to the Members
Your Directors are pleased to present the FORTY THIRD ANNUAL REPORT & AUDITEDACCOUNTS for the year ended 31st March 2017.
|Financial Results || || |
|Particulars ||Year ended 31st 2017 ||March 2016 |
| ||Rs ( In lakhs) ||Rs ( In lakhs) |
|Sales & Other Income ||30628 ||31538 |
|Profit before depreciation & tax ||2606 ||2458 |
|Depreciation ||1393 ||1401 |
|Profit before tax and exceptional items ||1213 ||1057 |
|Provision for tax (net of MAT entitlement) ||317 ||318 |
|Deferred tax expenditure ||68 ||(63) |
|(Short) provision of income tax (net) of earlier year ||(9) ||-- |
|Profit after tax for the year ||837 ||802 |
|Brought forward profit ||5160 ||5018 |
|Amount available for appropriation ||5997 ||5820 |
|Transfer to General Reserve ||-- ||500 |
|Proposed Dividend ||-- ||133 |
|Tax on dividend ||-- ||27 |
|Balance carried to Balance Sheet ||5997 ||5160 |
|EPS: || || |
|Basic (Rs ) ||62.76 ||60.12 |
|Diluted (Rs ) ||62.76 ||60.12 |
Based on performance of the Company for the year under the report and keeping in linewith its dividend pay-out policy the Board recommends a dividend of Rs 10/-per share(100%) for the year ended 31st March 2017 resulting in total outflow ofRs 160.48 lakhsincluding the dividend distribution tax. [Previous year total dividend was Rs 10/- pershare (100%)]. This amount will be appropriated from the profits in the month in which thesaid dividend is approved at the forthcoming Annual General meeting.
FINANCIAL RESULTS PERFORMANCE AND FUTURE OUTLOOK
The sales of the company have fallen marginally by 3.54% mainly due to fall in volume.The fall in the sales is due to a generally sluggish environment both domestic andinternational. In spite of the fall in sales revenue the company was able to increase itsprofit before tax because of lower input prices. Input prices are linked closely to crudeoil prices and the price of crude oil has remained subdued throughout the year underreview. The Company continues to strengthen its process capabilities and is well poised totake advantage of a revival in demand. The volatility of prices of crude oil meansthat input prices are a matter of concern. The continuous rise in employee costs is also amatter of concern and the company is taking steps to increase the level of automation andincrease productivity. Your Company has realised tax benefits u/s 35(2AB) of Income TaxAct on account of approval received from Department of Scientific & IndustrialResearch Ministry of Science & Technology (DSIR) Government of India New Delhi.
In view of the decline in sales revenue the company has maintained prudent control oncapital spending while continuing to invest in items which increase productivity. Withprofits continuing to accrue the company was able to meet all its repayment obligationsand maintain its liquidity position. The debt equity ratio of 0.52 is low by standardsprevailing in the industry. Considering the consistency in operating parameters thecompanys ratings were revised to A negative with stable outlook (revised fromnegative outlook) for long term debt and rating of A2 plus for its short term workingcapital debt was reaffirmed by CRISIL.
AWARDS & ACCOLADES:
The year under review saw GRP win accolades among its peers. GRP was again therecipient of the CAPEXIL award for Top Export in rubber product panel the AIRIA award forTop Export in raw material sector for its export performance. These awards were in theentire raw material category signifying GRPs standing among peers in Carbon BlackSynthetic Rubber Rubber Process Oil industries too while your company continues to be ina commanding position in the reclaim rubber industry.
Salient features of the financial statements of its Wholly-owned Subsidiary companyviz. Grip Polymers Limited subsidiary body corporate of Grip Polymers Ltd. viz.Gripsurya Recycling LLP and joint venture company viz. Marangoni GRP Pvt. Ltd. in formAOC-1 are attached herewith. (Annexure 1).
