Directors Report of Lumax Industries Ltd.
Mar 31, 2022
The Board of Directors (âBoardâ) have pleasure in presenting the 41st Annual Report on the business and operations together with Audited Financial Accounts of the Company (âthe Companyâ) for the financial year ended 31 March 2022.
1. FINANCIAL PERFORMANCE- STANDALONE & CONSOLIDATED
The highlights of standalone and consolidated financial performance of the Company are as follows:
|
('' in Lakhs unless otherwise stated) |
||||
|
particulars |
Standalone |
Consolidated |
||
|
for the FY 31 march |
for the FY 31 march |
|||
|
2022 |
2021 |
2022 |
2021 |
|
|
Revenue from Operations |
1,75,131.10 |
1,42,598.07 |
1,75,131.10 |
1,42,598.07 |
|
Other Income |
1,338.64 |
2,523.38 |
1,338.64 |
2,523.38 |
|
total revenue |
1,76,469.74 |
1,45,121.45 |
1,76,469.74 |
1,45,121.45 |
|
total Expenses |
1,70,141.04 |
1,41,969.47 |
1,70,141.04 |
141,969.47 |
|
profit before exceptional items, income tax and share in profit/(loss) of associate |
6,328.70 |
3,151.98 |
6,328.70 |
3,151.98 |
|
Exceptional item Gain/(Loss) |
(1,713.95) |
- |
(1,713.95) |
- |
|
Profit of Associate |
- |
- |
667.18 |
154.09 |
|
profit Before tax (pbT) |
4,614.75 |
3,151.98 |
5,281.93 |
3,306.07 |
|
Tax Expenses |
1,071.38 |
1,448.13 |
1,209.46 |
1,490.84 |
|
profit After tax (pAT) |
3,543.37 |
1,703.85 |
4,072.47 |
1,815.23 |
|
Other Comprehensive Income/(Loss)Items that will not be re-classified to profit or loss and its related income tax effects |
||||
|
- Remeasurement of defined benefit liability/asset |
(332.14) |
126.54 |
(287.02) |
142.12 |
|
- Income Tax relating to above |
- |
- |
- |
- |
|
Net other Comprehensive Income/(Loss) |
(332.14) |
126.54 |
(287.02) |
142.12 |
|
total Comprehensive Income |
3,211.23 |
1,830.39 |
3,785.45 |
1,957.35 |
|
Paid-up Equity Share Capital (Face value of '' 10/- Per share) |
934.77 |
934.77 |
934.77 |
934.77 |
|
Earnings Per Share (EPS) Basic/Diluted (In '') |
37.91 |
18.23 |
43.57 |
19.42 |
a. COMPANY PERFORMANCE Standalone:
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 been able to achieve good performance during the year. On standalone basis, the revenue from operations during the Financial year 2021-22 stood at '' 1,75,131.10 Lakhs as compared to '' 1,42,598.07 Lakhs in the last year registering a growth of 23%.
For the Financial Year 2021-22, the profit before exceptional items and income tax stood at '' 6,328.70 Lakhs as compared to '' 3,151.98 Lakhs in the last year witnessing a significant increase of 101%. The PBT after exceptional items stood at '' 4,614.75 Lakhs as compared to '' 3,151.98 Lakhs in the last year registering an increase of 46%. The Profit after Tax (PAT) stood at '' 3,543.37 Lakhs as compared to '' 1,703.85 Lakhs registering a significant increase of 108%. The Total Comprehensive Income increased to '' 3,211.23 Lakhs as against ''1,830.39 Lakhs in the last year registering an increase of 75%. The Basic and Diluted Earnings per share stood at '' 37.91 registering a significant increase of 108%.
Consolidated:
For the Financial Year 2021-22 on consolidated basis, the profit before exceptional items, income tax and share in profit of associate stood at '' 6,328.70 Lakhs as compared to '' 3,151.98 Lakhs in the previous year witnessing a significant increase of 101%. The PBT after exceptional items and share in profit of associate stood at '' 5,281.93 Lakhs as compared to '' 3,306.07 Lakhs in the last year registering an increase of 60%. The Profit after Tax (PAT) stood at '' 4,072.47 Lakhs as compared to '' 1,815.23 Lakhs registering a significant increase of 124%. The Total Comprehensive Income increased to '' 3,785.45 Lakhs as against '' 1,957.35 Lakhs in the last year registering an increase of 93%. The Basic and Diluted Earnings per share stood at '' 43.57 registering a significant increase of 124%.
b. SHARE CAPITAL
The paid-up Equity Share Capital as on 31 March 2022 was '' 934.77 Lakhs. During the year under review, the Company has not issued shares or granted stock options or sweat equity.
c. DIVIDEND
Your Board have recommended a Dividend @ '' 13.50/-(i.e. 135%) per equity share having face value of '' 10/- each for the FY 2021-22 in its meeting held on 24 May 2022 subject to approval of Shareholders in the ensuing AGM (âAGMâ). The Total Dividend paid for the last financial year was '' 7/- (i.e. 70%) per Equity Share having face value of '' 10/- each.
The total dividend pay-out for the FY 2021-22 would work out to '' 1,261.94 Lakhs, which is equivalent to 35.61% of the net profits of the Company during the year as against the pay-out of '' 654.34 Lakhs in last FY 2020-21. The Register of Members and Share Transfer Books shall remain closed from Tuesday, 12 July 2022 to Friday, 22 July 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, 11 July 2022 within the stipulated time period. dividend distribution policy
As per the amendment dated 5 May 2021 in the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (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.
Pursuant to the amended provisions of Regulation 43A of the Listing Regulations, the Board of Directors in their meeting held on 6 August 2021 had approved and adopted the Dividend Distribution Policy of the Company.
The Dividend Distribution Policy can be accessed on the website of the Company at https://www.lumaxworld.in/ lumaxindustries/pdf/dividend-distribution-policy-lil.pdf.
d. 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.
e. performance of associate company & consolidated financial statements
The Company has one Associate Company viz. SL Lumax Limited, which was incorporated in the year 1997. The Company holds 21.28% in equity share capital of SL Lumax. SL Lumax is based in Chennai and primarily engaged in manufacturing of automotive components which includes lamp assemblies, chassis, mirror and front-end modules (FEM).
During FY 2021-22, the Associateâs profit attributable to the Company was '' 667.18 Lakhs as compared to the '' 154.09 Lakhs in the last year.
In accordance with the provisions of the Companies Act, 2013 (ââthe Actââ) and Regulation 33 of the Listing Regulations and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY 2021-22, together with the Auditorsâ Report form part of this Annual Report.
A report on performance and financial position of Associate Company included in the Consolidated Financial Statement (CFS) is presented in a separate section in this Annual Report in the prescribed format AoC-1 as a part of financial statements.
In accordance with Section 136 of the Act, the electronic copy of Financial Statements of the Associate Company shall be available for inspection in the investor section of website of the Company at https://www.lumaxworld.in/ lumaxindustries/associate-financials.html. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company Secretary at the Registered Office of the Company. The Financial Statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at https://www. lumaxworld.in/lumaxindustries/index.html.
2. 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 of FY 2020-21, however due to fresh waves of covid coupled with supply constraints and increase in commodity prices, the industryâs 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
The technology has been changing and evolving rapidly, and in order to always be ahead with the competition, Lumax has been focussing on strengthening its R&D capability. With this belief Lumax had opened its Design Centre in Czech Republic to have international technical competence and globalization of the same. This centre will also help to further enhance the skill of the local staff with exposure to new futuristic technologies.
It has been a pretty successful year for the Company with addition of new customers in its portfolio coupled with the new businesses from existing customers to improve top line.
With the introduction and emphasis of localization by OEMs, to avoid the risks associated with the supply chains, Lumax is investing in the upgradation of its existing manufacturing facilities alongside setting up a state of art Electronics manufacturing facility. The same will help in successful localization of technologically advanced products thus giving the customers immunity from supply chain risks with best quality products.
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 Committee 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
⢠Leading Design Centre as per Global Standard
⢠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. The Company will witness imrpovement in Marketing, Human Resource practices, Manufacturing Operations and enhance Design capabilities.
Automotive Lighting is a Safety Critical Automotive Component. Over Years several New Technologies have matured with focus on Aesthetic, Cost, Power Consumption, Improved Visibility etc. New functions are coming to improve safety and also to show the brand signature, usage of some functions on light markings to improve safety, or brand logos for styling and marketing reasons. Vehicles are embedding more and more sensors (in front, rear or side of Vehicle), which raises the challenges of their integration in the vehicle, their fusion to perceive the environment, and also the management of an increasing quantity of data (local or cloud processing, data annotation and storage). The Company is working towards continuous improvements by adding Core Engineering Strength. It has restructured the organization with an Engineering Centre for Competence (COC) & adding Specialists for developing next generation Lighting Systems for Automotive applications. It has Localized LED Projectors, Lighting Electronics, Light Guides etc to bring Value added Technologies at affordable cost to Customers. It will be launching few innovative Technologies in India Like Localized LED Projectors, LED Fog Lamps, Sealed Projector, Charging Indicator Lamps for EV application, Sequential Turn Indicator, integrated 3-in-one Signaling Functions, Lamps with 2K-3K Lens/Bezel, Full Deck-lit Lamps etc. in India for enhanced visibility & Aesthetic
at Lower Power Consumption or Cost. The Company is also working on Innovative Technologies of the future (Projectors, AFS/ADB, 3D Holographic Signaling, Homogenous lit appearance, Sensor integration, Logo or Signal Projections etc.).
The Company demonstrated its commitment towards Quality by ensuring that quality processes are adhered to by all through its recently Launched LDR (Lumax Development Rule) Product Development Process. This is an Online Project Management 7 gate tool that has taken program execution towards excellence.
The Company has won accolades and awards not only from the customers but also at various industry conventions like ACMA competition, National Convention of Quality Control Circle (NCQCC), Kaizen. Also Company got International TPM awards from Japan Institute of Plant Maintenance (JIPM) for best manufacturing practices.
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 21-22, and the management is quite confident that going forward the Company will continue to deliver value to all its customers and stakeholders. The longterm outlook for the Company remains positive and it is poised to outperform the industry.
a. CAPACITY EXPANSION & MODERNIZATION OF FACILITIES
The Company is constantly expanding the boundaries of its existing facilities and during the year under review, the Company has invested towards capacity expansion of its manufacturing facilities as follow:
- Capex for new Projects at plants - '' 4,178.69 Lakhs
- Capex for new Projects at Bawal and Sanand -'' 3,576.56 Lakhs and '' 6,908.78 Lakhs respectively
Further, an expenditure on Research and Development facilities of Chakan and Gurugram was done to the tune of '' 211.02 Lakhs.
b. TECHNOLOGY, INNOVATION AND QUALITY
Based on challenges ahead, the car industry changes to EVs and software-defined cars; the tier-1 lighting business is in a huge structural change; enabled by technologies Sensor based, Charging indicator Lamps, new lighting elements, micro optics, and much more. It looks a lot like disruption. On the safety side of business, Company has
to look much more at the whole system, not only usual view to a subsystem like the headlamps. Accordingly the Company needs to develop more adaptive systemsâ adaptive to the complete environment. The requirements for car lighting are very different in the colourful and bright ambience of a megacity versus the dim and rainy countryside. All around the car! Lit roof rails; lit logos on the C-pillar and everywhere else; digital light; edge-to-edge front and rear position lamps; turn signal and reversing lamp projections; digital DRLs; light carpets; welcome/goodbye lights. Small projectors for dynamic ground illumination are starting to enter the car. Lit logos are trending, but legislation is still difficult. All Lighting Functions are dynamic in future. One of Companyâs future tasks will be providing the best light for the respective situation taking care of Styling, Quality & Cost.
Itâs getting complex with more Electronics content getting embedded in Automotive Lighting. India is adapting to higher end Technologies at a very fast pace with Advance Front Lighting System, Full LED Headlamps & Innovative Signalling Functions. The Company is rapidly increasing its Engineering Strength with a vision to be leading global affordable Lighting Supplier focused towards Technologies mapped with affordable LED Headlamps, Adaptive Driving Beam, Charging Indicator Lamps for EV applications, LED Projectors, LED High Beam Boosters, Logo Projections, Diffractive Holographic Signalling Functions, Sensor Integration in lamps etc.
To achieve Technology Roadmap the Company has expanded its Engineering Strength in Europe & India with the experts in Optics, Electronics & Core Engineering. This will expedite pace to catch up with Lighting Technology in west and have it available for OEMs in India at affordable cost. The Company already has tie-up with Stanley Japan which continues to be a Pillar of strength.
The Company will continue to innovate and develop world class products and put thrust and focus on R&D, Global Technology partnerships and development of advanced technological automotive products. As an annual practice, this year as well, the Company will continue to celebrate 15 September as Innovation Day, on the occasion of Engineers Day, showcasing the Companyâs new products and technologies to the customers. c. management DISCUSSION & ANALYSIS REpORT As stipulated under the provisions of Regulation 34 of the Listing Regulations, Management Discussion & Analysis Report forms an integral part of this Report as an Annexure - A and provides details on overall Industry Structure and Developments, financial and operational performance and other material developments during financial year under review.
The Company had commenced the commercial production of automotive electronic components at its new manufacturing plant situated at Bawal, Haryana on 12 January 2022 and also the Company had commenced the commercial production at its new Sanand Plant situated at Gujarat on 29 March 2022.
e. THE CHANGE IN THE NATURE OF BUSINESS, IF ANY During the financial year ended 31 March 2022, there was no change in the nature of business of the Company.
3. 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 Listing Regulations is annexed and forms part of this Report as an Annexure - B.
b. directors & KEY Managerial pERSoNNEL
(i) DIRECToRS
The Composition of Board of Directors is in conformity with the applicable provisions of the Act and Listing Regulations.
During the year under review, the appointment of Mr. Vikrampati Singhania, who was appointed as an Additional Non-Executive Independent Director w.e.f. 11 February 2021 for a period of 5 years, was regularised by the members in the AGM held on 31 August 2021.
Further, the Board of Directors in their meeting held on 11 February 2022 had approved the reappointment of Mr Rajeev Kapoor for the second term of 5 years and the same has also been approved by the Shareholders. retirement by rotation and subsequent re-appointment
I n 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 Vineet Sahni, CEO and Senior Executive Director (DIN: 03616096) and Mr Kenjiro Nakazono (DIN: 08753913) are due to retire by rotation at the ensuing AGM and being eligible, offers themselves for reappointment.
A brief profile of Mr Vineet Sahni and Mr Kenjiro Nakazono is provided in the Notice of the ensuing Annual General Meeting of the Company.
independent directors
The Board has 6 (Six) Independent Directors, including one Woman Independent Director, representing diversified fields and expertise. Details are provided in the relevant section of the Corporate Governance Report.
All Independent Directors have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their name in the data bank of independent directors, pursuant to the provision of Rule 6 (1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
The Board of Directors are of the opinion that Mrs Ritika Modi, Independent Director of the Company who was appointed on 28 July 2018, have the integrity, expertise & experience and have ascertained that she has cleared the proficiency self-assessment test, conducted by The Indian Institute of Corporate Affairs (IICA), pursuant to the provisions of Rule 6 (4) of the Companies (Appointment and Qualification of Directors) Rules, 2014 and Mr Avinash Parkash Gandhi, Mr Dhiraj Dhar Gupta, Mr Rattan Kapur, Mr Rajeev Kapoor and Mr Vikrampati Singhania, Independent Directors were exempted from appearing for the proficiency self-assessment test.
Further, as stipulated under the Regulation 17(10) and 19 read with Schedules thereto of Listing Regulations, an evaluation exercise of Independent Directors was conducted by the Nomination and Remuneration Committee and the Board of the Company and satisfied themselves with the performance and contribution of all the Independent Directors.
(ii) KEY MANAGERIAL pERSoNNEL (KMp)
As on 31 March 2022, Mr Deepak Jain, Chairman & Managing Director, Mr Anmol Jain, Joint Managing Director, Mr Vineet Sahni, Whole Time Director (Senior Executive Director & CEO), Mr Tadayoshi Aoki, Whole Time Director (Senior Executive Director), Mr Kenjiro Nakazono, Whole Time Director (Executive Director), Mr Shruti Kant Rustagi, Chief Financial Officer and Mr Pankaj Mahendru, Company Secretary are regarded as Key Managerial Personnel (KMPs).
c. NUMBER of MEETINGS of BoARD of DIRECToRS
During the FY 2021-22, the Board met five (5) times on
7 May 2021, 11 June 2021, 6 August 2021, 12 November
2021 and 11 February 2022 to review the operations of
the Company. 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 the Independent Directors of the Company was held on 24 February 2022, without the presence of Non-Independent Directors and Members of the management, to review the performance of NonIndependent Directors and the Board as a whole, the performance of the Chairperson of the Company, taking into account the views of Executive Directors, NonExecutive, Non-Independent Directors and also to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board.
d. DIRECTORS RESPONSIBILITY STATEMENT
I n 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 31 March 2022 the applicable Accounting Standards have been followed and there are no material departures;
(ii) t hat the Directors have selected such accounting policies and applied 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 as on 31 March 2022 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) t hat 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.
e. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
I n 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 1 January 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.
f. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
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 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;
⢠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/lumaxindustries/pdf/ nomination-and-remuneration-policy-of-directors-key-managerial-personnel-and-other-employees.pdf.
g. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS
One of the key responsibilities and role endowed on the Board is to monitor and evaluate the performance of the Board, Committees and Directors.
Accordingly, in line with applicable provisions of the Act and Listing Regulations, the annual performance 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.
