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HEC Infra Projects Ltd.

BSE: 532533 Sector: Infrastructure
NSE: HECPROJECT ISIN Code: INE558R01013
BSE 05:30 | 01 Jan HEC Infra Projects Ltd
NSE 05:30 | 01 Jan HEC Infra Projects Ltd

HEC Infra Projects Ltd. (HECPROJECT) - Director Report

Company director report

To

The Members of

HEC Infra Projects Limited

The Directors have pleasure in presenting the 14th Annual Report of HEC Infra ProjectsLimited for the financial year ended 31st March 2019.

1. Financial Results and Appropriations :

Financial Results of the Company for the year under review along with the figures forthe previous year is as follows :

( in Lakhs Except per Share data)

Particulars 31st March 2019 31st March 2018
Revenue from Operations 8008.26 8263.49
Other Income 100.49 77.91
Total Revenue 8108.75 8341.40
Profit before Interest Depreciation Extraordinary items & tax 688.71 871.90
Less: Interest 404.91 355.78
Depreciation 31.29 31.49
Extraordinary Items 00 00
Profit before Exceptional item & tax 252.50 484.63
Exceptional Item 00 (8.60)
Profit before Tax 252.50 493.24
Current Tax 75.00 162.00
Deferred Tax (5.88) (2.89)
Taxation in respect of earlier year (11.95) 00
Net Profit after tax 195.33 334.13
Add: Balance brought forward from last year 1674.70 1340.57
Amount available for appropriation& to be c/f 1845.63 1674.70
EPS (Basic& Diluted) 9.63 16.48

The Financial Results for the Half year ended and year ended are available on thecompany website of the company www.hecprojects.in

2. State of Company's Affairs :

The Company has earned revenue from operation of 8008.26 Lacs during the year ended on31st March 2019 as against 8263.49 Lacs earned during the previous year ended on 31stMarch 2018 with a fall of 3% as compared to previous year. The Company has also earnedother income of 100.49 Lacs during the year under review as against 77.91 Lacs earnedduring the previous year with an increase in 29% as Compared to previous year.

The Company earned Profit Before Tax (PBT) of 252.50 Lacs and Profit After Tax (PAT) of195.34 Lacs during the year ended on 31st March 2019 as compared to previous year endedon 31st March 2018 493.24 Lacs and 334.13 Lacs respectively showing a fall of 48.81% in

Profit Before Tax and 41.54% in Profit After Tax (PAT).

3. Change in Nature of Business :

During the year under review there has been no change in the nature of business of the

Company.

4. Material Changes and Commitment affecting financial position :

There is no material change and commitments affecting the financial position of theCompany which has occurred during the financial year 2018-19 and till the date of thisBoard's Report.

5. Reserves and Surplus :

The Opening Balance of Surplus of Profit and Loss as shown in the Reserves and Surplusis 1674.70 Lacs. The whole of net profit for the year of 195.34 Lacs is transferred toSurplus of Profit and Loss as shown in the Reserves and Surplus. The Closing Balance ofSurplus of Profit and Loss as shown in the Reserves and Surplus is 1845.63 Lacs. TheOpening and Closing Balance of Securities Premium stands at 741.03 Lacs. The Opening andClosing Balance of General Reserves stands at 10.00 Lacs.

6. Dividend :

Since your Company has entered into commitments of long term which are Capitalintensive in nature and to fund the long term capital investments the Board of Directorsfeel that long term capital investments will provide higher returns in near future andtherefore the Board feels that in the years to come it will enhance its ability torecommend higher dividend and therefore in order to increase stakeholders wealth the Boarddo not recommend dividend for this year.

7. Deposits :

The Company has not invited or accepted any deposit in contravention of the provisionof the Companies Act 2013 during the year ended 31st March 2019.

Pursuant to Rule 2(1) (c) (viii) of Companies (Acceptance of Deposit) Rules 2014 anaggregate amount of deposit taken from the Directors is 855.15 Lacs.

