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Your Directors are pleased to present the 27th Annual Report together with the Audited Financial Statements for the Financial Year ended on 31st March, 2018.
|(Rs. in lakhs)|
|Revenue from Operations||9876.29||8948.78|
|Profit Before Interest, Depreciation and Tax||1122.35||955.93|
|Less: Finance Charges||144.12||227.94|
|Profit Before Tax||674.67||473.39|
|Less: Current Tax||193.27||132.88|
|Less: Deferred Tax||(54.51)||28.47|
|Profit After Tax||535.91||312.04|
|Earnings Per Share (EPS)||8.24||6.24|
* The figures are regrouped, rearranged and recast, wherever considered necessary.
STATE OF COMPANYS AFFAIRS
Even though the economic conditions in FY 2017-18 were relatively subdued, your Company achieved an enhanced sales turnover of Rs. 9876.29 lakhs as against Rs. 8948.78 lakhs during the previous year and earned a Net Profit After Tax of Rs. 535.91 lakhs as against Rs. 312.04 lakhs during the previous year. Your Company has considerably improved its manufacturing and operational efficiency during the year under review and these management endeavours will continue during the coming year. There has been an improvement in the economic outlook for the pharmaceutical and agro-chemical industries, which are the key target customers of your Company. These factors have been reinforced by certain Government and the Reserve Bank of India initiatives to bring inflation under control, reduction of repo and reverse repo rate leading to moderate reduction of interest rates, bringing pharmaceutical sector under 100% Automatic FDI route and the implementation of Goods and Services Tax during the year. Your Company has a robust order book, which provides encouraging visibility of the revenues in the first few months of FY 2018-19. The Management continues to take active steps to reduce the operating costs and improve capacity utilisation. The Management is confident to achieve a much better performance in the current year with improved revenues and profits.
Your Directors are pleased to recommend a Dividend of Rs. 2.00 (@ 20%) per equity share of Rs. 10/- each, for the financial year 2017-18, subject to the approval of the Members in the ensuing Annual General Meeting. The Dividend, if approved by the Members, will result in cash outflow of Rs. 157.52 Lakhs, including dividend distribution tax of Rs. 27.52 Lakhs.
TRANSFER TO RESERVES
Your Company has transferred Rs. 1,00,00,000 to General Reserve during the year.
Your Companys paid-up Equity Share Capital as on 31st March, 2018 is Rs. 6.50 crore, comprising of 65,00,000 Equity Shares of Rs.10 each, fully paid up.
Your Company has not issued any shares with differential rights and hence no information as per the provisions of Section 43(a)(ii) of the Companies Act, 2013 ("Act") read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
Your Company has not issued any sweat equity shares during the financial year under review and hence no information as per the provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
Your Company has not issued any equity shares under Employees Stock Option Scheme during the financial year under review and hence no information as per the provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.
During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information has been furnished.
Your Company has not accepted/ renewed any deposits from the public or the Members, within the meaning of Section 73 of the Act read with Chapter V of the Act and the Companies (Acceptance of Deposits) Rules, 2014, during the financial year 2017-18.
The deposits, accepted in FY 2015-16 for a term of 3 years till 31st March, 2018 from the Members and the Directors of your Company, have been repaid either on the request of the deposit-holders before the expiry of the term or after the expiry of the term in accordance with the provisions of Section 73 of the Act read with Chapter V of the Act and the Companies (Acceptance of Deposits) Rules, 2014; and no amount of principal or interest on the said deposits was outstanding as of the Balance Sheet date.
Your Company enjoys a good reputation for its sound financial management and the ability to meet its financial obligations. ICRA, a reputed Rating Agency, has rated the banking facilities enjoyed by your Company from its Bankers as "BBB+" for the long term and fund-based limits and A3+ for the non-fund based limits.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES
The particulars of loans, guarantees, investments and securities provided during the financial year under review, covered under the provisions of Section 186 of the Act have been provided in the Financial Statements, which forms part of this Annual Report.Your Company has complied with the provisions of Sections 185 and 186 of the Act to the extent applicable, with respect to the loans and investments made.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 125 of the Act, dividend of Rs. 3.31 Lakhs pertaining to the financial year 2009-10, which remained unclaimed and unpaid for a period of seven years from the date of its transfer to the Unpaid Dividend Account, has been transferred to the Investor Education and Protection Fund established by the Central Government.
RELATED PARTY TRANSACTIONS
Your Company has implemented a policy related to Related Party Transactions as framed by the Audit Committee. The said Policy is available on the Companys website: www.glascoat.com under Investors Guide -Company Policies.
