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HPL Electric & Power Ltd.

BSE: 540136 Sector: Engineering
NSE: HPL ISIN Code: INE495S01016
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VOLUME 21723
52-Week high 198.00
52-Week low 74.20
P/E 35.08
Mkt Cap.(Rs cr) 868
Buy Price 134.15
Buy Qty 50.00
Sell Price 135.00
Sell Qty 100.00
OPEN 135.00
CLOSE 138.80
VOLUME 21723
52-Week high 198.00
52-Week low 74.20
P/E 35.08
Mkt Cap.(Rs cr) 868
Buy Price 134.15
Buy Qty 50.00
Sell Price 135.00
Sell Qty 100.00

HPL Electric & Power Ltd. (HPL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 24th Annual Report of your Company together with the Audited financial Statements for the financial year ended 31st March 2016.

1. Financial Highlights

The financial performance of your Company for the year ended 31st March 2016 is summarized below:

Particulars

Amount (Rs. in Lacs)

(on standalone basis)

FY 2015-16FY 2014-15
Net Sales111526.25104511.16
Other Income485.56472.06
Total Revenue112011.81104983.22
Total Expenditure107129.79100626.85
Profit before tax4882.024356.36
Provision for tax1177.78920.13
Profit after tax3704.243436.24
EPS (Basic & Diluted) (Rs.)7.987.40
Proposed Dividend46.2318.57
Transfer to Reserve150.00150.00
Paid-up Share Capital4642.921857.18
Reserves and Surplus (excluding revaluation reserve)30885.1430022.53

2. Year in Retrospect

During the year under review total income of the Company was Rs. 112011.81 Lacs as against Rs. 104983.22 Lacs in the previous year. The Company was able to earn a profit after tax of Rs. 3704.24 Lacs in the current financial year as against a profit after tax of Rs 3436.24 Lacs in the financial year 2014-15. Your Directors are putting in their best efforts to improve the performance of the Company.

3. Proposed Initial Public Offer (IPO)

The Company has filed a Draft Red Herring Prospectus (DRHP) with the Securities & Exchange Board of India (SEBI) BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE) for proposed IPO by the Company. The Company has already obtained the in-principle approval of BSE & NSE and also obtained the observation letter from SEBI for the proposed IPO.

4. Dividend

Your Directors are pleased to recommend a dividend of Re. 0.10 per equity share (1%) for the financial year ended March 31 2016 subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company.

5. Reserves & Surplus

The net movement in the major reserves of the Company for FY 2015-16 and the previous year (on Standalone Basis) are as follows:

(Rs. in Lacs)

ParticularsFY 2015-16FY 2014-15
General Reserve2571.312421.31
Security Premium4771.417557.16
Profit & Loss A/C (Cr.)23542.4220044.06
Total30885.1430022.53

6 Public deposits

During the financial year 2015-16 your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act 2013 read together with the Companies (Acceptance of Deposits) Rules 2014.

7. Material Changes after the close of the financial year

Save as mentioned elsewhere in the report no material changes and commitments affecting the financial position of the Company has occurred between the end of the financial year of the Company - 31st March 2016 till the date of this report.

8. Subsidiaries/Joint Ventures/Associates

As on 31st March 2016 the Company is having two Joint Ventures (JVs) namely HPL Electric & Power Pvt. Ltd. - Shriji Designs (JV) and HPL Electric & Power Pvt. Ltd. - Trimurthi Hitech Co. Pvt. Ltd. - Shriji Designs (JV). These JVs are established as Association of Person (AOP) and not registered under the Companies Act and accordingly are not Associate Companies as per section 2(6) of the Companies Act 2013.

The Company did not have any Subsidiary Company as on 31st March 2016. A statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries associate company or joint venture or ventures in Form AOC-1 is Enclosed as Annexure-I.

The names of companies which have become or ceased to be its Subsidiaries joint ventures or associate companies during the year: Nil

After the close of the financial year company's investment in the Debentures subscribed in Himachal Energy Private Limited was converted into equity shares and post conversion of 15000000 (one crore fifty lacs) debenture held by the Company in Himachal Energy Private Limited the Company now hold 97.15% of the total equity share capital of Himachal Energy Private Limited. Accordingly Himachal Energy Private Limited has become subsidiary of the Company. Himachal Energy Private Limited is engaged in the business of manufacturing of energy meters kilowatt meters trivector and multifunction meters and other related activities.

9. Change in the nature of business

There has been no major change in the nature of business of your Company. Further since there is no subsidiary joint venture and associate company there is no question for mentioning of change in nature of business of such companies.

