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Omax Autos Ltd.

BSE: 520021 Sector: Auto
BSE 00:00 | 13 Jul 162.65 -2.90






NSE 00:00 | 13 Jul 161.60 -4.65






OPEN 164.80
52-Week high 215.90
52-Week low 62.10
P/E 45.43
Mkt Cap.(Rs cr) 348
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 164.80
CLOSE 165.55
52-Week high 215.90
52-Week low 62.10
P/E 45.43
Mkt Cap.(Rs cr) 348
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Omax Autos Ltd. (OMAXAUTO) - Director Report

Company director report

Board's Report Dear Shareholders

Your Board of Directors has pleasure in presenting the 34th Annual Report onthe business and operations of the Company together with the Audited Financial Statementsfor the financial year ended 31st March 2017.


The summary of the financial performance of the company for the financial year ended 31stMarch 2017 as compared to the previous year is as below:

Amounts in Rs. Lac

Particulars 2016-17 2015-16
Net Sales and other income 104606.98 103247.73
PBIDT 3908.27 5837.09
Less: Interest 1243.06 1440.90
PBDT 2665.21 4396.19
Less: Depreciation and Amortization 2649.90 2840.60
Profit before Tax and Exceptional
Income 15.31 1555.59
Add: Exceptional Income - -
Profit before Tax 15.31 1555.59
Less: Tax Expenses 166.06 737.88
Net Profit/Loss after Tax (150.75) 817.71
Prior Period Income/ expenses(+)/(-) (12.15) (27.04)
Amount available for appropriation (162.90) 790.67
Proposed dividend on equity shares - 213.88
Dividend Distribution Tax - 43.54
Transferred to General Reserve - 258.00
Surplus/Deficit carried to Balance
Sheet (162.90) 275.25
Earnings per Share (EPS)


No amount is proposed to be transferred to the General Reserve of the Company for thefinancial year 2016-17.


Your Directors do not recommend any dividend for the financial year 2016-17.


In recent times the Company is going through a turbulent phase. The two-wheelerbusiness which is the core segment of the Company is not doing well recently. Due to lowbusiness volume coupled with some IR issues and increasing fixed costs the Board in itsmeeting held on 19th April 2017 had decided to close its Automax Plant atBinola. Further for rationalization of various businesses the Company had also decidedto partially discontinue certain departments/ manufacturing lines/wings in its DharuheraPlant. Considering other business segments doing well these events may not affect theoverall financial position of the Company significantly. As the business volume intwo-wheeler segment is not showing significant growth in recent times and there ismounting pressure of fixed costs the management of the Company is keeping a close eye onthe performance of this segment. In opinion of the Board there have been no materialchanges and commitments affecting the financial position of the Company which haveoccurred between the end of the financial year to which the financial statements relateand the date of this Report.


During the year under review there has been no change in the nature of business of theCompany. The main business activity of the Company continues to be manufacturing andsupply of automotive components and parts including Railways parts and fixtures. TheCompany has some revenue generated from its wind power project also. However contributionto total turnover of such revenue is very insignificant. Notwithstanding theaforementioned the Company is continuously exploring the possibility of venturing intonew business areas to minimize its business risks. At opportune time the Company maydiversify into new business areas.


During the financial year 2016-17 the total revenue of the Company was Rs. 1046 Croresas compared to total revenue of Rs. 1032 Crores during the previous financial year. Therevenue grew marginally as compare to the previous year. The profit before tax for theyear under review was Rs. 0.15 Crore as against Rs. 15.55 Crore in the previous financialyear.

Financial year 2016-17 was a challenging year for the Company. The performance of thetwo-wheeler business segment which is the core segment of the Company was belowexpectation. Increasing fixed costs and demonetization of currencies in the third quarterimpacted the business of the Company adversely especially in two wheeler businesssegment. However during the year under review the performance of Commercial Vehicles andRailway business segment of the Company was satisfactory.

The current fiscal year also seems to be a challenging year for the Company as thebusiness volume in two-wheeler segment has not seen significant growth. However theCompany has made progressive headway in other segments such as Commercial Vehicles (CV)Passenger Cars (PC) and

Railways in the previous financial year and expected to do well in the current fiscalalso. The CV segment is doing very well. In 2013-14 the turnover of this business was Rs.99.33 Crs. In 3 years by 2016-17 the turnover has doubled to reach Rs. 200 Crs. For sometime PC sale has been around Rs. 100 Crs. The Company now wants to become a specialistmachining company and intends to double its sale in this business to reach Rs. 200 Crs. innext 4 Years. In Railways the Company is witnessing vertical growth in last 3-4 years.This segment has grown significantly from Rs. 6 Crs. in 2013-14 to Rs.75 Crs. in 2016-17and it is estimated that this business segment will achieve the turnover of Rs. 125 Crs in2017-18. In addition the Company is exploring in Defence and Aerospace Area. Hence thefuture prospects of the Company looks good.

