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Gabriel India Ltd.

BSE: 505714 Sector: Auto
NSE: GABRIEL ISIN Code: INE524A01029
BSE 00:00 | 24 Apr Gabriel India Ltd
NSE 05:30 | 01 Jan Gabriel India Ltd
OPEN 80.95
PREVIOUS CLOSE 79.30
VOLUME 6217
52-Week high 149.00
52-Week low 40.25
P/E 15.31
Mkt Cap.(Rs cr) 1,155
Buy Price 78.35
Buy Qty 100.00
Sell Price 83.00
Sell Qty 1.00
OPEN 80.95
CLOSE 79.30
VOLUME 6217
52-Week high 149.00
52-Week low 40.25
P/E 15.31
Mkt Cap.(Rs cr) 1,155
Buy Price 78.35
Buy Qty 100.00
Sell Price 83.00
Sell Qty 1.00

Gabriel India Ltd. (GABRIEL) - Director Report


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Company director report

To

The Members

Your Directors take pleasure in presenting the 57th Annual Report on the business andoperations of the Company together with the Audited Financial Statement for the yearended March 31 2019.

The Company's sales grew by 13.1% and PBT and PAT grew by 4.3% & 0.8% respectively.The improved profitability was due to control on raw material costs in the backdrop ofincreasing commodity prices expenses control in the backdrop of large volume increasebetter working capital and cash flow management. The Company continued to deliver goodresults on the strength of strong customer and people orientation leveraging its corecompetencies in technology manufacturing and supply chain efficiency.

FINANCIAL RESULTS

( दin million)
Particulars Year ended 31.03.2019 Year ended 31.03.2018
Net Sales 20523.75 18140.88
Earnings before Interest Tax and 1778.03 1712.69
Depreciation and Amortization (EBITDA)
Finance Cost 29.34 28.87
Depreciation and amortisation expense 410.57 382.93
Profit/(Loss) Before Tax (PBT) 1430.53 1371.64
Provision for Taxation:
- Current 462.75 392.66
- Deferred Tax 17.90 36.61
Profit /(Loss) After Tax (PAT) 949.88 942.37
Profit/(Loss) Account Balance at the beginning of the year 4425.35 3716.61
Profit available for appropriations 5363.49 4658.77
Appropriations:
Dividend on Equity Shares 208.28 193.94
Tax on Dividend 42.82 39.48
Transferred to General Reserves - -
Profit/(Loss) Account balance at the end of the year 5112.39 4425.35

PERFORMANCE HIGHLIGHTS

Your Company recorded net sales of H20523.75 million in FY2018-19 as compared toH18140.88 million in FY2017-18 a growth of 13.1%. It reported a 3.8% growth in EBITDA toH1778.03 million largely based on volume growth across Business Units viz. 2&3 -Wheelers Commercial Vehicles & Railways and Aftermarket. The Company's PBT stood atH1430.53 million an increase of 4.3% over FY2017-18 largely because of enhancing shareof value added products and cost control measures coupled with increasing sales volume.Profit after tax of the Company was pegged at H949.88 million compared to H942.37 millionin FY2017-18. The EPS improved to H6.61 per share in FY2018-19 from H6.56 per share inFY2017-18.

BUSINESS OUTLOOK

The Company is expected to perform better based on a number of changing sectoralrealities. Although FY2019-20 is expected to be challenging as OEMs focus on BS-VIimplementation while limiting launches. Gabriel India will focus on qualitative andtechnological upgradation improve line efficiency and human productivity emphasisepremiumisation and complete Sanand capacity expansion to remain as a supplier-of-choice.The thrust will be on cost optimisation and quality enhancement to enter global platformand deliver FTR (first time right) and ETR (every time right) for SOP planned duringFY2019-20.

OPERATIONS

The Company's operation efficiency is a result of continuous focus on qualityimprovement cost management employee skill enhancement and technological upgradation.Further growth and improvement in operational efficiency will be driven by theorganization's increased focus on higher employee productivity and quality enhancement.

CREDIT RATING

Your Company has obtained the credit rating from CRISIL Limited ("CRISIL') for itsBanking facilities vide letter dated July 26 2018. The agency has upgraded the company'slong term rating from CRISIL AA-/Positive' to CRISIL AA/Stable) for bank loan facilitiesand from FAA/Positive to FAA+/Stable for Fixed Deposits.

