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Golden Tobacco Ltd.

BSE: 500151 Sector: Consumer
NSE: GOLDENTOBC ISIN Code: INE973A01010
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OPEN 54.85
PREVIOUS CLOSE 52.25
VOLUME 212
52-Week high 86.05
52-Week low 40.00
P/E
Mkt Cap.(Rs cr) 97
Buy Price 54.85
Buy Qty 11990.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.85
CLOSE 52.25
VOLUME 212
52-Week high 86.05
52-Week low 40.00
P/E
Mkt Cap.(Rs cr) 97
Buy Price 54.85
Buy Qty 11990.00
Sell Price 0.00
Sell Qty 0.00

Golden Tobacco Ltd. (GOLDENTOBC) - Director Report

Company director report

To

The Members

Your Directors present the 61st Annual Report along with the audited financialstatements of the Company for the financial year ended March 31 2017.

FINANCIAL HIGHLIGHTS

(` in Lacs)
Particulars Current Year ended 31st March2017 Previous year ended 31st March2016
Profit/(Loss) before Interest Depreciation Exceptional item and Tax (38.09) (1081.98)
(Less):Interest-Net (2657.59) (2470.53)
(Less):Depreciation (86.58) (104.08)
Profit/(Loss) before Taxation (2782.26) (3656.59)
Provision for Taxation NIL NIL
Profit/(Loss) after Taxation (2782.26) (3656.59)
Exceptional Item-Income/(expense) NIL NIL
(Loss) for the year (2782.26) (3656.59)
(Loss) brought forward from previous year (22985.20) (19328.61)
Depreciation charge in useful life NIL NIL
(Loss) carried over to Balance Sheet (25767.46) (22985.20)

PERFORMANCE OF THE COMPANY

During the year the industry volume declined by 5% to 10% which affected the Company'svolume drastically. Increased grey market and illegal cigarettes activities coupled withthe increased excise and VAT are the factors which have adversely affected the organizedsector of legal cigarette industries at large. However the export performance of theCompany increased around twenty percent in terms of volume as well as value in comparisonto previous year mainly in new international market. Further the Company has initiated newmeasures to spread its wings in several other new more international markets with newbrands to increase the export sales in coming years. At the domestic front the Companyhas launched a few more brands during the financial year and is exploring untapped marketsto regain the lost volume.

Recently the Hon'ble ITAT special bench Mumbai has passed the favorable order inrespect of the old outstanding demands for some of the earlier years by which the disputedincome tax liabilities has considerably reduced. Further in respect of remaining yearsdisputed demands the matter has been heard by the ITAT Mumbai and the Company is hopefulto get the favorable order in this regard also.

BIFR STATUS

The Company's net worth is still negative as of the date. However the SICA Act 1985is repealed by central government w.e.f. December 1 2016 and accordingly the Company isno more under the BIFR.

REAL ESTATE BUSINESS

During the year the Hyderabad project has started and is likely to be completed byJuly 2019. With regard to development of the Company's property situated at Vile ParleMumbai the same was could not be proceeded for the development due to attachment by theIncome Tax pursuant to the Hon'ble Supreme Court order dated 12.05.2016. However theCompany is confident to get favorable order from the ITAT Mumbai for the remainingdisputed income tax demand resulted vacation of the attachment and consequent proceedingof real estate business.

DIVIDEND

Your Directors do not recommend any dividend on equity shares of the Company in view ofthe carried forward losses

SHARE CAPITAL:

The paid up Equity Capital of the Company as on March 31 2017 was ` 175880212comprising of 17600802 equity shares of

` 10 each. During the year under review the Company has neither bought back nor issuedany kind of equity shares either by bonus or by right or stock option or sweat equity orotherwise.

FINANCE:

During the year under review your Company continues to focus on judicious managementof its working capital receivables and inventories. Working capital parameters andconsequent obligation towards its bankers could not be fulfilled and lenders due toaccumulated cash losses in the Company. However the management is taking necessary stepsto regularize the same.

DEPOSITS :

The Company has not accepted any deposits within the meaning of section 73 of theCompanies Act 2013 ("the Act") read with the Companies (Acceptance of Deposits)Rules 2014.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

Loans guarantees and investments covered under section 186 of the Act forms part ofthe Notes to the financial statements

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to section188(1) of the Act in the prescribed form AOC-2 are annexed as per Annexure-6 of the Board'sReport.

CORPORATE SOCIAL RESPONSIBILITY ("CSR"):

The Company does not fall in any of the criteria of Corporate Social Responsibility("CSR") as specified in section 135 (1) of the Companies Act 2013 andaccordingly the Company is not required to comply with provisions of section 135 of theAct and rules framed there under.

