Mar 31, 2018
Dear Members,
The Directors have great pleasure in presenting the 33rd Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2018.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Companyâs Financial Results for the year under review are as follows:
(Rs. In lakhs)
Year Ended |
Year Ended |
|
31.03.18 |
31.03.17 |
|
Sales and other Income (Net of Excise Duty and GST) |
160,210.77 |
147,724.69 |
Profit before Interest, Depreciation & Tax |
13,379.62 |
11,707.15 |
Financial Cost |
14.93 |
5.40 |
Depreciation |
2,824.46 |
2,906.20 |
Profit before Tax |
10,540.23 |
8,795.55 |
Tax Expenses |
||
Current tax |
3,110.23 |
3,108.91 |
Deferred tax |
(321.42) |
(384.69) |
Total Tax Exp |
2,788.81 |
2,724.22 |
Profit after Tax |
7,751.42 |
6,071.33 |
Other comprehensive income net of taxes |
(130.52) |
(205.23) |
Adjustment to deferred tax liability |
- |
(89.79) |
Total Comprehensive Income |
7,620.90 |
5,776.31 |
Net Profit brought forward |
24,559.05 |
18,782.74 |
Profit available for appropriation |
32,179.95 |
24,559.05 |
Dividend payment |
1,599.80 |
- |
Dividend Tax |
325.68 |
- |
Transfer to General Reserve |
2,000.00 |
- |
Surplus Available |
28,254.47 |
24,559.05 |
OPERATIONS & STATE OF THE COMPANYâS AFFAIRS
The Company has achieved a sales turnover, including other income (Net of Excise Duty), of Rs. 160,210.77 lakhs vis-a-vis Rs. 147,724.69 lakhs in the previous year. The profit before tax in the current year was at Rs. 10,540.23 Lakhs as compared to Rs. 8,795.55 lakhs in the previous year.
The State of affairs of the Company is detailed in the âManagement Discussion & Analysisâ section which forms part of this report.
CREDIT RATING
The Companyâs financial discipline and prudence is reflected in the credit ratings ascribed by CRISIL rating agency as given below:
(In lakhs)
INR 6850 Long-Term Loans |
AA/Stable (Reaffirmed) |
INR 3000 Cash Credit |
AA/Stable (Reaffirmed) |
INR 4350 Letter of Credit |
CRISIL A1 |
INR 225 Bank Guarantee |
CRISIL A1 |
INR 600 Commercial Paper Programme |
CRISIL A1 |
TRANSFER TO GENERAL RESERVE
The Board has transferred an amount of Rs. 2,000/- lakhs to General Reserve before recommending the final dividend. The balance amount of Rs. 28,254.47 lakhs (Previous year Rs. 24,559.05 lakhs) will be retained as surplus in the statement of Profit and Loss.
DIVIDEND
Your directors are pleased to recommend a dividend of 225 per cent (i.e. Rs. 4.5/- per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2018 amounting to Rs. 1,799.78 lakhs. Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 369.95 lakhs. The dividend, if approved, at the Annual General Meeting (hereinafter refer as âAGMâ) shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from Saturday, September 15, 2018 to Wednesday, September 26, 2018 (both days inclusive).
SHARE CAPITAL & DEBENTURES
The authorized share capital of the Company is Rs. 15,00,00,000 (Rupees Fifteen Crores only) divided into 7,50,00,000 (Seven Crores Fifty Lakh) equity shares of Rs. 2 (Rupees Two) each. The paid up Share Capital of the Company as on March 31, 2018 was Rs. 7,99,92,500 (Rupees Seven Crore Ninety Nine Lakhs Ninety Two Thousand Five Hundred only).
During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2018.
FINANCE
Cash and cash equivalent as at March 31, 2018 was Rs. 1912 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 5A and 5B to the financial statements. As per policy of loans to employees of the Company, during the year the Company provided an interest free loan amounting to Rs. 40,000/- to Mr. Saurabh Agrawal-Company Secretary & Key Managerial Person of the Company.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.
In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the Financial Year under review, your Company has transferred unpaid/ unclaimed dividend, amounting to Rs. 4.89 Lakhs for FY 2009-10 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.
AUDITORS
At 32nd AGM of the Company, the members of the Company appointed M/s Deloitte Haskins & Sells LLP as a statutory auditor of the Company for the period of 5 years, who hold office up to the conclusion of the 37th AGM of the Company. In compliance with the applicable provisions of the Companies Act, 2013 and the rules made thereunder read with the statutory modification(s) or re-enactment(s) thereof, for the time being force, the Board recommends for ratification of the appointment of M/s Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company. The Statutory Auditors have consented for the said ratification of appointment and confirmed their eligibility under Sections 139 and 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.
The Report given by the Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, on the financial statements of the Company for the financial year 2017-18, is part of the Annual Report. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.
Further, with regard to section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the auditors under section 143(12) of the said Act.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report except two e-forms were filled with additional fees due to administrative reason with Ministry of Corporate Affair.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made thereunder regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Boardâs Report.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-D to this Report.
PARTICULARS OF EMPLOYEES
The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2018, is annexed hereto and forms part of this Report. Annexure-E
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
In terms of provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility (hereinafter referred as âCSRâ) Committee has formulated a CSR Policy indicating the activities to be undertaken by the Company. The constitution of CSR Committee is disclosed in Corporate Governance Report.
The CSR policy may be accessed on the Companyâs website i.e. http://www.munjalshowa.net/wp-content/ uploads/2015/05/Corporate-Social-Responsibility-Policy1.pdf.
As part of its initiatives under CSR, the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013 and CSR Policy of the Company. The annual report on CSR activities as required under the Companies (CSR Policy) Rules,
2014 is set out as Annexure-F to Boardâs Report.
Munjal Showa Limited considers social responsibility as an integral part of its business activities and endeavours to utilize the allocated CSR budget for the benefit of the society.
The Company has incurred the CSR expenditure of Rs. 112.67 lakhs during the current financial year being about 61.04 % of Rs. 184.59 Lakh, to be spent during the year. The shortfall of Rs. 71.92 Lakh, being 38.96% of the required expenditure on CSR was due to non-identification of appropriate projects / activities / programmes in line with the CSR policy of the Company. The CSR activities of the Company are approved by the Board and few new initiatives have been proposed that may be considered in future. For the subsequent years, the Company endeavours to spend the budgeted CSR expenditure in accordance with the statutory requirements.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
ENVIRONMENT COMPLIANCE
We believe that âwaste is a precious resource kept in a wrong placeâ. We further believe that âthere is no waste as per the law of the natureâ. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing âLean and Low costâ machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in-house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made âZero incidentsâ as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.
The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.
TOTAL PRODUCTIVE MAINTENANCE
The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify 21 types of Losses & converts them into Profit. We are able to reduce Repair & Maintenance Cost.
We have achieved TPM Excellency Award âCategory Aâ for Gurugram and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015.
Lean TPM Activities:
We have clubbed TPM with lean manufacturing system. Thru Lean we are able to focus & control 7 types of wastes. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing. So far we are able to manufacture more than 750 machines In-House with Lean TPM Concept inclusive of many CNC Machines.
ISO/TS 16949 ACCREDITATION
Your Companyâs manufacturing facilities are located at Gurugram, Haridwar and Manesar and we continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes, prevention of rear misses and to ensure maximized customer delight.
LISTING
The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V of SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2018-19 has been paid to them well before the due date i.e. April 30, 2018. Annual Custody/Issuer fee for the year 2018-19 has also been paid by the Company to NSDL and CDSL.
HUMAN RESOURCES
Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from âHuman Resources Managementâ to âHuman Capital Managementâ.
Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Companyâs ability to attract and retain quality people. The total headcounts were 3302 at the end of the year as compared to 3058 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing. As desired by the Govt. of India we have started NEEM Scheme and NAPS Scheme in order to enhance the technical skill level of our unemployed youths.
Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.
The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.
The Board has identified following risks:-
Intensifying Competition, Declining margins, Imposition of strict environmental / safety /
regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The website link is given below:
http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf RECOMMENDATION OF THE AUDIT COMMITTEE
During the year, all the recommendations of the Audit Committee were accepted by the Board.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the Financial Year 2017-18.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Masanao Matsui ceased to be a director of the Company w.e.f. May 19, 2017.
During the period 2017-18, Mr. Ashok Kumar Munjal was the director liable to retire by rotation and being eligible, he had offered himself for re-appointment before the shareholder at 32nd AGM of the Company. The shareholder confirmed his appointment at the 32nd AGM of the Company.
At the 32nd Annual General Meeting of the Company, the members confirmed the appointment of Mr. Kobayashi as Joint Managing Director of the Company.
Mr. Teruyoshi Sato was appointed as an additional director of the Company w.e.f. May 19, 2017. Further, he was appointed as a Non-Executive Director of the Company, liable to retire by rotation u/s 152 of the Companies Act, 2013, at the 32nd AGM of the Company.
At the 32nd AGM of the Company, the members approved the variation in the terms of appointment of Mr. Yogesh Chander Munjal and Mr. Shigeki Kobayashi w.e.f. September 01, 2017.
The Board of Directors in its meeting held on May 30, 2018, after considering the recommendation of Nomination and Remuneration Committee, recommended to the shareholders to approve the variation in the terms of appointment of Mr. Yogesh Chander Munjal, Managing Director and Mr. Shigeki Kobayashi, Joint Managing Director of the Company w.e.f. September 1, 2018.
Mr. Yogesh Chander Munjal and Mrs. Charu Munjal are liable to retire by rotation at the ensuing AGM. And being eligible they offered themselves for re-appointment.
The Board of Directors in its meeting held on May 30, 2018, after considering the recommendation of Nomination and Remuneration Committee, recommended to the shareholders, the re-appointment of Mr. Devi Singh, Mr. Vinod Kumar Agrawal, Mr. Nand Lal Dhamejaand Mr. Surinder Kumar Mehta as Independent Directors of the Company for a second term of 5 (five) consecutive years on the Board of the Company w.e.f. April 01, 2019 to March 31, 2024, as special resolution at the ensuing AGM.
Further Mr. Yasuhiro Yamamoto has been appointed as an additional director of the Company w.e.f May 30, 2018. The Board, after considering the recommendations of Nomination and Remuneration Committee, recommends his appointment as a Non-Executive Director of the Company, liable to retire by rotation u/s 152 of the Companies Act, 2013, before the shareholder at the 33rd AGM of the Company.
Pursuant to the provisions of the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, the profiles of all the directors, seeking appointment or reappointment at the ensuing AGM, have been provided in the Notice of 33rd AGM.
Mr. Teruyoshi Sato has resigned as Director of the Company w.e.f May 30, 2018. The Board placed its appreciation for the valuable services rendered by Mr. Teruyoshi Sato during his tenure as Director of the Company.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The following employees were designated as whole-time key managerial personnel of the Company:
a. Mr. Yogesh Chander Munjal- Managing Director
b. Mr. Shigeki Kobayashi- Joint Managing Director
c. Mr. Pankaj Gupta- Chief Financial Officer.
d. Mr. Saurabh Agrawal- Company Secretary
The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1
The Company appreciates the dedicated and valuable guidance given by all the Directors of the Company. COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee and the Risk Management Committee (non-mandatory committee). A detailed note on the composition of the Board and its committees is provided in the corporate governance report, which forms a part of the Board Report.
SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES
During the financial year 2017-18, the Company neither has any subsidiary, joint venture or associate company, nor has any company become or ceased to be its subsidiary, joint venture or associate company.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The silent feature of the Nomination and Remuneration Policy has been provided in this Report as Annexure-G. During the Financial Year 2017-18, no changes or amendments were made in such policy. The Nomination and Remuneration Policy is available on our website at http://www.munjalshowa.net/wp-content/uploads/2015/05/Nomination-And-Remuneration-Policy1.pdf.
The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)
BOARD DIVERSITY POLICY
The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.
The Board Diversity Polic
is available on our website
Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
a. that in the preparation of the annual accounts for the Financial Year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2018 and of the Profit of your Company for the Financial Year ended March 31, 2018;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts for the Financial Year ended March 31, 2018 have been prepared on a going concern basis;
e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
f. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All transactions except the loan to Mr. Saurabh Agrawal, entered into with Related Parties as defined under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 during the financial year were in the ordinary course of business and on an armâs length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company for all the transactions except the loan provided to Company Secretary.
The Company generally provided interest free loan to all its permanent employees and workers. As per the same, the Company has provided interest free loan of Rs. 40000 to Mr. Saurabh Agrawal, KMP of the Company. The form AOC-2 in respect of such transaction has been provided as Annexure H.
All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The details of related party transactions are given in note number 32 of Financial Statements.
The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website. And the link of such policy is given below:
http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf
None of the Independent Directors has any pecuniary relationships with the Company.
EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE
The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest.
There is no other qualification, reservation or adverse remark, comment, observation or disclaimer made by the auditor in his report and the company secretary in practice in his secretarial audit report except two e-forms were filled with additional fee to ROC due to administrative reason.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has a comprehensive system of internal control to safeguard the Companyâs assets against any loss from unauthorized use and ensure proper authorization of financial transactions.
The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.
The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.
The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.
The Companies Act, 2013 has introduced under Section 143(3)(i) stating that the statutory auditors of the Company shall include in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in directorâs responsibility statement. The concept of reporting on internal financial controls is still new in India. This new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2017-18.
The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.
COMPLIANCE OF THE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
SEXUAL HARASSMENT POLICY
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Various workshops or awareness programme w.r.t. sexual harassment has been carried out during the FY 2017-18. ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.
The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.
The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.
POLICIES
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/
For and on behalf of the Board
Place: Gurugram Yogesh Chander Munjal Vinod Kumar Agrawal
Date: May 30, 2018 (Chairman & Managing Director) (Director)
(DIN 00003491) (DIN 00004463)
B-175, Greater Kailash,
Part I, A-224 Ist Floor,
Defence Colony
New Delhi, 110048
New Delhi 110024
Mar 31, 2017
The Directors have great pleasure in presenting the 32nd Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2017.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Companyâs Financial Results for the year under review are as follows:
(Rs. In lakhs)
Year Ended |
Year Ended |
|
31.03.17 |
31.03.16 |
|
Sales and other Income |
147,575.77 |
150,713.70 |
Profit before Interest, Depreciation & Tax |
11,071.86 |
11,727.49 |
Financial Cost |
5.39 |
12.19 |
Depreciation |
2,906.21 |
2,929.84 |
Profit before Tax |
8,160.26 |
8,785.45 |
Provision for Taxation |
2,505.07 |
2,670.22 |
Profit after Tax |
5,655.19 |
6,115.23 |
Net Profit brought forward |
18,554.25 |
16,364.50 |
Profit available for appropriation |
24,209.44 |
22,479.73 |
Dividend (Recommended) |
1,599.80 |
1,599.80 |
Dividend Tax (Net) |
325.68 |
325.68 |
Transfer to General Reserve |
2,000.00 |
2,000.00 |
Surplus Available |
20,283.96 |
18,554.25 |
OPERATIONS & STATE OF THE COMPANYâS AFFAIRS
The Company has achieved a sales turnover, including other income, of Rs. 147575.77 lakhs vis-a-vis Rs. 150713.70 lakhs in the previous year. The profit before tax in the current year was at Rs. 8160.26 lakhs as compared to Rs. 8785.45 lakhs in the previous year.
CREDIT RATING
The Companyâs financial discipline and prudence is reflected in the credit ratings ascribed by CRISIL rating agency as given below:
INR 6850 Long-Term Loans |
AA/Stable (Reaffirmed) |
INR 3000 Cash Credit |
AA/Stable (Reaffirmed) |
INR 4350 Letter of Credit |
CRISIL A1 |
INR 225 Bank Guarantee |
CRISIL A1 |
INR 600 Commercial Paper Programme |
CRISIL A1 |
TRANSFER TO GENERAL RESERVE
The Board has transferred an amount of Rs. 2000 lakhs to General Reserve before recommending the final dividend. The balance amount of Rs. 20,283.96 lakhs (Previous year Rs. 18,554.25 lakhs) will be retained as surplus in the statement of Profit and Loss.
