To the Members
Your Directors are presenting the 55th Annual Report together with theAudited Statements of Account for the year ended 31st March 2017.
| ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|INCOME || || |
|Net Sales/Income from operations* ||28384 ||28006 |
|Other Income ||247 ||210 |
|Variation in Stock ||(207) ||182 |
|Total ||28424 ||28398 |
|EXPENDITURE || || |
|a) Cost of Materials** ||17468 ||16913 |
|b) Staff Cost ||2782 ||2742 |
|c) Power & Fuel ||2851 ||3271 |
|d) Other expenditure ||3148 ||3071 |
|Total ||26249 ||25997 |
|OPERATING PROFIT ||2175 ||2401 |
|Interest ||1824 ||1832 |
|Profit/(Loss) before Depreciation and Taxation || || |
| ||351 ||569 |
|Depreciation ||877 ||123 |
|PROFIT/(LOSS) BEFORE TAX ||(526) ||446 |
|Exceptional items ||(122) ||(942) |
|MAT Credit Entitlement ||- ||43 |
|Provision for Deffered Tax ||- ||(97) |
|PROFIT/(LOSS) AFTER TAX ||(648) ||(442) |
* Sales includes Traded goods of Rs.270 lacs (Previous Year Rs.566 lacs).
** Cost of Material includes Trading purchases of Rs. 253 lacs (Previous Year Rs.527lacs).
In view of the Net loss incurred by the Company during the year to conserve availableresources and considering that company is still under CDR your Directors have notrecommended any Dividend for the year.
During the Financial Year under review the Company has achieved turnover of Rs.28384lacs against Rs.28006 lacs in the corresponding previous year. The operating profit afterconsidering exceptional expenses but before interest depreciation and tax were higher byRs.594 lacs and Net loss before Tax is higher by Rs.152 lacs as compared to thecorresponding previous year.
CORPORATE DEBT RESTRUCTURING
The Company has complied with all the terms stipulated by the CDR. Further CDR-EG hasapproved a scheme Cost of Rs.60 Crores with Term Loan of Rs.45 Crores for resourcing longterm operational requirements of the Company. All the lenders have also approved thescheme and promoters have brought in their share of Rs.15 Crores.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134 of the Companies Act 2013 your Directorsconfirm that: -
a) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed and there are no material departures;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of your company at the end of the financial year and of the Lossof the Company for that year;
c) they have taken proper and sufficient care for the maintenance of the adequateaccounting records in accordance with the provisions of the Companies Act 1956 and TheCompanies Act 2013 for safeguarding the assets of your Company and for preventing anddetecting fraud and other irregularities;
d) they 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 were operatingeffectively;
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively;
Your Directors affirm their commitments to the Corporate Governance Standardsprescribed by the Securities and Exchange Board of India (SEBI). A report on CorporateGovernance with Management Discussion and Analysis as required under Regulation 27 of theSEBI Regulations are attached as Annexure.
Company is not accepting Fixed Deposits from the public/ shareholders.
In accordance with the provisions of the Companies Act 2013 and the Company's Articlesof Association.
Shri C. George Joseph Director will retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for reappointment.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of The Companies Act 2013 and Regulation27 of the SEBI Regulations.
The Board undertook the initative to conduct a formal evaluation of its own performanceand that of its committees & individual Directors. The Nomination & RemunerationCommittee led the evaluation process. The Independent Directors reviewed the performanceof non-independent Directors the Chairperson of the Company and the Board as a whole.
The Board would use the results of the evaluation process constructively to improve itseffectiveness optiomize individual strength of Directors and deliver performance &overall growth for the Company.
POTENTIALLY SICK COMPANY UNDER THE PROVISION OF SICK INDUSTRIAL COMPANIES (SPECIALPROVISION) ACT 1985
The Company has been classified as a potentially sick company during 2015-16 andintimated to the BIFR on 27th Oct 2016 after approval of shareholders.
i) Statutory Auditors :
M/s. Lodha & Co. Chartered Accountants Mumbai the statutory Auditors of theCompany hold office till the conclusion of the 55th Annual General Meeting of the Company.The Board has recommended the appointment of M/s. Bagaria & Co. LLP. CharteredAccountants Mumbai as the Statutory Auditors of the Company in their place. for a termof 5 (Five) years from the conclusion of the 55th Annual General Meeting of the Companyscheduled to be held in the year 2017 till the conclusion of the 60th Annual GeneralMeeting to be held in the year 2022 for approval of shareholders of the Company based onthe recommendation of the Audit Committee.
ii) Cost Auditors :
M/s. S T R Associates Cost Accountants were appointed by the Board of Directors asCost Auditors of your Company for the year ended 31st March 2017.
