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GKB Ophthalmics Ltd.

BSE: 533212 Sector: Consumer
NSE: GKB ISIN Code: INE265D01015
BSE 00:00 | 20 Jul 132.05 -6.90
(-4.97%)
OPEN

139.00

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139.00

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132.05

NSE 05:30 | 01 Jan GKB Ophthalmics Ltd
OPEN 139.00
PREVIOUS CLOSE 138.95
VOLUME 811
52-Week high 209.20
52-Week low 96.00
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 139.00
CLOSE 138.95
VOLUME 811
52-Week high 209.20
52-Week low 96.00
P/E
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GKB Ophthalmics Ltd. (GKB) - Director Report

Company director report

DIRECTORS' REPORT

Dear Shareholders

Your Directors are pleased to present their 35th Annual Report and the Audited Accountsof the year ended March 31 2017.

FINANCIAL RESULTS :

Rs. in lakhs

2016-17 2015-16
a) Sales & Other Income 3978.18 3347.93
b) Profit/Loss before Depreciation and Tax (44.03) (278.67)
c) Provision for Depreciation 133.63 142.26
d) Provision for Tax (28.87) (394.87)
e) Exceptional Items 269.77 2181.91
f) Profit after Depreciation and Tax 63.24 1366.09
g) Balance from previous years 1561.52 195.43
h) Balance carried forward 1624.76 1561.52

OPERATIONS :

During the year under review the turnover of the Company was higher to the tune of Rs.3978.18 lakhs compared to Rs. 3347.93 lakhs in the previous financial year due toincrease in sale of plastic lenses and the trend is expected to continue during thecurrent financial year.

Exceptional item of Rs. 269.77 lakhs was due to sale of entire stake of the Company inPrime Lenses Private Limited.

DIVIDEND :

With the view to conserve the resources your Directors regret their inability torecommend any dividend for the year 2016-17.

No amount has been transferred to reserve for the financial year ended March 31 2017.

SHARE CAPITAL :

The paid up equity share capital as on March 31 2017 was Rs. 415.35 lakhs. There wasno change in the share capital of the Company during the year under review.

SUBSIDIARIES :

The Company has a Wholly Owned Subsidiary namely GKB Ophthalmics Products FZESharjah UAE. The Lens Company NJ USA is a Wholly Owned Subsidiary of GKB OphthalmicsProducts FZE.

The proposal for winding up of GKB Ophthalmics GmbH is pending for approval withReserve Bank of India Mumbai.

A statement under Section 129(3) of the Companies Act 2013 containing salientfeatures of the financial statement of subsidiaries in Form AOC-1 is annexed herewith asAnnexure - I. In terms of Section 136(1)(a) of the Companies Act 2013 the AuditedAccounts of the subsidiaries are placed on website of the Company at www.gkb.net. A copyof the audited financial statements in respect of each of the subsidiaries will be madeavailable to interested shareholders upon a written request as per Section 136(1) (b) ofthe Act.

The audited accounts of the subsidiaries are also available at the Registered Office ofthe Company for inspection during business hours.

ACCREDITION : The company has been accredited with ISO 9001:2008 by TUV Nord.

CHANGE IN NATURE OF BUSINESS IF ANY :

There has been no change in the nature of business of the Company during the year2016-17.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Gaurav Gupta will retire by rotation pursuant to Articles of Association of theCompany being eligible offers himself for reappointment.

Brief resume together with other relevant details of Mr. Gaurav Gupta are given in NoteNo. 10 of the Notice for the ensuing Annual General Meeting.

Pursuant to provisions of Section 2 (51) and Section 203 of the Companies Act 2013read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 the Board of Directors have designated the following existing officers of theCompany as Whole-Time Key Managerial Personnel.

Mr. K. G. Gupta Managing Director and Mr. Noel da Silva CFO & Company Secretaryare Whole-Time Key Managerial Personnel of the Company .

SEPARATE MEETING OF THE INDEPENDENT DIRECTORS :

In terms of Section 149 (8) read in terms of schedule IV the Independent Directorsheld a Meeting on March 27 2017 without the attendance of Non-Independent Directors andmembers of Management. All the Independent Directors were present at the meeting.

At this meeting the Independent Directors :

1. Reviewed the performance of the Non-Independent Directors and the Board as a whole.

2. Reviewed the performance of Chairperson taking into account the views ofNon-Executive Directors.

3. Assessed the quality quantity and timeliness of flow of information between theCompany Management and the Board that is necessary for the Board to effectively andreasonably perform their duties.

4. Discussed and decided about the familiarization of Independent Directors' programmeconducted by the Company and also views of the Independent Directors on thefamiliarization programmes.

The Independent Directors have confirmed that they meet with the criteria ofIndependence laid down under the Act and Listing Regulations.

INDEPENDENT DIRECTORS DECLARATION

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 of the Companies Act 2013 and provisions of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 stating that they meet thecriteria of independence as provided therein.