DIVIDEND

Your Directors declared an interim dividend of H0.55 per equity share of H1 each(previous year H0.50 per equity share of H1 each). This dividend amounted to H79.00million (Previous year H71.83 million). The dividend distribution tax thereon was H16.23million. This was distributed to shareholders whose names appeared on the Register ofMembers as on November 16 2018.

Your Directors further recommended for the approval of shareholders a final dividend ofH0.95 per equity share of H1 each (previous year H0.90 per equity share of H1 each). Thisproposed dividend will amount to H136.46 million (previous year H129.28 million). Thedividend distribution tax thereon shall be H28.04 million. The dividend subject to itsdeclaration will be distributed to shareholders whose names appear on the Register ofMembers on August 06 2019.

TRANSFER TO RESERVES

The closing balance of the retained earnings of the Company for the FY2018-19 afterall appropriations and adjustments was H5112.39 million.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review in terms of Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 following dividendcorresponding shares and matured deposits alongwith the accrued interest were transferredto the Investor Education and Protection Fund following a due notice to the members. Thesame can be claimed by the respective investor through submission of Form IEPF-5.

The list of shareholders is available on Company's weblink: https://www.anandgroupindia.com/gabrielindia/investors/investor-information/ Future cash benefitslike dividend to such transferred shares shall be transferred by the Company to bankaccount of IEPF authority.

1. Details of unclaimed/unpaid dividend and Corresponding shares transferred to IEPF

Sr No. Particulars Amount of No. of
Dividend Shares
1 Final Dividend 2010-11 662308 16442
2 1st Interim Dividend 2011-12 523763 13 627

2. Details of Matured Fixed Deposit alongwith interest accrued there on transferred toIEPF

Sr. No. Details of Monthly transfer Amount of Unclaimed Amount of Unclaimed
Matured Deposit Interest
1 May-18 - 2546
3 Jun-18 - 2066
4 Jul-18 20000 21025
5 Aug-18 18879 5165
6 Sep-18 - 1134
7 Oct-18 20000 50131
8 Nov-18 20000 37431
9 Dec-18 10000 28464
10 Jan-19 70000 61607
11 Feb-19 40000 2887
12 Mar-19 10000 74433

3. Details of resultant benefit arising out of shares already transferred to IEPF

Sr No. Particulars Amount
1 Final Dividend 2017-18 509465.55
2 Interim Dividend 2018-19 819773.10

SHARE CAPITAL

The paid-up Equity Share Capital as on March 31 2019 was H143.64 million.During the year under review the Company did not issue any shares and did not grant stockoptions or sweat equity shares to employees. The details of the shareholding of theDirectors are as mentioned below as on March 31 2019:

Sr. No. Name of Director Shareholding % of Holding
1 Mrs. Anjali Singh 641942 shares 0.45%
2 Mr. Manoj Kolhatkar 4000 shares 0.003%

DEPOSITS

The Company has discontinued the acceptance of deposits with effect from November 092015. Accordingly no further deposits shall be accepted by the Company under the saidscheme. The deposits already accepted under the said scheme upto November 07 2015were served till their applicable tenure. The details pertaining to deposits is as under:

Sr. No. Details Amount ( दin million) /Remark
i Public deposits accepted during the year NIL
ii Deposits that remained unpaid or unclaimed as at the end of the year
0.22
iii Whether there has been any default in repayment of deposits or payment of Interest thereon:
a. at the beginning of the year. NIL
b. maximum during the year NIL
c. at the end of the year NIL
iv Details of deposits which are not in compliance with the requirements of Chapter
V of the Act NIL

MEETINGS OF THE BOARD

The Board of the Company comprised six Directors as on March 31 2019. The Boardcomprised Mrs. Anjali Singh Mr. Manoj Kolhatkar Mr. Pradipta Sen Mr. Aditya Vij Mr.Pradeep Banerjee and Mr. Jagdish Kumar.

The details of the meetings during the financial year under review are mentioned below.

Sr No. Date of Meetings Board Strength No. of Directors Present
1 May 11 2018 6 6
2 August 8 2018 6 6
3 November 2 2018 6 6
4 February 14 2019 6 5

The maximum time gap between two Board meetings was not more than four months.

COMMITTEES

The composition of committees constituted by board alongwith changes if any forms partof the Corporate Governance Report which is a part of Annual report.

