(INCLUDES MANAGEMENT DISCUSSION AND ANALYSIS)
The Board of Directors are pleased to present the Company's Thirty Eighth (38th) AnnualReport and the Company's audited financial statements (standalone and consolidated) forthe financial year ended March 31 2019 (year under review/ FY 2018-19).
Management Discussion and Analysis*
To avoid repetition of information the Management Discussion and Analysis onperformance of the Company is presented below.
FY 2018-19 was a landmark year due to implementation of much awaited Goods and ServicesTax (GST). While sector experienced limited unfavourable impact early on dueto roll out related disruptions it gradually experienced steady recovery towards the endof the year. Your Company believes that this move has created a singular trading marketacross the country creating an organised ecosystem under unified tax regime; expected tobenefit both consumers and companies in the long run. The successful implementation of GSTand emphasis on infrastructure development particularly the road and rail network augurswell for growth opportunities in the warehousing and logistics areas. Reforms in thebanking and financial sectors should lead to improvement in liquidity private sectorprofitability/ investment and resultant opportunities to your Company in the Investment& Treasury segment. This would help in further consolidating the financial health ofthe Company and enable it to pursue growth in the related fields.
1. Macroeconomic Condition
Second Advance Estimates of Gross Domestic Product (GDP) released by the CentralStatistics Office (CSO) estimated the growth rate of GDP at constant (2011-12) marketprices for FY 2018-19 at 7.0 per cent. As per the quarterly estimates the growth of GrossDomestic Product (GDP) at constant (2011-12) market prices stood at 6.6 per cent duringOctober-December 2018. Total Gross Goods and Services Tax (GST) collections grew to Rs106577 crore (US$ 15.26 billion) in March 2019 compared to Rs 92167 crore (US$ 13.20billion) in March 2018. As per quarterly estimates at constant 2011-12 prices PrivateFinal Consumption Expenditure (PFCE) grew 8.37 per cent year-on-year Government FinalConsumption Expenditure (GFCE) rose 6.48 per cent year-on-year and Gross Fixed CapitalFormation increased 10.64 per cent year-on-year during October-December 2018. FixedInvestment Rate (Share of GFCF to GDP) stood at 28.9 per cent during FY19 compared to28.6 per cent during the corresponding period of FY18.
Overall year-on-year growth in the Index of Industrial Production (IIP) was 0.1 percent in February 2019 which was at 6.9 per cent in February 2018. During April 2018February 2019 IIP growth stood at 4.0 per cent year-on-year as compared to growth of 4.3per cent year-on-year during April 2017 February 2018.
The Rupee exchange rate (Re/US$) stood at 71.1540 at the end of February 2019 comparedto 71.0333 at the end of January 2019. The Real Effective Exchange Rate (REER) (6-CurrencyTrade Based Weights with base year 2004-05) stood at 112.76 for February 2019 compared to113.84 for January 2019.
2. Economic Outlook
Ship breaking industry or Ship recycling industry has seen a major shift to Asiancounterparts over the period owing to the environment concerns. On one hand ship breakingis a green process wherein a ship at end of its life cycle is being dismantled and eachpart is sent further for reuse but on the other hand the complex process of dismantlinginvolves issues like labour safety and health and further it poses challenges onenvironment as well which is a matter for criticism. However the ship breaking activityis being recognized as major source of steel for re-rolling steel plants The decision tosend the ship for the purpose of recycling depends on the life of the ship and how quicklydoes the ship become obsolete. The ship can be considered to have become obsolete on thebasis of following 3 parameters
|Physical Obsolescence ||Indicates the physical condition of the ship and deterioration with time. Spend an increased amount on repairs and maintenance. |
| ||Recycling of ship becomes a cheaper option and results in positive cash flows |
|Technical Obsolescence ||Being physically sound but no longer profitable to remain in service due to increased competitiveness by a more efficient ship Scrapping of ships due to regulatory requirements. |
|Regulatory Obsolescence ||Issues such as port state controls vetting inspections and statutory surveys and other regulatory requirements lead to believe that scrapping the ship is more convenient than maintaining the ship and adhering to regulatory requirements. |
Process of ship procurement for recycling : A ship owner can choose either of twooptions: either sell the ship directly to a ship recycling yard or sell it through a cashbuyer. Most ship owners prefer to choose the latter strategy because cash buyers pay alump sum to the ship owners in cash in advance and charge approximately 3% commission toclose the deal. The role of cash buyers is negotiation and bearing financial risk sincethey sign a contract and pay the owner till they get paid for delivering a ship to arecycling yard. The price offered to a ship owner is in terms of USD per lightdisplacement tonnes (LDT).
The following financial performance and analysis details of various plants/segments isintended to convey the Management's perspective on the financial and operating performanceof the Company at the end of Financial Year 2018-19. It should be read in conjunction withthe Company's financial statements the schedules and notes thereto and other informationincluded elsewhere in the Integrated Report. The Company's financial statements have beenprepared in accordance with Indian Accounting Standards (Ind AS') complying with therequirements of the Companies Act 2013 and guidelines issued by the Securities andExchange Board of India (SEBI'). Aspects on industry structure and developmentsoutlook risks internal control systems and their adequacy and material developments inhuman resources have been covered herein below.
|Financial Performance and Analysis || || |
| || ||(Rs. in Lakhs) |
|Particulars ||For the year ended |
| ||March 31 2018 ||March 31 2019 |
|Revenue from operations(1) ||15717.02 ||37729.63 |
|Other Income ||2087.60 ||2079.62 |
|Total Revenue ||17804.62 ||39809.25 |
|Cost of raw materials consumed ||5360.34 ||11805.86 |
|Purchase of Stock in - Trade ||23404.46 ||10108.58 |
|Changes in inventories of finished goods stock in trade work in process ||(13887.59) ||14859.03 |
|Employee benefits expenses ||178.79 ||254.28 |
|Finance costs ||390.75 ||77.80 |
|Excise Duty ||102.52 ||- |
|Depreciation and amortization expenses ||45.33 ||50.41 |
|Other expenses ||1185.21 ||1667.57 |
|Total Expenses ||16779.81 ||38833.54 |
|Profit / (Loss) before Exceptional Items and Tax ||1024.81 ||975.71 |
|Exceptional Items ||- ||- |
|Profit / (Loss) before tax ||1024.81 ||975.71 |
|Less: Current Tax ||51.67 ||155.51 |
|Less: Deferred Tax ||(7.82) ||5.84 |
|Profit / (Loss) after tax ||980.96 ||814.37 |
|Other Comprehensive Income ||0.46 ||0.41 |
|Total Comprehensive Income for the year ||981.42 ||815.18 |
|Earnings Per Share (Face Value of Rs. 10/- each) || || |
|-Basic ||15.91 ||13.22 |
|-Diluted ||15.91 ||13.22 |
|Particulars ||For the year ended |
| ||March 31 2018 ||March 31 2019 |
|Net Fixed Assets (including Capital Advances and CWIP) ||869.83 ||964.90 |
|Investment ||10707.53 ||13077.89 |
|Net Assets (Current and Non Current) ||46859.84 ||26485.38 |
|Share Capital ||616.67 ||616.67 |
|Reserves and Surplus ||11840.99 ||12656.17 |
|Financial Liabilities ||31126.03 ||8980.74 |
Your Company reported an increase in Revenue from Rs.15717.02 lakhs during theprevious year to Rs. 37729.62 Lakhs during the year. The profit after tax declined fromRs. 980.96 lakhs in the previous year to Rs. 814.37 Lakhs during the year under review.The other expenses of the Company have been relatively increased by Rs. 492.36 Lakhs ascompared to the previous year expenses.
