Your Directors are pleased to present the 64 Annual Report and Audited FinancialStatement of Accounts for the financial year ending 31 March 2019.
|FINANCIAL RESULTS || ||[Rs. in lacs] |
|Particulars ||1 April 2018 to 31 March 2019 ||1 April 2017 to 31 March 2018 |
|Gross Sales (including other operating income) ||131897.90 ||133733.31 |
|Other income ||2849.34 ||2487.99 |
|Total Income ||134747.24 ||136221.30 |
|Operating profit before finance charges depreciation and exceptional item ||21868.40 ||21641.33 |
|Finance Charges ||874.30 ||1020.06 |
|Depreciation ||8151.33 ||7343.32 |
|Exceptional items ||- ||- |
|Net Profit before tax ||12842.77 ||13277.95 |
|Provision for the Taxation: || || |
|Current Tax ||4231.16 ||4650.00 |
|Less: Deferred Tax ||360.76 ||332.99 |
|Profit after tax ||8250.85 ||8294.96 |
|Other comprehensive income (net of taxes) ||304.12 ||239.23 |
|Total Comprehensive income ||8554.97 ||8534.19 |
|Profit brought forward from last year ||31415.29 ||22881.10 |
|Surplus / (loss) carried forward to Balance sheet ||39970.26 ||31415.29 |
During the financial year the Gross sale of the Company was Rs. 131897.90 lakhs asagainst Rs. 133733.31lakhs for the financial year ended 31st March 2018. The Total incomeof the Company was Rs. 134747.24 lakhs as against Rs. 136221.30 lakhs for the financialyear ended 31st March 2018.
During the year under review the Company made a net profit after tax of Rs. 8554.97lakhs as against the net profit after tax of Rs. 8534.19lakhs for the financial yearended 31st March 2018.
No amount is proposed to be transferred to general reserves. An amount of Rs. 8554.97lakhs is proposed to be retained in the Statement of Profit and Loss.
In view of requirement of funds for the operations of the Company no dividend isrecommended for the financial year ended 31st March 2019.
NUMBER OF MEETINGS OF THE BOARD AND AUDIT COMMITTEE
The details of the number of Board and Audit Committee meetings held and attended bydirectors/members and composition of Audit Committee of the Company are set out in theCorporate Governance Report which forms part of this Report as Annexure-1.The reportinter alia includes the list of credit ratings obtained along with any revisions theretofor all debt instruments of such entity or any fixed deposit programme or any scheme orproposal of the entity involving mobilization of funds.
DIRECTORS ' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
(b) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2019 and of the profitand loss of the Company for the financial year ended 31st March 2019;
(c) the directors have taken proper and sufficient care 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) the directors have prepared the annual accounts on a going concern basis;
(e) the directors have laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors confirming theindependence as per the criteria prescribed under section 149(6) of Companies Act 2013read with the Schedules and Rules made thereunder as well as Regulation 16(1)(b) and 25(8) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
NOMINATION & REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeadopted a policy for selection and appointment (including the criteria for determiningqualifications positive attributes independence of directors) and remuneration ofDirectors including Independent Directors Key Managerial Personnel Senior ManagementPersonnel and other employees. The Nomination & Remuneration Policy is attached asAnnexure - 2.
EXPLANATIONS OR COMMENTS ON AU D I TO R ' S Q UA L I F I C AT I O N / RESERVATION/ADVERSE REMARKS/ DISCLAIMER
There is no reservation or observation or qualification or adverse remark or disclaimerof Auditors' including Secretarial Auditors' of the Company in their report.
Tenneco Inc. headquartered in lake forest Illinois United States of Americacompleted the acquisition of Federal-Mogul LLC the ultimate holding company of theCompany on October 1 2018 and Federal-Mogul LLC was merged with Tenneco Inc.
On April 16 2018 Tenneco Inc. through M/s CKP Financial Services Private Limited("Manager to the Open Offer" of Tenneco Inc.) made a Public Announcement to theeligible public shareholders of the
Company followed by a Detailed Public Statement dated 9th October 2018. In thisregard the Draft letter of offer dated October 16 2018 was filed by Tenneco Inc. withthe Securities And Exchange Board of India. The relevant disclosures as required by lawhad been made from time to time to NSE & BSE.
