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Your Board of Directors has pleasure in presenting the 35th Annual Report on the business and operations of the Company, together with the Audited Financial Statements for the financial year ended 31st March, 2018.
The summary of the financial performance of the company for the financial year ended 31stMarch, 2018 as compared to the previous year is as below:
Amounts in Rs. Lakh
|Revenue from operations and other income||122,003.00||118,696.64|
|Profit before Tax||57.06||(378.99)|
|Total tax expenses||(708.73)||(160.05)|
|Profit (Loss) for the period||765.79||(218.94)|
|Other Comprehensive income||200.46||(22.81)|
|Total Comprehensive income||966.46||(241.75)|
|Earnings per Share (EPS)||3.58||(1.02)|
*Figures are as per IND-AS accounting.
CARRY TO RESERVE
No amount is proposed to be transferred to the General Reserve of the Company for the financial year 2017-18.
RECOMMENDATION OF DIVIDEND
Your Directors do not recommend any dividend for the financial year 2017-18.
MATERIAL CHANGES AND COMMITMENTS IF ANY, AFFECTING FINANCIAL POSITION
For last few years, the Company is going through a tough times. The demand from two wheeler manufacturers has not been doing well. Coupled with some IR issues and increasing fixed costs, the Board, in its meeting held on 21st March, 2018 had decided to close its Manesar Plant. Considering healthy demand from other customers, these events may not affect the overall financial position of the Company significantly. In opinion of the Board, there have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there has been no change in the nature of business of the Company. The main business activity of the Company primarily continues to be manufacturing and supply of sheet metal components. The Company is continuously exploring the possibility of venturing into new business areas to minimize its business risks. Indian Railways has been one of the main growth drivers in recent times so it was proposed to venture into new products in this area.
STATE OF THE COMPANYS AFFAIRS, OPERATIONS AND FUTURE PROSPECTS
During the financial year 2017-18, the total revenue of the Company was Rs. 1220.03 Crores as compared to total revenue of Rs. 1186.96 Crores (as per IND-AS) during the previous financial year, thus resulting a marginal growth over previous year. Profit before tax for the year under review was Rs. 0.57 Crore as against loss of Rs. 3.79 Crore (as per IND-AS), in the previous financial year.
Financial year 2017-18 was a challenging year for the Company. The demand from 2W manufacturers was not upto the expectation. Increasing fixed costs impacted the business of the Company adversely. However, during the year under review, demand from commercial vehicle manufacturers and Indian Railways witnessed a very good growth and poised to grow further in coming years.
Due to cost rationalization, the Company has taken many consolidation activities in the recent past. The management has also realigned its focus in new areas. As stated earlier, demand from 2W manufacturers was subdued. The management is working on to increase its customer base & product portfolio for Indian Railways, passenger car manufacturers and CV manufacturers. Recently, the Board has, in principle, approved capacity expansion for Indian Railways.
For further details, Shareholders may refer to Management Discussion and Analysis and Corporate Governance Report that forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule V thereto, Management Discussion and Analysis Report has been appended separately, which forms part of this Report and the Annual Report.
Corporate Governance is the application of best Management Practices, Compliance of Laws in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders i.e. shareholders, management, employees, customers, vendors, regulators and the community at large. Your Company places prime importance on reliable financial information, integrity, transparency, empowerment and compliance with the law, in letter and spirit.
The regulators have also emphasised on the requirement of good corporate governance practices in corporate management. Your Company also takes proactive approach and revisits its governance practices from time to time so as to meet business and regulatory requirements.
Compliance of Corporate Governance provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year 2017-18 has been provided in the Corporate Governance Report, which is attached hereto, and forms part of, this Report. The Auditors certificate on compliance with corporate governance norms is also attached thereto.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company has optimum combination of executive and non-executive directors including independent directors and woman directors in compliance with the provisions of the Companies Act, 2013 ("the Act") and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of the Section 203 of the Act, the Company has designated the Key Managerial Personnel. During the year under review, there were no changes in the composition of Directors of the Company.
