for the Year Ended March 31 2018:
Your Directors have immense pleasure in presenting the 44th Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended March31 2018:-
1. Financial Results : The Summary of financial results is given below:-
| || ||(Rs. in Lacs) |
| ||Year ended March 31 2018 ||Year ended March 31 2017 |
|Revenue from Operations ||13416.45 ||13475.27 |
|Profit/(Loss) before Depreciation Interest & Tax ||509.22 ||30.52 |
|(PBDIT) & before exceptional items || || |
|Less: Depreciation & Amortization ||470.54 ||433.43 |
|Profit/(Loss) before Interest and Taxes (PBIT) ||38.68 ||(402.91 |
|Interest & Financial expenses ||468.61 ||541.62 |
|Profit/(Loss) before Tax (PBT) ||(429.93) ||(944.53) |
|Less: - Provision for Tax || || |
|- Current ||00.00 ||00.00 |
|- Deferred Tax ||56.36 ||359.41 |
|Profit/(Loss) after Tax (PAT) for the year ||(373.57) ||(585.12) |
|Add/Less : Other Comprehensive Income ||(7.00) ||(37.61) |
|Total Comprehensive income for the year ||(380.57) ||(622.73) |
|Earnings per Share (Rs.) || || |
|--Basic & Diluted ||(2.57) ||(04.03) |
|Dividend per Share (Rs.) ||- ||- |
Highlights/Performance of the Company:
The first quarter of current financial year of the Company was negatively impacted dueto the implementation of Goods & Service Tax (GST) causes to temporary slowdown in thebusiness of the Company which had also impacted the bottom line of the company to quiteextent. However after the initial hiccup of the implementation period of Goods &Services Tax (GST) the business of the Company has recovered all its lost ground duringthe remaining periods of the Current financial year which was clearly reflected in theabove said financial of the current year as compared to previous year.
The revenue from operations (adjusted with Ind AS) has almost remains the flat at Rs.13416.45lacs as compared to revenue from operations of Rs.13475.27 lacs of the previous year;this performance seems quite satisfactory keeping in mind the financial performance ofthe company during first quarter due the implementation of Goods & Services Tax(GST).
However with the onetime other income of Rs.120.00 lakhs the total other income wasRs.178.50 Lakhs as compared to previous year's other income of Rs.26.80 lakhs. OtherIncome also includes foreign exchange gain (net) of Rs.16.80 lakhs as compared toprevious year's loss on foreign exchange rate fluctuations of Rs.11.53Lakhs Interestincome on bank deposits & others was at Rs.13.35 Lakhs as compared to Rs.16.28 Laks ofprevious years.
Due to slight improvements in the overall business of the Company coupled with theimplementation of Goods & Services Tax (GST) your company has earned profit beforedepreciation & amortization Interest & taxes (PBDIT) of Rs. 509.22 Lakhs(3.80% of Revenue from operations) as compared to previous year's profit beforedepreciation & amortization Interest & taxes (PBDIT) of Rs. 30.52 Lakhs (0.23% ofRevenue from operations) shows an improvement in the overall financial performance of theCompany. After higher provision for depreciation and amortization of Rs.470.54 lakhs(previous year of Rs.433.43 lakhs) Interest & financial 10 expenses of Rs.468.61lakhs (previous year of Rs.541.62 lakhs) the company has earned a loss before taxesof Rs.429.93 lakhs as compared to the previous year's loss before taxes (PBT) ofRs.944.53 lakhs.
After providing a provision for taxation deferred tax of Rs.(56.36) lakhs (previousyear Rs.(359.40) lakhs) there was a loss of Rs.373.57 lakhs as compared to previousyear's loss after tax of Rs.585.12 lakhs. The Total comprehensive Income for theyear was (Rs.380.57 Lakhs) as compared to (Rs.622.73 Lakhs) of previous year.
2. Foreign Exchange Earnings:
During the year your company has paid the net foreign exchange and paid net foreignexchange of Rs.92.91 lakhs (net foreign exchange earner in previous year ofRs.20.86 Lakhs) after taking into consideration of foreign exchange payments of Rs.679.19Lakhs (previous year Rs.554.50 Lakhs) on account of foreign exchange outgo mainlyfor payment of interest & repayment of foreign currency term loan.
The Company has retained its ISO/TS 16949 certifications for its QualityManagement System.
During the period under review the Board has decided not to recommend any dividend forthe financial year 2017-2018.
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 ended 31stMarch 2018 is annexed hereto.
9. Material Changes and Commitments:
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 share capital of the Company as at March 31 2018 is Rs. 7.25 Crores. TheCompany currently has no outstanding shares issued with differential rights sweat equityor ESOS.
11. Subsidiary Joint Venture and Associate Companies:
During the year company's subsidiary "Bluebasic India Limited" has ceased tobe the subsidiary of the Company and your company has sold its entire shareholding in"Bluebasic India Limited". Your Company does not have any Joint Venture &Associate Company.
The company does not have any `material subsidiary' whose net worth exceeds 20% of theconsolidated net worth of the holding company in the immediately preceding financial yearor has generated 20% of the consolidated revenue during the previous financial year.
