Your Directors have pleasure in presenting the 45 th Annual Accounts of theCompany for the financial year ended 31st March 2017.
1. Financial Highlights
| || || |
Amount in Rs.Lacs
|Particulars ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Sale value of production ||551 ||1109 |
|Gross profit ||(87) ||34 |
|Interest ||232 ||225 |
|Cash loss ||319 ||191 |
|Dep & w/o ||279 ||53 |
|Exceptional Item ||220 ||(674) |
|Profit before tax ||(818) ||430 |
|Profit after tax ||(818) ||430 |
|Dividend ||- || |
In view of the operating loss suffered by the Company during the period under reportyour Directors are not in a position to recommend any dividend for the year 2016-17.
3. PRODUCTION AND SALES
The Company has not been operating its Uppal (Hyderabad) plant since May 2000 and atpresent only its Silvassa plant is working. As the banks suspended all the creditfacilities earlier made available the Company revised its business strategy by acceptingand executing job orders. This is reflected in continuance of business in spite of absenceof working capital facilities. The Company produced 7710 Mts of Conductor during the yearunder Report as compared to 14456 Mts in the previous year (2015-16) and 9492 Mts duringthe year before last year (2014-15). The production was less due to economic uncertaintiesand sluggish demand for conductors.
4. REFERENCE TO BIFR
The Company was declared as a sick industrial undertaking by BIFR in September 2001and Industrial Development Bank of India (IDBI) was appointed as the "OperatingAgency" to examine the viability of the Company and formulate a scheme for itsrevival. As required the Company submitted its Rehabilitation Proposal to IDBI and othersin November 2001 for their consideration. After a series of discussion at the instanceof the lending institutions the Company submitted its revised Rehabilitation Proposal inOctober 2003 and requested the institutions for its early consideration. After examiningthe proposal and further discussion the Lenders initially gave time to the Company upto30th September 2004 which was later on extended upto 30th June2005 to show significant operational improvement in its performance. The Lenders alsoadvised the Company to look into the possibility of one-time settlement of dues and theCompany earnestly pursued the matter with the Lenders.
BIFR vide its order dated 14.09.2007 confirmed its opinion of winding up in terms ofSection 20(1) of the Sick Industrial Companies (Special Provisions) Act. The Companypreferred an appeal and got stayed the aforesaid Order.
In the meantime the Company's efforts to make a breakthrough in the matter has bornefruit and IDBI Edelweiss ( assignee of IIBI and Canara Bank) & UTI have agreed forone-time settlement of their dues. As regards others modalities are being worked out. Itis hoped that with massive investment planned in Power Sector the situation is expectedto turn-around in favour of the Company.
5. Contract/arrangement with related party
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. Your Directors draw attention of the members to Note 41 to the financial statementwhich sets out related party disclosures.
6. Particulars of loans investments and guarantees
The Company did not give any loan make investment or provide guarantee u/s 186 of theCompanies Act 2013 during the financial year.
7. Management Discussion and Analysis
a. Business review and outlook
The power sector after going through a turbulent time for over a decade has startedlooking up due to reforms initiated by the successive Governments. This augurs well forthe aluminum industry particularly for those like us engaged in the manufacture andsupply of electrical conductors for overhead power transmission and distribution lines.
b. Internal Control System and their adequacy.
The Company has a proper and adequate system of internal controls with laid-downpolicies and procedures for all its operations and financial functions to see that all itsassets are safeguarded and protected against loss from any unauthorized use or dispositionand all financial records are maintained properly. The Company's Board has an AuditCommittee which consists of two independent Directors to review inter alia thesignificant findings of the internal audit.
c. Rehabilitation Scheme.
BIFR vide its order dated 14.09.2007 confirmed its opinion of winding up in terms ofSection 20(1) of the Sick Industrial Companies (Special Provisions) Act. The Companypreferred an appeal before the Hon'ble High Court of Andhra Pradesh which has stayed BIFRorder.
In the meantime the Company's efforts to make a break through in the matter has bornefruit and IDBI Edelweiss (assignee of IIBI and Canara Bank) & UTI have agreed for onetime settlement of dues. As regards others modalities are being worked out. It is hopedthat with massive investment planned in Power Sector the situation is expected to turn-around in favour of the Company.
d. Material developments in human resources/industrial relations.
The Company values human resource as one of its most important assets and isstrengthening it in line with its growth plans. The Company has always had an excellenttrack record of cordial and harmonious industrial relations. This year too the industrialrelations in the Company have been very cordial and not a single man-day was lost on thisaccount.
e. Cautionary Statement.
Statements in the Management Discussion and Analysis describing the Company'sobjectives projections estimates expectations may be forward-looking statements'within the meaning of applicable securities law and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make adifference to the Company's operations include economic conditions affecting demand/supplyand price conditions in the domestic and overseas markets in which the Company operateschanges in the Government regulations tax law and other statutes and other incidentalfactors.
