Your Directors are pleased to present the 35th Annual Report of the Company for theFinancial Year ended 31st March 2019.
1. FINANCIAL SUMMARY OR HIGHLIGHTS
The Company's Financial Performance for the Financial Year ended March 312019 issummarized below:
|particulars || |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Net Revenue from Operations ||111761.26 ||81998.22 ||136042.24 ||101416.03 |
|Other Operating Revenue ||- ||153.34 ||- ||153.34 |
|Other Income ||134.37 ||178.60 ||138.09 ||131.01 |
|Operating Profit before Finance Costs Depreciation Tax ||5571.15 ||4753.82 ||7615.05 ||6145.39 |
|Less: Depreciation and amortization expenses ||413.58 ||327.49 ||530.97 ||400.07 |
|Finance Cost ||2304.07 ||2286.85 ||2985.39 ||2742.83 |
|Profit before Tax and Exceptional Expenses ||2854.00 ||2139.48 ||4098.69 ||3002.48 |
|Less: Tax Expenses ||1035.66 ||683.48 ||1363.72 ||901.67 |
|Net Profit for the Year from Continuing operations ||1818.41 ||1456.00 ||2734.97 ||2100.81 |
|Net Profit for the Year from Discontinued Operations ||- ||0 ||0 ||0 |
|Profit for the year ||1818.41 ||1456.00 ||2734.97 ||2100.81 |
|Other Comprehensive Income ||16.99 ||- ||18.02 ||- |
|Total comprehensive income for the year net of tax ||1835.41 ||1456.00 ||2752.99 ||2100.81 |
|Earning per equity share (Face Value of '10 each) || || || || |
|- Basic ||16.28 ||14.13 ||25.79 ||20.39 |
|- Diluted ||16.28 ||12.88 ||24.36 ||18.59 |
2. During the Financial Year 2018-19 revenue from operations on standalone basisincreased to Rs. 111761.26 lacs as against 81998.22 lacs in the previous year- a growth of36%.
The profit after tax for the current year is Rs. 1835.41 lacs against Rs.1456.00 lacsin the previous year a growth of 26%.
On a consolidated basis the group achieved revenue of Rs. 136042.24 lacs as againstRs. 101416.03 lacs - a growth of 34 %. Net profit for the current year is Rs. 2752.99 lacsagainst Rs. 2100.81 lacs in the previous year - a growth of 31%.
3. BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR/ STATE OF COMPANY'SAFFAIRS
Your Company is a Multi Product company marking its presence in steel pipes hollowsections tubes cold rolled coils & strips road crash barriers solar mountingstructures and a variety of other galvanised products since more than 3 decades. The enduses of these products are in high-rise buildings metro stations bridges damsrefineries telecom airports highways power projects etc.
During the year under review your Company's State of Affairs can be stated in anutshell as follows:
Started Commercial production of galvanizing facility of ERW Steel Pipes atHindupur Andhra Pradesh.
Awarded with Secondary Steel Sector Trophy and Silver Certificate from theMinistry of Steel government of India in the standalone category of Sheets/Coils productunder cold rolling process route.
Installation of Solar Rooftop project at Hindupur facility Andhra Pradesh. Thisproject will be generating 400KW of energy. It has a capacity of 600000 units/ year andwill help in reduction of carbon footprint by 483 tonnes/year.
Achieved monthly sales of 27000 MT in August 2018 which is highest evermonthly sales volume in Company's history
Achieved ever highest profit in last Quarter of Rs. 8.3 Cr. with a growth of 64%
Further information on the Business overview of the Company is discussed in detail inthe Management Discussion & Analysis.
Your Directors are pleased to recommend a final dividend of Rs. 0.25/- per Equity Sharefor the year 2018-19. The proposed dividend subject to approval of Shareholders in theensuing Annual General Meeting of the Company would result in appropriation of Rs. 36.92Lacs (including Corporate Dividend Tax of Rs5.45 Lacs). The dividend would be payable toall those Shareholders whose names appear in the Register of Members as on the BookClosure Date.
