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HEC Infra Projects Ltd.

BSE: 532533 Sector: Infrastructure
NSE: HECPROJECT ISIN Code: INE558R01013
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HEC Infra Projects Ltd. (HECPROJECT) - Director Report

Company director report

To

The Members

HEC INFRA PROJECTS LIMITED

Your Directors are pleased to present the 11th Annual Report together with AuditedStatement of Accounts for theyear ended 31st March 2016.

1. Financial Results and Appropriations :

The Summarized Standalone Result of your Company is given in the table below.

(Amount Rs. In Lacs)
SR. No. Particulars Current year 2015-16 Previous Year 2014-15
1. Operational Income 11595.05 12501.39
2. Other Income 81.08 63.29
3. Total Revenue 11676.13 12564.69
4. Profit before interest Depreciation Exceptional items and taxes (EBIDTA) 740.39 639.29
5. Depreciation 31.92 37.2
6. Finance Cost 313.25 287.08
7. Exceptional Items (Net) - -
8. Extra Ordinary Items 1.15 -
9. Profit before Taxes 394.07 368.99
10. Current Tax 140.00 125.00
11. Deferred Tax (0.95) (5.45)
12. Taxation in respect of Earlier year - 2.28
13. Net Profit/(Loss) 255.02 247.16

During the year under review the company has transferred whole profit of Rs. 255.02Lacs to the Profit and Loss.

The Company discloses financial results on a half yearly basis of which results aresubjected to limited review. The Financial Statements as stated above are also availableon the website of the Company i.e. www.hecprojects.in

2. Results of Operations:

The total sales and other income during the year have been Rs. 11676.13 Lacs comparedto Rs. 12564.69 Lacs in previous year. The Company's Net Profit after interestdepreciation prior period adjustments & taxes areRs. 255.02 Lacs compared to Rs.247.16 Lacs in previous year.

3. Transfer to Reserve:

The opening balance of Securities Premium was Rs. 256.11Lacs during the year underreview there was addition of Rs. 484.92Lacs due to proceeds of issue of Shares. TheOpening and closing balance of General Reserve was Rs. 1.00 Lacs. The opening balance ofProfit & Loss Account was Rs. 818.07 Lacs. During the year under review the companyhas transferred whole of profit of Rs. 255.02 Lacs to the Profit and Loss and consequentlythe closing Balance of Profit and Loss as at 31st March 2016 was Rs. 1048.68 Lacs.

4. Dividend:

The Board of Directors are pleased to recommend a dividendof Rs. 1/- per Equity Sharefor the year ended on 31st March 2016.

5. Material Changes and Commitment:

During the year under review the Authorized Share Capital of the Company is increasedfrom Rs. 15000000 ( Rupees One Crore fifty Lacs Only) to Rs. 21000000 ( Rupees Twocrore Ten Lacs Only) by alteration in capital clause of Memorandum of Association in itsExtra Ordinary General Meeting held on 16th September 2015.

6. Delisting From EMERGE ITP:

During the year under Review company voluntary delisted its Shares from InstitutionalTrading Platform of NSE vide letter dated 4th February 2016.

7. Listing of Shares on EMERGE SME:

The Company issues Shares by way of issue of Initial Public Officerand listed on theNSE EMERGE PLATFORM therefore Paid-up Share Capital of the Company increase from1488832 to 2027653.

8. Particulars of Loan/Guarantees/Investments:

The Company has not given any loan (Other than the loans and advances for its ordinarycourse of Business) /guarantee or provided any Security or made any investment to anyperson.

9. Declaration by Independent Director:

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of theCompanies Act 2013 and Regulation 25of SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015.

10. Number of Meetings:

During the year the Board of Directors met 18 times. The details of the Board Meetingare provided in Corporate Governance Report.The maximum interval between any two meetingsdid not exceed 120 days as prescribed in the Companies Act 2013.

