Your Directors have pleasure in presenting the 26th Annual Report together with theAudited Statement of Accounts of the Company for the financial year ended 31stMarch 2018.
| || ||(Rs. in Lakhs) |
|Financial Highlights ||Year ended 31.3.2018 ||Year ended 31.3.2017 |
|Total income ||2889.35 ||2697.89 |
|Profit before Financial Cost Depreciation Exceptional items and Tax ||434.81 ||439.20 |
|Finance cost ||61.45 ||73.85 |
|Profit before Depreciation Exceptional items and Tax ||373.36 ||365.35 |
|Depreciation ||187.77 ||271.97 |
|Profit before exceptional items and fax ||185.59 ||93.38 |
|Exceptional Items ||0.00 ||-34.60 |
|Profit before tax ||185.59 ||58.78 |
|Less: Tax Expenses || || |
|-Current tax ||82.08 ||62.24 |
|-Deferred tax ||-37.59 ||-20.10 |
|Profit after tax ||141.10 ||16.64 |
|Other Comprehensive Income || || |
|A (i) Items that will not be reclassified to profit or loss || || |
|(a) Re-measurement of the defined benefit plans ||0.26 ||-0.16 |
|(ii) Income tax relating to items that will not be reclassified to profit or loss ||-0.07 ||0.05 |
|Total Other Comprehensive Income for the period ||0.19 ||-0.11 |
|Total Comprehensive Income for the period ||141.29 ||16.53 |
|Earnings per equity share: (Nominal value of equity share - Rs. 10/-) || || |
|Basic (Rs.) ||3.78 ||0.45 |
|Diluted (Rs.) ||3.78 ||0.45 |
OPERATIONAL & PERFORMANCE REVIEW
During the year under review the gross receipts of your Company were Rs. 2889.35 Lakhsas against gross receipts of Rs. 2697.89 Lakhs during the previous year showing a increaseof 7.1% over previous year and profit (after tax) was Rs. 141.10 Lakhs for the year asagainst net profit (after tax) of Rs. 16.64 Lakhs during previous year showing an increaseof 747.96%. The benefits of technological up gradation of machines in 2015-16 have startedaccruing and the directors are optimistic about better future performance of the company.
During the year ended 31s1 March 2018 the Company did not have anysubsidiary company.
The Company has not accepted or renewed any deposit from the public during the yearunder review pursuant to the provisions of Companies Act 2013 and rules made there under.
With a view to conserve resources of the company your Directors do not recommend anydividend for the year under review.
Pursuant to the provisions of Sections 196 197 203 of Companies Act 2013 read withCompanies (Appointment and Qualification of Directors) Rules. 2014 Mrs. Sapna KansalDirector was appointed as a Whole Time Director on the Board of the Company for a periodof five years w.e.f. 14th December 2017.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of Company Mrs. Sapna Kansal (DIN: 06892410)Director shall retire byrotation at the forthcoming Annual General Meeting and being eligible offers herself forre-appointment.
The remuneration of Mr. Anurag Gupta (DIN No. 00192888) Managing Director wasenhanced to Rs. 1.25 Lakhs p.m. w.e.f. December 14 2017 to the remainder of his term i.e.December 28 2021.
As on 31st March 2018 following were the Key Managerial Personnel of Company:
| Mr. Anurag Gupta ||Managing Director |
| Mr. Naveen Kansal ||Chief Executive Officer |
| Shri Sharad Goel ||Chief Financial Officer |
| Ms. Manmeet kaur ||Company Secretary (Resigned w.e.f. 11.06.2018) |
At the 25m Annual General Meeting of Company held on 28thSeptember 2017 M/s Romesh K Aggarwal & Associates Chartered Accountants wereappointed as Statutory Auditors of the Company for a period of five years i.e. from theconclusion of 25111 Annual General Meeting of Company till the conclusion of 30thAnnual General Meeting of Company in accordance with the provisions of section 139 ofCompanies Act 2013 read with Companies (Audit & Auditors) Rules. 2014.
Observations if any made in the Auditor's Report are self explanatory and do not callany explanation.
Mr. Sanjiv Kumar Goel Practicing Company Secretary has been appointed by the Board toconduct Secretarial Audit under provisions of section 204 of the Companies Act 2013. TheSecretarial Audit report is annexed with the Director's Report as Annexure -1. There is noqualification in secretarial audit report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
Energy conservation continues to be an area of major emphasis in your Company. Effortsare made to optimize the energy cost while carrying out manufacturing operations. Asrequired by the provisions of section 134 of the Companies Act 2013 the relevantinformation regarding Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo is given in the Annexure- 2 forming part of this report.
None of the Directors of the Company are disqualified under the provisions of section164 of the Companies Act 2013. The Directors have made the requisite disclosures asrequired under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("hereinafter referred to as ListingRegulations").
