The Directors have pleasure in presenting the 57th Annual Report along withthe audited accounts of the Company for the year ended 31st March 2021.
Financial & Operational Performance
In March 2020 the COVID-19 pandemic developed rapidly into a global crisis forcingGovernment to enforce lock-downs of all economic activities. For the Company the focusimmediately shifted to ensuring the health and well-being of employees and allstakeholders. Post gradual resumption of operations the focus was on maintaining a safeworkplace and ensuring no production stoppages at our customers' end both in India andabroad. The Company has been able to improve the profitability even with a marginalreducti on in Sales over last year by focused approach to meet customer requirements andimplementati on of cost optimization measures including effective utilization ofresources.
Company's revenues from operations during the year were Rs. 15966 Million compared toRs. 16068 Million in the previous year. Gross Profit [before Other Comprehensive Income(OCI)] for the year after all interest charges but before depreciation and taxes wereRs. 2225 Million compared to Rs. 1895 Million in the previous year. This was inspite ofvery low level of activity in the first quarter of the year.
The summarized standalone and consolidated results of the Company are as under:
| || |
Financial Year ended
|Particulars || |
| ||31/03/2021 ||31/03/2020 ||31/03/2021 ||31/03/2020 |
|Revenue from Operations ||15966 ||16068 ||15966 ||16068 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||2351 ||2018 ||2351 ||2018 |
|Gross Profit (before OCI) ||2225 ||1895 ||2225 ||1895 |
|Depreciation ||1026 ||1030 ||1026 ||1030 |
|Profit Before Tax (before OCI) ||1200 ||864 ||1200 ||864 |
|Income Tax (including for earlier years) ||312 ||134 ||312 ||134 |
|Net Profit After Tax (before OCI) ||888 ||730 ||888 ||730 |
|Dividend including Dividend Distribution Tax ||134 ||325 ||134 ||325 |
|Amount transferred to General Reserve ||778 ||158 ||778 ||158 |
Company's exports increased from Rs. 2650 Million to Rs. 2798 Million despiteuncertainties in markets due to COVID-19. The Company increased its market shareespecially in the exports After Market segment.
The Exports are expected to increase in this year as India is emerging as export hubto Automobile sector. However global situation of COVID-19 pandemic will be a criticalfactor for sales in exports market.
Exports remain an important cornerstone in Company's strategy for sustainable growthand to pro-actively acquire deeper understanding of the technology quality and serviceexpectations of global OEMs operating in advanced automobile markets.
The Company continues to sustain its commitment to the highest levels of quality andincreased focus on business continuity plan. During the year the Company took variousmeasures for cost reduction such as affordable automation interlinking of machinesenergy conservati on and productivity improvement across products which could help toremain cost competitive to facilitate improvement in market share and margins on asustainable basis.
During the year the Company has signed Productivity Linked Wage Agreements withworkmen at both Plants inspite of business uncertainties. The Agreements were concludedharmoniously as in the past.
With a well-equipped Tech Centre and strong support from our Technology Partners theCompany had acquired key businesses for BS-6 models in the last year requiring latesttechnology and stringent quality requirements. This also resulted in higher market sharewith the key OEMs in India. During the year the Company had smooth ramp up of producti onfor BS-6 models to the satisfaction of all our OEMs.
Company continues to invest in latest technology to stay ahead of competition.
The Directors have recommended that interim dividend @ Rs. 6.00 per share for the year2020-21 already paid to Equity Shareholders be treated as final dividend.
New projects and Capacity Expansion
The Company has a clear strategy for diversification of its product portfolio and isactively working on the same for continuous growth in sales. The Company is working onidentifying suitable products and technology partners to help its entry into the electricmobility segment and other adjacencies.
Change in nature of business
During F.Y. 2020-21 there was no change in nature of Company's business.
Material changes and commitment
The impact of COVID-19 had gradually reduced in 3rd and 4thquarter of the year. However in view of unfortunate onset of second wave of COVID-19 themarkets have got affected adversely during the period from April 1 2021 till the date ofsigning of this Report.
Subsidiary Company and its Annual Accounts
There was no operation in the Subsidiary Company M/s SPR International Auto ExportsLimited during the year. Annual accounts of the Subsidiary Company are available onCompany's website and shall also be kept for inspection by any member in the Head Officeand Registered Office. Copy of Annual Accounts of Subsidiary Company would also be madeavailable to members seeking such information.
In accordance with the Indian Accounting Standard (Ind AS-110) on consolidatedfinancial statements the consolidated financial statements are attached which form partof the Annual Report.
During the year no company has become or ceased to be Company's Subsidiary JointVenture or Associate Company.
