Your Directors have pleasure in presenting their 19th Annual Report together with theAudited Accounts of the Company for the year ended March 31 2017:
1. Financial Results :
The Financial Performance of your company for the year ended March 31st 2017 issummarized below:-
| ||FY 2016-17 ||FY 2015-16 |
|Revenue from Operations ||491 ||1416 |
|Other Income ||77 ||308 |
|Total Revenue ||568 ||1724 |
|Profit / (Loss) before Finance cost and Depreciation/Amortizations ||(522) ||(919) |
|Less : Finance Cost ||442 ||488 |
|Less: Depreciation / Amortization ||325 ||370 |
|Net profit/(Loss) before Exceptional items and Tax ||(1289) ||(1777) |
|Exceptional Items || || |
|(Loss)/Profit on sale of Assets ||73 ||49 |
|Prior period (Expenses) / Income ||(101) ||(304) |
|Provision for Contingency Doubtful Receivables Loans and advances and other current & non-current assets and other liabilities ||(3408) ||(10082) |
|Net profit/(Loss) before tax ||(4725) ||(12114) |
|Tax Expense || || |
|i) Deferred Tax || || |
|Profit/(Loss) for the year ||(4725) ||(12114) |
2. Operational Review:
The revenue from operations for the year has been ' 491 Lakh as against ' 1416 Lakh inthe previous year. Revenue from operations continued to remain subdued in the currentfinancial year due to stiff competition in the market and recessionary trend. Needless tosay the non existence of working capital to run the factory operations also contributed tothe fall in revenues.
Your company had during the year 2015-2016 in compliance with the Ind- As requirementshad provided for an amount of ' 10082 Lacs of which yours director are glad to inform youthat an amount of ' 517.12 Lakhs have been realized from out of the said provisions duringthe period under review. Your management towards doubtful receivable and loans andadvances is hopeful for recovering further amount from the said provisions during thecurrent financial year as well.
The Net Loss for the year is '(4725) Lakh as compared to '(12114) Lakhs previous year.
The Company also operated at lower capacity utilization due to shortage of workingcapital which has also impacted the profitability of the Company for the year. Productioncost was also went up due to increase in power and other input cost. Your Company hastaken several remedial steps to meet the challenges viz. measures in saving cost at allfront of operations optimize use of available resources etc.
3. Management Discussion & Analysis
A. INDUSTRY AND COMPANY OVERVIEW Global Overview:-
The global flat glass industry is forecast to grow at a CAGR of 5.5% from 2016 to 2021.The major drivers of growth for this market are growth in the construction market risingautomotive production and sales rising per capita income and technological advancement.The global flat glass market for the construction industry to grow steadily at a CAGR ofabove 6% by 2021. One of the primary drivers for this market is the rise in the demand forflat glass from the infrastructure sector. Flat glass has become a major constructioncomponent for many building owners. Construction firms and owners are coming up withalternative ways of using glass both on the exterior and interior of buildings. Also thegrowing investment in the global residential sector is providing an impetus to theconstruction glass market. The global market for construction glass witnessed rapid growthin 2012 and is projected to grow at a CAGR of 7.08% during the review period to reach$115083.65 Million by 2020. The Asia-Pacific region dominated the market for constructionglass with a share of 62% in 2013; this market is driven by increase in demand forvalue-added products competition aggressive pricing and rising consumer spending. TheAsia-Pacific region is projected to become the fastest-growing market for constructionglass. The construction glass market has expanded with developments in the buildingconstruction industry. The demand for construction glass products is growing at asignificant pace and is projected to grow at an even higher rate in the near future. Withthe rising population and increased incomes of people the building construction industryis booming and consequently so is the construction glass market. The construction glassmarket can be classified into two main categories based on application: residential andnon-residential. Construction was the largest application of the flat glass market owingto increasing use of tempered laminated and insulating glass for safety and energysavings. The segment was valued at over USD 57.09 billion in 2014 and is expected to growat a CAGR of 7.2% from 2015 to 2022.
The Global Smart Glass market is accounted for $2.34 billion in 2015 and is expected toreach $8.59 billion by 2022 growing at a CAGR of 20.4% from 2015 to 2022. Factors such asdemand for eco-friendly or green buildings as well as demand from automotive sector andsurge for energy efficient products will drive the market growth. However high costimplementation of smart glass and lack of awareness will hinder market growth.
