The Directors of your Company have the pleasure in presenting the 30th Annual Report ofFiem Industries Limited (the Company or FIEM) on the business and operations of theCompany having both standalone and consolidated audited financial statements for thefinancial year ended March 31 2019.
The financial statements have been prepared as a going concern in accordance withIndian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act2013 ("the Act) read with the Companies (Indian Accounting Standards) Rules 2015 andother relevant provisions of the Act.
The Directors Report is prepared on the basis of Standalone Financial Statementsof the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules 2014. Howeverthis report also contains highlights of performance of subsidiaries and joint venturecompanies and their contribution to the overall performance of the Company during theperiod under review. Financials of following Wholly-owned Subsidiaries (WOS) and JointVenture Companies (JVs) are consolidated in Consolidated Financial Statements.
|S.N. ||Name of Entities ||Country of Incorporation ||WOS/JV |
|1. ||Aisan Fiem Automotives India Private Limited (AFI) ||India ||69:26:5 JV |
|2. ||Fiem Kyowa (HK) Mould Company Limited. ||Hong Kong ||50:50 JV |
|3. ||Centro Richerche Fiem Horustech S.r.l ||Italy ||50:50 JV |
|4. ||Fiem Industries Japan Co. Ltd. ||Japan ||WOS |
|5. ||Fiem Research and Technology S.r.l (FRT) ||Italy ||WOS |
|6. ||Fiem (Thai) Design and Technology Co. Ltd. ||Thailand ||WOS |
During the year under review Companys performance has remained good in comparisonto industry growth and a summary of the same along with previous years figures areas under:
(Rs In Lacs)
|Sr ||Particulars ||Standalone ||Consolidated |
| || ||FY 2018-19 ||FY 2017-18 ||FY 2018-19 ||FY 2017-18 |
|1 ||Income from Operations || || || || |
| ||a) Net Sales (FY 2017-18 include Rs. 3477.99 lacs Excise duty) ||143396.13 ||126323.93 ||143900.43 ||126477.46 |
| ||b) Other Operating Income ||1003.67 ||989.40 ||1001.83 ||972.77 |
| ||Total Income from operations (Net) ||144399.80 ||127313.33 ||144902.26 ||127450.24 |
|2 ||Total Expenses (excluding dep and finance cost) ||128873.48 ||113246.45 ||129185.93 ||113376.83 |
|3 ||Profit from operations before other income finance costs depreciation and exceptional items (1-2) ||15526.32 ||14066.88 ||15716.33 ||14073.41 |
|4 ||Add Other income ||86.21 ||454.40 ||86.14 ||454.40 |
|5 ||Profit from ordinary activities before finance costs depreciation and exceptional items (3+4) ||15612.53 ||14521.28 ||15802.47 ||14527.81 |
|6 ||Less :- Finance costs ||2209.79 ||2272.41 ||2209.79 ||2272.41 |
| ||Less :-Depreciation ||4891.61 ||4432.47 ||4892.67 ||4432.59 |
|7 ||Profit from ordinary activities after finance costs depreciation but before exceptional items (5-6) ||8511.13 ||7816.40 ||8700.01 ||7822.81 |
|8 ||Exceptional Items ||- ||(340.58) ||- ||(340.58) |
|9 ||Profit/(Loss) from Ordinary Activities Before Tax (7-8) ||8511.13 ||8156.98 ||8700.01 ||8163.39 |
|10 ||Tax expense ||2962.38 ||2901.97 ||3035.98 ||2903.13 |
|11 ||Net Profit/(Loss) from Ordinary Activities After Tax (9-10) ||5548.75 ||5255.01 ||5664.03 ||5260.26 |
|12. ||Share of profit/(loss) of associates ||- ||- ||(99.11) ||(4.19) |
|13. ||Profit after tax for the year after share of profit/loss of associate ||5548.75 ||5255.01 ||5564.92 ||5256.07 |
|14. ||Other comprehensive income/(loss) (net of tax) ||-84.68 ||-71.38 ||-84.68 ||-71.38 |
|15. ||Total other comprehensive income (net of tax) ||5464.07 ||5183.63 ||5480.24 ||5184.69 |
|16 ||Weighted Earnings Per Share (EPS) ||42.16 ||39.93 ||42.29 ||39.94 |
State of the Companys affiairs / Business Review
FY 2018-19 has remained a difficult year for the two-wheeler industry. As per the dataavailable from SIAM two-wheeler industry has shown a growth of 6.29% during the FY2018-19as against the growth of 15.44% during FY2017-18. Domestic sales of the two-wheeler hasgrown by even lower number of 4.86%. In this background your Company registered a growthof 16.77% in the top line during FY 2018-19.
