Your Directors with immense pleasure present the 37th Annual Report of Lumax AutoTechnologies Limited ("Company") on the business and operations together withAudited Balance Sheet and Statement of Profit & Loss of your Company for the yearended March 31 2018.
The Key highlights of Financial Performance of your Company for the year along withprevious year figures are as follows:
|I. Financial Performance || || || || |
| || || || ||(RsIn Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue from Operations ||60750.77 ||52149.66 ||113851.32 ||103969.72 |
|Other Income ||1499.47 ||387.54 ||1524.30 ||1049.93 |
|Total Income ||62250.24 ||52537.20 ||115375.62 ||105019.65 |
|Total Expenses ||57966.73 ||51460.86 ||106500.65 ||99398.87 |
|Profit Before Tax Share in Net Profit of associate ||4283.51 ||1076.34 ||8874.97 ||5620.78 |
|Exceptional Item || || || || |
|Profit of Associate ||- ||- ||(61.53) ||292.45 |
|Exceptional items ||(227.50) ||(322.41) ||(227.50) ||(319.11) |
|Profit before Tax ||4056.01 ||753.93 ||8585.94 ||5594.12 |
|Tax Expenses ||1134.24 ||214.85 ||2874.71 ||1586.19 |
|Minority Interest ||- ||- ||836.86 ||558.12 |
|Profit for the period (After Tax and Minority Interest) ||2921.77 ||539.08 ||4874.37 ||3449.87 |
|Other Comprehensive Income ||4060.13 ||5010.24 ||4062.27 ||5011.57 |
|Equity holders of the parent ||- ||- ||4059.02 ||5007.99 |
|Non- controlling interests ||- ||- ||3.25 ||3.58 |
|Total Comprehensive Income ||6981.90 ||5549.32 ||9773.50 ||9019.50 |
|Equity holders of the parent ||- ||- ||8933.39 ||8457.80 |
|Non- controlling interests ||- ||- ||840.11 ||561.70 |
|Paid-up Equity Share Capital ||1363.15 ||1363.15 ||1363.15 ||1363.15 |
|Earning Per Share (EPS) (not annualized) ||21.43 ||3.96 ||35.76 ||25.31 |
|Basic/Diluted EPS || || || || |
Note: Financial Results for the year ended March 31 2018 are prepared first time inaccordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of TheCompanies Act 2013 and previous year figures for the year ended March 31 2017 havebeen regrouped / re-casted in accordance with Ind AS to make them comparable.
a. Company Performance
The Indian Automobile Industry being one of the largest in the world and accounting for7.1 percent of the country's Gross Domestic Product (GDP) is presently the second largesttwo-wheeler manufacturer and the fifth largest commercial vehicle manufacturer in theworld.
During the Fiscal year 2017-18 the Indian Automobile Industry registered a productiongrowth of 14.78 percent as compared to 5.41 percent over the same period last year. Inthis backdrop the Auto Component Industry posted an encouraging performance and grew by14.30 percent as compared to the previous year. Currently the Indian Auto ComponentIndustry is contributing more than half of the average exports achieved by the AutomotiveIndustry.
The total production by Automobile Industry for the financial year 2017-18 was 290.73lacs vehicles and the contribution of each category of vehicles into the same is depictedgraphically below:
In the above background and during the year under review the performance of yourCompany is summarized as under:
On standalone Basis the Company registered growth of 24 percent in Revenue fromOperations which is over and above the Industry growth. For the Financial Year 2017-18 theProfit Before Tax (PBT) stood at Rs 4056.01 Lacs and Profit After Tax (PAT) was recordedat Rs 2921.77 Lacs witnessing a significant growth.
The growth was led by increased volumes of PCB manufacturing business plastic mouldedparts and sheet metal components of major Customers of the Company i.e. Bajaj Auto Limited(BAL) Honda Motorcycles & Scooters India Ltd. (HMSI) and Maruti Suzuki India Limited(MSIL).
On Consolidated Basis the Company achieved growth of 15 percent in Revenue fromOperations. For the Financial Year 2017-18 the Profit Before Tax (PBT) stood at Rs8585.94 Lacs witnessing a significant growth of 53 percent. The Profit After Tax (PAT)after Minority Interest was recorded at Rs 4874.37 Lacs recording the growth by 41percent. The Basic and Diluted Earnings per share also grew by 41 percent. b. Dividend
Your Company maintained its commitment in delivering long-term sustainable growth andattractive Dividend to its Shareholders. The Board of Directors at their Meeting held onMay 28 2018 had approved payment of Dividend at the rate of 100 percent on Equity ShareCapital of the Company which is subject to the approval of the Shareholders at the ensuingAnnual General Meeting (AGM).
The proposed dividend will translate into Dividend at the rate of Rs 2/- (Rupees Twoonly) per Equity Share of the face value of Rs 2/- (Rupees Two only) each after Sub division of existing Equity Shares of the Company in the ratio of 1:5 as on RecordDate i.e. June 08 2018.
The total amount of Dividend proposed to be distributed amounts to Rs 1410.01 Lacs(Including Dividend Distribution Tax) as against Rs 640.68 Lacs in the previous year. TheDividend pay - out ratio comes to 48.26 percent.
c. Subsidiaries and Associate Companies & Consolidated Financial Statements
As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (hereinafter referred to as "ListingRegulations") applicable provisions of the Companies Act 2013 and Ind AS 110 theAudited Consolidated Financial Statements are provided in the Annual Report of theCompany.
As on March 31 2018 the Company comprised of seven (7) Subsidiaries; five (5) beingdirect Subsidiaries & two (2) are Step-down Subsidiary and two (2) AssociatesCompanies. The details of the Subsidiaries and Associates along with highlights of theirperformance are as follows:
Lumax DK Auto Industries Limited (LDK)
LDK is a 100 percent Subsidiary of the Company is engaged in manufacturing of lightsand plastic modules. The Revenue of the Company stood at Rs 34991.07 Lacs.
Lumax Management Services Private Limited (LMS)
LMS is a 100 percent Subsidiary of Company. The Company had emerged as a full-timeservice provider in form of Corporate Support Services to its Group Companies. The Revenueof the Company Stood at Rs 2472.04 Lacs as on March 31 2018.
