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Hercules Hoists Ltd.

BSE: 505720 Sector: Engineering
NSE: HERCULES ISIN Code: INE688E01024
BSE LIVE 15:58 | 17 Nov 136.95 1.85
(1.37%)
OPEN

136.00

HIGH

140.00

LOW

136.00

NSE 15:56 | 17 Nov 136.70 2.35
(1.75%)
OPEN

135.00

HIGH

139.90

LOW

135.00

OPEN 136.00
PREVIOUS CLOSE 135.10
VOLUME 9853
52-Week high 188.75
52-Week low 125.00
P/E 285.31
Mkt Cap.(Rs cr) 438
Buy Price 0.00
Buy Qty 0.00
Sell Price 136.95
Sell Qty 1.00
OPEN 136.00
CLOSE 135.10
VOLUME 9853
52-Week high 188.75
52-Week low 125.00
P/E 285.31
Mkt Cap.(Rs cr) 438
Buy Price 0.00
Buy Qty 0.00
Sell Price 136.95
Sell Qty 1.00

Hercules Hoists Ltd. (HERCULES) - Director Report

Company director report

Dear Members

We present our 55th Annual Report together with the Audited FinancialAccounts for the year ended March 31 2017:

1. Financial Results

(Rs. In Lakhs)

Financial Results As on March 31 2017 As on March 31 2016
Revenue from Operations and Other Incomes 8265.17 10330.02
Profit before Finance Cost & Depreciation 981.58 1913.84
Less- Finance Cost 22.51 24.58
Less-Depreciation 259.05 220.17
Profit before taxes 700.02 1669.09
Provision for taxation for the year (including deferred tax earlier year's income-tax 100.15 340.17
adjustment and MAT credit )
Profit after Taxes 599.87 1328.92
Add: Balance brought forward from previous year 1352.76 1101.55
Profit available for appropriation 1952.63 2430.47

2. Dividend

The Directors recommend for consideration of the shareholders at the Annual GeneralMeeting payment of dividend of Re. 1.00 per Equity Share of Re.1.00 each for theyear ended March 31 2017 as against Rs.1.50 per Equity Shares of Re.1.00 in the previousyear.

3. Operations

The revenue from operations of Rs. 7416.45 Lakhs is 18.62% lower than last year'srevenue from operations of Rs.9113.55 Lakhs. The net profit of Rs. 599.87 Lakhs is54.86% lower as compared to last year's net profit of Rs.1328.92 Lakhs. With theCompany's products / solutions being used as capital equipment sectors which are thedrivers of capital equipment industry have still not picked up to levels where capacityutilization of industry requires higher investment either for expansion or new projects.Sectors like automotive metals engineering power and other manufacturing sectors wherethe Company's products / solutions are required are not seeing any noticeable growth yet.The Company has invested in a highly efficient ERP system. To further the streamlining ofoperations and create a decisive competitive edge the Company has commenced theimplementation of a Theory of Constraints (ToC) based on demand and supply managementsystem. This will enable the Company to significantly improve its sales distributionprocesses whereby it will be able to attend to customer requirements substantially faster.The Company expects to streamline its working capital with the full implementation of ToCbased system.

The Company is shifting its commercial office to a new office situated at Belapur NaviMumbai for improving operational efficiency.

The Company has disposed inventory amounting to Rs. 206.95 Lakhs net of realizablevalue during the year which had become obsolete due to design changes for improvingperformance and range of Company's products. The Company has made provision of Rs. 286.92Lakhs for old and unrecoverable dues from customers during the year.

The Company's 4 Windmills produced 58.75 Lakhs units of energy in the current year asagainst 46.21 Lakhs units of energy produced in the previous year.

4. Directors and Key Managerial Personnel-Changes

Shri K C Uebel and Shri Shekhar Bajaj retire by rotation at the ensuring Annual GeneralMeeting and being eligible offer themselves for re-appointment. The Board of Directorshave re-appointed Shri H A Nevatia as a Director in Whole-time employment of the Companywith effect from November 22 2017 for a period of three years. The Special Resolution forapproval of his appointment as a "Whole-time Director" is given in the notice.The detailed profiles of above mentioned Directors are given under the head"Corporate Governance". The members at the Annual General Meeting held on August12 2016 had approved the appointment of Shri Vandan Shah as an Independent Director fora term of five years effective from February 6 2016.

5. Declaration by Independent Directors

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section (6).

6. Auditors

A) Statutory Auditor

Pursuant to the provisions of section 139 of the Companies Act 2013 the 3 years termsof present auditor M/s M L

Bhuwania & Co Chartered Accountants expires on 55th Annual GeneralMeeting. The Board of Directors places on record its appreciation to the services renderedby them as the Statutory Auditor of the Company.