We have been able to grow at much higher than the industry rate. This is driven by thenew model LED auto sales and increase in share with other customers. Our growth withYamaha and Suzuki has been 82% and 67% respectively while maintaining modest growth withHonda and TVS. We continue to be one of the most preferred suppliers to the OEMs andsupplying product to more than 35 domestic and global OEMs. As mentioned earlier salesgrowth in FY2018-19 is 16.77% equivalent to Rs. 1434 Cr. It is important to highlight thatduring the same period industry has grown by only 6.29% while HMSI our key OEM hasdegrown by 4.41%. We have managed to grow our business with a few OEMs like Yamaha andSuzuki significantly thus achieving overall growth figure of 16.77%. Further EBITDA forFY2018-19 stands at 10.83% as against 11.45% during the FY2017-18. This decline is due toincrease in raw material cost during the year. Profit before tax stands at Rs. 85.11 Cr.Last year other income included Rs. 3.5 Cr of income coming from balances held in mutualfunds. This amount got majorly utilized during the year for expansion of business. Thusthere is very small corresponding income from this source in the current year. During theyear the Company has invested a sum of Rs. 62 crores in additional fixed assets. ForFY2018-19 finance cost of the Company stands at Rs. 22.1 Cr. This has largelyremained the same over previous year. We continue to follow prudent capital structure andour leverage remained very comfortable with a debt-to-equity ratio of 0.35:1. PAT of theCompany after taking into account all the associates of the JV companies stood at Rs.55.64 Cr during the FY2018-19 as against Rs. 52.56 Cr during the FY2017-18. EPS of theCompany stands at Rs. 42.29 per share for FY2018-19 as against Rs. 39.94 per sharefor FY2017-18.
Incorporation of JV Company: Aisan Fiem Automotives India Pvt. Ltd. (AFI):
On March 30 2018 Company had signed a "Joint Venture Agreement" with AisanIndustry Co. Ltd. Japan and Toyota Tsusho India for manufacture of Fuel Injection System(Fuel Pump Module) and IC connector for two-wheelers and three-wheelers for Indian market.
Fuel Injection System will become mandatory for two-wheelers and three-wheelers w.e.f.April 2020 under Bharat Stage VI (BS VI) regime. This is an advanced Emission ControlSystem Product which will have huge market in India under BS VI norms and will replacecarburetor.
In terms of above Joint Venture Agreement a Joint Venture Company incorporated on 7thJune 2018 namely Aisan Fiem Automotives India Pvt. Ltd. (AFI). Total equity investmentin the JV Company is Rs. 100 Crore wherein Fiem Industries hold 26% Aisan hold 69% andToyota Tsusho hold 5%. The JV Company has established factory in ELCINA ElectronicManufacturing Cluster in Tapukara.
Technical Assistance Agreement for Bank (Lean) Angle Sensor
During July 2018 Company has signed a "Technical Assistance Agreement" withTOYODENSO Co. Ltd. Japan and Toyota Tsusho Corporation Japan for manufacturing of BankAngle Sensor for motorcycles for Indian market. Bank Angle Sensor is a safety sensorwhich is being increasingly applied by OEMs in motorcycles and will have an increasingmarket in India. Bank Angle Sensor has the functionality of stopping the engine ofmotorcycle at the time of accidents and avoid prolonged skidding. The preparation forproduction of Bank Angle Sensor at Tapukara factory is at full swing and Company plan tocommence the mass production during current year.
Design Centre in Italy: Fiem Research and Technology S.r.l (FRT)
Companys focus has been on development of in-house design and testing capabilityand going ahead with the new technology product like bank angle sensor fuel pump moduleetc. by forging partnerships with the world renowned manufacturers.
During the year Company formed a wholly-owned subsidiary in Italy namely Fiem Researchand Technology S.r.l and setup a Design Center which will significantly strengthen ourdesigning capabilities.
Prestigious Global Award from Yamaha Motor Company Japan for excellence in Technologyand Development
The leadership of the Company in the technology development has been further reinforcedas Company has received the Global Award from Yamaha Motor Company Japan for Excellencein Technology and Development. Company has developed the worlds smallestbifunctional LED lighting module for two-wheelers. This is a big global award showcasingCompanys capability.
