To the Members
Your Directors have the pleasure in presenting the 41stAnnual Report on the business and operations of your Company together with the AuditedStatements of Accounts for the financial period ended March 31 2022:
(Rs in million)
|Particulars ||2021-2022 ||2020-2021 |
|Total Revenue ||14948.78 ||9126.48 |
|Profit before depreciation & tax ||1364.68 ||661.68 |
|Less : Depreciation amortisation expenses ||364.18 ||360.03 |
|Profit before tax ||1000.50 ||301.65 |
|Tax expenses ||256.92 ||74.35 |
|Profit for the year after tax ||743.58 ||227.30 |
|Other comprehensive income/(Loss) for the year net of tax ||(5.50) ||5.96 |
|Total comprehensive income for the year ||738.08 ||233.26 |
|Balance of Profit from Previous Year ||4815.02 ||4593.84 |
|Less: Dividend ||68.01 ||12.08 |
|Profit available for appropriation ||5485.09 ||4815.02 |
The Board at its meeting held on May 17 2022 is pleased to recommenda dividend of Rs 15/- per Equity Share of the face value of Rs 10/- each for the financialyear ended March 31 2022 subject to the approval of shareholders at the ensuing AnnualGeneral Meeting to be held on Friday August 5 2022.
The total amount of Dividend aggregates to Rs 226.68 million. Theregister of members and share transfer books will remain closed from July 30 2022 toAugust 5 2022 (both days inclusive) for the payment of final dividend to the shareholdersof the Company for the year ended on March 31 2022. The Dividend will be paid to memberswithin 30 days from the date of declaration of dividend whose names appear in the Registerof Members as on July 29 2022.
The Dividend Distribution Policy in terms of Regulation 43A of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") is available on theCompany?s website at https://www.autoaxle.com/Downloads/Dividend%20Distribution%20Policy.pdf.
Transfer of unpaid or unclaimed amount to Investor Education andProtection Fund (IEPF)
Pursuant to provisions of the Companies Act 2013 the declareddividends which remained unpaid or unclaimed for a period of seven years shall betransferred by the Company to the Investor Education and Protection Fund (IEPF)established by the Central Government.
Pursuant to Section 124(6) of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Rules 2016 as amended all shares in respect of which dividend has not been paid orclaimed for seven consecutive years or more shall be transferred by the Company to theIEPF.
Accordingly the Company has sent notice to the respective shareholderswho have not claimed their dividend for seven consecutive years or more and the newspaperadvertisement stating the same has been published in the newspapers. In terms of theprovisions of the Companies Act 2013 and Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 a sum of Rs 148605/- which isunpaid/unclaimed dividends pertaining to the FY 2013-14 was transferred to the InvestorEducation and Protection Fund during the year.
The list of equity shareholders whose shares are transferred to IEPFcan be accessed on the website of the Company at below mentioned link:https://autoaxle.com/Annual_reports. aspx under the head IEPF Transfers
Performance of the Company
The total income for the financial year under review was Rs 14948.78Million as against Rs 9126.48 Million for the previous financial year. The Profit beforetax (PBT) was Rs 1000.50 Million for the financial year under review as against Rs 301.65Million for the previous financial year.
The paid up Equity Share Capital as on March 31 2021 stood at Rs151.12 Million. During the year under review the Company has not issued shares withdifferential voting rights nor has granted any stock options nor sweat equity.
Your Company has not accepted any deposits under Chapter V of theCompanies Act 2013 during the year.
Transfer to Reserve
The company has not proposed any amount to be transferred to theGeneral Reserves.
The equity shares of the Company are listed with BSE Limited andNational Stock Exchange of India Limited. There are no arrears on account of payment oflisting fees to the Stock Exchanges.
Directors & Key Managerial Personnel:
As on March 31 2022 there were seven (7) Directors on the Board ofyour Company consisting of four (4) Independent Directors one (1) Executive Director andtwo (2) Non-Executive Directors of whom one is the Chairman.