Evaluation Technique
⢠The evaluation methodology involves discussion on 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 & Managing Directorâs performance is done by each Board Member on similar qualitative parameters.
Evaluation Outcome
The feedback of the evaluation exercise and inputs of Directors are 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 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 NonExecutive 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.
h. AUDIT Committee & COMpOSITION
The Composition of the Audit Committee is in alignment with the provisions of Section 177 of the Act read with rules framed thereunder and Regulation 18 of the Listing Regulations. The members of the Committee are financially literate and having experience of financial management.
As on 31 March 2022 the Audit Committee of Board comprised of Six (6) Members viz. Mr Avinash Parkash Gandhi (Chairman), Mr Dhiraj Dhar Gupta, Mr Rattan Kapur, Mr Rajeev Kapoor (Independent Directors), Mr Deepak Jain and Mr Tadayoshi Aoki (Executive Directors). Mr Pankaj Mahendru acts as Secretary to the Audit Committee.
The details regarding category of Members and terms of reference of Audit Committee had been stated in Corporate Governance Report which forms part as an Annexure - B to this Report.
All the recommendations of Audit Committee made to the Board of Directors were duly accepted by the Board of Directors.
i. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
For the FY 2021-22, all the Related Party Transactions entered into by the Company were in ordinary course of business and at arms-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. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval on quarterly basis. 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.
There were no material 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.
The details of Related Party Transactions undertaken by the Company which fall under the purview of âMaterialityâ as per Listing Regulations are attached in Form AOC-2 as an Annexure - C to this Report.
Further, the Shareholders approval on such Material Related Party Transactions have been taken by way of Postal Ballot Notice dated 12 November 2021 for which the results were declared by the Company on 28 December 2021.
The details of the Related Party transactions as per IND AS 24 are set out in the notes to the financial statement to the Company.
The Company has formulated a policy on Related Party Transactions, which is available on the Companyâs website at https://www.lumaxworld.in/lumaxindustries/ pdf/policy-document-on-materiality-and-dealing-with-related-party-transactions.pdf.
j. 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 behavior, 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. This 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 available on the website of the Company https://www.lumaxworld.in/lumaxindustries/ pdf/vigil-mechanism-whistle-blower-policy LIL.pdf. 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 the above mechanism was reported.
k. code of conduct for directors and senior
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/lumaxindustries/pdf/Code%20 of%2 0Conduct%2 0for%2 0Directors%2 0and%2 0 Senior%20Management.pdf
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 other particulars of the employees drawing remuneration in excess of the limits set out in the said rules which form part of the Boardsâ Report, will be made available to any shareholder on request, as per provisions of Section 136(1) of the Act.
m. CompLIANCE MANAGEMENT FRAMEWoRK
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.
4. INTERNAL FINANCIAL CONTROLS & ADEQUACY
a. ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
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 Statements reviewed every quarter by its Statutory Auditors.
The Company uses an established SAP ERP HANA 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.
b. RISK Management pOLICY
Earlier the Risk Management Policy was not applicable to the Company as per the Listing Regulations but as a Good Corporate Governance Practice, the same was formulated along with the voluntary constitution of the Risk Management Committee.
During FY 2021-22, as per amended Regulation 21 of the Listing Regulations which came into effect from 5 May 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 6 August 2021, re-constituted the Risk Management Committee and amended 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/lumaxindustries/pdf/risk-management-policy-lil.pdf.
c. AUDITORS Statutory Auditors
M/s B S R & Associates LLP, Chartered Accountants (FRN:116231W/W-100024), Statutory Auditors of the Company, have completed their tenure of 5 years and accordingly will cease to act as Statutory Auditors upon the conclusion of the ensuing Annual General Meeting. M/s B S R & Associates LLP, Chartered Accountants have maintained the highest level of governance and substantially contributed in to the efforts of the Company towards strengthening the internal controls, processes and procedures in line with expanding size of operations. The Board places on record its deep sense of appreciation for the services rendered and guidance given by them as the Statutory Auditors of the Company. M/s S.R. Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E/E300005) have agreed to and given their consent for their appointment as the Statutory Auditors of the Company.
M/s S.R. Batliboi & Co. LLP, Chartered Accountants have furnished a certificate confirming that they are not disqualified for being appointed as Auditors of the Company.
In terms of Section 139(2) of the Act, the Board, upon recommendation of the Audit Committee, has recommended the appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company, for a period of five consecutive years from the conclusion of the 41st Annual General Meeting up to the conclusion of the 46th Annual General Meeting, to the members of the Company for approval.
Accordingly, an item for appointment of M/s S.R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of 5 (five) years is being placed at the ensuing AGM for approval of the members. Information about the proposed appointment of M/s S.R. Batliboi & Co. LLP is given under the Notice of AGM, which forms part of this Annual Report.
Statutory Auditors Report
The Report given by M/s B S R & Associates LLP, Chartered Accountants on the Financial Statements of the Company for the FY 2021-22 forms part of the Annual Report. There are no qualification, reservation, adverse remark, or disclaimer given by the Auditors in their Report.
I n 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, 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 '' 1.75 Lakhs (Rupees One Lakh Seventy-Five Thousand only) 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. 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 law.
Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr Maneesh Gupta, Practicing Company Secretary (M. No. F4982) as the Secretarial Auditor of the Company to conduct the Secretarial Audit for FY 2022-23.
The Company has received consent from Mr Maneesh Gupta to act as the auditor for conducting audit of the secretarial records for the financial year ending 31 March 2023.
Annual Secretarial Audit Report & Annual Secretarial Compliance Report
The Secretarial Audit Report for the financial year ended 31 March 2022 under the Act, read with Rules made thereunder and Regulation 24A (1) of the Listing Regulations is set out in the annexure - E to this Report. There are no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Pursuant to Regulation 24 A (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 in this regard which is further required to be submitted to Stock Exchanges within 60 days of the end of the financial year.
The Company has engaged the services of Mr Maneesh Gupta (M. No.: F 4982), PCS and Secretarial Auditor of the Company for providing this certification.
Accordingly, the Company has complied with the above said provisions and an Annual Secretarial Compliance Report has been submitted to the Stock Exchanges within stipulated time.
I n 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 carried out by M/s Grant Thornton Bharat LLP. Further, the Board in their meeting held on 24 May 2022 has appointed M/s Grant Thornton Bharat LLP as Internal Auditors for the FY 2022-23.
d. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS Under SUB-SECTIoN (12) of SECTIoN 143 oTHER Than THoSE WHICH Are REpoRTABLE to the central government:
During the year under review, no frauds were reported by Statutory Auditor and Secretarial Auditor against the Company which need to be mentioned in this Report.
5. corporate social responsibility (CSR) policy AND INITIATIVES
The Companyâs Corporate Social Responsibility (CSR) objective is to give back to society and contribute to nationâs development through its initiatives.
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.
During the year, the Companyâs obligation to spend on CSR activities was '' 128.87 Lakhs i.e. 2% of the average net profits during the three immediately preceding financial years against which the Company has actually spent '' 134.45 Lakhs. Also the unspent amount of CSR on ongoing projects for the FY 2020-21 amounting to '' 46.54 Lakhs along with the interest amount of '' 0.70 Lakhs has been spent during the FY 2021-22.
The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of the Act. The Committee monitors and oversees various CSR initiatives and activities of the Company.
Key CSR Activities
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.
I nfrastructure 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.
Health
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, ventilators and other equipments to help the Covid Patients.
The programs also include Juvenile diabetes for the underprivileged children and a mobile path lab for communities donated to the Primary Health Centre (PHC). Constitution of CSR Committee
As on 31 March 2022, the CSR Committee of the Company comprised of three (3) Members namely, Mr Deepak Jain (Chairman), Mr Avinash Parkash Gandhi and Mr Anmol Jain.
The details of the CSR Policy of the Company are also available on the website of the Company at https://www. lumaxworld.in/lumaxindustries/pdf/corporate-social-responsibility-policy_Lumax-industries-limited.pdf.
The contents of the said policy are as below:
a. CSR Philosophy
b. Constitution of CSR Committee
c. Role of CSR Committee
d. Implementation of CSR Projects, Programs and Activities
e. Allocation of Budget
f. Lumax domains of engagement in accordance with Schedule VII
g. Monitoring and Review Mechanism
h. Management Commitment
The Annual Report on CSR as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as an Annexure - F to this Report in the prescribed format.
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 31 March 2022 till the date of this Report.
particulars of Loans, Guarantees and Investments
The particulars of Investments and Loans as on 31 March 2022 as covered under the provisions of Section 186 of the Act is given in the Notes to Financial Statements of the Company. The Company has not given any guarantees during the year under review.
I nformation 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 their operations with energy efficient technologies and offtake of electricity from renewable sources wherever feasible. These manufacturing units are constantly encouraged to improve operational activities and maximizing production 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, Technology Absorption and Foreign Exchange Earning and Outgo, etc. as required under Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as an Annexure - G to this Report. Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31 March 2022 is available on the Companyâs website on https://www.lumaxworld.in/ lumaxindustries/annual-return.html.
During the year under review, the Company has neither accepted nor renewed any Deposit in terms of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and hence any provisions of the
said Section are not applicable to the Company.
Names of Companies which have become or ceased to be Its Subsidiaries, Joint Ventures or Associate Companies during the Year
During the FY 2021-22, there were no companies which became Subsidiary or Joint Venture of the Company, nor the Associate Company ceased to be an Associate of the Company.
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.
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) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, a âStatement that the Company has complied with the provisions related to Constitution of Internal Complaints Committee 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, the Company is in compliance with and has adopted the âPolicy on Prevention of Sexual Harassment of Women at Workplaceâ and matters connected therewith or incidental thereto covering all the related aspects. The constitution of ICC is as per the provisions of POSH and includes external Members from NGO or those individuals having relevant experience.
The Committee meets as and when required and provides a platform for female employees for registration of concerns and complaints, if any.
During the year under review i.e. FY 2021-22, Twenty Five (25) meetings and Forty Two (42) awareness sessions were held across all manufacturing locations to discuss on strengthening the safety of employees at workplace. In addition, the awareness about the Policy and the provisions of Prevention of Sexual Harassment Act was also carried out in the said meetings. 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. 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 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 maintain 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 includes: Strong and Active Leadership:
⢠Corporate safety procedures were reviewed and Health and safety management audit program 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 FY 2021-22 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.
9. Surface treatment - Duct Cleaning for all locations. for Tier-2 Suppliers:
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 Vendors and also delivered Training awareness program related to Fire, Electrical, Machine Safety and Fire Mock drill.
transfer to investor education and protection fund (iepf)
Pursuant to the provisions of Section 124(5), 125 and other applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), 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 Account of the Company.
Further, pursuant to provisions of Section 124(6) of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which Dividend has not been claimed or unpaid by the shareholders for seven (7) consecutive years or more shall also be transferred to the Demat account of IEPF Authority. The said provisions does not apply to shares in respect of which there is a specific Order of Court, Tribunal or Statutory Authority, restraining any transfer of the shares.
Accordingly, the details relating to amount of Dividend transferred to the IEPF and corresponding shares on which Dividends were unclaimed for seven (7)
consecutive years, are provided in the Report on Corporate Governance annexed to this Report.
It may be noted that the due date for transfer of the Unpaid/Unclaimed Dividend lying in the Unpaid Dividend Account of the Company for the FY 2014-15, which was declared on 19 August 2015, to IEPF is 20 September 2022. Further, all shares in respect of which dividend has not been paid or claimed for seven con secutive years or more shall also be transferred to IEPF i.e. in case any divid end is claimed for any year during th e 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. The Notice pursuant to the provisions of Section 124 of the Act read with IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 will be published in the newspapers viz Financial Express (English- All Edition) and Jansatta (Hindi-Delhi), titled- âTransfer Of Unpaid/ Unclaimed Dividend And The Underlying Equity Shares To The Investor Education And Protection Fund (IEPF) Accountâ inviting the attention of the Shareholders to claim their Dividends along with the underlying Equity Shares and in this regard, the Company will also send individual notices to the concerned Shareholders.
CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY DESIGNATED PERSONS (CODE OF CONDUCT)
I n 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 [Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015]. 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 and Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances. This Code includes a Policy and Procedure for Inquiry in case of leakage of Unpublished Price Sensitive Information or suspected leakage of Unpublished Price Sensitive Information and
is available for reference on the website of the Company
i.e. https://www.lumaxworld.in/lumaxindustries/pdf/code-of-conduct_SEBI-egulations-2015.pdf.
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. DISCLOSURE For COMpLIANCE Of Secretarial STANDARDS
The Company has complied with the Secretarial Standard-1 (Meetings of Board of Directors) and Secretarial Standard-2 (General Meetings) issued by the Institute of Company Secretaries of India. 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 undisputed dues are outstanding for more than six months. The Company generally ensures payment of all dues to exchequer well within time line as applicable.
7. acknowledgement
The Board of Directors place on record their sincere gratitude and appreciation towards all its Stakeholders viz. shareholders, employees, investors, bankers, customers, suppliers, government agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates, service providers, academic partners for their continued commitment and support. The Board conveys their deep sense of appreciation towards contributions made by every member of Lumax Family during the year and express a sincere thanks and gratefulness to its Technical & Financial Collaborator-Stanley Electric Co., Limited for their continued support and patronage throughout the year.
For and on behalf of the Board of Directors Lumax Industries LimitedDeepak Jain
Chairman & Managing Director DIN:00004972
Place: Gurugram Dated: 24 May 2022
Mar 31, 2018
Dear Shareowners,
The Directors are pleased to present the 37th 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 2018.
1. Financial Performance
Rs. in Lakhs
|
Particulars |
Standalone |
Consolidated |
||
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
Revenue from Operations |
169176.59 |
142589.38 |
169176.59 |
142589.38 |
|
Other Income |
925.43 |
649.94 |
546.05 |
600.45 |
|
Total Income |
170102.02 |
143239.32 |
169722.64 |
143189.83 |
|
Total Expenses |
161309.74 |
137763.86 |
161309.74 |
137763.86 |
|
Profit Before Tax and share in Net Profit of Associate |
8792.28 |
5475.46 |
8412.90 |
5425.97 |
|
Profit of Associate |
- |
- |
1342.04 |
1053.02 |
|
Profit Before Tax |
8792.28 |
5475.46 |
9754.94 |
6478.99 |
|
Tax Expenses |
2468.59 |
863.78 |
2618.71 |
1041.89 |
|
Profit For the period |
6323.69 |
4611.68 |
7136.23 |
5437.10 |
|
Total other Comprehensive Income |
152.97 |
117.88 |
152.97 |
117.88 |
|
Total Comprehensive Income |
6170.72 |
4493.80 |
6983.26 |
5319.22 |
|
Paid-up Equity share Capital |
934.77 |
934.77 |
934.77 |
934.77 |
|
Earning Per share (EPs) (not annualized) Basic/Diluted EPs |
67.65 |
49.33 |
76.34 |
58.17 |
(Financial Results for the year ended 31st March 2018 are in compliance with Indian Accounting standards (Ind As) prescribed under section 133 of The Companies Act, 2013, and previous year figures for the year ended 31st March 2017, have been restated to make them comparable.)
(a) Company Performance
The Indian Automobile Industry is one of the largest in the world accounting for 7.1 per cent of the Countryâs Gross Domestic Product (GDP). It is currently the seventh largest automobile producer in the world, second largest two-wheeler manufacturer, and the fifth largest commercial vehicle manufacturer in the world.
During the Financial Year 2017-18, the overall Indian Automobile Industry registered a production growth of 14.78 per cent as compared to 5.41 per cent over the same period last year. The industry manufactured around 29.08 Million vehicles and the Domestic Market share was as per the graph 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 the growth of 18.64% for Revenue from operations. For the Financial Year 2017-18 the Profit before Tax stood at Rs.8792.28 Lakhs as compared to Rs.5475.46 Lakhs in the previous year witnessing a significant growth of 60.58%. The Profit for the period (after Tax) was recorded at Rs.6323.69 Lakhs recording the growth at 37.12%. The Basic and Diluted Earning per share also grew by 37.14%.
Consolidate performance:
The Revenue from Operations grew by 18.64% whereas the Profit Before tax (PBT) and Profit for the Period showed a considerable increase by 50.56% & 31.25% respectively amounting to Rs.9754.94 Lakhs & Rs.7136.23 Lakhs respectively. The Basic and Diluted Earning per share also grew by 31.24%.
(b) Dividend
Your Company continues to deliver pride and progress with positivity and demonstrating it by way of consistently paying Dividend. The Board in its Meeting held on 28th May 2018 recommended Dividend of 230% (Rs.23.00/- per Equity Share) for the Financial Year 2017-18, (Rs.14.50/- per Equity share in the previous year).
The above proposal is subject to the approval of Shareholders at the forthcoming Annual General Meeting (AGM) to be held on 18th July 2018.
The total amount of Dividend proposed to be distributed, amounts to Rs.2587.70 Lakhs (Including Dividend Distribution Tax) as against Rs.1631.30 Lakhs in the previous year. The Dividend pay out ratio comes to 40.92%.
(c) Reserves
A sum of Rs.880 Lakhs has been voluntarily transferred to the General Reserve of the Company which is an appropriation out of profits of the Company. This reaffirms the inherent financial strength of your Company.
(d) Associate Company & Consolidated Financial Statements
The Consolidated Financial Statements of the Company and its Associate are prepared in accordance with Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 (âInd ASâ), form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company.
The Consolidated Financial Statements reflect the status of S.L. Lumax Limited which is an Associate Company in which your Company holds 21.28% of total Equity Capital. The Associate is based in Chennai and engaged in business of manufacturing of Auto Parts which includes auto lamp assemblies, chassis, mirror and Front-End Modules (FEM).