DIVIDEND
Your directors are pleased to recommend a dividend of 200 per cent (i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2017 amounting to Rs. 1599.80 lakhs Dividend will be tax free in the hands of shareholders, as the Company will bear the dividend distribution tax of Rs. 325.68 lakhs. The dividend, if approved, at the Annual General Meeting shall be payable to the shareholders registered in the books of the Company and the beneficial owners whose names are furnished by the depositories, determined with reference to the book closure from August 12, 2017 to August 24, 2017 (both days inclusive).
SHARE CAPITAL & DEBENTURES
The authorized share capital of the Company is Rs. 15,00,00,000 (Fifteen crores rupees only) divided into 75,000,000 equity shares of Rs. 2 each. The paid up Share Capital as on March 31, 2017 was Rs. 7,99,92,500 (Seven crore ninety nine lakhs ninety two thousand five hundred rupees only).
During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not have any Debentures, Preferential Shares as on March 31, 2017.
FINANCE
Cash and cash equivalent as at March 31, 2017 was Rs. 621.19 lakhs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 10 and 12 to the financial statements. As per policy of loans to employees of the Company, during the year the Company provided an interest free loan amounting to Rs. 40,000/- to Mr. Saurabh Agrawal-Company Secretary & Key Managerial Person of the Company and the loan amount was fully repaid to Company by Mr. Saurabh Agrawal as on March 31, 2017.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.
In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the Financial Year under review, your Company has transferred unpaid/unclaimed dividend, amounting to Rs. 5.22 Lakhs for FY 2008-09 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.
AUDITORS
M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Gurugram, the Auditors of the Company, appointed at 29th Annual General Meeting for a period of 3 years, up to the date of the 32nd Annual General Meeting of the Company are now liable to retire. So, M/s S.R. Batliboi & Co. LLP will retire at the ensuing General Meeting of the Company.
Thus, on the recommendations of the Audit Committee, and after due deliberation and consideration, the Board recommends the appointment of M/s Deloitte Haskins & Sells LLP, Chartered Accountants, Gurugram, (Firm Registration no. 117366W/W-100018) as the Statutory Auditors of the Company in place of retiring auditors for five years, who will hold the office upto the conclusion of the 37th Annual General Meeting subject to the ratification of appointment by shareholders at every annual general meeting.
The Report given by the Auditors, M/s S.R. Batliboi & Co. LLP, Chartered Accountants, Gurugram, on the financial statements of the Company for the financial year 2016-17, is part of the Annual Report. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.
Further, with regard to section 134(3)(ca) of the Companies Act, 2013, no frauds have been reported by the auditors under section 143(12) of the said Act.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There are no qualifications, reservation, adverse remark, observations, comments or disclaimer given by the Auditors in their Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made thereunder regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Boardâs Report.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-D to this Report.
PARTICULARS OF EMPLOYEES
The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2017, is annexed hereto and forms part of this Report. Annexure-E
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. Please refer Annexure-F to
Boardâs Report
The Company was required to spend Rs.184.83 lakhs under Corporate Social Responsibility activities (CSR). The Company has spent 185.03 lakhs on CSR Activities during the financial year 2016-2017.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
ENVIRONMENT COMPLIANCE
We believe that âwaste is a precious resource kept in a wrong placeâ. We further believe that âthere is no waste as per the law of the natureâ. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing âLean and Low costâ machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in-house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made âZero incidentsâ as acceptable standard. Hazard Identification and Risk Assessment (HIRA) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society.
The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.
TOTAL PRODUCTIVE MAINTENANCE
The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of TPM are to increase (PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify various types of Losses & converts them into Profit.
We have achieved TPM Excellency Award âCategory Aâ for Gurugram and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurugram & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015.
Lean TPM Activities:
We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing. So far we are able to manufacture more than 700 machines In-House with Lean TPM Concept inclusive of many CNC Machines.
ISO/TS 16949 ACCREDITATION
Your Companyâs manufacturing facilities located at Gurugram, Haridwar and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.
LISTING
The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2017-18 has been paid to them well before the due date i.e. April 30, 2017. Annual Custody/Issuer fee for the year 2017-18 has been paid by the Company to NSDL and CDSL.
HUMAN RESOURCES
Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from âHuman Resources Managementâ to âHuman Capital Managementâ.
Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Companyâs ability to attract and retain quality people. The total headcounts were 3058 at the end of the year as compared to 3451 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing.
Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.
The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.
The Board has identified following risks:-
Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company.
The website link is given below:
http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf
RECOMMENDATION OF THE AUDIT COMMITTEE
During the year, all the recommendations of the Audit Committee were accepted by the Board.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the Financial Year 2016-17.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the period 2016-17, Mrs. Charu Munjal was the director liable to retire by rotation. And Mrs. Charu Munjal being eligible had offered herself for re-appointment before the shareholder at 31st Annual General Meeting of the Company. Shareholder confirmed her appointed at the 31st Annual General Meeting of the Company.
During the period 2016-17, Mr. Pankaj Munjal was appointed as Independent Director of the Company at the 31st Annual General Meeting of the Company.
Mr. Yogesh Chander Munjal was re-appointed as Managing Director of the Company for a further period of five years with effect from September 01, 2016 to August 31, 2021 at the 31st Annual General Meeting of the Company.
The Board of Directors in its meeting held on May 19, 2017, after recommendation of Nomination and Remuneration Committee, recommended to the shareholders variation in the Terms of Appointment of Mr. Yogesh Chander Munjal w.e.f. September 1, 2017.
Mr. Ashok Kumar Munjal (DIN 00003843) non-executive director of the Company is liable to retire by rotation at the ensuing Annual General Meeting. Mr. Ashok Kumar Munjal being eligible has offered himself for re-appointment.
Mr. Ashok Kumar Munjal aged about 66 years old, serves as the Managing Director of Sunbeam Auto Private Limited. Mr. Munjal has 33 years of experience in the field of engineering industry, investment, finance and auto component. He is holding the position of directorship in fourteenth Companies including Munjal Showa Limited. Mr. Munjal is a Commerce and Law Graduate from Punjab University, Chandigarh. He does not hold any share in the Company. He is the Member of Audit Committee and Share Transfer/ Stakeholder Relationship Committee of the Company. He is also the member of the Audit Committee of Orient Craft Limited.
Your directors recommend his re-appointment at the ensuing Annual General Meeting.
Mr. Shigeki Kobayashi was appointed as an additional director in the Company w.e.f. October 26, 2016. The Board also appointed him as a Joint Managing Director of the company subject to the approval of the shareholders at the ensuing general meeting. On the recommendations of Nomination and Remuneration Committee, the Board recommends his appointment before the shareholder at the 32nd General Meeting of the Company. The brief profile is given in the explanatory statement of the AGM Notice. The Board also recommends the variation in terms of appointment of Mr. Shigeki Kobayashi before the shareholders.
Mr. Masanao Matsui (DIN 00340218) has resigned as Director of the Company w.e.f May 19, 2017. The Board placed its appreciation for the valuable services rendered by Mr. Masanao Matsui during his tenure as Director of the Company.
Mr. Teruyoshi Sato (DIN07825074) has been appointed as an additional director of the Company w.e.f May 19, 2017. The detailed profile is given in the explanatory statement of the AGM Notice. The Board recommends his appointment before the shareholder at the 32nd General Meeting of the Company.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The following employees were designated as whole-time key managerial personnel of the Company:
a. Mr. Yogesh Chander Munjal- Managing Director
b. Mr. Shigeki Kobayashi- Joint Managing Director
c. Mr. Pankaj Gupta- Chief Financial Officer.
d. Mr. Saurabh Agrawal- Company Secretary
The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1
The Board appointed Mr. Devi Singh as Chairman of the Company w.e.f. May 20, 2016. Due to pre-occupancy, Mr. Devi Singh resigned from the post of chairmanship w.e.f. October 26, 2016 and continued to act as an Independent Director of the Company.
After resignation of Mr. Devi Singh, the Board of Directors appointed Mr. Yogesh Chander Munjal, Executive Director and Managing Director, as the Chairman of the Company. The Board also appointed Mr. Devi Singh as new Member of the Audit Committee and Mr. Shigeki Kobayashi as Member of the CSR Committee and Share Transfer/Stakeholders Relationship Committee.
The Company appreciates the dedicated and valuable guidance given by all the Directors of the Company.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee, the Risk Management Committee (non-mandatory committee). A detailed note on the composition of the Board and its committees is provided in the corporate governance report section of this Annual Report.
SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES
The Company neither has any Subsidiaries, joint ventures or associate companies nor any company has become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy has been included in this Report as Annexure-G.
The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)
BOARD DIVERSITY POLICY
The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors.
The Board Diversity Policy is available on our website
Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
a. 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;
b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2017 and of the Profit of your Company for the Financial Year ended March 31, 2017;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts for the Financial Year ended March 31, 2017 have been prepared on a going concern basis;
e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
f. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on armâs length basis and were in the ordinary course of business. During the year the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company.
All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The details of related party transactions are given in note number 27 and 27A of Financial Statements.
The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website. And the link of such policy is given below:
http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf
None of the Directors has any pecuniary relationships with the Company.
EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE
The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest.
There is no other qualification, reservation or adverse remark, comment, observation or disclaimer made by the auditor in his report and the company secretary in practice in his secretarial audit report.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has a comprehensive system of internal control to safeguard the Companyâs assets against any loss from unauthorized use and ensure proper authorization of financial transactions.
The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.
The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.
The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.
The Companies Act, 2013 has introduced under Section 143(3)(i) stating that the statutory auditors of the Company shall include in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in directorâs responsibility statement. The concept of reporting on internal financial controls is still new in India. This new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2016-17.
The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
SEXUAL HARASSMENT POLICY
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Various workshops or awareness programme w.r.t. sexual harassment has been carried out during the F.Y. 2016-17.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.
The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.
The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.
POLICIES
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/
Policy |
Web-link |
Policy for Determination of Materiality of Information or Events |
http://www.munjalshowa.net/wp-content/ uploads/2016/02/Policy-for-Determination-of- Materiality-of-Information-or-Events.pdf |
Boards Diversity Policy |
http://www.munjalshowa.net/wp-content/ uploads/2016/02/Boards-Diversity-Policy.pdf |
Corporate Social Responsibility Policy |
http://www.munjalshowa.net/wp-content/ uploads/2015/05/Corporate-Social-Responsibility- Policy1.pdf |
Vigil Mechanism / Whistle Blower Policy |
http://www.munjalshowa.net/wp-content/ uploads/2015/05/Vigil-Mechanism-Whistle-Blower- Policy2.pdf |
Nomination And Remuneration Policy |
http://www.munjalshowa.net/wp-content/ uploads/2015/05/Nomination-And-Remuneration- Policy1.pdf |
Records and Archives Management Policy |
http://www.munjalshowa.net/wp-content/ uploads/2016/02/Records-and-Archives- Management-Policy.pdf |
Related Party Policy |
http://www.munjalshowa.net/wp-content/ uploads/2016/02/Related-Party-Policy-of-MSL.pdf |
CODE OF INTERNAL PROCEDURES AND CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS |
http://www.munjalshowa.net/wp-content/ uploads/2015/05/CODE-OF-INTERNAL- PROCEDURES-AND-CONDUCT-FOR- REGULATING-MONITORING-AND-REPORTING- OF-TRADING-BY-INSIDERS.pdf |
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL |
http://www.munjalshowa.net/wp-content/ uploads/2016/02/Code-of-conduct.pdf |
For and on behalf of the Board
Place: Gurugram Yogesh Chander Munjal Vinod Kumar Agrawal
Date: May 19, 2017 (Chairman & Managing Director) (Director)
(DIN 00003491) (DIN 00004463)
B-175, Greater Kailash, Part I, A-224 Ist Floor, Defence Colony
New Delhi 110048 New Delhi 110024
Mar 31, 2016
Dear Members,
The Directors have great pleasure in presenting the 31st Annual Report together with the Audited Statement of Accounts for the financial year ended March 31, 2016.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Companyâs Financial Results for the year under review are as follows:
(Rs. In Lacs)
Year Ended |
Year Ended |
|
31.03.16 |
31.03.15 |
|
Sales and other Income |
150,702.88 |
165,111.23 |
Profit before Interest, Depreciation & Tax & Exceptional item |
11,727.49 |
13,474.60 |
Financial Cost |
12.19 |
44.54 |
Depreciation |
2,929.84 |
2,867.09 |
Exceptional Item (interest expenses reversed) |
- |
(67.74) |
Profit before Tax |
8,785.45 |
10,630.71 |
Provision for Taxation |
2,670.22 |
3,067.82 |
Profit after Tax |
6,115.23 |
7,562.89 |
Net Profit brought forward |
16,364.50 |
12,905.08 |
Net value of fixed assets transferred to retained earning whose useful life exceeded the specified useful life |
177.99 |
|
Profit available for appropriation |
22,479.73 |
20,289.98 |
Dividend (Recommended) |
1,599.80 |
1,599.80 |
Dividend Tax (Net) |
325.68 |
325.68 |
Transfer to General Reserve |
2,000.00 |
2,000.00 |
Surplus carried to Balance Sheet |
18,554.25 |
16,364.50 |
OPERATIONS & STATE OF THE COMPANYâS AFFAIRS
The Company has achieved a sales turnover, including other income, of Rs. 150,702.88 lacs vis-a-vis Rs. 165,111.23 lacs in the previous year. The profit before tax in the current year was at Rs. 8,785.45 lacs as compared to Rs. 10,630.71 lacs in the previous year.
CREDIT RATING
The Companyâs financial discipline and prudence is reflected in the credit ratings ascribed by rating agency CRISIL as given below:
(In Lacs)
INR 6,850 Long-Term Loans |
AA/Stable (Reaffirmed) |
INR 3,000 Cash Credit |
AA/Stable (Reaffirmed) |
INR 4,350 Letter of Credit |
CRISIL A1 |
INR 225 Bank Guarantee |
CRISIL A1 |
INR 600 Commercial Paper Programme |
CRISIL A1 |
TRANSFER TO GENERAL RESERVE
The Board has transferred an amount of Rs. 2000 lacs to General Reserve before declaring the interim dividend. The balance amount of Rs. 18,554.25 lacs (Previous year Rs. 16,364.50 lacs) will be retained as surplus in the statement of Profit and Loss.
DIVIDEND
Your directors declared an interim dividend of 200 per cent (i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the financial year ended March 31, 2016 amounting to Rs. 1,599.80 lacs. Dividend was a tax free in the hands of shareholders, as the Company has paid the dividend distribution tax of Rs. 325.68 lacs. The Board fixed March 17, 2016 as the Record Date for the purpose of Payment of Interim Dividend for the financial year 2015-16 and the dividend payout date was March 21, 2016.
The Company considered interim dividend as final dividend for the financial year 2015-16. The Company maintained the dividend in spite of declining in the net profit and wants to retain its surplus for the future growth of the Company.
SHARE CAPITAL & DEBENTURES
The paid up Equity Share Capital as on March 31, 2016 was Rs. 799.93 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has not accepted or repaid any Debentures, Preference Share, Bond and Security during the financial year, and none of the Directors of the Company hold any shares or security of the Company. The Company does not has any Debentures, Preferential Shares as on March 31, 2016.
