DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present their 33rd Annual Report and the Audited Accounts of the year ended March 31, 2015 OPERATIONS : During the year under review, the turnover of the Company was slightly less to the tune of Rs. 3,105.56 lakhs compared to Rs. 3,218.90 lakhs in the previous financial year. There was a net loss of Rs. 226.06 lakhs, during the current financial year compared to a net profit of Rs. 83.08 lakhs during the previous financial year due to a steep decline in sale of glass lenses. Sale of plastic lenses has not picked up as expected, as there is severe competition from China. CURRENTYEAR: The Company's Unit I, manufactures glass lenses and Unit II, manufactures all types of plastic lenses both semifinished and finished. Unit II, presently manufactures 10,000 plastic lenses, which is sought to be increased to 20,000 pieces per day. In Unit II, there are problems in running of the machinery and there are also production difficulties, which are being looked into and resolved. DIVIDEND : Since the Company has posted a loss, your Directors regret their inability to recommend any dividend for the year 2014-15. ASSOCIATES AND SUBSIDIARIES : The Company has dis-invested its entire investment of 10,58,986 equity shares in GKB Vision Limited to Essilor India Private Limited and Essilor Manufacturing India Private Limited (Essilor Group) at a price of Rs. 216.32 (approx.) per equity share. The entire proceeds aggregating to Rs. 2,290.90 lakhs have been received on July 01, 2015. Essilor Group now holds 50.10% in GKB Vision Limited. Prime Lenses Private Limited has allotted by way of Preferential Allotment, 65,00,000 equity shares at a premium of 27.15 (approx.) to Essilor Group. Essilor Group now holds 50.60% in Prime Lenses Private Limited. The Company's Wholly Owned Subsidiary (WOS) in Sharjah, UAE, Free Trade Zone Establishment, has achieved a turnover of Dirhams 7.13 million for the year ended December 31, 2014, as compared to Dirhams 7.11 million during the previous year. The net profit is Dirhams 1.16 million as compared to Dirhams 0.96 million during the previous year and has declared a dividend which entails an outflow of Dirhams 0.37 million. GKB Ophthalmics Products FZE, a step down Subsidiary, has acquired Lensco - The Lens Company, USA from GKB Vision Limited, at a consideration of US$ 1.00 Dolllar . There is accumulated loss of US$ 1,24,751 which is expected to wiped out, by improved performance in next two years. The proposal for winding up GKB Ophthalmics GmbH, is pending for approval with Reserve Bank of India, Mumbai. A statement under Section 129(3) of the Companies Act, 2013 giving details of subsidiaries is attached in Form AOC-1. Audited Accounts in respect of subsidiaries is placed on website of the Company www.gkb.net The Company will make the said annual accounts of its subsidiaries available to the members upon a written request. The audited annual accounts of the Subsidiaries is available at the Registered Office of the Company for inspection. However, in accordance with Accounting Standards 21, issued by the Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its subsidiaries have been prepared and form part of this Annual Report. DELISTING : Information in accordance with Regulation 7(1)(d) of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulation, 2009. The equity shares of the Company have been delisted from the Madras Stock Exchange Limited, w.e.f. January 13, 2015. DIRECTORS AND KEY MANAGERIAL PERSONNEL : Mr. K. M. Gupta will retire by rotation, pursuant to Articles of Association of the Company being eligible offers himself for re-appointment. Pursuant to the provisions of the Listing Agreement and Schedule IV of the Companies Act, 2013, Mrs. Shashi K. Katreddi, has been appointed as Independent, Woman, Additional Director, w.e.f. March 31, 2015 and she holds office up to the date of this Annual General Meeting. It is proposed to appoint her for a period of five years from conclusion of this 33rd General Meeting of the Company till the conclusion of Thirty Eight Annual General Meeting. Mr. Anil Palekar, Mr. Sadashiv Shet, Mr. Joseph A. A. D'Costa and Mr. Christopher Hickman are Independent Directors of the Company. It is proposed to appoint all of them for a period of five year each, from conclusion of this 33rd General Meeting of the Company till the conclusion of Thirty Eight Annual General Meeting. Pursuant to provisions of Section 2 (51) and Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have designated the following existing officers of the Company as Whole-Time Key Managerial Personnel. Mr. K. G. Gupta, Managing Director and Mr. Noel da Silva, CFO & Company Secretary, are Whole-Time Key Managerial Personnel of the Company . PERFORMANCE EVALUATION : In terms of Section 178(2) of the Companies Act, 2013 and in terms of Clause 49 of the Listing Agreement, the Board of Directors carried out the evaluation of every Director's performance, including the Chairman of the Board. The performance evaluation of Independent Directors was done by the entire Board (excluding the Directors' being evaluated) and the performance evaluation of the Chairman was done by Independent Directors at a separate meeting, taking into account the views of Non-Executive Directors. The parameters considered were promoting objectives of the Company for the benefit of its members as a whole and in the best interest of the Company, its employees, the community and for the protection of the environment, fulfilling the key responsibilities by exercising reasonable care, skill, diligence