During the year under review, the Associate achieved Total Revenue of Rs.111276.97 Lakhs as against Rs.107448.97 Lakhs in the year 2016-17.
A report on performance and financial position of Associate Company included in the Consolidated Financial Statement is presented in a separate section in this Annual Report in the format - AOC-1.
The Audited Financial Statements, including the Consolidated Financial Statements and related information are available on the website of the Company i.e. www.lumaxindustries.com. These documents shall also be available for inspection by any Shareholder at the registered office of the Company.
2. State of Companyâs Affairs
The Financial Year 2017-18 has been one of the historic period for the Company in terms of growth and changes in regulatory reforms both qualitatively and quantitatively. The second half of the fiscal year was quite eventful as your Company witnessed and achieved two important milestones: Unveiling of New Brand Identity and Inauguration of New Manufacturing Facility in Sanand, Gujarat within a record time.
Your Company, unveiled the New Brand Identity on 8th November 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.
During the year, we commenced manufacturing operations in Sanand by expanding our footprint further in Gujarat. With this addition, Lumax now has nine (9) State-of-Art manufacturing plants across the Country in 5 states. Keeping in view, the growth opportunities and expansion possibilities, your Company has pre-emptively, acquired landbank in the industrial area of Vasna, Kunpur in Gujarat for future expansion in the State.
In the recent years, the move to BSVI is proving to be the catalyst for the growth of LED market, most OEMs are adopting LED lighting. The Automotive LED lights, are fast-growing necessity and proactively keeping pace with this fast-changing industry need. Your Company has focused significantly on manufacturing defect free LED lamps by creating Electro-static Discharge Zones (EsD) in all its manufacturing units and is focusing on continuous upgradation of skills to maintain the level of âZero defectâ through its various training programmes.
Our efforts to have deeper outreach and cater to almost all OEMs domestically, continued fervently throughout the year. Your Directors are pleased to inform that, during the year your Company added two major OEMs as customers to its portfolio viz. MG Motors India & TVs Motors. This is in line with your Companyâs vision to advance growth. We also introduced wide innovative range of Head Lamps, Tail Lamps, Front Turn signal Lamps, etc.
One of the significant and important changes in the Indian business environment, i.e. Implementation of Goods and service Tax (GsT), was efficiently and smoothly managed by the Company. The transition to Ind As from Indian GAAP was another historic landmark change that has been proficiently implemented by the team and did not pose any significant impact on the Financials of the Company.
Owning 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 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)
Transition from Indian GAAP to Ind AS
India has joined the elite club of nations that have adopted the internationally recognized accounting norms and financial reporting standards. The steps to this milestone can be traced to almost a decade of efforts by several authorities and professionals and several practical challenges that encountered at various stages.
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 1st April 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 31st March 2018 have been prepared in accordance with Ind As and the financial statements for the year ended 31st March 2017 and opening balance sheet as at 1st April 2016 (the Companyâs date of transition) earlier reported in previous IGAAP, have been restated in accordance with Ind-As to make them comparable.
(b) Goods and Service Tax (GST) - Implementation and Impact
The year 2017-18 started with biggest ever tax reform since independence, rolled out by Government of India on 1st July 2017, i.e. implementation of Goods and service Tax (GsT), followed by changes in GsT rates through various notifications in November, 2017. GsT implementation has introduced a single system of taxation across the nation absorbing most of the Indirect Taxes. GsT is touted to simplify doing business in India, allowing supply chains to be integrated and aligned, as also providing greater transparency. However, the initial implementation phase alike all other industries remained challenging.
Though expecting this new Tax regime to be a game changer for Indian Economy, your Company has stabilised the processes adequately for compliance of law and is embracing this reform positively that unifies India into one market.
(c) Capacity Expansion / Modernisation of Facilities
During the year under review, the Company has made an investment to the tune of Rs.16,263.00 Lakhs towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including its Dharuhera, Bengaluru plants and setting up of sanand plant.
The Company inaugurated its Nineth (9th) Lighting Manufacturing unit at sanand, Gujarat; the state-of-Art automated facility has been setup with an initial capacity of 3,00,000 car sets annually. This plant was setup in record time of eight months and had commenced its Commercial Production with effect from 10th January, 2018.
Further, your Company has proactively invested in land in Vasna- Kunpur, Ahmedabad to meet any future demands of its customers and enhance capacities.
A detailed discussion on the business performance and future outlook is provided in the Management Discussion & Analysis Report (MDA) which is provided as an Annexure A to this Report.
(d) Technology and Quality
Your Company continues to excel in design, development and new product launches, in line with its strategy towards delivering competitive advantage to the customer and also to meet its business objectives. The Management ensures that the Engineers of your Company are fully aligned with the organizationâs strategy and towards this end, the Company celebrates 15th september as Innovation day, as a tribute to the greatest engineer Bharat Ratna Late shri M. Visvesvaraya. This step will ensure building in-house engineering and design capability and also timely launch of new products.
In order to continuously create value for our customers in todayâs intense competitive environment, your Company continues to adhere to Zero Defect & Zero Effect initiative to deliver products following a first time right approach. This will help in improvement in quality, reduction in rejection cost and thereby optimize cost structures across your Company.
(e) Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of the sEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this Report separately as an Annexure A.
(f) 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 31st March 2018.
3. 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 Appointments
The Company in its Board Meeting held on 3rd February, 2018, had appointed Mr. Tadayoshi Aoki (DIN: 08053387) nominated by stanley Electric Co. Ltd. as an Additional Director to be designated as senior Executive Director for a period of 3 years, liable to retire by rotation, with immediate effect which is subject to his regular appointment in the ensuing Annual General Meeting. The said appointment was recommended by Nomination and Remuneration Committee of the Board.
Mr. Tadayoshi Aoki aged 52 years is a Mechanical Engineer from Tokyo Denki University, Japan, possessing over 28 years of rich experience in the field of Car Electronics, Engineering, sales of car electronic parts and sales Planning Division.
The Company on recommendation of Nomination and Remuneration Committee and in its Board Meeting dated 31st March 2018, had appointed Mr. Vineet sahni (DIN: 03616096) as an Additional Director to be designated as CEO & senior Executive Director of the Company with effect from 1st April 2018 for a period of 5 years, liable to retire by rotation.
Mr. Vineet sahni is a B.E. Mechanical from Delhi College of Engineering and PG Diploma in Management from MsPI - Delhi. He has vast experience of successful Mergers & Acquisitions, managing overseas partner relationships, settingup Greenfield projects, rich organisational turnarounds, establishing strong relationships with OEMs across segments - domestic & global, having a 360-degree holistic approach to continually enhance stakeholder value.
The Board appointed Ms. Ankita Gupta as Company secretary of the Company w.e.f. February 3, 2018. she is a Law Graduate and an Associate Member of The Institute of Company secretaries of India (ICsI), having about 4.5 years of experience and knowledge in secretarial/legal functions.
Re-appointments
In accordance with the Articles of Association of the Company and section 152 of The Companies Act, 2013, Mr. Koji sawada (DIN: 07582189), Executive Director is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.
Cessations
During the year, Mr. Eiichi Hirooka (DIN: 03570733), senior Executive Director, ceased to be a Director of the Company w.e.f. 3rd February 2018. The Board of Directors place on record its appreciation towards Mr. Hirookaâs contributions during his tenure as senior Executive Director of the Company.
Mrs. Pallavi Dinodia Gupta (DIN: 03570733), Independent Director on the Board of the Company, ceased to be Director of the Company w.e.f. 28th May 2018. The Board of Directors place on record its appreciation towards her contributions during her tenure as an Independent Director of the Company.
Mr. shwetank Tiwari ceased to be Company secretary of the Company w.e.f. 12th November 2017. The Board took note of same in its Board Meeting held on 3rd February 2018.
(c) Number of Meetings of Board of Directors
The Board of Directors met Five (5) times during the Financial Year under review viz. 13th May 2017, 22nd July 2017, 4th November 2017, 3rd February 2018 and 31st March 2018. The maximum gap between any 2 meetings did not exceed 120 days.
A separate Meeting of Independent Directors was also conducted on 19th 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 Boardsâ Report as an Annexure B.
(d) 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 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) t hat 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.
(e) 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.
(f) Policy on Appointment and Remuneration of Directors
Pursuant to the provisions of section 178(1) of the Companies Act, 2013, the Board of Directors of the Company have approved a policy on Directorsâ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided u/s 178(3), based on the recommendations of the Nomination and Remuneration Committee.
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.
(g) Performance Evaluation of Board, Committee and Directors
In accordance with applicable provisions of The Companies Act, 2013 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 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 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 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.
(h) Audit Committee & Composition
As at 31st March 2018 the Audit Committee of Board comprised of seven (7) Members viz. Mr. A.P. Gandhi, Mr. M.C. Gupta, Mr. D.D. Gupta, Mr. Rattan Kapur, Mrs. Pallavi Dinodia Gupta, Mr. Deepak Jain and Mr. Tadayoshi Aoki. The details regarding changes and category of Members of Audit Committee had been stated in Corporate Governance Report which forms part as an Annexure B to this Report.
All the recommendations of Audit Committee made to the Board of Directors were duly accepted by it.
(i) Particulars of Contracts or Arrangements with Related Parties
For the Financial Year 2017-18, all the Related Party Transactions entered into by the Company were in ordinary course of business and at arms-length basis. 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.
The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval on quarterly basis. 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 sEBI (Listing Obligations & Disclosure Requirements), Regulations, 2015 (Listing Regulations).
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.
However, details of RPT undertaken by the Company which fall under the purview of âMaterialityâ as per Listing Regulations are attached in Form AOC-2 as an Annexure D to this Report.
Further, the shareholder approval on such Material RPT is proposed in the ensuing Annual General Meeting as stated under Regulation. The Company has formulated a policy on Related Party Transactions, which is available on the Companyâs website at http://www.lumaxindustries.com/pdf/ related-party-transaction-policy.pdf.
(j) 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 The 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 www.lumaxindustries.com. 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.
(k) 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.
(l) 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.
4. Internal Financial Controls & Adequacy
(a) Adequacy of Internal Financial Control with Reference to Internal Financial Statement
The Company has a comprehensive Internal Control system 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 built in place to ensure that such control systems are adequate and operate effectively.
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 variances notices 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 Companies Act, 2013 read together with the Companies (Indian Accounting standard) Rules, 2014. Changes in Accounting Policies, if any are approved by the Audit Committee in consultation with the statutory Auditors.
The Company get its standalone and Consolidated Financial statements reviewed every quarter by its statutory Auditors.
The Company uses an established sAP ERP HANA 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.
(b) 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 The Companies Act, 2013 and sEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also constituted a 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.
(c) Auditors
Statutory Auditors
M/s. BsR & Associates LLP, Chartered Accountants were appointed as statutory Auditors of your Company at the Annual General Meeting held on 22nd July, 2017, for a term of five consecutive years i.e. till the conclusion of 41st Annual General Meeting to be held in the year 2022.
In accordance with The Companies Amendment Act, 2017, enforced on 7th May 2018 by the Ministry of Corporate Affairs, the appointment of statutory Auditors is not required to be ratified at every Annual General Meeting.
Statutory Auditors Report
The Report given by the statutory Auditors on the Financial statement of the Company is part of this Annual Report. The Auditor Report does not contain any qualification, reservation, adverse remark or disclaimer.
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.
Cost Audit Report
The Cost Audit Report for the Financial Year 2016-17 has been filed with the Central Government within the stipulated time on 21st August 2017.
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. Maneesh Gupta, Practicing Company secretary as the secretarial Auditor of the Company to undertake the secretarial Audit for the Financial Year 2017-18.
Secretarial Audit Report
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.
(d) 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.
5. Corporate Social Responsibility (CSR) Policy and Initiatives
Your Companyâs Corporate Social Responsibility (CSR) is to give back to society and contribute to Nation Development through its initiatives.
The Companyâs CSR initiatives are implemented through its CSR arm/ trust, Lumax Charitable Foundation, with focus on education, empowerment of girl child through education and the healthcare, for disadvantaged section of society. During the year, your Companyâs spend on CSR activities is 2.03% of the average net profits during the three immediately preceding Financial Years.
The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of The 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 Companyâs website http://www.lumaxindustries.com/pdf/CSR-policy.pdf.
(a) Key Activities Education:
Working towards our endeavour to provide holistic education, the foundation works towards enrolment of girl child in schools, provides learning aids, starter kits, excursion trips and festival celebration as also infrastructure support after assessing the needs like, construction of classrooms, science laboratories, sanitation facilities, providing potable water etc. Inclusive learning opportunities, like that of e-learning is provided at the schools adopted by the foundation. The foundation also provides end-to-end career counselling that includes, aptitude tests, orientation sessions, one-on-one counselling sessions, etc. for students on the threshold of choosing career options, helping them choose suitable careers.
Health:
The Foundation has been operating a charitable Homeopathic clinic, organising specialised health camps in association with I-Care to conduct eye screening and provide cataract surgeries free of cost.
In association with Indian Cancer Society, the foundation has organized several cancer awareness camps and screening camps around our plants. The screening process includes blood profile and physical examination by a surgeon, gynecologist and ENT specialist as also radiology examination.
(b) Constitution of CSR Committee
During the Financial Year 2017-18, the Company has constituted CSR Committee of the Board of Directors which comprised of five (5) Members namely, Mr. M.C. Gupta, Mr. A.P. Gandhi, Mr. D.K. Jain, Mr. Deepak Jain and Mr. Anmol Jain. 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.lumaxindustries.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.
6. Other Disclosures
(a) Material Changes and Commitments
No other material changes and commitments affecting the Financial position of the Company have occurred between 1st April 2017 and the date on which this Report has been signed except that the Company has in its Board Meeting dated 28th May 2018 has approved purchase of Industrial Land in Bawal, Haryana for setting up electronics business from one of its Group Company.
(b) Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees and investments as on 31st March 2018 are covered under the provisions of Section 186 of The Companies Act, 2013 is given in the Notes to Financial statements of the Company.
(c) Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
In todayâs world, the Conservation of Energy has become need of an hour. With the growing operations, the commitment of the Company towards Energy Efficiency and conservation also continues to gain momentum. Your Company has a dedicated team in place which conducts significant in-house audits in various manufacturing units to assess and identify the possible areas for Energy Conservation and Management. These audits are further reviewed by External Agencies, who with their expertise and technical know how in the said area aid in better analysis of the areas having scope for Energy Conservation.
During the Financial Year under review, innovative ways and new technologies were constantly explored to achieve an optimum balance between the operations of the Company and the energy being used for running those operations. Lately, the concept of Internet of Things (IoT), which has evolved due to convergence of multiple technologies, real-time analysis, real time equipment energy efficiency monitoring, commodity sensors embedded systems etc., has gained wide importance and acceptance. Keeping its pace in line with IoT, the Company successfully implemented an Energy Management I- Cloud software in its two (2) units viz. Bawal and Chakan which tracks actual consumption of energy on real time basis and enables to identify excess energy being used or any other related errors in the unit which was successfully commissioned during the Financial Year 2017-18.
As a way forward, your Company shall continue to remain conscious of the environmental impact of its business activities and has plans to install the software across all its other units to have a uniform and enhanced focus towards Conservation of Energy.
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 H.
(d) Extract of Annual Return
I n accordance with the requirement of section 92 of The 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 I.
(e) Details of 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.
(f) Names of Companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Year
During the Financial Year 2017-18, there were no Companies which became subsidiary or Joint Venture of the Company, neither the Associate Company ceased to be an Associate of the Company.
(g) 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 Grant Thornton, India LLP as Internal Auditors for the Financial Year 2017-18.
(h) 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.
(i) Policy on Sexual Harassment
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 Twenty-three (23) 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 works with full 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 and correction, incident reporting and 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, your Company is also performing below activities sincerely since 2015:
- Regional safety Meeting for all regions.
- sT/ 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
The Company has Constructed world class lacquer storage room to store the hazardous chemical safely (where flammable liquids\chemicals are used) and installed sprinkler system in surface Treatment all across.
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.
During the year under review, our Manufacturing Units situated in Gurugram, Dharuhera, Bawal, Chakan and Bangalore achieved OHsAs Certification.
(k) Investor Education and Protection Fund
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 (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.3,70,590 / 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, 59964 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 declared on 9th August 2011, can be claimed by the Members by 13th September 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 has been published in the Newspaper inviting the attention of the Shareholders to claim their Dividends.
(l) Unclaimed Suspense Account
During the year under review, there are 10 shareholders who approached the Company for release of their shares from the Unclaimed suspense Account and the Company has released total 407 shares from the Unclaimed suspense Account. As at 31st March 2018, there are 5123 shares lying in the Unclaimed suspense Account.
(m) 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.
Acknowledgement
We would like to thank to all our Stakeholders viz. Shareholders, Investors Bankers, customers, suppliers, Government agencies, stock exchanges and depositories, Auditors, legal advisors, consultants, business associates, service providers for their continued commitment, and invincible enthusiasm which made this year productive and pleasurable. The Board also places on record, their deep sense of appreciation towards all its Employees at all levels for adopting the values of the Company and their hard work during the year and a sincere thanks to its Technical & Financial Collaborator-Stanley Electric Co. Ltd. for their continued support and patronage throughout the year.
For and on behalf of the Board of Directors of
Lumax Industries Limited
Deepak Jain
Place : New Delhi Chairman & Managing Director
Dated : 28th May 2018 DIN: 00004972
Mar 31, 2017
The Directors are pleased to present the 36th 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, 2017.
