Your Directors with immense pleasure present the 39th AnnualReport of Lumax Auto Technologies Limited (Company) on the business andoperations together with Audited Balance Sheet and Statement of Profit & Loss of yourCompany for the year ended March 31 2020.
We have established our position in the industry as one of theprominent leaders and are the preferred supplier for all major OEMs. We have a diversebasket of products offering. The below mentioned performance itself speaks volumes of theinitiatives Company has taken to strengthen the profitability.
The Key highlights of Financial Performance of your Company for theyear along with previous year figures are as follows:
I. FINANCIAL PERFORMANCE
| || |
| ||For the year ended March 31 2020 ||For the year ended March 31 2019 ||For the year ended March 31 2020 ||For the year ended March 31 2019 |
|Revenue from Operations ||94236.07 ||95764.60 ||114091.38 ||118697.87 |
|Other Income ||2717.95 ||2317.35 ||1810.15 ||1395.34 |
|Total Income ||96954.02 ||98081.95 ||115901.53 ||120093.21 |
|Total Expenses ||90828.97 ||90889.51 ||109403.15 ||110705.87 |
|Profit before tax share in net profit/(loss) of associates exceptional items ||6125.05 ||7192.44 ||6498.38 ||9387.34 |
|Profit / (loss) of associates ||- ||- ||(30.10) ||(25.44) |
|Profit before exceptional items and tax ||6125.05 ||7192.44 ||6468.28 ||9361.90 |
|Exceptional items ||- ||- ||- ||(603.11) |
|Profit before Tax ||6125.05 ||7192.44 ||6468.28 ||8758.79 |
|Tax Expenses ||997.67 ||2500.97 ||1367.84 ||3135.74 |
|Profit for the year (Before discontinued operations) ||5127.38 ||4691.47 ||5100.44 ||5623.05 |
|Discontinued operations (PCB Business) || || || || |
|Profit before tax for the period / year from Discontinued operations ||948.58 ||1758.42 ||948.58 ||1758.42 |
|Tax expense of Discontinued operations ||123.29 ||492.42 ||123.29 ||492.42 |
|Profit for the period / year from Discontinued operations ||825.29 ||1266.00 ||825.29 ||1266.00 |
|Profit for the year ||5952.67 ||5957.47 ||5925.73 ||6889.05 |
|Profit for the year attributable to - || || || || |
|a) Owners of Lumax Auto Technologies Limited ||5952.67 ||5957.47 ||5803.89 ||6588.78 |
|b) Non- controlling interests ||- ||- ||121.84 ||300.27 |
|Other Comprehensive Income ||(5105.30) ||(1743.88) ||(5086.53) ||(1729.89) |
|Other Comprehensive Income attributable to - || || || || |
|a) Owners of Lumax Auto Technologies Limited ||(5105.30) ||(1743.88) ||(5093.40) ||(1734.82) |
|b) Non- controlling interests ||- ||- ||6.87 ||4.93 |
|Total Comprehensive Income for the year ||847.37 ||4213.59 ||839.20 ||5159.16 |
|Total Comprehensive Income for the year attributable to - || || || || |
|a) Owners of Lumax Auto Technologies Limited ||847.37 ||4213.59 ||710.49 ||4853.96 |
|b) Non- controlling interests ||- ||- ||128.71 ||305.20 |
|Paid-up Equity Share Capital (Equity shares of Rs 2 each) ||1363.15 ||1363.15 ||1363.15 ||1363.15 |
|Earnings Per Share Basic & Diluted EPS (in Rs) ||8.73 ||8.74 ||8.52 ||9.67 |
A. COMPANY PERFORMANCE STANDALONE:
On Standalone Basis the Company achieved Revenue of Rs 94236.07 Lakhsfor the Financial Year 2019-20 as compared to Rs 95764.60 Lakhs (from continuedoperations) in Financial Year 2018-19 a decline of 2%. The Profit before Tax (PBT) fromcontinued operations stood at Rs 6125.05 Lakhs as against Rs 7192.44 Lakhs. Similarlythe Profit after Tax (PAT) was recorded at Rs 5127.38 Lakhs as against Rs 4691.47 Lakhsin previous year.
During the year Lumax DK Auto Industries Limited a 100% subsidiary ofthe Company has been merged with the Company with effect from November 9 2019 pursuant tothe order of the Hon'ble National Company Law Tribunal Principal Bench New Delhidated October 30 2019 with appointed date April 1 2018.
