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Directors Report of BirlaNu Ltd.
Mar 31, 2025
The Board of Directors are pleased to present the 78th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31, 2025.
SUMMARY OF FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended March 31, 2025 is summarised below:
|
(H in crore) |
||||
|
Standalone |
Consolidated |
|||
|
2024-25 |
2023-24 |
2024-25 |
2023-24 |
|
|
Total Income |
2,342.33 |
2,266.76 |
3,644.70 |
3,404.80 |
|
Earnings before Interest, Depreciation, Amortization & Tax |
118.83 |
174.53 |
88.04 |
154.28 |
|
Less : Interest |
24.36 |
10.75 |
68.24 |
35.35 |
|
Depreciation & Amortization |
68.12 |
67.96 |
144.08 |
120.01 |
|
Profit/(Loss) Before Tax and Exceptional items |
26.35 |
95.82 |
(124.28) |
(1.09) |
|
Add/(Less): Exceptional items / Profit / Income from JV |
81.89 |
37.21 |
80.82 |
36.63 |
|
Profit/(Loss) before tax for the year |
108.24 |
133.03 |
(43.46) |
35.54 |
|
Less: Taxes |
17.29 |
30.05 |
(10.56) |
0.76 |
|
Profit/(Loss) after tax for the year |
90.95 |
102.98 |
(32.90) |
34.78 |
|
Other Comprehensive Income/(Loss) (Net of tax) |
(0.48) |
(0.14) |
5.15 |
0.66 |
|
Total Comprehensive Income/(Loss) for the year |
90.47 |
102.84 |
(27.75) |
35.44 |
|
Basic Earnings Per Share (H) |
120.61 |
136.59 |
(43.63) |
46.15 |
|
Diluted Earnings Per Share (H) |
120.61 |
136.59 |
(43.63) |
46.15 |
BirlaNu achieved a net revenue from operations of H 2,310.04 crore as against H 2,230.85 crore in the previous year on standalone basis, an increase of 3.5% and on consolidated basis registered a net revenue from operation of H 3,615.22 crore as against H 3,374.97 crore in the previous year recording an increase of 7.1%.
With the addition of new capacities and introduction of new products, the Company anticipates a positive growth momentum in the coming year.
Interest cost for the financial year 2024-25 has increased to H 24.36 crore on a standalone basis as against H 10.75 crore during the previous year. On consolidated basis, interest cost for the financial year 2024-25 stood at H 68.24 crore as against H 35.35 crore in the previous year.
The increase in interest cost is on account of increase in borrowings for acquisition of Crestia Group, capex for capacity enhancement and working capital requirements.
As on March 31, 2025, the Company has outstanding borrowings of H 295.30 crore on standalone basis and H 709.98 crore on consolidated basis. The debt equity ratio on consolidated basis stood at 0.58 times as of March 31,2025 as against 0.44 times as of March 31,2024.
During the year under review, BirlaNu registered profit before tax (PBT) of H 26.35 crore (excluding income from exceptional items), on standalone basis as against H 95.82 crore in the previous year, recording a decline of 73% mainly due to weak demand and soft pricing scenario in most product categories and volatility in resin prices.
Loss before tax on a consolidated basis for the financial year 2024-25 stood at H 43.46 crore as against profit before tax of H 35.54 crore in the previous year, recording a decline of 222% largely due to continued weak demand of flooring products in Europe market, in additon to the overall subdued demand environment and soft pricing senario.
On a consolidated basis, the net worth of the Company as at March 31, 2025 stood at H 1,211 crore as against H 1,253 crore in the previous year.
The consolidated earnings per share (basic) for the financial year ended March 31, 2025 stood at H (43.63) per share as against H 46.15 per share for the financial year ended March 31, 2024.
A detailed segment-wise business performance of the Company for the financial year 2024-25 is included in the Management Discussion and Analysis report forming part of this Annual Report.
During the financial year 2023-24, the Board of Directors approved acquisition of 100% equity share capital of Crestia Polytech Private Limited (âCrestiaâ) along with four other entities, namely, Topline Industries Private Limited, Aditya Polytechnic Private Limited, Prabhu Sainath Polymers Private Limited (formerly Sainath Polymers) and Aditya Poly Industries Private Limited (formerly Aditya Industries) (âCrestia Groupâ) on the terms and conditions as agreed under the Share Subscription and Purchase Agreement (âSSPAâ) (includes amendment(s) and addendum(s) thereof) to strengthen the Companyâs Pipes and Fittings business in Eastern India.
As per the terms of the said SSPA, the Company acquired 100% of the paid-up equity share capital of Crestia on April 5, 2024, thereby making Crestia a wholly owned subsidiary of the Company with effect from the same date. Further, in accordance with the SSPA, Crestia entered into Share Purchase Agreements (âSPAâ) on April 5, 2024, with Topline Industries Private Limited, Aditya Polytechnic Private Limited, and Prabhu Sainath Polymers Private Limited (formerly Sainath Polymers), and subsequently on June 28, 2024, with Aditya Poly Industries Private Limited (formerly Aditya Industries), along with their respective existing shareholders. Pursuant to these agreements, Crestia acquired 100% of the equity share capital of all four entities, thereby making them wholly owned subsidiaries of Crestia and step-down subsidiaries of the Company, effective April 5, 2024, and June 28, 2024, respectively.
During the financial year, the Board recognized the need to strategically reposition the Companyâs brand identity to better align with its evolving business strategy and future aspirations, and proposed change in name of the Company from HIL Limited to BirlaNu Limited, reflecting the Companyâs progressive outlook and growth trajectory. This strategic move is the reflection of the transformation envisioned for the Company in line with the growth plans and making the Company consumer focused while retaining the legacy of Birla brand and the equity associated with it.
Accordingly, the name of the Company has been changed from âHIL Limitedâ to âBirlaNu Limitedâ with effect from March 19, 2025 as per the fresh certificate of incorporation issued by the Ministry of Corporate Affairs, Government of India. The stock exchanges, i.e., BSE Limited and National Stock Exchange of India Limited, have noted the new name and the Stock/ Scrip Code of the Company stands changed from âHILâ to âBIRLANUâ with effect from April 9, 2025.
MEMORANDUM AND ARTICLES OF ASSOCIATION
During the financial year, the Company amended its existing Memorandum and Articles of Association. The Memorandum of Association was aligned with the provisions of Table A of Schedule I of the Companies Act, 2013, and a new set of Articles of Association was adopted in line with the provisions of the Companies Act, 2013. These revisions were duly approved by the Board of Directors at its meeting held on January 21, 2025, and subsequently by the shareholders through postal ballot on February 24, 2025.
DIVIDEND
The Board at its meeting held on May 17, 2025 has recommended a final dividend of H 30/- (i.e. 300%) per equity share of H 10/- each for the financial year 202425. The dividend pay-out is subject to the approval of the shareholders at 78th Annual General Meeting of the Company.
As per Income Tax Act, 1961, as amended, dividend declared/paid after April 1, 2020 will be taxable in the hands of the shareholders. Shareholders are requested to visit https://cms.birlanu.com/public/ media/2025/03/13/faqs-on-tds.pdf.
The Company has fixed Thursday, July 24, 2025 as the âRecord Dateâ for the purpose of determining the entitlement of shareholders to receive the final dividend for the financial year ended March 31, 2025.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (âSEBI Listing Regulationsâ), the Board of Directors of the Company have adopted a Dividend Distribution Policy. The policy lays down a broad framework and factors which the Board would consider for deciding the distribution of dividend to its shareholders. The said policy is available on the Companyâs website https://cms.birlanu.com/ public/media/2025/03/13/dividend-distribution-policy-2021.pdf.
TRANSFER TO GENERAL RESERVES
During the year under review, the Company has not transferred any amount to General Reserves.
SHARE CAPITAL
The paid-up equity share capital as on March 31, 2025 was H 754.09 lakh divided into 75,40,899 equity shares of H 10/- each. During the year under review, there was no change in the paid-up equity share capital of the Company.
The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. Annual listing fees for the year 2025-26 has been paid to these exchanges within the prescribed timelines. There was no suspension in trading of the equity shares of the Company during the financial year 2024-25.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on Management Discussion and Analysis is appended to this report as per the requirements of SEBI Listing Regulations.
BOARD OF DIRECTORS, ITS COMMITTEES AND THEIR MEETINGS
The Company has a professional Board with an optimum combination of executive, non-executive and independent directors, including woman director, who bring to the table the right mix of knowledge, skill and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders.
As per the declarations received by the Company none of the Directors are disqualified under Section 164(2) and other applicable provisions of the Companies Act, 2013 ("the Actâ). Certificate on nondisqualification as required under Regulation 34 of SEBI Listing Regulations forms part of the Corporate Governance Report.
During the financial year, 7 (seven) meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Act and Secretarial Standards issued by the Institute of Company Secretaries of India. The date(s) of the Board Meeting, attendance of the Directors is given in the Corporate Governance Report forming part of this annual report. The time-gap between any two consecutive meetings was within the period prescribed under the Act and SEBI Listing Regulations.
The Board has constituted the following five Committees:
1. Audit Committee
2. Nomination and Remuneration cum Compensation Committee
3. Stakeholdersâ Relationship Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
The details of all the above Committees along with their terms of reference, composition, number of meetings and attendance at the meetings are
provided in detail in the Corporate Governance Report annexed to this Boardâs Report.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors at its meeting held on March 28, 2024, based on the recommendation of the Nomination and Remuneration cum Compensation Committee, approved appointment of Ms. Nidhi Jagat Killawala (DIN:05182060) as an Additional Director of the Company, designated as an Independent Director with effect from April 1, 2024, not liable to retire by rotation; and appointment of Ms. Amita Birla (DIN:00837718) as an Additional Non-executive Director of the Company with effect from April 1, 2024, liable to retire by rotation. Both appointments were subsequently approved by the shareholders through postal ballot on May 2, 2024.
Further, the Board of Directors in its meeting held on May 7, 2024, based on the recommendation of the Nomination and Remuneration cum Compensation Committee, approved appointment of Prof. Janat Shah (DIN:01625535), as an Additional Director of the Company, designated as an Independent Director with effect from May 7, 2024, not liable to retire by rotation and the same was approved by the shareholders at the 77th Annual General Meeting held on July 30, 2024.
During the financial year, Ms. Gauri Rasgotra (DIN:06862334) ceased to be an Independent Director of the Company with effect from May 8, 2024 upon completion of her 10 (ten) years term. The Board placed on record its sincere appreciation and gratitude for the guidance and valuable contribution by Ms. Gauri Rasgotra during her tenure as a member of the Board.
In accordance with provisions of Section 152 of the Act and pursuant to Articles of Association of the Company, Mr. Desh Deepak Khetrapal (DIN:02362633) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The brief details with respect to appointment of Mr. Desh Deepak Khetrapal, as required to be disclosed in accordance with Regulation 36 of SEBI Listing Regulations, Companies Act, 2013 and Secretarial Standards are included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.
Apart from receiving directorsâ remuneration and sitting fee, no Non-executive Director except Ms. Nidhi Killawala, who is partner in Khaitan & Co. LLP, and Mr. CK Birla, Chairman, who is a relative of Ms. Avanti Birla, President - Strategy, had any pecuniary relationship with the Company. The details of
transactions entered into with Khaitan & Co. LLP and its affiliate firms and Ms. Avanti Birla forms part of the notes to the financial statements of the Company for the financial year 2024-25. (Refer note no. 40).
In terms of Regulation 25(8) of the SEBI Listing Regulations, Independent Directors have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based upon declarations received from Independent Directors, the Board of Directors have confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are independent of the management.
Further, in the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs. Independent Directors are not subject to retire by rotation. The Independent Directors have also confirmed that they have complied with the Companyâs Code of Conduct for Board members and Senior Management and Codes under SEBI (Prohibition of Insider Trading) Regulations, 2015.
During the financial year 2024-25, the overall managerial remuneration paid to Mr. Akshat Seth, Managing Director & CEO exceeded the limits stipulated under the provisions of Section 197 of the Act, i.e., 5% of the net profits of the Company, calculated as per Section 198 of the Act. Accordingly, approval of the shareholders was obtained on February 24, 2025 by way of special resolution under the provisions of Section 197 and other applicable provisions, if any, of the Companies Act, 2013 read with Schedule V thereof and applicable provisions of SEBI Listing Regulations, for payment of aggregate salary, allowances, perquisites and other benefits, variable pay and long term incentives as per Companyâs Scheme, as approved by the Board, as the minimum remuneration in the event of loss or inadequacy of profits in the financial year 2024-25.
In terms of provisions of Section 203 of the Act, during the financial year 2024-25 there was no change in the key managerial personnel of the Company and the following continued to hold their respective offices as on March 31, 2025:
i. Mr. Akshat Seth, Managing Director & CEO
ii. Mr. Ajay Madhusudan Kapadia, Chief Financial Officer
iii. Ms. Nidhi Bisaria, Company Secretary and Compliance Officer
Pursuant to the provisions of the Act and SEBI Listing Regulations, every year a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors is conducted. Structured forms covering evaluation of the Board, the Committees of the Board, the Chairperson, Independent Directors and Non-Independent Directors are devised for evaluation by all the Directors. Each Director is rated against various criteria such as composition of the Board, receipt of regular inputs and information, functioning, performance and structure of the Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at the Board meetings, leadership, etc.
The Board reviews the key skills/expertise/ competence of the Directors, so that the Board of Directors comprises of a diverse and multidisciplinary group of professionals with requisite skills/ expertise/competence who can contribute towards providing strategic direction to the Companyâs management upholding the highest standards of Corporate Governance.
Further, as per the SEBI Listing Regulations, the following is the matrix of skills and competencies on which all the Directors are evaluated:
? Governance and Board service
? Business understanding
? Risk/Legal/Regulatory compliance
? Information Technology/ Accounting/
Financial experience
? Industry/Sector knowledge
? Strategy development and implementation
In a separate meeting of Independent Directors, performance of Non-Independent Directors (NEDs), the Board as a whole and the Chairman of the Company was evaluated. The performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated. The evaluation was carried out in terms of the Nomination, Remuneration & Evaluation Policy of the Company. The Nomination and Remuneration cum Compensation Committee of the Company annually reviews the performance evaluation process.
The evaluation process confirms that the Board and its Committees continue to operate effectively and that the performance of the Directors meets expectations.
FAMILIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
In addition to giving a formal appointment letter to the newly appointed Independent Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Companies Act, 2013 and relevant Regulations of SEBI Listing Regulations are given and explained to the new Director.
Pursuant to Regulation 25(7) of SEBI Listing Regulations, conducting familiarization programmes for the Independent Directors in the Company is a continuous process, whereby Directors are informed, either through presentations at the Board or the Committee meetings, board notes, interactions or otherwise about industry outlook, business operations, future strategies, business plans, competitors, market positions, products and new launches, internal and operational controls over financial reporting, budgets, analysis on the operations of the Company, etc.
Pursuant to Regulation 46 of SEBI Listing Regulations, the details required are available on the Companyâs website https://cms.birlanu. com/public/media/2025/04/16/familiarization-programme-2024-25.pdf.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Company endeavours to have an appropriate mix of executive, non-executive and independent directors to maintain independence from the management and they continuously provide guidance on appropriate governance. The selection and appointment of Board members are done on the recommendations of the Nomination and Remuneration cum Compensation Committee. The appointments are based on meritocracy and having due regard for diversity. While evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBI Listing Regulations. In case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.
The Nomination, Remuneration & Evaluation Policy for Directors, Key Managerial Personnel and Senior Management is placed on the website of the Company and can be accessed through the web link https://cms.birlanu.com/public/media/2025/04/16/ familiarization-programme-2024-25.pdf
The objective of the Companyâs remuneration policy is to attract, motivate and retain qualified and expert individuals that the Company needs to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing the interests of the Companyâs stakeholders.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted a CSR Committee and has a well-defined policy on CSR as per the requirement of Section 135 of the Companies Act, 2013, which covers the activities as prescribed under Schedule VII of the Companies Act, 2013. The details about the CSR Committee are provided in the Corporate Governance Report, which forms part of this Report.
During the financial year 2024-25, the Company was required to spend Rs. 331.57 lakh, i.e., 2% of average of the net profits of last three financial years, on CSR activities and the actual CSR spent during the financial year 2024-25 was H 331.78 lakh after adjusting H 18.09 lakh excess amount spent and carried forward from the financial year 2023-24.
The Annual Report on CSR Activities, pursuant to Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, forms part of this Report as Annexure I.
The CSR policy of the Company is placed on the Companyâs website and can be accessed through the web link: https://cms.birlanu.com/public/ media/2025/03/13/csr-policy.pdf.
Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company for the financial year 2024-25 can be accessed through the web link on the Companyâs website https:// cms.birlanu.com/public/media/2025/04/14/annual-return-2024-25.pdf.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in financial statements, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time and to the best of their knowledge and information furnished, the Board of Directors state that:
I. In preparation of the Annual Accounts for the financial year ended March 31, 2025, all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.
II. They have adopted 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/loss of the Company for the financial year ended March 31, 2025.
III. They have 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 Annual Accounts for the financial year ended March 31, 2025 have been prepared on a going concern basis.
V. Proper internal financial controls were in place and that the financial controls were adequate and operating effectively.
VI. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
The Company has constituted a Risk Management Committee of the Board to review the enterprise risk management plan/process of the Company. The Risk Management Committee identifies potential risks, assesses their potential impact and develops strategies to mitigate the risks. Periodic follow-ups to monitor the status of strategies/actions initiated to mitigate the risks is also conducted.
The Company has a Risk Management Policy which is approved and reviewed by the Board from time to time. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which risks are identified, assessed and mitigated across the organization. The Board reviews the risks associated with the enterprise periodically and oversees the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (âRMCâ). The RMC assists Audit Committee/ the Board in its oversight of the Companyâs management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Enterprise Risk Management (âERMâ) Framework.
There are no risks identified by the Board which may threaten the existence of the Company. Please refer detailed section on risk management covered in the report on Management Discussion and Analysis which is an integral part of this Annual Report.
The details about composition of the Risk Management Committee and its meetings, attendance is provided in Corporate Governance Report which forms part of this Annual Report.
Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed report on Corporate Governance forms an integral part of this Annual Report and is set out as a separate section.
The certificate of M/s. B S R and Co, (ICAI Firm Registration Number 128510W), Chartered Accountants, the Statutory Auditors of the Company, certifying compliance with the conditions of corporate governance as stipulated in the SEBI Listing Regulations is annexed with the Report on Corporate Governance. The Auditorsâ certificate for the financial year 202425 does not contain any qualification, reservation or adverse remark.
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
The Company has in place a robust vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct and Ethics Policy.
Adequate safeguards are provided against victimization to those who take recourse to the mechanism. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. The Whistle Blower Policy is available on the Companyâs website and can be accessed through the web link https://cms.birlanu.com/public/media/2025/03/13/ whistle-blower-policy.pdf.
The complaints received under Whistle Blower Policy are investigated thoroughly and detailed update including action taken, if any, on the same are presented to the Audit Committee and Statutory Auditors of the Company. There were two complaints received during the financial year 2024-25, both the complaints have been resolved during the financial year 2024-25 with appropriate action.
POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Prevention of Sexual Harassment at Workplace Act, 2013 and the Rules thereunder. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
The details of the number of cases filed under sexual harassment and their disposal, during the financial year 2024-25 is as under:
|
Number of cases pending as on the beginning of the financial year |
Nil |
|
Number of complaints filed during the financial year |
Nil |
|
Number of cases pending as on the end of the financial year |
Nil |
|
Number of workshops |
The Company regularly |
|
or awareness programs |
conducts necessary |
|
against sexual harassment |
awareness programs |
|
carried out |
for its employees and all employees are provided detailed education during the induction. |
|
Nature of action taken by the employer or district officer |
Not Applicable |
In line with the requirements of the Act and SEBI Listing Regulations, as amended from time to time, the Company has formulated a Policy on Related Party Transactions (âRPT Policyâ) for identifying, reviewing, approving and monitoring of Related Party Transactions and the same is uploaded on the website of the Company and can be accessed through the web link: https://cms.birlanu. com/public/media/2025/03/13/related-party-transaction-policy.pdf.
All related party transactions were at armâs length basis and in the ordinary course of business. All the related party transactions were reviewed and approved by the Audit Committee/ Board, as may be applicable. With a view to ensure continuity of day-to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an armâs length basis, from the
Audit Committee/Board. A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review.
During the year under review, the Company entered into one material related party transaction i.e. payment of remuneration to Ms. Avanti Birla, a related party within the definition of Section 2(76) of the Act, occupying the office or place of profit in the Company and the same are approved by the Audit Committee, the Board and the shareholders at their respective meetings as required under the provisions of Regulation 23 and other applicable provisions, if any, of the SEBI Listing Regulations read with Section 177 and 188 and other applicable provisions, if any, of the Companies Act, 2013. Accordingly, the disclosure of the said related party transaction as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is made in Form AOC-2 annexed to this Report as Annexure - II.
In terms of Regulation 23 of SEBI Listing Regulations, the Company submits details of related party transactions as per the specified format to the stock exchanges on a half-yearly basis.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The Company has put in place adequate internal financial control procedures commensurate with its size, complexity and nature of business. The Company has identified and documented all key financial controls, which impact the financial statements as part of its Standard Operating Procedures. The financial controls are tested for operating effectiveness through ongoing monitoring and review process by the management and also independently by the Internal Auditor during the audit reviews. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals.
Further, BirlaNu continues to remain vigilant on the evolving cybersecurity threat landscape. In our endeavour to maintain a robust cybersecurity posture, the team has remained abreast of emerging cybersecurity events, so as to achieve higher compliance and its continued sustenance. Our ongoing commitment to leveraging technology remains steadfast with a focus on delivering value and creating a future ready organization. We continue to be certified against the Information Security Management System (ISMS) Standard ISO 270012013. During the year, our focus was on cybersecurity personnel training, reskilling and building a security culture of collective onus. Annually, BirlaNu undertakes a comprehensive cyber security review
with the support of third-party subject matter experts to identify and plug any gaps, as applicable.
Based on the review, nothing has come to the attention of the Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year.
STATUTORY AUDITORS
M/s. B S R and Co, Chartered Accountants (FRN - 128510W) have been appointed as Statutory Auditors of the Company for a period of five years, i.e., from conclusion of 75th Annual General Meeting (AGM), held on July 29, 2022, till the conclusion of the 80th Annual General Meeting of the Company to be held in year 2027 under the provisions of Section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder.
The Auditorsâ Report for the financial year 202425 does not contain any reservation, qualification or adverse remark, on the financial statements of the Company. Auditorsâ Report is self-explanatory and therefore, does not require further comments and explanation.
Further, in terms of Section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.
INTERNAL AUDITORS
The Company has an effective fulltime in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports to the Audit Committee and the Managing Director about the adequacy and effectiveness of the internal control systems of the Company as well as the periodical results of its review of the Companyâs operations as per an approved internal audit plan duly approved by the Audit Committee. The in-house internal audit team works in tandem with M/s. Ernst and Young, LLP, whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan approved by the Audit Committee. Together, they provide a robust framework.
The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures are also presented periodically to the Audit Committee.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors at its meeting held on May 17, 2025, on recommendation of the Audit Committee, re-appointed M/s. S.S. Zanwar & Associates, (Firm Registration No. 100283), as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2026 at a remuneration of H 8 lakh (Rupees Eight lakh only) plus applicable taxes and out of pocket expenses. The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the Company has been set out in the Notice of ensuing AGM. The Cost Auditor has certified that their appointment is within the limits as prescribed under Section 141(3)(g) of the Act and that they are not disqualified from such appointment within the meaning of the said Act.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder and Regulation 24A of SEBI Listing Regulations, the Board of Directors at its meeting held on May 17, 2025, based on the recommendation of the Audit Committee, approved the appointment of M/s. Ranjeet Pandey & Associates, Company Secretaries (CP No. 6087) as Secretarial Auditor of the Company for a term of five consecutive years, i.e., from financial year 2025-26 till the financial year 2029-30, on such terms and conditions and at such remuneration as recommended by the Audit Committee and approved by the Board of Directors from time to time, subject to approval of shareholders at the ensuing Annual General Meeting.
The Company has received a consent from M/s. Ranjeet Pandey & Associates, along with a certificate confirming that they are qualified and competent to be appointed as Secretarial Auditor under the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Accordingly, the Board recommends the appointment of M/s. Ranjeet Pandey & Associates, Company Secretaries (CP No. 6087) as Secretarial Auditor of the Company for the aforesaid term, for approval of the members by way of an ordinary resolution as set out at item no. 4 of the notice annexed with this Annual Report.
The Secretarial Audit Report issued by M/s. Ranjeet Pandey & Associates, Company Secretaries for the financial year ended March 31, 2025 is given in Annexure III attached hereto and forms part of this report. The report does not contain any qualifications, reservations or adverse remarks.
The Company has undertaken an audit for the financial year 2024-25 for all the applicable compliances under various regulations, circulars and notifications issued by the Securities and Exchange Board of India (âSEBIâ) and accordingly received Annual Secretarial Compliance Report from M/s. Ranjeet Pandey & Associates, Company Secretaries in terms of the SEBI Circular dated February 8, 2019 without any observations or comments and a copy of the same has been submitted to the Stock Exchanges within the prescribed time limit.
During the year under review, the Secretarial Auditor have not reported any matter under Section 143(12) of
the Act, and therefore, no details are required to be disclosed under Section 134(3)(ca) of the Act.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of loans, guarantees /security provided and inter-corporate investments made during the financial year ended March 31, 2025, forms part of the notes to the financial statements of the Company for the financial year 2024-25 at note no. 7, 9 and 53.
During the financial year, the Company acquired 35,53,000 equity shares of Crestia Polytech Private Limited (âCrestiaâ) of H 10/- each by subscribing to the private placement offered by Crestia and further, the Company acquired 44,90,000 equity shares of H 10/- each from the existing shareholders of Crestia, thereby making it a wholly owned subsidiary of the Company with effect from April 5, 2024, at an aggregate consideration of H 160.45 crore.
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2025.
In compliance with the requirements of SEBI Listing Regulations, the Company has appointed Dr. Arvind Sahay, Independent Director of the Company as a Director on the Board of HIL International GmbH, Germany (material wholly owned subsidiary).
Supercor Industries Limited
The Company holds 33% of the share capital in Supercor Industries Limited (âSupercorâ), a company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold the remaining 67% of the share capital in Supercor.
During the year there was no significant development at Supercor Industries Limited. Supercor had already suspended its operations since the year 2016 due to cash flow crisis. The Company informed the Board of Supercor Industries Limited about its intention to sell its stake and has not been participating in any of the discussions of the Board / Management for last five years. The Interim Board set up by the Nigerian Government is not responsive and the Company is waiting to hear from the Board of Supercor for deciding further course of action. Accordingly, the Company has submitted an application to Reserve Bank of India (RBI) for suspension of UAN allotted towards the above said investment in Supercor and the same has been suspended by RBI.
In view of the above, the Company is not in a position to obtain any information/financials from the Joint Venture entity and hence the consolidated financial statements do not include the financial performance of Supercor Industries Ltd.
As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/Associate Companies/Joint Ventures in Form AOC-1 is attached as Annexure IV to this report.
During the year, the Board of Directors, at its meeting held on February 6, 2025, approved a proposal for the amalgamation of the Companyâs wholly owned subsidiary, Crestia Polytech Private Limited and its step-down subsidiaries Aditya Poly Industries Private Limited, Aditya Polytechnic Private Limited, Prabhu Sainath Polymers Private Limited, and Topline Industries Private Limited (collectively referred to as the âTransferor Companiesâ) with the Company. The amalgamation will be executed through a Scheme of Amalgamation under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. This strategic initiative aligns with the Companyâs longterm vision of optimizing operational efficiencies, strengthening market presence, and leveraging
synergies within the polytech and polymers manufacturing sector, where all the involved transferor entities are currently engaged. The above Scheme is subject to necessary approvals from the shareholders, creditors and regulatory authorities, including the jurisdictional National Company Law Tribunal, Regional Director, Ministry of Corporate Affairs and the Registrar of Companies, as may be applicable.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. As per the provisions of Section 136 of the Companies Act, 2013, the Company has also placed audited accounts of its Subsidiaries on its website.
PARTICULARS OF EMPLOYEES, DIRECTORS AND KEY MANAGERIAL PERSONNEL
The disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V, which forms an integral part of this Report. Further, in terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information will be made available for inspection through electronic mode by writing to the Company at [email protected] from the date of circulation of the AGM Notice till the date of the AGM.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in Annexure VI attached hereto and forms part of this Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
BirlaNu strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic
performance to ensure business continuity and sustainable growth.
In terms of Regulation 34(2)(f) of the SEBI Listing Regulations, Business Responsibility and Sustainability Report (âBRSRâ) of the Company for the financial year ended March 31, 2025 forms part of this Annual Report and is set out as a separate section.
EMPLOYEE STOCK OPTIONS
During the financial year 2024-25, no stock options were granted under the HIL Limited Employee Stock Option Scheme 2019 and HIL Limited Employee Stock Option Scheme 2023 (âSchemesâ). The relevant disclosure under Section 62 of the Companies Act, 2013 read with Rules made thereunder and Regulation 14 of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI (SBEB&SE) Regulations, 2021) as of March 31, 2025, is available on the website of the Company and can be accessed through the web link https://cms.birlanu.com/public/media/2025/04/14/ esop-certification-2024-25.pdf.
The Board of Directors at its meeting held on May 17, 2025 proposed amendment in the HIL Limited Employee Stock Option Scheme 2019 to amend the existing restrictive definition of âEligible Employeesâ with the objective of extending the benefit of the Scheme to a wider pool of current and future employees including other consequential and cosmetic changes subject to approval of members at the ensuing AGM. Accordingly, necessary resolution has been included for approval of the members by way of a special resolution at item no. 6 of the notice annexed with this Annual Report.
A certificate from M/s. Ranjeet Pandey & Associates, Company Secretaries, Secretarial Auditor of the Company confirming that the Schemes have been implemented in accordance with the SEBI (SBEB&SE) Regulations, 2021 would be placed at the ensuing Annual General Meeting of the Company for inspection by the shareholders.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year March 31, 2025 to which the financial statements relate and the date of signing of this report.
During the year, there is no application made or any proceeding pending on the Company, under the Insolvency and Bankruptcy Code, 2016.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
The Board of Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to the below items during the year under review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Issue of sweat equity shares.
c. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
The Board of Directors take this opportunity to thank all the stakeholders of the Company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support in future. The Board of Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their dedication and commitment towards the Company.
Mar 31, 2024
The Board of Directors are pleased to present the 77th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended March 31,2024.
SUMMARY OF FINANCIAL PERFORMANCE
The financial performance of the Company for the financial year ended March 31,2024 is summarised below:
|
(Rs. in Crore) |
||||
|
Particulars |
Standalone |
Consolidated |
||
|
2023-24 |
2022-23 |
2023-24 |
2022-23 |
|
|
Total Income |
2,266.76 |
2,187.73 |
3,404.80 |
3,504.30 |
|
Earnings before Interest, Depreciation, Amortization & Tax |
174.53 |
228.37 |
154.28 |
248.26 |
|
Less : Interest |
10.75 |
6.63 |
35.35 |
19.57 |
|
Depreciation & Amortization |
67.96 |
58.06 |
120.01 |
110.77 |
|
Profit before Tax and Exceptional items |
95.82 |
163.68 |
(1.09) |
117.92 |
|
Add/(Less): Exceptional items / Profit / Income from JV |
37.21 |
- |
36.63 |
(1.19) |
|
Profit before tax for the year |
133.03 |
163.68 |
35.54 |
116.73 |
|
Less: Taxes |
30.05 |
33.58 |
0.76 |
19.62 |
|
Profit after tax for the year |
102.98 |
130.10 |
34.78 |
97.10 |
|
Other Comprehensive Income (Net of tax) |
(0.14) |
0.88 |
0.66 |
27.15 |
|
Total Comprehensive Income for the year |
102.84 |
130.98 |
35.44 |
124.25 |
|
Basic Earnings Per Share (H) |
136.59 |
172.95 |
46.15 |
129.09 |
|
Diluted Earnings Per Share (H) |
136.59 |
172.91 |
46.15 |
129.06 |
HIL achieved a net revenue from operations of H 2,230.85 crore as against H 2,155.20 crore in the previous year on standalone basis, an increase of 3.5% and on consolidated basis registered a net revenue from operation of H 3,374.97 crore as against H 3,478.96 crore in the previous year recording a marginal decline of 3%.
With the addition of new capacities and introduction of new products, the Company anticipates a positive growth momentum in the coming year.
Interest cost for the financial year 2023-24 has increased to H 10.75 crore on a standalone basis as against H 6.63 crore during the previous year. On consolidated basis, interest cost for the financial year 2023-24 stood at H 35.35 crore as against H 19.57 crore in the previous year.
The increase in interest cost is on account of increase in borrowings for working capital requirements and also on account of significant increase in borrowing cost.
As on March 31,2024, the Company has outstanding borrowings of H 313.10 crore on standalone basis and H 547.82 crore on
consolidated basis. The debt equity ratio on consolidated basis stood at 0.44 times as of March 31,2024 as against 0.33 times as of March 31,2023.
During the year under review, HIL registered profit before tax (PBT) of H 95.82 crore before profit from exceptional items, on standalone basis as against H 163.68 crore in the previous year, recording a decline of 41% mainly due to pricing pressure emanating from intensifying competition in all categories and increase in cost of raw material viz. fibre, cement and volatility in resin prices.
Profit before tax on a consolidated basis for the financial year 2023-24 stood at H 35.54 crore as against H 116.73 crore in the previous year, recording a decline of 70% due to poor market demand.
On a consolidated basis, the net worth of the Company as at March 31,2024 stood at H 1,253 crore as against H 1,244 crore in the previous year.
The consolidated earnings per share (basic) for the financial year ended March 31,2024 stood at H 46.15 per share as against H 129.09 per share for the financial year ended March 31,2023.
HIL is committed to become one of the most admired Home and Building brands globally and drives strong value building growth. The India business delivered steady performance with volume growth across most categories; however, pricing pressure resulted in subdued revenue growth. The Roofing Solutions business continued to scale new heights and delivered highest ever volume with its market share improving further. The revenue for Building Solutions business grew steadily; however, its profitability was impacted due to pricing pressures. The profitability of the Polymer Solutions business improved significantly in FY24 compared to last year due to improved operational efficiencies, recipe optimization and lower RM costs.
During the year, HIL built strong momentum towards growth and acquisition of Crestia Polytech Private Limited and its group companies in Pipes & Fittings business was a key milestone. During the year, the Company also took significant steps in building an organization for future by rejuvenating the leadership team, moving towards a digital-led way of working and building a culture of excellence.
Despite material scarcity, geopolitical instability, and moderate demand, the Company''s sales remained robust. The Company achieved 4% growth in India by expanding into new markets and strengthening institutional sales.
The severity of challenges was far more in the European context where PARADOR had faced inflationary pressures on raw material prices as well as increase in energy costs and sea freight. Despite these challenges, the Company with all concerted efforts, has limited the revenue impact to 14%.
The Charminar brand, that carries a 75 years legacy of trust, further increased its market share and premium positioning versus competition. The Company''s focus on micro market management has resulted in enhancing rural tehsil penetration and adding new dealers to the strong Charminar channel network. In FY24, we achieved both volume and realisation growth in an otherwise declining market through higher engagement with masons and fabricators, digital lead acquisition and strong brand activation across rural India.
The Company launched "Signature Club" program to increase share of wallet and maintain loyalty with key distributors. Further, various promotions were executed across select markets to increase off-takes thereby increasing market share.
The Company continues to adopt and deploy digital tools viz. Industry 4.0, TMS, SFA etc. across our plants and sales team to enhance efficiencies and productivity.
"Charminar" and "Charminar Fortune" brands continue to enjoy the trust of the customers backed by the Company''s enhanced customer-centric approach, unparalleled quality, superior after sales customer service and strategically positioned plants and depots to serve its customers effectively while optimising freight expenses.
Building Solutions business consists of "AAC Blocks", "Panels" and "Boards" which cater to various requirements of building industries, commercial spaces and infrastructure segments. Government''s thrust on infrastructure, health care and education segments helped us increase volumes over last year.
HIL aggressively focused on product specifications through the technical sales team to gain prestigious and high-value projects in the infrastructure, Government and health care segments. However, realisations in AAC Blocks remained challenging in West and South markets due to competition intensity.
HIL enhanced its brand presence across key infrastructure and industrial exhibitions to connect with key architects, engineers and developers. Strong digital lead acquisitions helped to specify "Birla Aerocon" brand across key projects.
HIL continued its approach as a comprehensive solutions provider in the building materials category by offering all relevant products under one roof thereby retaining and enhancing its customer base. To counter the challenges of increased input cost, the Company has focused on process efficiency and lean management principles in these factories to optimize costs.
This segment consists of "Pipes & Fittings" and "Wall Putty & Construction Chemicals" marketed under the brand name "BIRLA HIL". During FY24, Polymer Solutions segment significantly improved its performance on profitability through sustained efforts on driving cost efficiency in procurement and operations. Overall revenue performance in FY24 was modest largely on account of industry wide drop in prices in both Pipes & Fittings as well as Wall Putty business. HIL''s efforts were concentrated on expanding its distribution network, securing key project accounts with reputable builders and developers nationwide, and diversifying our product offerings. HIL remains committed to strengthening our relationships with influencers such as plumbers, painters and applicators, through targeted retail marketing initiatives to cultivate greater brand loyalty.