The Company has not been able to perform well during the year in terms of total salesturnover due to various factors like fluctuations in the exchange rate of US Dollarvis-a-vis Indian Rupee and volatile prices of iron and steel products and volatile marketconditions prevalent in the steel sector throughout the year.
Operating Profit (EBITDA)
The Operating Profit of the Company including other income and finance income is Rs.1103.92 Lakhs (previous year Rs. 1460.89 Lakhs).
The Finance cost of the Company has considerably reduced during the year and Rs. 77.79Lakhs as compared to Rs.390.75 Lakhs in previous year.
Depreciation and Amortization Expenses
During the year depreciation and amortization expenses increased to Rs. 50.41 Lakhsfrom Rs. 45.33 Lakhs in previous year.
DETAILS OF VARIOUS PLANTS/ SEGMENTS: Ship Breaking & Trading (Bhavnagar)
During the financial year 2018-19 ship breaking at Alang Ship Breaking Yard andTrading Unit have performed well. The management is of the view that in the coming yearsthe ship breaking industry will be stable and with expected boost in the economy therequirement of iron and steel will increase which will help the company to move towardsits sustained path of growth.
Trading & Investment Unit (Mumbai - HO)
During the year under review the Mumbai Trading Unit has not carried out any tradingactivities due to various factors like fluctuations in the exchange rate of US Dollarvis-a-vis Indian Rupee and volatile prices of Iron and steel products and volatile marketconditions prevalent in the steel sector throughout the year.
The activities of the company viz. trading in Ferrous and Non Ferrous Metals Scrapetc. are contributing considerably to the profitability of the company. Moreover theinvestment division of the company is also doing well. Your directors see a very positiveand bright future prospects ahead for the company looking to the prevailing upward trendin the Iron and Steel sector in India and internationally.
The company is into a partnership in M/s. Hariyana Air Products (with 95% share) forthe manufacture and supply of Industrial Oxygen Gas. Moreover the partnership firm hasstarted trading activities in ferrous and non ferrous metals. During the year the firm hasperformed well in terms of Sales Turnover as Revenue from operations for the year were Rs.1683.92 Lakhs against Rs. 92.95 Lakhs for the preceding financial year. Consequently thefirm was able to increase its profit margin as well. Net profit after tax of the firm wasRs. 121.74 Lakhs. Further with proximity to Alang Ship Breaking Yard and huge captiveconsumption requirements of group companies the firm expects good long term benefits fromthe said partnership venture.
Real Estate & Construction:
The Company is also taking interest into real estate business. For which has been intoPartnership in the name of White Field Projects (with 40% share) forconstruction & selling of residential apartments. The construction work of the Projectis fully completed and all of the flats have been sold. The company's share of loss fromthe firm during the year under report is Rs. Nil.
The Company has also been into partnership (with 33.33% share) M/s. SwastikDevelopers for construction of building. The firm has acquired 66 Acres of land inGoa. The project is expected to commence soon.
The company has also been into partnership in M/s. White Mountain (with 25%share). Presently the firm has completed one project at Thindlu Indrasanahalli &Singrahalli Village KundanaHobli Devanahalli Taluk. The firm has acquired 44 acres and20 Guntas of land with the object of developing 386 plots of various sizes. Firm hascompleted plot development work in December 2016 and already booked 342 plots till31.03.2018. The company's share of profit from the firm is Rs. 190.84 Lakhs for the yearended on March 31 2018.
The company has also been into partnership in M/s. Orchid LakeviewDevelopers (with 33.33% share). The firm is having the project at Bellandur VillageVarthurHobli Bangalore East Taluk with an object of construction 2 & 3 BHKapartments consisting 336 appartments. The company's share of profit from the firm is Rs.523.93 Lakhs for the year ended on March 31 2018.
The company has also entered into partnership and formed a partnership firm GoyalHariyana Realty (with 50% share). Presently firm is having one Project at Bellandur.This location is situated at Bellandur Village Varthur Hobli. Bangalore East Taluk. Total336 Apartments of 2 BHK and 3 BHK. The Project has already been completed and ready togive possession and firm has already booked 274 apartments and Registration done for 262apartments till 31.03.2018. The company's share of profit from the firm is Rs. 154.21Lakhs for the year ended on March 31 2018.
The company has also entered into partnership and formed a partnership firm ShreeBalaji Associates (with 5% share). The firm is engaged in the business of trading iniron & steel coal and real estate. The company's share of loss from the firm is Rs.8.59 for the year ended on March 31 2018.
The company has also entered into partnership and formed a partnership firmHariyana Developers (with 51% share) for redevelopment of old buildingsconstruction of new buildings and real estate activites. The firm is entitled todevelopment right in respect of 8 properties admeasuring 6492.62 Sq. Mtrs. of land andstructures at Pant Nagar Ghatkoper (East) Mumbai. The project is expected to commencesoon.
Indian Ship-recycling Industry:
In India full-fledged ship breaking practices started around 1980s in Mumbai andKolkata and later Alang in Bhavnagar district Gujarat was developed for ship breakingowing to its various advantages listed below and is considered the world's largest shipbreaking facility. Alang became centre of ship breaking activities in the world post1991-92. The shipyards at Alang recycle approximately half of all ships salvaged aroundthe world. It accounts for 98% of total ships recycled in India.
1. The site falls in the high tide zone where the highest tide reaches up to 10 to 11meters. This is considered to be most favorable for beaching purpose.
2. This site is located in the Gulf of Khambhat and whose harbors are protected areasduring rainy season which allows ship breaking activity.
