Your Directors have immense pleasure in presenting the 45th Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended March31 2019:-
1. Financial Results :
| || ||(Rs. in Lacs) |
| ||Year ended March 31 2019 ||Year ended March 31 2018 |
|Revenue from Operations ||15391.00 ||13416.45 |
|Profit before Depreciation Interest & Tax (PBDIT) & before exceptional items ||806.72 ||509.22 |
|Less: Depreciation & Amortization ||428.66 ||470.54 |
|Profit/(Loss) before Interest and Taxes (PBIT) ||378.06 ||38.68 |
|Interest & Financial expenses ||466.91 ||468.61 |
|Profit/(Loss) before Tax (PBT) ||(88.85) ||(429.93) |
|Less: - Provision for Tax || || |
|- Current ||0.00 ||00.00 |
|- Deferred Tax ||14.39 ||56.36 |
|Profit/(Loss) after Tax (PAT) for the year ||(74.46) ||(373.57) |
|Add/ Less: Other comprehensive income ||5.40 ||(7.00) |
|Total Comprehensive Income for the year ||(69.06) ||(380.57) |
|Earnings per Share (Rs.) || || |
|--Basic & Diluted ||(0.51) ||(2.57) |
|Dividend per Share (Rs.) ||- ||- |
Performance (On Standalone Basis):
During the year under review there is improvement in the overall performance of thecompany due to better product mix better capacity utilization along with the benefits ofintroduction of GST. The revenue from operations (net) has increased to Rs. 15391.00lakhs as compared to revenue from operations (net) of Rs. 13416.45 lakhs of theprevious year; this performance seems quite satisfactory along with the improvements inthe overall margins of the Company.
During the year your company has earned profit before depreciation & amortizationInterest & taxes (PBDIT) of Rs. 806.71 Lakhs (5.24 %of Net Income) as comparedto previous year's profit before depreciation & amortization Interest & taxes(PBDIT) of Rs. 509.22 lakhs (3.80% of Net Income) with an overall increase in the marginby 1.44% as compared to previous year. The increase in the EBIDTA margin is mainly onaccount of increase in the prices of its products so to compensate the prices of its rawmaterial and allied products and services. After provision for depreciation andamortization of Rs. 428.66 lakhs (previous year of Rs.470.54 lakhs) Interest &financial expenses of Rs. 466.91 lakhs (previous year of Rs. 468.61 lakhs) thecompany has earned a marginal loss before taxes of Rs. 88.85 lakhs as compared tothe previous year's loss before taxes (PBT) of Rs. 429.93 lakhs.
After providing a provision for taxation & deferred tax of Rs.( 14.39) lakhs(previous year Rs.(56.36) lakhs) there was a loss of Rs. 74.46 lakhs as compared toprevious year's loss after tax of Rs. 373.57 lakhs. The overall performance of thecompany seems to be quite satisfactory.
2. Foreign Exchange Earnings:
During the year your company has paid net foreign exchange of Rs.316.90 Lakhs (mainlyon account of repayment of its long term liability from financial institution) (previousyear Rs.92.91 lakh) after taking into consideration the foreign exchange payment of Rs.784.95Lakhs (previous year Rs.679.19 Lakhs) on account of foreign exchange outgo mainly forpayment of interest & repayment of foreign currency term loan.
The Company has retained its ISO/TS 16949 certifications for its QualityManagement System.
During FY 2018-19 the company had incurred losses. Accordingly the Directors did notrecommend any dividend on equity shares for the FY 2018-19.
During the period under review no amount was transferred to reserves.
6. Management Discussion and Analysis Report:
In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report ispresented in a separate section forming part of the Annual Report.
7. Adequacy of Internal Control:
The Company has a proper and adequate system of internal control to ensure that allassets are safeguarded properly utilized and protected against loss from un-authorizeduse or disposition and those transactions are authorized and recorded by the concerneddepartments properly and reported to the Audit Committee/ Board effectively.
