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Gujarat Craft Industries Ltd.

BSE: 526965 Sector: Industrials
NSE: N.A. ISIN Code: INE372D01019
BSE LIVE 14:46 | 23 Nov 40.80 1.20
(3.03%)
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 40.80
PREVIOUS CLOSE 39.60
VOLUME 660
52-Week high 41.20
52-Week low 19.00
P/E 13.83
Mkt Cap.(Rs cr) 20
Buy Price 37.65
Buy Qty 1500.00
Sell Price 40.80
Sell Qty 40.00
OPEN 40.80
CLOSE 39.60
VOLUME 660
52-Week high 41.20
52-Week low 19.00
P/E 13.83
Mkt Cap.(Rs cr) 20
Buy Price 37.65
Buy Qty 1500.00
Sell Price 40.80
Sell Qty 40.00

Gujarat Craft Industries Ltd. (GUJCRAFTINDS) - Director Report

Company director report

Dear Members

Your Directors are pleasured to present the 32nd ANNUAL REPORT together with theAudited Financial Statements for the Financial Year 2015-16 ended on 31st March 2016.

1. FINANCIAL RESULTS:

Particulars 2015-16 2014-15
Operating Profit (Before Interest & Depreciation) 802.93 686.50
Less : Financial Cost 422.28 359.26
Profit before Depreciation 380.65 327.24
Less : Depreciation 173.78 184.99
Profit before Tax 206.87 142.25
Less : Provision for current Tax (after MAT credit) 51.45 29.33
(Add): MAT Credit - (27.39)
Less: Tax of earlier Year - 1.21
Less : Deferred Tax Liability 21.57 55.46
Profit after tax 133.85 83.64
Add: Balance Brought Forward from Previous year 656.59 582.21
Less: Effect of change in accounting policy for Depreciation - (9.26)
Balance carried to Balance Sheet 790.44 656.59

There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2016 and date of this report.

2. DIVIDEND:

With a view to conserve the resources for the working capital requirement of theCompany your Directors have not recommended any dividend for the year under review.

3. REVIEW OF OPERATIONS:

The Gross revenue from operations during the year under review was Rs 120.44 crores ascompared to Rs 97.27 crores during 2014-15.

The Operating Profit (before Interest and Depreciation) was Rs 802.93 lacs during theyear under review compared to Rs 686.50 lacs during 2014-15 showing an increase of 17%.The Profit before Tax for the year under review was Rs 206.87 lacs against Rs142.24 lacs during 2014-15. The Net Profit of the Company stood at Rs 133.85 lacscompared to Rs 83.64 lacs for the year 2014-15.

The Company has made export at FOB value of Rs 5976.25 lacs during the year underreview compared to Rs 3317.01 lacs during 2014-15. The management is of the firm opinionthat during the current year the export market will improve and in turn the exports ofthe Company will increase to a greater extent.

4. RECOGNITION AS EXPORT HOUSE:

The Director General of Foreign Trade on the basis of Export performance of theCompany has accorded / recognised the Company as Export House.

5. FINANCE:

The Company is enjoying Financial Assistance in the form of term loans and workingcapital facilities from State Bank of India.

6. DIRECTORS:

6.1 One of your Directors viz. Mr. Ashok Chhajer (DIN: 00280185) retires by rotation interms of the Articles of Association of the Company. However being eligible offershimself for reappointment.

6.2 The Board of Directors duly met 6 times during the financial year under review.

6.3 The Company has received necessary declaration from each Independent Director ofthe Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet withthe criteria of their independence laid down in Section 149(6) of the Act.

6.4 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating theperformance of the Board of Directors as well as that of its Committees and individualDirectors including Chairman of the Board Key Managerial Personnel/ Senior Managementetc. The exercise was carried out through an evaluation process covering aspects such ascomposition of the Board experience competencies governance issues etc.

6.5 DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act 2013 it is herebyconfirmed:

(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March 2016 beingend of the financial year 2015-16 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) that the Directors had 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.

7 . INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company’s policies safeguardingof assets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.

8. MANAGERIAL REMUNERATION:

REMUNERATION OF DIRECTORS:

Name of the Director & Designation Remuneration for the year 2015-16 % increase over last year Parameters Median of Employees Remuneration Ratio Commission received from Holding/ Subsidiary
1. Mr. Ashok Chhajer Managing Director Rs 1320000/- - - 294290 4.49 N.A.
2. Mr. Rishab Chhajer Jt. Managing Director Rs 660000/- - - 294290 2.24 N.A.

