Your Directors have pleasure in presenting the Thirtieth Annual Report together withthe Audited Financial Statements for the Financial Year ended March 312021.
The performance of the Company for the financial year ended March 312021 is summarizedbelow:
(Rs. in lakhs)
| ||2020-21 ||2019-20 |
|Sales Revenue ||44708.36 ||46008.71 |
|Other Income ||145.18 ||54.83 |
|Total Revenue ||44853.54 ||46063.54 |
|Earnings Before Insurance Claim ||6553.54 ||6033.81 |
|Interest Depreciation & Tax (EBIDT) || || |
|Less: Interest and Financing Charges ||1932.57 ||2356.41 |
|Less : Depreciation ||2951.40 ||2996.79 |
|Add: Exceptional item ||564.31 ||(322.15) |
|Profit Before Tax ||2233.88 ||358.46 |
|Less: Tax Expenses ||537.98 ||122.53 |
|Net Profit After Tax ||1695.90 ||235.93 |
|Attributable to: || || |
|Shareholders of the Company ||1695.90 ||235.93 |
|Non-controlling interest ||- ||- |
|Other Comprehensive Income ||(21.31) ||40.40 |
|Total Comprehensive Income for the year ||1674.59 ||276.33 |
|Attributable to: || || |
|Shareholders of the Company ||1674.59 ||276.33 |
|Non-controlling interest ||- ||- |
|Opening Balance in Retained Earnings ||11481.70 ||11391.73 |
|Amount available for Appropriation ||13156.29 ||11668.06 |
|Dividend on Equity Shares ||- ||154.58 |
|Tax on Equity Dividend ||- ||31.78 |
|Transfer to Capital Redemption Reserve ||1490.48 ||- |
|Transfer to General Reserve ||- ||- |
|Transfer to Other Reserve ||- ||- |
|Closing Balance in Retained Earnings ||11665.81 ||11481.70 |
OVERVIEW OF FINANCIAL PERFORMANCE
During the financial year 2020-21;
Operating revenue decreased to Rs.44708.36 lakhs as against Rs.46008.71 lakhsin the previous year.
EBIDT increased to Rs.6553.54 lakhs as against Rs.6033.81 lakhs in theprevious year.
Exceptional Item (charge)/credit includes profit on sale of land and building ofplants situated at Dadra and Sarigam which were vacant and the operations had been shiftedto other plants in earlier years. The profit on sale of property being a non-recurringevent has been considered as an exceptional item. (Previous year figures represents onetime employee separation cost for closure of Sarigam unit and loss due to flood at Baddiplant pending clearance of the insurance claim).
Net Profit after tax increased to Rs.1695.90 lakhs as against Rs.235.93 lakhsin the previous year.
IMPACT OF COVID-19 PANDEMIC
Due to COVID-19 pandemic and the consequent Government imposed nation-wide lock down /restrictions across the country the Company's operations and financial results for theyear have been impacted. The operations of the Company for the first quarter weredisrupted however thereafter the business of the Company continued to operate at normallevels. In view of recent surge in Covid-19 cases few states reintroduced somerestrictions from March-21 which currently is not expected to have any significant impacton the Company's operations / results. The Company continues to be vigilant and cautiousand is taking all necessary steps to secure the health and safety of our employees and theextended eco-system. The Company has taken into account external and internal informationfor assessing the possible impact of Covid-19 on the various elements of financial resultsincluding of its assets and liquidity position. The Company will continue to monitorchanges to the future economic conditions for any material impact as the situationevolves.
SALE OF IMMOVABLE PROPERTY
The land and building of the Company lying idle after the discontinuation of operationsat respective plants were sold and monetized by the Company as per the details below:
Land and building admeasuring 3621 square meters at Dadra (U.T. of Dadra & NagarHaveli and Daman & Diu) were sold to a third party on January 22 2021 for aconsideration of Rs.383.00 lakhs. The manufacturing operations at the said unit wasdiscontinued with effect from March 312015.
Land and building admeasuring 2000 square meters at Sarigam (Gujarat) were sold to athird party on February 22 2021 for a consideration of Rs.332.46 lakhs. The manufacturingoperations at the said unit was discontinued with effect from January 15 2020.
CLOSURE OF MANUFACTURING UNIT
As part of strategy to rationalise the production facilities towards profitableproducts and optimise the cost the operations at the manufacturing facility of theCompany situated at Sitarganj (Uttarakhand) was discontinued with effect from October 162020. The plant and machinery have been shifted to other manufacturing units of theCompany. Most of the employees have been relocated to other plants. No specific separationcost has been incurred.
