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Directors Report of SML Mahindra Ltd.
Mar 31, 2025
The Directors are pleased to present their Forty-first Annual Report together with audited financial statements for the
financial year ended 31st March 2025.
PERFORMANCE REVIEW
During FY 2024-25, the Indian economy recorded GDP growth of 6.5% supported by increased private consumption
expenditure and a rebound in exports. The growth was largely driven by service sector with sub-sectors like financial
services, IT, public administration and trade. Furthermore, the industrial sector, particularly construction, saw a
significant boost. However, the growth rate during the year under review was lower as compared to previous yearâs 8.2%
with reduced growth in Government expenditure and moderation in capital formation.
During the year under review, the domestic CV industry witnessed a marginal decline of 1.2%, with volumes of 956,671.
Sale of Light Commercial Vehicles (LCVs) contracted by 2.0%, with volumes at 582,852, and Medium & Heavy
Commercial Vehicles (M&HCVs) recorded a slight dip of 0.1%, with volumes at 373,819. The export of commercial
vehicles has witnessed a robust growth of 23.0%, with volumes at 80,986.
Against the above backdrop, sales volume of your Company for FY 2024-25 witnessed a growth of 3.1% to reach
14,221 vehicles against 13,797 vehicles sold during FY 2023-24.
The demand for commercial vehicles during the year under review witnessed mixed response. While the bus segment
grew due to increased passenger mobility and steady demand from school & staff segment, the truck segment recorded
a decline because of high base effect, weak freight economics and adverse impact of General Elections on infrastructure
activities in first half of the year.
With higher volumes and softer commodity prices, the Companyâs financial performance improved significantly, and
Your Company posted its highest ever Profit after tax of Rs. 121.67 crores for FY 2024-25.
Financial highlights are given below::
|
Year ended 31st March |
2025 |
2024 |
|
14,221 |
13,797 |
|
|
Sale of Products (Net) and Other Operating Revenues |
2,398.99 |
2,195.93 |
|
Profit before Other Income, Depreciation, Finance Costs and Tax |
234.55 |
178.91 |
|
Add: Other income |
6.06 |
5.41 |
|
Profit before Depreciation, Finance Costs and Tax |
240.61 |
184.32 |
|
Less: Depreciation and Amortization |
48.35 |
47.52 |
|
Profit before Finance Costs and Tax |
192.26 |
136.80 |
|
Less: Finance Costs |
29.88 |
30.35 |
|
Profit before tax |
162.38 |
106.45 |
|
Less: Tax (including deferred tax) |
40.71 |
(1.43) |
|
Profit after tax |
121.67 |
107.88 |
|
Add: Other Comprehensive Income / (Loss) [net of tax] |
(1.44) |
(0.24) |
|
Total comprehensive income for the year |
120.23 |
107.64 |
DIVIDEND
Keeping in view the improved financial performance of the Company during FY 2024-25, the Directors have
recommended Final Dividend of 180% (Rs. 18/- per equity share of Rs.10 each fully paid up) for financial year ended on
31st March 2025. The cash outflow on this account will be Rs. 26.05 crores.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, as
amended, the Board has approved and adopted a Dividend Distribution Policy, effective from 1st April, 2021.The policy
is available on the Companyâs website at:
https://smlisuzu.com/IN/investors/policies/corporate-policies
DIVESTMENT BY PROMOTER / SIGNIFICANT PUBLIC SHAREHOLDER
As the Members may be aware, subsequent to the year end, Sumitomo Corporation, Japan, promoter of the Company
and Isuzu Motors Limited, Japan, a public shareholder on 26th April, 2025 entered into a Share Purchase Agreements
(âSPAsâ) with Mahindra & Mahindra Limited (M&M), a public listed entity, to sell their respective equity stake in the
Company.
Pursuant to the aforesaid SPAs, M&M, on 1st August 2025, has completed the acquisition of (a) 63,62,306 equity shares
constituting 43.96% of the equity share capital of the Company from Sumitomo Corporation and (b) 21,70,747 equity
shares constituting 15.00% of the equity share capital of the Company from Isuzu Motors collectively aggregating to
85,33,053 equity shares constituting 58.96% of the existing share capital of the Company. Accordingly, M&M has
acquired sole control of the Company and has been classified as a âPromoterâ of the Company w.e.f. 1st August, 2025.
Further, in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended,
M&M has announced an open offer for acquisition of up to 26.0% of the equity share capital of the Company, for cash
consideration, from the eligible public shareholders of your Company.
Members may also note that consequent to the aforesaid transaction, your Company is now a subsidiary of
M&M Limited w.e.f. 1st August, 2025.
Your Directors believe that the acquisition of this majority stake by M&M will usher in a new era of growth, innovation and
progress for all the stakeholders of your Company.
Consequently, with the change in control due to this acquisition, the Board of your Company has been reconstituted,
which is provided separately in the Board Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis, which also covers the state of the Company''s affairs, forms a part of this report.
CORPORATE GOVERNANCE
A report on corporate governance together with the Certificate from M/s. A. Arora & Co., a proprietorship Company
Secretaries firm, confirming compliance with corporate governance norms as stipulated under the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015, forms a part of this report.
INDUSTRIAL RELATIONS
Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and
engagement with workforce through various forums.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate a strong commitment to safety, health and environment which have been
adopted as core organizational values. The Company ensures safety and audits its facilities in accordance with statutory
and regulatory requirements. The Directors review these areas periodically through reports and presentations made at
the Board Meetings.
The Company actively engages employees in SHE (Safety, Health & Environment) initiatives. Employees are
continuously made aware of hazards / risks associated with their job, and their knowledge and skills are updated through
requisite training, toolbox talks, safety drills to meet any emergency. Medical check-ups and eco-friendly activities are
conducted periodically. Regular safety trainings are being conducted to promote awareness among all employees and
stakeholders. Safe disposal of hazardous waste is ensured through recyclers / co-processors of hazardous waste.
Effluent treatment plant and online monitoring systems have been installed for the treatment of trade & domestic
effluents and the usage of treated water for other processes like green belt maintenance.
The Company has comprehensive emergency response plans, and regular drills are being conducted to ensure
maintenance and check its emergency preparedness. Periodic safety audits are conducted to identify and mitigate
potential risks.
The Company upholds ISO 9001:2015 (Quality Management System), IATF 16949:2016 (Automotive Quality
Management System), ISO 27001:2022 (Information Security Management System), ISO 14001:2015 (Environmental
Management System), ISO 45001:2018 (Occupational Health & Safety Management System) and ISO 50001:2018
(Energy Management System) certifications.
CURRENT BUSINESS ENVIRONMENT
During Q1 FY 2025-26, the domestic industry witnessed a marginal decline of 0.6%, with total volumes at 223,215
vehicles compared to 224,575 in the same period last year. The passenger carrier segment recorded a growth of 7.7%,
driven by sustained demand from schools and staff segment, increased intercity travel, and fresh government bus
tenders. In contrast, the M&HCV truck segment registered a decline of 4.5%, primarily due to moderating freight
movement, delayed infrastructure execution, and the impact of a high base effect. The LCV truck segment remained
largely stable, posting a slight de-growth of 0.6%, reflecting stabilized replacement demand and softer rural freight
activity. Exports delivered a notable performance with 23.4 % increase.
During Q1 FY 2025-26, your Companyâs sales volume increased by 12.5% (from 4379 in Q1 2024-25 to 4926 in
Q1 FY 2025-26). The Companyâs turnover for the first quarter was Rs. 845.9 crores and Profit before tax (PBT)
was Rs. 89.6 crores against Q1 FY 2024-25 turnover of Rs. 746.0 crores and PBT of Rs. 62.0 crores.
Current scenario and outlook for CV industry are discussed in detail in the Management Discussion and Analysis, which
forms part of this report.
DIRECTORS
During the financial year under review, the following changes took place in the board composition.
The Board at its Meeting held on 15th March, 2024, took note of the resignations of Mr. Masaki Morohoshi and
Mr. Takuro Horikoshi, Non-Executive Non-Independent Directors, w.e.f. 31st March, 2024 and placed on record its deep
appreciation for their valuable contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, appointed Mr. Ryusuke Miyake and
Mr. Takahiro Jitosho as Additional Directors of the Company w.e.f. 1st April, 2024, and their appointments were
subsequently approved by the Members of the Company through a Postal Ballot on 23rd May, 2024.
The Board at its Meeting held on 2nd August, 2024, took note of the resignation of Mr. Takashi Nishida, Non-Executive
Non-Independent Director, w.e.f. 8th August, 2024 and placed on record its deep appreciation for his valuable
contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, appointed Mr. Tomoyuki Yamaguchi
as an Additional Director of the Company w.e.f. 9th August, 2024, and his appointment was subsequently approved by
the Members of the Company at 40th AGM of the Company held on 20th September, 2024.
The tenure of Mr. S.K. Tuteja, Independent Director and Chairman, was up to 21st September, 2024. The Board, at its
Meeting held on 2nd August, 2024, placed on record its deep appreciation for his strong and inspirational leadership as
Independent Director and Chairman, during his long association with the Company.
The tenure of Mr. Sudhir Nayar, Independent Director, was up to 21st September, 2024. The Board, at its Meeting held
on 2nd August, 2024, placed on record its deep appreciation for his valuable contributions as Independent Director,
during his long association with the Company.
Mr. C.S. Verma, Independent Director of the Company, was re-appointed for a second term of five (5) consecutive years
w.e.f. 22nd September, 2024. Further, the Board appointed Mr. C.S. Verma as Chairman of the Company w.e.f.
22nd September, 2024 in place Mr. Tuteja.
Mr. Sanjeev Mehan was appointed as an Independent Director of the Company for a term of five (5) consecutive years
w.e.f. 22nd September, 2024.
Further, as explained earlier in the Report, as per the terms of Share Purchase Agreements (SPAs) executed between
erstwhile Promoter - Sumitomo Corporation (Sumitomo) and erstwhile Public Shareholder - Isuzu Motors Limited
(Isuzu) with Mahindra & Mahindra Limited (M&M), representative Directors of Sumitomo and Isuzu have resigned from
the directorship of the Company w.e.f. 1st August, 2025. Besides this, consequent to the change in control of the
Company, Ms. Atima Khanna and Mr. Sanjeev Mehan, Independent Directors of the Company, have also tendered their
resignations w.e.f. 1st August, 2025.
The Board, at its meeting held on 1st August 2025, placed on record its deep appreciation for the valuable contributions
made to the Company by the outgoing Directors from Sumitomo - Mr. Ryusuke Miyake, Mr. Takahiro Jitosho,
Mr. Takashi Sakuma, and Mr. Yasushi Nishikawa; the Director from Isuzu - Mr. Tomoyuki Yamaguchi; and the
Independent Directors - Ms. Atima Khanna and Mr. Sanjeev Mehan.
The Board, based on the recommendations of its Nomination & Remuneration Committee, at its Meeting held on
1st August, 2025, also considered and approved w.e.f. 1st August, 2025, the appointment of two (2) Whole-time
Directors, one (1) Non-Executive Non-Independent Director and three (3) Independent Directors as detailed below:
a) Appointment of Mr. Vinod Kumar Sahay as an Additional Director w.e.f 1st August, 2025, to hold office up to the date of
the next Annual General Meeting of the Company and, thereafter, subject to the approval of the Members of the
Company, as Whole-time Director of the Company designated as âExecutive Directorâ, not liable to retire by rotation, for
a term of three (3) consecutive years from 1st August, 2025 to 31st July, 2028 (both days inclusive). Further, the Board,
at its meeting held on 2nd August, 2025, has appointed him as Chairman of the Company in place of
Mr. C.S. Verma and, accordingly, re-designated him as Executive Chairman w.e.f. 3rd August, 2025.
b) Appointment of Dr. Venkataraman Srinivas as an Additional Director w.e.f 1st August, 2025, to hold office up to the
date of the next Annual General Meeting of the Company and, thereafter, subject to the approval of the Members of the
Company, as Whole-time Director of the Company designated as âExecutive Director and Chief Executive Officerâ,
liable to retire by rotation, for a term of three (3) consecutive years from 1st August, 2025 to 31st July, 2028 (both days
inclusive).
c) Appointment of Ms. Mahima Chugh as an Additional Director w.e.f. 1st August, 2025, to hold office up to the date of the
next Annual General Meeting of the Company and, thereafter, subject to the approval of the Members of the Company,
as Non-Executive Non-Independent Director of the Company, liable to retire by rotation.
d) Appointment of Mr. Ravi Venkatraman, Mr. Arun Kumar Malhotra and Ms. Smita Mankad as an Additional Directors
w.e.f. 1st August, 2025, to hold office up to the date of the next Annual General Meeting of the Company and, thereafter,
subject to the approval of the Members of the Company, as Independent Directors of the Company, not liable to retire by
rotation, for a term of three (3) consecutive years from 1st August, 2025 to 31st July, 2028 (both days inclusive).
Details of the Additional Directors appointed by the Board are provided in the Notice convening the ensuing Annual
General Meeting of the Company, which forms a part of this Annual Report.
As the Board of your Company has been reconstituted w.e.f. 1st August 2025, there is no Director on the Board who is
liable to retire by rotation at the ensuing Annual General Meeting of the Company.
All Independent Directors have given declaration to the Company that they meet the criteria of ''Independence'' set out in
the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. The Board is of the opinion that the Independent
Directors of the Company hold the highest standards of integrity and possess the requisite expertise and experience
required to fulfill their duties as Independent Directors.
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves
with the databank maintained by The Indian Institute of Corporate Affairs, Manesar ("IICA").
KEY MANAGERIAL PERSONNEL
The following have been designated as the Key Managerial Personnel of the Company pursuant to Section 2(51) and
Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014:
a) Mr. Junya Yamanishi, Managing Director & Chief Executive Officer (Up to 16th April, 2025)
b) Mr. Yasushi Nishikawa, Managing Director & Chief Executive Officer (w.e.f 17th April, 2025 and ceased w.e.f.
1st August, 2025)
c) Mr. Vinod Kumar Sahay, Executive Director (w.e.f. 1st August, 2025) and Executive Chairman
(w.e.f. 3rd August, 2025)
d) Dr. Venkataraman Srinivas, Executive Director & Chief Executive Officer (w.e.f. 1st August, 2025)
e) Mr. Rakesh Bhalla, Chief Financial Officer (Earlier tenure was up to 31st May, 2026, which is now up to
30th September, 2025)
f) Mr. Pushkar Patwardhan, Chief Financial Officer (w.e.f. 1st October, 2025)
g) Mr. Parvesh Madan, Company Secretary
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of its Nomination & Remuneration Committee, the Board has adopted a Nomination and
Remuneration Policy, which is attached as Annexure A.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Sumitomo Corporation, Japan, a body corporate, with 43.96% shareholding was the Promoter of the Company up to
1st August 2025. As explained earlier in the Report, on 1st August 2025, Sumitomo Corporation, Japan and Isuzu Motors
Limited, Japan (a Public Shareholder) have transferred their respective equity stakes of 43.96% and 15% to Mahindra &
Mahindra Limited and, consequently, the Company has become a subsidiary of Mahindra & Mahindra Limited w.e.f.
1st August, 2025. However, the Company does not have any Subsidiary, Joint Venture or Associate Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were at arm''s length, in the ordinary course of
business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There
were no material transactions made by the Company during the year that would have required approval of the Members.
All related party transactions are placed before the Audit Committee for its approval. Prior omnibus approval of the Audit
Committee is obtained for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors.
It is available on the Company''s website at the web link:
https://smlisuzu.com/IN/investors/policies/corporate-policies
In terms of Section 134(3) (h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2.
The details of the related party transactions as per Ind-AS, are set out in Note 36 to the Financial Statements.
EXTRACT OF ANNUAL RETU RN
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration)
Rules, 2014, the Annual Return of the Company is available on the website of the Company at the web link.
https://smlisuzu.net/SMLI/FILES/annual return reports/2025-SML Form MGT 7 2025.pdf
MEETINGS OF THE BOARD
Five (5) Board Meetings were held during the year as detailed in the Corporate Governance Report which forms part of
this report.
AUDIT COMMITTEE
During the year, the Board, at its meeting held on 2nd August, 2024, appointed Mr. C.S. Verma as Chairman of the Audit
Committee and Mr. Sanjeev Mehan as the Member of the Audit Committee w.e.f. 22nd September, 2024.
As on 31st March, 2025, the Audit Committee comprised - Mr. C. S. Verma (Independent Director) as Chairman,
Ms. Atima Khanna (Independent Director) and Mr. Sanjeev Mehan (Independent Director) as Members.
With the change in the composition of the Board effective 1st August 2025, the Sub-Committees of the Board,
including the Audit Committee, were reconstituted. The Audit Committee now comprises - Mr. Ravi Venkatraman
(Independent Director) as Chairman, Mr. Arun Kumar Malhotra (Independent Director) and Mr. Vinod Kumar Sahay
(Executive Chairman) as Members.
All the recommendations made by the Audit Committee during the year were accepted by the Board.
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report is attached as Annexure B.
The disclosure as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of
this Report. That annexure is not being sent to the Members and others entitled to this Report and the financial
statements, as provided in Section 136 (1) of the Companies Act, 2013. Any member interested in obtaining a copy of the
said Annexure may write to the Company Secretary at [email protected].
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT,
2013
The Company has not given any loans, guarantees or made any investments during the year, which would be covered by
Section 186 of the Companies Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
No amount proposed to be transferred to General Reserves.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred or commitments made after 31st March, 2025, which may affect the financial position
of the Company or require disclosure.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes
initiatives to reduce consumption of electricity and water.
RISK MANAGEMENT
The primary objective of risk management is to protect the Company against risks to the value of the business, its capital
and its continuity. To achieve the objective and for better governance, the Board has formulated a Risk Management
Committee (RMC).
