Directors are pleased to present their Thirty Fourth Annual Report on the business andoperations of your Company along with the Audited Financial Statements for the financialyear ended on March 31 2019.
1. FINANCIAL RESULTS
The Companys financial performance for the year ended March 31 2019 issummarized below:
|Particulars ||For the year ended 31.03.2019 ||For the year ended 31.03.2018 |
| ||(Rs. in Lakhs) ||( Rs. in Lakhs) |
|Revenue from operations ||12290.68 ||11726.73 |
|Other Income ||770.87 ||824.49 |
|Total Revenue ||13061.55 ||12551.22 |
|Profit before Tax ||4975.34 ||4547.42 |
|Less: Tax Expenses || || |
|Current Tax ||1068.25 ||1320.04 |
|Deferred Tax ||43.96 ||(129.13) |
|Profit for the year ||3863.13 ||3356.51 |
|Dividend Paid ||1243.67 ||- |
|Corporate Dividend Tax Paid ||255.64 ||- |
|Earnings Per Share of Rs.5/- ||27.96 ||22.85 |
Your Directors do not propose to transfer any amount to the General Reserves.
3. PERFORMANCE AND AFFAIRS OF THE COMPANY
During the year under review the gross sales of the Company are 12290.68 lakhs.(Previous Year 11393.17 lakhs) registering a growth of 7.88%. The Company recorded profitafter tax for 3863.13 lakhs (Previous Year 3356.51 lakhs) registering a growth of 15.09%.
The performance of the Company has been discussed in the Management Discussion andAnalysis Report which is forming part of the Annual Report.
Your Directors are pleased to recommend a Dividend of 180% i.e. 9/- per equity shareout of Free reserves for the Financial Year ended March 31 2019 subject to necessaryapproval by the Shareholders at the ensuing Annual General Meeting of the Company to beheld on July 31 2019. The total dividend recommended(including dividend tax of 255.64lakhs) for the current year 2018-2019 is 1499.31 lakhs. Payment of Dividend will be madeto the members whose names appear in Register as on July 12 2019.
5. BUYBACK OF SHARES
The Board in its meeting held on May 28 2019 has approved Buyback of up to 900000fully paid Equity Shares of the Company of face value of 5/- each on a proportionatebasis through the Tender Offer route at a maximum price of 550/- per equity share for anaggregate amount not exceeding 495000000/- subject to the approval by members in theensuing Annual General Meeting.
6. CURRENT BUSINESS STATUS
The demand for our products has lowered in last couple of quarters due to reduction inproduction by the Automotive and other OEMs on account of low demand andhighinventories. However now with new electedgovernment in place in Delhi we expect thatthe business sentiment will improve substantially necessary corrections will be done inpolicieswhich will be more industry favourable and as a consequencethe demand will pickup.The performance and outlook of the Company has been discussed in the ManagementDiscussion and Analysis Report which is forming part of the Annual Report.
7. CHANGES IN NATURE OF BUSINESS AND REVISION IN THE BOARDS REPORT
There is no change in the nature of business of the Company during the year. There isno revision made in the Boards Report and whatever submitted herewith is the finalreport.
8. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
Your Company does not have any subsidiary associate and joint venture Company.
9. CORPORATE GOVERNANCE
Pursuant to Regulation 27(2) and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Corporate Governance Report and Certificate regardingcompliance of conditions of Corporate Governance form an integral part of this report andare set out as separate Annexure to this Report. In order to obviate duplication ofinformation some of the information required under the Boards Report has beencaptured in the Corporate Governance Report.
10. PUBLIC DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 and 76 ofthe Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 and amendedrules thereafter. The question of non-compliance of the relevant provisions of the lawrelating to acceptance of deposit does not arise.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Jayesh Gandhi (DIN 00041330) Director will retire by rotation and being eligibleand not being disqualified under section 164 of the Companies Act 2013 offers himselffor re-appointment.
Shri Dhiraj Shah Shri Kavas Warden and Shri Dharmen Shah were re-appointed asIndependent Directors for a second term of 5 years at the Board Meeting held on May 282018 which was approved by the Shareholders in the Annual General Meeting held on August13 2018.
There is no change in the composition of the Board of Directors.
(ii) Key Managerial Personnel
During the year under review there was no change in the composition of the KeyManagerial Personnel.
(iii) Declaration by an Independent Director(s)
The Company has received all the necessary declaration from each independent directorunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) and Regulation 25 of the Listing Regulations.
