You are here » Home » Companies » Company Overview » GTN Textiles Ltd

GTN Textiles Ltd.

BSE: 532744 Sector: Industrials
NSE: GTNTEX ISIN Code: INE302H01017
BSE LIVE 15:40 | 18 Aug 24.95 0.95
(3.96%)
OPEN

24.00

HIGH

25.45

LOW

24.00

NSE 15:30 | 18 Aug 24.05 0.20
(0.84%)
OPEN

24.50

HIGH

24.50

LOW

23.00

OPEN 24.00
PREVIOUS CLOSE 24.00
VOLUME 9
52-Week high 28.55
52-Week low 10.64
P/E
Mkt Cap.(Rs cr) 29
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 24.00
CLOSE 24.00
VOLUME 9
52-Week high 28.55
52-Week low 10.64
P/E
Mkt Cap.(Rs cr) 29
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GTN Textiles Ltd. (GTNTEX) - Director Report

Company director report

To the Members

Your Directors present the ELEVENTH Annual Report together with the AuditedStatement of Accounts for the year ended 31st March 2016

1. FINANCIAL RESULTS

(Rs in lacs)

Particulars

Year ended

31.3.2016 31.3.2015
REVENUE
Income from operations 15292 18598
Other income 37 73
Changes in Inventories 115 758
Total 15444 19429
EXPENSES
a) Cost of materials 9261 12655
b) Employee benefits expense 2601 2580
c) Other expenses 3224 3095
Total 15086 18330
OPERATING PROFIT 358 1099
Finance Costs 931 1089
PROFIT/(LOSS) BEFORE
DEPRECIATION AMORTISATION & TAX EXPENSES (573) 10
Depreciation and Amortisation Expenses 418 457
PROFIT/(LOSS) BEFORE TAX (991) (447)
Tax Expenses
a) Current Tax (MAT)
b) MAT credit entitlement 37
c) Deferred Taxation (294) 141
PROFIT/(LOSS) AFTER TAX (734) (306)

2. FINANCIAL PERFORMANCE

In the previous year’s Directors’ Report the position of textile industrywas highlighted the impact of which was felt from the 3rd quarter of 2014-15.As mentioned therein many companies had incurred losses due to substantial crash in rawmaterial prices across the world and its impact was felt in India as well resulting invalue loss in inventories held. Further cotton yarn export from India to China droppedleading to fall in yarn prices affecting performance of many mills including yours. Sincethen the situation has only marginally improved. The yarn sale prices continue to remainunder pressure due to subdued global demand besides higher yarn inventories on account ofnew spinning capacities set up in certain States attracted by unduly high incentives andconcessions offered by these States.

It was also mentioned in previous year’s Directors’ Report that the salariesand wages of your company’s Unit at Aluva are abnormally higher as compared toIndustry standards and for survival of this Unit it is important that the same arebrought down to the comparable level. As soon as the existing long term work load andwages agreement expired in January 2015 your Management started negotiation torationalize the work force and bring down the personnel cost. Even after protractednegotiation the unions and the workmen were not co-operative and from November 2015 theyresorted to obstructive policies resulting in substantial loss of production. Thisresulted in company loosing substantially in the year under review.

During the year under review on account of the above explained factors as well aslower exports of traded goods your company’s total revenue was at `152.92 crores asagainst 185.98 crores. The operating profit was also lower at Rs.3.58 crores as againstRs.10.99 crores of previous year and after charging finance cost and depreciation theloss was at Rs.9.91 crores as against Rs.4.47 crores of previous year.

The indisciplined working and loss of production continued in April 2016 also and theManagement was left with no other choice but to enforce lockout with effect from 2ndMay 2016. After a series of meetings before the Regional Joint Labour Commissioner thematter was taken up by the Additional Labour Commissioner Trivandrum. Finally on 2ndJuly 2016 a Long Term Agreement was reached with the Unions for a period of 4 years.Simultaneously the lockout also was lifted from 3rd July 2016 and a VoluntaryRetirement Scheme (VRS) has also been announced to reduce the overall wage bill. YourDirectors are glad to inform that the company has already achieved optimum capacityutilization.

