Your Directors have immense pleasure in presenting the 43rd Annual Report onthe business and operations of the Company and the accounts for the Financial Year ended31st March 2017:-
1. Financial Results (On Standalone Basis):
| || ||(Rs. in Lacs) |
| ||2016-17 ||2015-16 |
|Gross Income ||13892.82 ||18687.10 |
|Less: Excise duty on sale ||1615.03 ||2301.54 |
|Net Income ||12277.79 ||16385.56 |
|Profit before Depreciation Interest & Tax (PBDIT) ||(07.09) ||815.90 |
|Less: Depreciation & Amortization ||433.43 ||498.26 |
|Profit/(Loss) before Interest and Taxes (PBIT) ||(440.52) ||317.64 |
|Interest & Financial expenses ||541.62 ||576.06 |
|Profit/(Loss) before Tax (PBT) ||(982.14) ||(258.42) |
|Less: - Provision for Tax || || |
|- Current ||00.00 ||00.00 |
|- Deferred Tax ||359.41 ||216.72 |
|-Wealth Tax ||00.00 ||00.95 |
|Profit/(Loss) after Tax (PAT) ||(622.73) ||(42.65) |
|Balance of Profit from Previous Year ||2196.51 ||2239.16 |
|Surplus retained in Profit & Loss Account ||1573.78 ||2196.51 |
|Earnings per Share (Rs.) || || |
|--Basic & Diluted ||(04.29) ||(00.29) |
|Dividend per Share (Rs.) ||- ||- |
Performance (On Standalone Basis):
During the year under review the performance of the company was impacted due to lowercapacity utilization increase in the price of raw material & other materials.Further current year figures are not comparable as compared to previous year as theprevious year figures also includes the working of the third unit of the company till 30thNovember 2015 and the said unit had leased out to one of its group concern on dated 01stDecember 2015.
The revenue from operations (net) has declined to Rs. 12277.79 lacs as compared torevenue from operations (net) of Rs.16385.56 lacs of the previous year.
However the other income during the year shows a decline of 19.26 % to Rs. 26.80lacs as compared to previous year's other income of Rs. 33.19 lacs which was mainlydue to decline in interest income-Bank deposits & others to Rs. 16.28 lacs ascompared to previous year's interest income of Rs. 20.47 lacs. Other Income also includesforeign exchange gain (net) of Rs. NIL as compared to previous year's gainon foreign exchange rate fluctuations of Rs.4.55 lacs
During the year your company has earned profit before depreciation & amortizationInterest & taxes (PBDIT) of (Rs.7.09 Lacs) (0.06 % of Net Income) as comparedto previous year's profit before depreciation & amortization
Interest & taxes (PBDIT) of Rs. 815.90 lacs (4.98% of Net Income). After provisionfor depreciation and amortization of Rs.433.43 lacs (previous year of Rs.498.26lacs) Interest & financial expenses of Rs.541.62 lacs (previous year ofRs.576.06 lacs ) the company has earned a loss before taxes of Rs.982.14 lacs ascompared to the previous year's loss before taxes (PBT) of Rs.258.42 lacs.
After providing a provision for taxation deferred tax & wealth tax of Rs.(359.40)lacs (previous year Rs (215.77) lacs) there was a loss of Rs.622.73 lacsas compared to previous year's loss after tax of Rs.42.65 lacs.
2. Foreign Exchange Earnings:
During the year your company is the net foreign exchange earner and earned net foreignexchange of Rs.18.63 lacs (previous year net foreign exchange outflow of 246.31lacs) showing a increase of net inflow of Rs.264.94 lacs after taking intoforeign exchange payments of Rs.554.50 Lacs (previous year Rs.904.62 Lacs) onaccount of foreign exchange outgo mainly for payment of interest & repayment offoreign 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 2016-2017.
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 2017 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 31st March 2017 is Rs. 7.25Crores. The Company currently has no outstanding shares issued with differential rightssweat equity or ESOS.