(iv) Annual Evaluation of the Board
In compliance with the provisions of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligation and Disclosure Requirement) Regulations 2015 the Board has carriedout the annual performance evaluation of its own performance and that of its Directors. Astructured questionnaire was prepared after taking into consideration inputs received fromthe Directors and also as per the Guidance Notes issued by SEBI vide its Circular No:SEBI/HO/CFD/ CMD/CIR/P/2017/004 dated January 5th 2017 covering various aspects of theBoards functioning such as adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance.
12. BOARD AND COMMITTEES
During the year four (4) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report that forms part of this Annual Report. Theintervening gap between two meetings was less than the period prescribed under theCompanies 2013 Secretarial Standard-1 on Board Meetings and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The details of the Audit CommitteeStakeholder Relationship Nomination and Remuneration Committee and CSR Committee havebeen given in the Report on the Corporate Governance. Recommendations made by the AuditCommittee have been accepted by the Board without any modification
13. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by your Directors they make the following statements under section134(5) in terms of Section 134(3)(c)of the Companies Act 2013 and hereby confirm that:-
a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b. the directors have selected such accounting policies and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2019 and of the profit of theCompany for the year ended on that date;
c. the directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 proper systems financial controls to be followed by theCompany and that such internal ef. financial controls are adequate and were operating
f. the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
14. NOMINATION AND REMUNERATION COMMITTEE
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated positive attributes independence of a Director andpolicy thepolicysettingoutthecriteria for determiningqualifications relating toremuneration for Directors Key Managerial Personnel and other employees.The text of thepolicy is available on the website of the Company www.gandhitubes.com. There has been nochange in the policy during the year.
15. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES
The Company promotes ethical behaviour in all its business activities and has put inplace a mechanism for reporting illegal and unethical behaviour.
The Board of Directors of the Company have pursuant to the provisions of Section177(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board andits Powers) Rules 2014 framed "Vigil Mechanism Policy" for Directors andemployees of the Company to provide a mechanism which ensures adequate safeguards toemployees and Directors from any victimization on raising of concerns of any violations oflegal or regulatory requirements incorrect or misrepresentation of any financialstatements and reports etc.
16. RISK MANAGEMENT POLICY
The Company has designed Risk Management Policy and Guidelines to avoid eventssituations or circumstances which may lead to negative consequences on the Companysbusinesses and define a structured approach to manage uncertainty and to make use ofthese in their decision making pertaining to its business and corporate functions. Atpresent there is no identifiable risk which in the opinion of the Board may threaten theexistence of the Company.
17. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in "Annexure A" which forms part of this Report.
18. INTERNAL CONTROL SYSTEMS
The details in respect of internal control system and their adequacy are included inthe Management Discussion and Analysis which is a part of this report.
19. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has an adequate system for internal financial controls which commensuratewith its size and nature of business. Detailed procedures are in place to ensure that allassets are safeguarded and protected against losses all transactions authorized recordedand appropriately reported.
20. EXTRACT OF ANNUAL RETURN
As per the requirements of Section 92(3) read with S. 134(3)(a) of the Act and Rulesframed thereunder the extract of the annual return for FY 2018-19 in the prescribed FormNo. MGT-9 being a part of this report is annexed as Annexure B to this report and thesame has been hosted on the website of the Company and can be viewed atwww.gandhitubes.com.
21. CORPORATE SOCIAL RESPONSIBILITY
In accordance with the provisions of Section 135 of Companies Act 2013 and Companies(CSR Policy) Rules 2014 the Company has formulated and posted the CSR Policy on websiteof the company viz; www.gandhitubes.com.
The Annual Report on CSR in accordance with the Companies (Corporate SocialResponsibility Policy) Rules 2014 for the year 2018-2019 is annexed as AnnexureC to the Boards Report.
(i) STATUTORY AUDITOR
The Statutory Auditors of your Company namely M/s. Shashikant J. Shah & Co.Chartered Accountants were appointed for a period of five years at the annual generalmeeting held on July 12 2017. Also the members approval was obtained for waivingthe requirement of the ratification of the appointment of the Auditors for their remainingterm at the Annual General Meeting held on August 13 2018 in terms of the Companies(Amendment) Act 2017. Auditors have confirmed their eligibility and submitted theCertificate in writing that they are not disqualified to hold the office of the StatutoryAuditor.
The Audit Report does not contain any qualification reservation or adverse remark.There was no instance of fraud during the year under review which required the StatutoryAuditors to report to the Audit Committee and / or Board under Section 143(12) of Act andRules framed thereunder.
