Director's Report To The Members Goldstone Infratech Limited Your Directors have pleasure in presenting the 15th Annual Report together with the Audited Statements of Accounts of the company for the financial year ended 31 st March, 2015. Review of Operations: During the year under review, your Company has achieved a gross turnover of Rs. 9951.19 lakhs as against Rs. 8738.96 lakhs for the previous financial year. The Net Profit has increased from Rs. 211.83 Lakhs for the year ended 31st March, 2014 to Rs. 491.93Lakhs during the Current Year. During the year under review, the Company has got approval and started supplying its 800kV insulators for Transmission Lines. Dividend: In order to conserve resources for future requirements and development of export markets the Board has decided to retain the profits generated and consequently, your Board has not recommend any dividend for the financial year 2014-15. Share Capital : The Paid up capital as on 31st March 2015 was Rs.14,43,22,948 (having 3,60,80,737 Equity Shares @Rs 4/- each) . During the year under review the company has not issued any shares either to the public or to the promoters. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2015, none of the Directors of the Company hold shares or convertible instruments of the Company except Mr. L.P.Sashi Kumar Managing Director of the Company. Finance : Cash and cash equivalents as at 31st March 2015 was Rs. 919.28 Lakhs. The Company continuous to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. Fixed Deposits: The Company has not accepted any fixed deposits from the public, and as such, no amount of principal or interest on public deposits was outstanding as on the date of the Balance Sheet. Directors: Mrs. Mahita Caddell, Director, who retires by rotation at the 15th Annual General Meeting and being eligible, offer herself for re-appointment. Mr.M.Gopala Krishna, Mr. B.Appa Rao, Mr. S.Murali Krishna were appointed as independent directors of the Company for a term of 5 (Five) years from 27th September 2014 to 26th September, 2019 not liable to retire by rotation. All independent directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Board Evaluation : Pursuant to the Provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Remuneration Policy : The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Meetings: During the year Six Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Agreement. Meeting of Independent Directors : The details on the separate meeting of Independent Directors is reported in the Corporate Governance Report. Familiarization Programme for Independent Directors : The details on the familiarization programme for Independent Directors is reported in the Corporate Governance Report. Board Diversity : The Policy on Board diversity of the company devised by the Nomination and Remuneration Committee and approved by the Board is disseminated at the website of the company at www.goldstonepower.com . Director's Responsibility Statement: In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review. iii) The directors have taken proper and sufficient care 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. iv) The directors have prepared the annual accounts on a going concern basis. v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Consolidated Financial Statements: During the year the Board of Directors ('the Board') reviewed the affairs of the Subsidiary. In accordance with Section 129 (3) of the Companies Act, 2013 and applicable Accounting Standards we have prepared consolidated financial statements of the Company and its subsidiaries which will form part of the Annual Report. Further a statement containing the salient features of the financial statements of our subsidiary in the prescribed format AOC-1 is appended as Annexure to the Board's report. In accordance with Section 136 of the Companies Act, 2013 the Audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries are available on website of the Company www.goldstonepower.com . These documents will also be available for the inspection during the business hours at the registered office of the Company. Subsidiaries and Associates; As on 31st March, 2015 the Company is having one wholly owned subsidiary namely TF Solar Power Private Limited. The Company does not have any other Associates or Joint Ventures. Further as per the revised Clause 49 of the Listing Agreement the Company has framed a policy on Material Subsidiaries as approved by the Board same has been uploaded on the Company's website www.goldstonepower.com Till date, the Subsidiary Company (M/s. TF Solar Power Private Limited) has no business operations. During the year no further investment was made by the Company in subsidiary. Statement containing salient features of financial statements of subsidiary: Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures is in the prescribed format AOC-1 are appended as Annexure-1 to the Board's report. Report on the performance of Subsidiaries, Joint Ventures and associates: Till date the Subsidiary Company (M/s. TF Solar Power Private Limited) has no business operations and the Company has no associates as well as Joint Ventures. Internal control systems and their adequacy: The Company has an Internal Audit and Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. Insurance: All the properties of your Company including its building, plant & machinery and stocks have been adequately insured. Statutory Auditors: M/s. P Murali & Company (FRN: 007257S), Chartered Accountants, Hyderabad, Statutory Auditors of the Company holds office in accordance with the provisions of the Companies Act, 2013 up to the conclusion of forth-coming Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of the Section 139 (2) of the Companies Act, 2013 and based on recommendations of the Audit Committee they being eligible, offer themselves for re-appointment. They have furnished a certificate stating that their re-appointment, if made, will be within the limits laid down under Section 141 (3) (g) of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014. The Audit Committee of your Company meets periodically with Statutory Auditors and Internal Auditors to review the performance of the Internal Audit, to discuss the nature and scope of statutory auditors functions, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the statutory auditor and the internal auditor have full access to the Members of the Audit Committee to discuss any matter of substance. Cost Auditors: As per the Companies (Cost Records and Audit) Rules, 2014 read with Companies (Cost Records and Audit) Amendment Rules, 2014 our company come under the ambit of the industry