Financial Results
Your Company''s performance during the year as compared with the previous year is summarized below:
(Rs. in Million)
|
Particulars |
2016-17 |
2015-16 |
|
Net Sales |
12,997.81 |
12,551.75 |
|
EBITDA |
1059.95 |
929.27 |
|
Financial Expenses |
114.10 |
134.38 |
|
Depreciation/Amortization/Impairment Loss |
404.25 |
378.99 |
|
Profit Before Tax (PBT) |
541.60 |
415.90 |
|
Provision for Tax |
89.76 |
42.16 |
|
Profit After Tax (PAT) |
451.84 |
373.74 |
|
Balance of Profit brought forward |
554.42 |
353.20 |
|
Balance Available for Appropriation |
1006.26 |
726.94 |
|
Appropriations |
|
|
|
Dividend |
- |
112.17 |
|
Corporate Dividend Tax |
- |
22.84 |
|
Transfer to General Reserve |
54.20 |
37.50 |
|
Balance Carried to Balance Sheet |
952.06 |
554.43 |
|
|
1006.26 |
726.94 |
|
Dividend (%) |
145 |
120 |
|
Basic and Diluted Earning Per Share (EPS) (?) |
48.34 |
39.98 |
DIVIDEND
The Company continues to deliver progressive returns to the Shareholders. The Board of Directors are pleased to recommend a Dividend of 145% (Rs.14.50/- per Equity Share) for the Financial Year 2016-17 ('' 12/- per Equity Share in the previous year). The total amount of Dividend proposed to be distributed, aggregates to Rs.163.13 Million (Including Dividend Tax).The Dividend payout ratio comes to 36.10%.
A sum of Rs.54.20 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.
BUSINESS PERFORMANCE
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 positive sentiment is driven primarily by the rural and semi-urban demand for two-wheelers and cars, driven on the back of good monsoons. Another boost up will be the 7th pay commission that will infuse around '' 1.02 trillion of disposable income of over 1 crore employees. Another reason is the aggressive play by the cab aggregators who are expanding their operations extensively.
The Indian Auto Component industry is also expected to grow by 8-10% in Financial Year 2017-18, based on higher localisation by Original Equipment Manufacturers (OEM), higher component content per vehicle, and rising exports from India. The Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80-US$ 100 billion by 2026, from the current US$ 11.2 billion. (Source: ICRA Reports)
During the year under review, the Indian Automobile Industry recorded a production growth of 5.41% as compared to 2.58% of the corresponding period last year. The industry produced around 25.31 Million vehicles of which share of two wheelers were 79%, passenger vehicles-15%, three wheelers- 3% and commercial vehicles- 3%.
In this backdrop, during the year under review, your Company recorded a sales turnover of Rs.12997.81 Million as against Rs.12551.75 Million in the corresponding year registering a growth of 3.56%. The profit for the year after tax recorded at Rs.451.84 Million as compared to Rs.373.74 Million during the previous year registering an excellent growth of 20.90%.
CAPACITY EXPANSION / MODERNISATION OF FACILITIES
During the year under review, the Company has made investment to the tune of '' 654 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including Bawal, Dharuhera and Chakan plants.
The Company has set-up its first international state-of-the-art Design centre in Taiwan in May, 2016, as a strategic move to expand its presence across the globe and strengthen the synergies of cost and technology.
During the year under review, the Company has also approved investment of about Rs.120 crores to its existing plant at Sanand, which was set-up in the year 2011 for supplies to Tata Nano and which was non-operational due to subdued volumes of Tata Nano. The plant is expected to commence operations from November 2017, for supplies to Suzuki Motors, Gujarat and will also cater to Tata Motors Limited and Honda Motorcycle and Scooter India Limited, at a later stage. The investment will spread over a period of 2 years i.e. Financial Year 2017-18 and Financial Year 2018-19.
A detailed discussion on the business performance and future outlook is provided in the Chapter on Management Discussion & Analysis Report (MDA).
TECHNOLOGY AND QUALITY
Your Company continues to excel in Design, Development and New Product launches, in line with its strategy towards delivering competitive advantage to the customer and to meet its business objectives. The management ensures that the engineers of your Company are fully aligned with the organizationâs strategy and towards this end, the Company has started to celebrate September 15th as Innovation day, as a tribute to the greatest engineer Bharat Ratna, Late Shri M. Visvesvaraya. This step will ensure building in-house engineering and design capability.
In order to continuously create value for our customers in today''s intense competitive environment, your Company has launched Zero Defect & Zero Effect initiative to deliver products, first time right to its customers. This will help in improvement in quality, reduction in rejection cost and thereby optimize cost structures across your Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Eiichi Hirooka, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The tenure of Mr. Eiichi Hirooka, Senior Executive Director is expiring on July 26, 2017. The Board recommends to reappoint Mr. Eiichi Hirooka as Senior Executive Director for a further period of 3 years w.e.f. July 27, 2017, subject to the approval of the members in the ensuing Annual General Meeting.
Stanley Electric Co., Ltd. (Stanley) had withdrawn the nomination of Mr. Norihisa Sato, Executive Director from the Board of the Company. Consequently, Mr. Norihisa Sato resigned from the Board of the Company w.e.f. 08-08-2016. The Board of Directors places on record its appreciation for the valuable services rendered by Mr. Norihisa Sato during his tenure as Executive Director.
Stanley nominated Mr. Koji Sawada in place of Mr. Norihisa Sato. Pursuant to his nomination, the Board of Directors have appointed Mr. Koji Sawada, as additional Director as well as Executive Director w.e.f. 09-08-2016, for the time being, on the Board of the Company at their meeting held on August 8, 2016, subject to his regular appointment in the Annual General Meeting.
Mr. Koji Sawada, aged 54 years, is a Graduate from Osaka Institute of Technology, Japan, having over 30 years of rich experience in Quality Control and Lamp assembly. He joined Stanley, Japan in 1986 and has abundant experience and knowledge in the automobile lighting field.
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Koji Sawada holds office till the ensuing Annual General Meeting. The Company has received Notice in respect of Mr. Koji Sawada from a member under Section 160 of the Companies Act, 2013 proposing his appointment as Director of the Company liable to retire by rotation.
Mr. Gursaran Singh, Independent Director on the Board of the Company since January, 2003 has resigned from the position of Independent Director due to his other commitments w.e.f. April 19, 2017. His resignation was accepted and taken on record by the board in its meeting held on May 13, 2017.
The Board places on record its sincere appreciation and gratitude for the valuable guidance received from Mr. Gursaran Singh during his tenure as Independent Director on the board of your Company.
The Board has appointed Mr. Rajeev Kapoor as an additional director, w.e.f. May 13, 2017 designated as an Independent Director, for the time being, on the Board of the Company at their meeting held on May 13, 2017, subject to his regular appointment in the Annual General Meeting.
Mr. Rajeev Kapoor, aged 65 years, is a B.E. (Mechanical) (Hons.) from NIT, Kurukshetra, having extensive experience of over 40 years in Automotive, Engineering and FMCG, Corporations with specific skills in General Management, Marketing / Brand Management, Performance Analysis, HRD, Business Development, Innovation and Change Management. He is credited with Launch of Fiat and Copart Businesses from Greenfield stage and developing them to sustainable level.
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Rajeev Kapoor holds office till the ensuing Annual General Meeting. The Company has received a Notice in respect of Mr. Rajeev Kapoor, from a member under Section 160 of the Companies Act, 2013 proposing his appointment as Director of the Company for five consecutive years w.e.f. May 13, 2017, not liable to retire by rotation.
Your Directors recommend the re-appointment/ appointment of the above Directors 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.
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 - A.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of 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. Further, according to the Rules, 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 is available on the Company''s website http://www. lumaxindustries.com/investor/iepf-investor-details.html.
NUMBER OF BOARD MEETINGS
The Board of Directors met 5 (Five) times in the Financial year 2016-17. 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 March 31, 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.
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 August 22, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 3 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 fourth consecutive Annual General Meeting of the Company to be held in the year 2017. The tenure of M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors is expiring in the ensuing Annual General Meeting proposed to be held on July 22, 2017.
In terms of the provisions of Section 139 of Companies Act, 2013 and the Rules made there under regarding mandatory retirement of statutory auditors, your Directors proposed to appoint BSR & Associates LLP, Chartered Accountants (Firm Registration No. 116231W/ W-100024) as the Statutory auditors of the Company. BSR & Associates LLP will hold office of auditors for a period of 5 consecutive years from the conclusion of 36th Annual General Meeting of the Company scheduled to be held on July 22, 2017, till the conclusion of the 41st Annual General Meeting of the Company to be held in the year 2022, subject to the approval of shareholders of the Company. 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 141 of the Companies Act, 2013. The Audit Committee in its meeting held on May 13, 2017 has also recommended the appointment of BSR & Associates LLP, as Statutory Auditors of the Company. Your Directors also recommend for 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 6, 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. Maneesh Gupta, Practising 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 - 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 company has consolidated the Financial Statements of its Associate Company SL Lumax Limited with its financials in accordance with the provisions of Companies Act, 2013. 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 are available on the website of the Company i.e. www.lumaxindustries.com. These documents shall also be available for inspection by any shareholder at the registered office of the Company.
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. lumaxindustries.com/pdf/related-party-transaction-policy. pdf. 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. 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 Companies Act, 2013 and Listing Regulations.
All related party transactions entered during the financial year were in the ordinary course of business and on arm''s length basis. There have been no material related party transactions undertaken by the Company during the year. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013.
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 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.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2017 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 - C.
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 a 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.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
Your Company''s Corporate Social Responsibility (CSR) initiative is about achieving organisation excellence in ways that honor ethical values and respect people and communities. The Company''s CSR programmes are being implemented through its CSR arm Lumax Charitable Foundation. The key focus areas of your Company are education, promotion of girl chid and the healthcare, for disadvantaged section of the society. During the year, your Company''s spend on CSR activities is 1.80% of the average net profits during the three immediately preceding financial years. Your Company endeavoured 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.lumaxindustries.com/pdf/CSR-policy.pdf. The annual report on Corporate Social Responsibility activities is annexed herewith as Annexure-D.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
During the year, the evaluation of the Board as a whole, committees and all the Directors 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. The feedback of the evaluation exercise was collated and presented to the Board.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - E.
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 in place for ensuring 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 built in place to ensure that such control systems are adequate and operate 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.
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 - F.
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-G. 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
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. We want to recognize employees at all levels for their efforts, which has allowed us to successfully navigate a tough economy and continue to achieve growth. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator-M/s Stanley Electric Co., Ltd., Japan, all other business partners, all the shareholders, financial institutions, banks, vendors and various Government agencies for their continued support and patronage.
For and on behalf of the Board of Directors
D.K. Jain
Place : Gurugram Chairman
Dated : May 13, 2017 DIN: 00085848
Mar 31, 2016
TO THE MEMBERS,
The Directors are pleased to present the 35th 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, 2016.
Financial Results
Your Company''s performance during the year as compared with the previous year is summarized below:
(RS, in Million)
|
Particulars |
2015-16 |
2014-15 |
|
Net Sales |
12551.75 |
11425.59 |
|
EBITDA |
929.27 |
648.62 |
|
Financial Expenses |
134.38 |
144.30 |
|
Depreciation/Amortization/Impairment Loss |
378.99 |
361.58 |
|
Profit Before Tax (PBT) |
415.90 |
142.74 |
|
Provision for Tax |
42.16 |
(22.99) |
|
Profit After Tax (PAT) |
373.74 |
165.73 |
|
Balance of Profit brought forward |
353.20 |
299.26 |
|
Less: Adjustment related to transitional provision (Schedule II of Companies Act, 2013) |
- |
33.31 |
|
Balance Available for Appropriation |
726.94 |
431.68 |
|
Appropriations |
||
|
Dividend |
112.17 |
51.41 |
|
Corporate Dividend Tax |
22.84 |
10.47 |
|
Transfer to General Reserve |
37.50 |
16.60 |
|
Balance Carried to Balance Sheet |
554.43 |
353.20 |
|
726.94 |
431.68 |
|
|
Dividend (%) |
120 |
55 |
|
Basic and Diluted Earnings Per Share (EPS) (H) |
39.98 |
17.73 |
Dividend
The Company continues to deliver progressive returns to the Shareholders. The Board of Directors recommend that Interim Dividend of 120% (RS,12/- per Equity Share) declared on March 12, 2016 for the Financial Year 201516, be considered as Final Dividend. No further dividends are proposed/ recommended by the Board. The total amount of Dividend distributed aggregates to H 135.00 Million (Including Dividend Tax). The Dividend payout ratio comes to 36.12%.
A sum of H37.50 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your Company.
Business Performance
After a subdued growth of about 2.8% during FY16, Indian auto-component industry is likely to gain momentum and register a growth of 10% in the current fiscal FY17, with some traction in the passenger vehicle (PV) and motorcycle segments. Over the medium to long term, growth in the auto component industry is expected to be higher than the underlying automotive industry growth, given the increasing localization by OEMs, higher component content per vehicle and rising exports from India. Over the medium term, operating margins are expected to stabilize at around 13.5%-14% level, given bottoming out of commodity prices in the current year. The implementation of the 7th Pay Commission is expected to support urban/ semi-urban segments like PV and scooter, whereas rural demand will be driven by expected above-average monsoon. In exports, robust demand for PV in North America as well as Europe is likely to offset expected decline in the M&HCV segment in those markets. Relatively better OE and exports demand, coupled with stable aftermarket demand, is likely to drive overall auto component industry growth in FY17. (ICRA reports)
During the year under review, the Indian Automobile Industry recorded a production growth of 2.58% as compared to 8.68% of the corresponding period last year. The industry produced around 23.96 Million vehicles of which share of two wheelers were 79%, passenger vehicles- 14%, three wheelers- 4% and commercial vehicles- 3%.
In this backdrop, during the year under review, your Company recorded a sales turnover of RS, 12551.75 Million as against RS, 11425.59 Million in the corresponding year registering a growth of 9.86%. The profit for the year after tax recorded at RS, 373.74 Million as compared to RS, 165.73 Million during the previous year registering an excellent growth of 125.51%.
Capacity Expansion / Modernization of Facilities
During the year under review, the Company has made investment to the tune of RS, 518 million towards up-gradation of its Research and Development facilities, modernization of its existing manufacturing facilities including its Bawal, Dharuhera and Chakan plants.
A detailed discussion on the business performance and future outlook is provided in the Chapter on Management Discussion & Analysis Report (MDA).
Vendor Development
The auto industry is heavily dependent on the auto component manufacturers and thus, the quality of final automobile is replica of the quality of the product supplied by auto component manufacturers. In order to ensure the quality, it becomes essential for the auto component manufacturers that their suppliers should be technologically as well as technically sound, must have capable manufacturing facility and must be using quality management techniques at par with global standard. The Company in its continuous efforts to upgrade its Vendors has started Sadbhav initiative, wherein a supplier council was formed to work closely with them and to support them to work more efficiently.
This initiative is focused towards achieving long-term cooperative effort between the company and its Vendors and to upgrade their technical, quality, delivery and cost capabilities and to foster ongoing improvements. In the auto component industry quality, cost and on-time delivery are considered as most important factors and focus on Vendor development will not only reduce cost but also ensure timely deliveries.
Directors & Key Managerial Personnel
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mr. Norihisa Sato and Mr. Toru Tanabe, Directors are retiring by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
The tenure of Mr. Deepak Jain, Managing Director expired on January 31, 2016. The Board reappointed Mr. Deepak Jain as Managing Director for a further period of 5 years w.e.f. February 1, 2016, subject to the approval of the members in the ensuing Annual General Meeting.
Further, the tenure of Mr. Anmol Jain, Joint Managing Director is expiring on July 31, 2016. The Board recommends to reappoint Mr. Anmol Jain as Joint Managing Director for a further period of 5 years w.e.f. August 1, 2016, subject to the approval of the members in the ensuing Annual General Meeting.
Your Directors recommend the re-appointment of the above Directors 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.
Mr. B.S. Bhadauriya, Company Secretary of the Company since January 1, 2007 ceased to be the Company Secretary w.e.f. July 31, 2015 for taking up higher responsibilities at group level after restructuring. The Board has appointed Mr. Shwetank Tiwari as Company Secretary of the Company w.e.f. August 1, 2015. Mr. Shwetank Tiwari is a Law Graduate and an Associate Member of The Institute of Company Secretaries of India (ICSI), having about 10 years of experience and knowledge in secretarial functions.
Extract of Annual Return
In accordance with the requirement of Section 92 of the 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 5 (Five) times in the Financial year 2015-16. 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, 2016, 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.
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 August 22, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 3 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 fourth consecutive Annual General Meeting of the Company to be held in the year 2017, 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 2015-16.
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. Maneesh Gupta, Practising Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2015-16. 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 company has Consolidated the Financials Statements of its Associate Company SL Lumax Limited with its financials first time in accordance with the provisions of Companies Act, 2013. 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 are available on the website of the Company i.e. www.lumaxindustries.com. These documents shall also be available for inspection by any shareholder at the registered office of the Company.
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. lumaxindustries.com/pdf/related-party-transaction-policy. pdf. 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. 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 Companies Act, 2013 and Listing Regulations.
All related party transactions entered during the financial year were in the ordinary course of business and on arm''s length basis. There have been no material related party transactions undertaken by the Company during the year. Accordingly, no transactions are being reported in Form No. AOC-2 in terms of Section 134 of the Companies Act, 2013.
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 behavior, 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.
Material Changes and Commitments
No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2016 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 - C.
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 a 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.
