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Hindustan Wires Ltd.

BSE: 504713 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE075C01010
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VOLUME 3
52-Week high 58.00
52-Week low 27.00
P/E 24.67
Mkt Cap.(Rs cr) 51
Buy Price 0.00
Buy Qty 0.00
Sell Price 52.30
Sell Qty 68.00
OPEN 52.35
CLOSE 49.90
VOLUME 3
52-Week high 58.00
52-Week low 27.00
P/E 24.67
Mkt Cap.(Rs cr) 51
Buy Price 0.00
Buy Qty 0.00
Sell Price 52.30
Sell Qty 68.00

Hindustan Wires Ltd. (HINDWIRES) - Director Report

Company director report

TO THE MEMBERS

Your Directors present their Annual Report together with Audited Financial Statementsof the Company for the year ended on 31st March 2016

FINANCIAL RESULTS

The Results are summarised below: .

(Rs. In Lacs)

Particulars Year ended 31.03.2016 Year ended 31.03.2015
Revenue from Operations (excluding excise duty) 635.16 667.50
Other income & provisions no longer required written back 186.46 97.25
Total Revenue 821.62 764.75
Expenses 551.42 530.19
Profit/(Loss) before exceptional items depreciation & tax 270.20 234.56
Exceptional Income (Expenses) 300.00 (17.98)
Profit/(Loss) before Depreciation & Tax 570.20 216.58
Depreciation 46.02 46.14
Provision for income tax (MAT) 23.35 -
MAT Credit Entitlement (23.35) -
Net Profit/(Loss) after tax 524.18 170.44
Net Profit/(Loss) Carried to Balance Sheet 524.18 170.44

OPERATIONS & GENERAL REVIEW

During the year the revenue from operations including income from financing activitiesfor the current year is Rs. 635.16 Lacs as against Rs. 667.50 Lacs in the previous year.During the year due to increased competition in the business of Gas re-filling stationgross sales were lower at Rs. 496.15 Lacs as against Rs. 570.77 Lacs in the previous year.Further during the year the Company has earned interest and gain on sale of investmentsamounting to Rs. 168.94 Lacs as against Rs. 131.18 Lacs in the previous year from itsfinancing activities. In addition the Company has also earned other income of Rs. 186.46Lacs as against Rs. 97.25 Lacs in the preceding year mainly on account of receipt of RentStorage charges and income from providing Business Support Services etc. The Companyexpects to improve its performance in the Current year.

The net profit carried to Balance Sheet is Rs. 524.18 Lacs and the net accumulated lossat the year end is Rs. 483.43 Lacs which is being carried forward.

DIVIDEND

In view of accumulated losses your Directors are not in a position to recommend anydividend for the year ended 31st March 2016.

STATE OF COMPANY AFFAIR

During the year the Company carried on its activities in manufacturing and trading inIndustrial Gases and also undertaken financing and investment activities. The Company alsoearned income from Rent and from providing Business Support Services & ConsultancyServices. The Company has well equipped re-filling station to process and fill differenttypes of gases in cylinders and all safety measures are in place. The net profit duringthe year is Rs. 524.18 Lacs as against previous year profit of Rs. 170.44 Lacs. The netprofit carried to balance sheet is Rs. 524.18 Lacs and the net accumulated loss at theyear end is Rs. 483.43 Lacs. The Company expects to further improve its performance in thecoming years.

There has been no material changes and commitments 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.

There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and its future operations.

PUBLIC DEPOSITS

The Company has not accepted any Public Deposits covered under chapter V of theCompanies Act 2013.

TRADING IN SHARES OF THE COMPANY

During the whole year the equity script of the Company was traded on BSE. Howeverw.e.f. 31st March 2016 BSE suspended the script of the Company for trading assurveillance measure. The matter is being pursued by the Company for revocation ofsuspension and the Company expects that the trading in the equity script of the Companywill be resumed shortly.