The Company has also in place adequate internal financial controls with reference tofinancial statements. Such controls are tested from time to time and no reportablematerial weakness in the design or operation has been observed so far.
8. Cash Flow Statement:
In conformity with the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Cash Flow Statement for the year endedMarch 31 2019 is annexed hereto.
9. Material Changes and Commitments affecting financial position of the Company:
There were no material changes and commitments affecting the financial position of theCompany that has occurred between the end of the financial year of the Company and thedate of signing of this report.
10. Share Capital:
The paid-up equity share capital of the Company as on March 31 2019 is Rs. 7.25Crores. During the year under review the Company has not issued any shares. No shares withdifferential voting rights stock or sweat equity shares were issued by the Company duringthe year under review. During previous year(s) the Company has transferred 410670Equity Shares to Investor Education and Protection Fund pursuant to the provisions ofsections 124 & 125 of the Companies Act 2013 and Investor Education and ProtectionFund (Accounting Audit Transfer and Refund) Rules 2016.
11. Subsidiary Joint Venture and Associate Companies:
There are no any subsidiary companies within the meaning of Section 2(87) of theCompanies Act 2013 ("Act").
Further there are no associate companies within the meaning of Section 2(6) of theCompanies Act 2013 ("Act").
12. Obligation of Company under the Sexual Harassment of Women at Workplace(Prevention Prohibition And Redressal) Act 2013:
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has formulated a Policy to preventSexual Harassment of Women at Workplace. During the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace Prevention Prohibition andRedressal) Act 2013.
13. Vigil Mechanism:
The Company has established a Vigil Mechanism and a Whistle Blower Policy in accordancewith the provisions of the Act and Listing Regulations. Disclosures can be made by awhistle- blower through an email or a letter to the Chairman of the Audit Committee. TheVigil Mechanism Policy can be accessed at the Company's website www.gsgroupindia.com.
14. Research And Development:
The Company is developing certain machineries (Special purpose Machines) as per itsvarious in house production process requirements along with for the requirements of itsgroup Companies as & when required under its Research & Development Centre.
15. Human Resource Development:
The Company has a team of able and experienced professionals and is always followingthe policy of Creating a healthy environment and work culture resulting into harmoniousinter-personal relations.
16. Risk Management:
The Board of Directors has constituted Business Development and Risk ManagementCommittee of the Company which has been entrusted with the responsibility to assist theBoard to look out for the new ventures/new business opportunities for the long termgrowth of the Company keeping in mind the future prospect of auto component business& overall automotive industry as a whole and with regard to the identificationevaluation and mitigation of operational strategic and environmental risks efficientlyand effectively.
17. Directors and Key Managerial Personnel (KMPs):
In accordance with the provisions of Section 152 of the Companies Act 2013 andArticles of association of the Company Mr. Jasbir Singh Ryait Chairman retires byrotation at the at the ensuing Annual General Meeting and being eligible offers himselffor re-appointment.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee has appointed Mr. Pardeep Sehgal as an Additional Independent director. He willhold office up to the ensuing Annual General Meeting. His appointment as an IndependentDirector will be subject to the approval of shareholders. The Board has also appointed Mr.Harkirat Singh Ryait as an Executive Director for a term of consecutive three years witheffect from 14th February 2019. His appointment will be subject to theapproval of shareholders.
On the recommendations of the Nomination and Remuneration Committee the Board haspromoted and redesignated Mr. Jasbir Singh Ryait as Chairman and Joint Managing Directorfor the period of three years with effect from 16th April 2019 liable toretire by rotation. The Board has also re-appointed Ms. Dalvinder Kaur Ryait and Ms.
Amarjit Kaur Ryait for a period of three years with effect from 16th April2019 on the recommendation of the Nomination and Remuneration Committee.
