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Himachal Fibres Ltd.

BSE: 514010 | NSE: | Series: NA | ISIN: INE723D01021 | SECTOR: Textiles - Spinning - Cotton Blended

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Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Director’s Report

TO

THE MEMBERS OF,

HIMACHAL FIBRES LIMITED.

The Directors have pleasure in presenting the 35th Annual Report together with the Audited Statement of Accounts of Himachal Fibres Limited (HFL) for the year ended 31st March, 2016.

1. FINANCIAL HIGHLIGHTS.

The summary of the financial performance of the Company for the financial year ended March 31, 2016 compared to the previous year ended March 31, 2015 is given below:

(in Lacs)

Particulars

Year Ended

Year Ended

March 31,2016

March 31,2015

Revenue from Operations and Other Income (Total Revenues)

4764.60

8471.59

Gross profit before interest and depreciation

542.45

671.52

Finance cost

301.36

458.94

Profit before depreciation and amortization (Cash Profit)

241.09

214.33

Depreciation and Amortization

220.21

210.09

PBT before exceptional items

20.87

4.24

Exceptional items

0.00

0.00

Profit before Tax (PBT)

20.87

4.24

Provision for Tax -Current

3.30

0.81

Provision for Tax - Deferred

0.61

127.44

Profit after Tax

16.96

(124.01)

Earnings per Share (EPS) (in Rs) (after exceptional item )

- Basic

0.02

(0.14)

- Diluted

0.02

(0.14)

2. STATE OF COMPANY''S AFFAIRS :

Total Revenue from operation for the year is Rs. 4754.73 Lakhs as compared to Rs. 8465.05 Lakhs of previous year. The Net Profit for the year ended 31.03.2016 is Rs. 16.96 Lakhs as compare to Net Loss of Rs. (124.01) Lakhs for the previous year.

3. DIVIDEND

In order to accumulate funds for future projects, your directors do not recommend any dividend for the year under review.

4. TRANSFER TO RESERVE

The company has not transferred any amount to any reserve during the year under review.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there were no unpaid/unclaimed Dividend and other amounts, as prescribed under Section 205A & 205C of Companies Act, 1956 lying with the company, therefore, the provisions of above mentioned sections do not apply to the company.

6. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.

No Material changes and commitments affecting the financial position of the company have occurred between the end of the financial year and the date on which this report has been signed.

7. CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the company during the year under review.

8. SHARE CAPITAL

During the year under review the, there was no change in the paid-up share capital of the company.

8.1 Buy Back Of Securities

The Company has not bought back any of its securities during the year under review.

8.2 Sweat Equity

The Company has not issued any Sweat Equity Shares during the year under review.

8.3 Bonus Shares

No Bonus Shares were issued during the year under review.

8.4 Employees Stock Option Plan

The Company has not provided any Stock Option Scheme to the employees.

9. FINANCE

9.1 Cash And Cash Equivalent

Cash and Cash equivalent as at 31st March, 2016 is Rs. 120.12 lakhs. The Company continues to focus on judicious management of working capital. Working Capital parameters are kept under strict check through continuous monitoring.

9.2 Deposits/ Fixed Deposits

During the year, Company has not accepted deposit from the public falling within the ambit of Section 73 of Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Further, the Company has not repaid any deposits to the public during the year and no deposits are remained unpaid / unclaimed as on 31st March, 2016.

9.3 Particulars Of Loans, Guarantees Or Investments

Detail of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes of Financial Statements.

10. HUMAN RESOURCES

HFL is committed to hiring, developing and retaining the best minds in the industry. The Company has key internal processes and initiatives that support this vision. The Company has developed a strong employee value proposition that focuses on key pillars of challenging work that matters, hiring and retaining the right people, sustained focus on talent and leadership development, differentiated rewards to drive exceptional performance and community engagement.

Talent management is a shared responsibility between business leaders and the Human Resources function at HFL, enabling a strong focus on succession planning for key roles and actively promoting internal move to drive career growth. Talent management is supported by a strong learning architecture that enables leadership and functional development. This is supported by a Positive Employee Relations (PER) strategy that aims to build an engaged and motivated workforce.

11. BOARD

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage.

There has been no change in the board of directors as on 31/03/2016. Mr. Gian Chand Thakur retires by rotation at his AGM and being eligible offer himself for reappointment.

12. BOARD MEETINGS

Six meetings of the Board of Directors were held during the year. Details about the meetings are available in the Report on Corporate Governance, which forms a part of this Report.

13. COMMITTEES OF BOARD

The details regarding Committees of the Board of Directors of the Company are given in the Report on Corporate Governance, which forms a part of this Report.

14. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of Independence laid down in and Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

15. REMUNERATION POLICY AND BOARD EVALUATION

Company has Nomination and Remuneration policy in place pursuant to Companies Act, 2013 and SEBI (LODR) Regulation, 2015. Independent directors in their meeting held on 30/03/2016, evaluated the performance of the non independent director of the board including Managing Director. The minutes of the meeting were placed before the board and board affirmed the same. The Board has carried out an annual evaluation of its own performance, performance of its Committees as well as the directors individually.

