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Lumax Auto Technologies Ltd.

BSE: 532796 Sector: Auto
NSE: LUMAXTECH ISIN Code: INE872H01019
BSE LIVE 15:42 | 18 Aug 513.60 -5.95
(-1.15%)
OPEN

515.40

HIGH

520.00

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NSE 15:58 | 18 Aug 509.45 -17.00
(-3.23%)
OPEN

529.90

HIGH

529.90

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OPEN 515.40
PREVIOUS CLOSE 519.55
VOLUME 914
52-Week high 584.00
52-Week low 375.60
P/E 98.77
Mkt Cap.(Rs cr) 700
Buy Price 0.00
Buy Qty 0.00
Sell Price 513.60
Sell Qty 8.00
OPEN 515.40
CLOSE 519.55
VOLUME 914
52-Week high 584.00
52-Week low 375.60
P/E 98.77
Mkt Cap.(Rs cr) 700
Buy Price 0.00
Buy Qty 0.00
Sell Price 513.60
Sell Qty 8.00

Lumax Auto Technologies Ltd. (LUMAXTECH) - Director Report

Company director report

To The Members

It is a great privilege for your Directors to present the 35th Annual Report on thebusiness and operations together with Audited Balance Sheet and Statement of Profit &Loss of your Company for the year ended March 31 2016.

Financial Results

Your Company’s performance during the year as compared with the previous year issummarized below:

(Rs. in million)

Particulars Standalone
2015 - 16 2014-15
Net Sales 5619.30 5240.44
EBDIT 430.68 365.08
Finance Expenses 43.26 50.64
Depreciation 116.99 103.82
Profit Before Exceptional items and tax 270.43 210.62
Exceptional items - 236.95
Profit Before Taxation (PBT) 270.43 447.57
Provision for Taxation Deferred Tax 74.93 127.10
Profit After Tax (PAT) 195.50 320.47
Balance of Profit brought forward 515.54 344.68
Balance Available for Appropriation 711.04 661.90
Appropriation :
Dividend 64.07 95.42
Corporate Dividend Tax 2.66 19.43
Transfer to General Reserve 19.56 31.52
Balance carried to Balance Sheet 624.75 515.54
Dividend (%) 47 70
Basic and Diluted Earning Per Share (EPS) J 14.34 23.51

Dividend

The Company has a long track record of making dividend payments to the shareholders.The Board of Directors recommend that Interim Dividend of 47% (Rs.4.70/- per equity share)declared on March 12 2016 for Financial Year 2015 -16 be considered as Final Dividend.No further dividends are proposed/ recommended by the Board. The total amount of Dividenddistributed aggregates to Rs.66.73 Million (Including Dividend Tax). The Dividend payoutratio comes to 34.13%.

A sum of Rs.19.56 Million has been transferred to the General Reserve of the Company.This reaffirms the inherent financial strength of your company.

Business Performance

The vibrant automotive industry in India produced about 24 million vehicles inFinancial Year 2015-16 of which over three million were exported. The bedrock for thislarge-scale production has been the automotive components suppliers that now representalmost 7% of India’s Gross Domestic Product and employs as many as 19 million peopleboth directly and indirectly.

Over the last decade the automotive components industry has scaled three times to US$40 billion in 2015 while exports have grown even faster to US$ 11 billion. This has beendriven by strong growth in the domestic market and increasing globalisation (includingexports) of several Indian suppliers. The Indian Auto Component industry is expected togrow by 8-10% in FY 2017-18 based on higher localisation by OEMs higher componentcontent per vehicle and rising exports from India. (IBEF; ICRA)

In this backdrop your company registered a growth of 7.22% during the year underreview by achieving Sales Turnover of Rs.5619.30 Million (on Standalone Basis) asagainst Rs.5240.44 Million (on Standalone Basis) in the corresponding previous year.

The Profit before Tax stood at Rs.270.43 Million (on Standalone Basis) as compared toRs.447.57 Million (on Standalone Basis) during the previous year.

On Consolidated Basis your Company registered a growth of 8.12% during the year underreview by achieving a Sales Turnover of Rs.9051.46 Million as against Rs.8371.67 Millionduring the previous year.

On Consolidated Basis your Company recorded a Profit before Tax of Rs.496.24 Millionduring the year under review as compared to Rs.677.78 Million during the previous year.

Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance withthe Accounting Standards Companies Act 2013 SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and all other applicable laws for the time being in forceand the same forms part of this Annual Report.

The Audited Financial Statements including the Consolidated Financial Statements andrelated information and audited accounts of subsidiaries are available on the website ofthe Company i.e. www.lumaxautotech.com. These documents shall also be available forinspection by any shareholder at the registered office of the Company.