CORPORATE GOVERNANCE:

The Company is committed to maximize the value of its stakeholders by adopting theprinciples of good Corporate Governance in line with the Act read with Regulation 24 andother applicable clauses of the Listing Regulations. A separate report of CorporateGovernance pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 ("the Listing Regulations") is annexed with the report and forms part ofAnnual Report.

MANAGEMENT DISCUSSION AND ANALYSIS :

Pursuant to Regulation 34 of the Listing Regulations the Management Discussion andAnalysis Report is annexed with the report and forms part of this Annual Report.

ENVIRONMENT OCCUPATIONAL HEALTH AND SAFETY :

Good environment as well as safe & healthy working conditions are at the root ofthe good performance. Your Company has been in a constant quest for providing to itsemployees a very congenial work environment which will in turn add to the performance ofthe Company. Keeping in mind the dynamism in the environment your Company iscontinuously imparting requisite training to its employees in their respective fields ofwork.

Health and safety of our employees is of prime concern to us. The workplace is designedto abate the hazards naturally prone to our product. No accident or any pollution problemwas noticed during the year. Care is taken to ensure that all laws pertaining toenvironment pollution health and safety of employees and other relevant enactments arebeing scrupulously adhered to. Our commitment towards the society in terms of providing aclean and healthy environment is of utmost concern and we pledge to take active efforts topreserve the same.

DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP") :

As per provisions of the Companies Act 2013 Shri A. K. Joshi retires by rotation atthe ensuing 61st AGM and being eligible seeks reappointment. Shri A. K. Joshi ManagingDirector Shri Pawan Kumar Malsaria Chief Financial Officer and Shri Manoj KumarSrivastava Company Secretary of the Company are wholetime Key Managerial Personnel (KMP)of the Company pursuant to the Companies Act 2013.

INTERNAL FINANCIAL CONTROL

The Corporate Governance Policy guides the conduct of the affairs of your Company andclearly delineates the roles responsibilities at each level of its key functionariesinvolved in governance. Your Company has in place adequate internal financial controlswith reference to the Financial Statements. During the year under review no reportablematerial weakness in the operation was observed. Regular audit and review processes ensurethat such systems are reinforced on an ongoing basis. Details in respect of internalfinancial controls and their adequacy are included in the Management Discussion &Analysis Report.

RELATED PARTY TRANSACTIONS:

None of the transactions with related parties falls under the scope of section188 (1)of the Companies Act 2013. There were no materially significant related partytransactions made by the Company with Promoters Key Managerial Personnel (KMP) or otherdesignated persons which may have potential conflict with interest of the Company atlarge. All related party transactions that were entered into during the year under reviewwere on arm's length basis and in the ordinary course of the business. Particulars of thetransactions are available in the financial statement.

DIRECTORS APPOINTMENT AND REMUNERAION POLICY:

The Company's policy is to have an appropriate mix of executive and non executive andindependent director to maintain the independence of the Board and separate its functionof governance and management. As on March 31 2017 the Board consisted of five memberstwo of whom are executive directors and three are independent directors. The Board has onthe recommendation of the Nomination and Remuneration Committee framed a policy forselection and appointment of Directors senior management and their remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters as required pursuant to section 178(3) of the Companies Act 2016. Theremuneration policy is stated in Corporate Governance report which forms part of theannual report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to Regulation 22 of the Listing Regulations read with the Act the Company hasa Vigil Mechanism/Whistleblower Policy to deal with instance of fraud and mismanagementif any in the Company. In staying true to our values of Strength Performance and Passionand in line with our vision of being one of the most respected Company's in India theCompany is committed to the high standards of Corporate Governance and stakeholderresponsibility. The Policy provides that the Company investigates such incidents whenreported in an impartial manner and take appropriate actions to ensure that the requisitestandards of the professional and ethical conduct are always upheld. It is the Company'spolicy to ensure that no employee is victimized or harassed for bringing such incidents tothe attention of the Company. The practice of the whistleblower policy is overseen by theAudit Committee of the Board and no employee has been denied access to the Committee. TheWhistleblower Policy is available on the Company's website www.goldentobacco.in

POLICY AND DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has in place in Anti Sexual Policy in line with the requirements of theSexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal) Act2013 and Rules there under and redressal of complaints of sexual harassment at work place.All employees (permanent contractual temporary trainees) are covered under this policy.During the year under review no complaints were reported to the Board.

AUDITORS:

STATUTORY AUDITORS

In view of retirement of M/s Lodha & Co. Chartered Accountants the statutoryAuditors of the Company at the conclusion of the 61st Annual General Meeting of theCompany the Board has recommended the appointment of M/s Bagaria & Co LLP (formerlyBagaria & Co.) Chartered Accountants as the statutory Auditors of the Company intheir place for a term of five consecutive years from the conclusion of this AGM toconclusion to the conclusion of sixty-sixth AGM to be held on 2022. M/s Bagaria & Co.LLP have consented to their appointment as Statutory Auditors and have confirmed that ifappointed the same will be accordance with Section 139 read with Section 141 of theCompanies Act 2103.

