Your Directors have pleasure in presenting the Twenty Seventh Annual Report togetherwith the Audited Financial Statements for the Financial Year ended 31st March 2018.
The performance of the Company for the financial year ended 31st March 2018 issummarized below: ( Rs in lakhs)
| ||2017-18 ||2016-17* |
|Sales Revenue ||39768.79 ||40356.24 |
|Other Income ||633.95 ||67.69 |
|Total Revenue ||40402.74 ||40423.93 |
|Earnings Before Interest ||4347.23 ||3589.46 |
|Depreciation & Tax (EBIDT) || || |
|Interest and Financing Charges ||1392.11 ||927.57 |
|Depreciation ||1751.87 ||1299.47 |
|Profit Before Tax ||1203.25 ||1362.42 |
|Less: Tax Expenses ||426.86 ||426.75 |
|NET PROFITAFTER TAX ||776.39 ||935.67 |
|Attributable to: || || |
|Shareholders of the Company ||776.39 ||935.67 |
|Non-controlling interest ||- ||- |
|Other Comprehensive Income ||2.43 ||(47.49) |
|Total Comprehensive Income for the period ||778.82 ||888.18 |
|Attributable to: || || |
|Shareholders of the Company ||778.82 ||888.18 |
|Non-controlling interest ||- ||- |
|Opening Balance in Retained Earnings ||10214.22 ||9512.10 |
|Amount available for Appropriation ||10993.04 ||10400.28 |
|Dividend on Equity Shares ||154.58 ||154.58 |
|Tax on Equity Dividend ||31.47 ||31.48 |
|Transfer to Capital Redemption ||464.16 ||- |
|Reserve || || |
|Transfer to General Reserve ||- ||- |
|Transfer to Other Reserve ||- ||- |
|Closing Balance in Retained Earnings ||10342.83 ||10214.22 |
*Figures stated are as per Ind AS
The Company has adopted Indian Accounting Standards (Ind AS) w.e.f. 1st April 2017with a transition date of 1st April 2016. Accordingly results for the year ended 31stMarch 2018 have been prepared in accordance with Ind AS prescribed under Section 133 ofthe Companies Act 2013. Previous period figures have been restated as per Ind AS to makethem comparable.
OVERVIEW OF FINANCIAL PERFORMANCE
Operating revenue reduced to Rs 39768.79 lakhs from Rs 40356.24 lakhs of previousyear. However EBIDT increased to Rs 4347.23 lakhs from Rs 3589.46 lakhs ofprevious year. Profit before tax reduced to Rs 1203.25 lakhsfrom Rs 1362.42 lakhs.Profit after tax reduced to Rs 776.39lakhsfrom Rs 935.67 lakhs. Total comprehensive incomereduced to Rs 778.82 lakhs from Rs 888.18 lakhs of last year.
COMMENCEMENT OF OPERATIONS AT ROHTAK
After rebuilding of the factory at Rohtak in March 2017 the manufacturing operationsstarted stabilizing during the year. The Company has received a sum of Rs 1905.71 lakhstowards part of property damage claim and a sum of Rs 567.32 lakhs towards businessinterruption claim. The final claim under property damage is under assessment with theInsurance Company.
Your Company is in the process of setting up new manufacturing facilities at MysuruKarnataka. It has also procured land at Visakhapatnam Andhra Pradesh in South India tomeet future demand.
PART REDEMPTION OF PREFERENCE SHARES
Your Company redeemed 4641624 Preference Shares of Rs 10/- each at par aggregating toRs 464.16 lakhs on 9th June 2017 out of profits of the Company after creation of CapitalRedemption Reserve.
Further the Board at its Meeting held on 14th May 2018 approved the redemption of3945381 preference shares pursuant to the terms of issue of the Non-ConvertibleRedeemable Cumulative Preference Shares.
After the above said redemptions the Preference Share capital stands at Rs 2235.72lakhs.
Your Directors are pleased to recommend dividend for approval of the members at theensuing Annual General Meeting as under:
On 9% Non-Convertible Redeemable Cumulative
Shares (NCRCPS') of Rs 10/- each dividend @ 9% p.a. i.e. Rs 0.90 per PreferenceShare of Rs 10/- each payable for the financial year ended 31st March 2018. The proposeddividend on NCRCPS will absorb Rs 285.05 lakhs including Dividend Distribution Tax of Rs48.33 lakhs. During the year an amount of Rs 9.50 lakhs was paid as dividend (includingDividend Distribution Tax of Rs 1.61 lakhs) on the redeemed NCRCPS for the period1.04.2017 to 08.06.2017 (redemption date).
On Equity Shares @ 9%i.e. Rs 0.90 per equity share (Previous year Rs 0.90per equity share) for the financial year ended 31 st March 2018.
