Dear Members,
Hanung Toys and Textiles Limited
Your Directors have pleasure in presenting the 27th Annual Report, together with the
Audited Statements of Accounts of the Company for the year ended March 31st, 2017 in terms
of the Companies Act, 2013 and rules & regulation made there under & Regulation 33
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as
amended from time to time including Circular Ref.CIR/CFD/FAC/62/2016 dated 05.07.2016, as
may be applicable during the period under review.
FINANCIAL HIGHLIGHTS:
The following table gives the financial highlights of your Company on a standalone
basis according to the Indian Generally Accepted Accounting Principles (GAAP)
FINANCIAL RESULT
|
|
(Rs. in Lacs) |
| Particulars |
Year ended 31.03.2017 |
Year ended 31.03.2016 |
| Net Sale & other Income |
1,411.53 |
9,511.18 |
| Profit/(Loss) Before Interest, Depreciation & Tax |
(3,452.16) |
(62,718.07) |
| Financial Cost |
6.76 |
27,819.71 |
| Depreciation |
5,160.96 |
5,282.63 |
| Net Profit/(Loss) Before Tax |
(8,619.88) |
(95,820.41) |
| Provision for Tax |
2,404.00 |
13,528.00 |
| Profit/(Loss) after Tax |
(11,023.88) |
(1,09,348.41) |
| Appropriations |
- |
- |
| Proposed Dividends |
- |
- |
| Provision for Tax for Dividends |
- |
- |
| Surplus carried forwards to B alance Sheet |
(11,023.88) |
(1,09,348.41) |
| Transfer to General Reserve |
- |
- |
| Net Surplus carried forwards to Balance Sheet |
- |
- |
EROSION OF NET WORTH AND REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL
RECONSTRUCTION (BIFR)
The operating results have been adversely affected due to adverse market conditions,
non receipt of Tuffs subsidy and blockage of substantial funds in slow/ non moving stocks
and debtors. The Company faced severe liquidity crunch and huge scarcity in the working
capital funds. On account of the operational losses and consequent negative net worth, the
Company made a Reference with the Board for Industrial and Financial Reconstruction in
terms of the provisions of section 15(1) of Sick Industrial Companies (Special Provisions)
Act 1985, which has since been registered by the Honble BIFR as Case No. 54/2015.The
reference of the Company has been abated on the ground that more than 75% of the secured
creditors have taken action under section 13(4) of SARFAESI Act and the order of the same
has been passed by the Honble BIFR on dated May 30, 2016. The Company had filed an appeal
against the order of Honble BIFR with Appellate Authority for Industrial & Financial
Reconstruction (AAIFR) and challenged the legal validity of the action taken by the
secured creditors under section 13(4) of the SARFAESI Act. The Honble AAIFR observed in
his order passed on dated on October 21, 2016 that AAIFR have no jurisdiction to decide
the legal validity of the action taken by the secured creditors under section 13(4) of the
SARFAESI Act.
The Company had filed a petition before the Honble High Court of Delhi and challenged
the order passed by Honble AaIFR on dated October 21, 2016. The Honble High Court of
Delhi in its order dated March 23, 2017 observed that a Gazette Notification No. 2792
dated 28.11.2016 was issued enforcing the Sick Industrial Companies (Special Provisions)
Repeal Act, 2003 w.e.f. 1st December, 2016. With the enforcement of the said Repeal Act,
the AAIFR and BIFR stand dissolved and all the proceedings of whatever nature pending
before AAIFR and BIFR under SICA stand abated. The Honble High Court of Delhi further
observed that any company in respect of which, an appeal or enquiry stand abated, might
make reference to the National Company Law Tribunal under the Insolvency and Bankruptcy
Code. The Company is seeking legal advice on the observation made by the Honble High
Court of Delhi with regard to making reference before the jurisdictional National Company
Law Tribunal.
OVERVIEW AND REVIEW OF OPERATIONS
The Indian Toys and Textiles Industry witnessed challenging times as results of low
growth led by issues such as high fiscal deficit, high inflation and worsening current
account balance. The slowdown in the global growth aggravated the sluggishness in the
economy. Apart from the un-favorable demand supply scenario the industry has also been
reeling under the pressure of rising manufacturing cost shortage of working capital etc.
