Your Directors are pleased to present 26 Annual Report and the Company's auditedfinancial statement for the financial year ended March 31 2016.
The Company's financial performance for the year ended March 31 2016 is summarizedbelow:
|FINANCIAL RESULTS ||2015-16 ||2014-15 |
|Sales/Others receipts ||17613.08 ||22395.42 |
|Profit before depreciation and Taxation ||240.65 ||356.06 |
|Less: depreciation ||170.01 ||150.69 |
|Profit after depreciation ||70.64 ||205.37 |
|Less: Provision for Taxation || || |
|Current Year ||13.46 ||73.09 |
|Deferred Tax ||31.07 ||(5.73) |
|Previous Year Tax ||0.81 ||5.15 |
|Mat Credit Entitlement ||(13.46) ||- |
|Profit after Taxation ||38.76 ||132.86 |
|Add: Profit brought forward ||467.87 ||378.54 |
|Profit available for appropriation ||506.63 ||511.40 |
|Dividend & Tax on dividend ||43.33 ||43.53 |
|Surplus carried to Balance Sheet ||463.30 ||467.87 |
*Amounts are in Lacs.
COMPANY'S BUSINESS GROWTH AND PROSPECTS
The total income from operations (net of excise) for the current year has decreased toRs.17613.08 Lacs from Rs. 22395.42 Lacs in the previous year on this account the profitsafter tax has also declined from Rs. 132.86 Lacs to Rs. 38.76 Lacs this year.
Your Directors have recommended a dividend of 10% on share of face value of Rs. 10 eachi.e. Re. 1/- per share for the financial year ended on March 31 2016.
TRANSFER TO RESERVES
Your Directors have not recommended any amount to transfer to general reserve.
CHANGES TO AUTHORISED SHARE CAPITAL AND BONUS ISSUE
The Board of the Company has in its meeting held on June 24 2016 approved theproposal for:
a) increase in the authorised share capital from Rs.5 Crore to Rs 6 Crore.
b) Issue of 1 bonus share for every 2 shares held by the existing shareholders of theCompany.
The said proposals are subject to approval of the Members at the ensuing Annual GeneralMeeting of the Company.
Your Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rule 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees coved under the provisions of Section186 of the Companies Act 2013.
The details of the investments made by the Company are given in the notes to thefinancial statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website at thelink: http://www.hisarmetal.com
Your Directors draw attention of the members to Note 27 to the financial statementwhich sets out related party disclosures.
INTERNAL FINANCIAL CONTROL
Your Company has adequate internal control systems commensurate with its size andoperations although not documented. The Company regularly gets its accounts audited frominternal auditor.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the Company's website at the link:http://www.hisarmetal.com.
RISK MANAGEMENT POLICY
Your Directors have constituted a Risk Management Committee which has been entrustedwith the responsibility to assist the Board in:
a) Oversee and implementing the Company's risk management and internal control systems;and
b) Overseeing that all the risks that the organization faces such as strategicfinancial operational regulatory and other risks have been identified and assessed andthere is an adequate risk management infrastructure in place capable of addressing thoserisks. A Risk Management Policy was reviewed and approved by the Board on recommendationof the Committee.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided in AnnexureA to this Report.
NEW MANUFACURING PLANT
New manufacturing plant of stainless steel tube & pipes of the Company hascommenced commercial production w.e.f. May 02 2016. The new plant is situated at Hisar(Haryana) and its total manufacturing capacity is 900 MT p.a.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with Section 134 (5) of Companies Act 2013 the Board of Directorsconfirms that:
a) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
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 and loss 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.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. M.P. Jindal Director of the Company retire by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for re-appointment.
During the year under review the members approved the re-appointment of Mrs. AnubhaTayal as a Non-Executive Non-Independent Director who is liable to retire by rotation.
During the year under review due to personal reasons Mr. Rahul Dev TayalNon-Executive Non-Independent Director has resigned from the Company. The Board placed onrecord its appreciation for the valuable services rendered by Mr. Rahul Dav Tayal duringhis tenure with the Company.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. None of the Independent Directors are due for re-appointment.
The Company has devised a policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which includes criteria for performanceevaluation of the Non-Executive Directors and Executive Directors. The evaluation of allthe Directors and the Board as whole was conducted based on the criteria and frameworkadopted by the Board. The evaluation process has been explained in the CorporateGovernance Report section in this Annual Report.
The policy of the Company on Directors' appointment and remuneration adopted by theBoard is appended as Annexure-B to the Boards' report.
The Audit Committee consists of three Directors out of which two are the IndependentDirectors namely Mr. Shital Parshad Jain (Chairman) Mr. Sajjan Singh and Mrs. AnubhaTayal as other members. All the recommendations made by the Audit Committee were acceptedby the Board.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year. For further detailsplease refer report on Corporate Governance in this Annual Report.
