Lumax Auto Technologies Ltd Directors Report.

Dear Members,

Your Directors with immense pleasure present the 37th Annual Report of Lumax Auto Technologies Limited ("Company") on the business and operations together with Audited Balance Sheet and Statement of Profit & Loss of your Company for the year ended March 31, 2018.

The Key highlights of Financial Performance of your Company for the year along with previous year figures are as follows:

I. Financial Performance
(RsIn Lacs)
Particulars Standalone Consolidated
2017-18 2016-17 2017-18 2016-17
Revenue from Operations 60,750.77 52,149.66 1,13,851.32 1,03,969.72
Other Income 1,499.47 387.54 1,524.30 1,049.93
Total Income 62,250.24 52,537.20 1,15,375.62 1,05,019.65
Total Expenses 57,966.73 51,460.86 1,06,500.65 99,398.87
Profit Before Tax, Share in Net Profit of associate, 4,283.51 1,076.34 8,874.97 5,620.78
Exceptional Item
Profit of Associate - - (61.53) 292.45
Exceptional items (227.50) (322.41) (227.50) (319.11)
Profit before Tax 4,056.01 753.93 8,585.94 5,594.12
Tax Expenses 1,134.24 214.85 2,874.71 1,586.19
Minority Interest - - 836.86 558.12
Profit for the period (After Tax and Minority Interest) 2,921.77 539.08 4,874.37 3,449.87
Other Comprehensive Income 4,060.13 5,010.24 4,062.27 5,011.57
Equity holders of the parent - - 4,059.02 5,007.99
Non- controlling interests - - 3.25 3.58
Total Comprehensive Income 6,981.90 5,549.32 9,773.50 9,019.50
Equity holders of the parent - - 8,933.39 8,457.80
Non- controlling interests - - 840.11 561.70
Paid-up Equity Share Capital 1,363.15 1,363.15 1,363.15 1,363.15
Earning Per Share (EPS) (not annualized) 21.43 3.96 35.76 25.31
Basic/Diluted EPS

Note: Financial Results for the year ended March 31, 2018 are prepared first time in accordance with Indian Accounting Standards (Ind AS) prescribed under Section 133 of The Companies Act, 2013, and previous year figures for the year ended March 31, 2017, have been regrouped / re-casted in accordance with Ind AS to make them comparable.

a. Company Performance

The Indian Automobile Industry being one of the largest in the world and accounting for 7.1 percent of the countrys Gross Domestic Product (GDP) is presently the second largest two-wheeler manufacturer and the fifth largest commercial vehicle manufacturer in the world.

During the Fiscal year 2017-18, the Indian Automobile Industry registered a production growth of 14.78 percent as compared to 5.41 percent over the same period last year. In this backdrop the Auto Component Industry posted an encouraging performance and grew by 14.30 percent as compared to the previous year. Currently, the Indian Auto Component Industry is contributing more than half of the average exports achieved by the Automotive Industry.

The total production by Automobile Industry for the financial year 2017-18 was 290.73 lacs vehicles and the contribution of each category of vehicles into the same is depicted graphically below:

In the above background and during the year under review, the performance of your Company is summarized as under:

Standalone Performance:

On standalone Basis the Company registered growth of 24 percent in Revenue from Operations which is over and above the Industry growth. For the Financial Year 2017-18 the Profit Before Tax (PBT) stood at Rs 4,056.01 Lacs and Profit After Tax (PAT) was recorded at Rs 2,921.77 Lacs witnessing a significant growth.

The growth was led by increased volumes of PCB manufacturing business, plastic moulded parts and sheet metal components of major Customers of the Company i.e. Bajaj Auto Limited (BAL), Honda Motorcycles & Scooters India Ltd. (HMSI) and Maruti Suzuki India Limited (MSIL).

Consolidate Performance:

On Consolidated Basis the Company achieved growth of 15 percent in Revenue from Operations. For the Financial Year 2017-18 the Profit Before Tax (PBT) stood at Rs 8,585.94 Lacs witnessing a significant growth of 53 percent. The Profit After Tax (PAT) after Minority Interest was recorded at Rs 4,874.37 Lacs recording the growth by 41 percent. The Basic and Diluted Earnings per share also grew by 41 percent. b. Dividend

Your Company maintained its commitment in delivering long-term sustainable growth and attractive Dividend to its Shareholders. The Board of Directors at their Meeting held on May 28, 2018 had approved payment of Dividend at the rate of 100 percent on Equity Share Capital of the Company which is subject to the approval of the Shareholders at the ensuing Annual General Meeting (AGM).

The proposed dividend will translate into Dividend at the rate of Rs 2/- (Rupees Two only) per Equity Share of the face value of Rs 2/- (Rupees Two only) each, after Sub – division of existing Equity Shares of the Company in the ratio of 1:5 as on Record Date i.e. June 08, 2018.

The total amount of Dividend proposed to be distributed, amounts to Rs 1,410.01 Lacs (Including Dividend Distribution Tax) as against Rs 640.68 Lacs in the previous year. The Dividend pay - out ratio comes to 48.26 percent.

c. Subsidiaries and Associate Companies & Consolidated Financial Statements

As per Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations"), applicable provisions of the Companies Act, 2013 and Ind AS 110, the Audited Consolidated Financial Statements are provided in the Annual Report of the Company.

