To the Members
Your Directors have the pleasure in presenting the 35th Annual Report on the businessand operations of the Company together with the Audited Statements of Accounts for thefinancial period ended 31st March 2016:
|Particulars ||2015-2016 (12 months) ||2014-2015 (6 months) |
| || || |
|Total Revenue ||10875.44 ||4617.03 |
|Profit before depreciation & tax ||919.94 ||338.03 |
|Less : Depreciation amortization & Loss on assets discarded ||404.70 ||173.21 |
|Provision for Taxation ||167.50 ||59.40 |
|Profit After Tax ||347.74 ||105.42 |
|Balance of Profit from Previous Year ||2298.81 ||2223.20 |
|Profit available for appropriation ||2646.55 ||2328.62 |
|Appropriations : || || |
|Dividend for the year ||83.12 ||15.11 |
|Tax on dividend ||16.98 ||4.16 |
|Transfer to General Reserve ||- ||10.54 |
|Surplus retained in Profit & Loss Account ||2546.45 ||2298.81 |
Your Directors are pleased to recommend a Dividend of ' 5.50 per equity share of facevalue of ' 10/- each for the period ended 31st March 2016 aggregating to ' 83.12 millionexcluding Dividend Distribution Tax.
The Dividend subject to the approval of Members at the Annual General Meeting to beheld on 12th August 2016 will be paid within 30 days from the date of declaration ofdividend to the Members whose names appear in the Register of Members as on the date ofbook closure i.e. from 10th August 2016 to 12th August 2016 (both days inclusive).
In terms of the provisions of the Companies Act a sum of ' 304635/- ofunpaid/unclaimed dividends was transferred during the year to the Investor Education andProtection Fund.
PERFORMANCE OF THE COMPANY
The Sales and other income for the financial period (12 months) under review was '10875.44 Million as against ' 4617.03 Million for the previous financial year (6months). The Profit before tax (PBT) of ' 515.24 Million and the Profit after tax (PAT) of' 347.74 Million for the financial period under review as against ' 164.82 Million and '105.42 Million respectively for the previous financial year.
The Company in its journey towards world class manufacturing has further improved thequality standards towards Zero Chips Oil & Coolant (COC) initiatives implemented lastfinancial year in all plants to make it clean from Chips Oil and Coolant on floor.Further to improve the standards of Organisation Health and Safety your organisationimplemented OHSAS 18001 and was certified for OHSAS 18001 2007 which is valid for threeyears.
BOARD OF DIRECTORS
Ms.Sudhasri.A resigned from the Board due to other pressing engagements effective 10thFebruary 2016. The Board places its appreciation for her valuable contributions madeduring her tenure.
Pursuant to Sections 149 and 152 of the Companies Act 2013 and in terms of Regulation17 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 theBoard of Directors has at its meeting held on 10th February 2016 appointed Ms.SupritiBhandary as an additional director who is being proposed to be appointed as anIndependent Director with effect from the date of ensuing Annual General Meeting. Therequisite resolution for approval of her appointment as Independent Director is beingproposed in the notice of the meeting for the approval of the members.
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Joseph A Plomin Non-Executive Director of the Company retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013.
Your Company has not accepted any Public Deposits under Chapter V of Companies Act2013 during the year.
POLICY ON NOMINATION & REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL (KMP)& OTHER EMPLOYEES
The Company has framed a policy on Nomination & Remuneration of Directors KMP& other employees as per the requirement of the Companies Act 2013 which formulatesthe criteria for determining qualifications positive attributes & independence of adirector and their remuneration. The Nomination and Remuneration Policy is annexedherewith as Annexure - A to this report.
AUDITORS & AUDITORS' REPORT
The report given by the Statutory Auditors on the financial statements of the Companyis part of the Annual Report. There has been no qualification reservation adverse remarkor disclaimer given by the Auditors in their Report.
M/s. Deloitte Haskins & Sells (Chennai) Bengaluru were appointed as StatutoryAuditors of your Company in the Annual General Meeting held on 5th February 2015 for aterm of three consecutive years. As per the provisions of Section 139 of the CompaniesAct 2013 the appointment of Auditors is required to be ratified by Members at everyAnnual General Meeting.
No frauds have been reported by the Auditors in their reports.
The Secretarial Audit Report for 2015-16 in form MR-3 is annexed to this Report under Annexure- B
Explanation for observations made by the Company Secretary in Practice :
The compliances under Secretarial Standards on meetings of the Board of Directors havebeen largely met with but for certain minor improvements which would be compliedhenceforth.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under and based on the recommendation from the Audit Committee CS. Pracheta MPracticing Company Secretary has been appointed by the Board to conduct the secretarialaudit of Company's secretarial and related records for the financial year 2016-17.
