You are here » Home » Companies » Company Overview » Gujarat Borosil Ltd

Gujarat Borosil Ltd.

BSE: 523768 Sector: Industrials
BSE 00:00 | 20 Jun 114.85 5.75






NSE 05:30 | 01 Jan Gujarat Borosil Ltd
OPEN 105.00
VOLUME 129024
52-Week high 174.75
52-Week low 77.00
P/E 88.35
Mkt Cap.(Rs cr) 783
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 105.00
CLOSE 109.10
VOLUME 129024
52-Week high 174.75
52-Week low 77.00
P/E 88.35
Mkt Cap.(Rs cr) 783
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Borosil Ltd. (GUJBOROSIL) - Director Report

Company director report

Dear Members

The Directors take pleasure in presenting the Twenty-Eighth Annual Report together withthe Audited Financial Statements for the year ended March 31 2017.

Financial Highlights

The highlights of the financial results of the Company for the financial year 2016-17are as follows:

(Rs in Lacs)

Year Ended 31.03.2017 Year Ended 31.03.2016
Revenue from operations 18833 18830
Other Income* 723 128
Profit before finance cost depreciation and tax 4786 3618
Finance Cost 1108 1061
Depreciation 1439 1367
Net Profit before tax 2239 1191
Provision for Taxation /MAT/Earlier year Tax (3) 19
Provision for deferred tax liability /(Asset) 814 419
Other Comprehensive income (17) (9)
Total Comprehensive income 1412 745
Add: Balance brought forward from last year (3209) (3962)
Balance carried to Balance Sheet (1781) (3209)

*Other income includes refund of Rs 559.38 lacs towards revision in the rates of gastransportation charges for the period from November 2008 to March 2016 pursuant torecommendation made by the Petroleum and Natural Gas Regulatory Board.


Your Directors do not recommend any dividend for the year ended March 31 2017 on bothEquity and 9% Non-Cumulative Non-Convertible Redeemable Preference Shares in view ofcarry forward losses and in order to conserve resources for the ongoing capitalexpenditure project.


The paid up Share Capital comprises of 68207500 Equity shares of Rs 5/- each and9000000 – 9% Non-Cumulative Non-Convertible Redeemable Preference shares of Rs100/- each. The Preference Shareholder has acquired voting rights due to non-payment ofdividend for two years. During the year under review the Company has not issued shareswith differential voting rights nor granted stock options nor sweat equity.


Revenue during the year under review remained flat at Rs18833 lacs (in spite of havinggood amount of sales orders in hand) as compared to Rs 18830 lacs in the previous yearowing to capacity constraint in tempering of solar glass.

During the year there was higher utilization of production capacity for themanufacture of solar glass whose sales grew by 20%. However sales of pattern glass waslower by 46% partly owing to lower availability of production capacity as explained aboveand partly owing to the major slowdown in the construction industry followingdemonetization of currency.

Exports during the year under review were somewhat lower at Rs 4264 lacs as comparedto Rs 4942 lacs during the previous year. Directors are pleased to announce that yourcompany has been awarded SPECIAL EXPORT AWARD by CAPEXIL for increase in exports in glasssector for the year 2014-15.

In spite of turnover remaining stagnant profit before finance cost depreciation andtax was at Rs 4786 Lacs showing growth of 32% as compared to Rs 3618 Lacs in theprevious year. The improved working was achieved by attaining higher production efficiencyand continuous efforts to reduce the production cost and in spite of pressure on sellingprices due to cheap imports of dumped solar glass from China.

Profit before tax grew by 88% at Rs 2239 lacs as compared to Rs 1191 lacs in theprevious year.

After pursuing the matter of inverted duty structure for 30 months with variousMinistries the Government of India finally levied 6% countervailing duty on import ofsolar glass and 6% excise duty on domestically produced solar tempered glass againstsubmission of required forms/declarations by the buyers.

