Hitech Corporation Ltd.
|BSE: 526217||Sector: Industrials|
|NSE: HITECHCORP||ISIN Code: INE120D01012|
|BSE 15:53 | 21 Mar||144.55||
|NSE 15:31 | 21 Mar||146.05||
|Mkt Cap.(Rs cr)||248|
|Mkt Cap.(Rs cr)||248.34|
Hitech Corporation Ltd. (HITECHCORP) - Director Report
Company director report
Your Directors have pleasure in presenting the Twenty Sixth Annual Report together withthe Audited Financial Statements for the Financial Year ended 31st March 2017.
The performance of the Company for the financial year ended 31st March 2017is summarized below:
OVERVIEW OF FINANCIAL PERFORMANCE
Operating revenue reduced to ' 401 crores from ' 431 crores of previous year largely onaccount of Rohtak unit not operating during the year due to fire occurred last year andrebuilding activity was in progress. Profit before tax reduced to ' 15.95 croresconsequent to reduction in sales and continuing fixed overheads of Rohtak plant. Profitafter tax reduced to ' 11.84 crores from ' 14.12 crores.
COMMENCEMENT OF OPERATIONS AT ROHTAK
The Rebuilding of factory at Rohtak was completed during the year and the operationresumed in March 2017.
The Paid up Share Capital of the Company as on 31st March 2017 is as under :
There was no change in the Share Capital of the Company during the financial year underreview.
Your Directors are pleased to recommend dividend for approval of the members at theensuing Annual General Meeting as under:
On 9% Non-Convertible Redeemable Cumulative Preference Shares (NCRCPS') of' 10/- each dividend @ 9% p.a. i.e.
' 0.90 per Preference Share of '10/- each payable for the financial year ended 31stMarch 2017.
The proposed dividend on NCRCPS will absorb ' 278.49 lakhs including DividendDistribution Tax of ' 56.70 lakhs.
On Equity Shares @ 9% i.e. ' 0.90 per equity share (Previous year ' 0.90 perequity share) for the financial year ended 31st March 2017.
The proposed dividend on Equity Share Capital will absorb ' 186.05 lakhsincluding Dividend Distribution Tax of ' 31.49 lakhs.
The final dividend recommended by the Board will be accounted in the financial year inwhich it is approved by the shareholders in the Annual General Meeting.
TRANSFER TO RESERVES
During the year under review no amount has been transferred to General Reserve.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In compliance with the Regulation 34 (2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (SEBI (LODR) Regulations') a separate section onthe Management Discussion and Analysis Report giving details of overall industrystructure developments performance and state of affairs of Company's business forms anintegral part of this Report.
PART REDEMPTION OF PREFERENCE SHARES
The Members are informed that on account of amalgamation of Clear Mipak PackagingSolutions Ltd (CMPSL) with the Company 30944164 9% Non Convertible ReedemableCumulative
Preference Shares of ' 10/- each were issued as consideration to the shareholders ofCMPSL. As per the terms the said Preference Shares have maximum period of 20 years withthe option of redeeming the Preference Shares in full or in tranches before the aforesaidperiod by the mutual consent of the holders as may be allowed under the Act.
The Members are informed that the Company had redeemed 4641624 Preference Shares of '10/- each at par aggregating to ' 46416240 (Rupees Four Crore Sixty Four Lakhs SixteenThousand Two Hundred Forty Only) on 9th June 2017 out of profits of theCompany after creation of Capital Redemption Reserve. After redemption the PreferenceShare capital is now reduced to ' 26.30 crores.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(a) APPOINTMENTS / RE-APPOINTMENTS
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr. AshwinS. Dani Non-Executive Director retires by rotation and being eligible offers himself forre-appointment to the Board.
During the financial year under review Mr. Bomi P. Chinoy (DIN 07519315) and Ms.Vaishali V. Sharma (DIN 07531200) were appointed as Additional Directors (Independent) bythe Board of Directors of the Company with effect from 23rd May 2016 and 10thJune 2016 respectively. In the 25th Annual General Meeting held on 23rdSeptember 2016 members approved the aforesaid appointment of Independent Directors for aterm of 5 years.
During the Financial Year 2016-17 Mrs. Gool M. Kotwal a NonExecutive IndependentDirector resigned from the Board of your Company with effect from the close of businesshours of 15th April 2016.
The Board places on record its appreciation for her invaluable contribution/ guidanceduring her association with your Company.
(c) KEY MANAGERIAL PERSONNEL
Mr. Malav A. Dani (DIN: 01184336) Managing Director Mr. Mehernosh A. Mehta (DIN:00372340) Wholetime Director Mr. Bharat I. Gosalia Chief Financial Officer and Mrs.Namita Tiwari Company Secretary are the Key Managerial Personnel of your Company inaccordance with the provisions of Section 2(51) 203 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended from time to time.
