Hindustan Adhesives Ltd.
|BSE: 514428||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE074C01013|
|BSE 00:00 | 06 Feb||249.15||
|NSE 05:30 | 01 Jan||Hindustan Adhesives Ltd|
|Mkt Cap.(Rs cr)||128|
|Mkt Cap.(Rs cr)||127.56|
Hindustan Adhesives Ltd. (HINDADHESIVE) - Director Report
Company director report
The Directors have pleasure in presenting the 34th AnnualReport of the company together with the financial statements for the year ended on 31stMarch 2022.
FINANCIAL PERFORMANCE OF THE COMPANY:
During the Financial Year 2021-2022 The Financial position of theCompany is as under:
(Amount in Lakhs)
Results of Operations and the state of Company?s affairs KeyHighlights of Financial performance
During the period under review the turnover of the Company hasincreased to Rs. 449.08 Crores as against Rs. 213.65 Crores in the financial year 2021-22and earned profit of Rs. 12.52 Crores in the year 2021-22 as compared to profit of Rs.8.75 Crores in the previous year 2020-21.
To conserve the funds for the business of the Company including thefunding for the expansion plans your directors regret their inability to recommend anydividend for the financial period 2021-22.
Taking into account overall financial performances of the Company yourDirectors have not transferred any amount to General Reserve Account.
STATE OF COMPANY?S AFFAIR:
The Company is pleased to present the results for the financial year2021-22 with substantial increase in sales and as well as profits. Normalcy in businessactivities also resumed as the Pandemic has now reduced the disruptions in businessglobally.
The Company has completed all its planned expansions to increase thecapacities of its manufacturing unit in the Kutch region of the state of Gujarat formanufacturing BOPP Packaging Tapes for the international markets and is now making effortsto explore newer markets so as to utilize100% capacity in the overseas markets during thenext financial year for its expanded capacity.
The Company also continues to make efforts to increase the sales ofCarton Sealing Tapes in the domestic markets and other Specialty Adhesive Coated productsby providing the customers an excellent quality product backed by dedicated customerservices from its unit located in north India.
The Company had also developed sustainable self adhesive tapes forcarton sealing for the domestic markets in line with the needs of our customers and ispleased to inform you that the new products have been well accepted in the markets and thecompany foresees good overall growth of business during the current financial year in bothoverseas and as well domestic markets.
CHANGE IN THE NATURE OF BUSINESS:
During the financial year under review no changes have occurred in thenature of the Company?s business.
MATERIAL CHANGES BETWEEN THE END OF FINANCIAL YEAR AND DATE OF THEDIRECTOR REPORT:
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear and date of the director report of the Company to which the financial statementsrelates.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL:
There have been no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and Company?soperations.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITHREFERENCE TO THE FINANCIAL STATEMENT:
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the InternalStatutory and Secretarial Auditors and the reviews performed by Management and therelevant Board Committees including the Audit Committee the Board is of the opinion thatthe Company?s internal financial controls were adequate and effective during thefinancial year 2021-22.
COMPANY?S POLICY ON DIRECTORS? APPOINTMENT AND REMUNERATIONINCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF ADIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178:
The Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy for selection and appointment of Directors Senior Managementand their remuneration. The Remuneration Policy is stated in the Corporate GovernanceReport and also available on the Company website www.bagla-group.com.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:
During the year the company has no subsidiary or associate company orjoint venture.
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has duly complied with the provisions of Section 186 of theAct and as required therein the details of the Borrowers Security Investment etc. areannexed by way of notes to accounts.
During the year under review your Company did not accept any depositswithin the meaning of provisions of Chapter V- Acceptance of Deposits by Companies of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014. TheCompany had taken unsecured loan of Amount of Rs. 14000000 from Managing Director. Thesaid Director had submitted a declaration that said unsecured load were provided to theCompany out of his own fund.
AUDITORS AND AUDITORS? REPORT:
(1) STATUTORY AUDITORS:
The Report given by M/s. Rajan Goel & Associates CharteredAccountants (Firm Registration No: 004624N) Statutory Auditors on the financialstatements of the Company for the Financial year 2021 -22 is part of Annual Report. TheNotes on financial statements referred to in Auditor?s Report are self-explanatoryand do not call for any further comments. There has been no qualification reservation oradverse remark or disclaimer in their Report on Financial Statement for F.Y. 2021-22.
(2) SECRETARIAL AUDITORS:
a) Pursuant to the provisions of Section 204 of the Act and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors of the Company had appointed Mr. Puneet Kumar
Pandey a Company Secretary in Practice to undertake the SecretarialAudit of the Company for the year ended 31stMarch 2022. The Secretarial AuditReport is annexed as "Annexure A".
b) CERTIFICATE BY PRACTICING COMPANY SECRETARY
The secretarial Auditor of the company M/s Puneet Pandey &Associates has issued a certificate that none of Director on the Board of the Company havebeen Debarred or disqualified from being appointed or continuing as a directors of theCompanies by the board/Ministry of Corporate Affairs or any such statutory authority. Thecertificate is attached as "ANNEXURE B".
