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Lumax Industries Ltd.

BSE: 517206 Sector: Auto
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OPEN 1260.40
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P/E 24.70
Mkt Cap.(Rs cr) 1,200
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OPEN 1260.40
CLOSE 1239.95
52-Week high 1653.00
52-Week low 840.00
P/E 24.70
Mkt Cap.(Rs cr) 1,200
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lumax Industries Ltd. (LUMAXIND) - Director Report

Company director report


The Board of Directors ("Board") have pleasure in presenting the 40thAnnual Report on the business and operations together with Audited Financial Accounts ofthe Company ("the Company") for the Financial Year ended 31 March 2021.


The highlights of standalone and consolidated financial performance of the Company areas follows:

(Rs. in Lakhs unless otherwise stated)


Standalone For the Financial Year

Consolidated For the Financial Year

31 March

31 March

2021 2020 2021 2020
Revenue from Operations 142598.07 160158.72 142598.07 160158.72
Other Income 2523.38 966.19 2523.38 735.27
Total Revenue 145121.45 161124.91 145121.45 160893.99
Total Expenses 141969.47 152929.65 141969.47 152929.65
Profit before exceptional items income tax and share in profit/(loss) of associate 3151.98 8195.26 3151.98 7964.34
Profit of Associate - - 154.09 1208.76
Profit Before Tax (PBT) 3151.98 8195.26 3306.07 9173.10
Tax Expenses 1448.13 964.57 1490.84 1983.42
Profit After Tax (PAT) 1703.85 7230.69 1815.23 7189.68
Other Comprehensive Income/(Loss)Items that will not be re-classified to profit or loss
- Remeasurement of defined benefit liability/asset 126.54 (94.38) 142.12 (68.79)
- Income Tax relating to above - - - -
Net other Comprehensive Income/(Loss) 126.54 (94.38) 142.12 (68.79)
Total Comprehensive Income 1830.39 7136.31 1957.35 7120.89
Paid-up Equity Share Capital 934.77 934.77 934.77 934.77
Earnings Per Share 18.23 77.35 19.42 76.91
Basic/Diluted EPS (In Rs.)



The year under review was a challenging year on account of Pandemic COVID-19. Firstquarter of the year was almost washed out with negligible revenue. Second quarterregistered slight recovery. However during the third quarter and fourth quarter therewas a ‘V’ Shaped recovery which compensated majority of the losses su_eredduring the first half of the financial year. During the year under review the Companyachieved revenue from operations of Rs. 142598.07 Lakhs which was lower by 10.96% fromthe last financial year.

For the FY 2020-21 the profit before tax (PBT) stood at Rs. 3151.98 Lakhs as comparedto Rs. 8195.26 Lakhs in the last year. The Profit after Tax (PAT) stood at Rs. 1703.85Lakhs as compared to Rs. 7230.69 Lakhs in the last year. The Total Comprehensive Incomedeclined to Rs. 1830.39 Lakhs from Rs. 7136.31 Lakhs in the last year.


At the consolidated level the Revenue from Operations declined by 10.96% whereas theProfit before tax (PBT) and Profit after tax (PAT) for the Period stood at Rs. 3306.07Lakhs and Rs. 1815.23 Lakhs respectively. The Total Comprehensive Income stood at Rs.1957.35 Lakhs.


The paid-up Equity Share Capital as on 31 March 2021 was Rs. 934.77 Lakhs. During theyear under review the Company has not issued shares or granted stock options or sweatequity.


Your Board have recommended a Dividend @ Rs. 7/- per equity share (i.e. 70%) havingface value of Rs. 10/- each for the FY 2020-21 in its meeting held on 11 June 2021 subjectto approval of Shareholders in the ensuing AGM ("AGM"). The Total Dividend paidfor the last financial year was Rs. 23.50/- per Equity Share (i.e. 235%) having face valueof Rs. 10/- each.

The total dividend pay-out for the FY 2020-21 would work out to Rs. 654.34 Lakhs whichis equivalent to 38.40% of the net profits of the Company during the year as against thepay-out of Rs. 2532.97 Lakhs (including Corporate Dividend Tax of Rs. 336.25 Lakhs) inlast FY 2019-20. The Register of Members and Share Transfer Books shall remain closed fromTuesday 24 August 2021 to Tuesday 31 August 2021 (both days inclusive).

The dividend as recommended by the Board if approved by the shareholders at theensuing AGM shall be paid to the eligible Shareholders whose names appear in the Registerof Members as on Monday 23 August 2021 within the stipulated time period.


The Board of the Company do not propose to transfer any amount to reserve other thantransfer of undistributed profits to surplus in statement of profit & loss.


The Company has one Associate Company viz. SL Lumax Limited which was incorporated inthe year 1997. The Company holds 21.28% in equity share capital of SL Lumax. SL Lumax isbased in Chennai and primarily engaged in manufacturing of automotive components whichincludes lamp assemblies chassis mirror and front-end modules (FEM).

During FY 2020-21 the Associates profit attributable to the Company was Rs. 154.09Lakhs as compared to the Rs. 1208.76 Lakhs in the last year.

In accordance with the provisions of the Act (''the Act'') and Regulation 33 of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") and applicable Accounting Standards the Audited Consolidated FinancialStatements of the Company for the FY 2020-21 together with the Auditors’ Report formpart of this Annual Report.

A report on performance and financial position of Associate Company included in theConsolidated Financial Statement (CFS) is presented in a separate section in this AnnualReport in the prescribed format AOC-1 as a part of financial statements.

