Your Directors are pleased to present the 33rd Annual Report together with AuditedFinancial Statements of the Company for the year ended March 31 2018.
1. a) Financial Highlights
(Rs in lakhs)
| ||Year Ended |
|Particulars ||March 31 2018 ||March 31 2017 |
|Revenue from Operations ||77741 ||73622 |
|Other Income ||1547 ||1617 |
|Profit before depreciation and exceptional items ||11685 ||11156 |
|Depreciation ||2251 ||2345 |
|Profit before tax ||9434 ||8811 |
|Tax Expenses ||3293 ||3033 |
|Profit after Tax ||6141 ||5778 |
|Other Comprehensive ||(31) ||(63) |
|Income || || |
|Total Comprehensive Income for the year ||6110 ||5715 |
|Balance of profit brought forward ||28754 ||23772 |
|Dividend ||761 ||609 |
|Tax on Dividend ||155 ||124 |
|Balance carried to Balance ||33948 ||28754 |
|Sheet || || |
b) Indian Accounting Standards (Ind AS)
The Company in line with the statutory requirement has adopted Ind AS w.e.f. April 012017. Accordingly Financial Statements for the Financial Year ended March 31 2018 havebeen prepared in accordance with Ind AS prescribed under Section 133 of theCompanies Act 2013 and Companies (Indian Accounting Standards) Rules 2015 and otherrelevant provisions thereof.
Previous periods figures have been restated as per Ind AS to make them comparable.Accordingly the financial highlights as stated above is an extract of the FinancialStatements prepared in accordance with the said Standards.
c) Results of Operations and the state of Company's affairs
Your company achieved aggregate revenue from operations of Rs 77741 lakh in2017-18 (as against Rs 73622 lakh in 2016-17). This marks a growth of 5.6% over theprevious year. The year saw the introduction of 1HP Brush Cutter targeted for light dutyusers. Besides the thrust on construction sector led by promoting usage of advancedtechnology Gasoline Engines is yielding results.
A detailed report on operations titled Management Discussion and Analysis Report'is annexed to the Board's Report as AnnexureA and forms part hereof.
Your Directors recommend a dividend of Rs 9/- per equity share of Rs 10/- each (90%)for the year ended 31st March 2018 (previous year 75%). The total outgo on this account(including dividend tax) will be Rs 1101 lakh.
3. Transfer of Amount to Investor Education and Protection Fund
In compliance with Section 125 of the Companies Act 2013 the Company had transferreda sum of Rs 355184/- during the Financial Year 2017-18 to the Investor Education andProtection Fund established by the Central Government. The said amount representsunclaimed dividend which was lying with the Company for a period of seven years from thedue date of payment. At the beginning of the Financial Year reminders for claiming/encashing dividend lying with the Company as aforesaid were sent to all such shareholdersprior to transferring the same to Investor Education and Protection Fund.
4. Transfer of Shares to the Investor Education and Protection Fund
In terms of provisions of Section 124(6) of Companies Act 2013 and Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 sharesof the Company in respect of which dividend entitlements have remained unclaimed forseven consecutive years or more were transferred by the Company to Investor Education andProtection Fund during the year 2017-18.
In terms of aforementioned provisions/rules individual notices were sent to concernedshareholders providing them an opportunity to claim dividend for the Financial Year2009-10 onwards. The said notice alongwith the details of concerned shareholders waspublished in the leading newspapers having wide circulation. Details were also updated onthe website of the Company (www.hondasielpower.com) simultaneously.
Details of the shares lying with NSDL/CDSL in demat suspense account or unclaimedsuspense account are as under:
|1. ||Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year; ||575 Number Shareholders holdings 35924 shares |
|2. ||Number of shareholders who approached listed entity for trans- fer of shares from suspense ac- count during the year; ||2 |
|3. ||Number of shareholders to whom shares were transferred from sus- pense account during the year; ||NIL |
|4. ||Aggregate number of sharehold- ers and the outstanding shares in the suspense account lying at the end of the year; ||575 Number Shareholders holdings 35924 shares |
|5. ||Voting rights ||Frozen till the rightful owner claims the shares |
5. Environment Protection and Safety
Your Company is committed towards protection and safety of environment. The Company isdedicated to serve all the people with free safe and comfortable life' to expandtheir joys lead social developments and fulfill qualitative improvement of life.
