Hawa Engineers Limited
Your Directors have pleasure in presenting the Twenty Sixth Annual Report together withthe Audited Statements of Accounts for the Year ended 31st March 2019.
FINANCIAL HIGHLIGHTS AND PERFORMANCE OF THE COMPANY
|Particulars ||Year Ended ||Year Ended |
| ||31/03/2019 ||31/03/2018 |
|Revenue from Operations ||505026568 ||551881620 |
|Other Income ||4570919 ||3299444 |
|Profit/loss before Depreciation Finance Costs Exceptional items and Tax Expense ||37660384 ||36832394 |
|Less: Depreciation/ Amortisation/ Impairment ||9206138 ||9014792 |
|Profit /loss before Finance Costs Exceptional items and Tax Expense ||28454246 ||27817602 |
|Less: Finance Costs ||17982566 ||12952333 |
|Profit /loss before Exceptional items and Tax Expense ||10471680 ||14865269 |
|Add/(less): Exceptional items ||0 ||0 |
|Profit /loss before Tax Expense ||10471680 ||14865269 |
|Less: Tax Expense (Current & Deferred) ||3115712 ||5091611 |
|Profit /loss for the year (1) ||7355968 ||9773658 |
|Total Comprehensive Income/loss (2) ||0 ||0 |
|Total (1+2) ||7355968 ||9773658 |
|Balance carried forward ||96318643 ||88833428 |
During the Year under review the total revenue from operations (gross) of your Companystood at Rs. 505026568 as against Rs. 551881620 for FY 2017-18. However Earningsbefore interest tax depreciation and amortization (EBITDA) were Rs. 37660384registering a growth as against Rs. 36832394 in 2017-18. Profit after tax (PAT) forthe year was Rs. 7355968 over the PAT of Rs. 9773658 in 2017-18. The movement offinished products from factory arrangement of raw materials etc was satisfactory incomparison to previous financial year. The staff and workers put their sincere effort inthe operation of the plant and achieving efficiency in the production level.
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.
AMOUNT IF ANY WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES
The Company proposes to transfer Rs. 7500000 to the general reserve out of the amountavailable for appropriation and an amount of Rs. 7500000 is proposed to be retained inthe profit and loss account.
The Company has made the profits during the year but to conserve the resources theDirectors do not recommend Dividend this year.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the company.
MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR
"There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report."
The Paid-up Equity Share Capital of the Company as on 31st March 2019 isRs. 35264000/- comprising of 3526400 shares of Rs. 10/- each. During the year underreview the Company has not issued any equity shares.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
|DIN/DPID/ ||FULL NAME ||DESIGNATION ||DATE OF |
|PAN || || ||APPOINTMENT |
|00006879 ||Mr. Aslam Kagdi ||Managing Director ||01/06/2000 |
| || ||and CFO || |
|00006898 ||Mr. Asad Kagdi ||Managing Director ||26/03/1999 |
|00006940 ||Mr. Mohammedkhan Pathan ||Director ||30/04/2004 |
|01989939 ||Mr. Shad Mdafzal Ranginwala ||Director ||31/01/2008 |
|06487724 ||Mr. Anwarahmed Mohammed Javid Daruwala ||Director ||15/02/2013 |
|06967822 ||Mrs. Sabana Amjad Rehmani ||Director ||30/09/2014 |
Pursuant to the provisions of Section 152 (6) of the Companies Act 2013 and otherapplicable provisions if any of the Companies Act 2013 (including any statutorymodification or re-enactment thereof for the time being in force) Mr. Aslam Kagdi (DIN:00006879) Director & CFO of the Company is liable to retire by rotation at the ensuingAGM and being eligible off ers himself for reappointment.
The Board of Directors in its meeting held 8th February 2019 on therecommendations of the Nomination and Remuneration Committee ("NRC") furtherrecommends to the members of the Company to reappointment of Mr. Aslam Kagdi (DIN:00006879) as director liable to retire by rotation.