MANAGEMENT

A. Directors

The composition of the Board of Directors of the Company is as below.

1 Mrs. Anjali Singh 02082840 Executive Chairperson
2 Mr. Manoj Kolhatkar 03553983 Managing Director
3 Mr. Pradipta Sen 00051758 Non-Executive Independent Director
4 Mr. Pradeep Banerjee 02985965 Non-Executive Independent Director
5 Mr. Aditya Vij 03200194 Non-Executive Independent Director
6 Mr. Jagdish Kumar 00318558 Non-Executive Director

During the year under review Mr. Pradeep Banarjee was regularized as ‘Non-Executive independent director' w.e.f December 14 2017. In accordance with the Article128 129 and 130 of the Articles of Association of the Company and Section 152(6)(d) and(e) of the Companies Act 2013 Mr. Jagdish Kumar retires by rotation and being eligibleoffers himself for reappointment.

B. Proposed Re-appointment of Independent Director

Mr. Pradipta Sen and Mr. Aditya Vij were appointed as an Independent Directors w.e.fSeptember 18 2014 and March 30 2015 respectively. They will be completing their firstterm on September 17 2019 and March 29 2020 respectively.

The rationale for their re-appointment is as under:

Mr. Pradipta has been the president for India Middle East and Africa region ofEmerson a Fortune 500 company into manufacturing products and engineering services. Priorto his current challenge he was the president of Emerson India for a decade where he wasinstrumental in establishing and growing company's sales and presence. Prior to joiningEmerson he spent 16 years with General Electric in leadership roles Mr. Aditya Vij has arich management experience spanning three and half decades in the corporate world with aproven track record of developing and turning around businesses in various leadershippositions.

The entire Board (excluding the Director being evaluated) conducted the Performanceevaluation of the Independent Directors based on knowledge Diligence & ParticipationLeadership etc.

The Nomination and Remuneration Committee at its Meeting held on May 16 2019 on thebasis of performance evaluation of Independent Directors and taking into the businessknowledge acumen experience and the substantial contribution made by Mr. Pradipta Senand Mr. Aditya Vij during their tenure has recommended to the Board that their continuedassociation as Independent Directors of the Company would be beneficial to the Company.

The Board therefore approved and recommended their reappointment to the shareholdersfor the second term of three consecutive years on the Board of the Company.

B. Declaration of independence and statement on compliance of code of conduct

The Non-Executive Independent Directors enlisted below have :

1. Provided a declaration under Section 149 (6) of the Companies Act 2013 that theymeet the criteria of independence. The declarations from the Directors is attached asAnnexure A.

2. Complied with the Code for Independent Directors prescribed in Schedule IV to theAct.

3. Complied with the Code of Conduct for Board of Directors Members of SeniorManagement and Insiders

Sr No. Name of the Director DIN Position
1 Mr. Pradipta Sen 00051758 Non-Executive Independent Director
2 Mr. Aditya Vij 03200194 Non-Executive Independent Director
3 Mr. Pradeep Banerjee 02985965 Non-Executive Independent Director

C. Formal Evaluation

Pursuant to the provisions of the Companies Act 2013 and the Regulations of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board carried outan annual evaluation of its own its Committees the Chairperson and the Directorsindividually. A detailed note on the manner of evaluation forms a part of the CorporateGovernance Report.

D. Audit Committee

The Audit Committee was constituted as per the provisions of the Companies Act 2013and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Composition of the Audit Committee is as below:

Sr No. Name of the Director DIN Position
1 Mr. Pradipta Sen 00051758 Chairman Non-Executive Independent Director
2 Mr. Pradeep Banerjee 02985965 Member Non-Executive Independent Director
3 Mr. Jagdish Kumar 00318558 Member Non-Executive Director

E. Key Managerial Personnel

During the year under review Mr. Rajendran Arunachalam resigned as Chief FinancialOfficer of the company. He was relieved on March 08 2019 end of working hours. There hasbeen no other change in the Key Managerial Person of the Company except above.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The Company has in place a Nomination and Remuneration Policy which was duly approvedby the Board in the Financial Year 2014-15. The remuneration in all forms paid to theExecutive Directors was in compliance with the said Policy. The remuneration toNon-Executive Independent Directors in the form of commission and sitting fees was alsopaid in terms of the said Policy. The disclosure of the details of the Nomination andRemuneration Policy forms part of the Corporate Governance Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENT

Disclosures relating to the Loans Guarantees or Investments as defined under Section186 of the Companies Act 2013 forms part of the notes to the Financial Statement.

