[Pursuant to Section 134(3) of the Companies Act, 2013]
To
The Members
HINDUSTAN HARDY LIMITED
The Directors have pleasure in presenting the Forty First Annual Report together with
the Statement of Accounts for the year ended on March 31,2023.
FINANCIAL RESULTS:
| Particulars |
For the year ended 31st March 2023 |
For the year ended 31st March 2022 |
|
Rs. in Lakh |
Rs. in Lakh |
| Revenue from Operations |
6309.11 |
6258.26 |
| Other Income |
58.94 |
14.76 |
| Total Income |
6368.05 |
6273.03 |
| Profit before Interest, Depreciation and Tax |
656.90 |
604.34 |
| Finance Cost |
41.40 |
31.61 |
| Depreciation |
90.27 |
70.41 |
| Profit / Loss before tax |
525.23 |
502.32 |
| Tax Expenses |
141.53 |
134.11 |
| Profit / Loss after Tax |
383.70 |
368.21 |
| Other Comprehensive Income / (loss) for the year |
3.90 |
6.79 |
| Profit / Loss for the year attributable to owners of the company |
387.60 |
375.00 |
| Surplus brought forward from Previous Year |
905.00 |
559.97 |
| Profit available for appropriation |
1292.6 |
934.97 |
| Proposed Dividend |
(32.97) |
(29.97) |
| Surplus Carried Forward |
1259.30 |
905.00 |
OPERATIONS/STATE OF COMPANYS AFFAIRS
Overall, the Company ended the year with sales that were pretty much flat compared to
the previous financial year. Sales in FY 21-22 were up 40% relative to FY 20-21. Export
sales in FY 22-23 reduced due to the economic situation in Europe and also inventory
rationalization by both domestic and overseas customers. Export customers had all
increased inventory levels during the pandemic to minimize production disruptions but
reduced inventory levels as shipping dislocations eased and the pandemic abated. Domestic
customers also reduced inventory levels which also affected sales.
It is a global trend that all OEMs are focusing on reducing inventory carrying cost and
transferring the onus of maintaining safety stock to their suppliers. The Company is also
similarly working with its suppliers to reduce procurement lead time and develop a more
efficient supply chain.
Sales were considerably stronger in the second half of the year compared to the first
half - the increase was over 20%.There was some improvement in exports and the domestic
commercial vehicle market finally appeared to somewhat rebound. The company also received
production orders for prototype samples submitted previously.
Other income increased compared to FY 21-22 as the Euro strengthened from the lows
witnessed after the Ukraine invasion.
Steel prices finally appeared to stabilized somewhat compared to the prior financial
year. Variable costs increased primarily driven by an increase in MSEB tariffs, tooling
costs and freight costs.
The companys cost reduction efforts across all areas partiallyhelped to offset
thisimpact. The company installed a power factor controller to help minimize electricity
consumption. The company is also exploring various alternatives for solar power.
The company continues its value engineering efforts to try and offset this impact and
has initiated a fresh cost reduction initiative involving employees at all levels.
TRANSFER TO RESERVES
There was no transfer made to any Reserve during the year.
DIVIDEND
The Board of Directors has recommended dividend of @ Rs. 2.20per share (22%) on the
equity shares of the Company for the financial year 2022-2023. Pursuant to the Finance
Act, 2020, dividend income is taxable in the hands of the shareholders effective April 1,
2020 and the Company is required to deduct tax at source from dividend paid to the Members
at prescribed rates as per the Income Tax Act, 1961.
OUTLOOK
Globally inflation remains a concern, though the Eurozone and United States have
witnessed a slight improvement. Interest rates remain high which remains a damper on
growth.
Export markets are expected to remain flat and the company is continuing its efforts to
approach new customers and enter new geographies. Management has made this a focus area
and is actively working to increase sales both in India and overseas.
Historically, the first quarter is always the weakest as most companies reduce
production after the end of the financial year. The monsoon is expected to be normal which
will help bolster the agricultural segment. The off-highway segment is also expected to
remain strong due to the continued infrastructure push by the government.