RMC is entrusted with the functions of determining the efficacy of risk management framework of the Company,
evaluating risks and mitigating measures. The Company has adopted a Risk Management Policy based on the
recommendations of RMC.
The Policy sets out key risk areas - financial risks (including risk to assets), commodity price risks, foreign exchange
fluctuation risks, legislative and regulatory risks, environmental risks (including natural disasters), operational risks, IT &
Cyber Security risks, risks relating to employment and manpower, and individual large transactional risks. The Policy also
provides guidance for Business Continuity Plan. The Chief Risk Officer (CRO) identifies and proposes action in respect of
all risks as and when any are perceived or foreseen or inherent in operations; analyses these and then reports to RMC for
its review and guidance. The Directors also bring to the notice of, and caution, the Committee of a risk perceived by them.
CORPORATE SOCIAL RESPONSIBILITY
As on 31st March, 2025, the Corporate Social Responsibility (CSR) Committee comprised three Directors -
Ms. Atima Khanna (Independent Director) as Chairperson, Mr. Takahiro Jitosho (Non-Executive Non-Independent
Director) and Mr. Junya Yamanishi (Managing Director & CEO) as Members.
During the year, the following changes were made to the CSR Committee:
a) The Board, at its meeting held on 15th March, 2024 appointed Mr. Takahiro Jitosho, Non-Executive
Non-Independent Director, as Member w.e.f. 1st April, 2024 in place of Mr. Takuro Horikoshi who resigned as
Director of the Company w.e.f. 31st March, 2024.
b) The Board, at its meeting held on 2nd August, 2024, appointed Ms. Atima Khanna, Independent Director,
as Member and Chairperson w.e.f. 22nd September, 2024 in place of Mr. C.S. Verma, Independent Director.
c) The Board, at its meeting held on 21st March 2025, appointed Mr. Yasushi Nishikawa, Managing Director
& CEO, as Member w.e.f. 17th April 2025 in place of Mr. Junya Yamanishi who resigned as Managing Director
& CEO w.e.f. 16th April, 2025.
With the change in the composition of the Board effective 1st August 2025, the Sub-Committees of the Board, including
the CSR Committee, were reconstituted. The CSR Committee now comprises Mr. Arun Kumar Malhotra (Independent
Director) as Chairman, Mr. C.S. Verma (Independent Director) and Ms. Mahima Chugh (Non-Executive Non
Independent Director) as Members.
On the recommendations of its CSR Committee, the Board has adopted Company''s policy on CSR with key thrust areas
defined as - promoting healthcare and sanitation, supporting education of girl child and underprivileged children,
sponsoring vocational education/ technical education, supporting deserving sportspersons, etc.
Annual Report on CSR activities for the year ended 31st March, 2025 is attached as Annexure C.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act and Listing Regulations, performance evaluation of the Board and its
Committees and all the Directors was undertaken, and the details are covered in the Corporate Governance Report.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
SHARE CAPITAL
There was no change in the Company''s issued, subscribed and paid-up equity share capital during the year. Further, the
Company has not issued any sweat equity shares or equity shares with differential rights during the year under review.
There is no stock option scheme for the employees.
DEPOSITS
During the year, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN
AND COMPANY''S OPERATIONS
To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals or any
other authority during the year, which may impact the going concern status of the Company or its operations in future.
OTHER CONFIRMATIONS
There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. Further, during the year under
review, there was no one-time settlement with any Bank or Financial Institution.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to
women at the workplace and prevent and redress complaints of sexual harassment and matters connected or incidental
thereto, with the objective of providing a safe working environment. The Company has Internal Complaint Committee(s)
for its Plant, Corporate Office and other locations in accordance with the Act, to enquire into complaints and take
appropriate action.
The Company has not received any complaint of sexual harassment during the year.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy to provide formal mechanism for the Directors, Employees and
Business Associates of the Company to report their concerns about unethical behavior, actual or suspected fraud or
violation of the Company''s code of conduct or ethics policy or to report genuine concerns or grievances including
instances of leak or suspected leaks of unpublished price sensitive information pursuant to the SEBI (Prohibition of Insider
Trading) Regulations, 2015. It provides for adequate safeguards against victimization of Directors, Employees and any
other person who avails of the mechanism and provides for direct access to the Chairman of the Audit Committee.
The Company received one (1) complaint during the year, which was duly investigated and appropriate action(s) taken
subsequent to the year end (Refer Note 45 to Financial Statements).
Whistle Blower Policy of the Company is available on the Company''s website at the web link:
https://smlisuzu.com/IN/investors/policies/corporate-policies
SECRETARIAL STANDARDS
The Company has duly complied with the applicable Secretarial Standards issued by the Institute of Company
Secretaries of India (ICSI).
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) and 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and
ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March, 2025, the applicable accounting standards
have been followed and proper explanations provided relating to material departures, if any;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates
that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at
31st March, 2025 and of the profit of the Company for the year ended on that date;
(c) they 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; they have prepared the annual accounts on a going concern basis;
(d) they have laid down internal financial controls to be followed by the Company and that such internal financial controls
are adequate and are operating effectively;
(e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that
such systems are adequate and operating effectively.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarization programme for Independent Directors in respect of their roles, rights & responsibilities, nature
of the industry in which Company operates, business model of the Company and related matters are available on the
website of the Company at web link:
https://smlisuzu.com/storage/uploads/finance reports/SML-ID-Familiarization-programme-2025.pdf
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, M/s A. Arora & Co., a proprietorship Company Secretaries firm, was
appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of the Company for FY 2024-25.
The Secretarial Audit Report, for the year under review, does not contain any qualification and is attached as Annexure D.
Pursuant to Regulation 24A and other applicable provisions of the Listing Regulations and applicable provisions of the
Companies Act, 2013 ("the Act") and Rules made thereunder, the Board, on the recommendation of its Audit Committee,
have approved and recommended the appointment of M/s A. Arora & Co., a proprietorship Company Secretaries firm
(Certificate of Practice No. 993), having a Peer Review Certificate (2120/2022 valid up to 31.05.2027) as Secretarial
Auditors of the Company for a term of five (5) consecutive years to hold office from FY 2025-26 to FY 2029-30, for approval
of the Members at ensuing AGM of the Company. Brief profile and other details of M/s A. Arora & Co. are separately
disclosed in the Notice of the ensuing AGM.
M/s A. Arora & Co. have given their consent to act as Secretarial Auditors of the Company and confirmed that their
aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and the
Listing Regulations.
INTERNAL AUDITORS
M/s. S. Tandon & Associates, Chartered Accountants (Firm Registration No. 006388N), was appointed as the Internal
Auditors of the Company for three years commencing from FY 2023-24 to FY 2025-26.
STATUTORY AUDITORS
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013) (hereinafter WCC),
were appointed as the Statutory Auditors of the Company, at its 36th Annual General Meeting held on 24th August, 2020,
for a period of five (5) years.
Auditors'' Report to the Members of the Company for the year under review does not contain any qualification.
On 1st August, 2025, the Company received resignation from WCC, wherein they communicated that consequent to the
change in control from the erstwhile promoter Sumitomo Corporation to Mahindra & Mahindra Limited, they have found
themselves in a position of conflict of interest with respect to the Company and, accordingly, resigned as Statutory
Auditors of the Company with immediate effect. This resulted in a casual vacancy in the office of Statutory Auditors under
Section 139 of the Companies Act, 2013.
Based on the recommendation of the Audit Committee, the Board, at its meeting held on 2nd August, 2025, appointed
M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No.: 101248W/W-100022) (hereinafter B S R) as
Statutory Auditors of the Company to hold office w.e.f. 2nd August, 2025 until the conclusion of 41st AGM of the Company
to fill the casual vacancy arising from resignation of WCC.
Further, the Board, subject to the approval of the Members at the ensuing AGM of the Company, recommended the
appointment of B S R as Statutory Auditors of the Company for a term of five (5) consecutive years from the conclusion of
41st AGM until the conclusion of 46th AGM of the Company.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial auditors and the reviews carried out by the
Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place,
adequate internal financial controls, with reference to financial statements, commensurate with the size and nature of the
business of the Company. During the year, such controls were tested and no reportable material weaknesses in the
design or operation were observed.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The required information on conservation of energy, technology absorption and foreign exchange earnings and outgo as
stipulated in the Companies Act, 2013 is attached as Annexure E.
COST RECORDS
There are no cost records which are prescribed under Section 148(1) of the Companies Act for any of the products
manufactured / services rendered by the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a Business
Responsibility & Sustainability Report for FY 2024-25 is attached as Annexure F and forms part of this Report.
ACKNOWLEDGMENTS
Your Directors express their grateful appreciation for the co-operation received from the concerned Government
departments, banks, dealers and other business constituents during the year under review. Your Directors also wish to
place on record their deep sense of appreciation for the committed services of the employees of the Company at all level.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
C.S.VERMA
Chairman
Dated 2nd August, 2025 (DIN: 00121756)
Mar 31, 2024
The Directors are pleased to present their Fortieth Annual Report together with audited financial statements for the financial year ended 31st March 2024.
PERFORMANCE REVIEW
During FY 2023-24, the Indian economy achieved robust GDP growth of 8.2% compared to 7.0% achieved during FY 2022-23. GDP growth during the year under review was mainly driven by manufacturing, construction, mining, transport, and other services.
During the year under review, the domestic CV Industry registered flat growth of 0.6% with volumes reaching at 9,67,900. Sale of Light Commercial Vehicles (LCVs) contracted by 1.5% with volumes at 5,94,700 and Medium & Heavy Commercial Vehicles (M&HCVs) increased by 4% with volumes at 3,73,200. The export of Commercial Vehicles has witnessed de-growth for the second consecutive year by 16.3% with volumes at 65,800.
Your Company''s sales volume increased by 10.9% (from 12,442 vehicles in FY 2022-23 to 13,797 vehicles in FY 2023-24).
The demand for Commercial Vehicles, during the year under review, was supported by healthy infrastructure spending, growth in macroeconomic activities, and the emphasis on replacing old vehicles under the green mobility policy. However, the high base effect, combined with a perceived slowdown in infrastructure activities ahead of State Elections in some states and General Elections 2024, has led to subdued volumes for the domestic CV industry in Q4 FY 2023-24.
With increase in volumes and softening of commodity prices, the financial performance of the Company has improved considerably during FY 2023-24. Your Company achieved its highest ever Profit after tax of Rs. 107.9 crores for FY 2023-24.
Financial highlights are given below:
(Rs. in Crores)
|
Year ended 31st March |
2024 |
2023 |
|
Sales Volume (No. of Vehicles) |
13,797 |
12,442 |
|
Sale of Products (Net) and Other Operating Revenues |
2,195.93 |
1821.59 |
|
Profit before Other Income, Depreciation, Finance Costs and Tax |
178.91 |
81.64 |
|
Add: Other income |
5.41 |
3.12 |
|
Profit before Depreciation, Finance Costs and Tax |
184.32 |
84.76 |
|
Less: Depreciation and Amortization |
47.52 |
42.43 |
|
Profit before Finance Costs and Tax |
136.80 |
42.33 |
|
Less: Finance Costs |
30.35 |
25.05 |
|
Profit before tax |
106.45 |
17.28 |
|
Less: Tax (including deferred tax) |
(143) |
(2.55) |
|
Profit after tax |
107.88 |
19.83 |
|
Add: Other Comprehensive Income / (Loss) [net of tax] |
(0.24) |
(3.37) |
|
Total comprehensive income for the year |
107.64 |
16.46 |
DIVIDEND
Keeping in view the improved financial performance of the Company during FY 2023-24, the Directors have recommended Final Dividend of 160% (Rs.16 per equity share of Rs.10 each fully paid up) for financial year ended on 31st March 2024. The cash outflow on this account will be Rs. 23.2 crores.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, as amended, the Board has approved and adopted a Dividend Distribution Policy, effective from 1st April, 2021.The policy is available on the Companyâs website at :
https://www.smlisuzu.com/storage/uploads/finance reports/DividendPolicy.pdf MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis, which also covers the state of the Company''s affairs, forms a part of this report. CORPORATE GOVERNANCE
A report on corporate governance together with the Certificate from M/s. A. Arora & Co., a firm of Practicing Company Secretaries, confirming compliance with corporate governance norms as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms a part of this report.
INDUSTRIAL RELATIONS
Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate a strong commitment to safety, health and environment which have been adopted as core organizational values. The Company ensures safety and audits its facilities in accordance with statutory and regulatory requirements. The Directors review these areas periodically through reports and presentations made at the Board Meetings.
Employees are continuously made aware of hazards / risks associated with their job, and their knowledge and skills are updated through requisite training to meet any emergency. Medical check-ups and eco-friendly activities are conducted periodically. Regular safety trainings are being conducted to promote awareness among all employees and stakeholders. Safe disposal of hazardous waste is ensured through recyclers / co-processors of hazardous waste. Effluent treatment plant and online monitoring systems have been installed for the treatment of trade & domestic effluents and the usage of treated water for other processes like green belt maintenance.
The Company has comprehensive emergency response plans, and regular drills are being conducted to ensure maintenance and check its emergency preparedness. Periodic safety audits are conducted to identify and mitigate potential risks.
The Company uphold ISO 9001:2015 (Quality Management System), IATF 16949:2016 (Automotive Quality Management System), ISO 27001:2013 (Information Security Management System), ISO 14001:2015 (Environmental Management System), ISO 45001:2018 (Occupational Health & Safety Management System) and ISO 50001:2018 (Energy Management System) certifications.
CURRENT BUSINESS ENVIRONMENT
During Q1 FY 2024-25, the CV industry registered growth of 3.5%, with volumes reaching at 2,24,200 (last year 2,16,600) due to robust demand in the passenger carrier segment - up 27.4% and marginal growth in the M&HCV truck segment - up 2.6%. The first quarter''s growth was driven by strong replacement demand and ongoing government spending on infrastructure.
During Q1 FY 2024-25, Your Companyâs sales volume increased by 9.3% (from 4006 in Q1 FY 2023-24 to 4379 in Q1 FY 2024-25). The Companyâs turnover for the first quarter was Rs. 746.1 crores and Profit before tax (PBT) was Rs. 62.0 crores (against Q1 FY 2023-24 turnover of Rs. 631.6 crores and PBT of Rs. 32.0 crores)
Current scenario and outlook for CV industry are discussed in detail in the Management Discussion and Analysis, which forms part of this report.
DIRECTORS
Mr. Eiichi Seto resigned as Director of the Company with effect from 3rd November, 2023. The Board, at its Meeting held on 3rd November, 2023, recorded its deep appreciation for his valuable contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, had appointed Mr. Takashi Sakuma as an Additional Director of the Company with effect from 4th November, 2023, which was subsequently approved by the Members of the Company through a Postal Ballot on 28th December, 2023.
Mr. Masaki Morohoshi resigned as Director of the Company with effect from 31st March, 2024. The Board, at its Meeting held on 15th March, 2024, recorded its deep appreciation for his valuable contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, had appointed Mr. Ryusuke Miyake as an Additional Director of the Company with effect from 1st April, 2024, which was subsequently approved by the Members of the Company through a Postal Ballot on 23rd May, 2024.
Mr. Takuro Horikoshi resigned as a Director of the Company with effect from 31 st March, 2024. The Board, at its Meeting held on 15th March, 2024, recorded its deep appreciation for his valuable contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, had appointed Mr. Takahiro Jitosho as an Additional Director of the Company with effect from 1st April, 2024, which was subsequently approved by the Members of the Company through a Postal Ballot on 23rd May, 2024.
Mr. Takashi Nishida resigned as a Director of the Company with effect from 8th August, 2024. The Board, at its Meeting held on 2nd August, 2024, recorded its deep appreciation for his valuable contributions to the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, has appointed Mr. Tomoyuki Yamaguchi as an Additional Director of the Company with effect from 9th August, 2024, and will hold office of Additional Director up to the ensuing Annual General Meeting of the Company.
The existing tenure of Mr. S.K.T uteja, Independent Director & Chairman, is up to 21 st September, 2024. The Board, at its Meeting held on 2nd August, 2024, recorded its deep appreciation for his strong and inspirational leadership as Independent Director & Chairman of the Company during his long association of more than 26 years with the Company.
The existing tenure of Mr. Sudhir Nayar, Independent Director, is up to 21st September, 2024. The Board, at its Meeting held on 2nd August, 2024, recorded its deep appreciation for his valuable contributions as Independent Director of the Company during his long association of 11 years with the Company.
The first term (of five years) of Mr. C.S. Verma, Independent Director, is up to 21st September, 2024. The Board, on the recommendation of its Nomination & Remuneration Committee, at its meeting held on 2nd August 2024, has proposed to the Members of the Company, the re-appointment of Mr. C.S. Verma as an Independent Director of the Company for a second term of five (5) years with effect from 22nd September, 2024.
Further, the Board has appointed Mr. C.S. Verma as Chairman of the Company w.e.f. 22nd September, 2024, subject to his re-appointment at the ensuing Annual General Meeting of the Company, due to demitting of office by Mr. S.K. Tuteja, Independent Director & Chairman of the Company.
The Board, on the recommendation of its Nomination & Remuneration Committee, at its meeting held on 2nd August, 2024, has proposed to the Members of the Company, the appointment of Mr. Sanjeev Mehan as an Independent Director of the Company for a term of five (5) years with effect from 22nd September, 2024.
Mr. Ryusuke Miyake retires by rotation and being eligible, offers himself for re-appointment.
Mr. Takashi Sakuma retires by rotation and being eligible, offers himself for re-appointment.
The details of the Directors being recommended for appointment / re-appointment are contained in the Notice convening the ensuing Annual General Meeting of the Company.
All Independent Directors have given declaration to the Company that they meet the criteria of ''Independence'' set out in the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. The Board is of the opinion that the Independent Directors of the Company hold the highest standards of integrity and possess the requisite expertise and experience required to fulfill their duties as Independent Directors.
