Hisar Spinning Mills Ltd
Directors Reports
Dear Shareholders,
Your Directors have pleasure in presenting the 26th Annual Report together with the
Audited Statement of Accounts of the Company for the financial year ended 31st
March, 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 Lakhs
as against gross receipts of Rs. 2697.89 Lakhs during the previous year showing a increase
of 7.1% over previous year and profit (after tax) was Rs. 141.10 Lakhs for the year as
against net profit (after tax) of Rs. 16.64 Lakhs during previous year showing an increase
of 747.96%. The benefits of technological up gradation of machines in 2015-16 have started
accruing and the directors are optimistic about better future performance of the company.
SUBSIDIARY COMPANY
During the year ended 31s1 March, 2018, the Company did not have any
subsidiary company.
DEPOSITS
The Company has not accepted or renewed any deposit from the public during the year
under review pursuant to the provisions of Companies Act, 2013 and rules made there under.
DIVIDEND
With a view to conserve resources of the company, your Directors do not recommend any
dividend for the year under review.
DIRECTORS
Pursuant to the provisions of Sections 196, 197, 203 of Companies Act 2013 read with
Companies (Appointment and Qualification of Directors) Rules. 2014, Mrs. Sapna Kansal,
Director, was appointed as a Whole Time Director on the Board of the Company for a period
of five years w.e.f. 14th December, 2017.
In accordance with the provisions of the Companies Act, 2013 and the Articles of
Association of Company, Mrs. Sapna Kansal, (DIN: 06892410)Director, shall retire by
rotation at the forthcoming Annual General Meeting and being eligible, offers herself for
re-appointment.
The remuneration of Mr. Anurag Gupta (DIN No. 00192888), Managing Director, was
enhanced 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) |
STATUTORY AUDITORS
At the 25m Annual General Meeting of Company held on 28th
September 2017, M/s Romesh K Aggarwal & Associates, Chartered Accountants, were
appointed as Statutory Auditors of the Company, for a period of five years i.e. from the
conclusion of 25111 Annual General Meeting of Company till the conclusion of 30th
Annual General Meeting of Company, in accordance with the provisions of section 139 of
Companies Act, 2013 read with Companies (Audit & Auditors) Rules. 2014.
AUDITOR'S REPORT
Observations, if any, made in the Auditor's Report are self explanatory and do not call
any explanation.
SECRETARIAL AUDIT
Mr. Sanjiv Kumar Goel, Practicing Company Secretary has been appointed by the Board to
conduct Secretarial Audit under provisions of section 204 of the Companies Act 2013. The
Secretarial Audit report is annexed with the Director's Report as Annexure -1. There is no
qualification 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. Efforts
are made to optimize the energy cost while carrying out manufacturing operations. As
required by the provisions of section 134 of the Companies Act, 2013, the relevant
information regarding Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo is given in the Annexure- 2 forming part of this report.
STATUTORY DISCLOSURES
None of the Directors of the Company are disqualified under the provisions of section
164 of the Companies Act 2013. The Directors have made the requisite disclosures, as
required under the Companies Act 2013 and SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015 ("hereinafter referred to as Listing
Regulations").
CORPORATE GOVERNANCE
The Company is committed to maintain the good standards of Corporate Governance. The
Company has complied with the Corporate Governance requirements as stipulated under
Listing Regulations. Pursuant to said Regulations, Report on Corporate Governance together
with the Certificate issued by Practicing Company Secretary regarding compliance of
Corporate 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 is
hereby confirmed that:
(a) in the preparation of annual accounts for the financial year ended 31st March,
2018, the applicable accounting standards have been followed and that there are no
material departures;
(b) the Directors have selected such accounting policies and applied them consistently
and made judgements and estimates that were reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company as at 31st March, 2018 and of the
profit of the Company for the year ended on that date:
(c) the Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act 2013 for
safeguarding the assets 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) the Directors have laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and are operating
effectively.
(f) the Directors have devised proper systems to ensure compliance with the provisions
of 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 Act,
2013. Hence, there are no frauds reported by the Auditors other than those which are
reportable to the Central Government. Further, no fraud has been reported to the Central
Government.
