Your Directors are pleased to present the 37th Annual Report on the businessand operations together with Audited Balance Sheet and Profit & Loss Account of yourCompany for the year ended 31st March 2018.
1. Financial Performance
Rs. in Lakhs
|Particulars ||Standalone ||Consolidated |
| ||2017-18 ||2016-17 ||2017-18 ||2016-17 |
|Revenue from Operations ||169176.59 ||142589.38 ||169176.59 ||142589.38 |
|Other Income ||925.43 ||649.94 ||546.05 ||600.45 |
|Total Income ||170102.02 ||143239.32 ||169722.64 ||143189.83 |
|Total Expenses ||161309.74 ||137763.86 ||161309.74 ||137763.86 |
|Profit Before Tax and Share in Net Profit of Associate ||8792.28 ||5475.46 ||8412.90 ||5425.97 |
|Profit of Associate ||- ||- ||1342.04 ||1053.02 |
|Profit Before Tax ||8792.28 ||5475.46 ||9754.94 ||6478.99 |
|Tax Expenses ||2468.59 ||863.78 ||2618.71 ||1041.89 |
|Profit For the period ||6323.69 ||4611.68 ||7136.23 ||5437.10 |
|Total other Comprehensive Income ||152.97 ||117.88 ||152.97 ||117.88 |
|Total Comprehensive Income ||6170.72 ||4493.80 ||6983.26 ||5319.22 |
|Paid-up Equity Share Capital ||934.77 ||934.77 ||934.77 ||934.77 |
|Earning Per Share (EPS) (not annualized) ||67.65 ||49.33 ||76.34 ||58.17 |
|Basic/Diluted EPS || || || || |
(Financial Results for the year ended 31st March 2018 are in compliance withIndian Accounting Standards (Ind AS) prescribed under Section 133 of The Companies Act2013 and previous year figures for the year ended 31st March 2017 have beenrestated to make them comparable.)
(a) Company Performance
The Indian Automobile Industry is one of the largest in the world accounting for 7.1per cent of the Country's Gross Domestic Product (GDP). It is currently the seventhlargest automobile producer in the world second largest two-wheeler manufacturer and thefifth largest commercial vehicle manufacturer in the world.
During the Financial Year 2017-18 the overall Indian Automobile Industry registered aproduction growth of 14.78 per cent as compared to 5.41 per cent over the same period lastyear. The industry manufactured around 29.08 Million vehicles and the Domestic MarketShare was as per the graph 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 the growth of 18.64% for Revenue fromoperations. For the Financial Year 2017-18 the Profit before Tax stood at Rs. 8792.28Lakhs as compared to Rs. 5475.46 Lakhs in the previous year witnessing a significantgrowth of 60.58%. The Profit for the period (after Tax) was recorded at Rs. 6323.69 Lakhsrecording the growth at 37.12%. The Basic and Diluted Earning per share also grew by37.14%.
The Revenue from Operations grew by 18.64% whereas the Profit Before tax (PBT) andProfit for the Period showed a considerable increase by 50.56% & 31.25% respectivelyamounting to Rs. 9754.94 Lakhs & Rs. 7136.23 Lakhs respectively. The Basic and DilutedEarning per share also grew by 31.24%.
Your Company continues to deliver pride and progress with positivity and demonstratingit by way of consistently paying Dividend. The Board in its Meeting held on 28thMay 2018 recommended Dividend of 230% (` 23.00/- per Equity Share) for the Financial Year2017-18 (` 14.50/- per Equity Share in the previous year).
The above proposal is subject to the approval of Shareholders at the forthcoming AnnualGeneral Meeting (AGM) to be held on 18th July 2018.
The total amount of Dividend proposed to be distributed amounts to Rs. 2587.70 Lakhs(Including Dividend Distribution Tax) as against Rs. 1631.30 Lakhs in the previous year.The Dividend pay out ratio comes to 40.92%.
A sum of Rs. 880 Lakhs has been voluntarily transferred to the General Reserve of theCompany which is an appropriation out of profits of the Company. This reaffrms theinherent financial strength of your Company.
