to the Members
Your Directors present their seventy-seventh Annual Report together with auditedfinancial statements of the Company for the year ended March 31 2019.
Financial Results / Performance
During the year under review the Companys revenue/Other Income are 36.06 Crorescompared to 9.38 Crores in the previous financial year. The following table gives asummary of the performance.
(Rs. in crores )
|Particulars ||2018-19 || |
|Gross Revenue from Operations/ Other Income ||36.06 || |
|Net Revenue from Operations ||36.06 || |
|Profit/(Loss) before Exceptional items and Tax ||26.60 || |
|Exceptional items (Net) ||0 || |
|Profit/(Loss) before Tax ||26.60 || |
|Tax Expenses (including net refund of Rs. 0.65 Cr from earlier year) ||(0.11) || |
|Net Profit/ (Loss) a er tax ||26.71 || |
|Other Comprehensive Income ||(0.27) || |
|a) Item that will not be reclassified to profit or loss ||(0.37) || |
|b) Tax on Comprehensive Income ||0.10 || |
|Total Comprehensive Income for the year (Comprising Profit/(Loss) for the year (a er tax) and Other Comprehensive Income (a er tax) ||26.45 || |
The revenue account shows a profit of Rs. 26.45 Crores a er providing Rs. 1.20 Croresfor depreciation & amortisation expense. There is a deficit of Rs. 169.79 Crores inthe Statement of Profit and Loss as at the end of the current year as against Rs. 196.24Crores in the last year.
A Cash Flow Statement for the year under review is also a ached to the enclosed AnnualAccounts.
The Company is not having any subsidiary company and therefore consolidated accounts ofthe Company have not been prepared.
Review of Operations
There has been no change during the period under review in the nature of business ofthe Company.
As reported earlier that due to low productivity growing indiscipline shortage offunds and lack of demand for products the Company was compelled to declare"Suspension of work" at its U arpara Plant with e ect from 24th May 2014 andthe suspension of work is continuing due to no change in the situation. The lay o inCompanys Pithampur Plant with e ect from 4th December 2014 due to lack of orders isalso continuing.
No material changes or commitments or any significant and material adverse orders orrulings passed by the regulators or Courts or Tribunals impacting the going concern statusand Companys operations in future have occurred between end of the financial year ofthe company and date of this report.
A detailed Management Discussion & Analysis Report forms part of this report isannexed as Annexure-1.
Outlook for 2018-19
In an e ort to revive operations the Company has started process of rationalising thecost post suspension of work at U arpara plant. The Company started to reduce the manpowersubstantially to a desired level as a result the strength of employee has been decreasedfrom 450 to 395 in number. It has reduced the fixed cost including employee costconsiderably and continuously working on further reducing its fixed cost.
Also the Company has been engaged in scouting for tie-ups with potentialinvestors/strategic partners who can introduce newer product portfolios in the market andinfuse capital into the Company. The Company is considering various measures includingalternative use of fixed assets to generate revenue.
The suspension of work at Companys U arpara Plant and lay o at CompanysPithampur Plant are continuing as it is unviable to operate the two plants under presentbusiness conditions.
The Company is also in the process of selling identified assets subject to necessaryapprovals to improve net worth as well as immediate cash generation to meet its financialobligations.
Particulars of Loans Guarantees or Investments
There are no Loans Guarantees and Investments made under the provisions of Section 186of the Companies Act 2013 during the year under review. Details of Loans Guarantees andInvestments as at the year end are given in the notes to the Financial Statements.
Related Party Transactions
There are no contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013. The details of other transactions entered into with theRelated Parties are given in the note - 40 to the Financial Statements.
Your Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and the Rules made thereunder and therefore no amount of principal orinterest was outstanding as on the date of Balance Sheet.
Corporate Social Responsibility Initiatives
In view of the no operating profit the Company is not in a position to make anyexpenditure under Corporate Social Responsibility as per the provisions of Companies Act2013.
Risks and Concerns and its Management
The Company exposed to some internal risks to generate liquidity to meet the existingliability of the Company and day to day activities as the U arpara Plant of the Company isstill under suspension of work and Pithampur Plant of the Company is still under layo .
In order to identify and mitigate risks the Company has constituted a Corporate RiskManagement Committee. The details of Committee and its terms of reference are set out inthe Corporate Governance Report forming part of the Boards Report. The Company has aCorporate Risk Management Charter to identify the nature and magnitude of risk associatedwith the Company and to take steps for mitigating the impact of such risks. The CorporateRisk Management Committee continuously identify and prioritize the risks associated withthe functioning of the Company lays down mitigation plan for identified risks withassigning responsibilities and adequately monitoring and managing the same. These arereviewed periodically and placed before the Board.