Subsidiaries And Joint Venture Companies

As on March 31 2016 your Company has 5 (Five) subsidiaries including step-downsubsidiaries and 2 (Two) joint ventures companies. During the year under review followingcompanies have become Company’s subsidiaries: 1. Lumax Integrated Ventures PrivateLimited 2. Lumax Energy Solutions Private Limited 3. Lumax Sipal Engineering PrivateLimited A report on the performance and financial position of each of the subsidiaries andjoint venture companies as per the Companies Act 2013 included in the consolidatedfinancial statement is presented in a separate section in this annual report and hence notrepeated here for the sake of brevity. Please refer Form AOC-1 annexed to the financialstatement in the Annual Report.

Directors & Key Managerial Personnel

In accordance with the Articles of Association of the Company and the Companies Act2013 Mrs. Usha Jain Director is retiring by rotation at the ensuing Annual GeneralMeeting and being eligible offers herself for reappointment.

Your Directors recommend the re-appointment of the above Director at the ensuing AnnualGeneral Meeting.

The Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.

Mr. Pratik Dhuri Company Secretary of the Company ceased to be the Company Secretaryw.e.f. July 04 2015. The Board has appointed Ms. Swapnal Patane as Company Secretary ofthe Company w.e.f. July 15 2015. Ms. Swapnal Patane is an Associate Member of theInstitute of Company Secretaries of India (ICSI) having about 5 years of experience insecretarial functions.

Extract of Annual Return

In accordance with the requirement of Section 92 of Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 the extract of the annualreturn in Form MGT 9 is annexed as Annexure - A.

Number of Board Meetings

The Board of Directors met 5 (Five) times in the Financial year 2015-16. The details ofthe board meetings and the attendance of the Directors are provided in the CorporateGovernance Report.

Directors Responsibility Statement

As required under Section 134(5) of the Companies Act 2013 the Directors state:

(i) That in the preparation of the Annual Accounts for the Financial Year ended 31stMarch 2016 the applicable Accounting Standards have been followed along with properexplanation relating to material departures in the Auditor Report and Notes to Accounts;

(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;

(iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(iv) That the Directors have prepared the Annual Accounts on a "goingconcern" basis.

(v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Remuneration Policy

The Company follows a policy on remuneration of Directors and Senior ManagementEmployees. The Policy is approved by the Nomination & Remuneration Committee and theBoard. The Remuneration Policy is stated in the Corporate Governance Report.

Fixed Deposits

During the year under review the Company has not accepted any Deposit under Section 73of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

Auditors

Statutory Auditors

The members in their meeting held on July 23 2014 had appointed M/s S.R. Batliboi& Co. LLP Chartered Accountants as Statutory Auditors of the Company for a period of5 consecutive years in terms of the provisions of Section 139 of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014 to hold the office of auditorstill the conclusion of the sixth consecutive Annual General Meeting of the Company to beheld in the year 2019 subject to ratification by the Members at every Annual GeneralMeeting. Your Directors recommends for ratification of their appointment in the ensuingAnnual General Meeting.

During the year all the recommendations of the Audit Committee were accepted by theBoard. Hence there is no need for disclosure of the same in this Report.

Cost Auditors

The Board has re-appointed M/s Jitender Navneet & Co. as the Cost Auditors of theCompany in accordance with Section 148 and other applicable provisions if any of theCompanies Act 2013 for the audit of the cost accounts of the Company for the FinancialYear 2015-16.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. I.U. Thakur Practicing Company Secretary as the Secretarial Auditor ofthe Company to undertake the Secretarial Audit for the financial year 2015-16. The Reportof the Secretarial Audit is annexed herewith as Annexure - B.

Particulars of Loans Guarantees and Investments

The particulars of loans guarantees and investments covered under the provisions ofsection 186 of Companies Act 2013 are given in the Notes to financial statements.

Related Party Transaction and Policy

InaccordancewiththeprovisionsoftheCompaniesAct2013 and SEBI (Listing Obligations AndDisclosure Requirements) Regulations 2015 the company has formulated a policy on RelatedParty Transactions which is available on the Company’s website athttp://www.lumaxautotech.com/ downloads/related-party-transaction-policy.pdf. All RelatedParty Transactions which are foreseen and repetitive in nature are placed before theAudit Committee on a yearly basis for obtaining prior omnibus approval of the committee.The transactions entered into pursuant to the omnibus approval are placed before the AuditCommittee for review and approval. All Related Party Transactions are subjected toindependent review by a reputed accounting firm to establish compliance with theprovisions of Companies Act 2013 and Listing Regulations.

All related party transactions entered during the financial year were in the ordinarycourse of business and on arm’s length basis. The particulars of contracts orarrangements with related parties referred to in Section 188 of the Companies Act 2013 inthe prescribed Form AOC-2 is annexed herewith as Annexure - C.

Vigil Mechanism

The Company has established a vigil mechanism named Whistle Blower Policy fordirectors employees and business associates to report to the management concerns aboutunethical behaviour actual or suspected fraud or violation of the Company’s code ofconduct or ethics policy in accordance with the provisions of Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The mechanismprovides for adequate safeguards against unfair treatment of whistle blower who wishes toraise a concern and also provides for direct access to the Chairman of the Audit committeein appropriate/ exceptional cases. The Whistle Blower Policy is uploaded on the website ofthe Company.