Mr. Mahaboob Abdul Raheman Shaikh (DIN: 02378611) resigned as a Director of the Companyw.e.f 18th May 2018 due to pre-occupancy. The Board places on record the deepappreciation for valuable services and guidance provided by him during the tenure of hisDirectorship.
Mr. Mohammed Sajid Mehboobmiya Sacha (DIN: 03268965) resigned as a Director of theCompany w.e.f 10th January 2019 due to pre-occupancy. The Board places onrecord the deep appreciation for valuable services and guidance provided by him during thetenure of his Directorship.
Mr. Anwarahmed Mohammed Javid Daruwala Mr. Shad Mdafzal Ranginwala and Mrs. SabanaAmjad Rehmani Independent Directors of the Company will complete their term on 1stOctober 2019. The Board of directors had on the recommendations of the NRC Re-appointedthem in Board Meeting Held on 27th June 2019 and placed the same for theapproval of the members in the ensuing AGM to re-appoint Mr. Anwarahmed Mohammed JavidDaruwala Mr. Shad Mdafzal Ranginwala and Mrs. Sabana Amjad Rehmani as IndependentDirectors for a second term w.e.f. 1st October 2019 for a period of five yearsupto 30th September 2024.
The existing tenure of Mr. Aslam Kagdi as Managing Director Mr. Asad Kagdi as JointManaging Director and Mr. Mohammedkhan Pathan as Whole Time Director came to an end on 8thFebruary 2019. The Board of directors had on the recommendations of the NRC and subjectto the approval of the members in the ensuing AGM re-appointed Mr. Aslam Kagdi as aManaging Director designated as CFO Mr. Asad Kagdi as a Joint Managing Director and Mr.Mohammedkhan Pathan as a Whole Time Director w.e.f. 8th February 2019 for aperiod of three years upto 7th February 2022 as per the terms specified in thedraft agreement to be placed before the ensuing AGM.
Necessary resolutions for the appointment / re-appointment of the aforesaid directorsand their detailed profiles have been included in the notice convening the ensuing AGM anddetails of the proposal for appointment / reappointment are mentioned in the explanatorystatement of the notice.
Your directors commend their appointment / re-appointment.
All the directors of the Company have confirmed that they are not disqualified frombeing appointed as directors in terms of section 164 of the Companies Act 2013.
During the year Mrs. Bharti Rathi (ACS No. 42813) resigned as a Company Secretary ofthe Company w.e.f 14th November 2018 due to personal reasons.
During the year Ms. Shital Dalavadi (ACS No. 52448) appointed as a Company Secretaryof the Company w.e.f 15th November 2018.
Mr. Aslam Kagdi Chief Financial Officer and Ms. Shital Dalavadi Company Secretary wasKey Managerial Personnel on 31st March 2019.
A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149
The Company has received Declaration from Mr. Shad Mdafzal Ranginwala Mr. AnwarahmedMohammed Javid Daruwala and Mrs. Sabana Amjad Rehmani Independent Directors of theCompany that they meet with the criteria of independence as prescribed under Sub-section(6) of Section 149 of the Companies Act 2013 and Reg. 25 (8) & (9) Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (the Listing Regulations').
NUMBER OF MEETINGS OF THE BOARD
The Board met Four times during the Financial Year on 23rd May 2018 14thAugust 2018 14th November 2018 and 08th February 2019 the detailsof which are mentioned below the intervening gap between any two meetings was within theperiod prescribed under Companies Act 2013.
DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members:
1. Mr. Anwarahmed Mohammed Javid Daruwala Chairman
2. Mr. Asad Kagdi Member
3. Mr. Shad Mdafzal Ranginwala Member
No. of Meeting of Audit Committee held during the year: 4
The Audit Committee met (4) Four times during the financial year on 23rd May2018 14th August 2018 14th November 2018 and 08thFebruary 2019.
