Goldstone Technologies Limited
Your Directors have pleasure in presenting the Twenty Second Annual Report of yourCompany and the Audited Financial Accounts for the year ended on March 31 2016.
Financial Results :
(Rs. in Millions)
| ||Standalone ||Consolidated |
|Particulars ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Net Sales/Income from Operations ||237.44 ||290.66 ||519.83 ||697.18 |
|Total Expenses ||237.60 ||244.46 ||523.56 ||642.49 |
|Profit from Operations before Other Income Interest Depreciation & Exceptional Items ||(0.16) ||46.20 ||(3.73) ||54.69 |
|Other Income ||2.34 ||1.88 ||2.60 ||11.09 |
|Profit before Interest Depreciation & Exceptional Items ||2.18 ||48.08 ||(1.13) ||65.78 |
|Interest ||2.49 ||1.01 ||2.53 ||1.05 |
|Depreciation ||46.04 ||47.61 ||46.04 ||47.65 |
|Profit after Interest but before || || || || |
|Exceptional Items ||(46.35) ||(0.54) ||(49.70) ||17.08 |
|Exceptional Items ||- ||- ||- ||- |
|Profit before Tax ||(46.35) ||(0.54) ||(49.70) ||17.08 |
|Tax expenses ||(37.84) ||36.01 ||(37.89) ||42.90 |
|Net Profit/(Loss) after Tax ||(8.51) ||(36.55) ||(11.81) ||(25.82) |
|Extraordinary Items (Net of Tax) ||0.14 ||1.45 ||0.14 ||1.45 |
|Net Profit for the period ||(8.65) ||(38.00) ||(11.95) ||(27.27) |
|Equity Share Capital (18782066 Shares of Rs.10/- each; Previous year 18782066 Shares of Rs. 10/- each) ||187.82 ||187.82 ||187.82 ||187.82 |
|E.P.S (After Prior Period Items) (Rs.) ||(0.46) ||(2.02) ||(0.64) ||(1.45) |
|Net Worth ||484.86 ||476.74 ||624.66 ||619.83 |
|Book Value (Face Value of Rs. 10/- each) ||25.82 ||25.38 ||33.26 ||33.00 |
Review of Operations :
During the year under review your Company has reached a consolidated turnover of Rs.519.83 Million as compared to Rs. 697.18 Million for the previous financial year. TheStandalone turnover was Rs. 237.44 Million as against a turnover of Rs. 290.66 Millionduring the previous year. The Consolidated Net Profit/ (Loss) for the year 2015-2016 was(Rs. 11.95) Million in comparison with Net Profit /(Loss) (Rs. 27.27) Million during theprevious year and the Standalone Net Profit/(Loss) is (Rs. 8.65) Million during the yearand in comparison with Net Profit/ (Loss) (Rs. 38.00) Million during the previous year.However the consolidated cash Profit / (loss) for the FY 2015-16 has been reported at (Rs.3.19) Million as compared to cash profit / (Loss) of Rs. 53.38 Million in the previousyear and Standalone cash profit / (loss) has been reported at Rs. 0.11 Million as comparedto Cash profit / (Loss) of Rs. 42.57 Million during the previous year.
During the year the Company does not have adequate profits and hence your Board hasnot recommended any dividend for the financial year 2015-16.
Share Capital :
The Paid up capital as on 31st March 2016 was Rs.187820660 (having 18782066Equity Shares @ Rs. 10/- each). During the year under review the company has not issuedany shares either to the public or to the promoters. During the year under review theCompany has not issued shares with differential voting rights nor granted stock optionsnor sweat equity. As on March 31 2016 except Mr. L.P. Sashikumar (having 757 shares)none of the other Directors of the Company hold shares or convertible instruments of theCompany.
Cash and cash equivalents as at 31st March 2016 was Consolidated Rs. 169.60 Million& Standalone Rs. 13.56 Million. The Company continues to focus on judicious managementof its working capital receivables inventories and other working capital parameters werekept under strict check through continuous monitoring.
Mr.Clinton Travis Caddell Director who retires by rotation at the 22ndAnnual General Meeting and being eligible offers himself for reappointment.
Mr.K.S.Sarma Mr. Vedula Venkata Ramana have been appointed as Independent Directors ofthe Company for a term of 5 (Five) years from 27th September 2014 to 26th September 2019and are not liable to retirement by rotation.
During the year under review Mrs.Promilla Shankar Independent Director of theCompany tendered her resignation w.e.f.12th July 2015 from the position ofDirector in the Company.
Ms. Janaki Kondapi was appointed as the Independent Director of the Company in place ofMrs.Promilla Shankar with effect from 13th November 2015 to 26thSeptember 2019. As Ms. Janaki Kondapi is appointed as the Independent Director by virtueof casual vacancy her term as Independent Director will be till the remaining term ofMrs.Promilla Shankar had she not resigned from the Board.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and theapplicable regulations of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
Board Evaluation :
Pursuant to the provisions of the Companies Act 2013 and the applicable regulations ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out an evaluation of its own performance thedirectors individually as well as the evaluation of the working of its Audit Nomination& Remuneration Committees. The manner in which the evaluation has been carried out isexplained in the Corporate Governance Report.
