THE MEMBERS OF HIMACHAL FIBRES LTD.
Your Directors have pleasure in presenting the 34th Annual Report together with theAudited Statement of Accounts of Himachal Fibres Limited for the year ended 31st March2015.
1. FINANCIAL HIGHLIGHTS.
The summary of the financial performance of the Company for the financial year endedMarch 31 2015 compared to the previous year ended March 31 2014 is given below:
| || ||(in Lacs) |
|Particulars ||Year Ended March 312015 ||Year Ended March 312014 |
|Net Sales/Income ||8471.59 ||13071.53 |
|Gross profit before interest and depreciation ||671.52 ||699.33 |
|Finance cost ||458.94 ||433.52 |
|Profit before depreciation and amortisation- (Cash Profit) ||214.33 ||276.68 |
|Depreciation and Amortisation ||210.09 ||270.37 |
|PBT before exceptional items ||4.24 ||6.30 |
|Exceptional items ||0.00 ||0.00 |
|Profit before Tax (PBT) ||4.24 ||6.30 |
|Provision for T a x- Current ||0.81 ||1.21 |
|Provision for T a x- Deferred ||127.44 ||17.91 |
|Profit after Tax ||(124.01) ||(12.81) |
|Earning per Share (EPS) (in Rs) || || |
|(after exceptional item ) || || |
|In Lacs || || |
|- Basic ||(0.14) ||(0.15) |
|- Diluted ||(0.14) ||(0.15) |
2. OPERATIONAL REVIEW :
The net sale for the year is Rs.8471.59 as compared to Rs. 13071.53 lacs of previousyear. The Net Loss for the year ended 31.03.2015 is Rs. 124.01 Lacs as compare to Net Lossof Rs. 12.81 Lacs for the previous year.
3. MANAGEMENT DISCUSSION & ANALYSIS REPORT
3.1 Industry And Economic Scenario & Outlook
Indian economic growth in 2014 rose to 5.2% from 4.7% last year as a result of theimproving macro-economic situation. The wholesale and consumer price inflation has fallento 4.2% and 7.4% from last years 6.3% and 10.1% on the back of a strong base effect.However the slow pace of reforms lack of impetus for infrastructure projects highinterest rates and tightening of fiscal policies adversely impacted the capital goodssector. Industrial production / output was also sluggish. The low economic growth appearsto have bottomed out and a gradual increase in economic activity is expected in 2015. Withthe coming of new Govt. in the Centre it is expected that the economy should grow in thecoming years and the demand for and prices of textile products should improve which willenable the Company to regain steady or better performance.
3.2 Opportunities And Threats Opportunities:
a) Large potential Domestic and International Market
b) Product Development and Diversification to cater Global Needs
c) Greater Investment and FDI opportunities are available.
d) Industry has large and diversified segments that provide wide variety of products
a) Unfavourable Labour Laws
b) High Indirect Taxes Power and Intrest Rates
c) Unfavourable Government policies
d) Lower Productivity in various segments.
e) To balance between Demand and Supply
3.3 Risk And Concerns
Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Business Risk Management Committee. The details of Committee and its termsof reference are set out in the Corporate Governance Report forming part of theBoards Report. The Company has a robust Business Risk Management (BRM) framework toidentify evaluate business risks and opportunities. This framework seeks to createtransparency minimize adverse impact on the business objectives and enhance theCompanys competitive advantage. The business risk framework defines the riskmanagement approach across the enterprise at various levels including documentation andreporting.
The key business risks identified by the Company and its mitigation plans are as under.
a) Risk related to Personnel
Our business is increasingly dependent on the skills and competencies of our employeesand management team. The general war for talent in our growing economy has created asubstantial risk related to the retention of key personnel both in manufacturing andmanagerial levels. This risk is mitigated through effective HR policies relating torecruitment and retention and a proactive remuneration and rewards policy that isperiodically reviewed at the highest management level.
With excellent performance track as well as best HR practices we are able to attractand retain people for growth of our business.
b) Risk related to Safety
The company has taken adequate insurance covers to indemnify the risks associated withthe safety of personnel building stock and other infrastructure of the Company. Theseinclude:
1. Fire Insurance Policies.
2. Marine/ Transit Insurance Policies.
3. Theft Insurance Policies.
4. Other Miscellaneous Policies.
The company has also taken steps to strengthen IT security system as well as physicalsecurity system at all our locations
c) Compliance Related Risks
The Company is committed to being a responsible corporate citizen and respects the lawsand regulations of the country. All the compliances under various laws applicable to theCompany including under Companies Act 1956/2013 Factories Act Income Tax Act 1961 etc.are followed in Letter & Spirit.
3.4 Internal Control Systems And Their Adequacy
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee of the Board &to the Chairman and Managing Director. The Internal Audit Department monitors andevaluates the efficacy and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and recommendations along with corrective actions thereonare presented to the Audit Committee of the Board.