Indian Glass Industry:-
Glass manufacturing is one of the most demanding processes around combining very hightemperatures and top quality requirement in every stage. The glass industry has four majorsegments. The container glass segment produces glass packaging products such as bottlesand jars. The flat glass (or float glass) segment produces windows for residential andcommercial construction automobile windshields mirrors instrumentation gauges andfurniture such as tabletops and cabinet doors. The fibre glass segment is composed of twodistinct sub industries: building insulation (glass wool); and textile fibres used toreinforce plastics and other materials for the transportation marine and constructionindustries. The specialty glass segment produces handmade glass tableware and oven-wareflat panel display glass light bulbs television tubes fibre optics and scientific andmedical equipment. Much of this segment relies on high technology research to create newand profitable materials
India is at an early stage in terms of market maturity at present but glass demand isgrowing steadily. Aggressive and organized efforts on the part of manufacturers andprocessors are expected to achieve higher levels of awareness among glass specifies andusers. In the next five years the Indian architectural glass market will move to highermaturity levels. However policy and regulations including the lack of standards and glasscodes for India are a source of anxiety for manufacturers and processors alike. Theindustry also needs increased exposure. Followed the opening up of FDI for the real estatesector here appears to be more chance of foreign investors coming in and a greater demandfor international standards in construction. This and the ever-growing popularity ofglass as a material will ensure growth. Further constant technical innovations bymanufacturers are keeping customers constantly interested in glass and glass products.
Growing interest for glass from the beverage sector real-estate and the infrastructurehas given a boost to its market in India. The development in the Indian glass industry isled by container glass segment which represents larger part of the deals as far asvolume as indicated by a prominent Research report. Most of the deals regarding qualityis overwhelmed by float glass segment and further in the coming year's deals in floatglass segment of the Indian glass industry will increment on the sidelines of real-estatedevelopment in over retail private and office bequest. Alcohol and Beer Industry shapesright around 2/3 of the container glass segment in India took after by sustenance andpharmaceutical industry. Flat glass has made critical place in the glass business notsimply in India but rather on a worldwide level. Add up to size of Flat Glass industry inIndia is 0.12 million tons for every month. Indian Glass Industry comprises of designcar estimation included glass mirrors and furniture section which has piece of theoverall industry of 45% 15% 15% 10% and 15% separately. Per capita glass utilizationhas expanded essentially in India from 0.58 kg to 1.1 kg; in any case it is still muchlower when contrasted with other creating nations and much lower than China where itremains at around 15 kg.
Indian Glass Market is assessed to Increase at a CAGR of 15% throughout the Next ThreeYears. Fuelled by development in parts like real-estate infrastructure retail car andfood and refreshments. The glass utilization development is normal in construction(10-12%) automotive (20) consumer goods (15-20) and pharmaceuticals (15-18) sectors.Flat glass in India is significantly utilized for construction reason or by theautomobile part alongside railways. As far as value is concerned the constructiondivisions of the nation held a lion's share partake in offers of flat glass in the nation.The current infrastructural advancements in the real-estate part of the nation aresignificantly in charge of the greater part share of construction segment at end useranalysis. The research and developments in the flat glass industry have led to productionof highly specialized form of glass intended for production of different products andapplications. All such developments are leading to positive growth in the flat glassmarket of India.
The growth in the glass industry is characterized by the increase use of processed& reflective glass as the Indian customer has become more aware about the importanceof glass in effectively addressing the concerns of safety and energy efficiency.
B. HUMAN RESOURCES
Your company firmly believes that employees are the most valuable assets and keyplayers of business success and sustained growth. The Company continued to conduct variousemployee benefit recreational and team building programs to enhance employee skillsmotivation as also to foster team spirit. Company also conducted in-house trainingprograms to develop leadership as well as technical/functional capabilities in order tomeet future talent requirements. Industrial relations were cordial throughout the year.The number of employees as on March 31 2017 was 119 and the number of employees as onMarch 31 2016 was 122.
The morale of the employees at the factory and the corporate office remained highduring the year under review. The industrial relations were cordial and harmonious at themanufacturing unit of the Company at Silvassa and the management thoroughly acknowledgesthe support from the employees at all levels.
C. ADEQUACY OF INTERNAL CONTROL SYSTEMS
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the same were operating effectively throughout the year. Theinternal control systems operate through well documented Standard Operating Procedurespolicies and process guidelines. These are designed to ensure that transactions areconducted and authorized within defined authority limit commensurate with the level ofresponsibility for each functional area. The Company's accounting and reporting guidelinesensure that transactions are recorded and reported in conformity with the generallyaccepted accounting principles. The Company has an effective internal audit function.
D. INTERNAL FINANCIAL CONTROLS:
The Company has in place adequate internal financial controls with reference tofinancial statements
E. RISKS AND CONCERNS
Your Company evaluates potential risks and has evolved over the years a comprehensiverisk-management strategy. It takes into account changing market trends competitionscenario emerging customer preferences potential disruptions in supplies and regulatorychanges among others. All the risks and concerns as foreseen by the management areproperly documented in a Risk Management Framework which is reviewed by the Board fromtime to time.