(3) INTERNAL AUDITOR
As per section 138 of the Companies Act 2013 the Company is requiredto have Internal Auditor. In this connection the Board of Directors of the Company has onthe recommendation of the Audit Committee approved the appointment of M/s SJC & Co.Chartered Accountants (Firm Registration No. 031696N)as the Internal Auditor of theCompany.
(4) COST AUDITOR
Pursuant to Section 148 of the Companies Act 2013 read with therelevant rules made thereunder or any amendments thereof the Company is required tomaintain cost records and accordingly such accounts and records are made and maintained bythe Company in respect of its business activity and the same is required to be audited.Your Board had upon the recommendation of the Audit Committee appointed M/s JSN &CO. Cost Accountants to audit the cost accounts of the Company for the Financial Year2022-23 at a remuneration of upto 75000 (Rupees Seventy Five Thousand) plus taxes andout-of-pocket expenses. As required under the Companies Act 2013 the remunerationpayable to the cost auditor is required to be placed before the members in a generalmeeting for ratification.
Accordingly a resolution seeking Member?s ratification for theremuneration payable to M/s JSN & CO. Cost Auditors is included in Notice conveningthe Annual General Meeting. The Notes referred to in the Cost Auditors? Report areselfexplanatory and do not call for any further comments.
The Cost Auditors? Report does not contain any qualificationreservation or adverse remark.
REPORTING OF FRAUD BY AUDITORS
During the year under review neither the statutory auditors nor theSecretarial Auditors has reported to the Audit Committee under section 143(12) of theCompanies Act 2013 any instance of fraud committed against the Company by its officer oremployees the details of which would need to be mentioned in the Board's Report.
The paid-up Equity Share Capital as on 31st March 2022 was Rs.51163000. During the year under review the Company has not issued any shares.
The Company has not issued shares with differential voting rights. Ithas neither issued employee stock options nor sweat equity shares and does not have anyscheme to fund its employees to purchase the shares of the Company.
Pursuant to section 134(3)(a) and section 92(3) of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 theannual return of the Company as at March 312022 can be accessed through the web linkwww.bagla-group.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO:
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as"ANNEXURE C".
CORPORATE SOCIAL RESPONSIBILITY:
Corporate Social Responsibility (CSR) is a way of conducting businessby which corporate entities visibly contribute to the
social good. The essence of CSR is to integrate economic environmentaland social objectives with the Company?s operations and growth. CSR is the process bywhich an organization thinks about and evolves its relationships with society for
the common good and demonstrates its commitment by giving back to thesociety for the resources it used to flourish by adoption of appropriate businessprocesses and strategies.
In accordance with the provisions of section 135 of the Act read withthe Companies (Corporate Social Responsibility policy) Rules 2014 the annual report onCorporate Social Responsibility activities is given at "Annexure- D" to thisReport.
The details of CSR Committee meetings and attendance of the membersthere at are provided in the Corporate Governance Report and forms part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Company has received the necessary declaration from eachIndependent Directors in accordance with Section 149(7) of the Companies Act 2013 thathe meets the criteria of independence as laid out in sub-section (6) of Section 149 of theCompanies Act 2013.
Pursuant to provisions of Section 152 of Companies Act 2013 and theArticles of Association of the Company Mrs. Urmila Goenka (DIN: 01165727) Whole-TimeDirector of the Company is liable to retire by rotation and being eligible offer himselffor re-appointment.
Pursuant to the provisions of section 203 of the Act the keymanagerial personnel of the Company are -
1. Mr. Madhusudan Bagla Managing Director
2. Mr. Suresh Ajila Whole Time Director
3. Mrs. Urmila Goenka Whole Time Director
4. Mr. Ashok Kumar Pathak Whole Time Director
5. Mr. Nakul Bagla Chief Financial Officer and
6. Mr. Sarabjeet Singh Dua Company Secretary.
During the Year Company has appointed Mr. Ashok Kumar Pathak as wholetime Director and Mr. Ravi Kumar Aggarwal as Non-executive Independent Director of theCompany.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS:
Thirteen meetings of the board were held during the year. For detailsof the meetings of the board please refer to the corporate governance report which formspart of this report.
In line with the requirement of Regulation 25(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a meeting of the IndependentDirectors of the Company was held on 30th March 2022 wherein the performance of thenon-independent directors including Chairman was evaluated.
The Board based on the recommendation of the Nomination andRemuneration Committee ("NRC") evaluated the effectiveness of its functioningand that of the Committees and of individual directors by seeking their inputs on variousaspects of Board/Committee Governance.
The aspects covered in the evaluation included the contribution to andmonitoring of corporate governance practices participation in the long-term strategicplanning and fulfillment of Director?s obligations and fiduciary responsibilitiesincluding but not limited to active participation at the Board and Committee meetings.
The Company being a Listed Company was required to constitute an AuditCommittee 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 isprovided in the Corporate Governance Report forming part of this report. All therecommendations made by the Audit Committee were accepted by the Board.