The Register of Members and Share Transfer books shall remain closed as per theschedule given in notice of Annual General Meeting.
5. CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARY & ASSOCIATE COMPANY
In accordance with the provisions of Companies Act 2013 (hereinafter referred to as"the Act") Regulation 33 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (hereinafter referred to as"Listing Regulations") and applicable Accounting Standards the AuditedConsolidated Financial Statements of the Company for the financial year 2018-19 togetherwith the Auditors' Report form part of this Annual Report.
In compliance with Section 129 (3) and other applicable provisions if any of the Actread with Rule 5 of the Companies (Accounts) Rules 2014. A statement containing thesalient features of financial statements of subsidiaries/ joint venture companies of theCompany in the prescribed Form AOC - 1 (ANNEXURE-1).
The said Form also highlights the financial performance of each of the subsidiariesincluded in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts)Rules 2014.
In accordance with Section 136 of the Act the financial statements of the subsidiarycompanies are available for inspection by the members at the Registered Office of theCompany during business hours on all days except Saturdays Sundays and public holidaysupto the date of the AGM. Any member desirous of obtaining a copy of the said financialstatements may write to the Company Secretary at the Registered Office of the Company. Thefinancial statements including the CFS and all other documents required to be attached tothis report have also been uploaded on the website of the Company at www. hitechpipes.in
The Company has no material subsidiary company.
During the Year under review your company has made an Investment of Rs. 4710000/-(Forty Seven Lac and Ten Thousand Only) in the shares of HTL Ipsat Private Limited andgained 100% control over the shares of HTL Ispat Private Limited Consolidated BalanceSheet of the company includes Balance Sheet of HTL Ispat Pvt Ltd.
6. AWARDS AND ACCOLADES
Your Directors are happy to report that during the year your company received thefollowing awards and accolades from distinguished bodies for achievements in variousfields:
^ SECONDARY STEEL SECTOR SILVER TROPHY for excellence in performance by Sh.Chaudhary Birender Singh Hon'ble Ministry of Steel Government of India.
7. MATERIAL CHANGES AND COMMITMENT
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of financial year 2018-19 and the date of thisreport. There has been no change in the nature of business of the Company.
8. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR
No appointments or resignations took place during the year under review in the list ofDirectors or Key Managerial Personnel of your company.
9. BOARD OF DIRECTORS
DECLARATION OFINDEPENDENCE FROMINDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of the Actread with the Schedules and Rules issued thereunder as well as clause (b) ofsub-regulation (1) of Regulation 16 of the Listing Regulations (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force). In terms ofRegulation 25(8) of the Listing Regulations the Independent Directors have confirmed thatthey are not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
5 (Five) meetings of the Board of Directors were held during the financial year 2018 -19. The details of the meetings of the Board of Directors of the Company convened duringthe financial year 2018-19 are given in the Corporate Governance Report which forms partof this Annual Report.
In accordance with the provisions of Section 152 and other applicable provisions ifany of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 (including any statutory modification(s) or re-enactment(s) thereoffor the time being in force) and the Articles of Association of the Company Mr. AnishBansal (Whole Time Director) is liable to retire by rotation at the ensuing AGM and beingeligible offered themselves for re-appointment.
In accordance with the provisions of the Companies Act 2013 read with the Rules issuedthereunder the Listing Regulations and the Articles of Association of the Company theIndependent Directors and the Managing Director of the Company are not liable to retire byrotation.
10. COMMITTEES OF THE BOARD
A detailed note on the Board and its Committees is provided in the "Report onCorporate Governance" forming part of this Annual Report. As on March 312019 theBoard has the following standing Committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
iv. Stakeholders' Relationship Committee
i. Executive Committee
ii. Securities Allotment Committee
For details of the terms of reference meetings held during the year membership andattendance of the members at the meetings of the above Committees of the Board kindlyrefer to the "Report on Corporate Governance" forming part of this AnnualReport.
