Your Directors are pleasured to present the 33rd ANNUAL REPORT together with theAudited Financial Statements for the Financial Year 2016-17 ended on 31st March 2017.
1. FINANCIAL RESULTS:
(` in lakh)
|Particulars ||2016-17 ||2015-16 |
|Operating Profit (Before Interest & Depreciation) ||706.95 ||802.93 |
|Less : Financial Cost ||327.59 ||422.28 |
|Profit before Depreciation ||379.36 ||380.65 |
|Less : Depreciation ||172.20 ||173.78 |
|Profit before Tax ||207.16 ||206.87 |
|Less : Provision for current Tax (after MAT credit) ||64.04 ||51.45 |
|(Add)/ Less: Deferred Tax (Asset)/ Liability ||(5.13) ||21.57 |
|Profit after tax ||148.25 ||133.85 |
|Add: Balance Brought Forward from Previous year ||790.44 ||656.59 |
|Balance carried to Balance Sheet ||938.69 ||790.44 |
There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2017 and date of this report.
With a view to conserve the resources for the working capital requirement of theCompany your Directors have not recommended any dividend for the year under review.
3. REVIEW OF OPERATIONS:
The Gross revenue from operations during the year under review was ` 101.63 Crores ascompared to
` 121.13 Crores during 2015-16.
The Operating Profit (Before Interest and Depreciation) was ` 706.95 lakh during theyear under review compared to ` 802.93 lakh during 2015-16. The Profit before Tax for theyear under review was
` 207.16 lakh against ` 206.87 lakh during 2015-16. The Net Profit of the Company stoodat ` 148.25 lakh compared to ` 133.85 lakh for the year 2015-16.
The Company has made export at FOB value of ` 59.95 Crores during the year under reviewcompared to ` 59.76 Crores during 2015-16. The management is of the firm opinion thatduring the current year the export market will improve and in turn the exports of theCompany will increase to a greater extent.
4. RECOGNITION AS EXPORT HOUSE:
The Director General of Foreign Trade on the basis of Export performance of theCompany has accorded / recognised the Company as One Star Export House.
The Company is enjoying Financial Assistance in the form of term loans and workingcapital facilities from State Bank of India.
6.1 One of your Directors viz. Mr. Rishab Chhajer (DIN: 05184646) retires by rotationin terms of the Articles of Association of the Company. However being eligible offershimself for reappointment.
6.2 The Board of Directors duly met 7 times during the financial year under review.
6.3 The Company has received necessary declaration from each Independent Director ofthe Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet withthe criteria of their independence laid down in Section 149(6) of the Act.
6.4 Formal Annual Evaluation:
The Nomination and Remuneration Committee adopted a formal mechanism for evaluating theperformance of the Board of Directors as well as that of its Committees and individualDirectors including Chairman of the Board Key Managerial Personnel/ Senior Managementetc. The exercise was carried out through an evaluation process covering aspects such ascomposition of the Board experience competencies governance issues etc.
6.5 DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement of Section 134 of the Companies Act 2013 it is herebyconfirmed:
(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March 2017 beingend of the financial year 2016-17 and of the profit of the Company for the year;
(iii) that the Directors had taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors had prepared the annual accounts on a going concern basis.
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
7. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies safeguarding ofassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.
8. MANAGERIAL REMUNERATION:
REMUNERATION OF DIRECTORS:
|Name of the Director & Designation ||Remuneration for the year ||% increase over last year ||Parameters ||Median of Employees Remuneration ||Ratio ||Commission received from Holding/ Subsidiary |
| ||2016-17 || || || || || |
|1. Mr. Ashok Chhajer Managing Director ||` 1320000/- ||- ||- ||98880/- ||13.35 ||N.A. |
|2. Mr. Rishab Chhajer Jt. Managing Director ||` 730715/- ||10.71% ||- ||98880/- ||7.39 ||N.A. |
The Board of Directors has framed a Remuneration Policy that assures the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivateDirectors Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. All the Board Members and Senior Management personnelhave affirmed time to time implementation of the said Remuneration policy.