In the 25th Annual General Meeting held on 23rd September 2016Mr. Malav A. Dani (DIN 01184336) was re-appointed as the Managing Director for anotherterm of five years with effect from 5th August 2016 and Mr. Mehernosh A. Mehta(DIN 00372340) was appointed as Wholetime Director for a term of five years with effectfrom 17th March 2016.
(d) DECLARATION OF INDEPENDENCE
All Independent Directors have given necessary declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligations & Disclosure Requirements) Regulation2015.
(e) FAMILIARISATION PROGRAMME
Whenever any person joins the Board of the Company as a Director an inductionprogramme is arranged for the new appointee wherein the appointee is familiarised withthe Company his/her roles rights and responsibilities in the Company the Code ofConduct of the Company to be adhered nature of the industry in which the Companyoperates and business model of the Company.
The details of such familiarisation programmes has been disclosed on the Company'swebsite at www.hitechgroup.com
(f) BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 read with Rules issued thereunderand Regulation 17 of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the Board of Directors on recommendation of the Nomination & RemunerationCommittee has evaluated the effectiveness of the Board as a whole the various CommitteesDirectors individually (excluding Director being evaluated) and the Chairman. Theevaluation was carried out based on the ratings of the Directors in the questionnairescirculated to them.
The statement including the manner in which the evaluation exercise was conducted isincluded in the Corporate Governance Report which forms part of this Annual Report.
COMMITTEES OF BOARD
The Board of Directors have formed the following committees and the detail pertainingto such committees are included in the Corporate Governance Report which forms part ofthis Annual Report.
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Committee of Directors
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of the number of Meetings of the Board and the Committees are discussed inthe Corporate Governance Report which forms part of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 inaccordance with Section 92 (3) of the Companies Act 2013 read with Companies (Managementand Administration) Rules 2014 are set out as "Annexure A".
ADOPTION OF NEW ARTICLES OF ASSOCIATION OF YOUR COMPANY
The Company proposes to adopt new Articles of Association in accordance with theprovisions of the Companies Act 2013 read with Rules issued thereunder. The Resolution inthis regard forms part of the Notice convening the 26th Annual General Meetingand the relevant Resolutions are recommended for your approval therein.
In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certificate from the Auditors on its compliance formsan integral part of this report.
CHANGE OF NAME
The name of the Company was changed from "Hitech Plast Limited" to"Hitech Corporation Limited" and a Certificate of Incorporation consequent tochange of name was obtained from Registrar of Companies Mumbai on 3rd May2017.
LISTING OF SHARES
The Company's equity shares are actively traded on BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSEIL). Further the applicable listing fees for thefinancial year 2017-18 has been paid to the respective Stock Exchange(s).
AUDITORS AND THEIR REPORT
a. Statutory Auditors:
The Members of the Company at its 23rd Annual General Meeting held onSaturday the 13th day of September 2014 had appointed M/s. Manubhai &Shah LLP Chartered Accountants (Firm Reg. No: 106041W/W100136) as Statutory Auditors ofthe Company for a term of five (5) years subject to the ratification of their appointmentby the Members at every Annual General Meeting.
The said Statutory had expressed their inability to continue as Statutory Auditors ofthe Company due to pre-occupation and other professional commitments. The Board places onrecord its appreciation for the services rendered by them during their tenure as theStatutory Auditors of the Company.
The Board at its Meeting held on 23rd June 2017 pursuant to Section 139(8)of the Companies Act 2013 appointed M/s. Kalyaniwalla & Mistry LLP CharteredAccountants (Firm Reg. No: 104607W/W100166) as Statutory Auditors of the Company subjectto the approval of shareholders at the ensuing Annual General Meeting.
M/s. Kalyaniwalla & Mistry LLP Chartered Accountants have confirmed theireligibility to the effect that their appointment if made would be within the prescribedlimits under the Companies Act 2013 and Rules made thereunder and that they are notdisqualified for appointment within the meaning of Section 141 of the Companies Act 2013and hold a valid Certificate of Practice issued by Peer Review Board of Institute ofChartered Accountants of India as required under Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The above appointment forms part of the Notice of the ensuing Annual General Meeting.The Board of Directors recommends the appointment of M/s. Kalyaniwalla & Mistry LLPChartered Accountants as the Statutory Auditors of the Company for a period of five yearscommencing from the date of appointment till conclusion of the 31st AnnualGeneral Meeting of the Company subject to ratification of their appointment by themembers at every Annual General Meeting.