The Company is committed to maintain the good standards of Corporate Governance. TheCompany has complied with the Corporate Governance requirements as stipulated underListing Regulations. Pursuant to said Regulations Report on Corporate Governance togetherwith the Certificate issued by Practicing Company Secretary regarding compliance ofCorporate Governance is annexed to this report.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) of the Companies Act 2013 it ishereby confirmed that:
(a) in the preparation of annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed and that there are nomaterial departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that were reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at 31st March 2018 and of theprofit of the Company for the year ended on that date:
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
(f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequately and operating effectively.
FRAUDS REPORTED BY AUDITORS u/s 143(12)
Your company has complied with all the provisions of Section 143 of the Companies Act2013. Hence there are no frauds reported by the Auditors other than those which arereportable to the Central Government. Further no fraud has been reported to the CentralGovernment.
EXTRACT OF ANNUAL RETURN
The details forming part of extract of the Annual Return is given in Form MGT-9 inAnnexure - 3.
NUMBER OF BOARD MEETINGS
During the financial year 2017-18 five Board meetings were held. The meetings wereheld on 30th May 2017 01st September 2017 14thSeptember 2017 14th December. 2017 and 14th February 2018. Theother relevant details of Board meetings and the attendance of the Directors etc. is givenunder Corporate Governance Report annexed with Director's Report.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted the Declaration ofIndependence as required pursuant to section 149(7) of the Companies Act 2013 and underListing Regulations stating that they meet the criteria of independence as provided insub-section (6).
PARTICULARS OF LOAN GURANTEES OR INVESTMENTS UNDER SECTION 186
No loans guarantees or investments under Section 186 of the Companies Act 2013 havebeen given by the Company.
RELATED PARTY TRANSCATIONS
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were at arm's length basis. No Materially significantrelated party transactions have been entered by the Company with Promoters Directors orKey Managerial Personnel etc. that had potential conflict with the interest of the Companyat large. All Related Party Transactions are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee is obtained on yearlybasis for the transactions which are of a foreseen and repetitive nature. The detail oftransactions entered into pursuant to the omnibus approval so granted is placed before theAudit Committee and the Board of Directors on a quarterly basis. None of the Directors hasany pecuniary relationships or transactions vis-a-vis the company. The details of the sameare given in Form AOC-2 and is annexed herewith.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. The said policy is uploaded on the Company'swebsite www.hisarspinningmills.com .
The following is a summary of sexual harassment complaints received and disposed offduring the financial year 2017- 2018:
a) No. of Complaints received in the year: NIL
b) No. of complaints disposed off during the year: NIL
c) No. of cases pending for more than 90 days: NIL
d) No. of workshops or awareness program against sexual harassment carried out: 1
e) Nature of action taken by the employer: NA
MAINTENANCE OF COST RECORDS
The maintenance of cost records as specified by the Central Government under section148(1) of the Companies Act 2013 is not applicable to the Company and accordingly suchaccounts and records are not made and maintained.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report other than those disclosed inthe financial statements.
RISK MANAGEMENT POLICY
Risk management is a continuous process across the organization designed to identifyassess and frame a response to threats that affect the achievement of its objectives. Itenables management to prepare for risks before they devolve to improve the operationaleffectiveness. Determination of the risk appetite allows management to deploy resourcesaccording to the need. The Company firmly believes that to ensure effective riskmanagement there ought to be risk management plans to handle the risks based on thepriorities and challenges of the business. The factors involved in identified risks mustbe considered and the accuracy of assessment is very important. This implies if properrisk management is implemented as a best practice then massive capital losses can beprevented. The success of the Risk Management Framework depends on the efforts taken tomitigate/ reduce either the probability or consequence of the risk/ threat. Thereforeconsidering the same Company's Risk Management Policy includes three key elements:
I Risk Assessment
I. Risk Management and Risk Mitigation
II. Risk Monitoring
Risks are analyzed considering likelihood and impact as a basis for determining howthey should be managed effectively. Adhering the same Company has constituted RiskManagement Committee and adopted an effective Risk Management Policy in its place toassess mitigate and to monitor the different risks exposed to the industry in which itoperates. Risk management policy of the company is available at company's websitewww.hisarspinningmills.com
POLICY ON DIRECTOR'S APPOINTMENT & REMUNERATION AND OTHER PRESCRIBED MATTERS
The Nomination and Remuneration Committee constituted by the Company functions inaccordance with the terms of reference as set out under provisions of Clause 49 of ListingAgreement read with provisions of Section 178 of the Companies Act 2013 & rules madethereunder. Apart from other Corporate Polices which are mandatory under Companies Act aswell as under Listing Agreement the said Committee has also formulated and recommended tothe Board a Nomination & Remuneration Policy relating to director's appointment andremuneration including criteria for determining qualifications positive attributesindependence of a director and all other matters as stipulated under the provisions ofsection 178 of Companies Act 2013.
