jtekt india ltd share price Directors report


TO THE MEMBERS,

Your Directors have pleasure in presenting their 39 Annual Report together with audited accounts of the Company for the year ended 31 March 2023.

1) Financial Results

STANDALONE AND CONSOLIDATED PERFORMANCE OF THE COMPANY

(Amount in INR /Lakhs)

Particulars Standalone Consolidated
Current Year 31.03.2023 Previous Year 31.03.2022 Current Year 31.03.2023 Previous Year 31.03.2022
Total Income 2,08,578 1,62,084 2,05,249 1,59,903
Profit before interest, depreciation & tax 17,518 11,479 19,212 13,079
- Interest 472 367 474 373
- Depreciation & write offs 6,762 6,591 7,320 7,088
Profit before share of profit of Associates 10,284 4,520 11,418 5,618
Profit before tax 10,284 4,520 11,418 5,618
Less : Provision for tax 2,621 1,694 3,063 2,013
Provision for deferred tax liability / (assets) (316 ) (487) (357 ) (507)
Profit after tax 7,979 3,314 8,712 4,112
Less : Share of profit transferred to minority - - 575 421
Profit for the year 7,979 3,314 8,137 3,691
Retained Earnings
Balance at the beginning of the year 39,528 36,583 42,043 38,713
Profit for the year 7,979 3,314 8,137 3,691
Payment of Dividend on equity shares (978) (367) (978) (367 )
OCI Transfer to Retained Earnings (63) (2) (65) 6
Balance at the end of the year 46,466 39,528 49,137 42,043

The consolidated financial statement is also being presented in addition to the standalone financial statement of the Company.

2) State of Affairs of the Company

The Company achieved revenue from operations of INR 2,07,324 lakhs during the year; with an increase of 29% compared to revenue achieved in the previous year.

The Company reported profit after tax of INR 7,979 lakhs, an increase of 141% compared to the previous year.

3) Capital Expenditure on tangible assets-standalone

This year, on standalone basis, we incurred a capital expenditure of INR 7,340 lakhs. This comprises:

• Building INR 409 lakhs.

• Plant and Machinery, jig & fixture etc. INR 6,096 lakhs.

• Office equipment and others INR 835 lakhs.

4) Dividend

Keeping in view the current year performance, your directors are pleased to recommend a dividend of INR 0.50 per equity share of the face value of INR 1/- each (@ 50%) out of profit for Financial Year 2022-23 resulting into distribution of sum of INR 1,222.40 lakhs towards dividend, payable to

those shareholders whose name appear in the Register of Members as on the date of book closure.

During the previous Financial Year dividend was paid at the rate of 40% on the equity share capital of the Company.

No interim dividend was declared by the Board of Directors during Financial Year 2022-23.

5) Reserves

(Amount in INR/ Lakhs)

Particulars 31 March 20231 31 March 2022
Balance as per last financial statements 39,528 36,583
Add: Profit for the year 7,979 3,314
Less: Appropriations
Dividend paid (978) (367)
Less : OCI Transfer to Retained Earnings (63) (2)
Net surplus in the statement of Profit and 46,466 39,528
loss account

6) Change of nature of Business

During the year there has been no change in the nature of Business of the Company.

7) Share Capital

As on 31 March 2023:

(a) the Authorized Share Capital of the Company is INR 87,10,00,000/- consisting of 87,10,00,000 nos. of Equity Shares of INR 1/- each; and

(b) the Issued, Subscribed and Paid-up Share Capital of the Company is INR 24,44,80,469/- consisting of 24,44,80,469 nos. of Equity Shares of INR 1/- each.

During the Financial Year 2022-23, there was no change in the Share Capital of the Company.

As on 31 March 2023, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

For details of dividend and shares transferred to Investor Education and Protection Fund (IEPF), please refer Corporate Governance Report.

8) Significant and material Orders passed by the Regulators or Courts

There are no significant or material Orders passed by the Regulators or Courts that would impact the going concern status of the Company and its future operations.

9) Material changes and commitments, if any, affecting the financial position of the Company

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which financial statements relate and the date of the report.

10) Details in respect of adequacy of internal controls

The Company has an effective and reliable internal control system commensurate with its size and operations. The internal controls are aligned to global standards and processes while also adhering to local statutory requirements. The internal control systems are supported through, management reviews, verification by internal auditors, as well as verification by the Statutory Auditors. Further, the Audit Committee of the Board reviews the internal audit plan, adequacy of internal control systems, significant audit observations and monitors the sustainability of remedial measures.

