Hilton Metal Forging Limited
We are please to present Eleventh Annual Report of the company and the AuditedStatement of account for the year ended 31st March 2016. Summary of financialresults is given below.
1. FINANCIAL HIGHLIGHTS AND REVIEW OF OPERATIONS
| || ||(Rs. in Lakhs) |
|Particulars ||Year Ended March 2016 ||Year Ended March 2015 |
|Total Income ||6718.08 ||9226.78 |
|Total Expenditure ||6854.67 ||9066.73 |
|Profit before Tax ||(136.59) ||160.05 |
|Less: Current Tax /Deferred Tax ||21.81 ||67.49 |
|Profit after Tax ||(158.40) ||92.56 |
|Balance Brought forward ||982.71 ||962.63 |
|Balance Available for Appropriation ||824.31 ||1055.19 |
|Appropriation : || || |
|Proposed Dividend for the Financial year ||- ||31.11 |
|Corporate Dividend Tax ||- ||6.37 |
|Transferred to General Reserves ||- ||35.00 |
|Surplus retained in Profit & Loss account ||824.31 ||982.71 |
The performance of the company during the year has been adversely affected due topressure on margin caused by higher input cost and un-remunerative selling price andslackness in demand.
In view of the losses the Board does not propose any dividend for the year ended 31stMarch 2016. The Board does not propose to transfer any amount to the General Reserves forthe aforesaid financial year.
3. PUBLIC DEPOSITS
During the year the Company has not accepted any deposits from the public and as suchthere are no outstanding deposits in terms of the Companies (Acceptance of Deposits)Rules 2014.
4. INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY
Company does not have any Subsidiary Joint venture or Associate Company.
5. MATERIAL CHANGES AND COMMITMENTS
There are no adverse material changes or commitments occurred after March 31 2016which may affect the financial position of the Company or may require disclosure.
6. COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARKOR DISCLAIMER MADE BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT
As per the observation of Secretarial auditor the vacancy caused by the resignation ofan Independent Director was to be filled in by the Company within 3 months from the dateof the resignation i.e. 28th July 2015 however the same was filled by 7th April 2016.The Company was trying to identify and appoint a suitable candidate on its Board whosepresence can benefit the Company in particular and the shareholders at large. Since itwas difficult to identify the right person on the Board on the Company and hence there wasdelay in appointment of Independent Director.
In addition to above the Secretarial Auditor observed non-disclosure of all suchevents or information on the Companys website as required pursuant to the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations2015.
However in response to the observation of the Secretarial Auditor the Company is inprocess of updating its website by disclosing details of all such events and informationas required pursuant to the said regulations at earliest.
7. EXTRACT OF ANNUAL RETURN
As per provision of Section 134 of the Companies Act 2013 the details forming part ofthe extract of the Annual Return is attached to this Report as "Annexure I"in Form MGT-9
8. DIRECTORS AND KMP
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 Mrs. Diksha Malhotra ExecutiveDirector of the Company retires by rotation at the ensuing Annual General Meeting of theCompany and offers herself for re-appointment. The Board recommends her re-appointment.
The Board of Directors pursuant to the provisions of Section 161 of the Companies Act2013 has appointed Mr. Rajiv Sushil Verma as an Additional (Independent) Director of theCompany with effect from 7th April 2016 subject to the approval of shareholders at theforthcoming Annual General Meeting. A notice under Section 160(1) of the Act has beenreceived along-with the deposit of requisite amount signifying its intention to proposeMr. Verma as a Director.
Mr. Verma is not disqualified from being appointed as a Director in terms of Section164 of the Act and has given his consent to act as a Director. Also Sec 149 of the Actinter alia stipulates the criteria of independence that a company should propose toappoint an independent director on its Board. As per the said Section 149 an independentdirector can hold office for a term up to 5 (five) consecutive years on the Board of acompany and he shall not be included in the total number of directors for retirement byrotation. In the opinion of the Board his appointment is appropriate and in the bestinterest of the Company.