FINANCE
Cash and cash equivalent as at March 31, 2016 was Rs. 242.58 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has neither given any guarantee nor provided any security covered under the provision of Section 186 of the Companies Act, 2013. The Company has made investments in Mutual funds and given loan/advance to its vendors during ordinary course of business. Please refer note numbers 10 and 12 to the financial statements.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis Report along with Certificate of the Auditors of your Company pursuant to SEBI (LODR) Regulations, 2015, have been included in this Report as Annexure-A. Your Company has been practicing the principles of good Corporate Governance over the years.
In terms of regulation 17(8) of SEBI (LODR) Regulations, 2015, Certificate of CEO/CFO is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed by all the Directors and members of Senior Management of your Company. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board also lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co. LLP Chartered Accountants, Gurgaon, the Auditors of the Company, appointed at 29th Annual General Meeting from the date of 29th Annual General Meeting up to the date of 32nd Annual General Meeting of the Company. Now at the 3131 Annual General Meeting of the Company, their appointment will be the subject to ratification by shareholders of the Company. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. The Board recommends their ratification of appointment for your approval.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar & Associates, a proprietorship firm of Company Secretaries to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as Annexure B. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 134(3)(m) of the Companies Act, 2013 and the rules made there under regarding Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo are given in Annexure-C which forms part of Boardâs Report.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure-Dto this Report.
PARTICULARS OF EMPLOYEES
The statement of particulars of employees as per Section 197 of the Companies Act, 2013 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, for the year ended March 31, 2016, is annexed hereto and forms part of this Report as Annexure-E.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. Please refer Annexure-Fto Boardâs Report
The Company was required to spend Rs. 171 lacs (approx) under Corporate Social Responsibility activities (CSR). The Company has spent 173.86 lacs on CSR Activities during the financial year 2015-2016.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report.
CHANGES IN THE TERMS IF ROYALTY PAYMENT WITH SHOWA CORPRORATION, JAPAN
The Company has entered with Showa Corporation, Japan (Showa) a world leader in shock absorber technology in May 1985 under technical collaboration contract apart from shareholders agreement.
Showa apprised the Company that due to current trend of localization Showa has to concentrate on R&D for global market and use of increasing investment more effectively so as to survive in such a global competition and further sustainable expansion and rate of Munjal Showa (MSL) @ 3 per cent not enough now and Showa bears the shortage of actual R&D expenses. Showa then requested to consider the change in the condition of the royalty ratio. The proposal was discussed at length by the Board of Directors and it was approved that âthe royalty to be paid by the Licensee (MSL) to Licensor shall be three (3) per cent of the ex-factory sales price of the Product invoices by Licensee. Provided that Licensor approves the products for which Licensor employs new technologies, the royalty rate of four (4) per cent shall be applied to such Products. All other conditions of this agreement shall remain same. This will be effective from April 01, 2016.
CHANGES IN MEMORANDUM OF ASSOCIATION (MOA) AND ARTICLES OF ASSOCIATION (AOA)
With the enactment of the Companies Act 2013, it is necessary to amend the existing MOA and to adopt new set of the AOA to be in accordance with the requirements of the Act.
The Board recommends changes in MOA and AOA before the shareholder for their approval.
ENVIRONMENT COMPLIANCE
We believe that âwaste is a precious resource kept in a wrong placeâ. We further believe that âthere is no waste as per the law of the natureâ. Hence from the solid waste like Iron & Steel from old scrap machines, we are collecting the raw material and we are manufacturing âLean and Low costâ machines with a philosophy of Easy to run, Easy to maintain, Easy to clean and Zero accident by meeting all the quality and productivity standard. Everything is done in house starting from design up to finishing of the machine. This concept of reuse of metallic waste is highly appreciated by CII, ACMA and international experts of our Japanese Collaborator. By Regular training for workers and staff to prevent accident related to mechanical, electrical, chemical, physiological and psychological safety the Company has made âZero incidentsâ as acceptable standard. Hazard Identification and Risk Assessment (HIRa) is our primary focus to mitigate and prevent the abnormalities. Because of our dedicated and committed efforts in continual improvement of Safety, Health and Environment area, we had received two National Awards from Ministry of Labour and Employment, Government of India for safety. The Company is a regular member of Haryana Environment Management Society. The Company has started Green Vendor Development Programme (GVDP) since 2009-10. The aim of the project is to conserve water and energy, Minimize generation of waste, terminate hazardous chemicals with non-hazardous chemicals, minimize carbon foot print and generate pollution prevention awareness throughout the plant and to achieve 100 per cent legal compliance. The Company is rigorously improving to create a better place for our next generation.
TOTAL PRODUCTIVE MAINTENANCE
The Company has taken up the journey of Total Productive Maintenance (TPM) with the help of JIPM (Japan Institute of Plant Maintenance) Japan and CII, TPM Club India. Major objectives of tPm are to increase (PQcDsME) Productivity, to improve Quality, to reduce Costs, to ensure in time Delivery, to increase Safety, to increase profitability, to build Morale and to protect environment by formation of small cross functional work groups and to improve overall Plant efficiency. The other objectives are to procure and install maintenance free plant and machinery; and to achieve zero defects, zero break down, zero losses and zero accidents. In nutshell, TPM is to identify various types of Losses & converts them into Profit. We have achieved TPM Excellency Award âCategory Aâ for Gurgaon and Manesar Plants in the years 2008 and 2010 respectively from Japan Institute of Plant Maintenance. We have been awarded by JIPM TPM Excellence Consistency Award for both Gurgaon & Manesar Plants in the year 2013. Now we have started TPM Journey in our Haridwar Plant also & we had TPM Kick-Off Ceremony in November 2015. We are going ahead to challenge TPM Excellence Special category by end of 2016.
Lean TPM Activities:
We have clubbed TPM with lean manufacturing system. Our Company has conducted Lean Manufacturing System (Value Stream Mapping) Work Shop through JMAC Japan. We have converted huge & complicated machines by using TPM & Lean Concepts. These machines consume very less Electricity, occupy less space, take very less inputs like consumables, manpower, tools, oils, compressed air, less set-up time, less cycle time, etc. These machines are 10S Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy, Superb, Sushil & Sunder and help us in reducing Cost of manufacturing.
ISO/TS 16949 ACCREDITATION
Your Companyâs manufacturing facilities located at Gurgaon, Haridwar and Manesar continue to maintain and uphold the prestigious ISO/TS 16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health & Safety Assessment Series) certifications from reputed leading Indian and International Certification Institutions. These certifications help in continuous improvements, besides emphasis being laid on prevention of defects, reduction of wastes and variation in supply chain management.
LISTING AGREEMENT
The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited.
LISTING
The shares of your Company are listed at The National Stock Exchange of India Limited and BSE Limited, and pursuant to clause C (9) (d) of Schedule V SEBI (LODR) Regulations, 2015, the Annual Listing fees for the year 2016-17 have been paid to them well before the due date i.e. April 30, 2016. Annual Custody/Issuer fee for the year 2016-17 will be paid by the Company to NSDL and CDSL on receipt of the invoices.
HUMAN RESOURCES
Promoting Human Resources management is the strength of our Company and over a period of time, we have changed our vision of employees from âHuman Resources Managementâ to âHuman Capital Managementâ. Your Company believes that employees form the fulcrum of growth and differentiation for the organization. The Company recognizes that people are its principal assets and that its continued growth is dependent upon the Companyâs ability to attract and retain quality people. The total headcounts were 3451 at the end of the year as compared to 3401 of the previous year. The Company encourages long-term commitment to the Company by rewarding its people for the opportunities they create and the value generated for customers and shareholders. The Company conducts several employee engagement and training programmes to upgrade the skills of the workforce and generate specialist in quality, maintenance and manufacturing.
Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which have helped the organization achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management Policy to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Companyâs competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.
The Company regularly conducts a study to develop a comprehensive 360° view on the opportunities, risks and threats to the business. These include areas such as market trends, new competition, changing customer preferences, disruptions in supplies, product development, talent management etc.
The Board has identified following risks:-
Intensifying Competition, Declining margins, Imposition of strict environmental / safety / regulatory regulations, Increase in raw material/component prices , Dependence on Collaborators , Over dependence on limited user segment base, Economic downturn, Risk of natural or manmade disasters, Product liability / recall, Single vendor dependence for critical components , Investment risks in expansion projects, Sales Catering only to Domestic Market, Over Dependence on few customers base, Retention & development of personnel and Inappropriate addressing of customer grievances. We through qualitative products and brand image, import only in case of cost advantage, regular improvement in productivity, controls over overhead and labour cost through a robust control of approvals, internal audit of environmental safety and regulatory compliance, localization of components, insurance, TS 16949 certification, TPM certification, regular development of alternate vendors where only single source, capturing customer complaints and response to them, have effective risk mitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the website of the Company. The website link is given below:
http://www.munjalshowa.net/wp-content/uploads/2015/05/Vigil-Mechanism-Whistle-Blower-Policy2.pdf RECOMMENDATION OF THE AUDIT COMMITTEE
During the year, there was no such recommendation of the Audit Committee which was not accepted by the Board. Hence, there is no need for the disclosure of the same in this Report.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during the Financial Year 2015-16 DIRECTORS & KEY MANAGERIAL PERSONNEL
The Company appreciates the dedicated and valuable guidance given by Late Sh. Brijmohan Lall Munjal during his tenure as director and chairman of the Company. His sad demise on November 01, 2015 is a big and irreparable loss to the nation as well as to the Company. Late Mr. Brijmohan Lall Munjal was a great leader and he was a guiding force for the Company. He was not only committed to success but also devoted to rising India. He did all that it takes to build an industrial group based on a sustainable business model. His vision allowed Hero Group to become the worldâs largest cycle maker, and Hero Motocorp the worldâs largest two-wheeler manufacturer by volumes. He positioned his motorcycles and scooter as more fuel efficient, which struck a chord with cost-conscious Indian buyers. The âFill it, shut it, forget itâ campaign remains one of the most effective ones in the countryâs corporate history. Worthy Chairman Sir, will always occupy a prominent place in Indiaâs corporate history for his ability to do all this, and lived a life on the principle that if you work hard and be good to people around you, success in business will follow.
Then, Mr. Krishan Chand Sethi was elected as the chairperson of the company on February 05, 2016. But the Company also lost the Guidance of Lt. Sh. Krishan Chand Sethi on March 29, 2016, another ace Director and Chairman of the Company, the Company appreciates the dedicated and valuable services rendered by him during his tenure. His unwavering passion, insatiable ambition and his strong sense of basic ethics and integrity will always be a motivation for the Company. Sethi Sir, will always occupy a prominent place in our hearts.
Mr. Pankaj Munjal is currently our Non executive Director and pursuant to Sub Section 6 of Section 152 of the Companies Act, 2013, his office is liable to determination by retirement of directors by rotation. Being eligible, he offers himself for reappointment and a declaration under Section 149(7) of Companies Act, 2013 has also been duly received by the Company from the said Director
Mrs. Charu Munjal non executive director of the Company is liable to retire by rotation at the ensuing Annual General Meeting. Mrs. Charu Munjal being eligible has offered herself for re-appointment.
Mrs. Charu Munjal aged 44 years has been appointed as the Non Executive Director of the Company w.e.f. May 23, 2014. She holds a Diploma in Textile Designing from Banaras Hindu University and has considerable exposure in creative designing and marketing field. She is the Whole Time Director in Shivam Autotech Limited.
Your directors recommend her re-appointment at the ensuing Annual General Meeting.
Pursuant to the recommendation of the Board, Nomination and Remuneration Committee, Mr. Yogesh Chander Munjal was reappointed by the Board of Directors, subject to the approval of the shareholders, as the Managing Director of the Company on May 20, 2015 for a further period of five years with effect from September 01, 2016 to August 31, 2021.
The shareholders approved the variation in the terms of appointment of Mr. Isao Ito the 30th Annual General Meeting of the Company. The Board of Directors in its meeting held on May 20, 2016 after recommendation of Nomination and Remuneration Committee recommended to the shareholders variation in the Terms of Appointment of Mr. Isao Ito w.e.f. September 1, 2016.
The Board also recommended the terms of Mr. Isao Ito, liable to retire by rotation in pursuance of Section 152 and any other provisions of the Companies Act, 2013, before the members of the company at the 30th AGM for their approval
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The following employees were designated as whole-time key managerial personnel:
a. Mr. Yogesh Chander Munjal- Managing Director
b. Mr. Isao Ito- Joint Managing Director
c. Mr. Pankaj Gupta- Chief Financial Officer.
d. Mr. Saurabh Agrawal- Company Secretary
The information under rule 5(1) of Companies (Appointment & Remuneration) Rules 2014 is given in Annexure D-1
The Board of Directors appointed Mr. Devi Singh, Independent Director, as Chairman of the Company. Board and also appointed Mr. Surinder Kumar Mehta as Chairman of the Nomination and Remuneration Committee and Mr. Yogesh Chander Munjal as Chairman of the CSR Committee.
COMMITTEES OF THE BOARD
Currently, the Board has five committees: the Audit Committee, the Nomination and Remuneration Committee, the Corporate Social Responsibility Committee, the Share Transfer/ Stakeholders Relationship Committee, the Risk Management Committee (non mandatory committee). A detailed note on the composition of the Board and its committees is provided in the Corporate governance report section of this Annual Report.
SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES
The Company neither has any Subsidiaries, joint ventures or associate companies nor any company has become or ceased to be its Subsidiaries, joint ventures or associate companies during the year.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the other committees of the Board i.e. Audit Committee, Nomination & Remuneration Committee and Share Transfer/ Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy has been included in this Report as Annexure-G.
The details of remuneration, sitting fee etc. paid to directors are given in Corporate Governance Report. (Please refer point no. IV of Corporate Governance Report)
BOARD DIVERSITY POLICY
The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on our website
Web-link: http://www.munjalshowa.net/wp-content/uploads/2016/02/Boards-Diversity-Policy.pdf MEETINGS
A calendar of Meetings is prepared and circulated in advance to the Directors.
During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. (Please refer point no. I & II of Corporate Governance Report)
DIRECTORSâ RESPONSIBILITY STATEMENT
Your Directors make the following statement in terms of Section 134(3)(c) & (5) of the Act, which is to the best of their knowledge and belief and according to the information and explanations obtained by them:
a. that in the preparation of the annual accounts for the Financial Year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;
b. that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the State of Affairs as at March 31, 2016 and of the Profit of your Company for the Financial Year ended March 31, 2016;
c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
d. that the annual accounts for the Financial Year ended March 31, 2016 have been prepared on a going concern basis;
e. that the Directors have laid down Internal Financial Controls which were followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and
f. that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were on armâs length basis and were in the ordinary course of business. During the year the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material. Hence, requirement of Form AOC-2 as required under section 188(1) of the Companies Act, 2013 is not applicable to the Company. All transactions with related parties were placed before Audit Committee and Audit committee has given omnibus approval for repetitive and foreseen transactions. The Board also noted these transactions on quarterly basis. The detail with related party transactions is given in note number 28 and 28A of Financial Statements.
The Company has developed a policy on Related Party Transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Companyâs website. And the link of such policy is given below:
http://www.munjalshowa.net/wp-content/uploads/2016/02/Related-Party-Policy-of-MSL.pdf
None of the Directors has any pecuniary relationships with the Company.
EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE
The observations of the Auditors in their report read with the notes to accounts are self-explanatory and do not require any specific comments. However as pointed out by the Auditors in annexure to their report at point number vii(a), the slight delay in payment of undisputed statutory dues in few cases was on account of finalization of accounts beyond the due date of statutory dues and the same were paid with interest. There is no other qualification, reservation or adverse remark or disclaimer made by the auditor in his report; and the company secretary in practice in his secretarial audit report.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has a comprehensive system of internal control to safeguard the Companyâs assets against any loss from unauthorized use and ensure proper authorization of financial transactions.