3. DIVIDEND

Your company has incurred loss for the year and hence the Board is unable to recommenddividend for the financial year ended 31st March 2016.

4. MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on the Management Discussion and Analysis forms an integral part ofthis report.

5. DEPOSIT FROM PUBLIC

During the year under review your Company has not accepted any deposits within themeaning of Section 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).

6. CORPORATE GOVERNANCE REPORT

In compliance with Regulation 34 of the Listing Regulations a separate report onCorporate Governance alongwith a Certificate from the Auditors on its compliance forms anintegral part of this report.

7. DIRECTORS

In accordance with the provisions of the Companies Act 2013 and Company’sArticles of Association Shri Mahesh C. Thakker Director retires by rotation at theensuing Annual General Meeting and being eligible offer himself for reappointment. TheBoard recommends the same for your approval.

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 Regulation16 (b) of SEBI (LODR) Regulations 2015. During the year under review there is no changein the Board of Directors of the company.

8. NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the year ended 31stMarch 2016 forms part of the Corporate Governance Report

9. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company:

(i) Shri. B.K. Patodia : Chairman & Managing Director
(ii) Shri. A.K. Warerkar : Chief Financial Officer
(iii) Shri. E.K.Balakrishnan : Company Secretary

10. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors met once during the Financial Year under review. The Meetingwas conducted in an informal manner without the presence of the Non-Independent Directorsand members of management.

11. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act 2013 (the Act) and Accounting Standard (AS)– 21 on Consolidated Financial Statements read with AS -23 on Accounting forInvestments in Associates the audited consolidated financial statement is provided in theAnnual Report.

12. SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANY

The Company did not have any Subsidiary or Joint Venture during the financial year. TheCompany has one Associate Company Patspin India Limited.

A Statement containing the salient features of the financial statement of the Associatecompany is given in Annexure A to the Consolidated financial statements.

The Audited financial statements including the Consolidated financial statements of thecompany and all other documents required to be attached thereto may be accessed on theCompany’s website www. gtntextiles.com. These documents will also be available forinspection during business hours at the Registered office of the company.

13. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134 (5) of the Companies Act 2013 and based onthe representations received from the management your Directors confirm that:

a) in the preparation of the Annual Accounts for the year ended 31stMarch2016 the applicable Accounting Standards have been followed and there are nomaterial departures;

b) selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your company at the end of the financial year and of the profit &loss of the company for the financial year ended 31st March 2016.

c) taken proper and sufficient care to the best of knowledge and ability for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of your company and for preventing anddetecting fraud and other irregularities.

d) prepared the Annual Accounts on a going concern basis.

e) had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively;

f) devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.

14. BOARD EVALUATION

In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. A structured questionnaire wasprepared after taking into consideration of the various aspects of the Board’sfunctioning composition of the Board and its Committees culture execution andperformance of specific duties obligations and governance.

The performance evaluation of the Independent directors was completed. The performanceevaluation of the Chairman and the Non – Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

15. FAMILIARISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director a formal letter of appointment is given to himwhich interalia explains the role function duties and responsibilities expected of himas a Director of the Company. The Director is also explained in detail the Compliancerequired from him under the Companies Act 2013 SEBI (LODR) Regulations 2015 and otherrelevant regulations and affirmation taken with respect to the same.

The Chairman and the Management has also one to one discussion with the Directors tofamiliarize with the company’s operations.

16. AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s. M S Jagannathan & Visvanathan Chartered AccountantsCoimbatore were appointed as Statutory Auditors of the Company from the conclusion of the9th Annual General Meeting (AGM) of the Company held on 19thSeptember 2014 till the conclusion of the 12th Annual General Meeting to beheld in the year 2017 subject to ratification of their appointment at every AGM. Yourcompany seeks ratification of the appointment of Statutory Auditors at the ensuing AnnualGeneral Meeting.

The Auditors’ Report for the financial year ended 31st March 2016does not contain any qualification reservation or adverse remark.

17. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Shri. MRL Narasimha Practicing Company Secretary toundertake the Secretarial Audit of the Company. The same is attached as Annexure Iand forms an integral part of this Report The Secretarial Audit Report does not containany qualification reservations or adverse remark.

