DIRECTORS' REPORT To, The Members, The Directors have pleasure in presenting the 27th Annual Report of the Company, together with the financial statements, for the year ended on 31st March 2015. DIVIDEND: To conserve the funds for the business of the Company including the funding for the expansion plans, your directors regret their inability to recommend any dividend for the financial period 2014-15. TRANSFER TO RESERVES: Taking into account overall financial performances of the Company Your Directors do not transfer any amount to General Reserve Account. STATE OF COMPANY'S AFFAIR: The Company continues to make efforts to increase the sales of Carton Sealing Tapes and other Specialty Adhesive Coated products by providing the customers an excellent quality product backed by dedicated customer services. The sales of Carton Sealing Tapes and the acceptance of the new products developed by the Company for the Indian market and as well expected growth in the FMCG sector in India for all manufactured products and services have been stagnant during the year and the company has been unable to utilize full capacities for production of Self Adhesive Tapes. The Company continues to focus on building its Brand and Image as a quality supplier of Adhesive Coated Products in India. The Company has also been developing high value added POF shrink films during the current year which will enhance the turnover and bring good profits to the Company during the next year. The Company has also strategically invested in a subsidiary company named Bagla Wellness Private Limited for promoting wellness and fitness by setting up fitness centres in New Delhi and expects this business to also grow in the coming years MATERIAL CHANGES BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE DIRECTOR REPORT: The material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year and date of the director report of the Company to which the financial statements relate is the Company named Bagla Wellness Private Limited became the Subsidiary Company of Hindustan Adhesives Limited. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT: Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178: The Board has on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report and also available on the Company website www.bagla-group.com SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES: Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the statement containing salient features of the financial statements of the Company's Associates' in Form AOC-1 is attached as "Annexure A". PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements. DEPOSITS: During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V -Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. AUDITORS AND AUDITORS' REPORT (1) STATUTORY AUDITORS: Pursuant to Section 139 of the Act and Rules made thereunder, M/s. Salarpuria & Partners, Chartered Accountants were appointed as statutory auditors of the Company at the last annual general meeting held on 12th September, 2014 for a period of 3 years commencing from the closure of the 26th Annual general Meeting till the closure of the 29th Annual General Meeting, subject to ratification by the members at every AGM. Accordingly, your directors recommend the ratification of the appointment of M/s. Salarpuria & Partners as statutory auditors of the Company from the conclusion of the 27th Annual General Meeting till the conclusion of the 28th Annual General Meeting. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. (2) SECRETARIAL AUDITORS: Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Mr. Puneet Kumar Pandey, a Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as "Annexure B". The Secretarial Audit Report for the financial year ended 31st March, 2015 do not contain any qualification, reservation, adverse remark or disclaimer. SHARE CAPITAL: The paid up Equity Share Capital as on 31st March, 2015 was ' 5.11 Crores. During the year under review, the Company has not issued any shares. The Company has not issued shares with differential voting rights. It has neither issued employee stock options nor sweat equity shares and does not have any scheme to fund its employees to purchase the shares of the Company. EXTRACT OF THE ANNUAL RETURN: The extracts of Annual Return in Form MGT - 9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 for the Financial Year 2014-15 is furnished in "Annexure C" and is attached to this report. 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 D". CORPORATE SOCIAL RESPONSIBILITY: The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Companies Act, 2013 and hence it is not required to formulate policy on corporate social responsibility. DIRECTORS AND KEY MANAGERIAL PERSONNEL: The Board of Directors of the Company at present has Seven members. Pursuant to provisions of Section 152 of Companies Act, 2013 and the Articles of Association of the Company Mr. Lalit Kumar Bagla Director of the Company is liable to retire by rotation and being eligible, offer himself for re-appointment. As per the provisions of Sections 196, 197 of the Companies Act, 2013 read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, Mr. Suresh Shridhar Ajila and Mrs. Urmila Goenka were appointed as whole-time Director of the Company for a period of 3 years w.e.f 30th September, 2014 and simultaneously the approval was taken in previous Annual General Meeting. Pursuant to the provisions of Section 149 of the Act, which came into effect from April 1, 2014, Mr. Pawan Sharma, Mr. Amit Kumar and Mr. K. C. Gupta were appointed as independent directors at the annual general meeting of the Company held on September 12, 2014 up to September 11, 2019. The terms and conditions of appointment of independent directors are as per Schedule IV of the Act. Mr. D. P. Gupta non-executive independent director resign from the board of director effective August 13, 2014. The board recommends appropriation of the valuable contribution made by Mr. D. P. Gupta during his tenure as director. Mr. Nakul Bagla was appointed as Chief Financial Officer i.e, Key Managerial Person of the Company pursuant to Section 2(51) and 203 read with Rule 8 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 w.e.f 12th July 2014. NUMBER OF MEETINGS OF BOARD OF DIRECTORS: Five meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. AUDIT COMMITTEE: The Company being a Listed Company was required to constitute an Audit Committee under Section 177(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board. STAKEHOLDERS RELATIONSHIP COMMITTEE: The Company was required to constitute a Stakeholders Relationship Committee under Section 178(5) of the Companies Act, 2013. The Composition of the Stakeholders Relationship Committee is provided in the Corporate Governance Report forming part of this report. VIGIL MECHANISM / WHISTLE BLOWER POLICY: Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act, 2013 read with Rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Company has adopted a Whistle Blower Policy, which provides for a vigil mechanism that encourages and supports its Directors and employees to report instances of unethical behaviour, actual or suspected, fraud or violation of the Company's Code of Conduct or Ethics Policy. It also provides for adequate safeguards against victimisation of persons who use this mechanism. The policy adopted by the company is also posted on the website of the company. www.bagla-group.com NOMINATION AND REMUNERATION COMMITTEE: The Company being a Listed Company was required to constitute a Nomination and Remuneration Committee under Section 178(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. The Composition of the and Remuneration Committee is provided in the Corporate Governance Report forming part of this report. Remuneration of the Key Managerial Personnel and Employees of the Company is based on the performance of the company. Remuneration of the employees are revised on timely basis and based on their performances. The company generally see the ability and review the performance of the candidate before the appointment of the Director. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act 2013 for the Financial Year 2014-15 in the prescribed format, Form AOC 2 has been enclosed with the report as "ANNEXURE E". RISK MANAGEMENT POLICY: The Company does not have any Risk Management Policy as the element of risk threatening the Company's existence is very minimal. MANAGEMENT DISCUSSION AND ANALYSIS: Management's Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. BOARD EVALUATION: The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by the Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting without the participation of the Non independent Directors and Management, considered/evaluated the Boards' performance, Performance of the Chairman and other Non-independent Directors. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013: The Company is not required to adopt a policy for prevention of Sexual Harassment of Women at workplace as the Company having less than 10 women Employees at its workplace. DECLERATION OF INDEPENDENT DIRECTORS: The Independent Directors have submitted their disclosures to the Board that they fulfil the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves for their continuance as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. DIRECTORS' RESPONSIBILITY STATEMENT: Accordingly, pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, 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, 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. b) for the financial year ended March 31, 2015, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit of the Company for the year ended March 31, 2015. 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) the annual financial statements have been prepared on a going concern basis. e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively. f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT: The Board appreciates and places on record the contribution made by the employees during the year under review. The Board also places on record their appreciation of the support and co-operation of all stakeholders particularly shareholders, bankers, financial institutions, customers, suppliers, medical fraternity and business partners. By order of the Board of Directors of HINDUSTAN ADHESIVES LIMITED (L.K. BAGLA) CHAIRMAN DIN: 01596548 Place: Delhi Date : 14/08/2015 |