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Hindustan Composites Ltd.

BSE: 509635 Sector: Auto
NSE: HINDCOMPOS ISIN Code: INE310C01029
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VOLUME 1645
52-Week high 802.66
52-Week low 455.00
P/E 32.75
Mkt Cap.(Rs cr) 689
Buy Price 0.00
Buy Qty 0.00
Sell Price 466.65
Sell Qty 9.00
OPEN 470.15
CLOSE 469.45
VOLUME 1645
52-Week high 802.66
52-Week low 455.00
P/E 32.75
Mkt Cap.(Rs cr) 689
Buy Price 0.00
Buy Qty 0.00
Sell Price 466.65
Sell Qty 9.00

Hindustan Composites Ltd. (HINDCOMPOS) - Director Report

Company director report

To the Members

Hindustan Composites Limited

Your Directors are pleased to present the Fifty Third Annual Report together with theStandalone and Consolidated Audited Financial Statements for the year ended 31 March2017. st

1. FINANCIAL RESULTS

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

(Rs. in Crores)

Standalone Consolidated
2016-17 2015-16 2016-17 2015-16
Revenue from Operations 181.62 168.20 181.62 168.20
Other Income 1.11 0.49 1.11 0.49
Profit before Interest Depreciation and Taxes 39.91 30.69 38.24 28.64
Interest 0.20 0.22 0.20 0.22
Depreciation (Net) 7.71 6.53 7.71 6.53
Profit Before Tax 32.00 23.94 30.33 21.89
Provision for Tax 7.11 3.22 7.11 3.22
Profit After Tax 24.89 20.72 23.22 18.67
Other Comprehensive Income / Loss (Net of Tax) 33.96 10.73 33.96 10.73
Total Comprehensive Income 58.85 31.45 57.18 29.40

2. ADOPTION OF IND AS

The Company has adopted the Indian Accounting Standard ("Ind AS") w.e.f.1April 2016 with a transition date of 1 April st st 2015. The above Financial Statementshave been prepared in accordance with the recognition and measurement principles statedtherein and as prescribed under Section 133 of the Companies Act 2013 read with therelevant rules issued thereunder and the other accounting principles generally accepted inIndia.

3. SHARE CAPITAL OF THE COMPANY

As at 31 March 2017 the paid up equity share capital of st your Company stood Rs.49230000 (Rupees Four Crore Ninety Two Lakhs Thirty Thousand only) divided into4923000 Equity shares of the face value of Rs. 10 (Rupee Ten) each.

The Company has obtained its shareholders' approval for the following matters throughpostal ballot process the results of which were declared on the 13 May 2017: th

1) Sub-division of existing 1 equity share having face value of Rs. 10 each fullypaid-up into 2 equity shares having face value of Rs. 5 each;

2) Increase in Authorized Share Capital of the Company from Rs. 6 crore to Rs. 8 croredivided into 1.6 crore equity shares of Rs. 5 each and subsequent alteration of CapitalClause of Memorandum of Association to give effect to the sub-division of shares andincrease in the authorized share capital;

3) Issue of 4923000 bonus equity shares in proportion of 1:2 (i.e. 1 new bonus equityshare of Rs. 5 each for every 2 equity shares of Rs. 5 each held) (Post split face valueper equity share);

After giving effect to the above the issued subscribed and paid up share capital ofthe company would be at Rs. 73845000 divide into 14769000 equity share of Rs. 5each.

4. DIVIDEND

Your Directors have recommended a dividend of Rs. 0.50 per share being 10% on theCompany's enhanced equity share capital after considering bonus issue i.e. on 14769000Equity Shares of Rs. 5 each fully paid up of the Company for the year ended 31 March2017. The st Corporate Dividend Tax of Rs. 0.15 crore will be payable on the totaldividend amount of Rs. 0.74 crore. The Dividend if approved will be paid to thosemembers whose names appear on the Register of Members / List of Beneficiaries as on 12September 2017. th

5. RESERVES

During the year under review Rs. 15 Crores were transferred to the General Reserve.

