Eicher Motors Ltd Directors Report.

To the Members of Eicher Motors Limited

The Directors have pleasure in presenting the Thirty Ninth Annual Report along with the Audited Financial Statements of your

Company for the financial year ended March 31, 2021.

FINANCIAL RESULTS

Your Company has earned a net revenue from operations of Rs. 8,619.04 crores during the financial year 2020-21. The profit before depreciation and interest expense amounted to Rs. 1,786.51 crores, which is 20.7% of the total revenue. After accounting for other income of Rs. 452.03 crores, interest expense of Rs. 9.20 crores and depreciation of Rs. 446.03 crores, profit before tax amounted to Rs. 1,783.31 crores.

Profit after tax amounted to Rs. 1,329.70 crores after an income tax provision of Rs. 453.61 crores. Total Comprehensive Income for the year, net of tax amounted to Rs. 1,353.75 crores.

The financial results are summarized below:

Rs. in Crores
Particulars For the financial year ended March 31, 2021 For the financial year ended March 31, 2020
Net Revenue from operations 8,619.04 9,077.47
Profit before depreciation and interest 1,786.51 2,203.78
Interest 9.20 10.86
Depreciation 446.03 377.92
Profit before other income and tax 1,331.28 1,815.00
Other income 452.03 615.34
Profit before tax 1,783.31 2,430.34
Provision for tax (including Deferred tax) 453.61 526.52
Net profit after tax 1,329.70 1,903.82
Other comprehensive income 24.05 7.02
Total Comprehensive income for the year net of tax 1,353.75 1,910.84
Balance in statement of profit and loss brought forward from previous year 7,663.16 6,576.63
Amount available for appropriation 8,993.44 8,471.89
(Excluding exchange difference in translation of foreign operations)
Dividend for FY 2018-19, paid in FY 2019-20 - 341.11
Interim dividend proposed and paid in FY 2019-20 - 341.32
Dividend proposed for FY 2020-21, to be paid in FY 2021-22 464.67 -
Tax on dividend - 126.30
Earnings per share
- Basic (Rs.)# 48.68 69.75
- Diluted (Rs.)# 48.61 69.72

# Previous year earning per share are adjusted due to sub division of each equity share of face value of Rs.10/- each into 10 equity shares of face value of Re. 1/- each, pursuant to the approval of the shareholders at the Annual General Meeting of the Company held on August 10, 2020.

CHANGE IN THE NATURE oF BUSINESS, IF ANY

There is no change in the nature of business of the Company during the financial year under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT HAVE OCCURRED AFTER MARCH 31, 2021 TILL THE DATE OF THIS REPORT

The second wave of the global health pandemic COVID-19 in the month of April and May 2021 in India and the lockdown imposed by the State Governments resulted into closure of most of the retail outlets of dealers. Companys manufacturing facilities although continue to operate as per the business requirements and in compliance with the instructions and guidelines issued by the Government and local bodies.

The Company has considered the possible effects that may result from the COVID-19 on its operations. Management believes that it has taken into account external and internal information for assessing the possible impact of COVID-19 on various elements of its financial statement, including its liquidity position and the recoverability of assets. However, the impact assessment of COVID-19 is a continuing process, given the uncertainties associated with its nature and duration. The Company will continue to monitor any material changes to future economic conditions and the consequent impact on its business, if any.

DIVIDEND

The Board of Directors at its meeting held on May 27, 2021, has recommended for approval of the shareholders, payment of dividend of Rs. 17/- per equity share (@1700%) of face value of Re. 1/- eachoutoftheprofitsforthe year financial 2020-21 in accordance with the Dividend Distribution Policy of the Company.

The dividend, if approved by the shareholders in the ensuing Annual General Meeting, shall be paid in the following manner:

a) To all Beneficial Owners in respect of shares held in dematerialized form as per the data made available by the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) as of the close of business hours on August 10, 2021 (record date);

b) To all Members in respect of shares held in physical form after giving effect to valid transfer/transmission in respect of transfer/transmission requests properly lodged with the Company on or before the close of business hours on August 10, 2021 (record date).