10. Directors and Key Managerial Personnel and change therein

During the year under review Mr. Lalit Seth was appointed as the Chairman & Managing Director of the Company. Mr. Rishi Seth and Mr. Gautam Seth were appointed as Joint Managing Directors. Mr. Chandra Prakash Jain and Mr. Vinod Ratan were appointed as Whole Time Directors. Further the Company appointed Mr. Jatinder Singh Sabharwal Mrs. Madhu Bala Nath Mr. Tarun Sehgal Mr.

Jainul Haque and Mr. Virender Kumar Bajaj as Independent Directors of the Company.

The Company has ten directors with an Executive Chairman. Out of ten directors five are independent directors including one woman Director and five are Executive directors.

As per Section 152 of the Companies Act 2013 and other applicable provisions of the Act Mr. Rishi Seth (DIN 00203469) Director of the Company who retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. Lalit Seth Chairman and Managing Director (CMD) Mr. Rishi Seth Joint Managing Director (JMD) Mr. Gautam Seth Joint Managing Director (JMD) Mr. Chandra Prakash Jain Whole Time Director Mr. Vinod Ratan Whole time Director and CFO and Mr. Vivek Kumar Company Secretary of the Company are the Key Managerial Personnel of the Company in accordance with the provisions of Section 203 of the Companies Act 2013 and rules made thereunder.

The details of the change in the Directors and KMPs during the year under review are as below:

S.N. NameDesignationReasonDate of appointment
1. Mr. Lalit SethChairman and Managing DirectorAppointmentJanuary 21 2016
2. Mr. Rishi SethJoint Managing DirectorAppointmentJanuary 21 2016
3. Mr. Gautam SethJoint Managing DirectorAppointmentJanuary 21 2016
4. Mr. Chandra Prakash JainWhole Time DirectorAppointmentJanuary 21 2016
5. Mr. Vinod RatanWhole Time Director and Chief Financial OfficerAppointmentJanuary 21 2016
6. Mr. Jatinder Singh SabharwalIndependent DirectorAppointmentJanuary 14 2016
7. Mrs. Madhu Bala NathIndependent DirectorAppointmentJanuary 14 2016
8. Mr. Tarun SehgalIndependent DirectorAppointmentJanuary 14 2016
9. Mr. Jainul HaqueIndependent DirectorAppointmentJanuary 14 2016
10. Mr. Virender Kumar BajajIndependent DirectorAppointmentJanuary 14 2016
11. Mr. Vivek KumarCompany SecretaryAppointmentJuly 02 2015
12. Mr. Manoj Kumar MishraCompany SecretaryResignationApril 30 2015

11. Declaration of Independency

All the Independent Directors of the Company have given their declaration that they continue to meet all the criteria as specified under Section 149(6) of the Companies Act 2013 in respect of their position as an Independent Director in the Company

12. Disclosure of commission paid to managing or whole time directors

There is no commission paid or payable by your company to the managing director or the whole time director.

13. Number of meetings of the Board of Directors

The details of the number of Board's meetings of your Company are as below:

Date of Board MeetingNo. of Director presentName of Directors present
10.04.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
13.04.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
17.04.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
22.04.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
04.05.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
21.05.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
28.05.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
06.06.20153Mr. Lalit Seth Mr. Rishi Seth
02.07.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
11.07.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
20.07.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
28.07.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
05.08.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
27.08.20153Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth and Mr. Chandra Prakash Jain
02.09.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
15.09.20154Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth and Mr. Chandra Prakash Jain
24.09.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
05.10.20154Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth and Mr. Chandra Prakash Jain
08.10.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
10.10.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
27.10.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
05.11.20154Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth and Mr. Chandra Prakash Jain
16.11.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
10.12.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
14.12.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
15.12.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
24.12.20153Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
11.01.20163Mr. Lalit Seth Mr. Rishi Seth and Mr. Gautam Seth
21.01.201610Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth Mr. C.P Jain Mr. Vinod Ratan Mr. J.S. Sabharwal Mr. Tarun Sehgal Mrs. Madhu Bala Nath Mr. Jainul Haque and Mr. V.K. Bajaj
04.02.201610Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth Mr. C.P Jain Mr. Vinod Ratan Mr. J.S. Sabharwal Mr. Tarun Sehgal Mrs. Madhu Bala Nath Mr. Jainul Haque and Mr. V.K. Ba]aj

14. Committee of Board of Directors

The Board of Directors of the Company has constituted the following committees:

(a) Corporate Social Responsibility Committee

(b) Nomination & Remuneration Committee

(c) Audit Committee

(d) Stakeholder's Relationship Committee

(e) IPO Committee

The terms of reference of the aforesaid Committee are set-out as Annexure-II to this Board's Report.

a. CSR Committee

Pursuant to the provisions of Section 135 of the Companies Act 2013 read with the Companies (Corporate Social responsibility Policy) Rule 2014 the composition of the Corporate Social responsibility Committee (CSR Committee) is as under:

SI. No. Name of the DirectorsCategory
1 Mr. Lalit SethChairman
2. Mr. Rishi SethDirector
3 Ms. Madhu Bala NathIndependent Director
4 Mr. Jainul HaqueIndependent Director

Mr. Vivek Kumar Company Secretary & Compliance Officer of the Company acts as Secretary to the Committee.

