To the Members
Hindustan Composites Limited
Your Directors are pleased to present the Fifty Fifth Annual Reporttogether with the Standalone and Consolidated Audited Financial Statements of the Companyfor the year ended 31 March 2019.
1. FINANCIAL HIGHLIGHTS :
The Company's financial performance for the year ended 31 March2019 is summarized below:
| || || |
( र in Lakhs)
| ||Standalone ||Consolidated |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||19661.31 ||20335.95* ||19661.31 ||20335.95* |
|Other Income ||217.21 ||44.77 ||217.21 ||44.77 |
|Profit before Interest Depreciation and Taxes ||2720.39 ||3723.55 ||2575.17 ||3487.05 |
|Less: Interest ||22.27 ||30.82 ||22.27 ||30.82 |
|Less: Depreciation (Net) ||874.70 ||863.52 ||874.70 ||863.52 |
|Profit Before Tax ||1823.42 ||2829.21 ||1678.20 ||2592.71 |
|Less: Provision for Tax ||-76.68 ||291.85 ||-76.68 ||291.85 |
|Profit After Tax ||1900.10 ||2537.36 ||1754.88 ||2300.86 |
|Other Comprehensive Income / Loss (Net of Tax) ||456.05 ||2241.76 ||456.05 ||2241.76 |
|Total Comprehensive Income ||2356.15 ||4779.12 ||2210.93 ||4542.62 |
* Inclusive of Excise Duty of र 418.20 Lakhs.
2. IND-AS APPLICABILITY:
The Company has adopted the Indian Accounting Standard (IndAS') w.e.f. 1 April 2017. The Financial Statements have been prepared in accordancewith the applicable Indian Accounting Standards ("IndAS") as prescribed underSection 133 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014.
3. OPERATIONAL PERFORMANCE
The Company achieved a total revenue of र 19661.31 Lakhs asagainst र 19917.75 Lakhs (excluding Excise Duty of र 418.20 Lakhs) in theprevious year. The net Manufacturing revenue increased by 2% from र 15595.37 Lakhs(net of Excise) to र 15842.05 Lakhs. This was achieved despite challenging marketconditions in the second half of the year owing to slow-down in Automotive Industry.
Investment Income during the year was lower at र 3819.26 Lakhsas against र 4322.38 Lakhs in the previous year. This was mainly due to prevailingconditions of lower interest rates and the Company's cautious approach towards saferinvestment opportunities.
The gross profit of the Company was lower at र 2720.39 Lakhs asagainst र 3723.55 Lakhs. After considering interest of र 22.27 Lakhs anddepreciation of र 874.70 Lakhs Profit Before Tax was र 1823.42 Lakhs and NetProfit After Tax was र 1900.10 Lakhs. Other comprehensive income (OCI) net of Taxwas र 456.05 Lakhs as against र 2241.76 Lakhs. The total comprehensive incomeafter tax during the year was र 2356.15 Lakhs as against र 4779.12 Lakhs inthe previous year.
Although the Company marginally increased its turnover in itsmanufacturing division operating margins remained under severe pressure due to itslimited ability in obtaining price increases commensurate with increases in raw materialand fuel costs in view of depressed economic conditions in the Automotive sector.
The year witnessed a challenging time with good demand until October2018 but thereafter with non-availability of vehicle finance due to NBFC crisis andincreased axle load norms the demand from the Automotive sector more particularly forcommercial vehicles came down. This resulted into reduction in volumes from the OEMsegment and also to some extent from the Aftermarket. This was partly compensated byhigher Railway and Institutional business through tenders at competitive prices.
Outlook for the coming year remains challenging with introduction ofnew emission norms BS-VI scrappage policy and recent political developments. In order tomeet these challenges the Company will focus on Institutional Business and continue toemphasis on higher productivity with prudent cost control measures.
In the Investment segment the situation also remains challenging withthe Banking / NBFC crisis fear of higher NPA's fluctuation in Interest Rates andVolatile Stock market conditions. The Company will continue to maintain its conservativeapproach towards deployment of funds keeping capital protection in focus.
The Company entered into a Long Term Settlement with its workmen at itsPaithan Plant for a period of 3 years effective from December 2018.
