To,
The Members
Your Directors take pleasure in presenting the 42nd Annual Report together with the
Audited Financial Statements for the Financial Year ended March 31, 2017.
FINANCIAL RESULTS
The financial performance of the Company for the year ended March 31, 2017 is
summarised below:
(Rs in million)
| Particulars |
For the year ended March 31, 2017 |
For the year ended March 31, 2016 |
| Net Sales |
870.56 |
2,053.82 |
| Other Income |
85.16 |
40.45 |
| Total Income |
955.72 |
2,094.27 |
| Profit/(Loss) from Ordinary Activities |
(2,260.07) |
(1,921.98) |
| Exceptional Item |
2,463.17 |
- |
| Profit/(Loss) after Exceptional Items |
(4,723.24) |
(1,921.98) |
| Provision for taxation |
0.74 |
13.63 |
| Profit/ (Loss) after taxation |
(4,723.98) |
(1,935.61) |
| Total Comprehensive Income for the period (comprising profit/(loss) for the period
(after tax) and other Comprehensive income (after tax) |
(4725.09) |
(1,932.84) |
| Balance brought forward from previous year |
(10,490.27) |
(8,554.65) |
| Depreciation adjustment |
- |
- |
| Balance available for appropriation |
(15,214.25) |
(10,490.27) |
| Retained Profits carried forward to Balance Sheet |
(15,214.25) |
(10,490.27) |
APPOINTMENT OF RESOLUTION PROFESSIONAL
National Company Law Tribunal (NCLT) has initiated Corporate Insolvency Resolution
Process (CIRP) in respect of Hindustan Dorr Oliver Limited ("the Company") under
the provisions of the Insolvency and Bankruptcy Code, 2016 ("the Code") with
effect from April 21, 2017.
In this connection, Mr. CA Amit Gupta has been appointed as an Interim Resolution
Professional (IRP) to carry out the activities relating to CIRP as per the rules,
regulations and guidelines prescribed by the Code. The Insolvency Resolution Process
period shall continue for 180 days starting from the Insolvency Commencement date. During
this period, the NCLT has prescribed moratorium period for prohibiting all of the
following namely:
(i) the institution of suits or continuation of pending suits or proceedings against
the corporate debtor including execution of any judgement, decree or order in any court of
law, tribunal, arbitration panel or other authority.
(ii) transferring, encumbering, alienating, or disposing of by the corporate debtor any
of its assets or any legal right or beneficial interest therein.
(iii) any action to foreclose recover or enforce any security interest created by the
corporate debtor in respect of its property including any action under the securitization
and reconstruction of financial assets and enforcement of security interest act, 2002.
(iv) the recovery of any property by an owner or lessor where such property is occupied
by or in the possession of the corporate debtor.
As per Section 17 of the Insolvency and Bankruptcy Code from the date of appointment of
the interim Resolution Professional -
(a) the management of the affairs of the company shall vest in the interim resolution
professional.
(b) the power of the board of directors company shall stand suspended and be exercised
by the interim resolution professional.
(c) the officers and managers of the company shall report to the interim resolution
professional and provide access to such documents and records of the company as may be
required by the interim resolution professional.
(d) the financial institutions maintaining accounts of the company shall act on the
instructions of the interim resolution professional in relating to such accounts furnish
all information relating to the company available with them to the Interim Resolution
Professional.
DIVIDEND
In view of the loss incurred by the Company, your Directors regret and express their
inability to recommend dividend for the period ended March 31, 2017.
PERFORMANCE
Your Company achieved a gross turnover of Rs 870.56 million for the period ended March
31, 2017as against Rs 2053.82 million for the previous year ended March 31, 2016. On an
annualised basis, turnover for the current period ended March 31, 2017 decreased by
57.61percent as compared to the previous period.
FUTURE OUTLOOK
The Government of India has started taking several remedial measures for the
infrastructure and engineering sector. Your Directors are hopeful that they will be able
to get new investments into the company and revive the business.
SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2017 was Rs 144.01 million. During the
year under review the company has not issued any shares or any convertible instruments.
SUBSIDIARIES
The Consolidated Financial Statements prepared by the Company include the financial
information of subsidiary companies, namely HDO Technologies Limited and DavyMarkham
(India) Private Limited.
Pursuant to Section 136(1) of the Companies Act, 2013, the Balance Sheet, Statement of
Profit and Loss and other documents of the said subsidiary companies are required to be
annexed to the accounts of the holding Company. The Companies Act, 2013 had granted
general exemption for listed companies from complying with the provisions of section 136
of the Companies Act, 2013 subject to certain conditions being fulfilled by the Company.
