The Directors of your Company have pleasure in presenting their 27th Annual Report onthe affairs of the Company together with the Audited Accounts of the Company for the yearended March 31 2020.
FINANCIAL RESULTS AND ANALYSIS
The Financial results for the year are as under:-
|Particulars ||Year ended on ||Year ended on |
| ||March 31 2020 ||March 31 2019 |
|Net operating Revenue ||90901.58 ||92827.99 |
|Other Income ||126.96 ||40.21 |
|Profit Before Depreciation Interest and Tax ||12579.35 ||14547.71 |
|Financial Costs ||1359.43 ||810.43 |
|Profit before Depreciation and Tax ||11219.92 ||13737.28 |
|Depreciation ||4235.80 ||3473.21 |
|Profit before Tax ||6984.12 ||10264.07 |
|Tax Expense || || |
|- Current ||1984.00 ||3550.00 |
|- Deferred ||(275.36) ||127.61 |
|Profit after tax ||5275.48 ||6586.46 |
|Earnings Per Share || || |
|- Basic ||24.58 ||30.68 |
|- Diluted ||24.58 ||30.68 |
FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:
Revenue from operations decreased by Rs 1926.41 Lacs to Rs 90901.58 Lacs for theFiscal 2020 from Rs 92827.99 Lacs for the Fiscal 2019 or a decrease of 2.07 %. Exportsales increased by Rs 7275.43 Lacs to Rs 56440.33 Lacs for the Fiscal 2020 from Rs49164.90 Lacs for the Fiscal 2019 owing to better demand of the Company's products in theoverseas market. Domestic sales decreased by Rs 11730.78 Lacs to Rs 30814.16 Lacs in theFiscal 2020 from Rs 42544.94 in the Fiscal 2019 thereby showing a decrease of 27.57 % dueto the slowdown in the domestic auto industry.
The company earned Profit before Tax of Rs 6984.12 Lacs during the year under reviewagainst Rs 10264.07 Lacs for the Fiscal 2019 showing a decrease of 31.96%.
Profit after tax decreased by Rs 1310.98 Lacs to Rs 5275.48 Lacs for the Fiscal 2020from Rs 6586.46 Lacs for the Fiscal 2019 thereby showing a decrease of 19.90 %.
Property Plant & Equipment
The property plant & Equipment (including capital work in progress) as at March31 2020 were Rs 25055.50 Lacs as against previous year's value of `24454.70 Lacs.
The net current assets as on March 31 2020 were Rs 22743.63 Lacs as against Rs19990.71 Lacs in the previous year.
In view of the current tight liquidity arisen after the outbreak of the COVID-19Pandemic and subsequent lockdown and acute slowdown in the business of the Company theDirectors have not recommended any dividend during the year under review so as to conservethe resources of the Company.
The paid up Equity Share Capital of the Company as on March 31 2020 stood at Rs.2146.54 Lacs. During the year under review the Company has not issued shares orconvertible securities or shares with differential voting rights nor has granted any stockoptions or sweat equity shares or warrants. None of the Directors of the Company holdinstruments convertible into Equity Shares of the Company as on March 31 2020.
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 - 1 to this Report. The Company does nothave 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 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.
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.
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 recognised 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) Rules 2014 i.e. Annual Report on CSR activities for Financial Year2019-20 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 minimising threats or losses and identifying and maximisingopportunities. 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 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 2019-2020.
In accordance with provisions of the Articles of Association of the Company Mr.Gurdeep Singh Mr. Harwinder Singh and Mr. Rachhpall Singh Directors of your Companyretire by rotation at the conclusion of the forthcoming Annual General Meeting and beingeligible offers themselves for re-appointment. The Board of Directors recommends theirreappointment as Directors at the forthcoming Annual General Meeting.
The Board of Directors of the Company in its meeting held on May 19 2020 hadreappointed Mr. Jasminder Singh Johal as an Independent Director of the Company for asecond tenure of 5 years. His appointment as Independent Director of the Company for aperiod of 5 years will be from June 10 2020 till June 09 2025 if approved by the membersin the ensuing Annual General Meeting.
