DIRECTORS' REPORT Dear Shareholders, 1] Your Directors have pleasure in presenting the Twenty-fourth Annual Report on the business and operations together with the Audited Financial Statements of the Company for the year ended March 31, 2015. 2] PERFORMANCE Your Company has achieved a Turnover of Rs. 15,554.77 lakhs against Rs. 16,133.60 lakhs last year. Earnings before Interest, Depreciation and Tax for the year are at Rs. 2,983.70 lakhs as compared to Rs. 3,581.74 lakhs achieved in 2013-14. The Profit after Tax for the year is Rs. 1,602.65 lakhs vis-a-vis Rs. 1,840.95 lakhs last year. EPS for 2014-15 is 2.98 as against Rs. 3.42 earned last year. 3] DIVIDEND The Board of Directors of your Company is pleased to recommend a dividend of Rs. 0.75 [75%] per Equity Share of Rs. 1 each, for approval of the shareholders at the ensuing Annual General Meeting. The total payout on account of dividend will be Rs. 485.20 lakhs inclusive of tax thereon of Rs. 82.06 lakhs. 4] APPROPRIATIONS For the year under review, an amount of Rs. 500.00 lakhs is proposed to be transferred to General Reserve and an amount of Rs. 6215.82 lakhs is proposed to be retained in the Profit and Loss Account. 5] SHARE CAPITAL / ESOP The paid up Equity Share Capital as on March 31, 2015 was Rs. 537.52 Lakhs. The Company had approved a Resolution at the Fifteenth Annual General Meeting held on August 26, 2006 for Employee Stock Options Plan [ESOP] to the Directors / employees under the SEBI [Employee Stock Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999, with a view to attract, retain, motivate and reward the employees. However, no Stock Options have been offered or issued as on date. The Company has not issued and allotted any securities during the year ended March 31, 2015. 6] FINANCE Cash and cash equivalent as at March 31, 2015 was Rs. 2,929.81 lakhs against Rs. 2,584.39 lakhs last year. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. 7] DEPOSITS During the year under review the Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies [Acceptance of Deposits] Rules 2014. 8] PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 9] MANAGEMENT DISCUSSION AND ANALYSIS : Pursuant to the amended Clause 49 [VIII] [D] of the Listing Agreement, your Directors wish to report as follows: a] Industry Structure & Developments : The Company is engaged in the business of manufacturing glass containers. Products are mainly being supplied to the Spirits, Soft Drink and Food Industries. The growth factors in Spirits is highest and growing each year with double digit growth. With several Multi National Companies arranging tie up with Indian Manufacturing units, the Company's future growth prospects appear to be bright. Ban enforced by the Central Government for use of PET bottles in Pharmaceutical Industry gave much needed boost to the Glass industry. b] Opportunities & Threats Though advanced economies have taken a positive turn on growth front with US having achieved 2.4% and with overall growth of 1.8% on an average, China has of late, been a cause of concern having recorded slowest growth rate during last 24 years. As a result overall growth rate of Emerging market has slid to 4.6% against 5% in the previous year. However, Indian industry has witnessed an improvement in the economy with recent pickup in high speed indicators such as Purchasing Manager's Index [PMI]. Findings of the CII ASCON industry survey for the first quarter of fiscal 2016 also indicate a reversal from slowdown to recovery adding to evidence that Indian economy is looking up despite many challenges. A stable Government at the Centre has initiated structural reforms including 'Make in India', to put the economy on an accelerated growth path which, in due course, will open up further opportunities for the manufacturing sector and consequent economic growth in India. c] Segment-wise or Product-wise Performance Your Company's business activity falls within a single primary business segment viz. bottles / containers. As such there are no separate reportable segments as per Accounting Standard-17 issued by the Institute of Chartered Accountants of India. d] Outlook Capacity expansion is on the anvil of your Company's existing plans. As part of several initiatives for up gradation of its facilities, the Company is in the midst of incurring adequate capital expenditure for relining of one of its furnaces with enhanced capacity and to adaption of the latest technologies and processes. This will help the Company to further strengthen quality standards and improve service level to become the most preferred supplier to our customers. Considering the future prospects of glass packaging industry there is immense scope for growth. Your company is cautiously optimistic for coming years in spite of stiff competition from recent entrants in the business. e] Risks and Concerns Your Company operates mainly in the domestic market and has limited exposure to foreign exchange risks. However, gas prices being linked to the US Dollar, the Company faces the risk of forex volatility to that extent. Further, gas prices are subject to revision by the Government on half yearly basis which is likely to have it's impact on the Company. Apart from the said business risks, the volatility in global economies can have an impact on developing & emerging economies like India. However, your Company is confident to counter these risks by continuous process improvements, cost reduction through re-engineering the products and resources of power and fuel. To reduce the impact of this risk, the Company is enhancing its connected load from the State Electricity Board and is also exploring the power trading option. The Company has duly adopted risk management plan for identification and evaluation of all potential risks and measures required to overcome these risks. Your Company has adequate insurance coverage for all assets and duly complies with all applicable safety norms. f] Certifications Your Company is accredited for Quality Management System ISO 9001: 2008 certification and for Environment Management System ISO 14001: 2004 certification g] Occupational Health & Safety The Company's plants comply with all norms set up for clean and better environment by the competent authorities. The Company undertakes regular checks / inspections