The details regarding process and criteria for evaluation are given in the Report on Corporate Governance, which forms a part of this Report.

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Companies Act, 2013 and SEBI(LODR) Regulation, 2015 is enclosed herewith as ''Annexure - 6''.

16. CODE OF CONDUCT COMPLIANCE:

The declaration signed by the Managing Director affirming compliance with the Code of Conduct by Directors and Senior Management, for the financial year ended March 31, 2016 is given in Report on Corporate Governance, which forms a part of this Report.

17. CORPORATE SOCIAL RESPONSIBILITY

Even though the provisions of Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the company yet the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.

18. TRAINING OF INDEPENDENT DIRECTORS.

Every new independent director of the Board attends an orientation program. To familiarize the new inductees with the strategy, operations and functions of our Company, the executive directors / senior managerial personnel make presentations to the inductees about the Company''s strategy, operations, product, markets, organization structure, finance, human resources, technology, quality, facilities and risk management.

19. DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement: —

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis; and

e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. AUDITORS

20.1 Statutory Auditors

M/s Sumat Gupta & Co. ( FRN : 010288N) , Chartered Accountants, were appointed as Statutory Auditors for a period of three years in the Annual General Meeting held on 30.09.2014. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

20.2 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Rajeev Bhambri & Associates (CP No.: 9491, FCS: 4327),Company Secretaries to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as ''Annexure - 1''.

20.3 Internal Auditors

Mr. Shekhar Bansal performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

20.4 Cost Auditor

The Cost Audit was not applicable on the Company during the Financial year 2014-15 as per Companies (Cost record & audit) Rules, 2014 dated 30.06.2014. Further as per amendment in the above said rules vide notification dated 31.12.2014, M/s J. Verma & Associates, cost Accountants, Jalandhar was appointed to conduct the Cost Audit of the Company for the Financial Year 2015-16.

20.5 Explanation on qualification/ reservation/ adverse remarks in the Auditors'' Report

The Auditors'' Report on the Accounts of the Company and Secretarial Auditors'' Report on Secretarial Records of the company for the period under review is self - explanatory and contain no qualification/ reservation/ adverse remarks, therefore, requires no comments.

21. INTERNAL FINANCIAL CONTROLS

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

22. LISTING OF SECURITIES

The Securities of the Company are listed on Bombay Stock Exchange Limited. The Company has paid annual listing fee to exchanges for the year 2016-17.

23. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.

24. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as ''Annexure- 2''

25. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The company has set up vigil mechanism viz. Whistle Blower Policy to enable the employees and directors to report genuine concerns, unethical behavior and irregularities, if any, in the company noticed by them which could adversely affect company''s operations. The same is reviewed by the Audit Committee from time to time. No concerns or irregularities have been reported till date. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company.

26. RISK MANAGEMENT POLICY

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company''s management systems, organizational structures, processes and behaviors together form the Risk Management Policy that governs how the company conducts its business and manages associated risks.

27. SUBSIDIARIES,JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company. There were no companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year under review.

28. RELATED PARTY TRANSACTIONS/ PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES.

All transactions entered into with Related Parties, as defined under the Companies Act, 2013 and Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the financial year, were in the ordinary course of business and were on arm''s length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were few materially significant transactions with related parties during the financial year for which shareholders approval was sought during the year by way of Postal Ballot (Results declared on 17/06/2015). Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The report of the Board in respect of the particular of contracts or arrangements with related parties referred to sub section (1) of Section 188 in form AOC-2 is annexed to this report in ''Annexure- 3''.

29. MANAGEMENT DISCUSSION & ANALYSIS/CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis Report and Corporate Governance Report pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed herewith and form part of the Directors Report.

30. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL), ACT, 2013

The Company has in place a prevention of sexual Harassment policy in line with the requirements of the sexual Harassment of Women at the Workplace (prevention, prohibition and Redressal) Act, 2013. During the year 2015-16, no complaint were received by the Company related to sexual Harassment.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure- 4

32. PARTICULARS OF EMPLOYEES

The information required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to the Board’s report as per ''Annexure- 5''.

33. APPRECIATION AND ACKNOWLEDGEMENTS

The company has been very well supported from all quarters and therefore your directors wish to place on record their sincere appreciation for the support and co-operation received from Employees, Dealers, Suppliers, Central and State Governments, Bankers and others associated with the Company. Your Directors wish to thank the banks, financial institutions, shareholders and business associates for their continued support and cooperation. We look forward to receiving the continued patronage from all quarters to become a better and stronger company.

34. CAUTIONARY STATEMENT

The statements contained in the Board''s Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations.

Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results.

FOR AND ON BEHALF OF THE BOARD

-sd-

Place: Ludhiana (SUSHIL KUMAR SINGLA)

Dated: 2nd September, 2016 CHAIRMAN DIN:00126157

Director’s Report