REDEMPTION OF PREFERENCE SHARES
Your Company redeemed 14904772 Preference Shares (9% Non Convertible RedeemableCumulative Preference shares) of Rs.10/- each at par aggregating to Rs.149047720 duringthe year in two tranches out of accumulated profits of the Company and an equal amountwas transferred to Capital Redemption Reserve.
After the above said redemption the Preference Share capital stands at Rs.745.24 lakhsas on March 31 2021. Subsequently the balance outstanding 7452387 preference shareswere also redeemed in April 2021. As on the date of this report the issued and paid-uppreference share capital of the Company is nil.
The Board of Directors at its meeting held on May 21 2021 have recommended payment ofdividend of Rs.1.00 (Rupee One only) per Equity Share of Rs.10/- each for the financialyear ended March 31 2021 the same amounts to Rs. 171.76 lakhs. The above is subject tothe approval by the shareholders at the ensuing Annual General Meeting of the Company andhence is not recognised as a liability.
The dividends on preference shares accrued during the year 2019-20 amounting to Rs.201.21 lakhs were paid in the last quarter of the financial year 2020-21.
The dividends for the year 2020-21 due on the preference shares redeemed during theyear were paid till the date of the respective redemptions. The dividend on last trancheof outstanding preference shares was provided as on March 31 2021 and paid along withdividend due upto the date of redemption in April 21. Accordingly as on the date of thisReport there is no outstanding dividend payable against the preference shares.
TRANSFER TO RESERVES
An amount of Rs.1490.48 lakhs was transferred to the Capital Redemption Reserve onaccount of redemption of 14904772 nos. of 9% Non-Convertible Redeemable CumulativePreference Shares of Rs.10/- each at par completed upto March 312021. Subsequently onrepayment of the balance Preference shares amounting to Rs.745.24 lakhs in April 2021 anequivalent amount was transferred to Capital Redemption Reserve.
During the year under review no amount has been transferred to General Reserve.
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 to which the FinancialStatements relate and date of this report.
There were no material changes in the nature of business of the Company during the yearunder review.
MANAGEMENT DISCUSSION AND ANALYSIS
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 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
Re-appointment of Independent Director
Mr. Bomi Chinoy (DIN: 07519315) was re-appointed as an Independent Director for asecond term of five consecutive years commencing from May 23. 2021 till May 22 2026 videSpecial Resolution passed by the shareholders on March 27 2021 through Postal Ballotprocess.
Director liable to retire by rotation:
In accordance with the provisions of Section 152 of the Companies Act 2013 ("theAct") and Rules made there under and pursuant to Article 108 of Articles ofAssociation of the Company Mr. Ashwin S. Dani (DIN: 00009126) Non-Executive Directorretires by rotation at the ensuing Annual General Meeting and being eligible offershimself for re-appointment.
(b) Retirements and resignations
Mr. Jalaj Dani a Non-Executive Director of the Company retired at the 29thAnnual General Meeting (AGM) and ceased to be a Director of the Company with effect fromSeptember 26 2020. Mr. Jalaj Dani joined the Board of the Company in 1994 and had been anintegral part of the Board. The Board places on record gratitude for his advice andguidance during his long association with the Company.
Mr. Ashwin R. Nagarwadia resigned as Director with effect from close of business hourson January 4 2021 due to his other engagements and personal commitments. Mr. Nagarwadiawas on the Board of the Company since 2009 and had contributed immensely to thefunctioning of the Board. The Board places on record gratitude for his advice andguidance during his long association with the Company.
Profile and other information of the Director to be re-appointed as required underRegulation 36 of the Listing Regulations and Secretarial Standards - 2 forms part of thenotice convening the ensuing Annual General Meeting.
The above proposal for re-appointment forms part of the Notice of the 30thAnnual General Meeting and the relevant Resolutions are recommended for your approvaltherein.
(c) KEY MANAGERIAL PERSONNEL
Presently Mr. Malav A. Dani (DIN: 01184336) Managing Director Mr. Mehernosh A. Mehta(DIN: 00372340) Wholetime Director Mrs. Avan R. Chaina 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) and Section 203 of the Act read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedfrom time to time.
(d) DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors on the Boardconfirming that:
a) They meet the criteria of independence as prescribed under the provisions of theAct read with the Schedules and Rules issued there under as well as Regulation 16 of theListing Regulations.
b) In terms of Rule 6(3) of the Companies (Appointment and Qualification of Directors)Rules 2014 they have registered themselves with the Independent Director's databasemaintained by the Indian Institute of Corporate Affairs (IICA) Manesar.
c) In terms of Regulation 25(8) of the Listing Regulations they are not aware of anycircumstances or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge their duties.
