THE MEMBERS OF
HIMACHAL FIBRES LIMITED.
Your Directors have pleasure in presenting the 39th Annual Report togetherwith the Audited Statement of Accounts of Himachal Fibres Limited (HFL) for the year endedMarch 31st 2020.
1. FINANCIAL HIGHLIGHTS.
The summary of the financial performance of the Company for the financial year endedMarch 31st 2020 compared to the previous year ended March 31th 2019is given below:
|Particulars ||Year Ended March 31st 2020 ||Year Ended March 31st 2019 |
|Revenue from Operations and Other Income (Total Revenues) ||4456.13 ||4908.98 |
|Gross loss before interest and depreciation ||(279.00) ||574.17 |
|Finance cost ||312.54 ||352.56 |
|Profit before depreciation and amortization (Cash Profit) ||33.54 ||221.62 |
|Depreciation and Amortization ||203.35 ||204.50 |
|PBT before exceptional items ||(236.89) ||17.12 |
|Exceptional items ||0.00 ||0.00 |
|Profit/Loss before Tax (PBT) ||(236.89) ||17.12 |
|Tax- Current ||(0.000 ||3.29 |
|Tax- Deferred ||(6.79) ||(27.33) |
|Profit/Loss after Tax ||(230.10) ||41.16 |
|Other Comprehensive Income (Net of Tax) ||5.79 ||17.89 |
|Total Comprehensive Income ||(224.31) ||59.05 |
|Earnings per Share (EPS) (in Rs.) || || |
|(after exceptional item) || || |
|- Basic ||(0.27) ||0.01 |
|- Diluted ||(0.27) ||0.01 |
*Previous figures have been regrouped/ reclassified wherever necessary to confirmwith the current period classification/presentation.
2. STATE OF COMPANY'S AFFAIRS :
Total Revenue from operation for the year is Rs. 4265.95 Lakhs as compared to Rs.4776.48 Lakhs of previous year. The Net Loss after tax for the year ended March 31st2020 is Rs. (230.10) Lakhs as compare to Net Profit after tax of Rs. Rs. 41.16 Lakhs forthe previous year.
In view of the inadequate profit for the year ended March 31st 2020 theBoard of directors has not recommended any dividend for the year under review.
4. TRANSFER TO RESERVE
The Board of your Company has decided not to transfer any amount to the GeneralReserves for the financial year 2019-20.
5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Since there were no unpaid/unclaimed Dividend and other amounts as prescribed underSections 124 & 125 of Companies Act 2013 lying with the company therefore theprovisions of above mentioned sections do not apply to the company.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.
In pursuance to section 134(3) (L) of the Act no material changes and commitments haveoccurred after the closure of the financial year to which the financial statements relatetill the date of this report affecting the financial position of the Company except theAssessment of Impact of Pandemic of COVID-19 on the Business of Company
Detailed assessment of the operations has been carried out by the Company coveringproduction sales recovery of trade receivables liquidity position inventory levelscarrying value of its all the assets. Based on prevailing economic conditions the Companyexpects to recover the carrying amount of these assets. The Company will continue toclosely monitor any material changes arising of future economic conditions and impact onits business. Future impact of the COVID-19 is quite difficult to assess due to highlyuncertain situation and may be different from time to time.
7. CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the company during the year underreview.
8. SHARE CAPITAL
During the year under review no change in the paid-up share capital of the company.
8.1 Redemption of Preference Shares
The Company has not redeemed any Preference Shares during the year under review.
8.2 Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
8.3 Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
8.4 Bonus Shares
No Bonus Shares were issued during the year under review.
8.5 Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees.
9.1 Cash And Cash Equivalent
Cash and Cash equivalent as at March 31st 2020 is Rs. 22.31 Lakhs. TheCompany continues to focus on judicious management of working capital. Working Capitalparameters are kept under strict check through continuous monitoring.
9.2 Deposits/ Fixed Deposits
During the year Company has not accepted deposit from the public falling within theambit of Section 73 of Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014. Further the Company has not repaid any deposits to the public during theyear and no deposits are remained unpaid / unclaimed as on March 31st 2020.
9.3 Particulars of Loans Guarantees or Investments
Detail of Loans Guarantees and Investments covered under the provisions of Section 186of the Companies Act 2013 are given in the notes of Financial Statements.
10. HUMAN RESOURCES
HFL is committed to hiring developing and retaining the best minds in the industry.The Company has key internal processes and initiatives that support this vision. TheCompany has developed a strong employee value proposition that focuses on key pillars ofchallenging work that matters hiring and retaining the right people sustained focus ontalent and leadership development differentiated rewards to drive exceptional performanceand community engagement.