As on March 31, 2018, the Company comprised of seven (7) Subsidiaries; five (5) being direct Subsidiaries & two (2) are Step-down Subsidiary and two (2) Associates Companies. The details of the Subsidiaries and Associates along with highlights of their performance are as follows:

Subsidiaries:

Lumax DK Auto Industries Limited (LDK)

LDK is a 100 percent Subsidiary of the Company is engaged in manufacturing of lights and plastic modules. The Revenue of the Company stood at Rs 34,991.07 Lacs.

Lumax Management Services Private Limited (LMS)

LMS is a 100 percent Subsidiary of Company. The Company had emerged as a full-time service provider in form of Corporate Support Services to its Group Companies. The Revenue of the Company Stood at Rs 2,472.04 Lacs as on March 31, 2018.

Lumax Integrated Ventures Private Limited (LIVE)

LIVE is a 100 percent Subsidiary of the Company. The Company was established for manufacturing of Non - Automotive Parts. LIVE has two (2) Subsidiaries Lumax Energy Solutions Private Limited and Velomax Mobility Private Limited. The Consolidated turnover of the LIVE for the Financial Year 2017 -18 stands for Rs 197.95 Lacs.

Lumax Mannoh Allied Technologies Limited (LMAT)

LMAT is 55 percent Subsidiary formed in collaboration with Mannoh Industrial Co. Ltd., Japan. The entity manufactures Gear Shifters and Parking Brakes. The Company has a market leadership position within this segment with approximately 60 percent market share in India. During the year, the Company received new order for supplying the Gear Shifter to Toyota Yaris. The Companys Revenue stood at Rs 13,586.18 Lacs. The Company has also set up new Manufacturing facility at Surender Nagar, Gujarat for supplying Gear Shifter to Suzuki Motors.

Lumax Cornaglia Auto Technologies Private Limited (LCAT)

LCAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited (LATL) and Cornaglia S.p.A. Italy having management control by LATL. The JV Company manufactures air intake systems as well as other plastics injection blow moulded parts. The Companys Revenue stood at Rs 4,877.34 Lacs.

Associates:

Lumax Gill – Austem Auto Technologies Private Limited (LGAT)

LGAT is a 50:50 Joint Venture between Lumax Auto Technologies Limited and Gill-Austem LLP, USA. The JV Company manufactures seat frames and seat mechanisms. The current year Revenue stood at Rs 6,286.01 Lacs.

Lumax Sipal Engineering Private Limited is an Associate Company of Lumax Integrated ventures Private Limited.

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 a report on performance and financial position of Subsidiaries, Associate Companies are presented in notes to Consolidated Financial Statements.

Further, in accordance with the provisions of Section 136 (1) of the Companies Act, 2013, 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 and the same shall also be made available for inspection at registered office of the Company during the working hours.

II. State of Companys Affairs

During the year under review, the Company underwent through a series of critical developments and changes influencing its operations, business activities, corporate governance practices etc. Yet it continued to reinforce its position in the market and derived sustainable benefit due to its strong foundation and its deeper integration with its subsidiaries and joint ventures.

In the course of the year, the Company unveiled its New Brand Identity on November 08, 2017, the new refreshed logo and the visual brand identity epitomises our journey and shall serve as the torchbearer of future growth and aspirations, it also rearticulated the Group Purpose and Vision.

The year 2017-18 was marked by the most ambitious tax reform since Independence i.e. Implementation of Goods and Services Tax (GST) and the Company continued to maintain its momentum in managing it efficiently and effectively. Another major development confronting the Company was transition to Indian Accounting Standards (Ind AS) from Indian GAAP which was smoothly implemented by the Company and there were no significant impacts on Financial Statements of the Company.

During the year, the Company had sold its bulbs and wire manufacturing unit situated in Kale-Amb, Himachal Pradesh, to one of its Group Company viz. Lumax Ancillary Limited on Slump-Sale basis. The said unit was expected to contribute towards the growth of Aftermarket Division of the Company through supply of auto bulbs and electrical components. However, in view of insignificant contribution of the said unit towards the Aftermarket Division and for the overall benefit of the Company it was considered prudent to sell this unit.

The 2nd Quarter of the Fiscal Year was quiet eventful for the Company, it had established two (2) Joint Ventures with Fransisco Albero S.A.U (FAE) Spain and Ituran Location and Control Limited Israel:

As the Country takes a leap from BS-IV to BS-VI emission norms, the huge demand for Oxygen Sensors is projected. Thus, with a futuristic vision and much before the mandatory enforcement of BS-VI, a Joint Venture with Francisco Albero S.A.U. (FAE), Spain was entered into to manufacture and supply Oxygen Sensors for Two-Wheeler Industry. The product is expected to significantly enhance the fuel efficiency of a vehicle and shall play a critical role in aligning with the BS-VI emission norms.

As a leading Automotive Component Manufacturer and keeping in line with technological progression in the Automotive Industry, it was natural for the Company to further enter into advanced technologies to provide world-class product and services. The Telematics products and services will address the growing menace of vehicle theft, and road accidents. For the Commercial Vehicles, the Telematics solutions will aid in determining vehicle downtime, fleet monitoring and reduce unauthorized use of vehicles.

The Company through its Subsidiaries and Associates, has been a manufacturer of wide range of products like Lighting Module, Frame Chassis, Swing Arms, Integrated Plastic Modules, Gear Shift Lever, Intake systems, Seat Frames & Mechanisms etc.

