The Directors of your Company have pleasure in presenting their 24th Annual Report onthe affairs of the Company together with the Audited Accounts of the Company for the yearended 31st March 2017
FINANCIAL RESULTS AND ANALYSIS
The Financial results for the year are as under: -
| || ||(Rs. in crs) |
|Particulars ||For the year ended 31st March 2017 ||For the year ended 31st March 2016 |
|Net Revenue from Operations (Gross) ||513.41 ||508.52 |
|Other Income ||2.91 ||0.42 |
|Profit Before DepreciationInterest Tax and ||83.35 ||82.77 |
|Interest and Financial Charges ||12.52 ||16.29 |
|Profit before Depreciation and Tax ||70.83 ||66.48 |
|Depreciation ||23.94 ||27.17 |
|Profit before Tax ||46.89 ||39.31 |
|Tax Expense || || |
|- Current ||18.52 ||15.65 |
|- Deferred ||(1.23) ||(2.30) |
|Profit after tax ||29.60 ||25.96 |
|Earnings Per Share || || |
|-Basic ||13.79 ||17.12 |
|-Diluted ||13.79 ||17.12 |
FINANCIAL PERFORMANCE AND REVIEW OF OPERATIONS:
Net revenue from operations increased by ` 4.89 Crs. to ` 513.41 Crs. for the Fiscal2017 from ` 508.52 Crs. for the Fiscal 2016 or an increase of 0.96%. Export salesdecreased by ` 27.81 Crs. to ` 233.98 Crs. for the Fiscal 2017 from ` 261.79 Crs. for theFiscal 2016. Domestic net revenue from operations increase from ` 246.73 Crs. to ` 279.43Crs. showing and increase of 13.25 %
The company earned Profit before Tax of ` 46.89 Crs. during the year under reviewagainst ` 39.31 Crs. for the Fiscal 2016 showing an increase of 19.28%.
Profit after tax increased by ` 3.64 Crs. to ` 29.60 Crs. for the Fiscal 2017 from `25.96 Crs. for the Fiscal 2016 or an increase of 14.02 %.
RESOURCE UTILISATION: Fixed Assets
The net tangible assets (including capital work in progress) as at 31st March 2017were ` 134.27 Crs. as against previous years fixed assets of` 147.36 Crs.
The net current assets as on 31st March 2017 were ` 144.73 Crs. as against ` 18.54Crs. in the previous year.
INITIAL PUBLIC OFFER:
During the year under review the Company successfully completed its Initial PublicOffer of 6300000 Equity shares of ` 10/- each for cash at a premium of ` 197/- per shareaggregating to ` 130.41 Crs. The issue opened on 14th
September and closed on 16th September 2017. Pursuant to this Initial Public Issuethe share Capital of the Company increased from ` 15.16 Crs. to Rs 21.46 Crs.
The Equity shares of the Company got listed on BSE Limited and National Stock Exchangeof India Limited w.e.f 26th September 2016.
In view of the ongoing expansions and to conserve the funds for expansions yourDirectors do not recommend any Dividend for the Financial Year 2016-2017.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has one subsidiary namely GNA Axles Inc. incorporated in Michigan USA. Thesubsidiary is yet to start its business operations. A statement pursuant to section 129(3)in form AOC 1 is enclosed as an Annexure I to this Report.
The Company does not have any associate or joint venture Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared after consolidating theaccounts of the Subsidiary Company M/s GNA Axles Inc. are provided in this Annual Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR UNDER REPORTING AND DATE OF REPORT:
There have been no material changes and commitments which can have an effect on theposition of the Company which have occurred between the end of the financial year underreview and the date of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Your company has formulated its Corporate Social Responsibility policy required undersection 135 of the Companies Act 2013. The Company has identified following thrust areasfor CSR:
1. To promote and help in providing healthcare and preventive healthcare facilities tothe people.
2. To promote Education and help in delivering quality education to the society andstudents.
3. To promote the rural sports nationally recognized sports and Olympic sports.
4. To take initiative in eradication of hunger malnutrition sanitation.
5. To promote women empowerment
6. Any other project / programme pertaining to activities listed in Schedule VII of theCompanies (Corporate Social Responsibility) Rules 2014 and amendments thereto.
The disclosures under Section 134(3) of the Companies Act 2013 read with Rule 9 ofCompanies (Accounts) Rules2014 i.e. Annual Report on CSR activities for Financial Year2016-17 is attached herewith in Annexure II.
The Board of Directors of the Company had formulated and approved the Risk ManagementPolicy of the Company under the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015. The objective of Risk Management at GNA
Axles Limited is to create and protect shareholder value by minimizing threats orlosses and identifying and maximizing opportunities. An enterprise-wide risk managementframework is applied so that effective management of risks is an integral part of everyemployees job.