All associates and other business partners strive towards controlling emissionseffluents and waste disposal arising out of manufacturing processes product and services.Your Company has been achieving continuous improvement in safety performance through acombination of systems and processes as well as co-operation and support of allstakeholders.
A statement on environmental protection and safety conservation of energy technologyabsorption foreign exchange earnings and outgo is annexed as AnnexureB andforms part of this report.
6. Occupational Health & Safety
Your Company believes in Zero Harm'. The Company's vision is to improve healthand safety standards for the people associated with the Company and working in anycapacity. Efforts are taken to minimize activities which may affect the health and safetyin work place or adversely impact the life of communities living near our plant. Topromote this we are encouraging the use of renewable resources as well as recycled waste.Further steps are taken for optimum utilization of plant with least emission in terms ofnoise and pollution in environment.
7. Extract of Annual Return
Pursuant to section 92(3) of the Companies Act 2013 (the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of Annual Return isAnnexed as AnnexureC and forms part of this report.
8. Details of Board Meetings
During the year five Board meetings were held. Compliance reports of all lawsapplicable to the Company were reviewed by the Board at each meeting.
The Board has been given presentations / briefed on areas covering operations of theCompany business strategy and risk management practices before approving the quarterly /annual Financial Statements of the Company.
The agenda and notes thereon were circulated to Directors as per the requirement ofrelevant laws in the defined agenda format. All material information was incorporated inthe agenda for facilitating meaningful and focused discussions at the meeting. Where itwas not practicable to attach any document to the agenda i.e. the document which containsprice sensitive information and in respect of which consent of the Board of Directors wasobtained for providing the same at a shorter notice of less than 7 days it was placedbefore the meeting with specific reference to this effect in the agenda.
The Company Secretary recorded minutes of proceedings of each Board and Committeemeeting. Draft minutes were circulated to Board/Board Committee members for theircomments. The minutes were duly entered in the Minutes Book within 30 days from theconclusion of the meeting.
During the year under review Board Meetings were held as per the following details:
|Date of the meeting ||Total No. of Directors on the Board of Directors ||No. of Directors attended the meeting |
|May 15 2017 ||8 ||6 |
|August 04 2017 ||8 ||7 |
|September 08 2017 ||8 ||8 |
|November 16 2017 ||8 ||8 |
|February 12 2018 ||8 ||7 |
No resolution by circulation was passed by the Board of Directors during the FinancialYear 2017-18.
All statutory and other important items/ information were placed before the Board forapproval/review.
9. Committees of the Board
The details of composition of the Committees of the Board i.e. Audit Committee;Stakeholders Relationship Committee; Nomination and Remuneration Committee; CorporateSocial Responsibility Committee; Board Committee on Financial
Matters and Risk Management Committee brief terms of reference thereof and details ofmeetings held and attended by the Members during the year are provided in the Report onCorporate Governance forming part hereof as Annexure-F.
10. Managing the Risks of Fraud Corruption and Unethical Business Practices
The Company has formulated following policies with a view to adhere to ethicalstandards in order to ensure integrity transparency independence and accountability indealing with all stakeholders:
a.) Vigil Mechanism / Whistle Blower Policy
As per the provisions of Section 177(9) of the Companies Act 2013 read with Rulesthereof and Regulation 4(2)(d) (iv) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and in line with thecommitment of the Company to highest standards of ethical moral and legal business conductand transparent approach the Vigil Mechanism/ Whistle Blower Policy in the name ofBusiness Ethics Proposal Line (BEPL) has been established.
For the effective implementation of the policy the Company has constituted a BusinessEthics Committee(BEC)comprising of directors/senior executives to customer providean opportunity to all Directors Associates Vendors Customers to access BEC in goodfaith in case an unethical or improper practice in the Company is observed. The detailedpolicy is posted on the Company's website at https:// www.hondasielpower.com.
b.) Risk Management Policy
The Company has in place the Risk Management Process/ Policy. The key risk areas aremonitored and assessed prudentially and effectively. To have the bestpractice/procedure within the Company during the year under review the said policy hasbeen revised to align with the Honda Global Risk Management Policy. The riskreporting channels crisis level reporting criterion and response structure thereofwas inter-alia established through the medium of such revision. Risk awarenesssessions were conducted to improve employees' awareness of possible risks and managementthereof. With a view to review the adequacy and effectiveness of policies and managementprocedures for providing a sound internal control framework over the Company's major businessprocesses an extensive programme of Internal Audits and Management Reviews support thesame. Further in pursuance to Section 177(4)(vii) of the Companies Act 2013Regulation 18(3) and Schedule II Part-C of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Audit Committee reviews and evaluates the internalfinancial controls and risk management system of the Company.
