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Igarashi Motors Directors Report, Igarashi Motors Reports by Directors
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Igarashi Motors

BSE: 517380|NSE: IGARASHI|ISIN: INE188B01013|SECTOR: Electric Equipment
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Directors Report Year End : Mar '17    Mar 16

To

The Shareholders,

The Directors have pleasure in presenting their Twenty Fifth Annual Report of your Company, together with the Audited Accounts for the year ended 31st March 2017.

FINANCIAL RESULTS

Your Company’s performance during the year as compared with that during the previous year is summarized below:

(Rs..in Lakhs)

Particulars

2016-17

2015-16

Manufacturing Sales

50,789.43

44,498.37

Add : Other Income

1,467.02

1,430.30

Total Income

52,256.45

45,928.67

Less :

(i) Materials & Manufacturing Expenses

31,858.21

28,205.54

(ii) Value Addition Cost

7,064.30

6,091.00

Profit before Depreciation, Amortization

13,333.94

11,632.13

Less :

1,896.28

Depreciation & Amortization Expenses

2,203.08

Profit Before Tax

11,130.86

9,735.85

OPERATIONS

Your Company achieved a Revenue of Rs.. 50,789.43 Lakhs an increase of about 14.14% over the previous year, Operating Profit before Depreciation & Amortization amounted to Rs.. 13,333.94 Lakhs. Profit before Tax amounted to Rs.. 11,130.86 Lakhs an increase of 14.33% about over the previous year. During the year, your Company acquired additional space of three plots on lease from MEPZ-SEZ for setting up of manufacturing lines and stores operations.

DIVIDEND

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. (“Listing Regulations”), your Company is appearing in Top Five Hundred listed entities based on the Market Capitalization (as on March 31, 2016) due to which your Company has formulated a Dividend Distribution Policy. The Board of Directors of the Company had approved the Dividend Distribution Policy on November 10, 2016 in line with the Listing Regulations.

The Policy has been hosted on the website of the Company at : http://www.igarashimotors.com/uploads/investor/ pdf/14788383387IMIL-Dividend_Distribution_Policy.pdf

In line with the said Policy, your Directors are pleased to recommend a dividend of Rs.. 6.61/- per Equity Share on Face value of Rs.. 10/- each for the year ended March 31, 2017.

The Board has not recommended any transfer to general reserve from the profits of the year under review.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS/ SHARES TO IEPF

During the year, there are no unclaimed dividends/Shares which have to transferred to IEPF by the Company.

RESERVES

The Reserves at the end of the year 31st March, 2017 is at Rs.. 33,974.39 Lakhs as against the Total Reserves of Rs.. 26,380.58 Lakhs as at 31st March 2016.

MATERIAL CHANGES

No material changes or commitments have occurred between the end of the Financial Year and the date of this Report which affect the financial statements of the Company in respect of the reporting year.

MERGER

The Board of Directors is continuing the evaluation of business re-organization proposal, including amalgamation of group entities for taking advantage of operational synergies.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

Your Company is holding 9.88% stake in Joint Venture Company viz., Bosch Electrical Drives India Private Limited as on March 31, 2017. Disclosure in Form AOC - 1 annexed to this report.

Your Company has no Subsidiary Companies as on March 31, 2017.

DEPOSITS

During the year under review, your Company has not invited or accepted any deposits from the public under Section 76 of the Companies Act, 2013 and Rules made there under.

EMPLOYEE STOCK OPTION SCHEME

Your Company is proposes to launch a new Employees Stock Option Plan i.e., ESOP 2017 (‘Plan’) as per the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Accordingly two resolutions are being placed at the forthcoming Annual General meeting.

SHARE CAPITAL

Your Company’s Paid-up equity share capital is Rs.. 3,060.84 Lakhs as on March 31, 2017. There is no change in Share Capital during the year under review.

DIRECTORS

During the year, there is no change in the directorship. The shareholders at the 24th Annual General Meeting Regularized the appointment of Mr. Akhil Awasthi and Mrs. Eva Maria Rosa Schork as Non Executive Non Independent Director who is liable to retire by rotation.

Mrs. Eva Maria Rosa Schork, Director retires by rotation at forthcoming Annual General Meeting and being eligible, offers her for re-appointment. The brief resume and other details as required under the Listing Regulations are provided in the Notice of the 25th Annual General Meeting of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(7) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).

Mr. Hemant M Nerurkar and Mr. S Radhakrishnan were appointed as Independent Directors for 3 years upto July 29,2017 at the 22nd Annual General Meeting held on July 30,2014. Since, their term of office ending on July

29,2017, pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors at its meeting held on May 11, 2017 appointed Mr. Hemant M Nerurkar and Mr. S Radhakrishnan as Independent Directors for further 3 year period until July 29,2020 subject to approval of shareholders at the ensuing Annual General Meeting. The Notice under Section 160 of the Companies Act, 2013 has been received from member signifying the intention to propose Mr. Hemant M Nerurkar and Mr. S Radhakrishnan as a candidate for the office of Independent Director and accordingly two resolutions are being placed at the forthcoming Annual General Meeting.

