The Directors of your Company have pleasure in presenting their 26th Annual Report onthe affairs of the Company together with the Audited Accounts of the Company for the yearended 31st March 2019.
The Company was incorporated in 1993 and thereafter it transformed from a small autocomponents manufacturer to a large Axle Shafts manufacturer and enjoys a formidableposition in both national and global markets. The Company has its corporate headquartersat Mehtiana in Hoshiarpur Punjab.
FINANCIAL RESULTS AND ANALYSIS
The Financial results for the year are as under:-
| || ||र Lakhs |
|Particulars ||Year ended on 31st March 2019 ||Year ended on 31st March 2018 |
|Net operating Revenue ||92827.99 ||67013.52 |
|Other Income ||40.21 ||287.50 |
|Profit Before Depreciation Interest and Tax ||14547.71 ||10591.96 |
|Financial Costs ||810.43 ||709.45 |
|Profit before Depreciation and Tax ||13737.28 ||9882.51 |
|Depreciation ||3473.21 ||2480.03 |
|Profit before Tax ||10264.07 ||7402.48 |
|Tax Expense || || |
|- Current ||3550.00 ||2360.00 |
|- Deferred ||127.61 ||-45.95 |
|Profit after tax ||6586.46 ||5088.43 |
|Earnings Per Share || || |
|- Basic ||30.68 ||23.70 |
|- Diluted ||30.68 ||23.70 |
FINANCIAL ANALYSIS AND REVIEWOF OPERATIONS: Sales
Revenue from operations increased by र 25814.48 Lacs to र 92827.99 Lacs forthe Fiscal 2019 from र 67013.51 Lacs for the Fiscal 2018 or an increase of 38.52 %.Export sales increased by र 19133.68 Lacs to र 49164.90 Lacs for the Fiscal2019 from र 30031.22 Lacs for the Fiscal 2018. Domestic net revenue from operationsincreased by र 7181.06 Lacs to र 42544.94 Lacs in the Fiscal 2019 fromर 27943.41 in the Fiscal 2017 or an increase of 20.31%. The Increase in revenue wason account of better demand in the Off Highway and CV segment both in Domestic and ExportMarkets.
The company earned Profit before Tax of र 10264.07 Lacs during the year underreview against र 7402.48 Lacs for the Fiscal 2018 showing an increase of 38.66%.
Profit after tax increased by र 1498.03 Lacs to र 6586.46 Lacs for theFiscal 2019 from र 5088.43 Lacs for the Fiscal 2018 or an increase of 29.44 %.
RESOURCE UTILISATION: Property Plant & Equipment
The property plant & Equipment (including capital work in progress) as at 31stMarch 2019 were र 24454.70 Lacs as against previous year's value of र19069.37 Lacs .
The net current assets as on 31st March 2019 were
र 19990.72 Lacs as against र 14911.89 Lacs in the previous year.
The Board of Directors in its meeting held on 12th May 2019 had recommended a dividend@ 27.50 % i.e of र 2.75/- per Equity Share of र 10/- each (Previous year र2.00 per Equity Share) to the shareholders of the Company for their consideration andapproval at the ensuing Annual General Meeting of the Company. The dividend @ 27.50 % ifapproved at the forthcoming Annual General Meeting will result in the outflow of र590.30 Lacs as Dividend and र 121.34 lacs by way of dividend distribution tax.
The paid up Equity Share Capital of the Company as on March
31 2019 stood at Rs. 2146.54 Lacs. During the year under review the Company has notissued shares or convertible securities or shares with differential voting rights nor hasgranted any stock options or sweat equity shares or warrants. None of the Directors of theCompany hold instruments convertible into Equity Shares of the Company as on March 312019.
SUBSIDIARIES JOINTVE NTURES AND ASSOCIATE COMPANIES
The Company has one subsidiary namely GNA Axles Inc. incorporated in Michhigan USA. Thesubsidiary is yet to start its business operations. A statement pursuant to section 129(3)in form AOC 1 is enclosed as Annexure 1 to this Report. The Company does nothave any associate or joint venture Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance withthe relevant Accounting Standards issued by ICAI and forms integral part of their report
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company asrequired under SEBI (LODR) Regulations 2015 in provided in a separate section and formsan integral part of this Report.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THEE ND OF THE FINANCIAL YEAR UNDER REPORTING AND DATEOF REPORT:
There has 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 required under section135 of the Companies Act 2013. The Company has identified following thrust areas for 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 Year2018-19 is attached herewith in Annexure 2.
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 andprotect shareholder value by minimizing threats or losses and identifying and maximizingopportunities. An enterprise-wide risk management framework is applied so that effectivemanagement of risks is an integral part of every employee's job.
The Risk Management Policy of the Company may be accessed on the Company's Website atthe 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 reference to financialstatements are well placed and are commensurate with the size and nature of operations ofthe Company. The Statutory Auditors report on the internal financial controls as requiredunder section 143 of the Companies Act 2013 forms part of the Independent Auditors Reportas Annexure B.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWIT H 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 2018-2019.
In accordance with provisions of section 152 of the Act and the Articles of Associationof the Company Mr. Kulwin Seehra Mr. Jasvinder Singh and Mr. Ranbir Singh Directors ofyour Company retires by rotation at the conclusion of the forthcoming Annual GeneralMeeting and being eligible offers themselves for re-appointment. The Board of Directorsrecommends their reappointment as Directors at the forthcoming Annual General Meeting.