The Board of Directors has framed a Remuneration Policy that assures the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivateDirectors Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. All the Board Members and Senior Management personnelhave affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Company’swebsite-www.gujaratcraft.com.

9. KEY MANAGERIAL PERSONNEL:

% INCREASE IN REMUNERATION OF DIRECTORS & KMP:

Sr. No. Name of the Director & KMP Designation Percentage Increase (If any)
1. Mr. Ashok Chhajer Managing Director -
2. Mr. Rishab Chhajer Jt. Managing Director -
3. Mr. Raichand Golchha CFO 5.08
4. Ms. Anchal Bansal# Company Secretary N.A.

# Appointed w.e.f. 3rd June 2016

10. PERSONNEL AND H. R. D.:

10.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Companycontinued to give ever increasing importance to training at all levels and other aspectsof H. R. D.

The Number of permanent Employees of the Company are ninety seven. The relationshipbetween average increase in remuneration and Company’s performance is as per theappropriate performance benchmarks and reflects short and long term performance objectivesappropriate to the working of the Company and its goals.

10.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) ofCompanies Appointment & Remuneration of Managerial personnel) Rules 2014.

11. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT &SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans Guarantees and Investmentscovered under the provisions of Section 188 and 186 of the Companies Act 2013respectively are given in the notes to the Financial Statements attached to theDirectors’ Report.

All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm’s length basis. During theyear the Company had not entered into any transactions with related parties which couldbe considered as material in accordance with the policy of the Company on materiality ofrelated party transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website atwww.gujaratcraft.com.

12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act 2013 and rule8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy andTechnology Absorption forms part of this report and is given by way of Annexure- A.

13. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Report on Corporate Governance and ManagementDiscussion and Analysis (MDA) and a certificate regarding compliance with the conditionsof Corporate Governance are appended to the Annual Report as Annexure - B.

14. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) ofthe Companies Act 2013 from M/s. Pinakin Shah & Co. Company Secretaries Ahmedabad.The said Report is attached with this Report as Annexure – C.

The remarks of auditor and notes on accounts are self explanatory. As regards theobservation of the Auditors the Company has appointed Company Secretary w.e.f. 3rd June2016.

15. EXTRACT OF ANNUAL RETURN:

The extract of Annual return in Form – MGT-9 has been attached herewith as Annexure– D.

16. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate GovernanceReport.

17. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of thedepositories viz. NSDL & CDSL. ISIN for Equity Shares of the Company is: INE372D01019.

18. LISTING:

The Equity Shares of the Company are listed at BSE Limited and Ahmedabad Stock ExchangeLimited. The Company is generally regular in payment of Annual Listing Fees. The Companyhas paid Listing fees up to the year 2016-17.

19. GENERAL:

19.1. AUDITORS:

At the Annual General Meeting held on 24th September 2015 M/s. Kantilal Patel &Co Chartered Accountants Ahmedabad were appointed as statutory auditors of the Companyto hold office till the conclusion of the Annual General Meeting to be held in the year2017. In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the appointment of M/s. Kantilal Patel & Co Chartered AccountsAhmedabad as Statutory Auditors of the Company for the year 2016-17 is placed forratification by the shareholders.

The remarks of auditor and notes on accounts are self explanatory.

19.2 INSURANCE:

The Company’s properties including Building Plants and Machineries StockStores etc. continued to be adequately insured against risks such as fire riots strikesetc.

19.3 DEPOSITS:

The Company has not accepted any Deposits from general public or from Shareholdersduring the year under review.

19.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy which from time to time is reviewed by theAudit Committee of Directors as well as by the Board of Directors. The Policy is reviewedquarterly by assessing the threats and opportunities that will impact the objectives setfor the Company as a whole. The Policy is designed to provide the categorization of riskinto threat and its cause impact treatment and control measures. As part of the RiskManagement policy the relevant parameters for protection of environment safety ofoperations and health of people at work and monitored regularly with reference tostatutory regulations and guidelines defined by the Company.

19.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiary/ Associate Company / JV.

19.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management. All the Board Members and Senior Management personnelhave affirmed compliance with the code of conduct.

19.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There has been no significant and material orders passed by any regulators or courts ortribunals impacting the going concern status of the Company and its future operations.

19.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safeoperations. The Company’s policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

19.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013:

The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review the Company did not receive anycomplaint.

19.10 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.

20. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.