Birla HIL Pipes
Birla HIL Pipes offers a comprehensive range of plumbing solutions, including cPVC, uPVC, Column Pipes, SWR, Foamcore, Pressure & UGD Pipes and Fittings as well as Water Tanks conforming to relevant IS or ASTM specifications. In line with the Company''s commitment to product expansion, Foamcore was recently introduced, a multilayer pipe with outer and inner layers of conventional PVC and a middle layer of foamed PVC. Additionally, the Company launched a range of Silent Pipes & Fittings, certified by Fraunhofer IBP, Germany which designed for low-noise drainage applications, particularly suited for commercial projects.
in a significant move to bolster our Pipes & Fittings business in April 2024, HIL acquired Crestia Polytech Private Limited and its four group companies under the brand ''Topline'', a renowned brand of Pipes & Fittings in Eastern India. With the complementary portfolio of products, channels, and market footprint, this acquisition will not only double HIL''s revenue of Pipes & Fittings business but also immediately enhances production capacity three-fold, especially in the strategically important Eastern region.
in FY24, BIRLA HIL Pipes achieved a volume growth of 12% over last year, driven by targeted distribution expansion efforts in the retail segment, as well as a focused approach to technical sales in the institutional segment, particularly within marquee residential projects nationwide. To strengthen the growth focus in this strategic segment, an exclusive sales organisation for Pipes & Fittings was created during the year. During FY24, Birla HIL cPVC Pipes and Fittings received recognition from Confederation of Indian Industry and were awarded the prestigious GreenPro Ecolabel, underscoring our commitment towards sustainability. Additionally, product barcoding and WMS was implemented in Company''s Faridabad plant to enhance operational and supply chain efficiency.
Birla HIL Putty and Construction Chemicals
With superior quality, BIRLA HIL putty has created a strong and loyal customer base. BIRLA HIL wall putty is made with cutting-edge "TRUE COLOUR" technology, is effective on all types of cementitious surfaces. Furthermore, the introduction of Birla HIL waterproof putty, engineered for superior performance, demonstrates our commitment to innovation and customer satisfaction. Construction Chemicals segment, offers a diverse range of solutions with a focus on walling construction chemicals and tiling construction chemicals.
The Company is committed to the segment''s growth, with a strong management focus and dedicated sales teams for Putty & Construction Chemicals business. HIL now has a PAN India presence with a robust distribution network with the expansion in East & South during FY24. Notably, we commenced in-house production at Jhajjar for Tile Adhesives in FY24, achieving a remarkable growth. HIL continues to drive strong engagement program with channel partners and influencers via various on ground workshops and meets demonstrating the wide range of product lines and application procedures.
The interiors markets continued to be strongly influenced by the uncertainties coming out of the global pandemic as demand remained soft in many of the major building markets across the world. These headwinds have been accentuated by a strong inflationary environment and disruptions in supply chain for both raw materials and finished goods. Interest rate fluctuations and market uncertainties impacted both large scale investments in the construction and real estate sectors and day to day consumer demand.
However, the outlook is cautiously optimistic as inflation rates are coming down, and the larger consumption markets of Central Europe and the United States are starting to stabilize versus the early parts of year 2023. Apart from certain areas in Eastern Europe and the Middle East, the supply chain and input costs are becoming more predictable, and we are better able to forecast for efficiencies.
Strategic investments, done over last year, to strengthen our frontline sales capability in focused markets, expand our areas of play to newer geographies (North America, Middle east amongst others) and to Commercial customers will be key drivers of topline growth in the upcoming financial year. At the same time, sustained focus on product innovation and quality and lean operations will ensure a return to profitability.
In recognition of HIL''s constant pursuit of excellence in energy efficiency, environmental protection, safety, growth and innovation, the Company has been honoured and recognised at various forums. The prominent awards earned during the financial year 2023 -24 are listed below:
Super Brand Award 2023
Super brands, a global organisation present in 90 countries recognises, showcases and pays tribute to the best brands in each country. It recognises the brand custodians'' persevering efforts to build brands that are strong on consumer perceptions. ''Super brand'' status strengthens a brand''s image, adds prestige and easily sets the brand apart from its competitors. This powerful endorsement provides evidence of brands'' exceptional status for existing and potential customers. "Charminar" and "Birla Aerocon" have been the recipients of this prestigious award this year as well.
The Economic Times Best Brands
"Charminar" and "Birla Aerocon" awarded as Best Brands 2023 by the Economic Times in Roofing Building Materials 2023. The Economic Times Best Brand is a research-based initiative that endeavours to ''highlight brands that have gained customers'' confidence, maintained their positions over a period, and sailed successfully through dynamic market challenges''. This is a testimony of our continued efforts to engage with our customers, where people increasingly believe in interacting with a brand, and the legacy of CK Birla Group makes it the best brand that is built around trust and its customer-centric approach.
Brand of the Year by Realty
"Charminar" and "Birla Aerocon" brands are honoured as Brand of the Year at 8th Realty INEX Interior & Exterior Conclave Excellence Awards 2024. This award is in recognition for exemplary performance and achievement, contribution to making a positive difference in the Indian real estate industry and outstanding leadership in the market. Realty is one of the oldest and most prestigious publications of the country in real estate segment.
''Brand of the Year - Wall Finishes'', ''Brand of the Year -Construction Chemicals'' for Birla HIL Putty and Construction Chemicals at 8th Realty INEX Awards 2023, realty industry awards and conclave. These Awards recognized BIRLA HIL Putty and Construction Chemicals for its ''exemplary performance and achievement'' and ''contribution to making a positive difference in the Indian real estate industry''. The event saw Indian and international architects and building product brand leaders joining to discuss the way forward for the design and construction industry.
Charminar and BIRLA HIL Pipes were adjudged as the ''Most Trusted Brands'' for 2024. These awards from Team Marksmen recognizes the trust and quality standards of Charminar roofing sheets and Birla HIL Pipes.
BIRLA HIL Pipes was awarded as ''Most Trusted Brands of India'' for 2024-25. Awarded on the basis of extensive market research, expert analysis and an attribute-based qualitative research approach, it is a distinctive recognition for the Company.
Sustainable Organisations 2023
HIL is recognised as Sustainable Organisations 2023 by The Economic Times for net zero initiatives.
Great Place to Work, 2024
HIL has been certified as a Great Place to Work for the sixth time in a row for the year 2024-25 with an outstanding trust index score of 94. The Company is ranked amongst:
- Great Place To Work®, India; re-certified from March 2024 to March 2025
- Top 25 | India''s Best Workplaces⢠in Manufacturing 2024
- Top 50 I Large India''s Best Workplaces Building a culture of Innovation by All 2024
- India''s Best Companies to Work for 2023: Top 50 - Ranked at 27
- Top 50 | India''s Best WorkplacesTM for Millennials, 2023
- Best in industry: Cement & Building Materials, 2023
The Great Place To Work Certifications are a testament to HIL''s commitment to positive and enriching employee experience. As we go forward, we work towards our shared vision of becoming one of most admired brands in the home and building segments.
During the year under review, the Board of Directors declared an interim dividend of H 15/- per equity share of H 10/- each (150% of the face value). The Directors are pleased to recommend a final dividend of H 22.50/- per equity share of H 10/- each (225% of the face value) for shareholders'' consideration and approval at the ensuing 77th Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year 2023-24 works out to be H 37.50/- per equity share (375% of the face value) as against the total dividend of H 45/- per equity share (450% of the face value) declared in the previous year.
As per Finance Bill 2020, dividend declared/paid after April 1, 2020 will be taxable in the hands of the shareholders. Shareholders are requested to visit https:// hil.in/wp-content/uploads/2020/02/FAQs-TDS-on-dividend-26-06-2020.pdf for FAQs on dividend tax.
The Register of Members and Share Transfer Books of the Company will remain closed from Wednesday, July 24, 2024 to Tuesday, July 30, 2024, both days inclusive, for determining the entitlement of the shareholders for the final dividend for the financial year ended March 31,2024.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI Listing Regulations"), the Board of Directors of the Company have adopted a Dividend Distribution Policy. The policy lays down a broad framework and factors which the Board would consider for deciding the distribution of dividend to its shareholders. The said policy is available on the Company''s website https://hil.in/investor-relations/policies/.
During the year under review, the Company has not transferred any amount to General Reserves.
The paid-up equity share capital as on March 31, 2024 was H 754.09 lakh divided in to 75,40,899 equity shares of H 10/- each. During the year under review, the Company has issued 3,336 equity shares of H 10/- each on exercise of options granted to one of the eligible employees under HIL Employees Stock Option Scheme 2019. Accordingly, the issued and paid up capital of the Company has increased by 3,336 equity shares of H 10/- each and further there was no other change in paid-up equity share capital of the Company.
The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. Annual listing fees for the year 2024-25 has been paid to these exchanges within the prescribed timelines. There was no suspension on equity shares of the Company during the financial year 2023-24.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A Report on Management Discussion and Analysis is appended to this report as per the requirements of SEBI Listing Regulations.
BOARD OF DIRECTORS, ITS COMMITTEES AND THEIR MEETINGS
HIL has a professional Board with an optimum combination of executive, non-executive and independent directors, including woman director, who bring to the table the right mix of knowledge, skill and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders.
As per the declarations received by the Company none of the Directors are disqualified under Section 164(2) and other applicable provisions of the Companies Act, 2013 ("the Act"). Certificate on non-disqualification as required under Regulation 34 of SEBI Listing Regulations is forming part of the Corporate Governance Report.
During the financial year, eight (8) meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Act and secretarial standards issued by the Institute of Company Secretaries of India (ICSI). The date(s) of the Board Meeting, attendance of the Directors is given in the Corporate Governance Report forming part of this annual report. The time-gap between any two consecutive meetings was within the period prescribed under the Act and SEBI Listing Regulations.
The Board has constituted the following five Committees:
1. Audit Committee
2. Nomination and Remuneration cum Compensation Committee
3. Stakeholders'' Relationship Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
The details of all the above Committees along with their terms of reference, composition, number of meetings and attendance at the meetings are provided in detail in the Corporate Governance Report annexed to this Board''s Report.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Mr. VV Ranganathan (DIN: 00060917) ceased to be an Independent Director of the Company with effect from March 19, 2024 upon completion of his term of 5 (five) years. The Board placed on record its sincere appreciation and gratitude for the guidance and valuable contribution by Mr. Ranganathan during his tenure as a member of the Board.
The Board of Directors at its meetings held on February 2, 2024 approved re-appointment of Dr. Arvind Sahay (DIN: 03218334) as an Independent Director of the Company, for
a second term of 5 (five) consecutive years commencing from February 8, 2024 up to February 7, 2029. In the said meeting, the Board also approved appointment of Mr. Sunil Ramakant Bhumralkar (DIN: 00177658) as an Additional Director of the Company, designated as an Independent Director with effect from March 18, 2024, not liable to retire by rotation.
Further, the Board of Directors at its meeting held on March 28, 2024 approved appointment of Ms. Nidhi Jagat Killawala (DIN: 05182060) as an Additional Director of the Company, designated as an Independent Director with effect from April 1,2024, not liable to retire by rotation and appointment of Ms. Amita Birla (DIN: 00837718) as an Additional Non-Executive Director of the Company with effect from April 1,2024, liable to retire by rotation.
The aforesaid re-appointment/appointment of Directors were recommended by the Nomination and Remuneration cum Compensation Committee and were approved by the Board subject to approval of shareholders.
Subsequent to the above said re-appointment and appointments, the Company approached shareholders for their approvals under the relevant provisions of the Companies Act, 2013 read with SEBI Listing Regulations, by way of Postal Ballot Notice dated March 28, 2024 and accordingly the appropriate resolutions for (i) re-appointment of Dr. Arvind Sahay as an Independent Director; (ii) appointment of Mr. Sunil Ramakant Bhumralkar and Ms. Nidhi Jagat Killawala as Independent Directors; and (iii) appointment of Ms. Amita Birla as a Non-executive Director of the Company were approved by the shareholders on May 2, 2024. Voting results of the said Postal Ballot (remote e-voting) have been declared on May 3, 2024 and informed to the Stock Exchanges.
Ms. Gauri Rasgotra (DIN: 06862334) ceased to be an Independent Director of the Company with effect from May 8, 2024 upon completion of her 10 (ten) years term. The Board placed on record its sincere appreciation and gratitude for the guidance and valuable contribution by Ms. Gauri Rasgotra during her tenure as a member of the Board. Consequent to which, the Board of Directors in its meeting held on May 7, 2024, based on the recommendation of the Nomination and Remuneration cum Compensation Committee approved appointment of Prof. Janat Shah (DIN: 01625535), as an Additional Director of the Company, designated as an Independent Director with effect from May 7, 2024, not liable to retire by rotation subject to approval of shareholders at the ensuing Annual/General Meeting of the Company.
In accordance with provisions of Section 152 of the Act and pursuant to Articles of Association of the Company, Mr. CK Birla (DIN: 00118473) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The brief details with respect to appointment of Mr. CK Birla and Prof. Janat Shah, as required to be disclosed in
accordance with Regulation 36 of SEBI Listing Regulations, Companies Act, 2013 and Secretarial Standards are included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.
During the year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and commission, as applicable, received by them.
In terms of Regulation 25(8) of the SEBI Listing Regulations, Independent Directors have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based upon declarations received from Independent Directors, the Board of Directors have confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are independent of the management.
Further, in the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs. Independent Directors are not subject to retire by rotation. The Independent Directors have also confirmed that they have complied with the Company''s Code of Conduct for Board members and Senior Management and Codes under SEBI (Prohibition of Insider Trading) Regulations, 2015.
During the year under review, Mr. Saikat Mukhopadhyay, Chief Financial Officer (CFO) and Key Managerial Personnel (KMP) resigned with effect from the close of business hours on July 23, 2023. Mr. Ajay Madhusudan Kapadia, Vice President -Finance & Accounts of the Company, was appointed as CFO and KMP of the Company with effect from July 24, 2023.
Mr. Mahesh Thakar, Head - Legal, Company Secretary and Compliance Officer (ACS - 23137) of the Company resigned from the office of Company Secretary and Key Managerial Personnel with effect from January 28, 2023. Mr. Ajay Kapadia, Vice President - Finance & Accounts was appointed as the Compliance Officer of the Company with effect from January 28, 2023 till July 15, 2023. The Board of Directors, on the recommendation of Nomination and Remuneration cum Compensation Committee, approved the appointment of Mr. Kamal Saboo, Head- Legal of the Company and also an associate member of the Institute of Company Secretaries of India (ACS - 20902) as the Company Secretary, KMP and Compliance officer of the Company effective July 15, 2023, till the appointment of the new incumbent to ensure adherence to the regulatory compliances. He continued to hold the
said office up to the close of business hours on September 1, 2023. Thereafter, on the recommendation of Nomination and Remuneration cum Compensation Committee, the Board of Directors approved the appointment of Ms. Nidhi Bisaria, (FCS 5634) as the Company Secretary, KMP and Compliance officer of the Company with effect from September 2, 2023.
During the financial year 2023-24, the overall managerial remuneration paid/ payable to Mr. Akshat Seth, Managing Director & CEO exceeds the limits stipulated under the provisions of section 197 of the Act, i.e., 5% of the net profits of the Company, calculated as per Section 198 of the Act. The Board in its meeting held on May 7, 2024 has proposed to increase limit of the managerial remuneration in excess of 5% of the net profits of the Company, calculated as per Section 198 of the Act, up to a limit of 8% of the net profits of the Company, for the financial year 2023-24, subject to approval of shareholders. Accordingly, necessary resolution seeking shareholders'' approval by way of special resolution pursuant to the provisions of section 197 read with Schedule V of the Act has been included in the Notice of 77th Annual General Meeting.
In terms of provisions of section 203 of the Act, following were the KMPs of the Company as on March 31,2024:
i. Mr. Akshat Seth, Managing Director & CEO
ii. Mr. Ajay Madhusudan Kapadia, Chief Financial Officer
iii. Ms. Nidhi Bisaria, Company Secretary and Compliance Officer
Pursuant to the provisions of the Act and SEBI Listing Regulations, a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors is conducted. Structured forms covering evaluation of the Board, the Committees of the Board, the Chairperson, Independent Directors and Non-Independent Directors are devised for evaluation by all the Directors. Each Director rate against various criteria such as composition of the Board, receipt of regular inputs and information, functioning, performance and structure of the Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at the Board meetings, leadership, etc.
The Board reviews the key skills/ expertise/competence of the Board of Directors, so that the Board of Directors comprises of a diverse and multidisciplinary group of professionals with requisite skills/expertise/competence who can contribute towards providing strategic direction to the Company''s management upholding the highest standards of Corporate Governance.
Further, as per the SEBI Listing Regulations, the following is the matrix of skills and competencies on which all the Directors are evaluated:
? Governance and Board service
? Business Understanding
? Risk/Legal/Regulatory Compliance
? information Technology/ Accounting/Financial Experience
? industry/Sector Knowledge
? Strategy development and implementation
in a separate meeting of independent Directors, performance of Non-independent Directors (NEDs), the Board as a whole and the Chairman of the Company was evaluated. The performance evaluation of independent Directors was done by the entire Board, excluding the independent Director being evaluated. The evaluation was carried out in terms of the Nomination, Remuneration & Evaluation Policy of the Company. The Nomination and Remuneration cum Compensation Committee of the Company annually reviews the performance evaluation process.
The evaluation process confirms that the Board and its Committees continue to operate effectively and that the performance of the Directors meets expectations.
FAMILIARISATION PROGRAM FORINDEPENDENT DIRECTORS
in addition to giving a formal appointment letter to the newly appointed independent Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Companies Act, 2013 and relevant Regulations of SEBi Listing Regulations are given and explained to a new Director.
Pursuant to Regulation 25(7) of SEBi Listing Regulations, conducting familiarization programmes for the independent Directors in the Company is a continuous process, whereby Directors are informed, either through presentations at the Board or the Committee meetings, board notes, interactions or otherwise about industry outlook, business operations, future strategies, business plans, competitors, market positions, products and new launches, internal and operational controls over financial reporting, budgets, analysis on the operations of the Company, etc.
Pursuant to Regulation 46 of SEBi Listing Regulations, the details required are available on the Company''s website https:// hN.in/wp-content/uploads/2024/04/Familiarization-Program-for-IDs-dt-31032024_26042024.pdf.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Company endeavours to have an appropriate mix of executive, non-executive and independent directors to maintain independence from management and who continuously provide guidance on appropriate governance. The selection and appointment of Board members are done on the recommendations of the Nomination and Remuneration cum Compensation Committee. The appointments are based on meritocracy and having due regard for diversity. While
evaluating the candidature of an independent director, the Committee abides by the criteria for determining independence as stipulated under the Companies Act, 2013 and the SEBi Listing Regulations. in case of re-appointment of directors, the Board takes into consideration the results of the performance evaluation of the directors.
The Nomination, Remuneration & Evaluation Policy for Directors, Key Managerial Personnel and Senior Management is placed on the website of the Company and can be accessed through the web link https://hil.in/wp-content/uploads/2019/05/Nomination-Remuneration-Evaluation-Policy.pdf.
The objective of the Company''s remuneration policy is to attract, motivate and retain qualified and expert individuals that the Company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognizing the interests of the Company''s stakeholders.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted a CSR Committee and has a well-defined policy on CSR as per the requirement of Section 135 of the Companies Act, 2013, which covers the activities as prescribed under Schedule Vii of the Companies Act,
2013. The details about the CSR Committee are provided in the Corporate Governance Report, which forms part of this Report.
During the financial year 2023-24, the Company was required to spend H 388.41 lakh, i.e., 2% of average of the net profits of last three financial years, on CSR activities and the actual CSR spent during the financial year 2023-24 was H 406.50 lakh. Accordingly, the excess CSR spend of H 18.09 lakh is carried forward for set off against the CSR obligation of the Company up to succeeding three financial years, i.e., up to financial year 2026-27. The Annual Report on CSR Activities, pursuant to Section 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules,
2014, forms part of this Report as Annexure I.
The CSR policy of the Company is placed on the Company''s website and can be accessed through the web link: https:// chat.google.com/dm/85GNOMAAAAE/jKtFYU9gyTs/ jKtFYU9gyTs?cls=10df.
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company for the financial year 2023-24 can be accessed through the web link on the Company''s website https://hil.in/wp-content/uploads/2024/05/HIL-Form_ MGT_7-dt-31-03-2024-pdf.pdf
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in financial statements, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time and to the best of their knowledge and information furnished, the Board of Directors state that:
I. In preparation of the Annual Accounts for the financial year ended March 31,2024, all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.
II. They have adopted 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 the financial year ended March 31,2024.
III. They have 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 Annual Accounts for the financial year ended March 31,2024 have been prepared on a going concern basis.
V. Proper internal financial controls were in place and that the financial controls were adequate and operating effectively.
VI. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
The Company has constituted a Risk Management Committee of the Board to review the enterprise risk management plan/ process of the Company. The Risk Management Committee identifies potential risks, assesses their potential impact and develops strategies to mitigate the risks. Periodic follow-ups to monitor the status of strategies/actions initiated to mitigate the risks is also conducted.
The Company has a Risk Management Policy which has been approved by the Board. The Risk Management Policy acts as an overarching statement of intent and establishes the guiding principles by which risks are identified, assessed and mitigated across the organization. The Board reviews the risks associated with the enterprise periodically and oversees the implementation of various aspects of the Risk Management Policy through a duly constituted Risk Management Committee (RMC). The RMC assists Audit Committee/ the
Board in its oversight of the Company''s management of key risks, including strategic and operational risks, as well as the guidelines, policies and processes for monitoring and mitigating such risks under the aegis of the overall Business Risk Management Framework.
There are no risks identified by the Board which may threaten the existence of the Company. Please refer detailed section on risk management covered in the Management Discussion and Analysis Report which is an integral part of this report.
The details about composition of the Risk Management Committee and its meetings, attendance is provided in Corporate Governance Report which forms part of this Report.
Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed report on Corporate Governance forms an integral part of this Annual Report and is set out as a separate section.
The certificate of M/s B S R and Co, (ICAI Firm Registration Number 128510W), Chartered Accountants, the Statutory Auditors of the Company, certifying compliance with the conditions of corporate governance as stipulated in the SEBI Listing Regulations is annexed with the Report on Corporate Governance. The Auditors'' certificate for the financial year 2023-24 does not contain any qualification, reservation or adverse remark.
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
The Company has in place a robust vigil mechanism through a Whistle Blower Policy to deal with instances of illegal practices, unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct and Ethics Policy.
Adequate safeguards are provided against victimization to those who take recourse to the mechanism. The details of the Whistle Blower Policy are explained in the Corporate Governance Report. The Whistle Blower Policy is available on the Company''s website and can be accessed through the web link https://hii.in/wp-content/upioads/2019/07/HIL-WHISTLE-BLOWER-POLICY-REVISED-19-03-19.pdf.
The complaints received under Whistle Blower Policy are investigated thoroughly and detailed update including action taken, if any, on the same are presented to the Audit Committee and Statutory Auditors of the Company. There was one complaint received during the financial year 202324 and one complaint was carried forward from the previous financial year, both the complaints have been resolved during the financial year 2023-24 with appropriate action.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Prevention of Sexual Harassment at Workplace Act, 2013 and the Rules thereunder. The Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment.
The details of the number of cases filed under sexual harassment and their disposal, during the financial year 2023-24 is as under:
|
Number of cases pending as on the beginning of the financial year |
Nil |
|
Number of complaints filed during the financial year |
Nil |
|
Number of casespending as on the end of the financial year |
Nil |
|
Number of workshops |
The Company regularly conducts |
|
or awareness programs |
necessary awareness programs |
|
against sexual harassment |
for its employees and all |
|
carried out |
employees are provided detailed education during the induction. |
|
Nature of action taken by the employer or district officer |
Not Applicable |
In line with the requirements of the Act and SEBI Listing Regulations, as amended from time to time, the Company has formulated a Policy on Related Party Transactions (''RPT Policy'') for identifying, reviewing, approving and monitoring of Related Party Transactions and the Company''s policy relating to dealing with Related Party Transactions is uploaded on the website of the Company and can be accessed through the web link: https://hil.in/wp-content/uploads/2023/02/Policy-on-Related-Party-Transactions-2022-for-website-1.pdf.
All related party transactions were at arm''s length basis and in the ordinary course of business. All the related party transactions were reviewed and approved by the Audit Committee/ Board, as may be applicable. With a view to ensure continuity of day-to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arm''s length basis, from the Audit Committee/Board. A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted is placed before the Audit Committee on a quarterly basis for its review.
During the year under review, the Company entered into two material related party transactions i.e. payment of
remuneration and grant of long term incentive as per the HIL Limited Long Term Cash Incentive Plan 2023 to Ms. Avanti Birla, a related party within the definition of Section 2(76) of the Act, occupying the office or place of profit in the Company and the same are approved by the Audit Committee, the Board and the shareholders at their respective meetings as required under the provisions of Regulation 23 and other applicable provisions, if any, of the SEBI Listing Regulations read with section 177 and 188 and other applicable provisions, if any, of the Companies Act, 2013. Accordingly, the disclosure of the said related party transaction as required under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is made in Form AOC-2 annexed to this Report as Annexure - II.
In terms of Regulation 23 of SEBI Listing Regulations, the Company submits details of related party transactions as per the specified format to the stock exchanges on a half-yearly basis.
INTERNAL FINANCIAL CONTROLS AND ITS ADEQUACY
The Company has put in place adequate internal financial control procedures commensurate with its size, complexity and nature of business. The Company has identified and documented all key financial controls, which impact the financial statements as part of its Standard Operating Procedures. The financial controls are tested for operating effectiveness through ongoing monitoring and review process by the management and also independently by the Internal Auditor during the audit reviews. Where weaknesses are identified as a result of the reviews, new procedures are put in place to strengthen controls and these are in turn reviewed at regular intervals.
Further, HIL continues to remain vigilant on the evolving cybersecurity threat landscape. In our endeavour to maintain a robust cybersecurity posture, the team has remained abreast of emerging cybersecurity events, so as to achieve higher compliance and its continued sustenance. Our ongoing commitment to leveraging technology remains steadfast with a focus on delivering value and creating a future ready organization. We continue to be certified against the Information Security Management System (ISMS) Standard ISO 27001-2013. During the year, our focus was on cybersecurity personnel training, reskilling and building a security culture of collective onus.
Based on the review, nothing has come to the attention of the Directors to indicate that any material breakdown in the function of these controls, procedures or systems occurred during the year.
M/s. B S R and Co, Chartered Accountants (FRN - 128510W) have been appointed as Statutory Auditors of the Company
for a period of five years i.e. from conclusion of 75th Annual General Meeting (AGM), held on July 29, 2022, till the conclusion of the 80th Annual General Meeting of the Company to be held in year 2027 under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder.
The Auditors'' Report for the financial year 2023-24 does not contain any reservation, qualification or adverse remark, on the financial statements of the Company. Auditors'' Report is self-explanatory and therefore, does not require further comments and explanation.
Further, in terms of section 143 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, notifications / circulars issued by the Ministry of Corporate Affairs from time to time, no fraud has been reported by the Auditors of the Company where they have reason to believe that an offence involving fraud is being or has been committed against the Company by officers or employees of the Company.
The Company has an effective fulltime in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports to the Audit Committee and the Managing Director about the adequacy and effectiveness of the internal control systems of the Company as well as the periodical results of its review of the Company''s operations as per an approved internal audit plan duly approved by the Audit Committee. The in-house internal audit team works in tandem with M/s. Ernst and Young, LLP, whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan approved by the Audit Committee. Together they provide a robust framework.
The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures were also presented periodically to the Audit Committee.
During the year under review, the Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, re-appointed M/s. S.S. Zanwar & Associates, (Firm Registration No. 100283), as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31,2025 at a remuneration of H 8 Lakh (Rupees Eight lakh only) plus out of pocket
reimbursements. The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the Company has been set out in the Notice of ensuing AGM. The Cost Auditor has certified that their appointment is within the limits as prescribed under Section 141(3)(g) of the Act and that they are not disqualified from such appointment within the meaning of the said Act.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder and Regulation 24A of SEBI Listing Regulations, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. Ranjeet Pandey & Associates, Company Secretaries to undertake the secretarial audit of the Company for the financial year ending March 31,2025. Pursuant to Section 139 and 141 of the Act and relevant Rules prescribed thereunder, the Company has received a certificate from the Secretarial Auditors, inter alia, confirming that their appointment is within the limits laid down by the Act and rules made thereunder. Further, as per their declaration, they are not disqualified for being appointed as Secretarial Auditors under the provisions of applicable laws and also that there are no pending proceedings against them involving matters of professional misconduct.
The Secretarial Audit Report issued by M/s. Ranjeet Pandey & Associates, Company Secretaries for the financial year ended March 31,2024 is given in Annexure III attached hereto and forms part of this report. The report does not contain any qualifications, reservations or adverse remarks.
The Company has undertaken an audit for the financial year 2023-24 for all the applicable compliances under various regulations, circulars and notifications issued by the Securities and Exchange Board of India ("SEBI") and accordingly received Annual Secretarial Compliance Report from M/s. Ranjeet Pandey & Associates, Company Secretaries in terms of the SEBI Circular dated February 8, 2019 without any observations or comments and a copy of the same has been submitted to the Stock Exchanges within the prescribed time limit.
During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of loans, guarantees /security provided and inter-corporate investments made during the financial year ended March 31, 2024 forms part of notes to the financial statements of the Company for the financial year 2023-24 at note no. 7, 9 and 38.
Subsequent to March 31, 2024, the Company acquired 35,53,000 equity shares of Crestia Polytech Private Limited
("Crestia") of H 10/- each by subscribing to the private placement offered by Crestia at an aggregate consideration of H 69.99 crore. Further, the Company acquired 44,90,000 equity shares of H 10/- each from the existing shareholders of Crestia, thereby making it a wholly owned subsidiary of the Company with effect from April 5, 2024 at an aggregate consideration of H 88.45 crore.
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31,2024.
SUBSIDIARIES AND JOINT VENTURES
The following are the details of subsidiaries and joint ventures of the Company as on March 31,2024:
|
S. No. |
Legal name of the entity |
Relationship |
Country of incorporation and Date |
Full address |
|||
|
1 |
HIL International |
Subsidiary (Wholly Owned |
Germany, |
Millenkamp 7-8, 48653 Coesfeld, |
|||
|
GmbH |
Subsidiary) |
03.07.2018 |
Germany |
||||
|
2 |
Parador Holding |
Step Down Subsidiary (WOS |
Germany, |
Millenkamp 7-8, 48653 Coesfeld, |
|||
|
GmbH |
to HIL International GmbH) |
20.06.2016 |
Germany |
||||
|
3 |
Parador GmbH |
Step Down Subsidiary (WOS |
Germany, |
Millenkamp 7-8, 48653 Coesfeld, |
|||
|
to Parador Holding GmbH) |
21.09.2015 |
Germany |
|||||
|
4 |
Parador |
Step Down Subsidiary (WOS |
Austria, |
Wiener Strasse 66, 7540 Gussing, Austria |
|||
|
Parkettwerke GmbH |
to Parador GmbH) |
10.04.1998 |
|||||
|
5 |
Parador (Shanghai) |
Equity Joint Venture (50%) |
Republic of China, |
Room 1006, Floor 10, No 233 Taicang |
|||
|
Trading Co., Ltd. |
of Parador GmbH and (50%) |
08.08.2018 |
Road, Huangpu District, Shanghai |
||||
|
Horgus Oriental Glamour |
Municipality, the People''s Republic of China |
||||||
|
Co., Ltd |
|||||||
|
6 |
Parador UK Limited |
Step Down Subsidiary (WOS |
England and |
C/o Rodl & Partner Legal Ltd 170 Edmund |
|||
|
to Parador GmbH) |
Wales, 13.07.2022 |
Street Ground Floor, Birmingham, United |
|||||
|
Kingdom B3 2HB |
|||||||
|
Subsequent to March 31,2024 and till the date of this Report, following entities have become the subsidiaries of the Company: |
|||||||
|
Country of |
|||||||
|
S. No. |
Legal name of the entity |
Relationship |
incorporation and |
Full address |
|||
|
Date |
|||||||
|
1 |
Crestia Polytech Private |
Wholly owned Subsidiary |
India 09.05.2013 |
1st Floor, Rani Plaza, Exhibition Road, |
|||
|
Limited |
Patna, Bihar, India, 800001 |
||||||
|
2 |
Topline Industries Private |
India 01.05.2020 |
Plot No. 101, Rani Plaza, 1st Floor, |
||||
|
Limited |
East Exhibition Road, Patna, Bihar, India, 800001 |
||||||
|
3 |
Aditya Polytechnic Private Limited |
Step Down Subsidiaries (WOS to Crestia Polytech |
India 08.04.2015 |
R, Flat No- 3A, B- Block Pushp Vihar, Exhibition Road, Patna, Bihar, India, 800001 |
|||
|
Private Limited) |
|||||||
|
4 |
Prabhu Sainath Polym |
ers |
India 15.03.2024 |
101, Rani Plaza Apartment, Exhibition |
|||
|
Private Limited (earlier |
Road, Chiraiyatand, Patna G.P.O., |
||||||
|
known as Sainath Polymers, |
Patna, Phulwari, Bihar, India, 800001 |
||||||
|
a partnership firm) |
|||||||
In compliance with the requirements of SEBI Listing Regulations the Company has appointed Dr. Arvind Sahay, Independent Director of the Company as a Director on the Board of HIL International GmbH, Germany (material wholly owned subsidiary).
Supercor Industries Limited
The Company holds 33% of the share capital in Supercor Industries Limited ("Supercor"), a company incorporated
under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold the remaining 67% of the share capital in Supercor.
During the year there was no significant development at Supercor Industries Limited. Supercor had already suspended its operations since the year 2016 due to cash flow crisis. The Company informed the Board of Supercor Industries Limited about its intention to sell its stake and has
not been participating in any of the discussions of the Board / Management for last five years. The interim Board set up by the Nigerian Government is not responsive and the Company is waiting to hear from the Board of Supercor for deciding further course of action. Accordingly, the Company has submitted an application to Reserve Bank of india (RBI) for suspension of UAN allotted towards the above said investment in Supercor and the same has been suspended by RBI.
in view of the above, the Company is not in a position to obtain any information/financials from the Joint Venture entity and hence the consolidated financial statements do not include the financial performance of Supercor industries Ltd.
As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/Associate Companies/Joint Ventures in Form AOC-1 is attached as Annexure IV to this report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared in accordance with indian Accounting Standards (ind AS) as per the Companies (indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. As per the provisions of Section 136 of the Companies Act, 2013, the Company has also placed audited accounts of its Subsidiaries on its website.
PARTICULARS OF EMPLOYEES, DIRECTORS AND KEY MANAGERIAL PERSONNEL
The disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V, which forms an integral part of this Report. Further, in terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said information will be made available for inspection through electronic mode by writing to the Company at [email protected] from the date of circulation of the AGM Notice till the date of the AGM.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013
read with the Companies (Accounts) Rules, 2014 are given in Annexure VI attached hereto and forms part of this report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
HIL strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and sustainable growth.
in terms of amendment to Regulation 34(2)(f) of the SEBI Listing Regulations, Business Responsibility and Sustainability Report ("BRSR") of the Company for the financial year ended March 31,2024 forms part of this Annual Report and is set out as a separate section.
EMPLOYEE STOCK OPTIONS
Pursuant to the approval by the shareholders dated April 4, 2023 through postal ballot, the Board (includes "Committee" thereof) was authorized to introduce, offer, issue and allot share-based incentives to eligible employees of the Company under "HIL Limited Employee Stock Options Scheme 2023" ("Scheme") and maximum number of shares under the said Scheme shall not exceed 1,31,868 equity shares of H 10/- each.
During the financial year 2023-24, on the recommendation of the Nomination and Remuneration cum Compensation Committee, the Board of Directors granted 65,656 stock options under the said Scheme to the eligible employees of the Company and issued award letters for the number of shares equivalent to the options granted to the eligible employees. The relevant disclosure under Section 62 of the Companies Act, 2013 read with Rules made thereunder and Regulation 14 of the Securities and Exchange Board of india (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI (SBEB&SE) Regulations, 2021) as of March 31,2024, has been uploaded on the website of the Company and can be accessed through the web link https:// hil.in/investor-relations/.
A certificate from M/s. Ranjeet Pandey & Associates, Company Secretaries, Secretarial Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBi (SBEB&SE) Regulations, 2021 would be placed at the ensuing Annual General Meeting of the Company for inspection by the shareholders.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
During the financial year, the Board of Directors approved acquisition of 100% equity share capital of Crestia Polytech Private Limited {"Crestia"} along with four other entities, namely, Topline Industries Private Limited, Aditya Polytechnic Private Limited, Sainath Polymers {upon conversion to private limited company} and Aditya Industries {upon conversion to private limited company} {"Crestia Group"} at an aggregate enterprise value of H 265 crore and other terms and conditions as agreed under the Share Subscription and Purchase Agreement {"SSPA"} {includes amendment{s} and addendum(s) thereof} executed on March 11,2024 between HIL, Crestia and shareholders of Crestia and Crestia Group, to strengthen the Company''s Pipes and Fittings business in Eastern India.
As per the terms of the said SSPA, the Company on April 5, 2024, acquired 100% of the equity paid-up share capital of Crestia, thereby making Crestia a wholly owned subsidiary of the Company with effect from April 5, 2024. Further, as per the said SSPA, Crestia entered in to Share Purchase Agreement {"SPA"} on April 5, 2024 with Topline Industries Private Limited, Aditya Polytechnic Private Limited, Prabhu Sainath Polymers Private Limited {formerly Sainath Polymers} and its existing shareholders and acquired 100% of the equity share capital of all three entities making them as wholly-owned subsidiaries of Crestia and step-down subsidiaries of HIL with effect from April 5, 2024. However, acquisition of Aditya Industries is yet to be completed as the conversion of said partnership firm into private limited company is under process and the same would be completed once the conversion has occurred.
Other than the developments mentioned above, there were no other material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year March 31,2024 to which the financial statements relate and the date of signing of this report.
During the year, there is no application made or any proceeding pending on the Company, under the Insolvency and Bankruptcy Code, 2016.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
The Board of Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise.
b. Issues of sweat equity shares.
c. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
The Board of Directors take this opportunity to thank all the stakeholders of the Company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support in future. The Board of Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their dedication and commitment towards the Company.
Mar 31, 2022
Your Directors take pleasure in presenting the 75th Annual Report along with Standalone and Consolidated Financial Statements for the year ended March 31, 2022. Your Company commits to a disciplined path of progression to redefine itself as a one stop end to end building solutions provider. On the business front Roofing Solutions business delivers highest Volume, Revenue and EBIDTA; the solution based approach driven by technical teams enables highest ever realisation levels in Building Solutions business and the Polymer Solutions business delivers 36% growth Y-o-Y for the second consecutive time. The European Flooring business produces consistent performance amidst severe head winds created by raw material availability and geo-political situation. Your Company has also decided to venture into a new business vertical of Construction Chemicals in the coming year, for which the test launches have already started.
