Your Directors have pleasure in presenting their Twenty Fifth Annual Report of yourCompany together with the Audited Accounts for the year ended 31st March 2017.
Your Company's performance during the year as compared with that during the previousyear is summarized below:
( Rs. in Lakhs)
|Particulars ||2016-17 ||2015-16 |
|Manufacturing Sales ||50789.43 ||44498.37 |
|Add : Other Income ||1467.02 ||1430.30 |
|Total Income ||52256.45 ||45928.67 |
|Less : || || |
|(i) Materials & Manufacturing Expenses ||31858.21 ||28205.54 |
|(ii) Value Addition Cost ||7064.30 ||6091.00 |
|Profit before Depreciation Amortization ||13333.94 ||11632.13 |
|Less : || || |
|Depreciation & Amortization Expenses ||2203.08 ||1896.28 |
|Profit Before Tax ||11130.86 ||9735.85 |
Your Company achieved a Revenue of Rs. 50789.43 Lakhs an increase of about 14.14% overthe previous year Operating Profit before Depreciation & Amortization amounted to Rs.13333.94 Lakhs. Profit before Tax amounted to Rs. 11130.86 Lakhs an increase of 14.33%about over the previous year. During the year your Company acquired additional space ofthree plots on lease from MEPZ-SEZ for setting up of manufacturing lines and storesoperations.
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.("Listing Regulations") your Company is appearing in Top Five Hundred listedentities based on the Market Capitalization (as on March 31 2016) due to which yourCompany has formulated a Dividend Distribution Policy. The Board of Directors of theCompany had approved the Dividend Distribution Policy on November 10 2016 in line withthe Listing Regulations.
The Policy has been hosted on the website of the Company at :http://www.igarashimotors.com/uploads/investor/pdf/14788383387IMIL-Dividend_Distribution_Policy.pdf
In line with the said Policy your Directors are pleased to recommend a dividend of Rs.6.61/- per Equity Share on Face value of Rs. 10/- each for the year ended March 31 2017.
The Board has not recommended any transfer to general reserve from the profits of theyear under review.
TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS/ SHARES TO IEPF
During the year there are no unclaimed dividends/Shares which have to transferred toIEPF by the Company.
The Reserves at the end of the year 31st March 2017 is at Rs. 33974.39 Lakhs asagainst the Total Reserves of Rs. 26380.58 Lakhs as at 31st March 2016.
No material changes or commitments have occurred between the end of the Financial Yearand the date of this
Report which affect the financial statements of the Company in respect of the reportingyear.
The Board of Directors is continuing the evaluation of business re-organizationproposal including amalgamation of group entities for taking advantage of operationalsynergies.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
Your Companyis holding 9.88% stake in Joint Venture Company viz. Bosch ElectricalDrives India Private Limited as on March 31 2017. Disclosure in Form AOC - 1 annexed tothis report.
Your Company has no Subsidiary Companies as on March 31 2017.
During the year under review your Company has not invited or accepted any depositsfrom the public under Section 76 of the Companies Act 2013 and Rules made thereunder.
EMPLOYEE STOCK OPTION SCHEME
Your Company is proposes to launch a new Employees Stock Option Plan i.e. ESOP 2017(Plan') as per the Securities and Exchange Board of India (Share Based EmployeeBenefits) Regulations 2014. Accordingly two resolutions are being placed at theforthcoming Annual General meeting.
Your Company's Paid-up equity share capital is Rs. 3060.84 Lakhs as on March 31 2017.There is no change in Share Capital during the year under review.
During the year there is no change in the directorship. The shareholders at the 24thAnnual General Meeting
Regularized the appointment of Mr. Akhil Awasthi and Mrs. Eva Maria Rosa Schork as NonExecutive Non Independent
Director who is liable to retire by rotation.
