FOR THE FINANCIAL YEAR 2016-2017
The Directors have pleasure in presenting the 29th Annual Report of thecompany together with the financial statements for the year ended on 31stMarch 2017.
FINANCIAL PERFORMANCE OF THE COMPANY
During the Financial Year 2016-2017 The Financial position of the Company is as under:
| || || |
(Amount in lakhs)
|PARTICULARS ||STANDALONE ||CONSOLIDATED |
| ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 ||Year Ended 31st March 2017 ||Year Ended 31st March 2016 |
|Total Income ||7505.74 ||6925.98 ||7671.72 ||7065.97 |
|Profit Before Interest ||1168.23 ||979.35 ||1176.41 ||966.99 |
|Depreciation & tax || || || || |
|Interest & Financial Charges ||289.78 ||340.54 ||293.40 ||(344.18) |
|Depreciation ||342.81 ||313.62 ||361 ||(333.99) |
|Profit before Taxation ||535.64 ||325.19 ||522.01 ||288.82 |
|Less: - Provisions for Income Tax ||(110) ||(137.50) ||(110) ||(137.50) |
|Mat Credit adjustments ||(0.38) ||- ||(0.38) ||- |
|Deferred tax Assets/(liabilities) ||65.84 ||24.40 ||65.84 ||24.40 |
|Net profit after tax ||491.10 ||212.09 ||477.47 ||175.72 |
|Equity ||511.63 ||511.63 ||511.63 ||511.63 |
|Earnings Per Share ||9.60 ||4.15 ||9.33 ||3.43 |
Your Directors are pleased to recommend the interim dividend of Rs. 1/ per EquityShare of Rs. 10/ each on 5116300 Equity shares aggregating Rs. 5116300 /(Rupees Fifty One Lakhs Sixteen Thousand Three Hundred only) declared by the Board ofDirectors on 12th November 2016 as the final dividend for the financial year ended 31stMarch 2017.
Taking into account overall financial performances of the Company. Your Directors donot transfer any amount to General Reserve Account.
STATE OF COMPANY'S AFFAIR:
The Company is pleased to inform the shareholders that it has purchased land in theKutch region of the state of Gujarat to set up the latest and most advanced productionfacilities for manufacturing Carton Sealing Tapes for both the domestic and theinternational markets the production of such facilities will commence production by theend of the current financial year.
The total investment in the new project is approximately Rs. 35 crores financialclosure of which has been completed with the support of our existing bankers unsecuredloans and internal accruals of the company.
The Company continues to make efforts to increase the sales of Carton Sealing Tapes inthe domestic markets and other Specialty Adhesive Coated products by providing thecustomers an excellent quality product backed by dedicated customer services.
The company sees a good future in the sales of Carton Sealing Tapes and the acceptanceof the new products developed by the Company for the Indian market and as well expectedgrowth in the FMCG sector in India for all manufactured products and services. The Companycontinues to focus on building its Brand and Image as a quality supplier of AdhesiveCoated Products in India.
The Company has also been developing high value added POF shrink films during thecurrent year. This will enhance the turnover and bring good profits to the Company duringthe next year.
The Company had also strategically invested in a subsidiary company named BaglaWellness Private Limited for promoting wellness and fitness by setting up fitness centersin New Delhi and is also exploring other opportunities in the field of Wellness and Healthcare and the company expects this business to start making profits from the coming years.
CHANGE IN THE NATURE OF BUSINESS
During the financial year under review no changes have occurred in the nature of theCompany's business.
MATERIAL CHANGES BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THE DIRECTOR REPORT:
The Company has committed to plough back the cash accruals in the company for investingin the new expansion project at Kutch region for expanding the operations of cartonsealing tapes for which it has more than 25 years of experience. There have been nomaterial changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year and date of the director report of theCompany to which the financial statements relates.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL
There have been no significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and Company's operations.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENT:
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors and the reviews performed by Management and the relevant BoardCommittees including the Audit Committee the Board is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2016-17.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR AND OTHERMATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178:
The Board has on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report andalso available on the Company website www.bagla-group.com
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:
During the year under Review Your Company has one Subsidiary named Bagla WellnessPrivate Limited. Your Company does not have any associate/joint venture company for theyear ended March 31 2017.