EXTRACT OF ANNUAL RETURN
The details forming part of extract of the Annual Return is given in Form MGT-9 in
Annexure - 3.
NUMBER OF BOARD MEETINGS
During the financial year 2017-18, five Board meetings were held. The meetings were
held on 30th May, 2017, 01st September, 2017, 14th
September, 2017, 14th December. 2017 and 14th February, 2018. The
other relevant details of Board meetings and the attendance of the Directors etc. is given
under Corporate Governance Report annexed with Director's Report.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted the Declaration of
Independence, as required pursuant to section 149(7) of the Companies Act 2013 and under
Listing Regulations, stating that they meet the criteria of independence as provided in
sub-section (6).
PARTICULARS OF LOAN, GURANTEES OR INVESTMENTS UNDER SECTION 186
No loans, guarantees or investments under Section 186 of the Companies Act, 2013 have
been given by the Company.
RELATED PARTY TRANSCATIONS
All related party transactions that were entered into during the financial year were in
the ordinary course of business and were at arm's length basis. No Materially significant
related party transactions have been entered by the Company with Promoters, Directors or
Key Managerial Personnel etc. that had potential conflict with the interest of the Company
at large. All Related Party Transactions are placed before the Audit Committee as also the
Board for approval. Prior omnibus approval of the Audit Committee is obtained on yearly
basis for the transactions which are of a foreseen and repetitive nature. The detail of
transactions entered into pursuant to the omnibus approval so granted is placed before the
Audit Committee and the Board of Directors on a quarterly basis. None of the Directors has
any pecuniary relationships or transactions vis-a-vis the company. The details of the same
are given in Form AOC-2 and is annexed herewith.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013. An internal Complaints Committee (ICC) has been set up to redress complaints
received regarding sexual harassment. All employees (permanent, contractual, temporary,
trainees) are covered under this policy. The said policy is uploaded on the Company's
website www.hisarspinningmills.com .
The following is a summary of sexual harassment complaints received and disposed off
during 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 section
148(1) of the Companies Act, 2013, is not applicable to the Company and accordingly such
accounts 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 the
Company which have occurred between the end of the financial year of the Company to which
the financial statements relate and the date of the report other than those disclosed in
the financial statements.
RISK MANAGEMENT POLICY
Risk management is a continuous process across the organization designed to identify,
assess and frame a response to threats that affect the achievement of its objectives. It
enables management to prepare for risks before they devolve to improve the operational
effectiveness. Determination of the risk appetite allows management to deploy resources
according to the need. The Company firmly believes that to ensure effective risk
management, there ought to be risk management plans to handle the risks based on the
priorities and challenges of the business. The factors involved in identified risks must
be considered and the accuracy of assessment is very important. This implies, if proper
risk management is implemented as a best practice then massive capital losses can be
prevented. The success of the Risk Management Framework depends on the efforts taken to
mitigate/ reduce either the probability or consequence of the risk/ threat. Therefore
considering 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 how
they should be managed effectively. Adhering the same, Company has constituted Risk
Management Committee and adopted an effective Risk Management Policy in its place to
assess, mitigate and to monitor the different risks exposed to the industry in which it
operates. Risk management policy of the company is available at company's website
www.hisarspinningmills.com
POLICY ON DIRECTOR'S APPOINTMENT & REMUNERATION AND OTHER PRESCRIBED MATTERS
The Nomination and Remuneration Committee constituted by the Company functions in
accordance with the terms of reference as set out under provisions of Clause 49 of Listing
Agreement read with provisions of Section 178 of the Companies Act, 2013 & rules made
thereunder. Apart from other Corporate Polices which are mandatory under Companies Act as
well as under Listing Agreement, the said Committee has also formulated and recommended to
the Board a Nomination & Remuneration Policy relating to director's appointment and
remuneration including criteria for determining qualifications, positive attributes,
independence of a director and all other matters as stipulated under the provisions of
section 178 of Companies Act 2013.