DEPOSITORY SERVICES FOR EQUITY SHAREHOLDERS OF THE COMPANY

The Central Depository Services (India) LTD. (CDSL) and National Securities DepositoryLimited (NSDL) have accepted the Equity Shares of the Company for DEMAT vide ISIN No.INE075C01010 hence the members of the Company can avail of the Depository Services.

REGISTRATION WITH BIFR

The net worth of the Company became positive and consequently the Company wasDe-registered from BIFR vide their order dated 22nd July 2015.

DIRECTORS & KEY MANAGERIAL PERSONNEL

At the Annual General Meeting of the Company held on 23rd Sep-2015 themembers had approved the appointment of Mrs. Pooja Jhaver (DIN 02109201) as Director ofthe Company liable to retire by rotation.

Shri U.S. Bhartia (DIN 00063091) a Director of Company retires by rotation at theforthcoming Annual General Meeting and being eligible offer himself for re-appointment.

No Key Managerial Person has been appointed or has retired or resigned during the year.However the Board has considered & approved the appointment of Chief Financial Officerin the Board Meeting held on 24th May 2016.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors Mr. Krishna Murari Lai & Mr. Jagdish Saran Baijal havegiven their declaration that they continue to meet the criteria of Independence as laiddown U/s 149 (6) of the Companies Act 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance of Section 134 (5) of the Companies Act 2013 your Directors on thebasis of representations of the management confirm that:

i) In the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards have been followed;

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 or loss of the Company for the year under review;

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The directors have prepared the annual accounts on a ‘going concern' basis;and

v) The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;

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

MEETINGS OF THE BOARD

During the financial year ended 31st March 2016 Six Board Meetings were held i.e. on6th April 2015 22nd May 2015 11th Aug 2015 04th Nov 2015 9th Feb 2016 and 4thMarch 2016.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors oversees the financial statements andfinancial reporting before submission to the Board on quarterly and yearly basis. TheAudit Committee is responsible for the recommendation of the appointment remunerationperformance and oversight of the work of the Internal and Statutory Auditors. It reviewsthe reports of the internal auditors and statutory auditors.

At present there are Four members of the Audit Committee out of which two areIndependent Directors.

The composition of the Audit Committee is given below:

Name of the Members Category
Mr. K.M Lai Chairman-Independent- Non-executive
Mr. J.S. Baijal Independent- Non-executive
Mr. U.S. Bhartia Non- Executive
Mr. G.R. Goenka Non- Executive

NOMINATION & REMUNERATION COMMITTEE (NRC)

The Company is having a Nomination & Remuneration Committee which was constitutedpursuant to the provisions of Section 178 of the Companies Act 2013. The functions ofthis Committee include identification of persons who are qualified to become directors orwho may be appointed in senior management formulation of criteria for determiningqualifications positive attributes independence recommendations of their appointmentsto the Board evaluation of every director’s performance formulation of RemunerationPolicy to include recommendation of remuneration for directors key managerial personneland senior management.

At present there are Four members of the Nomination & Remuneration Committee(NRC) in which two are Independent Directors. The composition of the NRC is given below:

Name of the Members Category
Mr. K.M Lai Chairman-Independent- Non-executive
Mr. J.S. Baijal Independent- Non-executive
Mr. U.S. Bhartia Non- Executive
Mr. G.R. Goenka Non- Executive

The Policy of the Company relating to the remuneration for the Directors KeyManagerial Personnel and other employees is annexed as Annexure A.

PARTICULARS OF EMPLOYEES & REMUNERATION

Disclosures required under Section 197(12) of the Companies Act 2013 read with Rule 5of the Companies (Appointment & - Remuneration of Managerial Personnel) Rules 2014are annexed in Annexure B.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Committee comprises of two Directors i.e. Shri G.R. Goenka (Non-Executive Director)and Shri R.K. Gupta (Executive Director) to look after the redressel of shareholders andinvestors complaints. To expedite the process of share transfer the Board has delegatedthe power of share transfer to Share Transfer Committee consisting of Shri G.R. Goenka andShri S.K. Sharma (Manager Finance & Accounts).

