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Sejal Glass Ltd.

BSE: 532993 Sector: Industrials
NSE: SEZAL ISIN Code: INE955I01036
BSE LIVE 13:48 | 23 Oct 5.08 0.18
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NSE 12:54 | 23 Oct 4.45 -0.15
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OPEN 5.08
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VOLUME 53
52-Week high 11.25
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 17
Buy Price 4.66
Buy Qty 10000.00
Sell Price 5.08
Sell Qty 47.00
OPEN 5.08
CLOSE 4.90
VOLUME 53
52-Week high 11.25
52-Week low 3.95
P/E
Mkt Cap.(Rs cr) 17
Buy Price 4.66
Buy Qty 10000.00
Sell Price 5.08
Sell Qty 47.00

Sejal Glass Ltd. (SEZAL) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting their 18th Annual Report together with the Audited Accounts of the Company for the year ended March 31 2016 :

1. Financial Results :

The Financial Performance of your company for the year ended March 31st 2016 is summarised below

(Rs in Lakhs)

FY 2015-16FY 2014-15
Revenue from Operations14161440
Other Income308840
Total Revenue17242280
Profit / (Loss) before Finance cost and Depreciation / Amortizations(919)(888)
Less : Finance Cost488927
Less: Depreciation / Amortisation370482
Net profit/(Loss) before Exceptional items and Tax(1777)(2297)
Exceptional Items
(Loss)/Profit on sale of Assets4943
Prior period (Expenses) / Income(304)(47)
Provision for Contingency Doubtful Receivables Loans and advances other current & non-current assets and other liabilities(10082)(1650)
Net profit/(Loss) before tax(12114)(3951)
ii. Deferred Tax(2242)
Prof it/(Loss) for the year(12114)(6193)

2. Operational Review:

During F.Y 2015-16 your company's revenue from operations was marginally lower at '1416 Lakhs as against ' 1440 Lakhs for the year ended 31st March 2015. Paradigm shift in Bank's approach to lending resulting in lower and slower disbursal to the housing and commercial sectors bank's reluctance to extend working capital facilities especially to stressed businesses had impacted the growth of your Company. Needless to mention that year under review had been another challenging year battling many fronts.

Consequently the Company's operations resulted in a Net Loss before Exceptional items and Tax of '1777 Lakhs compared to the Net loss of ' 2297 Lakhs for the previous financial year ended 31st March 2015.

The Indian Accounting Standards (Ind. AS) prescribed under section 133 of the Companies Act 2013 and notified by Ministry of Corporate Affairs (MCA) would be mandatorily applicable to your company from F.Y. 2017-18 and the comparatives for the F.Y. 2016-17 needs to be provided from the Transition date of 1st April 2016. In order to comply with the Ind. AS your Directors' have reviewed the carrying amounts of assets and liabilities as at 31st March 2016. Though the Board opines that the carrying values of Current Assets Loans and advances are realizable keeping in view the adherence to the Accounting standards Provision of ' 10082 Lakhs had been made in the year under review for Doubtful Receivables Loans and Advances estimated reduction in realizable values of other Current and Non-current asset and for other Liabilities.

The Net Loss for the F.Y. 2015-16 after considering the aforesaid provision of '10082 Lakhs was at '12114 Lakhs against the net loss of ' 6193 Lakhs in the previous year.

3. Management Discussion & Analysis

A. INDUSTRY AND COMPANY OVERVIEW

The Indian economy is one of the bright spots in the slowing global world. India is expected to be one of the fastest growing emerging markets (amongst 1 trillion USD GDP size economies) next year. India's growth story has largely remained positive on the strength of domestic absorption and the country has registered a robust and steady pace of economic growth in 2015-16 as it did in 2014-15. Additionally its other macroeconomic parameters like inflation fiscal deficit and current account balance have exhibited distinct signs of improvement. Wholesale price inflation has been in negative territory for more than a year and the all-important consumer prices inflation has declined to nearly half of what it was a few years ago. It appears that conditions do exist for raising the economy's growth momentum and achieving growth rates of 8 per cent or higher in the next couple of years. At the same time growth in 2016-17 may not pick up dramatically from the levels achieved in 2015-16 as the possibility of slow global economic growth and financial sector uncertainties still loom large. Despite global headwinds and a truant monsoon India registered robust growth of 7.2 per cent in 2014-15 and 7.6 per cent in 2015-16 thus becoming the fastest growing major economy in the world.