In terms of the provisions of the Act and Article of Association of the Company, Mr. Tavinder Singh (DIN: 01175243), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The present term of appointment of Mrs. Sakshi Kaura as the Joint Managing Director of the Company is valid up to 31st May, 2018. The Board has, subject to the approval of the Members in the forthcoming AGM, approved the re-appointment of Mrs. Sakshi Kaura as Joint Managing Director for another period three years effective from 1st June, 2018.
The present term of appointment of Mr. Tavinder Singh as the Whole-Time Director of the Company is valid up to 28th October, 2018. The Board has, subject to the approval of the Members in the forthcoming AGM, approved the re-appointment of Mr. Tavinder Singh as the Whole-Time Director for another period of three years, with effect from 29th October, 2018.
The Board in its meeting held on 19th July, 2018 appointed Mr. Devashish Mehta as an Additional Director of the Company with immediate effect. Further, the Board appointed Mr. Devashish Mehta, as Joint Managing Director of the Company also with immediate effect, subject to shareholders approval. At the ensuing 35th AGM of the Company, it is proposed to appoint Mr. Devashish Mehta as Joint Managing Director of the Company.
APPOINTMENT/RE-APPOINTMENT OF INDEPENDENT DIRECTOR
The Board in its meeting held on 19th July, 2018, has appointed Mr. Bharat Kaushal as an additional director of the Company in the category of Independent Director with immediate effect. Further, appointment of Mr. Bharat Kaushal as an Independent Director of the Company is subject to approval of the shareholders in the ensuing Annual General Meeting.
Mrs. Novel Singhal Lavasa (DIN: 07071993) was appointed as an Independent Director on the Board of the Company by the members at their 33rd Annual General Meeting, held on 12th September, 2016, for a term of three years w.e.f. 29th October, 2015. Accordingly, her office as Independent Director of the Company is expiring on 28th October, 2018.
In terms of the provisions of Section 149 (10) of the Companies Act, 2013, read with Schedule IV thereto, an Independent director can be re-appointed for another term by passing of a special resolution by the Company.
Accordingly, subject to the approval of the members, the Board of Directors of the Company, at its meeting held on 19th July, 2018, have recommended the re-appointment of Mrs. Novel Singhal Lavasa as Independent Directors of the Company, for a further term of five years, to the members in ensuing Annual General Meeting.
MEETINGS OF THE BOARD
During the year under review, 7 (seven) meetings of the Board were held respectively on 18th April, 2017, 19th April, 2017,17th August, 2017,8th September, 2017, 8th December, 2017, 20th January, 2018 and 21st March, 2018. For other details of Board Meetings and committee meetings, members may refer to the Corporate Governance Report attached separately to this report.
COMPOSITION AND RECOMMENDATION OF AUDIT COMMITTEE
During the year under review, there was no change in the composition of the Audit Committee of the Board. Currently, the Audit Committee is composed of four directors as follows:
1. Dr. Ramesh Chand Vaish, Independent Director (Chairman);
2. Dr. T. N. Kapoor, Independent Director (Vice-Chairman and Member);
3. Mr. Jatender Kumar Mehta, Chairman cum Managing Director (Member); and
4. Mrs. Novel S Lavasa, Independent Director (Member)
There has been no instance wherein the Board had not accepted any recommendation of the Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) read with Section 134(5), the directors state that
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had 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;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) 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; and
(f) 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.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All independent directors have given declarations to the effect that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
In terms of Section 178(3) of the Companies Act, 2013, upon recommendation of the Nomination and Remuneration Committee, the Board has adopted the Nomination and Remuneration Policy of the Company. Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other prescribed matters, are governed by such policy. In terms of Section 178(4) of the Act, such policy is disclosed on website of the Company at the below link: -http://www.omaxauto.com/other-reports.aspx?mpgid=42 &pgidtrail=81
ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The evaluation of performance of the Board, its Committees and individual directors for the financial year 2017-18 was carried out in accordance with the policy for evaluation of the performance of the Board of Directors of the Company. The evaluation forms and criteria for evaluation of Board of Directors, Managing Director / Executive Directors, Non- Executive Independent Directors, Board Committees and Chairman of the Company, were circulated to all the directors for their feedback/ ratings. The forms were submitted back to the Company by the directors with their feedback/ ratings. On the basis of their feedback/ratings, the Board evaluated the performance of Board of Directors, Managing Director / Executive Director, Non-Executive Independent Director, Board Committees and the Chairperson of the Company. The Board was satisfied with the evaluation results.
