Your Directors have immense pleasure in presenting their 35th Annual Reporton the business and operations of the Company and the accounts for the Financial Yearended March 31 2020.
The summary of the Company's financial performance for financial year 2019-20 comparedto previous year 2018-19 is given as below
| ||2019-20 ||2018-19 |
|Revenue from operations & other income ||11912344 ||13107739 |
|Profit and Loss before exceptional Item and tax ||1585254 ||2971923 |
|Exceptional items ||- ||- |
|Profit before tax ||1585254 ||2971923 |
|Tax Expense: || || |
|- Current Tax (net) ||- ||(571798) |
|- Less MAT Credit entitlement ||- ||75227 |
|Deferred Tax ||804966 ||890417 |
|Total other comprehensive Income ||(32687) ||(1081) |
|Total comprehensive Income ||812975 ||3364689 |
The Company has not declared any dividend for the year ended March 31 2020.
The company is in the business of sale purchase and licensing of Software within andoutside India. Company has many new projects to expand its business in the coming years.During the year under review the revenue from operations was Rs. 3122922 as against Rs.1914004 in previous year but the total comprehensive income recorded for the yeardecreased during the year to Rs. 812975 as against Rs. 3364689 of previous year.
The Company has transferred Rs. 812975 to the other equity account.
1. Share Capital
The paid up equity share capital as on 31st March 2020 was Rs.22490000/-. The Company has issued 1250000 shares by way of Preferential Issue duringthe year under review.
The funds raised through preferential issue during the year have not been utilized tilldate due to COVID Pandemic and there is no variation in the utilisation of the fundspursuant to regulation 32(1)(a) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Company has not accepted any deposit under section 73 of the Companies Act 2013.
3. Particulars of loan guarantees and investments
The Company has not provided any loan guarantee and has not made any investmentcovered under the provisions of Section186 of the Companies Act 2013.
Vigil Mechanism/ Whistle Blower Policy
Pursuant to Section 177(9) of the Companies Act 2013 and Listing Regulation 2015 theCompany has formulated a Whistle Blower Policy to establish a vigil mechanism fordirectors and employee of the Company. The Purpose and objective of this policy is toprovide a framework to promote responsible and secure whistle blowing. It protects theemployees wishing to raise concern about serious irregulariti es within the Company. Thedetail of Whistle Blower Policy are explained in the Corporate Governance Report and alsoposted on the website of the Company.
Management Discussion and Analysis
The Management Discussion and Analysis forms part of this Annual Report for the yearended 31st March 2020 as Annexure I.
Extract of Annual Return
The annual return will be available on the Company website onwww.continentalchemicalsltd.com.
Significant and Material Orders Passed by the Regulators or Courts
No significant and material order has been passed by any regulators or court during thefinancial year 2019-20.
Change in the Nature of Business
There was no change business of the company during the financial year under review.
Directors and Key Managerial Personnel
As on the date of this report there are total 5 directors including one-woman directortwo independent directors and one company secretary and compliance officer (KMP).
Mr. Aditya Vikram Chibba had been appointed as non-executive director on 12-11-2020whose term expires in this AGM which needs to be regularized by the shareholders in theensuing AGM. Ms. Bhawna Gupta has been appointed as company secretary and complianceofficer (KMP) on 12-11-2020.
2. Retire by Rotation
In accordance with provision of Companies Act 2013 and Articles of Association of theCompany Ms. Sunaina Chibba Director liable to retire by rotation at the forthcomingAnnual General Meeting and being eligible offers herself for reappointment.
The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.During the year 12 Board Meetings and 5 Audit Committee Meetings wereconvened and held. The maximum interval between board meetings did not exceed 120 days asprescribed in the Act. The details of which are given in the Corporate Governance Report.
4. Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theeval uation of the working of its Audit Nomination & Remuneration and StakeholderRelationship Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.
5. Declaration by an Independent Director(s)
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.
6. Managerial Remuneration
Detail of all elements of remuneration paid to all Directors is given in the CorporateGovernance Report.
Detail of particulars pursuant to section 197(12) of the Companies Act 2013 read withrules of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 are annexed as Annexure II.
7. Nomination and Remuneration Policy
The Board has on recommendation of the Nomination and Remuneration Committee framed aPolicy for selection appointment and remuneration of Directors and Key ManagerialPersonnel. More detail of the same is given in the Corporate Governance Report.