On Consolidated Basis the Company achieved Revenue of Rs 114091.38Lakhs for the Financial Year 2019-20 as compared to Rs 118697.87 Lakhs (from continuedoperations) in Financial Year 2018-19 a decline of 4%. The Profit before Tax (PBT) andexceptional items from continued operations stood at Rs 6468.28 Lakhs as against Rs9361.90 Lakhs. The Profit after Tax (PAT) and minority interest was recorded at Rs4978.60 Lakhs as against Rs 5322.78 Lakhs in previous year.
During the year under review and based on the Company'sperformance the Board of Directors at their meeting held on February 19 2020 declaredand paid an interim dividend of Rs 2 per equity share (i.e. 100%) of face value of Rs 2/-each and the same is being confirmed at the Annual General Meeting. Further your Board ofDirectors have now recommended a Final Dividend @ Rs 1 per equity share (i.e. 50%) of facevalue of Rs 2/- each for the Financial Year 2019-20 which was considered by the Board inits meeting held on June 17 2020 for the approval of shareholders in the ensuing AnnualGeneral Meeting (AGM).
The Interim Dividend and proposed Final Dividend for Financial Year2019-20 would result in appropriation of Rs 2285.58 Lakhs (including Corporate DividendTax of Rs 240.85 Lakhs) as against Rs 2406.00 Lakhs (including Corporate Dividend Tax ofRs 361.27 Lakhs) in previous Financial Year 2018-19.
The Register of Members and Share Transfer Books shall remain closedfrom Friday the August 21 2020 to Friday the August 28 2020 (both days inclusive). TheFinal Dividend as recommended by the Board of Directors if approved by the shareholdersat the ensuing AGM shall be paid to the eligible shareholders whose names appear in theRegister of Members as on Thursday the August 20 2020 within the stipulated time period.The Dividend pay-out ratio comes to 44.58 %.
B. SUBSIDIARIES AND ASSOCIATE COMPANIES &CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as Listing Regulations) applicable provisions of the Companies Act 2013and Ind AS 110 the Audited Consolidated Financial Statements are provided in the AnnualReport of the Company.
As on March 31 2020 the Company has Ten (10) Subsidiaries (including2 step down subsidiaries) and Two (2) Associate Companies. The performance highlights ofthese Companies are follows:
Lumax Management Services Private Limited (LMS)
LMS a 100% subsidiary of the Company is a full-time service providerin form of Corporate Services to its Group Companies. The Revenue of the Company stood atRs 2589.15 Lakhs for the Financial Year 2019-20.
Lumax Integrated Ventures Private Limited (LIVE)
LIVE a 100% subsidiary of 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 2019-20 stands for Rs 33.20 Lakhs.
Lumax Mannoh Allied Technologies Limited (LMAT)
LMAT a 55% subsidiary formed in collaboration with Mannoh IndustrialCo. Limited Japan. The entity manufactures gear shifters and enjoys a market leadershipposition in India. The Revenue of the Company stood at Rs 12510.20 Lakhs for theFinancial Year 2019-20.
Lumax Cornaglia Auto Technologies Private Limited (LCAT)
LCAT a 50% subsidiary formed in collaboration with Cornaglia S.p.A.Italy. The entity manufactures air intake systems as well as other plastics injection blowmoulded parts. The revenue of the Company stood at Rs 4716.35 Lakhs for the FinancialYear 2019-20. The Pune Plant has started commercial production of urea tank in Q1 FY-2021& Pantnagar plant is in process of commissioning.
Lumax Gill - Austem Auto Technologies Private Limited (LGAT)
LGAT 50% subsidiary formed in collaboration with Gill- Austem LLPUSA for manufacturing of seat structures. The current year revenue stood at Rs 2546.01Lakhs. The Board of Directors in its meeting held on February 11 2020 has approved forthe termination of the Joint Venture Agreement with Gill Austem LLP USA. Accordinglythe Company is negotiating with Gill Austem LLP USA for acquiring balance stake in LGAT.
Lumax FAE Technologies Private Limited (Lumax FAE)
Lumax FAE a 51% subsidiary between Lumax Auto Technologies Limited andFAE Spain to manufacture Oxygen Sensors. The plant is under commissioning and the revisedplan for start commercial production is expected in Q3 FY-2021.
Lumax Jopp Allied Technologies Private Limited (Lumax Jopp)
Lumax Jopp a 50% subsidiary between Lumax Auto Technologies Limitedand JOPP Germany to manufacture Gear Shift Towers AMT Kits & AGS. The Company hasstarted the commercial production in Q4 FY-2020.
Lumax Yokowo Technologies Private Limited (Lumax Yokowo)
Lumax Yokowo is a 50:50 Joint Venture between Lumax Auto TechnologiesLimited and YOKOWO Japan to manufacture Antennas & other Vehicle CommunicationProducts. The Company was incorporated during the Financial Year as 100% subsidiary.During the year the Company has generated business enquiries from OEM's formanufacturing of Antennas & other Vehicle Communication Products.
