To The Members,
It is a great privilege for your Directors to present the 35th Annual Report on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2016.
Your Companys performance during the year as compared with the previous year is summarized below:
(Rs. in million)
|2015 - 16||2014-15|
|Profit Before Exceptional items and tax||270.43||210.62|
|Profit Before Taxation (PBT)||270.43||447.57|
|Provision for Taxation, Deferred Tax||74.93||127.10|
|Profit After Tax (PAT)||195.50||320.47|
|Balance of Profit brought forward||515.54||344.68|
|Balance Available for Appropriation||711.04||661.90|
|Corporate Dividend Tax||2.66||19.43|
|Transfer to General Reserve||19.56||31.52|
|Balance carried to Balance Sheet||624.75||515.54|
|Basic and Diluted Earning Per Share (EPS) J||14.34||23.51|
The Company has a long track record of making dividend payments to the shareholders. The Board of Directors recommend that Interim Dividend of 47% (Rs.4.70/- per equity share) declared on March 12, 2016 for Financial Year 2015 -16, be considered as Final Dividend. No further dividends are proposed/ recommended by the Board. The total amount of Dividend distributed aggregates to Rs.66.73 Million (Including Dividend Tax). The Dividend payout ratio comes to 34.13%.
A sum of Rs.19.56 Million has been transferred to the General Reserve of the Company. This reaffirms the inherent financial strength of your company.
The vibrant automotive industry in India produced about 24 million vehicles in Financial Year 2015-16, of which over three million were exported. The bedrock for this large-scale production has been the automotive components suppliers that now represent almost 7% of Indias Gross Domestic Product and employs as many as 19 million people, both directly and indirectly.
Over the last decade, the automotive components industry has scaled three times to US$ 40 billion in 2015 while exports have grown even faster to US$ 11 billion. This has been driven by strong growth in the domestic market and increasing globalisation (including exports) of several Indian suppliers. The Indian Auto Component industry is expected to grow by 8-10% in FY 2017-18, based on higher localisation by OEMs, higher component content per vehicle, and rising exports from India. (IBEF; ICRA)
In this backdrop, your company registered a growth of 7.22% during the year under review, by achieving Sales Turnover of Rs.5,619.30 Million (on Standalone Basis) as against Rs.5,240.44 Million (on Standalone Basis) in the corresponding previous year.
The Profit before Tax stood at Rs.270.43 Million (on Standalone Basis) as compared to Rs.447.57 Million (on Standalone Basis) during the previous year.
On Consolidated Basis, your Company registered a growth of 8.12% during the year under review by achieving a Sales Turnover of Rs.9,051.46 Million as against Rs.8,371.67 Million during the previous year.
On Consolidated Basis, your Company recorded a Profit before Tax of Rs.496.24 Million during the year under review as compared to Rs.677.78 Million during the previous year.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company are prepared in accordance with the Accounting Standards, Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other applicable laws for the time being in force and the same forms part of this Annual Report.
The Audited Financial Statements, including the Consolidated Financial Statements and related information and audited accounts of subsidiaries are available on the website of the Company i.e. www.lumaxautotech.com. These documents shall also be available for inspection by any shareholder at the registered office of the Company.
Subsidiaries And Joint Venture Companies
As on March 31, 2016, your Company has 5 (Five) subsidiaries including step-down subsidiaries and 2 (Two) joint ventures companies. During the year under review, following companies have become Companys subsidiaries: 1. Lumax Integrated Ventures Private Limited 2. Lumax Energy Solutions Private Limited 3. Lumax Sipal Engineering Private Limited A report on the performance and financial position of each of the subsidiaries and joint venture companies as per the Companies Act, 2013 included in the consolidated financial statement is presented in a separate section in this annual report and hence not repeated here for the sake of brevity. Please refer Form AOC-1 annexed to the financial statement in the Annual Report.
Directors & Key Managerial Personnel
In accordance with the Articles of Association of the Company and the Companies Act, 2013, Mrs. Usha Jain, Director is retiring by rotation at the ensuing Annual General Meeting and being eligible, offers herself for reappointment.
Your Directors recommend the re-appointment of the above Director at the ensuing Annual General Meeting.
The Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.
Mr. Pratik Dhuri, Company Secretary of the Company ceased to be the Company Secretary w.e.f. July 04, 2015. The Board has appointed Ms. Swapnal Patane as Company Secretary of the Company w.e.f. July 15, 2015. Ms. Swapnal Patane is an Associate Member of the Institute of Company Secretaries of India (ICSI), having about 5 years of experience in secretarial functions.
Extract of Annual Return
In accordance with the requirement of Section 92 of Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the annual return in Form MGT 9 is annexed as Annexure - A.
Number of Board Meetings
The Board of Directors met 5 (Five) times in the Financial year 2015-16. The details of the board meetings and the attendance of the Directors are provided in the Corporate Governance Report.
Directors Responsibility Statement
As required under Section 134(5) of the Companies Act, 2013, the Directors state:
(i) That in the preparation of the Annual Accounts for the Financial Year ended 31st March, 2016, the applicable Accounting Standards have been followed along with proper explanation relating to material departures in the Auditor Report and Notes to Accounts;
(ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(iv) That the Directors have prepared the Annual Accounts on a "going concern" basis.
(v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company follows a policy on remuneration of Directors and Senior Management Employees. The Policy is approved by the Nomination & Remuneration Committee and the Board. The Remuneration Policy is stated in the Corporate Governance Report.
During the year under review, the Company has not accepted any Deposit under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
The members in their meeting held on July 23, 2014 had appointed M/s S.R. Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company for a period of 5 consecutive years in terms of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, to hold the office of auditors till the conclusion of the sixth consecutive Annual General Meeting of the Company to be held in the year 2019, subject to ratification by the Members at every Annual General Meeting. Your Directors recommends for ratification of their appointment in the ensuing Annual General Meeting.