The Company has internal control systems commensurate with the size and nature of the business and has experienced personnel positioned adequately in the organization to ensure internal control processes and compliances. The Company takes abundant care in designing, reviewing and monitoring regularly the working of internal control systems and their compliances for all important financial internal control processes. The Audit findings are reported on quarterly basis to the Audit Committee of the Board headed by a Non-executive Independent Director.
The Company has robust ERP systems based on SAP platform. This ensures high degree of systems based checks and controls.
The Company maintains a system of internal controls designed to provide a high degree of assurance regarding the effectiveness and efficiency of operations, the reliability of financial controls and compliance with laws and regulations.
The Companies Act, 2013 has introduced under Section 143(3)(i) of the Act which include the statutory auditors also to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls in addition to the reporting by Board of Directors in directorâs responsibility statement. The concept of reporting on internal financial controls is still new in India this new reporting requirement has thrown up many challenges. The Company has developed the internal financial control processes and that was vetted by the internal auditors during the year. The same has also been verified by the statutory auditors and who have reported that all the material Internal financial controls exist during the financial year 2015-16. The Company, with the help of reputed professionals has developed a compliance tool for the purpose of legal compliance of all the applicable Acts to the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.
SEXUAL HARASSMENT POLICY
The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government of India, State Governments of Haryana and Uttrakhand, other local authorities, bankers, suppliers, customers and other stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense of commitment shown by the employees at all levels during the year deserve special mention.
The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by Showa Corporation, Japan and for the encouragement and assurance, which our collaborator has provided from time to time for the growth and development of the Company.
The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received from its valued shareholders.
POLICIES
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All our corporate governance policies are available on our website i.e. http://www.munjalshowa.net/
Policy |
Web-link |
Policy for Determination of Materiality of Information or Events |
http://www.munjalshowa.net/wp- content/uploads/2016/02/Policy-for- Determination-of-Materiality-of- Information-or-Events.pdf |
Boards Diversity Policy |
http://www.munjalshowa.net/wp- content/uploads/2016/02/Boards-Diversity Plicy.pdf |
Corporate Social Responsibility Policy |
http://www.munjalshowa.net/wp- content/uploads/2015/05/Corporate-Social- |
Responsibility-Policy1.pdf |
|
Vigil Mechanism / Whistle Blower Policy |
http://www.munjalshowa.net/wp- content/uploads/2015/05/Vigil-Mechanism- |
Whistle-Blower-Policy2.pdf |
|
Nomination And Remuneration Policy |
http://www.munjalshowa.net/wp- content/uploads/2015/05/Nomination-And- Remuneration-Policy1.pdf |
Records and Archives Management Policy |
http://www.munjalshowa.net/wp- content/uploads/2016/02/Records-and- Archives-Management-Policy.pdf |
Related Party Policy |
http://www.munjalshowa.net/wp- content/uploads/2016/02/Related-Party- Policy-of-MSL.pdf |
CODE OF INTERNAL PROCEDURES AND CONDUCT FOR REGULATING, MONITORING AND REPORTING OF TRADING BY INSIDERS |
http://www.munjalshowa.net/wp- content/uploads/2015/05/CODE-OF- INTERNAL-PROCEDURES-AND- CONDUCT-FOR-REGULATING- MONITORING-AND-REPORTING-OF- TRADING-BY-INSIDERS.pdf |
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL |
http://www.munjalshowa.net/wp- content/uploads/2016/02/Code-of- conduct.pdf |
For and on behalf of the Board
Place: Gurgaon Yogesh Chander Munjal Vinod Kumar Agrawal
Date: May 20, 2016 (Managing Director) (Director)
(DIN 00003491) (DIN 00004463)
B-175, Greater Kailash, Part I, A-224 Ist Floor, Defence Colony
New Delhi, 110048 New Delhi, 110024
Mar 31, 2015
Dear Members,
The Directors have great pleasure in presenting the 30th Annual Report
together with the Audited Statement of Accounts for the financial year
ended March 31,2015.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Company''s Financial Results for the year
under review are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31.03.15 31.03.14
Sales and other Income 179,197.05 174,074.41
Profit before Interest, Depreciation,
Tax & Exceptional item 13,474.60 11,129.85
Financial Cost 44.54 270.32
Depreciation 2,867.09 2,840.99
Exceptional Item (interest expenses reversed) (67.74) -
Profit before Tax 10,630.71 8,018.54
Provision for Taxation 3,067.82 1,048.46
Profit after Tax 7,562.89 6,970.08
Net Profit brought forward 12,905.08 9,572.73
Net value of fixed assets transferred to
retained earning whose
useful life exceeded the specified useful life 177.99 -
Profit available for appropriation 20,289.98 16,542.81
Dividend (Recommended) 1,599.80 1,399.83
Dividend Tax (Net) 325.68 237.90
Transfer to General Reserve 2,000.00 2,000.00
Surplus carried to Balance Sheet 16,364.50 12,905.08
OPERATIONS & STATE OF THE COMPANY''S AFFAIRS
The Company has achieved a sales turnover, including other income, of
Rs. 179,197.05 lacs registering a growth of 2.94 per cent vis-a-vis Rs.
174,074.41 lacs in the previous year. The profit before tax in the
current year was at Rs. 10,630.71 lacs as compared to Rs. 8,018.54 lacs
in the previous year registering a growth of 32.58 per cent.
CREDIT RATING
The Company''s financial discipline and prudence is reflected in the
credit ratings ascribed by rating agency CRISIL as given below:
INR 4,500 Long-Term Loans AA/Stable (Reaffirmed)
INR 2,000 Cash Credit AA/Stable (Reaffirmed)
INR 7,700 Letter of Credit CRISIL A1
INR 225 Bank Guarantee CRISIL A1
INR 600 Commercial Paper Programme CRISIL A1
TRANSFER TO GENERAL RESERVE
The Board proposes to transfer an amount of Rs. 2,000 lacs to General
Reserve. The balance amount of Rs. 16,364.50 lacs (Previous year Rs.
12,905.08 lacs) will be retained as surplus in the statement of Profit
and Loss.
DIVIDEND
Your directors are pleased to recommend a dividend of 200 per cent
(i.e. Rs. 4/- Per equity share of Rs. 2/- each fully paid up) for the
financial year ended March 31, 2015 amounting to Rs. 1,599.8 lacs in
aggregate as compared to 175 per cent i.e. Rs. 3.50/- per share in the
corresponding last year. Dividend will be tax free in the hands of
shareholders, as the Company will bear the dividend distribution tax of
Rs. 325.68 lacs (Previous year Rs. 237.90 lacs). The dividend, if
approved, at the Annual General Meeting shall be payable to the
shareholders registered in the books of the Company and the beneficial
owners whose names are furnished by the depositories, determined with
reference to the book closure from August 08, 2015 to August 26, 2015
(both days inclusive).
SHARE CAPITAL & DEBENTURES
The paid up Equity Share Capital as on March 31,2015 was Rs. 7.99
Crore. During the year under review, the Company has not issued shares
with differential voting rights nor granted stock options or sweat
equity. And also the Company has not accepted or repaid any Debentures,
Preference Share Capital and any Bond & Security during the financial
year, and none of the Directors of the Company hold any shares or
security of the Company. The Company does not has any Debentures,
Preferential Shares as on March 31,2015.
FINANCE
Cash and cash equivalent as at March 31,2015 was Rs. 156.41 lacs. The
Company continues to focus on judicious management of its working
capital. Receivables, inventories and other working capital parameters
were kept under strict check through continuous monitoring.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has neither given any guarantee nor provided any security
covered under the provision of Section 186 of the Companies Act, 2013.
The Company has made investments in Mutual funds and given loan/advance
to its vendors during ordinary course of business. Please refer note
numbers 10 and 12 to the financial statements.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report along with Certificate of the Auditors of your Company pursuant
to clause 49 of the Listing Agreement with the Stock Exchanges, have
been included in this Report as Annexure-A. Your Company has been
practicing the principles of good Corporate Governance over the years.
In terms of part IX of Clause 49 of the Listing Agreement, Certificate
of CEO/CFO is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed
by all the Directors and members of Senior Management of your Company.
The Board of Directors support the broad principles of Corporate
Governance. In addition to the basic governance issues, the Board also
lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co.LLP, Chartered Accountants, Gurgaon, the
Auditors of the Company, appointed at 29th Annual General Meeting from
the date of 29th Annual General Meeting up to the date of 32nd Annual
General Meeting of the Company. Now at the 30th Annual General Meeting
of the Company, their appointment will be the subject to ratification
by shareholders of the Company. The Company has also received
certificate from the auditors to the effect that their ratification of
appointment, would be in accordance with Section 139 & 141 of the
Companies Act, 2013 and the rules framed thereunder.
The Board recommends their ratification of appointment for your
approval.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s Satyender Kumar &
Associates, a proprietorship firm of Company Secretaries to undertake
the Secretarial Audit of the Company. The Report of the Secretarial
Audit Report is annexed herewith as Annexure -B.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information pursuant to Section 134(3)(m) of the Companies Act,
2013 and the rules made thereunder regarding Conservation of Energy,
Technology Absorption and Foreign Exchange earnings & outgo are given
in Annexure-C which forms part of Board''s Report.
EXTRACT OF ANNUAL RETURN
The extract of annual return in Form MGT 9 as required under Section
92(3) and Rule 12 of the Companies (Management and Administration)
Rules, 2014 is appended as an Annexure-D to this Report.
PARTICULARS OF EMPLOYEES
The statement of particulars of employees as per Section 197 of the
Companies Act, 2013 read with Rule 5 of The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, for the year ended
March 31,2015, is annexed hereto and forms part of this Report.
Annexure-E
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As part of its initiatives under Corporate Social Responsibility (CSR),
the Company has undertaken projects in the areas of Education,
Livelihood, Health, Water and Sanitation. These projects are largely in
accordance with Schedule VII of the Companies Act, 2013. Please refer
Annexure-F to Board''s Report
The Company was required to spend Rs. 156 lacs under Corporate Social
Responsibility activities (CSR Activities) but Company could spend only
Rs. 28.33 Lacs under CSR Activities. As the CSR is a new concept for
the Company so Company is trying to develop its CSR activities. Your
Company will try to spend whole amount to be spent on CSR activities
during the financial year 2015-2016.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and the date of the report.
ENVIRONMENT COMPLIANCE
We believe that "waste is a precious resource kept in a wrong place".
We further believe that "there is no waste as per the law of the
nature". Hence from the solid waste like Iron & Steel from old scrap
machines, we are collecting the raw material and we are manufacturing
"Lean and Low cost" machines with a philosophy of Easy to run, Easy to
maintain, Easy to clean and Zero accident by meeting all the quality
and productivity standard. Everything is done in house starting from
design up to finishing of the machine. This concept of reuse of
metallic waste is highly appreciated by CII, ACMA and international
experts of our Japanese Collaborator. By Regular training for workers
and staff to prevent accident related to mechanical, electrical,
chemical, physiological and psychological safety the Company has made
"Zero incidents" as acceptable standard. Hazard Identification and Risk
Assessment (HIRA) is our primary focus to mitigate and prevent the
abnormalities. Because of our dedicated and committed efforts in
continual improvement of Safety, Health and Environment area, we had
received two National Awards from Ministry of Labour and Employment,
Government of India for safety. The Company is a regular member of
Haryana Environment Management Society.
The Company has started Green Vendor Development Programme (GVDP) since
2009-10. The aim of the project is to conserve water and Energy,
Minimize generation of waste, terminate hazardous chemicals with
non-hazardous chemicals, minimize carbon foot print, generate pollution
prevention awareness throughout the plant and to achieve 100 percent
legal compliance. The Company is rigorously improving to create a better
place for our next generation.
TPM
The Company has taken up the journey of Total Productive Maintenance
(TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
Japan and CII, TPM Club India. Major objectives of TPM are to increase
(PQCDSME) Productivity, to improve Quality, to reduce Costs, to ensure
in time Delivery, to increase Safety, to increase profitability, to
build Morale and to protect environment by formation of small cross
functional work groups and to improve overall Plant efficiency. The
other objectives are to procure and install maintenance free plant and
machinery; and to achieve zero defects, zero break down, zero losses
and zero accidents. In nutshell, TPM is to identify 16 types of Losses
& converts them into Profit.
We have achieved TPM Excellency Award "category A" for Gurgaon and
Manesar Plant in the years 2008 and 2010 respectively from Japan
Institute of Plant Maintenance. We have been awarded by JIPM TPM
Excellence Consistency Award for both Gurgaon & Manesar Plants in the
year 2013. Now we have started TPM Journey to our Haridwar Plant.
Lean TPM Activities:
We have clubbed TPM with lean manufacturing system. Our Company has
conducted Lean Manufacturing System (Value Stream Mapping) Work Shop.
We have converted huge & complicated machines to Lean Machines. These
machines consumes very less Electricity, occupies less space, takes
very less inputs like consumables, manpower, tools, oils, compressed
air, less set-up time etc. These machines are 5S Machines. Simple,
Small, Slim, Speed & Safe and helps us in reducing Cost of
manufacturing.
ISO/TS 16949 ACCREDITATION
Your Company''s manufacturing facilities located at Gurgaon, Haridwar
and Manesar continue to maintain and uphold the prestigious ISO/TS
16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
Safety Assessment Series) certifications from reputed leading Indian
and International Certification Institutions. These certifications help
in continuous improvements, besides emphasis being laid on prevention
of defects, reduction of wastes and variation in supply chain
management.
LISTING
The shares of your Company are listed at The National Stock Exchange of
India Limited and BSE Limited, and pursuant to Clause 38 of the Listing
Agreement, the Annual Listing fees for the year 2015-16 have been paid
to them well before the due date i.e. April 30, 2015. Annual
Custody/Issuer fee for the year 2015-16 will be paid by the Company to
NSDL and CDSL on receipt of the invoices.
HUMAN RESOURCES
Preventive Human Resources management is the strength of our Company
and over a period of time, we have changed our vision of employees from
"Human Resources Management" to "Human Capital Management".
Your Company believes that employees form the fulcrum of growth and
differentiation for the organization. The Company recognizes that
people are its principal assets and that to continued growth is
dependent upon the Company''s ability to attract and retain quality
people. The total headcounts were 3,401 at the end of the year as
compared to 3,525 of the previous year. The Company encourages
long-term commitment to the Company by rewarding its people for the
opportunities they create and the value generated for customers and
shareholders. The Company conducts several training programmes to
upgrade the skills of the workforce.
Many initiatives have been taken to support business through
organizational efficiency, process change support and various employee
engagement programmes which has helped the organization achieve higher
productivity levels. A significant effort has also been undertaken to
develop leadership as well as technical/ functional capabilities in
order to meet future talent requirement.
BUSINESS RISK MANAGEMENT
The Company has a Risk Management Policy to identify, evaluate business
risks and opportunities. This framework seeks to create transparency,
minimize adverse impact on the business objectives and enhance the
Company''s competitive advantage. The business risk framework defines
the risk management approach across the enterprise at various levels
including documentation and reporting.
The Company regularly conducts a study to develop a comprehensive 360°
view on the opportunities, risks and threats to the business. These
include areas such as market trends, new competition, changing customer
preferences, disruptions in supplies, product development, talent
management etc.