11. Director's Responsibility Statement:

As stipulated in Section 134(3)read with sub-section (5) of the Companies Act 2013Directors subscribe to the "Directors' Responsibility Statement" and confirmthat:

(a) In the preparation of the annual accounts for the financial year 2015-16 theapplicable accounting standards have been followed along with proper explanation relatingto material departures;

(b) They have selected such accounting policies and applied them consistently and madejudgment and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;

(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provision of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) Theyhave prepared the annual accounts on a going concern basis; and

(e) Theyhave laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.

12. Audit Committee:

The audit committee of the Company is constituted in line with the provisions ofSection 177 of the Companies Act 2013. The composition of audit committee is given below:

1) Mr. Sachin Knawarlal Kansal

2) Mr. Asit Ramniklal Shah

3) Mrs. Ritu Vinodkumar Chaudary

Mr. Sachin Knawarlal Kansal is the Chairman of the Audit Committee. The CompanySecretary of the Company shall act as a Secretary of the Company.

13. Formal Annual Evaluation:

In compliance with the provisions of the Act and SEBI (Listing Obligation andDisclosure Requirement) Regulation 2015 the performance evaluation was carried out asunder:

Board:

In accordance with the criteria suggested by The Nomination and Remuneration Committeethe Board of Directors evaluated the performance of the Board having regard to variouscriteria such as Board composition Board processes Board dynamics etc. The IndependentDirectors at their separate meetings also evaluated the performance of the Board as awhole based on various criteria. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.

Committees of the Board:

The performance of the Audit Committee the Nomination and Remuneration Committee andthe Stakeholders Relationship Committee was evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsetc. The Board was of the unanimous view that all the committees were performing theirfunctions satisfactorily and according to the mandate prescribed by the Board under theregulatory requirements including the provisions of the Act the Rules framed there underand the Listing Agreement.

Individual Directors:

(a) Independent Directors: In accordance with the criteria suggested by The Nominationand Remuneration Committee the performance of each independent director was evaluated bythe entire Board of Directors (excluding the director being evaluated) on variousparameters like engagement leadership analysis decision making communicationgovernance and interest of stakeholders. The Board was of the unanimous view that eachindependent director was a reputed professional and brought his/her rich experience to thedeliberations of the Board. The Board also appreciated the contribution made by all theindependent directors in guiding the management in achieving higher growth and concludedthat continuance of each independent director on the Board will be in the interest of theCompany.

(b) Non-Independent Directors: The performance of each of the non-independent directors(including the chair person) was evaluated by the Independent Directors at their separatemeeting. Further their performance was also evaluated by the Board of Directors. Thevarious criteria considered for the purpose of evaluation included leadership engagementtransparency analysis decision making functional knowledge governance and interest ofstakeholders. The Independent Directors and the Board were of the unanimous view that eachof the non-independent directors was providing good business and people leadership.

14. Changes in Nature of Business:

The Company is engaged in electro mechanical and turnkey projects. During the yearunder review there is no Change in the Nature of Business.

15. Deposits:

The Company does not have "Deposits" ascontemplated under Chapter V oftheCompaniesAct 2013. Further the Company has not invited oraccepted any such depositsduring the year ended 31st March 2016.

16. Changes in Directors and Key Managerial Personnel:

During the year under review Mr. Yogesh Popatlal Shah and Mr. Anirudhasnh HarendrasinhGohil an Additional Director of the Company resigned as director with effect from 10thOctober 2015and 29th September 2015 respectively. The Board of Directors of the Companyplaces on record its appreciation for the services rendered by him during his longassociation with the Company. Mr. Gaurang Parmananddas Shah was Re-appointed as ManagingDirector with effect from 30th September 2015.

In accordance with the provision of Section 152(6) of the Companies Act 2013 andArticles of Association of the Company Mrs. Rupal Shah Director of your Company retireby rotation at the ensuing Annual General Meeting and being eligible offers herself forre-appointment subject to the approval of Shareholders of the Company. A brief Resume ofMrs. Rupal Shah is attached with the Notice of Annual General Meeting.

