TO THE MEMBERS OF HINDUSTHAN UDYOG LIMITED
Your Directors have pleasure in presenting their 7511
Annual Report together with the Audited Accounts of the Company for the financial year
ended 31st March, 2022.
COMPANY PERFORMANCE:
|
2021-22 |
2020-21 |
| FINANCIAL RESULTS |
RS. IN LAKHS |
RS. IN LAKHS |
| Revenue from Operations |
769.74 |
980.42 |
| Other Income |
800.07 |
674.60 |
| Total Revenue |
1,569.81 |
1,655.02 |
| EBITDA |
177.11 |
84.71 |
| Less: Finance Costs |
48.36 |
47.22 |
| Depredation |
87.52 |
93.76 |
| Profit before Tax (PBT) |
4123 |
(56.27) |
| Less: Tax Expense |
0.68 |
9.04 |
| Profit after Tax (PAT) |
40.55 |
(65.31) |
The Companys Revenue from Operations declined during the year under
review by 20% on account of the continued impact of the outbreak of the Covid-19 Pandemic
and the consequential restrictions imposed by the Government Authorities during the 1st
half of the year. However, the Other Income of the Company increased from Rs. 674.60 Lakhs
to Rs. 800.07 Lakhs during the year under review which lead to an increase in the
Companys PBT by Rs. 97.50 Lakhs.
COVID-19 PANDEMIC
The Board of Directors of your Company has considered the possible
effects that may have resulted from the Covid-19 Pandemic outbreak during the year ended
31st March, 2022. They do not anticipate any challenge in recovering the
carrying value of the Companys assets based on its assessment of business/economic
conditions.
SCHEME OF AMALGAMTION
The Scheme of Amalgamation involving (a) Neptune Exports Limited (b)
Northern Projects Limited (c) Tea Time Limited and (d) Orient International Limited
(together referred to as Transferor Companies) with the Company was sanctioned by
Honble National Company Law Tribunal (NCLT), Kolkata Bench vide its Order dated 9th
March, 2022 and the said Scheme became effective on 17th March, 2022 on filing
of NCLT Order with the Ministry of Corporate Affairs.
Pursuant to the aforesaid Scheme, the Company has allotted 7,50,121
Equity Shares of the Company to the eligible Shareholders of the Transferor Companies at
the specified share exchange ratios and the same have been listed with both BSE Limited
and The Calcutta Stock Exchange Limited.
DIVIDEND
The Directors have considered to plough back the profits in business
for better financial strength and as such they have not recommended any dividend for the
year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review is
appended below:-
A. BUSINESS
The Company is engaged in the manufacturing of Alloy and Stainless
Steel Castings with stringent quality requirements required in Turbines, Metal Shredding,
Earth Moving and Mining Equipment, Power Plants, Pumps, Valves, Compressors and other
Heavy Engineering Industries. The Companys manufacturing unit is located in Nagpur.
B. REVIEW OF OPERATIONS & FUTURE PROSPECTS
The key operational highlights of the Company have been:-
• Development of Pump Casings in Super Duplex Stainless Steel
grade.
• Impellers, Bowl and bell in CD4MCuN Grade developed.
• Development of 9.5 M/T single piece Discharge Bowl in Grey Cast
Iron.
• Increase in Line molding capacities by modification of existing
line.
• Successful development of Creep Steel Castings.
• Development of Duplex Stainless Steel Grade 5A Castings.
• Concentration on making of only High Alloy Steel Castings
(H.A.S.) with good margins.
C. OPPORTUNITIES AND THREATS, RISKS AND CONCERNS
Opportunities for these Industries exist (a) in the development and
supply of high contribution items and (b) catering to the requirements of export markets.
The risks and areas of concern for your Company are:-
(i) Demand for Companys products in few critical segments only.
(ii) Uncertainty in the business environment
(iii) Heavy Dependence on Few Customers in the Export Market.
(iv) Currency Fluctuations in adverse direction.
(v) Fluctuations in raw material prices that can affect orders with no
price variation clause.
(vi) Pressure on Pricing.
D. INTERNAL CONTROL SYSTEM
The Company has internal control procedures commensurate with the
nature of its business and size of its operations. The objective of these procedures are
to ensure efficient use and
protection of the Companys resources, accuracy in financial reports
and due compliance of statutes and Company policies and procedures. The Internal Audit
function is conducted by a Senior Management Team of the Company.
The adequacy of internal control systems are reviewed by the Audit
Committee of the Board in its periodical meetings.
E. HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Industrial Relations were cordial during the year under review.
There was no industrial relation related problem during the year.
F. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
The explanation for significant changes, if any, in the Key Financial
Ratios in terms of the Listing Regulations and the Companies Act, 2013 are given in the
Notes to the Financial Statements.
CORPORATE GOVERNANCE
The principles of good Corporate Governance through professionalism,
accountability, transparency, trusteeship and control have always been followed by your
Company and it has complied with all the applicable provisions of Corporate Governance as
per the Listing Regulations. A separate Report on Corporate Governance forms part of the
Annual Report 2021-22 along with the Auditors Certificate on its compliance in Annexure
B.
DIRECTORS
Mr. Prakash Agarwal, Director retires by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment. His Brief Resume is
attached to the Notice of the AGM.