Mrs. Eva Maria Rosa Schork Director retires by rotation at forthcoming Annual GeneralMeeting and being eligible offers her for re-appointment. The brief resume and otherdetails as required under the Listing Regulations are provided in the Notice of the 25thAnnual General Meeting of the Company.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(7) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 (ListingRegulations').
Mr. Hemant M Nerurkar and Mr. S Radhakrishnan were appointed as Independent Directorsfor 3 years upto July
292017 at the 22nd Annual General Meeting held on July 302014. Since their term ofoffice ending on July
292017 pursuant to the recommendation of the Nomination and Remuneration Committeethe Board of Directors at its meeting held on May 11 2017 appointed Mr. Hemant M Nerurkarand Mr. S Radhakrishnan as Independent Directors for further 3 year period until July292020 subject to approval of shareholders at the ensuing Annual General Meeting. TheNotice under Section 160 of the Companies Act 2013 has been received from membersignifying the intention to propose Mr. Hemant M Nerurkar and Mr. S Radhakrishnan as acandidate for the office of Independent
Director and accordingly two resolutions are being placed at the forthcoming AnnualGeneral Meeting.
Further the details about the above directors are given in the Notice of the ensuingAnnual General Meeting being sent to the shareholders along with the Annual Report.
The details of familiarization programmes to Independent Directors is put up on thewebsite of the Company at the link:http://www.igarashimotors.com/investor-list.php?invescatid=23.
EVALUATION OF THE BOARD'S PERFORMANCE
Your Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the non-executive directors and executive director. Pursuant to theprovisions of Companies Act 2013 and Regulation 25 of the Listing Regulations the
Board and the Nomination and Remuneration Committee have carried out annual performanceevaluation of its own performance the directors individually as well the evaluation ofthe working of its Audit Nomination & Remuneration and Stakeholder Committee. EachBoard member completed a questionnaire providing feedback on the functioning and overallengagement of the Board and its committees on various parameters such as the compositionexecution of specific duties quality quantity and timelines of flow of informationdeliberations at the meeting etc.. Besides this one on-one meeting of theindividual directors with the Chairman of the Board was also conducted as a part ofself-appraisal and peer group evaluation. The Directors were also asked to provide theirvaluable feedback and suggestions about the overall functioning of the Board and itscommittees. In a separate meeting of Independent Directors performance of non-IndependentDirectors and the board as a whole was evaluated. The same was discussed in the Boardmeeting that followed the meeting of the Independent Directors at which the performanceof the Board its committees and individual directors was also discussed. Performanceevaluation of Independent
Directors was done by the entire Board excluding the Independent Director beingevaluated.
NUMBER OF MEETINGS OF THE BOARD
During the year Five Board Meetings were held on May 19 2016 August 04 2016November 10 2016 December 26 2016 and February 08 2017. The Company's last yearAnnual General Meeting was held on
August 04 2016. The particulars of Directors their attendance during the financialyear 2016-2017 has been disclosed in the Corporate Governance Report forming part of thisAnnual Report.
For details of the Committees of the Board please refer to the Corporate GovernanceReport.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 134 (5) of the Companies Act 2013 your directors on thebasis of information made available to them confirm the following: a) In the preparationof the annual accounts for the financial year ended March 312017 the applicableAccounting Standards have been followed with explanation relating to material departuresif any; b) They have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give true and fairview of the state of affairs of the Company as at
March 31 2017 and of the profit of the Company for that period; c) Proper care hasbeen taken for maintenance of adequate accounting for safe guarding the assets of theCompany and detecting fraud and other irregularities;
d) They have laid down Internal Financial Controls to be followed by the Company andthe Audit Committee of the Board of Directors shall ensure that the internal control isadequate and robust;
e) The annual accounts are prepared on a going concern basis;
f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DEMATERIALISATION OF SHARES
99.72% of the Company's paid up Equity Share Capital is in dematerialized form andbalance 0.28% is in physical form as on March 31 2017. The Company's Registrars are CameoCorporate Services Limited No.1 Subramaniam Building Club House Road Chennai 600 002.