In accordance with the provisions of the Companies Act 2013 Dr.Peter Philip andSmt.Nayna R. Gandhi retire by rotation at the ensuing 43rd Annual General Meeting andbeing eligible offer themselves for reappointment.
All the Independent Directors have submitted their declarations to the Board to theeffect that they meet the required criteria of independence as mentioned in the provisionsof Section 149(6) of the Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard of Directors confirm that
(a) in the preparation of the annual accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed and there had been no materialdeparture;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at 31st March 2017 and of the profitand loss account of the company for the year ended on that date; (c) the Directors hadtaken proper and sufficientcare 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) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and (f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
Report on Management Discussion and Analysis and Corporate Governance attached herewith(Annexure 2) form an integral part of this report. The the Company certifyingcompliance of the conditions of corporate governance as stipulated in schedule V to SEBI(Listing certificate Obligations and Disclosure Requirements) Regulations 2015 isannexed to the report on corporate governance (Annexure 3).
In accordance with the provisions of Section 139 of the Companies Act 2013 read withRule 6 of The Companies (Audit and Auditors) Rules 2014 every Company shall appointStatutory Auditors to hold office for one term of 5 years and such appointment is subjectto ratification every year in the annual general meeting. The Act further makes itmandatory to rotate the statutory auditors after two terms of 5 years in case of a firmof auditors. Further Companies have been given time till the year 2017 to effect rotationof Auditors wherever necessary.
As you are aware M/s. A.B. Modi & Associates Chartered Accountants Mumbai havebeen the statutory auditors of the company for more than 10 years. In order to comply withthe requirements mentioned above it is proposed to go in for rotation of the aforesaidStatutory Auditors at the ensuing 43rd Annual General Meeting by appointing a new firm ofCharteredAccountants to act as the Statutory Auditors of the Company. M/s. A.B.Modi &Associates Chartered Accountants Mumbai have accordingly informed the Company that theywill not be seeking re-appointment as Statutory Auditors at the forthcoming 43rd AnnualGeneral Meeting.
M/s.DKP & Associates (Firm Regn. No.126305W) Chartered Accountants Mumbai a firmof long standing have been identified for appointment as the Statutory Auditors of theCompany.
Being eligible for appointment under the provisions of the Companies Act 2013 theyhave furnished their consent to act as the Statutory Auditors in terms of the secondproviso to Section 139 of the Act and also provided a certificate to the effect that theirappointment if made shall be in accordance with the conditions laid down and that theysatisfy the criteria provided under Section 141 of the Act. The Board of Directors on therecommendations of the Audit Committee at the meeting held on 30th May 2017 hasproposed the appointment of M/s.D K P & Associates.
As per the Notificationdated 14 th July 2016 issued by the Ministry of CorporateAffairs regarding the Companies (Cost Records and Audit) Rules 2014 provisions relatingto auditing of cost accounting records are applicable to the Company with effect from 1stApril 2016. Accordingly the audit of cost accounting records of the Company is mandatoryfrom the financial year 2016-17. M/s Jitendrakumar & Associates Cost Accountants(Firm Registration No.101561) has as required under Section 141 of the Companies Act2013 confirmed its eligibility to conduct the audit of the cost accounting records of theCompany for the financial year 2016-17 and 2017-18 and has consented to act as the CostAuditor of the Company. At the recommendation of the Audit Committee the Board ofDirectors has approved the appointment of M/s Jitendrakumar & Associates CostAccountants as the Cost Auditors to conduct the audit of the cost records of the Companyfor the financial year 2016-17 and 2017-18 at a remuneration of Rs 1.45 lakhs p.a. plusout of pocket expenses and taxes.
Section 148 (3) of the Companies Act 2013 read with Rule 14 of the Companies (Auditand Auditor) Rules 2014 requires the remuneration payable to the Cost Auditors to beratified by the Members of the Company. Ratification of remuneration payable to costauditors for the financial year 2016-17 could not be completed at the 42nd Annual Generalmeeting of the company held on 21st September 2016 because the aforesaid notificationregarding applicability of cost audit was issued after 20th May 2016 (this notificationwas issued on 14th July 2016) being the date of the notice convening the aforesaidannual general meeting.
