G S Auto International Ltd Directors Report.

Dear Members,

Your Directors have immense pleasure in presenting the 45th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2019:-

1. Financial Results :

(Rs. in Lacs)
Year ended March 31, 2019 Year ended March 31, 2018
Revenue from Operations 15391.00 13416.45
Profit before Depreciation, Interest & Tax (PBDIT) & before exceptional items 806.72 509.22
Less: Depreciation & Amortization 428.66 470.54
Profit/(Loss) before Interest and Taxes (PBIT) 378.06 38.68
Interest & Financial expenses 466.91 468.61
Profit/(Loss) before Tax (PBT) (88.85) (429.93)
Less: - Provision for Tax
- Current 0.00 00.00
- Deferred Tax 14.39 56.36
Profit/(Loss) after Tax (PAT) for the year (74.46) (373.57)
Add/ Less: Other comprehensive income 5.40 (7.00)
Total Comprehensive Income for the year (69.06) (380.57)
Earnings per Share (Rs.)
--Basic & Diluted (0.51) (2.57)
Dividend per Share (Rs.) - -

Performance (On Standalone Basis):

During the year under review, there is improvement in the overall performance of the company, due to better product mix, better capacity utilization along with the benefits of introduction of GST. The revenue from operations (net) has increased to Rs. 15391.00 lakhs, as compared to revenue from operations (net) of Rs. 13416.45 lakhs of the previous year; this performance seems quite satisfactory along with the improvements in the overall margins of the Company.

During the year, your company has earned profit before depreciation & amortization, Interest & taxes (PBDIT) of Rs. 806.71 Lakhs (5.24 %of Net Income) as compared to previous years profit before depreciation & amortization, Interest & taxes (PBDIT) of Rs. 509.22 lakhs (3.80% of Net Income), with an overall increase in the margin by 1.44% as compared to previous year. The increase in the EBIDTA margin is mainly on account of increase in the prices of its products so to compensate the prices of its raw material and allied products and services. After provision for depreciation and amortization of Rs. 428.66 lakhs (previous year of Rs.470.54 lakhs), Interest & financial expenses of Rs. 466.91 lakhs (previous year of Rs. 468.61 lakhs), the company has earned a marginal loss before taxes of Rs. 88.85 lakhs as compared to the previous years loss before taxes (PBT) of Rs. 429.93 lakhs.

After providing a provision for taxation & deferred tax of Rs.( 14.39) lakhs (previous year Rs.(56.36) lakhs) there was a loss of Rs. 74.46 lakhs as compared to previous years loss after tax of Rs. 373.57 lakhs. The overall performance of the company seems to be quite satisfactory.

2. Foreign Exchange Earnings:

During the year, your company has paid net foreign exchange of Rs.316.90 Lakhs (mainly on account of repayment of its long term liability from financial institution) (previous year Rs.92.91 lakh), after taking into consideration the foreign exchange payment of Rs.784.95 Lakhs (previous year Rs.679.19 Lakhs) on account of foreign exchange outgo, mainly for payment of interest & repayment of foreign currency term loan.

3. Quality:

The Company has retained its ISO/TS 16949 certifications for its Quality Management System.

4. Dividend:

During FY 2018-19, the company had incurred losses. Accordingly, the Directors did not recommend any dividend on equity shares for the FY 2018-19.

5. Reserves:

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 Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is presented 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 all assets are safeguarded, properly utilized and protected against loss from un-authorized use or disposition and those transactions are authorized and recorded by the concerned departments properly and reported to the Audit Committee/ Board effectively.

The Company has also in place adequate internal financial controls with reference to financial statements. Such controls are tested from time to time and no reportable material 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 and Disclosure Requirements) Regulations, 2015, the Cash Flow Statement for the year ended March 31, 2019, is annexed hereto.

9. Material Changes and Commitments affecting financial position of the Company:

There were no material changes and commitments, affecting the financial position of the Company that has occurred between the end of the financial year of the Company and the date of signing of this report.

10. Share Capital:

The paid-up equity share capital of the Company as on March 31, 2019 is Rs. 7.25 Crores. During the year under review the Company has not issued any shares. No shares with differential voting rights, stock or sweat equity shares were issued by the Company during the year under review. During previous year(s), the Company has transferred 4,10,670 Equity Shares to Investor Education and Protection Fund, pursuant to the provisions of sections 124 & 125 of the Companies Act, 2013 and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016.

11. Subsidiary, Joint Venture and Associate Companies:

There are no any subsidiary companies within the meaning of Section 2(87) of the Companies Act, 2013 ("Act").

Further, there are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

12. 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 (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated a Policy to prevent Sexual Harassment of Women at Workplace. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace Prevention, Prohibition and Redressal) Act, 2013.

13. Vigil Mechanism:

The Company has established a Vigil Mechanism and a Whistle Blower Policy in accordance with the provisions of the Act and Listing Regulations. Disclosures can be made by a whistle- blower through an email or a letter to the Chairman of the Audit Committee. The Vigil Mechanism Policy can be accessed at the Companys website www.gsgroupindia.com.

