DIRECTORS' REPORT To The Share Holders Hilton Metal Forging Limited 1. We are please to present Tenth Annual Report of the company and the Audited Statement of account for the year ended 31st March 2015. 2. DIVIDEND The Board of Directors has recommended a dividend of 2.5% i.e. Rupee 0.25 (Rupee Twenty Five Paisa) per share of the face value of Rs. 10/- each for the year ended 31 March, 2015. This dividend is subject to the approval of the Shareholders of the Company at the Annual General Meeting (AGM) scheduled on 30th September, 2015. The Register of Members and Share Transfer Books will remain closed from Wednesday 23rd September, 2015 to Tuesday 29th September, 2015 (both days inclusive) for the purpose of payment of the dividend for the Financial Year ended 31 March, 2015 and the AGM. 3. EXPORTS : The total exports of the Company amounted to Rs 67.27 crores (Previous year Rs 76.46 crores) representing about 75% percent of the net sales. 4. FIXED DEPOSITS During the year, the Company has not accepted any deposits from the public and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 2014. 5. COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE COMPANY SECRETARY IN PRACTICE IN HIS SECRETARIAL AUDIT REPORT During the year under review, the Company has not appointed Company Secretary as they could not find any suitable candidates on acceptable terms. However, since then the Company has appointed Ms. Surabhi Pawar as Company Secretary w.e.f. 1st June, 2015. 6. EXTRACT OF ANNUAL RETURN As per provision of Section 134 of the Companies Act, 2013, the details forming part of the extract of the Annual Return is attached to this Report as "Annexure I" in Form MGT-9. 7. DIRECTORS The Board of Directors had appointed Mrs. Diksha Malhotra as a Woman (Additional) Director w.e.f. 25th March, 2015, pursuant to the provisions of Companies Act, 2013 and Listing Agreement entered with the Stock Exchanges. In terms of Section 161(1) of the Act, Mrs. Malhotra shall hold office upto Annual General Meeting of the Company. The Company has received a requisite notice in writing from a member proposing the candidature of Mrs. Malhotra for appointment as Executive Director with effect from 5th August, 2015 for a tenure of three consecutive years and whose period of office shall be liable to retire by rotation. Her appointment is appropriate and in the best interest of the Company. Mr Navraj Malhotra, Director retires by rotation in terms of provisions of the Companies Act 2013 at the ensuing Annual General Meeting of the Company and offers himself for re-appointment. The Board recommends his re-appointment. Details of the proposal for the re-appointment of Mr. Yuvraj Malhotra as Managing Director and Mr. Navraj Malhotra as a Whole Time Director, with effect from 20th July, 2015 for a tenure of five consecutive years, are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the Tenth Annual General Meeting of the Company. The above named Directors have furnished their respective declarations in Form DIR-8 pursuant to the provisions of Section 164(2) of the Companies Act 2013 read with Rule 14 (1) of the Companies (Appointment and Qualifications of Directors) Rules, 2014. Declaration by Independent Director(s) Further, all Independent Directors have given their respective declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 Number of Meetings of the Board During the year, four Board Meetings and one meeting of Independent Directors were convened and held. The intervening gap between the meetings was within the period prescribed under the Companies Act 2013. The details thereof are given in the Corporate Governance Report. Committees of the Board During the year, your directors have constituted and renamed wherever required, the following committees of the Board in accordance with the requirements of the Companies Act, 2013 and the Listing Agreement. The composition, terms of reference and other details of all Board level committees have been elaborated in the Corporate Governance Report annexed to this report. 1. Audit Committee The Committee comprises of four non-executive Independent Directors as its members. The Chairman of the Committee is an Independent Director. The audit committee assist the Board in the dissemination of the financial information and in overseeing the financial and accounting processes in the Company. During the Year, there were no instances where the Board had not accepted the recommendation of the Audit committee In order to ensure that activities of the Company and its employees are conducted in a fair and transparent manner, the Company has adopted a Whistle Blower Policy & Vigil Mechanism. The details of which are available on the Company's website www.hiltonmetal.com . 2. Nomination and Remuneration Committee The Committee was renamed and comprises of three non-executive Independent Directors as its members. The Chairman of the Committee is an Independent Director. The Board had on the recommendation of the Nomination and Remuneration Committee framed the Nomination and Remuneration Policy to comply with the provisions of Section 178 of the Companies Act, 2013 and amended Clause 49 of the Listing Agreement. The Company's Nomination and Remuneration Policy has been annexed as 'Annexure II' of this Report and is also available on Company's' website. 3. Stakeholders' Relationship Committee The Committee was renamed and comprises of two non-executive Independent Directors and one executive Director as its members. The Chairman of the Committee is a Non executive Independent Director. The Stakeholders' Relationship Committee considers and resolves the grievances of the security holders of the Company. Risk management The Audit Committee has also been delegated the responsibility for monitoring and reviewing risk management, assessment and minimization procedures, developing, implementing and monitoring the risk management plan and identifying, reviewing and mitigating all elements of risks which the Company may be exposed to. The Board also reviews the risk management assessment and minimization procedures Performance Evaluation of the Board Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the directors individually, as well as the evaluation of the working of its Committees. At the meeting of the Board all the relevant factors that are material for evaluating the performance of individual Directors, the Board and its various committees were discussed in detail. A structured questionnaire each for evaluation of the Board, its various Committees and individual Directors was prepared and recommended to the Board by Nomination & Remuneration Committee for doing the required evaluation after taking into consideration the input received from the Directors covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, execution and performance of specific duties, obligations and governance etc. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and non-independent Directors was also carried out by the Independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process. Corporate Governance Pursuant to Clause 49 of the Listing Agreement with BSE & NSE, Management Discussion and Analysis, Corporate Governance Report, Auditors' Certificate regarding compliance of conditions of Corporate Governance and MD/CEO/CFO Annual certification of financial reporting and Internal Controls is attached as a part of the Annual Report 8. STATUTORY AUDITORS AND THEIR REPORT: The Shareholders of the Company in their Ninth Annual General Meeting held on 27th September, 2014 had accorded their approval pursuant to the provisions of Sections 139, 141 and other applicable provisions of Companies Act, 2013 and Rules made there under to appoint M/s. R K Chaudhary & Associates, Chartered Accountants, Mumbai, (Membership No 35487), as the Statutory Auditor of the Company for the tenure of three years commencing from then, (subject to ratification by the Members at every AGM). Accordingly, a resolution seeking ratification of appointment is included in notice conveying the Annual general Meeting. The Auditors' Report to the Shareholders for the year under review does not contain any reservation, qualification or adverse remark. 9. COST AUDITORS AND COST AUDIT REPORT: Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of various activities are required to be audited and the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. NNT & Co., Cost Accountants, to audit the cost accounts of steel products of the Company on a remuneration of Rs. 55,000/- (Rupees Fifty Five Thousand only) for the year 2015-16, subject to the approval of the shareholders at the ensuing Annual General Meeting. The cost audit report for the financial year 31st March 2015 was duly filed with the Central Government (Ministry of Corporate Affairs) on 4th November 2014. 10. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT: 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 has appointed M/s. H P Sanghvi, a firm of Company Secretaries in practice (C.P. No. 3675) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith as 'Annexure III' to this Report. The Secretarial Audit Report contain qualification regarding non appointment of Company Secretary and Chief Financial Offer as Key Managerial Personnel under Section 203 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 11. DISCLOSURES PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS: Details of investments made by the Company have been given in the Financial Statement. The Company has not given any guarantee or advanced any loans pursuant to the provisions of Section 186 of Companies Act, 2013. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All transactions entered into with related parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with the related parties during the financial year which were in conflict with the interest of the Company and hence, enclosing of Form AOC-2 is not required. Suitable disclosure as required by the Accounting Standard (AS 18) has been made in the notes to the Financial Statements. CASH FLOW ANALYSIS: In conformity with the provisions of clause 32 of the listing agreement, the cash flow statement for the year ended 31.03.2015 is annexed hereto ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated Under section 134(3)(m) of the companies act, 2013 read with rule 8(3) of the companies (accounts) rules, 2014, is Annexed herewith as 'Annexure-A'. ENVIRONMENT AND POLLUTION CONTROL: Top priority continues to be given to preservation of the environment by the company. To combat pollution and strengthen the area ecology, considerable emphasis is placed on plantation of fragrant and shady trees. We are Cautious of preserving water through recycling and rainwater harvesting to the extent possible. The company posses the required environmental clearance from the respective pollution control boards and do comply with the relevant Legislation The Company is well aware of its responsibility towards a better and clean environment. Our efforts in environment management go well beyond mere compliance with statutory requirements. The Company has always maintained harmony with nature by adopting eco-friendly technologies and upgrading the same from time to time incidental to its growth programs. PARTICULARS OF EMPLOYEES: Disclosures pertaining to remuneration and other details are required under Section 197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is forming part of the Directors' Report for the year ended 31st March, 2015 and is attached to this Report and marked as "Annexure IV" Pursuant to the provisions of Section 136(1) of the Act and as advised, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection at the Registered Office of the Company during the business hours on working days and Members interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request. Hence, the Annual Report and the Accounts are being sent to all the Members of the Company excluding the aforesaid information. None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his/her spouse and dependent children) more than two percent of the equity shares of the Company. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN Company has Sexual Harassment Policy in place and available on Company's intranet portal. During the year under review, there were no complaints from any of the employee 12. STATUTORY COMPLIANCE The Company has complied with all the statutory requirements. A declaration regarding compliance of the provisions of the various statutes is also made by the Managing Director at each Board Meeting. The Company ensures compliance of the ROC, SEBI Regulations and provisions of the Listing Agreement. 13. DIRECTORS' RESPONSIBILITY STATEMENT: The Board of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on 31st March, 2015 and confirm that: a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d. the directors had prepared the annual accounts on a going concern basis; e. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 14. ACKNOWLEDGEMENTS: Your Directors would like express their sincere appreciation of the positive Co-operation received from the Governments and bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the company resulting in the successful performance during the year. The board also takes this opportunity to express its deep gratitude for the continued co operation and support received from its valued shareholders. The Directors express their special thanks to Mr. Yuvraj Malhotra, Chairman and Managing Director for his untiring efforts for the progress of the Company. For and on behalf of the Board of Directors Yuvraj Malhotra Chairman & Managing Director DIN:00225156 Navraj Malhotra Whole Time Director DIN: 00225183 Dated:05/08/2015 Place: Mumbai |