The working of the Company's Joint Venture viz. Compo-Advics(India) Pvt. Ltd. though improved remained lower than plan and incurred losses mainlydue to highly competitive market conditions.
Based on the above challenging scenario the Company cautiously remainsoptimistic towards improvement of its performance both in its Manufacturing andInvestment segments by implementation of various innovative initiatives.
There was no change in the nature of business of the Company during theyear under review.
4. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITIONBETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT:
There have been no material changes and commitments affecting thefinancial position of the Company between the end of the Company's financial year towhich the financial statements relate and upto the date of this report.
5. SHARE CAPITAL OF THE COMPANY
During the financial year under review there was no change in paid upshare capital of the Company. The paid up equity share capital of your Company as on 31March 2019 was र 73845000/- (Rupees Seven Crore Thirty Eight Lakhs Forty FiveThousand only) divided into 14769000 equity shares of the face value of र 5/-(Rupees Five only) each fully paid up.
Your Directors have recommended a dividend of र 2/- (Previous year र 0.50 ) per share being 40 % (Previous year र 10% ) on equity share capital forthe year ended 31 March 2019. The Corporate Dividend Tax of र 60.72 Lakhs (Previousyear 15.03 Lakhs) will be payable on the total dividend amount of र 295.38 Lakhs(previous Year 73.84 Lakhs). The Dividend if approved will be paid to those memberswhose names shall appear on the Register of Members / List of Beneficiaries as on 22August 2019.
During the year under review र 1500 Lakhs (Previous year र1500 Lakhs) was transferred to the General Reserve.
8. SUBSIDIARY JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company has a Joint Venture Company namely "Compo Advics(India) Private Limited". The Company had no subsidiary or associate company duringthe year under review.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013(the Act') a statement containing salient features of the financial statementsof the Joint Venture Company in Form AOC 1 is attached to the financial statements of theCompany forming part of this Annual Report.
9. CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the provisions of Section 129 and 133 of the Act read withthe Companies (Accounts) Rules 2014 and as required under Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasprepared Consolidated Financial Statements consolidating financial statements of its JointVenture Company namely "Compo Advics (India) Private Limited" with its financialstatements in accordance with the applicable provisions of Indian Accounting Standards("IndAS").
The Consolidated Financial Statements along with the IndependentAuditors' Report thereon are annexed and form part of this Report.
The summarized consolidated financial position is provided above inpoint no. 1 of this Report.
10. RISKS AND AREAS OF CONCERN
The Company has laid down a well-defined Risk Management Policycovering the risk mapping trend analysis risk exposure potential impact and riskmitigation process. A detailed exercise is being carried out from time to time toidentify evaluate manage and monitoring of both business and non-business risk. TheBoard periodically reviews the risks and suggests steps to be taken to control andmitigate the same through a properly defined framework.
11. EXTRACT OF ANNUAL RETURN
An extract of Annual Return of the Company as on 31 March 2019 in FormMGT 9 in accordance with Section 92 (3) of the Act read with the Companies (Management andAdministration) Rules 2014 is annexed to this report as "Annexure A" andforms a part of this report.
12. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
a) Retirement by rotation
In accordance with the provisions of Section 152 of the Act read withCompanies (Management and Administration) Rules 2014 and Articles of Association of theCompany Mr. Raghu Mody (DIN:00053329) Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board recommends his re-appointment.
The Board of Directors of the Company appointed Mr. Vikram Soni as theCompany Secretary and Compliance Officer of the Company w.e.f. 8 May 2018. Theappointment of Mr. Vikram Soni as Company Secretary and Compliance Officer of the Companyis pursuant to the provisions of Section 203 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 and Regulation 6 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The Members in its 54 Annual General Meeting held on 30 August 2018had approved the re-appointment of Mr. A. B. Vaidya (DIN 00246208) and Lt. Gen. (Retd.) K.S. Brar (DIN: 01146720) as Independent Directors of the Company for another fiveconsecutive years from 1 April 2019 to 31 March 2024 by passing of special resolutionspursuant to the provisions of Section 149(10) read with Schedule IV of the Act.