In addition to policies, procedures, and guidelines, the internal controls system is facilitated by an automated "Compliance Manager Toot", which enables self-assessment by process owners on status of att applicable regulatory compliances and Internal Controls including, controls relating to adherence to companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. The status of each setf-assessment is approved by an immediate superior. The status of setf-assessment is periodically detiberated and reviewed by the Senior Management. Further, the accuracy of sampte setf-assessments is verified through periodic internat audits.

The aforesaid internat controt systems provide high degree of assurance with respect to effectiveness and efficiency of operations, adequacy and adherence of internat financiat controts and comptiances with taws and regutations.

11) Details and Performance of Subsidiary Company

Company has one subsidiary namely JTEKT Fuji Kiko Automotive India Limited (JFIN).

The Company is hotding 51% of the Equity Capitat (i.e. 50,99,993 numbers of equity shares) in JFIN, which was estabtished in technicat and financiat cottaboration with JTEKT Cotumn Systems Corporation, Japan (formerty known as FUJI KIKO Co. Ltd.), with a business objective of manufacturing Cotumns / Cotumn parts to be primarity used in the manufacturing of C-EPS by the Company. The Ptant of JFIN is tocated in Bawat, Haryana. During the year ended 31 March 2023, JFIN has achieved totat revenue of INR 13,080.20 Lakhs and earned net profit of INR 1,172.59 Lakhs.

The Board of Directors of JFIN in their meeting hetd on 19 May 2023 have recommended the finat dividend 0 116.8% for the financiat year ended 31 March 2023.

Further, Board of the Company as wett as JFIN in their respective meetings hetd on Juty 6, 2022 have considered and approved the Scheme of Amatgamation proposing amatgamation of JFIN with the Company. The has atready received the Observation Letters from the Stock Exchanges and on the basis of the same, the Petition was fited before the Honbte Nationat Company Law Tribunat, Dethi Bench. According to the Orders dated 20 March 2023 read with 29 March 2023 and 28 Aprit 2023, the meetings of the Equity Sharehotders, Secured Creditors and Unsecured Creditors were hetd on 20 May 2023. Upon the Scheme of Amatgamation coming into effect JFIN witt merge with the Company atong with att its assets and operations from effective date of 1 Aprit 2022. This amatgamation witt bring production and operationat synergies and bring att steering manufacturing operations under the Company.

Further, the Company does not have any materiat subsidiary.

12) Subsidiary Company Accounts

During the year, the Board of Directors of the Company reviewed the affairs of the subsidiary company. In accordance with Section 129(3) of the Companies Act, 2013, the consotidated financiat statements of the Company forms part of the Annuat Report. Further, a statement containing the satient features of the financiat statement of the subsidiary company in the prescribed Form AOC-1 is attached atong with financiat statement. The statement atso provides the detaits of performance, financiat position of the subsidiary company.

In accordance with Section 136 of the Companies Act, 2013, the audited financiat statements, inctuding the consotidated financiat statements and retated information of the Company and audited accounts of its subsidiary company, are avaitabte on Companys website www.jtekt.co.in. These documents witt atso be avaitabte for inspection during business hours at Companys registered office. The Company shatt provide the copy of financial statements of its subsidiary company to the shareholders upon their request.

In accordance with the Accounting Standard AS-110 on Consolidated Financial Statements read with Accounting Standard AS-28 on Investment in Associates and Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report.

13) Extract of Annual Return

In accordance with the Companies Act, 2013, Annual Return in the prescribed format is available at Companys website www.jtekt.co.in/Annual-Return.aspx .

14) Corporate Social Responsibility

Your company considers CSR activities as an opportunity to make a long term positive impact on the society and forms this as an integral part of the philosophy and business activities of the Company. During the Financial Year 202223, the Company has contributed in the areas of healthcare including preventive healthcare, quality education and rural development.

The Company has always focussed to directly implement these projects in local areas after detailed assessment of the requirements of the community with the objective to derive maximum benefit from these activities. The Company has successfully implemented all the projects approved by the Corporate Social Responsibility Committee and the Board, within the current financial year and has spent an excess amount of INR 0.61 lakhs in addition to statutory requirement.

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and statutory disclosures with respect to the CSR Committee and an Annual Report on CSR Activities forms part of this Report as Annexure - I.

15) Number of meetings of the Board of Directors

The Board of Directors met 6 (six) times in the year ended 31 March 2023. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

16) Nomination & Remuneration Committee and its policy

The Board of Directors had constituted a Nomination & Remuneration Committee to review formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees and such other ancillary functions as may be required.

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 and is available on Companys website www.jtekt. co.in.

For details of remuneration paid to Directors, please refer Corporate Governance Report.

17) Particulars of contracts or arrangements with related parties

The Company has entered into contracts / arrangements with the related parties in the ordinary course of business and on arms length basis. Thus, provisions of Section 188(1) of the Companies Act, 2013 are not applicable.