3. The coast of Alang is sloping and has a long dry area which facilities reaching upvessels.
4. The seabed at Alang dries up very quickly even during monsoon thus facilitating thehandling as all kinds of material and equipment.
5. The area along the coast as Alang is free from other competitive users likemerchant shipping fishing and salt work.
Alang is witnessing a drastic shift especially towards green ship recycling and it isreimaging its outlook by following all the certification upgrading infrastructure safetystandards and being environmentally conscious. Ship recycling in India contributes around1 to 2% for domestic steel demand and most of dismantled ship scraps are recycled andreused.
The ship breaking industry at Alang in Gujarat witnessed a 12 per cent drop in businessduring the just-ended fiscal 2017-18 as a two-year-old ship recycling policy struggled toinfuse fresh life in to a sector that is increasingly being challenged by competition fromneighbouring Pakistan and Bangladesh.
Factors Affecting Indian Ship-recycling Industry:
1. Movement in Freight Prices:
Majorly the current earnings and future expectations drive the ship recyclingindustry. The movement in the freight prices is indicated by the Baltic Dry Index (BDI).BDI is basically shipping and a trade index created by London Based Baltic Index. Otherindex include Baltic Dirty Tanker Index and Baltic Clean tanker index which is linked tofreight prices of Oil tankers. These indexes specify the cost of transportation to shipowners. The cyclicality in the ship breaking industry is inherent with its negativecorrelation with the Baltic indexes. Better availability of ships are expected at the timeof recession when the freight rates are lower as ship owners find it economical to sendthe ship for the purpose of recycling rather than using the ship further. Ship breaking atAlang had declined significantly over the years impacted by the availability of ship withrise in Baltic Indexes
2. Scrap Prices vis-a-vis steel price movement:
Profitability of ship breakers is susceptible to steel scrap prices which are linked toglobal steel prices while post ship purchase ship recycler/breaker have to bear the pricerisk. The scrap prices hold less importance for ship owner when it comes to decidingwhether a ship should be scrapped or not. The ship breaking industry contribute smallproportion to steel industry viz. around 1.5% of the steel requirement and so the scrapprices are affected by the market scrap steel price rather than demand and supply of ship.The volatility in steel prices driven by demand and supply conditions in the global aswell as local markets exposes ship-recycling companies to any adverse price movement onthe uncut ship inventory as well as unsold inventory of steel scrap held by them. In paststeel scrap prices had remained volatile in nature
3. Competition from the global peers:
Indian ship-recycling yard face intense competition from the neighbour countries likeBangladesh and Pakistan due to availability of low wage labour lax occupational healthand environment related regulations and partial enforcement. Furthermore the currencyalso plays a key role in determining competitiveness of Indian ship breakers.
4. Forex Risk and high hedging cost:
Majority of the ship breakers purchase ships by way of Letter of Credit (LC) and tenurefor the same depends upon the size of the ships and its recycling period which normallyranges from anywhere between 90-270 days. Since the transaction is denominated in foreigncurrency at time of purchase of ship and there is time lag in actual sales after shipbreaking leading to exposure of their profitability to forex risk. Banks normally keep 10%as FD margin and require ship breakers to keep their sales receipts after meeting expensesas FD till full repayment. Furthermore due to high hedging cost compared to lowprofitability ship breakers are often resistant to hedge its cash flow.
5. Regulatory Risk:
The ship-breaking industry is highly regulated with strict working and safety standardsto be maintained by the ship-breakers for their labourers and environmental compliance.Furthermore the industry is prone to risks related to pollution as it involvesdismantling of ships which contain various hazardous substances like lead asbestosacids hazardous paints etc. that have to be properly disposed-off as per the regulatoryguidelines. The key areas include ground pollution water pollution and health and safetyof workforce. Over the period importance of green ship recycling procedures had increasedsignificantly even for seller there are pressures for selling ships to the green certifiedyards. There are various certification agencies which certify the recycling facilitiescompliance to the Hong Kong International Convention guidelines. The Hong KongInternational Convention for the Safe and Environmentally Sound Recycling of Ships adoptedby the International Maritime Organization (IMO) in May 2009 and the European RegulationNo. 1257 adopted by European Parliament and Council in November 2013 provide a legallybinding instrument which ensures that the process of ship recycling does not pose risks tohuman health safety and to the environment. The certification agency have its guidelineregarding the waste disposal effluent treatment safety of workers and maintenance ofrecords.
6. Industry's Initiative/ Structure and Developments
A proposed eco-friendly law may further boost the prospects of ship-breaking industryas it returns to a buoyant business cycle. India has begun cleaning up its tarnishedship-breaking industry. Accordingly the Union government has drafted a law to implementthe Hong Kong International Convention for the Safe and Environmentally Sound Recycling ofShips. This convention was adopted by the International Maritime Organization (IMO) in2009.
A draft legislation to implement the Hong Kong Convention to make the ship-recyclingindustry safe for its workers and the environment is now undergoing pre-legislativeconsultations. The Hong Kong convention is yet to come into force as it has not beenratified by 15 countries representing 40 per cent of the world's merchant shipping bygross tonnage. Only six countries - Norway Congo France Belgium Panama and Denmark -have ratified it so far. The proposed Safe and Environmentally Sound Recycling of ShipsBill 2016 aims to give effect to the provisions of the Hong Kong Convention. The Billmakes it mandatory for ships to carry out all recycling activities in a safe manner andaccording to global practices. Any violation in this regard could attract a fine of Rs 10lakh and a six-month imprisonment.
Since 2015 the around Rs 10000-crore Indian ship-recycling industry has voluntarilystarted adopting global best practices in dismantling discarded ships. The industry hastaken up this clean-and-green initiative even before the legislation was enacted. Some 55of the 120 working yards have won the Hong Kong Convention's compliance certificates fromglobal ship classification societies. Another 15 other yards are being audited forcertification.
As Alang gets its clean-up act together ship-breaking companies are betting big onbrightening business prospects. The deserted scrapping beaches are now full with ships.The ship-breaking yards are buzzing with activity as huge vessels are dismantled by scoresof workers. Back in Bhavnagar about 50 km from Alang ship-recycling companies are busyfirming up deals with scrap dealers steel re-rollers logistics suppliers and buyers ofsecond-hand electrical items furniture computer and kitchen cabinets.
The company is in the business of ship breaking trading and investment activities.
During the financial year 2018-19 witnessed frequent fluctuation in the prices of oldship in the international market and also heavy dollar exchange rate fluctuations. In suchan uncertain market environment in Iron and Steel industry the management took cautiousapproach to the prevalent affairs and avoided any venturous business decision in theinterest of the company which resulted in increased profit margin of the unit. Moreoverthe management hope that the trading unit will show an increase in terms of sales as wellas profits in the coming years.
