The directors have pleasure in presenting the thirteenth annual report and the auditedfinancial statements for the financial year ended 31st March 2017.
|1. FINANCIAL HIGHLIGHTS || || |
| || ||Rs. in lakhs |
|Details ||Year ended ||Year ended |
| ||31.03.2017 ||31.03.2016 |
|Revenue from Operations ||226057.16 ||199953.84 |
|Other Operating Income ||3615.07 ||4012.32 |
|Total revenue from operations ||229672.23 ||203966.16 |
|Gross profit before interest || || |
|and depreciation ||36254.52 ||32669.54 |
|Finance costs ||46.44 ||15.20 |
|Depreciation ||6162.93 ||5620.13 |
|Profit before tax ||30045.15 ||27034.21 |
|Provision for taxation || || |
|(including deferred tax and tax || || |
|relating to earlier years) ||8697.38 ||6697.21 |
|Profit after tax ||21347.77 ||20337.00 |
|Other Comprehensive Income / || || |
|(Loss) for the year net of tax ||(352.93) ||(62.20) |
|Total Comprehensive Income for || || |
|the year net of tax ||20994.84 ||20274.80 |
The board of directors has recommended a dividend of (Rs.7 per share) for the yearended 31st March 2017 absorbing a sum of Rs.1327.73 /- lakhs (excludingdividend tax) for approval of the shareholders at the ensuing annual general meeting.
During the year 2016-17 sales of medium and heavy commercial vehicles (M & HCV)grew by 0.42% over the previous year. The Company achieved total revenue from operationsand other income of Rs.2296.72 crores as against Rs.2039.66 crores in the previous yearan increase of 12.6%.
4. CAPITAL EXPENDITURE
Capital expenditure of Rs.73.91 crores was incurred during the year 2016-17 as againstthe plan of Rs.90 Crores and Capital Expenditure of Rs. 90 Crore is planned for the year2017-18.
Dr. Lakshmi Venu (DIN: 02702020) has been appointed as an Independent Director by theBoard with effect from 19th May 2016 which was approved by the shareholders atthe annual general meeting dated 29th July 2016.
Mr. Jorge Solis retires by rotation at the ensuing annual general meeting of theCompany being eligible offers himself for reappointment.
In compliance with Regulation 36(3) of the Securities Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulation) a briefresume and other required information about the directors who are being reappointed aregiven in the notice convening the annual general meeting of the Company.
The independent directors continue to fulfill the criteria of independence as definedunder Section 149(6) of the Companies Act 2013 ("the Act") and Regulation 16(b)of the Listing Regulation and have furnished the requisite declarations in this regard.
Messrs S. R. Batliboi & Associates LLP Chartered Accountants Chennai (FirmRegistration No. 101049W) were appointed as Statutory Auditors at the Annual GeneralMeeting held on 22nd July 2014 for a period of 5 (five) years from conclusionof 10th annual general meeting upto the conclusion of the 15th Annual GeneralMeeting subject to ratification by members at every annual general meeting. The Boardrecommends the ratification to enable their continuation as Auditors. The Company hasreceived a confirmation from the Statutory Auditors to the effect that they would beeligible for such continuation.
7. SECRETARIAL AUDITOR
M/s. S Krishnamurthy & Co. Company Secretaries have carried out Secretarial Auditunder the provisions of Section 204 of the Act for the financial year 2016-17 andsubmitted their report which is annexed to this report. The report does not contain anyqualification.
8. COST AUDITOR
Pursuant to Section 148 of the Act the Board of Directors of the Company uponrecommendation made by the audit committee has appointed Mr. A.N Raman Cost Accountantas Cost Auditor of the Company for the financial year 2017-18 and has recommended hisremuneration to the shareholders at the ensuing Annual General Meeting.
9. KEY MANAGERIAL PERSONNEL
Mr. P Kaniappan - Managing Director
Mr. R S Rajagopal Sastry - Chief Financial Officer Mr. M C Gokul - Company Secretary
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not provided any Loans or Guarantees to any person or other bodycorporate under Section 186 of the Act and the details of investments made are given inthe notes to the Financial Statements.
11. EVALUATION OF THE BOARD'S PERFORMANCE
During the year the Board adopted a formal mechanism for evaluating its performanceand as well as that of its Committees and directors including the Chairman of the Boardas per the requirements in this regard specified in the guidance note issued by theSecurities Exchange Board of India and the provisions of the Companies Act 2013. Theexercise was carried out through a structured evaluation process covering various aspectsof the functioning of the Board and Committees such as their composition experience &competencies performance of specific duties & obligations governance issues etc.Separate exercise was carried out to evaluate the performance of each individual directorincluding the Board Chairman who were evaluated on parameters such as attendancecontribution at the meetings independent judgment and other relevant aspects.
