THE MEMBERS OF
HIMACHAL FIBRES LIMITED.
Your Directors have pleasure in presenting the 36th Annual Report together with theAudited Statement of Accounts of Himachal Fibres Limited (HFL) for the year ended 31stMarch 2017.
1. FINANCIAL HIGHLIGHTS.
The summary of the financial performance of the Company for the financial year endedMarch 31 2017 compared to the previous year ended March 31 2016 is given below:
| || ||(In Lacs) |
| ||Year Ended March 312017 ||Year Ended March 312016 |
|Revenue from Operations and Other Income (Total Revenues) ||5597.02 ||4764.60 |
|Gross profit before interest and depreciation ||383.49 ||542.45 |
|Finance cost ||314.61 ||301.36 |
|Profit before depreciation and amortization (Cash Profit) ||68.89 ||241.09 |
|Depreciation and Amortisation ||222.13 ||220.21 |
|PBT before exceptional items ||-153.25 ||20.87 |
|Exceptional items ||0.00 ||0.00 |
|Profit before Tax (PBT) ||-153.25 ||20.87 |
|Tax- Current ||0.00 ||3.30 |
|Tax- Deferred ||-50.16 ||0.61 |
|Profit after Tax ||-103.09 ||16.96 |
|Earning per Share (EPS) (in Rs) (after exceptional item) || || |
|- Basic ||-0.12 ||0.02 |
|- Diluted ||-0.12 ||0.02 |
2. STATE OF COMPANY'S AFFAIRS :
Total Revenue from operation for the year is Rs. 5586.27 Lakhs as compared to Rs.4754.73 Lakhs of previous year. The Net Loss for the year ended 31.03.2017 is Rs. (103.09)Lakhs as compare to Net Profit of Rs. 16.96 Lakhs for the previous year.
In order to accumulate funds for future projects your directors do not recommend anydividend for the year under review.
4. TRANSFER TO RESERVE
The company has not transferred any amount to any reserve during the year under review.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there were no unpaid/unclaimed Dividend and other amounts as prescribed underSection 205A & 205C of Companies Act 1956 lying with the company therefore theprovisions of above mentioned sections do not apply to the company.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TOWHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.
No Material changes and commitments affecting the financial position of the companyhave occurred between the end of the financial year and the date on which this report hasbeen signed.
7. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the company during the year underreview.
8. SHARE CAPITAL
During the year under review the there was no change in the paid-up share capital ofthe company.
8.1 Buy Back Of Securities
The Company has not bought back any of its securities during the year under review.
8.2 Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
8.3 Bonus Shares
No Bonus Shares were issued during the year under review.
8.4 Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees.
9.1 Cash And Cash Equivalent
Cash and Cash equivalent as at 31st March 2017 is Rs. 95.28 lakhs. The Companycontinues to focus on judicious management of working capital. Working Capital parametersare kept under strict check through continuous monitoring.
9.2 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 deposits to the public during theyear and no deposits are remained unpaid / unclaimed as on 31st March 2017.
9.3 Particulars Of Loans Guarantees 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.
10. HUMAN RESOURCES
HFL is committed to hiring developing and retaining the best minds in the industry.The Company has key internal processes and initiatives that support this vision. TheCompany has developed a strong employee value proposition that focuses on key pillars ofchallenging work that matters hiring and retaining the right people sustained focus ontalent and leadership development differentiated rewards to drive exceptional performanceand community engagement.
Talent management is a shared responsibility between business leaders and the HumanResources function at HFL enabling a strong focus on succession planning for key rolesand actively promoting internal move to drive career growth. Talent management issupported by a strong learning architecture that enables leadership and functionaldevelopment. This is supported by a Positive Employee Relations (PER) strategy that aimsto build an engaged and motivated workforce.
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.There has been no change in the board of directors as on 31/03/2017. Mr. Manoj Kumarretires by rotation at his AGM and being eligible offer himself for reappointment.
12. BOARD MEETINGS
Six meetings of the Board of Directors were held during the year. Details about themeetings are available in the Report on Corporate Governance which forms a part of thisReport.
13. COMMITTEES OF BOARD
The details regarding Committees of the Board of Directors of the Company are given inthe Report on Corporate Governance which forms a part of this Report.
14. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in and Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015
15. REMUNERATION POLICY AND BOARD EVALUATION
Company has Nomination and Remuneration policy in place pursuant to Companies Act 2013and SEBI (LODR) Regulation 2015.
