GNA Axles Ltd Directors Report.
The Directors of your Company have pleasure in presenting their 26th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2019.
The Company was incorporated in 1993 and thereafter it transformed from a small auto components manufacturer to a large Axle Shafts manufacturer and enjoys a formidable position in both national and global markets. The Company has its corporate headquarters at Mehtiana in Hoshiarpur Punjab.
FINANCIAL RESULTS AND ANALYSIS
The Financial results for the year are as under:-
|Particulars||Year ended on 31st March, 2019||Year ended on 31st March, 2018|
|Net operating Revenue||92,827.99||67,013.52|
|Profit Before Depreciation, Interest and Tax||14,547.71||10,591.96|
|Profit before Depreciation and Tax||13,737.28||9,882.51|
|Profit before Tax||10,264.07||7,402.48|
|Profit after tax||6,586.46||5,088.43|
|Earnings Per Share|
FINANCIAL ANALYSIS AND REVIEWOF OPERATIONS: Sales
Revenue from operations increased by र 25,814.48 Lacs to र 92,827.99 Lacs for the Fiscal 2019 from र 67,013.51 Lacs for the Fiscal 2018, or an increase of 38.52 %. Export sales increased by र 19,133.68 Lacs to र 49,164.90 Lacs for the Fiscal 2019 from र 3,0031.22 Lacs for the Fiscal 2018. Domestic net revenue from operations increased by र 7,181.06 Lacs to र 42,544.94 Lacs in the Fiscal 2019 from र 27,943.41 in the Fiscal 2017, or an increase of 20.31%. The Increase in revenue was on account of better demand in the Off Highway and CV segment both in Domestic and Export Markets.
The company earned Profit before Tax of र 10,264.07 Lacs during the year under review against र 7,402.48 Lacs for the Fiscal 2018 showing an increase of 38.66%.
Profit after tax increased by र 1,498.03 Lacs to र 6,586.46 Lacs for the Fiscal 2019 from र 5,088.43 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 31st March, 2019 were र 24,454.70 Lacs as against previous years value of र 19,069.37 Lacs .
The net current assets as on 31st March, 2019 were
र 19,990.72 Lacs as against र 14,911.89 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 र 2.00 per Equity Share) to the shareholders of the Company for their consideration and approval at the ensuing Annual General Meeting of the Company. The dividend @ 27.50 %, if approved at the forthcoming Annual General Meeting, will result in the outflow of र 590.30 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 not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity shares or warrants. None of the Directors of the Company hold instruments convertible into Equity Shares of the Company as on March 31, 2019.
SUBSIDIARIES, JOINTVE NTURES AND ASSOCIATE COMPANIES
The Company has one subsidiary namely GNA Axles Inc. incorporated in Michhigan USA. The subsidiary 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 not have any associate or joint venture Company.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with the 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, as required under SEBI (LODR), Regulations 2015 in provided in a separate section and forms an integral part of this Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY 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 the position of the Company which have occurred between the end of the financial year under review and the date of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:
Your company has formulated its Corporate Social Responsibility required under section 135 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 to the people.
2. To promote Education and help in delivering quality education to the society and students.
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 the Companies(Corporate Social Responsibility) Rules, 2014 and amendments thereto.
The disclosures under Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules2014 i.e. Annual Report on CSR activities for Financial Year 2018-19 is attached herewith in Annexure 2.
The Board of Directors of the Company had formulated and approved the Risk Management Policy 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 and protect shareholder value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risks is an integral part of every employees job.
The Risk Management Policy of the Company may be accessed on the Companys Website at the 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 financial statements are well placed and are commensurate with the size and nature of operations of the Company. The Statutory Auditors report on the internal financial controls, as required under section 143 of the Companies Act 2013 forms part of the Independent Auditors Report as Annexure B.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWIT H RELATED PARTIES:
The Company has not entered into any contract or arrangement with related parties during the period under review expect payment of remuneration to the Executive Directors.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loan, provided any guarantee, provided any security or made 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 Association of the Company, Mr. Kulwin Seehra, Mr. Jasvinder Singh and Mr. Ranbir Singh Directors of your Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers themselves for re-appointment. The Board of Directors recommends 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 upon the recommendation of the Nomination & Remuneration Committee had appointed Lt. General Praveen Bakshi (Retd.) as Additional Independent Director of the Company for a tenure 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 be approved by the members in the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Lt. Gen.
Praveen Bakshis (Retd.) name for the office of Director. According the Board recommends the resolution relating to the appointment of Gen. Bakshi (Retd.) for approval of the members. Brief profile of Gen. Bakshi (Retd.) has been given in the notice convening Annual General Meeting.
Pursuant to provisions of Section 203 of the Companies Act, 2013, the Company has designated below mentioned persons as KMPs :-
|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 year under review.
Declaration under Section 149(6):
The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and read with the relevant rules.
Companys Policy relating to the Directors appointment, Payment of remuneration and other matters related thereto.
The Board of Directors of the Company had formulated and approved the Nomination and Remuneration Policy of the Company which includes the criteria determining the qualifications and other matters as provided under section 178(3) of the Companies Act 2013.
The Nomination and Remuneration Policy of the Company is annexed hereto and forms part of this report as Annexure 3.