Mr. Asit Ramniklal Shah and Mr. Sachin Kanwarlal Kansal have been appointed as theIndependent Directors subject to the approval of shareholders of the company in theGeneral Meeting. Hence the shareholders are requested to approve the appointment of abovementioned independent directors. During the period under review Mrs. Rupal Gaurang Shahwas appointed as CEO with effect from 29th June 2015 and she resigned on 10th August2015 but she continued as Director of the Company. Ms. Hema Advani was appointed asCompany secretary of the Company with effect from 22nd July 2015 and she resigned fromoffice with effect from 10th August 2015. Ms. Hema Lakhmichand Advani (ACS No. 40537) wasfurther appointed form 1st January 2016.

17. Internal Financial Controls:

The existing internal financial controls are adequate and commensurate with the naturesize complexity of the Business and the Business Processes followed by the Company.Internal Financial Controls have been reviewed by Independent Experts who have reportedthat their audit did not disclose any serious material internal control problem orweakness which could be considered pervasive in their effect on the overall effectivenessand efficiency of the operations.

18. Auditors:

A) Statutory Auditor & Audit Report:

Pursuant to provision of Section 139 of the Act and rules framed there under M/s. ParthP. Shah & Co. Chartered Accountants Ahmedabad (Firm Registration No. 141540W) wasappointed as an Auditor of the Company from the resolution passed at the Extra ordinaryGeneral Meeting of the Company to the conclusion of the 5th Annual General Meeting (i.e15th Annual General Meeting for the financial year 2020) on such remuneration as may befixed by the Board apart from re-imbursement of out of pocket expense as may be incurredbe them for the purpose of audit.

B) Internal Auditor:

M/s. N. K. Kapadia & Co. a reputed firm of Chartered Accountants is the InternalAuditors of the Company. The Audit Committee of the Board of Directors in consultationwith the Internal Auditor formulates the scope functioning periodicity and methodologyfor conducting the internal audit.

C) Secretarial Auditor:

Pursuant to provisions of Section 204(1) of the Companies Act 2013 and rules made inthis behalf the Board of Directors of the Company after taking approval of members inAnnual general meeting appointed M/s. Jalan Alkesh & Associates practicing CompanySecretary Ahmedabad to carry out Secretarial Audit of the Company for the financial year2015-16.

19. Explanations or Comments by the Board on every qualification Reservation orAdverse remark or disclaimer made:

a) By Auditor in his report

b) By Practicing Company Secretary in his Secretarial Audit Report

Auditor's report and Secretarial Auditor's report does not contain any qualificationReservation or Adverse remark or disclaimer so there is no need to give any explanation.The Secretarial Audit Report is attached as Annexure-I to this report

20. Corporate Social Responsibility:

The Company is not covered under the criteria of Section 135 of Companies Act 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014 andtherefore it is not mandatory for the Company to have the Corporate Social Responsibility.

21. Extract of annual Return:

Pursuant to provision of Section 92 and 134 and other applicable provision of CompaniesAct 2013 and of Rule 12(1) of Companies (Management and administration) Rules 2014 theextract of annual return in Form MGT-9 for the Financial Year ended on 31st March 2016 isannexed as Annexure-II to this Report.

22. Particulars of Employee:

During the year under review there was no employee who has drawn remuneration inexcess of the limits set out under Secti'on197(12) of the Companies Act 2013 read withRule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel)Rules 2014.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as Annexure-III.

23. Conservation of energy technology absorption foreign exchange earnings and outgo:

The Company is engaged inproviding service activity. The Company is not engaged in anymanufacturing activity and hence the particulars required to be reported for theconservation of energy technology absorption are either nil or not applicable. There isno foreign exchange earnings and outgo during the year under review.