During the period under review your company has achieve gross sales and other income of
Rs. 1411.53 Lacs in comparison to Rs. 9511.18 Lacs in previous year and could not maintain
the EBITDA which comes to Rs. (3,452.16) Lakh in comparison to Rs. (62,718.07) Lakh in
previous year due to shortage of working capital and operational challenges in the
production etc. Due to this the financial performance of the company has been affected
adversely. The impact of measures for improvement in the performance taken place during
the year will be reflected in the current years financial parameters.
DIVIDEND
Due to operational loss suffered by the Company, your directors do not propose any
dividend for the current financial year.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
In terms ofthe provisions of Section 197(12) ofthe Companies Act, 2013 read with Rules
5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement showing the names and other particulars of the employees drawing
remuneration in excess of the limits set out in the said Rules are stated in Annexure F to
this report.
CORPORATE GOVERNANCE
A report as per the requirements of Regulation 27 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 on the Corporate Governance practices followed
by the Company and the Statutory Auditors Certificate on Compliance of mandatory
requirements along with Management Discussion and Analysis is given as an Annexure A to
this report.
The mandatory information under corporate governance is annexed as Annexure-C. It has
always been the endeavor of your company to practice transparency in its management and
disclose all requisite information to keep the public well informed of all material
developments.
CONSOLIDATED FINANCIAL STATEMENTS
There are no subsidiaries and therefore there was no such requirement for preparation
and presentation of consolidated financial statements of the subsidiaries in accordance
with Accounting Standard (AS) 21 on Consolidated Financial Statements.
The Company has 2 (two) Associate Companies- M/s Hanung Infra & Power Ltd. and M/s
Hanung Retail Ltd. Pursuant to first proviso to sub-section (3) of section 129 read with
rule 5 of Companies (Accounts) Rules 2014, Statement containing salient features of the
financial statement of said associate companies is annexed in the prescribed Form AOC-1.
DIRECTORS AND KEY MANAGERIAL PERSONNELS
Mrs. Anju Bansal, Non Executive Director (DIN N0.00028508) has resigned from the Board
of the Company and Board accepted her resignation in the meeting of Board of Directors of
the Company held on 14th November 2016.
Mr. Lalit Chawla, company secretary has resigned and board has accepted his resignation
in their meeting held on 3rd June 2017 and Ms. Sunita Thakur was appointed as a company
secretary of the company in the meeting of Board of Director of the Company held on 19th
June 2017.
It is reported that other than the above there have been no changes in the Directors or
Key Managerial Personnel during the year.
STATUTORY AUDITOR
M/s Ravindra Sharma & Associates, New Delhi were appointed as Statutory Auditor of
the Company for a period of 5 Years subject to ratification by the Shareholders in the
Annual General Meeting of the Company. The Board of Directors of the Company have hereby
proposed the ratification of the appointment of Statutory Auditors of the Company for the
financial Year 2017-18.
M/s Ravindra Sharma & Associates, New Delhi, the Statutory Auditor have confirmed
their eligibility to the effect that their reappointment would be within the prescribed
limits under the Companies Act, 2013, and that they are not disqualified for
re-appointment.
The Report of the Statutory Auditors for the year ended 31st March 2017 does not
contain any qualification, reservation or adverse remark except the emphasis of matters
given as below;
a) During the Financial Year company has not provided depreciation on the assets
situated at unit 126, 127,129E, NSEZ Noida and B-8,9,10, Hosiery, complex , Phase-II,
Noida, the above units exclusively mortgage to ICICI Bank and said bank has taken physical
possession of the properties under Securitization of and Recovery of Financial Assets and
Enforcement of Security Interest Act 2002 (SARFAESI).
b) During the Quarter ended March, 2017, the company has not provided for Interest on
borrowings from Bank and Financial Institutions and also reversed the interest provided on
adhoc basis on borrowings from last three quarters for the financial year 2016-17, as the
lender of the company had taken possession of assets of the company under section 13(4) of
the Securitizations and Reconstructions of Financial Assets and Enforcement of Security
Interest Act, 2002 (SARFAESI), the above has the effect of understatement of loss of the
company for the year ended March, 31st 2017 to the extent of interest borrowing not
provided for.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
of the Company had appointed M/s N.G.& Associates, Company Secretaries, New Delhi to
undertake the Secretarial Audit ofthe Company. The report of the Secretarial Auditor is
attached as Annexure E to this Report.