Product costs continue to increase as suppliers across the board are pushing for
conversion cost increases which are not compensated by customers. Therefore increasing
efficiency is of utmost importance and the company is taking several steps to improve
productivity, reduce setup time and eliminate waste in all areas. The company is also
focusing on training and skill upgradation so the latest manufacturing techniques can be
employed which will increase overall efficiency.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF THE FINANCIAL YEAR:
There have been no material changes and commitments, 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 meetings of the Board of Directors of the Company were held during the year on
26.05.2022, 10.08.2022, 14.11.2022 and on 30.01.2023. The details of attendance at the
meetings of board of directors are annexed to this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Act and Articles of
Association, Mr. Vijay Narhar Pathak(DIN 02700611) Executive Director & COO of the
Company, retires at the ensuing Annual General Meeting and being eligible offers himself
for re-appointment.
The members of the Company had at the 40th Annual General Meeting, approved the
appointment of Mr. Sanjiv Bhasin (DIN00001575) as an Independent Director of the company
for a period of five years from February 11,2022 to February 10, 2027.
In terms of Section 203 of the Act, the following are the Key Managerial Personnel
(KMP) of the Company:
Mr. Vijay Pathak, Executive Director & COO Ms. Devaki Saran, Executive Director
& CFO Ms. Sunita Nisal, Company Secretary
DECLARATION FROM INDEPENDENT DIRECTORS
Directors who are independent directors, have submitted a declaration as required under
section 149(7) of the Act that each of them meets the criteria of independence as provided
in sub Section (6) of Section 149 of the Act and under regulation 16 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 as amended from time to time
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. S. C. Saran
2. Mr. Jehangir H. C. Jehangir
3. Mr. Richard Koszarek
4. Mr. Navroze S Marshall
5. Mr. Sanjiv Bhasin
Four meetings of the Audit committee were held during the financial year. The details
of attendance of committee meetings is annexed to this report.
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. The Whistle Blower Policy (Vigil Mechanism) is uploaded on the
Companys website www.hhardys.com
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
(www.hhardys.com). There has been no change in the policies since the last fiscal year.
We affirm that the remuneration paid to the directors is as per the terms laid out in
the remuneration policy of the Company.
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
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
The Board has adopted policies and procedures for ensuring the orderly and efficient
conduct of its business, including adherence to the Companys policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
disclosures.
The internal auditors also regularly reviews the adequacy of internal financial control
system. DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES
The Company is a subsidiary of XLO India Limited. The Company does not have any
subsidiary/ joint ventures/ associates.
ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as
on March 31,2023 is available on the Companys website on www.hhardys.com.
AUDITORS
The Members of the company had, at its Annual General Meeting (AGM) held on 27th
September, 2022 had appointed M/s. Daga & Chaturmutha, Chartered Accountants, Nashik,
(ICAI Registration No101987W) as the Statutory Auditors for a further period of 5 (five)
consecutive years from the conclusion of the Fortieth AGM till the conclusion of the
Forty-Fifth AGM. M/s. Daga & Chaturmutha, Chartered Accountants, have submitted a
certificate confirming that their appointment is in accordance with Section 139 read with
Section 141 of the Act.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 and other applicable provisions, if any, of
the Companies Act, 2013, M/s. Parikh & Associates, Practicing Company Secretaries were
appointed as the Secretarial Auditors for auditing the secretarial records of the Company
for the financial year 2022-2023.
The Secretarial Auditors Report is annexed as Annexure I.
AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT
The Statutory Auditors report and Secretarial Auditors report does not contain any
qualifications, reservations or adverse remarks.
As regards reference made by the Secretarial Auditors in the Secretarial Audit
Reportfor the financial year ended 31.03.2023, with respect to fine levied by BSE Limited
regarding Non-submission of the Annual Report within the period prescribed under
Regulation 34. Total Fine Amount of Rs. 2360/- was paid on 03rd November 2022.
During the year under review, there were no instances of fraud reported by the
auditors, under Section 143(12) of the Companies Act, 2013 to the Audit Committee or the
Board of Directors.