Details of Subsidiary/Joint ventures/ Associate Companies
The Company has no Subsidiary/ Joint Ventures/Associate Companies.
Particulars of Employees
The Section 197 (12) of Companies Act 2013 read with provision of Rule 5(2)(3) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 requiringparticulars of the employees. All required applicable details under The Section 197 (12)of Companies Act 2013 read with provision of Rule 5 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 has been attached with the board reportas Annexure II.
Related Party Transaction
The Company has an agreement with a related party for securing business from abroad andthe shareholders of the company approved it. All related party transaction held during theyear was approved and reviewed by the audit committee as per the provisions of listingagreement and Companies Act 2013 and in compliance of the approval provided by theshareholders. The details of the related party transact ions are provided in
All Related party Transactions as required are reported in Note 22 (e) Notes toAccounts of the financial statements of your Company.
Directorsf Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofthe Section 134(3) (c) of the Companies Act 2013:
(i) That in the preparation of the annual financial statements for the year ended March31 2020; the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(ii) That such accounting policies as mentioned in the Financial Statements asSignificant Accounting Policies' have been s elected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at March 31 2020 and of theprofit of the Company for the year ended on that date;
(iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with th e provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) That the annual financial statements have been prepared on a going concern basis;
(v) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating ef fectively;
(vi) That proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
A Report on Corporate Governance is annexed herewith as
1. Statutory Auditor
The Auditors M/s B K Kapur & Company Chartered Accountants had been re-appointedas Statutory Auditors of the Company for a period of 5 years in the previous year AGM. Theappointment of M/S B K Kapur & Company as auditor of company will conclude at the endof 39th AGM of Company.
The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self -explanatory and do not call for any further comments.
2. Cost Audit
The services provided by Company are not covered under cost audit and thereforepursuant to Section 148 of Companies Act 2013 with the Companies (Cost Records and Audit)Amendment Rules 2014 the Company is not required to maintain the cost audit records.
3. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Manag erial Personnel) Rules 2014 the Company hasappointed M/s B. S. Goyal & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed herewith as Annexure-V.
The secretarial audit Report does not contain any qualification. Notes to Accounts andAuditors remarks in their report are self-explanatory and do not call for any furthercomments.
4. Internal Audit & Controls
For the year under review Ms. Sunaina Chibba has been appointed as internal auditor ofthe Company. During the year the Company continued to implement her suggestions andrecommendations to improve the control environment. Her scope of work includes review ofprocesses for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths inall areas.
Conservation of Energy Technology absorption and Foreign Exchange Earning and Out goConservation of Energy
(a) Energy conservation has been an important thrust area for the Company. The adoptionof energy conservation measures has helped the Company in reduction of cost and reducedmachine down-time. (b) Energy conservation is an on-going process and new areas arecontinuously identified and suitable investments are made wherever necessary. (c) Variouson-going measures for conservation of energy include (i) use of energy efficient lightingand better use of natural lighting (i i) reduction of energy loss and (iii) replacementof out-dated energy intensive equipment But Company has not made any big investment forthis purpose.
(1) During the year 2019-20 the company took some minor efforts for new technologyabsorption. (2) No absorption of imported technology has been taken place during year2019-20. (3) No expenses incurred for Research and Development during financialyear 2019-20.
Foreign Exchange Earning and Out go
There is no foreign exchange outgo in the Company. The Company earned foreign exchangeinflow of Rs. 3122922/-.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
As the no. of employees in the company is less than 10 so as per section 6(1) of THESEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013company is not required to constitute an Internal Complaint Committee. During the yearCompany has not received any complaint of harassment.
Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
There is no material change which may affect the financial position of the companybetween the end of the financial year and the date of the report.
Employee relations continued to be cordial throughout the year in the Company. YourDirectors express their appreciation for the contribution made by the employees to theoperations of the Company during the year.
Risk Management Policy:
The Risk management policy of your Company formulated and approved by the Board statesthe Company's approach to address uncertainties in its endeavors to achieve its stated andimplicit objectives. It prescribes the roles and responsibilities of various stakeholderswithin your Company the structure for managing risks and the framework for riskmanagement. This policy and the Internal Financial Controls comprehensively address thekey strategic/business risks and operational risks respectively.
Corporate Social Responsibility (CSR)
The concept of Corporate Social Responsibility is not applicable to the Company undersection 135 of the Companies Act 2013.