MEETINGS OF THE BOARD OF DIRECTORS :

During the year under review four Board Meetings were held. Further details are givenin Corporate Governance Report forming part of this Report.

The maximum gap between two Board Meetings held during the year was not more than 120days.

AUDIT COMMITTEE :

As provided in section 177(8) of the Act the information about composition of AuditCommittee and other details are given in Corporate Governance Report. The Board hasaccepted the recommendations of the Audit Committee.

The Audit Committee is comprising of Mr. Sadashiv Shet as Chairman Mr. Gaurav GuptaMr. Anil Palekar Mr. Joseph A.A. D'Costa and Mr. Christopher Hickman as members.

NOMINATION AND REMUNERATION COMMITTEE :

The Nomination and Remuneration Committee has formulated the criteria for determiningqualifications positive attributes and independence of a director relating toremuneration for directors key managerial personnel as provided under section 178(3) ofthe Companies Act 2013 and Listing Regulations.

The Remuneration Policy is stated in the Corporate Governance Report which is part ofthis report. Further details have been disseminated on the Company's website www.gkb.net

PERFORMANCE EVALUATION :

The Board evaluated the performance of the Board as a whole committees of the Boardand the performance of individual directors including the Chairman of the Board pursuantto Regulation 17(10) of the Listing Regulations. The Independent Directors also carriedout the performance evaluation in terms of Part VIII of Schedule IV of the Companies Act2013 in their meeting held on March 27 2017.

The details of the Performance Evaluation carried out is provided in the CorporateGovernance Report which is a part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to provision of Section 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability hereby state and confirm :

a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures.

b) that they have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of financial year and of theProfit and Loss of the Company for that period;

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

d) that they have prepared the annual accounts on a going concern basis;

e) that they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively; and

f) that they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

AUDITORS :

M/s. Sharp & Tannan (Firm Registration No. 109982W) Chartered Accountants havebeen Statutory Auditors of the Company and they are retiring at the ensuing Annual GeneralMeeting. As a part of their internal reorganization they are seeking appointment in thename of Sharp & Tannan (Firm Registration No. 127145W) for the remaining term asavailable under the provisions of Companies Act 2013. The Board of Directors of theCompany at their meeting held on May 29 2017 approved the appointment and recommendedthe members to approve the same.

M/s. Sharp & Tannan have confirmed that the appointment if made would be withinthe limits specified under Section 141(3) of the Companies Act 2013 and that they are notdisqualified to be appointed as Statutory Auditors as per provisions of Section 139 and141 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.

AUDITORS' REPORT:

In respect of the observations made by the Auditors in their Report the Board'sresponse thereon is as follows:

a) Paragraphs (ii) and (vii)(a) of the Annexure 'A' referred to in paragraph 1 of theAuditor's Report are self explanatory. b) With regard to Paragraph (iv) we are in theprocess of making alternative arrangements to release the Corporate Guarantees given toBanks.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS :

There is no significant or material order passed by any Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.

INTERNAL FINANCIAL CONTROL :

As per Section 134 (5) (e) of the Companies Act 2013 read with Rule 8 (viii) ofCompanies (Accounts) Rules 2014 the Board has laid the Internal Financial Control to befollowed by the Company and that such Internal Financial Controls are adequate and areoperating effectively.

As per Section 143(3)(i) of the Companies Act 2013 a report issued by M/s. Sharp& Tannan Statutory Auditors of the Company is attached with their IndependentAuditor's Report which is self explanatory.

RISK MANAGEMENT POLICY :

The Company has constituted the Risk Management Committee which has formulated RiskManagement Policy for the Company. The committee identifies and assesses the variousbusiness risks and mitigates these risks by determining a response strategy.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 :

Particulars of loans guarantees given and investments made during the year as requiredunder Section 186 of the Companies Act 2013 and Schedule V of the Listing Regulations areprovided in Notes 3 6 8 11 and 17 of the Financial statements.

RELATED PARTY TRANSACTIONS :

All transactions entered into with related parties pursuant to Section 188 of theCompanies Act 2013 and Regulation 23 of Listing Regulations during the year were atarm's length basis and in ordinary course of business. Therefore disclosure in FormAOC-2 is not required.

EXTRACT OF ANNUAL RETURN :

As required as per Section 92(3) of the Companies Act 2013 and the Rules framedthereunder the extract of the Annual Return in Form MGT-9 is annexed herewith asAnnexure - II.

CORPORATE GOVERNANCE :

A separate section on Corporate Governance practices followed by the Company togetherwith certificate from the Practising Company Secretary confirming compliance forms a partof this Annual Report as per Listing Regulations.

SECRETARIAL AUDIT:

As per provisions of Section 204 of the Companies Act 2013 read with Rule 9 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report submitted by Ms. Girija Nagvekar Practising Company Secretaryfor the financial year ended March 31 2017 forming part of this Annual Report isannexed herewith as Annexure - III. The Secretarial Audit Report is self explanatory andrequires no comments.