COST AUDITOR
In terms of the provisions of the Companies Act, 2013, and Rule 4 (2) of the Companies
(Cost Records and Audit) Rules, 2014, the applicability of cost audit required when
turnover of the company in preceding financial year exceeds Rs.100 crores or more. Since
the Sales turnover of the company in preceding financial year 2016-17 was Rs.2.71 Crores,
the appointment of cost auditors are not required for the financial year 2017-18
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis Report, highlighting the performance and prospects
of the Companys energy and environment segments including details if subsidiaries
catering to the respective business, is attached as Annexure H.
LISTING OF STOCK EXCHANGES
The Companys equity shares are listed on two stock exchanges- National Stock Exchange
of India Ltd (NSE- Scrip Code - "HANUNG"), and Bombay Stock Exchange Ltd (BSE-
Scrip Code"532770") and has paid the listing fees for financial year 2017-18.
PUBLIC DEPOSITS
The Company had no unpaid/unclaimed deposit(s) as on 31st March, 2017. During the year
under review, your Company did not accept any deposits within the meaning of provisions of
Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013, read with the
Companies (Acceptance of Deposits) Rules, 2014. It has not accepted any fixed deposits
during the year.
CODE OF CONDUCT COMPLIANCE
Pursuant to Schedule V D of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the declaration signed by the Chairman and Managing Director affirming
compliance with the code of conduct by the Directors and senior management personnel, for
the financial year 2016-2017 is annexed as Annexure B.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Karvy Computershare Private Limited is the Registrar and Share Transfer Agent of
the Company. Details of the depository system and listing shares are given in a part of
the "Additional Shareholders Information", which forms a part of the Corporate
Governance Report and is attached herein with.
TRANSFERRED TO THE INVESTOR EDUCATION AND PROTECTION FUND
Under provisions of Section 124 of the Companies Act, 2013 read with rules made there
under the amount of dividend declared for the financial year 2008-09 amounting to Rs. Rs
1,01,435/- due for refund being unclaimed and unpaid for 7 years has been transferred to
the Investor Education and Protection established by the Central Government.
WEBSITE DISCLOSURES
In compliance with the provisions of the Regulation 46 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulation 2015, the Company has been maintaining an active
website with adequate disclosures and information on the Company, its financials, its
policies and other disclosures. Any member desiring to obtain any information on the
Company can visit the website www.hanung.com or write the Company Secretary at
sunieetanthakur@hanung.com.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the provisions of the Section 135 of the Companies Act, 2013, read
with rules, the Company has constituted a CSR Committee. The details of the composition of
the Committee and meetings conducted thereby along with CSR Policy and the CSR spending by
the Company are stated in the Corporate Governance Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Internal Audit plays a key role in providing an assurance to the Board of Directors
with respect to the Company having adequate Internal Control Systems. Such system
provides, among other things, gives reasonable assurance of recording the transactions of
its operations in all material respects and of providing protection against significant
misuse or loss of Companys assets. The details about the adequacy of internal financial
controls are provided in the Management Discussion and Analysis Report.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY
The Company has in place a Prevention of Sexual Harassment policy in line with the
requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition
and Redressal) Act, 2013. An Internal Complaints Committee has been set up to redress the
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. During the year 2016 - 2017, no
complaints were received by the Company related to sexual harassment.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
As per Sec. 177(9) of the Companies Act, 2013, applicable Rules and the Listing
Agreement, the Company has established a vigil mechanism (whistle blower policy) for their
Directors and employees to report their genuine concerns. The vigil mechanism provide for
adequate safeguards against victimization of persons who avail of the vigil mechanism and
also provide for direct access to the Chairperson of the Audit Committee in accordance
with the Companies Act, 2013, applicable rules and Listing Agreement and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view
to regulate trading in securities by the Directors and designated employees of the
Company. The code requires preclearance for dealing in the Companys shares and prohibits
the purchase or sale of Company shares by the Directors and the designated employees while
in possession of unpublished price sensitive information in relation to the Company and
during the period when the trading window is closed. The Board of Directors of the Company
are responsible for implementation of the code. All Directors and the designated employees
have confirmed compliance with the code.
