Your Directors have pleasure in presenting their Twenty Ninth Annual Report of yourCompany together with the Audited Accounts for the year ended March 31 2021.
Your Company's performance during the year as compared with that during the previousyear is summarized below:
|Particulars ||2020-21 ||2019-20 |
|Manufacturing Sales ||53286 ||53439 |
|Add: Other Income ||954 ||1168 |
|total Income ||54240 ||54607 |
|Less: || || |
|(i) Materials & Manufacturing Expenses ||32031 ||31315 |
|(ii) Value Addition Cost ||14496 ||15793 |
|Profit before Depreciation Amortization ||7713 ||7499 |
|Less: Depreciation & Amortization Expenses ||4468 ||4253 |
|Profit before Tax ||3245 ||3246 |
Your Company's Revenues for the year stood at Rs.53286 Lakhs as against Rs.53439Lakhs for previous year in spite of operations impacted due to Covid-19 lock-downrestrictions in first quarter. Operating Profit before Depreciation & Amortizationamounted to Rs.7713 Lakhs as against Rs.7499 Lakhs for previous year. Profit before Taxamounted to Rs.3245 Lakhs as against Rs.3246 Lakhs for previous year.
Given the un-certainties caused by Pandemic and need for plough back profits into theBusiness your Directors are pleased to recommend a dividend of Rs.1.50/- per Equity Shareon Face value of Rs.10/- each for the year ended March 31 2021 subject to the approval ofthe members at 29th Annual General Meeting ("AGM").
Your Company had adopted the Dividend Distribution Policy and the same was hosted onthe website of the Company at: http://www.igarashimotors.com/uploads/investor/
pdf/14788383387IMIL-Dividend Distribution Policv.pdf
The Board has not recommended any transfer to general reserve from the profits of theyear under review.
TRANSFER OF UNPAID & UNCLAIMED DIVIDEND AND UNCLAIMED SHARES TO IEPF
As per the provisions of the Companies Act 2013 read with Investor Education andProtection Fund (Accounting Audit Transfer and Refund) Rules 2016 ('IEPF Rules') allunclaimed dividends are required to be transferred by the Company to the IEPF aftercompletion of 7 years. Further according to IEPF Rules the shares on which dividend hasnot been claimed by the Shareholders for seven consecutive years or more shall betransferred to the demat account of IEPF Authority. The details relating to amount ofdividend FY2013-14 (Interim) transferred to IEPF and such shares on which dividends wereun-claimed for seven consecutive years to IEPF are available on the website of the Companyat http://www.igarashimotors.com/investor-list. php?invescatid=22
The Reserves at the end of the year March 31 2021 is at Rs.43932 Lakhs as against theTotal Reserves of Rs.42285 Lakhs as at March 31 2020.
No material changes or commitments have occurred between the end of the Financial Yearand the date of this Report which affect the financial statements of the Company inrespect of the reporting year.
INDIAN ACCOUNTING STANDARDS
Pursuant to The Companies (Indian Accounting Standards) Rules 2015 the financialstatements of the Company for the financial year 2020-21 have been prepared as per IndAS.
COVID-19- PANDEMIC - UPDATE
A major part of the period under review was impacted on account of Covid-19 pandemic.This was mainly on account of disruption in supply chain capacity underutilisationlogistics-related issues substantial ramp-up costs including additional costs required toensure the health and safety of all Employees.
Your Company's Management Task Force comprising key functions was set up toconstantly review the rapidly changing situation to ensure that measures are continuouslyimplemented to keep employees safe (including organising vaccination to eligible employeesaged > 45 years) during the Pandemic Period while also attempting to ensure businesscontinuity.
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES
Your Company has no Subsidiary/ Associate / Joint Venture Companies as on March 312021. Report under Form AOC-1 is annexed to this report.
During the year your Company disinvested entire 9.20% stake held in Bosch ElectricalDrives India Private Limited (BEDPL) in favour of Robert Bosch Investment Netherland B.VNetherlands. On April 07 2021 your Company had received Sale Consideration of Rs.33.70Lakhs.
During the year under review your Company has not invited or accepted any depositsfrom the public under Section 76 of the Companies Act 2013 and Rules made there under.