12. Names of the Companies which have become Subsidiary Joint Ventures or AssociateCompanies during the year:
During the year under review the Company has sold its entire shareholding in itsSubsidiary Company "Bluebasic India Limited Ludhiana". This subsidiary wasmainly to cater to all kinds of ad blue solvents and coolants.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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 Mrs. Dalvinder Kaur Ryait Executive Directorretires by rotation at the at the ensuing Annual General Meeting and being eligibleoffers herself for re-appointment.
Mr. Jasbir Singh Bir ceased to be a Director of the Company w.e.f May 30 2018. TheBoard places on record its appreciation towards valuable contribution made by Mr. JasbirSingh Bir during his tenure as a Director of the Company.
The Board of Directors on the recommendation of the Nomination and RemunerationCommittee has appointed Mr. Avinash Sharma as an Additional Independent director. He willhold office up to the ensuing Annual General Meeting. His appointment as an IndependentDirector will be subject to approval of shareholders.
As on the date of this report the Company's Board consists of the followingIndependent Directors:
Mr. Upkar Singh Ahuja.
Mr. Iqbal Singh.
Mr. Avinash Sharma.
Mr. Sharwan 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 the independent directors possess appropriate balance ofskills experience and knowledge as required.
The Policy on Remuneration for Directors Key Managerial Personnel and other employeesis attached herewith marked as "Annexure II "
A brief note on Director retiring by rotation and eligible for re-appointment isfurnished in the Notice.
19. 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 Whole Time Director |
|Mr. Surinder Singh Ryait ||- Managing Director |
|Mr. Neeraj Tuli ||- Chief Financial Officer |
|Ms. Amninder Kaur ||- Company Secretary |
|Mr. Gajinder Singh Bains ||- Chief Executive Officer (resigned on January 21 2018) |
20. 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:
|Sr. No. ||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. |
21. Number of Meetings of the Board:
The Board met four 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.
22. 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.
23. 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 Chairman ||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. |
| ||*Mr. Jasbir Singh Bir || |
| ||Mr. Jasbir Singh Ryait || |
| ||Mr. Iqbal Singh || |
| || ||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. |
|Nomination and Remuneration Committee ||*Mr. Jasbir Singh Bir ||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. The Nomination and Remuneration Committee has framed the Nomination and Remuneration Policy. A copy of the policy is appended as Annexure II |
| ||Chairman || |
| ||Mr. Sharwan Sehgal || |
| ||Mr. Upkar Singh Ahuja || |
|Stakeholders Relationship Committee ||Mr. Sharwan Sehgaal ||The committee reviews and ensures redressal of investor grievances. |
| ||Chairman || |
| ||Mr.Upkar Singh Ahuja ||The committee noted that all the grievances of the investors have been resolved during the year. |
| ||*Mr. Jasbir Singh Bir || |
|Business Development and Risk Management Committee ||Mr. Surinder Singh Ryait ||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. |
| ||Chairman || |
| ||Mr.Jasbir Singh Ryait || |
| ||Mr. Gajinder Bains** || |
* Resigned w.e.f 30th May 2018
**Resigned w.e.f 21st January 2018.
24. 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) subject to ratification of their appointment every year.However pursuant to the Companies (Amendment) Act 2017 the requirement of ratificationof appointment of the Auditors on yearly basis has been dispensed 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.
25. 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.
26. Secretarial Audit:
Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Bhupesh Gupta & Associates Practising CompanySecretaries were appointed as the Secretarial Auditor for auditing the secretarial recordsof the Company for the financial year 2017-18.
The Secretarial Auditors' Report in Form No. MR-3 as required under the Act for thefinancial year ended March 31 2018 is annexed hereto. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditors. The Report forms part ofthis report as Annexure III.
27. 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.
29. 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.
30. 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.
31. 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 No.46 to the Financial Statements whichsets out 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
32. Employee Strength:
The total number of permanent employees on the rolls of the Company was 967 ason March 31 2018 (1094 was in the previous year).
33. 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.
34. 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.
35. 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 FairDisclosure") and the Code of Conduct to regulate monitor and report trading byemployees and other connected persons ("Code of Conduct") as approved by theBoard on 14.05.2015 are in force by the Company. The objective of this code is to protectthe interest of shareholders at large to prevent misuse of any price sensitiveinformation and to prevent any insider trading activity by dealing in shares of theCompany by its Directors Designated Employees and Specified Persons. The Company alsoadopts the concept of Trading Window Closure to prevent its Directors DesignatedEmployees and Specified Persons from trading in the securities of the Company at the timewhen there is unpublished price sensitive information. The code has also been placed onthe website of the Company www.gsgroupindia.com.
36. 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.
37. 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.
38. 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.V to this report. The same is alsoavailable on the website of the Company www.gsgroupindia.com.
39. Directors' Responsibility Statement:
Your Directors confirm:
that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
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 2018 and of the loss of the Company for the financial year;
i. that your Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
ii. that your Directors have prepared the annual accounts on a going concern basis;
iii. that your Directors have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively; and
iv. that your Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
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 dealers distributors of the Company for their achievements in thefield of sales and service and to suppliers and vendors and other business associates fortheir 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 || |
|Date: 23.08.2018 ||Sd/- ||Sd/- |
|Place: Ludhiana ||Jasbir Singh Ryait ||Surinder Singh Ryait |
| ||Chairman ||Managing Director |
| ||DIN:00104979 ||DIN:00692792 |