AMOUNTS TRANSFERRED TO RESERVES

During the financial year 2020-21, no amount was transferred to General Reserve of the Company.

BRIEF DESCRIPTION OF THE STATE OF COMPANYS AFFAIRS/ BUSINESS PERFORMANCE

Your Company has sold 6,12,350 motorcycles in the financial year 2020-21, 12.3% lower when compared to financial year 2019-20 sales of 6,98,216 motorcycles. Out of 6,12,350 motorcycles sold in financial year 2020-21, 38,622 motorcycles were exported, a decline of 1.7% over previous year export volume of 39,296 motorcycles in financial year 2019-20.

Net Revenue from operations for financial year 2020-21 was Rs. 8,619.04 crores, 5.1% lower when compared with previous financial year of Rs. 9,077.47 crores. Net Sales of spare parts, gears and services decreased to Rs. 991.44 crores in financial year 2020-21 from Rs. 1,075.18 crores in the previous financial year, registering a decline of 7.8%.

Your Companys profit before depreciation, interest and tax was Rs. 1,786.51 crores in financial year 2020-21, lower by 18.9% over Rs. 2,203.78 crores recorded in financial year 2019-20.

MARKET AND FUTURE PROSPECTS

Please refer to Management Discussion & Analysis Report which forms part of the Annual Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be given pursuant to the provisions of Section 134 of the Companies Act, 2013 ("the Act"), read with the Companies (Accounts) Rules, 2014 is provided under Annexure-1.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year 2020-21.

CHANGES IN SHARE CAPITAL & THE COMPANYS EMPLOYEE STOCK OPTION PLAN, 2006 AND RESTRICTED STOCK UNITS PLAN, 2019

The Board of Directors of the Company at its meeting held on June 12, 2020 approved sub-division of equity shares of the Company and the same was also approved by the members at their 38th Annual General Meeting held on August 10, 2020 pursuant to which each equity share of face value of Rs. 10 each of the Company has been sub-divided into 10 equity shares of face value of Re. 1/- each with effect from August 25, 2020 (record date for sub-division). Capital clause of the Memorandum of Association has been amended suitably.

Pursuant to the above sub-division and with effect from August 25, 2020 (record date for sub-division), appropriate adjustments were made in the number of stock options that have been granted & yet to be exercised such that each such stock options shall stand converted into Ten (10) stock options of the same category and the respective exercise price for each such option shall be one tenth (1/10) of the exercise price fixed at the time of grant of such options.

The paid up Equity Share Capital of the Company as on March 31, 2021, was Rs. 27,33,35,922/-. During the year under review, the Company has issued 2,40,222 Equity Shares (Face value Re. 1/- each) pursuant to its Employees Stock Option Plan, 2006 ("ESOP, 2006") and 50,000 Equity Shares (Face value Re. 1/- each) pursuant to its Restricted Stock Units Plan, 2019 ("RSU Plan, 2019").

A Statement giving complete details as at March 31, 2021, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company and the weblink for the same is https://www.eicher.in/uploads/1626351902_eicher-motors-esop-statement-2020-21.pdf

ESOP, 2006 and RSU Plan, 2019, for grant of stock options have been implemented in accordance with the aforesaid SEBI Regulations. A certificate from M/s S.R. Batliboi & Co.,

LLP, Statutory Auditors, in this regard will be available for inspection on the website of the Company under "Investors" Section on the date of Annual General Meeting. The Company has not changed its ESOP, 2006 and RSU Plan, 2019 during the year under review.

Further, details of options granted and exercised are included in Note no. 48 in the notes to accounts forming part of standalone financial statements.