Risk Management Policy of the Company may be accessed at Company's website atthe link https://www.hondasielpower.com.
11. Directors' Responsibility Statement
Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(a) in the preparation of the Annual Accounts for the year ended March 31 2018 theapplicable accounting standards have been followed and there are no material departures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company and profit and loss of theCompany as at March 31 2018.
(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordancewiththeprovisionsoftheCompaniesAct2013forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors have prepared the Annual Accounts 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 theprovisions of all applicable laws and that such systems are adequate and operatingeffectively; and
(g) the Company has complied with the Secretarial Standard-1 (Meetings of Board ofDirectors) Secretarial Standard-2 (General Meetings) issued and amended from time totime by the Institute of Company Secretaries of India.
12. Particulars of loans guarantees or investments made under Section 186 of theCompanies Act 2013
The Company has not made any loans guarantees or investments under Section 186 of theCompanies Act 2013 during the year under review.
i) Statutory Auditors
The Company in its 32nd Annual General Meeting held on August 04 2017 approved theappointment of M/s. Price Waterhouse Chartered Accountants LLP (FRN 012754N/ N500016) asthe Statutory Auditors of the Company for a term of 5 years i.e. from the conclusion of32nd Annual General Meeting till the conclusion of 37th Annual General Meeting ofthe Company.
The Report of the Auditors on the Financial Statements of the Company is part of theAnnual Report. There has been no qualification reservation adverse remark or disclaimergiven by the Auditors in their Report.
During the year under review the Auditors have not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
ii) Cost Auditors
In terms of the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Amendment Rules 2014 the Board of Directors ofthe Company has on the recommendation of the Audit Committee approved the appointment ofM/s Rakesh Singh & Co. Cost Accountants as Cost Auditors of the Companyfor the Financial Year 2018-19.
M/s Rakesh Singh & Co. have vast experience in the field of cost audit and haveconducted the audit of the cost records of the Company for the past several years.A certificate from M/s Rakesh Singh & Co. Cost Accountants has been received to theeffect that their appointment as Cost Auditors of the Company if made would be inaccordance with the limits specified under Section 141 of the Companies Act 2013 andRules framed thereunder.
Their remuneration as mentioned in the Notice convening 33rd Annual GeneralMeeting shall be subject to the approval of the Members.
iii) Secretarial Auditor and Secretarial Audit Report
The Secretarial Audit was carried out by M/s TVA & Co. LLP Company Secretariesfor the Financial Year 2017-18. The Report given by the Secretarial Auditors is annexed asAnnexure - D and forms an integral part of this Board's Report. There hasbeen no qualification reservation or adverse remark or disclaimer in their Report. Duringthe year under review the Secretarial Auditors had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act. In terms of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the AuditCommittee recommended and the Board of Directors appointed M/s. TVA & Co. LLPas the Secretarial Auditors of the Company for the Financial Year ending March 312019. M/s TVA & Co. LLP has confirmed that their appointment as Secretarial Auditorof the Company is in accordance with the applicable provisions of the Act and rules framedthereunder.
14. Related Party Transactions
In line with the requirements of the Companies Act 2013 and Listing Regulations allrelated party transactions are entered into on arm's length basis in the ordinary courseof business. Accordingly no transactions are being reported in Form AOC-2 in terms ofSection 134 of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015prior approval of the Audit Committee has been obtained for all related partytransactions. Omnibus approval was obtained for un-foreseen transactions. A report on thetransactions specifying the nature value and terms and conditions of the same doneduring the quarter vis- -vis the approval granted were presented to the Audit Committeeon a quarterly basis for its review. The transactions which were likely to crossmateriality threshold as prescribed were placed before the Members for their approval.
The Related Party Transactions Policy as approved by the Board may be assessed at theCompany's website at https://www.hondasielpower.com.
15. Details in respect of adequacy of Internal Control over Financial Reporting
The Company has Internal Control over Financial Reporting (ICOFR) frameworkcommensurate with the size scale and complexity of its operations. The framework has beendesigned to provide reasonable assurance with respect to recording and providing reliablefinancial and operational information complying with applicable laws safeguarding assetsfrom unauthorized use and embezzlement executing transactions with proper authorizationand ensuring compliance with corporate policies.