During the year 7 meetings of Board of Directors were held details of which have beenprovided in the Report on Corporate Governance Annexure-I to this Report.
As on 31.03.2021 members of the Audit Committee of the Company are Shri InderdeepSingh (Chairman) Shri Pradeep Dinodia Ms. Ferida Chopra and Shri Alok Ranjan.
During the year the Board has accepted all recommendations made by the AuditCommittee.
Whistle Blower Policy
The Company has a Whistle Blower Policy for Directors Employees and Stakeholders toreport any kind of misuse of Company's properties mismanagement or wrongful conductprevailing/executed in the Company. As per the policy all Whistle Blowers are grantedaccess to Chairman of the Audit Committee in appropriate cases.
Nomination and Remuneration Policy
The Nomination and Remuneration Committee (NRC) of Board has formulated a Nominati onand Remuneration Policy for remuneration of Directors Key Managerial Personnel (KMP)Senior Management Personnel (SMP) and other employees of the Company.
The Nomination and Remuneration Policy covers the criteria for appointment of Directors(including Independent Directors) KMPs and SMPs. The Policy also covers the criteria forremuneration.
There was no change in the Policy during the year.
The level and composition of remunerati on shall be reasonable and sufficient toattract retain and motivate Directors KMPs SMPs and employees at all levels. It shallbe determined taking into account the factors such as Company's performance and theremuneration structure as generally applicable in the industry.
The Directors affirm that remuneration paid to all Directors KMPs SMPs and all otheremployees is as per the remuneration policy of the Company.
Nomination and Remuneration Policy of the Company is available on Company's websiteviz. www.shrirampistons.com under the link "Investors' Guide".
As on 31.03.2021 number of permanent employees on rolls of the Company are 4120.
Related Party Transactions
The Company's contracts/arrangements/transacti ons with related parti es are in theordinary course of business and on arm's length basis. Thus provisions of Section 188(1)of the Companies Act 2013 are not applicable. During the year the Company has notentered into any contract/ arrangement/ transaction with related parties which could beconstrued to be "material" in accordance with the "Policy for determiningmaterial Related Party Transacti ons" approved by the Board. Thus there are notransactions required to be reported in Form AOC-2. Details of all transactions withrelated parties are given in Note No. 33 of Notes forming part of Financial Statements.
The Company has complied with the Accounting Standards on Related Party Transactions.
Internal Financial controls and their adequacy
The Company had appointed M/s Ernst & Young and M/s KPMG as its Internal Auditorsfor 2020-21 in addition to its in house team. The Internal Control System is commensuratewith the size scale and complexity of Company's operations. The Internal Auditors reportto the Chairman of the Audit Committee.
The Internal Audit teams monitor and evaluate the efficacy and adequacy of internalcontrol systems in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on their reports thecorrective actions in respective areas are taken to strengthen the controls andsignificant audit observations and corrective actions thereon are presented to the AuditCommittee.
Annexures to Directors' Report
Following reports which form an integral part of Directors' report are enclosed: -
1. Report on "CORPORATE GOVERNANCE" - as per Annexure-I
2. Report on "MANAGEMENT DISCUSSION AND ANALYSIS" - as per Annexure-II
3. Report on "CONSERVATION OF ENERGY" "TECHNOLOGY ABSORPTION" and"FOREIGN EXCHANGE EARNING & OUTGO" - as per Annexure-III
4. Data of "EMPLOYEES" - as per Annexure-IV
5. "DETAILS AND ANNUAL REPORT ON CSR" - as per Annexure-V
6. "SECRETARIAL AUDIT REPORT" - as per Annexure-VI
7. "SALIENT FEATURES OF SUBSIDIARY COMPANY" - as per Annexure-VII
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areport on Business Responsibility forms part of this Annual Report.
Disclosures on Company's website
Company is committed to good corporate governance practi ce and corporate socialresponsibility. In line with the Company's principles/ commitment the followingpolicies/programmes/reports are in place and are available on Company's website viz.www.shrirampistons.com under the link "Investors' Guide":
1. Corporate Social Responsibility (CSR) Policy
2. Vigil Mechanism/ Whistle Blower Policy
3. Company's policy on dealing with Related party transactions
4. Nomination and Remuneration Policy
5. Familiarization programmes for Independent Directors
6. Policy for distribution of Dividend and
7. Annual Return of the Company
Directors' Responsibility Statement:
The Directors confirm that: -
1. in the preparati on of the annual accounts the applicable Account! ng Standardsissued by the Insti tute of Chartered Accountants of India and requirements of CompaniesAct have been followed and there are no material departures from the same.
