DIRECTORS' REPORT TO THE MEMBERS, Your Directors are presenting the 53rd Annual Report together with the Audited Statements of Account for the year ended 31st March 2015. DIVIDEND In view of the Net loss incurred by the Company during the year, your Directors have not recommended any Dividend for the year. PERFORMANCE REVIEW During the Financial Year under review, the Company has achieved turnover of Rs.40869 lacs against Rs. 56178 lacs in the corresponding previous year. The operating and net profit before depreciation and tax were lower by Rs.1871 lacs and Rs 1614 lacs respectively, as compared to the corresponding previous year due to lower sales realisation and increase in costs. CORPORATE DEBT RESTRUCTURING The company had approached Corporate Debt Restructuring Cell during 2008-09. The Company has complied with all the terms stipulated by the CDR. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 134 of the Companies Act, 2013, your Directors confirm that :- a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and there are no material departures. b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your company at the end of the financial year and of the Loss of the Company for that year. c) they have taken proper and sufficient care, for the maintenance of the adequate accounting records in accordance with the provisions of the Companies Act, 1956 and The Companies Act , 2013 for safeguarding the assets of your Company and for preventing and detecting 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 the Company and that such internal financial controls are adequate and were operating effectively. f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE GOVERNANCE Your Directors affirm their commitments to the Corporate Governance Standards prescribed by the Securities and Exchange Board of India (SEBI). A report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached. HIVE OFF YARN PROCESSING & KNITTING UNITS As approved by the Shareholders , Lenders, Statutory Authorities and CDR-EG , the envisaged scheme of Hive Off Yarn Processing and Knitting units was implemented effective from 04/09/2014 . FIXED DEPOSITS As per the new provisions of the Companies Act, 2013, Company is not accepting/renewing Fixed Deposits from the public / shareholders and outstanding deposits repaid before 31st March, 2015. Due to above there are no Deposits (including unclaimed) outstanding at the end of the financial year. DIRECTORS In accordance with the provisions of the Companies Act, 2013 and the Company's Articles of Association: Shri B.L.Singhal Independent Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment. Shri C.George Joseph Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for reappointment. All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section149(6) of The Companies Act, 2013 and Clause 49 of the Listing Agreement. AUDITORS i) Statutory Auditors M/s. Lodha & Company, Chartered Accountants, Mumbai, Auditors of the company hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letters from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the New Companies Act, 2013 and that they are not disqualified for re-appointment. The Notes on Financial Statements referred to in the Auditor's Report are self explanatory and do not call for any further comments. ii) Cost Auditors M/s. S T R Associates, Cost Accountants were appointed by the Board of Directors as Cost Auditors of your Company for the year ended 31st March, 2015. However the Cost Audit is not applicable for the year 2014-15. For the Financial Year 2015-16 Cost Auditor proposed remuneration of Rs.2.00 lacs is recommended to the Shareholders for approval. iii) Secretarial Audit According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Company Secretary in Practice is enclosed as a part of this report Annexure-II PERSONNEL & INDUSTRIAL RELATIONS During the year, the Industrial relations were cordial and satisfactory at all units of the Company. There were no employees whose particulars are to be given in terms of Section 134 the Companies Act, 2013 read with the Companies (Particulars of Employees) Regulations. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information required under Section 134 (3) (iii) of the Companies Act, 2013 read with Rule 2 of Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 2014, 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, 2013, a Vigil Mechanism Policy for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.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 , company established Related Party Transaction Policy. Related party transactions that were entered during the financial year were at an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and 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 Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules there under and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at www.gtnindustries.com under 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 - IV herewith. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RISK MANAGEMENT POLICY The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis. ACKNOWLEDGEMENT Your Directors place on record their sincere thanks to CDR- EG, Central Bank of India, State Bank of India, IDBI Bank Ltd., Export-Import Bank of India, (Exim Bank) State Bank of Travancore and Kotak Mahindra Bank Ltd., (Previously ING Vysya Bank Ltd.) the concerned Departments of the State and Central Government, Employees and Shareholders of the Company for their valuable assistance, support and co-operation to the Company. For and on behalf of the Board (M.K. PATODIA ) Chairman & Managing Director Date : 28th May,2015 Place: Hyderabad |