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Directors Report of Munjal Auto Industries Ltd.

Mar 31, 2015

Dear Members

The Directors are pleased to present Company''s 30th Annual Report and audited financial statements for the year ended March 31, 2015.

FINANCIAL RESULTS

The Company''s financial performance for the year ended March 31, 2015 is summarized below:-

(Rs. in Lacs)

Year ended March 31, 2014-2015 2013-2014

Sales & Other Income 97277.31 89192.42

Profit before Finance Cost & Depreciation 7275.87 6785.00

Depreciation 1483.54 1244.86

Finance Cost 863.23 601.48

Profit before Taxation 4929.10 4938.66

Provision for Taxation (Deferred &Current) 1125.96 172.88

Profit after Taxation 3803.14 4765.78

Profit available for Appropriations 3803.14 4765.78 Appropriations

Proposed Dividend on Equity Shares 1250.00 1250.00

Tax on Dividend 254.47 212.44

Transfer to General Reserve - 476.58

Profit remaining after Appropriation 2298.67 2826.76

DIVIDEND

Your Directors have pleasure to recommend a dividend of 125% i.e. Rs.2.50/- on equity share of face value of Rs. 2/- each for the fiscal year ended 31st March, 2015. The dividend, if approved by the Members in the ensuing Annual General Meeting, would absorb Rs.1504.47 lacs including dividend distribution tax (Rs. 1,462.43 lacs previous year) out of the distributable profits available.

APPROPRIATIONS

After setting aside amount of Rs.1504.47 lacs towards dividend including dividend distribution tax and after transferring an amount of Rs. Nil (Rs. 476.58 lacs previous year) to General Reserve, the balance amount of Rs.2059.87 lacs (Rs. 2,826.76 lacs previous year) is being retained in the Profit and Loss Account.

PERFORMANCE

The Company has achieved sales turnover of Rs. 961.42 Crore registering a modest growth of 9.08% per cent. Profit before tax is Rs.49.29 Crore and profit after tax at Rs. 38.03 Crore during the year as against Rs. 49.39 Crore and Rs. 47.66 Crore respectively in the previous year. Considering the overall sluggish conditions in Indian Economy and in auto sector, the operating numbers can be deemed as satisfactory.

CAPACITY UTILIZATION & PLANT OPERATIONS

All four units of the Company at Waghodia in Gujarat, Bawal as well as Dharuhera both in Haryana and Haridwar in Uttarakhand are running well and continue to operate at a satisfactory level of efficiency.

SHARE CAPITAL

The paid up equity capital as on March 31, 2015 stands at Rs. 10 Crore consisting of 5 Crore Equity Shares of Rs.2/- each. During the year under review, the Company has not issued any bonus shares, additional equity shares, any right shares with differential voting rights nor granted any stock options or issued any sweat equity shares.

APPOINTMENT/ CESSATION OF DIRECTORS

In terms of section 152 of Companies Act, 2013 and the applicable provisions therein, one-third of the retiring Directors (other than independent directors who are non retiring) shall retire by rotation, and if eligible, may offer themselves for re-election at the Annual General Meeting of the Shareholders. Accordingly, Mr. Sudhir Kumar Munjal retires by rotation at this Annual General Meeting and being eligible, offers himself for reelection.

Your Board recommends re-appointment of Mr. Sudhir Kumar Munjal, retiring at the forthcoming AGM of Company in terms Section 152 of Companies Act, 2013, who in opinion of the Board fulfills the conditions for reappointment specified in the Act and rules made thereunder.

Shri Satyanand ji Munjal, chairman of the Company has resigned, due to advanced age, from the directorship of the Company w.e.f. February 02, 2015. The Board of Directors, while wishing him a healthy, long life, takes on record the invaluable guidance provided by Shri Satyanand ji Munjal since inception of the Company. His guiding principles have laid the path of good governance in steering affairs of the Company all these years and his foundational values taking care of interests of all stakeholders in the company will continue to be a good legacy. Shri Sudhir Kumar Munjal has been appointed as Chairman & Managing Director of the Company w.e.f. March 28, 2015.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance of the Board and individual Directors was evaluated by the Board seeking relevant inputs from all the Directors. The Nomination and Remuneration committee (NRC) reviewed the performance of the individual Director. A separate meeting of Independent Directors was also held to review the performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chair-person of the Company.

QUALITY

Your Company is focusing on quality, right from new product development stage such as design of processes, manufacturing of tools, fixtures & dies so as to ensure quality output on a sustainable basis. This attribute of your Company has enabled it remain a consistent quality producer over the years.

FINANCE AND ACCOUNTS

Your Company continued to focus on operational improvement. Continuing focus on managing optimal levels of inventory, sound business performance, operating efficiencies in various segments of business and cost saving drive across the organization have helped it generate decent cash flow from operations, notwithstanding headwinds blowing in automobile sector and sluggish macro-economic environ throughout the year.

