DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the Forty Sixth Annual Report of your Company together with the Audited Financial Statements for the financial year ended 31st March, 2015 DIVIDEND In view of the losses during the financial year 2014-15, your Directors do not recommend any dividend for the financial year 2014-15. TRANSFER TO RESERVES The Company is not statutorily required to transfer any amount to the General Reserve as no Dividend has been recommended for the financial year 2014-15. SHARE CAPITAL The Paid up Share Capital as on 31st March, 2015 was Rs. 2282.44 Lacs. During the year under review, your company has allotted 83,20,000 shares to promoter and promoters group on preferential basis at Rs. 14.75 each including premium of Rs. 4.75 on 29th May, 2014 in terms of CDR Scheme. SUBSIDIARY COMPANY/JOINT VENTURE COMPANY/ASSOCIATE COMPANY The Company does not have any Subsidiary Company/Joint Venture Company/Associate Company in terms of provisions 134(3) of the Companies Act, 2013 read with Rule 8(5)(iv) of Companies (Accounts) Rules, 2014 and hence no disclosure is required. PUBLIC DEPOSIT During the year, your Company has not accepted/ received any deposit pursuant to section 73 of Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. COMPANY'S PERFORMANCE CAST ROLL DIVISION Production during the year under review decreased to 8573 MT (Metric Ton) as against 9824 MT during the year 2013-14. Cast Roll Sales decreased to 8396 MT as against 10030 MT during the year 2013-14.Consequently the total revenue from the Cast Roll Division decreased to Rs. 10695.91 Lacs as compared to Rs.13,156.87 Lacs in the previous year. FORGE ROLL DIVISION Production during the year under review increased to 955 MT as against 855 MT during the previous year. Forge Roll sales increased to 936 MT as against 850 MT in the year 2013-14.Consequently, the total revenue from the Forged roll division was Rs. 1822.86 Lacs compared to Rs.1,785.03 Lacs in the previous year which reflects a marginal increase . EXPORT During the year under review, the Company exported 3120 MT of Cast Rolls as compared to 2279 MT during the previous year. Your Company is exploring new markets for Cast Rolls in Turkey, UAE, Qatar, Nigeria, Iran, Egypt, Bangladesh, Oman, AHMSA (Mexico) while strengthening its presence in the existing markets. CORPORATE DEBT RESTRUCTURING Your Company continues to be under CDR Scheme as reported in the previous year and is making repayments as laid down in the terms and conditions of the Scheme. SCHEME OF AMALGAMATION As reported last year, your Directors have approved the Scheme of Amalgamation of the Company with Geetapuram Port Services Limited ("GPSL or the Transferor Company No.1") and its wholly owned subsidiary North East Natural Resources Private Limited ("NENRPL or the Transferor Company No.2"). Pursuant to Clause 24(f) of Listing Agreement, BSE Limited and The Calcutta Stock Exchange Limited has given their consent vide their Observation letter dated 2nd December, 2014 and 3rd December, 2014 respectively. Pursuant to an Order of the Hon'ble High Court of Judicature at Calcutta, the meetings of the Equity Shareholders and 6% Cumulative Optionally Convertible Redeemable Preference Shareholder of the Company were held on Saturday, the 28th day of March, 2015 for the purpose of seeking approval of the Shareholders of the Company for the said Scheme of Amalgamation. Thereafter, the Scheme of Amalgamation was approved by requisite majority. Further, the Company has filed the confirmation Petition before the Hon'ble High of Judicature at Calcutta and the same is pending for approval at present. The amalgamation, if approved will be advantageous and beneficial to all stakeholders of your Company. DIRECTORS AND KEY MANAGERIAL PERSONNEL DIRECTORS Pursuant to the provisions of Section 149 of Companies Act, 2013 which came with effect from 1st April, 2014, Mr. Mahesh Trivedi, Prof. Manoj Kumar Mitra, Dr. Shekhar Chaudhuri and Prof. Binay Bhushan Chakrabarti were appointed as NonExecutive Director (Independent) at the 45th Annual General Meeting of the Company held on 10th September, 2015.The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Companies Act, 2013.They have submitted a declaration that each of them meets the criteria of Independence as provided in Section 149(6) of the Companies Act, 2013. During the year under review, Mr.Vinod Kothari and Prof. Binay Bhushan Chakrabarti, Non-Executive Independent Directors resigned from the office of Director with effect from 21st April, 2014 and 7th November, 2014 respectively. The Board of Directors placed on record their appreciation of the valuable contribution during their association with the Company. During the year under review, Dr. Buddhadeb Duari was appointed as an Additional Director (Independent) of the company on 31st March, 2015 and holds office upto the date of ensuing Annual General Meeting of the Company. The Company has received Notice along with the requisite deposit under section 160 of the Companies Act, 2013, proposing the candidature of Dr. Buddhadeb Duari as an Non-Executive (Independent) Director of the Company. Your director recommend the appointment of Dr.Buddhadeb Duari as Non-Executive (Independent) Director of the Company. The details of the appointment are set out in the notice convening the forty- sixth Annual General Meeting of the Company. KEY MANAGERIAL PERSONNEL Your Directors at their meeting held on 29th May, 2014 noted and ratified the appointment of Mr. Susanta Ghosh, Managing Director & CEO, Mr. Sandip Gupta, Chief Financial Officer and Ms. Shabnum Zaman, Company Secretary of the Company as the Key Managerial Personnel of your Company pursuant to the provisions of Section 2(51) and Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. During the year under review, Ms. Shabnum