The details of the number of meetings held during the year under review of the CSR Committee of your Company are as below:

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Date of MeetingNo. of Director presentName of Directors present
21.01.20164Mr. Lalit Seth Mr. Rishi Seth Mrs. Madhu Bala Nath and Mr. Jainul Haque

b. Nomination and Remuneration Committee

Pursuant to the provisions of Section 178 of the Companies Act 2013 read with the Rules framed thereunder the composition of the Nomination and Remuneration Committee is as under:

Name of the DirectorsCategory
1 Mr. Jatinder Singh SabharwalIndependent Director (Chairman)
2. Mr. Tarun SehgalIndependent Director
3. Ms. Madhu Bala NathIndependent Director

The details of the number of meetings held during the year under review of the Nomination and Remuneration Committee of your Company are as below:

Date of MeetingNo. of Director presentName of Directors present
21.01.20163Mr. J. S. Sabharwal Mr. Tarun Sehgal and Mrs. Madhu Bala Nath

c. Audit Committee

Pursuant to the provisions of Section 177 of the Companies Act 2013 read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules 2014 the composition of the Audit Committee is as under:

SI. No. Name of the DirectorsCategory
1 Mr. Tarun SehgalIndependent Director (Chairman)
2. Mr. V. K. BaiajIndependent Director (Member)
3 Mr. J. S. SabharwalIndependent Director (Member)
4 Mr. Gautam SethExecutive Director

Mr. Vivek Kumar Company Secretary & Compliance Officer of the Company acts as Secretary to the Committee.

The Audit Committee was constituted on 21st January 2016 and during the year under review there was no audit committee meeting held.

d. Stakeholders Relationship Committee

Pursuant to the provisions of Section 178 of the Companies Act 2013 read with Rule framed thereunder the composition of the Stakeholders Relationship Committee is as under:

Name of the DirectorsCategory
1 Mr. V. K. BajajIndependent Director (Chairman)
2. Mr. Rishi SethDirector
3 Mr. Gautam SethDirector
4 Mr. V. R. GuptaDirector

The Stakeholders Relationship Committee was constituted on 21st January 2016 and during the year under review there was no Stakeholders Relationship Committee meeting held.

e. IPO Committee

The Company has constituted an IPO Committee with the following composition:

SI. No. Name of the DirectorsCategory
1 Mr. Lalit SethChairman & Managing Director
2. Mr. Rishi SethJoint Managing Director
3 Mr. Gautam SethJoint Managing Director
4 Mr. Vinod RatanWhole Time Director

The details of the number of meetings held during the year under review of the IPO Committee of your Company are as below:

Date of MeetingNo. of Director presentName of Directors present
25.02.20164Mr. Lalit Seth Mr. Rishi Seth Mr. Gautam Seth and Mr. Vinod Ratan

15. Conservation of Energy Technology Absorption- To be Finalized

The information on conservation of energy and technology absorption stipulated under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is attached as Annexure-HL

16. Related Party Transactions

Details of Related Party Transactions as per AOC-2 are provided in Annexure-IV.

17. Loans and investments

The details of loans guarantees and investments under Section 186 of the Companies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 are as follows:

A. Details of investments made by the Company as on 31st March 2016: As per the details in the audited annual financial statement.

B. Details of loans given by the Company as on 31st March 2016: As per the details in the audited annual financial statement.

C. Details of guarantees issued by your Company in accordance with Section 186 of the Companies Act 2013 read with the Rules issued thereunder: Nil

18. Extract of Annual Return

Pursuant to Section 92 of the Act and Rule 12 of The Companies (Management and Administration) Rules 2014 the extract of Annual Return in Form MGT-9 is provided in Annexure-V.

19. Corporate Social Responsibility(CSR)

In terms of Section 135 of the Companies Act 2013 the provisions related to the Corporate Social Responsibility are applicable on the Company. A report on Corporate Social Responsibility is enclosed in Annexure-VI.

20. Particulars of remuneration of Directors/ KMP/Employees

Details as per Section 197 of the Companies Act 2013 read with the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of Directors/ employees of your Company is set out in Annexure- VII.

The Nomination and Remuneration Policy of the Company is enclosed and set out as Annexure-VIII.