11. MEETING OF INDEPENDENT DIRECTORS
Pursuant to the requirements of Schedule IV to the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate Meeting ofthe Independent Directors of the Company was also held on 14th February 2019without the presence of non-independent directors and members of the management to reviewthe performance of nonindependent directors and the Board as a whole the performance ofthe Chairperson of the company and also to assess the quality quantity and timeliness offlow of information between the company management and the Board.
12. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submits its responsibility Statement:-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures.
(b) The Directors had 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 at the end of the financial year and ofthe profit and loss of the company for that period.
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis; and
(e) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. EXTRACT OF THE ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Actread with Rule 12 of the Companies (Management and Administration) Rules 2014 forms partof the Directors' Report and is annexed herewith as "ANNEXURE-2".
14. AUDITORS AND THEIR REPORTS STATUTORY AUDITOR:
Pursuant to the provisions of Section 139 of the Companies Act 2013 M/s. A.N. Garg& Co Chartered Accountants (ICAI
Firm Registration No. 004616N) New Delhi were appointed as Statutory Auditors at 33rdAnnual General Meeting (AGM) of the Company held on 25th September 2017 for aterm of 5 consecutive years.
M/s. A.N. Garg & Co Chartered Accountants have confirmed that they are notdisqualified from continuing as Auditors of the Company.
The Reports given by the Statutory Auditors on the financial statements of the Companythe consolidated financial statements of the Company and its subsidiary for the financialyear ended March 31 2019 form part of this Annual Report. There has been noqualification reservation or adverse remarks made by Statutory Auditors in their Reports.The Statutory Auditors have not reported any frauds to the Audit Committee under Section143(12) of the Act.
SECRETARIAL AUDITORS AND THEIR REPORT
The Board of Directors of the Company has appointed NSP & Associates PracticingCompany Secretary (Certificate of Practice No. 10937) as the Secretarial Auditor toconduct an audit of the secretarial records for the financial year 2019 - 20.
The Company has received consent from NSP & Associates to act as the auditor forconducting audit of the secretarial records for the financial year ending 31st March2019.
The Secretarial Audit Report for the financial year ended 31st March 2019 underCompanies Act 2013 read with Rules made thereunder and Regulation 24A of the ListingRegulations (including any statutory modification(s) or reenactments) thereof for the timebeing in force) is set out in the ANNEXURE-3 to this report.
The Secretarial Compliance Report for the financial year ended 31st March 2019 inrelation to compliance of all applicable SEBI Regulations/circulars/ guidelines issuedthereunder pursuant to requirement of Regulation 24A of Listing Regulations is set out inANNEXURE-4 to this report. The Secretarial Compliance Report has been voluntarilydisclosed as part of Annual Report as good disclosure practice.
The Secretarial Audit Report and/or Secretarial Compliance Report does not contain anyqualification reservation or adverse remark.
The Company is required to maintain cost records for certain products as specified bythe Central Government under sub-section (1) of Section 148 of the Act and accordinglysuch accounts and records are made and maintained in the prescribed manner.
The Board of Directors of the Company on the recommendations made by the AuditCommittee has appointed M/s. S. Shekhar & Co. Cost Accountants (Firm RegistrationNo. 000452) as the Cost Auditor of the Company to conduct the audit of cost records ofcertain products for the financial year 2019 - 20 at a remuneration of Rs. 50000/-. Asrequired under the Companies Act 2013 the remuneration payable to the cost auditors isrequired to be placed before the members for ratification. The Board recommends theratification of remuneration of cost auditors of the company.
In terms of Section 148 of the Companies Act 2013 the company had appointed M/sS.Shekhar & Co. Cost Accountants as the Cost Auditors of the Company to audit the Costrecords for the FY 2018-19 M/s S. Shekhar & Co. Cost Auditors shall submit theirreport to the company in due course of time.