As stipulated under the Regulation 36(3) of the SEBI(Listing Obligations and DisclosureRequirements) Regulations 2015 brief resume of the Directors proposed to beappointed/re-appointed are given in the Notice convening 11th Annual General Meeting.
The above named Directors have furnished their respective declarations in Form DIR-8pursuant to the provisions of Section 164(2) of the Companies Act 2013 read with Rule 14(1) of the Companies (Appointment and Qualifications of Directors) Rules 2014.
Further all Independent Directors have given their respective declarations that theymeet the criteria of independence as laid down under section 149(6) of the Companies Act2013.
Ms. Surabhi Powar has tendered her resignation from the post of Company Secretary andCompliance Officer w.e.f 1st May 2016. The vacancy caused by her resignation was filledby the appointment of Ms. Divya Mer w.e.f 1st June 2016.
Number of Meetings of the Board
During the year four Board Meetings and one meeting of Independent Directors wereconvened and held. The intervening gap between the meetings was within the periodprescribed under the Companies Act 2013. The details thereof are given in the Report onCorporate Governance.
Committees of the Board
During the year your directors have constituted and renamed wherever required thefollowing committees of the Board in accordance with the requirements of the CompaniesAct 2013 and the Listing Agreement. The composition terms of reference and other detailsof all Board level committees have been elaborated in the Corporate Governance Reportannexed to this report.
1. Audit Committee
The Committee comprises of three non-executive Independent Directors as its members.The Chairman of the Committee is an Independent Director. The audit committee assist theBoard in the dissemination of the financial information and in overseeing the financialand accounting processes in the Company. During the year there were no instances whereBoard had not accepted the recommendation of the Audit committee.
2. Nomination and Remuneration Committee
The Committee comprises of three non-executive Independent Directors as its members.The Chairman of the Committee is an Independent Director.
The Board had on the recommendation of the Nomination and Remuneration Committee framedthe Nomination and Remuneration Policy to comply with the provisions of Section 178 of theCompanies Act 2013 and amended Clause 49 of the Listing Agreement. The CompanysNomination and Remuneration Policy has been is also available on Companyswebsite.
3. Stakeholders Relationship Committee
The Committee comprises of two non-executive Independent Directors and one executiveDirector as its members. The Chairman of the Committee is a Non executive IndependentDirector.
The Stakeholders Relationship Committee considers and resolves the grievances ofthe security holders of the Company.
Whistle Blower Policy and Vigil Mechanism
The Company has adopted a Whistle Blower Policy and the Vigil Mechanism with a view toprovide for adequate safeguards against victimization of the stakeholders who us suchmechanism and provide for direct access to the Management. The policy can be accessed onthe Companys website www.hiltonmetal.com
Performance Evaluation of the Board
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 the Board hascarried out an annual evaluation of its own performance the directors individually aswell as the evaluation of the working of its Committees.
At the meeting of the Board all the relevant factors that are material for evaluatingthe performance of individual Directors the Board and its various committees werediscussed in detail. Various aspects of the Boards functioning such as adequacy ofthe composition of the Board and its Committees execution and performance of specificduties obligations and governance etc. were taken into consideration.
A separate exercise was carried out to evaluate the performance of individualDirectors who were evaluated on parameters such as level of engagement and contributionindependence of judgment safeguarding the interest of the Company and its minorityshareholders etc. The performance evaluation of the independent Directors was carried outby the entire Board.
The performance evaluation of the Chairman and non-independent Directors was alsocarried out by the Independent Directors at their separate meeting. The Directorsexpressed their satisfaction with the evaluation process.
9. DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of annual accounts for the year ended on 31st March 2016 and confirm 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 this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
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.
10. RISK MANAGEMENT
The Audit Committee has also been delegated the responsibility for monitoring andreviewing risk management assessment and minimization procedures developingimplementing and monitoring the risk management plan and identifying reviewing andmitigating all elements of risks which the Company may be exposed to. The Board alsoreviews the risk management assessment and minimization procedures
11. DETAILS ABOUT CSR COMMITTEE POLICIES IMPLEMENTATION AND INITIATIVES
The Company does not fall under the provisions of Section 135 of Companies Act 2013.Hence it does not have to comply with the CSR Rules.