Moreover the prices in Iron and steel industry are gradually getting stabilized butforeign currency and fluctuations in value of Indian Rupee vis-a-vis US Dollar remains aconcerning area for the company even in the current year. The management is exercisingcaution in purchase of ships for breaking to optimize the profit margin and minimize thepossibilities of losses if so happens.
As and when surplus funds are available with the Company the Company lent the samewith a view to earn interest and short term and long term capital gains. The Company hasentered into partnership in various construction and real estate projects and has acquireda major share in such real estate investments. Such projects are expected to yield goodprofits to the Company in short to medium term of periods.
During the financial year 2018-19 ship-breaking & trading unit is expected to growsubstantially in coming years. Due to fluctuating and volatile prices of old Ships Ironand Steel products coupled with fluctuations in value of Indian Rupee vis-a-vis US Dollarduring the year the net profit margins of this segment has been affected. However themanagement is of the view that in the coming years the ship breaking industry will bestable and with expected boost in the economy the requirement of iron and steel willincrease which will help the company to move towards its sustained path of growth.
Ship breaking & Trading (Bhavnagar):
During the year under consideration total sales were Rs.37729.62 Lakhs as against Rs.15717.02 Lakhs. Ship-breaking unit at Alang Ship Breaking Yard has outperformed and showna growth.
Trading & Investments (HO-Mumbai) :
During the financial year 2018-19 the company has not performed any trading activitiesdue to fluctuating and volatile prices of Iron and Steel products and other metals. Themanagement is of the view that in the coming years the iron and steel industry will bestable and with huge budgetary allocations by the Central as well State Governments forInfrastructure Development Projects it is expected that this will be boosting factor forthe economy and the requirement of iron and steel will increase which will help thecompany to move towards its sustained path of growth.
Segment-wise Standalone Ind AS Financial Results
| || || ||(Rs. in Lakhs) |
|Particulars ||Trading & Investment (Mumbai) ||Ship-Breaking & Trading (Bhavnagar) ||Total |
|a) Revenue from External Source ||- ||37729.63 ||37729.63 |
|b) Segment Results Before Interest and Taxes ||154.53 ||898.98 ||1053.51 |
|c) Segment Assets ||15101.84 ||11383.54 ||26485.38 |
|d) Segment Liabilities ||3687.02 ||9525.53 ||13212.55 |
Standalone Cash Flow Analysis (Rs. in Lakhs)
|Particulars ||March 31 2018 ||March 31 2019 |
|- Net Cash Flow from Operating Activities ||184.85 ||(4239.03) |
|- Net Cash Outflow from Investing Activities ||5130.30 ||(381.29) |
|- Net Cash Outflow from Financing Activities ||(899.82) ||225.85 |
|- Net Cash Inform/(Outflow) ||4415.33 ||(4394.47) |
Effective governance and risk management form the bedrock of a company's sustainedperformance. Risk management aims to identify and then manage threats that could severelyimpact the organization. Generally this involves reviewing operations of theorganization identifying potential threats to the organization and the likelihood oftheir occurrence and then taking appropriate actions to address the most likely threats.The objectives are to optimize business performance minimize adverse impact on thebusiness protect it from damages frauds and enhance stakeholder value.
The framework revolves around rigorous implementation of standardized policies andprocesses and development of strong internal control systems. Your Company has set upinternal controls and policies related to financial reporting of transactions andefficient business operations in compliance with relevant laws and regulations. Internalreporting systems are in place for effective measurement of various business parametersrelated to revenue expenses and reporting in line with the provisions of the Act.
The Company operates in an interconnected world with stringent regulatory andenvironmental requirements increased geopolitical risks and fast-paced technologicaldisruptions that could have a material impact across the value chain of the organisation.The Company's finished products are mainly re-rollable scrap generated from ship breakingand the price of the same is linked to the market rate for iron and steel. Any fluctuationin the price of the iron and steel affects the profitability of the Company. Thus theCompany is exposed to the risk from the market fluctuations of foreign exchange as well asthe fluctuation in the price of iron and steel. The Company's raw material is old shipswhich are purchased from the international market on credit ranging up to 180 days to 360days. The Company is adopting policy of hedging or covering the foreign exchangerequirement. The Company is regularly monitoring the foreign exchange movement andsuitable remedial measures are taken as and when felt necessary. Though the Company isemploying such measures the Company is still exposed to the risk of any heavy foreignexchange fluctuation.
In addition to the above the Company is also exposed to the risk of fluctuation in thereal estate and construction and redeveloping market as the Company has invested some ofits surplus funds in partnership firm engaged in such business. The Company through itsrisk management process aims to contain the risks within its risk appetite. There are norisks which in the opinion of the Board threaten the existence of the Company.
Outlook Way Forward
Your Company expects FY 2019-20 to be better as the after-effects of demonetisation andGST implementation seem to have subsided. As per economic surveys India continues to bethe fastest growing economies in the world and is expected to continue in FY2019-20 aswell. This is supported well by favourable factors such as policy reforms. The Companyexpects to take advantage of the growth opportunity provided by the Indian economy.
India will be the brightest spot for the steel sector over the next 12-18 monthsaccording to Moody's Investors Service. A Moody's statement said India's steel consumptionis rising at least 5.5 per cent to 6 per cent every year tracking strong GDP growth of7.3 per cent to 7.5 per cent. Profitability as measured by average EBITDA per tonne forour rated steel companies will grow slightly over the next 12 months following a strongimprovement in 2017 underpinned by steady regional demand. China's capacity cuts andstringent environmental protection measures will also support profitability. Theprofitability of rated Japanese and Korean companies will diverge because of theirdiffering exposures to various end-markets and China Baowu Steel Group Corporation Ltd'sEBITDA per tonne will fall slightly because of an expected decline in demand and prices.
Asian steel demand will remain steady over the next 12 months to June 2019 becausesolid growth in 2018 will offset a likely softening in 2019. The expected softening indemand in 2019 is because China's apparent demand will likely decrease by alow-single-digit percentage reflecting likely slowdowns in the growth of the propertysector and in infrastructure investments the statement added. The expected decline inChina's steel demand also factors in the ongoing US-China trade dispute given theindirect impact through supply chains.
Your directors see a very positive and bright future prospects ahead for the companylooking to the prevailing upward trend in the Iron and Steel sector in India andinternationally.
The management is of the view that in the coming years the ship breaking industry willbe stable and with expected boost in the economy the requirement of iron and steel willincrease which will help the company to move towards its sustained path of growth.
*References: The Indian Express The Economic Times Media reports Press releasesPress Information Bureau (PIB) Joint Plant Committee (JPC) S&P Global Platts.