8. Composition of Directors
The Board of Directors as at 31.03.2017 comprises five directors of which three arenon-executive. The Chairman is non-executive and the number of independent directors i.e.those who have no business relationship with the Company is two. The composition is asunder:
|Name of the Director ||Position |
|Executive || |
|Sri D C Galada ||Promoter & Managing Director & CEO |
|Sri Devendra Galada ||Promoter & Executive Director |
|Non-Executive Promoter || |
|Sri S M Kankaria ||Promoter & Chairman |
|Non-Executive Independent || |
|Sri M L Sachdeva ||Director |
|Ms Ameeta Trehan ||Director |
9. Meetings of each Director:
Four Board Meetings were held during the year the dates being 26.05.2016 11.08.201612.11.2016 and 11.02.2017. The last AGM was held on 30.09.2016.
The attendance record of the Directors at the Board Meetings and the last AnnualGeneral Meeting (AGM) is given below:
| || |
No. of other Directorships and other Committee Membership/Chairmanship.
|Name of the Director ||Board Meeting ||Last AGM ||Other Directorships ||Committee Memberships* (of which Chairman) |
|Sri S M Kankaria ||2 ||(Y/N) N ||3 || |
|D C Galada ||4 ||Y ||1 ||- |
|Devendra Galada ||4 ||Y ||- ||- |
|M C Galada ||3 ||N ||- ||- |
|M L Sachdeva ||4 ||N ||- ||- |
|S V Kanaka Seshu ||3 ||N ||- ||- |
|Ms Ameeta Trehan ||4 ||Y ||- ||- |
Note: Only three committees namely Audit Committee Shareholders/Investor GrievanceCommittee and Remuneration Committee have been considered.
10. Policy for selection of Directors
The Board formulated the following policy for selection of Directors and determiningtheir Independence.
a) The Company believes that an enlightened Board consciously creates a culture ofleadership to provide a long-term vision and policy approach to improve the quality ofgovernance. Towards this the Company ensures constitution of Board of Directors with anappropriate composition size diversified expertise and experience and commitment todischarge their responsibilities and duties effectively.
b) The Company recognizes the importance of Independent Directors in achieving theeffectiveness of the Board. The Company aims to have an optimum combination of ExecutiveNon-Executive and Independent Directors.
This Policy sets out the guiding principles for identifying persons who are qualifiedto become Directors and to determine the independence of Directors in case of theirappointment as independent directors of the Company.
a) Qualifications and Criteria
i) The Board shall review on an annual basis appropriate skills knowledge andexperience required of the Board as a whole and its individual members. The objective isto have a Board with diverse background and experience that are relevant for the Company'sglobal operations.
ii) In evaluating the suitability of individual Board member the following factors aretaken into account.
General understanding of the Company's business dynamics global business andsocial perspective;
Educational and professional background
Standing in the profession
Personal and Professional ethics integrity and values;
Willingness to devote sufficient time and energy in carrying out their dutiesand responsibilities effectively.
iii) The proposed appointee shall also fulfill the following requirements:
Shall posses a Director Identification Number;
Shall not be disqualified under the Companies Act 2013;
Shall give his written consent to act as a Director;
Shall endeavor to attend all Board Meetings and wherever he is appointed as aCommittee Member the Committee Meetings;
Shall abide by the Code of Conduct established by the Company for Directors andSenior Management Personnel;
Shall disclose his concern or interest in any company or companies or bodiescorporate firms or other association of individuals including his shareholding at thefirst meeting of the Board in every financial year and thereafter whenever there is achange in the disclosures already made;
Such other requirements as may be prescribed from time to time under theCompanies Act 2013 Equity Listing Agreements and other relevant laws.
b) Criteria of Independence
i) The Board shall assess the independence of Directors at the time ofappointment/reappointment and the Board shall assess the same annually. The Board shallre-assess determinations of independence when any new interests or relationships aredisclosed by a Director.
ii) The Independent Directors shall abide by the "Code for IndependentDirectors" as specified in Schedule IV to the Companies Act 2013.
c) Other directorships/committee memberships
i) The Board members are expected to have adequate time and expertise and experience tocontribute to effective Board performance. Accordingly members should voluntarily limittheir directorships in other listed public limited companies in such a way that it doesnot interfere with their role as directors of the Company. The Board shall take intoaccount the nature of and the time involved in a Director's service on other Boards inevaluating the suitability of the individual Director.
ii) A Director shall not serve as Director in more than 20 companies of which not morethan 10 shall be Public Limited Companies.
iii) A Director shall not serve as an Independent Director in more than 7 ListedCompanies and not more than 3 Listed Companies in case he is serving as a whole-timeDirector in any Listed Company.
iv) A Director shall not be a member in more than 10 Committees or act as Chairman ofmore than 5 Committees across all companies in which he holds directorships.
For the purpose of considering the limit of the Committees Audit Committee andStakeholders' Relationship Committee of all Public Limited Companies whether listed ornot shall be included and all other companies including Private Limited CompaniesForeign Companies and Companies under Section 8 of the Companies Act 2013 shall beexcluded.
