| Dear Members,
The Directors have pleasure in presenting the Thirty Third Annual
Report together with the Statement of Accounts for the year ended on
March 31,2015
FINANCIAL RESULTS:
During the year under review, net sales turnover was Rs. 5226.08 lacs
as against Rs. 4850.36 lacs during the corresponding previous year.
Weakness in the domestic market experienced during the previous
financial year continued for the first 9 months of FY 14-15. However,
the last 3 months witnessed an improvement in the domestic commercial
vehicle market, a trend that is continuing for FY 15-16 as well. Export
sales were weaker compared to the previous financial year; both in
terms of absolute volume as well as realization from exports due to
depreciation in the Euro. Export earnings were Rs. 1265.89 lacs as
against Rs. 1862.24 lacs during the corresponding previous year. Loss
after tax was Rs157.21 lacs as against Profit of Rs. 84.47 lacs for the
previous year.
2014-2015 2013-2014
(Rs. in lakhs) (Rs. in lakhs)
Sales 5226.08 4850.36
PROFIT 119.99 342.99
Less:
Depreciation 244.56 84.74
Interest 89.08 100.67
PROFIT/(LOSS) BEFORE TAX (213.66) 157.58
Less: Provision for Taxation
Current Tax - 50.00
Deferred Tax (56.45) 23.11
PROFIT/(LOSS) AFTER TAX (157.21) 84.47
Surplus brought forward from Previous Year 372.99 355.77
PROFIT/(LOSS) AVAILABLE FOR APPROPRIATION 215.78 440.23
General Reserve - 15.00
Proposed Dividend - 44.95
Tax on Proposed Dividend - 7.29
Surplus Carried Forward 215.78 372.99
TRANSFER TO GENERAL RESERVES
In view of loss during the year, there was no transfer to General
Reserve.
DIVIDEND
In view of the loss during the financial year 2014-2015, your directors
do not recommend dividend on the equity shares of the Company for the
financial year 2014-2015.
OUTLOOK
Certifications:
The Company has taken various steps to maintain/improve the quality
systems which are in place for last several years.
The Surveillance Audit for ISO/TS 16949:2002 for Quality Management
System was successfully completed during April 2015.
The Surveillance Audit for ISO 14001-2004 for Environmental Management
System was successfully completed during June 2015.
Business:
Overseas Market: Considering the inputs received from overseas
customers, the company is expecting an increase in exports of 5% and
indirect exports of 10%.
Domestic Market:
OE - Based on the inputs received from the OE customers in India, we
are expecting an increase between 10to 15% during the
FinancialYear2015-16.
Industrial and Aftermarket: We are planning growth of a 5% minimum
through development of additional Industrial customers and adding
additional parts for the Aftermarket.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:
There have been no material changes and commitments, if any, affecting
the financial position of the Company, which have occurred between the
end of the financial year and the date of the report.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
4 (Four) meetings of the Board of Directors of the Company were held
during the year.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. S. C. Saran, Director of the Company, retires at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment.
Pursuant to the provisions of Section 149 of the Act, which came into
effect from April 1, 2014, Mr. Shiamak Marshall, Mr. Jehangir H. C.
Jehangir were appointed as Independent Directors at the Annual General
Meeting of the Company held on August 7,2014.
Mr. A. R. Rajwade was reappointed as the Managing Director of the
Company from May 17,2014 for a period of two years which was approved
by the shareholders at the Annual General Meeting held on August 7,
2014. Pursuant to the provisions of Section 203 of the Act, which came
into effect from April 1,2014, the appointments of Managing Director as
key managerial personnel of the Company was formalised.
With a view to strengthen the Board and also to meet the regulatory
requirements, Ms. Devaki Saran, & Mr. Richard Koszarek were appointed
as Additional Directors of the Company with effect from August 14, 2014
and Mr. Sharad Jain was appointed as Additional Director of the Company
with effect from November 5, 2014. The Board has also appointed Ms.
Devaki Saran as an Executive Director and Chief Financial Officer of
the Company with effect from August 14,2014 for a period of three
years.
The resolutions seeking approval of the Members for the appointment of
Ms. Devaki Saran, Mr. Richard Koszarek and Mr. Sharad Jain have been
incorporated in the notice of the forthcoming annual general meeting of
the Company along with brief details about them. The Company has
received notices under Section 160 of the Act along with the requisite
deposit proposing their appointment.
The necessary resolution for seeking approval of shareholders for the
appointment of Mr. Richard Koszarek as an Independent director with
effect from August 14,2014 has been incorporated in the notice of the
forthcoming annual general meeting of the Company.
DECLARATION FROM INDEPENDENT DIRECTORS
Mr. Shiamak Marshall, Mr. Jehangir H. C. Jehangir and Mr. Richard
Koszarek, who are independent directors, have submitted a declaration
that each of them meets the criteria of independence as provided in sub
Section (6) of Section 149 of the Act and there has been no change in
the circumstances which may affect their status as independent director
during the year. In the opinion of the Board, the independent directors
possess appropriate balance of skills, experience and knowledge, as
required.