Lumax Integrated Ventures Private Limited (LIVE)
LIVE is a 100 percent Subsidiary of the Company. The Company was established formanufacturing of Non - Automotive Parts. LIVE has two (2) Subsidiaries Lumax EnergySolutions Private Limited and Velomax Mobility Private Limited. The Consolidated turnoverof the LIVE for the Financial Year 2017 -18 stands for Rs 197.95 Lacs.
Lumax Mannoh Allied Technologies Limited (LMAT)
LMAT is 55 percent Subsidiary formed in collaboration with Mannoh Industrial Co. Ltd.Japan. The entity manufactures Gear Shifters and Parking Brakes. The Company has a marketleadership position within this segment with approximately 60 percent market share inIndia. During the year the Company received new order for supplying the Gear Shifter toToyota Yaris. The Company's Revenue stood at Rs 13586.18 Lacs. The Company has also setup new Manufacturing facility at Surender Nagar Gujarat for supplying Gear Shifter toSuzuki Motors.
Lumax Cornaglia Auto Technologies Private Limited (LCAT)
LCAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited (LATL) andCornaglia S.p.A. Italy having management control by LATL. The JV Company manufactures airintake systems as well as other plastics injection blow moulded parts. The Company'sRevenue stood at Rs 4877.34 Lacs.
Lumax Gill Austem Auto Technologies Private Limited (LGAT)
LGAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited and Gill-AustemLLP USA. The JV Company manufactures seat frames and seat mechanisms. The current yearRevenue stood at Rs 6286.01 Lacs.
Lumax Sipal Engineering Private Limited is an Associate Company of Lumax Integratedventures Private Limited.
In accordance with the provisions of Section 129(3) of the Companies Act 2013 a reporton performance and financial position of Subsidiaries Associate Companies are presentedin notes to Consolidated Financial Statements.
Further in accordance with the provisions of Section 136 (1) of the Companies Act2013 the Audited Financial
Statements including the Consolidated Financial Statements and related information andaudited accounts of subsidiaries are available on the website of the Company i.e.www.lumaxautotech.com and the same shall also be made available for inspection atregistered office of the Company during the working hours.
II. State of Company's Affairs
During the year under review the Company underwent through a series of criticaldevelopments and changes influencing its operations business activities corporategovernance practices etc. Yet it continued to reinforce its position in the market andderived sustainable benefit due to its strong foundation and its deeper integration withits subsidiaries and joint ventures.
In the course of the year the Company unveiled its New Brand Identity on November 082017 the new refreshed logo and the visual brand identity epitomises our journey andshall serve as the torchbearer of future growth and aspirations it also rearticulated theGroup Purpose and Vision.
The year 2017-18 was marked by the most ambitious tax reform since Independence i.e.Implementation of Goods and Services Tax (GST) and the Company continued to maintain itsmomentum in managing it efficiently and effectively. Another major development confrontingthe Company was transition to Indian Accounting Standards (Ind AS) from Indian GAAP whichwas smoothly implemented by the Company and there were no significant impacts on FinancialStatements of the Company.
During the year the Company had sold its bulbs and wire manufacturing unit situated inKale-Amb Himachal Pradesh to one of its Group Company viz. Lumax Ancillary Limited onSlump-Sale basis. The said unit was expected to contribute towards the growth ofAftermarket Division of the Company through supply of auto bulbs and electricalcomponents. However in view of insignificant contribution of the said unit towards theAftermarket Division and for the overall benefit of the Company it was considered prudentto sell this unit.
The 2nd Quarter of the Fiscal Year was quiet eventful for the Company it hadestablished two (2) Joint Ventures with Fransisco Albero S.A.U (FAE) Spain and IturanLocation and Control Limited Israel:
As the Country takes a leap from BS-IV to BS-VI emission norms the huge demand forOxygen Sensors is projected. Thus with a futuristic vision and much before the mandatoryenforcement of BS-VI a Joint Venture with Francisco Albero S.A.U. (FAE) Spain wasentered into to manufacture and supply Oxygen Sensors for Two-Wheeler Industry. Theproduct is expected to significantly enhance the fuel efficiency of a vehicle and shallplay a critical role in aligning with the BS-VI emission norms.
As a leading Automotive Component Manufacturer and keeping in line with technologicalprogression in the Automotive Industry it was natural for the Company to further enterinto advanced technologies to provide world-class product and services. The Telematicsproducts and services will address the growing menace of vehicle theft and roadaccidents. For the Commercial Vehicles the Telematics solutions will aid in determiningvehicle downtime fleet monitoring and reduce unauthorized use of vehicles.
The Company through its Subsidiaries and Associates has been a manufacturer of widerange of products like Lighting Module Frame Chassis Swing Arms Integrated PlasticModules Gear Shift Lever Intake systems Seat Frames & Mechanisms etc.
During the year under review the Company with its existing products basket has bagedorders for new product launches by various OEM's such as Eicher Honda Nissan and BajajAuto etc.
The Company continues to drive growth to diversified product and added new product suchas Trailing Arm and Swing Arm in two wheeler segment & received business from samefrom Bajaj Auto Limited.
The Company caters to the Aftermarket majority of which is lighting systems.Aftermarket have also done well for us post the launch of the refurbished brand exerciseand the change in marketing strategy which was well supported by the GST implementation.With the right efforts and initiatives already put in place for addition of new productsunder this division the Company is extremely positive about growth from this businesssegment.
Owing to its commitment towards continuous advancement towards Information Technologyand SAP the Company upgraded to SAP S/4HANA in the Financial Year ending 2018. This willenhance the Company's journey towards complete digitalization as a way forward. Similarlyefforts towards integrating GST regime within the SAP framework was implemented andsuccessfully making the Company - "SAP GST Compliant".
a. Adoption of Indian Accounting Standards (Ind AS)
In February 2015 Ministry of Corporate Affairs (MCA) notified the final roadmap on IndAS with implementation in a phased manner to be complied by the specified class ofcompanies effective from April 1 2016. Post above notification Ind AS has replacedexisting Indian GAAP prescribed under Section 133 of The Companies Act 2013 read withRule 7 of the Companies (Accounts) Rules 2014 according to applicability on specifiedentities. Accordingly this is first year when the Company's financial statements for theyear ended March 31 2018 have been prepared in accordance with Ind AS and the financialstatements for the year ended March 31 2017 and opening Balance Sheet as at April1 2016 (the Company's date of transition) earlier reported in previous IGAAP have beenrestated in accordance with Ind AS to make them comparable.
