FOR THE FINANCIAL YEAR 2018-2019
The Directors have pleasure in presenting the 31st Annual Report of thecompany together with the financial statements for the year ended on 31stMarch 2019.
FINANCIAL PERFORMANCE OF THE COMPANY:
During the Financial Year 2018-2019 The Financial position of the Company is as under:
| || ||(Amount in Lakhs) |
|PARTICULARS ||Year Ended 31st March 2019 ||Year Ended 31st March 2018 |
|Gross Sales and Other Income ||14238 ||7656 |
|Earnings before interest taxes depreciation and amortization ||1480 ||912 |
|Profit/(loss) before depreciation and amortization exceptional item and tax ||932 ||649 |
|Depreciation and Amortization ||577 ||313 |
|Profit / (Loss) before tax ||355 ||336 |
|Provision for tax ||118 ||87 |
|Net Profit// (Loss) ||237 ||249 |
|Earning Par share ||5.00 ||4.88 |
|Propose dividend on Equity Share ||- ||- |
|Tax on Dividend ||- ||- |
To conserve the funds for the business of the Company including the funding for theexpansion plans your directors regret their inability to recommend any dividend for thefinancial period 2018-19.
Taking into account overall financial performances of the Company your Directors havenot transferred any amount to General Reserve Account.
STATE OF COMPANY'S AFFAIR:
The Company is pleased to inform the shareholders that it has started unit in the Kutchregion of the state of Gujarat for manufacturing BOPP Packaging Tapes mainly for theinternational markets the production of such facilities has been commenced and thecompany is making maximum efforts to sell 100% capacity in the overseas markets.
The total investment in the new project was 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 also continues to make efforts to increase the sales of Carton SealingTapes in the domestic markets and other Specialty Adhesive Coated products by providingthe customers an excellent quality product backed by dedicated customer services from itsunit located in north India.
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 developed high thickness 50-micron POF shrink films in line withthe government advisory to use film of higher thicknesses which will be helpful in wastecollection and recycling.
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:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and date of thedirector report of the Company 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 2018-19.
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 the company has no subsidiary or associate company.
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 has not acquired by way of subscriptionpurchase or otherwise the securities of any other body corporate.
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:
The Report given by M/s. Rajan Goel & Associates Chartered Accountants (FirmRegistration No: 004624N) Statutory Auditors on the financial statements of the Companyfor the Financial year 2018-19 is part of Annual Report. The Notes on financial statementsreferred to in Auditor's Report are self explanatory and do not call for any furthercomments. There has been no qualification reservation or adverse remark or disclaimer intheir Report on Financial Statement for F.Y. 2018-19.
(2) SECRETARIAL AUDITORS:
(a) Pursuant to the provisions of Section 204 of the Act and The Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors of theCompany had appointed Mr. Puneet Kumar Pandey a Company Secretary in Practice toundertake the Secretarial Audit of the Company for the year ended 31st March2019. The Secretarial Audit Report is annexed as "Annexure A".
(b) The secretarial Auditor of the company Mr. Puneet Kumar Pandey has issued acertificate that none of Director on the Board of the Company have been Dabarred ordisqualified from being appointed or continuing as a directors of the Companies by theboard/Ministry of Corporate Affairs or any such statutory authority.
(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 2019 was 5.12 Crores. During theyear 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 2018-19 is furnished in "Annexure-B" 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 "ANNEXUREC".
CORPORATE SOCIAL RESPONSIBILITY:
Corporate Social Responsibility (CSR) is a way of conducting business by whichcorporate entities visibly contribute to the social good. The essence of CSR is tointegrate economic environmental and social objectives with the Company's operations andgrowth.CSR is the process by which an organization thinks about and evolves itsrelationships with society for the common good and demonstrates its commitment by givingback to the society for the resources it used to flourish by adoption of appropriatebusiness processes and strategies.
In accordance with the provisions of section 135 of the Act read with the Companies(Corporate Social Responsibility policy) Rules 2014 the annual report on CorporateSocial Responsibility activities is given at "Annexure- D"to this Report.The CSR committee comprises two Non-executive Independent Directors Namely Shri. AmitKumar and Shri.Pawan Sharma and One Executive Director namely Shri M. S. Bagla.
The details of CSR Committee meetings and attendance of the members there at areprovided in the Corporate Governance Report and forms part of this Report.
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 Section 149 of the Companies Act 2013.
a) Pursuant to provisions of Section 152 of Companies Act 2013 and the Articles ofAssociation of the Company Mr. Suresh Shridhar Ajila (DIN: 03203748) Director of theCompany is liable to retire by rotation and being eligible offer himself forre-appointment.
b) Amit Kumar (DIN: 06902856) was appointed as an independent director at theTwenty-sixth Annual General Meeting (AGM) held on September 12 2014 for a period of fiveyears. Based on the recommendation of the Nomination and Remuneration Committee hisre-appointment for a second term of five years is proposed at the ensuing AGM for theapproval of the Members by way of special resolution.
c) Mr. Pawan Kumar Gupta (DIN: 08506390) was appointed as additional and independentdirectors with effect from July 12 2019. A resolution seeking shareholders' approval forhis appointment forms a part of the Notice.
d) As per the provisions of Sections 196 197 of the Companies Act 2013 read withCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 Mr.Madhusudan Bagla was re-appointed as Managing Director of the Company for a period of 3years w.e.f 1st April 2019 subject to approval in this Annual General Meeting.
Pursuant to the provisions of section 203 of the Act the key managerial personnel ofthe Company are - Mr. Madhusudan Bagla Managing Director Mr. Nakul Bagla ChiefFinancial Officer and Mr. Sarabjeet Singh Dua Company Secretary. There has been no changein the key managerial personnel during the year.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS:
Eleven 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 30th March 2019 wherein the performance of the non-independentdirectors 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 Director's 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 companywww.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 2018-19 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 312019 the applicable Accounting Standards had been followed along with proper explanationrelating to material departures.
b) for the financial year ended March 31 2019 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 2019.
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 |
| ||SURESH AJILA ||MADHUSUDAN BAGLA |
|Date: 13.08.2019 ||(WHOLE-TIME DIRECTOR) ||(MANAGING DIRECTOR) |
|Place: New Delhi ||DIN: 03203748 ||DIN: 01425646 |