Shareholders may refer to Management Discussion and Analysis and Corporate GovernanceReport that form part of this Report for further details.


In terms of Regulation 34(2)(e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 read with Schedule V thereto Management Discussion andAnalysis Report has been appended separately which forms part of this Report and theAnnual Report.


Corporate Governance is the application of best Management Practices Compliance ofLaws in true letter and spirit and adherence to ethical standards for effective managementand distribution of wealth and discharge of social responsibility for sustainabledevelopment of all stakeholders i.e. shareholders management employees customersvendors regulators and the community at large. Your Company places prime importance onreliable financial information integrity transparency empowerment and compliance withthe law in letter and spirit.

The regulators have also emphasised on the requirement of good corporate governancepractices in corporate management. Your Company also takes proactive approach and revisitsits governance practices from time to time so as to meet business and regulatoryrequirements.

Compliance of Corporate Governance provisions of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 for the year 2016-17 has been provided in theCorporate Governance Report which is attached hereto and forms part of this Report. TheAuditor's certificate on compliance with corporate governance norms is also attachedthereto.


The Board of Directors of the Company has optimum combination of executive andnon-executive directors including independent directors and woman directors in compliancewith the provisions of the Companies Act 2013 ("the Act") and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. In terms of the Section 203 ofthe Act the Company has designated the Key Managerial Personnel. During the year underreview there were no changes in the composition of Directors of the Company. In terms ofthe provisions of the Act and Article of Association of the Company Mr. Ravinder KumarMehta (DIN: 00028409) retires by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. Mr. Puspendra Kumar Bansal resigned from theposition of Chief Financial Officer of the Company w.e.f. 12th December 2016.Mr. Ghan Shyam Dass has been appointed as the new Chief Financial Officer & KeyManagerial Personnel of the Company w.e.f. 30th January 2017.


Dr. Ramesh Chandra Vaish (DIN: 01068196) and Dr. Triloki Nath Kapoor (DIN: 00017692)the Independent Directors of the Company were appointed as Independent directors by themembers at their 31st Annual General Meeting held on 24thSeptember 2014 for a term of three years w.e.f. 1st October 2014.Accordingly their office as Independent Directors of the Company is expiring on 30thSeptember 2017. In terms of the provisions of Section 149 (10) of the Companies Act2013 read with Schedule IV thereto an Independent director can be re-appointed foranother term by passing of a special resolution by the Company. Accordingly subject tothe approval of the members the Board of Directors of the Company at its meeting held on17th August 2017 have approved the re-appointment of Dr. Ramesh Chandra Vaishand Dr. Triloki Nath Kapoor as Independent Directors of the Company for further term offive years and recommended the same for the approval of the members in ensuing AnnualGeneral Meeting. The reappointment of independent directors shall be on the basis ofreport of performance evaluation. Both Dr. Vaish and Dr. Kapoor have submitted declarationto the effect that they meet the criteria for independence as provided in the Section149(6) of the Act and qualify for being re-appointed as an Independent Director.


During the year under review 4 (four) meetings of the Board were held on 6thMay 2016 27th July 2016 27th October 2016 and 30thJanuary 2017. For other details of Board Meetings and committee meetings members mayrefer to the Corporate Governance Report attached separately to this report.


During the year under review there was no change in the composition of the AuditCommittee of the Board. Currently the Audit Committee is composed of four directors asfollows:

1. Dr. Ramesh Chand Vaish Independent Director (Chairman);

2. Dr. T. N. Kapoor Independent Director (Member);

3. Mr. Jatender Kumar Mehta Chairman cum Managing Director (Member); and

4. Mrs. Novel S Lavasa Independent Director (Member) There has been no instancewherein the Board had not accepted any recommendation of the Audit Committee.


In terms of Section 134(3)(c) read with Section 134(5) the directors statethat—(a) in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;(b) the directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period; (c) the directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis; (e) the directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively; and (f) the directors had devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.


All independent directors have given declarations to the effect that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013.