AUDIT COMMITTEE OF BOARD OF DIRECTORS
The Audit committee of the Board of directors of the Company consists
of the following members:
1. Mr. Shiamak Marshall
2. Mr. Jehangir H.C. Jehangir
3. Mr. S. C. Saran
VIGIL MECHANISM
The Company has formulated and published a Whistle Blower Policy to
provide a mechanism ("Vigil Mechanism") for employees including
directors of the Company to report genuine concerns. The provisions of
this policy are in line with the provisions of the Section 177 (9) of
the Act.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR
INDEPENDENT DIRECTORS
The Remuneration Policy for directors and-senior management and the
Criteria for selection of candidates for appointment as directors,
independent directors, senior management as adopted by the Board of
Directors are placed on the website of the Company and are annexed as
Annexure I & II to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(I) in the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material
departures;
(ii) they 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/loss of
the Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by
the Company and such internal financial controls are adequate and
operating effectively;
(vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by
the internal, statutory and secretarial auditors and external
consultants and the reviews performed by management and the relevant
board committees, including the audit committee, the board is of the
opinion that the Company's internal financial controls were adequate
and effective during the financial year 2014-15.
The internal auditor also regularly reviews the adequacy of internal
financial control system.
DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES
The Company does not have any subsidiary/ joint ventures/ associates.
EXTRACT OF ANNUAL RETURN
As provided under sub Section (3) of Section 92 of the Act, the extract
of annual return is enclosed, which forms part of the directors' report
as Annexure III.
AUDITORS
M/s. J. L. Bhatt & Company, Chartered Accountants, the Auditors of the
company who would retire at the ensuing Annual General Meeting offer
themselves for reappointment. M/s. J. L. Bhatt & Company, Chartered
Accountants, the existing auditors have furnished a certificate,
confirming that if reappointed for the financial year 2015-2016 their
reappointment will be in accordance with Section 139 read with section
141 of the Companies Act, 2013.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 and other applicable
provisions, if any, of the Companies Act, 2013, M/s. Parikh &
Associates, Practising Company Secretaries were appointed as the
Secretarial Auditor for auditing the secretarial records of the Company
for the financial year 2014-2015.
The Secretarial Auditors' Report is annexed as Annexure IV.
AUDITORS REPORT AND SECRETARIAL AUDITORS' REPORT
The auditor's' report does not contain any qualifications, reservations
or adverse remarks.
As regards, secretarial auditors' observation, the company, is in the
process of identifying and appointing a competent and experienced
company secretary. Meanwhile, the company has engaged the professional
services of practicing company secretaries and has taken care to comply
with applicable provisions of the Companies Act, 2013.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORBTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information in accordance with Clause (m) of Sub-section (3) of Section
134 of the Act read with Companies (Accounts) Rules, 2014 is annexed to
this report as Annexure V.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule
5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are annexed as Annexure VI.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public,
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORY/ JUDICIAL
AUTHORITY
There are no significant or material orders passed by any regulator or
court that would impact the going concern status of the Company and its
future operations.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The Company has not given any loans or guarantees or made investments
in contravention of the provisions of the Section 186 of the Companies
Act, 2013. The details of the loans and guarantees given and
investments made by the Company are provided as under
Loans: Rs. NIL
Investments: Rs. NIL
Guarantees/securities.Rs. NIL
RISK MANAGEMENT POLICY
The Board of Directors of the Company has framed a risk management
policy and is responsible for reviewing the risk management plan and
ensuring its effectiveness. The audit committee has additional
oversight in the area of financial risks and controls. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis.
RELATED PARTY TRANSACTIONS
Particulars of transactions with related parties pursuant to Section
134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts)
Rules, 2,014 are given in Form AOC-2 and the same forms part of this
report as Annexure VII.
EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
An annual evaluation of the Board own performance, Board committees and
individual directors was carried out pursuant to the provisions of the
Act in the following manner:
Sr. Performance Performance evaluation
No. evaluation of performed by
1. Each Individual Nomination and
directors Remuneration
Committee
2. Independent Entire Board of
directors; Directors excluding
the director who is being
evaluated
3. Board, its committees All directors
and individual directors
Sr. Criteria
No.
1. Attendance, Contribution
to the Board and committee
meetings like preparedness
on the issues to be
discussed, meaningful and
constructive contribution
and guidance provided,
key performance aspects
in case of executive
directors etc.
2. Attendance, Contribution to the
Board and committee meetings
like preparedness on the issues to
be discussed, meaningful and
constructive contribution,
and guidance provided etc.
3. Board composition and structure;
effectiveness of Board processes,
information and functioning,
performance of specific duties
and obligations, timely flow
of information etc.
The assessment of committees
based on the terms of reference
of the committees
DISCLOSURE UNDER THE SEXUAL HARRASMENT 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 The Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. All employees
(permanent, contractual, temporary, trainees) are covered under this
policy.
CORPORATE GOVERNANCE REPORT
As per SEBI circular no .CIR/CFD/POLICY CELL/7/2014 dated September 15,
2014 the revised clause 49 is not mandatory to the Company.
ACKNOWLEDGEMENT
The directors thank the Company's employees, customers, vendors,
investors and academic institutions for their continuous support.
The directors also thank the government of various countries,
government of India, the governments of various states in India and
concerned government departments/agencies for their co-operation.
The directors appreciate and value the contributions made by every
member of the Hindustan Hardy Spicer family.
For and on behalf of the Board
Date : July,20, 2015 S. C.SARAN
Place : Mumbai CHAIRMAN
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