Your Directors present their Fifty Sixth Annual Report and Audited Accounts of theCompany for the year ended 31.03.2016. The operating results of the company for the yearare as follows:
| || ||(Rs in Thousand) |
| ||2015-16 ||2014-15 |
|The profit for the year after meeting all expenses but before providing for Gratuity Depreciation || || |
|Taxation and extra-ordinary income is : from which have to be deducted ||149241 ||153959 |
|Gratuity according to statutory requirement ||9160 ||13381 |
|Depreciation for the current year ||130350 ||91744 |
|Provision for Taxation ||(6195) ||21171 |
|Provision for Dividend ||1443 ||1443 |
|Tax on Dividend ||294 ||294 |
|Leaving a balance of ||14189 ||25926 |
|To which have to be added: || || |
|The balance brought forward from the previous year ||1924 ||- |
|Making a total of ||16113 ||25926 |
|Out of which transferred to General Reserve ||- ||24002 |
|Leaving a balance to be carried forward to next years account ||2113 ||1924 |
State of Affairs & Operations
During the year under review the gross revenue of the company has decreased to Rs755.84 Crores as compared to Rs 841.92 Crores in 2014-15. The profit before depreciationhas marginally decreased fromRs 1405.78 Lacs to Rs 1400.81 Lacs.
In the Financial Year 2015-16 income from operations was Rs 756.99 crores as comparedto Rs 837.77 Crores in the previous year 2014-15. The profit before depreciation hasmarginally decreased fromRs 1331.75 Lacs to Rs 1299.98 Lacs. Revenue from wholly ownedsubsidiary i.e Hindusthan Speciality Chemicals Limited was Rs 566.43 Lacs and net profit(loss) after tax was Rs (178.97) Lacs.
Your Directors are pleased to inform that the commercial production for manufacturingactivities of aluminum wire rod and conductors at Khurda near Bhubaneswar in the state ofOdisha were commenced during the year. In view of weak and sluggish real estate marketglobally plans to develop Companys land at Bangalore into residential apartmentswere kept on hold.
The operations of Conductors at Faridabad works have become uneconomical because oflocational disadvantages and as such production of Conductors has been discontinued duringthe year under review. The availability of our prime raw material for conductor divisioni.e. aluminum remained satisfactory. Although there were fluctuations prices of aluminumin the domestic as well as International markets. It did not affect the margins as therewere price variation clause in orders.
The availability of power was comfortable except Mandideep Works. The company has beenable to keep the factories running with the help of captive power generating capacity.
There has been slow down in the issue of new tenders by Power utilities during the yearwhich has been picked up recently. Efforts are being made to secure more orders byparticipating in larger number of tenders.
During the year the company executed export orders (including sale under global tendersin India) worth Rs 8896.35 lacs approximately as compared to Rs 37427.11 lacs during thefinancial year 2014-15. However physical export rose toRs 4982.43 lacs from Rs 746.89lacs in 2014-15. We are continuously striving to increase our export order book and addmore markets.
Your Directors have recommended a dividend of Rs 1.00 per equity share for thefinancial year ended31 st March 2016 amounting to Rs 1736622/-(inclusive of tax of Rs 293737/-). The dividend payout is subjected to approval ofmembers at the ensuing Annual General Meeting.
The dividend will be paid to members whose names appear in the Register of Members ason 16th September 2016 in respect of shares held in dematerialised and physical form itwill be paid to members whose names are furnished by National Securities DepositoryLimited and Central Depository Services (India) Limited as beneficial owners as on thatdate.
Wholly Owned Subsidiary Companies
The Company has a material wholly owned subsidiary Hindusthan Speciality ChemicalsLimited and two non-material wholly owned subsidiary companies Hindusthan Vidyut ProductsLimited and Hindusthan Projects Limited. Hindusthan Speciality Chemicals Limited (HSCL)wholly owned subsidiary company has taken further steps to set up its state of theart green field manufacturing facility of Epoxy Resin and formulated products at JhagadiaDistt. Bharuch Gujarat. Approval for
Environment clearance consent to establish from Gujarat Pollution Control BoardDirectorate of Industrial Safety and Health Chief Controller of Explosives Petroleum andExplosives Safety Organization and others have been obtained with respect to the project.
