DIRECTORS' REPORT To, The Members, G. G. AUTOMOTIVE GEARS LIMITED Your Directors have great pleasure in presenting their 41st Annual Report along with the Audited Balance Sheet and Profit and Loss Account for the year ended 31st March 2015. TRANSFER TO RESERVES: There are no transfers to any specific reserves during the year. REVIEW OF FINANCIAL OPERATIONS During the year your Company has reported a total turnover of Rs. 22,42,78,723/- (Rupees Twenty Two Crore Forty Two Lakhs Seventy Eight Thousand Seven Hundred and Twenty Three Only). However the total expenditure incurred by the Company during the year under review amounted to Rs.21,74,76,917/- (Rupees Twenty One Crore Seventy Four Lakhs Seventy Six Thousand Nine Hundred and Seventeen Only) During the year, due to sluggish and adverse market trend your Company has reported a reduced amount of net profit of Rs. 46,51,131/- (Rupees Forty Six Lakhs Fifty One Thousand One Hundred and Thirty One Only) as compared to net profit of Rs. 61,13,887/- (Rupees Sixty One Lakhs Thirteen Thousand Eight Hundred and Eighty Seven Only) in previous year. DIVIDEND Your Directors do not recommend dividend for the year 31st March, 2015 with a view to conserve the resources. DIRECTORS During the year Mr. Ram Gajra, Managing Director, who retires by rotation as per the provisions of Articles of Association of the Company at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The Board of Directors in compliance with the provisions of sub section (1) of Section 149 of the Companies Act 2013 and Clause 49 of the Listing Agreement, appointed Mrs. Ruchi Sogani as an additional Non-Executive Independent Director and thus offers herself for regularization at the ensuing Annual General Meeting of the Company. During the year under review, the members approved the appointment of Mr. Pravin Kumar Shishodiya and Mr. Sailendra Ajmera as Independent Directors. *NUMBER OF MEETINGS OF THE BOARD: During the financial year 2014-15, Five (5) Board Meetings were held on the following dates. The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:- No. Date of Meeting 1 30th May 2014 2 25th July 2014 3 16th October 2014 4 29th January 2015 5 31st March 2015 INDEPENDENT DIRECTORS: In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director. In terms of Clause 49 of the Listing Agreement, the Company has adopted a familiarization programme for Independent Directors. The details of the said programme is available on the website of the Company i.e. www.ggautomotive.com under the link http:// www.ggautomotive.com/pdf/Familiarisati-n-programme-for-independent-directors.pdf *POLICY ON DIRECTORS'APPOINTMENT AND REMUNERATION: In terms of provisions of Section 178 of the Companies Act, 2013 read with revised Clause 49 of the Listing Agreement, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. Constitution of the Nomination and Remuneration Committee: The Board has changed the nomenclature of Remuneration Committee constituted under the erstwhile Companies Act, 1956 by renaming it as Nomination and Remuneration Committee on 07 May, 2014. The Nomination and Remuneration Committee comprises of following Directors: Sr. No. Committee Members Position in the Committee 1 Mr. Pravin Kumar Shishodiya (Independent, non-executive) Chairman 2 Mr. Shailendra Ajmera (Independent, non-executive) Member 3 Mr. Ram Gajra (Promoter, Director) Member The said policy is available on the website of the Company i.e. www.ggautomotive.com under the link http:// www.ggautomotive.com/pdf/Nomination-&-Remunerati-n-Policy.pdf. EVALUATION PROCESS: The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company. The certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors have been fixed by the Board on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013. The evaluation policy is available at the link http://www.ggautomotive.com/pdf/boards-performanc-evaluation.pdf KEY MANAGERIAL PERSONNEL: The Board of Directors of the Company has designated following Directors/Officials of the Company as Key Managerial Personnel (KMP) of the Company in terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges: 1. Mr. Ram Gajra, Managing Director. 2. Mr. Kennedy Gajra, Joint Managing Director & CEO. 3. Mr. Narayan Shrivas, CFO. No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31st March 2015. DISCLOSURES UNDER COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014: The information pursuant to Section 197 of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 relating to median employee's remuneration will be made available at the registered office of the Company during working hours for a period of twenty-one (21) days before the date of the meeting, i.e from 10th September, 2015 till 30th September 2015 both days inclusive i.e the date of ensuing Annual General Meeting PARTICULARS OF EMPLOYEES: There are no employees in the Company, who if employed throughout the financial year, were in receipt of remuneration, whose particulars if so employed, are required to be included in the report of the Directors in accordance with the provisions of Rule 5 (2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. CORPORATE SOCIAL RESPONSIBILITY: The company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable for the period under review. AUDIT COMMITTEE: Pursuant to provisions of Section 177 of the Companies Act 2013 and clause 49 of the Listing Agreement the Audit Committee shall have minimum three directors as member with Independent Directors forming the majority. SUBSIDIARIES/JOINT VENTURES/ASSOCIATE COMPANIES: The Company operates as a single entity with no subsidiaries or Joint Venture or Associate Companies as explained within the meaning of the Companies Act, 2013. Since the Company has no Joint Venture or Associate Companies the company is not required to give information in AOC-1 as required under Companies Act, 2013. DEPOSITS: During the year under review, the Company did not accept any deposits. The Company does not have any Unclaimed Final Dividend to be transferred to the Unpaid Dividend Account of the Company. AUDITORS: The Statutory Auditors, M/s Shah Gandhi & Company, Chartered Accountants (FRN: 109569W) had been appointed as Statutory Auditors of the Company in the 40th Annual General Meeting held on 01August, 2014 for a period of 3 (Three) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 40th AGM to the third consecutive Annual General Meeting from the 40th AGM in the Calendar year 2017 (subject to ratification by the members at every Annual General Meeting). Therefore, the consent of members for ratification of appointment of Statutory Auditors to hold office from the ensuing Annual General Meeting of the Company till the next Annual General Meeting of the Company in calendar year 2016 is being sought in the ensuing Annual General Meeting. REPORT ON FINANCIAL STATEMENTS There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Shah