KEY MANAGERIAL PERSONNEL (KMPs)
In terms of the applicable provisions of the Companies Act 2013, Mr. Junya Yamanishi, Managing Director & CEO, Mr. Rakesh Bhalla, Chief Financial Officer and Mr. Parvesh Madan, Company Secretary, are the Key Managerial Personnel of the Company as on 31st March, 2024. During the year under review, the tenure of Mr. Rakesh Bhalla was extended up to 31st May, 2026. (Earlier his tenure was up to 31 st May, 2025).
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of its Nomination & Remuneration Committee, the Board has adopted a Nomination and Remuneration Policy, which is attached as Annexure A.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Sumitomo Corporation, Japan, a body corporate, is the Promoter of the Company and holds 43.96% shareholding of the Company. In terms of the provisions of Section 2(76) the Companies Act, the Company is an Associate Company of Sumitomo Corporation. However, the Company does not have any Subsidiary, Joint Venture orAssociate Company. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were at arm''s length, in the ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material transactions made by the Company during the year that would have required approval of the Members. All related party transactions are placed before the Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors. It is available on the Company''s website at the web link:
https://www.smlisuzu.com/storage/uploads/finance reports/RPTPolicy.pdf
In terms of Section 134(3) (h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2. The details of the related party transactions as per Ind-AS, are set out in Note 36 to the Financial Statements.
EXTRACT OF ANNUAL RETURN
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the web link.
MEETINGS OF THE BOARD
Six (6) Board Meetings were held during the year as detailed in the Corporate Governance Report which forms part of this report.
AUDIT COMMITTEE
The Audit Committee comprises of three Independent Directors - Mr. Sudhir Nayar, as Chairman, Mr. C.S. Verma and Ms. Atima Khanna.
As the tenure of Mr. Sudhir Nayar is up to 21st September, 2024, the Board at its meeting held on 2nd August, 2024 has appointed Mr. C.S. Verma as Chairman of the Audit Committee w.e.f. 22nd September, 2024, subject to his re-appointment at the ensuing Annual General Meeting of the Company, and Mr. Sanjeev Mehan as the Member of the Audit Committee w.e.f 22nd September, 2024, subject to his appointment at the ensuing Annual General Meeting of the Company.
All the recommendations made by the Audit Committee during the year were accepted by the Board.
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report is attached as Annexure B.
The disclosure as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. That annexure is not being sent to the Members and others entitled to this Report and the financial statements, as provided in Section 136 (1) of the Companies Act, 2013. Any member interested in obtaining a copy of the said Annexure may write to the Company Secretary at[email protected].
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans, guarantees or made any investments during the year, which would be covered by Section 186 of the Companies Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES No amount proposed to be transferred to General Reserves.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred or commitments made after 31 st March, 2024, which may affect the financial position of the Company or require disclosure.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.
RISK MANAGEMENT
The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Board has formulated a Risk Management Committee (RMC) comprising two independent Directors and Managing Director & CEO.
RMC is entrusted with the functions of determining the efficacy of risk management framework of the Company, evaluating risks and mitigating measures. The Company has adopted a Risk Management Policy based on the recommendations of RMC.
The Policy sets out key risk areas - financial risks (including risk to assets), commodity price risks, foreign exchange fluctuation risks, legislative and regulatory risks, environmental risks (including natural disasters), operational risks, IT & Cyber Security risks, risks relating to employment and manpower, and individual large transactional risks. The Policy also provides guidance for Business Continuity Plan. The Chief Risk Officer (CRO) identifies and proposes action in respect of all risks as and when any are perceived or foreseen or inherent in operations; analyses these, and then reports to RMC for its review and guidance. The Directors also bring to the notice of, and caution, the Committee of a risk perceived by them. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee comprises of three Directors - Mr. C.S. Verma, Independent Director, as the Chairman, Mr. Takahiro Jitosho, Non-Executive Director and Mr. Junya Yamanishi, Managing Director & CEO as its Members. During the year, Mr. Takuro Horikoshi resigned as Director of the Company w.e.f. 31st March, 2024 and Mr. Takahiro Jitosho was appointed in his place w.e.f. 1 st April, 2024.
The Board, at its meeting held on 2nd August, 2024, has proposed to reconstitute its CSR Committee with Ms. Atima Khanna as its Member and Chairman in place of Mr. C.S. Verma w.e.f. 22nd September, 2024.
On the recommendations of its CSR Committee, the Board has adopted Company''s policy on CSR with key thrust areas defined as - promoting healthcare and sanitation, supporting education of girl child and under privileged children, sponsoring vocational education/ technical education, supporting deserving sportspersons, etc.
Annual Report on CSR activities for the year ended 31st March, 2024 is attached as Annexure C.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act and Listing Regulations, performance evaluation of the Board and its Committees and all the Directors was undertaken and the details are covered in the Corporate Governance Report. CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
SHARE CAPITAL
There was no change in the Company''s issued, subscribed and paid-up equity share capital during the year. Further, the Company has not issued any sweat equity shares or equity shares with differential rights during the year under review. DEPOSITS
During the year, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY''S OPERATIONS
To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals or any other authority during the year, which may impact the going concern status of the Company or its operations in future. OTHER CONFIRMATIONS
There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. Further, during the year under review, there was no one-time settlement with any Bank or Financial Institution.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to women at the workplace and prevent and redress complaints of sexual harassment and matters connected or incidental thereto, with the objective of providing a safe working environment. The Company has Internal Complaint Committee(s) for its Plant, Corporate Office and other locations in accordance with the Act, to enquire into complaints and take appropriate action.
The Company has not received any complaint of sexual harassment during the year.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy, to provide formal mechanism for the Directors, Employees and Business Associates of the Company to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy or to report genuine concerns or grievances including instances of leak or suspected leaks of unpublished price sensitive information pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015. It provides for adequate safeguards against victimization of Directors, Employees and any other person who avails of the mechanism and provides for direct access to the Chairman of the Audit Committee.
Whistle Blower Policy of the Company is available on the Company''s website at the web link: https://www.smlisuzu.com/storage/uploads/finance reports/WhistleBlowerPolicy.pdf.
SECRETARIAL STANDARDS
The Company has duly complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) and 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March, 2024, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2024 and of the profit of the Company for the year ended on that date;
(c) they 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; they have prepared the annual accounts on a going concern basis;
(d) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarization programme for Independent Directors in respect of their roles, rights & responsibilities, nature of the industry in which Company operates, business model of the Company and related matters are available on the website of the Company at web link:
https://www.smlisuzu.com/storage/uploads/finance reports/FamiliarisationProgramme.pdf SECRETARIALAUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s A. Arora & Co., a firm of Company Secretaries in practice, was appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of the Company for FY 2023-24. The Secretarial Audit Report, for the year under review, does not contain any qualification and is attached as Annexure D. INTERNAL AUDITORS
M/s. S. Tandon & Associates, Chartered Accountants (Firm Registration No. 006388N), was appointed as the Internal Auditors of the Company for three years commencing from FY 2023-24 to FY 2025-26.
STATUTORY AUDITORS
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), was appointed as the Statutory Auditors of the Company, at its 36th Annual General Meeting held on 24th August, 2020, for a period of five (5) years.
Auditorsâ Report to the Members of the Company, for the year under review, does not contain any qualification.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place, adequate internal financial controls, with reference to financial statements, commensurate with the size and nature of the business of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in the Companies Act, 2013 is attached as Annexure E.
COST RECORDS
There are no cost records which are prescribed under Section 148(1) of the Companies Act for any of the products manufactured / services rendered by the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a Business Responsibility & Sustainability Report for FY 2023-24 is attached as Annexure F and forms part of this Report.
ACKNOWLEDGMENTS
Your Directors express their grateful appreciation for the co-operation received from the concerned Government departments, banks, dealers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the employees of the Company at all level.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS S.K. TUTEJA JUNYA YAMANISHI
Dated: 2nd August, 2024 Chairman Managing Director & CEO
Mar 31, 2023
The Directors are pleased to present their Thirty-Ninth Annual Report together with audited financial statements for the financial year ended 31st March 2023.
During FY 2022-23, Indian Economy witnessed GDP growth of 7.2% against 9.1% during FY 2021-22. GDP growth, during the year under review, was mainly driven by construction, mining, transport & other services apart from sustained growth in the agricultural sector.
During the year under review, the domestic CV Industry registered YoY growth of 34% with volumes reaching at 9,62,500. Sale of Light Commercial Vehicles (LCVs) increased by 27% with volumes at 6,03,500 and Medium & Heavy Commercial Vehicles (M&HCVs) increased by 49% with volumes at 3,59,000. The 5-12 ton GVW category, in which the Company principally operates, increased by 40% with volumes reaching at 1,10,200. Your Company''s sales volume increased by 68% (from 7,392 in FY 2021-22 to 12,442 in FY 2022-23) with higher share of buses. The Company was able to increase its bus market share from 14.9% (FY 2021-22) to 20.2% (FY 2022-23).
The CV Industry growth, during the year under review, was supported by infrastructure push by the Government, strong replacement demand, pick-up in mining & construction activities, and some element of pre-buying prior to the introduction of BS6 Phase-2 norms effective from 1st April, 2023. Further, the growth was driven by opening up of offices and educational institutions and increase in tour & travel activities, etc.
With increase in volumes (from 7,392 vehicles to 12,442 vehicles - up 68%) and softening of commodity prices, financial performance of the Company has improved considerably during FY 2022-23 as summarized below:
|
(Rs. in Crores) |
||
|
Year ended 31st March |
2023 |
2022 |
|
Sales Volume (No. of Vehicles) |
12442 |
7392 |
|
Sale of Products (Net) and Other Operating Revenues |
1821.59 |
924.17 |
|
Profit / (Loss) before Other Income, Depreciation, Finance Costs and Tax |
81.64 |
(41.20) |
|
Add: Other income |
3.12 |
5.96 |
|
Profit / (Loss) before Depreciation, Finance Costs and Tax |
84.76 |
(35.24) |
|
Less: Depreciation and Amortization |
42.43 |
43.52 |
|
Profit / (Loss) before Finance Costs and Tax |
42.33 |
(78.76) |
|
Less: Finance Costs |
25.05 |
21.51 |
|
Profit / (Loss) before Tax |
17.28 |
(100.27) |
|
Less: Tax (Including Deferred Tax) |
(2.55) |
(0.51) |
|
Profit / (Loss) after Tax |
19.83 |
(99.76) |
|
Add: Other Comprehensive Income / (Loss) [Net of Tax] |
(3.37) |
5.68 |
|
Total comprehensive income for the year |
16.46 |
(94.08) |
Keeping in view the financial position of the Company, the Directors of your Company have not recommended any dividend for FY 2022-23.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Board has approved and adopted a Dividend Distribution Policy, effective from 1st April, 2021. The policy is available on the Companyâs website at https://www.smlisuzu.com/Financials/DividendPolicy.aspx
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis, which also covers the state of the Company''s affairs, forms a part of this report. CORPORATE GOVERNANCE
A report on corporate governance together with the Certificate from M/s. A. Arora & Co., a firm of Practicing Company Secretaries, confirming compliance with corporate governance norms as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms a part of this report.
Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety, health and environment which have been adopted as core organizational values. The Company ensures safety and audits its facilities in accordance with statutory and regulatory requirements. The Directors review these areas periodically through reports and presentations made at the Board Meetings. Employees are continuously made aware of hazards / risks associated with their job and their knowledge and skills are updated through requisite training to meet any emergency. Medical check-ups and eco-friendly activities are conducted periodically. Safe disposal of hazardous waste is ensured through recyclers / co-processors of hazardous wastes. Effluent treatment plant and online monitoring systems have been installed for the treatment of trade & domestic effluents and usage of treated water for other processes like green belt maintenance.
The Company continues to maintain and uphold ISO 9001:2015 (Quality Management System), IATF 16949: 2016 (Automotive Quality Management System), ISO 27001:2013 (Information Security Management System), ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health & Safety Management System) certifications.
The domestic CV Industry registered decline of 3.3% in wholesale volumes during Q1 FY 2023-24 with volumes at 2,17,000 (last year - 2,24,500).
M&HCVs truck segment has been impacted with unpredictable rainfall, tightened emission norms resulting in some prebuying during last quarter of FY 2022-23 and elevated interest rates - declined 1.7% with volumes at 66,800 (last year -68,000). LCV truck segment suffered due to high base effect and slowdown in e-commerce business - declined 8.9% with volumes at 1,24,800 (last year - 1,37,000). However, Bus segment witnessed strong growth in volumes backed by demand from the educational institutions and increased spending by the Government - up 30.4% with volumes at 25,400 (last year - 19,500).
During Q1 FY 2023-24, Your Companyâs sales volume increased by 14% (from 3511 in Q1 FY 2022-23 to 4006 in Q1 FY 2023-24). The Companyâs turnover for the first quarter is Rs. 633.8 crores and Profit Before tax (PBT) is Rs. 32.0 crores (against Q1 FY 2022-23 turnover of Rs. 500.7 crores and PBT of Rs. 2.3 crores).
Although CV industry volumes declined during Q1 FY 2023-24, Industry experts predict recovery in the subsequent quarters, supported by steady freight demand, economic recovery and the Governmentâs focus on infrastructure spending in line with the budgetary allocations.
Current scenario and outlook for CV industry are discussed in detail in the Management Discussion and Analysis, which forms part of this report.
At the last Annual General Meeting, held on 21st September, 2022, the Members had approved the appointment of Ms. Atima Khanna as Non-Executive Independent Director (in place of Dr. (Mrs.) Vasantha S. Bharucha whose term was completed on 21st September 2022) and Mr. Takashi Nishida as Non-Executive Director (in place of Mr. Kazuo Goda who tendered his resignation effective from 10th August 2022).
Mr. Masaki Morohoshi retires by rotation and being eligible, offers himself for re-appointment.
Mr. Takashi Nishida retires by rotation and being eligible, offers himself for re-appointment.
The details of the Directors being recommended for appointment / re-appointment are contained in the Notice convening the ensuing Annual General Meeting of the Company.
All the independent Directors have given declaration to the Company that they meet the criteria of ''independence'' set out in the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013. The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors.
KEY MANAGERIAL PERSONNEL (KMPs)
In terms of the applicable provisions of the Companies Act 2013, Mr. Junya Yamanishi, Managing Director & CEO, Mr. Rakesh Bhalla, Chief Financial Officer and Mr. Parvesh Madan, Company Secretary, are the Key Managerial Personnel of the Company as on 31st March, 2023. During the year under review, Mr. Rakesh Bhalla was re-appointed as Chief Financial Officer of the Company from 11th February 2023 to 31st May 2025.
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of its Nomination & Remuneration Committee, the Board has adopted a Nomination and Remuneration Policy, which is attached as Annexure A.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Sumitomo Corporation, Japan, a body corporate, is the Promoter of the Company and holds 43.96% shareholding of the Company. In terms of the provisions of Section 2(76) the Companies Act, the Company is an Associate Company of Sumitomo Corporation. However, the Company does not have any Subsidiary, Joint Venture or Associate Company.
All related party transactions that were entered into during the financial year were at arm''s length, in the ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material transactions made by the Company during the year that would have required Membersâ approval.
All related party transactions are placed before the Audit Committee for its approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors. It is available on the Company''s website at the web link: http://smlisuzu.com/Financials/RPTPolicy.aspx.
In terms of Section 134(3) (h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2. The details of the related party transactions as per Ind-AS, are set out in Note 36 to the Financial Statements.
In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company at the web link: https://smlisuzu.com/upload/agmnotice/annualreturn 2023.pdf.
Seven (7) Board Meetings were held during the year as detailed in the Corporate Governance Report which forms part of this report.
The Audit Committee comprises of three independent Directors - Mr. Sudhir Nayar, as Chairman, Mr. Chandra Shekhar Verma and Ms. Atima Khanna as its members. The tenure of Dr. (Mrs.) Vasantha S. Bharucha was completed on 21st September 2022 and Ms Atima Khanna was appointed in her place w.e.f. 22nd September 2022.
All the recommendations made by the Audit Committee during the year were accepted by the Board.
The information as per Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report is attached as Annexure B.
The disclosure as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. That annexure is not being sent to the Members and others entitled to this Report and the financial statements, as provided in Section 136 (1) of the Companies Act, 2013. Any member interested in obtaining a copy of the said Annexure may write to the Company Secretary at [email protected]
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans, guarantees or made any investments during the year, which would be covered by Section 186 of the Companies Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
No amount proposed to be transferred to General Reserves.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred or commitments made after 31st March, 2023, which may affect the financial position of the Company or require disclosure.
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.
The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Board has a Risk Management Committee (RMC) comprising two independent Directors and Managing Director & CEO.
RMC is entrusted with the functions of determining efficacy of risk management framework of the Company, evaluation of risks and mitigating measures. The Company has adopted a Risk Management Policy based on the recommendations of RMC.
The Policy sets out key risk areas - financial risks (including risk to assets), commodity price risks, foreign exchange fluctuation risks, legislative and regulatory risks, environmental risks (including natural disasters), operational risks, IT & Cyber Security risks, risks relating to employment and manpower, and individual large transactional risks. The Policy also provides guidance for Business Continuity Plan. The Chief Risk Officer (CRO) identifies and proposes action in respect of all risks as and when any are perceived or foreseen or inherent in operations; analyses these, and then reports to RMC for its review and guidance. The Directors also bring to the notice of, and caution, the Committee of a risk perceived by them.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee comprises of three Directors - Mr. Chandra Shekhar Verma, Independent Director, as the Chairman, Mr. Takuro Horikoshi, Non-Executive Director and Mr. Junya Yamanishi, Managing Director & CEO as its members.