The Auditor's Report for the financial year ended 31st March 2017 does notcontain any qualification reservation or adverse remarks.
b. Cost Auditors:
As the Companies (Cost Records and Audit) Rules are not applicable to your Company theCompany has not appointed any Cost Auditor for the financial year 2017-18.
c. Internal Auditors:
M/s. Shashank Patki and Associates Chartered Accountants Pune M/s. J. V. Ramanujam& Co. Chartered Accountants Chennai and M/s. Jasuja Kapoor & Associates Noidaare re-appointed as the Internal Auditors of the Company for the financial year 2017-18.
The Audit Committee of the Board of Directors Statutory Auditors and the Managementare periodically apprised of the Internal Audit findings and corrective actions are taken.
d. Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended theCompany has re-appointed M/s. Nilesh Shah & Associates Company Secretaries Mumbaito conduct the Secretarial Audit of your Company for the financial year ended 31stMarch 2018.
The Secretarial Audit Report is annexed herewith as Annexure B' to this Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under provisions of Section143(12) of the Companies Act 2013 and rules made thereunder.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration including criteria for determiningqualifications positive attributes independence of a Director and other matters providedunder Section 178(3) of the Act and is appended hereto as Annexure -C' and formspart of this Report. The Nomination & Remuneration Policy is also displayed on theCompany's website under the web link: http://
The Company has formulated and adopted a Policy on Prevention of Sexual Harassment ofWomen at Workplace pursuant to the provisions of Sexual Harassment of Woman at Workplace(Prevention Prohibition & Redressal) Act 2013. The Company has not received anycomplaints under the said policy during the year. All employees (permanent contractualtemporary trainees) are covered under this Policy.
Sexual Harassment Policy of the Company is displayed on the Company's website under theweblink: http://www.hitechgroup.com/investor/#policies
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy' with an objective to conduct itsaffairs in a fair and transparent manner and by adopting the highest standards ofprofessionalism honesty integrity and ethical behaviour. The Company has establishedmechanism for reporting concerns about unethical behaviour actual or suspected fraudviolation of Code of Conduct and Ethics.
The Vigil Mechanism and Whistle Blower Policy may be accessed on the Company's websitethrough the following link: http://www .hitechgroup.com/investor/#policies CORPORATE SOCIAL RESPONSIBILITY INITIATIVES CorporateSocial Responsibility (CSR') Committee:
In compliance with the requirements of Section 135 of the Companies Act 2013 read withthe Companies (Corporate Social Responsibility) Rules 2014 as amended the Board ofDirectors have constituted a Corporate Social Responsibility Committee. The details ofmembership of the Committee & the meetings held are detailed in the CorporateGovernance Report forming part of the Annual Report.
The contents of the CSR Policy of the Company as approved by the Board on therecommendation of the Corporate Social Responsibility Committee is available on thewebsite of the Company and can be accessed through the web link:
Initiatives undertaken during the financial year 2016-17:
During the financial year 2016-17 the Company has spent ' 54.99 lakhs towardsCorporate Social Responsibility (CSR) expenses.
The Annual Report on CSR activities undertaken by Company during the financial year2016-17 is annexed as Annexure-D and forms part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under Section 134 (3) (m) of the Companies Act
2013 read with the Rule 8 of the Companies (Accounts) Rules 2014 is appended hereto asAnnexure - E' and forms part of this Report.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 205A and 205C of the Companies Act 1956/ Section124 125 of the Companies Act 2013 dividends pertaining to the financial year 2008-09amounting to ' 158610 which remained unpaid or unclaimed for a period of 7 years wastransferred by the Company to the Investor Education and Protection Fund.
Further dividends which remained unpaid or unclaimed for a period of 7 yearspertaining to the financial year 2009-10 which was declared at the Annual General Meetingof the Company held on 4th September 2010 will be transferred to the InvestorEducation and Protection Fund by 3rd October 2017. Members who have notencashed their dividend warrants for the year 2009-10 or thereafter are requested to writeto the Company's Registrar and Share Transfer Agents. Details of Investor Education andProtection Fund provided on Company's website under the weblink -
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act and the Rules made thereunder inrespect of employees of the Company has been disclosed in Annexure F'.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules
2014 (including any statutory modification(s) or re-enactment(s) for the time being inforce).
The outstanding deposits as on 31st March 2017 was ' 304.40 lakhs(including Directors deposit accepted in the year 2014-15).
Particulars of Deposits covered Under Chapter V of the Act are as follows:
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the Company has not provided any loan or given anyguarantee or made any investment. The investment of ' 1.25 lakhs in Paints & CoatingsSkill Council a Charitable Company incorporated under Section 8 of the Companies Act2013 could not be materialised and therefore reversed during the year in the books ofaccount of the Company.
RELATED PARTY TRANSACTIONS
All Related Party Transactions which were entered during the financial year 2016-17were on an arm's length basis and in the ordinary course of business. There were nomaterial significant related party transactions entered into by the Company with relatedparty(ies) as defined under Section 2(76) of the Companies Act 2013 which may have apotential conflict with the interest of the Company at large.
