Hawa Engineers Ltd.
Your Directors have pleasure in presenting the Twenty Second Annual Report togetherwith the Audited Statements of Accounts for the Year ended 31st March 2015.
FINANCIAL HIGHLIGHTS AND PERFORMANCE OF THE COMPANY:
| || ||(Amount in Rs.) |
|Particulars ||Year Ended 31/03/2015 ||Year Ended 31/03/2014 |
|Sales and other Income ||459421948 ||485786068 |
|Total Expenses before interest Depreciation ||436285558 ||465281088 |
|Profit before Interest Depreciation Taxation. ||23136390 ||20504980 |
|Interest ||7182174 ||5060491 |
|Depreciation ||5831162 ||4133759 |
|Profit / (Loss) before tax. ||10123054 ||11310730 |
|Provision for taxation ||3286400 ||2249800 |
|Profit/ (Loss) after tax ||6836654 ||9060930 |
During the Year under review the total revenue from operations (gross) of your Companystood at Rs 5110.33 lacs as against Rs. 5329.86 lacs for FY 2013-14 showing a decrease of4.12%. One of the reasons for the reduction in turnover is slowdown of economy. HoweverEarnings before interest tax depreciation and amortization (EBITDA) were Rs. 231.36 lacsregistering a growth of 12.83% over the EBITDA of Rs. 205.05 lacs in 2013-14. Profit aftertax (PAT) for the year was Rs. 68.36 lacs recording a decline of 24.55% over the PAT ofRs. 90.60 lacs in 2013-14. The movement of finished products from factory arrangement ofraw materials etc was satisfactory in comparison to previous financial year. The staff andworkers put their sincere effort in the operation of the plant and achieving efficiency inthe production level.
During the Year under review export realization has increased from Rs. 265.37 lacs toRs. 413.22 lacs and your director feels proud in saying that we have been successfullyable to expand our horizon in the International market. However expenditure in foreignCurrency has also increased from Rs. 12.42 lacs to Rs. 31.21 lacs as compared to that ofPrevious Year (2013-14).
Your Directors have taken appropriate remedial action to mitigate the adversecircumstances and are hopeful of better performance and results during the current year.
Your Company has taken effective steps to improve its production and sales during theyear under review.
APPLICATION FOR LISTING OF SECURITIES ON BOMBAY STOCK EXCHANGE:
Your Directors feel proud to inform you that we have applied for listing of your equityshares on Bombay Stock Exchange Limited (BSE) Mumbai. Necessary formalities have beencomplied with and in few weeks our shareholders will be able to successfully trade on BSEplatform.
The Company has made the profits during the year but to conserve the resources theDirectors do not recommend Dividend this year.
TRANSFER TO RESERVES:
The Company proposes to transfer Rs. 75 lacs to the general reserve out of the amountavailable for appropriation and an amount of Rs. 28.30 lacs is proposed to be retained inthe profit and loss account.
The company has continued to maintain harmonious and cordial relations with itsofficers supervisors and workers enabling the Company to maintain the pace of growth.Training is imparted to employees at all levels and covers both technical and behavioralaspects.
MANAGEMENT DISCUSSION AND ANALYSIS:
As per the provisions set out in the Clause 49 of the Listing Agreement ManagementDiscussion and Analysis forms part of this Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Loans Guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes to the financial statements provided in this Annual Report.
Your Company has not accepted any Fixed Deposits and as much no amount of principleor interest was outstanding as on date of Balance Sheet.
SUBSIDIARIES AND ASSOCIATES:
No disclosure under the provisions of the Companies Act 2013 and Rules made thereunder is required by the Company as there is no Subsidiary Associate or Joint VentureCompany.
In accordance with the Provisions of Section 136 of the Companies Act 2013 theAudited Financial Statements auditor's report and every other document required by law tobe annexed or attached to the financial statements which are to be laid before a companyin its general meeting are available on Company's Website www.hawaengltd.com .
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
There have been no materially significant related party transactions between theCompany and the Directors the management the subsidiaries or the relatives except forthose disclosed in the financial statements.
Accordingly particulars of contracts or arrangements with related parties referred toin Section 188(1) along with the justification for entering into such contract orarrangement in Form AOC-2 does not form part of the report.
PARTICULARS OF EMPLOYEES:
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is appendedas Annexure I to the Board's Report.
There is no employee employed throughout the Financial Year and in receipt ofremuneration of Rs. 60 lacs or more or employed for the part of the year and in receiptof Rs. 5 lacs or more a month. Hence no disclosure is required pursuant to Rule 5(2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2015 and of the profit ofthe Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Director's have prepared the annual accounts on a "Going concernbasis";
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under the Listing Agreement forms an integral part of thisReport. The requisite certificate from the Secretarial Auditors of the Company confirmingcompliance with the conditions of corporate governance is attached to the report onCorporate Governance.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Pursuant to the provisions of Section 149 of the Act this came into effect from April1 2014 Mr. Mahboob Abdul Rehman Shaikh and Mrs. Sabana Amjad Rehmani (woman director)were appointed as independent directors at the annual general meeting of the Company heldon 30th September 2014. The terms and conditions of appointment of independentdirectors are as per Schedule IV of the Act. They have submitted a declaration that eachof them meets the criteria of independence as provided in Section 149(6) of the Act andthere has been no change in the circumstances which may affect their status as independentdirector during the year.
Mr. Asad Kagdi retires by rotation and being eligible has offered himself forre-appointment.
