DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the Twenty Fourth Annual Report together with the Audited Financial Statements for the Financial Year ended 31st March, 2015. FINANCIAL PERFORMANCE During the year under review, your Company has recorded revenue from operations of Rs. 466 crores as against Rs. 271 crores in the previous year. Operating profit has increased to Rs. 41.13 crores as against Rs. 29.18 crores of previous year.The Net profit (after tax and extra ordinary items) for the financial year ended 31st March, 2015 is Rs. 6.78 crores as against Rs. 3.74 crores in the previous year. DIVIDEND Your Directors are pleased to recommend for approval of the shareholders, dividend of Rs. 0.90 per share (at the rate of 9%), (Previous year Rs. 0.90 per share), on the Equity Shares of the Company for the year ended 31st March, 2015. The proposed dividend on Equity Share Capital will absorb Rs. 1.65 crores including Dividend Distribution Tax of Rs. 0.28 crores. TRANSFER TO RESERVES During the year under review, no amount has been transferred to General Reserve. SCHEME OF AMALGAMATION The Board of Directors of the Company on 12th November, 2014 approved a Scheme of Amalgamation ("the Scheme") for merger of Clear Mipak Packaging Solutions Limited (CMPSL), a subsidiary of the Company into the Company with effect from 1st April, 2014 ("Appointed Date") to simplify the group structure by elimination of multiple entity with a view to consolidate the businesses and lead to synergies in operations. The Hon'ble High Court of Bombay, vide its Order dated 20th November, 2015 sanctioned the scheme of amalgamation of CMPSL into the Company. The Appointed Date being 1 st April, 2014, the financials for the year under review have been prepared after giving effect to the Scheme of Amalgamation. AGM EXTENSION Pending receipt of Order from Hon'ble High Court of Bombay with regard to the Petition made by the Company for sanction of Scheme of Amalgamation for merger of Clear Mipak Packaging Solutions Limited, a subsidiary of the Company, and in response to the application made by the Company, the Registrar of Companies, Maharashtra, Mumbai had granted extension of period for holding the Annual General Meeting of your Company for three months i.e. upto 30th December, 2015. MANAGEMENT DISCUSSION AND ANALYSIS In compliance with clause 49 of the Listing Agreement a separate section on the Management Discussion and Analysis giving details of overall industry structure, developments, performance and state of affairs of Company's business, forms an integral part of this Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL (a) Appointments In Compliance with the provisions of Section 149, 152, Schedule IV and other applicable provisions if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Rameshchandra Gandhi, Mr. Harish N. Motiwalla Mr. Rajnikant B. Desai and Mr. Jayendra R. Shah were appointed as Independent Directors on the Board of Directors of your Company at the 23rd AGM held on 13th September, 2014 to hold office upto 5 (five) consecutive years commencing from 1st April, 2014 to 31st March, 2019. During the financial year 2014-15, the Board of Directors appointed Mrs. Gool M. Kotwal as an Additional Director (Independent) for a period of five consecutive years commencing from 14th October, 2014 to 13th October, 2019. Her appointment as an Independent Director was subsequently confirmed by the Shareholders through postal ballot process on 15th April, 2015. (b) Resignations / Retirements During the year, Mr. A.V.S. Murthy, Non-Executive Director, Mr. Rameshchandra Gandhi, Non-Executive Independent Director and Mrs. Ina Dani, a Non-Executive Promoter Director, resigned from the Board of your Company with effect from 25th April, 2014, 31st March, 2015 and 30th June, 2015 respectively. The Board places on record its appreciation for their valuable contribution during their association with your Company. In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Ashwin R. Nagarwadia, a Non-Executive Director, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Appropriate Resolution for his re-appointment is being placed for your approval in the ensuing AGM. The brief resume of the aforesaid Director and other related information have been detailed in the Notice convening the 24th AGM of your Company. Your Directors recommend his re-appointment as a Non-Executive Director of your Company. (c) Key Managerial Personnel During the year Mr. Satish Samant, Chief Financial Officer, resigned with effect from 2nd July, 2014 and Mr. Bharat Gosalia was appointed as the Chief Financial Officer of the Company with effect from 3rd July, 2014. Mr. Malav Dani, Managing Director, Mr. Bharat Gosalia, Chief Financial Officer and Mrs. Namita Tiwari, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time. (d) DECLARATION OF INDEPENDENCE All Independent Directors 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, as amended from time to time. (e) FAMILIARISATION PROGRAMME Whenever any person joins the Board of the Company as a Director, an induction programme is arranged for the new appointee, wherein the appointee is familiarised with the Company, his/her roles, rights and responsibilities in the Company, the code of conduct to be adhered, nature of the industry in which the Company operates and the business model of the Company. The details of such familiarisation programmes has been disclosed on the Company's website at www.hitechgroup.com (f) BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 read with Rules issued thereunder and Clause 49 of the Listing Agreement, the Board of Directors on recommendation of the Nomination & Remuneration Committee has evaluated the effectiveness of the Board/Director(s) for the financial year 2014-15. AUDIT COMMITTEE The Audit Committee of your Company comprises of three (3) Members viz. Mr. Harish N. Motiwalla a Non-Executive Independent Director as the Chairman, Mr. Ashwin Nagarwadia a Non-Executive Director and Mr. Jayendra R. Shah, a Non-Executive Independent Director, as Members. NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE The details of the number of the Meetings of the Board and Audit Committees are set out in the Corporate Governance Report which forms part of this Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT 9 in accordance with Section 92 (3) of the Companies Act. 2013 read with Companies (Management and Administration) Rules, 2014 are set out herewith as "Annexure A". CORPORATE GOVERNANCE In compliance with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditors' certificate on its compliance, forms an integral part of this Report. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 15,17,57,000. Pursuant to the provisions of Section 62(1)(c ) and all other applicable provisions of the Companies Act, 2013 and pursuant to the provisions of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR) and other applicable provision of SEBI Regulations/ Guidelines as in force, the Company had issued and allotted 20,00,000 (twenty lacs) Equity Shares of Rs. 10/-each and 20,00,000 (twenty lacs) Convertible Warrants of Rs. 10/- each at issue price of Rs. 57.00 each to some Members of Promoter Group under preferential issue. Each Convertible Warrant is convertible into One Equity Share of Rs. 10/- each on exercise of Conversion option within 18 (eighteen) months from the date of allotment. Pursuant to the Scheme ofAmalgamation of CMPSL with the Company under Section 391 to 394 of the Companies Act, 1956 sanctioned by the Hon'ble Bombay High Court on 20th November, 2015, the Company will issue and allot 3,09,44,164, 9% Non Convertible Redeemable Preference Shares of Rs. 10/- each fully paid up to the shareholders of CMPSL in the ratio of 173 (one hundred seventy three) Preference Shares for every 10 (Ten) Equity shares of the face value of Rs. 10/- of CMPSL. LISTING OF SHARES The Company's equity shares are actively traded on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSEIL). Further, the applicable listing fees for the financial year 2015-16 has been paid to the Stock Exchange(s). AUDITORS AND THEIR REPORT Statutory Auditors The Members of the Company at its 23rd Annual General Meeting held on Saturday, 13th September, 2014 had appointed M/s Manubhai & Shah, Chartered Accountants (Firm Reg. No: 106041W) as Statutory Auditors of the Company for a term of five (5) years, subject to the ratification of their appointment by the members at every Annual General Meeting. A Resolution for ratification of appointment of M/s Manubhai & Shah, Chartered Accountants (Firm Reg. No: 106041W) as Statutory Auditors of the Company is being placed for the approval of members in the ensuing Annual General Meeting. They have confirmed their eligibility to the effect that their appointment, if ratified and confirmed, would be within the prescribed limits under the Companies Act, 2013 and rules made there under and that they are not disqualified to be Auditors of your Company. As required under Clause 49 of the Listing Agreement, M/s Manubhai & Shah, Chartered Accountants, have also confirmed that they hold a valid certificate issued by Peer Review Board of ICAI, There are no qualifications contained, in the Statutory Auditors' Report and therefore there are no further explanations to be provided for in this report. Cost Auditors As the Companies (Cost Records and Audit) Rules, 2014 are not applicable to your Company, the Company has not appointed any Cost Auditor for the financial year 2014-15. Internal Auditors During the year, M/s. Shashank Patki and Associates, Chartered Accountants, Pune and M/s. J. V. Ramanujam & Co., Chartered Accountants, Chennai have been appointed as the Internal Auditors of the Company. The Audit Committee of the Board of Directors, Statutory Auditors and the Management are periodically apprised of the Internal Audit findings and corrective actions are taken. Secretarial Auditors 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 M/s. Nilesh Shah & Associates, Company Secretaries, Mumbai, to conduct the Secretarial Audit of your Company for the financial year ended March 31, 2015. The Secretarial Audit Report is annexed herewith as 'Annexure B' to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178(3) of the Act. The Nomination & Remuneration Policy is annexed herewith as "Annexure C". PREVENTION OF SEXUAL HARASSMENT POLICY During the year the Company has formulated a policy on Prevention of Sexual Harassment of Women at Workplace pursuant to the provisions of Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Company did not receive any such complaints during the year. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Sexual Harassment Policy of the Company is displayed on the Company's website under the weblink: www.hitechplast.in/pdf/ Policies/Sexual-Harrasment-Policy VIGIL MECHANISM / WHISTLE BLOWER POLICY The Company has adopted a 'Whistle Blower Policy' with an objective to conduct its affairs in a fair and transparent manner and by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. The Company has established mechanism for reporting concerns about unethical behaviour, actual or suspected fraud, violation of Code of conduct and Ethics. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website through the following link: <http://www.hitechplast.in/pdf/viigil-mechanism-and-whitle-blower->policy.pdf CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company has constituted a Corporate Social Responsibility (CSR) Committee comprising of three Members viz; Mr. Malav Dani, Managing Director, as Chairman, Mrs. Gool M. Kotwal, an Independent Director and Mr. Ashwin R. Nagarwadia a Non-Executive Director as Members. The Committee has formulated a CSR Policy for your Company and on recommendation of the Committee the Board has approved the said Policy. The CSR Policy of the Company and the relevant report as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended from time to time have been disclosed in 'Annexure - D' to this Report During the financial year 2014-15, the Company was required to spend an amount of Rs. 20.23 lacs on the CSR activities pursuant to provisions of Section 135 of the Companies Act, 2013. This being the first year, your Company has initiated steps, earmarked the areas and shortlisted the implementing agencies to incur expenditure for CSR initiatives in the coming years through specified programmes and projects. The Company is committed to actively engage and spend in accordance with Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is appended hereto as 'Annexure - E' and forms part of this Report. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A and 205C of the Companies Act, 1956), dividends pertaining to the financial year 200607 amounting to Rs. 1,19,534/- which remained unpaid or unclaimed for a period of 7 years were transferred by the Company to the Investor Education and Protection Fund. PARTICULARS OF EMPLOYEES The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company has been disclosed in 'Annexure F' DEPOSIT The deposits accepted by the Company under the provisions of the Companies Act, 1956 have been refunded by the Company and as on 31st March, 2015, there were no amount outstanding as deposits. Further, during the year under review the Company has accepted deposits from its Directors in compliance with the provisions of Section 73 of the Companies Act, 2013 and rules made thereunder. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS There have been no Loans, Guarantees and Investments under Section 186 of the Act during the financial year 2014-15. RELATED PARTY TRANSACTION During the financial year 2014-15, your Company has entered into various transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014 which were in its ordinary course of business and on arm's length basis. Your Company's Sales transaction to Asian paints Ltd. qualify as material Related Party Transaction (RPT) under the Listing Agreement. All the RPTs were undertaken in accordance with the provisions of the Companies Act, 2013, Rules made thereunder and Clause 49 of the Listing Agreement. The Audit Committee and the Board of Directors of the Company have formulated a Policy on dealing with RPTs and a Policy on materiality of Related Party Transactions which is uploaded on the website of the Company and can be accessed through the following link: <http://www>. hitechplast.in/pdf/related-party-transaction-policy.pdf The details of the related party transactions as required under Accounting Standard - 18 are set out in Note 41 to the financial statements forming part of this Annual Report Form AOC - 2 pursuant to Section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as 'Annexure G' to this Report. INTERNAL FINANCIAL CONTROLS Your Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weaknesses in the design or operation were observed. RISK MANAGEMENT Pursuant to Section 134 of the Companies Act, 2013, the Company has a risk management policy in place for identification of key risks to our business objectives, impact assessment, risk analysis, risk evaluation, risk reporting and disclosures, risk mitigation and monitoring, and integration with strategy and business planning. SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant/ material orders passed by any of the Regulators or Courts or Tribunals impacting the going concern status of your Company or its operations in future. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY There were no material changes and commitments affecting the financial position of the Company during the year under review except merger of a subsidiary company into the Company as sanctioned by Hon'ble High Court Judicature of Bombay and as stated above. CHANGE IN NATURE OF BUSINESS There were no change in the nature of business of the Company during the year under review. NAMES OF COMPANIES WHICH HAVE BECOME / CEASED TO BE SUBSIDIARIES, JVs OR ASSOCIATES DURING THE YEAR In view of Hon'ble High Court Judicature of Bombay Order dated 20th November, 2015, sanctioning the Scheme of Amalgamation for merger of Clear Mipak Packaging Solutions Limited (CMPSL) into the Company with Appointed date as 1st April, 2014, CMPSL ceased to be the subsidiary of the Company. GENERAL Your Company; a) has not issued Shares having differential rights as to dividend. Voting or otherwise and b) does not have any ESOP Scheme for its employees/Directors. HUMAN RESOURCE The Company has always perceived its Manpower as its biggest strength. The emphasis was on grooming in-house talent enabling them to take higher responsibilities. The Employee relations continue to be cordial at all the divisions of the Company. Your Directors place on record their deep appreciation for the contribution of the employees at all levels. Their dedicated efforts and enthusiasm have been integral to your Company's steady performance. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 (3) (c) of the Companies Act, 2013, the Directors confirm that: a. in the preparation of the annual accounts, for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31st March, 2015 and of the profit and loss of the Company for the financial year ended 31st March, 2015; c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. the annual accounts have been prepared on a going concern basis; e. proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and were operating effectively and; f. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively; ACKNOWLEDGEMENTS Your Directors wish to express their appreciation and gratitude to all the employees at all levels for their hard work, dedication and cooperation during the year. Your Directors wish to express their sincere appreciation for the excellent support and co-operation extended by the Company's shareholders, customers, bankers, suppliers, regulatory & government authorities and all other stakeholders. For and on Behalf of the Board of Directors ASHWIN S. DANI Chairman DIN: 00009126 Place: Mumbai Date: 30th November, 2015 Regd. Office: Unit No. 201, 2nd Floor, Welspun House, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai - 400072 Tel.: 022 4001 6500 Fax. : 022 2495 5659 E-mail: investor.help@hitechgroup.com website: www.hitechgroup.com CIN: L28992MH1991PLC168235 |