On the recommendations of its CSR Committee, the Board has adopted Company''s policy on CSR with key thrust areas defined as - promoting healthcare and sanitation, supporting education of girl child and under privileged children, sponsoring vocational education/ technical education, supporting deserving sportspersons etc.
Annual Report on CSR activities for the year ended 31st March, 2023 is attached as Annexure C.
Pursuant to the provisions of the Companies Act and Listing Regulations, performance evaluation of the Board and its Committees and all the Directors was undertaken and the details are covered in the Corporate Governance Report. CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
There was no change in the Company''s issued, subscribed and paid-up equity share capital during the year. Further, the Company has not issued any sweat equity shares or equity shares with differential rights during the year under review. DEPOSITS
During the year, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY''S OPERATIONS
To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals or any other authority during the year, which may impact the going concern status of the Company or its operations in future. Further, there is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to women at the workplace and prevent and redress complaints of sexual harassment and for matters connected or
incidental thereto, with the objective of providing a safe working environment. The Company has also constituted an Internal Complaints Committee in accordance with the Act, to inquire into complaints and take appropriate action. The Company has not received any complaint of sexual harassment during the year.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy, to provide formal mechanism to the Directors, Employees and Business Associates of the Company to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy or to report genuine concerns or grievances including instances of leak or suspected leak of unpublished price sensitive information pursuant to SEBI (Prohibition of Insider T rading) Regulations, 2015. It provides for adequate safeguards against victimization of Employees and any other person who avail of the mechanism and provides for direct access to the Chairman of the Audit Committee.
Whistle Blower Policy of the Company is available on the Company''s website at the web link: http://smlisuzu.com/Financials/WhistleBlowerPolicy.aspx.
The Company has duly complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) and 134(5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2023 and of the profit of the Company for the year ended on that date;
(c) they 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; they have prepared the annual accounts on a going concern basis;
(d) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(e) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarization programme for Independent Directors in respect of their roles, rights & responsibilities, nature of the industry in which Company operates, business model of the Company and related matters are available on the website of the Company at web link: http://smlisuzu.com/Financials/FamiliarisationProgramme.aspx SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s A. Arora & Co., a firm of Company Secretaries in practice, was appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of the Company for FY 2022-23. The Secretarial Audit Report, for the year under review, does not contain any qualification and is attached as Annexure D.
M/s. S. Tandon & Associates, Chartered Accountants (Firm Registration No. 006388N), was appointed as the Internal Auditors of the Company for Financial Year 2022-23.
M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. 001076N/N500013), was appointed as the Statutory Auditors of the Company, at its 36th Annual General Meeting, for a period of five years.
Auditorsâ Report to the Members of the Company, for the year under review, does not contain any qualification.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place, adequate internal financial controls, with reference to financial statements, commensurate with the size and nature of the business of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in the Companies Act, 2013 is attached as Annexure E.
There are no cost records which are prescribed under Section 148(1) of the Companies Act for any of the products manufactured / services rendered by the Company.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a Business Responsibility & Sustainability Report for FY 2022-23 is attached as Annexure F and forms part of this Report.
Your Directors express their grateful appreciation for the co-operation received from the concerned Government departments, banks, dealers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the employees of the Company at all levels.
Mar 31, 2018
REPORT OF THE DIRECTORS
The Directors are pleased to present their Thirty-Fourth Annual Report together with audited financial statements for the financial year ended 31 st March 2018.
PERFORMANCE REVIEW
The Indian economy witnessed a slow-down during fiscal 2017-18 due to persisting impact of demonetization, transitory disruptions caused by implementation of Goods and Service Tax (GST) and weak agricultural growth. GDP growth estimate of 6.6 percent for fiscal 2017-18 (7.1 percent achieved in fiscal 2016-17) has been the lowest since 2014-15. However, Commercial Vehicle Industry (all segments including exports) grew 15.9 percent to reach volume of 9,53,300 vehicles supported by Government''s push towards infrastructure development, road construction & mining activities; an increased demand from consumption driven sectors as well as e-commerce logistics service providers; and strict implementation of overloading norms in some states. Light vehicles (LCVs) grew higher at 19.5 percent to reach 5,68,900 and Medium & Heavy vehicles (M&HCVs) grew 11.0 percent to reach 3,84,400.
The Company was unable to participate in that growth principally due to inadequate availability of vehicles for sale caused by the unexpected and sudden order of the Supreme Court of India on 29th March 2017 banning sale of BS III vehicles with effect from 1 st April 2017. That order had rendered the entire inventory of BS III vehicles, built up for the ensuing school bus season of April-July 2017, non-saleable. All such vehicles had to be modified to make them BS IV compliant. In subsequent months, production of vehicles suffered on account of shortage of some critical components. Consequently, sales volume for the year could reach only 11355 against 14909 sold in the previous year.
The financial performance of the Company, for the year ended 31st March, 2018 is summarized below:
(Rs. in Crores)
|
Year ended 31st March |
2018 |
2017 |
|
Sales volume (No. of vehicles) |
11355 |
14909 |
|
Total Income |
1177.25 |
1520.34 |
|
Less : Excise duty on sales |
39.09 |
160.02 |
|
Net Income |
1138.16 |
1360.32 |
|
Less : Material cost & other expenses |
1089.78 |
1246.18 |
|
Operating profit |
48.38 |
114.14 |
|
Profit before tax |
9.46 |
84.14 |
|
Profit after tax |
8.50 |
63.01 |
|
Balance of profit from prior years |
215.31 |
172.52 |
|
Surplus available for appropriation |
223.81 |
235.53 |
The Company has adopted Indian Accounting Standards (Ind-AS) with effect from 1st April, 2017 with the transition date of 1 st April, 2016. Accordingly, financial statements for the year ended 31 st March, 2018 have been prepared as prescribed for Ind-AS under Section 133 of the Companies Act, 2013 and the relevant rules. Previous year''s figures have been restated to make them comparable.
DIVIDEND
The Directors have recommended payment of dividend of Rs. 1.5 per equity share of face value of Rs. 10/- each for the year ended 31 st March, 2018 (previous year - Rs. 8.0 per equity share). The cash outflow on that account will be Rs. 2.62 crores (previous year - Rs. 13.93 crores), including dividend distribution tax of Rs. 0.45 crores (previous year - Rs. 2.36 crores).
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis, which also covers the state of the Company''s affairs, forms a part of this report. CORPORATE GOVERNANCE
A report on corporate governance together with the Auditors'' Certificate confirming compliance with corporate governance norms as stipulated under the SEBI Listing Regulations, 2015, forms a part of this report.
INDUSTRIAL RELATIONS
Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.
CREDIT RATING
The Company continues to enjoy the highest rating for short term borrowings of A1 (''A one plus'') from ICRA and the long term rating for line of credit / cash credit limits is AA (''double A'').
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety, health and environment which have been adopted as core organizational values. The Company assures safety and audits its facilities in accordance with statutory and regulatory requirements. The Directors review these areas every quarter through reports and presentations made at the Board Meetings. Employees are continuously made aware of hazards / risks associated with their job and their knowledge and skills are updated through requisite training to meet any emergency. Medical and occupational check-ups of employees and eco-friendly activities are promoted. Safe disposal of hazardous waste is ensured through an effluent treatment plant and an incinerator; a sewage treatment plant ensures eco-friendly disposal of sewage.
The Company is certified as BS OHSAS 18001: 2007 in respect of Occupational Health & Safety Assessment Series and ISO 14001: 2015 in respect of Environmental Management System.
CURRENT BUSINESS ENVIRONMENT
Directors believe that demand for trucks during financial year 2018-19 will remain buoyant due to the increased thrust on infrastructure projects, growing demand from consumption-driven sectors & e-commerce logistic service providers, replacement led buying and generally improved economic scenario. In the passenger bus segment, replacement led buying, following a year of sharp contraction, and Government''s focus on improving urban as well as rural transportation, etc. are expected to push volumes. Further, the Government''s plan on phasing out of older diesel vehicles, at an advanced stage of formalization, is expected to generate additional demand both for trucks and buses.
Based on the above factors, during financial year 2018-19, M&HCV Truck segment is expected to register a growth of 4-6 percent and the LCV Truck segment is expected to grow 9-11 percent. Bus sales are expected to grow by 12-14 percent. However, competition is becoming increasingly intense with existing players continuously expanding their product portfolios.
Amidst such competitive environment and to meet ever changing regulatory requirements, the Company will continue its focus on customer reach, product development and up-gradation, innovative and cost effective technology solutions, up-gradation of manufacturing technology and cost cutting.
Company''s capex project envisaging an outlay of Rs. 220 crores towards technological advancement, product up-gradation / development and up-gradation of plant infrastructure to improve manufacturing efficiency is in its final stages of completion. An amount of Rs 191.3 crores has been incurred till 31st March, 2018. For this capex spending, the Company has drawn Rs.140.0 crores External Commercial Borrowings (ECB), designated in US Dollars (fully hedged), and the balance is from internal accruals.
DIRECTORS
Mr. Masaki Nakajima and Mr. Masahiro Narikiyo tendered their resignations as Directors of the Company with effect from 23rd March, 2018. The Board, in its Meeting held on 23rd March, 2018, recorded its deep appreciation for the valuable support and advice of the two gentlemen during their tenure.
The Board, on the recommendation of its Nomination and Remuneration Committee, appointed Mr. Gota Iwanami and Mr. Masaki Morohoshi as Additional Directors of the Company on 23rd March, 2018, who holds office until the ensuing Annual General Meeting of the Company.
Mr. Takahiro Imai, who was appointed by the Members as Whole-time Director designated as Director-R&D (Isuzu Products & Projects) at the last Annual General Meeting of the Company, resigned from his post with effect from 28th April, 2018. However, he continues to serve on the Board as a Non-Executive Director. The Board, at its Meeting held on 23rd May 2018, placed on record its deep appreciation for his valuable contribution to the Company as Director - R&D.
Mr. Eiichi Seto decided to demit office of Managing Director & CEO with effect from 10th August, 2018. However, he will continue as a Non-Executive Director on the Board of the Company. The Board, in its Meeting held on 23rd May, 2018, took note of his outstanding and inspirational leadership as Managing Director & CEO and recorded its deep appreciation for his valuable contributions to the Company and extended to him its best wishes for his future career.
The Board, at its Meeting held on 23rd May, 2018, was pleased to appoint, on the recommendation of its Nomination & Remuneration Committee, Mr. Yugo Hashimoto as Managing Director & CEO, in place of Mr. Eiichi Seto, w.e.f. 10th August, 2018, for a period of five years, subject to approval of the Members at the ensuing Annual General Meeting of the Company and of the Central Government, if required.
The Securities and Exchange Board of India (''SEBI'') has amended SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which mandates that, effective 1st April 2019, no listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of 75 years unless approval of shareholders has been obtained through a special resolution. Presently, Company''s two Non-Executive Independent Directors namely -Mr. P.K. Nanda & Mr. A.K. Thakur have already attained age of 75 years. Therefore, Special Resolutions being proposed for approval by the Members at the ensuing Annual General Meeting for Mr. P.K. Nanda & Mr. A.K. Thakur to continue as Directors on the Board of the Company.
Mr. Takeru Kikkawa retires by rotation and being eligible, offers himself for re-appointment.
Mr. Pankaj Bajaj retires by rotation and being eligible, offers himself for re-appointment.
At the last Annual General Meeting, held in September 2017, the Members had approved the appointment of Mr. Kazuo Goda as Non-Executive Director.
The details of the Directors being recommended for appointment / re-appointment are contained in the Notice convening the forthcoming Annual General Meeting of the Company.
All the independent Directors have given declaration to the Company that they meet the criteria of ''independence'' set out in the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013.
KEY MANAGERIAL PERSONNEL (KMPs)
In terms of the applicable provisions of the Companies Act 2013, Mr. Eiichi Seto, Managing Director & CEO, Mr. Gopal Bansal, Whole-time Director & CFO and Mr. Parvesh Madan, Company Secretary are the Key Managerial Personnel of the Company.
No KMP has resigned or was appointed during the financial year ended on 31st March 2018. However, on 23rd May, 2018, Mr. Eiichi Seto decided to demit office of Managing Director & CEO w.e.f. 10th August 2018 and the Board has appointed Mr. Yugo Hashimoto as Managing Director & CEO with effect from 10th August 2018 subject to approval of the Members of the Company and Central Government, if required. On his appointment as Managing Director & CEO, he will be a KMP under the provisions of the Companies Act 2013.
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of its Nomination and Remuneration Committee, the Board has adopted a Nomination and Remuneration Policy, which is attached as Annexure A.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has no Subsidiary, Joint Venture or Associate Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on arm''s length, in the ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material transactions made by the Company during the year that would have required shareholders approval.
All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors. It is uploaded on the Company''s website at web link: http://smlisuzu.com/Financials/RPTPolicy.aspx
In terms of Section 134(3)(h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2. The details of the related party transactions, as per Ind-AS, are set out in Note 37 to the Financial Statements.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is attached as Annexure B.
MEETINGS OF THE BOARD
Five Board meetings were held during the year as detailed in the Corporate Governance Report which forms part of this report. AUDIT COMMITTEE
The Audit Committee comprises three independent Directors, Mr. P.K. Nanda, as Chairman, Mr. A.K. Thakur and Mr. Sudhir Nayar, and the Whole-time Director & CFO, Mr. Gopal Bansal. All the recommendations made by the Audit Committee during the year were accepted by the Board.
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report is attached as Annexure C.
The disclosure as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. However, as per the provisions of Section 136 (1) of the Companies Act, 2013, the report and financial statements are being sent to the Members and others entitled thereto, excluding the aforesaid annexure. This annexure is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member interested in obtaining a copy thereof may write to the Company Secretary.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans, guarantees or made any investments during the year, which would be covered by Section 186 of the Companies Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
The Company proposes to carry Rs. 0.85 crores to General Reserve for the financial year 2017-18 (Previous year -Rs. 6.28 crores).
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred or commitments made after 31 st March, 2018, which may affect the financial position of the Company or require disclosure.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.
RISK MANAGEMENT
The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Board has constituted a Risk Management Committee (RMC) comprising three independent Directors, one non-executive Director and the Whole-time Director & CFO.
RMC is entrusted with the functions of determining efficacy of risk management framework of the Company, evaluation of risks and mitigating measures. The Company has adopted a formal Risk Management Policy based on the recommendations of RMC.
The Policy sets out key risk areas - financial risks (including risk to assets), legislative and regulatory risks, environmental risks (including natural disasters), operational risks (markets, production, technology, etc.), risks relating to employment and manpower, and individual large transactional risks. The Managing Director & CEO identifies and proposes action in respect of all risks through his Management team as and when any are perceived or foreseen or inherent in operations; analyses these, and then reports to RMC for its review and guidance.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) Committee consists of two independent Directors, namely, Mr. S.K.Tuteja, as Chairman and Dr. (Mrs.) Vasantha S. Bharucha and two Executive Directors - Mr. Eiichi Seto, the Managing Director & CEO and Mr. Gopal Bansal, Whole-time Director & CFO. On the recommendation of the Committee, the Board has adopted Company''s policy on CSR with key thrust areas defined as - promoting healthcare and sanitation, supporting education of girl child and under privileged children, sponsoring vocational education for women, etc.
Annual Report on CSR activities for the year ended 31 st March 2018 is attached as Annexure D.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, performance evaluation of the Board, the Directors as well as Committees of the Board has been carried out and the details are covered in the Corporate Governance Report.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
SHARE CAPITAL
There was no change in the Company''s issued, subscribed and paid-up equity share capital during the year.
DEPOSITS
During the year, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY''S OPERATIONS
To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals or any other authority during the year which may impact the going concern status of the Company or its operations in future.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) and the Rules there under. The Policy aims to provide protection to women at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment. The Company has also constituted an Internal Complaints Committee in accordance with the Act, to inquire into complaints and take appropriate action.
The Company has not received any complaint of sexual harassment during the year.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy, to provide formal mechanism to the Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. It provides for adequate safeguards against victimization of Directors and Employees who avail the mechanism and provides for direct access to the Chairman of the Audit Committee.
Whistle Blower Policy of the Company is available on the Company''s website at the web link: http://smlisuzu.com/Financials/WhistleBlowerPolicy.aspx
SECRETARIAL STANDARDS
The Company has duly complied with the applicable Secretarial Standards on Meeting of Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI).
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on that date;
(c) they 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) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place, adequate internal financial controls, with reference to financial statements, commensurate with the size and nature of the business of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarisation programme for Independent Directors in respect of their roles, rights & responsibilities, nature of the industry in which Company operates, business model of the Company and related matters are available on the website of the Company at the web link: http://smlisuzu.com/Financials/FamiliarisationProgramme.aspx
ALTERATION OF MEMORANDUM OF ASSOCIATION AND ADOPTION OF NEW ARTICLES OF ASSOCIATION
The Memorandum of Association (MOA) and Articles of Association (AOA) of the Company, as currently in force, are in accordance with the Companies Act, 1956.
With the enactment of the Companies Act 2013 (the new Act), as amended from time to time, it is proposed to alter / amend the existing MOA and to adopt new AOA to align with the provisions of the new Act.
Pursuant to the provisions of the Companies Act 2013, read with the Rules framed there under, alteration of MOA and AOA requires approval of shareholders by way of a special resolution and, accordingly, the resolutions are being placed before the Members at the ensuing Annual General Meeting for their approval.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s A. Arora & Co., a firm of Company Secretaries in practice, was appointed as the Secretarial Auditor to carry out the Secretarial Audit of the Company for fiscal 2017-18.
The Secretarial Audit Report, for the year under review, does not contain any qualification and is attached as Annexure E.
STATUTORY AUDITORS
B S R & Associates LLP, a firm of Chartered Accountants, was appointed as the Statutory Auditors of the Company, at its 31 st Annual General Meeting, for a period of five years.
The Auditors'' Report to the Members of the Company, for the year under review, does not contain any qualification.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in the Companies Act, 2013 is attached as Annexure F.