In terms of Section 178(3) of the Companies Act 2013 upon recommendation of theNomination and Remuneration Committee the Board has adopted the Nomination andRemuneration Policy of the Company. Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other prescribed matters are governed by such policy. In terms of Section 178(4) ofthe Act such policy is attached hereto as Annexure - 1 which forms part of this report.


The evaluation of performance of the Board its Committees and individual directors forthe financial year 2016-17 was carried out in accordance with the policy for evaluation ofthe performance of the Board of Directors of the Company. The evaluation forms andcriteria for evaluation of Board of Directors Managing Directors / Executive DirectorsNon Executive Independent Director Board Committees and Chairman of the Company werecirculated to all the directors for their feedback/ratings. The forms were submitted backto the Company by the directors with their feedback/ ratings. On the basis of theirfeedback/ratings the Board evaluated the performance of Board of Directors ManagingDirector / Executive Director Non-Executive Independent Director Board Committees andthe Chairperson of the Company. The Board was satisfied with the evaluation results.


The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. The Company has established a vigil mechanism and hasadopted the "Vigil Mechanism/Whistle Blower Policy". As per the policyobjective the Company encourages its employees who have concerns about suspectedmisconduct to come forward and express these concerns without fear of punishment orunfair treatment. A vigil mechanism provides a channel to the employees and directors toreport to the management concerns about unethical behaviour actual or suspected fraud orviolation of the Codes of conduct or policy. The mechanism provides for adequatesafeguards against victimization of employees and directors to avail the mechanism andalso provide for direct access to the Managing Director/Chairman of the Audit Committee inexceptional cases. Such policy is available on the website of the Company.


As a good corporate citizen the Company understands the significance of inclusivegrowth and wellbeing of all stakeholders including the society at large. Your Company hasbeen taking initiatives under Corporate Social Responsibility (CSR) for society at largewell before it has been prescribed under Companies Act 2013. The Company has awell-defined Policy on CSR as per the requirement of Section 135 of the Companies Act2013 which covers the activities as prescribed under Schedule VII of the Companies Act2013.

During the year under review your Company has carried out activities primarily relatedto promoting/providing education to the poor children.

The details about the policy developed and implemented by the Company on CorporateSocial Responsibility initiatives taken during the year as required under clause (o) ofsubsection (3) of the Section 134 of the Companies Act 2013 are provided in the CSRAnnual Report in terms of Rule 8 of the Companies (Corporate Social responsibility) Rules2014 which is attached as Annexure-II and forms part of this report. Corporate socialresponsibility (CSR) also called corporate responsibility corporate citizenshipcorporate social opportunity is a concept whereby organizations consider the interests ofsociety by taking responsibility for the impact of their activities on customerssuppliers employees shareholders communities and other stakeholders as well as theenvironment. The Company believes that this obligation extends beyond the statutoryrequirement to comply with legislation and professes voluntary taking of steps to improvethe quality of life of the local community and society at large. In the year 2014-15under its CSR program the Company organised a "Unique Value DevelopmentProgram" called "Saksham" to reach out to kids in various geographicalareas around its plants. The said initiative was aimed at imparting values and moraleducation to underprivileged kids in the society. The said initiative received hugeresponse from the catchment area. Taking the initiative to the next level it wasconsidered to reorganize the program. Besides imparting moral education through enactmentof plays it was also proposed to working on empowering kids by equipping them withrelevant skills that would help them be more independent and self-confident. Taking theideology ahead the Company initiated another program Saksham-II in 2016-17. Children fromthe surrounding areas of Omax Plants have been imparted moral education through playsinging and dancing. The total number of children benefited was 70. Total 25 sessions ofRehearsal/ Practice were imparted to them. Professionals from various fields were hired toprovide special training to the children. To remove shyness and to instil confidence inkids a final event a musical play was organised on 13th May 2017 at SatyaSai Auditorium Lodi Road New Delhi wherein the moral values that the children haveacquired over a period of time and the creative acumen (special training) that they havegained during the said period over multiple sessions were presented. The theme of theplay was - "Save the Earth" a fascinating journey towards greener future. Theevent was witnessed by family members of the children and employees/officers of theCompany. The Company received a huge response from the beneficiaries through testimonialscomments and voice of Community. The event was a great success. Considering the hugesuccess of these two projects and positive responses and feedbacks received frombeneficiaries it is proposed to continue this program in a more sustainable way and oncontinuous basis. CSR Liability for the FY 2016-17 was Rs. 12.42 Lacs. Out of the budgetedamount of Rs. 23.45 Lacs (out of cumulative funds available) for approved projects anamount of Rs. 6.30 Lacs was spent during the year. The projects could not been completedby March 2017 and are continuing into the following year. The remaining expenditure willbe incurred in the following year. However the Company is committed to spend the unspentamount of CSR expenditure including of the previous years aggregating Rs. 50.18 Lacs ascalculated below.

