Your Directors have great pleasure in presenting the 62nd Annual Report together withthe Audited Annual Accounts of the Company for the financial year ending 31st March 2020.
The performance of the Company for the financial year ended 31st March 2020 issummarized below:
(Rupees in Lakhs)
| ||2019-2020 ||2018-2019 |
|Profit before Interest Depreciation & Tax ||2551.62 ||3114.69 |
|Less: || || |
|Financial Costs ||959.35 ||1082.26 |
|Depreciation and Amortization expense ||857.05 ||763.39 |
|Provision for Tax ||210.22 ||447.64 |
|Deferred Tax ||(236.24) ||31.95 |
|Profit for the year ||761.24 ||789.45 |
|Other Comprehensive Income (Net of tax) ||(10.11) ||3.53 |
|Total Comprehensive Income for the year ||751.14 ||792.98 |
NATURE OF BUSINESS
Hindustan Tin Works Ltd. is one of the leading manufacturer and exporter of highperformance cans printed sheets and related components to consumer marketing companiesin India and abroad. It is one of the leading and established Company in Metal PackagingIndustry.
We are keenly conscious of the emerging opportunities in the can-manufacturing sectorin India as well as abroad. During the year under review there was no change in nature ofthe business of the Company.
Your Directors are pleased to recommend a dividend @ Rs. 0.60 per Equity Share (6%) onthe paid up capital of the Company for the year 2019-20 which if approved at theforthcoming AGM will be paid to all those Equity Shareholders whose names appear (i) AsBeneficial Owners as at the end of the business hours on 22nd September 2020 as per thelist to be furnished by the depository in respect of the shares held in electronic formand (ii) As member in the Register of Members of the Company after giving effect to allvalid shares transfers in physical form lodged with the Company on or before 22ndSeptember 2020.
TRANSFER TO RESERVES
It is not proposed to transfer any amount to reserves out of the profits earned duringfinancial year 2019-20.
Your Company could achieve revenue from operations (net of GST) of Rs.29768.16 lakhs asagainst the previous year's revenue from operations (net of GST) of Rs. 33635.77 lakhsi.e. Decrease of Rs. 3867.61 lakhs (11.50%). The export sale of the Company has beendecreased from Rs. 6775.52 lakhs in previous year to Rs. 4483.38 lakhs in current yeari.e. Decrease of Rs. 2292.14 lakhs (33.83%).
Your Company has achieved total comprehensive income of Rs. 751.14 lakhs as against theprevious year of Rs. 792.98 lakhs i.e. Decrease of Rs. 41.84 lakhs (5.28 %).
Due to outbreak of COVID-19 globally and in India the Company's management has madeinitial assessment of likely adverse impact on business and financial risks on account ofCOVID-19. The Company's management currently believes that the impact is likely to beshort term in nature. Given the severity of impact this financial year and some part ofnext financial year 2020-21 are likely to get affected but also given the measures fromGovernment and inherent resilience in Indian Economy next year onwards are expected toshow normal growth scenarios. Accordingly at present the management does not see anymedium to long term risks in the Company's ability to continue as a going concern andmeeting its liabilities as and when they fall due and compliance with the debt covenantsas applicable.
SUBSIDIARY COMPANIES AND FINANCIAL STATEMENTS
Your Company does not have any subsidiaries and hence Form AOC-1 is not applicable.
In accordance with the provisions of Section 136 of the Companies Act 2013 theaudited financial statements and related information of the Company are available on thewebsite of the Company - www.hindustantin.biz.
In terms of the provisions of Section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. P.P. Singh retires at the ensuing Annual General Meetingand being eligible has offered himself for reappointment.
Mr. Vijay Kumar Bhatia Whole Time Director/ Executive Director of the Company hasresigned from the Board of the Company w.e.f. 8th June 2019.
The Board of Directors of the Company has a healthy blend of executive and nonexecutive Directors which ensures the desired level of independence in functioning anddecision making.
All the non executive Directors are eminent professional and bring in wealth ofexpertise and experience for directing the management of the Company.
During the year under review Mr. M.K. Zutshi Independent Director/ Non ExecutiveDirector of the Company has resigned from the Board with effect from 26th February 2020.Also the Company fulfils the requirement of Independent Directors in the Composition ofits Board of Directors without filling any vacancy created by such resignation.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors hold office for a fix term of five years and are notliable to retire by rotation. In accordance with Section 149(7) of the Companies Act2013 each Independent Director has given a written declaration to the Company that he/shemeets the criteria of Independence as mentioned under Section 149(6) of the Companies Act2013 and SEBI Listing Regulations 2015.
The Board took on record the declaration and confirmation submitted by the independentdirectors regarding them meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under regulation 25 ofSEBI Listing Regulations 2015.