The Risk Management Policy of the Company may be accessed on the Companys Websiteat the link: http://gnagroup.com/wp-content/uploads/2015/09/Risk-Management-Policy.pdf
INTERNAL FINANCIAL CONTROL:
The Internal Financial Control systems of the Company with placed and are reference tofinancial commensurate with the size and nature of operations of the Company. TheStatutory Auditors report on the internal controls as required under section 143 of thefinancial Companies Act 2013 forms part of the Independent Auditors Report as Annexure B.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:
The Company has not entered into any contract or arrangement with related partiesduring the period under review expect payment of remuneration to the Executive Directors.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
The Company has not given any loan provided any guarantee provided any security ormade any investments u/s 186 of the Companies Act during the financial year 2016-2017.
In accordance with provisions of the Articles of Association of the Company Mr.Jasvinder Singh Mr. Ranbir Singh and Mr. Gurdeep Singh Directors of your Company retiresby rotation at the conclusion of the forthcoming Annual General Meeting and beingeligible offers themselves for re-appointment. The Board of Directors recommends theirappointment for consideration of the members at the forthcoming Annual General Meeting.
Pursuant to the provisions of the Companies Act 2013 Mr. Dilsher Singh Bhatti AirCmde. (Retd.) Shailindra Singh Kaushik Mr. Manbhupinder Singh Atwal Mr. Vikas Uppal andMrs. Geeta Khanna and Mr. Anish Kumar Dhingra were appointed as Independent Directors inthe 22nd Annual General Meeting who are not liable to retire by rotation and whose termends at the conclusion of the ensuing Annual General Meeting. The Board of Directors inits meeting held on 5th May 2017 had reappointed Air Cmde. (Retd.) Shailindra SinghKaushik Mr. Manbhupinder Singh Atwal Mr. Vikas Uppal Mrs. Geeta Khanna and Mr. AnishKumar Dhingra as Independent Directors of the Company. Their reappointment as IndependentDirectors for a term of five years starting from June 10 2017 to June 9 2022 is to beapproved by the members in the ensuing Annual General Meeting.
During the year under review Mr. Dilsher Singh Bhatti resigned from the Board ofDirectors of the Company w.e.f 9th March 2017. Mr. Ajit Singh was appointed as anAdditional Independent Director of the Company by the Board of Directors in its meetingheld on 5th May 2017. His appointment as Independent Director of the Company for a termof five years starting from 24th Annual General Meeting till the conclusion of 29th AnnualGeneral Meeting is to be approved by the members in the ensuing Annual General Meeting.
Pursuant to provisions of Section 203 of the Companies Act 2013 the Company hasdesignated below mentioned persons as KMPs:-
|WholeTime Key Managerial Designation || |
|Personnel of the Company || |
|Gursaran Singh ||Managing Director (MD) |
|Jasvinder Singh ||Jt. Managing Director (Jt. MD) |
|Ranbir Singh ||Whole-Time Director (WTD) & CEO |
|Rakesh Kumar ||Chief Financial Officer (CFO) |
|Gourav Jain ||Company Secretary (CS) |
There has been no change in the Key Managerial Personnel of the Company during the yearunder review.
Declaration under Section 149(6):
The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and read with the relevant rules.
Companys Policy relating to the Directors appointment Payment of remunerationand other matters related thereto.
The Board of Directors of the Company had formulated and approved the Nomination andRemuneration Policy of the Company which includes the criteria determining thequalifications and other matters as provided under section 178(3) of the Companies Act2013.
The Nomination and Remuneration Policy of the Company is annexed hereto and forms partof this report as Annexure III.
Familiarisation programmes for Board Members:
The Board members are from time to time provided with necessarydocuments/policies/internal procedures to get them familiar with the practices of theCompany. The business strategies performance global developments legal& otherupdates compliance reports and other relevant information/reports etc. are beingperiodically provided to the Board of Directors.
The Company has put in place the policy for performance evaluation of the IndividualDirectors of the company and the Board as a whole including the Chairman of the Company.
The meeting of the Independent Directors of the Company for the year 2016-2017 was heldon 19th January 2017 to evaluate the performance of the Non Independent Directors of theCompany the Chairman of the Company and Board as a whole. The evaluation was done bydiscussing the performance of the Individual Directors and the Board as a whole.
AUDITORS AND AUDITORS REPORT:
a. Statutory Auditors:
As per the provisions of section 139 of the Companies
Act 2013 the term of M/s G S Syal & Company Chartered Accountants Jalandhar asStatutory Auditors of the Company ends at the conclusion of the 24th Annual GeneralMeeting of the Company.
The Board of Directors of the Company upon the recommendations of the Audit Committeeat its meeting held on 5th May2017 have appointed M/s Harish & Company CharteredAccountants Jalandhar as the Statutory Auditors of the Company for a term of 5 yearscommencing from the conclusion of the 24th Annual General Meeting till the conclusion of29th Annual General Meeting of the Company subject to the approval of the shareholders inplace of the retiring auditors M/s G S Syal & Company Chartered AccountantsJalandhar.
The Company has received written consent and a certificate from M/s Harish &Company Chartered Accountants that they satisfy the criteria provided under section 141of the Companies Act 2013 and if appointed their appointment will be within limitsprescribed under section 139 of the Companies Act 2013.
Your Directors recommend the appointment of M/s Harish & Company CharteredAccountants Jalandhar as Statutory Auditors of the Company to hold office from theconclusion of the 24th Annual General Meeting upto the Conclusion of the 29th AnnualGeneral Meeting of the Company.