Internal financial controls and its adequacy
Internal financial control systems of the Company are commensurate with its size andnature of its operations. These have been designed to provide reasonable assurance withregard to the orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and the timely preparation ofreliable financial information and disclosures.
Systems and procedures are periodically reviewed and these are routinely tested byStatutory as well as Internal Auditors and cover all functions and business areas. TheAudit Committee reviews adequacy and effectiveness of the Company's internal controlenvironment and monitors the implementation of audit recommendations including thoserelating to strengthening of the Company's risk management policies and systems. Duringthe year under review no material or serious observation has been received from theStatutory Auditors and the Internal Auditors of the Company on the inefficiency orinadequacy of such controls.
Your Company treats its human resources as one of its most importantassets.
We continuously invest in attraction retention and development of talent on an ongoingbasis. Our thrust is on the promotion of talent internally through job rotation and jobenlargement. We believe in harnessing its leadership and people capabilities through sharpfocus and initiatives on talent development.
We review our talent based on their performance and potential to assess their readinessfor future roles of higher scale and complexity. We believe in developing our employeesthrough multiple experiences requiring them to handle scale and complexity. We haveinstituted this through varied job rotation and project roles. We have put in placevarious recognition initiatives for our employees to reward them on their noteworthyperformance and contribution.
Our Company is committed to providing work environment that ensures every employee istreated with dignity and respect and afforded equitable treatment. The Company is alsodedicated at promoting a work environment that is conducive to the professional growth ofits employees and encourages equality of opportunity. To foster a positive workplaceenvironment free from harassment of any nature we have institutionalized the Anti SexualHarassment Framework through which we address complaints of sexual harassment at theworkplace. We follow a gender-neutral approach in handling complaints of sexual harassmentand we are compliant with the law of the land where we operate. We have also constitutedComplaints Committee to consider and address sexual harassment complaints in accordancewith Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013.
Consolidated Financial Statement
As per applicable provisions of the Companies Act 2013 (the Act) if anyread with the Rules issued thereunder and in accordance with principles and procedures asset out in the Indian Accounting Standards (Ind AS) notified under the Companies (IndianAccounting Standards) Rules 2015 the Consolidated Financial Statements of the Companyfor the financial year ended March 31 2019 have been prepared.
The Consolidated Financial Statements together with the Auditors' Report form part ofthis Annual Report.
Details of Subsidiary/Joint Ventures/Associate Companies
The Company has no subsidiary associate companies or joint venture companies withinthe meaning of Section 2(6) and 2(87) of the Act and thus pursuant to the provisions ofSection 129(3) of the Act the statement containing the salient features of financialstatements of the Company's subsidiaries in Form AOC-1 is not required to be attached tothe financial statements of the Company.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
Your Directors have considered it financially prudent in the long term interest of theCompany to reinvest the profits into the business of the Company to build strong reservebase meet the funds requirement and grow the business of the Company. Thus your Board ofDirectors regret their inability to recommend any dividend for the year ended March 312019.
Loans Guarantee & Investments
Loans guarantees and investments covered under Section 186 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 as on March 312019 if any form part of the Notes to the Standalone Financial Statements provided inthis Annual Report.
Contracts or Arrangements with Related Parties
As per the provisions of Section 188(1) of the Act read with Companies (Meetings ofBoard and its Powers) Rules 2014 and Regulation 23 of the Listing Regulations allcontracts/arrangements/transactions entered by the Company with Related Parties were inordinary course of business and at arm's length basis.
All Related Party Transactions entered into during the year under review were approvedby the Audit Committee and the Board from time to time and the same are disclosed in theFinancial Statements of your Company for the year under review.
Further pursuant to the provisions of the Act and the SEBI Listing Regulations theBoard has on recommendation of its Audit Committee adopted a Policy on Related PartyTransactions and the said policy is available on the website of the Company i.e.www.hariyanagroup.com.
Further 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. There were nomaterially significant related party transactions which could have potential conflict withinterest of the Company at large.
Accordingly Form AOC-2 prescribed under the provisions of Section 134(3)(h) of the Actand Rule 8 of the Companies (Accounts) Rules 2014 for disclosure of details of RelatedParty Transactions which are not at arm's length basis and also which arematerial and at arm's length basis is not provided as an annexure to theBoard's Report.
Directors and Key Managerial Personnel (KMP) Inductions
Mr. Kirti Desai was appointed as the Chief Financial Officer of the Company with effectfrom 26.10.2018.
Ms. Swati Chauhan resigned as the Company Secretary of the Company with effect from28th February 2019. Ms. Kanika Jain was appointed on her behalf with effect from 8th March2019 however she too resigned with effect from 13th April 2019.
In accordance with the provisions of the Act and the Articles of Association of theCompany Mrs. Unnati Reniwal Director of the Company retire by rotation at the ensuingAnnual General Meeting and being eligible seeks re-appointment. The Board of Directors onthe recommendation of the Nomination and Remuneration Committee has recommended hisre-appointment at the forthcoming Annual General Meeting.
All the Independent Directors of the Company have given their respective declarationsstating that they meet the criteria of Independence as provided in Section 149(6) of theAct and Regulation 16(1)(b) of the SEBI Listing Regulations and there has been no changein the circumstances which may affect their status as an independent director during theyear. During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
Further the list of the present Directors and KMP forms part of this Annual Reportunder the section Company details.
Performance Evaluation of the Board
In terms of the provisions of the Act the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI ListingRegulations) and Nomination Policy of the Company NARC and the Board have approveda framework which lays down a structured approach guidelines and processes to be adoptedfor carrying out an evaluation of the performance of the Board its Committees andindividual Directors.
During the year under review the Board carried out the evaluation of its ownperformance and that of its Committees and the individual Directors.
The evaluation process focused on various aspects of the functioning of the Board andits Committees such as composition of the Board and Committees attendance of Directorsat Board and committee meetings acquaintance with business communicating inter se boardmembers effective participation domain knowledge compliance with code of conductvision and strategy experience and competencies performance of specific duties andobligations governance issues etc. The Board also carried out the evaluation of theperformance of individual directors based on criteria such as contribution of the directorat the meetings strategic perspective or inputs regarding the growth and performance ofthe Company etc.
Outcome of the Evaluation Board:
The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairman alongwith assessing the quality quantity andtimeliness of flow of information between the Company Management and the Board that isnecessary for the Board to effectively and reasonably perform their duties. Theperformance evaluation of the Board is carried out taking into account the variousparameters like composition of Board process of appointment to the Board commonunderstanding amongst Directors of their role and responsibilities timelines and contentof Board papers strategic directions advice and decision making etc. The Board alsonotes the actions undertaken pursuant to the outcome of previous evaluation exercises.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the independent director being evaluated.