Accordingly, the Balance Sheet, Profit and loss account and other documents of the
subsidiary companies are not being attached with the Balance Sheet of the Company. A
statement containing the brief details of financials of subsidiary companies for the year
ended March 31, 2017 is enclosed in the Annual Report. The annual accounts of the said
subsidiary companies and relevant information shall be made available to the shareholders
who seek such information and are also available for inspection by any shareholder at the
Registered Office of the Company, on any working day during business hours. Copy of the
said details will be provided upon receipt of written request from the shareholders.
CONSOLIDATED FINANCIAL STATEMENTS
In terms of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI
(Listing Obligations and Disclosures Requirements) Regulations 2015, Consolidated
Financial Statements of the Company prepared in accordance with Accounting Standards
issued by Institute of Chartered Accountants of India, are attached and forms part of the
Annual Report.
PUBLIC DEPOSITS
The Company did not accept any deposits from public during the year. There are no
unclaimed deposits as on March 31, 2017.
CORPORATE GOVERNANCE
Your Company is committed to adhere to the standards of Corporate Governance as set out
by the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 (SEBI LODR
Regulations). Detailed Report on Corporate Governance as stipulated under Schedule V of
SEBI LODR Regulations is provided under separate section and forms part of this Report.
The requisite certificate from Practicing Company Secretaries, confirming the
compliance of the conditions stipulated under SEBI LODR Regulations is attached to the
Report on Corporate Governance.
TRANSFER OF UNCLAIMED / UNPAID AMOUNTS TO THE INVESTOR EDUCATION AND PROTECTION FUND
(IEPF)
In terms of Section 125 of the Companies Act, 2013, any unclaimed or unpaid Dividend
relating to the financial year 2009-2010 is due for remittance to the Investor Education
and Protection Fund established by the Central Government in the month of October, 2017.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As stipulated under SEBI (Listing Obligations and Disclosures Requirements) Regulations
2015 the Report on Management Discussion and Analysis is annexed to this report and forms
part of the Annual Report.
BOARD OF DIRECTORS
Pursuant to provisions of Section 152 of the Companies Act, 2013, Mr. E Sudhir Reddy
(DIN: 00023518), Director retires by rotation at the ensuing Annual General Meeting and
being eligible offers himself for re-appointment.
All the Independent Directors of the company have given declarations to the Company
that they meet the criteria of independence as specified under Section 149(6) of the Act
and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosures Requirements)
Regulations 2015.
During the year under review, the Non-Executive Directors of the Company had no
pecuniary relationship or transaction with the Company other than sitting fee for
attending the Board and Committee meetings.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of your Company are Mr. S C Sekaran, Executive Director,
Mr. S C Mundhekar, Chief Financial Officer, Mr. G Ramakrishna, Company Secretary, Mr. P.
K. Mishra Chief Operating Officer and Mr. M. G. Sahani Vice President Projects.
MEETINGS
During the financial year under review, four Board Meetings were held. The Details of
which are given in Corporate Governance Report.The provisions of Companies Act, 2013 and
SEBI LODR Regulations, 2015 were adhered to while considering the time gap between two
meetings
BOARD COMMITTEES
The Board has constituted various committees viz Audit Committee, Nomination and
Remuneration Committee, Stakeholders Relationship Committee and Executive Committee etc.,
to enable better management of the affairs of the Company, with terms of reference in line
with provisions of Companies Act, 2013 and SEBI LODR Regulations. The details of
composition of the committees are disclosed in Corporate Governance Report, which forms
part of this report.
BOARD EVALUATION
Pursuant to provisions of Companies Act, 2013 and SEBI (Listing Obligations and
Disclosures Requirements) Regulations 2015, the Nomination and Remuneration Committee laid
down the criteria for performance evaluation of the Individual Directors, the Board and
its Committees. Accordingly, the Board of Directors has carried out an annual evaluation
of its own performance, its committees and individual directors.
The performance of the Board was evaluated through a structured questionnaire which
provides a powerful and valuable feedback for improving the board effectiveness,
maximizing strengths and highlighting areas for further development.
The performance of the Committees was evaluated by the Board through a structured
questionnaire, by considering the effective recommendations made by the Committees, from
time to time, to the Board of the Directors of the Company and effectiveness of Committee
meetings etc.
The Board evaluated the performance of the individual directors by considering the
contribution of the individual directors to the Board and Committee meetings, preparedness
on the issues to be discussed, meaningful and constructive contribution and inputs in
meetings, relationship with fellow board members, willing to devote time and effort to
understand the Company and its business etc through a structured questionnaire.
VIGIL MECHANISM
Your Company has established a Vigil Mechanism policy for your Directors and employees
to safeguard against victimization of persons who use vigil mechanism and report genuine
concerns. The Audit Committee shall oversee the vigil mechanism.
