To the Members:
The Directors have pleasure in presenting the Fifty Fourth Annual Report along with theAudited Statement of Accounts of the Company for the year ended March 31 2017.
1A. SUMMARY OF FINANCIAL RESULTS (STANDALONE):
(` in Million)
|Particulars ||31.03.17 ||31.03.16 |
|Revenue From Operations ||2663.07 ||2296.01 |
|Profit before tax ||405.42 ||278.07 |
|Profit after tax ||282.20 ||183.58 |
|Surplus brought forward ||1022.77 ||891.95 |
|Amount available for appropriation ||1304.97 ||1075.53 |
|Appropriations: || || |
|Interim Dividends ||30.70 ||30.70 |
|*Final Dividend ||- ||13.16 |
|Tax on distributed profit ||6.25 ||8.90 |
| ||36.95 ||52.76 |
|Balance in statement of Profit & Loss ||1268.02 ||1022.77 |
* Final Dividend of ` 1.90 per equity share aggregating to ` 27.77 million is proposedfor approval by the shareholders at the 54th Annual General Meeting.
Revenue in the financial year 2016-17 is ` 2663.07 million as compared to ` 2296.01million in the previous year registering a growth of 16%.
Profit before tax in the financial year 2016-17 increased by 46% to ` 405.42 millionfrom ` 278.07 million in the previous year. Profit after tax increased by 54% to ` 282.20million from ` 183.58 million in the previous year.
1B. SUMMARY OF FINANCIAL RESULTS (CONSOLIDATED):
(` in Million)
|Particulars ||31.03.17 ||31.03.16 |
|Revenue from operations ||3530.30 ||2920.76 |
|Profit before tax ||468.55 ||297.68 |
|Profit after tax ||332.68 ||201.15 |
In the financial year 2016-17 Consolidated revenue up by 21% Profit before tax up by57% and Profit after tax up by 65% over last year.
During the year under review the Board of Directors declared and paid three interimdividends of ` 0.70 per share each aggregating to ` 2.10 per share. The total amountdistributed as interim dividends on the paid-up share capital for the year amounted to `30.70 million (excluding dividend tax of ` 6.25 million).
Based on the performance of the Company for the year and in view of the improvedresults of the Company the Board of Directors is pleased to recommend a final dividend of` 1.90 per equity share subject to approval of the Shareholders at the Annual GeneralMeeting which if approved will absorb ` 27.77 million towards dividend and
` 5.69 million towards dividend tax.
The aggregate amount of interim dividends paid during the year and the final dividendrecommended for the financial year ended March 31 2017 amounts to ` 4.00 per share i.e. `58.47 million (excluding dividend tax of
` 11.90 million).
3. TRANSFER TO RESERVES:
During the year under review the Company has not proposed any amount to be transferredto General Reserve out of the net profits of the Company for the financial year 2016-17.Hence the entire amount of profit has been carried forward to the Balance Sheet.
4. Report ON performance OF subsidiaries associates and JOINT venture companies:
The performance and financial position of Karamsad Holdings Limited KaramsadInvestments Limited GMM
Mavag AG and Mavag AG the wholly owned subsidiaries of the Company for the year endedMarch 31 2017 are set out as Annexure A' forming a part of this Report.
5. Revision OF financial statement:
None of Financial Statements of the Company pertaining to previous financial yearswere revised during the financial year under review.
6. Disclosure OF internal financial controls:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious observation has been received from the Auditors of the Company for inefficiency orinadequacy of such controls.
7. Internal control systems:
The Company's internal control procedure which includes internal financial controlsensure compliance with various policies practices and statutes and in keeping in viewwith the organization's pace of growth and increasing complexity of operations. Theinternal auditors team carries out extensive audits throughout the year across allfunctional areas and submits its reports to the Audit Committee.
8. Management DISCUSSION & analysis:
Management Discussion & Analysis Report as stipulated under Regulation 24 of theListing Regulations is presented in a separate section forming a part of this Report.
9. CORPORATE SOCIAL RESPONSIBILITY POLICY:
The Board has constituted a Corporate Social Responsibility ("CSR") Committeeas per the provisions of Section
135 of the Companies Act 2013. The Board has also framed a CSR Policy as per therecommendations of the CSR Committee. The CSR Policy is available on the Company's websiteunder the Investors Section at www. gmmpfaudler.com.
