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High Ground Enterprise Ltd.

BSE: 517080 Sector: Others
NSE: HIGHGROUND ISIN Code: INE361M01021
BSE 00:00 | 26 Apr 13.29 1.19
(9.83%)
OPEN

12.18

HIGH

13.31

LOW

11.82

NSE 00:00 | 26 Apr 13.20 1.20
(10.00%)
OPEN

11.80

HIGH

13.20

LOW

11.80

OPEN 12.18
PREVIOUS CLOSE 12.10
VOLUME 128036
52-Week high 28.00
52-Week low 8.00
P/E 5.47
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.18
CLOSE 12.10
VOLUME 128036
52-Week high 28.00
52-Week low 8.00
P/E 5.47
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

High Ground Enterprise Ltd. (HIGHGROUND) - Director Report

Company director report

DIRECTOR'S REPORT

To

The Members

Your Directors have pleasure in presenting the 32nd Annual Report on the business andoperations of the Company together with the audited financial statements for thefinancial year ended March 31 2017.

HIGHLIGHTS OF FINANCIAL RESULTS

The Company's financial performance for the year ended March 31 2017 is summarizedbelow:

Particulars Year ended March 31 2017 Year ended March 31 2016
(Rs. In Lacs) (Rs. In Lacs)
Consolidated Standalone Consolidated Standalone
Net Revenue from operations:
Engineering Procurement 27275.07 25865.02 19339.52 19339.52
Construction Management (EPCM)
Media Consulting and allied 4972.53 4887.86 5487.68 5463.27
services
Total Revenue from operations 32247.60 30752.88 24827.20 24802.79
Other Income 11.72 11.58 870.20 870.20
Total expense other than 29871.71 28248.27 23085.03 23059.35
Finance Cost Depreciation and
amortization
Earnings before Finance Cost 2387.62 2516.21 2612.37 2613.64
Depreciation amortization and tax
(EBIDTA)
Depreciation & amortization 116.10 115.38 132.90 132.63
Earnings before Finance Cost and 2271.52 2400.83 2479.47 2481.01
Tax
Finance costs (net) 483.89 483.63 320.63 320.56
Profit before tax (PBT) 1787.63 1917.20 2158.84 2160.45
Tax expenses 667.03 665.59 748.28 747.95
Profit after tax (PAT) 1120.60 1251.61 1410.56 1412.50
Basic earnings per share (`) 0.98 1.09 1.35 1.35
Diluted earnings per share 0.98 1.09 1.38 1.38

DIVIDEND

The Board of Directors of the Company at their meeting held on May 30 2017 haverecommended a dividend of Re. 0.10/- (Ten Paisa) per equity share of Re. 1/- (i.e.10% onthe face value of the shares) as final dividend for the financial year 2016-17.

The dividend will be paid to members whose names appear in the Register of Members ason September 20 2017 and in respect of shares held in dematerialized form it will bepaid to members whose names are furnished by National Securities Depository Limited andCentral Depository Services (India) Limited as beneficial owners as on that date.

CORPORATE GOVERNANCE

The Company has vigorously taken steps to follow the best corporate governancepractices aimed at building trust among the key stakeholders shareholders employeescustomers suppliers and other stakeholders on four key elements of corporate governance -transparency fairness disclosure and accountability and the Certificate from PracticingCompany Secretary forms a part of this Report.

OPERATIONS AND BUSINESS PERFORMANCE:

Turnover

During the year ended March 31 2017 the Company's total revenue is Rs. 30764.46Lacs as against Rs. 25672.99 lacs in the previous period.

Analysis of Income from Operations

During the year under review income from Engineering Procurement and ConstructionManagement was Rs. 25865.02 Lacs as compared to Rs19339.52 Lacs during theprevious year. During the year under review income from Media consulting and alliedservices was Rs. 4887.86 Lacs as compared to Rs 5463.27 Lacs during theprevious year.