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out theannual performance evaluation of its own performance the Directors individually includingthe Chairman of the Board as well as the evaluation of the Committees of the Board.Directors were evaluated on various aspects including inter-alia degree of fulfilment ofkey responsibilities contribution at Board & Committee Meetings and guidance &support to the Management outside Board & Committee Meetings. The performanceevaluation of the Independent Directors was also carried out by the entire Board.

The result of the evaluation done by Independent Directors was reported to the Chairmanof the Board. It was reported that the performance evaluation of the Board &Committee’s was satisfactory. The Chairman of the Board provided feedback to theDirectors on an individual basis as appropriate. The Directors expressed theirsatisfaction with the evaluation process.

INTERNAL FINANCIAL CONTROL SYSTEMS & RISK MANAGEMENT

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope of work includes review of process forsafeguarding the assets of the Company review of operational efficiency effectiveness ofsystems and processes and assessing the internal control strengths in all areas includingfor fraud prevention.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provisions of Section 135 of the Companies Act 2013 with respect to CSR were notapplicable to the Company as the Company’s net worth or turnover or average netprofits are below the threshold limit.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO

The information required under section 134(3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed hereto andforms part of this Report- Annexure C.

AUDITORS’ REPORT

The observation made in the Auditors’ Report read together with relevant notesthereon are self explanatory and hence do not call for any further comments under Section134 of the Companies Act 2013.

AUDITORS

M/s K.N Gutgutia & Co. Chartered Accountants were appointed for a period of 3years in the 54th AGM of the Company which was held on 16th September 2014 and areeligible to continue as Statutory Auditors of the Company subject to ratification bymembers at the forthcoming Annual General Meeting at a remuneration to be decided by themembers. They have furnished a certificate confirming that if re-appointed theirre-appointment will be in accordance with Section 139 read with Section 141 of theCompanies Act 2013. The members are requested to consider ratification of theircontinuity of appointment as Auditors of the Company and to authorise the Board to fixtheir remuneration in the forthcoming AGM of the Company.

SECRETARIAL AUDIT

The Board had appointed Mrs. Smita Sharma Practising Company Secretary to carry outsecretarial audit Pursuant to provisions of section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

The Secretarial Audit report is annexed herewith as "Annexure D"

SECRETARIAL AUDIT REPORT

As required under section 204 (1) of the Companies Act 2013 the Company Secretary inPractice has submitted a Secretarial Audit Report. The observation made in the report hasbeen taken care of by appointing Chief Financing Officer in the meeting of the Board ofDirectors held on 24-05-2016.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure E".

BUSINESS RISK MANAGEMENT

Pursuant to section 134 (3) (n) of the Companies Act 2013 the company has constituteda Risk Management Committee. The ' Company has identified the potential risks and threatsand the Company has taken effective steps to mitigate the same.

VIGIL MECHANISM

Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013the Company has a Whistle Blower Policy which provides for proper reporting systems forany unfair practice and adequate safe guard against victimisation of persons who use suchmechanism.

PREVENTION OF INSIDER TRADING

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations 2015the Company has adopted a Code of Conduct for Prevention of Insider Trading with a view toregulate trading in securities by the Directors and designated employees of the Company.The Code requires pre-clearance for dealing in the Company's shares and prohibits thepurchase or sale of Company shares by the Directors and the designated employees while inpossession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.

CORPORATE GOVERNANCE

The Regulation 15(2) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 relating to Corporate Governance is not applicable to your Company sincethe Company’s paid-up equity capital and net worth is below the threshold limit andas such no report on Corporate Governance is being submitted with this report. However theCompany has substantially complied with the norms of Corporate Governance.

POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

The Company has a policy of zero tolerance for sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under.