Corporate Social Responsibility (CSR) Policy and Initiatives
Your Company believes that corporate social responsibility programs reflect the human side of corporate, and the management''s personal commitments to contribute to the community and society of which they are a part. A well-managed CSR program creates social and environmental value, while supporting a company''s key stakeholders.
Your Company''s Corporate Social Responsibility (CSR) programs has been planned with focused approach of community participation. The key focus areas of your Company are education, promotion of girl chid and the healthcare of disadvantaged section of the society.
The company''s 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 fees of girl children, E-learning centre, contributing towards infrastructure and other facilities for students in the school. 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.
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. A detailed Report on Corporate Social Responsibility is annexed herewith as Annexure-D.
Performance Evaluation of Board, Committee and Directors
The Board is committed to transparency in determining its performance, committees and in assessing the performance of members. During the year, the Board with the assistance of Nomination and Remuneration Committee has completed the evaluation exercise, which includes the evaluation of the Board as a whole, committees and Directors, 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 need to balance its monitoring activities with discussion on strategic matters was recognized and ought to be continually borne in mind. The evaluation considers the balance of skills, experience, independence and knowledge of the Company and the Board, its overall diversity, and analysis of the Board and its Directors'' functioning.
The feedback of the evaluation exercise was collated and discussed with the Board and an action plan to further improve the effectiveness of Board and committees is put in place.
Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of the SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure - E.
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 in place for ensuring 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 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.
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 - F.
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-G. 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
We are confident that our actions will develop a robust business model, which will help the company deliver solid results in the years to come. Your Directors wish to place on record their sincere thanks to all its highly valued customers, its Technical and Financial Collaborator-M/s Stanley Electric Co. Ltd., Japan, 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 tireless efforts of its associates and employees across all levels for their wholehearted dedication and contribution for the growth of the Company.
For and on behalf of the Board of Directors
Place : New Delhi D.K. Jain
Dated : May 12, 2016 Chairman
DIN: 00085848
Mar 31, 2015
Dear MEMBERS,
The Directors are pleased to present the 34th 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, 2015.
FINANCIAL RESULTS
Your Company''s performance during the year as compared with the
previous year is summarized below:
Rupees in Million
Particulars 2014-15 2013-14
Net Sales 11425.59 11166.98
EBITDA 648.62 578.23
Financial Expenses 144.30 174.11
Depreciation/Amortisation/
Impairment Loss 361.58 366.21
Profit Before Tax (PBT) 142.74 37.91
Provision for Tax (22.99) (39.08)
Profit After Tax (PAT) 165.73 76.99
Balance of Profit brought forward 299.26 268.25
Less: Adjustment related to
transitional provision (Schedule II of 33.31 -
Companies Act, 2013)
Balance Available for Appropriation 431.68 345.24
Appropriations
Dividend 51.41 32.72
Corporate Dividend Tax 10.47 5.56
Transfer to General Reserve 16.60 7.70
Balance Carried to Balance Sheet 353.20 299.26
431.68 345.24
Dividend (%) 55 35
Basic and Diluted Earning Per Share (EPS)(Rs.) 17.73 8.24
DIVIDEND
The Company continues to deliver progressive returns to the
shareholders. The Board of Directors are pleased to recommend a
Dividend of 55% (Rs.5.50/- per Equity Share) for the Financial Year
2014-15 (Rs.3.50/- per Share in the previous year). The total amount of
Dividend proposed to be distributed, aggregates to Rs. 61.88 Million
(Including Dividend Tax). The Dividend payout ratio comes to 37.33%.
A sum of Rs.16.60 Million has been transferred to the General Reserve
of the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
The domestic automobile industry is slowly recovering from the slowdown
witnessed over the last two fiscals (FY13 & FY14) against the backdrop
of a slowing economy and inflationary pressures, which resulted in
lower disposable income and hence consumption. The Indian auto
component industry size is estimated at Rs. 2.12 trillion, out of which
domestic OEM segment accounts for 54% of revenue. Amongst various
automotive segments, medium & heavy commercial vehicle (M&HCV) and
passenger vehicle (PV) segment constitute over 55% of revenue share of
auto component supplies to OEMs. After witnessing demand slowdown
during FY13-14, both these segments have posted healthy volume growth
during FY15, however, momentum has slowed down in the two wheeler
segment (2W), which constitute a sizable ~11% of overall industry
turnover. With strong recovery in domestic M&HCV industry during FY15
and healthy growth by major OEMs in the PV segment, the auto ancillary
companies have also witnessed robust revenue growth during FY15. 1
Over the medium term, the auto ancillary industry''s revenues are
expected to grow at a relatively faster pace than the OEM segment riding
on several factors including auto OEMs'' growing thrust on localization,
the Make in India policy, auto suppliers'' efforts to expand business in
new geographies, the strong upside potential to replacement market
demand and increasing sophistication of vehicles necessitating higher
value added inputs.
During the year under review, the Indian Automobile Industry recorded a
production growth of 8.68% as compared to 4% of the corresponding
period last year. The industry produced around 23.36 Million vehicles
of which share of two wheelers were 79%, passenger vehicles - 14%,
three wheelers - 4% and commercial vehicles - 3%. 2
In this backdrop, during the year under review, your Company recorded a
sales turnover of Rs. 11,425.59 Million as against Rs. 11,166.98
Million in the corresponding year registering a growth of 2.31%. The
profit for the year after tax stood at Rs. 165.73 Million as compared
to Rs. 76.99 Million during the previous year registering a growth of
115.26%.
CAPACITY EXPANSION / MODERNISATION OF FACILITIES
During the year under review, the Company has made investment to the
tune of Rs. 524 million towards up-gradation of its Research and
Development facilities, modernization of its existing manufacturing
facilities including Bangalore, Bawal and Dharuhera plants.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
SUPPLY CHAIN MANAGEMENT
The rapid transformation and globalization of the Indian auto industry
has resulted in significant opportunities and challenges for players in
managing their supply chains. The industry landscape is exposed to a
set of critical challenges and trends that are leading, if not
accelerating, the need to fine-tune supply chain strategies and
operations even further. The increasing requirement for real-time
information and effective communication across the supply network is
critical for managing and optimizing the supply chain on a flexible
basis, while keeping costs under control.
In the area of supply planning, your Company focuses on integrating the
end-to-end supply chain, improving transparency, identify and develop
relationships with strong logistics service providers and improvement
in process efficiencies. To achieve this objective, your company
organizes Annual Supplier Meet as a platform where the management
shares the company''s plans and their expectation with the suppliers.
Furthermore, the concerns of the company and those of suppliers were
also addressed in this meet during the year.
During the year, your Company has started an initiative to support the
suppliers with early payables through dedicated finance schemes and
annual negotiations. In conjunction with other continuous improvement
initiatives, this has helped your company to maintain a healthy working
capital position.
QUALITY INITIATIVES
Total Productive Maintenance (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. In its journey
towards TPM, the Pantnagar plant has received the prestigious JIPM TPM
Excellence award from Japan Institute of Plant Maintenance (JIPM). This
is one of the most significant achievements of the Company in this
journey.
During the year under review, your Company has launched Quality Control
Circle (QCC) initiative as a way to Quality Improvement aiming
significant improvement in quality and productivity, horizontal
deployment of POKA-YOKE with total employees involvement. This
initiative shall provide a platform to the associates to perform other
than routine work,convert their ideas into reality and get recognized.
Your Company expects that this initiative will lead to heightened
quality awareness in the company, which will translate into higher
profits for the company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
In accordance with the Articles of Association of the Company and the
Companies Act, 2013, Mr. Norihisa Sato, Director is retiring by
rotation at the ensuing Annual General Meeting and being eligible,
offers himself for re-appointment.
The tenure of Mr. Eiichi Hirooka, Senior Executive Director expired on
July 26, 2014. The Board reappointed Mr. Eiichi Hirooka as Senior
Executive Director for a further period of 3 years w.e.f July 27, 2014,
subject to the approval of the members in the ensuing Annual General
Meeting.
The Board of Directors of the Company, at their meeting held on August
13, 2014, approved the elevation of Mr. Anmol Jain from ''Senior
Executive Director'' to ''Joint Managing Director'' with effect from
August 13, 2014. He shall hold the office as ''Joint Managing Director''
for his remaining tenure i.e. up to July 31,2016 on the same terms and
conditions including remuneration as approved by the members at their
meeting held on August 9, 2011.
Mr. Suman Jyoti Khaitan, Independent Director on the Board of the
Company since January, 2003 has resigned from the position of
Independent Director w.e.f July 21,2014 due to his other pressing
engagements. His resignation was accepted and taken on record by the
board in its meeting held on August 13, 2014.
The Board places on record its sincere appreciation and gratitude for
the valuable guidance received from him during his tenure as
Independent Director.
The Board has appointed Ms. Pallavi Dinodia as an additional director,
in the category of Women Director, w.e.f. August 23, 2014 (Designated
as an Independent Director), on the Board of the Company at their
meeting held on August 13, 2014, subject to her regular appointment in
the ensuing Annual General Meeting.
Ms. Pallavi Dinodia, aged 33 years, is a B.Com. (H) from Lady Shriram
College of Commerce, New Delhi, Law Graduate from Delhi University and
a Fellow member of the Institute of Chartered Accountants of India
(ICAI), having about 12 years of rich experience and knowledge in
International Taxation, Transfer Pricing and cross border transactions
with special reference to Double Taxation Avoidance Agreements. She is
also actively involved in the domestic taxation in the practice.
She is a Partner with S.R. Dinodia & Co. LLP, Chartered Accountants.
She is also currently a Board member of an international alliance of
accounting, tax, and consulting firms called MGI.
In accordance with the Articles of Association of the Company and the
Companies Act, 2013, Ms. Pallavi Dinodia hold office till the ensuing
Annual General Meeting. The Company has received a Notice in respect of
Ms. Pallavi Dinodia, from a member under Section 160 of the Companies
Act, 2013 proposing her appointment as Director of the Company for five
consecutive years w.e.f. August 23, 2014, not 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, had appointed Mr.
Sanjay Mehta as Chief Financial Officer (CFO) of the company w.e.f.
June 1,2014 at their meeting held on May 30, 2014. Mr. Sanjay Mehta
ceased to be the CFO of the Company w.e.f. March 28, 2015.
The Board, on recommendation of Audit Committee, has appointed Mr.
Shruti Kant Rustagi as Chief Financial Officer (CFO) of the company
w.e.f. May 23, 2015. Mr. Shruti Kant Rustagi, aged 45 years, is a
B.com. (H) and a Fellow member of the Institute of Chartered
Accountants of India (ICAI), having about 22 years of rich experience
and knowledge in the field of Accounts and Finance.
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, 2015, 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 reqiured 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) 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.
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 August 22, 2014 had appointed M/s
S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors
of the Company for a period of 3 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 fourth consecutive Annual General
Meeting of the Company to be held in the year 2017, 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.
The explanations of your Board of Directors on the Auditor''s
observations as contained in their report, read with the relevant notes
to accounts are as follows:
i. With reference to the observations of the Auditor in Para (vii)(a)
to the Annexure of their Report regarding slight delay in deposit
of Statutory Dues, it is informed that the said dues have since been
paid.
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 within the stipulated time on
September 27, 2014.
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.Maneesh Gupta,
Practising Company Secretary 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.
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.
There are no material contracts, arrangements or transactions made by
the Company with its related parties, which may have a potential
conflict with the interest of the company at large. Accordingly no
transactions are being reported in form No. AOC-2 in terms of section
134 of the Comapnies Act 2013 read with companies (Accounts) rules
2014.
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 Company has developed an internal
Purchase Policy for transaction with related parties for purpose of
identification and monitoring of such transactions. 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:
http://www.lumaxindustries.com/pdf/related-partv-transaction-policv.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
- C.
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, from time to time, carries study on Enterprise Risk
Management of the organization and has developed a comprehensive Risk
identification framework for the organization with the expert advice
and guidance of its Internal auditors. Under the frame work various
risk events have been identified for various functions and mitigation
plans have been put in place.
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 Audit department and 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 Audit department and 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''s corporate social responsibility (CSR) programs promotes
a vision of business accountability to a wide range of stakeholders,
besides shareholders and investors. The key focus areas of your Company
are Education, Girl Child and healthcare 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, your Company continued to
support to the schools by 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 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 a
phased manner in the coming years. The Annual Report on CSR activities
is annexed herewith as Annexure-D.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
Good governance requires boards to have effective processes and to
evaluate their performance and appraise directors from time to time.
The evaluation process is a constructive mechanism for improving board
effectiveness, maximising strengths and tackling weaknesses, leading to
an immediate improvement in performance throughout the organisation.
The evaluation process check that there are proper board procedures in
place, with all directors fully understanding their role and having the
special skills that directors need.
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 covers 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 responses and present the same to the Board. The committee
also undertakes 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 - E.
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
Internal Control Culture is pervasive in the company. 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.
The Internal Audit department also assesses opportunities for
improvement in business processes, systems and controls, provides
recommendations, designed to add value to the organization and follows
up on the implementation of corrective actions and improvements in
business processes after review by the Internal Auditors.
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 - F.
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- G.
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
At Lumax, we are adopting state-of-the-art technology and engaging a
highly passionate workforce to constantly enhance positive customer
experience. We will continue to make every effort to further enhance
our technological capabilities in our continuous pursuit for quality
excellence. Your Directors wish to place on record their sincere thanks
to all its highly valued customers, its Technical and Financial
Collaborator- M/s Stanley Electric Co. Ltd., Japan, all other business
partners, 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 and
commitment rendered by all the associates and employees of the Company
for their wholehearted efforts and contribution for the growth of the
Company.
For and on behalf of the Board of Directors
Place : Gurgaon D.K. JAIN
Dated : May 23, 2015 Chairman
DIN : 00085848
Mar 31, 2014
The Directors are pleased to present the 33rd 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, 2014.
FINANCIAL RESULTS
Your Companies performance during the year as compared with the
previous year is summarized below:
Rupees in Million
Particulars 2013-14 2012-13
Net Sales 11166.98 10702.06
EBITDA 578.23 657.63
Financial Expenses 174.11 185.73
Depreciation/Amortisation/
Impairment Loss 366.21 316.27
Profit Before Tax (PBT) 37.91 155.63
Provision for Tax (39.08) 19.78
Profit After Tax (PAT) 76.99 135.85
Balance of Profit brought forward 268.25 195.44
Balance Available for Appropriation 345.24 331.29
Appropriations
Dividend 32.72 42.06
Corporate Dividend Tax 5.56 7.15
Transfer to General Reserve 7.70 13.83
Balance Carried to Balance Sheet 299.26 268.25
345.24 331.29
Dividend (%) 35 45
Basic and Diluted Earning Per Share
(EPS)(Rs.) 8.24 14.53
DIVIDEND
Keeping in view of the philosophy of the Company to reward its
shareholders and to continue the tradition of recommending dividend for
the last 29 years, the Board of Directors are pleased to recommend a
Dividend of 35% (Rs.3.50/- per Equity Share) for the Financial Year
2013-14 (Rs.4.50/- per share in the previous year). The total amount of
Dividend proposed to be distributed aggregates to Rs. 38.28 Million
(including Dividend Tax). The Dividend payout ratio comes to 49.72%.
A sum of Rs. 7.70 Million has been transferred to the General Reserve
of the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
The Indian automobile industry has witnessed a period of sluggish
demand for almost three consecutive years with signs of recovery still
appearing distant. As auto component manufacturers derive over 60% of
their revenues from supplies to the domestic auto Original Equipment
Manufacturers (OEMs), the ongoing weakness in demand for new vehicles
has accordingly had an adverse impact on revenue growth of suppliers.
Amongst segments, the Commercial Vehicle (CV) segment has been the
worst impacted. The Passenger Vehicle (PV) segment had recorded
positive volume growth (although in low single digits) in 2011-12 and
2012-13, but growth turned negative (-6.05% YoY) in 2013-14. Over the
medium term, the auto components industry''s revenues are expected to
grow at a relatively faster pace than the OEM segment riding on several
factors including auto OEMs'' growing thrust on localization, auto
suppliers'' efforts to expand business in new geographies, the strong
upside potential to replacement market demand and increasing
sophistication of vehicles shoring up part prices.1
During the year under review, the Indian Automobile Industry recorded a
production growth of 4% as compared to 1.20% of the corresponding
period last year. The industry produced around 21.48 Million vehicles
of which share of two wheelers were 79%, passenger vehicles - 14%,
three wheelers - 4% and commercial vehicles - 3%.2
In this backdrop, during the year under review, your Company recorded a
sales turnover of Rs. 11166.98 Million registering a growth of 4.34%,
which is in line with the industry growth. The profit for the year
after tax stood at Rs. 76.99 Million as compared to Rs. 135.85 Million
during the previous year.
CAPACITY EXPANSION / MODERNISATION OF FACILITIES
During the year under review, the Company has made investment to the
tune of Rs. 214 million towards up-gradation of its Research and
Development facilities, modernization of its existing manufacturing
facilities including Dharuhera and Bangalore plants.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
QUALITY INITIATIVES
Total Productive Maintenance (TPM) aims to create a culture and
environment, which constantly tries to maximize the effectiveness of
the entire production system by using a hands-on approach to build a
"Zero accident, Zero defect & Zero breakdown" system. It is designed to
pre-empt losses of all types throughout the life cycle of the
production system which includes development, sales, production as well
as administration. It involves at every level of the organization, from
top management to front-line employees. TPM is the only way to keep
customers, employees and stakeholders happy and contented at the same
time. The Bawal, Dharuhera, Pantnagar and Chakan Plants have
successfully launched TPM Kick-off ceremony.