11. Subsidiary Joint Venture and Associate Companies:
The company has a subsidiary company "Bluebasic India Limited" and hadsubscribed to the right issue of its subsidiary but has not done any operation under thatsubsidiary company. Your Company does not have any Joint Venture & Associate Company.
12. Names of the Companies which have become Subsidiary Joint Ventures or AssociateCompanies during the year:
The Company has a Subsidiary Company as a limited liability Company viz. BluebasicIndia Limited in India which was incorporated on November 19 2015. This subsidiary willmainly cater to all kinds of ad blue solvents and coolants.
Annual accounts of the subsidiary company and related detailed information areavailable to the shareholders of the parent company subsidiary company and to thestatutory authorities. On request these documents will be made available for inspectionat the company's registered office. The company does not have any `material subsidiary'whose net worth exceeds 20% of the consolidated net worth of the holding company in theimmediately preceding financial year or has generated 20% of the consolidated revenueduring the previous financial year. The report on performance of subsidiary companies isincluded in the section Management Discussion and Analysis.
During the year the Board of Directors reviewed the affairs of the subsidiary. Inaccordance with Section 129(3) of the Companies Act 2013 the consolidated financialstatements of the Company forms part of the Annual Report. A statement containing thesalient features of the financial statement of our subsidiary in the prescribed formatAOC-1 is presented in a separate section forming part of the financial statement.
14. 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.
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 Mr. Jasbir Singh Ryait Whole Time Directorretires by rotation at the at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
As on the date of this report the Company's Board consists of the followingIndependent Directors:
Mr. Upkar Singh Ahuja. Mr. Iqbal Singh. Mr. Jasbir Singh Bir. 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.
A brief note on Director retiring by rotation and eligible for re-appointment isfurnished in the Report on Corporate Governance.
19. Key Managerial Personnel:
During the period under review the Company appointed Mr. Gajinder Singh Bains as ChiefExecutive Officer of the Company. In terms of Section 203 of the Companies Act2013following persons are the KMPs of the Company:
|Mr. Jasbir Singh Ryait ||- Chairman and Whole Time Director |
|Mr. Surinder Singh Ryait ||- Managing Director |
|Mr. Gajinder Singh Bains ||- Chief Executive Officer |
|Mr. Neeraj Tuli ||- Chief Financial Officer |
|Ms. Amninder Kaur ||- Company Secretary |
20. Policy On Directors appointment And Remuneration And Other Details:
The Nomination and Remuneration Committee has laid down the criteria for Directors'appointment and remuneration including criteria for determining qualification positiveattributes and independence of a Director. The following attributes/ criteria forselection have been laid by the Board on the recommendation of the Committee:-
The candidate should possess the positive attributes such as LeadershipEntrepreneurship Business Advisor or such other attributes which in the opinion of theCommittee are in the interest of the Company. The candidate should be free from anydisqualifications as provided under Section 164 and 167 of the Companies Act 2013. Thecandidate should meet the conditions of being independent as stipulated under theCompanies Act 2013 and Listing Agreement entered into with Stock Exchanges in case of anindependent director.
The candidate should possess the appropriate qualification skills experience andknowledge in one or more fields of finance law management sales marketingadministration research corporate governance technical operations infrastructuremedical social service professional teaching or such other areas or disciplines whichare relevant for the Company's business.
21. 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. |
22. 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.
23. 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.
24. Committees of the Board:
Currently the Board has four committees: the Audit Committee Nomination andRemuneration Committee
Stakeholders' Relationship Committee and Business Development and Risk ManagementCommittee. All committees consist of a combination of Independent as well asnon-independent directors as stipulated under the provisions of the Companies Act 2013.