Mr. P. K. Choudhary have been re-appointed as Managing Director of theCompany for further period of five years w.e.f. 1 July 2019 to 30 June 2024 subject tothe approval of the members of the Company
Pursuant to the provisions of Section 149 of the Act Mr. Deepak Sethi(DIN 07165462) was appointed as an Independent Director for five consecutive years by themembers of the Company in their 51 Annual General Meeting held on 18 September 2015 andholds office upto 22 April 2020.
According to the provisions of Section 149(10) read with Schedule IV ofthe Act Mr. Deepak Sethi is eligible for reappointment as Independent Director foranother term of 5 consecutive years. As per the recommendations of Nomination andRemuneration Committee of the Company the Board recommends for approval of the membersthrough Special Resolution in 55 Annual General Meeting for his re-appointment asIndependent Director for another five consecutive years to hold office from 23 April 2020to 22 April 2025.
Brief resume of the directors proposed to be re-appointed as stipulatedunder Regulation 26(4) and 36(3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and Secretarial Standard 2 on General Meetings is given in the Noticeconvening the 55 Annual General Meeting of the Company.
There was no cessation from the Board of the Company during the periodunder review.
Mr. Amit Goenka had resigned as Company Secretary and ComplianceOfficer of the Company w.e.f. the close of business hours of 7 May 2018; however hecontinues to remain in the services of the Company.
d) Declaration from Independent Directors
The Company has received declaration from all the Independent Directorsof the Company confirming that they meet the criteria of independence as prescribed bothunder Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and pursuant to Regulation 25 of the saidRegulations that they are not aware of any circumstance or situation which exist or maybe reasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence.
e) Annual Performance and Board Evaluation
The Board has devised a policy pursuant to the provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 for performance evaluation of the chairman board individual directors(including independent directors) and committees which includes criteria for performanceevaluation of non-executive directors and executive directors.
The Nomination and Remuneration Committee of the Company has specifiedthe manner of effective evaluation of the performance of Board its committees andindividual directors of the Company and has authorized the Board to carry out theirevaluation. Based on the manner specified by the Nomination and Remuneration Committeethe Board has devised questionnaire to evaluate the performances of Board BoardCommittees and Individual Directors and Chairperson. The Chairman of respective BoardCommittees shared the report on evaluation of the respective committee members. Theperformance of each committee was evaluated by the Board based on report on evaluationreceived from respective Board committees. The reports on performance evaluation of theindividual directors were reviewed by the Chairman of the Board.
The evaluation framework for assessing the performance of directorscomprises of the following key areas:
i. Attendance at Board Meetings and Committee Meetings;
ii. Quality of contribution to Board deliberations;
iii. Strategic perspectives or inputs regarding future growth ofCompany and its performance;
iv. Providing perspectives and feedback going beyond informationprovided by the management.
The details of the programmes for familiarization of IndependentDirectors with the Company their roles rights responsibilities in the Company natureof the industry in which the Company operates business model of the Company and relatedmatters are put up on the website of the Company at the link:https://www.hindcompo.com/investor-relations/ documents/familiarisation-programes-for-independent-directors.pdf
f) Key managerial Personnel (KMP)
The Key Managerial Personnel of the Company are as follows:
|Sr. No. ||Name ||Designation |
|1. ||Mr. Raghu Mody ||Executive Chairman |
|2. ||Mr. P. K. Choudhary ||Managing director |
|3. ||Mr. Sunil Jindal ||Chief Financial Officer |
|4. ||Mr. Amit Goenka ||V.P. Finance & Company Secretary (Resigned w.e.f. 7 May 2018) |
|5 ||Mr. Vikram Soni ||Company Secretary and Compliance Officer (Appointed w.e.f. 8 May 2018) |
13. MANAGERIAL REMUNERATION AND OTHER DETAILS
Disclosure pertaining to remuneration and other details as requiredunder Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in thisReport as "Annexure B" and forms a part of this report.
The statement containing particulars of employees as required undersection 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in a separate annexureforming part of this report. Further in terms of Section 136 of the Act the report andaccounts are being sent to the members excluding the aforesaid annexure. The said annexureis available for inspection at the registered office of the Company during the workinghours and any member interested in obtaining a copy of the same may write to the CompanySecretary and Compliance Officer of the Company and the same will be furnished on request.
