To the Members,
CMI Limited
THE Hon'ble National Company Law Tribunal, Delhi Bench, ("NCLT")
vide its order dated July 28, 2023 ("Order"), pronounced on August 01, 2023, has
admitted the application filed by Canara Bank ("Financial Creditor") under
Section 7 of the Insolvency and Bankruptcy Code, 2016, read with rules and regulations
framed thereunder ("the Code") and accordingly the corporate insolvency
resolution process ("CIRP") has commenced of the Company, CMI Limited
("Company") with effect from July 28, 2023.
Furthermore, the Hon'ble National Company Law Tribunal, Delhi Bench,
("NCLT") has also approved the appointment of Mr. Deepak Maini as the Interim
Resolution Professional ("IRP")/Resolution Professional (RP) to conduct the CIRP
of the Company admitted under section 7 of the Insolvency and Bankruptcy Code 2016.
The powers of Board of Directors of the Company stand suspended
effective from the CIRP commencement date and such powers along with the management of
affairs of the Company are vested with the RP in accordance with the provisions of Section
17 and 23 of the Insolvency Code read with Regulation 15(2A) & (2B) of the Securities
and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015.
Although the power of the board is suspended as per above regulations
all the current directors including Managing Directors/promoters are duty bound to
cooperate with Resolution Profession in managing the affairs of the Company.
Mr. Deepak Maini in his capacity as IRP / RP took control and custody
of the management and operation of the company from July 28, 2023. Consequently, all
actions that are deemed to be taken by Board of Directors have been given effect by the
IRP/RP during the continuance of the CIRP as per the provisions of the IBC. The report
attached is for the purpose of compliance and discharging the duties under the CIRP.
The Board/Resolution Professional present the Fifty Sixth Board's
Report of the CMI Limited "(the Company"), along with the financial statements
for the financial year ended 31st March, 2023.
1. FINANCIAL SUMMARY
The financial summary and performance highlights of the Company, for
the financial year 2022- 23 are provided below:
(Amount Rs. in Lakhs)
Particulars |
Financial year |
|
2022-23 |
2021-22 |
Total revenue |
2,359.30 |
7,092.63 |
Less: Total Expenditure excluding Depreciation |
4,156.77 |
19,712.04 |
Profit before Depreciation and Tax |
(1,797.46) |
(12,619.41) |
Less: Depreciation |
921.56 |
1,044.51 |
Add: Exceptional items |
(9,025.46) |
(4,477.83) |
Profit Before Tax |
(11,744.49) |
(18,141.75) |
Less: Current Tax |
- |
- |
Deferred Tax |
(735.48) |
(3,852.02) |
Net Profit after Tax |
(11,009.02) |
(14,289.72) |
Previous year's figures have been regrouped/ rearranged wherever
considered necessary.
2. FINANCIAL AND OPERATIONAL PERFORMANCE
During the financial year under review, your Company's revenue from
operations was Rs. 2,359.30 Lakhs. Further, in the Financial Year ended 31st March, 2023,
the Profit/(Loss) before tax (PBT) was Rs. (11,744.49) Lakhs as against Rs. (18,141.75)
Lakhs in the previous year and Profit/(Loss) after tax (PAT) was Rs. (11,009.02) Lakhs
against Rs. -14,289.72 Lakhs in the previous financial year.
3. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE
COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT AND DETAILS OF
SIGNIFICANT AND MATERIAL GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Hon'ble National Company Law Tribunal, Delhi Bench, ("NCLT")
vide its order dated July 28, 2023 ("Order"), pronounced on August 01, 2023, has
admitted the application filed by Canara Bank ("Financial Creditor") under
Section 7 of the Insolvency and Bankruptcy Code, 2016, read with rules and regulations
framed thereunder ("the Code") and accordingly the corporate insolvency
resolution process ("CIRP") has commenced of the Company, CMI Limited
("Company") with effect from July 28, 2023.
Furthermore, the Hon'ble National Company Law Tribunal, Delhi Bench,
("NCLT") has also approved the appointment of Mr. Deepak Maini as the Interim
Resolution Professional ("IRP")/Resolution Professional (RP) to conduct the CIRP
of the Company admitted under section 7 of the Insolvency and Bankruptcy Code 2016.