The Board was satisfied with the evaluation results which reflected the overallengagement of the Board Committees and the directors with the Company.
12. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism through "WABCO Whistle BlowerPolicy" to enable employees and directors to report genuine concerns dealing withinstances of fraud and mismanagement if any. The mechanism provides for adequatesafeguards against victimization of the whistle blower and also provides for direct accessto the Chairman of the audit committee in appropriate or exceptional cases or chief ethicsofficer of the Company as the case may be to report any concerns or unethical activities.
13. BUSINESS RESPONSIBILITY
The Company is one among the top 500 listed companies as per the market cap as on 31stMarch 2016 and hence as per the Listing regulation the Business Responsibility Reportforms part of the annual report commencing from this year. In this regard the Company hasdeveloped a Business Responsibility policy which is approved by the Board. As per thispolicy Mr. P Kaniappan Managing Director is responsible for the implementation of theBusiness Responsibility initiatives. The initiatives of the Company in this regard for theyear 2016-17 are provided in the Business responsibility report.
14. STATUTORY STATEMENTS
14.1 Conservation of energy Research & Development Expenses and foreign exchangeearnings and outgo
Information regarding conservation of energy Research & Development expenses andforeign exchange earnings and outgo is given in Annexure 1 to this report as per therequirements of Section 134(3)(m) of the Act 2013.
14.2 Corporate Social Responsibility
The Company focuses on CSR activities as specified in Schedule VII of the CompaniesAct 2013 and the Companies CSR policy. As required under Section 134(3)(o) of the Actdetails about policy developed and implemented by the Company on Corporate SocialResponsibility initiatives taken during the year ended 31st March 2017 aregiven in Annexure 2 to this report
14.3 Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Act it is hereby confirmed that; a. in thepreparation of the annual accounts the applicable accounting standards have been followedand there are no material departures. b. the directors had selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2017 and of the profit of the Company for the yearended on that date; c. that directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d. the directors had prepared the annual accounts on a going concernbasis; e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and f. the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
15. DISCLOSURES UNDER COMPANIES ACT 2013
15.1 Extract of the Annual Return
Details of extracts of the annual return as per Form MGT - 9 is enclosed in Annexure 3to the Directors' Report.
15.2 Number of Board Meetings
The Board of Directors met five times during the year 2016-17. The details of the Boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport.
15.3 Committees of Board of Directors
Details of memberships and attendance of various committee meetings are given inCorporate Governance Report.
15.4 Related Party Transactions
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no relatedparty transactions made by the company with promotors Directors Key Managerial Personnelor other designed persons which may have a potential conflict with the interest of theCompany at large.
Certain related party transactions entered into during the year ended 31stMarch 2017 and transactions proposed to be entered into during the year ending 31stMarch 2018 between the Company and WABCO Europe BVBA which is fellow subsidiary of thecompany are material in nature and require the approval of members by ordinary resolutionas per the Listing regulation. An ordinary resolution seeking shareholders' approval isincluded in the notice to shareholders.
All transactions with related parties are placed before the audit committee and priorapproval of the audit committee is obtained. The Company has developed a Related PartyTransactions Policy for the purpose of identification and monitoring of such transactions.Details of material Related Party Transactions entered by the company as required underSection 134(3)(h) of the Act and the Listing regulation are given in annexure 4 to thisreport.
16.1 The following policies approved by the Board of Directors of the Company wereuploaded and are available in the Company's website at the web link:http://www.wabco-auto.com/en/investor_relations/ wabco_india_investor_relations CorporateSocial Responsibility Policy Related Party Transaction Policy Nomination and RemunerationPolicy Whistle Blower Policy Code of Practices and Procedures for Fair Disclosure ofUnpublished Price Sensitive Information Policy on Criteria for Determining Materiality ofEvents Dividend Policy
16.2 Policy on director appointment and remuneration Company's policy on directors'appointment and remuneration including criteria for determining qualification positiveattributes independence of a director and other matters provided under Section 178(3) ofthe Act is provided in the Corporate Governance Report.
17. PARTICULARS OF DISCLOSURES AS REQUIRED UNDER
SECTION 197 OF THE COMPANIES ACT 2013
17.1 The ratio of the remuneration of each director to the median employee'sremuneration for the financial year and such other details as prescribed are as givenbelow:
|Name ||Ratio |
|Mr. P. Kaniappan Managing Director ||24.14:1 |
|Mr. M. Lakshmi Narayan Independent Director ||2.06:1 |
|Mr. Narayan Seshadri Independent Director ||2.00:1 |
|Dr. Lakshmi Venu Independent Director ||1.57:1 |
Directors other than those mentioned above have not drawn any remuneration for thefinancial year 2016-17.
17.2 The percentage increase in remuneration of each Director Managing Director ChiefFinancial Officer Company Secretary in the financial year:
|Mr. M. Lakshminarayan Chairman ||3.28% |
|Mr. Narayan K Seshadri Director ||(1.64)% |
|Dr. Lakshmi Venu* ||N.A |
|Mr. P. Kaniappan Managing Director ||10.8% |
|Mr. R.S Rajagopal Sastry || |
|Chief Financial Officer ||10.0% |
|Mr. M.C Gokul Company Secretary ||12.0% |
* In office for part of the year 2016-17 and hence percentage increase cannot becalculated.
17.3 The percentage increase in the median remuneration of employees in the financialyear: 10.93% 17.4 The number of permanent employees on the rolls of Company as on 31stMarch 2017 : 1573 17.5 Average percentage increase already made in the salaries ofemployees other than the managerial personnel in the last financial year: 9.3% Percentageincrease in the managerial remuneration in the last financial year was 10.65%. Mr. R SRajagopal Sastry was appointed as the Chief Financial Officer and Mr. M C Gokul wasappointed as the Company Secretary during the financial year 2015-16. There are noexceptional circumstances for increase in the managerial remuneration. 17.6 The keyparameters for any variable component of remuneration availed by the directors:Independent directors have been paid sitting fees for attending meetings of the
Board and Committees and also paid a profit related commission but not exceeding 1% ofthe net profit of the Company for the financial year. No sitting fee and commission ispaid to non-executive and non-independent Directors of the Company. However with respectto Mr. P. Kaniappan Managing Director of the Company variable component is paid in theform of incentive as per the Remuneration Policy of the Company and based on thefinancial and non-financial parameters.
17.7 The remuneration of directors and employees are as per the remuneration policy ofthe company. 17.8 Particulars of Employees
The statement of particulars of employees as per 197 of the Companies Act 2013 readwith Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 forthe year ended 31st March 2017 is given in annexure 5 and forms part of thisReport.
18. CORPORATE GOVERNANCE
The Company has complied with the provisions of the Listing Regulations concerningcorporate governance and a report to this effect is attached as required by UnderSchedule V of the Listing Regulation. The certificate issued by the auditors of theCompany regarding compliance with the corporate governance requirements is also annexed tothis report. The Managing Director (CEO) and the Chief Financial Officer (CFO) of theCompany have certified to the board on financial statements and other matters inaccordance with Regulation 17(8) of the Listing Regulations pertaining to CEO / CFOcertification for the financial year ended 31st March 2017.
The management discussion and analysis report as required by the Listing Regulationand various disclosures required under the Act is also attached and forms part of thisreport.
19. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has a structured familiarization program for independent Directors of theCompany which also extends to other Non-Executive Directors to ensure that Directors arefamiliarized with their function role rights responsibilities and the nature of thecompany Business viz. automotive component industry and WABCO global business model etc.
The Board of Directors has complete access to the information within the Company.Presentations are regularly made to the Board of Directors and all Committees of the Boardon various matters where Directors get an opportunity to interact with Senior Management.Presentations inter alia cover the Company's strategy business model operationsmarkets organization structure product offerings finance risk management frameworkquarterly and annual results human resources technology quality and such other areas asmay arise from time to time.
The Company also issues appointment letters to the Independent Directors which alsoincorporates their role duties and responsibilities. Further regulatory updates onregulatory changes are also periodically placed before the Board.
The directors thank the vehicle manufacturers distributors vendors and bankers fortheir continued support and assistance. The directors gratefully acknowledge the supportrendered by WABCO Europe BVBA Belgium. The directors wish to place on record theirappreciation of the excellent work done by employees of the Company at all levels duringthe year. The directors specially thank the shareholders for the confidence reposed bythem in the Company.
| ||For and on behalf of the board |
|Chennai ||M. LAKSHMINARAYAN |
|30th May 2017 ||Chairman |