11. Remuneration Policy
The following Remuneration Policy for Directors Key Managerial Personnel and otheremployees is followed
Galada Power and Telecommunication Ltd. (GPTL) recognizes the importance of aligningthe business objectives with specific and measureable individual objectives and targets.The Company has therefore formulated the remuneration policy for its directors keymanagerial personnel and other employees keeping in view the following objectives:
a) Ensuring that the level and composition of remuneration is reasonable and sufficientto attract retain and motivate to run the company successfully.
b) Ensuring that relationship of remuneration to performance is clear and meets theperformance benchmarks.
c) Ensuring that remuneration involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of thecompany and its goals.
This policy sets out the guiding principles for the Nomination and RemunerationCommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the Company.
a) Remuneration to Managing Director Executive Director and Key Managerial Personnel.
i) The Board on the recommendation of Nomination and Remuneration Committee shallreview and approve the remuneration payable to Managing Director and Executive Director ofthe Company within overall limits approved by the shareholders.
ii) The Board on the recommendation of the Committee shall also review and approvethe remuneration payable to the Key Managerial Personnel of the Company.
iii) The remuneration structure to the Managing Director Executive Director and KeyManagerial Personnel shall include the following components:
* Basic Pay
* Perquisites and Allowances
* Retiral benefits
b) Remuneration to Non-Executive Directors.
Non-Executive Directors shall be entitled to sitting fees for attending the meetings ofthe Board and the Committees thereof. The Non-Executive Directors shall also be entitledto reimbursement of expenses in addition to the sitting fees.
c) Remuneration to other employees
Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.
12. Declaration by Independent Director
The Company received necessary declarations from each Independent Director u/s 149 (7)of the Companies Act 2013 to the effect that he/she meets the criteria of independencelaid down in section 149(6) of the Companies Act 2013.
13. Board Evaluation
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and frame work adopted by the Board as envisaged in the Companies Act 2013.
14. Training of Independent Directors
Every new Independent Director of the Board attends an orientation programme to getfamiliarized with the Company's strategy operations product service marketsorganization structure finance human resources technology quality facilities and riskmanagement.
15. Committees of the Board
The following Committees were reconstituted with effect from 11.02.2017.
a. Audit Committee
|1 ||Ms Ameeta Trehan ||Chairman |
|2 ||Shri M L Sachdeva ||Member |
b. Nomination and Remuneration Committee
|1 ||Shri M L Sachdeva ||Member |
|2 ||Ms Ameeta Trehan ||Chairman |
c. Shareholder's/Investor's Grievance Committee
|1 ||Ms Ameeta Trehan ||Chairman |
|2 ||Shri M L Sachdeva ||Member |
16. Director's Responsibility Statement
a. In the preparation of the annual accounts for the year ended March 31 2017 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 312017 and of the profit ofthe Company for the year ended on that date;
c. The Directors 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. The Directors 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 are operatingeffectively.
f. The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
17. Auditors & Auditor's Report
1. Statutory Auditors
M/s Brahmayya & Co Chartered Accountants hold office till the conclusion of theensuing Annual General Meeting and three years have expired since the introduction of theCompanies act 2013 and hence are not eligible for reappointment. The Board has recommendedK S Rao & Co for appointment as Auditors and they have confirmed their eligibility tothe effect that their appointment if made would be within the prescribed limits underthe Act and that they are not disqualified for appointment.
2. Cost Auditors
The provision of the Companies Act 2013 in this regard are not applicable to theCompany.
3. Secretarial Auditor
The Board appointed S V Achary Practising Company Secretary to conduct SecretarialAudit from the financial year 2014-15 onwards. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark and was taken on record by theBoard in their meeting held on 26.05.2017. The Audit Report is attached herewith asAnnexure I.
18. Annual Return
Extract of Annual Return of the Company is attached herewith as Annexure II.
19. Risk Management
The Company manages monitors and reports on the principal risk and uncertainties thatcan impact its ability to achieve its strategic objectives. The Company's managementsystems organization structure processes standards code of conduct and behavior governthe business of the Company and manage the associated risks
20. Internal financial control
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
21. Conservation of energy technology absorption and foreign exchange earnings /outgo
A. Conservation of Energy
The Company has been vigorously implementing various measures for energy conservationsuch as installation of sophisticated power saving furnaces in the heat treatment andageing operations and carrying out modifications on a continuing basis for conservation ofenergy in other fields. The additional cost incurred is more than offset by the reductionin production cost due to lower consumption of energy per unit of output.
B. Technology Absorption
The efforts of the Company are focused on improvement of existing products andstandardization. There is no bought - out technology from foreign countries to be absorbedby the company.
C. Foreign Exchange Earnings and Outgo
There are no foreign exchange earnings and outgo during the period under report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review.
1. Details relating to deposits covered under Chpter V of the Act.
2. Issue of equity shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries
5. No significant or material orders were passed by the regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors further state that during the year under review there were no casesfiled pursuant to the sexual harassment of women at Workplace (Prevention Prohibition andRedressal) Act 2013
The Board of Directors would like to place on record their deep appreciation andsincere thanks for the continue cooperation guidance support and assistance providedduring the period under review by all the stake holders.
| ||By order of the Board |
|D C Galada ||Devendra Galada |
|Managing Director ||Executive Director |
|Place : Hyderabad || |
|Date : 14.09.2017 || |