All Related Party Transactions entered during the year were in the ordinary course of business and on arms length basis. During the year under review, your Company had also entered into certain material related party transactions but these transactions too were in the ordinary course of business and were at arms length basis. Details of these transactions, as required to be provided under section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2, appended as Annexure - II and forms part of this Annual Report.

However, in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), all transactions with related parties, which are of material in nature, are subject to the approval of the Members of the Company. The requisite resolutions in order to comply with the aforesaid requirements of Listing Regulations, were passed by the members of the Company by way of Postal Ballot on 18 October 2022. In view of the expected growth in the business of the Company, it is proposed to obtain a fresh approval of the shareholders for the material related party transactions as stated in the relevant resolutions, form part of the Notice of the 39 Annual General Meeting of the Company.

18) Auditors

(A) Statutory Auditors

Under Section 139 of the Companies Act, 2013 and the Rules made thereunder, BSR & Co. LLP, Chartered Accountants (Firm registration number 101248W/W- 100022) (BSR) was appointed as the Statutory Auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 38 Annual General Meeting of the Company held on 26 August 2022 till the conclusion of the 43 Annual General Meeting.

(B) Secretarial Audit Report

Pursuant to Section 204 of the Companies Act, 2013, the Company had appointed Mr. K.K. Singh, proprietor of KKS and Associates, Company Secretaries in practice, as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2022-23. The Company provided all assistance and facilities to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the FY 2022-23 is annexed to this report as Annexure - III. The report does not contain any qualification.

(C) Audit Reports

1. The Auditors Report for financial year 2022-23 does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with the financial statements in this Annual Report.

2. The Secretarial Auditors Report for financial year 2022-23 does not contain any qualification, reservation or adverse remark.

3. As required by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as Listing Regulations), the Practicing Company Secretarys Certificate on corporate governance is enclosed to the Boards Report. The Practicing Company Secretarys Certificate for financial year 2022-23 does not contain any qualification, reservation or adverse remark.

19) Reporting of frauds by auditors

During the year under review, none of the auditors has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

20) Risk Management

The Board of Directors of the Company had constituted a Risk Management Committee to oversee the risk management process in the Company.

The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and mitigate both business and non-business risks. The Risk Management Committee periodically reviews the risks and suggests the steps to be taken to identify and mitigate the same through a properly defined framework.

For details pertaining to Risk Management Committee, please refer to the Corporate Governance Report.

21) Corporate Governance

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and as stipulated under the Listing Regulations. A separate section on corporate governance under the Listing Regulations, along with a certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report.

22) Business Responsibility & Sustainability Report

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report" (BRSR). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct (NGRBCs). As per the SEBI Circulars, effective from the financial year

2022-23, filing of BRSR is mandatory for the top 1000 listed companies by market capitalization. Accordingly, Business Responsibility & Sustainability Report for the financial year ended 31 March 2023, is annexed as Annexure - IV and forms an integral part of the Annual Report.

23) Vigil/Whistle Blower Mechanism

The Company has established a vigil/whistle blower mechanism for Directors and employees to report their genuine concerns. For details, please refer to the Corporate Governance Report attached to this Annual Report.

24) Listing

The Securities of your Company are listed at National Stock Exchange of India Limited and BSE Limited and the Company has paid the Listing Fee due to them.

25) Deposits

During the year the Company has no deposits covered under Chapter V of the Companies Act, 2013.

26) Loans, Guarantees and Investments

During the year under review, no loans, guarantees and investments were made by the Company under Section 186 of the Companies Act, 2013, hence the said provision is not applicable. For details pertaining to other loan given, guarantees provided, security provided and investment made please refer to the Financial Statement for financial year 2022-23.

27) Directors & Key Managerial Personnel

As on 31 March 2023, your Company has ten (10) Directors consisting of five (5) Independent Directors (including one Woman Director), three (3) Executive Directors and two (2) Non-Executive Directors.

During the year :

• Mr. Akihiko Kawano, rescinded from the position of Dy. Managing Director as well as Director of the Company with effect from the close of working hours of 30 April 2022;

• The nomination of Mr. Toshiya Miki was withdrawn by Maruti Suzuki India Limited from the Board of the Company, effective from the close of business hours of 31 May 2022; and

• Mr Sudhir Chopra, completed his tenure as Executive Vice Chairman as well as Director of the Company effective from the close of business hours of 31 May 2022.