3.5 Human Resources/ Human Resource Management.
The Company recognizes people as its most valuable asset and it has built an opentransparent and meritocratic culture to nurture this asset. Talent Management is a keypeople planning tool that provides an integrated means of identifying selectingdeveloping and retaining top talent within our organization. Your Company has kept a sharpfocus on Employee Engagement.
4. TRANSFER TO RESERVE
Due to losses in the current year the company has not transferred any amount in anyreserve.
Due to losses in the current year the Board of Directors of your Company has notrecommended any dividend for the financial year 2014 - 2015.
6 . TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there was no unpaid/unclaimed Dividend declared and paid last year theprovisions of Section 125 of the Companies Act 2013 do not apply.
7 . SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2015 was Rs. 2212.50 Lacs. During theyear under review the company has not issued any shares or any convertible instruments.Face value of the Shares of the company was reduced by way of Sub-division of nominalvalue of each Equity Share of Rs. 10/- (Rupees Ten Only) each into 10 Equity Shares of Rs.1/-(Rupees One only) each.
7.1 BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
1.2 SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
1.3 BONUS SHARES
No Bonus Shares were issued during the year under review.
1.4 EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
8.1 CASH AND CASH EQUIVALENT
Cash and Cash equivalent as at 31st March 2015 is Rs. 56.14 lacs. TheCompany continues to focus on judicious management of working capital. Working Capitalparameters are kept under strict check through continuous monitoring.
8.2 DEPOSITS/FIXED DEPOSITS
During the year Company has not accepted deposit from the public falling within theambit of Section 73 of Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014. Further the Company has not repaid any deposit to public and there is nodeposits are pending as on 31stMarch 2015.
8.3 PARTICULARS OF LO A NS G U AR ANTEES OR INVESTMENTS
Detail of Loans Guarantees and Investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes of Financial Statements.
The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help us retain our competitive advantage.
9.1 No. Of Meetings Of The Board
During the year Eight (8) Board Meetings and Five (5) Audit Committee Meetings wereconvened and held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
9.2 Policy on Director's Appointment and Remuneration.
The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on March 31 2015 the Board consists of 6 members three of whom areexecutive or whole-time directors and three are independent directors. The Boardperiodically evaluates the need for change in its com position and size.
The Company has adopted Nomination and Remuneration policy for directors' appointmentand remuneration including criteria for determining qualifications positive attributesindependence of a director and other matters provided under the Companies Act 2013 andclause 49 of the Listing Agreement. We affirm that the remuneration paid to the directorsis as per the terms laid out in the nomination and remuneration policy of the Company. TheNomination and Remuneration policy is explained in Corporate Governance Report.
9.3 Declaration By Independent Directors
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement
9.4 Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsAudit Nomination & Remuneration. The manner in which the evaluation has been carriedout has been explained in the Corporate Governance Report.
9.5 Training of Independent Directors.
Every new independent director of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of our Companythe executive directors / senior managerial personnel make presentations to the inducteesabout the Company's strategy operations product markets organization structurefinance human resources technology quality facilities and risk management.
As required under clause 49 of the Listing Agreement the details ofDirectorappointed/reappointment are given in this annual Report and forms part of thisreport.
9.7 Retirements and Resignations
During the year under review Sh. D. S. Rana Sh. Pawan Nagpal and Sh. Raj Mittal haveresigned from the directorship of the company w.e.f. 14.02.201512.11.2014 and 21.04.2014respectively.
10. COMMITTEES OF THE BOARD
a) Audit Committee
The Audit Committee was reconstituted in accordance with the provisions of CompaniesAct 2013 and clause 49 of listing agreement on 28.05.2014. Audit Committee includes Mr.Sushil Singla (Chairman) Mr. Rajan Dhawan Mr. Akhil Malhotra. The term of reference andother details are given in Corporate Governance Report and forms part of this report.
b) Nomination and Remuneration Committee
The remuneration committee was renamed and reconstituted as Nomination and RemunerationCommittee at a board meeting held on 28.05.2014. The terms of reference of the committeeare disclosed in Corporate Governance Report and forms part of this report. Nomination& Remuneration Policy is annexed as Annexure - F to Board Report.
c) Corporate Social Responsibility Committee
The provisions of Companies Act 2013 regarding Corporate Social Responsibility are notattracted to the company So the Company has not contributed towards it as CorporateSocial Responsibility Committee is not applicable.
d) Stakeholder Remuneration Committee
The Stakeholders' Relationship Committee was constituted by the Board on 28 May 2014consequent to the dissolution of the Shareholders'/ Investors' Grievance Committee). ThisCommittee includes Mr. Sushil Singla (Chairman) Mr. Rajan Dhawan Mr. Akhil Malhotra.Term of reference and other details are given in Corporate Governance Report and formspart of this report.
e) Risk Management Committee
The Company has formed the Risk Management Committee with its members as Mr. AkhilMalhotra (Chairman) Mr. Mayank Malhotra Mr. Sushil Kumar Singla and Mr. Rajan Dhawanand the committee will perform its activities according to the Risk Policy finalized bythe Board indicating the development and implementation of Risk Management.
f) Securities Transfer Committee
The Securities Transfer Committee was constituted at a board meeting held on28.05.2014. The committee detail is disclosed in Corporate Governance Report and formspart of this report.
g) Banking And Finance Committee
The Banking and Finance Committee was constituted at a board meeting held on28.05.2014. The committee detail is disclosed in Corporate Governance Report and formspart of this report.
11. DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:
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; and
e) the directors in the case of a listed company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively.- Not applicable to Private Limited Company.
12. AUDITO RS
12.1 Statutory Auditors
M/s Sumat Gupta & Co. ( FRN : 010288N) Chartered Accountants were appointed asStatutory Auditors for a period of three years in the Annual General Meeting held on30.09.2014. Their continuance of appointment and payment of remuneration are to beconfirmed and approved in the ensuing Annual General Meeting. The Company has received acertificate from the above Auditors to the effect that if they are reappointed it wouldbe in accordance with the provisions of Section 141 of the Companies Act 2013.
12.2 Secretarial Auditors
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 Rajeev Bhambri & Associates (CP No.: 9491 FCS: 4327)Company Secretaries toundertake the secretarial audit of the company. The Secretarial Audit Report is annexedherewith as Annexure - A.
12.3 Internal Auditors
Mr. Shekhar Bansal performs the duties of internal auditors of the company and theirreport is reviewed by the audit committee from time to time.
12.4 Cost Auditor
The Cost Audit was not applicable on the Company during the Financial year 2014-15 asper Companies (Cost record & audit) Rules 2014 dated 30.06.2014. Further as peramendment in the above said rules vide notification dated 31.12.2014 M/s J. Verma &Associates cost Accountants Jalandhar was appointed to conduct the Cost Audit of theCompany for the Financial Year 2015-16.
13. LISTING OF SECURITIES
The Securities of the Company are listed on Bombay Stock Exchange Limited. The Companyhas paid annual listing fee to exchanges for the year 2015-16.
14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
15. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure- B
16. VIGIL MECHANISM / WHISTLE BLOWER POLICY.
The Company has a vigil mechanism named Fraud Risk Management Policy (FRM) to deal withinstance of fraud and mismanagement if any. The details of the Whistle Blower Policy isexplained in the Corporate Governance Report and also posted on the website of theCompany.
17. SUBSIDIARIESJOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
18. RELATED PARTY TRANSACTIO NS/ PARTICULARS O F CONTRACTS OR ARRANGEMENTS W ITHRELATED PARTIES.
All transactions entered into with Related Parties as defined under Clause 49 of theListing Agreement during the financial year were in the ordinary course of business and onan arms length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013. There were no materially significant transactions with relatedparties during the financial year which were in conflict with the interest of the Company.Suitable disclosure as required by the Accounting Standards (AS18) has been made in thenotes to the Financial Statements. The report of the Board in respect of the particular ofcontracts or arrangements with related parties referred to sub section (1) of Section 188in form AOC-2 is annexed to this report in annexure- C
19. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges a separate sectionon corporate governance practices followed by the Company together with a certificatefrom Practicing Company Secretary confirming compliance forms an integral part of thisReport.
20. DISCLOSURE UNDER SEXUAL HARASSMENT OF W OMEN AT WORKPLACE (PREVENTIO N PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a prevention of sexual Harassment policy in line with therequirements of the sexual Harassment of Women at the Workplace (prevention prohibitionand Redressal) Act 2013. During the year 2014-15 no complaint were received by theCompany related to sexual Harassment.
21. The information on conservation of energy technology absorption and foreignexchange earnings and outgo stipulated under section 134 (3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as"Annexure- D"
22. PARTICULARS OF EMPLOYEES
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedto the Board's report as per Annexure- E
Since there is no employee receiving remuneration of Rs. 60 lakh or more or employedfor part of the year and in receipt of Rs. 5 lakh or more a month there is no informationrequires to be given under Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
23. APPRECIATION AND ACKNOWLEDGEMENTS
The company has been very well supported from all quarters and therefore your directorswish to place on record their sincere appreciation for the support and co-operationreceived from Employees Dealers Suppliers Central and State Governments Bankers andothers associated with the Company. Your Directors wish to thank the banks financialinstitutions shareholders and business associates for their continued support andcooperation. We look forward to receiving the continued patronage from all quarters tobecome a better and stronger company.
24. CAUTIONARY STATEMENT
The statements contained in the Boards Report and Management Discussion andAnalysis contain certain statements relating to the future and therefore are forwardlooking within the meaning of applicable securities laws and regulations.
Various factors such as economic conditions changes in government regulations taxregime other statues market forces and other associated and incidental factors mayhowever lead to variation in actual results.