LOANS AND INVESTMENTS
During the Financial Year ended 31st March 2019; no Loan Investment and Guarantee u/s186 of the Companies Act 2013 was made by the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2018-19 the Company has entered into related partytransactions in terms of the Companies Act 2013 read with rules made thereunder andregulation 23 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 which were in the ordinary course of businessand on arms' length basis.
During the financial year 2018-19 there were no transactions with related partieswhich qualified as material transactions in accordance with the Company's Policy under theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 and accordingly the disclosure of Related Party Transactions in FormAOC-2 is not applicable. Pursuant to Regulation 33 (3)(g) of the SEBI (Listing Obligationsa n d D i s c l o s u r e R e q u i r e m e n t s ) Regulations 2015 the disclosure ofRelated Party Transactions will be uploaded on the website of your C o m p a n y ( w w w.f e d e r a l m o g u l goetzeindia.net) on half yearly basis.
The transaction with promoter/ promoter group entities holding 10 percent or moreshareholding are disclosed as notes to the financial statement (Note No. 40) other thanwhich there are no other transactions.
The Directors state that applicable Secretarial Standard's i.e. SS-1 and SS-2 relatingto "Meeting of the Board of Directors" and "General Meetings"respectively have been duly followed by the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under Section 134 of the Companies Act 2013 read withrules made thereunder is set out herewith as Annexure-3 to this Report.
RISK MANAGEMENT POLICY
T h e C o m p a n y o p e r a t e s i n a n environment which is affected by variousrisks some of which are controllable while some are outside the control of the Company.Therefore pursuant to the requirements of the Companies Act 2013 and Regulation 21 ofthe SEBI (Listing Obligations and Disclosure Require- ments) Regulations 2015 theCompany has constituted a Risk Management Committee. The Company has also developed andimplemented the Risk Management Policy covering the process of identifying assessingmitigating reporting and review of critical risks impacting the achievement of Company'sobjectives or threaten its existence.
There are no risks which in the opinion of the Board threaten the existence of theCompany. However some of the risks which may pose challenges are set out in the RiskManagement Policy of the Company.
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) (Second Amendment) Regulations 2016 the Companyin its Board Meeting held on 29th July 2016 had approved the Dividend Distribution Policy.The Dividend Distribution Policy of the Company is attached herewith as Annexure-4 to thisReport.
CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors at its meeting held on 09th May 2014 approved the CorporateSocial Responsibility (CSR) Policy for the Company pursuant to the provisions of Section135 of the Companies Act 2013 read with rules m a d e t h e r e u n d e r o n t h erecommendations of the CSR Committee.
The Company has constituted Corporate Social Responsibility (CSR) Committee. Presentlythe committee comprises the following members :-
1) Mr. Vinod Kumar Hans Chairman
2) Dr. Khalid Iqbal Khan Member
3) Mr. KN Subramaniam Member
4) Mr. K C Sundareshan Pillai Member
The Corporate Social Responsibility Committee is required to institute a transparentmonitoring mechanism for implementation of CSR projects or programs or activitiesundertaken by Company. Pursuant to the provisions of Companies Act 2013 the Company isrequired to spend atleast 2% of the average profits of the company during the previous 3financial years on CSR activities. Therefore the Company has incurred the total allocatedbudget of Rs. 212.35 lakhs on the CSR activities approved by CSR Committee and the Boardof Directors.
The activities and initiatives undertaken by the Company during the financial year2018-19 on CSR activities have been detailed in the Annual Report on CSR activities inaccordance with the C o m p a n i e s ( C o r p o r a t e S o c i a l ResponsibilityPolicy) Rules 2014. The policy on Corporate Social Responsibility and Annual Report onCSR activities are attached herewith as Annexure- 5&6 to this Report.