(d) Associate Company & Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its Associate are prepared inaccordance with Indian Accounting Standards notified under the Companies (IndianAccounting Standards) Rules 2015 (Ind AS') form part of theAnnualReportandarereflectedintheConsolidated Financial Statements of the Company.
The Consolidated Financial Statements reflect the status of S.L. Lumax Limited which isan Associate Company in which your Company holds 21.28% of total Equity Capital. TheAssociate is based in Chennai and engaged in business of manufacturing of Auto Parts whichincludes auto lamp assemblies chassis mirror and Front-End Modules (FEM).
During the year under review the Associate achieved Total Revenue of Rs. 111276.97Lakhs as against Rs. 107448.97 Lakhs in the year 2016-17.
A report on performance and financial position of Associate Company included in theConsolidated Financial Statement is presented in a separate section in this Annual Reportin the format AOC-1.
The Audited Financial Statements including the Consolidated Financial Statements andrelated information are available on the website of the Company i.e.www.lumaxindustries.com. These documents shall also be available for inspection by anyShareholder at the registered offce of the Company.
2. State of Company's Affairs
The Financial Year 2017-18 has been one of the historic period for the Company in termsof growth and changes in regulatory reforms both qualitatively and quantitatively. Thesecond half of the fiscal year was quite eventful as your Company witnessed and achievedtwo important milestones: Unveiling of New Brand Identity and Inauguration of NewManufacturing Facility in Sanand Gujarat within a record time.
Your Company unveiled the New Brand Identity on 8th November 2017 the newrefreshed logo and the visual brand identity epitomises our journey and shall serve as thetorchbearer of future growth and aspirations it also rearticulated the Group Purpose andVision.
During the year we commenced manufacturing operations in Sanand by expanding ourfootprint further in Gujarat. With this addition Lumax now has nine (9) State-of-Artmanufacturing plants across the Country in 5 states. Keeping in view the growthopportunities and expansion possibilities your Company has pre-emptively acquiredlandbank in the industrial area of Vasna Kunpur in Gujarat for future expansion in theState.
In the recent years the move to BSVI is proving to be the catalyst for the growth ofLED market most OEMs are adopting LED lighting. The Automotive LED lights arefast-growing necessity and proactively keeping pace with this fast-changing industry need.Your Company has focused significantly on manufacturing defect free LED lamps by creatingElectro-Static Discharge Zones (ESD) in all its manufacturing units and is focusing oncontinuous upgradation of skills to maintain the level of Zero defect' through itsvarious training programmes.
Our efforts to have deeper outreach and cater to almost all OEMs domesticallycontinued fervently throughout the year. Your Directors are pleased to inform that duringthe year your Company added two major OEMs as customers to its portfolio viz. MG MotorsIndia & TVS Motors. This is in line with your Company's vision to advance growth. Wealso introduced wide innovative range of Head Lamps Tail Lamps Front Turn Signal Lampsetc.
One of the significant and important changes in the Indian business environment i.e.Implementation of Goods and Service Tax (GST) was effciently and smoothly managed by theCompany. The transition to Ind AS from Indian GAAP was another historic landmark changethat has been proficiently implemented by the team and did not pose any significant impacton the Financials of the Company.
Owning 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 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)
Transition from Indian GAAP to Ind AS
India has joined the elite club of nations that have adopted the internationallyrecognized accounting norms and financial reporting standards. The steps to this milestonecan be traced to almost a decade of efforts by several authorities and professionals andseveral practical challenges that encountered at various stages.
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 1st April 2016. Post above notification Ind AS hasreplaced existing Indian GAAP prescribed under Section 133 of The Companies Act 2013read with Rule 7 of the Companies (Accounts) Rules 2014 according to applicability onspecified entities. Accordingly this is first year when the Company's financialstatements for the year ended 31st March 2018 have been prepared in accordancewith Ind AS and the financial statements for the year ended 31st March 2017 andopening balance sheet as at 1st April 2016 (the Company's date oftransition) earlier reported in previous IGAAP have been restated in accordance withInd-AS to make them comparable.
