To, The Members,
GG AUTOMOTIVE GEARS LIMITED.
Your Directors have great pleasure in presenting 50th Annual Report along with the Audited Balance Sheet and Profit and Loss Account, for the year ended 31st March, 2024.
1. FINANCIAL RESULTS:
2. FINANCIAL OPERATIONS & STATE OF AFFAIRS OF THE COMPANY:
During the year, your Company has reported a total turnover of 95,28,20,246/- (Rupees Ninety Five Crore Twenty-Eight Lacs Twenty Thousand and Two Hundred Forty Six only). And the total expenditure incurred by the Company during the year under review amounted to Rs. 89,36,17,666/-(Rupees Eighty Nine Crore Thirty Six Lacs Seventeen Thousand Six Hundred & Sixty Six Only).Profit amounted to Rs. 4,43,20,219/- (Rupees Four Crore Forty Three Lacs Twenty Thousand Two Hundred & Nineteen Only).
As on date of this Annual Report Company has issued equity share of 7,13,833 to its Non-Promoter and 4,55,000 Shares to its Promoter Category via conversion of Warrants through which company raised Rs. 5,25,97,485/-.
Your Directors, constantly putting their efforts to develop new products for domestic and export, to improve revenue and profit of your company.
3. CHANGE IN THE NATURE OF THE BUSINESS
The company is engaged in the business of Manufacturing of Railway Gears & Pinions, Industrial Gear, and Industrial Gear Boxes etc. There has been no change in the business of the company during the financial year ended 31st March, 2024.
4. FUTURE PROSPECTS OF THE COMPANY
To maintain our dominant presence in the Indian Railways and explore newer markets globally with key areas being East Asia & the America. There have been numerous projects undertaken under the R&D wing of the company that should reach fruition in the near future and complement our pursuit of growth.
5. TRANSFER TO RESERVES:
There are no transfers to any specific reserves during the year.
6. MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
1. During the period, the company has taken approval from Board of Directors on 08th September, 2023 & Shareholders' approval in
EGM dated 30th September, 2023 for:
a. Increased the Authorised Share Capital of the Company from existing Rs. 8,00,00,000 (Rupees Eight crore) divided into 80,00,000 (Eighty-Lakhs) Equity Shares of Rs.10/- each to Rs.10,00,00,000 (Rupees Ten Crore) divided into 1,00,00,000 (One Crore) Equity Shares of Rs. 10/-each ranking paripassu in all respect with the existing Equity Shares of the Company as per the Memorandum and Articles of Association of the Company
b. Issue and allotment of 4,15,000 Equity Shares of face value of Rs. 10/- each at an issue price of Rs. 60./-(including Premium of Rs. 50 per share) aggregating to Rs. 2,49,00,000 (Rupees Two-Crore Forty-Nine Lakhs only) to Promoter and to create, offer, issue and allot in one or more tranches up to 16,58,833 (Sixteen Lakhs Fifty-Eight Thousand Eight Hundred Thirty-Three) Share Warrants Convertible into Equivalent Equity Shares at a price of Rs. 60./-(including Premium of Rs. 50 per share) per Share Warrant, each convertible into One (1)Equity Share of face value of Rs. 10/- each aggregating to Rs. 9,95,29,980/- (Rupees Nine Crore Ninety-Five Lakhs Twenty-Nine Thousand Nine Hundred Eighty only) to group of person under Promoter and Non-Promoter Category.
c. The amount raised and mentioned above consist of 100% of application money for 415000 (Four Lac Fifteen Thousand) Equity shares and 25% of 1658833 (Sixteen Lac Fifty Eight Thousand Eight Hundred & Thirty Three) Warrants allotted to allotees amounting to Rs. 4,97,82,495/- (Rupees Four Crore Ninety Seven Lac Eighty Two Thousand Four Hundred & Ninety Five only). The said amount was totally deployed and the entire amount was spent for the purpose mentioned in the offer document.
2. In-principle approval under Regulation 28(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been obtained for the above mentioned allotment of 415000 (Four Lac Fifty Thousand) Equity shares as on 25th October, 2023. Further Listing approval for the same has being obtained by BSE on 05th December, 2023 & Trading approval on 21st December, 2023.
3. The above results were reviewed by the Audit Committee and approved by the Board of Directors at their respective meeting held on 18th January 2024. The Statutory Auditors of the Company have carried out a Limited Review of the Results for these financial.
4. Company business activity falls within a Single primary business segment i.e. Manufacturing of Railway Gears.
7. DIVIDEND:
In view of conserving the resources, your company has not recommended any dividend for the year under review.
8. CASH FLOW STATEMENTS:
As required under Regulation 34 of the Listing Regulations, a Cash Flow Statement is part of the Annual Report.