4. SHARE CAPITAL
As on 31st March, 2023, Authorised share capital of the
Company is Rs. 175,00,00,000/-(0ne Hundred and Seventy Five Crores) and Paid up share
Capital of the Company is Rs. 16,02,74,570/- (Rupees Sixteen Crores Two lakhs Seventy Four
Thousand Five hundred and Seventy Only) divided into 1,60,27,457 (One Crore Sixty Lakh
Twenty Seven Thousand Four Hundred Fifty Seven) equity shares of Rs. 10/- (Rupees Ten)
each.
5. CREDIT RATING
For the Financial Year 2022-23, no credit ratings have been obtained
from the Rating Agencies.
6. DIVIDEND AND RESERVES/OTHER EQUITY
In view of the financial performance and losses during the year under
review, the Board of Directors has not recommended any dividend for the financial year
under review. As the Company has incurred losses during the year, other equity of the
Company as on 31st March, 2023 stands at Rs (14,305.62)lakhs.
7. PUBLIC DEPOSITS
The Company has not accepted or renewed any fixed deposits during the
period under review. It has not accepted any deposits from the public within the meaning
of the provisions of Section 73 of the Companies Act, 2013 and Rules made thereunder.
Therefore, it is not required to furnish information in respect of outstanding deposits
under non-banking, non-financial Companies (Reserve Bank) Directions, 1966 and Companies
(Accounts) Rules, 2014.
8. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES
As on 31st March, 2023, the Company do not have any
Associate or Subsidiary Company. Therefore, disclosure in Form AOC-1 in terms of Section
129(3) of the Act is not required.
9. INTERNAL FINANCIAL CONTROLS
The Board/RP believes that based on the knowledge/ information gained
by them about affairs of the Company from records, the Company has effective internal
financial control systems and policies and such controls are operating effectively.
The internal control systems include documented policies, checks and
balances, guidelines and procedures, that are supplemented by robust internal audit
processes and monitored continuously through periodical reviews by management to provide
reasonable assurance that all assets are safeguarded; and all transactions entered into by
company are authorized, recorded and reported properly.
The Board/Management/RP is in the process reviewing the internal
controls framework of the Company with an objective to have a robust internal control
framework commensurate with the size, scale and nature of business of the company.
Pursuant to provisions of Section 138 and other applicable provisions,
if any, read with rule 13 of the Companies (Accounts) Rules ,2014, of the Companies
Act,2013, RP/Board in their meeting held on 17th October, 2023, upon approval
of the COC, appointed M/s. Priyanka Singh and Associates as the Internal Auditor of the
Company to conduct internal audit of the records of the Company for the financial year
ended on 31st March, 2023 at a remuneration to be fixed by the Board/RP/COC.
The Report submitted by the Internal Auditor has been reviewed by the RP from time to
time.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
As on 31st March, 2023, the Company has 6 Directors with an
Executive Chairman, which includes 1 Executive Directors, 3 Non-executive Independent
Directors inclusive of 1 Woman Director and 2 Non-executive Non-Independent Director.
Change in Directorship:
During the year under review, following are the changes in the
composition of Board of Directors of the Company:
S. No. Name of Director |
DIN |
Designation |
Date of Appointment |
Date of Cessation |
1 Mr. Amit Jain |
00041300 |
Chairman Cum Managing Director |
01-10-2002 |
- |
2 Mr. Pyare Lal Khanna |
02237272 |
Non-Executive Non- Independent Director |
30-12-2020 |
- |
3 Ms. Charu Jain |
03457247 |
Non-Executive Independent Director |
28-05-2019 |
- |
4 Mr. Kunal Singhal |
08140142 |
Non-Executive Non- Independent Director |
31-03-2020 |
- |
5 Mr. Servagaya Jain |
00862686 |
Non-Executive Independent Director |
26-08-2020 |
- |
6 Mr. Vikash Sharma |
05192303 |
Non-Executive Independent Director |
31-12-2021 |
- |
Mr. Vikash Sharma and Ms. Charu Jain, Non-Executive Independents
Director resigned from the directorship of the Company w.e.f. 30th April, 2023
and 1st August, 2023 respectively.