Your Company's sales transactions with Asian Paints Limited qualify as material RelatedParty Transactions ("RPT") under Regulation 23 of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015. Accordingly Company has obtainedshareholders' approval for the said material related party transactions.
The Board of Directors of the Company has formulated a Policy on dealing with RPTs anda Policy on materiality of Related Party Transactions which is uploaded on the website ofthe Company and can be accessed through the following link:
The details of the Related Party Transactions of the Company as required underAccounting Standard-18 are set out in Note 41 to the financial statements forming part ofthis Annual Report.
Form AOC - 2 pursuant to Section 134 (3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure G' to thisReport.
INTERNAL FINANCIAL CONTROLS
Your Company has in place the adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weaknesses in the design or operation of the same were observed.
Pursuant to Section 134 of the Companies Act 2013 the Company has a risk managementpolicy in place for identification of key risks to its business objectives impactassessment risk analysis risk evaluation risk reporting and disclosures riskmitigation and monitoring and integration with strategy and business planning.
SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant/material orders passed by any of the Regulators or Courts orTribunals impacting the going concern status of your Company or its operations in future.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There were no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the Financial year of the Company to whichthe Financial Statements relate and date of this report.
IMPLEMENTATION OF COMPANIES (INDIAN ACCOUNTING STANDARDS) RULES 2015
The Companies (Indian Accounting Standards) Rules 2015 is applicable to the Companywith effect from 1st April 2017. Your Company is prepared to implement thesaid Rules in the financial statements of the Company for the year 2017-18.
IMPLEMENTATION OF CENTRAL GOODS AND SERVICE TAX (GST) ACT 2017
The Central Goods And Service Tax (GST) Act 2017 will be applicable with effect fromthe date as notified by the Government. Your Company has registered itself with variousauthorities for implementation of the GST Act.
CHANGE IN NATURE OF BUSINESS
There were no material changes in the nature of business of the Company during the yearunder review.
NAMES OF COMPANIES WHICH HAVE BECOME / CEASED TO BE SUBSIDIARIES JOINT VENTURES ORASSOCIATES DURING THE YEAR
As on 31st March 2017 the Company does not have any subsidiary companyJoint Venture or Associate Company.
a) has not issued Shares having differential rights as to dividend voting orotherwise; and
b) does not have any ESOP Scheme for its employees/Directors.
c) has not issued Sweat Equity Shares.
The Company has always perceived its manpower as its biggest strength. The emphasis wason grooming in-house talent enabling them to take higher responsibilities. The employeerelations continue to be cordial at all the divisions of the Company. Your Directors placeon record their deep appreciation for the contribution of the employees at all levels.Their dedicated efforts and enthusiasm have been integral to your Company's steadyperformance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) of the Companies Act 2013 the Directors confirm that:
a. In the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures; if any
b. accounting policies have been selected and applied consistently and judgments andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of your Company as at 31st March 2017 and of theprofit and loss of the Company for the financial year ended 31st March 2017;
c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a going concern basis;
e. proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and;
f. proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
Your Directors wish to express their appreciation and gratitude to all the employees atall levels for their hard work dedication and co-operation during the year.
Your Directors wish to express their sincere appreciation for the excellent support andco-operation extended by the Company's shareholders customers bankers suppliersregulatory and government authorities and all other stakeholders.
ANNEXURE B TO DIRECTORS' REPORT
FORM NO. MR-3
FOR THE FINANCIAL YEAR ENDED 31st MARCH 2017
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Hitech Corporation Limited
(formerly known as Hitech Plast Limited)
Unit No. 201 2nd Floor Welspun House Kamala City Senapati Bapat Marg
Lower Parel Mumbai 400 013
Dear Sir / Madam
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good Corporate Governance practice by Hitech CorporationLimited (hereinafter called "the Company"). Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts /statutory compliances and expressing our opinion thereon.
Based on our verification of the Company's Books Papers Minutes Books Forms andReturns filed with regulatory authorities and other records maintained by the Company andalso the information provided by the Company its officers agents and authorizedrepresentatives during the conduct of secretarial audit we hereby report that in ouropinion the Company has during the financial year ended 31st March 2017 complied withthe statutory provisions listed hereunder and also that the Company has proper Boardprocesses and compliance mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:
We further report that maintenance of proper and updated Books Papers Minutes Booksfiling of Forms and Returns with applicable regulatory authorities and maintaining otherrecords is responsibility of management and of the Company. Our responsibility is toverify the content of the documents produced before us make objective evaluation of thecontent in respect of compliance and report thereon. We have examined on test basis thebooks papers minute books forms and returns filed and other records maintained by theCompany and produced before us for the financial year ended 31st March 2017according to the provisions of:
(i) The Companies Act 2013 and the rules made there under;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA') and the rules madethere under;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings to the extent the same was applicable to the Company;
(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) 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 (to the extent applicable);
(d) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(e) The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015.