15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans guarantees and investments covered under Section 186 of the Act readwith the Companies (Meetings of Board and its powers) Rules 2014 as on 31st March 2019are given in Note No. 6 to the Financial statements forming part of this Annual report.
16. RELATED PARTY TRANSACTIONS
During the financial year 2018-19 the Company entered into transactions with relatedparties as defined under Section 2 (76) of the Companies Act 2013 read with Companies(Specification of Definitions Details) Rules 2014 all of which were in the ordinarycourse of business and on arm's length basis and in accordance with the provisions of theCompanies Act 2013 read with the Rules issued thereunder and the Listing Regulations.
Further there were no transactions with related parties which qualify as materialtransactions in accordance with policy of the company on materiality of related partytrasanctions. In view of the above disclosure in Form AOC- 2 is not applicable. Alltransactions with related parties were reviewed and approved by the Audit Committee andare in accordance with the Policy on Related Party Transactions formulated in accordancewith the provisions of Companies Act 2013 read with the Rules issued thereunder and theListing Regulations.
The details of the related party transactions as per Indian Accounting Standards (IndAS) - 24 are set out in Note 36 to the Standalone Financial Statements of the Company.
The policy on Related Party Transactions is available on the website of the Company athttp://hitechpipes.in/pdf/ Codes%20and%20policies%20P1/Policy_on_Dealing_with_Related_Party_Transactions.pdf
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. Accordinglythere are no unclaimed or unpaid deposits lying with the company for the year underreview.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on Company's operational performanceindustry trends and other required details prepared in compliance of Regulation 34 of theListing Regulations forms part of this Annual Report.
19. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee comprises of:
|Name of the Members ||Status ||Nature of Directorship |
|Mr. Anish Bansal ||Chairman ||Whole Time Director |
|Ms. Tanvi Kumar ||Member ||Non-Executive Independent Director |
|Mr. Ajay Sahay ||Member ||Non-Executive Independent Director |
|Mr. Ajay Kumar Bansal ||Member ||Managing Director |
Mr. Anish Bansal is the Chairman of the Committee.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in ANNEXURE-5 of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The policy is available on thewebsite of the Company.
The CSR Policy has been uploaded on the company's website and same may be accessed atthe link given hereunder:
20. DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013
Details pursuant to section 197(12) of the Companies Act 2013 read with Rule 5Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthis Report and are annexed herewith as ANNEXURE-6.
21. CORPORATE GOVERNANCE
The Directors adhere to the requirements set out by Securities and Exchange Board ofIndia's Corporate Governance practices and have implemented all the stipulationsprescribed secretarial compliances reporting intimations etc. under the Companies Act2013 Listing Agreements and other applicable laws rules and regulations are noted in theBoard/Committee meeting from time to time. The Company has implemented several bestCorporate Governance Practices as prevalent globally.
The Corporate Governance Report as stipulated under Regulation 34(3) and otherapplicable Regulations read with Part C of Schedule V of SEBI (LODR) 2015 forms part ofthis report.
22. RISK MANAGEMENT
The Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. The objective of Risk Managementat Hi Tech Pipes Limited is to create and protect shareholder value by minimizing threatsor losses and identifying and maximizing opportunities. An enterprise-wide riskmanagement framework is applied so that effective management of risks is an integral partof every employee's job.
The Company has adopted Risk Management Policy which is aimed at creating andprotecting Shareholders value by minimizing threats and losses and identifying andmaximizing opportunities. Your Directors periodically review the risk associated withbusiness or threatens the prospects of the Company.