DEPOSITS

The Company has not accepted any deposits from the public/ members under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review. The Company has not renewed/accepted fixed deposits after May 29, 2009. There are no deposits that remain unclaimed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with Section 149(7) of the Act and Regulation 25(8) of SEBI (LODR) Regulations, 2015 Independent Directors of the Company have given written declarations to the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of SEBI (LODR) Regulations, 2015. As on March 31, 2021, all Independent Directors of the Company have valid registrations with the Independent Directors databank maintained by Indian Institute of Corporate Affairs in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

In accordance with the provisions of Section 152 and other applicable provisions of the Act, Mr. Siddhartha Lal, Managing Director, retires by rotation at the ensuing 39th Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors recommends his reappointment.

The Board of Directors of the Company at its meeting held on February 10, 2021, re-appointed Mr. Siddhartha Lal, as Managing Director of the Company for a period of 5 (five) years with effect from May 1, 2021, after taking into consideration recommendations of the Nomination & Remuneration Committee of the Company and subject to requisite approval of the shareholders at the ensuing AGM and the approval of the Central Government. In the opinion of the Board, Mr. Siddhartha Lal possess requisite skills & expertise in the context of business of the Company. For details on skills/expertise/competencies of Mr. Siddhartha Lal, please refer Corporate Governance Report forming part of this Annual Report.

During the year under review, Mr. S. Sandilya and Ms. Manvi Sinha were re-appointed as Independent Directors on the Board of the Company w.e.f. February 13, 2020, with requisite approvals of the shareholders obtained at the 38th Annual General Meeting held on August 10, 2020. Mr. Vinod Agarwal retired at the 38th Annual General Meeting held on August 10, 2020 and was reappointed by the shareholders.

Further, the Board at its meeting held on May 6, 2020 has appointed Mr. Kaleeswaran Arunachalam as the Chief Financial Officer of the Company with effect from May 6, 2020 in place of Mr. Lalit Malik, who is continuing as the Chief Commercial Officer of the Company. There has been no other change in the Directors and Key Managerial Personnel of the Company during the financial year under view.

 

THE COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys Hiring & Employment Policy:

A number of factors are considered towards selecting candidates at the Board level which include: Ability to contribute to strategic thinking Proficiency in Governance norms, policies and mechanisms at the Board level Relevant cross industry/functional experience, educational background, skills and experience Wherever relevant, independence of Directors in terms of applicable regulations.

With respect to core competencies and personal reputation, our practices ensure through the selection process that all Directors:

Exhibit integrity and accountability Exercise informed judgement

Are financially literate

Are mature and confident individuals

Operate with high performance standards

Removal of Directors

Under extreme circumstances and in highly unusual situations it may become necessary to remove a member from the Board of Directors. Reasons for doing so, may relate to any of the following (indicative; other than as provided under the Companies Act, 2013): i. Breach of confidentiality in anyway ii. Failure to meet obligatory procedures in the disclosure of conflict of interest iii. Failure to fulfil the fiduciary duties of a Director for the Company iv. Acting in any other manner which is against the interests of the Company

The Companys Remuneration Policy

The Companys Compensation Strategy defines the principles underlying compensation philosophy for its employees. Compensation is a critical piece of overall human-resources strategy and broadly refers to all forms of financial returns and tangible benefits that employees receive as a part of their employment relationship.

The Remuneration/Compensation Policy of the Company is designed to attract, motivate and retain manpower. This Policy applies to Directors and Senior Management including Key Managerial Personnel (KMP) and other employees of the Company.

The remuneration of the Managing Director, Executive Director, Key Managerial Personnel (KMPs) and CXOs of the Company is recommended by the Nomination and Remuneration Committee based on criteria such as industry benchmarks, the Companys performance vis-a-vis the industry, responsibilities and performance assessment. The Company pays remuneration by way of salary, perquisites and allowances (fixed component), incentive remuneration and/or commission (variable components).

Loans/advances may be extended to employees for various personal purposes or to aid business functions, from time to time, on a case to case basis, in accordance with the relevant Human Resource guidelines/policies in force or as may be approved by the Chief Financial Officer, the Chief Human Resource Officer of the Company, or any person authorized by them, including for relocation viz. school deposits/ expenses, travel/logistics expenses, housing advance, housing deposits/brokerage, any other expenses towards relocation; advance submission of tax deducted at source by the Company on behalf of employee; advance towards medical insurance premiums; loans granted to enable grantees exercise ESOPs and towards deposit of perquisite tax thereon; loans/advances covered under Employees Union recognized by the Company as per Union Agreement; medical emergency advances etc.

