To the Members of Eicher Motors Limited
The Directors have pleasure in presenting the Thirty Eighth Annual Report along withthe Audited Financial Statements of your Company for the financial year ended March 312020.
Your Company has earned a Net revenue from operations of Rs. 9077.47 crores during thefinancial year 2019-20. The profit before depreciation and interest expense includinginterest on lease liability (Ind AS 116) of Rs. 10.86 crores amounted to Rs. 2203.78crores which is 24.3% of the total revenue. After accounting for other income of Rs.615.34 crores interest expense of Rs. 10.86 crores and depreciation of Rs. 377.92 croresprofit before exceptional item and tax amounted to Rs. 2430.34 crores.
Profit after tax amounted to Rs. 1903.82 crores after income tax provision of Rs.526.52 crores. Total Comprehensive Income for the year net of tax amounted to Rs.1910.84 crores.
The financial results are summarized below:
|Net Revenue from operations ||9077.47 ||9794.48 |
|Profit before depreciation and interest ||2203.78 ||2944.38 |
|Interest ||10.86 ||2.99 |
|Depreciation ||377.92 ||298.93 |
|Profit before other income and tax ||1815.00 ||2642.46 |
|Other income ||615.34 ||508.04 |
|Profit before exceptional items and tax ||2430.34 ||3150.50 |
|Exceptional items ||- ||(17.52) |
|Profit before tax ||2430.34 ||3132.98 |
|Provision for tax (including Deferred tax) ||526.52 ||1078.54 |
|Net profit after tax ||1903.82 ||2054.44 |
|Other comprehensive income ||7.02 ||(5.77) |
|Total Comprehensive income for the year/period net of tax ||1910.84 ||2048.67 |
|Balance in statement of profit and loss brought forward from previous year ||6576.63 ||4871.26 |
|Amount available for appropriation |
(Excluding exchange difference in translation of foreign operations)
|8471.89 ||6924.79 |
|Dividend for FY 2018-19 paid in 2019-20 ||- ||341.11 |
|Interim dividend proposed and paid in 2019-20 ||341.32 ||- |
|Tax on dividend ||70.16 ||56.14 |
|Earnings per share || || |
|- Basic (Rs.) ||697.50 ||753.37 |
|- Diluted (Rs.) ||697.16 ||752.54 |
CHANGE IN THE NATURE OF BUSINESS IF ANY
There is no change in the nature of business of the Company during the financial yearunder review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL poSITIoN of THE company THATHAVE OCCURRED AFTER MARCH 31 2020 TILL THE DATE OF THIS REPORT
Due to COVID-19 the Company temporarily suspended the operations in all the units ofthe Company. COVID-19 has impacted the normal business operations of the Company by way ofinterruption in production supply chain disruption
unavailability of personnel closure/lock down of production facilities retail outletsof dealers etc. However production and sales/supply of goods have commenced during themonth of May 2020 with partial capacity.
The Company has performed a detailed assessment of its liquidity position and therecoverability of the assets as at the Balance Sheet date and has concluded that based oncurrent indicators of future economic conditions the carrying value of the assets will berecovered. Management believes that it has fully considered all the possible impact ofknown events in the preparation of the standalone financial results. However the impactassessment of COVID-19 is a continuing process given the uncertainties associated withits nature and duration. The Company will continue to monitor any material changes tofuture economic conditions and the consequent impact on its business if any.
The Board of Directors at its meeting held on March 11 2020 has approved payment ofinterim dividend of Rs. 125/- per Equity Share (@1250%) of face value of Rs. 10/- eachout of the then profits of the Company for the financial year 2019-20 in accordance withthe Dividend Distribution Policy of the Company.
The entitlement of interim dividend has been determined in the following manner:
a) To all Beneficial Owners in respect of shares held in dematerialized form as per thedata made available by the National Securities Depository Limited (NSDL) and the CentralDepository Services (India) Limited (CDSL) as of the close of business hours on March 212020 (record date);
b) To all Members in respect of shares held in physical form after giving effect tovalid transfer/transmission in respect of transfer/transmission requests lodged with theCompany on or before the close of business hours on March 21 2020 (record date).
Out of the total Interim Dividend amount the Company has completed remittance ofpayment through electronic transfer. The Interim Dividend amount to be paid throughWarrants and Bank Demand Drafts is pending dispatch due to nationwide lockdown/movementrestrictions imposed by the Government on account of Covid-19 outbreak and the same willbe dispatched promptly once normalcy is restored.