21. Employees Stock Option Scheme:

Board of Directors and members of the Company has recommended an Employees Stock Option Scheme in the Company for the benefit of the Employees (referred as HPL Employees Stock Option Scheme 2016 (HPL ESOS 2016/ Scheme) to reward the eligible employees for their contribution to the success of the Company and to provide an incentive to continue contributing to the success of the Company. It is envisaged that the Scheme is to attract reward motivate and retain its employees for high levels of individual performance which will ultimately contribute to the success of the Company.

The relevant particulars relating to HPL ESOS 2016 in terms of Rule 12 of the Companies (Share Capital & Debentures) Rules 2014 are as below:

(a) Options GrantedNil
(b) Options VestedNil
(c) Options ExercisedNil
(d) Total number of shares arising as a result of exercise of optionNil
(e) Options LapsedNil
(f) Exercise PriceN.A.
(g) Variation in the terms of OptionsNil
(h) Money realized by exercise of optionsNil
(i) Total number of options in forceNil
(j) Employee wise details of options granted to
(i) Key managerial personnelNil
(ii) Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that yearNil
(iii) Identified employees who were granted option during any one year equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grantNil

22. Vigil mechanism

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism honesty integrity and ethical behavior.

Pursuant to Section 177(9) of the Companies Act a vigil mechanism was established for directors and employees to report to the management instances of unethical behavior actual or suspected fraud or violation of the Company's code of conduct or ethics policy.

23. Auditors and auditors' report:

The Board in terms of Section 139 of the Act M/s. Sahni Mehra & Co. Chartered Accountants has been appointed as the statutory auditors of the Company till the conclusion of the AGM to be held in the year 2017. In terms of the provisions of the Companies Act 2013 it is proposed to ratify the appointment of M/s. Sahni Mehra & Co. in the ensuing AGM.

There are no observations (including any qualification reservation adverse remark or disclaimer) of the Auditors in their Audit Report that may call for any explanation from the Directors. Further the notes to accounts referred to in the Auditor's Report are self-explanatory.

24. Internal Control Systems and adequacy of Internal Financial Controls

The Company has a proper and adequate system of internal controls. This ensures that all transactions are authorized recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition. The Company has an Internal Control System commensurate with the size scale and complexity of its operations.

25. Risk management

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment. Your Company through its risk management process strives to contain impact and likelihood of the risks within the risk appetite as decided by the management.

There are no risks which in the opinion of the Board threaten the existence of your Company.

26. Cost Records and Cost Audit Report

Your Board of Directors has re-appointed M/s. Bikram Jain & Associates Cost Accountants (Firm Registration No. 101610) as Cost Auditor of the Company to conduct audit of Cost Records maintained by the Company for the financial year 2016-17 in accordance with Section 148 and the Companies (Cost Records and Audit) Rules 2014 after obtaining his consent and certificate under Section 139 141 and 148 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.

The remuneration payable to the Cost Auditor of the Company has been proposed for the ratification by the members of the Company and shall form part of the notice of the 24th Annual General Meeting.

27. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with corresponding rules framed thereunder M/s. AVA Associates were appointed as the secretarial Auditors of the company to carry out the secretarial audit for the year ending 31st March 2016.

28. Secretarial Auditors Report

A secretarial Auditors Report given by the Secretarial Auditors in the Form No. MR-3 is annexed with this report as Annexure - IX.

There are no observations (including any qualification reservation adverse remark or disclaimer) of the Secretarial Auditors in their Secretarial Audit Report that may call for any explanation from the Directors.

29. Significant/material orders passed by the regulators

There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future.

30. Directors' Responsibility Statement

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 the Directors confirm that:

a. in the preparation of the annual accounts for the financial year ended 31st March 2016 the applicable accounting standards and Schedule III of the Companies Act 2013 have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March 2016 and of the profit and loss of the Company for the financial year ended 31st March 2016;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a `going concern' basis; and

e. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

31. Disclosure under the sexual harassment of women at workplace (Prevention Prohibition And Redressal) Act 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in HPL Electric & Power Limited premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification reporting and prevention of sexual harassment. There is Internal Complaint Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. ICC has its presence at corporate office as well as at site locations.

During the year ended 31st March 2016 the ICC has not received any complaints pertaining to sexual harassment.

32. Acknowledgement

Your Directors take this opportunity to place on record their sincere appreciation for the co-operation and assistance the Company has received from Banks and various Government Departments. The Board also places on record its appreciation of the devoted services of the employees support and co-operation extended by the valued business associates and the continuous patronage of the customers of the Company.

For and on Behalf of the Board
For HPL Electric & Power Limited
LalitlSeth
Date: 4th June 2016Chairman and Managing Director
Place: GurgaonDIN:00312007