COMPLIANCE UNDER COMPANIES ACT, 2013
Pursuant to Section 134 ofthe Companies Act, 2013, read with the Companies (Accounts)
Rules, 2014, your Company complied with the compliance requirements under Companies Act,
2013. The specific compliance are enumerated below:
(a) Extract Of Annual Return
In Accordance with Section 92(3) of the Companies Act, 2013, read with rules 12(1) of
Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in
Form MGT-9 is attached herewith as Annexure-G.
(b) Board Meeting Held During The Year
During the year, 8 meetings of the Board of Directors were held. The details of the
meetings are furnished in the Corporate Governance Report which is attached as Annexure-A
to this Report.
c) Directors Responsibility Statement
To the best of our knowledge and belief and according to the information and
explanation obtained by us, your Directors make the following statements in the terms of
Section 134(3) (c) of the Companies Act,2013 :
1. that in the preparation of the annual financial statements for the year ended March
31st, 2017, the applicable Accounting Standards had been followed along with proper
explanation relating to material departures.
2. that for the financial year ended March 31st, 2017, such accounting policies as
mentioned in the notes to the financial statements have been applied consistently and made
judgments and estimates that are reasonable and prudent have been made so as to give a
true and fair view of the state of affairs of the Company and of the Profit and Loss of
the Company for the year ended March 31st, 2017.
3. that proper and sufficient care has been taken 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.
4. that the annual financial statements have been prepared on a going concern basis.
5. that the proper internal financial controls were followed by the Company and that
such internal financial controls are adequate and were operating effectively.
6. that the proper systems to ensure compliance with the provisions of all applicable
laws were in place and that such systems were adequate and operating effectively.
d) Reporting of Frauds
There have been no instances of fraud reported by the statutory auditors under Section
143(12) of the Companies Act, 2013, and rules framed there under, either to the Company or
to the Central Government.
e) Declaration by Independent Directors
All the Independent directors have submitted their disclosure to the Board that they
fulfill all the requirements as to qualify for their continuity of appointment as an
Independent Director under the provisions of the Companies Act, 2013 as well as Regulation
17 of the SEBI (Listing Obligations and Disclosure Requirement ) Regulations, 2015
f) Nomination and Remuneration Policy
The details of the Nomination and Remuneration Policy are stated in the Corporate
Governance Report.
g) Auditors Qualification System On Accounts
Notes to the accounts, as referred in the Auditors report, are self-explanatory and
consistently followed and therefore do not call to any further comments and explanations.
h) Particulars Of Loans, Guarantees Or Investments
The Company has not given any loans or made any investments covered under the
provisions of Section 186 of the Companies Act, 2013, read with rules.
i) Particulars of Contracts or arrangements with Related Parties
During the year under review all the related party transactions were entered into by
the Company in ordinary course ofbusiness and on arms length basis.
j) State of Companys Affairs
The State ofthe Company Affairs have been explained in the in the Directors Report.
k) Amounts to be Transferred to General Reserve
Due to heavy losses no amounts are proposed to be transferred to General Reserves.
l) Material Changes and Commitments between the date of Balance Sheet and the date of
report
There were no Material Changes and commitments affecting the financial position of the
Company which have occurred between the end of financial year of the Company to which the
financial statements relates and the date of report, except disclosed elsewhere in the
report.