During the financial year under review, your Company has entered into related party transactions on an arms length basis in accordance with Section 188 of the Act and the Rules thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the same are provided in Form AOC-2 annexed hereto, which forms part of this Report.
Further, all such contracts/ arrangements/ transactions were placed before the Audit Committee and Board, for their approval. Prior omnibus approval of the Audit Committee/ Board is obtained on an annual basis, which is reviewed and updated on quarterly basis.
PARTICULARS RELATING TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as required under the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in the Annexure, which forms part of this Report.
PARTICULARS OF EMPLOYEES AND REMUNERATION
(A) The details of the ratio of the remuneration of each director to the median remuneration of the employees and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed hereto and form part of this Report.
(B) The details of the top 10 employees of the Company in terms of remuneration drawn as required under Section 134 of the Act and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed hereto and form part of this Report.
(C) None of the employees of the Company are drawing remuneration of Rs. 1,02,00,000/- or more per annum or Rs. 8,50,000/- or more per month or for any part of the year and hence the particulars required to be disclosed under Section 134 of the Act read with Rule 5(2) the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not required to be furnished.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return for the financial year 2017-18 in Form MGT-9 pursuant to the provisions of Section 92 of the Act read with Rule 2 of the Companies (Management and Administration) Rules, 2014 as required under Section 134 of the Act is annexed hereto and forms part of this Report.
Pursuant to the provisions of Regulation 34(3) read with Schedule V (C) of the Listing Regulations, the Report on Corporate Governance is annexed hereto and forms part of this Report. Your Company is committed to transparency in all its dealings and places high emphasis on business ethics. The requisite Compliance Certificate as required under Part E of Schedule V of the Listing Regulations, issued by M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122W), -Statutory Auditors, Mumbai, pertaining to the compliance of the conditions of Corporate Governance, is also annexed hereto.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34(3) read with Schedule V (B) of the Listing Regulations, the Report on Management Discussion and Analysis is annexed hereto and forms part of this Report.
Your Company recognizes the importance of managing risk in the business to sustain growth. The Board of Directors, along with the senior management of your Company, has developed and approved the Risk Management Policy framework and Guidelines, wherein all material risks faced by your Company are identified and assessed. The Risk Management Policy adopted by your Company lays down the systematic approach adopted by your Board to mitigate various risks viz. operational risk, financial risk, regulatory risk, reputational risk, etc. Your Company has entrusted the Audit Committee with the responsibility of implementing and monitoring of the Risk Management Policy on periodic basis.
INDIAN ACCOUNTING STANDARDS (IND AS) IFRS CONVERGED STANDARDS
Pursuant to the notification, issued by the Ministry of Corporate Affairs dated February 16, 2015 relating to the Companies (Indian Accounting Standard) Rules, 2015, your Company has adopted "IND AS" with effect from 1st April, 2017 with the comparatives for the periods commencing from 1st April, 2016. The implementation of IND AS is a major change process for which your Company had established a project team and had dedicated considerable resources.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) read with 134(5) of the Act, your Directors confirm that:
(a) the applicable accounting standards had been followed along with proper explanation relating to material departures, if any, in the preparation of the annual accounts;
(b) appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act 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) proper internal financial controls have been laid down and followed by the Company and that such internal financial controls are adequate and were operating effectively; and
(f) proper systems to ensure compliance with the provisions of all the applicable laws have been devised and that such systems were adequate and are working effectively.
DIRECTORS AND KEY MANAGERIAL PERSONS
The Directors of your Company are well experienced with expertise in their respective fields of manufacture, finance, strategic and operational management and administration. None of the Directors of your Company is disqualified under the provisions of Section 164(2)(a) and (b) of the Act. During the period under review, no Independent Director of your Company had any pecuniary relationship or transactions with the Company.
During the year under review, Mr. Jagrut Bhatt (DIN 00364725), Mr. Bharat Patel (DIN 00401741) and Mr. Dharmesh Patel (DIN 02615141) have resigned as Directors. The Board places its sincere appreciation for their services and expert inputs provided during their tenure as Directors of your Company.
Mr. Yatish Parekh (DIN 00168488), Mr. Mahesh Kabutarwala (DIN 00110317) and Mr. Sandeep Randery (DIN 07663581) have been appointed as Independent Directors at the 26th Annual General Meeting held on 28th August, 2017, for a tenure of 5 years starting from 29th May, 2017.
Mr. Nilesh Patel (DIN 00141873), Non-Executive Director, is retiring by rotation and being eligible, has offered himself for reappointment at the ensuing Annual General Meeting. Further details of Mr. Nilesh Patel, as required under Regulation 36 of the Listing Regulations/ SS-2, are disclosed in the Corporate Governance Report annexed hereto and forming part of this Report.
