DIRECTORS' REPORT To The Members of GUJARAT POLY-AVX ELECTRONICS LIMITED Your Directors' present the Twenty Seventh Annual Report and Statement of Accounts for the year ended 31st March, 2016. 1. STATE OF COMPANY'S AFFAIRS: During the year ended 31st March, 2016 the Company has earned a profit of Rs.39.34 Lacs (Previous year loss of Rs.17.49 Lacs). The sales during the year was Rs.1,152.93 Lacs as compared to previous year of Rs.1,115.42 Lacs. Company manufacturers as well as outsources ceramic capacitors & marketing the same. In view of the accumulated loss, your Directors have not been able to recommend any Dividend for the year 2015-2016. 2. AUDIT COMMITTEE: The Audit Committee during the year consisted of 4 members. The details of the committee is given under Corporate Governance Report 3. VIGIL MECHANISM/WHISTLE BLOWER POLICY: The Board has establish a vigil mechanism for directors and employees to report genuine concerns to be disclosed, the details of which is placed on the website of the company. The Board has also formulated the whistle blower policy, same has been uploaded on the website of the company. <http://www.gpelindia.com/gpelindia/Download/Whistle%20Blower%20Policy> 14.pdf. There were no reporting made by any employee for violations of applicable laws and regulations and the Code of Conduct for the F.Y. 2015-16. 4. NOMINATION AND REMUNERATION COMMITTEE: The Board has re-constituted its committee which comprises of 4 members. More details on the committee are given in Corporate Governance Report. 5. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm that: a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;. b. Appropriate accounting principles have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended 31st March, 2016; c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. The annual accounts have been prepared on a going concern basis; e. The directors have laid down internal financial controls to be followed by the company; f. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws; 6. TAXATION: The Company's Income Tax assessments have been completed up to the year ended 31st March, 2013. 7. DEPOSITS: Company has not received any deposits from Public during the year. 8. INDUSTRIAL RELATIONS: Industrial Relations with the employees of the Company were cordial during the year under report. 9. CONSERVATION OF ENERGY: Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo etc. is given in Annexure I forming part of this report. 10. DIRECTORS: Mr. T. R. Kilachand, Director retires from Office by rotation, but being eligible, offers himself for re-appointment. Mr. A. H. Mehta, Managing Director retires from Office by rotation, but being eligible, offers himself for re-appointment. 11. NUMBER OF BOARD MEETINGS HELD DURING THE YEAR: During the year 2015-16, six Board Meetings were held on the following dates: (a) 27th May, 2015 (b) 11th August, 2015 (c) 2nd November, 2015 (d) 1st February, 2016 (e) 29th February, 2016 and (f) 28th March, 2016 12. DECLARATION ABOUT INDEPENDENT DIRECTORS UNDER SUB-SECTION 6 OF SECTION 149: The Company has received the declaration from each Independent Directors that they meet the criteria of independence laid down under section 149(6) of the Companies Act, 2013, under regulation 16(b) of SEBI (LODR) Regulations, 2015. 13. FORMAL ANNUAL EVALUATION: As required under the act, evaluation of every Director's performance was carried out. An evaluation sheet was given to each director wherein certain criteria was set out for which ratings are to be given. 14. COMPANY'S POLICY ON DIRECTORS APPOINTMENT, REMUNERATION ETC.: The Board on recommendation of Nomination and Remuneration Committee, has framed a policy for appointment and Evaluation of Board and remuneration for the Directors, Key Managerial Personnel and other employees. The policy is available on the website of the Company i.e. <http://www.gpelindia.com/gpelindia/Download/Criteria%20For%20> Appointment%20Evaluation%20of%20Board%20of%20Directors,%20KMP%20and%20Senior%20Management%20 Personnel 14.pdf 15. RELATED PARTY TRANSACTIONS: All Related Party Transactions (RPT) entered into by the Company during the year under review were at arm's length and in ordinary course of business. All RPT are placed before Audit Committee for its approval. The Company has taken loan of Rs.446 lacs from Polychem Limited at the rate of interest of 13% p.a. which is now revised to 12% w.e.f. 1st November, 2015. There are no contracts or arrangements under sub-section (1) of section 188. Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014: 1. Details of contracts or arrangements or transactions not at arm's length basis: NIL. 2. Details of material contracts or arrangement or transactions at arm's length basis: NIL. The Board on recommendation of 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 Listing Agreement and SEBI (LODR) Regulations, 2015. The policy is uploaded and can be viewed on the Company's website <http://www>. gpelindia.com/gpelindia/Download/Related%20Party%20Transation%20Policy 14.pdf 16. OTHER DISCLOSURES AS PER SECTION 134 OF THE COMPANIES ACT, 2013: (a) There are no qualifications, reservations or adverse remark or disclaimer by the Statutory Auditor, in their report. (b) There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company, to which the financial statements relate and the date of the report. (c) Extract of the Annual Report is provided in sub-section 3 of section 92, which is given in Annexure II forming part of this report. 