Lumax Ituran Telematics Private Limited (Lumax Ituran)
Lumax Ituran is a 50:50 Joint Venture between Lumax Auto TechnologiesLimited and Ituran Location and Control Limited Israel. During the year the Company hasgenerated business enquiries from OEM's to implement track & trace devices withadditional features for future models.
Sipal Engineering Private Limited (SEPL)
SEPL is an Associate Company of Lumax Integrated Ventures PrivateLimited (LIVE). LIVE holds 45% equity in SEPL.
In accordance with the provisions of Section 129(3) of the CompaniesAct 2013 a report on performance and financial position of Subsidiaries AssociateCompanies is presented in this Annual Report in the prescribed format Form AOC-1 as a partof Financial Statements. Further in accordance with the provisions of Section 136(1) ofthe Companies Act 2013 the Audited Financial Statements including the ConsolidatedFinancial Statements and related information and audited accounts of subsidiaries andassociates are available on the website of the Company i.e. www.lumaxworld.in/lumaxautotech 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 a series ofimportant developments and changes influencing its operations business activitiescorporate governance practices etc. However it continued to reinforce its position in themarket and derived sustainable benefit due to its strong foundation and its deeperintegration with its subsidiaries and joint ventures.
The COVID-19 has impacted the normal business operations of the Groupby way of interruption in production supply chain disruption unavailability ofpersonnel closure of production facilities etc. during the lock-down period which startedfrom March 23 2020. However production and supply of goods has commenced during themonth of April and May 2020 on various dates at all the manufacturing locations of theCompany. The Company is taking utmost care of its staff and work force by undertakingvarious precautionary measures to smoothly manage the operations which also include workfrom home facility.
The Company has made detailed assessment of its liquidity position andit does not foresee any challenges in meeting its financial obligations. As the businesssituation is very dynamic the Company is closely monitoring the same and taking requiredmeasures.
A. CHANGE IN CAPITAL STRUCTURE
During the Financial Year 2019-20 the Authorised Share Capital wasincreased from 75000000 equity shares of Rs 2/- each to 180500000 equity shares ofRs 2/- each due to merger of Lumax DK Auto Industries Limited with the Company. As onMarch 31 2020 the issued and paid-up share capital of the Company was Rs 136315410divided into 68157705 equity shares of Rs 2/- each.
a) Your Company has not issued shares with differential voting rightsnot granted employee stock options sweat equity or bonus shares. The Company does nothave any Debentures Preferential Shares as on March 31 2020.
b) Your company has not made any provisions of money for purchase ofits own shares by employees or by trustees for the benefit of employees during the yearunder review.
B. CAPACITY & FACILITY EXPANSION
During Financial Year 2019-20 the Company has upgraded itsmanufacturing facilities as per customer requirement.
C. QUALITY INITIATIVES
Your Company strives to be a supplier of choice across all itscustomers and is always committed to develop and design new products in line with itsstrategy towards delivering competitive advantage to the customers. In the saidperspective Total Productive Maintenance (TPM) has been successfully implemented acrossall plants of the Company to create a culture and environment which continuously improvesquality cost and delivery parameters.
The Bengaluru Plant of the Company has won the prestigious TPM Awardfor excellence in Category
A from Japan Institute of Plant Maintenance (JIPM). In addition thevarious plants of the Company have received awards for Quality initiatives in variousforums of Quality Circle Forum of India (QCFI) and BAVA / KAIZEN Competition ACMA KaizenCompetition etc. Quality Control Circle (QCC) is an integral part ensuring quality acrossall processes. By implementing these various initiatives improvement of Quality iswillingly carried out by employees in true spirit resulting in minimizing rejection andcost cutting.
D. MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Regulation 34 of the Listing RegulationsManagement Discussion & Analysis Report is annexed as part of this report separatelyas an Annexure - A.
E. CHANGE IN THE NATURE OF BUSINESS IF ANY
There is no change in business.
The Board of Directors of the Company at their meeting held on February24 2020 have approved the acquisition of roto moulded plastic Auto Component Business ofOK Play Group.
Due to unprecedented pandemic situation and extended lockdownsdisrupting business continuity the proposed acquisition is being put on hold pendingfurther review and appropriate decision in future.
III. GOVERNANCE AND ETHICS
A. CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor'sCertificate regarding the Compliance of conditions of Corporate Governance as stipulatedin Regulation 34 of the Listing Regulations is annexed and forms part of this AnnualReport as an Annexure - B.