14. REMUNERATION POLICY
Pursuant to the provisions of Section 178 of the Act and Regulation 19of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and on therecommendation of the Nomination & Remuneration Committee the Board of Directors haveadopted a policy for selection and appointment of Directors Key Managerial Personnel(KMPs') Senior Management Personnel (SMPs') and their remunerationincluding criteria for determining qualifications positive attributes independence of adirector and other related matters.
The Remuneration Policy has been placed in the website of the companyviz. www.hindcompo.com.
15. MEETINGS OF THE BOARD
The Board met four times during the year the details of which aregiven in the Corporate Governance Report. The intervening gap between the two consecutivemeetings was within the period prescribed under the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
16. COMMITTEES OF THE BOARD:
Details of all the Committees constituted by the Board under the Actand SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 along withtheir composition and changes if any during the year and the number and dates ofmeetings held during the year are provided in the Corporate Governance Report which formspart of this Annual Report.
17. AUDIT COMMITTEE AND ITS COMPOSITION
As on 31 March 2019 the Audit Committee comprised of Mr. A. B.Vaidya Mr. Chakrapani B. Misra Mr. Deepak Sethi Lt. Gen. (Retd.) K. S. Brar and Mr.Raghu Mody.
Mr. Chakrapani B. Misra is Chairman of Audit Committee of the Company.The Company Secretary and Compliance officer of the Company acts as the Secretary of theAudit Committee. All the recommendations made by the Audit Committee were accepted by theBoard of Directors of the Company. Other details with respect to Audit Committee are givenin Corporate Governance Report
The Audit Committee of the Company reviews the reports to be submittedto the Board of Directors with respect to auditing and accounting matters. It alsosupervises the Company's internal control financial reporting process and vigilmechanism.
18. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors to the best of their knowledge and belief and accordingto the information and explanations obtained by them and as required under Section 134 (5)of the Companies Act 2013 state that:
(a) in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures if any;
(b) the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit of the company for that period;
(c) the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(d) the directors have prepared the annual accounts on a going concernbasis;
(e) the directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and
(f) the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
19. PUBLIC DEPOSITS
During the financial year under review the Company has not acceptedany public deposits within the meaning of Section 73 and 76 of the Companies Act 2013read with Companies (Acceptance of Deposits) Rules 2014.
20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESREFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT 2013
All contracts / arrangements / transactions entered by the Companyduring the financial year with related parties were in the ordinary course of business andon arm's length basis and were entered into based on considerations of variousbusiness exigencies such as synergy in operations their specializations etc. and in theCompany's interests.
Pursuant to the provisions of Section 188(1) of the Act the details ofmaterial related party transactions are given in the prescribed Form AOC-2 under Companies(Accounts) Rules 2014 is annexed to this report as "Annexure C" andforms a part of this report.
In accordance with the provisions of Regulation 23 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has adopted thepolicy on related party transactions and the same is available on the Company'swebsite at https://www.hindcompo.com /investor-relations/documents/related-party-transaction-policy.pdf
21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186OF THE COMPANIES ACT 2013
The details of loans guarantee or investments made by the Companyunder Section 186 of the Act are given under notes to accounts on financial statementsforming part of this Annual Report.
22. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE
Pursuant to the provisions of Section 135 read with Companies(Corporate Social Responsibility) Rules 2014 the Company has formed Corporate SocialResponsibility Committee and a Policy on Corporate Social Responsibility (CSR). As part ofits initiatives under CSR the Company has undertaken project for promoting education inaccordance with Schedule VII of the Act. The policy on Corporate Social Responsibility hasbeen placed on the website of the Company i.e. www.hindcompo.com.
The details as per the provisions of Rule 8 of Companies (CorporateSocial Responsibility) Rules 2014 are annexed to this report as "Annexure -D" and forms a part of this report.
23. WHISTLE BLOWER/ VIGIL MECHANISM POLICY
The Company has a Vigil Mechanism / Whistle Blower Policy to deal withinstances of fraud and mismanagement if any. The mechanism also provides for adequatesafeguards against victimization of directors and employees who avails of the mechanismand also provide for direct access to the Chairman of the Audit Committee in theexceptional cases.
The details of the Vigil Mechanism Policy is also explained in theCorporate Governance Report and the policy has been placed on the website of the companyviz. www.hindcompo.com.
We affirm that during the financial year 2018-19 no employee ordirector were denied access to the Audit Committee.