The first term of office of Mr. Iqbal Singh and Mr. Upkar Singh Ahuja as IndependentDirectors expires at the ensuing Annual General Meeting. The Board has recommendedre-appointment of Mr. Iqbal Singh and Mr. Upkar Singh Ahuja as Independent Directors for asecond term of five years. As on the date of this report the Company's Board consists ofthe following Independent Directors:
Mr. Upkar Singh Ahuja
Mr. Iqbal Singh
Mr. Avinash Sharma
Mr. Sharwan Sehgal
Mr. Pardeep Sehgal
The Company has received declarations from all the Independent Directors of the Companythat each of them meets the criteria of independence as provided in Section 149(6) of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and there has been no change in the circumstances which may affect theirstatus as independent director during the year. In the opinion of the Board theindependent directors possess appropriate balance of skills experience and knowledge asrequired.A brief note on Director retiring by rotation and eligible for re-appointment isfurnished in the Notice.
18. Key Managerial Personnel:
In terms of Section 203 of the Companies Act 2013 following persons are the KMPs ofthe Company:
|Mr. Jasbir Singh Ryait ||Chairman and Joint Managing Director |
|Mr. Surinder Singh Ryait ||Managing Director |
|Mr. Neeraj Tuli ||Chief Financial Officer |
|Ms. Amninder Kaur ||Company Secretary |
19. Board Evaluation:
The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board in the following manner:
| ||Performance evaluation of ||Performance evaluation performed by |
|1. ||Board and individual directors ||Board after seeking inputs from all directors |
|2. ||Board Committees ||Board seeking inputs from all committee members |
|3. ||Individual Directors ||Nomination and Remuneration committee |
|4. ||Non-independent directors Board as a whole and the Chairman ||Separate meeting of independent directors after taking views from executive directors. |
|5. ||Board its Committees and individual Directors ||At the board meeting held after the meeting of the independent directors based on evaluation carried out as above. |
20. Number of Meetings of the Board:
The Board met five times during the financial year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.
21. Familiarization Program for Independent Directors:
To familiarize the new inductees with the strategy operations and functions of ourCompany the senior management personnel make presentations to the inductees about theCompany's strategy operations product offerings markets organization structurefinance human resources technology quality facilities and risk management. The detailsof such familiarization programmes for Independent Directors are posted on the website ofthe Company www.gsgroupindia.com.
22. Committees of the Board:
Currently the Board has four committees: the Audit Committee Nomination andRemuneration Committee Stakeholders' Relationship Committee and Business Development andRisk Management Committee. All committees consist of a combination of Independent as wellas non-independent directors as stipulated under the provisions of the Companies Act2013.A detailed note on the Board and its Committees is provided under the CorporateGovernance Report section in this Annual Report. The composition of the committees andcompliances as per the applicable provisions of the Act and Rules are as follows:
|Name of the Committee ||Composition of the Committee ||Highlights of Duties responsibilities and activities. |
|Audit Committee ||Mr. Sharwan Sehgal ||The Company has adopted the Vigil Mechanism for directors and employees to report concerns about unethical behavior actual or suspected fraud or violation of the Company's Code of Conduct and Ethics. In accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has formulated policies on related party transactions and material subsidiaries. The policies are available on the website www.gsgroupindia.com. |
| ||Chairman || |
| ||*Mr. Avinash Sharma || |
| ||Mr. Jasbir Singh Ryait || |
| ||Mr.Iqbal Singh || |
| ||** Mr. Jasbir Singh Bir || |
|Nomination and Remuneration Committee ||*Mr. Avinash Sharma ||The committee overseas and administers executive compensation reviews the compensation program to align both short term and long term compensation with business objectives and to link compensation with the achievement of measurable performance goals. |
| ||Chairman || |
| ||Mr. Sharwan Sehgal || |
| ||Mr. Upkar Singh Ahuja || |
| ||**Mr. Jasbir Singh Bir || |
| || ||The Nomination and Remuneration Committee has framed the Nomination and Remuneration Policy. A copy of the policy is appended as Annexure II |
|Stakeholders Relationship Committee ||Mr. Upkar Singh Ahuja ||The committee reviews and ensures redressal of investor grievances. The committee noted that all the grievances of the investors have been resolved during the year. |
| ||Chairman || |
| ||Mr. Sharwan Sehgal || |
| ||*Mr. Avinash Sharma || |
| ||**Mr. Jasbir Singh Bir || |
|Business Development and Risk Management Committee ||Mr. Surinder Singh ||The purpose of Committee is to look out for the new ventures/new business opportunities for the long term growth of the Company keeping in mind the future prospect of auto component business & overall automotive industry as a whole and with regard to the identification evaluation and mitigation of operational strategic and environmental risks efficiently and effectively. |
| ||Ryait Chairman || |
| ||Mr.Jasbir Singh Ryait || |
* Appointed w.e.f. 14th August 2018. **Resigned w.e.f 30th May2018.