Further, the details about the above directors are given in the Notice of the ensuing Annual General Meeting being sent to the shareholders along with the Annual Report.

The details of familiarization programmes to Independent Directors is put up on the website of the Company at the link: http://www.igarashimotors.com/investor-list.phpRs.invescatid=23.

EVALUATION OF THE BOARD’S PERFORMANCE

Your Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive director. Pursuant to the provisions of Companies Act, 2013 and Regulation 25 of the Listing Regulations, the Board and the Nomination and Remuneration Committee have carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Committee. Each Board member completed a questionnaire providing feedback on the functioning and overall engagement of the Board and its committees on various parameters such as the composition, execution of specific duties, quality, quantity and timelines of flow of information, deliberations at the meeting etc.,. Besides this, one -on-one meeting of the individual directors with the Chairman of the Board was also conducted as a part of self-appraisal and peer group evaluation. The Directors were also asked to provide their valuable feedback and suggestions about the overall functioning of the Board and its committees. In a separate meeting of Independent Directors, performance of non-Independent Directors and the board as a whole was evaluated. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees, and individual directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

NUMBER OF MEETINGS OF THE BOARD

During the year, Five Board Meetings were held on May 19, 2016, August 04, 2016, November 10, 2016, December 26, 2016 and February 08, 2017. The Company’s last year Annual General Meeting was held on August 04, 2016. The particulars of Directors, their attendance during the financial year 2016-2017 has been disclosed in the Corporate Governance Report forming part of this Annual Report.

For details of the Committees of the Board, please refer to the Corporate Governance Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In compliance of Section 134 (5) of the Companies Act, 2013 your directors, on the basis of information made available to them, confirm the following:

a) In the preparation of the annual accounts for the financial year ended March 31,2017, the applicable Accounting Standards have been followed with explanation relating to material departures, if any;

b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for that period;

c) Proper care has been taken for maintenance of adequate accounting for safe guarding the assets of the Company and detecting fraud and other irregularities;

d) They have laid down Internal Financial Controls to be followed by the Company and the Audit Committee of the Board of Directors shall ensure that the internal control is adequate and robust;

e) The annual accounts are prepared on a going concern basis;

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

DEMATERIALISATION OF SHARES

99.72% of the Company’s paid up Equity Share Capital is in dematerialized form and balance 0.28% is in physical form as on March 31, 2017. The Company’s Registrars are Cameo Corporate Services Limited, No.1, Subramaniam Building, Club House Road, Chennai 600 002.

CREDIT RATING

During the year under view, CARE has given credit ratings of CARE A for long term debt, CARE A1 for short term debt.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION

The information required to be furnished pursuant to Section 134(3) (m) of the Companies Act, 2013, is appended hereto and forms part of this Report.

FOREIGN EXCHANGE EARNINGS AND OUTGO

The details of expenditure and earnings in foreign currency are given as an annexure to this Report.

PARTICULARS OF LOANS & INVESTMENTS BY THE COMPANY

Details of loans and investments by the Company, to other body corporate or persons are given in notes to the financial statements.

RELATED PARTY TRANSACTIONS

All the related party transactions entered during the year were in ordinary course of business and on arm’s length basis. Your Company obtained shareholders’ approval for material related party transactions though such transactions being entered during ordinary course of business and on arm’s length basis as required under Listing Regulations. Your Company’s Policy on Related Party Transactions which can be accessed through weblink : http://www.igarashimotors.com/investor-list.phpRs.invescatid=18.

Your Company presents a statement of all related party transactions before the Audit Committee. Details of such transactions are given in the accompanying financial statements. Disclosure of Related Party transaction is annexed with the report as per the format prescribed.

DISCLOSURE UNDER THE SExUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment and Nondiscrimination at Work Place in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

All employees (permanent, contractual, temporary, trainees) are covered under this policy.

An Internal Complaints Committee (ICC) was set up to redress complaints received regarding sexual harassment and discrimination at work place.

During the year ended March 31, 2017, the ICC has received no complaints pertaining to sexual harassment / discrimination at work place.

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel (KMP) of the Company are Mr. P Mukund, Managing Director, Mr. R Chandrasekaran, Chief Financial Officer and Mr. P Dinakara Babu, Company Secretary. During the year, there has been no change in the KMP.

MANDATORY AUDITOR ROTATION

M/s. Sharp & Tannan, Chartered Accountants were appointed as Statutory Auditors of the Company at the 24th Annual General Meeting held on August 04,2016 from the conclusion of that Annual General Meeting till the conclusion of 25th Annual General Meeting to be held in the year 2017. M/s. Sharp & Tannan, Chartered Accountants would vacate office as Auditors of the Company at the conclusion of ensuing Annual General Meeting pursuant to Section 139(2) (b) of the Companies Act, 2013 dealing with compulsory rotation of auditors. Thus, Sharp & Tannan, Chartered Accountants would be carrying out limited review of first quarter financial results of FY2017-18.