For 16-17 For 15-16 For 14-15 Total
CSR Liability @ 2% of average net profit 12.42 18.11 51.11 81.64
Less: Amount already spent 6.30 - 25.16 31.46
Amount Unspent 6.12 18.11 25.95 50.18

The detailed report on initiatives taken during 2016-17 can be accessed at the websiteof the company at


The Board of Directors of the Company has adopted a policy as the Risk ManagementPolicy of the Company with main objective of to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. The implementation and monitoring of this policy iscurrently assigned to the Audit Committee of the Board. Though the Board is striving toidentify various elements of risk however in the opinion of the Board there has been noelement of risk which may threaten the existence of the Company.



Pursuant to Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. A. Kumar Gupta & Co. Chartered Accountants(Firm Registration No. 000182N) Statutory Auditors of the Company would expire at theconclusion of the ensuing Annual General Meeting.

The Board of Directors of your Company on the recommendation of the Audit Committeeat its meeting held on 17th August 2017 has proposed the appointment of M/s.BGJC Associates LLP (Firm Registration No. 003304N ) as the new Statutory Auditors of theCompany for an initial term of five consecutive years i.e. from the conclusion of 34thAnnual General Meeting until the conclusion of 39th Annual General Meeting ofthe Company.

The Company has received a letter from M/s. BGJC Associates LLP confirming that theyare eligible for appointment as Statutory Auditors of the Company under Section 139 of theCompanies Act 2013 read with the rules made thereunder and meet the criteria forappointment specified in Section 141 of the Companies Act 2013 read with the rules madethereunder. Your Board of Directors recommends the appointment of M/s. BGJC Associates LLPas the Statutory Auditor of the Company.


In terms of Section 204 of the Companies Act 2013 read with the rules made thereunderand upon the recommendation of the Audit Committee the Board of Directors has appointedM/s. Chandrasekaran Associates Company Secretaries as the Secretarial Auditors of theCompany to conduct Secretarial Audit for the financial year ending 31st March2018.


In terms of Section 138 of the Companies Act 2013 read with Companies (Accounts)Rules 2014 the Board of Directors on recommendation of the Audit Committee hasre-appointed M/s. HM & Associates Chartered Accountants M/s. Singhi Chugh &Kumar Chartered Accountants and M/s. N. Kochhar & Co. Chartered Accountants asInternal Auditors of the Company for the financial year 2017-18.


M/s. A. Kumar Gupta & Co. Chartered Accountants (Firm Registration No. 000182N)Statutory Auditors of the Company have submitted their reports on the financial statementsof the Company for the financial year ended 31st March 2017. There has been noobservation or comment of the auditors on financial transactions or matters which has anyadverse effect on the functioning of the company; further there is also no qualificationreservation or adverse remarks in the Auditors' Reports and they have expressed anunqualified opinion on the financial statement of the Company for the financial year ended31st March 2017. There has been no fraud reported by the Statutory Auditorsunder Section 143(12) of the Companies Act 2013 for the financial year 2016-17.

In terms of Section 204(1) of the Act a Secretarial Audit Report given by M/s.Chandrasekaran Associates the Secretarial Auditor of the Company in prescribed form hasbeen annexed hereto and forms part of this Report. Further there has been noqualification reservation or adverse remarks or disclaimer or qualification made by theSecretarial Auditors in their report for the financial year ended 31st March2017.


The Company does not have any subsidiary company or joint venture or associate company.There was no company which had become or ceased to be the subsidiary joint venture orassociate company of the Company during the financial year under review.


During the year under review the Company had not invited or accepted any fixeddeposits from public under Chapter V of the Companies Act 2013 and the Rules madethereunder.


There has been no significant and material order passed by any regulator courts ortribunals impacting the going concern status and operations of the Company in future.


For the purposes of effective internal financial control the Company has adoptedvarious policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. Forfurther discussion on adequacy of internal financial controls please refer the discussionin Management Discussion and Analysis that forms part of this Report.


The Registered Office of your Company has been shifted from 69 K.M. Stone Delhi-JaipurHighway Dharuhera District –Rewari Haryana to Plot No. B-26 Institutional AreaSector-32 Gurugram Haryana-122001 w.e.f. April 1 2016.