Financial tie-up for the project have been firmed up with consortium of Banks for atotal loan amount of Rs 172.80 Crores. The plant is targeted to start commercialproduction by October 2017. The company has commenced their R&D cum formulationfacility in a pilot plant at Taloja since August 2015. The company has also startedmarketing activities in its own brand with the support of its innovative technologypartners. Further for the financial year 2016-2017 the company has targeted to scale upthe business volume and serve quality products to its clients. HSCLs quality lab isequipped with instruments which will facilitate to achieve excellence in monitoring bothincoming raw materials and outgoing value added products. The company quality team iscomprised of qualified and experienced personnel who are competent to test the productsfor their right application. A sum of Rs 55.08 Crores have been paid till 31st March 2016by way of equity capital by your Company to Hindusthan Speciality Chemicals Limited.
Hindusthan Vidyut Products Limited a wholly owned non material subsidiary companyhas not commenced any commercial activity during the year.
During the year under review Hindusthan Projects Limited a non-material whollyowned subsidiary company was incorporated on 04.11.2015 which is not carrying on anyoperations presently. There has been no change in relationship of any subsidiary companyduring the year.
A report on the performance and financial position of each of the subsidiariesconsolidated financial statement and hence not repeated here for the sake of brevity. ThePolicy for determining material subsidiaries as approved may be accessed on theCompanys website at the link i.ehttp://www.hindusthanurban.com/pdf/policy/Policy%20for%20determining%20material%20subsidiaries_HUIL.PDF
Consolidated Financial Statement
The consolidated financial statements prepared in accordance with the Companies Act2013 and Accounting Standard (AS) - 21 are attached with the Annual Report.
Management Discussion and Analysis Report
As required under regulation 34 of the Listing Regulations with Stock Exchange theManagement Discussion and Analysis Report is enclosed as a part of this report.
As a responsible corporate citizen the Company is committed to maintain the higheststandards of Corporate Governance and believes in adhering to the best corporate practicesprevalent globally. The report on Corporate Governance as stipulated under the ListingRegulations forms an integral part of this Report. The requisite confirming compliancewith the conditions of Corporate Governance is attached to certificate the report onCorporate Governance.
The Board Members and Senior Management Personnel have affirmed compliance with theCode of Conduct for the year ended & Managing Director confirmingthe same is attachedto the Corporate Governance March 312016.Acertificate Report.
A certificate from the CEO and CFO confirmingcorrectness of the financial statementsadequacy of internal control attached to the Corporate Governance Report.
Directors Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 Directors of your Company herebystate and confirm
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed;
b) The selected accounting policies have been applied consistently and the judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the company at the end of the financial year and of the profit of thecompany for that period;
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;
d) The annual accounts have been prepared on a going concern basis;
e) Internal Financial Controls laid down in the company are adequate and were operatingeffectively.
f) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and these are adequate and are operating effectively.
Directors and Key Managerial Personnel
Changes in Board of Directors and other Key Managerial Personnel
Mr. Om Prakash Shroff and Mr. Subhash Madan resigned from the Board due to theirpre-occupations w.e.f. June 15 2015 and February 29 2016 respectively. The Boardof Directors placed on record its appreciation for the valuable advice and guidanceprovided by Mr. Om Prakash Shroff and Mr. Subhash Madan during their long and fruitfulassociation with the Company.
During the year under review the Nomination and Remuneration Committee recommended theappointment of Mr. Ratan Lal Nangalia as director. Accordingly the Board appointed Mr.Ratan Lal Nangalia as director in casual vacancy in place of Mr. Om Prakash Shroff. TheNomination and Remuneration Committee considered and recommended the appointment of Mr.Vivek Dayaram Kohli as whole time director of the Company. The Board after discussionsappointed Mr Vivek Dayaram Kohli as Whole time Director with effect from April 12016 for a term of three years subject to the approval of the shareholders in ensuingannual general meeting of the Company. The Company has received notice with requisitedeposit of Rs 100000/- from a shareholder for the candidature of Mr. Vivek Dayaram Kohliin the capacity of director of the Company. The Board recommends the appointment of Mr.Vivek Dayaram Kohli as Whole time Director.
During the year under review Mr. Deepak Kejriwal was redesignated as Chief OperatingOfficer-Conductor w.e.f. April 01 2016 and therefore he ceased to act as the ChiefFinancial Officer.
