Your Directors present their seventy-eighth Annual Report together with auditedfinancial statements of the Company for the year ended March 31 2020.
Financial Results / Performance
During the year under review the Company's revenue/Other Income are 6.09 Crorescompared to 36.06 Crores in the previous financial year. The following table gives asummary of the performance.
|Particulars ||2019-20 || |
|Gross Revenue from Operations/ Other Income ||6.09 || |
|Net Revenue from Operations ||6.09 || |
|Profit/(Loss) before Exceptional items and Tax ||(0.84) || |
|Exceptional items (Net) ||0 || |
|Profit/(Loss) before Tax ||(0.84) || |
|Tax Expenses (net of written back of Rs.0.14 Cr for earlier year) ||(0.02) || |
|Net Profit/ (Loss) after tax ||(0.82) || |
|Other Comprehensive Income ||(0.26) || |
|a) Item that will not be reclassified to profit or loss ||(0.26) || |
|b) Tax on Comprehensive Income ||0 || |
|Total Comprehensive Income for the year (Comprising Profit/(Loss) for the year (after tax) and Other Comprehensive Income (after tax) ||(1.08) || |
The revenue account shows a loss of Rs.1.08 Crores after providing Rs.0.88 Crores fordepreciation & amortisation expense. There is a deficit of Rs.170.88 Crores in theStatement of Profit and Loss as at the end of the current year as against 169.79 Crores inthe last year.
A Cash Flow Statement for the year under review is also attached to the enclosed AnnualAccounts.
The Company is not having any subsidiary company and therefore consolidated accounts ofthe Company have not been prepared.
Review of Operations
There has been no change during the period under review in the nature of business ofthe Company.
As reported earlier that due to low productivity growing indiscipline shortage offunds and lack of demand for products the Company was compelled to declare"Suspension of work" at its Uttarpara Plant with effect from 24th May 2014 andthe suspension of work is continuing due to no change in the situation. The lay off inCompany's Pithampur Plant with effect from 4th December 2014 due to lack of orders isalso continuing.
No material changes or commitments or any significant and material adverse orders orrulings passed by the regulators or Courts or Tribunals impacting the going concern statusand Company's operations in future have occurred between end of the financial year of thecompany and date of this report.
A detailed Management Discussion & Analysis Report forms part of this report isannexed as Annexure-1.
Outlook for 2019-20
In an effort to revive operations the Company has started process of rationalising thecost post suspension of work at Uttarpara plant. The Company started to reduce themanpower substantially to a desired level as a result the strength of employee has beendecreased from 395 to 360 in number. It has reduced the fixed cost including employee costconsiderably and continuously working on further reducing its fixed cost.
Also the Company has been engaged in scouting for tie-ups with potentialinvestors/strategic partners who can introduce newer product portfolios in the market andinfuse capital into the Company. The Company is considering various measures includingalternative use of fixed assets to generate revenue.
The suspension of work at Company's Uttarpara Plant and lay off at Company's PithampurPlant are continuing as it is unviable to operate the two plants under present businessconditions.
The Company is also in the process of selling identified assets subject to necessaryapprovals to improve net worth as well as immediate cash generation to meet its financialobligations.
Implication of COVID-19
In view of the outbreak of COVID-19 which has been declared as a pandemic by WorldHealth Organisation and subsequent lockdown imposed by the Central and State Government(s)in India the Company is closely monitoring the impact of this pandemic and believes thatthere has been no significant adverse impact on its financial position for the financialyear ended 31st March 2020 as both of its manufacturing plants located at Uttarpara WestBengal and Pithampur Madhya Pradesh had already been under "Suspension ofWork"/"Layoff" prior to imposition of lockdown.
Particulars of Loans Guarantees or Investments
There are no Loans Guarantees and Investments made under the provisions of Section 186of the Companies Act 2013 during the year under review. Details of Loans Guarantees andInvestments as at the year end are given in the notes to the Financial Statements.
Related Party Transactions
There are no contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013. The details of other transactions entered into with theRelated Parties are given in the note - 39 to the Financial Statements.
Your Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and the Rules made thereunder and therefore no amount of principal orinterest was outstanding as on the date of Balance Sheet.
Corporate Social Responsibility Initiatives
In view of no operating profit the Company is not in a position to make anyexpenditure under Corporate Social Responsibility as per the provisions of Companies Act2013.
Risks and Concerns and its Management
The Company exposed to some internal risks to generate liquidity to meet the existingliability of the Company and day to day activities as the Uttarpara Plant of the Companyis still under suspension of work and Pithampur Plant of the Company is still underlayoff.