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 II.
PARTICULARS OF EMPLOYEES
Pursuant to Section 197 of the Act read with rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 the particulars of employees are
annexed as Annexure III.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORY/ JUDICIAL AUTHORITY
No significant or material orders were 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 during the year
ended March 31, 2023.
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. The company conducts a monthly review of
major risks and actions to minimize these in its Monthly Management Meeting. Efficacy of
risk management is also one of the criteria on evaluated in the IATF certification
process.
The Covid-19 pandemic highlighted the importance of effective risk management and
contingency planning and the Company and Board are evaluating this policy in view of the
risks that have been particularly highlighted by the pandemic.
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, 2014 are given in Form AOC-2
and the same forms part of this report as Annexure IV.
EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
An annual evaluation of the Boards own performance, Board committees and individual
directors was carried out pursuant to the provisions of the Act in the following manner:
| Sr. No. Performance evaluation of |
Performance evaluation performed by : |
Criteria |
| 1. Each Individual director |
Nomination and Remuneration Committee |
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. Independent directors; |
Entire Board of Directors excluding the director who is being evaluated |
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, its committees and individual directors |
All directors |
Board composition and structure; effectiveness of Board processes, information and
functioning, fulfilment of key responsibilities, performance of specific duties and
obligations, timely flow of information etc. |
|
|
The assessment of committees based on the terms of reference of the committees and
effectiveness of the meetings. |
DISCLOSURE UNDER THE SEXUAL HARASSMENT 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 (POSH Act) and rules made thereunder. All employees (permanent, contractual,
temporary, trainees) are covered under this policy.
The Company has not received any complaint of sexual harassment during the financial
year 2022-23.
The Company has complied with the provisions relating to constitution of Internal
Complaints Committee under POSH Act.
SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of
all applicable Secretarial Standards and that such systems are adequate and operating
effectively.
LISTING AGREEMENT AND LISTING FEES
The Company entered into Listing Agreement with BSE Limited in terms of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 issued on September 2,
2015 effective from December 1, 2015.
The Company has paid the listing fees to BSE Limited for the year 2023-2024.
INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE
The Board of Directors has adopted the Code of Practices and Procedures for Fair
Disclosure of Unpublished Price Sensitive Information and Code of Internal Procedures and
Conduct for Regulating, Monitoring and reporting of Trading by Insiders in accordance with
the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and is
available on our website (http://www.hhardys.com)
GREEN INITIATIVES
As a part of Green initiative and in compliance of MCA Circulars, the Annual Report
2022-2023 and Notice of the 41st Annual General Meeting of the Company are sent to all
members whose email addresses are registered with the Company / Depository Participant(s).
Members who have not updated their email addresses with the Company may update their
email addresses by writing to the Company or Companys Registrar & Share Transfer
Agents, M/s Satellite Corporate Services Pvt. Ltd., Office No. A/106-107, Dattani Plaza,
East West Compound, Andheri Kurla Road, safed Pool, Sakinaka, Mumbai-400072. Members
holding shares in dematerialised mode are requested to register/update their email
addresses with the relevant Depository Participants.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
During the year FY 2022-2023, the provisions of Section 135 of the Companies Act, 2013
("the Act") read with Companies (Corporate Social Responsibility Policy) Rules,
2014 were not applicable to the Company.
MANAGEMENTS DISCUSSION AND ANALYSIS
In terms of the provisions of Regulation 34 of the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the
Managements discussion and analysis is set out in this Annual Report.
CORPORATE GOVERNANCE REPORT
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
Corporate Governance is not mandatory to the Company.
MAINTENANCE OF COST ACCOUNTING RECORDS
The company is not required to maintain cost records as specified under section 148(1)
of the Companies Act, 2013.
ACKNOWLEDGEMENT
The directors thank the Companys 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 family.
|
For and on behalf of the Board |
| Place: Nashik |
S. C. Saran |
| Date: 11th August, 2023 |
Chairman |
+91-9892691696