4. Share Capital
As on 31st March 2017 the Company's issued and paid up capital stands '335500000/- divided into 33550000 fully paid up equity shares of ' 10/- each. Duringthe year under review your Company's Authorized Issued Subscribed and Paid up ShareCapital remained unchanged.
In view of the loss for the year and the accumulated losses of the previous year yourDirectors are unable to recommend any dividend for the year ended March 31 2017.
6. Directors and KMPs
Mrs. Leena Gadit had been associated with the Company as a Independent Director of thecompany. Mrs. Leena Gadit had expressed her desire to step down from the Board due to hisother professional commitments. The Board of Directors at their meeting held on May 302017 has accepted her request to step down from the Board of the Company. Consequent toher resignation She ceased to be a member of the Audit Committee StakeholderRelationship Committee and Nomination and Remuneration of the Company.
Your directors place on record their sincere appreciation for Mrs. Leena Gadit for hercontribution to the Company as a Director. Mrs. Leena Gadit has provided her invaluableguidance and expert advice to the Board members and management team in matters of businessdevelopment finance treasury and risk management which has helped your Company toachieve sustained growth and enhance its brand value.
The Board based on the recommendation of the Nomination and Remuneration Committeeappointed Ms. Pooja V. Sharma as an Additional Director (Independent) not liable to retireby rotation for a period of five years effective August 26 2017 subject to the approvalfrom shareholders. The Board recommend the same for members approval During the year Mr.A. Venkataramanan resigned as Chief Financial Officer of the Company and was relieved fromthe services of the company effective close of office hours on May 30 2017.
Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are - Mr. Amrut S. Gada Chairman & ManagingDirector Mr. Mitesh K Gada Executive Director and Mr. Ashwin S. Shetty - G.M.Compliance Company Secretary.
All the independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013.
7. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure A"
8. Corporate Governance
In terms of Regulation 34 of the Listing Regulations a Report on Corporate Governancealong with a Certificate from M/s. D. M. Zaveri & Co Practicing Company Secretarycertifying compliance of conditions of Corporate Governance enumerated in the ListingRegulations is presented in a separate section forming part of this Report.
9. Public Deposits
During the year under review your Company has not accepted any deposits frompublic/members in pursuance of section 73 of the Companies Act 2013 read with Companies[Acceptance of Deposits] Rules 2014. As at 31st March 2017 the Company has outstandingfixed deposit of ' 143816777/-(Including Accrued Interest)
In context to the Fixed Deposits the Company has been gradually making repayments ofFixed Deposits. However owing to the difficult business conditions leading to the strongcash flow mismatch there have been delays in the repayments to the fixed deposit holders.Your company had repaid fixed Deposits (Majorly Principal amount) of an amount of'14675735/-to 567 number of fixed deposit holders during the year under review.
The Company is well aware and acknowledges the anxiety of the investors and is takingall measures towards rationalizing this situation. Furthermore the Company is in processof approaching regulatory authorities to seek relaxation/extension in repayment of FixedDeposits to enable the Company to work out an acceptable repayment proposal.
10. Sexual Harassment of Woman at Work place (Prevention Prohibition and Redressal)Act 2013.
The Company promotes a healthy and congenial working environment irrespective ofgender caste creed or social class of the employees and value every individual andcommitted to protect the dignity and respect of every individual.
The Company has always endeavored for providing a better and safe environment free ofsexual harassment at all its work places.
During the year under review no cases of sexual harassment against women employees atany of its work place were filed under Section 22 of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
11. Board Training and Induction
At the time of appointment the Directors are provided with necessary documents/brochures reports and internal policies code of conduct for Board of Directors andSenior Management Personnel to enable them to familiarize with the Company's proceduresand practices at the time of appointment. The Directors are also explained in detail thecompliances required under the various Acts including the Companies Act 2013 and SEBIAct 1992 and other Regulations.
Each Director of the Company has complete access to any information relating to theCompany. Independent Directors have the freedom at all times to interact with theCompany's management. They are given all the documents required by them to enable them forbetter understanding of the Company its various operations. Further they meet withoutthe presence of the Company's Management Personnel to discuss matters pertaining to theCompany's affairs and put forth their combined views to the Chairman.
The above initiatives helps the Directors to understand the Company its business andthe regulatory framework in which the Company operates and equip them to effectivelydischarge their duties as Directors of the Company.
12. 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:
(i) That in preparation of the annual financial statements for the year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) That appropriate accounting policies have been selected & applied consistently& judgments and estimates made are reasonable & prudent so as to give a true &fair view of the state of affairs of the Company at the end of the financial year endedMarch 31 2017 & of the profit or Loss of the Company for the said year;
(iii) That proper & sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company & for preventing & detecting fraud &other irregularities;
(iv) That the annual accounts have been prepared on a going concern basis.