On the recommendation of Nomination and Remuneration Committee and Audit Committee Mr.Anil Kumar Chandani was appointed as Chief Financial Officer in the category of keyManagerial Personnel as per the provisions of the Companies Act 2013 w.e.f. from01.04.2016.
Your company is in full compliance of Listing regulations and the Companies Act 2013with regard to the composition of Board of Directors.
Retirement by rotation
Mr. Vikram Aditya Mody will retire by rotation at the ensuing Annual General Meetingand being eligible offer himself for reappointment. The Board recommends hisre-appointment as Director.
Six meetings of the Board of Directors were held during the year. For further detailsplease refer report on Corporate Governance of this Annual Report.
As on date the Audit committee comprises of Mr. Mool Chand Gauba Chairman Ms. SumanLata Saraswat and Mr. Shyam Sunder Bhuwania. The Board has accepted all therecommendations made by the Audit Committee.
Declaration of Independent Directors
The Company has four independent directors namely Mr. Ramawatar Joshi Mr. Ratan LalNangalia Mr. Mool Chand Gauba and
Ms. Suman Lata Saraswat. All the directors are professionally qualifiedand possessappropriate balance of skills expertise and knowledge and are qualified for appointmentas Independent Director.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and the Listingregulations.
i) Statutory Auditors
M/s. K. M. Agarwal & Co. Chartered Accountants (Firm Registration No. 853N) wereappointed as statutory auditors of the company at the last Annual General Meeting held on21.09.2015 upto fiftyeighth Annual General Meeting subject to ratification by members atevery subsequent Annual General Meeting. Therefore ratification of appointment ofStatutory Auditors is being sought from the members of the Company at the ensuing AnnualGeneral Meeting.
There are no qualification reservation or adverse remarks or disclaimer in theAuditors Report to the members on the Annual
Financial Statements for the year ended 31.03.2016.
ii) Branch Auditors
M/s. Rajratan & Co. Chartered Accountants (Firm Registration No. 307101E) wereappointed as branch auditors of the company at the last Annual General Meeting held on21.09.2015 upto fifty eighth Annual General Meeting subject to ratification by members atevery subsequent Annual General Meeting. Therefore ratification of appointment of BranchAuditors is being sought from the members of the Company at the ensuing Annual GeneralMeeting.
There are no qualification reservation or adverse remarks or disclaimer in theAuditors Report to the members on the Annual
Financial Statements for the year ended 31.03.2016.
iii) Cost Auditors
M/s. J.K Kabra & Co. Cost Accountants were appointed as Cost Auditors for auditingthe cost accounting records of our Company for the year ended 31st March 2016by the Board of Directors the report for which is under preparation and will be filedindue course. The Cost Audit Report for the year 2014-15 has been filed under XBRL modewithin the due date of
iv) Secretarial Auditor
The Board has appointed Mr. Amit Kumar Company Secretary in practice to conduct theSecretarial Audit for the financial year
The Secretarial Audit Report for the financial year ended 31.03.2016 is annexedherewithmarkedas Annexure-A to this report. The report does not contain anyqualification reservation and adverse remark.
The Secretarial Standards on Meetings of the Board of Directors (SS-1) and SecretarialStandards on General Meetings (SS-2) (together referred to as the Secretarial Standards)as approved by the Central Government have been issued by the Institute of CompanySecretaries of India (ICSI) under the provisions of Section 118(10) of the Companies Act2013 (the Act) vide ICSI No. 1 (SS) of 2015 dated 23rd April 2015 andpublished in the Gazette of India Extraordinary Part III-Section 4. These SecretarialStandards came into force w.e.f. 1st July 2015. The Company is adhering bothstandards from 1st July 2015.
v) Internal Auditors
M/s. M.L Garg & Co. Chartered Accountants performs the duties of Internal Auditorsof the Company and their report are reviewed by the Audit committee from time to time. Asper the recommendations of Audit committee M/s. M.L Garg & Co. Chartered Accountantswere re-appointed as internal auditors for the financial year 2016-17.