24. STATUTORY AUDITORS
As per provisions of Section 139 of the Act read with the Companies(Audit and Auditors) Rules 2014 the Members of the Company in their 53 Annual GeneralMeeting held on 12 September 2017 appointed M/s. Bagaria & Co. LLP CharteredAccountants Mumbai (Firm Registration No. 113447W) as the Statutory Auditors of theCompany for a term of consecutive 5 years i.e. to hold office from the conclusion of 53Annual General Meeting till the conclusion of 58 Annual General Meeting of the Company tobe held for the financial year ending 31 March 2022 subject to the ratification bymembers of the Company every year.
However after the amendment in Section 139 of the Act effective 7May 2018 ratification by shareholders every year for the appointment of the StatutoryAuditors is no longer required and they will hold office upto the conclusion of 58 AnnualGeneral Meeting of the Company to be held for the financial year ending on 31 March 2022.
M/s. Bagaria & Co. LLP has furnished written confirmation to theeffect that they are not disqualified from acting as the Statutory Auditors of the Companyin terms of the provisions of Section 139 and 141 of the Act and the Companies (Audit andAuditors) Rules 2014.
25. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedM/s. M Baldeva Associates Company Secretaries Thane to undertake Secretarial Audit ofthe Company for the year 2018-19. The Secretarial Audit Report is annexed to this reportas "Annexure E" and forms a part of this report.
26. INTERNAL AUDITORS
Pursuant to the provisions of Section 138 of the Act read withCompanies (Accounts) Rules 2014 the Board on recommendation of the Audit Committeere-appointed M/s. S M M P & Associates Chartered Accountants Mumbai asCompany's Internal Auditors. The Internal Auditors monitor and evaluate the efficacyand adequacy of internal control system in the Company its compliances with operatingsystems accounting procedures and policies at all locations of the Company and report thesame to the Audit Committee on quarterly basis.
27. COST AUDITORS AND COST RECORDS
The Company is required to maintain cost records for certain productsas specified by the Central Government under subsection (1) of Section 148 of the Act andaccordingly such accounts and records are made and maintained in the prescribed manner.However the Company is not required to appoint the Cost Auditors pursuant to theprovisions of Section 148 of the Act.
28. REMARKS ON QUALIFICATION BY STATUTORY AUDITORS AND SECRETARIALAUDITORS
There is no qualification / observation/adverse remark in StatutoryAuditors' Report.
With respect to observation made by the Secretarial Auditors in theirreport regarding delay in filing of certain e-forms we would like to state that the delayin filing of e-forms was due to oversight.
Further none of the Auditors of the Company have reported any fraud asspecified under the second proviso of Section 143 (12) of the Act.
29. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT
Pursuant to the Provisions of Regulation 34(3) and Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the followinghave been made a part of the Annual Report and are attached to this report:
Management Discussion and Analysis Report
Corporate Governance Report
Declaration on compliance with Code of Conduct
Certificate from Practicing Company Secretary that none of thedirectors on the Board of the Company has been debarred or disqualified from beingappointed or continuing as directors of companies.
Auditors' Certificate regarding compliance of conditions ofCorporate Governance
30. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE
There was no significant or material order passed by any regulator orcourt or tribunal which impacts the going concern status of the Company or will havebearing on company's operations in future.
31. INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIALSTATEMENTS
The Company has in place proper and adequate internal control systemscommensurate with the nature of its business size and complexity of its businessoperations. Internal control systems comprising of policies and procedures are designed toensure reliability of financial reporting compliance with policies proceduresapplicable laws and regulations and that all assets and resources are acquiredeconomically used efficiently and adequately protected.
32. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 125 of the Act read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (theRules') all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the said Rules the shares on which dividend remained unpaidor unclaimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. Accordingly the Company hastransferred 22713 shares to the demat account of the IEPF Authority as per therequirements of the IEPF Rules for the dividend remained unclaimed/unpaid upto financialyear 2010-11.
In terms of the provisions of Section 125 of the Act and said Rulesduring the year an amount of र 319040/- being unpaid and unclaimed dividend for theFinancial Year 2010-11 was transferred to the IEPF.
Further the unpaid and unclaimed dividend amount lying with the Companyfor Financial Year 2011 - 12 is due to transfer to the IEPF in the month of October 2019.The details of the same are available on the Company's website viz.www.hindcompo.com.