17. DISCLOSURE UNDER SExUAL HARASSMENT OF WOMEN AT WORKPLACE (PREvENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The policy is uploaded and can be viewed on the Company's website <http://www.gpelindia.com/gpelindia/Download/Anti-Sexual%20Harassement%20Policy.pdf> The Company has also formed an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. The Company has not received any complaints on sexual harassment during the year. 18. MANAGERIAL REMUNERATION: i. The ratio of remuneration of Mr. A. H. Mehta, Managing Director with the median remuneration of the employees of the company is 8.45:1. ii. Increase in remuneration of Mr. A. H. Mehta, Managing Director is 15.00 % and in Mr. H. H. Jani, Chief Financial officer is 13.00% iii. There is an increase of 3.26 % in the median remuneration of employees in the financial year. iv. There are 39 permanent employees in the company. v. There is an increase of 3.36 % in Company's Performance for the year considering the revenue from the operations and the average increase in the remuneration of the Company is 13.96 % for the year. The increase in the remuneration was on account of the annual increment to the employee. vi. During the financial year 2015-16, remuneration to Key Managerial Personnel is Rs. 38,23,022/- as against the Company's performance is Rs. 11,52,93,499 /- remuneration to performance ratio comes to 3.32 % vii. The price earning ratio for the year is 0.46 where as in previous year due to loss there is no price earning ratio. There is an increase in Market Capitalisation of the Company, Market capitalisation for current year is Rs. 7,84,03,500/- and for Previous year it was Rs.6,49,80,000/-. viii. Average increase in the salaries of employees other than the managerial personnel was 12.58%. x. The key parameters for the variable component of remuneration availed by the directors are considered by the Board of directors based on the recommendation of Nomination and Remuneration committee as per Remuneration Policy for Directors, Key Managerial Personnel and other Employees. xi. The ratio of the remuneration of the highest paid director to that of the employee who is not a director but receive remuneration in excess of the highest paid director during the year 0.83:1. xii. It is hereby affirmed that the remunerations paid is as per the remuneration policy of the company. • Average increase in remuneration in point no. (v) relates to all the employees including managerial remuneration. Whereas increase in remuneration in point no. (viii) relates to the employees excluding managerial remuneration. 19. CORPORATE GOVERNANCE: Pursuant to Regulation 34(3), Schedule V of SEBI (LODR) Regulations, 2015 and Clause 49 of the Listing Agreement a separate report on Corporate Governance and a certificate from the Auditors of the Company are annexed to the Directors' Report. 20. AUDITORS: At the Annual General Meeting held on 12th August, 2015, M/s. Mahendra N. Shah, Chartered Accountants, Ahmedabad were appointed as Statutory Auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in calander year 2016. We propose to to re-appoint them as statutory auditors for the further period of four years, which shall be ratified on an annual basis. Post the conclusion of the extended them, they would cease to hold office as per the provisions of the companies act, 2013. In this regard, the company has received an intimation from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013 and the rules framed thereunder for reappointment as Auditors of the Company. 21. SECRETARIAL AUDITOR: Complying with the provisions of Section 204 of the Companies Act, 2013 the Audit Committee had recommended and the Board of Directors had appointed Mr. Tushar Shridharani, Practicing Company Secretary, Mumbai, (Membership No. 2690 & C.P. No. 2190), being eligible and having sought re-appointment, as Secretarial Auditor of the company to carry out the Secretarial Audit of the Company for the year ending March 2017. Secretarial Auditor has drawn attention to the fact that AVX Corporation, USA, one of the Promoters of the Company, is not holding 17,49,998 Equity shares each of Rs.10/- fully paid up in dematerialisation form. Company has taken up the matter with AVX Corporation. The Secretarial Audit Report for F.Y. 2015-16 is enclosed and marked as Annexure III. 22. REGISTRAR AND TRANSFER AGENT: In pursuance of SEBI Ex Parte - Ad - Interim Order No. WTM/RKS/MIRSD2/41/2016 dated 22nd March, 2016, the Company has appointed M/s. Link Intime India Pvt. Ltd. in place of M/s. Sharepro Services (I) Pvt. Ltd., with effect from 23rd May, 2016. 23. ACKNOWLEDGEMENT: The Directors extend their sincere thanks to the State and Central Government Authorities and Members for their co-operation and continued support during the difficult times being experienced by the Company. Sincere thanks are also due to the management team and the staff for their valuable contribution despite adverse circumstances being faced by the Company. By Order of the Board of Directors T. R. KILACHAND Chairman Corporate Identification Number (CIN): L21308GJ1989PLC012743 Registered Office: Plot No. B-17/18, Gandhinagar Electronic Estate, Gandhinagar 382 024 Gujarat. Dated: 16th May, 2016. |