During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Act which came into effect from April1 2014 the appointments of Mr. Aslam Kagdi Chief Financial Officer for a period of 5years and Mr. Dhanesh Pravinbhai Shah Company Secretary as key managerial personnel ofthe Company were formalized in the meeting of Board of Directors of the Company held onJuly 03 2015.
NUMBER OF MEETINGS OF THE BOARD:
The Board met Seven times during the Financial Year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed under Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION:
The Current Policy is to have an appropriate mix of Executive and Independent Directorsto maintain the independence of the Board and separate its functions of Governance andManagement. As on 31st March
2015 the Board consists of 10 Directors 4 of whom are Executive or Whole-timeDirectors and 6 are NonExecutive Directors of which 5 are Independent Directors. TheBoard periodically evaluates the need for change in its composition and size.
The policy of the Company on Director's appointment and remuneration includingcriteria for determining qualifications positive attributes independence of directorsand other matters provided under Sub-section (3) of Section 178 of the Companies Act2013 adopted by Board is available on Company website: www.hawaengltd.com
EVALUATION OF PERFORMANCE OF BOARD:
The Board of directors has carried out an formal annual evaluation of its ownperformance Board committees and individual directors pursuant to the provisions of theCompanies Act 2013 and the corporate governance requirements as prescribed by Securitiesand Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreement("Clause 49").
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
COMMITTEES OF THE BOARD:
The details pertaining to composition of various committees as per the provisions ofClause 49 of Listing Agreement and Companies Act 2013 are included in the CorporateGovernance Report which forms part of this report.
The Company undertook various steps to make the Independent Directors have fullunderstanding about the Company. The details of such familiarisation programmes have beendisclosed on the Company's website: www.hawaengltd.com
INTERNAL FINANCIAL CONTROLS:
The details in respect of internal financial control and their adequacy are included inthe Management Discussion & Analysis which forms part of this report.
Apart from normal business risk no major risk is foreseen that in the opinion of theBoard may threaten the existence of the Company. During the Year the Board has decidedthat Audit Committee shall identify risk assess monitor review and report the riskengaged in the business and shall also carry out the role of Risk Management.
AUDITORS AND AUDITORS' REPORT:
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s Nawab Memon & Associates (FRN: 129819W) Chartered Accountants were appointed asstatutory auditors of the Company from the conclusion of the Twenty First annual generalmeeting (AGM) of the Company held on September 30 2014 till the conclusion of the twentyfourth AGM to be held in the year 2017 subject to ratification of their appointment atevery AGM.
However due to Pre-occupation in other Activities M/s Nawab Memon & Associates(FRN: 129819W) tendered their Resignation from the post of Statutory Auditor of theCompany resulting into Casual Vacancy. Board of Directors in their meeting held on 16thFebruary 2015 recommended M/s Yusuf C. Mansuri & Co. (FRN: 111768W) CharteredAccountants Ahmedabad to fill the Casual Vacancy and their appointment was approved inthe Extra-ordinary General Meeting of the Members held on 28th March 2015 tillthe conclusion of the ensuing Annual General Meeting and is eligible for re-appointment.They have confirmed their eligibility to the effect that their re-appointment if madewould be within the prescribed limits under the Act and that they are not disqualified forre-appointment.
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 or adverse remark.
The Board has appointed M/s Samdani Shah & Associates Practising CompanySecretary to conduct Secretarial Audit for the financial year 2014-15. The SecretarialAudit Report for the financial year ended 31st March 2015 is annexed herewithmarked as Annexure II to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of annual return is given inAnnexure III in the prescribed Form MGT-9 which forms part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
A) CONSERVATION OF ENGERGY:
i. Steps taken or impact on conservation of energy:
Though the company is not a power intensive unit it has always emphasized theimportance of energy conservation at each stage of operation and is in the process ofimplementing all possible measures of minimizing power consumption.
ii. Steps taken by the Company for utilizing alternative sources of energy:
iii. Capital Investment on energy conservation equipments:
B) TECHNOLOGY ABSORPTION:
i. Efforts made towards Technology Absorption:
Our Company has successfully introduced the Investment Casting Process in steel andStainless steel of various grades in the manufacturing of Valves. The company's productshave been modernized to confirm to international standards of API BS and DIN.
ii. the benefits derived like product improvement cost reduction product developmentor import substitution :
iii. in case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year) :
iv. the expenditure incurred on Research and Development :
C) FOREIGN EXCHANGE EARNINGS AND OUTGOING:
|Particulars ||2014-15 ||2013-14 |
|Foreign Exchange Earned ||41322403/- ||26537679/- |
|Foreign Exchange Out go ||3121105/- ||1241843/- |
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
As per the requirement under The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made there under your Company hasconstituted Internal Complaints Committee which is responsible for redressal of complaintsrelated to sexual harassment. During the year under review there were no complaintspertaining to sexual harassment.
The Directors wish to convey their gratitude and appreciation to all of the Company'semployees for their tremendous personal efforts as well as their collective dedication andcontribution to the Company's performance.
The Directors would also like to thank the employee unions shareholders customersdealers suppliers bankers government and all other business associates for theircontinued support extended to the Company and the Management.
| ||For and on behalf of the Board of Directors |
| ||Sd/- |
| ||Aslam Kagdi |
|Place : Ahmedabad ||Chairman and Managing Director |
|Date : 29th May 2015 ||DIN: 00006879 |