TO THE MEMBERS
Your Directors have pleasure in presenting the 12th Annual Report of the Company andthe Annual Accounts for the year ended 31st March 2016.
(Rs. in Lacs)
| ||Standalone ||Consolidated |
|Financial Results ||2016 ||2015 ||2016 |
|Income from operation ||53475.85 ||56074.10 ||57964.76 |
|Other Operating Income ||20.36 ||272.13 ||118.90 |
|Profit before Interest Depreciation and Tax ||5254.38 ||5481.09 ||5425.31 |
|Less: Finance Cost ||761.72 ||960.51 ||845.10 |
|Profit before Depreciation & Tax ||4492.66 ||4520.58 ||4580.21 |
|Less: Depreciation (including amortization) ||1390.50 ||1459.90 ||1394.51 |
|Less: Exceptional and Extraordinary Items ||3.49 ||42.97 ||6.84 |
|Less: Prior Period Expenses || || || |
|Profit Before Tax ||3098.67 ||3017.71 ||3178.86 |
|Tax Expenses ||239.67 ||306.78 ||264.50 |
|Profit After Tax ||2859.00 ||2710.93 ||2914.36 |
OPERATIONAL REVIEW & STATE OF THE COMPANYS AFFAIRS
At Gallantt Ispat we continue to optimise production accross our portfolio to generatemaximum value and remained focused on reducing costs to protect margins. Our strongoperational results reflect the quality of our assets capabilities and resilience tochallenging market conditions. To achieve the sales target in the coming years company hasexpansion plan in Pipeline.
During the year standalone Revenue from Operations stood at Rs. 53475.85 Lacsand Consolidated Revenue from Operations stood at Rs. 57964.76 Lacs Standaloneand Consolidated Net Profit stood at Rs. 2859.00 Lacs and Rs. 2914.36 Lacsrespectively. Earnings per Share (EPS) stood at Rs. 10.13 (standalone) and Rs. 10.32(consolidated) for the Financial Year ended March 31 2016. This is a reflection of thequality of our assets and growing demand for our products across the region. Thisspectacular achievement is the result of goal oriented workings cost effectiveproduction increase in operational efficiency and better working capital management.
Yours Directors are pleased to report a good performance of the Company in terms ofboth financial and operational performance.
During the financial year the Company has altered Memorandum of Association of theCompany. Company has aligned the Memorandum of Association as per the new Companies Act2013. In the Main Object Clause a new Clause 6 has been added after Clause 5 which readsas under: 6. "To carry on the business activities as developers of land coloniessheds buildings structures residential plots commercial plots industrial plots andsheds roads bridges channels culverts and to act as architect designers contractorssub-contractors for all types of constructions and developments work for private sectorgovernment departments semi government departments development authorities and todevelop the sites and plots and to carry on the business activities of acquirerpurchaser repurchase let out lease sell exchange hire or otherwise all types ofland and properties of any tenure or any interest in the same or to erect and constructhouses building multi-stories or work for every descriptions on any land of the companyor upon other land or property and to pull down re-build enlarge alter and improveexisting houses buildings or work thereon and to purchasing and selling of houses andplots free hold or other house property building or lands or interest householdarticles and other products of other companies in the installments network scheme orotherwise." Also Company has amended Clause III B and Clause III C of the Memorandumof Association by deleting the heading of Clause III B "OBJECTS INCIDENTAL ORANCILLARY TO THE ATTAINMENT OF THE MAIN OBJECTS:" and replacing it with the heading "Matterswhich are necessary for furtherance of the objects specified in clause III(A) are:-"
Further Other Object Clause of the Memorandum has been deleted.
Furthermore Company has amended Clause IV of the Memorandum of Association. New ClauseIV of the Memorandum of Association be and is hereby amended and replaced to read asunder:
"The liability of members is limited and this liability is limited to the amountunpaid if any on shares held by them."
Approval of shareholders was obtained through postal ballot and e-voting for aboveamendment in the Memorandum of Association.
Disposal of Flour Mills Units of the Company
Company has sold and transferred two Flour Mills Units of the Company viz. Flour MillsUnit of the Company located at Gram-Mauja- Chipli Thana-Durgavati District-Kaimur(Bhabhua) Bihar (hereinafter referred to as "Bihar Flour Mill") and Flour MillUnit of the Company located at 60 KM Stone Gorakhpur-Lucknow Highway Sabdaiyan KalanBasti Uttar Pradesh (hereinafter referred to as "Basti Flour Mill").