RECOGNITION AND AWARDS
Your company considers continuous improvement and implementing
appropriate quality management systems and processes to enable it to
deliver the highest practicable quality products. Your company also
recognises the importance of monitoring and reviewing of quality
management systems. As a result of which the Company has received the
following awards and recognitions from Customers and other Agencies
during the year under review:
- Award for Outstanding Support on Development & Completion of Etios
Project from Toyota Kirloskar Motor Private Limited.
- Certificate of appreciation for Continuous Improvement in the
Quality issues from Tata Motors Limited.
- Gold trophy in Quality Circle Competition organised by Quality
Circle Forum of India.
- Certificate of participation in Direct Material Cost Reduction
Initiative from John Deere India Private Limited.
- Shield for Quality improvement - Vendor Upgradation from Maruti
Suzuki India Limited.
- Shield for Tier-2 Upgradation from Maruti Suzuki India Limited.
DIRECTORS
In accordance with the Articles of Association of the Company and the
Companies Act, 2013, Mr. Eiichi Hirooka, Director is retiring by
rotation at the ensuing Annual General Meeting and being eligible,
offers himself for re-appointment.
During the year under review, the following changes were made in the
Management structure of the Company, with the view to strengthen
professional management and provide robust management structure for the
Company''s growth in the future :
i) Mr. D.K. Jain, Chairman & Managing Director has stepped down from
the position of Managing Director and now functioning as
Non-Executive Chairman of the Company.
ii) Mr. Deepak Jain has been elevated to the position of Managing
Director of the Company.
We thank the shareholders for their support in confirming the above
change in management structure of the Company vide Postal Ballot on
October 22, 2013.
Stanley Electric Co. Ltd. (Stanley - Technical & Financial
Collaborator) had withdrawn the nomination of Mr. Makio Natsusaka, Non-
Executive Director and Mr. Toshio Masuda, Executive Director from the
Board of the Company. Consequently, Mr. Makio Natsusaka and Mr. Toshio
Masuda resigned from the Board of the Company w.e.f. August 6, 2013 and
October 28, 2013 respectively. The Board of Directors places on record
its appreciation for the valuable services rendered by them during
their tenure as Director.
Stanley - Japan nominated Mr. Shigeki Muto and Mr. Norihisa Sato in
place of Mr. Makio Natsusaka and Mr. Toshio Masuda. Pursuant to their
nomination, the Board of Directors have appointed Mr. Shigeki Muto, as
additional Director w.e.f. August 6, 2013 and and Mr. Norihisa Sato as
additional director as well as Executive director w.e.f. October 28,
2013, for the time being, on the Board of the Company at their meeting
held on August 6, 2013 and October 28, 2013 respectively, subject to
their regular appointment in the Annual General Meeting.
Thereafter, in May, 2014, Stanley - Japan has withdrawn the nomination
of Mr. Shigeki Muto from the Board of the Company. Consequently, he
resigned from the Board of the Company w.e.f. May 30, 2014. The Board
of Directors place on record its appreciation for the valuable services
rendered by him during his tenure as Director.
Stanley - Japan nominated Mr. Toru Tanabe in place of Mr. Shigeki Muto.
Pursuant to his nomination, the Board of Directors have appointed Mr.
Toru Tanabe, as additional Director w.e.f. May 30,2014, for the time
being, on the Board of the Company at their meeting held on May 30,
2014, subject to his regular appointment in the Annual General Meeting.
Mr. Norihisa Sato is a B. Tech. from Kogakuin University, Japan, aged
52 years, having about 30 years of rich experience in Production
Engineering. He joined Stanley, Japan in 1984 and has abundant
experience and knowledge in the Production Engineering Fields and has a
management record of 10 years'' standing.
Mr. Toru Tanabe is a Graduate from HOSEI University, Japan, aged 55
years, having about 23 years of rich experience and knowledge in R&D of
electrical components and advanced illumination systems for automotive
equipment and about 10 years in automotive electronics since he joined
Stanley, Japan in 1981 and has a management record of about 20 years''
standing.
In accordance with the Articles of Association of the Company and the
Companies Act, 2013, Mr. Norihisa Sato and Mr. Toru Tanabe hold office
till the ensuing Annual General Meeting. The Company has received
Notices in respect of Mr. Norihisa Sato and Mr. Toru Tanabe from a
member under Section 160 of the Companies Act, 2013 proposing their
appointment as Directors of the Company liable to retire by rotation.
Consequent to notification of Section 149 and other applicable
provisions of the Companies Act, 2013, your Directors are seeking
appointment of all Independent Directors for five consecutive years
from the ensuing Annual General Meeting and they shall not be liable to
retire by rotation.
Your Directors recommend the re-appointment/ appointment of the above
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, 2014, 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 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 S.R. Batliboi & Co. LLP, Chartered Accountants, auditors of the
Company are completing 9 years as Statutory Auditors in the ensuing
AGM. In terms of the provisions of Section 139 of the Companies Act,
2013 read with The Companies (Audit and Auditors) Rules, 2014, your
Directors proposed to appoint S.R. Batliboi & Co. LLP, Chartered
Accountants as Statutory Auditors of the company for a period of 3
consecutive years from the conclusion of the ensuing Annual General
Meeting till the conclusion of the fourth consecutive 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 provision of Section 141 of the
Companies Act, 2013. The Audit Committee in its meeting held on May 30,
2014 has also recommended the appointment of M/s S.R. Batliboi & Co.
LLP, as Statutory Auditors of the Company. Your Directors also
recommend their appointment.
The explanations of your Board of Directors on the Auditor''s
observations as contained in their report, read with the relevant notes
to accounts are as follows:
i. With reference to the observations of the Auditor in Para (ix)(a)
to the Annexure of their Report regarding slight delay in deposit
of Statutory Dues, it is informed that the said dues have since been
paid.
ii. With reference to the observations of the Auditor in Para (xvii)
to the Annexure of their Report regarding the use of short term
funds for long term purposes, it is informed that in view of the
general slowdown in the global economy, leading to slowdown in Auto
Industry, your company decided not to go for fresh long term loans till
the market improves as a result of which the company has used short
term funds for long term investments.
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 233B of the
Companies Act, 1956 and in conformity with the directives of the
Central Government, for the audit of the cost accounts of the Company
for the Financial Year 2013-14. The Cost Audit Report for the Financial
year 2012-13 has been filed with the Central Government within the
stipulated time on September 26, 2013.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial
position of the Company have occurred between April 1, 2014 and the
date on which this Report has been signed.
CORPORATE SOCIAL RESPONSIBILITY
People and the environment are the industry''s top resources. The
automobile industry invests heavily in new technologies and strategies
to address the complex CSR and sustainability challenges. All over the
world, the automobile brings improved quality of life; the task is to
sustain and improve its benefits while reducing the environmental
footprint of its products, services and production facilities.
Indian entrepreneurs and business enterprises have a long tradition of
working within the values that have defined nation''s character for
millennia. India''s ancient wisdom, which is still relevant today,
inspires people to work for the larger objective of the well-being of
all stakeholders. These sound and all-encompassing values are even more
relevant in current times, as organizations grapple with the challenges
of modern-day enterprise, the aspirations of stakeholders and of
citizens eager to be active participants in economic growth and
development. Corporate Social Responsibility is about achieving
organization excellence in ways that honour ethical values and respect
people and communities.
Your Company''s CSR programs focuses on improving the well-being of
people and communities through its Education and Healthcare
initiatives. Through various activities, your company strive to support
social inclusion and education in its broader sense of disadvantaged
and underprivileged children of the society  with a focus on Girl
child. Through its healthcare initiatives, which involves partnership
with various agencies, your company is making healthcare available to
more people in more places. All in all the activities within the both
focus groups shall demonstrate a positive social and economic impact.
Education
In its continuous efforts towards CSR activities, your Company has
adopted yet another branch of a School in Dundahera, Gurgaon, which is
dedicated to the children from the economically weaker section. The
school has been provided with infrastructure support and other
facilities for students. Apart from the above, the Company continued to
support the existing 3 schools, bearing fees of all girl students and
distributed school starter kit in the beginning of the session. These
schools have also been provided with infrastructure and other
facilities for students.
Healthcare
Further, in its on-going efforts to create healthy society, your
Company also joined the Punjab Cancer Screening Drive, the biggest ever
cancer screening program launched with the collaboration of Max
Healthcare and Government of Punjab, as District partner- Amritsar on
September 28 and 29, 2013. Nearly 1,00,000 patients were examined over
two days with the help of approximately 400 doctors and more than 2500
nurses, managers and other volunteers in 22 district hospitals of
Punjab. The motive behind the drive was to make people aware about the
benefits of early screening and make a healthy, prosperous and cancer
free society.
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 Earning 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 Vice President (Legal) and Company Secretary at the registered
office of the Company.
ACKNOWLEDGEMENT
It is our belief that we are able to embrace continuous change and
respond quickly with innovative products and solutions that is vitally
important in an increasingly dynamic business environment. We will
continue to make rapid innovations, which are essential to an
organization''s survival in today''s hypercompetitive business
environment. Your Directors wish to place on record their sincere
thanks to all its highly valued customers, its Technical and Financial
Collaborator- M/s Stanley Electric Co. Ltd., Japan, 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 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 30, 2014 Chairman
Mar 31, 2013
TO THE MEMBERS''
The Directors are pleased to present the 32nd Annual Report on the
business and operations together with Audited Balance Sheet and
Profit & Loss Account of your Company for the year ended March 31st
2013.
FINANCIAL RESULTS
Your Company''s performance during the year as compared with the
previous year is summarized below:
Rupees in Million
Particulars 2012-13 2011-12
Net Sales 10702.06 9851.58
EBITDA 657.63 494.14
Financial Expenses 185.73 122.14
Depreciation/Amortisation/
Impairment Loss 316.27 236.68
Profit Before Tax (PBT) 155.63 135.32
Provision for Tax 19.78 7.18
Profit After Tax (PAT) 135.85 128.14
Balance of Profit brought forward 195.44 145.49
Balance Available for Appropriation 331.29 273.63
Appropriations
Dividend 42.06 56.09
Corporate Dividend Tax 7.15 9.10
Transfer to General Reserve 13.83 13.00
Balance Carried to Balance Sheet 268.25 195.44
331.29 273.63
Dividend (%) 45 60
Basic and Diluted Earning Per
Share (EPS)(Rs.) 14.53 13.71
DIVIDEND
Keeping in view of the philosophy of the Company to reward its
shareholders and to continue the tradition of recommending dividend for
the last 28 years'' the Board of Directors are pleased to recommend a
Dividend of 45% (Rs.4.50/- per Equity Share) for the Financial Year
2012-13 (Rs.6/- per share in the previous year). The total amount of
Dividend proposed to be distributed aggregates to Rs. 49.21 Million
(including Dividend Tax). The Dividend payout ratio comes to 36.23%.
A sum of Rs. 13.83 Million has been transferred to the General Reserve
of the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
The Indian auto and auto components industry is currently facing its
most formidable challenge  that of slowing demand; and that too across
the board. After a frenzied period of 2009-10 and 2010-11 when all
automotive spots - domestic OEMs'' exports and replacement market -
shone bright'' the year 2011-12 marked the commencement of a slowdown
phase as volumes in the domestic Passenger Vehicle and Medium & Heavy
Commercial Vehicle segments began to stutter. If the year 2011-12 was
bad'' the year 2012-13 has turned out to be worse as other segments too
including the domestic Two-Wheeler segment as also exports to overseas
OEMs and tier-1 players have come into the grips of the slowdown. While
the revenue growth of diversified auto component manufacturers had been
steady till Q1 2012-13'' the across the board weakness in demand
witnessed during the last two quarters has tended to neutralize this
structural advantage otherwise enjoyed by such players.1
During the year under review'' the Indian Automobile Industry recorded a
production growth of 1.20% as compared to 13.83% of the corresponding
period last year. The industry produced around 20.62 Million vehicles
of which share of two wheelers were 76%'' passenger vehicles - 16%''
three wheelers and commercial vehicles - 4% each.2
In this backdrop'' during the year under review'' your Company recorded a
sales turnover of Rs. 10702.06 Million registering a growth of 8.63%''
which is much above the industry growth. The profit for the year after
tax stood at Rs.135.85 Million as compared to Rs. 128.14 Million during
the previous year.
NEW PLANTS AND FACILITIES
The plant in Bidadi'' Bangalore has commenced manufacturing operations
and supplies of Auto Lighting and other components to Toyota Kirloskar
Motors India Private Limited for their Etios and Liva vehicles in
August'' 2012. Further'' the supplies of two wheeler lighting from this
plant to Honda Motorcycle & Scooter India Private Limited (HMSI) are
expected to commence in the first quarter of FY 2013-14.
During the year under review'' the Company has made investment to the
tune of Rs. 865 million towards up-gradation of its Research and
Development facilities'' modernization of its existing manufacturing
facilities including Bawal and Bangalore plants.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
RECOGNITION AND AWARDS
Your company considers high standards for quality'' environmental
protection and safety as critical success factors and'' therefore'' all
relevant issues are regularly monitored and assessed within the
framework of company''s quality management system. As a result of which
the Company has received the following awards and recognitions from
Customers and other Agencies during the year under review:
- Got the Shield for Manufacturing Excellence from Maruti Suzuki India
Limited.
- Won 2nd Runner up trophy in Quality Circle Preliminary Competition
organized by Confederation of Indian Industry.
DIRECTORS
In accordance with the Articles of Association of the Company and the
Companies Act'' 1956'' Mr. Anmol Jain'' Mr. Makio Natsusaka'' Mr. Dhiraj
Dhar Gupta and Mr. Rattan Kapur'' Director(s) 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 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'' 2013'' 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 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 S.R. Batliboi & Co.'' Chartered Accountants'' auditors of the
company'' retire at the conclusion of the ensuing Annual General Meeting
and offers themselves for re-appointment. The company has received a
letter dated 11th April'' 2013 from Auditors informing that the
Partnership Firm M/s. S.R. Batliboi & Co. has been converted into
Limited Liability Partnership w.e.f. 1st April'' 2013 and consequent to
the conversion'' the name of the firm has also been changed to S.R.
Batliboi & Co. LLP. The Company has also received a letter from S.R.
Batliboi & Co. LLP'' Chartered Accountants stating that their
appointment'' if made'' will be in accordance with the limits specified
in Section 224(1B) of the Companies Act'' 1956. The Audit Committee in
its meeting held on 27th May'' 2013 has also recommended the appointment
of S.R. Batliboi & Co. LLP'' as Statutory Auditors of the Company. Your
directors also recommend their appointment..
The explanations of your Board of Directors on the Auditor''s
observations as contained in their report'' read with the relevant notes
to accounts are as follows:
(i) With reference to the observation in Para (v)(b) to the Annexure of
their Report in respect of transactions exceeding Rs. 5 Lacs in which
comparable prices are not availaible'' it is explained that the nature
of these transactions covers under two categories viz. (a) Designing
and Development of Tools'' Moulds and (b) Specialized Nature of Raw
Material'' Semi Finished and Finished Products.
a) Designing and Development of Tools'' Moulds
The Tools and Moulds etc are of specialized nature of products which
needs to be designed and developed with specialized knowledge and skill
as per the Customer specifications and requirements. The specifications
provided by Customer for designing and development of Tools are of
Confidential Nature and having immense Intellectual property value.
Therefore'' the Company arranges the Designing and development of Tools
with the Technical Support and Guidance from its Collaborator M/s
Stanley Electric Co. Ltd and its associates. In some cases'' the Tool
designing and its development is also undertaken by Vendors which
transactions are not pursuance of such contracts and arrangements as
referred to in Para (v) (b) to the Annexure of the Audit Report.
In all these cases the Company need to share the Technical
Specification and Other Information of Customer which is of immense
Intellectual Property Value with the Vendor which can only be done
after entering into Legally binding Contracts which includes
Confidentiality Agreements also'' with the respective Vendor. These
Vendors are finalised after due Financial and Technical Assessment of
their capability to execute the job. In view of this background'' it is
not possible for the Company to share the Customers Information/
specifications with alternate vendors only for the purpose of arranging
comparable quotes/ prices.
b) Raw Material'' Semi Finished and Finished Products
In most of these cases'' the Company procures the raw material and
components from the Vendors after supplying'' Tools'' Moulds''Jigs'' Dies
for its manufacturing and some of the items purchased are of a
specialized and unique nature for which no alternate sources of supply
available to enable comparison of prices. Further'' such Vendors are
also defined and approved by our Customer(s)'' to whom the Company
supplies the Final Product. As these raw material and components are of
specialized and unique nature and its comparable market prices are not
available.
(ii) With reference to the observations of the Auditor in Para (ix) (a)
to the Annexure of their Report regarding slight delay in deposit of
Statutory Dues'' it is informed that the said dues have since been paid.
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 24th January'' 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 1st day of April'' 2012.
In conformity with the above order'' the Company has appointed M/s
Jitender'' Navneet & Co.'' Cost Accountants'' 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 30th September'' 2013. The report will be filed within
the stipulated period.
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.
CORPORATE SOCIAL RESPONSIBILITY
Today'' Corporate Social Responsibility has become a world wide concept
whereby organisations consider the interests of society by taking
responsibility for the impact of their activities on customers''
employees'' shareholders'' communities and the environment in all aspects
of their operations.
As India rides the wave of economic boom and commercial success''
corporate social responsibility is presenting itself both as an
opportunity and an important requirement for corporates to be engaged
in. This also contributes towards faster and more balanced growth of
our society.
