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Eicher Motors Ltd.

BSE: 505200 | NSE: EICHERMOT |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE066A01021 | SECTOR: Auto - LCVs & HCVs

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Annual Report

For Year :
2019 2018 2017 2016 2014 2013 2012 2011 2010

Director’s Report

To the Members of Eicher Motors Limited

The Directors have pleasure in presenting the Thirty Seventh Annual Report along with the Audited Financial Statements of your Company for the financial year ended March 31,2019.

FINANCIAL RESULTS

Your Company achieved an all-time high top line growth during the financial year 2018-19 with Net revenue from operations at Rs. 9,794.48 crores. The profit before depreciation and interest amounted to Rs. 2,944.38 crores, which is 30.1% of the total revenue. After accounting for other income of Rs. 508.04 crores, interest expense of Rs. 2.99 crores and depreciation of Rs. 298.93 crores, profit before exceptional item and tax amounted to Rs. 3,150.50 crores.

In March 2018, the Board of directors of Eicher Polaris Private Limited, a 50:50jointventure with Polaris Industries Inc. US decided to wind down the operations of Eicher Polaris Private Limited. As a consequence, the Company recorded an impairment loss of Rs. 311.98 crores and Rs. 17.52 crores (exceptional items) during the previous year and current year respectively.

Profit after exceptional item and before tax is Rs. 3,132.98 crores. Profit after tax amounted to Rs. 2,054.44 crores after income tax provision of Rs. 1,078.54 crores. Total Comprehensive income for the year, net of tax amounted to Rs. 2,048.67 crores.

The financial results are summarized below:

Rs. in Crores

Particulars

For the financial year ended

For the financial year ended

March 31, 2019

March 31, 2018

Net Revenue from operations

9,794.48

8,957.51

Protit before depreciation and interest

2,944.38

2,853.20

Interest

2.99

3.04

Depreciation

298.93

222.34

Protit before other income and tax

2,642.46

2,627.82

Other income

508.04

332.43

Protit before exceptional items and tax

3,150.50

2,960.25

Exceptionalltems

17.52

311.98

Protit before tax

3,132.98

2,648.27

Provision for tax (including Deferred tax)

1,078.54

935.36

Net protit after tax

2,054.44

1,712.91

Other comprehensive income

(5.77)

10.85

Total Comprehensive income for the year/period, net of tax

2,048.67

1,723.76

Balance in statement of profit and loss brought forward from previous year

4,871.26

3,476.61

Amount available for appropriation (Excluding Exchange differences in

6,924.79

5,188.38

translation of foreign operations):

Dividend for FY 2017-18, paid in FY 2018-19

-

299.93

Dividend proposed for FY 2018-19, to be paid in 2019-20

341.03

-

Earnings per share

- Basic (Rs.)

753.37

629.07

- Diluted (Rs.)

752.54

627.88

CHANGE IN THE NATURE OF BUSINESS, IF ANY

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

MATERIAL CHANGES AI^D COMMITMENTS AFFECTING THE FINANCIAL POSITION OF T^ COMPANY THAT HAVE OCCURRED AFTER MARCH 3% 2019TILL DATE OF THS REPORT

There are no material changes or commitments affecting the financial position of the Company which have occurred after March 31,2019 till the date of this report.

DIVIDEND

The Board of Directors in their meeting held on MaylO, 2019, has recommended for approval of the shareholders payment of dividend of Rs. 125/- per Equity Share (@1250%) of face value of Rs. 10/- out of the profits for the financial year 2018-19 in accordance with the Dividend Distribution Policy of the Company.

The dividend, if approved by the shareholders, shall be paid in the following manner:

a) To all Beneficial Owners in respect of shares held in dematerialized form as per the data made available by the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) as of the close of business hours on July 25,2019;

b) To all Members in respect of shares held in physical form after giving effect to valid transfer/transmission in respect of transfer/transmission requests properly lodged with the Company on or before the close of business hours on July 25,2019.

AMOUNTS TRANSFERREDTORESERVES

During the financial year 2018-19, no amountwas transferred to General Reserve of the Company.

