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Your Directors are pleased to present the 35th Annual Report of the Company for the Financial Year ended 31st March, 2019.
1. FINANCIAL SUMMARY OR HIGHLIGHTS
The Companys Financial Performance for the Financial Year ended March 31,2019 is summarized below:
|Net Revenue from Operations||111761.26||81998.22||136042.24||101416.03|
|Other Operating Revenue||-||153.34||-||153.34|
|Operating Profit before Finance Costs, Depreciation, Tax||5571.15||4753.82||7615.05||6145.39|
|Less: Depreciation and amortization expenses||413.58||327.49||530.97||400.07|
|Profit before Tax and Exceptional Expenses||2854.00||2139.48||4098.69||3002.48|
|Less: Tax Expenses||1035.66||683.48||1363.72||901.67|
|Net Profit for the Year from Continuing operations||1818.41||1456.00||2734.97||2100.81|
|Net Profit for the Year from Discontinued Operations||-||0||0||0|
|Profit for the year||1818.41||1456.00||2734.97||2100.81|
|Other Comprehensive Income||16.99||-||18.02||-|
|Total comprehensive income for the year, net of tax||1835.41||1456.00||2752.99||2100.81|
|Earning per equity share (Face Value of 10 each)|
2. During the Financial Year 2018-19, revenue from operations on standalone basis increased to Rs. 111761.26 lacs as against 81998.22 lacs in the previous year- a growth of 36%.
The profit after tax for the current year is Rs. 1835.41 lacs against Rs.1456.00 lacs in the previous year a growth of 26%.
On a consolidated basis, the group achieved revenue of Rs. 136042.24 lacs as against Rs. 101416.03 lacs - a growth of 34 %. Net profit for the current year is Rs. 2752.99 lacs against Rs. 2100.81 lacs in the previous year - a growth of 31%.
3. BRIEF DESCRIPTION OF THE COMPANYS WORKING DURING THE YEAR/ STATE OF COMPANYS AFFAIRS
Your Company is a Multi Product company marking its presence in steel pipes, hollow sections, tubes, cold rolled coils & strips, road crash barriers, solar mounting structures and a variety of other galvanised products since more than 3 decades. The end uses of these products are in high-rise buildings, metro stations, bridges, dams, refineries, telecom, airports, highways, power projects etc.
During the year under review, your Companys State of Affairs can be stated in a nutshell as follows:
Started Commercial production of galvanizing facility of ERW Steel Pipes at Hindupur, Andhra Pradesh.
Awarded with Secondary Steel Sector Trophy and Silver Certificate from the Ministry of Steel government of India in the standalone category of Sheets/Coils product under cold rolling process route.
Installation of Solar Rooftop project at Hindupur facility, Andhra Pradesh. This project will be generating 400KW of energy. It has a capacity of 6,00,000 units/ year and will help in reduction of carbon footprint by 483 tonnes/year.
Achieved monthly sales of 27,000 MT in August, 2018 which is highest ever monthly sales volume in Companys history
Achieved ever highest profit in last Quarter of Rs. 8.3 Cr. with a growth of 64%
Further information on the Business overview of the Company is discussed in detail in the Management Discussion & Analysis.
Your Directors are pleased to recommend a final dividend of Rs. 0.25/- per Equity Share for the year 2018-19. The proposed dividend, subject to approval of Shareholders in the ensuing Annual General Meeting of the Company, would result in appropriation of Rs. 36.92 Lacs (including Corporate Dividend Tax of Rs5.45 Lacs). The dividend would be payable to all those Shareholders whose names appear in the Register of Members as on the Book Closure Date.
The Register of Members and Share Transfer books shall remain closed as per the schedule given in notice of Annual General Meeting.
5. CONSOLIDATED FINANCIAL STATEMENTS OF SUBSIDIARY & ASSOCIATE COMPANY
In accordance with the provisions of Companies Act, 2013 (hereinafter referred to as "the Act"), Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the financial year 2018-19, together with the Auditors Report form part of this Annual Report.
In compliance with Section 129 (3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014. A statement containing the salient features of financial statements of subsidiaries/ joint venture companies of the Company in the prescribed Form AOC - 1 (ANNEXURE-1).
The said Form also highlights the financial performance of each of the subsidiaries included in the CFS of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.