and independent judgement, level of engagement/contribution in decision making, attendance, quality time spend for Board Meetings and leadership and commitments of Directors. DIRECTORS' RESPONSIBILITY STATEMENT : Pursuant to provision of Section 134 (5) of the Companies Act, 2013, the Directors hereby state and confirm : a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure; b) that they selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the Profit and Loss of the Company for that period; c) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities ; d) that they have prepared the annual accounts on a going concern basis; e) that they 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) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. AUDITORS : The term of M/s. Sharp & Tannan, Chartered Accountants, Mumbai, (Firm Registration No. 109982W) as Statutory Auditors, expires at the conclusion of this Annual General Meeting and are eligible for re-appointment. The Auditors have given a certificate that the re-appointment, if made, will be within the prescribed limits specified under Section 139 (1) of the Companies Act, 2013. They also have given a certificate that they fulfill all the criteria laid down under Section 141 of the Companies Act, 2013. AUDITORS' REPORT: In respect of the observations made by the Auditors in their Report, the Board's response thereon is as follows: i) With regard to paragraph (vii) (a) of the Annexure referred to in paragraph 1 of the Auditors' Report, all undisputed statutory dues have since been paid by the Company. ii) With regard to paragraph (ix), the Company has since re-paid the entire term loan with Bank. iii) Paragraph (x) of the said Annexure is self explanatory. INTERNAL FINANCIAL CONTROL : As per Section 134 (5) (e) of the Companies Act, 2013 and read with Rule 8 (viii) of Companies (Accounts) Rules, 2014, the Board has laid the Internal Financial Control to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively. RISK MANAGEMENT POLICY : The Company has reconstituted the Risk Management Committee which has formulated Risk Management Policy for the Company. The policy is reviewed by the members in consultation with the Senior Management of the Company from time to time. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 : Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes Nos 3, 6, 8, 11 and 16 to the Financial Statements. RELATED PARTY TRANSACTIONS : Note 32 to the Financial Statements sets out the nature of transactions with the related parties. All such transactions are carried out at arm's length. Disclosures of such transactions are made to the Audit Committee. As required Under Clause 49 of the Listing Agreement, the Company has formulated a policy on dealing with Related Party Transactions. The same has been uploaded on the website of the Company at www.gkb.net and the web link thereto (<http://gkb.net/en/wp->content/uploads/Accounts/Related-Party-Transactions-Policy.pdf). Information pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8 (2) of Companies (Accounts) Rules, 2014 in Form AOC-2 is annexed herewith as Annexure - I. EXTRACT OF ANNUAL RETURN : Extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - II. CORPORATE GOVERNANCE : A report on Corporate Governance is enclosed as part of Annual Report along with a Certificate from a Practising Company Secretary, on its compliance . SECRETARIAL AUDIT: As per provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Practising Company Secretary is annexed herewith as Annexure- III. The Secretarial Audit Report is self explanatory and requires no comments. CORPORATE SOCIAL RESPONSIBILITY : Provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, regarding Corporate Social Responsibility are not applicable to the Company. INSURANCE : The Company has taken adequate insurance covers for its properties and insurable interest. FIXED DEPOSIT : The Company has not accepted any deposits from the public during the year. No amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet. PERSONNEL : The relations between the employees and the management, during the year, have been cordial. PARTICULARS OF EMPLOYEES : Section 197 of the Companies Act, 2013 read with Rule 5 of Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014, particulars of the employees is not applicable to the Company. FINANCE : The Company has not availed any additional loans from financial institutions during the financial year ended March 31, 2015. The term loans with Bank have been fully re-paid. CREDIT RATING : CRISIL has reaffirmed " CRISIL D " ratings for long term as well as Short-Term Bank facilities. DISCLOSURE UNDER THE SEXUAL HARRASEMENT OF WOMEN AT WORKPLACE (Prevention, Prohibition and Redressal) Act, 2013 : The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review no complaints were received. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : Particulars required to be disclosed under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed herewith as Annexure - IV and forms an integral part of this report. AKNOWLEDGEMENT : Your Directors wish to acknowledge and are grateful for the excellent support received from all levels, clients, suppliers, regulatory authorities, Banks and all other stakeholders. Your Directors recognize and appreciate the hard work and efforts put in by all the employees of the Company and their contribution to the progress of the Company in a very challenging environment. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS K. G. GUPTA CHAIRMAN & MANAGING DIRECTOR Place : Mapusa - Goa. Date : August 12, 2015 |