BRIEF DESCRIPTION OF THE STATE OF COMPANY’S AFFAIRS/BUSINESS PERFORMANCE

Your Company continues to grow significantly. It sold 8,23,828 motorcycles in the financial year 2018-19, 0.4% more when compared to 2017-18 sales of 8,20,492 motorcycles. Out of 8,23,828 motorcycles sold in 2018-19,20,825 motorcycles were exported, a growth of 8.1% over previous year volume of 19,262 motorcycles in 2017-18.

Net Revenue from operations for 2018-19 yearwas Rs. 9,794.48 crores, 9.3% growth over previous year (Rs. 8,957.51 crores). Net Sales of spare parts, gears and services increased to Rs. 1,056.39 crores in 2018-19 from Rs. 841.79 crores in the previous year, registering a growth of 25.5%.

Maximizing operating leverage is a key focus in your Company. Your Company’s profit before depreciation, interest, exceptional item and taxwas Rs. 2,944.38 crores in 2018-19, a growth of 3.2% over Rs. 2,853.20 crores recorded in 2017-18

MARKET AW FUTURE PROSPECTS

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION Aim FOREIGN EXCHANGE EARMNGS AW OUTGO

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

DISCLOSURE REGARDINGISSUE OF SWEAT EQUITY SHARES Am EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year 2018-19.

CHANGES IN SHARE CAPITAL AEIC^ER EMPLOYEE STOCK OPTION PLAN 2006

The paid up Equity Share Capital of the Company as on March 31,2019, was Rs. 27,28,25,700/-. During the year under review, the Company has issued 27,021 Equity Shares of face value of Rs. 10/- each pursuant to its Employees Stock Option Plan, 2006.

A Statement giving complete details as at March 31,2019, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 is available on the website of the Company and the weblink for the same is http://www.eicher.in/ uploads/1561783757_ES0P-details-forming-part-of-directors-report.pdf

The Employee Stock Option Plan for grant of stock options has been implemented in accordance with the SEBI Regulations. A certificate from M/s S.R. Batliboi & Co., LLP, Statutory Auditors, in this regard would be placed at the ensuing Annual General Meeting for inspection by the members. The Company has not changed its Employee Stock Option Plan during the year.

Further, details of options granted and exercised are included in Note no. 47 in the notes to accounts forming part of consolidated financial statements.

DEPOSITS

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

DIRECTORS AMKEY MANAGERIAL PERSONNEL

In accordance with Section 149(7) of the Act, all the Independent Directors of the Company have given written declarations to the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of SEBI LODR Regulations, 2015.

In accordance with the provisions of Section 152 and other applicable provisions of the Act & the Articles of Association of the Company, Mr. Siddhartha Lai, Managing Director, retires by rotation and being eligible offers himself for reappointment at the ensuing AGM. During the year under review, Mr. Prateek Jalan, Non-Executive Independent Director of the Company, resigned from the Board w.e.f. October 13,2018. Mr. Inder Mohan Singh, Non-Executive Independent Director was appointed as an Additional Director on the Board of the Companyw.e.f Novemberl2,2018, Mr.Vinod Kumar Dasari, Whole-time Director & CEO-Royal Enfield and Mr. Vinod Kumar Aggarwal, Non-Executive Director, were also appointed as Additional Directors on the Board of the Company w.e.f. April 1,2019, subject to requisite approval of the shareholders at the ensuing Annual General Meeting.There has been no other change in the Directors and Key Managerial Personnel of the Company during the financial year under review.

COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

Company’s Hiring $ Employment Policy:

A number of factors are considered towards selecting candidates at the Board level which include:

- Ability to contribute to strategic thinking

- Proficiency in Governance norms, policies and mechanisms at the Board level

- Relevant cross industry/functional experience, educational background, skills and experience

- Wherever relevant, independence of Directors in terms of applicable regulations.

It is expected that the Individual Board members are willing to learn the business of the Company and to devote the necessary time and effort to be well-informed.

