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DIRECTOR'S REPORT

Alfred Herbert (India) Ltd.

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Market Cap. (₹) 45.90 Cr. P/BV 0.95 Book Value (₹) 626.08
52 Week High/Low (₹) 731/505 FV/ML 10/1 P/E(X) 13.95
Bookclosure 12/07/2019 EPS (₹) 42.66 Div Yield (%) 0.42
Year End :2019-03 

DIRECTORS’ REPORT

The Directors have pleasure in presenting the Ninety-ninth Annual report together with the Audited Accounts of your Company for the year ended 31st march 2019.

FINANCIAL RESULTS

The financial results are as under:

31st March

31st March

2019

2018

Rs.

Rs.

profit before tax and

Exceptional items

32,848,288

10,589, 247

Exceptional Items

-

-

provision for tax

(including deferred tax)

3,147,908

(1,300,388)

Excess tax provision written back

-

(7,739)

profit after tax

29,700,380

11,897,374

surplus from earlier years brought forward

147,279,438

140,639,012

Amount available for

appropriation

176,979,818

152,536,386

Appropriations: Dividend for 2017-18

1,928,573

1,542,858

Corporate Dividend tax for 2017-18 396,423

314,090

General Reserve

75,000,000

1,000,000

special Reserve

5,940,000

2,400,000

83,264,996

5,256, 948

surplus carried to Balance sheet

93,714,822

147,279,438

CHANGE IN NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the financial year 2018-19.

TRANSFER TO RESERVES

The Company has transferred Rs. 5,940,000/ to the special reserve Account and Rs. 75,000,000/- to the General reserve Account.

DIVIDEND

Your Directors take pleasure in recommending for approval the payment of Dividend of Rs. 2.50 (per share) for the year ended 31st march 2019.

FINANCIAL PERFORMANCE

The Company’s performance was satisfactory during the year, the Company’s gross income for the financial year ended 31st march 2019 stood at Rs.442.41 lakhs as against Rs.265.37 lakhs in 2017-18. profit before tax stood at Rs.328.48 lakhs in 201819 as against Rs. 105.89 lakhs profit before tax in 2017-18. profit after tax of the Company stood at Rs.297.00 lakhs. the performance of the Company’s non-current investments was also satisfactory.

The Company is developing its property in Kolkata where the work is progressing but with multiple sanctions involved with regard to the proposed project being a green building, incremental area was sanctioned by Kolkata municipal Corporation subject to the Company obtaining permission from the Archeological survey of india (Asi). the Company had even received a favorable Heritage impact Assessment Report from INTACH. however, the Archeological survey of india (Asi) did not grant permission for the construction of the incremental area on an additional floor, hence considerable time was lost in completing the building. however, the Company now hopes to complete the construction by early next year, the performance of the Company’s wholly owned subsidiary Alfred herbert limited continued to be disappointing. Despite supporting Alfred herbert limited significantly including providing significant financial support over the years, the Company did not performed to the expectation. lower selling prices due to aggressive competition coupled with sharp increases in input costs, a shift in the markets to radial tyre machinery and less than optimum productivity with high fixed costs had led to significant challenges. whilst the management team of Alfred herbert limited has taken significant steps to cut expenses, augment margins and productivity, more needs to be done to ensure that the Company returns to profitability at the earliest.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of the Companies Act, 2013, Mr A.v Lodha, Director, retires by rotation and being eligible, offers himself for re-appointment.

Mr. s s Jain and Mr. R C tapuriah were appointed as independent Directors of the Company for the second term commencing from April 1, 2019 upto March 31st 2024 by passing special resolution through postal ballot on April 1, 2019.

All independent Directors have given declaration that they meet the criteria of independence as laid down under section149(6) of the Companies Act, 2013 and Regulation 25 of seBI (listing obligations & Disclosure Requirements) Regulations, 2015.

Mr. v Matta was appointed as Chief Executive officer with effect from 1st May 2018 and Mrs. shobhana sethi was appointed as Chief financial officer & Company secretary with effect from 1 st May 2018.

SHARE CAPITAL

The paid -up equity share capital of the Company as on 31st March 2019 was Rs.77.14 lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

DEPOSITS

the Company had discontinued its fixed deposit scheme in the financial year 2000-2001.

EXTRACT OF ANNUAL RETURN

the details forming part of the extract of the Annual return in form MGT-9 as required under section 92 of the Companies Act, 2013, is marked as ‘Annexure -B’ which is annexed hereto and forms part of the Directors’ Report.

