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Hindustan Hardy Spicer Ltd.

BSE: 505893 Sector: Auto
NSE: N.A. ISIN Code: INE724D01011
BSE LIVE 14:40 | 18 Aug 130.20 6.20
(5.00%)
OPEN

129.80

HIGH

130.20

LOW

129.80

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 129.80
PREVIOUS CLOSE 124.00
VOLUME 1188
52-Week high 138.90
52-Week low 83.10
P/E
Mkt Cap.(Rs cr) 20
Buy Price 130.20
Buy Qty 132.00
Sell Price 0.00
Sell Qty 0.00
OPEN 129.80
CLOSE 124.00
VOLUME 1188
52-Week high 138.90
52-Week low 83.10
P/E
Mkt Cap.(Rs cr) 20
Buy Price 130.20
Buy Qty 132.00
Sell Price 0.00
Sell Qty 0.00

Hindustan Hardy Spicer Ltd. (HINDHARDYSPICE) - Director Report

Company director report

TO THE MEMBERS

(Pursuant to Section 134(3) of the Companies Act 2013)

The Directors have pleasure in presenting the Thirty Fourth Annual Report together withthe Statement of Accounts for the year ended on March 31 2016

FINANCIAL RESULTS:

During the year under review net sales turnover was Rs. 5514.18 lacs as against Rs.5235.22 lacs during the corresponding previous year. Export earnings were Rs. 1360.04 lacsas against Rs. 1265.89 lacs during the corresponding previous year. The domestic marketfor commercial vehicles witnessed an uptick in the second half of the year as customersaccelerated buying before the BS IV norms become applicable all across India from

April 2017 onwards. Conformity to BS IV norms will significantly increase the price ofCVs hence the pre-buying. This uptick is expected to continue for the first quarter of thenext financial (FY 16-17).

Export earnings were bolstered by a recovery in the euro. The EUR to INR exchange ratewas Rs. 75.43 at March 31 2016 as compared to Rs. 66.91 at March 31 2015. Exportvolumes remained lower than peak volumes seen in FY 2013-14 as the sluggishness in theEuro zone economies continued.

Operating margins improved as a result of increased operating

Depreciation expense was Rs. 104.21 lakhs in the current financial year as compared toRs. 244.56 in FY 14-15. This is because the change in the method of calculatingdepreciation as mandated by the Companies Act 2013 resulted in a one-time charge of Rs.157.93 lacs in FY 14-15.

2015-2016 2014-2015
(Rs. in lakhs) (Rs. in lakhs)
Sales 5514.98 5235.22
PROFIT 273.20 119.99
Less:
Depreciation 104.21 244.56
Interest 102.63 89.08
PROFIT/LOSS BEFORE TAX 66.36 -213.66
Less: Provision for Taxation
Current Tax 13.00 -
Deferred Tax -2.46 -56.45
PROFIT AFTER TAX 55.82 -157.21
Surplus brought forward from Previous Year 194.02 372.99
PROFIT AVAILABLE FOR APPROPRIATION 249.84 215.78
General Reserve - -
Depreciation of earlier years - 21.76
Proposed Dividend 7.49 -
Tax on Proposed Dividend 1.57 -
Surplus Carried Forward 240.78 194.02

TRANSFER TO GENERAL RESERVES

There was no transfer of profits made to General Reserve.

DIVIDEND

The Board of Directors are pleased to recommend a dividend of 5% on 1498450 EquityShares of Rs. 10/- each for the financial year 2015-2016.

OUTLOOK

The domestic commercial vehicle market is expected to remain strong for the firstquarter of FY 16-17. However OEMs are projecting lower volumes for the second and thirdquarters. The competition amongst propeller shaft manufacturers is also intensifying whichis putting downward pressure on margins.

Export volumes are likely to remain weak as the slowdown in Europe is likely tocontinue which could be prolonged by Brexit.

The Company has stepped up its sales and marketing efforts and is exploring expandingits product offering and targeting new customers.

MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year and the date ofthe report.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

6 (Six) meetings of the Board of Directors of the Company were held during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Ms. Devaki Saran (DIN 06504653) Director of the Company retires at the ensuing Annual

General Meeting and being eligible offers herself for re-appointment.

During the year Mr. A. R. Rajwade (DIN 00018578) resigned as Managing Director of thecompany w.e.f. 30th September 2015.

Mr. Ravindra Kale (DIN 03115130) was appointed as an additional director and whole timedirector designated as Executive Director & CEO of the Company w.e.f. 23rd September2015. The resolution seeking approval of the Members for appointment of Mr. Ravindra Kalehas been incorporated in the notice of the forthcoming annual general meeting of theCompany.

DECLARATION FROM INDEPENDENT DIRECTORS

Mr. Shiamak Marshall (DIN 00085682) Mr. Jehangir H. C. Jehangir (DIN 00001451) and Mr.Richard Koszarek (DIN 00740800) who are independent directors have submitted adeclaration as required under section 149 (7) of the Act that each of them meets thecriteria of independence as provided in sub Section (6) of Section 149 of the Act andthere has been no change in the circumstances which may affect their status as independentdirector during the year. In the opinion of the Board the independent directors possessappropriate balance of skills experience and knowledge as required.