Additionally, in the event of exigencies arising due to calamities, the Company may provide financial assistance to any affected employee by way of extending interest free loan in an amount not exceeding his/her two months gross salary.

Remuneration by way of commission to the Non-Executive

Directors shall be decided by the Board of Directors within the ceiling of a sum, not exceeding 1% of the annual net profits of the Company in each of the financial year, calculated in accordance with the provisions of the Act and as approved by the members by passing a resolution in the general meeting.

Remuneration of KMPs and employees largely consists of basic remuneration, perquisites, allowances, performance incentives and employee stock options granted pursuant to the Employees Stock Option Plan of the Company. The components of remuneration vary for different employee levels and are governed by industry patterns, qualifications and experience of the employee and his/her responsibility areas, employee performance assessment etc.

The said Policy is also available on the website of the Company at http://www.eicher.in/uploads/1561782697_remuneration-policy.pdf

ANNUAL EVALUATION OF BOARD,

COMMITTEES AND INDIVIDUAL DIRECTORS

During the financial year under review, formal annual evaluation of the Board, its committees and individual Directors was carried out at the Board meeting held on February 10, 2021.

The Nomination and Remuneration Committee specified the criteria for effective performance evaluation of the Board, its Committees and Individual Directors of the Company. The performance of the Board and Committees was evaluated after seeking inputs from all the Directors on the basis of the criteria such as Board/ Committee constitution, frequency of meetings, effectiveness of processes etc. The performance of individual Directors (including Independent Directors) was evaluated by the Board (excluding the Director being evaluated) after seeking inputs from all Directors on the basis of the criteria such as thought contribution, business insights and applied knowledge. Once the evaluation process is complete, the Nomination & Remuneration Committee reviews the implementation of the manner specified by it for performance evaluation & effectiveness of the process.

MEETINGS OF BOARD OF DIRECTORS

Seven (7) meetings of the Board of Directors of the Company were conducted during the financial year under review. The details of Board/Committees/Shareholder meetings are provided under the Corporate Governance Report which forms part of the Annual Report.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT

The details of loans, guarantees and investments made by the Company during the financial year under review which are covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

PARTICULARS OF RELATED PARTY TRANSACTIONS

All contracts/ arrangements/ transactions entered into by the Company during the financial year with related parties are in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Requisite approval of the Audit Committee and the Board (wherever required) was obtained by the Company for all Related Party Transactions.

There were no materially significant Related Party Transactions made by the Company with Promoters, Directors or Key Managerial Personnel, subsidiaries, joint ventures and associate Companies which may have a potential conflict with the interest of the Company. There are no transactions that are required to be reported in Form AOC-2, hence the said form does not form part of this report. However, the details of the transactions with Related Parties are provided in the Companys financial statements in accordance with Indian Accounting Standards.

The Company has a Policy on materiality of and dealing with Related Party Transactions, as approved by the Board, which is available on its website www.eichermotors.com.

AUDIT COMMITTEE

The Audit Committee of the Company is constituted pursuant to the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. At present, members of the Audit Committee are:

SI. No. Name of Members
1 Mr. S Sandilya (Chairman)
2 Mr. Siddhartha Lal
3 Ms. Manvi Sinha
4 Mr. Inder Mohan Singh

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors, employees, dealers and vendors of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys 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 Trading) Regulations, 2015. The Whistle Blower Policy of the Company is available at https://www.eicher.in/uploads/1581075167_whistle_blower_ policy.pdf

 

SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES

Highlights of performance of subsidiaries and joint venture Companies and their contribution to the overall performance of the Company during the year under review Royal Enfield North America Limited (RENA)

RENA was incorporated in March 2015 as a 100% subsidiary of Eicher Motors Limited to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares, apparels and accessories in North America. It sold 3,820 motorcycles (excluding 324 motorcycles sold to Royal Enfield Canada Limited, 100% subsidiary of RENA) during the year 2020-21 and achieved revenue of Rs. 141.82 crores (including revenue of Rs. 11.17 crores by sales to Royal Enfield Canada Limited). As of March 2021, RENA had contracted with 121 multi brand outlets in USA.