Your Company operates in the Glass processing segment with a wide range of product processes. The product processes consist of Toughened glass Heat strengthened glass Insulated glass Laminated glass Decorative glass and fire rated glass.

B. GLASS INDUSTRY OVERVIEW

 The World Flat Glass demand is set to increase @ 6.6% per annum to 102$ billion by 2018.

 Asia/Pacific Region to contribute maximum and will see the fastest gains in the demand.

 Growth will be driven by rising manufacturing of higher value products like Electronic displays.

 Other major contributors are Architectural Automotive Solar Energy Consumer products.

 The Global Market for Flat Glass is roughly around 41 Million tonnes comprising ;

 25 M tons high quality float glass

 3 M tons sheet glass

 2 M tons rolled glass

 1 M tons lower quality float (Excluding bottles containers fibre glass)

 Further processing (laminating toughening coating and silvering for use typically in insulating glass units or automotive glazings) of high quality float glass.

 The domestic flat glass market is highly under penetrated. Per capita glass consumption in India stands at a low of 0.7 kg as compared with 11 kg in US and 2-5kg in South East Asian countries. Due to the low per capita consumption there is a huge growth potential for float glass in India. In the past few years the demand for float glass has witnessed a CAGR of 20%. The total float glass manufactured in India is 1 m tones of which 77% is consumed locally.

 Over the past few years glass demand has outpaced the GDP

 Industry showed good growth globally supported by China

 Long-term glass demand is predicted to grow @ 4 % pa

 The industry was running at around 90 % capacity utilization globally

 Drivers for demand growth for glass

 Economic growth

 Legislation and regulations concerning safety noise attenuation

 Energy conservation

 Glass content in buildings and vehicles continue to increase influenced by architects and car designers

 Demand for value-added products is growing at a faster rate than demand for basic glass enriching the product mix and boosting the sales line

 Value-added products are delivering greater functionality to vehicle glazing and adding a further growth dimension to automotive glazing sales

 Building Products is by far the largest sector catering to 36 Million tonnes with Automotive catering to 5 Million tonnes and Special applications of glass caters to a very small component in volume terms.

 The glass processing industry in India accounts for about 1400 tonnes per annum in volume terms and ' 2520/- crores in value terms and which is further growing @ 25% per annum.

 The industry trend in India for Processing glass is;

 Architectural - 75%

 Automotive - 25%

 The rising sectors that shall further provide impetus for increase in the demand for glass;

 Renewable Energies

- Solar Energy

 Tourism

 Health Tourism

 Infrastructure

- Hospitality

- Residential Housing

- Airports

- Metro /BRTS

- Smart cities

Automotive

 The 'Make in India' concept recently introduced by our Hon'ble Prime Minister will help the central government to boost the industrial developers.

 'Digital India' - A program to transform India into digital empowered society and knowledge economy and help by the central government will boost digital portal sales in India.

 The Hon'ble Prime Minister also has a vision of developing 'One hundred Smart Cities' as satellite towns of larger cities by modernizing the existing mid-sized cities.

C. HUMAN RESOURCES

The number of employees as on March 31 2015 was 122 and the number of employees as on March 31 2016 was 122. The morale of the employees at the factory and the corporate office remained high during the year under review. The industrial relations were cordial and harmonious at the manufacturing unit of the Company at Silvassa and the management thoroughly acknowledges the support from the employees at all levels.

D. INTERNAL CONTROL SYSTEMS

A strong internal control system is pervasive in the company. The company has documented a robust and comprehensive internal control system for all the major process to ensure reliability of financial reporting

The Company has in place adequate internal financials controls commensurate with the size scale and complexity of its operations. The company has policies and procedures in place for ensuring proper and efficient conducts of its business the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has an effective internal audit function.

E. RISKS AND CONCERNS

Your Company evaluates potential risks and has evolved over the years a comprehensive risk-management strategy. It takes into account changing market trends competition scenario emerging customer preferences potential disruptions in supplies and regulatory changes among others. All the risks and concerns as foreseen by the management are properly documented in a Risk Management Framework which is reviewed by the Board from time to time.

4. Share Capital

During the year under review your Company's Authorized Issued Subscribed and Paid up Share Capital remained unchanged.

5. Dividend

In view of the loss for the year and the accumulated losses of the previous year your Directors are unable to recommend any dividend for the year ended March 31 2016.

