As on: Oct 02, 2023 03:10 AM
To,
The Members,
Hemang Resources Limited
CIN: L65922TN1993PLC101885
Flat A2, Harington Court, 99, Harington Road, Chetpet, Chennai, Tamil Nadu - 600031
The Board of Directors hereby presents its Director's Report on business & operations of
Hemang Resources Limited ("the Company") along with Audited Financial Statements for the financial year ended 31stMarch, 2023.
FINANCIAL RESULTS
The Company's Financial Performance for the year ended 31st March, 2023 is summarized below:
(Rs. in Lakhs)
PERFORMANCE REVIEW
In the Financial Year 2022-23, your Company has posted Turnover of Rs. 20617.59 Lakhs as compared to the turnover of Rs. 7868.48 Lakhs in previous financial year and the profit earned for the financial year under review was Rs. 738.45 Lakhs as compared to profit of Rs. 1952.10 Lakhs in previous financial year.
Your Directors are delightful to inform you that during the year under review there is an increase by 162.03% in the revenue of the Company as compared to the previous year.
During the year under review there is a decrease in profit by 62.17 % because current year's profit is more from coal trading business and previous year profit was more from real estate business. Moreover there is less profit margin in coal trading business as compared to real estate business, which resulted in decrease in profit in current year.
Turnover increased by 162.03 % to Rs. 20617.59 Lakhs. PBT decreased 61 % by 61 % to Rs. 1097.04 Lakhs. Net Profit decreased by 62 % to Rs. 738.45 Lakhs.
MATERIAL CHANGES AND COMMITMENT
There has been no change in the nature of business of the Company during the Financial Year ended March 31, 2023.
SHARE CAPITAL
As on March 31, 2023, the Authorized Share Capital of the Company is Rs. 2300.00 Lakhs bifurcated into Rs. 1500.00 Lakhs as Equity Share Capital and Rs. 800.00 Lakhs as Preference Share Capital and Paid-up Share Capital is Rs. 2120.00 Lakhs bifurcated into Rs.1320.00 Lakhs as Equity Share Capital and Rs. 800.00 Lakhs as Preference Share Capital.
During the year under review, there is no change in subscribed and paid-up capital of the Company.
The redemption period of 2 % Cumulative Preference Shares has been extended upto 6th May, 2024 with the written consent of all preference shareholders.
RESERVES
During the year, no amount was transferred to Capital Redemption Reserve and General Reserve.
DIVIDEND
With a view to plough back the profit of the Company for future expansion/requirement your directors do not recommend dividend to Equity and Preference Shareholders for the financial year ended 31st March 2023.
DEPOSITS
The Company has not accepted any deposit within the meaning of the provisions of Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 in the financial year ended March 31, 2023.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review forms part of the
Annual Report.
CREDIT RATING
Your Board states that previously Company was in financial stress and because of the same its Accounts got NPA and since then the credit rating assigned by ICRA Limited as on 31st March,
2021 was "D" rating for the Long term Loan and "D" for short term Non- Fund based limits.
However your Directors would like to inform you that as on date, Company has also settled One Time Settlement with BOI which indicates positive outlook and which in turn will lead to restoration of fair credit reliability and Company has taken a working Capital Term Loan for Rs. 25 Cr. for the smooth business operations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review there is no change in the Directors/KMPs of the Company.
Independent Director
In terms of Section 149 of the Act and the SEBI Listing Regulations, Mr. Nikhil Dhanotiya (DIN: 09220437) and Ms. Shikha Jain (DIN: 08087342) are the Independent Directors of the
Company. All Independent Directors of the Company have given declarations under Section 149(7) of the Act, that they meet the criteria of Independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
Key Managerial Personnel
In terms of Section 203 of the Act, the Key Managerial Personnel (KMPs) of the Company during FY 2022-2023 are:
MEETINGS OF THE BOARD
There were Five meetings of the Board of Directors held during the financial year under review. For more details, please refer to the Corporate Governance Report, which forms part of this Annual Report.
COMMITTEES OF THE BOARD
The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority.
The Board of directors of the Company has the following Committees in Compliance with the provisions of the Companies Act, 2013 and the SEBI, Listing Regulations:
i. Audit Committee ii. Nomination and Remuneration Committee iii. Stakeholder Relationship Committee, and iv. Corporate Social Responsibility Committee*
Provision of Section 135 became applicable w.e.f., 01/04/2023 hence the Corporate Social Responsibility Committee has been constituted w.e.f., 27.05.2022.