B. DIRECTORS & KEY MANAGERIAL PERSONNEL INCLUDING THOSE WHO WEREAPPOINTED OR HAVE RESIGNED DURING THE YEAR
KEY MANAGERIAL PERSONNEL
As on March 31 2020 Mr. D.K. Jain Executive Chairman Mr. AnmolJain Managing Director Mr. Ashish Dubey Chief Financial Officer and Mr. Anil TyagiCompany Secretary are regarded as Key Managerial Personnel (KMPs) as per the provisions ofthe Companies Act 2013. Further Mr. Vikas Marwah was appointed as Chief ExecutiveOfficer of the Company w.e.f. May 02 2020 designated as KMP.
On recommendation of the Nomination and
Remuneration Committee and Board of Directors Mr. Avinash ParkashGandhi (DIN: 00161107) have been appointed as a Non- Executive Independent Director by theshareholders of the Company during the year.
On recommendation of the Nomination and Remuneration Committee theCompany in its Board Meeting held on May 18 2019 has appointed Mr. Anil Tyagi (MembershipNo. A16825) as Company Secretary and Compliance Officer of the Company.
On recommendation of the Nomination and Remuneration Committee theCompany in its Board Meeting held on May 02 2020 has appointed Mr. Vikas Marwah as ChiefExecutive Officer of the Company.
RE - APPOINTMENTS
On recommendation of the Nomination and
Remuneration Committee and Board of Directors Mr. Milap Jain (DIN:06738071) have been re-appointed as a Non-Executive Independent Director by theshareholders of the Company for the period of 5 years during the year.
On recommendation of the Nomination and Remuneration Committee andBoard of Directors Mr. Roop Salotra (DIN: 06650145) have been re-appointed as aNon-Executive Independent Director by the shareholders of the Company for the period of 5years during the year.
In accordance with the Articles of Association of the Company andSection 152 of the Companies Act 2013 Mr. Deepak Jain (DIN: 00004972) Director of theCompany will retire by rotation at the ensuing AGM and being eligible has offered himselffor re-appointment. The Nomination and Remuneration Committee and Board of Directorsrecommends his reappointment.
C. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
In compliance with the provisions of Section 149(6) of the CompaniesAct 2013 requisite declarations have been received from the Independent Directorsregarding meeting the criteria of Independence.
D. NUMBER OF BOARD MEETINGS AND COMMITTEES OF BOARD
The Board of Directors met six (6) times during the Financial Yearunder review viz. May 18 2019 August 10 2019 November 12 2019 February 11 2020February 19 2020 and February 24 2020. The maximum gap between any 2 meetings did notexceed 120 days.
A separate Meeting of Independent Directors was also conducted onFebruary 19 2020 without the presence of Non-Independent Directors and Management. Thedetails on Attendance during the Board Meetings and other Committee Meetings of the Boardof Directors are provided in Corporate Governance Report which forms part of theBoards' Report.
E. BOARD DIVERSITY AND POLICY ON DIRECTOR'S APPOINTMENT ANDREMUNERATION
The Company believes that building a diverse and inclusive culture isintegral to its success. A diverse Board will be able to leverage different skillsqualifications professional experiences perspectives and backgrounds which is necessaryfor achieving sustainable and balanced development. The Board has adopted a policy onNomination Remuneration 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 paymentof managerial remuneration Directors' qualifications positive attributesindependence of Directors and other related matters is enclosed to this Boards'Report as an Annexure - C.
F. PERFORMANCE EVALUATION OF BOARD COMMITTEE ANDDIRECTORS
In accordance with applicable provisions of the Act and ListingRegulations the evaluation of the Board as a whole committees and all the Directors wasconducted as per the internally designed evaluation process approved by the Board. Theevaluation tested key areas of the Board's work including strategy businessperformance risk and governance processes. The evaluation considers the balance ofskills experience independence and knowledge of the management and the Board itsoverall diversity and analysis of the Board and its Directors' functioning.
The evaluation methodology involves completion of questionnairesconsisting of certain parameters such as Evaluation factor Ratings and Comments if any.
The performance of entire Board is evaluated by all theDirectors based on Board composition and quality Board meetings and procedures Boarddevelopment Board strategy and risk management etc.
The performance of the Managing Director and Executive Directorsis evaluated by all the Board Members based on factors such as leadership strategyformulation strategy execution external relations etc.
The performance of Non- Executive Director and IndependentDirectors is evaluated by other Board Members based on criteria like managingrelationship knowledge and skill personal attributes etc.
It also involves self-assessment by all the Directors andevaluation of Committees of Board based on knowledge diligence and participationleadership team and management relations committee meetings and procedures respectively.
