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Gujarat Foils Ltd.

BSE: 531410 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE587F01017
BSE LIVE 15:40 | 18 Aug 11.42 0.02
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VOLUME 6280
52-Week high 31.85
52-Week low 9.65
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
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Sell Price 0.00
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OPEN 11.35
CLOSE 11.40
VOLUME 6280
52-Week high 31.85
52-Week low 9.65
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Foils Ltd. (GUJARATFOILS) - Director Report

Company director report

To

The Shareholders

Your Directors have pleasure in presenting to you this 24th Annual Report of yourCompany together with the Audited Accounts for the Financial Year ended on 31st March2016.

FINANCIAL RESULTS

Your Company's financial performance during the year has been summarized below:

(Rs. In Lakhs)
Particulars Year Ended 31st March 2016 Year Ended 31st March 2015
Gross Income from Operations 47030.74 50735.07
Less: Excise Duty 1805.42 2078.48
Net Income from Operations 45225.32 48656.59
Profit before Depreciation Finance cost and Taxation 4430.44 5740.51
Less: Depreciation and Amortization 969.61 894.43
Profit before Finance cost and Taxation 3460.83 4846.08
Less: Finance Cost 3358.03 3423.77
Profit before Taxation 102.80 1422.31
Tax Expense
- Current Tax 21.50 304.80
- Deferred Tax 237.06 445.62
- Earlier Years
Profit after Taxation (155.76) 671.89

REVIEW OF OPERATIONS/STATE OF COMPANY'S AFFAIRS

During the year under review the Company's Net Income from operations stood at Rs.45225.32 Lakhs as compared to Rs. 48656.59 Lakhs in the previous year therebyregistering a downfall of about 7.05%. Earnings before interest depreciation tax &amortization for the year under review stood at Rs. 4430.44 Lakhs against Rs. 5740.51Lakhs in the previous year thereby registering a drop of about 22.82 %. Profit before Taxregistered a drop of about 92.77% and the Company has incurred net loss of Rs. 155.76Lakhs as compared to net Profit of Rs. 671.89 Lakhs in the previous year. The Company hasincurred loss due to fall in material prices and lower margins in a challenging marketaffected the profits.

DIVIDEND

As no surplus is available and to conserve resources for operations of the Companyyour Directors have not recommended any dividend for the Financial Year ended 31st March2016.

TRANSFER TO RESERVES

The Board has adjusted loss of Rs. 155.76 Lakhs against previous years reserves inProfit and loss accounts and further your Company has proposed not to transfer any amountto General Reserves.

NO MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND THE DATE OF THE REPORT.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186

No Loan Guarantees and Investments covered under section 186 of the Companies areoutstanding as at 31st March 2016.

PUBLIC DEPOSITS

During the year under review the Company has not accepted any deposits from public andas such no amount on account of principal or interest on deposits from public wasoutstanding as on the date of the Balance sheet.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act 2013 and Equity Listing Agreementyour Company has formulated a Policy on Related Party Transactions which is also availableon Company's website at http://www.gujaratfoils.com/investors. The Policy intends toensure that proper reporting; approval and disclosure processes are in place for alltransactions between the Company and Related Parties.

No Related Party Transactions were entered during the year under review by yourCompany. Accordingly the disclosure of Related Party Transactions as required underSection 134(3) (h) of the Companies Act 2013 in Form AOC 2 is not applicable.

SUBSIDIARY COMPANY

The Company does not have any subsidiary company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

(a) In the preparation of the annual accounts for the year ended 31st March 2016 theapplicable accounting standards have been 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 the Company at the end of the financial year as on 31st March2016 and of the profit of the Company for that period;

(c) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively;

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

INTERNAL FINANCIAL CONTROLS

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory Costand Secretarial Auditors and the reviews performed by management and the relevant Boardcommittees including the Audit Committee the Board is of the opinion that the Company'sInternal Financial controls were adequate and effective during the financial year 2015-16.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review the tenure of Mr. Satish Chandra Gupta (DIN: 00025780)was completed on 31st March 2016 and the Board of Directors of the Company at its meetingheld on 28th April 2016 re-appointed him as an Additional Director to hold office uptothe date of ensuing Annual General Meeting. In terms of provisions of Section 149 of theCompanies Act 2013 it is proposed to re-appoint Mr. Satish Chandra Gupta as anIndependent Director for a period of 3 (Three) years. The Company has received notice inwriting from a member proposing the candidature of Mr. Satish Chandra Gupta asNon-Executive Independent Director of the Company at the ensuing Annual General Meeting.

