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G G Automotive Gears Ltd.

BSE: 531399 Sector: Engineering
NSE: N.A. ISIN Code: INE493B01017
BSE 05:30 | 01 Jan G G Automotive Gears Ltd
NSE 05:30 | 01 Jan G G Automotive Gears Ltd

G G Automotive Gears Ltd. (GGAUTOMOTIVE) - Director Report

Company director report

To The Members

G. G. AUTOMOTIVE GEARS LIMITED.

Your Directors have great pleasure leasure in presenting 6TH ANNUAL REPORTalong with the Audited Balance Sheet and Profit and Loss Account for the year ended 31stMarch 2020.

1. FINANCIAL RESULTS:

(Rs. in INR)

Particulars Year ended
31.03.2020 31.03.2019
Earning before Interest Depreciation and Tax 89030550 99335534
Less: Finance Cost 28045687 23637667
Less: Depreciation 31295067 28762800
Profit before tax 29689796 46935067
Less: Current Tax 5005512 9000000
Earlier year Tax 2505135 --
Deferred Tax 4870308 1979642
Profit after tax for the year 17308841 35955426

2. FINANCIAL OPERATIONS & STATE OF AFFAIRS OF THE COMPANY:

During the year your Company has reported a total turnover of Rs. 561004023/-(Rupees fifty six crore ten Lacs four thousand and twenty three only). And the totalexpenditure incurred by the Company during the yearunder review amounted to Rs.535138548/-(Rupees fifty three crore fifty one lacs thirty eight thousand fivehundred and forty eight only). Profit after tax for the year amounted to Rs.17308841/-(One crore seventy three lacs eight thousand eight hundred and forty oneonly).

At the end of the current year considerable amount of material remained in inventorydue to world wide pandemic situation which resulted in lower revenue and profit for theyear.

Your Directors constantly putting there efforts to develop new products for domesticand export to improve revenue and profit of your company.

th 3. CHANGE IN THE NATURE OF THE BUSINESS

The company is engaged in the business of Manufacturing of Railway Gears & PinionsIndustrial Gear Industrial Gear Boxes etc. There has been no change in the business ofthe company during the financial year ended 31st March 2020.

4. FUTURE PROSPECTS OF THE COMPANY

To maintain our dominant presence in the Indian Railways and explore newer marketsglobally with key areas being East Asia & the America. There have beennumerousprojects undertaken under the R&D wing of the company that should reachfruition in the near future and complement our pursuit of growth.

5. WEBLINK OF ANNUAL RETURN

The company is having website i.e. https://ggautomotive.com/ and annual return of thecompany has been published on such website. Link of the same is given below:https://ggautomotive.com/annual-reports

6. TRANSFER TO RESERVES:

There are no transfers to any specific reserves during the year.

7. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY:

There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the year to which thefinancial year to which the financial statements relate and the date of this report.

8. DIVIDEND:

Your directors do not recommend dividend for the financial year ended 31stMarch 2020 with a view to conserve the resources for purchase of latest technology andequipments to make the shop floor world class.

9. CASH FLOW STATEMENTS:

As required under Regulation 34 of the Listing Regulations a Cash Flow Statement ispart of the Annual Report.

10. CONSOLIDATED FINANCIAL STATEMENT:

The Company does nothing have any subsidiaries as on 31st March 2020 andhence not required to publish Consolidated Financial Statements.

11. PUBLIC DEPOSITS:

During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with Companies (Acceptanceof Deposits) Rules 2014 (including any statutory modification(s) or re-enactment(s) forthe time being in force).

12. NUMBER OF BOARD MEETINGS AND ITS COMMITTEES:

During the year under review5(Five)Board Meeting were held.

13. COMMITTEES OF THE BORAD

The Company's Board has the following committees:

1. Audit Risk and Compliance Committee

2. Nomination and Remuneration Committee

3. Shareholders/Investors Grievance Committee (Stakeholders' Relationship Committee)

The said committee consists of 3 (Three) Members out of which 2 (Two) members areIndependent and 1 (one) is Promoter Director.

14. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND VIGIL

MECHANISM

Audit Committee comprises of following members:

Sr. no. Director Designation
1. Pravin Kumar Shishodiya Chairperson &Non E x Independent Director
2. Kennedy Ram Gajra Member & Managing Director
3. Shailendra Ajmera Member & Managing Director

The Company has established a vigil mechanism po to oversee the genuine concernsexpressed by the employees and other Directors.