Your Company was able to raise the short-term/long term funds needed for its working capital related requirements & term loans for new capital expenditure at reasonable rates. Your Company continues to enjoy excellent credit ratings for both long and short tenure borrowings and maintains impeccable debt-servicing track record, which helps it retain excellent rapport with all of its bankers.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The amount required to be spent on CSR activities during the year under report in accordance with the provisions of section 135 of the Act is Rs. 92.94 lacs and the Company has spent Rs. 37.99 lacs during the current financial year. The shortfall in the spend during the year under report is intended to be utilized in phased manner in future, upon identification of suitable projects/programmes within the Company''s CSR Policy.

The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure A to this Report.

FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES, SECURITIES OR INVESTMENTS

The Company has not given any guarantees or securities covered under the provisions of section 186 of the Companies Act, 2013 (''the Act'').

However, the aggregate of loans and advances granted as also investments are within the limits of Section 186 of the Act.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS PURSUANT TO SECTION 149(6) OF THE ACT

The Company has received declaration from all independent directors of the Company to the effect that they meet criteria of independence as stipulated u/s 149(6) of the Act and Clause 49 of the listing agreement.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review;

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis; and

e) The directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

f) The directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively;

PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188 OF THE COMPANIES ACT, 2013

There were no related party transactions entered into during the financial year under section 188 of Companies Act, 2013.

HOLDING COMPANY

Thakur Devi Investments Private Limited is a holding company of the Company holding 74.81% Equity Share Capital of the Company.

AUDIT COMMITTEE RECOMMENDATIONS

During the year, The Board has accepted all recommendations of Audit Committee and accordingly no disclosure is required to be made in respect of no acceptance of the recommendation of the Audit Committee by the Board.

RATINGS FOR BORROWING

ICRA, the rating agency has reaffirmed AA- with stable outlook for the long term ratings for bank facilities and A1 the short term rating for short term bank facilities and commercial paper of your Company.

AUDITORS

The auditors, M/s. VAKIL, JAIN & HINDOCHA, Chartered Accountants, retire at the ensuing Annual General Meeting. They have furnished their consent and requisite certificate pursuant to the Companies Act, 2013 in respect of their proposed reappointment.

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT-9 is annexed herewith as Annexure B.

EXPLANATION/ COMMENTS ON QUALIFICATION/ RESERVATION/ ADVERSE REMARK/ DISCLAIMER BY THE AUDITORS, IF ANY

Since there was no qualification/ reservation/ adverse remark/ disclaimer either by the Auditors or Secretarial Auditors in their respective report, no explanation/ comment is offered.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management have been given appropriate training in this regard.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company has a vigil mechanism/whistle blower policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant to new SEBI (Prohibition & Insider Trading) Regulation 2015 in place of SEBI (Prohibition & Insider Trading) Regulation 1992 with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company''s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the ''Trading Window'' is closed. The Board is responsible for implementation of the Code. All Directors and the designated employees have confirmed compliance with the Code.

BOARD MEETINGS

Five meetings of the Board of Directors were held during the year. Details of the composition of the Board and its committees and of the meeting held, attendance of the directors of such meeting and other relevant details are provided in the Corporate Governance Report.

SECRETARIAL AUDITOR

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s Devesh Vimal & Co., Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure C to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

RISK MANAGEMENT POLICY

The Company has adopted a Risk Management policy in accordance with the provision of Companies Act 2013 and Clause 49 of Listing Agreement. It established various level of accountability and overview within the company, while vesting identified manager with responsibility for each significant risk.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERN STATUS/ COMPANY''S OPERATIONS IN FUTURE

No significant/ material orders have been passed by the regulators or courts or tribunals impacting the going concern status of the Company or company''s operations in future.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company. Remuneration of KMP and Sitting fees paid to Independent Directors are provided in Annexure B i.e. Extract of Annual Return Form No. MGT-9. There was no employee of the Company except Executive Directors employed through out the year who was in receipt of the remuneration exceeding Rs. 60 Lacs per annuam.

MANAGEMEMNT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is enclosed as per Annexure D and forms part of this report.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial throughout the year in the Company at all of its units.

ENVIRONMENT, HEALTH, SAFETYAND SOCIAL RESPONSIBILITY

Your Company is committed in maintaining the highest standards of environment compliances and therefore adopted a systematic approach towards environment management by embedding a vision of being an ''Injury Free'' and ''Zero Environment Incident'' organisation. Over the past many years, your Company has been progressing well in terms of reducing injury frequency rates and has improved the safety records.

Your Company is environment-conscious and committed to making a positive contribution to the communities where it operates. The Company has been proactively pursuing measures and reaching out to the communities surrounding the areas of its operations by extending support and lending a helping hand to some very credible social institutions that are committed to address social causes.