Your Company''s initiative of "OneHIL'' a well-knit family value, has paid back immensely, infusing passion amogst the employees, driving busineeses to achieve good market shares in domain products, generating new ideas for cost savings, improving liquidity, cost optimization, effective customer connects through digital initiatives, monitoring newer opportunities, lean & productive operations: all delivering huge engagement & value for stakeholders. Close monitoring of business segments on a daily basis brought further harmony and impetus in converting and achieving every possible opportunity.
Your Company operates in competitive markets and recognizes the underlying challenges and accordingly stays agile in aligning its strategies and objectives to maintain market leadership by introducing new and innovative products and services which are eco-friendly. Optimum use of Digital initiatives, business intelligence tools and heat maps enables businesses to monitor and focus on greener pastures and newer opportunities with customers in Tier 2 & Tier 3 cities. During all our business endeavors, your Company has continued to stay close to the communities, investing through its CSR budget by supporting initiatives and Covid medical care.
HIL believes that the biggest assets is its committed and passionate employees. Continuous endeavour to keep them safe during Covid
pandemic, while proposing several people supported policies has been the prime focus. Corporate governance and ethical practices have been passionately driven with zero non-compliance across all locations and as a continuous process robust SOPs, work instructions have been modified to suit the purpose.
Amidst strong headwinds due to material unavailability / price volatility, sea freight explosion and a weak rural sentiments, your Company delivered the highest ever Profit Before Tax (PBT) overcoming all the challenges with grit and determination to succeed. Revenues remained buoyant with a good increase over previous year with stringent focus on new markets, expanding product base and getting the right product mix. Strategic market mapping and in-depth tabs on each region, ensured your Company on a growth trajectory and registered a 26% growth in India and 16% globally on its top line while maintaining its leadership position.
The severity of challenges was far more in the European context where PARADOR had faced huge scarcity of raw materials and doubling of key raw material costs. Other challenges like increase in energy costs and tripling of sea freight impacted the operations. Yet PARADOR registered growth in top line over last year. Our European team has taken determent effort towards augmenting multiple selling price escalations across product categories, entering long-term supply contracts with key dependable raw material suppliers, improving product mix and continuously working on cost base, which have all supported towards partially offsetting the impact of cost adversities. Further, towards the end of the year, the geopolitical crisis between Russia and Ukraine as well as the severe COVID spread in China have further impacted the availability of wood products, vinyl products, increased energy and freight costs. Relentless efforts are being made to mitigate these challenges too by innovative sourcing strategies to reduce dependency on Ukraine.
With the above brief synopsis, your Directors are pleased to present the financial performance of the Company, both on standalone and consolidated basis, for the year ended March 31, 2022:
|
Summary of Financial Results Particulars |
(H Crore) Standalone Consolidated |
|||
|
2021-22 |
2020-21* |
2021-22 |
2020-21* |
|
|
Total Income Earnings Before Interest, Depreciation and Amortisation & Tax Less : Interest Depreciation and Amortisation Profit Before Tax and Exceptional items Add/(Less): Exceptional items / Profit / Income from JV Profit before tax from operations Less : Taxes Profit for the year from operations Profit before tax on sale of discontinued operations |
2005.45 |
1596.45 |
3550.68 |
3066.19 |
|
306.63 |
260.26 |
421.85 |
428.09 |
|
|
4.51 |
18.69 |
12.61 |
2784 |
|
|
53.81 |
49.18 |
116.30 |
108.97 |
|
|
248.31 |
192.39 |
292.94 |
291.28 |
|
|
- |
- |
2.18 |
1.14 |
|
|
248.31 |
192.39 |
295.12 |
292.42 |
|
|
62.48 |
49.57 |
84.68 |
7760 |
|
|
185.83 |
142.82 |
210.44 |
214.82 |
|
|
- |
60.56 |
- |
60.56 |
|
|
(H Crore) |
||||
|
Particulars |
Standalone |
Consolidated |
||
|
2021-22 |
2020-21* |
2021-22 |
2020-21* |
|
|
Less: Taxes on profit on sale of discontinued operations |
- |
15.64 |
- |
15.64 |
|
Profit from sale of discontinued operation |
- |
44.92 |
- |
44.92 |
|
Total Profit before tax |
248.31 |
252.95 |
295.12 |
352.98 |
|
Less: Total taxes |
62.48 |
65.21 |
84.68 |
93.24 |
|
Total Profit for the year |
185.83 |
18774 |
210.44 |
259.74 |
|
Other Comprehensive Income - net of tax |
(0.39) |
0.08 |
(756) |
9.14 |
|
Total Comprehensive Income for the year from operations |
185.44 |
142.90 |
202.88 |
223.96 |
|
Total Comprehensive Income for the year |
185.44 |
18782 |
202.88 |
268.88 |
|
Basic Earnings Per Share (H) |
24773 |
250.74 |
280.54 |
346.89 |
|
Diluted Earnings Per Share (H) |
246.12 |
249.89 |
278.72 |
345.72 |
|
*the above mentioned financial numbers include income and profit generated from discontinued operations |
||||
Your Company achieved a net revenue from operations on standalone basis at H 1973.48 Crore as against H 1565.89 Crore in the previous year, an increase of 26% and on consolidated basis registered a net revenue from operation at H 3520.24 Crore against H 3043.57 Crore in the previous year recording a growth of 16%. This trajectory is expected to continue in the coming years as well. Various aggressive cost saving Initiatives and R&D interventions along with lean operational models have helped us to redefine our cost base thereby achieving better cost optimization; augmenting the growth of your Company in coming years.
Company''s Lead Generation & Management Portal, a one stop digital solution for all sales leads, augments leads from one business unit to the other, which in turn help the Company to service the customers at large across various class of cities. Further, enhancement of E-business portals and digital customer connects have made your company far more approachable and customer focused in this financial year.
During the year under review, interest cost significantly reduced to H 4.51 Crore on a standalone basis as against H 18.69 Crore during the previous year. Your Company has taken this opportunity to redefine the working capital norms and re-shape the cost structure for each business with a lean set up to run the business more efficiently. On a consolidated basis, interest cost for the financial year 2021-22 stood at H 12.61 Crore as against H 2784 Crore in the previous year.
Your Company has repaid during the year H 80.17 Crore to banks at standalone level in India and H 124.54 Crore to banks at consolidated level.The Debt Equity ratio on consolidated basis stood at 0.25 times as of March 31, 2022 against 0.41 times as of March 31, 2021.
During the year under review, your Company registered a standalone Profit BeforeTax (PBT) from operations of H 248.31 Crore as against H 191.61 Crore in the previous year, recording a growth of 30%. This could be achieved as a result of financial discipline, detailed planning and sharper focus on initiatives to boost market leadership, improve Net Sales Realizations and adopting solution / market specific models. These timely actions have benefited your
Company to deliver the best performing year in the history of HIL.
Profit before tax on a consolidated basis for the year 2021-22 stood at H 295.12 Crore as against H 291.64 Crore in the previous year, recording marginal growth.
On a consolidated basis, the Net Worth of your Company as at March 31, 2022 stood at H 1166.43 Crore as against H 995.27 Crore in the previous year.
The Consolidated earnings per share (basic) for the year ended March 31, 2022 stood at H 280.54 per share as against H 286.12 per share for the year ended March 31, 2021 and the book value per share as at March 31, 2022 was at H 1552/- as against H 1328/- as on March 31, 2021.
The credit ratings on Company''s long term has been upgraded during the year and short term facilities have been re-affirmed by the respective credit rating agencies and the same is furnished below:
|
Sl No |
Agency |
Type |
Rating |
|
1 |
ICRA |
Long Term - Credit Facilities |
''ICRA AA / Stable'' |
|
2 |
ICRA |
Short Term - Debt |
''ICRA A1 '' |
|
3 |
India Ratings |
Long Term - Term Loan |
''IND AA / Stable'' |
During the year under review, the Board of Directors declared an interim dividend of H 20/- per equity share of H 10/- each (200% of the paid-up value). Your Directors are pleased to recommend a final dividend of H 25/- per equity share of H 10/- each (250% of the paid-up value) and an additional final dividend of H 20/- per equity share of H 10/- each (200% of the paid-up value) to commemorate the celebration of Platinum Jubilee on completion of Seventy Five (75) years of incorporation for your consideration and approval at the ensuing 75th Annual General Meeting of the Company.
With the proposed final dividends, the total dividend for the year 2021-22 works out to be H 65/- per equity share (650% of the paid-up value) as against the total dividend of H 40/- per equity share (400% of the paid-up value) declared in the previous year.
As per Finance Bill 2020, dividend declared / paid after 1st April 2020 will be taxable in the hands of the shareholders. Shareholders are requested to visit www.hil.in/investor-relations for the FAQs on the dividend tax.
The total dividend for the financial year is H 48.84 Crore and the Company has transferred H 10.00 Crore to the General Reserves out of the profits for the year.
The Register of Members and Share Transfer Books of the Company will remain closed from Saturday, July 23, 2022 to Friday, July 29, 2022, both days inclusive, for determining the entitlement of the shareholders for the final dividend for the financial year ended March 31, 2022 and for annual book closure.
The Record Date for payment of final dividend is Friday, July 22, 2022 for determining the entitlement of members for final dividend for the financial year 2021-22.
Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("Listing Regulations"), the Board of Directors of your Company have adopted a Dividend Distribution Policy. The policy lays down a broad framework and factors which the Board would consider for deciding the distribution of dividend to its shareholders. The said policy is available on the Company''s website https://hil.in/investor-relations/ policies/
The paid-up Equity Share Capital as on March 31, 2022 was H 754.11 Lacs. During the year under review, the Company has issued 21360 equity shares on exercise of options by an eligible employee and there are no shares with differential voting rights, nor sweat equity issued by the Company.
The Equity Shares of the Company are listed on National Stock Exchange India Limited and BSE Limited. The annual listing fees for the year 2021-22 has been paid to these exchanges.
During the year 2022, the Issued and Listed Capital of the Company has increased due to allotment of equity shares to eligible employee on exercise of options under HIL Employee Stock Option Scheme, 2015.
Your Company has with grit and resilience overcome the challenges during the last year however, while the committed workforce has well aligned itself with the new business norms, the key focus of the Company remains to be Employee Health and Safety while ensuring profitable growth.
Your Company institutionalised "Six Sigma" "Lean Management Systems" "Learning Management Tool" across its manufacturing units and other key enabling functions which has helped to achieve operational excellence and supported the initiative of our continuing efforts in driving the costs effectively.
Your Company''s in-house initiative " Nayi Disha" an Idea Management Platform enabling employees to share their ideas for cost optimization and growth of the business, has seen a qualitative response from the employees registering 1572 ideas from them. This platform is extensively utilized to harness employee involvement towards new idea generation and cost reduction.
Your Company has enhanced its market leadership position in this business backed by its loyal customers and retailers. Along with your Company''s strong brand presence across rural India and focus on new dealer/sub-dealer recruitment and engagement activities, Digital Connect and âCash is King'' approach has yielded a good outcome for the Company and helped to boost sales while improving net sales realizations.
To cater to the rural demand in the first quarter, we focused on inventory & logistics planning and worked out aggressive dealer wise targets, which helped gain exceptional market share in Q1. Despite the pandemic challenges, the last leg connects with our channel partners backed by firm commitment and passion of all our employees across functions have made FY22 the most successful year in the history of your company.
Our aggressive counter acquisition drive saw us achieve 1000 new counters during the year, enabling the roofing business to register an impressive double-digit growth in volume terms over the previous year. Your Company is confident to further consolidate its leadership position in this industry.
"Charminar" and "Charminar Fortune" brands continue to enjoy the trust of the customers backed by your Company''s enhanced Customer-centric approach, unparalleled quality, enhanced after sales customer service, deep routed supply chain network and widely spread depots and dealer network. This has helped the Company to mitigate the headwinds faced in the industry with ease.
Building Solutions business consists of Wet Walling and Dry Walling solutions, which cater to various requirements of building industries/commercial spaces/Covid centers/ Labour hutments and infrastructure segments. Due to the pandemic and lockdown, overall demand was low during H1, but as the construction activities picked up from third quarter onwards - our all-out efforts resulted in improved Business performance during the second half of the year.
In order to get better realization for your Building Solutions products, we cherry-picked customers and markets closer to the manufacturing plants and aggressively focused on product specifications through our technical sales team to gain prestigious and high-value projects in the infrastructure and health care segments with far better realizations.
In FY22, your Company concentrated on growing the building solutions business by best utilization of available capacity. Your Company continued its approach as a comprehensive solutions provider in the building materials category by offering all relevant products under one roof thereby retaining and enhancing its customer base. Having achieved the maximum capacity utilization in the previous year, the Company has focused on process efficiency and lean management principles in these factories to optimize the costs further.
This vertical consists of Pipes & Fittings and Wall Putty marketed under the brand name "Birla HIL''. During FY22, Polymer Solutions business grew 36% over FY21 by entering new geographies by enhancing the team and its capabilities, selective brand spend, expansion of distribution network, expansion of product portfolio and through forging of strong connect with influencers and customers.
Birla HIL Pipes offers a wide range of plumbing solutions, including cPVC, uPVC, Column Pipes, SWR, Pressure & UGD Pipes and Fittings and Water Tanks confirming with related IS or ASTM specifications. These are ideal for household, industrial and commercial applications producing eco-friendly, anti-microbial, and cost-effective suitable solutions for carrying drinking water. Your company has a state of the art DSIR-approved R&D facility where inhouse recipes are designed and new innovations to improve quality are undertaken. Birla HIL Pipes and Fittings have a unique TrueFit⢠technology that offers 100% leak-proof joints and enhances the value propositions for consumers.
During FY22, Birla HIL Pipes showed a healthy growth of 52% over FY21, outperforming the industry growth. Your company has grown ~6X in last 4 years in the Pipes & Fittings segment. This was enabled by strategic focus on Tier 2 and Tier 3 towns in retail segment together with focused approach on technical sales in B2B segment. In addition, in this financial year, as part of our continued range expansion drive, we have added ~200 new SKUs to our portfolio.
Birla HIL Putty now has a pan-India presence, and we are continuously working and adding new channel partners to improve our presence in tier 2 and tier 3 towns. The expansion helped us grow by ~38% over the last Financial Year. With superior quality, Birla HIL putty has created a strong and loyal customer base. We have added Gypsum Plaster and Waterproof Putty to our product portfolio to cater to our increased customer demand.
Birla HIL Wall Putty made with cutting-edge "TRUE COLOUR" technology and is effective on all types of cementitious surfaces. Pure white in colour, its strong adhesive properties ensures a powerful bond between the base and the paint.
Parador - a leading international premium brand for flooring Solutions with its "Made in Germany" & "Made in Austria" quality products -a perfect blend of design and technology. Parador''s Innovative and sustainable products make it highly complementary to the existing product portfolio, which enables the Company to market its widened product range to more than 80 countries across the globe.
Introduction of E-business by augmenting its "Online Brand Store" and focus on "DIY Kits" were key success factors to positively impact Parador Germany business.
PARADOR is well aware of the pivotal role the flooring has in enhancing the aesthetic appeal of virtually all utilitarian structures, including residential, industrial and commercial buildings. Among the flooring types, wood floors are considered environmentally friendly, durable, and easy to clean. Changing lifestyles, a growing urban population, a rise in spending on home renovation and enhancement, and increasing consumer demand for eco-friendly materials are some of the key growth drivers augmenting demand for wood flooring. With a refinancing, housing, and remodeling trends remaining strong, the prospects for wood sales are bright. The generally positive outlook and stable demand for wood flooring is also spurred by advances in material and technology, which include water-resistant products and digital printing. In days to come preference for green products is expected to kindle consumer interest and re-energize demand patterns.
Amid the COVID-19 crisis, the global market for Wood Flooring estimated at US$43.2 Billion in the year 2020, is projected to reach a revised size of US$55.8 Billion by 2026, growing at a CAGR of 4.3% over the analysis period. Over the years, laminate flooring has gained popularity as a flooring material. The laminate flooring has been largely used owing to their developments in design and printing technology and the launch of unique product designs by manufacturers, fueling global demand for laminate flooring. Vinyl flooring is a type of resilient and robust flooring, which is significantly being used in construction applications associated with the residential and commercial projects.
The European floor covering market is expected to witness a strong rate during the forecast period. Some of the major factors attributing to the demand for flooring products in this region are increasing disposable income, growth in the residential real estate in the region, and rising demand for luxury flooring options. There is a growing trend of spending on the styling and interiors of the living spaces among consumers, leading them to spend more on home furnishings such as carpets, rugs, and other floor coverings that add to the aesthetic appeal of interiors. Europe is an attractive region of the flooring market, despite strict regulations on products such as PVC and other laminated flooring coverings that cause VOC emissions.
During the year Parador has reported a Net Revenue of H 154794 Crore as against H 1479.34 Crore in previous year recording a growth of 5%. The Profit Before Tax, which was hugely impacted due to extra-ordinary increase in costs in raw materials, for the year stood at H 46.72 Crore as against H 100.17 Crore in previous year resulting to a de-growth of 53%. As the transient headwinds subside, Parador will return to its profitable growth model.
1. Twin awards: Most Trusted Brand'' & ''Brand of the Year Water Technologies- Pipes'' for Birla HIL Pipes at 6th Realty INEX Awards 2022, realty industry awards and conclave. These Awards recognized Birla HIL Pipes for its âexemplary performance and achievement'' and âcontribution to making a positive difference in the Indian real estate industry''. Realty is the oldest and most respected real estate publication in the country. The event saw Indian and international architects
and building product brand leaders joining to discuss the way forward for the design and construction industry.
2. The Economic Times Best Brands in Building Materials & Fittings Industry for 2021 - Birla HIL Pipes & Putty was awarded as Best Brands in building materials & fittings for
2021. The Economic Times Best Brand is a research-based initiative that endeavors to ''highlight brands that have gained customers'' confidence, maintained their positions over a period, and sailed successfully through dynamic market challenges''. Birla HIL''s innovative product offerings and the legacy of CK Birla Group make it the best brand that is built around trust and its customer-centric approach.
3. Birla HIL Putty was adjudged as India''s Most Trusted'' for
2022. This award from Team Marksmen recognizes the trust and quality standards instituted at Birla HIL Putty. Birla HIL Putty is constantly setting high standards. Our cutting-edge ''True Colour Technology'' enables true reflection of the colours of selected paint shade. This innovative & technically superior product is behind the trust of our customers.
4. IBC Infomedia recognized Birla HIL Pipes as India''s Most Trusted Brand 2021. Awarded on the basis of extensive market research, expert analysis and an attribute-based qualitative research approach, it is a distinctive recognition for your company.
Your Company has been certified as a Great Place to Work for the fourth time in a row for 2022-23. Trust lies at the heart of building a great workplace culture. This philosophy is deeply embedded in HIL''s culture, which is evident in the significant difference we have made in the trust index score; from 86 last year to 94 this year, a giant leap of 8 points. This coveted recognition is an affirmation of our continuous efforts in nurturing and building a High-Trust and High-Performance culture at HIL. We have also been recognised as India''s Best Workplaces in Manufacturing 2022 - Top 30, Best workplaces in Cement and Building Materials Industry 2021; and chosen as India''s Best Companies to Work for 2022, ranked at 57 All this goes towards employee''s grit, determination and unwavering commitment towards your organisation to deliver stupendous results.
Economic Times - Asia''s Most Promising Leader of the Year
Mr. Dhirup Roy Choudhary, Managing Director and CEO of HIL Limited was conferred with the prestigious ''Most Promising Business Leaders of Asia Award 2021-22'' by The Economic Times, for the fourth consecutive year marking a significant achievement, and testimony to his persistent endeavors towards strengthening an innovation-led organization and leading and shaping the business demographics of HIL.
Super brand is the world''s largest independent arbiter of branding. It pays tribute to the strongest and most valuable brands in the world. ''Super brand Status'' strengthens a brand''s image, adds prestige and sets the brand apart from its competitors. HIL brands "Charminar" and "Birla Aerocon" have been the recipients of this prestigious award this year as well.
The TOP 100 honours the most innovative companies in the German SME sector. TOP 100 has been on the market for over 25 years and is the only competition that honours innovation management and is therefore the most important award for innovative companies in the SME sector.
Only creative companies with visions and a sense for the new make it into the ranks of the 100 most innovative medium-sized companies in Germany. Parador has already been included for the 5th time and has been awarded the "Top 100" seal of quality for its sophisticated innovation management.
The Good Design Awards are one of the oldest international design awards and have been promoting excellence in design and innovation since 1958. Each year, the programme attracts new and innovative design projects from around the world and recognises the best in all areas of design, architecture, engineering, research and social innovation. Created by Ray and Charles Eames, the Good Design Awards are presented annually by the Chicago Athenaeum and an international jury of experts and are among the most prestigious and distinguished design awards in the world.
After the Open Frameworks Design Edition, Parador has now received this award a second time, now for the One Ground Design Edition floors.
Annual Multimedia Award for Parador Online Brand Store The Parador Online Brand Store, which has been successfully combining the digital and analogue worlds of the Coesfeld-based premium manufacturer of products for floor, wall and ceiling design since June last year, has now been awarded "Silver" at the Annual Multimedia Award 2022. In the E-Commerce & Onlineshop category, Parador''s Online Brand Store was able to win a silver trophy at the Annual Multimedia Award 2022 and thus join a gallery of renowned national and international award winners. A total of 103 projects were recognised for their digital excellence this year. "Building a clever brand identity and communicating it credibly to the target group is how projects score points with the jury this year," reads the official announcement on Parador''s successful participation.
After the products of our "One Ground Design Edition" already received a Red Dot Award for product design in March, the accompanying campaign has now received the Red Dot Award: Brands & Communication Design 2021. We are proud of this honour and very pleased!
Online award for e-commerce-concept
Our Online Brand Store, which was launched in June last year, has now been awarded 3rd place with the Deutscher Preis fur Online-Kommunikation (DPOK) in the category "Building & Real Estate"
Life & Living Award 2022 for Parador The news channel NTV and the German Institute for Service Quality have presented the Life & Living Awards 2022. In the "Wood Flooring" category, Parador is one of this year''s award winners, as has now been announced. CSO Stefan Kukenhohner accepted the award.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure (I) to this report as per the requirements of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the period under review, there were no changes to the Board of Directors of your Company. Pursuant to the provisions of Section 149 & 184 of the Companies Act, 2013 and under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Independent Directors of the Company have submitted a declaration that each of them meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013 and SEBI Regulations and there has been no change in the circumstances which may affect their status as an Independent Director during the year.
In accordance with provisions of Section 152 of the Companies Act, 2013 and pursuant to Articles of Association of the Company, Mr. CK Birla (DIN: 00118473) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The brief details required to be disclosed in accordance with Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Companies Act, 2013 and Secretarial Standards is included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.
Mr. Dhirup Roy Choudhary, Managing Director and CEO was first appointed on January 16, 2017 for a term of five (5) years. He was re-appointed effective January 16, 2022 consequent to the expiry of his initial term on January 15, 2022 by the Board at its meeting held on December 06, 2022 for another term of five (5) years. His re-appointment and remuneration continued on the same terms as that of his initial tenure which expired on January 15, 2022.
Further the Nomination and Remuneration Committee at its meeting held on May 12, 2015 approved and recommended the Employee Stock Option Scheme 2015 to the Board and the Board at its meeting held on May 12, 2015 recommended the said Scheme for Members approval and the Members at their meeting held on July 30, 2015 approved the said Scheme. The Scheme was made applicable to the eligible employees and Mr. Dhirup Roy Choudhary, Managing Director and CEO was one of the eligible employees subject to the terms and conditions of the Scheme. Consequent to the approval of the ESOPs Scheme by the Members at their meeting Mr. Dhirup Roy Choudhary, Managing Director and CEO, certain options vested in Mr. Dhirup Roy Choudhary, Managing Director and CEO and were due for grant in July 2021.
Further, as per the provisions of Section 197 and other applicable provisions of the Companies Act, 2013 ("the Act"), read with Schedule V thereof and the Rules made thereunder, the maximum managerial remuneration payable to the managing director in respect of any financial year may exceed 5% of the net profits of the Company, calculated as per Section 198 of the Act, provided the same is approved by the members of the Company by way of a special resolution. For the purpose of assessing the proportion of the remuneration to the net profits of the Company, all elements of remuneration package such as salary, benefits, bonuses, stock option, pension, perquisites etc. are taken into consideration.
Pursuant to the approval of the Nomination and Remuneration Committee, from time to time, Mr. Dhirup Roy Choudhary, Managing Director and CEO of the Company (Director Identification Number: 07707322), has been granted Stock Options ("Options") - under the HIL Limited Employee Stock Option Scheme 2015" ("ESOP 2015") as a part of his compensation package. The details of these grants have been appropriately disclosed in the Annual Reports of the Company. The perquisite value of the Options, exercised by Mr. Dhirup Roy Choudhary during any financial year forms part of his total remuneration. The perquisite value is the differential value between the fair market price of shares on the date of exercise of Options and the exercise price. The perquisite value is directly linked to the fair market value of the shares of the Company on the date of exercise of Options. During the financial year 2021-22, as per vesting schedule under ESOP Scheme 2015, certain number of options have vested in him. These options were exercised and allotted to him on November 01, 2021 by the Nomination and Remuneration Committee within the meaning of the subject ESOP Scheme as well as the respective Board approvals. Taking into account the perquisite value which gets added to his remuneration, the total managerial remuneration payable to him exceeds 5% of the net profits of the Company purely due to inclusion of the perquisite value of options exercised by him during the year 2021-22 and no cash pay-out has been made to him. His cash remuneration excluding the perquisite value arising out of ESOPs is well within the prescribed limits under section 197 of the Companies Act, 2013.
In view of the above, based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on May 06, 2022, approved and accordingly recommends to the members an increase in the managerial remuneration limit in excess of 5% of the net profits of the Company (computed in the manner as laid down in Section 198 of the Act) thereby seeking Members consent to ratify the excess amount of H 422.07 Lacs paid to Mr. Dhirup Roy Choudhary, Managing Director and CEO during the year 2021-22. The Board of Directors recommends the proposal and the resolution for approval of members of the Company, as set out at Item No. 5 & 6 of the Notice.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, details of the Key Managerial Personnel of the Company.
|
Sl No |
Name of the Person |
Designation |
Remarks |
|
1 |
Mr. Dhirup Roy Choudhary |
Managing Director & CEO |
Ongoing |
|
2 |
Mr. KR Veerappan |
Chief Financial Officer |
Resigned * |
|
3 |
Mr. Mahesh Thakar |
Company Secretary & Head Legal |
Ongoing |
*He ceased to be CFO of the Company on close of working hours of May 10, 2022.
There were no other changes in the Key Managerial Personnel of the Company and the Company is in compliance with the required provisions of Section 203 of the Companies Act, 2013.
BOARD & COMMITTEES BOARD MEETINGS
The Company has a professional Board with an optimum combination of executive, non-executive and independent
directors i ncluding one woman director who bring to the table the right mix of knowledge, skill and expertise. The Board provides strategic guidance and direction to the Company in achieving its business objectives and protecting the interest of the stakeholders.
During the year, Six (6) meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming part of this annual report.The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
None of the Directors are disqualified under Section 164(2) of the Act. Certificate on non-disqualification as required under Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is forming part of the Corporate Governance Report.
The Board of Directors of the Company comprises of optimum number of Independent Directors. Based on the confirmation/ disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent in terms of Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Section 149(6) of the Act:
1. Mr. V V Ranganathan
2. Dr. Arvind Sahay
3. Mrs. Gauri Rasgotra
All the above Directors have registered themselves with the Independent Director''s Data Bank. The Company has received necessary declarations from each Independent Director under Section 149 of the Act and Regulation 25 of the Listing Regulations, confirming that he / she meets the criteria of independence laid down in Section 149 of the Act and Regulation 16(1)(b) of the Listing Regulations.
As per regulatory requirements and with a view to have focused deliberation, the Board has constituted following committees.
Audit Committee of the Company meets the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year Five (5) meetings of the Committee were held, the details along with the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE
Nomination and Remuneration Committee meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations
2015. During the year three (03) meetings of the Committee were held, the details of the composition of the Nomination and Remuneration Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Nomination and Remuneration Committee.
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, a formal evaluation of the performance of the Board, its Committees, the Chairman and the individual directors is conducted.
Structured forms covering evaluation of Board, Committees of the Board, Chairperson, Independent Directors and non-independent directors are devised for evaluation by all the Directors and Director''s rate against various criteria such as composition of Board, receipt of regular inputs and information, functioning, performance and structure of Board Committees, skill set, knowledge and expertise of directors, preparation and contribution at Board meetings, leadership etc.
Based on the recommendation of the Nomination and Remuneration Committee, the Board reviews the key skills/ expertise/competence of the Board of Directors, so that the Board of Directors comprises of a diverse and multidisciplinary group of professionals with requisite skills/expertise/competence who can contribute towards providing strategic direction to the Company''s management upholding the highest standards of Corporate Governance.
Further, as per the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, the following is the matrix of skills and competencies on which all Directors are evaluated:
? Governance and Board service
? Business Understanding
? Risk/Legal/Regulatory Compliance
? Information Technology/ Accounting/Financial Experience
? Industry/Sector Knowledge
? Strategy development and implementation
FAMILIARISATION PROGRAMME FOR DIRECTORS
In addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are given and explained to a new Director.
Pursuant to Regulation 25(7) of Listing Regulations, conducting familiarization programmes for the Directors in the Company is a continuous process, whereby Directors are informed, either through presentations at the Board or Committee meetings, board notes, interactions or otherwise about industry outlook, business operations, future strategies, business plans, competitors, market positions, products & new launches, internal and operational controls
Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.
The Risk Management Policy details the Company''s objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities.
During the year, the Risk Management Committee, Audit Committee and the Board have reviewed the elements of risk and the steps taken to mitigate the identified risks. In their opinion, apart from the existing challenges posed by the Covid pandemic, there are no major elements of risk, which has the potential of threatening the existence of the Company and as an organization, your Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator.
ANNUAL RETURN
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the annual return of the Company for the financial year 2021-22 can be accessed through the web link on the Company''s website https://hil.in/investor-relations/2022-annual-report/
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time, and to the best of their knowledge and information furnished, the Board of Directors state that:
I. In preparation of the Annual Accounts for the year ended March 31,2022 all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.
II. We have adopted 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 the financial year ended March 31, 2022.
III. We have 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 Annual Accounts for the year ended March 31, 2022 has been prepared on a going concern basis.
V. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
over financial reporting, budgets, analysis on the operations of the Company etc. Pursuant to Regulation 46 of Listing Regulations, the details required are available on the Company''s website https://hil. in/investor-relations/familiarization-program/.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)
Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The details of the composition of the Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 is given in the Corporate Governance Report which forms part of this annual report.
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder, the brief outline of the Corporate Social Responsibility (''CSR'') policy of the Company and the initiatives undertaken by the Company on the CSR activities during the year are given in Annexure (II) to this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The said policy is available on the Company''s website "https://hil.in/investor-relations/policies/CSR Policy"
As per the provisions of Section 135 of the Companies Act, 2013, 2% of average net profits of the Company for the immediately preceding three financial years calculated as per Section 198 of the Companies Act, 2013 works out to H 290.10 Lacs and the Company has spent an actual of H 291.15 Lacs on CSR activities in the areas of educations, preventive healthcare, supporting tribal community with education and vocational training and safety related initiatives.
STAKEHOLDERS'' RELATIONSHIP COMMITTEE (SRC)
The Stakeholders Relationship Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year Four (04) meetings of the Committee were held, the details along with the composition of the Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Committee.
In terms of the provisions of the Listing Regulations, your Company has voluntarily constituted a Risk Management Committee comprising of all the members of the Audit Committee along with the Managing Director & CEO, Chief Financial Officer and Head -Internal Audit of the Company. The Risk Management Committee is mandated to review the risk management process of your Company. The Company Secretary acts as the Secretary to the Committee.
The Company has an elaborate Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof and also lays down the procedure for risk assessment and its mitigation through an internal Risk Management Committee.
VI. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Your Company is committed to sound Corporate Governance and best corporate practices. The report on Corporate Governance for the year ended March 31, 2022 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure (III). The Certificate from the Auditors of the Company M/s. B S R & Associates LLP, Chartered Accountants, [ICAI Firm Registration Number: 116231W/ W-100024] regarding compliance of conditions of Corporate Governance is attached to the report of Corporate Governance forming part of this annual report.
Pursuant to the requirement laid down in the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company has a Whistle Blower Policy as part of its Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The Vigil Mechanism framework ensures that strict confidentiality is maintained whilst dealing with reported concerns and that no discrimination whatsoever is allowed to be practiced against any person who has genuinely raised a concern. The designated officer/ Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/ misconduct at [email protected]. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
The details of the same are provided in the Report on Corporate Governance forming part of this report. The Whistle Blower Policy is also posted in the Investors section of the Company''s website www. hil.in on the following link https://hil.in/investor-relations/policies/
The complaints received under Vigil Mechanism Policy will be investigated thoroughly and detailed update including action taken, if any, on the same will be presented to the Audit Committee and Statutory Auditors of the Company. There was one complaint received during the year and the same has been resolved.
Nomination and Remuneration Policy ("Remuneration Policy") of the Company is designed to create a high-performance culture. It enables the Company to attract, retain and motivate Directors on the Board, Key Managerial Personnel and the Senior Management Officers. Our Business Model promotes customer centricity and requires employee mobility to address project needs. The Remuneration Policy supports such mobility through pay models that are at par with industry standards.
The Nomination & Remuneration Policy is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same provided in the Corporate Governance Report. The Nomination & Remuneration Policy is also
posted in the Investors section of the Company''s website www.hil. in on the following link https://hil.in/investor-relations/policies/
PREVENTION OF SEXUAL HARASSMENT POLICY
Diversity and Inclusion is one of the major thrusts of your Company this year enabling an equal opportunity to all; it has been an endeavour of the Company to support women professionals through a safe, healthy and conducive working environment by creating and implementing proper policies to tackle issues relating to safe and appropriate working conditions. As per provisions of "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" the Company has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.
During the year under review, no complaint of sexual harassment was received by the Company. Details as per Section 21 and 22 of the POSH Act are as under:
|
Number of cases pending as on the beginning of the financial year |
Nil |
|
Number of complaints filed during the financial year |
Nil |
|
Number of cases pending as on the end of the financial year |
Nil |
|
Number of workshops or |
The Company regularly conducts |
|
awareness programs against |
necessary awareness programs |
|
sexual harassment carried out |
for its employees and all employees are provided detailed education during the induction. |
|
Nature of action taken by the employer or district officer |
Not Applicable |
The Company is having a robust process of identifying and monitoring of related party transactions. All related party transactions that were entered into during the financial year under review were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions entered or transacted by the Company with Related Parties, Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Power) Rules, 2014, all Related Party Transactions are placed before the Audit Committee for review and approval, the Board and shareholders, wherever such approval is required as per the provisions of Section 188 of the Act, rules made thereunder, Regulation 23 of the Listing Regulations and applicable Accounting Standards. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the ordinary course of business and are at arm''s length.
All Related Party Transactions entered during the financial year 2021-22 were in ordinary course of business and at arm''s length
basis. Your Company did not enter into Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, during the year under review.
A summary statement of the transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on quarterly basis. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (IV) to this report.
The Related Party Transaction Policy of the Company is available on the Company''s website https://hil.in/investor-relations/policies/
None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis-a-vis the Company and None of Directors are relatives to each other.
The Company has also adopted the following policies, as required by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same are available on the website of the Company https://hil.in/investor-relations/policies/
? Dissemination of Material Events Policy.
? Documents Preservation Policy.
? Monitoring and Reporting of Trading by Insiders.
? Code of Internal Procedures and Conduct for Regulating Code of Practices and Procedures for Fair Disclosures.
? Material Subsidiary Policy.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Your Company has in place adequate internal control systems commensurate with the size of its operations. Internal control systems comprising of policies and procedures are designed to ensure sound management of your Company''s operations, safekeeping of its assets, optimal utilisation of resources, reliability of its financial information and compliance. Clearly defined roles and responsibilities have been institutionalised. Systems, processes, and procedures are periodically reviewed and appropriately revised to strengthen them to mitigate emerging risks associated with the growing size and complexity of your Company''s operations.
The Company''s Statutory Auditors, BSR & Associates LLP Chartered Accountants (ICAI Regn. No.-116231W/W-100024), were appointed as the Statutory Auditors of the Company for a period of five years i.e. from the conclusion of 70th Annual General Meeting held on July 18, 2017 till the conclusion of the 75th Annual General Meeting to be held in 2022. Accordingly, the term of M/s. BSR &
Associates LLP Chartered Accountants, Statutory Auditors of the Company will come to end on conclusion of ensuing 75th AGM of the Company to be held on July 29, 2022.
In view of the above, it is proposed to appoint M/s. B S R and Co, Chartered Accountants (FRN - 128510W), as Statutory Auditors of the Company under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder. The Company received their consent along with a certificate confirming that they have not attracted any disqualifications as prescribed under the Companies Act, 2013 and the Chartered Accountant Act, 1949 read with rules made thereunder. The Audit Committee at its meeting held on May 6, 2022, reviewed the credentials of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) and recommended for their appointment; accordingly, the Board at its meeting held on May 6, 2022 considered the recommendations of the Audit Committee and approved appointment of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) as statutory auditors of the Company under the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder for a term of five years i.e. from the conclusion of 75th Annual General Meeting of the Company till the conclusion of 80th Annual General Meeting of the Company to be held in year 2027, at such terms and conditions as may be agreed between the Board and the Auditors including the remuneration of H 93.00 Lacs (Rupees Ninety Three Lacs only) (excluding applicable taxes) and in addition the agreed remuneration actual out-of pocket expenses incurred by them for the purpose of audit and the applicable taxes shall be reimbursed.
It is further informed that the Board recommended the appointment of M/s. B S R and Co, Chartered Accountants (FRN - 128510W) for approval of the members by way of Ordinary Resolution as set out under the item No. 4 of the notice annexed with this annual report in terms of the provisions of section 139 and 142 of the Companies Act, 2013 read with Rules made thereunder.