Further the assessment of Chairman's performance is doneby each Board Members on similar qualitative parameters.
The feedback of the evaluation exercise and inputs of Directors werecollated and presented to the Board and an action plan to further improve theeffectiveness and efficiency of the Board and Committees is put in place.
The Board as a whole together with each of its Committees was workingeffectively in performance of its key functions- Providing strategic guidance to theCompany reviewing and guiding business plans ensuring effective monitoring of themanagement and overseeing risk management function. The Board is kept well informed at alltimes through regular communication and meets once per quarter and more often as and whenthe need arises. Comprehensive agendas are sent to all the Board Members well in advanceto help them prepare and keep the meetings productive. The Company makes consistentefforts to familiarize the Board with the overall business performance covering allBusiness verticals by way of presenting specific performance of each Plant ProductCategory and Corporate Function from time to time.
The performance of the Chairman was evaluated satisfactory in theeffective and efficient discharge of his role and responsibilities for the day to daymanagement of the business with reference to the strategy and long term objectives.
The Executive Directors and Non-Executive Directors providedentrepreneurial leadership to the Company within a framework of prudent and effectivecontrols with a balanced focus on policy formulation and development of operationalprocedures. It was acknowledged that the management accorded sufficient insight to theBoard in keeping it up-to-date with key business developments which was essential for eachof the individual Directors to maintain and enhance their effectiveness.
G. RELATED PARTY TRANSACTION AND POLICY
All contracts/arrangements/transactions entered by the Company withrelated parties were in ordinary course of business and at arm's length basis.
All transactions with related parties were reviewed and approved by theAudit Committee and are in accordance with the Policy on Related Party Transactionsformulated by the Company. 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.
The details of the related party transactions as per IND AS - 24 areset out in Notes to the Financial Statements of the Company. The Company has formulated apolicy on Related Party Transactions which is available on the Company's website at http://www.lumaxworld.in/lumaxautotech/relatedparty-transaction-policv.pdf.
There were no materially significant related party transactions enteredinto by the Company with Promoters Directors or Key Managerial Personnel which may havea potential conflict of interest for the Company at large.
Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act 2013read with Rule 8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure- D of Boards' report.
H. COMPLIANCE MANAGEMENT FRAMEWORK
For monitoring and ensuring compliance with applicable laws by theCompany and for establishing adequate management control over the compliances of all actslaws rules regulations and regulatory requirements the Company has adoptedcomprehensive Compliance M an ual for structured control over applicable compliances byeach of the units of the Company.
The Company has a practice of obtaining a Statutory Compliance Reporton a monthly basis from various functional heads of respective units for compliance withlaws applicable to the respective function. A consolidated report on compliance withapplicable laws is presented to the Board every quarter. To take care of the continuouslyevolving compliance scenario the Company is constantly striving to strengthen thereporting system.
A separate corporate compliance management team periodically reviewsand monitors compliances by units and supports effective implementation of the same in atime bound manner. The Board and Audit Committee along with Compliance team periodicallymonitors status of compliances with applicable laws based on quarterly certificationprovided by senior management.
I. VIGIL MECHANISM-WHISTLE BLOWER POLICY
The Company has established a vigil mechanism named Whistle BlowerPolicy for Directors employees and business associates to report to the managementconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct or ethics policy in accordance with the provisions of theCompanies Act 2013 and Listing Regulations. The mechanism provides for adequatesafeguards against unfair treatment of whistle blower who wishes to raise a concern andalso provides for direct access to the Chairman of the Audit committee in appropriate/exceptional cases.
The Whistle Blower Policy is uploaded on the website of the Company. Tofurther strengthen this mechanism the Company has launched an Employee App which isavailable for both android and iOS users to facilitate easy expression of their opinions/suggestions/ complaints.
J. SECRETARIAL STANDARDS
The Board of Directors state that applicable Secretarial Standardsi.e. SS-1 and SS-2 relating to Rs Meetings of the Board of Directors' and Rs GeneralMeetings' respectively have been duly followed by the Company.
K. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act 2013 theDirectors state:
(i) that in the preparation of the Annual Accounts for the FinancialYear ended March 31 2020 the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures in the Auditor Report and Notes toAccounts;
(ii) that the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit and loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(iv) that the Directors have prepared the Annual Accounts on agoing concern basis.
(v) that the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
(vi) that the Directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
L. PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section 197of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms an integral part of this report asAnnexure - E. The information required pursuant to Section 197 of the CompaniesAct 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of your Company is available forinspection by the members at the registered office of the Company during business hours onworking days up to the date of ensuing Annual General Meeting. If any member is interestedin obtaining a copy thereof such member may write to the Company Secretary whereupon acopy would be sent.