(b) Goods and Service Tax (GST) - Implementation and Impact
The year 2017-18 started with biggest ever tax reform since independence rolled out byGovernment of India on 1st July 2017 i.e. implementation of Goods and ServiceTax (GST) followed by changes in GST rates through various notifications in November2017. GST implementation has introduced a single system of taxation across the nationabsorbing most of the Indirect Taxes. GST is touted to simplify doing business in Indiaallowing supply chains to be integrated and aligned as also providing greatertransparency. However the initial implementation phase alike all other industriesremained challenging.
Though expecting this new Tax regime to be a game changer for Indian Economy yourCompany has stabilised the processes adequately for compliance of law and is embracingthis reform positively that unifies India into one market.
(c) Capacity Expansion / Modernisation of Facilities
During the year under review the Company has made an investment to the tune of Rs.16263.00 Lakhs towards up-gradation of its Research and Development facilitiesmodernization of its existing manufacturing facilities including its Dharuhera Bengaluruplants and setting up of Sanand plant.
The Company inaugurated its Nineth (9th) Lighting Manufacturing unit atSanand Gujarat; the State-of-Art automated facility has been setup with an initialcapacity of 300000 car sets annually. This plant was setup in record time of eightmonths and had commenced its Commercial Production with effect from 10thJanuary 2018.
Further your Company has proactively invested in land in Vasna- Kunpur Ahmedabad tomeet any future demands of its customers and enhance capacities.
A detailed discussion on the business performance and future outlook is provided in theManagement Discussion & Analysis Report (MDA) which is provided as an Annexure Ato this Report.
(d) Technology and Quality
Your Company continues to excel in design development and new product launches inline with its strategy towards delivering competitive advantage to the customer and alsoto meet its business objectives. The Management ensures that the Engineers of your Companyare fully aligned with the organization's strategy and towards this end the Companycelebrates 15th September as Innovation day as a tribute to the greatestengineer Bharat Ratna Late Shri M. Visvesvaraya. This step will ensure building in-houseengineering and design capability and also timely launch of new products.
In order to continuously create value for our customers in today's intense competitiveenvironment your Company continues to adhere to Zero Defect & Zero Effect initiativeto deliver products following a first time right approach. This will help in improvementin quality reduction in rejection cost and thereby optimize cost structures across yourCompany.
(e) Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Management Discussion & Analysis Report isannexed as part of this Report separately as an Annexure A.
(f) Change in the Nature of Business If Any
There was no change in the nature of business of the Company during the Financial Yearended 31st March 2018.
3. 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
(b) Directors & Key Managerial Personnel Appointments
The Company in its Board Meeting held on 3rd February 2018 had appointedMr. Tadayoshi Aoki (DIN: 08053387) nominated by Stanley Electric Co. Ltd. as an AdditionalDirector to be designated as Senior Executive Director for a period of 3 years liable toretire by rotation with immediate effect which is subject to his regular appointment inthe ensuing Annual General Meeting. The said appointment was recommended by Nomination andRemuneration Committee of the Board.
Mr. Tadayoshi Aoki aged 52 years is a Mechanical Engineer from Tokyo Denki UniversityJapan possessing over 28 years of rich experience in the field of Car ElectronicsEngineering Sales of car electronic parts and Sales Planning Division.
The Company on recommendation of Nomination and Remuneration Committee and in its BoardMeeting dated 31st March 2018 had appointed Mr. Vineet Sahni (DIN: 03616096)as an Additional Director to be designated as CEO & Senior Executive Director of theCompany with effect from 1st April 2018 for a period of 5 years liable toretire by rotation.
Mr. Vineet Sahni is a B.E. Mechanical from Delhi College of Engineering and PG Diplomain Management from MSPI - Delhi. He has vast experience of successful Mergers &Acquisitions managing overseas partner relationships setting-up Greenfield projectsrich organisational turnarounds establishing strong relationships with OEMs acrosssegments - domestic & global having a 360-degree holistic approach to continuallyenhance stakeholder value.
The Board appointed Ms. Ankita Gupta as Company Secretary of the Company w.e.f.February 3 2018. She is a Law Graduate and an Associate Member of The Institute ofCompany Secretaries of India (ICSI) having about 4.5 years of experience and knowledge insecretarial/legal functions.
