(For the Financial Year ended 31st March 2017)
To The Members
Your Directors have pleasure in presenting the Fortieth Annual Report along withAudited Financial Statements of the Company for the year ended 31st March 2017.
n FINANCIAL SUMMARY:
| || ||( ` in la khs) |
|Particulars ||Year ended 2016-2017 ||Year ended 2015-2016 |
|Revenue from Operations (Including Excise Duty) ||86871.64 ||82920.35 |
|Profit subject to Depreciation & Taxation ||13596.71 ||10014.72 |
|Less: Depreciation net of transfer from Revaluation Reserve ||1413.23 ||1310.49 |
|Profit Before Tax ||12183.48 ||8704.23 |
|Less: Provision for Taxation || || |
|Current Tax ||3603.70 ||2021.00 |
|Deferred Tax ||252.60 ||583.00 |
|Previous year excess / (short) tax provision ||-- ||(87.40) |
| ||3856.30 ||2516.60 |
|Profit After Tax ||8327.18 ||6187.63 |
n 2016-2017 THE YEAR UNDER REVIEW:
Your Company earned revenue of ` 868.72 crores for the year ended 31st March 2017 asagainst ` 829.20 crores of previous year. Domestic Sales amounted to ` 457.34 crores andthe Export Sales amounted to ` 411.38 crores for the year ended 31st March 2017.
In the year under review the Indian economy continued to grow at an impressive rate. Arelatively good monsoon led to increase in the agriculture growth-rate. However thiscould not translate into demand for our products due to delays in subsidies and variousregulatory issues. Growth in the industrial sector was moderate. The inflation rateremained fairly stable. The global economy was marked by some signs of recovery.Short-term fluctuations in the rupee were an issue of concern but your Company could meetthis challenge comfortably due to its conservative hedging policies.
Despite all challenges your Company recorded impressive performance maintaining itsrecord of growth and profitability. Your Company earned Net Profit After Tax of ` 83.27crores 34.58% higher than the figure recorded in the previous year.
The operations of the Company are elaborated in the annexed Management Discussionand Analysis Report.
Your Directors do not propose to transfer any amount to the General Reserve and retain` 30955.55 lakhs in the Statement of Profit and Loss.
To commemorate completion of 40 years of the Company your Directors have recommended aspecial one-time dividend of ` 1.50 (15%) per share of ` 10 each in addition to normaldividend of ` 3.50 (35%) per share of ` 10 each for your consideration at ensuing AnnualGeneral Meeting of the Company. The total proposed dividend for the year including normaldividend and special one-time dividend aggregating to a total dividend of ` 5.00 (50%) pershare of ` 10 each would absorb an amount of ` 1316.84 lakhs (including dividend tax of `222.74 lakhs).
In terms of the revised Accounting Standard (AS) - 4 'Contingencies and Eventsoccurring after Balance Sheet date' as notified by the Ministry of Corporate Affairsthrough amendments to Companies (Accounting Standards) Amendment Rules 2016 dated 30thMarch 2016 your Company has not accounted proposed dividend as liability for the yearended 31st March 2017.
The Dividend as recommend by the Board of Directors if approved by the Shareholders ofthe Company will be paid to the eligible members within the stipulated time.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
CHANGE IN THE NATURE OF BUSINESS IF ANY:
There was no change in the nature of business of your Company during the Financial Yearended 31st March 2017.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the Financial Year of the Company i.e. 31st March 2017 andthe date of this Directors' Report i.e. 24th May 2017.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review Mr. V R. Garware (DIN 00092201) was re-appointed as aManaging Director of the Company designated as Chairman & Managing Director of theCompany for a period of five (05) years effective from 1st December 2016 as per the termand conditions as approved by the Members of the Company in Thirty-Ninth Annual GeneralMeeting of the Company.
Mr. Subbarao Venkata Murukutla Director (DIN 02099059) resigned from the Board of theCompany effective from 21st April 2017 (closure of business hours) due to personalreasons. Your Directors placed on record their appreciation of the valuable servicesrendered by him.
Pursuant to Section 161 of the Companies Act 2013 read with Article 101 of theArticles of Association of the Company Dr. Shridhar Shrikrishna Rajpathak (DIN 00040387)was appointed as Director liable to retire by rotation with effect from 24th May 2017 tofill the casual vacancy caused by resignation of Mr. M. V. Subbarao. Dr. ShridharShrikrishna Rajpathak holds office upto the date of the ensuing Annual General Meeting ofthe Company i.e. 4th August 2017. He retires by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible offers himself for re-appointment. The detailsof Director being recommended for re-appointment as required under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and as per Secretarial Standard- 2 of General Meeting are contained in the accompanying Notice calling Fortieth AnnualGeneral Meeting of the Company which forms part of this Annual Report.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. V. R.Garware Chairman & Managing Director Mr. S. H. Bamne Chief Financial Officer andMr. Sunil Agarwal Company Secretary and Compliance Officer are discharging the functionsand responsibilities of whole-time Key Managerial Personnel of the Company.
