Mar 31, 2022
Your Directors with immense pleasure present the 41st Annual Report of Lumax Auto Technologies Limited (âCompanyâ) on the business and operations together with Audited Financial Statements of the Company for the year ended March 31, 2022.
The Key highlights of Financial Performance of the Company for the year along with previous year figures are as follows:
I. FINANCIAL PERFORMANCE - STANDALONE & CONSOLIDATED
('' in Lakhs unless otherwise stated) |
||||
Standalone |
consolidated |
|||
For the year ended march 31, 2022 |
For the year ended march 31, 2021 |
For the year ended march 31, 2022 |
For the year ended march 31, 2021 |
|
Revenue from contracts with customers |
1,15,703.46 |
90,294.89 |
1,50,792.43 |
1,10,792.85 |
Other Income |
2,161.56 |
2,206.43 |
1,281.29 |
1,818.47 |
Total Income |
1,17,865.02 |
92,501.32 |
1,52,073.72 |
1,12,611.32 |
Total Expenses |
1,09,940.48 |
86,934.50 |
1,40,550.70 |
1,05,388.78 |
Profit before tax, share in net profit/(loss) of associates, exceptional items |
7,924.54 |
5,566.82 |
11,523.02 |
7,222.54 |
Profit/(loss) of associates |
- |
- |
(57.41) |
(9.33) |
Profit before exceptional items and tax |
7,924.54 |
5,566.82 |
11,465.61 |
7,213.21 |
Exceptional items |
175.05 |
- |
175.05 |
63.00 |
Profit before Tax |
7,749.49 |
5,566.82 |
11,290.56 |
7,150.21 |
Tax Expenses |
1,886.87 |
1,358.09 |
3,103.18 |
2,034.80 |
Profit after Tax |
5,862.62 |
4,208.73 |
8,187.38 |
5,115.41 |
Profit for the year attributable to - |
||||
a) Owners of Lumax Auto Technologies Limited |
5,862.62 |
4,208.73 |
6,940.90 |
4,712.96 |
b) Non- controlling interests |
- |
- |
1,246.48 |
402.45 |
Other comprehensive Income |
(3,607.78) |
3,854.32 |
(3,565.74) |
3,853.11 |
Other Comprehensive Income attributable to - |
||||
a) Owners of Lumax Auto Technologies Limited |
(3,60778) |
3,854.32 |
(3,575.58) |
3,858.23 |
b) Non-controlling interests |
- |
- |
9.84 |
(5.12) |
Total comprehensive Income |
2,254.84 |
8,063.05 |
4,621.64 |
8,968.52 |
Total Comprehensive Income attributable to - |
||||
a) Owners of Lumax Auto Technologies Limited |
2,254.84 |
8,063.05 |
3,365.32 |
8,571.19 |
b) Non-controlling interests |
- |
- |
1,256.32 |
397.33 |
Paid-up Equity Share capital (Face value of '' 2 each) |
1,363.15 |
1,363.15 |
1,363.15 |
1,363.15 |
Earnings Per Share (EPS) Basic & Diluted (in '') |
8.60 |
6.17 |
10.18 |
6.91 |
After a tough financial year 2020-21, the current financial year started with lots of hope and enthusiasm for recovery across the industry. However, the second wave of covid hit the industry due to which the growth as envisaged did not materialize. Despite fresh covid waves, the industry showed some resilience and after every wave of covid, the industry saw a pent up demand. However, this resilience was partly over shadowed by supply constraints for semi conductor and increase in commodity prices. Despite all these constraints, the Company has acheived a historic high in revenue and profits for the year.
On standalone basis, the revenue from operations during the Financial year 2021-22 stood at '' 1,15,703.46 Lakhs as compared to '' 90,294.89 Lakhs in the last year registering a growth of 28%. For the Financial Year 2021-22, the profit before tax and exceptional items stood at '' 7,924.54 Lakhs as compared to '' 5,566.82 Lakhs in the last year witnessing a significant increase of 42%. The PBT after exceptional items stood at '' 7,749.49 Lakhs as compared to '' 5,566.82 Lakhs in the last year registering an increase of 39%. The Profit after Tax (PAT) stood at '' 5,862.62 Lakhs as compared to '' 4,208.73 Lakhs registering a significant increase of 39%. The Basic and Diluted Earnings per share stood at '' 8.60 registering a significant increase of 39%.
For the Financial Year 2021-22 on consolidated basis, the Company achieved revenue of '' 1,50,792.43 Lakhs as compared to '' 1,10,792.85 Lakhs registering a growth of 36%. The profit before tax, exceptional items and share in net profit of Joint Ventures stood at '' 11,523.02 Lakhs as compared to '' 7,222.54 Lakhs in the previous year witnessing a significant increase of 60%. The PBT after exceptional items and share in net profit of Subsidiaries and Associates stood at '' 11,290.56 Lakhs as compared to '' 7,150.21 Lakhs in the last year registering an increase of 58%. The Profit after Tax (PAT) stood at '' 8,187.38 Lakhs as compared to '' 5,115.41 Lakhs registering a significant increase of 60%. The Basic and Diluted Earnings per share stood at '' 10.18 registering a significant increase of 47%.
The paid-up Equity Share Capital as on March 31, 2022 was '' 13,63,15,410 divided into 6,81,57,705 equity shares of '' 2/- each. During the year under review, the Company has not issued shares or granted stock options or sweat equity.
The Board of Directors (herein referred to as âthe Boardâ) have recommended a dividend of '' 3.50/-(i.e. 175%) per equity share of face value of '' 2/-each for the FY 2021-22 subject to the approval of the shareholders at the ensuing Annual General Meeting (âAGMâ).
The proposed Dividend for FY 2021-22, would result in appropriation of '' 2,385.52 Lakhs as against '' 2,044.73 Lakhs in last FY 2020-21. The Dividend payout ratio works out to 40.69%.
The dividend, if declared, will be subject to tax deduction at source at the applicable rates. For details, shareholders are requested to refer to the Notice of AGM.
The Register of Members and Share Transfer Books shall remain closed from Tuesday, the July 12, 2022 to Friday, the July 22, 2022 (both days inclusive). The Dividend as recommended by the Board, if approved by the shareholders at the ensuing AGM shall be paid to the eligible shareholders, whose names appear in the Register of Members as on Monday, the July 11, 2022 within the stipulated time period.
As per the amendment dated May 05, 2021 in the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter reffered to as âListing Regulationsâ) (as amended from time to time), the Top 1000 Listed Companies based on Market Capitalization, has to mandatorily formulate a Dividend Distribution Policy.
Accordingly, the Board of Directors in their meeting held on August 11, 2021 had approved and adopted the Dividend Distribution Policy of the Company, which can be accessed on the website of the Company at https://www. lumaxworld.in/lumaxautotech/downloads/ dividend-distribution-policy.pdf
AMOUNT TRANSFER TO RESERVES
The Board of the Company do not propose to transfer any amount to reserves other than transfer of undistributed profits to surplus in statement of Profit & Loss.
B. SUBSIDIARIES AND ASSOCIATE COMPANIES & CONSOLIDATED FINANCIAL STATEMENTS
As per Regulation 33 of the Listing Regulations, applicable provisions of the Companies Act, 2013 (herein referred to as âthe Actâ) and Ind AS 110, the Audited Consolidated Financial Statements are provided in the Annual Report of the Company.
As on March 31, 2022, the Company has Eleven (11) Subsidiaries (including One (1) step down subsidiary). The performance highlights of these Companies are follows:
a) Lumax Mannoh Allied Technologies Limited (LMAT)
LMAT, a 55% subsidiary, formed in
collaboration with Mannoh Industrial Co., Limited, Japan. The entity manufactures gear shifters and enjoys a market leadership position in India. The Revenue of LMAT stood at '' 20,127.64 Lakhs for the FY 2021-22.
b) Lumax cornaglia Auto Technologies Private Limited (LCAT)
LCAT, a 50% subsidiary, formed in
collaboration with Cornaglia S.p.A. Italy. The entity manufactures air intake systems, urea tank & injection blow moulded parts. The revenue of LCAT stood at '' 9,938.93 Lakhs for the FY 2021-22.
c) Lumax Metallics Private Limited (LMPL) (formerly: Lumax Gill Austem Auto Technologies Private Limited)
LMPL is a wholly owned subsidiary of the Company. The revenue of LMPL stood at '' 3,934.26 Lakhs for the FY 2021-22.
The Board of Directors of the Company have in their meeting held on February 09, 2022 decided to amalgamate LMPL with the Company. Accordingly, a Scheme of Amalgamation has been filed with the National Company Law Tribunal on May 03, 2022.
d) Lumax FAE Technologies Private Limited (LFAE)
LFAE, a subsidiary, formed in collaboration with FAE, Spain. LFAE manufactures Oxygen
Sensors. The revenue of LFAE stood at '' 248.26 Lakhs for the FY 2021-22.
e) Lumax Jopp Allied Technologies Private Limited (LJAT)
LJAT, a 50% subsidiary formed in collaboration with Jopp Holding Gmbh, Germany. LJAT manufactures Gear Shift Towers, AMT Kits & AGS. The revenue of LJAT stood at '' 408.73 Lakhs for the FY 2021-22.
f) Lumax Yokowo Technologies Private Limited (LYTL)
LYTL is a 50% subsidiary formed in collaboration with Yokowo Co., Ltd., Japan to manufacture Antennas & other Vehicle Communication Products. LYTL is likely to start its commercial production during the FY 2022-23.
g) Lumax Ituran Telematics Private Limited (LITPL)
During the period under review, LITPL became a Subsidiary Company of the Company w.e.f. January 01, 2022. Earlier, it was a Joint Venture between the Company and Ituran Location and Control Limited, Israel for the sale of telematic products and services. The revenue of LITPL stood at '' 179.34 Lakhs for the FY 2021-22.
h) Lumax Alps Apline India Private Limited (LAIPL)
LAIPL is a 50% subsidiary formed in collaboration with Alps Alpine Co. Ltd., Japan during FY 2021-22. LAIPL is engaged in the business of manufacturing of electric devices and components for automotive use. The entity has started its manufacturing operations with effect from December 01, 2021. LAIPL has achieved a turnover of '' 954.12 Lakhs for the financial year 2021-22.
i) Lumax Management Services Private Limited (LMS)
LMS, a wholly owned subsidiary of the Company, is a full-time Corporate service provider to its Group Companies. The Revenue of LMS stood at '' 2,959.23 Lakhs for the FY 2021-22.
j) Lumax Integrated Ventures Private Limited (LIVE)
LIVE, a wholly owned subsidiary of the
Company, was established for manufacturing of Non-Automotive Parts. LIVE has one (1) subsidiary i.e. Lumax Energy Solutions Private Limited which is under the process of Voluntary Liquidation. Velomax Mobility Private Limited, the other subsidiary of LIVE has been voluntarily striked off during FY 2021-22. SIPAL Enginerring Private Limited, an Associate of LIVE, is under the process of Voluntary Liquidation. The Consolidated turnover of the LIVE stood at '' NIL for the FY 2021-22.
STATEMENT CONTAINING HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE
In accordance with the provisions of Section 129(3) of the Act read with Rule 8(1) of the Companies (Accounts) Rules, 2014 a report on performance and financial position of Subsidiaries, Joint Venture, Associate Companies forms part of this Annual Report in the prescribed Form AOC-1 as a part of Financial Statements.
Further, in accordance with the provisions of Section 136(1) of the Act, the Audited Financial Statements, including the Consolidated Financial Statements and related information and audited accounts of subsidiaries and associates are available on the website of the Company i.e. https://www.lumaxworld.in/lumaxautotech and the same shall also be made available for inspection at Registered Office of the Company during the working hours.
II. STATE OF cOMPANYâS AFFAIRS
With the improved situation of COVID and consequent opening of the economy, FY 2021-22 was expected to be a better year after a tough year 2020-21, however due to fresh waves of COVID coupled with supply chain constraints and increase in commodity prices, the industry performance remained subdued.
According to Society of Indian Automobile Manufacturers (SIAM) report, the industry produced a total 229.33 lakh vehicles including Passenger Vehicles, Commercial Vehicles, Three wheelers, Two wheelers and Quadricycle during FY 2021-22 as against 226.55 lakh vehicles produced during last FY 2020-21 showing a growth of 1.23%. The automotive sector saw both ups and down during this period, witnessing the longest sustained downfall in automotive industry. During this turbulent and unprecedented time, the Company with its strong order book and products in development,
remained the market leader and a preferred supplier for all the Original Equipment Manufacturers (OEMs) in India.
It has been a pretty successful year for the Company, with addition of new customers in the portfolio coupled with the new businesses from existing customers to improve top line.
To succeed in the digital era, where technologies are changing the ground rules in every industry, the Company undertook several new initiatives for enhancement of its existing Information Technology (IT) systems to meet the regulatory and other organizational requirements. The Companyâs focus was on automation.
Top Management is very keen on Digital Transformation of the Company in the real sense and formed committee of 10 key employees from all the departments. This committee conducted various meetings with the key stakeholders and prepared detailed roadmap. This detailed roadmap has been made keeping in mind the vision of the Company, adoption of latest technologies, automation of processes & data security. The Company has defined four stages for digital health assessment i.e. nascent, emerging, robust & Leading across all the elements of the process value chain. Companyâs roadmap for digital transformation is having following key objectives:
⢠Digitalizing all the manual processes
⢠Standard Manufacturing Cockpit at plant level AI/ ML based alert system
⢠Dashboard for the Top Management at Corporate Level
⢠Robust Data security & surveillance system to protect data as well as cyber attacks.
Team is working on the above objectives and achieved good results in the digitalization of the process, Supply Chain & Security. In the next year, the Companyâs target is to maximize the impact of Digitalization. Company will witness improvement in Marketing, Human Resource practices, Manufacturing Operations and enhance Design capabilities.
In its endeavour to stay connected with the retail partners, despite the physical distancing and travel restrictions, the Lumax after market launched âLumax Retail Worldâ an android app for the trade. The retailers, post registration, can access the complete range of Lumax after market catalogue and also place orders online with their respective distributors. Information and notifications on New products are shared real-time and details of the latest offers/schemes etc. can also be explored by the retailers.
The Company continues to uphold the highest standards of Corporate Governance, treating its various stakeholders as an ethical requisite rather than a regulatory necessity and continue to base all its actions on the principles of fairness, trust and transparency, standing by its core values of Respect, Integrity, Passion and Excellence.
All in all, the Company made good progress in all areas in FY 2021-22, and the management is quite confident that going forward the Company will continue to deliver value to all its customers and stakeholders. The long term outlook for the Company remains positive and it is poised to outperform the industry.
A. CAPACITY & FACILITY EXPANSION
During FY 2021-22, the Company has upgraded its manufacturing facilities at Chakan, Bangalore and Manesar as per customer requirement to cater new product lines and meet their increased volumes.
The Company strives to be a supplier of choice across all its customers and is always committed to develop and design new products, in line with its strategy towards delivering competitive advantage to the customers. In the said perspective, Total Productive Maintenance (TPM) has been successfully implemented across all plants of the Company to create a culture and environment which continuously improves quality, cost and delivery parameters.
In addition, various plants of the Company have received awards for Quality initiatives i.e. Kaizen Award from Bajaj, NCQC Excellence Award, ACMA Award in HSS, Qualified for BAL Platinum Award, Quality Control Circle (QCC) is an integral part for ensuring quality across all processes. By implementing these various initiatives, improvement of Quality is willingly carried out by employees in true spirit, resulting in minimizing rejection and cost.
C. MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Regulation 34 read with Schedule V of the Listing Regulations, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - A and provides details on overall Industry Structure and Developments, financial and operational performance and other material developments during Financial Year under review.
d. change in the nature of business, if any
During the Financial Year ended March 31, 2022, there was no change in the nature of business of the Company.
III. GOVERNANCE AND ETHICSA. CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditorâs Certificate on Compliance of conditions of Corporate Governance as stipulated in Regulation 34 read with Schedule V of the Listing Regulations is annexed and forms part of this Report as Annexure - B.
B. DIRECTORS & KEY Managerial Personnel INCLuDING THOSE WHO WERE APPOINTED OR HAVE RESIGNED DuRING THE YEAR
The Composition of Board of Directors is in conformity with the applicable provisions of Act and Listing Regulations.
During the year under review, none of the Directors and Key Managerial Personnel has been appointed or resigned from the Company. However, Mrs Diviya Chanana, the Independent Director of the Company has resigned from the Board of the Company with effect from May 10, 2022 due to the reason for not being able to comply with the provisions of Section 149 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
As on March 31, 2022, Mr D.K. Jain, Executive Chairman, Mr Anmol Jain, Managing Director, Mr Vikas Marwah, Chief Executive Officer, Mr Ashish Dubey, Chief Financial Officer and Mr Anil Tyagi, Company Secretary are Key Managerial Personnel (KMPs) of the Company as per the provisions of the Act.
Mr. Anil Tyagi Company Secretary of the Company has submitted his resignation from the position of Company Secretary and Compliance Officer with effect from May 12, 2022 and the Board of Directors in their meeting held on May 12, 2022 approved the appointment of Mr. Raajesh Kumar Gupta as Company Secretary and Compliance officer of the Company with effect from May 13, 2022.
RETIREMENT BY ROTATION AND SUBSEQUENT RE-APPOINTMENT
In accordance with the Articles of Association of the Company and Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force) Mr Deepak Jain, Director (DIN:00004972) is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
A brief profile of Mr Deepak Jain is provided in the Notice of the ensuing AGM of the Company.
As on March 31, 2022, the Board has 5 (Five) Independent Directors including one Woman Independent Director, representing diversified fields and expertise.
Details are provided in the relevant section of the Corporate Governance Report.
D. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
In pursuance to SEBI (Listing obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021, the Definition and Criteria of Independence of the Independent Directors has been amended as per Regulation 16 (1)(b) for all the Listed Companies and the same has come into effect from January 01, 2022. Accordingly the requisite declarations, as per the Regulation 16 (1) (b) and Regulation 25 read with the provisions of Section 149 (6) of the Act, have been received from the Independent Directors regarding meeting the criteria of Independence as laid down under those provisions. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.
The Board took on record the declaration and confirmation submitted by the independent directors regarding their meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the Listing Regulations.
Mrs Diviya Chanana, the Independent Director of the Company has resigned from the Board of the Company with effect from May 10, 2022 due to the reason for not being able to comply with the provisions of Section 149 of Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
The Board place on record its sincere appreciation for the contribution made and service rendered by Mrs Diviya Chanana during here tenure as an Independent Director of the Company.
e. number of board meetings and
During the FY 2021-22, the Board of Directors met Five (5) times viz. May 04, 2021, June 12, 2021, August 11, 2021, November 11, 2021 and February 09, 2022. Further, It is confirmed that the gap between two consecutive meetings was not more than one hundred and twenty days as provided in Section 173 of the Act.