The Board has identified following risks:-
Intensifying Competition, Declining margins, Imposition of strict
environmental / safety / regulatory regulations, Increase in raw
material/component prices , Dependence on Collaborators , Over
dependence on limited user segment base, Economic downturn, Risk of
natural or manmade disasters, Product liability / recall, Single vendor
dependence for critical components , Investment risks in expansion
projects, Sales Catering only to Domestic Market, Over Dependence on
few customers base, Retention & development of personnel and
Inappropriate addressing of customer grievances. We through qualitative
products and brand image, import only in case of cost advantage,
regular improvement in productivity, controls over overhead and labour
cost through a robust control of approvals, internal audit of
environmental safety and regulatory compliance, localization of
components, insurance, TS 16949 certification, TPM certification,
regular development of alternate vendors where only single source,
capturing customer complaints and response to them, have effective risk
mitigating plans.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism policy to deal with instance of fraud
and mismanagement, if any. The details of the Policy is explained in
the Corporate Governance Report and also posted on the website of the
Company. The website link is given below-
http://www.munialshowa.net/pdf/Vigil%20Mechanism%20%20Whistle%20
Blower%20Policv.pdf
RECOMMENDATION OF THE AUDIT COMMITTEE
During the year, there was no such recommendation of the Audit
Committee which was not accepted by the Board. Hence, there is no need
for the disclosure of the same in this Report.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the Company during
the Financial Year 2014-15 DIRECTORS & KEY MANAGERIAL PERSONNEL
Mr. Matsui Masanao (DIN 00340218) has been appointed as an additional
director under Section 161(1) and any other applicable provisions of
the Companies Act, 2013 and the rules made thereunder (including any
statutory modification(s) or re-enactment thereof for the time being in
force) read with Article 89 of the Articles of Association of the
Company w.e.f May 22, 2015.
Mr. Ashok Kumar Munjal (DIN 00003843) non executive director of the
Company is liable to retire by rotation at the ensuing Annual General
Meeting. Mr. Ashok Kumar Munjal being eligible has offered himself for
re-appointment.
Mr. Ashok Kumar Munjal aged about 64 years old, serves as the Managing
Director of Sunbeam Auto Private Limited. Mr. Munjal has 33 years of
experience in the field of engineering industry, investment, finance
and auto component. He serves as a Director in Ledpra Infracon Private
Limited, Radha Kishan Buildwell Private Limited And Privilege Estates
Private Limited w.e.f. October 13, 2014. He is also a Director in
Orient Craft Limited, SKH Education Private Limited., Chandernagar
Chemicals And Minerals Private Limited, Hero Auto Components Private
Limited, H & H Industries Private Limited and Sunglow Industries
Private Limited. Mr. Munjal is a Commerce and Law Graduate from Punjab
University, Chandigarh. He does not hold any share in the Company. He
is the Member of Audit Committee and Share Transfer/Stakeholder
Relationship Committee of the Company. He is also the member of the
Audit Committee of Orient Kraft Limited. He is holding the position of
directorship in twelve Companies including Munjal Showa Limited.
Your directors recommend his re-appointment at the ensuing Annual
General Meeting.
Mr. Matsuura Katsuhiko (DIN 05276954) has resigned as Director of the
Company w.e.f May 22, 2015. The Board placed its appreciation for the
valuable services rendered by Mr. Matsuura Katsuhiko during his tenure
as Director of the Company.
The shareholders approved the variation in the terms of appointment of
Mr. Yogesh Chander Munjal (DIN 00003491) & Mr. Isao Ito (DIN 05134031)
at the 29th Annual General Meeting of the Company. The Board of
Directors in its meeting held on May 22, 2015 after recommendation of
Nomination and Remuneration Committee recommended to the shareholders
variation in the Terms of Appointment of Mr. Yogesh Chander Munjal &
Mr. Isao Ito w.e.f. September 1,2015.
Mr. Pankaj Gupta was looking after dual responsibility of Chief
Financial Officer and Company Secretary of the Company after the
resignation of Mr. Mahesh Taneja from the post of Chief Financial
Officer and the company was searching for a Company Secretary who will
take care of all secretarial functions. After completion of search Mr.
Pankaj Gupta resigned from the post of Company Secretary & Compliance
Officer and retained the post of Chief Financial Officer of the Company
w.e.f. February 06, 2015.
Mr. Saurabh Agrawal was appointed as Company Secretary & Compliance
Officer of the Company w.e.f. February 06, 2015.
The following employees were designated as whole-time key managerial
personnel:
a. Mr. Yogesh Chander Munjal- Managing Director
b. Mr. Isao Ito- Joint Managing director
c. Mr. Pankaj Gupta- Chief Financial Officer
d. Mr. Saurabh Agrawal- Company Secretary
Pursuant to the section 149, 150, 152 of the Company Act 2013, the
rules framed thereunder and the Listing Agreement, All the Independent
Directors have been appointed for five years w.e.f. April 01,2014 to
March 31,2019.
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
The members of the Company at 29th Annual General Meeting held on
August 28, 2014 approved the appointments of Mrs. Charu Munjal (DIN
03094545) as a non-executive Non-Independent Director who is liable to
retire by rotation and of Mr. Krishan Chand Sethi, Mr. Vinod Kumar
Agrawal, Mr. Devi Singh, Mr. Surinder Kumar Mehta and Mr. Nand Dhameja
as Independent Directors who are not liable to retire by rotation.
The information under rule 5(1) of Companies (Appointment &
Remuneration) Rules 2014 is given in Annexure D-1
SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES
The Company neither has any Subsidiaries, joint ventures or associate
companies nor any company have become or ceased to be its Subsidiaries,
joint ventures or associate companies during the year.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the other committees of the Board i.e. Audit
Committee, Nomination & Remuneration Committee, Risk Management
Committee and Share Transfer/ Stakeholders Relationship Committee. The
manner in which the evaluation has been carried out has been explained
in the Corporate Governance Report.
REMUNERATION POLICY AND REMUNERATION TO THE DIRECTORS
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Nomination and
Remuneration Policy has been included in this Report as Annexure-G.
The details of remuneration, sitting fee etc. paid to directors are
given in Corporate Governance Report. (Please refer point no. IV of
Corporate Governance Report)
MEETINGS
A calendar of Meetings is prepared and circulated in advance to the
Directors.
During the year four Board Meetings and four Audit Committee Meetings
were convened and held. The details of which are given in the Corporate
Governance Report. The intervening gap between the Meetings was within
the period prescribed under the Companies Act, 2013 and Listing
Agreement. (Please refer point no. I & II of Corporate Governance
Report)
DIRECTORS'' RESPONSIBILITY STATEMENT
Your Director''s state that:
a. in the preparation of the annual accounts for the year ended March
31,2015, the applicable accounting standards read with requirements set
out under Schedule III to the Act, have been followed and there are no
material departures from the same;
b. the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31,2015 and of the profit of the Company for
the year ended on that date;
c. 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;
d. the Directors have prepared the annual accounts on a ''going
concern'' basis;
e. the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
f. the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
RELATED PARTY TRANSACTIONS
All contracts/ arrangements/ transactions entered by the Company during
the financial year with related parties were on arm''s length basis and
were in the ordinary course of business. During the year the Company
had not entered into any contract/ arrangement/ transaction with
related parties which could be considered material. Hence, requirement
of Form AOC-2 as required under section 188(1) of the Companies Act,
2013 is not applicable to the Company.
All transactions with related parties were placed before Audit
Committee and Audit committee has given omnibus approval for repetitive
and foreseen transactions. The Board also noted these transactions on
quarterly basis. The detail with related party transactions is given
in note number 28 and 28A of financial statement.
The Company has developed a policy on Related Party Transactions. The
policy on Related Party Transactions as approved by the Board is
uploaded on the Company''s website. And the link of such policy is given
below:
http://www.munialshowa.net/pdf/Related%20Partv%20Transaction%20
Policv.pdf
None of the Directors has any pecuniary relationships with the Company.
EXPLANATIONS OR COMMENTS BY THE BOARD ON QUALIFICATION, RESERVATION OR
ADVERSE REMARK OR DISCLAIMER MADE
The observations of the Auditors in their report read with the notes to
accounts are self-explanatory and do not require any specific comments.
However as pointed out by the Auditors in annexure to their report at
point number vii(a), the slight delay in payment of undisputed
statutory dues in few cases was on account of finalization of accounts
beyond the due date of statutory dues and the same were paid with
interest.
There is no other qualification, reservation or adverse remark or
disclaimer made by the auditor in his report; and the company secretary
in practice in his secretarial audit report.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has a comprehensive system of internal control to safeguard
the Company''s assets against any loss from unauthorized use and ensure
proper authorization of financial transactions.
The Company has internal control systems commensurate with the size and
nature of the business and has experienced personnel positioned
adequately in the organization to ensure internal control processes and
compliances. The Company takes abundant care in designing, reviewing
and monitoring regularly the working of internal control systems and
their compliances for all important financial internal control
processes. The Audit findings are reported on quarterly basis to the
Audit Committee of the Board headed by a Non-executive Independent
Director.
The Company has robust ERP systems based on SAP platform. This ensures
high degree of systems based checks and controls.
The Company maintains a system of internal controls designed to provide
a high degree of assurance regarding the effectiveness and efficiency
of operations, the reliability of financial controls and compliance
with laws and regulations.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme.
4. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company''s
operations in future.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation
and support extended to the Company by Government of India, State
Governments of Haryana and Uttrakhand, other local authorities,
bankers, suppliers, customers and other stakeholders whose continued
support has been a source of strength to the Company. The continued
dedication and sense of commitment shown by the employees at all levels
during the year deserve special mention.
The Directors also place on record their appreciation for the valuable
assistance and guidance extended to the Company by Showa Corporation,
Japan and for the encouragement and assurance, which our collaborator
has provided from time to time for the growth and development of the
Company.
The Directors also take this opportunity to express their deep
gratitude for the continued co-operation and support received from its
valued shareholders.
For and on behalf of the Board
Place: New Delhi Yogesh Chander Munjal
Date: May 22, 2015 (Managing Director)
(DIN 00003491)
B-175, Greater Kailash, Part I,
New Delhi, 110048
Krishan Chand Sethi
(Director)
(DIN 00004471)
9/304 East End Apartments,
Mayur Vihar Extn. Phase I,
New Delhi, 110096
Mar 31, 2013
Dear Members,
The Directors have great pleasure in presenting the 28th Annual Report
together with the Audited Statement of Accounts for the financial year
ended March 31, 2013.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Company''s Financial Results for the year
under review are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31.03.13 31.03.12
Sales and other Income 172743.67 167568.49
Profit before Interest,
Depreciation, Tax &
Exceptional item 10886.81 12414.66
Exceptional Item
(Interest expenses) 614.34
Financial Cost 716.57 1101.90
Depreciation 2764.20 2722.88
Profit before Tax 6791.70 8589.88
Provision for Taxation 723.64 1876.99
Profit after Tax 6068.06 6712.89
Net Profit brought forward 6908.43 3590.03
Profit available for appropriation 12976.49 10302.92
Dividend (Recommended) 1199.85 1199.85
Dividend Tax (Net) 203.91 194.64
Transfer to General Reserve 2000.00 2000.00
Surplus carried to Balance Sheet 9572.73 6908.43
OPERATIONS
The Company has achieved a sales turnover of Rs. 172743.67 lacs
registering a growth of 3.09 per cent vis- Ã -vis Rs. 167568.49 lacs in
the previous year. The profit before tax in the current year was at Rs.
6791.69 lacs as compared to Rs. 8,589.88 lacs in the previous year and
the decrease was mainly on account of wage settlement at Manesar Plant,
reducing the useful life of certain assets and provision of interest of
Rs.697.33 lacs (including Rs.614.34 lacs shown as exceptional item as
above) on Manesar Land Enhancement Demand made by HSIIDC during the
year under review.
FUTURE PROSPECTS
As per RBI''s Indian Economy survey there is an anticipation of a modest
recovery with growth in 2013-14 at 5.7 per cent from 5.0 per cent in
the year 2012-13 while Average WPI & CPI inflation moderate to 5.5 per
cent from 7.4 per cent & 7.5 per cent from 10.2 per cent in year
2012-13 respectively which shows that inflation expectations have
moderated slightly, while business expectations remain subdued.
As per Consumer Confidence Survey March 2013 conducted by Reserve Bank
of India the negative sentiments with respect to the current and future
economic conditions have been rising over the last four quarters.
The outlook has been comparatively better than the perception on
current economic conditions due to positive forecast for the monsoon
from normal to excess based on the El Nino and sea temperature
patterns, increase in rural demand due to rising agricultural incomes
to the economy. About one third of the respondents reported no change
in the employment scenario. However, the overall perception on future
employment scenario remains optimistic.
Our existing customers have assured to meet predetermined sales targets
with around 10 per cent growth, with the support of new models likely
to be launched both in 2 Wheeler and 4 Wheeler segment and export in
the coming year i.e.2013-14. They have planned major initiative to
boost the industry sentiments and accelerate growth in the year 2013-14
mainly through new launches, campaigns, capacity addition and network
expansion and a significant step working toward their global vision. In
nutshell, all customers of the Company are on growth path and Company
is confident to meet their increased demand.
TRANSFER TO GENERAL RESERVE
The Board proposes to transfer an amount of Rs. 2000.00 lacs to General
Reserve, having regard to the requirements of Section 205 (2A) of the
Companies Act, 1956. The balance amount of Rs. 9572.73 lacs (Previous
year Rs. 6908.43 lacs) will be retained in the Profit and Loss Account.
DIVIDEND
Your directors are pleased to recommend a dividend of 150 per cent
(i.e. Rs. 3/- Per equity share of Rs. 2/- each) for the year ended
March 31, 2013 amounting to Rs. 1199.85 lacs in aggregate as compared
to 150 per cent i.e. Rs. 3.00 per share in the corresponding last year.
Dividend will be tax free in the hands of shareholders, as the Company
will bear the dividend distribution tax of Rs. 203.91 lacs (Previous
year Rs.194.64 lacs). The dividend, if approved, at the Annual General
Meeting shall be payable to the shareholders registered in the books of
the Company and the beneficial owners whose names are furnished by the
depositories, determined with reference to the book closure from July
20, 2013 to August 09, 2013 (both days inclusive).
DIRECTORS
Mr. Pankaj Munjal, Mr. Surinder Kumar Mehta and Mr. Anil Kumar Vadehra,
the directors of the Company are liable to retire by rotation from the
Board at the ensuing Annual General Meeting. Mr. Pankaj Munjal, Mr.
Surinder Kumar Mehta and Mr. Anil Kumar Vadehra being eligible have
offered themselves for re-appointment.
Mr. Tetsuo Terada- executive director has resigned from the post of
director w.e.f. April 24, 2013. The Board places on record their
appreciation for the valuable services rendered by Mr. Tetsuo Terada
during his tenure as Director of the Company.
Mr. Isao Ito has been appointed as an additional director under Section
260 of the Companies Act, 1956 read with Article 89 of the Articles of
Association of the Company w.e.f May 24, 2013. He shall hold office of
director up to the date of ensuing Annual General Meeting. A notice
under Section 257 of the Companies Act, 1956, proposing his candidature
as Director at the ensuing Annual General Meeting of the Company, has
been received.
Brief resumes of Mr. Pankaj Munjal, Mr. Surinder Kumar Mehta, Mr. Anil
Kumar Vadehra and Mr. Isao Ito have been appended to the Notice of the
Annual General Meeting.
Your directors recommend their appointment/ re-appointment at the
ensuing Annual General Meeting.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report along with Certificate of the Auditors of your Company pursuant
to clause 49 of the Listing Agreement with the Stock Exchanges, have
been included in this Report as Annexure-A. Your Company has been
practicing the principles of good Corporate Governance over the years.
In terms of sub-clause (v) of Clause 49 of the Listing Agreement,
Certificate of CEO/CFO, inter alia, confirming the correctness of the
financial statements, adequacy of internal control measures and
reporting of matters to the Audit Committee in terms of the said
Clause, is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed
by all the Directors and members of Senior Management of your Company.
The Board of Directors support the broad principles of Corporate
Governance. In addition to the basic governance issues, the Board also
lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co.LLP, Chartered Accountants, Gurgaon, the
Auditors of the Company (M/s S. R. Batliboi & Co. constitution changed
to M/s. S. R. Batliboi & Co. LLP) retire at the conclusion of the
forthcoming Annual General Meeting, and being eligible, offer
themselves for re-appointment. The Company has also received
certificate from the auditors to the effect that their re-appointment,
if made, would be in accordance with Section 224(1B) of the Companies
Act, 1956.
