LUMAX AUTOMOTIVE SYSTEMS LIMITED
ANNUAL REPORT 2011-2012
The members of
LUMAX AUTOMOTIVE SYSTEMS LIMITED
Your Directors have pleasure in presenting the 12th Annual Report together
with audited accounts of the Company for the year ended 31st March 2012.
The performance of the Company for the financial year is summarized as
Rs. in million
SALES (excluding excise duty) 1120.33 1114.57
Profit (before interest, dep.,
exceptional item & tax) 138.23 141.48
Exceptional item (22.26) 6.04
Interest 86.39 77.13
Depreciation 35.97 43.72
Tax provision 6.18 2.94
Profit/Loss after tax 31.95 11.65
After considering the long-term perspective of the finance need, your
Director's has decided to reinvest the profits in the Company. Hence no
dividend is recommended for this financial year by the Board.
Your Company's total turnover during the year under review was Rs.1120.33
million as compared to Rs. 1114.57 million during the previous year,
showing a rise of Rs. 5.76 million.
In accordance with the requirement of the Companies Act, 1956 and Articles
of Association of the Company, Mr. Vinay Panchmiya and Mr. Prem Das Gandhi
are liable to retire by rotation and being eligible offer themselves for
Mr. Rajendra Prasad Agarwal has been appointed as an Independent Director
on May 26, 2012. Notice along with the Deposit of Rs. 500/- (Rs. Five
Hundred Only) as required under section 257 of the Companies Act, 1956 has
been received by the Company from Mr. Rajendra Prasad Agarwal signifying
his candidature for the office of the director of the Company liable to
retire by rotation. Brief resume of the directors re-appointed, nature of
their expertise in specific functional areas, names of companies in which
they hold directorships and memberships/chairmanships of board committees,
shareholding and relationships between directors inter-se, as stipulated
under clause 49 of the listing agreement with the stock exchanges, are
annexed elsewhere in this report.
Auditors and Auditors' report:
M/s R. JAIN & SANJAY ASSOCIATES, Auditors of the Company, are retiring at
the conclusion of the ensuing Annual General Meeting of the Company and are
eligible for reappointment and have confirmed that their reappointment if
made, shall be within the limits of the section 224 (1B) of the Companies
Act, 1956. The board recommends the reappointment of M/s R. JAIN & SANJAY
ASSOCIATES as Auditors of the Company.
The observations of the Auditors in their report are self-explanatory and
do not call for any further comments from the directors. Management
Discussion and Analysis Report A report on Management Discussion and
Analysis as required under clause 49 of the listing agreement is annexed
A separate section on Corporate Governance forming part of the Directors'
Report and the certificate from the auditors of the Company confirming the
compliance of Clause 49 of listing agreement is included in the annual
During the year the Company has not accepted or invited any deposit from
public within the meaning of section 58A of the Companies Act, 1956 and the
rules made there under.
Particulars of Employees:
In terms of the provisions of Section 217(2A) of the Companies Act, 1956,
read with the Companies (Particulars of Employees) Rules, 1975 as amended,
the names and other particulars of the employees are set out in the
annexure to the Director's Report.
However, having regard to the provisions of section 219(1)(b) (iv) of the
said Act, the Annual Report excluding the aforesaid information is being
sent to all the members of the Company and others entitled thereto. Any
members interested in obtaining such particulars may write to the Company
Secretary at the registered office of the Company.
The equity shares of the Company are listed with Bombay Stock Exchange
Limited and National Stock Exchange of India Limited. The Company has been
complying with all the clauses of the listing agreement and the Company has
paid the requisite listing fees to both the stock exchanges.
Disclosure u/s 217(1)(e):
Information as per section 217(1)(e) of the Companies Act, 1956, read with
Companies (Disclosure of Particulars in the Report of Directors) Rule,
1988, details are given below:
Conservation of energy:
The Company has always been conscious about the need for conservation of
energy. Electricity and Fuel consumption per unit of production were
monitored regularly at all the manufacturing plants and corrective actions
have been taken wherever needed. During the period the Company has made
additions in the machinery to the extent of Rs. 3.59 Crore.