Pursuant to applicable provisions of the Companies Act, 2013, on the recommendation of the Audit Committee, it is proposed to appoint M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as Statutory Auditors of the Company to hold office from conclusion of the 25th Annual General Meeting of the Company until 30th Annual General Meeting. Necessary resolution for the appointment of M/s. B S R & Co. LLP as Statutory Auditors is included in the Notice of the Annual General Meeting.

The Board places on record it’s appreciation for the contribution of M/s. Sharp & Tannan, Chartered Accountants during their past 25 years tenure as Auditors of your Company.

AUDITOR’S REPORT

No qualification, adverse remarks or disclaimer made by the Statutory Auditors with regard to the financial statements for the financial year 2016-17.

The Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

INDIAN ACCOUNTING STANDARDS

Pursuant to the notification, issued by the Ministry of Corporate Affairs dated February 16,2015 relating to the Companies (Indian Accounting Standard) Rules, 2015, your Company will adopt “IndAS” with effect from April 01,2017.

The implementation of IndAS is a major change process for which the Company had dedicated considerable resources. The impact of the Change on adoption of IndAS has been assessed and the Company is ready to adopt IndAS.

SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. S Bhaskar, Partner, BP & Associates, Company Secretaries (CP No.:8315, ACS: 10798) to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is given in Annexure to this Report. The Report does not contain any qualification.

COST AUDITOR

As your Company has been operating from MEPZ-Special Economic Zone, appointment of Cost Auditor is exempted under Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014.

extract of the annual return

Relevant extract of annual return to be filed with the Registrar of Companies for financial year 2016 -17 is given in Annexure to this Report.

INTERNAL CONTROL SYSTEMS

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management.

Internal Audit is carried out in a programmed way and follow up actions were taken for all audit observations. Your Company’s Statutory Auditors have, in their report, confirmed the adequacy of the internal control procedures.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company has constituted a CSR Committee. The CSR Committee comprises of four members and the Chairman of the Committee is an Independent Director. CSR Committee of the Board has developed a CSR Policy. The CSR Committee met three times during the year on May 19,2016, November 10,2016 & February 08,2017.The details of role and functioning of the Committee are given in Annexure to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report of the Company for year under review as required under Regulation 17 of Listing Regulations is given as a separate Statement in the Annual Report.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

Your Company has adopted a Risk Management Policy and constituted a Risk Management Committee for monitoring the same. The Company has been addressing various risks impacting the Company which is provided elsewhere in this Annual Report in Management Discussion and Analysis Report.

BUSINESS RESPONSIBILITY REPORT

Your Company is one of the top 500 listed entities (by Market Capitalization as on March 31,2016). Thus, Business Responsibility Report is forming part of the Annual Report for the financial year ended March 31,2017 as required under Regulation 34(2)(f) of Listing Regulations. Your Company has hosted Business Responsibility Report on the Company’s website at : http://www.igarashimotors.com/investor-list.phpRs.invescatid=17.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Act read with Rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (‘Rules’) in respect of remuneration and other details is given as a separate Statement in the Annual Report.

The remuneration paid to all Key Management Personnel was in accordance with remuneration policy adopted by the Company.

In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3) of Rules, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules should be provided in the Annual Report. None of the Company’s employees were covered by the disclosure requirement.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s operations.

HUMAN RESOURCES

Your Company has 617 number of permanent employees on the rolls of the Company as on March 31, 2017. The Board of Directors wishes to place on record their sincere appreciation to all the employees of the Company for their dedication, commitment and loyalty to the Company.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding compliance of the requirements of Corporate Governance pursuant to Listing Regulations is annexed hereto.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has a vigil mechanism established Whistle Blower Policy, as per the requirement of the Companies Act, 2013 and the Listing Regulations, to enable all employees and the directors to report in good faith any violation of the Policy. The Audit Committee of the Board oversees the functioning of Whistle Blower Policy. Your Company has disclosed the details of Whistle Blower policy on its website: http://www.igarashimotors.com/investor-list. phpRs.invescatid=18.

CODE OF CONDUCT

Your Company has laid down a Code of Conduct Policy which can be accessed on the Company’s website: http://www.igarashimotors.com/investor-list.phpRs.invescatid=18.

LISTING

The shares of your Company continued to be listed at National Stock Exchange Limited and Bombay Stock Exchange Limited. Listing fee has already been paid for the financial year 2017-18.

ACKNOWLEDGEMENT

The Board places on record its sincere appreciation for the continued support from the relevant Government Authorities, Promoters, Shareholders, Suppliers, Customers, and other business associates, for their strong support.

For and on behalf of the Board of Directors

Place : Chennai K K Nohria

Date : May 11, 2017 Chairman

Source : Dion Global Solutions Limited
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