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 Remuneration Policy is stated in the Corporate Governance Report.
During the year Seven Board Meetings and Five Audit Committee Meetings and FiveNomination and Remuneration Committee Meetings were convened and held. The details ofwhich are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
Meeting of Independent Directors :
The details on the separate meeting of Independent Directors is reported in theCorporate Governance Report.
Familiarization Programme for Independent Directors :
The details on the familiarization programme for Independent Directors is reported inthe Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors 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 or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Consolidated Financial Statements:
During the year the Board of Directors (the Board) reviewed the affairs ofthe Subsidiaries. In accordance with Section 129 (3) of the Companies Act 2013 andapplicable Accounting Standards we have prepared consolidated financial statements of theCompany and its subsidiaries which will form part of the Annual Report. Further astatement containing the salient features of the financial statements of our subsidiariesin the prescribed format AOC-1 are appended to the Board's report.
In accordance with Section 136 of the Companies Act 2013 the Audited financialstatements including the consolidated financial statements and related information of theCompany and audited accounts of each of its subsidiaries are available on website of theCompany www.goldstonetech.com.These documents will also be available for inspection duringthe business hours at the registered office of the Company.
Subsidiaries and Associates :
As on 31st March 2016 we are having two wholly owned subsidiaries namelyM/s. Staytop Systems Inc and M/s. Staytop Systems and Software Pvt Ltd. Till date StaytopSystems and Software Pvt Ltd has no business operations. Further the Company does not haveany other Associates or Joint Ventures.
Further as per the applicable regulations of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has frameda policy on Material Subsidiaries as approved by the Board and the same has been uploadedon the Companys website www.goldstonetech.com
During the year no further investments were made in the subsidiaries.
Statement containing salient features of financial statements of subsidiaries
Pursuant to sub-section (3) of section 129 of the Companies Act 2013 the statementcontaining the salient features of the financial statement of a companys subsidiaryor subsidiaries associate company or companies and joint venture or ventures is in theprescribed format AOC-1 are appended as Annexure 1 to the Boards report.
Report on the performance of Subsidiaries Joint Ventures and Associates:
Further brief about the business of the each of the Subsidiaries and Associates isgiven hereunder:-
Performance of the M/s. Staytop Systems Inc;
M/s. Staytop Systems Inc. (a foreign wholly owned subsidiary company of M/s.Goldstone Technologies Limited) is engaged in business of IT Consulting and Staffingacross USA.
The following is the brief summary of the financial performance during the year;
($ In Millions)
|Particulars ||2015-16 ||2014-15 |
|Turnover ||4.31 ||6.70 |
|Profit before Tax ||(0.05) ||0.29 |
|Net Profit/(Loss) after Tax ||(0.05) ||0.18 |
Till date the M/s. Staytop Systems and Software Pvt Ltd has no businessoperations and the Company has no Associates as well as Joint Ventures.
Internal control systems and their adequacy:
The Company has an Internal Audit and Internal Control System commensurate with thesize scale and complexity of its operations. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committeeof the Board.
The Internal Audit function monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.
All the properties of your Company including its building plant & machinery andstocks have been adequately insured.
M/s. P. Murali & Company (FRN: 007257S) Chartered Accountants HyderabadStatutory Auditors of the Company hold office in accordance with the provisions of theCompanies Act 2013 up to the conclusion of forth-coming Annual General Meeting and areeligible for re-appointment. Pursuant to the provisions of the Section 139 (2) of theCompanies Act 2013 and based on recommendations of the Audit Committee they beingeligible offer themselves for reappointment. They have furnished a certificate statingthat their re-appointment if made will be within the limits laid down under Section 141(3) (g) of the Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014.
The Audit Committee of your Company meets periodically with Statutory Auditors andInternal Auditors to review the performance of the Internal Audit to discuss the natureand scope of statutory auditors functions and to discuss auditing internal control andfinancial reporting issues. To ensure complete independence the statutory auditor and theinternal auditor have full access to the Members of the Audit Committee to discuss anymatter of substance.
Particulars of Loans Guarantees or Investments :
During the year under review no loans guarantees have been given or investments weremade by the Company.
Related Party Transactions :
There are no materially significant related party transactions entered into by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website www.goldstonetech.com. None of the Directors have any pecuniaryrelationships or transactions vis--vis the Company.
The details of contracts or arrangements with related parties made by the companyduring the year 2015-16 is enclosed in form AOC-2 as Annexure-2 to the Board'sreport.
Pursuant to provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the companyhas appointed M/s. VCSR & Associates a firm of company Secretaries in practice toundertake the Secretarial Audit of the Company. The Secretarial Audit report is annexedherewith as Annexure 3 to the Board's Report.
Risk Management Policy:
In terms of the requirement Section 134 (3) (n) and Regulation 21 of Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 read with relevant provisions of the Companies Act 2013 the Company has developed andimplemented the Risk Management Policy. The details of the Policy are reported in theReport on Corporate Governance which forms part of the Directors Report.
At present the company has not identified any element of risk which may threaten theexistence of the company.