Your company has filed application for levying Anti-dumping duty against cheapsubsidized imports from China. The case has been initiated realizing that prima faciethere is a case and investigation is in progress. High Anti-dumping duties have beenlevied by EU against import of Solar tempered glass from China. Similarly there is ananti-dumping duty by USA against import of modules from China. Unless the Government actsdecisively and imposes suitable levies on dumped imports there will be no room fordomestic production to grow.

To meet the demand for new products the Company is in process of commissioning astate-of-the-art first of its kind tempering line which will be operational from 2ndquarter of current financial year. The said tempering line will be capable of temperingthinner glass from 2 mm thickness to 3 mm also as against the minimum thickness of 3.2 mmonwards at present. There is a growing demand of Glass-to-glass modules which requirefully tempered 2mm glass sheets in their manufacture. This emerging segment in thePhotovoltaic solar market is expected to grow multifold in near future. The Company willbe one of the few companies in the world having achieved this distinction. With thecommissioning of this new line the Company's tempering processing capacity is set to takea big leap to almost double compared to current capacity. This will allow the Company tomeet growing demand for Solar Tempered glass and enable catering to surge demand.

Looking to the substantially high growth in Solar PV sector and consequent risingdemand for solar glass the Company is planning to set up a new furnace with temperingfacility of 250 TPD at the existing location. The Company is in the process of arrangingfunds for the said project.


The Company is mainly engaged in production of low iron solar glass for application insolar power sector. Solar PV market has faced tough times internationally in view ofextraordinary capacity increase in China since

2011 resulting in flooding of solar glass by China in international market includingIndia. The Government of India has been giving enormous momentum to the use of solarenergy by setting a target of 100 gigawatt (GW) by the year 2022. Simultaneously emphasishas been given to meet demands of power in irrigation sector by installing solar powerpumps and by offering off-grid roof-top and standalone solar power solutions. These havestarted to materialize and are likely to rise sharply in the near future.

Year 2016 saw annual global installed capacity of solar glass reach over 77 GW whichrepresents a 34% year-on-year growth rate building upon the 32% year-on-year growth rateenjoyed in 2015. This is for the first time since 2010-2011 that growth in demand forsolar glass surpassed more than 30% for two consecutive years.

India's solar market is poised to take up the mantle as one of the world' s mostenergetic growing markets with 10 GW of new PV installations expected for the year 2017.Presently India sits behind Japan as the world's fourth-largest market with annualprojected demand of 5.8 GW compared to Japan's 8.7 GW. With the projected growth Indiawould overtake Japan to become the world's third-largest market of solar glass afterChina and U.S.

The Company plans to produce limited quantity of patterned glass owing to expectedincrease in production of tempered solar glass from second quarter of 2017-18. Thislimited quantity of patterned glass in exclusive designs will be made for architecturalapplications to make available a superior product for shower cubicles partitions andtabletops etc. The Company has plans to continue to serve this segment in nicheapplications.


The Company is the only producer of solar glass in the Country and the product iswell accepted. The Company is constantly evaluating to grow in this sector in domesticmarket and remain a dominant player. Its natural advantage of offering a shorter lead timeto module manufacturers works favourably in helping it to secure business.

Despite concerns about weak power demand growth and growing incidence of gridcurtailment solar power outlook in India remains very strong; 2017 will be abumper year for the solar sector in India with total installed capacity reaching over 20GW by the end of the year; Continuing reduction in module prices and downward trendin domestic interest rates will continue to provide strong ongoing demand impetus to thesolar power market.

The rooftop solar sector recently received approval from World bank for a globalenvironmental facility (GEF) grant of US $ 22.93 Million to enhance installed capacity ofgrid connected rooftop solar (GRPV) and to strengthen the capacity of relevantinstitutions for widespread installations in India.

Rooftop solar is expected to continue its spectacular growth trajectory in 2017.Around 1.1 GW of rooftop solar capacity is expected to be added in 2017 which is up by75% from 2016 driven by capital subsidies and substantial demand from public sector.