Mr. Kenneth James Hogan (DIN: 0009161738) was appointed as anAdditional Director of the Board based on nomination received from the Meritor HeavyVehicle System LLC one of the promoters and also on the recommendation of Nomination& Remuneration Committee of the Company in place of Mr. Chrishan Anton SebastianVillavarayan (DIN: 03020467) who resigned from the Board w.e.f May 14 2021. The Boardplaces its appreciation for Mr. Chrishan Anton Sebastian Villavarayan?s valuablecontributions during his tenure. Appointment of Mr. Kenneth James Hogan (DIN: 0009161738)got regularised by the shareholders in their 40th Annual General Meeting heldon August 10 2021.
Mr. Srinivasan Kumaradevan (DIN: 08107660) has resigned from theposition of Wholetime Director of the company with effect from July 31 2021.
Dr Muthukumar N. (DIN: 06708535) has been appointed as President andWhole-time Director w.e.f. January 27 2022.
However after the closure of the financial year:
Mr.Nagaraja Sadashiva Murthy Gargeshwari (DIN:00839616) has beenappointed as President and Whole-time Director of the Company w.e.f. April 7 2022 for aperiod of five years subject to the approval of Central Government.
Dr Muthukumar N. (DIN: 06708535) has resigned from the position ofWholetime Director of the company with effect from May 05 2022.
Below two resolutions were passed by the shareholders through postalballot on April 26 2022;
1. Appointment of Mr. Nagaraja Sadashiva Murthy Gargeshwari(DIN:00839616) as Whole Time Director of the Company for a period of five (5) yearseffective April 7 2022.
2. Ratification of appointment of Dr. Muthukumar N. (DIN : 06708535)as Whole Time Director of the Company from January 27 2022 to April 5 2022.
In terms of the provisions of the Companies Act 2013 Dr. B. N.Kalyani Director of the Company retires by rotation at the ensuing Annual General Meetingand being eligible offers himself for re-appointment.
Declaration by Independent Directors
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet with the criteria of independence andthat there has been no change in the circumstances which may affect their status asindependent director during the year as prescribed under sub-section (6) of Section 149 ofthe Companies Act 2013 and Securities and Exchange Board of India (Listing Obligationsand Disclosure requirements) Regulations 2015. Further the names of the IndependentDirectors of the Company have been included in the Data bank maintained by the IndianInstitute of Corporate Affairs of Independent directors as per the provisions of theCompanies Act 2013 and the rules made thereunder.
The Companies Act 2013 states that a formal Annual Evaluation needs tobe made by the Board of its own performance and that of its committees and individualDirectors. Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates that the Board shall monitor and review theBoard evaluation framework. Pursuant to these provisions the Company has developed aframework for the Board evaluation. The framework includes evaluation on variousparameters such as information flow Board dynamics decision making company performanceand strategy Board and committee?s effectiveness and peer evaluation.
The evaluation of all the Directors and the Board as a whole wasconducted based on the criteria and framework adopted by the Board.
During the year 2021-22 Independent Directors met on February 4 2022discussed and reviewed the below:
Performance of Non Independent Directors
Performance of the Chairman
Performance of the Board Committees
Discussed on the quality quantity and timeliness of flow ofinformation between the Company management and the Board Members.
Overall performance of the Company.
The Nomination and Remuneration Committee is responsible for theformulation of criteria for evaluation.
Familiarisation program for the Board Members
Your Company has in place a structured induction and familiarisationprogram for all its Directors including Independent Directors and new appointee(s) to theBoard. Through such programs the Directors are briefed on the background of your Companytheir roles rights responsibilities nature of the industry in which it operatesbusiness model operations ongoing events etc.
The Board members are provided with the necessary documents brochuresreports and internal policies to enable them to familiarise with the Company?sprocedure and practice.
Periodic presentations are made at the Board Meetings Board CommitteeMeetings and Independent Directors Meetings on business and overall performance updates ofthe Company business strategy and risk involved.