21. ACKNOWLEDGMENT:

Your Directors express their sincere gratitude for the assistance and co operationextended by Financial Institutions Banks Government Authorities Shareholders Suppliersand Customers.

Your Directors also wish to place on record their appreciation of the contribution madeby the employees at their levels towards achievements of the Company’s goals.

For and on behalf of the Board
Place : Ahmedabad. Rishab Chhajer Ashok Chhajer
Date : 20th July 2016 Joint Managing Director Managing Director

(A) CONSERVATION OF ENERGY:

Steps taken or impact on conservation of energy In line with the Company’s commitment towards conservation of energy all units continue with their efforts aimed at improving energy efficiency through innovative measures to reduce wastage and optimize consumption. The Company has installed Power factor panels so as to reduce overall power consumption.
Steps taken by the company for utilising alternate sources of energy No significant steps have been taken during the year under review
Capital investment on energy conservation equipments -

(B) TECHNOLOGY ABSORPTION:

Efforts made in Research and Development and Technology Absorption is as under:

1. Research & Development (R & D):
(a) Specific areas in which R&D carried out by the Company. New product development and improvement in Quality.
(b) Benefits derived as a result of the above R&D Increase in the range of products in its volume of contribution in increased sales turnover.
(c) Future plan of action To maintain improved quality of products through quality control.
(d) Expenditure on R&D NIL
2. Technology absorption adoption and : innovation: The Company does not envisage any technology absorption.

(C) FOREIGN EXCHANGE EARNINGS & OUTGO:

(Rs In lacs)
2015-16
Total Foreign exchange earnings 5976.25
Total Foreign Exchange used 5.69

 

For and on behalf of the Board
Place : Ahmedabad. Rishab Chhajer Ashok Chhajer
Date : 20th July 2016 Joint Managing Director Managing Director

Annexure- C

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Gujarat Craft Industries Limited

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s . Gu jarat Cr aft Indus tr ies L imit ed [CIN: L29199GJ1984PLC007130] (‘hereinafter called theCompany’) having Registered Office at Plot No. 431 Santej Vadsar Road Village:Santej Taluka: Kalol Dist: Gandhinagar 382 721. The Secretarial Audit was conducted in amanner that provided us a reasonable basis for evaluating the corporate conducts /statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992/ 2015

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not Applicable during the audit period)

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 / The Securities and Exchange Board ofIndia (Share based Employee Benefits) Regulations 2014 (Not Applicable during the auditperiod)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not Applicable during the audit period)

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (Not Applicable during the audit period)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (Not Applicable during the audit period); and

(vi) Various common laws applicable to the manufacturing and other activities of theCompany such as Labour Laws Pollution Control Laws Land Laws etc. and sector specificlaws such as The Recycled Plastics Manufacture and Usage Rules 1999 for which we haverelied on Certificates/ Reports/ Declarations/Consents/Confirmations obtained by theCompany from the experts of the relevant field such as Advocate Labour Law ConsultantsEngineers Occupier of the Factories Registered Valuers Chartered Engineers FactoryManager Chief Technology Officer of the Company Local Authorities Effluent TreatmentAdviser etc. and have found that the Company is generally regular in complying with theprovisions of various applicable Acts.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards SS – 1 & SS – 2 issued by The Institute ofCompany Secretaries of India.

(ii) Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Listing Agreement during the period under reviewthe Company has complied with the provisions of the Act Rules Regulations GuidelinesStandards etc. mentioned above subject to following observations:

- The Company did not have a whole time Company Secretary pursuant toSection 203 of the Companies Act 2013 and Rule 8 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 during the period under audit howeversince appointed w.e.f. 3rd June 2016.

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period the Company has not passed any specialresolution.

For PINAKIN SHAH & CO.
Company Secretaries
Place : Ahmedabad PINAKIN S. SHAH
Date : 20th July 2016 Proprietor
FCS: 2562
COP: 2932
FRN: S2010GJ134100

Note: This report is to be read with our letter of even date which is annexed asAnnexure – 1 and forms an integral part of this report.

ANNEXURE - 1

To

The Members

Gujarat Craft Industries Limited

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. We believe that the process and practices followed by us provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of the management. Our examination waslimited to the verification of procedure on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

For PINAKIN SHAH & CO.
Company Secretaries
Place : Ahmedabad PINAKIN S. SHAH
Date : 20th July 2016 Proprietor
FCS: 2562
COP: 2932
FRN: S2010GJ134100