Further on recommendation of audit committee the Board considered a proposal toappoint from M/s. Kanu Doshi

Associates LLP Chartered Accountants Mumbai for five years term with effect from 55thAnnual General Meeting to 60th Annual General Meeting of the Company. Also the Companyhas received a certificate from them to the effect that their appointment if made wouldbe within the prescribed limit under the Act. The Board recommends their appointment.

B) Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 and rules made thereunder the Boardof Directors had on the recommendation of the Audit Committee appointed M/s R Nanabhoy& Co. Cost Accountants to audit the cost accounts of the Company for the financialyear 2017-18 at a remuneration of Rs. 0.42 Lakhs -plus service tax reimbursement ofout-of pocket expenses subject to ratification by the shareholders at ensuing AnnualGeneral Meeting. Accordingly a Resolution seeking Members' ratification for theremuneration payable to Cost Auditors is given in the notice.

C) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rule madethereunder the Company has appointed M/s S N Ananthasubramaniam & Co CompanySecretaries to undertake the Secretarial Audit of the Company. The Secretarial AuditReport is annexed herewith as "Annexure C".

7. Significant and Material orders passed by the Regulators or Court

During the year in review there were no significant and material orders passed bythe Regulators or Courts or tribunals which may impact the going concern status of theCompany and its operations in future.

8. Internal Control over system and financial reporting

The Company has adequate internal control systems to monitor its operations andalso the Company has policies and procedure in place for reliable financial reporting.

9. Material Changes & Commitments

There have been no material changes and commitments affecting the financial positionof the company which have occurred between the end of the financial year of the companyand the date of this report.

10. Presentation of Financial Results

The financial results of the Company for the year ended March 31 2017 have beendisclosed as per Schedule III of the Companies Act 2013.

11. Risk Management Policy

Information on the development and implementation of a risk management policy for thecompany including identification therein of elements of risk which in the opinion of theboard may threaten the existence of the Company is given in the annexed ManagementDiscussion and Analysis.

12. Corporate Social Responsibility (CSR)

Detailed information on CSR Policy developed and implemented by the Company on CSRinitiatives taken during the year pursuant to section 134 & 135 of the Companies Act2013 is given in the "Annexure A".

13. Directors' Responsibility Statement

As required under section 134(3)(c) of the Companies Act 2013 Directors to the bestof their knowledge and belief state that

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) the Directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

14. V igil Mechanism

The details of the Vigil Mechanism Policy covered under the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are explained inthe Corporate Governance Report and also posted on the website of the Company.

15. Directors' Remuneration Policy and Criteria for matters under section 178

Information regarding Directors' Remuneration Policy & criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3) of Section 178 are provided in the annexed Corporate GovernanceReport.

16. Corporate Governance

Detailed reports on matters relating to Corporate Governance and ManagementDiscussion and Analysis Report under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are annexed as part of this Annual report together withthe report of Practicing Company Secretary on its compliance thereon.

17. Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting.

18. Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in schedule No. 10 & 15 to theFinancial Statements.

19. Number of Meetings of the Board and Audit Committee

During the year five Board Meetings and five Audit Committee Meetings were convenedand held. The details of which are given in the Corporate Governance Report.

20. Formal Annual Evaluation of the performance of Board its Committees and Directors

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations& Disclosure Requirement) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance Board as a whole and committees. The mannerin which the evaluation has been carried out has been explained in the CorporateGovernance Report.

21. Related Party Transactions

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There were nomaterially significant related party transactions made by the Company with PromotersDirectors and Key Managerial Personnel which may have a potential conflict with theinterest of the Company. The policy on Related Party Transactions as approved by the Boardis placed on the Company's website.

22. Prevention Prohibition and Redressal of Sexual Harassment of Women at Workplace

The Company has in place an Anti-Sexual Harassment Policy and Internal ComplaintsCommittee (ICC) to redress complaints received regarding sexual harassment in line withthe requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. All employees are covered under this policy. Therewere no Complaints received during the year.

23. Energy Conservation Technology Absorption and Foreign Exchange Earning and Outgo

The information on conservation of energy technology absorption foreign exchangeearning and outgo etc. to the extent applicable stipulated under section 134 (3) (m) ofthe Companies Act 2013 read with Rule no. 8 of the Companies (Accounts) Rules 2014 isset out in "Annexure A" annexed hereto.

24. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure B"

25. Industrial Relations

The relationship with the employees continued to be cordial during the year.

Your Directors take this opportunity to thank the Banks Government authoritiesRegulatory authorities Stock exchanges Employees and all Stakeholders for theircontinued co-operation and support to the Company.

On behalf of the Board of Directors
Dated : May 30 2017 Shekhar Bajaj
Place : Mumbai Chairman
(DIN No. 00089358)