Bihar Flour Mills Unit was sold to Shree Surabhi Wheat Products Private LimitedSubsidiary of the Company. Sale consideration of Rs. 127000000/- (Rupees TwelveCrore Seventy Lacs only) has been received in full by the Company. Basti Flour Mills wassold to Shree Surabhi Flour Mills Private Limited Subsidiary of the Company. Saleconsideration is Rs. 103600000/- (Rupees Ten Crore Thirty Six Lacs only).Company has received in full the amount of consideration.
Company has complied with requisite formalities in this regard.
Sale and Transfer of above plants have been concluded pursuant to the approval of theShareholders of the Company under Section 180(1)(a) of the Companies Act 2013 and allother applicable provisions though Postal Ballot and E-voting. The Company had appointedTanmay Kumar Saha a qualified Independent Company Secretary Kolkata (Membership No.27396) as the Scrutinizer for conducting the Postal Ballot voting process in accordancewith the law and in a fair and transparent manner. The Scrutinizer submitted his reportafter completion of the scrutiny and the results of the postal ballot were announced on29/03/2016 and displayed at the Registered Office of the Company. Resolutions have beenpassed with requisite majority of the shareholders as on date of declaration of result ofthe postal ballot and e-voting.
During the year your Company has declared and paid Interim Dividend of Rs. 1.00(One Rupee only) per Equity Share on 28236072 Equity Shares of Rs. 10 /- eachi.e. 10% on each Equity Share of the company total outgo on account of dividend was Rs.28236072 subject to tax. In view of the ongoing expension plans and new projectsyour Directors have considered it financially prudent in the long term interests of theCompany to reinvest the profits into the business of the Company and as such no furtherdividend has been recommended for the year ended 31st March 2016.
DIRECTORS RESPOSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that: a. In the preparation of the annual accounts the applicable accountingstandards have been followed and there is no material departures from them. b. Thedirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit or loss of the Company for the year under report. c. The directors have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities. d. Thedirectors have prepared the annual accounts on a going concern basis. e. The directors hadlaid down internal financial controls to be followed by the company and that such internalfinancial controls are adequate and were operating effectively. f. The directors haddevised proper system to ensure compliance with the provisions of all applicable laws andthat such system were adequate and operating effectively.
The Equity Shares in the Company are in dematerialized form and is listed with BombayStock Exchange Limited and National Stock Exchange of India Limited. The Listing Fee hasbeen paid to the Stock Exchanges for the year 2016-17. The ISIN No. of the Company isINE528K01011
India Ratings and Research a Fitch Group Company (hereinafter referred to as"India Ratings") "BB+".
During the year the Company has not accepted any deposits from public under Chapter Vof the Companies Act 2013.
AUDITORS & AUDITORS REPORT
M/s. Anoop Agarwal & Co. Chartered Accountants statutory auditors of the Companywas reappointed as the Auditors of the Company at the previous Annual General Meeting. Asper the provisions of Section 139 of the Companies Act 2013 Statutory Auditors of theCompany hold office until the conclusion of the 5 years. Necessary certificate has beenobtained from the Auditors as per Section 139(1) of the Companies Act 2013.
The notes on accounts referred to the Auditors Report are self-explanatory andtherefore do not call for any further explanation.
The Auditors Report is annexed hereto and forms part of the Annual Report. TheAuditors report does not contain any qualifications reservations or adverseremarks.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under section 134(3) (m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure-I to thisDirectors report.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIALRIGHTS
The Company has not issued any Sweat Equity Shares or Equity Shares with DifferentialRights during the financial year.
The Company has submitted the Cost Audit Report and Cost Compliance Report for the year2014-15 duly certified by a Cost Accountant to the Central Government within the due date.M/s. U. Tiwari & Associates Cost Accountants were appointed with the approval of theCentral Government to carry out the cost audit in respect of the Company for the financialyear 2015-16. Based on the recommendation of the Audit Committee M/s. U. Tiwari &Associates Cost Accountants being eligible have also been appointed by the Board as theCost Auditors for the financial year 2016-17.
All the insurable interests of your Company including inventories buildings plant andmachinery and liabilities under legislative enactments are adequately insured.
INTERNAL COMPLAINT REGARDING SEXUAL HARRASSMENT
There were no cases of sexual harassment of woman at work place. Also there are noinstances of child labour/ forced labour/ involuntary labour and discriminatory employmentduring the year.
Details of Audit Committee Nomination & Remuneration Committee StakeholdersRelationship Committee and Corporate Social Responsibility Committee have been disclosedunder Corporate Governance Report.
DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARDALONG WITH REASONS
The same is not applicable as the Audit Committees recommendations were acceptedand implemented by the Board.
