DIRECTORS' REPORT DEAR MEMBERS Your Directors have pleasure in presenting Twenty Fourth Annual Report for the financial year 2014-2015 along with Audited Balance Sheet and the Statement of Profit and Loss Account for the year ended on 31st March, 2015. DIVIDEND: To conserve the resources, your Directors do not recommend any Dividend for the year under review. RESERVES There is no amount has been proposed to carry to Reserves. PRODUCTS & BUSINESS The Company's main business is of manufacturing adhesive tapes and plastic ropes. FUTURE OUTLOOK The Company is proactively responding to the changing business environment and is confident of sustaining its market share by improving competitive position in the market. The overall business outlook for the Company is promising with improvement in overall economic environment. Efforts towards higher operational efficiencies shall continue. The Company continues to examine the possibilities of expansion and will make the necessary investments when attractive opportunities arise. The BOPP Adhesive Tapes are used for packaging. It is consumed daily in large quantities by all industrial and commercial organisations. From packing courier covers and bags to packing of pharmaceutical cartons, everywhere, the self adhesive tapes are consumed. The consumption increases in line with the improved standard of living and business activity in the society. Therefore the consumption of this product is bound to increase further. EXPORTS The Company has achieved an Export Turnover of Rs. 1245.79 Lacs compared to previous years Rs. 1101.22 Lacs. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures from the same; b) the Directors 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 of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) Shri. Kamal Arora and Shri. Jaspal Singh Bhasin resigned from the post of Directors w.e.f. 12th August, 2015. The Board of Directors places on record its appreciation for the valuable contribution made by Shri. Kamal Arora and Shri. Jaspal Singh Bhasin during their tenure with the Company. Further, due to resignation of Shri. Kamal Arora none of the Directors retires by rotation at the ensuing Annual General Meeting. Smt. Mridu Arora and Shri. Nitin Rane were appointed as an Additional Director of the Company w.e.f. 12th August, 2015. Pursuant to Section 161 of the Companies Act, 2013, Smt. Mridu Arora and Shri. Nitin Rane holds office upto the date of ensuing Annual General Meeting of the Company. The Company has received notice alongwith the requisite deposit from the member of the Company for their appointment as Director of the Company. The Board of Directors recommends their appointment as the Director of the Company. Further, in terms of Sections 149, 152 read with Schedule IV of the Companies Act, 2013, the Board of Directors ("the Board") have reviewed the declaration made by Shri. Nitin Rane that he meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the Board is of opinion that he fulfill the conditions specified in the Companies Act, 2013 and the rules made thereunder and is independent of the management. The Board of Directors recommends his appointment as an Independent Director for period of five years, not liable to retire by rotation. The Company has also received declaration from Shri. Manish Nanda, Independent Director of the Company confirming that he meets with the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. Shri. Sandeep Arora, Managing Director of the Company was designated as Whole-time Key Managerial Personnel of the Company w.e.f. 12th August, 2014. Shri. Shivcharan Girker was appointed as Chief Financial Officer of the Company and was designated as Whole-time Key Managerial Personnel of the Company w.e.f. 12th August, 2014. Shri. Amish Ashar was appointed as Company Secretary of the Company and was designated as Whole-time Key Managerial Personnel of the Company w.e.f. 10th March, 2015. However, Shri. Amish Ashar resigned from the post of Company Secretary w.e.f. 6th June, 2015 the Board of Directors places on record its appreciation for the valuable contribution made by him during his tenure with the Company. The Composition of the Board and KMP as on date is as under: (1) Shri. Sandeep M. Arora - Managing Director (KMP) (2) Smt. Mridu Arora - Non-executive Director (3) Shri. Manish Nanda - Non-executive Independent Director (4) Shri. Nitin Rane - Non-executive Independent Director (5) Shri. Shivcharan Girker - Chief Financial Officer (KMP) The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company. The following policies of the Company are put up on the website of the Company a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. MEETINGS OF THE BOARD During the year under review, The Board of Directors duly met Seven times on 29th May, 2014; 5th June, 2014; 28th July, 2014; 12th August, 2014; 22nd September, 2014; 12th November, 2014 and 12th February,2015. 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. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive Directors and nonexecutive Directors. The same was discussed in the Board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed. EXTRACT OF ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration), 2014 is furnished in Annexure I and is attached to this Report. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. AUDIT COMMITTEE The Audit Committee comprises of Members namely of Shri. Jaspal Singh Bhasin (Chairman), Shri. Manish Nanda and Shri. Sandeep Arora. All the recommendations made by the Audit Committee were accepted by the Board. However, The Board of Directors re-constituted the Audit Committee after the resignation of Shri. Jaspal Singh Bhasin w.e.f. 12th August, 2015. The Audit Committee now comprises of Members namely Shri. Manish Nanda (Chairman), Shri. Nitin Rane and Shri. Sandeep Arora. AUDITORS The terms of office of M/s. K S Sanghvi and Co., Chartered Accountant as the Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company. M/s. K S Sanghvi and Co. expressed their unwillingness for re-appointment as Auditors of the Company. On the request of the Company M/s. Rohan Agrawal & Co, Chartered Accountant, Mumbai consented to get appointed as the Statutory Auditor of the Company at the ensuing Annual General Meeting. The Company has also received a certificate from M/s. Rohan Agrawal & Co, Chartered Accountant to the effect that their appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013. The members are requested to appoint M/s. Rohan Agrawal & Co, Chartered Accountant in place of M/s. K S Sanghvi and Co and authorize the Board to fix their remuneration. Auditors Emphasis/Remarks/Observations in the Audit Report: a) With regards to Emphasis of Matter in the Auditors Report your Directors like to state as under:- The Company is in process of identifying various opportunities to generate funds for growth and expansions. b) Point No. 9 f. iii. of the Auditors Report is self explanatory. SECRETARIAL AUDITOR The Board has appointed Shri. Prashant Diwan, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure II to this Report. As regards the observations made in Secretarial Audit Report the Directors state as under:- The Company has instructed its bankers to transfer the fund to the Investor Education and Protection Fund Account. However, the Bankers of the Company have not initiated the process of transfer of the funds to the Investor Education and Protection Fund. FIXED DEPOSITS The Company has not accepted any Deposits from the Public during the year. PARTICULARS OF LOANS GIVEN. INVESTMENTS MADE. GUARANTEES GIVEN AND SECURITIES PROVIDED UNDER SECTION 186 OF THE COMPANIES ACT. 2013 The Company has not made any loans or advances or investments or provided securities to other bodies corporate during the year. However, the Company has given Corporate Guarantees of Rs. 4,90,00,000 to M/s. Sonal Impex Ltd during the year which is within limit specified under section 186 of the Companies Act, 2013. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES. There was no contract or arrangements made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review. SUBSIDIARIES. JOINT VENTURES AND ASSOCIATE COMPANIES The Company do not have any Subsidiary, Joint Venture and Associate Company. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure III to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The particulars of employees required to be furnished pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure IV to this Report. However, as per the provisions of Section 136 of the Companies Act, 2013, the Annual Report is being sent to all members of the Company. During the year under review, none of the employees of the Company was in receipt of remuneration aggregating Rs. 60,00,000/- or more per annum, if employed throughout the year, or Rs. 5,00,000/- or more per month, in case employed for part of the year. Hence, there are no particulars to be annexed to this report as required under sub-rules 2 and 3 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CORPORATE GOVERNANCE The Company is committed to good corporate governance in line with the Listing Agreement and Sonal adhesives Limited corporate governance norms. The Company is in compliance with the provisions on corporate governance specified in the Listing Agreement with the Bombay Stock Exchange Limited same is given in the Annexure V which form part of the Directors' Report. A certificate of compliance from Mr. Prashant Diwan, Practicing Company Secretary and the report on Corporate Governance form part of this Directors' Report. MANAGEMENT DISCUSSIONS AND ANALYSIS A brief note on Management Discussions and Analysis of the results for the year under review is given in Annexure VI which forms part of the Directors' Report. CORPORATE RESPONSIBILITY STATEMENT (CSR) Your Directors state that the provisions of Section 135 of the Companies Act, 2013 regarding the provisions Corporate Social Responsibility is not applicable to the Company as the Company is not falling under the said parameters. VIGIL MECHANISM The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report except that the Account of the Company is declared Non Performing Asset by State Bank of India. 2. The Company does not have any Risk Management Policy as the element of risk threatening the Company's existence is very minimal. 3. 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. 4. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENT Your Directors take this opportunity to thank all employees of the Company for their hard work, dedication and commitment and appreciate the co-operation received from the Bankers and other Government authorities during the year under review. For and on behalf of the Board Sandeep Arora Chairman & Managing Director DIN: 00176939 Place: Mumbai Dated: 12th August, 2015 |