(v) The Company has an established internal financial control framework includinginternal controls over financial reporting operating controls and for the prevention& detection of frauds & errors. The framework is reviewed periodically byManagement and tested by the internal audit team appointed by the Management to conductthe internal audit. Based on the periodical testing the framework is strengthened fromtime to time to ensure the adequacy and effectiveness of internal financial controls.
(vi) That systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
M/s. Shah Parmar & Mehta Chartered Accountants Statutory Auditor of your companyhave been merged into M/s. Motilal & Associates Chartered Accountants having FRN106584W during the year under review. The auditors observations given in Auditors Reportare self explanatory.
Your Board of Directors recommends the ratification of appointment of M/s. Motilal& Associates Chartered Accountants as the Statutory Auditors for the financial year2017-2018 subject to approval of shareholders of the Company.
14. Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 The Boardhad appointed M/s. D. M. Zaveri & Co. Practicing Company Secretaries to conductSecretarial Audit for the financial year ended March 31 2017.The Secretarial Audit Reportis attached as 'Annexure B'.
1) As informed in the Secretarial Auditors Report the Company has not been able tofully comply with the order passed by the Company Law Board (CLB) granting extension oftime for repayment of matured fixed deposit along with interest in installments. Thecompany is in process of filing further application in National Company Law Tribunal(NCLT) for extension of time to repay the said deposits.
2) The company has corresponded vide letters to the Sales Tax authorities requestingrelease of the attachment of the said Banking account so as to enable the company todeposit the amount of '100063/- in Investors Educations & Protection Fund (IEPF). Assoon as the sales tax authorities accede to request of the company and release the saidattachment the company shall immediately do the needful in the matter.
3) The loans and advances were given by the company to the persons in which directorsare interested out of the surplus fund in the earlier years. No further loans and advanceshave been given during the year under review to the persons in whom directors areinterested. The said loans and advances have been given in the ordinary course of businessand shall be recovered in due course.
4) The company is in the process of filling the said E-forms during the Currentfinancial year.
15. Related Party Transactions:
All related party transactions during the year under review were on an arm's lengthbasis and were in the ordinary course of business and were not material as per the RelatedParty Transaction Policy of the Company.
16. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo.
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed as "Annexure C".
17. Particulars of Loans Guarantees and Investments:
Particulars of loans given investments made guarantees given and securities providedby the Company as on March 31 2017 are given in the notes forming part of the financialstatement.
18. Vigil Mechanism/Whistle Blower Policy:
The Company has adopted a Whistle Blower Policy to provide a formal vigil mechanism tothe Directors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairperson of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee. The policy is on the website of the Company.
19. Board Evaluation
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. Accordingly the Boardhas devised the following parameters for the performance evaluation of Directors andCommittees
* Board dynamics and relationships
* Information flows
* Decision making
* Relationship with stakeholders
* Company performance and strategy
* Tracking Board and committees' effectiveness
* Peer evaluation
Pursuant to the provisions of the Companies Act 2013 and under Regulation 25 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 IndependentDirectors at their meeting without the participation of the Non-Independent Directors andManagement considered/evaluated the Boards' performance performance of the Chairman andother NonIndependent Directors.
The Board subsequently evaluated its own performance the working of its Committees andthe Independent Directors (without participation of the Director being evaluated) based onthe above parameters.
Based on these criteria the performance of the Board various Board CommitteesChairman and Individual Directors (including
Independent Directors) was found to be satisfactory.
20. Remuneration Policy
The statement containing particulars of employees as required under 197(12) of theCompanies Act 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is not applicable to the Company as noemployees were in receipt of remuneration above the limits specified in Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The ratio ofthe remuneration of each Director to the median employee's remuneration and other detailsin terms of Section 197(12) of the Companies Act 2013 read along with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure 'D' and forms part of this Report.
21. Corporate Social Responsibility Policy
As per section 135 of the Companies Act 2013 the Company is not required to undertakeany CSR activities for the financial year 2016-17 and accordingly information required tobe provided under Section 134 (3) (o) of the Companies Act 2013 read with the Rule 9 ofthe Companies (Accounts) Rules 2014 in relation to disclosure about Corporate SocialResponsibility are currently not applicable to the Company.
22. Cautionary Statements
This Directors Report and the Management Discussion and Analysis Report may containcertain statements which are futuristic in nature. Such statements represent theintentions of the Management and the efforts being put in by them to realize certaingoals. The success in realizing these goals depends on various factors both internal andexternal. Therefore the investors are requested to make their own independentjudgments bytaking into account all relevant factors before taking any investment decision.
Your Directors acknowledge the dedicated service of the employees of the Company duringthe year. They would also like to place on record their appreciation for the continuedco-operation and support received by the Company during the year from bankers financialinstitutions business partners and other stakeholders.
For and on behalf of the Board of Directors
Amrut S. Gada
Chairman and Managing Director
Date: August 26 2017