In accordance with the Articles of Association of the Company and Section 152 of TheCompanies Act 2013 Mr. Koji Sawada (DIN: 07582189) Executive Director is due to retireby rotation at the ensuing Annual General Meeting and being eligible offer himself forre-appointment.
During the year Mr. Eiichi Hirooka (DIN: 03570733) Senior Executive Directorceased to be a Director of the Company w.e.f. 3rd February 2018. The Board ofDirectors place on record its appreciation towards Mr. Hirooka's contributions during histenure as Senior Executive Director of the Company.
Mrs. Pallavi Dinodia Gupta (DIN: 03570733) Independent Director on the Board of theCompany ceased to be Director of the Company w.e.f. 28th May 2018. The Boardof Directors place on record its appreciation towards her contributions during her tenureas an Independent Director of the Company.
Mr. Shwetank Tiwari ceased to be Company Secretary of the Company w.e.f. 12thNovember 2017. The Board took note of same in its Board Meeting held on 3rdFebruary 2018.
(c) Number of Meetings of Board of Directors
The Board of Directors met Five (5) times during the Financial Year under review viz.13th May 2017 22nd July 2017 4th November 2017 3rdFebruary 2018 and 31st March 2018. The maximum gap between any 2meetings did not exceed 120 days.
A separate Meeting of Independent Directors was also conducted on 19th March2018 without 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 Boards' Report as an AnnexureB.
(d) 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 31stMarch 2018 the applicable Accounting Standards have been followed along with properexplanation relating to material 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 the
Financial Year and of the profit and loss of the Company for that period;
(iii) that the Directors have taken proper and suffcient 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.
(e) Statement on Declaration given by Independent Directors In compliance with theprovisions of Section 149 (6) of The Companies Act 2013 requisite declarations have beenreceived from the Independent Directors regarding Meeting the criteria of Independence.
(f) Policy on Appointment and Remuneration of Directors
Pursuant to the provisions of section 178(1) of the Companies Act 2013 the Board ofDirectors of the Company have approved a policy on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided u/s 178(3) based on the recommendations of theNomination and Remuneration Committee.
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
(g) Performance Evaluation of Board Committee and Directors
In accordance with applicable provisions of The Companies Act 2013 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 business performancerisk and governance 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 ofcertain parameters 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 byall the Board Members based on factors such as leadership strategy formulation strategyexecution external relations etc.
The performance of Non-Executive Director and Independent Directors is evaluatedby other Board Members based on criteria like managing relationship Knowledge and skillpersonal attributes etc.
It also involves self-assessment by all the Directors and evaluation ofCommittees of Board based on knowledge diligence and participation leadership team andmanagement relations Committee Meetings and procedures respectively.
Further the assessment of Chairman's performance is done by each Board Memberon similar 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 andeffciency 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 ensure the meetings are 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 andeffcient 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 Directorsand Non-executive Directors provided entrepreneurial leadership to the Company within aframework of prudent and effective controls with a balanced focus on policy formulationand development of operational procedures. It was acknowledged that the managementafforded suffcient insight to the Board in keeping it up-to-date with key businessdevelopments which was essential for each of the individual Directors to maintain andenhance their effectiveness.
(h) Audit Committee & Composition
As at 31st March 2018 the Audit Committee of Board comprised of seven (7)Members viz.
Mr. A.P. Gandhi Mr. M.C. Gupta Mr. D.D. Gupta Mr. Rattan Kapur Mrs. Pallavi DinodiaGupta Mr. Deepak Jain and Mr. Tadayoshi Aoki. The details regarding changes and categoryof Members of Audit Committee had been stated in Corporate Governance Report which formspart as an Annexure B to this Report.
All the recommendations of Audit Committee made to the Board of Directors were dulyaccepted by it.
(i) Particulars of Contracts or Arrangements with Related Parties
For the Financial Year 2017-18 all the Related Party Transactions entered into by theCompany were in ordinary course of business and at arms-length basis. All Related PartyTransactions which are foreseen and repetitive in nature are placed before the AuditCommittee on a yearly basis for obtaining prior omnibus approval of the Committee.