The Ministry of Corporate Affairs vide its circular dated 22 October 2019 furtheramended the Companies (Appointment and Qualification of Directors) Rules 2014 byrequiring an independent director to apply online by 29th Feb 2020(now extended till 30thSep 2020) to the Indian Institute of Corporate Affairs for inclusion of his/her name inthe data bank of an independent director in any company. The independent directors werealso required to submit a declaration of compliance in this regard. All the independentdirectors of the Company have submitted the declaration with respect to the same alongwith proof of inclusion of his/her name in the data bank.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel (KMP) of theCompany pursuant to Section 2(51) and Section 203 of the Act read with the Rules framedthere under.
1. Mr. Vijay Kumar Bhatia Chairman*
2. Mr. Ashok Kumar Bhatia Chairman*
3. Mr. Sanjay Bhatia Managing Director
4. Mr. P.P. Singh Whole-Time Director
5. Mr. Rajat Pathak Company Secretary
6. Mr. M.K. Mittal Chief Financial Officer
*None of the Key Managerial Personnel have resigned during the year under review exceptMr. Vijay Kumar Bhatia Whole Time Director/ Executive Director of the Company hasresigned from the Board of the Company w.e.f. 8th June 2019. Mr. Ashok Kumar BhatiaWhole Time Director of the Company was appointed as Chairman of the Board on place of Mr.Vijay Kumar Bhatia w.e.f. 13th November 2019 till 30th September 2024 in the BoardMeeting held on 13th November 2019.
EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations 2015the Board carried out annual performance evaluation of its own performance its committeesand individual directors. The manner in which the performance evaluation was carried outis given in detail in the Corporate Governance Report annexed to this Report.
MEETINGS OF THE BOARD
During the year four meetings of the Board of Directors were held particulars ofattendance of directors at the said meetings are given in the report on CorporateGovernance Report which forms part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3) (c) of the Companies Act 2013 withrespect to directors' responsibility statement it is hereby confirmed that: -(a) In thepreparation of the Annual Accounts the applicable accounting standards have been followedalongwith proper explanation relating to material departures if any.
(b) The Directors have 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 as at 31st March 2020 and of the profitof the Company for the year ended on that date.
(c) We had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
(d) We had prepared the Annual Accounts on a going concern basis.
(e) We had laid down proper internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively. and(f) We had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A report in the form of Management Discussion and Analysis as per Part B of Schedule Vof Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations 2015) as a part of this report is annexed hereto as Annexure- I.
The Company has in place a Risk Management Policy which was reviewed by the AuditCommittee and approved by the Board of Directors of the Company. The Policy provides for arobust risk management framework to identify and assess risks such as operationalstrategic financial security property regulatory reputational and other risks and putin place an adequate risk management infrastructure capable of addressing these risks. TheAudit Committee of the Company also evaluates Internal financial controls and riskmanagement systems.
LOANS AND INVESTMENTS BY THE COMPANY
Details of loans and investments if any made by the Company are given in notes to thefinancial statements.
During the year under review the company has not accepted any deposit under Section 76of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.
A report on Corporate Governance along with a certificate from the Statutory Auditorsof the Company detailing the compliance of Corporate Governance norms as enumerated inPart C of Schedule V of Regulation 34(3) of Listing Regulations 2015 with the StockExchanges is annexed as Annexure - II.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGERIAL PERSONNEL
The Company has laid down a code of conduct for the Board Members and Senior ManagerialPersonnel of the Company. All Board Members and Senior Managerial Personnel have affirmedcompliance with the Code of Conduct for the year 2019-2020. A declaration signed by Mr.Sanjay Bhatia Managing Director as to the compliance of the Code of Conduct by the BoardMembers and Senior Managerial personnel has been placed before the Board at its meetingheld on 13th August 2020 is enclosed as Annexure-III.
The Company has in place a whistle blower policy to support the Code of BusinessEthics. This policy documents the Company's commitment to maintain an open workenvironment in which employees consultants and contractors are able to report instancesof unethical or undesirable conduct actual or suspected fraud or any violation ofCompany's Code of Business Ethics at a significantly senior level without any fear ofrejection. Individuals can raise their concerns by an e-mail or telephone or directinteraction or by a letter to the Chairman of the Audit Committee of the Company. ThePolicy on vigil mechanism and whistler blower policy may be accessed on the Company'swebsite at the link:http://hindustantin.biz/Uploads/Invester/165Invr_Vigil_Mechanism_Policy.pdf and it dulyforms a part of corporate governance.
The CEO and Chief Financial Officer (CFO) have furnished to the Board in its meetingheld on 26th June 2020 a certificate with regard to the financial statements and othermatters of the Company as on 31st March 2020 as required under Part B of Schedule II ofRegulation 17 (8) of Listing Regulations 2015.