6. Directors and KMPs

 During the year under review the Board of Directors in its meeting held on February 09 2016 has subject to the approval of the shareholders re-appointed Mr. Amrrut S. Gada as Managing Director of the Company for a further period of 5 years without any remuneration effective from 1st April 2016 till 31st March 2021. Mr. Amrrut S. Gada shall be liable to retire by rotation pursuant to the provisions of Section 152 of the Companies Act 2013.

 The Company appointed Mr. S. Sivaramakrishnan as the Chief Executive Officer of the Company with effect from April 04 2016. Mr. Sivaramakrishnan has over 42 years of rich experience in various leadership roles across industries. He was the CEO of IL&FS Trust Company Ltd. the biggest corporate trustee Company in India for a period of about eight years. Prior to joining IL&FS Trust Company Ltd. he has held senior managerial positions in different multinational and Indian corporates. Mr. Sivaramakrishnan is a Chartered Accountant Cost Accountant as well as holds an MBA degree from (IIM Ahmedabad).

Pursuant to section 203 the Companies Act 2013 the appointment of following managerial personnel were formalized as Key Managerial Personnel (KMP) of the Company:

Mr. Amrut S. Gada - Chairman & Managing Director.

Mr. Mitesh K Gada - Executive Director

Mr. S. Sivaramakrishnan - Chief Executive Officer (CEO)

Mr. A. Venkataramanan - Chief Financial Officer (CFO)

Mr. Ashwin S. Shetty - G.M. Compliance Company Secretary

All the three independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act 2013.

7. Extract of Annual Return

Pursuant to Section 134(3)(a) extract of Annual Return in Form MGT-9 has been annexed herewith as Annexure 'A'.

8. Corporate Governance

The Company has complied with the Corporate Governance requirements under the Companies Act 2013 and as per Listing Agreement and SEBI Listing Regulations. A Separate Section on Corporate Governance Practices followed by the Company together with the Certificate from M/s. D. M. Zaveri & Co Practicing Company Secretary Mumbai appearing elsewhere in this report forms an integral part of this report.

9. Public Deposits

During the year under review your Company has not accepted any deposits from public/members in pursuance of section 73 of the Companies Act 2013 read with Companies [Acceptance of Deposits] Rules 2014. As at 31st March 2016 the Company has outstanding fixed deposit of Rs. 134265004/- (Including accrued Interest).

Due to severe liquidity constraints the interest and repayment of matured deposits have remained unpaid during the year under review.

Your Company had made an application to Hon'ble Company Law Board (CLB) under the provisions of section 74(2) of the Companies Act 2013 for seeking extension of time for repaying the outstanding fixed Deposits along with interest thereon. The Hon'ble Company Law Board (CLB) has vide order dated 29.02.2016 granted the Company extension of time till March 31 2017 to repay the matured fixed deposit along with interest in monthly instalments starting from April 2016.

10. Sexual Harassment of Woman at Work place (Prevention Prohibition and Redressal) Act 2013.

During the year under review we report that no case of sexual harassment of women was filed under the Sexual Harassment of Woman at Work place (Prevention Prohibition and Redressal) Act 2013.

11. Training of Independent Directors

Your Company's Independent Directors are highly qualified and have been associated with corporate and business organizations. They all understand Company's business and activities very well however pursuant to the Listing Provisions the Board has shown all the Independent Director Company's business and manufacturing activities and were also introduced to Company's staff. Presentations are made by Managing Director and Senior Management team providing an overview of strategy operations and functions of the Company. An opportunity is provided to the Directors to interact with senior leadership of the Company and help them to get ground level information on the Company's services offering Markets organization structure Finance Human Resource Technology Risk Management.

12. Directors Responsibility Statement

Your Company's Directors confirm:

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

(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31st March 2016 and of the profit and loss of the Company for the financial year;

(iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the directors had prepared the annual accounts on a going concern basis; and

(v) the directors in the case of a listed company had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

13. Auditors

The Statutory Auditors M/s. D.D. Mehta & Co. have expressed their unwillingness to be re-appointed as the Statutory Auditors of the company. The Board Of Directors have recommended the appointment of M/s. Shah Parmar & Mehta Chartered Accountants as the statutory auditors in place of the retiring auditors M/s. D.D. Mehta & Co.

14. Secretarial Audit

The Board of Directors in their meeting held on February 09 2016 on the recommendations of the Audit Committee in accordance with the provisions of Section 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 has appointed M/s. D. M. Zaveri & Co.to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is attached as Annexure B'.