During the year under view CARE has given credit ratings of CARE A+ for long termdebt CARE A1+ for short term debt.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
The information required to be furnished pursuant to Section 134(3) (m) of theCompanies Act 2013 is appended hereto and forms part of this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of expenditure and earnings in foreign currency are given as an annexure tothis Report.
PARTICULARS OF LOANS & INVESTMENTS BY THE COMPANY
Details of loans and investments by the Company to other body corporate or persons aregiven in notes to the financial statements.
RELATED PARTY TRANSACTIONS
All the related party transactions entered during the year were in ordinary course ofbusiness and on arm's length basis. Your Company obtained shareholders' approval formaterial related party transactions though such transactions being entered during ordinarycourse of business and on arm's length basis as required under Listing Regulations. YourCompany's Policy on Related Party Transactions which can be accessed through weblink :http://www.igarashimotors.com/investor-list.php?invescatid=18.
Your Company presents a statement of all related party transactions before the AuditCommittee. Details of such transactions are given in the accompanying financialstatements. Disclosure of Related Party transaction is annexed with the report as per theformat prescribed.
DISCLOSURE UNDER THE SExUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company has in place a Policy on Prevention Prohibition and Redressal of SexualHarassment and Non-discrimination at Work Place in line with the requirements of theSexual Harassment of Women at the Workplace
(Prevention Prohibition & Redressal) Act 2013.
All employees (permanent contractual temporary trainees) are covered under thispolicy.
An Internal Complaints Committee (ICC) was set up to redress complaints receivedregarding sexual harassment and discrimination at work place.
During the year ended March 31 2017 the ICC has received no complaints pertaining tosexual harassment / discrimination at work place.
KEY MANAGERIAL PERSONNEL
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel (KMP)of the Company are
Mr. P Mukund Managing Director Mr. R Chandrasekaran Chief Financial Officer and Mr.P Dinakara Babu Company
Secretary. During the year there has been no change in the KMP.
MANDATORY AUDITOR ROTATION
M/s. Sharp & Tannan Chartered Accountants were appointed as Statutory Auditors ofthe Company at the 24th Annual General Meeting held on August 042016 from the conclusionof that Annual General Meeting till the conclusion of 25th Annual General Meeting to beheld in the year 2017. M/s. Sharp & Tannan Chartered Accountants would vacate officeas Auditors of the Company at the conclusion of ensuing Annual General Meeting pursuant toSection 139(2)
(b) of the Companies Act 2013 dealing with compulsory rotation of auditors. ThusSharp & Tannan Chartered
Accountants would be carrying out limited review of first quarter financial results ofFY2017-18.
Pursuant to applicable provisions of the Companies Act 2013 on the recommendation ofthe Audit Committee it is proposed to appoint M/s. B S R & Co. LLP CharteredAccountants (Firm Registration No. 101248W/W-100022) as
Statutory Auditors of the Company to hold office from conclusion of the 25th AnnualGeneral Meeting of the Company until 30th Annual General Meeting. Necessary resolution forthe appointment of M/s. B S R & Co. LLP as Statutory Auditors is included in theNotice of the Annual General Meeting.
The Board places on record it's appreciation for the contribution of M/s. Sharp &Tannan Chartered Accountants during their past 25 years tenure as Auditors of yourCompany.
No qualification adverse remarks or disclaimer made by the Statutory Auditors withregard to the financial statements for the financial year 2016-17.
The Statutory Auditors of the Company have not reported any fraud as specified underSection 143(12) of the
Companies Act 2013.
INDIAN ACCOUNTING STANDARDS
Pursuant to the notification issued by the Ministry of Corporate Affairs datedFebruary 162015 relating to the Companies (Indian Accounting Standard) Rules 2015 yourCompany will adopt "IndAS" with effect from April 012017.