EMPLOYEE STOCK OPTION SCHEME
At 25th Annual General Meeting held on August 02 2017 the Shareholders approvedEmployee Stock Option Scheme ('The Igarashi Motors Employees Stock Option Scheme 2017')covering 600000 equity shares. There have been no material changes to the Scheme duringthe year under review. The relevant disclosures pursuant to Rule 12 (9) of the Companies(Share Capital and Debentures) Rules 2014 and Regulation 14 of SEBI (Share Based EmployeeBenefits) Regulations 2014 is forming part of Annual report.
Your Company had received a certificate from the Statutory Auditors of the Company thatESOP Scheme 2017 was implemented in accordance with Regulation 13 of the SEBI (Share BasedEmployee Benefits) Regulations 2014 and the resolution(s) passed by the Members of theCompany. The certificate is made available for inspection by Members of the Company.
PAID-UP SHARE CAPITAL
Your Company's Paid-up equity share capital is Rs.3147.50 Lakhs as on March 31 2021.
OUT-GOING PROMOTERS- RE-CLASSIFICATION
Pursuant to the approval of the Board of Directors on November 14 2019 andShareholders on
February 14 2020 your Company submitted application with Stock Exchanges (NSE andBSE) for reclassification of Mr. P Mukund and MAPE Securities Private Limited("Outgoing promoters") for re-classification from "Promoter Category"to "Public Category" as per Regulation 31A Listing Regulations. Subsequentlyyour Company had received approval from Stock Exchanges for re-classification of OutgoingPromoters as Public Category from October 07 2020. The outgoing Promoters were holdingNIL shares in the Company. Mr. P Mukund has not been associated with the Company asAdvisor for Business Development due his personal passion.
During the year Mr. Keiichi Igarashi (DIN: 00356779) re-appointed as Director at 28thAnnual General Meeting.
Mr. K K Nohria (DIN : 00060015) resigned as Chairman & Non-Executive Director fromJune 05 2020 after successful association with the Company over two decades. At theunanimous request of your Company's Board Mr. K K Nohria accepted to be designated asChairman Emeritus for continuing his invaluable association with your Company.
Post approval of shareholders at 28th Annual General Meeting ('AGM') Mr. K K Nohriawas appointed as Chairman Emeritus from October 01 2020. Consequently Mr. K K Nohria'scontinued his guidance and support to your Company. The Board sincerely places on recordthe appreciation of the leadership and contributions made by Mr. K K Nohria.
Mr. Hemant M Nerurkar (DIN: 00265887) was appointed as Chairman from June 05 2020.
During the year Mr. Hemant M Nerurkar (DIN: 00265887) and Mr. S Radhakrishnan (DIN:01246033) ceased to be Independent Directors from July 30 2020 upon completion of theirsecond term.
The Board places on record the appreciation for the valuable services support andimportant contributions rendered by Mr. S Radhakrishnan during his tenure as Director ofthe Company.
Based on the Nomination & Remuneration Committee recommendation the Board ofDirectors at their meeting held on July 16 2020 and the approval shareholders at 28th AGMby way of Special Resolution Mr. Hemant M Nerurkar was appointed as Non-ExecutiveNon-Independent Director from July 30 2020.
During the year Mrs. S M Vinodhini (DIN: 08719578) was appointed as Independent WomanDirector for five years not liable to retire by rotation from April 01 2020 and Mr. LRamkumar (DIN: 00090089) was appointed as Independent Director for five years from July30 2020.
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 SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ('ListingRegulations').
The details of familiarization programmes to Independent Directors is put up on thewebsite of the Company at the link: http://www.igarashimotors.com/investor-list.
RETIREMENT BY ROTATION
Mrs. Eva Maria Rosa Schork (DIN 07159550) Director retires by rotation at forthcoming29th Annual General Meeting and being eligible offers herself for re-appointment. Thebrief resume and other details as required under the Listing Regulations are provided inthe Notice of the 29th Annual General Meeting of the Company.