NO. OF BOARD MEETINGS HELD
During the year 2021-22, Eight Board Meetings were held on 2nd
April, 6th May, 2021, 30th June, 2021, 13th August, 2021,
12th November, 2021,14th February, 2022,17th March, 2022
and 31st March, 2022.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of The Companies Act,
2013, the Directors state as follows that:-
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2022, the applicable accounting standards had been followed
along with proper explanation relating to material departures;
(ii) the Directors had selected such accounting policies and applied
them consistently and made judgements and estimates that were reasonable and prudent so as
to give a true and fair view of the state of affairs of your Company at the end of the
financial year and of the profit or loss of your Company for that period;
(iii) the Directors had taken proper and sufficient care 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;
(iv) the Directors had prepared the accounts for the financial year
ended 31st March, 2022 on a "going concern" basis;
(v) 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
(vi) the Directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such were adequate and operating
effectively.
POLICY FOR DIRECTORS APPOINTMENT
The Company believes that in order to ensure that the Board of
Directors can discharge their duties and responsibilities effectively; it aims to have a
Board with optimum combination of experience and commitment with the presence of
Independent Directors. Such Board can provide a long term plan for the Companys growth,
improve the quality of governance and increase the confidence of its shareholders.
The Company has a policy in terms of Section 178(3) of The Companies
Act, 2013 on directors appointment and remuneration including the criteria for
determining their qualifications, positive attributes and independence.
BOARD EVALUATION
The Board evaluated the effectiveness of its functioning and that of
the Committees and of Individual Directors by seeking inputs on various aspects of
Board/Committee Governance and considered and discussed in details the inputs received
from the Directors.
The aspects covered in the evaluation included the contribution to and
monitoring of corporate governance practices, participation in strategic planning and
fulfillment of their obligations including but not limited to their participation in the
Board/Committee Meetings.
INDEPENDENT DIRECTORS DECLARATION
The Independent Directors meet the criteria of being Independent (as
prescribed in The Companies Act, 2013 and the Listing Regulations) and an Independency
Certificate from them have been obtained.
ANNUAL RETURN
As provided under Section 92(3) read with Section 134(3)(a) of The
Companies Act, 2013, the Annual Return as on 31st March, 2022 in Form MGT-7 is
available on the Website of the Company.
STATUTORY AUDITORS
M/s Salarpuria & Partners, Chartered Accountants (Firm Registration
No. 302113E) were appointed as the Statutory Auditors of the Company for a term of 5 years
commencing from the Financial Year 2017-18 and their term shall end at the ensuing AGM.
The Board of Directors of your Company on the recommendation of the
Audit Committee and subject to the approval of Members to be obtained at the ensuing AGM
has reappointed M/s Salarpuria & Partners, Chartered Accountants as the Statutory
Auditors for a second term of 5 years i.e. to hold office from the conclusion of ensuing
AGM till the conclusion of AGM to be held in the year 2027.
The Company has received confirmation from them to the effect that
their reappointment, if made, will be in accordance with the limits and criteria as
specified under the Companies Act, 2013 and the Rules made thereunder.
Necessary resolution for their reappointment forms part of the Notice
of AGM.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Rules made there under, the Board of Directors of the Company has appointed a
Practicing Company Secretary to conduct the Secretarial Audit of the Company for the
financial year 2021-22. The Secretarial Audit Report for the financial year ended
31.03.2022 is annexed herewith as Annexure C, as part of this Report.
COST AUDIT
The Company is not required to maintain cost records in terms of
Section 148(1) of The Companies Act, 2013.
RELATED PARTY TRANSACTIONS
All contracts/arrangements/transactions entered by the Company with its
Related Parties during the financial year were on arms length basis and in the ordinary
course of business. Hence, the provisions of Section 188 of The Companies Act, 2013 and
disclosure in Form AOC-2 are not applicable. The transactions with Related Parties are
disclosed in the Notes to the Financial Statements.
PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES
Details of Loans, Investments and Guarantees, if any, given/made by the
Company are disclosed in the Notes to the Financial Statements.
VIGIL MECHANISM
Pursuant to the provisions of section 177(9) & (10) of the
Companies Act, 2013, a Vigil Mechanism of Directors and Employees has been established,
details of which are given in the Corporate Governance Report.
RISK MANAGEMENT
Risk Management is the process of identification, assessment and
prioritization of risks to minimize/mitigate/monitor the probability and/or impact of
unfortunate events. Risk Management Policy enables the Company to manage such
uncertainties and changes in the internal and external environment to reduce their
negative impact. The Board of Directors of the Company, as and when needed, develops such
policies for assessing and managing the risks in accordance with the requirements of the
Companies Act, 2013.
PARTICULARS OF EMPLOYEES
Information required to be given pursuant to the provisions of section
197(12) of The Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure D. There were no
employees who were in receipt of remuneration in excess of the limits provided in Rule
5(2)(i to iii) of said Rules.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS & OUTGO
Particulars relating to Conservation of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo, as required under section 134(3)(m) of The Companies
Act, 2013 read with Companies (Accounts) Rules, 2014 are given in the Annexure A.
CODE OF CONDUCT
Your Company has formulated a Code of Conduct which applies to Board
Members and Senior Management Personnel of the Company. Confirmations towards adherence to
the Code during the Financial Year 2021-22 have been obtained from all the Board Members
and Senior Management Personnel in terms of the Listing Regulations and a declaration
relating to compliance of this code during the year by all Board Members and Senior
Management Personnel has been given by the Managing Director of the Company which
accompanies this report.
MATERIAL CHANGES AND COMMITMENT
There were no material changes and commitments affecting the financial
position of the Company which has occurred between the financial year to which these
Financial Statements relate and date of this report.
ACKNOWLEDGEMENTS
Your Directors would like to thank shareholders, customers, suppliers,
bankers, employees and all other business associates for the support given by them to the
Company and their confidence in its management.
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