Material Changes and Commitments

No other material changes and commitments affecting the Financial position of theCompany have occurred between April 1 2016 and the date on which this Report has beensigned.

Information on Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo

Disclosure of information regarding Conservation of Energy Research & DevelopmentTechnology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m)of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 is annexedseparately as Annexure –D.

Risk Management Policy

The Company has adopted an enterprise risk management policy and established a riskmanagement framework to identify mitigate and control the risks which may threaten theexistence of the Company in accordance with the provisions of Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company hasalso constituted a Risk Management Committee to review the risk trend exposure potentialimpact and their mitigation plans and periodically the key risks are also discussed atthe Audit Committee.

Corporate Social Responsibility (CSR) Policy and Initiatives

Your Company is committed to grow and operate in a socially sustainable manner anddoing its bit for the society of which it is a part. A well-outlined CSR program createssocial and environmental value thus impacting and improving the lives of people. The keyfocus areas of your Company are education promotion of girl child and healthcare fordisadvantaged sections of the society.

The company’s focus areas are largely covered under Schedule VII of the CompaniesAct 2013. During the year the Company has added one more school under its educationinitiative besides continuing its support to the existing schools by way of providingfinancial support in terms of fees of girl children E-learning centre contributingtowards infrastructure and other facilities for students in the school. Under itshealthcare initiatives the Company is focussing on preventive healthcare by continuouslyorganising health check-up camps lending financial support to hospitals for juvenilediabetes cataract operations and partnering in special drives organised by variousagencies for this cause. The Company has constituted a CSR Committee of the Board and alsodeveloped & implemented a CSR Policy in accordance with the provisions of CompaniesAct 2013. The Committee monitors and oversees various CSR initiatives and activities ofthe Company. During the year the Company’s spend on CSR activities is around 1.60percent of the average net profits during the three immediately preceding financial years.The Company is augmenting its resources to scale up its CSR activities to fulfill itsobligation to spend two percent of the average net profit on CSR. The detailed Report onCSR activities is annexed herewith as Annexure - E.

Performance Evaluation of Board Committee and Directors

The challenge for boards is to prevent crises in the organizations they govern.Performance evaluation is a key means by which boards can recognize and correct corporategovernance problems and add real value to the organizations. During the year the Boardwith the assistance of Nomination and Remuneration Committee has completed the evaluationexercise which includes the evaluation of the Board as a whole committees and Directorsas per the internally designed evaluation process approved by the Board.

The evaluation tested key areas of the board’s work including strategy businessperformance risk and governance processes. The need to balance its monitoring activitieswith discussion on strategic matters was recognized and ought to be continually borne inmind. The evaluation considers the balance of skills experience independence andknowledge of the Company and the Board its overall diversity and analysis of the Boardand its Directors’ functioning.

The feedback of the evaluation exercise was collated and discussed with the Board andan action plan to further improve the effectiveness of Board and committees is put inplace.

Management Discussion & Analysis Report

Pursuant to the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Management Discussion & Analysis Report is annexed aspart of this report separately as Annexure – F.

Significant and Material orders Passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status of the Company and its futureoperations.

Internal Financial Control

The Company has a comprehensive internal control system to provide reasonable assuranceabout the achievement of its objective reliability of financial reporting timelyfeedback on achievement of operational and strategic goals compliance with policiesprocedures laws and regulations safeguarding of assets and economical and efficient useof resources. Appropriate review and control mechanisms are built in place to ensure thatsuch control systems are adequate and are operating effectively.

The monitoring and reporting of finance systems is supported by a web-based system SAPwhich helps in obtaining accurate and complete accounting records and timely preparationof reliable financial disclosures at all levels of organization.

Corporate Governance

The report on Corporate Governance together with the Auditor’s Certificateregarding the Compliance of conditions of Corporate Governance as stipulated in SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed and formspart of this Annual Report as Annexure – G.

Particulars of Employees

Information on Particulars of Employees as required under Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms an integral part of this report as Annexure – H. Theinformation required pursuant to section 197 of the Companies Act 2013 read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 in respect of employees of your Company is available for inspection by themembers at the registered office of the Company during business hours on working days upto the date of ensuing Annual General Meeting. If any member is interested in obtaining acopy thereof such member may write to the Company Secretary whereupon a copy would besent.

Acknowledgement

We strive to drive the long-term and sustainable growth of the organization. We willcontinue our passion for seizing the great opportunities that lie ahead in our continuousefforts to deliver significant value to our customers and stakeholders. Your Directorsplace on record their appreciation for the continued co-operation and support extended tothe Company by its highly valued customers Joint Venture Partners all other businesspartners all the shareholders Financial institutions Banks Vendors and variousGovernment Agencies with whose help cooperation and hard work the Company is able toachieve the results. The Board deeply acknowledges the trust and confidence placed by allthe associates and employees of the Company for their contribution and support for thegrowth of the Company.

For and on behalf of the Board of Directors
D. K. JAIN
Place: New Delhi CHAIRMAN
Dated: May 12 2016 DIN:00085848