The Company has not received any complaint of Sexual Harassment during the financialyear 2015-16.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013

The Company in its usual course of business has given short term loans and has madeinvestments as per details given below:

Particulars of Transaction Amount (Rs. In Lacs)
Short Term Loan Given to Kashipur Holdings Ltd. (Loan received back during the year) 500.00
Short term loan given to IGL Infrastructure Pvt. Ltd. 1515.00
Short Term Loan given to Kashipur Infrastructure Freight Terminal Pvt. Ltd. (received back during the year) 100.00
Purchase of Equity Shares of India Glycols Ltd. for investment 57.53
Purchase of equity shares of IGL Infrastructure Pvt. Ltd. for Investment (sold during the year) 57.00

The Short Term loans given to Kashipur Holdings Ltd. would have been utilized in itsinvestment and lending activities and the short term loan given to IGL Infrastructure Pvt.Ltd. and Kashipur Infrastructure Freight Terminal Pvt. Ltd. would have been utilized intheir business of infrastructure activities.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has during the year entered into contracts or arrangements with relatedparties in the usual course of business which are at competitive terms and are as such atarm’s length. The details of such contracts are given in "Annexure F" inForm No. AOC-2. There was no contract or arrangement with the related party which was notat arm's length. All the Related Party Transactions are in the interest of the Companywhich are necessary for furtherance of the objectives of the Company and to also smoothlyrun its operations of Industrial Gases and other business segments.

Related Party Disclosures as required under regulation 34(3) read with para‘A’ of the schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is given in "Annexure G".

MANAGEMENT DISCUSSION AND ANALYSIS

The Management discussion and analysis report as required under Listing Regulations isannexed as "Annexure H". ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the assistance and co-operationreceived from business associates Govt. Authorities Banks and Members of the Company andlook forward to their continued support. ‘

Your Directors also wish to place on record their appreciation for the dedication andcommitment of the employees at all levels of the Company which continues to be ourstrength.

For and on behalf of the board of Directors

R.K.Gupta G.R.Goenka
Executive Director Director
DIN 00423525 DIN 00133700
Place: Noida
Date: 24th May 2016

Annexure A to Directors’ Report

Policy pursuant to provisions of Section 178 of the Companies Act 2013 onappointment of Directors Key Managerial Personnel and Senior Management and theirremuneration. This Policy inter-alia includes:

1. Criteria of selection

In case of appointment of Independent Directors the Nomination and RemunerationCommittee shall satisfy itself with regard to the independent nature of the Directorsvis-a-vis the Company so as to enable the Independent Director to discharge its functionand duties effectively. The Independent Director should meet the criteria of Independencegiven in the Act.

Non Executive Directors Whole Time Directors and KMP’s are selected on the basisof experience in the field of business management finance or technical expertise.

To identify individuals having potential for appointment as Key Managerial Personneland for other Senior Management positions.

At the time of appointment specific requirements for the position including expertknowledge expected is communicated to the appointee.

To maintain an updated succession plan of the Board of Directors and Senior ManagementEmployees

The Nomination and Remuneration Committee shall ensure that the candidate identifiedfor appointment as a Director is not disqualified for appointment under Section 164 of theCompanies Act 2013.

2. Remuneration Policy: The key factors considered in formulating the policy areas under:

Relationship of Remuneration to performance is clear to attract retain and motivatethe employees.

The remuneration to Whole Time Directors Key Managerial Personnel and SeniorManagement should involve a balance between fixed and incentive pay reflecting short &long term performance objectives which are appropriate to the working of the Company andits goals.

The Non-Executive Directors shall be entitled to receive remuneration by way of sittingfees for each meeting of the Board or Committee of the Board attended by them or such sumas may be approved by the Board of Directors within the overall limits prescribed underthe Companies Act 2013 and The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. In addition Directors shall be entitled to receive reimbursementof travelling & conveyance expenses for participation in the Board / Committeemeetings.

