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Maruti Suzuki India Ltd.
|BSE: 532500||Sector: Auto|
|NSE: MARUTI||ISIN Code: INE585B01010|
|BSE 14:45 | 17 Jan||7342.05||
|NSE 14:34 | 17 Jan||7367.45||
|Mkt Cap.(Rs cr)||221,789|
|Mkt Cap.(Rs cr)||221788.64|
Maruti Suzuki India Ltd. (MARUTI) - Director Report
Company director report
Your Directors have pleasure in presenting the 37th annual report togetherwith the audited financial statements for the year ended 31st March 2018.
The Company's financial performance during the year 2017-18 as compared to the previousyear 2016-17 is summarised below:
(Rs. in million)
*net of income tax of Rs. 65 million (previous year Rs. 58 million)
The total revenue (net of excise) was Rs. 818082 million as against Rs. 703349million in the previous year showing an increase of 16.31%. Sale of vehicles in thedomestic market was 1653500 units as compared to 1444541 units in the previous yearshowing an increase of 14.46%. Total number of vehicles exported was 126074 units ascompared to 124062 units in the previous year showing an increase of 1.62%.
Profit before tax (PBT) was Rs. 110034 million against Rs. 99603 million showing anincrease of 10.47% and profit after tax (PAT) stood at 77218 million against Rs. 73502million in the previous year showing an increase of 5.06%.
The Board recommends a dividend of Rs. 80 per equity share of Rs. 5/- each for the yearended 31st March 2018 amounting to Rs. 29134 million including dividend distribution taxof Rs. 4968 million. The Company has formulated a dividend distribution policy whichforms part of the annual report.
The operations are exhaustively discussed in the Management Discussion andAnalysis' forming part of the annual report.
Consolidated Financial Statements
In accordance with Indian Accounting Standard (IND AS) - 110 on Consolidated FinancialStatements read with Indian Accounting Standard (IND AS) - 28 on Investments in Associatesand Joint Ventures the audited consolidated financial statements are provided in theannual report.
A report containing the names of the companies which have become or ceased to becomesubsidiaries joint ventures and associates their performance financial position andtheir contribution to the overall performance of the Company as required by the CompaniesAct 2013 (Act') is provided as an annexure to the consolidated financial statementsand hence are not repeated here for the purpose of brevity. (Form AOC - 1)
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is attachedas Annexure - A.
In accordance with Regulation 16(1)(c) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (Listing Regulations') the Company has a policy fordetermining material subsidiaries. The policy is available on the website of the Companyat https://marutistoragenew.blob.core.windows.net/msilintiwebpdf/Policy_on_subsidiary_companies.pdf
Particulars of Loans Guarantees and Investments
Details of loans guarantees and investments covered under the provisions of Section186 of the Act are given in the notes forming part of the financial statements.
A calendar of meetings is prepared and circulated in advance to the Directors. Duringthe year five board meetings were held the details of which are given in the CorporateGovernance Report.
For composition of the audit committee please refer to the Corporate GovernanceReport.
The Company has received declarations of independence in accordance with the provisionsof Section 149 of the Act from all the Independent Directors. The details of thefamiliarisation programmes for the Independent Directors are available on the website ofthe Company at https://marutistoragenew.blob.core. windows.net/msilintiwebpdf/Familiarization_Programme.pdf
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained in terms of Section 134 of the Act your Directors state that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and proper explanations provided relating to material departures if any;
b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year and of the profit ofthe Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) internal financial controls were followed by the Company and they are adequate andare operating effectively; and
f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
Directors and Key Managerial Personnel (KMP)
Ms. Renu Sud Karnad was appointed as an Independent Director on the Board of theCompany with effect from 27th July 2017 Mr. Kazunari Yamaguchi was appointedas a Whole-time Director designated as Director (Production) with effect from 26thJanuary 2018 in place of Mr. Shigetoshi Torii who resigned with effect from 25thJanuary 2018.
Pursuant to Regulation 21 of Listing Regulations the Company has a Risk ManagementCommittee the details of which are given in the Corporate Governance Report. The Companyhas a risk management policy and identified risks and taken appropriate steps for theirmitigation. For more details please refer to the Management Discussion and Analysis(MD&A).