PARTICULARS OF EMPLOYEES
Particulars of Employees and Related disclosures No employee of the Company is coveredunder the provisions of Section 197(12) of the Companies Act
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. List of top ten employees is given page no.18.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The particulars of loans guarantees and investments u/s 186 of the Companies Act 2013is annexed herewith as Annexure-II.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aManagement Discussion and Analysis report is part of the Annual Report is annexed herewithas Annexure-III.
A report on Corporate Governance together with the Auditors Certificate regardingthe compliance of conditions of Corporate Governance is part of the Annual Report.
MARKET AND FUTURE PROSPECTS
Please refer to Management Discussion & Analysis Report which forms part of theAnnual Report.
DETAILS OF POLICIES
(i) Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Companys Remuneration Policy is available on the Companyswebsite www.gallantt.com and the same is attached herewith as Annexure - IV.
(ii) Corporate Social Responsibility Policy (CSR)
The Board has on the recommendation of the CSR Committee approved the CSR Policy. TheCompanys CSR Policy is available on the Companys website www. gallantt.com andthe same is also attached herewith as
Annual Report on CSR as required under Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is also attached herewith as Annexure-VI.
(iii) Risk Management Policy
Business Risk Evaluation and Management is an ongoing process within the Organization.Pursuant to Section 134(3)(n) of the Companies Act 2013 the Board has framed a RiskManagement Policy for the Company. The Company has in place a mechanism to identifyassess monitor and mitigate various risks to key business objectives. Major risksidentified by the business and functions are systematically addressed through mitigatingactions on a continuing basis. At present the company has not identified any element ofrisk which may threaten the business (or) existence of the company.
(iv) Whistle Blower Policy Vigil Mechanism
Your Company has formulated a Vigil Mechanism Policy with a view to provide a mechanismfor employees and directors of the Company to approach the Chairman of the Audit Committeeto ensure adequate safeguards against victimisation. This policy would help to create anenvironment wherein individuals feel free and secure to raise an alarm whenever anyfraudulent activity takes place or is likely to take place. It will also ensure thatcomplainant(s) are protected from retribution whether within or outside the organization.The Board has elected Mr. Nitesh Kumar Company Secretary as the Whistle Officer under thevigil mechanism policy. The details of establishment of the Vigil Mechanism Policy isdisplayed on the website of the Company www.gallantt.com under the following weblink:http:// gallantt.com/pdfs/Whistle%20Blower%20Policy/GIL/GIL%20-WHISTLE%20BLOWER%20POLICY.pdf
Mr. Anurag Fatehpuria Practising Company Secretary having office address at 23/1Sita Nath Bose Lane Salkia Howrah has been appointed as Secretarial Auditors of theCompany for the FY ended 31.03.2016. The Secretarial audit report received from theSecretarial Auditors is annexed to this report marked as Annexure - VII and formspart of this report.
ANNUAL EVALUATION OF BOARD COMMITTEES AND INDIVIDUAL DIRECTORS
During the financial year formal annual evaluation of the Board its committees andindividual Directors was carried out pursuant to the Board Performance Evaluation Policyof the Company. The performance of the Board and committees was evaluated after seekinginputs from all the Directors on the basis of the criteria such as Board/ committeeconstitutions frequency of meetings effectiveness of processes etc. The performance ofindividual Directors (including Independent Directors) was evaluated by the Board andNomination & Remuneration committee (excluding the Director being evaluated) afterseeking inputs from all Directors on the basis of the criteria such as thoughtcontribution business insights and applied knowledge. A separate meeting of IndependentDirectors was also held to review the performance of Managing Director performance of theBoard as a whole and performance of the Chairperson of the Company taking into accountthe views of Executive Directors and Non-Executive Directors.
Your Company follows a structured orientation and familiarization programme throughvarious reports/ codes/internal policies for all the Directors with a view to update themon the Companys policies and procedures on a regular basis.
Periodic presentations are made at the Board Meetings on business and performance longterm strategy initiatives and risks involved.
The details of familiarisation programme have been posted in the website of the Companywww.gallantt. com under the weblink: http://gallantt.com/pdfs/Famaliarization/GIL/GIL%20FAMALIALISATION.pdf
CODE OF CONDUCT
Your Company has adopted a Code of Conduct for members of the Board (incorporatingduties of Independent Directors) and the Senior Management. The Code aims at ensuringconsistent standards of conduct and ethical business practices across the Company. YourCompany has received confirmations from all concerned regarding their adherence to thesaid Code. Pursuant to Regulation 17(5) of the Securities & Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 Mr. C. P. AgrawalChairman & Managing Director and Mr. Mayank Agrawal Chief Executive Officer confirmedcompliance with the Code by all members of the Board and the Senior Management.