15. MEETING OF COMMITTEES OF BOARD

During the year there were in total 4 Audit Committee Meetings 2 Nomination &Remuneration Committee and 4 Stakeholders Relationship Committee were held.

16. INDUSTRIAL RELATIONS:

Your Company has always considered its workforce as its valuable asset and continues toinvest th in their excellence and development programs. Your Company has taken severalinitiatives for enhancing employee engagement and satisfaction.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Shri Kennedy Ram Gajra Managing Director & CEO Mr. Anmol Gajra WholetimeDirector Shri Narayan Shrivas CFO and Ms. Divya Desai as a Company Secretary of theCompany are the Key Managerial Personnel of your Company in accordance with the provisionsof Sections

2(51) 203 of the Companies Act 2013 read with Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 (including any statutory modification(s) o rre-enactment(s) for the time being in force).

During the Year Mrs. Ruchi Sogani(DIN: 02805170) Non Executive Woman Director of thecompany has been reappointed as Non-Executive Independent Director for another term offive consecutive years with effect from 1st April 2020 to 31stMarch 2025.

During the year Mr. Shailendra Ajmera (DIN: 02138042) and Mr. Pravin KumarShishodiya(DIN: 03011429) has been reappointed in the 45th Annual GeneralMeeting held in the year 2019 as a Non Executive Independent Director of the company for asecond term of 5 consecutive years commencing from April 01 2019 to March 31 2024.

Mr. Kennedy Ram Gajra(DIN 02092206) has been reappointed as Managing Directing of thecompany for a period of three years commencing from July 01 2018 to June 30 2021 whoseratification of appointment is done by the members in the 45th AGM held in theyear 2019.

During the year there is no change in the Composition of Key Managerial Personnel ofthe Company except resignation of Ms. Shreya Thombre as a Company Secretary w.e.f. 25thOctober 2020 and appointment of Ms. Divya Desai as a Company Secretary cum ComplianceOfficer w.e.f. 20th January 2020.

Disclosure Relating to Remuneration of Directors Key Managerial P ersonnel andparticulars of Employees:

The remuneration paid to the Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force).

The Managing Director & CEO of your Company does not receive remuneration from anyof the subsidiaries of your Company.

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect ofDirectors/ employees of your Company is set out in Annexure V to this report.

18. LISTING OF SHARES:

The Equity Shares of the Company arelisted on the BSE Limited . However the tradingof Shares continues to remain under suspension by BSE. Your company is regularly compliantwith all the listing regulations and waiting for revocation o f suspension Also companyhas paid the listing fees to the Stock Exchange i.e. Bombay Stock Exchange.

19. EXTRACT OF ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureII and is attached to this Report.

20. DIRECTORS RESPONSIBILITY STATEMENT:

The Board of Directors hereby confirms:

i) That in the preparation of the annual accounts the applicable accounting standardhad been followed along with proper explanation relating to material departures.

ii) That the 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 and of the Profit or Loss of the Company for that period.

iii) That the Directors have taken proper and sufficient care for the maintenances ofadequate accounting records in accordance with the provision of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) That the Directors have prepared the Annual accounts on a going concern basis.

v) That the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi) That the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operating.

21. DECLARATION OF INDEPENDENT DIRECTORS:

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(7) of the Companies Act 2 so asto qualify themselves to be appointed as Independent Directors under the provisions of theCompanies Act 2013 and the relevant rules.

22. POLICY ON DIRECTORS APPOINTMENT REMUNERATION & BOARD

PERFORMANCE:

During the year the Board adopted a formal mechanism for evaluating its performanceand as well as that of its and individual Directors including the Chairman of the Board.The exercise was carried out through a structured evaluation process covering variousaspects of the Boards functioning such as composition of the Board & committeesexperience & competencies performance of specific duties & obligationsgovernance issues etc. Separate exercise was carried out at to evaluate the performance ofindividual Directors including the Chairman who were evaluated on parameters such asattendance contribution at the meetings the and otherwise independent judgmentsafeguarding of minority shareholders interest etc.

The evaluation of the Independent Directors was carried out by the entire Board andthat of the Chairman and the Non-Independent Directors were carried out by the IndependentDirectors.

The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company. In the opinion of the BoardIndependent Directors are of high integrity with relevant expertise and experience.

23. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

1. The meetings of the Board of Directors of the Company during each financial year areorganized at different manufacturing plants of the Company and every time a visit of therespective plant is organized for the Directors including Independent Directors alongwith a direct interaction with heads of production processes to provide a brief idea tothe Directors of the production processes and operations of the Company.

2. An elaborated note on business operations with regard to the perations and financialposition of the Company as at the end of each quarter is circulated to the Board memberswith the Agenda of each Board Meeting and also presented at the meeting in the form of apower point presentation. Thesame is duly deliberated upon at the Meeting in presence ofheKey Managerial Personnel who answer the queries of the Directors if any arising out ofsuch reports to the satisfaction of the Directors.

3. The Company strives towards updating the Directors of any amendments in laws rulesand regulations as applicable o n the Company through various representations at the BoardMeeting(s) in consultation with the Statutory Auditors Internal Auditors and theSecretarial Auditors of the Company likewise the Companies Act SEBI Laws ListingAgreement and such other laws and regulations as may be applicable.

4. The Company has framed Code of Conduct and Ethics and Code of Conduct for preventionof Insider Trading respectively which all the Directors need to comply with. The saidcode(s) of conduct are placed before the Board for review after a period of every 2 (Two)years so as to familiarize the Directors with the codes and ensure that the said code(s)are in conformity with the latest laws rules and regulations.

Disclosure: This familiarization process is uploaded on the official website of theCompany i.e. www.ggautomotive.com

Review:

The familarisation process shall be reviewed at regular intervals to analyse if thereis a need to amend the same as may be deemed necessary to keep the Directors of theCompany informed of the operations of the Company vis-a-vis the latest developmentsvis-a-vis the laws and regulations as applicable on the Company for the time being inforce

24. ANNUAL EVALUATION BY THE BOARD

In compliance with the Companies Act 2013 and Regulation 17 of the ListingRegulations the performance evaluation of the Board and its Committees were carried outduring the year under review.

25. STATUTOY AUDITORS:

M/s. Mukesh & Associates Chartered Accountants (FRN: 106599W) appointed asStatutory Auditors of the Company in the 45th Annual General Meeting held on29th August 2019 hold office till the conclusion of the 50 Annual General Meeting.

26. SECRETARIAL AUDITORS

The Company has appointed M/s. H.S. Associates Company Secretaries as SecretarialAuditors of the Company to carry out the Secretarial Audit for the Financial Year 2020-21and to issue Secretarial Audit Report as per the prescribed format under rules in terms ofSection 204(1) of the Companies Act 2013 and Rule 9 of the Companies (AppointmentRemuneration of Managerial Personnel) Rules 2014.

27. SECRETARIAL AUDIT REPORT:

The Board of Directors of the Company has appointed M/s. HS Associates PracticingCompany Secretary; to conduct the Secretarial Audit and their Report on Company'sSecretarial Audit is appended to this Report as Annexure I.

Auditors observation:

1. As on year ended 31st March 2020 1147398 (Eleven Lakhs Forty Seven Thousand ThreeHundred and Ninety Eight) Equity Shares of Rs. 10 each constituting 47.19% held byPromotes are yet to be demated as required pursuant to Regulation 31(2) of LODR.

2. During the year there was transaction of transfer of shares among Promotershowever the Disclosure pursuant to Regulation 29(2) of SEBI (Substantial Acquisition ofShares And Takeovers) Regulations 2011 were submitted with delay.

Directors comment:

1. Demat process of physical shares are in process.

2. The disclosure got delayed inadvertently.

28. COST AUDITORS

The provision of Cost Audit as per section 148 of Companies Act 2013 and rule thereunder is not applicable to the company.

29. COMMENTS ON AUDITOR'S REPORT:

There are no q ualifications reservations or adverse remarks or disclaimers made byMukesh & Associates Statutory Auditors in their report. The Statutory Auditors haveno reported any incident of fraud to the Audit Committee of the Company in the year underreview.

30. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013

There are no Loans Guarantees or Investment made by the Company under Section 186 ofthe Companies Act 2013.

31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

The particulars of contracts or arrangements with related parties referred to inSection 188(1) as prescribed in Form AOC 2 of the rules prescribed under Chapter IXrelating to Accounts of Companies under the Companies Act 2013 is appended as- AnnexureIV.

All Related Party transactions are presented to the Audit Committee and the Board. Astatement of all related party transactions is presented before the Audit Committeespecifying the nature value and terms and conditions of the transactions.