Accordingly the impacts of transition to Ind AS are given in detail in the Standaloneand Consolidated Financial Statements.
b. Goods and Services Tax (GST) Implementation and Impact
The year 2017-18 saw the roll out of the Goods and Services Tax (GST) compliance thebiggest tax reform in the history of Independent India which was applicable with effectfrom July 1 2017. GST is expected to bring in efficiencies in the system by improving theease of doing business streamlining the regulatory structure removing multiple taxes anddigitization of the tax collection mechanism thereby leading to an improved businessenvironment.
Although alike all other industries the implementation of GST was a minor hiccup yetthe Company has been able to successfully acknowledge the same without any disruption. Incoming years the overall effect of GST is expected to be beneficial for the Company alongwith increased and better tax compliance.
c. Change In Capital Structure
The Board of Directors in its Meeting held on March 23 2018 approved the Sub-Divisionof One (1) Equity Share having face value of Rs 10/- each fully paid-up into Five (5)Equity Shares having face value of Rs 2/- each followed by approval of Shareholders soughtby way of Postal Ballot the results of which were declared on May 08 2018.
Post the approval of above proposal by Shareholders the Issued Subscribed and Paid upEquity Share Capital of the Company would remain same i.e. Rs 136315410/- (RupeesThirteen Crores Sixty Three Lacs Fifteen Thousand Four Hundred Ten only) divide into68157705 (Six Crores Eighty- One Lacs Fifty Seven Thousand Seven Hundred Five) EquityShares of Rs 2/- each.
d. Amendment of Memorandum and Articles of Association of the Company
In order to give effect to the above proposal of Sub- Division of Equity Shares of theCompany the Board in its Board Meeting dated March 23 2018 also approved the proposalfor Amendment of Memorandum and Articles of Association of the Company (MOA & AOA).Accordingly the following changes were made to the existing MOA & AOA of the Company:
1. Alteration of Capital Clause - V' of the Memorandum of Association of theCompany.
2. Alteration of Article 4 (a) Share Capital' in Articles of Associationof the Company.
The above amendments were also approved by Shareholders through Postal Ballot theresults of which were declared on 8th May 2018.
e. Capacity & Facility Expansion
During fiscal 2017-18 the Company has initiated steps for capacity enhancement with aview to strengthen its existing customer base and accordingly shall be shifting its PCNTDAmanufacturing facilities to bigger premises in Chinchwad Pune for manufacturing of SwingArm Assembly. The new facility is expected to be operational by August 2018.
Similarly in Aurangabad the Company is expanding its existing business facilities toa new and better location for manufacturing & assembly of various fabricatedcomponents for two wheeler. This new business is expected to be operational by October2018.
f. Quality Initiatives
Your Company strives to be a supplier of choice across all its customers and is alwayscommitted to develop and design new products in line with its strategy towards deliveringcompetitive advantage to the customers. In the said perspective Total ProductiveMaintenance (TPM) has been successfully implemented across all plants of the Company tocreate a culture and environment which continuously improves quality cost and deliveryparameters. The Unit at K-76 Aurangabad has received Quality Gold award from Bajaj AutoLimited for maintaining PPM below 1000 in last 24 months. The other Units also receivedawards for Quality initiatives in various forums of Quality Circle Forum of India (QCFI)and BAVA / KAIZEN Competition ACMA Kaizen Competition etc. In addition the QualityControl Circle (QCC) programs are an integral part across plants of the Company. Byimplementing these various initiatives improvement of Quality is willingly carried out byemployees in true spirit resulting in minimizing rejection and cost cutting. g.Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 Management Discussion & Analysis Report is annexed aspart of this report separately as an
h. Change in the Nature of Business if any
There was no change in the nature of business of the Company during the Financial Yearended March 31 2018.
III. Governance and Ethics a. Corporate Governance
The report on Corporate Governance together with the Auditor's Certificate regardingthe Compliance of conditions of Corporate Governance as stipulated in Regulation 34 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed andforms part of this Annual Report as an Annexure B.
b. Directors & Key Managerial Personnel including those who were appointed or haveresigned during the Year
On recommendation of the Nomination and Remuneration Committee The Company in itsBoard Meeting held on December 04 2017 had appointed
Mr. Sanjay Mehta (DIN: 06434661) as an Additional Director liable to retire byrotation which is subject to his regular appointment in the ensuing Annual GeneralMeeting (AGM). Mr. Sanjay Mehta is Chartered Accountant and Company Secretary byqualification. He is associated with the D K Jain Group since last 10 Years. He has richexperience of 26 years in Corporate Accounts and Finance. He is looking after Strategyplanning developing and implementing plans within timeframe as per the budget goals bycreating and funding sustainable profitable growth of the Company.
Mrs. Diviya Chanana (DIN: 00737160) as an Additional Director to be designated as anIndependent Director for a period of 5 years not liable to retire by rotation w.e.fDecember 04 2017 which is subject to her appointment in the ensuing AGM. Ms. DiviyaChanana is a Graduate and Diploma holder in Travel and Tourism and has over 15 years ofrich experience in the said field.
The resolutions for above said appointments are duly contained in the Notice of AGM.
Mr. D.K. Jain (DIN: 00085848) will be completing his present tenure as ExecutiveChairman of the Company on August 06 2018. On the recommendation of the Nomination andRemuneration Committee the Board in its Meeting held on May 28 2018 has Re-appointed himas Executive Chairman of the Company for a further term of five (5) years. The saidappointment is subject to the approval of Shareholders in the ensuing AGM and theappropriate resolution is contained in the Notice of AGM.
Mr. Anmol Jain (DIN: 00004993) shall also be completing his present tenure as ManagingDirector of the Company on August 06 2018. The Board on recommendation of Nomination andRemuneration Committee in its Meeting held on May 28 2018 had approved theRe-appointment for a further term of 5 years which is further subject to the approval byShareholders in the ensuing AGM and the appropriate resolution is contained in the Noticeof AGM.
In accordance with the Articles of Association of the Company and Section 152 of theCompanies Act 2013 Mr. Deepak Jain (DIN: 00004972) Director of the Company will retireby rotation at the ensuing AGM and being eligible has offered himself for re-appointment.The Board recommends his re-appointment.