At the AGM held on September 24 2014 M/s. Ram Sanjay & Company CharteredAccountants were appointed as Statutory Auditor of the Company to hold office till theconclusion of the twenty seventh AGM to be held in the financial year 2017-18.
In terms of the first proviso to Section 139(1) of the Companies Act 2013 theappointment of the Auditors shall be placed for ratification at every AGM. Accordinglythe appointment of M/s. Ram Sanjay & Company Chartered Accountants as StatutoryAuditors of the Company is placed for ratification by the shareholders. In this regardsthe Company has received a certificate from the Auditors to the effect that if they arereappointed it would be in accordance with the provisions of Section 141 of the CompaniesAct 2013.
The Auditors' Report does not contain any qualification reservation or adverse remark.
M/s. Rajesh Garg & Company Practicing Company Secretary was appointed by theBoard as Secretarial Auditor to conduct the Secretarial Audit of the Company for thefinancial year 2015-16. The Secretarial Audit Report for financial year 2015-16 forms partof the Annual Report as Annexure-C to the Board's report. The Secretarial AuditReport does not contain any qualification reservation or adverse remark.
The Board has appointed M/s. Rajesh Garg & Company Practicing Company Secretaryas Secretarial Auditor of the Company for the financial year 2016-17.
The Board has appointed M/s. Naveen Gupta & Company Cost Accountants having FirmRegistration no. 100920 with the Institute of Cost Accountants of India as Cost Auditorof the Company for conducting Cost Audit of the Company for the financial year 2016-17.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure D tothis Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
There was no such employee of the Company who is covered under provisions of Section197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Annexure E tothis Report.
Your Company has complied with all the mandatory provisions of corporate governance ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separatereport on Corporate Governance along-with Auditors' certificate in this regard forms partof the Annual Report as Annexure F to the Board's report.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section forms part of the Annual Report as Annexure Gto the Board's report.
COMPLIANCE OF GUIDELINES OF SEBI/STOCK EXCHANGE
We have duly complied with all the guidelines issued by SEBI/Stock Exchange.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OFTHE FINANCIAL YEAR AND THE DATE OF THE REPORT
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and date of this report.
Industrial relations continued to be cordial during the year under review.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. The Company has not constituted Employees' Stock Option Scheme (ESOS) and not issueany share to its employees under the said Scheme or any other scheme (including sweatequity shares) during the financial year.
3. Company has not any subsidiary Company. Neither the Managing Director nor theWhole-time Director of the Company receive any remuneration or commission from any of itssubsidiaries.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
5. The Company does not require to constitute Corporate Social Responsibility andGovernance Committee hence no CSR Committee was constituted during the financial year.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The Board of Directors thank and deeply acknowledge the co-operation assistance andsupport provided by all the stakeholders viz. workers shareholders bankers customersdealers vendors Government and Regulatory agencies.
| ||For and on behalf of the Board of Directors |
| ||Sd/- ||Sd/- |
|Date: June 24 2016 ||(Abhiram Tayal) ||(Karan Dev Tayal) |
|Place: Hisar ||Managing Director ||Director |
Pursuant to Companies (Accounts) Rules 2014
A). CONSERVATION OF ENERGY
The following measures are employed by the Company for conservation of energy:-
a) The steps taken on conservation of energy:
1. Installation of LED lights to reduce power consumptions.
2. To optimise the combustion of annealing furnaces the atmospheric air is pre-heatedby flue gases at 220C to reduce fuel consumption.
3. Using the Operating pumps near the best efficiency point for saving energy.
4. By maintaining power factor near to 1.00 to save energy.
5. Installation of variable frequency drive at bright annealing lines and slittingmachines resulted energy cost saving and significant reduction in DC motor maintenancecost.
6. Timer provided for auto controlling of area and plant lighting.
7. Installed 2x25KW frequency drive in place of DOL starters at rolling mills screwdown for proper utilisation of screw speed resulting saving of energy consumption.
8. Power purchases through IEX.
9. At plant area used roof extractors instead of exhaust fans for air circulationsaving electrical energy.
b) The steps taken by the Company for utilising alternate sources of energy:
1. Asbester sheets replaced with the polycarbonate transparent sheets at differentintervals in order to achieve better illumination during day time and hence significantreduction in power consumption by switching off shed lights during day time at the plant.
2. Carbon Black Feed Stock (CBFS) used in furnace as fuel against Light Diesel Oil(LDO) to reduce the cost of fuel. c) The capital investment on energy conservationequipments:
1. Day light linked control system to be installed on the street lights to shut off thestreetlights automatically.
2. Installing localised capacitor can increase the Power Factor of the motors &improve the voltage profile of the LT distribution & decrease the distribution lossesin the cable networks.