As reported earlier the Company has declared "Suspension of Work" at its Uarpara Plant in Hooghly District of West Bengal with e ect from 24th May 2014. AtPithampur Plant the seven sta and technician grade employees have been laid o with e ectfrom 4th December 2014. The general industrial relation at both the plants is sensitivebut being managed. The number of employees as on 31st March 2019 is 395.
Extract of Annual Return
The extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-2and is also available in the website link as mentioned below.
Meetings of the Board and Audit Committee
During the year four Board Meetings and four Audit Committee Meetings were convenedand held. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013. The Audit Committee comprises of Independent Directors namelySmt. Mou Mukherjee (Chairperson) Shri Raj Kamal Johri and a Non-Executive Non-IndependentDirector namely Shri A. Sankaranarayanan. All the recommendations made by the AuditCommittee were accepted by Board. Further details regarding Board Meetings and AuditCommittee Meetings are given in the Corporate Governance Report which forms part of theBoards Report.
The Company continues to remain commi ed to high standards of corporate governance. Thereport on corporate governance as per the requirement of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of this report is annexed as Annexure-3.The Company has complied with all the requirements of corporate governance. Thecertificate from the Auditors of the Company confirming compliance to the conditions ofthe corporate governance requirements is also annexed.
Directors Responsibility Statement
In terms of the requirement of Section 134 of the Companies Act 2013 DirectorsResponsibility Statement is annexed as Annexure-4 to this report.
Information on Remuneration
Information as per the provisions of Section 197(12) of the Companies Act 2013 readwith Rule 5(1) 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are annexed as Annexure-5 and Annexure-6 to this report.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Additional Information relating to conservation of energy technology absorptionforeign exchange earnings and outgo as required under Section 134(3)(m) of the CompaniesAct 2013 is annexed as Annexure-7 to this report.
Internal Financial Controls System
The Company has comprehensive and adequate internal financial controls system for allmajor processes including financial statements to ensure reliability of reporting. Thesystem also helps management to have timely data/feedback on various operationalparameters for e ective review. It also ensures proper safeguarding of assets across theCompany and its economical use. The internal financial controls system of the Company iscommensurate with the size scale and complexity of its operations. The systems andcontrols are periodically reviewed and modified based on the requirement. TheCompany has an internal audit function which is empowered to examine the adequacy andcompliance with policies plans and statutory requirements. It is also responsible forassessing and improving the e ectiveness of risk management control and governanceprocess. The scope of Internal Audit is well defined and documented and the auditCommittee reviews the observations of the Internal Audit critically. The composition andworking of the audit Committee forms part of the Corporate Governance Report.
The Report by the Auditors is self-explanatory. The Statutory Auditors of the CompanyMessrs. Ray & Ray Chartered Accountants (Registration No.301072E) were appointed inthe Seventy-second Annual General Meeting of the Company held on 25th September 2014 asStatutory Auditors of the Company until the conclusion of Seventy-seventh Annual GeneralMeeting to be held in 2019 for the financial years 2014-15 till 2018-19.
Messrs. Ray & Ray the Statutory Auditors of the Company has completed the firstterm of five years and given their consent to continue as the statutory auditors of theCompany for a further period of five years. Your Directors request you to appoint Messrs.Ray & Ray as the
Statutory Auditors of the Company to hold Office for a further period of five yearsfrom the conclusion of the ensuing 77th Annual General Meeting of the Company till theconclusion of the 82nd Annual General Meeting and to fix their remuneration.
The Company has received a le er pursuant to Sections 139 and 141 of the Companies Act2013 from Ray & Ray Chartered Accountants regarding their eligibility for appointmentas Statutory Auditors of the Company.
Further with regard to preparation of accounts on going concern basis the Auditorshave made some observations under "Emphasis of Ma er" appearing in theAuditors Report which the management has responded in note-47 to the auditedfinancial statements for the year ended 31st March 2019.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Messrs. R.B.M. & Associates a firm of Company Secretaries in Practise (CPNo.8659) to undertake the Secretarial Audit of the Company.
The Report of the Secretarial Auditor is annexed herewith as Annexure-8. Thereare no qualifications or observations or remarks made by Secretarial Auditor in hisreport.
The Company has no subsidiary company and therefore nothing is required to be disclosedwith respect to subsidiary company.
Declaration by Independent Directors
Shri Raj Kamal Johri and Smt. Mou Mukherjee are Independent Directors on the Board ofyour Company. In the opinion of the Board and as confirmed by these Directors they fulfilthe conditions specified in Section 149 of the Companies Act 2013 and the Rules madethereunder about their status as Independent Directors of the Company.