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. The Vigil |
| ||Mr. Jasbir Singh Bir || |
| ||Mr. Jasbir Singh Ryait || |
| ||Mr.Iqbal Singh ||Mechanism Policy is appended as Annexure II 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 ||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 III |
|Remuneration ||Chairman || |
|Committee ||Mr. Sharwan Sehgal || |
| ||Mr. Upkar Singh Ahuja || |
|Stakeholders Relationship ||Mr. Sharwan Sehgaal Chairman ||The committee reviews and ensures redressal of investor grievances. |
|Committee ||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 ||Mr. Surinder Singh Ryait Chairman ||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. |
|Committee ||Mr.Jasbir Singh Ryait || |
25. Auditors Audit Report and Audited Accounts:
M/s Nanda & Bhatia (ICAI Firm Registration No. 004342N) Chartered AccountantsLudhiana hold office until the conclusion of 43rd Annual General Meeting (AGM)subject to annual ratification by the members at the respective AGMs.
The Auditor has furnished a certificate to the effect that their ratification if madeat the ensuing AGM will be within the limits prescribed under Section 141 of theCompanies Act 2013 and that they are not beneficially holding any security or interest inthe Company as defined under the Companies Act 2013. The Board on the recommendation ofthe Audit Committee recommends the ratification of M/s Nanda & Bhatia as StatutoryAuditors for the Financial Year 2017-18 by the members at the AGM. Members are requestedto consider the ratification of their re-appointment and authorize the Board of Directorsto fix their remuneration for the year 2017-18.
The Auditors' Report read with the notes to the accounts referred to therein areself-explanatory and therefore do not call for any further comments.
With regards to the auditors comment in their auditor's reports on the non-payment ofthe fourth quarter ended 31st March 2017 installment of its term loan fromExport Import Bank of India (EXIM Bank) amounted to US$ 227265.90 the said installmentwill be paid in full on or before 29th June 2017. Other than this there areno other qualifications reservations or adverse remarks made by the Auditors.
26. Cost Audit:
Pursuant to the provisions of Section 148 of the Companies Act 2013 M/s. P.K. Verma& Co. Cost Accountants were appointed as the Cost Auditors to conduct audit of costrecords.
27. 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 2016-17.
The Secretarial Auditors' Report in Form No. MR-3 as required under the Act for thefinancial year ended March 31 2017 is annexed hereto. There are no qualificationsreservations or adverse remarks made by the Secretarial Auditors. The Report forms part ofthis report as Annexure IV.
28. 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 ) together with a certificate of itscompliance from the Statutory Auditors forms part of this report.
29. Fixed Deposits:
During the year under review the Company has not accepted any fixed deposits and assuch no amount of principal or interest on deposits from public was outstanding as on thedate of the balance sheet.
30. Safety Environment and Health:
The Company considers safety environment and health as the management'sresponsibility. Regular employee training programmes are carried out in the manufacturingfacilities on safety environment and health.
31. 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.
32. 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. Related party transactions under Accounting Standard - AS18 aredisclosed in the notes to the financial statements. The Policy on dealing with relatedparty transactions and the Policy for determining material subsidiaries as approved by theBoard of Directors may be accessed on the Company's website at www.gsgroupindia.com.
33. Employee Strength:
The total number of permanent employees on the rolls of the Company was 1094 ason 31st March 2017 (previous year 1146)
34. 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.
35. 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'swebsite www.gsgroupindia.com. The Board members and senior management personnel haveaffirmed compliance with the said code of conduct. A declaration signed by the ManagingDirector is given at the end of the Corporate Governance Report.
36. 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 to regulatemonitor and report trading by employees and other connected persons ("Code ofConduct") 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.
37. 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.
38. 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 V to thisreport.
39. 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.VI-to this report.
40. Directors' Responsibility Statement:
Your Directors confirm:
(a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
(b) 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 2016 and of the loss of the Company for the financial year;
(c ) 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;
(d) that your Directors have prepared the annual accounts on a going concern basis;
(e) 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
(f) 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.
|Place: Ludhiana ||For and on behalf of the Board of Directors || |
|Date: 30th May 2017 ||Sd/- ||Sd/- |
| ||Jasbir Singh Ryait ||Surinder Singh Ryait |
| ||Chairman ||Managing Director |
| ||DIN:00104979 ||DIN:00692792 |