In accordance with Section 136 of the Act the electronic copy of Financial Statementsof the Associate Company shall be available for inspection in the investor section ofwebsite of the Company at lumaxindustries. Any Member desirous ofobtaining a copy of the said Financial Statements may write to the Company Secretary atthe Registered Office of the Company. The Financial Statements including the CFS and allother documents required to be attached to this report have been uploaded on the websiteof the Company at


FY 2020-21 was a tough year for the automotive sector as a whole. According to Societyof Indian Automobile Manufacturers (SIAM) report the industry produced a total22652108 vehicles including Passenger Vehicles Commercial Vehicles Three wheelersTwo wheelers and Quadricycle during the FY 2020-21 as against 26353293 produced duringlast FY 2019-20 showing a degrowth of 14% but the more severely hit segments were theCommercial Vehicle Segment showing a decline of 17% and 3 Wheeler segment the worstimpacted showing a decline of 46%. The automotive sector saw both ups and down during thisperiod witnessing the longest sustained downfall in automotive industry. During thisturbulent and unprecedented time the Company with its strong order book and products indevelopment remained the market leader and a preferred supplier for all the OriginalEquipment Manufacturers (OEMs) in India. The technology has been changing and evolvingrapidly and in order to always be ahead with the competition Lumax has been focussing onstrengthening its R&D capability. With this belief Lumax is in process of opening itsR&D Centre in Czech Republic to have international technical competence andglobalization of the same. This centre will also help to further enhance the skill of thelocal staff with exposure to new futuristic technologies. It has been a pretty successfulyear for the Company. It has been able to add new customers in its portfolio coupled withthe new businesses from existing customers to improve top line.

With the introduction and emphasis of localization by OEMs to avoid the risksassociated with the supply chains Lumax is investing in the upgradation of its existingmanufacturing facilities alongside setting up a state of art Electronics manufacturingfacility. The same will help in successful localization of technologically advancedproducts thus giving the customers immunity from supply chain risks with best qualityproducts. The Company has further strengthened its relations with its partner and shall beventuring into new product line: Heater Control Panel to be offered to its OEM customers.To succeed in the digital era where technologies are changing the ground rules in everyindustry the Company undertook several new initiatives for enhancement of its existingInformation Technology (IT) systems to meet the regulatory and other organizationalrequirements. The Company’s focus was on automation. The Company implementedfollowing new initiatives:

Software for virtual meetings to facilitate management for smooth functioning. Thisresulted in better collaboration between management and employees and a lot of cost savingparticularly in travelling and other overheads.

Linking of Moulding machines with SAP and now there is both way communication from SAPto Moulding machines and vice versa. In this daily production plan data is sent tomoulding machines and machines do production accordingly. At the end of the shift data ofactual production is sent from moulding machines to SAP. As a Pilot project this has beenimplemented in one plant at Bangalore and plans are in place to rollout in other plantsaccordingly.

Digitisation of champions of cost cutting (CCC) project registration and approvalprocess resulting in quick decision paperless office and escalation in case of any delay.

SMS based reporting to management for daily sales directly from SAP.

Automotive Lighting is a Safety Critical Automotive Component. Over Years several NewTechnologies have matured with focus on Aesthetic Cost Power Consumption ImprovedVisibility etc. New functions are coming to improve safety and also to show the brandsignature. Usage of some functions on light markings to improve safety or brand logos forstyling and marketing reasons. Vehicles are embedding more and more sensors (in frontrear or side of Vehicle) which raises the challenges of their integration in the vehicletheir fusion to perceive the environment and also the management of an increasingquantity of data (local or cloud processing data annotation and storage). The Company isworking towards continuous improvements by adding Core

Engineering Strength. It has restructured the organisation with an Engineering Centrefor Competence (COC) & adding Specialists for developing next generation LightingSystems for Automotive applications. It has Localized LED Projectors LightingElectronics Light Guides etc to bring Value added Technologies at affordable cost toCustomers. It will be launching few innovative Technologies in India Like Localised LEDProjectors LED Fog Lamps Sealed Projector Sequential Turn Indicator integrated3-in-one Signalling Functions Lamps with 2K-3K Lens/Bezel Full Decklit Lamps etc. inIndia for enhanced visibility & Aesthetic at Lower Power Consumption or Cost. TheCompany is also working on Innovative Technologies of the future (Low cost Projectors LowCost AFS/ ADB 3D Holographic Signaling Homogenous lit appearance Sensor integrationLogo or Signal Projections etc.).

The Company demonstrated its commitment towards Quality by ensuring that qualityprocesses are adhered to by all through its recently Launched LDR (Lumax Development Rule)Product Development Process. This is an Online Project Management 7 gate tool that hastaken program execution towards excellence.

The awards received at the ICQCC- Singapore by its teams are proof. The Company has wonaccolades and awards not only from the customers but also at various industry conventionslike ACMA competition National Convention of Quality Control Circle (NCQCC) Kaizen. AlsoCompany got International TPM awards from Japan Institute of Plant Maintenance (JIPM) forbest manufacturing practices.

The Company continues to uphold the highest standards of Corporate Governance treatingits various stakeholders as an ethical requisite rather than a regulatory necessity andcontinue to base all its actions on the principles of fairness trust and transparencystanding by its core values of Respect Integrity Passion and Excellence.

All in all the Company made good progress in all areas in FY 20-21 and the managementis quite confident that going forward the Company will continue to deliver value to allits customers and stakeholders. The long-term outlook for the Company remains positive andit is poised to outperform the industry.