The policy also relates to remuneration of Director's, KMP's and other employees of the
Company. 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 commensurate
with its size and complexity. Internal control systems provide, among other things, a
reasonable assurance that transactions are executed with Management authorization and that
they are recorded in all material respects to permit preparation of financial statements
in conformity with established accounting principles and that the assets of your Company
are adequately safeguarded against significant misuse or loss.
During the year under review, the Company continued to implement their suggestions and
recommendations to improve the internal financial control environment. Their scope of work
inter-alia includes review of operational efficiency, effectiveness of systems and
processes, and assessing the internal control strengths in all areas. In addition to
statutory audit, the financial controls of the Company at various locations are reviewed
by 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 control
system 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 or
courts 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 2018
was Rs. 3,73,50,000/- comprising of 37,35,000 equity shares of Rs. 10/- each. As required
under Companies (Share Capital and Debenture) Rules 2014, during the year under review,
the Company has not issued equity shares with differential voting rights, sweat equity
shares, preference shares and employee stock options and also not made any provision for
purchase 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 of
section 67(3) of Companies Act 2013.
AUDIT COMMITTEE
Audit Committee constituted by the Company functions in accordance with the terms of
reference as set out under the provisions of Clause 49 of Listing Agreement read with
provisions of Section 177 of Companies Act, 2013 & rules made thereunder and
additional responsibilities assigned to it by Board of Directors of the Company. The
Committee reviews the internal audit reports and findings of internal auditors along with
the comments of management. The functions of the Audit Committee among others include
approving and implementing the audit procedures, effective supervision of financial
reporting system. Whistle Blower Mechanism, internal control and procedures, recommending
appointment of Statutory Auditors, Cost Auditors to Board and also ensuring compliances
with regulatory guidelines. The Board has constituted the Audit Committee comprises of
following:
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 Governance
Report annexed with Director's Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a vigil mechanism named "Whistle Blower Policy/Vigil
Mechanism" to deal with instance of fraud and mismanagement, if any. The detail of
the Policy is explained in the Corporate Governance Report and also available at company's
website www.hisarspinningmills.com .
PERFORMANCE EVALUATION OF BOARD OF DIRECTORS
During the year under review, the Board adopted a formal mechanism for evaluating its
performance and as well as that of its committees, individual Directors, including the
Chairman of the Board in compliance with the Companies Act 2013 and Listing Regulations.
The exercise was carried out through a structured evaluation process covering various
aspects 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 of
Company. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) was
evaluated on the basis of their own performance, expertise, intelligence, their
qualitative & quantitative contribution towards operational achievements,
organizational performance etc. The performance of Non-Executive Independent Directors
were evaluated on the basis of their constructive participations in
Board/Committee/General meetings, their informed & balanced decision-making, ability
to monitor financial controls & systems, & certain allied parameters. The
performance evaluation of various Board Committees constituted under Companies Act &
Listing Agreement was made on the basis of their respective terms of reference, discharge
of functions, governance etc.
Disclosure of information's as required under rule 5(1) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules. 2014
The Provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration
of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of
remuneration in excess of Rs. 102 Lakhs per year to be disclosed in the Report of Board of
Directors are not applicable to the Company as none of the employees was in receipt of
remuneration in excess of Rs. 102 Lakhs during the financial year 2017-18.
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming
part of the Annual Report. Having regard to the provisions of Section 136(1) read with its
relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid
information is being sent to the members of the Company. The said information is available
for inspection at the Registered Office of the Company during working hours and any member
interested in obtaining such information may write to the Company Secretary and the same
will be furnished free of cost.
The Nomination and Remuneration Committee of the Company has affirmed that the
remuneration is as per the remuneration policy of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report, as required by Listing Regulations, forms
part of the Annual Report.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation to all of the Company's employees for
their enormous efforts as well as their collective contribution to the Company's
performance. The Directors would also like to thank shareholders, customers, dealers,
suppliers, Financial Institutions, bankers, Government and all the other business
associates for the continuous support given by them to the Company and their confidence in
its 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 |