B S R & Associates LLP Chartered Accountants (ICAI Regn. No. 116231W/W-100024) who are the statutory auditors of the Company has issued an unmodified Auditor''s Report (Standalone & Consolidated) Financial Year ended March 31, 2022 and during the year, the Auditors have not reported any matter under Section 143 (12) of the Act, and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
The Company has an effective fulltime in-house and professionally competent internal audit team, which regularly monitors the effectiveness of the internal control systems. This function reports to the Audit Committee and the Managing Director about the adequacy and effectiveness of the internal control systems of your Company as well as the periodical results of its review of the Company''s operations as per an approved internal audit plan duly approved by the Audit Committee. The in-house internal audit team works in tandem with M/s. Ernst and Young, LLP whose professional services have been availed by the Company to audit specific locations and processes as per the Internal Audit plan approved by the Audit Committee. Together they provide a robust framework.
The recommendations of the internal audit teams on improvements in the operating procedures and control systems for strengthening the operating procedures were also presented periodically to the Audit Committee.
During the year under review, the Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, appointed M/s. S.S. Zanwar & Associates, as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending 31st March 2023 at a remuneration of H 8.00 Lacs plus out of pocket reimbursements.The requisite resolution for ratification of remuneration of Cost Auditor by the shareholders of the Company has been set out in the Notice of ensuing AGM. The Cost Auditor has certified that their appointment is within the limits as prescribed under Section 141(3)(g) of the Act and that they are not disqualified from such appointment within the meaning of the said Act
Pursuant to the provisions of Section 204 of the Companies Act, 2013, Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. PS. Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company. Pursuant to Section 139 and 141 of the Act and relevant Rules prescribed thereunder, the Company has received a certificate from the Secretarial Auditor, interalia, confirming that their appointment is within the limits laid down by the Act and rules made thereunder, is as per the term provided under the Act, they are not disqualified for being appointed as Secretarial Auditor under the provisions of applicable laws and
also that there are no pending proceedings against them involving matters of professional misconduct.
The Secretarial Audit Report issued by M/s. PS. Rao & Associates, Company Secretaries for the financial year ended March 31, 2022 is given in Annexure (V) attached hereto and forms part of this report. The report does not contain any qualifications, reservations or adverse remarks.
The Company has undertaken an audit for the financial year 2021-22 for all applicable Securities and Exchange Board of India ("SEBI") compliances as per circular dated February 08, 2019 issued by the SEBI. The Annual Secretarial Compliance Report issued by M/s. PS. Rao & Associates, Company Secretaries has been submitted to the Stock Exchanges within the prescribed time limit.
During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of Loans, Guarantees /Security provided and Investments made during the Financial Year ended March 31, 2022 is given in compliance with the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and the same is provided in the notes to financial statements.
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2022.
|
SUBSIDIARIES AND JOINT VENTURES The following is the group structure of your Company: |
||||
|
S. No. |
Legal name of the entity |
Relationship |
Country of incorporation and Date |
Full address |
|
1 |
HIL LIMITED |
Holding Company |
India, 23.06.1955 |
Office No 1 & 2, Level 7 SLN Terminus, Gachibowli, Hyderabad, Telangana - 500032 |
|
2 |
HIL International GmbH |
Subsidiary (Wholly Owned Subsidiary) |
Germany, 03.072018 |
Millenkamp 7-8, 48653 Coesfeld, Germany |
|
3 |
Parador Holding GmbH |
Step Down Subsidiary (WOS to HIL International GmbH) |
Germany, 20.06.2016 |
Millenkamp 7-8, 48653 Coesfeld, Germany |
|
4 |
Parador GmbH |
Step Down Subsidiary (WOS to Parador Holding GmbH) |
Germany, 21.09.2015 |
Millenkamp 7-8, 48653 Coesfeld, Germany |
|
5 |
Parador Parkettwerke GmbH |
Step Down Subsidiary (WOS to Parador GmbH) |
Austria, 10.04.1998 |
Wiener Strasse 66, 7540 Gussing, Austria |
|
6 |
Parador (Shanghai) Trading Co., Ltd. |
Equity Joint venture (50%) of Parador GmbH and (50%) Horgus Oriental Glamour Co., Ltd,. |
Republic of China, 08.08.2018 |
Room 1006, Floor 10, No, 233 Taicang Road, Huangpu District, Shanghai Municipality, the People''s Republic of China |
In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 your Company has appointed Dr. Arvind Sahay, Independent Director as a Director on the Board of HIL International GmbH, Germany (wholly owned subsidiary).
Your Company holds 33% of the share capital in Supercor Industries Limited ("Supercor"), a Company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold the remaining 67% of the share capital in Supercor.
During the year there is no significant development at Supercor Industries Limited. Company has already suspended its operations since the year 2016 due to cash flow crisis. Your Company has already informed the Board of Supercor Industries Limited about its intention to sell its stake and has not been participating in any of the discussions of the Board / Management for last three years. The Interim Board set up by the Nigerian Government is not responsive and your Company is awaiting to hear from the Board of Supercor Industries Limited for deciding further course of action.
In view of the above, your Company is not in a position to obtain any information/financials from the Joint Venture entity and hence the consolidated financial statements does not include the financial performance of Supercor Industries Ltd.
As per the provisions of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/ Associate Companies/Joint Ventures in Form AOC-1 is attached as Annexure (VI) to this report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements has been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. As per the provisions of Section 136 of the Companies Act, 2013, the Company will also place separate Audited accounts of its Subsidiaries on its website.
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & 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 provided in Annexure (VII) to this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review your Company has complied with the respective Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meeting and General Meetings.
HUMAN CAPITAL AND INDUSTRIAL RELATIONS
Your Company believes that the quality of its employees is the key to its continued growth and success. Hence, HIL is committed to providing necessary Human Resource development and training opportunities to equip employees with new skills to enable them to adapt to contemporary technological advancements. We practice and promote an open, fearless and transparent, value based culture in the organization. The recruitment process is aligned to attract the best talent available and diversity at workplace is another priority that has significant emphasis of the Company.
Your Company''s management firmly believes that a stable and peaceful industrial relation is key to the success of your organization. Over the years, the management has made sincere and continued efforts for the development of an atmosphere of mutual trust, cooperation, confidence and respect, duly recognizing the rights of the workers. A robust labour law compliance mechanism is in place to help the organization run its businesses in the most ethical and efficient manner.
The Company''s employee engagement program - JOSH - makes learning activities fun by indulging in various programmes like festive celebrations, sports events, health care activities, cultural nights with family events, etc. to create an overall healthy work environment. We are committed to build an open and transparent culture, through which employees can provide feedback without any fear. The organization is committed to the welfare and career growth of its people.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure (VIII) attached hereto and forms part of this report.
BUSINESS RESPONSIBILITY REPORT
Regulation 34(2)(f) of the Listing Regulations mandates the inclusion of Business Responsibility Report ("BRR") as part of the Annual Report for top 500 listed companies which was thereafter amended to top 1000 listed companies with effect from December 26, 2019, based on market capitalization as on March 31 every year. In compliance with the Listing Regulations, BRR of your Company for the financial year 2021-22 is included in the Annual Report as Annexure (IX).
Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting aspirational targets and improving economic performance to ensure business continuity and rapid growth.
The Company has two operative Employees Stock Option Schemes
i.e HIL Limited Employees Stock Option Scheme 2015 and HIL Limited Employee Stock Option Scheme 2019, which provides for grant of Stock Options to eligible employees of the Company.
Nomination & Remuneration Committee of the Board of Directors, inter alia, administers and monitors the Employees'' Stock Option Scheme(s) of the Company in accordance with the Securities and Exchanges Board of India (Share Based Employee Benefits) Regulations, 2014, as amended from time to time ("SEBI Regulations").
During the year there were no new options granted to the employees of the Company.
The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided as Annexure (X)
Certificate from M/s. PS. Rao & Associates, Company Secretaries, Secretarial Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year March 31, 2022 to which the financial statements relate and the date of signing of this report.
During the year, there is no application made or any proceeding pending on the Company, under the Insolvency and Bankruptcy Code, 2016.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company.
Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions related to these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. Issues of sweat equity shares.
3. Provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
As per section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereto ("the Rules"), all shares in respect of which dividends have not been paid or claimed for seven consecutive years or more shall be transferred to Investor Education and Protection Fund (IEPF).
In line with the aforesaid provisions, during the year, unclaimed interim dividend declared for the FY 2014-15 & unclaimed final dividend declared for the FY 2013-14 along with the underlying shares on which dividend has not been claimed for seven consecutive years have been transferred to IEPF.
The List of shareholders whose dividends/ shares have been transferred to IEPF is available on the website of the Company https://hil.in/investor-relations/unclaimed-divided-shares-due-to-transfer-to-iepf/ and also the procedure for claiming such unclaimed dividends/ shares from IEPF has been made available on website of the Company https://hil.in/investor-relations/procedure-for-claiming-shares-transferred-to-iepf/.
Your Directors take this opportunity to thank all the stakeholders of the Company for their continued support and express their sense of gratitude to the customers, vendors, banks, financial institutions, channel partners, business associates, Central and State Governments for their co-operation and look forward to their continued support in future. Your Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels and applaud them for their superior levels of competence, dedication and commitment towards your Company.
On behalf of the Board of Directors CK Birla
Place: New Delhi Chairman
Date: May 06, 2022 (DIN No. 00118473)
Mar 31, 2019
Dear Members''
The Directors'' are pleased to present the 72nd Annual Report along with Standalone and Consolidated Financial Statements for the year ended March 31, 2019. The year gone by saw various significant achievements, as a momentous milestone achieved during the year is to take your Company global by acquiring âParadorâ - a German based leading international premium brand in Flooring Solutions, having its manufacturing base in Germany, Austria and exports to 80 Countries .
Your Company believes that the acquisition of Parador is a step towards expanding HIL Brand globally. During the year under review, your Company made its brand presence felt in many ways, which was well received by all the stakeholders including its loyal customers and employees.
Your Company continued to maintain its market leadership in India in the relevant operating segments by expanding its brand presence and market reach and delivered profitable growth for the second consecutive year.
Your Company was recognized as a ''Great Place to work'', which acknowledges the efforts made by the management to carry the employees together as ''One HIL''.
The financial numbers on a consolidated basis includes the transactions of the Wholly Owned Subsidiary (WOS), HIL International GmbH, Germany from July 4, 2018 to March 31, 2019, encompassing the financials of Parador Holding GmbH, Germany (Including its subsidiaries) for a period from August 27, 2018 to March 31, 2019.
Summary of Financial Results
(Rs, in Crores)
|
Particulars |
Standalone |
Consolidated |
|||
|
2018-19 |
2017-18 |
2018-19 |
|||
|
Total Revenue |
1513.71 |
1348.68 |
2234.77 |
||
|
Earnings Before Interest, Depreciation & Tax |
222.27 |
170.67 |
281.41 |
||
|
Less : Interest |
19.35 |
3.87 |
25.16 |
||
|
Depreciation |
42.81 |
46.90 |
68.56 |
||
|
Profit Before Tax and Exceptional items |
160.11 |
119.91 |
187.69 |
||
|
Less: Exceptional items |
- |
- |
21.16 |
||
|
Profit before Tax |
160.11 |
119.91 |
166.53 |
||
|
Less : Taxes |
58.59 |
39.15 |
65.14 |
||
|
Profit for the year |
101.52 |
80.75 |
101.40 |
||
|
Other Comprehensive Income - net of tax |
(0.60) |
(0.57) |
(10.15) |
||
|
Total Comprehensive Income for the year |
100.92 |
80.18 |
91.24 |
||
Revenue
Continuing its growth trajectory, your Company has once again delivered a splendid performance in both quantitative and qualitative terms in the current year. All the business verticals outperformed over the last year numbers.
During the year under review, the net revenues from operations on a standalone basis has increased to RS,1481.94 Crores from RS,1326.17 Crores in the previous year
- registering a growth of 12%. On a consolidated basis, your Company crosses the RS,2000 Crores revenue for the first time to register net revenue from operations during the financial year 2018-19 of RS,2208.02 Crores.
Interest
As mentioned above, one of the significant milestone during the year was successful acquisition of the German based leading flooring solutions company âParadorâ, the funding for which was meticulously planned by a combination of funds from internal accruals and debt through banks in India and Europe at an attractive interest rates, which has helped your Company to limit the interest costs substantially.
In view of the above, interest cost for the year 2018-19 has increased to RS,19.35 Crores on a standalone basis as against RS,3.87 Crores during the previous year. On a consolidated basis, interest cost for the financial year 2018-19 stood at RS,25.16 Crores.
Profit Before Tax
During the year under review, your Company achieved a standalone Profit Before Tax (PBT) of RS,160.11 Crores as against RS,119.91 Crores in the previous year, thus registering a growth of 34%, mainly driven by various operational cost saving initiatives and well outlined sales strategies to improve net realizations. This is after paying an interest of RS,14.73 Crores paid towards loan taken for acquisition of 100% shareholding of Parador Holding GmbH, Germany. On a consolidated basis, profit before tax for the year 2018-19 stood at RS,167.07 Crores.
Net Worth
The Standalone Net Worth as at March 31, 2019 improved to RS,646.86 Crores as against RS,566.12 Crores as on March 31, 2018. On a consolidated basis, the Net Worth of your Company for the financial year 2018-19 stood at RS,637.19 Crores.
The earnings per share (basic) grew by 26% during the year i.e H135.94 per share as on March 31, 2019 as against RS,108.21 as on March 31, 2018. The book value per share as at March 31, 2019 was at RS,853/- as against RS,759/- as on March 31, 2018.
Credit Rating
During the year under review, your Company has borrowed RS,273 Crores in India to fund acquisition of 100% shareholding of Parador Holding GmbH, Germany, which has resulted in a substantial increase in long term debt. However, owing to continuing good performance of your Company and after detailed evaluations, the rating agencies, have retained the long term rating at the existing levels.
The Credit Ratings assigned to various debt instruments are as below:
|
Sl No. |
Agency |
Type |
Rating |
|||
|
1 |
ICRA |
Long Term - Cash |
''ICRA AA-/ |
|||
|
Credit Facilities |
(Stable)'' |
|||||
|
2 |
ICRA |
Short Term - Debt |
''ICRA A1 '' |
|||
|
3 |
ICRA |
Short Term |
ICRA A1 |
|||
|
-Commercial |
||||||
|
Paper |
||||||
|
4 |
India Ratings |
Long Term - Term |
''IND AA-/ |
|||
|
Loan |
(Stable)'' |
|||||
Dividend
During the year under review, the Board of Directors has declared an interim dividend of H12.50 per equity share (125% of the paid-up value). Your Directors are pleased to recommend a final dividend of H12.50 per equity share (125% of the paid-up value) for your consideration and approval at the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year 2018-19 works out to be H25.00 per equity share (250% of the paid-up value) as against the total dividend of H22.50 per equity share (225% of the paid-up value) declared in the previous year.
The total dividend outgo would amount to RS,22.52 Crores (Including Corporate dividend tax) and the Company has transferred RS,10.00 Crores to the General Reserves out of the profits for the year.
The Company has fixed July 17, 2019 as Record Date for the purpose of determining the entitlement of the shareholders to the final dividend for the financial year ended March 31, 2019. The Register of Members and Share Transfer Books of the Company will remain closed from July 18, 2019 to July 24, 2019, both days inclusive.
Share Capital
The paid up Equity Share Capital as on March 31, 2019 was RS,7.50 Crores. During the year under review, the Company has issued 8780 equity shares on exercise of options by eligible employees and there are no shares with differential voting rights, nor sweat equity issued by the Company.
Listing With Stock Exchanges
The Equity Shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for financial years 2019-2020 and 2018-19 have been paid to these exchanges.
During the financial year 2018-19, the Issued and Listed Capital of the Company has increased due to allotment of Equity Shares (8780) to eligible employees on exercise of options under HIL Employee Stock Option Scheme, 2015.
State of Company''s Affair
Your Company continued to accelerate its business performance and gain momentum during the year under review and its focused and committed approach combined with its unique market/product based strategies helped it to grow its market share in all its product categories with better realizations.
Your Company always believes that optimizing cost and improving the operational excellence is core to maintain the profitability in the competitive environment. In line with this, your Company has initiated âSix Sigmaâ and âLean Management Systemsâ in all its manufacturing facilities, aiming to achieve operational excellence with optimal cost management.
Your Company has added capacities in the growing product ranges in line with its focus on high potential geographies resulting in significant growth in revenue and profits.
Roofing Solutions:
Your Company retained its market leadership position owing to the deep rooted trust it enjoys from its customers, backed with various market penetration, dealer initiatives and brand enhancement schemes undertaken during the year, and thus expanded its business reach in a competitive environment.
âCharminarâ, Asia''s best consumer brand, continue to enjoy its leadership owing to the legacy gained over the last 7 decades clubbed with enhanced Customer centric approach, superior quality than competition, better post sale customer service, deep routed supply chain network and widely spread depots and dealer network. This has adequately supported the business to mitigate the headwinds faced in the industry.
âCharminar Fortuneâ, a product from the in-house R&D team, which was introduced last year by your Company to cater the requirement of the institutional segment, has received a positive response from the customers. Our technical solutions team and sales team are constantly working to enhance the customer base by including this product into the approved catalogues of various institutions. The quality and performance of this product has positively surprised the market, which has helped us install the product in prestigious locations. During the year, your Company associated with âChhatrapati Shivaji Terminusâ, which is a historic railway station and a UNESCO World Heritage Site in Mumbai, Maharashtra, by supplying Charminar Fortune sheets, to give a new look to the station.
Your Company believes this advanced research-based green roofing solution with excellent load bearing capacity, thermal resistance, sound proofing, fire resistance and a life of many decades will be a game changer in markets within and outside our Country and will take the Company to newer heights in the years to come.
Overall the roofing business ended the year with a growth of 4% in quantity terms over the previous year and we continue to consolidate our position in the industry.
Building Solutions
Building Solutions business consists of Wet Walling and Dry Walling products, which caters to the various requirements of customers in residential/commercial spaces. During the year the demand for these products have gone up, which resulted in reporting an improved financial performance for this segment.
Various marketing activities along with selective focus on high yielding orders helped the Company to increase its sales by more than 7% during the year under review as compared to last year, resulting in full capacity utilization of this business. The growth in volumes was aptly supported by on-going Government initiatives.
Your Company continued its position as a comprehensive solutions provider in the building materials category by offering all relevant products under one roof thereby retaining and enhancing its customer base. The company management''s vision was to improve the operational efficiencies in this business before enhancing capacities, which has been achieved in the year gone by.
Wet-Walling Solutions
Wet-Walling category consists of âFly Ash Blocksâ, an eco-friendly building material, âSmart fixâ, and âSmart Plasterâ under the brand name âBirla Aeroconâ. All products cohesively offer a complete range of solutions to the stakeholders in the Building Material industry.
Fly Ash Blocks - an eco-friendly building material product, with unique combination of strength, low weight, cost-effectiveness and durability, has helped your Company to gain huge market share in the Building solutions and continue its leadership position.
During the year under review, Fly Ash Blocks has achieved a growth of 7% in quantity terms over the previous year, which was subdued due to capacity constraints. Fly Ash Blocks along with Smart Fix and Smart Plaster continue to be a preferred choice among the builders and dealers.
Dry-Walling Solutions
Dry-Walling category consists of âPanelsâ, âBoardsâ and âSmart bondâ under the brand name âBirla Aeroconâ. Panels & Boards continue to be the preferred choice of the Architects and designers. Technical solutions team of the Company works closely with the Architects and Designers to provide them requisite support wherever required for promoting these products. With strong sales force and better relationship with external stakeholders backed by premium brand, this product category registered a growth of 14% in quantity terms during the year under review as compared to the previous year. Your Company continues to maintain its preferred position in this category as well.
Thermal Insulation
Thermal Insulation business under the brand HYSIL, has reported a growth of 20% in quantity terms due to enhanced sales efforts and improved demand from domestic and overseas customers for their new projects.
Polymer Solutions
This vertical consists of Pipes & Fittings and Wall Putty marketed under the brand name âBIRLA HILâ. During the last quarter of the financial year under review, the Wall Putty business was moved from âBuilding Solutionsâ vertical to âPolymer Solutionsâ vertical due to high synergies with Pipes & Fittings business in the retail space.
Pipes & Fittings
To further strengthen the Brand, your Company has taken strategic decision to rebrand Pipes & Fittings and sell under âBIRLA HILâ Pipes and fittings, Your Company believes that this initiative will combine the Legacy & Goodwill of BIRLA & HIL, while recognizing HIL''s dominance in building solutions sector and helped us to create a Brand based on Reliability, Quality & Trust.
During the year under review, the Pipes & Fittings business registered a robust growth of 110% in revenue terms over the previous year. The said growth was mainly driven by capacity and product portfolio enhancement, expanding the dealer base and augmenting well-planned marketing activities, including investment in Television Commercials activities, with quality centric approach. Augmentation in capacity and product portfolio has been achieved by investing a sizeable amount in establishing capacity for launching new product categories. Your Company added capacity at its Golan Plant, taking total capacity at Golan to 16,000 MT. In addition to this, expansion was also initiated at Thimmapur plant. After completing all the above projects, the aggregate capacity of your company for Pipes and Fittings will be increased to 30700 MT by end of September 2019.
With key focus on strengthening Brand, your Company launched TV Commercials, which were aired across all leading TV Channels in November and December 2018. Your Company believes that with these initiatives, awareness of âBIRLA HILâ Brand with consumers will further increase and strengthen on PAN India basis. With strengthening of relationships with the trade channels, plumbers, influencers and builders/developers, will result in improved trust which will directly influence the performance of this division going forward.
Wall Putty
During the year, Wall Putty business almost doubled as the brand awareness increased multi-fold from different territories. The Wall Putty business ended the year at RS,117.28 Crores in revenue terms as compared to RS,60.17 Crores registered in FY 2017-18, there by resulting in 94% growth over last year. In order to meet the growing demand for this product, your Company expanded its manufacturing capacity from 60,000 MT to 1,65,000 MT during the year. Your Company is also committed to expand its manufacturing foot print further for this product in the Western and Southern Regions as the demand picks up, which will further boost demand for this product
Flooring Solutions
With the acquisition of 100% shareholding in Parador Holding GmbH, Germany, your Company has enhanced its global presence.
âParadorâ - a leading international premium brand for flooring Solutions with its "Made in Germanyâ & "Made in Austriaâ quality products, is a perfect blend of design and technology. Innovative and sustainable products makes it highly complementary to your Companies existing product portfolio, which will enable the Company to market its widened product range across the globe.
âParadorâ, founded in Cosefeld Germany in 1977, has two manufacturing facilities, one each in Cosefeld, Germany and Gussing, Austria, with three distinct product categories namely; Engineered wooden flooring, laminate flooring and resilient wooden flooring. Having international presence in 80 Countries, it continues to be the leading brand in Europe.
The above acquisition was done in all-cash consideration, which was funded by a combination of internal accruals, onshore & offshore debt at competitive rates.
During the year, âParadorâ has expanded its foot prints by setting up Parador (Shanghai) Trading Co., Ltd, China, the first ever Joint Venture of Parador GmbH, Germany and opened its first world class showroom in Shanghai with its state of art, digitally led distribution system for Premium flooring products. This will help your Company to expand its business aggressively in China and other parts of the Asian markets.
During the period August 27, 2018 to March 31, 2019, Parador Group has reported a Net Revenue of RS,726.08 Crores with a Profit Before Tax of RS,6.42 Crores after absorbing one time exceptional spend of RS,21.16 Crores.
Branding
Your Company commenced its brand enhancement journey in a serious way since last year and is committed to enhance its business performance and reach by continuously investing in its brands. As part of the brand promotion activity, your Company has associated with the Indian Premier League (IPL) by partnering with Chennai Super Kings (CSK) for the last two years, resulting in significant increase in brand recognition. There is a sense of pride amongst the channel partners and employees, which reflected in their overall performance during the year under review. Company''s management wanted to establish HIL as a global brand from its previous image of being a Hyderabad based company and have gone a long way towards successfully creating this image in the minds of all the stakeholders with the help of these promotions. Your Company also aimed to boost HIL brand visibility as well as its reach amongst its consumers, dealers, and influencers and has been successful in achieving the same.
The TV commercials released by the Company displaying its global reach and extensive portfolio of products was greatly appreciated. Your Company received several awards and accolades for all its brand led activities undertaken during the year under review.
Your Company is looking forward to benefit from similar associations in the coming years as well and believe it will lead to brand-led business growth among all the verticals. Your Company''s caption âHIL - Together, We Buildâ has proven to be a game-changer towards strengthening the brand''s commitment and supporting its vision of building a dream nation with its innovative products. While the quality of products is a prerequisite for progressive growth for HIL, it will be driven by diversification and enhancement of its products. These associations will highlight HIL as a one-stop shop solutions provider for all building requirements for modern construction.
The philosophy of Together, We Build is synonymous not just with our products but also with our brand persona, which is reflected in all our activities.
Awards
Great Place to Work
Your Company is proud of being certified as a âGreat Place To Workâ in its first attempt for the year 2019-20. This goes to prove the confidence of all employees have in your Company and commends on the efforts taken by the management towards building an impeccable performance-based organization.
Asia''s most promising Leader of the Year
Mr. Dhirup Roy Choudhary, Managing Director and CEO of your Company was conferred with the prestigious ''Most Promising Business Leader in Asia Award 2018'' by The Economic Times, marking a significant achievement, and testimony to his persistent endeavors towards strengthening an innovation-led organization and leading and shaping the business demographics of HIL, India''s leading and Asia''s most trusted building material company.
The award was presented to a handful of business leaders of India, China and other South East Asian countries in Hong Kong early this calendar year.
Golden Peacock National Quality Award 2018
Your Company bagged the Golden Peacock National Quality Award 2018, which is one of the most prestigious awards in the field of Quality, Innovation and Business Excellence.
The award was presented to HIL at the 29th World Congress on Leadership for Business Excellence & Innovation - Dubai Global Convention on March 6, 2019 by the UAE Minister Dr. Tayeb Kamali.
India''s Best Company of the Year
Your Company is proud to have received The Best Company of the Year Award 2018, in category of building materials, for the second time in a row at an awards ceremony held in Mumbai by IBC INFOMEDIA (A Division of International Brand Consulting Corporation, New Jersey, USA). This selection was based on overall market share, innovation, workplace culture, leadership, business ethics, Governance, Corporate Social Responsibility and such other factors.
ACEF Customer Engagement Forum
In an elaborate ACEF Customer Engagement Forum awards ceremony held in Mumbai on October 5, 2018, your Company won 3 gold awards in the categories of Best rural activation for Sales Volume, Most Effective use of Sponsorship and Event Marketing and Young Marketing Leader of the year. The awards were won for the association with CSK and brand building initiatives undertaken by your Company.
Abby Awards
Considered as the Oscars of advertising and marketing, your Company bagged two silvers and one bronze award for its Pipes & Fittings TV Commercial. This TV Commercial was also sponsored for the Cannes Festival this year.
Superbrand Award
Superbrand is the world''s largest independent arbiter of branding. It pays tribute to the strongest and most valuable brands in the world. ''Superbrand Status'' strengthens a brand''s position, adds prestige and sets the brand apart from its competitors. Your Company''s brands âCharminarâ and âBirla Aeroconâ have been recipients of this prestigious award this year as well.
APIIC Award
Andhra Pradesh Industrial Infrastructure Corporation awarded your Company''s Kondapalli unit with the best green belt award.
Asia''s Most Trusted Company of the year, 2018
Your Company was conferred with ASIA''S MOST TRUSTED COMPANY OF THE YEAR, 2018 by IBC Infomedia Pvt. Ltd. for the second consecutive year. ASIA''S MOST TRUSTED BRANDS & COMPANIES AWARDS identify and rewards those which have maintained the highest standards of product integrity and brand development.
Iconic Brand, 2018
Your Company was recognized as an "ICONIC BRAND, 2018â by The Economic Time Iconic Brands 2018. The Economic Time Iconic Brands 2018 is an endeavour to feature successful brand stories by outlining the DNA of the legendary brands of Indian origin who have taken a deep dive into what has made these brands stand out and what are they doing as an ongoing process to live up-to the iconic status.
Management Discussion & Analysis Report
A Report on Management Discussion & Analysis is appended as Annexure (I) to this report as per the requirements of Securities and Exchange Board of India (Listing Obligations & Disclosures Requirements) Regulations 2015.
Directors'' & Key Managerial Personnel
The following were the changes to the Board of Directors of your Company:
- Dr. Arvind Sahay (DIN: 03218334) was appointed as an Additional Director w.e.f February 8, 2019 and was also appointed as an Independent Director for a period of 5 years i.e from February 8, 2019 to February 7, 2024);
- Mr. V. V. Ranganathan (DIN: 00060917) was appointed as an Additional Director w.e.f March 19, 2019 and was also appointed as an Independent Director for a period of 5 years i.e from March 19, 2019 to March 18, 2024);
- Mrs. Gauri Rasgotra (DIN: 06862334) was reappointed as an Independent Director for a period of second term of 5 years i.e from May 8, 2019 to May 7, 2024;
- Mr. Yash Paul (DIN: 00580681) Independent Director of the Company has resigned due to personal reasons from the directorship of the Company w.e.f March 19, 2019. The Board places on record its deep appreciation for the valuable services rendered by him during his association of about 19 years as a Director and Independent Director of the Company.
- Late Mr. P. Vaman Rao (DIN: 00069771) Independent Director of the Company has resigned due to his health reasons from the directorship of the Company w.e.f February 8, 2019. The Board places on record its deep appreciation for the valuable services rendered by him during last 5 decades as a Director and Independent Director of the Company. The Company also pays homage to this great leader on his demise during the latter part of the year.
As per Section 149, 152 and 160 of the Companies Act, 2013, Dr. Arvind Sahay and Mr. V. V. Ranganathan hold the office of Director, as Additional Director, until the date of the ensuing Annual General Meeting of the Company and are eligible for appointment as a Director. Keeping in view their experience and expertise, the Board recommends their appointment as Director(s) and Independent Director(s) for a period of 5 years. The Resolution proposing their appointment will be placed before the Shareholders for their approval at the ensuing Annual General Meeting of the Company.
As per Section 149 of the Companies Act, 2013 and keeping in view the vast expertise and experience, the Board recommends the reappointment of Mrs. Gauri Rasgotra as Independent Director for a second term of 5 years. The Resolution proposing her appointment will be placed before the Shareholders for their approval at the ensuing Annual General Meeting of the Company.
In accordance to provisions of Section 152 of the Companies Act, 2013 and pursuant to Articles of Association of the Company, Mr. Desh Deepak Khetrapal (DIN: 02362633) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
For Director seeking appointment/re-appointment at the ensuing Annual General Meeting of the Company, their brief resume and other details required to be disclosed in accordance with Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Companies Act, 2013 and Secretarial Standards is included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.
Pursuant to the provisions of Section 149 & 184 of the Companies Act, 2013 and under Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015, Independent Directors of the Company have submitted a declaration that each of them meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations 2015 and there has been no change in the circumstances which may affect their status as an Independent Director during the year.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Dhirup Roy Choudhary, Managing Director & CEO, Mr. KR Veerappan, Chief Financial Officer and Mr. G Manikandan, Company Secretary & Financial Controller are the Key Managerial Personnel of the Company and during the year under review there was no change in the Key Managerial Personnel of the Company.
Board & Committees
Board Meetings
During the year eight meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the directors were given in the Corporate Governance Report forming part of this annual report. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015.
Committees of The Board
As per regulatory requirements and with a view to have focused deliberation, the Board has constituted following committees.
Audit Committee
Audit Committee of the Company meets the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year four meetings of the Committee were held, the details along with the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.
Nomination & Remuneration Cum Compensation Committee
Nomination & Remuneration cum Compensation Committee meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year four meetings of the Committee were held, the details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Nomination & Remuneration cum Compensation Committee.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually and the Committees of the Board.
Evaluation of all Board members is performed on an annual basis. The evaluation is performed by the Board, Nomination & Remuneration cum Compensation Committee and Independent Directors, with specific focus on the performance and effective functioning of the Board and Individual Directors.
Structured forms covering evaluation of Board, Committees of the Board, Chairperson, Independent Directors and no independent directors were circulated to all the Directors and Directors were requested to rate the same against various criteria taking into consideration the inputs received from
Directors, covering aspects of the Board''s functioning such as adequacy of the Composition of the Board and its Committees, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of the Individual Directors including the Chairman of the Board. The Directors'' performance was evaluated on parameters such as level of engagement and contribution in strategy and safeguarding the interest of the Company etc.
The entire Board carried out the performance evaluation of the Independent Directors. Further the Independent Directors carried out the performance evaluation of the Chairman and Non Independent Directors.
Based on the recommendation of the Nomination & Remuneration cum Compensation Committee, the Board reviews the key skills/ expertise/competence of Board of Directors, so that Board of Directors comprises of a diverse and multidisciplinary group of professionals with requisite skills/expertise/competence who can contribute towards providing strategic direction to the Company''s management upholding the highest standards of Corporate Governance.
Further, as per the Securities and Exchange Board of India (Listing Obligation & Disclosure Requirements) Regulation 2015, the following is the matrix of skills and competencies on which all Directors will be evaluated from the financial year 2019-20 onwards.
- Governance and Board service
- Business Understanding
- Risk/Legal/Regulatory Compliance
- Information Technology/Accounting/Financial Experience
- Industry/Sector Knowledge
- Strategy development and implementation
Familiarization Programme for Directors
In addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Companies Act, 2013 and relevant Regulations of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are given and explained to a new Director.
During the year all new directors appointed were provided with a formal familiarization and a detailed orientation about the Company.
Corporate Social Responsibility Committee (CSR)
Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The details of the composition of the Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report.
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder, the brief outline of the Corporate Social Responsibility (''CSR'') policy of the Company and the initiatives undertaken by the Company on the CSR activities during the year are given in Annexure (II) to this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The said policy is available on the Company''s website "http://hil.in/investors-relations/â.
As per the provisions of Section 135 of the Companies Act, 2013, 2% of average Net Profits of the Company for the immediately preceding three financial years calculated as per Section 198 of the Companies Act, 2013 works out to RS,1.63 Crores and the Company has spent RS,2.05 Crores on CSR activities in the areas of healthcare, education and others.
Stakeholders'' Relationship Committee (SRC)
The Stakeholders'' Relationship Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year four meetings of the Committee were held, the details along with the composition of the Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Committee.
Extract Of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and rules framed thereunder, the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure (III) and forms part of this Report.
Directors'' Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, as also on the basis of the discussion with the Statutory Auditors of the
Company from time to time, and to the best of their knowledge and information furnished, the Board of Directors state that:
I. In preparation of the Annual Accounts for the year ended March 31, 2019 all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.
II. We have adopted 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 the financial year ended March 31, 2019.
III. We have 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 Annual Accounts for the year ended March 31, 2019 has been prepared on a going concern basis.
V. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
VI. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Corporate Governance
Your Company is committed to good Corporate Governance coupled with adhering best corporate practices. The report on Corporate Governance for the year ended March 31, 2019 pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure (IV). The Certificate from the Auditors of the Company B S R & Associates LLP, Chartered Accountants, [ICAI Firm Registration Number: 116231W/ W-100024] regarding compliance of conditions of Corporate Governance is attached to the report of Corporate Governance forming part of this annual report.
Policies
Whistle Blower Policy
Pursuant to the requirement laid down in the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company has a Whistle Blower Policy as part of its Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The framework ensures that strict confidentiality is maintained whilst dealing with concerns and that no discrimination is meted out to any person for a genuinely raised concern. The designated officer/ Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/ misconduct at whistleblower^ hil.in. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
The details of the same are provided in the Report on Corporate Governance forming part of this report. The Whistle Blower Policy is also posted in the Investors section of the Company''s website www.hil.in on the following link http://hil.in/investors-relations/.
All the complaints received under Vigil Mechanism Policy were investigated thoroughly and detailed update including action taken, if any, on the same was presented to the Audit Committee and Statutory Auditors of the Company.
Remuneration Policy
Nomination & Remuneration Policy ("Remuneration Policyâ) of the Company is designed to create a high-performance culture. It enables the Company to attract, retain and motivate Directors on the Board, Key Managerial Personnel and the Senior Management Officers. Our Business Model promotes customer centricity and requires employee mobility to address project needs. The Remuneration Policy supports such mobility through pay models that are at par with industry standards.
The Nomination & Remuneration Policy is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 and the same provided in the Corporate Governance Report. The Nomination & Remuneration Policy is also posted in the Investors section of the Company''s website www.hil.in on the following link http://hil.in/investors/codes-policies/.
Sexual Harassment Policy
Diversity and Inclusion is one of the major thrust of your Company this year and provides an equal opportunity to all; it has been an endeavour of the Company to support women professionals through a safe, healthy and conducive working environment by creating and implementing proper policies to tackle issues relating to safe and proper working conditions. As per provisions of "The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013â has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.
During the year under review, no complaint of sexual harassment was received by the Company. Details as per Section 21 and 22 of the POSH Act are as under:
|
Number of cases pending at the beginning of the financial year |
Nil |
|
Number of complaints filed during the financial year |
Nil |
|
Number of cases pending at the end of the financial year |
Nil |
|
Details of workshops or |
The Company regularly |
|
awareness programmes |
conducts necessary |
|
against sexual harassment |
awareness programs for |
|
carried out |
its employees and all employees are provided detailed education during the induction. |
|
Nature of action taken by the employer or district officer |
Not Applicable |
Related Party Transactions
The Company is having a robust process of identifying and monitoring of related party transactions. All related party transactions that were entered during the financial year under review were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions entered or transacted by the Company with Related Parties, Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Power) Rules, 2014, all Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for transactions, which are of repetitive in nature and / or entered in the ordinary course of business and are at arm''s length with related parties.
All Related Party Transactions entered during the financial year 2018-19 were in ordinary course of business and at arm''s length basis. Your Company entered no Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, during the year under review.
A summary statement of the transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on quarterly basis. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (V) to this report.
None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis-a-vis the Company and None of Directors are relatives to each other.
Risk Management
The Company has an elaborated Risk Management framework in place, which helps in identifying the risks and proper mitigation thereof and also laid down the procedure for risk assessment and its mitigation through an internal Risk Committee.
Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
The Risk Management Policy details the Company''s objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities.