Your Company has been certified for Occupation, Health and Safety (OHSAS)18001:2007 from Bureau Veritas during FY 2012-13, which is valid for three years. Your Company is committed for safety and occupational health & compliance with applicable safety and occupational health legislation, regulations and other requirements. All incidents/ accidents are investigated and analysed to prevent reoccurrence and improve upon safety record.

CONSERVATION OF ENERGY/ TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has not imported any foreign technology and hence, the company does not have any information to offer in respect of Technology absorption. However, information in respect of Conservation of energy & foreign exchange earnings and outgo is enclosed in Annexure E.

COMPANY''S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The requisite details as required under Section 134(3)(e), Section 178(3) & (4) and Clause 49 of the Listing Agreement are annexed as Annexure F to this report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, IF ANY, DURING THE PERIOD FROM 31st MARCH, 2015 TO THE DATE OF THE REPORT

There has no material change/ commitment affecting the financial position of the Company during the period from the end of the financial year on 31st March, 2015 to the date of the Report.

ACKNOWLEDGEMENTS

The Company would like to thank all of its Stakeholders, including inter alia Suppliers, Vendors, Investors and Bankers and appreciation to all its customers for their consistent, abiding support throughout the year.

Your Company also records its appreciation of the contributions made by employees at all levels. Their commitment, cooperation and support are indeed the backbone of all endeavors of the Company.

The Company would like to acknowledge Government of India, Customs and Excise Departments, Income Tax Department, Industrial & Labour Departments, Government of Gujarat, Government of Haryana, Government of Uttarakhand and other government agencies for the support; the Company has been receiving over the years and is looking forward to their continued support/guidance in times to come.

For and on behalf of the Board Munjal Auto Industries Limited

Date : 29th May, 2015 Sudhir Kumar Munjal Place : Waghodia Chairman & Managing Director DIN : 00084080


Mar 31, 2014

The Members

The Directors have pleasure in presenting the 29th Annual Report along with the Balance Sheet and Profit and Loss Account for the year ended March 31, 2014.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended March 31, 2014 2013

Sales & Other Income 89192.42 78622.38

Profit before Finance Cost & Depreciation 6802.66 5999.28 Depreciation 1244.86 1137.88

Finance Cost 619.14 686.98

Profit before Taxation 4938.66 4174.42

Provision for Taxation (Deferred & Current) 172.88 225.46 Profit after Taxation 4765.78 3948.96

Profit available for Appropriations 4765.78 3948.96

Appropriations

Proposed Dividend on Equity Shares 1250.00 1000.00 Tax on Dividend 212.44 169.95

Transfer to General Reserve 476.58 394.89

Profit remaining after Appropriation/s 2826.76 2384.12

DIVIDEND

Your Directors have pleasure to recommend a dividend of 125% i.e. Rs.2.50/- on equity share of face value of Rs. 2/- each for the fiscal year ended 31st March, 2014. The dividend, if approved by the Members in the ensuing Annual General Meeting, would absorb Rs.1,462.43 lacs (Rs.1,169.95 lacs previous year) out of the distributable profits available.

The Register of Members and Share Transfer Books will remain closed from August 04,2014 to August 08,2014 (both days inclusive).

APPROPRIATIONS

After setting aside the amount of Rs.1,462.43 lacs toward dividend including dividend distribution tax and after transferring an amount of Rs. 476.58 lacs (Rs. 394.89 lacs previous year) to General Reserve, the balance amount of Rs.2,826.76 lacs (Rs. 2,384.12 lacs previous year) is being retained in the Profit and Loss Account.

PERFORMANCE

The Company has achieved sales turnover of Rs. 881.33 Crore registering a modest growth of 13.70% per cent. Profit before tax is Rs.49.39 Crore and profit after tax at Rs. 47.66 Crore during the year as against Rs.41.74 Crore and Rs.39.49 Crore respectively in the previous year.

CAPACITY UTILIZATION & PLANT OPERATIONS

All three units of the Company at Waghodia in Gujarat, Bawal in Haryana and Haridwar in Uttarakhand are running well and continue to operate at a satisfactory level of efficiency. The fourth unit at Dharuhera in Haryana has just become operational with an investment outlay of INR 32 crore. This new facility will further boost company''s prospects to widen product range and exports.

DIRECTORS

In terms of the Articles of Association of the Company and the applicable provision of Companies Act,1956, one-third of the Directors retires by rotation, if eligible, offer themselves for re-election at the Annual General Meeting of shareholders. Accordingly, Mr. Vikram Shah, Mr. Ramkisan Devidayal and Mr. Jal Ratanshaw Patel shall retire by rotation at this Annual General Meeting, being eligible, offer themselves for reappointment.

Your Board recommends the re-appointments of Mr. Vikram Shah, Mr. Ramkisan Devidayal and Mr. Jal Ratanshaw Patel as Independent Directors of the Company in terms of Section 149 and 152 of Companies Act, 2013, who in opinion of the Board fulfills the condition specified in the Act and rules made thereunder and are independent of Management.