Your Directors convey their sincere thanks to the various agencies of the CentralGovernment State Governments Banks and ot her concerned agencies for all the help andcooperation extended to the Company. The Directors also deeply acknowledge the trust andconfidence the shareholders and investors have placed in the Company. Your Directors alsorecord their appreciation for the dedicated servic es rendered by the workers staff andofficers of the Company.
|For and on behalf of Board of Directors |
|Sd/- ||Sd/- |
|Naresh Kumar Chibba ||Sunaina Chibba |
|Managing Director ||Director |
Place: Noida Date: 25.11.2020
|Annexure ||Content |
|I Management and Discussion and Analysis || |
|II Statement under section 197 and rule 5 of Companies (Appointment and remuneration) Rules 2014 |
|III AOC 2 Related Party Transactions disclosure || |
|IV Report on Corporate Governance || |
|V Secretarial Audit Report || |
Annexure I Management Discussion and Analysis
This report discusses and analysis the performance for the year ended 31stMarch 2020.
Operation and Industry
The company is in the business of sale purchase and licensing of Software within andoutside India. Company has many new projects to expand its business in the coming years.The Indian Software Industry plays an important role in increasing the GDP of the economyof th e Country and is on expansion with passing of time.
Opportunities and Threats
Your company is facing competition in Indian as well as overseas market but we have anedge over others with our quality and timely execution of services. The dynamic businessconditions and adverse movement of foreign exchange rate of the Rupee is major concern forthe growth of the industry. The Company is contributing positively in the same andproviding the best services to the customers.
Risk and Concerns
Business is exposed to external and internal risks. Some risks can be predicted andminimized with careful planning and implementing the measures to mitigate them YourCompany has been facing many risks such as market risk foreign exchange fluctuations taxregime changes and Intellectual Property Risk etc. The Company is dealing in Indian aswell as global market so quotation in local currencies have been highly controlled but inthe foreign transactions the fluctuation in exchange rate effects the company to mitigateit we opt to hedge a portion of our forex earnings
Segment Wise or Product wise Performance
The Company is dealing in single segment as IT and Software Services. The Company hassecured business and new order from overseas and expecting good growth in future.
Due to COVID the business of our company has been highly affected in the marketresulting in adverse impact on the company's profitability
However we believe the situation will improve from first quarter of 2021. Except abovesituation the company is making all efforts to improve the quality of its Services and totake more projects and has been involved in diversified activities in the SoftwareIndustry. T he Company is maintaining high quality products and services and confident ofachieving better results in the future. The Company is engaged in development of newproducts. It is estimated by the management that the development of new products will becompleted within 2 to 3 years. After completing these products the company is expectinglarger market coverage and increase in its revenues.
Internal Control Systems and their Adequacy
The Company has a proper and adequate internal control system to ensure that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorized recorded and reported correctly. The internal control isexercised through policies guidelines and procedures. It is supplemented by an extensiveprogram of internal audits conducted by in house trained personnel. The audit observationsand corrective actions taken thereon are periodically reviewed by the audit committee toensure effectiven ess of the internal control system. The internal control is designed toensure that the financial and other records are reliable for preparing financialstatements and other data and for maintaining accountability of persons.
Financial and Operational Performance
The financial statements have been prepared in compliance with the requirements of theCompanies Act 2013. Please refer Boards' Report in this respect.
Human Resources/Industrial Relations
The Company's HR philosophy is to establish and build a high performing organizationwhere each individual is motivated to perform to efficiently to contribute to developingand achieving individual excellence departmental objectives continuously and improveperformance to realize the full potential of our personnel.
Statements made herein describing the Company's expectations or predictions are"forward-looking statements". The actual results may differ from those expectedor predicted. Prime factors that may make a difference to the Company's performanceinclude market conditions input costs govt. regulations economic developmentwithin/outside country etc.
PARTICULARS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013 READ WITH RULE 5 OFTHE COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
(i) The ratio of the remuneration of each director to the median employeefsremuneration for the financial year and such other details as prescribed is as givenbelow:
|Name ||Ratio |
|Pradeep Kumar Chopra (Chairman and Independent Director* ||N.A |
|Naresh Kumar Chibba (Managing Director) ||3:1 |
|Akshat Bhaskar (Independent Director)* ||N.A. |
|Sunaina Chibba (Director)* ||N.A |
|Dhiraj Kumar Choudhary (Director)* ||N.A |
*No remuneration has been paid to director.