Addition of New Customer: India Kawasaki Motor
Company has added another prestigious customer India Kawasaki Motor for development andsupply of headlamp tail lamp and rearview mirror for one of their upcoming model. Theautomotive lighting equipment is a safety and styling product for the vehicle whichlargely contributes in the improving aesthetics of the vehicle. The change in modelinvariably results in change in lighting style hence new business for us. These factorsencourage us to remain innovative and enable us to offier new technology products to ourOEM customers. Thus we remain optimistic about the future.
Update on Fire at one portion of Unit-V at Hosur Tamilnadu
During the financial year 2017-18 a major fire occurred on January 25 2018 at oneportion of Unit-V in Hosur Tamilnadu. The assets of the Company are adequately coveredunder insurance. The Company had filed insurance claim with its insurers and also receivedpart claim however final claim is yet to be received. The other necessary information areprovided in the financial statements. The Company had successfully and quickly recoveredthe supplies to its customers with in few days and no major impact or interruption wasfelt to supplies to esteemed OEM customers.
To make the Company future ready with the increasing volume of operations andgeographic expansion as well as with the objective of better control Company is in theprocess of implementation of SAP system across its all units and offices - SAP S/4HANAEnterprise Management.
Your Company has been declaring dividend every year which have steadily increased. TheBoard in its meeting held on March 13 2019 had declared an Interim Dividend at the rateof 80% i.e. Rs. 8/- per equity share of Rs. 10/- each. Further the Board in its meetingheld on May 14 2019 has recommended a Final Dividend at the rate of 40% i.e. Rs. 4 /-per equity share for the financial year ended on March 31 2019. Interim dividend was paidto the shareholders as per their shareholding in the Company as on March 27 2019 (RecordDate). Consequently the total dividend for the financial year ended on March 31 2019including the interim dividend paid during the year amounts to 120% i.e. Rs. 12 /- perequity share of Rs. 10/- each. The Final Dividend payout is subject to approval of membersat the ensuing Annual General Meeting of the Company. The final dividend on equity sharesat the rate of Rs. 4/- per share if approved by the members would involve a cash outflowof Rs. 634.62 lacs including dividend tax. The total dividend at the rate of Rs. 12/- perequity shares including dividend tax for the Financial Year 2018-19 would aggregate Rs.1903.81 lacs including dividend tax.
Statutory disclosures as per provisions of Section 134 of the Companies Act 2013 (the"Act")
1. Extract of Annual Return
Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 as amended an extract of AnnualReturn in Form MGT-9 as on March 31 2019 has been prepared and enclosed as Annexure Iwhich forms an integral part of this report. The extract of Annual Return in Form MGT-9is also available on the website of the Company http:// fiemindustries.com/investors/.
2. Number of meetings of the Board
Meetings of the Board are held on regular intervals to discuss and decide on variousbusiness policies strategies operational financial and other matters. Due to businessexigencies the Board also approve some proposals through resolution passed by circulationfrom time to time.
During the financial year 2018-19 Six (6) Board Meetings were held. One separatemeeting of Independent Directors of the Company was also held during the Financial Year2018-19. Detailed information on the meetings of the Board is included in the report onCorporate Governance which forms an integral part of this Annual Report.
3. Dir ectors Responsibility Statement
In terms of Section 134(3)(c) of the Companies Act 2013 Your Directors state that: a)in the preparation of the Annual Accounts for the year ended March 31 2019 theapplicable accounting standards (IndAs) have been followed along with proper explanationrelating to material departures if any. b) the Directors have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affiairs of theCompany as at end of Financial Year ended March 31 2019 and of the Profit and Loss of theCompany for that period. c) 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. d) the Directors have prepared the Annual Financial Statements on agoing concern basis. e) the Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls areadequate and are operating efficiently and f) the Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and such systems areadequate and operating effiectively. Based on the framework of internal financial controlsand compliance systems established and maintained by the Company work performed by theinternal statutory and secretarial auditors including review of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Companys internal financial controls were adequate andeffiective during financial year 2018-19.
4. Independent Directors Declaration
The Company has received necessary declaration from each of Independent Director of theCompany under Section 149(7) of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) as amendedthat they meet the criteria of independence as laid down under Section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) of the Listing Regulations.