No material penalty or stricture was imposed on the Company by any statutory authorityfor non-compliance on matter related to capital markets during the last three years.
The Company is complying with all the mandatory requirements of the Listing Regulationsof Stock Exchanges on 'Corporate Governance'.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/or Courts whichwould impact the going concern status of the Company and its future operations.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of internal control system and suggests improvements for strengthening them.The Company has a robust Management information system which is an integral part of thecontrol mechanism.
The Audit Committee of Board of Directors Statutory Auditors and the Business Headsare periodically appraised of the internal audit findings and corrective actions taken.
Due to COVID- 19 the Company is initially allowed by Haryana Government to operatepartially for supplying tin cans and components to food sector only (being an essentialcommodity) and keeping the same in mind the Rating Committee of ICRA has revised w.e.f.16th April 2020 the long-term rating for the captioned Line of Credit (LOC) to [ICRA]BBB+ (pronounced ICRA triple B plus) from [ICRA] A- (pronounced ICRA A minus). The outlookon the long-term rating remains 'Negative'. The Rating Committee of ICRA has also revisedthe short-term rating to [ICRA] A2 (pronounced as A two) from [ICRA] A2+ (pronounced as Atwo plus) for the captioned LOC.
The rating still derives strength from the Company's significant presence in India'sCan Manufacturing sector technologically advanced operations proven managementcapability.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy to ensure that Company's Directors Key Managerial Personnel and othersenior management employees are sufficiently incentivised for enhanced performance.Remuneration should be reasonable and sufficient to attract and retain employees.Independent Directors receive remuneration by way of sitting fees for attending meetingsof Board and Board Committees (where they are members) and other matters provided underSection 178(3) of the Act and Part D of Schedule II of the Listing Regulations appended asAnnexure VI to the Directors' Report. The Remuneration Policy of the Company is alsoavailable on the website of the Company which is www.hindustantin.biz.
Disclosure pursuant to Section 197(12) of Companies Act 2013 and Rule 5 of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is provided below: (i)The ratio of the remuneration of each Director to the median remuneration of the employeesof the Company for the year 2019-20:
|Directors ||Nature of Directorship ||Ratio |
|Mr. Vijay Kumar Bhatia* ||Whole Time Director ||2.52:1 |
|Mr. Sanjay Bhatia ||Managing Director ||56.47:1 |
|Mr. Ashok Kumar Bhatia ||Whole Time Director ||32.50:1 |
|Mr. Ramesh Kumar Jain ||Non-executive Independent Director ||0.87:1 |
|Mr. M. K. Zutshi** ||Non-executive Independent Director ||0.50:1 |
|Mr. Nand Prakash Sahni ||Non-executive Independent Director ||0.65:1 |
|Mrs. Aarti Sawhney ||Non-executive Independent Director ||0.44:1 |
|Mr. Prit Pal Singh ||Whole Time Director ||7.66:1 |
computed based on annualized remuneration.
* Mr. Vijay Kumar Bhatia Whole Time Director/ Executive Director of the Company hasresigned from the Board of the Company w.e.f. 8th June 2019.
** Mr. M.K. Zutshi Independent Director/ Non Executive Director of the Company hasresigned from the Board with effect from 26th February 2020.
(ii) the percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary in the financial year: 15
The annual increase in the salary of Managing Director Whole Time Director CompanySecretary and CFO is as below:
|Name ||Designation ||Annual Increase ||Percentage |
|Mr. Sanjay Bhatia ||Managing Director ||From Rs.8992670 /- to Rs. 10372863/- ||15.35 % |
|Mr. Vijay Kumar Bhatia* ||Whole Time Director ||Rs. 2782080/- No increase ||- |
|Mr. Ashok Kumar Bhatia ||Whole Time Director ||From Rs. 5228233 /- to Rs. 5969822/- ||14.18% |
|Mr. P.P. Singh ||Whole Time Director ||From Rs. 1318980/- to Rs. 1407780/- ||6.73% |
|Mr. Rajat Pathak ||VP (Finance) & Company Secretary ||From Rs. 2552045/- to Rs. 2720717/- ||6.61% |
|Mr. M. K. Mittal ||CFO ||From Rs. 1687898 /- to Rs. 1795160/- ||6.35% |
* * Mr. Vijay Kumar Bhatia Whole Time Director/ Executive Director of the Company hasresigned from the Board of the Company w.e.f. 8th June 2019.
(iii) the percentage increase in the median remuneration of employees in the financialyear: 8.82% (iv) the number of permanent employees on the rolls of Company: 466 (Fourhundred Sixty Six) as on 31 March 2020.
