DIRECTORS' REPORT Dear Members, Your Directors are pleased to present 26thAnnual Report and the Company's audited financial statement for the financial year ended March 31, 2016. COMPANY'S BUSINESS GROWTH AND PROSPECTS The total income from operations (net of excise) for the current year has decreased to Rs.17613.08 Lacs from Rs. 22395.42 Lacs in the previous year, on this account the profits after tax has also declined from Rs. 132.86 Lacs to Rs. 38.76 Lacs this year. DIVIDEND Your Directors have recommended a dividend of 10% on share of face value of Rs. 10 each i.e. Re. 1/- per share for the financial year ended on March 31, 2016. TRANSFER TO RESERVES Your Directors have not recommended any amount to transfer to general reserve. CHANGES TO AUTHORISED SHARE CAPITAL AND BONUS ISSUE The Board of the Company has in its meeting held on June 24, 2016, approved the proposal for: a) increase in the authorised share capital from Rs.5 Crore to Rs 6 Crore. b) Issue of 1 bonus share for every 2 shares held by the existing shareholders of the Company. The said proposals are subject to approval of the Members at the ensuing Annual General Meeting of the Company. FIXED DEPOSITS Your Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rule, 2014. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not given any loans or guarantees coved under the provisions of Section 186 ofthe Companies Act, 2013. The details of the investments made by the Company are given in the notes to the financial statements. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.hisarmetal.com> Your Directors draw attention of the members to Note 27 to the financial statement which sets out related party disclosures. INTERNAL FINANCIAL CONTROL Your Company has adequate internal control systems commensurate with its size and operations, although not documented. The Company regularly gets its accounts audited from internal auditor. VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the Company's website at the link: <http://www.hisarmetal.com.> RISK MANAGEMENT POLICY Your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in: a) Oversee and implementing the Company's risk management and internal control systems; and b) Overseeing that all the risks that the organization faces such as strategic, financial, operational, regulatory and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Risk Management Policy was reviewed and approved by the Board on recommendation of the Committee. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure A to this Report. NEW MANUFACURING PLANT New manufacturing plant of stainless steel tube & pipes of the Company has commenced commercial production w.e.f. May 02, 2016. The new plant is situated at Hisar (Haryana) and its total manufacturing capacity is 900 MT p.a. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with Section 134 (5) of Companies Act, 2013 the Board of Directors confirms that a) in the preparation of the annual accounts for the year ended March 31, 2016 the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have 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 have 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 have prepared the annual accounts 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 were operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. M.P. Jindal, Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. During the year under review, the members approved the re-appointment of Mrs. Anubha Tayal as a Non-Executive Non-Independent Director who is liable to retire by rotation. During the year under review, due to personal reasons Mr. Rahul Dev Tayal, Non-Executive Non-Independent Director has resigned from the Company. The Board placed on record its appreciation for the valuable services rendered by Mr. Rahul Dav Tayal during his tenure with the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. None of the Independent Directors are due for re-appointment. The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the Non-Executive Directors and Executive Directors. The evaluation of all the Directors and the Board as whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section in this Annual Report. The policy of the Company on Directors' appointment and remuneration, adopted by the Board, is appended as Annexure-B to the Boards' report. AUDIT COMMITTEE The Audit Committee consists of three Directors, out of which two are the Independent Directors, namely Mr. Shital Parshad Jain (Chairman), Mr. Sajjan Singh and Mrs. Anubha Tayal as other members. All the recommendations made by the Audit Committee were accepted by the Board. MEETINGS OF THE BOARD Four meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance in this Annual Report. STATUTORY AUDITORS At the AGM held on September 24, 2014 M/s. Ram Sanjay & Company, Chartered Accountants, were appointed as Statutory Auditor of the Company to hold office till the conclusion of the twenty seventh AGM to be held in the financial year 2017-18. In terms of the first proviso to Section 139(1) of the Companies Act, 2013 the appointment of the Auditors shall be placed for ratification at every AGM. Accordingly, the appointment of M/s. Ram Sanjay & Company, Chartered Accountants, as Statutory Auditors of the Company, is placed for ratification by the shareholders. In this regards, the Company has received a certificate from the Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITORS M/s. Rajesh Garg & Company, Practicing Company Secretary, was appointed by the Board as Secretarial Auditor, to conduct the Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report for financial year 2015-16 forms part of the Annual Report as Annexure-C to the Board's report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has appointed M/s. Rajesh Garg & Company, Practicing Company Secretary, as Secretarial Auditor of the Company for the financial year 2016-17. COST AUDITORS The Board has appointed M/s. Naveen Gupta & Company, Cost Accountants having Firm Registration no. 100920 with the Institute of Cost Accountants of India, as Cost Auditor of the Company for conducting Cost Audit of the Company for the financial year 2016-17. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure D to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES There was no such employee of the Company who is covered under provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 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 Annexure E to this Report. CORPORATE GOVERNANCE Your Company has complied with all the mandatory provisions of corporate governance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along-with Auditors' certificate in this regard forms part of the Annual Report as Annexure F to the Board's report. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forms part of the Annual Report as Annexure G to the Board's report. COMPLIANCE OF GUIDELINES OF SEBI/STOCK EXCHANGE We have duly complied with all the guidelines issued by SEBI/Stock Exchange. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report. INDUSTRIAL RELATIONS Industrial relations continued to be cordial during the year under review. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. The Company has not constituted Employees' Stock Option Scheme (ESOS) and not issue any share to its employees under the said Scheme or any other scheme (including sweat equity shares) during the financial year. 3. Company has not any subsidiary Company. Neither the Managing Director nor the Whole-time Director of the Company receive any remuneration or commission from any of its subsidiaries. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 5. The Company does not require to constitute Corporate Social Responsibility and Governance Committee, hence no CSR Committee was constituted during the financial year. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENT The Board of Directors thank and deeply acknowledge the co-operation, assistance and support provided by all the stakeholders viz., workers, shareholders, bankers, customers, dealers, vendors, Government and Regulatory agencies. For and on behalf of the Board of Directors Sd/- (Abhiram Tayal) Managing Director Sd/- (Karan Dev Tayal) Director Date: June 24, 2016 Place: Hisar |