The proposed dividend on Equity Share Capital will Rs 186.05 lakhs includingDividend Distribution Tax of Rs 31.47 lakhs.
The final dividend recommended by the Board will be accounted in the financial year inwhich it is approved by the shareholders in the Annual General Meeting.
TRANSFER TO RESERVES
During the year under review no amount has been transferred to General Reserve.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In compliance with the Regulation 34 (2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations') a separate section on theManagement Discussion and Analysis Report giving details of overall industry structuredevelopments performance and state of affairs of Company's business forms an integralpart of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (a) APPOINTMENTS / RE-APPOINTMENTS
In accordance with the provisions of Section 152 of the Companies Act 2013 and Rulesmade thereunder and pursuant to Article 108 of Articles of Association of the Company Mr.Ashwin R. Nagarwadia (DIN: 00466681) Non-Executive Director retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment to theBoard.
Pursuant to the provisions of the Companies Act 2013 ("the Act") and Clause49 of the erstwhile Listing Agreement Mr. Rajnikant Desai Mr. Jayendra Shah and Mr.Harish Motiwalla were appointed as Independent Non-Executive Directors to hold office forfive consecutive years for a term up to 31 st March 2019 by the Members of the Company inthe 23rd Annual General Meeting held on 13th September 2014. They are eligible forreappointment as Independent Directors for another term of five consecutive years.
Pursuant to the provisions of the Act based on the recommendation of the Nominationand Remuneration Committee the Board recommends for the approval of the Members throughSpecial Resolution at the ensuing Annual General Meeting reappointment of Mr. RajnikantDesai Mr. Jayendra Shah and Mr. Harish Motiwalla as Independent Directors for anotherfive consecutive years from 1st April 2019 upto 31st March 2024.
Profile and other information of the aforesaid Directors as required under Regulation36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andSecretarial Standard - 2 forms part of the notice convening the ensuing Annual GeneralMeeting.
The above proposal for re-appointment forms part of the Notice of the 27th AnnualGeneral Meeting and the relevant Resolutions are recommended for your approval therein.
(b) KEY MANAGERIAL PERSONNEL
Mr. Malav A. Dani (DIN: 01184336) Managing Director Mr. Mehernosh A. Mehta (DIN:00372340) Wholetime Director Mr. Bharat I. Gosalia Chief Financial Officer and Mrs.Namita Tiwari Company Secretary are the Key Managerial Personnel of your Company inaccordance with the provisions of Section 2(51) 203 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended from time to time.
(c) DECLARATION OF INDEPENDENCE
All Independent Directors have given necessary declarations that they meet the criteriaof independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 as amended.
(d) FAMILIARISATION PROGRAMME
Whenever any person joins the Board of the Company as a Director an inductionprogramme is arranged for the new (5) years subject to appointee wherein the appointeeis familiarised with the Company his/her roles rights and responsibilities in theCompany the Code of Conduct of the Company to be adhered nature of the industry in whichthe Company operates and business model of the Company.
The details of such familiarisation programmes has been disclosed on the Company'swebsite at http://www.hitechgroup. com/investor/#familiarization-programme
(e) PERFORMANCE EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act 2013 read with Rules issued thereunderand Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board of Directors on recommendation of the Nomination and RemunerationCommittee has evaluated the effectiveness of the Board as a whole the various CommitteesDirectors individually (excluding Director being evaluated) and the Chairman. Theevaluation was carried out based on the ratings of the Directors in the questionnairescirculated to them.
The statement including the manner in which the evaluation exercise was conducted isincluded in the Corporate Governance Report which forms part of this Annual Report.
COMMITTEES OF BOARD
The Board of Directors have formed the following committees and the detail pertainingto such committees are included in the Corporate Governance Report which forms part ofthis Annual Report.
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Committee of Directors
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of the number of Meetings of the Board and the Committees are discussed inthe Corporate Governance Report which forms part of this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 inaccordance with Section 92 (3) of the Companies Act 2013 read with Companies (Managementand Administration) Rules 2014 are set out herewith as Annexure A'.
In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance along with a certificate from the Auditors on its compliance formsan integral part of this report.
CHANGE OF NAME
The name of the Company was changed from "Hitech Plast Limited" to"Hitech Corporation Limited" with effect from 3rd May 2017.
LISTING OF SHARES
The Company's equity shares are actively traded on BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSEIL). Further the applicable listing fees for thefinancial year 2018-19 has been paid to the respective Stock Exchange(s).
AUDITORS AND THEIR REPORT
a. Statutory Auditors
The Members of the Company at its 26th Annual General Meeting held on Wednesdaythe 2nd day of August 2017 appointed M/s. Kalyaniwalla & Mistry LLP CharteredAccountants (Firm Reg. No: 104607W/W100166) as Statutory Auditors of the Company ratificationfor term of their of five appointment by the Members at every Annual GeneralMeeting.