6. OVERVIEW OF ECONOMY AND PERFORMANCE OPERATIONS

The Company reported total revenue of Rs. 181.62 Crores representing a growth of 8%over the previous year. The manufacturing turnover increased by 11% from Rs. 124.81 Croresto Rs. 139.38 Crores. This was achieved despite challenging market conditions both in thedomestic and export segments.

Investment Income during the year was marginally lower at Rs. 41.19 Crores as againstRs. 42.23 Crores in the previous year. This was mainly due to lower dividend income duringthe year.

The gross profit of the Company was substantially higher at Rs. 39.91 Crores from Rs.30.69 Crores. After considering interest of Rs. 0.20 Crores and depreciation of Rs. 7.71Crores Profit Before Tax was Rs. 32 Crores and net profit after provision for tax of Rs.7.11 Crores was Rs. 24.89 Crores.

Other Comprehensive Income (OCI) (net of Tax) was Rs. 33.96 Crores as against Rs.10.73 Crores in the previous year. The total Comprehensive Income after tax during theyear was Rs. 58.85 Crores as against Rs. 31.45 Crores in the previous year.

The Indian economy performed well during 2016-17 with a GDP growth of about 6.8%despite a temporary slow-down due to the demonetisation of high value currency notes bythe Indian Government in November 2016.

The Indian Automobile Industry produced a total of 25316044 vehicles includingpassenger vehicles commercial vehicles three wheelers two wheelers and quadricycle inFY 2016-17 as against 24016599 in the previous year registering a growth of 5.41% overthe last year. The sale of Passenger vehicles grew by 9.23% while the growth ofCommercial vehicle was 4.16%.

With the Government's decisive policy towards economic reforms and a thrust oninfrastructure development the Indian economy is poised for a decent growth in the comingyears.

Based on the above positive scenario the Company remains optimistic for a good demandoutlook for its products even though there may be some immediate slowdown in the trucksegment due to a switch-over from the BS-III to BS-IV emission norms and theimplementation of proposed GST.

Our Company is geared-up to meet the expected increase in demand through continuedinvestment in capacity expansion introduction of new products and improvement in quality.

In the Investment segment challenges will remain with declining interest rates and avolatile stock market. However the Company will continue to deploy its funds judiciouslykeeping capital protection in mind.

The Company participated at the Automechanika Fair at Frankfurt Germany in September2016. This is the largest Exhibition for Aftermarket Auto Components in the world. TheCompany also participated in i-Auto Connect 2016 an International reverse Buyers /Sellers Meet organised by ACMA and the Ministry of Commerce in Gurgaon on 6th September2016. The response of both the exhibitions was positive.

There was some improvement in the working of the Company's joint venture‘Compo-Advics (India) Pvt. Ltd.'. However in view of highly competitive marketconditions the company was not able to reach the desired utilisation of plant capacity.

There were no changes in the nature of business of the Company during the year underreview. Similarly there have been no material changes and commitments affecting thefinancial position of the Company between the end of the Company's financial year to whichthe financial statements relate and upto the date of this report.

7. PRODUCTION RANGE

Your Company is engaged in the manufacture and marketing of fiber based FrictionMaterials consisting of Brake Liners Roll Linings Clutch Facings Disc Brake Pads usedin Heavy and Light Trucks Passenger Cars 2 / 3 wheelers off-road-vehicles andconstruction and mining equipment. Composition Brake Blocks for the Railways are also animportant part of the Company's product portfolio.

8. MANAGEMENT DISCUSSION AND ANALYSIS

8.1 OPPORTUNITIES THREATS AND BUSINESS OUTLOOK

The Global economy continued to stagnate following slow trades low investments andpolicy uncertainties in advanced economies. Major global events during the year includedthe United Kingdom's decision to leave the

European Union and the outcome of presidential elections in United States of America.Both the events are expected to have a long-term impact on the global economy.

India emerged as a ‘bright spot' in an otherwise subdued world economy when itovertook China in 2015-16 as the fastest-growing major economy in the world. ThoughIndia's fundamentals continue to remain strong the recent demonetisation initiativeundertaken by the Indian Government is expected to lower India's GDP growth from 7.6% inFY 16 to 6.8% in FY 17.