EVALUATION OF THE BOARD'S PERFORMANCE
Your Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the non-executive directors and executive directors. Pursuant to theprovisions of Companies Act 2013 and Regulation 25 of the Listing Regulations the Boardhas carried out annual performance evaluation of
its own performance the directors individually as well the evaluation of the workingof its Audit Nomination & Remuneration and Stakeholder Committee for the financialyear 2020-21. Each Board member completed a questionnaire providing feedback on thefunctioning and overall engagement of the Board and its committees on various parameterssuch as the composition execution of specific duties quality quantity and timelines offlow of information deliberations at the meeting etc.. Besides this one -on-one meetingof the individual directors with the Chairman of the Board was also conducted as a part ofself-appraisal and peer group evaluation. The Directors were also asked to provide theirvaluable feedback and suggestions about the over all functioning of the Board and itscommittees.
NUMBER OF MEETINGS OF THE BOARD
During the year Five Board Meetings were held on June 04 2020 July 16 2020 August04 2020 November 11 2020 and February 09 2021. The particulars of Directors theirattendance during the financial year 2020-2021 has been disclosed in the CorporateGovernance Report forming part of this Annual Report.
For details of the Committees of the Board please refer to the Corporate GovernanceReport.
Your Company has an Audit Committee pursuant to the requirements of the Act read withRules framed thereunder and SEBI (LODR) Regulations 2015. The details are relating to thesame are given in the report on Corporate Governance forming part of this Report. DuringFY2020-21 the recommendations of Audit Committee were duly accepted by the Board.
In compliance of Section 134 (5) of the Companies Act 2013 your directors on thebasis of information made available to them confirm the following:
a) In the preparation of the annual accounts for the financial year ended March 312021 the applicable Accounting Standards have been followed with explanation relating tomaterial departures if any;
b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give true and fair viewof the state of affairs of the Company as at March 31 2021 and of the profit of theCompany for that period;
c) Proper care has been taken for maintenance of adequate accounting for safe guardingthe assets of the Company and detecting fraud and other irregularities;
d) They have laid down Internal Financial Controls to be followed by the Company andthe Audit Committee of the Board of Directors shall ensure that the internal control isadequate and robust;
e) The annual accounts are prepared on a going concern basis;
f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DEMATERIALISATION OF SHARES
99.31% of the Company's paid up Equity Share Capital is in dematerialized form as onMarch 31 2021 and balance 0.69% is in physical form. Your Company has already sent threereminders to all concerned shareholders advising them to convert physical shares intodemat form. The Company's Registrars are Cameo Corporate Services Limited No.1Subramanian Building Club House Road Chennai 600 002.
During the year under view CARE re-affirmed credit ratings of CARE A+ for long termdebt and CARE A1+ for short term debt.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION
The information required to be furnished pursuant to Section 134(3) (m) of theCompanies Act 2013 is appended hereto and forms part of this Report.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The details of expenditure and earnings in foreign currency are given as an annexure tothis Report.
PARTICULARS OF LOANS & INVESTMENTS BY COMPANY
Details of loans and investments by the Company covered under Section 186 of theCompanies Act 2013 form part of the notes to the financial statements provided in thisreport.
RELATED PARTY TRANSACTIONS
All the related party transactions entered during the year were in ordinary course ofbusiness and on arm's length basis. Your Company obtained shareholdersRs.approval by wayof Postal Ballots on February 10 2018 & November 06
2019 and also at 28th AGM held on September 17 2020 for material related partytransactions though such transactions being entered during ordinary course of business andon arm's length basis as required under Listing Regulations.
Your Company's Policy on Related Party Transactions which can be accessed throughweblink : http://www.igarashimotors. com/investor-list.php?invescatid=18
Your Company presents a statement of all related party transactions before the AuditCommittee. Details of such transactions are given in the accompanying financialstatements. Disclosure of Related Party transaction (include details of the transactionswith promoter/promoter group is annexed with the report as per the format prescribed).
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
Your Company adopted Policy on Prevention Prohibition and Redressal of SexualHarassment and Non-discrimination at Work Place in line with the requirements of theSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. A copy of Policy is made available on the Company's website.
All employees (permanent contractual temporary trainees) are covered under thispolicy. Your Company had arranged external expert consultant trainings on Compliance ofPolicy to all the employees and service providers. Your Company also launched awarenesscampaigns on said Policy.
An Internal Complaints Committee (ICC) was set up to redress complaints receivedregarding sexual harassment and discrimination at work place.