The Board of Directors of the Company in its meeting held on May 19 2020 hadreappointed Mr. Rachhpall Singh as Wholetime Director of the Company and Mr. GursaranSingh as Managing Director of the Company for a period of 3 years w.e.f April 01 2020 toMarch 31 2023. The Board of Directors of the Company in its meeting held on July 172020 had reappointed Mr. Harwinder Singh and Mr. Kulwin Seehra as Wholetime Directors ofthe Company for a period of 3 years w.e.f October 01 2020 to September 30 2023. Allthese appointments are subject to the approval of the shareholders in the ensuing 27thAnnual General Meeting of the Company. The Board recommends their reappointment at theforthcoming Annual General Meeting.
Pursuant to provisions of Section 203 of the Companies Act 2013 the Company hasdesignated below mentioned persons as KMP's:-
|Whole Time Key Managerial ||Designation |
|Personnel of the Company || |
|Mr. Gursaran Singh ||Managing Director (MD) |
|Mr. Jasvinder Singh ||Jt. Managing Director (Jt. MD) |
|Mr. Ranbir Singh ||Whole-Time Director(WTD) |
|Mr. Rakesh Kumar ||Chief Financial Officer (CFO) |
|Mr. 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 2019-2020 was held onJanuary 18 2020 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 by discussing the performance of the Individual Directors andthe Board as a whole.
AUDITORS AND AUDITORS' REPORT:
a. Statutory Auditors:
M/s Harish & Co. Chartered Accountants the retiring Auditors of the Company haveconfirmed their eligibility to be reappointed as Statutory Auditors of the Company at theensuing Annual General Meeting. The Board of Directors recommend the re-appointment of M/sHarish & Co Chartered Accountants as Statutory Auditors of the Company to hold officefrom the conclusion of this Annual General Meeting till the conclusion of the next AnnualGeneral Meeting. The Company has paid a sum of Rs 7.50 lacs (plus GST) to M/s Harish &Co Chartered Accountants as audit fees during the Financial Year ended 31st March 2020.
The Auditors' report does not have any qualification reservation adverse remark ordisclaimer by the statutory auditors.
b. Secretarial Auditor:
M/s H.K & Associates Practicing Company Secretaries were appointed as SecretarialAuditor for the year 2019-20. 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 - 4.
During the Financial Year 2019-20 the Board met 4 times on May 11 2019 July 122019 November 08 2019 and January 18 2020.
AUDIT COMMITTEE DISCLOSURES:
Composition of Audit Committee:
The Audit Committee comprises of four directors i.e. Mr. Shailindra Singh KaushikIndependent Director Mr. Jasminder Singh Johal Independent Director Mr. Ajit SinghWalia Independent Director and Mr. Ranbir Singh Executive and Non Independent Director.The Board of Directors in its meeting held on January 18 2020 has inducted Mr. Ajit SinghWalia as member of the Audit Committee. Mr. Shailindra Singh Kaushik is the Chairman ofthe committee and Mr. Gourav Jain is Secretary of the Committee.
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 victimisation ofemployees and Directors who express their concerns.
The Policy on Vigil Mechanism as approved by the Board of Directors can be accessed onthe 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 EXCHANGE EARNINGS & OUTGO:
Conservation of energy has been a major area of emphasis of your Company and everyeffort is made to achieve the optimum utilisation 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 - 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 linkhttp://gnagroup. com/wp-content/uploads/2019/20/Annual Return 2019-2020. pdf
HUMAN RESOURCES/INDUSTRIAL 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 allthe plants of the Company during the year under review. As on March 31 2020 1272personnel were employed by the Company.
PERSONNEL & RELATED INFORMATION:
The disclosures required under section 197(12) of the Companies Act 2013 and Rule 5(1)of the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 areannexed as Annexure - 6 hereto 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.
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 deepgratitude and appreciation to the employees at all levels for their continued and devotedservices and sincere efforts. The Company feels confident of continued cooperation andefforts from them in future also.
| ||For and on Behalf of the Board |
| ||Gursaran Singh |
| ||Managing Director |
|Date: July 17 2020 ||Ranbir Singh |
|Place: Mehtiana ||CEO & Wholetime Director |