M/s. Kalyaniwalla & Mistry LLP have confirmed their eligibility and qualificationrequired under Sections 139 141 and other applicable provisions of the Companies Act2013 and Rules issued thereunder (including any statutory modification(s) orre-enactment(s) thereof for the time being in force. The Ministry of Corporate Affairsvide its Notification dated 7th May 2018 appointed 7th May 2018 as the date on whichSection 40 of the Companies Amendment Act 2017 shall come into force wherein therequirement of ratificationof appointment of Statutory Auditors at every AGM has beendispensed with. Accordingly the proposal for ratification of appointment of statutoryauditors is not forming part of the Notice convening ensuing Annual General Meeting of theCompany.
The Auditor's Report for the financial year ended 31 st March 2018 does not containany qualification reservation or adverse remarks.
b. Cost Auditors
As the Companies (Cost Records and Audit) Rules are not applicable to your Company theCompany has not appointed any Cost Auditor for the financial year 2018-19.
c. Internal Auditors
M/s. Shashank Patki and Associates Chartered Accountants Pune M/s. J. V.Ramanujam & Co. Chartered Accountants Chennai and M/s. Jasuja Kapoor &Associates Chartered Accountants Noida are re-appointed as the Internal Auditors of theCompany for the financial year 2018-19.
The Audit Committee of the Board of Directors Statutory Auditors and the Managementare periodically apprised of the Internal Audit findings and corrective actions are taken.
d. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedthe Company has re-appointed M/s. Nilesh Shah & Associates Company SecretariesMumbai to conduct the Secretarial Audit of your Company for the financial year ended 31st March 2019. The Secretarial Audit Report is annexed herewith as Annexure B' tothis Report.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under provisions of Section143(12) of the Companies Act 2013 and rules made thereunder.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination and
Remuneration Committee framed a policy for selection and appointment of Directors KeyManagerial Personnel Senior Management and their remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under Section 178(3) of the Act. The salient features of the Policy isset out in the Corporate Governance Report which forms part of this
Annual Report. The Policy is also available on Company's website under the web link:http://www.hitechgroup.com/investor/#policies
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has formulated and adopted a Policy on Prevention of Sexual Harassment ofWomen at Workplace pursuant to the provisions of Sexual Harassment of Woman at Workplace(Prevention Prohibition and Redressal) Act 2013. The Company has not received anycomplaints under the said policy during the year. All employees (permanent contractualtemporary trainees) are covered under this Policy.
Sexual Harassment Policy of the Company is displayed on the Company's website under theweblink: http://www.hitechgroup.com/ investor/#policies
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy' with an objective to conduct itsaffairs in a fair and transparent manner and by adopting the highest standards ofprofessionalism honesty integrity and ethical behaviour. The Company has establishedmechanism for reporting concerns about unethical behaviour actual or suspected fraudviolation of Code of Conduct and Ethics.
The Vigil Mechanism and Whistle Blower Policy may be accessed on the Company's websitethrough the following link: http://www. hitechgroup.com/investor/#policies
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Corporate Social Responsibility(CSR') Committee:
In compliance with the requirements of Section 135 of the Companies Act 2013 read withthe Companies (Corporate Social Responsibility) Rules 2014 as amended the Board ofDirectors have constituted a Corporate Social Responsibility Committee. The details ofmembership of the Committee and the meetings held are detailed in the Corporate GovernanceReport forming part of the Annual Report.
The contents of the CSR Policy of the Company as approved by the Board on therecommendation of the Corporate Social Responsibility Committee is available on thewebsite of the Company and can be accessed through the web link:http://www.hitechgroup.com/ investor/#policies
Initiatives undertaken during the financial year 2017-
During the financial year 2017-18 the Company has spent Rs 12.45 lakhs towardsCorporate Social Responsibility (CSR) expenses. The Annual Report on CSR activitiesundertaken by the Company during the financial year 2017-18 is annexed as AnnexureC' and forms part of this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under Section 134 (3) (m) of the Companies Act 2013 read with theRule 8 of the Companies (Accounts) Rules 2014 is appended hereto as Annexure D'and forms part of this Report.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 205A and 205C of the Companies
Act 1956/ Section 124 125 of the Companies Act 2013 dividend pertaining to thefinancial year 2009-10 amounting to Rs 224166 which remained unpaid or unclaimed for aperiod of 7 years was transferred by the Company to the Investor Education and ProtectionFund. Further dividends which remained unpaid or unclaimed for a period of 7 yearspertaining to the financial year 2010-11 which was declared at the Annual General Meetingof the Company held on 30th July 2011 will be transferred to the Investor Education andProtection Fund by 5th September 2018. Members who have not encashed their dividendwarrants for the year 2010-11 or thereafter are requested to write to the Company'sRegistrar and Share Transfer Agents. Details of unpaid/ unclaimed dividend are provided onCompany's website under the web link -http://www.hitechgroup.com/investor/#unclaimed-unpaid-dividend The details of equityshares transferred to IEPF during 2017-18 are provided in the Corporate Governance Report.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act and the Rules made thereunder inrespect of employees of the Company has been disclosed in Annexure E'.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
The outstanding deposits as on 31st March 2018 was Rs 268.69 lakhs including interest(accrued but not due) of Rs 14.29 lakhs.