The full text of the Code is hosted on the Companys website www.gallantt.comunder the weblink: http:// gallantt.com/pdfs/CODE%20OF%20CONDUCT%20GIL. pdf
CODE OF CONDUCT FOR PROHIBITION OF INSIDER TRADING
Your Company has adopted a Code of Conduct as per Securities and Exchange Board ofIndia (SEBI) (Prohibition of Insider Trading) Regulations 1992/2015. All DirectorsDesignated Employees who could have access to the Unpublished Price Sensitive Informationof the Company are governed by the Code. During the year under review there has been duecompliance with SEBI (Prohibition of Insider Trading) Regulations 1992/2015. GallanttIspat Limited - Code for Fair Disclosure are available on the Companys websitewww.gallantt.com under the weblink: http://gallantt.com/pdfs/Code%20of%20conduct%20of%20Insider%20Trading/GIL/ GIL%20CODE%20OF%20CONDUCT.pdf
NUMBER OF MEETINGS OF BOARD AND AUDIT COMMITTEE HELD DURING THE YEAR 2015-2016
Twelve (12) meetings of the Board of Directors of the Company were conducted during thefinancial year and Ten (10) meetings of the Audit Committee of the Board of Directors wereconducted during the financial year. The details of board/committee/shareholders meetingsare provided under the Corporate Governance Report which forms part of the Annual Report.
The Audit committee of the Company as on the date of this report is constituted offollowing Directors:
|Names ||Designation ||Category |
|Mr. P. Kankrania ||Chairman ||Independent |
|Mr. J. N. Dey ||Member ||Independent |
|Mr. R. K. Jain ||Member ||Independent |
REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES ASSOCIATES AND JOINTVENTURE COMPANIES
Pursuant to the provisions of Section 129(3) of the Act a statement containingperformance & salient features of the financial statements of Companyssubsidiaries and associate Companies in Form AOC-1 is attached as
The policies to ensure uniform accounting treatment are prescribed to the subsidiariesof your Company. The accounts of the subsidiary companies are audited and certified bytheir respective Statutory Auditors for consolidation.
COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANYS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR
Companies which have become Companys subsidiaries joint ventures or associateCompanies during the year:
|Sl. No. ||Name ||Status ||Date |
|1 ||Shree Surabhi Wheat Products Private Limited ||Subsidiary Company ||15.02.2016 |
|2 ||Shree Surabhi Flour Mills Private Limited ||Subsidiary Company ||30.03.2016 |
|3 ||Gallantt Metal Limited ||Associate Company ||14.05.2015* |
Gallantt Udyog Limited and Gallantt Ispat Limited (Company) both the entitieswere separately holding Shares in Gallantt Metal Limited. Pursuant to the amalgamation ofGallantt Udyog Limited with the Company shareholding of Gallantt Udyog Limited inGallantt Metal Limited were to be consolidated with that of the Company. Hence postamalgamation your Company (being Transferee Company) hold more than 20% shareholding inGallantt Metal Limited.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators or Courts or Tribunalwhich would impact the going concern status of the Company and its future operations.However Members attention is drawn to the statement on contingent liabilitiescommitments in the notes forming part of the Financial Statements.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
Details of internal financial controls and its adequacy are included in the ManagementDiscussion and Analysis Report which forms part of the Annual Report.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM
The Company has formulated a Whistle Blower Policy to establish a vigil mechanism forDirectors and employees of the Company to report concerns about unethical behavior actualor suspected fraud or violation of the Companys code of conduct or ethics policy.The Whistle Blower Policy is available on the website of the Company. Weblink to accessthe Whistle Blower Policy-Vigil Mechanism given in this report.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility Committee and has frameda Corporate Social Responsibility Policy and identified Healthcare Childrenseducation Road safety and Environmental sustainability as some of the key areas. TheCompany will continue to support social projects that are consistent with the policy.Corporate Social Responsibility Committee of the Company is constituted of: Mr.Jyotirindra Nath Dey Chairman Mr. Chandra Prakash Agrawal and Mr. Prem Prakash Agrawal
KEY MANAGERIAL PERSONNEL
The following are the whole-time key managerial personnel of the Company:
|Sl. No. ||Name ||Designation |
|1 ||Mr. Chandra Preakash Agrawal ||Chairman and Managing Director |
|2 ||Mr. Prem Prakash Agrawal ||Whole-time Director |
|3 ||Mr. Santosh Kumar Agrawal ||Whole-time Director (Director - Sales & Marketing) |
|4 ||Mr. Nitin M Kandoi ||Whole-time Director (Director - Plant Operations) |
|5 ||Mr. Mayank Agrawal ||Chief Executive Officer |
|6 ||Mr. Amit Jalan ||Chief Financial Officer |
|7 ||Mr. Nitesh Kumar ||Company Secretary & Compliance Officer |
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard AS-21 on Consolidated Financial Statementsread with the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theConsolidated Audited Financial Statements and Consolidated Cash Flow Statement for theyear ended March 31 2016 are provided in the Annual Report.