Having said the above your directors would like to put a word of caution with respectto spread of pandemic COVID-19 and repetitive countrywide lockdown during March 2020 andfirst quarter of the current financial year which has severally hit the industry ingeneral and automotive sector in particular. On account of this the financial performanceof the Company during the FY 20-21 is affected. Though the management of the Company hastaken various initiatives to optimize costs in order to reduce the impact of COVID-19.


The Company is constantly expanding the boundaries of its existing facilities andduring the year under review the Company has invested towards capacity expansion of itsmanufacturing facilities as follow:

- Expansion at Bangalore – Rs. 1470 Lakhs

- Capex for new Projects at other plants – Rs. 2411 Lakhs

- Capex advance payment for new Projects at Bawal and Sanand (Under Development) –Rs. 348.23 Lakhs and Rs. 372.80 Lakhs respectively Further an expenditure on Research andDevelopment facilities of Chakan and Gurugram was done to the tune of Rs. 326.44 Lakhs.


There is a Paradigm shift at the pace at which Technology is updating in the Automotivesegment focused on Innovation Styling Quality & Cost. Automotive Lighting being theJewel of the Vehicle has always been a challenging part irrespective of interior orexterior. It's getting complex with more Electronics content getting embedded inAutomotive Lighting. India is adapting to higher end Technologies at a very fast pace withAdvance Front Lighting System Full LED Headlamps & Innovative Signalling Functions.The Company is rapidly increasing its Engineering Strength with a vision to be leadingglobal affordable Lighting Supplier focused towards Technologies mapped with Low Cost LEDHeadlamps LED Projectors LED High Beam Boosters Logo Projections Di_ractiveHolographic Signalling Functions Sensor Integration in lamps etc.

To achieve Technology Roadmap the Company has expanded its Engineering Strength with apool of experts in Optics Electronics & Core Engineering. This will expedite pace tocatch up with Lighting Technology in west and have it available for OEMs in India ataffordable cost. The Company already has tie-up with Stanley Japan which continues to be aPillar of strength.

The Company will continue to innovate and develop world class products and put thrustand focus on R&D Global Technology partnerships and development of advancedtechnological automotive products. As an annual practice this year as well the Companywill celebrate 15 September as Innovation Day on the occasion of Engineers Dayshowcasing the Company’s new products technologies to the customers.


As stipulated under the provisions of Regulation 34 of the Listing RegulationsManagement Discussion & Analysis Report forms an integral part of this Report as an Annexure- A and provides details on overall Industry Structure and Developments financial andoperational performance and other material developments during Financial Year underreview.


The Company had entered into a revised Technical Assistance Agreement with StanleyElectric Co. Limited Japan the existing Foreign Promoter of the Company. During the yearunder review the Board in its meeting held on 26 March 2021 had approved the proposalfor establishing an office in Czech Republic to strengthen the Technological Capabilitiesof the Company.


During the Financial Year ended 31 March 2021 there was no change in the nature ofbusiness of the Company.



The Report on Corporate Governance together with the Auditor’s Certificateregarding the Compliance of conditions of Corporate Governance as stipulated in Regulation34 of Listing Regulations is annexed and forms part of this Report as an Annexure - B.


(i) Directors

The Composition of Board of Directors is in conformity with the applicable provisionsof the Act and Listing Regulations.

During the year under review Mr. Kenjiro Nakazono (DIN: 08753913) was appointed inplace of Mr. Koji Sawada as a ''Whole Time Director'' (Key managerial personnel) w.e.f.18 June 2020. Mr. Munish Chandra Gupta (DIN: 01362556) resigned from the position of the"Non-Executive Independent Director" of the Company with effect from 4December 2020.

The Board places on record its deep gratitude and appreciation for the valuablecontribution and support extended by Mr. Koji Sawada and Mr. Munish Chandra Gupta duringtheir term as Wholetime Director and Non-Executive Independent Director respectively ofthe Company towards Lumax ethos and performance.

TheBoardontherecommendationoftheNomination and Remuneration Committee had appointed Mr.Vikrampati Singhania (DIN: 00040659) as an Additional Director designated as Non-ExecutiveIndependent Director w.e.f. 11 February 2021 for a period of five (5) years subject tothe approval of shareholders in the AGM.

Mr. Vikrampati Singhania aged 55 years is a fourth-generation industrialist belongingto one of the largest industrial groups in India – J.K. Organization. JK Organizationis an over 125 years old business house with leadership across multiple sectors. The Groupis present in 100 countries apart from all India presence with annual sales revenue ofover USD 4.15 billion. The Group manufactures and markets a wide range of products fromPaper Automobile Tyres Cement Auto Components Textiles Agri Products etc. Mr.Singhania did his Master’s Degree in Commerce from Kanpur University and his MBA fromFuqua School of Business Duke University USA. He has Association with followingProfessional Bodies:

Member of Fuqua Indian Advisory Board of

Duke University USA

Member of Managing Committee The Associated Chambers of Commerce & Industry ofIndia (ASSOCHAM).

Member of Executive Committee of Automotive Component Manufacturers Association ofIndia (ACMA).

In accordance with the Articles of Association of the Company and the Act Mr.Vikrampati Singhania shall hold office till the ensuing AGM. The Company has received anotice from a member under Section 160 of the Act proposing the candidature of Mr.Vikrampati Singhania for his appointment as Director of the Company for five consecutiveyears w.e.f. 11 February 2021 not liable to retire by rotation. Keeping in view theexperience and vast knowledge of Mr. Singhania the Board of the Company recommends theappointment of Mr. Singhania by the Shareholders at the ensuing AGM.