During the year ended March 31 2021 the ICC has received no complaints pertaining tosexual harassment / discrimination at work place.
KEY MANAGERIAL PERSONNEL
Pursuant to Section 203 of the Companies Act 2013 the Key Managerial Personnel of theCompany are Mr. R Chandrasekaran (DIN: 00012643) Managing
Director Mr. S Vivekchandranth Chief Financial Officer and Mr. P Dinakara BabuCompany Secretary (ICSI Membership No. A14812).
During the year there are no changes in the Key Managerial Personnel.
M/s. B S R & Co LL.P Chartered Accountants (Firm Registration No.101248W/W-100022) were appointed by the Shareholders at the 25th Annual General Meetingheld on August 02 2017 as Statutory Auditors for a term of five consecutive years(FY2017-18 to FY2021-22) to hold office until conclusion of 30th Annual General Meeting.The appointment is however subject to ratification by members at every Annual GeneralMeeting in accordance with Section 139 of the Companies Act 2013 read with applicablerules made thereunder.
Pursuant to the amendment to Section 139 of the Companies Act 2013 effective from May07 2018 ratification by shareholders every year for the appointment of StatutoryAuditors is no longer required and accordingly the Notice of ensuing 29th Annual GeneralMeeting does not include the proposal for seeking shareholdersRs.approval for ratificationof Statutory Auditors appointment.
M/s. B S R & Co LL.P Chartered Accountants has furnished a certificate of theireligibility and consent under section 139 and 141 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 for their continuance as the Auditors of thecompany for the financial year 2021-22.
In terms of the Listing Regulations the Auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the ICAI.
No qualification adverse remarks or disclaimer made by the Statutory Auditors withregard to the financial statements for the financial year 2020-21.
The Statutory Auditors of the Company have not reported any fraud as specified underSection 143(12) of the Companies Act 2013.
There have been no instances of fraud reported by above mentioned Auditors underSection 143(12) of the Act and Rules framed thereunder either to the Company or to theCentral Government during FY 2020-21.
SECRETARIAL AUDITOR SECRETARIAL AUDIT REPORT & OTHER CERTIFICATES
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 Mr. C Prabhakar Partner BP & Associates Company Secretaries (ICSIMembership No.: A30433; C.P No. 11033) to undertake the secretarial
audit of the Company for the year ended March 31 2021. Your Company has complied withthe Secretarial Standards issued by the Institute of Company Secretaries of India on BoardMeetings and Annual General Meetings.
The Secretarial Audit Report is given in Annexure to this Report. The Report does notcontain any qualification reservation or adverse remark.
Also the Secretarial Audit Report issued under Regulation 24A of SEBI (LODR)Regulations is given in Annexure to this Report.
As required under SEBI (LODR) Regulations Your Company has obtained a certificate fromthe Practising Company Secretary that none of the Directors of the Board of the Companyhave been debarred or disqualified from being appointed or continuing as Directors by MCA/Statutory Authorities. The said Certificate is forming part of this Report.
As your Company has been operating from MEPZ-Special Economic Zone and having majorrevenue from exports appointment of Cost Auditor is exempted under Section 148 of theCompanies Act 2013 read with Companies (Cost Records and Audit) Rules 2014. Your Companyhas been maintaining such accounts and cost records as required under the Rules.
ANNUAL RETURN AND EXTRACT OF THE ANNUAL RETURN
A copy of Annual Return (Form MGT-7) of the Company has been placed on the website ofthe Company at http:// www.igarashimotors.com/investor-list.php?invescatid=17
Relevant extract of annual return in Form MGT-9 as required under Section 92(3) of theAct read with Rule 12 of Companies (Management and Administration) Rules 2014 (amended)to be filed with the Registrar of Companies for financial year 2020-21 is given inAnnexure to this Report.
INTERNAL CONTROL SYSTEMS
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management.