The Directors have given a declaration stating that the amount deposited is out of ownfunds and not by way of borrowing from others.

8. Subsidiary Associate and Joint Venture:

During the year under review no company has become or ceased to be subsidiary jointventure or associate of the Company.

9. Particulars of Loans given Investments made Guarantees given and Securitiesprovided :

The details of loans and investments if any are specified in the notes to the BalanceSheet. The Company has not provided any guarantee or Security for the loans availed byothers.

10. Conservation of energy technology absorption foreign exchange earnings and outgo:

Particulars relating to conservation of energy and technology absorption stipulated inthe Companies (Accounts) 2014 are not applicable to HEC Infra Projects Limited ("thecompany") and the details regarding foreign exchange earnings and expenditure ifany is specified in the notes to the Balance Sheet.

11. Director's Responsibility Statement :

As required under the provisions of Section 134 (5) of the Companies Act 2013 yourDirectors confirm that:

(i) in the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards have been followed and there are no materialdepartures from the same;

(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at 31st March 2019 and of the Profit & Loss ofthe Company for financial year ended 31st March 2019;

(iii) they have taken proper and sufficient care 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) they have prepared the annual accounts on a ‘going concern' basis;

(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.

(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

12. Particulars of Employees :

During the year under review there was no employee who has drawn remuneration inexcess of the limits set out under Section 197 (12) of the Companies Act 2013 read withRule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

Disclosure pertaining to Remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial personnel) Rule 2014 is attached as Annexure- A.

13. Directors and Key Managerial Personnel :

Director :

Your Board Comprised of 5 (Five) Directors which includes 1 (One) Managing Director 1(One) Executive Director and 3 (Three) Non-Executive Independent Directors. Your Directorson the Board possess experience competency and are renowned in their respective fields.All Directors are liable to retire by rotation except independent Directors.

In accordance with the provision of Section 152(6) of the Companies Act 2013 andArticles of Association of the Company Mr. Gaurang Parmanand Shah retires by rotationand being eligible has offered himself for re-appointment. Item seeking your approval onthe above re-appointment is included in the Notice convening the Annual General Meeting.

During the year there is no change in the Board of Directors none of the Directorshave been appointed and resigned.

Key Managerial Personnel :

During the year under review there was no change in the Key Managerial Personnel ofthe Company for the financial year ended 31st March 2019.

14. Declaration by Independent Director :

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 Independenceas prescribed under Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

15. Annual Performance Evaluation :

The Company has in place a criteria for performance evaluation of IndependentDirectors Board Committees and other individual Directors which include performanceevaluation of the non-executive directors and executive directors.

Pursuant to the provisions of Section 134(3)(p) 149 (8) and Schedule IV of theCompanies Act 2013 and Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the performance evaluation of the Independent directorswas carried out by the entire Board and the performance Evaluation of the Board itsChairman Non-Independent Directors and working of Committees was carried out by theIndependent Directors.

16. Extract of Annual Return :

Pursuant to the provisions of Section 134(3) (a) of the Companies Act 2013 theextract of Annual Return in prescribed format form part of the Directors' Report as Annexure-B.

17. Auditors and Auditor's Report :

Statutory Auditor & Audit Report:

Pursuant to provision of Section 139 and other applicable provisions if any of theCompanies Act 2013 and the Rules made thereunder M/s. Parth P. Shah & Co. CharteredAccountants (Firm Registration Number: 141540W) were appointed as the Statutory Auditor ofthe Company to hold office for the period of 5 (five) consecutive years by the members atthe Extraordinary General Meeting held on 16th December 2015 till the conclusion of 15thAnnual General Meeting of the company (for the financial year 2020) subject toratification by the members at every Annual General Meeting.

It may be noted that pursuant to the amended provisions of Section 139 (as amended bythe companies Amendment Act 2017) ratification of statutory auditorsappointment is notrequired at every Annual General Meeting. Accordingly the 14th Annual General MeetingNotice does not carry any resolution on ratification of appointment of Statutory Auditors.