including certification for the maintenance of the environment. The Company values environmental protection and safety as the major considerations in its functioning. The Company has adequate effluent Treatment Plants to prevent pollution. h] Human Resources and Industrial Relations Employees being a key factor in achieving targeted performance, your Company encourage its employees to foster an attitude of continuous learning by conducting periodical training programmes. Industrial relations continued to remain cordial during the year. i] Discussion on Financial Performance with respect to Operational Performance and state of Company's affairs The financial performance matched its operational performance during the year under review. The Finance cost has dropped marginally because of lower utilization of working capital limits. However, the lower demand has affected the overall profitability. Profit before tax was marginally lower mainly due to impact of gas price increase during the year. Marginally low sales during the year also contributed to lower profits. The depreciation was charged on the basis of remaining useful life of Fixed Assets. The Company is a debt free Company and has earned income from its investable fund. j] Cautionary Statement : Management Discussion and Analysis describes Company's projections, expectations or predictions and is a forward looking statement within the meaning of applicable laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Company's operations include gas price reviews, changes in economic conditions affecting demand and supply, price fluctuations in domestic and international market, change in Government policies, tax regimes, economic developments and other related and incidental factors 10] INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are regularly tested and certified by Statutory Auditors as well as Internal Auditors and cover the Plant, Corporate office and key areas of business. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company's risk management policies and system. 11] DECLARATION BY INDEPENDENT DIRECTORS Pursuant to Section 149[7] of the Companies Act, 2013, [the Act], the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149[6] of the Act and Clause 49 of the Listing Agreement. 12] CORPORATE GOVERNANCE Your Company is committed to principles of good corporate governance. The Board of Directors ensures that the Company is in compliance with all the applicable provisions of Clause 49 [as amended] of the Listing Agreement pertaining to Corporate Governance. A detailed report on Corporate Governance along with a certificate from the Auditors confirming compliance form integral part of this Report. 13] AUDIT COMMITTEE The Audit Committee comprises Mr. L. Rajagopalan [Chairman], Mr. F. S. Broacha and Mrs. K. J. Udeshi as member is in line with the requirements of Section 177 of the Companies Act, 2013. 14] CORPORATE SOCIAL RESPONSIBILITY [CSR] - INITIATIVES In terms of the provisions of the Section 135 of the Act read with Companies [Corporate Social Responsibility policy [Rules] 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility ["CSR"] Committee which is chaired by Mr. T. N. Shetty. The other members of the Committee are Mr. F. S. Broacha, Mr. L. Rajgopalan and Mrs. K. J. Udeshi, Independent Directors. Mr. Ganesh Chaturvedi, CFO is a permanent invitee to the Committee. Your Company also has in place a CSR policy and the same is available on your Company's website viz. <http://www.haldynglass.com/direct/csr-policy.pdf>. The Committee recommends to the Board activities undertaken during the year. Your Company is a caring corporate entity and lays significant emphasis on development of the communities around which it operates. Your Company has identified several projects relating to Education, Social Empowerment & Welfare, Infrastructure Development, Sustainable Livelihood, Health Care and Education during the year and initiated various activities in neighbouring villages, and around plant locations. The work on several initiatives has picked up momentum during the year resulting in a spend of Rs. 37.74 Lakhs. Further, your Company has identified few villages in Gujarat and Maharashtra for projects under the Swacch Bharat Abhiyaan initiative of the Government of India. The Annual Report on CSR activities is attached as Annexure II forming part of this report. 15] 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 On June 23rd, 2015 your Company entered into a Joint Venture Agreement ["the JV Agreement"] with Heinz Glas International GmbH ["Heinz"], for manufacture and marketing of clear glass containers for the cosmetics and perfumery industries, in India and abroad at an initial estimated Project Cost of Rs. 6,000.00 Lakhs which is proposed to be funded by Equity investment [including premium] of Rs. 4, 000.00 Lakhs (i.e. the Company and Heinz will equally invest Rs. 2,000.00 Lakhs each), and the balance of Rs. 2,000.00 Lakhs would be funded through borrowings/ Foreign Currency Loan. The name of JV Company Truffle Glass Private Limited was subsequently changed to Haldyn Heinz Fine Glass Private Limited. 16] DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE During the year under review, no material Orders were passed by the Regulators / Courts / Tribunals, impacting the Company's going concern status and future operations. 17] DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES The Company had no subsidiary / Joint Venture and / or Associate Company as at the end of financial year ended March 31, 2015. 