For the Financial Year 2017-18 Cost Auditor proposed remuneration of Rs.2.00 lacs isrecommended to the Shareholders for approval.
iii) Secretarial Audit :
According to the provision of section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report submitted by Company Secretary in Practice is enclosed as a partof this report
PERSONNEL & INDUSTRIAL RELATIONS
During the year in Nagpur Unit some un-social elements (not connected with RegisteredUnion) from Saoner town formed illegal union and gave charter of demands and stopped someworkers to attend their duties at our Nagpur plant resulting in disruption of operationsfrom 4th March 2017 to 4th May 2017.
Howeverthe operations have restarted from 5th May 2017 and workmen have resumed work.Except this the Industrial relations were cordial and satisfactory at both units ofthe Company. There were no employees whose particulars are to be given in terms ofSection 134 of the Companies Act 2013 read with the Companies (Particulars of Employees)Rules 1975.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under Section 134 (3) (m) of the Companies Act 2013 read withRule 8 of Companies (Disclosure of particulars in the Report of Board of Directors) Rules2014 are set out in Annexure - I attached hereto and forms part of this report.
VIGIL MECHANISM POLICY
In pursuance to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism Policy for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.gtnindustries.com under investors/policy documents/Vigil Mechanism Policy link.
RELATED PARTY TRANSACTIONS POLICY
In pursuance to the provisions of Section 188 of Companies Act 2013 companyestablished Related Party Transaction Policy.
Related party transactions that were entered during the financial year were at an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties entered by the Company in the normal course ofbusiness are periodically placed before the Audit Committee/Board for its omnibus approvaland the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-III
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 theRules there under and the Listing Agreement. This Policy was considered and approved bythe Board has been uploaded on the website of the Company at www.gtnindustries.comunder investors/ policy documents/Related Party Policy link.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is Annexed-IVherewith
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
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.
OTHER MANAGEMENT POLICIES
The following policies are placed in company's website.
1) Policy for dertermining materiality of events.
2) Policy on preservation of documents.
3) Policy on code of conduct for Board Members.
4) Nomination and Remuneration Policy.
Your Directors place on record their sincere thanks to CDR- EG Central Bank of IndiaState Bank of India IDBI Bank Limited and Export-Import Bank of India (Exim Bank) theconcerned Departments of the State and Central Government Employees and Shareholders ofthe Company for their valuable assistance support and co-operation to the Company.
For and on behalf of the Board
Chairman & Managing Director
Place: Hyderabad Date : 26th May 2017
Information as per Section 134 (3) (m) and read with Rule 8( 3) (A) (B) (C) ofCompanies (Accounts) Rules 2014 and forming part of the Directors' Report:
A. Conservation of Energy
The Company is making all round efforts for the conservation of energy. To reduce theenergy cost energy efficient equipments are being used and purchased from outside. Totalenergy consumption and energy consumption per unit of production as prescribed in form A is as under:
|Particulars ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|I. Power Consumption || || |
|1 Electricity || || |
|a) Purchased (Units in lacs) ||559.50 ||583.42 |
|Total amount (Rs. In lacs) ||2816.32 ||3260.65 |
|Rate per unit (Rs.) ||5.03 ||5.59 |
|b) Own generation through Diesel || || |
|Generator (units in lacs) ||2.10 ||0.83 |
|Units per liter of diesel oil ||3.52 ||3.51 |
|Cost per unit (Rs.) ||15.76 ||12.54 |
|2 Coal ||Nil ||Nil |
|3 Furnace Oil (low sulphur high stock oil) ||Nil ||Nil |
|4 Other internal generation ||Nil ||Nil |
|II. Consumption per unit of production || || |
|a) Electricity Units per Kg. Yarn ||7.38 ||5.86 |
|b) Furnace Oil (low sulphur high stock oil) Ltrs. per Kg/unit. ||- ||- |
B. Technology Absorption
Efforts made in Technology Absorption as per Form B:
Indigenous technology alone is used and Research and Development are carried out by aseparate Textile Research Association for Textile Units situated Southern Region (SITRA).
C. Foreign Exchange Earnings & Outgo
Total Foreign Exchange earned and used excluding capital goods Components &Spares.
Earned : Rs.9709.51 lacs (Previous year Rs.10533.55 lacs)
Used : Rs.7097.54 lacs (Previous year Rs.6008.38 lacs)