Further they have confirmed their eligibility to the effect that their appointment ifmade would be within the prescribed limits under the act and that they are notdisqualified for the appointment.

The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditor's Report for thefinancial year ended 31st March 2019 does not contain any qualification reservation oradverse remark. The Auditor's Report is enclosed with the financial statements in thisAnnual Report.

Secretarial Auditor and Secretarial Audit Report

Pursuant to provision of Section 204 of the Companies Act 2013 the Board of Directorsof the Company appointed M/s. Jalan Alkesh & Associates Practicing Company Secretaryas the Secretarial Auditor of the company for the financial year ended 31st March 2019.The Secretarial Audit Report relating thereto is annexed herewith as an Annexure-Cto this Report.

The Secretarial Auditor's Report for the financial year ended 31st March 2019 does notcontain any qualification reservation or adverse remark.

Internal Auditor :

M/s. N. K. Kapadia & Co. a reputed firm of Chartered Accountants is the InternalAuditors of the Company. The Audit Committee of the Board of Directors in consultationwith the Internal Auditors formulates the scope functioning periodicity and methodologyfor conducting the internal audit.

None of the Auditors of the company have reported any fraud as specified under thesecond proviso of Section 143 (12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force).

Cost Auditor :

The provision of Cost Audit is not applicable to the Company; hence Company has notappointed cost Auditor.

18. Company's policy on Director's KMPs & other employees appointment &remuneration including criteria for determining Qualification Attributes Independenceetc. :

The Company has formulated and adopted the Remuneration Policy in accordance with theprovisions of Companies Act 2013 read with the Rules issued thereunder and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The said Policy ofthe Company inter alia provides the criteria for appointment of Executive Non-Executiveand Independent Directors on the Board of Directors of the Company and persons in theSenior Management of the Company their remuneration including determination ofqualifications Positive attributes independence of Directors and other matters asprovided under sub-section (3) of Section 178 of the Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force). ThePolicy is also available on the website of the Company www.hecprojects.in

19. Details on Internal Financial Controls Related to Financial Statements :

Your Company has in place adequate internal control systems commensurate with the sizeof its operations. These systems enable the Company to comply with applicable laws andstandard guidelines to protect Company's interest against financial losses andunauthorized use. Further Company has appointed Internal Auditor. The Audit Committee andBoard of Directors periodically reviewed the internal audit report. The Audit Committeeactively reviews the adequacy and effectiveness of internal control systems and suggestsimprovements for strengthening them in accordance with the changes in the businessdynamics if required.

20. Risk Management :

Your company has established a well-defined risk management policy to ensure that riskto the Company's continued existence as a going concern and to its development areidentified and addressed on timely basis. Risk management strategy as approved by theboard of directors is implemented by the company management. The Policy is available forat the Website of the Company https://www.hecprojects.in/investors/

21. Industrial Relation :

The Relations between the employees and management have remained cordial and harmoniousduring the year under review.

22. Credit Rating :

During the year Credit Analysis & Research Limited (CARE) has reaffirmed the creditrating of the company "CARE BBB-"(Outlook: Stable)for its Long Term borrowingand ‘CARE A3' for its short term borrowing.

23. Segment Reporting :

The Company is engaged in the EPC Electro-Mechanical Project Business as an onlyreportable segment in accordance with Accounting Standard on Segment Reporting AS-17.

24. Number of Board Meeting :

During the year 8 (Eight) meeting were held on 30th May 2018 24th July 2018 30thAugust 2018 17th October 2018 3rd November 2018 26th December 2018 21th February2019 and 30th March 2019. The particulars of Directors their attendance during thefinancial year 2018-19 has been disclosed in the Corporate Governance Report forming partof this Annual Report.