Pursuant to the requirements of Para VII (1) of Schedule IV of the Act and the Listing Regulations, a separate Meeting of Independent Directors was also held on February 25, 2022, without the presence of Non-Independent Directors and Members of the management to review the performance of Non-Independent Directors and the Board as a whole, the performance of the Chairperson of the Company, taking into account the views of Executive Directors, Non-Executive, Non-Independent Directors and also to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board. The details on Attendance during the Board Meetings and other Committee Meetings of Board of Directors are provided in Corporate Governance Report which forms part of the Boardsâ Report.
BOARD DIVERSITYAND POLIcY ON DIRECTOR''S APPOINTMENT AND REMuNERATION
Pursuant to the provisions of Section 178(1) of the Act and Regulation 19(4) read with Part D of Schedule II of Listing Regulations, the Company has in place the Nomination and Remuneration Policy of Directors, Key Managerial Personnel (KMP) and Other Employees including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided u/s 178(3) of the Act.
The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to leverage different skills qualifications and professional experiences perspectives and backgrounds
which is necessary for achieving sustainable and balanced development. The Board has adopted a policy on Nomination, Remuneration and Board Diversity which sets out the criteria for determining qualifications, positive attributes and independence of a director.
The main features of the Policy are as follows:
⢠It acts as a guideline for matters relating to appointment and re-appointment of directors;
⢠It contains guidelines for determining qualifications, positive attributes of Directors, and independence of a Director;
⢠It lays down the criteria for Board Membership;
⢠It sets out the approach of the Company on Board Diversity; and
⢠It lays down the criteria for determining independence of a Director, in case of appointment of an Independent Director.
During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments made to applicable laws and the same is available on the website of the Company at: https://www.lumaxworld. in/lumaxautotech/downloads/nomination-and-remuenration-policy-of-directors.pdf
F. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS
In accordance with applicable provisions of the Act and Listing Regulations, the evaluation of the Board as a whole, committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Nomination and Remuneration Committee. The evaluation tested key areas of the Boardâs work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directorsâ functioning.
⢠The evaluation methodology involves completion of questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.
⢠The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings a nd proced ures, Board development, Board
⢠The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations etc.
⢠The performance of Non-Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, knowledge and skill, personal attributes, independence from the management etc.
⢠It also involves self-assessment by all the
Directors and evaluation of Committees
of Board based on knowledge, diligence and participation, leadership team and
management relations, committee meetings and procedures respectively.
⢠Further, the assessment of Chairmanâs
performance is done by each Board Member on similar qualitative parameters.
evaluation outcome
The feedback of the evaluation exercise and inputs of Directors were collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is placed.
The Board as a whole together with each of its committees were working effectively in performance of its key functions- Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when the need arises. Comprehensive agendas are sent to all the Board Members well in advance to help them prepare and ensure the meetings are productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering all Business verticals, by way of presenting specific performance of each Plant, Product Category and Corporate Function from time to time.
The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day-to-day management of the business, with reference to the strategy and long term objectives.
The Executive Directors and Non-Executive Directors provided entrepreneurial leadership to the Company within a framework of prudent and effective controls, with a balanced focus on policy formulation and development of operational procedures. It was acknowledged that the management accorded sufficient insight to the Board in keeping it up-to-date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.
G. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts/arrangements/transactions entered by the Company with related parties were in ordinary course of business and at armâs length basis. All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on yearly basis for obtaining prior omnibus approval of the Committee.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated by the Company. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of the Act and Listing Regulations.
The details of the related party transactions as per Ind AS 24 are set out in Notes to the Financial Statements of the Company. Policy on Related Party Transaction formulated by the Company are available on the website of the Company at https:// www.lumaxworld.in/lumaxautotech/relatedparty-transaction-policy.pdf
During the period, there were no materially significant related party transactions entered into, by the Company with Promoters, Directors or Key Managerial Personnel, which may have a potential conflict of interest for the Company at large. Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, form AOC-2, containing the details of Related Party Transaction is set out as Annexure - C to this report.
Further, the Shareholderâs approval on Material Related Party Transactions have been taken by way of Postal Ballot Notice dated November 11, 2021 and the results of which was declared by the Company on December 29, 2021.
The Company has a robust and effective framework for monitoring compliances with applicable laws. The Company has installed a Software namely AVACOM for Compliance Management and through this Software the Company is able to get the structured control over applicable compliances by each of the units of the Company.
A separate Corporate Compliance Management Team periodically reviews and monitors compliances by units and supports in effective implementation of same in a time bound manner. The Board and Audit Committee alongwith Compliance team periodically monitors status of compliances with applicable laws based on quarterly certification provided by Senior Management.
I. VIGIL MEcHANISM/WHISTLE BLOWER POLicY
The Company has established a vigil mechanism and formulated Whistle Blower Policy, for Directors, employees and business associates to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics, in accordance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations. Audit committee oversee the implementation of vigil mechanism and provides adequate safeguards against unfair treatment to the whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/ exceptional cases.
The Whistle Blower Policy is available on the website of the Company www.lumaxworld. in/lumaxautotech. To further strengthen this mechanism, the Company has launched an Employee App which is available for both android and iOS users to report any instances of financial irregularities, breach of Code of Conduct, abuse of authority, unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of Company records, discrimination among employees, anonymously to provide protection to the employees who report such unethical practices and irregularities.
Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.
During the year under review, no incidence under above mechanism was reported.
The Board state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly complied by the Company.
K. DIRECTORS RESPONSIBILITY STATEMENT
In terms of section 134 (3) (c) & 134 (5) of the Act and to the best of their knowledge and belief, and based on the information and explanations provided, your Directors hereby make the following statements:
(i) that in the preparation of the Annual Accounts for the Financial Year ended March 31, 2022, the applicable Accounting Standards have been followed along with proper explanation relating to material departures in the Auditor Report and Notes to Accounts;
(ii) that the Directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the Annual Accounts on a âgoing concernâ basis;
(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
L. PARTICULARS OF REMUNERATION OF DIRECTORS AND OTHER EMPLOYEES
Information on Employees as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this Report as an Annexure - D.
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules which form part of the Directorsâ Report, will be made available to any shareholder on request, as per provisions of Section 136(1) of the Act.
m. audit committee & composition
The composition of the Audit Committee is in alignment with provisions of Section 177 of the Act read with the Rules framed thereunder and Regulation 18 of the Listing Regulations. The members of the Audit Committee are financially literate and having experience of Financial Management.
The Audit Committee comprises of Mr Arun Kumar Malhotra as Chairman, Mr Roop Salotra, Mr Milap Jain, Mr Avinash Parkash Gandhi and Mr Anmol Jain as Members.
The Company Secretary acts as Secretary to the Audit Committee.
The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters.
I t also supervises the Companyâs in ternal con trol process, financial reporting and vigil mechanism.
All the recommendations made by the Audit Committee were accepted by the Board of the Company.
Further, Brief terms of reference and Meeting held of the Audit Committee along with attendance of members are provided in Corporate Governance Report forming part of this Report.
IV. INTERNAL FINANCIAL CONTROLS AND ADEQuACY
A. Adequacy of Internal Financial Control with Reference to Internal Financial Statement
The Company has a robust and well embedded system of internal controls in place to ensure reliability of financial reporting, orderly and efficient conduct of business, compliance with policies, procedures, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are put in place to ensure that such control systems are adequate and operate effectively.
Periodical programs of Internal Audits are planned and conducted which are also aligned with business objectives of the Company. The meetings with Internal Auditors are conducted wherein the status of audits and management reviews are informed to the Board.
The Company periodically conducts physical verification of its inventory, fixed assets and Cash on hands and matches it with the books of accounts. Explanations are sought for any variance noticed from the respective functional heads.
The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015.
The Company gets its Standalone and Consolidated Financial Results reviewed/Audited every quarter by its Statutory Auditors.
The Company uses an established ERP âSAP HANAâ Systems to record day to day transactions for accounting and financial reporting. The SAP system is configured to ensure that all transactions are integrated seamlessly with the underline books of accounts, which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures.
Earlier the Risk Management Policy was not applicable to the Company as per the Listing Regulations but as a Good Corporate Governance Practice, the Enterprise Risk Management Policy was formulated.
During FY 2021-22, as per amended Regulation 21 of the Listing Regulations which came into effect from May 05, 2021, it became mandatory for the Top 1000 Listed entities to constitute the Risk Management Committee with majority of the members of Committee to be amongst the directors and senior executives of the Company with at least one independent director and Chairperson to be a member of Board.
Accordingly, the Board of Directors in their meeting held on August 11, 2021, constituted the Risk Management Committee and adopted the Risk Management Policy. The Risk Management Committee is responsible to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for development and implementation of a Risk management Policy
for the Company including identification therein elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company and is responsible for reviewing the risk management plan and its effectiveness. The Company has Risk Management Policy which can be accessed on Companyâs website https://www.lumaxworld.in/lumaxautotech.
C. CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT Trading BY Designated Persons (CODE OF CONDuCT)
In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018, the Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons. This Code of Conduct is intended to prevent misuse of Unpublished Price Sensitive Information (âUPSIâ) by designated persons and their immediate relatives. The said Code lays down guidelines, which advise Designated Persons on the procedures to be followed and disclosures to be made while dealing with the shares of the Company and cautions them on consequences of non-compliances. The Company has also updated its Code of practices and procedures of fair disclosures of unpublished price sensitive information by including a policy for determination of legitimate purposes. Further, the Company has put in place adequate & effective system of internal controls and standard processes to ensure compliance with the requirements given under these regulations to prevent insider trading.
CODE OF CONDuCT FOR DIRECTORS AND SENIOR Management OF THE Company
The Company has adopted the Code of Conduct for Directors and Senior Management of the Company. The same is available on the website of the Company https://www.lumaxworld.in/lumaxautotech/ downloads/code-of-conduct.pdf.
statutory auditors
The shareholders have approved the reappointment of M/s S.R. Batliboi & Co. LLP (Firm Registration No. 301003E/E300005), Chartered Accountants as Statutory Auditors of the Company in the 38th Annual General Meeting held on August 23, 2019 to hold office till the conclusion of the 43rd Annual General Meeting of the Company to be held in the year 2024.
M/s S.R. Batliboi & Co. LLP, Chartered Accountants have furnished a certificate confirming that they are not disqualified from continuing as Auditors of the Company.
The Report given by the Statutory Auditors on the Financial Statements of the Company forms part of this Annual Report. The Auditor Report does not contain any qualification, reservation, adverse remark or disclaimer.
In terms of Section 148 (1) of the Act, the Company is required to maintain cost records for certain products as specified by the Central Government and accordingly such accounts and records are prepared and maintained in the prescribed manner. The Board on recommendation of Audit Committee has re-appointed M/s Jitender, Navneet & Co., (Firm Registration No. 000119) as the Cost Auditors of the Company in Board Meeting dated May 12, 2022 for the audit of the cost accounts of the Company for the FY 2022-23.
The remuneration proposed to be paid to the Cost Auditor requires ratification by the shareholders of the Company. In view of this, your approval for payment of remuneration to Cost Auditors is being sought at the ensuing AGM. Accordingly, a resolution, seeking approval by members for the ratification of the remuneration to be paid to Cost Auditors amounting to '' 2.00 Lakhs (Rupees Two Lakhs) excluding taxes and out of pocket expenses, if any, payable to M/s Jitender Navneet & Co., is included in the Notice convening 41st AGM of the Company. The Cost Audit Report for the FY 2020-21 has been filed with the Central Government within the stipulated time.
The Cost Audit Report for the FY 2020-21 has been filed with the Central Government within the stipulated time.
DISCLOSURE ON MAINTENANCE OF COST RECORDS AS SPECIFIED BY Central Government uNDER SuB SECTION (1) OF SECTION 148
The Company is maintaining cost records as stipulated under applicable laws.
Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Maneesh Gupta (Membership No. F-4982), Practicing Company Secretary as the Secretarial Auditor in Board Meeting held on May 12, 2022 to undertake the Secretarial Audit for FY 2022-23. The Company has received consent from Mr. Maneesh Gupta to act as Secretarial Auditor for conducting audit of the secretarial records for the Financial Year ending March 31, 2023.
annual SECRETARIAL AuDIT REPORT & ANNuAL SECRETARIAL COMPLIANCE REPORT
The Secretarial Audit Report of the Company and Lumax Mannoh Allied Technologies Limited (Material Subsidiary of the Company) for the FY 2021-22 forms part of this Annual Report as an Annexure - E. There are no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditors in their Reports.
Pursuant to Regulation 24A(2) of Listing Regulations, all listed entities on annual basis are required to get a check done by Practising Company Secretary (PCS) on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and get an Annual Secretarial Compliance Report issued by a PCS and such Report required to be submitted to the Stock Exchanges within 60 days of the end of the Financial Year.
The Company has engaged Mr. Maneesh Gupta (M. No. F-4982), PCS and Secretarial Auditor of the Company for providing Annual Secretarial Compliance Report.
In compliance with the provisions of Section 138 of the Act, read with the Companies (Accounts) Rules, 2014, the Internal Audit, of various units of Company, for the FY 2021-22 was done by M/s Deloitte Touche Tohmatsu India LLP. Further, the Board of Directors in their meeting held on May 12, 2022 has appointed M/s Grant Thornton Bharat LLP as Internal Auditors for FY 2022-23.
E. DETAILS IN RESPECT OF FRAuDS REPORTED BY auditors under SuB-SECTION (12) OF SECTION 143 OF THE ACT OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year under review, no fraud was reported by Statutory Auditor and Secretarial Auditor against the Company which would need to be mentioned in this Boardâs Report.
V. BUSINESS RESPONSIBILITY REPORT
A detailed Business Responsibility Report in terms of the provisions of Regulation 34 of the Listing Regulations is available as a separate section in the Annual Report.
VI. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
The Company is committed to grow and operate in a socially sustainable manner and continue to give back to society. A well-outlined CSR program creates social and environmental value thus impacting and improving the lives of communities. The key focus areas of the Company have been Education and Healthcare for disadvantaged sections of the society. The Companyâs focus areas are largely covered under Schedule VII of the Act. During the year, the Company continued its support to the existing schools by way of support on career counselling, integrating students in schools provid ing books an d learning aid s, meals enhancing holistic education opportunities. Under its healthcare initiatives, the Company is focusing on preventive healthcare by continuously organizing health check-up camps, lending financial support to hospitals for juvenile diabetes, cataract operations.
The Companyâs CSR initiatives are implemented primarily through its CSR arm/trust, Lumax Charitable Foundation (âFoundationâ), with focus on education, empowerment of girl child through education and the healthcare, for disadvantaged Section of society.
The Company has constituted CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of Act. The Committee monitors and oversees various CSR initiatives and activities of the Company.
Lumax provides holistic education opportunities and preventive and curative health interventions, committed to the India Sustainable Goals of Quality Education and Good Health. These interventions and programs are managed by the Lumax Charitable Foundation team along with implementation partners.
In its endeavor to provide holistic and quality education, the interventions include, girl child enrolment in schools, starter kits and learnings aids. It is to provide and enable underprivileged students to enhance their learning experience through out of school learning activities like excursion trips, end-to-end career counselling, life-skills & soft-skills training on a continuous basis. The programs
help to facilitate various govt. & private scholarships to deserving need-based and merit-based students to pursue with their education.
Infrastructure needs of the govt. schools including the construction of toilets, classroom, providing LED lights are also undertaken after a thorough need assessment. The programs are preferably conducted in areas around the Companyâs plants.
Under health, the Foundation has been supporting communities near the plants with preventive cancer awareness and screening camps and also provide eye care camps for eye-check up and conducting cataract surgeries. The cancer screening includes blood profiling along with physical examination by a surgeon, ENT specialist and a gynecologist, complete with radiology examination. The Company had also donated the oxygen concentrators to help the Covid Patients.
The CSR Committee of the Board comprises of Mr Roop Salotra as Chairman, Mr D.K. Jain and Mr Deepak Jain as Members of the Committee. Further, the Board have also adopted the CSR Policy of the Company as approved by the Corporate Social Responsibility Committee which is also available on the website of the Company at https://www.lumaxworld.in/lumaxautotech/downloads/ CSR-policy-latl.pdf.
Brief terms of reference and Meetings held of the Corporate Social Responsibility Committee along with attendance of members are provided in Corporate Governance Report forming part of this Report.
The contents of the said policy are as below:
1. CSR Philosophy
2. Constitution of CSR Committee
3. Role of CSR Committee
4. Implementation of CSR Projects, Programs and Activities
5. Allocation of Budget
6. Lumax domains of engagement in accordance with Schedule VII
7. Monitoring and Review Mechanism
8. Management Commitment
In terms of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, Annual Report on CSR in prescribed format is attached as Annexure- F to this Report.
VII. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER SECTION 134 OF THE ACT
Names of companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate companies during the Year.
During the period under review, following companies became or ceased to be Subsidiaries, Joint Venture, and Associate Company of the Company:
1. Lumax Ituran Telematics Private Limited
(LITPL), LITPL became a Subsidiary Company of the Company w.e.f. January 01, 2022 due to amendment in Joint Venture Agreement entered between Company and Ituran Location and Control Limited, Israel,
2. Lumax Alps Alpine India Private limited (LAIPL),
LAIPL is a Subsidiary of the Company which came into existence as result of Joint venture Agreement entered into between Company and Alps Alpine Co, Limited, Japan.
3. Velomax Mobility Private limited (VMPL) VMPL was a step-down subsidiary of the Company (Subsidiary of LIVE) which was Voluntarily striked off during the period under review.
Further, Sipal Engineering Private Limited (SEPL), an Associate Company of LIVE and Lumax Energy Solutions Private Limited, a Subsidiary of LIVE are under the process of Voluntary Liquidation.
a. annual return
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return for the Financial Year ended March 31, 2022 is available on the Companyâs website at https://www.lumaxworld.in/ lumaxautotech/annual-return.html.
B. INVESTOR EDucATION AND PROTECTION fund (IEPF)Transfer of unpaid Dividend
Pursuant to the provisions of Section 124(5) of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven (7) years from the date of transfer to Unclaimed/Unpaid Dividend. Consequently, the Company has transferred '' 1,54,302/- during the year to the IEPF, lying with it for a period of seven years pertaining to FY 2013-14.
Transfer of Shares underlying unpaid Dividend
Pursuant to the provisions of Section 124(6) of the Act read with the the Rules, the shares in respect of which Dividend has not been paid or claimed by the Shareholders for seven (7) consecutive years or more are also required to be transferred to the Demat account of IEPF Authority. During the year, the Company had transferred 2,631 shares to the Demat Account of the IEPF Authority on September 21, 2021 as per the requirement of the Rules.
It may be noted that the due date for transfer into IEPF of the Unpaid/Unclaimed Dividend lying in the Unpaid Dividend Account of the Company for the FY 2014-15 is September 27, 2022. Further, all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall also be transferred to IEPF i.e. in case any dividend is claimed for any year during the said period of seven consecutive years, the shares shall not be transferred to IEPF.
Accordingly, concerned Shareholders are requested to kindly claim the Unpaid/unclaimed Dividend along with the underlying Shares. Further, pursuant to the provisions of Section 124 of the Act read with the Rules, a notice will be sent to the Shareholders individually and also be published in Newspaper, inviting the attention of the Shareholders to claim their Dividends along with the underlying Equity Shares.
c. fixed deposits
During the year under review, the Company has neither accepted nor renewed any Deposit under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.
d. particulars of loans, guarantees and
The particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Act are given in the Notes to Financial Statements.
e. material changes and commitments
No material changes and commitments, affecting the financial position of the Company have occurred after the end of the financial year ended March 31, 2022 and till the date of this report.