The systems standard operating procedures and controls are implemented by the Companyreviewed by the Internal Auditors whose findings and recommendations are placed before the
Audit Committee. The Internal Auditors in association with the Management of theCompany develop an annual audit plan based on the risk profile of the business activities.The
Internal Audit plan is approved by the Audit Committee which also reviews complianceto the plan. The Internal Auditors monitor and evaluate the efficacy and adequacy ofinternal control systems in the Company its compliance with operating systems accountingprocedures and policies at specified locations of the Company. Based on the report ofinternal auditor process owners undertake corrective action(s) in their respectivearea(s) and thereby strengthen the controls. Significant audit observations and correctiveaction(s) thereon are presented to the Audit Committee. The Audit Committee reviews thereports submitted by the Internal Auditors in each of its meeting.
The controls based on the prevailing business conditions and processes have beentested during the year and no reportable material weakness in the design or effectivenesswas observed. The framework on ICOFR over Financial Reporting has been reviewed by theInternal and Statutory Auditors.
16. Corporate Social Responsibility initiatives
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 the Company has established CorporateSocial Responsibility (CSR) Committee and statutory disclosures with respect to the CSRCommittee and an Annual Report on CSR Activities forms part of this Report as AnnexureE.
Your company collaborated with CII and contributed in social development projects ofUttar Pradesh Government for the enhancement of Government school's infrastructure. TheCompany also contributed to Prime Ministers National Relief Fund to support Government'snoble cause. The CSR Policy may be accessed on the Company's website at the linkhttps://www.hondasielpower.com.
17. Criteria for appointment of Directors and remuneration to be paid to Directors KeyManagerial Personnel and other employees
Your Company has put in place policies on Criteria for Appointment of Directors'and Remuneration for Directors KMPs and all other employees of the Company'.
The policies inter-alia stipulates the Directors to be of high integrity withrelevant expertise and experience so as to have a diverse Board. The Policies further laydown the positive attributes/ criteria which the Nomination and Remuneration Committeetakes into consideration while recommending the candidature for the appointment asDirector.
The Policy on Criteria for appointment of Directors' and Remuneration to bepaid to Directors Key Managerial Personnel (KMP) and other employees etc.' may beaccessed on the Company's website at the link https://www.hondasielpower.com.
18. Criteria of Independence
The Nomination and Remuneration Committee assesses the independence of Directors at thetime of appointment/ re- appointment pursuant to the criteria laid down by theCompany in line with the requirements of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Determination of independenceis being re-assessed when any new interests or relationships are disclosed by aDirector.
19. Declaration by Independent Directors
The Board of your Company consists of Dr. Dharam Vir Kapur Mr. Ravi Vira Gupta Mr.Manoj Arora and Ms. Alka Marezban Bharucha as Independent Directors. These Directors haveconfirmed that they fulfil all the requirements as stipulated in
Section 149(6) of the Companies Act 2013 so as to qualify themselves to be appointedas Independent Directors under the provisions of the Companies Act 2013 and the Rulesthereunder.
20. Directors and Key Managerial Personnel (KMP) i) Retirement by Rotation
In accordance with the provisions of the Companies Act 2013 and applicable Regulationsissued by the Securities & Exchange Board of India Mr. Siddharth Shriram (DIN00027750) Chairperson of the Company will retire by rotation at the forthcoming AnnualGeneral Meeting(AGM') and being eligible offers himself for re-appointment. TheBoard recommends his re-appointment.
Necessary resolution for the re-appointment of Mr. Shriram and disclosure interms of the Secretarial Standard 2 (General Meetings) the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 are given in the Notice convening theAnnual General Meeting.
As per the confirmation received from Mr. Shriram he is not disqualified for beingappointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act2013.
ii) Revision in remuneration
The Board of Directors in its Meeting held on May 24 2018 on the recommendation ofNomination and Remuneration Committee at its Meeting held on the same day approvedrevision in remuneration of Mr. Vinay Mittal from 01.04.2018 to 31.03.2019 (both daysinclusive).
As per the confirmation received from Mr. Mittal he is not disqualified for beingappointed as Director as specified in Section 164(2) (a) and (b) of the Companies Act2013. Revision in remuneration of Mr. Vinay Mittal from 01.04.2018 to 31.03.2019 (bothdays inclusive) as per the details provided in the Notice convening the AnnualGeneral Meeting is recommended for your approval.