During the Financial Year 2016-17 there has been no change in the Key ManagerialPersonnel of the Company.
DECLARATION BY INDEPENDENT DIRECTORS:
Declarations under sub-section (7) of Section 149 of the Companies Act 2013 receivedfrom all Independent Directors meeting the criteria of independence as provided insub-section (6) of Section 149 of the Companies Act 2013 have been taken on record bythe Board of Directors of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT:
Your Directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and pursuant to the provisions of Section134(3)(c) read with Section 134(5) of the Companies Act 2013 hereby state and confirmthat:
1. In the preparation of the Annual Financial Statements for the year ended 31st March2017 the applicable Accounting Standards have been followed;
2. For the Financial Year ended 31st March 2017 such Accounting Policies as mentionedin the Notes to the Financial Statements have been applied consistently and judgments andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company and of the Profit and Loss of the Company forthe year ended 31st March 2017;
3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities in accordance with the provisions of the Companies Act 2013;
4. The Annual Financial Statements have been prepared on a Going Concernbasis;
5. Proper Internal Financial Controls were followed by the Company and that suchInternal Financial Controls are adequate and were operating effectively; and
6. Proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
ANNUAL EVALUATION BY THE BOARD:
In view of the provisions of the Companies Act 2013 and considering the Guidance Notedated 5th January 2017 issued by the Securities and Exchange Board of India(SEBI) the Nomination & Remuneration Committee of the Board has laid downcomprehensive framework including the criteria for evaluation of performance of the Boardas a whole and various committees of the Board and individual Directors includingIndependent Directors.
Based on such comprehensive framework the Board of Directors of the Company hadcarried out Annual Evaluation of the performance of the Board as a whole the Directorsindividually and also the working of its Audit Committee Nomination & RemunerationCommittee Corporate Social Responsibility Committee and Stakeholder RelationshipCommittee.
On collation of all the responses feedback was provided by Chairman of the Board tothe each member of the Board.
The Board noted the evaluation results that were collated and presented to the Board.
The Nomination and Remuneration Committee has also carried out evaluation of everyDirector's performance.
The Directors expressed their satisfaction with the evaluation process.
A separate meeting of Independent Directors was held on Monday 13th February 2017inter alia to:
i. Review the performance of Non-Independent Directors and the Board as a whole;
ii. Review the performance of the Chairperson of the Company taking into account theviews of Executive Director and Non-Executive Directors; iii. Assess the quality quantityand timeliness of flow of information between the Company management and the Board thatwas deemed necessary for the Board to effectively and reasonably perform their duties.
NUMBER OF MEETINGS OF THE BOARD:
There were four (04) meetings of the Board of Directors held during the year detailsof which are given in the annexed Corporate Governance Report.
COMPOSITION OF THE COMMITTEES OF THE BOARD:
The details relating to the composition of Audit Committee Nomination and RemunerationCommittee Corporate Social Responsibility Committee and Stakeholders RelationshipCommittee are given in the annexed Corporate Governance Report.
At the Thirty-Seventh Annual General Meeting of the Company the Members had approvedthe appointment of M/s. Patki and Soman Chartered Accountants Pune (Firm RegistrationNo. 107830W) as the Statutory Auditors to hold office till the conclusion of FortiethAnnual General Meeting. The tenure of office of M/s. Patki and Soman CharteredAccountants as Statutory Auditors of the Company will expire with the conclusion ofFortieth Annual General Meeting of the Company and M/s. Patki and Soman CharteredAccountants are not eligible for re-appointment in terms of Section 39 (2) of theCompanies Act 2013.
The Board of Directors places on record its appreciation to the services rendered byM/s. Patki and Soman as Statutory Auditors of the Company.
The Board of Directors has at its meeting held on Wednesday 24th May 2017 on therecommendation of the Audit Committee made its recommendation for the appointment of M/s.Mehta Chokshi & Shah Chartered Accountants Mumbai (Firm Registration No. 106201W)as Statutory Auditors of the Company in place of M/s. Patki and Soman subject to approvalby the Members at the ensuing Annual General Meeting of the Company.