(ii) SECRETARIAL AUDITOR
Pursuant to provisions of section 204 of the Act and the rules framed there under theBoard has appointed M/S Dholakia & Associates LLP Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the financial year 2018-2019. TheSecretarial Audit Report in Form MR-3 is annexed herewith as" Annexure D".
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
(iii) COST AUDITOR
The Board has appointed Shri Dakshesh Zaveri as the Cost Auditor for the year 2019-2020pursuant to the provisions of Section 148(3) of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2015 at a remuneration of 50000/- (Rupees FiftyThousand only) which is subject to the ratification by members in the ensuing AnnualGeneral Meeting.
23. SECRETARIAL STANDARDS
It is hereby confirmed that the Company has complied with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of India.
24. GREEN INITIATIVES
Pursuant to Sections 101 and 136 of the Companies Act 2013 the Company has sent AnnualReport through electronic mode(email) to all the shareholders who have registered theiremail addresses with the Company or with the Depository to receive the Annual Reportthrough electronic mode and initiated steps to reduce consumption of paper. For memberswho have not registered their email addresses physical copies will be sent through apermitted mode.
25. HUMAN RESOURCES
Employees are considered to be team members being one of the most critical resources inthe business which maximize the effectiveness of the Organization. Human resources buildthe Enterprise and the sense of belonging would inculcate the spirit of dedication andloyalty amongst them towards strengthening the Companys Polices and Systems. TheCompany maintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.
26. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Company conducts operations in such a manner so as to ensure safety ofall concerned compliance environmental regulations and preservation of natural resources.There was no accident during the year.
27. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE FINANCIAL YEAR END OF THE COMPANY TO WHICHFINANCIAL RESULTS RELATES
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Companys financial position have occurred between the end of thefinancial year of the Company and date of this report.
28. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES
The Company has not taken any loan during the year. The details of GuaranteesInvestments and Securities as covered under the provisions of section 186 of the CompaniesAct 2013 are given in the notes No. 48 and 30 of the Financial Statements which formpart of the Annual Report.
29. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All transactions entered with Related Parties for the year under review were onarms length basis and in the ordinary course of business. Thus disclosure in formAOC-2 is not required as such Related Party Transactions are not material. However thedetails have been furnished in the Notes No. 35 to the financial statement.
All Related Party Transactions are placed before the Audit Committee as also to theBoard for approval at every quarterly meeting.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web-link of the same has been provided in theCorporate Governance Report.
30. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURESAS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014.
There were no employees except the Managing Director and Joint Managing Director of theCompany drawing remuneration of 1.02 crores or more per annum or 8.5 lakhs or more permonth during the year under review. Both the Managing Director and Joint Managing Directorare related to each other and they are promoters of the Company. Their appointment iscontractual as approved by the Board and members of the Company.
The information relating to ratio of the remuneration of each director to the medianemployees remuneration and such other prescribed details as required under Section197(12) of the Companies Act 2013 read with Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 for the year ended March 31 2019 is provided in aseparate Annexure E forming part of this Report.
Further the report and the accounts are being sent to the members excluding theaforesaid annexure. In terms of Section 136 of the Act the said annexure is open forinspection at the Registered Office of the Company 21 days before the Annual GeneralMeeting and up to the date of the Annual General Meeting during the business hours onworking days. Any shareholder interested in obtaining a copy of the same may write to theCompany Secretary.
31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION &REDRESSAL) ACT2013.
The Company has set up an Internal Complaints Committee (ICC) for providing a Redressalmechanism pertaining to Sexual harassment of women employees at workplace Mumbai. Therewas no complaint received during the year under review.
32. GENERAL DISCLOSURES
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. The Company has not issued any shares with differential rights and hence noinformation as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014.
2. The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014.
3. The Company has not issued any equity shares under Employees Stock Option Schemeduring the year under review and hence no information as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014.
4. During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014.
5. No orders have been passed by any Regulator or Court or Tribunal which can have animpact on the going concern status and the Companys operations in future.
Your Directors take this opportunity to place on record their sincere appreciation forthe excellent support provided by Bankers Government authorities all stakeholders andbusiness associates. The Board also express its sincere appreciation and support extendedby the Shareholders during the year under review and also acknowledges the dedicatedefforts put in by the employees at all levels.
| ||For and On behalf of the Board of Directors |
| ||Manhar G.Gandhi |
| ||Chairman & Managing Director |
|Place : Mumbai ||DIN: 00041190 |
|Date : May 28 2019 || |