The Board took on record the declaration and confirmation submitted by the IndependentDirectors regarding their meeting the prescribed criteria of independence afterundertaking due assessment of the veracity of the same as required under Regulation 25 ofthe Listing Regulations.
5. Dir ectors Appointment Criteria and Remuneration Policy etc.
The Nomination & Remuneration Committee has formulated criteria for determiningqualifications positive attributes and independence of the Directors as well asRemuneration Policy for the Company as mandated under Section 178(3)/(4) of the Act andRegulation 19 read with Part D of Schedule II of the Listing Regulations.
The above referred Policy is enclosed as Annexure II which forms part of this Report.
6. Auditors & Auditors Reports
(a) S tatutory Auditors
Pursuant to Section 139 of the Companies Act 2013 M/s. V. Sachdeva & AssociatesChartered Accountants (Firm Registration No-004417N) were appointed as Statutory Auditorsof the Company at 28th AGM of the Company held on August 21 2017 for a term of 5 (five)years starting from the conclusion of 28th Annual General Meeting till the conclusion of33rd Annual General Meeting of the Company to be held in the year 2022 subject toratification by the shareholders at every Annual General Meeting. However Ministry ofCorporate Affiairs vide its Notification No. S.O. 1833(E) dated May 7 2018 dispensedwith the requirement of ratification of appointment of Statutory Auditors at every AnnualGeneral Meeting. Accordingly no shareholders resolution required for ratification ofappointment of M/s. V. Sachdeva & Associates Chartered Accountants as the StatutoryAuditors of the Company. Hence no such resolution is moved at the ensuing Annual GeneralMeeting.
(b) S tatutory Auditors Reports
The Auditors Reports given by M/s. V. Sachdeva & Associates StatutoryAuditors on the financial statements of the Company both standalone and consolidated forthe financial year 2018-19 is part of the Annual Report. There has been no qualificationreservation or adverse remark or disclaimer in their Reports.
Further during the year under review the Auditors had not reported any matter ofoffience of fraud under Section 143 (12) of the Act therefore no detail is required to bedisclosed under Section 134 (3)(ca) of the Act.
(c) Secr etarial Auditor
In terms of Section 204 of the Companies Act 2013 the Audit Committee recommended andthe Board of Directors in their meeting held on May 14 2019 has appointed M/s RanjanaGupta & Associates a firm of Company Secretaries in Practice (C.P. No. 9920) as theSecretarial Auditors of the Company to conduct the secretarial audit for the financialyear 2019-20. The Company has received their consent for appointment.
(d) Secr etarial Audit Report
The Secretarial Audit under section 204 of Companies Act 2013 read with Rule 9 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as well as incompliance of Regulation 24A of the Listing Regulations was conducted by M/s Ranjana Gupta& Associates Company Secretaries (C.P. No. 9920) for the financial year 2018-19 . TheReport in Form No MR-3 given by the Secretarial Auditors is annexed as AnnexureIII and forms integral part of this Report. There has been no qualification reservationor adverse remark or disclaimer in their Report; hence no explanation by Directors iswarranted.
In addition to above Annual Secretarial Compliance Report in compliancewith Regulation 24A of Listing Regulations and as per format prescribed under SEBICircular No. CIR/CFD/CMD1/27/2019 dated February
8 2019 was also obtained from M/s Ranjana Gupta & Associates Company Secretaries(C.P. No. 9920) and submitted to stock exchanges i.e. BSE and NSE with in stipulatedperiod of 60 days from end of the financial year. During the year under review theSecretarial Auditors had not reported any matter of offience of fraud under Section 143(12) of the Act therefore no detail is required to be disclosed under Section 134 (3)(ca)of the Act.
(e) Cost Auditor
As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules 2014on the recommendation of the Audit Committee the Board of Directors appointed Mr. KrishanSingh Berk Cost Accountants (Membership No. 2724) as Cost Auditor of the Company for thefinancial year 2019-20. The Company has received their consent that the appointment is inaccordance with the applicable provisions of the Act and rules framed thereunder and theyare not disqualified to be appointed as Cost Auditors. The remuneration of Cost Auditorshas been approved by the Board of Directors on the recommendation of Audit Committee andin terms of the Companies Act 2013 and Rules thereunder. The Notice of the ensuing Annual
General Meeting of the Company will have a requisite resolution for ratification ofremuneration of Cost Auditors by the members of the Company.