Gandhi and Company, Chartered Accountants Statutory Auditors, in their report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review. SECRETARIAL AUDIT: The Board has appointed M/s HS Associates, Practicing Company Secretaries as Secretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the financial year ended 31March, 2015 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure - "A" to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark other than 1. The company has not appointed Company Secretary as required under section 203 read with rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 2. Internal Auditor for the Financial Year 2014 - 2015 as required under section 138 Companies Act, 2013 was not appointed. Directors clarification on observation of secretarial Auditor: Due to unavailabilty of appropriate person for the post of internal auditor and company secretary, the said positions have not been filled up during the financialy year. However the company is in the process of recruiting the right talent and the same would be completed in the financial year 2015-2016. COST AUDIT: In pursuant to Companies (Cost Records and Audit) Amendment Rules, 2014 notified by the Ministry of Corporate Affairs (MCA) on 31 December, 2014, the Company shall not be mandatorily required to get its Cost Records for the financial year 2014-15 and 2015-2016 audited in terms of provisions of Section 148 of the Companies Act, 2013 as the Industry under which the Company falls has been exempted from the Cost Audit by MCA vide Companies (Cost Records and Audit) Amendment Rules, 2014. Therefore, the audit of cost records for the financial year ended on 31 March, 2015 has not been undertaken by M/s Turakhia & Associates, Cost Accountants in terms of the Companies (Cost Records and Audit) Amendment Rules, 2014. INTERNAL AUDITORS: The company has not appointed internal auditors as required under Section 138 of the Companies Act 2013. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY: G. G. Automotive Gears has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. WHISTLE BLOWER POLICY/ VIGIL MECHANISM: In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organisation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees. It protects employees wishing to raise a concern about serious irregularities, unethical behavior, actual or suspected fraud within the Company by reporting the same to the Audit Committee. Protected disclosure can be made by the whistle blower in a closed and secured envelope or send through e-mail to the Compliance Officer. During the year under review, no employee was denied access to the Audit Committee. The policy on vigil mechanism is available on the website of the Company i.e. www.ggautomotive.com under the link http://www.ggautomotive.com/pdf/Whistle-Blower-Vigil-Mechinism-policy.pdf RECONCILIATION OF SHARE CAPITAL AUDIT: As per the directive of the Securities and Exchange Board of India (SEBI), the Reconciliation of Share Capital Audit is undertaken by a firm of Practicing Company Secretaries on quarterly basis. The audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company. The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis was forwarded to the BSE Limited, Mumbai where the original shares of the Company are listed. LISTING OF SHARES: The Equity Shares of the Company are listed on the BSE Limited, Mumbai. DISCLOSURES UNDER SECTION 134 OF THE COMPANIES ACT, 2013: Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO: The information in accordance with the provisions of Section 134(3) (m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure B to this Report. EXTRACT OF ANNUAL RETURN: In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure C to this report. COURT/TRIBUNAL ORDERS: There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. INDUSTRIAL RELATIONS: During the year under review, industrial relations in the Company continued to be cordial and peaceful. MANAGEMENT DISCUSSION AND ANALYSIS: A detailed analysis of the Company's operations in terms of performance in markets, manufacturing activities, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report. DIRECTORS'RESPONSIBILITY STATEMENT: Pursuant to Section 134(3) (c) of the Companies Act, 2013, your Directors confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 as at 31 March, 2015 and of the profit and loss of the Company for the period ended on that date; (c) the directors had 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; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. RELATED PARTY CONTRACTS AND ARRANGEMENTS: The particulars of the undergoing contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Company Act, 2013 were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Clause 49 of the Listing Agreement is available on the website of the Company i.e. www.ggautomotive.com under the link http://www.ggautomotive. com/pdf/RPT-policy.pdf The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure D to this report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT: During the period under review, the Company has not made any loan, guarantee or investment in terms of provisions of Section 186 of the Companies Act, 2013. SHIFTING OF REGISTERED OFFICE: The company is in the process of shifting its Registered Office of the Company from the "state of Maharashtra" to the "State of Madhya Pradesh". The Company has passed a special resolution by the members of the Company through Postal Ballot, result thereof was declared by scrutinizer Mr. Hemant Shetye, Partner of HS ASSOCIATES, Practising Company Secretaries on 04th July 2015 the result is uploaded on the website of the company at www. ggautomotive.com and the company has filed a petition with the Regional Director vide e-form GNL - 2 for which the order is pending as on date of this report. CORPORATE GOVERNANCE The Board is pleased to inform that the Company has complied with the mandatory requirements as applicable to the company of the Corporate Governance as detailed in Clause 49 of the Listing Agreement. A separate statement on Management Discussion and Analysis and Corporate Governance is enclosed as a part of the Annual Report along with the certificate of the Statutory Auditors, Shah Gandhi & Company, Chartered Accountants confirming compliance of the code of Corporate Governance. ACKNOWLEDGEMENTS Your Directors take this opportunity to express their gratitude for the assistance and continued co-operation extended by Banks, Government authorities, clients, and suppliers. The Directors are pleased to record their sincere appreciation for the devotion and sense of commitment shown by the employees at all levels and acknowledges their contribution towards sustained progress and performance of your Company. By Order of the Board For G. G. AUTOMOTIVE GEARS LIMITED Ram Gajra (Din 02092248) Chairman Place: Mumbai Date: 13th August 2015. |