In accordance with Section 136 of the Act, the financial statements of the subsidiary companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the CFS, and all other documents required to be attached to this report have also been uploaded on the website of the Company at www. hitechpipes.in
The Company has no material subsidiary company.
During the Year under review your company has made an Investment of Rs. 47,10,000/- (Forty Seven Lac and Ten Thousand Only) in the shares of HTL Ipsat Private Limited and gained 100% control over the shares of HTL Ispat Private Limited, Consolidated Balance Sheet of the company includes Balance Sheet of HTL Ispat Pvt Ltd.
6. AWARDS AND ACCOLADES
Your Directors are happy to report that during the year, your company received the following awards and accolades from distinguished bodies for achievements in various fields:
^ SECONDARY STEEL SECTOR SILVER TROPHY for excellence in performance by Sh. Chaudhary Birender Singh, Honble Ministry of Steel, Government of India.
7. MATERIAL CHANGES AND COMMITMENT
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year 2018-19 and the date of this report. There has been no change in the nature of business of the Company.
8. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR
No appointments or resignations took place during the year under review in the list of Directors or Key Managerial Personnel of your company.
9. BOARD OF DIRECTORS
DECLARATION OFINDEPENDENCE FROMINDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedules and Rules issued thereunder, as well as clause (b) of sub-regulation (1) of Regulation 16 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force). In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
5 (Five) meetings of the Board of Directors were held during the financial year 2018 - 19. The details of the meetings of the Board of Directors of the Company convened during the financial year 2018-19 are given in the Corporate Governance Report which forms part of this Annual Report.
In accordance with the provisions of Section 152 and other applicable provisions , if any, of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mr. Anish Bansal (Whole Time Director), is liable to retire by rotation at the ensuing AGM and being eligible offered themselves for re-appointment.
In accordance with the provisions of the Companies Act, 2013 read with the Rules issued thereunder, the Listing Regulations and the Articles of Association of the Company, the Independent Directors and the Managing Director of the Company are not liable to retire by rotation.
10. COMMITTEES OF THE BOARD
A detailed note on the Board and its Committees is provided in the "Report on Corporate Governance" forming part of this Annual Report. As on March 31,2019, the Board has the following standing Committees:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Corporate Social Responsibility Committee
iv. Stakeholders Relationship Committee
i. Executive Committee
ii. Securities Allotment Committee
For details of the terms of reference, meetings held during the year, membership and attendance of the members at the meetings of the above Committees of the Board, kindly refer to the "Report on Corporate Governance" forming part of this Annual Report.
11. MEETING OF INDEPENDENT DIRECTORS
Pursuant to the requirements of Schedule IV to the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Meeting of the Independent Directors of the Company was also held on 14th February, 2019, without the presence of non-independent directors and members of the management, to review the performance of nonindependent directors and the Board as a whole, the performance of the Chairperson of the company and also to assess the quality, quantity and timeliness of flow of information between the company management and the Board.
12. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility Statement:-
(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; and
(e) 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.
13. EXTRACT OF THE ANNUAL RETURN
The Extract of Annual Return in Form MGT-9 as required under Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 forms part of the Directors Report and is annexed herewith as "ANNEXURE-2".
14. AUDITORS AND THEIR REPORTS STATUTORY AUDITOR:
Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s. A.N. Garg & Co, Chartered Accountants (ICAI
Firm Registration No. 004616N) New Delhi were appointed as Statutory Auditors at 33rd Annual General Meeting (AGM) of the Company held on 25th September, 2017 for a term of 5 consecutive years.
M/s. A.N. Garg & Co, Chartered Accountants have confirmed that they are not disqualified from continuing as Auditors of the Company.
The Reports given by the Statutory Auditors on the financial statements of the Company, the consolidated financial statements of the Company and its subsidiary for the financial year ended March 31, 2019, form part of this Annual Report. There has been no qualification, reservation or adverse remarks made by Statutory Auditors in their Reports. The Statutory Auditors have not reported any frauds to the Audit Committee under Section 143(12) of the Act.
SECRETARIAL AUDITORS AND THEIR REPORT
The Board of Directors of the Company has appointed NSP & Associates, Practicing Company Secretary (Certificate of Practice No. 10937), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2019 - 20.