(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secr etary or Manager if any in the financial year:
|Name ||Designation ||% Increase |
|Naresh Kumar Chibba* ||Managing Director ||Nil |
|Amit Kumar ||CFO ||Nil |
|Pratima Agarwal ||Company Secretary ||6.67% |
|Himanshi Mittal ||Company Secretary ||Nil |
*There was no increase in remuneration of Shri Naresh Kumar Chibba during the financialyear 2019-20.
#The increase in salary is calculated after averaging last year salary to full year.There is no increase in salary during the year the difference of payment is due to salarydeduction difference due to leaves. (iii) The percentage increase/ Decrease () in themedian remuneration of employees in the financial year: (29%) (iv) There are Eight (8)permanent employees on the rolls of company on 31st March 2020. (v)Averagepercentile increase already made in the salaries of employees other than the managerialpersonnel `in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and any exceptional circumst ancesfor increase in the managerial remuneration: There is only one Whole Time Director i.e.Managing Director. There was no change in the remuneration. (vi) If remuneration is as perthe remuneration policy of the company: Yes
|Part: B || || || || || || || || |
|Employee Designation ||Remuneration ||Nature of Employment ||Qualification and Experience ||Date of Commencement of Employment ||Age ||Last Employment ||Share- holding in Co. ||Relation with Directors |
|Managing Director ||1107309 ||Permanent ||B.Com ||27.11.1984 ||62 ||Interads Advertising (P) Ltd.s ||5.92% ||Daughter and Son are also directors |
|Company Secretary ||280774 ||Permanent ||CS/6 Years ||11.05.2015 ||35 ||SHA Associates ||Nil ||N.A. |
|CFO ||260541 ||Permanent ||B.Com/6 Years ||01.05.2016 ||33 ||SV Infra Properties Pvt. ||Nil ||N.A. |
|Tech Lead ||1833471 ||Permanent ||B.Tech/17 Years ||08.01.2018 ||47 ||Ltd. Mmad Private Limited ||Nil ||N.A. |
|Software Developer ||395250 ||Permanent ||MCA/5 Years ||01.04.2019 ||30 ||EZ-Spend P. Ltd ||Nil ||N.A. |
|Customer Support Manager ||343776 ||Permanent ||MCA/4 Years ||01.04.2019 ||36 ||Karvy Dijiconnectt Private Limited ||Nil ||N.A. |
|Software Developer ||182600 ||Permanent ||B.Tech/2 Years ||16.04.2019 ||32 ||Intec Technology Private Limited ||Nil ||N.A. |
|IT Haed ||454278 ||Permanent ||B.Tech/8 Years ||08.10.2019 ||42 ||Atulym Hotel Line Pvt Ltd ||Nil ||N.A |
|For and on behalf of the Board |
|Sd/- ||Sd/- |
|Naresh K Chibba ||Sunaina Chibba |
|Managing Director ||Director |
Place: Noida Date: 25.11.2020
Annexure - III FORM NO. AOC 2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arm's length transaction under third provisothereto.
1. Details of contracts or arrangements or transactions at Arm's length basis.
|SL. No. Particulars ||Details |
|a) Name (s) of the related party & nature of relationship ||Interads E Communications Limited |
|b) Nature of contracts/ arrangements/ transaction ||Providing software service |
|c) Duration of the contracts/ arrangements/ transaction ||Till termination by either party |
|d) Salient terms of the contracts or arrangements or transaction including the value if any ||60% to 85% of resale value of original values of the IECL contract with its client. |
| ||Transaction of Rs. 3122922/-held during the financial year 2019-20 |
|e) Justification for entering into such contracts or arrangements or transactions' ||To secure business. |
|f) Date of approval by the Board ||8.10.2014 |
|g) Amount paid as advances if any ||NIL |
|h) Date on which the special resolution was passed in General meeting as required under first proviso to section 188 ||29.09.2014 |
2. Details of contracts or arrangements or transactions not at Arm's length basis.
|SL. No. Particulars ||Details |
|a) Name (s) of the related party & nature of relationship || |
|b) Nature of contracts/arrangements/transaction || |
|c) Duration of the contracts/arrangements/transaction || |
|d) Salient terms of the contracts or arrangements or transaction || |
|including the value if any || |
|e) Date of approval by the Board || |
|f) Amount paid as advances if any || |
|For and on behalf of Board of Directors |
|Sd/- ||Sd/- |
|Naresh K Chibba ||Sunaina Chibba |
|Managing Director ||Director |