The composition of the Committee contents of CSR Policy and report on CSR activitiescarried out during the financial year ended March 31 2017 in the format prescribed underRule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014 are set outas "Annexure B" forming a part of this Report.
10. Related party transactions:
Policy on dealing with related party transactions as approved by the Board isavailable on the Company's website under the Investors Section at www.gmmpfaudler.com.
The Board of Directors has approved the criteria for granting omnibus approval by theAudit Committee within the overall framework of the Policy on related party transactions.Prior omnibus approval is obtained for related party transactions which are of repetitivenature and entered in the ordinary course of business and at arm's length.
All related party transactions are being reviewed and certified by an IndependentConsultant and placed before the Audit Committee from time to time for their approval andare also being taken on record by the Board.
All related party transactions that were entered into by the Company during thefinancial year were in ordinary course of business and at arm's length basis. Also therewere no related party transactions which could be considered material in accordance withthe Policy of the Company on materiality of related party transactions.
Details of related party transactions entered into by the Company during the financialyear are provided in Note 42 to the Financial Statements.
11. Risk management policy
The Company has formulated and adopted a Risk Management Policy to prescribe riskassessment management reporting and disclosure requirements of the Company. The saidpolicy is available under the Investors Section on the Company's website atwww.gmmpfaudler.com.
12. Directors & KEY managerial personnel:
The present composition of the Board is in compliance with the provisions of Section149 of the Companies Act 2013. During the year under review there was no change inconstitution of the Board.
Mr. P. Krishnamurthy Dr. S. Sivaram and Dr. Amrita Patel are the Independent Directorson the Board. The Company has received declarations from all the said IndependentDirectors confirming that they meet with the criteria of independence prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and Regulation 17 of the ListingRegulations.
Mr. Dominic Deller was appointed as an Alternate Director to Mr. Thomas Kehl w.e.f.July 25 2017 for attending the Board Meeting held on August 10 2017. He ceased to be aDirector w.e.f. the close of business hours of August 10 2017.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Tom AlzinDirector being longest in the office will retire by rotation at the ensuing AnnualGeneral Meeting of the Company and being eligible has offered himself for re-appointment.The Board recommends his re-appointment. In accordance with the provisions of the Actnone of the Independent Directors is liable to retire by rotation.
(b) KEY MANAGERIAL PERSONNEL:
Mr. Tarak Patel Managing Director Mr. Ashok Pillai Chief Operating Officer Mr.Jugal Sahu Chief
Financial Officer and Ms. Mittal Mehta Company Secretary & Compliance officer arethe Key Managerial Personnel of the Company.
(c) DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 and in relation to the auditedfinancial statements of the Company for the year ended 31st March 2017 the Board ofDirectors hereby confirms that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; ii. suchaccounting policies have been selected and applied consistently and the Directors havemade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2017 and of the profit of theCompany for that year; iii. proper and sufficient care was taken for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
16 iv. the annual accounts of the Company have been prepared on a going concern basis;v. internal financial controls have been laid down to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; vi. propersystems have been devised to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.
(d) MEETINGS OF THE BOARD:
Four (4) Meetings of the Board of Directors were held during the financial year endedMarch 31 2017. The details of the Board Meetings with regard to their dates andattendance of each of the Directors thereat have been provided in the Corporate GovernanceReport.
(e) AUDIT COMMITTEE:
The Audit Committee comprises of four members of which Mr. P. Krishnamurthy Dr. S.Sivaram & Dr. Amrita Patel are Independent Directors and Mr. Thomas Kehl is a NonExecutive Director. The Role of the Audit Committee is provided in the CorporateGovernance Report annexed to this Report. All recommendations made by the Audit Committeeduring the year were accepted by the Board.
(f) STAKEHOLDERS RELATIONSHIP COMMITTEE:
Pursuant to Section 178 of the Companies Act 2013 the Stakeholder's RelationshipCommittee constituted by the Board of Directors to deal with the matters related tostakeholders' grievances met 4 times during the financial year. The details of status ofgrievances received from various stakeholders during the financial year are furnished inthe Corporate Governance Report Section of the Board' Report.
The Company Secretary acts as the Secretary of the Stakeholders Relationship Committee.
