58888:hanun | IND:Others - Not Mentioned | ISIN code:INE648H01013 | SECT:General
The Directors have pleasure in presenting the 24th Annual Report of the Company together with the standalone and consolidated audited statements of Financial Accounts of the year ended March 31, 2014.
The following table gives the financial highlights of your company on a standalone basis according to the Indian Generally Accepted accounting Principles (GAAP)
FINANCIAL RESULT (STANDALONE) (Rs. in Lacs)
Particulars 2013-14 2012-13
Net Sale & other Income 50054 180557
Profit Before Interest, Depreciation & Tax (36237) 31163
Financial Overheads 23062 16618
Depreciation 4480 6556
Net Profit/(Loss) Before Tax (63779) 7989
Provision for Tax
* Current - 1685
* Deferred (11963) (84)
Tax for earlier years (2237) (216)
Net Profit/(Loss) after Tax (49578) 6604
Proposed Dividends Nil 532
Provision for Tax for Dividends Nil 86
Surplus carried forwards to Balance Sheet (49578) 5986
Transfer to General Reserve 3500
Net Surplus carried forwards to Balance Sheet - 2486
FINANCIAL RESULTS (Consolidated)
The following table gives the financial highlights of your company on a consolidated basis according to the Indian Generally Accepted Accounting Principles (GAAP)
(Rs. in Lacs)
Particulars 2013-14 2012-13
Net Sale & other Income 50080 181480
Profit Before Interest, Depreciation & Tax (35326) 28826
Financial Overheads 23063 16619
Depreciation 4481 6558
Net Profit Before Tax (62870) 5649
Provision for Tax
* Current - 1685
* Deferred (11963) (84)
Tax for earlier years (2237) (217)
Net Profit after tax before Minority interest (48670) 4265
Minority interest in income/(loss) 4 4
Net Profit after Tax & Minority Interest (48666) 4269
Proposed Dividends - 532
Provision for Tax for dividends - 86
Surplus carried forwards to Balance Sheet 3651
Transfer to General Reserve 3500
Net Surplus carried forwards to Balance Sheet 151
RESULTS OF THE OPERATION
The Indian Toys and Textiles Industry witnessed challenging times as a results of low growth led by issues such as high fiscal deficit, high inflation and worsening current account balance. The slowdown in the global growth aggravated the sluggishness in the economy. Apart from the un-favorable demand supply scenario the industry has been also reeling under the pressure of rising input costs. The prices of key raw materials have soared.
The gross sales and other income for the financial year under review were Rs. 50054 lacs as against Rs. 180557 lacs for the previous financial year. During the Year under review the Company has incurred Losses after Tax of Rs. 49578 as against the Profit of Rs. 6604 lacs for the previous year.
The Profit after Tax decreased due to increase in Finance Cost of the Company during the year. The Company expects further to improve its working in next year after implementation of Corporate Debt Restructure mechanism.
The Board of Directors has decided not to recommend any dividend due to non availability by of profit during the year.
CORPORATE DEBT RESTRUCTURING
The Company had approached it''s lead banker and lender, i.e., Punjab National Bank for restructuring of its debt under CDR mechanism, and accordingly, the lead banker referred the matter to CDR Empowered Group on 31st July, 2013. The case of the Company was admitted under CDR on 26th September, 2013, and the CDR scheme was discussed in CDR EG meeting held on 21.04.2014, and was approved in the meeting held on 23rd May, 2014 and the same was informed to the Company. The Company awaits confirmatory communication of the aforesaid approval. The Company continues to reflect the charges executed in favour of its lenders as were prior to restructuring and has accounted the financial effect of debt restructuring in its books of account; the variances in balances of lenders, if any, as are known on execution of restructuring documentation will be accounted at the time of execution of modification of charges.
The main feature of CDR mechanism is as below:
1. Cut off date is 31st march 2013.
2. Moratorium period will be 2 years and repayment is 8 years.
3. Rate of interest on term loan is reduced to 11%.
4. Rate of interest on working capital and FITL (Funded interest Term Loan) is reduced to 10.50%.
5. Waiver of all liquidity damages and penal interest and penal charges etc.
6. Promoter''s contribution Rs.8368 Lacs to be brought in within one year.
7. Conversion of interest for initial 24 month into FITL (Funded interest Term Loan) with repayment period of 6 years.
The Company''s main operations consist of Manufacturing Toys and Home Furnishings.