STATUTORY AUDITORS
M/s Shah & Modi, Chartered Accountants, Mumbai (Firm Registration No.112426W), were
appointed as Statutory Auditors of the Company in place of M/s Chaturvedi & Partners,
Chartered Accountants, to hold office until the conclusion of the ensuing Annual General
Meeting for the financial year 2017-2018, pursuant to the approval of the members at its
42ndAnnual General Meeting of the Company.
INTERNAL AUDITORS
During the year under review, M/s Dipan Patel & Associates, Chartered Accountants
were re-appointed as Internal Auditors of the Company and they monitor the internal
control system of the Company at its works and at the Mumbai office. The internal auditor
of the company checks and verifies the internal control and monitors them in accordance
with policy adopted by the company. Even through this non-production period the Company
continues to ensure proper and adequate systems and procedures commensurate with its size
and nature of its business.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had
appointed Mr. K Narasimhulu, Company Secretary in Practice to undertake the Secretarial
Audit of your Company. The Secretarial Audit Report for the financial year 2016-2017 forms
part of the Annual Report as Annexure "A" to the Boards Report.
The Secretarial Audit Report does not contain any adverse remarks or qualifications.
EXPLANATION TO STATUTORY AUDITORS QUALIFICATIONS IN INDEPENDENT AUDITORS REPORT FOR
2016-2017:
With reference to observations made in Auditors report, the notes of account is self
explanatory and therefore do not call for any further comments. The results for the year
ended March 31, 2017 have been subjected to an audit by the Statutory Auditors of the
company and a qualified report has been issued by them thereon.
1. With respect to Companys ability to continue as going concern.
The group is confident of implementing the business plan and meeting its obligations in
due course of time. Accordingly financial statements have been prepared as a Going
Concern.
2. In respect of various claims submitted by the financial creditors, operational
creditors, workmen etc. to the Resolution Professional pursuant to the Insolvency and
Bankruptcy Board of India.
The management of the company is confident of positive outcome.
3. In respect of invocation of corporate guarantees and initiation of recovery actions
against the company.
The management is in engagement with the lenders to resolve the matter and the
respective liability is appearing in the books of subsidiary Company.
4. In respect of Investment in the Indian subsidiary that incurring losses and its net
worth is eroded. The management of the company is confident of positive outcome.
5. In respect of overdue trade receivables in certain projects.
The management of the company is in continuous engagement with respective
contractee/clients and confident of positive outcome.
6. In respect of external confirmations are not available towards certain trade
receivables,retention,bank balances. The management is of the opinion that these accounts
will not require any material adjustment upon receipt of balance confirmation.
7. In respect of corporate guarantee extended by the company in favour of security
trustee of the CDR lenders of the holding company and financial guarantees extended to
contractee/clients.
The management is confident of positive outcome.
8. In respect of balances available with statutory authorities and input credits.
The management is of the opinion that these accounts will not require any material
adjustment upon reconciliation.
9. In case of write back of various trade payables, provisions and advances from
customers. The management is of the opinion that these accounts will not have any material
impact.
RELATED PARTY TRANSACTIONS
As per the requirement of provisions of the Act and SEBI (Listing Obligations and
Disclosures Requirements) Regulations 2015, the Company has formulated a policy on Related
party transactions to ensure the transparency in transactions between the company and
related parties. The said RPT Policy is also available at Companys website/www.hdo.in.
All Related Party Transactions entered by the Company during the year under review were in
ordinary course of business and on Arms length basis. There were no materially
significant related party transactions entered by the company during year under review.
Since all the related party transactions entered into by the Company, were in ordinary
course of business and were on Arms length basis, disclosure in form AOC-2 as required
under Section 134(3)(h) of the Act is not applicable.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, investments made and guarantees issued under Section 186 of
the Act, during year under review, are provided in notes to financial statements, which
forms part of this report.
CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION ETC.
Due to the de-merger of the Manufacturing Division with effect from April 01, 2011
already approved by the Honble Bombay High Court vide their orders date July 18, 2012,
the Company has nothing to report under this head specifically. However, the Company is
conscious of its responsibility in respect of energy conservation and technology
absorption and adopts suitable measures towards this end from time to time.
The foreign exchange earnings for the year ended March 31, 2017 stands at nil
million.The amount spent on account of expenditure in foreign currency stands at Rs 0.25
million.