(g) NOMINATION REMUNERATION AND EVALUATION POLICY:
The Board of Directors of the Company has formulated a Policy which set standards forthe nomination remuneration and evaluation of the Directors and Key Managerial Personneland aims to achieve a balance of merit experience and skills amongst its Directors andKey Managerial Personnel. Details of the Nomination Remuneration and Evaluation Policyare set out at Annexure C' forming a part of this Report.
(h) BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out the annual performance evaluation of the Directors individually aswell as evaluation of the working of the Board and of the Committees of the Board by wayof individual and collective feedback from Directors. The Evaluation Criteria applied are:
(i) For Independent Directors:
Knowledge and Skills
Duties Role and functions
(ii) For Executive Directors
Performance as Team Leader / Member.
Evaluating Business Opportunity and analysis of Risk Reward Sce narios
Key set Goals/ KRA and achievements
Professional Conduct Integrity
Sharing of Information with the Board
The Directors expressed their satisfaction with the evaluation process.
(e) F AMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company proactively keeps its Directors informed of the activities of the Companyits operations and provides an overall industry perspective as well as issues being facedby the industry. The Familiarization Programme for the Board and details of variousfamiliarization programmes conducted during the year ended March 31 2017 are available onthe Company's website under the Investors Section at www. gmmpfaudler.com.
13. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of the Company has pursuant to the provisions of Section 178(9)of the Companies
Act 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules2014 framed "Whistle Blower Policy" for Directors and employees of the Companyto provide a mechanism which ensures adequate safeguards to employees and Directors fromany victimization on raising of concerns of any violations of legal or regulatoryrequirements incorrect or misrepresentation of any financial statements and reports etc.The employees of the Company have the right/option to report their concern/ grievance tothe Chairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations.
No instance under the Whistle Blower Policy was reported during the financial year2016-17.
14. Corporate governance:
The Report on Corporate Governance as stipulated under Regulation 34 of the ListingRegulations together with a Certificate from the Company's Auditors is presented in aseparate section forming a part of this Report.
15. Public DEPOSITS:
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 during the year under review. Hence the requirement for furnishingof details of deposits which are not in compliance with the Chapter V of the Act is notapplicable.
16. Auditors: a) AUDITORS' REPORT AND RATIFICATION OF APPOINTMENT OF STATUTORYAUDITORS:
In compliance with the Companies (Audit and Auditors) Rules 2014 M/s. DeloitteHaskins & Sells LLP
Chartered Accountants (FRN 117366W) were appointed as Statutory Auditors by theshareholders to hold office for a period of four years i.e. from the conclusion of 53rdAnnual General Meeting till the conclusion of 57th Annual General Meeting.
Further pursuant to the requirement of Section 139 of the Companies Act 2013 theappointment of Statutory Auditors is required to be ratified by the members at everyAnnual General Meeting. Members are requested to ratify their appointment for thefinancial year 2017-18.
The Auditors Report for the financial year ended March 31 2017 report does not containany reservation qualification or adverse remark.
B) SECRETARIAL AUDIT:
Secretarial Audit Report obtained pursuant to the provisions of Section 204 of theCompanies Act 2013 and Rules made there under from M/s. Rathi and Associates PracticingCompany Secretaries for the financial year 2016-17 is set out at Annexure D' forminga part of this Report.
The Secretarial Auditors Report for the financial year ended March 31 2017 does notcontain any reservation qualification or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethere under the Board of Directors has re-appointed M/s. Rathi and Associates PracticingCompany Secretaries for conducting Secretarial Audit Report of the Company for thefinancial year 2017-18.
C) COST AUDITORS:
M/s. Dalwadi & Associates Cost Accountants Ahmedabad have been re-appointed asCost Auditors for conducting audit of the cost accounting records maintained by theCompany in respect of its manufacturing activities for the financial year 2017-18.
D) internal auditors:
The Board of Directors has re-appointed M/s. Kalyaniwalla & Mistry CharteredAccountants as Internal Auditors of the Company for the financial 2017-18.
17. Statutory statements:
(a) CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS andoutgo:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are set out at Annexure E' forming a part of this Report.
(b) DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
There have been no material changes and commitments affecting the financial position ofthe Company since the close of financial year i.e. since March 31 2017. Further it ishereby confirmed that there has been no change in the nature of business of the Company.
(c) DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:
No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and on the Company's operations in future.