In the opinion of the Board, all existing Non- Executive and Independent Directors of the Company viz. Mr. Vikram Shah, Mr. Naresh Chawla, Mr. Mahendra Sanghvi, Mr. Ramkisan Devidayal, Mr. Sudesh Kumar Duggal and Mr. Jal Ratanshaw Patel fulfills the conditions for their appointment as specified in the act and the listing agreement hence, the Board recommends appointment of aforesaid existing Directors as Independent Directors in terms of Section 149 and 152 of Companies Act, 2013.

Brief resume/details of the Directors, who is/are to be appointed/ re-appointed as mention herein above has been furnished along with the Explanatory Statements to the Notice of the ensuing Annual General Meeting.

QUALITY

Your Company is focusing on quality, right from new product development stage such as design of processes, manufacturing of tools, fixtures & dies to ensure, quality output. This attribute of your Company that has enabled it remain a consistent quality producer over the years.

AWARDS AND RECOGNITION

Your Company is known for its scrupulous adherence to high class manufacturing practices at all its plants and continues to receive accreditations/recognitions regularly over the years. In current FY, it received following recognitions:

1) 2nd Prize in 1st ACMA (Western Region) in Kaizen competition in Gujarat zone held in September, 2013.

2) Automotive Components Manufactures Association (ACMA), Center of Technology, has conferred an award for outstanding performance in Inventory Turnover Ratio to our Haridwar plant during Cluster VII (0ct-2011 to Sept-2013).

FINANCE AND ACCOUNTS

Your Company continued to focus on cash generation. The focus on managing optimal levels of inventory, sound business performance, operating efficiencies and cost saving across the organisation helped generate healthy cash flow. Your Company managed investments prudently by developing cash surplus in a balanced portfolio defined to offer primacy to safety and liquidity of the investments.

Your Company was able to raise the short-term/long term funds needed for its working capital related requirements & term loans for new capital expenditure at reasonable rates. Your Company continues to enjoy excellent credit ratings for both long and short tenure borrowings and maintains impeccable debt-servicing track record, which helps it retain excellent rapport with all of its bankers.

CORPORATE GOVERNANCE

As per clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with Auditor''s certificate thereon and Management Discussion and Analysis are attached and form part of this report.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year and hence, no amount of principal or interest on public deposits was outstanding as on the date of the balance sheet.

DIRECTORS'' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, with regard to the Directors'' responsibility statement, the Board of Directors confirms that:

a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

b) The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and the profit of the Company for the year ended on that date.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Annual Accounts have been prepared on a going concern basis.

AUDIT COMMITTEE RECOMMENDATION

During the year, The Board has accepted all recommendation of Audit Committee and accordingly no disclosure is required to be made in respect of no acceptance of the recommendation of the Audit Committee by the Board.

RATINGS FOR BORROWING

The long term ratings for bank facilities of your Company have been reaffirmed at AA- with stable outlook. The short term rating for short term bank facilities and commercial paper is also reaffirmed at A1 by rating agency ICRA.

AUDITORS

The auditors, M/s. VAKIL, JAIN & HIND OCHA, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the Auditor''s office, if reappointed. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is enclosed as per annexe -I and forms part of this report.

PARTICULARS RELATING TO ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

The particulars as prescribed under Section 217(1) ($) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure - II that forms part of this report. PARTICULARS OF EMPLOYEES

As required under the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, requisite particulars of employees are set out in the Annexure - III included in this report.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial throughout the year in the Company at all of its units.

ENVIRONMENT, HEALTH, SAFETY AND SOCIAL RESPONSIBILITY

Your Company is committed in maintaining the highest standards of environment compliances and therefore adopted a systematic approach towards environment management by embedding a vision of being an ''Injury Free'' and ''Zero Environment Incident'' organisation. Over the past many years, your Company has been progressing well in terms of reducing injury frequency rates and has improved the safety records. Your Company is environment-conscious and committed to making a positive contribution to the communities where it operates. The Company has been proactively pursuing measures and reaching out to the communities surrounding the areas of its operations by extending support and lending a helping hand to some very credible social institutions that are committed to address social causes.

ACKNOWLEDGEMENTS

The Company would like to thank all of its Stakeholders, including inter alia Suppliers, Vendors, Investors and Bankers, a special mention and appreciation to all its customers for their consistent, abiding support throughout the year.

Your Company also records its appreciation of the contributions made by employees at all levels. Their commitment, cooperation and support are indeed the backbone of all endeavors of the Company.

The Company would like to acknowledge Government of India, Customs and Excise Departments, Income Tax Department, Industrial & Labour Departments, Government of Gujarat, Government of Haryana, Government of Uttarakhand and other government agencies for the support; the Company has been receiving over the years and is looking forward to their continued support/guidance in times to come.