Mr. Abhay Narendra Lodha (DIN: 00052194) Chairman of the Company liable to retire byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

During the year the non-executive directors of the Company had no pecuniaryrelationship or transactions with the Company.

Brief resume of the Directors proposed to be appointed / re-appointed are given in thenotice convening this Annual General Meeting.

The above appointments/re-appointments form part of the notice convening the AnnualGeneral Meeting and the resolutions are recommended for your approval.

Mr. Jitendra Jain was appointed as Chief Financial Officer with effect from 28 April2016 vice Mr. Jagjit Padgaonkar.

Mr. Rahul Singh was appointed as Company Secretary with effect from 14 July 2016 viceMr. Dipesh U. Gosar.

Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company are Mr. Prasenjit Promode Datta Whole Time Director Mr. Jitendra Jain ChiefFinancial Officer and Mr. Rahul Singh Company Secretary.

NUMBER OF MEETINGS OF THE BOARD

Four meetings of the Board were held during the year. For details of the meetings ofthe Board please refer to the Corporate Governance Report which forms part of thisreport.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

In a separate meeting of Independent Directors performance of non-independentdirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company's policy on Directors' appointment including criteria for determiningqualifications positive attributes and independence of a director as well as policyrelating to remuneration of Key Managerial Personnel and other employees and other mattersprovided in Section 178(3) of the Act is available on Company's website athttp://www.gujaratfoils.com/investors.

AUDIT COMMITTEE AND VIGILANCE MECHANISM

The Audit Committee comprises of Mr. Satish Chandra Gupta Mr. Viresh Shankar Mathurand Mr. Jagnnath Pandharinath Dange. The other details pertaining to Audit Committee areincluded in the Corporate Governance Report which forms part of this report. There hasbeen no instance of non-acceptance of recommendation of Audit Committee by the Board.

The Board of Directors has established vigil mechanism in the form of Whistle BlowerPolicy to enable directors and employees to make written Protected Disclosures (as definedin the policy) to the Vigilance Officer of the Company or to the Chairman of the AuditCommittee in exceptional cases for investigation. The policy provides for adequateprotection for whistle blowers and victimization of complainants and also provides forinitiation of disciplinary or corrective action. This functioning of vigil mechanism isperiodically reviewed by the audit committee. Your Company has posted the Vigil Mechanism/Whistle Blower Policy on its website http://www.gujaratfoils.com/investors.html

AUDITORS

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s H.R. Agarwal & Associates Chartered Accountants were appointed as StatutoryAuditors of the Company (having Firm Registration no. 323029E) from the conclusion of the22nd Annual General Meeting of the Company held on 29th September 2014 till theconclusion of the 27th Annual General Meeting to be held in the year 2019 subject toratification of their appointment at ensuing Annual General Meeting.

COST AUDITORS

Pursuant to Section 148(3) of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee had appointed M/s S. K. Agarwal & AssociatesCost Accountants as the Cost Auditors of the Company for the Financial Year 2015-2016 forconducting the audit of cost records.

The Board of Directors has re-appointed M/s. S. K. Agarwal & Associates as CostAuditors for the Financial Year 2016-17 to conduct the audit of cost record and they haveconfirmed that their appointment is within the limits of section 141(3) (g) of theCompanies Act 2013 and have also certified that they are free from any disqualificationsspecified under Section 148(5) read with Section 139 and Section 141(3) of the CompaniesAct 2013. Their remuneration approved by the Board is recommended for ratification bythe member at the ensuing Annual General Meeting.

SECRETARIAL AUDITORS

During the year Secretarial Audit was carried out by M/s. Umesh Ved & AssociatesCompany Secretaries and Secretarial Auditor of the Company for the financial year 2015-16.Secretarial Audit Report as required under the provisions of Section 204 under theCompanies Act 2013 is annexed herewith as an Annexure A and the report of theAuditor is self-explanatory.

AUDITORS' OBSERVATIONS

The Statutory Auditors' Report does not contain any qualifications reservations oradverse remarks.

As regards to the observations of Secretarial Auditor with regard to the late filing ofcouple of forms the directors hereby confirm that the default made was only of a technicalnature and the default has been made good by filing the respective forms with additionalfiling fees.