During the year Mrs. Usha Jain (DIN: 00005009) Non- Executive Director ceased to beDirector of the Company w.e.f. December 04 2017. The Board of Directors place on recordits appreciation towards her contributions during her tenure as Director of the Company.
Mr. Sandeep Dinodia (DIN: 00005395) Independent Director on the Board of the Companyceased to be Director of the Company w.e.f. May 28 2018. The Board of Directors place onrecord its appreciation towards his contributions during his tenure as an IndependentDirector of the Company.
c. Statement on Declaration given by Independent Directors
In compliance with the provisions of Section 149 (6) of The Companies Act 2013requisite declarations have been received from the Independent Directors regarding meetingthe criteria of Independence.
d. Number of Board Meetings and Committees of Board
The Board of Directors met five (5) times during the Financial Year under review viz.May 15 2017 August 30 2017 December 04 2017 February 12 2018 and March 232018. The maximum gap between any 2 meetings did not exceed 120 days.
A separate Meeting of Independent Directors was also conducted on 15th March 2018without the presence of Non- Independent Directors and Management. The details onAttendance during the Board Meetings and other Committee Meetings of Board of Directorsare provided in Corporate Governance Report which forms part of the Directors Report as anAnnexure B.
e. Board Diversity and Policy on Director's Appointment and Remuneration
The Company believes that building a diverse and inclusive culture is integral to itssuccess. A diverse Board will be able to leverage different skills qualificationsprofessional experiences perspectives and backgrounds which is necessary for achievingsustainable and balanced development. The Board has adopted a policy on NominationRemuneration and Board Diversity which sets out the criteria for determiningqualifications positive attributes and independence of a Director.
The main features of the Policy are as follows
3. Applicability & Accountability
4. Responsibility of Nomination & Remuneration Committee
5. Matters relating to appointment and remuneration of Directors
6. Remuneration to Independent Directors
7. Remuneration to other Employees
8. Term & Tenure
The Company's Policy relating to appointment of Directors payment of Managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters is enclosed to this Board Report as an Annexure C.
f. Performance Evaluation of Board Committee And Directors
In accordance with applicable provisions of the Act and Listing Regulations theevaluation of the Board as a whole Committees and all the Directors was conducted as perthe internally designed evaluation process approved by the Board. The evaluation testedkey areas of the Board's work including strategy business performance risk andgovernance processes. The evaluation considers the balance of skills experienceindependence and knowledge of the management and the Board its overall diversity andanalysis of the Board and its Directors' functioning.
The evaluation methodology involves completion of questionnaires consisting of certainparameters such as Evaluation factor Ratings and Comments if any.
The performance of entire Board is evaluated by all the Directors based on Boardcomposition and quality Board meetings and procedures Board development Board strategyand risk management etc.
The performance of the Managing Director and Executive Directors is evaluated by allthe Board Members based on factors such as leadership strategy formulation strategyexecution external relations etc.
The performance of Non- Executive Director and Independent Directors is evaluated byother Board Members based on criteria like managing relationship Knowledge and skillpersonal attributes etc.
It also involves self-assessment by all the directors and evaluation of Committees ofBoard based on Knowledge diligence and participation leadership team and managementrelations committee meetings and procedures respectively.
Further the assessment of Chairman's performance is done by each Board Members onsimilar qualitative parameters.
The feedback of the evaluation exercise and inputs of Directors were collated andpresented to the Board and an action plan to further improve the effectiveness andefficiency of the Board and Committees is put in place.
The Board as a whole together with each of its Committees was working effectively inperformance of its key functions- Providing strategic guidance to the Company reviewingand guiding business plans ensuring effective monitoring of the management and overseeingrisk management function. The Board is kept well informed at all times through regularcommunication and meets once per quarter and more often as and when need arises.Comprehensive agendas are sent to all the Board Members well in advance to help themprepare and keep the meetings productive. The Company makes consistent efforts tofamiliarize the Board with the overall business performance covering all Businessverticals by way of presenting specific performance of each Plant Product Category andCorporate Function from time to time.
The performance of the Chairman was evaluated satisfactory in the effective andefficient discharge of his role and responsibilities for the day to day management of thebusiness with reference to the strategy and long term objectives.
The Executive Directors and Non-executive Directors provided entrepreneurial leadershipto the Company within a framework of prudent and effective controls with a balanced focuson policy formulation and development of operational procedures. It was acknowledged thatthe management a_orded sufficient insight to the Board in keeping it up-to-date with keybusiness developments which was essential for each of the individual Directors to maintainand enhance their effectiveness.
g. Related Party Transaction And Policy
All contracts/arrangements/transactions entered by the Company with Related Partieswere in ordinary course of business and at arm's length basis.
All transactions with related parties were reviewed and approved by the Audit Committeeand are in accordance with the Policy on Related Party Transactions formulated by theCompany. All Related Party Transactions are subjected to independent review by a reputedaccounting firm to establish compliance with the provisions of the Companies Act 2013 andListing Regulations 2015.
The details of the Related Party Transactions as per IND AS - 24 are set out in Notesto the Financial Statements of the Company. The Company has formulated a policy on RelatedParty Transactions which is available on the Company's website athttp://www.lumaxautotech.com.
There were no materially significant Related Party Transactions entered into by theCompany with Promoters Directors or Key Managerial Personnel which may have a potentialconflict of interest for the Company at large.
Pursuant to Section 134 (3) (h) of the Companies Act 2013 read with Rule 8(2) of theCompanies (Accounts) Rules 2014 Form AOC-2 is set out in the Annexure D ofthis
h. Compliance Management Framework
For monitoring and ensuring compliance with applicable laws by the Company and forestablishing adequate management control over the compliances of all acts laws rulesregulations and regulatory requirements the Company has adopted comprehensive ComplianceManual for structured control over applicable compliances by each of the units of theCompany.
The Company has a practice of obtaining a Statutory Compliance Report on a monthlybasis from various functional heads of respective units for compliance with lawsapplicable to them. A consolidated report on compliance with applicable laws is presentedto the Board every quarter. To take care of the continuously evolving compliance scenariothe Company is constantly striving to strengthen the reporting system.