The Board has appointed Mr. Vikram Soni Company Secretary andCompliance Officer of the Company as the Nodal officer effective from 8 May 2018 toensure compliance with the IEPF Rules.
33. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
Pursuant to the provisions of Section 134 (3) (m) of the Act read withRule 8 of the Companies (Accounts) Rules 2014 details regarding Conservation of EnergyTechnology Absorption Foreign Exchange earnings and outgo is annexed to this report as "Annexure- F" and forms a part of this report.
34. CREDIT RATINGS:
Acuite Ratings & Research Limited (formerly known as SMERA RatingsLimited) has reaffirmed the following credit ratings for Company's long term andshort term instruments:
|Scale ||Amount ||Rating |
| ||(` Cr) || |
|Long Term Instruments (fund based) ||7.00 ||ACUITE A-/ Stable |
|Short Term Instruments (fund based + non fund based) ||18.00 ||ACUITE A2+ |
35. COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and your directors confirm compliance of the same during the yearunder review.
36. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has complied with the provisions relating to theconstitution of the Internal Complaints Committee and has constituted an internalcomplaint committee under Section 4 of The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. During the financial year under reviewthere was no complaint filed before the said Committee and there was no complaint pendingat the beginning or end of the financial year under review.
37. DISCLOSURES PURSUANT TO REGULATION 14 OF SEBI (SHARE BASED EMPLOYEEBENEFITS) REGULATIONS 2014
A. Details related to GEBS
a) Date of Shareholders' approval:
Approved by the shareholders of the Company in the 51 Annual GeneralMeeting held on 18 September 2015.
b) Kind of benefits to be granted under the Scheme:
Providing assistance to meet medical expenses providingassistance/reimbursement to meet cost of tuition and other fees and expenses in connectionwith providing higher education/and professional courses providing assistance to meetmarriage expenses to sponsor holidays trips and get-togethers and such other benefits asmore particularly described in object clause of the Trust Deed.
c) Beneficiaries of the Scheme:
Such persons who are in permanent employment of the Company for atleast 5 years and are designated as Officers and Managers and their spouse parents andchildren who for the time being is nominated to be a beneficiary as may be determined bythe Nomination and Remuneration Committee from time to time but shall not includedirectors or promoters of the company.
d) Total assets of the Scheme:
र 208703791 as per the audited balance sheet of the Trust as on31 March 2019.
e) Quantum of holding in own shares / listed holding company shares(both absolute and in percentage): Nil
f) Whether scheme is in compliance of regulation 26(2)/27(3) of theregulations as applicable: Yes.
g) Variation in terms of Scheme: Not Applicable
B. Details related to Trust i. General information on all schemes
|Sr. No. ||Particulars ||Details |
|1 ||Name of the Trust ||Carnation Welfare Trust |
|2 ||Details of the Trustee(s) ||Mr. Snehal N. Muzoomdar |
| || ||Practicing Chartered Accountant |
| || ||Address: |
| || ||52 Walchand |
| || ||Terraces Tardeo Air Conditioned Market |
| || ||Mumbai - 400034 |
| || ||Mr. Nilanjan Ghose |
| || ||Practicing Advocate |
| || ||Address: H - 602 |
| || ||Mayuresh Srushti |
| || ||LBS Marg Opp. Asian Paints Bhandup |
| || ||(West SO) Mumbai 400 078 |
| || ||IDBI Trusteeship Services Limited Private Trust |
| || ||Address: Asian Building 17 R. Kamani Marg Ballard Estate Mumbai - 400001 |
|3 ||Amount of loan disbursed by the Company/ any company in the group during the year ||Nil |
|4 ||Amount of loan outstanding (repayable to the company/ any company in the group) as at the end of the year ||Nil |
|5 ||Amount of loan if any taken from any other source for which company / any company in the group has provided any security or guarantee ||Nil |
|6 ||Any other contribution made to the Trust during the year ||Nil |
ii. Brief details of transaction in shares by the Trust
|Sr. No. ||Particulars ||Details |
|A ||Number of shares held at the beginning of the year ||526434 (of र 5/- each) |
|B ||Number of shares acquired during the year through (i) primary issuance (ii) secondary acquisition also as a percentage of paid up equity capital as at the end of the previous financial year along with information on weighted average cost of acquisition per share; ||Nil |