The day-to-day operations of your Company are managed by its Key Managerial Persons ("KMP") viz. the Managing Director, Executive Director (Technical), the Chief Financial Officer and your Company Secretary. As required under the provisions of Section 203 of the Act, Mr. Himanshu Patel (DIN 00202312), Managing Director, Mr. Aalap Patel (DIN 06858672), Executive Director (Technical), Ms. Dhwani Shah, Company Secretary and Mr. Bipin Thakkar, Chief Financial Officer, are the Key Managerial Personnel of your Company as on the date of this Report.
The Nomination and Remuneration Committee has formulated the Policies relating to the appointment and remuneration of the Directors of your Company, laying down criteria for determining qualification, positive attributes, independence of directors, etc. The Company Policies governing the appointment and remuneration of the Directors are annexed hereto and form part of this Report. The same are also available on the Companys website: www.glascoat.com under Investors Guide -Company Policies.
DECLARATIONS BY INDEPENDENT DIRECTORS
Pursuant to the provisions of Section 149(7) of the Act and Regulation 16(1)(b) of the Listing Regulations, your Company has received individual declarations from all the Independent Directors, confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and the Rules made thereunder.
There has been no change in the circumstances which may affect their status as Independent director during the financial year under review.
A Statement by the Managing Director regarding the said affirmation by the Independent Directors is annexed hereto and forms part of this Report.
The Board of Directors met four (4) times during the year under review in accordance with the provisions of the Act and the Rules made thereunder. The details thereof are given in the Corporate Governance Report annexed hereto and forming part of this Report.
PERFORMANCE EVALUATION OF THE DIRECTORS AND KMPs
During the financial year 2017-18, the Board of Directors of your Company has carried out an Annual Performance Evaluation of the Board/ Committees and all the individual Directors as per the Companys Policy for Performance Evaluation of Directors. Performance evaluation sheets were distributed before the Meeting dates. The outcome of the above exercise of performance evaluation of all the Directors collectively and individually and the Board/ Committees was announced in the respective Meetings.
(i) The Board, in its Meeting held on 10th February, 2018, has reviewed the evaluation task of the Board/ Committees collectively and the Independent Directors individually for the period from 1st January, 2017 to 31st December, 2017. In accordance with the provisions of the Section 149 of the Act read with Schedule IV, annual performance evaluation of the Independent Directors was carried out by the entire Board of Directors, excluding the Directors being evaluated. The performance of each Independent Director has been evaluated on various parameters like engagement, leadership, analysis, decision making, knowledge updates, communication, governance, etc. The Board was satisfied that every Independent Director was reputed, acting professionally and has brought his/ her rich experience to the deliberations of the Board.
(ii) The Independent Directors, in their separate Meeting held on 10th February, 2018, carried out the performance evaluation of all the non-Independent Directors, with special attention to the leadership criteria for the Managing Director and the Executive Director for the period from 1st January, 2017 to 31st December, 2017. Further, their performance was also evaluated by the Board of Directors. The various criteria considered for purpose of evaluation included leadership, engagement, transparency, analysis, decision-making, functional knowledge, governance, ethical behaviour, interest for stakeholders, etc. The Independent Directors and the Board were of the view that all the non-Independent Directors were capable and the results of the evaluation were satisfactory and adequate to meet your Companys requirements.
The Board also expressed its satisfaction over the process of evaluation.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility ("CSR") Policy of your Company as approved by the Board of Directors is hosted on the Companys website, www.glascoat.com under the Corporate Social Responsibility section. Your Company has formed a CSR Committee in accordance with the provisions of Section 135 of the Act, details of which are provided in the Corporate Governance Report annexed hereto and forming part of this Report.
The Annual Report on CSR activities as required under Sections 134 and 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, including a brief outline of the Companys CSR Policy, total amount to be spent under the CSR Policy for the financial year 2017-2018, amount unspent and the reason for the unspent amount, is annexed hereto and forms part of this Report.
The Board, pursuant to the provisions of Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers), 2014, has formulated and implemented a Whistle Blower Policy for Directors and employees incorporating the Vigil Mechanism with a view to provide a mechanism which ensures adequate safeguards from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, etc. The Policy covers malpractices and/ or events related to all issues that could have grave impact on the operations and performance of the business of your Company. The concerned matters are to be reported to the Compliance Officer and/ or the Chairperson of the Audit Committee. The Audit Committee monitors the Vigil Mechanism of your Company.
During the financial year 2017-18, no employee has been denied access to the Compliance Officer/ the Chairperson of the Audit Committee.