Financial Year Sales / Turnover Percentage of Total Turnover (%)
(Rs. in Lakhs) EPCM Media & Entertainment
2015-16 25672.99 75.33 21.28
2016-17 30764.46 84.07 15.89

Other Income

Other income for the year is Rs. 11.58 Lacs against Rs. 870.20 Lacs inthe previous year. As was the case last year for the year under review Income fromforeign exchange fluctuations and interest income are major contributors to other incomeof the Company.

Other expenses

During the year other expenses were Rs. 764.81 Lacs as against Rs. 1368.79Lacs in the previous period.

DIRECTORS

Pursuant to sections 149 152 and other applicable provisions if any of the CompaniesAct 2013 one-third of such of the Directors are liable to retire by rotation and shallretire every year and if eligible offer themselves for re-appointment at every AGM.Consequently Mr. Arunkumar Tyagi (DIN: 05195956) Director will retire by rotation at theensuing AGM and being eligible offer himself for re-appointment in accordance with theprovisions of the Companies Act 2013.

Further during the year under review following directors of the Company have resignedfrom the Directorship of the Company:

Sr. No. Name of the Director Date of Resignation
1. Mr. Ajit Sharma August 17 2016
2. Mr. Paul Taylor June 92017

The Board places on record its appreciation to the resigned directors for theirvaluable guidance provided during their tenure as Director of the Company.

DECLARATION BY INDEPENDENT DIRECTORS: {SECTION 134 (3)(D)}

The Independent Directors of the Company are not associated with the Company in anymanner as stipulated under section 149(6) of Companies Act 2013 and at same time possessrelevant expertise and experience that are additive to the Board of the Company fordelivering higher growth and higher value.

The brief resume of the Directors being appointed/ reappointed the nature of theirexpertise in specific functional areas names of companies in which they have heldDirectorships Committee Memberships/ Chairmanships their shareholding etc. arefurnished in the explanatory statement to the notice of the ensuing AGM.

The Directors recommend their appointment/re-appointment at the ensuing AGM.

Pursuant to the provisions under Section 134(3)(d) of the Companies Act 2013 withrespect to statement on declaration given by Independent Directors under Section 149(6) ofthe Act the Board hereby confirms that all the Independent Directors of the Company havegiven a declaration and have confirmed that they meet the criteria of independence asprovided in the said Section 149(6).

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:

Sandeep Ramkrishna Arora Chairman & Managing Director
Chintan Kapadia Whole time Director & Chief Financial Officer
Arunkumar Tyagi Whole - Time Director
Unnati A. Amodwala Company Secretary & Compliance Officer

PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 there are NIL employees drawing remuneration in excess of thelimits prescribed in the Act.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is attached as ‘Annexure –A' whichforms part of this report.

BOARD MEETINGS

During the financial year 2016-2017 the Board of Directors met 19 (Nineteen) times andthe date of Board Meeting were May 30 2016 August 01 2016 August 13 2016August 16 2016 August 17 2016 September 01 2016 September 28 2016 October 132016 October 21 2016 October 28 2016 November 14 2016 November 24 2016 November26 2016 November 28 2016 January 18 2017 January 20 2017 January 24 2017February 13 2017 and February 23 2017. The gap between any two meetings has been lessthan 120 days.

Details of the Board of Directors and Attendance Record of Directors during thefinancial year ended March 31 2017 is as under:

Name Board Meetings held Board Meetings attended
Chintan Arvind Kapadia 19 19
Sandeep Ramkrishna Arora 19 19
Anupam Kumar 19 07
Paul Anthony Taylor 19 00
Sonia Khenduja 19 15
#Ajit Sharma Kamal 19 05
Arunkumar Tyagi 19 11
Sudhir V. Yashwantrao 19 12
Mataprasad B. Sharma 19 12

# Ajit Sharma has resigned from the Directorship of the Company w.e.f.August 17 2016.

* Paul Anthony Taylor hasresigned from the Directorship of the Company w.e.f June9 2017

SHARE CAPITAL

The entire share capital of the Company is listed and traded on BSE Limited andNational Stock Exchange of India Limited. The Board of Directors of the Company at itsmeeting held on August 16 2016 at the registered office of the Company has approved IssueBonus Equity Shares in the ratio of 1(One) equity shares of face value of Re.1/- (RupeeOne) each fully paid up for every 10 (Ten) equity share of face value of Re.1/- (RupeeOne) each held on a record date to be finalized at a later date by the Board of Directorsi.e.; in a ratio of 10:1 by capitalizing the free reserves and securities premiumaccount.