The Chairman of the respective Committees shared the report on evaluation with therespective Committee members. The performance of each Committee was evaluated by theBoard based on report on evaluation received from respective Committees.
The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors.
Committees of the Board :
The Committee's self-assessment is carried out based on degree of fulfillment of keyresponsibilities adequacy of Committee composition effectiveness of meetings Committeedynamics and quality of relationship of the Committee with the Board and the Management.
The Independent Director(s) also evaluated the performance of Non-IndependentDirectors the Chairman of the Board and the Board as a whole at the meeting ofIndependent Director(s) held on March 31 2019. The outcome and feedback from Directorswas discussed at the respective meetings of Board Committees of Board and meetings ofIndependent Directors.
The overall performance evaluation exercise was completed to the satisfaction of theBoard. The Board of Directors deliberated on the outcome and necessary steps will be takengoing forward.
The details of the evaluation process are set out in the Corporate Governance Reportwhich forms a part of this Annual Report.
Number of meetings of the Board
During the year 9 (Nine) Board meetings were held. The details of the composition ofthe Board and its Committees and of the meetings held and attendance of the Directors atsuch meetings are provided in the Corporate Governance Report.
Committees of the Board
A. AUDIT COMMITTEE:
The composition of the Audit Committee is in alignment with provisions of Section 177of the Companies Act 2013 read with the Rules issued there under and Regulation 18 of theListing Regulations.
All the recommendations made by the Audit Committee were accepted by the Board ofDirectors of the Company.
The details pertaining to Audit Committee and its composition are included in theCorporate Governance Report which forms part of this report.
B. NOMINATION AND REMUNERATION COMMITTEE (NARC'):
Your Company has a duly constituted NARC with its composition quorum powers roleand scope in line with the applicable provisions of the Act and SEBI Listing Regulations.The detailed information with respect to the NARC is disclosed in the Corporate GovernanceReport forming part of this Annual Report.
Nomination Policy and Remuneration Policy/ Philosophy
The Board has on recommendation of the NARC adopted a Nomination Policy whichenumerates your Company's policy on appointment of Directors and Key Managerial Personnel(KMP) including criteria for determining qualifications positive attributesindependence of a director and other matters provided under Section 178(3) of the Act.
The Nomination Policy is enacted mainly to deal with the following matters fallingwithin the scope of the NARC:
to institute processes which enable the identification of individuals who arequalified to become Directors and who may be appointed as KMP and/or in senior managementand recommend to the Board of Directors their appointment and removal from time to time;
to devise a policy on Board Diversity;
to review and implement the succession and development plans for ManagingDirector Executive Directors and Senior Managers;
to formulate the criteria for determining qualifications positive attributesand independence of Directors; and
to establish evaluation criteria of Board its Committees and each Director.
Further the Board has on recommendation of the NARC also adopted a policy entailingRemuneration Philosophy which covers the Directors KMP and employees included in SeniorManagement of the Company.
While formulating this policy the NARC has considered the factors laid down underSection 178(4) of the Act which are as under:
the level and composition of remuneration is reasonable and sufficient toattract retain and motivate directors of the quality required to run the companysuccessfully;
relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
remuneration to directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long-termperformance objectives appropriate to the working of the company and its goals.
Both the aforesaid policies are available on the website of the Company i.e.www.hariyanagroup.com.
C. STAKEHOLDERS' RELATIONSHIP & SHARE TRANSFER COMMITTEE:
The details pertaining to composition of the Committee is included in the CorporateGovernance Report which forms part of this report.
D. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR COMMITTEE):
In terms of the provisions of Section 135 of the Act read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your Company has a duly constituted CSRCommittee comprising the following members:
|Name of Member ||Designation |
|1 Mr. Rakesh Reniwal ||Chairman |
|2 Mr. Pradeep Bhatia ||Member |
|3 Mr. Tejas Thakker ||Member |
Mr. Shantisarup Reniwal Chairman and Executive Director of the Company is thePermanent Invitee to the CSR Committee Meetings.
Policy on Corporate Social Responsibility (CSR)
The Board has with a vision to actively contribute to the social and economicdevelopment of the communities in which your Company operates and in doing so build abetter sustainable way of life for the weaker sections of society and raise the country'shuman development index adopted a CSR Policy and the same is available on thewebsite of the Company i.e. www.hariyanagroup.com.
The CSR Policy of the Company also mentions the process to be implemented with respectto the identification of projects and philosophy of the Company alongwith key endeavoursand goals i.e.
Education - to spark the desire for learning and knowledge;
Health care - to render quality health care facilities to people living in thevillages and elsewhere;
Sustainable Livelihood - to provide livelihood in a locally appropriate andenvironmentally sustainable manner;
Infrastructure Development - to set up essential services that form thefoundation of sustainable development; and
Social Cause - to bring about the Social Change we advocate and support.
Corporate Social Responsibility (CSR) initiatives taken during the year
In terms of section 135 and Schedule VII of the Act the Corporate SocialResponsibility Committee (CSR Committee) has formulated and recommended to the Board aCorporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company which has been approved by the Board.
The CSR Policy may be accessed on the Company's website i.e. www.hariyanagroup.com.
Your Company's CSR activities are mainly focused towards Literacy Education SkillingHealth and Sanitation.
During the financial year ended March 31 2019 based on these rules the Company to bespent was Rs. 1617694/- of which Company incurred Rs. 1618000 (Rupees Sixteen LakhsEighteen Thousand only) towards Corporate Social Responsibility.
The Company's CSR policy statement and annual report on the CSR activities undertakenduring the financial year ended March 31 2019 in accordance with Section 135 of theCompanies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) is set out in the Annexure-I to this report.
Extract of Annual Return
The extract of the Annual Return of the Company as on March 31 2019 in Form MGT - 9 inaccordance with Section 134(3)(a) Section 92 (3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 is appended as Annexure-II to theBoard's Report.
A separate section on Corporate Governance forming part of the Board's Report and isincluded in the Annual Report as Annexure-III to the Board's Report.
Auditors and Auditors' Report Joint Statutory Auditors
M/s. P. D. Goplani & Associates Chartered Accountants Bhavnagar having ICAI FirmRegistration No. 118023W were appointed as Auditors of the Company at the Annual GeneralMeeting held on September 30 2017 for a term of 5 (five) consecutive years i.e. to holdoffice from the conclusion of 36th Annual General Meeting until the conclusion of 41stAnnual General Meeting of the Company to be held in the financial year 2022.