Royal Enfield Canada Limited (RECA)

RECA is a 100% subsidiary of RENA. RECA was incorporated in April 2016 in Canada to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares and gear in Canada. During the year 2020-21, the company sold 324 motorcycles and achieved revenue of Rs. 11.91 crores. As of March 2021, RECA had contracted with 13 multi brand outlets in Canada.

Royal Enfield Brasil Comercio De Motocicletas Ltda. (REBRA)

Royal Enfield started its operations in Brazil through a direct distribution company by the name of Royal Enfield Brasil Comercio de Motocicleta LTDA in 2016. Over 4 years, the company has grown by an average of 50% year over year. During the year 2020-21, the company sold 2,718 motorcycles and achieved a revenue of Rs. 46.86 crores.

Royal Enfield (Thailand) Ltd (RETH)

Royal Enfield (Thailand) Ltd. was incorporated on September 18, 2018 and commenced sales operations from September 2019. The Companys footprints have grown to 15 exclusive stores, 3 studio stores and 15 authorized sales & service points. In the year 2020-21, the company received two awards from the Grand Prix group for Meteor being the "Best Modern Classic" and Himalayan being "Best Lightweight Tourer" motorcycle. During the year 2020-21, the company sold 2,373 motorcycles and achieved revenue of Rs. 98.75 crores.

Royal Enfield (UK) Limited (REUK)

Royal Enfield UK Ltd, was incorporated in August, 2019 and commenced sales operations from June 2020. The companys footprints have grown to 8 exclusive stores and 52 Authorized Sales & Service Points. In the year 2020-21, the company received 2 awards from the Motorcycle News for Interceptor being the "Best Retro of the year for 2019 and 2020". During the year 2020-21, the company sold 1,740 motorcycles and achieved revenue of Rs. 42.74 crores.

Eicher Polaris Private Limited (EPPL)

Eicher Polaris Private Limited, a joint venture company, was involved in manufacturing and sales of personal utility vehicles.

The Board of Directors and Shareholders of EPPL at their respective meetings held on February 18, 2020 approved voluntary liquidation (solvent liquidation) of EPPL and appointed an insolvency professional as the liquidator. The liquidation process is under progress currently.

VE Commercial Vehicles Limited and its step-down subsidiaries

Overview of performance covered separately in the Annual Report.

Report containing salient features of financial statements of subsidiaries and joint venture Companies

Pursuant to the provisions of Section 129(3) of the Act, a report containing salient features of the financial statements of the Companys subsidiaries and joint venture Company in Form AOC-1 is attached as Annexure-2.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE COMPANYS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR

No Company has become or ceased to be the Companys subsidiary, joint venture or associate company during the financial year 2020-21.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANYS OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. However, members attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee and has framed a Corporate Social Responsibility Policy and identified Local Area Development, Social Mission (Responsible Travel) and Road safety, as themes which will be given preference while formulating Annual Actions Plans. The Company will continue to support social projects that are consistent with the Policy.

Corporate Social Responsibility Committee of the Company is constituted as follows:

1. Mr. S Sandilya Chairman

2. Mr. Siddhartha Lal

3. Mr. Inder Mohan Singh

4. Ms. Manvi Sinha

During the year under review, the Board at its Meeting held on March 31, 2021, appointed Ms. Manvi Sinha, Non-Executive Independent Director as Member of the Corporate Social Responsibility Committee.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared by the Company in accordance with the requirements of Indian Accounting Standard ("Ind AS")-110 "Consolidated Financial Statements" and Ind AS 28 "Investment in Associates and Joint ventures", prescribed under Section 133 of the Companies Act, 2013, read with the rules issued thereunder. The consolidated financial statements are provided in the Annual Report. A statement containing the salient features of the financial statements of each of the subsidiary and joint venture company in the prescribed Form AOC-1 is attached.