The Cost Audit Report for Financial Year 2017-18 was filed to Registrar of Companies onSeptember 20 2018. Further the Cost Audit Report for Financial Year 2018-19 will befiled with the Registrar of Companies in due course.
7. Particulars of Loans Guarantees or Investments under Section 186
Details of the loans given guarantees or securities provided (if any) and investmentsmade by the Company along with their purposes have been disclosed in the financialstatements. Please refer to Note No.48 in the standalone financial statement.
8. Contracts and Arrangements with Related Parties
All contracts/ arrangement/ transactions entered with Related Parties during the yearunder review were on arms length basis and in the ordinary course of business. Dueapprovals from Board and/or Audit Committee were taken under the provisions of Section 188and 177 of the Companies Act 2013 and the Rules made thereunder read with applicable SEBI(LODR) Regulations. Further no approval from shareholder required for any related partytransaction during the year under review. There were no material related partytransactions during the year under review with the Promoters Directors Key ManagerialPersonnel or any other related entity as defined under Regulation 23 of the SEBI (LODR)Regulations read with Related Party Transactions Policy of the Company.Therefore disclosure in form AOC-2 in terms of Section 134(3)(h) of the Companies Act2013 are not required.
Members may refer to Note No.48 to the financial statements which sets out relatedparty disclosures pursuant to Ind AS. Your Company has formulated a policy on relatedparty transactions. In line with the provisions of the SEBI (LODR) (Amendment) Regulation2018 policy on related party transactions is revised by the Board at its meeting held onFebruary 9 2019. The amended policy is also available on Companys website athttps://www.fiemindustries.com. This policy provides the governing framework for reviewand approval of related party transactions.
The web-link of the same has been provided in the Corporate Governance Report.
9. T ransfer to Reserves
Your Company has transferred Rs. 560 lacs to the General Reserve from the profits ofthe Company.
10. Ma terial changes and commitment financial position of the Company / Change in theNature of the Business
There are no material changes and commitments affiecting the financial position of theCompany which has occurred after the close of financial year till the date of this Report.
11. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo
Details of Energy Conservation Technology Absorption Research and Development andForeign Exchange Earnings and outgo as required under Section 134(3)(m) of the Act readwith Rule 8(3) of Companies (Accounts) Rules 2014 are given in Annexure IV to thisReport.
12. Risk Management
Risk management has become an important function of the management as the Company isgrowing with fast pace and operation are expanding at diffierent locations. Companysapproach to address business risks is comprehensive and includes periodic review of suchrisks and a framework for mitigating controls and reporting mechanism of such risks. Asper Listing Regulations the Board of Directors of the Company are responsible forframing implementing and monitoring the Risk Management plans of the Company. The Companyhas defined a "Risk Management Policy" and the same has been approved by theBoard of Directors of the Company. Audit Committee plays a vital role in overseeing riskmanagement. A brief about the risk management of the Company is also given in theManagement Discussion and Analysis Report.
13. Corporate Social Responsibility (CSR)
The Company has set up a dedicated trust namely Fiem Foundation as CSRVehicle for undertaking Companys CSR programmes as per Schedule VII read withCompanies (Corporate Social Responsibility Policy) Rules 2014. Company whole-heartedlysupported the CSR provisions and remained compliant with the statutory requirements.Underprivileged section and supporting them for better life has remained the focus of CSRactivities. Extending the financial support to the poor and needy patients for theirtreatment has remained the major activity under CSR.
Company has also collaborated with The Earth Saviours Foundation whichtakes care the abandoned citizens and run old age home. Your Company always seeks ways tomake a positive impact on the underprivileged strata of the society at large throughvarious CSR activities. In our pursuit of Corporate Social Responsibility as per theCompanies Act 2013 we have selected health cure and supporting thepoor for better life as one of area of intervention and way of serving the humanity.
To help the poor and needy patents we have collaborated with Social Welfare Unitof AIIMS Delhi and disburse the financial assistance amount as and when theyrecommend to help the poor and needy patients suffiering from cancer and otherlife-threatening diseases for getting their treatment done in AIIMS. We are doing thiswork through our CSR Vehicle Fiem Foundation.