An extract of the Whistle Blower Policy incorporating the Vigil Mechanism and the contact details of the relevant Officers are available on the Companys website: www.glascoat.com under Investors Guide -Whistle Blower Mechanism.
PREVENTION OF SEXUAL HARASSMENT AT THE WORKPLACE
Your Company has framed a Policy against sexual harassment and a formal process for dealing with complaints of harassment or discrimination. The said Policy is in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. As per the provisions of Section 4 of the said Act, the Board of Directors has constituted the Internal Complaints Committee (ICC) at the Registered Office and Works of your Company to deal with the complaints received by your Company pertaining to gender discrimination and sexual harassment at workplace.
Further, as per the provisions of Sections 21 and 22 of the said Act, there are no complaints received or cases filed during the financial year 2017-18.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, affecting the financial position of your Company which have occurred during the period between the end of the financial year to which the financial statements relate and the date of this Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has strong integrated systems for internal controls commensurate with the size and nature of its business.
Investment decisions involving capital expenditure are subject to detailed appraisal and review by appropriate levels of authority.
Capital and revenue expenditure are monitored and controlled with reference to pre-approved budgets and forecasts.
Your Company has established effective internal control systems to ensure accurate, reliable and timely compilation of financial statements, to safeguard assets of your Company and to detect and mitigate irregularities and frauds. Your Companys management has established adequate internal control procedures over financial reporting.
In accordance with the requirements of Section 143(3)(i) of the Act, the Statutory Auditors have confirmed the adequacy and operating effectiveness of the internal financial control systems over financial reporting.
STATUTORY AUDITORS AND INDEPENDENT AUDITORS REPORT
M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122W) have been appointed as the Statutory Auditors of your Company for a tenure of 5 (Five) years from 28th August, 2017.
The Auditors report given by M/s. M. M. Nissim & Co, Statutory Auditors, on the Financial Statements of your Company, for the year ended March 31, 2018, forms part of the Annual Report. There is no qualification, reservation or adverse remark or any disclaimer in their Report.
In accordance with the Section 40 of the Companies (Amendment) Act, 2017 (corresponding to Section 139 of the Act), the requirement of ratification of the appointment of the Statutory Auditor in every Annual General Meeting of the Company during the tenure of appointment has been dispensed with. Hence, the matter has not been placed as an agenda item in the AGM Notice for the approval of the shareholders.
REPORTING OF FRAUDS
There have been no frauds reported under sub-section (12) of Section 143 of the Act, during the financial year under review, to the Audit Committee or the Board of Directors.
SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT
The Company has appointed M/s. D. G. Bhimani and Associates, Practising Company Secretaries (Membership No. FCS 8064) as the Secretarial Auditors for the financial year 2017-18 in accordance with Section 204 of the Act. The Report on Secretarial Audit for the financial year 2017-18, in Form MR-3, is annexed hereto and forms part of this Report. There is no qualification, reservation or adverse remark or any disclaimer in their Report.
In terms of Section 204 of the Act, on the recommendation of the Audit Committee, the Board has appointed M/s. D. G. Bhimani and Associates, Practicing Company Secretaries, as the Secretarial Auditors for the financial year 2018-19. The Company has received their consent for the said appointment.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
The Directors of your Company confirm that the applicable Secretarial Standards prescribed for the Board/ General meetings by the Institute of Company Secretaries of India and notified by the Central Government have been complied with during the financial year under review.
CNK & Associates LLP, Chartered Accountants (Firm Registration No. 101961W) have conducted the internal audit of your Company for the financial year 2017-18. Further, CNK & Associates LLP, Chartered Accountants have been appointed as the Internal Auditors for the financial year 2018-19 and the Company has received their consent for the appointment.
COST RECORDS AND AUDIT
Pursuant to Section 148 of the Act read with the Companies (Cost Record and Audit) Rules, 2014, your Company has duly maintained the cost records as prescribed. Presently, audit of the Cost Records is not prescribed or mandatory.
During the year under review, there was no change in nature of business of the Company.
During the year under review, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and your Companys operations in future.
Your Company does not have any subsidiaries, joint ventures or associate companies.
Your Directors and Management take this opportunity to thank your Companys customers, vendors, investors, business associates, bankers and other stakeholders for their continued support. Your Directors also take this opportunity to applaud the contributions made by all the employees to the operations of your Company for its continued growth and success.
|By the Order of the Board of|
|Swiss Glascoat Equipments Limited|
|Date : 19th May, 2018||Mr. Himanshu Patel|
|Place: Vitthal Udyognagar||Chairperson and Managing Director|