During the year under review the Company with its existing products basket has baged orders for new product launches by various OEMs such as Eicher, Honda, Nissan and Bajaj Auto etc.

The Company continues to drive growth to diversified product and added new product such as Trailing Arm and Swing Arm in two wheeler segment & received business from same from Bajaj Auto Limited.

The Company caters to the Aftermarket, majority of which is lighting systems. Aftermarket have also done well for us post the launch of the refurbished brand exercise and the change in marketing strategy which was well supported by the GST implementation. With the right efforts and initiatives already put in place for addition of new products under this division, the Company is extremely positive about growth from this business segment.

Owing to its commitment towards, continuous advancement towards Information Technology and SAP the Company upgraded to SAP S/4HANA in the Financial Year ending 2018. This will enhance the Companys journey towards complete digitalization as a way forward. Similarly, efforts towards integrating GST regime within the SAP framework was implemented and successfully making the Company - "SAP GST Compliant".

a. Adoption of Indian Accounting Standards (Ind AS)

In February 2015, Ministry of Corporate Affairs (MCA) notified the final roadmap on Ind AS with implementation in a phased manner to be complied by the specified class of companies effective from April 1, 2016. Post above notification Ind AS has replaced existing Indian GAAP prescribed under Section 133 of The Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 according to applicability on specified entities. Accordingly, this is first year when the Companys financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind AS and the financial statements for the year ended March 31, 2017 and opening Balance Sheet as at April 1, 2016 (the Companys date of transition) earlier reported in previous IGAAP, have been restated in accordance with Ind AS to make them comparable.

Accordingly, the impacts of transition to Ind AS are given in detail in the Standalone and Consolidated Financial Statements.

b. Goods and Services Tax (GST) – Implementation and Impact

The year 2017-18 saw the roll out of the Goods and Services Tax (GST) compliance, the biggest tax reform in the history of Independent India which was applicable with effect from July 1, 2017. GST is expected to bring in efficiencies in the system by improving the ease of doing business, streamlining the regulatory structure, removing multiple taxes and digitization of the tax collection mechanism thereby leading to an improved business environment.

Although, alike all other industries, the implementation of GST was a minor hiccup, yet the Company has been able to successfully acknowledge the same without any disruption. In coming years, the overall effect of GST is expected to be beneficial for the Company along with increased and better tax compliance.

c. Change In Capital Structure

The Board of Directors in its Meeting held on March 23, 2018 approved the Sub-Division of One (1) Equity Share having face value of Rs 10/- each fully paid-up into Five (5) Equity Shares having face value of Rs 2/- each followed by approval of Shareholders sought by way of Postal Ballot, the results of which were declared on May 08, 2018.

Post the approval of above proposal by Shareholders the Issued, Subscribed and Paid up Equity Share Capital of the Company would remain same i.e. Rs 13,63,15,410/- (Rupees Thirteen Crores Sixty Three Lacs Fifteen Thousand Four Hundred Ten only) divide into 6,81,57,705 (Six Crores Eighty- One Lacs Fifty Seven Thousand Seven Hundred Five) Equity Shares of Rs 2/- each.

d. Amendment of Memorandum and Articles of Association of the Company

In order to give effect to the above proposal of Sub- Division of Equity Shares of the Company, the Board in its Board Meeting dated March 23, 2018 also approved the proposal for Amendment of Memorandum and Articles of Association of the Company (MOA & AOA). Accordingly, the following changes were made to the existing MOA & AOA of the Company:

1. Alteration of ‘Capital Clause - V of the Memorandum of Association of the Company.

2. Alteration of ‘Article 4 (a) – Share Capital in Articles of Association of the Company.

The above amendments were also approved by Shareholders through Postal Ballot, the results of which were declared on 8th May 2018.

e. Capacity & Facility Expansion

During fiscal 2017-18 the Company has initiated steps for capacity enhancement with a view to strengthen its existing customer base and accordingly shall be shifting its PCNTDA manufacturing facilities to bigger premises in Chinchwad, Pune for manufacturing of Swing Arm Assembly. The new facility is expected to be operational by August 2018.

Similarly, in Aurangabad, the Company is expanding its existing business facilities to a new and better location for manufacturing & assembly of various fabricated components for two wheeler. This new business is expected to be operational by October 2018.

f. Quality Initiatives

Your Company strives to be a supplier of choice across all its customers and is always committed to develop and design new products, in line with its strategy towards delivering competitive advantage to the customers. In the said perspective, Total Productive Maintenance (TPM) has been successfully implemented across all plants of the Company to create a culture and environment which continuously improves quality, cost and delivery parameters. The Unit at K-76, Aurangabad has received Quality Gold award from Bajaj Auto Limited for maintaining PPM below 1000 in last 24 months. The other Units also received awards for Quality initiatives in various forums of Quality Circle Forum of India (QCFI) and BAVA / KAIZEN Competition, ACMA Kaizen Competition etc. In addition, the Quality Control Circle (QCC) programs are an integral part across plants of the Company. By implementing these various initiatives, improvement of Quality is willingly carried out by employees in true spirit, resulting in minimizing rejection and cost cutting. g. 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 an

Annexure – A.

h. Change in the Nature of Business, if any

There was no change in the nature of business of the Company during the Financial Year ended March 31, 2018.