Apart from AIIMS Company also provide financial assistance of Rs. 80000/- per monthto The Earth Saviours Foundation a recognized NGO which is running OldAge Home & Rescue Centre to provide the facilities completely free of chargesuch as accommodation medical and every day needs for caring the people who are abandonedsenior citizens deprived mentally disabled bedridden HIV Infected patients on deathbed people dying with hunger on roads and patients suffiering with incurable disease.
Company / Fiem Foundation support various other NGOs as well as extend direct financialsupport to the needy patients in exceptional cases and also conduct other social welfareprogramme like arranging mass marriages for poor girls free eye operation and otheractivities to help underprivileged. Company also providing financial support toKutch Vikas Trust which organizing eye and dental operation camps for poorpatients.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure V of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. For details regarding the CSR Committee pleaserefer the Corporate Governance Report which forms part of Annual Report. The CSR Policyis available on the website of the Company (www.fiemindustries.com/investors).
14. Annual Evaluation of the Performance of the Board Committees and Directors
Performance Evaluation for Board is aimed to use constructively as a mechanism toimprove Boards effiectiveness maximize strengths and tackle weaknesses. It involvesquestionnaires to be filled by every Director about his own performance (self-assessment)performance of Board as whole performance of Chairman and performance of respectiveCommittee(s) where he is a Member.
Initially Nomination & Remuneration Committee carry out the primary evaluation ofevery Directors performance which is subject to next level of evaluation by theBoard and Independent Directors. As per Section 178(2) of the Act the Committee conductthe performance evaluation of every Individual Director. As per Performance Evaluationframework of the Company the evaluation process consists of evaluation on the basis offilled questionaries received from all directors and opinions inputs from allCommittee members and any other information as may be required by the Committee. Theoutcome of Committee in respect of Independent Directors is subject to final evaluation bythe Board. Outcome of Committee in respect of Non-Independent Directors is subject tofinal evaluation by the Independent Directors. Performance evaluation of Board as a wholeas well as Chairman of the Board is also conducted by the Independent Directors.
15. Highlights of performance of subsidiaries associates and joint venture companiesand their contribution to the overall performance of the Company during the period underreview.
At present there are 3 JV Companies (JVC) and 3 Wholly-owned subsidiaries (WOS) aslisted in initial paragraph of this report.
a) Aisan Fiem Automotives India Pvt. Ltd. (AFI):
This JV Company was incorporated on 7th June 2018 in India. Total equity investmentin the JV Company is Rs. 100 Crore wherein Fiem Industries hold 26% Aisan hold 69% andToyota Tsusho hold 5%. The JV Company has established its factory in ELCINA ElectronicManufacturing Cluster in Tapukara Rajasthan for production of Fuel Pump Module. TheCompany yet to start mass production supply to its customer. This being the first year ofits operation hence it has incurred a loss due to initial expenses accordingly profitsof the Fiem Industries impacted.
The Financial highlights of AFI is as under:
(Amount Rs In lacs)
|Particulars ||FY 2018-19 ||FY 2017-18 |
|% of shareholding ||26% ||- |
|Revenue ||10.56 ||- |
|Expenses ||217.92 ||- |
|Profit or loss from continuing ||(105.05) ||- |
|operations || || |
|Total comprehensive income ||(105.05) ||- |
b) Fiem K yowa (HK) Mould Company Limited:
This JV Company was formed in Hong Kong as 50:50 joint venture company with Kyowa Co.Ltd. of Japan. The purpose of setting-up of JV was to engage in the business of high classmoulds / tools for Automotive and other applications. The Company has started itsoperations during FY 2018-19. There is no major investment in this company and thiscompany is providing support for mould development for OEMs. The contribution / or impacton performance of Fiem Industries is negligible.
The Financial highlights of Fiem Kyowa (HK) Mould Company is as under:
(Amount Rs In lacs)
|Particulars ||FY 2018-19 ||FY 2017-18 |
|% of shareholding ||50% ||50% |
|Revenue ||68.55 ||- |
|Expenses ||60.50 ||0.32 |
|Profit or loss from continuing ||8.05 ||(0.32) |
|operations || || |
|Total comprehensive income ||8.05 ||(0.32) |
c) Centr o Ricerche Fiem HorustecH S.r.l. (CRFH) (Joint Venture in Italy):
The Company was set-up in Italy as a 50:50 JV with Horustech Lighting of Italy whichis a Designing Company. The purpose of setting-up of JV was to strengthen R&D andDesigning capabilities of the Company. However due to some financial problems inHorustech group companies the management of both companies i.e. Horustech Lighting andFiem Industries Limited has mutually decided to move ahead to liquidate the CRFH. There isno major investment in this company and this company was providing Design Services to FiemIndustries. The contribution or impact on performance of Fiem Industries is negligible.