M. AUDIT COMMITTEE & COMPOSITION
The composition of the Audit Committee is in alignment with provisionsof Section 177 of the Companies Act 2013 read with the Rules framed thereunder andRegulation 18 of the Listing Regulations. The members of the Audit Committee arefinancially literate and having experience of Financial Management.
The Audit Committee comprises of Mr. Arun Kumar Malhotra as ChairmanMr. Roop Salotra Mr. Milap Jain Mr. Avinash Parkash Gandhi and Mr. Anmol Jain asMembers.
Mr. Anil Tyagi acted as Secretary to the Audit Committee w.e.f. May 182019.
The Audit Committee of the Company reviews the reports to be submittedto the Board of Directors with respect to auditing and accounting matters. It alsosupervises the Company's internal control processes financial reporting and vigilmechanism.
All the recommendations made by the Audit Committee were accepted bythe Board of Directors of the Company.
IV. INTERNAL FINANCIAL CONTROLS AND ADEQUACY
A. Adequacy of Internal Financial Control with Reference to InternalFinancial Statement
The Company has a comprehensive internal control system to providereasonable assurance about the achievement of its objective reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedures laws and regulations safeguarding of assets and economical andefficient use of resources. Appropriate review and control mechanisms are built in placeto ensure that such control systems are adequate and are operating effectively.
The monitoring and reporting of financial transactions is supported bya web-based system SAP Hana which helps in obtaining accurate and complete accountingrecords and timely preparation of reliable financial disclosures at all levels of theorganization.
B. RISK MANAGEMENT POLICY
The Company has adopted an enterprise risk management policy andestablished a risk management framework with an objective of timely identificationmitigation and control of the risks which may threaten the existence of the Company inaccordance with the provisions of Companies Act 2013 and Listing Regulations. The Companyhas also constituted an internal Risk Management Committee to review the risk trendexposure potential impact and their mitigation plans and periodically the key risks arealso discussed at the Audit Committee.
C. CODE OF CONDUCT
In compliance with the Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations 2015 (the PIT Regulations') onprevention of insider trading your Company has revised its Code of Conduct to RegulateMonitor and Report Trading by Designated Persons.
The said Code lays down guidelines which advise Designated Persons onthe procedures to be followed and disclosures to be made in dealing with the shares of theCompany and cautions them on consequences of non-compliances. Your Company has alsoupdated its Code of practices and procedures of fair disclosures of unpublished pricesensitive information by including a policy for determination of legitimate purposes.Further your Company has put in place adequate & effective system of internalcontrols and standard processes have been set to ensure compliance with the requirementsgiven in these regulations to prevent insider trading.
The shareholders have approved the re-appointment of M/s S.R. Batliboi& Co. LLP (Firm Registration No. 301003E/E300005) Chartered Accountants as StatutoryAuditors of the Company in the 38th Annual General Meeting held on August 232019 to hold office till the conclusion of the 43rd Annual General Meeting ofthe Company to be held in the year 2024.
The Report given by the Statutory Auditors on the Financial Statementsof the Company is part of this Annual Report. The Auditor Report does not contain anyqualification reservation adverse remark or disclaimer.
The Board has re-appointed M/s Jitender Navneet & Co. (FirmRegistration No. 000119) as the Cost Auditors of the Company in accordance with Section148 and other applicable provisions if any of the Companies Act 2013 for the audit ofthe cost accounts of the Company for the Financial Year 2020-21.
The Cost Audit Report for the Financial Year 2018-19 has been filedwith the Central Government on September 11 2019.
Pursuant to the provisions of Section 204 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the Company has appointed Mr. Maneesh Gupta (Membership No. 4982) PracticingCompany Secretary as the Secretarial Auditor of the Company to undertake the SecretarialAudit for the Financial Year.
The Secretarial Audit Report of the Company and the Secretarial AuditorReport of Lumax Mannoh Allied Technologies Limited (Material Subsidiary of the Company)for the Financial Year 2019-20 in the prescribed Form MR-3 is annexed herewith as an Annexure- F. There has been no qualification reservation adverse remark or disclaimer givenby the Auditors in their Report.