3. More LED lights will be installed in different areas of plant to reduce powerconsumption.
B). TECHNOLOGY ABSORPTION
The Company has made the below mentioned efforts for the technology absorption in aneffective manner:
1. During the year the company has installed a BA (Bright Annealing) Line :
2. On account of installation of BA Line the air pollution level has gone down.
3. In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year) following information may be furnished
|a) Technology imported ||: ||From China |
|b) Year of import ||: ||2015-16 |
|c) Has technology fully absorbed ||: ||Yes |
|d) If not fully absorbed areas where this has not taken place reasons therefore and future plans of action ||: ||Not Applicable |
|4. Expenditure on Research and development ||: ||NIL |
C). FOREIGN EXCHANGE EARNINGS AND OUTGO
|Particulars ||For the year ended on March 31 2016 ||For the year ended on March 31 2015 |
|Earnings ||21236180 ||30089762 |
|Outgo ||24891121 ||48025852 |
Nomination and Remuneration Policy
The Company considers human resources as its invaluable assets. This policy onnomination and remuneration of Directors Key Managerial Personnel (KMPs) and otheremployees has been formulated in terms of the provision of the Companies Act 2013 and theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 to pay equitableremuneration to the Directors KMPs and other employees of the Company and to harmonizethe aspirations of human resources consistent with the goals of the Company.
Constitution of the Nomination and Remuneration Committee:
The Board has constituted the Nomination and Remuneration Committee of the Board as perthe requirements under the Companies Act 2013 ('the Act'). The Board has authority toreconstitute this Committee from time to time.
Meaning of the terms used in this Policy:
a) "Board" means the Board of Directors of the Company.
b) "Directors" means the Directors of the Company.
c) "The Committee" means the Nomination and Remuneration Committee of theCompany as constituted or reconstituted by the Board in accordance with the Act andapplicable other rules and/or regulations.
d) "The Company" means Hisar Metal Industries Limited.
e) "Independent Director" means a Director referred to in Section 149(6)of the Companies Act 2013 and rules.
f) "Key Managerial Personnel" (KMP) means key managerial personnel asdefined under Section 2(51) of the Companies Act 2013 and rules.
g) "Senior Management" means the personnel of the Company who are membersof its core management team excluding Board comprising all members of management one levelbelow the Executive Directors including the functional heads.
Terms that have not been defined in this policy shall have the same meaning assigned tothem in the Companies Act 2013 and/or any other SEBI regulation(s) as amended from timeto time.
Objectives and purpose of the policy:
The objectives and purpose of this policy are:
a) To formulate the criteria for determining qualifications competencies positiveattributes and independence for the appointment of a Director (Executive/Non-Executive)senior management personnel and recommend to the Board policies relating to theremuneration of the Directors KMPs and other employees.
b) To formulate the criteria for evaluation of performance of all the Directors aswell as KMPs and senior management.
c) To provide them reward linked directly to their effort performance dedication andachievement relating to the Company's operations.
d) To retain motivate and promote talent and to ensure long term sustainability oftalented persons and create competitive advantage.
This policy is divided into three parts:
Part-A covers the matters to be dealt with and recommended by the Committee to theBoard; Part-B covers the appointment and nomination; and Part-C covers remuneration andperquisites etc.
This policy shall be included in the Report of the Board of Directors.
Matters to be dealt with perused and recommended to the Board by the Committee:
The following matters shall be dealt with by the Committee:
Size and composition of the Board:
The Committee periodically reviewing the size and composition of the Board to ensurethat it is structured to make appropriate decisions with a verity of perspectives andskill in the best interests of the Company as a whole.
Formulate the criteria determining qualifications positive attributes and independenceof a Director and recommending candidates to the Board when circumstances warrant theappointment of a new Director having regards to the range of skills experience andexpertise on the Board.
Establishing and reviewing Board and senior executive succession plans to ensure andmaintain an appropriate balance of skill experience and expertise on the Board and seniormanagement.
Evaluation of performance:
Make recommendations to the Board on appropriate performance criteria for theDirectors.
Formulate the criteria and framework for evaluation of performance of every Director onthe Board of the Company.
Identify ongoing training and education programs for the Board to ensure thatNon-Executive Directors are provided with adequate information regarding the options ofthe business the industry and their legal responsibilities and duties.