The Financial highlights of CRFH is as under:
(Amount Rs In lacs)
|Particulars ||FY 2018-19 ||FY 2017-18 |
|% of shareholding ||50% ||50% |
|Revenue ||99.12 ||104.42 |
|Expenses ||101.23 ||108.28 |
|Profit or loss from containing ||(2.11) ||(3.86) |
|operations || || |
|Total comprehensive income ||(2.11) ||(3.86) |
d) Fiem Industries Japan Co. Ltd. (Wholly-owned Subsidiary):
This WOS was set-up in Japan as an extended arm of the Company for liaison withJapanese customers like Honda Suzuki and Yamaha etc. support in Designing R&D andnew business development. While the parent Company (Fiem) is getting full support in aboveareas the financials of the subsidiary are at very small scale. There is no majorfinancial contribution or impact on performance of Fiem Industries.
Financial Highlights of Fiem Industries Japan Co. Ltd. (Japan)
(Amount Rs In lacs)
| ||FY 2018-19 ||FY 2017-18 |
|% of shareholding ||100% ||100% |
|Revenue ||559.28 ||199.78 |
|Total Income ||559.34 ||199.78 |
|Total expenses ||371.35 ||196.04 |
|Profit/(Loss) before taxation ||187.99 ||3.74 |
|Provision for taxation ||73.26 ||1.17 |
|Profit/ (Loss) after taxation ||114.73 ||2.57 |
e) Fiem Research and Technology S.r.l. (Wholly-Subsidiary in Italy):
During the financial year this Wholly-owned Subsidiary was incorporated in Italy onDecember 17 2018 and a Design Centre set-up under this Company in Turin Italy. Companyis getting Design Services from this WOS on regular basis on Automotive LED Lamps foresteemed OEM customers. This is a wholly-owned subsidiary and providing Design Services toFiem Industries only so working like an extended arm of Fiem Industries for DesignServices.
Financial Highlights of Fiem Research and Technology S.r.l (Italy)
(Amount Rs In lacs)
| ||FY 2018-19 |
|% of shareholding ||100% |
|Revenue ||55.94 |
|Total expenses ||54.70 |
|Profit/(Loss) before taxation ||1.24 |
|Provision for taxation ||0.32 |
|Profit/ (Loss) after taxation ||0.92 |
f) Fiem ( Thai) Design & Technology Co. Ltd.:
This Wholly-owned Subsidiary company was formed in Bangkok Thailand on June 15 2017for the purpose of setting up a Design Centre for Designing Development and R&Dsupport to Fiem Industries Limited. This company has not started its operations during FY2017-18 and 2018-19. Meantime Fiem Industries has established Design Centre in Italy andManagement of Fiem is of the view that in changing scenario decision of setting-up DesignCentre in Bangkok does not hold good and now this company would be closed by completingthe formalities as per Thai laws.
The financial position of the subsidiaries and Joint Venture Companies is also given inAOC-1 in the financial statements.
16. Other statutory disclosures as required under Rule 8(5) of the Companies (Accounts)Rules 2014 i) Financial summary/ highlights of the Company are already mentioned in thebeginning of the report. ii) Ther e is no change in the nature of business of Company.iii) Change in Directors and Key Managerial Personnel:
Pursuant to provisions of Section 152 of the Companies Act 2013 and inaccordance with provisions of Articles of Association of the Company -owned
Mr. Joga Shyam Sunder Rao and Mr. Kashi Ram Yadav Whole-time Directors of the Companyliable to retire by rotation and being eligible have offiered themselves forre-appointment and they are not disqualified under Section 164(2) of the Companies Act2013.
The current tenure of 5 Independent Directors namely Mr. S.K. Jain Mr. IqbalSingh Mr. V.K. Malhotra Mr. Jawahar Thakur and Mr. Ashok Kumar Sharma is completing onensuing Annual General meeting and all these are eligible for re-appointment for one moreterm of 5 years. Current tenure of Mr. Mohan Bir Sahni is completing on August 08 2019and he is also eligible for one more term of 5 years. All these Independent Directors willbe proposed for re-appointment in ensuing Annual General Meeting.