By a general circular (No. 2/2011 dated February 8, 2011), the Ministry of Corporate Affairs, Government of India, under Section 212(8) of the Companies Act,1956, has permitted companies not to attach copies of the balance sheets and profit & loss Accounts, Directors'' Reports, Auditors'' Reports, and other documents of all their subsidiaries, to the Accounts of the Company. The company has acted accordingly.
However, Annual accounts of the subsidiary companies and the related detailed information are available at any time to shareholder of the parent company and subsidiary companies and to statutory authorities. On request, these documents will be made available for inspection at the company''s corporate office.
The Hanung (Shanghai) Limited and Cody Direct Corp, are subsidiary of the companies within meaning of Section 4 of Companies Act 1956.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis Report, highlighting the Performance and Prospects of the Company''s energy and environment segments including details if subsidiaries catering to the respective business, is attached.
Report on Corporate Governance as required under Clause-49 of the Listing Agreement with the Stock Exchanges, forms part of the Annual Report. A Certificate from the Auditors of the Company M/s Rohtas & Hans, Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause-49, forms part to the Annual Report.
LISTING OF STOCK EXCHANGES
The company''s equity shares are listed on two stock exchanges- National Stock Exchange of India Ltd (NSE), and Bombay Stock Exchange Ltd (BSE).
The Company had no unpaid / unclaimed deposit(s) as on March 31, 2013. It has not accepted any fixed deposits during the year.
The total numbers of permanents employees on the rolls of the company was 1350 as on March 31, 2014.
PARTICULARS UNDER SECTION 217 OF THE COMPANIES ACT, 1956
A statement of the particulars under Section 217(1) of the Companies Act, 1956 (the Act), read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is annexes and forms part of this Report.
There are Four Directors on the Board of Directors of the Company.
During the Year Mr. Sita Ram Goel and Col. S.K. Jain has resigned from the Board. The Board appreciated the services provided by Mr. Sita Ram Goel and Col. S.K. Jain.
Prior to coming into force of section 149 of the Companies Act 2013, two of the Company''s Directors, Mr. R.K. Pandey and Mr. C.S. Batra were categorized as independent directors in terms of the definition contained in the equity listing agreement.
The Provisions of Section 149(4) of the Companies Act, 2013 pertaining to the appointment of independent directors have been notified by the Ministry of Corporate affairs with effect from April 1,2014. Pursuant to the coming into force of Section 149 of the Companies Act 2013 from 1st April 2014, The Company has reassessed the status of its Directors with a view to determining their qualifying for classification as independent Directors in terms of Section 149(6) of the Companies Act 2013. Accordingly, R.K. Pandey and Mr. C.S. Batra fulfil the criteria laid out in section 149(6) of the Companies Act 2013 in this regard.
Section 149(10) of the Companies Act 2013 restricts the tenure of independent Director to two terms of up to ten years with a single term not exceeding five years, which shall be effective from April 1st 2014. The revised clause 49 of the Listing Agreement also contain the same provisions.
Mr. R.K. Pandey, and Mr. C.S. Batra, are liable to retire by rotation at the ensuring Annual General Meeting and being eligible, offer themselves for appointment as independent Directors pursuant to the Provisions of the Companies Act 2013 to hold the office for a period upto March 2019.
Additional Information and brief profile, as stipulated under the equity listing agreement for each of the above directors seeking re-appointment/appointment is annexed to the notice of the AGM.
Further, the business items relating to re-appointment/appointment of above directors have been included in the Notice of the AGM.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Board of Directors of the Company confirms that:
1) The Director have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view for the state of affairs of the Company as at March 31st 2014 and of the profit of the Company for the year ended on that date;
2) 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;
3) The annual accounts for the year ended March 31, 2014 have been prepared on a ''going concern'' basis. and
4) Proper systems are in place to ensure compliance of all laws applicable to the Company
In term of office of M/s Rohtas & Hans, as statutory auditors of the Company will expire with the conclusion of forthcoming annual general meeting of the Company. M/s Rohtas & Hans, has been statutory auditors since long of Company.
The Board of Directors of the Company have subject to approval of the members decided to make change in the statutory auditors. This change is in order to comply with the condition of as mentioned in CDR Package as approved by CDR Cell. A special notice from Hanung Furnishing pvt Ltd. has been received proposing a resolution in the forthcoming annual general meeting for appointment of M/s AMRG & Associates, Auditor of the Company in place of M/s Rohtas & Hans being the retiring auditor.