The Nomination and Remuneration Policy are available on the Company'swebsite-www.gujaratcraft.com.
9. KEY MANAGERIAL PERSONNEL:
% INCREASE IN REMUNERATION OF DIRECTORS & KMP:
|Name of the Director & KMP ||Designation ||Percentage Increase |
|1. Mr. Ashok Chhajer ||Managing Director ||- |
|2. Mr. Rishab Chhajer ||Jt. Managing Director ||10.71 |
|3. Mr. Raichand Golchha ||CFO ||- |
|4. Ms. Anchal Bansal# ||Company Secretary ||N.A. |
# Appointed w.e.f. 3rd June 2016
10. PERSONNEL AND H. R. D.:
10.1 INDUSTRIAL RELATIONS:
The industrial relations continued to remain cordial and peaceful and your Companycontinued to give ever increasing importance to training at all levels and other aspectsof H. R. D.
The Number of permanent Employees of the Company are One Hundred Fifteen. Therelationship between average increase in remuneration and Company's performance is as perthe appropriate performance benchmarks and reflects short and long term performanceobjectives appropriate to the working of the Company and its goals.
10.2 PARTICULARS OF EMPLOYEES:
There is no Employee drawing remuneration requiring disclosure under Rule 5(2) ofCompanies Appointment & Remuneration of Managerial personnel) Rules 2014.
11. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT &SECURITIES PROVIDED:
Details of Related Party Transactions and Details of Loans Guarantees and Investmentscovered under the provisions of Section 188 and 186 of the Companies Act 2013respectively are given in the notes to the Financial Statements attached to the Directors'Report.
All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm's length basis. During the year theCompany had not entered into any transactions with related parties which could beconsidered as material in accordance with the policy of the Company on materiality ofrelated party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website atwww.gujaratcraft.com.
12. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information required under Section 134(3)(m) of the Companies Act 2013 and rule8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy andTechnology Absorption forms part of this report and is given by way of Annexure- A.
13. CORPORATE GOVERNANCE AND MDA:
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Report on Corporate Governance and ManagementDiscussion and Analysis (MDA) and a certificate regarding compliance with the conditionsof Corporate Governance are appended to the Annual Report as Annexure - B.
14. SECRETARIAL AUDIT REPORT:
Your Company has obtained Secretarial Audit Report as required under Section 204(1) ofthe Companies Act 2013 from M/s. Pinakin Shah & Co. Company Secretaries Ahmedabad.The said
Report is attached with this Report as
The remarks of auditor and notes on accounts are self explanatory.
15. EXTRACT OF ANNUAL RETURN:
The extract of Annual return in Form MGT-9 has been attached herewith as Annexure D.
16. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS' RELATIONSHIPCOMMITTEE:
The details of various committees and their functions are part of Corporate GovernanceReport.
17. DEMATERIALISATION OF EQUITY SHARES:
Shareholders have an option to dematerialise their shares with either of thedepositories viz. NSDL & CDSL. ISIN for Equity Shares of the Company is: INE372D01019.
The Equity Shares of the Company are listed at BSE Limited and Ahmedabad Stock ExchangeLimited. The Company is generally regular in payment of Annual Listing Fees. The Companyhas paid Listing fees up to the year 2017-18.
The present Auditors of the Company M/s. Kantilal Patel & Co Chartered AccountsAhmedabad will retire at the ensuing 33rd Annual General Meeting.
The remarks of Auditors are self explanatory and have been explained in Notes onAccounts.
In terms of Section 139 of the Companies Act 2013 read with Companies (Audit &Auditors) Rules 2014 the Board of Directors has recommended the appointment of M/s.Arpit Patel & Associates Chartered Accountants Ahmedabad as Statutory Auditors ofthe Company for a period of 5 years to hold office from the conclusion of the ensuing 33rdAGM till the conclusion of 38th AGM on remuneration to be decided by the Board orCommittee thereof.