The Board recommends their re-appointment.
AUDITORS REPORT
The observations of the Auditors in their report read with the notes to
accounts are self-explanatory and do not require any specific comments.
However as pointed out by the Auditors in annexure to their report at
point number (ix) (a), the slight delay in payment of undisputed
statutory dues in few cases was on account of finalization of accounts
beyond the due date of statutory dues.
COST AUDITORS
M/s. Ramanath Iyer & Co., Cost Accountants, New Delhi, the Cost
Auditors of the Company retire at the conclusion of the forthcoming
Annual General Meeting, and being eligible, offer themselves for
re-appointment. The Company has also received certificate from the
auditors to the effect that their re-appointment, if made, would be in
accordance with Section 233(B) of the Companies Act, 1956.
The Board recommends their re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
In compliance with Section 217(2AA) of the Companies Act, 1956, the
Directors confirm:
a) that the applicable accounting standards have been followed in the
preparation of annual accounts and that there are no material
departures;
b) that such accounting policies have been selected and applied
consistently and the judgments and estimates made are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March'' 2013 and of the profit of the Company for
the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) that the annual accounts have been prepared on a going concern
basis;
AUDIT COMMITTEE RECOMMENDATION
During the year there was no such recommendation of the Audit Committee
which was not accepted by the Board. Hence, there is no need for the
disclosure of the same in this Report.
FIXED DEPOSIT
The Company has not accepted any Fixed Deposits during the year under
Section 58A or 58AA of the Companies Act, 1956 and the rules made
there-under, and as such no amount on account of principal or interest
on public deposits was outstanding on the date of the Balance Sheet.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH &
DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 regarding Conservation of
Energy, Technology Absorption and R & D and Foreign Exchange earnings &
outgo are given in Annexure-B which forms part of Directors'' Report.
ENVIRONMENT COMPLIANCE
As India''s economy continues to accelerate, the performance of both the
environmental regulations and the regulator has come under increased
national and international scrutiny and pressure. The increasing public
demand for better performance by the environmental regulatory agencies
is matched by adequate support to these agencies, conditioned on
institutional reforms to increase efficiency, transparency and
accountability; it would be unfair to expect substantial progress from
the corporate and also unfair to solely blame the regulator for the
lack of it. We must induct some concern and commitment in our profiting
from Clean and Green Development Mechanism to ensure compliance of
pollution standards.
We have started believing "waste is a precious resource kept in a wrong
place". We further believe that "there is no waste as per the law of
the nature". Hence from the solid waste like Iron & Steel from old
scrap machines, we are collecting the raw material and we are
manufacturing "Lean and Low cost" machines with a philosophy of "Easy
to run, Easy to maintain, Easy to clean and Zero accident by meeting
all the quality and productivity standard. Everything is done in house
starting from design up to finishing of the machine. This concept of
reuse of metallic waste is highly appreciated by CII, ACMA and
international experts of our Japanese Collaborator.
By Regular training for workers and staff to prevent accident related
to mechanical, electrical, chemical, physiological and psychological
safety the Company has made "Zero incidents" as acceptable standard.
Hazard Identification and Risk Assessment (HIRA) is our primary focus
to mitigate and prevent the abnormalities. Because of our dedicated and
committed efforts in continual improvement of Safety, Health and
Environment area, this year we have received two national awards from
Ministry Of Labour and Employment for safety. The Company is a regular
member of Haryana Environment Management Society.
The Company has started Green Vendor Development Programme (GVDP) in
2009-10. The aim of the project is to conserve water and Energy,
Minimize generation of waste, terminate hazardous chemicals with non-
hazardous chemicals, minimize carbon foot print, generate pollution
prevention awareness throughout the plant and to achieve 100 per cent
legal compliance. The Company is rigorously improving to create a
better place for our next generation.
ISO/TS 16949 ACCREDITATION
Your Company''s manufacturing facilities plants located at Gurgaon and
Manesar continue to maintain and uphold the prestigious ISO/TS
16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
Safety Assessment Series) certifications from reputed leading Indian
and International Certification Institutions. Company''s third plant
located at Haridwar has also got TS 16945. These certifications help in
continuous improvements, besides emphasis being laid on prevention of
defects, reduction of wastes and variation in supply chain management.
TPM
The Company has taken up the journey of Total Productive Maintenance
(TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
Japan and CII, TPM Club India. Major objectives of TPM are to increase
Productivity, to improve Quality, to reduce Costs, to ensure in time
Delivery, to increase Safety, to increase profitability, to build
Morale and to protect environment by formation of small cross
functional work groups (PQCDSME) and to improve overall Plant
efficiency. The other objectives are to procure and install maintenance
free plant and machinery; and to achieve zero defects, zero break down,
zero losses and zero accidents. In nutshell, TPM converts all the
losses into Profit.
We have achieved Japan Institute of Plant Maintenance TPM Excellency
Award "category A" for Gurgaon as well as our Manesar Plants in the
year 2008 & 2010 respectively. We are working towards challenging the
next level which is consistency level by the end of 2013. The Company
had made the TPM declaration for our Haridwar Plant on 23rd March 2011.
Munjal Showa is helping some of our Vendors in doing TPM in their
Organizations.
To share the TPM & Lean achievements we receive many delegations not
only from India rather from all over the World, Countries like USA,
Germany, UK, Japan, Thailand, Brazil, Indonesia, Vietnam, China, etc.
Besides that we receive lots of Delegations from CII, (all the regions)
ACMA, Honda cluster club, IMTMA, etc.)
Lean Activities:
We have clubbed TPM with lean manufacturing system. Our Company has
conducted Lean Manufacturing System (Value Stream Mapping) Work Shop.
We have converted lots of huge & complicated machines to Lean Machines
& manufactured Lean machines in house. We receive many visitors not
only from India but also from all over the World to see our TPM & Lean
machine manufacturing activity. Munjal Showa is taking a lead role in
spreading this concept of Lean Machines across the Country thru CII,
ACMA, IMTMA, MSIL, HMCL, Honda Siel Club, etc.
In the recent past, we were able to re-build many very big & very
complicated machines into very simple & Lean machines, which have many
advantages besides the space saving. We have manufactured many new
machines by using the TPM, Lean & Low cost Automation concepts. And the
Journey is still on.
LISTING
The shares of your Company are listed at National Stock Exchange of
India Limited and Bombay Stock Exchange Limited, and pursuant to Clause
38 of the Listing Agreement, the Annual Listing fees for the year
2012-2013 have been paid to them well before the due date i.e. April
30, 2013. The Company has also paid the annual custodian fees for the
year 2013-14 in respect of Shares held in dematerialized mode to NSDL &
CDSL.
PARTICULARS OF EMPLOYEES
A statement under sub-section (2A) of Section 217 of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, forming part of this Directors'' Report is given in Annexure-C.
HUMAN RESOURCES
Your Company believes that employees form the fulcrum of growth and
differentiation for the organization. The Company recognizes that
people are its principal assets and that to continued growth is
dependent upon the Company''s ability to attract and retain quality
people. The total headcounts were 3292 at the end of the year as
compared to 3494 of the previous year. The Company encourages long-term
commitment to the Company by rewarding its people for the opportunities
they create and the value generated for customers and shareholders. The
Company conducts several training programmes to upgrade the skills of
the workforce.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation
and support extended to the Company by Government of India, State
Governments of Haryana and Uttrakhand, other local authorities,
bankers, suppliers, customers and other stakeholders whose continued
support has been a source of strength to the Company. The continued
dedication and sense of commitment shown by the employees at all levels
during the year deserve special mention.
The Directors also place on record their appreciation for the valuable
assistance and guidance extended to the Company by Showa Corporation,
Japan and for the encouragement and assurance, which our collaborator
has provided from time to time for the growth and development of the
Company.
The Directors also take this opportunity to express their deep
gratitude for the continued co-operation and support received from its
valued shareholders.
For and on behalf of the Board
Place: New Delhi BRIJMOHAN LALL MUNJAL
Dated: May 24, 2013 Chairman
Mar 31, 2012
The Directors have great pleasure in presenting the 27th Annual Report
together with the Audited Statement of Accounts for the financial year
ended March 31, 2012.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Company's Financial Results for the year
under review are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31.03.12 31.03.11
Sales and other Income 167568.49 139075.53
Profit before Interest,
Depreciation & Tax 12428.68 8332.17
Financial Cost 1115.92 914.01
Depreciation 2722.88 2624.67
Profit before Tax 8589.88 4793.49
Provision for Taxation 1876.99 1391.58
Profit after Tax 6712.89 3401.91
Net Profit brought forward 3590.03 2347.12
Profit available for appropriation 10302.92 5749.03
Dividend (Recommended) 1199.85 999.88
Dividend Tax (Net) 194.64 159.12
Transfer to General Reserve 2000.00 1000.00
Surplus carried to Balance Sheet 6908.43 3590.03
OPERATIONS
The Company has achieved a record sales turnover of Rs. 167568.49 lacs
registering a growth of 20.49 per cent vis-a-vis Rs. 139,075.53 lacs in
the previous year. The profit before tax in the current year was at Rs.
8,589.88 lacs as compared to Rs. 4,793.49 lacs in the previous year
registering a growth of 79.20 per cent.
FUTURE PROSPECTS
It has become clearer that Indian economy will not be able to achieve
its GDP growth forecast of 8% or thereabouts, it might have the
possibility to settle for a figure as estimated by IMF around 6.9 per
cent in 2012 and 7.3 per cent next year, as a result of weak demand and
higher interest rates, another flare-up of the euro- zone sovereign
debt crisis or sharp escalation in oil prices on geopolitical
uncertainty could easily undermine confidence and disrupt the improving
growth path for world economy. With the passing of the crisis and some
good news about the US economy, some optimism has returned.
As per Consumer Confidence Survey March 2012 conducted by Reserve Bank
of India households' perception about current economic conditions and
expectation for next one year has decreased in terms of net response;
however, more than half of the respondents continue to feel that the
current economic conditions and future prospects are favourable.
Majority of respondents perceive that household circumstances have
become better, though the proportion of respondents reporting worsening
of current household circumstances has increased as compared with the
previous round.
While the growth prospects of the Indian auto components industry
remain promising, there are new challenges as we evolve into a critical
part of the global auto ecosystem. For Indian suppliers, on one hand
there is the need to maintain competitiveness in an inflationary
environment and on the other they need to compete with the best in an
increasingly uncertain global market. The increase in petrol prices may
impact the sales of 4 Wheeler sales but subsequent proposal for
increase in duties of diesel vehicles & increase in diesel prices in
order to balance the fiscal deficit will neutralize the shift towards
diesel run vehicles. Further, OEMs internationally are reducing the
number of suppliers that they wish to work with. Thus, it calls for
Tier-1 suppliers to facilitate up-gradation and scaling up capacity,
quality, technology, people and even hand hold the Tier-II and Tier-III
suppliers, without which it will be really difficult to sustain the
industry's competitiveness in the long term.
Our existing customers have targeted to meet predetermined sales
targets with around 10 per cent growth, with the support of new models
likely to be launched both in 2 Wheeler and 4 Wheeler segment in the
coming year i.e.2012-13. In brief, all customers of the Company are on
growth path and Company is confident to meet their increased demand.
TRANSFER TO GENERAL RESERVE
The Board proposes to transfer an amount of Rs.2000.00 lacs to General
Reserve, having regard to the requirements of Section 205 (2A) of the
Companies Act, 1956. The balance amount of Rs. 6908.43 lacs (Previous
year Rs. 3,590.03 lacs) will be retained in the Profit and Loss
Account.
DIVIDEND
Your directors are pleased to recommend a dividend of 150 per cent
(i.e. Rs. 3/- Per equity share of Rs. 2/- each) for the year ended
March 31, 2012 amounting to Rs.1199.85 lacs in aggregate as compared to
125 per cent i.e. Rs. 2.50 per share in the corresponding last year.
Dividend will be tax free in the hands of shareholders, as the Company
will bear the dividend distribution tax of Rs. 194.64 lacs. The
dividend, if approved, at the Annual General Meeting shall be payable
to the shareholders registered in the books of the Company and the
beneficial owners whose names are furnished by the depositories,
determined with reference to the book closure from July 21, 2012 to
August 09, 2012 (both days inclusive).
DIRECTORS
Mr. Krishan Chand Sethi, Mr. Ashok Kumar Munjal and Mr. Vinod Kumar
Agrawal, the directors of the Company are liable to retire by rotation
from the Board at the ensuing Annual General Meeting. Mr. Krishan Chand
Sethi, Mr. Ashok Kumar Munjal and Mr. Vinod Kumar Agrawal being
eligible have offered themselves for re-appointment.
Mr. Akira Kadoya- non executive director has resigned from the post of
director w.e.f. May 23, 2012. The Board places on record their
appreciation for the valuable services rendered by Mr. Akira Kadoya
during his tenure as Director of the Company.
Mr. Katsuhiko Matsuura has been appointed as an additional director
under Section 260 of the Companies Act, 1956 read with Article 89 of
the Articles of Association of the Company w.e.f May 23, 2012. He shall
hold office of director up to the date of ensuing Annual General
Meeting. A notice under Section 257 of the Companies Act, 1956,
proposing his candidature as Director at the ensuing Annual General
Meeting of the Company, has been received.
Brief resumes of Mr. Krishan Chand Sethi, Mr. Ashok Kumar Munjal, Mr.
Vinod Kumar Agrawal and Mr. Katsuhiko Matsuura have been appended to
the Notice of the Annual General Meeting.
Your directors recommend their appointment/ re-appointment at the
ensuing Annual General Meeting.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report along with Certificate of the Auditors of your Company pursuant
to clause 49 of the Listing Agreement with the Stock Exchanges, have
been included in this Report as Annexure-A. Your Company has been
practicing the principles of good Corporate Governance over the years.
In terms of sub-clause (v) of Clause 49 of the Listing Agreement,
Certificate of CEO/CFO, inter alia, confirming the correctness of the
financial statements, adequacy of internal control measures and
reporting of matters to the Audit Committee in terms of the said
Clause, is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed
by all the Directors and members of Senior Management of your Company.
The Board of Directors support the broad principles of Corporate
Governance. In addition to the basic governance issues, the Board also
lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors
of the Company retire at the conclusion of the forthcoming Annual
General Meeting, and being eligible, offer themselves for
re-appointment. The Company has also received certificate from the
auditors to the effect that their re-appointment, if made, would be in
accordance with Section 224(1B) of the Companies Act, 1956.
The Board recommends their re-appointment.
AUDITORS REPORT
The observations of the Auditors in their report read with the notes to
accounts are self-explanatory and do not require any specific comments.
However as pointed out by the Auditors in annexure to their report at
point number (ix) (a), the slight delay in payment of undisputed
statutory dues in few cases was on account of finalization of accounts
beyond the due date.
COST AUDITORS
The Board on the basis of recommendation of Audit Committee and subject
to the approval of Central Government appointed M/s. Ramanath Iyer &
Co., Cost Accountants, New Delhi, as the Cost Auditors of the Company
under Section 233B of the Companies Act, 1956 for the financial year
2012-13 and the necessary application for obtaining the requisite
approval will be filed with the Central Government before due date.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance with Section 217(2AA) of the Companies Act, 1956, the
Directors confirm:
a) that the applicable accounting standards have been followed in the
preparation of annual accounts and that there are no material
departures;
b) that such accounting policies have been selected and applied
consistently and the judgments and estimates made are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March' 2012 and of the profit of the Company
for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) that the annual accounts have been prepared on a going concern
basis;
AUDIT COMMITTEE RECOMMENDATION
During the year there was no such recommendation of the Audit Committee
which was not accepted by the Board. Hence, there is no need for the
disclosure of the same in this Report.