F. INFORMATION ON cONSERVATION OF
energy, technology ABSORPTION, foreign exchange earnings and outgo
One of the several commitments that continued to
remain in force throughout the Financial Year was developing business along with improvement in environmental performance to maintain a reliable and sustainable future.
During the course of the year, the manufacturing units of the Company have continued their efforts to reduce energy consumption in all areas of its operations. These manufacturing units are constantly encouraged to improve operational activities and maximizing prod uction volumes and minimizing consumption of natural resources. Systems and processes have been put in place for utilization of alternate sources of energy and monitoring of energy consumption for all the units. Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as Annexure - G to this Report.
G. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGuLATORS OR cOuRTS
There were no significant and material orders passed by the Regulators/Courts/Tribunals, which would impact the going concern status of the Company and its future operations.
h. constitution of internal complaints committee (icc) under the sexual
HARASSMENT OF WOMEN AT WORKPLAcE (PREVENTION, PROHIBITION AND REDRESSAL) Act, 2013 (POSH)
As per Section 134(3) read with Rule 8 of Companies (Accounts) Rules, 2014 a âStatement to the effect that the Company has duly complied with the provisions related to Constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH)â has to be included in the Boardâs Report.
In accordance with the above-mentioned provisions of POSH, Company is in compliance with and has adopted the âPolicy on Prevention of Sexual Harassment of Women at Workplaceâ. The constitution of ICC is as per the provisions of POSH and includes external Members from NGO or those individuals having relevant experience.
In accordance with the provisions of POSH, the Company has adopted the âPrevention of Sexual Harassment at Workplace Policyâ and constituted an ICC for Prohibition, Prevention and Redressal of
Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the related aspects.
The Committee meets as and when required, however minimum one meeting is ensured during the Financial Year to discuss strengthening safety of employees at workplace and also to resolve/ address related issues, if any reported during the year.
Further, detail on status of complaints filed, disposed off and pending with regard to POSH is incorporated in Corporate Governance Report forming part of the Report
During the year under review, 34 Meetings of ICC across all plant locations were held. Further, as per the applicable provisions of POSH, the Company continues to submit Annual Report to the District Officer consisting of details as stipulated under the said Act.
I. ENVIRONMENT, HEALTH & SAFETY
The Company continues to identify and manage risk to ensure the health & safety of the employees. The Company focuses on âHealth and Safetyâ continuously to ensure policies, procedures and systems are in place to meet the requirements of current legislation and best practices. Over the last six years the Company has been working to strengthen the position in relation to health and safety management. This has been a process of gradually tightening up on policies and procedures and ensuring that these remain relevant and up-to date. The Company has improved systems for carrying out risk assessments and making sure that they are regularly reviewed; for tracking of workers; workstation assessments and for many other aspects of a good health and safety management system. From the work commenced during 2021-22 to deliver the Corporate Health and Safety Action Plan and maintained the profile of health and safety, the Company has continued to work closely with its internal Safety Officers and external Agencies to build on that work and promote continuous improvement.
Key aims and objectives achieved in 2021-22 included: Strong and Active Leadership:
⢠Corporate safety procedures were reviewed and Health and safety management audit programmed delivered.
⢠Health and safety competence, awareness & training was in place.
⢠Safety performance and risk management arrangements established in the organization. team approach has continued to progress key health and safety objectives.
⢠Continuation of strong health and safety Management System through the established safety committees to ensure effective communication and consultation arrangements for discussion and promotion of health and safety improvements at scale and place.
⢠Health & safety as a standing item on all Corporate, Directorate and manager meeting agendas to embed best practice and drive cultural change and improvement.
Apart from the above, the Company has also performed below activities in Financial Year 202122 sincerely:
1. Hazards specific Safety training (Fire Fighting, First Aid, Electrical Safety, Chemical & Machine Safety)
2. KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures with the help of actual users)
3. Regional Safety Meeting at all regions.
4. Safety Gemba Audit and Monitoring.
5. Fire Risk Assessment.
6. Comprehensive review / surveillance audit done as per ISO 14001:2015 (Environment Management System) and ISO 45001:2018 (Occupational Health & Safety Management system)
7. Near miss incident capturing and Investigation.
8. Celebrated the Fire Safety week, Safety Week and Environment Day to create the Safety awareness among the workers.
From the last Five years, the Company also commenced the Fire Risk Assessment Audit for Tier-2 suppliers (62 Nos) to reduce the fire related incident and achieved significant OK result.
Also the Company has initiated for safety and started the Safety Audit from 2019-20 for (7 Nos) suppliers to reduce the human injury. (only for those who are heaving the heavy power press machinery- Critical Operation)
Apart from the above activities, the Company is strictly monitoring the injury status and sharing every month to its Vendor and also delivered (2021-22) Training awareness program related to Fire, Electrical, Machine Safety and Fire Mock drill. J. CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to the Government. During the year under review, the Company paid all its statutory dues & presently no dues are outstanding more than six months. The Company ensures payment of all dues to exchequer well within timeline as applicable.
viii. acknowledgement
It is our belief that we have a leadership team with the right experience and skills to take us into the next phase of growth. We continue to build our skills and add appropriate resources, which will help the Company deliver solid results in the years to come. The Directors place on record their sincere gratitude and appreciation for the continued co-operation and support extended to the Company by its highly valued customers, Joint Venture Partners, all the shareholders, financial institutions & Banks, various Government Agencies.
The Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.
For and on behalf of the Board of Directors of Lumax Auto Technologies LimitedD.K. Jain
Place: Gurugram Chairman
Dated: May 12, 2022 DIN: 00085848
Mar 31, 2018
Dear Members,
The Directors with immense pleasure present the 37th Annual Report of Lumax Auto Technologies Limited (âCompanyâ) on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2018.
The Key highlights of Financial Performance of your Company for the year along with previous year figures are as follows:
I. Financial Performance
(Rs In Lacs)
Particulars |
Standalone |
Consolidated |
||
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
Revenue from Operations |
60,750.77 |
52,149.66 |
1,13,851.32 |
1,03,969.72 |
Other Income |
1,499.47 |
387.54 |
1,524.30 |
1,049.93 |
Total Income |
62,250.24 |
52,537.20 |
1,15,375.62 |
1,05,019.65 |
Total Expenses |
57,966.73 |
51,460.86 |
1,06,500.65 |
99,398.87 |
Profit Before Tax, Share in Net Profit of associate, Exceptional Item |
4,283.51 |
1,076.34 |
8,874.97 |
5,620.78 |
Profit of Associate |
- |
- |
(61.53) |
292.45 |
Exceptional items |
(227.50) |
(322.41) |
(227.50) |
(319.11) |
Profit before Tax |
4,056.01 |
753.93 |
8,585.94 |
5,594.12 |
Tax Expenses |
1,134.24 |
214.85 |
2,874.71 |
1,586.19 |
Minority Interest |
- |
- |
836.86 |
558.12 |
Profit for the period (After Tax and Minority Interest) |
2,921.77 |
539.08 |
4,874.37 |
3,449.87 |
Other Comprehensive Income |
4,060.13 |
5,010.24 |
4,062.27 |
5,011.57 |
Equity holders of the parent |
- |
- |
4,059.02 |
5,007.99 |
Non- controlling interests |
- |
- |
3.25 |
3.58 |
Total Comprehensive Income |
6,981.90 |
5,549.32 |
9,773.50 |
9,019.50 |
Equity holders of the parent |
- |
- |
8,933.39 |
8,457.80 |
Non- controlling interests |
- |
- |
840.11 |
561.70 |
Paid-up Equity Share Capital |
1,363.15 |
1,363.15 |
1,363.15 |
1,363.15 |
Earning Per Share (EPS) (not annualized) Basic/Diluted EPS |
21.43 |
3.96 |
35.76 |
25.31 |
Note: Financial Results for the year ended March 31, 2018 are prepared first time in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of The Companies Act, 2013, and previous year figures for the year ended March 31, 2017, have been regrouped / re-casted in accordance with Ind AS to make them comparable.
a. Company Performance
The Indian Automobile Industry being one of the largest in the world and accounting for 7.1 percent of the countryâs Gross Domestic Product (GDP) is presently the second largest two-wheeler manufacturer and the fifth largest commercial vehicle manufacturer in the world.
During the Fiscal year 2017-18, the Indian Automobile Industry registered a production growth of 14.78 percent as compared to 5.41 percent over the same period last year. In this backdrop the Auto Component Industry posted an encouraging performance and grew by 14.30 percent as compared to the previous year. Currently, the Indian Auto Component Industry is contributing more than half of the average exports achieved by the Automotive Industry.
The total production by Automobile Industry for the financial year 2017-18 was 290.73 lacs vehicles and the contribution of each category of vehicles into the same is depicted graphically below:
In the above background and during the year under review, the performance of your Company is summarized as under:
Standalone Performance:
On standalone Basis the Company registered growth of 24 percent in Revenue from Operations which is over and above the Industry growth. For the Financial Year 2017-18 the Profit Before Tax (PBT) stood at Rs 4,056.01 Lacs and Profit After Tax (PAT) was recorded at Rs 2,921.77 Lacs witnessing a significant growth.
The growth was led by increased volumes of PCB manufacturing business, plastic moulded parts and sheet metal components of major Customers of the Company i.e. Bajaj Auto Limited (BAL), Honda Motorcycles & Scooters India Ltd. (HMSI) and Maruti Suzuki India Limited (MSIL).
Consolidate Performance:
On Consolidated Basis the Company achieved growth of 15 percent in Revenue from Operations. For the Financial Year 2017-18 the Profit Before Tax (PBT) stood at Rs 8,585.94 Lacs witnessing a significant growth of 53 percent. The Profit After Tax (PAT) after Minority Interest was recorded at Rs 4,874.37 Lacs recording the growth by 41 percent. The Basic and Diluted Earnings per share also grew by 41 percent.
b. Dividend
Your Company maintained its commitment in delivering long-term sustainable growth and attractive Dividend to its Shareholders. The Board of Directors at their Meeting held on May 28, 2018 had approved payment of Dividend at the rate of 100 percent on Equity Share Capital of the Company which is subject to the approval of the Shareholders at the ensuing Annual General Meeting (AGM).
The proposed dividend will translate into Dividend at the rate of Rs 2/- (Rupees Two only) per Equity Share of the face value of Rs 2/- (Rupees Two only) each, after Sub -division of existing Equity Shares of the Company in the ratio of 1:5 as on Record Date i.e. June 08, 2018.
The total amount of Dividend proposed to be distributed, amounts to Rs 1,410.01 Lacs (Including Dividend Distribution Tax) as against Rs 640.68 Lacs in the previous year. The Dividend pay - out ratio comes to 48.26 percent.
c. Subsidiaries and Associate Companies & Consolidated Financial Statements
As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as âListing Regulationsâ), applicable provisions of the Companies Act, 2013 and Ind AS 110, the Audited Consolidated Financial Statements are provided in the Annual Report of the Company.
As on March 31, 2018, the Company comprised of seven (7) Subsidiaries; five (5) being direct Subsidiaries & two (2) are Step-down Subsidiary and two (2) Associates Companies. The details of the Subsidiaries and Associates along with highlights of their performance are as follows:
Subsidiaries:
Lumax DK Auto Industries Limited (LDK)
LDK is a 100 percent Subsidiary of the Company is engaged in manufacturing of lights and plastic modules. The Revenue of the Company stood at Rs 34,991.07 Lacs.
Lumax Management Services Private Limited (LMS)
LMS is a 100 percent Subsidiary of Company. The Company had emerged as a full-time service provider
in form of Corporate Support Services to its Group Companies. The Revenue of the Company Stood at Rs 2,472.04 Lacs as on March 31, 2018.
Lumax Integrated Ventures Private Limited (LIVE)
LIVE is a 100 percent Subsidiary of the Company. The Company was established for manufacturing of Non - Automotive Parts. LIVE has two (2) Subsidiaries Lumax Energy Solutions Private Limited and Velomax Mobility Private Limited. The Consolidated turnover of the LIVE for the Financial Year 2017 -18 stands for Rs 197.95 Lacs.
Lumax Mannoh Allied Technologies Limited (LMAT)
LMAT is 55 percent Subsidiary formed in collaboration with Mannoh Industrial Co. Ltd., Japan. The entity manufactures Gear Shifters and Parking Brakes. The Company has a market leadership position within this segment with approximately 60 percent market share in India. During the year, the Company received new order for supplying the Gear Shifter to Toyota Yaris. The Companyâs Revenue stood at Rs 13,586.18 Lacs. The Company has also set up new Manufacturing facility at Surender Nagar, Gujarat for supplying Gear Shifter to Suzuki Motors.
Lumax Cornaglia Auto Technologies Private Limited (LCAT)
LCAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited (LATL) and Cornaglia S.p.A. Italy having management control by LATL. The JV Company manufactures air intake systems as well as other plastics injection blow moulded parts. The Companyâs Revenue stood at Rs 4,877.34 Lacs.
Associates:
Lumax Gill - Austem Auto Technologies Private Limited (LGAT)
LGAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited and Gill-Austem LLP, USA. The JV Company manufactures seat frames and seat mechanisms. The current year Revenue stood at Rs 6,286.01 Lacs.
Lumax Sipal Engineering Private Limited is an Associate Company of Lumax Integrated ventures Private Limited.
In accordance with the provisions of Section 129(3) of the Companies Act, 2013 a report on performance and financial position of Subsidiaries, Associate Companies are presented in notes to Consolidated Financial Statements.
Further, in accordance with the provisions of Section 136 (1) of the Companies Act, 2013, the Audited Financial
Statements, including the Consolidated Financial Statements and related information and audited accounts of subsidiaries are available on the website of the Company i.e. www.lumaxautotech.com and the same shall also be made available for inspection at registered office of the Company during the working hours.
II. State of Companyâs Affairs
During the year under review, the Company underwent through a series of critical developments and changes influencing its operations, business activities, corporate governance practices etc. Yet it continued to reinforce its position in the market and derived sustainable benefit due to its strong foundation and its deeper integration with its subsidiaries and joint ventures.
In the course of the year, the Company unveiled its New Brand Identity on November 08, 2017, the new refreshed logo and the visual brand identity epitomises our journey and shall serve as the torchbearer of future growth and aspirations, it also rearticulated the Group Purpose and Vision.
The year 2017-18 was marked by the most ambitious tax reform since Independence i.e. Implementation of Goods and Services Tax (GST) and the Company continued to maintain its momentum in managing it efficiently and effectively. Another major development confronting the Company was transition to Indian Accounting Standards (Ind AS) from Indian GAAP which was smoothly implemented by the Company and there were no significant impacts on Financial Statements of the Company.
During the year, the Company had sold its bulbs and wire manufacturing unit situated in Kale-Amb, Himachal Pradesh, to one of its Group Company viz. Lumax Ancillary Limited on Slump-Sale basis. The said unit was expected to contribute towards the growth of Aftermarket Division of the Company through supply of auto bulbs and electrical components. However, in view of insignificant contribution of the said unit towards the Aftermarket Division and for the overall benefit of the Company it was considered prudent to sell this unit.
The 2nd Quarter of the Fiscal Year was quiet eventful for the Company, it had established two (2) Joint Ventures with Fransisco Albero S.A.U (FAE) Spain and Ituran Location and Control Limited Israel:
- As the Country takes a leap from BS-IV to BS-VI emission norms, the huge demand for Oxygen Sensors is projected. Thus, with a futuristic vision and much before the mandatory enforcement of BS-VI, a Joint Venture with Francisco Albero S.A.U. (FAE), Spain was entered into to manufacture and supply Oxygen Sensors for Two-Wheeler Industry. The product is expected to significantly enhance the fuel efficiency of a vehicle and shall play a critical role in aligning with the BS-VI emission norms.
- As a leading Automotive Component Manufacturer and keeping in line with technological progression in the Automotive Industry, it was natural for the Company to further enter into advanced technologies to provide world-class product and services. The Telematics products and services will address the growing menace of vehicle theft, and road accidents. For the Commercial Vehicles, the Telematics solutions will aid in determining vehicle downtime, fleet monitoring and reduce unauthorized use of vehicles.
The Company through its Subsidiaries and Associates, has been a manufacturer of wide range of products like Lighting Module, Frame Chassis, Swing Arms, Integrated Plastic Modules, Gear Shift Lever, Intake systems, Seat Frames & Mechanisms etc.
During the year under review the Company with its existing products basket has baged orders for new product launches by various OEMâs such as Eicher, Honda, Nissan and Bajaj Auto etc.
The Company continues to drive growth to diversified product and added new product such as Trailing Arm and Swing Arm in two wheeler segment & received business from same from Bajaj Auto Limited.
The Company caters to the Aftermarket, majority of which is lighting systems. Aftermarket have also done well for us post the launch of the refurbished brand exercise and the change in marketing strategy which was well supported by the GST implementation. With the right efforts and initiatives already put in place for addition of new products under this division, the Company is extremely positive about growth from this business segment.
Owing to its commitment towards, continuous advancement towards Information Technology and SAP the Company upgraded to SAP S/4HANA in the Financial Year ending 2018. This will enhance the Companyâs journey towards complete digitalization as a way forward. Similarly, efforts towards integrating GST regime within the SAP framework was implemented and successfully making the Company - âSAP GST Compliantâ.
a. Adoption of Indian Accounting Standards (Ind AS)
In February 2015, Ministry of Corporate Affairs (MCA) notified the final roadmap on Ind AS with implementation in a phased manner to be complied by the specified class of companies effective from April 1, 2016. Post above notification Ind AS has replaced existing Indian GAAP prescribed under Section 133 of The Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 according to applicability on specified entities. Accordingly, this is first year when the Companyâs financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind AS and the financial statements for the year ended March 31, 2017 and opening Balance Sheet as at April 1, 2016 (the Companyâs date of transition) earlier reported in previous IGAAP, have been restated in accordance with Ind AS to make them comparable.
Accordingly, the impacts of transition to Ind AS are given in detail in the Standalone and Consolidated Financial Statements.
b. Goods and Services Tax (GST) - Implementation and Impact
The year 2017-18 saw the roll out of the Goods and Services Tax (GST) compliance, the biggest tax reform in the history of Independent India which was applicable with effect from July 1, 2017. GST is expected to bring in efficiencies in the system by improving the ease of doing business, streamlining the regulatory structure, removing multiple taxes and digitization of the tax collection mechanism thereby leading to an improved business environment.
Although, alike all other industries, the implementation of GST was a minor hiccup, yet the Company has been able to successfully acknowledge the same without any disruption. In coming years, the overall effect of GST is expected to be beneficial for the Company along with increased and better tax compliance.
c. Change In Capital Structure
The Board of Directors in its Meeting held on March 23, 2018 approved the Sub-Division of One (1) Equity Share having face value of Rs 10/- each fully paid-up into Five (5) Equity Shares having face value of Rs 2/- each followed by approval of Shareholders sought by way of Postal Ballot, the results of which were declared on May 08, 2018.