For and on behalf of the Board Munjal Auto Industries Limited Date : 19.05.2014 Sudhir Munjal Place : Waghodia Managing Director


Mar 31, 2013

To The Members of Munjal Auto Industries Limited

The Directors have pleasure in presenting the 28th Annual Report along with the Balance Sheet and Profit and Loss Account for the year ended March 31, 2013.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended March 31, 2013 2012

Sales & Other Income 7862238 7358227

Profit before Finance Cost & Depreciation 599938 6609.56

Depreciation 1137.88 1003.05

Finance Cost 686.69 778.72

Profit before Taxation 4174.42 4827.79

Provision for Taxation (Deferred & Current) 225.46 395.90

Profit after Taxation 3948.96 4431.89

Profit available for Appropriations 3948.96 4431.89

Appropriations

Proposed Dividend on Equity Shares 1000.00 1000.00

Tax on Dividend 169.95 162.22

Transfer to General Reserve 394.89 443.19

Profit remaining after Appropriation/s 2384.12 2826.48

DIVIDEND

Your Directors have pleasure to recommend a dividend of 100% i.e. Rs.2/- on equity share of Rs. 2 each for the fiscal year ended 31st March, 2013. The dividend, if approved by the Members in the ensuing Annual General Meeting, would absorb Rs.1169.95 lacs (Rs. 1162.22 lacs previous year) out of the distributable profits available.

The Register of Members and Share Transfer Books will remain closed from August 5, 2013 to August 10, 2013 (both days inclusive).

APPROPRIATIONS

After setting aside the amount of Rs.1169.95 lacs toward dividend including dividend distribution tax and after transferring an amount of Rs. 394.89 lacs (Rs. 443.18 lacs previous year) to General Reserve, the balance amount of Rs.2384.12 lacs (Rs. 2826.48 lacs previous year) is being retained in the Profit and Loss Account.

PERFORMANCE

The Company has achieved sales turnover of Rs. 775.14 Crore registering a modest growth of 6.44% per cent. Profit before tax is Rs.41.74 Crore and profit after tax at Rs. 39.49 Crore during the year as against Rs.48.28 Crore and Rs.44.32 Crore respectively in the

previous year. Decline in Profitability during the year over that of the previous year – both at PBT and PAT levels – is a reflection of the challenging business environment; increase in operating costs could not be offset with commensurate increase in product prices due to tough conditions in the automobile sector and the resultant cascading effects on the auto components market in which your Company operates. The EBIDTA or the Gross Margins from operations as a result, have fallen by INR 610 lac in the current year, which represents 829 bps on sales and other income in current financial year ended March, 2013 as compared with 967 bps in the previous financial year.

CAPACITY UTILIZATION & PLANT OPERATIONS

All Three units of the Company at Waghodia in Gujarat, Bawal in Haryana and Haridwar in Uttarakhand are running well and continue to operate at a satisfactory level of efficiency.

DIRECTORS

Mr. Satyanand Munjal, Mr. Mahendra Sanghvi and Mr. Naresh Chawla retire by rotation in the forthcoming Annual General Meeting. All of them, being eligible, offer themselves for reappointment.

Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting and Explanatory Statement in this regard.

GREEN INITIATIVE

The Ministry of Corporate Affairs(MCA) vide Circular No.17/2011 dated 21.04.2011 together with another Circular No. 18/2011 dated 29.04.2011 has launched "Green Initiative in the Corporate Governance" by encouraging Companies to come forward and take paperless compliance. Environment conscious as your Company is, it appreciates this move by MCA as it will benefit the society at large through reduction in paper consumption and contribution towards a Greener Environment.

In acknowledgment of such an environ-friendly initiative of MCA, your Company is poised to take concrete steps by sending documents such as Notice of the General Meetings, Annual Report and other communication/s to its shareholders via electronic mode to the registered e-mail addresses of the shareholders. To effectuate this green initiative of the Government in full measure, shareholders are requested to register/update, as soon as possible, their latest e-mail addresses with their Depository Participant (D.P.) with whom they have their Demat Account or send the same to the Company via e- mail at cs@munjalauto.com. We solicit your valuable cooperation and support in our endeavor to contribute our bit to the environment.

QUALITY:

Your Company is focusing on quality, right from new product development stage such as design of processes, manufacturing of tools, fixtures & dies to ensure, quality output. This attribute of your

Company that has enabled it remain a consistent quality producer over the years.

Your Company encourages employees at all locations of its operations to adopt and include best practices viz employee education and involvement, low cost automation, Advance 5S & Value Stream Mapping etc. to achieve improvement in safety, quality, productivity and cost. This has been further sustained and improved through total participation of employees at all levels and continuing upgrading the knowledge level of employees by adopting improvement tools like Kaizens,5S and Cause and Effect matrix(CEF) etc.

AWARDS AND RECOGNITION

1) Your Company has received "Silver Award" in ‘Fabrication Category'' from its principal customer Hero MotoCorp Limited during the FY 2012-13 in the recently held interactive supply chain Partners'' Meet.