(d) EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2017 made under the provisions ofSection 92(3) of the Act is set out at Annexure G' forming a part ofthis Report.
(e) DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES
AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year under review and other disclosures underRule 5 of the Companies (Appointment & Remuneration) Rules 2014 are set out at AnnexureF' forming a part of this Report.
(f) PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
The particulars of loans given and investments made during the financial year underSection 186 of the Companies Act 2013 are given at Notes forming part of the FinancialStatements. During the financial year the Company has neither provided any securities norprovided corporate guarantees for loans availed by the others.
(g) PAYMENT OF REMUNERATION / COMMISSION TO DIRECTORS FROM HOLDING OR SUBSIDIARYCOMPANIES:
None of the directors or key managerial personnel had received any remuneration /commission from Holding or Subsidiary Company and hence disclosure of receipt ofremuneration/commission by Key Managerial Personnel from the Holding or Subsidiary Companyof the Company is not applicable.
The Board of Directors confirm that no disclosure or reporting is required in respectof the following matters as there were no transactions on these matters during thefinancial year 2016-17:
1. Issue of equity shares with differential rights as to dividend voting or otherwise;
2. Issue of shares (including sweat equity shares or Stock options) to employees of theCompany;
3. Non-exercising of voting rights in respect of shares purchased directly by employeesunder a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies(Share Capital and Debentures) Rules 2014;
4. There were no material or serious instances of fraud falling within the purview ofSection 143(12) of the Companies Act 2013 and Rules made there under.
The Board of Directors of the Company acknowledge with gratitude the support receivedfrom shareholders bankers customers suppliers and business partners. The Directorsrecognize and appreciate the efforts of all employees for their contribution inaccelerating growth of the Company.
For and on behalf of the Board of Directors
P. Krishnamurthy Tarak Patel Chairman Managing Director
DIN : 00013565 DIN : 00166183
Place: Mumbai Date: August 10 2017
Registered Office: Vithal Udyognagar Anand Sojitra Road Karamsad - 388 325Gujarat.
ANNEXURE A' TO DIRECTORS' REPORT
PErFOrMaNCE OF SUBSIDIarIES aSSOCIaTES aND JOINT VENTUrE COMPaNIES
As on financial year ended on March 31 2017 ` In Million
|Name of the subsidiary ||Karamsad Holdings limited ||Karamsad Investments Limited ||gMM Mavag ag ||Mavag ag* |
|1 Reporting period for the subsidiary concerned if different from the holding Company's reporting period ||N.A. ||N.A. ||N.A. ||N.A. |
|2 Reporting currency and Exchange rate as on the last date of the relevant Financial ||N.A. ||N.A. ||CHF ||CHF |
|Year in the case of foreign subsidiaries. || || ||64.90 ||64.90 |
|3 Share capital ||3.50 ||2.60 ||324.51 ||97.35 |
|4 Reserves and Surplus ||1.17 ||1.93 ||0.02 ||288.80 |
|5 Total Assets ||4.76 ||4.56 ||327.66 ||798.48 |
|6 Total Liabilities ||0.10 ||0.03 ||3.13 ||412.33 |
|7 Investments ||- ||- ||324.51 ||- |
|8 Turnover ||- ||- ||- ||882.45 |
|9 Profit before taxation ||0.12 ||0.11 ||2.32 ||72.55 |
|10 Provision for taxation ||0.02 ||- ||- ||12.05 |
|11 Profit after taxation ||0.10 ||0.11 ||2.32 ||60.50 |
|12 Proposed Dividend ||- ||- ||2.32 ||- |
|13 % of shareholding ||100% ||100% ||100% ||100%* |
ANNEXURE B' TO DIRECTORS' REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ("CSR") ACTIVITIES
1. A brief outline of the Company's CSR policy including overview of projectsor programs proposed to be undertaken and a reference to the web-link to the CSr policyand projects or programs.
The Company's CSR vision is based on embedded tenets of trust fairness and care andshall be based on the following: a. The Company shall actively initiate projects and/ orparticipate in projects to improve the environment and the life of people living near itsmanufacturing facilities. b. The Company will strive to provide vocational training toimprove skills of people in the primarily unorganized sector. c. The Company commits tocreating social value and also allowed individual employees to contribute in the variousprograms. d. The Company shall manage its operations using principles of sustainabledevelopment to minimize impact on environment and protect health & safety of ouremployees service providers neighbouring communities and customers.