12. REPORT ON CORPORATE GOVERNANCE
Pursuant to Regulation 34 & 53 read with Schedule V of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the following have been made part of theAnnual Report and are enclosed/annexed to this report:
Management Discussion and Analysis
Report on Corporate Governance
Auditors Certificate regarding compliance of conditions of CorporateGovernance
MD/CEO/CFO Annual certification of financial reporting and Internal Controls
Declaration on compliance with code of conduct.
13. STATUTORY AUDITORS AND THEIR REPORT:
The Shareholders of the Company in their Ninth Annual General Meeting held on 27thSeptember 2014 had accorded their approval pursuant to the provisions of Sections 139141 and other applicable provisions of Companies Act 2013 and Rules made there under toappoint M/s. R K Chaudhary & Associates Chartered Accountants Mumbai (Membership No35487)as the Statutory Auditor of the Company for the tenure of three years commencingfrom then (subject to ratification by the Members at every AGM). Accordingly aresolution seeking ratification of appointment is included in notice conveying the Annualgeneral Meeting.
The Auditors Report to the Shareholders for the year under review does notcontain any reservation qualification or adverse remark.
14. COST AUDITORS AND COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of various activities are required to be audited and the remuneration payableto the cost auditor is required to be placed before the members in a general meeting fortheir ratification.
Your Directors had on the recommendation of the Audit Committee appointed Ms. NikitaTalati of M/s NNT & Co. Cost Accountants to audit the cost accounts of steelproducts of the Company on a remuneration of Rs. 55000/- (Rupees Fifty Five Thousandonly) for the year 2016-17 subject to the approval of the shareholders at the ensuingAnnual General Meeting.
The cost audit report for the financial year 31st March 2016does not contain anyreservation qualification or adverse remark.
15. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. H P Sanghvi a firm of Company Secretaries in practice (C.P. No. 3675) toundertake the Secretarial Audit of the Company.
The Secretarial Audit Report for the financial Annexure II yearended 31st March 2016 to this Report.
As per the observation of Secretarial auditor the vacancy caused by the resignation ofan Independent Director was to be filled in by the Company within 3 months from the dateof the resignation i.e. 28th July 2015 however the same was filled by 7th April 2016.In addition to above the Company has not disclosed the details of all such events andinformation on its website as required pursuant to the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirement) Regulations 2015 during the periodunder review.
16. INTERNAL AUDIT
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 on the recommendation of the Audit Committee reappointedM/s Vikas Jindal & Associates as an Internal auditor of the Company. the InternalAuditor submits his reports on quarterly basis to the Audit Committee.
Based on the report of Internal audit management undertakes corrective action in theirrespective areas and thereby strengthens the controls.
17. INTERNAL FINANCIAL CONTROL
The Company has in place adequate internal financial controls with reference to thefinancial statements. The Audit Committee evaluates the efficiency and adequacy of thefinancial control system in the company and strives to maintain the standards in theInternal Financial Control.
PARTICULARS OF LOANS GUARANTEE AND INVESTMENTS:
The Company has not given any guarantee or advanced any loans pursuant to theprovisions of Section 186 of Companies Act 2013. Details of investments made by theCompany have been given in the Financial Statements.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All transactions entered into with related parties as defined under the Companies Act2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinarycourse of business and on an arms length pricing basis and do not attract theprovisions of Section 188 of the Companies Act 2013. There were no materially significantrelated parties during the financial year which were in conflict with the interest of theCompany and hence enclosing of Form AOC-2 is not required. Suitable disclosure asrequired by the Accounting Standard (AS 18) has been made in the notes to the FinancialStatements.
The Company has neither issued any Sweat Equity Shares or Bonus shares nor have boughtback any of its securities nor have provided any stock option scheme to the employeesduring the year under review.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated. Under section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure-A.