Patterned glass in exclusive designs is an attractive product. It is adding newerapplications in the architectural glass segment and expects to keep growing in nichesegments.


Government policies to provide solar power at cheapest price and the methods likereverse bidding for power projects is leading to compromise on quality and long termprospects. This is putting heavy pressure on the domestic manufacturers of components andforcing them to withhold their expansion plans due to low return on investment. Someindications of realization on this front started as is evident by the fact that manyplayers have stayed out from the recent bidding process and raised their concerns onviability at prices considered absurdly low.

Compared to 2015 imports of solar cells and modules into India in 2016 grew by47%. China continues to be the single largest exporter of Cells and modules to India witha market share of 87%.

PV module prices have declined by 10% in the last quarter and by 30% since the lastyear. Low component prices will be factored in future projects which will push the biddingprices further down and bring increased pressure on prices of components.

China as the World's largest PV glass producer accounts for roughly over 75% of thetotal capacity. In the beginning of 2016 Flat group invested 550 Million RMB in theconstruction of a PV glass manufacturing base in Vietnam to cater to South East AsianIndian European and Japanese customers. XINYI group has commissioned 900 Tons per day PVglass manufacturing plant in Malaysia in the beginning of 2017 to cater to IndianEuropean and South East Asian markets. Thus glass availability is increasing much fasterand this could lead to subdued prices.

Without an appropriate anti-dumping duty on solar glass it is becoming impossibleto compete with China due to heavy subsidies given by the Chinese Government. An earlyaction by Government is the only way to provide fillip to domestic production of solarcomponents/modules and generate employment in the country.

There is a considerable time lag in approval of proposals to set up solar powerplants despite policy push provided by the Government under JNNSM resulting in slower thanexpected growth in implementation.

Moreover banks are still hesitant to financesetting up of solar power farms as thisindustry is relatively new and in many cases the bidding has been done at artificially lowprices thereby endangering viability.

However the solar water pump and Rooftop sectors are gaining good traction and growingvery fast.


The Company's business activity falls within a single primary business segment viz.Manufacture of Flat glass. As such there are no separate reportable segments as perIndian Accounting Standard 108.


The growth of solar energy in the Country has gained momentum which will require hugequantity of low iron glass. The Government plans to set up 100 GW of solar power plants by2022. The action on the ground has speeded up and all the sectors i.e. Grid power Rooftopand Solar water pumps are showing decent growth. The solar energy produced will reducepressure on natural resources besides being non-polluting and environment friendly andwill lead to saving in Oil import bill and the sector has extremely good potential togrow.


The Company is exposed to normal industry risk factors of competition economic cycleand uncertainties in the international and domestic markets.

The Government approvals for land and readiness of power distribution companies toevacuate power needs to be focused in order to achieve ambitious growth plans to producesolar energy. The continued pressure to quote lower prices for electricity in the biddingsto get Government allocations is leading to lower prices for input/component manufacturersthereby making them vulnerable which will affect health of the Industry. There are hugeimports of Modules and Solar glass from China in view of overcapacity and lowerinternational demand. This also reduces the demand for components as the ready modules aregetting imported. The imports into India are duty free and thereby do not provide aconducive environment for taking up domestic production. This is hurting the solar glassindustry even more than import of glass and is against the national interest from theangle of domestic industrialization job creation and conservation of foreign exchange.Realizing the need to have domestic production of components the Government is nowworking on solutions and it is expected that a manufacturing policy for solar to developentire eco-system will be the most important driver for growth in domestic production inthis strategically important sector.


The Company has adequate Internal Control System commensurate with its size and natureof business. All transactions are properly authorized recorded and reported to themanagement. The internal control systems are designed to ensure that thefinancialstatements are prepared based on reliable information. The

Internal Audit is continuously conducted by in house Internal Audit department of theCompany and Internal Audit Reports are reviewed by the Audit Committee of the Boardperiodically.