2. appropriate accounting policies have been selected and applied consistently andhave 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 at 31st March 2021 and ofthe profit of the Company for the same year.
3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
4. the annual accounts have been prepared on a going concern basis.
5. internal financial controls are followed by the Company and are adequate andoperating effectively.
6. proper and adequate systems have been devised to ensure compliance with provisionsof all applicable laws and such systems are adequate and operating effectively.
1. During the year no fraud has been reported by the Statutory Auditors to the AuditCommittee or the Board under Section 143(12) of the Companies Act 2013.
2. No orders were passed by the Regulators or Courts or Tribunals which could impactgoing concern status and Company's operations in future.
3. There are no disqualifications reservations or adverse remarks or disclaimers inthe Statutory Auditors' and Secretarial Auditors' Report.
4. No Director of the Company is receiving commission from the Company as well as fromits Subsidiary Company.
5. Company has not given any loans guarantees or made investments under section 186 ofthe Companies Act 2013.
6. The Company has complied with applicable Secretarial Standards on Board Meetings andGeneral Meetings.
7. The Company has not issued any of the following:
i) Equity Shares with differential rights
ii) Sweat Equity Shares
iii) Shares issued pursuant to Employee Stock Option Scheme or Employee Stock PurchaseScheme
8. During the year the Company has not bought back any Shares.
Fixed deposits amounting to Rs. 303 Million were accepted during the year and depositsamounting to Rs. 20 Million pertaining to 40 depositors remained unclaimed/ unpaid at theclose of the year. During the year there was no default in repayment of deposits andinterest thereon. Deposits accepted by the Company are in compliance with requirements ofChapter V of the Companies Act 2013.
Investor Education and Protection Fund
The amount lying in unpaid dividend accounts for last seven years is Rs. 0.59 Million.Unclaimed final dividend amount of F.Y. 2013-14 is due to be transferred to the InvestorEducation and Protection Fund on 04.09.2021. Amount transferred to the Investor Educationand Protection Fund during the year is Rs. 0.19 Million.
Disclosures w.r.t. shares lying in IEPF Account:
|S. No. Particulars ||No. of Shareholders ||No. of Shares |
|1 Aggregate number of Shareholders and the outstanding shares in the IEPF Authority account lying at the beginning of the year ||11 ||14800 |
|2 Number of Shareholders who approached the Company for transfer of shares from IEPF Authority account during the year ||NIL ||NIL |
|3 Number of Shareholders to whom shares were transferred from IEPF Authority account during the year ||NIL ||NIL |
|4 Aggregate number of Shareholders and the outstanding shares in the IEPF Authority account lying at the end of the year ||11 ||14800 |
The voting rights on these shares shall remain frozen till the rightful owner of suchshares claims the shares.
Maintenance of Cost Records and Cost Audit
As specified by the Central Government the Company is required to maintain CostRecords and get these records audited by a Cost Accountant.
The Company is maintaining Cost Records. Cost Audit Report of the Company for the yearended 31st March 2020 duly audited by M/s Chandra Wadhwa & Co. CostAccountants New Delhi was submitted to the Ministry of Corporate Affairs Government ofIndia on 5th September 2020 before the due date of 9th September2020.
Details of CSR Activities undertaken by the Company
During the year Company has spent Rs. 25.44 Million on various CSR activities againstthe requirement of Rs. 35.56 Million as per the provisions of the Companies Act 2013. Anamount of Rs. 10.26 Million has been transferred to Unspent CSR Account-2020-21 whichwould be incurred in following years. Details of initiatives taken by the Company duringthe year in CSR activities and composition of CSR Committee are provided in Report on CSRActivities undertaken by the Company in 2020-21 Annexure-V to this Report.
Risk Management Framework
The Company has developed and implemented Risk Management Policy includingidentification of elements of risk if any which in the opinion of the Board may threatenthe existence of the Company. The Company has also constituted a "Risk ManagementCommittee". As on 31.03.2021 Members of the Committee are Shri Pradeep Dinodia(Chairman) Shri Inderdeep Singh Shri Alok Ranjan Ms. Meenakshi Dass Shri KrishnakumarSrinivasan Shri A. K. Taneja and Shri Luv D. Shriram.
Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
The Company has complied with provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The Company has in place a Policy onprevention of sexual harassment at workplace. The Company has also constituted InternalComplaints Committees under the Act. No complaint was received/ pending under the aboveAct during the year.
Changes in Directors/ KMPs during the year and Appointment/ Re-appointment of Directorsin the ensuing AGM
The Shareholders in their meeting held on 11.8.2020 had given their consent throughSpecial Resolution for appointment of Shri Krishnakumar Srinivasan as Managing Director ofthe Company for a period of five years effective from 11.02.2020 and to assume the officeof Managing Director & CEO of the Company w.e.f. 01.04.2021.