(vi) Considering activities of the Company there is no specific regulator / lawsubject to whose approval company can carry on / continue business operation and hence nocomment is invited in respect of the same. We have also in-principally verified systemsand mechanism which is in place and followed by the Company to ensure Compliance of otherapplicable Laws like Labour Laws Environmental Law etc. (in addition to the abovementioned Laws (i to v) and applicable to the Company) and we have also relied on therepresentation made by the Company and its Officers in respect of systems and mechanismformed / followed by the Company for compliances of other applicable Acts Laws andRegulations and found the satisfactory operation of the of the same.
We have also examined compliance with the applicable clauses of
(a) Secretarial Standards issued by the Institute of Company Secretaries of India underthe provisions of Companies Act 2013; and
(b) The Listing Agreements entered into by the Company with Stock Exchange(s).
We further Report that during the year it was not mandatory on the part of theCompany to comply with the following Regulations / Guidelines:
(a) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014;
(b) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009;
(c) The Securities and Exchange Board of India (Buy Back of Securities) Regulations1998;
(d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
Based on the above said information provided by the Company we report that during thefinancial year under report the Company has substantially complied with the provisions ofthe above mentioned Act/s including the applicable provisions of the Companies Act 2013and Rules Regulations Guidelines Standards etc. mentioned above and we have nomaterial observation of instances of non Compliance in respect of the same.
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 year under review weresubstantially carried out in compliance with the provisions of the Act.
We also report that adequate notice was given to all directors to schedule the BoardMeetings agenda and detailed notes on agenda were sent at least seven days in advance anda reasonable system exists for Board Members for seeking and obtaining further informationand clarifications on the agenda items before the meeting and for meaningful participationat the meeting.
Based on the representation made by the Company and its Officer we herewith reportthat majority decision is carried through and proper system is in place which facilitates/ ensure to capture and record the dissenting member's views if any as part of theminutes.
Based on the representation made by the Company and its Officers explaining us inrespect of internal systems and mechanism established by the Company which ensurescompliances of Acts Laws and Regulations applicable to the Company we report that thereare 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 during the audit period under review there were no specificevent / action that can have a major bearing on the Company's affairs.
Note: This Report is to be read along with attached Letter provided as "Annexure -A".
Annexure A' to the Secretarial Audit Report
Hitech Corporation Limited
(formerly known as Hitech Plast Limited)
Unit No. 201 2nd Floor Welspun House
Kamala City Senapati Bapat Marg
Lower Parel Mumbai 400 013
Dear Sir / Madam
Sub : Our Report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis (by verifying records as was made available to us) toensure that correct facts are reflected in secretarial records. We believe that theprocesses and practices we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company and we rely on Auditors Independent Assessment on thesame.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of process followed by Company to ensure adequate Compliance.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
ANNEXURE C TO DIRECTORS' REPORT
NOMINATION AND REMUNERATION POLICY
a. The present Human Resource Policy of the Company considers human resources as itsinvaluable assets. The payment of remuneration to employees is linked with the employeesindividual roles responsibility and performance with the overall objective of theCompany.
b. This Nomination and Remuneration Policy (NR Policy) has been formulated inter aliafor nomination and remuneration of Directors Key Managerial Personnel (KMP) SeniorManagement Personnel and other Employees of Hitech Corporation Limited (hereinafterreferred to as the Company) in accordance with the requirements of the provisions ofSection 178 of the Companies Act 2013 and Listing Agreement.
2. Objectives of this NR Policy
a. To lay down criteria for identifying persons who are qualified to become Directorsand who may be appointed in Senior Management of the Company in accordance with thecriteria laid down by Nomination and Remuneration Committee and recommend to the Boardtheir appointment and removal.
b. To lay down criteria to carry out evaluation of every Director's performance.
c. To formulate criteria for determining qualification positive attributes andIndependence of a Director;
d. To determine the composition and level of remuneration including reward linked withthe performance which is reasonable and sufficient to attract retain and motivateDirectors KMP Senior Management Personnel & other employees to work towards the longterm growth and success of the Company.
a. "Act" means the Companies Act 2013 including the rules schedulesclarifications and guidelines issued by the Ministry of Corporate Affairs from time totime.
b. "Board" means the Board of Directors of the Company.
c. "Directors" means the Directors of the Company.
d. "NR Committee" means the Nomination and Remuneration Committee of theCompany as constituted or reconstituted by the Board from time to time.
e. "Company" means Hitech Corporation Limited.
f. "Key Managerial Personnel"(KMP) means
Managing Director; or Chief Executive Officer; or Manager and in their absencea Whole-time Director;
Chief Financial Officer
g. "Senior Management Personnel" means the personnel of the Company who aremembers of its core management team excluding Board of Directors and KMPs comprising ofall members of management one level below the Executive Directors including the functionalheads.
h. "Other employees" means all the employees other than the Directors KMPsand the Senior Management Personnel.