SECRETARIAL AUDIT REPORT
Chetan R. Shah Practicing Company Secretary has conducted secretarial audit pursuantto the provisions of Section 204 of the Companies Act 2013 and the Rules made thereunder.His secretarial audit report is attached herewith. (Annexure 4)
The Company has established a vigil mechanism and oversees the genuine concernsexpressed by the employees and other Directors. The Company has also provided adequatesafeguards against victimization of employees and Directors who express their concerns.The Company has also provided direct access to the Chairperson of the Audit Committee inexceptional cases. Vigil Mechanism (Whistle Blower) Policy has been hosted by the companyon its website. The web link to access the above policy hosted by the company on itswebsite www.grpweb.com is as follows:http://www.grpweb.com/pdf/VIGIL%20MECHANISM%20(Whistle%20Blower)%20Policy.pdf
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
Periodic assessments by functional heads to identify the risk areas are carried out andManagement is briefed on the risks to enable the Company to control risks through aproperly defined plan. The risks are classified as financial risks operational risks andmarket risks. The risks are taken into account while preparing the annual business planfor the year. The Board is also periodically informed of the business risks and theactions taken to manage them.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY (CSR) ACTIVITIES
CSR Committee has been constituted by the Board of Directors. The Committee has adoptedCSR policy to contribute towards social and economic development of the communities wherethe Company operates in and while doing the same to build a sustainable way of life forall sections of society with emphasis and focus on education health care sustainablelivelihood and empowerment of women. The CSR Policy has also been uploaded on the websiteof the Company. The web link to access the above policy hosted by the company on itswebsite www.grpweb.com is as follows:http://www.grpweb.com/pdf/Corporate%20Social%20Responsibility%20Policy.pdf The AnnualReport on CSR activities of the Company is attached herewith. (Annexure 5)
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The particulars of Loans guarantees or investments made under Section 186 is attachedherewith. (Annexure 6) PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATEDPARTIES
During the financial year your company entered into related party transactions whichwere on an arms length basis and in the ordinary course of business. There were nomaterial transactions with any related party as defined under Section 188 of the Act readwith the Companies (Meetings of Board and its Powers) Rules 2014. All related partytransactions were approved by the Audit Committee of your company. The details ofcontracts and arrangement with related parties of your company for the financial yearended 31st March 2017 is given in Note 31 to the financial statements of your company.
COMPANYS POLICY RELATING TO PERFORMANCE EVALUATION OF THE BOARD DIRECTORSAPPOINTMENT PAYMENT OF REMUNERATION AND DISCHARGE OF DUTIES :
The Nomination and Remuneration Committee has laid down the criteria for performanceevaluation of the individual Directors and the Board which is based on;
Knowledge to perform the role;
Time and level of participation;
Performance of duties and level of oversight; and
Professional conduct and independence
The evaluation was carried out by means of the observations made by all the Directorson the set of questions developed by them which brought out the key attributes of theDirectors quality of interactions among them and its effectiveness. The Board iscollectively of the opinion that the overall performance of the Board Committees thereofand the individual Directors is satisfactory and conducive to the growth and progress ofthe Company. The Companys Policy relating to appointment of Directors payment ofManagerial remuneration Directors qualifications positive attributes independenceof Directors and other related matters as provided under Section 178(3) of the CompaniesAct 2013 is attached herewith (Annexure7). The Nomination and Remuneration Policyhas also been uploaded on the website of the Company. The web link to access the abovepolicy hosted by the company on its website www.grpweb.com is as follows:http://www.grpweb.com/pdf/NOMINATION%20AND%20REMUNERATION%20POLICY.pdf
POLICY AGAINST SEXUAL HARASSMENT
The Company has in place anti sexual harassment policy in line with the requirements ofThe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. The Committee has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy. No complaint regarding sexual harassment has been received by the Committeeduring the financial year 2016-17.