III. Governance and Ethics a. Corporate Governance

The report on Corporate Governance together with the Auditors Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed and forms part of this Annual Report as an Annexure – B.

b. Directors & Key Managerial Personnel including those who were appointed or have resigned during the Year

APPOINTMENTS

On recommendation of the Nomination and Remuneration Committee, The Company in its Board Meeting held on December 04, 2017, had appointed –

Mr. Sanjay Mehta (DIN: 06434661) as an Additional Director, liable to retire by rotation, which is subject to his regular appointment in the ensuing Annual General Meeting (AGM). Mr. Sanjay Mehta, is Chartered Accountant and Company Secretary by qualification. He is associated with the D K Jain Group since last 10 Years. He has rich experience of 26 years in Corporate Accounts and Finance. He is looking after Strategy planning, developing and implementing plans within timeframe as per the budget goals by creating and funding sustainable, profitable growth of the Company.

Mrs. Diviya Chanana (DIN: 00737160) as an Additional Director to be designated as an Independent Director for a period of 5 years, not liable to retire by rotation, w.e.f December 04, 2017 which is subject to her appointment in the ensuing AGM. Ms. Diviya Chanana is a Graduate and Diploma holder in Travel and Tourism and has over 15 years of rich experience in the said field.

The resolutions for above said appointments are duly contained in the Notice of AGM.

RE-APPOINTMENTS

Mr. D.K. Jain (DIN: 00085848) will be completing his present tenure as Executive Chairman of the Company on August 06, 2018. On the recommendation of the Nomination and Remuneration Committee, the Board in its Meeting held on May 28, 2018 has Re-appointed him as Executive Chairman of the Company for a further term of five (5) years. The said appointment is subject to the approval of Shareholders in the ensuing AGM and the appropriate resolution is contained in the Notice of AGM.

Mr. Anmol Jain (DIN: 00004993) shall also be completing his present tenure as Managing Director of the Company on August 06, 2018. The Board, on recommendation of Nomination and Remuneration Committee, in its Meeting held on May 28, 2018 had approved the Re-appointment for a further term of 5 years which is further subject to the approval by Shareholders in the ensuing AGM and the appropriate resolution is contained in the Notice of AGM.

In accordance with the Articles of Association of the Company and Section 152 of the Companies Act, 2013, Mr. Deepak Jain (DIN: 00004972), Director of the Company will retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends his re-appointment.

CESSATIONS

During the year, Mrs. Usha Jain (DIN: 00005009), Non- Executive Director, ceased to be Director of the Company w.e.f. December 04, 2017. The Board of Directors place on record its appreciation towards her contributions during her tenure as Director of the Company.

Mr. Sandeep Dinodia (DIN: 00005395), Independent Director on the Board of the Company, ceased to be Director of the Company w.e.f. May 28, 2018. The Board of Directors place on record its appreciation towards his contributions during his tenure as an Independent Director of the Company.

c. Statement on Declaration given by Independent Directors

In compliance with the provisions of Section 149 (6) of The Companies Act, 2013 requisite declarations have been received from the Independent Directors regarding meeting the criteria of Independence.

d. Number of Board Meetings and Committees of Board

The Board of Directors met five (5) times during the Financial Year under review viz. May 15, 2017, August 30, 2017, December 04, 2017, February 12, 2018 and March 23, 2018. The maximum gap between any 2 meetings did not exceed 120 days.

A separate Meeting of Independent Directors was also conducted on 15th March 2018, without the presence of Non- Independent Directors and Management. The details on Attendance during the Board Meetings and other Committee Meetings of Board of Directors are provided in Corporate Governance Report which forms part of the Directors Report as an Annexure B.

e. Board Diversity and Policy on Directors Appointment and Remuneration

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board will be able to leverage different skills qualifications professional experiences perspectives and backgrounds which is necessary for achieving sustainable and balanced development. The Board has adopted a policy on Nomination, Remuneration and Board Diversity which sets out the criteria for determining qualifications, positive attributes and independence of a Director.

The main features of the Policy are as follows –

1. Purpose

2. Objectives

3. Applicability & Accountability

4. Responsibility of Nomination & Remuneration Committee

5. Matters relating to appointment and remuneration of Directors

6. Remuneration to Independent Directors

7. Remuneration to other Employees

8. Term & Tenure

The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, Directors qualifications, positive attributes, independence of Directors and other related matters is enclosed to this Board Report as an Annexure C.

f. Performance Evaluation of Board, Committee And Directors

In accordance with applicable provisions of the Act and Listing Regulations, the evaluation of the Board as a whole, Committees and all the Directors was conducted, 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 evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors functioning.

EVALUATION TECHNIQUE

The evaluation methodology involves completion of questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.

The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management etc.

The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations etc.

The performance of Non- Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes etc.

It also involves self-assessment by all the directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.

Further, the assessment of Chairmans performance is done by each Board Members on similar qualitative parameters.

EVALUATION OUTCOME

The feedback of the evaluation exercise and inputs of Directors were collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is put in place.

The Board as a whole together with each of its Committees was working effectively in performance of its key functions- Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when need arises. Comprehensive agendas are sent to all the Board Members well in advance to help them prepare and keep the meetings productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering all Business verticals, by way of presenting specific performance of each Plant, Product Category and Corporate Function from time to time.

The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day to day management of the business, with reference to the strategy and long term objectives.

