G G Automotive Gears Ltd Management Discussions.
Industry Structure and Development:
Your Company is in the business of design, manufacture, supply and servicing of Gears and Pinions & Gear boxes. The market this year has been largely static. The market for Gear is trending towards higher sizes due to larger capacities being planned by the various users. Accompanying these trends is the scale-up in capital equipment sizes. Newer technologies, energy ef ciency and space reduction are emerging as key drivers in the Gear industry. India, in recent years, is witnessing a growth in the planetary Gear segment signaling a maturing of the market.
The Company is in automotive gears and allied products industry; it has registered a steady growth over a period of years. The trend has been upward and gives an indication of bright future. In line with market developments, the company is also expanding its market by adding more products in its product range.
Review of Operations:
During the year, the Company reported a revenue of 55.42 Crores, 30.34% higher than the previous year, also grew its orders booked during the year and continues to put efforts to enhance presence in the market. The approach involves enhancing its reach by strengthening its Sales and Service teams, building references in high potential segments.
Operations of the company have been satisfactory despite of sluggish and weaken market conditions prevailing in the types of industry in which the company belongs and more particularly described in Directors Report.
The Profit before Tax for the year was at 447.72 Lakhs, against 363.37 Lakhs in the previous year with a growth of 29.16%. Companys focus on enhancing service levels, growing in profitable segments, improving operating efficiencies and specific cost reduction initiatives has resulted in higher profitability than previous year.
Future Plans and Outlook:
The Company remains con dent that the future is positive given the con dence of its customers on the Companys products, service and its ability to provide lasting value. Expectations of a more conducive economic environment especially with the initiatives of the government to revive manufacturing growth in India augur well for the Company.
Automotive market is on up swing and registering a steady growth. The outlook appears bright.
Segment wise Performance:
The company is engaged in manufacturing of automotive parts as well as trading thereof with allied activities. The performance is reflected in the Balance Sheet and Profit and Loss Account.
The product is influenced by the major changes in Govt. policy.
Human Resources/industrial Relations:
The Company continued to invest in human resources, its key strength, with a view to building a pool of talented people to lead the Company into the future. Skill development and employee engagement initiatives continued to receive high attention.
The Company is in process to get ISO Certi cation 14001: 2004 Environment Management System.
Your company considers its human resources as its most valuable assets, among all other assets of the company. it has been the policy of the company to promote the talent by providing opportunities to develop themselves within the organization. The company continued to have very cordial and harmonious relations with its employees.
Internal Control System and Adequacy:
The Company has an Internal Audit system commensurate with its size and operations. The internal audit is carried out by external experts covering key aspects of the business. The internal team periodically evaluates the adequacy and effectiveness of internal controls.
The Audit committee reviews the plan for Internal Audit, significant internal audit observations and its satisfactory closure and functioning of the internal audit department on a periodical basis.
|Debtors Turnover Ratio||3.75||2.98||25.84|
|Inventory Turnover Ratio||1.01||1.52||-33.55|
|Interest coverage Ratio||3.74||3.82||-2.09|
|Debt Equity Ratio||0.18||0.21||-14.29|
|Operating Profit Margin Ratio (%)||7.33||8.17||-10.28|
|Net Profit Margin Ratio (%)||6.57%||4.12%||59.47|
|Return on Net worth (%)||17.37%||10.20%||70.29|
Debtors Turnover Ratio: Change is due to increase turnover in last quarter and lower budget available with Indian railways.
Inventory Turnover Ratio: Change is by way of better inventory management.
Interest Coverage Ratio: Slide change is due to higher interest cost.
Current Ratio: The change is because of better performance.
Debt Equity Ratio: Change is due to repayment
Return On Net Worth: The Company has been able to generate better return by registering almost 30 % growth
|By Order of the Board|
|For G. G. AUTOMOTIVE GEARS LIMITED|
|KENNEDY RAM GAJRA|
|DATE: 27th July, 2019||CHAIRMAN CUM MANAGING DIRECTOR|
|PLACE: DEWAS, MADHYA PRADESH||(DIN 02092206)|