The Auditors report for the financial year 2016-17 does not contain any qualificationsreservations or adverse remark. The Auditor's report is enclosed with the financialstatement in this annual report.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Act and rules framed there under M/sDevesh Vimal & Co. Practising Company Secretaries was appointed as secretarial auditorto conduct the secretarial audit of the Company for the financial year 2016-17.

The secretarial audit report does not contain any qualification reservations oradverse remark. The Board has also appointed M/s Devesh Vimal & Co. as secretarialauditor of the Company for the financial year 2017-18. The Secretarial audit report isenclosed as per annexure-1 which forms part the Board's report.

EXTRACT OF ANNUAL RETURN:

Pursuant to section 92(3) of the Companies Act 2013 read with rule 12 of the Companies(Management and Administration) Rules 2014 the extract of the Annual Return for thefinancial year 2016-17 in form MGT-9 is annexed as per annexure-2 of the Board'sreport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO:

The information on conversation 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 are enclosed as per annexure-3 ofthe Board's report

SUBSIDIARY COMPANIES

The Company is having four Subsidiary Companies i.e. Golden Realty & InfrastructureLtd. Golden Investment (Sikkim) Pvt. Ltd. GTC Inc B.V. and Western Express IndustriesLtd. and Raigadh Papers Limited the fellow subsidiary of Western Express IndustriesLimited as on March 31 2017.

During the financial year the Western Express Industries Ltd. the subsidiary Companyshifted its Registered Office from State of Maharashtra Mumbai to State of Gujarat atVadodara.

Pursuant to section 129(3) of the Companies Act 2013 the Board and the AuditCommittee have reviewed the affairs of the subsidiary companies. There is no AssociateCompany within the meaning of section 2(6) of the Companies Act 2013. There has been nomaterial change in the nature of the business of the subsidiaries. Pursuant to section 136of the Companies Act 2013 the audited financial statement and related information of theCompany and audited accounts of each subsidiaries will be provided on request. Thesedocuments will be available for inspection during business hours at the registered officeof the Company. A statement containing the salient features of the financial statement ofsubsidiaries in the prescribed format AOC-1 is annexed as per annexure 4 whichforms the Board's report.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to Regulation 33 and 34 of the Listing Regulations read with other applicableprovisions the Company has prepared a Consolidated Financial Statements in accordancewith Accounting Standard 21 of the ICAI for the financial year ended March 31 2017annexed to the financial statement of the Company in which forms part of the annualreport.

INDUSTRIAL RELATIONS:

Your Company enjoyed cordial relationship with workers and employees at all levels.

BUSINESS RESPONSIBILITY REPORTING :

Pursuant to the Listing Regulations the Business Responsibility Report (BRR) isapplicable only to top 100 Listed Companies based on the market capitalization of thepreceding financial year i.e. March 31 2017. Accordingly the same is not applicable toyour Company.

HUMAN RESOURCES DEVELOPMENT

Your Company's Human Resources Management Systems and process are aimed to create aresponsive market focused and customer centric and endeavors to move ahead with its mostvaluable resources its employees. Your Company is engaged with a constructiverelationship with employees and always believed that motivated employees are the coresource the competitive advantage and these are the continuous investments providingtraining and development programs an emphasis on productivity and efficiency and underlinesafe working practices etc.

PARTICULARS OF EMPLOYEES:

Pursuant to Section 197(12) of the Companies Act 2013 read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementcontaining the names of employee in the financial year and in receipt of a remuneration of` 1.02 crores or more per annum or posted for part of the year and in receipt of ` 8.5lakhs or more a month enclosed as per annexure 5 of the Board' report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

During the year under review no material significant orders were passed by anyregulator / Hon'ble Courts etc. which would impact the going concern status of theCompany and its future operations. However under Regulation 30 of the Listing Regulationsread with guidance note issued by the SEBI/Stock Exchanges from time to time the Companyhas been reporting all the updates /major cases / litigations and other matters etc. fromtime to time as and when necessary to the Stock Exchanges.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 read with the ListingRegulations the Board carried out an evaluation of its own performance as well as thedirectors individually. The performance of the Board was evaluated by the Board afterseeking inputs from all the directors on the basis of criteria such as Board compositionand structure effectiveness of Board process information and functioning etc. The Boardand Nomination and Remuneration Committee (NRC) reviewed the performance of the individualdirectors. The Chairman of the Board /Committee was also evaluated on the key aspects ofhis roles mainly on Board dynamic and relationship information flow decision makingrelationship with shareholders company performance and strategy tracking Board andCommittee effectiveness etc.