23. FORMAL ANNUAL EVALUATION
Pursuant to applicable provisions of the Act and the Listing Regulations the Board hascarried out the performance evaluation of all the Directors (including IndependentDirectors) on the basis of recommendation of Nomination and Remuneration Committee and thecriteria formulated for the performance evaluation. The evaluation of the Board and of thevarious committees was made on the basis of the following assessment criteria:
(i) Adequacy of the constitution and composition of the Board and its Committees
(ii) Understanding of the Company's principles values philosophy and missionstatement
(iii) Matters addressed in the Board and Committee meetings
(iv) Effectiveness of the Board and its Committees in providing guidance to themanagement of the Company
(v) Processes followed at the meetings
(vi) Board's focus regulatory compliances and Corporate Governance
The performance of the Committees was also evaluated by the members of the respectiveCommittees on the basis of the Committee effectively performing the responsibility asoutlined in its Charter/Terms of reference. Similarly the evaluation of the IndependentDirectors and other individual Directors' performance was made by the entire Board on thebasis of the following assessment criteria:
(i) Attendance and active participation in the Meetings
(ii) Contribution in Board and Committee Meetings
(iii) Execution and performance of specific duties obligations regulatory compliancesand governance
The Board members had submitted their response for evaluating the entire Board andrespective Committees of which they are members.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the period under Review no material order has been passed by any Regulator orCourt excepting to the extent as may be mentioned in Notes to Accounts attached to theFinancial Statements forming part of this Annual Report.
25. WHISTLE BLOWER POLICY / VIGIL MECHANISM
In compliance with the requirements of the provisions of Section 177 of the Act readwith Regulation 22 of the Listing Regulations the Board has established a vigil mechanismfor Directors employees and other stakeholders to disclose instances of wrongdoing in theworkplace and report instances of unethical behavior actual or suspected fraud orviolation of the Company's Policies. The policy is available on the website of the Companyat http://www. hitechpipes.in/images/investorspdf/Vigil Mechanism Policy.PDF.
26. POLICY ON PROTECTION OF WOMEN FROM SEXUAL HARASSMENT
The Company has always endeavored for providing a better and safe environment free ofsexual harassment at all its work places. The Company has in place a robust policy onProtection of Women from Sexual Harassment in line with the requirements of the SexualHarassment of Woman at the Workplace (Prevention Prohibition & Redressal) Act 2013.The Policy applies to in relation to a workplace a woman of any age whether employed ornot all categories of employees of the company including permanent management workmentrainees probationers and contract employees of all cadres at its workplace or outside onofficial duty.
An Internal Complaints Committee (ICC) has been set up to redress complaints receivedon sexual harassment. All employees (permanent contractual temporary trainees) arecovered under this policy. The Committee members are as mentioned below:
|Members ||Designation |
|Ms. Tanvi Kumar ||Independent Director (CHAIRMAN) |
|Ms. Rekha Singh ||Head-Human Resource Department |
During the year no complaints on sexual harassment were received by the Committee.
27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Hi-Tech has adequate system of internal controls commensurating with the size of itsoperation and business to ensure that all assets are safeguarded and protected againstloss from unauthorized use or disposition and to ensure that all the businesstransactions are authorized recorded and reported correctly and adequately.
Your Company has adopted procedures for ensuring the orderly and efficient conduct ofits business including adherence to the Company's policies the safeguarding of itsassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures.
During the year M/s. Goyal & Goyal Chartered Accountants were re-appointed as theInternal Auditors by the Board of Directors of the Company for the FY 2019-20. The auditscope and plans of internal audit are approved by the Board every year.
28. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in ANNEXURE-7 andforms part of this Report.
The Board places on record its appreciation for the continued co-operation and supportextended to the Company by its customers which enables the Company to make every effort inunderstanding their unique needs and deliver maximum customer Satisfaction. We place onrecord our appreciation of the contribution made by the employees at all levels whosehard work co-operation and support helped us face all challenges and deliver results. Weacknowledge the support of our vendors the regulators the esteemed league of bankersfinancial institutions rating agencies government agencies stock exchanges anddepositories auditors legal advisors consultants business associates and otherstakeholders.
For and on behalf of
Board of Directors of Hi-Tech Pipes Limited
Ajay Kumar Bansal
Chairman and Managing Director
25th May 2019