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

- Exhibit integrity and accountability

- Exercise informed judgement

- Are financially literate

- Are mature and confident individuals

- Operate with high performance standards

Removal of Directors

Under extreme circumstances and in highly unusual situations it may become necessary to remove a member from the Board of Directors. Reasons for doing so, may relate to any of the following (indicative;other than as provided under the Companies Act, 2013):

i. Breach of confidentiality in anyway

ii. Failure to meet obligatory procedures in the disclosure of conflict of interest

iii. Failure to fulfil the fiduciary duties of a Director for the Company

iv. Acting in any other manner which is against the interests of the Company

Company’s Remuneration Policy:

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

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

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

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

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

Remuneration by way of commission to the Non-Executive Directors shall be decided by the Board of Directors within the ceiling of a sum not exceeding 1% per annum of the net profits of the Company, calculated in accordance with the provisions of the Act and as approved by the members from time to time by passing a resolution in the general meeting.

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

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

ANNUAL EVALUATION OF BOARD COMMITTEES AND INDIVIDUAL DIRECTORS

During the financial year under review, formal annual evaluation of the Board, its committees and individual Directors was carried out pursuant to the Board Performance Evaluation Policy of the Company and provisions of the Companies Act, 2013 and SEBI LODR Regulations, 2015.

The performance of the Board and Committees was evaluated after seeking inputs from all the Directors on the basis of the criteria such as Board/ Committee constitution, frequency of meetings, effectiveness of processes etc.The performance of individual Directors (including Independent Directors) was evaluated by the Board and Nomination t Remuneration Committee (excluding the Director being evaluated) after seeking inputs from all Directors on the basis of the criteria such as thought contribution, business insights and applied knowledge.

A separate meeting of Independent Directors was also held to review the performance of the Managing Director, performance of the Board as a whole and performance of the Chairperson of the Company. Review of the performance of the Chairperson was done after taking into account the views of the Executive Director and Non-Executive Directors (excluding the Chairperson being evaluated).

MEETINGS OF BOARD OF DIRECTORS

Five (5) meetings of the Board of Directors of the Company were conducted during the financial year. The details of Board/Committee/Shareholder meetings are provided under the Corporate Governance Report which forms part of the Annual Report.

DETAIL OFLOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT

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

PARTICULARS OF RELATED PARTY TRANSACTIONS

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

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

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

AUDIT COMMTTEE

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

Sl. No.

Name of Members

1

Mr.SSandilya(Chairman)

2

Mr. Siddhartha Lal

3

Ms. ManviSinha

During the year under review, Mr. Prateekjalan, Non-Executive Independent Director, a member of the Audit Committee, resigned from the Board w.e.f. October 13,2018.The Board at its Meeting held on November 12,2018, appointed Ms. Manvi Sinha, Non-Executive Independent Director as Member of the Audit Committee.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors, employees, dealers and vendors of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy or to report genuine concerns or grievances including instances of leak or suspected leak of unpublished price sensitive information pursuant to SEBI (Prohibition of InsiderTrading) Regulations, 2015. The Whistle Blower Policy is available on the website of the Company.

SUBSIDIARIES, ASSOCIATE ANDJOMT VENTURE COMPANIES

Highlights of performance of subsidiaries and joint venture Companies and their contribution to the overall performance of the Company during the year under review

Royal Enfield North America Limited (RENA)

RENA was incorporated in March 2015 as a 100% subsidiary of Eicher Motors Limited to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares and gear in North America. It sold 1,731 motorcycles (excluding sales to Royal Enfield Canada Limited, 100% subsidiary of RENA) during the year 2018-19 and achieved revenue of Rs. 55.56 crores. As of March 2019, RENA had contracted with 85 multi brand outlets in USA.

Royal Enfield Canada Limited (RECA)

RECA is a 100% subsidiary of RENA. RECA was incorporated in April 2016 in Canada to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares and gear in Canada. During the year 2018-19, the company sold 105 motorcycles and achieved revenue of Rs. 3.21 crores. As of March 2019, RECA had contracted with 11 multi brand outlets in Canada.

Royal Enfield Brasil Comercio De Motocicletas Ltda.

Royal Enfield started its operations in Brazil through a direct distribution company by the name of Royal Enfield Brasil Comercio De Motocicletas LTDA in 2016-17. During the year 2018-19, the company sold 649 motorcycles and achieved revenue of Rs. 11.75 crores.

