unclaimed at the end of the financial year.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered into by the Company during the FY 2018-19 with related parties were on an arm's length basis and in the ordinary course of business. There were no material related party transactions (RPTs) undertaken by the Company during the year that require shareholders' approval under Regulation 23(4) of the SEBI Listing Regulations or Section 188 of the Act. The approval of the Audit Committee was sought for all RPTs. All the transactions were in compliance with the applicable provisions of the Act and SEBI Listing Regulations
Form AOC - 2 has been annexed to this report.
SUBSIDIARIES AND ASSOCIATE COMPANIES
The Company has 12 (Twelve) subsidiaries as on 31 March 2019. There are 5 (Five) associates or joint venture companies within the meaning of Section 2(6) of the Companies Act 2013 (Act). There has been no material change in the nature of the business of the subsidiaries.
Pursuant to the provisions of Section 129(3) of the Act a statement containing the salient features of financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial.Company statements ofthe Further pursuant to the provisions of Section 136 of the Act the financial statements of the Company consolidated financial statements along with relevant documents and separate auditedfinancialstatements in respect of subsidiaries are available on the website of the Company.
The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirement set out by the SEBI. The Company has also implemented several best governance practices. The report on Corporate Governance under Regulation 34 of the SEBI Listing Regulations read with Schedule V of the said Regulations forms an integral part of this Report. A report on Corporate Governance covering among others composition details of meetings of the Board and Committees along with a certificate for compliance with the conditions of Corporate Governance in accordance with the Securities and Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations 2015 issued by the Statutory Auditors of the Company forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS [MDA] REPORT
In terms of Regulation 34 (2) (e) of the Listing Regulations 2015 read with other applicable provisions the detailed review of the operations performance and future outlook of the Company and its business is given in the Management Discussion and Analysis Report which forms part of this Annual Report and is incorporated herein by reference and forms an integral part of this report.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have given declarations under Section 149(7) of the Act that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulations 25(8) of the Listing Regulations confirmedthat they IndependentDirectorshave are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.
CEO/ CFO CERTIFICATION
As required under Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the CEO/ CFO certification is attached report . withthe annual
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
The Competition Commission of India has taken up a case in FY 2012-13 against all cylinder Manufacturers regarding bid rigging and imposed a penalty of Rs. 27.36 Crores. The Case has been adjudged by Honorable Supreme Court finally decided in favour of Company and no penalties against this order is payable by the Company. Further the Competition commission has taken up fresh case against Company and all cylinder Manufacturers regarding bid rigging and imposed a penalty of Rs. 2.84 Crores vide order dated 9 August 2019. The Company is planning to file petition against this order with Tribunal
DISCLOSURE OF FRAUDS IN THE BOARD'S REPORT U/S 143 OF THE COMPANIES ACT 2013
During the year under review your Directors do not observe any transactions which could result in a fraud. Your Directors hereby declares that the Company has not been encountered with any fraud or fraudulent activity during the Financial Year 2018-19.
MEETINGS OF THE BOARD
12 (Twelve) meetings of the Board were held during the year under review. For details of meetings of the Board please refer to the Corporate Governance Report which is a part of this report.
COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following statutory Committees and other committee constituted by the Board function according to their respective roles and defined scope: Audit Committee of Directors
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Stakeholders Relationship Committee
Management Committee Allotment Committtee
Details of composition terms of reference and number of meetings held by respective committees are given in the Report on Corporate Governance which forms a part of this Report. Further during the year under review all recommendations made by the Audit Committee have been accepted by the Board.
The Company has established a whistle blower policy/ vigil mechanism to provide an avenue to raise concerns. The mechanism provides for adequate safeguards against victimization of employees who avail of it. The policy also lays down the process to be followed for dealing with the complaints and in exceptional cases also provides for direct appeal to the Chairperson of the Audit Committee. The Whistle Blower Policy established by the Board is available on the Company's website.
LISTING OF SHARES
The Equity Shares of the Company are listed on Bombay Stock Exchange Ltd. The Company has paid Annual Listing Fees to the stock exchange for the Financial Year 2018-19. The Company as on 13 June 2019 has listed its shares on National Stock Exchange of India Limited (NSE).