(e) PERFORMANCE EVALUATION OF THE BOARD
The Nomination & Remuneration Committee of the Company has formulated process andparameters for the evaluation of the Directors individually Committees of the Board andthe Board as a whole. The parameters for performance evaluation inter alia includesperformance of the Board on deciding long term strategies composition of the Boarddischarging governance duties and handling critical issues and other price sensitivematters.
Pursuant to the provisions of the Act read with Rules issued there under andRegulation 17 of Listing Regulations the Board of Directors based on thecriteria/parameters formulated by the Nomination & Remuneration Committee hasevaluated the effectiveness of the Board as a whole the various Committees Directorsindividually (excluding Director being evaluated) and the Chairman. The evaluation wascarried out based on the ratings of the Directors in the questionnaires circulated tothem.
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 has constituted the following Committees and the detailspertaining to such Committees are included in the Corporate Governance Report which formspart of this Annual Report.
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Allotment Committee (disbanded w.e.f. May 212021)
Risk Management Committee (non-mandatory)
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
There were 4 meetings of the Board held during the year. The details of the Meetings ofthe Board and the Committees thereof convened during the financial year 2020-21 are givenin the Corporate Governance Report which forms part of this Annual Report. During theyear all recommendations made by the Committees were approved by the Board.
In accordance with the provisions of the Companies Act 2013 the Annual Return in theprescribed Format is available at the website of the Company athttps://hitechgroup.com/investor/Display/agm.
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 the annual report.
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 2021-22 have 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 onWednesday 2nd August 2017 appointed M/s. Kalyaniwalla & Mistry LLPChartered Accountants (Firm Reg. No: 104607W/W100166) as Statutory Auditors of the Companyfor a term of five (5) years i.e. till the conclusion of 31st Annual GeneralMeeting to be held in the year 2022.
M/s. Kalyaniwalla & Mistry LLP have confirmed that they are not disqualified fromcontinuing as the Statutory Auditors of the Company. The Statutory Auditors have issued anunmodified opinion on the financial statements of the Company for the financial year endedMarch 312021.
b. Cost Auditors
As the Companies (Cost Records and Audit) Rules are not applicable to your Companytherefore cost records as specified by the Central Government under sub-section (1) ofSection 148 of the Companies Act 2013 is not required therefore such accounts andrecords are not made and maintained by the Company. Accordingly the Company had notappointed any Cost Auditor for the financial year 2020-21.
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 & AssociatesChartered Accountants Noida were re-appointed as the Internal Auditors of the Company forthe financial year 2020-21 and further the aforementioned Internal Auditors have beenre-appointed for the current financial year 2021-22 as well.
The Audit Committee of the Board and the Statutory Auditors are periodically apprisedof 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 the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended the Boardhad appointed M/s. Nilesh Shah & Associates Company Secretaries Mumbai to undertakethe Secretarial Audit of the Company for the financial year 2020-21. The SecretarialAuditors have submitted their Report for the financial year ended March 31 2021 in theprescribed Form MR 3 of the Companies Act 2013 and is annexed to this report asAnnexure A'.
M/s. Nilesh Shah & Associates Company Secretaries Mumbai have been re-appointedas the Secretarial Auditors to undertake the Secretarial Audit of the Company for thefinancial year 2021-22.
The Secretarial Audit Report does not contain any material qualification orreservation. The minor remark made is self explanatory.
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 there under.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their remuneration including criteria for determiningqualifications positive attributes independence of a Director and other matters providedunder Section 178(3) of the Act. The salient features of the Nomination and RemunerationPolicy are set out in the Corporate Governance Report which forms part of this AnnualReport. The Policy is also available on Company's website under the web link:https://hitechgroup.com/investor/Displav/codeofConduct
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has complied with the applicable provisions of Sexual Harassment of Womanat Workplace (Prevention Prohibition and Redressal) Act 2013. It has formulated andadopted a Policy on Prevention of Sexual Harassment of Women at Workplace under theaforesaid Act. All employees (permanent contractual temporary trainees) are coveredunder this Policy.
The Company has complied with the provisions relating to Constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act of 2013. The Company has not received any complaint ofsexual harassment at workplace during the year.