Talent management is a shared responsibility between business leaders and the HumanResources function at HFL enabling a strong focus on succession planning for key rolesand actively promoting internal move to drive career growth. Talent management issupported by a strong learning architecture that enables leadership and functionaldevelopment. This is supported by a Positive Employee Relations (PER) strategy that aimsto build an engaged and motivated workforce.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
The Company recognizes and embraces the importance of a diverse board in its success.We believe that a truly diverse board will leverage differences in thought perspectiveknowledge skill regional and industry experience cultural and geographical backgroundage ethnicity race and gender which will help us retain our competitive advantage.
During the year under review Due to expiry of term and unwillingness for furtherre-appointment Mr. Pawan Nagpal (Independent Director) has been resigned/retired from theBoard on March 31st 2020 and in this regard he confirmed that there were noother material reasons.
Mr. Surjit Singh and Mr. Pawan Nagpal were appointed as Directors (Non- ExecutiveIndependent) of the Company w.e.f. 38th Annual General Meeting.
Mr. Gian Chand Thakur retires by rotation at this AGM and being eligible offer herselffor reappointment.
Mrs. Malkeet Kaur completed her First Term at this AGM and being eligible offer himselffor reappointment for Second Term.
11.2 Key Managerial Personnel (KMP)
Board would also like to inform the members that Miss Palak Narang resigned from thepost of Company Secretary w.e.f. April 15th 2019 and Mrs. Laxmi Khatri wassubsequently appointed w.e.f. April 18th 2019 as a Company Secretary of theCompany.
12. BOARD MEETINGS & ATTENDANCE OF DIRECTORS
Five (5) meetings of the Board of Directors were held during the year 2019-20. Therequisite quorum was present at all the Meetings and the details about the meetings andattendance are available in the Report on Corporate Governance which forms a part of thisReport.
13. COMMITTEES OF BOARD
The details regarding Committees of the Board of Directors of the Company are given inthe Report on Corporate Governance which forms a part of this Report.
14. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of Independencelaid down in and Section 149(6) of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015
15. CODE OF CONDUCT COMPLIANCE
The declaration signed by the Whole time Director affirming compliance with the Code ofConduct by Directors and Senior Management for the financial year ended March 31st2020 is given in Report on Corporate Governance which forms a part of this Report.
16. CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the company yet the Company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.
17. TRAINING OF INDEPENDENT DIRECTORS.
Every new independent director of the Board attends an orientation program. Tofamiliarize the new inductees with the strategy operations and functions of our Companythe executive directors / senior managerial personnel make presentations to the inducteesabout the Company's strategy operations product markets organization structurefinance human resources technology quality facilities and risk management.
18. 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 if any;
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 laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
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.
19. AUDITORS AND RECORDS
19.1 Statutory Auditors
M/s. Manjul Mittal & Associates Chartered Accountants (Firm Registration No.028039N) was appointed as the Statutory Auditors of the Company for a period of five yearsfrom the conclusion of 36th Annual General Meeting till the conclusion of 41stAnnual General Meeting subject to ratification at every intervening Annual GeneralMeeting.
Pursuant to the provisions of the Companies (Amendment) act 2017 as notified on May 7th2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every intervening Annual General Meeting (AGM). Accordingly inline with the aforesaid provisions and pursuant to the resolution passed at 36thAGM the Company ratified the appointment of auditors from the conclusion of 37thAGM till the conclusion of 41st AGM to conduct the statutory audit of theCompany without further annual ratification by members at every subsequent AGM. Hence theresolution seeking rectification of members for continuance of their appointment at thisAGM is not being sought.
The Company has received a certificate from M/s Manjul Mittal & Associates to theeffect that if they are reappointed it would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
19.2 Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Rajeev Bhambri & Associates (CP No.: 9491 FCS: 4327)CompanySecretaries in practice to undertake the secretarial audit of the company. The SecretarialAudit Report is annexed herewith as 'Annexure - 1'.
19.3 Internal Auditors
Mr. Shekhar Bansal resigned from the post of Internal Auditor of the Company and Mr.Varinderjit Appointed as Internal Auditor w.e.f. February 14 2020 both performed theduties of internal auditors of the company and their report is reviewed by the auditcommittee from time to time.
19.4 Cost Records
Pursuant to the rules made by the Central Government the maintenance of cost recordshas been prescribed under sub section (1) of Section 148 of the Companies Act 2013isrequired by the Company and accordingly such prescribed accounts and records have beenmade and maintained.