The implementation of IndAS is a major change process for which the Company haddedicated considerable resources. The impact of the Change on adoption of IndAS has beenassessed and the Company is ready to adopt IndAS.
SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. S Bhaskar Partner BP & Associates Company Secretaries (CP No.:8315ACS: 10798) to undertake the Secretarial Audit of the Company.
The Secretarial Audit Report is given in Annexure to this Report. The Report does notcontain any qualification.
As your Company has been operating from MEPZ-Special Economic Zone appointment of CostAuditor is exempted under Section 148 of the Companies Act 2013 read with Companies (CostRecords and Audit) Rules 2014.
EXTRACT OF THE ANNUAL RETURN
Relevant extract of annual return to be filed with the Registrar of Companies forfinancial year 2016 17 is given in Annexure to this Report.
INTERNAL CONTROL SYSTEMS
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management.
Internal Audit is carried out in a programmed way and follow up actions were taken forall audit observations. Your
Company's Statutory Auditors have in their report confirmed the adequacy of theinternal control procedures.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company has constituted a CSR Committee. The CSR Committee comprises offour members and the Chairman of the Committee is an Independent Director. CSR Committeeof the Board has developed a CSR Policy. The CSR Committee met three times during the yearon May 192016 November 102016 & February 082017.The details of role andfunctioning of the Committee are given in Annexure to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report of the Company for year under review asrequired under Regulation 17 of Listing Regulations is given as a separate Statement inthe Annual Report.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Your Company has adopted a Risk Management Policy and constituted a Risk ManagementCommittee for monitoring the same. The Company has been addressing various risks impactingthe Company which is provided elsewhere in this Annual Report in Management Discussion andAnalysis Report.
BUSINESS RESPONSIBILITY REPORT
Your Company is one of the top 500 listed entities (by Market Capitalisation as onMarch 312016). Thus Business
Responsibility Report is forming part of the Annual Report for the financial year endedMarch 312017 as required under Regulation 34(2)(f) of Listing Regulations. Your Companyhas hosted Business Responsibility Report on the Company's website at :http://www.igarashimotors.com/investor-list.php?invescatid=17.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Act read with Rule 5 (1) ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(Rules') in respect of remuneration and other details is given as a separateStatement in the Annual Report.
The remuneration paid to all Key Management Personnel was in accordance withremuneration policy adopted by the Company.
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3)of Rules a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules should be provided in theAnnual Report. None of the Company's employees were covered by the disclosure requirement.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and Company's operations.
Your Company has 617 number of permanent employees on the rolls of the Company as onMarch 31 2017. The Board of Directors wishes to place on record their sincereappreciation to all the employees of the Company for their dedication commitment andloyalty to the Company.
A Report on Corporate Governance along with a certificate from the Auditors of theCompany regarding compliance of the requirements of Corporate Governance pursuant toListing Regulations is annexed hereto.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism established Whistle Blower Policy as per therequirement of the Companies Act 2013 and the Listing Regulations to enable allemployees and the directors to report in good faith any violation of the Policy. The AuditCommittee of the Board oversees the functioning of Whistle Blower Policy. Your Company hasdisclosed the details of Whistle Blower policy on its website:http://www.igarashimotors.com/investor-list. php?invescatid=18.
CODE OF CONDUCT
Your Company has laid down a Code of Conduct Policy which can be accessed on theCompany's website: http://www.igarashimotors.com/investor-list.php?invescatid=18.
The shares of your Company continued to be listed at National Stock Exchange Limitedand Bombay Stock Exchange Limited. Listing fee has already been paid for the financialyear 2017-18.
The Board places on record its sincere appreciation for the continued support from therelevant Government Authorities Promoters Shareholders Suppliers Customers and otherbusiness associates for their strong support.
| ||For and on behalf of the Board of Directors |
|Place : Chennai ||K K Nohria |
|Date : May 11 2017 ||Chairman |