Looking ahead the Indian economy presents positive picture both in the short-term andlong-term. The introduction of GST in this financial year will have a positive impact onthe economy and also for the business environment in general. The Government hasdemonstrated its willingness to take forward the reform process both with significantinvestments for improvement in infrastructure and also to bring-in financial disciplinewith a determined drive to eliminate the parallel economy. This will help to improve thebusiness outlook in the current year. As a consequence a positive effect by way of lowinflation rates are already beginning to be visible.

With the above positives for the Indian economy we foresee a significant growthpotential for the Automobile Industry which is good for Company's manufacturing andinvestment business.

This should improve the order-book of both OEM and After market customers particularlyin Commercial vehicle and Farm Tractor segment where the Company is a dominant player.The Company is geared-up to meet this additional demand by upgrading its technology andimprovement in its manufacturing segment. The Company has also planned to installadditional capacity to meet the increased business.

The Company is optimistic in its outlook for its current financial year barringchallenges because of increase in commodity prices which increased sharply during 2016-17.

The scenario of falling interest rate may pose some challenge in generating a higherinvestment income. However the Company will continue to adopt a prudent and pragmaticapproach to increase its revenue by way of judicious investments in all asset class.

8.2 RISKS AND AREAS OF CONCERN

The Company has laid down a well-defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.

8.3 HRD / INDUSTRIAL RELATIONS

The thrust of the Company's human resource development is to create a responsive andmarket-driven organization with emphasis on performance. Continuous appraisal of personnelcompetence in line with job requirements are carried out to provide for necessarytraining to personnel thereby facilitating higher levels of output and productivity. Theindustrial relations at Paithan and Bhandara remain satisfactory.

9. SUBIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has a Joint Venture Company namely "Compo Advics (India) PrivateLimited". The company had no subsidiary or associate company during the year underreview.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Joint Venture Company inForm AOC 1 is attached to the financial statements of the Company.

10. EXTRACT OF ANNUAL RETURN

An extract of Annual Return in Form MGT 9 is appended to this Report as "AnnexureA".

11. DIRECTORS AND KMP

a) Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 and Articles of Association of theCompany Mr. Raghu Mody (DIN: 00053329) Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board recommends his re-appointment.

b) Appointment

Mr. Raghu Mody (DIN: 00053329) have been re-appointed as Executive Chairman and WholeTime Director of the Company for a period of three years commencing from 1 October 2017to 30 September st th 2020 in the Board Meeting held on 23 May 2017. rd

Mr. Chakrapani Misra have been appointed as an Additional Director (Non-ExecutiveIndependent Director) of the Company for a period of 5 consecutive years w.e.f. 23 May2017 in the Board meeting held rd on 23rdMay 2017.

Re-appointment of Mr. Raghu Mody and appointment of Mr. Chakrapani Misra are subject tothe approval of Shareholders of the Company.

c) Cessation

There was no cessation from the Board of the Company during the period under review.

d) Declaration from Independent Directors

The Company has received declaration from all the Independent Directors of the Companyconfirming that they have met the criteria of independence as prescribed both underSection 149(6) of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

e) Annual Performance and Board Evaluation

The Board has devised a policy pursuant to the provisions of the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forperformance evaluation of the Chairman Board and individual Directors (includingindependent Directors) and Committees which includes criteria for performance evaluationof Non-executive Directors and Executive Directors.

The Board has devised questionnaire to evaluate the performances of Board BoardCommittees and individual Directors and Chairperson. The Chairman of respective BoardCommittees shared the report on evaluation with the respective committee members. Theperformance of each Committee was evaluated by the Board based on report on evaluationreceived from respective Board Committees. The reports on performance evaluation of theindividual Directors were reviewed by the Chairman of the Board.

The evaluation framework for assessing the performance of Directors comprises of thefollowing key areas: i. Attendance at Board Meetings and Committee Meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance;

iv. Providing perspectives and feedback going beyond information provided by themanagement.

The details of the programmes for familiarization of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link: http://www.hindcompo.com/ investor relations /documents / familiarisation-programes-for independent -directors. pdf

f) Key managerial Personnels (KMP)

The Key Managerial Personnel of the Company are as follows:

1. Mr. Raghu Mody Executive Chairman
2. Mr. P. K. Choudhary Managing director
3. Mr. Amit Goenka V.P. Finance &
Company Secretary
4. Mr. Sunil Jindal Chief Financial Officer

12. MANAGERIAL REMUNERATION AND OTHER DETAILS:

Disclosure pertaining to remuneration and other details as required under Section 197of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in this Report as "AnnexureB".