Post the approval of above proposal by Shareholders the Issued, Subscribed and Paid up Equity Share Capital of the Company would remain same i.e. Rs 13,63,15,410/-(Rupees Thirteen Crores Sixty Three Lacs Fifteen Thousand Four Hundred Ten only) divide into 6,81,57,705 (Six Crores Eighty- One Lacs Fifty Seven Thousand Seven Hundred Five) Equity Shares of Rs 2/- each.
d. Amendment of Memorandum and Articles of Association of the Company
In order to give effect to the above proposal of SubDivision of Equity Shares of the Company, the Board in its Board Meeting dated March 23, 2018 also approved the proposal for Amendment of Memorandum and Articles of Association of the Company (MOA & AOA). Accordingly, the following changes were made to the existing MOA & AOA of the Company:
1. Alteration of âCapital Clause - Vâ of the Memorandum of Association of the Company.
2. Alteration of âArticle 4 (a) - Share Capitalâ in Articles of Association of the Company.
The above amendments were also approved by Shareholders through Postal Ballot, the results of which were declared on 8th May 2018.
e. Capacity & Facility Expansion
During fiscal 2017-18 the Company has initiated steps for capacity enhancement with a view to strengthen its existing customer base and accordingly shall be shifting its PCNTDA manufacturing facilities to bigger premises in Chinchwad, Pune for manufacturing of Swing Arm Assembly. The new facility is expected to be operational by August 2018.
Similarly, in Aurangabad, the Company is expanding its existing business facilities to a new and better location for manufacturing & assembly of various fabricated components for two wheeler. This new business is expected to be operational by October 2018.
f. Quality Initiatives
Your Company strives to be a supplier of choice across all its customers and is always committed to develop and design new products, in line with its strategy towards delivering competitive advantage to the customers. In the said perspective, Total Productive Maintenance (TPM) has been successfully implemented across all plants of the Company to create a culture and environment which continuously improves quality, cost and delivery parameters. The Unit at K-76, Aurangabad has received Quality Gold award from Bajaj Auto Limited for maintaining PPM below 1000 in last 24 months. The other Units also received awards for Quality initiatives in various forums of Quality Circle Forum of India (QCFI) and BAVA / KAIZEN Competition, ACMA Kaizen Competition etc. In addition, the Quality Control Circle (QCC) programs are an integral part across plants of the Company. By implementing these various initiatives, improvement of Quality is willingly carried out by employees in true spirit, resulting in minimizing rejection and cost cutting.
g. Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as an Annexure - A.
h. Change in the Nature of Business, if any
There was no change in the nature of business of the Company during the Financial Year ended March 31, 2018.
III. Governance and Ethics
a. Corporate Governance
The report on Corporate Governance together with the Auditorâs Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as an Annexure - B.
b. Directors & Key Managerial Personnel including those who were appointed or have resigned during the Year
APPOINTMENTS
On recommendation of the Nomination and Remuneration Committee, The Company in its Board Meeting held on December 04, 2017, had appointed -
- Mr. Sanjay Mehta (DIN: 06434661) as an Additional Director, liable to retire by rotation, which is subject to his regular appointment in the ensuing Annual General Meeting (AGM). Mr. Sanjay Mehta, is Chartered Accountant and Company Secretary by qualification. He is associated with the D K Jain Group since last 10 Years. He has rich experience of 26 years in Corporate Accounts and Finance. He is looking after Strategy planning, developing and implementing plans within timeframe as per the budget goals by creating and funding sustainable, profitable growth of the Company.
- Mrs. Diviya Chanana (DIN: 00737160) as an Additional Director to be designated as an Independent Director for a period of 5 years, not liable to retire by rotation, w.e.f December 04, 2017 which is subject to her appointment in the ensuing AGM. Ms. Diviya Chanana is a Graduate and Diploma holder in Travel and Tourism and has over 15 years of rich experience in the said field.
The resolutions for above said appointments are duly contained in the Notice of AGM.
RE-APPOINTMENTS
Mr. D.K. Jain (DIN: 00085848) will be completing his present tenure as Executive Chairman of the Company on August 06, 2018. On the recommendation of the Nomination and Remuneration Committee, the Board in its Meeting held on May 28, 2018 has Re-appointed him as Executive Chairman of the Company for a further term of five (5) years. The said appointment is subject to the approval of Shareholders in the ensuing AGM and the appropriate resolution is contained in the Notice of AGM.
Mr. Anmol Jain (DIN: 00004993) shall also be completing his present tenure as Managing Director of the Company on August 06, 2018. The Board, on recommendation of Nomination and Remuneration Committee, in its Meeting held on May 28, 2018 had approved the Re-appointment for a further term of 5 years which is further subject to the approval by Shareholders in the ensuing AGM and the appropriate resolution is contained in the Notice of AGM.
In accordance with the Articles of Association of the Company and Section 152 of the Companies Act, 2013, Mr. Deepak Jain (DIN: 00004972), Director of the Company will retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends his re-appointment.
CESSATIONS
During the year, Mrs. Usha Jain (DIN: 00005009), NonExecutive Director, ceased to be Director of the Company w.e.f. December 04, 2017. The Board of Directors place on record its appreciation towards her contributions during her tenure as Director of the Company.
Mr. Sandeep Dinodia (DIN: 00005395), Independent Director on the Board of the Company, ceased to be Director of the Company w.e.f. May 28, 2018. The Board of Directors place on record its appreciation towards his contributions during his tenure as an Independent Director of the Company.
c. Statement on Declaration given by Independent Directors
In compliance with the provisions of Section 149 (6) of The Companies Act, 2013 requisite declarations have been received from the Independent Directors regarding meeting the criteria of Independence.
d. Number of Board Meetings and Committees of Board
The Board of Directors met five (5) times during the Financial Year under review viz. May 15, 2017, August 30, 2017, December 04, 2017, February 12, 2018 and March 23, 2018. The maximum gap between any 2 meetings did not exceed 120 days.
A separate Meeting of Independent Directors was also conducted on 15th March 2018, without the presence of Non- Independent Directors and Management. The details on Attendance during the Board Meetings and other Committee Meetings of Board of Directors are provided in Corporate Governance Report which forms part of the Directors Report as an Annexure B.
e. Board Diversity and Policy on Directorâs Appointment and Remuneration
The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to leverage different skills qualifications professional experiences perspectives and backgrounds which is necessary for achieving sustainable and balanced development. The Board has adopted a policy on Nomination, Remuneration and Board Diversity which sets out the criteria for determining qualifications, positive attributes and independence of a Director.
The main features of the Policy are as follows -
1. Purpose
2. Objectives
3. Applicability & Accountability
4. Responsibility of Nomination & Remuneration Committee
5. Matters relating to appointment and remuneration of Directors
6. Remuneration to Independent Directors
7. Remuneration to other Employees
8. Term & Tenure
The Companyâs Policy relating to appointment of Directors, payment of Managerial remuneration, Directorsâ qualifications, positive attributes, independence of Directors and other related matters is enclosed to this Board Report as an Annexure C.
f. Performance Evaluation of Board, Committee And Directors
In accordance with applicable provisions of the Act and Listing Regulations, the evaluation of the Board as a whole, Committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Board. The evaluation tested key areas of the Boardâs work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directorsâ functioning.
EVALUATION TECHNIQUE
- The evaluation methodology involves completion of questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.
- The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management etc.
- The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations etc.
- The performance of Non- Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes etc.
- It also involves self-assessment by all the directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.
- Further, the assessment of Chairmanâs performance is done by each Board Members on similar qualitative parameters.
EVALUATION OUTCOME
The feedback of the evaluation exercise and inputs of Directors were collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is put in place.
The Board as a whole together with each of its Committees was working effectively in performance of its key functions- Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when need arises. Comprehensive agendas are sent to all the Board Members well in advance to help them prepare and keep the meetings productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering all Business verticals, by way of presenting specific performance of each Plant, Product Category and Corporate Function from time to time.
The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day to day management of the business, with reference to the strategy and long term objectives.
The Executive Directors and Non-executive Directors provided entrepreneurial leadership to the Company within a framework of prudent and effective controls, with a balanced focus on policy formulation and development of operational procedures. It was acknowledged that the management afforded sufficient insight to the Board in keeping it up-to-date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.
g. Related Party Transaction And Policy
All contracts/arrangements/transactions entered by the Company with Related Parties were in ordinary course of business and at armâs length basis.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated by the Company. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of the Companies Act, 2013 and Listing Regulations, 2015.
The details of the Related Party Transactions as per IND AS - 24 are set out in Notes to the Financial Statements of the Company. The Company has formulated a policy on Related Party Transactions, which is available on the Companyâs website at http://www.lumaxautotech.com.
There were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors or Key Managerial Personnel, which may have a potential conflict of interest for the Company, at large.
Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 Form AOC-2 is set out in the Annexure - D of this Report.
h. Compliance Management Framework
For monitoring and ensuring compliance with applicable laws by the Company and for establishing adequate management control over the compliances of all acts, laws, rules, regulations and regulatory requirements, the Company has adopted comprehensive Compliance Manual for structured control over applicable compliances by each of the units of the Company.
The Company has a practice of obtaining a Statutory Compliance Report on a monthly basis from various functional heads of respective units for compliance with laws applicable to them. A consolidated report on compliance with applicable laws is presented to the Board every quarter. To take care of the continuously evolving compliance scenario, the Company is constantly striving to strengthen the reporting system.
A separate corporate compliance management team periodically reviews and monitors compliances by units and supports in effective implementation of same in a time bound manner. The Board and Audit Committee along with Compliance team periodically monitors status of compliances with applicable laws based on quarterly certification provided by senior management.
i. Vigil Mechanism-Whistle Blower Policy
The Company has established a vigil mechanism named Whistle Blower Policy, for Directors, employees and business associates to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or Ethics Policy, in accordance with the provisions of Companies Act, 2013 Listing Regulations, 2015. The mechanism provides for adequate safeguards against unfair treatment of whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/ exceptional cases.
The Whistle Blower Policy is uploaded on the website of the Company. To further strengthen this mechanism, the Company has launched an Employee App which is available for both android and iOS users to facilitate easy expression of their opinions/suggestions/complaints.
j. Secretarial Standards
The Board of Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to âMeetings of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly followed by the Company.
k. Directors Responsibility Statement
As required under Section 134(5) of the Companies Act, 2013, the Directors state:
(i) that in the preparation of the Annual Accounts for the Financial Year ended March 31, 2018, the applicable
Accounting Standards have been followed along with proper explanation relating to material departures in the Auditor Report and Notes to Accounts;
(ii) that the Directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the Company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the Annual Accounts on a âgoing concernâ basis.
(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
(vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
l. Particulars of Employees
Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this Report as an Annexure - E. The information required pursuant to section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the Members at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, whereupon a copy would be sent.
m. Audit Committee & Composition
The composition of the Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 read with the Rules framed thereunder and Regulation 18 of the Listing Regulations, 2015.
The Audit Committee comprised of Mr. Sandeep Dinodia as Chairman, Mr. Roop Salotra, Mr. Milap Jain, Mr. Dhiraj Dhar Gupta and Mr. Anmol Jain as Director. Ms. Swapnal Patane acts as Secretary to the Audit Committee.
The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervises the Companyâs internal control processes, financial reporting and vigil mechanism.
All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.
IV. Internal Financial Controls and Adequacy
The Company has a comprehensive internal control system to provide reasonable assurance about the achievement of its objective, reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.
The monitoring and reporting of financial transactions is supported by a web-based system SAP Hana which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures at all levels of the organization.
a. Risk Management Policy
The Company has adopted an Enterprise Risk Management policy and established a risk management framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company has also constituted an internal Risk Management Committee to review the risk trend, exposure, potential impact and their mitigation plans, and periodically the key risks are also discussed at the Audit Committee.
b. Auditors
i. Statutory Auditors
The Members in their Meeting held on July 23, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 5 consecutive years in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, to hold the office of Auditors till the conclusion of the sixth consecutive Annual General Meeting of the Company to be held in the Year 2019.
In accordance with the Companies Amendment Act, 2017, enforced on May 07, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.
The Report given by the Statutory Auditors on the financial statement of the Company forms part of this Annual Report. The Auditor Report does not contain any qualification, reservation, adverse remark or disclaimer.
ii. Cost Auditors
The Board has re-appointed M/s Jitender, Navneet & Co. as the Cost Auditors of the Company in accordance with Section 148 and other applicable provisions, if any, of the Companies Act, 2013, for the audit of the cost accounts of the Company for the Financial Year 2017-18.
The Cost Audit Report for the Financial Year 2016 -17 has been filed with the Central Government within the stipulated time on September 27, 2017.
iii. Secretarial Auditor
Pursuant to the provisions of Section 204 ofthe Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. I.U. Thakur, Practicing Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2017-18.
The Report of the Secretarial Auditor in the prescribed Form MR-3 is annexed herewith as an Annexure F. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
iv Internal Auditors
In compliance with the provisions of Section 138 of Companies Act, 2013, read with Companies (Accounts) Rules, 2014, your Company has appointed M/s Pricewaterhouse & Co LLP as Internal Auditors for the financial year 2017-18.
c. Details in Respect of Frauds Reported by Auditors under sub-section (12) of section 143 of The Companies Act, 2013 other than those which are Reportable to the Central Government:
There were no frauds which were reported by Auditors for the year under review.
V. Corporate Social Responsibility (CSR) Policy and Initiatives
Your Company is committed to grow and operate in a socially sustainable manner and continued to give back to society. A well-outlined CSR program creates social and environmental value thus impacting and improving the lives of communities. The key focus areas of your Company have been Education and Healthcare for disadvantaged sections of the society. The Companyâs focus areas are largely covered under Schedule VII of the Companies Act, 2013. During the year, the Company has added one more school under its education initiative, besides continuing its support to the existing schools by way of providing financial support in terms of enrollment of girl child providing a holistic learning environment, fees of children, E-learning program, contributing towards infrastructure and other facilities for students in the school. Under its healthcare initiatives, the Company is focussing on preventive healthcare by continuously organising health check-up camps, lending financial support to hospitals for juvenile diabetes, cataract operations and partnering in special drives organised by various agencies for this cause.
Your Company endeavored to meet the budgeted expenditure in its CSR activities and has committed to incur expenditure for CSR initiatives, however, discontinuance of support to one school has resulted into a shortfall as such in the CSR expenditure as compared to the stipulated 2 percent of the average net profits of the last three financial years. The Company is committed to spend 2 percent of the average net profits of the last three financial years on CSR activities and it shall ensure compliance of the same going forward. The detailed Report on CSR activities is annexed herewith as Annexure - G.
Constitution of CSR Committee
The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of Companies Act, 2013. The Committee monitors and oversees various CSR initiatives and activities of the Company. During the Financial Year 2017-18, the CSR Committee of the Board of Directors comprised of three (3) Members namely, Mr. Roop Salotra, Chairman, Mr. Dhiraj Dhar Gupta, Member, Mr. D. K. Jain, Member. Further, the Board of Directors have also adopted the CSR Policy of the Company as approved by the Corporate Social Responsibility Committee which is also available on the website of the Company at www. lumaxautotech.com.
The contents of the said policy are as below:
1. Purpose
2. Policy Guidelines
3. Scope
4. Areas Covered
5. CSR Committee & Responsibility
6. Board Responsibility
7. Budget
8. Implementation
9. Management Commitment
The disclosures as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as an Annexure G to this Report in the prescribed format.
VI. Other Statutory Disclosures as Required Under Section 134 of Companies Act, 2013
a. Names of Companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Year
During the year under review, the Company has ceded the management control of its step down Subsidiary Company i.e Lumax Sipal Engineering Private Limited in favour of the Joint Venture partner, Sipal S.p.A, Italy. Thus this Company ceased to be Subsidiary and became an Associate of the Company.
b. Extract of Annual Return
In accordance with the requirement of Section 92 of Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the annual return in Form MGT 9 is annexed as an Annexure - H.
c. Investor Education and Protection Fund (IEPF)
Transfer of Unpaid Dividend
Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (âthe Rulesâ), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven(7) years. Consequently, your Company has transferred Rs 120,147/- during the year to the Investor Education and Protection Fund, lying with it for a period of seven years pertaining to year 2009-10.
Transfer of Shares underlying Unpaid Dividend
Further, pursuant to provisions of Section 124(6), the shares in respect of which Dividend has not been paid or claimed by the Shareholders for seven (7) consecutive years or more shall also be transferred to the Demat account of IEPF Authority. Accordingly, 1201 shares underlying Unpaid Dividend have been transferred as per the requirement of IEPF Rules.
It may be noted that Unclaimed Dividend/Underlying shares for the Financial Year 2010 - 11 can be claimed by the Members by October 21, 2018. The Notice as stipulated pursuant to the provisions of Section 124 of Companies Act, 2013 read with IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 will be published in the Newspaper inviting the attention of the Shareholders to claim their Dividends.
d. Fixed Deposits
During the year under review, the Company has not accepted any Deposit under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
It is further stated that the Company does not have any deposits which are not in compliance with the requirements of Chapter V of The Companies Act, 2013.
e. Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees and investments covered under the provisions of section 186 of Companies Act, 2013 are given in the Notes to financial statements.
f. Material Changes and Commitments
No material changes and commitments affecting the financial position of the Company have occurred between April 1, 2017 and the date of this report except the Company has acquired management control over the Associate Company Lumax Gill -Austem Auto Technologies Private Limited by giving casting vote power to the Chairman, who is representing Lumax Auto Technologies Limited w.e.f April 01, 2018.
g. Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed separately as an Annexure -I.
h. Significant and Material orders passed by the Regulators or Courts
There were no significant and material orders passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.
i. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
In accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has adopted the âPrevention of Sexual Harassment at Workplace Policyâ and constituted an Internal Complaints Committee (ICC) for Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the related aspects.
The Committee meets as and when required, however minimum one meeting is ensured during the Financial Year to discuss strengthening safety of employees at workplace and also to resolve/address related issues, if any reported during the year.
During the year under Review i.e. 2017-18 Nine (9) meetings of ICC across all plant locations were held. Further, as per the applicable provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013 your Company continues to submit Annual Report to the District Officer consisting of details as stipulated under the said Act
j. Environment Health & Safety
The Company is Committed to provide a safe working environment with a focus on âSafety Culture Buildingâ by maintaining a number of Safety Management Systems to manage the risk and as a result reduction in number of incidents and injuries. These systems include safety rules, safety procedures, safety training, hazard identification & correction, incident reporting & investigation, capturing near miss accidents, safety communications and safety suggestions. Each Safety Management System has an important contribution to not only improving workplace safety but also influencing the organizationâs safety culture.
Apart from the above, Lumax is also performing below activities sincerely since 2015:
- Regional Safety Meeting for all regions.
- Surface Treatment/ Duct cleaning for locations where paint material & chemicals are used
- KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures with the help of actual users)
- Safety Gemba Audit (Identifying the potential hazard)
- Hazards specific Safety training
- Maintaining Standard Operating Procedures
By ensuring all the above zero accident level is maintained for last two years. Induction programme & regular training of employees and the introduction of formal safety management system help us to mitigate any future incidents.