21. Board/Directors' Evaluation
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations"). The performance of the Board and Committees thereof was evaluated onthe basis of the criteria such as the composition and structure effectiveness ofprocesses information involvement of the Members and functioning etc. The Board and theNomination and Remuneration Committee reviewed performance of the individual Directors onthe basis of the criteria such as the contribution of the individual Director to the Boardand Committee meetings like preparedness on the issues to be discussed meaningful andconstructive discussion and inputs in meetings etc. In addition the Chairman was alsoevaluated on the key aspects of his role. In a separate meeting of Independent Directorsperformance of Non-Independent Directors performance of the Board as a whole andperformance of the Chairman was evaluated. Performance evaluation of Independent Directorswas done by the entire Board excluding the Independent Director being evaluated.
The review concluded by affirming that the Board as a whole the
Committees of the Board as well as all of its Members individually continued todisplay commitment to good governance ensuring a constant improvement of processes andprocedures. It was further acknowledged that every individual Member of the Board and theCommittee thereof contribute its best in the overall growth of the organization.
22. Explanations or comments on qualifications reservations or adverse remarks ordisclaimers made by the Auditors in their reports.
There were no qualifications reservations or adverse remarks by the Auditors in theirrespective reports.
The Company has not accepted any deposits from the public/ members under Section 73 ofthe Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 duringthe year.
24. Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
25. Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
26. Bonus Shares
No Bonus Shares were issued during the year under review.
27. Employees Stock Option Scheme
The Company has not provided any Stock Option Scheme during the year under review.
28. Significant and material orders passed by the regulators
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and Company'soperations.
29. Corporate Governance
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the same. The Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 have strengthened the governance regime in the country.Your Company is in compliance with the governance requirements provided under the new lawand had proactively adopted many provisions of the new law in time. A separate section onCorporate Governance is annexed to this report as Annexure F.
The Auditors' Certificate certifying the Company's compliance with the requirements ofCorporate Governance in terms of the Listing Regulations is annexed as Annexure I. and forms part of the Boards' Report.
30. Sexual Harassment of Women at Workplace.
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (SHWW Act') your Company has a robustmechanism in place to redress complaints reported under it. An Internal ComplaintCommittee (ICC) has also been set up to redress complaints received on sexual harassment.In the Financial Year 2017-18 no case of sexual harassment was reported in the Company.During the course of the year several initiatives were undertaken to demonstrate theCompany's zero tolerance philosophy against sexual harassment which included creation ofcomprehensive and easy to understand training.
31. Code of Conduct and Ethics
The Board of the Company has adopted a Code of Conduct and Ethics for the Directors andSenior Executives of the Company. The object of the Code is to conduct the Company'sbusiness ethically and with responsibility integrity fairness transparency and honesty.The Code sets out a broad policy for one's conduct in dealing with the Company fellowDirectors and Employees and in the environment in which the Company operates. The Code isavailable on the Company's website www.hondasielpower.com. A declaration signed byPresident & CEO of the Company with regard to the compliance with the Code by theMembers of the Board and Senior Executives is annexed as Annexure G andforms part hereof.
32. Particulars of Employees
Particulars of employees and the ratio of the remuneration of each director to themedian employee's remuneration and other details in terms of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are annexed as Annexure J hereof. Particulars ofemployees under Section 197(12) read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report. However interms of Section 136(1) of the Companies Act 2013 the Report and Accounts are being sentto the members and others entitled thereto excluding this statement. The details areavailable for inspection by the Members at the Registered Office of the Company duringworking hours on working days for a period of 21 days before the ensuing Annual GeneralMeeting. However a copy of the Statement shall be made available to any member on demand.
33. Material changes and commitments affecting the financial position of the Companyafter March 31 2018
There were no material changes and commitments affecting the financial position of theCompany after March 31 2018.
Your Directors wish to thank and acknowledge with gratitude the co-operationassistance and support received from the Central Government State Government of UttarPradesh Company's Bankers Shareholders Dealers Vendors Indian and Japanese Promotersof the Company and other Business Associates in the management of affairs of the Company.
The Directors also wish to place on record their sincere appreciation and gratitudetowards the contribution made by each and every associate of the Company.
On behalf of the Board for Honda Siel Power Products Limited Siddharth ShriramChairman