2) General Motors India Limited has awarded your Company "Best Practices Recognition" for implementation of Quality System Basics (QSB) during the FY 2012-13.

3) Tata Motors Limited has rated the Company as an "A Grade" vendor for zero customer complaint for the FY 2012-13.

4) Piaggio India, a recent customer of the Company, has chosen your Company to supply auto parts for its global operations.

FINANCE

Your Company was able to raise the short-term/long term funds needed for its working capital related requirements & term loans for new capital expenditure at reasonable rates. Your Company continues to enjoy excellent credit ratings for both long and short tenure borrowings and maintains impeccable debt-servicing track record, which helps it retain excellent rapport with all of its bankers.

CORPORATE GOVERNANCE

With respect to the Listing Agreement, Management Discussion and Analysis Report is annexed and forms part of the Annual Report. A report on Corporate Governance along with the Auditors Certificate on its compliance is also annexed forming part of the Annual Report.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year and hence, no amount of principal or interest was outstanding as of the balance sheet date.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to section 205-C of the Companies Act,1956, your Company has transferred an amount of Rs.9,40,573(Rupees Nine Lacs Forty Thousand Five Hundred Seventy Three) being the amount of unclaimed dividend for the year 2004-05 to the Investor Education and Protection Fund during the current financial year .

DIRECTORS'' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, with regard to the Directors'' responsibility statement, the Board of Directors confirms that:

a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

b) The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and the profit of the Company for the year ended on that date.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Annual Accounts have been prepared on a going concern basis.

AUDIT COMMITTEE RECOMMENDATION

During the year, The Board has accepted all recommendation of Audit Committee and accordingly no disclosure is required to be made in respect of no acceptance of the recommendation of the Audit Committee by the Board.

RATINGS FOR BORROWING

Your Company has been retained at AA- (Stable) and A1 for its long term and short term borrowings (fund / non fund based limits) by rating agency ICRA. The Company has also been reaffirmed A1 for commercial paper for Rs.15 Crore.

AUDITORS

The auditors, M/s. VAKIL, JAIN & HINDOCHA, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the Auditor''s office, if reappointed.

ENVIRONMENT & SOCIAL RESPONSIBILITY

Your Company is environment-conscious and committed to making a positive contribution to the communities where it operates. The Company has been proactively pursuing measures and reaching out to the communities surrounding the areas of its operations by extending support and lending a helping hand to some very credible social institutions that are committed to address social causes.

As mentioned earlier, ISO 14001:2004 by Bureau Veritas Certification (BVC) during FY 2012-13 has been reaffirmed to the Company for 3 years. New Effluent Treatment Plant (ETP) has been installed for prevention of pollution and reduction in sludge generation. Everyday effluent water is treated in ETP and being recycled for tree plantation and gardening.

Your Company has adopted environment friendly Oxsalin process for pre-treatment in place of conventional phosphating process this will eliminate sludge generation. Since the system works at ambient temperature, energy required for heating will be saved. Also, the chemical used are free from heavy metals like Zinc & Nickel. Hence this process is a step towards eliminating the impact on environment.

Your Company is continuing to participate and foster ‘Green Vendor Development Program'' with ongoing improvements with practical and innovative approach.

MANAGEMEMNT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is enclosed as per Annexure -I and forms part of this report.

PARTICLULARS RELATING TO ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE

The particulars as prescribed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are given in the Annexure - II that forms part of this Report.

PARTICULARS OF EMPLOYEES

As required under the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, requisite particulars of employees are set out in the Annexure - III included in this report.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial throughout the year in the Company at all of its units.

HEALTH AND SAFETY

Your Company has been certified for Occupation, Health and Safety (OHSAS)18001:2007 from Bureau Veritas during FY 2012-13, which is valid for three years. Your Company is committed for safety and occupational health & compliance with applicable safety and occupational health legislation, regulations and other requirements. All incidents/ accidents are investigated and analysed to prevent reoccurrence and improve upon safety record.

ACKNOWLEDGEMENTS

The Company would like to thank all of its Stakeholders, including inter alia Suppliers, Vendors, Investors, Bankers; a special mention and appreciation to all its customers - for their consistent, abiding support throughout the year.

Your Company also records its appreciation of the contributions made by employees at all levels. Their commitment, cooperation and support are indeed the backbone of all endeavours of the Company.

The Company would like to acknowledge Government of India, Customs and Excise Departments, Income Tax Department, Industrial & Labour Departments, Government of Gujarat, Government of Haryana, Government of Uttarakhand and other government agencies for the support; the Company has been receiving over the years and is looking forward to their continued support/guidance in times to come.

For and on behalf of the Board Munjal Auto Industries Limited

Date : 14.05.2013 Sudhir Munjal

Place : Waghodia Managing Director


Mar 31, 2012

To The Members of Munjal Auto Industries Limited

The Directors have pleasure in presenting the 27th Annual Report and Audited Accounts of the Company for the year ended March 31, 2012.