In financial year 2017-18, the Companyâs units situated at Chakan, Pune and G-53, Aurangabad achieved OHSAS Certification.
k. Contribution to Exchequer
The Company is a regular payer of taxes and other duties to the Government. During the year under review, Company paid all its statutory dues & presently no dues are outstanding more than six months. The Company ensures payment of all dues to exchequer well within timeline as applicable.
Acknowledgment
It is our belief that we have a leadership team with the right experience and skills to take us into the next decade of growth. We continue to build our skills and add appropriate resources, which will help the Company deliver solid results in the years to come. Your Directors place on record their appreciation for the continued cooperation and support extended to the Company by its highly valued customers, Joint Venture Partners, all the Shareholders, financial institutions & Banks, various Government Agencies.
Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.
For and on behalf of the Board of Directors
D.K. JAIN
Place: New Delhi Chairman
Dated: May 28, 2018 DIN:00085848
Mar 31, 2017
To The Members,
It is a great privilege for your Directors to present the 36th Annual Report on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2017.
I. FINANCIAL PERFORMANCE
We are pleased to inform you that during the financial year 2016 -17, on consolidated basis your Company crossed the Rs. 10,000 million sales landmark for the first time ever. The Company achieved Sales Turnover of Rs. 10,123.16 million for the current year as against Rs. 9,051.46 million in the previous year, recording a growth of 11.84% on consolidated basis. Our net profits after minority interest increased to Rs. 341.43 million for the current year as against Rs. 317.66 million in the previous year, recording a growth of 7.48 %.
Key highlights of standalone financial performance of your Company for the year is as follows:
_ (Rs. in Millions)
PARTICULARS |
2016-17 |
2015-16 |
Net Sales |
5082.60 |
5619.30 |
EBITDA |
269.56 |
430.68 |
Finance Expenses |
35.46 |
43.26 |
Depreciation |
130.84 |
116.99 |
Profit Before Exceptional items and Tax |
103.26 |
270.43 |
Exceptional Item |
(32.24) |
- |
Profit Before Tax (PBT) |
71.02 |
270.43 |
Provision for Taxation, Deferred Tax |
20.04 |
74.93 |
Profit After Tax (PAT) |
50.98 |
195.50 |
Balance of Profit brought forward |
624.75 |
515.54 |
Balance Available for Appropriation |
675.73 |
711.04 |
Appropriation: |
||
Dividend1 |
- |
64.07 |
Corporate Dividend Tax* |
- |
2.66 |
Transfer to General Reserve |
- |
19.56 |
Balance carried to Balance Sheet |
675.73 |
624.75 |
Dividend (%) |
47 |
47 |
Basic and Diluted Earnings Per Share (EPS) Rs. |
3.74 |
14.34 |
DIVIDEND*
Your Company has a long track record of distribution of dividend to the shareholders. Maintaining the said commitment this year as well, your directors are pleased to recommend a Dividend of Rs. 4.70/-(47%) per Equity Share of face value of Rs. 10/- each for the Financial Year 2016-17 subject to the approval of the shareholders at the ensuing Annual General Meeting. The total amount of dividend proposed to be distributed aggregates to Rs. 77.11 Million (Including Dividend Tax). The Dividend pay-out ratio comes to 151.25%.
SUBSIDIARIES AND JOINT VENTURE COMPANIES
During the financial year ended March 31, 2017, your Company had 7 (Seven) subsidiaries and 2 (Two) joint ventures companies. 4 (Four) of these are direct subsidiaries and rest 3 (Three) are step-down subsidiaries.
During the year under review, Company acquired Lumax Management Services Private limited as its 100% wholly owned subsidiary and incorporated Velomax Mobility Private Limited as its step-down subsidiary.
A report on the performance and financial position of each of the subsidiaries and joint venture companies as per the Companies Act, 2013 included in the consolidated financial statement is presented in a separate section in this annual report and hence not repeated here for the sake of brevity. Please refer Form AOC-1 annexed to the financial statement in the Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other applicable laws for the time being in force and the same forms part of this Annual Report.
The Audited Financial Statements, including the Consolidated Financial Statements and related information and audited accounts of subsidiaries are available on the website of the Company i.e. www. lumaxautotech.com. These documents shall also be available for inspection by any shareholder at the registered office of the Company.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (MCA), vide its notification dated February 16, 2015, notified the Indian Accounting Standards (Ind AS) applicable to certain classes of companies. Ind AS has replaced existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The same is applicable from April 1, 2017 to the Company and all its subsidiaries and JV Companies. Your Company will accordingly adopt Ind AS from financial year 2017-18 onwards.
II. BUSINESS
The Automotive Industry can be termed as the mother of manufacturing sector in an economy as its fortunes directly impacts the fortunes of several related manufacturing Industries (e.g. Iron & Steel, Aluminum, Lead, Rubber, Plastics, Glass, Machine tools, Moulds & dies, Chemicals and Capital goods) and several in the Services sector (e.g. Logistics, Insurance, Banking, Sales & Distribution, Service & repair and fuels).The rapid growth of the Indian Automotive will further provide a strong fillip to the micro & small and medium Industries of the country across multiple sectors, the development of which is one of the Governments'' principle objectives. (Source: ACMA)
The Auto sector, which saw a revival last year after two years of turbulence, is set to continue the momentum this year with demand picking up across all segments. The growth of the auto industry is expected to continue in 2017 across all vehicle categories-commercial and passenger vehicles, as well as two and three-wheelers. Owing to its strong forward and backward linkages with several key segments of the economy; this sector has emerged as Sunrise Sector in the Indian economy.
In the above background, we inform that your Company has been in existence for over three decades and has successfully emerged as a preferred supplier to leading OEMs. We are also among the leading automotive companies in Aftermarket Sales of several automotive parts; genuine quality and certified products has been the focus area of our company, which has helped us to establish its strong foothold in the aftermarket. Our clearly defined business structure wherein we have developed a business model, which is channelized through subsidiaries and joint venture, has helped us to operate with multiple product lines and multiple partnerships with these to ensure superior business performance and sustainability.
We have collaborations with technologically competent entities from across the globe, which has enabled us to strengthen our product development capabilities and has helped us to expand our operations, customer base and gain market leadership. Company''s products are mainly covered under automotive components, which are further divided in these six product domains i.e. Electrical & Electronics, Metallic, Emission, Body & Trim, Polymer & Paint and Retail. Products and services of the company mainly covers Intake systems, Integrated plastic moulds, 2-wheeler chassis and lighting, Gear Shifters and Seat Structures & Mechanisms, LED Lighting etc.
We have a diverse basket of product offerings for the OEMs and also for the Aftermarket Sales Segment. New product development department is being setup to speed up the introduction of new products to the market. Our new branding strategy to support and create a unique identity of products marketed will be a major step for this division. We are confident that this change will help us to maintain the leadership position in the aftermarket.
QUALITY INITIATIVES
Your Company strives to be a supplier of choice across all its customers and is always committed to develop and design new products, in line with its strategy towards delivering competitive advantage to the customers. In the said perspective, Total Productive Maintenance (TPM) has been successfully launched across all plants of the company to create a culture and environment which continuously improves quality, cost and delivery parameters. Further, one of the unit of Company situated at Chakan successfully completed Audit of Japan Institute of Plant Maintenance (JIPM) and was honoured with the prestigious JIPM TPM excellence award. Another unit situated at Bangalore has been endowed with appreciation certification and A1 ranking from Honda Motor Scooter India Private Limited (HMSI) for its quality supply. In addition, the Quality Control Circle (QCC) programs are an integral part across plants of the company. By implementing these various initiatives, improvement of Quality is willingly carried out by employees in true spirit, resulting in minimizing rejection, cost saving.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - A.
III. GOVERNANCE AND ETHICS CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor''s Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as Annexure - B.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Anmol Jain, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Your Directors recommend the re-appointment of the above Director at the ensuing Annual General Meeting.
The Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.
NUMBER OF BOARD MEETINGS AND COMMITTEES OF BOARD
The Board of Directors met 6 (Six) times in the Financial year 2016-17. The details of the board meetings, attendance of the Directors and the details regarding Committees of the Board of Directors of the Company are provided in the Corporate Governance Report.
VIGIL MECHANISM-WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism named Whistle Blower Policy, for directors, employees and business associates to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The mechanism provides for adequate safeguards against unfair treatment of whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/ exceptional cases. The Whistle Blower Policy is uploaded on the website of the Company. To further strengthen this mechanism, the Company has launched an Employee App which is available for both android and iOS users to facilitate easy expression of their opinions/suggestions/complaints.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
In accordance with applicable provisions of the Act and Listing Regulations, the evaluation of the Board as a whole, committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Board. The evaluation tested key areas of the Board''s work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors'' functioning.
EVALUATION TECHNIQUE
- The evaluation methodology involves completion of questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.
- The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management etc.
- The performance of the Managing Director and Executive Directors is evaluated by all the Board
Members based on factors such as leadership, strategy formulation, strategy execution, external relations etc.
- The performance of Non- Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes etc.
- It also involves self-assessment by all the directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.
- Further, the assessment of Chairman''s performance is done by each Board Member on similar qualitative parameters.
EVALUATION OUTCOME
The feedback of the evaluation exercise and inputs of directors were collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is put in place.
The Board as a whole together with each of its Committees was working effectively in performance of its key functions- Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when need arises. Comprehensive agendas are sent to all the Board Members well in advance to help them prepare and keep the meetings productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering all Business verticals, by way of presenting specific performance of each Plant, Product Category and Corporate Function from time to time.
The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day to day management of the business, with reference to the strategy and long term objectives.
The Executive Directors and Non-executive Directors provided entrepreneurial leadership to the Company within a framework of prudent and effective controls, with a balanced focus on policy formulation and development of operational procedures. It was acknowledged that the management afforded sufficient insight to the Board in keeping it up-to-date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.
REMUNERATION POLICY
The Company follows a policy on remuneration of Directors and Senior Management Employees. The Policy is approved by the Nomination & Remuneration Committee and the Board. The Remuneration Policy is stated in the Corporate Governance Report.
RELATED PARTY TRANSACTION AND POLICY
In accordance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 the Company has formulated a policy on Related Party Transactions, which is available on the Company''s website at http:// www.lumaxautotech.com/downloads/related-party-transaction-policy.pdf. All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on an yearly basis for obtaining prior omnibus approval of the committee. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of the Companies Act, 2013 and the Listing Regulations 2015.
All related party transactions entered during the financial year were in the ordinary course of business and on arm''s length basis. The particulars of contracts or arrangements with material related parties referred to in Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is annexed herewith as Annexure - C.
COMPLIANCE MANAGEMENT FRAMEWORK
Your Company has a robust and effective framework for monitoring compliances with applicable laws. The Company has adopted comprehensive Compliance Manual for structured control over applicable compliances by each of the units of the Company. A separate Corporate compliance management team periodically reviews and monitors compliances by units and supports in effective implementation of same in a time bound manner. The Board and Audit Committee along with Compliance team periodically monitors status of compliances with applicable laws based on quarterly certification provided by senior management.
Directors Responsibility Statement
As required under Section 134(5) of the Companies Act, 2013, the Directors state:
(i) that in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2017, the applicable Accounting Standards have been followed along with proper explanation relating to material departures in the Auditor Report and Notes to Accounts;
(ii) that the Directors have selected such accounting policies and applied them consistently and 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 at the end of the financial year and of the profit and loss of the company for that period;
(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(iv) that the Directors have prepared the Annual Accounts on a "going concern" basis.
(v) that the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(vi) that the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
particulars of employees
Information on particulars of employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure - D. The information required pursuant to section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the members at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.
IV. INTERNAL FINANCIAL CONTROLS AND AUDIT INTERNAL FINANCIAL CONTROL
The Company has a comprehensive internal control system to provide reasonable assurance about the achievement of its objective, reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.
The monitoring and reporting of finance systems is supported by a web-based system SAP which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures at all levels of organization.
RISK MANAGEMENT POLICY
The Company has adopted an enterprise risk management policy and established a risk management framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company has also constituted an internal Risk Management Committee to review the risk trend, exposure, potential impact and their mitigation plans, and periodically the key risks are also discussed at the Audit Committee.
AUDITORS STATUTORY AUDITORS
The members in their meeting held on July 23, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 5 consecutive years in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, to hold the office of auditors till the conclusion of the sixth consecutive Annual General Meeting of the Company to be held in the year 2019, subject to ratification by the Members at every Annual General Meeting. Your Directors recommend for ratification of their appointment in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report.
COST AUDITORS
The Board has re-appointed M/s Jitender, Navneet & Co. as the Cost Auditors of the Company in accordance with Section 148 and other applicable provisions, if any, of the Companies Act, 2013, for the audit of the cost accounts of the Company for the Financial Year 2016-17. The Cost Audit Report for the Financial Year 2015 -16 has been filed with the Central Government within the stipulated time on September 30, 2016.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. I.U. Thakur, Practicing Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2016-17. The Report of the Secretarial Audit is annexed herewith as Annexure - E.
V. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
Your Company is committed to grow and operate in a socially sustainable manner and continue to give back to society. A well-outlined CSR program creates social and environmental value thus impacting and improving the lives of communities. The key focus areas of your Company have been Education and Healthcare for disadvantaged sections of the society. The company''s focus areas are largely covered under Schedule VII of the Companies Act, 2013. Under its healthcare initiatives, the Company is focusing on preventive healthcare by continuously organizing health check-up camps, lending financial support to hospitals for juvenile diabetes, cataract operations and partnering in special drives organized by various agencies for this cause.
Your Company endeavored to meet the budgeted expenditure in its CSR activities and has committed to incur expenditure for CSR initiatives, however, discontinuance of support to one school has resulted into a shortfall as such in the CSR expenditure as compared to the stipulated 2% of the average net profits of the last three financial years. The Company is committed to spend 2% of the average net profits of the last three financial years on CSR activities and it shall ensure compliance of the same going forward.
The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of Companies Act, 2013. The Committee monitors and oversees various CSR initiatives and activities of the Company. The details of CSR policy is available on the company''s website http://www.lumaxautotech.com/ downloads/CSR-policy-28-05-2015.pdf. The detailed Report on CSR activities is annexed herewith as Annexure - F.
VI. OTHER DISCLOSURES EXTRACT OF ANNUAL RETURN
In accordance with the requirement of Section 92 of Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the annual return in Form MGT 9 is annexed as Annexure - G.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Transfer of unpaid dividend
Pursuant to the provisions of Section 124(5) the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Consequently, your company has transferred Rs. 42,579/- during the year to the Investor Education and Protection Fund, lying with it for a period of seven years pertaining to year 2008-09 and the interim dividend aggregating to Rs. 33, 531/- pertaining to year 2009 -10, was transferred during the year 2016 -17, to the Investor Education and Protection Fund established by the Central Government.
Transfer of shares underlying unpaid dividend
Further, pursuant to recent enforcement of Section 124(6), the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the Demat account of IEPF authority. Accordingly, all such shares shall be transferred as per the requirement of IEPF Rules. The details of such shares ts- are also available on the Company''s website http://www.lumaxautotech.com/investors/ iepf-investor-details.html.
In view of above, due reminders were sent to Shareholders informing them to encash their dividend and the complete List of such Shareholders whose Shares are due for transfer to the IEPF is also placed in the Unclaimed Dividend section of the Investor Section on the website of the Company.
FIXED DEPOSITS
During the year under review, the Company has not accepted any Deposit under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments covered under the provisions of section 186 of Companies Act, 2013 are given in the Notes to financial statements.
MATERIAL CHANGES AND COMMITMENTS
During the year under review, the Company had closed down the manufacturing operations of its unit Situated at A -8, Waluj MIDC, Aurangabad w.e.f. 30.12.2016 due to low customer demand and financial constraints.
Further, the Company had also sold its manufacturing unit situated at Kala amb to Lumax Ancillary Limited, one of the Group Company by way of Slump sale.
Against investment by your Company in various entities, your Company has received financial of these entities for the year 2016-17 confirming that the dividend income for the said year amounting to Rs. 87.49 mn is due to your Company. The same will be received by the Company after approval of dividend by shareholders of respective entities in their AGM.
No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2017 and the date of this report.
INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed separately as Annexure -H.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All employees are covered under the said policy. An Internal Complaints Committee has also been set up to redress complaints, if any, received on sexual harassment. During the financial year under review, the Company has not received any complaints of sexual harassment from any employees of the Company.
CONTRIBUTION TO EXCHEQUER
The Company is a regular payer of taxes and other duties to the Government. During the year under review, company paid all its statutory dues & presently no dues are outstanding more than six months. Company ensures payment of all dues to exchequer well within timeline as applicable.
ACKNOWLEDGEMENT
It is our belief that we have a leadership team with the right experience and skills to take us into the next decade of growth. We continue to build our skills and add appropriate resources, which will help the company deliver solid results in the years to come. Your Directors place on record their appreciation for the continued co-operation and support extended to the Company by its highly valued customers, Joint Venture Partners, all the shareholders, Financial institutions & Banks, various Government Agencies.
Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.
For and on behalf of the Board of Directors
D.K. JAIN
Place: New Delhi Chairman
Dated: May 15, 2017 DIN:00085848
Mar 31, 2015
Dear Members,
It is a great privilege for your Directors to present the 34th Annual
Report on the business and operations together with Audited Balance
Sheet and Statement of Profit & Loss of your Company for the year ended
March 31, 2015.
FINANCIAL RESULTS
Your Company''s performance during the year as compared with the previous
year is summarized below:
(rs. in Million )
PARTICULARS 2014-15 2013-14
Net Sales 5240.44 4766.10
EBDITA 602.03 339.16
Finance Expenses 50.64 32.67
Depreciation 103.82 81.49
Profit Before Taxation (PBT) 447.57 225.00
Provision for Taxation, 127.10 74.81
Deferred Tax
Profit After Tax (PAT) 320.47 150.19
Balance of Profit brought 344.68 305.20
forward
Balances Available for 661.90 455.39
Appropriation
Appropriation :
Proposed Equity Dividend 95.42 81.79
Corporate Dividend Tax 19.42 13.90
Transfer to General Reserve 31.52 15.02
Balance carried forward to 515.54 344.68
Balance Sheet
Dividend (%) 70 60
Basic and Diluted earning 23.51 11.02
per Share (EPS) Rs.
DIVIDEND
In line with our focus on enhancing shareholder returns, the Board of
Directors are pleased to recommend a Dividend of 70% (Rs. 7/ - per
equity share) for the Financial Year 2014-15 (Rs. 6/- previous year).
The total amount of Dividend proposed to be distributed and tax thereon
aggregates to Rs. 114.84 Million. The Dividend payout ratio comes to
35.83 %.
A sum of Rs. 31.52 Million has been transferred to General Reserve of
the Company. This reaffirms the inherent financial strength of your
company.