The Company has received consent from NSP & Associates to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2019.
The Secretarial Audit Report for the financial year ended 31st March, 2019 under Companies Act, 2013, read with Rules made thereunder and Regulation 24A of the Listing Regulations (including any statutory modification(s) or reenactments) thereof for the time being in force) is set out in the ANNEXURE-3 to this report.
The Secretarial Compliance Report for the financial year ended 31st March, 2019, in relation to compliance of all applicable SEBI Regulations/circulars/ guidelines issued thereunder, pursuant to requirement of Regulation 24A of Listing Regulations is set out in ANNEXURE-4 to this report. The Secretarial Compliance Report has been voluntarily disclosed as part of Annual Report as good disclosure practice.
The Secretarial Audit Report and/or Secretarial Compliance Report does not contain any qualification, reservation or adverse remark.
The Company is required to maintain cost records for certain products as specified by the Central Government under sub-section (1) of Section 148 of the Act, and accordingly such accounts and records are made and maintained in the prescribed manner.
The Board of Directors of the Company, on the recommendations made by the Audit Committee, has appointed M/s. S. Shekhar & Co., Cost Accountants, (Firm Registration No. 000452) as the Cost Auditor of the Company to conduct the audit of cost records of certain products for the financial year 2019 - 20 at a remuneration of Rs. 50,000/-. As required under the Companies Act, 2013, the remuneration payable to the cost auditors is required to be placed before the members, for ratification. The Board recommends the ratification of remuneration of cost auditors of the company.
In terms of Section 148 of the Companies Act, 2013, the company had appointed M/s S.Shekhar & Co. Cost Accountants as the Cost Auditors of the Company to audit the Cost records for the FY 2018-19, M/s S. Shekhar & Co. Cost Auditors shall submit their report to the company in due course of time.
15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
Details of Loans, guarantees and investments covered under Section 186 of the Act read with the Companies (Meetings of Board and its powers) Rules, 2014, as on 31st March, 2019 are given in Note No. 6 to the Financial statements forming part of this Annual report.
16. RELATED PARTY TRANSACTIONS
During the financial year 2018-19, the Company entered into transactions with related parties as defined under Section 2 (76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arms length basis and in accordance with the provisions of the Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations.
Further, there were no transactions with related parties which qualify as material transactions in accordance with policy of the company on materiality of related party trasanctions. In view of the above, disclosure in Form AOC- 2 is not applicable. All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations.
The details of the related party transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in Note 36 to the Standalone Financial Statements of the Company.
The policy on Related Party Transactions is available on the website of the Company at http://hitechpipes.in/pdf/ Codes%20and%20policies%20P1/Policy_on_Dealing_ with_Related_Party_Transactions.pdf
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, there are no unclaimed or unpaid deposits lying with the company for the year under review.
18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on Companys operational performance, industry trends and other required details prepared in compliance of Regulation 34 of the Listing Regulations forms part of this Annual Report.
19. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee comprises of:
|Name of the Members||Status||Nature of Directorship|
|Mr. Anish Bansal||Chairman||Whole Time Director|
|Ms. Tanvi Kumar||Member||Non-Executive Independent Director|
|Mr. Ajay Sahay||Member||Non-Executive Independent Director|
|Mr. Ajay Kumar Bansal||Member||Managing Director|
Mr. Anish Bansal is the Chairman of the Committee.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in ANNEXURE-5 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company.
The CSR Policy has been uploaded on the companys website and same may be accessed at the link given hereunder:
20. DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT, 2013
Details pursuant to section 197(12) of the Companies Act, 2013 read with Rule 5 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and are annexed herewith as ANNEXURE-6.
21. CORPORATE GOVERNANCE
The Directors adhere to the requirements set out by Securities and Exchange Board of Indias Corporate Governance practices and have implemented all the stipulations prescribed, secretarial compliances, reporting, intimations etc. under the Companies Act, 2013, Listing Agreements and other applicable laws, rules and regulations are noted in the Board/Committee meeting from time to time. The Company has implemented several best Corporate Governance Practices as prevalent globally.
The Corporate Governance Report as stipulated under Regulation 34(3) and other applicable Regulations read with Part C of Schedule V of SEBI (LODR), 2015 forms part of this report.