STAKEHOLDERS RELATIONSHIP COMMITTEE:
The Company was required to constitute a Stakeholders RelationshipCommittee under Section 178(5) of the Companies Act 2013. The Composition of theStakeholders Relationship Committee is provided in the Corporate Governance Report formingpart of this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
Pursuant to the provisions of Section 177 (9) & (10) of theCompanies Act 2013 read with Rule 7 of Companies (Meetings of Board and its Powers)Rules 2014 and as per the listing regulations the Company has adopted a Whistle BlowerPolicy which provides for a vigil mechanism that encourages and supports its Directorsand employees to report instances of unethical behavior actual or suspected fraud orviolation of the Company?s Code of Conduct or Ethics Policy. It also provides foradequate safeguards against victimization of persons who use this mechanism. The policyadopted 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 aNomination and Remuneration Committee under Section 178(1) of the Companies Act 2013 andRule 6 of the Companies (Meetings of Board and its Powers) Rules 2014. The Composition ofthe Nomination and Remuneration Committee is provided in the Corporate Governance Reportforming part of this report.
Remuneration of the Key Managerial Personnel and Employees of theCompany is based on the performance of the company. Remuneration of the employees arerevised on timely basis and based on their performances. The company generally sees theability and review the performance of the candidate before the appointment of theDirector.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
With reference to Section 134(3)(h) of the Act all contracts andarrangements with related parties under Section 188(1) of the Act entered by the Companyduring the financial year were approved by the Audit Committee and wherever requiredalso by the Board of Directors. No contract or arrangement required approval ofshareholders by a resolution.
Further during the year the Company had not entered into any contractor arrangement with related parties which could be considered material? (i.e.transactions exceeds rupees one thousand crore or ten percent of the annual consolidatedturnover whichever is lower as per the last audited financial statements entered intoindividually or taken together with previous transactions during the financial year)according to the policy of the Company on materiality of Related Party Transactions.
Further there were no transactions undertaken during the year whichwere not at an arms? length basis hence the disclosure under Form AOC-2 is notapplicable to the Company.
During the year under review the policy on Materiality of the RelatedParty Transactions and on dealing with the Related Party Transactions was amended to alignit with the amendments in the listing Regulations.
Members may refer to Note No. 48 of the Standalone Financial Statementswhich sets out related party disclosures pursuant to Ind AS.
RISK MANAGEMENT POLICY:
The Board reviews the risks faced by the Company and formulates riskmanagement and mitigation procedures from time to time which are also reviewed to ensurethat executive management controls risk through means of a properly defined framework. Themajor risks have been identified by the Company and its mitigation process/measures havebeen formulated
in the areas such as business customer service market litigationlogistics project execution financial human resources environment and statutorycompliance.
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 withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. During the year under review the Company did not receive anycomplaint.
The Company complies with all applicable mandatory secretarialstandards issued by the institute of Company Secretary of India.
DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Boardthat they fulfill the criteria of independence as stipulated in Section 149(6) of theCompanies Act 2013 so as to qualify themselves for their continuance as IndependentDirectors under the provisions of the Companies Act 2013 and the relevant rules.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
During the year under review no employee whether employed for the wholeyear or part of the year was drawing remuneration exceeding the limits as laid down underSection 197(12) of the Companies Act 2013 read with Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014.
The information required pursuant to Section 197 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of Employees of the Company will be provided upon request. In terms of Section136 of the Act the reports and accounts are being sent to the members and others entitledthereto excluding the information on employees? particulars which is available forinspection by the members at the Registered Office of the Company during business hours onworking days of the Company up to the date of ensuing Annual General Meeting. If anymember is interested in inspecting the same such member may write to the CompanySecretary in advance.
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 has been enclosed withthe report as "ANNEXURE E".
INSOLVENCY AND BANKRUPTCY CODE
a) There is no proceeding pending under the Insolvency and BankruptcyCode 2016.
b) There was no instance of onetime settlement with any Bank orFinancial Institution.
DIRECTORS? RESPONSIBILITY STATEMENT:
Accordingly pursuant to Section 134 (3) (c) and 134 (5) of theCompanies Act 2013 the Board of Directors to the best of their knowledge and abilityconfirm that:
a) In the preparation of the annual financial statements for the yearended March 31 2022 the applicable Accounting Standards had been followed along withproper explanation relating to material departures.
b) for the financial year ended March 31 2022 such accountingpolicies as mentioned in the Notes to the financial statements have been appliedconsistently and judgments and estimates that are reasonable and prudent have been made soas to give a true and fair view of the state of affairs of the Company and of the Profitof the Company for the year ended March 312022.
c) That proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
d) The annual financial statements have been prepared on a goingconcern basis.
e) That proper internal financial controls were followed by the Companyand that such internal financial controls are adequate and were operating effectively.
f) That proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.
The Board appreciates and places on record the contribution made by theemployees during the year under review. The Board also places on record their appreciationof the support and co-operation of all stakeholders particularly shareholders bankersfinancial institutions customers suppliers and business partners.