23. Auditors Audit Report and Audited Accounts:
M/s Sukhminder Singh & Co. (ICAI Firm Registration No. 016737N) CharteredAccountants Ludhiana were appointed as Statutory Auditors in place of M/s Nanda &Bhatia in 43rd Annual General Meeting to hold office until the conclusion of 47thAnnual General Meeting (AGM). Pursuant to the Companies (Amendement) Act 2017 therequirement of ratification of appointment of the Auditors on yearly basis had beendispensed with.
The Auditors' Report read with the notes to the accounts referred to therein areself-explanatory and therefore do not call for any further comments. There are noqualifications reservations or adverse remarks made by the Auditors. The StatutoryAuditors have not reported any fraud during the year under review
24. Cost Audit:
Pursuant to the provisions of Section 148 of the Companies Act 2013 M/s. Pawan Verma& Co. Cost Accountants were appointed as the Cost Auditors to conduct audit of costrecords.
25. Secretarial Audit:
Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Bhupesh Gupta & Associates Practicing CompanySecretaries were appointed as the Secretarial Auditor for auditing the secretarial recordsof the Company for the financial year 2018-19.
The Secretarial Auditors' Report in Form No. MR-3 as required under the Act for thefinancial year ended March 31 2019 is annexed hereto. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditors. The Report forms part ofthis report as Annexure II.
26. Corporate Governance:
As per the requirement of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has complied with the requirements of Corporate Governancein all material aspects.
A report on Corporate Governance (Annexure- I) as stipulated under the ListingRegulations forms an integral part of this Report. The requisite certificate from theAuditors of the Company confirming compliance with the conditions of Corporate Governanceis attached to the report on Corporate Governance.
During the year under review the Company has not accepted any deposits and as such noamount of principal or interest on deposits from public was outstanding as on the date ofthe balance sheet.
28. Safety Environment and Health:
The Company considers safety environment and health as the management'sresponsibility. Regular employee training programs are carried out in the manufacturingfacilities on safety environment and health.
29. Particulars of Loans Guarantees and Investments:
The Company has not given any loans or guarantees or made investments in contraventionof the provisions of the Section 186 of the Companies Act 2013. The details of the loansand guarantees given and investments made by the Company are provided in the notes to thefinancial statements.
30. Related Party Transactions:
All related party transactions that were entered into during the financial year ifany were on arm's length basis and were in the ordinary course of Company's business. TheCompany has not entered into any contract arrangement or transaction with any relatedparty which could be considered as material within the meaning of Regulation 23 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
All the related party transactions are placed before the Audit Committee for approvalon a quarterly basis. Members may refer to Note 44 to the Financial Statements which setsout related party disclosures pursuant to Ind AS.
The Policy on dealing with related party transactions and the Policy for determiningmaterial subsidiaries as approved by the Board of Directors may be accessed on theCompany's website at www.gsgroupindia.com
31. Employee Strength:
The total number of permanent employees on the rolls of the Company was 867 ason March 31 2019 (967 was in the previous year).