During the year, the Board reviewed the elements of risk and the steps taken to mitigate the risks and in the opinion of the Board there are no major elements of risk, which has the potential of threatening the existence of the Company and as an organization, your Company promotes strong ethical values and high levels of integrity in all its activities, which in itself is a significant risk mitigator.
Other Policies
The Company has also adopted the following policies, as required by Companies Act, 2013 and Securities and Exchange Board of India
Regulations and the same are available on the website of the Company (www.hi1.in/investors/ policies/)
- Dissemination of Material Events Policy.
- Documents Preservation Policy.
- Monitoring and Reporting of Trading by Insiders.
- Code of Internal Procedures and Conduct for Regulating Code of Practices and Procedures for Fair Disclosures.
- Material Subsidiary Policy.
Internal Financial Controls With Reference to Financial Statements
The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include:
1. All transactions are recorded in the ERP system SAP.
2. Well defined policies, guidelines, and Standard Operating Procedures (''SOPs''), authorization and approval procedures.
3. The internal financial controls of the Company are adequate to ensure accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient manner.
4. The Company has appointed Internal Auditors to check the Internal Controls and to ensure whether the work flow of the organization is in accordance with the approved policies of the Company; and
5. Systems to ensure compliances with prevalent status and statutory compliances are in place.
Auditors
Statutory Auditors
The Company''s Statutory Auditors, B S R & Associates LLP, Chartered Accountants (ICAI Regn. No.-116231W/ W-100024), were appointed as the Statutory Auditors of the Company for a period of 5 years i.e 70th Annual General Meeting (held on July 18, 2017) till the conclusion of the 75th Annual General Meeting to be held in 2022. Accordingly, B S R & Associates LLP, Chartered Accountants, Statutory Auditors of the Company will continue till the conclusion of 75th Annual General Meeting. In this regard, the Company has received a Certificate from the Auditors to the effect that their continuation as Statutory Auditors, would be in accordance with the provisions of Section 141 of the Companies Act, 2013
There are no qualifications, reservations or adverse remarks made by B S R & Associates LLP, Chartered Accountants (ICAI Regn. No. 116231W/ W-100024) Statutory Auditors in their report for the Financial Year ended March 31, 2019 and during the year, the Auditors had not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.
Internal Auditors
The Company has an in-house internal audit team, which monitors the effectiveness of the internal control systems. It reports to the Managing Director and Audit Committee about the adequacy and effectiveness of the internal control system of your Company. Your Company also obtains the services of Ernst and Young, LLP, and other reputed professionals to audit specific locations and processes for the year 2018-19.
The recommendations of the internal audit team on improvements in the operating procedures and control systems were also presented to the Audit Committee for strengthening the operating procedures.
During the year under review, the Internal Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, appointed S.S. Zanwar & Associates, Cost Accountants in Practice, (Registration No. 100283) Cost Auditors as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2020 at a remuneration of H7.00 lac plus other applicable taxes and actual travel, stay, conveyance and other miscellaneous expenses. Members are requested to ratify the remuneration payable to the Cost Auditors for the year 2019-20 at the ensuing Annual General Meeting of the Company, in accordance with Section 148 of the Companies Act, 2013.
The Cost Audit report for the financial year ended March 31, 2018 was duly filed with the Central Government within the due date and the Company has maintained the Cost Records/Accounts as required under Section 148 of the Companies Act, 2013.
During the year under review, the Cost Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.
Particulars of Loans, Guarantees or Investments
The details of Loans, Guarantees, Investments and Security made during the Financial Year ended March 31, 2019 is given in compliance with the provisions of Section 186 of the
|
Sl No. |
Legal name of the entity |
Relationship |
Country of incorporation and Date |
Full address |
|
1 |
HIL LIMITED |
Holding Company |
India, June 23, 1955 |
Office No. 1 & 2, Level 7, SLN Terminus, Gachibowli, Hyderabad 500032 |
|
2 |
HIL International GmbH |
Subsidiary (Wholly Owned Subsidiary) |
Germany, July 4, 2018 |
MiUenkamp 7-8, 48653 Coesfeld, Germany |
|
3 |
Parador Holding GmbH |
Step Down Subsidiary (WOS to HIL International GmbH) |
Germany, June 20, 2016 |
MiUenkamp 7-8, 48653 Coesfeld, Germany |
|
4 |
Parador GmbH |
Step Down Subsidiary (WOS to Parador Holding GmbH) |
Germany, September 21, 2015 |
MiUenkamp 7-8, 48653 Coesfeld, Germany |
|
5 |
Parador Parkettwerke GmbH |
Step Down Subsidiary (WOS to Parador GmbH) |
Austria, April 10, 1998 |
Wiener Strasse 66, 7540 Gussing, Austria |
|
6 |
Parador (Shanghai) Trading Co., Ltd. |
Equity Joint venture (50%) of Parador GmbH and (50%) Horgus Oriental Glamour Co., Ltd,. |
Republic of China, August 8, 2018 |
Room 1006, Floor 10, No, 233 Taicang Road, Huangpu District, Shanghai Municipality, the People''s Republic of China |
|
7 |
Supercor Industries Limited |
Equity Joint Venture (33%) |
Nigeria July 1, 1974 |
5 Ashaka Close, Industrial Estate, P.O. Box 51, Bauchi, Nigeria |
Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and the same is provided in the notes to financial statements.
Deposits
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2019.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013, Regulation 24A of the Securities and Exchange Board of India (LODR) Regulations, 2015 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed P S Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company.
The secretarial audit report issued by P S Rao and Associates, Company Secretaries for the financial year ended March 31, 2019 is given in the Annexure (VII) attached hereto and forms part of this report. The report does not contain any qualifications, reservations or adverse remarks.
During the year under review, the Secretarial Auditors have not reported any matter under Section 143(12) of the Act, and therefore no details are required to be disclosed under Section 134 (3) (ca) of the Act.
Subsidiaries and Joint Ventures
During the year your Company has set up a Wholly Owned Subsidiary i.e HIL International GmbH, Germany for acquiring 100% shareholding of Parador Holding GmbH, Germany. The following is the group structure of your Company after the said acquisition:
During the year, Mr. Dhirup Roy Choudhary, Managing Director & CEO of the Company has been appointed as Managing Director on the Board of it''s Subsidiaries.
During the year, in compliance with the requirements of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulations, 2015, your Company has appointed Dr. Arvind Sahay, Independent Director as Director on the Board of HIL International GmbH, Germany (wholly owned subsidiary)
Supercor Industries Ltd
Your Company holds 33% of the share capital in Supercor Industries Limited ("Supercorâ), a Company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders holds remaining 67% of the share capital in Supercor.
As informed earlier, Supercor suspended its operations from November 2015, none of the employees of Supercor are attending office and the power connection at the offices of Supercor has also been discontinued. The winding-up petition filed by the Company in 2016 was dismissed in Nigerian Court. Interim Board has been set up by the Nigerian Government for assessing the revival of the operations. However, detailed plan of action from the interim Board of Supercor is awaited. While the investment and receivables are completely provided for, based on the current status, the Management believes there are no obligations for the Company towards Supercor.
In view of the above, Company is not in a position to obtain any information/financials from the Joint Venture entity and hence the consolidated financial statements does not include the financial performance of Supercor Industries Ltd.
As per the provisions of Section 129 of the Companies Act,
2013 read with Rule 5 of Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies/ Associate Companies/Joint Ventures in Form AOC-1 attached as Annexure (VII) to this report.
Consolidated Financial Statements
The Consolidated Financial Statements prepared in accordance with Indian Accounting Standards "Ind ASâ as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013. As per the provisions of Section 136 of the Companies Act, 2013, the Company will also place separate Audited accounts of its Subsidiaries on its website.
Employee Stock Options
The Company has an operative Employees Stock Option Scheme 2015 (ESOS-2015) which provides for grant of Stock Options to eligible employees of the Company.
Nomination & Remuneration cum Compensation Committee of the Board of Directors, inter alia, administers and monitors the Employees'' Stock Option Scheme of the Company in accordance with the Securities and Exchanges Board of India (Share Based Employee Benefits) Regulations, 2014 ("Securities and Exchange Board of India Regulationsâ).
The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder and Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and erstwhile Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided in Annexure (VIII) to this report and there were no options granted to eligible employees during the period.
Certificate from B S R & Associates LLP, Chartered Accountants, (ICAI Firm Registration Number: 116231W/ W-100024), Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the Securities and Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015 will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.
Particulars of Employees
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & 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 provided in Annexure (IX) to this report.
Compliance With Secretarial Standards
During the year under review your Company has complied with the respective Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings, General Meetings and Dividend.
Material Development after the end of the year
No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this Report.
Human Capital and Industrial Relations
Your Company believes that the quality of its employees is the key to its success and is committed to providing necessary human resource development and training opportunities to equip employees with additional skills to enable them to adapt to contemporary technological advancements and builds as a culture which encourages open, fearless and transparent communication. The recruitment process is aligned to attract the best talent available and Diversity at workplace is another priority that has significant emphasis of the Company
Your Company''s management firmly believes that a strong and stable industrial relation is key to the success of your organization. Over the years, the management has made sincere and continued efforts for the development of an atmosphere of mutual co-operation, confidence and respect, duly recognizing the rights of the workers. A rigorous labour law compliance mechanism is in place to help the organization run its businesses in the most ethical and efficient manner.
The Directors wish to place on record their sincere appreciation for the co-operation received from employees/workers at all levels.
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure (X) attached hereto and forms part of this report.
Significant and Material Orders Passed by the Regulators/Court
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
Material Changes and Commitments
There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year March 31, 2019 to which the financial statements relates and the date of signing of this report.
Change in the Nature of Business
There has been no change in the nature of business of the Company
Investor Education and Protection Fund (IEPF)
In terms of Section 123, 124 and 125 of the Companies Act, 2013, the unclaimed dividends and shares wherein the dividends are unclaimed for a period of seven consecutive years for the Final Dividend for the year 2010-11, Interim Dividend for the year 2011-12 has been transferred to the IEPF Fund/Suspense account respectively. The details of shares transferred is available in the website of the Company.
Further, as per the provisions of Section 125, the share(s) wherein the dividend is unclaimed for a period of consecutive seven (07) years will be transferred to the suspense account as prescribed by the IEPF Rules, therefore the shareholders whose dividends are unclaimed for consecutive seven years from 2011-12 (list of the shareholders along with the unclaimed dividend details are available on the website of the Company www.hi1.in/investors are requested to claim their unclaimed dividend at the earliest.
Shareholders are requested to ensure their dividends are encashed on time. In case of non-encashment of dividends, shareholders are advised to approach the Company or RTA to claim their unclaimed dividends.
Acknowledgements
The Board of Directors take this opportunity to place on record their appreciation to all the Stakeholders of the Company, viz., customers, investors, banks, regulators, suppliers and other business associates for the support received from them during the year under review. The Directors also wish to place on record their deep sense of gratitude and appreciation to all the employees for their commitment and contribution towards achieving the goals of the Company.
On behalf of the Board of Directors
CK Birla
Place: New Delhi Chairman
Date : May 27, 2019 (DIN: 00118473)
Global Economy
Mar 31, 2018
Dear Members
This year marks the 71st year of the Company since incorporation and we take pride in being the market leader in the Building Material Segment with range of products available under the brands âCharminarâ, âCharminar Fortuneâ, âBirla Aeroconâ and âHYSILâ.
Your Board of Directors are pleased in presenting their report and the Audited Financial Statements of the Company (âthe Companyâ or âHILâ) for the year March 31, 2018.
Financial Results
(Rs. in lacs)
|
Particulars |
2017-18 |
2016-17 |
|
Revenue |
134868 |
126797 |
|
Earnings Before Interest, Depreciation & Tax |
17068 |
12653 |
|
Less : Interest |
387 |
518 |
|
Depreciation |
4690 |
4095 |
|
Profit Before Tax and Exceptional items |
11991 |
8039 |
|
Less : Exceptional items |
0 |
688 |
|
Profit before Tax |
11991 |
7351 |
|
Less : Taxes |
3915 |
1889 |
|
Profit for the year |
8075 |
5462 |
|
Other Comprehensive Income - net of tax |
-57 |
-44 |
|
Total Comprehensive Income for the year |
8018 |
5418 |
Note: The financial statements for the year ended March 31, 2018 are prepared under Ind AS (Indian Accounting Standards) and accordingly previous year numbers are re-casted in accordance with the provisions of Ind AS for comparative information.
Indian Accounting Standards (Ind AS)
The Ministry of Corporate Affairs (âMCAâ) vide its notification in the Official Gazette dated February 16, 2015, notified the Indian Accounting Standards (âInd ASâ) applicable to certain class of companies Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013 read with the rules made thereunder. For your Company, the said new accounting standards are applicable from April 1, 2017 with a transition date of April 1, 2016. The impact on account of the transition is disclosed as part of notes to financial statements.
Revenue
Your Company, after witnessing 2 years of de-growth, is back to growth trajectory in the current year and delivered a good performance both in quantitative and qualitative terms wherein all the business verticals outperformed over last year numbers. The net revenue from operations on a standalone basis has increased to RS.1325.05 Crore from RS.1245.42 Crore in the previous year registered a growth of 6.4%. Our Roofing Segment has contributed to RS.856.70 Crore and Building Solutions has contributed to RS.399.86 Crore.
Profit Before Tax
During the year under review, your Company has reported a Profit Before Tax (PBT) of RS.119.91 Crore before considering other comprehensive income/expenditure as against RS.73.51 Crore reported in previous year thus registering a growth of 63%, mainly driven by cost saving initiatives taken across the Company.
Net Worth
The net worth as at March 31, 2018 improved to RS.566.12 Crore as against RS.503.52 Crore as on March 31, 2017. There is no long term interest bearing debt as on March 31, 2018.
The earnings per share grew by 48%, i.e RS.108.21 as on March 31, 2018 as against RS.73.19 as on March 31, 2017. While the book value per share as at March 31, 2018 was at RS.759/- as against RS.675/- as on March 31, 2017.
Credit Rating
During the year under review, ICRA upgraded the Companyâs long term rating to âICRA AA-/Stableâ and retained the short term rating at âICRA A1 â.
Dividend
During the year under review, the Board of Directors declared an interim dividend of RS.10.00 per equity share (100% of the paid-up value). Your directors are pleased to recommend a final dividend of RS.12.50 per equity share (125% of the paid-up value) for your consideration and approval at the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year 2017-18 works out to be RS.22.50 per equity share (225 % of the paid-up value) as against the total dividend of RS.20.00 per equity share (200% of the paid-up value) declared in the previous year.
The total dividend outgo would amount to RS.20.21 Crore (Including Corporate Dividend Tax) and the Company has transferred RS.10.00 Crore to General Reserves out of the profits for the year.
Liquidity
Exceptional focus and aggressive drive on working capital management during the year helped your Company to be debt-free for the second consecutive year and maintain sufficient cash to meet our operational and strategic requirements.
Share Capital
The paid up Equity Share Capital as on March 31, 2018 was RS.7.49 Crore. During the year under review, the Company has neither issued any shares with differential voting rights nor sweat equity.
Listing with Stock Exchanges
The Equity Shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the financial years 2017-2018 and 2018-2019 has been paid to these exchanges.
Particulars of Loans, Guarantees or Investments
Particulars of Loans, Guarantees and Investments as required under the provisions of Section 186 of the Companies Act, 2013 are provided in note no. 7 to the financial statements.
Deposits
The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on March 31, 2018.
State of Companyâs Affair
A focused approach and unique strategy adopted by the Company for each business division with an objective to achieve higher growth and profitability, furthered by various initiatives like expanding product capacities, launching of new products, cost optimization along with implementation of Goods and Service Tax (GST) by the Government; all contributed to an impressive performance by your Company both in terms of revenue and profitability.
Roofing Solutions:
Your Company continues to enjoy its leadership position and trust in the roofing industry, which helped the business to grow stronger, even in the highly competitive / price sensitive market. Goods and Service Tax implemented by the Central Government, effective July 1, 2017 reduced the tax rates to 18% which helped the Industry to grow as the product became more competitive to the end consumers. Enhanced Customer centric approach, focus on high potential geographies, marketing initiatives, cost optimisation and superior quality than its peers, continue to help your Company to overcome most of the challenges. The Coloured Steel Sheets continue to synergise with the existing retail network of your Company.
âCharminar Fortuneâ is a new addition to your Companyâs Roofing Solutions segment during the year; Next Gen nonasbestos corrugated roofing sheets in this industry. It has excellent load bearing capacity, thermal resistance, sound proofing, fire resistance and a life of many decades. This advanced research-based, green Roofing Solution has been developed in-house by your Company and we are confident that this will be a game changer in the industry and will take your Company to newer heights in the years to come.
Overall the roofing business ended the year with a growth of 6% in quantity terms over previous year and we continue to consolidate our position in the industry.
Building Solutions
In line with our evolving business strategies, we have rebranded âAEROCON as BIRLA AEROCONâ during the year. This re-branding exercise started paying off as the brand have demonstrated strong PULL factor in the market. Your Company continued its position as a comprehensive solution provider in building materials category by offering all relevant products under one roof.
Wet-Walling Solutions
Wet-Walling category consists of âFly Ash Blocksâ, an eco-friendly building material, âBirla Aerocon Block Jointing Mortarâ, âBirla Aerocon wall puttyâ and âBirla Aerocon Readymix Plasterâ. All Products together offers a complete range of solutions to the stakeholders in the Building Material industry.
Fly Ash Blocks continues to enjoy its leadership position in the construction industry in view of its superior quality and latest technology driven manufacturing processes. During the year under review, Fly Ash Blocks has achieved a growth of 5% in quantity terms over previous year. Fly Ash Blocks along with Birla Aerocon Block Jointing Mortar, Birla Aerocon wall putty and Birla Aerocon Readymix Plaster continue to be a preferred choice among the builders.
Dry-Walling Solutions
Dry-Walling category consists of âPanelsâ, âBoardsâ and âSmart bondâ under the brand name âBIRLA AEROCONâ. Panels & Boards continue to be the preferred choice of the Architects and Designers. With strong sales force and better relationship with external stakeholders backed by premium brand, this product category registered a growth of 12% in quantity terms during the year under review as compared to previous year. Your Company continues to maintain its preferred position in this category.
Government push towards creating âSmart Citiesâ offers great potential to your Company in Tier 2 & Tier 3 cities. Accordingly sales force augmentation is planned to derive maximum benefit from these segments. Unique concept selling approach, supported by the strong brand recall differentiates âBIRLA AEROCONâ from other players in the industry.
Thermal Insulation
Thermal Insulation business under the brand HYSIL, has reported a growth of 61% in quantity terms due to enhanced sales efforts and improved demand from industrial domestic and overseas customers for their new projects. Key driver for volume growth in this business will mainly depend on new capacity creation in the form of brown field or new green field projects by Industries.
Plumbing Solutions
During the year under review, the Pipes & Fittings business registered a growth of 34% in revenue terms as compared to previous year. The said growth was mainly driven by expanding the dealer base, well planned marketing activities and quality centric approach. The business realized the need for enhancing the product range to expand further. In this direction, your Company has invested sizeable amount in establishing capacity for launching new product categories. As a first step your company has set up a facility for manufacture of âSWR (Soil, Waste & Rain) Pipes and Pressure Pipesâ at its plant located at Faridabad, Haryana with an annual capacity of 2160 MT and also at its plant located at Golan, Gujarat with an annual capacity of 3060 MT These products are marketed under the brand â Birla Aeroconâ. Your company also is in the process of setting up CpVC and UpVC Pipes & Fittings facility at the Golan during the year 2018-19 which will further support the growth of this business.
Your Company believes that with this augmentation of the portfolio, relationships with the trade channel, plumbers, influencers and builders/developers will improve considerably thus in turn resulting in improved performance of this division.
Branding
As part of brand promotion activity, your Company has associated with the Indian Premier League (IPL) by partnering with Chennai Super Kings (CSK), which is making a comeback after two years. On account of this engagement, all the CSK playersâ uniforms will carry âHILâ, âCharminarâ and âBirla Aeroconâ brands endorsed.
With this association, the Company aims to boost HIL brand visibility as well as its reach amongst its consumers, dealers and influencers. The Companyâs caption âHIL - Together We Buildâ is a game-changer towards strengthening the brandâs commitment and supporting its vision of building a dream nation with its innovative products. While quality of products is a prerequisite for progressive growth for HIL, it will be driven by diversification and enhancement of its products. The association will highlight HIL as a one-stop shop solution provider for all building requirements for modern construction.
Awards
Indiaâs Best Company of the Year
Your Company was bestowed with the prestigious title of âIndiaâs Best Company of the Year - 2017â as well as âIndiaâs Most Trusted Brand of the Year - 2017â by IBC INFOMEDIA (A Division of International Brand Consulting Corporation, New Jersey, USA). This selection was based on overall market share, innovation, work place culture, leadership, business ethics, Governance, Corporate Social Responsibility and such other factors.
Excellence in Operational Manufacturing
In our continuous drive to excel in our manufacturing capabilities and as a result of various actions taken towards the same, your Company was bestowed with most prestigious award for âExcellence in Operational Manufacturingâ for three of its roofing manufacturing facilities from JIPM, Japan. The plants located at Kondapally, Andhra Pradesh and Sathariya, Uttar Pradesh challenged the âTPM Excellence Awardâ under Category A and Balasore Plant at Odisha challenged the same award under Category B.
The awards are also a testament to the dedication of the personnel associated with the respective facilities towards production excellence.
Best Management Award
The labour department of Government of Andhra Pradesh has awarded the roofing manufacturing plant at Kondapally, Andhra Pradesh with the âBest Management Award for 2017â. This acknowledges the excellent management practices, harmonious industrial relation and industrial productivity of your Company.
Goods and Service Tax Facilitation Award
The Commercial Taxes Department, Telangana felicitated your Company a Certificate of Appreciation & Memento, acknowledging the efforts in terms of assisting the department for testing the migration activities to Goods and Service Tax and also for extending requisite support to small traders in that range.
NAMC Award
The Roofing plant at Kondapally, Andhra Pradesh has bagged the prestigious âGold Awardâ from The National Awards for Manufacturing Competitiveness (NAMC) during the year. This signifies the quality oriented approach of your Company adopted for manufacturing the products.
Unnati
Charminar UNNATI, a programme run by your Company for customer loyalty rewards was adjudged the winner of Best use of relationship marketing in a loyalty program -B2B segment.
Management Discussion & Analysis Report
A Report on Management Discussion & Analysis is appended as Annexure (I) to this report as per the requirements of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.
Directorsâ & Key Managerial Personnel
Pursuant to the provisions of Section 149 & 184 of the Companies Act, 2013 and under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. P Vaman Rao (DIN: 00069771), Mr. Yash Paul (DIN: 00580681) and Mrs. Gauri Rasgotra (DIN: 06862334), Independent Directors of the Company have submitted a declaration that each of them meet the criteria of independence as prescribed in Section 149(6) of the Companies Act, 2013 and SEBI Regulations and there has been no change in the circumstances which may affect their status as an Independent Director during the year.
In accordance to provisions of Section 152 of the Companies Act, 2013 and pursuant to Articles of Association of the Company, Mr. CK Birla (DIN: 00118473) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
On recommendation of the Board, the members at their Annual General Meeting held on July 18, 2017 has appointed Mr. Dhirup Roy Choudhary (DIN: 07707322) as Managing Director & CEO (Key Managerial Personnel) for a period of 5 years w.e.f January 16, 2017.
For Director seeking re-appointment at the ensuing Annual General Meeting of the Company the particulars as required to be disclosed in accordance with Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is included in the notice of the ensuing Annual General Meeting forming part of this Annual Report.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Dhirup Roy Choudhary, Managing Director & CEO, Mr. KR Veerappan, Chief Financial Officer and Mr. G Manikandan, Company Secretary & Financial Controller are the Key Managerial Personnel of the Company and during the year there was no change in the Key Managerial Personnel.
Board & Committees
Board Meetings
During the year four meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the directors are given in the Corporate Governance Report forming part of this annual report. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Committees of the Board
Audit Committee
Audit Committee of the Company meets the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year four meetings of the Committee were held, the details along with the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.
Nomination and Remuneration Cum Compensation Committee
Nomination and Remuneration cum Compensation Committee meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Nomination and Remuneration cum Compensation Committee.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually and the Committees of the Board.
A structured questionnaire was circulated after taking into consideration the inputs received from Directors, covering aspects of the Boardâs functioning such as adequacy of the Composition of the Board and its Committees, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of the Individual Directors including the Chairman of the Board. The Directorsâ performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc.
The performance evaluation of the Independent Directors was carried out by the entire Board. Further the performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors.
Familiarisation Programme for Directors
In addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the director under the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 were given and explained to the new Director.
During the year there were no new directors appointed and there was no change in composition of the Board.
Corporate Social Responsibility Committee (CSR)
Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The details of the composition of the Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report.
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made thereunder, the brief outline of the Corporate Social Responsibility (âCSRâ) policy of the Company and the initiatives undertaken by the Company on the CSR activities during the year are given in Annexure (II) to this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The said policy is available on the Companyâs website âhttp://hil.in/investors/codes-policiesâ.
As per the provisions of Section 135 of the Companies Act, 2013, 2% of average Net Profits of the Company for the immediately preceding three financial years calculated as per Section 198 of the Companies Act, 2013 works out to RS.1.49 Crore and the Company has spent RS.2.42 Crore on CSR activities in the areas of healthcare, education and others.
Stakeholders Relationship Committee (SRC)
The Stakeholders Relationship Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. During the year four meetings of the Committee were held, the details along with the composition of the Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Committee.
Extract of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and rules framed thereunder, the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure (III) and forms part of this report.
Directorsâ Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time, and to the best of their knowledge and information furnished, the Board of Directors state that:
I. In preparation of the Annual Accounts for the year ended March 31, 2018 all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and Companies Act, 2013 have been followed and there were no material departures.
II. We have adopted 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 the financial year ended March 31, 2018.
III. We have 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 Annual Accounts for the year ended March 31, 2018 has been prepared on a going concern basis.
V. Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
VI. The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Corporate Governance
Your Company is committed to good Corporate Governance coupled with adhering best corporate practices. The report on Corporate Governance for the year ended March 31, 2018 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure (IV). The Certificate from the Auditors of the Company M/s. B S R & Associates LLP Chartered Accountants, [ICAI Firm Registration Number: 116231W/W-100034] regarding compliance of conditions of Corporate Governance is attached to the report of Corporate Governance forming part of this annual report.
Policies Vigil Mechanism
Pursuant to the requirement laid down in the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company has a Whistle Blower Policy as part of its Vigil Mechanism to deal with instance of fraud and mismanagement, if any. The Vigil Mechanism framework ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination shall be meted out to any person for a genuinely raised concern. The designated officer/ Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/ misconduct at [email protected]. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
The details of the same are provided in the report on Corporate Governance forming part of this report. The Whistle Blower Policy is also posted in the Investors section of the Companyâs website www.hil.in on the following link http://hil.in/ investors/codes-policies/.
All the complaints received under Vigil Mechanism Policy were investigated thoroughly and detailed update including action taken, if any, on the same were presented to the Audit Committee and Statutory Auditors of the Company.
Remuneration Policy
Company has framed and adopted the Nomination & Remuneration Policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and fixing their remuneration and other entitlements. The Nomination & Remuneration Policy is in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligation and Disclosure) Requirements, 2015 and the same is provided in the Corporate Governance Report. The Nomination & Remuneration Policy is also posted in the Investors section of the Companyâs website www.hil.in on the following link http://hil.in/investors/codes-policies/.
Sexual Harassment Policy
Diversity and Inclusion is one of the major thrust of your Company this year and provides an equal opportunity to all; it has been an endeavour of the Company to support women professionals through a safe, healthy and conducive working environment by creating and implementing proper policies to tackle issues relating to safe and proper working conditions. As per the provisions of âThe Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013â has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.
In the year under review, the Company has not received any complaint under the said Policy.
Related Party Transactions
The Company is having a robust process in identifying and monitoring of related parties transactions. All related party transactions that were entered into during the financial year were on an armâs length basis and were in the ordinary course of business. There were no materially significant related party transactions entered or transacted by the Company with Related Parties, Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Power) Rules, 2014, omnibus approval for entering into the transactions at armâs length with the related parties has been obtained from the Audit Committee. The said transactions with related parties are routine and repetitive in nature.
A summary statement of the transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on quarterly basis. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (V) to this report.
None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis-a-vis the Company and None of Directors are relatives to each other.
Risk Management
The Company has laid down the procedure for risk assessment and its mitigation through an internal Risk Committee. Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Risk Management Policy details the Companyâs objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities.
During the year, the Board reviewed the elements of risk and the steps taken to mitigate the risks and in the opinion of the Board there are no major elements of risk, which has the potential of threatening the existence of the Company.
Other Policies
The Company has also adopted the following policies, as required by Companies Act, 2013 and SEBI Regulations and the same are available on the website of the Company (www. hil.in/investors/ policies/)
- Dissemination of Material Events Policy
- Documents Preservation Policy
- Monitoring and Reporting of Trading by Insiders
- Code of Practices and Procedures for Fair Disclosures
Internal Financial Controls
The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include:
1. All transactions are recorded in the ERP system SAP
2. Well defined policies, guidelines, and Standard Operating Procedures (âSOPsâ), authorization and approval procedures.
3. The internal financial controls of the Company are adequate to ensure accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient manner.
4. The Company has appointed Internal Auditors to check the Internal Controls and to ensure whether the workflow of the organization is in accordance with the approved policies of the Company; and
5. Systems to ensure compliances with prevalent laws and statutory compliances are in place.
Auditors Statutory Auditors
As per Section 139 of the Companies Act 2013, M/s. B S R & Associates LLP Chartered Accountants, (ICAI Firm Registration Number: 116231W/W-100024) have been appointed as Statutory Auditors for a period of five years i.e from conclusion of 70th Annual General Meeting (held on July 18, 2017) till the conclusion of the 75th Annual General Meeting, subject to ratification every year.
Resolution for ratifying the appointment of M/s. B S R & Associates LLP Chartered Accountants, (ICAI Firm Registration Number: 116231W/W-100024) as the Statutory Auditors is included in the notice of the ensuing Annual General Meeting.
Internal Auditors
The Company has an in-house internal audit team, which monitors the effectiveness of the internal control systems. It reports to the Managing Director about the adequacy and effectiveness of the internal control system of your Company. Your Company also obtains the services of M/s. Ernst and Young, LLP, Chartered Accountants and other reputed Chartered Accountants to audit specific locations and processes for the year 2017-18.
The recommendations of the internal audit team on improvements in the operating procedures and control systems were also presented to the Audit Committee for strengthening the same.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed thereunder, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, appointed M/s. S.S. Zanwar & Associates, as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending March 31, 2019 at a remuneration of RS.7 lacs. Members are requested to ratify the remuneration payable to the Cost Auditors for the year 201819 at the ensuing Annual General Meeting of the Company, in accordance with Section 148 of the Companies Act, 2013.
The Cost Audit report for the financial year ended March 31, 2017 was duly filed with the Central Government within the due date.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. PS. Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company. The secretarial audit report issued by M/s. PS. Rao and Associates, Company Secretaries for the financial year ended March 31, 2018 is given in the Annexure (VI) attached hereto and forms part of this Report. The report does not contain any qualifications, reservations or adverse remarks.
Joint Ventures and Consolidated Financial Statements
Your Company holds 33% of the share capital in Supercor Industries Limited (âSupercorâ), a company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold remaining 67% of the share capital in Supercor.
Due to severe cash crisis, Supercor suspend the operations since November, 2015 and the Company had initiated and filed winding petition for recovery of dues from âSupercor Industries Limitedâ, Nigeria in the year 2016. In view of the above, Company is not in a position to obtain any information/ financials from the JV entity and hence consolidation of financial statements become practically impossible.
Based on the previous approval of the Board, the Company has filed an application with Register of Companies under Section 129, 459 of the Companiesâ Act, 2013 informing the financials for the year 2017-18 will be prepared and presented at the ensuing Annual General Meeting on standalone basis due to non-availability of financials from Supercor and seeking exemption from consolidating the financial statements of the Supercor with the financial Statements of the Company through e-Form GNL 1 Vide SRN No. G775 28024 and the said form taken on record by MCA.
As per the provisions of Companies Act, 2013 read with applicable accounting standards (Ind AS), Company is presenting the financial statements for the year March 31, 2018 on standalone basis and suitable note for nonconsolidating the accounts of JV is incorporated vide note no 44(b) to the financial statements.
Information required pursuant to Section 129(3) of the Companies Act, 2013 a statement containing salient features of the Subsidiaries/ Joint Ventures of the Company is provided in Form AOC-1 attached as Annexure (VII) to this report.
Employee Stock Options
The Company has an operative Employees Stock Option Scheme 2015 (ESOS-2015) which provides for grant of Stock Options to eligible employees of the Company.
Nomination & Remuneration cum Compensation Committee of the Board of Directors inter alia, administers and monitors the Employeesâ Stock Option Scheme of the Company in accordance with the Securities and Exchanges Board of India (Share Based Employee Benefits) Regulations, 2014 (âSEBI Regulationsâ). During the year, the members at their 70th Annual General Meeting held on July 18, 2017 has amended the scheme, wherein âClause 3.1.13(1)â was inserted.
The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided in Annexure (VIII) to this report, â35600â options granted to one eligible employee during the year from the existing pool account.
Certificate from M/s. B S R & Associates LLP Chartered Accountants, (ICAI Firm Registration Number: 116231W/W-100024), Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.
Particulars of Employees
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & 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 provided in Annexure (IX) to this report.
Human Capital and Industrial Relations
Your Company believes that its greatest assets is its human capital and hence it places a very high importance to Employee development, retention and engagement. HIL management is progressively working to build a culture which encourages open, fearless and transparent communication. The recruitment process is totally aligned to attract the best talent available. Significant emphasis is being placed in bringing in diversity at the workplace. In its endeavor to become a paperless organization, many of the key Human Resources verticals such as Performance Management, Employee Services etc., have now been automated.
In the last 12 months, significant initiatives were undertaken to enhance Employee Connect across all locations of the organization. These includes top management making regular visits to work locations and addressing employees in person, Managing Director & CEO reaching out to employees, all at the same time, through video and audio conferencing system and several small group meetings to improve employee engagement. In addition, numerous initiatives such as festival celebration, sports events, health care activities etc., have been undertaken to ensure that the organization provides a positive work environment to your employees. These initiatives resulted in achieving an employment satisfaction score of 74% as against 50% in 2015-16.
The Companyâs management firmly believes that a strong and stable industrial relation is key to the success of your organization. Over the years, the management has made sincere and continued efforts for the development of an atmosphere of mutual co-operation, confidence and respect, duly recognizing the rights of the workers. A rigorous labour law compliance mechanism is in place to help the organization run its businesses in the most ethical and efficient manner.
As on March 31, 2018, the Company had 1562 employees.
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure (X) attached hereto and forms part of this report.
Significant and Material Orders Passed by The Regulators/Court
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
Material Changes and Commitments
There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year March 31, 2018 to which the financial statements relates and the date of signing of this report.
Investor Education And Protection Fund (IEPF)
In terms of Section 123, 124 and 125 of the Companies Act, 2013, the unclaimed dividends and shares wherein the dividends were unclaimed for a period of seven consecutive years (Final Dividend for the year 2009-10, Interim Dividend for the year 2010-11) has been transferred to the IEPF
Fund/Suspense account respectively. The details of shares transferred is available in the website of the Company.
Further, as per the provisions of Section 125, the share(s) wherein the dividend is unclaimed for a period of consecutive seven (07) years will be transferred to the suspense account as prescribed by the IEPF Rules, therefore the shareholders whose dividends are unclaimed for seven consecutive years from 2011-12 (list of the shareholders along with the unclaimed dividend details are available on the website of the Company www.hil.in/investors) are requested to claim their unclaimed dividend at the earliest.
Shareholders are requested to write to the Company or RTA for claiming their unclaimed dividends.
Acknowledgments
The Board of Directors take this opportunity to place on record their appreciation to all the Stakeholders of the Company, viz., customers, investors, banks, regulators, suppliers and other business associates for the support received from them during the year under review. The Directors also wish to place on record their deep sense of gratitude and appreciation to all the employees for their commitment and contribution towards achieving the goals of the Company.
On behalf of the Board of Directors
CK Birla
Place: New Delhi Chairman
Date : April 26, 2018 DIN: 00118473
Mar 31, 2017
TO THE SHAREHOLDERS
The Directors take pride in congratulating all the stakeholders on completion of seven decades in the Building Material Industry since its incorporation. These seven decades have enabled your Company to become market leader in the Building Material Segment. Charminar and Aerocon are among the most trusted brands in the industry.
Your Directors take pleasure in presenting their Report and the Audited Financial Statements of your Company for the year ended 31st March, 2017.
Financial Results
(RS, In lacs)
|
2016-17 |
2015-16 |
|
|
Net Revenue from operations |
105359 |
109628 |
|
Earnings Before Interest, Depreciation & Tax |
12644 |
11172 |
|
Less : Interest |
518 |
917 |
|
Depreciation |
4095 |
3974 |
|
Profit Before Tax and Exceptional items |
8031 |
6281 |
|
Less: Exceptional items |
688 |
276 |
|
Profit before Tax |
7343 |
6005 |
|
Less : Taxes |
1886 |
2039 |
|
Profit for the year |
5456 |
3966 |
|
Surplus in P&L account as per previous year |
7018 |
5624 |
|
Available for Appropriation |
12474 |
9590 |
|
Transfer to General Reserve |
1000 |
1000 |
|
Interim Dividend on Equity Shares |
746 |
560 |
|
Proposed Final Dividend on Equity Shares* |
- |
746 |
|
Corporate Dividend Tax* |
152 |
266 |
|
Balance Carried to Balance Sheet |
10577 |
7018 |
*Refer to note 2(a)(ii) in notes to financial statement, with regard to treatment of final dividend for the year 2016-17.
Financial Position
The net worth as at 31st March, 2017 improved to RS,501 cr [without considering final dividend and tax thereon aggregating to RS,9 cr, if considered the net worth of the Company would be RS,492 cr] as against RS,460 cr [after considering final dividend and tax thereon aggregating to RS,9 cr] reported in previous year. There is no long term interest bearing debt as on 31st March, 2017. ICRA rated the Company''s long term bank loan facilities at "ICRA A /Stable" and the short term bank facilities at âICRA A1 ".