Company's Explanations to the Secretarial Auditors Observations:-

1) As informed in the Secretarial Auditors Report the Company Law Board (CLB) vide its order dated 29.02.2016 extended the time for repayment of matured fixed deposit till March 2017.

In View of above the none of the directors of the company are disqualified to act as Directors under provisions of 164(2) of the Companies Act 2013.

REFLECTING VALUES

2) The company has corresponded vide letters to the Sales Tax authorities requesting release of the attachment of the said Banking account so as to enable the company to deposit the amount of '100063/- in Investors Educations & Protection Fund (IEPF).

As soon as the sales tax authorities accede to request of the company and release the said attachment the company shall immediately do the needful in the matter.

3) The loans and advances were given by the company to the persons in which directors are interested out of the surplus fund in the earlier years. No further loans and advances have been given during the year under review to the persons in whom directors are interested. The said loans and advances have been given in the ordinary course of business and shall be recovered in due course. An amount of ' 8000000./-(approximately) has been recovered out of the said loan and advances during the period under review.

4) The company is in the process of filling the said E-forms during the Current financial year.

15. Cost Auditors

In conformity with the directives of the Central Government your Board of Directors has appointed M/s. V V & Associates Cost Accountants having office at 8 Om Kadambari Co Operative Housing Society Ltd. B.T. Marg Dahisar West Mumbai - 400 068 as Cost Auditor for the year 2015-16. Appointment of Cost Auditor for the year 2016-17 has also been done by the Company.

16. Related Party Transactions:

All related party transactions during the year under review were on an arm's length basis and were in the ordinary course of business and were not material as per the Related Party Transaction Policy of the Company.

17. Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo.

The Company is undertaking the necessary energy Conservation activities in accordance with the provisions of Section 134(3)(m) of the Companies Act 2013 read with Companies (Accounts) Rules 2014. Information on Conservation of energy Technology Absorption and foreign Exchange is given as Annexure 'C' to this report.

18. Particulars of Loans Guarantees and Investments:

The particulars of loans guarantees and investments have been disclosed in the financial statement.

19. Vigil Mechanism/Whistle Blower Policy:

The Company has established a Vigil Mechanism/Whistle Blower Policy for Directors and employees to report genuine concerns or grievances including unethical behavior fraud or violation of the Company's Code of Conduct. The policy is on the website of the Company.

20. Directors Performance Evaluation

The performance evaluation of each Director of the Board was carried out by the Nomination and Remuneration Committee at its meeting held on February 09 2016 as per the criteria set by it earlier. The performance evaluation of the non-independent Directors the Board as a whole and the Chairman of the Board was carried out by the independent Directors at their separate meeting held on March 28 2016. The Board of Directors at its meeting held on May 30 2016 reviewed the reports of evaluation received from the Nomination and Remuneration Committee and the independent Directors and also the functioning of the Committees of the Board and each Director and found the performance of the board the Committees and all the individual Directors to be satisfactory. The Company held Four (4) Board Meetings during the year under review.

21. Remuneration Policy

The statement containing particulars of employees as required under 197(12) of the Companies Act 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is not applicable to the Company as no employees were in receipt of remuneration above the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure 'D' and forms part of this Report.

22. Corporate Social Responsibility Policy

As per section 135 of the Companies Act 2013 the Company is not required to undertake any CSR activities for the financial year 2015-16 and accordingly information required to be provided under Section 134 (3) (o) of the Companies Act 2013 read with the Rule 9 of the Companies (Accounts) Rules 2014 in relation to disclosure about Corporate Social Responsibility are currently not applicable to the Company.

23. Cautionary Statements

This Directors Report and the Management Discussion and Analysis Report may contain certain statements which are futuristic in nature. Such statements represent the intentions of the Management and the efforts being put in by them to realize certain goals. The success in realizing these goals depends on various factors both internal and external. Therefore the investors are requested to make their own independent judgments by taking into account all relevant factors before taking any investment decision.

24. Acknowledgement

Your Directors would like to express their appreciation for the support and Co-operation received from financial institutions company's bankers government authorities and shareholders during the year under review. The Company wishes to place on record their sincere appreciation for significant contribution by all employees toward the success and growth of the Company.

For and on behalf of the Board of Directors
Sd/-
Amrut S. Gada
Chairman and Managing Director
Place: Mumbai
Date: August 12 2016