The Company has received declaration from the Independent Directors
that they meet the criteria of independence as prescribed u/s 149(6) of the Companies Act,
2013. In the opinion of the Board, they fulfill the condition for appointment/ re-
appointment as Independent Directors on the Board. Further, in the opinion of the Board,
the Independent Directors also possess the attributes of integrity, expertise and
experience as required to be disclosed under Rule 8(5) (iiia) of the Companies (Accounts)
Rules, 2014.
None of the Directors are disqualified under the provisions of the
Companies Act, 2013.
Key Managerial Personnel
During the year under review, in terms of the provisions of Section
2(51) and 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the
Company were as under: -
i. Mr. Amit Jain - Chairman cum Managing Director
ii. Mr. Subodh Kumar- Company Secretary
iii. Mr. Raj Kumar - Chief Financial Officer
Changes in Key Managerial Personnel
During the year under review, there is no change in the Key Managerial
Personnel (KMP) of the Company in terms of the provisions of Section 2(51) and 203 of the
Companies Act, 2013.
However, Mr. Raj Kumar resigned from the designation of CFO and Mr.
Subodh Kumar resigned from the designation of Company Secretary w.e.f. 30.05.2023 and
01.06.2023 respectively.
11. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to Sub-section (5) of Section 134 of the Companies Act, 2013
with respect to the Director's Responsibility Statement, it is here by confirmed that:
i. In the preparation of the Annual Accounts for the year ended 31st
March, 2023 the applicable accounting standards read with requirements set out under
Schedule III of the Act have been followed and no material departures have been made from
the same;
ii. Appropriate Accounting Policies have been selected and applied
consistently and have 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 31st
March, 2023 and of the profit of the Company for that year ended on that date except to
the extent mentioned in notes to accounts;
iii. Proper and sufficient care has been taken 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
iv. The Annual Accounts have been prepared on a going concern basis.
v. The internal financial controls to be followed by the Company had
been laid down and that such internal financial controls are adequate and were operating
effectively;
vi. The proper systems had been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
12. BOARD PERFORMANCE EVALUATION
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.
Pursuant to the provisions of the Act, the Board has carried out an
annual evaluation of its own performance, the individual Directors (including the
Chairman) as well as an evaluation of the working of all Board Committees. The Board of
Directors was assisted by the Nomination and Remuneration Committee. Some of the
performance indicators based on which evaluation takes place are experience, expertise,
knowledge and skills required for achieving strategy and for implementation of best
governance practices which ultimately contributes to the growth of the Company in
compliances with all policies of the Company.
13. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review, 8 (Eight) Board Meetings were duly
convened and held. The details of the number of meetings of the Board held during the
Financial Year 2022-23 forms part of the Corporate Governance Report.
14. COMMITTEES OF THE BOARD
The Board of Directors has the following Committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholders' Relationship Committee
iv. Corporate Social Responsibility Committee.
The details of the Committees along with their composition, number of
meetings, terms of reference and attendance of members at the meetings are provided in the
Corporate Governance Report which forms part of this Annual Report. Further, during the
year review, the board has accepted all the recommendations of the Audit Committee.
15. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received the necessary declaration from each
Independent Director that he/she meets the criteria of Independence as laid out in Section
149(6) of the Companies Act, 2013 read with the Schedules, rules made thereunder and
Regulation 25 of SEBI Listing Regulations, 2015.
16. NOMINATION AND REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and Senior Management
of the Company.
The Policy broadly lays down the guiding principles, philosophy and the
basis for payment of remuneration to Executive and Non-executive Directors (by way of
sitting fees and commission), Key Managerial Personnel, Senior Management and other
employees. The policy also provides the criteria for determining qualifications, positive
attributes and Independence of Director and criteria for appointment of Key Managerial
Personnel / Senior Management and performance evaluation which are considered by the
Nomination and Remuneration Committee and the Board of Directors while making selection of
the candidates. The above policy has been posted on the website of the Company at
https://cmilimited.in/img/pdf/Nomination%20and%20Remuneration%20Policy-new-2021.pdf.