A separate corporate compliance management team periodically reviews and monitorscompliances by units and supports in effective implementation of same in a time boundmanner. The Board and Audit Committee along with Compliance team periodically monitorsstatus of compliances with applicable laws based on quarterly certification provided bysenior management.
i. Vigil Mechanism-Whistle Blower Policy
The Company has established a vigil mechanism named Whistle Blower Policy forDirectors employees and business associates to report to the management concerns aboutunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct or Ethics Policy in accordance with the provisions of Companies Act 2013 ListingRegulations 2015. The mechanism provides for adequate safeguards against unfair treatmentof whistle blower who wishes to raise a concern and also provides for direct access to theChairman of the Audit committee in appropriate/ exceptional cases.
The Whistle Blower Policy is uploaded on the website of the Company. To furtherstrengthen this mechanism the Company has launched an Employee App which is available forboth android and iOS users to facilitate easy expression of theiropinions/suggestions/complaints.
j. Secretarial Standards
The Board of Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
k. Directors Responsibility Statement
As required under Section 134(5) of the Companies Act 2013 the Directors state:
(i) that in the preparation of the Annual Accounts for the Financial Year ended March31 2018 the applicable
Accounting Standards have been followed along with proper explanation relating tomaterial departures in the Auditor Report and Notes to Accounts;
(ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) that the Directors have prepared the Annual Accounts on a "goingconcern" basis.
(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
l. Particulars of Employees
Information on Particulars of Employees as required under Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms an integral part of this Report as an Annexure E.The information required pursuant to section 197 of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of your Company is available for inspectionby the Members at the registered office of the Company during business hours on workingdays up to the date of ensuing Annual General Meeting. If any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary whereupon a copywould be sent.
m. Audit Committee & Composition
The composition of the Audit Committee is in alignment with provisions of Section 177of the Companies Act 2013 read with the Rules framed thereunder and Regulation 18 of theListing Regulations 2015.
The Audit Committee comprised of Mr. Sandeep Dinodia as Chairman Mr. Roop Salotra Mr.Milap Jain Mr. Dhiraj Dhar Gupta and Mr. Anmol Jain as Director. Ms. Swapnal Patane actsas Secretary to the Audit Committee.
The Audit Committee of the Company reviews the reports to be submitted to the Board ofDirectors with respect to auditing and accounting matters. It also supervises theCompany's internal control processes financial reporting and vigil mechanism.
All the recommendations made by the Audit Committee were accepted by the Board ofDirectors of the Company.
IV. Internal Financial Controls and Adequacy
The Company has a comprehensive internal control system to provide reasonable assuranceabout the achievement of its objective reliability of financial reporting timelyfeedback on achievement of operational and strategic goals compliance with policiesprocedures laws and regulations safeguarding of assets and economical and efficient useof resources. Appropriate review and control mechanisms are built in place to ensure thatsuch control systems are adequate and are operating effectively.
The monitoring and reporting of financial transactions is supported by a web-basedsystem SAP Hana which helps in obtaining accurate and complete accounting records andtimely preparation of reliable financial disclosures at all levels of the organization.
a. Risk Management Policy
The Company has adopted an Enterprise Risk Management policy and established a riskmanagement framework with an objective of timely identification mitigation and control ofthe risks which may threaten the existence of the Company in accordance with theprovisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Company has also constituted an internal RiskManagement Committee to review the risk trend exposure potential impact and theirmitigation plans and periodically the key risks are also discussed at the AuditCommittee.
b. Auditors i. Statutory Auditors
The Members in their Meeting held on July 23 2014 had appointed M/s S.R. Batliboi& Co. LLP Chartered Accountants as Statutory Auditors of the Company for a period of5 consecutive years in terms of the provisions of Section 139 of the Companies Act 2013read with the Companies (Audit and Auditors) Rules 2014 to hold the office of Auditorstill the conclusion of the sixth consecutive Annual General Meeting of the Company to beheld in the Year 2019.
In accordance with the Companies Amendment Act 2017 enforced on May 07 2018 by theMinistry of Corporate Affairs the appointment of Statutory Auditors is not required to beratified at every Annual General Meeting.
The Report given by the Statutory Auditors on the financial statement of the Companyforms part of this Annual Report. The Auditor Report does not contain any qualificationreservation adverse remark or disclaimer.
ii. Cost Auditors
The Board has re-appointed M/s Jitender Navneet & Co. as the Cost Auditors of theCompany in accordance with Section 148 and other applicable provisions if any of theCompanies Act 2013 for the audit of the cost accounts of the Company for the FinancialYear 2017-18.
The Cost Audit Report for the Financial Year 2016 -17 has been filed with the CentralGovernment within the stipulated time on September 27 2017.
iii. Secretarial Auditor
PursuanttotheprovisionsofSection204oftheCompanies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. I.U. Thakur Practicing Company Secretary as the Secretarial Auditor of theCompany to undertake the Secretarial Audit for the financial year 2017-18.
The Report of the Secretarial Auditor in the prescribed Form MR-3 is annexed herewithas an Annexure F. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
iv Internal Auditors
In compliance with the provisions of Section 138 of Companies Act 2013 read withCompanies (Accounts) Rules 2014 your Company has appointed M/s Pricewaterhouse & CoLLP as Internal Auditors for the financial year 2017-18.
c. Details in Respect of Frauds Reported by Auditors under sub-section (12) ofsection 143 of The Companies Act 2013 other than those which are Reportable to theCentral Government:
There were no frauds which were reported by Auditors for the year under review.
V. Corporate Social Responsibility (CSR) Policy and Initiatives
Your Company is committed to grow and operate in a socially sustainable manner andcontinued to give back to society. A well-outlined CSR program creates social andenvironmental value thus impacting and improving the lives of communities. The key focusareas of your Company have been Education and Healthcare for disadvantaged sections of thesociety. The Company's focus areas are largely covered under Schedule VII of the CompaniesAct 2013. During the year the Company has added one more school under its educationinitiative besides continuing its support to the existing schools by way of providingfinancial support in terms of enrollment of girl child providing a holistic learningenvironment fees of children E-learning program contributing towards infrastructure andother facilities for students in the school. Under its healthcare initiatives the Companyis focussing on preventive healthcare by continuously organising health check-up campslending financial support to hospitals for juvenile diabetes cataract operations andpartnering in special drives organised by various agencies for this cause.