The Authorised share Capital of the Company is Rs 25000000/- divided into 2500000equity shares of Rs 10/- each. The paid up Equity Share Capital as on 31.03.2016 was Rs14428850/-. During the year under review the company has not issued any share capitalwith differential voting rights sweat equity or ESOP nor provided any money to theemployees or trusts for purchase of its own shares.
Listing with Stock Exchange
In view of de-recognition of Delhi Stock Exchange the Company received a communicationfrom DSE that the Company neither need to comply the provisions of listing agreement norrequired to pay annual listing fee. During the year the Company in order to provideliquidity to the shareholders of the Company and in compliance with the SEBIguidelines/circulars applied for direct listing of equity shares to BSE Limited (BSE). BSELimited provided its in-principle approval for listing of equity shares of the Company.The listing fees will be paid upon approval of listing by BSE.
Annual Custody/Issuer fee has been paid to NSDL and CDSL the depositories where theshares of the company are dematerialized.
Material changes and commitments
No material changesorcommitmentshaveoccurredbetweentheendofthefinancialyear to whichthe financial statements relate and the date of this report affecting the financialposition of the Company.
Annual Evaluation of Board and Directors
As required under the Companies Act 2013 and the Listing Regulations an evaluation ofthe performance of the Independent Directors was carried out by the Board of Directorsduring the year based on the criteria laid down by the Nomination and RemunerationCommittee. On an overall assessment it was found that all the Independent Directors havegiven a good account of themselves. The Board concluded that the Independent Directorsindividually and collectively were well qualified and their contributions were in theinterest of the Company.
The Independent Directors in a separate meeting held on 28.03.2016 reviewed andevaluated the performance of Non-Independent Directors Board as a whole and theperformance of the Chairman of the Company. Keeping the requirements under the Act and theListing Regulations the Independent Directors laid down broad areas for evaluation. Afterdetailed discussion it was concluded that the performance of the Board collectively andthe Directors individually on all counts of evaluation were appreciable.
The performance of the Chairman and other Executive Directors was evaluated byIndependent Directors for leadership and direction to the Company judging as per theparameters of the evaluation criteria and it was noted that their performance wassatisfactory. It was further noted that the Chairman took proper initiative in policydecisions making with the senior executives and Board.
The Board carried out the performance evaluation of its committees.
Directors Appointment and Remuneration
Appointment of Directors on the Board of the Company is based on the recommendations ofthe Nomination and Remuneration Committee.
The committee identifies and recommends to the Board persons for appointment on theBoard after considering the necessary and desirable competencies. The committee takesinto account positive attributes like integrity maturity judgement leadership positiontime and willingness financial acumen management experience and knowledge in one or morefields of finance law management sales marketing administration research etc.
In case of Independent Directors (IDs) they should fulfill the criteria of independenceas per the Act and Regulation 16 of the Listing
Regulations in addition to the general criteria stated above. It is ensured that aperson to be appointed as director has not suffered any disqualification under the Act orany other law to hold such an office.
The Directors of the Company are paid remuneration as per the Remuneration Policy ofthe Company the gist of which is given under the heading RsRemuneration Policyherein below. The details of remuneration paid to the directors during the year 2015-16are given in Form MGT-9 annexed hereto.
The Company has a Remuneration Policy relating to remuneration of the Directors seniormanagement including its Key Managerial Personnel (KMP) and other employees of theCompany. The Remuneration Policy is in accordance with Section 178 of the Act and theRules made thereunder. The salient features of the Policy are given below:
i. Guiding principle
The guiding principle of the Policy is that the remuneration and other terms ofemployment should effectively help in attracting and retaining committed and competentpersonnel.
Non-executive directors are paid remuneration in the form of sitting fees for attendingBoard/ Committee meetings as fixed
Board from time to time subject to statutory provisions. Presently sitting fee isRs10000/- per Board meeting and Committee meeting.
Remuneration of Managing Director is fixed by the Board of Directors on therecommendation of the Nomination and Remuneration
Committee subject to the approval of the shareholders and other authorities ifrequired. The Nomination and Remuneration Committee while recommending the remunerationtakes into account pay and employment conditions in the industry merit and seniority ofthe person and paying capacity of the Company. The remuneration which comprises of salaryperquisites performance based reward and retirement benefits as per Company Rules issubject to the limits laid down under the Act.
iii. Key Managerial Personnel (KMP)
Appointment and cessation of service of KMP are subject to the approval of theNomination and Remuneration Committee and Board of Directors. iv. Other employees
The remuneration of other employees is fixed from time to time as per the guidingprinciple laid down in the Remuneration Policy and considering industry standards and costof living. In addition to salarytheyarealsoprovidedperquisitesandretirementbenefitsas perschemes of the Company and statutory requirements where applicable. The RemunerationPolicy of the Company is available on its website.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information required under section 134(3) (m) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is given in the Annexure-B tothis report.