The extract of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 ofthe Companies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 is attached herewith. (Annexure 8)
The Company has neither accepted nor renewed any deposits during the financial year2016-17.
INFORMATION PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013
The above information (to the extent applicable) is attached herewith (Annexure 9).
INFORMATION PURSUANT TO SECTION 134 (3)(m) & (q) OF THE COMPANIES ACT 2013
The above information (to the extent applicable) is attached herewith (Annexure 10).
Your Directors place on record their sincere thanks to employees bankers businessassociates consultants and various Government Authorities for their continued supportextended to your Company. Your Directors also acknowledges gratefully the support andconfidence reposed by the
Shareholders in the Company.
| ||For and on behalf of the Board of Directors |
|Place : Mumbai ||Rajendra Gandhi ||Harsh Gandhi |
|Date : 30th May 2017 ||Managing Director ||Executive Director |
(Pursuant to first proviso to sub-section (3) of Section 129 read with rule 5 ofCompanies (Accounts) Rules 2014) Statement containing salient features of the financialstatement of subsidiaries
Part "A" : Subsidiaries
|1 ||Sr. No. ||1 |
|2 ||Name of the subsidiary ||Grip Polymers Ltd. |
|3 ||Reporting period for the subsidiary concerned if different from the holding companys reporting period ||Not Applicable |
|4 ||Reporting currency and exchange rate as on the last date of the relevant financial year in the case of foreign subsidiaries ||Not Applicable |
|5 ||Share capital ||Rs 500000/- |
|6 ||Reserves and surplus ||Rs (12127623/-) |
|7 ||Total assets (excluding investments) ||Rs 10576451/- |
|8 ||Total liabilities ||Rs 44690899/- |
|9 ||Investments ||Rs 22486825/- |
|10 ||Turnover ||Rs 257375/- |
|11 ||Profit / (Loss) before taxation ||Rs (13819996/-) |
|12 ||Provision for taxation ||Rs 39919/- |
|13 ||Profit / (Loss) after taxation ||Rs (13859915/-) |
|14 ||Proposed Dividend ||Nil |
|15 ||% of shareholding ||100% |
| ||Notes : The following information shall be furnished at the end of the statement : || |
|1 ||Names of subsidiaries which are yet to commence operations ||Nil |
|2 ||Names of subsidiaries which have been liquidated or sold during the year ||Nil |
Part "B" : Associatesand Joint Ventures
|Name of Joint Venture ||Gripsurya Recycling LLP ||Marangoni GRP Pvt. Ltd. |
|1. Latest audited Balance Sheet date ||31st March 2017 ||31st March 2017 |
|2. Shares of Joint Ventures held by the company on the year end || || |
|Number ||Not applicable ||4685350 |
|Amount of Investment in Joint Venture ||Rs 22401825 /- ||Rs 4685350/- |
|Extent of Holding % ||99.97% ||50% |
|3. Description of how there is significant influence ||99.97% control owned by ||50% control owned by |
| ||Grip Polymers Ltd. ||GRP Ltd. |
|4. Reason why the Joint Venture is not consolidated ||Not applicable ||Not applicable |
|5. Net worth attributable to shareholding as per latest audited Balance sheet ||Rs 23901825/- ||Rs 4117992/- |
|6. Profit / (Loss) for the year ||Rs (11097870/-) ||Rs (721475/-) |
|i. Considered in Consolidation ||Rs (11092273/-) ||Rs (360737/-) |
|ii. Not Considered in Consolidation ||Rs (5597/-) ||Rs (360738/-) |
1. Names of Joint ventures which are yet to commence operations : Nil 2. Names of JointVentures which have been liquidated or sold during the year : Nil
| || |
For and on behalf of the Board of Directors
|Place : Mumbai ||Rajendra Gandhi ||Harsh Gandhi |
|Date : 30th May 2017 ||Managing Director ||Executive Director |