The Executive Directors and Non-executive Directors provided entrepreneurial leadership to the Company within a framework of prudent and effective controls, with a balanced focus on policy formulation and development of operational procedures. It was acknowledged that the management a_orded sufficient insight to the Board in keeping it up-to-date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.

g. Related Party Transaction And Policy

All contracts/arrangements/transactions entered by the Company with Related Parties were in ordinary course of business and at arms length basis.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated by the Company. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of the Companies Act, 2013 and Listing Regulations, 2015.

The details of the Related Party Transactions as per IND AS - 24 are set out in Notes to the Financial Statements of the Company. The Company has formulated a policy on Related Party Transactions, which is available on the Companys website at http://www.lumaxautotech.com.

There were no materially significant Related Party Transactions entered into by the Company with Promoters, Directors or Key Managerial Personnel, which may have a potential conflict of interest for the Company, at large.

Pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 Form AOC-2 is set out in the Annexure – D of this

Report.

h. Compliance Management Framework

For monitoring and ensuring compliance with applicable laws by the Company and for establishing adequate management control over the compliances of all acts, laws, rules, regulations and regulatory requirements, the Company has adopted comprehensive Compliance Manual for structured control over applicable compliances by each of the units of the Company.

The Company has a practice of obtaining a Statutory Compliance Report on a monthly basis from various functional heads of respective units for compliance with laws applicable to them. A consolidated report on compliance with applicable laws is presented to the Board every quarter. To take care of the continuously evolving compliance scenario, the Company is constantly striving to strengthen the reporting system.

A separate corporate compliance management team periodically reviews and monitors compliances by units and supports in effective implementation of same in a time bound manner. The Board and Audit Committee along with Compliance team periodically monitors status of compliances with applicable laws based on quarterly certification provided by senior management.

i. Vigil Mechanism-Whistle Blower Policy

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 Listing 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. To further strengthen this mechanism, the Company has launched an Employee App which is available for both android and iOS users to facilitate easy expression of their opinions/suggestions/complaints.

j. Secretarial Standards

The Board of Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

k. 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 March 31, 2018, 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) that 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) that 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.

l. 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 an Annexure – E. 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.

m. Audit Committee & Composition

The composition of the Audit Committee is in alignment with provisions of Section 177 of the Companies Act, 2013 read with the Rules framed thereunder and Regulation 18 of the Listing Regulations, 2015.

The Audit Committee comprised of Mr. Sandeep Dinodia as Chairman, Mr. Roop Salotra, Mr. Milap Jain, Mr. Dhiraj Dhar Gupta and Mr. Anmol Jain as Director. Ms. Swapnal Patane acts as Secretary to the Audit Committee.

The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervises the Companys internal control processes, financial reporting and vigil mechanism.

All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.

IV. Internal Financial Controls and Adequacy

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 financial transactions is supported by a web-based system SAP Hana which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures at all levels of the organization.

a. Risk Management Policy

The Company has adopted an Enterprise Risk Management policy and established a risk management framework with an objective of timely identification, mitigation and control of 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 an internal 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.

b. Auditors i. Statutory Auditors

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.

In accordance with the Companies Amendment Act, 2017, enforced on May 07, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Statutory Auditors on the financial statement of the Company forms part of this Annual Report. The Auditor Report does not contain any qualification, reservation, adverse remark or disclaimer.

ii. Cost Auditors

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 2017-18.

The Cost Audit Report for the Financial Year 2016 -17 has been filed with the Central Government within the stipulated time on September 27, 2017.

iii. Secretarial Auditor

PursuanttotheprovisionsofSection204oftheCompanies 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 2017-18.

The Report of the Secretarial Auditor in the prescribed Form MR-3 is annexed herewith as an Annexure F. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

iv Internal Auditors

In compliance with the provisions of Section 138 of Companies Act, 2013, read with Companies (Accounts) Rules, 2014, your Company has appointed M/s Pricewaterhouse & Co LLP as Internal Auditors for the financial year 2017-18.

c. Details in Respect of Frauds Reported by Auditors under sub-section (12) of section 143 of The Companies Act, 2013 other than those which are Reportable to the Central Government:

There were no frauds which were reported by Auditors for the year under review.

V. Corporate Social Responsibility (CSR) Policy and Initiatives

Your Company is committed to grow and operate in a socially sustainable manner and continued to give back to society. A well-outlined CSR program creates social and environmental value thus impacting and improving the lives of communities. The key focus areas of your Company have been Education 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 enrollment of girl child providing a holistic learning environment, fees of children, E-learning program, 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.

Your Company endeavored to meet the budgeted expenditure in its CSR activities and has committed to incur expenditure for CSR initiatives, however, discontinuance of support to one school has resulted into a shortfall as such in the CSR expenditure as compared to the stipulated 2 percent of the average net profits of the last three financial years. The Company is committed to spend 2 percent of the average net profits of the last three financial years on CSR activities and it shall ensure compliance of the same going forward. The detailed Report on CSR activities is annexed herewith as

Annexure - G.

Constitution of CSR Committee

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 Financial Year 2017-18, the CSR Committee of the Board of Directors comprised of three (3) Members namely, Mr. Roop Salotra, Chairman, Mr. Dhiraj Dhar Gupta, Member, Mr. D. K. Jain, Member. Further, the Board of Directors have also adopted the CSR Policy of the Company as approved by the Corporate Social Responsibility Committee which is also available on the website of the Company at www. lumaxautotech.com.