14. Research And Development:

The Company is developing certain machineries (Special purpose Machines), as per its various in house production process requirements, along with for the requirements of its group Companies, as & when required, under its Research & Development Centre.

15. Human Resource Development:

The Company has a team of able and experienced professionals and is always following the policy of Creating a healthy environment and work culture resulting into harmonious inter-personal relations.

16. Risk Management:

The Board of Directors has constituted Business Development and Risk Management Committee of the Company which has been entrusted with the responsibility to assist the Board 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.

17. Directors and Key Managerial Personnel (KMPs):

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of association of the Company, Mr. Jasbir Singh Ryait, Chairman, retires by rotation at the at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Board of Directors on the recommendation of the Nomination and Remuneration Committee has appointed Mr. Pardeep Sehgal as an Additional Independent director. He will hold office up to the ensuing Annual General Meeting. His appointment as an Independent Director will be subject to the approval of shareholders. The Board has also appointed Mr. Harkirat Singh Ryait as an Executive Director for a term of consecutive three years with effect from 14th February, 2019. His appointment will be subject to the approval of shareholders.

On the recommendations of the Nomination and Remuneration Committee, the Board has promoted and redesignated Mr. Jasbir Singh Ryait as Chairman and Joint Managing Director for the period of three years with effect from 16th April, 2019, liable to retire by rotation. The Board has also re-appointed Ms. Dalvinder Kaur Ryait and Ms.

Amarjit Kaur Ryait for a period of three years with effect from 16th April, 2019, on the recommendation of the Nomination and Remuneration Committee.

The first term of office of Mr. Iqbal Singh and Mr. Upkar Singh Ahuja as Independent Directors expires at the ensuing Annual General Meeting. The Board has recommended re-appointment of Mr. Iqbal Singh and Mr. Upkar Singh Ahuja as Independent Directors for a second term of five years. As on the date of this report, the Companys Board consists of the following Independent Directors:

Mr. Upkar Singh Ahuja

Mr. Iqbal Singh

Mr. Avinash Sharma

Mr. Sharwan Sehgal

Mr. Pardeep Sehgal

The Company has received declarations from all the Independent Directors of the Company that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required.A brief note on Director retiring by rotation and eligible for re-appointment is furnished in the Notice.

18. Key Managerial Personnel:

In terms of Section 203 of the Companies Act, 2013, following persons are the KMPs of the Company:

Mr. Jasbir Singh Ryait Chairman and Joint Managing Director
Mr. Surinder Singh Ryait Managing Director
Mr. Neeraj Tuli Chief Financial Officer
Ms. Amninder Kaur Company Secretary

19. Board Evaluation:

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board in the following manner:

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.

20. Number of Meetings of the Board:

The Board met five times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

21. Familiarization Program for Independent Directors:

To familiarize the new inductees with the strategy, operations and functions of our Company, the senior management personnel make presentations to the inductees about the Companys strategy, operations, product offerings, markets, organization structure, finance, human resources, technology, quality, facilities and risk management. The details of such familiarization programmes for Independent Directors are posted on the website of the Company www.gsgroupindia.com.

22. Committees of the Board:

Currently, the Board has four committees: the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Business Development and Risk Management Committee. All committees consist of a combination of Independent as well as non-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 Corporate Governance Report section in this Annual Report. The composition of the committees and compliances, 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 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 Companys Code of Conduct and Ethics. 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.
Chairman
*Mr. Avinash Sharma
Mr. Jasbir Singh Ryait
Mr.Iqbal Singh
** Mr. Jasbir Singh Bir
Nomination and Remuneration Committee *Mr. Avinash Sharma 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.
Chairman
Mr. Sharwan Sehgal
Mr. Upkar Singh Ahuja
**Mr. Jasbir Singh Bir
The Nomination and Remuneration Committee has framed the Nomination and Remuneration Policy. A copy of the policy is appended as Annexure II
Stakeholders Relationship Committee Mr. Upkar Singh Ahuja The committee reviews and ensures redressal of investor grievances. The committee noted that all the grievances of the investors have been resolved during the year.
Chairman
Mr. Sharwan Sehgal
*Mr. Avinash Sharma
**Mr. Jasbir Singh Bir
Business Development and Risk Management Committee Mr. Surinder Singh 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.
Ryait, Chairman
Mr.Jasbir Singh Ryait

* Appointed w.e.f. 14th August, 2018. **Resigned w.e.f 30th May, 2018.

23. Auditors, Audit Report and Audited Accounts:

M/s Sukhminder Singh & Co. (ICAI Firm Registration No. 016737N), Chartered Accountants, 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 47th Annual General Meeting (AGM). Pursuant to the Companies (Amendement) Act, 2017, the requirement of ratification of appointment of the Auditors on yearly basis had been dispensed with.

The Auditors Report read with the notes to the accounts referred to therein are self-explanatory and, therefore, do not call for any further comments. There are no qualifications, reservations or adverse remarks made by the Auditors. The Statutory Auditors have not reported any fraud during the year under review

24. 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 cost records.

25. Secretarial Audit:

Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, M/s. Bhupesh Gupta & Associates, Practicing Company Secretaries were appointed as the Secretarial Auditor for auditing the secretarial records of the Company for the financial year 2018-19.