Sexual Harassment Policy of the Company is displayed on the Company's website under theweblink: https://hitechgroup.com/ investor/Display/code of Conduct
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: https://hitechgroup. com/investor/Display/code of Conduct
CORPORATE SOCIAL RESPONSIBILITY (CSR)
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 has 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 this 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:https://hitechgroup.com/investor/ Display/code of Conduct
During the financial year 2020-21 the Company has spent Rs.27.68 lakhs towards CSRactivities. The Annual Report on CSR activities undertaken by the Company during thefinancial year 2020-21 is annexed as Annexure B' 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 withRule 8 of the Companies (Accounts) Rules 2014 is appended hereto as Annexure C'and forms part of this Report.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In accordance with the applicable provisions of Companies Act 2013 (hereinafterreferred to as "the Act") read with Investor Education and Protection Fund(Accounting Audit Transfer and Refund) Rules 2016 (hereinafter referred to as the"IEPF Rules") all unclaimed dividends are required to be transferred by theCompany to the IEPF after completion of seven (7) years. Further according to IEPFRules the shares on which dividend has not been claimed by the shareholders for seven (7)consecutive years or more shall be transferred to the demat account of the IEPF Authority.The details relating to amount of dividend transferred to the IEPF during the FY 2020-21and corresponding shares on which dividends were unclaimed for seven (7) consecutiveyears are provided in the General Shareholders Information' section of CorporateGovernance report forming part of this Annual Report.
Members who have not encashed their dividend warrants or whose dividend isunclaimed/unpaid for the financial year 2013-14 or thereafter are requested to write tothe Company's Registrar and Share Transfer Agents Link Intime India Private Limited.Details of unpaid/ unclaimed dividend are provided on Company's website under the web link- https://hitechgroup.com/investor/Display/Unclaimed Unpaid Dividend
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act and the Rules made there underin respect of employees of the Company has been disclosed in Annexure D'.
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).
There were no deposit outstanding as on March 312021.
RELATED PARTY TRANSACTIONS
All Related Party Transactions which were entered during the financial year 2020-21were on an arm's length basis and in the ordinary course of business. There were nomaterial 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 sales transactions with Asian Paints Limited qualify as material RelatedParty Transactions ("RPT") under Regulation 23 of the Listing Regulations.Accordingly Company had obtained shareholders' approval for the said material relatedparty transactions through Special Resolution at the 29th Annual GeneralMeeting held on September 26 2020 for three (3) financial years commencing from April12021.
The Board of Directors of the Company has formulated Policy on dealing with RPTs andPolicy on materiality of Related Party Transactions in accordance with the amendments tothe applicable provisions of the Listing Regulations which is amended from time to time.The said policies can be accessed through the following link:https://hitechgroup.com/investor/Displav/code of Conduct
The details of the related party transactions of the Company as required under IndianAccounting Standard 24 are set out in Note 45 to the financial statements forming part ofthis Annual Report.
The Form AOC - 2 pursuant to Section 134 (3)(h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure E' to thisReport.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate internal financial control system commensurate tothe size and nature of its business. The Company periodically tracks all amendments toAccounting Standards and makes necessary changes to the underlying systems processes andfinancial controls to ensure adherence to the same.
The Company periodically reviews the internal finance control system. During the yearunder review such controls were tested and no reportable material weaknesses in thedesign 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 disclosures risk mitigationmonitoring and integration with strategy and business planning. The Company has alsoconstituted a Risk Management Committee on voluntary basis.
Details of the Risk Management policy and the committee as stated above have beendisclosed in the Corporate Governance Report which forms a part of this Annual Report.
Your Company during the financial year ended March 312021:
a) has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India (ICSI) 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;
d) has not issued Sweat Equity Shares;
e) does not have any scheme or provision of money for the purchase of its own shares byemployees/ Directors or by trustees for the benefit of employees / Directors;
f) There was no revision of financial statements and Boards report of the Companyduring the year under review;
g) during the year under review the Company has not provided any loan or given anyguarantee or made any investment;
h) There were no significant / material orders passed by any of the Regulators orCourts or Tribunals impacting the going concern status of your Company or its operationsin future; and
i) The Company does not have any subsidiary company Joint Venture or AssociateCompany.
j) There was no application made or no proceeding pending under the Insolvency andBankruptcy Code 2016 during the year.
k) The requirement to disclose the details of difference between amount of thevaluation done at the time of onetime settlement and the valuation done while taking loanfrom the Banks or Financial Institutions along with the reasons thereof is notapplicable.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 the Directors state that:
a. in the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards have been followed and there are no materialdepartures from he 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 March 31 2021 and of the profit andloss of the Company for the financial year ended March 312021;
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 gratitude 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: May 212021 ||(DIN: 00009126) |