In order to identify and mitigate risks the Company has constituted a Corporate RiskManagement Committee. The details of Committee and its terms of reference are set out inthe Corporate Governance Report forming part of the Board's Report. The Company has aCorporate Risk Management Charter to identify the nature and magnitude of risk associatedwith the Company and to take steps for mitigating the impact of such risks. The CorporateRisk Management Committee continuously identify and prioritize the risks associated withthe functioning of the Company lays down mitigation plan for identified risks withassigning responsibilities and adequately monitoring and
managing the same. These are reviewed periodically and placed before the Board.
As reported earlier the Company has declared "Suspension of Work" at itsUttarpara Plant in Hooghly District of West Bengal with effect from 24th May 2014. AtPithampur Plant the seven staff and technician grade employees have been laid off witheffect from 4th December 2014. The general industrial relation at both the plants issensitive but being managed. The number of employees as on 31st March 2020 is 395.
Extract of Annual Return
The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-2 andis also available in the website link as mentioned below.
Meetings of the Board and Audit Committee
During the year four Board Meetings and four Audit Committee Meetings were convenedand held. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013. The Audit Committee comprises of Independent Directors namelySmt. Mou Mukherjee (Chairperson) Shri Raj Kamal Johri and a Non-Executive Non-IndependentDirector namely Shri A. Sankaranarayanan. All the recommendations made by the AuditCommittee were accepted by Board. Further details regarding Board Meetings and AuditCommittee Meetings are given in the Corporate Governance Report which forms part of theBoard's Report.
The Company continues to remain committed to high standards of corporate governance.The report on corporate governance as per the requirement of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 forms part of this report is annexed as Annexure-3.The Company has complied with all the requirements of corporate governance. Thecertificate from the Auditors of the Company confirming compliance to the conditions ofthe corporate governance requirements is also annexed.
Directors' Responsibility Statement
In terms of the requirement of Section 134 of the Companies Act 2013 Directors'Responsibility Statement is annexed as Annexure-4 to this report.
Information on Remuneration
Information as per the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are annexed as Annexure-5 and Annexure-6 to thisreport.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Additional Information relating to conservation of energy technology absorptionforeign exchange earnings and outgo as required under Section 134(3)(m) of the CompaniesAct 2013 is annexed as Annexure-7 to this report.
Internal Financial Controls System
The Company has comprehensive and adequate internal financial controls system for allmajor processes including financial statements to ensure reliability of reporting. Thesystem also helps management to have timely data/feedback on various operationalparameters for effective review. It also ensures proper safeguarding of assets across theCompany and its economical use. The internal financial controls system of the Company iscommensurate with the size scale and complexity of its operations. The systems andcontrols are periodically reviewed and modified based on the requirement. The Company hasan internal audit function which is empowered to examine the adequacy and compliance withpolicies plans and statutory requirements. It is also responsible for assessing andimproving the effectiveness of risk management control and governance process. The scopeof Internal Audit is well defined and documented and the audit committee reviews theobservations of the Internal Audit critically. The composition and working of the auditcommittee forms part of the Corporate Governance Report.
The Report by the Auditors is self-explanatory. The Statutory Auditors of the CompanyMessrs. Ray & Ray Chartered Accountants (Registration No.301072E) were appointed inthe Seventy-seventh Annual General Meeting of the Company held on 18th September 2019 asStatutory Auditors of the Company until the conclusion of Eighty-second Annual GeneralMeeting to be held in 2024 for the financial years 2019-20 till 2023-24.
Further with regard to preparation of accounts on going concern basis the Auditorshave made some observations under "Emphasis of Matter" appearing in theAuditors' Report which the management has responded in note-45 to the audited financialstatements for the year ended 31st March 2020.
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 Messrs. R.B.M. & Associates a firm of Company Secretaries in Practise (CPNo. 20376) to undertake the Secretarial Audit of the Company.
The Report of the Secretarial Auditor is annexed herewith as Annexure-8. Thereare no qualifications or observations or remarks made by Secretarial Auditor in hisreport.
The Company has no subsidiary company and therefore nothing is required to be disclosedwith respect to subsidiary company.
Declaration by Independent Directors
Shri Raj Kamal Johri and Smt. Mou Mukherjee are Independent Directors on the Board ofyour Company. In the opinion of the Board and as confirmed by these Directors they fulfilthe conditions specified in Section 149 of the Companies Act 2013 and the Rules madethereunder about their status as Independent Directors of the Company.
Independent Directors Database
MCA vide its Notification dated 1st December 2019 introduced new Rules called theCompanies (Appointments and Qualification of Directors) 5th Amendment Rules 2019 forperson eligible and willing to be appointed as an Independent Director. Rule states thatthe compliances to be carried out before appointment of Independent Director as well asfor those who are already appointed.
All our Independent Directors have registered their names in the Independent Directorsdatabase already.