Your Company is renowned for exemplary governance standards since inception andcontinues to lay a strong emphasis on transparency accountability and integrity.
The Companies Act 2013 and the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (LODR Regulations) have strengthened the governance regimein the Country. Your Company is in compliance with the governance requirements providedunder the new law and has proactively adopted many provisions of the new law ahead oftime. Your Company is committed to embrace the new law in letter and spirit. In line withthe requirements of new law your Company has constituted Board Committees. Your Companyhas in place all the statutory committees required under the law. Details of BoardCommittees along with their terms of reference composition and meetings of the Board andBoard Committees held during the year are provided in the Corporate Governance Report.
A Certificate from an Independent Practicing Company Secretary confirming compliancewith the conditions of Corporate Governance as stipulated under the aforesaid Regulation34(3) (Schedule V(E)) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 is attached to the Corporate Governance Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134 of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are provided as Annexure- C to this report.
ANNUAL RETURN 2015-16
The extract of annual return in MGT - 9 is annexed under Annexure - D
RELATED PARTY TRANSACTIONS (RPT)
In line with the requirements of the Companies Act 2013 and LODR Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onCompany's website at www.autoaxle.com/Policv.aspx. This Policy specifically deals with thereview and approval of Material Related Party Transactions keeping in mind the potentialor actual conflicts of interest that may arise because of entering into thesetransactions. All Related Party Transactions are placed before the Audit Committee forreview and approval. Prior omnibus approval is obtained for Related Party Transactions onannual basis for transactions which are of repetitive nature and / or entered in theordinary course of business and are at Arm's Length.
All Related Party Transactions entered during the year were in ordinary course of thebusiness and on arm's length basis. The particulars on RPTs in AOC 2 is annexed to theReport as Annexure E
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Disclosure on CSR has been annexed to the Report under Annexure F
PARTICULARS OF REMUNERATION OF DIRECTORS & CERTAIN SPECIFIED EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014the names and other particulars of certain employees who are covered by the said rulesare set out in the Annexure G to the Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(5) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) we have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period;
(c) we have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
(d) we have prepared the annual accounts on a going concern basis; and
(e) we have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively.
(f) we have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
RISK MANAGEMENT SYSTEM AND ITS POLICY
Your Company introduced the Risk Management System almost a decade back and it hasattained the maturity whereby the Enterprise-wise Risk-log-cum-register is beingmaintained by the departmental head and is being periodically reviewed for adequacy andeffectiveness by the Audit Committee and the Board. The Company's Risk ManagementCommittee is being assisted by Chief Risk-Coordinator. The Risk Management policydeveloped by the Company aims to cover all the business and other risks which arerevisited at reasonable intervals.
The Board level Committee on Risk Management is formed with the following directors asits members:
(a) Mr. B C Prabhakar Chairman
(b) Dr. N Muthukumar Member
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In accordance with Regulation 34(2)(e) of LODR Regulations the Management Discussionand Analysis Report is presented in a separate section forming part of the Annual Report.
BOARD ANNUAL EVALUATION
The Nomination & Remuneration Committee arranges for a performance evaluation ofthe Board its Committees and its individual Directors on an annual basis. The Committeewill conduct an annual review of the role of the Board assess the performance of theBoard over the previous 12 months and examine ways of assisting the Board in performingits duties more effectively.
The review will include:
(a) comparing the performance of the Board with the requirements of the Act;
(b) examination of the Board's interaction with management;
(c) the nature of information provided to the Board by management; and
(d) management's performance in assisting the Board to meet its objectives.
A similar review will be conducted for each Committee by the Board with the aim ofassessing the performance of each Committee and identifying areas where improvements canbe made. The Nomination & Remuneration Committee will oversee the performanceevaluation of the Senior Management Team. This evaluation is based on specific criteriaincluding the business performance of the Company whether strategic objectives are beingachieved and the development of management personnel.
Your Directors would like to express their sincere appreciation of the positiveco-operation received from the Central Government the Government of Karnataka FinancialInstitutions and the Bankers. The Directors also wish to place on record their deep senseof appreciation for the commitment displayed by all executives officers workers andstaff of the Company resulting in the successful performance of the Company during theyear.
Your Directors wish to place on record their appreciation for the continuedco-operation and support received from the Kalyani Group Pune and Meritor Inc. USA
For and on behalf of the Board of Directors
|Place: Pune ||Dr. B.N. Kalyani |
|Date: 10th May 2016 ||Chairman |