Remuneration Policy

The Company's Remuneration Policy for Directors Key Managerial Personnel and otheremployees is available on the website of the Company i.e. www.highgroundenterprise.com

Familiarization Programme

The Company has established a Familiarization Programme for Independent Directors.

As per Reg. 25(7) of SEBI (LODR) In which the Board briefed them about the followingpoints:

a) Nature of the industry in which the Company operates

b) Business model of the Company

c) Roles rights responsibilities of independent directors

d) Any other relevant information

RELATED PARTIES TRANSACTIONS

All the transactions with related parties are in the ordinary course of business and onarm's length basis. The details of the transactions entered into between the Company andthe related parties are given in AOC-2 as Annexure B to this report.

Your attention is drawn to the Related Party disclosures set out in Note no. 2.(13) ofthe Standalone Financial Statements.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

During the year under review the Company has not entered into any transactions undersection 186 of the Companies Act 2013. However previous year Un-Quoted Non – CurrentInvestment made by the Company is as follows:

Sr. No. Name of the Entity Particulars of Transaction Amount in Amount in
Rs. Lacs Rs. Lacs
(2016-17) (2015-16)
1. HGEL Integrated Private Ltd. Investment in Subsidiary Company 1.00 1.00
at cost
2. Color Bar Private Ltd. Investment in Subsidiary Company 1.00 1.00
at cost
3. Chitra Talent Management Investment in Associate Company 0.49 0.49
Pvt.ltd. at cost
4. HGEL International Pte ltd Investment in Wholly Owned 3.86 -
Subsidiary Company- at cost

MATERIAL EVENTS THAT HAVE OCCURRED AFTER THE BALANCE SHEET DATE

There had been no material events that have occurred after the balance sheet date.

SIGNFICANT / MATERIAL ORDERS PASSED IMPACTING ON GOING CONCERN STATUS AND COMPANY'SOPERATIONS

There had been no significant / material orders passed against the Company which shallimpact the going concern status.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 with respect tothe directors' responsibility statement it is hereby confirmed that:

(a) in the preparation of the annual accounts for the year ended March 31 2017 theapplicable Accounting standards had been followed along with proper explanation relatingto the material departures;

(b) the Directors of the Company had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2017 andprofit of the Company for the year ended March 31 2017.

(c) the Directors of the Company had taken proper and sufficient care for themaintenance of proper accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(d) the Directors of the Company had prepared the accounts of the Company for thefinancial year ended March 31 2017 on a going concern basis and;

(e) the Directors of the Company had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

STATUTORY AUDITORS AND THEIR REPORT

Pursuant to section 139 of the Act your Company has appointed M/s. Jain Chowdhary& Co. Chartered Accountants (FRN: 113267W) as Statutory Auditors of the Company tohold office from the conclusion of this Annual General Meeting until the conclusion of thenext annual general meeting (AGM) subject to ratification of re-appointment by themembers at every AGM.

You are requested to ratify the re-appointment of Auditors and to authorize the Boardto fix their remuneration. The auditors M/s. Jain Chowdhary & Co. CharteredAccountants are eligible for re-appointment. A certificate from the auditors has beenreceived to the effect that their re-appointment if made would be within the prescribedlimits. The Auditor's Report for the FY 16-17 does not contain any qualificationreservations adverse remark or disclaimer. Further the notes to accounts referred to inthe Auditor`s Report and CARO are self-explanatory.