The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations. The Company has established a vigil mechanism and has adopted the "Vigil Meehanism/Whistle Blower Policy". As per the policy objective, the Company encourages its employees who have concerns about suspected misconduct, to come forward and express these concerns without fear of punishment or unfair treatment. A vigil mechanism provides a channel to the employees and directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and directors to avail the mechanism and also provide for direct access to the Managing Director/Chairman of the Audit Committee in exceptional cases. Such policy is available on the website of the Company i.e. www.omaxauto.com .
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a good corporate citizen, the Company understands the significance of inclusive growth and wellbeing of all stakeholders, including the society at large. Your Company has been taking initiatives under Corporate Social Responsibility (CSR) for society at large, well before it has been prescribed under Companies Act, 2013. The Company has a well-defined Policy on CSR as per the requirement of Section 135 of the Companies Act, 2013 which covers the activities as prescribed under Schedule VII of the Companies Act, 2013.
During the year under review, your Company has carried out activities primarily related to promoting/providing education to the poor and underprivileged children.
The details about the policy developed and implemented by the Company on Corporate Social Responsibility initiatives taken during the year, the reasons for the unspent amount on CSR and Composition of CSR Committee, as required under clause (o) of sub-section (3) of the Section 134 of the Companies Act, 2013 are provided in the CSR Annual Report in terms of Rule 8 of the Companies (Corporate Social responsibility) Rules, 2014, which is attached as Annexure-1 and forms part of this report.
CSR Liability for the FY 2017-18 was Rs. 17.32 Lacs. Out of the budgeted amount of Rs. 33.00 Lacs (out of cumulative funds available) for approved projects, an amount of Rs. 26.88 Lacs was spent during the year. Some projects could not been completed by March, 2018 and continued in the following year. The remaining expenditure will be incurred in the following year. However, the Company is committed to spend the unspent amount of CSR expenditure, including of the previous years, aggregating Rs. 22.18 Lacs as calculated below.
Amounts in Rs. Lacs
|Particulars||2017- 18||2016- 17||2015- 16||2014- 15||Total|
|CSR Liability (2% of Net Profit)||17.32||12.42||18.11||51.11||98.95|
|Amount Spent (Upto 2017-18)||45.32||6.30||0.00||25.16||76.77|
|Amount outstanding as Unspent at 31.03.2018||22.18|
The detailed report on initiatives taken during 2017-18 can be accessed at the website of the company at www. omaxauto.com.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors of the Company has adopted a policy as the Risk Management Policy of the Company with main objective of to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The functions of the Risk Management Committee includes preparation of company-wideframeworkforriskmanagement, fixing roles and responsibilities, communicating the risk management objective, allocating resources, drawing action plan, determining criteria for defining major and minor risks, deciding strategies for escalated major risk areas, updating company-wide Risk register and preparing MIS report for review of Audit Committee.
The implementation and monitoring of this policy is currently assigned to the Audit Committee of the Board. Though the Board is striving to identify various elements of risk, however, in the opinion of the Board, there has been no element of risk which may threaten the existence of the Company.
M/s. BGJC & Associates LLP, Chartered Accountants (Firm Registration No. 003304N), were appointed as Statutory Auditor of the Company at the 34th AGM till the conclusion of 39th AGM.
M/s. BGJC & Associates LLP have confirmed their eligibility and qualification required under Section 139, 141 and other applicable provisions of the Companies Act, 2013 and rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
In terms of Section 204 of the Companies Act, 2013 read with the rules made thereunder, and upon the recommendation of the Audit Committee, the Board of Directors has appointed M/s. Chandrasekaran Associates, Company Secretaries as the Secretarial Auditors of the Company to conduct Secretarial Audit for the financial year ending 31st March, 2019.