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 given
below:
a. The ratio of the remuneration of each Director to the median remuneration of the
employees of the company for the financial year:
| S.No. |
Non-executive directors |
Ratio to median remuneration |
| 1 |
Mr. P.R Tripathi ( Sitting Fees) |
0.47 |
| 2 |
Mr. Ramendra Gupta ( Sitting Fees ) |
0.30 |
| 3 |
Mrs. M Hima Bindu ( Sitting Fees ) |
0.18 |
| S.No. |
Executive Directors |
Ratio to median remuneration |
| 1 |
S.C Sekaran |
0.0 |
b. The percentage increase in remuneration of each director, chief executive officer,
chief financial officer, company secretary in the financial year:
| Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in the
financial year |
Percent increase in remuneration in the financial year |
| NIL |
NIL |
c. The percentage increase in the median remuneration of employees in the financial
year: NIL d. The number of permanent employees on the rolls of Company: 251 e. The
explanation on the relationship between average increase in remuneration and Company
performance:
The increase in remuneration is in line with the market trends. In order to ensure that
remuneration reflects Company performance, the performance pay is also linked to
organization performance, apart from an individuals performance.
f. Comparison of the remuneration of the key managerial personnel against the
performance of the Company:
g. There are no employees of the Company drawing remuneration in excess of Rs 60 lakh
p.a. or Rs 5 lakh per month during the financial year 2016-2017.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act, the extract of annual return is given in
Annexure "B" in the prescribed Form MGT-9 which forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013, the Directors confirm in respect
of the audited annual accounts for the year ended March 31, 2017:
a) In the preparation of the annual accounts for the financial year ended March 31,
2017, the applicable accounting standards had been followed along with proper explanation
relating to material departures;
b) Selected such accounting policies and applied them consistently and made judgements
and estimates that are reasonable and prudent so as to give a true and fair view of the
state of affairs of the Company as at March 31, 2017 and of the profit /loss of the
Company for that period;
c) 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; d) Prepared
the annual accounts on a going concern basis;
e) Devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
f) Laid down internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating effectively.
DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013
There were no cases of sexual harassment of women reported in the company during the
financial year 2016-2017.
INDUSTRIAL RELATIONS
Industrial relations have been cordial and your Directors appreciate the sincere and
efficient services rendered by the Company continued to have cordial and harmonious
relations with its employees.
HEALTH, SAFETY AND ENVIRONMENT
In line with our Corporate vision to improve the safety and quality of life of
employees and to mitigate the risks of Health, Safety and Environment (HSE), the Company
is actively involved in design and engineering of its projects through the non-polluting
manufacturing processes, scrupulous compliance with environment norms and development of
environmental products.
Reinforcing our commitment to high levels of Quality and best-in –class services
to customers, the company has Integrated Management System (IMS) consisting of ISO 9001:
2008, ISO 14001: 2004 and OSHAS 18001: 2007 systems across the organisation inclusive of
project sites accredited by M/s International Standards Body, Australia.
The Company is committed to progressively maintaining the best in class standards of
HSE care for its people, practices, processes and services. The Company also promotes
active participation of its employees and contractors to manage HSE risks with a goal to
preventing accidents, injuries and occupational illness. The Company conducts on-going
safety awareness programmes which together with safety audits and continual safety
training strengthens the processes and systems in this area. The Company also conducts
continuous training of the staff at all levels regarding HSE issues, with experts being
invited to train the senior management.
Upgradation of safety procedures at project sites and training has been of prime
importance as a part of workplace safety.
As a part of its commitment to environment, which has always been in the forefront,
your Company has taken up several environmental management initiatives and remains
committed to clean environment.
As a leader in environment and waste management technology market, HDO provides
complete solutions for waste reduction and water conservation for broad spectrum of
industries like refineries, minerals, pulp and paper, sugar, etc.
CORPORATE SOCIAL RESPONSIBILITY
As per the Companies Act, 2013, all companies having net worth of Rs 500 Crore or more,
or turnover of Rs 1,000 Crore or more or a net profit of Rs 5 Crore or more during any
financial year will be required to constitute a corporate social responsibility (CSR)
committee of the Board of Directors comprising three or more directors, at least one of
whom will be an Independent Director.
CSR activities, as per the provisions of the Companies Act, 2013, could not be
undertaken by the Company in view of the losses incurred by the Company during the current
financial year.
ACKNOWLEDGEMENT
The Directors would like to express their appreciation for support and cooperation
received from the holding company, bankers, financial institutions, suppliers, associate
sub-contractors and members during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the committed services provided by
the executives, staff and workers of the Company. The Board of Directors also thank all
the employees for their contribution and continued cooperation throughout the year and is
confident that new heights can be reached in improving the stakeholder value in the
Company.
For Hindustan Dorr Oliver Limited
|
S.C. Sekaran |
Amit Gupta |
|
Executive Director |
Resolution Professional |
|
(DIN:00334115) |
IP Regn.No. IBBI/IPA 001/IP |
|
|
P00016/2016-2017/10040 |
| Mumbai |
|
|
| July 26, 2017 |
|
|
+91-9892691696