FINANCIAL RESULTS

(Rs. in Lacs)

Year ended March 31, 2012 2011

Sales & Other Income 73185.63 57224.59

Profit before Finance Cost & Depreciation 6609.56 4534.67

Depreciation 1003.05 807.99

Finance Cost 778.72 448.63

Profit before Taxation 4827.79 3278.05

Provision for Taxation (Deferred & Current) 395.90 791.34

Profit after Taxation 4431.89 2486.71

Prior Period Expenditure - 3.73

Profit available for Appropriations 4431.89 2482.98

Appropriations

Proposed Dividend on Equity Shares 1000.00 750.00

Tax on Dividend 162.22 121.66

Transfer to General Reserve 443.19 248.29

Profit remaining after Appropriation/s 2826.48 1363.01

DIVIDEND

The Board of Directors of the Company is pleased to recommend a dividend of 100% i.e. Rs.2/- on equity share of Rs. 2 each for the fiscal ended 31st March, 2012. The dividend, if approved by the Members in the ensuing Annual General Meeting, would absorb Rs.1162.22 lacs (Rs.871.66 lacs previous year) out of the distributable surplus.

The Register of Members and Share Transfer Books will remain closed from September 17, 2012 to September 22, 2012 (both days inclusive).

APPROPRIATIONS

After setting aside the amount of Rs.1162.22 lacs for dividend including dividend distribution tax and after transferring an amount of Rs. 443.18 lacs (Rs.248.29 lacs previous year) to General Reserve, the balance amount of Rs.2826.48 lacs (Rs.1363.01 lacs previous year) is being retained in the Profit and Loss Account.

PERFORMANCE

The Company has achieved a record sales turnover of Rs. 728.22 Crore registering a growth of 27.63% per cent. Profit before tax is Rs.48.28 Crore and profit after tax at Rs. 44.32 Crore during the year as against Rs.32.78 Crore and 24.86 Crore respectively in the previous year. A rise of 47 per cent in PBT and 78 per cent in PAT over that of FY 11 is commendable.

CREATION OF ADDITIONAL CAPACITIES & PLANT OPERATIONS

All three units of the Company at Waghodia (Gujarat), Bawal (Haryana) and Haridwar in Uttarakhand are running well and operating at a satisfactory level of efficiency.

During the year, the Company has commissioned its own modern Central Tool Room located at Bawal unit. Also its new plant at Waghodia to make fuel tanks for TATA NANO cars is fully operational now.

DIRECTORS

Mr. Ramkisan Devidayal and Mr. Jal Ratanshaw Patel, retire by rotation in the forthcoming Annual General Meeting. Both of them, being eligible, offer themselves for reappointment.

Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting and Explanatory Statement thereto.

QUALITY:

Being an ISO / TS 16949:2009 certified company, the goals of defect prevention, continual improvement and reduction of variations/wastes in the supply chain are interwoven in the system and hence an ongoing process to achieve excellence in manufacturing by adopting a principle of lean manufacturing.

Various initiatives have been taken like launching quality circles for involvement of the grass root level employees in problem-solving and various improvements. The Company has, besides taken help of Quality Circle Forum of India, Vadodara Chapter for regular training, guidance and facilitation.

Your Company has completed more than 53,600 Kaizens [Continual Improvement by all level of employees] till date, as a part of journey seeking all round betterment of the eco-system in the company.

Customer satisfaction is being achieved by striving toward zero- defect approach with measures such as - Focus on defects prevention [through Poka-Yoke], implementation of combined improvement programs and adhering to targets/expectations and being responsive/ deadline driven in meeting with the commitments made to the customers.

For quality improvements, your Company has taken several steps such as robotic welding in manufacturing process, installing gas manifold system and setting up a new modern "Paint Shop" at Waghodia plant with all modern facilities.

The company has received a recommendation for certification of Occupational, Health and Safety Assessment Series (OHSAS) 18001:2007 from Bureau Veritis.

FINANCE

Your Company was able to raise the short-term/long term funds needed for its working capital related requirements & term loans for establishment of the new Fuel Tank plant at Waghodia and Central Tool Room at Bawal, Haryana at optimal rates despite a prevalent environ of hardened interest rates in the Indian Financial System. Excellent credit ratings for both long and short tenure borrowings enjoyed by the company were enablers. Effective use of available financial resources has helped the Company to further contain the finance costs during the year.

CORPORATE GOVERNANCE

In terms of the Listing agreement, Management Discussion and Analysis Report is annexed and forms part of the Annual Report. A report on Corporate Governance along with the Auditors Certificate on its compliance is also annexed forming part of the Annual Report.

FIXED DEPOSITS

The Company has not accepted any fixed deposits during the year and hence, no amount of principal or interest was outstanding as on Balance Sheet date.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, with regard to the Directors' responsibility statement, the Board of Directors confirms that:

a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there has been no material departure;

b) The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and the profit & loss account of the Company for the year ended on that date.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Annual Accounts have been prepared on a going concern basis.