The operational performance during the year improved as record production of solarglass and sales was achieved. The selling prices for patterned glass improved. The EBIDTAmargins improved to 24% as against

19% in the previous year. The improvement was led by higher production efficiencies andlower costs despite higher fuel/employees cost non-availability of cenvat credit oninputs and decline in the selling prices for solar glass.


The industrial relations continued to be cordial.

Number of people employed as on 31st March 2017 were as under:

Staff : 227
Workers : 170 (Excluding contract labours)

The Company has effective HR systems to make the performance appraisals and workingmore transparent. Greater operational and financial details are shared with the managementcadre with a view to having their deeper involvement and for development of humanresources.


As required by Regulation 34 read with schedule V of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 a Report onCorporate Governance is appended along-with a Certificate of Compliance from the Auditors.


The Company has not accepted any deposits and as such no amount of principal orinterest was outstanding on the date of the Balance Sheet.


The Company does not have any subsidiary Company.

The Company is associate company of two companies namely Borosil Glass Works Limited(BGWL) and Fennel Investment and Finance Private Limited by virtue of their holding ofmore than 20% of the equity share capital in the Company. BGWL's voting rights in theCompany is 79.46% of the total share capital (including preference share capital).


The Company has established a Whistle Blower (Vigil) Mechanism and formulated a WhistleBlower Policy to deal with instance of fraud and mismanagement. The details of the Policyis explained in the Corporate Governance Report which form part of this Annual Report andalso posted on the website of the Company at http://www. click on Whistle Blower Policy.


During the year five Board Meetings and four Audit Committee Meetings were convenedand held. The details of these are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

Appointment/ re-appointment:

As per the provisions of the Companies Act 2013 and Articles of Association of theCompany Mr. B L Kheruka (DIN 00016861) Director of the Company will retire by rotationat the ensuing Annual General Meeting of the Company and being eligible offer himself forre-appointment. The Board recommends his appointment.

Brief details of the Director being reappointed have been incorporated in the Noticefor the forthcoming Annual General Meeting.

There is no change in the composition of the Board of Directors and Key ManagerialPersonnel during the year under review except as stated above.

Declaration by Independent Directors:

The Independent Directors have submitted the declaration of independence as requiredpursuant to Section 149(7) of Companies Act 2013 stating that they meet the Criteria ofindependence as provided in sub-section(6).

Company's Policy on Directors Appointment and Remuneration etc.:

Under Section 178 of the Companies Act 2013 the Company has prepared a policy onDirector's appointment and Remuneration. The Company has also laid down criteria fordetermining qualifications positive attributes and independence of a Director. Policyrelating to remuneration for the Directors Key Managerial Personnel and Other employeesis attached herewith as an ‘Annexure A' to this Report.

Familiarization Programme for Independent Directors:

A Familiarization programme was prepared by the Company about roles rights andresponsibilities of Independent Directors in the Company nature of industry in which theCompany operates business model of the Company about Secretarial Standard-Board &General Meeting SEBI (LODR) Regulations 2015 etc. which was presented to IndependentDirectors on November 17 2016. The details of the above programme are available onwebsite of the Company at - click onFamiliarization Programme for Independent Directors.

Formal Annual Evaluation:

In compliance with the Companies Act 2013 and Regulations 17 19 and other applicableprovisions of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the performance evaluation of the Board wascarried out during the year under review.

The Formal Annual Evaluation has been made as follows:

1. The Company has laid down evaluation criteria separately for Board IndependentDirectors Directors other than Independent Directors and various committees of the Board.The criteria for evaluation of Directors

(including the Chairman) included parameters such as willingness and commitment tofulfill duties high professional ethics contribution during meetings and timelydisclosure of all the notice/details required under various provisions of laws. Based onsuch criteria the evaluation was done in a structured manner through peer consultation& discussion.

2. Evaluation of the Board was made by a Separate Meeting of Independent Directors heldunder Chairmanship of Mr. Ashok Kumar Doda Lead Independent director (without attendanceof Non – Independent Director and members of management ) on 07th March2017.