In terms of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, the Board of Directors, on recommendation of the Audit Committee, has re-appointed M/s. HM & Associates, Chartered Accountants, M/s. Singhi Chugh & Kumar, Chartered Accountants and M/s. N. Kochhar & Co., Chartered Accountants as Internal Auditors of the Company for the financial year 2018-19.
The Board of Directors of the Company, on the recommendations made by the Audit Committee, has appointed M/s. JSN & Co., Cost Accountants (Firm Registration No. 000455) as the Cost Auditor of the Company to conduct the audit of the cost records for the financial year 2018-19. The remuneration proposed to be paid to the Cost Auditor, subject to ratification by the shareholders of the Company at the ensuing 35th AGM, would not exceed Rs. 1.2 Lakhs excluding taxes and out of pocket expenses, if any.
The Company has received consent from M/s. JSN & Co., Cost Accountants, to act as the Cost Auditor for conducting audit of the cost records for the financial year 2018-19 along with a certificate confirming their independence and arms length relationship.
M/s. BGJC & Associates LLP, Chartered Accountants (Firm Registration No. 00304N), Statutory Auditors of the Company have submitted their reports on the financial statements of the Company for the financial year ended 31st March, 2018. There has been no observation or comment of the auditors on financial transactions or matters which has any adverse effect on the functioning of the company; further, there is also no qualification, reservation or adverse remarks in the Auditors Reports on the financial statement of the Company for the financial year ended 31st March, 2018 except that there was one instance of delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund (IEPF) by the Company. In this regard it is clarified that due to last minute request received from one of the shareholders claiming his unpaid dividend amount, the relevant Bank took time to issue the Demand Draft in favour of the shareholders. Further, until the Demand Draft was encashed, the bank could not make the cheque for the final amount, in favour of IEPF. After the Demand Draft was encashed by the shareholder, the Bank issued the cheque and the amount was duly transferred to the lEPFs account. The delay was unintentional and to protect the interest of the shareholder. However, the management would take steps to avoid such recurrence in future.
There has been no fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 for the financial year 2017-18.
In terms of Section 204(1) of the Act, a Secretarial Audit Report, given by M/s. Chandrasekaran Associates, the Secretarial Auditor of the Company, in prescribed form has been annexed as Annexure-2 hereto and forms part of this Report. Further, there has been no qualification, reservation or adverse remarks or disclaimer or qualification made by the Secretarial Auditors in their report for the financial year ended 31st March, 2018 except that there was one instance of delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund (IEPF) by the Company. Necessary explanation has been made in this regard in above paragraphs.
M/s. JSN & Co., Cost Accountants (Firm Registration No.
000455), Cost Auditors of the Company have submitted their reports on the cost records of the Company for the financial year ended 31st March, 2018. There has been no qualification, reservation or adverse remarks in the Auditors Reports on the cost records of the Company for the financial year ended 31st March, 2018.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any subsidiary company or joint venture or associate company. There was no company which had become or ceased to be the subsidiary, joint venture or associate company of the Company during the year under review.
During the year under review, the Company had not invited or accepted any deposits from public under Chapter V of the Companies Act, 2013 and the Rules made thereunder.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALS
There has been no significant and material order passed by any regulator, courts or tribunals impacting the going concern status and operations of the Company in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
For the purposes of effective internal financial control, the Company has adopted various policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. For further discussion on adequacy of internal financial controls, please refer the discussion in Management Discussion and Analysis that forms part of this Report.
LOANS, GUARANTEES AND INVESTMENT
During the financial year under review, the Company has not given any loan or guarantee or made any investment in terms of Section 186 of the Companies Act, 2013.
RELATED PARTY TRANSACTIONS
During the year under review, there was no new transaction with related parties falling under the purview of Section 188 of the Act. All the transactions with the related parties were in ordinary course of business and on arms length basis, hence, were out of the purview of Section 188 of the Act. All transactions with related parties were duly reviewed by the Audit Committee of the Board. In terms of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Para A of Schedule V thereto, the Related Party disclosures have been provided separately, which form part of the Annual Report.
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE OUTGO
In terms of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014, a statement containing details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in the manner as prescribed under the Companies (Accounts) Rules, 2014, is given in Annexure- 3 hereto and forms part of this Report.