AMOUNTS TRANSFERRED TO RESERVES
During the financial year 2019-20 no amount was transferred to General Reserve of theCompany.
BRIEF DESCRIPTION OF THE STATE OF THE COMPANY'S AFFAIRS/ BUSINESS pERFORMANCE
Your Company has sold 698216 motorcycles in the financial year 2019-20 15.2% lowerwhen compared to financial year 2018-19 sales of 823828 motorcycles. Out of 698216motorcycles sold in 2019-20 39296 motorcycles were exported a growth of 88.7% over thevolume of 20825 motorcycles exported in financial year 2018-19.
Net Revenue from operations for financial year 2019-20 year was Rs. 9077.47 crores7.3% lower when compared with previous financial year (Rs. 9794.48 crores). Net Sales ofspare parts gears and services increased to Rs. 1075.18 crores in financial year 2019-20from Rs. 1056.39 crores in the previous financial year registering a growth of 1.8%.
Your Company's profit before depreciation interest exceptional item and tax was Rs.2203.78 crores in financial
year 2019-20 lower by 25.2% over Rs. 2944.38 crores recorded in financial year2018-19.
MARKET AND FUTURE PROSPECTS
Please refer to Management Discussion & Analysis Report which forms part of theAnnual Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information on conservation of energy technology absorption foreign exchange earningsand outgo as required to be given pursuant to the provisions of Section 134 of theCompanies Act 2013 ("the Act") read with the Companies (Accounts) Rules 2014is provided under Annexure-1.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIALRIGHTS
The Company has not issued any sweat equity shares or equity shares with differentialrights during the financial year 2019-20.
CHANGES IN SHARE CARITAL & THE COMPANY'S EMPLOYEE STOCK OPTION PLAN 2006ANDRESTRICTED STOCK UNITS PLAN 2019
The paid up Equity Share Capital of the Company as on March 31 2020 was Rs.273045700/-. During the year under review the Company has issued 22000 Equity Sharesof face value of Rs. 10/- each pursuant to its Employees Stock Option Plan 2006("ESOP 2006"). No shares have been issued under the Company's Restricted StockUnits Plan 2019 ("RSU Plan 2019").
A Statement giving complete details as at March 31
2020 pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits)Regulations 2014 is available on the website of the Company and the weblink for the sameis https://www.eicher.in/uploads/1594715939_Eicher-Motors- ESOP-Statement-2019-20.pdf
ESOP 2006 and RSU Plan 2019 for grant of stock options have been implemented inaccordance with the aforesaid SEBI Regulations. A certificate from M/s S.R. Batliboi &Co.
LLP Statutory Auditors in this regard will be available for inspection on the websiteof the Company under "Investors" Section. The Company has not changed its ESOP2006 and RSU Plan 2019 during the year under review.
Further details of options granted and exercised are included in Note no. 50 in thenotes to accounts forming part of consolidated financial statements.
The Company has not accepted any deposits from the public/members under Section 73 ofthe Act read with the Companies (Acceptance of Deposits) Rules 2014 during the financialyear under review. The Company has not renewed/ accepted fixed deposits after May 292009. There are no deposits that remain unclaimed.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with Section 149(7) of the Act all the Independent Directors of theCompany have given written declarations to the Company confirming that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation 16 ofSEBI (LODR) Regulations
2015. As on March 31 2020 all Independent Directors of the Company have registeredthemselves in the Independent Director's databank maintained by Indian Institute ofCorporate Affairs in terms of Section 150 of the Companies Act 2013 read with Rule 6 ofthe Companies (Appointment and Qualifications of Directors) Rules 2014.
In accordance with the provisions of Section 152 and other applicable provisions of theAct & the Articles of Association of the Company Mr. Vinod K. Aggarwal Non-ExecutiveDirector retires by rotation and being eligible offers himself for re-appointment at theensuing AGM. The Board of Directors of the Company at its meeting held on February 62020 re-appointed Mr. S. Sandilya and Ms. Manvi Sinha as Independent Directors of theCompany for a period of 5 (five) consecutive years each with effect from February 132020 after taking into consideration recommendations of the Nomination & RemunerationCommittee of the Company and subject to requisite approval of the shareholders at theensuing AGM. In the opinion of the Board Mr. S. Sandilya and Ms. Manvi Sinha possessrequisite skills & expertise in the context of business of the Company. For details onskills/expertise/competencies of Mr. Sandilya and Ms. Sinha respectively please referCorporate Governance Report forming part of this Annual Report.
During the year under review Mr. Vinod Kumar Dasari Whole-time Director &CEO-Royal Enfield and Mr. Vinod Kumar Aggarwal Non-Executive Director were appointed onthe Board of the Company w.e.f. April 1 2019 with requisite approvals of theshareholders obtained at the 37th Annual General Meeting held on August 12019. There has been no other change in the Directors and Key Managerial Personnel of theCompany during the financial year under review. Further the Board at its meeting held onMay 6 2020 has appointed Mr. Kaleeswaran Arunachalam as the Chief Financial Officer ofthe Company with effect from May 6 2020 in place of Mr. Lalit Malik who shall continueas the Chief Commercial Officer of the Company.
THE COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's Hiring & Employment Policy:
A number of factors are considered towards selecting candidates at the Board levelwhich include:
? Ability to contribute to strategic thinking
? Proficiency in Governance norms policies and mechanisms at the Board level
? Relevant cross industry/functional experience educational background skills andexperience
? Wherever relevant independence of Directors in terms of applicable regulations.
With respect to core competencies and personal reputation our practices ensure throughthe selection process that all Directors:
? Exhibit integrity and accountability
? Exercise informed judgement
? Are financially literate
? Are mature and confident individuals
? Operate with high performance standards
Removal of Directors
Under extreme circumstances and in highly unusual situations it may become necessary toremove a member from the Board of Directors. Reasons for doing so may relate to any ofthe following (indicative; other than as provided under the Companies Act 2013):
i. Breach of confidentiality in anyway
ii. Failure to meet obligatory procedures in the disclosure of conflict of interest
iii. Failure to fulfil the fiduciary duties of a Director for the Company
iv. Acting in any other manner which is against the interests of the Company
The Company's Remuneration Policy:
The Company's Compensation Strategy defines the principles underlying compensationphilosophy for its employees. Compensation is a critical piece of overall human-resourcesstrategy and broadly refers to all forms of financial returns and tangible benefits thatemployees receive as a part of their employment relationship.
The Remuneration/Compensation Policy of the Company is designed to attract motivateand retain manpower. This Policy applies to Directors and Senior Management including KeyManagerial Personnel (KMP) and other employees of the Company.
The remuneration of the Managing Director Executive Director Key Managerial Personnel(KMPs) and CXOs of the Company is recommended by the Nomination and Remuneration Committeebased on criteria such as industry benchmarks the Company's performance vis-a-vis theindustry responsibilities and performance assessment. The Company pays remuneration byway of salary perquisites and allowances (fixed component) incentive remuneration and/orcommission (variable components).
Loans/advances may be extended to employees for various personal purposes or to aidbusiness functions from time to time on a case to case basis in accordance with therelevant Human Resource guidelines/policies in force or as may be approved by the ChiefFinancial Officer the Chief Human
Resource Officer of the Company or any person authorized by them including forrelocation viz. school deposits/expenses travel/logistics expenses housing advancehousing deposits/ brokerage any other expenses towards relocation; advance submission oftax deducted at source by the Company on behalf of employee; advance towards medicalinsurance premiums; loans granted to enable grantees exercise ESOPs and towards deposit ofperquisite tax thereon; loans/advances covered under Employees Union recognized by theCompany as per Union Agreement; medical emergency advances etc.
Additionally in the event of exigencies arising due to calamities the Company mayprovide financial assistance to any affected employee by way of extending interest freeloan in an amount not exceeding his/her two months' gross salary.
Remuneration by way of commission to the Non-Executive Directors shall be decided bythe Board of Directors within the ceiling of a sum not exceeding 1% of the annual netprofits of the Company in each of the financial year calculated in accordance with theprovisions of the Act and as approved by the members by passing a resolution in thegeneral meeting.
Remuneration of KMPs and employees largely consists of basic remuneration perquisitesallowances performance incentives and employee stock options granted pursuant to theEmployees Stock Option Plan of the Company. The components of remuneration vary fordifferent employee levels and are governed by industry patterns qualifications andexperience of the employee and his/her responsibility areas employee performanceassessment etc.
The said Policy is also available on the website of the Company athttp://www.eicher.in/uploads/1561782697_remuneration-policy.pdf
ANNUAL EVALUATION OF BOARD COMMITTEES AND INDIVIDUAL DIRECTORS
During the financial year under review formal annual evaluation of the Board itsCommittees and individual Directors was carried out pursuant to the Board PerformanceEvaluation Policy of the Company and provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015.
The Nomination and Remuneration Committee specified the criteria for effectiveperformance evaluation of the Board its Committees and Individual Directors of theCompany. The performance of the Board and Committees was evaluated after seeking inputsfrom all the Directors on the basis of the criteria such as Board/ Committee constitutionfrequency of meetings effectiveness of processes etc. The performance of individualDirectors (including Independent Directors) was evaluated by the Board (excluding theDirector being evaluated) after seeking inputs from all Directors on the basis of thecriteria such as thought contribution business insights and applied knowledge. After theBoard carried out aforesaid evaluation the Nomination & Remuneration Committeereviewed implementation of the manner specified by it for performance evaluation &effectiveness of the process.
A separate meeting of Independent Directors was also held to review the performance ofthe Managing Director
performance of the Board as a whole and performance of the Chairperson of the Company.Review of the performance of the Chairperson was done after taking into account the viewsof the Executive Director and Non-Executive Directors (excluding the Chairperson beingevaluated).
MEETINGS OF BOARD OF DIRECTORS
Eight (8) meetings of the Board of Directors of the Company were conducted during thefinancial year under review.
The details of Board/Committees/Shareholder meetings are provided under the CorporateGovernance Report which forms part of the Annual Report.
DETAILS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of loans guarantees and investments made by the Company during thefinancial year under review which are covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
PARTICULARS OF RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered into by the Company during thefinancial year with related parties are in compliance with the applicable provisions ofthe Companies Act 2013 and SEBI (LODR) Regulations 2015. Requisite approval of the AuditCommittee and the Board (wherever required) was obtained by the Company for all RelatedParty Transactions.
There were no materially significant Related Party Transactions made by the Companywith Promoters Directors or Key Managerial Personnel subsidiaries joint ventures andassociate companies which may have a potential conflict with the interest of the Company.There are no transactions that are required to be reported in Form AOC-2 hence the saidform does not form part of this report. However the details of the transactions withrelated parties are provided in the Company's financial statements in accordance withIndian Accounting Standards.
The Company has a Policy on materiality of and dealing with Related Party Transactionsas approved by the Board which is available on its website www.eichermotors.com.
The Audit Committee of the Company is constituted pursuant to the requirements of theCompanies Act 2013 and SEBI (LODR) Regulations 2015. At present members of the AuditCommittee are:
|Sl. No. Name of Members |
|1 Mr. S Sandilya (Chairman) |
|2 Mr. Siddhartha Lal |
|3 Ms. Manvi Sinha |
|4 Mr. Inder Mohan Singh |
During the year under review the Board at its Meeting held on November 8 2019appointed Mr. Inder Mohan Singh Non-Executive Independent Director as Member of the AuditCommittee.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM
The Company has formulated a Whistle Blower Policy to establish a vigil mechanism forDirectors employees dealers and vendors of the Company to report concerns aboutunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct or Ethics Policy or to report genuine concerns or grievances including instancesof leak or suspected leak of unpublished price sensitive information pursuant to SEBI(Prohibition of Insider Trading) Regulations 2015. The Whistle Blower Policy of theCompany is available at https://www.eicher.in/uploads/1581075167_whistle_blower_policy.pdf.
SUBSIDIARIES ASSOCIATE AND JOINT VENTURE COMPANIES
Highlights of performance of subsidiaries and joint venture companies and theircontribution to the overall performance of the Company during the year under review:
Royal Enfield North America Limited (RENA)
RENA was incorporated in March 2015 as a 100% subsidiary of Eicher Motors Limited tomanage the distribution and sales of Royal Enfield products and services includingmotorcycles spares and gear in North America. It sold 3322 motorcycles (excluding 301motorcycles sold to Royal Enfield Canada Limited 100% subsidiary of RENA) during the year2019-20 and achieved revenue of Rs.114.63 crores (including revenue of Rs. 9.45 crores bysales to Royal Enfield Canada Limited).
As of March 2020 RENA had contracted with 108 multi brand outlets in USA.
Royal Enfield Canada Limited (RECA)
RECA is a 100% subsidiary of RENA. RECA was incorporated in April 2016 in Canada tomanage the distribution and sales of Royal Enfield products and services includingmotorcycles spares and gear in Canada. During the year 2019-20 the Company sold 301motorcycles and achieved revenue of Rs. 10.10 crores. As of March 2020 RECA hadcontracted with 12 multi brand outlets in Canada.
Royal Enfield Brasil Comercio De Motocicletas Ltda. (REBRA)
Royal Enfield started its operations in Brazil through a direct distribution company bythe name of Royal Enfield Brasil Comercio de Motocicletas Ltda in 2016. During the yearthe Company sold 2300 motorcycles and achieved revenue of Rs. 45.29 crores.
Royal Enfield (Thailand) Ltd (RETH)
Royal Enfield (Thailand) Ltd. was incorporated on September 18 2018 and commencedsales operations from September 2019. The Company's footprints have grown to 14 exclusivestores and 12 Authorized Sales & Service Points. In the year
2019 the Company received two awards from the Grand Prix group for Interceptor beingthe "Best Modern Classic" and Himalayan being "Best LightweightTourer" motorcycle. The Company plans to commence assembly operations from the year2021 to cater to ASEAN region. During the year 2019-20 the Company sold 690 motorcyclesand achieved revenue of Rs. 26.06 crores.
Royal Enfield (UK) Limited (REUK)
Royal Enfield (UK) Limited was incorporated on August 20 2019 to engage in thewholesale business of motorcycles apparels spares & accessories. The Company is yetto commence trading operations as at March 31 2020.
Eicher Polaris Private Limited (EPPL)
Eicher Polaris Private Limited a joint venture company was involved in manufacturingand sales of personal utility vehicles.
The Board of Directors and Shareholders of EPPL at their respective meetings held onFebruary 18 2020 approved voluntary liquidation (solvent liquidation) of EPPL andappointed an insolvency professional as the liquidator. The liquidation process is underprogress currently.
VE Commercial Vehicles Limited and its step-down subsidiaries
Overview of performance covered separately in the Annual Report.
Report containing salient features of financial statements of subsidiaries and jointventure companies
Pursuant to the provisions of Section 129(3) of the Act a report containing salientfeatures of the financial statements of the Company's subsidiaries and joint venturecompany in Form AOC-1 is attached as Annexure-2.
COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE COMPANY'S SUBSIDIARIES
JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR
During the financial year under review Royal Enfield (UK) Ltd. ("REUK") wasincorporated on August 20 2019 as wholly owned subsidiary of the Company. No othercompany has become or ceased to be the Company's subsidiary joint venture or associatecompany during the financial year 2019-20.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE
There are no significant material orders passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations. However members' attention is drawn to the statement on contingentliabilities commitments in the notes forming part of the Financial Statements.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
Details of internal financial control and its adequacy are included in the ManagementDiscussion and Analysis Report which forms part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted a Corporate Social Responsibility (CSR) Committee and hasframed a Corporate Social Responsibility Policy and identified Healthcare Children'seducation Road safety Environmental sustainability Local Area Development in includingbut not limited to areas around the Company's establishments & in Himalayas andLivelihood development including vocational training for underprivileged as some of thekey areas. The Company will continue to support social projects that are consistent withthe Policy.
Corporate Social Responsibility Committee of the Company is constituted as follows:
1. Mr. S Sandilya - Chairman
2. Mr. Siddhartha Lal
3. Mr. Inder Mohan Singh
Annual Report on CSR activities is annexed as Annexure-3.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by the Company in accordancewith the requirements of Indian Accounting Standard ("Ind AS")-110"Consolidated Financial Statements" and Ind AS 28 "Investment in Associatesand Joint ventures" prescribed under Section 133 of the Companies Act 2013 readwith the rules issued thereunder. The Company its subsidiaries and jointly controlledentities adopted Ind AS from April 1 2016. The consolidated financial statements areprovided in the Annual Report. A statement containing the salient features of thefinancial statements of each of the subsidiary and joint venture company in the prescribedForm AOC-1 is attached.
Pursuant to Section 136 of the Act the financial statements consolidated financialstatements and separate accounts of the subsidiaries are available on the website of theCompany at www.eichermotors.com. The Company shall provide the copies of the financialstatements of the Company and its subsidiary companies to the shareholders upon theirrequest received on email@example.com. The consolidated total comprehensiveincome of the Company and its subsidiaries amounted to Rs. 1838.62 crores for thefinancial year 2019-20 as compared to Rs. 2196.53 crores for the previous financial year2018-19.
(a) Statutory Auditors and Their Report
M/s S.R. Batliboi & Co. LLP Chartered Accountants (Firm Registration Number: FRN301003E/E300005) were appointed as Statutory Auditors in the 35th (Thirty Fifth)
Annual General Meeting (AGM) of the Company for a period of five years from theconclusion of 35th AGM till the conclusion of the 40th AGM of the Company subject toratification of their appointment at every AGM by the shareholders if required pursuantto the provisions of the Companies Act 2013 ("Act"). Central Government videthe Companies (Amendment) Act 2017 has amended the provisions of Section 139 of the Actand ratification of appointment of Statutory Auditors in every AGM is no longer required.The Statutory Auditors have confirmed their eligibility under Section 141 of the CompaniesAct 2013 and the Rules made thereunder to continue to act as Statutory Auditors of theCompany.
The Statutory Auditors had carried out audit of financial statements of the Company forthe financial year ended March 31 2020 pursuant to the provisions of the Act. The reportsof Statutory Auditors form part of the Annual Report. The reports are self-explanatory anddo not contain any qualifications reservations or adverse remarks.
(b) Secretarial Auditors and Their Report
The Board of Directors has appointed M/s. Shweta Banerjee & Associates CompanySecretaries to conduct Secretarial Audit for the financial year ended March 31 2020. Asrequired under Section 204 of the Companies Act 2013 the Secretarial Audit Report isannexed as Annexure-4 to this Report. The Secretarial Auditors' Report isself-explanatory and does not contain any qualifications or adverse remarks which requireany clarification or explanation.
(c) Cost Auditor
In terms of Section 148 of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 it is hereby confirmed that the cost accounts and records are madeand maintained by the Company as specified by the Central Government under sub-section (1)of Section 148 of the Companies Act 2013.
Ms. Jyothi Satish a qualified Cost Accountant has been appointed as the cost auditorto carry out audit of the cost records of the Company for the financial year 2019-20pursuant to the provisions of the Companies Act 2013. The Cost Auditor shall submit itsreport to the Board of Directors within the time prescribed under the Companies Act 2013and the rules made thereunder.
CORPORATE GOVERNANCE MANAGEMENT DISCUSSION & ANALYSIS AND BUSINESS RESPONSIBILITYREPORTS
As per SEBI (LODR) Regulations 2015 Corporate Governance Report together with theAuditors' certificate regarding compliance of conditions of Corporate GovernanceManagement Discussion & Analysis Report and Business Responsibility Report form partof the Annual Report.
The Company in its commitment to a sustainable global economy has voluntarily prepareda Sustainability Report based on GRI Sustainability Reporting Standards which will helpstakeholders to understand the Company's economic environmental social and governanceperformance more effectively and analyzing the financial and non-financial performance ofthe Company. With this stakeholders shall also have a better understanding of theCompany's long term perspective.
The Sustainability Report captures our passion along with the responsibilities forcommunicating sustainability performance and its impact on our stakeholders throughvarious aspects such as responsible consumption clean water and sanitation genderequality innovation infrastructure etc. The Sustainability Report for the financial year2019-20 is available on the Company's website at https://www.eicher.in/sustainability-report
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Sections 134 & 92(3) of the Companies Act 2013 thedetails forming part of the extract of the Annual Return in Form MGT-9 is annexed as Annexure-5to this Report and which is also available on the website of the Companywww.eichermotors.com.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
a) that in the preparation of the Annual Financial Statements for the year ended March31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Note no.
3 of the Notes to the Financial Statements have been selected and applied consistentlyand judgement and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 31 2020 and of theprofits of the Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual Financial Statements have been prepared on a going concern basis;
e) that proper internal financial controls to be followed by the Company have been laiddown and that the financial controls are adequate and were operating effectively; and
f) that proper systems have been devised to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES
Disclosures as required under Section 197(12) of the
Companies Act 2013 read with Rule 5(1) of the Companies
(Appointment and Remuneration of Managerial Personnel)
1) Ratio of the remuneration of each director to the median remuneration of theemployees of the Company and the percentage increase in remuneration of Directors &KMPs in the Financial Year:
|Sl. No. Name of the Director/KMP ||Designation ||Ratio of Remuneration of each Director to median remuneration of employees ||Percentage Increase in Remuneration for FY 2019-20 over FY 2018-19 |
|1 Mr. S Sandilya ||Chairman & Non-Executive Independent Director ||10.1 ||0.97 |
|2 Mr. Siddhartha Lal ||Managing Director ||311.1 ||51.29 |
|3 Mr. Vinod K. Dasari ||Whole-time Director and CEO-Royal Enfield ||398.8 ||NA* |
|4 Mr. Inder Mohan Singh ||Non-Executive Independent Director ||2.6 ||9.35 |
|5 Ms. Manvi Sinha ||Non-Executive Independent Director ||2.6 ||14.01 |
|6 Mr. Lalit Malik ||Chief Financial Officer" ||- ||(21.08)' |
|7 Mr. Manhar Kapoor ||General Counsel and Company Secretary ||- ||(35.31)' |
*Percentage increase in remuneration for FY 2019-20 over FY 2018-19 is not applicablesince Mr. Vinod K Dasari was appointed by the Board as Whole-time Director and CEO- RoyalEnfield w.e.f April 1 2019.
Mr. Inder Mohan Singh Non-Executive Independent Director joined the Board w.e.fNovember 12 2018 hence to compute percentage increase in his remuneration for FY2019-20 over FY 2018-19 remuneration for FY 2018-19 has been annualized.
'Percentage decrease in remuneration for FY 2019-20 over FY 2018-19 is mainly due toperquisite on exercising shares under the Company's Employee Stock Options Plan 2006(ESOP 2006) during the financial year 2018-19. It shall be 12.37% and 15.17% for Mr.Lalit Malik and Mr. Manhar Kapoor respectively without considering perquisite onexercising shares under ESOP 2006 for both the financial years.
Mr. Lalit Malik Chief Commercial Officer had also been the Chief FinancialOfficer of the Company till May 6 2020.
Note: Mr. Vinod K. Aggarwal Non-Executive Director is not entitled for anyremuneration by way of sitting fees or commission or otherwise in the Company.
2) Percentage decrease in the median remuneration of the employees in the financialyear: 5%@
@decrease of median remuneration by 5% is due to employee additions who are below themedian remuneration
3) Number of permanent employees on the rolls of the Company as at March 31 2020:4899 employees.
4) The average decrease in median remuneration of the employees other than managerialpersonnel was 5% as compared to the increase in the managerial remuneration by 25%.
5) It is hereby affirmed that the remuneration is paid as per the Remuneration Policyof the Company.
Further a statement containing particulars of top ten employees in terms of theremuneration drawn and employees drawing remuneration in excess of the limits set out inRule 5(2) & (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended are provided as part of the Directors' Report.However in terms of provisions of Section 136 of the said Act the Annual Report is beingsent to all the members of the Company and others entitled thereto excluding the saidstatement. Any member interested in obtaining such particulars may write to the CompanySecretary at firstname.lastname@example.org
Requisite information is provided under Management Discussion and Analysis Report whichforms part of the Annual Report.
COMPLIANCE OF SECRETARIAL STANDARDS
During the financial year under review the Company has complied with applicableSecretarial Standards specified by the Institute of Company Secretaries of India pursuantto Section 118 of the Companies Act 2013.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013
Requisite information is provided under Corporate Governance Report which forms part ofthe Annual Report.
We thank our customers business associates and bankers for their continued supportduring the financial year.
We wish to convey our deep appreciation to the dealers of the Company for theirachievements in the area of sales and service and to suppliers/ vendors for theirvaluable support.
We also place on record our sincere appreciation for the enthusiasm and commitment ofthe Company's employees for the growth of the Company and look forward to their continuedinvolvement and support.
| ||For Eicher Motors Limited |
|Siddhartha Lal ||S. Sandilya |
|Managing Director ||Chairman |
|DIN: 00037645 ||DIN:00037542 |
|Place: London UK ||Place: Chennai Tamil Nadu |
|Date: June 12 2020 || |