The details of programs for Familiarisation for Independent Directorsare posted on the website of the Company and can be accessed at below weblink:
Directors? Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Companies Act2013 with respect to Directors? Responsibility Statement your Directors make thefollowing statements:
(a) in the preparation of the annual accounts for the year ended March31 2022 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) we 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 as at March 31 2022 andof the profit of the company for the year ended on that date;
(c) we 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;
(d) we have prepared the annual accounts on a going concern basis;
(e) we have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;
(f) we have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Auditors & Auditors? Report
a. Statutory auditor
M/s. S R Batliboi & Associates LLP Chartered Accountants [FirmRegistration No.: 101049W/ E300004] the statutory auditors of the Company will holdoffice till the conclusion of the 41st Annual General Meeting of the Company.The Board has recommended the re-appointment of M/s. S R Batliboi & Associates LLPChartered Accountants as the statutory auditors of the Company for a second term of fiveconsecutive years from the conclusion of the 41st Annual General Meetingscheduled to be held in the year 2022 till the conclusion of the 46th AnnualGeneral Meeting to be held in the year 2027 for approval of shareholders of the Companybased on the recommendation of the Audit Committee.
The Auditors? Report does not contain any qualificationreservation or adverse remarks.
Further no frauds have been reported by the Auditors in their reports.
b. Internal Auditor
On recommendation of the Audit Committee Board of Directors approvedthe re-appointment of M/s PriceWaterhouse Coopers Services LLP as Internal Auditors of theCompany for the Financial Year 2022-23.
c. Secretarial Auditor
Pursuant to the provisions of the Section 204 of the Companies Act2013 and the rules made there under and based on the recommendations of the AuditCommittee CS Pracheta M Practicing Company Secretary has been appointed to conductSecretarial Audit of the Company?s secretarial and other related records for thefinancial year 2022-23.
The Secretarial Audit Report for the financial year ended March 312022 Form MR-3 is appended to this report under Annexure A
Explanation for observations made under Secretarial Audit Report:
As per the observations made by secretarial Auditor on delay of 8 daysin the reconstitution of Stakeholders relationship committee it is to clarify to themembers that the company has already complied this requirement on November 8 2022 paidthe fine to the stock exchanges and noted it in their Board Meeting held on March 182022. Going forward company will strengthen the process not to skip such compliancerequirement.
Internal Financial Controls
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company?s policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures. During the year such controls were tested and noreportable material weaknesses in the design or operation were observed.
Corporate Governance is about maximising the value and to ensurefairness to all its shareholders. Your Company is renowned for its exemplary governancestandards and believes that sound corporate governance is critical to enhance and retaininvestor trust. Your Company ensures that performance is driven by integrity.
The Companies Act 2013 and the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 have strengthened thegovernance regime in the country and your Company is in compliance with the governancerequirements provided under the law both in letter and spirit. The Board also exercisesits fiduciary responsibilities in the widest sense of the term.
Your Company has in place all the statutory committees required underthe law. Details of the Board Committees along with their terms of reference compositionand meeting of the Board and its Committees held during the year are provided in theCorporate Governance Report which is presented in a separate section forming part of theAnnual Report.
A Certificate from CS. Pracheta M. Practicing Company Secretaryconfirming compliance with the conditions of Corporate Governance as stipulated under theaforesaid Regulation 34(3) Schedule V (E) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 is attached to theCorporate Governance Report.
Meetings of the Board
During the financial year the Board met five times details of whichare provided in the Corporate Governance Report. The maximum interval between any twomeetings did not exceed 120 days as prescribed under the Companies Act 2013.
Committees of the Board
Your Company has the following committees which have been establishedas a part of the corporate governance practices and are in compliance with therequirements of the Companies Act 2013 and the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirement) Regulations 2015.
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility Committee
Risk Management Committee
The details with respect to the compositions roles number of meetingsheld during the year is detailed in the corporate governance report of the Company whichforms a part of this Board?s Report.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo
The particulars relating to conservation of energy technologyabsorption foreign exchange earnings and outgo as required to be disclosed under Section134 of the Companies Act 2013 read with Companies (Accounts) Rules 2014 are appended as Annexure- B to this report.