Particulars of Deposits covered Under Chapter V of the Act are as follows:
|Particulars ||Amount |
| ||( Rs in Lakhs) |
|Opening Balance ||304.40 |
|Accepted during the year ||- |
|Repaid / Settled during the year ||50.00 |
|As at the close of the year ||254.40 |
|Whether there has been any default in repayment of deposits or interest thereon; and if so the number of times and the total amount involved- || |
|a. At the beginning of the year ||Nil |
|b. Maximum during the year ||Nil |
|c. At the end of the year || |
| ||Nil |
|Deposits which are not in compliance with requirements of Chapter V of Companies Act 2013 ||Nil |
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the Company has not provided any loan or given anyguarantee or made any investment.
RELATED PARTY TRANSACTIONS
All Related Party Transactions which were entered during the financial year 2017-18were on an arm's length basis and in the ordinary course of business. There were nomaterially significant related party transactions entered into by the Company with relatedparty(s) as defined under Section 2(76) of the Companies Act 2013 which may have apotential conflict with the interest of the Company at large Your Company's salestransactions with Asian Paints Limited qualify as material Related Party Transactions("RPT") under Regulation 23 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Accordingly Company has obtained shareholders approvalfor the said material related party transactions.
The Board of Directors of the Company has formulated a Policy on dealing with RPTs anda Policy on materiality of Related Party Transactions which is uploaded on the website ofthe Company and can be accessed through the following link: http://www.hitechgroup.com/investor/#policies
The details of the related party transactions of the Company as required under IndianAccounting Standard-24 are set out in Note 44 to the financial statements forming part ofthis Annual Report. The Form AOC 2 pursuant to Section 134 (3)(h) of the Companies Act2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is set out as AnnexureF' to this Report.
INTERNAL FINANCIAL CONTROLS
Your Company has in place the adequate internal financial controls with reference tofinancial statements. During the year under review such controls were tested and noreportable material weaknesses in the design or operation of the same were observed.
Pursuant to Section 134 of the Companies Act 2013 the Company has a risk managementpolicy in place for identification of key risks to its business objectives impactassessment risk analysis risk evaluation risk reporting and disclosures riskmitigation and monitoring and integration with strategy and business planning.
SIGNIFICANT/ MATERIAL ORDERS PASSED BY THE REGULATORS
There were no significant/material orders passed by any of the Regulators or Courts orTribunals impacting the going concern status of your Company or its operations in future.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There were 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 date of this report.
CHANGE IN NATURE OF BUSINESS
There were no material changes in the nature of business of the Company during the yearunder review.
NAMES OF COMPANIES WHICH HAVE BECOME / CEASED TO BE SUBSIDIARIES JOINT VENTURES ORASSOCIATES DURING THE YEAR
As on 31st March 2018 the Company does not have any subsidiary company Joint Ventureor Associate Company.
a) has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Meetings of the Board of Directors and General Meetings.
b) has not issued Shares having differential rights as to dividend voting orotherwise;
c) does not have any ESOP Scheme for its employees/Directors; and
d) has not issued Sweat Equity Shares.
The Company has always perceived its Manpower as its biggest strength. The emphasis wason grooming in-house talent enabling them to take higher responsibilities. The employeerelations continue to be cordial at all the divisions of the Company. Your Directors placeon record their deep appreciation for the contribution of the employees at all levels.Their dedicated efforts and enthusiasm have been integral to your Company's steadyperformance.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 the Directors confirm that:
a. in the preparation of the annual accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed and there are no materialdepartures from the same;
b. accounting policies have been selected and applied consistently and judgments andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of your Company as at 31st March 2018 and of the profit andloss of the Company for the financial year ended 31 st March 2018;
c. proper and sufficient care has been taken 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. the annual accounts have been prepared on a going concern basis;
e. proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively and;
f. proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
Your Directors wish to express their appreciation and gratitude to all the employees atall levels for their hard work dedication and co- operation during the year.
Your Directors wish to express their sincere appreciation for the excellent support andco-operation extended by the Company's shareholders customers bankers suppliersregulatory and government authorities and all other stakeholders.
| ||For and on behalf of the Board of Directors |
| ||Ashwin S. Dani |
|Place: Mumbai ||Chairman |
|Date: 14th May 2018 ||(DIN: 00009126) |