The CSR initiatives undertaken by the Company so far have been in the areas of basichealthcare environment and education. Going forward the Company would continue to carryout CSR activities as it has been carrying out over the years in the areas of educationand healthcare as specified in Schedule VII to the Companies Act 2013. The CSR Policyadopted by the Board of Directors is available on the Company's website under theInvestors Section at www.gmmpfaudler.com.
2. The composition of the CSr Committee.
|Mr. P. Krishnamurthy ||- Chairman |
|Mr. Ashok Patel ||- Member |
|Dr. Amrita Patel ||- Member |
|Mr. Tarak Patel ||- Member |
3. Average Net Profit of the Company for last three financial years.
Average Profits for the last three financial years calculated as per Section 198 of theCompanies Act 2013:
` 251.88 million.
4. Prescribed CSR Expenditure (two percent of the amount as in ite m 3 above)` 5.04 million.
5. Unspent CSR expenditure of the previous years : ` 3.46 million.
6. Details of CSr spent during the financial year;
(a) Total amount spent for the financial year: ` 7.81 million (b) Amountunspent if any: ` 0.68 million
(c) Manner in which the amount spent during the financial year is detailed below:
` In Million
|CSr Project or Activity Identified ||Sector in which the project is covered ||Projects or programs 1) local area or other 2) Specify the state and district where project or program was undertaken ||amount outlay (Budget) project or program wise ||amount spent on the projects or programs Sub-heads: 1) Direct expenditure on projects or programs 2) Overheads ||Cumulative expenditure upto the reporting period ||amount spent direct or through implementing agency (IA) |
|Project "Sparsh"- Promoting rural healthcare ||Promoting healthcare including preventive healthcare ||Karamsad Dist. Anand Gujarat ||2.76 ||2.76 ||4.26 ||Through IA - Charutar Arogya Mandal. |
|Purchase of Multi- Para Monitors at Shri Krishna Hospital Emergency & Trauma Centre ||Promoting healthcare ||Karamsad Dist. Anand Gujarat ||0.50 ||0.50 ||0.50 ||Through IA - Charutar Arogya Mandal. |
|Latur Water Crisis ||Preventive healthcare ||Latur Dist. Maharshtra ||0.29 ||0.29 ||0.29 ||Through IA - Bombay Chamber of Commerce. |
|Maintenance of Public Facilities at Sardar Patel Memorial ||Ensuring Environmental Sustainability ||Karamsad Dist. Anand Gujarat ||0.50 ||0.50 ||0.50 ||Through IA - Sardar Patel Trust. |
|Vocational Skill Development (Annual Operating Program) ||Promoting education and enhancing vocational skills ||Karamsad Dist. Anand Gujarat ||0.50 ||0.50 ||0.50 ||Through IA J. V. Patel Industrial Training Institute. |
|Vocational Skill Development (Upgrading Welding Trade) ||Promoting education and enhancing vocational skills ||Karamsad Dist. Anand Gujarat ||3.60 ||3.26 ||3.26 ||Through IA J. V. Patel Industrial Training Institute. |
| || ||Total ||8.15 ||7.81 ||9.31 || |
7. In case the Company has failed to spend the two percent of the average netprofit of the last three financial years or any part thereof the Company shall providethe reasons for not spending the amount in its Board report:
The Company has formed a CSR Committee to implement and monitor the CSR Policy. VariousCSR projects were undertaken during the year particulars of which are given in thisreport. The Company was required to spend an amount of ` 8.49 million towards CSR expensesincluding unspent amount from previous years out of which the Company has spent ` 7.81million during the financial year 2016-17. The Company plans to spend the unspent amountof ` 0.68 million on its various ongoing CSR projects by the end of financial year2017-18.
8. a responsibility statement of the CSr Committee that the implementation andmonitoring of CSr policy is in compliance with CSr objectives and policy of the Company.
The CSR Committee of the Company confirms that the implementation and monitoring of theCSR policy is in compliance with CSR objectives and policy of the Company.
For and on behalf of the Board of Directors
|P. Krishnamurthy ||Tarak Patel |
|Chairman ||Managing Director |
|DIN : 00013565 ||DIN : 00166183 |
|Place: Mumbai || |
|Date: August 10 2017 || |