4. NR Policy
NR Policy is divided into three parts as follows:
Criteria for identifying persons who are qualified to be appointed as a Directors / KMP/Senior Management Personnel of the Company
Section 164 of the Companies Act 2013 states disqualifications for appointment of anyperson to become Director of a Company. Any person who in the opinion of the Board is notdisqualified to become a Director and possesses the ability integrity and relevantexpertise and experience can be appointed as Director of the Company.
b. Independent Directors
For appointing any person as an Independent Director he/she should possessqualifications as mentioned in Rule 5 of The Companies (Appointment and Qualification ofDirectors) Rules 2014 as amended from time to time.
c. Senior Management Personnel and KMP and Other Employees
The Company has an Organogram displaying positions of Senior Management including KMPand other positions with the minimum qualifications and experience requirements for eachpositions which commensurate with the size of its business and the nature and complexityof its operations. Any new recruit in the Company is to match the requirements prescribedin the Organogram of the Company.
a. Structure of Remuneration for the Managing Director Key Managerial Personnel andSenior Management Personnel.
The Managing Director Key Managerial Personnel and Senior Management Personnel (otherthan Non-executive Directors) 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
b. Structure of Remuneration for Non-Executive Director
Non-Executive Directors are remunerated to recognize responsibilities accountabilityand associated risks. The total remuneration of Non-Executive Directors may include allor any combination of following elements:
i. Fees for attending meeting of the Board of Directors as permissible under Section197 of the Companies Act 2013 read with Rule 4 of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014 and decided at the Meetings of the Boardof Directors.
ii. Fees for attending meetings of Committees of the Board which remunerate Directorsfor additional work on Board Committee as permissible under Section 197 of the CompaniesAct 2013 read with Rule 4 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 and decided at the Meeting of the Board of Directors.
iii. Commission on net profits as permissible under Section 197 of the Companies Act2013 and decided by the Board from time to time to be payable to any of the Non-executiveDirector.
iv. Non-Executive Directors are entitled to be paid all traveling and other expensesthey incur for attending to the Company's affairs including attending and returning fromGeneral Meetings of the Company or Meetings of the Board of Directors or Committee ofDirectors.
Any increase in the maximum aggregate remuneration payable beyond permissible limitunder the Companies Act 2013 shall be subject to the approval of the Shareholders' at theAnnual General Meeting by special resolution and/or of the Central Government as may beapplicable.
c. Structure of Remuneration for Other Employees
The power to decide structure of remuneration for other employees has been delegated toHR Department of the Company.
a. Criteria for evaluating Non-Executive Board Members
Section 149 of the Companies Act 2013 read with Schedule IV of the said Act statesthat the Independent Directors shall at its separate meeting review performance of Non-Independent Directors and the Board as a whole and the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
b. Criteria for evaluating performance of Key Managerial Personnel and SeniorManagement Personnel
Criteria for evaluating performance of Key Managerial Personnel and Senior ManagementPersonnel shall be as per the HR Guideline on Performance Management System andDevelopment Plan of the Company.
c. Criteria for evaluating performance of Other Employees
The power to decide criteria for evaluating performance of Other Employees has beendelegated to HR Department of the Company.
5. Communication of this Policy
For all Directors a copy of this Policy shall be handed over within one month from thedate of approval by the Board. This Policy shall also be posted on the web-site of theCompany and in the Annual Report of the Company.
Any change in the Policy shall on recommendation of NR Committee be approved by theBoard of Directors of the Company. The Board of Directors shall have the right to withdrawand / or amend any part of this Policy or the entire Policy at any time as it deems fitor from time to time and the decision of the Board in this respect shall be final andbinding.
ANNEXURE D TO DIRECTORS' REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Company's CSR Policy:
The Board of Directors of the Company on recommendation of the CSR Committee adoptedthe CSR Policy for the Company. The policy is available on the website of the Companyunder the following weblink - http://www.hitechgroup.com/investor/#policies
Activities Undertaken by the Company during the Financial Year 2016-17:
The Company has set-up a registered charitable public trust namely; Sab Ka Mangal HoFoundation for undertaking its CSR activities. During the year several CSR activitieswere conducted directly by the Company and through the said trust.
The Company has undertaken an initiative to contribute towards conservation of naturalresources to promote and maintain the quality of soil air and water through treeplantation and cleaning of rivers of Pune; inculcating life skills value education toprimary secondary & ITI students and supporting mid-day meal programmes for theunder-privileged children of the society.