In view of Shri Krishnakumar Srinivasan taking over as Managing Director & CEOw.e.f. 1.4.2021 Shri A.K. Taneja relinquished his charge as CEO of the Company from theclosing hours of 31.3.2021 and has been re-designated as Managing Director & ChiefMentor w.e.f. 1.4.2021.
The Board had re-designated Shri Hari S. Bhartia as Non-Executive Independent Directorof the Company for a period of five years effective from 31.03.2020. This was subsequentlyapproved by Shareholders in their meeting held on 11.8.2020.
The Board had appointed Shri Yukio Tanemura as Non-Executive Director of the Companyw.e.f. 27.7.2019 in the casual vacancy caused due to resignation of Shri M. Sekimoto.This was subsequently approved by Shareholders in their meeting held on 11.8.2020 and hisoffice is liable to retire by rotation.
The Board had in its meeting held on 29.05.2020 appointed Shri Sascha Putz asAlternate Director to Dr. Peter Neu.
Dr. Peter Neu Non-Executive Director of the Company had resigned w.e.f. closing hoursof 01.02.2021. Consequently Shri Sascha Putz Alternate Director to Dr. Peter Neu alsoceased to be Director of the Company.
Pursuant to resignation of Dr. Peter Neu the Board had in its meeting held on30.03.2021 appointed Shri Sascha Putz as Director in the casual vacancy caused due toresignation of Dr. Peter Neu.
Shri R. Srinivasan Joint Managing Director and Company Secretary who was also theCompliance Officer superannuated from the services of the Company w.e.f. closing hours of31.01.2021.
The Board expressed deep appreciation of the immense contribution of Shri R. Srinivasanto the growth of the Company spanning about 48 years of his service and making SPR oneof the most respected names in the auto component industry in India and placed on recordthe services rendered by Shri R. Srinivasan.
Pursuant to superannuation of Shri R. Srinivasan Shri Naveen Agarwal was designated asCompliance Officer w.e.f. 01.02.2021 and he will continue to remain and act as AlternateCompany Secretary of the Company.
Shri Kiyoto Tone Independent Director has resigned from the Directorship of theCompany to be effective from closing hours of 7.5.2021.
The Board has appointed Shri Shinichi Unno as Independent Director of the Company inthe casual vacancy caused due to resignation of Shri Kiyoto Tone subject to allotment ofDirector's Identification Number (DIN) by Ministry of Corporate Affairs (MCA). Theappointment shall be effective from the date of allotment of DIN by MCA.
Shri Vinod Raheja Chief Financial Officer (CFO) of the Company ceased to be inemployment of the Company from the closing hours of 30.06.2020. The Board appointed ShriNaveen Agarwal as CFO of the Company w.e.f. 30.12.2020 till the date of joining of ShriPrem Prakash Rathi as CFO. Shri Prem Prakash Rathi joined the Company as CFO w.e.f.08.01.2021.
Ms. Meenakshi Dass and Shri Pradeep Dinodia Directors retire by rotation and beingeligible offer themselves for re-appointment.
Brief resume and other details of all Directors seeking appointment/re-appointment aregiven in the 'Notice of the Annual General Meeting'.
The Board appreciated significant contribution of all Directors who have ceased to beDirectors during the year to the Company and in Board deliberations and the servicesrendered.
Declarations from Independent Directors
Shri Hari S. Bhartia Ms. Ferida Chopra Shri Alok Ranjan Shri Inderdeep Singh andShri Kiyoto Tone are Independent Directors of the Company and have given the declarationsto the Board that they meet the criteria of independence as provided under Section 149(6)of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Performance evaluation of Board its Committees and Individual Directors
Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance evaluation of the working of itsCommittees and the Directors individually. The manner in which the evaluation has beencarried out has been explained in Report on Corporate Governance Annexure-I to thisReport.
In the opinion of the Board Independent Directors appointed/ re-appointed during theyear possess relevant integrity expertise and experience required to perform theirduties. Some of the Independent Directors have cleared the on-line proficiency test beingconducted by Indian Institute of Corporate Affairs and the remaining Independent Directorsare in the process of appearing in the same.
The Directors place on record their appreciati on of the support extended to theCompany by the Collaborators the Bankers its business associates and their appreciationof the work of all ranks of Company's personnel during the year especially duringCOVID-19.
| ||On behalf of the Board |
|New Delhi ||(PRADEEP DINODIA) |
|May 07 2021 ||CHAIRMAN |
| ||DIN:00027995 |