During the year under review, the gross fixed assets including capital work in progress increased by RS,33.92 cr (net of deletions of RS,3.04 cr). The entire additions were funded through internal accruals. The earnings per share for the financial year 2016-17 grew by 38% at RS,73.12 as against RS,53.15 for the previous financial year, while the book value per share as at 31st March, 2017 was at H672 as against H617 as on 31st March, 2016.
Dividend
During the year under review, the Board of Directors declared an interim dividend of H10.00 per equity share (100% of the paid-up value). Your Directors are pleased to recommend a final dividend of H10.00 per equity share (100% of the paid-up value) for your consideration and approval at the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year 2016-17 would be H20.00 per equity share (200% of the paid-up value) as against the total dividend of H17.50 per equity share (175% of the paid-up value) declared in the previous year.
The total dividend outgo would amount to RS,17.96 cr (Including Corporate dividend tax), a payout of 33% of the profit after tax of the Company for the financial year 2016-17 and the Company has transferred RS,10.00 cr to General Reserves out of the profits for the year.
Share Capital
The paid up Equity Share Capital as on 31st March, 2017 was H7.49 cr. During the year under review, the Company has neither issued any shares with differential voting rights nor sweat equity. As on 31st March, 2017, Mr. CK Birla, Chairman holds 51,376 equity shares of the Company. None of the Directors of the Company, except as specified above, hold shares or convertible instruments in the Company.
Listing with Stock Exchanges
The Equity Shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. The annual listing fees for the financial year 2017-2018 have been paid to these exchanges.
Particulars of Loans, Guarantees or Investments
Particulars of Loans, Guarantees and Investments as required under the provisions of Section 186 of the Companies Act, 2013 are provided in note no. 11A to the Financial Statements.
Deposits
The Company has not accepted any deposits covered under chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on 31st March, 2017.
State of Companyâs Affair
In the year 2016-17, the Company has reported net revenue of RS,1054 cr as compared to RS,1096 cr in the previous year and profit before tax for the year under review stood at RS,73.43 cr as compared to RS,60.05 cr in the previous year registering a growth of 22%. The operating profit (earnings before depreciation, interest, tax and amortization-EBITDA) for the year stood at RS,126 cr as against RS,112 cr in the previous year, representing 12% of net revenue.
As a result of various external factors like weak monsoon in certain parts of the Country followed by demonetization in third quarter, the industry as a whole declined. Your Company''s focused approach with unique strategy adopted for each business division, helped to improve the profitability despite a minor decline in revenue by 4%.
Roofing
Your Company continue to enjoy its leadership position and trust in the roofing industry, which helped the business to sustain its market share despite tough market conditions. Your Company''s customer centric approach, focus on high potential geographies, marketing initiatives, cost optimization and superior quality than its peers helped to overcome most of the challenges faced by the industry. Some parts of the Country witnessed poor demand due to migration to alternate products which affected the demand for Fibre Cement Sheets. The new product âColored Steel Sheets" introduced by the Company in 2015-16 stabilized during the year under review. In order to capture the growing demand for Colored Steel Sheets in the eastern part of the Country, your Company expanded its manufacturing footprint by setting-up a manufacturing unit in Odisha to carter to the region.
Overall, the Roofing business ended the year with a decline of 10% in quantity terms as compared to industry de-growth of 8%.
Building Solutions
Your Company positioned itself as a complete solution provider in Building materials category. Building Solution business broadly classifies into Wet-Walling and Dry-Walling Solutions.
Wet-Walling Solutions
Under Wet-Walling category, Fly-Ash Bricks (AAC), an eco-friendly building material used in construction activities, commands the confidence of the builders with its superior strength over the traditional bricks.
Other products in this category includes âSmart fix", âSmart putty" and âSmart plaster". All Products together offers a complete range of solutions to the stakeholders in the i Building Material industry.
Fly-Ash Bricks (AAC) with its superior quality and latest i technology driven manufacturing processes, has achieved a growth of 13% in quantity terms, and as a solution model the revenue from this category grew by 20% over previous year on i a higher base, making us the market leader in this category.
Dry-Walling Solutions
Dry-Walling category consists of âAerocon Panels", âAerocon Boards" and "Smart bond". Panels & Boards continue to be the preferred choice of the Architects and designers. With detailed market study, planned approach, well-planned \ marketing activities and focus on quality, the Company has increased its sales volume and revenue by 10% during the year \ under review as compared to previous year. Your Company continues to remain market leader in this category.
Your Company will continue to focus on Tier 2 & Tier 3 cities, which are promising due to increase in infrastructure projects \ and real estate activity. Unique concept selling approach \ differentiates AEROCON from other players in the industry, supported by the brand promotion activities. \
Pipes and Fittings
During the year under review, Pipes and Fittings division de-grew by 16% in revenue terms due to tough market conditions, volatile resin prices and absence of complete range of product categories with the Company. With a sustained brand building exercise and strong marketing initiatives, Aerocon Pipes & Fittings is one of the preferred choices of the customers in \ NCR, Telangana and Andhra Pradesh.
The demand for these products looks promising and your company believes that this division will drive the future growth i by expanding its market reach, increase in SKU''s and product i range coupled with strong brand building initiatives.
Thermal Insulation - HYSIL
The Thermal Insulation division has reported a decline of 2% i in revenue terms and the key driver for volume growth in this vertical will come from capacity building in the form of brown i field or new green field projects.
New Projects
Coloured Steel Sheets: In order to cater to the demands of i urban customers, your Company has set up its second plant i
for manufacture of Coloured Steel Sheets at Odisha, with a capacity of 1500 MT per month. The said plant started its commercial operations on 30th March, 2017. This plant shall cater to the requirements of Odisha, Jharkhand and West Bengal markets. These sheets are being sold under the brand name âCharminar", which will help the Company to expand its customer base in developing towns / cities.
Awards
Your Company was bestowed with the title of âAsiaâs Most Trusted Building Material Company" for 2016 by IBC INFOMEDIA (A Division of International Brand Consulting Corporation, New Jersey, USA). This award is distinctive recognition for a brand renowned as, âMOST TRUSTED" in building industry category based on current year market standing.
The Company''s Pipes and Fittings plant at Faridabad won the âThe Machinery Super Shop floor 2016" award in the Technology Adoption category for Innovation sponsored by the Times of India Group to recognise and celebrate excellence achieved by indian shop floors in the Manufacturing Sector.
The Roofing Plant at Faridabad has also been awarded the NAMC Silver Award, following the footsteps of Sathariya Plant which won the Gold previous year and Belabored Plant that won the Silver, the year before last. The National Awards for Manufacturing Competitiveness (NAMC) was instituted by International Research Institute for Manufacturing (IRIM) with the aim of acknowledging and applauding manufacturing competitiveness of Indian Organizations.
With the Faridabad Plant wining NAMC silver award, three out of seven sheeting plants of your Company have won this prestigious award.
Management Discussion & Analysis Report
A report on Management Discussion & Analysis is appended as Annexure (I) to this report as per the requirements of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.
Directors & Key Managerial Personnel
Pursuant to the provisions of Section 149 & 184 of the Companies Act, 2013 and under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Mr. P Vaman Rao (DIN: 00069771), Mr. Yash Paul (DIN: 00580681) and Mrs. Gauri Rasgotra (DIN: 06862334), Independent Directors of the Company have submitted a declaration that each of them meet the criteria of independence as prescribed in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as an Independent Director during the year.
In accordance to provisions of Section 152 of the Companies Act, 2013 and pursuant to Articles of Association of the Company, Mr. Desh Deepak Khetrapal (DIN 02362633) Director of the Company, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Mr. Prashant Vishnu Vatkar (DIN 07139685) resigned as Managing Director & Director from the Board w.e.f 20th September, 2016 and the Board wishes to place on record its sincere appreciation for the valuable services rendered by Mr. Prashant Vishnu Vatkar during his tenure as Managing Director of the Company. In accordance with the provisions of Section 152, 196, 197, 198 and other applicable provisions Mr. Dhirup Roy Choudhary (DIN07707322) has been appointed as Additional Director, Managing Director and Key Managerial Personnel on the Board w.e.f 16th January, 2017, who hold office up to the date of the ensuing Annual General Meeting. Directors at their meeting held on 27th April, 2017 has redesignated Mr. Dhirup Roy Choudhary, Managing Director as Managing Director and Chief Executive Officer (âCEO") keeping the long term goals and vision of the Company.
The Company has received a notice in writing under Section 160 of the Act proposing the appointment of Mr. Dhirup Roy Choudhary as Director and Managing Director & CEO. The resolutions seeking your approval for the appointment of Mr. Dhirup Roy Choudhary, as Director and Managing Director & CEO and Mr. Desh Deepak Khetrapal as Director are included in the notice of the ensuing Annual General Meeting.
For Directors seeking appointment/re-appointment in the ensuing Annual General Meeting of the Company the particulars as required to be disclosed in accordance with Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is provided in the notice of ensuing Annual General Meeting.
Pursuant to the provisions of Section 203 of the Act, Mr. Dhirup Roy Choudhary, Managing Director & CEO, Mr. KR Veerappan, Chief Financial Officer and Mr. G Manikandan, Company Secretary & Financial Controller are the Key Managerial Personnel of the Company.
Board & Committees Board Meetings
During the year five meetings of Board of Directors of the Company were convened and held in accordance with the provisions of the Companies Act, 2013. The date(s) of the Board Meeting, attendance by the Directors are given in the Corporate Governance Report forming part of this annual report. The maximum time gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Committees of the Board
Corporate Social Responsibility Committee (CSR) Corporate Social Responsibility Committee of the Company meets the requirements of Section 135 of the Companies Act, 2013. The details of the composition of the Corporate Social Responsibility Committee as required under the provisions of Section 135 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report.
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made there under, the brief outline of the Corporate Social Responsibility (âCSR'') policy of the Company and the initiatives undertaken by the Company on the CSR activities during the year are given in Annexure (II) to this report in the format prescribed in the Companies (Corporate Social Responsibility) Rules, 2014. The said policy is available on the Company''s website âhttp://hil.in/ investors/codes-policies/CSR Policy".
The average net profits of the Company for the immediately preceding three financial years calculated as per Section 198 of the Companies Act, 2013 works out to RS,1.08 cr and the Company has spent RS,1.59 cr on CSR activities in the areas of healthcare, education and others.
Audit Committee
Audit Committee of the Company meets the requirements of section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.
Nomination and Remuneration Cum Compensation Committee
Nomination and Remuneration cum Compensation Committee meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 are given in the Corporate Governance Report which forms part of this annual report. During the year under review, the Board has accepted all the recommendations of the Nomination and Remuneration cum Compensation Committee.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually and the Committees of the Board.
A structured questionnaire was prepared after taking into consideration inputs received from Directors, covering aspects of the Board''s functioning such as adequacy of the Composition of the Board and its Committees, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of the Individual Directors including the Chairman of the Board. The Directors'' performance was evaluated on parameters such as level of engagement and contribution in safeguarding the interest of the Company etc.
The performance evaluation of the Independent Directors was carried out by the entire Board. Further the performance evaluation of the Chairman and Non Independent Directors was carried out by the Independent Directors.
Familiarization Programme for Directors
In addition to giving a formal appointment letter to the newly appointed Director on the Board, a detailed induction plan covering the role, function, duties, responsibilities and the details of compliance requirements expected from the Director under the Companies Act, 2013 and relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 were given and explained to the new Director.
The newly appointed Director was also given induction, orientation with respect to Company''s Vision, Core purpose, Core value and business operations. In addition, detailed presentations were made by the Senior Management Personnel on business environment and performance of the Company.
Extract of Annual Return
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and rules framed there under, the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure (III) and forms part of this Report.
Directorsâ Responsibility Statement
Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time, and to the best of their knowledge and information furnished, the Board of Directors state that:
i) In preparation of the Annual Accounts for the year ended 31st March, 2017, all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India have been followed.
ii) We have adopted such accounting policies, as selected in consultation with the Statutory Auditors, 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 the financial year ended 31st March, 2017.
iii) We have 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 Annual Accounts for the year ended 31st March, 2017 has been prepared on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Corporate Governance
Your Company is committed to good Corporate Governance coupled with good corporate practices. The report on corporate governance for the year ended 31st March, 2017 pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed herewith as Annexure (IV). The Certificate from the Auditors of the Company M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, [ICAI Firm Registration Number: 101049W/ E300004] regarding compliance of conditions of Corporate Governance is attached to the report of Corporate Governance.
The Corporate Governance Report, inter-alia, contains the following disclosures:
1. Number of Board Meetings
2. Composition of Audit Committee
3. Composition of Corporate Social Responsibility Committee
4. Appointment & Remuneration Policy (for Directors, Key Managerial Personnel & Senior Management Personnel of the Company)
5. Performance Evaluation criteria of the Board, its Committees & individual Directors
6. Details as required by SEBI (Listing Obligations and Disclosure Requirements)
Policies Vigil Mechanism
Pursuant to the requirement laid down in the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015, the Company has established Vigil Mechanism by framing Whistle Blower Policy to deal with the instance of fraud and mismanagement, if any. The Vigil Mechanism framework ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination shall be meted out to any person for a genuinely raised concern. The designated officer/ Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/ misconduct at [email protected]. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
The details of the same are provided in the Report on Corporate Governance forming part of this Report. The Whistle Blower Policy is also posted in the Investors section of the Company''s website www.hil.in on the following link http://hil.in/ investors/codes-policies/.
Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration cum Compensation Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and fixing their remuneration. The Remuneration Policy is provided in the Corporate Governance Report. The Nomination & Remuneration Policy is also posted in the Investors section of the Company''s website www.hil.in on the following link http://hil.in/investors/codes-policies/.
Sexual Harassment Policy
Your Company is an equal opportunity provider and at the same time, it has been an Endeavour of the Company to support women professionals through a safe, healthy and conducive working environment by creating and implementing proper policies to tackle issues relating to safe and proper working conditions for them and as per the provisions of âThe Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013" has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.
In the year under review, the Company has not received any complaint under the said Policy.
Related Party Transactions
All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.
In line with the provisions of Section 177 of the Companies Act, 2013 read with the Companies (Meetings of the Board and its Power) Rules, 2014, omnibus approval for the estimated value of transactions with the related parties for the financial year ahead has been obtained from the Audit Committee. The transactions with related parties are routine and repetitive in nature.
A summary statement of the transactions entered into with the related parties pursuant to the omnibus approval so granted are reviewed and approved by the Audit Committee and the Board of Directors on quarterly basis. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (V) to this report. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis-a-vis the Company.
Risk Management
The Company has laid down the procedure for risk assessment and its mitigation through an internal Risk Committee. Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Risk Management Policy details the Company''s objectives and principles of Risk Management along with an overview of the Risk Management process, procedures and related roles and responsibilities.
During the year, the Board reviewed the elements of risk and the steps taken to mitigate the risks and in the opinion of the Board there are no major elements of risk, which has the potential of threatening the existence of the Company.
Internal Financial Controls with Reference to Financial Statements
The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include:
1. All transactions are recorded in the ERP system SAP.
2. Well defined policies, guidelines, and Standard Operating Procedures (âSOPs''), authorization and approval procedures.
3. The internal financial controls of the Company are adequate to ensure accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient manner.
4. The Company has appointed Internal Auditors to check the Internal Controls and to ensure whether the workflow of the organization is in accordance with the approved policies of the Company; and
5. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Corporate Social Responsibility Policy, Risk Management Policy, Dissemination of Material Events Policy, Documents Preservation Policy,
Monitoring and Reporting of Trading by Insiders, Code of Internal Procedures and Conduct for Regulating, Code of Practices and Procedures for Fair Disclosures and such other procedures for ensuring orderly and efficient conduct of its business for safeguarding of its assets, accuracy and completeness of the accounting records and timely preparation of reliable financial information.
6. Systems to ensure compliances with prevalent statue and statutory compliances are in place.
Auditors Statutory Auditors
As per Section 139 of the Companies Act 2013, M/s. S R Batliboi & Associates, LLP was appointed as Statutory Auditors for a period of Three (03) years i.e from conclusion of 67th Annual General Meeting (held on 18th July, 2014) till the conclusion of the 70th Annual General Meeting and the said term of M/s. S R Batliboi & Associates, LLP will expire with the conclusion of the ensuing Annual General Meeting.
Based on the recommendation of the Audit Committee, the Board of Directors has recommended the appointment of i M/s. BSR & Associates, LLP, Chartered Accountants, (ICAI Firm Registration Number : 116231W/W-100024) as the Statutory Auditors of the Company, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of the 75th Annual General Meeting to be held in year 2022, subject to ratification by the members at every AGM thereafter
Resolution proposing the appointment of M/s. BSR & Associates, LLP, Chartered Accountants, (ICAI Firm Registration Number : 116231W/W-100024) as the Statutory Auditors is included in the notice of the ensuing Annual General Meeting.
M/s. BSR & Associates, LLR Chartered Accountants, (ICAI Firm Registration Number : 116231W/W-100024) has provided the certificate of eligibility as per the provisions of Companies Act, 2013 and the same is available for inspection by the members during business hours.
The Audit Report issued by M/s. S R Batliboi & Associates, LLP, Statutory Auditors for the financial year ended 31st March, 2017 forms part of this Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors, which requires explanation or comments from the Board.
Internal Auditors
The Company has an in-house internal audit team, which monitors the effectiveness of the internal control systems. It reports to the Managing Director about the adequacy and effectiveness of the internal control system of your Company. Your Company also retained the services of M/s. KPMG, Chartered Accountants and other reputed Chartered Accountants to audit specific locations and processes for the year 2016-17.
The recommendations of the internal audit team on improvements in the operating procedures and control systems were also presented to the Audit Committee for strengthening the operating procedures.
Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed there under, the cost audit records maintained by the Company in respect of its specified products are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, appointed M/s. S.S. Zanwar & Associates, as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending 31st March, 2018 at a remuneration of RS,6.0 lacs. Members are requested to ratify the remuneration payable to the Cost Auditors for the year 201718 at the ensuing Annual General Meeting of the Company, in accordance with Section 148 of the Companies Act 2013.
The Cost Audit report for the financial year ended 31st March,
2016 was duly filed with the Central Government within the due date.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules framed there under, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. P.S. Rao and Associates, Company Secretaries to undertake the secretarial audit of the Company. The secretarial audit report issued by M/s. P.S. Rao and Associates, Company Secretaries for the financial year ended 31st March, 2017 is given in the Annexure (VI) attached hereto and forms part of this Report. The report does not contain any qualifications, reservations or adverse remarks.
Joint Ventures and Consolidated Financial Statements
As on 31st March, 2017, your Company holds 33% of the share capital in Supercor Industries Limited (âSupercor"), a company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria and other shareholders hold remaining 67% of the share capital in Supercor. Information required pursuant to Section 129(3) of the Companies Act, 2013 a statement containing salient features of the Subsidiaries/ Joint Ventures of the Company is provided in Form AOC-1 attached as Annexure (VII) to this Report.
With change in market conditions and expecting non-asbestos products would attract better demand as compared to asbestos product, Supercor had changed its product mix and converted its product range from asbestos to non-asbestos based products in the year 2014 post which, the revenue of Supercor fell drastically due to their inability to recover the increased cost of the non-asbestos product from the market and thereby reported cash losses for the year 2014. The situation further deteriorated in the year 2015 causing severe cash crisis and could not meet their routine obligation of paying salaries / wages to their employees / workers which hampered the operation and forced them to suspend the operations since November, 2015. In view of the same, none of the employees/ workers resumed their offices and all the basic facilities such as power, internet and other connections were discontinued due to non-payment of the dues.
In view of the above, Supercor expressed its inability to prepare the financial statements for the year ended 31st December, 2016 and hence Company considers that the financial statements would not be available for consolidation and is presenting its financials on standalone basis for the financial year ended 31st March, 2017.
Further, your Company has been demanding its receivables from Supercor for the last few years and Supercor could not pay these dues due to the severe cash crisis. Hence your Company initiated winding up proceedings against Supercor as per the laws of Nigeria and also made an application for seeking exemption from consolidation of accounts on the aforesaid grounds with the Registrar of Companies, Andhra Pradesh and Telangana vide E form GNL -1 and the same has been approved by the Registrar of Companies.
Employee Stock Options
The Company has an operative Employees Stock Option Scheme 2015 (ESOS-2015) which provides for grant of Stock Options to eligible employees of the Company.
Nomination & Remuneration cum Compensation Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees'' Stock Option Scheme of the Company in accordance with the Securities and Exchanges
Board of India (Share Based Employee Benefits) Regulations, 2014 (âSEBI Regulations"). There is no change in the ESOS scheme of the Company during the year
The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made there under and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided in Annexure (VIII) to this Report and there were no new grants of options during the year (Outstanding options as on 31st March, 2017 are 84200).
Certificate from M/s. S R Batliboi & Co. LLP, Chartered Accountants, Statutory Auditors of the Company confirming that the scheme has been implemented in accordance with the SEBI Regulations will be placed at the forthcoming Annual General Meeting of the Company for inspection by the members.
Particulars of Employees
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 including the amendments thereto, 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 provided in annexure to this report.
Disclosure pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure (IX) of this Report.
Human Capital and Industrial Relations
People management at HIL go beyond the set boundaries of compensation, performance, appraisal and development. Your Company places Employee engagement, development and retention as its highest priority, to enable achievement of organizational goal. The Company has automated few of the HR processes to make them more robust. The recruitment process is totally aligned to attract best quality & diversified talent. The Company''s management firmly believes that a strong and stable industrial relation is essential for success of any organization. Over the years the management has made sincere and continued efforts for the development of an atmosphere of mutual co-operation, confidence and respect duly recognizing the rights of the workers. A very rigorous labour law compliance mechanism is in place to help us to run our businesses in the most ethical manner. As on 31st March, 2017, the Company had 1501 employees.
The Directors wish to place on record their sincere appreciation for the co-operation received from employees/workers at all levels.
Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
Particulars with respect to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure (X) attached hereto and forms part of this Report.
Significant and Material Orders Passed by the Regulators/Court
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
Material Changes and Commitments
There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year 31st March, 2017 to which the financial statements relates and the date of signing of this report.
Investor Education and Protection Fund (IEPF)
In terms of Section 123, 124 and 125 of the Companies Act, 2013, the unclaimed dividends i. e Final Dividend for the year 2008-09, Interim Dividend for the year 2009-10 had been transferred to the IEPF Fund.
Further, as per the provisions of Section 125, the share(s) wherein the dividend is unclaimed for a period of consecutive seven (07) years will be transferred to the suspense account as prescribed by the IEPF Rules, therefore the shareholders whose dividends are unclaimed for consecutive seven years from 2010-11 (list of the shareholders along with the unclaimed dividend details are available on the website of the Company www.hil.in/investors are requested to claim their unclaimed dividend at the earliest.
Acknowledgements
The Board of Directors take this opportunity to place on record their appreciation to all the Stakeholders of the Company, viz., customers, investors, banks, regulators, suppliers and other business associates for the support received from them during the year under review. The Directors also wish to place on record their deep sense of gratitude and appreciation to all the employees for their commitment and contribution towards achieving the goals of the Company.
On behalf of the Board of Directors
Place: New Delhi Dhirup Roy Choudh ary Desh Deepak Khetrapal
Date : 27th April, 2017 Managing Director & CEO Director
DIN-07707322 DIN-02362633
Mar 31, 2016
TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Report and the Audited Financial Statements of your Company for the year ended 31st March 2016.
FINANCIAL RESULTS
(Rs, In lacs)
|
2015-16 |
2014-15 |
|
|
Net Revenue from operations |
109628 |
110779 |
|
Earnings Before Interest, Depreciation &Tax |
11172 |
13507 |
|
Less: Interest |
917 |
577 |
|
Depreciation |
3974 |
3402 |
|
Profit Before Tax and Exceptional items |
6281 |
9528 |
|
Less: Exceptional items |
276 |
333 |
|
Profit before Tax |
6005 |
9195 |
|
Less: Taxes |
2039 |
2509 |
|
Profit for the year |
3966 |
6686 |
|
Surplus in P&L account as per last year |
5624 |
4885 |
|
AVAILABLE FOR APPROPRIATION |
9590 |
11571 |
|
Carrying value of Fixed Assets having NIL useful life As per Schedule II of Companies Act, 2013 net of deferred tax |
0 |
176 |
|
Transfer to General Reserve |
1000 |
4000 |
|
Interim Dividend on Equity Shares |
560 |
746 |
|
Proposed Final Dividend on Equity Shares |
746 |
746 |
|
Corporate Dividend Tax |
266 |
279 |
|
Balance Carried to Balance Sheet |
7018 |
5624 |
DIVIDEND
During the year under review the Board of Directors declared an interim dividend of Rs, 7.50 per equity share (75% of the paid-up value). Your directors are pleased to recommend a final dividend of Rs, 10.00 per equity share (100% of the paid-up value) for your consideration and approval at the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year 2015-16 would be Rs, 17.50 per equity share (175% of the paid-up value) as against the total dividend of Rs, 20/- per equity share (200% of the paid-up value) declared in the previous year.
The total dividend outgo would amount to Rs, 15.72 crores (including dividend distribution tax) and the Company has transferred Rs, 10 crores to General Reserves out of the profits for the year.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March 2016 wasRs, 7.49 crores. During the year under review, the Company has neither issued any shares with differential voting rights nor sweat equity. As on 31st March 2016, Mr CK Birla, Chairman holds 51,376 equity shares of the Company. None of the Directors of the Company, except as specified above, hold shares or convertible instruments of the Company.
During the year under review, the Company has allotted 84,200 stock options under HIL Employee Stock Option Scheme 2015 to the eligible employees and there was no stock options vested or exercised during the period. Out of the above, 9100 stock options were lapsed and reverted back to the pool on account of resignation of an employee.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of Loans, Guarantees and Investments as required under the provisions of Section 186 of the Companies Act, 2013 are provided in note no. 11 to the notes to the Financial Statements.
DEPOSITS
The Company has not accepted any deposits covered under chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding as on 31st March 2016.
STATE OF COMPANYâS AFFAIR
In the year 2015-16, the Company has reported net revenue of Rs, 1097 crores as compared to Rs, 1108 crores in the previous year. However, Profit Before Tax for the year under review stood at Rs, 60.05 crores as compared to Rs, 91.95 crores reported last year. Lower profitability in this year was predominantly on account of stiff market conditions which prevailed during the year and the consequent lower realisation. A focused approach and unique strategy adopted for each business division with the objective of sustaining growth helped the Company to minimise the adverse impact contributed by external factors.
Roofing
The Roofing Business has sustained its position in the market despite muted demand coupled with highly competitive sphere. Some parts of the country witnessed poor demand due to migration to alternate products which affected the demand for Fibre Cement Sheets. During the year under review, Company had started manufacturing Coloured Steel Sheets for catering to the customers who prefer this product due to the aesthetic look and feel. The Roofing business ended the year with a decline of 11% in quantity terms in line with the industry de-growth of 11%.
Focus on high potential geographies, marketing initiatives, and cost optimization have played a vital role in sustaining the market share and intense competition.
Aerocon AAC - Blocks
AAC (Autoclaved Aerated Concrete) block is an eco-friendly building material used in construction activities. AAC block offers a unique combination of strength, low weight, cost-effectiveness and durability compared with a clay brick. It is a steam-cured mixture of fly ash, cement, lime and an aeration agent.
With an increase in awareness of eco-friendly & green building products, demand for AAC blocks have increased and has created an opportunity for entry of many unorganized players, thereby increasing competition. This resulted in surplus capacity creation in certain parts of the country which intensified the pricing pressure especially in urban areas. However, HIL with its superior quality and latest technology driven manufacturing processes, has achieved a growth of 49% in quantity terms and 46% in revenue terms as compared to the previous year.
Aerocon Panels
Well planned marketing activities along with focus on quality have helped the Company to increase its sales volume by more than 27% during the year under review as compared to last year. The growth in volumes was also supported by ongoing Government initiatives like Swatch Bharat, which created visibility of this product among users. Your Company remained the market leader in this segment.
Your Company will continue to focus on Tier 2 & Tier 3 cities which are promising due to increase in infrastructure projects and real estate activity. Unique concept selling approach differentiates AEROCON from other players in the industry, supported by the brand promotion activities.
Advanced Polymer Products (APP)
During the year under review, Advanced Polymer Products division reported a growth of 52%. This division established its strong presence in its existing territories in the North and South regions. Key strength of this division continues to be its strong distribution foot print and intense marketing & branding activities. The division will focus on building deep and wide distribution channels, increase SKU''s and develop in-house compounding capability.
Thermal Insulation - HYSIL
The key driver for volume growth in this vertical is capacity building in the form of brown field or new green field projects. Absence of such projects has become a bottleneck for growth for this vertical resulting in a decline of 21% in volume and 23% in revenue when compared to the previous year.
NEW PROJECTS
AAC Blocks: As a part of expanding its foot print in the growing AAC Blocks industry, the Company has added new manufacturing facility for manufacture of AAC Blocks at its Thimmapur Plant, Telangana. The said plant has started its commercial operations on 2nd November 2015.
This plant shall cater to the growing AAC Blocks market in the Telangana & Andhra Pradesh regions and will help the Company to retain its position in Southern region of the Country.
Coloured Steel Sheets: In order to cater to the demands of urban customers, your Company has set up its pilot plant for manufacture of Coloured Steel Sheets at Maharashtra with an initial capacity of 800 MT per month. The plant started its commercial operations on 7th Duly 2015. This plant shall cater to the requirements of Maharashtra and Gujarat. These sheets are being sold under the brand name âCharminarâ. This will help the Company to retain its customers in the roofing segment.
AWARDS
During the year, your Company won the prestigious âTPM Excellence Awardâ (Category B) from DIPM for âExcellence in Operational Manufacturingâ for one of its roofing plant at Kondapalli, Vijayawada. The Kondapalli plant is the only plant from the roofing industry to have won this award both in India and worldwide. This showcases our commitment towards delivering quality products by adhering to the best manufacturing/safety practices.
During the year, another roofing plant at Sathariya bagged the NAMC Silver Medal. The National Awards for Manufacturing Competitiveness (NAMC) was instituted by International Research Institute for Manufacturing (IRIM) with the aim of acknowledging and applauding manufacturing competitiveness of Indian Organisations. Sathariya plant is the second roofing plant after Balasore to win the NAMC Silver Medal.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure (I) to this report as per the requirements of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015.
DIRECTORS & KEY MANAGERIAL PERSONS
During the year under review, the members at the Annual General Meeting held on 30th Duly 2015 have appointed Mr Prashant Vishnu Vatkar as Managing Director (DIN 07139685) of the Company with effect from 20th April 2015.
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and in accordance with provisions of Articles of Association of the Company, Mr CK Birla (DIN 00118473), Director of the Company, is liable to retire by rotation and being eligible, offers himself for re-appointment.
The Company has received declarations from all the Independent Directors of the Company confirming that they continue to meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year, Mr P Rajesh Kumar Dain, Company Secretary resigned w.e.f 18th August 2015 and the Company has appointed Mr G Manikandan, who has been an employee of your Company since 7th May 2008, as Company Secretary & Financial Controller w.e.f 19th August 2015.
For Directors seeking appointment/re-appointment in the forthcoming Annual General Meeting of the Company; the particulars as required to be disclosed in accordance with Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is provided in the Notice of Annual General Meeting.
MEETINGS
During the year under review, seven board meetings were held on 20th April 2015, 27th April 2015, 12th May 2015, 30th Duly 2015, 17th August 2015, 26th October 2015 and 4th February, 2016. The maximum time-gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its Committees. The manner in which the evaluation was carried out has been detailed in the Corporate Governance Report.
VIGIL MECHANISM
Pursuant to the requirement laid down in the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosures Requirements Regulations 2015, the Company has established Vigil Mechanism by framing Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The Vigil Mechanism framework ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination shall be meted out to any person for a genuinely raised concern. The Designated Officer/Audit Committee Chairman can be directly contacted to report any suspected or confirmed incident of fraud/misconduct at [email protected]. A High Level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.
The details of the same are provided in the Report on Corporate Governance forming part of this Report.
The Whistle Blower Policy is also posted in the Investors section of the Company''s website www.hil.in on the following link http://hil.in/ investors/codes-policies/.
REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and fixing their remuneration. The Remuneration Policy is provided in the Corporate Governance Report.
SEXUAL HARASSMENT POLICY
The Company as required under the provisions of âThe Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013â has framed a Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto.
In the year under review, the Company has not received any complaint under this Policy.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arms'' length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The requisite details of the related party transactions entered into during the financial year are provided as Annexure (II) to this report. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements.
All Related Party Transactions were placed before the Audit Committee and to the Board for their approval, whenever required. Prior omnibus approval of the Audit Committee is obtained for the transactions which were of a foreseeable and repetitive nature. A statement giving details of all related party transactions entered into pursuant to the omnibus approval so granted were placed before the Audit Committee and the Board of Directors on a quarterly basis.
None of the Directors, other than to the extent of their shareholding, receipt of remuneration/ commission, has any pecuniary relationships or transactions vis-a-vis the Company.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134 (3)
(c) of the Companies Act, 2013 and on the basis of compliance certificate received from the executives of the Company and subject to disclosures in the Annual Accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time, and to the best of their knowledge and information furnished, the Board of Directors states that:
i) In preparation of the Annual Accounts for the year ended 31st March 2016, all the applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India have been followed along with proper explanation relating to material departures, if any.
ii) The Directors have adopted such accounting policies, as selected in consultation with Statutory Auditors, 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 the financial year ended 31st March 2016.
iii) The Directors have 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 Annual Accounts for the year ended 31st March 2016 has been prepared on a going concern basis.
v) Proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
vi) The systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
CORPORATE GOVERNANCE
Your Company is committed to good Corporate Governance coupled with good corporate practices. As per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a Compliance Report on Corporate Governance for the year 2015-16 and a Certificate from the Auditors of the Company M/s. S R Batliboi & Associates LLP., Chartered Accountants, [ICAI Firm Registration Number: 101049W/E300004] is furnished as part of the Annual Report.
AUDIT COMMITTEE
Audit Committee of the Company meets the requirements of section 177 of the Companies Act, 2013 and Regulation 18 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Audit Committee as required under the provisions of Section 177(8) of the Companies Act, 2013 is given in the Corporate Governance Report furnished as part of the Annual Report. During the year under review, the Board has accepted all the recommendations of the Audit Committee.
NOMINATION AND REMUNERATION CUM COMPENSATION COMMITTEE
Nomination and Remuneration cum Compensation Committee meets the requirements of section 178 of the Companies Act, 2013 and Regulation 19 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The details of the composition of the Nomination and Remuneration cum Compensation Committee as required under the provisions of Section 178 of the Companies Act, 2013 is given in the Corporate Governance Report furnished as part of the Annual Report. During the year under review, the Board has accepted all the recommendations of the Nomination and Remuneration cum Compensation Committee.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has adequate internal financial control procedures commensurate with its size and nature of business. These controls include:
1. All transactions are recorded in the ERP system SAP.
2. Well defined policies, guidelines, and Standard Operating Procedures (âSOP''), authorization and approval procedures.
3. The internal financial controls of the Company are adequate to ensure the accuracy and completeness of the accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors, safeguarding of the assets and that the business is conducted in an orderly and efficient manner.
4. The Company has appointed Internal Auditors to check the Internal Controls and to ensure whether the workflow of the organization is in accordance with the approved policies of the Company.
5. The Board of Directors of the Company have adopted various policies like Related Party Transactions Policy, Whistle Blower Policy, Corporate Social Responsibility Policy, Risk Management Policy, Dissemination of Material Events Policy, Documents Preservation Policy, Monitoring and Reporting of Trading by Insiders, Code of Internal Procedures and Conduct for Regulating, Code of Practices and Procedures for Fair Disclosures and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
HUMAN CAPITAL
People are our most valuable asset and they play a vital role in the growth of your Company. The Company places the engagement, development and retention of talent as its highest priority, to enable achievement of organizational vision. Structure, Process and Culture are the cornerstones of our Human Resource strategy and we have made strides in these areas during the last year.
With an unswerving focus on nurturing, training and retaining talent, your Company provides avenues for learning and development through functional, behavioral and leadership training programs, communication channels for information sharing, to name a few.
The Group''s Corporate Human Resources play a critical role in your Company''s talent management process through a customized Competency based Leadership Program devised for High - Potential employees with focus on Individual Development Plan which helps them to become future leaders. Nurturing young, hi-potential talent has been our focus through the CEO Circle program wherein the selected participants are provided rigorous leadership training for 2 years to prepare them to take-up higher roles in the organization. We continue to strive to build a performance driven culture and create an environment conducive for the employee''s growth.
Your Company also believes that the human capital is of utmost importance to sustain the market leadership in all product segments and also to capture new markets.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Companies Act, 2013 and the Rules made there under and pursuant to the recommendation of the Committee, the Board has approved a Corporate Social Responsibility (âCSR'') policy and the same has been uploaded in the website of the Company âhttp://hil.in/investors/codes-policies/CSR Policyâ which contains the CSR activities being carried out by the Company, governance structure, implementation process, etc.
As the Average Net Profits of the Company for the immediately preceding three (3) financial years calculated as per Section 198 of the Companies Act, 2013 works out to Rs, 1.27 crores and the Company has spent Rs, 1.68 crores on CSR activities and CSR projects in the areas of healthcare and education. The details on CSR activities are provided as Annexure (III) and forms part of this report.
RISK MANAGEMENT
The Company has laid down the procedure for risk assessment and its mitigation through an internal Risk Committee. Key risks and their mitigation arising out of reviews by the Committee are assessed and reported to the Audit Committee on a periodic basis. The Risk Management Policy details the Company''s objectives and principles of Risk Management along with an overview of the Risk Management processes, procedures and related roles and responsibilities.
STATUTORY AUDITORS
The Statutory Auditors of the Company, M/s. S R Batliboi & Associates LLP., [ICAI Firm Registration Number: 101049W/E300004], were re-appointed by the members at the 67th Annual General Meeting held on 18th Duly 2014 for a term of 3(Three) years till the conclusion of 70th Annual General Meeting to be held in 2017. Members are requested to ratify the same at the ensuing Annual General Meeting of the company, in accordance with section 139 of the Companies Act, 2013.