RISK MANAGEMENT

The Company has the risk assessment and mitigation procedures in place and the samehave been laid before the Board members from time to time.

CORPORATE SOCIAL RESPONSIBILITY

The Company has framed a Corporate Social Responsibility (CSR) Policy in compliancewith section 135 of the Companies Act 2013 and the said policy may be accessed on thewebsite of the Company http://www.gujaratfoils.com/investors.html. The annual report onthe Corporate Social Responsibility (CSR) Policy of the Company as per format prescribedin the Companies (Corporate Social Responsibility Policy) Rules 2014 is appended as an AnnexureB to this Report.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) of the Act the extract of annual return is given in AnnexureC in the prescribed Form MGT-9 which forms part of this report.

PARTICULARS OF EMPLOYEES

The employer employee relations remained cordial throughout the year. The Board placeson record its sincere appreciation for the valuable contribution made by employees acrossall levels of the organization.

Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of Companies Act 2013 and Rule 5 (1) Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure D tothis Report.

During the year under consideration there were no employees whose particulars arerequired under provisions of Section 197 of the Companies Act 2013 and Rule 5(2) &5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION 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 Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been constituted to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this Policy. There was no complaint received from any employeeduring the financial year 2015 -16 and hence no complaint is outstanding as on 31st March2016 for redressal.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI Listing Regulation is presented in a separate section forming part of theAnnual Report.

CORPORATE GOVERNANCE

Pursuant to SEBI Listing Regulation a detailed report on Corporate Governance dulycertified regarding compliances of its conditions by the Statutory Auditors M/s H.R.Agarwal & Associates Chartered Accountants is presented in a separate sectionforming part of the Annual Report.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required to be disclosed under section 134(3)(m) of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is appended as Annexure E tothis Report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for InvestorsShareholders and Employees of the Company for their continued support towards conduct andoperations of the Company.

Your Directors also wish to express their sincere gratitude to the Union Government andthe Government of various States as also to all the Government agencies Banks FinancialInstitutions Customers Vendors and other related organizations who through theircontinued support and cooperation have contributed towards the Company's growth andprogress during the year under review.

For and on behalf of the Board of Directors
Place: Mumbai Jagannath Pandharinath Dange Prasenjit Promode Datta
Date: 14 July 2016 Director Whole Time Director
DIN 01569430 DIN 00013414

ANNEXURE - D

STATEMENT OF DISCLOSURE OF REMUNERATION UNDER SECTION 197 OF THE ACT READ WITH RULE5(1)OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 AREGIVEN BELOW:

a. The ratio of the remuneration of each director to the median remuneration of theemployees percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year ended 31st March 2016:

Sr. No. Name of Directors and KMP Remuneration of Director & KMP for the Financial Year ended 31st March 2016 (in Rs.) Ratio of remuneration of each director to median remuneration of employees % increase in remuneration for the Financial Year ended 31st March 2016 provided for the purpose of section 197 (12) of the Act
1 Abhay Narendra Lodha 1 Chairman Non-Independent Non-Executive 120000a 0.29 50.00%
2 Prasenjit Promode Datta 6000000 14.81 4.18%
Whole Time Director – Executive
3 Satish Chandra Gupta 420000a 1.04 55.55%
Independent Director
4 Rahul Babulal Chhajed 210000b 0.52 -38.00%
Independent Director
5 Viresh Shankar Mathur 210000a 0.52 133.33%
Independent Director
6 Ankita Singh2 150000a 0.37 -
Independent Director
7 Jagannath Pandharinath Dange3 180000a 0.44 -
Independent Director
8 Jagjit Padgaonkar 3685500 9.10 -
Chief Financial Officer
9 Dipesh U. Gosar5 950000 2.34 -
Company Secretary
TOTAL 11715500

Note:

1. w.e.f. 1st August 2014 resigned from the post of Managing Director

2. w.e.f. 4th February 2015 appointed as director

3. w.e.f. 5th March 2015 appointed as director

a. Sitting fees

b. w.e.f. 11th August 2015 resigned from the post of director

b. There is 36.5% increase in the median remuneration of employees in the financialyear under review.

c. The number of permanent employees on the rolls of Company as on 31st March 2016 is84.

d. The explanation on the relationship between average increase in remuneration andCompany performance:

On an average employees received an annual increase of 9%. The individual incrementsvaried from 8% to 10% based on individual performance.

