Your Directors have pleasure in presenting the 38th annual report togetherwith the audited financial statements for the year ended 31st March 2019.
The Company's financial performance during 2018-19 as compared to the previous year2017-18 is summarised below:
(Rs in million)
| || || |
|Particulars ||2018-19 ||2017-18 |
|Total revenue ||885813 ||818082 |
|Profit before tax ||104656 ||110034 |
|Tax expense ||29650 ||32816 |
|Profit after tax ||75006 ||77218 |
|Retained Earnings || || |
|Balance at the beginning of the year ||363008 ||313189 |
|Profit for the year ||75006 ||77218 |
|Other comprehensive income arising from remeasurement of defined benefit obligation* ||(284) ||(131) |
|Amount transferred to employee welfare fund ||(772) ||- |
|Income on funds earmarked for employee welfare fund ||(36) ||- |
|Amount transferred to scientific research fund ||(772) ||- |
|Payment of dividend on equity shares ||(24166) ||(22656) |
|Corporate dividend tax paid ||(4968) ||(4612) |
|Balance at the end of the year ||407016 ||363008 |
*net of income tax of ' 151 million (previous year ' 65 million)
The total revenue (net of excise) was Rs 885813 million as against Rs 818082 millionin the previous year showing an increase of 8.28%. Sale of vehicles in the domestic marketwas 1753700 units as compared to 1653500 units in the previous year showing anincrease of 6.1%. Total number of vehicles exported was 108749 units as compared to126074 units in the previous year showing a decrease of 13.7%.
Profit before tax (PBT) was Rs 104656 million against Rs 110034 million showing adecrease of 4.89% and profit after tax (PAT) stood at Rs 75006 million against Rs 77218million in the previous year showing a decrease of 2.86%.
The Board recommends a dividend of Rs 80 per equity share of Rs 5/- each for the yearended 31st March 2019 amounting to Rs 29134 million including dividenddistribution tax of Rs 4968 million. The Company has formulated a dividend distributionpolicy which forms 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)
The details forming part of the extract of the annual return in Form MGT-9 is attachedas Annexure - A. The annual return of the Company for the year 2017-18 is available on itswebsite at https://www.marutisuzuki . com/corporate/investors/companv-reports.
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 its website athttps://marutistoragenew . blob.core.windows.net/msilintiwebpdf/Policv on SubsidiaryCompanies.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 and Listing Regulations from all the Independent Directors. Thedetails of the familiarisation programmes for the Independent Directors are available onthe website of the 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)
Mr. Toshihiro Suzuki and Mr. Kazuhiko Ayabe shall retire by rotation in the ensuingAnnual General Meeting of the Company. The Board in its meeting held on 27thMarch 2019 re-appointed Mr. Kenichi Ayukawa as the Managing Director & CEO of theCompany for a period of three years with effect from 1st April 2019.
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 concernabout serious irregularities unethical behaviour 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/Policvon Related Party Transactions. pdf In terms of Section 134(3) (h) of the Act read withRule 15 of the Companies (Meetings of Board and its Powers) Rules 2014 there was notransaction to be reported in Form AOC 2. The disclosure with respect to the transactionswith promoter and promoter group which is holding 10% or more of the shareholding in theCompany are given in the notes forming part of the financial statements.
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out the annual performance evaluation of its own performance theDirectors individually as well as the evaluation of its committees. The evaluationcriteria inter-alia covered various aspects of the functioning of the Board and itscommittees including composition attendance of Directors participation levels bringingspecialised knowledge for decision making smooth functioning and effective decisionmaking. The Board and the committees had been effective in achieving their respectivecharters of monitoring the overall performance of the Company overseeing the performanceof the management and thus upholding high standards of corporate governance. The Board andthe committee meetings were run efficiently and the members acted with sufficientdiligence and care. The Board and its committees had the needed diversity in terms oftalent competence knowledge gender and experience and had maintained high standards ofcorporate governance through their working functioning and decision making. Theperformance of individual directors including the Independent Directors was evaluated onparameters such as level of engagement and contribution to the affairs of the Companyincluding by way of attendance in Board and committee meetings ability to discharge theirduties and obligations diligently in the best interest of the Company ability to provideeffective leadership and checks and balances towards sustaining the highest levels ofcorporate governance in particular towards risk assessment and management exercising dutyof care and skill in the discharge of their functions level of independence of judgmentand safeguarding the interest of the Company and its minority shareholders. Consideringthe good 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 Boardalso noted that the Independent Directors had fulfilled the independence criteria asspecified in the Listing Regulations and were independent from the management.
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 therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and has also complied with its provisions relating to theconstitution of Internal Complaints Committee to redress complaints received regardingsexual harassment.
The status of the complaints received by the Company during the year is as under:
|a) Number of complaints filed ||3 |
|b) Number of complaints disposed of ||2 |
|c) Number of complaints pending as on the end of financial year ||1 |
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 Listing Regulations. A certificate of compliance by auditors shall form part ofthe 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 2018-19. 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 the provisions ofSection 136 of the Act the annual report is being sent to all the members of the Companyexcluding the aforesaid information. The said information is available for inspection bythe members at the registered office of the Company up to the date of the ensuing AnnualGeneral Meeting. Any member interested in obtaining such particulars may write to theCompany Secretary at the registered office of the Company.
Cost Auditors and Records
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 2019-20. The maintenance of cost records as specified by the CentralGovernment under Section 148 (1) of the Act is required by the Company and such accountsand records are made and maintained.
The auditors M/s Deloitte Haskins & Sells LLP were appointed in the 35thAnnual General Meeting and hold their office till the conclusion of the 40th AnnualGeneral 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 has established and is maintaining an environment management system. Duringthe year surveillance audit for ISO-14001 was carried out by M/s AVI Belgium for themanufacturing plants located at Gurugram 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 "Best CEO (Large Companies)" by BusinessToday third time in a row. Mr. R. C. Bhargava was bestowed with "Lifetime AchievementAward" by CNBC Awaaz Annual CEO Awards 2018.
The Company received many awards/recognitions/ rankings during the year. Some of theseare mentioned hereunder:
Company of the year 2018' by Business Standard.
Marketer of the year' at Marquees 2018 and Gold Award' for employeecommunication for its seat belt campaign #PehniKya? by South Asia Sabre.
Best of 2018' by AutoX Awards.
Swift won the following awards by AutoX:
Car of the year.
Indian Car of the year' (ICOTY)' third time in a row.
Ertiga won the following awards:
Best MPV' of the year by AutoX and Autocar Awards 2019.
Car of the year' and Value for money car of the year' by AutocarAwards 2019.
Super Carry won the Prime Time' Award.
4 Good' rating by The Economic Times for all-round excellence in the fieldof Corporate Social Responsibility.
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.
For and on behalf of the Board of Directors
|R.C. Bhargava ||Kenichi Ayukawa |
|Chairman ||Managing Director & CEO |
|New Delhi || |
|25th April 2019 || |