SECRETARIAL AUDITORS AND THEIR REPORT

Mr. Amit R. Dadheech Company Secretaries was appointed as Secretarial Auditors of theCompany for the financial year 2016-17 Pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as`Annexure C` and forms part of this report. There are qualifications observationsand other remarks of the Secretarial Auditors in the Report issued by them for thefinancial year 2016-17 which are self explanatory in nature and does not call for anyexplanation from the Board of Directors.

NATURE OF BUSINESS

Presently the Company operates in two divisions namely:

Division 1: EPCM (Engineering Procurement and Construction Management)

a) Oil & Gas sector b) Infra & support services / Consulting

Division 2: Allied media services (M&A)

There has been no change in the nature of business of the Company carried out by theCompany during the year under review.

SUBSIDIARIES:

The Company has three subsidiaries the details of the same are set below:

Sr. No Name of the Subsidiary Date of incorporation Country Business
1. Colour Bar Private Limited March 12 2015 India Post Production
2. HGEL Integrated Pvt. Ltd January 19 2015 India infra –projects viz. mining &
exploration of natural resources
& Stone Mining
3. HGEL International Pte Ltd. January 232017 Singapore General Wholesale
trade(including general
Importers and Exporters)

The statement containing salient features of the financial statement of the abovesubsidiaries in Form AOC-1 is given in Annexure-D.

These documents shall also be available for inspection at the registered office of theCompany during business hours up to the date of the ensuing AGM.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

Pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 the details of Conservation of Energy TechnologyAbsorption are not applicable to the Company.

Details of Foreign Earning & Outflow are stated below: (Rs. In lakh)
Amount 2016-17 Amount 2015-16
Foreign Earning -15.18 44.15
Foreign Exchange Out-flow Nil Nil

CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

The Company's shares are listed on the Bombay Stock Exchange (BSE) Limited & TheNational Stock Exchange of India Limited(NSE). The details of the same are mentioned belowas on March 31 2017:

Name of the Stock Exchange Number of shares (Equity) listed on the stock exchange
Bombay Stock Exchange Limited (BSE) 115115949
National Stock Exchange of India Limited (NSE) 115115949

The Company has regularly paid all the listing fees to the stock exchange and custodialfees to the depositories.

EXTRACT OF THE ANNUAL RETURN

An extract of the Annual Return for the year ended March 31 2017 as provided undersub-section (3) of Section 92 and prescribed under Rule 12 of Companies (Management &Administration) Rules 2014 is attached as Annexure-E and forms part of thisreport.

CORPORATE GOVERNANCE

As required by the existing Regulation 34(3) of the Listing Regulation a detailedreport on Corporate Governance is included in the Annual Report. The certificate from apracticing company secretary have been obtained for compliance of the requirements ofCorporate Governance in terms of Regulation 34(3) of the Listing Regulation and the sameis annexed to the Report on Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Social Welfare Activities has been an integral part of the Company since inception. TheCompany is committed to fulfill its social responsibility as a good corporate citizen. TheCompany fulfills the criteria set out in the section 135 of the Companies Act 2013 andrelevant rules stating applicability of the section. However the Board of Directors ofthe Company has constituted a CSR Committee under review with 3 (three) of its Boardmembers. Contents of Corporate Social Responsibility Policy in the Board's report aregiven in the report on CSR activities in Annexure F.

MANAGERIAL REMUNERATION:

Disclosures of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is within the limits as prescribed under the Companies Act2013.The disclosure as required under section 134 of the Companies Act 2013 read withrelevant rules made therein under is attached as Annexure - A and form part ofthis report

BOARD COMMITTEES

The Company has the following Committees of the Board:

• Audit Committee

• Stakeholders Relationship Committee

• Nomination & Remuneration Committee

• CSR Committee

The composition of each of the above Committees their respective role andresponsibility is as detailed in the Report of Corporate Governance.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board of Directors of High Ground Enterprise Limited is committed to maintain thehighest standard of honesty openness and accountability and recognize that employees haveimportant role to play in achieving the goal. The Company's Vigil Mechanism Policyencourages Directors and employees to bring to the Company's attention instances ofunethical behavior and actual or suspected incidents of fraud or violation of the conductthat could adversely impact the Company's operations business performance and / orreputation. The Policy provides that the Company investigates such incidents whenreported in an impartial manner and takes appropriate action to ensure that the requisitestandards of professional and ethical conduct are always upheld. It is the Company'sPolicy to ensure that no employee is victimized or harassed for bringing such incidents tothe attention of the Company. The practice of the Vigil Mechanism Policy is overseen bythe Board of Directors and no employee has been denied access to the Committee.