The transactions entered into pursuant to the omnibus approval are placed before theAudit Committee for review and approval on quarterly basis. All Related Party Transactionsare subjected to independent review by a reputed accounting firm to establish compliancewith the provisions of The Companies Act 2013 and SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 (Listing Regulations).
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.
However details of RPT undertaken by the Company which fall under the purview of"Materiality" as per Listing Regulations are attached in Form AOC-2 as an AnnexureD to this Report.
Further the Shareholder approval on such Material RPT is proposed in the ensuingAnnual General Meeting as stated under Regulation. The Company has formulated a policy onRelated Party Transactions which is available on the Company's website athttp://www.lumaxindustries.com/pdf/ related-party-transaction-policy.pdf.
(j) 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 The Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The mechanism provides for adequate safeguards against unfair treatment of WhistleBlower who wishes to raise a concern and also provides for direct access to the Chairmanof the Audit committee in appropriate/ exceptional cases.
The Whistle Blower Policy is uploaded on the website of the Companywww.lumaxindustries.com.
To further strengthen this mechanism the Company has launched an Employee App which isavailable for both android and iOS users to facilitate easy expression of theiropinions/suggestions/ complaints.
(k) 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 offce 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.
(l) Compliance Management Framework
Your Company has a robust and effective framework for monitoring compliances withapplicable laws. The Company has adopted comprehensive Compliance Manual for structuredcontrol over applicable compliances by each of the units of the Company.
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.
4. Internal Financial Controls & Adequacy
(a) Adequacy of Internal Financial Control with Reference to Internal FinancialStatement
The Company has a comprehensive Internal Control System in place to ensure reliabilityof financial reporting orderly and effcient conduct of business compliance withpolicies procedures safeguarding of assets and economical and effcient use of resources.Appropriate review and control mechanisms are built in place to ensure that such controlsystems are adequate and operate effectively.
The Company periodically conducts physical verification of its inventory fixed assetsand cash on hands and matches it with the books of accounts. Explanations are sought forany variances notices from the respective functional heads.
The Company has adopted accounting policies which are in line with the IndianAccounting Standards notified under Section 133 of The Companies Act 2013 read togetherwith the Companies (Indian Accounting Standard) Rules 2014. Changes in AccountingPolicies if any are approved by the Audit Committee in consultation with the statutoryAuditors.
The Company get its Standalone and Consolidated Financial Statements reviewed everyquarter by its Statutory Auditors.
The Company uses an established SAP ERP HANA Systems to record day to day transactionsfor accounting and financial reporting. The SAP system is configured to ensure that alltransactions are integrated seamlessly with the underline books of accounts which helpsin obtaining accurate and complete accounting records and timely preparation of reliablefinancial disclosures.
(b) 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 The Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Company has also constituted a Risk ManagementCommittee to review the risk trend exposure potential impact and their mitigation plansand periodically the key risks are also discussed at the Audit Committee.
M/s. BSR & Associates LLP Chartered Accountants were appointed as StatutoryAuditors of your Company at the Annual General Meeting held on 22nd July 2017for a term of five consecutive years i.e. till the conclusion of 41st AnnualGeneral Meeting to be held in the year 2022.
In accordance with The Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting.
Statutory Auditors Report
The Report given by the Statutory Auditors on the Financial Statement of the Company ispart of this Annual Report. The Auditor Report does not contain any qualificationreservation adverse remark or disclaimer.
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.
Cost Audit Report
The Cost Audit Report for the Financial Year 2016-17 has been filed with the CentralGovernment within the stipulated time on 21st August 2017.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Maneesh Gupta Practicing Company Secretary as the Secretarial Auditorof the Company to undertake the Secretarial Audit for the Financial Year 2017-18.
Secretarial Audit Report
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.
(d) Details in Respect of Frauds Reported by Auditors under sub-section (12) of section143 of The Companies Act 2013 other than those which are Reportable to the CentralGovernment: There were no frauds which were reported by Auditors for the year underreview.