A statement containing the salient features of the financial statements of each of thesubsidiary and Associate Company in the prescribed Form AOC-1 is annexed as - Annexure-VIII.
Pursuant to Section 136 of the Act the financial statements of the subsidiary andAssociate Companies are kept for inspection by the shareholders at the Registered Officeof the Company. The Company shall provide free of cost the copy of the financialstatements of its subsidiary and Associate companies to the shareholders upon theirrequest. The statements are also available on the website of the Company www.gallantt.com. The consolidated net profit of the Company and its subsidiaries &associate amounted to
Rs. 2914.36 Lacs for the financial year 2015-16.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of section 92(3) of the Act the details forming part of theextract of the Annual
Return in Form MGT-9 is annexed herewith as
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the financial year as stipulated underRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is part of the Annual Report and is attached as
Annexure - X. RISK MANAGEMENT
Necessary information is provided under Management Discussion and Analysis Report whichforms part of the Annual Report.
UNPAID AND UNCLAIMED AMOUNT OF DIVIDEND AND SHARE APPLICATION MONEY
Following amount of Unpaid Share Application Money and Unpaid Dividend has not beenclaimed and paid till 31.03.2016 :
|Nature of Money ||Relevant Financial Year ||Bank Account Details ||Amount lying (In Rs. ) |
|Share Application Money ||2010-11 ||HDFC Bank Account No. 00142300001609 ||71900.00 |
|Final Dividend for 2011 ||2010-11 ||HDFC Bank Account No. 00142300001876 ||9929.00 |
|Final Dividend for 2012 ||2011-12 ||HDFC Bank Account No. 00142300002332 ||5419.00 |
|Final Dividend for 2013 ||2012-13 ||IDBI Bank Account No. 0135103000007344 ||17307.00 |
|Final Dividend for 2014 ||2013-14 ||IDBI Bank Account No. 0135103000007900 ||3026.50 |
|Final Dividend for 2015 ||2014-15 ||IDBI Bank Account No. 0135103000008587 ||3109.00 |
|Interim Dividend 2016 ||2015-16 ||ICICI Bank Account No.001105026007 ||12519403.00 |
Unpaid dividend amounts and share application money are not available for use by theCompany. There is no amount due and outstanding to be credited to InvestorsEducation and Protection Fund as on 31.03.2016.
BOARD OF DIRECTORS AND SENIOR EXECUTIVE
There are no changes in the composition of the Board of Directors from the last Report.The Board of Directors comprises of Eight Directors of which four are Independent. Interms Section 152 of the Companies Act 2013 Mr. Nitin M Kandoi liable to retire byrotation at the ensuing Annual General Meeting and eligible for re-election.
Mr. Jyotirindra Nath Dey Mr. Rajesh Kumar Jain Mr. Piyush Kankrania and Mrs. SangeetaUpadhyay are Independent Directors of the Company. Independent Directors are appointed forfive consecutive years and are not liable to retire by rotation in terms of Sections 149152 Schedule IV and other applicable provisions if any of the Companies Act 2013 readwith Companies (Appointment and Qualification of Directors) Rules 2014. Mrs. SangeetaUpadhyay has been appointed as Independent Woman Director. Mr. Mayank Agrawal is ChiefExecutive Officer. Mr. Amit Jalan is Chief Financial Officer and is inter alia lookingafter the core finance function of the Company. Mr. Nitesh Kumar is working in thecapacity of Company Secretary and Compliance Officer. None of the Directors of yourCompany is disqualified under the provisions of Section 164(2)(a) & (b) of theCompanies Act 2013.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR
There is no change in the Directors and Key Managerial Personnel during the year. Allthe Independent Directors have given declarations that they meet the criteria requiredunder section 149(6) of the Companies Act 2013.
TRANSFER TO RESERVES
Your Directors propose to transfer Rs. 2519.16 Lacs to the General Reserve.