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 financialstatements of the Company's Subsidiaries' Associates' and Joint Ventures in Form AOC-1 isattached as "Annexure A".
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not given any Loan any guarantee and security in connection with aLoan to any other body corporate or person and however the company has made investmentduring the year under review the details of which are referred in Notes to FinancialStatement.
During the year under review your Company did not accept any deposits within themeaning of provisions of Chapter V- Acceptance of Deposits by Companies of the CompaniesAct 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 Companyat the 26th Annual General Meeting held on 12th September 2014 fora period of 3 years commencing from the closure of the 26th Annual generalMeeting till the closure of the 29th Annual General Meeting. Their term asauditors is up to the conclusion of the forthcoming AGM. In accordance with the provisionsof Section 139 of the Act M/s. SPMR & Associates Chartered Accountants (FirmRegistration No. 007578N) are proposed to be appointed as auditors for a period of 5 yearscommencing from the conclusion of this AGM till the conclusion of the 34th AGMof the Company to be held in 2022 subject to ratification of their appointment at everyAGM if so required under the Act.
M/s. SPMR & Associates have consented to their appointment as StatutoryAuditors and have confirmed that their appointment if made will be in accordance withSection 139 read with Section 141 of the Act. Members are requested to approve theappointment of M/s. SPMR & Associates and authorize the Board of Directors tofix their remuneration. The Notes on financial statement referred to in the Auditors'Report are self-explanatory and do not call for any further comments.
(2) SECRETARIAL AUDITORS:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed Mr. Puneet Kumar Pandey a Company Secretary in Practice to undertakethe Secretarial Audit of the Company for the year ended 31st March 2017. The SecretarialAudit Report is annexed as "Annexure B".
The Secretarial Audit Report for the financial year ended 31st March 2017 do notcontain any qualification reservation adverse remark or disclaimer.
(3) INTERNAL AUDITOR
As per section 138 of the Companies Act 2013 the Company is required to have InternalAuditor. In this connection the Board of Directors of the Company has on therecommendation of the Audit Committee approved the appointment of M/s. Navin Sudhir& Associates as the Internal Auditor of the Company.
The paid up Equity Share Capital as on 31st March 2017 was 5.11 Crores. Duringthe year under review the Company has not issued any shares.
The Company has not issued shares with differential voting rights. It has neitherissued employee stock options nor sweat equity shares and does not have any scheme to fundits 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 ofSection 92 read with Rule 12 of the Companies (Management and Administration) Rules 2014for the Financial Year 2016-17 is furnished in "Annexure C" and isattached to this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "ANNEXURED".
CORPORATE SOCIAL RESPONSIBILITY:
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Company has received the necessary declaration from each Independent Directors inaccordance with Section 149(7) of the Companies Act 2013 that he meets the criteria ofindependence as laid out in sub-section (6) of Section149 of the Companies Act 2013.
Pursuant to provisions of Section 152 of Companies Act 2013 and the Articles ofAssociation of the Company Mrs. Urmila Goenka (DIN 01165727) Director of the Company isliable to retire by rotation and being eligible offer herself for re-appointment. Mr.Shri Kishan Mittal (DIN:00810155) who was appointed as the Additional non executiveIndependent director of the Company by the Board with effect from 21st August 2017 andwho holds office under Section 161 of the Companies Act 2013 ("the Act") uptothe date of the forthcoming Annual General Meeting but who is eligible for re-appointmentand in respect of whom the Company has received a notice in writing from a memberproposing his candidature for the office of Director under the provision of Section 160 ofthe Companies Act 2013.
