Govind Rubber Limited
Your Directors have pleasure in presenting the 32nd Annual Report andAudited Financial Statements of the Company for the year ended 31st March2017.
| || ||Rs. In Lakhs |
|Particulars ||2016-17 ||2015-16 |
|Sales and Operational Income (Gross) ||21618 ||33024 |
|Other Income ||48 ||37 |
|TOTAL INCOME ||21666 ||33061 |
|Net Profit/(Loss) before dep. and tax ||(941) ||345 |
|Depreciation ||342 ||327 |
|Profit before Tax ||(1283) ||18 |
|Tax Expenses ||372 ||(5) |
|Profit/(Loss) after Tax ||(911) ||13 |
|Balance brought forward ||(2966) ||(2979) |
|Balance carried forward to Balance Sheet ||(3877) ||(2966) |
REVIEW OF OPERATIONS:
Your Company has achieved a Gross Turnover and Operational Income of Rs.21618 Lakhs ascompared to Rs.33024 Lakhs in the previous year. The Net Loss before depreciation and taxis Rs.941 Lakhs as compared to Net profits before depreciation and tax of Rs.345 Lakhs inthe previous year. The Net Loss for the year stood at Rs.911 Lakhs as compared to Profitof Rs.13 Lakhs in the previous year.
Your Company is undertaking various efforts to increase the revenue and costrationalization measures to improve bottom-line of the Company.
DIVIDEND AND RESERVES:
As the company has incurred losses for the current financial year the Board ofDirectors does not recommend any payment of Dividend for the year under review.
During the year under review no amount was transferred to General Reserve.
NATURE OF BUSINESS:
During the year there was no change in the nature of the Business.
The paid up equity share capital as at March 31 2017 stood at Rs.21.84 Crores dividedinto 21838463 Equity shares having face value of Rs.10/- each fully paid up. Duringthe year under review the company has not issued shares with differential voting rightsnor has granted any stock options or sweat equity shares. As on March 31 2017 none of theDirectors of the company hold instruments convertible into equity shares of the Company.
Your Company is striving hard to come out of adverse financial situation facing sincelong. The Company is adopting different strategy to boost its sales and also focusing toreduce the financial cost and concern relating to working capital shortfall andoperational cost is addressed by adopting various new techniques and methods to improveoverall financial performance. The demand for standard product from overseas buyers isstrong and which are always of good margin and therefore your Company is expecting betterperformance in the current financial year.
AUDITORS AND AUDITORS REPORT:
M/s Jayantilal Thakkar & Co. Chartered Accountants (Firm Registration No. 104133W)were first auditors since incorporation of the company; currently they are holding officeof the auditors up to the conclusion of the 32nd AGM.
As per second proviso to Section 139(2) of the Companies Act 2013 (the Act) atransition period of three years from the commencement of the Act is provided to appoint anew auditor if the existing auditor's firm has completed two terms of five consecutiveyears.
Accordingly as per the said requirement of the Act M/s Songira & AssociatesChartered Accountants (Firm Registration No. 128085W) are proposed to be appointed asauditors for a period of 5 years commencing from the conclusion of 32nd AGMtill the ratification conclusion of the 37th AGM subject to by shareholdersevery year as may be applicable in place of M/s Jayantilal Thakkar & Co. CharteredAccountants.
M/s. Songira & Associates Chartered Accountants have consented to the saidappointment and confirmed that their appointment if made would be within the limitsspecified under Section 141(3)(g) of the Act. They have further confirmed that they arenot disqualified to be appointed as statutory auditor in terms of the provisions of theproviso to Section 139(1) Section 141(2) and Section 141(3) of the Act and the provisionsof the Companies (Audit and Auditors) Rules 2014.
The Audit Committee and the Board of Directors recommend the appointment of M/s.Songira & Associates Chartered Accountants as statutory auditors of the Company fromthe conclusion of the 32ndAGM till the conclusion of 37thAGM to theshareholders.