3. The performance evaluation of all committees namely:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Share Transfer Committee were done by the Board of Directors at its meeting held on07th March 2017.

However performance evaluation of Stakeholders Relationship Committee was done on 03rdMay 2017.

4. Performance evaluation of Non – Independent Directors namely Mr. B. L. KherukaMr. P. K. Kheruka Mr. Ashok Jain and Mr. Rajesh Chaudhary was done by Separatemeeting of Independent Directors.

5. Evaluation of Independent Directors namely Mr. Shashi Kumar Mehra Mr. Jagdish M.Joshi and Mr. Ashok Kumar Doda and Mrs. Shalini Kamath was done (excluding the Directorwho was evaluated) by the Board of Directors of the Company at its meeting held on 07thMarch 2017.

6. In addition the Nomination and Remuneration Committee has carried out evaluation ofevery Director's performance at its meeting held on 07th March 2017 asrequired under Section 178 (2) of Companies Act 2013.

7. The Directors expressed their satisfaction with the evaluation process. Performanceevaluation of Board/ Independent Directors/ Committees was found satisfactory.


Key Managerial Personnel (KMP) of the Company under Section 203 of the Companies Act2013 are as follows:

1 Mr. Rajesh Chaudhary Whole Time Director
2 Mr. Sunil Roongta Chief Financial Officer
3 Mr. Kishor Talreja Company Secretary


The Company faces various risks in form of financial risk operational risks etc. TheCompany understands that it needs to survive these risks in the market and hence have madea comprehensive policy on Risk Management.


As part of its initiatives under "Corporate Social Responsibility" (CSR) theCompany has undertaken projects in the area of education which were in accordance withSchedule VII of the Companies Act 2013.

During the year the Company contributed Rs10 lacs to Friends of Tribals SocietyMumbai as a part of project being undertaken by them for imparting education in tribalareas under One Teacher School (OTS) called Ekal Vidyalaya's and Rs 5 lacs to Rotary Clubof Bharuch for Mega Medico Surgical Camp in Bharuch Gujarat as a part of project beingundertaken by them for preventive health care programme.

In terms of Section 135 of the Companies Act 2013 and Rules made thereunder theCompany has constituted CSR committee comprising of the following members:

1. Mr. B. L. Kheruka-Chairman

2. Mr. P. K. Kheruka

3. Mr. Jagdish Joshi out of which Mr. Jagdish Joshi is an Independent Director.

Company's CSR Policy:

The Board of Directors of the Company has approved the CSR Policy as recommended by theCSR Committee and the same has been uploaded on the Company's website at - click on CSR policy.

Initiatives taken by the Company during the year:

The 2% of the net profits of the Company during the immediate three preceding financialyears amounts to Rs 22.52 lacs. The Company has contributed a sum of Rs15 lacs during theyear. An Annual Report on CSR activities in terms of Section 134(3) (o) of the CompaniesAct 2013 read with the Companies (Corporate Social Responsibility) Rules 2014 isattached herewith as an ‘Annexure B' to this Report.

Reason for non-spending balance CSR contribution:

The Company was looking for some useful avenue for making CSR contribution of theremaining amount. In this context the Company has jointly with Borosil Glass WorksLimited Promoter Company and Hopewell Tableware Private Limited (HTPL) wholly ownedsubsidiary of BGWL has constituted a Trust namely - ‘Borosil Foundation' with mainobject of making CSR contribution by the Company BGWL and HTPL from time to time.Further the Company will contribute future CSR contribution through Borosil Foundation asand when said trust is fully operative for some meaningful purposes. Since details areyet to be workout balance contribution could not be made in the financial year 2016-17.


Pursuant to section 92(3) of the Companies Act 2013 (‘the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return inform MGT 9 is attached as an ‘Annexure C' to this Report.


All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC 2is not applicable.