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 2019 the Board consists of 6 Directors 3 ofwhom are Executive Managing Director or Whole-time Directors and 3 are Non-ExecutiveIndependent Directors. The Board periodically evaluates the need for change in itscomposition 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 Subsection (3) of Section 178 of the Companies Act 2013adopted by Board is available on Company website: www.hawaengltd.com.
FORMAL EVALUATION OF THE PERFORMANCE OF THE BOARD COMMITTEES OF THE BOARD ANDINDIVIDUAL DIRECTORS
Pursuant to the provisions of 134(3)(p) the Companies Act 2013 the Board has carriedout the annual evaluation of the performance of the Board its Committees and ofindividual directors has been made. The
Board adopted a formal mechanism for evaluating its performance and as well as that ofits Committees and individual Directors including the Chairman of the Board. The exercisewas carried out through a structured evaluation process covering various aspects of theBoard's functioning such as composition of the Board & committees experience &competencies performance of specific duties & obligations contribution at themeetings and otherwise independent judgment governance issues etc.
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median employee's remuneration andother details in terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 areannexed to this Report as Annexure-I.
The details as required under Section 197 (12) of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) 2014there is an employee (except Managing Director CFO CEO and CS) in the Company employedthroughout the financial year and no employee has salary above Rs. 1 Crore 2 lacs perannum or employed in part of the financial year with average salary above Rs. 8.5 lacs permonth.
The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company. If any member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.
INTERNAL FINANCIAL CONTROLS
The Companies Act 2013 read with Rule 8(5)(viii) of Companies (Accounts) Rules 2014re-emphasizes the need for an effective Internal Financial Control system in the Companywhich should be adequate and shall operate effectively. The Company has devised propersystem of internal financial control which is commensurate with size and nature ofBusiness.
FRAUDS REPORTED BY THE AUDITOR
During the Year under review no frauds were reported by the Auditor (StatutoryAuditor Secretarial Auditor) to the Audit Committee/ Board.
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.
Your Company has not accepted any Deposits and as much no amount of principle orinterest was outstanding as on date of Balance Sheet.
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.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the company at large.
CORPORATE SOCIAL RESPONSIBILITY
Section 135 of the Companies Act 2013 and framed Rules thereunder provides thatcertain Companies are required to spend 2% of its average net profit during 3 precedingyears on CSR activities. It also provides formation of CSR committee of the Board. TheRules prescribe the activities qualify under CSR and the manner of spending the amount.The company is not covered under section 135 of the Companies Act 2013 and the Rulesframed thereunder for the financial year under report. CSR Committee of the Board will beconstituted at the time of applicability of section 135 of the Act. Hence CSR report isno required to be annexed.
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: NotApplicable
iii. Capital Investment on energy conservation equipments: Not Applicable
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 productdevelopment or import substitution:
iii. in case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year):
iv. the expenditure incurred on Research and Development:
C) FOREIGN EXCHANGE EARNINGS AND OUTGOING:
|Particulars ||2018-19 ||2017-18 |
|Foreign Exchange Earned ||18054188/- ||39330038/- |
|Foreign Exchange Out go ||652788/- ||615651/- |
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.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism and overseas through the Committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the Chairman of the AuditCommittee on reporting issues concerning the interests of employees and the Company. Theboard has approved a policy for vigil mechanism which has been hosted on the website ofthe Company at www.hawaengltd.com .
AUDITORS AND AUDITORS' REPORT:
Pursuant to the provision of Section 139 of the Companies Act 2013 read with rulesmade thereunder M/s. Yusuf C. Mansuri & Co. Chartered Accountants Ahmedabad (FRN.111768W) were appointed as statutory Auditor of the Company to hold office tillconclusion of the Annual General Meeting (AGM) of the Company to held in the year 2020.
In accordance with the Companies Amendment Act 2017 enforced on 7th May 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to berati_ed at every Annual General Meeting.
The Auditors' Report annexed to the financial statements for the year under review doesnot contain any qualifications.