Code of Conduct:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in "Zero Tolerance" against briberycorruption and unethical dealings / behaviors of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as "code ofbusiness conduct" which forms an Appendix to the Code. The Code has been posted onthe Companys website www.goldstonetech.com.
The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehaviour from an employee in a given situation and the reporting structure. In additionto the above and pursuant to the applicable regulations of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 read withSchedule IV of the Companies Act 2013 duties of the Independent Directors and code ofIndependent Directors have been placed on the website of the Companywww.goldstonetech.com.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code. All Management Staff were given appropriate training in this regard.
Declaration given by Managing Director of the Company regarding compliance of Code ofConduct is enclosed as Annexure to the Corporate Governance Report.
Prevention of Insider Trading:
In pursuance of SEBI (Prohibition of Insider Trading) Regulations 2015 the Company hasframed and adopted the following policies for regulating monitoring and reporting oftrading by Insiders and uploaded on website of the Company.
i) Code of Internal Procedures and Conduct for Regulating Monitoring and Reporting ofTrading By Insiders;
ii) Code of Practices & Procedures for Fair Disclolsure of Unpublished PriceSensitive Information; The Board is responsible for implementation of the Code. The Boardof Directors and the designated employees have confirmed compliance with the Code.
Policies under SEBI (LODR) Regulations 2015:
The Board adopted the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 which came into force on 2ndDecember 2015 in the Board Meeting held on 13th November 2015 which replacedthe erstwhile Listing Agreement.
Further pursuant to the said regulations the Company adopted the following policies
1. Archival Policy
2. Determination of Materiality of Events
3. Preservation of Documents Policy All the above policies are hosted on the website ofthe Company www.goldstonetech.com
Vigil mechanism / whistle blower policy:
As per the provisions of the Section 177 (9) & (10) of the Companies Act 2013read with amended Clause 49 of the erstwhile Listing Agreement the Board adopted a VigilMechanism called Whistle Blower Policy for directors and employees to reportthe management /Audit Committee instances of unethical behaviour actual or suspectedfraud or violation of companys code of conduct or ethics policy. The Vigil Mechanismalso provided adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit committee inexceptional cases further it has also been uploaded in the Companys website;www.goldstonetech.com.
Extract of Annual Return:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure 4 to the Board's Report.
Stock Exchange Listing:
Presently the Equity Shares of the Company are listed on National Stock Exchange ofIndia Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The Company confirms thatit has paid Annual Listing Fees due to all the Stock Exchanges where the Companyssecurities are listed for the year 2016-17.
Corporate Governance and Management Discussion & Analysis Reports
As per the Regulation 34(3) read with Schedule V of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 the CorporateGovernance and Management Discussion & Analysis Report which form an integral part ofthis Report are set out as separate Annexures together with the Certificate from theauditors of the Company regarding compliance with the requirements of CorporateGovernance.
Managing Director and CFO Certification:
As required under the SEBI Guidelines the Managing Director and the CFO Certificationis attached to Corporate Governance Report.
Material changes and commitments affecting the financial position of the company whichhave occurred between the end of the financial year i.e.31.3.2016 to which financialstatements relate and the date of the Boards Report:
There were no material changes and commitments affecting the financial position of thecompany between the end of the financial year i.e. 31.03.2016 and date of this report.
Particulars of Conservation of energy / technology absorption foreign exchangeearnings and outgoings
Particulars in respect of Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo required under Rule 8(3) of the Companies (Accounts) Rules2014 are as follows:
A. CONSERVATION OF ENERGY:
Your companys operations involve low energy consumption. However adequatemeasures have been taken to conserve and reduce the energy consumption.
B. TECHNOLOGY ABSORPTION:
Your Company continues to use state-of-the-art technology for improving theproductivity and quality of its products and services. To create adequate infrastructureyour company continues to invest in the latest hardware and software.
C. FOREIGN EXCHANGE EARNINGS AND OUT GO:
Rs. In Millions
|Particulars ||2015-16 ||2014-15 |
|Foreign Exchange Earnings ||29.77 ||30.72 |
|Foreign Exchange Outgo ||54.94 ||32.03 |
Details of significant and material orders passed by regulators courts tribunalsimpacting the going concern status and company's operations in future;
There are no orders passed by Regulators/ courts which would impact the going concernstatus of the company and its future operations.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 read with notificationdated 30th June 2016 in respect of employees of the Company is enclosed as Annexure5 to the Boards report.
Personnel relations have remained very cordial during the period.
Your Directors convey their sincere thanks to CITI Bank and Central Bank of India fortheir support guidance and assistance.
Your Directors thank all the Employees of your company for their dedicated servicewhich enabled your company to achieve satisfactory results and performance during theyear. Your Directors thank the shareholders for their support and confidence reposed inthe company and the management and look forward to their continued co-operation andsupport.
| ||For and on behalf of the Board || |
| ||Sd/- ||Sd/- |
| ||L P Sashikumar ||P.S.Parthasarathy |
|Place: Secunderabad ||Director ||Managing Director |
|Date: 12.08.2016 ||DIN: 00016679 ||DIN: 01837281 |