CORPORATE SOCIAL RESPONSIBILITY :

Provisions of Section 135 of the Companies Act 2013 and Rules made thereunderregarding Corporate Social Responsibility are not applicable to the Company.

INSURANCE :

The Company has taken adequate insurance covers for its properties and insurableinterest.

FIXED DEPOSIT :

The Company has not accepted any deposits from the public during the year. No amount onaccount of principal or interest on public deposits was outstanding as on the date of theBalance Sheet.

PERSONNEL :

The relations between the employees and the management during the year have beencordial.

MATERIAL CHANGES AND COMMITTMENTS :

There are no material changes and commitments affecting the financial position of thecompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this report.

PARTICULARS UNDER SECTION 197(12) AND RULE 5 OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014 :

(i) the ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Name Ratio
Mr. K. G. Gupta Managing Director 20:1

(ii) the percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Name Percentage
Mr. K. G. Gupta Managing Director 0%
Mr. Noel da Silva CFO & Company Secretary 5.65%

(iii) the percentage increase in the median remuneration of employees in the financialyear : 14.93%

(iv) the number of permanent employees on the rolls of Company : 221

(v) the explanation on the relationship between average increase in remuneration andcompany performance : Employees are granted increment based on their performance as wellas the performance of the Company. The net operational loss for the financial year endedMarch 31 2017 was Rs. (44.03) lakhs and whereas the increase in averageremuneration was 11.48 %

(vi) comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company :

The total revenue from sales and other income of the Company for the year 2016-17 wasRs.3978.18 lakhs as compared to Rs. 3347.93 lakhs for the previous year 2015-16. Howeverthere was a profit of Rs.63.24 lakhs due to sale of stake of the Company in Prime LensesPrivate Limited as compared to a profit Rs. 1366.09 lakhs in the year 2015-16. TheCompany's performance during the year 2016-17 was considered while approving theincrease in remuneration of Key Managerial Personnel .

(vii) variation in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies and in case of unlisted companies the variations in the net worth of theCompany as at the close of the current financial year and previous financial year:

Sr. No. Particulars As on March 31 2017 As on March 31 2016 Remarks
1 Market Capitalisation (Rs. in lakhs) 5536.71 2782.89 Company's public offer was in the year April 1996
2 Price earnings ratio 87.9 2.06
3 Closing market price of equity shares (Rs) 133.33 67.00

(viii) average percentile increase already made in the salaries of employees other thanthe managerial 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 averagepercentile increase in the salaries of employees was 12.64%. The Managing Director is paidminimum remuneration as per the Companies Act 2013. Whereas increase in managerialremuneration of CFO & Company Secretary was 5.65%

(ix) comparison of each remuneration of the Key Managerial against the performance ofthe Company:

The remuneration of the Managing Director was within the minimum remuneration as perSchedule V Part II and Section II of the Companies Act 2013.

(x) the key parameters for any variable component of remuneration availed by thedirectors :

Mr. K. G. Gupta Managing Director is entitled to commission not exceeding 1% of thenet profit of the Company computed in the manner laid down under the Act as may bedetermined by the Board. Due to operational loss no commission was paid to him for theyear under review. None of the other Directors are paid any remuneration except sittingfees and traveling expenses for attending Board and Committee Meetings.

(xi) the ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year : N.A.

(xii) affirmation that the remuneration is as per the remuneration policy of theCompany : The remuneration is as per the Remuneration Policy of the Company.

PARTICULARS OF EMPLOYEES :

None of the employees is covered under Section 197 of the Companies Act 2013 read withRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

As per Listing Regulations Management Discussion and Analysis Report is attached asannexure to this report.

FINANCE :

The Company has not availed any additional term loans from Banks during the financialyear ended March 31 2017. Total Fund based exposure of the Company with the Banks was tothe tune of Rs. 804.48 lakhs.

CREDIT RATING :

CRISIL has reaffirmed "CRISIL B/Stable" for long term rating and "CRISILA4" for short term rating.

REPORTING OF FRAUD BY AUDITORS :

During the year under review no offense involving fraud has been committed against theCompany by its employees or officers of the Company in terms of Section 143(12) ofthe Companies Act 2013.

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (Prevention Prohibitionand 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 Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.

During the year under review no complaints were received.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO :

Particulars required to be disclosed under the provisions of Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of Companies (Accounts) Rules 2014 are annexedherewith as Annexure – IV and forms an integral part of this report.

ACKNOWLEDGEMENT :

Your Directors wish to acknowledge and are grateful for the excellent support receivedfrom all levels clients suppliers regulatory authorities Banks shareholders and allother stakeholders. Your Directors recognize and appreciate the hard work and efforts putin by all the employees of the Company and their contribution to the progress of theCompany in a very challenging environment.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Place : Mapusa - Goa. K. G. GUPTA
Date : May 29 2017 CHAIRMAN & MANAGING DIRECTOR