19.5 Explanation on qualification/ reservation/ adverse remarks in the Auditors' Report
Members' attention is invited to the observations/Qualification made by the StatutoryAuditors under Point No. 7(a) and 8 appearing in Independent Auditor's Report and bySecretarial Auditor in Secretarial Audit Report. The observations/Qualification made byauditors in their reports alongwith the management replies on them are as follows:
a) Regarding Auditor's remark in their report in Point 7(a) and Secretarial Auditor'sremark in their report it is informed that the company accords top priority in depositingthe statutory dues. However the liquidity crunch being faced by it due to various reasonshas led to some delay in the deposit of statutory dues.
b) Regarding Auditor's Remark in their report in Point No. 8 and Secretarial Auditor'sremark in their report the slight delay in servicing the Banks dues i.e. Interest andInstallment was mainly because of liquidity crunch due to COVID 19 and market conditions.However some of the amount has paid to the bank and rest will be paid shortly. There hasbeen no default in the payment of other bank dues and the accounts of the Company arestandard.
20. INTERNAL FINANCIAL CONTROLS
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
21. LISTING OF SECURITIES
The Securities of the Company are listed on BSE Limited. The Company has not paidannual listing fee to exchanges for the year 202021 however the same will be paid shortly.
22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
23. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as 'Annexure- 2'
24. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The company has set up vigil mechanism viz. Whistle Blower Policy to enable theemployees and directors to report genuine concerns unethical behavior and irregularitiesif any in the company noticed by them which could adversely affect company's operations.The same is reviewed by the Audit Committee from time to time. No concerns orirregularities have been reported till date. The details of the Whistle Blower Policy isexplained in the Corporate Governance Report and also posted on the website of theCompany.
25. RISK MANAGEMENT POLICY
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organizational structures processes and behaviors together form the RiskManagement Policy that governs how the company conducts its business and managesassociated risks.
26. HOLDINGS SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Holdings Subsidiary Joint venture or Associate Company.There were no companies which have become or ceased to be its holdings subsidiariesjoint ventures or associate companies during the year under review.
27. RELATED PARTY TRANSACTIONS/ PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATEDPARTIES.
All transactions entered into with Related Parties as defined under the Companies Act2013 and Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 during the financial year were in the ordinary course of business andwere on arm's length pricing basis and do not attract the provisions of Section 188 of theCompanies Act 2013. There were no materially significant transactions with relatedparties during the financial year. Suitable disclosure as required by the AccountingStandards (AS18) has been made in the notes to the Financial Statements. The report of theBoard in respect of the particular of contracts or arrangements with related partiesreferred to sub section (1) of Section 188 in form AOC-2 is annexed to this report in 'Annexure-3'.
28. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a prevention of sexual Harassment policy in line with therequirements of the sexual Harassment of Women at the Workplace (prevention prohibitionand Redressal) Act 2013. A Sexual Harassment Committee/Internal Complaints Committee(ICC) was setup/constituted which is responsible for redressal of complaints related tosexual harassment at the workplace. During the year 2019-20 no complaint werereceived/filed by the Company related to sexual Harassment.
29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under section 134 (3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure-4".
30. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed to the Board's report as per 'Annexure- 5'.
31. REMUNERATION POLICY AND BOARD EVALUATION
Company has Nomination and Remuneration policy in place pursuant to Companies Act 2013and SEBI (LODR) Regulation 2015. Independent directors in their meeting held on February14th 2020 evaluated the performance of the non-independent directors of theboard including Whole time Director. The minutes of the meeting were placed before theboard and board affirmed the same. The Board has carried out an annual evaluation of itsown performance performance of its Committees as well as the directors individually. Thedetails regarding process and criteria for evaluation are given in the Report on CorporateGovernance which forms a part of this Report.
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Companies Act 2013 and SEBI(LODR) Regulations 2015 isenclosed herewith as 'Annexure - 6'.
32. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and Corporate Governance Report pursuantto SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are annexedherewith in 'Annexure-7 ' and form part of the Directors Report.
33. REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
34. CREDIT RATING:
During the Financial Year 2019-20 Company has same "D" Credit Rating inrespect to bank credit facilities from Credit Rating Agency i.e. Brickwork Ratings IndiaPvt. Ltd.
35. APPRECIATION AND ACKNOWLEDGEMENTS
The company has been very well supported from all quarters and therefore your directorswish to place on record their sincere appreciation for the support and co-operationreceived from Employees Dealers Suppliers Central and State Governments Bankers andothers associated with the Company. Your Directors wish to thank the banks financialinstitutions shareholders and business associates for their continued support andcooperation. We look forward to receiving the continued patronage from all quarters tobecome a better and stronger company.
36. CAUTIONARY STATEMENT
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations.
Various factors such as economic conditions changes in government regulations taxregime other statues market forces and other associated and incidental factors mayhowever lead to variation in actual results.
| ||For and behalf of the Board |
| ||For Himachal Fibres Limited |
| ||Sd/- |
|Place: Ludhiana ||(Surjit Singh) |
|Dated: September 02nd 2020 ||Chairperson |
| ||DIN:07143372 |