BUSINESS PERFORMANCE
India in last decade has grown into a large automotive market
particularly for Japanese OEMs while the European and American''s have
also entered for the long haul. India however due to the recent
economic slowdown witnessed weak auto sales which impacted consumer as
well as OEM sentiment. The India auto story is expected to be driven by
four factors pent up demand, reducing food and fuel inflation, income
growth due to improved business climate and lower penetration into
households. The Indian automotive market is expected to witness ~15%
CAGR FY14-17E on the back of the demand improvement. From auto
component maker''s perspective besides, the aforementioned reasons would
also lead to higher content per car and consumers up-trading to higher
quality & safety and increased features.1
Auto sector to benefit greatly from "Make in India"! The Government has
laid out a vision statement towards ushering India as a global
manufacturing hub via the "Make in India" campaign. At present auto
sector''s contribution to GDP remains at ~7%, leads the manufacturing
sector, and the sector would greatly benefit from this specialized
focus.1
In this backdrop, your company registered a growth of 9.95% during the
year under review, by achieving Sales Turnover of Rs. 5,240.44 Million
(on Standalone Basis) as against Rs. 4,766.10 Million (On Standalone
Basis) in the corresponding previous year.
The Profit before Tax stood at Rs. 447.57 Million (On Standalone Basis)
as compared to Rs. 225.00 Million (On Standalone Basis) during the
previous year.
On Consolidated Basis, your Company registered a growth of 9.75% during
the year under review by achieving a Sales Turnover of Rs. 8371.67
Million as against Rs. 7,627.57 Million during the previous year.
On Consolidated Basis, your Company recorded a Profit before Tax of Rs.
677.78 Million during the year under review as compared to Rs. 429.09
Million during the previous year.
QUALITY INTIATIVES
During the year Company is implementing Total Productive Maintenance
(TPM) across all plants to create a culture and environment to
continuously improve quality, cost and delivery parameters to meet and
exceed customer''s expectations. TPM practice has become a necessity
these days for improving the integrity of production and quality
systems through the machines, equipment, processes and employees, which
ultimately adds business value to the organization.
NEW PLANTS AND FACILITIES
During the year, a new Robotic plant of the Company was set up at Gut
No. 53, Waluj, Aurangabad for manufacturing Chassis and fabrication
parts etc. The plant has commenced manufacturing operations and
supplies of Chassis to Bajaj Auto Limited in January, 2015.
A detailed discussion on business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
SUBSIDIARY COMPANY
100% SUBSIDIARY - LUMAX DK AUTO INDUSTRIES LIMITED (LDK)
During the year under review, LDK has achieved net sales of Rs 2,448.25
Million as against Rs. 2,490.90 Million in the previous year. The
profit after tax declined to Rs. 119.83 Million from Rs. 128.18
Million.
During the year, the Pantnagar facility has received the BAVA Kaizen
Award for reduction in Customer Rejection, Optimum Resource and T2
Vendor Development, Quality Gold Award from Bajaj Auto Limited and
Quality Circle Award from CII.
LUMAX MANNOH ALLIED TECHNOLOGIES LIMITED (LMAT)
During the year under review, LMAT has reported an impressive growth of
142% by recording net sales of Rs 618.17 Million as against Rs. 255.38
Million in the previous year. The profit after tax has also increased
by 146% to Rs. 41.86 Million from Rs. 17.02 Million during the previous
year.
During the year, the Company has transferred 1,566,233 no. of equity
shares (equivalent to 45% equity holding) of LMAT to Mannoh Industrial
Co., Ltd., Japan pursuant to Joint Venture and Share Purchase and
Shareholders Agreement entered with the Company, Mannoh Industrial Co.,
Ltd., Japan, LDK and LMAT.
During the year, LMAT has received award for Technology Innovation from
VE Commercial Vehicles Limited.
JOINT VENTURE COMPANIES
LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
During the year under review, LCAT has reported growth of 29.62% by
recording net sales of Rs. 328.41 Million as against Rs. 253.36 Million
in the previous year. The profit after tax has also increased by 53.56%
to Rs. 20.70 Million from Rs. 13.49 Million during the previous year.
Presently, LCAT is supplying Air Intake System (AIS) to leading
automobile manufactures in India viz. Tata, Fiat, Volkswagen, Skoda &
General Motors and during the year it has received orders for
development of AIS for 2 new model platforms of Tata to be launched in
the next 2 years. In addition, 2 new model launches for Tata are
expected to be launched in Q2 & Q3 of FY 2015-16. New Enquiries have
also been received from VW & FIAT and efforts are also being put in the
right direction for developing new customers like Ford & Renault
Nissan.
The manufacturing facility at Chakan Industrial Area, Pune has started
pilot supplies of Exhaust System to Tata Motors for its Nano AMT model.
LCAT is also a nominated source for the Pelican model of Tata and
commercial production for the same will start from March/ April, 2016.
LCAT has now evolved as a full service provider for Automotive Air
Intake & Exhaust Systems. Further to complement its Vision, LCAT has
initiated development of local engineering capability with the support
of the Technology partner.
LUMAX GILL-AUSTEM AUTO TECHNOLOGIES PRIVATE LIMITED (LGAT)
During the year under review, LGAT submitted samples to its customer,
Lear India, for testing and approval. The overall testing process is
expected to be completed by Q2 of the financial year 2015-16 and LGAT
will start commercial production accordingly by Q3/Q4 of the financial
year 2015-16.
During the year under review, LGAT increased its authorized share
capital to Rs. 5 crores and both the Joint Venture Partners have
infused equity amounting to Rs. 21.88 Million each in the ratio of
50:50.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act, 2013 and
Articles of Association of the Company, Mr. Deepak Jain, Director is
retiring by rotation at the ensuing Annual General Meeting and being
eligible, offers himself for re-appointment.
The Board has appointed Mrs. Usha Jain as an additional director, in
the category of Women Director, w.e.f. August 08, 2014, for the time
being, on the Board of the Company subject to her regular appointment
in the Annual General Meeting.
Mrs. Usha Jain, aged 68 years, is a Science Graduate and has more than
25 years of rich experience and knowledge in Automotive Sector.
In accordance with the Articles of Association of the Company and the
Companies Act, 2013, Mrs. Usha Jain holds office till the ensuing
Annual General Meeting. The Company has received a Notice in respect of
Mrs. Usha Jain, from a member under Section 160 of the Companies Act,
2013 proposing her appointment as Director of the Company, liable to
retire by rotation.
The Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013.
Your Directors recommend the re-appointment/ appointment of the above
Directors at the ensuing Annual General Meeting.
The Board, on recommendation of Audit Committee, has appointed Mr.
Ashish Dubey, Finance Head as Chief Financial Officer (CFO) of the
company w.e.f. May 29, 2014. Mr. Ashish Dubey, aged 48 years, is a MBA
(Finance) from National Institute of Management (NIM), Pune, having
about 23 years of rich experience and knowledge in the field of
Accounts and Finance.
The Board has appointed Mr. Pratik Dhuri as the Company Secretary of
the Company w.e.f. April 7, 2014. Mr. Pratik Dhuri is an Associate
member of the Institute of Company Secretaries of India.
EXTRACTS OF ANNUAL RETURN
In accordance with the requirement of Section 92 of Companies Act, 2013
read with Rule 12 of the Companies (Management and Administration)
Rules, 2014, the extract of the annual return in Form MGT 9 is annexed
as Annexure - A.
NUMBER OF BOARD MEETINGS
The Board of Directors met 4 (Four) times in the Financial year
2014-15. The details of the board meetings and the attendance of the
Directors are provided in the Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act, 2013, the
Directors state:
(i) that in the preparation of the Annual Accounts for the Financial
Year ended 31st March, 2015, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures in the Auditor Report and Notes to Accounts;
(ii) that the Directors have selected such accounting policies and
applied them consistently and 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 at the end of the financial year and of the
profit and loss of the company for that period;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the Annual Accounts on a "going
concern" basis.
(v) the directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively.
(vi) the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
REMUNERATION POLICY
The Company follows a policy on remuneration of Directors and Senior
Management Employees. The Policy is approved by the Nomination &
Remuneration Committee and the Board. The Remuneration Policy is stated
in the Corporate Governance Report.
FIXED DEPOSITS
During the year under review, the Company has not accepted any Deposit
under Section 73 of the Companies Act, 2013 read with the Companies
(Acceptance of Deposits) Rules, 2014.
AUDITORS
STATUTORY AUDITORS
The members in their meeting held on July 23, 2014 had appointed M/s
S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors
of the Company for a period of 5 consecutive years in terms of the
provisions of Section 139 of the Companies Act, 2013 read with the
Companies (Audit and Auditors) Rules, 2014, to hold the office of
auditors till the conclusion of the sixth consecutive Annual General
Meeting of the Company to be held in the year 2019, subject to
ratification by the Members at every Annual General Meeting. Your
Directors recommends for ratification of their appointment in the
ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report
COST AUDITORS
The Board has re-appointed M/s Jitender, Navneet & Co. as the Cost
Auditors of the Company in accordance with Section 148 and other
applicable provisions, if any, of the Companies Act, 2013, for the
audit of the cost accounts of the Company for the Financial Year
2014-15. The Cost Audit Report for the Financial year 2013-14 has been
filed with the Central Government.
SECRETARIAL AUDITOR
Pursuant to the provisions of Section 204 of the Companies Act, 2013
read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed Mr. Milind Kasodekar,
Practicing Company Secretary, Partner, MRM Associates, Pune as the
Secretarial Auditor of the Company to undertake the Secretarial Audit
for the financial year 2014-15. The Report of the Secretarial Audit is
annexed herewith as Annexure - B.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments covered under the
provisions of section 186 of Companies Act, 2013 are given in the Notes
to financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company are prepared in
accordance with the Accounting Standards, Companies Act, 2013, Listing
Agreement and all other laws for the time being in force (if
applicable) and the same forms part of this Annual Report.
The Audited Financial Statements, including the Consolidated Financial
Statements and related information and audited accounts of subsidiaries
are available on the website of the Company i.e. www.lumaxautotech.com.
These documents shall also be available for inspection by any
shareholder at the registered office of the Company and subsidiaries.
RELATED PARTY TRANSACTION AND POLICY
All related party transactions entered during the financial year were
on arm''s length basis and were in the ordinary course of business. None
of the transactions with any of related parties were in conflict with
the Company''s interest. The particulars of contracts or arrangements
with related parties referred to in Section 188 of the Companies Act,
2013 in the prescribed Form AOC-2 is annexed herewith as Annexure - C.
All Related Party Transactions, which are foreseen and repetitive in
nature, are placed before the Audit Committee on a yearly basis for
obtaining prior omnibus approval of the committee. Prior omnibus
approval of the committee is also obtained for the transactions
which are not foreseen and specified details of transactions are not
available subject to their value not exceeding Rs. 1 (One) crore per
transaction. The transactions entered into pursuant to the omnibus
approval so granted are placed before the Audit Committee for its
approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company''s website. The Web link of the same is provided
here under:
http://www.lumaxautotech.com/downloads/related-party-transaction-
policy-28-05-2015.pdf
VIGIL MECHANISM
The Company has established a vigil mechanism named Whistle Blower
Policy, for directors, employees and business associates to report to
the management, concerns about unethical behaviour, actual or suspected
fraud or violation of the Company''s code of conduct or ethics policy,
in accordance with the provisions of Companies Act, 2013 and Listing
Agreement. The mechanism provides for adequate safeguards against
unfair treatment of employees who wishes to raise a concern and also
provides for direct access to the Chairman of the Audit committee in
appropriate/ exceptional cases. The Whistle Blower Policy is uploaded
on the website of the Company.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial
position of the Company have occurred between April 1,2015 and the date
on which this Report has been signed.
INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earning and
Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with
the Companies (Accounts) Rules, 2014, is annexed separately as Annexure
-D.
RISK MANAGEMENT POLICY
The Company has adopted an enterprise risk management policy and
established a risk management framework to identify, mitigate and
control the risks, which may threaten the existence of the Company, in
accordance with the provisions of Companies Act, 2013 and Listing
Agreement.
The Company accepts a level of risk in achieving its goals, however,
sound risk management helps it to make the most of each business
opportunity and enables the Company to be resilient and respond
decisively to the changing environment.
The Company has also constituted a Risk Management Committee. The
Committee reviews the risk trend, exposure and potential impact
analysis carried out by the Internal Auditors of the Company. The
Committee also finalises the risk mitigation plans, identify the risk
owners and monitor the progress of mitigation actions.
The Board, Audit committee and Senior management periodically reviews
the risk trend, exposure and potential impact analysis carried out by
the Internal Auditors of the Company to gain assurance that risks are
being managed within approved risk levels.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
Your Company has been undertaking CSR activities through Lumax
Charitable Foundation, a Trust set up by the Group Company. The key
focus areas of your Company are education and the wellbeing of
disadvantaged section of the society.
The Company has constituted a CSR Committee of the Board and also
developed & implemented a CSR Policy in accordance with the provisions
of Companies Act, 2013.
As part of its CSR initiatives, the Company has undertaken projects in
the areas of Education and Healthcare for the disadvantaged children of
the society. These projects are largely covered under Schedule VII of
the Companies Act, 2013. During the year, the Company supported the
schools by way of providing financial support in terms of fees of girl
children, contributing towards infrastructure and other facilities for
students in the school. Towards its healthcare initiatives, the Company
is focussing on preventive healthcare by continuously organising health
check-up camps and partnering in special drives organised by various
agencies for this cause.
The Company''s spend on CSR activities is around one percent of the
average net profits during the three immediately preceding financial
years. The company is planning to scale up its CSR activities in phased
manner in the coming years. The Annual Report on CSR activities is
annexed herewith as Annexure-E.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
The Nomination and Remuneration Committee lays down the criteria for
performance evaluation of independent directors and other directors,
Board of Directors and Committees of the Board of Directors. The
criteria for performance evaluation cover the areas relevant to their
functioning as independent directors or other directors, member of
Board or Committees of the Board.
The Board has established a formal process, on the recommendation of
Nomination and Remuneration Committee, for the annual evaluation of the
performance of the Board. This includes the completion of a
questionnaire designed and approved by the Board to provide a framework
for the evaluation process. It is the role of the committee to
summarise the responses and present the same to the Board. The
committee also undertake a similar evaluation process of the committees
of the Board.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - F.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators /
Courts / Tribunals, which would impact the going concern status of the
Company and its future operations.
INTERNAL FINANCIAL CONTROL
The Company has a comprehensive internal control system for all the
major processes to ensure reliability of financial reporting, timely
feedback on achievement of operational and strategic goals, compliance
with policies, procedures, laws and regulations, safeguarding of assets
and economical and efficient use of resources.
The monitoring and reporting of finance systems is supported by a
web-based system SAP Through this system, the Company undertakes an
overview of income, expenditure, as well as commitments (labour
contracts, procurement in progress, etc.) at all levels of the
organization.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor''s
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure - G.
PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section 197
of the Companies Act, 2013 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
forms an integral part of this report as Annexure - H.
The information required pursuant to section 197 of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of your Company is available for inspection by the members at
the registered office of the Company during business hours on working
days up to the date of ensuing Annual General Meeting. If any member is
interested in obtaining a copy thereof, such member may write to the
Company Secretary, whereupon a copy would be sent.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for the continued
co-operation and support extended to the Company by its highly valued
customers, Joint Venture Partners, all other business partners, all the
shareholders, Financial institutions, Banks, Vendors and various
Government Agencies with whose help, cooperation and hard work the
Company is able to achieve the results.
The Board deeply acknowledges the co-operation and commitment rendered
by all the associates and employees of the Company for their
contribution and support for the growth of the Company.
For and on behalf of the Board of Directors
Place: Gurgaon D. K. JAIN
Dated: May 25, 2015 CHAIRMAN
DIN:00085848
Mar 31, 2013
To The Members,
The is a great privilege for your Directors to present the 32nd Annual
Report on the business and operations together with Audited Balance
Sheet and Statement of Profit & Loss of your Company for the year ended
March 31, 2013.
FINANCIAL RESULTS
Your Company''s performance during the year as compared with the
previous year is summarized below:
(Rs. in Million)
PARTICULARS 2012-13 2011-12
Sales (Excluding Excise Duty) 4328.52 4366.05
EBITDA 368.06 374.97
Finance Expenses 1.55 2.28
Depreciation 39.38 31.59
Profit Before Taxation (PBT) 327.13 341.10
Provision for Taxation, Deferred Tax 104.15 106.82
Profit After Tax (PAT) 222.98 234.28
Balance of Profit brought forward 200.21 84.49
Balance Available for Appropriation 423.19 318.77
Proposed Equity Dividend 81.79 81.79
Corporate Dividend Tax 13.90 13.27
Transfer to General Reserve 22.30 23.50
Balance carried forward to Balance Sheet 305.20 200.21
423.19 318.77
Dividend (%) 60 60
Basic and Diluted earning per Share (EPS) Rs. 16.36 17.19
DIVIDEND
Keeping in view of the philosophy of the Company to reward its
shareholders, the Board of Directors are pleased to recommend a
Dividend of 60% (Rs. 6/- per equity share) for the Financial Year
2012-13 (Rs. 6/- previous year). The total amount of Dividend proposed
to be distributed and tax thereon aggregates is Rs. 95.69 Million. The
Dividend payout ratio comes to 43%.
An amount of Rs. 22.30 Million is proposed to be transferred to General
Reserve of the Company. This reaffirms the inherent financial
sustainability of your company.
BUSINESS PERFORMANCE
The recent slowdown in the automobile industry for two consecutive
years has raised concerns on the long-term growth prospects of the
Indian automobile industry. Taking a closer look at the key factors
affecting demand over the last few years, it is believed that some of
these trends are reversing and the demand for automobiles will revive
in the near term. However, the recovery may not be sharp.
Income and the cost of ownership - two key factors affecting demand for
passenger vehicles, and both were negatively impacted during the last
two years. These factors typically act counter cyclically, resulting in
relatively stable growth for the industry. Post June 2010, the cost of
ownership has risen sharply on account of deregulation of petrol
prices. This along with the economic slowdown has resulted in a sharp
decline in industry growth. The overall Indian Automobile Industry
recorded a production growth of 1.20% in 2012-13 by producing around
20.62 million vehicles, majorly driven by demand for utility vehicles
and two wheelers.Going forward, while economic recovery is likely to be
weak, cooling of petrol prices and interest rates would support demand
in 2013-14.
After rising by about 30% in 2009-10 and 2010-11, auto component
production growth slowed down gradually, dropping to 13% in 2011-12. In
2012-13, the sector''s revenue growth decelerated sharply to a 5 year
low of 2-4% (last seen in 2008-09). Lackluster demand from automobile
OEMs (which account for 70% of auto component demand) pulled down
growth. Growth in exports is also estimated to have slowed to 0-3%
y-o-y in 2012-13 on a higher base (41 % in 2011-12) and also due to
lower demand for key markets.1
In this backdrop, during the year under review, your Company has
achieved Sales Turnover (Net of Excise) of Rs. 4,328.52 Million (on
Standalone Basis) as against Rs. 4366.05 Million (on Standalone Basis)
in the corresponding previous year.
The Profit before Tax stood at Rs. 327.13 Million (on Standalone Basis)
as compared to Rs. 341.10 Million (on Standalone Basis) during the
previous year.