The Statement containing particulars of employees as required under section 197(12) ofthe Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rule 2014 is provided in a separate annexure forming part of thisreport. Further in terms of Section 136 of the Act the Report and accounts are being sentto the members excluding the aforesaid annexure. The said annexure is available forinspection at the registered office of the Company during the working hours and any memberinterested in obtaining a copy of the same may write to the Company Secretary and the samewill be furnished on request.

13. POLICY ON DIRECTORS APPOINTMENT AND

REMUNERATION

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

14. AUDIT COMMITTEE AND ITS COMPOSITION

As on 31 March 2017 the Audit Committee comprised of st Mr. Deepak Sethi Mr. A. B.Vaidya Mr. Raghu Mody and Lt. Gen. (Retd.) K. S. Brar.

Mr. Deepak Sethi is Chairman of Audit Committee of the Company. Mr. Amit Goenka V. P.- Finance and Company Secretary of the Company acts as Secretary of the Audit Committee.

The Audit Committee of the Company reviews the reports to be submitted to the Board ofDirectors with respect to auditing and accounting matters. It also supervises theCompany's internal control financial reporting process and vigil mechanism.

15. MEETINGS OF THE BOARD

The Board met five times during the year the details of which are given in theCorporate Governance Report. The intervening gap between the two consecutive meetings waswithin the period prescribed under the Companies Act 2013.

16. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and as required under Section 134 (5) of theCompanies Act 2013 state that:

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

(b) the directors have 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 of the company for that period;

(c) the directors have 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 have prepared the annual accounts on a going concern basis;

(e) the directors have 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 have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

17. DEPOSITS

During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS

WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT 2013

All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis and are entered into based on considerations of various business exigencies such assynergy in operations their specializations etc. and to further the Company's interests.

During the financial year 2016-17 the Company had entered into contracts /arrangements / transactions with related party the details of which as referred to inSection 188(1) of the Companies Act 2013 in the prescribed Form AOC-2 under Companies(Accounts) Rules 2014 is appended as

‘Annexure C'.

The policy on related party transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web link of the same is as under:http://www.hindcompo.com/investor-relations/documents/related-party-transaction-policy.pdf

19. PARTICULARS OF LOANS GUARANTEES OR

INVESTMENTS UNDER SECTION 186

The details of loans guarantee or investment under Section 186 of the Companies Act2013 are given under Notes to Accounts on financial statements.

20. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE

Pursuant to the provisions of Section 135 read with Companies (Corporate SocialResponsibility) Rules 2014 the Company has formed Corporate Social ResponsibilityCommittee and a policy on Corporate Social Responsibility (CSR). As part of itsinitiatives under CSR the Company has undertaken project in the area of eradicatinghunger. This project is in accordance with Schedule VII of the Companies Act 2013.

The details as per the provisions of Rule 8 of Companies (Corporate SocialResponsibility) Rules 2014 is annexed herewith as "Annexure D".

21. WHISTLE BLOWER/ VIGIL MECHANISM POLICY

The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instance offraud and mismanagement if any. The mechanism also provides for adequate safeguardsagainst victimization of directors and employees who avail of the mechanism and alsoprovide for direct access to the Chairman of the Audit Committee in the exceptional cases.The details of the Vigil Mechanism Policy is explained in the Corporate Governance Reportand also posted on the website of the Company. We affirm that during the financial year2016-17 no employee or director was denied access to the Audit Committee.

22. STATUTORY AUDITORS

M/s. Lodha & Company Chartered Accountants (Firm Registration No. 301051E)Mumbai the Statutory Auditors of the Company hold office until the conclusion of theensuing Annual General Meeting. The Company has proposed to appoint M/s. Bagaria & CoLLP Chartered Accountants Mumbai (Firm Registration No. 113447W) as the StatutoryAuditors of the Company for a period of five consecutive years i.e from the conclusion ofthe ensuing 53 Annual General Meeting upto the conclusion of 58 rd th Annual GeneralMeeting of the Company. The Company has received a letter from them to the effect thatthey are willing to get appointed as Statutory Auditors and if appointed theirappointment would be within the limits prescribed under Section 139 of the Companies Act2013 and they are not disqualified from being appointed as Auditors.