VIGIL MECHANISM

A Vigil Mechanism in the form of an Ethics Helpline and Whistle Blower Policy wasestablished by the Company to trace and deal with instances of fraud and mismanagement.The details/report for the same was directly reported to the Audit Committee Chairman. Abrief note on the Whistle Blower Policy is disclosed in the Corporate Governance Report.The full text of Policy is available on Company'sweblink:https://www.anandgroupindia.com/wp-content/uploads/2018/01/WhistleBlowerPolicy.pdf.

INTERNAL CONTROLS AND SYSTEMS

The Company has established satisfactory internal control systems and vigilance systemswhich are continuously evaluated by professional internal and statutory auditors ofrepute. The Company continues to improve the present internal control systems byimplementation of appropriate policy and processes. Adequate benchmarking is done toupgrade the same time to time. The Company has in place an adequate system to ensureefficacy of operations compliance with applicable legislation safeguarding of assetsadherence to management policies and promotion of ethical conduct.

Dedicated legal compliance cell ensures that the Company conducts its business withhigh standards of legal statutory and regulatory compliances. The Audit Committee reviewsthe internal control systems and procedures quarterly. The Company maintains a system ofInternal Financial Controls (IFC) designed to provide a high degree of assurance onvarious business areas such as Procure to Pay Inventory Order to Cash Fixed AssetsHuman Resource Legal Book Close and MIS regarding effectiveness and efficiency ofoperations reliability of financial controls and compliance with laws and regulations.This is done by recording the results of key manual controls status across the Company andalso retaining the back-up of the same in a common secured server for future reference.

BUSINESS RISK MANAGEMENT

Like any other industry Gabriel India faces several business risks. There is growingcompetition in the suspension industry which is putting emphasis on developing competitiveproducts with high performance quality and longer life at lower cost.

The Company's business is exposed to internal and external risks which are identifiedand revisited every two years. Some of the key risks identified are a threat to marketshare due to global competition strain on margins exports business growth and regulatorycompliance. A Risk Committee formed under the Chairmanship of the Chief Financial Officer(CFO) meets every quarter to review progress of actions planned and an update of the sameis presented to the Board. The Company has taken necessary actions for Risk mitigation inthe financial year 2018-19.

The key risks of the organization are:

Industry Risk

The Company has customer relationships with a large number of OEMs in all businesssegments – Passenger Cars Commercial Vehicles 2 - Wheelers and Railways which hassubstantially mitigated industry risk. Additionally the Company is continuously wideningits Exports and Aftermarket presence.

Competition Risk

The Company is working closely with customers to develop products collaboratively fortheir upcoming models. The Company has identified Cost Leadership as one of the keydrivers to combat competition and is working aggressively to retain its status as a lowcost manufacturer.

The Company is investing in automation and process upgradation thus strengtheningmargins in the process. The Company invested in renewable energy with the objective tomoderate costs in long term. Company is investing at locations close to customer'slocation to garner new businesses.

Procurement Risk

The Company has a rationalized vendor base to enhance purchasing efficiencies. TheCompany has successfully minimized excessive dependence on specific vendors. This wasachieved by way of strategic partnerships alternate sourcing and vendor consolidation forhigh-risk vendors.

Company continue to use eSourcing to get additional cost reductions from existing / newvendors on regular basis. Annual Cost reduction workshops are continuing to give newavenues to control the Raw Material costs.

Export Risk

The Company commissioned a full-fledged 2 - Wheelers R&D Centre at Hosur inDecember 2013 and strengthened its R&D capabilities in its Passenger Cars andCommercial Vehicles and Railways Business Unit at Pune. A modern R & D setup focusedon 4W & CVR BU is planned in FY 2019-2020 at Chakan.

The Company has set up a dedicated team to focus on Exports for the regions of SouthAsia ASEAN Middle East and Latin America. The Company is constantly working on upgradingit's manufacturing processes to meet higher product standards for Exports business.