Internal Audit is carried out in a programmed way and follow up actions were taken forall audit observations. Your Company's Statutory Auditors have in their report confirmedthe adequacy of the internal control procedures.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company has constituted a CSR Committee. The CSR Committee comprises offour members and the Chairman of Board is heading the Committee. CSR Committee of theBoard has developed a CSR Policy. The CSR Committee met one time during the year on August04 2020.The details of role and functioning of the Committee are given in Annexure tothis Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report of the Company for year under review asrequired under Regulation 17 of Listing Regulations is given as a separate Statement inthe Annual Report.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
Your Company has adopted a Risk Management Policy and constituted a Risk ManagementCommittee for monitoring the same. The Company has been addressing various risks impactingthe Company which is provided elsewhere in this Annual Report in Management Discussion andAnalysis Report.
BUSINESS RESPONSIBILITY REPORT (BRR)
As required under Regulation 34(2)(f) of Listing Regulations your Company has providedBRR for the year ended March 31 2021 as Annexure to this report.
REMUNERATION OF KEY MANAGERIAL PERSONNEL
The information required pursuant to Section 197 read with Rule 5 (1) of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of thestatement of particulars Appointment and Remuneration of Key Managerial Personnel isforming part of this Report.
The remuneration paid to all Key Managerial Personnel was in accordance withremuneration policy adopted by the Company.
STATEMENT ON EMPLOYEE REMUNERATION
The information required pursuant to Section 136(1) of the Companies Act 2013 theReport of the Board of Directors is being sent to all the shareholders of the Companyexcluding statement prescribed under Rule 5 of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The Statement will be sent by e-mail to theShareholders if such request is mailed to the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and Company's operations.
Your Company has 667 number of permanent employees on the rolls of the Company as onMarch 312021. The Board of Directors wishes to place on record their sincere appreciationto all the employees of the Company for their dedication commitment and loyalty to theCompany.
A Report on Corporate Governance along with a certificate from the Auditors of theCompany regarding compliance of the requirements of Corporate Governance pursuant toListing Regulations is annexed hereto.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism established Whistle Blower Policy as per therequirement of the Companies Act 2013 and the Listing Regulations to enable allemployees and the directors to report in good faith any violation of the Policy. The AuditCommittee of the Board oversees the functioning of Whistle Blower Policy. Your Company hasdisclosed the details of Whistle Blower policy on its website: http://www.igarashimotors.com/investor-list.php?invescatid=18
PREVENTION OF INSIDER TRADING
Your Company has adopted a code of conduct for prevention of "InsiderTrading" as mandated by the SEBI and same is available on the website of the Company:http:// www.igarashimotors.com/investor-list.php?invescatid=18. Your Company's AuditCommittee monitors implementation of said Policy.
CODE OF CONDUCT
Your Company has laid down a Code of Conduct Policy which can be accessed on theCompany's website: http:// www.igarashimotors.com/investor-list.php?invescatid=18
The shares of your Company continued to be listed at National Stock Exchange Limitedand Bombay Stock Exchange Limited. Listing fee has already been paid for the financialyear 2020-21.
29TH ANNUAL GENERAL MEETING THROUGH VIDEO CONFERENCE
As per Ministry of Corporate Affairs Circular Nos. 14/2020 dated April 08 202017/2020 dated April 13 2020 20/2020 dated May 05 2020 02/2021 dated January 13 2021and SEBI Circulars No. SEBI/HO/CFD/CMD2/CIR/P/2020/79 dated May 12 2020 S E B I/H O/C FD/C M D2/CIR/P/2021/11 dated January 15 2021 regarding COVID-19 Pandemic and relaxations(e.g VC no physical report) thereon your Company made arrangement to conduct 29th AGMthrough Video Conference / Other Audio Visual Means for which necessary information hasbeen given separately in Notice of 29th AGM.
Also your Company will be complying with said Circulars by sending 29th Annual Reportalong with Annexures by way of e-mail to the shareholders as such no physical copies shallbe distributed. Those Shareholders whose email IDs are not registered have to registertheir email ID with Registrar & Share Transfer Agent (RTA) of the Company.
The Board wishes to place on record its sincere appreciation of the efforts put-in byyour Company's employees for achieving encouraging results under difficult conditions. TheBoard also wishes to thank for the continued support of the relevant GovernmentAuthorities Promoters Shareholders Suppliers Customers and other business associatesfor their strong support.
For and on behalf of the Board of Directors
Hemant M Nerurkar
Date: May 25 2021