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GTN Industries Directors Report, GTN Industries Reports by Directors
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GTN Industries

BSE: 500170|NSE: GTNIND|ISIN: INE537A01013|SECTOR: Textiles - Spinning - Cotton Blended
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Directors Report Year End : Mar '16    Mar 15

To the Members,

The Directors are presenting the 54th Annual Report together with the Audited Statements of Account for the year ended 31st March 2016.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended 31st March, 2016

Year ended 31st March, 2015

INCOME

Net Sales/Income from operations*

28006

40869

Other Income

210

293

Variation in Stock

182

(1456)

Total

28398

39706

EXPENDITURE

a) Cost of Materials1

16913

27227

b) Staff Cost

2742

3126

c) Power & Fuel

3271

3792

d) Other expenditure

3071

3955

Total

25997

38100

OPERATING PROFIT

2401

1606

Interest

1832

2146

Net Profit/(Loss) before

Depreciation and Taxation

569

(540)

Depreciation

123

872

PROFIT/(LOSS) BEFORE TAX

446

(1412)

Exceptional Items

942

(99)

Provision for Deferred Tax

(97)

(57)

MAT Credit Entitlement

43

-

Tax in respect of earlier years

-

(2)

PROFIT/(LOSS) AFTER TAX

(442)

(1254)

* Sales includes Traded goods of Rs.566 lacs (Previous year Rs. 9056 lacs)

PERFORMANCE REVIEW

During the Financial Year under review, the Company has achieved turnover of Rs.28006 lacs against Rs. 40869 lacs in the corresponding previous year. The operating profit before interest, depreciation and tax were lower by Rs.147 lacs after absorbing effect of VRS amount of Rs.942 lacs and Net loss before Tax is lower by Rs. 81 7 lacs as compared to the corresponding previous year.

CORPORATE DEBT RESTRUCTURING

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; and

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 Regulation 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are attached as Annexure.

FIXED DEPOSITS

Company has not accepted Fixed Deposits from the public /shareholders during the year.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Company’s Articles of Association.

Shri M.R.Vikram, Independent Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.

Smt.Rajul Kothari, Independent Woman Director will retire by rotation at the ensuing Annual General Meeting and, being eligible, offer herself for re-appointment.

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 Regulation 27 of the SEBI Regulations.

PERFORMANCE EVALUATION

The Board undertook the imitative to conduct a formal evaluation of its own performance and that of its committees & individual Directors. The Nomination & Remuneration Committee led the evaluation process. The Independent Directors reviewed the performance of non-independent Directors, the Chairperson of the Company and the Board as a whole.

The Board would use the results of the evaluation process constructively to improve its effectiveness, optimize individual strength of Directors and deliver performance & overall growth for the Company.

POTENTIALLY SICK COMPANY UNDER THE PROVISIONS OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

Due to continuing market recession, uncertainty and lower realization affected profitability of the Company . In addition to this, VRS payment to the workers amounting to Rs.9.42 Crores caused further losses and affected the performance of the company. Consequent to this, your Company has been classified as a “potentially sick company” under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, as at the close of the financial year. The required steps have been initiated and your Directors are confident to overcome the same in the near future.

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 of the Company 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 Companies Act, 2013 and that they are not disqualified for reappointment.

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, 2016.

For the Financial Year 2016-17 Cost Auditor proposed remuneration of Rs.2.00 lacs is recommended to the Shareholders for approval.

iii) Secretarial Audit :

According to the provisions 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 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.

Further during the year 224 workers of Medak, Spinning and Doubling Units have opted for Voluntary Retirement Scheme (VRS) with a total outflow of Rs.9.42 crores

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 2 of Companies (Accounts) 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 the 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/Board 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 on Financial Statements.

OTHER MANAGEMENT POLICIES

The following policies are placed in company''s website.

1) Policy for determining materiality of events.

2) Policy on preservation of documents.

3) Policy on code of conduct for Board Members.

4) Nomination and Remuneration Policy.

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) and State Bank of Travancore, 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

Place: Hyderabad M K .PATODIA

Date : 24th May, 2016 Chairman & Managing Director

A. Conservation of Energy

The Company is making all round efforts for the conservation of energy. To reduce the energy cost, energy efficient equipments are being used and power being purchased from outside. Total energy consumption and energy consumption per unit of production as prescribed in form - A, is as under :

B. Technology Absorption

Efforts made in Technology Absorption as per Form B:

Indigenous technology alone is used and Research and Development are carried out by a separate Textile Research Association for Textile Units situated in Southern Region (SITRA).

Source : Dion Global Solutions Limited
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