Compliance Certificate of the Auditors
Certificate from the Companys Auditors M/s. K. M. Agarwal & Co. confirmingstipulated in para D of Schedule V to the Listing Regulations is attached to this Report.
Corporate Social Responsibility (CSR)
The Company has a Corporate Social Responsibility Policy (CSR Policy) indicating theactivities to be undertaken by the Company which was duly approved by the Board. CSRCommittee of the Board has developed a CSR Policy the salient feature of which are givenas part of this report as Annexure-C. Additionally The CSR Policy may beaccessed on the Companys website at the link: http://www.hindusthanurban.com/pdf/policy/HUIL_CSR%20Policy.pdf
Internal Control System and their Adequacy
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable
Accounting Standards for properly maintaining the books of accounts and reportingfinancial statements. The internal auditor of the company checks and verifies the internalcontrol and monitors them in accordance with policy adopted by the company. The Companycontinues to ensure proper and adequate systems and procedures commensurate with its sizeand nature of its business.
The Company values its investors immensely. With a view to keep its investors wellinformed of its activities the Company has taken the following initiatives:
- Maintaining user friendly investor section on the website of the Company i.ewww.hindusthanurban.com
- A dedicated email id viz firstname.lastname@example.org for interacting onvarious matters with respect to share transfer transmission dividends and other relatedissues with the Company Secretary and Compliance officer
In pursuance of the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Policy on vigil mechanism and whistle blower policy may be accessed onthe Companys website at the link:http://www.hindusthanurban.com/pdf/policy/HUIL_Whistle%20Blower%20Policy.pdf
Related Party Transactions
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an armslength basis. During the year the Company had not entered into any contract / arrangement/ transaction with related parties which could be considered material in accordance withthe policy of the Company on materiality of related party transactions. All related partytransactions were approved by the Audit Committee and the Board. The relevant informationregarding related party transactions has been set out in Note no. 32 of the StandaloneFinancial Statement for the financial year ended 31.03.2016.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Companys website at thelink: http://www.hindusthanurban.com/pdf/policy/HUIL_RPT%20Policy.pdf
Significant Material Orders Passed by Regulators or Courts or Tribunals
No significant orders have been passed by any Regulators Courts or Tribunals impactingthe going concern status and Companys operations in future.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is annexedherewith as Annexure-D.
Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Particulars of Contracts or arrangement with related parties
All related party transactions that were entered into during the financial year were onan arms length basis and were in the ordinary course of business. Such Related PartyTransactions which are proposed to be entered during the financial year are placed beforethe Audit Committee and the Board for approval. Prior omnibus approval of the AuditCommittee is obtained on annual basis for the transactions which are of a foreseen andrepetitive nature. The transactions entered into pursuant to the omnibus approval sogranted are placed before the Audit Committee for its review on a quarterly basis. TheCompany has formulated a policy for transacting with Related Parties which is uploaded onthe website of the Company (http://www. hindusthanurban.com/pdf/policy/HUIL_RPT%20Policy.pdf). Transactions with the related parties are disclosed in Notes to the financialstatements in the Annual Report. The disclosure in Form AOC-2 is attached as Annexure-E.
Development and Implementation of a Risk Management Policy
The Company has a Risk Management Committee which has been entrusted with theresponsibility to assist the Board in (a) Overseeing and approving the Companysenterprise wide risk management framework; and (b) Overseeing that all the risks that theorganization faces. The Company has been addressing various risks impacting the Companyand the policy of the Company on risk management is provided elsewhere in this AnnualReport in Management Discussion and Analysis.
The Company has not accepted any deposits covered under Chapter V from public and assuch no amount on account of principal or interest on deposits from public wasoutstanding as on the date of the balance sheet.