As per the provisions of Section 148 of the Companies Act 2013 read with Companies(Audit and Auditors) Rules 2015 the Board of Directors of the Company has appointed M/s.K.G Goyal & Associates as Cost Auditors of the Company to conduct the cost Audit forthe financial year 2017-18.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and TheCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. GMJ & Associates Company Secretaries to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed herewith as Annexure-A. TheSecretarial Report contains a qualification with respect to the Composition of the Board
BOARD'S COMMENTS ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARKS IN THE AUDITORSREPORT:
The Secretarial Report contains a qualification with respect to the Composition of theBoard. The Company was looking for suitable candidates for the position of the IndependentDirectors and eventually Ms. Kumud Manseta and Mr. Sanjiv Rungta were inducted in Board asIndependent Directors w.e.f 16th May 2016.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS (MDA):
The Company adheres to the requirements set out by the Securities and Exchange Board ofIndia's Corporate Governance practices and have implemented all the stipulationsprescribed. The Company has implemented several best corporate Governance Practices.
The Corporate Governance and Management & Analysis Report which form an integralpart of this Report are set out as separate Annexure B & C together with theCertificate from the Practicising Company Secretaries of the Company regarding compliancewith the requirements of Corporate Governance as stipulated in SEBI (LODR) Regulations2015.
To mark its global presence and cater the different geographies the Company has aJoint Venture GK Company Limited in South Korea. Due to unavailability of the financialstatements of Joint Venture with G K Company Ltd. South Korea the Company is unable tocomment on the same; however non-inclusion will not have any material impact on financialstatements of Company.
CONSOLIDATED FINANCIAL STATEMENT:
The Company has not prepared consolidated financial statements due to unavailability ofthe financial statements of its Joint Venture with GK Company Ltd. - South Korea for theyear under review. However this non-inclusion will not have any material impact onFinancial Statements of the company.
INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and timely preparation of reliable financialdisclosures.
DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 at the end of the financial year and ofthe loss of the company for that period;
(c) the directors had 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) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149
The independent directors have submitted the declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in subsection(6).
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder section 92 of the Companies Act 2013 is included in this report as Annexure-D
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Board made the following appointments/re-appointments based on the recommendationsof the Nomination and Remuneration committee:
The Company has appointed Mr. Sanjiv Rungta and Ms. Kumud Manseta as AdditionalDirector (Independent) w.e.f. 16.05.2016 to hold the Office up to conclusion of the 31stAnnual General Meeting held on 12.09.2016. The Company in the said Annual GeneralMeeting appointed them as Independent Directors for the terms of 5 consecutive yearscommencing from the said Annual General Meeting dt. 12.09.2016. Mr. Vinod Poddar wasre-designated by the Board as Executive Chairman w.e.f. 16.05.2016
Mr. Yash Rungta and Mrs. Darshika Poddar have resigned w.e.f. 16.05.2016 and 22.04.2016respectively from the Board of Directors of the Company. Mr. Umesh Lathi Whole timedirector & CFO has resigned w.e.f 08.07.2016. The Board places on record itsappreciation for the service rendered by them during their tenure with the Company.
The Company has appointed Mr.Sajjan kumar Bawri as Chief Financial Officer of theCompany w.e.f. 10.09.2016.
ANNUAL PERFORMANCE EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements)Regulations 2015 the performance evaluation of the Chairman andthe Non Independent Directors was carried out by the Independent Directors in theirseparate Meeting who also reviewed the performance of the Board as whole.
The Board's functioning was evaluated on various aspects including inter alia degreeof fulfillment of key responsibilities Board Structure and Composition effectiveness ofBoard process information and functioning.
The Directors were evaluated on aspects such as attendance and contribution at Board /Committee Meetings and guidance / support to the management outside Board /CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement of allBoard Members.
Evaluation of Independent Directors was done by the entire Board.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarization program are available on our website(www.grltires.com/investor-relation.html).
NUMBER OF METINGS OF THE BOARD:
During the year ended March 31 2017 Six Board Meetings were held.
The Details of the number of Meetings of the Board held during the Financial Year2016-17 forms part of the Corporate Governance Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirements)Regulations 2015 includes an Ethics & Compliance Task Force comprising seniorexecutives of the Company. The details of the Policy on Vigil Mechanism and Whistle BlowerPolicy is explained in the Corporate Governance Report and also posted on the website ofthe Company.