5. Corporate Social Responsibility (CSR) Policy and Initiatives
Your Company's Corporate Social Responsibility (CSR) is to give back to society andcontribute to Nation Development through its initiatives.
The Company's CSR initiatives are implemented through its CSR arm/ trust LumaxCharitable Foundation with focus on education empowerment of girl child througheducation and the healthcare for disadvantaged section of society. During the year yourCompany's spend on CSR activities is 2.03% of the average net profits during the threeimmediately preceding Financial Years.
The Company has constituted a CSR Committee of the Board and also developed &implemented a CSR Policy in accordance with the provisions of The Companies Act 2013. TheCommittee monitors and oversees various CSR initiatives and activities of the Company. Thedetails of CSR Policy is available on the Company's websitehttp://www.lumaxindustries.com/pdf/CSR-policy.pdf.
(a) Key Activities Education:
Working towards our endeavour to provide holistic education the foundation workstowards enrolment of girl child in schools provides learning aids starter kitsexcursion trips and festival celebration as also infrastructure support after assessingthe needs like construction of classrooms science laboratories sanitation facilitiesproviding potable water etc. Inclusive learning opportunities like that of e-learning isprovided at the schools adopted by the foundation. The foundation also provides end-to-endcareer counselling that includes aptitude tests orientation sessions one-on-onecounselling sessions etc. for students on the threshold of choosing career optionshelping them choose suitable careers.
The Foundation has been operating a charitable Homeopathic clinic organisingspecialised health camps in association with I-Care to conduct eye screening and providecataract surgeries free of cost.
In association with Indian Cancer Society the foundation has organized several cancerawareness camps and screening camps around our plants. The screening process includesblood profile and physical examination by a surgeon gynecologist and ENT specialist asalso radiology examination.
(b) Constitution of CSR Committee
During the Financial Year 2017-18 the Company has constituted CSR Committee of theBoard of Directors which comprised of five (5) Members namely Mr. M.C. Gupta Mr. A.P.Gandhi Mr. D.K. Jain Mr. Deepak Jain and Mr. Anmol Jain. Further the Board of Directorshave also adopted the CSR Policy of the Company as approved by the Corporate SocialResponsibility Committee which is also available on the website of the Company atwww.lumaxindustries.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.
6. Other Disclosures
(a) Material Changes and Commitments
No other material changes and commitments affecting the Financial position of theCompany have occurred between 1st April 2017 and the date on which this Reporthas been signed except that the Company has in its Board Meeting dated 28th May2018 has approved purchase of Industrial Land in Bawal Haryana for setting up electronicsbusiness from one of its Group Company.
(b) Particulars of Loans Guarantees and Investments The particulars of loansguarantees and investments as on 31st March 2018 are covered under theprovisions of Section 186 of The Companies Act 2013 is given in the Notes to Financialstatements of the Company.
(c) Information on Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
In today's world the Conservation of Energy has become need of an hour. With thegrowing operations the commitment of the Company towards Energy Effciency andconservation also continues to gain momentum. Your Company has a dedicated team in placewhich conducts significant in-house audits in various manufacturing units to assess andidentify the possible areas for Energy Conservation and Management. These audits arefurther reviewed by External Agencies who with their expertise and technical know how inthe said area aid in better analysis of the areas having scope for Energy Conservation.
During the Financial Year under review innovative ways and new technologies wereconstantly explored to achieve an optimum balance between the operations of the Companyand the energy being used for running those operations. Lately the concept of Internet ofThings (IoT) which has evolved due to convergence of multiple technologies real-timeanalysis real time equipment energy effciency monitoring commodity sensors embeddedsystems etc. has gained wide importance and acceptance. Keeping its pace in line withIoT the Company successfully implemented an Energy Management I- Cloud software in itstwo (2) units viz. Bawal and Chakan which tracks actual consumption of energy on real timebasis and enables to identify excess energy being used or any other related errors in theunit which was successfully commissioned during the Financial Year 2017-18.
As a way forward your Company shall continue to remain conscious of the environmentalimpact of its business activities and has plans to install the software across all itsother units to have a uniform and enhanced focus towards Conservation of Energy.