Anti-Sexual Harassment Policy
Pursuant to the "Sexual Harassment" of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company constituted Internal ComplaintsCommittee at all its workplaces. There has not been any instance of complaint reported inthis regard to any of the Committee.
Particulars of Directors and Employees as required under Section 197(12) of the Actread with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are given in Annexure-F and form part of this Report.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Rajendra Prasad Mody |
|Place : New Delhi ||Chairman |
|Date : May 23 2016 ||(DIN: 00140503) |
SECRETARIAL AUDIT REPORT
|CIN ||L31300DL1959PLC003141 |
|AUTHORISED CAPITAL ||Rs 25000000/- |
|PAID UP CAPITAL ||Rs 14428850/- |
HINDUSTHAN URBAN INFRASTRUCTURE LIMITED
7 TH Floor Kachenjunga
18 Barakhamba Road New Delhi-110001
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by HINDUSTHAN URBANINFRASTRUCTURE LIMITED ("the Company"). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts /statutory compliances and expressing opinion thereon.
Based on our verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit We hereby report that in our opinion the Company hasduring the audit period covering the financialyear ended on
March 31 2016 complied with the statutory provisions listed hereunder and also thatthe Company has proper Board-processes and compliance-mechanism in place to the extent andin the manner reported hereinafter.
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on March 31 2016 accordingto the provisions of
i. The Companies Act 2013 (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act 1956 (SCRA) and the Rulesmade under that Act;
iii. The Depositories Act 1996 and the Regulations and Bye-laws framed under that Act;
iv. The Foreign Exchange Management Act 1999 and the Rules and Regulations made underthat Act to the extent applicable to Overseas Direct Investment (ODI); NA
v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009; NA
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999; NA
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008; NA
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; NA and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; NA
(vi) Industrial Disputes Act Factories Act 1947 Payment of Bonus Act 1965 MinimumWages Act 1948 Payment of Gratuity Act 1972 Workmens Compensation Act 1923Employees State Insurance Act 1948 Employees Provident Fund & Misc.Provo Act 1952 Boilers Act 1923 Employers Liability Act 1938 and all otherLabour Laws Rules and Regulations applicable to the Company.
We have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India.
(ii) The Company has filed an application for listing of shares with BSE Ltd. underdirect listing route citing reasons that Delhi Stock
Exchange after its de-recognition shifted the company to the dissemination Board ofBSE Ltd.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members views if anyare captured and recorded as part of the minutes.
We further report that:
There are adequate systems and processes in the company commensurate with the size andoperations of the company to monitor and ensure compliance with applicable laws rulesregulations and guidelines.
We further report that:
1. During the audit period; the company has passed special resolution under section 196of the Companies Act 2013 on 7th day of December 2015 and has re-appointedMr. Shyam Sunder Bhuwania as Vice Chairman cum Managing Director for a term of threeyears. The appointment and remuneration payable to him is within the purview of provisionsof the Companies Act 2013 read with Schedule-V.
2. During the audit period the company has executed Corporate Guarantee on behalf ofits wholly owned subsidiary company i.e. Hindusthan Specialty Chemicals Limited (HSCL)amounting Rs172.80 Crores (One Hundred Seventy Two Crores and Eighty Lacs) as a securityfor term loan vide board resolution dated January 27 2016.
| ||For AMIT KUMAR |
| ||Company Secretaries |
| ||Sd/- |
| ||Amit Kumar |
| ||Proprietor |
|Place : New Delhi ||FCS-5917 |
|Date : 29.04.2016 ||CP-6184 |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGOETC:
Information on conservation of Energy Technology absorption Foreign Exchange earningsand outgo required to be disclosed under Section 134(3)(m) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 are provided hereunder:
I. Conservation of Energy
(a) Energy Conservation measures taken.
(i) Installation of Solar System
(ii) Variable frequency drive on 37 stranding Machine
(b) Additional Investments and proposals if any being implemented for reduction ofconsumption of energy.
No specific additional investment proposals being implemented
(c) Total energy consumption and energy consumption per unit of production of energyconsumption and consequent impact on the cost of production of goods.