In accordance with the provisions of section 135 of the Companies Act 2013 the Boardhas approved an amount of Rs. 250.86 lakhs for spending on CSR activities during thefinancial year 2019-20.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Presently the Board consists of Eleven (11) directors comprising of Mr. K.N.Subramaniam Chairman and Non-executive Independent Director; Mr. Vinod Kumar HansWhole-time Managing Director; Dr. Khalid Iqbal Khan Whole Time Director-Legal &Company Secretary; Mr. Manish Chadha CFO & Finance Director Mr. Rajesh SinhaWhole-time Director; Mr. Mukul Gupta Non-executive Independent Director; Mr. Sunit KapurNon-Executive Director; Mr. Mahendra Kumar Goyal Non-executive Independent Director; Ms.Janice Ruskey Maiden Non-Executive Director Mr. K C
Sundareshan Pillai Non-executive Independent Director and Ms. Nalini JollyNon-Executive Women Independent Director.
In accordance with Article 109 of the Articles of Association of the Company Mr.Rajesh Sinha and Mr. Manish Chadha are retiring by rotation at the forthcoming AnnualGeneral Meeting and being eligible offer themselves for reappointment.
In accordance with the provisions of Section 149 of Companies Act 2013 and otherapplicable provisions Ms. Nalini Jolly has been appointed as an Independent WomanDirector on the Board for a period of 3 (three) years with effect from 13th August 2019till 12th August 2022.
Brief resume nature of expertise details of directorships held in other companiesexcluding foreign companies of the Directors proposed to be appointed / r e a p p o i n te d a l o n g w i t h t h e i r shareholding in the Company as stipulated underSecretarial Standard 2 and 36 (3) of the SEBI (Listing Obligations a n d D i s c l o s u re R e q u i r e m e n t s ) Regulations 2015 is appended as an Annexure to the Notice ofthe ensuing AGM.
The Company has received the declaration by all the independent directors of theCompany that they meet the legal criteria of independence.
SUBSIDIARY AND ASSOCIATE COMPANY
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of Companies(Accounts of Companies) Rules 2014 a statement containing salient features of financialstatement of subsidiary i.e. Federal-Mogul TPR (India) Limited forms part of theconsolidated financial statements attached as Annexure-7. The financial statements of thesubsidiary company and related information are available for inspection at the RegisteredOffice of the subsidiary company during business hours on all days except SaturdaysSundays and public holidays upto the date of the Annual General Meeting (AGM) as requiredunder Section 136 of the Companies Act 2013. Any member desirous of obtaining a copy ofthe said financial statements may write to the Company Secretary at the Registered
Office of the Company. The financial statements including the consolidated financialstatements financial statements of subsidiary and all other documents required to beattached to this report have been uploaded on the website of your Company(www.federalmogulgoetze india.net).
The performance and financial position of the subsidiary company i.e. Federal-Mogul TPR(India) Limited have been explained in its Board Report which forms part of annualreport.
As at 31st March 2019 your Company had no unclaimed fixed deposits. No fresh/ reneweddeposits were invited or accepted during the financial year.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of the Company and its operations in future.
FORMAL ANNUAL EVALUATION BY BOARD
In terms of provisions of the Companies Act 2013 read with Rules made thereunder andRegulation 19 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors had evaluated theeffectiveness of the Board. Accordingly the performance evaluation of the Board eachDirector and the Committees was carried out for the financial year ended 31st March 2019.The evaluation of the Directors was based on various aspects which inter alia includedthe level of participation in the Meetings knowledge and skills understanding of theirroles and responsibilities business of the Company along with the ethics and integrity.The evaluation of the Board and committees was inter alia based on the aspects likeStructure of the Board or Committee processes being followed to achieve the objectiveseffectiveness fulfillment of roles and responsibilities efficiency and direction etc.
DETAILS ON INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
The Company has an Audit Committee headed by a Non-executive Independent Directorinter-alia to oversee the Company's financial reporting process disclosure of financialinformation performance of statutory and internal auditors functions internal controlsystems related party transactions investigation relating to suspected fraud or failureof internal audit control to name a few as well as other areas requiring mandatoryreview as per Regulation 18(3) of the Securities and Exchange Board of India (Listing O bl i g a t i o n s a n d D i s c l o s u r e Requirements) Regulations 2015.