17. VIGIL MECHANISM Cum WHISTLE BLOWER POLICY
The Company has a vigil mechanism named Vigil Mechanism Cum Whistle
Blower Policy, framed by Board of the Company, to deal with instances of fraud and
mismanagement, if any. Details of the same are given in the Corporate Governance Report.
No employee has been denied to have access to the Chairman of the Audit
Committee/Management.
The same has also been displayed on the website of the Company viz: -
https://cmilimited.in/img/pdf/Whistle%20Blower%20Policy-2022.pdf.
18. RELATED PARTY TRANSACTIONS
All transactions entered with Related Parties for the year under review
were on arm's length basis and thus a disclosure in Form AOC-2 in terms of Section 134 of
the Act is not required. Further, there are no material related party transactions during
the year under review as defined under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and adopted by the Board of Directors in the Related Party
Transactions Policy of the Company. All related party transactions are mentioned in the
notes to the accounts. The Company has developed a framework through Standard Operating
Procedures for the purpose of identification and monitoring of such Related Party
Transactions.
All Related Party Transactions are placed before the Audit Committee
for approval. Omnibus approval was obtained on a yearly basis for transactions which are
of repetitive nature. Transactions entered into pursuant to omnibus approval are verified
and details of all Related Party Transactions are placed before the Audit Committee and
the Board for review and approval on a quarterly basis.
The Policy on Related Party Transactions as approved by the Board of
Directors has been uploaded on the website of the Company and can be seen at the link
https://cmilimited.in/img/pdf/Policy on Related Party Transactions-new-2021.pdf. None of
the Directors has any pecuniary relationship or transactions vis-a-vis the Company except
transactions approved by Audit Committee and Board.
19. CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act, 2013 read with
Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Board of
the Company has formed Corporate Social Responsibility ("CSR") Committee.
Details of CSR Committee along with their composition, number of meetings, terms of
reference and attendance of members at the meetings are provided in the Corporate
Governance Report. The policy on CSR as approved by the erstwhile Board of Directors is
also uploaded on the website of the Company i.e.
https://cmilimited.in/img/pdf/Corporate%20Social%20Responsibilitv%20Policy.pdf.
Pursuant to Section 135 of the Companies Act, 2013 read with CSR policy
of the Company, it is required to spend two percent of the average net profit of the
Company for three immediately preceding financial years. Annual Report on CSR activities
as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as
amended, have been annexed as Annexure -1 and forms integral part of this Report.
20. AUDITORS
a) Statutory Auditor and Auditor's Report
M/s. Krishna Neeraj & Associates, Chartered Accountants, Firm
Registration No. 023233N was re-appointed as the Statutory Auditors of the Company at the
54th Annual General Meeting ('AGM') held on September 30, 2021 for a second
term of 5 years and they hold office upto the conclusion of the 59th Annual
General Meeting of the Company.
There is no audit qualification, reservation or adverse remark for the
year under review except as mentioned below:
Going Concern Concept
The accumulated losses of the company as at the close of 31st March
2023 amounting to Rs.14305.62 lakhs as against which the paid up capital of the company is
Rs.1603.07 Lakh and the losses has totally eroded the net worth of the company. The
company has been incurring continues losses for the past many years. The total liabilities
of the company as at the close of 31st March 2023 is Rs. 44,200.49 lakhs (Previous year
Rs. 45304.43 lakhs) against which the Fixed and current assets book values are only Rs.
31,497.94 lakhs (Previous year Rs.43,610.91 lakhs).
Reply: The auditor have opined upon the going concern nature of the
company due to consistent losses being incurred since the inception of Covid-19 due to the
resultant market disruptions, minimal operations in the factory and risk carried by the
company due to non-execution of orders by the company after Covid-19. The company could
not honor its financial commitment towards its lenders.
Pursuant whereof, one of the lender's, filed an application against the
company under section 7 of the Insolvency and Bankruptcy Code, 2016, read with rules and
regulations framed thereunder ("the Code") which has since been admitted by
Hon'ble NCLT, New Delhi vide its order dated 28.07.2023. However, the business segment
carries potential and the company can be revived in future.
The Company has not complied the disclosure for the following as
per IND AS 19: The Company has not identified, measured, quantified and disclosed the
gratuity and leave encashment and its impact on the current financial statements.