During the year, all the recommendations of the Audit Committee were accepted by the Board. Hence there is no need for disclosure of the same in this Report.
The Board has re-appointed M/s Jitender, Navneet & Co. as the Cost Auditors of the Company in accordance with Section 148 and other applicable provisions, if any, of the Companies Act, 2013, for the audit of the cost accounts of the Company for the Financial Year 2015-16.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. I.U. Thakur, Practicing Company Secretary as the Secretarial Auditor of the Company to undertake the Secretarial Audit for the financial year 2015-16. The Report of the Secretarial Audit is annexed herewith as Annexure - B.
Particulars of Loans, Guarantees and Investments
The particulars of loans, guarantees and investments covered under the provisions of section 186 of Companies Act, 2013 are given in the Notes to financial statements.
Related Party Transaction and Policy
InaccordancewiththeprovisionsoftheCompaniesAct,2013 and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 the company has formulated a policy on Related Party Transactions, which is available on the Companys website at http://www.lumaxautotech.com/ downloads/related-party-transaction-policy.pdf. All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on a yearly basis for obtaining prior omnibus approval of the committee. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of Companies Act, 2013 and Listing Regulations.
All related party transactions entered during the financial year were in the ordinary course of business and on arms length basis. The particulars of contracts or arrangements with related parties referred to in Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is annexed herewith as Annexure - C.
The Company has established a vigil mechanism named Whistle Blower Policy, for directors, employees and business associates to report to the management, concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or ethics policy, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The mechanism provides for adequate safeguards against unfair treatment of whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/ exceptional cases. The Whistle Blower Policy is uploaded on the website of the Company.
Material Changes and Commitments
No other material changes and commitments affecting the Financial position of the Company have occurred between April 1, 2016 and the date on which this Report has been signed.
Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed separately as Annexure D.
Risk Management Policy
The Company has adopted an enterprise risk management policy and established a risk management framework to identify, mitigate and control the risks, which may threaten the existence of the Company, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The Company has also constituted a Risk Management Committee to review the risk trend, exposure, potential impact and their mitigation plans, and periodically the key risks are also discussed at the Audit Committee.
Corporate Social Responsibility (CSR) Policy and Initiatives
Your Company is committed to grow and operate in a socially sustainable manner and doing its bit for the society, of which it is a part. A well-outlined CSR program creates social and environmental value thus impacting and improving the lives of people. The key focus areas of your Company are education, promotion of girl child and healthcare for disadvantaged sections of the society.
The companys focus areas are largely covered under Schedule VII of the Companies Act, 2013. During the year, the Company has added one more school under its education initiative, besides continuing its support to the existing schools by way of providing financial support in terms of fees of girl children, E-learning centre, contributing towards infrastructure and other facilities for students in the school. Under its healthcare initiatives, the Company is focussing on preventive healthcare by continuously organising health check-up camps, lending financial support to hospitals for juvenile diabetes, cataract operations and partnering in special drives organised by various agencies for this cause. The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of Companies Act, 2013. The Committee monitors and oversees various CSR initiatives and activities of the Company. During the year, the Companys spend on CSR activities is around 1.60 percent of the average net profits during the three immediately preceding financial years. The Company is augmenting its resources to scale up its CSR activities to fulfill its obligation to spend two percent of the average net profit on CSR. The detailed Report on CSR activities is annexed herewith as Annexure - E.
Performance Evaluation of Board, Committee and Directors
The challenge for boards is to prevent crises in the organizations they govern. Performance evaluation is a key means by which boards can recognize and correct corporate governance problems and add real value to the organizations. During the year, the Board with the assistance of Nomination and Remuneration Committee has completed the evaluation exercise, which includes the evaluation of the Board as a whole, committees and Directors, as per the internally designed evaluation process approved by the Board.
The evaluation tested key areas of the boards work including strategy, business performance, risk and governance processes. The need to balance its monitoring activities with discussion on strategic matters was recognized and ought to be continually borne in mind. The evaluation considers the balance of skills, experience, independence and knowledge of the Company and the Board, its overall diversity, and analysis of the Board and its Directors functioning.
The feedback of the evaluation exercise was collated and discussed with the Board and an action plan to further improve the effectiveness of Board and committees is put in place.
Management Discussion & Analysis Report
Pursuant to the provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is annexed as part of this report separately as Annexure F.
Significant and Material orders Passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.
Internal Financial Control
The Company has a comprehensive internal control system to provide reasonable assurance about the achievement of its objective, reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively.
The monitoring and reporting of finance systems is supported by a web-based system SAP which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures at all levels of organization.
The report on Corporate Governance together with the Auditors Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as Annexure G.
Particulars of Employees
Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this report as Annexure H. The information required pursuant to section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the members at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.
We strive to drive the long-term and sustainable growth of the organization. We will continue our passion for seizing the great opportunities that lie ahead in our continuous efforts to deliver significant value to our customers and stakeholders. Your Directors place on record their appreciation for the continued co-operation and support extended to the Company by its highly valued customers, Joint Venture Partners, all other business partners, all the shareholders, Financial institutions, Banks, Vendors and various Government Agencies with whose help, cooperation and hard work the Company is able to achieve the results. The Board deeply acknowledges the trust and confidence placed by all the associates and employees of the Company for their contribution and support for the growth of the Company.
|For and on behalf of the Board of Directors|
|D. K. JAIN|
|Place: New Delhi||CHAIRMAN|
|Dated: May 12, 2016||DIN:00085848|