There is no change in the Directorship during the year.
At the ensuing Annual General Meeting Shri Uttam Bose Director of the Companyretires by rotation and being eligible offers himself for re-appointment.
Smt Mou Mukherjee Independent Director of the Company will complete his 1st term offive consecutive years at the ensuing Annual General Meeting and being eligible isproposed to be reappointed for a further period of five consecutive years.
Shri Om Prakash Gupta is to be appointed as an Independent Director of the Company atthe ensuing AGM for a term of 5 consecutive years.
At the ensuing AGM Shri Bijaya Ranjan Mazumder is to be appointed as a Director of theCompany who will retire by rotation.
Information about the Director proposed to be reappointed as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is provided in theReport on Corporate Governance forming part of this Report.
Key Managerial Personnel
Shri Bhikam Chand Mishra is continuing as the Chief Executive Officer of the Company.
Ms. Prativa Sharma is continuing as the Secretary of the Company.
Shri Mahesh Kumar Kejriwal is continuing as the Chief Financial Officer of the Company.
Policy on Appointment of Director and Remuneration
The Nomination and Remuneration Committee identifies and ascertains the integrityqualification expertise skills knowledge and experience of the person for appointmentas Director and Key Managerial Personnel. The appointment of a Director as recommended bythe Nomination and Remuneration Committee requires approval of the Board.
The remuneration / compensation / commission etc. to the Directors and Key ManagerialPersonnel is proposed by the Nomination and Remuneration Committee in compliance withrequirements of the Companies Act and recommended to the Board for it's approval. Approvalof Shareholders is obtained if required.
The Directors receive remuneration by way of fees for attending meetings of the Boardor committees thereof.
At the time of appointing an Independent Director a formal letter of appointment isgiven to the candidate which inter-alia explains the role functions duties andresponsibilities expected of the person as an Independent Director of the Company. TheIndependent Director is also explained in detail the compliance required from him underthe Companies Act 2013 and other relevant regulations. The independence of Director isdecided as per provisions of the Companies Act 2013.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for remuneration of Directors Key Managerial Personnel and SeniorManagement. The said Remuneration Policy posted in the website of the Company www.hindmotor.com under the weblinkhttp//:www.hindmotor.com/files/HML-Remuneration/Policy-290.52019.pdf
The Board of Directors evaluated the annual performance of the Board as a whole itscommittees and the directors individually in accordance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in the following manner :-
i. Structured evaluation forms as recommended by the Nomination and RemunerationCommittee after taking into consideration inputs received from the Directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance for evaluation of the performance of the Board its Committeesand each director were provided to all the members of the Board.
ii. The members of the Board were requested to evaluate by filling the evaluation formsand the duly filled in evaluation forms were required to be sent to the Company Secretaryin a sealed envelope or personally submitted to the Chairman at the concerned meeting.
iii. Based on the individual evaluation of the Directors the Board initiated adetailed discussion at the concerned meeting on the performance of theBoard/Committee/Individual Director and formulated a final collective evaluation of theBoard. The Board also provided an individual feedback to the concerned director on areasof improvement if any.
A separate meeting of Independent Directors was held on 13th November 2019 to evaluatethe performance evaluation of the Chairman of the meeting of Board of Directors (as thereis no chairman of the Board) the Non-Independent Directors the Board and flow ofinformation from management.
Vigil Mechanism/Whistle Blower Policy
As per Section 177(9) of the Companies Act 2013 read with Rule 7 of Companies(Meetings of Board and its Powers) Rules 2014 and Clause 49 of the Equity ListingAgreement the Company has established an effective vigil mechanism named Whistle BlowerPolicy ("the Policy") which is also in conformity with the Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with a view toprovide a mechanism for Directors and Employees of the Company inter alia to raise genuineconcerns of any violations of legal or regulatory requirements incorrect ormisrepresentation of any financial statements and reports etc. The
Company encourages its employees to use the mechanism and has made provision for directaccess to the Chairman of the Audit Committee in appropriate and exceptional cases.Adequate safeguards against victimization of the persons who use such mechanism areprovided in the policy. The policy is posted on the website of the Companywww.hindmotor.com.
Disclosure under The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place a policy for prevention of sexual harassment in accordancewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. The Company did notreceive any complaint during the year 2019-20.
Your Directors acknowledge and thank the Company's customers shareholders stategovernment authorities business associates banks and financial institutions for thesupport extended to the Company. Your Directors also record their appreciation for thecommitment and dedication of the employees of your Company.
| || |
For and on behalf of the Board of Directors
| ||Uttam Bose ||A. Sankaranarayanan |
|Kolkata || |
|30th June 2020 ||(DIN- 02340000) ||(DIN- 00385632) |