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Gujarat Automotive Gears Directors Report, Guj Auto Gears Reports by Directors
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Gujarat Automotive Gears

BSE: 505712|ISIN: INE705G01021|SECTOR: Auto Ancillaries
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Directors Report Year End : Mar '16    Mar 15

DIRECTORS’ REPORT

To,

The Members,

The Directors have pleasure in presenting the 45th Annual Report of the Company together with the audited accounts for the Financial Year ended March 31, 2016.

1. Financial summary or highlights/Performance of the Company

FINANCIAL RESULTS: (Rupees in lacs)

Particular

2015-2016

Rs.

2014-2015

Rs.

Operating Profit

645.92

742.81

Less : Depreciation

28.77

39.02

Total Profit for the year after depreciation but before tax

617.15

703.79

Less : Provision for taxation

207.00

231.98

Less : Provision for deferred tax assets / liabilities

0.21

-3.34

Profit after tax

409.94

475.15

Balance of profit brought forward from previous year

1973.33

1564.74

Profit available for appropriation

2383.27

2039.89

Less : Proposed dividend

12.25

12.25

Less : Tax on proposed dividend

2.49

2.51

Less : Transferred to general reserve

41.07

47.55

Less : Depreciation charged to Reserve & Surplus (P&L A/c)

--

4.25

Net profit carried forward to balance sheet

2327.46

1973.33

2. Dividend

The Directors are pleased to recommend for the approval of the shareholders a dividend at the rate of 35% per share (i.e. Rs 0.70 per share) each on the paid-up equity share capital of the Company with respect to the financial year 2015-2016 maintaining the same rate as that of F.Y. 2014-15.

3. Reserves

The Company proposes to carry Rs.41.07 lakhs to general reserve from net profit of the Company.

4. Brief description of the Company’s working during the year/State of Company’s affair

Total turnover during the year is Rs.2562.78 Lac (Previous Year Rs. 3049.51 Lac) showing decrease of 15.96% over the previous year and a profit after depreciation and interest of Rs. 617.15 Lac (Previous Year Profit of Rs. 703.79 Lac). Exports during the year were Rs. 2482.84 Lac as against Rs. 2925.01 Lac during the previous year. During the current year export sales are 96.88% of total turnover.

As in the past, during the coming years more focus will be on exports with regular visits to customers and tapping new customers at trade fairs and exhibitions.

5. Change in the nature of business, if any

There is no change in the nature of business during the financial year 2015-16.

6. Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

No material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

In the knowledge of Board no significant and material orders have been passed by any regulators or courts or tribunals impacting the going concern status and company''s operations in future during the financial year and or subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.

The Company has appointed internal auditor for adequacy of internal financial controls and your Board has taken adequate care for internal financial controls.

9. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement.

No details are given as your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

11. Deposits

Your Company has not accepted any deposit during the year and there was no deposit at the beginning of the year. Therefore the details relating to deposits, covered under Chapter V of the Act is not applicable.

12. Statutory Auditors

M/s. Kanu Doshi Associates LLP, Chartered Accountants, bearing FRN: 104746W, Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for reappointment.

The Company has obtained a letter of consent and also a certificate under section 139 and 141 of the Companies Act, 2013 from the Auditors to the effect that, their appointment, if made would be within the limits prescribed in the said section.

13. Auditors’ Report

No qualification, reservation or adverse remark or disclaimer has been made by the Auditors in their Auditors'' Report for the year 2015-16. The directors confirm that no frauds were reported by auditor under subsection (12) of section 143.

14. Share Capital

During the year under review, the Company has not issued any securities nor has granted any stock option or sweat equity.

15. Extract of the annual return

The extract of the annual return in Form No. MGT - 9 forming part of the Board''s report is attached herewith as (Annexure-A).

16. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are attached herewith (Annexure-B).

17. Corporate Social Responsibility (CSR)

The details on the CSR activities are enclosed as (Annexure-C).

18. Directors

A) Changes in Directors and Key Managerial Personnel

The following changes in Directors and Key Managerial Personnel were made during the financial year 2015-16:

Sr.

No.

Name of Director/ Key Managerial Personnel

Designation

Category

Date of Appointment

Date of Cessation

1

Anju Aggarwal [DIN: 00094267]

Additional Director [Non Executive Director]

Promoter Group

31.03.2015

30.05.2015

2

Diya Aggarwal [DIN: 07158255]

Additional Director [Non Executive Director]

Promoter Group

13.08.2015

29.09.2015

3

Ankit Jain1

[DIN: 02918898]

Non Executive Director

Independent

29.09.2015

--

4

Rajendra Prasad Sinha* [DIN: 02129566]

Non Executive Director

Independent

29.09.2015

--

5

Ravikant Dhawan* [DIN: 00101878]

Non Executive Director

Independent

29.09.2015

--

6

Anju Aggarwal [DIN: 00094267]

Additional Director [Non Executive Director]

Promoter Group

28.12.2015

B) Declaration by an Independent Director(s):

Declarations by Mr. Ankit Jain, Mr. Rajendra Prasad Sinha and Mr. Ravikant Dhawan Independent Directors that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 have been given.