NOMINATION AND REMUNERATION POLICY:
The Board of Directors has re-constituted the Nomination and Remuneration Committee on16.05.2016. The Nomination notification and Remuneration committee has framed theNomination and Remuneration Policy and broad parameters are mentioned in CorporateGovernance Report section and also available on our website(www.grltires.com/investor-relation.html).
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were atarm's length basis and were in the ordinary course of business and the audit committeegranted omnibus approval for the transactions (which are repetitive in nature) and thesame was reviewed by the audit committee and the Board of Directors. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. All Related Party Transactions areplaced before the Audit Committee and also before the Board for approval and details ofrelated party transaction is given in Annexure E.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As per the provisions of section 135 of Companies Act 2013 the company has constitutedthe Corporate Social Responsibility Committee (CSR).
The Corporate Social Responsibility (CSR Committee) has formulated and recommended tothe Board a Corporate Social Responsibility Policy (CSR Policy) indicating the activitiesto be undertaken by the Company which has been approved by the Board. The Annual reporton CSR activities in accordance with the Companies (Corporate Social Responsibilitypolicy) Rules 2014 is set out as Annexure H forming part of this Report.
COMPOSITION OF AUDIT COMMITTEE AND OTHER DISCLOSURES:
The Composition of the Audit Committee has been given in Corporate Governance Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
PARTICULARS OF EMPLOYEES:
Particular of remuneration paid to the employees as required pursuant to Section 197read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are furnished in Annexure G.
Further Rule 5(2) and 5(3) is not given as none of the employees receives remunerationin excess of prescribed limit.
INDIAN ACCOUNTING STANDARDS (IND AS)
The company has adopted Indian Accounting Standards (Ind As) with effect from 1st April2017 pursuant to Ministry of Corporate affairs of the Companies (Indian AccountingStandards) Rules 2015.
The Company's Equity Shares have been admitted to the depository mechanism of theNational Securities Depository Limited (NSDL) and also the Central Depository Services(India) Limited (CDSL). As a result the investors have an option to hold the shares of theCompany in a dematerialized form in either of the two Depositories. The Company has beenallotted ISIN No. INE011C01015. Shareholders therefore are requested to take full benefitof the same and lodge their holdings with Depository Participants [DPs] with whom theyhave their Demat Accounts for getting their holdings in electronic form.
CODE OF CONDUCT:
Your Company is committed to conducting its business in accordance with the applicablelaws rules and regulations and highest standards of business ethics. In recognitionthereof the Board of Directors has implemented a Code of Conduct for adherence by theDirectors Senior Management Personnel and Employees of the Company. This will help indealing with ethical issues and also foster a culture of accountability and integrity. TheCode has been posted on the Company's website www. grltires.com. All the Board Members andSenior Management Personnel have confirmed compliance with the Code.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance ofDeposits) Rules 2014 and there was no outstanding deposit as on 31st March2017.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There was no significant or material order passed by any regulator or court ortribunal which impacts the going concern status of the Company or will have bearing oncompany's operations in future.
INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has constituted an Internal Complaint Committee under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.During the year no complaint was made before the Committee.
ENVIRONMENT AND SAFETY:
The Company is aware of the importance of environmentally clean and safe operations.The Company's policy requires conduct of operations in such a manner so as to ensuresafety of all concerned compliances environmental regulations and preservation ofnatural resources at the Plant.
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
Information in terms of requirement of clause (m) of Sub-Section (3) of Section 134 ofthe Companies Act 2013 regarding Conservation of Energy Technology Absorption andForeign Exchange Earning and Outgo read along with the Companies (Accounts) Rules 2014is given in Annexure-F of the report.
The Securities of the Company is listed on the BSE Ltd. Mumbai.
Your Directors take this opportunity to place on record their warm appreciation andacknowledge with gratitude the assistance cooperation and support extended to yourCompany by bankers clients employees as well as the investing community and look forwardto their continued support.
| ||For and on Behalf of the Board of Directors |
|Place: Mumbai ||Vinod Poddar (DIN 00182629) |
|Date : 30.05.2017 ||Executive Chairman |