A brief profile of Mr.Vikrampati Singhania is provided in the Notice of the ensuing AGMof the Company.

Retirement by Rotation and Subsequent Re-Appointment

In accordance with the Articles of Association of the Company and Section 152 of theAct read with the Companies (Appointment and Qualification of Directors) Rules 2014(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) Mr. Tadayoshi Aoki Whole Time Director (Key Managerial Personnel) (DIN: 08053387)is due to retire by rotation at the ensuing AGM and being eligible offers himself forreappointment.

A brief profile of Mr. Tadayoshi Aoki is provided in the Notice of the ensuing AGM ofthe Company.

Independent Directors

The Board has 6 (Six) Independent Directors including one Woman Independent Directorrepresenting diversified fields and expertise. Details are provided in the relevantsection of the Corporate Governance Report.

All Independent Directors have registered themselves with the Indian Institute ofCorporate Affairs for the inclusion of their name in the data bank of independentdirectors pursuant to the provision of Rule 6 (1) of Companies (Appointment andQualification of Directors) Rules 2014. Further they have confirmed that they shallcomply with other requirements as applicable under the said rule.

Further as stipulated under the Regulation 17(10) of Listing Regulations an evaluationexercise of Independent Directors was conducted by the Board and the all have beensatisfactorily evaluated by the Board.

(ii) Key Managerial Personnel (KMP)

As on 31 March 2021 Mr. Deepak Jain Chairman & Managing Director Mr. Anmol JainJoint Managing Director Mr. Vineet Sahni Whole Time Director (Senior Executive Director& CEO) Mr. Tadayoshi Aoki Whole Time Director (Senior Executive Director) Mr.Kenjiro Nakazono Whole Time Director (Executive Director) Mr. Shruti Kant Rustagi ChiefFinancial Officer and Mr. Pankaj Mahendru Company Secretary are regarded as KeyManagerial Personnel (KMPs).

During the year under review following changes have taken place in the Key ManagerialPersonnel of the Company:


Mr. Koji Sawada had resigned from the post of Whole Time Director (KMP) (ExecutiveDirector) of the Company w.e.f. 18 June 2020.


Mr. Kenjiro Nakazono was appointed as a Whole Time Director (KMP) (ExecutiveDirector) of the Company w.e.f. 18 June 2020 for a period of 3 years and his appointmentwas regularised by the Shareholders in the AGM held on 28 August 2020.


During the FY 2020-21 the Board met six (6) times on 29 May 2020 18 June 2020 12August 2020 9 November 2020 11 February 2021 and 26 March 2021 to review the operationsof the Company. It is confirmed that the gap between two consecutive meetings was not morethan one hundred and twenty days as provided in Section 173 of the Act.

Pursuant to the requirements of Para VII (1) of Schedule IV of the Act and the ListingRegulations a separate Meeting of the Independent Directors of the Company was held on 1March 2021 without the presence of Non-Independent Directors and Members of themanagement to review the performance of Non-Independent Directors and the Board as awhole the performance of the Chairperson of the Company taking into account the views ofExecutive Directors Non-Executive Non-Independent Directors and also to assess thequality quantity and timeliness of flow of information between the Company Management andthe Board. d. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (3) (c) & 134 (5) of the Act and to the best of theirknowledge and belief and based on the information and explanations provided yourDirectors hereby make the following statements:

(i) that in the preparation of the Annual Accounts for the Financial Year ended 31March 2021 the applicable Accounting Standards have been followed and there are nomaterial departures;

(ii) that the Directors have selected such accounting policies and applied consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on 31 March 2021 and of the profit andloss 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 Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other 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.


As stipulated under the provisions of Section 149 (6) of the Act and Regulation 25 ofListing Regulations the requisite declarations have been received from the IndependentDirectors regarding meeting the criteria of Independence as laid down under thoseprovisions. In terms of Regulation 25(8) of the Listing Regulations the IndependentDirectors have confirmed that they are not aware of any circumstance or situation whichexist or may be reasonably anticipated that could impair or impact their ability todischarge their duties.


Pursuant to the provisions of Section 178(1) of the Act and Regulation 19(4) read withPart D of Schedule II of Listing Regulations the Board of the Company in their meetingheld on 20 March 2019 had approved the revised Nomination and Remuneration Policy ofDirectors Key Managerial Personnel (KMP) and Other Employees including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided u/s 178(3) to bring it in line with amendments enforced by statute.

The main features of the Policy are as follows –

a. Introduction and Regulatory Framework

b. Objective

c. Constitution of Nomination and Remuneration Committee

d. Role of Nomination and Remuneration Committee

e. Appointment/ Nomination of Directors

f. Remuneration of Directors

g. Appointment of Key Managerial Personnel and Senior Management Personnel

h. Remuneration of Key Managerial Personnel and Senior Management Personnel

i. Appointment and Remuneration of Other Employees

j. Term/Tenure

k. Evaluation of Performance of Board of Directors

l. Frequency of Board Evaluation

m. Disclosure

n. Administration Review and Amendment of Policy

o. Clarification

The Company’s Nomination and Remuneration Policy is enclosed to this Report as an Annexure- C.

The said policy is also available on the website of the Company at pdf.


One of the key responsibilities and role endowed on the Board is to monitor andevaluate the performance of the Board Committees and Directors.