Particulars of Remuneration of Directors & certain specifiedemployees:
In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rule 5 of Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 the ratio of remuneration of each Director to the median of theemployees? remuneration a statement containing the names of top ten employees interms of remuneration drawn and every employee who is employed throughout the financialyear and was in receipt of a remuneration of Rs 102 lacs per annum or more and of everyemployee who is employed part of the financial year was in receipt of remuneration of Rs8.50 lacs or more per month is appended as Annexure - C.
Annual Return 2021-22
The copy of Annual Return for the financial year ending March 31 2022is available at https://www.autoaxle.com/ Annual_Return.aspx
Particulars of Loans Guarantees or Investment under Section 186 of theCompanies Act 2013
Particulars of loans covered under Section 186 of the Companies Act2013 form part of the notes to the financial statement provided in this Annual Report.These loans are primarily granted for furtherance of business of the borrowing companies.
Your Company has not given any guarantee or provided any security inconnection with a loan to any other body corporate or persons and has not made anyinvestment in the securities of any other body corporate.
Policy on Directors? Appointment & Remuneration
The current policy is to have an appropriate mix of executive andindependent directors to maintain the independence of the Board and separate its functionsof governance and management. On March 31 2022 the Board consist of seven members oneof whom is executive or whole-time director two are non executive directors and four areindependent directors out of whom one is an Independent Woman Director.
The Nomination and Remuneration Policy of the Company has beenformulated in accordance with the Act and Listing Regulations. The Policy is designed toguide the Board in relation to appointment and removal of directors Key ManagerialPersonnel and Senior Management and recommend to the Board on remuneration payable tothem. Policy enables the Company to retain motivate and promote talent and to ensure longterm sustainability of talented managerial persons and create competitive advantage. Thecurrent policy is available on Company?s website at https://www.autoaxle.com/Investor_Policy.aspx
Particulars of contracts or arrangements with Related Parties (RPT)
The related party transactions that were entered into during thefinancial year were in the ordinary course of business and on the arm?s length basis.
All related party transactions are placed before the Audit Committeeand also the Board for approval. Prior omnibus approval of the Audit Committee is obtainedon a yearly basis for the transactions which are foreseen and of repetitive nature.
For transactions with Meritor HVS (India) Limited the Company hasobtained shareholders? approval at their 37th Annual General Meeting heldon August 13 2018 for transaction value annually of Rs 30000 Million for a period offive (5) financial years starting from April 1 2019. Further all transactions enteredinto pursuant to the omnibus approval so granted are reviewed and a statement givingdetails of all related party transactions is placed before the Audit Committee and theBoard of Directors for their review on a quarterly basis.
In accordance with the requirements of the Companies Act 2013 andSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company has formulated a Policy on Related Party Transactionswhich is also available on Company?s website athttps://www.autoaxle.com/Investor_Policy.aspx Related Party disclosures as per IndianAccounting Standards (Ind AS)-24 have been provided in Note No. 37 to the financialstatement.
The particulars on RPTs in Form AOC 2 is annexed to the Report as Annexure D
Risk Management System
The Company has a robust risk management framework comprising riskgovernance structure and defined risk management processes. This processes include thedevelopment and implementation of a risk management policy for the company includingidentification therein of elements of risk if any which in the opinion of the Board maythreaten the existence of the company. The risk governance structure of the Company is aformal organisation structure with defined roles and responsibilities for risk management.The processes and practices of risk management of the Company encompass riskidentification classification and evaluation. The Company identifies all strategicoperational and financial risks that the Company faces by assessing and analysing thelatest trends in risk information available internally and externally and using the sameto plan for risk activities.
The Company has set up a Risk Management Committee to review the risksfaced by the Company and monitor the development and deployment of risk mitigation actionplans and the status is updated to the members of the Audit Committee and the Board ofDirectors on quarterly basis.