Your Company endeavored to meet the budgeted expenditure in its CSR activities and hascommitted to incur expenditure for CSR initiatives however discontinuance of support toone school has resulted into a shortfall as such in the CSR expenditure as compared to thestipulated 2 percent of the average net profits of the last three financial years. TheCompany is committed to spend 2 percent of the average net profits of the last threefinancial years on CSR activities and it shall ensure compliance of the same goingforward. The detailed Report on CSR activities is annexed herewith as
Annexure - G.
Constitution of CSR Committee
The Company has constituted a CSR Committee of the Board and also developed &implemented a CSR Policy in accordance with the provisions of Companies Act 2013. TheCommittee monitors and oversees various CSR initiatives and activities of the Company.During the Financial Year 2017-18 the CSR Committee of the Board of Directors comprisedof three (3) Members namely Mr. Roop Salotra Chairman Mr. Dhiraj Dhar GuptaMember Mr. D. K. Jain Member. Further the Board of Directors have also adopted the CSRPolicy of the Company as approved by the Corporate Social Responsibility Committee whichis also available on the website of the Company at www. lumaxautotech.com.
The contents of the said policy are as below:
2. Policy Guidelines
4. Areas Covered
5. CSR Committee & Responsibility
6. Board Responsibility
9. Management Commitment
The disclosures as per Rule 8 of Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed herewith as an Annexure G to this Report in the prescribedformat.
VI. Other Statutory Disclosures as Required Under Section 134 of Companies Act 2013 a.Names of Companies which have become or ceased to be its Subsidiaries Joint Ventures orAssociate Companies during the Year
During the year under review the Company has ceded the management control of its stepdown Subsidiary Company i.e Lumax Sipal Engineering Private Limited in favour of the JointVenture partner Sipal S.p.A Italy. Thus this Company ceased to be Subsidiary and becamean Associate of the Company.
b. Extract of Annual Return
In accordance with the requirement of Section 92 of Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 the extract of the annualreturn in Form MGT 9 is annexed as an Annexure - H.
c. Investor Education and Protection Fund (IEPF)
Transfer of Unpaid Dividend
Pursuant to the provisions of Section 124(5) of the Companies Act 2013 read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules')all unpaid or unclaimed dividends are required to be transferred by the Company to theIEPF established by the Central Government after the completion of seven(7) years.Consequently your Company has transferred Rs 120147/- during the year to the InvestorEducation and Protection Fund lying with it for a period of seven years pertaining toyear 2009-10.
Transfer of Shares underlying Unpaid Dividend
Further pursuant to provisions of Section 124(6) the shares in respect of whichDividend has not been paid or claimed by the Shareholders for seven (7) consecutive yearsor more shall also be transferred to the Demat account of IEPF Authority. Accordingly1201 shares underlying Unpaid Dividend have been transferred as per the requirement ofIEPF Rules.
It may be noted that Unclaimed Dividend/Underlying shares for the Financial Year 2010 -11 can be claimed by the Members by October 21 2018. The Notice as stipulated pursuant tothe provisions of Section 124 of Companies Act 2013 read with IEPF (Accounting AuditTransfer and Refund) Rules 2016 will be published in the Newspaper inviting the attentionof the Shareholders to claim their Dividends.
d. Fixed Deposits
During the year under review the Company has not accepted any Deposit under Section 73of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
It is further stated that the Company does not have any deposits which are not incompliance with the requirements of Chapter V of The Companies Act 2013.
e. Particulars of Loans Guarantees and Investments
The particulars of loans guarantees and investments covered under the provisions ofsection 186 of Companies Act 2013 are given in the Notes to financial statements.
f. Material Changes and Commitments
No material changes and commitments affecting the financial position of the Companyhave occurred between April 1 2017 and the date of this report except the Company hasacquired management control over the Associate Company Lumax Gill Austem AutoTechnologies Private Limited by giving casting vote power to the Chairman who isrepresenting Lumax Auto Technologies Limited w.e.f April 01 2018.
g. Information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
Disclosure of information regarding Conservation of Energy Research & DevelopmentTechnology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m)of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 is annexedseparately as an Annexure I.
h. Significant and Material orders passed by the Regulators or Courts
There were no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status of the Company and its futureoperations.
i. Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013
In accordance with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and
Redressal) Act 2013 the Company has adopted the "Prevention of Sexual Harassmentat Workplace Policy" and constituted an Internal Complaints Committee (ICC) forProhibition Prevention and Redressal of Sexual Harassment of Women at Workplace andmatters connected therewith or incidental thereto covering all the related aspects.
The Committee meets as and when required however minimum one meeting is ensured duringthe Financial Year to discuss strengthening safety of employees at workplace and also toresolve/address related issues if any reported during the year.
During the year under Review i.e. 2017-18 Nine (9) meetings of ICC across all plantlocations were held. Further as per the applicable provisions of Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal)Act 2013 your Company continuesto submit Annual Report to the District Officer consisting of details as stipulated underthe said Act
j. Environment Health & Safety
The Company is Committed to provide a safe working environment with a focus on "SafetyCulture Building" by maintaining a number of Safety Management Systems to managethe risk and as a result reduction in number of incidents and injuries. These systemsinclude safety rules safety procedures safety training hazard identification &correction incident reporting & investigation capturing near miss accidents safetycommunications and safety suggestions. Each Safety Management System has an importantcontribution to not only improving workplace safety but also influencing theorganization's safety culture.
Apart from the above Lumax is also performing below activities sincerely since 2015:
Regional Safety Meeting for all regions.
Surface Treatment/ Duct cleaning for locations where paint material & chemicals areused
KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures with thehelp of actual users)
Safety Gemba Audit (Identifying the potential hazard)
Hazards specific Safety training
Maintaining Standard Operating Procedures
By ensuring all the above zero accident level is maintained for last two years.Induction programme & regular training of employees and the introduction of formalsafety management system help us to mitigate any future incidents.
In financial year 2017-18 the Company's units situated at Chakan Pune and G-53Aurangabad achieved OHSAS Certification.
k. Contribution to Exchequer
The Company is a regular payer of taxes and other duties to the Government. During theyear under review Company paid all its statutory dues & presently no dues areoutstanding more than six months. The Company ensures payment of all dues to exchequerwell within timeline as applicable.
It is our belief that we have a leadership team with the right experience and skills totake us into the next decade of growth. We continue to build our skills and addappropriate resources which will help the Company deliver solid results in the years tocome. Your Directors place on record their appreciation for the continued cooperation andsupport extended to the Company by its highly valued customers Joint Venture Partnersall the Shareholders financial institutions & Banks various Government Agencies.