M/s. Lahoti Navneet & Co. Chartered Accountants Mumbai having ICAI FirmRegistration No. 116870W were appointed as Auditors of the Company at the Annual GeneralMeeting held on September 29 2018 for a term of 4 (four) consecutive years i.e. to holdoffice until the conclusion of 41st Annual General Meeting of the Company to be held inthe financial year 2022.
Further the Joint Statutory Auditors have confirmed that they are not disqualified toact as Auditors and are eligible to hold office as Auditors of your Company for financialyear 2019-20.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer. Also no frauds interms of the provisions of Section 143(12) of the Act have been reported by the StatutoryAuditors in their report for the year under review.
The Board had appointed M/s. Dilip Bharadiya & Associates Practicing CompanySecretaries to conduct Secretarial Audit for the FY 2018-19. The Secretarial Audit Reportfor the financial year ended March 31 2019 is annexed herewith marked as Annexure-IV tothis Report.
The Secretarial Audit Report does not contain any qualification reservation adverseremark or disclaimer.
Further pursuant to provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014; the Board of theCompany at its meeting held on May 30 2019 has re-appointed M/s. Dilip Bharadiya &Associates Practicing Company Secretaries (Certificate of Practice No. 7956) toundertake the Secretarial Audit of the Company for the financial year 2019-20.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability state that:
(i) in the preparation of the annual accounts for the financial year ended March 312019 the applicable account- ing standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
(ii) 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 as at March 31 2019 and of the profitand loss of the Company for the financial year ended March 31 2019;
(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) the annual accounts have been prepared on a going concern basis;
(v) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and operating effectively;
(vi) proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems are adequate and operating effectively.
Conservation of energy technology absorption foreign exchange earnings and outgo
The Company makes all efforts towards conservation of energy protection of environmentand ensuring safety.
The particulars as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 with respect to conservation ofenergy technology absorption and foreign exchange earnings and outgo is as follows:
A. Health Safety and Environment: The Company aims to provide a safe and healthyworkplace to our employees visitors and contract workers and achieve high standards ofenvironment protection. We are certified to the following:
|Certificate No./ Standard ||Description/Compliance/Requirement |
|ISO 9001:2008 Quality Management System ||Sale of steel recyclable items from ship and machineries derived from ship recycling and handling of hazardous and non- hazardous material |
|ISO 14001:2004 Environmental Management System ||Selection of vessel for ship recycling ship recycling including all material on Board of the ship handling and disposal of hazardous (including asbestos PCB oily waste) and non- hazardous wastes and sale of items derived from ship recycling including ferrous and non- ferrous metal reusable machineries equipments materials (insulation oil batteries) |
|ISO 30000:2009 Ship and Marine Technology- Ship Recycling Management Systems ||Safe Environmentally Sound and Green Ship Recycling including hazardous (including asbestos PCBs oily waste) and non- hazardous material handling. Also sale of steels equipments machines obtained from the ship |
|OHSAS 18001:2007 Occupational Health and Safety Management System ||Selection of vessel for ship recycling ship recycling including all material on Board of the ship handling and disposal of hazardous (including asbestos PCB oily waste) and non- hazardous wastes and sale of items derived from ship recycling including ferrous and non- ferrous metal reusable machineries equipments materials (insulation oil batteries) |
|SHIP-MS-48 ||Certifying compliance with the standard ISO 30000:2009 Ship Recycling Activities and Sale of Recyclable Material such as steel equipment machineries and other materials obtained from ship |
|EU SRR 034 ||Certifying compliance with the requirements set out in Article 13 of Regulation (EU) No. 1257/2013 of the European Parliament and of the Council 20 November 2013 on ship recycling and amending Regulation (EC) No. 1013 2006 and Directive 2009/16/EC |
|IRQS/1721605 ||Statement of compliance under the provisions of Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships 2009 |
Also the Company has been confirmed as a firm engaged in ship recycling and that theoperations and procedures that are in place at the facility are in accordance with IMOResolution MEPC. 210(63) 2012 Guidelines for Safe and Environmentally Sound ShipRecycling giving recommendation for the Safe and Environmentally Sound Recycling of Shipsand implementation of the Hong Kong International Convention 2009.
The Company has been compliant under applicable provisions of the Water (Prevention andControl of Pollution) Act 1974 Air (Prevention and Control of Pollution) Act 1981 andHazardous Waste (Management Handling and Tran boundary Movement) Rules 2008.
Further the Company is a valid member of Gujarat Enviro Protection &Infrastructure Ltd. (Unit Alang) for Integrated Common Hazardous Waste ManagementFacility.
B. Conservation of energy:
(i) the steps taken or impact on conservation of energy;
(ii) the steps taken by the Company for utilising alternate sources of energy;
In light of the global challenges concerning energy security the Company considersenergy management as one of the key components of its responsible business strategy. TheCompany recognized the importance of energy conservation in decreasing the deleteriouseffects of global warming and climate change. The Company has implemented variousinitiatives for the conservation of energy and all efforts are made to minimize energycosts. Company is engaged in Ship Breaking trading in metal scrap graphite electrodesand other industrial inouts. No significant power consumption is required in ship breakingindustry as major portion in production process consist of non mechanical processes.However industrial gases are used in ship dismantling activities and the Company hastaken various measures to control the consumption of fuel and energy.
(iii) the capital investment on energy conservation equipments;
The Company is taking adequate steps to conserve energy though no such capitalinvestment has been made.
C. Technology absorption:
The Company continues to adopt and use the latest technologies to improve theproductivity and quality of its services and products. The Company's operations do notrequire significant absorption of technology. There has been no import of technology in FY2018-19.
D. Foreign exchange earnings and Outgo:
|Particulars ||Current Year ||Previous Year |
| ||INR ||USD ||EUR ||INR ||USD ||EUR |
|Foreign Exchange Earnings ||- ||- ||- ||- ||- ||- |
|Foreign Exchange Outgo ||4232147121 ||57679393.69 ||2764585.72 ||1319939450 ||14802816.89 ||4422976.49 |
The Whistleblower Policy has been approved and adopted by Board of Directors of theCompany in compliance with the provisions of Section 177 (10) of the Companies Act 2013and Regulation 22 of the Listing Regulations which provides a formal mechanism to theemployees business associates and stakeholders of the Company to inter-alia report anyinstances of financial irregularities breach of code of conduct abuse of authoritydisclosure of financial/ price sensitive information unethical / unfair actionsconcerning Company vendors/ suppliers malafide manipulation of company data/recordsactual or suspected fraud or discrimination to the Company's Code of Conduct in ananonymous manner.
The policy of vigil mechanism is available on the Company's website i.e.www.hariyanagroup.com.