Pursuant to Circular No. CIR/CFD/CMD1/27/2019 issued by Securities andExchange Board of India dated 8th February 2019 read with Regulation 24(A) ofListing Regulations all listed entities on annual basis are required to get a check doneby Practising Company Secretary (PCS) on compliance of all applicable SEBI Regulations andcirculars/ guidelines issued thereunder and get an Annual Secretarial Compliance Reportissued by a PCS in this regard which is further required to be submitted to the StockExchanges within 60 days of the end of the Financial Year. Due to the COVID 19 PandemicOutbreak SEBI vide its Circular number SEBI/ HO/CFD/CMD1/CIR/P/2020/38 dated 19thMarch 2020 had extended the said timeline by one month i.e. Annual SecretarialCompliance Report to be submitted to Stock Exchanges by 30th June 2020.
Accordingly the Company has complied with the above said provisions
In compliance with the provisions of Section 138 of the Companies Act2013 read with the Companies (Accounts) Rules 2014 your Company has appointed M/sDeloitte Touche Tohmatsu India LLP (Firm Registration No. AAE 8458) as Internal Auditorsfor the Financial Year 2019-20.
E. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION(12) OF SECTION 143 OF THE COMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TOTHE CENTRAL GOVERNMENT
There were no frauds which were reported by Auditors for the year underreview.
V. BUSINESS RESPONSIBILITY REPORT
As stipulated under the Listing Regulations the BusinessResponsibility Report (BRR') has been prepared and forms part of the AnnualReport as Annexure - G. The Report provides a detailed overview of initiativestaken by your Company from environmental social and governance perspectives.
VI. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICYAND INITIATIVES
Your Company is committed to grow and operate in a socially sustainablemanner and continue to give back to society. A well-outlined CSR program creates socialand environmental value thus impacting and improving the lives of communities. The keyfocus areas of your Company have been Education and Healthcare for disadvantaged sectionsof the society. The Company's focus areas are largely covered under Schedule VII ofthe Companies Act 2013. During the year the Company continued its support to theexisting schools by way of support on career counselling integrating students in schoolsproviding books and learning aids meals enhancing holistic education opportunities. Underits healthcare initiatives the Company is focusing on preventive healthcare bycontinuously organising health check-up camps lending financial support to hospitals forjuvenile diabetes cataract operations.
The Company has constituted a CSR Committee of the Board and alsodeveloped & implemented a CSR Policy in accordance with the provisions of CompaniesAct 2013. The Committee monitors and oversees various CSR initiatives and activities ofthe Company.
CONSTITUTION OF CSR COMMITTEE
The CSR Committee of the Board of Directors comprises of Mr. RoopSalotra as Chairman Mr. D.K. Jain and Mr. Deepak Jain as Members. Further the Board ofDirectors have also adopted the CSR Policy of the Company as approved by the CorporateSocial Responsibility Committee which is also available on the website of the Company at www.lumaxworld.in/lumaxautotech.
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 the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed herewith as an Annexure - H to thisReport in the prescribed format.
VII. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER SECTION 134 OF THECOMPANIES ACT 2013
Names of Companies which have become or ceased to be its SubsidiariesJoint Ventures or Associate Companies during the Year.
During Financial Year 2019-20 Lumax DK Auto Industries Limitedsubsidiary of the Company has been Merged with the Company in terms of the Hon'bleNational Company Law Tribunal Principal Bench order dated October 31 2019.
Lumax Jopp Allied Technologies Private Limited has been incorporatedw.e.f. June 25 2019 and it is a 50% subsidiary of the Company as per the Joint VentureAgreement (50:50) signed between the Company and Jopp Germany to manufacture Gear ShiftTowers AMT Kits & AGS.
Lumax Yokowo Technologies Private Limited has been incorporated w.e.f.February 20 2020 and it is a 50% subsidiary of the Company as per the Joint VentureAgreement (50:50) signed between the Company and Yokowo Japan to manufacture Antennas& other Vehicle Communication Products.
A. EXTRACT OF ANNUAL RETURN
In accordance with the requirement of Section 92 of the Companies Act2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 theextract of the annual return in Form MGT - 9 is annexed as an Annexure - I.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Transfer of Unpaid Dividend
Pursuant to the provisions of Section 124(5) of the Companies Act2013 read with the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016(the Rules') all unpaid or unclaimed dividends are required to be transferredby the Company to the IEPF established by the Central Government after the completion ofseven (7) years. Consequently your Company has transferred Rs 125508/- during the yearto the Investor Education and Protection Fund lying with it for a period of seven yearspertaining to the year 201112.
Transfer of Shares underlying Unpaid Dividend
Pursuant to the provisions of Section 124(6) of the Companies Act2013 the shares in respect of which Dividend has not been paid or claimed by theShareholders for seven (7) consecutive years or more shall also be transferred to theDemat account of IEPF Authority. During the year your Company had transferred 1230shares to the Demat Account of the IEPF Authority on November 28 2019 as per therequirement of IEPF Rules.