The Company has received from M/s. Mehta Chokshi & Shah Chartered AccountantsMumbai a written consent and a certificate that they satisfy the criteria provided underSection 141 of the Companies Act 2013 and that the appointment as the Statutory Auditorsof the Company if made shall be in accordance with the applicable provisions of theCompanies Act 2013 and Rules framed thereunder.
The Members are requested to approve the appointment of M/s. Mehta Chokshi & ShahChartered Accountants Mumbai (Firm Registration No. 106201W) as Statutory Auditors ofthe Company from the conclusion of the ensuing Annual General Meeting of the Company tillthe conclusion of the Forty-Fifth Annual General Meeting of the Company.
STATUTORY AUDITORS' REPORT:
There are no audit qualifications reservations or adverse remarks or disclaimers inthe Auditors' Report as annexed elsewhere in this Annual Report.
COST AUDIT AND COST COMPLIANCE:
In accordance with the provisions of Companies (Cost Records and Audit) Rules 2014notified on 30th June 2014 and as amended vide Notification dated 31st December 2014Cost Audit for the Financial Year 2016-17 was applicable to the Company. M/s. Joshi Apte& Associates Cost Accountants (Firm Registration No. 000240) were appointed as CostAuditor for conducting audit of Cost Accounting Records maintained by the Company for theFinancial Year 2016-17.
The Audit Report for the Cost Accounting records maintained by the Company for theFinancial Year 2016-17 is under preparation and the same will be filed with the CentralGovernment within the prescribed time limit.
M/s. Joshi Apte & Associates Cost Accountants (Firm Registration No. 000240) werere-appointed as Cost Auditor for conducting an audit of Cost Accounting Records maintainedby the Company for the Financial Year 2017-18.
SECRETARIAL AUDIT REPORT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard of Directors of the Company had appointed M/s. SVD & Associates CompanySecretaries (CP No. 965) as Secretarial Auditor for the year ended 31st March 2017.
The Secretarial Auditor has submitted its Report in Form No. MR-3 for the FinancialYear ended 31st March 2017 and the same is set out in Annexure 1forming part of this Report. The same does not contain any qualifications reservations oradverse remarks or disclaimers.
M/s. SVD & Associates Company Secretaries (CP No. 965) were appointed asSecretarial Auditors to carry out the audit of the Secretarial and related records of theCompany for the year ended 31st March 2018.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
The Company has not provided any Guarantee during the Financial Year 2016-17attracting the provisions of Section 186 of the Companies Act 2013 read with theCompanies (Meetings of Board and its Powers) Rules 2014.
Details of loans given and investments made during the Financial Year 2016-17 underthe provisions of Section 186 of the Companies Act 2013 read with the Companies (Meetingsof Board and its Powers) Rules 2014 are given in the notes to Financial Statements.
RELATED PARTY TRANSACTIONS:
All the transactions with Related Parties entered during the Financial Year 2016-17 bythe Company were in the ordinary course of business and on arm's length basis.
There were no Material Related Party Transaction(s) made with the Related Party as perRegulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
All Related Party Transactions were placed before the Audit Committee for their priorapproval. The Policy on Related Party Transactions as approved by the Board is uploaded onthe Company's website: http://www.garwareropes.com/party-transactions-policy.html.
Pursuant to the provisions of Section 134(3)(h) of the Companies Act 2013 Form AOC-2is not applicable to the Company.
INTERNAL FINANCIAL CONTROLS:
Internal Financial Controls laid down by your Company with reference to the FinancialStatements are adequate and operating effectively.
The Board of Directors of the Company has approved the Policy relating to remunerationfor the Directors Key Managerial Personnel Senior Management based on recommendation ofNomination & Remuneration Committee of the Board.
The salient aspects covered in the Policy have been outlined in the CorporateGovernance Report which forms part of this report.
RISK MANAGEMENT POLICY:
The Company recognizes the importance of Risk Management and hence the Board ofDirectors of the Company has adopted Risk Assessment and Minimization Policy Statement.This Policy Framework has been adopted as a fundamental part of the business policy tocounter and combat the adverse consequential effects of various risks.
Risk Management involves the following:
l Identification of risks. l Evaluation of the risks as to likelihood and consequences.l Assessment of options for minimising / covering the risks. l Preparation of RiskManagement Plan. l Action Plan for the implementation of the Risk Management Plans. lReview of the Risk Management efforts.
The Board of Directors of the Company regularly review the risk and initiatives takenwithin framework of Risk Assessment and Minimization Policy Statement and accordinglytake necessary corrective actions if required for managing / mitigating the same.