Zaman, resigned from the office of Company Secretary and Key Managerial Personnel of the Company with effect from the closing hours of 8th December, 2014.The Board of Directors placed on record their appreciation for the Services rendered by her. Further, during the said year your Directors at their meeting held on 12th February, 2015 has appointed Mr. Alok Kumar Samant, as Company Secretary and Key Managerial Personnel of the Company with immediate effect. The details of remuneration paid to the Key Managerial Personnel appointed by your Company in accordance with the provision of Section 203 of Companies Act, 2013 are set out in this Report. RETIREMENT BY ROTATION In accordance with the provisions of Section 152 of the Companies Act, 2013 and rules made there under and in terms of the Article of Association of the Company, Mr. Anil Sureka (DIN: 00058228), Non-Executive Director of the Company, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment as Non-Executive Director of your Company. Your Board of Directors has recommended his re-appointment. The details of the re-appointment are set out in the notice convening the 46th Annual General Meeting of your Company. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Revised Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance and that of its Committees and individual Directors. A structured questionnaire was prepared after taking into consideration of inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. To determine the criteria of evaluation of the performance of the Independent Directors as required under the Revised Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on the parameters such as level of engagement and contribution, independence of judgement. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction over the evaluation process and results thereof. MEETING OF THE BOARD AND AUDIT COMMITTEE The details of the number of Board and Audit Committee Meetings of the Company are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed by the Companies Act, 2013 and the Listing Agreement. MEETING OF INDEPENDENT DIRECTORS Pursuant to the provisions of Companies Act, 2013 and Listing Agreement, a separate meeting of the Independent Directors was held on Tuesday, the 31st day of March, 2015. In the said meeting the Directors have reviewed the performance of Board and its Committees, Chairman of the Board, Non-Executive Directors and further assessed the quality, quantity and the timeliness of flow of information between the management and Board of the Company. DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS Your Company has received declarations from all the Independent Directors that they meet the Criteria of Independence as laid down under the Companies Act, 2013 read with Schedule IV and Rules made there under, as well as Revised Clause 49 of Listing Agreement. The Board considered the independence of each of the Independence Directors in terms of above provisions and is of the view that they fulfill the criteria of independence. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS The Company is required to conduct the Familiarisation Programme for Independent Directors (IDs) in terms of Clause 49(II)(B)(7) of the Listing Agreement, to familiarize them about the Company and their roles, rights, responsibilities in the Company, nature of the industry in which Company operates, business model of the Company and other related matters. The details of such Familiarization Programme for Directors are available on the Company's website (URLwww.gontermann-peipers.com/ investorsrelations/Directors/familiarization programme of Independent Directors). DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to Section 134 (1)(c) of the Companies Act, 2013, your Directors confirm that: (i) in the preparation of the annual accounts for the financial year 31st March, 2015, the applicable accounting standards and Schedule III to the Companies Act, 2013 have been followed and there are no material departure from the same; (ii) they had selected such accounting policies and applied them consistently and made judgments and estimates that are responsible and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the loss of your Company for the year ended on that date ; (iii) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; (iv) they have prepared the annual accounts for the year ended 31st March, 2015 on a going Concern basis; (v) they have laid down internal financial controls to be followed by your company and that such internal financial control are adequate and operating effectively; (vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and that the systems were adequate and operating effectively. EXTRACT OF THE ANNUAL RETURN An Extract of Annual Return as on the financial year ended 31st March, 2015 in Form No. MGT-9 as required Under Section 92 of the Companies Act, 2013, read with the Companies (Management and Administration) Rules, 2014 is set out as Annexure - I to this Report. REMUNERATION POLICY Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with rules made there under and Revised Clause 49 of the Listing Agreement, the Board of Directors have on the recommendation of Nomination and Remuneration Committee formulated the policies for Nomination and Remuneration of Directors, Key Managerial Personnel ('KMP') and Senior Managerial Personnel ('SMP') of your Company. The same is annexed as Annexure- II to this Report. STATUTORY AUDITORS M/s. V. Malik & Associates, Chartered Accountants, having Registration No. 000155N, issued by The Institute of Chartered Accountants of India, the Statutory Auditors of the Company hold office till the conclusion of the forty-eighth Annual General Meeting of the Company. The Board in terms of Section 139 of the Companies Act, 2013 on the recommendation of Audit Committee, has