(v) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: The averageincrease in the remuneration* of employees was 8.54% other than the managerial personnelin the last financial year whereas the average increase in the remuneration of managerialpersonnel was 6.51% thus there was not any exceptional circumstances for increase in themanagerial remuneration.
* It does not include incentive bonus leave encashment gratuity & payments to LICof India.
(vi) Affirmation that the remuneration is as per the Remuneration Policy of theCompany: The remuneration is as per the Remuneration Policy of the Company.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Adhering to the provisions of Companies Act 2013 relevant amounts which remainedunpaid or unclaimed for periods of 7 years have been transferred by the Company from timeto time on or before due date to the Investor Education and Protection Fund.
Pursuant to the provisions of Section 124(6) of the Companies Act 2013 read with IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 which came into force fromSeptember 7 2016 (including any amendment thereto or reenactment thereof for the timebeing in force) all equity shares in respect of which dividend has not been paid orclaimed by the Member(s) for seven consecutive years or more are required to betransferred to the IEPF Authority a Fund constituted by the Government of India underSection 125 of the Companies Act 2013. The Company has communicated individually to theconcerned Members to claim their unpaid / unclaimed dividend amount(s) and that failure toclaim the same would lead to their equity shares being transferred to the IEPF Authoritywithout any further notice. In accordance with the aforesaid IEPF Rules during theFinancial Year 2019-20 and till date the Company has transferred shares pertaining todividends which remained unpaid and unclaimed being declared for the years 2008-092009-10 (Interim and Final) 2010-11 and 2011-12 to the IEPF Authority.
The unclaimed dividends and corresponding shares including all benefits accruing onsuch shares if any once transferred to the IEPF Authority can only be claimed back fromthe IEPF Authority for which details are available at www.iepf.gov.in.
The details of Members whose dividends have remained unclaimed / unpaid for sevenconsecutive years have been placed on the website of the Company. Members are requested torefer to the "Investor" section on the website of the Company athttp://hindustantin.biz/Uploads/image/47imguf_Details_of_Members.pdf
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION AND REDRESSAL)ACT 2013
The Company has been employing women employees in various cadres within its premises.The Company has in place a policy against Sexual Harassment in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. There was no complaint received from any employee during the financial year2019-20 and hence no complaint is outstanding as on 31st March 2020.
Particulars of employees as required under the provisions of Rule 5(2) & (3) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 is givenin Annexure -VII.
PARTICULARS IN RESPECT OF CONSERVATION OF ENERGY TECHNOLOGY AND FOREIGN EXCHANGEEARNINGS AND OUTGO.
The information in accordance with the provisions of Clause (m) of Sub-Section (3) ofSection 134 of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 areforming part of the Directors' Report for the year ended 31st March 2020 is given inAnnexure - VIII.
RELATED PARTY TRANSACTIONS
All related party transactions entered into by the Company during the year were on anarm's length basis and were in the ordinary course of business. There are no materiallysignificant Related Party Transactions made by the Company with promoters directors keymanagerial personnel or other designated persons which may have potential conflict withthe interest of the Company at large.
All related party transactions that were entered into during the financial year were onan arm's length basis. Details of such transactions are given in the Annexure - IX to thisreport.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 134(3)(a)and Section 92(3) of the Companies Act 2013 read withCompanies( Amendment) Act 201 7 an extract of Annual Return (eForm MGT-9) is available onthe website of the Company and can be accessed at link:http://hindustantin.biz/Uploads/image/71imguf_AnnualReturen2020.pdf
The District Collector Solan issued a Show Cause Notice to the Company under Section118 of the H.P. Tenancy and Land Reforms Act. It was alleged that the Company has violatedthe terms and conditions of the Section 118 of the H.P. Tenancy and Land Reforms Act. TheCollector held that the Company has violated the provisions of Section 118 of the H.P.Tenancy and Land Reforms Act therefore ordered the vestment of the property in favour ofthe State of H.P. Being aggrieved the Company has filed the appeal with DivisionalCommissioner Shimla and after various hearings the Divisional Commissioner on 18thMarch 2019 passed order in favor of the Company.
Now Himachal Pradesh Government has filed revision petition against the said order andthe same is pending adjudication before the Court of financial Commissioner (Appeals)Shimla.
APPRECIATION & ACKNOWLEDGEMENT
The Board wishes to place on record with deep sense of satisfaction their appreciationfor the high degree of professionalism commitment and dedication displayed by employeesat all levels and the guidance cooperation and assistance extended to the Company by itsBankers Shareholders Customers and Suppliers.
| ||For & on behalf of the Board |
|Place : New Delhi ||ASHOK KUMAR BHATIA |
|Date : 13th August 2020 ||Chairman |