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GKB Ophthalmics Ltd.

BSE: 533212 Sector: Consumer
NSE: GKB ISIN Code: INE265D01015
BSE 00:00 | 04 Oct 117.60 -0.25
(-0.21%)
OPEN

122.65

HIGH

122.65

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114.95

NSE 05:30 | 01 Jan GKB Ophthalmics Ltd
OPEN 122.65
PREVIOUS CLOSE 117.85
VOLUME 27924
52-Week high 145.00
52-Week low 63.30
P/E
Mkt Cap.(Rs cr) 59
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 122.65
CLOSE 117.85
VOLUME 27924
52-Week high 145.00
52-Week low 63.30
P/E
Mkt Cap.(Rs cr) 59
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

Dear Shareholders

Your directors have great pleasure in presenting before you the 39thAnnual Report of the Company together with the Audited Annual Financial Statements of theCompany for the year ended March 31 2021.

FINANCIAL RESULTS:

The Company's financial performance for the year under review alongwith the previous year figures is given hereunder:

Rs. in lakhs

2020-21 2019-20
Revenue from Operations & Other Income 2467.91 2694.54
Profit/Loss before Financial Charges Depreciation & Taxation 276.23 65.21
Less: Finance Charges 133.72 135.04
Less: Depreciation 299.20 347.33
Less: Deferred Tax (18.01) 0.00
Profit/ (Loss) for the year (156.69) (417.17)
Other Comprehensive Income (Net of Taxes) (37.13) 9.98
Total Comprehensive Income for the year (247.92) (407.19)
Balance from previous years 680.26 1087.45
Balance carried forward 432.34 680.26

OPERATIONS:

During the year under review the turnover from operations of theCompany declined to Rs. 2134.31 lakhs compared to Rs. 2556.17 lakhs in the previousfinancial year. However the Company reported a net loss from operations of Rs. 247.92lakhs only during the current financial year compared to a net loss of Rs. 407.19 lakhsincurred during the previous financial year. The Company is a manufacturer of the plasticlenses. The Company's business has been facing a stiff competition from China as Chineseare dumping lenses at a very lower price. The Company has made a representation to imposean Anti- Dumping Duty on the import of the plastic lenses into India and the saidapplication with the Central Government is under review.

The spread of the Covid -19 pandemic all across the globe has affectedthe demand for plastic lenses. The shut-down of the plant operations during the firstquarter of April 2020 in line with the State Government's Covid-19 guidelinesrestrictions on the movement of required manpower and the disrupted supply-chain networkresulted in lower production and accordingly lower sales for the year 2020-21. However asthe lenses are an essential commodity the company is expecting that the demand for itsproducts will be restored as soon as the second wave of the pandemic gets over.

DIVIDEND:

With the view to conserve the resources your directors regret theirinability to recommend any dividend for the year 2020-21. No amount has been transferredto reserve for the financial year ended March 31 2021.

SHARE CAPITAL:

The paid-up equity share capital of the Company as on March 31 2021is Rs. 504.05 lakhs.

SUBSIDIARIES:

GKB Ophthalmics Products FZE Sharjah UAE is a Wholly Owned Subsidiaryof the Company.

The Lens Company NJ USA is a Subsidiary of GKB Ophthalmics ProductsFZE and a Step-Down Subsidiary of the Company.

GSV Ophthalmics Private Limited is another Subsidiary of the Companybeing set-up to produce Hi-Index Ophthalmic Lenses with SOMO Holdings and Technology Co.Ltd Korea (JV Partner). The commissioning of this JV Project continues to face challengesin this tough and uncertain times on account of the ongoing pandemic. Due to the surge inCovid cases in April 2021 and May 2021 and the resultant restrictions the structural workhad slowed down for a certain period but has now again picked up. The Company and the JVPartner are waiting for the respective Governments to lift the international travelrestrictions to depute the engineers on site to commence the essential training to beextended to the project supervisors/ engineers in South Korea. This will follow the importof the technological machinery by the Company.

A statement under Section 129(3) of the Companies Act 2013 containingsalient features of the financial statement and performance of subsidiaries in Form AOC-1is annexed with the Consolidated Financial Statements. In terms of Section 136(1)(a) ofthe Companies Act 2013 the Audited Accounts of the subsidiaries are placed on website ofthe Company at www.gkb.net. A copy of the audited financial statements in respect of eachof the subsidiaries will be made available to interested shareholders upon a writtenrequest. The audited accounts of the subsidiaries are also available at theRegistered Office of the Company for inspection during business hours.

TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Ministry of Corporate Affairs has set up the Investor Education andProtection Fund for promotion of investor awareness and protection of investor interests.In terms of Section 124 of the Companies Act 2013 and the rules made thereunder thedividends in respect of the shares of the Company which have remained unpaid or unclaimedfor seven consecutive years or more are required to be transferred to IEPF.

The Company has not declared any dividend since 2010-11. In oneinstance an amount of Rs. 12822 pertaining to FY 200910 which was lying in the Bank'sStale Demand Draft account needs to be transferred to IEPF account as soon as the matteris sorted out with the Bank.

ACCREDITATION:

The Company has been accredited with ISO 9001:2015 by TUV SUD SouthAsia Private Limited.

CHANGE IN PROMOTERS' SHAREHOLDING:

The Company on the request of Mr. Krishna Murari Gupta and family hadreclassified Mr. Krishna Murari Gupta Ms. Usha Gupta Mr. Aditya Gupta and Mr. VivekGupta ("Krishna Murari Gupta and family") from the "Promoter Category"to the "Public Category" in the year 2018. However in February 2021 theCompany received a correspondence from BSE advising the Company to reinstate Mr. KrishnaMurari Gupta and Family into the Promoter Category as the reclassification done by thecompany was not meeting certain stipulated criteria i.e. out going Promoters were holdingmore than 10% of the paid up capital of the Company. Accordingly the Board of Directorsafter deliberations approved the reinstatement of the shareholding of Krishna MurariGupta and Family into the Promoter Category effective March 31 2021. In view of theabove the Promoter's Shareholding as on March 31 2021 has gone up to 59.44% from 48.97%and Public shareholding has decreased to 40.56% from 51.03%.

CHANGE IN NATURE OF BUSINESS IF ANY:

There has been no change in the nature of business of the Companyduring the year 2020-21.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Director retiring by rotation: -

Mr. K.G. Gupta will be retiring by rotation at the forthcoming AGMpursuant to Articles of Association of the Company being eligible offers himself forre-appointment. Brief resume together with other relevant details of Mr. K.G. Gupta aregiven in Note no. 13 to the Notice for the ensuing Annual General Meeting.

Second term of Independent Directors: -

Mr. Anil Palekar and Mr. Joseph A.A. D'costa have been re-appointed fora second consecutive term up to March 31 2024 (4 years) and March 31 2022 ( 2 years)respectively as both of them will be attaining the age of 75 years on June 15 2024 andNovember 02 2022 respectively. Mr. Sadashiv Shet and Mrs. Shashi K.Katreddi have beenre-appointed for a term of five years up to May 22 2025 and March 31 2025 respectively.

Key Managerial Personnel:-

Pursuant to provisions of Section 2 (51) and Section 203 of theCompanies Act 2013 read with Rule 8 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the following are the Key Managerial Personnel (KMP) ofthe Company as on the date of this report:-

Sr. No. Name of the KMP Designation
1 Mr. K. G. Gupta Managing Director
2 Mr. Gurudas Sawant Chief Financial Officer
3 Ms. Pooja Bicholkar Company Secretary

SEPARATE MEETING OF THE INDEPENDENT DIRECTORS:

In terms of Section 149 (8) read with Schedule IV of the CompaniesAct 2013 the Independent Directors held a Meeting on March 24 2021 without theattendance of Non-Independent Directors and members of Management. All the IndependentDirectors were present at the meeting. A familiarization programme for the IndependentDirectors was held on March 24 2021. The details of the Familiarization programme aregiven in the Corporate Governance Report.

At this meeting the Independent Directors:

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

2. Reviewed the performance of Chairperson taking into account theviews of Executive Director and Non-Executive Directors.

3. Assessed the quality quantity and timeliness of flow of informationbetween the Company Management and the Board that is necessary for the Board toeffectively and reasonably perform their duties.