The Company has obtained consent from M/s. Arpit Patel & Associates (FRN: 144032W)to the effect that their appointment as Auditors of the Company for period of 5 yearscommencing from the Financial Year 2017-18 to 2021-22 if made will be in accordance withthe provisions of Section 139 and 141 of the Companies Act 2013.
The Shareholders are requested to consider and approve the appointment of the StatutoryAuditors of the Company.
The movable and immovable properties of the Company including plant and Machinery andstocks wherever necessary and to the extent required have been adequately insured againstthe risks of fire riot strike malicious damage etc.
The Company has not accepted any Deposits from general public or from Shareholdersduring the year under review.
19.4 RISKS MANAGEMENT POLICY:
The Company has a risk management policy which from time to time is reviewed by theAudit Committee of Directors as well as by the Board of Directors. The Policy is reviewedquarterly by assessing the threats and opportunities that will impact the objectives setfor the Company as a whole. The Policy is designed to provide the categorization of riskinto threat and its cause impact treatment and control measures. As part of the RiskManagement policy the relevant parameters for protection of environment safety ofoperations and health of people at work and monitored regularly with reference tostatutory regulations and guidelines defined by the Company.
19.5 SUBSIDIARIES/ ASSOCIATES/ JVS:
The Company does not have any Subsidiary/ Associate Company / JV.
19.6 CODE OF CONDUCT:
The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management. All the Board Members and Senior Management personnelhave affirmed compliance with the code of conduct.
19.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR
There has been no significant and material orders passed by any regulators or courts ortribunals impacting the going concern status of the Company and its future operations.
19.8 ENVIRONMENT AND SAFETY:
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances of environmental regulations and preservationof natural resources.
19.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013:
The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review the Company did not receive anycomplaint.
The Company has entered in to an agreement with Life Insurance Corporation of India forcovering its Gratuity Liability and has thus provided for the same. A Gratuity Trust Fundhas been created with Life Insurance Corporation of India.
19.11 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.
20. DISCLOSURE OF ACCOUNTING TREATMENT:
In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.
Your Directors express their sincere gratitude for the assistance and co operationextended by Financial Institutions Banks Government Authorities Shareholders Suppliersand Customers.
Your Directors also wish to place on record their appreciation of the contribution madeby the employees at their levels towards achievements of the Company's goals.
For and on behalf of the Board
|Place : Ahmedabad. ||Rishab Chhajer ||Ashok Chhajer |
|Date : 20th July 2017 ||Joint Managing Director ||Managing Director |
(A) CONSERVATION OF ENERGY:
|Steps taken or impact on conservation of energy ||In line with the Company's commitment towards conservation of energy all units continue with their efforts aimed at improving energy efficiency through innovative measures to reduce wastage and optimize consumption. The Company has installed Power factor panels so as to reduce overall power consumption. |
|Steps taken by the company for utilising alternate sources of energy Capital investment on energy conservation equipments ||No significant steps have been taken during the year under review |
(B) TECHNOLOGY ABSORPTION:
|Efforts made in Research and Development and Technology Absorption is as under: |
|1. Research & Development (R & D): || |
|(a) Specific areas in which R&D carried out by the Company. ||New product development and improvement in Quality. |
|(b) Benefits derived as a result of the above R&D ||Increase in the range of products in its volume of contribution in increased sales turnover. |
|(c) Future plan of action ||To maintain improved quality of products through quality control. |
|(d) Expenditure on R&D ||NIL |
|2. Technology absorption adoption and : innovation: ||The Company does not envisage any technology absorption. |
(C) FOREIGN EXCHANGE EARNINGS & OUTGO:
| || |
|Total Foreign exchange earnings || |
` 59.95 Crore
|` 59.76 Crore |
|Total Foreign Exchange expenditure || |
` 17.53 Lakh
|` 5.69 Lakh |
| ||For and on behalf of the Board |
|Place : Ahmedabad. ||Rishab Chhajer || |
|Date : 20th July 2017 ||Joint Managing Director || |