Accordingly in line with applicable provisions of the Act and Listing Regulations theannual performance evaluation of the Board as a whole Committees and all the Directorswas conducted as per the internally designed evaluation process approved by theNomination and Remuneration Committee. The evaluation tested key areas of the Board’swork including strategy business performance risk and governance processes. Theevaluation considers the balance of skills experience independence and knowledge of themanagement and the Board its overall diversity and analysis of the Board and itsDirectors’ functioning.

Evaluation Technique

The evaluation methodology involves discussion on 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 & Managing Director’s performance is doneby each Board Member on similar qualitative parameters.

Evaluation Outcome

The feedback of the evaluation exercise and inputs of Directors are 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 witheach of its committees were working effectively in performance of its key functions -Providing strategic guidance to the Company reviewing and guiding business plansensuring effective monitoring of the management and overseeing risk management function.The Board is kept well informed at all times through regular communication and meets onceper quarter and more often as and when need arises. Comprehensive agendas are sent to allthe Board Members well in advance to help them prepare and ensure the meetings areproductive. The Company makes consistent efforts to familiarize the Board with the overallbusiness performance covering all Business verticals by way of presenting specificperformance of each Plant Product Category and Corporate 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 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 managementaccorded sufficient 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.


As on 31 March 2021 the Audit Committee of Board comprised of Six (6) Members viz. Mr.Avinash Parkash Gandhi (Chairman) Mr. Dhiraj Dhar Gupta Mr. Rattan Kapur Mr. RajeevKapoor (Independent Directors) Mr. Deepak Jain and Mr. Tadayoshi Aoki (ExecutiveDirectors).

During the year under review Mr. Munish Chandra Gupta who was a member of the AuditCommittee resigned with effect from 4 December 2020 and accordingly he ceased to be memberof the Committee.

The details regarding category of Members and terms of reference of Audit Committee hadbeen stated in Corporate Governance Report which forms part as an Annexure - B tothis Report.

All the recommendations of Audit Committee made to the Board of Directors were dulyaccepted by the Board of Directors.


For the FY 2020-21 all the Related Party Transactions entered into by the Company werein ordinary course of business and at arms-length basis. All Related Party Transactionswhich are foreseen and repetitive in nature are placed before the Audit Committee onyearly basis for obtaining prior omnibus approval of the Committee. The transactionsentered into pursuant to the omnibus approval are placed before the Audit Committee forreview and approval on quarterly basis. All Related Party Transactions are subjected toindependent review by a reputed accounting firm to establish compliance with theprovisions of the Act and Listing Regulations.

There were no material 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.

The details of Related Party Transactions undertaken by the Company which fall underthe purview of "Materiality" as per Listing Regulations are attached in FormAOC-2 as an Annexure - D to this Report.

Further the Shareholder approval on such Material Related Party Transactions have beentaken by way of Postal Ballot Notice dated 9 November 2020 for which the results weredeclared by the Company on 15 January 2021. The Company has formulated a policy on RelatedParty Transactions which is available on the Company’s website at pdf/related-party-transactions-policy.pdf


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 in accordance with the provisions of Section

177 (10) of the Act and Regulation 22 of the Listing Regulations. This mechanismprovides for adequate safeguards against unfair treatment of whistle blower who wishes toraise a concern and also provides for direct access to the Chairman of the Audit committeein appropriate/exceptional cases.

The Whistle Blower Policy is available on the website of the To further strengthen this mechanism the Company haslaunched an Employee App which is available for both android and iOS users to report anyinstances of financial irregularities breach of Code of Conduct abuse of authorityunethical/unfair actions concerning Company vendors/suppliers malafide manipulation ofCompany records discrimination among employees in an anonymous manner to provideprotection to the employees and who report such unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in linewith the Whistle Blower Policy.

During the year under review no incidence under the above mechanism was reported.


The Company has adopted the Code of Conduct for Directors and Senior Management of theCompany. The same is available on the website of the Company Management.pdf


Information on Employees as required under Section 197 of the Act read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formsan integral part of this Report as an Annexure - E.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names of the top ten employees in terms of remuneration drawn andother particulars of the employees drawing remuneration in excess of the limits set out inthe said rules which form part of the Boards’ Report will be made available to anyshareholder on request as per provisions of section 136(1) of the said Act.


The Company has a robust and effective framework for monitoring compliances withapplicable laws. The

Company has installed a Software namely AVACOM for Compliance Management and throughthis Software the Company is able to get the structured control over applicablecompliances 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.




The Company has a robust and well embedded system of internal controls in place toensure reliability of financial reporting orderly and efficient conduct of businesscompliance with policies procedures safeguarding of assets and economical and efficientuse of resources. Appropriate review and control mechanisms are put in place to ensurethat such control systems are adequate and operate effectively.

Periodical programs of Internal Audits are planned and conducted which are also alignedwith business objectives of the Company. The meetings with Internal Auditors are conductedwherein the status of audits and management reviews are informed to the Board.

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 variance noticed 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 Act read together with theCompanies (Indian Accounting Standard) Rules 2015. The Company gets its Standalone andConsolidated Financial Statements reviewed every quarter 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.


The Company had adopted the Risk Management Policy and voluntarily constituted the RiskManagement Committee in order to frame implement and monitor the risk management planfor the Company. The Committee is responsible for development and implementation of a Riskmanagement Policy for the Company including identification therein of elements of risk ifany which in the opinion of the Board may threaten the existence of the Company and isresponsible for reviewing the risk management plan and its effectiveness. The Company hasRisk Management Policy which can be accessed on Company’s


Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 the Company in its 36 AGM held on 22 July 2017 approved theappointment of M/s B S R & Associates LLP Chartered Accountants (Firm RegistrationNo. 116231W/ W-100024) as Statutory Auditors of the Company for an initial term of five(5) years from the conclusion of 36 AGM till the conclusion of 41 AGM to be held inthe year 2022.