DIRECTORS & KMP
CHANGE IN BOARD COMPOSITION
Mr. Supratim Basu was appointed as Independent Director of the Company for a period of 5 years from 29 September 2019 to 28 September 2024. His appointment as Director was approved at the 24th Annual General Meeting (AGM) by the Members
RETIREMENT BY ROTATION:
In accordance with the provisions of section 152(6) of the Act and in terms of Articles of Association of the Company Mr. Elesh Khara (DIN: 01765620) will retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends his re-appointment.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act 2013 and in Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. At the AGM held on 30 September 2014 Mr. Sumant Sutaria was appointed as Independent Director of the Company for a period of 5 years (Considered as present Term). Thus he will hold office till 29 September 2019 and offers himeslf for the Re-appointment for a Second term of 5 years subject to approval of Shareholders in 25th AGM.
KEY MANAGERIAL PERSONNEL
In terms of Section 203 of the Act the Key Managerial Personnel (KMPs) of the Company during FY 2018-19 are:
Mr. Nitin Khara Chairman Managing Director & Chief Executive Officer
Mr. Elesh Khara Chief Financial Officer and Executive Director
Ms. Prity Bhabhra Company Secretary and Compliance Officer.
REMUNERATION POLICY FOR THE DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations the NRC is responsible for formulating the criteria for determining qualificationpositive attributes and independence of a Director. The NRC is also responsible for recommending to the Board a policy relating to the remuneration of the Directors Key Managerial Personnel and other employees. In line with this requirement the Board has adopted the Policy on Board Diversity and Director Attributes which is provided in Annexure to this Report.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company hereby state and confirm that:
In the preparation of Annual Accounts of the Company the applicable Accounting Standards have been followed along with proper explanation to material departures;
They have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2018-19 and of the Profit of the Company for that period.
They have taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
They have prepared the annual accounts of the Company on a going concern basis.
They have laid down internal financial controls in the Company that are adequate and were operating effectively.
They have devised proper systems to ensure compliance with the provisions of all applicable laws and these were adequate and operating efficiently.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section 186 of the Companies Act 2013 are given in the notes to the Financial Statements.
EXTRACT OF THE ANNUAL RETURN [MGT-9] AS PROVIDED UNDER SUB-SECTION (3) OF SECTION 92
The Extract of the annual return as provided under sub-section (3) of section 92 of the Companies Act 2013 is annexed herewith. The extracts of the Annual Return of the Company can also be accessed on the Company's website at www.confidencegroup.co
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this Annual Report and in Management Discussion and Analysis [MDA].
The Board of Directors has carried out an annual evaluation of its own performance board committees and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations.
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure effectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees effectiveness of committee meetings etc.
In a separate meeting of independent directors performance of non-independent directors the board as a whole and the Chairman of the Company was evaluated taking into account the views of executive directors and non executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and inputs in meetings etc.
In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee the performance of the board its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board excluding the independent director being evaluated.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As provided in Section 135 of the Companies Act 2013 every Company fulfilling the criteria mentioned is required to constitute a CSRCommittee and is mandated to comply with the conditions mentioned therein.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As required under section 134(3)(o) and Rule 9 of the Companies (Corporate Social Responsibility) Rules 2014 the annual report on CSR activities forming part of the Director`s Report is annexed as Annexure II.
AUDITORS AND AUDITOR'S REPORT
The appointment of M/s. Akhil Rathi & Co. Chartered Accountants Nagpur and M/s. Ganesh Adukia and Associates Chartered Accountants Mumbai is to be ratified for the financial year 2018-19 in the ensuing Annual General meeting of the members. The Notes on financial statements referred to in the Auditor`s Report are self-explanatory and do not call for any further comments. The Auditor`s Report does not contain any qualification reservation adverse remark or disclaimer.
No fraud has been reported by the Auditors under section 143(12) of the Companies Act 2013 requiring disclosure in the Board's Report.
COST AUDITORS AND COST AUDIT REPORT
Pursuant to Section 148(1) of the Companies Act 2013 your Company is required to maintain cost records as specified by the Central Government and accordingly such accounts and records are made and maintained.