Your Directors recommend the appointment of M/s. Bagaria & Co LLP CharteredAccountants Mumbai as Statutory Auditors of the Company to hold office from theconclusion of the ensuing 53 Annualrd General Meeting upto the conclusion of 58 AnnualGeneral Meeting of the Company th subject to ratification by the members of the Companyevery year.

23. 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. M Baldeva Associates Company Secretaries Thane to undertake SecretarialAudit of the Company for the year 2016-17. The Secretarial Audit Report is annexedherewith as ‘Annexure E' and forming part of this report.

24. INTERNAL AUDIT

The Company has appointed M/s. Malpani & Associates Chartered Accountants Mumbaias its Internal Auditor. The Internal Auditor monitors and evaluates the efficacy andadequacy of internal control system in the Company its compliances with operatingsystems accounting procedures and policies at all locations of the Company and reportsthe same on quarterly basis to the Audit Committee.

25. REMARKS ON QUALIFICATION BY STATUTORY

AUDITORS AND SECRETARIAL AUDITORS

There is no qualification / observation/adverse remark in Statutory Auditor' Report.

With respect to observation made by the Secretarial Auditors in their report we wouldlike to state that:

i) the Annual Audited Consolidated Financial Results for the year ended 31 March 2016were approved and st submitted to Stock exchanges on 22nd July 2016 which is beyond thestipulated time limit of 30 May 2016 - th The Institute of Chartered Accountants of India(ICAI) vide its FAQs published on 24 June 2016 clarified that th a company which doesnot have subsidiary but has Joint venture or associate is also required to prepare theConsolidated Financial Statements as required under the provision of Section 129(3) of theCompanies Act 2013 for the financial year ended 31 March 2016. st Accordingly the Companyprepared and submitted the Consolidated Financial Statements on the basis of auditedfinancial statements of the Company and its Joint Venture viz. Compo Advics (India) Pvt.Ltd. on 22nd July 2016; and

ii) the delay in filing of some forms with Registrar of Companies were due tooversight.

26. CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34(3) and Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the following have been made a part of theAnnual Report and are attached to this report:

Corporate Governance Report

Auditors' Certificate regarding compliance of conditions of Corporate Governance

27. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS

PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS ANDCOMPANY'S OPERATIONS IN FUTURE

There was no significant or material order passed by any regulator or court ortribunal which impacts the going concern status of the Company or will have bearing oncompany's operations in future.

28. INTERNAL FINANCIAL CONTROL WITH REFERENCE

TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate withthe nature of its business size and complexity of its business operations. Internalcontrol systems comprising of policies and procedures are designed to ensure reliabilityof financial reporting compliance with policies procedures applicable laws andregulations and that all assets and resources are acquired economically used efficientlyand adequately protected.

29. CONSERVATION OF ENERGY TECHNOLOGY

ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Details regarding Conservation of energy technology absorption foreign exchangeearnings and outgo is given in "Annexure F" annexed herewith.

30. INFORMATION UNDER THE SEXUAL HARASSMENT OF

WOMEN AT WORKPLACE

The Company has constituted an internal complaint committee under Section 4 of TheSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.During the year there was no complaint filed before the said Committee.

31. DISCLOSURES PURSUANT TO REGULATION 14 OF SEBI (SHARE BASED EMPLOYEE BENEFITS)REGULATIONS 2014

A. Details related to GEBS

a) Date of Shareholders' approval:

Approved by the shareholders of the Company in the 51Annualst General Meeting held on18 September 2015. th

b) Kind of benefits to be granted under the Scheme:

Providing assistance to meet medical expenses providing assistance/reimbursement tomeet cost of tuition and other fees and expenses in connection with providing highereducation/and professional courses providing assistance to meet marriage expenses tosponsor holidays trips and get-togethers and such other benefits as more particularlydescribed in object clause of the Trust Deed.