INDEPENDENT DIRECTORS' DECLARATION

The Independent Directors have submitted the Declaration ofIndependence as required pursuant to Section 149 of the Companies Act 2013 andprovisions of the Listing Regulations 2015 stating that they meet the criteria ofindependence as provided therein. The Independent Directors have complied with the Codefor Independent Directors prescribed in Schedule IV to the Act. Further all IndependentDirectors on the Board of the Company have registered themselves under IndependentDirector database vide notification no. G.S.R. 804(E) dated 01st December 2019 theCompanies (Appointment and Qualification of Directors) Fifth Amendment Rules 2019.

MEETINGS OF THE BOARD OF DIRECTORS:

During the year under review seven Board Meetings were held. Furtherdetails are given in Corporate Governance Report forming part of this Report. The maximumgap between two Board Meetings held during the year was not more than 120 days. Howeverthe meetings held in February 2020 and July 2020 exceeded 120 days which is in compliancewith the MCA Circular no. 11/2020 dated March 24 2020 relaxing the gap between twoconsecutive meetings of the Board to 180 days instead of 120 days as required in theCompanies Act 2013.

AUDIT COMMITTEE:

The composition of the Audit Committee and other details are given inCorporate Governance Report which is part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee has formulated the criteriafor determining qualifications positive attributes and independence of a directorrelating to remuneration for directors key managerial personnel as provided under section178(3) of the Companies Act 2013 and Listing Regulations 2015.

The Remuneration Policy is stated in the Corporate Governance Reportwhich is part of this report. Further details have been disseminated on the Company'swebsite www.gkb.net

PERFORMANCE EVALUATION:

The Board evaluated the performance of the Board as a whole Committeesof the Board and the performance of individual directors including the Chairman of theBoard pursuant to Regulation 17(10) of the Listing Regulations. The performance of theBoard Committees and individual Directors was evaluated by the Board seeking inputs fromall the Directors. The Independent Directors also carried out the performance evaluationin terms of Part VIII of Schedule IV of the Companies Act 2013 in their meeting held onMarch 24 2021.

The details of the Performance Evaluation carried out is provided inthe Corporate Governance Report which is a part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT:

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

a) that in the preparation of the annual accounts the applicableaccounting standards have been followed along with proper explanation relating to materialdepartures;

b) that they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of financialyear and of the Profit and Loss of the Company for that period;

c) that they have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities

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

e) that they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and were operatingeffectively; and

f) that they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

AUDITORS:

Pursuant to provisions of Section 139 of the Companies Act 2013 readwith the Companies (Audit and Auditors) Rules 2014 in the 36th Annual General Meetingheld on August 27 2018 M/s. MSKA & Associates Chartered Accountants (FRN 105047 W)were appointed as Statutory Auditors of the Company for a term of five years at suchremuneration and out of pocket expenses as may be decided by the Board of Directors ofthe Company. The Statutory Auditor to hold the office till the conclusion of the AnnualGeneral Meeting to be held in the year 2022-23.

AUDITORS' REPORT:

The Auditors' Report is unmodified and there are no qualificationsreservations or adverse remarks or disclaimers.

In respect of the observation made by the Auditors in their report theBoard's response thereon is as follows:

(i) Paragraph 2 (g) (iii)

Regarding the observation made by the Auditors the Company will betransferring the unpaid Dividend of Rs. 12 822/- pertaining to FY 2009-10 to IEPFaccount as soon as the matter is sorted out with the Bank.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:

There is no significant or material order passed by any Regulators orCourts or Tribunals 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) of Companies (Accounts) Rules 2014 the Board has laid the Internal FinancialControl to be followed by the Company and that such Internal Financial Controls areadequate and are operating effectively. As per Section 143(3)(i) of the Companies Act2013 a report issued by M/s. MSKA & Associates Statutory Auditors of the Company isattached with their Independent Auditor's Report which is self explanatory.

RISK MANAGEMENT POLICY:

The company has developed and implemented a Board approved RiskManagement Policy that ensures appropriate management of risks which aligns with itsinternal systems and culture. 'Risk Management' is the identification assessment andprioritization of risks followed by coordinated and economical application of resources tominimize monitor and control the probability and/or impact of uncertain events or tomaximize the realization of opportunities.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Particulars of loans guarantees given and investments made during theyear as required under Section 186 of the Companies Act 2013 and Schedule V of theListing Regulations are given in the notes to financial statements.