The powers of the Audit Committee inter-alia include seeking information from anyemployee directing the Company's internal Audit function obtaining outside legal orother professional advice and investigating any activity of the Company within theCommittee's terms of reference.
The Company has a well-defined internal control system which aims at protection ofCompany's resources efficiency of operations compliances with the legal obligations andCompany's policies and procedures.
MANAGEMENT DISCUSSION AND ANALYSIS:
( a ) I n d u s t r y s t r u c t u r e s a n d developments
Automotive Industry globally as well as in India is one of the key sectors of theeconomy. The Indian auto industry is highly competitive consisting of organized as wellas unorganized sectors and is highly fragmented with a significant number of small andmedium-sized companies. Innovation technological upgradation and cost saving hold the keyto success in the highly competitive and challenging market.
During the financial year 2018-19 the industry produced a total 30915420 vehiclesincluding Passenger Vehicles Commercial Vehicles Three Wheelers Two Wheelers andQuadricycle as against 29094447 in April-March 2018 registering a growth of 6.26percent over the same period last year.
The domestic sale of Passenger Vehicles grew by 2.7 percent in April-March 2019 overthe same period last year. The overall Commercial Vehicles segment grew by 17.55 percentin April-March 2019 as compared to the same period last year. Medium & HeavyCommercial Vehicles
(M&HCVs) grew by 14.66 percent and Light Commercial Vehicles grew by 19.66 percentin April-March 2019 over the same period last year.
Three Wheelers domestic sales grew by 10.27 percent in April- March 2019 over the sameperiod last year. Within the Three Wheelers Passenger Carrier & Goods Carrier salesregistered a growth of 10.62 percent and 8.75 percent respectively in April-March 2019over April-March 2018.
Two Wheelers sales registered a growth at 4.86 percent in April-March 2019 overApril-March 2018. Within the Two Wheelers segment Scooters declined by (-) 0.27 andMotorcycles grew by 7.76 percent while Mopeds grew by 2.41 percent in April-March 2019over April-March 2018.
In April-March 2019 overall automobile exports increased by 14.50 percent. Two andThree Wheelers Segments registered a growth of 16.55 percent and 49.00 percentrespectively while Passenger Vehicles declined by (-) 9.64 percent and CommercialVehicles grew by 3.17 percent in April-March 2019 over the same period last year.
The Government's clear vision of making India an automobile hub along with initiativeslike Make in India' Automotive Mission Plan 2026 Ease of doing Business"Start-up India" "Smart Cities" "Skill India""Digital India" etc. are expected to give a boost to the auto sector. Apredicted increase in India's working-age population is likely to help stimulate themarket for private vehicles. Rising prosperity easier access to finance and increasingaffordability are expected to see four-wheelers gaining volumes although two wheelerswill remain the primary choice for the majority of purchasers buoyed by greater appetitefrom rural areas the youth market and women.
(b) Opportunities and Threats
The parent company continues to support the Company with its technical expertise. Withwidely recognized brands superior technology strong distribution network and a committedteam of employees the Company is well positioned to take advantage of the opportunitiesand withstand the market challenges. The Company strives to create sustainable profitablegrowth by using superior technology and maintaining product quality and offering widerange of products which will give it a competitive edge in the market.
Major regulatory interventions such as the accelerated transition from BS IV to BS VIadoption of electric vehicles safety rules and stringent vehicle standards are leading toa shift in vehicle technology This is creating significant challenges and your Companyperceives these challenges as potential opportunities.
Your Company competes with many independent manufacturers and distributors of componentparts. Management continues to develop and execute initiatives to meet the challenges ofthe industry and to achieve its strategy for sustainable global profitable growth.
There are limited sets of customers in our business that is the automobilemanufacturers. Competition is intense as we compete with suppliers both in the organizedand unorganized segments. Technical edge specialization innovation and networking willdetermine the success of the Company in this competitive environment. Further thepolicies of the Government play a key role in the development of the automobile sector.Your Company has been employing the practices to proactively map the impact of itsactivities on its performance and profitability from economic environment and socialperspectives.