Corporate Social Responsibility (CSR):
The Company has been carrying out various Corporate SocialResponsibility (CSR) activities. These activities are in terms of Section 135 read withSchedule VII of the Companies Act 2013 and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 read with CSR policy of the Company. During the year the Company hasspent Rs 36.23 Million on various CSR activities including Rs 16.99 Million of unspent CSRamount pertaining to the fiscal year 2020-21.
The Annual Report on CSR activities that includes details about the CSRpolicy developed and implemented by the Company and CSR initiatives taken during the yearis appended to the Report as Annexure E.
State of Company?s Affairs
Discussion on state of Company?s affairs has been covered as partof the Management Discussion and Analysis (MDA). MDA for the year under review asstipulated under Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented in a separate section formingpart of the Annual Report.
Management Discussion and Analysis Report
Pursuant to Regulation 34(2)(e) of Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ManagementDiscussion and Analysis Report is presented in a separate section forming part of theAnnual Report.
Business Responsibility Report
A detailed Business Responsibility Report in terms of the provisions ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is available as a separate section in the Annual Report.
Your Company is committed to highest standards of ethical moral andlegal business conduct. Accordingly the Board of Directors have formulated a WhistleBlower Policy which is in compliance with the provisions of Section 177 of the CompaniesAct 2013 and Regulation 22 of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. Under the policy the Directors andemployees are free to report any violation of the applicable laws and regulations and thecode of conduct of the Company. The reportable matters are to be disclosed to the AuditCommittee. During the year under review the Company has not received any complaints underthe said mechanism.
Disclosure under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Your Company has always believed in providing a safe workplace forevery individual working in Company?s premises through various interventions andpractices. The Company always endeavours to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.
In terms of provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has formulated a Policy toprevent Sexual Harassment of Women at Workplace. The Company has also constituted InternalCommittee as required under the said enactment. During the year under review there wereno cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Significant or Material Orders
No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company?s operations infuture.
Material Changes and Commitments if any affecting the FinancialPosition of the Company
There were no adverse material changes or commitments occurred afterMarch 31 2022 which may affect the financial position of the Company or may requiredisclosure.
Subsidiaries Joint Ventures and Associates
Your Company does not have any subsidiary joint venture or associates.
Change in the nature of business
There is no change in the nature of business of your Company.
The Directors have devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards and that such systems are adequate andoperating effectively.
Awards and Recognition
During FY 2021-22 your company received recognitions from thefollowing bodies/customers as listed below:
1. Bagged 4 Gold Awards & 1 Silver Award during Confederation ofIndian Industry (CII) Mysuru Chapter Convention on Quality Concept Kaizens competition(CCQC-2021) in Sep 2021
2. Won 3 Excellence award in NCQC-2021 Allied Case Study Presentationcompetition during National Convention on Allied Concepts held during Dec 2021 inCoimbatore
3. Team Pragathi won Excellence award in ICQCC-2021 Allied Case StudyPresentation competition during International Convention on Allied Concepts held duringNov 2021 in Hyderabad.
4. Bagged advance problem solving (APS) project appreciation award byAshok Leyland for the Quality improvements in Aug?21.
5. Bagged Global President quality achievement award by Meritor for theQuality improvement project in Nov?21.
Maintenance of Cost records
The maintenance of cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 is required by theCompany and accordingly such accounts and records are made and maintained.
Your company has not made any application nor any proceeding ispending against the company under the Insolvency and Bankruptcy Code 2016 during the yearunder review.
As the company has not made any one time settlement with any banks orfinancial institution during the year under review Rule (8) subrule (4) clause (xii) ofCompanies (Accounts) Rules2014 is not applicable.
Your Directors wish to convey their gratitude and place on record theirappreciation for the employees at all levels for their hard work cooperation anddedication during the year. Your Directors sincerely convey their appreciation tocustomers shareholders bankers business associates regulatory and governmentauthorities for their continued support.
Your Directors wish to place on record their appreciation for thecontinued co-operation and support extended by Kalyani Group Pune and Meritor Inc. USA
| ||For and on behalf of the Board of Directors |
|Place : Pune ||B. N. Kalyani |
|Date : May 17 2022 ||Chairman |