During the financial year under review the Company has not given any loan or guaranteeor made any investment in terms of Section 186 of the Companies Act 2013.


During the year under review there was no new transaction with related parties fallingunder the purview of Section 188 of the Act. All the transactions with the related partieswere in ordinary course of business and on arm's length basis hence were out of thepurview of Section 188 of the Act. All transactions with related parties were dulyreviewed by the Audit Committee of the Board. In terms of Regulation 34(3) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 read with Para A ofSchedule V thereto the Related Party disclosures have been provided separately whichform part of the Annual Report.


In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 a statement containing details of conservation of energytechnology absorption foreign exchange earnings and outgo in the manner as prescribedunder the Companies (Accounts) Rules 2014 is given in Annexure - 3 hereto and forms partof this Report.


In terms of Section 197(12) of the Act read with Rule 5(1) 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modification and amendments thereto) the ratio of the remuneration of eachdirector to the median employee's remuneration and such other details as are requiredunder such rules are attached separately as Annexure - 4 which forms part of this report.


In terms of Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theextract of the annual return in form MGT-9 is annexed herewith as Annexure–5 whichforms & part of this report.


During the year under review two (2) cases were filed and both the cases were disposedas per the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.


The securities of the Company has not been suspended from trading in any of the stockexchanges.


Your Company is committed for adhering to best Environmental Safety & HealthPractices during its manufacturing processes. It targets to achieve 100% EnvironmentalLegal compliances with 100% customer's satisfaction along with continuous trainings andawareness programs on different Environmental Burning Issues from time to time. All theunits of the Company are ISO 14000 and OHSAS 18000 certified and adhere to EMS &Occupational Management Systems. It shows the Company's strong commitment towards EHSphilosophy management and practices. In order to ensure effective implementation ofOMAX's EHS Policy the same is systematically communicated across all the levels and theemployees are trained from time to time to not only build commitment at their levels butalso encourage them to be effective promoters of this philosophy and take EHS as one oftheir key roles in day to day functioning. Environment Health and Safety programs in theorganization is the prime focus of top management to make safe and healthy workenvironment. The EHS programs protect the environment conserve the natural resourcesprovide safe and healthy conditions for work and comply with applicable laws andregulations.

The Company is committed for adopting Zero Incident free work environment by followingcontinuous workplace and classrooms trainings work permit systems third party safetyaudits and stringent safety standards in the workplace. Safety and health compliancesstart from our gates and occupy the topmost position in the yearly goals of the Company.The Company targets to maintain minimum Zero Severity Rate and Frequency Rate to achieveZero injury. All safety compliances being monitored via In-house and third party monthlysafety audits to know least non-conformance to ensure our 100% safety compliances for ouremployees associates and machinery to improve productivity. A dedicated EHS team isavailable in each unit under guidance of corporate EHS on day-to-day basis.

All EHS activities are monitored by monthly EHS MIS review mechanism with allocation ofsufficient resources under separate cost centre for better accountability. The Company isalso dedicated to save our precious natural resources with conservation of water byrecycling our effluent after treatment by installing Reverse Osmosis Plants. Forcontinuous monitoring and to operate our all ETP's at highest efficiency we haveestablished dedicated ETP Lab's at all major locations with dedicated ETP Chemist toachieve and fulfil our commitment towards Zero Liquid Discharge. The Company's strength isEmployee engagement and under this celebrations of Environment and Safety Day Fire &Mock Drills EHS awareness training programs covering all employees and associates underscheduled classroom and floor level training are conducted. EHS Legal Compliance'straining programs are organized for all senior and middle management for betterunderstanding throughout the year to create more vibration amongst the employers so thateach every employer took the responsibilities & guide the others about non pollutedenvironment in the world place as well as in the society. The Company also ensure 100%disposal of all generated Hazardous wastes as per Pollution Control guidelines. TheCompany has also started disposal of E-waste to authorized re-cyclers too.


The Company has hosted certain policies/documents/ information including inter aliaPolicy for determining ‘Material Subsidiaries' Policy on dealing with Related PartyTransactions Familiarization programmes for Independent Directors etc. as per therequirement of law or otherwise. Following link could be used for accessing such polices/documents/information:


The Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers alliance partners bankers and governmentagencies for the continued support given by them to the Company and their confidencereposed in the management. We look forward for your continued support in the future.

For Omax Autos Limited
Place: Gurugram Jatender Kumar Mehta
Date: 17th August 2017 (Chairman cum Managing Director)
(DIN: 00028207)