Details of the composition, terms of reference and number of meetings held for respective committees are given in the Corporate Governance Report, which forms a part of this Report. Further, during the year under review, all recommendations made by the Audit Committee have been accepted by the Board.
All Committees of the Board of Directors were reconstituted, wherever needed during the financial year under review, in line with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 and the same has been disclosed in the Corporate Governance Report submitted with the Stock Exchange under regulation 27 of the Listing Regulations.
FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF BOARD, ITS COMMITTEES AND DIRECTORS
The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provision of the Act and the SEBI Listing Regulations.
The Board evaluated its performance after seeking inputs from all the directors on the basis of criteria such as the Board composition and structure, effectiveness of board process, information and functioning, etc. The performance of the Committee was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings etc. The above criteria are in compliance as provided in the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.
The manner in which the evaluation has been carried out has been explained also in the Corporate Governance Report attached as Annexure to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, secretarial auditor including internal financial controls our financial reporting by the Statutory Auditors and the reviews performed by the management and the relevant Board Committee, the Board is of the opinion that the Company's internal financial control were adequate and effective during the FY 2022-23.
Accordingly, pursuant to the provisions of Section 134(5) of the Act, the Board, to the best of their knowledge and ability, confirm that:
a) in the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards (Ind-AS) had been followed along with proper explanation relating to material departures;
b) appropriate accounting policies have been selected 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 as at March 31, 2023 and of the Profit of the Company for the year ended on that date; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis.
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.
RISK MANAGEMENT
The Company has set up a risk management mechanism to identify and assess the potential risks and determine the processes to mitigate the same. The Board periodically reviews and assesses the key risks in consultation with the functional managers. Detailed exercise has been carried out by the Board to identify, evaluate, manage and monitor the potential risks to the operations of the Company. The Board periodically reviews the risks and suggests steps to be taken to mitigate the same.
The Risk Management Policy can be accessed on the Company's website at: Link http://www.bhatiacoalindia.com/BIIL/InvRelation.htm
POLICY ON NOMINATION AND REMUNERATION OF DIRECTORS, KMP AND OTHER EMPLOYEES
In terms of section 178(3) of the Companies Act, 2013 and Regulation 19(4) read with part D of the Schedule II of the Listing regulations, the Nomination and Remuneration Committee of the Company has laid down a policy on selection and appointment of the directors and the senior management of the Company and their remuneration including criteria for determining qualification, positive attributes independence of directors and other matters.
The policy is available on the Company's website at
Link http://www.bhatiacoalindia.com/BIIL/InvRelation.htm
STATUTORY AUDITORS
M/s. A V Ratnam & Co., Chartered Accountants, (FRN: 003028S) has resigned as Statutory Auditor of the Company w.e.f., 27th October, 2022 and M/s. A. John Moris & Co., Chartered Accountants, Chennai (FRN: 007220S) has been appointed as Statutory Auditor of the
Company w.e.f., 5th November, 2022 by the Board, subject to approval of Shareholders of the Company to fill the causal vacancy caused due to resignation of M/s. A V Ratnam & Co., (FRN: 003028S).
M/s. A. John Moris & Co., Chartered Accountants, Chennai (FRN: 007220S) has been proposed to be appointed as Statutory Auditor of the Company to hold office from the conclusion of 30th (Thirtyth) Annual General Meeting till the conclusion of Thirty Fifth (35th) Annual General Meeting of the Company. Pursuant to Section 141 of the Act, the Auditors have represented that they are not disqualified and continue to be eligible to act as the Auditor of the Company. The Report of the Statutory Auditor forming part of the Annual Report does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditor's Report are self-explanatory and therefore do not call for further comments. Further The Auditor of the Company has not reported any fraud as specified under the second proviso to Section 143(12) of the Act.
PRESENTATION OF FINANCIAL STATMENTS
The Company has adopted Ind AS from April 01, 2017 and these financial statements are company's Ind AS Financial Statements. The 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 and other relevant provisions of the Act.
INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY
The Board has policies and procedure for governance of orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding its assets, prevention and detection of fraud and error, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The Company's internal control system commensurate with the nature of its business, the size and complexity of its operation.