ACKNOWLEDGMENTS
Your Directors express their grateful appreciation for the co-operation received from the concerned Government departments, banks, dealers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the employees of the Company at all levels.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA EIICHI SETO
Dated : 23rd May, 2018 Chairman Managing Director & CEO
Mar 31, 2017
The Directors are pleased to present their Thirty-Third Annual Report together with audited financial statements for the financial year ended 31st March 2017.
PERFORMANCE REVIEW
The Financial Year 2016-17 witnessed three significant events starting with demonetization of high denomination currency, completion of all processes leading to the promulgation of the long awaited and transformational Goods and Service Tax (GST) and finally a Supreme Court judgment banning, with effect from 1st April 2017, sale of vehicles which only met emission targets for BS III specifications and not the enhanced specifications of BS IV. It is hoped that in the long term the first two events would have favourable effect on the countryâs economy and its GDP, which during financial year 2016-17, grew at an estimated 7.1 percent against 7.9 percent in the preceding year. While demonetization had its adverse impact on business in general, at least in the short term, the ban on sale of vehicles, stated above, has had significant adverse effects, discussed later in the Report.
The growth in the financial year in Commercial Vehicle Industry at 4.3 percent was lower than the 12.2 percent of the preceding year, volume reaching 8,22,500 against 7,88,800 in the preceding year 2015-16. While Light vehicles (LCV) grew 5.5 percent to reach 4,76,300, Medium & Heavy vehicles (M&HCV) segment growth was lower at 2.6 percent with volumes at 3,46,200. However, Your Company was able to achieve robust growth of 17.4 percent, during the year, from 12,700 vehicles to 14,909, as a result of aggressive marketing, brand building actions and several sales promotion initiatives.
The financial performance of the Company, for the year ended 31st March, 2017 is summarized below :
(Rs. in Crores)
|
2017 |
2016 |
|
|
Sales volume (No. of vehicles) |
14909 |
12700 |
|
Net revenue |
1,373.11 |
1,172.58 |
|
Less : Material cost & other expenses |
1,260.96 |
1,079.54 |
|
Operating profit |
112.15 |
93.04 |
|
Profit before tax |
84.63 |
68.32 |
|
Profit after tax |
62.81 |
51.16 |
|
Balance of profit from prior years |
158.19 |
126.07 |
|
Surplus available for appropriation |
221.00 |
177.23 |
The immediate effect of the ban on BS III vehicles was that all vehicles earlier sold to the dealers but still held in their stock as on 31st March 2017 were returned to the Company, reversing sales value, and the value of all non useable components in the Companyâs inventory relating to BS III vehicles had to be written off. The vehicles so returned from the dealers together with Companyâs stock of BS III vehicles are being converted into BS IV compliant vehicles, cost of which is being charged to profits as and when incurred. The Company is also trying to sell some of these vehicles in the overseas market, wherever feasible, which will not require any conversion.
DIVIDEND
The Directors have recommended payment of dividend of Rs. 8.0 per equity share of face value of Rs. 10/- each for the year ended 31 st March, 2017, same as in the previous year, which is subject to the approval of shareholders at the forthcoming Annual General Meeting. The cash outflow will be Rs. 13.93 crores including dividend distribution tax of Rs. 2.36 crores, same as in the previous year.
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis, which also covers the state of the Companyâs affairs, forms a part of this report. CORPORATE GOVERNANCE
A report on corporate governance together with the Auditorsâ Certificate confirming compliance with corporate governance norms, as stipulated under the SEBI Listing Regulations, 2015, forms a part of this report.
INDUSTRIAL RELATIONS
Industrial relations and work atmosphere remained cordial throughout the year with sustained communication and engagement with workforce through various forums.
CREDIT RATING
The Company continues to enjoy the highest rating for short term borrowings of A1 (pronounced A one plus) from ICRA. Further, during the year, the long term rating for line of credit / cash credit limits has been upgraded from AA- (pronounced double A minus) to AA (pronounced double A).
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety, health and environment which have been adopted as core organizational values. The Company assures safety and audits its facilities in accordance with statutory and regulatory requirements. The Directors review these areas every quarter through reports and presentations made at the Board Meetings.
Employees are continuously made aware of hazards / risks associated with their job and their knowledge and skills are updated through requisite training to meet any emergency. Regular medical and occupational check-ups of employees are conducted and eco-friendly activities are promoted.
Safe disposal of hazardous waste is ensured through an effluent treatment plant and an incinerator; a sewage treatment plant ensures eco-friendly disposal of sewage.
During the year, the Company has received BS OHSAS 18001: 2007 certificate in respect of Occupational Health & Safety Assessment Series and ISO 14001: 2015 certificate in respect of Environmental Management System.
CURRENT BUSINESS ENVIRONMENT
Pre-buying of vehicles during the last quarter of financial year 2016-17 on account of implementation of BS IV emission norms, effective 1st April 2017, and customersâ expectation of reduction in vehicle prices post implementation of GST has moderated demand in first four months of current financial year with CV volumes contracting 8.1% during the period. Your Company has sold 3928 vehicles during April-July 2017 against 6261 sold in the same period last year.
The above drop in sales volume had its inevitable impact on financial results of the first quarter. On net revenue of Rs. 357.98 crores (Rs. 516.10 crores), during the quarter, the Company has earned profit after tax of Rs. 6.75 crores (Rs. 40.86 crores).
CRISIL has forecast GDP growth at 7.4 percent for 2017-18 based on factors such as normal monsoons, softer interest rates and relatively benign inflation. As for CV Industry, expertsâ view is that CV industry will improve gradually and register growth of 6-8 percent during financial year 2017-18. For the Company, however, competition is becoming intense with entry of new players and existing players expanding their product portfolios.
Based on the above and expected recovery in demand for commercial vehicles in the second half of the current financial year, the Directors can look towards recovering the lost ground so far, during rest of the year.
Amidst the tough competitive environment, the Company will continue its focus on product development, innovative and cost effective technology solutions, up-gradation of plant infrastructure to improve manufacturing technology and efficiencies and cost cutting.
The Companyâs capex project envisaging an outlay of Rs. 220 crores for technology, product development and up-gradation of plant infrastructure to improve manufacturing efficiency is progressing well. An amount of Rs 107.0 crores has been spent till 31st March, 2017. To part finance this capex, the Company had drawn Rs. 35.0 crores External Commercial Borrowings (ECB) during financial year 2016-17, designated in US Dollars (fully hedged) and the rest has been from internal accruals. The Company has also planned to incur an estimated capex of Rs. 30.0 crores towards enhancing the production capacity of its Plant from 18,000 vehicles to 24,000 vehicles per annum by setting up an additional assembly line, to be funded through internal accruals.
DIRECTORS
Mr. Kimitoshi Kurokawa tendered his resignation as Director of the Company with effect from 5th August, 2016. The Board, in its Meeting held on 5th August, 2016, recorded its deep appreciation for his valuable support and advice during his tenure.
Mr. Kazuo Goda was appointed as an Additional Director of the Company on 5th August, 2016 and holds office up to the forthcoming Annual General Meeting. The Company has received Notice under Section 160 of the Companies Act, 2013 proposing Mr. Godaâs appointment as a Director of the Company for consideration of the Members at the forthcoming Annual General Meeting.
Mr. Kei Katayama tendered his resignation as Director-R&D of the Company with effect from 25th May, 2017. The Board, in its Meeting held on 10th May, 2017, recorded its deep appreciation for Mr. Katayamaâs contribution in R&D activities of the Company during his tenure.
Mr. Takahiro Imai was appointed as an Additional Director and Whole-time Director of the Company on 10th May, 2017 (effective 26th May 2017) designated as Director-R&D (Isuzu Products & Projects) for two years and holds office up to the forthcoming Annual General Meeting. The Company has received Notice under Section 160 of the Companies Act, 2013 proposing Mr. Imaiâs appointment as a Director of the Company for consideration of the Members at the forthcoming Annual General Meeting.
At the last Annual General Meeting held in August 2016, the Members had approved the appointment of Mr. Takeru Kikkawa as Non-Executive Director.
Mr. Masaki Nakajima retires by rotation and being eligible, offers himself for re-appointment.
Mr. Masahiro Narikyo retires by rotation and being eligible, offers himself for re-appointment.
The details of the Directors being recommended for appointment / re-appointment are contained in the Notice convening the forthcoming Annual General Meeting of the Company.
All the independent Directors have given declaration to the Company that they meet the criteria of âindependenceâ set out in the SEBI (LODR) Regulations, 2015 and the Companies Act, 2013.
KEY MANAGERIAL PERSONNEL (KMPs)
In terms of the applicable provisions of the Companies Act 2013, Mr. Eiichi Seto, Managing Director & CEO, Mr. Gopal Bansal, Whole-time Director & CFO and Mr. Parvesh Madan, Company Secretary, are the Key Managerial Personnel of the Company.
No KMP has resigned or was appointed during the year.
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of the Nomination and Remuneration Committee, the Board has adopted a Nomination and Remuneration Policy, which is attached as Annexure A.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint Venture or Associate Company.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were at armâs length basis, in the ordinary course of business and in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were no material transactions made by the Company during the year that would have required shareholders approval.
All related party transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party transactions as approved by the Board of Directors. It is uploaded on the Companyâs website at web link: http://smlisuzu.com/Financials/RPTPolicy.aspx
In terms of Section 134(3)(h) of the Companies Act, 2013, there are no transactions to be reported in Form AOC-2. The details of the related party transactions as per Accounting Standard 18 are set out in Note 33 to the Financial Statements.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9 is attached as Annexure B.
MEETINGS OF THE BOARD
Five Board meetings were held during the year as detailed in the Corporate Governance Report which forms part of this report. AUDIT COMMITTEE
The Audit Committee comprises three independent Directors, Mr. P.K. Nanda, as Chairman, Mr. A.K. Thakur and Mr. Sudhir Nayar, and the Whole-time director & CFO, Mr. Gopal Bansal. All the recommendations made by the Audit Committee during the year were accepted by the Board.
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report and attached as Annexure C.
The disclosure as per Section 197 of the Companies Act, 2013 read with Rule 5 (2) and Rule 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. However, as per the provisions of Section 136(1) of the Companies Act, 2013, the report and financial statements are being sent to the Members and others entitled thereto, excluding the aforesaid annexure. This annexure is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company. Any member interested in obtaining a copy thereof may write to the Company Secretary.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The Company has not given any loans, guarantees or made any investments during the year, which would be covered by Section 186 of the Companies Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
The Company proposes to carry Rs. 6.28 crores to General Reserve for the financial year 2016-17 (Previous year - Rs. 5.12 crores).
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes have occurred or commitments made after 31 st March, 2017, which may affect the financial position of the Company or require disclosure.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of natural resources and continuously takes initiatives to reduce consumption of electricity and water.
RISK MANAGEMENT
The primary objective of risk management is to protect the Company against risks to the value of the business, its capital and its continuity. In order to achieve the objective and for better governance, the Board has constituted a Risk Management Committee (RMC) comprising three independent Directors, one non-executive Director and the Whole-time Director & CFO.
RMC is entrusted with the functions of determining efficacy of risk management framework of the Company, evaluation of risks and mitigating measures. The Company has adopted a formal Risk Management Policy based on the recommendations of RMC.
The Policy sets out key risk areas - financial risks (including risk to assets), legislative and regulatory risks, environmental risks (including natural disasters), operational risks (markets, production, technology, etc.), risks relating to employment and manpower, and individual large transactional risks. The Managing Director & CEO identifies and proposes action in respect of all risks through his management team as and when any are perceived or foreseen or inherent in operations; analyses these, and then reports to RMC for its review and guidance.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) Committee consists of two independent Directors, namely, Mr. S.K.Tuteja, as Chairman and Dr. (Mrs.) Vasantha S. Bharucha and two Executive Directors - Mr. Eiichi Seto, the Managing Director & CEO and Mr. Gopal Bansal, Whole-time Director & CFO. On the recommendations of the Committee, the Board has adopted Companyâs policy on CSR with key thrust areas defined as - promoting healthcare and sanitation, supporting education of girl child and under privileged children, sponsoring vocational education for women, etc.
Annual Report on CSR activities for the year ended 31st March 2017 is attached as Annexure D.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, performance evaluation of the Board, the Directors as well as Committees of the Board has been carried out and the details are covered in the Corporate Governance Report.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the year.
SHARE CAPITAL
There was no change in the Companyâs issued, subscribed and paid-up equity share capital during the year.
DEPOSITS
During the year, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANYâS OPERATIONS
To the best of our knowledge, the Company has not received any such orders from regulators, courts or tribunals or any other authority during the year which may impact the going concern status of the Company or its operations in future.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has adopted a policy in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the Act) and the Rules there under. The Policy aims to provide protection to women at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment. The Company has also constituted an Internal Complaints Committee in accordance with the Act, to inquire into complaints and take appropriate action.
The Company has not received any complaint of sexual harassment during the year.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy, to provide formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. It provides for adequate safeguards against victimization of Directors and employees who avail the mechanism and provides for direct access to the Chairman of the Audit Committee.
Whistle Blower Policy of the Company is available on the Companyâs website at web link: http://smlisuzu.com/Financials/WhistleBlowerPolicy.aspx
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Directors, to the best of their knowledge and ability, confirm that:
(a) in the preparation of the annual accounts for the year ended 31 st March, 2017, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;
(b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2017 and of the profit of the Company for the year ended on that date;
(c) they 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) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;
(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial auditors and the reviews carried out by the Management and the relevant Board Committees, the Directors are of the opinion that the Company has in place, adequate internal financial controls with reference to financial statements, commensurate with the size and nature of the business of the Company. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of familiarisation programme for Independent Directors in respect of their roles, rights & responsibilities, nature of the industry in which Company operates, business model of the Company and related matters are available on the website of the Company at web link: http://smlisuzu.com/Financials/FamiliarisationProgramme.aspx
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s A. Arora & Co., a firm of Company Secretaries in practice, were appointed as the Secretarial Auditors of the Company to carry out the Secretarial Audit of the Company for financial year 2016-17.
The Secretarial Audit Report does not contain any qualification and is attached as Annexure E.
STATUTORY AUDITORS
B S R & Associates LLP, a firm of Chartered Accountants, was appointed as the Statutory Auditors of the Company, at its 31st Annual General Meeting, for a period of five years, subject to ratification by the Members of the Company at every subsequent AGM. Such ratification for the financial year 2017-18 is being sought from the Members at the forthcoming AGM.
As per the provisions of Section 139(1) of the Companies Act, 2013, the Company has received a written consent from B S R & Associates LLP, Chartered Accountants, for continuation of its appointment and a Certificate, to the effect that its appointment, if continued, would be in accordance with the Companies Act, 2013 and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Companies Act, 2013.
The Auditorsâ Report to the shareholders for the year under review does not contain any qualification.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The required information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in the Companies Act, 2013 is attached as Annexure F.
ACKNOWLEDGMENTS
Your Directors express their grateful appreciation for the co-operation received from the concerned Government departments, banks, dealers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the employees of the Company at all levels.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA EIICHI SETO
Dated : 10th August, 2017 Chairman Managing Director & CEO
Mar 31, 2015
Dear Members,
The Directors are pleased to present their thirty-first Annual Report
together with audited financial statements for the financial year ended
31st March 2015.
PERFORMANCE REVIEW
The Indian economy witnessed a modest recovery in the year with lower
fiscal and current account deficit, slowing inflation, lowering
interest rates and weak commodity prices, particularly oil. It was
hoped that the new initiatives on reforms and economic management would
give considerable push to the industrial economy and business sentiment
but the change was only marginal as reflected in the GDP growth to 7.3%
from 6.9%. However, none of these assisted demand for commercial
vehicles, which declined 1.3%. Sales volume in 5-12 ton GVW segment, in
which the Company principally operates, remained virtually static.
However, happily, your Company was able to achieve higher sales, at
11759 vehicles against 9760 in the previous year.
The financial performance of the Company, for the year ended 31st
March, 2015 is summarized below:
(Rs. in Crores)
2015 2014
Sales volume (No. of vehicles) 11759 9760
Net revenue 1,114.34 885.99
Less : material cost & other expenses 1,040.00 849.58
Operating profit 74.34 36.41
Profit before tax 48.74 17.71
Profit after tax 36.94 17.40
Balance of profit from prior years 103.28 92.70
Surplus available for appropriation 140.22 110.10
Transfer to General Reserve 3.70 1.74
Proposed dividend (including tax) 10.45 5.08
Amount carried to Balance Sheet 126.07 103.28
DIVIDEND
The Directors have recommended payment of dividend of Rs. 6.0 per
equity share of face value of Rs. 10 each for the year ended 31st
March, 2015 (previous year - Rs. 3.0 per equity share ) amounting to
Rs. 10.45 crores (previous year - Rs. 5.08 crores), including dividend
distribution tax of Rs. 1.77 crores (previous year - Rs. 0.74 crores).
MANAGEMENT DISCUSSION AND ANALYSIS
A Management Discussion and Analysis, which also covers the state of
the Company's affairs, forms a part of this report.
CORPORATE GOVERNANCE
A report on corporate governance together with the Auditors'
Certificate confirming compliance with corporate governance norms, as
stipulated in the Listing Agreements, forms a part of this report.
INDUSTRIAL RELATIONS
Industrial relations and work atmosphere remained cordial throughout
the year with sustained communication and engagement with workforce
through various forums.
CREDIT RATING
The Company continues to enjoy the highest rating for short term
borrowings, of A1 from ICRA reflecting the Company's financial
prudence. Further, the long term rating for line of credit / cash
credit limits has been upgraded from A to AA-.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety,
health and environment which have been adopted as core organizational
values. The Company assures safety and audits its facilities in
accordance with statutory and regulatory requirements.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to update their
knowledge and skill to meet any emergency. Regular medical and
occupational check-ups of employees are conducted and eco-friendly
activities are promoted.
