To the Members
Your Directors are presenting the 54th Annual Report together with theAudited Statements of Account for the year ended 31st March 2016.
(Rs. in Lacs)
| ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|INCOME || || |
|Net Sales/Income from operations* ||28006 ||40869 |
|Other Income ||210 ||293 |
|Variation in Stock ||182 ||(1456) |
|Total ||28398 ||39706 |
|EXPENDITURE || || |
|a) Cost of Materials** ||16913 ||27227 |
|b) Staff Cost ||2742 ||3126 |
|c) Power & Fuel ||3271 ||3792 |
|d) Other expenditure ||3071 ||3955 |
|Total ||25997 ||38100 |
|OPERATING PROFIT ||2401 ||1606 |
|Interest ||1832 ||2146 |
|Net Profit/(Loss) before || || |
|Depreciation and Taxation ||569 ||(540) |
|Depreciation ||123 ||872 |
|PROFIT/(LOSS) BEFORE TAX ||446 ||(1412) |
|Exceptional Items ||942 ||(99) |
|Provision for Deferred Tax ||(97) ||(57) |
|MAT Credit Entitlement ||43 ||- |
|Tax in respect of earlier years ||- ||(2) |
|PROFIT/(LOSS) AFTER TAX ||(442) ||(1254) |
* Sales includes Traded goods of Rs.566 lacs (Previous year Rs. 9056 lacs)
** Cost of Material includes Trading purchases of Rs.527 lacs (Previous year Rs. 8339lacs)
In view of the Net loss incurred by the Company during the year to conserve availableresources and considering that company is still under CDR your Directors have notrecommended any Dividend for the year.
During the Financial Year under review the Company has achieved turnover of Rs.28006lacs against Rs. 40869 lacs in the corresponding previous year. The operating profitbefore interest depreciation and tax were lower by Rs.147 lacs after absorbing effect ofVRS amount of Rs.942 lacs and Net loss before Tax is lower by Rs. 817 lacs as compared tothe corresponding previous year.
CORPORATE DEBT RESTRUCTURING
The Company has complied with all the terms stipulated by the CDR.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134 of the Companies Act 2013 your Directorsconfirm that: -
a) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your company at the end of the financial year and of the Lossof the Company for that year;
c) they have taken proper and sufficient care for the maintenance of the adequateaccounting records in accordance with the provisions of the Companies Act 1956 and TheCompanies Act 2013 for safeguarding the assets of your Company and for preventing anddetecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) the directors 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 directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
Your Directors affirm their commitments to the Corporate Governance Standardsprescribed by the Securities and Exchange Board of India (SEBI). A report on CorporateGovernance with Management Discussion and Analysis as required under Regulation 27 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 are attached asAnnexure.
Company has not accepted Fixed Deposits from the public /shareholders during the year.
In accordance with the provisions of the Companies Act 2013 and the CompanysArticles of Association.
Shri M.R.Vikram Independent Director will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offer himself for re-appointment.
Smt.Rajul Kothari Independent Woman Director will retire by rotation at the ensuingAnnual General Meeting and being eligible offer herself for re-appointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section149(6) of The Companies Act 2013 and Regulation 27of the SEBI Regulations.
The Board undertook the initative to conduct a formal evaluation of its own performanceand that of its committees & individual Directors. The Nomination & RemunerationCommittee led the evaluation process. The Independent Directors reviewed the performanceof non-independent Directors the Chairperson of the Company and the Board as a whole.
The Board would use the results of the evaluation process constructively to improve itseffectiveness optiomize individual strength of Directors and deliver performance &overall growth for the Company.
POTENTIALLY SICK COMPANY UNDER THE PROVISIONS OF SICK INDUSTRIAL COMPANIES (SPECIALPROVISIONS) ACT 1985
Due to continuing market recession uncertainty and lower realization affectedprofitability of the Company . In addition to this VRS payment to the workers amountingto Rs.9.42 Crores caused further losses and affected the performance of the company.Consequent to this your Company has been classified as a "potentially sickcompany" under the provisions of Sick Industrial Companies (Special Provisions) Act1985 as at the close of the financial year. The required steps have been initiated andyour Directors are confident to over come the same in the near future.
i) Statutory Auditors:
M/s. Lodha & Company Chartered Accountants Mumbai Auditors of the company holdoffice till the conclusion of the ensuing Annual General Meeting of the Company and areeligible for re-appointment.
The Company has received letters from them to the effect that their re-appointment ifmade would be within the prescribed limits under Section 141(3)(g) of the Companies Act2013 and that they are not disqualified for reappointment.
The Notes on Financial Statements referred to in the Auditors Report are selfexplanatory and do not call for any further comments.
ii) Cost Auditors:
M/s. S T R Associates Cost Accountants were appointed by the Board of Directors asCost Auditors of your Company for the year ended 31st March 2016.
For the Financial Year 2016-17 Cost Auditor proposed remuneration of Rs.2.00 lacs isrecommended to the Shareholders for approval.
iii) Secretarial Audit:
According 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 theSecretarial Audit Report submitted by Company Secretary in Practice is enclosed as part ofthis report
PERSONNEL & INDUSTRIAL RELATIONS
During the year the Industrial relations were cordial and satisfactory at all units ofthe Company. There were no employees whose particulars are to be given in terms ofSection 134 the Companies Act 2013 read with the Companies (Particulars of Employees)Regulations.
Further during the year 224 workers of Medak Spinning and Doubling Units have optedfor Voluntary Retirement Scheme (VRS) with a total outflow of Rs.9.42 crores
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under Section 134 (3) (m) of the Companies Act 2013 read withRule 2 of Companies (Accounts) Rules 2014 are set out in Annexure- I attachedhereto and forms part of this report.
VIGIL MECHANISM POLICY
In pursuance to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism Policy for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.gtnindustries.com under investors/policy documents/Vigil Mechanism Policy link.
RELATED PARTY TRANSACTIONS POLICY
In pursuance to the provisions of Section 188 of the Companies Act 2013 companyestablished Related Party Transaction Policy.
Related party transactions that were entered during the financial year were at anarms length basis and were in the ordinary course of business. There were nomaterially significant related party transactions with the Companys PromotersDirectors Management or their relatives which could have had a potential conflict withthe interests of the Company. Transactions with related parties entered by the Company inthe normal course of business are periodically placed before the Audit Committee/Board forits omnibus approval and the particulars of contracts entered during the year as per FormAOC-2 is enclosed as Annexure-III.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 theRules there under and the Listing Agreement. This Policy was considered and approved bythe Board has been uploaded on the website of the Company at www.gtnindustries.comunder investors/ policy documents/Related Party Policy link.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is Annexed-IVherewith
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes on Financial Statements.
OTHER MANAGEMENT POLICIES
The following policies are placed in companys website.
1) Policy for dertermining materiality of events.
2) Policy on preservation of documents.
3) Policy on code of conduct for Board Members.
4) Nomination and Remuneration Policy.
Your Directors place on record their sincere thanks to CDR- EG Central Bank of IndiaState Bank of India IDBI Bank Ltd. Export-Import Bank of India (Exim Bank) and StateBank of Travancore the concerned Departments of the State and Central GovernmentEmployees and Shareholders of the Company for their valuable assistance support andco-operation to the Company.
| ||For and on behalf of the Board |
|Place: Hyderabad ||M.K .PATODIA |
|Date : 24th May 2016 ||Chairman & Managing Director |