Segment wise or product wise performance
The Company deals principally in only one segment i.e. automotive components.Therefore segment-wise performance is not applicable. The Company is inter alia engagedin the manufacturing and sale of Pistons Piston rings Pins valve seats and guides theperformance whereof is as under:
| || ||Rs. In lacs |
|Details of finished goods sold ||31 March 2019 ||31 March 2018 |
|Pistons ||115311.90 ||116112.22 |
|Piston rings and pistons pins* || || |
|Valve train and ||12561.06 ||10685.79 |
|Structural || || |
|components || || |
The Management expects a muted growth in the automobile industry during the year2019-20. The Indian Meteorological Department has forecasted normal monsoon which is acritical factor for the overall economic growth including the automobile sector. Focus ofthe Government on the investment in infrastructure sector and its development and lowinterest rates are expected to give boost to the automobile sector. However vehiclemarket fuel mix change from diesel to gasoline and CNG powertrain will impact autocomponent content per vehicle (CPV) the increased cost of technology and increasing fuelprices are likely to impact the growth of the automobile sector. Therefore it's likely tobe a mixed year for the auto component industry ahead.
The Company will endeavor to revitalize in near future as consumers regain confidenceand vehicle demand increases. To remain competitive in the c h a l l e n g i n g a n d d em a n d i n g environment the benchmark has to be high in anticipation of the stated andunstated need of the customers and markets.
(e) Risks and concern
T h e C o m p a n y o p e r a t e s i n a n environment which is affected by variousrisks some of which are controllable while some are outside the control of the Company.However the Company has been taking appropriate measures to mitigate these risks on acontinuous basis. Some of the risks that are potentially significant in nature and needcareful monitoring are listed hereunder:
Raw material prices: Our profitability and cost effectiveness may be affected due tochange in the prices of raw materials and other inputs.
Foreign Currency Risks: Exchange rate fluctuations may have an adverse impact on theCompany
Technical Intensive Industry: The automobile industry is a technical intensive industryand thus faced with a constant demand for new designs knowledge of nascent technology tomeet market requirements.
Increasing competition: Increasing competition in the auto equipment sector may putsome pressure on the market share.
Excess / short capacity: Estimation of optimal manufacturing capacities for ourproducts is critical to our operations. Should we for any reason not invest in capacityexpansion in near future could result in stagnation in our sales. Conversely in the eventwe over-estimate the future demand or due to general lowering of the customer demand dueto recession we may have excessive capacity resulting in underutilization of assetsand/or sale of surplus products at lower margin which could have material adverse effecton the financial results of the company.
(f) Adequacy of Internal Control Systems
The Company has an Audit Committee headed by a non-executive independent directorinter-alia to oversee the Company's financial reporting process disclosure of financialinformation performance of statutory and internal auditors functions internal controlsystems related party transactions investigation relating to suspected fraud or failureof internal audit control to name a few as well as other areas requiring mandatoryreview as per provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 with the stock exchanges. The powers of the Audit Committeeinter-alia include seeking information from any employee directing the Company'sinternal Audit function obtaining outside legal or other professional advice andinvestigating any activity of the Company within the Committee's terms of reference.
The Company has a well-defined internal control system which aims at protection ofCompany's resources efficiency of operations compliances with the legal obligations andCompany's policies and procedures.
( g ) D i s c u s s i o n o n f i n a n c i a l performance with respect to operationalperformance.
The required information forms part of in the Board's Report and the members may referthe same.
(h) Significant changes in Financial Ratios
- During the year there was no significant change in the financial ratios compared tothe previous year.
- The details of return on net worth at standalone and consolidated levels are givenbelow:
|Particulars Stand alone ||Stand alone ||Consoli dated ||Consoli dated |
|2019 ||2018 ||2019 ||2018 |
|Return on 19.27 net worth (%)Explanation ||22.54 ||18.97 ||22.15 |
(I) Material developments in Human Resources / Industrial Relations front includingnumber of people employed
The overall Industrial Relations situation is congenial and there has been lots ofemployee engagement program initiated to keep the morale up of the employees. Theemployees in the organisation at all levels have demonstrated commitment and ownership.There has been lots of PIP( Productivity Improvement Projects) running across theorganisation. There have been initiatives involving families of employees to make thebonding strong.