M/s B S R & Associates LLP Chartered Accountants have furnished a certificateconfirming that they are not disqualified from continuing as Auditors of the Company.

Statutory Auditors Report

The Report given by M/s B S R & Associates LLP Chartered Accountants on theFinancial Statements of the Company for the FY 2020-21 forms part of the Annual Report.There has been no qualification reservation adverse remark or disclaimer given by theAuditors in their Report.

Cost Auditors

In terms of Section 148 (1) of the Act the Company is required to maintain costrecords for certain products as specified by the Central Government and accordingly suchaccounts and records are prepared and maintained in the prescribed manner.

The Board on recommendation of Audit Committee has re-appointed M/s Jitender Navneet& Co. (Firm Registration No. 000119) as the Cost Auditors of the Company in accordancewith Section 148 and other applicable provisions of the Act for the audit of the costaccounts of the Company for the FY 2021-22.

The remuneration proposed to be paid to the Cost Auditor requires ratification by theshareholders of the Company. In view of this your approval for payment of remuneration toCost Auditors is being sought at the ensuing AGM. Accordingly a resolution seekingapproval by members for the Ratification of the remuneration to be paid to Cost Auditorsamounting to Rs. 1.75 Lakhs (Rupees One Lakh Seventy-Five Thousand only) excluding taxesand out of pocket expenses if any payable to M/s Jitender Navneet & Co. isincluded in the Notice convening 40th AGM of the Company.

Cost Audit Report

The Cost Audit Report for the FY 2019-20 has been filed with the Central Governmentwithin the stipulated time.

Disclosure On Maintenance Of Cost Records As Specified By Central Government Under SubSection (1) Of Section 148 of the Act

The Company is maintaining cost records as stipulated under law.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed Mr. Maneesh Gupta Practicing Company Secretary (M. No. F4982) as theSecretarial Auditor of the Company to conduct the Secretarial Audit for the FY 2021-22.

The Company has received consent from Mr. Maneesh Gupta to act as the auditor forconducting audit of the secretarial records for the Financial Year ending 31 March2022.

Annual Secretarial Audit Report & Annual Secretarial Compliance Report

The Secretarial Audit Report for the Financial Year ended 31 March 2021 under the Actread with Rules made thereunder and Regulation 24A (1) of the Listing Regulations is setout in the Annexure - F to this Report. There has been no qualificationreservation adverse remark or disclaimer given by the Auditors in their Report. Pursuantto SEBI Circular No. CIR/CFD/CMD1/27/2019 dated 8 February 2019 read with Regulation 24 A(2) of Listing Regulations all listed entities on annual basis are required to get acheck done by Practising Company Secretary (PCS) on compliance of all applicable SEBIRegulations and circulars/ guidelines issued thereunder and get an Annual SecretarialCompliance Report issued in this regard which is further required to be submitted to StockExchanges within 60 days of the end of the Financial Year.

The Company has engaged the services of Mr. Maneesh Gupta (CP No. 4982) PCS andSecretarial Auditor of the Company for providing this certification.

Accordingly the Company has complied with the above said provisions and an AnnualSecretarial Compliance Report has been submitted to the Stock Exchanges within stipulatedtime.

Internal Auditors

In compliance with the provisions of Section 138 of the Act read with the Companies(Accounts) Rules 2014 the Internal Audit of various units of Company for the FY2020-21 was carried out by M/s Grant Thornton Bharat LLP. Further the Board in theirmeeting held on 11 June 2021 has appointed M/s Grant Thornton Bharat LLP asInternal Auditors for the FY 2021-22.


During the year under review no frauds were reported by Statutory Auditor andSecretarial Auditor against the Company which need to be mentioned in this Report.


The Company’s Corporate Social Responsibility (CSR) is to give back to society andcontribute to nation’s development through its initiatives.

The Company’s CSR initiatives are implemented through its CSR arm/trust LumaxCharitable Foundation ("Foundation") with focus on education empowerment ofgirl child through education and the healthcare for disadvantaged Section of society.

During the year the Company’s obligation to spend on CSR activities was Rs.163.81 Lakhs i.e. 2% of the average net profits during the three immediately precedingFinancial Years. Out of this amount an amount of Rs. 46.54 Lakhs remained unspent. TheCompany could not spend this money on the projects for which the same was envisagedbecause of COVID situation and lockdown. The unspent amount of Rs. 46.54 Lakhs has alreadybeen deposited in separate accounts in compliance with the amended provisions of the Actread with the Companies (Corporate Social Resposibility Policy) Rules 2014. The same willbe spent on the following on-going projects as per the provisions of the Act read with theapplicable rules framed thereunder:

Organization / Projects Allocation (in Rs.)
Infrastructure School Sanand 26.54 Lakhs
Life Skills Monk.e.wise 20.00 Lakhs
Total 46.54 Lakhs

The Company has constituted a CSR Committee of the Board and also developed &implemented a CSR Policy in accordance with the provisions of the Act. The Committeemonitors and oversees various CSR initiatives and activities of the Company. The detailsof CSR Policy is available on the Company’s website

Key CSR Activities:

Lumax provides holistic education opportunities and preventive and curative healthinterventions committed to the India Sustainable Goals of Quality Education and GoodHealth. These interventions and programs are managed by the Lumax Charitable Foundationteam along with implementation partners.