The Board of Directors declares that the Independent Directors Mr. Ankit Jain, Mr. Rajendra Prasad Sinha and Mr. Ravikant Dhawan in the opinion of the Board are:

a) persons of integrity and they possess relevant expertise and experience;

b) not a promoter of the Company or its holding, subsidiary or associate company;

c) not related to promoters or directors of the company, or its holding, subsidiary or associate company;

d) have/had no pecuniary relationship with the company, its holding or subsidiary or associate company or promoters or directors of the said companies during the two immediately preceding financial years or during the current financial year;

e) none of their relatives have or had pecuniary relationship or transactions with the company, its holding, subsidiary or associate company or promoters or directors of the said companies amounting to two percent or more of its gross turnover or total income or fifty lakh rupees whichever is lower during the two immediately preceding financial years or during the current financial year;

f) neither they nor any of their relatives -

i. hold or have held the position of a key managerial personnel or are or have been employees of the Company or its holding, subsidiary, associate company in any of the three financial years immediately preceding the current financial year.

ii. are or had been employee or proprietor or a partner in any of the three financial years immediately preceding the current financial year of

a) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company

or

b) any legal or consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten percent or more of gross turnover of the said firm;

iii) hold together with their relatives two percent or more of the total voting power of the company or

iv) is a Chief Executive or director of any non-profit organization that receives twenty-five percent or more of its receipts from the company, any of the promoters or directors of the company or its holding, subsidiary or associate company or that holds two percent or more of the total voting powers of the company;

g) possess qualifications prescribed in Rule 5 of The Companies (Appointment and Qualification of Directors) Rules, 2014.

C) Formal Annual Evaluation.

The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and individual Directors which includes criteria for performance evaluation of executive directors and non-executive directors. The Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its committee. The Board of Directors has expressed their satisfaction with the evaluation process.

19. Number of meetings of the Board of Directors

Name of the Director

Category of the Director

Date of Board Meeting and attendance

30.05.2015

13.08.2015

05.11.2015

10.02.2016

Rajiv Aggarwal

Chairman & Managing Director

/

/

/

/

Ankit Jain

[Non Executive] Independent Director

/

/

-

/

Ravikant Dhawan

[Non Executive] Independent Director

/

/

/

/

Rajendra Prasad Sinha

[Non Executive] Independent Director

/

/

/

-

Anju Aggarwal

Additional Non Executive Director

-

-

-

/

Diya Aggarwal [13.08.2015 to 29.09.2015]

Additional Non Executive Director

-

-

-

-

20. Audit Committee

Audit Committee comprising of the following Directors of the Board:

Name

Category

Status

No. of Meeting Attended.

Mr. Ankit Jain

[Non Executive] Independent Director

Chairman

4/5

Mr. Rajiv Aggarwal

Managing Director

Member

5/5

Mr. Ravikant Dhawan

[Non Executive] Independent Director

Member

5/5

During the year from 01st April, 2015 to 31st March, 2016 the Audit Committee met five times on 30.05.2015, 13.08.2015, 05.11.2015, 10.02.2016, and 29.03.2016.

21. Nomination and Remuneration Committee

Nomination and Remuneration Committee comprising of the following Directors of the Board:

Name

Category

Status

No. of Meeting Attended.

Mr. Ankit Jain

[Non Executive] Independent Director

Chairman

3/3

Mr. Rajendra Prasad Sinha

[Non Executive] Independent Director

Member

2/3

Mr. Ravikant Dhawan

[Non Executive] Independent Director

Member

3/3

The Committee met on 30.05.2015, 13.08.2015 and 10.02.2016 during the year 01st April, 2015 to 31st March, 2016.

The policy formulated by nomination and remuneration committee:

The terms of reference of the committee inter alia include succession planning for Board of Directors and Senior Management Employees, identifying and selection of candidates for appointment of Directors/Independent Directors based on certain laid down criteria, identifying potential individuals for appointment of Key Managerial personnel and other senior managerial position and review the performance of the Board of Directors and Senior Management personnel including Key managerial personnel based on certain criteria approved by the Board. While reviewing the performance, the committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents, remuneration commensurate with the performance of individual/group and also maintains a balance between both short and long term objectives of the company.