People development continued to remain a top priority for the organisation. Focusremained on functional skill building and building capabilities of the second line ofleadership. Academies of excellence were launched in the areas of Purchasing and SupplyChain. A number of critical Cross Functional Projects' were launched to promotecollaboration and further strengthen accountability and ownership amongst the leaders.Concerted efforts to enhance employee productivity through job enrichments andenlargements are ongoing. Preparations for the union settlements in Bangalore and Patialaare going on smoothly.
The total number of salaried and hourly employees (permanent) as at March 31 2019stood at 3544.
The Consolidated Financial Statements of the Company for the financial year 2018-19are prepared in compliance with applicable provisions of the Companies Act 2013 IndianAccounting Standards (Ind AS) under the historical cost convention on the accrual basisexcept for certain financial instruments which are measured at fair values and theSecurities and Exchange Board of India (Listing O b l i g a t i o n s a n d D i s c l o su r e Requirements) Regulations 2015. The Consolidated Financial Statements have beenprepared on the basis of Audited Financial Statements of the Company and its subsidiarycompany as approved by their respective Board of Directors.
ABRIDGED FINANCIAL STATEMENTS
In terms of the provisions of regulation 36 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and section 136 ofthe Companies Act 2013 the Board of directors has decided to circulate the abridgedannual report containing the salient features of the balance sheet and statement of profitand loss account to the shareholders for the financial year ending on March 31 2019. Fullversion of the annual report will be available on Company 's websitewww.federalmogulgoetzeindia.net and will also be made available to investors upon request.
In support of the green initiative of the Ministry of Corporate Affairs the Companyhas also decided to send all future communications including the annual report throughemail to those shareholders who have registered their e -mail id with their depositoryparticipant/Company's registrar and share transfer agent. In case any shareholder wishesto receive a printed copy of such communications he/she may send a request to theCompany which will send a printed copy of the communication to the shareholder.
AUDITORS AND AUDITORS' REPORT
At the 63 AGM of the Company M/s. Walker Chandiok & Co. LLP CharteredAccountants (Firm Registration No. 001076N/N500013) New Delhi were appointed as theStatutory Auditors' as per section 139 142 and other applicable provisions if any ofthe Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014 to holdoffice till the conclusion of the 67 AGM of the Company to be held in the calendar year2022.
The written consent to such appointment and a certificate from M/s Walker Chandiok& Co. LLP Chartered Accountants (Firm Registration No. 001076N/N500013) have beenreceived to the effect that the appointment is in accordance with the conditionsprescribed under Rule 4 of the Companies (Audit and Auditors) Rules 2014 and they satisfythe criteria specified under Section 141 of the Companies Act 2013 read with Rule 4 ofCompanies (Audit & Auditors) Rules 2014.
The Board has duly examined the Statutory Auditors' Report to the accounts which isself-explanatory.
The Board on the recommendation of the Audit Committee has approved the appointment ofM/s. Sanjay Gupta & Associates Cost Accountants as Cost Auditor for the financialyear ending March 31 2020. The Cost Auditors will submit their report for the financialyear ending 31 March 2020 on or before the due date.
In accordance with the provisions of Section 148 of the Companies Act 2013 read withrules made thereunder since the remuneration payable to the Cost Auditors is required tobe ratified by the shareholders the Board recommends the same for approval byshareholders at the forthcoming AGM.
The Company had appointed M/s. Deepika Gera Company Secretaries New Delhi to conductits Secretarial Audit for the financial year ended March 31 2019. The SecretarialAuditors have submitted their report confirming compliance by the Company of all theprovisions of applicable corporate laws. The Report does not contain any qualificationreservation or adverse remark. The Secretarial Audit Report is annexed as Annexure-8 tothis report. The Board has reappointed M/s. Deepika Gera Company Secretaries New Delhias Secretarial Auditor of the Company for FY 2019-20.