Particulars of Employees
A) The information required under Section 197(12) of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014: a. Ratio ofthe remuneration of each Director to the median remuneration of the employees of theCompany for the Financial Year 2018-19; and b. Percentage increase in remuneration of eachDirector Chief Executive Officer Chief Financial Officer Company Secretary if any forthe Financial Year 2018-19:
|Name ||Designation ||Remuneration for the Financial Year 2018-19 ||Percentage Increase / (Decrease) in remuneration in the Financial Year 2018-19 (%) ||Ratio of Remuneration of each Director to Median Remuneration of Employees |
|1. Rakesh Reniwal ||Managing Director ||1200000 ||90% ||- |
|2. Swati Chauhan ||Company Secretary ||550000 ||25% ||- |
c. Percentage increase in the median remuneration of employees in the financial year:
There is no increase in the remuneration of employees in the financial year and hencethe information cannot be furnished. d. Number of permanent employees on the rolls ofCompany: 05
e. 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 managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
Percentile increase in the managerial remuneration (i.e. Managing Director) cannot becalculated as remuneration has been paid to him in capacity of Managing Director fromOctober 01 2017 upto March 31 2018 whereas during the previous year he has not beenpaid any remuneration. Hence the remuneration paid to him during the year under review isstrictly not comparable with the previous year. While the average remuneration of theemployees of the Company other than Managerial Personnel has no change and hence theinformation cannot be furnished. Further such increase/ decrease is not comparable forthe reasons as mentioned in Notes to Point No. (a) and (b) above.
f. Affirmation that the remuneration is as per the remuneration policy of the Company:It is hereby affirmed that the remuneration paid to:
Directors KMP and members of Senior Management is as per RemunerationPhilosophy/Policy of the Company; and
other employees of the Company is as per the Human Resource Philosophy of theCompany.
B) The information required under Section 197(12) of the Act read with Rules 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
Details as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 withrespect to information of employees of the Company will be provided upon request by aMember.
Having regard to the provisions of Section 136(1) of the Act the Annual Reportexcluding the aforesaid information is being sent to the members of the Company. The saidinformation is available for inspection on all working days during business hours at theRegistered Office of the Company 21 days before the AGM and upto the date of the ensuingAGM. Any member interested in obtaining such information may write to the CompanySecretary and the same will be furnished on request.
The Company conducts Familiarization Programme for the Independent Directors to enablethem to be familiarized with the Company its management and its operations to gain aclear understanding of their roles rights and responsibilities for enabling theircontribution to the Company. They are provided a platform to interact with multiple levelsof management and are provided with all the documents required and/or sought by them tohave a good understanding of Company's operations businesses and the industry as a whole.
Further when a new Director is inducted on the Board they are provided with necessarydocuments/ brochures reports internal policies strategy and such other operationalinformation to enable them to familiarise with the Company's procedures and practices.Site visits to various plant locations are organised for the Independent Directors toenable them to understand and acquaint with the operations of the Company.
Periodic presentations are made at the Board and Committee meetings on business andperformance updates of the Company global business environment business strategy andrisks involved. Detailed presentations on the Company's business segments are made at theseparate meetings of the Independent Directors from time to time.
The details of such familiarisation programmes for Independent Directors are put up onthe Company's website and can be accessed at www.hariyanagroup.com.
Sexual harassment of women at workplace
Your Company is committed towards providing a work environment that is professional andmature free from animosity and one that reinforces our value of integrity' thatincludes respect for the individual. The Company is committed to providing a safe andconducive work environment to all of its employees and associates.
In line with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 your Company has adopted a Policy on Prevention ofSexual Harassment at Workplace. This policy is applicable to all employees irrespectiveof their level and it also includes Third Party Harassment' cases i.e. where sexualharassment is committed by any person who is not an employee of the Company. The saidpolicy is available on the website of the Company i.e. www.hariyanagroup.com. InternalComplaints Committees have also been set up to redress complaints received regardingsexual harassment.
The Company has not received any complaint of sexual harassment during the financialyear 2018-19.
In terms of the applicable provisions of the Act and SEBI Listing Regulations yourCompany additionally discloses that during the year under review:
there was no change in the nature of business of your Company;
your Company has not accepted any fixed deposits from the public falling underSection 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014. Thusas on March 31 2019 there were no deposits which were unpaid or unclaimed and due forrepayment hence there has been no default in repayment of deposits or payment ofinterest thereon;
your Company has not issued any shares with differential voting rights;
your Company has not any Sweat Equity Shares; and
no significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status operations of your Company in future.
It is further disclosed that:
There is no plan to revise the Financial Statements or Directors' Report inrespect of any previous financial year.
No Material changes and commitments have occurred between the end of theFinancial Year of the Company to which the Financial Statements relate and the date of thereport affecting the financial position of the Company.
Your Company does not engage in Commodity hedging activities.
Your Company is committed to follow the best practices of Corporate Governance and theBoard is responsible to ensure the same from time to time.
Your Company has duly complied with the Corporate Governance requirements as set outunder Chapter IV of the SEBI Listing Regulations from time to time and the StatutoryAuditors of the Company vide their certificate dated May 30 2019 have confirmed thatthe Company is and has been compliant with the conditions stipulated in the Chapter IV ofthe SEBI Listing Regulations. The said certificate is annexed as Annexure-V to thisReport.
Statements in the Board's Report and the Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may beforward looking statements within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that could make a difference to your Company's operations include globaland Indian demand supply conditions finished goods prices feed stock availability andprices cyclical demand and pricing in your Company's principal markets changes inGovernment regulations tax regimes economic developments within India and the countrieswithin which your Company conducts business and other factors such as litigation and yourCompany is not obliged to publicly amend modify or revise any forward looking statementson the basis of any subsequent development information or events or otherwise. TheManagement's Discussion and Analysis does not constitute a prospectusoffering circular or offering memorandum or an offer to acquire any shares and should notbe considered as a recommendation that any investor should subscribe for or purchase anyof the Company's securities.
The Board of Directors would like to express their sincere gratitude for the assistanceand co-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review.
The Board of Directors also wish to place on record its deep sense of appreciation forthe committed services by the Company's executives staff and workers at all levels. Ourconsistent growth was made possible by their hard work solidarity co-operation andsupport.
For and on behalf of the Board of Directors
Hariyana Ship- Breakers Limited
|Sd/- ||Sd/- |
|Rakesh Reniwal ||Shantisarup Reniwal |
|Managing Director ||Chairman & Executive Director |
|(DIN 00029332) ||(DIN 00040355) |
|Date : May 30 2019 || |
|Place : Mumbai || |