The following projects were undertaken by the Company in its areas of its operationsand corporate office:
I. Tree Plantation Drive:
The Company conducted a tree plantation drive through the Sab Ka Mangal Ho Foundationin close proximity of Company's areas of operations in Sriperumbudur (Tamil Nadu)Sitarganj (Uttarakhand) and Rohtak (Haryana) with an aim to contribute towards preservingand promoting environmental sustainability and while sensitizing the local communitiesabout its importance. The Company also collaborated with Mumbai Dabbawala AssociationAmbassadors of Swach Bharat Abhiyan and organised a tree plantation drive on 21stOctober 2016 in the schools of Chinchwad Pune. Sakshi Malik India's Bronze Medalist atthe Rio Olympics inaugurated Hitech's Rohtak Tree Plantation Drive. A review andmonitoring mechanism shall also be implemented to ensure the survival and growth of youngtrees planted.
II. River Cleaning Project:
The Company has collaborated with INTACH (Indian National Trust for Art & CulturalHeritage) for its current activity of cleaning the rivers of Pune with an objective toconserve and maintain the quality of water and bring them back to its natural statethrough Sab Ka Mangal Ho Foundation.
III. Support the Mid-day Meal Programme for Under-privileged Children:
The Company organized mid-day meal programmes in the orphanages of Mumbai. As a part ofthis endeavour monthly mid-day meals are organized by the Company to provide nutritionalsupport to under-privileged children with wholehearted participation of Hitechvolunteers. The volunteers cook and serve lunch buffets to the children followed byengaging them in creative in-door and outdoor activities.
IV. Promoting Life Skills Value Education:
The Company collaborated with the Ramkrishna Mission to foster and inculcate lifeskills value education to children and students of Industrial Training Institute (I.T.I).These courses were imparted to the students in Silvassa and Ankleshwar region of Indiawith an objective of promoting values of higher-life and importance of being a contributorto the society.
2. Composition of the CSR Committee:
3. Average net profit of the Company for last three financial years: ' 1198.84 lakhs.
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): ' 23.98lakhs.
The Company was required to spend ' 55.23 lakhs (including previous year unspentamount) towards CSR.
5. Details of CSR spent for the financial year:
a. Total amount spent in the Financial Year 2016-17: ' 54.99 lakhs
b. Amount unspent if any: ' 0.24 lakhs
c. Manner in which the amount spent during the financial year is detailed below:
6. In case the Company has failed to spend the two percent of the average net profit ofthe last three financial years or any part of thereof the Company shall provide thereasons for not spending the amount in its Board report.
During the financial year the Company had spent ' 54.99 lakhs on various projectsundertaken by the Company (as mentioned in the above table) under corporate socialresponsibility. Some of the projects are underway and some of them are being identifiedby the Company and same will be implemented in the next financial year.
7. A responsibility statement of the CSR Committee that the implementation andmonitoring of CSR Policy is in compliance with CSR objectives and Policy of the Companyis reproduced below:
We hereby affirm that the CSR Policy as recommended by CSR Committee and approved bythe Board has been implemented and the CSR Committee monitors the implementation of CSRprojects and activities in compliance with CSR objectives.
ANNEXURE E TO DIRECTORS' REPORT
Details of Conservation of Energy Technology Absorption Foreign Exchange Earnings andOutgo are as follows:
A) Conservation of Energy:
The steps taken for conservation of energy
The Company plans for energy conservation right from the establishment of themanufacturing unit. Our Factories are located close to our customers which helps inreducing the energy consumed during transportation.
Factory buildings are designed considering maximum use of day light cool airventilation without electric devices and painted keeping in view the reflection of sunrays from building roof and walls. Also LED lights are installed in our factories whichsaves considerable amount of energy. The Company has taken initiative in tree plantationnear factory premises which helps in keeping the areas cool and reduces the need for aircoolers.
New selected moulding machinery is either servo controlled or fully electricconsuming 30-50% less electricity than conventional older machines. Also some oldermachines have been modified to use servo controlled technology. New printing technology issmaller and does not require big air cooled cabins.
The Company has invested in wind energy and are also considering use of solar power insuitable areas of operations.
Energy conservation continues to receive top priority in the Company.
Specific Energy conservation measures are:
1. Monitoring and analysis of energy consumption on monthly basis;
2. New moulding machines selected are always either servo controller or fully electricmachines;
3. Modification of old technology machines to servo controlled machines;
4. Replacement of conventional tubes and bulbs with LED;
5. Monitoring benchmarking and selection of energy intensive equipment only;
6. Training of Hitech workers for energy conservation and awareness;
7. Minimum use of energy by optimizing processes and material movement in factories;
8. 'Machine ON'' ALARM's and automatic switch of machines;
9. Replacement of old equipment with energy efficient equipment;
10. Share and implement best energy saving practices across manufacturing units;
B) The steps taken by the Company for utilizing alternate sources of energy:
Your Company has installed Windmills in some of its plants as an alternative source ofenergy. Further there are proposals for more investments into this area to facilitate thereduction in conventional energy usage and environmental benefits.