(d) Total Energy consumption and energy consumption per unit of production as perForm-A in respect of industries specified in the Schedule thereto. Not applicable
II. Technology Absorption
1. Research & Development (R&D)
(a) Specific areas in which R&D carried out by the Company. - Nil (b) Benefitderived as a result of the above R&D. - Nil
(c) Future Plan of action - Nil (d) Expenditure on R&D
|i) Capital || |
|ii) Recurring ||Negligible |
|iii) Total || |
|iv) Total R&D expenditure as a Percentage of total turnover || |
2. Technology absorption adaptation and innovation.
(a) Efforts in brief made towards technology absorption adaptation and innovation -Nil
(b) Benefits derived as a result of the above efforts e.g. product improvementcost reduction product development import substitution etc. - Nil
(c) In case of imported technology (imported during the last 5 years reckoned from thebeginning of the financial year). Not applicable
|Technology Imported Year of Import ||Has technology been fully If not fully absorbed areas where this absorbed has not taken place reasons thereof and future plans of action. Not Applicable |
III. Foreign Exchange Earning and outgo
(a) Activities relating to exports initiatives taken to increase exports developmentof new export markets for products and services and export plans.
The company has been able to export its products for Rs 88.96 Crores (including saleunder global tender in India) during the year owing to lesser global tenders for deemedexport i.e. for supplies in India. However physical exports rose to Rs 4982.43 lacs from
Rs 746.89 lacs in 2014-15. Steps are being taken to secure more business for supply ofcompanys products to global markets. Efforts are also being made not only to retainexisting customers but to increase the export by introducing new buyers. The company hassuccessfully completed supply of first HTLS order received from South Africa and partquantity has been used by the ultimate client and line is energized successfully. Companyalso received orders for supplies to European USA Asian and African Countries. Effortsare being made for repeat order of HTLS conductor and to penetrate in South Americanmarket. Also efforts are made for incremental export of HTLS conductors to Europe Africaand American markets.
(b) Total Foreign Exchange used and earned (Rs In Lacs)
|Used ||: Rs 2882.09 |
|Earned ||: Rs 8910.06 |
FORM NO. AOC - 2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arms length basis.Not Applicable
2. Details of material contracts or arrangements or transactions at Arms lengthbasis.
|S. No. ||Name (s) of the related party & nature of relationship ||Nature of contracts/ arrangements/ transactions ||Duration of the contracts/ arrangements/ transactions ||Salient terms of the contracts or arrangements or transactions including the value if any ||Date of approval by the Board ||Amount paid as advances if any |
|1 ||Promain Ltd. (Promoter Group Company) ||Premises taken on rent ||April 2015 to March 2016 ||Promain Ltd. provided its premises on lease to the Company for office use ||April 30 2015 ||Nil |
|2 ||Mody Education Foundation ||Sale of capital goods ||Until cancellation as per mutual agreement ||Sale of old furniture as second hand furniture for their use ||April 30 2015 ||Nil |
|3 ||Hindusthan Specialty Chemicals Ltd. (Subsidiary Company) ||Sale of capital goods ||FY 2015-16 ||Sale of old car for the use of employee for official purposes ||April 30 2015 ||Nil |
|4 ||Mrs. Nirmala Bhuwania (Relative of MD/KMP) ||Premises taken on rent ||Until cancellation as per mutual agreement ||House taken on rent to be used as residence for Vice Chairman & Managing Director ||April 30 2015 ||Nil |
|5. ||Mrs. Sanchita Mody (Relative of Director) ||Office or place of profit ||As per contractual terms ||Appointment as Advisor- Corporate Planning ||April 30 2015 ||Nil |
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
|Place : New Delhi ||R. P. Mody |
|Date : May 23 2016 ||Chairman |
Particulars prescribed under Section 197(12) of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 PART- A
The ratio of the remuneration of each Director to the median employeesremuneration and such other details in terms of Section 197(12) of the Companies Act 2013read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year
Mr. Shyam Sunder Bhuwania 37.3:3.5
(ii) The percentage increase in remuneration of each director Chief FinancialOfficerCompany ChiefExecutive Secretary or Manager if any in the financialyear
The percentage increase in remuneration of each Whole-time Director Chief FinancialOfficerSecretary ranges between 12% to 57%.
(iii) The percentage increase in the median remuneration of employees in thefinancial year
The percentage increase in the median remuneration of employees in the financial yearis around 8%
(iv) The number of permanent employees on the rolls of company
The number of employees on permanent rolls of the company is 634.