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
(d) Extract of Annual Return
In accordance with the requirement of Section 92 of The Companies Act 2013 read withRule 12 of The Companies (Management and Administration) Rules 2014 the extract of theannual return in Form MGT-9 is annexed as an Annexure I.
(e) Details of 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.
(f) Names of Companies which have become or ceased to be its Subsidiaries JointVentures or Associate Companies during the Year During the Financial Year 2017-18there were no Companies which became Subsidiary or Joint Venture of the Company neitherthe Associate Company ceased to be an Associate of the Company.
(g) 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 Grant Thornton India LLPas Internal Auditors for the Financial Year 2017-18.
(h) Significant and Material Orders Passed by the Regulators or Courts
There are 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) Policy on Sexual Harassment
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 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 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 Twenty-three (23) meetings of ICC across allplant locations were held. Further as per the applicable provisions of Sexual Harassmentof Women at Workplace (Prevention Prohibition and Redressal) Act 2013 your Companycontinues to submit Annual Report to the District Offcer consisting of details asstipulated under the said Act.
(j) Environment Health Safety
The Company works with full focus on "Safety Culture Building" by maintaininga number of Safety Management Systems to manage the risk and as a result reduction innumber of incidents and injuries. These systems include safety rules safety proceduressafety training hazard identification and correction incident reporting andinvestigation capturing near miss accidents safety communications and safetysuggestions. Each Safety Management System has an important contribution to not onlyimproving workplace safety but also influencing the organization's safety culture. Apartfrom the above your Company is also performing below activities sincerely since 2015:
Regional Safety Meeting for all regions.
ST/ Duct cleaning for locations where paint material & chemicals are used
KYT - Kiken Yochi Training (Identifying hazard and taking corrective measureswith the help of actual users)
Safety Gemba Audit (Identifying the potential hazard)
Hazards specific Safety training
Maintaining Standard Operating Procedures
The Company has Constructed world class lacquer storage room to store the hazardouschemical safely (where flammable liquids\chemicals are used) and installed SprinklerSystem in Surface Treatment all across.
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.
During the year under review our Manufacturing Units situated in Gurugram DharuheraBawal Chakan and Bangalore achieved OHSAS Certification.
(k) Investor Education and Protection Fund Transfer of Unpaid Dividend
Pursuant to the provisions of Section 124(5) 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. 370590 / 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 ofSection 124(6) the shares in respect of which Dividend has not been paid or claimed bythe Shareholders for Seven (7) consecutive years or more shall also be transferred to theDemat Account of IEPF Authority. Accordingly 59964 Shares underlying Unpaid Dividend havebeen transferred as per the requirement of IEPF Rules.
It may be noted that Unclaimed Dividend/ Underlying shares for the Financial Year2010-11 declared on 9th August 2011 can be claimed by the Members by 13thSeptember 2018. The Notice as stipulated pursuant to the provisions of Section 124of Companies Act 2013 read with IEPF (Accounting Audit Transfer and Refund) Rules 2016has been published in the Newspaper inviting the attention of the Shareholders to claimtheir Dividends.
(l) Unclaimed Suspense Account
During the year under review there are 10 Shareholders who approached the Company forrelease of their Shares from the Unclaimed Suspense Account and the Company has releasedtotal 407 Shares from the Unclaimed Suspense Account. As at 31st March 2018there are 5123 Shares lying in the Unclaimed Suspense Account.
(m) 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.
We would like to thank to all our Stakeholders viz. Shareholders Investors Bankerscustomers suppliers Government agencies stock exchanges and depositories Auditorslegal advisors consultants business associates service providers for their continuedcommitment and invincible enthusiasm which made this year productive and pleasurable. TheBoard also places on record their deep sense of appreciation towards all its Employees atall levels for adopting the values of the Company and their hard work during the year anda sincere thanks to its Technical & Financial Collaborator- Stanley Electric Co. Ltd.for their continued support and patronage throughout the year.
For and on behalf of the Board of Directors of
Lumax Industries Limited
Chairman & Managing Director
Place : New Delhi
Dated : 28th May 2018