A resolution proposing appointment of M/s AMRG & Associates and Saxena, as the statutory auditor of the company pursuant to section 139 of the companies act 2013 forms part of the notice.
M/s Rohtas & Hans, over many year have successfully met the challenge that the size and scale of the company''s operations pose for auditor and have maintained highest level of governance, rigour and quality in their audit. The Board of Directors on record its appreciation for the services rendered by M/s Rohtas & Hans as statutory auditor of the Company
AUDITORS QUALIFICATION SYSTEM ON ACCOUNTS
A. Observations in the Auditors'' Report are dealt within Notes to Accounts at appropriate places and being self- explanatory, need no further explanation.
B. The Auditors in their report to the members, have given qualified opinion and response of your directors with respect to it is as follow:
i. Company has a subsidiary Hanung (Shanghai) Ltd. in China. Since the purpose of opening a company in China is not fulfilled and has incurred continuous loss since its inception, the board of director has decided to windup the company so that further loss to be minimize. The process of winding up of the company has been initiated and it will take some time to complete the formalities. The effect of investment made in Hanung (Shanghai) Ltd. has been accounted after the completing the winding up process.
ii. Deferred tax assets of Rs. 10522 lacs are recognized on the principle of going concern and based on the future projection of taxable income as per TEV study done by Dun & Bradstreet Information Services India Pvt. Ltd. Since it is only one quarter passed from the date of closing of financial year, it''s too early to establish any negative performance of the company. The Directors are confident of the future business performance and growth of the company. The company has filed its income tax return for the assessment year 2012-13 on 31st January 2014. The company had also filed a petition with Hon''able Income tax Settlement Commission on 19.02.2014 in respect of income for the years ended March 31, 2011 to March 31, 2013, which was admitted vide its order dated 29.04.2014. The Company had discharged due and admitted liability of income tax based on favourable response from the Hon''ble Settlement Commission and further liability expected is dependent on outcome of disposal of the case by the Hon''ble Settlement Commission.
C. The Auditors in their annexure to audit report, have point out some opinion and response of your directors with respect to it is as follow:
i. Point no. 2 (c) of annexure to the audit report regarding slow moving inventory of Rs. 27269.26 lacs due to cancellation of export orders. The directors of the company are trying hard to realize the said inventory and are in the opinion to fully realizable over a period of 2-3 years.
ii. Point no. 9 of annexure to the audit report regarding Statutory dues; the company in general has been regular in remitting the statutory dues in time. The management has taken steps to avoid delays and as a matter of internal control also, statutory dues are being monitored for timely remittances. Since the company is facing financial crisis, all the pending statutory dues will be paid during the current financial year.
CODE OF CONDUCT COMPLIANCE
Pursuant to clause 49 of the Listing agreement entered with the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited, the declaration signed by the Managing Director affirming compliance with the code of Conduct by the Director''s and senior management personnel, for the financial year 2013-2014 is annexed and forms part of the Directors and Corporate Governance Report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
By the terms of 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, the Particulars of conservation of energy, technology absorption, foreign exchange earnings and outgo are set out as an Annexure to this Report.
Statements made in the Report, including those stated under the caption "Management Discussion and Analysis" describing the Company''s plans, projections and explanations may constitute "forwards looking statement" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.
REGISTRAR AND SHARE TRANSFER AGENT
M/s Karvy Computershare Private Limited, Hyderabad, is the Registrar and Share Transfer Agent of the company. Details of the depository system and listing shares are given in a part of the "Additional Shareholders Information", which forms a part of the Corporate Governance Report and is attached with the Annual Accounts.
In terms of the provisions of The Companies Act, The Board of Directors of your company have on the recommendation of the Audit Committee, Appointed M/s Chandra Sharma & Co. Vaishali, Ghaziabad as Cost Auditor to conduct the cost audit of your company for the financial year ending 31st March 2015 subject to the approval of the Central Government.
The Audit Committee has received a certificate from the Cost Auditor certifying their independence and arm''s length relationship with the company.
Your Directors would like to place on record their sincere thanks to the Company''s clients, vendors, investors, and bankers for their continued support to the Company during the year. The Directors wish to place on record their appreciation of the contributions made by employees at all levels.
We thank the Government of India, State Government and other Government agencies for their support and look forward to their continued support in future.
By order of the Board For Hanung Toys and Textiles Limited
Place : Noida Ashok Kumar Bansal Date :30th September, 2014 Chairman-cum-Managing Director
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