The Government has also taken an initiative towards this cause by
introducing a clause in new Companies Bill to make CSR mandatory for
corporates'' which was earlier voluntary in nature'' for certain class of
companies as specified. The Companies Bill says that larger corporates
should contribute to society'' especially the communities in which they
operate'' by setting aside 2% of their net profit towards CSR.
Your company has always believed in serving the underprivileged of the
society  with a focus on the girl child. The Company''s efforts towards
this direction are evident in places where it works'' with specific
focus on manufacturing locations'' implemented by CSR team by
continuously supporting the 3 schools adopted by it in NCR region by
way of providing financial support in terms of fees of children on one
side and contributing towards infrastructure and other facilities for
students in the school on the other. With a combination of approaches
communities in the neighborhood are being assisted to access healthcare
by organizing regular Health check-up camp'' Blood donation camp and
AIDS awareness campaigns'' improved education opportunities for the
underprivileged to achieve sustainable livelihoods.
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 Earning 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 Vice President (Legal) and Company Secretary at the registered
office of the Company.
ACKNOWLEDGEMENT
It is our overriding quest to become a company that society wants to
exist. We will continue to look for strategic'' prudent ways to help
grow our existing businesses in this direction and focus on new
business opportunities. Your Directors wish to place on record their
sincere thanks to all its highly valued customers'' its Technical and
Financial Collaborator- M/s Stanley Electric Co. Ltd.'' Japan'' 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 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 27'' 2013 Chairman & Managing Director
Mar 31, 2012
The Directors are pleased to present the 31st 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, 2012.
FINANCIAL RESULTS
Your Company's performance during the year as compared with the
previous year is summarized below.
Rupees in Million
Particulars 2011-12 2010-11
Net Sales 9851.58 8662.49
EBRTDA 494.28 567.92
Financial Expenses 122.28 90.13
Depreciation/Amortization/
Impairment Loss 236.68 240.45
Profit Before Tax (PBT) 135.32 237.34
Provision for Tax 7.18 57.60
Profit After Tax (PAT) 128.14 179.74
Balance of Profit
brought forward 145.49 48.94
Balance Available for
Appropriation 273.63 228.68
Appropriations
Dividend 56.09 56.09
Corporate Dividend Tax 9.10 9.10
Transfer to General Reserve 13.00 18.00
Balance Carried to Balance Sheet 195.44 145.49
273.63 228.68
Dividend (%) 60 60
Basic and Diluted Earning
Per Share (EPS)(Rs.) 13.71 19.23
DIVIDEND
Keeping in view of the philosophy of the Company to reward its
shareholders and to continue the tradition of recommending dividend for
the last 27 years, 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 aggregates to Rs. 65.19 Million
(including Dividend Tax). The Dividend payout ratio comes to 50.87%.
A sum of Rs. 13.00 Million has been transferred to the General Reserve
of the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
The Rs. 1,600 billion Indian auto component industry derives its growth
impetus from the growth in automobile industry. The Indian auto
components industry has been witnessing a moderation in its revenue
growth since the beginning of this fiscal following the deceleration in
sales volume growth across all automobile segments. The margins of the
auto component manufacturers declined due to higher overhead costs,
increase in raw material & power prices, sluggish growth in supplies to
domestic Original Equipment Manufacturers and sudden depreciation of
rupee against major currencies. The sluggishness was partly arrested on
the back of rise in component exports and higher domestic replacement
market sales.1
During the year under review the Indian Automobile Industry recorded a
production growth of 13.83% as compared to 27% of the corresponding
period last year. The industry produced around 20.37 Million vehicles
of which share of two wheelers was 76%, passenger vehicles - 16%, three
wheelers and commercial vehicles - 4% each.2
In this backdrop, during the year under review, your Company recorded a
sales turnover of 9851,58 Million registering a growth of 13.73%, which
is in line with the industry growth. The profit for the year after tax
stood at Rs. 128.14 Million as compared to Rs. 179.74 Million during
the previous year.
SCALING UP OF BUSINESS: NEW PLANTS AND FACILITIES
Currently, the auto components industry in India is around two-thirds
the size of the OEM segment. This proportion is around one to two times
in mature markets of Europe, America and Japan. Given the healthy
growth prospects of the Indian automobile industry over the medium
term, the size of the auto components industry would grow at a rate
faster than the OEM segment, driven by OEMs' thrust on localization and
steadily growing replacement market demand.
As volumes increase, Indian auto component manufacturers will have to
scale up their operations and further improve quality, cost and
delivery performance to global standards demanded by customers.
Keeping in view the huge growth potential of automotive industry, to
better serve its esteemed customers and to retain competitive edge,
your company has made an investment to the tune of Rs.1100 million,
which is up by nearly 44% over the last year. The Investments have been
made towards setting up a new state of the art automotive lighting
plant at Bawal, modernization of Dharuhera Plant, setting up a new
surface treatment facility at Pantnagar and up-gradation of its
Research and Development facilities & Production engineering
capabilities. The automotive lighting plant at Bawal has commenced
commercial production in February, 2012, in a record time of one year.
The development work of new plant in Bidadi, Bangalore for
Manufacturing of Auto Lighting and other components for the Small Car
Toyota - Etios is going as per schedule and expected to complete by
June, 2012. Further, the Company has also received business from Honda
Motorcycle & Scooter India Private Limited (HMSI) for supply of two
wheeler lighting from this plant.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
RECOGNITION AND AWARDS
Your company considers technological leadership to be a significant
factor in quality excellence and its continued success and therefore
continues to devote significant resources to upgrade its technological
capabilities. As a result of which the Company has received the
following awards and recognitions from Customers and other Agencies
during the year under review:
- Won gold trophy in Quality Circle Competition organized by Quality
Circle Forum of India.
- Won 4th Runner up award in Quality Circle Competition organized by
TOYOTA.
- Got the Award to maintain the 90% score continuously from last two
years in Vendor System Audit by Maruti Centre for Excellence (MACE).
- Got distinguished award in Quality Circle Competition organized by
Quality Circle Forum of India.
- Won Bronze Trophy for "Manufacturing Excellence" from Automotive
Components Manufacturer Association (ACMA).
- Won Bronze Trophy for "Quality and Productivity" from Automotive
Components Manufacturer Association (ACMA).
- Received Certificate of appreciation for Quality & Delivery of
Spare part components by Honda Siel Cars India Limited.
- Received Certificate for Proactive capacity enhancement from Maruti
Suzuki India Limited.
DIRECTORS
In accordance with the Articles of Association of the Company and the
Companies Act, 1956, Mr. Deepak Jain, Mr. Gursaran Singh and Mr. Suman
Jyoti Khaitan, Director(s) are retiring by rotation at the ensuing
Annual General Meeting and being eligible, offer themselves for
re-appointment.
Stanley Electric Co. Ltd. (Stanley - Technical & Financial
Collaborator) has withdrawn the nomination of Mr. Ikuo Abe, Senior
Executive Director and Mr. Atsushi Ishii, Executive Director from the
Board of the Company. Consequent to withdrawal of their nomination, Mr.
Ikuo Abe and Mr. Atsushi Ishii resigned from the Board of the Company
w.e.f. 26-07-2011 and 30-06-2011 respectively. The Board of Directors
places on record its appreciation for the valuable services rendered by
them during their tenure as Director.
Stanley nominated Mr. Eiichi Hirooka and Mr. Toshio Masuda in place of
Mr. Ikuo Abe and Mr. Atsushi Ishii. Pursuant to their nomination, the
Board of Directors have appointed Mr. Eiichi Hirooka and Mr. Toshio
Masuda, as additional Directors and thereafter as Senior Executive
Director and Executive Director respectively w.e.f. 27-07-2011, for the
time being, on the Board of the Company at their meeting held on July
26, 2011 subject to their regular appointment in the Annual General
meeting.
Mr. Eiichi Hirooka is a Masters in Business Administration (Finance),
Japan, aged 54 years, having about 29 years of rich experience in Auto
Lighting sales and worked in USA, Stanley for 7 years. Before joining
the Company, he was responsible for Suzuki Japan Business for
Automotive Lighting.
Mr. Toshio Masuda is a Graduate from Japan, aged 54 years, having about
31 years of rich experience in production engineering in Auto Lighting.
He joined Stanley Japan in 1980 and worked 17 years in Thai Stanley as
Director-Automotive Lamps, thereafter as plant Manager in Stanley Japan
for 8 years. He has also worked in China, Stanley for 1 year as Vice
President- Plant before joining the Company.
Your Directors recommend the re-appointment / appointment of the above
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 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 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. S. R. Batliboi & Associates, Chartered Accountants, auditors of
the Company, retire at the conclusion of the ensuing annual general
meeting but do not offer themselves for re-appointment. The Company has
received a requisition to appoint M/s. S.R Baltiboi & Co., Chartered
Accountants, as the Statutory Auditor of the Company. Consequently a
consent letter and certificate from M/s. S.R Baltiboi & Co., Chartered
Accountants stating that their appointment, if made, will be in
accordance with the limits specified in Section 224(1 B) of the
Companies Act, 1956 has also been received. The Audit Committee in its
meeting held on 30th May, 2012 has also recommended the appointment of
M/s. S. R. Batliboi & Co., as Statutory Auditors of the Company. Your
directors also recommend their appointment.
The explanations of your Board of Directors on the Auditor's
observations as contained in their report, read with the relevant notes
to accounts are as follows:
(i) With reference to the observation in Para (v)(b) to the Annexure of
their Report in respect of transactions exceeding Rs. 5 Lacs in which
comparable prices are not available, it is explained that the nature of
these transactions covers under two categories viz. (a) Designing and
Development of Tools, Moulds and (b) Specialized Nature of Raw
Material, Semi Finished and Finished Products.
a) Designing and Development of Tools, Moulds
The Tools and Moulds etc are of specialized nature of products which
needs to be designed and developed with specialized knowledge and skill
as per the Customer specifications and requirements. The specifications
provided by Customer for designing and development of Tools are of
Confidential Nature and having immense Intellectual property value.
Therefore, the Company arranges the Designing and development of Tools
with the Technical Support and Guidance from its Collaborator M/S
Stanley Electric Co. Ltd and its associates. In some cases, the Tool
designing and its development is also undertaken by Vendors which
transactions are not pursuance of such contracts and arrangements as
referred to in Para (v) (b) to the Annexure of the Audit Report.
In all these cases the Company need to share the Technical
Specification and Other Information of Customer which is of immense
Intellectual Property Value with the Vendor which can only be done
after entering into Legally binding Contracts which includes
Confidentiality Agreements also, with the respective Vendor. These
Vendors are finalized after due Financial and Technical Assessment of
their capability to execute the job. In view of this background, it is
not possible for the Company to share the Customers Information/
specifications with alternate vendors only for the purpose of arranging
comparable quotes/ prices.
b) Raw Material, Semi Finished and Finished Products
In most of these cases, the Company procures the raw material and
components from the Vendors after supplying Tools, Moulds, Jigs Dies
for its manufacturing and some of the items purchased are of a
specialized and unique nature for which no alternate sources of supply
available to enable comparison of prices. Further, such Vendors are
also defined and approved by our Customer(s), to whom the Company
supplies the Final Product. As these raw material and components are of
specialized and unique nature and its comparable market prices are not
available.
(ii) With reference to the observations of the Auditor in Para (ix) (a)
to the Annexure of their Report regarding slight delay in deposit of
Statutory Dues, it is informed that the said dues have since been paid.
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.
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.
CORPORATE SOCIAL RESPONSIBILITY
Today, Corporate Social Responsibility (CSR) is one of the most
important global issues with serious challenges and implications on
almost all sectors. Surging economies, including India, are coping with
issues related to poverty, unemployment, illiteracy, malnutrition,
child rights, community welfare etc and are a hotbed for an innovative
CSR scenario which is still shaping up. While the Government undertakes
extensive developmental initiatives through a series of sect oral
programmes, the business sector also needs to take the responsibility
of exhibiting socially responsible business practices that ensures the
distribution of wealth and well-being of the communities . in which
the business operates.
The Indian business has traditionally been socially responsible. From
inactive philanthropy to the incorporation of the stakeholders'
interest in the business model, the Indian business sector practices
various methods of discharging its social responsibility.
Your Company is already taking part in CSR activities through its
various programmes which include "Lumax Ki Nanhi Chhaan" for promoting
the girl child amongst general population and to promote community's
involvement in forestation drive and by organizing free Health
checkup camps & running a charitable dispensary for the
underprivileged. However, for effective implementation and providing a
roadmap to its CSR objectives, the Company has formed a Trust in
October, 2011 namely 'Lumax Charitable Foundation' for contributing in
the economic and social development of communities and geographical
areas, particularly in the vicinity of its operations. This will
include education, skill building for livelihood of people, health,
cultural and social welfare particularly targeting the weaker sections
of society.
In addition to above, M/s Stanley - Japan has also shown its keen
desire to contribute in the formation of a much better society in India
by supporting deserving students to up-scale their knowledge by
providing scholarship to those students who are needy and bearing the
expenses for their education. This proposal is being implemented with
the support of Kitano Foundation of Lifelong Integrated Education,
Japan, founded by Mr. Takahoru Kitano, founder of Stanley- Japan. The
Kitano Foundation is actively involved in providing aid for lifelong
educational projects, to support initiatives that lead to skill
development and educational benefits for the Economically Weaker
Sections of the community in Japan.
Further we have also adopted 3 schools in the NCR region. Through this
initiative, the Company not only aims to impact lives of thousands of
children by providing them better infrastructural facilities, but also
continues its mission to promote girl child by sponsoring the fees of
all girl children in kindergarten. In addition to these schools, the
Company has adopted visually impaired children by sponsoring their fees
in various colleges of Delhi University.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis 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 Earning and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is
annexed separately as Annexure - B.
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, 2011.
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.
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 Vice President (Legal) & Company Secretary at the registered
office of the Company.
ACKNOWLEDGEMENT
We are driven by the consumer and deliver results through a partnership
with our customers - built upon superior brands and products,
continuous innovation and a commitment to quality in the past and will
continue to do so in future. Your Directors wish to place on record
their sincere thanks to all its highly valued customers, its Technical
and Financial Collaborator- M/s Stanley Electric Co. Ltd., Japan, 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 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 30, 2012 Chairman & Managing Director
Mar 31, 2011
The Directors are pleased 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 Companys performance during the year as compared with the
previous year is summarized below:
Rupees in Million
Particulars 2010-11 2009-10
Net Sales 8,609.25 6,341.54
Profit before Interest and Depreciation 571.41 517.56
(-) : Financial Expenses 93.63 113.20
(-) : Depreciation/Amortisation/
Impairment Loss 240.45 340.54
Profit Before Tax (PBT) 237.33 63.82
(-) : Provision for Tax 57.60 4.55
Profit After Tax (PAT) 179.73 59.27
(+) : Balance of Profit brought forward 48.94 28.37
Balance Available for Appropriation 228.67 87.64
Appropriations
Dividend 56.09 28.04
Corporate Dividend Tax 9.10 4.66
Transfer to General Reserve 18.00 6.00
Balance Carried to Balance Sheet 145.48 48.94
228.67 87.64
Dividend (%) 60 30
Basic and Diluted Earning Per Share (EPS)(Rs.) 19.23 6.34
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 30% for the corresponding last year. The total
amount of Dividend proposed to be distributed and tax thereon
aggregates to Rs. 65.19 Million (including Dividend Tax) as against Rs.
32.70 Million. The Dividend payout ratio comes to 36.27%.
A sum of Rs. 18 Million has been transferred to the General Reserve of
the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
Since the first car was rolled out in India in the year 1898, the
Indian Automobile Industry has come a long way. During its early stages
it was overlooked, but since the introduction of the liberalization
policy, various tax reliefs by the Government of India and rapid growth
in industrialization process in recent years, the automobile industry
has made a remarkable growth. India is expected to become the worlds
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. 1
During the year under review the Indian Automobile Industry recorded a
remarkable production growth of 27%, as compared to the last year. The
industry produced around 18 Million vehicles of which share of two
wheelers were 75%, passenger vehicles - 17 %, three wheelers and
commercial vehicles - 4% each. 2
In this backdrop, your Company has achieved a 36% growth in the Annual
Sales, which is much above the industry growth, by clocking the sales
of Rs.8,609 Million during the year under review ended March 31, 2011,
as compared to Rs. 6,342 Million in the previous year.
During the year under review, Lumax has posted Earnings before
Depreciation Interest and Tax (EBDITA) of Rs. 571.41 Million for the
year ended March 31, 2011 as against Rs. 517.56 Million in the previous
year, an increase of 10% as compared to the previous year and Profit
After Tax (PAT) of Rs. 179.73 Million as compared to the Profit After
Tax (PAT) of Rs. 59.27 Million during the previous year, registering a
tremendous growth of 203%.
During the year under review, your Company has laid foundation for
construction of a new ultra modern manufacturing plant at Bawal,
Haryana at an estimated cost of about Rs.800 million to meet the
increasing demand for supply of high volume auto lightings for one of
its existing top customer - Maruti Suzuki, as some of the existing
plants are facing capacity constraints. The said plant is expected to
start commercial production by January 2012.
Further, your Company is also in the process of setting up new plant at
Bidadi, Bangalore for supply of auto lighting and other components for
the Small Car of Toyota - Etios and the said facility is expected to
become operational by the next year. Till then your company has set up
a new small assembly facility in Bidadi, Bangalore and started
supplying to this customer. Further, due to low volumes of Nano Car
productions, your Company has delayed the commencing of production from
the Nano Plant, Sanand, Gujarat, after a string of negotiations in
relation with the investment in Singur, West Bengal.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
RECOGNITION AND AWARDS
Your Company believes that the journey of excellence is a never ending
one but it begins with Quality. Quality initiatives are all pervasive
encompassing each and every process throughout the organization,
leading to excellence. As a result of which the Company has received
the following awards and recognitions from Customers and other Agencies
during the year under review:
Rs. Got 90% marks in the "Annual Vendor System Audit" by Maruti Suzuki
India Ltd in 2010-11, as against 85% last year.