It may be noted that Unclaimed Dividend/Underlying shares for theFinancial Year 2012-13 can be claimed by the Members by September 26 2020. The Notice asstipulated pursuant to the provisions of Section 124 of the Companies Act 2013 read withIEPF (Accounting Audit Transfer and Refund) Rules 2016 will be published in theNewspaper inviting the attention of the Shareholders to claim their Dividends.
B. FIXED DEPOSITS
During the year under review the Company has not accepted any Depositunder Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
It is further stated that the Company does not have any deposits.
C. PARTICULARS OF LOANS GUARANTEES ANDINVESTMENTS
The particulars of loans guarantees and investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the Notes to FinancialStatements.
D. MATERIAL CHANGES AND COMMITMENTS
During the Financial Year under review there was no material changesand commitments except Merger of Lumax DK Auto Industries Limited with the Company.
E. INFORMATION ON CONSERVATION OF ENERGY TECHNOLOGY ABSORPTIONFOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosure of information regarding Conservation of Energy Research& Development Technology Absorption and Foreign Exchange Earning and Outgo etc. underSection 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules2014 is annexed as Annexure - J.
F. 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 itsfuture operations.
G. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
In accordance with the provisions of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 the Company has adopted thePrevention of Sexual Harassment at Workplace Policy and constituted anInternal Complaints Committee (ICC) for Prohibition Prevention and Redressal of SexualHarassment of Women at Workplace and matters connected therewith or incidental theretocovering all the related aspects.
The Committee meets as and when required however minimum one meetingis ensured during the Financial Year to discuss strengthening safety of employees atworkplace and also to resolve/ address related issues if any reported during the year.
During the year under review i.e. 2019-20 Fifteen (15) Meetings of ICCacross all plant locations were held. Further as per the applicable provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 yourCompany continues to submit Annual Report to the District Officer consisting of details asstipulated under the said Act.
H. ENVIRONMENT HEALTH & SAFETY
The Company focus on Safety Culture Building by maintainingthe Safety Management System to reduce the risk of incident and Injuries. Thissystem includes safety rules safety procedures safety training hazard identificationcorrection incident reporting and investigation capturing near miss accidents safetycommunications and safety suggestions.
Safety Management System contribute not only to improve the workplacesafety but it also influence the organization Safety Culture.
Apart from the above your Company has also performed below activitiesin Financial Year 2019-20 sincerely:
1. ST/ Duct cleaning for locations where paint material & chemicalsare being used
2. Safety Gemba Audit and monitoring all critical Points
3. Regional Safety Meeting at all regions
4. KYT - Kiken Yochi Training (Identifying hazard and taking correctivemeasures with the help of actual users)
5. Hazards specific Safety training (Fire Fighting First AidElectrical Safety Chemical & Machine Safety Risk Assessment & Evacuation Drill)
6. Prepared Safety manual for Standard Operating Procedures
7. Identified probable emergency and prepared Emergency Response Manual
8. Prepared standard KYT Manual
9. Performed Comprehensive Inspection of all chemical storage areasaccording to the check point and necessary display system
10. Comprehensive review / surveillance audit done as per ISO 14001(Environment Management System) and ISO 18001 (Occupational Health & Managementsystem)
From the last two years the Company also commenced the Fire RiskAssessment Audit for Tier-2 Suppliers to reduce the fire related incident and achievedsignificant OK result this year also started the Safety Audit for Tier-2 suppliers toreduce the human injury and also monitoring the injury status. Delivered the awarenessprogram to the suppliers related to Fire and Safety.
By ensuring all the above zero accident level is maintained for lastthree years. Induction programme & regular training of employees and the introductionof formal safety management system help the Company to mitigate future incidents.
I. CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to theGovernment. During the year under review the Company paid all its statutory dues &presently no dues are outstanding more than six months. The Company ensures payment of alldues to exchequer well within timeline as applicable.
It is our belief that we have a leadership team with the rightexperience and skills to take us into the next decade of growth. We continue to build ourskills and add appropriate resources which will help the Company deliver solid results inthe years to come. Your Directors place on record their appreciation for the continuedcooperation and support extended to the Company by its highly valued customers JointVenture Partners all the shareholders financial institutions & Banks variousGovernment Agencies.
Your Directors also wish to place on record their sincere thanks andappreciation for the continuing support and unstinting efforts of vendors dealersbusiness associates and employees in ensuring an excellent all around operationalperformance.
|For and on behalf of the Board of Directors of |
| ||Lumax Auto Technologies Limited |
| ||D.K. Jain |
|Place: New Delhi ||Chairman |
|Dated: June 17 2020 ||DIN: 00085848 |