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Hindustan Motors Ltd.

BSE: 500500 Sector: Auto
NSE: HINDMOTORS ISIN Code: INE253A01025
BSE 14:32 | 01 Jul 17.90 -0.90
(-4.79%)
OPEN

18.10

HIGH

18.75

LOW

17.90

NSE 14:24 | 01 Jul 17.90 -0.90
(-4.79%)
OPEN

18.00

HIGH

18.80

LOW

17.90

OPEN 18.10
PREVIOUS CLOSE 18.80
VOLUME 227552
52-Week high 26.80
52-Week low 7.00
P/E 55.94
Mkt Cap.(Rs cr) 374
Buy Price 0.00
Buy Qty 0.00
Sell Price 17.90
Sell Qty 171798.00
OPEN 18.10
CLOSE 18.80
VOLUME 227552
52-Week high 26.80
52-Week low 7.00
P/E 55.94
Mkt Cap.(Rs cr) 374
Buy Price 0.00
Buy Qty 0.00
Sell Price 17.90
Sell Qty 171798.00

Hindustan Motors Ltd. (HINDMOTORS) - Director Report

Company director report

Your Directors present their seventy-ninth Annual Report together with auditedfinancial statements of the Company for the year ended March 31 2021.

Financial Results / Performance

During the year under review the Company’s revenue/Other Income are Rs.12.18Crores compared to 6.09 Crores in the previous financial year. The following table gives asummary of the performance.

(` in crores )

Particulars 2020-21

2019-20

Gross Revenue from Operations/ Other Income 12.18

6.09

Net Revenue from Operations 12.18

6.09

Profit/(Loss) before Exceptional items and Tax 6.23

(0.84)

Exceptional items (Net) 0

0

Profit/(Loss) before Tax 6.23

(0.84)

Tax Expenses 2.47

(0.02)

Net Profit/ (Loss) aft er tax 3.76

(0.82)

Other Comprehensive Income (0.20)

(0.26)

a) Item that will not be reclassified to profit or loss (0.20)

(0.26)

b) Tax on Comprehensive Income 0.06

0

Total Comprehensive Income for the year (Comprising Profit/(Loss) for the year (after tax) and Other Comprehensive Income (aft er tax) 3.62

(1.08)

The revenue account shows a profit of Rs.3.62 Crores aft er providing Rs.0.82 Croresfor depreciation & amortisation expense. There is a deficit of Rs.167.16 Crores aft eradjusting revaluation in reserve for land and building in the Statement of Profit and Lossas at the end of the current year as against Rs.170.88 Crores in the last year.

A Cash Flow Statement for the year under review is also att ached to the enclosedAnnual Accounts.

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 Utt arpara Plant with effect from 24th May 2014 andthe suspension of work is continuing due to no change in the situation. The lay o inCompany’s Pithampur Plant with effect from 4th December 2014 due to lack of ordersis also 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 ofthe company and date of this report.

A detailed Management Discussion & Analysis Report forms part of this report isannexed as Annexure-1.

Outlook for 2021-22

In an e ort 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 360 to 339 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 o at Company’sPithampur Plant are continuing as it is unviable to operate the two plants under presentbusiness conditions.

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 2021 as both of its manufacturing plants located at Utt arparaWest Bengal and Pithampur Madhya Pradesh had already been under "Suspension ofWork"/"Layo " 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.

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.

Deposits

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 under layo .

In order to identify and mitigate risks the Company has constituted a Corporate RiskManagement Committ ee. The Company has a Corporate Risk Management Charter to identify thenature and magnitude of risk associated with the Company and to take steps for mitigatingthe impact of such risks. The Corporate Risk Management Committ ee continuously identifyand prioritize the risks associated with the functioning of the Company lays downmitigation plan for identified risks with assigning responsibilities and adequatelymonitoring and managing the same. These are reviewed periodically.

Industrial Relations

As reported earlier the Company has declared "Suspension of Work" at its ttU arpara Plant in Hooghly District of West Bengal with effect from 24th May 2014. AtPithampur Plant the six sta and technician grade employees have been laid o with effectfrom 4th December 2014. The general industrial relation at both the plants is sensitivebut being managed. The number of employees as on 31st March 2021 is 339.