The increase in remuneration is in the line with the market trend. In order to ensurethat remuneration reflects Company's performance the performance pay is also linked withorganization performance apart from individual's performance.

e. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

Aggregate remuneration of Key Managerial Personnel (KMP) in FY 2015-16 (Rs.) 10755500
Revenue (Rs.) 4533474491
Remuneration of KMPs (as % of revenue) 0.24%
Profit before Tax (PBT) (Rs.) 10280151
Remuneration of KMP (as % of PBT) 104.62%

f. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:

Particulars 31st March 2016 31st March 2015 % Change
Market Capitalization (Rs.) 301006427 476935251 (36.89%)
Price Earnings Ratio -19.30 7.1 (371.83%)

g. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 9%. However during the course of the yeartotal increase is approximately 10% after accounting for promotion and other event basedcompensation revisions.

Increase in managerial Remuneration for the year was 10%.

h. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:

Particulars WTD CFO CS
Remuneration in FY 2015-16 (Rs.) 6000000 3685500 950000
Revenue (Rs.) 4533474491
Remuneration (as % of revenue) 0.13% 0.08% 0.02%
Profit before Tax (PBT) (Rs.) 10280151
Remuneration of KMP (as % of PBT) 58.36% 35.85% 9.24%

I. The key parameters for any variable component of remuneration availed by thedirectors:

During the year no variable component of remuneration was availed by the directors.

j. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:

None

k. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

ANNEXURE - E

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as per section 134(3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 for the year ended 31st March 2016.

i. Conservation of Energy:

The Company has a strong commitment towards energy conservation for the benefit of thenation and itself. Efforts to optimize process parameters modernize & upgradetechnology as well as equipments with the objective of increasing energy productivity arecontinuous and ongoing. Company ensures optimization of resources and is committed tocontrol wastages and avoid air and water pollution.

It is a fact that conventional source of energy is limited in this universe. In thecontext it is prime responsibility of all of us to ensure optimum utilisation of energy.There are two fold benefits by ensuring the same:

• Every unit of power saved is equivalent to same quantity of power generatedwithout any additional cost & without generating Green House Gases.

• Such savings helps us in reducing our cost of production.

A) Power and Fuel Consumption UOM 2015-2016 2014-2015
1) Electricity
a) Purchased
Unit (KWh) 4922642 5254909
Total Cost (Rs. in Lakhs) 332.98 409.85
Cost / Unit (Rs.) 6.76 7.80
b) Own Generation
i) Through Diesel Generator Unit
Unit (Ltr.) 472 1356
Total Cost (Rs. in Lakhs) 0.25 0.28
Cost/Unit (Rs.) 53.96 20.67
ii) Through Steam Turbine Generation Units NIL NIL
iii) Through Wind Mill
Unit (KWh) 1112118 863451
Total Cost (Rs. in Lakhs) 79.27 58.08
Cost / Unit (Rs.) 7.13 6.72
2) Coal
Quantity Tonnes NIL NIL
Total Cost (Rs. in Lakhs) NIL NIL
Average Rate (Rs.) NIL NIL
3) Furnace Oil
Quantity K. Ltrs NIL NIL
Total Cost (Rs. in Lakhs) NIL NIL
Average Rate (Rs.) NIL NIL
4) Others/Internal Generation
Quantity K. Ltrs NIL NIL
Total Cost (Rs. in Lakhs) NIL NIL
Rate/ Unit (Rs.) NIL NIL

B. Technology Absorption Research & Development and resultant benefits:

It is a fact that high speed foil rolling operations are very prone to fire hazards.However the Company could stabilize the process parameters in such a way that we did notencounter even a single instance of fire at our rolling operations. To achieve thismilestone your Company had taken following corrective actions:

• Implementation of additional Heat Exchanger in rolling oil circulation system.

• Fundamental redesigning in the Achenbach Mill.

• Introduction of Low Voltage High resolution Audio / Video Camera surveillancesystem.

As a result of various technological up-gradations various direct Pharma customershave been added by the Company during the Financial Year 2015-16.

C. Foreign Exchange Earnings & Outgo

(Rs. in Lakhs)
Particulars 2015-2016 2014-2015
Foreign exchange earned 249.84 156.02
CIF value of imports 442.52 180.48
Expenditure in foreign currency - -

 

For and on behalf of the Board of Directors
Place: Mumbai Jagannath Pandharinath Dange Prasenjit Promode Datta
Date: 14th July 2016 Director Whole Time Director
DIN 01569430 DIN 00013414