Your Directors also wish to place on record their sincere thanks and appreciation forthe continuing support and unstinting efforts of vendors dealers business associates andemployees in ensuring an excellent all around operational performance.
|For and on behalf of the Board of Directors |
| ||D.K. JAIN |
|Place: New Delhi ||Chairman |
|Dated: May 28 2018 ||DIN:00085848 |
Nomination and Remuneration Policy of Directors Key Managerial Personnel and OtherEmployees
The Nomination and Remuneration Committee fixes the remuneration of the ExecutiveDirectors after considering various factors such as qualification experience expertiseprevailing remuneration in the competitive industries financial position of the Companyetc. The remuneration structure comprises Basic Salary Commission Perquisites andAllowances contribution to Provident Fund etc. The remuneration policy for ExecutiveDirectors is directed towards rewarding performance based on review of achievements ofExecutive Directors. The Extract of the Remuneration and Evaluation of the Performance ofthe Board of Directors Policy is given below:
The Board of Directors believes that an equitable remuneration to the ExecutiveManagement helps ensure that the Company can attract and retain key employees. E_orts aremade to ensure that the remuneration of the Board of Directors Key Managerial Personneland other employees matches the level in comparable Companies whilst also taking intoconsideration Board Members required competencies effort and the scope of the board workincluding the number of Meetings.
The policy shall ensure that level and composition of remuneration is reasonable andsufficient to attract retain and motivate Directors of the quality required to run theCompany successfully.
Section 178 of the Companies Act 2013 and Regulation 19 of the Listing Regulations2015 provides that the Nomination and Remuneration Committee shall formulate the criteriafor determining qualifications positive attributes and independence of a Director andrecommend to the Board a policy relating to the remuneration for the Directors KeyManagerial Personnel and other Employees.
This policy on remuneration of Directors and Key Managerial Personnel has beenformulated by the Nomination and Remuneration Committee and approved by the Board ofDirectors of the Company.
The objective of this policy is to lay down a framework in relation to remuneration ofDirectors KMP and other employees.
"Board" means Board of Directors of the Company. "Key ManagerialPersonnel" means
i. Managing Director or Chief Executive Officer or Manager and in their absence aWhole-Time Director; ii. Chief Financial Officer; iii. Company Secretary
Applicability & Accountability
This Policy is applicable to: a) Directors viz. Executive and Non-Executive andIndependent b) Key Managerial Personnel c) Other Employees of the Company
The key responsibilities of the Committee would be as follows:
To guide the Board in relation to appointment and removal of Directors and KeyManagerial Personnel.
To evaluate the performance of the Members of the
Board and provide necessary report to the Board in this regard.
To determine the remuneration of Directors and Key
Managerial Personnel in such a manner that involves a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of the Company and its goals.
To recommend to the Board on Remuneration payable to the Directors and Key ManagerialPersonnel.
Delegating any of its powers to one or more of its members or the Secretary of theCommittee.
Frequency of Meetings
The Meetings of the Committee shall be held at such regular intervals as may berequired.
Matters Relating to Appointment of Director and Key Managerial Personnel
a) The Committee shall identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director and Key ManagerialPersonnel and recommend to the Board his / her appointment. While recommending any personfor appointment as Director Committee shall keep in view the issue with respect to Boarddiversity.
b) The Committee has discretion to decide whether qualification expertise andexperience possessed by a person are sufficient / satisfactory for the concerned position.
c) The Committee shall ensure that any appointment of a person as an IndependentDirector of the Company shall be made in accordance with the provisions of Section 149150 and 152 read with Schedule IV and other applicable provisions of the Companies Act2013 and the Companies (Appointment and Qualification of Directors 2015) Rules 2014 andRegulation 17 of the Listing Regulations.
Matters relating to the Remuneration for the Directors and Key Managerial Personnel
(a) The Committee shall determine remuneration structure for Directors and KeyManagerial Personnel taking into account factors it deems relevant including but notlimited to market scenario business performance and practices in comparable companieshaving due regard to financial and commercial health of the Company as well as prevailinglaws and Government/other guidelines.
(b) The remuneration / commission etc. to the Managing Director Whole-TimeDirector and Key Managerial Personnel will be determined by the Committee and recommendedto the Board for approval. The remuneration / commission etc. shall be subject to theprior/post approval of the Shareholders of the Company and Central Government whereverrequired.
(c) If in any Financial Year the Company has no profits or its profits areinadequate the Company shall pay remuneration to its ManagingDirector/Executive/Whole-Time Director(s) in accordance with the provisions of Schedule Vof The Companies Act 2013 and if the remuneration paid is not in compliance with suchprovisions the same shall be subject to the previous approval of the Central Government.
(d) Increments to the existing remuneration structure may be recommended by theCommittee to the Board which shall be within the overall limits of remuneration asprescribed under The Companies Act 2013.
(e) Where any insurance is taken by the Company on behalf of its Managing Director/Executive/Whole-Time Director Key Managerial Personnel and any other employees forindemnifying them against any liability the premium paid on such insurance shall not betreated as part of the remuneration payable to any such personnel. However if such personis proved to be guilty the premium paid on such insurance shall be treated as part of theremuneration.
Remuneration to other employees of the Company
Employees are assigned grades according to their qualifications and work experiencecompetencies as well as their roles and responsibilities in the Company. Individualremuneration is determined within the appropriate grade and is based on an individual'sexperience skill competencies and knowledge relevant to the job and an individual'sperformance and potential contribution to the Company.
Term / Tenure a) Managing Director/Whole-Time Director:
The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or Executive/ Whole-Time Director for a term not exceeding five years at a time.No reappointment shall be made earlier than one year before the expiry of term.
b) Independent Director
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Shareholders of the Company.
No Independent Director shall hold office for more than two consecutive terms but suchIndependent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director. Provided that an Independent Director shallnot during the said period of three years be appointed in or be associated with theCompany in any other capacity either directly or indirectly.