|C ||Number of shares transferred to the employees / sold along with the purpose thereof; ||526434 (of र 5/- each) to comply with the provision of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations2014 |
|C ||Number of shares held at the end of the year ||Nil |
iii. In case of secondary acquisition of shares by
|Number of shares ||As a percentage of paid-up equity capital as at the end of the year immediately preceding the year in which shareholders' approval was obtained |
|Held at the beginning of the year ||526434 (3.56%) (of र 5/- each) |
|Acquired during the year ||Nil |
|Sold during the year ||526434 (3.56%) (of र 5/- each) |
|Transferred to the employees during the year ||Nil |
|Held at the end of the year ||Nil |
38. DISCLOSURE PURSUANT TO SECTION 67 OF THE COMPANIES ACT 2013 READWITH RULE 16(4) of THE COMPANIES (SHARE CAPITAL AND DEBENTURES) RULES 2014:
Your Company has created a General Employee Benefits Scheme(GEBS)' under an irrevocable Trust named as "Carnation Welfare Trust" on 20June 2011 for the benefit of its existing and future permanent employees exceptdirectors and promoters. The Scheme is established for the general welfare of thebeneficiaries i.e. permanent employees of the Company. Under the Scheme the Trust hadpurchased 234899 Equity Shares of र 10/- each of the Company from Secondary Marketfor a total consideration of र 112956669/-. As no shares are allotted ortransferred to any employee or option to purchase of these shares is given to any employeeunder this Scheme no voting rights are directly exercised by employees of the Company onthese shares.
The trustees of the Trust are entitled to exercise vote on theseshares however as provided under Regulation 3(5) of the Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 they have not exercised anyvoting right on these shares on resolutions transacted at the Annual General Meetings /Postal ballot process conducted by the Company.
After sale of all shares held under the GEBS during the financial yearunder review by the Trust there is no GEBS in terms of Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 any more in the Company.
Your Directors would like to place on record their sincere appreciationfor the continued co-operation guidance support and assistance extended during the yearunder report by our bankers customers suppliers and Government agencies. The Board ofDirectors wishes to express its appreciation for the valuable contribution made by theemployees at all levels during the year under report.
| ||For and on bahalf of the Board of Directors |
| ||Raghu Mody |
|Place: Mumbai ||Chairman |
|Date: 6 May 2019 ||DIN: 00053329 |
Details pertaining to remuneration as required under Section 197(12) ofthe Companies Act 2013 read with rule 5(1) of the companies (Appointment and Remunerationof Managerial Personnel) Rules 2014
1. The ratio of the remuneration of each Director to the medianremuneration of the employees of the Company for the financial year 2018-19 are as under:
|Sr. No. ||Name of the Director ||Designation ||Ratio of the remuneration to the median remuneration of the employees of the Company for the financial year 2018-19 |
|1 ||Mr. Raghu Mody ||Executive Chairman and Whole Time Director ||51:1 |
|2 ||Mr. P. K. Choudhary ||Managing Director ||22:1 |
2. The percentage increase in remuneration of each Director ChiefFinancial Officer and Company Secretary during the financial year 2018-19 are as under:
|Sr. No. ||Name of Director/KMP and Designation ||Designation ||% increase in Remuneration in the Financial Year 2018-19 |
|1 ||Mr. Raghu Mody ||Executive Chairman ||14.71% |
|2 ||Mr. P.K. Choudhary ||Managing Director ||9.09% |
|3 ||Mr. Sunil Kumar Jindal ||Chief Financial Officer ||14.63% |
|4 ||Mr. Vikram Soni ||Company Secretary & Compliance Officer (appointed w.e.f 8 May 2018) ||N.A. |
(Note: Mr. Amit Goenka V.P. Finance and Company Secretary of theCompany resigned w.e.f 7 May 2018)
3. The percentage increase in the median remuneration of employees inthe financial year: 13.10%;
4. There were 546 permanent employees on the rolls of Company ason 31 March 2019;
5. Average percentile increase made in the salaries of employees otherthan the managerial personnel in the last financial year i.e. 2018-19 was 18.84%whereas the increase in the managerial remuneration for the same financial year was 13.08%.