Rs. Won Silver Award for "Manufacturing Excellence" from Automotive
Components Manufacturer Association (ACMA).
Rs. Won Golden Trophy in QCC Competition organised by Quality Circle
Forum of India - Delhi Chapter.
Rs. Won First prize in poster competition in QCC Competition organised
by Quality Circle Forum of India - Delhi Chapter.
Rs. Won "Winner Award (GOLD TROPHY)" in the 23rd Preliminary QC Circle
Competition Organized by Confederation of Indian Industry (CII).
Rs. Won Silver Award in the 21st Chapter Convention QC Circle
Competition Organized by Quality Circle Forum of India - Delhi
Chapter.
Rs. Received Certificate from Maruti Suzuki India Ltd. (MSIL),
recognizing efforts and superior performance of the Company in the
field of Design and Development
Rs. Received Certificate of Appreciation from International Centre for
Automotive Technology (ICAT).
DIRECTORS
In accordance with the Articles of Association of the Company and the
Companies Act 1956 Mr Anmol Jain Mr M C Gupta Mr Makio Natsusaka and Mr
A P Gandhi Director(s) are retiring by rotation at the ensuing Annual
General Meeting and being eligible offer themselves for re-appointment.
The term of Mr D K Jain as Chairman & Managing Director and Mr Anmol
Jain as Sr Executive Director is expiring accordingly the Board
recommends to re-appoint them as Whole-time Directors with respective
Designations subject to the approval of the members in the ensuing
Annual General Meeting.
Further the previous tenure of Mr Deepak Jain as Sr Executive Director
expired on 31-01-2011 Hence the Board re-appointed Mr Deepak Jain as Sr
Executive Director for a further period of 5 years we f 01-02-2011 in
its meeting dated 29-01-2011 subject to the approval of the members in
the ensuing Annual General Meeting.
Your Directors recommend the re-appointment of the above 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
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 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 S.R. Batliboi & Associates, Chartered Accountants 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 members in the ensuing Annual General Meeting.
The explanations of your Board of Directors on the Auditors
observations as contained in their report, read with the relevant notes
to accounts are as follows.
(i) With reference to the observation in Para (v) (b) to the Annexure
of their Report in respect of transactions exceeding
Rs. 5 Lacs in which comparable prices are not availaible, it is
explained that the nature of these transactions covers under two
categories viz. (a) Designing and Development of Tools, Moulds and (b)
Specialized Nature of Raw Material, Semi Finished and Finished
Products.
(a) Designing and Development of Tools, Moulds
The Tools and Moulds etc. are of specialized nature of products which
needs to be designed and developed with specialized knowledge and skill
as per the Customer specifications and requirements. The specifications
provided by Customer for designing and development of Tools are of a
Confidential Nature and having immense Intellectual property value.
Therefore, the Company arranges the Designing and development of Tools
with the Technical Support and Guidance from its Collaborator M/s
Stanley Electric Co. Ltd and its associates. In some cases, the Tool
designing and its development is also undertaken by Vendors which
transactions are not pursuance of such contracts and arrangements as
referred to in Para (v) (b) to the Annexure of the Audit Report.
In all these cases the Company need to share the Technical
Specification and Other Information of Customer which is of immense
Intellectual Property Value with the Vendor which can only be done
after entering into Legally binding Contracts which includes
Confidentiality Agreements also, with the respective Vendor. These
Vendors are finalised after due Financial and Technical Assessment of
their capability to execute the job. In view of this background, it is
not possible for the Company to share the Customers
Information/specifications with alternate vendors only for the purpose
of arranging comparable quotes/prices.
(b) Raw Material, Semi Finished and Finished Products
In most of these cases, the Company procures the raw material and
components from the Vendors after supplying Tools, Moulds, Jigs Dies
for its manufacturing and some of the items purchased are of a
specialized and unique nature for which no alternate sources of supply
availaible to enable comparison of prices. Further such Vendors are
also defined/approved by our Customer(s), to whom the Company supplies
the Final Product. As these raw material and components are of
specialized and unique nature and its comparable market prices are not
availaible.
(ii) With reference to the observations of the Auditor in Para (ix) (a)
to the Annexure of their Report regarding slight delay in deposit of
Statutory Dues, it is informed that the said dues have since been paid.
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.
MATERIAL CHANGES AND COMMITMENTS
No other material changes and commitments affecting the Financial
position of the Company have occurred between April 1, 2011 and the
date on which this Report has been signed.
CORPORATE SOCIAL RESPONSIBILITY
The Company actively takes part in Corporate Social Responsibility
(CSR) programmes, from time to time, in order to create value for all
stakeholders, including shareholders, employees, customers, suppliers,
project affected people, society at large etc.
The Companys CSR scheme is underpinned by the principles of Ethics,
Transparency and Accountability. Your company does not engage in
business practices that are abusive, unfair, corrupt or
anti-competitive.
Depending upon the core competency and business interest, the Company
aims to undertake activities for social development of communities and
geographical areas, particularly in the vicinity of their operations.
These operations may vary from education, skill building for livelihood
of people, health, cultural and social welfare etc.
The Corporate Social Responsibility (CSR) program is an integral part
of the way the Company conducts its business.
Last year your Company started the programme of "Nanhi Chhaan", which
is fostered by Confederation of Indian Industry (CII) for promoting the
girl child amongst general population and to promote communitys
involvement in aforestation drive. The programme has gained
considerable popularity and credibility for its tremendous contribution
to the society.
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 Earning and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is
annexed separately as Annexure - B.
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.
PARTICULARS OF EMPLOYEES
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 Vice President
(Legal) and Company Secretary at the registered office of the Company.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has
endured our success in the past and will do so in future. Your
Directors wish to place on record their sincere thanks to all its
highly valued customers, its Technical and Financial Collaborator- M/s
Stanley Electric Co. Ltd., Japan, 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 : May 27, 2011 Chairman & Managing Director
Mar 31, 2010
The Directors are pleased 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 Million
Particulars 2009-10 2008-09
Net Sales 6,341.54 5,230.82
Profit before Interest and Depreciation 517.56 278.27
(-) : Financial Expenses 113.20 92.46
(-) : Depreciation/Amortisation/
Impairment Loss 340.54 222.25
Profit Before Tax (PBT) 63.82 (36.44)
(-) : Provision for Tax 4.55 (20.25)
Profit After Tax (PAT) 59.27 (16.19)
(+) : Balance of Profit brought forward 28.37 55.50
Balance Available for Appropriation 87.64 39.31
Appropriations
Dividend 28.04 9.35
Corporate Dividend Tax 4.66 1.59
Transfer to General Reserve 6.00 -
Balance Carried to Balance Sheet 48.94 28.37
Dividend (%) 30 10
Basic and Diluted Earning Per
Share (EPS)(Rs.) 6.34 (1.73)
DIVIDEND
Keeping in view of the philosophy of the Company to reward its
shareholders and to continue the tradition of recommending dividend for
the last 25 years, your Directors are pleased to recommend a Dividend
of 30% (Rs.3/- per Equity Share) for the Financial Year 2009-2010 as
against 10% for the corresponding last year. The total amount of
Dividend proposed to be distributed and tax thereon aggregates to Rs.
32.70 Million (including Dividend Tax) as against Rs.10.94 Million.
A sum of Rs. 6.00 million have been transferred to the General Reserve
of the Company. This reaffirms the inherent financial strength of your
Company.
BUSINESS PERFORMANCE
The global financial crises in the auto industry, which began during
the latter half of 2008, was also aggravated by the substantially more
expensive auto fuels linked to the 2003-08 oil crises . The related
credit crunch put a lot of pressure on raw material prices, and their
availability. But once again, India came up triumphant. The country and
auto industry weathered the storm of the worst financial crisis with a
lot of courage, determination and sound government policies. The stage
now looks set for bigger and better things in the coming decade, and
more.
During the year 2009-10, the recovery in the automobile sector in India
was remarkably, quick and sharp. It was aided by a fairly diverse set
of factors, including fiscal stimulas. The recovery in the automobile
sales has been phenomenal in several aspects. It has been broad based,
with all segments recovering, including heavy commercial vehicles,
which was affected the most and was the last to see sales pick up. The
recovery has also been quick and sharp with sales taking less than a
year to revert to the trend line. This has been unprecedented in
comparison to the previous downturns, where the trough in sales lasted
for a few years. The same is evident from the fact that the Automobile
Production has increased from 11.17 million vehicles to 14.04 million
vehicles during the year 2009-10, registering an increase of 25.75% as
compared to previous year and the Automobile Domestic Sales increased
from 9.72 million vehicles to 12.29 million vehicles during the year
2009-10, registering an increase of 26.41% as compared to previous
year. (Source: SIAM)
As your Companys business is directly dependent on the Original
Equipment Manufacturer(s) of Automobiles (OEMs), consequently, in this
background, during the year under review your Company has achieved a
21.23 percent growth in the Annual Sales by clocking the sales of
Rs.6,341.54 million as compared to Rs. 5,230.82 million in the previous
year ended March 31, 2009.
Your Company posted Earnings Before Depreciation, Interest and Tax
(EBDITA) of Rs.517.56 Million for the year ended March 31st 2010 as
against Rs.278.27 million in the previous year an increase of 86% as
compared to the previous year.
Your Directors are pleased to inform you that as compared to Loss of
Rs. 16.19 million during the previous year, your company has posted a
Profit After Tax of Rs. 59.27 million. The improvement on margins was
accomplished through better sales realizations, effective cost
rationalization measures which included better control over the
material cost and overheads cost, apart from the sharp focus on
operational efficiencies.
Further, pursuant to completion of negotiations with customer in
relation with the companys investment in a plant in Singur, West
Bengal and after giving consideration to its alternative plans, your
Company has assessed the carrying value of its assets and made adequate
provisions as considered necessary.
A detailed discussion on the business performance and future outlook is
provided in the Chapter on Management Discussion & Analysis Report
(MDA).
RECOGNITION AND AWARDS
Your CompanyÃs commitment on continuous improvement in quality and TQM
practices is being recognized and appreciated by the Customers, as a
result of which the Company has received the following awards and
recognitions from Customers and other Agencies during the year under
review :
- Silver Trophy for ÃManufacturing Excellenceà from ACMA.
- ÃTier - 2 Upgradationà Award by Maruti Suzuki India Ltd.
- Best Product Development Award by Mahindra & Mahindra.
- Dharuhera Unit got 85% marks in Annual Vendor System Audit by Maruti
Suzuki India Ltd in 2009-10 against 81% marks in the last year.
- Vendor performance Award by Maruti Suzuki India Ltd.
- ÃGolden Leaf Award for ECO Profità by Society for enhancing
sustainability and value of organisation.
- Quality Award for Zero PPM from Toyota Kirloskar.
- Participation Award from Hero Honda Motors Ltd for implementation of
Green Vendor Development Programme.
DIRECTORS
In accordance with the Articles of Association of the Company and the
Companies Act, 1956, Mr. Deepak Jain, Mr. Gursaran Singh, Mr. Suman
Jyoti Khaitan and Mr. D.D. Gupta, Directors are retiring by rotation at
the ensuing Annual General Meeting and being eligible, offer themselves
for re- appointment.
Mr. Deep Kapuria, Independent Director on the Board of the Company
since, July 2002 has resigned from the position of Independent Director
due to his other commitments and his resignation was accepted by the
Board in its meeting held on May 22, 2010.
The Board places on record its sincere appreciation and gratitude for
the valuable guidance received from Mr. Deep Kapuria during his tenure
as Independent Director on the Board of your company.
The Board of Directors has appointed Mr. Rattan Kapur, as an Additional
Director on the Board of the Company, who is an Independent Director,
at their meeting held on May 22, 2010. He has done his Graduation in
Commerce from Delhi University and started his professional career as
an Entrepreneur in the year 1977 by establishing a auto component
manufacturing unit. In the year 1993, Mr. Rattan Kapur promoted Mark
Exhaust Systems Limited (MESL) in Joint Venture with Maruti Suzuki
India Limited.
Mark Exhaust Systems Ltd. is one of the major OEM suppliers of Exhaust
Systems, Catalytic Convertor and Door Assemblies.
Mr. Rattan Kapur has also held the position of the President of the
Honda Siel Suppliers Club from the year April 2003 to March 2004 and
Deputy Chairman of the Automotive Component Manufacturers Association
(ACMA) Northern Region (2009-2010). Presently, he is the Managing
Director of Mark Exhaust Systems Ltd.
In accordance with the Articles of Association of the Company and the
Companies Act, 1956, Mr. Rattan Kapur will hold office till the ensuing
Annual General Meeting. The Company has received a Notice in respect of
Mr. Rattan Kapur, from a member under Section 257 of the Companies Act,
1956 proposing his appointment as Director of the Company liable to
retire by rotation. The Board recommends his appointment for the
approval of members in the ensuing Annual General Meeting.
Your Directors recommend the re-appointment and appointment of the
above 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 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 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 S.R. Batliboi & Associates, Chartered Accountants 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 members in the ensuing Annual General Meeting.
The explanations of your Board of Directors on the Auditors
observations as contained in their report, read with the relevant notes
to accounts are as follows.
(I) With reference to the observation in Para (v)(b) to the Annexure of
their Report in respect of transactions exceeding Rs. 5 Lacs in which
comparable prices are not available, it is explained that the nature of
these transactions covers under two categories viz.(a) Designing and
Development of Tools, Moulds and (b) Specialized Nature of Raw
Material, Semi Finished and Finished Products.
(a) Designing and Development of Tools, Moulds
The Tools and Moulds etc are of specialized nature of products which
needs to be designed and developed with specialized knowledge and skill
as per the Customer specifications and requirements. The specifications
provided by Customer for designing and development of Tools are of a
Confidential Nature and having immense Intellectual Property Value.
Therefore, the Company arranges the Designing and development of Tools
with the Technical Support and Guidance from its Collaborator Stanley
Electric Co., Ltd. and its associates. In some cases, the Tool
designing and its development is also undertaken by Vendors which
transactions are not in pursuance of such contracts and arrangements as
referred to in Para (v)(b) to the Annexure of the Audit Report.
In all these cases the Company need to share the Technical
Specification and Other Information of Customer which is of immense
Intellectual Property Value with the Vendor which can only be done
after entering into Legally binding Contracts which includes
Confidentiality Agreements also, with the respective Vendor. These
Vendors are Finalised after due Financial and Technical Assessment of
their capability to execute the job. In view of this background, it is
not possible for the Company to share the Customers
Information/Specifications with alternate vendors only for the purpose
of arranging comparable quotes/prices.
(b) Raw Material, Semi Finished and Finished Products
In most of these cases, the Company procures the raw material and
components from the Vendors after supplying, Tools, Moulds, Jigs Dies
for its manufacturing and some of the items purchased are of a
specialized and unique nature for which no alternate sources of supply
available to enable comparison of prices. As these raw material and
components are of specialized and unique nature and its comparable
market prices are not available.
(II) With reference to the observations of the Auditor in Para (ix) (a)
to the Annexure of their Report regarding slight delay in deposit of
Statutory Dues, it is informed that the said dues have since been paid.
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.
MATERIAL CHANGES AND COMMITMENTS
No material changes and commitments affecting the Financial position of
the Company have occurred between April 1, 2010 and the date on which
this Report has been signed.
CORPORATE SOCIAL RESPONSIBILITY
Behaving responsibly and contributing to the communities in which we
operate is an essential part of our heritage. The Corporate Social
Responsibility (CSR) programs is an integral part of the way the
Company conducts its business.
Your Company has adopted the concept of ÃNanhi Chhaanà across all
facilities around August 2009, promoted by Confederation of Indian
Industry (CII) for promoting the girl child amongst general population,
reinforcing the sentiment of cherishing and being proud of parenting a
girl and to promote communityÃs involvement in aforestation drive,
thereby impacting the environment through extended green coverage with
people participation.
Under the campaign ÃNanhi Chhaanà your Company has designated an area
in each of the facilities and shall be used for this purpose. A banner
shall be put to highlight the area with the message of ÃLUMAX KI NANHI
CHHAANÃ. Whenever a girl child is born in the Lumax family, a plant
sapling shall be planted in her name by the respective parent of the
child together with the Plant Head of that facility. The sapling shall
further have a plate bearing the name of the child, the parents name
and the date of birth. Outside the area there shall be a board having
the ÃLumax Ki Nanhi Chhaan count till date ___Ã, which will help any
person to gauge the number of saplings planted till date.
Further, a Free Charitable Dispensary has been organized up by the
Company for providing Free Checkup and medication, a doctor has been
appointed and available for check ups. A Free eye check à up and
Cataract Operation Camp are also being organized under these programs.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
Pursuant to the provisions of Clause 49 of the Listing Agreement,
Management Discussion & Analysis 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 Earning and
Outgo etc. under Section 217(1)(e) of the Companies Act, 1956 is
annexed separately as Annexure à B.
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 à D.
PARTICULARS OF EMPLOYEES
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 Vice President
(Legal) and 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.
ACKNOWLEDGEMENT
It is our strong belief that caring for our business constituents has
endured our success in the past and will do so in future. Your
Directors wish to place on record their sincere thanks to all its
highly valued customers, its Technical and Financial Collaborator- M/s
Stanley Electric Co. Ltd., Japan, 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 22, 2010 Chairman & Managing Director
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