Reply: Ascertainment of actuarial liability as laid down under Ind AS
15 involves considerable cost which is difficult for the company to with stand
considering the Company is undergoing CIRP. Hon'ble National Company Law Tribunal, Delhi
Bench, ("NCLT") vide its order dated July 28, 2023 ("Order"),
pronounced on August 01, 2023, has admitted the application filed by Canara Bank
("Financial Creditor") under Section 7 of the Insolvency and Bankruptcy Code,
2016, read with rules and regulations framed thereunder ("the Code").
b) Secretarial Auditor and secretarial Auditor Report
Pursuant to provision of Section 204 of the Companies Act, 2013, and
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the RP/COC
has appointed M/s ATG & Co., Practicing Company Secretaries for conducting Secretarial
Audit of the Company for the financial year 2022-23
The Secretarial Audit Report for FY 2022-23 as submitted by Secretarial
Auditor in Form MR-3 is annexed as Annexure-2.
There is no secretarial audit qualification for the year under review
except:
1. Company's website has not been updated as required under Regulation
46 of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and Companies Act, 2013 and rules made thereunder.
Reply: Due to unforeseen circumstances stemming from the impact of the
COVID-19 pandemic, our company has been facing significant financial challenges. The
adverse economic conditions have put a strain on our operations, leading to financial
stress. Unfortunately, during this difficult period, our banking partner withdrew their
support, further exacerbating our financial difficulties.
As a direct consequence of the withdrawal of banking support, our
company's bank accounts became inoperable. This, in turn, has hindered our ability to
fulfill various statutory compliances, including the timely payments to vendors including
website maintenance.
2. Company has not complied the provision regarding Structural Digital
Database (SDD) as prescribed under Regulation 3(5) and 3(6) Securities and Exchange Board
of India (Prohibition of Insider Trading) Regulations, 2015.
Reply: The severe economic repercussions of the pandemic have led to a
considerable strain on our operations, exacerbating financial stress. During this
challenging period, our company faced additional difficulties when our banking partner
withdrew their support, rendering our bank accounts temporarily inoperable. This financial
setback prevented us from making essential payments, including the acquisition of the
necessary Structural Digital Database (SDD) software mandated by the regulations.
3. Company has not submitted Compliance certificate to the Stock
Exchanges as required under Regulation 74(5) of SEBI (Depositories and Participants)
Regulations, 2018 for the Quarter ended June 2022. Further the company has delayed in
filing of the aforesaid Compliance certificate for the Quarter ended March 2022 and
September 2022.
Reply: The Company acknowledges the importance of timely regulatory
compliance and deeply regrets the oversight that led to the non-submission of the
Compliance Certificate for the quarter ending June 2022. Furthermore, we recognize the
delayed submission of the Compliance Certificates for the quarters ending March 2022 and
September 2022.
The delay and non-submission were due to an inadvertent error on our
part, and we take full responsibility for the oversight. We would like to assure the
regulatory authorities that corrective measures have been implemented to prevent such
occurrences in the future.
4. As on 31st March 2023, Registration of Ms. Charu Jain as Independent
Director in the data bank of Independent Director has not been renewed (expired), as
required under Section 150 of the Companies Act, 2013 read with Rule 6 of Companies
(Appointment and Qualification of Directors) Rules, 2014
Reply: The expiration of registration in the data bank is not
attributed to any action or inaction on the part of the Company. The responsibility for
registering and renewing registration in the data bank lies with individual directors, and
the company does not have control over this process. It is pertinent to note that Ms.
Charu Jain resigned from the directorship of the Company w.e.f. 01st August,
2023.
5. Company has not filed the Form MGT-14 regarding appointment of Key
managerial personnel (KMP) i.e Company Secretary as required under Section 117 and 179 of
the Companies ACT, 2013 read with Rule 8 of Companies (Meeting of Board and its
Powers)Rules, 2014.
Reply: The delay and non-submission were due to an inadvertent error on
our part, and we take full responsibility for the oversight. We would like to assure the
regulatory authorities that corrective measures have been implemented to prevent such
occurrences in the future.
6. Company has not transfer the shares and dividend to Investor
Education and Education Fund as required under Section 125 of the Companies Act, 2013.