22. RISK MANAGEMENT
The Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. The objective of Risk Management at Hi Tech Pipes Limited is to create and protect shareholder value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risks is an integral part of every employees job.
The Company has adopted Risk Management Policy which is aimed at creating and protecting Shareholders value by minimizing threats and losses and identifying and maximizing opportunities. Your Directors periodically review the risk associated with business or threatens the prospects of the Company.
23. FORMAL ANNUAL EVALUATION
Pursuant to applicable provisions of the Act and the Listing Regulations, the Board has carried out the performance evaluation of all the Directors (including Independent Directors) on the basis of recommendation of Nomination and Remuneration Committee and the criteria formulated for the performance evaluation. The evaluation of the Board and of the various committees was made on the basis of the following assessment criteria:
(i) Adequacy of the constitution and composition of the Board and its Committees
(ii) Understanding of the Companys principles, values, philosophy and mission statement
(iii) Matters addressed in the Board and Committee meetings
(iv) Effectiveness of the Board and its Committees in providing guidance to the management of the Company
(v) Processes followed at the meetings
(vi) Boards focus, regulatory compliances and Corporate Governance
The performance of the Committees was also evaluated by the members of the respective Committees on the basis of the Committee effectively performing the responsibility as outlined in its Charter/Terms of reference. Similarly, the evaluation of the Independent Directors and other individual Directors performance was made by the entire Board, on the basis of the following assessment criteria:
(i) Attendance and active participation in the Meetings
(ii) Contribution in Board and Committee Meetings
(iii) Execution and performance of specific duties, obligations, regulatory compliances and governance
The Board members had submitted their response for evaluating the entire Board and respective Committees of which they are members.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the period under Review, no material order has been passed by any Regulator or Court excepting to the extent as may be mentioned in Notes to Accounts attached to the Financial Statements forming part of this Annual Report.
25. WHISTLE BLOWER POLICY / VIGIL MECHANISM
In compliance with the requirements of the provisions of Section 177 of the Act read with Regulation 22 of the Listing Regulations, the Board has established a vigil mechanism for Directors, employees and other stakeholders to disclose instances of wrongdoing in the workplace and report instances of unethical behavior, actual or suspected fraud or violation of the Companys Policies. The policy is available on the website of the Company at http://www. hitechpipes.in/images/investorspdf/Vigil Mechanism Policy.PDF.
26. POLICY ON PROTECTION OF WOMEN FROM SEXUAL HARASSMENT
The Company has always endeavored for providing a better and safe environment free of sexual harassment at all its work places. The Company has in place a robust policy on Protection of Women from Sexual Harassment in line with the requirements of the Sexual Harassment of Woman at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The Policy applies to, in relation to a workplace, a woman, of any age whether employed or not, all categories of employees of the company, including permanent, management, workmen, trainees, probationers and contract employees of all cadres at its workplace or outside on official duty.
An Internal Complaints Committee (ICC) has been set up to redress complaints received on sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Committee members are as mentioned below:
|Ms. Tanvi Kumar||Independent Director (CHAIRMAN)|
|Ms. Rekha Singh||Head-Human Resource Department|
During the year, no complaints on sexual harassment were received by the Committee.
27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Hi-Tech has adequate system of internal controls commensurating with the size of its operation and business, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition, and to ensure that all the business transactions are authorized, recorded and reported correctly and adequately.
Your Company has adopted procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.
During the year, M/s. Goyal & Goyal, Chartered Accountants were re-appointed as the Internal Auditors by the Board of Directors of the Company for the FY 2019-20. The audit scope and plans of internal audit are approved by the Board every year.
28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining 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 Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in ANNEXURE-7 and forms part of this Report.
The Board places on record its appreciation for the continued co-operation and support extended to the Company by its customers which enables the Company to make every effort in understanding their unique needs and deliver maximum customer Satisfaction. We place on record our appreciation of the contribution made by the employees at all levels, whose hard work, co-operation and support helped us face all challenges and deliver results. We acknowledge the support of our vendors, the regulators, the esteemed league of bankers, financial institutions, rating agencies, government agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates and other stakeholders.
For and on behalf of
Board of Directors of Hi-Tech Pipes Limited
Ajay Kumar Bansal
Chairman and Managing Director
25th May, 2019