RELATED PARTY TRANSACTIONS:

All transactions entered into with related parties pursuant to Section188 of the Companies Act 2013 and Regulation 23 of Listing Regulations during the yearwere at arm's length basis and in ordinary course of business. Therefore disclosure inForm AOC-2 is not required.

The Company has formulated a policy on materiality of related partytransactions and on dealing with related party transactions in terms of Regulation 23(1)of Listing Regulations. The Board of Directors of the Company has approved and adopted apolicy on related party transactions and the same has been uploaded on Company's website(http://gkb.net/en/wp-content/uploads/Accounts/Related-partv-transactions-policv.pdf).

EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return as provided under Section 92(3) of theCompanies Act 2013 and as prescribed in Form No. MGT-9 of the Companies ( Management andAdministration) Rules 2014 is set out in Annexure - I and the same is also placed on thewebsite of the company at www.gkb.net.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance practices followed by theCompany together with certificate from the Practising Company Secretary confirmingcompliance Management Discussion and Analysis Report and Declaration regarding complianceof Code of Conduct by Board Members and Senior Management Personnel forms the part of thisannual report.

SECRETARIAL AUDIT:

As per provisions of Section 204 of the Companies Act 2013 read withRule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014the Secretarial Audit Report submitted by Ms. Girija Nagvekar Practising CompanySecretary for the financial year ended March 31 2021 forming part of this AnnualReport is annexed herewith as Annexure - II. The Secretarial Audit Report isself-explanatory and requires no comments.

CORPORATE SOCIAL RESPONSIBILITY:

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

INSURANCE:

The Company has taken adequate insurance covers for its properties andinsurable interest.

FIXED DEPOSIT:

The Company has not accepted any deposits from the public during theyear. No amount on account of principal or interest on public deposits was outstanding ason the date of the Balance Sheet.

PERSONNEL:

The relations between the employees and the management during theyear have been cordial.

MATERIAL CHANGES AND COMMITMENTS :

There are no material changes and commitments affecting the financialposition of the company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of this report.

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

(i) the ratio of the remuneration of each director to the medianremuneration of the employees of the Company for the financial year:

Name Ratio
Mr. K. G. Gupta Managing Director 17.99:1
Mr. Subhash Redkar Executive Director 4.54:1

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

Name Percentage
Mr. K. G. Gupta Managing Director 1.3%
Mr. Subash Redkar Executive Director 0.46%
Mr. Gurudas Sawant Chief Financial Officer 8.00%
Ms.Pooja Bicholkar Company Secretary 38.00%

(ii) (b) The Non-Executive Directors of the Company are entitled tositting fees within the limits approved

by the Board of Directors and shareholders. The details of remunerationof Directors are provided in the Corporate Governance Report.

(iii) the percentage increase in the median remuneration of employeesin the financial year: 13.03%

(iv) the number of permanent employees on the rolls of Company: 180

(v) average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration:

Average percentage increase (decrease) made in the salaries ofemployees other than the managerial personnel in the last financial year i.e 2020-21 is13.61% whereas the increase (decrease) in the managerial remuneration for the samefinancial year was 1.1%

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

The remuneration of the Managing Director was within the minimumremuneration as per Schedule V Part II and Section II of the Companies Act 2013.

(vii) the key parameters for any variable component of remunerationavailed by the directors:

Mr. K. G. Gupta Managing Director is entitled to commission notexceeding 1% of the net profit of the Company computed in the manner laid down under theAct as may be determined by the Board. In the absence of net profit no commission waspaid to him for the year under review.

Mr. Subhash Redkar Executive Director is entitled to remuneration asapproved in his letter of appointment.

None of the other Directors are paid any remuneration except sittingfees and traveling expenses for attending Board and Committee Meetings.

(viii) the ratio of the remuneration of the highest paid director tothat of the employees who are not directors but receive remuneration in excess of thehighest paid director during the year: N.A.

(xi) affirmation that the remuneration is as per the remunerationpolicy of the Company:

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 CompaniesAct 2013 read with Rule 5 of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per Listing Regulations Management Discussion and Analysis Reportis attached to this report.