Pursuant to Section 136 of the Act, the financial statements, consolidated financial statements and separate accounts of the subsidiaries are available on the website of the Company at www.eichermotors.com. The Company shall provide the copies of the financial statements of the Company and its subsidiary Companies to the shareholders upon their request received on investors@eichermotors.com. The consolidated total Comprehensive income of the Company and its subsidiaries amounted to Rs. 1,381.24 crores for the financial year 2020-21 as compared to Rs. 1,838.62 crores for the previous financial year 2019-20.

 

Auditors

(a) Statutory Auditors and Their Report

M/s S.R. Batliboi & Co., LLP, Chartered Accountants (Firm Registration Number: FRN 301003E/E300005) were appointed as Statutory Auditors in the 35th (Thirty Fifth) Annual General Meeting (AGM) of the Company for a period of five years, from the conclusion of 35th AGM till the conclusion of the 40th AGM of the Company, subject to ratification of their appointment at every AGM by the shareholders, if required pursuant to the provisions of the Companies Act, 2013 ("Act").

Central Government vide the Companies (Amendment) Act, 2017 has amended the provisions of Section 139 of the Act and ratification of appointment of Statutory Auditors in every AGM is no longer required. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules made thereunder to continue to act as Statutory Auditors of the Company.

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31, 2021 pursuant to the provisions of the Act. The reports of Statutory Auditors form part of the Annual Report. The reports are self-explanatory and do not contain any qualifications, reservations or adverse remarks. The Statutory Auditors had not reported any fraud under Section 143(12) of the Companies Act, 2013.

(b) Secretarial Auditors and Their Report

The Board of Directors has appointed M/s. Shweta Banerjee & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year ended March 31, 2021. As required under Section 204 of the Companies Act, 2013, the Secretarial Audit Report is annexed as Annexure-4 to this Report. The Secretarial Auditors Report is self-explanatory.

One of the observations made by the Secretarial Auditor in its report is not conducting the Risk Management Committee meeting by the Company during the financial year 2020-21. Response on the above observation is as follows:

 

The process of risk prioritisation and mitigation has been presented, discussed and reviewed at the Board level regularly at meetings attended by the Committee members. Various measures have been adopted as outcome of such discussions, a comprehensive risk inventory drawn, mitigation framework being designed, Centre of Excellence Internal Controls set up etc. While a separate meeting exclusively of the members of the Risk Management Committee has not been held in the relevant period during the financial year ended March 31, 2021, its members have been actively involved in fulfilling the terms of reference. Furthermore, given the fact that review of industrial operations is considered key, holding a meeting / review of such operations has been a challenge in the wake of Covid crisis and travel restrictions (and risks associated with it).

Further, pursuant to provisions of Regulation 24A of the SEBI (LODR) Regulations, 2015, VE Commercial Vehicles Limited (VECV) is a material subsidiary of the Company in terms of Regulation 16(1)(c) of the SEBI (LODR) Regulations, 2015. The Secretarial Audit Report submitted by the Secretarial Auditors of VECV is also annexed as Annexure-5to this Report.

(c) Cost Auditor

In terms of Section 148 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, it is hereby confirmed that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

M/s. Jyothi Satish & Co, a qualified Cost Accountant Firm (Firm registration No. 101197), has been appointed as the cost auditor to carry out audit of the cost records of the Company for the financial year 2020-21 pursuant to the provisions of the Companies Act, 2013. The Cost auditor shall submit its report to the Board of Directors within the time prescribed under the Companies Act, 2013 and the rules made thereunder.

CORPORATE GOVERNANCE, MANAGEMENT DISCUSSION & ANALYSIS AND BUSINESS RESPONSIBILITY REPORTS

As per SEBI (LODR) Regulations, 2015, Corporate Governance Report together with the Auditors certificate regarding compliance of conditions of Corporate Governance, Management Discussion & Analysis Report and Business Responsibility Report form part of the Annual Report.