Extract of Annual Return

The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-2and is also available in the website i.e. www.hindmotor.com.

Meetings of the Board and Audit Committee

During the year six Board Meetings and four Audit Committ ee 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) and Shri Raj Kamal Johri and a Non-ExecutiveNon-Independent Director namely Shri A. Sankaranarayanan. All the recommendations made bythe Audit Committee were accepted by Board. Further details regarding Board Meetings andAudit Committ ee Meetings are given in the Corporate Governance Report which forms part ofthe Board’s Report.

Corporate Governance

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 asAnnexure-3. The Company has complied with all the requirements of corporategovernance. The certificate from the Auditors of the Company confirming compliance to theconditions of the 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 committ ee reviews theobservations of the Internal Audit critically. The composition and working of the auditcommitt ee forms part of the Corporate Governance Report.

Auditors

The Report by the Auditors is self–explanatory. The Statutory Auditors of theCompany Messrs. Ray & Ray Chartered Accountants (Registration No.301072E) wereappointed in the Seventy-seventh Annual General Meeting of the Company held on 18thSeptember 2019 as Statutory Auditors of the Company until the conclusion ofEighty-second Annual General Meeting to be held in 2024 i.e. for the financial years2019-20 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 auditedfinancial statements for the year ended 31st March 2021.

Secretarial Audit

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.

Subsidiary

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 Smt. Mou Mukherjee and Shri Om Prakash Gupta are IndependentDirectors on the Board of your Company. In the opinion of the Board and as confirmed bythese Directors they fulfil the conditions specified in Section 149 of the Companies Act2013 and the Rules made thereunder about their status as Independent Directors of theCompany.

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 already registered their names in the IndependentDirectors database.

Directors

There is a change in the Board of Directors of the Company.

During the financial year 2020-21 Mr. Om Prakash Gupta (DIN-08772383) was appointedas an Independent and Non-Executive Director of the Company with effect from 30th June2020 and Mr. B aya Ranjan Mazumder (DIN-08862117) was appointed as Non-Executive andNon-Independent Director of the Company with effect from 4th September 2021.

At the ensuing Annual General Meeting Shri A. Sankaranarayanan Director of theCompany retires by rotation and being eligible offers himself for re-appointment.

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 the Chief Executive Officer of the Company has resigned fromthe services of the Company with effect from the close of business hours on 17th August2020.

Shri Prakash Sahu has been appointed as the Chief Executive Officer of the Company witheffect from 15th February 2021.

Shri Mahesh Kumar Kejriwal is continuing as the Chief Financial Officer of the Company.

Ms. Prativa Sharma has resigned as Company Secretary with effect from the close ofbusiness hours on 10th November 2020.

Mrs. Vishakha Gupta has been appointed as Company Secretary with effect from 5thFebruary 2021.

Policy on Appointment of Director and Remuneration

The Nomination and tt Remuneration Commi ee 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 Committ ee 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 att ending meetings of the Boardor committees thereof.

At the time of appointing an Independent Director a formal lett er 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 Committ eeframed a policy for remuneration of Directors Key Managerial Personnel and SeniorManagement. The said Remuneration Policy is posted on the website of the Company www.hindmotor.com. The web link is asfollows:-http://www.hindmotor.com/files/HML-Remuneration-Policy-29052019.pdf

Board Evaluation

The Board of Directors evaluated the annual performance of the Board as a whole itscommitt ees 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 Committ ees 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 submitt ed 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 10th November 2020 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 itsemployees to use the mechanism and has made provision for direct access to the Chairman ofthe Audit Committee in appropriate and exceptional cases. Adequate safeguards againstvictimization of the persons who use such mechanism are provided in the policy. The policyis posted on the website of the Company www.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 Committ ee 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 2020-21.

Appreciation

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 Director Director
30th June 2021 (DIN- 02340000) (DIN- 00385632)

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