Internal Financial Controls
Internal financial controls have been discussed under CEO/CFO Certification' inthe Corporate Governance Report.
The Company has in place an established and effective mechanism called the WhistleBlower Policy (Policy). The mechanism under the Policy has been appropriately communicatedwithin the organisation. The purpose of this policy is to provide a framework to promoteresponsible whistle blowing by employees. It protects employees wishing to raise a concernabout serious irregularities unethical behavior actual or suspected fraud within theCompany.
The Chairman of the audit committee is the ombudsperson and direct access has beenprovided to the employees to contact him through e-mail post and telephone for reportingany matter.
Related Party Transactions
The Company has a policy on related party transactions which is available on theCompany's website at https://marutistoragenew .blob.core.windows.net/msilintiwebpdf/Policy_on_Related_Party_ Transactions.pdf. In termsof Section 134(3) (h) of the Act read with Rule 15 of the Companies (Meetings of Board andits Powers) Rules 2014 there was no transaction to be reported in Form AOC - 2.
Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of its committees. The evaluation criteriainter-alia covered various aspects of the Board's functioning including its compositionattendance of Directors participation levels bringing specialised knowledge for decisionmaking smooth functioning of the Board and effective decision making. The Board and itscommittees had been highly effective in achieving their respective charters of monitoringthe overall performance of the Company overseeing the performance of the management andthus overall upholding high standards of corporate governance. The board meetings werewell run and the members of the Board acted with sufficient diligence and care.
The performance of individual directors was evaluated on parameters such as level ofengagement and contribution to the affairs of the Company including by way of attendancein board/ committee meetings level of independence of judgement care undertaken insafeguarding the interest of the Company and its minority shareholders. Considering thehigh performance of the Company in most spheres and the value delivered to allstakeholders including customers shareholders the community and others it was apparentthat Directors had been diligent meticulous and faithful in the performance of theirduties. The Directors expressed their satisfaction with the evaluation process.
The criteria laid down by the Nomination and Remuneration Committee for evaluation ofperformance of Independent Directors included inter-alia the extent of engagementincluding attendance at the board/ committee meetings ability to discharge their dutiesand provide effective leadership exercise independence of judgement and safeguarding theinterest of all the stakeholders including the minority shareholders.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy is attached as Annexure - B.
Corporate Social Responsibility (CSR)
The annual report on CSR activities containing details of CSR Policy composition ofthe CSR committee and other prescribed details are given in Annexure - C.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. During the period under review two complaints werereceived by the ICC.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information in accordance with Section 134(3) (m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is attached as Annexure - D.
The Company has complied with the corporate governance requirements as stipulatedunder the various regulations of Listing Regulations. A certificate of compliance byauditors shall form part of the annual report.
Secretarial Audit Report
In accordance with the provisions of Section 204 of the Act read with The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board appointedM/s RMG & Associates a firm of Company Secretaries in practice to undertake theSecretarial Audit for 2017-18. The report on secretarial audit is attached as Annexure- E. The report does not contain any qualification.
The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India.
Management Discussion and Analysis Report
The annual report has a detailed report on management discussion and analysis.
As required by the provisions of Section 197 of the Act read with Rule 5 of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theparticulars of the employees are set out in Annexure - F. However as per theprovisions of Section 136 of the Act the annual report is being sent to all the membersof the Company excluding the aforesaid information. The said information is available forinspection by the members at the registered office of the Company up to the date of theensuing Annual General Meeting. Any member interested in obtaining such particulars maywrite to the Company Secretary at the registered office of the Company.
In accordance with the provisions of Section 148 of the Act read with Companies (CostRecords and Audit) Rules 2014 M/s R.J. Goel & Co. Cost Accountants New Delhi(Registration No. 000026) were appointed as the Cost Auditors of the Company to carry outthe cost audit for 2018-19.
The auditors M/s Deloitte Haskins & Sells LLP were appointed in the 35thAnnual General Meeting and hold their office till the conclusion of the 40thAnnual General Meeting.