(v) The explanation on the relationship between average increase in remuneration andcompany performance.
The Company follows prudent remuneration practices under the guidance of the Board andNomination and Remuneration Committee. The Companys approach to remuneration isintended to drive meritocracy within the framework of prudent risk management.Remuneration is linked to corporate performance business performance and individualperformance.
The Company has a judicious approach to compensation and does not use compensation asthe sole lever to attract and retain employees. Employee compensation takes into account amix of external market pay and internal equity. The total compensation is a prudent mix offixed pay and variable pay. The proportion of variable pay to total compensation is higherat senior levels and lower at junior levels.
The increase in remuneration is a function of factors outlined above. The performanceof the company has bearing on the quantum of variable pay declared for employees acrosslevels.
The decrease in Profit after Tax between FY2016 and FY2015 is 42.43% whereas theaverage increase in the remuneration of employees is around 8%.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company.
For FY 2016 the Key Managerial Personnel were paid around 119.50% of the Profit afterTax.
(vii) Variations in the market capitalisation of the Company price earnings ratioas at the closing date of the current financial year and previous financial year andpercentage increase or decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with the last public offer in case oflisted companies. Not Applicable
(viii) Average percentile increase already made in the salaries of employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration.
The average percentage increase made in the salaries of total employees other than theKey Managerial Personnel for FY 2015 is around 8% while the average increase in theremuneration of the Key Managerial Personnel is in the range of 12% to 57%. This incrementis in line with the factors outlined in point (v) above.
(ix) Comparison of remuneration of each of the Key Managerial Personnel against theperformance of the company.
The ratio of the remuneration of each KMP to the PAT of the company is given below:
|Company Secretary ||19.68% |
|CFO ||24.34% |
(x) The key parameters for any variable component of remuneration availed by thedirectors. Not Applicable
Performance linked variable pay is payable yearly on the basis of scientific evaluationof performance by the Board of Directors.
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year. - Not Applicable
(xii) Affirmation that the remuneration is as per the remuneration policy of thecompany.
Yes the remuneration paid to all Key Managerial Personnel was in accordance withremuneration policy adopted by the Company.
|Employee Name ||Designation & Nature of Duties ||Qualifi- cations ||Total Wok Ex- perience (Years) ||Date of Commence- ment of Employment ||Age (in yrs) ||Remuneration (in Rs) ||Previous Employment |
| || || || || || || ||Designation ||Name of the Company |
|A. EMPLOYED FOR FULL YEAR AND IN RECEIPT OF REMUNERATION FOR THE YEAR WHICH IN AGGREGATE WAS NOT LESS THAN RS. 6000000/- PER ANNUM || || || || || || || || |
|1 Mr. Shyam Sunder Bhuwania ||Vice Chairman & Managing Director CEO ||FCA LL.B ||45 years ||01-06-1973 ||71 ||11988000/- ||Administrative Officer ||Hindusthan Development Corporation Limited |
|2 Mr. Vivek Kohli ||Whole Time Director ||B.E Electrical ||35 years ||29-10-2012 ||60 ||8827980/- ||Chief Technology Officer ||Sterlite Technologies Ltd. |
|B EMPLOYED FOR PART OF THE YEAR AND IN RECEIPT OF REMUNERATION FOR THE YEAR WHICH IN AGGREGATE WAS NOT LESS THAN RS. 500000/- PER ANNUM || || || || || || || || |
|1. Mr. Anil Kumar Chandani ||Chief Financial Officer ||B.Com (Hons) FCA FCS & AICWA ||25 years ||01-02-2016 ||48 ||1582864/- ||Sr. V.P- Corporate Finance ||HSIL Limited |
|2. Mr. M S Jaiganesh ||CEO Real Estate ||MBA Marketing ||21 years ||14-03-2013 ||44 ||8929297/- ||National Head Marketing & Sales ||Experion Developers Private Limited |
Notes: he rules and1. Employmentoftheabovenamedofficials regulations of thecompany from time to time. are governed by
2. All above persons are/were full time employees of the Company.
3. None of the above employees is related to any Director of the Company.
4. None of the above employees is covered under Rule 5(2) (iii) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
5. Remuneration comprises salary allowances perquisites/taxable value of perquisitesetc.