The contents of the said policy are as below:

1. Purpose

2. Policy Guidelines

3. Scope

4. Areas Covered

5. CSR Committee & Responsibility

6. Board Responsibility

7. Budget

8. Implementation

9. Management Commitment

The disclosures as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as an Annexure G to this Report in the prescribed format.

VI. Other Statutory Disclosures as Required Under Section 134 of Companies Act, 2013 a. Names of Companies which have become or ceased to be its Subsidiaries, Joint Ventures or Associate Companies during the Year

During the year under review, the Company has ceded the management control of its step down Subsidiary Company i.e Lumax Sipal Engineering Private Limited in favour of the Joint Venture partner, Sipal S.p.A, Italy. Thus this Company ceased to be Subsidiary and became an Associate of the Company.

b. 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 an Annexure - H.

c. Investor Education and Protection Fund (IEPF)

Transfer of Unpaid Dividend

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven(7) years. Consequently, your Company has transferred Rs 120,147/- during the year to the Investor Education and Protection Fund, lying with it for a period of seven years pertaining to year 2009-10.

Transfer of Shares underlying Unpaid Dividend

Further, pursuant to provisions of Section 124(6), the shares in respect of which Dividend has not been paid or claimed by the Shareholders for seven (7) consecutive years or more shall also be transferred to the Demat account of IEPF Authority. Accordingly, 1201 shares underlying Unpaid Dividend have been transferred as per the requirement of IEPF Rules.

It may be noted that Unclaimed Dividend/Underlying shares for the Financial Year 2010 - 11 can be claimed by the Members by October 21, 2018. The Notice as stipulated pursuant to the provisions of Section 124 of Companies Act, 2013 read with IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016 will be published in the Newspaper inviting the attention of the Shareholders to claim their Dividends.

d. Fixed Deposits

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.

It is further stated that the Company does not have any deposits which are not in compliance with the requirements of Chapter V of The Companies Act, 2013.

e. 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.

f. Material Changes and Commitments

No material changes and commitments affecting the financial position of the Company have occurred between April 1, 2017 and the date of this report except the Company has acquired management control over the Associate Company Lumax Gill –Austem Auto Technologies Private Limited by giving casting vote power to the Chairman, who is representing Lumax Auto Technologies Limited w.e.f April 01, 2018.

g. 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 an Annexure –I.

h. Significant and Material orders passed by the Regulators or Courts

There were 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.

i. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and

Redressal) Act, 2013, the Company has adopted the "Prevention of Sexual Harassment at Workplace Policy" and constituted an Internal Complaints Committee (ICC) for Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace and matters connected therewith or incidental thereto covering all the related aspects.

The Committee meets as and when required, however minimum one meeting is ensured during the Financial Year to discuss strengthening safety of employees at workplace and also to resolve/address related issues, if any reported during the year.

During the year under Review i.e. 2017-18 Nine (9) meetings of ICC across all plant locations were held. Further, as per the applicable provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)Act, 2013 your Company continues to submit Annual Report to the District Officer consisting of details as stipulated under the said Act

j. Environment Health & Safety

The Company is Committed to provide a safe working environment with a focus on "Safety Culture Building" by maintaining a number of Safety Management Systems to manage the risk and as a result reduction in number of incidents and injuries. These systems include safety rules, safety procedures, safety training, hazard identification & correction, incident reporting & investigation, capturing near miss accidents, safety communications and safety suggestions. Each Safety Management System has an important contribution to not only improving workplace safety but also influencing the organizations safety culture.

Apart from the above, Lumax is also performing below activities sincerely since 2015:

Regional Safety Meeting for all regions.

Surface Treatment/ Duct cleaning for locations where paint material & chemicals are used

KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures with the help of actual users)

Safety Gemba Audit (Identifying the potential hazard)

Hazards specific Safety training

Maintaining Standard Operating Procedures

By ensuring all the above zero accident level is maintained for last two years. Induction programme & regular training of employees and the introduction of formal safety management system help us to mitigate any future incidents.

In financial year 2017-18, the Companys units situated at Chakan, Pune and G-53, Aurangabad achieved OHSAS Certification.

k. Contribution to Exchequer

The Company is a regular payer of taxes and other duties to the Government. During the year under review, Company paid all its statutory dues & presently no dues are outstanding more than six months. The Company ensures payment of all dues to exchequer well within timeline as applicable.

Acknowledgment

It is our belief that we have a leadership team with the right experience and skills to take us into the next decade of growth. We continue to build our skills and add appropriate resources, which will help the Company deliver solid results in the years to come. Your Directors place on record their appreciation for the continued cooperation and support extended to the Company by its highly valued customers, Joint Venture Partners, all the Shareholders, financial institutions & Banks, various Government Agencies.

Your Directors also wish to place on record their sincere thanks and appreciation for the continuing support and unstinting efforts of vendors, dealers, business associates and employees in ensuring an excellent all around operational performance.