18. COST AUDITORS

As recommended by the Audit Committee the Board of Directors has approved theappointment of M/s. K.N Hareesh and Associates Cost Accountants as the Cost Auditors ofthe company for the year ended 31st March 2016.

19. EXTRACT OF ANNUAL RETURUN

The extract of Annual Return in Form MGT-9 as per Section 92 (3) of the Companies Act2013 and Rule

12 (1) of Companies (Management & Administration) Rules 2014 is annexed hereto as AnnexureII and forms part of this report.

20. RELATED PARTY TRANSACTIONS

None of the transactions with related parties falls under the scope of Section 188 (1)of the Act. Information on transactions with related parties pursuant to Section 134 (3)(h) of the Act read with Rule 8 (2) of the Companies (Accounts) Rules 2014 are given in AnnexureIII in

Form AOC-2 and the same forms part of this report.

21. LOANS & INVESTMENTS

Details of loans guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements forming partof this report.

22. RISK MANAGEMENT

The company has laid down a well defined risk management mechanism covering the riskmapping and trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitor andnon-business risks. The Audit Committee and the Board periodically review the risks andsuggest steps to be taken to manage/ mitigate the same through a properly definedframework.

During the year a risk analysis and assessment was conducted and no major risks werenoticed which may threaten the existence of the company.

23. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The company has a Vigil Mechanism / Whistle Blower Policy to report genuine concerns orgrievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on thecompany’s website (www.gtntextiles.com).

24. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the Company yet the company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development

25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under Section 134 (3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given in the Annexure IV formingpart of this report.

26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk mitigation system designed toeffectively control the operations at its Head Office Plants and Depots. The internalcontrol systems are designed to ensure that the financial and other records are reliablefor the preparation of financial statements and for maintaining assets. The Company haswell designed Standard Operating Procedures. Independent Internal Auditors conduct auditcovering a wide range of operational matters and ensure compliance with specifiedstandards. Planned periodic reviews are carried out by Internal Audit. The findings ofInternal Audit are reviewed by the top management and by the Audit Committee of the Boardof Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on thefinancial statements including the Financial Reporting System and Compliance to AccountingPolicies and Procedures the Audit Committee was satisfied with the adequacy andeffectiveness of the Internal Controls and Systems followed by the company.

27. NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a frame work in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Moredetails on the same are given in the Corporate Governance Report.

28. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.

The Company has in place an anti-sexual harassment policy in line with the requirementsof the sexual harassment of women at the workplace (Prevention Prohibition and Redressal)Act 2013. Internal Compliance Committee (ICC) is already been functioned for redressingcomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The Company has not received anycomplaints under this policy during the year ended 31st March 2016.

29. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT 2013READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNENRATION OF MANAGERIALPERSONNEL) RULES 2014

The information required pursuant to Section 134 (3) (q) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to theMembers and others entitled thereto excluding the information on employees’particulars which is available for inspection by the Members at the Registered office ofthe company during business hours on working days of the company up to the date of theensuing Annual General meeting. If any Member is interested in obtaining a copy thereofsuch member may write to the company in this regard.

30. PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory except the situation explained inthe review of financial performance. There were no employees whose particulars are to begiven in terms of Section 134(3) (q) of the companies Act 2013 read with Rule 5(2) and5(3) of the companies (Appointment and Remuneration of Managerial personnel) Rules 2014.

31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant and material orders passed by the Regulators or Courts orTribunals that would impact the going concern status of your Company and its futureoperations.

32. GENERAL

a) Your company not issued equity shares with differential rights as to dividendvoting or otherwise: and

b) Your company does not have any ESOP scheme for its employees / Directors

33. ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India State Bank ofIndia Export-Import Bank of India State Bank of Travancore Bank of India and Axis BankLimited and the concerned Departments of the State and Central Government valuablecustomer Employees and Shareholders for their assistance support and co-operation to theCompany.

For and on behalf of the Board of Directors

B.K PATODIA
Place : Kochi Chairman
Date : 01.08.2016 (DIN 00003516)