Independent directors in their meeting held on 30/03/2017 evaluated the performance ofthe non independent director of the board including Managing Director. The minutes of themeeting were placed before the board and board affirmed the same. The Board has carriedout an annual evaluation of its own performance performance of its Committees as well asthe directors individually.
The details regarding process and criteria for evaluation are given in the Report onCorporate Governance which forms a part of this Report.
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 and SEBI(LODR) Regulation 2015 isenclosed herewith as 'Annexure - 6'.
16. CODE OF CONDUCT COMPLIANCE:
The declaration signed by the Managing Director affirming compliance with the Code ofConduct by Directors and Senior Management for the financial year ended March 31 2017 isgiven in Report on Corporate Governance which forms a part of this Report.
17. CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
18. 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.
19. 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 if any;
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 had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
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.
20.1 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 term of three years is ending on completion of 36th AGM to be held on28th September 2017 and they will not be eligible for re-appointment due to the conditionsmentioned u/s 139(2) of the companies act 2013. So your board of directors recommendsappointment of M/s Manjul Mittal & Associates (FRN : 028039N) Chartered Accountants inplace of retiring auditors. The Company has received a certificate from M/s Manjul Mittal& Associates to the effect that if they are reappointed it would be in accordancewith the provisions of Section 141 of the Companies Act 2013.
20.2 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 - 1'.
20.3 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.
20.4 Explanation on qualification/ reservation/ adverse remarks in the Auditors' Report
Members attention is invited to the observations/Qualifications made by the statutoryauditors under point No. 7(a) and 8 appearing in independent auditors report and bySecreterial Auditors in their report. The observation/ Qualifications made by the auditorsin their reports along with the management replies on them as follows:
(a) Regarding auditors remarks in their report in point 7(a) it is informed that thecompany accords top priorties in depositing the statutory dues. How ever the liquiditycrunch being faced by it due to various reasons has led to some delay in the deposit ofstatutory dues.
(b) Regarding auditors remark in their report in point no. 8 & secreterial auditorsremark in their report the delay in services the bank dues was mainly because ofliquidity crunch created by demonetiztion. How ever the same was paid on 29th April 2017to the bank.
The cost auditors report for the period under reveiw is self-explanatory and requiresno comment.
21. INTERNAL FINANCIAL CONTROLS
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
22. 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 2017-18.
23. 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.
24. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as 'Annexure- 2'
25. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and directors to report genuine concerns unethical behavior and irregularitiesif any in the company noticed by them which could adversely affect company's operations.The same is reviewed by the Audit Committee from time to time. No concerns orirregularities have been reported till date. The details of the Whistle Blower Policy isexplained in the Corporate Governance Report and also posted on the website of theCompany.
26. RISK MANAGEMENT POLICY
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organisational structures processes and behaviors together form the RiskManagement Policy that governs how the company conducts its business and managesassociated risks.
27. SUBSIDIARIESJOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company. Therewere no companies which have become or ceased to be its subsidiaries joint ventures orassociate companies during the year under review.
28. RELATED PARTY TRANSACTIONS/ PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATEDPARTIES.
All transactions entered into with Related Parties as defined under the Companies Act2013 and Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 during the financial year were in the ordinary course ofbusiness and were on arm's length pricing basis and do not attract the provisions ofSection 188 of the Companies Act 2013. There were few materially significant transactionswith related parties during the financial year for which shareholders approval was soughtduring the year by way of Resolution passed in Extra Ordinary General Meeting held on28/06/2016 (Results declared on 20/06/2016). Suitable disclosure as required by theAccounting Standards (AS18) has been made in the notes to the Financial Statements. Thereport of the Board in respect of the particular of contracts or arrangements with relatedparties referred to sub section (1) of Section 188 in form AOC-2 is annexed to this reportin 'Annexure- 3'.
29. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT
The Management Discussion and Analysis Report and Corporate Governance Report pursuantto SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are annexedherewith and form part of the Directors Report.
30. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION 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 2016-17 no complaint were received by theCompany related to sexual Harassment.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION 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 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-4"
32. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to the Board's report as per 'Annexure- 5'.
33. 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.
34. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe 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.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||-sd- |
| ||(SUSHIL KUMAR SINGLA) |
|Place: Ludhiana ||CHAIRMAN |
|Dated: 31st August 2017 ||DIN: 00126157 |