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are -Mr. M.S. Bagla Managing Director Mr. Nakul Bagla Chief FinancialOfficer and Mr. Sarabjeet Singh Dua Company Secretary. There has been no change in thekey managerial personnel during the year
NUMBER OF MEETINGS OF BOARD OF DIRECTORS:
Four meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.
In line with the requirement of Regulation 25(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a meeting of the Independent Directors of theCompany was held on 31ST March 2017 wherein the performance of thenon-independent directors including Chairman was evaluated.
The Board based on the recommendation of the Nomination and Remuneration Committee("NRC") evaluated the effectiveness of its functioning and that of theCommittees and of individual directors by seeking their inputs on various aspects ofBoard/Committee Governance.
The aspects covered in the evaluation included the contribution to and monitoring ofcorporate governance practices participation in the long-term strategic planning andfulfillment of Directors' obligations and fiduciary responsibilities including but notlimited to active participation at the Board and Committee meetings.
The Company being a Listed Company was required to constitute an Audit Committee underSection 177(1) of the Companies Act 2013 and Rule 6 of the Companies (Meetings of Boardand its Powers) Rules 2014. The Composition of the Audit Committee is provided in theCorporate Governance Report forming part of this report. All the recommendations made bythe Audit Committee were accepted by the Board.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Company was required to constitute a Stakeholders Relationship Committee underSection 178(5) of the Companies Act 2013. The Composition of the StakeholdersRelationship Committee is provided in the Corporate Governance Report forming part of thisreport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013read with Rule 7 of Companies (Meetings of Board and its Powers) Rules 2014 and as perthe listing regulations the Company has adopted a Whistle Blower Policy which providesfor a vigil mechanism that encourages and supports its Directors and employees to reportinstances of unethical behavior actual or suspected fraud or violation of the Company'sCode of Conduct or Ethics Policy. It also provides for adequate safeguards againstvictimization of persons who use this mechanism. The policy adopted by the company is alsoposted 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 andRemuneration Committee under Section 178(1) of the Companies Act 2013 and Rule 6 of theCompanies (Meetings of Board and its Powers) Rules 2014. The Composition of theNomination and Remuneration Committee is provided in the Corporate Governance Reportforming part of this report.
Remuneration of the Key Managerial Personnel and Employees of the Company is based onthe performance of the company. Remuneration of the employees are revised on timely basisand based on their performances. The company generally sees the ability and review theperformance 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 inSection 188(1) of the Companies Act 2013 for the Financial Year 2016-17 in the prescribedformat 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 threateningthe Company's existence is very minimal.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review the Company did not receive anycomplaint.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that theyfulfill the criteria of independence as stipulated in Section 149(6) of the Companies Act2013 so as to qualify themselves for their continuance as Independent Directors under theprovisions of the Companies Act 2013 and the relevant rules.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 none of the employees drawing remuneration in excess of the limitsset out in the said Rules.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been enclosed with the report as "ANNEXUREF".
DIRECTORS' RESPONSIBILITY STATEMENT:
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013the 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 312017 the applicable Accounting Standards had been followed along with proper explanationrelating to material departures.
b) for the financial year ended March 31 2017 such accounting policies as mentionedin the Notes to the financial statements have been applied consistently and judgments andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company and of the Profit of the Company for the yearended March 31 2017.
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
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 suchinternal financial controls are adequate and were operating effectively.
f) That proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
The Board appreciates and places on record the contribution made by the employeesduring the year under review. The Board also places on record their appreciation of thesupport and co-operation of all stakeholders particularly shareholders bankers financialinstitutions customers suppliers and business partners.
| ||By order of the Board of Directors of |
| ||HINDUSTAN ADHESIVES LIMITED |
| ||(L.K. BAGLA) |
|Place : New Delhi ||CHAIRMAN |
|Date : 21/08/2017 ||DIN: 01596548 |