Further, during the year :

• Mr. Satoshi Komeda was appointed as an Additional Director, in the capacity of Director (Operations), with remuneration, effective from 1 June 2022, whose appointment was confirmed by the shareholders of the Company at 38 Annual General Meeting held on 26 August 2022;

• Mr. Taku Sumino was appointed as an Additional Director in the capacity of Non-Executive Director, as Nominee of Maruti Suzuki India Limited, effective from 1 June 2022, whose appointment was confirmed by the shareholders of the Company at 38 Annual General Meeting held on 26 August 2022; and

• Mr. Rajiv Chanana, was appointed as an Additional Director in the capacity of Director & CFO, with remuneration, effective from 1 June 2022, whose appointment was confirmed by the shareholders of the Company at 38 Annual General Meeting held on 26 August 2022.

In terms of the definition of Independence of Directors as prescribed under the Listing Regulations and Section 149(6) of the Companies Act, 2013 the Company has received declarations from the following Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Listing Regulations:

1) Mr. Inder Mohan Singh

2) Lt. Gen. Praveen Bakshi (Retd.)

3) Mr. Hidehito Araki

4) Mrs. Hiroko Nose

5) Mr. Masahiko Morimoto

Your Directors take this opportunity to place on record the appreciation of services rendered by Mr. Akihiko Kawano as Dy. Managing Director, Mr. Sudhir Chopra as Executive Vice Chairman and Mr. Toshiya Miki as Non-Executive Director of the Company.

Pursuant to the provisions of Section 152(6) read with the Articles of Association of the Company, Mr. Taku Sumino (DIN: 09608944) will retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

For further details, pertaining to Board Meetings, please refer to the Corporate Governance Report.

As on March 31, 2023, following are the Key Managerial Persons (KMPs) of the Company:

1. Mr. Hitoshi Mogi, Chairman & Managing Director (Executive Director)

2. Mr. Rajiv Chanana, Director & CFO

3. Mr. Ashish Srivastava, Company Secretary (Resigned w.e.f. 5 April 2023)

On 22 May 2023, the Board appointed Mr. Saurabh Agrawal as Company Secretary and Compliance Officer of the Company.

28) Board Evaluation

The Company has devised a Policy for performance evaluation of Independent Directors, the Board, its Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors.

The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation.

Based on the questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee.

Further, in accordance to the Board Performance Evaluation Policy, the Board carried out annual performance evaluation of Independent Directors. The Independent Directors carried out annual performance evaluation of Non independent Directors and Board as a whole.

29) Committee of Directors

For composition and other details pertaining to the Committee of Directors, please refer to the Corporate Governance Report.

30) Directors Responsibility Statement

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the directors confirm that:

a) in the preparation of the annual accounts for the financial year 2022-23, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) 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 2022-23 and of the profit of the Company for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the directors have prepared the annual accounts on a going concern basis;

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

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

31) Secretarial standards

The Company complies with all applicable secretarial standards.

32) Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

A statement containing the necessary information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be given pursuant to provisions of Section 134 of the Companies Act, 2013, read with the rules made thereunder is annexed as Annexure - V and forms part of this report.

33) Managements discussion and analysis

In terms of the provisions of Regulation 34 of the Listing Regulations, the Managements discussion and analysis is set out in this Annual Report.

34) Employees

Disclosure pertaining to remuneration and other details 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, are provided in Annexure - VI(a) to this Report.

A statement showing the details of employees of the Company who are drawing salary as per the limits prescribed under Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during the Financial Year 2022-23 or part thereof, is attached herewith as Annexure - VI(b) to this Report.

35) Disclosures pertaining to the Sexual Harassment of women at the work place (prevention, prohibition and redressal) Act, 2013

For details pertaining to the Sexual Harassment of women at the work place (prevention, prohibition and redressal) Act, 2013, please refer Corporate Governance Report.

36) General

During the year, there being no transactions with respect to following items during the year under review, no disclosure or reporting is required in respect of the same:

a. Issue of equity shares with differential rights as to dividend, voting or otherwise.

b. Issue of shares (including sweat equity shares) to employees of your Company under any scheme.

c. Neither the Managing Director nor the Wholetime Director of your Company receive any remuneration or commission from any of its subsidiaries.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

e. Buy-back of shares.

f. No application was made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016.

g. No settlements have been done with banks or financial institutions.

37) Acknowledgements

Your Directors acknowledge with gratitude the co-operation and support extended by the Companys customers namely Maruti Suzuki, Suzuki Motor Gujarat, Toyota Kirtoskar, Mahindra & Mahindra, Tata Motors, Honda Cars India, Stellantis (FIAT+PCA), Club Car, E-z-go, Renault-Nissan, Isuzu, SML-Isuzu and Force Motors, the Financial Institutions, Banks, and various agencies of the Government.

Your Directors also wish to place on record their sincere appreciation of the services rendered by all the employees of the Company and are thankful to the Shareholders for their continued patronage.

For and on behalf of the Board
Hitoshi Mogi
Place : Gurugram Chairman & Managing Director
Dated : 22 May 2023 [DIN 08741355]