Endurance Technologies Ltd.
|BSE: 540153||Sector: Auto|
|NSE: ENDURANCE||ISIN Code: INE913H01037|
|BSE 00:00 | 12 Aug||1432.55||
|NSE 00:00 | 12 Aug||1428.75||
|Mkt Cap.(Rs cr)||20,150|
|Mkt Cap.(Rs cr)||20150.25|
Endurance Technologies Ltd. (ENDURANCE) - Director Report
Company director report
Your Directors present herewith the Twenty Third Annual Report on thebusiness and operations of the Company together with financial statements for thefinancial year ended 31st March 2022.
SUMMARISED STATEMENT OF PROFIT AND LOSS:
Rs in million
The Board of Directors at its meeting held on 19th May 2022 hasrecommended dividend of Rs 6.25 per equity share of Rs 10 each (@ 62.5%)(previous year Rs 6.00 per equity share) for the financial year 2021-22 forconsideration of the Members at the ensuing Twenty Third Annual General Meeting("AGM").
The dividend if approved by the Members will result in an outgo of Rs879.14 million.
The dividend pay-out is in accordance with the Company's DividendDistribution Policy.
Dividend Distribution Policy
This policy has been framed and adopted in terms of Regulation 43A ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations"). The policy inter alia lays down variousparameters relating to declaration/ recommendation of dividend. There has been no changeto the policy during the financial year 2021-22.
The policy is placed on the Company's websitewww.endurancegroup.com/investor-relations.
Amount proposed to be transferred to reserves
The Company has not transferred any amount of profits to reserves.
During the year under review the Company posted a total income of Rs57214.81 million on a standalone basis as against Rs 47865.83 million in theprevious year. The total income on a consolidated basis was Rs 75901.78 millioncompared to Rs 65777.31 million in the previous year. The Company's total incomeon standalone and consolidated basis grew by 19.5% and 15.4% respectively.
The performance of the auto industry reflected a negative sentimentreporting a de-growth of 2.7% in the sales of two wheelers while three-wheeler salesincreased significantly by 24.2%. First quarter of the financial year 2021-22 witnessedprolonged suspension of operations due to the COVID-19 pandemic and low offtake byOriginal Equipment Manufacturers ("OEMs") as distribution networks were impacteddue to second and third waves of the pandemic. Further shortage of semiconductor chipsalso significantly impacted production of vehicles.
The profit after tax reduced by 2.7% in the financial year 2021-22 at Rs3817.43 million as against Rs 3921.99 million in the previous year onstandalone basis; while consolidated profit after tax de-grew by 11.33% at Rs 4607.09million as against Rs 5195.69 million in the previous year.
CONSOLIDATED FINANCIAL STATEMENTS:
As per Regulation 33 of the Listing Regulations and Section 129 of theCompanies Act 2013 ("Act") read with the rules issued thereunder consolidatedfinancial statements of the Company for the financial year 2021-22 have been prepared incompliance with applicable accounting standards. The audited financial statements of theCompany and its subsidiaries (including step-down subsidiaries) have been approved by theboard of directors of respective entities.
During the year under review the Board of Directors reviewed theaffairs of the subsidiary companies in accordance with Section 129(3) of the Act.Consolidated financial statements together with the statutory auditor's report thereonform part of this Annual Report.
The Company has seven subsidiaries as on 31st March 2022 and as on thedate of this Report as tabulated below. There are no associates or joint venturecompanies within the meaning of Section 2(6) of the Companies Act 2013 ("Act").Details of the subsidiary companies and their performance are covered in the ManagementDiscussion and Analysis Report forming part of this Annual Report.
There has been no material change in the nature of the business of thesubsidiaries. During the year under review:
1. The shareholding pattern of Endurance Adler SpA
("EASpA") underwent change as follows:
i. EASpA increased its paid-up share capital to Euro 840000 from Euro120000. The increase was effective 26th May 2021 and the entire increase in sharecapital was subscribed by EOSrl. Consequent thereto EOSrl held 99.86% (838800 shares ofEuro 1 each) of the share capital of EASpA and the balance 0.14% (1200 shares of Euro 1each) was held by Amfin Holding SpA ("Amfin")
ii. On 28th March 2022 Amfin transferred its holding of 1200 sharesto EOSrl. Pursuant thereto EOSrl holds 100% share capital of EASpA.
2. EOSrl acquired 100% stake in Veicoli Srl Italy("Veicoli") for Euro 700000 on 12th November 2021. Subsequently on 14thDecember 2021 share capital of Veicoli was increased to Euro 500000 from Euro 470.59.The increase in share capital of Euro 499529.41 was subscribed by EOSrl.
Veicoli provides a software platform to companies that operate fleetsof commercial and passenger vehicles. Veicoli as a fleet management service provider andthrough its software platform enables fleet operators increase efficiency of routes andmovement of vehicles thereby improving cost of fuel consumption maintenance and use ofvehicles through screening engine parameters and driving style from a safety perspective.
In terms of Section 129(3) of the Act a statement in Form AOC-1containing salient features of the financial statements of the Company's subsidiariesforms part of the Annual Report. A copy of the audited financial statements of each of thesubsidiary companies and English translation thereof will be available for inspection byany shareholder of the Company at its registered office during business hours. Thesefinancial statements are also placed on the Company's website atwww.endurancegroup.com/investor-relations.
The paid-up equity share capital as on 31st March 2022 was Rs 1406628480.There was no public issue rights issue bonus issue or preferential issue during thefinancial year under review. The Company has not issued shares with differential votingrights sweat equity shares neither has it granted any employee stock options nor issuedany convertible securities.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Changes in Directorate
Following were the changes in the Board of Directors during the yearunder review and till the date of this Report:
(i) Mr. Anurang Jain was re-appointed as Managing Director of theCompany for a period of five years with effect from 1st April 2021; and
(ii) Mr. Anant Talaulicar was appointed as an Additional Director (inthe capacity as an Independent Director) of the Company for a term of five consecutiveyears with effect from 12th July 2021. His appointment as an Independent Director hasbeen approved by the Members in the Twenty Second AGM of the Company held on 25th August2021.
Brief profile of the directors appointed/ re-appointed during the yearunder review and till the date of this Report is given below.
Mr. Anurang Jain
Mr. Anurang Jain (DIN 00291662) promoter director has been theManaging Director of the Company since its incorporation in December 1999. He has overthree decades of experience in the automobile components industry.
He is a first generation entrepreneur with sharp business acumenin-depth knowledge of auto industry and strong focus on profitable growth. He has beeninstrumental in driving the Company towards exponential growth in becoming one of theleading Tier-1 auto component manufacturing companies of India.
He effectively manages the multi-product portfolio of the Companycomprising aluminium die-castings suspension braking systems and transmissioncomponents with operations spread across nineteen plants pan India. He also oversees theoperations of seven subsidiaries in Europe operating through nine manufacturing facilitiesin Italy and Germany. The Group caters to all marquee OEM customers in the auto industryhaving base in India and Europe. The Company has strong aftermarket sales services in bothdomestic and overseas markets.
Mr. Jain drives technological upgradation to maintain competitive edgeand sustainable growth. He has been instrumental in setting up in-house Research &Development centres for all its product segments which are also strongly supported byinputs from global leaders through technology and know-how transfers and collaborationfor joint-development. These R&D centres are approved by Department of Scientific andIndustrial Research (DSIR).
Appointment of Mr. Anurang Jain as Managing Director for a period offive years with effect from 1st April 2021 has been approved by the Members throughpostal ballot conducted via remote e-voting which concluded on 4th June 2021.
Mr. Anant Talaulicar
Mr. Anant Talaulicar (DIN 00031051) has a Master's degree in MechanicalEngineering from the University of Michigan USA and a Master's degree in BusinessAdministration from Tulane University Louisiana USA. He has graduated in MechanicalEngineering from Mysore University India.
He has more than three decades of experience serving in multifacetedleadership roles in Cummins group both in the United States of America (USA) and inIndia. Having worked in the USA for sixteen years as a financial analyst manufacturingengineer project manager product manager strategy manager he took on various generalmanagement positions. Thereafter he returned to India in March 2003 as Joint ManagingDirector of Cummins India Limited. During his tenure with Cummins group he has served asmember of the Cummins Inc. global leadership team Chairman & Managing Director of theCummins Group in India and the President of the Cummins Inc. Components Group. He hasalso served as the Managing Director of Tata Cummins Private Limited a 50:50 jointventure between Cummins Inc. and Tata Motors Limited. He has chaired the boards of fourother Cummins legal entities in India as well.
He has served as a member in committees of the Confederation of IndianIndustry (CII) Society of Indian Automobile Manufacturers (SIAM) and AutomobileComponents Manufacturers Association (ACMA) in the past.
At present Mr. Talaulicar is a Director on the board of various publiclimited and public listed companies including as an Independent director in KPITTechnologies Limited Everest Industries Limited Birlasoft Limited India NipponElectricals Limited and The Hi-Tech Gears Limited. Aside from his board and various trustmemberships he is a part time advisor and lecturer at the S. P. Jain Institute ofManagement and Research Mumbai.
Re-appointment of Independent Director(s) for a second term
Pursuant to Section 149 of the Act read with Companies (Appointment andQualification of Directors) Rules 2014 ("Rules") Mr. Soumendra Basu Mr.Roberto Testore and Ms. Anjali Seth were appointed as Independent Directors on the Boardby the Members at the Seventeenth Annual General Meeting of the Company held on 3rdAugust 2016 for a term of five consecutive years with effect from 10th June 2016.
Based on the recommendation of the Nomination and RemunerationCommittee and after taking into account the performance evaluation of these IndependentDirectors the Board recommended that their continued association as Independent Directorswould be in the interest of the Company. Considering the knowledge acumen expertise andexperience of these directors in their respective fields and the contributions made bythem during their tenure as an Independent Director the Board of Directors has appointedthem for a second term of five consecutive years commencing from 10th June 2021 up toand including 9th June 2026.
Pursuant to Regulation 17(1A) of the Listing Regulations the Membershave also accorded consent by way of a special resolution for Mr. Soumendra Basu tocontinue as Director and Chairman on the Board of the Company after he has attained theage of seventy five years on 19th November 2024 during his second term of appointment.The Board recommended his continuation beyond the above-mentioned period as the Companybelieves that it shall immensely benefit with his continued association on account of hisrich experience multifaceted role as member of various committees of the Board andespecially his guidance and support as Chairman of the Board.
Appointment of the Independent Directors has been approved by theMembers through portal ballot conducted via remote e-voting which concluded on 4th June2021.
The composition of the Board of the Company as on the date of thisReport is as follows:
Retirement of directors by rotation
In terms of Section 152(6) of the Act Mr. Satrajit Ray Director andChief Financial Officer (DIN 00191467) retires by rotation at the ensuing AGM and beingeligible has offered himself for re-appointment. Information as required under Regulation36(3) of the Listing Regulations is provided in the Notice convening the AGM.
KEY MANAGERIAL PERSONNEL:
The following officials are 'Key Managerial Personnel' of the Companyin terms of the provisions of Sections 2(51) and 203 of the Act:
i. Mr. Anurang Jain Managing Director;
ii. Mr. Ramesh Gehaney Director and Chief Operating Officer (WholeTime Director);
iii. Mr. Satrajit Ray Director and Group Chief Financial Officer(Chief Financial Officer);
iv. Mrs. Varsha Jain Director and Head - CSR and Facility Management(Whole Time Director); and
v. Mr. Sunil Lalai Company Secretary and Executive Vice President -Legal (Company Secretary).
There has been no change in the Key Managerial Personnel during theyear under review.
Board of Directors and its Committees
During the financial year under review the Board met seven times. Adetailed update on the Board its composition and attendance of the Directors at eachmeeting is provided in the Corporate Governance report.
The Board has constituted six Committees namely Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility CommitteeStakeholders' Relationship Committee Risk Management Committee and Finance Committee (anon-statutory committee). All recommendations made during the year by the Committeesincluding the Audit Committee were accepted by the Board.
A detailed charter including terms of reference of various Boardconstituted committees number of committee meetings held during the financial year2021-22 and attendance of members at each meeting also forms part of the CorporateGovernance report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Act the Directors based on therepresentation received from the management confirm that:
i. in the preparation of the annual accounts for the year ended 31stMarch 2022 the applicable accounting standards have been followed;
ii. the directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give 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. the directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv. the directors have prepared the annual accounts on a going concernbasis;
v. the directors have laid down internal financial controls to befollowed by the Company and such internal financial controls are adequate and areoperating effectively; and
vi. the directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and are operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS:
In terms of Section 149(7) of the Act and Regulation 16(1) (b) of theListing Regulations the Independent Directors of the Company have submitted theirdeclarations confirming compliance with the criteria of independence as stipulatedthereunder.
All Independent Directors of the Company have affirmed compliance withthe Company's Code of Conduct for Directors and Senior Management Personnel for thefinancial year 2021-22.
The Board took on record declaration and confirmation submitted by theIndependent Directors regarding their fulfilment of the prescribed criteria ofindependence after assessing veracity of the same as required under Regulation 25 of theListing Regulations.
In terms of the amended the Rules an independent director is requiredto apply online to the Indian Institute of Corporate Affairs ("IICA") forinclusion of his/her name in the data bank for such period till he/she continues to holdoffice of an independent director in any company.
In terms of Section 150 of the Act read with Rule 6 of the RulesIndependent Directors of the Company have confirmed that they have registered themselveswith the databank maintained by IICA. The Independent Directors are also required toundertake online proficiency self-assessment test conducted by the IICA within a period of2 (two) years from the date of inclusion of their names in the data bank unless they meetthe criteria specified for exemption. The Independent Directors of the Company are exemptfrom the requirement to undertake online proficiency self-assessment test.
Opinion of the Board with regard to integrity expertise and experience(including proficiency) of the Independent Directors:
The Board is of the opinion that the Independent Directors of theCompany are professionally qualified and well experienced in their respective domains andmeet the criteria regarding integrity expertise experience and proficiency. Theirqualification and vast experience in varied fields helps in strengthening the Company'ssystems and processes to align the same with good industry practices andinstitutionalising tenets of corporate governance.
DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION178 OF THE ACT:
In terms of Section 178 of the Act the Nomination and RemunerationPolicy covers Directors Key Managerial Personnel and Senior Management Personnel of theCompany. The policy inter alia lays down the principles relating to appointmentcessation remuneration and evaluation of Directors Key Managerial Personnel and SeniorManagement Personnel of the Company.
Details of the Company's policy on directors' appointment andremuneration including criteria for determining qualifications positive attributesindependence of a director and other matters as stipulated under sub-section (3) ofSection 178 of the Act adopted by the Board forms part of the Corporate Governancereport.
The policy was last revised by the Board at its meeting held on 19thMay 2022 and pursuant to the Listing Regulations is also placed on the Company's websiteat www.endurancegroup.com/investor-relations.
In compliance with the provisions of Section 178 of the Act theNomination and Remuneration Policy ("NR Policy") of the Company inter aliaspecifies that the Board will conduct annual evaluation of its own performance itsCommittees and the directors individually. Performance evaluation of Directors shall bedone by the entire Board (excluding the director being evaluated). The Nomination andRemuneration Committee is responsible for implementation of the methodology followed bythe Company in this regard. The NR Policy of the Company is placed on the Company'swebsite at www.endurancegroup.com/investor-relations.
Performance of the Board is evaluated based on inputs from all thedirectors on a structured questionnaire covering various aspects such as criteria of boardcomposition and structure effectiveness of board processes information and functioningorientation towards corporate governance and its contribution in effective management ofthe Company.
Assessment and observations on the performance of Board are discussedand key action areas for the Board Committees and Directors are noted for implementation.
Information and other details on annual performance assessment aregiven in the Corporate Governance report.
The Company is in compliance with the Secretarial Standards on Meetingsof Board of Directors (SS-1) and General Meetings (SS-2).
INFORMATION ON BOARD MEETING PROCEDURE AND ATTENDANCE DURING THEFINANCIAL YEAR 2021-22:
Board meetings of the Company are conducted as per the provisions ofthe Act the Listing Regulations and applicable Secretarial Standards. In the last meetingof each calendar year the Board decides the schedule of meetings to be held in thesucceeding year.
Based on the dates of meetings decided by the Board adequate notice isgiven to all directors and Committee members; an agenda with detailed notes thereon issent at least seven days before the respective meeting. If any board meeting is held at ashorter notice it is conducted with the permission of at least one independent director.The notes to agenda contain relevant information and supporting documents along withrecommendation from the management for meaningful deliberation and / or decision on theagenda items.
A gist of Board and Committee meetings held during the year along withattendance record of each Director forms part of the Corporate Governance report.
Audit Committee of the Company is constituted in terms of Section 1 77of the Act and Regulation 18 of the Listing Regulations.
As on 31st March 2022 the Committee comprised the following directorsas its members:
i. Mr. Indrajit Banerjee Chairman;
ii. Mr. Soumendra Basu; and
iii. Ms. Anjali Seth.
All of the Committee members are non-executive independent directorsand are financially literate as required under Regulation 18(1)(c) of the ListingRegulations.
The Committee invites the Managing Director the Director and GroupChief Financial Officer the Director and Chief Operating Officer the Statutory Auditorsand the Chief Internal Auditor to attend meetings of the Committee.
Mr. Sunil Lalai Company Secretary and Executive vice President - Legalacts as Secretary to the Committee.
Information relating to changes in the composition of the Committeeduring the year under review form part of the Corporate Governance report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
As on 31st March 2022 the CSR Committee comprised the followingdirectors as its members:
i. Mr. Anurang Jain Chairman;
ii. Mr. Soumendra Basu;
iii. Mr. Ramesh Gehaney; and
iv. Mrs. Varsha Jain.
RISK MANAGEMENT COMMITTEE:
The Risk Management Committee ("RMC") is constituted incompliance with Regulation 21 of the Listing Regulations.
As on 31st March 2022 the RMC comprised the following directors asits members:
i. Mr. Anurang Jain Chairman;
ii. Mr. Indrajit Banerjee;
iii. Mr. Ramesh Gehaney; and
iv. Mr. Satrajit Ray.
The Risk Management Policy of the Company was last reviewed and revisedin August
2021 and is placed on the Company's websitewww.endurancegroup.com/investor-relations.
The policy lays down a framework for risk management and mitigationprocess commensurate with the scale and nature of the Company's business. The policy alsoidentifies the risk categories in line with the Company's growth strategy continuallychanging business environment and legislative requirements. As per the terms of referenceof RMC it is entrusted with the responsibility to periodically review the risk managementframework.
The risk management framework defines thresholds against each of theidentified risk events and mitigation measures to be adopted. The framework is dynamic innature and is reviewed periodically by the respective functions. The senior managementteam reviews the critical risk events and implements action plans to avoid recurrence ofsuch events. A risk report is submitted bi-annually for review by the RMC and the same isalso placed before the Board for advice on matters of significance.
Information relating to changes in the composition of the Committeeduring the year under review form part of the Corporate Governance report.
During the year under review CRISIL Ratings Limited (a subsidiary ofCRISIL Limited) a credit rating agency registered with the SEBI has upgraded the ratingfor long-term bank credit facilities and reaffirmed the rating for short-term bank creditfacilities / Commercial Papers as CRISIL AA+/Stable and CRISIL A1+ respectively. ICRALimited a credit rating agency registered with SEBI had reaffirmed the ICRA AA+ (Stable)rating for long term borrowing and ICRA A1+ rating for short term borrowing.
INTERNAL FINANCIAL CONTROLS:
In terms of Section 134(5)(e) of the Act the term Internal FinancialControl means the policies and procedures adopted by a company for ensuring orderly andefficient conduct of its business including adherence to its policies safeguarding ofits assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial information.
The Company has adequate Internal Financial Control systems in the formof policies and procedures. It follows a structured mechanism of function-specific reviewsand risk reporting by senior management of the Company and critical matters are brought tothe attention of the Audit Committee and the Board. Further internal Standard OperatingProcedures (SOPs) and Schedule of Authority (SOA) are well defined and documented toprovide clear guidance to ensure that all financial transactions are authorised recordedand reported correctly.
In order to record day-to-day financial transactions and ensureaccuracy in reporting thereof the Company uses an established Enterprise ResourcePlanning (ERP) system which is equipped with 'maker and checker' mechanism and has anaudit trail of all transactions. Adequate controls and checks are built in the ERP systemto integrate the underlying books of account and prevent any kind of control failure.Mapping of policies and procedures including SOPs and SOA is done through ERP and audit ofthese processes forms part of the work scope of both internal and statutory auditors ofthe Company.
The Company has an in-house Internal Audit (IA) team lead by a ChiefInternal Auditor. The Chief Internal Auditor who functionally reports to the AuditCommittee and administratively reports to the Managing Director is responsible for leadingthe IA department. The scope of work accountability responsibility reporting andauthority of the IA department is defined in the Internal Audit Charter which is reviewedby the Audit Committee annually.
The IA team draws up an internal audit plan before the start of afinancial year which is approved by the Audit Committee and progress thereof is reviewedby the Committee at its quarterly meetings. In order to ensure objectivity andindependence of the audit mechanism internal audit activities for certain plants areoutsourced. The IA team conducts audits of plants and corporate functions specificallyemphasising on systems processes procedures guidelines and controls as also statutorycompliances adherence to policies / SOPs and internal guidelines issued by themanagement. Implementation of the audit recommendations are monitored by the IA team.
Report on audit findings and corrective measures taken by therespective process owners is reviewed periodically by the senior management team of theCompany comprising the Managing Director the Director and Group Chief Financial Officerand the Director and Chief Operating Officer. Significant observations and status ofimplementation of recommendations of the IA team are presented to the Audit Committee. TheCommittee reviews the report and advises on improving the systems and processes wherenecessary.
The Company's internal control mechanism is commensurate with the scaleof its operations thereby ensuring compliance with the Act and the Listing Regulations.
In compliance with Regulation 34 of the Listing Regulations a separatereport on Corporate Governance along with a certificate from the statutory auditorstowards compliance to the provisions of Corporate Governance forms an integral part ofthis Annual Report.
The Managing Director and the Director and Group Chief FinancialOfficer have certified to the Board with regard to financial statements and other mattersas required under Regulation 17(8) read with Schedule II to the Listing Regulations.
BUSINESS RESPONSIBILITY REPORT:
In terms of Regulation 34(2) of the Listing Regulations a BusinessResponsibility Report for the financial year 2021-22 forms part of this Annual Report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING AND FAIR DISCLOSUREOF UNPUBLISHED PRICE SENSITIVE INFORMATION:
The Company has adopted a 'Code of Conduct for Prevention of InsiderTrading' ("PIT Code") in terms of the SEBI (Prohibition of Insider Trading)Regulations 2015 ("PIT Regulations"). Further the Company has also adopted a'Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation' ("UPSI Code").
The PIT Code and the UPSI Code are drawn up on the principle that theCompany's directors and employees owe a fiduciary duty inter alia to theshareholders of the Company to place the interest of shareholders above their own andconduct their personal securities transactions in a manner that does not give rise to anyconflict of interest.
The PIT Code lays down guidelines for 'designated persons' on theprocedures to be followed and disclosures to be made while dealing in securities of theCompany and also stipulates the consequences of non-compliances or leak of confidentialprice sensitive information. The PIT Code was last revised by the Board of Directors atits meeting held on 23rd April 2021 to align the disclosure formats with those notifiedthe SEBI circular bearing reference no. SEBI/ HO/ ISD/ ISD/ CIR/ P/2021/19 dated 9thFebruary 2021.
The UPSI Code documents the manner of disseminating Unpublished PriceSensitive Information (UPSI) for making it accessible to the public on non-discriminatorybasis.
Any information is determined to be UPSI based on the principlesenumerated in the Company's Policy on Determination of Materiality of Event / Information.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 1 34(3)(m) of the Act readwith Rule 8 of the Companies (Accounts) Rules 2014 is attached as Annexure I.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
In terms of Section 135 of the Act read with Schedule VII to the Actand Company's Corporate Social Responsibility ("CSR") Policy the Company hasundertaken CSR projects under the aegis of Sevak Trust with whom it has been associatedfor more than a decade. The CSR projects and programmes recommended by the CSR Committeeand approved by the Board are aimed towards enhancing employability by impartingskill-building vocational training to unemployed youth and undertake developmentalactivities in villages to improve living standards and welfare through educationpromoting health and hygiene water conservation and agriculture oriented initiativesproviding community facilities etc. As part of its CSR initiatives the Company has alsoundertaken the responsibility of upgrading the Sevak Trust Balwadi. During the yearunder review the relief measures continued to be undertaken to mitigate the impact ofCOvID-19. The COvID care centre was functioning intermittently during the year during theresurgence of Delta and Omicron variants of COvID-19. Apart from the above twoatmospheric water harvesting machines were installed in close proximity to the Company'splants in Waluj. These units could provide a solution to overcome the problem of waterscarcity especially for villages lacking natural water sources.
Salient features of the CSR Policy are available on the Company'swebsite at www.endurancegroup. com. The Annual Report on CSR activities is attached as AnnexureII to this Report.
In terms of Section 135 of the Act read with Rule 4(5) of the Companies(Corporate Social Responsibility Policy) Rules 2015 the Director and Group ChiefFinancial Officer of the Company has provided requisite certificate that the fundsdisbursed by the Company to Sevak Trust and for other CSR activities during the financialyear 2021-22 have been utilised for the respective purposes and in the manner as approvedby Board.
Expenditure towards CSR activities
As per the requirements under the Act the Company earmarked an amountof Rs 111.11 million for the financial year 2021-22 calculated based on theaverage net profit before tax of the immediate preceding three financial years. The Boardof Directors approved the following projects / programmes to be undertaken as CSRactivities during the financial year 2021-22 and all of these activities were as perSchedule vII to the Act and the CSR Policy of the Company:
1. village Development Project ("vDP");
2. Setting up and running of vocational Training Centre("vTC");
3. Running of Sevak Trust Balwadi ("Balwadi");
4. Relief measures relating to COvID -19 pandemic; and
5. Setting up of two atmospheric water harvesting machines.
The total amount spent by the Company during the financial year2021-22 towards approved CSR projects and programmes was Rs 112.68 million whichincluded administrative overheads as against the budget of Rs 111.10 milliontowards CSR expenses.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:
During the year under review no instances of fraud have been reportedunder Section 143(12) of the Act.
The Members of the Company at their Eighteenth Annual General Meeting("AGM") had approved appointment of M/s. S R B C & CO. LLP (ICAIRegistration No. 324982E/ E300003) ("SRBC") as Statutory Auditors of the Companyfrom the conclusion of Eighteenth AGM till the conclusion of Twenty Third AGM of theCompany.
The Board has recommended re-appointment of SRBC as the StatutoryAuditors of the Company based on the recommendation of the Audit Committee for a secondterm of five consecutive years from the conclusion of the Twenty Third AGM to be held inthe year 2022 till the conclusion of the Twenty Eighth AGM to be held in the year 2027covering financial years from 2022-23 to 2026-27 for approval of Members of the Company.
The Statutory Auditors of the Company have issued an unmodified opinionon the financial statements both standalone and consolidated for the financial year ended31st March 2022. The Auditors Reports for the financial year ended 31st March 2022 onthe financial statements of the Company forms part of this Annual Report.
As per the provisions of Section 148 of the Act and Rule 3 of theCompanies (Cost Records and Audit) Rules 2014 the Company is required to maintain costrecords with respect to the manufacturing activities viz. manufacturing of enginecomponents manufacturing of dies and moulds and generation of electricity throughwindmills and get the same audited.
Based on the recommendation of the Audit Committee the Board hasappointed Mr. Jayant B. Galande Cost Accountant (Membership No. M-5255) as Cost Auditorof the Company for the financial year 2022-23. The remuneration proposed is Rs 450000and is subject to ratification by the shareholders at the ensuing AGM. The saidremuneration is excluding applicable taxes and out-of-pocket expenses if any payable atactuals.
In terms of the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshad appointed Mr. Sachin Bhagwat (Membership No. A10189 CP No.
6029) Practicing Company Secretary to conduct an audit of thesecretarial records for the financial year 2021-22.
The Secretarial Audit report for the financial year 2021-22 is set outas Annexure III to this Report. The said report does not contain any qualificationreservation or adverse remark.
Policies of the Company
The Listing Regulations mandate formulation of certain policies forlisted companies. Accordingly the Board of Directors has from time to time framed andapproved policies as required under the Listing Regulations as well as under the Act.
Certain key policies that have been framed by the Company include:
The above-mentioned policies are available on the Company's website atthe link www.endurancegroup.com/ investor-relations.
These policies are periodically reviewed by the Committees responsibletherefor and changes if any are recommended to the Board for approval. Changes to thepolicies also factor amendments in statutes or governing regulations. During the periodfrom 1st April 2021 till the date of this Report the following policies were revised:
The Board of Directors at its meeting held on 23rd April 2021 hasapproved the revised CSR Policy of the Company pursuant to the amendments notified videthe Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 dated 22ndJanuary 2021 ("CSR Amendment Rules") and based on the recommendation made bythe Corporate Social Responsibility ("CSR") Committee at its meeting held on 8thMarch 2021. The revisions to the CSR Policy are made to align the same with theprovisions of CSR Amendment Rules. Kindly refer Annexure II for salient features ofthe CSR Policy enumerated in the Annual Report on Corporate Social Responsibilityactivities.
Further based on the recommendation of Nomination and RemunerationCommittee the NR Policy was revised by the Board at its meeting held on 19th May 2022.Certain sections of the NR Policy were redrafted to align with the practice being followedby the Company for appointment of directors and their evaluation.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Disclosure of remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are annexed herewith as Annexure IV.
A statement containing particulars of employees as required underSection 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as a separate annexureforming part of this Report. In terms of Section 136 of the Act the Annual Report andfinancial statements are being sent to the shareholders excluding the aforesaid annexure.The said annexure is available for inspection at the registered office of the Companyduring business hours and will be made available to any shareholder on request.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not advanced any loans or given guarantees coveredunder the provisions of Section 186 of the Act. Particulars of investments form part ofthe notes to financial statements. Kindly refer notes no. 4 4A and 4B of the standalonefinancial statements for the details of investments made by the Company as on 31st March2022.
During the year under review the Company has not accepted any depositsfrom the public.
VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:
In terms of the provisions of Section 177(9) of the Act read with Rule7 of the Companies (Meetings of Board and its Powers) Rules 2014 the Company hasestablished a vigil mechanism which forms part of the policy in terms of Regulation 22 ofthe Listing Regulations for directors and employees. During the year under review thenomenclature of the said policy was revised to vigil Mechanism-cum-Whistle Blower Policy.The objective of this policy is to create a window for any person who observes anyunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct for Directors and Senior Management Personnel and the Endurance Code of Conduct("Codes of Conduct") and to report the same to the Ombudsman appointed under thesame policy. The said policy also encompasses reporting of instances of leak ofUnpublished Price Sensitive Information (UPSI).
Protected disclosures can be made by a whistle blower to a dedicatede-mail ID and/ or postal address of Ombudsman appointed under the policy. The policy hasbeen hosted on the Company's website at www.endurancegroup.com/investor-relations.
An Ombudsman has been appointed in terms of the provisions of the Actto independently investigate protected disclosures communicated under the policy andmatters of violation to the Codes of Conduct.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THECOMPANY BETWEEN 31st MARCH 2022 AND DATE OF BOARD'S REPORT:
There have been no material changes and commitments affecting thefinancial position of the Company which have occurred between the end of the financialyear and the date of this Report.
RELATED PARTY TRANSACTIONS:
As per the Listing Regulations all Related Party Transactions("RPT") and any modifications thereto are placed before the Audit Committee forapproval. Further the Audit Committee accords specific / omnibus approval for RPTs whichare in ordinary course of business and satisfy the principles / conditions of being atarm's length basis. The Audit Committee reviews on a quarterly basis the details of theRPTs entered pursuant to the aforementioned omnibus approval.
Particulars of RPTs entered during the year 2021-22
During the financial year the Company did not enter into any contract/arrangement/ transaction with related parties which could be considered material for whichshareholders' approval is required in accordance with Section 188 of the Act and thePolicy on Determining Materiality of and Dealing with Related Party Transaction ("RPTPolicy").
Accordingly there is no information to be disclosed in Form AOC-2while the particulars of all RPTs in terms of Indian Accounting Standard (Ind AS) - 24 areforming part of the financial statements.
The RPT Policy of the Company as approved by the Board can beaccessed on the Company's website at www.endurancegroup.com/investor-relations.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS:
There were no significant material orders passed by Regulators /Courtswhich would impact the going concern status of the Company and its future operations.
In terms of Section 92(3) read with Section 134(3)(a) of the Act theannual return of the Company for the financial year ended 31st March 2022 shall beavailable on the Company's website: www.endurancegroup.com/investor-relations.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
The Company has adopted a "Policy on Safety & Security andPrevention of Sexual Harassment of Women Employees" ("POSH Policy") in linewith the requirements of The Sexual
Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The POSH Policy aims to provide a safe friendly positive andproductive working environment and promote an atmosphere in which employees can realisetheir maximum potential. The policy applies to all permanent and temporary employees andalso to workforce engaged by the Company through contractors.
The Company observes zero tolerance towards any kind of violation ofthe aforementioned POSH Policy. As per POSH Policy the Company has constituted InternalCommittees ("IC") for all its locations. Such committees are chaired by a femaleemployee and other senior management officials of the Company are its members along withan external member who has experience in dealing with cases relating to sexual harassment.The IC is responsible for redressal of complaints related to sexual harassment and followsthe guidelines provided in the POSH Policy.
During the year under review four complaints were received by the ICunder the POSH Policy and three of them were satisfactorily resolved. The inquiry andinvestigation of one complaint has been completed and the IC is in the process ofconcluding the same.
During the year under review the industrial relations remainedcordial.
The Company entered into following wage agreements during the financialyear 2021-22:
1. Agreement executed on 25th September 2021 with Maharashtra RajyaKamgar Sanghatna for the Company's plant located at B-1/3 Chakan Pune. The agreement iseffective from 1st August 2021 to 31st January 2025.
2. Agreement executed on 17th December 2021 with EnduranceTechnologies Workers Union for the Company's plant located at Pantnagar. The agreement iseffective from 1st October 2021 to 30th September 2025.
As on the date of this Report the Company has twelve agreementsentered into with labour unions for the Company's plants located at Waluj (AurangabadMaharashtra) Chakan (Dist. Pune Maharashtra) and Pantnagar (Uttarakhand).
INVESTOR EDUCATION AND PROTECTION FUND:
In accordance with the provisions of Sections 124 and 125 of the Actand Investor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules2016 ("IEPF Rules") dividends of a company that remain unpaid or unclaimed fora period of seven years from the date of transfer to the Unpaid Dividend Account shall betransferred by such company to the Investor Education and Protection Fund("IEPF").
In terms of the foregoing provisions of the Act no dividend amount orshares were required to be transferred to the IEPF by the Company during the year ended31st March 2022.
The Company has uploaded details of unpaid and unclaimed dividendamounts lying with the Company as on 15th December 2021 on the Company's websitewww.endurancegroup.com/investor-relations and on the website of the Ministry of CorporateAffairs at www.iepf.gov.in.
The following table provides dates on which unclaimed dividend wouldbecome due to be transferred to the IEPF:
Your Directors take this opportunity to express their sincereappreciation towards the commitment hard work and support of all its employees andworkmen during the year especially during the challenging and difficult times ofunprecedented pandemic.
The Directors also express their gratitude to the shareholders workmenunions customers vendors dealers bankers government authorities of India and othercountries where the Company operates and all other business associates for their continuedsupport extended to the Company and for reposing their confidence in the management. Themanagement looks forward to their continued support in future.