RELATED PARTY TRANSACTIONS
The details of Related Party Transactions during the Financial Year ending 31.03.2016being arms length transactions have been reported in the financial statements andforms part of this report. The Audit Committee and the Board of Directors of the Companyhave formulated the Policy on dealing with RPTs and a Policy on materiality of RPTs whichis uploaded on the website of the Company and can be accessed through the website of theCompany www.gallantt.com under the weblink : http://gallantt.com/pdfs/Transaction%20Policy/GIL/GIL%20POLICY%20ON%20RELATED%20 PARTY%20TRANSACTIONS.pdf All Contracts orarrangements with related parties entered into or modified during the financial year wereon an arms length basis and in compliance applicable provision of the Companies Act2013 and the Listing Regulations. All such contracts arrangements have been approved bythe Audit Committee. No Material contracts or arrangements with related parties wereentered into during the year under review. Accordingly the disclosure of Related partytransactions as required under Section 134(3)(h) of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 in form AOC - 2 is not applicable. There are nomaterially significant transaction with related parties which may have potential with theinterest of the Company at large.
ACQUISITION OF SUBSIDIARY AND ASSOCITE COMPANIES
Pursuant to the review and recommendation of the Audit Committee and subsequentapproval of the Board of Directors Company has acquired two subsidiary Companies viz.M/s. Shree Surabhi Wheat Products Private Limited and M/s. Shree Surabhi Flour MillsPrivate Limited. By an order dated May 14 2015 the Honorable High Court at Calcutta hasapproved the Scheme of Amalgamation of Gallantt Udyog Limited (hereinafter referred to as"GUL/Transferor Company") with the Company (your Company is transferee Company).Transferor Company as well as your Company was holding equity shares in Gallantt MetalLimited. Post amalgamation as above shareholding of Transferor Company consolidated withthat of the Company and thereafter the total shareholding of the Company in Gallantt MetalLimited exceeded 20% and hence Gallantt Metal Limited became Associate of the Company.
FINANCE AND ACCOUNTS DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIALSTATEMENTS
Your Company has adequate systems and processes of internal controls which arecommensurate with its size and nature of operations. They have been designed to providereasonable assurance with regard to recording and providing reliable financialinformation complying with applicable statutes safeguarding of assets authorization oftransactions and adherence to the Companys policies and practices.
Effective steps are taken by the Management to enable continuous monitoring of leadcontrol indicators and action taken towards correcting identified gaps. Respectivefunctions have been trained and equipped to enable continuous monitoring of exceptions bythemselves to reduce surprises and enable corrective action on timely and regular basis.
Your Company has a robust financial closure self-certification mechanism wherein theline managers certify adherence to various accounting policies accounting hygiene andaccuracy of provisions and other estimates.
OUTLOOK AND EXPANSION
The recent trend in macro indicators clearly point towards improving fundamentals ofthe domestic economy. The Central Government has also shown its intent in furthering thereform momentum to revive investments and improve governance. The global commodity cycleis expected to be benign with consumption demand from the Chinese economy slowing down.Taking cues from the inflationary trend theReserveBankofIndiahasalreadyeasedthemonetarycycle and is expected to bring out more interest rate cuts going forward. All thisfavorable factors coupled with some of the important developmental reforms that are beingpursued by the Central Government like the tax reform and push for infrastructure spendingwill set the stage for further pick-up in economic activity in 2016-17. This should augurwell for your Companys business across infrastructure.
Your company plans to take the performance to the next level by modernizationinstalling high tech and time saving machinery and supportive systems improving qualityof work by employee training. The expansion plan by further investment in installation ofnew capacities and technology upgradation and modern machinery for increasing the capacityof the existing Units are being implemented. In terms of the sales and profitabilitytargets for the coming years Board of Directors of the Company proposed to modify theplant capacity as under:
Phase I Expansion:
Capacity in MTPA
|Units ||Unit ||Existing Capacity ||Proposed Addition in Capacity ||Total Capacity After Addition |
|Captive Power ||MW ||18 ||35 ||53 |
|DRI ||MT ||99000 ||198000 ||297000 |
|Steel Melt Shop ||MT ||167400 ||162600 ||330000 |
|Rolling Mill ||MT ||162380 ||167620 ||330000 |
Capital and Working Capital requirements for the above expansion are projected at Rs.310.43 Crores.
Phase II Expansion:
Capital Expenditure Projections of Rs. 500 Crores to install a new unit is alsoapproved however shape size location and other relevant factors of new unit shall bedecided in due course of time.
PERSONNEL INDUSTRIAL RELATIONS AND MARKETING
The Companys HR philosophy is to establish and build a high performingorganization where each individual is motivated to perform to the fullest capacity: tocontribute to developing and achieving individual excellence and departmental objectivesand continuously improve performance to realize the full potential of our personnel.Industrial relations have remained harmonious throughout the year.