32. CONSERVATION OF ENERGY TECHNOLOGY & FOREIGN EXCHANGE:

Information on conservation of energy technology absorption foreign exchange earningsand out go is required to begiven pursuant to provision of Section 134 of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is annexed hereto markedAnnexure III and forms part of this report.

33. CREDIT RATING

The company has been rated by Infomerics Valuation and Rating Pvt. Ltd accredited bySecurities and Exchange Board of India (SEBI) and Reserve bank of India(RBI) forbankfacility and SME. The company has been awarded with ‘IVR BBB-'for bank facility andSME Rating-‘IVR SME 2'.

34. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

The Management's Discussion and Analysis Report for the year under review asstipulated under Regulation 34 of the SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 is annexed under Annexure VI to this report.

35. SUBSIDIARIES/ JOINT VENTURES & ASSOCIATE COMPANY'S:

The Company operates as a single entity with no subsidiaries or Joint Venture orAssociate Companies as explained within the meaning of the Companies Act 2013. Since thecompany has no Joint Venture or Associate companies the company is not required to giveinformation in AOC-1 as required under Companies Act 2013.

36. INTERNAL AUDITORS:

As per section 138 of the Companies Act 2013 the Company has appointed M/s S.N.Gadiya& Co. internal auditors for the year to 2020-21 to conduct the internal auditand to ensure the adequacy of the Internal controls adherence to Company's policies andensure statutory and other compliance through periodical checks and reviews.

37. DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT /UNCLAIMED SUSPENSE ACCOUNT.

As per Schedule V Part F of Listing obligation and disclosure requirements Companydoes not require to open DEMAT suspense account or unclaimed suspense account as Companyhas not declared any dividend for past 7 years.

38. CORPORATE GOVERNANCE REPORT.

As per Schedule V Part C of Listing obligation and disclosure requirements theprovision of corporate governance is not applicable to the Company as equity share capitalof the company does not exceed 10 crores and net worth of the Company does not exceed 25Crore as on last previous Financial Year.

Note As per Schedule V Part C [(10) (i)] of Listing obligation and disclosurerequirements Company does not require to take certificate of ‘Non- Disqualificationof Director' from practicing Company Secretary.

39. INTERNAL FINANCIAL CONTROL:

The Company has in place adequate internal financial Controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

40. COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.

41. PARTICULARS OF EMPLOYEES:

There are no employees in the Company who if employed throughout the financial yearwere in receipt of remuneration whose particulars if so employed are required beincluded in the report of the Directors in accordance with the provisions of Rule 5(2) andRule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

42. DETAILS OF MATERIAL AND SIGNIFICANT ORDER ASSED BY THE REGULATORS COURTS ANDTRIBUNALS

No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.

43. CORPORATE SOCIAL RESPONSIBILITY

As per the regulatory requirement of CompaniesAct 213 and Rules framed thereunderCorporate Social Responsibility is not applicable to the company. As such CSR Committeehas not been formulated.

44. RISK MANAGEMENT POLICY

Risk Management is the process of identification assessment and prioritization of riskfollowed by coordinated efforts to minimize monitor and mitigate the probability and/orimpact of unfortunate events or o maximize the realization of opportunities. The companyhas laid down a comprehensive Risk assessment and minimization procedure which is reviewedby the Board from time to time. These procedure are reviewed to ensure that executivemanagement controls risk through means of properly defined framework.

45. WHISTLE BLOWER POLICY/VIGIL MECHANISM:

The Company has established a vigil mechanism for Directors and employees to reporttheir genuine concerns details of which h ave been available on the Company's website:https://www.ggautomotive.com/whistleblower-policy. No instance under the whistle Blowerpolicy was reported during the financial year 2019-2020.

46. DISCLOSURE UNDER SEXUAL HARASSMENT ACT:

The company has complied with the provision of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 20 20132013 relating to the constitution ofInternal Complaints Committee and other applicable provisions. During the financial yearunder review the Company has not received any complaints of sexual harassment from any ofthe employees of the Company.

47. POLICIES

The Company seeks to promote highest levels of ethical standards in the normal businesstransaction guided by the value system. The SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates formulation of certain policies for ListedCompanies. The Policies are reviewed periodically by the Board and are updated based onthe need and compliance as per the applicable laws and rules and amended from time totime. The policies are available o n the official website o f the Company atwww.ggautomotive.com.

48. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for the support which theCompany has received from its shareholders promoters lenders business associatesincluding distributors vendors and customers the press and the employees of the Company.