Royal Enfield (Thailand) Ltd

Royal Enfield (Thailand) Ltd. was incorporated on September 18, 2018 to engage in wholesale business of motorcycles, apparels, spares t accessories and assembly of CKD motorcycles locally in Thailand through a local assembler. The company has received approval to initiate trading business in March 2019 and is in the process of getting various other manufacturing and trading related licenses.

The company is yet to commence trading operations as at end of March 2019.

VE Commercial Vehicles Limited

Overview of performance covered separately in the Annual Report.

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

Pursuant to the provisions of Section 129(3) of the Act, a report containing salient features of the financial statements of Company’s subsidiaries and joint venture Company in Form AOC-1 is attached as Annexure-2t

COMPANIES WHICH HAVE BECOME OR CEASED TO BE COMPANY’S SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPARES DURING THE FINANCIAL YEAR

During the financial year under review, Royal Enfield (Thailand) Ltd. (“RETH”) was incorporated on Septemberl8, 2018 as wholly owned subsidiary of the Company. No other Company has become or ceased to be Company’s subsidiary, joint venture or associate company during the financial year 2018-19.

DETAILS OF SIGNIFICANT AW MATERIAL ORDERS PASSED BY T^ REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOINGCONCERNSTATUS AW COMPANY’S OPERATIONS IN FUTURE

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

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

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

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social Responsibility (CSR) Committee and has framed a Corporate Social Responsibility Policy and identified Healthcare, Children’s education, Road safety, Environmental sustainability, Local Area Development in, including but not limited to, areas around Company’s establishments t in Himalayas and Livelihood development including vocational training for underprivileged as some of the key areas. The Company will continue to support social projects that are consistent with the Policy.

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

1. Mr.SSandilya-Chairman

2. Mr.SiddharthaLal

3. Mr.Inder Mohan Singh

Annual Report on CSR activities is annexed as Anresur&3

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared by the Company in accordance with the requirements of Indian Accounting Standard (“Ind AS”)-110”Consolidated Financial Statements” and Ind AS 28 “Investment in Associates and Joint ventures”, prescribed under Section 133 of the Companies Act, 2013, read with the rules issued thereunder. The Company, its subsidiaries and jointly controlled entities adopted Ind AS from April 1,2016.The consolidated financial statements are provided in the Annual Report. A statement containing the salient features of the financial statements of each of the subsidiary andjointventure in the prescribed Form AOC-1 is attached.

Pursuant to Section 136 of the Act, the financial statements, consolidated financial statements and separate accounts of the subsidiaries are available on the website of the Company at www.eichermotors.com. These are also available for inspection by the shareholders at the Registered Office of the Company during business hours. The Company shall provide free of cost, the copies of the financial statements of the Company and its subsidiary Companies to the shareholders upon their request. The consolidated total Comprehensive income of the Company and its subsidiaries amounted to Rs. 2,196.53 Crores for the financial year 2018-19 as compared to Rs. 1,969.64 crores for the previous period 2017-18.

AUDITORS

(a) STATUTORY AUDITORS AND THEIR REPORT

M/s S.R. Batliboi t Co., LLP, Chartered Accountants (Firm Registration Number: FRN 301003E/E300005) were appointed as Statutory Auditors in the 35th (Thirty Fifth) Annual General Meeting (AGM) of the Company for a period of five years, from the conclusion of 35th AGM till the conclusion of the 40th AGM of the Company, subject to ratification of their appointment at every AGM by the shareholders, if required pursuant to the provisions of the Companies Act, 2013 (“Act”). Central Government vide Companies (Amendment) Act, 2017 has amended the provisions of Section 139 of the Act and ratification of appointment of Statutory Auditors in every AGM is no longer required.

The Statutory Auditors have confirmed their eligibility, under Section 141 of Companies Act, 2013 and the Rules made thereunder, to continue to act as Statutory Auditors of the Company.

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31,2019 pursuant to the provisions of the Act. The reports of Statutory Auditors forms part of the Annual Report. The reports are self-explanatory and does not contain any qualifications, reservations or adverse remarks.

(b) SECRETARIAL AUDITORS AND THEIR REPORT

The Board of Directors has appointed M/s. RDA & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year ended March 31, 2019. As required under Section 204 of the Companies Act, 2013, the Secretarial Audit Report is annexed as Annexure-4 to this Report. The Secretarial Auditors’ Report is self-explanatory and does not contain any qualifications or adverse remarks which require any clarification or explanation.