In its endeavor to provide holistic and quality education the interventions includegirl child enrolment in schools starter kits and learnings aids. It is to provide andenable underprivileged students to enhance their learning experience through out of schoollearning activities like excursion trips end-to-end career counselling life-skills &soft-skills training on a continuous basis. The programs help to facilitate various govt.& private scholarships to deserving need-based and merit-based students to pursue withtheir education.

Infrastructure needs of the govt. schools including the construction of toiletsclassroom providing LED lights are also undertaken after a thorough need assessment. Theprograms are preferably conducted in areas around the Company’s plants.


Under health the Foundation has been supporting communities near the plants withpreventive Cancer awareness and screening camps and also provide eye care camps foreye-check up and conducting Cataract surgeries. The cancer screening includes bloodprofiling along with physical examination by a surgeon ENT specialist and a gynecologistcomplete with radiology examination.

The programs also include Juvenile diabetes for the underprivileged children and amobile path lab for communities donated to the Primary Health Centre (PHC).

Constitution of CSR Committee

As on 31 March 2021 the CSR Committee of the Company comprised of three (3) Membersnamely Mr. Deepak Jain (Chairman) Mr. Avinash Parkash Gandhi and Mr. Anmol Jain.Mr. Munish Chandra Gupta who was chairman of the CSR Committee resigned with effect from 4December 2020. Accordingly the Committee was reconstituted and Mr. Deepak Jain wasappointed as a Chairman of the CSR Committee by the Board in its meeting held on 11February 2021.

The details of the CSR Policy of the Company are also available on the website of theCompany at The contents of the said policy areas below:

a. CSR Philosophy

b. Constitution of CSR Committee

c. Role of CSR Committee

d. Implementation of CSR Projects Programs and Activities

e. Allocation of Budget

f. Lumax domains of engagement in accordance with Schedule VII

g. Monitoring and Review Mechanism

h. Management Commitment

The Annual Report on CSR as per Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as an Annexure - G to this Report inthe prescribed format.


Material Changes and Commitments

The Board of the Company in its Meeting held on

26 March 2021 had approved the proposal for Capital Expenditure (CAPEX) amounting up toRs. 80 Crore for setting up of the Company’s new manufacturing unit(s) at SanandGujarat to cater to the orders received from MG Motors and other customers. The totalCapex will be funded by mix of Debt and internal accruals and peak annualized turnover isexpected to be approximately

Rs. 150 Crore post commissioning. The project is expected to be operational by Q3 FY22.

No material changes and commitments affecting the financial position of the Companyhave occurred between 1 April 2021 and the date on which this Report has been signed.

Particulars of Loans Guarantees and Investments

The particulars of Investments and Loans as on 31 March 2021 as covered underthe provisions of Section 186 of the Act is given in the Notes 6 and 7 respectively toFinancial Statements of the Company. The Company has not given any guarantees during theyear under review.

Information on Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo

One of the several commitments that continued to remain in force throughout theFinancial Year was developing business along with improvement in environmental performanceto maintain a reliable and sustainable future. During the course of the year themanufacturing units of the Company have continued their efforts to reduce energyconsumption in all areas of their operations. These manufacturing units are constantlyencouraged to improve operational activities and maximising production volumes andminimizing consumption of natural resources. Systems and processes have been put in placefor utilization of alternate sources of energy and monitoring of energy consumption forall the units. Disclosure of information regarding Conservation of Energy Research &Development Technology Absorption and Foreign Exchange Earning and Outgo etc. asrequired under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules2014 is annexed as an Annexure – H to this Report.

Extract of Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason 31 March 2021 is available on the Company’s website on

Details of Fixed Deposits

During the year under review the Company has neither accepted nor renewed any Depositin terms of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules2014 and hence any provisions of the said Section are not applicable to the Company.

Names of Companies which have become or ceased to be its Subsidiaries Joint Venturesor Associate Companies during the Year

During the FY 2020-21 there were no companies which became Subsidiary or Joint Ventureof the Company neither the Associate Company ceased to be an Associate of the Company.

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.

Constitution of Internal Complaints Committee (ICC) under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 (POSH_

As per MCA notification dated 31 July 2018 a "Statement that the Company hascomplied with the provisions related to Constitution of Internal Complaints Committeeunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 (POSH)" has to be included in the Board’s Report.

In accordance with the above-mentioned provisions of POSH the Company is in compliancewith and has adopted the "Policy on Prevention of Sexual Harassment of Women atWorkplace" and the said policy has been amended by the Board in their meeting held on18 June 2020 and has also re-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. Theconstitution of ICC is as per the provisions of POSH and includes external Members fromNGO or those individuals having relevant experience.

The Committee meets as and when required and provides a platform for female employeesfor registration of concerns and complaints if any.

During the year under Review i.e. FY 2020-21 thirty two (32) meetings and twenty seven(27) awareness sessions were held across all manufacturing locations to discuss onstrengthening the safety of employees at workplace. In addition the awareness about thePolicy and the provisions of Prevention of Sexual Harassment Act was also carried out inthe said meetings. Further as per the applicable provisions of POSH the Companycontinues to submit Annual Report to the District Officer consisting of details asstipulated under the said Act.

Environment Health Safety

The Company focuses on "Safety Culture Building" by maintaining the"Safety Management System" to reduce the risk of incident and Injuries. Thissystem includes safety rules safety procedures safety training hazard identificationcorrection Near miss incident Capturing and investigation Safety Management Systemcontribute not only to improve the workplace Safety but also to influence theorganization Safety Culture.