Remuneration framework and policies:
The Committee is responsible for reviewing and making recommendations to the Board on:
a) the remuneration of the Managing Director Whole-Time Directors and KMPs;
b) the total level of remuneration of Non-Executive Directors and for individualremuneration for Non-Executive Directors and the Chairman including any additional feespayable for membership of Board Committees;
c) the remuneration policies for all employees including KMPs senior management andother employees including basic pay incentive payments equity awards retirement rightsand service contacts having regards to the need to:
(i) attract and motivate talent to pursue the Company's long-term growth;
(ii) demonstrate a clear relationship between executive compensation and performance;and
(iii) be reasonable and fair having regards to the best governance practices and legalrequirements.
d) the Company's superannuation arrangements and compliance with relevant laws andregulations in relation to superannuation arrangements; and
e) the Company's equity-bases incentive schemes including a consideration ofperformance thresholds and regulatory and market requirements.
Policy for appointment and removal of Directors KMPs and senior management:
Appointment criteria and qualifications:
The criteria for the appointment of Directors KMPs and senior management are asfollow:
The Committee shall indentify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director KMP or seniormanagement level and recommend to the Board his/her appointment.
A person to be appointed as Director KMP or in senior management should possesadequate qualification expertise and experience for the position he/she is considered forappointment to. The Committee has discretion to decide whether qualification expertiseand experience possessed by a person is sufficient/satisfactory for the concernedposition.
A whole time KMP of the Company shall not hold office in more than one Companyexcept in its subsidiary Company at the same. However a whole-time KMP can be appointedas a Director in any Company with the permission of the Board of the Company.
Managing Director/ Whole-Time Director:
The Company shall appoint or re-appoint any person as its Managing Director orWhole-Time Director for a term not exceeding five years at a time. No re-appointment shallbe made earlier than one year before the expiry of the term.
An Independent Director shall hold office for a term of up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
No Independent Director shall hold office for more than two consecutive terms but suchIndependent Director shall be eligible for appointment after the expiration of three yearsof ceasing to become an Independent Director provided that he/she shall not during thesaid period of three years be appointed in or be associated with the Company in any othercapacity either directly or indirectly.
At the time of appointment of an Independent Director it should be ensured that thenumber of Boards on which such Independent Director serves is restricted to seven listedCompanies as an Independent Director and three listed Companies as an Independent Directorin case such person is serving as a Whole-Time (Executive) Director of a listed Company.
Due to any of the reasons for disqualification mentioned in the Companies Act 2013rules made thereunder or under any other applicable Act rules and regulations theCommittee may recommend to the Board with reasons recorded in writing the removal of aDirector or KMP subject to the provisions and compliance of the said Act rules andregulations.
The Whole-Time Director KMP and senior management personnel shall retire as per theapplicable provisions of the Companies Act 2013 and the prevailing policy of the Company.The Board will have the discretion to retain the Whole-Time Director KMP and seniormanagement personnel in the same position/ remuneration or otherwise even after attainingthe retirement age for the benefit of the Company.
Policy relating to the remuneration of Director KMPs and other employees:
a) The remuneration/compensation/commission to Directors will be determined by theCommittee and recommended to the Board for approval.
b) The remuneration and commission to be paid to the Managing Director shall be inaccordance with the provisions of the Companies Act 2013 and the rules made thereunder.
c) Increments to the existing remuneration/compensation structure may be recommended bythe Committee to the Board which should be within the limits approved by the shareholdersin the case of Managing Director.
d) Where any insurance is taken by the Company on behalf of its Managing DirectorChief Financial Officer the Company Secretary and any other employees for indemnifyingthem against any liability the premium paid on such insurance shall not be treated aspart of the remuneration payable to any such personnel. Provided that if such person isproved to be guilty the premium paid on such insurance shall be treated as part of theremuneration.
Remuneration of KMPs and other employees:
KMPs and other employees receive basic salary and other perquisites. The perquisitesinclude other allowances. The total salary includes fixed and variable components.
The Company's policy is that the total fixed salary should be fair and reasonable aftertaking into account the following factors:
The scope of duties the role and nature of responsibilities;
The level of skill knowledge and experience of individual;
Core performance requirements and expectations of individuals;
The Company's performance and strategy;
Legal and industrial obligations.
The table below depicts the standard components of remuneration package:
| ||Fixed Component |
|Basic Salary ||Allowances ||Superannuation |
Remuneration to Non-Executive / Independent Directors:
The remuneration payable to each Non-Executive Director is based on the remunerationstructure as determined by the Board depending on individual contribution the Company'sperformance and the provisions of the Companies Act 2013 and the rules made there under.
2. Stock option:
Independent Directors shall not be entitled to any stock option of the Company.
This policy is framed based on the provisions of the Companies Act 2013 and rulesthereunder and requirements of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
In case of any subsequent changes in the provisions of the Companies Act 2013 or anyother regulation which makes any of the provisions in the policy inconsistent with the Actor regulations the provisions of the Act or regulations would prevail over the policy.