The Company has effective internal control systems as per the requirements and has laid down operating guidelines and processes which ensure smooth functioning of activities The processes and policies are constantly assessed and reviewed.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 and Section 134 The Ministry of Corporate Affairs (MCA) has notified the Companies (Management and Administration) Amendment Rules, 2020, wherein the companies are no longer required to attach extracts of Annual Return.
In compliance of the above amendment the Annual Return as on March 31, 2023 in form MGT-7 is available on the website of the Company at http://bhatiacoalindia.com/BIIL/Index.htm
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 and Regulation 22 of SEBI (LODR) Regulations, 2015, a Whistleblower Policy and Vigil Mechanism is in existence for directors, employees and stakeholders to report to the management instance of unethical behavior, actual or suspected, fraud or violation of the Company's Code of Conduct or ethics policy. The Vigil
Mechanism provides a mechanism for employees of the Company to approach the Chairman of Audit Committee of the Company for redressal. It is affirmed that no personnel of the Company have been denied access to the Audit Committee. The policy of Vigil mechanism is available on the Company's website at Link http://www.bhatiacoalindia.com/BIIL/InvRelation.htm
CODE OF CONDUCT
The Board has laid down a code of conduct for Board members & Senior Management Personnel as per Regulation 17 & 26 (3) of the Listing Regulations& has been posted on the website of the Company Link https://www.bhatiacoalindia.com/BIIL/Document/VigilMechanism.pdf
All the Board members & Senior Management Personnel have affirmed compliance with the said code of conduct for the year ended 31st March, 2023. A declaration to this effect, signed by the Whole-Time Director forms part of this Annual Report.
INSIDER TRADING
The Board has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.The Insider trading Policy of the Company covering code of practices and procedures for fair disclosure of Unpublished Price Sensitive Information and Code of Conduct for the prevention of Insider Trading has been posted on the website of the Company. Link https://www.bhatiacoalindia.com/BIIL/Document/Insid_Trading_code.pdf
All the Board members & KMPs have affirmed compliance with the said code of conduct for the year ended 31st March, 2023.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of Companies Act, 2013 and the rules made there-under, the Board of Director appointed M/s. Ajit Jain & Co., Company Secretary in practice (Membership No.: 3933), to undertake the Secretarial Audit of the Company for the financial year ended March 31, 2023. The Secretarial Audit Report for the year 2022-2023 in Form No. MR-3 is annexed to this Report as Annexure A.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Annual Secretarial Compliance Report as required under Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended is also annexed as Annexure A1 and forms part of this report.
SECRETARIAL STANDARDS OF ICSI
During the financial year, the Company has complied with the Secretarial Standards; on the Meeting of the Board of Directors (SS-1), on General Meetings (SS-2) and on Dividend (SS-3), for the time being in force and as amended from time to time.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE, POLICY AND EXPENDITURE
During the year under review the provisions of section 135 pertaining to Corporate Social Responsibility (CSR) has become applicable on the Company on the basis of the net profit of immediately preceding Financial Year (2021-22).
In terms of Section 135 of the Companies Act, 2013 and rules thereunder Company is required to form a Corporate Social Responsibility (CSR) Policy on the basis of which the yearly CSR expenditure will be done. For the said purpose Board constituted a CSR committee in the Board meeting dated 27.05.2022.
Corporate Social Responsibility (CSR) Policy was adopted by the company on 09.08.2022.
The Profit/Loss data for the immediately preceding three years as required for calculating expenses under Section 135 of the Companies Act, 2013 were placed before the Committee:
CSR Committee and Board members after considering last three years performance of the Company and the Average Aggregate Profit of Rs. 3,22,24,589/- and due to profit, approved to incur 2% of the average aggregate profit of last three financial years on CSR activities i.e., Rs. 6,44,492/-
Pursuant to the provisions of Section 135 (5) of the Companies Act, 2013 and rules made thereunder as may be amended from time to time, Company will be spending the aforesaid CSR amount within the stipulated period. Annual Report on CSR Activities has been annexed herewith as Annexure- B
PARTICULAR OF EMPLOYEES
Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act, and the Rules framed there under is annexed as Annexure-C to the Board Report.
SUBSIDIARY, ASSOCIATE & JOINT VENTURE
The Company does not have any subsidiary, associate or Joint Venture Company and no company has become or ceased to be its subsidiaries, joint venture or associates companies during the year under review.