For and on behalf of the Board of Directors
D.K. JAIN
Place: New Delhi Chairman
Dated: May 28, 2018 DIN:00085848

Annexure C

Nomination and Remuneration Policy of Directors, Key Managerial Personnel and Other Employees

The Nomination and Remuneration Committee fixes the remuneration of the Executive Directors after considering various factors such as qualification, experience, expertise, prevailing remuneration in the competitive industries, financial position of the Company, etc. The remuneration structure comprises Basic Salary, Commission, Perquisites and Allowances, contribution to Provident Fund, etc. The remuneration policy for Executive Directors is directed towards rewarding performance, based on review of achievements of Executive Directors. The Extract of the Remuneration and Evaluation of the Performance of the Board of Directors Policy is given below:

Purpose

The Board of Directors believes that an equitable remuneration to the Executive Management helps ensure that the Company can attract and retain key employees. E_orts are made to ensure that the remuneration of the Board of Directors, Key Managerial Personnel and other employees matches the level in comparable Companies, whilst also taking into consideration Board Members required competencies, effort and the scope of the board work, including the number of Meetings.

The policy shall ensure that level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully.

Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, 2015 provides that the Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other Employees.

This policy on remuneration of Directors and Key Managerial Personnel has been formulated by the Nomination and Remuneration Committee and approved by the Board of Directors of the Company.

Objective

The objective of this policy is to lay down a framework in relation to remuneration of Directors, KMP and other employees.

Definition

"Board" means Board of Directors of the Company. "Key Managerial Personnel" means

i. Managing Director or Chief Executive Officer or Manager and in their absence, a Whole-Time Director; ii. Chief Financial Officer; iii. Company Secretary

Applicability & Accountability

This Policy is applicable to: a) Directors viz. Executive and Non-Executive and Independent b) Key Managerial Personnel c) Other Employees of the Company

Committees Responsibility

The key responsibilities of the Committee would be as follows:

To guide the Board in relation to appointment and removal of Directors and Key Managerial Personnel.

To evaluate the performance of the Members of the

Board and provide necessary report to the Board in this regard.

To determine the remuneration of Directors and Key

Managerial Personnel in such a manner that involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

To recommend to the Board on Remuneration payable to the Directors and Key Managerial Personnel.

Delegating any of its powers to one or more of its members or the Secretary of the Committee.

Frequency of Meetings

The Meetings of the Committee shall be held at such regular intervals as may be required.

Matters Relating to Appointment of Director and Key Managerial Personnel

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director and Key Managerial Personnel and recommend to the Board his / her appointment. While recommending any person for appointment as Director, Committee shall keep in view the issue with respect to Board diversity.

b) The Committee has discretion to decide whether qualification, expertise and experience possessed by a person are sufficient / satisfactory for the concerned position.

c) The Committee shall ensure that any appointment of a person as an Independent Director of the Company shall be made in accordance with the provisions of Section 149, 150 and 152 read with Schedule IV and other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors, 2015) Rules, 2014 and Regulation 17 of the Listing Regulations.

Matters relating to the Remuneration for the Directors and Key Managerial Personnel

(a) The Committee shall determine remuneration structure for Directors and Key Managerial Personnel taking into account factors it deems relevant, including but not limited to market scenario, business performance and practices in comparable companies, having due regard to financial and commercial health of the Company as well as prevailing laws and Government/other guidelines.

(b) The remuneration / commission etc. to the Managing Director, Whole-Time Director and Key Managerial Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / commission etc. shall be subject to the prior/post approval of the Shareholders of the Company and Central Government, wherever required.

(c) If in any Financial Year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managing Director/Executive/Whole-Time Director(s) in accordance with the provisions of Schedule V of The Companies Act, 2013 and if the remuneration paid is not in compliance with such provisions, the same shall be subject to the previous approval of the Central Government.

(d) Increments to the existing remuneration structure may be recommended by the Committee to the Board, which shall be within the overall limits of remuneration as prescribed under The Companies Act, 2013.

(e) Where any insurance is taken by the Company on behalf of its Managing Director/ Executive/Whole-Time Director, Key Managerial Personnel and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel. However, if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration.

Remuneration to other employees of the Company

Employees are assigned grades according to their qualifications and work experience, competencies as well as their roles and responsibilities in the Company. Individual remuneration is determined within the appropriate grade and is based on an individuals experience, skill, competencies and knowledge relevant to the job and an individuals performance and potential contribution to the Company.

Term / Tenure a) Managing Director/Whole-Time Director:

The Company shall appoint or re-appoint any person as its Executive Chairman, Managing Director or Executive/ Whole-Time Director for a term not exceeding five years at a time. No reappointment shall be made earlier than one year before the expiry of term.

b) Independent Director

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for re-appointment on passing of a special resolution by the Shareholders of the Company.

No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director. Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly.

The Terms and Conditions of appointment of Independent Directors is uploaded on the website of the Company and the web link of the same is provided here under:

http://www.lumaxautotech.com/downloads/letter-of-appointment.pdf

FORM AOC – 2 Annexure D

Form for Disclosure of Particulars of Contracts/Arrangements entered into by the Company with related parties referred to in Section 188(1) of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

[Pursuant to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014]

1. Details of Contracts or Arrangements or Transactions not at Arms Length Basis:

a. Name(s) of the related party and nature of relationship
b. Nature of contracts/arrangements/transactions
c. Duration of the contracts/arrangements/transactions
d. Salient terms of the contracts or arrangements or transactions including the value, if any
e. Justification for entering into such contracts or arrangements or transactions NA
f. Date(s) of approval by the Board
g. Amount paid as advances, if any
h. Date on which the requisite resolution was passed in general meeting as required under first proviso to Section 188 of the Companies Act, 2013

2. Details of Material Contracts or Arrangement or Transactions at Arms Length Basis:

Sr. No. Particulars Material Transaction
a. Name(s) of the related party and nature of relationship Lumax Industries Limited
b. Nature of contracts/arrangements/transactions Purchase / Sale of Goods
c. Duration of the contracts/arrangements/transactions April 01, 2017 to March 31, 2018
d. Salient terms of the contracts or arrangements or transactions including the value, if any Rs. 20,831 Lacs
e. Date(s) of approval by the Board, if any May 28, 2018
f. Amount paid as advances, if any Nil

All Related Party Transactions are in the ordinary course of business and on arms length basis which are approved by Audit Committee of the Company.