Safe disposal of hazardous waste is ensured through an effluent
treatment plant and an incinerator; a sewage treatment plant ensures
eco-friendly disposal of sewage.
CURRENT BUSINESS ENVIRONMENT
High degree of optimism arising out of policy statements from a new
stable government, most economists forecasting that the Indian economy
is set for sustained growth with lower oil prices, some containment of
inflation, stable financial and currency policy, has been somewhat
belied so far. The expected growth in industrial, construction and
mining sectors is still elusive. However, encouraged by replacement
demand, an early resolution of the GST stalemate and a reasonable
monsoon all together justify the growth forecast by the Society of
Indian Automobile Manufacturers (SIAM) of 13-15% for medium & heavy
vehicles and 3-5 % for low weight vehicles. Overall growth of
commercial vehicle industry in the first quarter of the current year
April-June, 2015 was reported at 6% (Domestic - 3.6% and Exports -
26.0%).
The Company registered sales volume growth of 5%, in the first quarter,
3810 (3629) vehicles, out of which passenger vehicle sale was 2766
(2749) and cargo trucks 1044 (880). Although the growth trend is
expected to be maintained, that has to be seen in the light of
prevailing uncertainty over enforcement of safety / emission
regulations in respect of commercial vehicles.
On net revenue of Rs. 385.2 crores, the Company has earned profit after
tax of Rs. 29.1 crores in the first quarter of the current year
compared with Rs. 340.3 crores and Rs. 23.4 crores, respectively in the
corresponding quarter last year.
In view of the foregoing comments, the Directors can look to a
reasonable sales performance in the current year, but no more, with
continuing emphasis on cost control and cash management.
The civil construction work in respect of the Company's capex project
envisaging an outlay of Rs. 220 crores, as stated in the last Annual
Report, for technology, product development and up-gradation, plant
infrastructure to improve manufacturing efficiency commenced during the
last quarter of financial year under review. Other work is also in
progress.
DIRECTORS
Mr. Katsuya Okihiro tendered his resignation as Director of the Company
in March, 2015. The Board, at its Meeting held on 27th March, 2015,
recorded its deep appreciation for his valuable support and advice
during his tenure.
Mr. Hiroshi Omino tendered his resignation as Director of the Company
in July, 2015. The Board, at its Meeting held on 7th August, 2015,
recorded its deep appreciation for his valuable support and advice
during his tenure.
Mr. Masahiro Narikiyo was appointed as an Additional Director of the
Company on 27th March, 2015 and holds office up to the forthcoming
Annual General Meeting. The Company has received Notice under Section
160 of the Companies Act, 2013 proposing Mr. Narikiyo's appointment as
a Director of the Company for consideration of the Members at the
forthcoming Annual General Meeting.
Mr. Kimitoshi Kurokawa was appointed as an Additional Director of the
Company on 7th August, 2015 and holds office up to the forthcoming
Annual General Meeting. The Company has received Notice under Section
160 of the Companies Act, 2013 proposing Mr. Kurokawa's appointment as
a Director of the Company for consideration of the Members at the
forthcoming Annual General Meeting.
Mr. Masaki Nakajima retires by rotation and being eligible, offers
himself for re-appointment.
Mr. Kyoichiro Takashima retires by rotation and being eligible, offers
himself for re-appointment.
At the last Annual General Meeting of the Company, held in September
2014, the Members had approved the appointment of Mr. Hiroshi Omino and
Mr. Kyoichiro Takashima as Non-Executive Directors, Mr. S.K.Tuteja, Mr.
P.K. Nanda, Mr. A.K.Thakur, Mr. Sudhir Nayar and Dr. (Mrs.) Vasantha S.
Bharucha as Independent Directors, Mr. Eiichi Seto as Managing Director
& CEO, Mr. Gopal Bansal as Whole-time Director & CFO and Mr. Kei
Katayama as Director - R&D.
All the independent Directors have given declarations to the Company
that they meet the criteria of 'independence' set out in the Listing
Agreements and the Companies Act, 2013.
KEY MANAGERIAL PERSONNEL (KMPs)
In terms of the applicable provisions of the Companies Act 2013,
following were appointed as KMPs w.e.f. 1st April, 2014:
Name Designation
Mr. Eiichi Seto Managing Director & CEO
Mr. Gopal Bansal Whole-time Director & CFO
Mr. Parvesh Madan Company Secretary
No KMP has resigned or was newly appointed during the year.
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of the Nomination and Remuneration
Committee, the Board approved a Nomination and Remuneration Policy,
which is attached as Annexure A.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on an arm's length basis, in the ordinary course of
business and were in compliance with the applicable provisions of the
Companies Act, 2013 ('the Act') and the Listing Agreements. There were
no material transactions made by the Company during the year that would
have required shareholders approval under the Listing Agreements.
All related party transactions are placed before the Audit Committee
for approval. Prior omnibus approval of the Audit Committee is obtained
for the transactions which are repetitive in nature.
The Company has adopted a policy to deal with related party
transactions as approved by the Board of Directors. It is uploaded on
the Company's website at web link:
http://smlisuzu.com/Financials/RPTPolicy.aspx.
In terms of Section 134(3)(h) of the Companies Act, 2013, there are no
transactions to be reported in Form AOC-2.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies
(Management and Administration) Rules, 2014, the extract of Annual
Return in Form MGT-9 is attached as Annexure B.
MEETINGS OF THE BOARD
Five Board meetings were held during the year as detailed in the
Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee comprises three non-executive independent
Directors, Mr. P.K. Nanda, as Chairman, Mr. A.K. Thakur and Mr. Sudhir
Nayar, and one whole-time director, Mr. Gopal Bansal, Whole-time
Director & CFO. All the recommendations made by the Audit Committee
during the year were accepted by the Board.
PARTICULARS OF EMPLOYEES
The information as per Section 197 of the Companies Act, 2013 read with
Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, forms part of this Report. However, as per the
provisions of Section 136 of the Act, the Report and Accounts are being
sent to the members and others entitled thereto without the information
on employees' particulars which is available for inspection by the
members at the Registered Office of the Company during business hours
on all working days up to the date of the ensuing Annual General
Meeting. Any member interested in obtaining a copy thereof may write to
the Company Secretary in this regard.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF
THE COMPANIES ACT, 2013
The Company has not given any loans, guarantees or made any investments
during the year, which would be covered by Section 186 of the Companies
Act, 2013.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
The Company proposes to carry Rs. 3.70 crores to General Reserve for
the FY 2014-15. (Previous year - Rs. 1.74 cores).
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
COMPANY
No adverse material changes have occurred or commitments made after
31st March, 2015 which may affect the financial position of the Company
or require disclosure.
SUSTAINABILITY INITIATIVE
Your Company is conscious of its responsibility towards preservation of
natural resources and continuously takes initiatives to reduce
consumption of electricity and water.
RISK MANAGEMENT
The primary objective of risk management is to protect the Company
against risks to the value of the business, its capital and its
continuity. In order to achieve the objective and for better
governance, the Board has constituted a Risk Management Committee (RMC)
comprising three independent Directors, one non-executive Director and
the Whole-time Director & CFO.
RMC is entrusted with the functions, earlier overseen by the Audit
Committee, of determining efficacy of risk management framework of the
Company, evaluation of risks and mitigating measures. Based on its
recommendations, the Company has adopted a formal Risk Management
Policy.
The Policy sets out important areas of risk- financial risks (including
risk to assets), legislative and regulatory risks, environmental risks
(including natural disasters), operational risks (markets, production,
technology, etc.), risks relating to employment and manpower, and
individual large transactional risks. The Managing Director & CEO
identifies and proposes action in respect of all risks through his
management team as and when any are perceived or foreseen or inherent
in operations; analyses these, and then reports to RMC for its review
and guidance.
Pursuant to Section 135 of the Companies Act, 2013, your Directors have
constituted Corporate Social Responsibility (CSR) Committee with two
independent non- executive Directors, namely, Mr. S.K.Tuteja, as
Chairman and Dr. (Mrs.) Vasantha S. Bharucha (w.e.f. 8th May, 2015),
and two whole-time Directors namely Mr. Eiichi Seto, Managing Director
& CEO and Mr. Gopal Bansal, Whole-time Director & CFO as its members.
On its recommendation, the Board has adopted a Company policy on CSR
with thrust areas of activities to include promoting healthcare and
sanitation, supporting education of under privileged children / girl
child, sponsoring vocational education for women and providing support
to war widows and their dependents.
Annual Report on CSR activities for the year ended 31st March 2015 is
attached as Annexure C.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and the Listing
Agreements, the Board has carried out an annual evaluation of its own
performance and that of its Committees after seeking inputs from all
the Directors and members of relevant Committees. The Board also
carried out performance evaluation of each Director based on the
evaluation carried out by the Nomination and Remuneration Committee
(NRC).
The criteria for performance evaluation was set out by NRC and adopted
by the Board. These included composition and structure of the Board and
its Committees, effectiveness of the Committees, knowledge of the
Company's operations by members, their participation at meetings
including preparedness for issues for consideration, level of
contributions in assessing and improving performance of the Company and
interactions amongst themselves and with senior management. Adherence
to code of conduct of the Company, fiduciary and statutory obligations,
continuing maintenance of independence by independent Directors were a
part of the performance evaluation.
The Board was satisfied with its composition and its diversified nature
and that all Directors upheld highest standards of integrity and
probity, adhered to Company's code of conduct, made constructive and
effective contribution at meetings and generally carried out their
responsibilities well in the interest of the Company and its
stakeholders.
A separate meeting of independent Directors was held to review the
performance of non-independent Directors, performance of the Board as a
whole and performance of the Chairman of the Company, taking into
account the views of other Directors. That review was most
satisfactory.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company
during the year.
SHARE CAPITAL
There was no change in the Company's issued, subscribed and paid-up
equity share capital during the year.
DEPOSITS
The Company has not accepted deposits under Chapter V of the Companies
Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING
GOING CONCERN AND COMPANY'S OPERATIONS
To the best of our knowledge, the Company has not received any such
orders from regulators, courts or tribunals during the year which may
impact the going concern status of the Company or its operations in
future.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT
WORKPLACE
The Company has adopted a policy in line with the provisions of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 (the Act) and the Rules there under. The Policy
aims to provide protection to women at the workplace and prevent and
redress complaints of sexual harassment and for matters connected or
incidental thereto, with the objective of providing a safe working
environment. The Company has also constituted an Internal Complaints
Committee in accordance with the Act, to inquire into complaints and
recommend appropriate action.
During the year, the Company has not received any complaint of sexual
harassment.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy, to provide formal
mechanism to the Directors and employees to report their concerns about
unethical behaviour, actual or suspected fraud or violation of the
Company's code of conduct or ethics policy. It provides for adequate
safeguards against victimization of employees who avail of the
mechanism and provides for direct access to the Chairman of the Audit
Committee.
Whistle Blower Policy of the Company is available on the Company's
website at web link : http://smlisuzu.com/Financials/
WhistleBlowerPolicy. aspx
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013,
the Directors, to the best of their knowledge and ability, confirm
that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed and proper explanations
provided relating to material departures, if any;
(ii) they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period;
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
are operating effectively;
(vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems are adequate
and operating effectively.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
Based on the work performed by the internal, statutory and secretarial
auditors and the reviews performed by the Management and the relevant
Board Committees, the Directors are of the opinion that the Company has
in place, adequate internal financial controls with reference to
financial statements, commensurate with the size and nature of the
business of the Company. During the year, such controls were tested and
no reportable material weaknesses in the design or operation were
observed.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of the programme of familiarisation with the Company for
independent Directors in respect of their roles, rights &
responsibilities, nature of the industry in which Company operates,
business model of the Company and related matters are put up on the
website of the Company at web link http://smlisuzu.com/Financials
Familiarisation Programme.aspx.
SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board has appointed M/s A. Arora & Co., a
firm of Company Secretaries in practice, to undertake the Secretarial
Audit of the Company for FY 2014-15.
The Secretarial Audit Report does not contain any qualification and is
attached as Annexure D.
STATUTORY AUDITORS
B S R & Company, which was appointed statutory auditors of the Company,
at the last Annual General Meeting held in September 2014, and which is
a part of the network B S R Affiliates has expressed its inability to
continue as statutory auditors of the Company after the ensuing Annual
General Meeting of the Company. B S R & Associates LLP, which is a part
of the same network, viz. B S R Affiliates, has expressed its
willingness to be appointed as the statutory auditors of the Company
after the ensuing Annual General Meeting of the Company.
As required under the provisions of Section 139(1) of the Companies
Act, 2013 (the Act), the Company has received written consent from B S
R & Associates LLP for its appointment and a certificate to the effect
that its appointment, if made, would be in accordance with the Act and
the Rules framed thereunder and that it satisfies the criteria provided
in Section 141 of the Act.
The notes on Financial Statements referred to in the Auditor's Report
are self explanatory and do not call for any further comments.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo as stipulated in the Companies Act,
2013 is attached as Annexure E.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA EIICHI SETO
Dated : 07 August 2015 Chairman Managing Director & CEO
Mar 31, 2014
Dear Members,
The Directors are pleased to present their Thirtieth Annual Report
together with audited Financial Statements for the financial year ended
31st March 2014.
PERFORMANCE REVIEW
The report of the Directors for 2013 foresaw no major improvement in
the economy which might give confidence for a recovery in demand for
the Company''s products. In the event, the pace of slowdown continued
with GDP growth falling to under 5%, the commercial vehicle industry
inevitably suffered further falls in demand, of as much as 19% in the
year under review with volumes falling to 709,800 vehicles from
873,200. The 5-12 ton GVW category, in which the Company principally
operates, also declined by 15% to 100,200 from 118,100. In this
backdrop, Company''s sales volume suffered a drop of 19% with
devastating effect on profitability, even though highly inflationary
pressures on costs, particularly wages, were almost totally offset by
large savings in financial costs.
The financial performance of the Company, for the year ended 31st
March, 2014 is summarized below:
(Rs. in Crores)
2014 2013
Sales Volume (Nos.) 9760 12045
Net Revenue 885.99 1,011.06
Less:Material Cost & Other Expenses 849.58 931.78
Operating Profit 36.41 79.28
Profit Before Tax 17.71 48.49
Profit After Tax 17.40 36.43
Balance of Profit from Prior Years 92.70 73.45
Surplus available for Appropriation 110.10 109.88
Transfer to General Reserve 1.74 3.64
Proposed Dividend (including tax) 5.08 13.54
Amount carried to Balance Sheet 103.28 92.70
DIVIDEND
The Directors have recommended payment of dividend @ 30% (Rs. 3.0 per
share) for the Financial Year 2013-14 (80% in 2012-13).
MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
A Management Discussion & Analysis Report is annexed to this report. A
report on Corporate Governance together with the Auditors'' Certificate
confirming compliance of Corporate Governance norms also forms part of
this Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations and work atmosphere remained cordial throughout
the year with sustained communication and engagement with workforce
through various forums.
CREDIT RATING
The Company continues to enjoy the highest rating for short term
borrowings, of A1 from ICRA reflecting the Company''s financial
prudence.
PARTICULARS OF EMPLOYEES
The Company had 7 employees who were in receipt of remuneration of not
less than Rs.6,000,000 during the year ended 31st March, 2014 or not
less than Rs. 500,000 per month during any part of the said year.
A statement of particulars pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
forms part of this report. However, as per the provisions of Section
219(1)(b)(iv), this statement, is not being sent to the shareholders
with this report and the accompanying accounts. Members who wish to
receive a copy may write to the Company Secretary at the Registered
Office of the Company.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety,
health and environment. These aspects have been adopted as core
organizational value of the Company.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to them to update
their knowledge and skill to meet any emergency.
The Company carries out statutory safety assurance and audits its
facilities as per legal requirements. Regular medical and occupational
check-up of employees are conducted and eco-friendly activities are
promoted.
The Company has incinerator plant for safe disposal of hazardous waste
and a sewage treatment plant ensures eco-friendly disposal of sewage.
CURRENT BUSINESS ENVIRONMENT
From all reports the national economy may have seen the worst behind it
with slow resumption of growth, even though industrial indicators are
still somewhat lackluster. The overall outlook, not least arising from
the strong mandate delivered to the newly elected Government promising
political stability and decisive industrial and fiscal policies, lends
hope to an early revival of the commercial vehicles industry.
The Company is fully prepared to take advantage of the revival and with
new and improved products it looks forward to sharing in sustained
growth of the commercial vehicle industry, even though it may be
gradual.
An enhancement in the in-house production of bus bodies as a result of
completion of the facilities added as a part of the earlier reported
expansion project, together with much improved vendor supplies, led to
sale of passenger vehicles increasing to 2,749 in the first quarter,
April-June, 2014 from 2,271 in the corresponding quarter of previous
year. The seasonal demand for school buses was a major contributor.
Cargo vehicles, however, fell short - 880 against 924 - reflecting the
poor industrial growth. This product mix alongwith better per vehicle
realization has enabled net revenue of Rs 340.3 crores and profit after
tax of Rs 23.4 crores compared with Rs.10.2 crores in the corresponding
quarter last year.
The Board has approved a capex plan envisaging an outlay of Rs. 220
crores to be implemented over next three years towards substantial
technology and product up-gradation, development of products/ variants
and on plant infrastructure to improve manufacturing efficiency.
DIRECTORS
Mr. Yutaka Watanabe decided to demit office of Managing Director & CEO
with effect from 25th December 2013. The Directors placed on record
their deep sense of appreciation of his strong and inspirational
leadership as Managing Director & CEO, and his outstanding contribution
to the Company.
Mr. Eiichi Seto, who joined the Board as non-executive Director in May
2010, was appointed Managing Director & CEO of the Company for a period
of 5 years with effect from 26th December 2013, subject to approval of
shareholders of the Company in General Meeting and of the Central
Government.