On Consolidated Basis, your Company registered a growth of 2% during
the year under review by achieving a Sales Turnover (net of excise) of
Rs. 7663.04 Million as against Rs. 7503.00 Million during the previous
year.
On Consolidated Basis, your Company recorded a Profit before Tax of Rs.
594.02 Million during the year under review as compared to Rs. 617.99
Million during the previous year.
Though this is overall tough year for the Auto Industry, a moderate
growth is achieved in supply of the certain products of the company
such as Blinker, Head Lamp, Rear Fender, Chassis and Seat Frames etc.
During the year under review, the company has started supply to Lear
for their GM S2 Model and to Tata Johnson for Tata X1 model. After
Market division registered a significant growth over the years, which
is a result of its continues expansion of the network and focus on
enhancement of its product range which is a blend of company''s
manufactured products i.e. lighting and outsourced i.e. filters, rear
view mirrors, electronic items and other auto components. These are
distributed in domestic & international market as well.
During the year under review, Company awarded by Lear Corporation with
the trophy for the Best Development and Excellent Support for new
launch.
Also, the Companys'' Chakan unit has received prestigious "Bronze
Award" for Quality by Bajaj Auto at the BAVA Waluj Convention for
maintaining ZERO PPM for last 6 months i.e. from October 2013 to March
2013.
NEW PLANTS AND FACILITIES
The Robotic Frame Welding plant at Waluj, Aurangabad has commenced
manufacturing operations in November, 2012.
Further, your company is in the final stages of setting up a dedicated
manufacturing facility at Narsapur, Hobli, Karnataka with an estimated
Project cost of Rs.800 Million, for supply of plastic moulded parts to
Honda Motorcycle & Scooters India (HMSI) for its various models, to be
manufactured at their new facility at Bangalore. The said facility is
expected to become operational by July, 2013.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion and Analysis Report
(MDA).
SUBSIDIARY COMPANY 100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED
(LDK)
During the year under review, LDK has achieved net sales revenue of Rs.
3,238.65 Million as against Rs. 3106.57 Million in the previous year,
showing a growth of 4 %. The Profit after Tax has however declined to
Rs. 184.65 Million from Rs. 270.78 Million mainly due to higher income
tax (Being Pantnagar facility shifted to 30% tax exemption from earlier
100%) and increase in deferred tax (due to higher capital investment
during the year under review).
The Gear Shifter Division has received prestigious "Focused Cost Down
Award" for Quality and best localization from M/s Maruti Suzuki India
Limited and the "Yellow Belt Award" from Mahindra and Mahindra
Limited for the year 2012-13.
The Pantnagar facility has received the JIPM TPM Excellence award from
Japan Institute of Plant Maintenance (JIPM) possibly the first
automotive lighting plant to achieve the same. This is one of the most
significant achievements within Lumax group historically. The said
facility has also received the Bajaj TPM excellence, Bajaj Quality
Silver & Appreciation award from Bajaj Auto Limited.
During the year under review, LDK has acquired the 100% shares of M/s
Lumax DK Electric Engineering India Private Limited (formerly known as
Stanley Electric Engineering India Private Limited) for the expansion
of its existing facility at Manesar.
JOINT VENTURE COMPANY
LUMAX CORNAGLIAAUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
During the year under review, LCAT has reported an impressive growth of
97% by recording net sales of Rs. 225.08 Million as against Rs. 114.38
Million in the previous year. The Profit after Tax has also increased
by 90% to Rs. 8.42 Million from Rs. 4.43 Million during the previous
year.
Presently, LCAT is supplying Air Intake System (AIS) to leading
automobile manufacturers in India viz. TATA, FIAT, VOLKSWAGEN, SKODA &
GENERAL MOTORS and during the year it has received LOI for Development
of AIS for 2 new programs of Tata Motors, proto supplies for which have
already been effected. LCAT has also started manufacturing & supplying
CAC Ducts for General Motors SII (SAIL) platform.
LCAT is in the process of setting up a manufacturing facility at Chakan
Industrial Area, Pune, Maharashtra, for supply of Exhaust System to
Tata Motors Limited for its Nano diesel models. However, due to delay
in customer program SOP, commercial production will start in 2014.
The Joint Venture partners had decided to invest Rs. 30 Million in the
Exhaust System facility in phased manner by way of equity & debt (1:1),
out of which Rs. 15 Million has already been invested by way of equity
in the FY 2012-13 & Rs. 15 Million will be invested through debt in FY
2013-14.
LCAT is truly on course to achieve its VISION - 2015 i.e. to become a
full service provider for Automotive Air Intake & Exhaust Systems with
the application of innovative and cost effective solutions that will
add value to the customers as well as to the organization.
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and Articles
of Association of the Company Mr. Anmol Jain and Mr. Sandeep Dinodia,
Directors of the Company are retiring by rotation at the ensuing Annual
General Meeting and being eligible, offer themselves for
re-appointment.
Your Directors recommend the re-appointment of the above said Directors
at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, the
Directors state:
(i) That in the preparation of the Annual Accounts for the Financial
Year ended March 31, 2013, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and 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 at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the annual accounts on a going
concern basis.
FIXED DEPOSITS
During the year under review the Company has not accepted any Deposit
under Sections 58A and 58AA of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s D. R. Barve & Co, Chartered Accountants, having Firm Registration
Number FRN 101034W, are proposed for re-appointment as Statutory
Auditors of the Company, from the conclusion of the ensuing Annual
General Meeting till the conclusion of the next Annual General Meeting.
They have given their consent to act as Auditors of the Company and
have further confirmed that their appointment, if made, would be in
conformity with the provisions of Section 224(1 B) of the Companies
Act, 1956. The Board recommends their re- appointment for the approval
of the Members in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report.
COST AUDITORS
As per the provisions of Section 233B of the Companies Act, 1956 and in
accordance with the Order F. No. 52/26/CAB-2010 dated January 24, 2012
issued by the Ministry of Corporate Affairs, audit of the Company''s
cost accounts has been made compulsory in respect of each of its
financial year commencing on or after the April 01, 2012.
In conformity with the above order, the Company has appointed M/s
Jitender, Navneet & Co., Cost Accountants having Firm Registration
Number 000119, as the Cost Auditors for the audit of the cost accounts
of the Company for the Financial Year 2012-13. The due date of filing
the cost audit report for the financial year 2012-13 is September 30,
2013. The report will be filed within the stipulated period.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared in
accordance with the Accounting Standards, Companies Act, 1956 and all
other laws for the time being in force (if applicable) and the same
forms part of this Annual Report.
Further, in accordance with the Circular issued by Ministry of
Corporate Affairs (MCA), granting the general exemption from the
provisions of Section 212 of the Companies Act, 1956, your Company is
not attaching the Annual Accounts for the year ended March 31, 2013 and
other related documents of its subsidiary Company Lumax DK Auto
Industries Ltd (LDK) with this Annual Report. Any shareholder
interested in obtaining a copy of the Annual Accounts of LDK may write
to the Company Secretary at the registered office of the Company and
the company undertakes to supply the same along with all related
detailed information. In addition, the Company shall also keep the same
Annual Accounts for inspection by any shareholder at the registered
office of the Company and LDK.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial
position of the Company have occurred between April 1, 2013 and the
date on which this Report has been signed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - A.
OTHER INFORMATION
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earnings and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is
annexed separately as Annexure - B.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor''s
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure C.
PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of employees) Rules, 1975 forms an integral part of this report.
However, as per the provisions of Section 219(1 )(b)(iv) of the
Companies Act, 1956, the Annual Report is being sent to the
shareholders of the Company excluding the Statement of Particulars of
employees under Section 217(2A) of the Companies Act, 1956. Any
shareholder interested in obtaining a copy of such statement may write
to the Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
Your Directors place on record their sincere thanks to all its highly
valued customers, its Technical Collaborators, Joint Venture Partners,
all other business partners, all the Shareholders, Financial
Institutions, Banks, Vendors and various Government agencies for the
assistance, co-operation and encouragement they extended to the
Company.
The Board would also like to acknowledge the co-operation and
commitment rendered by all the associates and employees of the Company
for their unstinted support shown during these challenging times.
For and on behalf of the Board of Directors
Place : Gurgaon D. K. JAIN
Dated : May 28, 2013 CHAIRMAN
Mar 31, 2012
The is a great privilege for your Directors to present the 31st Annual
Report on the business and operations together with Audited Balance
Sheet and Statement of Profit & Loss of your Company for the year ended
March 31, 2012.
FINANCIAL RESULTS
Your Company's performance during the year as compared with the
previous year is summarized below:
(Rs. in Million)
PARTICULARS 2011 - 12 2010 - 11
Sales (Net of Excise Duty) 4,377.88 3,408.05
Gross Profit (GP) 376.11 300.21
(-) Finance Expenses 3.43 5.20
(-) Depreciation 31.58 27.44
Profit Before Taxation (PBT) 341.10 267.58
(-) Provision for Taxation &
Deferred Tax 106.82 88.60
Profit After Tax (PAT) 234.28 178.99
( ) Balance in the Statement of P&L b/f 84.49 18.50
Profit for Appropriation 318.77 197.49
Appropriation :
Proposed Equity Dividend 81.79 81.79
Tax on Dividend 13.27 13.27
Transfer to General Reserve 23.50 17.94
Balance retained in the
Statement of P&L 200.21 84.49
318.77 197.49
DIVIDEND
Keeping in view of the remarkable financial performance during the year
under review as also the philosophy of your Company to reward its
shareholders, the Board of Directors are pleased to recommend a
Dividend of 60% (Rs. 6/- per equity share) for the Financial Year
2011-2012 (Rs. 6 per share for the previous year). The total amount of
Dividend proposed to be distributed and tax thereon aggregates to Rs.
95.06 Million (including Dividend Tax). The Dividend payout ratio comes
to 41%.
An amount of Rs. 23.50 Million has been transferred to the General
Reserve of the Company. This reaffirms the inherent financial strength
of your Company.
BUSINESS PERFORMANCE
After a strong performance in FY 2010-11, the Indian economy showed
signs of slowdown in FY 2011-12, due to inflationary pressures. The
year also witnessed a sharp deceleration in manufacturing activity
mainly due to monetary tightening, weak external demand and lack of
investment activity. However, the Indian automotive industry has marked
impressive growth in the last fiscal despite weak global macroeconomic
fundamentals. The overall Indian automobile industry recorded a
production growth of 13.83% in 2011-12 by producing 20.37 million
units, majorly driven by demand for two-wheelers and light commercial
vehicle.
In this backdrop, your Company also registered a growth of 28.46%
during the year under review by achieving a Sales Turnover (Net of
Excise) of Rs. 4,377.88 Million (on Standalone Basis) as against
Rs.3,408.05 Million (on Standalone Basis) in the corresponding previous
year.
The Profit before Tax increased to Rs. 341.10 Million (on Standalone
Basis) from Rs. 267.58 Million (on Standalone Basis) resulting a 27.48%
rise, as compared to the previous year.
On Consolidated Basis, your Company registered a growth of 20% during
the year under review by achieving a Sales Turnover (net of excise) of
Rs. 7,514.84 Million as against Rs. 6,266.92 Million during the previous
year.
On Consolidated Basis, your Company recorded a Profit before Tax of Rs.
617.99 Million during the year under review as compared to Rs. 548.24
Million during the previous year, registering a growth of 12.72%.
Like other auto-component manufacturers, your Company also caters not
only to the OEMs, but also to the after-sales market. A significant
contribution to the turnover was mainly attributed by an outstanding
performance of your Company in supplies of various lighting parts,
Chassis and other Fabrication products to OEM's. The after market
segment also registered a significant growth. In recent years, company
has focused on new part requirements for OEM's, therefore your Company
has achieved excellent results this year from the same.
The significant contribution for the growth was mainly attributed to
sale of Chassis from Waluj Plant, Lighting parts from Chakan and
Bhosari plants and Seat Frames from PCNTDA units to execute the strong
orders book from its various customers and a growth of 25% in after-
market sales of the Company over the previous year.
NEW BUSINESS AND FACILITIES
During the year under review, your company has successfully diversified
into the business of Electronic Manufacturing with the setting up of
State-of-the-art Surface Mounted Technology (SMT) line. This will
primarily cater for all our Light Emitting Diodes (LED) based Printed
Circuit Board (PCB) assemblies requirements for Auto lamps, LED
Destination boards and venturing into non-Auto fields.
Further, your Company is also in the process of setting up new Robotic
Frame Welding plant in Waluj, Aurangabad. The welding process requires
skilled manpower and in present industry scenario it is very difficult
to get and retain skilled manpower. Considering the stringent quality
requirement, your Company has decided to set up a state of the art
manufacturing facility having 7 robotic stations. With this robotic
line 75% welding work will be done through robo, which will result into
70% less dependency on skilled manpower. The said facility is expected
to become operational by the next year.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion and Analysis Report
(MDA).
SUBSIDIARY COMPANY
100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)
During the year under review LDK has achieved net sales revenue of Rs.
3,106.57 Million as against Rs. 2,838.58 Million during the previous
year, showing a growth of 9.44%. However, the Profit Before Tax has
marginally declined to Rs. 273.59 Million from Rs. 276.38 Million during
the previous year.
Further, the Gear Shifter Division has received "Overall Performance
Award" for Supplies and Quality and "Best localization supplier award"
for the year 2011-12 from Maruti Suzuki India Limited.
JOINT VENTURE COMPANY
LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
During the year under review LCAT has reported an impressive growth of
28.59% by recording net sales of Rs. 114.38 Million as against Rs. 88.95
Million for the previous year. The Profit before Tax has declined to Rs.
6.62 Million from Rs. 8.57 Million for the previous year mainly on
account of forex loss.
Presently, LCAT is supplying Air Intake System (AIS) to four leading
automobile manufacturers in India viz. TATA, FIAT, VOLKSWAGEN (VW) &
SKODA and during the year it has supplied Prototype parts of AIS to
General Motors India & Exhaust System to Tata Motors. LCAT has also
started manufacturing & supplying 3D Blow Moulded Ducts to FIAT,
thereby making itself a single source for all current programs. LCAT
has also received orders from General Motors India (GM) for AIS and CAC
Ducts for new Commercial & Passenger Vehicle programs. LCAT has, at
the same time received RFQ for Exhaust systems from Tata Motors
Passenger Car segment.
Further, regular supply of Exhaust Systems to Tata Motors will be
started in F.Y.2012-13 for Nano Europa & Nano Diesel programs.
LCAT has a VISION - 2015, to become a full service provider for
Automotive Air Intake & Exhaust Systems with the application of
innovative and cost effective solutions that will add value to the
customers as well as to the organization.
The Joint venture partners have invested Rs. 45.00 Million in the 3D Blow
Moulding Plant for Intake & CAC Ducts in phased manner in two tranches,
out of which the second tranche of Rs. 25.00 Million was invested in the
FY 2011-12 by way of equity. LCAT has already secured orders for the
Intake Ducts & CAC Ducts from TATA, VW & GM.
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and Articles
of Association of the Company Mr. Manmohan Sachdev and Mr. A.V.
Alexander, Directors of the Company are retiring by rotation at the
ensuing Annual General Meeting and being eligible, offer themselves for
re-appointment.
Your Directors recommend the re-appointment of the above said Directors
at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, the
Directors state:
(i) That in the preparation of the Annual Accounts for the Financial
Year ended March 31, 2012, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and 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 at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the Annual Accounts on a "going
concern" basis.
FIXED DEPOSITS
During the year under review the Company has not accepted any Deposit
under Sections 58A and 58AA of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s D. R. Barve & Co, Chartered Accountants, having its Firm
Registration Number FRN 101034W, are proposed for re-appointment as
Statutory Auditors of the Company, from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. They have given their consent to act as Auditors of the
Company and have further confirmed that their appointment would be in
conformity of the provision of Section 224(1B) of the Companies Act,
1956. The Board recommends their re-appointment for the approval of the
Members in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared in
accordance with the Accounting Standard, Companies Act, 1956 and all
other laws for the time being in force (if applicable) and the same
forms part of this Annual Report.
Further, in accordance with the Circular issued by Ministry of
Corporate Affairs (MCA), granting the general exemption from the
provisions of Section 212 of the Companies Act, 1956, your Company is
not attaching the Annual Accounts for the year ended March 31, 2012 and
other related documents of its subsidiary Company Lumax DK Auto
Industries Ltd (LDK) with this Annual Report. Any shareholder
interested in obtaining a copy of the Annual Accounts of LDK may write
to the Company Secretary at the registered office of the Company and
the company undertakes to supply the same along with all related
detailed information. In addition, the Company shall also keep the same
Annual Accounts for inspection by any Shareholders in the registered
office of the Company and LDK.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial
position of the Company have occurred between April 1, 2012 and the
date on which this Report has been signed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - A.
OTHER INFORMATION
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earnings and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is
annexed separately as Annexure - B.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor's
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure - C.
PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of employees) Rules, 1975 forms an integral part of this report.
However, as per the provisions of Section 219(1)(b)(iv) of the
Companies Act, 1956, the Annual Report is being sent to the
shareholders of the Company excluding the Statement of Particulars of
employees under Section 217(2A) of the Companies Act, 1956. Any
shareholder interested in obtaining a copy of such statement may write
to the Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to all its highly valued
customers, its Technical Collaborators, Joint Venture Partners, all
other business partners, all the Shareholders, Financial Institutions,
Banks, Vendors and various Government agencies for the assistance, co-
operation and encouragement they extended to the Company.
The Directors of your Company also wish to place on record their deep
sense of appreciation for the dedicated and sincere services rendered
by the executives, staff and workers of the Company.
For and on behalf of the Board of Directors
Place: Gurgaon D. K. JAIN
Dated: May 30, 2012 CHAIRMAN
Mar 31, 2011
To The Members,
The Directors are delighted to present the 30th Annual Report on the
business and operations together with Audited Balance Sheet and Profit
& Loss Account of your Company for the year ended March 31, 2011.
FINANCIAL RESULTS
Your Company's performance during the year as compared with the
previous year is summarized below:
Rupees in Lacs
Particulars 2010-11 2009-10
Sales (Excluding Excise Duty) 34,080.47 22,702.74
Gross Profit (GP) 3,002.16 1,283.51
(-) Finance Expenses 51.95 136.10
(-) Depreciation 274.40 270.68
Profit Before Taxation (PBT) 2,675.81 876.73
(-) Provision for Taxation & Deferred Tax 885.97 199.25
Profit After Tax (PAT) 1,789.84 677.48
( ) Balance in the P&L A/c b/f 185.07 69.32
Profit for Appropriation 1,974.91 746.80
Appropriation :
Proposed Equity Dividend :
(For 2009 - 10,Include Interim
Dividend of Rs.116.32 Lacs) 817.90 465.26
Tax on Dividend 132.68 28.72
Transfer to General Reserve 179.43 67.75
Balance retained in P & L Account 844.91 185.07
1974.91 746.80
DIVIDEND
Keeping in view of the remarkable Financial Performance during the year
under review, as also the philosophy of your Company to reward its
shareholders, the Board of Directors are pleased to recommend a
Dividend of 60% (Rs.6/- per Equity Share) for the Financial Year
2010-2011 as against 40% (including 10% Interim Dividend) for the
corresponding last year. The total amount of Dividend proposed to be
distributed and tax thereon aggregates to Rs. 950.58 Lacs (including
Dividend Tax) as against Rs.493.98 Lacs. The Dividend payout ratio
comes to 53%.