The Board of Directors of the Company in its meeting held on 23rd October 2018 uponthe recommendation of the Nomination & Remuneration Committee had appointed Lt.General Praveen Bakshi (Retd.) as Additional Independent Director of the Company for atenure of 5 years with effect from 23rd October 2018 for a term of 5 consecutive years.His appointment as Independent Director of the Company for a period of 5 years is to beapproved by the members in the ensuing Annual General Meeting. The Company has receivedrequisite notice in writing from a member proposing Lt. Gen.
Praveen Bakshi's (Retd.) name for the office of Director. According the Boardrecommends the resolution relating to the appointment of Gen. Bakshi (Retd.) for approvalof the members. Brief profile of Gen. Bakshi (Retd.) has been given in the noticeconvening Annual General Meeting.
Pursuant to provisions of Section 203 of the Companies Act 2013 the Company hasdesignated below mentioned persons as KMP's :-
|WholeTime Key Managerial || |
|Personnel of the Company ||Designation |
|Gursaran Singh ||Managing Director (MD) |
|Jasvinder Singh ||Jt. Managing Director (Jt. MD) |
|Ranbir Singh ||Whole-Time Director(WTD) |
|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 theyfulfill 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.
Company's Policy relating to the Directors appointment Payment of remuneration andother 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 3.
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 2018-2019 was heldon 29th March 2019 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 AUDITOR'S REPORT: a. Statutory Auditors
The shareholder of the Company in their 24th Annual General Meeting held on 5thSeptember 2017 had appointed M/S Harish & Co. Charted Accountants Jalandhar asStatutory Auditors of the Company for a period of 5 years. Mr. Harish Kumar Monga theprop. of M/S Harish & Co. passed away in February 2019. The Board of Directors of theCompany in their meeting held on March 29 2019 upon their recomendations of the AuditCommittee recommended the name of M/S Harish & Co Charted Accountants Jalandhar tothe shareholders for their approval for appointment as tatutory auditors of the Company.The shareholders in their extra ordinary general meeting held on April 29 2019 appointedM/S Harish & Co. Charted Accountants as Statutory Auditors of the Company till nextAnnual General Meeting of the Company As the tenure of M/S Harish & Co ChartedAccountants as the Statutory Auditors of the Company is going to end at the conclusion ofthe ensuing AGM of the Company the Board of Directors of the Company in their meetingheld on 12th July 2019 upon the recommendation of the Audit Committee had appointed M/SHarish & Co. Charted Accountants Jalandhar as Statutory Auditors of the Company for aterm of 5 years from the conclusion of 26th AGM of the Company till the conclusion of 31stAGM of the Company subject to the approval of the shareholders of the Company in theensuring Annual General Meeting to be held on August 23 2019. The board recommends theappointment of M/S Harish & Co. Charted Accountants Jalandhar as Statutory Auditorsof the Company for a tenure of 5 years.
Further the Statutory Auditors of the Company M/S Harish & Co. have submittedAuditor's Report on the Standalone and Consolidated accounts of the Company for theFinancial year ended March 31 2019. The Auditor's Report is self explanatory and do notcall for any comments.
b. Secretarial Auditor
M/s H.K & Associates Practicing Company Secretaries were appointed asSecretarial Auditor for the year 2018-19. The Report of the Secretarial Auditor in form noMR-3 is annexed to this Report. The Secretarial Audit Report is self explanatory and donot call for any comments. The Secretarial Audit Report forms part of this report asAnnexure 4.
During the Financial Year 2018-19 the Board met 6 times on10th April 2018 28th May2018 19th July 2018 23rd October 2018 12th January 2019 and 29th March 2019.
AUDIT COMMITTEE DISCLOSURES:
Composition of Audit Committee:
The Audit Committee comprises of three directors viz. Air (Cmde.) Shailindra SinghKaushik (Retd.) Independent Director Mr. Jasminder Singh Johal Independent DirectorMr. Ranbir Singh Executive and Non Independent Director Air (Cmde.) Shailindra SinghKaushik (Retd.) 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 behavior frauds or violation of the codes ofconduct. 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 Company's website at the link: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 certificateregarding the compliance of the conditions of Corporate Governance as stipulated under theSEBI (LODR) Regulations 2015 and the same is annexed to the report on CorporateGovernance.
ENERGY CONSERVATION TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO:
Conservation of energy has been a major area of emphasis of your Company and everyeffort is made to achieve the optimumutilizationofenergyincarryingoutthemanufacturingprocesses. Particulars with respect to conservation of energy and other areas as persection 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014 are provided in Annexure 5.
In terms of the provisions of section 92(3) of the Companies Act 2013 read withCompanies (Amendment) Act 2017 and the relevant rules made thereunder a copy of theAnnual Return as prescribed under Section 92 of the Companies Act 2013 as amended shallbe made available at the website of the Company www.gnagroup.com under the link http://gnagroup.com/wp-content/uploads/2019/09/Annual Return 2018-2019.pdf
HUMAN RESOURCES/INDUS TRIAL RELATIONS:
For your Company its Human Resources are its most important assets. It has been theendeavor 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. As on 31st March 2019 1201personnel were employed by the Company.
PERSONNEL & RELATED INFORMATION:
The disclosures required under section 197(12) of the Companies Act 2013 and Rule 5 ofthe Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 areannexed as Annexure 6 and forms part of this report.
DIRECTOR'S 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 havebeen 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 sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safe guarding theassets of the Company and for preventing 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.
6. There was no instance of fraud during year under review which require the StatutoryAuditors to report to the Audit Committee/Board of Directors under section 143(12) of theAct and rules framed there under.
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 |
| ||Gursaran Singh |
| ||Managing Director |
|Date: 12th July 2019 Ranbir Singh |
|Place: Mehtiana ||CEO & Wholetime Director |