32. Remuneration of Directors/ Employees and related analysis:
During the period under review no employee of the Company received salary in excess ofthe limits as prescribed under the Act. Accordingly no particulars of employees are beinggiven pursuant to Section 134 of the Companies Act 2013 read with Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
Other information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the company will be provided upon request. In terms of Section 136 of the Act theAnnual Report excluding the aforesaid information is being sent to all the members andothers entitled thereto. Any shareholder interested in obtaining such particulars maywrite to the Company Secretary at the corporate office of the company. The saidinformation is also available for inspection at the registered office during working hoursup to the date of the Annual General Meeting. Company has not offered its shares to itsemployees under ESOS during the year under review.
Company has not sanctioned loan to any of its employees for purchase of Company'sshares under any scheme.
33. Code of Conduct:
The Board has laid down a code of conduct for board members and senior managementpersonnel of the Company. The code incorporates the duties of independent directors aslaid down in the Companies Act 2013.
The said code of conduct is posted on Company's website www.gsgroupindia.com. The Boardmembers and senior management personnel have affirmed compliance with the said code ofconduct. A declaration signed by the Managing Director is given at the end of theCorporate Governance Report.
34. Prevention of Insider Trading:
Based on the requirements under SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 as amended from time to time the Code of Practices and Procedures forFair Disclosure of Unpublished Price
Sensitive Information ("Code of Fair Disclosure") and the Code of Conduct toregulate monitor and report trading by employees and other connected persons ("Codeof Conduct") as approved by the Board on 14.05.2015 are in force by the Company. Theobjective of this code is to protect the interest of shareholders at large to preventmisuse of any price sensitive information and to prevent any insider trading activity bydealing in shares of the Company by its Directors Designated Employees and SpecifiedPersons. The Company also adopts the concept of Trading Window Closure to prevent itsDirectors Designated Employees and Specified Persons from trading in the securities ofthe Company at the time when there is unpublished price sensitive information. The codehas also been placed on the website of the Company www.gsgroupindia.com.
35. Significant and Material orders passed By the Regulators or Courts:
There are no significant or material orders passed by any regulator tribunal or courtthat would impact the going concern status of the Company and its future operations.
36. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo:
In accordance with the requirements of Section 134 of the Companies Act 2013statement showing particulars with respect to conservation of energy technologyabsorption and foreign exchange earnings and outgo is furnished as Annexure IV to thisreport.
37. Extract of Annual Return:
In accordance with the requirements of Section 92 (3) of the Companies Act 2013 andrule 12 (1) of the Companies (Management and Administration) Rules 2014 an extract ofAnnual Return in Form MGT-9 is furnished as Annexure No. IV to this report. The same isalso available on the website of the Company www.gsgroupindia.com.
38. Directors' Responsibility Statement:
In compliance of section 134(5) of the Companies Act 2013 the Directors of yourDirectors confirm:
i. that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
ii. that your Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year March 31 2019 and of the loss of the Company for the year ended on thatdate;
iii. that your Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. that the annual accounts have been prepared on a going concern basis;
v. that your Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
vi. that your Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
During the year under review the Company has repaid all its long term loans/debtsfrom Bank and financial institutions.
Your Company has adequately insured all its properties including Plant and MachineryBuilding and Stocks.
41. Change in Nature of business
No changes have been made in the nature of business carried out by the Company duringthe financial year 2018-19.
Your Directors place on record their sincere appreciation gratitude to the continuingpatronage and trust of our valued customers bankers financial institutions businessassociates shareholders and other statutory authorities who have extended their continuedsupport and encouragement to your Company. Your Directors wish to convey their deepappreciation to the customers dealers distributors of the Company for their achievementsin the field of sales and service and to suppliers and vendors and other businessassociates for their valuable support.
Your directors also place on record their sincere appreciation for the enthusiasm andcommitment of all its employees for the growth of the Company and look forward to theircontinued involvement and support.
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
| ||Jasbir Singh Ryait ||Surinder Singh Ryait |
| ||Chairman and Jt. ||Managing Director |
|Place: Ludhiana ||Managing Director || |
|Date: 14th August 2019 ||DIN:00104979 ||DIN:00692792 |