c) Beneficiaries of the Scheme:

Such persons who are in permanent employment of the company for at least 5 years andare designated as Officers and Managers and their spouse parents and children who forthe time being is nominated to be a beneficiary as may be determined by the Nominationand Remuneration Committee from time to time but shall not include directors or promotersof the company.

d) Total assets of the Scheme:

Rs. 109513340 as per the audited balance sheet of the Trust as on 31 March 2017. st

e) Quantum of holding in own shares / listed holding company shares (both absolute andin percentage):

223963 (4.55%) Equity Shares of Rs. 10 each of the Company.

f) Whether scheme is in compliance of regulation 26(2)/27(3) of the regulations asapplicable: No.

g) Variation in terms of Scheme: Not Applicable

B. Details related to Trust i. General information on all schemes

Sr. No. Particulars Details
1 Name of the Trust Carnation Welfare Trust
2 Details of the Trustee(s) Mr. Snehal N.
Muzoomdar
Practicing Chartered Accountant Address: 52 Walchand Terraces Tardeo Air Conditioned Market Mumbai - 400034
IDBI Trusteeship Services Limited
Private Trust Address: Asian Building 17 R. Kamani Marg Ballard Estate Mumbai-400001.
3 Amount of loan disbursed by the Company/ any company in the group during the year Nil
4 Amount of loan outstanding (repayable to the company/ any company in the group) as at the end of the year Rs. 93000000
5 Amount of loan if any taken from any other source for which company / any company in the group has provided any security or guarantee Nil
6 Any other contribution made Nil
to the Trust during the year
ii. Brief details of transaction in shares by the Trust
Sr. Particulars Details
No.
A Number of shares held at the beginning of the year 234899
B Number of shares acquired during the year through (i) primary issuance (ii) secondary acquisition also as a percentage of paid up equity capital as at the end of the previous financial year along with information on weighted average cost of acquisition per share; Nil
C Number of shares transferred to the employees / sold along with the purpose thereof; 10936 (share sold for repayment of loan)
D Number of shares held at the end of the year 223963

iii. In case of secondary acquisition of shares by the Trust

Number of shares As a percentage of paid-up equity capital as at the end of the year immediately preceding the year in which shareholders' approval was obtained
Held at the beginning of the year 234899 (4.77%)
Acquired during the year Nil
Sold during the year 10936(0.22%)
Transferred to the employees during the year Nil
Held at the end of the year 223963 (4.55%)

32. DISCLOSURE PURSUANT TO SECTION 67 OF THE COMPANIES ACT 2013 READ WITH RULE 16(4)of THE COMPANIES (SHARE CAPITAL AND DEBENTURES) RULES 2014:

Your Company has created a ‘General Employee Benefits Scheme (GEBS)' under anirrevocable Trust named as "Carnation Welfare Trust" on 20 June 2011 for thebenefit of th its existing and future permanent employees except directors and promoters.The Scheme is established for the general welfare of the beneficiaries i.e. permanentemployees of the Company. Under the Scheme the Trust has purchased 234899 Equity Sharesof the Company from secondary market for a total consideration of Rs.112956669. As noshares are allotted or transferred to any employee or option to purchase of these sharesis given to any employee under this Scheme no voting rights are directly exercised byemployees of the Company on these shares. The trustees of the Trust are entitled toexercise vote on these shares however as required under Regulation 3(5) of the Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 they havenot exercised any voting right on these shares on resolutions transacted at the 52ndAnnual General Meeting held on 8th September 2016.

33. CAUTIONARY STATEMENT

The statements in the Directors' Report and Management Discussion and Analysis cannotbe construed as holding out any forecasts projections expectations invitations offersetc. within the meaning of applicable securities laws and regulations. This Reportbasically seeks to furnish information as laid down within the different headings to meetthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

34. APPRECIATIONS

The Directors would also like to place on record their sincere appreciation for thecontinued co-operation guidance support and assistance extended during the year underreport by our bankers customers suppliers and

Government agencies. The Board of Directors wishes to express its appreciation for thevaluable contribution made by the employees at all levels during the year under report.

By order of the Board of Directors
Place: Mumbai Raghu Mody
Date: 23 May 2017 rd Chairman