Mr. Yasuyuki Niijima tendered his resignation as Director of the
Company in October, 2013. The Board, at its Meeting held on 11th
November, 2013, placed on record its deep appreciation for his valuable
support and advice during his tenure.
Mr. Hiroshi Omino was appointed as an Additional Director of the
Company on 11th November, 2013 and holds office up to the forthcoming
Annual General Meeting. The Company has received Notice u/s 160 of the
Companies Act, 2013 proposing Mr. Omino''s appointment as a Director of
the Company for consideration of the members at the forthcoming Annual
General Meeting.
Mr. Kyoichiro Takashima was appointed as an Additional Director of the
Company on 11th February, 2014. The Company has received Notice u/s 160
of the Companies Act, 2013 proposing Mr. Takashima''s appointment as a
Director of the Company for consideration of the members at the
forthcoming Annual General Meeting.
Mr. Gopal Bansal was appointed as an Additional Director and Whole-time
Director on 11th February, 2014 on the Board designated as Whole-time
Director & CFO, for 5 years, subject to the approval of the
Shareholders of the Company in the General Meeting. The Company has
received Notice u/s 160 of the Companies Act, 2013 proposing Mr.
Bansal''s appointment as a Director of the Company for consideration of
the members at the forthcoming Annual General Meeting.
Mr. Yuji Kosaka tendered his resignation as Director-R&D effective 18th
June 2014. The Board, at its Meeting held on 8th August, 2014, placed
on record its appreciation for his contribution for development of new
products during his tenure.
Mr. Kei Katayama was appointed as an Additional Director and Whole-time
Director on 8th August, 2014 on the Board designated as Director-R&D,
for 3 years, subject to the approval of the Shareholders of the Company
in the General Meeting and of the Central Government. The Company has
received Notice u/s 160 of the Companies Act, 2013 proposing Mr.
Katayama''s appointment as a Director of the Company for consideration
of the members at the forthcoming Annual General Meeting.
The Board, on the recommendation of Nomination & Remuneration
Committee, has proposed the appointment of Dr. (Mrs.) Vasantha S.
Bharucha, a Ph.D. in Economics, having experience of 45 years in areas
such as Economics, Strategy Planning, Fiscal Policy, etc. as an
independent Director of the Company for five years in the forthcoming
Annual General Meeting.
Mr. K. Okihiro and Mr. Pankaj Bajaj are the Directors retiring by
rotation at the forthcoming Annual General Meeting.
CORPORATE SOCIAL RESPONSIBILITY
As a responsible corporate citizen, the Company has always strived to
maintain the highest standards of social responsibility, governance,
safety and environmental performance. Pursuant to Section 135 of The
Companies Act, 2013, your Directors have constituted Corporate Social
Responsibility Committee (CSR) with three Directors, namely, Mr. S.K.
Tuteja, Non Executive Independent Director as Chairman, Mr. Eiichi
Seto, Managing Director & CEO, and Mr. Gopal Bansal, Whole-time
Director & CFO, as Members.
It will formulate and recommend to the Board a CSR Policy and under
that the activities to be undertaken, amounts to be spent and
monitoring implementation thereof.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of provision of Section 217(2AA) of the Companies Act, 1956,
it is hereby confirmed that :
i) In the preparation of annual accounts, the applicable Accounting
Standards have been followed along with proper explanations relating to
material departures;
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for the year under review;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safe guarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv) The Directors have prepared annual accounts on a ''going concern''
basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
A report required under the Companies (Disclosure of particulars in the
Report of Directors) Rules, 1988 is annexed to this Report.
COST AUDIT
On the stipulation of the Central Government, Cost Audit of the Company
for financial year 2013-14 is being conducted by Messers ABS &
Associates, Cost Accountants.
AUDITORS
B S R & Company, Chartered Accountants, retires as Auditors of the
Company and has given its consent for reappointment. As required under
the provisions of Section 139(1) of the new Companies Act ("the Act"),
the Company has received a written consent from the above Auditors for
their appointment and a Certificate, to the effect that their
re-appointment, if made, would be in accordance with the Act and the
Rules framed thereunder and that they satisfy the criteria provided in
Section 141 of the Act.
In respect of suggestion made by the Auditors in the annexure to their
Report at Para (iv), the Management has already taken steps to
strengthen internal control procedures in respect of purchase of
inventories and fixed assets and the observation at para (ix) (a), when
read with relevant note in the Notes to the Financial Statements, is
self explanatory.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA EIICHI SETO
Dated : 08 August 2014 Chairman Managing Director & CEO
Mar 31, 2013
The Directors are pleased to present their Twenty Ninth Annual Report
together with Audited Accounts for the financial year ended 31st March
2013.
PERFORMANCE REVIEW
The Directors had stated in the performance review last year that a
slowdown in manufacturing seemed almost inevitable with the economic
data that was emerging. In the event, the year under review saw a much
deeper slowdown in the Indian economy with its consequential impact on
the commercial vehicle industry. After an impressive performance over
the period 2008-09 to 2011-12 with compounded annual growth of 28% and
volume reaching 902,000 vehicles, the industry suffered a decline of
3.2% in the year under review. Unfortunately, the decline was even
higher at 7.2% in the 5-12 ton GVW category in which the Company mainly
operates - 118,100 vehicles from 127,300 in 2011-12. This magnitude of
the drop has adversely impacted both revenue and profit even though
several measures taken in anticipation of the downturn arrested a
sharper decline in profits.
The financial performance of the Company, for the year ended 31st
March, 2013 is summarized below:
(Rs. in Crores)
2013 2012
Sales Volume (Nos.) 12045 13646
Net Revenue 1,011.06 1,042.22
Less : Material Cost & Other Expenses 91.78 956.19
Operating Profit 79.28 86.03
Profit Before Tax (before
exceptional & prior period item) 48.49 64.96
Exceptional & prior period item 4.88
Profit After Tax 36.43 41.87
Balance of Profit from Prior years 73.45 49.22
Surplus available for appropriation 109.88 91.09
Transfer to General Reserve 3.64 4.19
Proposed Dividend (including tax) 13.54 13.45
Amount carried to Balance Sheet 92.70 73.45
DIVIDEND
The Directors have recommended payment of dividend @ 80% (Rs. 8.0 per
share) for the Financial Year 2012-13, at the same level as the
previous year.
MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
A Management Discussions & Analysis Report is annexed to this report. A
report on Corporate Governance together with the Auditors'' Certificate
confirming compliance of Corporate Governance norms also forms part of
this Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations and work atmosphere remained cordial throughout
the year. The Company has ensured sustained communication and
engagement with workforce through various forms.
CREDIT RATING
The Company continues to have the highest rating, for short term
borrowings, of A1 from ICRA. Highest credit rating reflects the
Company''s strong financial discipline & prudence.
PARTICULARS OF EMPLOYEES
The Company had 5 employees who were in receipt of remuneration of not
less than Rs.60,00,000 during the year ended 31st March, 2013 or not
less than Rs. 5,00,000 per month during any part of the said year.
A statement of particulars pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
forms part of this report. As per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report, together with
Accounts, is being sent to the Shareholders of the Company, excluding
the statement of particulars of employees under Section 217(2A) of the
Act. Members desiring to have a copy of the same, may write to the
Company Secretary at the Registered Office of the Company.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate strong commitment to safety,
health and environment. These aspects have been adopted as core
organizational value of the Company.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to them to update
their knowledge and skill to meet any emergency situation.
The Company carries out statutory safety assurance and audits its
facilities as per legal requirements. Regular medical and occupational
check-up of employees are conducted and eco-friendly activities are
promoted.
The Company has incinerator plant for safe disposal of hazardous waste
and a sewage treatment plant ensures eco-friendly disposal of sewage.
CURRENT BUSINESS ENVIRONMENT
Your Directors feel that currently there are no signs of any major
improvement in macro-economic indicators which may reverse, or even
arrest the declining trend for the Commercial Vehicle industry. It
continues to bear the brunt of lower cargo availability, reduced
Government expenditure, restrictive measures on mining in some states
and continuation of tight monetary regime. Industry performance during
April-June, 2013 quarter has further suffered with a 10% volume drop
compared with the corresponding period last year. Under such
conditions, on a sale volume of 3195 (3257) vehicles, during this
quarter, the Company recorded a net profit of Rs. 10.2 crores (Rs. 12.2
crores).
In the above background, despite certain policy announcements for
improving the economy, the Directors do not foresee that markets for
the Company''s products will substantially increase. With efforts made
in recent months to launch some improved products and further
tightening of control over expenditure and cash resources, they hope
that profitability will suffer the minimum effect. In these
circumstances, it is given that the Company - and indeed the whole
commercial vehicle industry will face pressure on margins. Product
development has continued so that some of these adverse effects are
mitigated, particularly over the longer term.
DIRECTORS
The Board reports with great regret the sad demise on 3rd March of this
year of Mr. Harkirat Singh, who was an independent Director of the
Company since 1991. He had played a constructive role at the Board,
which at its Meeting on 7th May, 2013, placed on record its deep
appreciation of the invaluable counsel and services rendered by Mr.
Harkirat Singh.
Mr. R.P. Sehgal, who joined the Company in 2004 as Executive
Director-Works and was appointed a Whole-time Director in 2010,
completed his tenure of three years on 31st May, 2013. His tenure was
marked by his involvement in setting up new facilities for enhancing
manufacturing capacity including the new bus body plant for
state-of-the- art ultra luxury buses. The Board has placed on record
its deep appreciation for the outstanding contribution and
distinguished services rendered by him to the Company. Directors and
all his colleagues in the Company wish him and his family all the best
for the future.
Mr. Masao Tabuchi tendered his resignation as Director of the Company
in April, 2013 on his appointment in a new position in his Company.
While regrettably accepting his resignation, the Board, at its Meeting
held on 7th May, 2013, placed on record its deep appreciation for his
valuable guidance and advice during the period of his association with
the Company.
Mr. Kenji Iida tendered his resignation as Director of the Company in
April, 2013. The Board, at its Meeting held on 7th May, 2013, took note
of the same and placed on record its deep appreciation for the valuable
contributions made by him during the period of his association with the
Company.
Mr. Masaki Nakajima was co-opted as a Director of the Company on 7th
May, 2013 and holds office upto the forthcoming Annual General Meeting.
The Company has received Notice u/s 257 of the Companies Act, 1956
proposing Mr. Nakajima''s appointment as a Director of the Company for
consideration of the members at the forthcoming Annual General Meeting.
Mr. Yasuyuki Niijima was co-opted as a Director of the Company on 7th
May, 2013 and holds office upto the forthcoming Annual General Meeting.
The Company has received Notice u/s 257 of the Companies Act, 1956
proposing Mr. Niijima''s appointment as a Director of the Company for
consideration of the members at the forthcoming Annual General Meeting.
Recognizing the need to strengthen Research and Development function of
the Company much needed for the development of new products and
upgrading the existing ones, the Board at its meeting held on 8th
November, 2012 appointed, subject to Shareholders'' approval, Mr. Yuji
Kosaka, as Whole-time Director with effect from 8th November, 2012 for
a period of two years, designated as Director-R&D. Mr. Kosaka worked
with Isuzu Motors group for almost 43 years and has vast experience in
the fields of Quality Control & Manufacturing Engineering. Appropriate
resolution for Mr. Kosaka''s appointment as Director of the Company has
been proposed for the forthcoming Annual General Meeting.
Mr. Sudhir Nayar was co-opted as an additional Director of the Company
on 6th August, 2013 and holds office upto the forthcoming Annual
General Meeting of the Company. The Company has received Notice u/s 257
of the Companies Act, 1956 proposing Mr. Nayar''s appointment as a
Director of the Company for consideration of the members at the
forthcoming Annual General Meeting.
Mr. E. Seto, Mr. P.K. Nanda and Mr. Pankaj Bajaj are the Directors
retiring by rotation at the forthcoming Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of provision of Section 217(2AA) of the Companies Act, 1956,
it is hereby confirmed that :
i) In the preparation of annual accounts, the applicable Accounting
Standards have been followed along with proper explanations relating to
material departures;
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for the year under review;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safe guarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv) The Directors have prepared annual accounts on a ''going concern''
basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ETC.
A report required under the Companies (Disclosure of particulars in the
Report of Directors) Rules, 1988 is annexed to this Report.
COST AUDIT
On the stipulation of the Central Government, Cost Audit of the Company
for financial year 2012-13 is being conducted by Messers ABS &
Associates, Cost Auditors.
AUDITORS
Observations made by the Auditors, when read with the relevant notes
forming part of Accounts, are self- explanatory.
B S R & Company, Chartered Accountants, retires as Auditors of the
Company and has given its consent for reappointment. As required under
the provisions of Section 224(1B) of the Companies Act, 1956, the
Company has received a written certificate from the above Auditors that
their appointment, if made, would be in conformity with the limits
specified in the said Section.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA Y. WATANABE
Dated : 06 August 2013 Chairma
Managing Director & CEO
Mar 31, 2012
The Directors are pleased to present their Twenty Eighth Annual Report
together with Audited Accounts for the financial year ended 31st March
2012.
PERFORMANCE REVIEW
As foreseen in last year's Directors report, economic growth of the
earlier years was not maintained during the year, both for external
reasons and internal factors and manufacturing growth remained
sluggish. However, thanks to the continuing road infrastructure
development and construction activities, the commercial vehicle
industry was able to beat that trend, further helped by increased
replacement demand arising from enforcement of regulatory requirements.
Consequently, your Company was able to achieve 6% growth in vehicle
numbers, a revenue increase of 14%, crossing the Rs 1,000 crore
milestone for the first time and new highs both in operating and net
profit.
The financial performance of the Company, for the year ended 31st
March, 2012 is summarized below:
(Rs. in Crores)
2012 2011
Sales Volume (Nos.) 13646 12870
Net Revenue 1,042.22 913.00
Less : Material Cost & Other Expenses 956.19 842.32
Operating Profit 86.03 70.68
Profit Before Tax (before exceptional &
prior period item) 64.96 51.38
Exceptional & prior period item 4.88 -
Profit After Tax 41.87 36.56
Balance of Profit from prior years 49.22 29.82
Surplus available for appropriation 91.09 66.38
Transfer to General Reserve 4.19 3.66
Proposed Dividend (including tax) 13.45 13.50
Amount carried to Balance Sheet 73.45 49.22
EXPANSION PROJECT
Further progress has been made with the Project and enhanced output of
new products from the new facility has been reasonably satisfactory.
Plans are now in place to manufacture new products both on Isuzu and
SML platform in the next twelve to eighteen months.
DIVIDEND
Having regard to the improved financial results, the Directors have
recommended payment of dividend for Financial Year 2011-12 @ 80% i.e.
Rs. 8.00 per share, same as the previous year's - which had included a
15% special dividend.
CHANGE IN SHAREHOLDING STRUCTURE
In April, 2012, Isuzu Motors Limited, Japan acquired from Sumitomo
Corporation, Japan 1,591,881 equity shares of Rs 10 each thereby
increasing their shareholding to 15% from existing 4%. Consequently,
with its shareholding in the Company coming down to 43.96 %, Sumitomo
Corporation, Japan has ceased to be the holding company of the company.
MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
A Management Discussions & Analysis Report is annexed to this report. A
report on Corporate Governance together with the Auditors' Certificate
confirming compliance of Corporate Governance norms also forms part of
this Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations and work atmosphere remained cordial throughout
the year. Company has ensured that there is sustained communication and
engagement with workforce through various forms.
CREDIT RATING
The Company continues to have the highest rating, for short term
borrowings, of A1 from ICRA, which is a reflection of the Company's
financial discipline and prudence.
PARTICULARS OF EMPLOYEES
The Company had 5 employees who were in receipt of remuneration of not
less than Rs. 60,00,000 during the year ended 31st March, 2012 or not
less than Rs. 5,00,000 per month during any part of the said year.
A statement of particulars pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
forms part of this report. As per the provisions of Section 219(1
)(b)(iv) of the Companies Act, 1956, the Report, together with
Accounts, is being sent to the
Shareholders of the Company, excluding the statement of particulars of
employees under Section 217(2A) of the Act. Members desiring to have a
copy of the same, may write to the Company Secretary at the Registered
Office of the Company.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate a strong commitment to safety,
health and environment. These aspects have been adopted as core
organizational value of the Company.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to them to update
their knowledge and skill to meet any emergency situation.
The Company carries out statutory safety assurance and audits its
facilities as per legal requirements. Regular medical and occupational
check-up of employees are concluded and eco-friendly activities are
promoted.
The Company has installed incinerator plant to safely dispose of
hazardous waste. A sewage treatment plant has also been installed to
ensure eco-friendly disposal.
CURRENT BUSINESS ENVIRONMENT
Recent economic data on manufacturing and GDP growth is, quite
naturally, a cause for concern for the industry and indeed for the
country for the year 2012-13. As with other industries and trades,
commercial vehicles industry will also suffer much uncertainty. Whilst
the Directors feel that the Company must be prepared for a slow down,
they are hopeful that the momentum of growth recently witnessed for the
Company's products may continue this year. The Company's resources and
management thereof are geared to achieve that growth, particularly so
with launching plan of new products and performance improvement of
existing products.
DIRECTORS
Mr. A.K. Thakur, Mr. M. Tabuchi and Mr. S.K. Tuteja are the Directors
retiring by rotation at the forthcoming Annual General Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of provision of Section 217(2AA) of the Companies Act, 1956,
it is hereby confirmed that :
i) In the preparation of annual accounts, the applicable Accounting
Standards have been followed and that there are no material departures;
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
iv) The Directors have prepared annual accounts on a going concern
basis.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.
A report required under the Companies (Disclosure of particulars in the
Report of Directors) Rules, 1988 is annexed to this Report.