PARTICULARS OF LOANS, GUARANTEES OR iNVESTMENTS

The Provisions of Section 186 of the Companies Act, 2013 pertaining to Investments, Loans and Guarantees is not applicable to the Company since the Company is a Non-banking Financial Company.

STATUTORY AUDITORS

M/s. ALPS & Co. Chartered Accountants (Firm Registration No. FRN 313132E) existing Auditors of the Company were appointed for a period of 5 (five) years by the Members of the Company in the 97th Annual General Meeting held on 28th July 2017. By virtue of the amendment made in the Companies (Amendment) Act, 2017, the Company is not required to place before the Annual General Meeting the matter pertaining to ratification of appointment of Auditors.

AUDIT REPORT

There is no qualification, reservation or adverse remark or disclaimer made by the Auditor in his report and hence, no explanations or comments by the Board are required.

SECRETARIAL AUDIT

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 Priyanka Tibrewal, Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as “Annexure A “

CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance code as stipulated under the Listing Agreement with the Stock Exchange. A separate section on Corporate Governance, along with Certificate from the Auditors confirming the compliance, is annexed and forms part of the Annual Report.

SUBSIDIARY COMPANIES

in accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of india, the Balance Sheet, Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached with the Balance Sheet of the Company. However, the financial information of the Subsidiary Companies is disclosed in the Annual Report in compliance with the said circular. The consolidated financial statements presented by the Company include financial results of its Subsidiary Companies, Alfred Herbert Limited and Herbert Holdings Limited.

MEETINGS OF THE BOARD

During the year 5 meetings of the Board of Directors and 1 meeting of independent Directors were convened and held.

5 meetings of Audit Committee, 2 meetings of Stakeholders Relationship Committee and 2 meeting of Nomination and Remuneration Committee were also held, the details of which viz., dates and number of meetings attended by each director etc., are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

BUSINESS RISK MANAGEMENT

The main identified risks at the Company are Commercial Risks, Financial Risks, Operational Risks and Legal & Regulatory Risks. Your Company has established a comprehensive Risk Management System to ensure that risk to the Company’s continued existence as a going concern and to its development are identified and addressed on timely basis. Risk Management strategy as approved by the Board of Directors is implemented by the Company Management

SECRETARIAL STANDARDS

The Company is in compliance of all applicable Secretarial Standards as specified by the institute of Company Secretaries of india.

MANAGERIAL REMUNERATION

During the year, the Company paid an aggregate sum of Rs. 14.07 lakhs to Key Managerial Personnel, Mr. V Matta, Chief Executive Officer and Mrs. Shobhana Sethi, Company Secretary & Chief Financial Officer.

VIGIL MECHANISM

Pursuant to the provisions of revised Regulation 22 of SEBi (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Section 166 (9)&(10) of the Companies Act, 2013, the Company had established a Vigil Mechanism for Directors and Employees to report concerns of unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. REMUNERATION POLIcY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(f) and Regulation17 of SEBi (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees.

INTERNAL FINANCIAL CONTROLS

Pursuant to Section 134(5) (e) of the Company’s Act, 2013, the Directors of the Company had laid down internal financial control policy assuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safe guarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the Accounting records and timely preparation of reliable financial information.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The Company has an internal Control System commensurate with the size and scale of its operations.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were in the ordinary course of business.

None of the Directors has any direct pecuniary relationships or transactions vis-a-vis the Company.

CORPORATE SOCIAL RESPONSIBILITY

The profit of the Company is less than the amount specified under section 135 of the Companies Act, 2013 and, thereby, provision of Corporate social Responsibilities and Obligations thereof are not applicable to the Company.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

The Company is not required to set up an Internal Complaints Committee as per the provisions of sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013. The Company has not received any complaints during the year.

DIRECTORS’ RESPONSIBILITY STATEMENT

As stipulated in section 134(3) (C) of the Companies Act, 2013, your Directors subscribe to the “Directors’ Responsibility statement” and confirm as under:

a) that in the preparation of the annual financial statements for the year ended 31st march 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note No.1of the Notes to the financial statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st march 2019 and of the profit of the Company for the year ended on that date

c) that 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) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no foreign exchange earnings and expenditure during the year. The other particulars relating to Conservation of Energy and Technology Absorption stipulated under section134(3M) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, are not applicable.

PERSONNEL

Your Directors wish to place on record their appreciation for the services rendered by the employees of the Company during the year.

On behalf of the Board

A. V. Lodha

Kolkata Chairman

Date: 24th May 2019 (DIN : 00036158)

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