In separate meeting of independent directors performance of Non Independent Directorsperformance of the Board as a whole and performance of the Chairman of the Board wasevaluated taking into account the views of Executive and Non Executive Directorsincluding the performance of the Board its Committees and individual directors.The samewas discussed in the Board meeting that followed in the meeting of the IndependentDirectors.

CERTIFICATE ON CORPORATE GOVERNANCE

Pursuant to requirement of the Listing Regulations a Certificate confirming materialcompliance by the Company with the provisions of Corporate Governance is given by M/s.Lodha & Co. Chartered Accountants Mumbai annexed with the Corporate GovernanceReport which forms part of annual report.

MEETING OF THE BOARD OF DIRECTORS:

During the year under review five meetings of the Board were held i.e. on May 232016 August 12 2016 September 21 2016 November 14 2016 and February 13 2017.Details of meetings of the Board and their attendance are mentioned in the corporategovernance report which farms part of annual report.

DECLARTAION BY INEPENDENT DIRECTORS:

The Company has received necessary declaration from each independent directors undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of independentlaid down in section 149 (6) of the Companies Act 2013 and Regulation 25 of the ListingRegulations.

FAMILIARISATION PROGRAME FOR INDEPENDENT DIRECTORS:

The Company believes that a Board which is well informed/familiarized with theCompany can contribute significantly to effectively discharge its role of trusteeship.All new independent directors inducted into a Board attend an orientation program. Thedetails of familiarization programme are provided in the corporate governance report andalso available on the Company's website..www.goldentobacco.in.

CODE OF CONDUCT OF PREVENTAION OF INSIDER TRADING :

The Board of Directors of the Company has adopted the Insider Trading Policy inaccordance with requirement of the Listing Regulations. The Company has adopted GoldenTobacco Limited - Code of Conduct for Prevention of Insider Trading Policy - 2015 and laysdown guidelines and procedure to be followed and disclosure to be made while dealing withshares of the Company. The policy has been formulated to regulate monitor and ensurereporting of deals of employee and maintain the highest ethical standards of dealing theCompany's securities. The insider trading policy of the Company covering code of practicesand procedures for fair disclosure of unpublished price sensitive information and code ofconduct for Prevention of Insider Trading is available on Company's website.

AUDIT COMMITTEE:

The composition of the Audit Committee is in line with the provisions of Section 177 ofthe Act read with Regulation 18 of the Listing Regulations. The Chairman of the AuditCommittee is an Independent Director. The Audit Committee of the Board providesreassurance to the Board on the existence of an effective internal control environmentthat ensures the efficiency and effectiveness of the operations of the Company andsafeguarding of assets and adequacy of provisions for all liabilities. The details ofmeetings and their attendance are included in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE:

The composition of the Nomination and Remuneration Committee (NRC) is in line with thesection 178 of the Companies Act 2013 read with the Listing Regulations. The Committee isto determine overall Company's Policy on remuneration packages and other terms andconditions of the appointment of the Executive Directors and senior management of theCompany and sitting fees to the Non Executive Directors of the Company and also to approvepayment of remuneration to Managing Directors or Whole Time Directors as decided by themembers of the Company and recommends to the Board of Directors for their considerationand approval. The details of meetings and their attendance are included in the CorporateGovernance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The composition of the Stakeholders Relationship Committee (SRC) is in line with thesection 178 of the Companies Act 2013 and the Listing Regulations. The Committee is tolook after the Stakeholders grievances and redressal of investors' complaints related totransfer of shares non receipt of balance sheet non receipt of dividend etc. The detailsof meetings and their attendance are included in the Corporate Governance Report.

RISK MANAGEMENT COMMITTEE:

The composition of the Risk Management Committee is not applicable to your Company.However the Company has voluntarily constituted the Risk Management Committee (RMC) whichis in line with the section 134(3) of the Act read with regulation 21 of the ListingRegulations. The Company has framed Risk Management Policy which inter-alia coversfinancials operational regulatory and Legal and product and market risk etc. and toformulate a procedure for mitigation of risk which may threaten the existence of theCompany. The details of meeting and their attendance are included in the CorporateGovernance Report.

DIRECTORS'RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

b) the Director have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for the year under review;

c) the Director have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Director have prepared the annual accounts on a going concern basis; and

e) the Director have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) the Director have devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively;

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 review performed by the management and the Audit Committeethe Board is of the opinion that the Company's internal financial controls were adequateand effective during the financial year 2016-17.

ACKNOWLEDGEMENTS:

Your Directors express their deep gratitude and sincere appreciation for thewhole-hearted assistance and co-operation extended to the Company by the BankersFinancial Institutions Business associates Employees and all the Shareholders of theCompany who have continued to repose utmost faith in the Company.

For and on behalf of the Board

Bharat B. Merchant A. K. Joshi
Independent Director Managing Director

 

Place : Mumbai
Date : May 29 2017