DECLARATION OF INDEPENDENCE
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
AWARD AND RECOGNITIONS
During the previous years Company we have received following awards andreconciliation:
1. Uttar Pradesh "Udyami Samman 2011" has been awarded by Zee MediaHouse which was presented by Shriprakash Jaiswal Honble Coal Minister CentralGovernment.
2. Awarded "Best Performing Company -2013 in Uttar Pradesh" by Sahara SamayMedia House presented by Shri Akhilesh Yadav Honble Chief Minister of U.P. Duringthe year Company has not received any award.
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 are as under: (a) ratio of theremuneration of each director to the median remuneration of the employees of the Companyfor the financial year;
|Name ||Designation ||Ratio to median remuneration of employees |
|Chandra Prakash Agrawal ||Chairman & Managing Director ||12.41 : 1 |
|Prem Prakash Agrawal ||Whole-time Director ||12.41 : 1 |
|Santosh Kumar Agrawal ||Director (Sales & Marketing) ||12.41 : 1 |
|Nitin M Kandoi ||Director (Plant-Operation) ||12.41 : 1 |
|Jyotirindra Nath Dey ||Independent Director ||N.A.* |
|Rajesh Kumar Jain ||Independent Director ||N.A.* |
|Piyush Kankrania ||Independent Director ||N.A.* |
|Sangeeta Upadhyay ||Independent Director ||N.A.* |
Except sitting fees no remuneration is paid to the Non-executive IndependentDirector.
(b) Percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
|Name ||Designation ||% increase |
|Chandra Prakash Agrawal ||Chairman & Managing Director ||10.00% |
|Prem Prakash Agrawal ||Whole-time Director ||10.00% |
|Santosh Kumar Agrawal ||Director (Sales & Marketing) ||3.86% |
|Nitin M Kandoi ||Director (Plant-Operation) ||23.55% |
|Jyotirindra Nath Dey ||Independent Director ||N.A.* |
|Rajesh Kumar Jain ||Independent Director ||N.A.* |
|Piyush Kankrania ||Independent Director ||N.A.* |
|Sangeeta Upadhyay ||Independent Director ||N.A.* |
|Mayank Agrawal ||Chief Executive Officer ||9.09% |
|Amit Jalan ||Chief Financial Officer ||18.72% |
|Nitesh Kumar ||Company Secretary ||0.00% |
(c) percentage increase in the median remuneration of employees in the financial year:14.04% (d) number of permanent employees on the rolls of company : 296 (367 was total no.of Employees during the year) (e) explanation on the relationship between average increasein remuneration and company performance: The profit before tax for the financial yearended March 31 2016 increased by 2.68% and the profit after tax for the financial yearended March 31 2016 increased by 5.46% whereas the increase in median remuneration is14.04%. The average increase in median remuneration is in line with the performance of thecompany.
(f) comparison of the remuneration of the Key Managerial Personnel against theperformance of the company;
The total remuneration of KMP increased by 10.75% whereas the profit before taxincreased by 2.64% and the profit after tax increased by 5.18%. (g) average percentileincrease already made in the salaries of employees other than the managerial personnel inthe last- financial year and its comparison with the percentile increase in the managerialremuneration and justification thereof and point out if there are any exceptionalcircumstances for increase in the managerial remuneration: 14.09% (non-Managerialpersonnel) and 1.43% (Managerial Personnel) (h) comparison of remuneration of each of theKey Managerial Personnel against the performance of the company;
|Name ||Designation ||% increase ||Comparison |
|Chandra Prakash Agrawal ||Chairman & Managing Director ||10.00% || |
|Prem Prakash Agrawal ||Whole-time Director ||10.00% ||The profit before tax for the financial year ended March 31 2016 increased by 2.68% |
|Santosh Kumar Agrawal ||Director (Sales & Marketing) ||3.86% || |
|Nitin M Kandoi ||Director (Plant-Operation) ||23.55% || |
|Mayank Agrawal ||Chief Executive Officer ||9.09% ||and the profit after tax for the financial year ended March |
|Amit Jalan ||Chief Financial Officer ||18.72% ||31 2016 increased by 5.46%. |
|Nitesh Kumar ||Company Secretary ||0.00% || |
(i) the key parameters for any variable component of remuneration availed by thedirectors;
Companys financial results the performance of the business unit individualperformance skills and competence fulfillment of various improvement targets or theattainment of certain financial objectives.
(j) the ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year : NIL
(k) We hereby affirm that the remuneration paid to the managerial and non-managerialpersonnel is as per the Remuneration Policy of the Company approved at the board meetingdated 30.05.2014.