Further the Statutory Auditors of the Company M/s G S Syal & Company havesubmitted Auditors Report on the accounts of the Company for the Financial Yearended 31st March 2017. The Auditors Report is self explanatory and do not call forany comments.
b. Secretarial Auditor:
M/s H.K & Associates Practicing Company Secretaries were appointed as SecretarialAuditor for the year 2016-17 The Report of the Secretarial Auditor in form no MR-3 isannexed to this Report. The Secretarial Audit Report is self explanatory and do not callfor any comments. The Secretarial Audit Report forms part of this report as Annexure IV.
During the Financial Year 2016-17 the Board met 4 times i.e. on 23rd May 2016 17thSeptember 2016 1st November 2016 and 19th January 2017.
AUDIT COMMITTEE DISCLOSURES: Composition of Audit Committee:
The Audit Committee comprises of three directors i.e. Air Cmde. (Retd.) ShailindraSingh Kaushik Independent Director Mr. Jasminder Singh Johal Independent Director andMr. Ranbir Singh Executive and Non Independent Director. Air Cmde. (Retd.) ShailindraSingh Kaushik is the Chairman of the committee and Mr. Gourav Jain is Secretary of theCommittee.
Vigil Mechanism and Whistle Blower:
Pursuant to provisions of section 177 (9) of the Companies Act 2013 the Company hasestablished a "Vigil Mechanism" incorporating Vigil Mechanism Policy which alsoincorporates the Whistle Blower Policy in terms of rule 7 of the Companies (Meetings ofBoard and its Powers) Rules 2014 for employees and Directors of the Company forexpressing the genuine concerns of unethical behaviour frauds or violation of the codesof conduct. The Company has also provided adequate safeguards against victimization ofemployees and Directors who express their concerns. The Policy on Vigil Mechanism asapproved by the Board of Directors can be accessed on the Companys website at thelink: http://gnagroup.com/wp-content/uploads/2015/09/VIGIL-MECHANISM-POLICY.pdf
A Separate section on Corporate Governance forms an integral part of this Annual Reportof the Company.
The Statutory Auditors of the Company have given their certificate regarding thecompliance of Corporate Governance as stipulated under the SEBI (LODR) Regulations 2015and the same is annexed to the report on Corporate Governance.
ENERGY CONSERVATION care has been taken for the TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS & OUTGO:
Conservation of energy has been a major area of emphasis of your Company and everyeffort is made to achieve the optimum utilization of energy in carrying out themanufacturing processes. Particulars with respect to conservation of energy and otherareas as per section 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 are provided in Annexure V.
MANAGEMENT DISCUSSION & ANALYSIS
Pursuant to provisions of Regulation 34(2) of SEBI listing obligations disclosurerequirement Regulation 2015 a report on Management Discussion and Analysisis annexed separately and forms an integrated part of this Annual Report
The extract of Annual Return pursuant to the provisions of Section 134 (3) (a) of theCompanies Act 2013 is furnished in Annexure (Form MGT 9) and is attached to this Reportas Annexure VI.
HUMAN RESOURCES/INDUSTRIAL RELATIONS:
For your Company its Human Resources are its most important assets. It has been theendeavour of the Company to attract and retain talent. Performance management is the keyword for the Company. The Industrial relations have been peaceful and harmonious in boththe plants of the Company during the year under review. During the year around 1049personnel were employed by the Company.
PERSONNEL & RELATED INFORMATION:
The disclosures required under section 5(1) 197(12) of the Companies Act 2013 and Rule5(2) and 5 (3) of the Companies (Appointment & Remuneration of Managerial Personnel)
Rules 2014 are annexed as Annexure VII hereto and forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act 2013 the Directors of the companyconfirm that:
1. In the preparation of the annual accounts the applicable
Accounting Standards have been followed;
2. Appropriate accounting policies have been selected and applied consistently andhave made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for that period;
3. Proper and maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safe guarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis.
5. The Board of Director of the Company has Laid down internal financial controls to befollowed by the Company and such internal financial controls are adequate and wereoperating effectively.
6. Devised proper systems to ensure compliance with the provisions of all applicablelaws and those systems were adequate and operating effectively.
Your directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details of joint venture or associate company.
2. Issue of equity shares with differential rights to dividend voting or otherwise.
3. Details relating to the deposits covered under Chapter V of the Companies Act 2013.
4. No significant/material orders have been passed by any Regulator/Court /Tribunalwhich could impact the going concern status & future operations of the Company.
5. No change in nature of Business of the Company.
Your Directors are pleased to place on record their appreciation to the ShareholdersGovernment Authorities Financial Institutions Bankers and other Statutory Authoritiesfor their continued and valuable support to the Company.
Your Directors express their deep gratitude and appreciation to the employees at alllevels for their continued and devoted services and sincere efforts. The Company feelsconfident of continued cooperation and efforts from them in future also
| ||For and on Behalf of the Board |
|Ranbir Singh ||Gursaran Singh |
|CEO & Wholetime Director ||Managing Director |
|Date: 5th May 2017 || |
|Place: Mehtiana || |