A sum of Rs. 179.43 Lacs has been transferred to the General Reserve of
the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
IndiaÃs economic scenario has passed through a systematic transition
from being a closed to an open economy since the beginning of economic
reforms in 1991. These reforms have had a far-reaching impact and have
unleashed its enormous growth potential. Today, the Indian economy has
grown to become a trillion dollar economy with a largely
self-sufficient agricultural sector, a diversified industrial base and
a stable financial and services sector.1
After the gloom of global economic crisis, Indian economy has well
recovered at a steady pace during the last Financial Year (FY) 2010-11
2 and has so far vastly exceeded expectations. Apparently, the Gross
Domestic Product (GDP) is estimated to have grown at 8.60% during the
FY 2010-11 (in real terms) and further is likely to touch the figure of
9.00% during the next FY 2011-12.3
Consequently, due to strong linkages with the economy, introduction of
the liberalization policy, various tax reliefs by the Government of
India and rapid growth in industrialization process in recent years,
the Indian Automobile Industry has made a remarkable growth. It has
recorded a noteworthy Production Growth of 27%, as compared to the last
year. India is expected to become the world's 7th largest automobile
market by 2016 and third largest by 2030. Further, the total sales are
expected to reach US$ 120 -160 Billion by 2016 and the investment
requirement is estimated to be US$ 35-40 Billion.4
1. Book on Doing Business in India by Ernst & Young, India (E&Y)
2. Economic Survey 2010-2011
3. Dun & Bradstreet Sectoral Outlook Report 2011-12
4. Book on Doing Business in India by Ernst & Young, India (E&Y)
Surge in the automobile Industry since the nineties has also led to
robust growth of the auto component sector in the country. In tandem
with the Industry trends, the Indian auto component Sector has shown
great advances in recent years in terms of growth, spread, absorption
of new technologies and flexibility. Indian auto component industry has
seen major growth with the arrival of world vehicle manufacturers from
Japan, Korea, U.S.A and Europe. Today, India is emerging as one of the
key auto components center in Asia and is expected to play a
significant role in the global automotive supply chain in the near
future. As per ACMA Vision 2020 for India the Indian Auto Component
Industry is expected to grow beyond US $ 110 billion by 2020 from the
current level of around US $ 26 Billion in 2010-11.
In the above backdrop, during the year under review your Company has
registered a remarkable growth of 50% in top line which is much above
the industry growth, by achieving a Sales Turnover (Net of Excise) of
Rs. 34,080.47 Lacs (on Standalone Basis) as against Rs. 22,702.74 Lacs
(on Standalone Basis) in the corresponding previous year, much above
the industry growth.
The Profit Before Tax (PBT) reported for the current year increased to
Rs. 2,675.81 Lacs (on Standalone Basis) from Rs. 876.73 Lacs (on
Standalone Basis) as compared to previous year, resulting 205% rise, as
compared to the previous year.
On Consolidated Basis, your Company registered a growth of 49% during
the year under review by achieving a Sales Turnover (net of excise) of
Rs. 62,669.15 Lacs as against Rs. 42,076.54 Lacs in the corresponding
previous year.
On consolidated basis your Company has recorded a Profit Before Tax
(PBT) of Rs. 5,482.56 Lacs for the year under review as against Rs.
2,907.33 Lacs as compared to the corresponding previous year,
registering a growth of 89%.
SUBSIDIARY COMPANY
100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)
During the year under review LDK has reported an impressive growth of
49% by recording net sales of Rs 28,385.78 Lacs as against Rs.19,112.66
Lacs as compared to the previous year. The Profit after Tax has also
grown by 43% to Rs. 2,731.40 Lacs from Rs. 1,903.54 Lacs over the
previous year.
The Gear Shifter Division has received prestigious Gold Award for
Design & Development for the year 2010-11 from the customer Maruti
Suzuki and best localization supplier award from Toyota Kirloskar for
its small car "ETIOS".
JOINT VENTURE COMPANY
LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
During the year under review LCAT has reported an impressive growth of
24% by recording net sales of Rs 889.50 Lacs as against Rs.714.89 Lacs
for the previous year. The Profit after Tax has also grown by 23% to
Rs. 60.31 Lacs from Rs. 49.15 Lacs over the previous year.
Presently, LCAT is supplying Air Intake System (AIS) to two leading
automobile manufactures in India viz. TATA & FIAT and during the year
it has also started supplying AIS to two new world renowned Automobile
manufactures viz. VOLKSWAGEN & SKODA, thereby making itself a single
source for all the new programs. LCAT has also received orders from
General Motors India for the development of AIS and CAC Ducts for a new
Commercial Vehicle program, from FIAL for development of Oil Vapor
separator and from Piaaggio, India, RFQ for Air Intake System for Vespa
Scooter.
Further, it has initiated discussion with Tata Motors for development
of complete Exhaust Systems for the Nano Europa & Nano Diesel programs.
A formal LOI is expected very soon.
LCAT has a VISION - 2015, to become a full service provider for
Automotive Exhaust & Air Intake Systems with the application of
innovative and cost effective solutions that will add value to the
customers as well as to the organization.
During the year the Joint venture partners have proposed to make an
investment of Rs. 40 Mn in the 3D Blow Moulding Project for Intake &
CAC Ducts in phased manner by way of equity, out of which Rs. 20 Mn has
already been invested by the Joint Venture Partners in January, 2011.
LCAT has already secured orders for the Intake Ducts from TATA, FIAT,
VW & GM.
DIRECTORS
In accordance with the provisions of Companies Act, 1956 and Articles
of Association of the Company Mr. Sandeep Dinodia and Mr. D.D.Gupta,
Directors are retiring by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves for re-appointment.
Your Directors recommend the re-appointment of the above said Directors
at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, the
Directors state:
(i) That in the preparation of the Annual Accounts for the Financial
Year ended March 31, 2011, the applicable Accounting Standards have
been followed along with proper explanation relating to material
departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and 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 at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the Annual Accounts on a "going
concern" basis.
FIXED DEPOSITS
During the year under review the Company has not accepted any Deposit
under Sections 58A and 58AA of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s D. R. Barve & Co, Chartered Accountants, having its Firm
Registration Number FRN 101034W, are proposed for re-appointment as
Statutory Auditors of the Company, from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. They have given their consent to act as Auditors of the
Company and have further confirmed that their appointment would be in
conformity of the provision of Section 224(1B) of the Companies Act,
1956. The Board recommends their re-appointment for the approval of the
Members in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company are prepared in
accordance with the Accounting Standard, Companies Act and all other
laws for the time being in force (if applicable) and the same forms
part of this Annual Report.
Further, in accordance with the Circular issued by Ministry of
Corporate Affairs (MCA), granting the general exemption from the
provisions of Section 212 of the Companies Act, 1956, your Company is
not attaching the Annual Accounts for the year ended 31st March 2011
and other related documents of its subsidiary Company Lumax DK Auto
Industries Ltd (LDK) with this Annual Report. Any shareholder
interested in obtaining a copy of the Annual Accounts of LDK may write
to the Company Secretary at the registered office of the Company and
the company undertakes to supply the same along with all related
detailed information. In addition, the Company shall also keep the same
Annual Accounts for inspection by any Shareholders in the registered
office of the Company and LDK.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - A.
OTHER INFORMATION
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earnings and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is
annexed separately as Annexure - B.
Information of Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 forms an integral part of this report. As per
the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
Report and Accounts are being sent to the shareholders of the Company
excluding the Statement of Particulars of Employees under Section
217(2A) of the Companies Act, 1956. Any shareholder interested in
obtaining a copy of such statement may write to the Company Secretary
at the registered office of the Company and the same is also available
for inspection in accordance with the provision of Section
219(1)(b)(iv) of the Companies Act, 1956.
GROUP
Pursuant to the intimation from the Promoters, the names of the
Promoters and entities comprising 'Group' are disclosed in the Annual
Report as Annexure C, for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditor's
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure D.
ACKNOWLEDGEMENT
The Directors wish to place on record their sincere thanks to all its
highly valued customers, its Technical Collaborators, Joint Venture
Partners, all other business partners, all the Shareholders, Financial
Institutions, Banks, Vendors and various Government agencies for their
continued support and patronage.
The Board would also like to acknowledge the co-operation & commitment
rendered by all the associates & employees of the Company for their
unstinted support shown during these challenging times.
For and on behalf of the Board of Directors
D. K. JAIN
CHAIRMAN
Place : Gurgaon
Dated : 27th May, 2011
Mar 31, 2010
The Directors are delighted to present the 29th Annual Report on the
business and operations together with Audited Balance Sheet and Profit
& Loss Account of your Company for the year ended 31st March, 2010.
FINANCIAL RESULTS
Your Companys performance during the year as compared with the
previous year is summarized below:
Rupees in Lacs
Particulars 2009-10 2008-09
Sales (Excluding Excise Duty) 22,702.74 16,126.43
Gross Profit (GP) 1,283.50 398.68
(-) Finance Expenses 136.10 139.83
(-) Depreciation 270.68 203.45
Profit Before Taxation (PBT) 876.73 55.40
(-) Provision for Taxation, Deferred
Tax & FBT 199.24 (1.77)
Profit After Tax (PAT) 677.48 57.17
(+) Balance in the P&L Account B/F 69.32 221.72
(-) Prior Period Adjustment - 2.45
Profit for Appropriation 746.80 276.44
Appropriation :
Proposed Equity Dividend :
(For 2009 - 10,Include Interim Dividend
of Rs.116.32 Lacs) 465.26 174.47
Tax on Dividend (Net of Dividend Tax
Set off) 28.72 29.65
Transfer to General Reserve 67.75 3.00
Balance retained in P & L Account 185.07 69.32
DIVIDEND
As members are aware that during the year under review, your Directors
have declared and paid an Interim Dividend of 10% (Re.1 per Equity
Share). Now, your Directors are pleased to recommend a Final Dividend
of 30% (Rs.3/- per equity share) in addition to the interim dividend
for the Financial Year ended March 31, 2010, subject to the approval of
the shareholders at the ensuing Annual General Meeting of the Company.
The total amount of Dividend proposed to be distributed and tax thereon
aggregates to Rs. 493.98 Lacs (including Dividend Tax) as against
Rs.204.12 Lacs in the previous year. The Dividend payout ratio comes to
72.91 %.
An amount of Rs.67.75 Lacs is proposed to be transferred to General
Reserve.
BUSINESS PERFORMANCE
Despite the shadows of global economic crisis continuing to cast a pall
of gloom, current fiscal markers indicate that the Indian economy is on
the verge of a strong comeback. The fundamentals of the economy are
robust, the positives from recent performance outweigh the negatives.
In this background, by the second quarter the Indian economy showed
signs of turning; and registered a GDP growth rate of 7.40% as compared
to 6.70% in the corresponding previous year.
Similarly, the Indian Automotive Industry, due to strong linkages of
the Industry with the economy was also impacted with the abovesaid
changes in the Economy. However, the timely stimulas package announced
by the Government of India helped the Industry and economy to recover
lost ground. Consequently, the automobiles production in the year
2009-10 recovered remarkably registering a growth of 25.76% as compared
to the corresponding previous year
Your Company also registered a growth of 41% during the year under
review by achieving a Sales Turnover (Net of Excise) of Rs.22,702.74
Lacs (on Standalone Basis) as against Rs.16,126.43 Lacs (on Standalone
Basis) in the corresponding previous year.
The significant contribution for the growth was mainly attributed by
sale from new trading unit at Manesar (where company started new
trading activity of Levellor Motors), Development of new product line
of Fabrication of Seat Frames for various four wheelers, good order
book from its leading customer Bajaj Auto Ltd., Development of new
lighting products for four wheelers segment at Bhosari unit, Better
utilization and production of Adjustor Levellor Motors at its Chakan
unit, better capacity utilization at Waluj plant to execute the strong
orders book and a growth of 28% in After Market sales of the Company
over the previous year.
The Profit Before Tax (PBT) reported for the current year increased to
Rs.876.73 Lacs (on Standalone Basis) from Rs.55.40 Lacs (on Standalone
Basis) as compared to previous year, resulting 1483% rise, as compared
to the previous year. One of the major reason contributing to higher
PBT is on account of Dividend Income amounting to Rs. 288.34 Lacs
received from 100% Subsidiary Company à Lumax DK Auto Industries
Limited.
On Consolidated Basis, your Company registered a growth of 39% during
the year under review by achieving a Sales Turnover (net of excise) of
Rs. 41,693.18 Lacs as against Rs.30,040.13 Lacs in the corresponding
previous year.
The Profit Before Tax (PBT) for the current Year is Rs.2,871.09 Lacs as
against Rs. 1,637.90 Lacs on Consolidated Basis as compared to the
corresponding previous year, registering a growth of 75.29 %.
NEW OPERATIONS / BUSINESS
During the year ended March 31, 2010, the company has successfully
started following new operations:
1. A new trading Unit was started at Manesar, Haryana, for Trading of
Adjustor Levellor Motors business and the same have achieved Turnover
of Rs. 2,615.85 Lacs in first 7 months of operations from September
2009 onwards.
2. A new Plant was set up in March 2010, at Kale-amb in Himachal
Pradesh for production of various Auto bulbs and related applications.
This unit has been set up in the Special Industrial Area and is
entitled for benefits of direct and indirect taxes as per the
Industrial policy of the Government.
3. Diversified into Non-Auto Segment business LED based Lightings and
other Infrastructural Lightings.
4. Started the commercial production of Seat Frame Business and has
added new customer in this segment during the year.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion and Analysis Report
(MDA).
SUBSIDIARY COMPANY
100% SUBSIDIARY- LUMAX DK AUTO INDUSTRIES LIMITED (LDK)
During the year, the LDK -100% subsidiary of your Company has got
recognition for In-house Research and Development (R&D) facility from
Department of Science & Industrial Research, Ministry of Science &
Technology and Government of India for its unit at Manesar for Gear
Shifter. In the very first year, the unit has got an excellence award
in Design & Development from Maruti Suzuki India Limited. This In-house
R & D facility will enhance the capability of the LDK to secure more
business in future.
In accordance with Section 212 of the Companies Act, 1956 the Audited
Statements of the Accounts of the Companies Subsidiary Lumax DK Auto
Industries Limited together with the reports of the Directors and
Auditors thereon for the year ended March 31, 2010 are annexed hereto
and form part of this Report.
JOINT VENTURE COMPANY
LUMAX CORNAGLIA AUTO TECHNOLOGIES PRIVATE LIMITED (LCAT)
The financial year ended 31st March 2010 was the second full year of
operations of the Joint Venture Company, during which it has achieved
Turnover of Rs. 714.56 Lacs and Profit before Tax of Rs. 72.51 Lacs
(Unaudited).
During the year under review, the Joint Venture Company, which is
supplying Air Intake systems to two leading automobile manufactures in
India, now is in the process of supplying Air Intake System to two new
world renowned Automobile manufacturers, making it the single source
catering to all the vehicle platforms of these customers.
In its endeavour to increase the localization of parts, the Joint
Venture Company successfully shifted its existing facility in October,
2009, at Chakan, Pune to produce Air Intake System, Filter Elements
locally.
Now, the Joint Venture Company, in its bid to be a complete system
supplier has also proposed to enter into the manufacturing of Intake
Ducts for the same customers, the industrialization for which will be
effected in 2011-12.
DIRECTORS
The Board consists of Executive and Non à Executive Directors including
Independent Directors who have wide and varied experience in different
disciplines of Corporate Functioning. In accordance with the provisions
of Companies Act, 1956 and Articles of Association of the Company Mr.
A. V. Alexander and Mr. Anmol Jain, Directors are retiring by rotation
at the ensuing Annual General Meeting and being eligible, offer
themselves for re-appointment.
Your Directors recommend the re-appointment of the above said Directors
at the ensuing Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act 1956, the
Directors state:
(i) That in the preparation of the Annual Accounts for the Financial
Year ended 31st March, 2010, the applicable Accounting Standards have
been
followed along with proper explanation relating to material departures;
(ii) That the Directors have selected such accounting policies and
applied them consistently and 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 at the end of the financial year and of the
profit or loss of the company for that period;
(iii) That the Directors have taken proper and sufficient care 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;
(iv) That the Directors have prepared the Annual Accounts on a Ãgoing
concernà basis.
FIXED DEPOSITS
During the year under review the Company has not accepted any Deposit
under Sections 58A and 58AA of the Companies Act, 1956 read with the
Companies (Acceptance of Deposits) Rules, 1975.
AUDITORS
M/s D. R. Barve & Co, Chartered Accountants, having its Firm
Registration Number (FRN) 101034W, are proposed for re-appointment as
Statutory Auditors of the Company, from the conclusion of the ensuing
Annual General Meeting till the conclusion of the next Annual General
Meeting. They have given their consent to act as Auditors of the
Company and have further confirmed that their appointment would be in
conformity of the provision of Section 224(1B) of the Companies Act,
1956. The Board recommends their re-appointment for the approval of the
Members in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were
accepted by the Board. Hence there is no need for disclosure of the
same in this Report.
CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements of the Company including its 100%
subsidiary Lumax DK Auto Industries Limited as prepared in accordance
with the Accounting Standard are annexed hereto and forms part of this
Report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis Report is annexed as part of this
report separately as Annexure - A.
OTHER INFORMATION
Disclosure of information regarding Conservation of Energy, Research &
Development, Technology Absorption and Foreign Exchange Earnings and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956, is
annexed separately as Annexure - B.
Information of Particulars of Employees as required under Section
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 forms an integral part of this report. As per
the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the
Report and Accounts are being sent to the shareholders of the Company
excluding the Statement of Particulars of Employees under Section
217(2A) of the Companies Act, 1956. Any shareholder interested in
obtaining a copy of such statement may write to the Company Secretary
at the registered office of the Company and the same is also available
for inspection in accordance with the provision of Section
219(1)(b)(iv) of the Companies Act, 1956.
GROUP
Pursuant to the intimation from the Promoters, the names of the
Promoters and entities comprising Group are disclosed in the Annual
Report as Annexure C, for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
CORPORATE GOVERNANCE
The report on Corporate Governance together with the Auditors
Certificate regarding the Compliance of conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement is
annexed and forms part of this Annual Report as Annexure D.
ACKNOWLEDGEMENT
The Directors wish to place on record their sincere thanks to all its
highly valued Customers, its Technical Collaborators, Joint Venture
Partners, all other business partners, all the Shareholders, Financial
Institutions, Banks, Vendors and various Government agencies for their
continued support and patronage.
The Board would also like to acknowledge the co-operation & commitment
rendered by all the associates & employees of the Company for their
unstinted support shown during these challenging times.
For and on behalf of the Board of Directors
Place: Gurgaon D. K. JAIN
Dated: June 26, 2010 Chairman