The Remuneration policy of the Company comprising the appointment and remuneration ofthe Directors Key Managerial Personnel and Senior Executives of the Company includingcriteria for determining qualifications positive attributes independence of a Directorand other related matters has been provided in the Report.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since 31st March 2016 till the date ofthis Report. Further it is hereby confirmed that there has been no change in the natureof business of the Company. However pursuant to the Scheme of Amalgamation of GallanttUdyog Limited with the Company as approved by the Honorable High Court at Kolkata vide itsorder dated May 14 2015 all the assets and liabilities of Gallantt Udyog Limited havebeen transferred to the Company including Real Estate Division. Now Real Estate is a newbusiness division of the Company. In line with the same Company has altered itsMemorandum of Association inter alia to include Real Estate in the main Object of theCompany. Significant and material orders passed by the regulators / courts / tribunalsimpacting the going concern status and the Companys operations in future As suchthere is no significant and material order by the regulator/court/tribunals impacting thegoing concern status and the Companys operation in future.
GENERAL a) Your Company has not issued equity shares with differential rights as todividend voting or otherwise; and b) Your Company does not have any ESOP scheme for itsemployees/Directors.
CHANGE IN SHARE CAPITAL
During the year under review Company has concluded amalgamation of Gallantt UdyogLimited (Transferor Company) with the Company. Pursuant to the Scheme of Amalgamation asapproved by the Honourable High Court at Kolkata vide its order dated May 14 2015 interCompany holding of 10245592 Equity Shares held by Gallantt Udyog Limited in the Companyhas been cancelled. As per the ratio of exchange 9215159 no. of Equity Shares have beenallotted to the shareholders of Gallantt Udyog Limited. Further post amalgamationAuthorised Share Capital of Gallantt Udyog Limited of Rs. 165000000 (RupeesSixteen Crore Fifty Lakh only) has been added with the Authorised Share Capital of theCompany thereby the total Authorised Share Capital of the Company increased from Rs. 300000000/-(Rupees Thirty Crores only) to Rs. 465000000/- (Rupees Forty Six Crore FiftyLakh only).
INTERNAL FINANCIAL CONTROLS
Your Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting are operating effectively based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol. Your Company had laid down guidelines policies procedures and structure forappropriate internal financial controls across the Company. These control processes enableand ensure the orderly and efficient conduct of companys business includingsafeguarding of assets prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and timely preparation & disclosure offinancial statements. Review and control mechanisms are built in to ensure that suchcontrol systems are adequate and operating effectively. The Audit Committee evaluated theinternal financial controls based on the following criteria:
1. Systems have been laid to ensure that all transactions are executed in accordancewith managements general and specific authorisation. There are well-laid manuals forsuch general or specific authorisation.
2. Systems and procedures exist to ensure that all transactions are recorded asnecessary to permit preparation of financial statements in conformity with generallyaccepted accounting principles or any other criteria applicable to such statements and tomaintain accountability for aspects and the timely preparation of reliable financialinformation.
3. Access to assets is permitted only in accordance with managements general andspecific authorisation. No assets of the Company are allowed to be used for personalpurposes except in accordance with terms of employment or except as specificallypermitted.
4. The existing assets of the Company are verified/ checked at reasonable intervals andappropriate action is taken with respect to any differences if any.
5. Proper systems are in place for prevention and detection of frauds and errors andfor ensuring adherence to the Companys policies.
A report on the internal financial controls under clause (i) of sub-section 3 ofSection 143 of the Companies Act 2013 issued by M/s. Anoop Agarwal
& Company Chartered Accountants Statutory Auditors of the Company is attachedwith their Independent Auditors report and the same is self-explanatory.
PARTICULARS OF LOANS/ADVANCES/ INVESTMENTS AS REQUIRED UNDER SCHEDULE V OF THE LISTINGREGULATIONS
The details of related party disclosures with respect to loans/advances/investments atthe year end and maximum outstanding amount thereof during the year as required under PartA of Schedule V of the Listing Regulations have been provided in the notes to the
Financial Statements of the Company.
There have been no frauds reported by the Auditors of the Company to the AuditCommittee or the Board of Directors under sub-section (12) of section 143 of the CompaniesAct 2013 during the financial year.
The Board appreciates the commitment and dedication of its employees across all thelevels who have contributed to the growth and sustained success of the Company. We wouldlike to thank all our customers vendors bankers and other business associates for theircontinued support and encouragement during the year. We also thank the Government ofIndia Government of Uttar Pradesh and all Other Government Agencies for their supportduring the year and look forward to the same in the future.
| ||On behalf of the Board |
|Place : Kolkata ||C. P. Agrawal |
|Date : August 08 2016 ||Chairman |