COST AUDIT
On the stipulation of the Central Government, Cost Audit of the Company
for Financial Year 2011-12 is being conducted by Messers ABS &
Associates, Cost Auditors.
AUDITORS
Observations made by the Auditors, when read with the relevant notes
forming part of Accounts, are self- explanatory. As such, in the
opinion of the Directors, they do not call for a specific reply.
Messers B S R & Company, Chartered Accountants, retires as Auditors of
the Company and have given their consent for reappointment. As required
under the provisions of Section 224(1 B) of the Companies Act, 1956,
the Company has received a written certificate from the above Auditors
that their appointment, if made, would be in conformity with the limits
specified in the said Section.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
S.K. TUTEJA Y. WATANABE
Dated : May 25, 2012 Chairman Managing Director & CEO
Mar 31, 2011
Dear Members,
The Directors are pleased to present their Twenty Seventh Annual Report
together with Audited Accounts for the financial year ended 31st March
2011, which was the 25th year since the Company commenced its
commercial operations.
PERFORMANCE REVIEW
The improvement in the commercial vehicles market witnessed in the
second half of the previous year continued and the Company was able to
achieve the highest ever volume of sales at 12870 vehicles (10133). Net
Revenue at Rs. 893.0 crores (Rs. 722.2 crores), Operating Profit of Rs.
69.5 crores (Rs. 58.0 crores) and Profit before Tax at Rs. 51.4 crores
(Rs. 30.4 crores) also set new records.
Although sale of new products saw some improvement, these remained
below targets set. Consequently, capital expenditure for the expansion
project was restricted for the time being.
Receivables remained at satisfactory level having brought these to set
standards in the previous year, and cash flow was well controlled.
It is in the above background that the Directors report the following
summary of results for the year 2010-11
(Rupees in Crores)
Year Ended Year ended
31st March, 2011 31st March, 2010
Sales Volume (Nos.) 12870 10133
Net Operating Revenue 893.00 722.23
Operating Profit 69.46 57.93
Profit Before Tax 51.38 30.43
Tax Expense 14.82 8.97
Profit After Tax 36.56 21.46
Balance of Profit from Prior Years 29.82 17.28
Surplus available for Appropriation: 66.38 38.74
Appropriations:
Transfer to General Reserve 3.66 2.15
Proposed Dividend 11.58 5.79
Tax on Dividend 1.92 0.98
Amount carried to Balance Sheet 49.22 29.82
CHANGE OF COMPANY NAME
Members may recall that they had approved the change of Company's name
from Swaraj Mazda Limited to SML Isuzu Limited through postal ballot
process in November, 2010. Consequently, upon receipt of fresh
Certificate of Incorporation dated 3rd January, 2011 from the Registrar
of Companies, Punjab, Himachal Pradesh and Chandigarh, the new name of
the Company has become effective.
DIVIDEND
Having regard to the improvement in financial results, the Directors
have recommended payment of dividend for Financial Year 2010-11 @ 65%
i.e. Rs 6.50 per share. In addition the Directors recommend a special
dividend of 15% i.e. Rs 1.50 per share on completion of 25 years of
commercial operations, making aggregate of 80% i.e. Rs 8.00 per share.
Previous year's dividend was 40%.
EXPANSION PROJECT
Members may recall that Company had embarked upon its Expansion Project
in fiscal 2006-07 by setting up facilities with a view to expand its
product portfolio aimed to capitalize on the emerging business
opportunities in the Indian Commercial Vehicles sector and to enable it
to foray into the manufacture of air-conditioned luxury buses and
coaches targeted at the tourism industry and long distance inter-city
travel.
In the terms of the Rights Issue, ii had been projected that the net
proceeds of Rs.1800 lacs, earmarked for Expansion Project, would be
utilized by March, 2011. However, as stated in the last fiscal's
Directors Report, demand for luxury buses did not rise to expected
levels. Accordingly, capital spending has been restricted to bare
minimum and only a sum of Rs. 321.70 lacs utilized out of the aforesaid
Rs. 1800 lacs. Shareholders' approval is being sought in the
forthcoming Annual General Meeting of the Company for the deferment the
date of completion of expenditure up to March, 2013.
MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
A Management Discussions and Analysis Report is annexed to this report.
A report on Corporate Governance together with the Auditors'
Certificate confirming compliance of Corporate Governance norms also
forms part of this Annual Report.
INDUSTRIAL RELATIONS
Directors report with satisfaction that after a gap of 4-years a fresh
Wage Agreement was concluded with the representatives of the workmen in
cordial atmosphere.
PARTICULARS OF EMPLOYEES
The Company had 5 employees who were in receipt of remuneration of not
less than Rs. 60,00,000 during the year ended 31st March, 2011 or not
less than Rs. 5,00,000 per month during any part of the said year.
A statement of particulars pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
forms part of this report. As per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report, together with
Accounts, is being sent to the Shareholders of the Company, excluding
the statement of particulars of employees under Section 217(2A) of the
Act. Members desiring to have a copy of the same, may write to the
Company Secretary at the Registered Office of the Company.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate a strong commitment to safety,
health and environment. These aspects have been adopted as core
organizational value of the Company.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to them to update
their knowledge and skill to meet any emergency situation.
The Company carries out statutory safety assurance and audits its
facilities as per legal requirements. Regular medical and occupational
check-up of employees are concluded and eco-friendly activities are
promoted.
The Company has installed incinerator plant to safely dispose of
hazardous waste. A sewage treatment plant has also been installed to
ensure eco-friendly disposal.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.
A report required under the Companies (Disclosure of particulars in the
Report of Directors) Rules 1988 is annexed to this Report.
CURRENT BUSINESS ENVIRONMENT
There are concerns that the estimated 8.5% economic growth in fiscal
2010-11 may not be sustained on account of various factors - both
domestic & external, most importantly the effects of rising inflation,
and the continuing uncertainties in most lead economies in the world.
It is appropriate, therefore, to assume that the CV industry may not
sustain the growth recently witnessed. The first two months of the
current fiscal year has seen growth of CV volumes of 15% at half the
rate of the comparable months last year;and the SML Isuzu segment's
growth is only 1% (17500 against 17300).Company's sales for the
first two months stayed flat (1672 against 1699). Margins, too,
will be under pressure with prices of metals and petroleum products
showing no signs of coming down.
Despite the foregoing, the Directors look at the current year with
cautious optimism because of the initiatives taken to maintain growth
in traditional products at recent levels and enhancement in the
performance of new products.
DIRECTORS
Mr Yash Mahajan decided to demit office of the Managing Director upon
completion of his tenure of 5 years on 31st May, 2011. The Directors
respected his decision and placed on record their deep sense of
appreciation of his strong and inspirational leadership as Managing
Director of the Company since its establishment in 1983, his dedication
and outstanding contribution to nurturing it to its present position.
They wished Mr. Mahajan a happy and healthy life ahead.
The Directors appointed Mr. Yutaka Watanabe, presently Whole-time
Director of the Company, as Managing Director and Chief Executive
Officer of the Company for a period of 5 years with effect from 1st
June, 2011 on his existing remuneration subject to requisite approval
of Shareholders of the Company in the General Meeting and of the
Central Government, if required.
Mr. P.K.Nanda, Mr. Pankaj Bajaj and Mr. Steven Enderby are the
Directors retiring by rotation at the forthcoming Annual General
Meeting.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of provision of Section 217(2AA) of the Companies Act, 1956,
it is hereby confirmed that :
i) In the preparation of annual accounts, the applicable Accounting
Standards have been followed along with proper explanations relating to
material departures;
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for the year under review;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safe guarding the assets of
the Company and preventing and detecting fraud and other
irregularities;
iv) The Directors have prepared annual accounts on a 'going concern'
basis.
COST AUDIT
On the stipulation of the Central Government, Cost Audit of the Company
for financial year 2010-11 was conducted by Messers Avtar Singh &
Company, Cost Auditors. The Cost Auditors have given a clean report.
AUDITORS
Observations made by the Auditors, when read with the relevant notes
under schedule 'N' to the Accounts, are self-explanatory. As such, in
the opinion of the Directors, they do not call for a specific reply.
Messers Price Waterhouse (PW), the Company's Statutory Auditors
informed the Company vide letter dated 15th May, 2011 that they would
not be able to continue as a Statutory Auditors of the Company after
the forthcoming Annual General Meeting.
Taking note of PW's decision, Directors placed on record their
appreciation of the services rendered by Messers Price Waterhouse,
Chartered Accountants, as Statutory Auditors during the last 28 years
of their association with the Company.
Consequently, in the Board Meeting held on 30th June, 2011, the
Directors, on the recommendation of the Audit Committee of the Board,
appointed Messers B.S.R. & Company, Chartered Accountants as the
Statutory Auditors of the Company to hold office from the forthcoming
Annual General Meeting (AGM) of the Company to subsequent AGM subject
to the approval of shareholders.
FOR AND ON BEHALF OF THE BOARD
S K TUTEJA Y. WATANABE
Dated: 30th June, 2011 Chairman Managing Director
& CEO
Mar 31, 2010
The Directors present their Twenty Sixth Annual Report together with
Audited Accounts for the financial year ended 31st March, 2010.
PERFORMANCE REVIEW
As anticipated in last years Report, the fiscal year 2009-10 saw
steady improvement in the operations of the Company, particularly from
October, 2009, in common with the positive changes in the overall
commercial vehicle industry in the country. Happily, the improvement in
the money supply situation was even better than expected giving a boost
to demand for commercial vehicles (CV). While CV sales in the first
half at 2,38,000 were low, the second half saw accelerated demand and
sales achieved were at a robust level of 3,38,400. Consequently, total
industry sales for the year at 5,76,000 (4,27,000) were an all time
high. The Companys performance reflected that growth with sales rising
to 10,133 vehicles from 8,020 in 2008-09, giving operating revenue of
Rs. 722.23 crores (Rs. 546.95 crores).
Demand for the Companys ultra luxury buses saw only marginal
improvement from last year: market penetration has proven difficult
even though new products à two air-conditioned buses on Isuzu platform
and one on Mazda chassis - were well received. Having regard to the
slack demand for new products, capital spending in the year on the
Expansion Project was restricted to bare minimum, at Rs. 2.87 crores.
The Directors continue to believe that these products will achieve the
sale volumes forecast in that Project.
A noteworthy feature of the Years performance was highly successful
efforts on collection of receivables, at Rs 878 crores, the highest in
recent years, thereby achieving the stringent targeted levels of dealer
dues.
Operating Profit at Rs 57.93 crores (Rs 28.06 crores) was gained from
the increase in volume of sales, enhanced by a planned judicious
product-mix, timely restructuring of vehicle prices and close vigil on
expenditure.
It is in the above background that the Directors report the following
summary of results for the year 2009-10.
(Rs. in Crores)
Year Ended Year ended
31st March, 2010 31st March, 2009
Sales Volume (Nos.) 10,133 8,020
Net Operating Revenue 722.23 546.95
Operating Profit 57.93 28.06
Profit Before Tax 30.43 4.14
Tax Expense 8.97 (0.65)
Profit After Tax 21.46 4.79
Balance of Profit from
Prior Years 17.28 14.58
Surplus available
for Appropriation : 38.74 19.37
Appropriations :
Transfer to General Reserve 2.15 0.25
Proposed Dividend 5.79 1.57
Tax on Dividend 0.98 0.27
Amount carried to Balance Sheet 29.82 17.28
RIGHTS ISSUE
The Rights Issue for 39,84,946 shares as earlier approved by
Shareholders was made in March 2010 at a premium of Rs 190 per share.
It met with reasonable success and all offered shares were taken up and
duly allotted, except for unsubscribed 2,17,045 shares, which, under
the terms of the Issue were allotted to the Promoters over and above
their entitlement. The Issue raised Rs. 79.7 crores out of which issue
expenses of Rs 1.19 crores were disbursed and a Bank loan of Rs 50
crores earlier raised to meet the cost of the Expansion Plan was
repaid. Rs. 18 crores has been placed as a Fixed Deposit to meet
further needs for that Plan. The balance amount was utilized for
general corporate purpose.
DIVIDEND
Having regard to the improved financial results, the Directors
recommend payment of dividend for Financial Year 2009-10 @ 40% (i.e. Rs
4 per share) against 15% for the previous year.
MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE
A Management Discussions and Analysis Report is annexed to this report.
A report on Corporate Governance together with the Auditors
Certificate confirming compliance of Corporate Governance norms also
forms part of this Annual Report.
INDUSTRIAL RELATIONS
Industrial Relations and work atmosphere remained cordial throughout
the year.
PARTICULARS OF EMPLOYEES
The Company had 7 employees who were in receipt of remuneration of not
less than Rs. 24,00,000 during the year ended 31st March, 2010 or not
less than Rs.2,00,000 per month during any part of the said year.
A statement of particulars pursuant to Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975,
forms part of this report. As per the provisions of Section
219(1)(b)(iv) of the Companies Act, 1956, the Report, together with
Accounts, is being sent to the Shareholders of the Company, excluding
the statement of particulars of employees under Section 217(2A) of the
Act. Members desiring to have a copy of the same, may write to the
Company Secretary at the Registered Office of the Company.
SAFETY, HEALTH AND ENVIRONMENT
The Company continues to demonstrate a strong commitment to safety,
health and environment. These aspects have been adopted as core
organizational value of the Company.
Employees are continuously made aware of hazards / risks associated
with their job and necessary training is imparted to them to update
their knowledge and skill to meet any emergency situation.
The Company carries out statutory safety assurance and audits its
facilities as per legal requirements. Regular medical and occupational
check-up of employees are concluded and eco-friendly activities are
promoted.
The Company has installed incinerator plant to safely dispose off
hazardous waste. A Sewage Treatment Plant has also been installed to
ensure eco-friendly disposal.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, ETC.
A report required under the Companies (Disclosure of particulars in the
Report of Directors) Rules 1988 is annexed to this Report.
CURRENT BUSINESS ENVIRONMENT
Despite alarms from certain world events, particularly the financial
crises in some European countries, a dexterous balance achieved by the
Government between stimulus and other fiscal measures and actions on
the worrisome inflation has enabled the momentum in the economy to
continue. That has been further bolstered by large spending on
infrastructure development and greater availability of credit to
industry, including CV industry, which, consequently, has made an
extremely good start for the year with CV sale volumes in the first
quarter - April-June 2010 reaching 1,64,000 against 1,03,800 for the
same quarter last year. On the back of strong fundamentals, CV volumes
are expected to stay on growth path for the rest of the year. However,
tough monetary action, if taken by the apex bank during the year to
rein inflationary pressures, may act as a dampener. Further, rising
prices of petroleum products and metals may exert pressure on margins
as it may not be possible for the industry to pass on the entire input
cost increases to customers.
Following the industry pattern of the first quarter, demand in the
segment relevant for the Company vehicles also rose significantly;
unfortunately, due to shortage of critical components, full advantage
could not be taken of this increased demand and sales for the first
Quarter, which could have crossed 3,100, got restricted to 2,812
(2,186) vehicles. On this improved sales volume, first quarter
operations have recorded a net profit of Rs. 7.2 crores (Rs. 3.3
crores). Since vehicle production continues to be hampered by material
shortages, sales for the remaining three quarters may lag behind demand
for Company products.
Taking note of the aforesaid factors, Directors are optimistically
cautious about volume growth in sales for the rest of the year but
apprehend that the Company may not be able to protect margins.
DIRECTORS
Mr. T. Hashimoto tendered his resignation as Director of the Company
through letter dated 11th May, 2010. The Board, at its Meeting held on
28th May, 2010, placed on record its deep appreciation for his
contributions to the Company.
Mr. Eiichi Seto was co-opted as a Director of the Company on 28th May,
2010 and holds office upto the forthcoming Annual General Meeting. The
Company has received Notice u/s 257 of the Companies Act, 1956
proposing Mr. Setos appointment as a Director of the Company for
consideration of the members at the forthcoming Annual General Meeting.
Recognising the need to strengthen the Board in view of the Companys
growth plans, the Board of Directors at its meeting held on 27th July,
2010 appointed, subject to Shareholders approval, Mr. R.P. Sehgal as a
Whole-time Director with effect from 1st June 2010 for a period of
three years. Mr. Sehgal, in his tenure as Executive Director and a
member of the Companys core team of management, has made immense
contribution to its operations. He is designated as Director - Works.
Appropriate resolutions for Mr.Sehgals appointment as Director and
Whole-time Director of the Company have been proposed at the
forthcoming Annual General Meeting.
Mr.S.K.Tuteja, Mr. Harkirat Singh and Mr. H. Yamaguchi retire by
rotation and, being eligible, offer themselves for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of provision of Section 217(2AA) of the Companies Act, 1956,
it is hereby confirmed that :
i) In the preparation of annual accounts, the applicable Accounting
Standards have been followed along with proper explanations relating to
material departures;
ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for the year under review;
iii) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safe guarding the assets of
the Company and preventing and detecting fraud and other
irregularities;
iv) The Directors have prepared annual accounts on a going concern
basis.
COST AUDIT
On the stipulation of the Central Government, Cost Audit of the Company
for financial year 2009-10 was conducted by Messers Avtar Singh &
Company, Cost Auditors. The Cost Auditors have given a clean report.
AUDITORS
Observations made by the Auditors, when read with the relevant notes
under schedule N to the Accounts, are self-explanatory. As such, in
the opinion of the Directors, they do not call for a specific reply.
Messers Price Waterhouse, Chartered Accountants, retire as Auditors of
the Company and have given their consent for reappointment. As required
under the provisions of Section 224(1B) of the Companies Act, 1956, the
Company has received a written certificate from the above Auditors that
their reappointment, if made, would be in conformity with the limits
specified in the said Section.
FOR AND ON BEHALF OF THE BOARD
S.K. TUTEJA YASH MAHAJAN
Dated : July 27, 2010 Chairman Managing Director
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