22. Stakeholders Relationship Committee

Stakeholders Relationship Committee comprises of the following Directors of the Board.

Name

Category

Status

No. of Meeting Attended.

Mr. Ravikan Dhawan

[Non Executive] Independent Director

Chairman

1/1

Mr. Rajiv Aggarwal

Managing Director

Member

1/1

Mr. Ankit Jain

[Non Executive] Independent Director

Member

1/1

The Committee met once on 10.02.2016 during the year 01st April, 2015 to 31st March, 2016.

23. Details of establishment of whistle blower policy for directors and employees.

The Company has framed a whistle blower policy in terms of Companies Act, 2013 and the same may be accessed on the Company''s website. And that the every employee of the Company can directly report to the Chairman of the Audit Committee when she / he become aware of any actual or possible violation of the Code or an event of misconduct, act of misdemeanor or act not in the company''s interest.

24. Particulars of loans, guarantees or investments under section 186

The Company has given loans or guarantee or made an investment in the following manner during the financial year 20152016:

Sr.

no.

Particulars of Loan, Guarantee or investment

Amount In Rs.

Approved at Board meeting dated

1. % of Paid up Capital Free reserves Securities premium account or

2. % of Free reserves Securities premium account

Whether approval of Members vide SR taken

Other

Details

1.

Loan given to Him Teknoforge Limited.

Till the year end i.e. as on 31.03.2016 loan amount is Rs. 25.50 Crores.

Approval of loan amount exceeding Rs. 18 crore @ 12% p.a. for sum not exceeding Rs. 30 Crore by Board resolution dated 13.03.2015

1. 94.20% of Paid up Capital Free reserve Securities Premium Account.

2. 95.43% of Free reserves Securities Premium Account.

Members approved loan amount upto Rs. 50 crore by Special

Resolution dated 11.02.2015 through postal ballot.

During the year

Company earned interest of Rs.

2,52,89,865 on given loan.

As on 31.03.2015 loan amount is Rs. 17 Crores.

Approval of loan amount up to Rs. 18 crore @ 11% p.a. by Board resolution dated 14.05.2014

Further the Company states that the loan is given at a rate of interest not lower than the prevailing yield of one year, three year, five year or ten year government security closest to the tenor of loan.

The Company has not given guarantee or made an investment during the financial year 2015-16.

25. Particulars of contracts or arrangements with related parties:

Particulars of contracts or arrangements with related parties are given in Form AOC-2 enclosed as (Annexure-D).

26. Managerial Remuneration:

Disclosures pursuant to section 197(12) of the Companies Act,2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed herewith (Annexure-E).

27. Secretarial Audit Report_

The Secretarial Audit Report pursuant to section 204(1) of the Companies Act, 2013 given by M/s. Dinesh Mehta & Co., a company secretary in practice enclosed herewith (Annexure- F).

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

28. Corporate Governance Report (Clause 49)

The paid up share capital of the Company is below Rs. 10 crore and Net worth is below Rs. 25 Crore as per the audited Balance Sheet as at 31st March 2015, and therefore, the compliance with the corporate governance provisions as specified in regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D, and E of schedule V of Securities And Exchange Board of India (Listing Obligations And Disclosure Requirements) Regulations, 2015 as notified by Securities and Exchange Board of India vide notification No. SEBI/LAD-NR0/GN/2015-16/013 dated 2nd September, 2015 is not applicable to our Company during the financial year 2015-16.

29. Risk management policy

The Management has put in place adequate and effective system and man power for the purposes of risk management. In the opinion of the Board, there are no risks which would threaten the existence of the Company.

30. Directors’ Responsibility Statement

Your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) that 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) that the directors had prepared the annual accounts on a going concern basis;

(e) that 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) that 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.

31. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has adopted a policy in line with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rule there under. All employees (permanent, contractual, temporary, trainees) are covered under the said policy. Internal Complaints Committee has also been set up to redress complaints received on sexual harassment.

During the financial year under review, the Company has not received any complaints of sexual harassment from any of the women employee of the Company.

32. Acknowledgements

The Board of Directors gratefully acknowledge the assistance and co-operation received from the State Bank of India and all other statutory and non-statutory agencies for their co-operation.

The Board of Directors also wish to place on record their gratitude and appreciation to the members for their trust and confidence shown in the Company.

The Board of Directors would like to especially thank all the employees of the Company for their dedication and loyalty.

By Order of the Board of Directors

Dated : 11.08.2016 Rajiv Aggarwal

Place : Vadodara Chairman & Managing Directo

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