The Secretarial Auditors Report in Form No. MR-3 as required under the Act for the financial year ended March 31, 2019 is annexed hereto. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditors. The Report forms part of this report as Annexure II.

26. Corporate Governance:

As per the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has complied with the requirements of Corporate Governance in all material aspects.

A report on Corporate Governance (Annexure- I) as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

27. Deposits:

During the year under review, the Company has not accepted any deposits and as such no amount of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

28. Safety, Environment and Health:

The Company considers safety, environment and health as the managements responsibility. Regular employee training programs are carried out in the manufacturing facilities on safety, environment and health.

29. Particulars of Loans, Guarantees and Investments:

The Company has not given any loans or guarantees or made investments in contravention of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans and guarantees given and investments made by the Company are provided in the notes to the financial statements.

30. Related Party Transactions:

All related party transactions that were entered into during the financial year, if any, were on arms length basis and were in the ordinary course of Companys business. The Company has not entered into any contract, arrangement or transaction with any related party 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 approval on a quarterly basis. Members may refer to Note 44 to the Financial Statements which sets out related party disclosures pursuant to Ind AS.

The Policy on dealing with related party transactions and the Policy for determining material subsidiaries as approved by the Board of Directors may be accessed on the Companys website at www.gsgroupindia.com

31. Employee Strength:

The total number of permanent employees on the rolls of the Company was 867 as on March 31, 2019 (967 was in the previous year).

32. Remuneration of Directors/ Employees and related analysis:

During the period under review, no employee of the Company received salary in excess of the limits as prescribed under the Act. Accordingly, no particulars of employees are being given pursuant to Section 134 of the Companies Act, 2013 read with Rule 5(2) of the Companies (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 employees of the company, will be provided upon request. In terms of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled thereto. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the corporate office of the company. The said information is also available for inspection at the registered office during working hours up to the date of the Annual General Meeting. Company has not offered its shares to its employees under ESOS during the year under review.

Company has not sanctioned loan to any of its employees for purchase of Companys shares under any scheme.

33. Code of Conduct:

The Board has laid down a code of conduct for board members and senior management personnel of the Company. The code incorporates the duties of independent directors as laid down in the Companies Act, 2013.

The said code of conduct is posted on Companys website www.gsgroupindia.com. The Board members and senior management personnel have affirmed compliance with the said code of conduct. A declaration signed by the Managing Director is given at the end of the Corporate Governance Report.

34. 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 for Fair Disclosure of Unpublished Price

Sensitive Information ("Code of Fair Disclosure") and the Code of Conduct to regulate, monitor and report trading by employees and other connected persons ("Code of Conduct") as approved by the Board on 14.05.2015 are in force by the Company. The objective of this code is to protect the interest of shareholders at large, to prevent misuse of any price sensitive information and to prevent any insider trading activity by dealing in shares of the Company by its Directors, Designated Employees and Specified Persons. The Company also adopts the concept of Trading Window Closure, to prevent its Directors, Designated Employees and Specified Persons from trading in the securities of the Company at the time when there is unpublished price sensitive information. The code has also been placed on the website of the Company www.gsgroupindia.com.

35. Significant and Material orders passed By the Regulators or Courts:

There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations.

36. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

In accordance with the requirements of Section 134 of the Companies Act, 2013, statement showing particulars with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is furnished as Annexure IV to this report.

37. Extract of Annual Return:

In accordance with the requirements of Section 92 (3) of the Companies Act, 2013 and rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in Form MGT-9 is furnished as Annexure No. IV to this report. The same is also available on the website of the Company www.gsgroupindia.com.

38. Directors Responsibility Statement:

In compliance of section 134(5) of the Companies Act, 2013, the Directors of your Directors confirm:

i. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. that your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2019 and of the loss of the Company for the year ended on that date;

iii. that your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. that the annual accounts have been prepared on a going concern basis;

v. that your Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. that your Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

39. Finance

During the year under review, the Company has repaid all its long term loans/debts from Bank and financial institutions.

40. Insurance

Your Company has adequately insured all its properties including Plant and Machinery, Building and Stocks.

41. Change in Nature of business

No changes have been made in the nature of business carried out by the Company during the financial year 2018-19.

42. Acknowledgements:

Your Directors place on record their sincere appreciation gratitude to the continuing patronage and trust of our valued customers, bankers, financial institutions, business associates, shareholders and other statutory authorities who have extended their continued support and encouragement to your Company. Your Directors wish to convey their deep appreciation to the customers, dealers, distributors of the Company for their achievements in the field of sales and service and to suppliers and vendors and other business associates for their valuable support.

Your directors also place on record their sincere appreciation for the enthusiasm and commitment of all its employees for the growth of the Company and look forward to their continued involvement and support.

For and on behalf of the Board of Directors

Sd/- Sd/-
Jasbir Singh Ryait Surinder Singh Ryait
Chairman and Jt. Managing Director
Place: Ludhiana Managing Director
Date: 14th August, 2019 DIN:00104979 DIN:00692792