Reply: Unfortunately, the Company has faced operational challenges and
financial stress as a consequence of the adverse economic conditions triggered by the
COVID-19 pandemic. This challenging period has been exacerbated by the withdrawal of
support from our banking partner, which has rendered our bank accounts temporarily
inoperable.
Regrettably, these financial constraints have impeded our ability to
fulfill various obligations, including the timely transfer of shares and dividends to the
Investor Education and Protection Fund.
c) Cost Auditor
In terms of Section 148 of the Act, the Company is required to maintain
cost records and have the audit of its cost records conducted by a cost accountant. Cost
records are made and maintained by the Company as required under Section 148(1) of the
Act. The Board of Directors at its meeting held 30th May, 2022 appointed M/s
Ajay Kumar Singh & Co (Firm Registration Number 000386), Cost Auditors to conduct the
Cost Audit for the Financial Year 2022-23.
For the financial year ending 31st March, 2023, the Board of
Directors of the Company has, on the recommendation of the Audit Committee, approved the
appointment of M/s Ajay Kumar Singh & Co as the cost auditors of the Company. M/s Ajay
Kumar Singh & Co, Cost Accountants have vast experience in the field of cost audit.
In accordance with the provisions of Section 148(3) of the Act read
with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable
to the cost auditors as recommended by the Audit Committee and approved by the Board has
to be ratified by the members of the Company.
Accordingly, an appropriate resolution for the proposed remuneration of
Rs. 35,000 per annum plus applicable taxes and out-of-pocket expenses payable to the cost
auditors for the Financial Year ending 31st March, 2023, forms part of the
notice of ensuing Annual General Meeting for ratification.
21. OTHER INFORMATION
a) Details in respect of frauds reported by Auditors other than those
which are reportable to the Central Government.
The Statutory Auditors, Secretarial Auditors, Cost Auditors or Internal
Auditors of the Company have not reported any frauds to the Audit Committee or to the
Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made
thereunder.
b) Stock Options Scheme
The Company does not have any Scheme of Stock Option for its employees,
Directors etc.
c) Disclosure under Section 43(a)(iii) and Section 54(1) (d) of the
Companies Act, 2013
During the year under review, the Company has not issued any shares
with differential voting rights and sweat equity shares and hence, no information as
required under Section 43(a)(iii) &
Section 54(1)(d) of the Companies Act, 2013 read with applicable rules
is required to be disclosed.
d) Risk Management
The Board/ management is continuingly reviewing the Risk management
framework of the Company. The Company regularly put in place a suitable enterprise risk
management framework for identifying and evaluating risks and opportunities that may have
bearing on the organization. The Company recognizes that these risks need to be managed
and mitigated to protect the shareholders and other stakeholder's interest.
e) Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and outgo
In accordance with Section 134(3)(m) of the Companies Act, 2013, read
with the Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended, the information on
conservation of energy, technology absorption and foreign exchange earnings and outgo are
annexed as Annexure - 3 hereto and forms an integral part of this Report.
f) Particulars of Employees and Related Disclosures
Disclosures pertaining to remuneration and other details of the
employees as required under Section 197(12) of the Companies Act 2013, read with Rule 5 of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as
amended, are annexed to this report as Annexure -4.
g) Extract of Annual Return
Pursuant to Section 92(3) and Section 134(3)(a) of the Companies Act,
2013, the Company has placed a copy of the Annual Return as at 31st March, 2023
on its website at https://cmilimited.in/investors/extract-of-annual-report. By virtue of
amendment to Section 92(3) of the Companies Act, 2013, the Company is not required to
provide extract of Annual Return (Form MGT-9) as part of the Board's report.
h) Management Discussion & Analysis Report
The Management Discussion and Analysis Report on the operations of the
Company, as required under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (hereinafter referred to as "Listing Regulations") is provided
in a separate section and forms an integral part of the Annual Report.
i) Particulars of Loans, Guarantees or Investments under Section 186
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the note no 10 & 11
to the Financial Statements.
j) Corporate Governance Report
The Company has complied with requirements of Regulation 34 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on the
Corporate Governance practices followed by the Company, together with a certificate from
the Practicing Company Secretary regarding compliance is given as an Annexure-5 to
this report.
k) Cost Records
As per the requirement of Central Government and pursuant to provisions
of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules,
2014 as amended from time to time, audit of cost records of the Company is being carried
out. The Resolution Professional has appointed M/s Ajay Kumar Singh & Co., Cost
Accountants, as Cost Auditor to audit the cost records and accounts relating to cable
manufacturing for the financial year ending 31st March, 2024. As per the
requirement of the aforesaid section, a resolution ratifying remuneration payable to Cost
Auditors forms part of the Notice convening the 56th Annual General Meeting.