Your Company is evaluating the proposals for other alternative sources such as SolarEnergy to supplement requirements of power needs at different plants.
The above mentioned measures have resulted in reduction in energy usage reduction inenergy cost and environmental benefits in the vicinity.
C) The Capital Investment on energy conservation equipment: NIL
A) The efforts made by the Company towards technology absorption
Your Company has made concerted efforts to establish a strong performance in the fieldof R&D vis-a-vis product and process development. It has a dedicated Technology Centreat Pune which carries out design product and process innovations and improvements and hasgot its accreditation from the Department of Science and Technology Government of India.The Centre in close cooperation with customers has been providing solutions for uniquepackaging designs which have enhanced the quality of the containers and have also helpedin reducing the costs. The initiatives of the Centre include efficient usage of polymersin the product and reduction in production cycle time leading to savings in operatingcosts. This helped the Company in sustaining and strengthening the competitive positionthe Company holds in rigid packaging business.
Specific areas in which R & D was carried out by the Company include:
a. Technical upgradation in mould design; Multi-cavity mould and insert mouldingtechnology.
b. Product and Process development; Container-lid design for interchangeabilityprocessing and material recipe for better performance and to sustain climate andtemperature changes.
c. Raw material Development; Incorporation of different additives and fillers to rawmaterial which overcame performance degradation due to change in weather over the span of12 months.
B) The Benefits derived like product improvement cost reduction product developmentor import substitution:
a. Reduction and better variance control in the weight of the containers;
b. Enhancing life of the mould;
c. Better utilization of manpower;
d. Lower production cycle time which improved productivity; and
e. Less molding rejections
C) In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)
Not applicable as all developments were done indigenously in the last three years.
FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign exchange earned in terms of actual inflows during the year 2016-17 was ' 48.67lakhs (equivalent value of various currencies).
Foreign exchange outgo in terms of actual outflows during the year 2016-17 was ' 15.32lakhs (equivalent value of various currencies).
DISCLOSURES PURSUANT TO SECTION 197 (12) OF THE COMPANIES ACT 2013 AND RULE 5 OFCOMPANIES APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
Required disclosures under Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are as under:
1. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:
* Mrs. Gool M. Kotwal ceased to be a Director w.e.f. 15th April 2016 **Appointed with effect from 23rd May 2016 *** Appointed with effect from 10thJune 2016 Notes :
1. The aforesaid details are calculated on the basis of remuneration for the financialyear 2016-17.
2. The remuneration to Directors includes sitting fees paid to them for the financialyear 2016-17.
3. Median remuneration of all its employees is ' 198020/- for the financial year2016-17.
2. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
* Mrs. Gool M. Kotwal ceased to be a Director w.e.f. 15th April 2016 ** Mr.Bomi P Chinoy appointed with effect from 23rd May 2016
*** Ms. Vaishali V. Sharma appointed with effect from 10th June 2016
# Percentage increase in remuneration not reported as they were holding Directorshipfor the part of the financial year 2016-17 and remuneration is proportionately adjusted.
3. The percentage increase/(decrease) in the median remuneration of employees in thefinancial year: (3.00)%
4. The number of permanent employees on the rolls of Company:
5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the Key Managerial Remuneration and justification thereof and point out ifthere are any exceptional circumstances for increase in the managerial remuneration:
* Employed for part of the year i.e. w.e.f 17th March 2016
6. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.
7. Statement containing the particulars of employees in accordance with Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules2016 vide notification 30th June 2016:
List of top ten employees of the Company in terms of remuneration drawn and employedthroughout the financial year 2016-17.
1. No employee is a relative of any Director or Manager of the Company.
2. All appointments are contractual and terminable by notice on either side.
3. Remuneration includes salary bonus commission various allowances contribution toprovident fund and superannuation fund and taxable value of perquisites excludingprovision for gratuity and leave encashment.
4. *Mr. Mehernosh Mehta appointed as a whole time Director w.e.f 17th March2016
5. Company has not paid remuneration to any of the employee exceeding ' 1.2 Crore.
8. There is no employee in the Company who drawn remuneration exceeding more than OneCrore and two lakhs per annum for the financial year 2016-17 and
There is no employee in the Company who drawn the remuneration exceeding than Eightlakhs and Fifty thousand per month during the financial year 2016-17.
ANNEXURE G TO THE DIRECTORS' REPORT
Form AOC - 2
(Pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014)
Form for disclosure of particulars/arrangements entered into by the Company withrelated parties referred to in Section 188(1) of the Companies Act 2013 including certainarm's length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arm's length basis: