The Members of
ENKEI WHEELS (INDIA) LIMITED
The Directors take pleasure in presenting the Twelfth Annual Report together with theAudited Financial Statements for the financial year ended 31st December 2020:
The Company's financial performance during the financial year 2020 as compared to theprevious year 2019 (9 M) is summarized below:
|Particulars ||For the Year ended December 31 2020 ||For the Year ended December 312019 (9 M)* |
|Total Revenue ||2365.95 ||2670.63 |
|Earnings before exceptional items extraordinary items interest tax depreciation and amortisation (EBITDA) ||12.45 ||(43.37) |
|Less: Depreciation ||217.66 ||177.60 |
|Less: Financial Expenses ||121.09 ||44.79 |
|Profit / (Loss) before exceptional and extraordinary items and tax ||(326.30) ||(265.76) |
|Less: Exceptional and Extraordinary items ||- ||(317.18) |
|Profit/(Loss) before Tax ||(326.30) ||51.42 |
|Less: Provisions for Taxes ||(12.72) ||24.17 |
|Profit/(Loss) after Tax ||(313.58) ||27.25 |
*Figures are not comparable. Current Financial year of the company ended on 31stDecember 2020 covering a period of Twelve months from 1st January 2020 to 31st December2020 and previous period of Nine Months from 1st April 2019 to 31st December 2019.
REVIEW OF OPERATIONS:
The sluggish market demand trends was continuing from the secondhalfof2019andremainedtillfirstQtr of FY2020. The effect of the Covid started being felttowards the end of March-2020 when many of the countries went into lockdown to counter thespread of the virus. Qtr2 i.e April-Jun2020 saw the major impact of Covid on Enkei Indiaas the plant was complete shutdown for 45 days due to nationwide lockdown declared by theGovernment. Your company initiated a program for cost reduction and cash protection andcontinued to focus on Plant adding new capabilities.
The reopening of plants post lockdown was done in a manner that provides a safe workingenvironment for the workforce. All Safety protocols mandated by local authorities werefollowed the focus was on renewing and continuing operations in a safe and sustainablemanner thus Qtr 3 and Qtr 4 of FY2020 have seen recovery in operation.
During the Financial Year (2020) under review total revenue of the Company dropped toINR 2365.95 from INR 2670.63 Million for previous year however Profit before InterestDepreciation Exceptional Items and Tax improved to INR 12.45 Million as against loss ofINR 43.37 Million for the previous year. The profit before exceptional items & tax forthe Financial Year reduced by loss of 326.30 Million in Financial Year 2020 from profitINR 5142 Million in Financial Year 2019 (9 months). Overall your Company landed with thesales of total 1.14 million (Jan-Dec 2020) combined for 2 wheelers plus 4 wheelers duringthe year under review as against total sales 1.36 million (April - Dec 2019) wheels.
Your Company had posted 16.7% overall de-growth in terms of sales volume as well as11.4 percent de-growth in sales value in year under review as compared to the last year 9months period and the drop-in revenue is mainly due to the impact caused by the Covid-19pandemic.
The integration between your company and its parent company Enkei Corporationinteraction between the employees of the two entities played major role in survival incurrent tough time of Covid pandemic crises.
During the year under review Company has allotted 898700 Equity Shares on Preferentialbasis against share application money of Rs. 368.47 Million at Rs. 410 (including thepremium of Rs. 405) each received from its Holding Company i.e. Enkei Corporation Japanafter obtaining requisites approvals from all competent authorities.
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Prevention Prohibition and Redressal of Sexual Harassment of Women at WorkplaceAct 2013 provides for protection against sexual harassment of women at workplace and forthe prevention and Redressal of complaints of sexual harassment and for matters connectedtherewith or incidental thereto. The Company has framed a Policy on Prevention of SexualHarassment at Workplace as per the provisions of this Act. Internal Complaints Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Allemployees (permanent contractual temporary trainees) are covered under this Policy. ThePolicy is gender neutral. There were no cases reported during the year under review underthe said Policy.
Details in respect of frauds reported by auditors under sub-section (12) of Section 143"other than those which are reportable to the Central Government"
No matters of actual or alleged fraud has been reported by the auditors undersub-section (12) of Section 143 of the Companies Act 2013.
The annual listing fees for the year under review have been paid to BSE Limited whereyour Company's shares are listed.
PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION 134OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014 AND RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014: EXTRACTOF ANNUAL RETURN:
The details forming part of the extract of Annual Return in
Form MGT - 9 is annexed herewith as Annexure I' to this Report.
NUMBER OF MEETINGS OF THE BOARD:
During the year under review Four Board Meetings were convened and held. Theintervening gap between the two consecutive Meetings was within the period prescribedunder the Companies Act 2013 and as per the SEBI (Listing Obligation &Disclosure)Regulations 2015.Following are the details of the Board Meeting held duringthe year:
|Name of Director ||No. of Board Meetings Attended |
| ||(Total Meetings held: 4) |
|Mr. Kazuo Suzuki ||4/4 |
|Mr. Junichi Suzuki ||1/4 |
|Mr. Shailendrajit Rai ||4/4 |
|Dr. Haresh Shah ||4/4 |
|Mr. Satyavara P. Garimella ||4/4 |
|Ms. Shilpa Dixit ||4/4 |
SEPARATE MEETING OF INDEPENDENT DIRECTORS:
Pursuant to schedule IV of the Companies Act 2013 the independent directors of theCompany shall hold at least one meeting in a year without attendance of non-independentdirectors and members of the Management. Accordingly independent directors of the Companymet on Wednesday 16th December 2020 to consider the following business asrequired under the Companies Act 2013:
I. review the performance of non-independent directors and the Board as a whole;
II. review the performance of the Chairperson of the Company taking into account theviews of executive directors and non-executive directors;
III. assess the quality quantity and timeliness of flow of information between theCompany's Management and the Board that is necessary for the Board to and reasonablyperform their duties.
All the independent directors were present at the meeting.
Compliance Requirement under Regulation 20 of LODR
As per the regulation 20 of SEBI LODR chairman of
Stakeholders Committee needs to be present at the Annual
General Meeting held on 18th July 2020 to address the stakeholders' grievances. Mr.GSV Prasad Chairman of
Stakeholders Committee was not able to present in the meeting due to ongoing Coronapandemic situation.
Accordingly Chairman of the Shareholders Meeting explained the unavailability of Mr.GSV Prasad Chairman of SRC Meeting and announced the presence of Mr. Haresh shah memberof Stakeholders Committee to address the grievances if any received from the shareholders.
The Company has not received any grievances in the AGM. Accordingly compliance underLODR and Companies Act 2013 has been duly taken care by the company.
Compliance with the provisions of Secretarial Standard 1 and Secretarial Standard 2.
The Company have devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand that such systems are adequate and operating the year under review the Company was incompliance with the Secretarial Standards i.e. SS-1 and SS- 2 relating to"Meetings of the Board of Directors" and "General Meetings"respectively.
FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS
The company as required under Schedule IV of the Companies Act 2013 and ListingRegulations has made arrangement to facilitate the independent directors to familiarizewith the operations of the company their roles rights responsibilities as Directors ofthe company considering the nature of the industry in which the company operates businessmodel of the company etc. The above aspect can be accessed by web link www.enkei.in.During the F.Y. 2020 no new independent directors have been appointed by the company.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(5) of the Companies Act 2013 withrespect to Directors' responsibility Statement it is hereby confirmed as a. that in thepreparation of the annual accounts for the year ending on 31st December 2020the applicable accounting standards had been followed along with proper explanationrelating to material departures; b. that the directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give true and fair view of the state of affairs of thecompany at the end of the financial year and of theLoss of the company for thatyear; sufficient . thatthedirectorshadtakenproperand 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. that the directors had prepared the annual accounts for the yearended on 31st December 2020 on a going concern basis; e. proper internalfinancial controls were in place and that the financial controls were adequate and wereoperating effectively; f. proper systems to ensure compliance with the provisions of allapplicable laws were in place and were adequate and operating effectively.
In the view of continuing loss as well as ongoing expansion your Directors decided toconserve the resources and do not recommended payment of dividend for the financial year2020.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid in last year. Further there is no unclaimed dividend oroutstanding dividend standing in the books of the Company.
A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section
149(6) of the Companies Act 2013 and in 16 (1) (b) of Securities And Exchange Board OfIndia (Listing Obligations And Disclosure Requirements) Regulations 2015 and pursuant toRegulation 16(1)(b) of the Listing Regulations each Independent Director confirmed thathe/she is not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact his/ her ability to discharge his/ her dutieswith an objective independent judgment and without any external influence and that he/sheis independent of the management.
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Board had on the recommendation of the Nomination and Remuneration Committee frameda policy for selection and appointment of Directors Key Managerial Personnel and SeniorManagement Personnel and their remuneration. The Company policy on Directors & KMPremuneration is available on the Company's website at http://www.enkei.in/download/others/Nomination_Remuneration_Policy.pdf
A. Statutory Auditors
Pursuant to the provisions of section 139 of Companies Act 2013 and the companies(Audit and Auditors) Rules 2014 M/s. Kirtane & Pandit LLP Chartered Accountants(Firm Registration No. 105215W / W100057) serves as the Statutory Auditors of the Companyto undertake the Statutory Audit of the Company.
Details of remuneration is provided in note to Balance Sheet 36(f). There is nomaterial difference in the remuneration offered and remuneration paid to the presentAuditors.
B. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Shailesh Indapurkar and Associates Practicing Company Secretary(Membership No. ACS 17306 CP No. 5701) to undertake the Secretarial Audit of the Company.The Report of the Secretarial Audit is annexed herewith as Annexure III' to thisReport. M/s. Shailesh Indapurkar and Associates Practicing Company Secretary have alsoissued Secretarial Compliance Report as per Securities and Exchange Board of IndiaRegulations and Circulars/Guidelines issued thereunder same is annexed herewith asAnnexure IV' to this Report.
EXPLANATION ON COMMENTS ON STATUTORY AUDITORS'SECRETARIAL COMPLIANCE REPORT ANDSECRETARIAL AUDITORS' REPORTS:
There are no qualifications reservations or adverse remarks or disclaimers made byM/s. Kirtane & Pandit LLP Statutory Auditors in their Audit Report and by Mr.Shailesh Indapurkar Practicing Company Secretary in his Secretarial Audit Report andAnnual Secretarial Compliance Report.
COST AUDIT REPORT AND MAINTENANCE OF COST RECORDS:
The Cost audit under provisions of Section 148 of the Companies Act 2013 is notapplicable to the Company. Hence the Company hasnotconductedthecostauditforthe
Maintenance of cost records has not been specified Central Government under sub section(1) of section 148 (1) of the Companies Act 2013 and the Companies (Cost Records andAudit) Rules 2014 for the business activities carried out by the Company.
The management is accountable for the integration of risk management practice into theday to-day activities. The risk assessment and minimization procedures being followed bythe management and steps taken by it to mitigate these risks are periodically placedbefore the Board and Audit Committee along with findingsof the internal auditors. All theassets of the Company are adequately insured. No major elements of the risk exist whichin the opinion of the Board may threaten the existence of the company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not advanced any loans given guaranteesand made investments.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013:
All contract/arrangement/transactions entered by the Company during the Financial Year2020 with the related parties were in the ordinary course of business and on arm's lengthbasis. Hence no particulars are being provided in Form AOC-2.
Further we draw your attention to Note no 36(j) of the Financial Statements of theCompany.
STATE OF COMPANY'S AFFAIRS:
Discussion on state of Company's affairs has been covered in the Management Discussionand Analysis Report.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES:
Particulars of the amounts proposed to be carried to reserves have been covered as partof the financial performance of the Company.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE DATE OF THE BALANCE SHEET AND THE DATE OFREPORT:
There have been no material changes and commitments the financial position of theCompany between the end of the Financial year of the Company to which the FinancialStatement relate and the date of the report.
EMPLOYEES' REMUNERATION: by the In terms of the provisions of Section 197(12) ofthe Act there are no employees of the Company drawing remuneration in excess of thelimits set out in the said provision.
Details of the Remuneration as required under Section
197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is attached as Annexure- V' tothis Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION RESEARCH AND DEVELOPMENT FOREIGNEXCHANGE EARNINGS AND OUTGO:
CONSERVATION OF ENERGY:
Since energy conservation plays a significant pollution free environment your companyis committed to save energy and resources to maintain green atmosphere. In view of thiscompany adopted process of recycling of water used in production for reducing the waterconsumption to a greater extent. During the year under review company has undertaken theactivities like 100 percent utilization of LED lamps and reducing the DG backup usage forsaving energy.
During the year under review company have changed layout at machining inspection areaof casting which helps in improving company's PTO (Pass through Ratio). Company is alsoworking to reduce cycle time at casting area by improving cooling system at CMC area byusing modified programme with new clamping method at Robot. Company also upgraded theexisting VDH water technology for Air leak checking in wheels to Helium leak testingtechnology for bringing more accuracy in testing final the year Company has adopted Flowforming (MAT-ENKEI Unique word) technology. MAT is combined new technology for productionof Aluminum wheel our original Casting
Technique "MAP" and Flow-forming Technique to Produce Rim Profiles. By flowformed wheel Reduce Weight by Increase Excellent Material property from Flow- Verificationforming Safety Rim Deformed Situation by Flow Structure.
RESEARCH AND DEVELOPMENT:
Enkei is initiating towards obtaining Laser marking facility installment as per BISregulation QCVN as per Vietnam country regulation adaption for MSIL model and SNIcertificate for 19" 2W wheel as per Vietnam market regulation.
Foreign Exchange Earnings & Outgo (Cash Basis)
During the year total inflows (on cash basis) in foreign exchange were NIL andtotal outflows (on cash basis) in foreign exchange were Rs. 1066.9 Million
CORPORATE SOCIAL RESPONSIABLITY (CSR)
For the year under review the provisions of Section 135 of the Companies Act 2013 areapplicable to the company. Further the Board of Directors has formed the CSR Committee& approved CSR Policy.
The detailed constitution of CSR Committee is provided in Corporate Governance Report& CSR Policy is available on the website of the Company.
Report on CSR Activities as required under Section 135 of The Companies Act 2013 andRules framed there under is attached as an Annexure V to this report.
Performance evaluation of Board and its Committees roleinmaintaining Pursuant toprovisions of the Companies Act and the Listing Regulations the Board has carried out theannual performance evaluation of Board's own performance the Committees and IndependentDirectors without participation of the relevant Director. The Nomination and RemunerationCommittee of the Board also have evaluated the performance of the Board and providedfeedback to the Board. The independent directors had a separate meeting without thepresence of any non-independent directors and management and considered and evaluated theBoard's performance and other non-independent directors and shared their views with theboard.
DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNEDDURING THE YEAR: DIRECTORS AND KMP'S APPOINTED / RESIGNED DURING THE YEAR:
During the year under review Mr. Shriknt Joshi Company Secretary and Complianceofficerof the from the office on 22 nd November 2020 due to his personal assignment.
Consequently the intimation of resignation of KMP and necessary e-forms were filed withthe registrar of companies (ROC) and Bombay stock exchange (BSE) in due course of time bythe company.
There was no other change in composition of board key managerial persons during theperiod under review except mentioned above.
DIRECTORS PROPOSED TO BE RE-APPOINTED AT THE ENSUING ANNUAL GENERAL MEETING:
Mr. Shailendrajit Charanjit Rai retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.
DETAILS OF DEPOSITS WHICH ARE NOT IN COMPLIANCE WITH THE REQUIREMENTS OF CHAPTER V OFTHE COMPANIES ACT 2013:
During the financial year under review company did not accept any deposits which arenot in compliance with the requirements of Chapter V of The Companies Act 2013.
CHANGE IN THE NATURE OF BUSINESS IF ANY:
There has been no change in the nature of business during the Financial Year underreview.
SUBSIDIARY COMPANIES JOINT VENTURE OR ASSOCIATE COMPANIES:
During the year under review there are no companies which has become/ ceased to becomea Subsidiary/ Joint Ventures/ Associate Companies.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
The Company has neither received nor is aware of any such order from Regulators Courtsor Tribunals during the year.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Company has developed a strong two tier internal control framework comprisingentity level controls and process level controls. The entity level controls of the Companyinclude elements such as defined code policy rigorous management review MIS and stronginternal audit mechanism. The process level controls have been ensured by implementingappropriate checks and balances to ensure adherence to Company policies and procedures
Regular management oversight and rigorous periodic testing of internal controls makesthe internal controls environment strong at the Company. The Audit Committee along withManagement overseas results of the internal audit and reviews implementation on a regularbasis.
COMPOSITION OF COMMITTEES:
The composition of all committees formed by board is provided in Corporate GovernanceReport.
The Company has formulated and implemented the Whistle Blower Policy / Vigil Mechanism.This has provided a mechanism for directors and employees of the Company and other personsdealing with the Company to report to the Chairman of the Audit Committee; any instance ofunethical behaviour actual or suspected fraud or violation of the Company's code ofconduct. The aforesaid policy has also been uploaded on the Company's website.
A Cash Flow Statement for the year ended 31st December 2020 is attached tothe Balance Sheet.
CORPORATE GOVERNANCE: of conduct whistle blower
Corporate Governance report for the year under review is annexed herewith.
Your Directors wish to convey their appreciation to all the employees for theircollective contribution to the Company's performance. Directors also wish to thank EnkeiCorporation our promoters banks financial institutions and customers for theirunstinted support and shareholders for their confidence reposed in the management.
|For & On Behalf of the Board of Directors |
|Kazuo Suzuki ||Haresh Shah |
|Managing Director ||Director |
|(DIN: 08350372) ||(DIN: 00228471) |
|Place: Pune || |
|Date: February 18 2021 || |