For and on behalf of the Board of Directors of
Lumax Auto Technologies Limited
D. K. JAIN
Place: New Delhi Chairman
Date: May 28, 2018 DIN: 00085848

Annexure E

Statement of Disclosure of Remuneration pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

A. Ratio of the Remuneration of each Executive Director to the Median Remuneration of the Employees of the Company for the Financial Year 2017-18, the percentage increase in Remuneration of Managing Directors, other Executive Directors, Chief Financial Officer and Company Secretary during the Financial Year 2017-18.

Sr. No. Name of Directors & Key Managerial Personnel Designation Ratio of Remuneration to Median Remuneration of all employees % increase in Remuneration during the Financial Year 2017-18
1. Mr. D.K. Jain Executive Chairman 61.82 88.81
2. Mr. Anmol Jain Managing Director 66.20 90.82
3. Mr. Ashish Dubey Chief Financial Officer -- 33.32
4. Mrs. Swapnal Patane Company Secretary -- 14.00

B. The percentage increase in the median remuneration of Employees for the Financial Year 2017-18 was 7.69%.

C. The number of Permanent Employees on the rolls of the Company as on March 31, 2018 was 720.

D. The Average Percentage increase in the salaries of the employees other than the Key Managerial Personnel for the Financial Year was 14.12% whereas the increase in the Managerial remuneration was 89.84%. The remuneration components in case of Executive Chairman and Managing Director include Commission paid which is linked with the profitability of the Company.

E. Afirmation that the remuneration is as per the Remuneration Policy of the Company:

We afirm that the Remuneration paid to the Employees and Directors is as per the Remuneration Policy of the Company.

Annexure I

Information as per Section 134(3)(m) of the Companies Act, 2013 and forming part of Directors Report for the year ended March 31, 2018

A. Conservation of Energy

Though the Company does not come under the category of power intensive unit, adequate measures have been taken for energy conservation and thereby to reduce energy cost.

(a) Energy Conservation Measures taken and their Impact.: a. Continuous saving of energy by replacing inefficient light by efficient LED light.

The Company had cautiously focused on replacement of inefficient light by LED light in Shop Floors, Office Premises, Street Lights etc. which resultantly reduced energy consumption by 10 per cent for PCNTDA Plant, 3 per cent for Bangalore plant and 5 per cent in K-76 and Shahajapur Aurangabad Plants of total energy consumption in those plants.

b. Energy conservation by improving overall efficiency of Plants

The Company initiated working on re-design of utility equipment by this Phase sequence relay for cooler motor of compressor installed the same is resulted into saving 2.5 per cent of energy consumption of PCNTDA Plant. Temperature controller sensors added in cooling tower for auto cut-off of motor. The same is resulted in saving of energy of approx. 6K units per year.

c. Reduction in energy consumption of process machinery power controlling by making changes in technology and by adopting upgraded technology.

The Company commenced technology up gradation for power controlling & adopted new technology for process machine for Surface treatment and Moulding machine which reduced energy consumption by 6 per cent in Bhosari plant & 12 per cent in Chakan plant.

d. Moulding Machine with Servo Motor:

The Company has further replaced Moulding Machine induction motor with Servo Motor in its Bangalore Plant, thereby expecting to save electricity consumption approximately by 25 per cent to 30 per cent. The purchase of energy from Indian Energy Exchange (IEX) by open Access Trading has further resulted in additional saving per unit.

(b) Step taken by the Company for utilizing alternate source of energy

The company has initiated activity of installation of solar power system with capacity of 250 -300 KVA in its different plants located at PCNTDA Pune and K-76

& Shahajapur of Aurangabad in Maharashtra and Bangalore in Karnataka, which will help in energy conservation and reduction of overall cost of energy. Further proposal of installation of solar street lights also in consideration for plants of the company.

It is difficult to quantify the impact of individual energy reduction measures on the Cost of Production of Goods. The above measures of energy reduction will reduce overall cost of energy.

B. Technology Absorption

The company does not have any imported technology and hence the details required to be given for the imported technology are not applicable.

As a trend in the Auto Industries is changing from import in technology to provide and develop local competency, the Company has taken various initiatives to improve local technical capabilities.

Research & Development

a) Expenditure on Research & Development

(Rs in Lacs)
(i) Capital -
(ii) Recurring 240.83
Total 240.83
(iii) Total R & D Expenditure as a percentage of Total Turnover 0.39

C. Foreign Exchange Earnings and Outgo

The Foreign Exchange earned in terms of actual inflows during the year is Rs 2,384.17 Lacs and the Foreign Exchange outgo during the year in terms of actual outflows is Rs 809.01 Lacs.