All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website at http://www. - clickon Related Party Transaction policy.

The details of the transactions with Related Party are provided in the accompanyingfinancial statements.


There are no significant and material orders passed by the Regulators / Courts whichwould impact the going concern status of the Company and its future operations. Certainmatters related to excise duty are pending before Court / Excise Authorities outcome ofwhich will impact financials of the Company.


The Company's plants do not generate any effluent except flue gas the chemicalcomposition of which is within permissible limits.



Your Board recommends the ratification of appointment of M/s. Chaturvedi & ShahChartered Accountants Mumbai (Firm Registration no.101720W) as Statutory Auditors of theCompany at the ensuing AGM. M/s. Chaturvedi & Shah Chartered Accountants haveconfirmed that their appointment if made shall be in accordance with the provisions ofSection 139 and will satisfy the criteria as provided in Section 141 of the Companies Act2013 and Rules made thereunder.


Pursuant to section 148 of the Companies Act 2013 and Rules made thereunder the Boardof Directors on the recommendation of the Audit Committee appointed M/s. KailashSankhlecha & Associates Cost Accountants as the Cost Auditors of the Company for thefinancial year 2017-18 and has recommended their remuneration to the Shareholders fortheir ratification at the ensuing Annual General Meeting.

The Audit Committee has also received a certificate from the Cost Auditor certifyingtheir independence and arm's length relationship with the Company. Pursuant of Section148(6) of the Companies Act 2013 and Rules made thereunder the Cost Audit Report for thefinancial year 2015-16 was filed with the Ministry of Corporate Affairs on 02ndSeptember 2016 vide SRN no. G10473668.


In terms of Section 204 of the Act and Rules made there under Mr. Virendra BhattPracticing Company Secretary (CP no.124) has been appointed Secretarial Auditors of theCompany. The report of the Secretarial Auditors is attached as an ‘Annexure D'to this Report. The Secretarial Audit Report does not contain any qualification.


To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act 2013: a. that in the preparation of the annual financialstatements the applicable Indian accounting standards have been followed and there wereno departures; b. that we 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 thefinancial year and profit of the Company for that period; c. that we have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; d. that the annual financialstatements have been prepared on a going concern basis; e. that proper internal financialcontrols were in place and that the financial controls were adequate and were operatingeffectively; f. that systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.


Details of Loans Guarantees and Investments are furnished in the Notes to theFinancial Statements. During the year under review Company has reduced its share ofpartnership in Swapan Properties LLP from 46% to 18%.


The Company is continuously endeavouring to ensure safe working conditions for all itsemployees.

The Company attaches high importance to the Occupational health and safety systems toprotect all its employees. The Company has taken mediclaim policy for all its employeesand their dependent family members as also personal accident insurance of appropriateamounts for the employees at various levels.


The Company has in place a Policy for Prohibition and Redressal of Sexual Harassment atwork place which is in line with the requirements of the Sexual Harassment of women at theWorkplace (Prevention Prohibition

& Redressal) Act 2013 and Rules made thereunder. All employees (permanentcontractual temporary and trainees) are covered under this policy. The Company hasconstituted an Internal Complaint Committee for its Registered Office and Corporate Officeunder Section 4 of the captioned Act. No complaint has been filed before the saidcommittee till date. The Company has filed an Annual Report with the concerned Authority.


A Statement containing details of disclosure as required under Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is attachedherewith as an ‘Annexure E' to this Report.


Particulars of Employees as required under Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached herewith as an ‘AnnexureF' to this Report.


Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with the Rule8 (3) of the Companies (Accounts) Rules 2014 is given as an ‘Annexure G' tothis Report.


Your Directors would like to convey their deep appreciation for the co-operationreceived from employees Company's bankers Customers and Government Authorities duringthe year under review. Directors also place on record their appreciation for theconfidence reposed by the shareholders.

For and on behalf of the Board of Directors
Place: Mumbai B. L. Kheruka
Date: May 03 2017 Chairman