FIXED DEPOSIT
The Company has not accepted any Fixed Deposits during the year under
Section 58A or 58AA of the Companies Act, 1956 and the rules made
there-under, and as such no amount on account of principal or interest
on public deposits was outstanding on the date of the Balance Sheet.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH &
DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 regarding Conservation of
Energy, Technology Absorption and R & D and Foreign Exchange earnings &
outgo are given in Annexure-B which forms part of Directors' Report.
ENVIRONMENT COMPLIANCE
As India's economy continues to accelerate, the performance of both
the environmental regulations and the regulator will come under
increased national and international scrutiny and pressure. The
increasing public demand for better performance by the environmental
regulatory agencies is matched by adequate support to these agencies,
conditioned on institutional reforms to increase efficiency,
transparency and accountability; it would be unfair to expect
substantial progress from the corporate and also unfair to solely blame
the regulator for the lack of it. We need to replicate climate change
initiatives on finance and technology for pollution abatement within
the country as this model has suggested. We must induct some concern
and commitment in our profiting from Clean Development Mechanism to
ensure compliance of pollution standards.
We have started believing "waste is a precious resource kept in a
wrong place". We further believe that "there is no waste as per the
law of the nature". Hence from the solid waste like Iron & Steel from
old scrap machines, we are collecting the raw material and we are
manufacturing "Lean and Low cost" machines with a philosophy of
"Easy to run, Easy to maintain, Easy to clean and Zero accident"
by meeting all the quality and productivity standard. Everything is
done in house starting from design up to finishing of the machine. This
concept of reuse of metallic waste is highly appreciated by CII, ACMA
and experts of our Japanese Collaborator.
By Regular training for workers and staff to prevent accident related
to mechanical, electrical, chemical, physiological and psychological
safety the Company has made "Zero incidents" as acceptable
standard.
The Company is a regular member of Haryana Environment Management
Society.
The Company has started Green Vendor Development Programme (GVDP) in
2009-10. The aim of the project is to conserve water and Energy,
Minimize generation of waste, terminate hazardous chemicals with non-
hazardous chemicals, minimize carbon foot print, generate pollution
prevention awareness throughout the plant and to achieve 100 per cent
legal compliance.
ISO/TS 16949 ACCREDITATION
Your Company's manufacturing facilities plants located at Gurgaon and
Manesar continue to maintain and uphold the prestigious ISO/TS
16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
Safety Assessment Series) certifications from reputed leading Indian
and International Certification Institutions. Company's third plant
located at Haridwar has also got TS 16945. These certifications help in
continuous improvements, besides emphasis being laid on prevention of
defects, reduction of wastes and variation in supply chain management.
TPM
The Company has taken up the journey of Total Productive Maintenance
(TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
Japan and CII, TPM Club India. Major objectives of TPM are to increase
Productivity, to improve Quality, to reduce Costs, to ensure in time
Delivery, to increase Safety, to increase profitability, to build Moral
and to protect environment by formation of small cross functional work
groups (PQCDSME) and to improve overall Plant efficiency. The other
objectives are to procure and install maintenance free plant and
machinery; and to achieve zero defects, zero break down, zero losses
and zero accidents. In nut shell TPM convert all the losses into
Profit.
We have achieved Japan Institute of Plant Maintenance TPM Excellency
Award "category A" for Gurgaon as well as our Manesar Plants in the
year 2008 & 2010 respectively. We are working towards challenging the
next level which is consistency level by the end of 2012. Top
Management has made the TPM declaration for our Haridwar Plant on 23rd
March 2011. Munjal Showa is helping some of our Vendors in doing TPM in
their Organizations.
To share the TPM & Lean achievements we receive many delegations not
only from India rather from all over the World Countries like USA,
Germany, UK, Japan, Thailand, Brazil, Indonesia, Vietnam, China, etc.
Besides that we receive lots of Delegations from CII, (all the regions)
ACMA, Honda cluster club, IMTMA, etc.)
Lean Activities:
We have clubbed TPM with lean manufacturing system. Our Company has
conducted Lean Manufacturing System (Value Stream Mapping) Work Shop.
We have converted lots of huge & complicated machines to Lean Machines
& manufactured Lean machines in house. We receive many visitors not
only from India but also from all over the World to see our TPM & Lean
machine manufacturing activity. Munjal Showa is taking a lead role in
spreading this concept of Lean Machines across the Country thru CII,
ACMA, IMTMA, MSIL, HMCL, Honda Siel Club, etc.
At present we were able to re-build many very big & very complicated
machines into very simple & Lean machines, which have many advantages
besides the space saving. We have manufactured many new machines by
using the TPM, Lean & Low cost Automation concepts. And the Journey is
still on.
LISTING
The shares of your Company are listed at National Stock Exchange of
India Limited and Bombay Stock Exchange Limited, and pursuant to Clause
38 of the Listing Agreement, the Annual Listing fees for the year
2012-2013 have been paid to them well before the due date i.e. April
30, 2012. The Company has also paid the annual custodian fees for the
year 2012-13 in respect of Shares held in dematerialized mode to NSDL &
CDSL.
PARTICULARS OF EMPLOYEES
A statement under sub-section (2A) of Section 217 of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, forming part of this Directors' Report is given in
Annexure-C.
HUMAN RESOURCES
Your Company believes that employees form the fulcrum of growth and
differentiation for the organization. The Company recognizes that
people are its principal assets and that to continued growth is
dependent upon the Company's ability to attract and retain quality
people. The total headcount increased to 3494 at the end of the year as
compared to 3477 of the previous year. The Company encourages long-term
commitment to the Company by rewarding its people for the opportunities
they create and the value generated for customers and shareholders. The
Company conducts several training programmes to upgrade the skills of
the workforce.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation
and support extended to the Company by Government of India, State
Governments of Haryana and Uttrakhand, other local authorities,
bankers, suppliers, customers and other stakeholders whose continued
support has been a source of strength to the Company. The continued
dedication and sense of commitment shown by the employees at all levels
during the year deserve special mention.
The Directors also place on record their appreciation for the valuable
assistance and guidance extended to the Company by Showa Corporation,
Japan and for the encouragement and assurance, which our collaborator
has provided from time to time for the growth and development of the
Company.
The Directors also take this opportunity to express their deep
gratitude for the continued co-operation and support received from its
valued shareholders.
For and on behalf of the Board
Place: New Delhi BRIJMOHAN LALL MUNJAL
Date: May 23, 2012 Chairman
Mar 31, 2011
The Directors have great pleasure in presenting the 26th Annual Report
together with the Audited Statement of Accounts for the financial year
ended March 31, 2011.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Companys Financial Results for the year
under review are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31.03.11 31.03.10
Sales and other Income 138924.02 108092.61
Profit before Depreciation & Tax 7420.04 6178.52
Depreciation 2424.67 2307.64
Profit before Tax 4795.37 3870.87
Provision for Taxation 1393.46 1409.87
Profit after Tax 3401.91 2461.00
Net Profit brought forward 2347.12 1821.96
Profit available for appropriation 5749.03 4282.96
Dividend (Recommended) 999.88 799.90
Dividend Tax (Net) 159.12 135.94
Transfer to General Reserve 1000.00 1000.00
Surplus carried to Balance Sheet 3590.03 2347.12
OPERATIONS
The Company has achieved a record sales turnover of Rs. 138,924.02 lacs
registering a growth of 28.52 percent vis-ÃÂ -vis Rs. 108,092.61lacs in
the previous year. The profit before tax in the current year was at Rs.
4,795.37 lacs as compared to Rs. 3,870.87 lacs in the previous year
registering a growth of 23.88 percent.
FUTURE PROSPECTS
Indias GDP is likely to grow at an estimated sustained annual average
rate of 8.40 percent over 2011-12 to 2015-16 and domestic demand -
spurred by a large, growing young population, rising middle-class
household consumption, and growing savings and investment rates - will
support economic growth over the next five years. A likely increase in
discretionary spending by Indias middle-class households will boost
demand for durables such as automobiles and white goods, and services
like hotels, restaurants and tourism.
Auto Component Industry is gathering speed as it has direct bearing to
automobile sector. Robust automobile sales should translate into strong
order inflows for auto component manufacturers. In the year 2010-11
Auto component Industry has registered encouraging results and growth,
which augur well for the year ahead. The company recorded an impressive
growth of 28.52 percent in value and 20.08 percent in volume.
Our existing customers have targeted to meet predetermined sales
targets with around 15 percent growth, with the support of new models
likely to be launched both in 2 Wheeler and 4 Wheeler segment in the
coming year i.e.2011-12. In brief, all customers of the Company are on
growth path and Company is confident to meet their increased demand.
TRANSFER TO GENERAL RESERVE
The Board proposes to transfer an amount of Rs. 1,000.00 lacs to
General Reserve, having regard to the requirements of section 205 (2A)
of the Companies Act, 1956. The balance amount of Rs. 3,590.03 lacs
(previous year Rs. 2,347.12 lacs) will be retained in the Profit and
Loss Account.
DIVIDEND
Your directors are pleased to recommend a higher dividend of 125 per
cent (i.e. Rs. 2.50 Per equity share of Rs. 2/- each) for the year
ended March 31, 2011 amounting to Rs. 999.88 lacs in aggregate as
compared to 100 percent i.e. Rs. 2 per share in the corresponding
year. Dividend will be tax free in the hands of shareholders, as the
Company will bear the dividend distribution tax of Rs. 162.20 lacs. The
dividend, if approved, at the Annual General Meeting shall be payable
to the shareholders registered in the books of the Company and the
beneficial owners whose names are furnished by the depositories,
determined with reference to the book closure from July 23, 2011 to
August 11, 2011 (both days inclusive).
DIRECTORS
Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja and Mr. Devi Singh, the
directors of the Company are liable to retire by rotation from the
Board at the ensuing Annual General Meeting. Mr. Brijmohan Lall Munjal,
Mr. Nand Lal Dhameja and Mr. Devi Singh being eligible have offered
themselves for re-appointment.
The present tenure of Mr. Yogesh Chander Munjal as Managing Director of
the Company expires on August 31, 2011 being eligible has offered
himself for re-appointment.
Brief resumes of Mr. Brijmohan Lall Munjal, Mr. Nand Lal Dhameja, Mr.
Devi Singh and Mr. Yogesh Chander Munjal have been appended to the
Notice of the Annual General Meeting.
Your directors recommend their appointment at the ensuing Annual
General Meeting.
CORPORATE GOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report along with Certificate of the Auditors of your Company pursuant
to clause 49 of the Listing Agreement with the Stock Exchanges, have
been included in this Report as Annexure-A. Your Company has been
practicing the principles of good Corporate Governance over the years.
In terms of sub-clause (v) of Clause 49 of the Listing Agreement,
Certificate of CEO/CFO, inter alia, confirming the correctness of the
financial statements, adequacy of internal control measures and
reporting of matters to the Audit Committee in terms of the said
Clause, is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed
by all the Directors and members of Senior Management of your Company.
The Board of Directors supports the broad principles of Corporate
Governance. In addition to the basic governance issues, the Board also
lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors
of the Company retire at the conclusion of the forthcoming Annual
General Meeting, and being eligible, offer themselves for re-
appointment. The Company has also received certificate from the
auditors to the effect that their re- appointment, if made, would be in
accordance with Section 224(1B) of the Companies Act, 1956.
The Board recommends their re-appointment.
AUDITORS REPORT
The observations of the Auditors in their report read with the notes to
accounts are self-explanatory and do not require any specific comments.
However as pointed out by the Auditors in annexure to their report at
point number (ix) (a), the slight delay in payment of undisputed
statutory dues in few cases was on account of finalization of accounts
beyond the payment due date.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with Section 217(2AA) of the Companies Act, 1956, the
Directors confirm:
a) that the applicable accounting standards have been followed in the
preparation of annual accounts and that there are no material
departures;
b) that such accounting policies have been selected and applied
consistently and the judgments and estimates made are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31st March 2011 and of the profit of the Company for
the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) that the annual accounts have been prepared on a going concern
basis;
AUDIT COMMITTEE RECOMENDATION
During the year there was no such recommendation of the Audit Committee
which was not accepted by the Board. Hence, there is no need for the
disclosure of the same in this Report.
FIXED DEPOSIT
The Company has not accepted any Fixed Deposits during the year under
Section 58A or 58AA of the Companies Act, 1956 and the rules made
there-under, and as such no amount on account of principal or interest
on public deposits was outstanding on the date of the Balance Sheet.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH &
DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 regarding Conservation of
Energy, Technology Absorption and R & D and Foreign Exchange earnings &
outgo are given in Annexure-B which forms part of Directors Report.
ENVIRONMENT COMPLIANCE
India is the seventh largest country in the world by geographical area.
While progress on the environmental front is being made, India still
faces some major challenges. Despite highly evolved environmental laws
and regulations in some areas, many environmental practices such as
regulation of air pollutants using a model seen in western countries
are still at a very rudimentary stage in India. Increased environmental
regulations will likely become a key area of concern in the near
future.
The increasing desire of Indian companies to meet world class standards
has caused established companies in India to take on sustainable
initiatives as a means of improving their global brand and reputation
and the environmental sector is expected to be at the forefront of
Indias evolving story in the coming years.
The Company has already considered the prerequisites of environment
compliance long way back and is doing new initiative every year. Some
of the major initiatives of regular basis are;
Slogan of the Company "One planet, one earth, one nature which
propagates "Save the earth for better tomorrowÃ.
By Regular training for workers and staff to prevent accident related
to mechanical, electrical, chemical, physiological and psychological
safety the Company has made "Zero incidentsà as acceptable standard.
The Company is a regular member of Haryana Environment Management
Society.
The Company has started Green Vendor Development Programme (GVDP) in
2009-10. The aim of the project is to conserve water and Energy,
Minimize generation of waste, terminate hazardous chemicals with
non-hazardous chemicals, minimize carbon foot print, generate pollution
prevention awareness throughout the plant and to achieve 100 percent
legal compliance.
In 2010-11 the Company has added special units to recover and recycle
chrome and thinner from the waste. Special Kaizen teams with specific
project made to conserve resources like energy, water and electricity.
More emphasis was given to utilize natural light and natural
ventilators.
ISO/TS 16949 ACCREDITATION
Your Companys manufacturing facilities plants located at Gurgaon and
Manesar continue to maintain and uphold the prestigious ISO/TS
16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
Safety Assessment Series) certifications from reputed leading Indian
and International Certification Institutions. Companys third plant
located at Haridwar has also got TS 16945. These certifications help in
continuous improvements, besides emphasis being laid on prevention of
defects, reduction of wastes and variation in supply chain management.
TPM
The Company has taken up the journey of Total Productive Maintenance
(TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
Japan and CII, India. Major objectives of TPM are to increase
Productivity, to improve Quality, to reduce Costs, to ensure Delivery
in time, to increase Safety, to increase profitability, to build Moral
and to protect environment by formation of cross functional work groups
(PQCDSME) and to improve overall effectiveness of equipment and
processes within their areas. The other objectives are to procure and
install maintenance free plant and machinery; and to achieve zero
defects, zero break down, zero losses and zero accidents. In nut shell
to convert all the losses into Profit.
We have already got the category A award for TPM Excellency for Gurgaon
Plant and will challenge the next level by the end of 2011. We have
challenged JIPM TPM Excellence Award in December 2009 for Manesar Plant
and were honored with TPM Excellence Award category A at Kyoto, Japan
on March 9, 2011. We are now going to challenge the next level of TPM
Excellence Award. For the same the TPM Kick - Off Ceremony for 2nd
stage was held on April 22, 2011. The Company has declared start of TPM
in Haridwar Plant on 23rd March 2011.We will challenge the TPM
Excellence Award in December 2013. For further excellence in the
industry the company is helping some of its vendors to start TPM
journey.