9. CONSOLIDATED FINANCIAL STATEMENT:
The Company does not have any subsidiaries as on 31stMarch, 2024 and hence not required to publish Consolidated Financial Statements.
10. PUBLIC DEPOSITS:
During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
11. NUMBER OF BOARD MEETINGS AND ITS COMMITTEES:
During the year under review, 7 (seven) Board Meeting were held as under:
12. COMMITTEES OF THE BORAD
The Company's Board has the following committees:
1. Audit, Risk and Compliance Committee
2. Nomination and Remuneration Committee
3. Shareholders/Investors Grievance Committee (Stakeholders'
Relationship Committee)
The said committee consists of 3 (Three) Members out of which 2 (Two) members are Independent and 1 (one) is Promoter Director.
13. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND VIGIL
MECHANISM
A. Audit Committee comprises of following members:
The Company has established a vigil mechanism policy to oversee, the genuine concerns expressed by the employees and other Directors.
The 2nd Term of Mr. Pravin Kumar Shishodiya& Mr. Shailendra Ajmera has ceased as on 31st March, 2024. However, Mr. Pravin Kuman Shishodiya is appointed in the capacity of Non-Executive Director.
The Audit Committee reviewed company to raise capital of Rs. 3,56,07,495/- (Three Crores Fifty Six Lakh Seven Thousand Four Hundred and Ninety Five Only) in FY 2023-24 via issue of 4,15,000 (Four Lakh Fifteen Thousand) Equity Share Capital to Promoters and 7,13,833 (Seven Lakh Thirteen Thousand Eight Hundred and Thirty Three) Warrants at Rs. 60 each in which Rs. 10 (Ten) is face value and Rs. 50 (Fifty) is premium, being 25% of the amount received in FY 2023-24. The said money was deployed and used as per the terms of offer document, there is no deviation with the object for which the amount was raised and no money is pending to be spent.
B. Nomination and Remuneration Committee comprises of following members:
The 2nd Term of Mr. Pravin Kumar Shishodiya & Mr. Shailendra Ajmera has ceased as on 31st March, 2024. However, Mr. Pravin Kuman Shishodiya is appointed in the capacity of Non-Executive Director.
C. Stakeholders Relationship Committee comprises of following members:
14. MEETING OF COMMITTEES OF BOARD
During the year there were in total 4 (Four) Audit Committee Meetings, 2 (Two) Nomination & Remuneration Committee and 1 (One) Stakeholders Relationship Committee were held. a. Audit Committee
b. Nomination and Remuneration committee
c. Stakeholder relationship Committee
15. INDUSTRIAL RELATIONS:
Your Company has always considered its workforce as its valuable asset and continues to invest in their excellence and development programs. Your Company has taken several initiatives for enhancing employee engagement and satisfaction.
16. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Shri Kennedy Ram Gajra, Managing Director & CEO, Mr. Anmol Gajra, Whole time Director, Shri Manoj Sharma, CFO and Ms. Lata Narang as a Company Secretary of the Company are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).
Mr. Kennedy Ram Gajra (DIN NO: 02092206) was re-appointed as the Managing Director of the Company, for the period of three years i.e. 1stJuly 2024 to 30thJune 2027 on remuneration upto Rs. 168 Lakhs subject to members approval at this AGM. The remuneration of Anmol Gajra is proposed to be revised subject to approval of Shareholders w.e.f. 1st October, 2024 upto Rs. 168 Lakhs.
The 2nd Term of Mr. Pravin Kumar Shishodiya & Mr. Shailendra Ajmera has ceased as on 31st March, 2024. However, Mr. Pravin Kuman Shishodiya is appointed in the capacity of Non-Executive Director to be approved in the ensuing General Meeting.
Disclosure Relating to Remuneration of Directors, Key Managerial Personnel and particulars of Employees:
The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force).
The Managing Director & CEO of your Company does not receive remuneration from any of the subsidiaries of your Company.
The information required under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is set out in Annexure IV to this report.
17. LISTING OF SHARES:
The Equity Shares of the Company are listed on BSE Limited, Mumbai. The Company has paid the Listing Fees for the Financial Year 2023-24 and Financial Year 2024-25.
18. EXTRACT OF ANNUAL RETURN:
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure II and is attached to this Report. The copy of Draft Annual Report or MGT 7 form can be found on the official website of the Company.
19. DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors hereby confirms:
i) That in the preparation of the annual accounts, the applicable accounting standard had been followed along with proper explanation relating to material departures.
ii) That the 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 and of the Profit or Loss of the Company for that period.
iii) That the Directors have taken proper and sufficient care for the maintenances of adequate accounting records in accordance with the provision of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) That the Directors have prepared the Annual accounts on a going concern basis. v) 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.
vi) 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.