Familiarisation programmes for Board Members:
The Board members are from time to time provided with necessary documents/policies/internal procedures to get them familiar with the practices of the Company. The business strategies, performance, global developments, legal& other updates, compliance reports and other relevant information/ reports etc are being periodically provided to the Board of Directors.
The Company has put in place the policy for performance evaluation of the Individual Directors 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 held on 29th March 2019 to evaluate the performance of the Non Independent Directors of the Company, the Chairman of the Company and Board as a whole. The evaluation was done by discussing the performance of the Individual Directors and the Board as a whole.
AUDITORS AND AUDITORS REPORT: a. Statutory Auditors
The shareholder of the Company in their 24th Annual General Meeting held on 5th September, 2017 had appointed M/S Harish & Co., Charted Accountants Jalandhar as Statutory Auditors of the Company for a period of 5 years. Mr. Harish Kumar Monga, the prop. of M/S Harish & Co. passed away in February 2019. The Board of Directors of the Company in their meeting held on March 29, 2019 upon their recomendations of the Audit Committee recommended the name of M/S Harish & Co, Charted Accountants, Jalandhar, to the 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 appointed M/S Harish & Co. Charted Accountants as Statutory Auditors of the Company till next Annual General Meeting of the Company As, the tenure of M/S Harish & Co, Charted Accountants as the Statutory Auditors of the Company is going to end at the conclusion of the ensuing AGM of the Company, the Board of Directors of the Company in their meeting held on 12th July, 2019, upon the recommendation of the Audit Committee, had appointed M/S Harish & Co. Charted Accountants, Jalandhar as Statutory Auditors of the Company for a term of 5 years from the conclusion of 26th AGM of the Company till the conclusion of 31st AGM of the Company, subject to the approval of the shareholders of the Company in the ensuring Annual General Meeting to be held on August 23, 2019. The board recommends the appointment of M/S Harish & Co., Charted Accountants, Jalandhar as Statutory Auditors of the Company for a tenure of 5 years.
Further, the Statutory Auditors of the Company M/S Harish & Co. have submitted Auditors Report on the Standalone and Consolidated accounts of the Company for the Financial year ended March 31, 2019. The Auditors Report is self explanatory and do not call for any comments.
b. Secretarial Auditor
M/s H.K & Associates , Practicing Company Secretaries, were appointed as Secretarial Auditor for the year 2018-19. The Report of the Secretarial Auditor in form no MR-3 is annexed to this Report. The Secretarial Audit Report is self explanatory and do not call for any comments. The Secretarial Audit Report forms part of this report as Annexure 4.
During the Financial Year 2018-19, the Board met 6 times on10th April, 2018, 28th May, 2018, 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 Singh Kaushik (Retd.), Independent Director, Mr. Jasminder Singh Johal, Independent Director, Mr. Ranbir Singh Executive and Non Independent Director Air (Cmde.) Shailindra Singh Kaushik (Retd.) is the Chairman of the 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 has established a "Vigil Mechanism" incorporating Vigil Mechanism Policy which also incorporates the Whistle Blower Policy in terms of rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, frauds or violation of the codes of conduct. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Policy on Vigil Mechanism as approved by the Board of Directors can be accessed on the Companys 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 Report of the Company. The Statutory Auditors of the Company have given their certificate regarding the compliance of the conditions of Corporate Governance as stipulated under the SEBI (LODR) Regulations, 2015 and the same is annexed to the report on Corporate Governance.
ENERGY CONSERVATION, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO:
Conservation of energy has been a major area of emphasis of your Company and every effort is made to achieve the optimumutilizationofenergyincarryingoutthemanufacturing processes. Particulars with respect to conservation of energy and other areas as per section 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 with Companies (Amendment) Act 2017 and the relevant rules made thereunder, a copy of the Annual Return as prescribed under Section 92 of the Companies Act, 2013 as amended shall be 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 the endeavor of the Company to attract and retain talent. Performance management is the key word for the Company. The Industrial relations have been peaceful and harmonious in both the plants of the Company during the year under review. As on 31st March 2019 1201 personnel were employed by the Company.
PERSONNEL & RELATED INFORMATION:
The disclosures required under section 197(12) of the Companies Act 2013 and Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure 6 and forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors of the company confirm that:
1. In the preparation of the annual accounts, the applicable Accounting Standards have been followed;
2. Appropriate accounting policies have been selected and applied consistently, and have 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 and of the profit or loss of the Company for that period;
3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets 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 be followed by the Company and such internal financial controls are adequate and were operating effectively.
6. Devised proper systems to ensure compliance with the provisions of all applicable laws and those systems were adequate and operating effectively.
Your directors state that no disclosure or reporting is required in respect of the following 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 /Tribunal which 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 Statutory Auditors to report to the Audit Committee/Board of Directors under section 143(12) of the Act and rules framed there under.
Your Directors are pleased to place on record their appreciation to the Shareholders, Government Authorities, Financial Institutions, Bankers and other Statutory Authorities for their continued and valuable support to the Company.
Your Directors express their deep gratitude and appreciation to the employees at all levels for their continued and devoted services and sincere efforts. The Company feels confident of continued cooperation and efforts from them in future also.
|For And on Behalf of the Board|
|Date: 12th July, 2019 Ranbir Singh|
|Place: Mehtiana||CEO & Wholetime Director|