INTERNAL FINANCIAL CONTROL

The Company believes that internal control is a necessary concomitant of the principleof prudent business governance that freedom of management should be exercised within aframework of appropriate checks and balances. The Company remains committed to ensuring aneffective internal control environment that inter alia provides assurance on orderly andefficient conduct of operations security of assets prevention and detection offrauds/errors accuracy and completeness of accounting records and the timely preparationof reliable financial information.

In compliance of the provision of the Act the Company has appointed M/s. Ambavat Jain& Associates LLP Chartered Accountants as its internal auditor of the Company forthe financial year 2016-17.

The Company's independent and Internal Audit processes both at the Business andCorporate levels provide assurance on the adequacy and effectiveness of internalcontrols compliance with operating systems internal policies and regulatoryrequirements.

The Financial Statements of the Company are prepared on the basis of the SignificantAccounting Policies that are carefully selected by management and approved by the Board.These in turn are supported by a set of divisional Delegation Manual & StandardOperating Procedures (SOPs) that have been established for individual units/ areas ofoperations.

The Company has in place adequate internal financial controls with reference to theFinancial Statements. Such controls have been tested during the year and no reportablematerial weakness in the design or operation was observed. Nonetheless the Companyrecognizes that any internal financial control framework no matter how well designed hasinherent limitations and accordingly regular audit and review processes ensure that suchsystems are reinforced on an ongoing basis.

RISK & MITIGATION

The Company has identified various risks faced by the Company from different areas. Asper the provision of the Companies Act 2013 and listing agreements the the Board hadadopted a risks management policy whereby a proper framework is set up. Appropriatestructures are present so that risks are inherently monitored and controlled. Acombination of policies and procedures attempts to counter risks as and when they evolve.

COST AUDITORS

As the Company is operating in the service industry cost audit is not applicable tothe Company and hence no reporting is required.

DISCLOSURE ON DEPOSIT UNDER CHAPTER V

The Company has neither accepted nor renewed any deposits during the Financial Year2016-17 in terms of Chapter V of the Companies Act 2013

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company is committed to provide a protective environment at workplace for all itswomen employees. To ensure that every woman employee is treated with dignity and respectand as mandated under The Sexual

Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013" the Company has in place a formal policy for prevention of sexual harassment ofits women employees.

The following is the summary of sexual harassment complaints received and disposed offduring the current financial year.

Number of Complaints received: NIL Number of Complaints disposed off: NIL

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY`S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by anyRegulatory Authority Court or Tribunal which shall impact the going concern status andCompany`s operations in future.

INDUSTRIAL RELATIONS:

The Company maintained healthy cordial and harmonious industrial relations at alllevels the enthusiasm and unstinting efforts of employees have enabled the company toremain at the leadership position in the industry it has taken various steps to improveproductivity across organization.

ACKNOWLEDGEMENTS:

Your Directors place on record their gratitude to the Central Government StateGovernments and Company's Bankers for the assistance co-operation and encouragement theyextended to the Company. Your Directors also wish to place on record their sincere thanksand appreciation for the continuing support and unstinting efforts of investors vendorsdealers business associates and employees in ensuring an excellent all around operationalperformance

Date: September 2 2017 By Order of the Board
Place: Mumbai For High Ground Enterprise Limited
Regd. Office: Sd/-
Office No. 2 Om Heera Panna Mall Sandeep R. Arora
2nd Floor Oshiwara Chairman & Managing Director
Andheri (West) Mumbai- 400053 (DIN: 02587811)