ENVIRONMENT AND POLLUTION CONTROL:
Top priority continues to be given to preservation of the environment by the company.To combat pollution and strengthen the area ecology considerable emphasis is placed onplantation of fragrant and shady trees. We are cautious of preserving water throughrecycling and rainwater harvesting to the extent possible. The company posses the requiredenvironmental clearance from the respective pollution control boards and do comply withthe relevant Legislation
The Company is well aware of its responsibility towards a better and clean environment.Our efforts in environment management go well beyond mere compliance with statutoryrequirements. The Company has always maintained harmony with nature by adoptingeco-friendly technologies and upgrading the same from time to time incidental to itsgrowth programs.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
Disclosures pertaining to remuneration and other details are required under Section197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is forming part of the DirectorsReport for the year ended 31st March 2016 and is attached to this Report and marked as "AnnexureIII"
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Management Personnel) Rules 204 thereare no employees drawing remuneration in excess of the limits set out in the said rules.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN
Company has Sexual Harassment Policy in place and available on Companys intranetportal. During the year under review there were no complaints filed or received from anyof the employee.
19. STATUTORY COMPLIANCE
The Company has complied with all the statutory requirements. A declaration regardingcompliance of the provisions of the various statutes is also made by the Managing Directorat each Board Meeting. The Company ensures compliance of the ROC SEBI Regulations andprovisions of the Listing Agreement.
20. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS
There were no significant and material orders passed by the regulators or courts orTribunals impacting the going concern status and companys operation in future.
Your Directors would like express their sincere appreciation of the positiveCo-operation received from the Governments and bankers. The Directors also wish to placeon record their deep sense of appreciation for the commitment displayed by all executivesofficers workers and staff of the company resulting in the successful performance duringthe year.
The Board also takes this opportunity to express its deep gratitude for the continuedco operation and support received from its valued shareholders. The Directors expresstheir special thanks to Mr. Yuvraj Malhotra Chairman and Managing Director for hisuntiring efforts for the progress of the Company.
| ||For and on behalf of the Board of Directors |
| ||Yuvraj Malhotra |
|Place: Mumbai ||Chairman & Managing Director |
|Dated: 05/08/2016 ||DIN:00225156 |
Prescribed particulars of Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo
A. CONSERVATION OF ENERGY
(i) Steps taken by the company on conservation of energy
Energy conservation is priority area for the Company Energy conservation measurestaken during the year included:
1. Systematic maintenance of furnaces to ensure optimum performance.
2. Overall Equipment Effectiveness improvement.
3. Load Management to achieve unity power factor.
4. Installed translucent sheets for natural lights.
5. Energy saving by optimum utilization of furnaces
6. Cycle time reduction of forging units.
7. Use energy efficient motors in various equipments.
8. Awareness and training programs for employees
(ii) Steps taken by the company for utilizing alternate sources of energy includingwaste generated
With proper planning and awareness consumption of electricity and diesel was reducedcompared to previous year. Proposed work area includes furnaces water cooling plantsservo control voltage stabilizers for lighting compressed air systems and selection ofenergy efficient plant and machinery.
(iii) Capital investment on energy conservation equipment
The Company has invested around Rs. 3.05 Lakhs during the FY 2015-16 to conserve theenergy.
B. TECHNOLOGY ABSORPTION ADAPTION AND INNOVATION:
(i) Efforts made towards technology absorption adaption and innovation:
Sustained efforts are made to reduce the consumption of raw material by using versatiledesigning and multiple lay-out of dies.
(ii) Benefits derived as a result of the above:
Reduction in consumption of raw material.
(iii) No technology was imported in the last three years
(iv) Expenditure incurred on Research and Development:
The Company has incurred around Rs. 33 Lakhs during the FY 2015-16 on Research andDevelopment during the FY 2015- 16.
C. FOREIGN EXCHANGE EARNING AND OUTGO:
Our Foreign Exchange Earnings through exports was to the tune of Rs. 4612.58 Lakhs.
The Companys outgo of foreign exchange activities amounted to Rs. 27.58 Lakhs.
Particulars of Foreign Exchange earnings and the utilization during the period appearsin Schedule XVI to the accounts.
| ||For and on behalf of the Board of Directors |
| ||Yuvraj Malhotra |
|Place: Mumbai ||Chairman & Managing Director |
|Dated:05/08/2016 ||DIN:00225156 |