RELATED PARTY TRANSACTIONS AND POLICY
The Company's Board approved Related Party Transactions Policy has been hosted on the website of the Company at http://www.bhatiacoalindia.com/BIIL/InvRelation.htm.
There was no related party transaction (RPTs) entered into by the Company during the financial year which attracted the provisions of Section 188 of the Companies Act, 2013. There were no ‘material' related party transactions undertaken by the Company during the year that require shareholder's approval under regulation 23(4) of SEBI (Listing Obligation and
Disclosure Requirement) Regulations, 2015.
The Company does not have any related party transaction, except payment of remuneration to KMP to report pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rule, 2014 in Form AOC-2, the same is not provided. Suitable disclosures as required under Ind AS-24 have been made in Note 2.3 of the Notes to the financial statements.
SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURT
There are no significant and material orders passed by the Regulators/Courts/Statutory Authorities that would impact the going concern status of the Company and its future operations. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the Financial Statement.
PARTICULARS OF LOAN GIVEN, INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED UNDER SECTION 186
During the year under review, company has not made any investment, nor given any guarantee, nor provided any security u/s 186. However, Information regarding loans, guarantee and investment covered under the provisions of Section 186 of the Companies Act, 2013 are detailed separately in the Financial Statements of the Company read with the notes to Accounts.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review as stipulated in regulation 34 read with Schedule V of the Listing Regulations is given as Annexure-C to this report which is taken as forming part of this report.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as, stipulated in Regulation 34 read along with Schedule V of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, giving information pertaining to the Board and its Committees form part of this report.
All Board members and Senior Management Personnel have affirmed compliance with the Code of Conduct for the financial year 2022-23. A declaration to this effect signed by the CEO is contained in this Annual Report.
The CEO and CFO have certified to the Board with regards to the financial statements and other matters as required under Regulation 17(8) of SEBI (LODR) Regulation, 2015 and the same is annexed and forming part of this report.
SYSTEM DRIVEN DISCLOSURES (SDD) Under SEBI (SAST) Regulations, 2011
Pursuant to the provisions of SEBI circular dated December 01, 2015, December 21, 2016, September 09, 2020, October 28, 2022, January 25, 2023 and March 16, 2023 with reference to Regulation 3(5) and 3(6) of SEBI (PIT) Regulations, 2015 which inter alia required (System Driven Disclosures) SDD to be maintained by the company.
In this regard, Company has installed SDD software dated 24th July, 2022 and is maintaining the same on regular basis as and when any such events occur as per the provisions of SEBI (PIT) Regulations, 2015
TRANSFER OF SHARES TO IEPF
During the year under review, no amount of unpaid Dividend and Shares has been transferred to IEPF, as Company has not declared any Dividend for the Financial Year 2014-2015 and onwards.
DEMATERIALISATION AND ELECTRONIC REGISTRAR
The equity shares of your Company are available for dematerialization with both NSDL and CDSL under ISIN INE930A01010. As on 31st March 2023, 98.50% equity shares were in demat form and remaining 1.50% equity shares were in physical form.
HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATION
Human Resource plays vital role in the Company. If finance is the blood of any organization then Human Resource is not less than pulse which keeps running production by their hard work day and night. Company focuses on creating best health and safety standards and also has performance management process to motivate people to give their best output and encourages innovation and meritocracy.
Personnel relation with all employees remained cordial and harmonious at all levels throughout the year. Directors wish to place on record their sincere appreciations for the continued, sincere and devoted services rendered by all the employees of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
As per the requirement of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 (‘Act') and Rules made thereunder, the Company has
Internal Complaints Committees (ICC) who inquire into complaints of sexual harassment and recommend appropriate action.
During the year under review, no compliant was received from any employee of the Company and hence no complaint was outstanding as on 31st March, 2023.
GENERAL DISCLOSURES
The Board states that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:
? Details relating to deposits covered under Chapter V of the Act.
? Issue of Sweat Equity Shares to employees of the Company under any scheme
? Details pertaining to Employee Stock Options (ESOPs) as no ESOPs were outstanding as on 31st March, 2023.
? Issue of differential shares with voting rights as to dividend, voting or otherwise
? No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future
? No fraud has been reported by the Auditors to the Audit Committee or the Board.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings & outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8(3) of Companies (Accounts) Rules, 2014 are given at Annexure-D hereto and forms part of this Report.
ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by employees for the services rendered by them.
For Hemang Resources Limited
Place: Chennai Date: 29.05.2023