CORPORATE GOVERNANCE REPORT
The Company is committed to good corporate governance practices. The Board endeavors toadhere to the standards set out by the Securities and Exchange Board of India (SEBI)corporate governance practices and accordingly has implemented all the majorstipulations prescribed.
A detailed corporate governance report in line with the requirements of Securities andExchange Board of India (Listing O b l i g a t i o n s a n d D i s c l o s u r eRequirements) Regulations 2015 regarding the corporate governance practices followed bythe Company and a certificate of compliance from Mr. Surinder Vashishtha Proprietor ofSurinder Vashishtha & Associates Company Secretary forms part of this Report asAnnexure-9.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in form MGT-9 as per section 134(3)(a) of the CompaniesAct 2013 read with rule 12 of the Companies (Management & Administration) Rules 2014is attached as Annexure-10 to this report.
BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 of the Securities and ExchangeBoard of India (Listing O b l i g a t i o n s a n d D i s c l o s u r e Requirements)Regulations 2015 detailing the various initiatives of the Company is attached asAnnexure - 11.
COMMITTEES OF DIRECTORS
The Company has following committees of Directors:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholder s ' Relationship Committee;
4. Corporate Social Responsibility Committee;
5. Share Transfer Committee;
6. Risk Management Committee
The composition of Audit Committee Nomination & Remuneration CommitteeStakeholders' Relationship Committee Risk Management Committee and C o r p o r a t e S oc i a l R e s p o n s i b i l i t y Committee has been disclosed in corporate governancereport forming the part of this report.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITOR'S UNDER S E C T I O N 1 4 3 ( 1 2 ) OF T H E COMPANIES ACT 2013
Pursuant to Section 134(3)(ca) no incident of fraud has been reported by the Auditorsof the Company under section 143(12) of the Companies Act 2013.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(10) of the Companies Act 2013 andSecurities and Exchange Board of India (Listing O b l i g a t i o n s a n d D i s c l o su r e Requirements) Regulations 2015. The policy provides for a framework and processwhereby concerns can be raised by its employees against any kind of discriminationharassment victimization or any other unfair practice being adopted against them.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT W O R K P L A C E ( P R E V E N T IO N PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an anti-sexual harassment Policy and an Internal ComplaintsCommittee in line with the requirements of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. Internal Complaints Committee has beenset up to redress the complaints received regarding sexual harassment. All employees(permanent contractual temporary trainees) are covered under the policy. The followingis a summary of sexual harassment complaints received and disposed off during the year2018-19.
No. of complaints received: Nil
No. of complaints disposed off: Nil
During the year the Company carried out awareness programmes on prevention of sexualharassment at work place.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Directors place on record their deep appreciation for the contribution made by theemployees of the Company at all levels. Our industrial relations continue to be cordial.
The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofDirectors/ employees of your Company is set out in
Annexure 13 &14 to this Report.
The employee relations have remained cordial throughout the year and industrial harmonywas maintained. Measures for the safety training and development of the employeescontinued to receive top priority. The total number of permanent salaried and hourly paidemployees as at March 31 2019 stood at 3544.
SAFETY HEALTH AND ENVIRONMENT PROTECTION
The Company sustained its initiatives to maintain a pollution free environment byreduction/ elimination of waste optimum utilization of power and preventive maintenanceof equipment's and machineries to keep them in good condition. Safety and health of thepeople working in and around the manufacturing facilities is the top priority of theCompany and we are committed to improve this performance year after year.
Your Directors acknowledge with sincere gratitude the co-operation and assistanceextended by the Bank(s) Customers D e a l e r s Ve n d o r s p r o m o t e r s shareholders Government Authorities and all the other business associates during the yearunder review. The Directors also wish to place on record their deep sense of gratitude forthe committed services of the Executives staff and workers of the Company.
| ||For and on behalf of the Board of Directors of |
| ||Federal-Mogul Goetze (India) Limited |
|Vinod Kumar Hans ||Dr. Khalid Iqbal Khan |
|Date: 13 Aug 2019 Whole Time Managing Director ||Whole Time Director- Legal & Company Secretary |
|Place: Gurugram DIN : 03328309 ||DIN : 05253556 |