The Board has appointed M/s Chirag Shah & Associates Practising Company Secretaryto conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Reportfor the financial year ended 31st March 2019 is annexed herewith marked asAnnexure IV to this Report. One qualification is raised by the Secretarial Auditor in hisSecretarial Audit Report for the year under review and the reply of the same is mentionedbelow in this Director's report.
M/s Jaykishan Darji & Co. Chartered Accountants Ahmedabad have been re-appointedas Internal Auditor of the Company in terms of Section 138 of the Companies Act 2013 andrules made thereunder from Financial Year 2019-20 by the Board of Directors uponrecommendation of the Audit Committee.
EXPLANATIONS OR COMMENTS BY BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARKOR DISCLAIMER MADE
(i) by the auditor in his report; There is no qualification reservation or adverseremark or disclaimer in audit report issued by the auditors of the Company.
(ii) By the company secretary in practice in his secretarial audit report; Followingqualification raised by the Secretarial Auditor in his Secretarial Audit Report: Companyhas not complied with the provision of Regulation 31 of the Securities and Exchange Boardof India (Listing Obligations and Disclosures and Requirement) Regulation 2015.
Reply of Director for above qualification raised by secretarial auditor:
Company is in process to make necessary compliance and company has informed the all thepromoters to dematerialized it's all promoter shareholding pursuant to Regulation 31 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Your Company is in compliance with the provisions of the applicable SecretarialStandards issued by the Institute of Company Secretaries of India in terms of theCompanies Act 2013.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act the extract of Annual Return as providedunder Section 92(3) of the Act the extract of annual return is given in Annexure II inthe prescribed Form MGT-9 which forms part of this report. The Extract of Annual Returnin Form No. MGT 9 is available on the website of the Company at www.hawaengltd.com.
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.
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:
a. In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures.
b. ii. It has in the selection of the accounting policies consulted the StatutoryAuditors and has applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at 31st March 2019 and of the profit or loss of the company for that period.
c. It has taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities to the best ofits knowledge and ability. d. It has prepared the annual accounts on a going concernbasis.
e. The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingefficiently.
f. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively; Thatproper systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
FORMAL ANNUAL EVALUATION
The Board of Directors has carried out an annual evaluation of the performance of theBoard its committees and of individual directors has been made pursuant to therequirements of the Act and the Listing Regulations.
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
PREVENTION OF INSIDER TRADING
In January 2015 SEBI notified the SEBI (Prohibition of insider trading) Regulations2015 which came into effect from May 15 2015. Pursuant thereto the Company hasformulated and adopted a new Code for Prevention of Insider Trading.
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany. The Code requires pre-clearance for dealing in the Company's shares and prohibitsthe purchase or sale of Company shares by the Directors and the designated employees whilein possession of unpublished price sensitive information in relation to the Company andduring the period when the Trading Window is closed. The Board is responsible forimplementation of the Code. All Directors and the designated employees have confirmedcompliance with the Code.
As provided under Regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliancewith Corporate Governance as specified in Regulation 17 to 27 46(2)(b) to (i) & parac d & e of Schedule V are not applicable to the Company as paid up share capitaldoesn't exceed ` 10 Crore.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with the SEBI (Listing Obligation and Requirement) Regulations 2015 theManagement Discussion and Analysis Report are annexed to this Report as Annexure-III.
BUSINESS RISK MANAGEMENT
Pursuant to section 134 (3) (n) of the Companies Act 2013 & under regulation 21 ofthe SEBI (Listing obligations and disclosure requirements) Regulations 2015 At presentthe company has not identified any element of risk which may threaten the existence of thecompany.
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.
5. There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year 2018-19 and thedate of this Report.
DISCLOSURE REGARDING MAINTENANCE OF COST RECORDS
The Company has not maintained cost records as specified by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 as the said provision isnot applicable to Company.
DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has adopted a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and Rules made there under.Your Company has constituted an Internal Complaints Committee across its commercialoffices and Manufacturing sites.
There were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
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 : 27th May 2019 ||DIN: 00006879 |