FINANCE:

Total Fund based exposure of the Company with the Banks was to the tuneof Rs. 876.00 lakhs. Total Non-Fund based exposure of the Company with the Banks was tothe tune of Rs. 560.00 lakhs. Additionally the Company has availed credit facilities fromState Bank of India under its "Common Covid Emergency Credit Line" (CCECL) tothe tune of Rs. 50.00 lakhs and a credit facility of Rs. 120.00 lakhs under the "Guaranteed Emergency Credit Line" (GECL) scheme.

PUBLIC DEPOSITS

The Company has not accepted any deposits falling under the ambit ofSection 73 of the Companies Act 2013 from public and as such no amount on account ofprincipal or interest on deposits from public was outstanding as on 31st March 2021.

CREDIT RATING:

CRISIL Limited - the credit rating agency has assigned the creditrating of "CRISIL B/Stable ( Re-affirmed)" to the long-term Bank facilitiesavailed by the Company and credit rating of "CRISIL A4 ( Re-affirmed)" to theshort-term Bank facilities availed by the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism. It provides a channel tothe employees to report to the management concerns about unethical behavior actual orsuspected fraud or violation of the code of conduct policy and the same has been posted onthe Company's website www.gkb.net.

REPORTING OF FRAUD BY AUDITORS:

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

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE(Prevention Prohibition and Redressal) Act 2013.

The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaints Committee (ICC) has been set upto redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy.

During the year under review no complaints were received.

RESUME OF HEALTH & SAFETY PERFORMANCE OF THE FACTORY:

In terms of Section 90 B (5) (d) of the Goa Factories Rules 1985 theCompany has an Occupational Health Safety and Environment Policy through which everyemployee is made responsible for the observance of the measures designed to preventaccidents damage to property occupational ill- health and avoidable environmentalpollutants.

Safety & Health:- For the safe work environment HazardIdentification & Risk Assessment workshops and training programme were conducted forthe employees on First Aid procedure Behavioral Safety Occupational Safety Health &Environment etc. with a view to equip them to recognize the hazards and risks associatedwith a given task and take preemptive action. Also the Annual event via Safety WeekCelebration besides statutory requirements under Factories Act a seminar was conductedon the topic "Industrial Hygiene for the Production Engineers." Anotherseminar "Accident Prevention on Shop-floor" and "Manual Material Handlingand Ergonomics" was organized for the employees .

Audit - Occupational Safety & Health Audit and InternalElectrical Safety Audit was conducted to assess potential fire hazards in the factoryset-up and to provide assurance on the implementation and effectiveness of these systemand processes. The company has organized Eye-testing for employees engaged in QualityControl operations during the year.

Environment: - The Company has been focusing on achievingenvironmental standards with "Go Green" philosophy. The Company is certifiedwith ISO 9001:2015 standard of TUV Certifying body. The company has continued its effortsfor water and energy conservation. Licenses under Pollution Control Board are periodicallyrenewed under Air Water and Hazard Waste Management. The process of Solid wastemanagement disposal is done on regular basis through Mumbai Waste Management Ltd. Talojain Maharashtra.

Measure to fight against COVID-19: - The Company is adhering to allthe guidelines and safety protocols provided by the Ministry of Home Affairs together withthe directives issued by the State Government which includes temperature sensing wearingface masks sanitizing and washing hands in the factory and office premises to safeguardthe well-being of its employees and other stakeholders from spread of Covid-19 pandemic.All Social distancing norms are being followed in the factory and the administrativeoffice.

OTHER DISCLOSURES:-

1) The consolidated financial statement is also being presented inaddition to the standalone financial statement of the company.

2) The maintenance of cost records is not applicable to the Company asper the amended Companies (Cost Records and Audit) Rules 2014 prescribed by the CentralGovernment under Section 148(1) of the Companies Act 2013.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO:

Particulars required to be disclosed under the provisions of Section134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies (Accounts) Rules 2014are annexed herewith as Annexure - III and forms an integral part of this report.

ACKNOWLEDGEMENT:

Your Directors wish to acknowledge and are grateful for the excellentsupport received from all levels customers vendors regulatory authorities bankersshareholders and all other stakeholders. Your Directors recognize and appreciate the hardwork and efforts put in by all the employees of the Company and their contribution to theprogress of the Company in a very challenging environment.

For and on behalf of the Board of Directors
K. G. Gupta
Place : Mapusa - Goa. Chairman and Managing Director
Date : June 10 2021 DIN : 00051863

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