INTEGRATED REPORT

The Company voluntarily has prepared an Integrated Report this year which will help stakeholders to understand the Companys economic, environmental, social and governance performance more effectively and analyzing the financial and non-financial performance of the Company. With this, stakeholders shall also have a better understanding of the Companys long term perspective. The report is available on the website of the Company at www.eichermotors.com.

ANNUAL RETURN

The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company and the weblink for the same is https://www.eicher.in/uploads/1626338501_form_ mgt-7-2020-21.pdf

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the Annual Financial Statements for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note no. 3 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profits of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) that the Annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively; and

f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEES

Disclosures as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

1) Ratio of the remuneration of each director to the median remuneration of the employees of the Company and the percentage increase in remuneration of Directors & KMPs in the financial year:

Sl. No. Name of the Director/ KMP Designation Ratio of Remuneration of each Director to median Remuneration of Employees Percentage Increase in Remuneration for FY 2020-21 over FY 2019-20
1. Mr. S Sandilya Chairman & Non-Executive Independent Director 11.1 10.51
2. Mr. Siddhartha Lal Managing Director 340.3 9.97
3. Mr. Vinod K. Dasari Whole-time Director and CEO-Royal Enfield 404.2 1.88
4. Mr. Inder Mohan Singh Non-Executive Independent Director 2.8 12.03
5. Ms. Manvi Sinha Non-Executive Independent Director 2.8 6.74
6. Mr. Kaleeswaran Chief Financial Officer - NA*
Arunachalam
7. Mr. Manhar Kapoor General Counsel and Company Secretary - 7.55

*Percentage increase in remuneration for FY 2020-21 over FY 2019-20 not applicable since Mr. Kaleeswaran Arunachalam was appointed as Chief Financial Officer Note: Mr. Vinod K. Aggarwal, Non-Executive Director, is not entitled for any remuneration by way of sitting fees or commission or otherwise, in the Company.

2) Percentage increase in the median remuneration of the employees in the financial year: 1%

3) Number of permanent employees on the rolls of Company as at March 31, 2021: 5,005 employees.

4) The average increase in median remuneration of the employees other than managerial personnel was

1% as compared to the increase in the managerial remuneration by 2%.

5) It is hereby affirmed that the remuneration is paid as per the Remuneration Policy of the Company.

Further, a statement containing particulars of top ten employees in terms of the remuneration drawn and employees drawing remuneration in excess of the limits set out in Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided as part of the Directors Report. However, in terms of provisions of Section 136 of the said Act, the Annual Report is being sent to all the members of the Company and others entitled thereto, excluding the said statement. Any member interested in obtaining such particulars may write to the Company Secretary at investors@eichermotors.com.

RISK MANAGEMENT

Requisite information is provided under Management

Discussion and Analysis Report which forms part of the Annual

Report.

CoMpLIANCE oF SECRETARIAL STANDARDS

During the financial year under complied with applicable Secretarial Standards specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Companies Act, 2013.

SEXUAL HARASSMENT oF WoMEN AT WoRKpLACE (pREVENTIoN, pRoHIBITIoN AND REDRESSAL) ACT, 2013

Requisite information is provided under Corporate

Governance Report which forms part of the Annual Report.

ACKNoWLEDGEMENT

We thank our customers, business associates and bankers for their continued support during the financial year.

We wish to convey our deep appreciation to the dealers of the Company for their achievements in the area of sales and service, and to suppliers/ vendors for their valuable support.

We also place on record our sincere appreciation for the enthusiasm and commitment of the Companys employees for the growth of the Company and look forward to their continued involvement and support.

For Eicher Motors Limited
Siddhartha Lal S. Sandilya
Managing Director Chairman
DIN: 00037645 DIN: 00037542
Place: London, UK Place: Chennai, Tamil Nadu
Date: May 27, 2021