Pursuant to Section 148(2) of the Companies Act 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014 your Company is also required to get its cost accounting records audited by a Cost Auditor. Accordingly the Board at its meeting held on 28 August 2019 has on the recommendation of the Audit Committee re-appointed M/s. Narendra Peshne & Associates Cost Accountants Nagpur to conduct the audit of the cost accounting records of the Company for FY 2019 20. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 and is accordingly placed for your ratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Company has appointed CS Yugandhara Kothalkar Practicing Company Secretary to conduct Secretarial Audit for the Financial Year 2018-19. The Secretarial Audit Report for the Financial Year ended 31 March 2019 is annexed herewith to this Report. The report doesn't contain any remark made by the Secretarial Auditors and do not call any comments.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company confirms compliance with the applicable requirements of Secretarial Standards 1 and 2.
CODES OF CONDUCT FOR DIRECTORS AND EMPLOYEES
The Company has adopted a Code of Conduct for its Non-Executive Directors including a code of conduct for Independent Directors which suitably incorporates the duties of Independent Directors as laid down in the Act. The Company has also adopted the Code of Conduct for its employees including the Managing and Executive Directors.
INTERNAL CONTROL SYSTEM/ FINANCIAL CONTROL
The Company maintains adequate internal control system which provides among other things reasonable assurance of recording the transactions of its operations in all materialaspectsandofprovidingprotectionagainstsignificantmisuse or loss of Company's assets. The Company uses an Enterprise Resource Planning (ERP) package Business Intelligence and Analytics package which enhances the internal control mechanism. The Company's internal control system comprises audit and compliance by in-house Internal Audit Division. Independence of the audit and compliance is ensured by the direct reporting of Internal Audit Division and internal Auditors to the Audit Committee of the Board.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provisions of Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 are set out below:
(A) CONSERVATION OF ENERGY
Your Company is continuously taking initiatives to ensure the optimum utilization of energy available in day to day operations not only in offices but also at different sites of execution of various projects. Your Company uses energy efficient lighting devices light fittings to save energy capacitor bank/ devices to maintain power factor and plant & equipment which are environment and power efficient.
(B) TECHNOLOGY ABSORPTION
Your Company is doing its business by ensuring optimum utilization of its available resources. Your Company has not undertaken any research & development activity so far. It has been executing its projects by using modern techniques modern machineries and by ensuring the optimum utilization of its technical professional and skilled manpower.
(C) FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company has incurred the following expenses in foreign currency during the financial year 2018-19. The rupee equivalent of that amount has been given hereunder; Foreign Exchange earnings and Outgo: Earning of foreign Currency and outgo is made under following head: [Refer Notes to accounts: Note 29 Sub-note 17 Part E to I]
|(Rs. In Lacs)|
|For Purchase of LPG(High Seas purchase payment made in INR)||11295.98|
|For Purchase of LPG Dispensers Earnings||517.90|
|For Investment in Equity of Foreign Subsidiary (PT Surya Go Gas Indonesia) Return on investment received||88.07|
INTERNAL COMPLAINT COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT 2013
Your Company is committed to creating and maintaining an atmosphere in which employees can work together without fear of sexual harassment exploitation or intimidation. The Board of Directors of your Company has constituted Committees (ICCs) at Corporate Office as well as regional levels pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rules framed thereunder. Since there were no complaints received by the committee during the year 2018-19.
Your Directors state that no other disclosure or reporting is to be made separately on any other items requiring explanation during the year under review.
Certain statements made in the management discussion and analysis report relating to the Company's objectives projections outlook expectations estimates and others may constitute `forward-looking statements' within the meaning of applicable laws and regulations. Actual results may differ from such expectations projections and so on whether express or implied. Several factors could make a significant difference to the Company's operations. These include economic conditions affecting demand and supply government regulations and taxation natural calamities and so on over which the Company does not have any direct control.
Your Directors place on record their appreciation for the contributions made by employees towards the success of your Company. Your Directors gratefully acknowledge the co-operation and support received from the Shareholders Customers Vendors Bankers regulatory and Governmental authorities.
|For and on behalf of the Board Director|
|Nitin Khara||Elesh Khara|
|DIN : 01670977||DIN :01765620|