DISCLOSURE OF PRESCRIBED DETAILS OF DIRECTORS REMUNERATION VIS-A-VIS EMPLOYEES REMUNERATION
In terms of Section 197(12) of the Act read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification and amendments thereto), the ratio of the remuneration of each director to the median employees remuneration and such other details as are required under such rules are attached separately as Annexure - 4, which forms part of this report.
EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format [MGT-9] is appended as Annexure-5, to the Boards Report.
CASES FILED UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Directors further state that during the year under review, there was no complaint filed/received pursuant to the Sexual Harassment of Women at Workplace [Prevention, Prohibition and Redressal] Act, 2013.
SUSPENSION OF SECURITIES OF THE COMPANY
The securities of the Company has not been suspended from trading in any of the stock exchanges during the period under review.
ENVIRONMENT HEALTH AND SAFETY (EHS)
Your Company is committed for adhering to best Environmental, Safety & Health Practices during its manufacturing processes. It targets to achieve 100% Environmental Legal compliances with 100% customers satisfaction along with continuous trainings and awareness programs on different Environmental Burning Issues from time to time. In order to ensure effective implementation of OMAXs EHS Policy, the same is systematically communicated across all the levels and the employees
are trained from time to time to not only build commitment at their levels but also encourage them to be effective promoters of this philosophy and take EHS as one of their key roles in day to day functioning. Environment, Health and Safety programs in the organization is the prime focus of top management to make safe and healthy work environment. The EHS programs protect the environment, conserve the natural resources, provide safe and healthy conditions for work, and comply with applicable laws and regulations.
The Company is committed for adopting Zero Incident free work environment by following continuous workplace and classrooms trainings, work permit systems, third party safety audits and stringent safety standards in the workplace. Safety and health compliances, start from our gates and occupy the topmost position in the yearly goals of the Company.
The Company targets to maintain minimum Zero Severity Rate and Frequency Rate to achieve Zero injury. All safety compliances being monitored via In-house and third party monthly safety audits to know least non-conformance to ensure our 100% safety compliances for our employees, associates and machinery to improve productivity. A dedicated EHS team is available in each unit under guidance of corporate EHS on day-to-day basis.
All EHS activities are monitored by monthly EHS MIS review mechanism with allocation of sufficient resources under separate cost centre for better accountability. The Company is also dedicated to save our precious natural resources with conservation of water by recycling our effluent after treatment by installing Reverse Osmosis Plants. For continuous monitoring and to operate our all ETPs at highest efficiency, we have established dedicated ETP Labs at all major locations with dedicated ETP Chemists to achieve and fulfil our commitment towards Zero Liquid Discharge. The Companys strength is Employee engagement and under this, celebrations of Environment and Safety Day, Fire & Mock Drills, EHS awareness training programs covering all employees and associates under scheduled classroom and floor level training are conducted. EHS Legal Compliance training programs are organized for all senior and middle management for better understanding throughout the year to create more vibrant environment amongst the employees so that each & every employee takes the responsibilities & guides others about non polluted environment. The Company also ensures 100% disposal of all generated Hazardous wastes as per Pollution Control guidelines. The Company has also started disposal of E-waste to authorized re-cyclers.
WEBLINKTO IMPORTANT DOCUMENTS/INFORMATION:
The Company has hosted certain policies/documents/ information, including inter alia, Policy for determining Material Subsidiaries Policy on dealing with Related Party Transactions, Familiarization programmes for Independent Directors etc. as per the requirement of law or otherwise.
Following link could be used for accessing such polices/ documents/information: http://www.omaxauto.com/other-
COMPLIANCE OF SECRETARIAL STANDARDS ISSUED BY ICSI
During the financial year 2017-18, the Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.
ACKNOWLEDGEMENT / APPRECIATION
The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners, bankers and government agencies for the continued support given by them to the Company and their confidence reposed in the management. We look forward for your continued support in the future.
For Omax Autos Limited
|Jatender Kumar Mehta|
|Place: Gurugram||(Chairman Cum Managing Director)|
|Date: 19th July, 2018||DIN:00028207|