The Board of Directors has formulated a Vigil Mechanism Policy which is in compliancewith the provisions of Section 177 (10) of the Companies Act 2013 and Regulation 22 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 details ofwhich are given in the annexed Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility) Rules 2014 your Company has establishedCorporate Social Responsibility (CSR) Committee and an Annual Report on CSR Activitiesforming part of the Directors' Report is given at Annexure 2.
THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGSAND OUTGO:
Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 pertaining to theConservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo is setout in Annexure 3 forming part of this report.
EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Sections 134(3)(a) and 92(3) of the Companies Act 2013read with Rule 12 of the Companies (Management & Administration) Rules 2014 anextract of Annual Return as of 31st March 2017 in Form No. MGT-9 is set out in Annexure4 forming part of this report.
The relations with employees at all levels continued to be cordial throughout the year.
PARTICULARS OF EMPLOYEES:
The information required pursuant to the provisions of Section 197 of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is set out in Annexure 5 forming part of thisreport.
DETAILS OF EMPLOYEE WELFARE TRUST SET UP FOR THE BENEFIT OF EMPLOYEES:
Your Company on 16th October 2006 constituted a Trust named as GWRL ManagerialStaff Welfare Trust to implement the Welfare Scheme for the benefit of itsManagerial Employees. The Said Scheme in compliance of the provisions of the Securitiesand Exchange Board of India (Share Based Employee Benefit) Regulations 2014.
The Details as required by Regulation 14 of the Securities and Exchange Board of India(Share Based Employee Benefit) Regulations 2014 are uploaded on the Company's website:http://www.garwareropes.com/stock-exchange.html.
THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013:
Your Company has zero tolerance towards any action on the part of any employee whichmay fall under the ambit of Sexual Harassment at workplace and is fullycommitted to uphold and maintain the dignity of every woman employee working in theCompany.
There was no case filed / pending with the Company during the Financial Year 2016-17under the said Act.
CONSOLIDATED FINANCIAL STATEMENTS:
Pursuant to the provisions of Section 129 of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 and applicable Accounting Standards the Company hasprepared a Consolidated Financial Statement of the Company its Subsidiary and AssociateCompany in the same form and manner as that of the Company which shall be laid before theensuing Annual General Meeting of the Company along with the laying of the Company'sStandalone Financial Statement.
The Annual Report of the Company inter alia contains the Audited Financial Statement ofthe Company and Consolidated Audited Financial Statement of the Company and its Subsidiaryand Associate Company.
Pursuant to the provisions of Section 136 of the Companies Act 2013 the AuditedFinancial Statements of the Company Consolidated Financial Statements along with relevantdocuments and separate Audited Financial Statements in respect of its Subsidiary andAssociate Company are also placed on the Company's website:www.garwareropes.com/financial-reports.html.
The Audited Financial Statements of the Subsidiary Associate Company and the relateddetailed information will be made available to any member of the Company / its Subsidiaryand Associate Company who may be interested in obtaining the same. The Audited FinancialStatements of the Subsidiary and Associate Company will also be kept for inspection by anyMember at the Company's Registered Office and that of the Subsidiary and AssociateCompanies.
SUBSIDIARY AND ASSOCIATE:
Garware Environmental Services Private Limited is the wholly owned subsidiary of yourCompany. This Subsidiary Company is yet to start its commercial operations.
Garware Meditech Private Limited is an associate of your Company and presently nothaving any business activity.
Pursuant to provisions of first proviso of sub-section (3) of Section 129 of theCompanies Act 2013 a Statement containing salient features of the Financial Statement ofits Subsidiary and Associate Company in Form No. AOC-1 is attached to the FinancialStatement.
Pursuant to Regulation 34 read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governance aswell as the Auditor's Certificate regarding compliance of conditions of CorporateGovernance is set out in Annexure which forms part of this report.
The Report on Corporate Governance also contains certain disclosures required under theCompanies Act 2013.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:
There are no significant and material orders passed by Regulators / Courts / Tribunalsthat would impact the going concern status of the Company and its future operations.
Your Directors gratefully acknowledge the support given by the Customers DealersDistributors Suppliers Bankers various departments of the Central and StateGovernments Local Authorities and also the Members of the Company.
Your Directors would further like to record their appreciation for the unstintedefforts put in by all Employees of the Company during the year.
| ||On behalf of the Board of Directors |
| ||V. R. GARWARE |
|Pune ||Chairman & Managing Director |
|24th May 2017 ||DIN 00092201 |