AUDIT COMMITTEE OF BOARD OF DIRECTORS

The Audit committee of the Board of directors of the Company consists of the followingmembers

1. Mr. Shiamak Marshall

2. Mr. Jehangir H. C. Jehangir

3. Mr. S. C. Saran

4. Mr. Richard Koszarek

VIGIL MECHANISM

The Company has formulated and published a Whistle Blower Policy to provide a mechanism("Vigil Mechanism") for employees including directors of the Company to reportgenuine concerns. The provisions of this policy are in line with the provisions of theSection 177 (9) of the Act. The Whistle Blower Policy (Vigil Mechanism) is uploaded on theCompany’s website (http://www.hhsl.net/Policy.html).

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION AND CRITERIA FOR INDEPENDENTDIRECTORS

The Remuneration Policy for directors and senior management and the criteria forselection of candidates for appointment as directors independent directors seniormanagement as adopted by the Board of Directors are placed on the website of the Company(http://www.hhsl.net/Policy.html). There has been no change in the policies since thelast fiscal year.

We affirm that the remuneration paid to the directors is as per the terms laid out inthe policy of the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

(iii) they have taken proper and sufficient accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating

(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct 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 disclosures

The internal auditor also regularly reviews the adequacy of internal financial controlsystem.

DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES

The Company does not have any subsidiary/ joint ventures/ associates.

EXTRACT OF ANNUAL RETURN

As provided under sub Section (3) of Section 92 of the Act the extract of annualreturn is enclosed which forms part of the directors’ report as Annexure I.

AUDITORS

M/s. J. L. Bhatt & Company Chartered Accountants the Auditors of the company whowould retire at the ensuing Annual General Meeting offer themselves for reappointment.M/s. J. L. Bhatt & Company Chartered Accountants the existing auditors havefurnished a certificate confirming that if reappointed for the financial year 2016-2017their reappointment will be in accordance with

Section 139 read with section 141 of the Companies Act 2013.

You are requested to appoint Auditors and to fix their remuneration.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Parikh & Associates Practising Company Secretaries wereappointed as the Secretarial Auditors for auditing the secretarial records of the Companyfor the financial year 2015-2016.

The Secretarial Auditors’ Report is annexed as Annexure II.

AUDITORS’ REPORT AND SECRETARIAL AUDITORS’ REPORT

The auditor’s’ report does not contain any qualifications reservations oradverse remarks.

As regards observations of Secretarial Auditors in their report your directors have tostate that constant efforts are being made to identify and appoint a competent andsuitable candidate as the Company Secretary of the Company. In the Meanwhile to ensuretimely compliance of the provisions of the Act the company has been taking theprofessional services of the reputed Practising Company Secretaries.

CONSERVATION OF ENERGY TECHNOLOGY ABSORBTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with Clause (m) of Sub-section (3) of Section 134 of the Actread with Companies (Accounts) Rules 2014 is annexed to this report as Annexure III.

PARTICULARS OF EMPLOYEES

Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the particulars of employees areannexed as Annexure IV.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORY/ JUDICIAL AUTHORITY

No significant or material orders were passed by any regulator or court that wouldimpact the going concern status of the Company and its future operations.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The Company has not given any loans or guarantees or made investments during the yearended March 31 2016.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has framed a risk management policy and isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis.

RELATED PARTY TRANSACTIONS

Particulars of transactions with related parties pursuant to Section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in Form AOC-2and the same forms part of this report as Annexure V.

EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

An annual evaluation of the Board’s own performance Board committees andindividual directors was carried out pursuant to the provisions of the Act in thefollowing manner:

Sr. No. Performance evaluation of Performance evaluation performed by Criteria
1. Each Individual directors Nomination and Remuneration Committee Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided key performance aspects in case of executive directors etc.
2. Independent directors; Entire Board of Directors excluding the director who is being evaluated Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided etc.
3. Board its committees and individual directors All directors Board composition and structure; effectiveness of Board processes information and functioning fulfilment of key responsibilities performance of specific duties and obligations timely flow of information etc. The assessment of committees based on the terms of reference of the committees and effectiveness of the meetings.

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made thereunder. All employees (permanent contractual temporarytrainees) are covered under this policy.

The Company has not received any complaint of sexual harassment during the financialyear 2015-16.

LISTING AGREEMENT AND LISTING FEES

The Company entered into Listing Agreement with BSE Limited in terms of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 issued on September 2 2015effective from December 1 2015.

The Company has paid the listing fees to BSE Limited for the year 2016-2017.

INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE

The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and isavailable on our website (http://www.hhsl.net/Policy.html)

GREEN INITIATIVES

As a part of Green initiative Electronic copies of the Annual Report 2015-16 andNotice of the 34th Annual General Meeting of the Company are sent to all members whoseemail addresses are registered with the Company / Depository Participant(s). For memberswho have not registered their email addresses physical copies are sent in the permittedmode.

MANAGEMENT’S DISCUSSION AND ANALYSIS

In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 theManagement’s discussion and analysis is set out in this Annual Report.

CORPORATE GOVERNANCE REPORT

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Corporate Governance is not mandatory to the Company.

ACKNOWLEDGEMENT

The directors thank the Company’s employees customers vendors investors andacademic institutions for their continuous support.

The directors also thank the Government of various countries Government of India theGovernments of various states in India and concerned Government departments/agencies fortheir co-operation.

The directors appreciate and value the contributions made by every member of theHindustan Hardy Spicer family.

For and on behalf of the Board
Date : 13.05.2016 S. C. Saran
Place : Mumbai Chairman