DIRECTOR'S REPORT 2014-15 TO THE MEMBERS OF COMMERCIAL ENGINEERS & BODY BUILDERS CO LTD Your Directors are pleased to present the 35th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March 2015 Performance at Glance The Company has recorded gross sales of Rs. 15238.46 Lacs in the closed financial year 2014-15, which is 18.00% lesser as compared to the previous financial year. Further your Company has recorded profit/(loss) before tax & exceptional item is Rs. (6036.08) Lacs (Previous year loss: Rs. 6,773.11 Lacs). The Profit / (loss) after tax is at Rs. (10254.61) Lacs in the current year. (Previous year loss: Rs. 7043.08 Lacs). A reference may please be made to Management Discussion and Analysis Section for analytical information regarding performance of the current fiscal. Dividend No dividend is recommended for distribution to the members for the year under review as the company has incurred losses Corporate Governance The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance Requirements set out by SEBI. Pursuant to Clause 49 of the Listing Agreements with Stock Exchanges a separate Report on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance forms part of the Annual Report. Contracts and Arrangements with Related Parties All related party transactions that were entered into during the financial year 2014-15 were on an arm's length basis and were in the ordinary course of the business. The Company has not enter into any material or significant related party transactions with the Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link. <http://www.cebbco.com/docs/profile_for_investors.html>. The attention of Members is drawn to Note 35 of the financial statement which sets out related party disclosures. Disclosure on Subsidiaries The Company does not have any subsidiary. Corporate Social Responsibility (CSR) A Corporate Social Responsibility Policy (CSR Policy) demonstrating the activities to be undertaken by the Company has been formulated by the Corporate Social Responsibility Committee (CSR Committee) and recommended to the Board, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link: <http://www.cebbco.com/docs/profile_for_investors.html>. The Annual Report on CSR activities has been annexed herewith as ANNEXURE – I Risk Management Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, a Risk Management committee has been constituted by the company. The details of the committee and its terms of reference are set out in the Corporate Governance Report. The company is continuously monitoring the risk and methods to mitigate these risks. Internal Financial Controls Details of internal financial control and its adequacy are included in the management discussion and analysis report, which forms part of this report. Directors and KMP The Board of Directors comprises of: Mr. Anil Gopal Joshi - Chairman and Independent Director Dr. Kailash Chand Gupta - Non Executive Promoter Director Mr. Prakash Yashwant Gurav - Independent Director Mr. Prabhakar Ramchandra Dalal - Independent Director Mr. Manchi Venkat Rajarao - Independent Director Mrs. Nandini Malpani -Non Executive Promoter Director The KMPs are as follows: Mr. Deepak Tiwary - Chief Executive Officer Mr. Ajeet Garde - Chief Finance Officer Mr. Anurag Misra - Company Secretary During the year following directors resigned : Mr. Sevantilal Popatlal Shah - Independent Director Mr. Sudhir K Vadehra - Independent Director Mr. Ravi Gupta - Independent Director In accordance with the provisions of the Act and the Articles of Association of the Company, Dr. Kailash Chand Gupta, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. Further we confirm that the Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 as well as under Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. On the basis of recommendations of the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, an evaluation process was followed by the Board for its own performance and that of its Committees and individual Directors. The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: <http://www.cebbco.com/docs/profile_for_investors.html>. Statutory Auditors M/s Deloitte Haskins & Sells LLP, firms' registration number-117366W/W-100018), Chartered Accountants, 32nd Floor, Tower 3, India Bulls Finance Centre, Senapati Bapat Marg, Elphinstone (west), Mumbai-400 013 Statutory Auditors of the Company would retire at the conclusion of this Annual General Meeting and being eligible offer themselves for re-appointment. In accordance with applicable provisions of section 139 and other applicable provisions, if any, of the Companies Act, 2013 ("Act"), the Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, Board recommends their re-appointment as Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting (AGM) till the conclusion of the next AGM of the Company. The Notes on financial statement referred to in the Auditor's Report are self- explanatory and do not require any further comments and explanations. Further, the Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer of opinion. Secretarial Auditor The Board has appointed M/s S.K. Gupta & Co., Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as ANNEXURE II to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Disclosures : Corporate Social Responsibility Committee The CSR Committee comprises Mr. Anil Gopal Joshi (Chairman), Mr. Manchi Venkat Rajarao and Mr. Prabhakar Ramchandra Dalal as other members. Audit Committee The Audit Committee comprises Mr. Prakash Yashwant Gurav (Chairman) and Mr. Anil Gopal Joshi and Mr. Prabhakar Ramchandra Dalal as 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 in terms of the Listing Agreement, includes an Ethics Officer and other Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Ethics Officer and other Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link <http://www.cebbco.com/docs/profile_for_investors.html>. Meeting of the Board Ten meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance of this Annual Report. Particulars of Loans given, Investments made, guarantees given and securities provided Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the audited financial statement. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Out Go in terms of section 134 (3)(m) of the act red with rule 8 of the Companies (Accounts) Rules, 2014 forming part of the Director report for the year ended March 31st 2015. Conservation of Energy: 1. Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilisation 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 utilisation of energy are not quantitative, its impact on cost cannot be stated accurately. The Company does not fall under the list of industries, which should furnish this information in Form A annexed to the aforesaid Rules. Technology Absorption Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company persistently endeavors for maintenance and improvement in quality of its products. Foreign Outgo & Earning During the year under the review, the Company had Foreign Exchange Earnings Nil and Foreign Exchange Outgo of Rs. 564.00/-Lacs. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as ANNEXURE III to this Report. Employee There is no employee in the company whose particulars are required to be disclosed under the provisions of Section 197(12) of the Act read with Rules 5(2)and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendment thereto. GENERAL 1) Public Deposit Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. 2) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operation in future. 3) Material changes affecting the financial position of the Company which have occured between the end of the financial year of the Company to which the financial statement relate and the date of this report - The Company has availed loan facility from finance company to the extent of Rs. 21 Crores and the same has interalia being utilised for repayment of the loan outstanding to a Bank (After negotiating a discount of Rs. 32 Lacs) for clearing of the statutory dues and for repayment of high cost loans. 4) Share Capital During the year under review, the Company issued 2,000,000 unlisted non-convertible, cumulative redeemable preference shares of the Company of the face value of Rs. 100/- each, for an aggregate value of Rs. 20 Crore, at par, on a private placement basis, jointly to the promoters i.e. Mr. Kailash Chand Gupta and Mrs. Rekha Gupta. As of date Rs. 45/- per share is called up and paid up out of total face value of Rs. 100/-. The company has not issued shares with differential voting rights nor granted stock options nor sweat equity. Directors Responsibility Statement Your Directors state that : a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures.; b) the Directors 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 as at March 31, 2015 and of the profit or loss of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 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 the Company 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 provisions of all applicable laws and that such systems are adequate and operating effectively. Acknowledgements Your Directors take this opportunity to express their gratitude to the customers, employees, bankers /financial institutions and vendors for their continued support and guidance. For on behalf of the Board Commercial Engineers & Body Builders Co Ltd Anil Joshi Chairman DIN: 0019927 Date: 6th August 2015 Place: Mumbai |