The Audit Report issued by the Statutory Auditors for the financial year ended 31st March 2016 forms part of this Report. There are no qualifications, reservations or adverse remarks made by the Statutory Auditors which requires explanation or comments from the Board.
INTERNAL AUDITORS
The Company has an in-house internal audit team which monitors the effectiveness of the internal control systems. It reports to the Audit Committee about the adequacy and effectiveness of the internal control system of your Company. Your Company also retains the services of M/s. KPMG, Chartered Accountants and other reputed Chartered Accountants to audit specific locations and processes.
The recommendations of the internal audit team on improvements in the operating procedures and control systems are also presented to the Audit Committee and the business to use these as tools for strengthening the operating procedures.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the rules framed there under, the cost audit records maintained by the Company in respect of its cement products manufacturing activity are required to be audited by a Cost Auditor. The Board of Directors, on recommendation of the Audit Committee, appointed M/s. S S Zanwar & Associates, as Cost Auditors of the Company, to conduct the audit of the cost records of the Company for the financial year ending 31st March 2017 at a remuneration of Rs, 6.0 lacs. Members are requested to ratify the remuneration payable to the Cost Auditors at the ensuing Annual General Meeting of the Company, in accordance with section 148 of the Companies Act 2013.
The Cost Audit report for the financial year ended 31st March 2015 was duly filed with the Central Government within the due date.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules framed thereunder, the Board of Directors, on recommendation of the Audit Committee, appointed M/s. P S Rao and Associates, Practicing Company Secretaries to undertake the secretarial audit of the Company. The secretarial audit report issued by M/s. P S Rao and Associates, Practicing Company Secretaries for the financial year ended 31st March 2016 provided as Annexure (IV) attached hereto and forms part of this Report. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and rules framed there under, the extract of the Annual Return in form MGT-9 is provided as Annexure (V) and forms part of this Report.
EMPLOYEE STOCK OPTIONS
During the year under review, 84,200 stock options were granted under HIL Employee Stock Option Scheme 2015. The details of Employee Stock Options pursuant to Section 62 of the Companies Act, 2013 read with Rules made thereunder; and SEBI (Share Based Employee Benefits) Regulations, 2014 and erstwhile SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are provided as Annexure (VI) to this Report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo as required under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are provided as Annexure (VII) attached hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment & 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 provided in annexure to this report.
Disclosure pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is provided as Annexure (VIII) of this Report.
JOINT VENTURES
As on the 31st March 2016, the Company holds 33% of the share capital in M/s Supercor Industries Limited (âSupercorâ), a company incorporated under the laws of Nigeria. The State Government of Bauchi, Nigeria (âNigerian Governmentâ) and other shareholders hold remaining 67% of the share capital in Supercor. Information required pursuant to Section 129(3) of the Companies Act, 2013 a statement containing salient features of the Joint Ventures of the Company is provided as Form AOC-1 attached as Annexure (IX) to this Report. Due to change in product mix and shift in demand for the non-asbestos product, the demand for said company''s products considerably reduced during 2015 which forced the said company to report losses and also suspended its operations from end of November 2015.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to Regulation 33 of SEBI (Listing Obligations & Disclosures Requirements) Regulations 2015, and the Companies Act, 2013, the Consolidated Financial Statements prepared as per Companies Act, 2013 and Accounting Standards, duly audited forms part of the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURT
During the year under review, no significant and material orders have been passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year 31st March, 2016 to which the financial statements relates and the date of signing of this report.
ACKNOWLEDGEMENTS
The Board of Directors take this opportunity to place on record their appreciation to all the Stakeholders of the Company, viz., customers, investors, banks, regulators, suppliers and other business associates for the support received from them during the year under review. The Directors also wish to place on record their deep sense of gratitude and appreciation for all the employees for their commitment and contribution towards achieving the goals of the Company.
On behalf of the Board of Directors
CK BIRLA
Chairman
New Delhi, 5th May 2016 (DIN 00118473)
Mar 31, 2015
TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Report and the Audited
Financial Statements of your Company for the year ended 31st March
2015.
FINANCIAL RESULTS Rs in lacs
2014-15 2013-14
Net Revenue from operations 110779 86947
Earnings Before Interest,
Depreciation & Tax 13507 5239
Less: Interest 577 1023
Depreciation 3402 2872
Profit Before Tax and
Exceptional items 9528 1344
Less: Exceptional items 333 355
Profit before Tax 9195 989
Less :Taxes 2509 276
Profit for the year 6686 713
Surplus in P&L account
as per last year 4885 4708
AVAILABLE FOR APPROPRIATION 11571 5421
Carrying value of Fixed Assets
having NIL useful life
As per Schedule II of
Companies Act, 2013 - net of
deferred tax 176 -
Transfer to General Reserve 4000 100
Interim Dividend on Equity Shares 746 -
Proposed Final Dividend on
Equity Shares 746 373
Corporate Dividend Tax 279 63
Balance Carried to Balance Sheet 5624 4885
DIVIDEND
During the year under review the Board of Directors declared an interim
dividend of Rs. 10.00/- per equity share (100% of the paid-up value).
Your directors are pleased to recommend a final dividend of Rs. 10.00/-
per equity share (100% of the paid- up value) for your consideration
and approval at the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year
2014-15 would be Rs. 20.00/- per equity share (200% of the paid-up value)
as against the total dividend of Rs. 5.00/- per equity share ( 50% of the
paid-up value) declared in the previous year.
The total dividend outgo would amount to Rs. 1771 lacs (including
dividend distribution tax).
SHARE CAPITAL
The paid up Equity Share Capital as on March 31st, 2015 was Rs. 7.49
Crores. During the year under review, the Company has not issued shares
with differential voting rights nor granted stock options nor sweat
equity. As on March 31, 2015, Mr. CK Birla, Chairman holds 51,376
equity shares of the Company. None of the Directors of the Company,
except as specified above, hold shares or convertible instruments of
the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Particulars of Loans, Guarantees and Investments as required under the
provisions of Section 186 of the Companies Act, 2013 are provided in
the notes to the Financial Statements.
DEPOSITS
The Company has not accepted any deposits covered under chapter V of
the Companies Act 2013 and as such, no amount of principal or interest
was outstanding as on 31st March 2015.
OVERALL ECONOMIC OUTLOOK:
The low economic growth phase in the Indian Economy appears to have
bottomed out and 2014-15 witnessed a gradual improvement in economic
activity. As per the advance estimates of Central Statistics Office
(CSO), India's economic growth is pegged at 7.4% in 2014-15 as compared
to 6.9% in 2013-14.
With the control over price rise continuing a remarkable fall in
inflation was noted, as the wholesale price index (WPI) fell to a 5-yr
low of 0.11 in December'2014. The Manufacturing PMI reported by Market
Economics and conducted by HSBC every month, rose from 51.40 at the
beginning of Q1 of 2014-15 to 52.10 by the end of Q4 of 2014-15. The
Business confidence index has been continuously rising from 49.9 in Q4
of 2013-14 to 56.4 in Q4 of 2014-15 as reported by Confederation of
Indian Industry (CII). The forecast expects the index to rise to 58.18
by 2016.The medium term to long term growth prospects look positive in
view of the Government's determination to bring in reforms. The
Economic Survey has projected the Gross Domestic Product (GDP) growth
at 8%-8.5% in financial year 2015-16 and double-digit growth in the
coming years.
STATE OF COMPANY'S AFFAIR
In the year 2014-15, the Company's net revenue stood at Rs. 1108 Crores
as compared to Rs. 869 Crores in the previous year, a growth of 27.5%.
Consequently, Profit before Tax for the year under review was Rs. 91.95
Crores as compared to Rs. 9.89 Crores reported last year signifying an
y-o-y growth of 830%. In order to compete in the changing market
conditions, HIL started adapting different strategic initiatives in its
existing businesses. A focussed approach and unique strategy was
adopted for each business division with the objective of achieving
higher growth and profitability. Various strategic initiatives such as
optimization of cost, focused sales strategy, regular performance
improvement initiatives contributed to an impressive performance by
your Company both in terms of revenue and profitability. Your company's
priority is to develop eco-friendly products and to achieve this it has
a well thought strategy in place for the development of new products
and for the growth of Green Building Products produced by the Company.
Sheeting:
The Sheeting business had a historical year with the highest ever sales
volume and revenue. It witnessed a growth of 23% in volume during the
year under review. This was achieved through focus on high potential
geographies, sales & marketing initiatives in priority markets, changes
in manufacturing footprint and cost optimization at it's plants.
Aerocon AAC - Blocks
The year under review was a challenging year for the AAC Blocks
Industry. While the Industry witnessed a growth in demand due to
increasing awareness about green building products, however the pricing
was a challenge because of surplus capacity and oversupply across
regions. There was intense price pressure especially in the North and
Western markets resulting in a drop in realization by 10%-20% as
compared to the previous year. Aerocon AAC Blocks sales revenue grew by
59% as compared to the market growth of 32% approximately.
Aerocon Panels
During the year under review the Aerocon Panel Sales grew by 29% and
your company continued to be the market leader in this segment. Demand
for the Company's pre-fabricated panels is increasing especially from
major Government, Industrial, Healthcare projects as well as from
export requirement. Your company will continue its focus on Tier 2 and
Tier 3 towns which are witnessing good growth in real estate and
infrastructure projects.
Advanced Polymer Products (APP):
The year under review was the first full year of operations for the
Advanced Polymer Products division of the Company. In
its first full year of operation, the Company has successfully setup
its distribution foot print in 10 states covering Northern and Southern
markets and has cornered about 7% market share in North. The division's
primary focus is to build deep and wide distribution channels, increase
SKU's and develop in-house compounding capability which are some of the
key essentials in this business.
Thermal Insulation - HYSIL
Hysil business continued to maintain its market leadership position in
the Granular Insulation segment, with a virtual numero - uno position
in the Cement industry which is its biggest consumer. To de-risk itself
against any slowdown in the Indian Cement industry, it has forayed into
Exports. In the fiscal year 2014-15, 16% of the Hysil business came
through Exports to Africa, Middle East, Nepal & Bangladesh.
NEW PROJECTS
Wind Power: During the year, HIL commissioned a 2.0 MW Wind Turbine
Generator in Rajasthan on 30th September 2014, taking the HIL's
renewable energy portfolio to 9.35 MW. HIL continues to evaluate
various options for expanding its renewable energy portfolio.
AAC Blocks: Expanding its foot print in the growing AAC Blocks
Industry, HIL on 1st January 2015 commissioned a AAC Blocks
manufacturing facility in Jhajjar, Haryana with an installed capacity
of 1.5 lac Cu.m/annum. This plant shall cater to the growing AAC Blocks
market in the National Capital Region (NCR) and the northern region of
the Country.
APP Division: HIL ventured into manufacturing of Advanced Polymer
Products, with CPVC and UPVC plumbing products in October, 2013 with
the commissioning of its Faridabad unit. Expanding further, HIL on 2nd
March 2015, commissioned its second state of the art manufacturing
facility for CPVC and UPVC Pipes and Fittings at Timmapur, Telangana
with an initial capacity of 1555 MT. This unit will help strengthen
your Company's presence in the Southern market.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(I) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
During the year under review, the members at the AGM held on 18th July,
2014 appointed Mr. P Vaman Rao and Mr. Yash Paul as Independent
Directors of the Company for a term of 5 years w.e.f 18th July, 2014
and Mrs. Gauri Rasgotra as Independent Director of the Company for a
term of 5 years w.e.f 8th May, 2014.
During the year, Mr. Abhaya Shankar, resigned as Managing Director of
the Company with effect from 22nd September, 2014. The Board of
Directors place on record their
appreciation for the hard work and dedication of Mr. Abhaya Shankar
during his tenure since February 2008, as Managing Director of the
Company.
The Board of Directors of the Company, on the recommendation of the
Nomination and Remuneration Committee, co-opted Mr. Prashant Vishnu
Vatkar as an Additional Director of the Company with effect from 20th
April, 2015, and appointed him as Managing Director of the Company,
subject to the approval of the members, at the forthcoming Annual
General Meeting.
In accordance with the provisions of Companies Act, 2013 and the
Articles of Association of the Company, Mr. Desh Deepak Khetrapal
Director of the Company will retire by rotation at the ensuing Annual
General Meeting and, being eligible, offers himself for re-appointment.
The Resolutions proposing appointment of Mr. Prashant Vishnu Vatkar as
Managing Director and reappointment of Mr. Desh Deepak Khetrapal as
Director of the Company will be placed before the Shareholders for
their approval at the ensuing Annual General Meeting of the company.
The Company has received declarations from all the Independent
Directors of the Company confirming that they continue to meet with the
criteria of independence as prescribed under sub-section (6) of Section
149 of the Companies Act, 2013 and under Clause 49 of the Listing
Agreement with the Stock Exchanges.
For Directors seeking appointment/re-appointment in the forthcoming
Annual General Meeting of the Company; the particulars as required to
be disclosed in accordance with Clause 49 (Corporate Governance) of
Listing Agreement, forms part of Corporate Governance Report.
MEETINGS
During the year under review, six board meetings were held on 08th May,
2014, 18th July, 2014, 16th September, 2014, 17th October, 2014, 23rd
December, 2014 and 19th January, 2015. The maximum time-gap between
any two consecutive meetings was within the period prescribed under the
Companies Act, 2013.
BOARD EVALUATION
The Board of Directors evaluated the annual performance of the Board as
a whole, its committee's and the directors individually in accordance
with the provisions of the Companies Act, 2013 and Clause 49 of the
Listing Agreement in the following manner:
i. Structured evaluation forms, as recommended by the Nomination and
Remuneration Committee, after taking into consideration inputs received
from the Directors, covering various aspects of the Board's functioning
such as adequacy of the composition of the Board and its
Committees, Board culture, execution and performance of specific
duties, obligations and governance, for evaluation of the performance
of the Board, its Committee's and each director were circulated to all
the members of the Board along with the Agenda Papers.
ii. The members of the Board were requested to evaluate by filling the
evaluation forms and the duly filled in evaluation forms were required
to be sent to the Company Secretary in a sealed envelope or personally
submitted to the Chairman at the concerned meeting.
iii. Based on the individual evaluation of the Directors, the Board
initiated a detailed discussion at the concerned meeting on the
performance of the Board / Committee/ Individual Director, and
formulated a final collective evaluation of the Board. The Board also
provided an individual feedback to the concerned director on areas of
improvement, if any.
A separate meeting of Independent Directors was held on 23rd December,
2014 to evaluate the performance evaluation of the Chairman, the Non
Independent Directors, the Board and flow of information from
management.
VIGIL MECHANISM
The Board of Directors, on recommendation of the Audit Committee,
established a vigil mechanism by framing a Whistle Blower Policy to
deal with instance of fraud and mismanagement, if any. The Vigil
Mechanism framework ensures that strict confidentiality is maintained
whilst dealing with concerns and also that no discrimination shall be
meted out to any person for a genuinely raised concern. The designated
officer/ Audit Committee Chairman can be directly contacted to report
any suspected or confirmed incident of fraud / misconduct on [email protected].
A high level Committee has been constituted which looks into the
complaints raised. The Committee reports to the Audit Committee and the
Board.
The Whistle Blower Policy is also posted in the Investors section of
the Company's website www.hil.in on the following link
http://hil.in/investors/codes-policies/.
REMUNERATION POLICY
The Board of Directors, on recommendation of the Nomination and
Remuneration Committee framed a Nomination and Remuneration policy for
selection, appointment and remuneration of Directors, KMP and Senior
Management and matters covered u/s 178(3) of the Companies Act 2013.
The details of the same are provided in the Corporate Governance
Report. The Policy is also posted in the Investors section of the
Company's website www.hil.in on the following link
http://hil.in/investors/codes-policies/.
SEXUAL HARASSMENT POLICY
The Company as required under the provisions of "The Sexual Harassment
of Women at Workplace (Prohibition, Prevention and Redressal) Act,
2013" has framed a Policy on Prohibition, Prevention and Redressal of
Sexual Harassment of Women at Workplace and matters connected therewith
or incidental thereto.
In the year under review, the Company has not received any complaint
under the said Policy.
RELATED PARTY TRANSACTIONS
The Board of Directors, on recommendation of the Audit Committee framed
a policy for Related Party Transaction which includes policy for
selection, appointment and remuneration of Directors, KMP and Senior
Management and matters covered u/s 178(3) of the Companies Act 2013.
The details of the same are provided in the Corporate Governance
Report. The Policy is also posted in the Investors section of the
Company's website www.hil.in on the following link http:/
/hil.in/investors/codes-policies/.
All Related Party Transactions that were entered into during the
financial year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant related party
transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large. The
requisite details of the related party transactions entered into during
the financial year are provided as Annexure (II) to this report.
Suitable disclosure as required by the Accounting Standards (AS18) has
been made in the notes to the Financial Statements.
All Related Party Transactions are placed before the Audit Committee as
also the Board for approval, where ever required. Prior omnibus
approval of the Audit Committee is obtained for the transactions which
are of a foreseeable and repetitive nature. A statement giving details
of all related party transactions entered into pursuant to the omnibus
approval so granted are placed before the Audit Committee and the Board
of Directors on a quarterly basis.
None of the Directors, other than to the extent of their shareholding,
receipt of remuneration / commission, has any pecuniary relationships
or transactions vis-a-vis the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Directors' Responsibility Statement as required under the provisions of
Section 134(3)(c) of the Companies Act, 2013, is given in the Annexure
(III) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
Your Company is committed to good Corporate Governance coupled with
good corporate practices. As per the
requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2014-15 and a
Certificate from the Auditors of the Company M/s. S R Batliboi &
Associates LLP., Chartered Accountants, [ICAI Firm Registration Number:
101049W] is furnished as part of the Annual Report.
The Ministry of Corporate Affairs has issued Corporate Governance
Guidelines in December, 2009. While these Guidelines are recommendatory
in nature, your Company has already adopted most of the Guidelines. The
Company will be reviewing its Corporate Governance Practices in the
context of other recommendations under the said Guidelines for
appropriate adoption.
AUDIT COMMITTEE
Your Company has constituted an Audit Committee as per the requirements
of section 177 of the Companies Act, 2013. The details of the
composition of the Audit Committee as required under the provisions of
Section 177(8) of the Companies Act, 2013, is given in the Corporate
Governance Report furnished as part of the Annual Report. During the
year under review, the Board has accepted all the recommendations of
the Audit Committee.
HUMAN CAPITAL
The strong performance of your Company has been achieved through
excellent work and team-spirit of the Company's employees. Your Company
believes that the human capital is of utmost importance to sustain the
market leadership in all product segments and also to capture new
markets.
The changes in the Organisation Structure implemented last year has
given the Company rich dividends in terms of higher focus on individual
businesses to optimise best resources & to leverage the market
potential. We have benchmarked ourselves with the market and have
identified the high Performers on critical roles and rewarded them
appropriately, which has helped to achieve better employee engagement
and financial results. Through appropriate Performance Management
systems the Company differentiates the employees with potential to take
higher challenges and devise a separate career program for their
retention and advancement. A customized Competency based Leadership
Program has been devised for High - Potential employees with focus on
their Individual Development Plan & helping them to become future
leaders. Nurturing young, hi potential talent has been our focus
through the CEO Circle program wherein the selected participants are
provided rigorous leadership training for 2 years to prepare them to
take-up higher roles in the organization. We continue to strive to
build a performance driven culture and create an environment conducive
for the employee's growth.
CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors, on recommendation of the Corporate Social
Responsibility Committee framed a Corporate Social
Responsibility Policy in consonance with Section 135 of the Companies
Act, 2013 read with the rules framed there under duly indicating the
activities to be undertaken by the Company as specified in the Schedule
VII of the Companies Act, 2013. The Corporate Social Responsibility
Policy is posted in the Investors section of the Company's website
www.hil.in on the following link
http://hil.in/investors/codes-policies/.
The Annual Report on CSR activities is annexed herewith as Annexure
(IV) and forms part of this report.
RISK MANAGEMENT
The Risk Management programme at HIL is focused on ensuring that risks
are known and addressed. The Board of Directors, on recommendation of
the Audit Committee, established a robust Risk Management framework by
framing a Risk Management Policy to deal with all risks including
possible instances of fraud and mismanagement, if any. The Risk
Management Policy details the Company's objectives and principles of
Risk Management along with an overview of the Risk Management process,
procedures and related roles and responsibilities.
As a part of the Risk Management framework, the Company has implemented
an online Risk Management tool to help monitor and mitigate risks by
assigning the risks to different officers/committees. The Board is of
the opinion that there are no elements of risks that may threaten the
existence of the Company. The board periodically tracks the progress of
implementation of the Risk Management policy.
STATUTORY AUDITORS
The Statutory Auditors of the Company, M/s. S R Batliboi & Associates
LLP., [ICAI Firm Registration Number: 101049W], were re-appointed by
the members at the 67th Annual General Meeting held on 18th July, 2014
for a term of 3(Three) years till the conclusion of 70th Annual General
Meeting to be held in 2017. Members are requested to ratify the same at
the ensuing Annual General Meeting of the company, in accordance with
section 139 of the Companies Act 2013.
The Audit Report issued by the Statutory Auditors for the financial
year ended 31st March, 2015 forms part of this Report. There are no
qualifications, reservations or adverse remarks made by the Statutory
Auditors which requires explanation or comments from the Board.
COST AUDITORS
Pursuant to Section 148 of the Companies Act, 2013 read with the rules
framed thereunder, the cost audit records maintained by the Company in
respect of its cement products manufacturing activity are required to
be audited by a Cost Auditor. The Board of Directors, on recommendation
of the Audit Committee, appointed M/s S S Zanwar & Associates, as Cost
Auditors of the Company, to conduct the audit of the cost records of
the Company for the financial year ending 31st March, 2016 at a
remuneration of Rs.6.00 (Six) lakhs. Members are requested to ratify
the remuneration payable to the Cost Auditors at the ensuing Annual
General Meeting of the company, in accordance with section 148 of the
Companies Act 2013.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules framed there under, the Board of Directors, on recommendation
of the Audit Committee, appointed M/s P S Rao and Associates,
Practicing Company Secretaries to undertake the secretarial audit of
the Company. The secretarial audit report issued by M/s P S Rao and
Associates, Practicing Company Secretaries for the financial year
ending 31st March, 2015 is given in the Annexure (V) attached hereto
and forms part of this Report. There are no qualifications,
reservations or adverse remarks made by the secretarial auditor and the
observation made is self explanatory and requires no further
explanation from the Board.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92 of the Companies Act, 2013 and
rules framed there under, the extract of the Annual Return in form
MGT-9 is annexed herewith as Annexure (VI) and forms part of this
Report.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 134 of the Companies Act, 2013, read with the Companies
(Accounts) Rules, 2014 are given in the Annexure (VII) attached hereto
and forms part of this Report.
PARTICULARS OF EMPLOYEES
The information required pursuant to the provision of Section 197 read
with Rule, 5 of The Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 in respect of employees of the
Company, are set out in Annexure (VIII) of this Report.
ACKNOWLEDGEMENTS
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Regulatory Bodies, Suppliers and
other Business Associates.
The Directors also wish to place on record their deep sense of
gratitude and appreciation for all the employees for their commitment
and contribution towards achieving the goals of the Company.
On behalf of the Board of Directors
Sd/-
CK BIRLA
New Delhi, 27th April, 2015 Chairman
Mar 31, 2014
TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Report and the Audited
Financial Statements of the Company for the year ended 31st March 2014.
FINANCIAL RESULTS Rs. in lacs
2013-14 2012-13
Net Revenue from operations 86947 103651
Earnings Before Interest,
Depreciation & Tax 5239 12867
Less: Interest 1023 1061
Depreciation 2872 2671
Profit Before Tax and
Exceptional items 1344 9135
Less: Exceptional items 355 -
Profit before Tax 989 9135
Less: Taxes 276 3072
Profit for the year 713 6064
Balance as per last year 4708 5387
AVAILABLE FOR
APPROPRIATION 5421 11450
General Reserve 100 5000
Interim Dividend on
Equity Shares - 560
Proposed Final Dividend on
Equity Shares 373 933
Corporate Dividend Tax 63 249
Balance Carried to
Balance Sheet 4885 4708
DIVIDEND
Your directors are pleased to recommend a dividend of Rs. 5/- per equity
share (50% of the paid-up capital) as against the total dividend of Rs.
20/- paid last year (200% of the paid up capital) for your
consideration and approval at the ensuing Annual General Meeting of the
Company.
The total dividend outgo will be Rs. 436.54 lacs (including dividend
distribution tax)
OVERALL ECONOMIC OUTLOOK
The year 2013-14 witnessed the recovery of global economy from the
global crisis of 2009. Global activity has broadly strengthened and is
expected to improve further in 2014-15, according to the April 2014
World Economic Outlook, with much of the impetus for growth coming from
advanced economies. Although downside risks have diminished overall,
lower-than-expected inflation poses risks for advanced economies, there
is increased financial volatility in emerging market economies, and
increases in the cost of capital will likely dampen investment and
weigh on growth.
The Indian Economic growth in 2013- 14 slowed down to a decade low of
less than 5%. The growth slowdown was mainly attributable to
contraction in manufacturing sector coupled with low investment and
consumption in infrastructure sectors although the effect was partly
offset by modest growth in Agriculture and allied sectors and growth in
exports due to rupee depreciation.
PERFORMANCE
In the year 2013-14, the Company''s revenue stood at Rs. 978 Crores as
compared to Rs. 1166 crores in the previous year. Consequently, Profit
Before Tax for the year under review witnessed steep decline to Rs. 9.89
crores as compared to Rs. 91.35 crores reported last year. The drop in
profitability is mainly attributable to subdued market conditions
coupled with overall rise in all costs on account of various external
factors. The Company''s continued focus on managing costs through
various initiatives helped to minimise the overall impact of cost
increase to some extent.
While the external factors beyond the control of the Company have
seriously impacted the bottom line, the Company has managed to increase
it''s market share in the sheeting which is its largest revenue segment
generating business. To improve the liquidity the Company reduced its
working capital.
During the year under review the Company has undertaken various
strategic initiatives such as diversification into manufacture of
Advanced Polymer Products, expansion of Golan and Kondapally plants,
addition of fuel efficient boilers etc.,
Fibre Cement Sheet Products
Fibre Cement Sheets continue to be the major revenue earner for the
Company. The year under review was challenging for the manufacturing
sector especially so for companies engaged in the building material
sector. The Fibre cement industry witnessed a de-growth of 19% during
the year under review mainly due to poor demand from housing and
infrastructure sectors and also change of consumption pattern among the
users. However, your company could reduce the said impact to some
extent by aggressive marketing strategies which have helped the company
to outperform the industry by increasing its market leadership. The
fibre cement sheet industry is expected to grow at a modest rate of 3%
during the current year.
During the year under review, Company terminated the lease agreement
entered with M/s. Sturdy Industries Limited in view of subdued market
conditions and optimised capacity at its other locations by optimal
planning.
Your Company expects that the focus on low cost mass housing, providing
school shelter and developing proper infrastructure in the rural areas
continue to be main focus of the Government and expect this will gain
momentum during the current year. These initiatives will be the key
drivers which will influence the demand for construction material. The
Fibre cement sheets will continue to be the preferred choice for the
roofing requirement of millions of rural population in India as still
around 65% of the population lives in rural India. With augmenting of
existing capacities, your company is confident of its growth
aspirations and maintaining its market leadership.
Green Building Products
The Government''s continued support, focus and encouragement for using
green building products has given an additional impetus to the growth
of the building material industry. HIL continued its initiative of
educating masses on carbon foot print reduction by using Environment
friendly products during last year also.
A commitment towards producing green building products and solutions
with an ultimate aim of helping the Construction and Infrastructure
Industry to build green and sustainable habitats has been the vision
followed by the Company consistently.
Many initiatives were undertaken during this period to create pull for
the brand. Event sponsorship and awards helped establish connect with
the right target group, and is helping in establishing a strong bond
with all our customers.
Aerocon AAC - Blocks
AAC blocks manufacturing is a low entry barrier business. This has
lead to substantial addition in AAC capacity during 2013-14, especially
by regional players in the West and South markets, resulting in a huge
over supply scenario.
This has resulted in intense price war in the market, especially in
Gujarat and Maharashtra, leading to a 20% drop in sales as compared to
2012-13.
Well planned and successful marketing strategies have made Aerocon
Blocks a much preferred choice over competition. HIL continue to
retain its core strength like Customer focus, quality and speed of
delivery leading to enhanced customer satisfaction.
With increasing awareness and acceptance for usage of green building
products, market for AAC blocks is expected to grow multi-fold in the
years to come. Your company has put in place aggressive sales
strategies like key account management, branding and premium service
levels, to ensure increase in market share and full utilisation of the
manufacturing facilities.
Aerocon Panels
Continued slow down in the infrastructure projects which generally
offers maximum potential for usage of Aerocon Panels, adversely
affected this business in 2013-14. However, with your company
focussing on alternative consumer segments like healthcare, industrial
segments etc., and the momentum in infrastructure segment expected to
pick up, the outlook for 2014-15 is very robust. Your company will
continue its focus on Tier 2 and Tier 3 towns which are witnessing good
growth in real estate and infrastructure projects.
Thermal Insulation - HYSIL
With the absence of major green field projects or capacity expansion by
existing players on account of poor growth in infrastructure industry,
this has led to drop in sales of thermal insulation products
manufactured by your company. However the export market contributed
modestly to this segment performance. Your Company is vigorously
working on the couple of leading players in the UAE and Iran markets to
promote export of HYSIL product which will accelerate growth in current
year. HYSIL has received international certifications from of TUV-SUD
and CE which will give it access to market in other countries as well.
Your company will continue its focus on exports primarily to GCC
countries.
NEW PROJECTS
In tandem with our motto- "Upgrading India''s life spaces", and adding
to our portfolio of building materials your Company ventured into
manufacturing of Advanced Polymer Products, with cPVC and uPVC plumbing
products. Looking at the attractive growth of the Plastic plumbing
products market and with intent to leverage the Company''s pan India
manufacturing, distribution and selling facilities, HIL forayed into
this segment with the commissioning of its state of art cPVC and uPVC
Pipes and Fittings manufacturing unit at Faridabad, Haryana on 7th
October''2013 with an initial capacity of 6000 MT. The products are
being marketed under the brand name of "AEROCON Pipes and Fittings".
As mentioned in our last year report, in order to sustain the existing
market and grow at a faster phase, the Company has started the process
of setting up a project for manufacture of AAC Blocks in Jhajjar in
Haryana. The project is progressing as per the timelines envisaged and
expected to start its commercial production latest by beginning of last
quarter of current fiscal.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(IV) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
In accordance with the provisions of Companies Act, 2013 and the
Articles of Association of the Company, Mr. C.K.Birla, Chairman and
Director of the Company will retire by rotation at the ensuing Annual
General Meeting and, being eligible, offers himself for re-appointment.
In accordance with the provisions of Companies Act, 2013 and the
Listing Agreement, the office of directorship of Mr. P Vaman Rao and
Mr. Yash Paul, existing Independent Directors pursuant to Clause 49 of
the listing agreement, was liable to retirement by rotation. With the
enactment of the Companies Act, 2013 (Act'') it is now incumbent upon
every listed Company to appoint ''Independent Directors'' as defined in
section 149 of the Act, which has been notified w.e.f 1st April 2014,
who are not liable to retire by rotation and shall hold office for a
term up to 5 (five) consecutive years. Accordingly, It is proposed to
appoint Shri. P. Vaman Rao & Shri. Yash Paul as Independent Directors
under Section 149 of the Act and Clause 49 (revised) of the Listing
Agreement to hold office for 5 (five) consecutive years from 18th July
2014 up to 17th July 2019, whose office shall not be liable to retire
by rotation, at the ensuing Annual General Meeting of the Company. The
Resolution proposing their reappointment as Independent Directors will
be placed before the Shareholders for their approval at the ensuing
Annual General Meeting of the Company.
Shri. Krishnagopal Maheshwari, Director of the company due to personal
reasons resigned from the directorship of the Company w.e.f 5th May,
2014. The Board places on record its deep appreciation for the valuable
services rendered by him during association of about 50 years as a
Director of the Company.
Shri. Shreegopal Daga, Director of the company due to his personal
reasons resigned from the directorship of the Company w.e.f 7th May,
2014. The Board places on record its deep appreciation for the valuable
services rendered by him during association of about 39 years as a
Director of the Company.
The Board of Directors of the Company co-opted Shri. Desh Deepak
Kehetrapal as an Additional Director of the Company with effect from
28th October 2013, in the category of Non-Executive and Non-Independent
Director, pursuant to Section 260 of the Companies Act, 1956 read with
Article 114 of the Articles of Association of the Company. The Board of
Directors of the Company also co-opted Smt. Gauri Rasgotra as an
Additional Director of the Company with effect from 8th May 2014, in
the category of Independent Director, pursuant to Section 149, 161 of
the Companies Act, 2013 read with Article 114 of the Articles of
Association of the Company.
Shri. Desh Deepak Kehetrapal and Smt. Gauri Rasgotra holds the office
of Director, as Additional Director, until the date of the ensuing
Annual General Meeting of the Company and are eligible for appointment
as a Director. Keeping in view their experience and expertise, the
Board considers it desirable that the Company should continue to avail
the services of Shri. Desh Deepak Kehetrapal and Smt. Gauri Rasgotra,
as their presence as Director on the Board would be of immense benefit
to the Company. The Resolution proposing their appointment will be
placed before the Shareholders for their approval at the ensuing Annual
General Meeting of the company.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
For Directors seeking appointment/re-appointment in the forthcoming
Annual General Meeting of the Company; the particulars as required to
be disclosed in accordance with Clause 49 (Corporate Governance) of
Listing Agreement, forms part of Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Directors'' Responsibility Statement as required under the provisions of
Section 217 (2AA) of the Companies Act, 1956, is given in the Annexure
(I) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
The Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance coupled with good corporate practices. As per
the requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2013-14 and a
Certificate from the Auditors of the Company M/s. S.R. Batliboi &
Associates LLP., Chartered Accountants, [ICAI Firm Registration Number:
101049W] is furnished as part of this Annual Report.
The Ministry of Corporate Affairs has issued Corporate Governance
Guidelines in December, 2009. While these Guidelines are recommendatory
in nature, the Company has already adopted most of the Guidelines. The
Company will be reviewing its Corporate Governance Practices in the
context of other recommendations under the said Guidelines for
appropriate adoption.
HUMAN CAPITAL
Human Capital has gained prime importance in last few years. Our
Company believes that the human capital is of utmost importance to
sustain the market leadership in all product segments and also to
capture new markets.
We have changed the Organisation Structure to optimise best resources &
to leverage the market potential. We have identified the high
Performers and rewarded them appropriately, which has helped to achieve
better employee engagement. Through Performance Management the Company
differentiates the employees with potential to take higher challenges
and devise a separate career program for their retention and
advancement. A customized Competency based training program has been
devised for High - Potential employees with focus on their Individual
Development Plan & helping them to become future leaders.
We are striving to build a performance driven culture and create an
environment conducive for the employee''s growth.
AUDITORS
The Statutory Auditors of the Company, M/s. S.R.Batliboi & Associates
LLP., ICAI Firm Registration Number: 101049W, who retire at the
conclusion of ensuing Annual General Meeting, being eligible, offer
themselves for re- appointment for a term of 3(Three) years in
accordance with section 139 of the Companies Act 2013.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given in the Annexure (ii) attached hereto and forms part of
this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other required particulars of the employees are
set out in Annexure (III) attached hereto and forms part of this
Report. However, having regard to the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Annual Report excluding
the aforesaid information is being sent to all the members of the
Company and others entitled thereto. Any member interested in obtaining
such particulars may write to the Company Secretary at the Registered
Office of the Company.
ACKNOWLEDGEMENTS
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Suppliers and other Business
Associates.
The Directors also wish to place on record their appreciation for all
the employees for their commitment and contribution towards achieving
the goals of the Company.
On behalf of the Board of Directors
C.K. BIRLA
New Delhi, 8th May, 2014 Chairman
Mar 31, 2013
TO THE SHAREHOLDERS
The Directors have pleasure in presenting their Report and the Audited
Accounts of the Company for the year ended 31st March 2013.
FINANCIAL RESULTS
Rs.in lacs
2012-13 2011-12
Earnings before Interest,
Depreciation and Tax 12867 11599
Less: Interest 1061 746
Depreciation 2671 2117
Profit before Tax 9135 8736
Less:Taxes 3071 2681
Profit for the year 6064 6055
Balance as per last year 5386 4933
AVAILABLE FOR APPROPRIATION 11450 10988
APPROPRIATION
General Reserve 5000 4000
Interim Dividend on Equity Shares 560 448
Proposed Final Dividend on
Equity Shares 933 933
Corporate Dividend Tax 249 221
Balance carried to Balance Sheet 4708 5386
DIVIDEND
During the year the Board has declared an Interim Dividend of Rs.7.50/-
per equity share (75% of the paid-up capital). Your directors are now
pleased to recommend a final dividend of Rs.12.50/- per equity share (125
% of the paid-up capital) for your consideration and approval at the
ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year
2012-13 would be Rs.20/- per share (200% of the paid-up equity capital).
The total dividend outgo will be Rs.1741.83 lacs (including dividend
distribution tax)
CHANGE OF COMPANY''S NAME:
Your directors are pleased to inform that as approved by the members at
the previous Annual General Meeting, the request for change of name of
your Company from "Hyderabad Industries Limited" to "HIL Limited"
has been approved by the Registrar of Companies, Andhra Pradesh
effective from 16th August 2012. The new name depicts your Company''s
diversified business activities with a pan India presence and reflects
the new and vibrant corporate image.
OVERALL ECONOMIC OUTLOOK
The global economy which is yet to shake off from the fallout crisis of
2008-2009, dropped to almost a growth of 3 percent in 2012, which
indicates that about half a percentage point has been wiped off from
the long-term trend since the crisis emerged. The East Asia and Pacific
region continues to be the main driver for global growth, contributing
around 40 percent of global growth in 2012. Driven by strong domestic
demand, the region grew at 7.5 percent in 2012, higher than any other
region in the world. While developing economies excluding China grew
6.2 percent in 2012, up from 4.5 percent in 2011 China''s growth slowed
to 7.8 percent in 2012.