The Terms and Conditions of appointment of Independent Directors is uploaded on thewebsite of the Company and the web link of the same is provided here under:
FORM AOC 2 Annexure D
Form for Disclosure of Particulars of Contracts/Arrangements entered into by theCompany with related parties referred to in Section 188(1) of the Companies Act 2013including certain arm's length transactions under third proviso thereto
[Pursuant to Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014]
1. Details of Contracts or Arrangements or Transactions not at Arm's LengthBasis:
|a. ||Name(s) of the related party and nature of relationship || |
|b. ||Nature of contracts/arrangements/transactions || |
|c. ||Duration of the contracts/arrangements/transactions || |
|d. ||Salient terms of the contracts or arrangements or transactions including the value if any || |
|e. ||Justification for entering into such contracts or arrangements or transactions ||NA |
|f. ||Date(s) of approval by the Board || |
|g. ||Amount paid as advances if any || |
|h. ||Date on which the requisite resolution was passed in general meeting as required under first proviso to Section 188 of the Companies Act 2013 || |
2. Details of Material Contracts or Arrangement or Transactions at Arm's LengthBasis:
|Sr. No. ||Particulars ||Material Transaction |
|a. ||Name(s) of the related party and nature of relationship ||Lumax Industries Limited |
|b. ||Nature of contracts/arrangements/transactions ||Purchase / Sale of Goods |
|c. ||Duration of the contracts/arrangements/transactions ||April 01 2017 to March 31 2018 |
|d. ||Salient terms of the contracts or arrangements or transactions including the value if any ||Rs. 20831 Lacs |
|e. ||Date(s) of approval by the Board if any ||May 28 2018 |
|f. ||Amount paid as advances if any ||Nil |
All Related Party Transactions are in the ordinary course of business and on arm'slength basis which are approved by Audit Committee of the Company.
| ||For and on behalf of the Board of Directors of |
| ||Lumax Auto Technologies Limited |
| ||D. K. JAIN |
|Place: New Delhi ||Chairman |
|Date: May 28 2018 ||DIN: 00085848 |
Statement of Disclosure of Remuneration pursuant to Section 197 of the Companies Act2013 read with Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
A. Ratio of the Remuneration of each Executive Director to the Median Remunerationof the Employees of the Company for the Financial Year 2017-18 the percentage increase inRemuneration of Managing Directors other Executive Directors Chief Financial Officer andCompany Secretary during the Financial Year 2017-18.
|Sr. No. ||Name of Directors & Key Managerial Personnel ||Designation ||Ratio of Remuneration to Median Remuneration of all employees ||% increase in Remuneration during the Financial Year 2017-18 |
|1. ||Mr. D.K. Jain ||Executive Chairman ||61.82 ||88.81 |
|2. ||Mr. Anmol Jain ||Managing Director ||66.20 ||90.82 |
|3. ||Mr. Ashish Dubey ||Chief Financial Officer ||-- ||33.32 |
|4. ||Mrs. Swapnal Patane ||Company Secretary ||-- ||14.00 |
B. The percentage increase in the median remuneration of Employees for theFinancial Year 2017-18 was 7.69%.
C. The number of Permanent Employees on the rolls of the Company as on March 312018 was 720.
D. The Average Percentage increase in the salaries of the employees other than theKey Managerial Personnel for the Financial Year was 14.12% whereas the increase in theManagerial remuneration was 89.84%. The remuneration components in case of ExecutiveChairman and Managing Director include Commission paid which is linked with theprofitability of the Company.
E. Afirmation that the remuneration is as per the Remuneration Policy of theCompany:
We afirm that the Remuneration paid to the Employees and Directors is as per theRemuneration Policy of the Company.
Information as per Section 134(3)(m) of the Companies Act 2013 and forming part ofDirectors' Report for the year ended March 31 2018
A. Conservation of Energy
Though the Company does not come under the category of power intensive unit adequatemeasures have been taken for energy conservation and thereby to reduce energy cost.
(a) Energy Conservation Measures taken and their Impact.: a. Continuous saving ofenergy by replacing inefficient light by efficient LED light.
The Company had cautiously focused on replacement of inefficient light by LED light inShop Floors Office Premises Street Lights etc. which resultantly reduced energyconsumption by 10 per cent for PCNTDA Plant 3 per cent for Bangalore plant and 5 per centin K-76 and Shahajapur Aurangabad Plants of total energy consumption in those plants.
b. Energy conservation by improving overall efficiency of Plants
The Company initiated working on re-design of utility equipment by this Phase sequencerelay for cooler motor of compressor installed the same is resulted into saving 2.5 percent of energy consumption of PCNTDA Plant. Temperature controller sensors added incooling tower for auto cut-off of motor. The same is resulted in saving of energy ofapprox. 6K units per year.
c. Reduction in energy consumption of process machinery power controlling by makingchanges in technology and by adopting upgraded technology.
The Company commenced technology up gradation for power controlling & adopted newtechnology for process machine for Surface treatment and Moulding machine which reducedenergy consumption by 6 per cent in Bhosari plant & 12 per cent in Chakan plant.
d. Moulding Machine with Servo Motor:
The Company has further replaced Moulding Machine induction motor with Servo Motor inits Bangalore Plant thereby expecting to save electricity consumption approximately by 25per cent to 30 per cent. The purchase of energy from Indian Energy Exchange (IEX) by openAccess Trading has further resulted in additional saving per unit.
(b) Step taken by the Company for utilizing alternate source of energy
The company has initiated activity of installation of solar power system with capacityof 250 -300 KVA in its different plants located at PCNTDA Pune and K-76
& Shahajapur of Aurangabad in Maharashtra and Bangalore in Karnataka which willhelp in energy conservation and reduction of overall cost of energy. Further proposal ofinstallation of solar street lights also in consideration for plants of the company.
It is difficult to quantify the impact of individual energy reduction measures on theCost of Production of Goods. The above measures of energy reduction will reduce overallcost of energy.
B. Technology Absorption
The company does not have any imported technology and hence the details required to begiven for the imported technology are not applicable.
As a trend in the Auto Industries is changing from import in technology to provide anddevelop local competency the Company has taken various initiatives to improve localtechnical capabilities.
Research & Development
a) Expenditure on Research & Development
| ||(Rs in Lacs) |
|(i) Capital ||- |
|(ii) Recurring ||240.83 |
|Total ||240.83 |
|(iii) Total R & D Expenditure as a percentage of Total Turnover ||0.39 |
C. Foreign Exchange Earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year is Rs 2384.17Lacs and the Foreign Exchange outgo during the year in terms of actual outflows is Rs809.01 Lacs.