The details of Directors being proposed for appointment/ re-appointment asrequired under the Listing Regulations will be in the Notice convening the ensuing AnnualGeneral Meeting of the Company.
Mr . J.K. Jain Chairman & Managing Director; Mr. O. P. Gupta ChiefFinancial Officer and Mr. Arvind K. Chauhan Company Secretary are the Key ManagerialPersonnel of the Company within the meaning of Section 203 of the Act.
None of the Key Managerial Personnel has resigned or appointed during the yearunder review. iv) During the financial year one Wholly-owned Subsidiary Fiem Research andTechnology S.r.l. formed in Italy and one Joint Venture Company Aisan Fiem AutomotivesIndia Pvt. Ltd. incorporated in India as Joint Venture Company. The details of thesecompanies already provided in the preceding paragraphs. v) Details relating to Deposits:The Company has not accepted any Deposit from public within the meaning of the Companies(Acceptance of Deposit) Rules 1975 or Chapter V of the Companies Act 2013 and as suchthere was no outstanding as on the date of the balance sheet on account of principal orinterest on deposits from public. vi) No significant and material orders were passed byany Regulator or court or tribunal impacting the going concern status and Companysoperations in future. vii) Details in respect of adequacy of internal financial controlswith reference to the Financial Statement: The Company has in place adequate internalfinancial controls which are commensurate to size and operations of the Company. Duringthe year no area of concern continuing failure or major weakness was observed. viii) Itis c onfirmed that maintenance of cost specified by the Central Government undersub-section (1) of section 148 of the Companies Act 2013 is required by the Company andaccordingly such accounts and records are made and maintained. ix) It is c onfirmed thatthat the Company has with provisions relating to the constitution of Internal ComplaintsCommittee (s) under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. x) Other disclosures required under provisions of the CompaniesAct 2013 and the Listing Regulations as may be applicable:
As per provisions of Section 177(8) of the Act composition of the AuditCommittee has been disclosed under Corporate Governance Report. The Board during the yearunder review had accepted all the recommendation made to it by the Audit Committee.
Establishment of vigil mechanism as per provision of Section 177(10) of the Act:Company has already at place a vigil mechanism namely Whistle Blower Policy.The details of the same are reported under Corporate Governance Report.
The details about the ratio of remuneration of director to the medianremuneration of the employees of the Company pursuant to Section 197(12) of the Act readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended is provided in Annexure VI forming part of this report.
The statement containing names and other details of top 10 employees in termsof remuneration drawn and the particulars of employees as required under Section 197(12)of the Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended is provided in Annexure VII forming part ofthis report.
Disclosure as required under Section 62(1)(b) of the Act read with Sub-rule 9 ofRule 12 of the Companies (Share and Capital Debentures) Rules 2014 are not applicableas during the year no shares were issued under ESOS / ESOP or under sweat equity scheme.
Disclosure as required under Section 43(a)(ii) of the Act read with Sub-rule 4of Rule 4 of the Companies (Share and Capital Debentures) Rules 2014 are not applicableas during the year no equity shares with as diffierential rights as to dividend voting orotherwise were issued.
Corporate Governance Report and Management Discussion & Analysis Report
Pursuant to Listing Regulations Management Discussion & complied Analysis ReportReport on Corporate Governance Certificate on Corporate Governance issued by PracticingCompany Secretary and the declaration by the Chairman & Managing Director regardingaffirmation for compliance with the Companys Code of Conduct forms part of theAnnual Report.
Consolidated Financial Statements
In accordance with the Companies Act 2013 ("the Act") read with Ind AS theaudited consolidated financial statements are provided in the Annual Report. The accountsof Wholly-owned Subsidiary companies and JV Companies are consolidated with the accountsof the Company.
The Board of Directors sincerely acknowledge the patronage of valued OEM customers andwould like to place on record appreciation for employees of the Company for their sincereworking during all times. The Directors are also thankful to the shareholders of theCompany for the trust reposed in the Company. Directors would also like to thank all otherstakeholders banks dealers and vendors for their co-operation each and support to theCompany.
| ||For and on behalf of the Board of |
| ||Fiem Industries Limited |
| ||Sd/- |
| ||J.K. Jain |
|Place : Rai Sonepat (HR.) ||Chairman & Managing Director |
|Date : May 14 2019 ||(DIN: 00013356) |