24. Particulars of contracts or arrangements with related party:

All related party transactions that were entered into during the year under report wereon an arm's length basis and in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company during the year. No advance is/ was paid for entering into related party transactions. The prices paid to the relatedparty transactions are based on the ruling market rate at the relevant point of time. Therequisite details in form AOC-2 is attached herewith as Annexure-IV which forms part ofthe Directors Report.

25. Policies:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandatedthe formulation of certain policies for all listed Companies. All our Corporate Governancepolicies are available on our website (http://www.hecprojects.in/investors/). The policiesare reviewed periodically by the Board and updated based on need and new compliancerequirement.

Name of Policy Brief Description Web Link
Code of Conduct The Company has formulated and adopted code of Conduct for the Senior Management and officers of the Company. http://www.hecprojects.in/files/c ode-of-conduct-.pdf
Remuneration Policy The policy formulated the criteria for determining qualifications Competencies Positive affitude and independence for appointment of a Director (Executive/Non- Executive) and also the Criteria for determining the remuneration of the directors Key Managerial Personnel and other employees. http://www.hecprojects.in/invest ors/
Insider Trading Policy The Company has adopted the policy for regulate monitor and report trading by insiders & code of fair disclosure of unpublished price sensitive information for the Directors KMP and other designated officers and connected persons of the Company http://www.hecprojects.in/invest ors/
Risk Management Policy The Company has a structured risk management policy. The Risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making. http://www.hecprojects.in/invest ors/
Related Party Transaction Policy The Board of the Company has adopted the Policy and procedure with regard to Related Party Transactions. The policy envisages the procedure governing the materiality of Related Party Transactions and dealing with Related Party transactions required to be followed by Company to ensure compliance with the Law and Regulation. http://www.hecprojects.in/invest ors/
Whistle Blower Policy The Company has adopted the Vigil Mechanism for directors and employees to report concerns about unethical behavior actual or suspected fraud or violation of the Companies code of conduct and ethics. www.hecprojects.in/files/vigilmec hanism.pdf

26. Corporate Governance and Management Discussion and Analysis Report:

In terms of the provisions Securities and Exchange Board of India (Listing Obligationand Disclosure Requirements) Regulations 2015 the Corporate Governance Report andmanagement Discussion and Analysis is presented as a Separate section forming integralpart of Annual Report.

27. CEO & CFO Certification:

Pursuant to Regulation 17(8) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Certificate from Mr. PannalalJatashanker Surti Chief Financial Officer of the Company for the year ended 31st March2016 is also attached herewith which forms part of Corporate Governance Report.

28. Auditor's Certificate of corporate Governance:

As required by SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015the Auditor's certificate on corporate Governance is enclosed as Annexure-V to the Board'sReport. The Compliance certificate for the year 2015-16 does not contain anyqualification Reservation or adverse remark.

29. Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:

The Company has in place an Anti harassment policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Committee are set up at shop floor level to redress complaints receivedregularly and are monitored by women line supervisors who directly report to the Chairman.All employees (permenant contractual temporary trainees) are covered under the policy.There was no compliant received from any employee during the financial year 2015-16 andhence no complaint is outstanding as on 31.03.2016 for redressal.

30. Acknowledgements:

We take this Opportunity to thank our Customers Vendors Investors Bankers andGovernment Agencies & Regulators Suppliers & Customers Shareholders NationalStock Exchange Merchant Bankers and all the Business Associates for their continuedsupport during the year. We place on record our appreciation of the contribution made byour employees at all levels. Our consistent growth was made possible by their hard worksolidarity cooperation and support and look forward to their continued support in thefuture.

By order of the Board of Directors
For HEC INFRA PROJECTS LIMITED
Place : Ahmedabad Gaurang Shah
Date :29/08/2016 ( Chairman Cum Managing Director)
By order of the Board of Directors
For HEC INFRA PROJECTS LIMITED
Rupal Shah
( Director)