20. ATTRIBUTES, QUALIFICATIONS & INDEPENDENCE OF DIRECTORS,
THEIR APPOINTMENT AND REMUNERATION
The Nomination & Remuneration Committee of Directors have approved a Policy for Selection, Appointment and Remuneration of Directors which inter-alia requires that composition and remuneration is reasonable and sufficient to attract, retain and motivate Directors, KMP and senior management employees and the Directors appointed shall be of high integrity with relevant expertise and experience so as to have diverse Board and the Policy also lays down the positive attributes/criteria while recommending the candidature for the appointment as Director.
21. DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(7) 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 the relevant rules.
22. POLICY ON DIRECTORS APPOINTMENT, REMUNERATION & BOARD
PERFORMANCE:
During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman, who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc.
The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors.
The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. In the opinion of the Board, Independent Directors are of high integrity with relevant expertise and experience.
23. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
1. The meetings of the Board of Directors of the Company are normally organized at manufacturing plant of the Company and every time, a visit is organized for the Directors, including Independent Directors along with a direct interaction with the heads of production processes to provide a brief idea to the Directors of the production processes and operations of the Company.
2. An elaborated note on business operations with regard to the operations and financial position of the Company as at the end of each quarter is circulated to the Board members with the Agenda of each Board Meeting and also presented at the meeting in the form of a power point presentation. The same is duly deliberated upon at the Meeting in presence of the Key Managerial Personnel who answer the queries of the Directors, if any arising out of such reports to the satisfaction of the Directors.
3. The Company strives towards updating the Directors of any amendments in laws, rules and regulations as applicable on the Company through various presentations at the Board Meeting(s) in consultation with the Statutory Auditors, Internal Auditors and the Secretarial Auditors of the Company like wise the Companies Act, SEBI Laws, Listing Agreement and such other laws and regulations as maybe applicable.
4. The Company has framed Code of Conduct and Ethics and Code of Conduct for prevention of Insider Trading respectively which all the Directors need to comply with. The said code(s) of conduct are placed before the Board for review so as to familiarize the Directors withthe codes and ensure that the said code(s) are in conformity with the latest laws, rules and regulations.
Disclosure: This familiarization process is uploaded on the official website of the Company i.e https://ggautomotive.com/policies/
Review:
The familarisation process shall be reviewed at regular intervals to analyse if there is a need to amend the same as may be deemed necessary to keep the Directors of the Company informed of the operations of the Company vis-a-vis the latest developments vis-a-vis the laws and regulations as applicable on the Company for the time being in force.
24. ANNUAL EVALUATION BY THE BOARD
In compliance with the Companies Act, 2013, and Regulation 17 of the Listing Regulations, the performance evaluation of the Board and its Committees were carried out during the year under review.
25. STATUTORY AUDITORS:
M/s. S. N. Gadiya& Co. (Firm Registration No. 002052C) having Peer Review No.012731, is appointed as the Statutory Auditors of the Company for a period of Five (5) consecutive years to hold office from the conclusion of this Annual General Meeting till the conclusion of the 54th Annual General Meeting to be held in the year 2028.
26. SECRETARIAL AUDITORS
The Company has appointed M/s. HSPN & Associates LLP (formerly known as HS Associates), Practicing Company Secretaries, Mumbai, as Secretarial Auditors of the Company to carry out the Secretarial Audit for the Financial Year 2023-24 and to issue Secretarial Audit Report as per the prescribed format under rules in terms of Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
27. SECRETARIAL AUDIT REPORT:
The Board of Directors of the Company has appointed M/s. HSPN & Associates LLP (formerly known as HS Associates), Practicing Company Secretaries; to conduct the Secretarial Audit for the Financial Year 2023-24 and their Report on Company's Secretarial
Audit is appended to this Report as Annexure I.
Auditors observation:
1. Pursuant to Regulation 31(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 100% of the
Promoters Shareholding is not in Demat Mode and, 2,45,732 (Two Lacs Forty Five Thousand Seven Hundred & Thirty Two) Equity Shares of Rs. 10 each constituting 8.16% held by Promoters are yet to be dematerialized.
Directors Comments: The same is in process.
2. The 2nd (Second) term of Mr. Pravin Kumar Shishodiya- Independent Director & Mr. Shailendra Ajmera- Independent Director has ceased as on 31st March, 2024. However, no appointment in their place has filled due to which reconstitution of the committees are pending. Mr. Pravin Kuman Shishodiya is appointed in the capacity of Non-Executive Director and Mr. Shailendra Ajmera cease to be Director w.e.f. 31st March, 2024.