Compliance Risk

The Company has adequate controls to ensure that all transactions are correctlyauthorised recorded and reported. Its internal control system is supplemented by anextensive array of internal audits reviews of findings and assessment of improvementopportunities across business processes systems and controls. The Company has establishedCompliance software across all plants & HO to ensure the same. The Company hasidentified additional risk of Statutory and EHS compliance at key vendors for continuousmonitoring. The Company has engaged external agency to work on this key initiative sinceFY 17-18.

FRAUDS REPORTED BY AUDITOR

During the year under review neither statutory Auditor nor secretarial auditorreported any instance of fraud in the Company.

EXPLANATION IN RESPOSE TO THE AUDITORS' QUALIFICATION

During the year under review neither Statutory Auditor nor Secretarial Auditorreported any qualifications reservations or adverse remarks in their respective Reports .

CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

During the year the Company has not entered into any contract/ arrangement/transaction with related parties which were either not at an arm's length or not in theordinary course of business and further could be considered material in accordance withthe Policy of the Company on materiality of related party transactions.

Hence there is no information to be provided in Form AOC-2 while the particulars ofall Related Party Transactions in terms of IND AS 24 are forming part of the financialstatements.

The Policy on Materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board may be accessed on the Company's website.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There were no significant and material orders passed by the regulators or courts havingcompetent jurisdiction which could have an impact on the business of the Company underthe going concern concept.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India on;

1. Meetings of the Board of Directors

2. General Meetings

3. Dividend

4. Reports of the Board of Directors

CORPORATE GOVERNANCE REPORT

A separate section on Corporate Governance is included in the Annual Report and theCertificate from the Company's Auditors confirming the compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed thereto.

MANAGEMENT DISCUSSION ANALYSIS

In terms of the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management's Discussion and Analysis is set out inthis Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the requirement of Section 135 of the Companies Act 2013 the Companyconstituted a CSR Committee and CSR Policy to track related transactions and initiatives.The detailed Policy is posted on the Company's website. Further a detailed report on theCSR activities inter- alia disclosing the composition of CSR Committee and CSR activitiesis detailed in Management Discussion Analysis and also as Annexure B.

The disclosure pertaining to the constitution of committee and number of meetings heldduring the years forms part of the corporate governance report which is a part of Annualreport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(m) of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 information relating to the foregoing matters is attached asAnnexure C to this Report.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has zero tolerance for sexual harassment at workplace. The Company has inplace a Prevention of Sexual Harassment Policy in line with the requirements of the SexualHarassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013.Through the Policy the Company has constituted a Committee and established a grievanceprocedure through Internal Complaints Committee for protection against victimization.

During the year under review 3 complaints of sexual harassment were raised the samewere disposed and appropriate action was taken within statutory timelines.

The Company is committed to provide a healthy environment to all its employeesconducive to work without the fear of prejudice and gender bias.

AUDITORS

Statutory Auditors

In 54th Annual General Meeting held on July 29 2016 M/s. B. K. Khare and Co.Chartered Accountants have been appointed as Statutory Auditors of the Company for aperiod of 5 years. M/s B K Khare & Co Chartered accountant has been continued asstatutory Auditor of the Company for the 4th year.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedKPRC & Associates a firm of Company Secretaries in practice to undertake theSecretarial Audit. The Self Explanatory report of the Secretarial Audit is attached asAnnexure D.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return as per Section 92 (3) of the Companies Act 2013 andRule 12 (1) of the Companies (Management and Administration) Rules 2014 in the Form MGT 9is available on Company's weblink:_ https://www.anandgroupindia.com/gabrielindia/investors/annual-reports/

PARTICULARS OF EMPLOYEES

The statement containing names of top ten employees in terms of remuneration drawn andthe particulars of employees as required under Section 197(12) of the Act read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate Annexures E and F respectively forming part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

1. In preparation of the annual accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures.

2. The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent to give a true and fairview of the state of affairs of the Company at the end of the financial year March 312019 and of the Profit of the Company for that period.

3. 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 / detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis.

5. The Directors have laid down internal financial controls followed by the Company andthat such financial controls are adequate and operating effectively.

6. The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENTS

Your Directors wish to thank the collaborators technology partners financialinstitutions bankers customers suppliers shareholders and employees for theircontinued support and co-operation.

For and on behalf of the Board

Anjali Singh

Chairperson

(DIN 02082840)

Place: New Delhi

Date: May 16 2019