Lean Activities:
We are in the process of clubbing TPM with lean manufacturing system in
the near future. Our Company has conducted Lean Manufacturing System
(Value Stream Mapping) Work Shop in the month of July 2008. We have
converted lots of huge & complicated machines to Lean Machines &
manufactured Lean machines in house. We receive many visitors not only
from India but also from all over the World to see our TPM & Lean
machine manufacturing activity. Munjal Showa is taking a lead role in
spreading this concept of Lean Machines across the Country thru CII,
ACMA, IMTMA, MSIL, HHML, Honda Seil Club, etc.
LISTING
The shares of your Company are listed at National Stock Exchange of
India Limited and Bombay Stock Exchange Limited, and pursuant to Clause
38 of the Listing Agreement, the Annual Listing fees for the year
2011-2012 have been paid to them well before the due date i.e. April
30, 2011. The Company has also paid the annual custodian fees for the
year 2011-12 in respect of Shares held in dematerialized mode to NSDL &
CDSL.
PARTICULARS OF EMPLOYEES
A statement under sub-section (2A) of Section 217 of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, forming part of this Directors Report is given in Annexure-C.
HUMAN RESOURCES
Your Company believes that employees form the fulcrum of growth and
differentiation for the organization. The Company recognizes that
people are its principal assets and that its continued growth is
dependent upon the Companys ability to attract and retain quality
people. The total headcount increased to 3477 at the end of the year as
compared to 3012 of the previous year. The Company encourages long-term
commitment to the Company by rewarding its people for the opportunities
they create and the value generated for customers and shareholders. The
Company conducts several training programmes to upgrade the skills of
the workforce.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation
and support extended to the Company by Government of India, State
Governments of Haryana and Uttrakhand, other local authorities,
bankers, suppliers, customers and other stakeholders whose continued
support has been a source of strength to the Company. The continued
dedication and sense of commitment shown by the employees at all levels
during the year deserve special mention.
The Directors also place on record their appreciation for the valuable
assistance and guidance extended to the Company by Showa Corporation,
Japan and for the encouragement and assurance, which our collaborator
has provided from time to time for the growth and development of the
Company.
The Directors also take this opportunity to express their deep
gratitude for the continued co-operation and support received from its
valued shareholders.
For and on behalf of the Board
Place: New Delhi BRIJMOHAN LALL MUNJAL
Dated: May 20, 2011 Chairman
Mar 31, 2010
The Directors have great pleasure in presenting the 25th Annual Report
together with the Audited Statement of Accounts for the financial year
ended March 31,2010.
FINANCIAL RESULTS AND APPROPRIATIONS
The salient features of the Companys Financial Results for the year
under review are as follows:
(Rs. In Lacs)
Year Ended Year Ended
31.03.10 31.03.09
Sales and other Income 108092.61 95392.24
Profit before Depreciation & Tax 6178.52 4975.51
Depreciation 2307.64 1685.70
Profit before Tax 3870.88 3289.81
Provision for Taxation 1409.88 1221.24
Profit after Tax 2461.00 2068.58
Net Profit brought forward 1821.96 1689.23
Profit available for appropriation 4282.96 3757.81
Dividend (Recommended) 799.90 799.90
Dividend Tax 135.94 135.94
Transfer to General Reserve 1000.00 1000.00
Surplus carried to Balance Sheet 2347.12 1821.96
OPERATIONS
The Company has achieved a record sales turnover of Rs. 108,962.61 lacs
registering a growth of 14.23 per cent vis-a-vis Rs. 95,392.24 lacs in
the previous year. The profit before tax in the current year was at Rs.
3,870.87 lacs as compared to Rs. 3,289.81 lacs in the previous year
registering a growth of 17.66 per cent.
FUTURE PROSPECTS
Auto Component Industry is gathering speed as it has direct bearing to
Auto Companies. Robust automobile sales should translate into strong
order inflows for auto component manufacturers. In the year 2009-10
Auto component Industry has registered encouraging results and growth,
which augur well for the year ahead. The company recorded an impressive
growth of 19.15 per cent in value and 21.67 per cent in volume.
India has emerged as one of the favorite destinations of global auto
majors considering huge demand growth potential driven by substantially
low penetration. Entrance of new players into the small car market and
with new launches of cars, motor cycles and scooters by existing
players to capture the share of growing segment is indicator for
favorable growth of Auto Component Industry.
Our existing customers have targeted to meet predetermined sales
targets with around 20 per cent growth, with the support of new models
likely to be launched both in 2 Wheeler and 4 Wheeler segment in the
coming year i.e.2010-11. In brief, all customers of the Company are on
growth path and Company is confident to meet their increased demand.
TRANSFER TO GENERAL RESERVE
The Board proposes to transfer an amount of Rs.1,000.00 lacs to General
Reserve, having regard to the requirements of section 205 (2A) of the
Companies Act, 1956. The balance amount of Rs.2,347.12 lacs (previous
year Rs.1,821.96 lacs) will be retained in the Profit and Loss Account.
DIVIDEND
Your directors are pleased to recommend a dividend of 100 per cent
(i.e. Rs. 21- Per equity share of Rs. 21- each) for the year ended
March 31, 2010 amounting to Rs. 799.90 lacs in aggregate. Dividend will
be tax free in the hands of shareholders, as the Company will bear the
dividend distribution tax of Rs. 135.94 lacs. The dividend, if
approved, at the Annual General Meeting shall be payable to the
shareholders registered in the books of the Company and the beneficial
owners whose names are furnished by the depositories, determined with
reference to the book closure from July 24,2010 to August 11,2010 (both
days inclusive).
DIRECTORS
Mr. Pankaj Munjal, Mr. Anil Kumar Vadehra and Mr. Surinder Kumar Mehta,
the directors of the Company, liable to be retire by rotation from the
Board at the ensuing Annual General Meeting. Mr. Pankaj Munjal, Mr.
Anil Kumar Vadehra and Mr. Surinder Kumar Mehta being eligible have
offered themselves for re-appointment.
Mr. Akira kadoya and Mr. Tetsuo Terada have been appointed additional
directors under section 260 of the Companies Act, 1956 read with
Article 89 of the Articles of Association of the Company.
Brief resumes of Mr. Pankaj Munjal, Mr. Anil Kumar Vadehra, Mr.
Surinder Kumar Mehta, Mr. Akira kadoya and Mr. Tetsuo Terada have been
appended to the Notice of the Annual General Meeting.
Your directors recommend their appointment at the ensuing Annual
General Meeting,
CORPORATEGOVERNANCE
Report on Corporate Governance and Management Discussion & Analysis
Report along with Certificate of the Auditors of your Company pursuant
to clause 49 of the Listing Agreement with the Stock Exchanges, have
been included in this Report as Annexure-A. Your Company has been
practicing the principles of good Corporate Governance over the years.
In terms of sub-clause (v) of Clause 49 of the Listing Agreement,
Certificate of CEO/CFO, inter alia, confirming the correctness of the
financial statements, adequacy of internal control measures and
reporting of matters to the Audit Committee in terms of the said
Clause, is also enclosed as a part of the Report.
The Board of Directors has laid down a Code of Conduct to be followed
by all the Directors and members of Senior Management of your Company.
The Board of Directors supports the broad principles of Corporate
Governance. In addition to the basic governance issues, the Board also
lays strong emphasis on transparency, accountability and integrity.
AUDITORS
M/s S.R. Batliboi & Co., Chartered Accountants, Gurgaon, the Auditors
of the Company retire at the conclusion of the forthcoming Annual
General Meeting, and being eligible, offer themselves for
re-appointment. The company has received copy of valid certificate
issued by the Peer Review Board of the Institute of Chartered
Accountants of India from the Auditors. The Company has also received
certificate from the auditors to the effect that their re-appointment,
if made, would be in accordance with Section 224(1 B) of the Companies
Act, 1956.
The Board recommends their re-appointment.
AUDITORS REPORT
The observations of the Auditors in their report read with the notes to
accounts are self-explanatory and do not require any specific comments.
However, as pointed out by the Auditors in annexure to their report at
point number (ix) (a), the delay was on account of finalisation of
accounts beyond the due date of depositing the tax.
DIRECTORSRESPONSIBILITY STATEMENT
lncompliancewithSection217(2AA)oftheCompaniesAct, 1956, the Directors
confirm: a) that the applicable accounting standards have been followed
in the preparation of annual accounts and that there are no material
departures;
b) that such accounting policies have been selected and applied
consistently and the judgments and estimates made are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at 31 st March2010 and of the profit of the Company
forthe year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) that the annual accounts have been prepared on a going concern
basis;
AUDIT COMMITTEE RECOMMENDATION
During the year there was no such recommendation of the Audit Committee
which was not accepted by the Board. Hence, there is no need forthe
disclosure of the same in this Report.
RATINGS
The rating agency CRISIL Limited has reviewed and reaffirmed the
AA/stable for Companys long term loans & cash credit loans and P1 + to
its Letter of Credit limits, Bank guarantees limits & Commercial Paper.
FIXED DEPOSIT
The Company has not accepted any Fixed Deposits during the year under
Section 58Aor 58AAof the Companies Act, 1956 and the rules made
there-under, and as such no amount on account of principal or interest
on public deposits was outstanding on the date of the Balance Sheet.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND RESEARCH &
DEVELOPMENT AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pursuant to Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 regarding Conservation of
Energy, Technology Absorption and R&D and Foreign Exchange earnings &
outgo are given in Annexure-B which forms part of DirectorsReport:
ENVIRONMENT COMPLIANCE
"One planet, one earth, one nature" is the slogan of the Company which
propagates "Save the earth for a better tomorrow".
Safety and environment performance is integral to the business
performance of the Company and received continued focus throughout the
year. Zero accidents is acceptable standard of safety performance
which was achieved during the financial year 2009-10. Now, to put more
focus on safety, we have made Zero incidents as our acceptable
standard. The Company regularly organizes training for staff and
workers to prevent incidents related to mechanical, electrical,
chemical, physiological and psychological safety.
For all manufacturing facilities/which require environmental consents
such as air, water and hazardous waste, proper authorizations from
respective Pollution Control Boards have been obtained and are in
compliance with the present Environmental Legislation. The Company
initiated many programmes to improve the health and safety of employees
by way of Internal Environment Management Programmes. These initiatives
and the improvements are monitored and reviewed through structured
audits and management reviews.
The Company is a member of Haryana Environment Management Society.
Government of Haryana has identified and notified a site in District
Faridabad for use of disposal facility for hazardous waste.
The Company believes waste is a precious resource kept in a wrong
place. We have started collection of all kind of waste paper and giving
it to authorized agency, who is recycling and reusing it. By doing this
activity we are able to save around four to five trees per month.
Company believes there is no waste as per the "law of nature".
Manufacturing of machines from old or scrapped machine is a unique
initiative by our Company. A lot of machines were overhauled and
rebuilt by incorporating all the best practices in the world like lean
manufacturing, easy to clean, easy to maintain, zero accident, zero
defect, zero breakdown, cockpit concept etc. Experts from overseas
plant of Japan, China, Indonesia, Thailand, Vietnam and Brazil
including CM delegates are the regular visitors to our plants and
understand the cost effectiveness of new technology.
The Company has started a new project for improvement in its
performance in environment management. The project is specifically
designed and named as Green Vendor Development Programme (GVDP). As a
part of the project, six pillars named as Water, Energy, Waste,
Chemical Substitution, Pollution Prevention and Legal Compliances have
been constituted.
Basic objectives of GVDP are;
100 per cent compliance of legal requirements
To conserve Water and Energy through process mapping
To minimize generation of Waste including hazardous waste and
effectuate 3R principles i.e. Reduce,
Recycle and Reuse.
- To terminate hazardous chemicals with less hazardous or non-hazardous
chemicals. To understand and minimize carbon foot print.
- To generate pollution prevention awareness throughout the plant and
to control & monitor all the pollution control devices to operate at
optimum level within the Company and amongst the suppliers also.
ISO/TS16949 ACCREDITATION
Your Companys manufacturing facilities at both the plants at Gurgaon
and Manesar continue to maintain and uphold the prestigious ISO/TS
16949:2009, ISO 14001:2004 and OHSAS 18001: 2007 (Occupational Health &
Safety Assessment Series) certifications from reputed leading Indian
and International Certification Institutions. These certifications
help in continuous improvements, besides emphasis being laid on
prevention of defects, reduction of wastes and variation in supply
chain management. For the new facility at Haridwar, the Company will be
able to take the certification by the end of this financial year i.e.
March, 2011.
TPM
The Company has taken up the journey of Total Productive Maintenance
(TPM) with the help of JIPM (Japan Institute of Plant Maintenance)
Japan and Oil, India. Major objectives of TPM are to increase
Productivity, to improve Quality, to reduce Costs, to ensure Delivery
in time, to increase Safety, to increase profitability, to build Moral
by formation of cross functional work groups (PQCDSM) and to improve
overall effectiveness of equipment and processes within their areas.
The other objectives are to procure and install maintenance free plant
and machinery; and to achieve zero defects, zero break down, zero
losses and zero accidents. In nut shell convert all the losses into
Profit.
a) Gurgaon Plant:
We have challenged the TPM excellence award with JIPM Japan and were
honored with TPM Excellence Award category Aat Kyoto on 12"1 March
2009. We are now going to challenge the next level of TPM Excellence
Award by end of 2011. For the same the TPM Kick - Off Ceremony for 2nd
stage was held on 23rt of April 2009.
b) Manesar Plant:
For Manesar Plant we have challenged the TPM Excellence Award &
successfully cleared the health check - up Audit on 21" December 2009 &
will clear the final Audit by end of December 2010.
Lean Activities:
We are in the process of clubbing TPM with lean manufacturing system in
the near future. Our Company has conducted Lean Manufacturing System
(Value Stream Mapping) Work Shop in the month of July 2008. We have
converted lots of huge & complicated machines to Lean Machines &
manufactured Lean machines in house. We receive many visitors not only
from India and from all over the World to see our TPM & Lean machine
manufacturing activity.
LISTING
The shares of your Company are listed at National Stock Exchange of
India Limited and Bombay Stock Exchange Limited, and pursuant to Clause
38 of the Listing Agreement, the Annual Listing fees for the year
2010-2011 have been paid to them well before the due date i.e. April
30,2010. The Company has also paid the annual custodian fees for the
year 2010-11 in respect of Shares held in dematerialized mode to NSDL &
CDSL.
PARTICULARS OF EMPLOYEES
A statement under sub-section (2A) of Section 217 of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended, forming part of this Directors Report is given in Annexure-C.
HUMAN RESOURCES
Your Company believes that employees form the fulcrum of growth and
differentiation for the organization. The Company recognizes that
people are its principal assets and that its continued growth is
dependent upon the Companys ability to attract and retain quality
people. The total headcount increased to 3012 at the end of the year as
compared to 2343 of the previous year. The Company encourages long-term
commitment to the Company by rewarding its people for the opportunities
they create and the value generated for customers and shareholders.
The Company conducts several training programmes to upgrade the skills
of the workforce.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation of the co-operation
and support extended to the Company by Government of India, State
Governments of Haryana and Uttrakhand, other local authorities,
bankers, suppliers, customers and other stakeholders whose continued
support has been a source of strength to the Company. The continued
dedication and sense of commitment shown by the employees at all levels
during the year deserve special mention.
The Directors also place on record their appreciation for the valuable
assistance and guidance extended to the Company by Showa Corporation,
Japan and for the encouragement and assurance, which our collaborator
has provided from time to time for the growth and development of the
Company.
The Directors also take this opportunity to express their deep
gratitude for the continued co-operation and support received from its
valued shareholders.
For and on behalf of the Board
Place: New Delhi Brijmohan Lall Munjal
Dated: May 18,2010 Chairman
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