Your Company has maintained cost records and accounts as per Section
148 (1) of the Companies Act, 2013. Further, the Cost Audit Report along with annexure for
FY 2021-22 was approved by board of Directors on 30th September, 2022.
l) Disclosure under the Sexual Harassment of Women at Work Place
(Prevention, Prohibition and Redressal) Act, 2013.
The Company has laid down Anti Sexual Harassment policy on Gender
Equality, Gender Protection, Prevention of Redressal System in line with the requirements
of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints
received regarding sexual harassment. All employees (permanent, contractual, temporary,
Apprenticeship) are covered under this policy. The following is a summary of sexual
harassment complaints received and disposed of during the year under review- > No. of
complaints received: Nil > No. of complaints disposed of: NA
> No. of Complaints at the end: NIL
m) Secretarial Standards
The Company has in place proper systems to ensure compliance with the
provisions of the applicable secretarial standards issued by the Institute of Company
Secretaries of India and such systems are adequate and operating effectively.
22. CAUTIONARY NOTE
Certain Statements in the 'Management Discussion and Analysis' section
may be forward- looking and are stated as required by applicable laws and regulations.
Many factors may affect the actual results, which would be different from what the
Directors envisage in terms of the future performance and outlook. Investors are cautioned
that this discussion contains forward looking Statement that involve risks and
uncertainties including, but not limited to, risks inherent in the Company's growth
strategy, dependence on certain businesses, dependence on availability of qualified and
trained manpower and other factors discussed. The discussion and analysis should be read
in conjunction with the Company's financial statements and notes on accounts.
23. OTHER DISCLOSURES
> During the financial year 2022-23, the Company has not made any
application.
THE Hon'ble National Company Law Tribunal, Delhi Bench,
("NCLT") vide its order dated July 28, 2023 ("Order"), pronounced on
August 01, 2023, has admitted the application filed by Canara Bank ("Financial
Creditor") under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with
rules and regulations framed thereunder ("the Code") and accordingly the
corporate insolvency resolution process ("CIRP") has commenced of the Company,
CMI Limited ("Company") with effect from July 28, 2023.
Furthermore, the Hon'ble National Company Law Tribunal, Delhi Bench,
("NCLT") has also approved the appointment of Mr. Deepak Maini as the Interim
Resolution Professional ("IRP")/Resolution Professional ("RP") to
conduct the CIRP of the Company admitted under section 7 of the Insolvency and Bankruptcy
Code 2016.
Status of CIRP Proceeding:
As per the Form G published vide dated 29 September 2023, 30
Prospective Resolution Applicants submitted their Expression Of Interest (EOI) in the
Resolution Process of CMI Limited. Information Memorandum, Request for Resolution Plan
(RFRP) and Evaluation Matrix has been duly issued to all the PRAs and the Resolution
Process is conducted well within the timelines. The undersigned is awaiting the Resolution
Plans and is taking endeavor to ensure a successful Resolution Process of the Company.
> There were no instances where the Company required the valuation
for one time settlement or while taking the loan from the Banks or Financial institutions.
> The Company has not issued shares with differential voting rights
and sweat equity shares during the year under review.
24. ACKNOWLEDGEMENT
The Directors (Power Suspended) under the guidance of Resolution
Professional, wish to place on record their gratitude to the Authorities, Banks, Business
Associates and Shareholders for their unstinted support, assistance and co-operation. The
Directors place on record their deep appreciation to employees at all levels for their
hard work, dedication and commitment.
New Delhi |
By order of the board (Power Suspended) |
Date: 01.12.2023 |
For CMI Limited |
|
Sd/- |
|
(Amit Jain) |
|
Chairman cum Managing |
|
Director |
|
DIN: 00041300 |