28. COST AUDITORS
The provision of Cost Audit as per section 148 of Companies Act, 2013 and rule there under is not applicable to the company.
29. COMMENTS ON STATUTORY AUDITOR'S REPORT:
There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. S. N. Gadiya& Co. Statutory Auditors, in their report.
30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE
UNDER SECTION 186 OF THE COMPANIES ACT, 2013
There are no Loans, Guarantees or Investment made by the Company under Section 186 of the Companies Act, 2013.
31. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH
RELATED PARTIES
The particulars of contracts or arrangements with related parties referred to in Section 188(1), as prescribed in Form AOC 2 of the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013, is appended as-
Annexure III.
All Related Party Transactions are presented to the Audit Committee and the Board. A statement of all related party transactions is presented beforethe Audit Committee specifying the nature, value and terms and conditions of the transactions.
32. CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:
Information on conservation of energy, technology absorption, foreign exchange earnings and out go, is required to be given pursuant to provision of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is annexed hereto marked Annexure IV and forms part of this report.
33. CREDIT RATING
The company has been rated by Infomerics Valuation and Rating Pvt. Ltd, accredited by Securities and Exchange Board of India (SEBI) and Reserve bank of India (RBI) for bank facility and SME. The company has been awarded with ‘IVR BB+'for bank facility
34. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, is annexed under Annexure VI to this report.
35. SUBSIDIARIES/ JOINT VENTURES & ASSOCIATE COMPANY'S:
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.
36. INTERNAL AUDITORS:
As per section 138 of the Companies Act, 2013, the Company has appointed M/s Tanishq Tharani & Co. internal auditors for the year to 2024-25 to conduct the internal audit and to ensure adequacy of the Internal controls, adherence to Company's policies and ensure statutory and other compliance through periodical checks and reviews.
37. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND
PROTECTION FUND:
The requirement of transfer of unclaimed dividend to Investor Education and Protection Fund as per the provisions of Sec.125 (2) of the Companies Act, 2013, does not apply to the Company, for the year ended on March 31, 2023.
38. CORPORATE GOVERNANCE REPORT.
As per Schedule V Part C of Listing obligation and disclosure requirements, the provision of corporate governance is not applicable to the Company as the paid-up equity share capital of the company does not exceed 10 crores and net worth of the Company does not exceed 25 Crore as on last previous Financial Year.
39. INTERNAL FINANCIAL CONTROL:
The Company has in place adequate internal financial Controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.
40. COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
41. 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.
42. DETAILS OF MATERIAL AND SIGNIFICANT ORDER PASSED BY THE
REGULATORS, COURTS AND TRIBUNALS
No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.
43. CORPORATE SOCIAL RESPONSIBILITY
As per the regulatory requirement of Companies Act, 2013 and Rules framed there under, Corporate Social Responsibility is not applicable to the company. As such CSR Committee has not been formulated.
44. RISK MANAGEMENT POLICY
Risk Management is the process of identification, assessment and prioritization of risk followed by coordinated efforts to minimize, monitor, and mitigate the probability and/or impact of unfortunate events or o maximize the realization of opportunities. The company has laid down a comprehensive Risk assessment and minimization procedure which is reviewed by the Board from time to time. These procedure are reviewed to ensure that executive management controls risk through means of properly defined framework.
45. WHISTLE BLOWER POLICY/VIGIL MECHANISM:
The Company has established a vigil mechanism for Directors and employees to report their genuine concerns, details of which have been available on the Company's website: https://ggautomotive.com/policies/.No instance under the whistle Blower policy was reported during the financial year 2023-24.
46. DISCLOSURE UNDER SEXUAL HARASSMENT ACT:
The company has complied with the provision of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013relating to the constitution of Internal Complaints Committee and other applicable provisions. During the financial year under review, the Company has not received any complaints of sexual harassment from any of the employees of the Company.
47. POLICIES
The Company seeks to promote highest levels of ethical standards in the normal business transaction guided by the value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandates formulation of certain policies for Listed Companies. The Policies are reviewed periodically by the
Board and are updated based on the need and compliance as per the applicable laws and rules and amended from time to time. The policies are available on the official website of the Company at https://ggautomotive.com/policies/
47. OTHER DISCLOSURES
The company does not have any Employees Stock Option Scheme in force and hence particulars are not furnished, as the same are not applicable.
No application has been made under Insolvency and Bankruptcy Code: hence requirement to disclose the details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year is not applicable to the Company.
The requirement to disclose the details of difference between amount of valuation done at the time of onetime settlement and valuation done while taking loan from the Banks and Financial Institutions along with the reasons thereof is also not applicable.
48. ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation for the support which the Company has received from its shareholders, promoters, lenders, business associates including distributors, vendors and customers, the press and the employees of the Company.