recommended for the ratification by the Members, the appointment of M/s. V. Malik & Associates, Chartered Accountants, Statutory Auditors from the conclusion of the ensuing Annual General Meeting till the conclusion of forty-seventh Annual General Meeting of the Company. Comments /Qualification of the Auditors in their report and the notes forming part of the Accounts are self-explanatory:- I. Capital Advances (Note No.12) includes long outstanding advances to the tune of Rs. 1166.82 Lacs (including amount represented as trade receivables) and advances to suppliers (Note No. 16 - Other Loans & Advances) including long outstanding advances to the tune of Rs 630.75 Lacs in respect of which no Confirmation/ Acknowledgement/ Schedule of delivery was available, the consequential revenue impact, if any is not ascertainable. Accordingly, provision for advances doubtful for recovery/ adjustment is necessary and non-creation of such provision is contrary to the requirement of Accounting Standard-4, "Contingencies and Events occurring after the Balance Sheet date". II. The Company has recognized Net Deferred Tax Asset (DTA) of Rs 2820.74 Lacs (including Rs 1059.28 Lacs for the period) up to 31st March, 2015 on account of unabsorbed depreciation, carried forward business losses and disallowances under Income Tax Laws (Refer No. 11 and 45 of Independent Auditors Report ) based on the future profitability projections made by the management .The Company has history of recent losses and in the absence of virtual certainty supported by convincing evidence to the fact that sufficient taxable income will be available against which such deferred tax assets can be realized and also non-disclosure of its nature, in our opinion, the recognition of deferred tax asset is in contravention of Accounting Standard-22"Accounting for Taxes on Income". Had the impact of item stated above been considered, the loss for the year would have been Rs 4620.66 Lacs (after adjusting deferred tax assets of Rs 1445.82 Lacs recognized upto 31st March, 2014) as against the reported loss of Rs 2115.56 Lacs and balance in Reserve and Surplus would have been Rs (1522.44) Lacs as against the reported Reserve and Surplus of Rs 1298.30 Lacs. Further the management representation to the above qualifications/comments are as follows : I. As regards advances to the tune of Rs 1166.82 Lacs and advances to Suppliers includes Rs 630.75 Lacs the management is assuring that the same will be adjusted against procurement of raw material or realization of advances. II. As regards Net Deferred Tax Asset (DTA) , based on future profitability projections, management is assuring of achieving the profitability in the forthcoming years and the Company is virtually certain that there would be sufficient taxable income in the future against which the Deferred Tax Asset can be accounted for or realised. COST AUDITORS Your Board on the recommendation of the Audit Committee, has approved the appointment of M/s. Datta Chakraborty & Associates, having firm registration No. 000300 issued by The Institute of Cost & Works Accountants of India, Cost Accountants, for audit of cost records maintained by the Company for the financial year ended 2015- 2016.In terms of section 148 of Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 appropriate resolution seeking your ratification of the remuneration M/s. Datta Chakraborty & Associates, Cost Accountants, is included in the Notice convening 46th Annual General Meeting of the Company. SECRETARIAL AUDITORS Pursuant to the provision of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s. MKB & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as Annexure-III to this Report. The following qualification was observed by the Secretarial Auditor in their report to which the Board has shared the following explanation . Qualification: Prof. Binay Bhushan Chakrabarti an Independent Director, resigned from the office of director from the closing hours of 7th November, 2014, which was subsequently filled up belatedly by the Board of Directors of the Company by appointing Dr. Buddhadeb Duari as an Independent Director with effect from 31st March, 2015. Management Response: After resignation of Prof. Binay Bhushan Chakrabarti as Independent Director, Management has taken great effort for getting a suitable Candidate in his place. Subsequently, Dr. Buddhadeb Duari was appointed as Non Executive Independent Director by the Board during the financial year 2014-15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY There was no such loan given, investment made, guarantee given or security provided by the Company to any entity pursuant to the provisions of section 186 of the Companies Act, 2013. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arm's length basis. During the year under review, the Company has not entered into any contracts/arrangements/transactions with related parties which could be considered as material in accordance with the provision of the Listing Agreement. Your Board of Directors, based on the recommendation of audit committee has approved the Policy on materiality of related arty transactions and dealing with related party transactions in accordance with the clause 49 of Listing Agreement and Companies Act, 2013. The said policy is hosted in Company's Website: www.gontermann-peipers.com CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO. The information on conservation of energy, technology, absorption and foreign exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure-IV to this Report. RISK MANAGEMENT The Company has in place robust risk management framework which identifies and evaluates business risk and opportunities. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of Listing Agreement, the Company has a Risk Management Committee of the Board, which looks after the identification of risks and their mitigation plans. During the year under review, the Board and Management teams are embracing the concept of Enterprise Risk Management (ERM). ERM is used as a strategy decision making tool to refine management strategies and risk controls. Thereafter, the management evaluated the risk on priorities basis and their mitigation plan were formulated and implemented on regular basis. The evaluated risk along with their mitigation plan and their implementation are presented before the Board on time to time basis. COMPOSITION OF AUDIT COMMITTEE AND OTHER COMMITTEE The Composition of Audit Committee and other Committees is provided in the Corporate Governance Report forming part of this Report. WHISTLE BLOWER POLICY & VIGIL MECHANISM Your Company has formulated a codified Whistle Blower Policy incorporating the provisions relating to Vigil Mechanism in terms of Section 177 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 and Revised Clause 49 of the Listing Agreement, in order to encourage Directors and Employees of your Company to escalate to the level of the Audit Committee any issue of concerns impacting and compromising with the interest of your Company and its stakeholders in any way. Your Company is committed to adhere to highest possible standards of ethical, moral and legal business conduct and to open communication and to provide necessary safeguards for protection of employees from reprisals or victimisation, for whistle blowing in good faith. The said Policy is hosted on the Company's website: www.gontermann-peipers.com REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES. The information required to be disclosed in the Director's Report pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in as an Annexure-V to this Report. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE Your Company is committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. The Company in its endeavour to provide a safe and healthy work environment for all its employees has developed a policy to ensure zero tolerance towards verbal, physical, psychological conduct of a sexual nature by any employee or stakeholder that directly or indirectly harasses, disrupts or interferes with another's work performance or creates an intimidating, offensive or hostile environment such that each employee can realize his / her maximum potential. Your Company has put in place a 'Policy on Prevention of Sexual Harassment' as per The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is meant to sensitize the employees about their fundamental right to have safe and healthy environment at workplace. As per the Policy, any employee may report his / her complaint to the Internal Complaint Committee formed for this purpose. The Company affirms that during the year under review adequate access was provided to any complainant who wished to register a complaint under the Policy. During the year under review, there was no such Complaints received by the Internal Complaint Committee. INTERNAL CONTROL SYSTEM Your Company has in place adequate Internal Controls System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the internal audit report were presented before the Chairman of Audit Committee of the Board. The Internal Audit team monitors and evaluates efficacy and adequacy of internal control system in the Company. Based on the report of internal auditors, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board on quarterly basis. CORPORATE GOVERNANCE Your Company is committed to maintain and adhere highest standards of Corporate Governance requirements as stipulated in Listing Agreement. The Corporate Governance Report along with the Certificate from M/s. V. Malik & Associates, Chartered Accountants confirming compliance with the conditions of Corporate Governance is attached with this report. CEO/CFO Certification Pursuant to the provisions of Listing Agreement pertaining to Corporate Governance, Mr. Dwijen Lahiri, Whole Time Director and Mr. Sandip Gupta, Chief Financial Officer of the Company have certified inter-alia, about review of financial statements for the financial year ended 31st March, 2015.The said Certificate has been provided elsewhere in the Annual Report. CHANGE IN REGISTRAR AND SHARE TRANSFER AGENT (RTA) During the year under review, your Directors at their meeting held on 12th February, 2015 has decided to change its existing Registrar & Share Transfer Agent M/s. MCA Limited to M/s. MCS Share Transfer Agent Limited having its office at 12/1/5, Manoharpukur Road, Kolkata-700026. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND During the year under review, your Company has transferred a sum of Rs. 31,368/- (Rupees thirty one thousand three hundred sixty eight Only) to the Investor Education Protection Fund (IEPF) of the Central Government, being the dividend amount pertaining to the financial year ended 31st March, 2007 which was due and payable and remained unclaimed and unpaid for period of seven (7) years, as provided in Section 205A and 205C of Companies Act, 1956 read with Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. AWARDS AND RECOGNITION Your Company has participated in National Convention of Quality Circle organized by Pune Chapter, and had been recognized in Category of Excellent and Par Excellent Category. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement being presented in a separate section forming a part of this Annual Report. APPRECIATION Your Directors would like to express their appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the services rendered by the officers, staff and workers of the Company at all levels and look forward to their continued co-operation. For and on behalf of the Board Prof. Manoj Kumar Mitra Director Dwijen Lahiri Whole Time Director Place: Kolkata Date: 13th November, 2015 |