The Indian Economy posed the lowest annual growth in the last decade
with its Gross Domestic Product (GDP) growth estimated to be just over
5%. Industrial production figures show a worrying slowdown and lack of
spending in Infrastructure has posed severe challenges for the related
industries.
PERFORMANCE
In the year 2012-13, the Company''s revenue increased to Rs.1,166 crores
from Rs.949 crores in the previous year, a growth of 23% over the
previous year. Profit Before Tax posted a modest growth of 5% from
Rs.87.36 crores last year to Rs.91.35 crores in the year under review. The
company witnessed an overall rise in all costs during the year under
review on account of various external factors. However with an all
round focused and un-relented approach by the Management on various
cost saving initiatives your Company could reduce the overall burden of
cost increase to a great extent.
Fibre Cement Sheet Products
Fibre Cement Sheets continue to be the major revenue earner for the
Company. Year 2012-13 was difficult for the manufacturing sector,
especially for the building material sector. The Fibre cement industry
registered a growth of an only 3% mainly due to poor demand from
housing and infrastructure sectors. However, despite all the odds, the
company''s sales volume grew by 5.5 % and your company continues to
maintain its market leadership. A silver lining is seen on the horizon
of 2013-14. The Indian economy is on its path of recovery as is the
Government''s increased spending on housing infra projects. The Fibre
Cement Sheet Industry is estimated to grow between 5% and 6% during the
financial year 2013-14.
The Government''s increased focus on low cost mass housing, providing
school shelter and developing proper infrastructure in the rural areas
are gaining momentum. These initiatives will be the key drivers which
will influence the demand for construction material. The Fibre cement
sheets will continue to be the preferred choice for the roofing
requirement of millions of rural population in India. With augmenting
of existing capacities established and new facilities being planned,
your company is confident of its growth aspirations and maintaining its
market leadership.
Green Building Products
The Government''s continued support, focus and encouragement for using
green building products has given an additional impetus to the growth
of the building material industry. Environment sustainability,
reduction of carbon emissions, educating masses on green building
products, providing eco-friendly solutions have been HIL''s approach. A
commitment towards producing green building products and solutions with
an ultimate aim of helping the Construction and Infrastructure Industry
to build green and sustainable habitats has been the vision followed by
the Company consistently.
In addition to IGBC, Aerocon Panels and Blocks obtained GRIHA green
product certification in 2012-13. Many strategic initiatives were
undertaken during this period to create pull for the brand. Event
sponsorship and awards
helped establish connect with the right target group, and is helping in
establishing a strong bond with all our customers.
The year 2012-13 was also a year of recognition of HIL''s efforts by the
industry. Your Company is proud to receive Manufacturing Excellence
award by ITP publishing, Design Wall award by ET Acetech, Outstanding
Entrepreneur by GOI, Best Innovation in Brand Management, Innovation in
HR practices, Best Innovation in sustainability and Innovative product
category, the awards and accolades received is a testimony of HIL''s
commitment to excellence and market leadership.
Aerocon AAC - Blocks
Well planned and successful marketing strategies have made Aerocon
Blocks a much preferred choice over competition. Customer focus,
quality and speed of delivery have been HIL''s core strength. Today,
Aerocon is a preferred choice of the customers.
Aerocon blocks registered an impressive growth of 26% in volume terms
during 2012-13. The acceptance of AAC blocks has increased many folds
in the building industry due to its economy, reduced consumption of
high value materials like steel, cement, sand, water, labour etc. This
has led to a higher penetration in this product category and an
increase in demand. AAC blocks manufacturing is a low entry barrier
business leading to many regional players mushrooming in a short span
of time. Due to this, the competition is likely to intensify further.
Branding and aggressive sales strategies will be the key
differentiators for Aerocon blocks.
Aerocon Panels
In view of considerable slow down in the infrastructure projects where
Aerocon Panels are mostly used, the business was adversely affected in
2012-13. However, the infrastructure segment is expected to pick up
momentum during second half of 2013-14 with major focus on segments
such as Hospitality, Healthcare, Education, Industrial, IT and ITES.
Your company will also focus on Tier 2 and Tier 3 towns which are
witnessing good growth in real estate and infrastructure projects.
Thermal Insulation - HYSIL
The Thermal insulation industry did see a modest growth in 2012-13,
majorly due to postponement of most of the green field projects and
expansions. Hysil''s increased focus on exports ensured sustainable
growth. In 2013-14, sales grew by 9% of which exports contributed to
5%. Breakthrough in UAE and Iran markets will accelerate growth. HYSIL
has received international certifications "TUV-SUDÂ and "CEÂ
which will give access in other countries as well. Your company will
continue its focus on exports primarily to GCC countries.
NEW PROJECTS
As a part of our market share enhancement strategy, the Company is
constantly exploring options for augmenting capacity at the existing
locations and also by setting up new plants in strategic locations to
keep pace with the growing demand for our products.
During the year under review the Company has started land acquisition
process for its proposed new AAC Blocks unit.
Wind Power: - Expanding its footprint into the renewable energy sector
your Company has set up a 2.50 MW Wind Power Project in Jodhpur
District of Rajasthan during the year. With this the total Wind Power
installed Capacity of the Company has increased to 7.35MW.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(IV) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. Krishnagopal Maheshwari
and Mr. Yashpaul, Directors of the Company will retire by rotation at
the ensuing Annual General Meeting and, being eligible, will be
offering themselves for re-appointment.
For Directors seeking appointment/re-appointment in the forthcoming
Annual General Meeting of the Company; the particulars as required to
be disclosed in accordance with Clause 49 (Corporate Governance) of
Listing Agreement, forms part of Corporate Governance Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Directors'' Responsibility Statement as required under the provisions of
Section 217 (2AA) of the Companies Act, 1956, is given in the Annexure
(I) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
The Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance coupled with good corporate practices. As per
the requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2012-13 and a
Certificate from the Auditors of the Company M/s. S.R. Batliboi &
Associates LLP., Chartered Accountants, (ICAI Firm Registration Number:
101049W) is furnished as part of this Annual Report.
The Ministry of Corporate Affairs has issued Corporate Governance
Guidelines in December, 2009. While these Guidelines are recommendatory
in nature, the Company has already adopted most of the Guidelines. The
Company will be reviewing its Corporate Governance Practices in the
context of other recommendations under the said Guidelines for
appropriate adoption.
HUMAN CAPITAL
Your Company focus has increased over the years towards Human Capital.
Your Company believes that the support of human capital is of utmost
importance to sustain the market leadership in all product segments and
also to capture new markets.
Your Company has successfully migrated to an improved Performance
Management System to identify the high Performers & reward them
appropriately which has helped to achieve better employee engagement
score. Through
Performance Management the Company differentiates the employees with
potential to take more challenges and devise a separate career program
for their retention and advancement. A customized Competency based
training program has been devised for High - Potential employees with
focus on their Individual Development Plan & helping them to become
future leaders.
We are striving to build a performance driven culture and create an
environment conducive for the employee''s growth.
AUDITORS
The Statutory Auditors of the Company, M/s. S.R.Batliboi & Associates
LLP., (converted their existing partnership firm into LLP w.e.f.
01.04.2013) ICAI Firm Registration Number: 101049W, who retire at the
conclusion of ensuing Annual General Meeting, being eligible, offer
themselves for re-appointment.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988 are given
in the Annexure (II) attached hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other required particulars of the employees are
set out in Annexure (III) attached hereto and forms part of this
Report.
ACKNOWLEDGEMENTS
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Suppliers and other Business
Associates.
The Directors also wish to place on record their appreciation for all
the employees for their commitment and contribution towards achieving
the goals of the Company.
On behalf of the Board of Directors
C.K. BIRLA
Chairman
New Delhi, 3rd May, 2013
Mar 31, 2012
The Directors have pleasure in presenting their Report and the Audited
Accounts of the Company for the year ended 31st March 2012.
FINANCIAL RESULTS Rs. in lacs
2011-2012 2010-2011
Earnings before Interest,
Depreciation and Tax 11599.32 9771.68
Less: Interest 746.05 562.94
Depreciation 2117.58 1794.93
Profit before Tax 8735.69 7413.81
Less:Taxes 2681.14 2353.39
Profit for the year 6054.55 5060.42
Balance as per last year 4933.66 4262.68
AVAILABLE FOR APPROPRIATION 10988.21 9323.10
APPROPRIATION
General Reserve 4000.00 3000.00
Interim Dividend on Equity Shares 447.75 447.75
Proposed Final Dividend on
Equity Shares 932.82 746.26
Corporate Dividend Tax 221.08 195.43
Balance carried to Balance Sheet 5386.56 4933.66
DIVIDEND
During the year the Board has declared an Interim Dividend Rs. of 6/- per
equity share (60% of the paid-up capital). Your directors are now
pleased to recommend a final dividend of Rs. 12.50/- per equity share
(125% of the paid-up capital) for your consideration and approval at
the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year
2011-12 would be Rs. 18.50/- per share (185% of the paid-up equity
capital).
The total dividend outgo will be Rs. 1601.65 lacs (including dividend
distribution tax)
OVERALL ECONOMIC OUTLOOK
After the extended phase of slowdown starting from
2008-09 on account of global recession, the economic prospects in US
and Asia showed signs of improvement in 2011-12. As per the latest IMF
forecast, IMF has increased world output growth projections to 3.5% for
the year. However, it has also cautioned that though the outlook for
the global economy is slowly improving but it is still fragile.
The Euro zone crisis has rocked the economy again with shocks of
sovereign debt crisis emerging from various major economies of the Euro
Zone. As Europe enters a recessionary phase, its impact may trickle
down to the rest of the world as well. The biggest risks to the global
economy in 2012-13 stems from the oil price spikes, deterioration in
the European crisis and the investment slump in other developing
economies.
The Indian Economy's overall Gross Domestic Product (GDP) growth is
estimated at 6.9% in 2011-12. India's current account deficit is
expected to touch 4%of GDP in the 2011-12 fiscal year compared to 2.6%
in the previous year, the worst in at least eight years on account of a
widening trade gap. Government in its latest fiscal budget showed its
fiscal deficit to have ballooned to 5.9% of the GDP in 2011-12 which is
projected to come down to 5.1% in 2012-13. India's balance of payments
slipped into negative territory for the first time in last three years.
High inflation continues to be an area of concern for the common man
and would pose a serious challenge for the Government during 2012-13,
driven mainly by food inflation and increasing cost of living.
Government was compelled to take tough measures such as raising the
interest rates, revising the quota restrictions for import/export of
commodities etc. However, the long-term prospect of the Indian economy,
including the infrastructure and industrial sectors, continue to remain
positive. The Economic growth can accelerate if the government
implements its various policy reforms and initiatives such as more
efficient use of fuel and fertilizer subsidies and an early
implementation of the GST and Direct Tax Code, thereby reducing
structural fiscal deficits and improve India's investment climate. With
good monsoons in the last year and healthy food stocks together with
forecasts of a normal monsoon this year, we expect the Indian Economy
and especially the rural demand to register a reasonable growth.
PERFORMANCE
In the year 2011-12 the Company's revenue increased to
Rs. 949 Crores from Rs. 802 Crores in the previous year, a growth of 18%
over the previous year. The Profit Before Tax has also increased from Rs.
74.14 crores to Rs. 87.36 crores registering a growth of 18 %. The growth
in turnover and profitability is mainly attributed to aggressive
marketing strategy and ongoing cost saving initiatives.
Fibre Cement Sheet Products
Fibre Cement Sheets continue to be the major revenue earner for the
Company. During the year under review it registered a growth of 13% in
revenue over the previous year. The Fibre Cement Sheet Industry is
estimated to grow at around 5% - 7% during the financial year 2012-13
on account of good monsoon in 2011-12, increase in rural income on
account of good agricultural production coupled with increase in
minimum support price.
The housing shortage continues to be large which offers opportunity for
growth to the Company. Implementation of Government of India's
infrastructure development projects have started gaining momentum. This
together with other Government sponsored initiatives in providing low
cost housing and schools for the masses are expected to increase demand
for construction materials including fibre cement sheets. With the
additional capacities established during the year under review and new
facilities planned in 2012-13, your Company is confident of maintaining
its market leadership.
Green Building Products
Increasing concern and importance being given to conserve environment
and its sustainability, is resulting into increasing preference for
Green building products. The Company's drive in growing the Green
Building Products business has achieved considerable success. Your
Company is committed towards producing sustainable green building
products and solutions with an ultimate aim of helping the Construction
and Infrastructure Industry to build green habitats.
Aerocon AAC - Blocks
The Aerocon Blocks, a key offering in the Company's product basket as
part of its Green Building Products initiative, registered an
impressive growth of over 100% during the period under review, mainly
on account of stabilization and full capacity utilization of the Golan
plant in Gujarat and Company's aggressive and successful marketing
strategies in developing this business. This has resulted in an
increase in market share from 20% to 26% in the Southern & Western
regions of the Country. Our Aerocon Blocks besides being environment
friendly (Green) has several advantages for the user in terms of speed
of construction and cost savings. This is resulting in increased demand
and preference for our AAC Blocks over the conventional products such
as red clay bricks which is no longer a favoured product. This division
will continue to grow although there will be pressure on prices as
competition is likely to intensify further with new entrants in the
market. High acceptance of our Aerocon brand and our focus on quality,
reliability and customer service has helped us to attain our leadership
position. Your Company has ambitious plans to setup new capacities to
cater to the growing demand in the forthcoming years.
Aerocon Panels
Aerocon Panels, for construction of prefab structures and partition
walls, have been extensively used in the infrastructure sectors like
roadways, power plants and airports as well as in the commercial
buildings such as malls and modern offices. An innovative and new age
product, these panels have created a niche for themselves due to ease
of installation and speedy construction as benefits to the users.
During the year under review, the sales of Aerocon Panels in quantity
terms has increased by 21% over the previous year while the industry
grew by 16% during the same period. The Company's Aerocon Panels
enjoys a domestic market share of 58%.
Thermal Insulation - HYSIL
The augmented capacity in 2011-12 helped us to retain our market share
of 65% despite the entry of new manufacturers within India and
continued imports from China.
The sales in quantity terms of thermal insulation segment grew by 7%
over the previous year, keeping pace with the industry growth. However,
the future outlook is critically dependent on the commissioning of
green field projects. The industry is likely to grow at a rate of 5 %
p.a. This division has chalked out plans to expand the market by
entering into pipe insulation and renewed thrust on exports, primarily
to GCC countries.
NEW PROJECTS
As a part of our market share enhancement strategy, the Company is
constantly exploring options for augmenting capacity at existing
locations and also by setting up new plants in strategic locations to
keep pace with the growing demand for our products.
During the year under review the Company has started commercial
production of its second Line at its Fibre Cement Sheet Plant at
Sathariya, U.P. With this additional line the total installed capacity
of our plant at Sathariya, in Uttar Pradesh has increased to 1,80,000
TPA.
Wind Power :- Expanding its footprint into renewable energy sector your
Company has set up a 1.25 MW Wind Power Project near Coimbatore,
Tamilnadu. The Wind Turbine was commissioned in September 2011 and the
energy generated from the project was used for captive consumption at
our AAC Blocks manufacturing unit near Chennai, Tamilnadu. With this,
both the AAC Blocks manufacturing units of the Company are now
operating with captive Wind Energy Turbines, making the Company's green
Blocks greener.
The Company is also setting up a 2.50 MW Wind Power Project in Jodhpur
District of Rajasthan which is expected to commission by May, 2012.
With this the total Wind Power installed Capacity of the Company would
be 7.35MW. Your Company has ambitious growth plans in Renewable energy
sector, but future expansion plans grossly depends on the consistency
of the policies of the Government of India.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(IV) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. C.K. Birla and Mr .P Vaman
Rao, Directors of the Company will retire by rotation at the ensuing
Annual General Meeting and, being eligible, will be offering themselves
for re-appointment.
The term of Mr.Abhaya Shankar, as Managing Director of the Company is
due for renewal on 30th April, 2012. On recommendation of the
Remuneration Committee the Board at its meeting held on 24th January,
2012 duly considering the performance and achievement of the Company
under his supervision and leadership, subject to the approval of the
members at the forthcoming Annual General Meeting, reappointed
Mr.Abhaya Shankar as Managing Director of the Company for a period of 3
(Three) years w.e.f 1st May, 2012.
For Directors seeking appointment/ re-appointment in the forthcoming
Annual General Meeting of the Company; the particulars as required to
be disclosed in accordance with Clause 49 (Corporate Governance) of
Listing Agreement, forms part of Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Directors' Responsibility Statement as required under the provisions of
Section 217 (2AA) of the Companies Act, 1956, is given in the Annexure
(I) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
The Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance with ethical corporate practices. As per the
requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2011-12 and a
Certificate from the Auditors of the Company are furnished as part of
this Annual Report.
The Ministry of Corporate Affairs has issued Corporate Governance
Guidelines in December, 2009. While these Guidelines are recommendatory
in nature, the Company has already adopted most of the Guidelines. The
Company will be reviewing its Corporate Governance Practices in the
context of other recommendations under the said Guidelines for
appropriate adoption.
HUMAN CAPITAL
At HIL, amongst all our assets, we consider People as most valuable. To
achieve the ambitious goal of doubling our revenues in next four to
five years and to sustain our market leadership in all our product
segments, we have built a competent and motivated team across the
organization.
One of the major achievements during the year 2011-12 was
Organizational Restructuring to equip the Leadership team to achieve
its goals. We have strengthened our senior leadership Team which will
bring in transformation and improvement across all functions. Various
initiatives towards acquiring fresh talent, training and providing
career growth to retain talent are being put in place.
We have developed a robust mechanism to identify high potential
employees and to train them as future leaders, we have
institutionalized Management Development Programs (MDPs) & competency
based training. We are taking up various initiatives for employee
engagement including Performance Management Systems, effective rewards
and recognition programs which will build a performance driven culture
and create a conducive environment for the employee's growth.
AUDITORS
The Statutory Auditors of the Company, M/s. S.R.Batliboi & Associates.,
who retire at the conclusion of ensuing Annual General Meeting, being
eligible, offer themselves for re-appointment.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and
Outgo as required under Section 217(1)(e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 are given in the Annexure (ii) attached
hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other required particulars of the employees are
set out in Annexure (III) attached hereto and forms part of this
Report.
ACKNOWLEDGEMENTS
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Suppliers and other Business
Associates.
The Directors also wish to place on record their appreciation for all
the employees for their commitment and contribution towards achieving
the goals of the Company.
Annexure (I): Directors' Responsibility Statement
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 and on the basis of compliance certificate received from the
executives of the Company and subject to disclosures in the Annual
Accounts, as also on the basis of the discussion with the Statutory
Auditors of the Company from time to time, and to the best of their
knowledge and information furnished, the Board of Directors states:
i) That in preparation of the Annual Accounts for the year ended 31st
March, 2012; all the applicable Accounting Standards prescribed by the
Institute of Chartered Accountants of India have been followed along
with proper explanation relating to material departures, if any.
ii) That the Directors have adopted such accounting policies, as
selected in consultation with Statutory Auditors, 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 the financial year ended 31st March, 2012.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Annual Accounts for the year ended 31st March, 2012, has
been prepared on a going concern basis.
On behalf of the Board of Directors
C.K. BIRLA
New Delhi, 1st May, 2012 Chairman
Mar 31, 2011
The Directors have pleasure in presenting their Report and the Audited
Accounts of the Company for the year ended 31st March 2011.
FINANCIAL RESULTS Rs. in lacs
2010-2011 2009-2010
Profit before Interest,
Depreciation, Exceptional
Items and Taxation 9759.27 15772.12
Less:Interest 550.53 625.14
Depreciation 1794.93 1554.71
Profit before Exceptional
Items & Taxation 7413.81 13592.27
Exceptional Items à 18.37
Profit after Exceptional Items 7413.81 13573.90
Taxes (2353.39) (4602.08)
Profit after Tax 5060.42 8971.82
Balance as per last year 4262.68 5181.10
AVAILABLE FOR APPROPRIATION 9323.10 14152.92
APPROPRIATION
General Reserve 3000.00 8493.30
Interim Dividend on Equity Shares 447.75 447.75
Proposed Final Dividend on
Equity Shares 746.26 746.26
Corporate Dividend Tax 195.43 202.93
Balance carried to Balance Sheet 4933.66 4262.68
DIVIDEND
During the year the Board has declared an Interim Dividend of Rs. 6/-
per equity share (60% of the paid-up capital). Your directors are now
pleased to recommend a final dividend of Rs. 10/- per equity share
(100% of the paid- up capital) for your consideration and approval at
the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year
2010-11 would be Rs. 16/- per share (160% of the paid-up equity
capital).
The total dividend outgo would be Rs 1389.44 lacs (including dividend
distribution tax)
OVERALL ECONOMY
The Indian Economy in 2010-11 has been considered as one of the fastest
growing economies of the world, and is known to have made one of the
most rapid recoveries after the global financial meltdown of 2008-09
and the affect of two poor monsoons in 2008-09 & 2009-10. Although the
monsoon in 2009-10 was poor which resulted in unsatisfactory yield of
Kharif crop, the recovery of both agricultural and manufacturing
sectors in the early months of 2010 resulted in an overall GDP of 8.6%
in 2010-11. However, the agricultural GDP rate of 0.4% in 2009-10, and
unseasonal rains affecting winter crops in 2010-11, combined with high
inflation has resulted in lower demand and absence of growth in our
industry.
High inflation continues to be an area of concern for the common man
and was a serious challenge for the Government during 2010-11. Driven
mainly by food inflation and increasing cost of living, Government was
compelled to take stern actions such as raising the interest levels.
The weaker segments of the population were affected the most, which to
a large extent explains the lack of growth in demand for some of the
rural/semi-urban products including the fibre cement roof sheeting.
However, the medium to long-term prospect of the economy, including the
infrastructure and industrial sectors, continue to remain positive.
India is today rated as one of the most attractive investment
destinations across the globe. In 2011-12 the growth in our industry
is expected to be between 5% to 7%.
PERFORMANCE
In the year 2010-11 the Companys revenue increased to Rs. 801 Crores,
a growth of 6% over the previous year and a CAGR of 12% in the last 5
years.
Sales, in quantity terms, of Fibre Cement Sheets increased by 4% over
the previous year, as compared to 2% growth in the industry. Poor
monsoon in 2009-10 coupled with high inflation had an impact on the
spend for new shelter or upgradation. The Industry saddled with excess
capacity faced severe pricing pressure. Inspite of escalation in raw
material prices the Industry could not pass on the increase to its
customers. On account of these two major factors, the Industry saw a
drop in profitability. HIL increased its sales volume and market share
marginally over the previous year due to its competitive strength.
The Fibre Cement Sheet Industry is estimated to grow at about 5% - 7%
in financial year 2011-12 on account of good monsoon in 2010-11,
increase in rural income on account of record agriculture production
coupled with increase in minimum support price. The housing shortage
continues to be large which offers opportunity for growth. With the
additional capacities established and further enhancement in capacity
planned during the year, your Company is confident of maintaining its
market leadership.
Implementation of Government of Indias infrastructure development
projects have started gaining momentum. This together with other
Government sponsored initiatives in providing homes and schools for the
masses in general and the poor in particular is expected to increase
demand for construction materials.
Green Building Products
Emphasis on environment and preference for Green building products
remains a focus area for the construction Industry. The Companys
drive in growing the Green Building Products business also met with
considerable success.
Aerocon Panels
Aerocon Panels, used for construction of prefab structures and
partition walls, has been extensively used in the infrastructure
sectors like roadways, irrigation, power plants, airports etc and also
in the construction of malls, schools, colleges etc.
The production in quantity terms of Aerocon Panels has increased by 40%
and the sales have increased by 39% respectively over the previous
year. The business is expected to grow in excess of 25 % p.a. for next
few years.
Aerocon AAC - Blocks
The Aerocon Blocks, another key offering of the Company as part of its
Green Building Products initiative, also registered a good growth in
2010-11. This was possible due to the newly commissioned Plant at
Golan. After the stabilization period of six months of operation, the
Golan plant is operating at above 60% of its capacity. This has helped
your Company to capture significant portion of the markets in west and
south in a short time amidst intense competition, which is a reflection
of the Companys aggressive and successful strategies in developing
this business. The division will continue to grow in volumes in the
coming year, although there will be pressure on prices as competition
is likely to intensify further with new entrants in the market.
However, the high acceptance of our
Aerocon brand and our focus on quality and reliability will help the
company to grow this business.
The Company has started offering building solutions to its customers,
which will help the customers use our products more efficiently and
utilize the full value of these products.
Production and Sales, in quantity terms, of AAC Blocks have increased
by 42% and 63% respectively over the previous year largely contributed
by our newly commissioned Gujarat facility.
Thermal Insulation
During 2010-11, the Thermal Insulation product, which faced capacity
constraints also suffered due to surge in imports from China. The
augmented capacity, improvements in efficiency and costs will help in
recovery of this product segment in 2011-12.
Production and Sales, in quantity terms, of Thermal Insulation products
have decreased by 20% and 21% respectively over the previous year on
account of the reasons cited above.
NEW PROJECTS
During the year under review the Company started commercial production
of its AAC Blocks manufacturing unit at Golan, near Surat, Gujarat in
July 2010. This unit will help the company to cater to the growing
market for AAC Blocks in the western part of the country, as the demand
for this product is expanding due to its inherent advantages of being
environment friendly, light weight, good compressive strength and
providing better heat insulation.
Wind Power :- The Company has forayed into renewable energy sector in
the year under review, in line with the Companys mission of pursuing
green businesses. HIL took the initial step by setting up a 3.60 MW
(2x1.80MW) Wind Power Project in Vandhiya Village, Kutch Dist, Gujarat.
The two Wind Turbines have been commissioned in March and April 2011,
respectively. A part of the energy generated from the project shall be
used for captive consumption at our AAC Blocks manufacturing unit at
Golan, Gujarat and the surplus energy generated shall be sold to
Gujarat Electricity Board.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(IV) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. Shreegopal Daga and Mr.
Yash Paul, Directors of the Company will retire by rotation at the
ensuing Annual General Meeting and, being eligible, will be offering
themselves for re-appointment.
For Directors seeking re-appointment in the forthcoming Annual General
Meeting of the Company; the particulars as required to be disclosed in
accordance with Clause 49 (Corporate Governance) of Listing Agreement,
forms part of Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Directors Responsibility Statement as required under the provisions of
Section 217 (2AA) of the Companies Act, 1956, is given in the Annexure
(I) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
The Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance with ethical corporate practices. As per the
requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2010-11 and a
Certificate from the Auditors of the Company are furnished as part of
this Annual Report.
The Ministry of Corporate Affairs has issued Corporate Governance
Guidelines in December, 2009. While these Guidelines are recommendatory
in nature, the Company has already adopted most of the Guidelines. The
Company will be reviewing its Corporate Governance Practices in the
context of other recommendations under the said Guidelines for
appropriate adoption.
HUMAN RESOURCES DEVELOPMENT
The Companys growth and profitability plans can be achieved only
through a competent and motivated team of employees. Various
initiatives towards having high quality talent, retaining talent and
training have been put in place.
A separate cell PACE (Performance And Career Enhancement) has been
established to design talent development plans that ensures attracting
and retaining the talent and prepare them for taking up critical
positions in the future.
We have rolled out the YUVA (Young Unique Vibrant Achievers) programme
under which high calibre young talent is hired from top ranking
institutes to create a pipeline of talent within the company.
The Industrial Relations at all plants of HIL continue to be cordial,
except for the disturbance in our Dharuhera Plant for a period of four
weeks.
AUDITORS
The Statutory Auditors of the Company, M/s. S.R.Batliboi & Associates.,
who retire at the conclusion of ensuing Annual General Meeting, being
eligible, offer themselves for re-appointment.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are given in the Annexure (ii) attached hereto and forms part of
this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other required particulars of the employees are
set out in Annexure (III) attached hereto and forms part of this
Report.
Annexure (I): Directors Responsibility Statement
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956 and on the basis of compliance certificate received from the
executives of the Company and subject to disclosures in the Annual
Accounts, as also on the basis of the discussion with the Statutory
Auditors of the Company from time to time, and to the best of their
knowledge and information furnished, the Board of Directors states:
i) That in preparation of the Annual Accounts for the year ended 31st
March, 2011; all the applicable Accounting Standards prescribed by the
Institute of Chartered Accountants of India have been followed along
with proper explanation relating to material departures, if any.
ii) That the Directors have adopted such accounting policies, as
selected in consultation with Statutory Auditors, 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 the financial year ended 31st March, 2011.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Annual Accounts for the year ended 31st March, 2011, has
been prepared on a going concern basis.
ACKNOWLEDGEMENTS
The Board of Directors places on record their appreciation for the
co-operation and support extended by all stakeholders in the Company
including the Shareholders, Bankers, Suppliers and other Business
Associates.
The Directors also wish to place on record their appreciation of all
the employees for their commitment and contribution towards achieving
the goals of the Company.
On behalf of the Board of Directors
C.K. BIRLA
Chairman
New Delhi, 27th April, 2011
Mar 31, 2010
The Directors have pleasure in presenting their Report and the Audited
Accounts of the Company for the year ended 31st March 2010.
FINANCIAL RESULTS Rs. in lacs
2009-2010 2008-2009
Profit before Interest,
Depreciation, Exceptional
Items and Taxation 15772.12 9393.46
Less:Interest 625.14 941.90
Depreciation 1554.71 1398.30
Profit before Exceptional
Items & Taxation 13592.27 7053.26
Exceptional Items 18.37 110.62
Profit after Exceptional Items 13573.90 6942.64
Taxes (4602.08) (2533.81)
Profit after Tax 8971.82 4408.83
Balance as per last year 5181.10 2145.36
AVAILABLE FOR APPROPRIATION 14152.92 6554.19
APPROPRIATION
General Reserve 8493.30 500.00
Interim Dividend on Equity Shares 447.75 -
Proposed Final Dividend on
Equity Shares 746.26 746.26
Corporate Dividend Tax 202.93 126.83
Balance carried to Balance Sheet 4262.68 5181.10
DIVIDEND
During the year the Board has declared an Interim Dividend of Rs. 6/-
per equity share (60% of the paid-up capital). Your directors are now
pleased to recommend a final dividend of Rs. 10/- per equity share
(100% of the paid-up capital) for your consideration and approval at
the ensuing Annual General Meeting of the Company.
With the proposed final dividend, the total dividend for the year
2009-10 would be Rs 16/- per share (160% of the paid-up equity
capital).
The total dividend outgo would be Rs 1396.94 lacs (including dividend
distribution tax) as against Rs. 873.09 lacs - (100% of the paid-up
equity capital) for the year 2008-09.
HOMAGE TO LATE SHRI G. P. BIRLA
We, on behalf of all our stakeholders, wish to place on record our
profound sorrow and grief on the sad demise of Shri G.P. Birla on 5th
March 2010.
He was a doyen in the industrial world and established a large number
of industries in various sectors in India and abroad like automobile,
paper, cement, electrical, building products and precision engineering
products. He was a noble hearted soul and a great philanthropist and
established several large foundations, hospitals and institutions for
charitable and educational purposes.
He was awarded "Padma Bhushan" in the year 2006 by the Government of
India for his outstanding services to the nation. In his death, the
country has lost a great industrialist and a philanthropist.
OVERALL ECONOMY
The year 2009-10 started in a subdued note after the global economy
witnessed financial crisis and hefty bailout schemes. However with
all-round efforts by the Government of India to face challenge posed by
the Global Economy, the Indian Economy sailed through difficult times
and responded swiftly. The effectiveness of the policy measures became
evident as the year ended on a positive note with a GDP growth of
around 7.2% in 2009-10. While most of the sectors have performed
reasonably well in the last year, the rural and semi-urban areas
contributed significantly to our growth on account of improvement in
their net household income, which enabled the Company to perform
better.
PERFORMANCE
The year 2009-10 proved to be an another successful year in the history
of the Company in all metrics, resulting in higher sales revenues and
profits. The Company achieved a growth rate of 14% with overall Gross
Turnover of Rs. 756 crores during the year under review. The growth in
turnover is mainly attributed to better marketing efforts and the
favourable market conditions, both for sheeting and green building
products. The Operating Profit margin (PBIDT) improved from 15% to 22%
during the year, as a result of all round efforts by the team HIL.
Production and Sales, in quantity terms, of Fibre Cement Sheets have
increased by 15% and 5% respectively over the previous year. During the
year under review the industry growth of the Fibre Cement Sheets was
estimated to be around 6% over the previous year. Due to volatility in
the markets and rising price trends the input costs had gone up during
the year. However on account of various cost saving measures, improved
quality and better realisation, the Fibre Cement Sheet Business
reported a significant improvement in profitability during the year.
Our brand "Charminar" established over six decades as a superior brand
based on quality, strength and durability, continues to enjoy premium
brand equity in the market. The Fibre Cement Sheet Industry is
estimated to grow at about 8% in financial year 2010-11 on account of
increased income in rural areas coupled with various initiative by
Government by way of low-cost/affordable housing scheme for the
betterment of the rural population. With the additional capacities
established and planned further during the year, your Company is
confident of maintaining its market leadership.
With the special focus given to the Companys GREEN BUILDING PRODUCTS
DIVISION during the earlier year, the Company could garner the
attention of the new generation builders/consumers of the products
across India. The market growth for Aerocon Panels has improved
considerably during the year. Thermal Insulation segment also reported
a reasonable growth during the year. However the AAC Blocks division,
on account of increased competition and aggressive pricing by the
competitors as well as slackness in the construction industry for the
major part of the year, witnessed a decline in revenues. With more
focus towards environment protection and sustainability across all
Industries and your company being a pioneer in promoting Green Building
Products, coupled with various other inherent advantages of the
products, the Company is confident to attract a larger customer base
going forward. To face the competition in marketing and staying ahead
with the curve, the Green Products Division substantially increased its
sales team and embarked on new marketing strategies for its various
products and is also working with different verticals in the market to
increase the awareness of the products and grow the revenue.
The production in quantity terms of Aerocon Panels has increased by 40%
and the sales have increased 22% respectively over the previous year.
Production and Sales, in quantity terms, of AAC Blocks have decreased
by 10% and 17% respectively over the previous year.
Production and Sales, in quantity terms, of Thermal Insulation products
have increased by 16% and 13% respectively over the previous year.
NEW PROJECTS
As part of our market share retention strategy, the Company is
constantly exploring the option of enhancing the capacity at its
existing location and also to set up new plants in new strategic
locations to keep pace with the growing demand for our products.
During the year under review the Company has started commercial
production of its second Line at Kondapally village near Vijayawada,
AP. Setting up of a new unit at Golan, near Surat, Gujarat for
manufacture of AAC Blocks was completed in a record time of 14 months
and trial production was started in March 2010. After satisfactory
completion of trial runs, we expect the plant to start its commercial
production during mid of May 2010. This will help the company to cater
to the growing market for AAC Blocks in the western part of the
country, as the demand for this product is expanding due to its
inherent advantages of light weight, good compressive strength heat and
sound insulation and faster rate of construction.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A Report on Management Discussion & Analysis is appended as Annexure
(IV) to this report as per the requirements of Listing Agreement with
the Stock Exchange(s).
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and the
Articles of Association of the Company, Mr. P. Vaman Rao and Mr.
Krishnagopal Maheshwari, Directors of the Company will retire by
rotation at the ensuing Annual General Meeting and, being eligible,
will be offering themselves for re-appointment.
For Directors seeking re-appointment in the forthcoming Annual General
Meeting of the Company; the particulars as required to be disclosed in
accordance with Clause 49 (Corporate Governance) of Listing Agreement,
forms part of Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Directors Responsibility Statement as required under the provisions of
Section 217 (2AA) of the Companies Act, 1956 is given in the Annexure
(I) attached hereto and forms part of this Report.
CORPORATE GOVERNANCE
The Company has been making every effort to improve governance and
transparency in the conduct of business. Your Company is committed to
good Corporate Governance with ethical corporate practices. As per the
requirements of Listing Agreement with the Stock Exchanges, a
Compliance Report on Corporate Governance for the year 2009-10 and a
Certificate from the Auditors of the Company are furnished as part of
this Annual Report.
HUMAN RESOURCE DEVELOPMENT
The various efforts and initiatives being taken by the Company to grow
the top line and improve operational efficiencies will be possible with
a highly motivated and a competent team. The Company is continually
striving towards these objectives. The Industrial Relations at all
plants of the Company continued to be cordial. As an important part of
HR initiatives, continued focus is being given on training and
development of people in the Company and in creating an environment of
learning.
AUDITORS
The present Auditors of the Company, M/s. S.R. Batliboi & Co.,
Chartered Accountants, have expressed their unwillingness to be
re-appointed as Auditors of the Company on their retirement at the
forthcoming Annual General Meeting. The Board records its appreciation
for the assistance and guidance provided by them during their long
tenure with the Company. The Board recommends the appointment of M/s.
S.R. Batliboi & Associates, Chartered Accountants as Auditors of the
Company.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars with respect to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and
Outgo as required under Section 217(1)(e) of the Companies Act, 1956,
read with the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988 are given in the Annexure (II) attached
hereto and forms part of this Report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other required particulars of the employees are
set out in Annexure (III) attached hereto and forms part of this
Report.
TOTAL PRODUCTIVE MAINTENANCE (TPM)
The Company has adopted Total Productive Maintenance (TPM) practices in
four of its plants during the year under the guidance of Confederation
of Indian Industry. The said practices are continuously followed in the
respective areas during the year under review also which has helped the
Company to improve operational efficiencies and better utilization of
the available resources. Company has plans to implement TPM across all
the units in the forthcoming year. Your Directors are confident that
the continued practice of the said methodology will help the Company to
improve productivity, ensure quality, reduce costs and improve
profitability in the coming years.
ACKNOWLEDGEMENTS
Your Directors wish to thank all the Shareholders, the Companys
Customers, Business Associates, Trade Partners, Bankers and Suppliers
for the continuous support and cooperation extended by them.
The Directors also wish to place on record their appreciation of all
the employees for their commitment and contribution towards achieving
the goals of the Company.
On behalf of the Board of Directors
C.K. BIRLA
New Delhi, 5th May, 2010 Chairman
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