m) Conservation Of Energy And Technology Absorption
The particulars prescribed under Section 134 of the Companies Act, 2013, read with rule
8 (3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy,
Technology Absorption, Foreign Exchange Earnings and Outgo are furnished as follows:-
A. INFORMATION AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8
(3) OF THE COMPANIES ACCOUNT RULES 2014
Foreign Exchange Earnings and Outgo: -
The foreign exchange earning/outgo during the year are as under:
|
|
(Rs. In Lacs) |
| Particulars |
2016-17 |
2015-16 |
| Foreign Exchange Earnings: |
26.69 |
918.15 |
| Foreign Exchange Outgo: |
9.22 |
138.59 |
FORM A
(See rule 2)
Disclosure of Particulars with respect to Conservation of Energy Power and Fuel
Consumption:
| Particulars |
Year ended on 31.03.2017 |
Year ended on 31.03.2016 |
| 1. Electricity |
|
|
| a. Purchase (Units in lacs) |
68.06 |
113.55 |
| b. Total Amount (Rs. In lacs) |
416.81 |
676.39 |
| c. Rate/Unit (Rs.) (Avg) |
6.12 |
5.96 |
| 2. Own Generatio n(Diesel) |
|
|
| a. Purchase- (Units in lacs) |
1.18 |
10.01 |
| b. Total Amount (Rs. In lacs) |
17.12 |
146.30 |
| c. Rate/Unit (Rs.) |
14.50 |
14.61 |
B. TECHNOLOGY ABSORPTION
Efforts made in Technology Absorption as per Form B below.
FORM-B
Disclosure of Particulars with respect to Technology Absorption Research and
Development (R&D):
| S. No |
Particulars |
Details |
| 1. |
Specific areas in which R&D carried out by the Company: |
Related to the main objects of the Company |
| 2. |
Benefits derived as a result of the above R&D. |
Optimum Cost Effectiveness |
| 3. |
Future plan of action |
Adoption of in house developed techniques |
| 4. |
Expenditure on R&D |
|
|
a. Capital |
The R & D activity of the Company forms part of the project cost and has not been
quantified separately. |
|
b. Recurring |
|
|
c.. Total |
|
|
D Total R&D expenditure as a percentage of total sales |
|
n) Risk Management Policy
In compliance of Regulation 21 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 related to corporate governance, Risk Management plan of
the company recognizes that the Enterprise Risk Management is an integral part of good
management practice. Hence Risk Management is an essential element in achieving business
goals. In terms of Policy, the Company is committed for managing the risk in a manner
appropriate to achieve its strategic objectives. The Company will keep investors informed
of material changes to the Companys risk profile through its periodic reporting
obligations and ad hoc investor presentations. The Company reviews and reports annually on
its compliance of Corporate Governance Principles and recommendations for betterment,
which include Risk Management and the internal control framework. Accordingly the Company
has framed procedures to inform members of Board of Directors about risk assessment and
minimization procedures.
b) Board Evaluation
Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 of SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried
out an evaluation of its own performance and all Directors (including the Independent
Directors) individually as well as the evaluation of the working of its Audit, Nomination
& Remuneration and other Committees of the Board
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 in line with circular issued by SEBI,
for evaluation of the Board, its various Committees and individual Directors, was prepared
and recommended to the Board by the Nomination & Remuneration Committee, for doing the
required evaluation, after taking into consideration the inputs received from the
Directors, covering various aspects of the Boards 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 excludingthe Director being evaluated. The performance evaluation of the Chairman
and nonindependent Directors was also carried out by the Independent Directors at their
separate meeting. The Directors expressed their satisfaction with the evaluation process.
DISCLOSURE PURSUANT TO COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2016
• Details of Employees in receipt of yearly remuneration of Rs. One Crore Two Lacs
or more:-
There were no employees who had received yearly remuneration of or in excess of Rs. One
Crore Two Lacs.
• Details of Employees in receipt of monthly remuneration of Rs. Eight Lac Fifty
Thousand or more:- There were no employees who had received monthly remuneration of or
in excess of Rs. Eight Lac Fifty Thousand.
CAUTIONARY STATEMENT
Statements made in the Report, including those stated under the caption
"Management Discussion and Analysis" describing the Companys plans, projections
and explanations may constitute "forwards looking statement" within the meaning
of applicable laws and regulations. Actual results may differ materially from those either
expressed or implied.
ACKNOWLEDGEMENTS
Your Directors would like to place on record their sincere thanks to the Companys
clients, vendors, investors, and bankers for their continued support to the Company during
the year. The Directors wish to place on record their appreciation of the contributions
made by employees at all levels.
We thank the Government of India, State Government and other Government agencies for
their support and look forward to their continued support in future.
|
By order of the Board |
|
For Hanung Toys and Textiles Limited |
| Date : August,10th, 2017 |
Ashok Kumar Bansal |
| PIace: Noida |
Chairman-cum-Managing Director |
|
DIN 00028488 |
+91-9892691696