In filter segment, the Company has obtained technical assistance from Toyo-
Roki Manufacturing Company Ltd., Japan.
Foreign Exchange Earning and Outgo:
This information is given in notes to accounts at point No.7 and 8.
Directors' Responsibility Statement u/s 217(2AA):
Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors
based on the representation received from the operative management, confirm
i) In the preparation of the annual accounts, all the applicable accounting
standards have been followed and there are no material departures (Subject
to point no. 4 (d) of the auditors report);
ii) They have, in the selection of the accounting policies, consulted the
statutory auditors and have 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 of the Company for that period;
iii) They have taken proper and sufficient care, to the best of their
knowledge and ability, for the maintenance of accounting records in
accordance with the provisions of the Companies Act, 1956, for safeguarding
the assets of the Company and for preventing and detecting fraud and other
iv) They have prepared the annual accounts on a going concern basis.
Your Company has taken significant steps in developing human resource and
strengthening human resource systems. During the year under review,
industrial relation in the Company continues to be cordial and peaceful.
The board wishes to thank the Company's esteemed customers, associates,
suppliers, its shareholders, investors and financial institutions for their
continued support and co-operation.
For & On behalf of the Board of Directors
Place: New Delhi U. K. Jain Nitin Jain
Date : 10/08/2012 Chairman Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS
The Management of Lumax Automotive Systems Limited is pleased to present
its analysis report covering its performance and outlook. The report
contains expectations of the Company's businesses based on current
environment. Many unforeseen and uncontrollable external factors could
alter these expectations.
According to the auto industry experts, the Financial Year 2011-12 was a
landmark year both in positive and negative manner. In the positive manner
it registered growth in sales in various segment of the auto industry while
on the other hand due to hike in the interest rates and other factors,
demand of cars fell for the first time in three years last July. As experts
say, with the indicators from the RBI that interest rates may come down and
the overall GDP expected to be around 7.5% to 8%, the prospects of the auto
industry is good for ongoing fiscal. According to society of Indian
Automobile Manufacturers (SIAM), overall domestic sales grown by 12.24%,
while passenger vehicles segment grew by 4.66%, Commercial vehicle segment
registered a growth of 18.20% while light commercial vehicles and heavy
commercial vehicles saw a growth of 27.36% & 7.94% respectively. According
to the varius factors affected in 2011-12, it is expected that the growth
in 2012-13 would be around 12% to 13%.The focus of the company during the
year was on modernization of its units and increasing the production
capacity and diversify the new customers base. Opportunities & Threats
India is a hot spot for automobiles and auto-components. As the auto sector
in India is set to continue its growth trajectory for next 5 years and
India is an increasingly favourite destination for global majors looking at
emerging market. India is looked upon an automotive hub, led by small cars
& auto components domain. During the year the Industry has registered a
growth in the export of 25.44% and Free Trade Agreement with various
countries allowed the Indian Companies to directly export in the European
Countries, ASEAN, BRIC & USA for OEMs as well as aftermarket. While on the
other hand Industry has undergone numerous developments and investments
recently that have substantially impacted the market dynamics and various
supportive policies of the government shows the opportunities to the Indian
Auto Companies to growth in their respective segments.
As there are some supportive policies of the government for the auto
industries but the budget raised factory gate duty on cars from April 1,
pushing up prices. Consistent fuel hikes, rising auto interest rates,
industry's lackluster performance are the key factors which have to be
faced by the company.
The emerging scenario in India's small car industry holds promise and
excitement. But the unfavourable policies of the government in terms of
hiking the excise duty on the diesel cars, rising petrol prices and the RBI
decision not to cut key policy rates have disappointed the auto companies
in India. Government needs to take positive policy measures to make petrol
cars more attractive, viable and acceptable to the consumers, rather than
penalize diesel cars through even higher taxes and making them more
expensive to the point of unviability.
Risk & Concerns:
The Auto Policy has spelt out the direction of growth for the auto sector
in India and addresses most concerns of the automobile sector, including:-
* Promotion of R&D in the automotive sector to ensure continuous technology
up gradation, building better designing capacities to remain competitive.
* Impetus to Alternative Fuel Vehicles through appropriate long term fiscal
structure to facilitate their acceptance.