AUDIT COMMITTEE RECOMMENDATION

During the year, there has not been any recommendation of the Audit Committee, which was not accepted by the Board. Hence, there is no need for any disclosure of the same in this report.

RATINGS

The Company has been reaffirmed by rating agency ICRA as LAA- (stable) for Rs.73.90 Cr. for its long term loan including cash credit and A1 for commercial papers of Rs.15 Cr. And A1 for short term loans for non fund/ fund based limits for Rs.16.10 Cr.

AUDITORS

The Auditors, VAKIL, JAIN & HINDOCHA, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the Auditor's office, if reappointed.

SUB DIVISION OF SHARE

Equity Shares of the Company are listed on The National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE) and are actively traded. The market price of the Equity Shares of the Company has witnessed significant increase over the last few years. In order to improve liquidity of the Company's shareholders in the stock exchanges and to facilitate participation of small investors by making the shares affordable to them, every

1 (One) existing equity share of Rs.10/- (Ten only) each was subdivided into 5 (Five only) Equity Shares of Rs.2/- (Two only) each pursuant to Section 94 (1) (d) of the Companies Act, 1956 w.e.f.31st December, 2011 resulting into paid up share capital of 5,00,00,000 Equity share of Rs.2 each .

ENVIRONMENT

The Company has received Environment Excellence Award,2012 1st prize in Medium scale category from Vadodara News Magzine(VNM) local News channel.

The company has received merit & participation award in case study on small, medium enterprise development from INSAAN (Indian Suggestion Summit Association).

The company has also received Business Excellence Award,2010 from Baroda Management Association.

Rain water harvesting systems are in place at all possible points across the complexes in all the three plants of the company as a conscious and ongoing commitment of the company for water conservation/ improvement in the water tables in the surrounding areas of its plants.

The Company is committed for reducing the impact on environments from its organizations activities as a part of social responsibilities and actively supporting the 'Green Vendor Development Program' initiated by its principal customer HMCL. This is ensured by improving operational efficiencies at all levels and in particular, by identifying six pillars of improvements as follows;

1. Water Management

2. Energy Management

3. Waste Management

4. Prevention of Pollution

5. Substitute of Hazardous Substance, and

6. Compliance of Environmental Legal Requirement. Concrete steps for improving the environment have been initiated, some of which are set out below:

1. Reduction of consumption of hazardous chemicals by doing process improvement.

2. Elimination of hazardous substances by using environment friendly materials at phosphating hence eliminated the sludge generated from the process.

3. Reduction of water consumption at various places by recirculation through cooling tower and by using treated water for toilet flushing.

4. Reduction of power consumption by engaging in process improvements and loading pattern in the paint shop.

5. New ETP is being constructed considering the future requirements of the organization and initiatives towards zero discharge. The journey is being continued by involvement of suppliers in improving the environmental sustainability.

CORPORATE SOCIAL RESPONSIBILITY

The Company is proactively pursuing measures and reaching out to the communities surrounding the areas of its operations by extending support and lending a helping hand to some very credible social institutions that are committed to address social causes.

ENERGY, TECHNOLOGY, FOREIGN EXCHANGE

The particulars as prescribed under Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 are given in the ANNEXURE - II that forms part of this report.

PARTICULARS OF EMPLOYEES

As required under the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of employees) Rules, 1975, as amended, the names and other particulars of employees are set out in the ANNEXURE - III included in this report.

INDUSTRIAL RELATIONS

Industrial relations have remained cordial throughout the year in the Company at all of its units.

HEALTH AND SAFETY

Your Company is committed for safety and health of its employees and other persons who may be affected by its operations. Your Company believes that safe working practice leads to motivated workforce and higher productivity and to that end, all possible safety measures are put in place to eliminate accidents at the factory. Even small incidents are investigated and analysed to prevent reoccurrence and improve upon safety record. Safe working culture across the Company is ensured by:

Integrating safety and health in all activities.

Ensuring compliance with all applicable legislative requirements.

Encouraging employees to ensure safety at their workplaces.

Continuous improvements in safety performance through precautions besides participation & training of employees

ACKNOWLEDGEMENTS

The Company would like to thank its Stakeholders including Suppliers, Vendors, Investors, Bankers and its Customers in particular to its principal customer Hero Motocorp Limited for their consistent, abiding support throughout the year.

Your Company also records its appreciation of the contributions made by employees at all levels. Their commitment, cooperation and support are indeed the backbone of all endeavours of the Company.

The Company would like to acknowledge Government of India, Customs and Excise Departments, Income Tax and Industrial & Labour Departments, Government of Gujarat and other government agencies for the support, the Company has been receiving over the years and is looking forward to their continued support/guidance in times to come.

For and on behalf of the Board

Munjal Auto Industries Limited

Date : 07.08.2012 Sudhir Munjal

Place : Waghodia Managing Director

 
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