Apart from the above your Company has also performed below activities in FinancialYear 2020-21 sincerely:

1. Hazards identification and Risk assessment of Machine

2. Safety Gemba Audit and monitoring all critical Points

3. Fire Risk assessment

4. Regional Safety Meeting at all regions

5. KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures withthe help of actual users)

6. Hazards specific Safety training (Fire Fighting First Aid Electrical SafetyChemical & Machine Safety & Evacuation Drill )

7. Prepared Safety manual for Standard Operating Procedures

8. Identified probable emergency and prepared Emergency Response Manual

9. Prepared & Updated KYT Manual

10. Comprehensive review / surveillance audit done as per ISO 14001:2015 (EnvironmentManagement System) and ISO 45001;2018 (Occupational Health & Management system)

11. Surface treatment Duct Cleaning for all locations

From the last Four years the Company also commenced the Fire Risk Assessment Audit forTier-2 (53 Nos) Suppliers to reduce the fire related incident and achieved significant OKresult and also started the Safety Audit from last year for Tier-2 (9 Nos) suppliers toreduce the human injury and also monitoring the injury status Delivered the awarenessprogram to the suppliers related to Fire Electrical and Fire Mock drill.

By ensuring all the above zero accident level is maintained for last Four years.Induction programme & regular training of employees and the introduction of formalsafety management system helps the Company to mitigate future incidents.

Transfer of Unpaid Dividend and Shares to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Section 124(5) 125 and other applicable provisions ofthe Act read with the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) all unpaid or unclaimed Dividends are required to be transferred by the Company tothe IEPF established by the Central Government after the completion of seven (7) yearsfrom the date of transfer to Unclaimed/Unpaid Dividend Account of the Company.

Further pursuant to provisions of Section 124(6) of the Act read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 the shares in respect ofwhich Dividend has not been claimed or unpaid by the shareholders for seven (7)consecutive years or more shall also be transferred to the Demat account of IEPFAuthority. The said provisions does not apply to shares in respect of which there is aspecific Order of Court Tribunal or Statutory Authority restraining any transfer of theshares.

Accordingly the details relating to amount of Dividend transferred to the IEPF andcorresponding shares on which Dividends were unclaimed for seven (7) consecutive yearsare provided in the Report on Corporate Governance annexed to this Report It may be notedthat the due date for transfer into IEPF of the Unpaid/Unclaimed Dividend lying in theUnpaid Dividend Account of the Company which was declared on 22 August 2014 for the FY2013-14 along with the underlying Equity Shares is 20 September 2021. Accordinglyconcerned Shareholders are requested to kindly claim the Unpaid/unclaimed Dividend alongwith the underlying Shares. The Notice pursuant to the provisions of Section 124 of theAct read with IEPF (Accounting Audit Transfer and Refund) Rules 2016 has been publishedin the newspapers on 6 June 2021 in the Financial Express (English- All Edition)and Jansatta (Hindi-Delhi) titled- "Transfer Of Unpaid/ Unclaimed Dividend AndThe Underlying Equity Shares To The Investor Education And Protection Fund (IEPF) Account"inviting the attention of the Shareholders to claim their Dividends along with theunderlying Equity Shares and in this regard the Company has also sent individual noticesto the concerned Shareholders.

Code of Conduct to Regulate Monitor and Report Trading by Designated Persons (Code ofConduct)

In compliance with the Securities and Exchange Board of India (Prohibition of InsiderTrading) (Amendment) Regulations 2018 the Company has adopted a Code of Conduct toregulate monitor and report trading by Designated Persons [Pursuant to Regulation 9 ofSecurities and Exchange Board of India (Prohibition of Insider Trading) Regulations2015]. This Code of Conduct is intended to prevent misuse of Unpublished Price SensitiveInformation ("UPSI") by Designated Persons. The said Code lays down guidelineswhich advise Designated Persons and Insiders on the procedures to be followed anddisclosures to be made in dealing with the shares of the Company and cautions them onconsequences of non-compliances. This Code includes a Policy and Procedure for Inquiry incase of leakage of Unpublished Price Sensitive Information or suspected leakage ofUnpublished Price Sensitive Information and is available for reference on the website ofthe Company i.e.

Business Responsibility Report

A detailed Business Responsibility Report in terms of the provisions of Regulation 34of the Listing Regulations is available as a separate section in the Annual Report.

Disclosure for Compliance of Secretarial Standards

The Company has complied with the Secretarial Standard-1 (Meetings of Board ofDirectors) and Secretarial Standard-2 (General Meetings) issued by the Institute ofCompany Secretaries of India.

Contribution to Exchequer

The Company is a regular payer of taxes and other duties to the Government. During theyear under review the Company paid all its statutory dues & presently no undisputeddues are outstanding for more than six months. The Company generally ensures payment ofall dues to exchequer well within time line as applicable.


The Board of Directors place on record their sincere gratitude and appreciation towardsall its Stakeholders viz. shareholders employees investors bankers customerssuppliers government agencies stock exchanges and depositories auditors legaladvisors consultants business associates service providers academic partners for theircontinued commitment and support. The Board conveys their deep sense of appreciationtowards contributions made by every member of Lumax Family during the year and express asincere thanks and gratefulness to its Technical & Financial Collaborator- StanleyElectric Co. Limited for their continued support and patronage throughout the year.

For and on behalf of the Board of Directors

Lumax Industries Limited

Deepak Jain

Chairman & Managing Director


Place: New Delhi

Date: 11 June 2021