ANNEXURE B to Directors’ Report

Disclosure about employees as required under Companies (Appointment and Remuneration ofManagerial Personnel) Rules. 2014:

(I) Particulars of Employees pursuant to section 134(3)(q) of the Companies Act 2013read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014

Requirements of Rule 5(1) Details
(i) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year; Mr. R.K. Gupta is the only Whole Time Director designated as Executive Director. The median ratio is 1:35.
(ii) the percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; 10%
(iii) the percentage increase in the median remuneration of employees in the financial year; 10-12%
(iv) the number of permanent employees on the rolls of company; 38 employees of all categories as on 31.03.2016
(v) the explanation on the relationship between average increase in remuneration and company performance; During the financial year increase in remuneration was given considering the inflation in consumer goods prices and also due to revision in the minimum wages and salaries by Government of Haryana
(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the company; There was increase in the remuneration of Executive Director by 10%. The net profit of the Company for the year 2015-16 is of Rs. 524.18 Lacs whereas the net profit in the year 2014-15 was Rs. 170.44 lacs.
(vii) variations in the market capitalisation of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which The market capitalisation of the Company as on 31.03.2016 was Rs. 34.37 crores as against Rs. 47.14 crores as on 31.03.2015 i.e. decrease of 27% during the year. Price earning ratio as on 31/03/2016 was 15.56 and price earning ratio as on 31/03/2015 was 28.23.
the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year; The last public offer for the shares of the Company was an offer for sale made by the Promoter(s) in March 2015 for 1600000 equity shares of Rs. 10/- each at a floor price of Rs. 45/- per share. The market quotation of equity share of the Company as on 30.03.2016 was Rs. 35/- per share at BSE Ltd representing decrease of 22.22% over the period.
(viii) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Average increase in remuneration of employees was 8-10% and increase in Managerial remuneration i.e. Whole Time Director was 10%. There are no exceptional circumstances for increase in managerial remuneration
(ix) comparison of the each remuneration of the Key Managerial Personnel against the performance of the company; Increase in the Executive Director’s remuneration is around 10% whereas the net profit of the Company increased from Rs. 170.44 lacs to Rs. 224.18 lacs (excluding exceptional Income)
(x) The key parameters for any variable component of remuneration availed by the directors; NIL
(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year; and NIL
(xii) Affirmation that the remuneration is as per the remuneration policy of the Company. It is affirmed that the remuneration of Key Managerial Personnel Directors and other employees are as per the remuneration policy of the Company.

(II) None of the Company’s employees has drawn salary more than Rs. 60 Lacs perannum if employed throughout the year and more than Rs. FIVE Lacs per month if employedfor the part of the year. None of the Company’s employees by himself or along withhis spouse and dependent children holds 2% or more equity shares of the Company anddrawing remuneration in excess of remuneration of the Whole Time Director.

Annexure C to Directors’ Report

Information as per Section 134(3) (m) read with Rule 8(3) of the Companies (Accounts)Rules 2014 and forming part of the Directors’ Report for the year ended on 31stMarch 2016

CONSERVATION OF ENERGY

(a) The following energy conservation steps were practised during the year whereverrequired.

(i) Putting up of LED lamps in place of conventional bulbs and tubes.

(ii) Providing automatic shut off twilight switch for lighting in and around factorypremises and use of more transparent sheets for daytime lighting.

(iii) Providing soft starters at electrical control panels which give a saving in powerconsumption.

(iv) Shutting down all electrical machineries and appliances when not in use to avoidunnecessary waste of energy.

(b) The Company could not take any steps for utilising alternate sources of energy.

(c) Capital investment on Energy Conservation Equipments : No investment was made or isproposed since the consumption of Energy is not significant.

TECHNOLOGY ABSORPTION

i) Efforts made in technology absorption: No technology was taken hence NotApplicable.

ii) Benefits derived like product improvement cost reduction product development orimport substitutions : NIL

iii) Technology absorption and Adaptation : Technologies imported during the last 3years : NIL

iv) Research and Development : No specific research and development work was taken up.

FOREIGN EXCHANGE EARNINGS & OUTGO

During the year the Company’s export earnings are NIL. The total foreign exchangeearned/utilised - Nil.