There is no change in the Directorship during the year.
At the ensuing Annual General Meeting Shri A. Sankaranarayanan Director of theCompany retires by rotation and being eligible o ers himself for re-appointment Shri RajKamal Johri Independent Director of the Company will complete his 1st term of fiveconsecutive years at the ensuing Annual General Meeting and being eligible is proposed tobe reappointed for a further period of five consecutive years.
Information about the Director proposed to be reappointed as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is provided in theReport on Corporate Governance forming part of this Report.
Key Managerial Personnel
Shri Bhikam Chand Mishra has resigned from the post of Chief Financial Officer with eect from the close of business hours on 25th May 2018.
Shri Bhikam Chand Mishra has been appointed as the Chief Executive Officer of theCompany with e ect from 26th May 2018.
Ms. Prativa Sharma is continuing as the Secretary of the Company.
Shri Mahesh Kumar Kejriwal has been appointed as the Chief Financial Officer of theCompany with e ect from 26th May 2018.
Policy on Appointment of Director and Remuneration
The Nomination and Remuneration Committee identifies and ascertains the integrityqualification expertise skills knowledge and experience of the person for appointmentas Director and Key Managerial Personnel. The appointment of a Director as recommended bythe Nomination and Remuneration Committee requires approval of the Board.
The remuneration / compensation / commission etc. to the Directors and Key ManagerialPersonnel is proposed by the Nomination and Remuneration Committee in compliance withrequirements of the Companies Act and recommended to the Board for its approval.Approval of Shareholders is obtained if required.
The Directors receive remuneration by way of fees for a ending meetings of the Board orCommittees thereof.
At the time of appointing an Independent Director a formal le er of appointment isgiven to the candidate which inter-alia explains the role functions duties andresponsibilities expected of the person as an Independent Director of the Company. TheIndependent Director is also explained in detail the compliance required from him underthe Companies Act 2013 and other relevant regulations. The independence of Director isdecided as per provisions of the Companies Act 2013.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for remuneration of Directors Key Managerial Personnel and SeniorManagement. The said Remuneration Policy is annexed as Annexure-9 to this report.
The Board of Directors evaluated the annual performance of the Board as a whole itsCommittees and the directors individually in accordance with the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 in the following manner:-
i. Structured evaluation forms as recommended by the Nomination and RemunerationCommittee a er taking into consideration inputs received from the Directors coveringvarious aspects of the Boards functioning such as adequacy of the composition of theBoard and its Committees Board culture execution and performance of specific dutiesobligations and governance for evaluation of the performance of the Board its Committeesand each director were provided to all the members of the Board.
ii. The members of the Board were requested to evaluate by filling the evaluation formsand the duly filled in evaluation forms were required to be sent to the Company Secretaryin a sealed envelope or personally submi ed to the Chairman at the concerned meeting.
iii. Based on the individual evaluation of the Directors the Board initiated adetailed discussion at the concerned meeting on the performance of theBoard/Committee/Individual Director and formulated a final collective evaluation of theBoard. The Board also provided an individual feedback to the concerned director on areasof improvement if any.
A separate meeting of Independent Directors was held on 12th November 2018 to evaluatethe performance evaluation of the Chairman of the meeting of Board of Directors (as thereis no chairman of the Board) the Non-Independent Directors the Board and flow ofinformation from management
Vigil Mechanism/Whistle Blower Policy
As per Section 177(9) of the Companies Act 2013 read with Rule 7 of Companies(Meetings of Board and its Powers) Rules 2014 and Clause 49 of the Equity ListingAgreement the Company has established an e ective vigil mechanism named Whistle BlowerPolicy ("the Policy") which is also in conformity with the Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with a view toprovide a mechanism for Directors and Employees of the Company inter alia to raise genuineconcerns of any violations of legal or regulatory requirements incorrect ormisrepresentation of any financial statements and reports etc. The Company encourages itsemployees to use the mechanism and has made provision for direct access to the Chairman ofthe Audit Committee in appropriate and exceptional cases. Adequate safeguards againstvictimization of the persons who use such mechanism are provided in the policy. The policyis posted on the website of the Company www.hindmotor.com.
Disclosure under The Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place a policy for prevention of sexual harassment in accordancewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. The Company did notreceive any complaint during the year 2018-19.
Your Directors acknowledge and thank the Companys customers shareholders stategovernment authorities business associates banks and financial institutions for thesupport extended to the Company. Your Directors also record their appreciation for thecommitment and dedication of the employees of your Company.
| ||For and on behalf of the Board of Directors || |
|Kolkata ||U am Bose ||A. Sankaranarayanan |
|29th May 2019 ||Director ||Director |