The Company was awarded the highest financial credit rating of AAA/stable (long term)and A1+ (short term) on its bank facilities by CRISIL. The rating underscores thefinancial strength of the Company in terms of the highest safety with regard to timelyfulfillment of its financial obligations.
The Company was awarded ISO/IEC 27001:2005 certification by STQC Directorate(Standardisation Testing and Quality Certificate) Ministry of Communications andInformation Technology Government of India after re-assessment. In 2015 thecertification has been upgraded to 27001:2013.
The Company has established and is maintaining an environment management system. Duringthe year re-certification for ISO- 14001 was carried out by M/s AVI Belgium for themanufacturing plants located at Gurgaon Manesar and R&D Centre in Rohtak. Theauditors recommended continuance of ISO-14001 for all manufacturing facilities.
The quality management system of the Company is certified after the ISO 9001:2015standard. Re-assessment of the quality systems is done at regular intervals andre-certification assessments are done every three years by an accredited third-partyagency. The Company has an internal assessment mechanism to verify and ensure adherence todefined quality systems across the Company.
Mr. Kenichi Ayukawa was awarded Champion of Champions' Best CEO (LargeCompanies) and Best CEO (Auto & Ancillaries) by Business Today. He was also awardedAutocar Professional Man of the year' by Autocar.
The Company received many awards/recognitions/rankings during the year. Some of theseare mentioned hereunder:
Company of the year 2017' by The Economic Times and Business Standard.
MNC of the year' by AIMA at Managing India Awards 2017
Car manufacturer of the year' by NDTV at NDTV Car and Bike Awa rds.
Manufacturer of the year' by Autocar Times of India Overdrive and TopGear.
Golden Peacock Training Award and Occupational Health and Safety Award.
Corporate Social Responsibility Champion of the Year' by Motoring World.
2 GOOD' rating by The Economic Times for all-round excellence in the fieldof Corporate Social Responsibility.
Certificate of Appreciation' for best Corporate Social Responsibilitypractices by Haryana Government.
Amar Ujala Corporate Social Responsibility award for outstanding work in thefield.
PR team of the year' and HDFC ERGO Safety Award' by NDTV at NDTV Carand Bike Awards for #PehniKyaRs.' campaign.
Gold at ASSOCHAM's Skilling India Awards 2017
Rajasthan Government Award for employing highest number of youth.
Best Solution in India' to the Treasury team at Adam Smith Asia Award 2017
Dzire won the following awards:
- Best of 2017' by Auto X.
- Compact car of the year' by News 18 TV and CNBC Overdrive.
- Sub-compact sedan of the year' by NDTV Car & Bike Awards Smart Photographyand T3.
- Compact Sedan of the year' by Auto Car Motoring World and Times Auto EVO.
- Sub 4 meter car' and Automobile of the year' by The Auto Show.
Ignis won the following awards:
- Hatchback of the year' by NDTV Car & Bike Show Times Auto EVO & BBCTop Gear.
- Compact Car of the Year' & 'Design of the year' by Motoring World.
Baleno RS won the award for Hatchback of the year' by News 18 TV.
S-Cross won Crossover of the Year' by Motoring World.
Concept Future - S won Best Concept car at Auto Expo 2018 by NDTV Car & Bikeand SIAM awards for excellence.
Super Carry was awarded Commercial Vehicle of the Year' and SmallCommercial Vehicle (SCV) of the year' by Apollo Tyres Commercial Vehicle Magazine.
The Board of Directors would like to express its sincere thanks for the co-operationand advice received from the Government of India Haryana Government and the GujaratGovernment. Your Directors also take this opportunity to place on record their gratitudefor timely and valuable assistance and support received from Suzuki Motor CorporationJapan. The Board also places on record its appreciation for the enthusiastic co-operationhard work and dedication of all the employees of the Company including the Japanese staffdealers vendors customers business associates auto finance companies state governmentauthorities and all concerned without which it would not have been possible to achieve allround progress and growth of the Company. The Directors are thankful to the members fortheir continued patronage.