This was based on the recommendation of the Nomination and RemunerationCommittee to revise the remuneration as per the remuneration policy of the Company.
6. It is hereby affirmed that the remuneration paid is as per the asper the Remuneration Policy for Directors Key Managerial Personnel Senior ManagerialPersonnel and other Employees.
| ||For and on bahalf of the Board of Directors |
| ||Raghu Mody |
|Place: Mumbai ||Chairman |
|Date: 6 May 2019 ||DIN : 00053329 |
FORM AOC - 2
(Pursuant to clause (h) of sub-section (3) of Section 134 of the Actand Rule 8(2) of the Companies (Accounts) Rules 2014
Form for disclosure of particulars of contract / arrangements enteredinto by the company with related parties referred to in sub-section
(1) of section 188 of the Companies Act 2013 including certainarm's length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not atarm's length basis: The Company has not entered into any contract or arrangementor transaction with its related parties which is not at arm's length during thefinancial year 2018-19.
2. Details of material contracts or arrangements or transactionsat arm's length basis:
|(a) Name(s) of the related party and nature of relationship ||Varunn Mody (Husband of Mrs. Sakshi Mody - Non- Executive Director of the Company) |
|(b) Nature of contracts / arrangements / transactions ||Appointment Mr. Varunn Mody as President - Treasury and Strategy of the Company. |
|(c) Duration of the contracts / arrangements / transactions ||Has been appointed under a contract of employment pursuant to which he may function according to directions given by the company from time to time. Contract will continue as long he remains an employee as per the contract of employment |
|(d) Salient terms of the contracts or arrangements or transactions including the value if any ||Total remuneration of र 80.30 Lakhs paid during the year. |
|(e) Date(s) of approval of the Board ||8 May 2018 |
|(f) Amount paid in advance if any ||Nil |
|(g) Date of seeking shareholders' approval ||30 August 2018 |
| ||For and on bahalf of the Board of Directors |
| ||Raghu Mody |
|Place: Mumbai ||Chairman |
|Date: 6 May 2019 ||DIN : 00053329 |
1 Details of Conservation of energy technology absorptionforeign exchange earnings and outgo
|A Conservation of energy || |
|(i) the steps taken or impact on conservation of energy ||1. Auto Power Factor Controllers installed to maintain power factor in desirable range. |
| ||2. New Low loss power transformer with elevated voltage level from 11KV to 33KV installed. Transmission losses reduced. |
| ||3. Installation of auto tap changer on transformer to supply stable LT voltage resulted in reduced power consumption. |
| ||4. Supply voltage on LT side reduced from 440V to desirable 420V. |
| ||5. Press molding modified from single daylight to double daylight thereby saving in power consumption. |
| ||6. LED Lightings installed inside the Shop floor replacing old fittings. |
| ||7. Roof sheets replaced with transparent sheets (use of day light) |
|(ii) the steps taken by the company for utilizing alternative sources of energy ||Installation of Solar Panel under consideration र 60 Lakhs |
|(iii) the capital investment on energy conservation equipment's || |
|B Technology absorption || |
|(i) the efforts made towards technology absorption ||1. Development of high performance noise-free Brake Liners for CV Application |
| ||2. Development of new generation Brake Block and Disc Pad for Railway Application |
| ||3. Development of new grade of Clutch Facing and Industrial Friction material both for Domestic & Export customers |
| ||4. Continued focus on development of Asbestos-free Products |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||Generation of additional Business |
|(iii) in case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year): ||Not Applicable |
|(iv) the expenditure incurred on Research and Development ||Revenue - र 186.70 Lakhs (Previous year र 194.13 Lakhs)Capital - रNil (Previous year - Nil) |
|C Foreign exchange earnings and outgo || |
|(i) The foreign exchange earned (actual inflows) || र 1001.00 Lakhs (Previous year 1265.92 Lakhs) |
|(ii) The foreign exchange outgo (actual outflows) || र 1181.24 Lakhs (Previous year 771.34 Lakhs) |
| ||For and on bahalf of the Board of Directors |
| ||Raghu Mody |
|Place: Mumbai ||Chairman |
|Date: 6 May 2019 ||DIN: 00053329 |