(c) COST AUDITOR

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

Mr. V Kalyanaraman, a qualified Cost Accountant, has been appointed as the cost auditor to carry out audit of the cost records of the Company for the financial year 2018-19 pursuant to the provisions of the Companies Act, 2013. The Cost auditor shall submit his report to the Board of Directors within the time prescribed under Companies Act, 2013 and the rules made thereunder.

CORPORATE GOVERNANCE, MANAGEMENT DISCUSSION & ANALYSIS AND BUSINESS RESPONSIBILITY REPORTS

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

EXTRACT OF AMUAL RETURN

Pursuant to the provisions of Sections 134 & 92(3) of the Act, the details forming part of the extract of the Annual Return in Form MGT-9 is annexed as Annexure-5 to this Report and which is also available on the website of the Company www.eichermotors.com.

DIRECTORS RESPONSIBILITY STATEMENT

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

a) that in the preparation of the annual Financial Statements for the year ended March 31,2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note no. 3 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profits of the Company for the year ended on that date;

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

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

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

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

PARTICULARS OF EMPLOYEES

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

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

Sl. No.

Name of the Director/KMP

Designation

Ratio of Remuneration of each Director to Median Remuneration of Employees

Percentage Increase in Remuneration for FY 2018-19 over FY 2017-18

1

Mr. S Sandilya

Chairman & Non-Executive Independent Director

9.5

9.12

2

Mr. Siddhartha Lal

Managing Director

194.6

25.47

3

Mr. Inder Mohan Singh

Non-Executive Independent Director

0.8

N.A.*

4

Mr. Prateekjalan

Non-Executive Independent Director

3.1

N.A.*

5

Ms. ManviSinha

Non-Executive Independent Director

2.2

21.21

6

Mr. Lalit Malik

Chief Financial Officer

-

127.78#

7

Mr. Manhar Kapoor

General Counsel and Company Secretary

-

124.64#

*Mr. PrateekJalan,Non- Executive Independent Director of the Company resigned from the Board w.e.f October 13,2018 and Mr. Inder Mohan Singh,Non-Executive Independent Director, was appointed by the Board w.e.f. November 12,2018 as an additional Director. Hence,percentage increase in remuneration for both is not applicable.

fPercent age increase in remuneration forFY2018-19 overFY2017-18ismainlydue to perguisite on exercising shares under ESOP during the financial year. Lt shall be 2.13% and 3.16% for Mr. Lalit Malik and Mr. Manhar Kapoor, respectively, without considering perguisite on exercising shares under ESOP.

2) Percentage increase in the median remuneration of the employees in the financial year: (6%)

3) Number of permanent employees on the rolls of Company as at March 31,2019:4,082 employees.

4) The average increase in median remuneration of the employees other than managerial personnel was (6%) as compared to the increase in the managerial remuneration by 48%*.

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

Increase by48%for managerial personnel is due to perguisites on exercising shares under ESOP during the financial year. The increase will be 20% for managerial personnel without considering perguisites on exercising shares under ESOP.

Further, a statement containing particulars of top ten employees in terms of the remuneration drawn and employees drawing remuneration in excess of the limits set out in Rule 5(2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided as part of the Directors Report. However, in terms of provisions of Section 136 of the said Act, the Annual Report is being sent to all the members of the Company and others entitled thereto, excluding the said statement. Any member interested in obtaining such particulars may write to the Company Secretary. The said information is also available for inspection at the Registered Office of the Company during working hours till the date of Annual General Meeting.

RISK MANAGEMENT

Requisite information is provided under Management Discussion and Analysis Report which forms part of the Annual Report.

COMPLIANCE OF SECRETARIAL STANDARDS

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

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT, 2013

Requisite information is provided under Corporate Governance Report which forms part of the Annual Report.

ACKNOWLEDGEMENT

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

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

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

For Eicher Motors Limited

Siddhartha Lal S. Sandilya

Managing Director Chairman

DIN: 00037645 DIN:00037542

Place: Gurugram,Haryana

Date: May 10,2019

Director’s Report