The policy also relates to remuneration of Director's KMP's and other employees of theCompany. The said policy is given in Annexure-4
INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY
Your Company maintains an adequate and effective Internal Control system commensuratewith its size and complexity. Internal control systems provide among other things areasonable assurance that transactions are executed with Management authorization and thatthey are recorded in all material respects to permit preparation of financial statementsin conformity with established accounting principles and that the assets of your Companyare adequately safeguarded against significant misuse or loss.
During the year under review the Company continued to implement their suggestions andrecommendations to improve the internal financial control environment. Their scope of workinter-alia includes review of operational efficiency effectiveness of systems andprocesses and assessing the internal control strengths in all areas. In addition tostatutory audit the financial controls of the Company at various locations are reviewedby the Internal Auditors who report their findings to the Audit Committee of the Board.The Audit Committee actively reviews the adequacy and effectiveness of internal controlsystem and suggests further strengthening the same wherever required.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review there is no material order(s) passed by the regulators orcourts or tribunal impacting the going concern status and company's operation in future.
DISCLOSURE REGARDING COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES 2014
The paid up listed equity share capital of the Company as at 31s1 March 2018was Rs. 37350000/- comprising of 3735000 equity shares of Rs. 10/- each. As requiredunder Companies (Share Capital and Debenture) Rules 2014 during the year under reviewthe Company has not issued equity shares with differential voting rights sweat equityshares preference shares and employee stock options and also not made any provision forpurchase of its own shares by employees or by trustees.
DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISED DIRECTLY BY THE EMPLOYEES
During the year under review there is NIL disclosure as required under provisions ofsection 67(3) of Companies Act 2013.
Audit Committee constituted by the Company functions in accordance with the terms ofreference as set out under the provisions of Clause 49 of Listing Agreement read withprovisions of Section 177 of Companies Act 2013 & rules made thereunder andadditional responsibilities assigned to it by Board of Directors of the Company. TheCommittee reviews the internal audit reports and findings of internal auditors along withthe comments of management. The functions of the Audit Committee among others includeapproving and implementing the audit procedures effective supervision of financialreporting system. Whistle Blower Mechanism internal control and procedures recommendingappointment of Statutory Auditors Cost Auditors to Board and also ensuring complianceswith regulatory guidelines. The Board has constituted the Audit Committee comprises offollowing:
|S.NO. ||NAME ||DESIGNATION |
|1 ||Sh. Milhlesh Kumar Gupta. Non-executive and Independent Director ||Chairman |
|2 ||Sh. Anurag Gupta Managing Director ||Member |
|3 ||Sh. Sudesh Kumar Garg. Non-executive and Independent Director ||Member |
The other relevant details of Audit Committee are given under Corporate GovernanceReport annexed with Director's Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism named "Whistle Blower Policy/VigilMechanism" to deal with instance of fraud and mismanagement if any. The detail ofthe Policy is explained in the Corporate Governance Report and also available at company'swebsite www.hisarspinningmills.com .
PERFORMANCE EVALUATION OF BOARD OF DIRECTORS
During the year under review the Board adopted a formal mechanism for evaluating itsperformance and as well as that of its committees individual Directors including theChairman of the Board in compliance with the Companies Act 2013 and Listing Regulations.The exercise was carried out through a structured evaluation process covering variousaspects of the Boards functioning such as composition of the Board its committee &members their experience & competencies performance of specific duties &obligations governance and also in accordance with Performance Evaluation Policy ofCompany. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) wasevaluated on the basis of their own performance expertise intelligence theirqualitative & quantitative contribution towards operational achievementsorganizational performance etc. The performance of Non-Executive Independent Directorswere evaluated on the basis of their constructive participations inBoard/Committee/General meetings their informed & balanced decision-making abilityto monitor financial controls & systems & certain allied parameters. Theperformance evaluation of various Board Committees constituted under Companies Act &Listing Agreement was made on the basis of their respective terms of reference dischargeof functions governance etc.
Disclosure of information's as required under rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules. 2014
The Provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 102 Lakhs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs. 102 Lakhs during the financial year 2017-18.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the Annexure formingpart of the Annual Report. Having regard to the provisions of Section 136(1) read with itsrelevant proviso of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the Registered Office of the Company during working hours and any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished free of cost.
The Nomination and Remuneration Committee of the Company has affirmed that theremuneration is as per the remuneration policy of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report as required by Listing Regulations formspart of the Annual Report.
Your Directors wish to convey their appreciation to all of the Company's employees fortheir enormous efforts as well as their collective contribution to the Company'sperformance. The Directors would also like to thank shareholders customers dealerssuppliers Financial Institutions bankers Government and all the other businessassociates for the continuous support given by them to the Company and their confidence inits management.
| ||By order of the Board of Directors || |
| ||Sd/- ||Sd1- |
|Place: Chandigarh ||(Anurag Gupta) ||(Sapna Kansal) |
|Dated: September 05 2018 ||Managing Director ||Executive Director |
| ||DIN-00192888 ||DIN-06892410 |