25. Composition of Audit Committee :

The Audit Committee Comprises of the following Members:

Name Designation Status
Mr. Sachin K. Kansal Non- Executive Independent Director Chairman
Mr. Asit R. Shah Non- Executive Independent Director Member
Mrs. Ritu A. Jalan Non- Executive Independent Director Member

Further details relating to the Audit Committee are provided in the CorporateGovernance Report which forms as an integral part of the Annual Report.

All the recommendations made by Audit Committee were accepted by the Board.

26. Significant and material orders passed by the Regulators or Courts or Tribunal :

There are no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.

27. Secretarial Standard :

The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the ‘Board of Directors' and ‘General Meetings'respectively have been duly followed by the Company.

28. Vigil Mechanism/ Whistle Blower Policy :

Pursuant to the provision of Section 177(9) of the Companies Act 2013 read with Rule 7of Companies (Meeting of Board and its Power) Rules 2014 and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a vigil mechanism/ Whistle Blower Policy for directors and employees to reportconcern of unethical behavior actual or suspected fraud or violation of the Company'scode of conduct.

The details of the Whistle Blower Policy are explained in the Corporate GovernanceReport and also posted on the Company's website at www.hecprojects.in.

29. Corporate Social Responsibility :

The Company is not covered under the criteria of Section 135 of the Companies Act 2013read with the Companies (Corporate Social Responsibility Policy) Rules 2014 andtherefore it is not mandatory for the Company to have the Corporate Social ResponsibilityCommittee.

30. Particulars of contracts or arrangements with related party :

During the financial year under review all contracts / arrangements / transactionsentered by the Company with related parties were in ordinary course of business and onarms' length basis. The details of contracts and arrangements with Related Parties of yourCompany for the financial year ended 31stMarch 2019 are given in notes to the FinancialStatements forming part of this Annual Report.

All related party transactions have been approved by the Audit Committee and the Boardof Directors of your Company and are reviewed by them on periodic basis. Omnibus approvalsare taken for transactions which are repetitive in nature. The details of the relatedparty transactions during the year under review are provided in Form AOC-2 which isattached as Annexure-D to this report.

In accordance with the provisions of the SEBI Listing Regulations the Company hasformulated a Related Party Transactions Policy (the Policy). The Policy as approved bythe Board is available on your Company's website http://www.hecprojects.in/investors.

31. Management Discussion and Analysis Report & Corporate Governance Report:

As required under Schedule V (B) and (C) of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 "Management Discussion and AnalysisReport" as well as "Corporate Governance Report" are attached as aseparate section forming part of this Annual Report.

Further during the year under review the Company has complied with all the mandatoryrequirements of the Corporate Governance. A certificate from the statutory auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated underSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 is annexed tothis Report as an Annexure-E.

32. Listing :

Listing The Equity Shares of the Company continue to remain listed on National StockExchange of India Limited (NSE) SME Platform. The Company has paid necessary listing feesfor the year 2019-20.

33. Policy on prevention of sexual harassment at workplace:

Your Company has always believed in providing a conducive work environment devoid ofdiscrimination and harassment including sexual harassment. Your company has a wellformulated an Anti-harassment policy in line with the requirement of the Sexual Harassmentof Women at the Workplace (Prevention Prohibition & Redressal) Act 2013. Theobjective of the policy is to prohibit prevent and address issues of sexual harassment atthe workplace. The Company has also constituted an internal complaint committee pursuantto Sexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal)Act 2013.

The policy covers all employees (permanent contractual temporary trainees)irrespective of their nature of employment and also applicable in respect of allallegations of sexual harassment made by an outsider against an employee.

During the year 2018-19 no case of Sexual Harassment was reported.

34. Acknowledgements :

The Board of Directors wish to convey their gratitude and place on record theirappreciation for all the employees at all levels for their hard work solidaritycooperation and dedication during the year. The Board sincerely conveys its appreciationfor its customers shareholders suppliers as well as vendors bankers businessassociates regulatory and government authorities for their continued support.

For and on behalf of Board of Directors
Gaurang Shah
Date: 28/08/2019 (Chairman & Managing Director)
Place: Ahmedabad DIN : 07956079