which is subject to maintenance of Cost Records and Cost Audit. However since the Company's turnover for the FY 2014-15 was below the threshold limits, therefore appointment of Cost Auditor and conducting of cost audit on cost records is not applicable to the Company for the Financial Year 201516. Particulars of Loans, Guarantees or Investments: During the year under review the Company has not given any Loans, Guarantees or any Investments. Related Party Transactions: There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website www.goldstonepower.com none of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. The details of contacts or arrangements with related parties made by the company during the year 2014-15 is enclosed in form AOC-2 as Annexure-2 to the Board's Report. Secretarial Audit: Pursuant to provisions of Section 204 of the Companies Act, 2013, read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. Prathap Satla and Associates, Practising Company Secretaries, (CP No. 11879) in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure 3 to the Board's Report" Risk Management Policy : In terms of the requirements of Section 134 (3) (n) and clause 49 of the Listing Agreement read with relevant provisions of the Companies Act, 2013 the Company has developed and implemented the Risk Management Policy and constituted the Risk Management Committee and the Committee reviews the same periodically. The details of the Policy are reported in the Report on Corporate Governance which forms part of the Director's Report. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Board's Report. At present the company has not identified any element of risk which may threaten the existence of the company. Code of Conduct: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviors of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Company's website www.goldstonepower.com . The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. In addition to the above as per Clause 49 of the Listing Agreement read with Schedule IV of the Companies Act, 2013 duties of the Independent Directors and code of Independent Directors have been placed on the website of the Company www.goldstonepower.com All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. Declaration given by Managing Director of the Company regarding compliance of Code of Conduct enclosed as Annexure to the Corporate Governance Report. Prevention of Insider Trading: In Pursuance of SEBI (Prohibition of Insider Trading) Regulations, 2015 the Company has framed and adopted the following policies for regulating, monitoring and reporting of trading by Insiders and uploaded in website of the Company. i) Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders; ii) Code of Practices & Procedures for Fair Disclosure of Unpublished Price Sensitive Information; The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed the compliance with the Code. Vigil Mechanism / Whistle Blower Policy: As per the provisions of the Section 177 (9) & (10) of the Companies Act, 2013 read with amended Clause 49 of the Listing Agreement, the Board had its meeting held on 17th May, 2014 adopted a Vigil Mechanism called 'Whistle Blower Policy' for directors and employees to report the management /Audit Committee instances of unethical behavior, actual or suspected, fraud or violation of company's code of conduct or ethics policy. The Vigil Mechanism also provided adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases further it has also been uploaded in the Company's web site; www.goldstonepower.com . Extract of Annual Return: The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure 4 to the Board's Report". Stock Exchange Listing: Presently, the equity shares of the Company are listed on National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The Company confirms that it has paid Annual Listing Fees due to all the Stock Exchanges where the Company's securities are listed for the year 2015-16. Corporate Governance and Management Discussion & Analysis Reports : As per the Clause 49 of the Listing Agreement the Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. Managing Director and CFO Certification: As required under the SEBI Guidelines, the Managing Director and the CFO Certification is attached to Corporate Governance Report. Material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year i.e.31.3.2015, to which financial statements relate and the date of the Board's Report: Subject to approval of the Members, the Board of Directors of the Company in their meeting held on 11th July, 2015 have approved the proposal to sell and transfer, the Company's undertaking comprising the business of manufacture and sale of composite polymer insulators ('Insulators Division') along with the specified assets and liabilities related to the 'Insulators Division' including but not limited to manufacturing, marketing and trading assets along with all licenses, permits, intellectual property rights, consents, employees and approvals whatsoever, relating thereto ('Business Undertaking') in the manner and as per terms and conditions as deemed fit in the interests of the Company, as agreed between the Company and MPS Mauritius Holding, a subsidiary of MacLean Power LLC, USA on a slump sale basis to the Indian subsidiary of MPS Mauritius Holding for a lumpsum cash consideration of Rs. 1,080 million (Rupees One Billion and Eighty million only), subject to customary purchase price adjustments for net working capital, which consideration represents a fair value for the sale of the Business Undertaking having regard to the independent valuation carried out by one of the big Four Global Accounting Firms. Details of significant and material orders passed by the regulators, courts, tribunals impacting the going concern status and company's operations in future : There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. Particulars of employees: The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is enclosed as Annexure 5 to the Board's report. None of the employees are drawing remuneration in exceess of limits as prescribed under Section 197 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Personnel: Personnel relations have remained very cordial during the period. Acknowledgements: Your Directors convey their sincere thanks to State Bank of Hyderabad, for their support, guidance and assistance. Your Company and its Directors wish to extend their sincere thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance. For and on behalf of the Board Sd/- L P Sashikumar Managing Director DIN : 00016679 Sd/- B. Apparao Director DIN: 00004309 Place: Secunderabad Date: 06th August, 2015 |