18] REMUNERATION OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL [KMP] / EMPLOYEES: Your Company has framed a Remuneration Policy which lays down a framework in relation to the Directors, Key Managerial Personnel and Senior Management of the Company. The Policy also lays down the criteria for selection and appointment of Independent Directors. The details of the policy are explained in the Corporate Governance Report. MECHANISM In pursuance of the provisions of section 177 [9] & [10] of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil mechanism policy is available on the website of the Company at <http://www.haldynglass.com/direct/vigil-mech.pdf> 20] RISK MANAGEMENT POLICY As required by Clause 49 of the Listing Agreement, the Company has framed the Risk Management Policy. The Main objective of this policy is to ensure sustainable business growth with stability and to promote proactive approach to identifying, evaluating and resolving risks associated with its business. In order to achieve the key objective, the policy establishes structured and disciplined approach to risk management in order to guide decisions on risk related issues. Under the current challenging and competitive environment, the strategy for mitigating inherent risk in accomplishing the growth plan of the Company is imperative. The Common risk interalia are regulatory risk, competition, financial risk, technology obsolescence, human resources risk, political risks, investments, retention of talents, expansion of facilities and product price risk. 21] 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 furnished in the Annexure-I forming part of this Report. 22] DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 [5] of the Companies Act, 2013, the Directors confirm that: i] I n the preparation of the annual accounts, the applicable Accounting Standards have been followed along with the proper explanations relating to material departures. ii] Appropriate Accounting Policies have been selected and applied consistently. 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, 2015 and of the Profit and Loss Account for the Financial Year 2014-15 have been made. iii] Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities. iv] The Annual Accounts have been prepared on a going concern basis. v] The policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, prevention and detection of frauds / errors, accuracy and completeness of the accounting records, and the timely preparation of reliable financial information [Internal Financial Controls], are adequate and were operating effectively; vi] Proper systems are in place to ensure compliance of all laws applicable to the Company and such systems are adequate and operating effectively. 23] RELATED PARTY TRANSACTIONS Particulars of contracts / arrangement with related parties entered under section 188[1] were available in AOC 2 as Annexure-IV to this report All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a quarterly basis for transactions which are of a foreseen and of repetitive nature. The policy on Related Party Transactions as approved by the Board is available on the website of the Company at <http://www>. haldynglass.com/direct/related-party.pdf.com 24] DIRECTORS & KEY MANAGERIAL PERSONNEL [KMP] a] Directors In accordance with the provisions of the Section 152 Mr. N. D. Shetty, retires by rotation and, being eligible, offer himself for re-election. In terms of section 152 of the Companies Act, 2013, the Board has revised on May 26, 2014, the terms and conditions of appointment of Mr. N. D. Shetty, Executive Chairman of the Company and made him liable to retire by rotation. All Independent Director have given declarations that they meet the criteria of independence as laid down under section 149[6] of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Mrs. V. R. Ajila Director of the Company resigned on September 24, 2014. The Board has placed on record its appreciation for the contributions made by Mrs. V. R. Ajila. Mr. Rolf E .von Bueren, Director of the Company being absent from all meetings of Board for preceding of 12 months and, pursuant to Section 167[1][b] of the Companies Act, 2013 deemed to have vacated the office of Director by operation of law. However, considering his rich experience over 20 years, with the Company, he was appointed as an Additional Director of the Company. b] Key Managerial Personnel The following employees were designated as whole - time key managerial personnel by the Board of Directors during the year under review: i] Mr. T. N. Shetty, Managing Director ii] Mr. G. P. Chaturvedi, Vice President Finance and Chief Financial Officer iii] Mr. A. A. Lambay, Company Secretary 25] PERFORMANCE EVALUATION OF BOARD: The Board carried out an annual performance evaluation of its own performance, the individual directors as well as the working of the committees of the Board. The performance evaluation of independent directors was carried out by the entire board. The performance evaluation of the Chairman and the non-independent directors was carried out by the independent directors. 26] MEETINGS During the year, four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and listing Agreement. 27] AUDITORS a] Statutory Auditors The Company's Auditors, M/s. Mukund M. Chitale & Co. [Firm Registration No. 106655W], Chartered Accountants, Mumbai who retire at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Act, and the Rules framed thereunder for reappointment as Auditors of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, the Board proposes re-appointment of M/s Mukund M. Chitale & Co. as Statutory Auditors of the Company for a period of 5 [ five] years subject to ratification of such appointment by shareholders at every Annual General Meeting. b] Secretarial Auditor 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 SPANJ & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is part of this report. The report does not contain qualifications, reservation or adverse remark. 28] AUDITORS' REPORT Auditors' Report is self explanatory and without any qualifications or adverse remarks. Hence no comment is required. 29] EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure-III. 30] DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE [PREVENTION, PROHIBITION AND REDRESSAL] ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a 'Respect for Gender' Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013 and the Rules thereunder. The Company has not received any written complaint on sexual harassment during the financial year 31] ACKNOWLEDGEMENTS Your Directors thank all the shareholders, customers, vendors, banks and the State and Central Governments for the support extended during the year and look forward to their continued support in the future. Your Directors also place on record their appreciation of the contribution made by the Company's employees at all levels. For and on behalf of the Board N. D. Shetty Executive Chairman [DIN: 00025868] Place : Mumbai Dated : August 14, 2015 |