The Directors have pleasure in presenting their 10th Annual Report on
the business and operations of the Company together with the Audited
Statement of Accounts for the year ended March 31, 2015.
During the year under review, performance of your Company is as under:
With the main customer being, Hero MotoCorp Limited (HMCL), the Company
continues to maintain its growth at a constant rate. Other customers of
the Company like BOSCH, DENSO etc have increased their sales/business
share marginally as compared to last year. To cater to the requirements
of the customers, the company is utilising its available resources to
achieve a satisfactory growth rate. With the increase in growth rate of
Customers, the Company is expecting to maintain its profits. There is
pressure on the EBITDA margin, due to competitive pricing and increase
in employees cost.
Particulars Year ended Year ended
March 31,2015 March 31,2014
Gross Sales & Other Income 47,012.08 41,937.79
Profit before Depreciation and Interest 8,407.20 8,031.80
Depreciation 2,745.27 3,090.92
Interest 1,997.13 2,045.89
Profit before Taxation 3,664.79 2,894.99
Provision for Taxation (Deferred & Current) 728.13 51.75
Profit after Taxation 2936.66 2,843.24
Profit available for appropriations 2936.66 2,843.24
Amount transferred to General Reserve 300.00 300.00
Proposed Dividend on Equity Shares 600.00 450.00
Tax on Dividend 122.14 76.48
Profit after Appropriations 1914.52 2,016.76
State of Company''s Affairs and Future Outlook
During the year under review, your Company has taken measures to
enhance operational efficiencies by focusing on improving yields,
reducing rejections and enhancing capacity utilisation.
The total sales of the Company increased by 12.10% from Rs. 41,937.79
Lacs in 2013-14 to Rs.47,012.08 lacs in 2014-15. Operating profit
(PBDIT) of the company has increased by 4.67% from Rs. 8,031.80 Lacs in
2013-14 to Rs. 8,407.20 Lacs.
The overall performance of the company can be termed as satisfactory.
Transfer to General Reserve
The Board proposes to transfer an amount of Rs.300 lacs to General
Reserve. The balance amount of Rs. 11,703.83 lacs (Previous year Rs.
9,964.36 lacs) will be retained as surplus in the statement of Profit
and Loss Account.
The Directors are pleased to inform that in order to meet the
ever-increasing demand; the Company has planned to set up two new
plants at Bangalore and Rohtak location. Bangalore plant is expected
to be operationalised in H2 of FY16 and Rohtak plant is expected to be
in operation by H1 of FY17.
The company is working towards the PM''s Make in India deliberation
through Bangalore plant as the production from this plant will help in
import substitution of indigenised products.
Your directors are pleased to recommend a final dividend of 60% i.e.
Rs. 1.20 per equity share of the face value of Rs. 2/- each for the
year ended March 31, 2015 which is provided for in the accounts
absorbing a sum of Rs. 6 crore, if approved by the members in the
ensuing Annual General Meeting. Dividend will be tax free in the hands
of shareholders, as the Company will bear the dividend distribution tax
of Rs. 122.14 lacs (Previous year Rs. 76.48 lacs). The dividend paid
during the previous year was 45% (Rs. 4.50 per share).
The Register of Members and Share Transfer Books will remain closed
from Monday, August 31, 2015 to Monday, September 07, 2015 (both days
(a) Split of Equity Shares: During the Financial Year 2014- 15, the face
value of Equity Shares of the Company has been split from Rs. 10/- per
share to Rs. 2/- per share. The record date for the same was October 31,
(b) Issue of Bonus Shares: In the Board Meeting held on May 18, 2015,
the Board has recommended Bonus Issue of Shares to the existing Equity
Shares holders of the Company, in the proportion of 1(One) Equity Share
for every 1 (One) Equity Share held by them, subject to the approval of
shareholders in the ensuing Annual General Meeting.
(c) The paid up Equity Share Capital as on March 31,2015 was Rs. 10
Crore. During the year under review, the Company has not issued shares
with differential voting rights nor granted stock options nor sweat
equity. And also the Company has not accepted or repaid any Debentures,
Preference Share Capital and any Bond & Security during the financial
year, and none of the Directors of the Company hold any shares or
security of the Company. The Company does not has any Debentures,
Preferential Shares as on March 31, 2015.
(d) Your company has not made any provisions of money for purchase of
its own shares by employees or by trustees for the benefit of employees
during the year under review.
Extract of Annual Return
The extract of Annual Return, in format MGT -9, for the Financial Year
2014-15 is enclosed as Annexure - C to this report.
Meeting of Board of Directors
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the Financial Year 2014- 15, 5 meetings of the Board
of Directors of the company were held on 30-May-2014, 06-Aug-2014,
29-Sep-2014, 12-Nov-2014 and 14-Feb-2015. The intervening gap between
the Meetings was within the period prescribed under the Companies Act,
2013 and Listing Agreement. For details of the meetings of the board,
please refer to the Corporate Governance report, which forms part of
Particulars of Loan, Guarantees and Investments under Section 186 of
the Companies Act, 2013
The particulars of loans, guarantees and investments have been
disclosed in the financial statements.
Particulars of Contracts or Arrangements with Related Parties
All contracts /arrangements/transactions entered by the Company during
the financial year with the related parties were in the ordinary course
of business and on arm''s length basis and do not attract the provisions
of Sec 188 of the Companies Act, 2013. During the year, the Company had
not entered into any contracts /arrangements/transactions with related
parties which could be considered material in accordance with the policy
of the Company on materiality of related party transactions. Suitable
disclosure as required by the Accounting Standards (AS18) has been made
in the notes to the Financial Statements.
M/s. S. S. Kothari Mehta & Co., Chartered Accountants, existing
Statutory Auditors'' will retire at the conclusion of the ensuing Annual
General Meeting and seek re- appointment as Statutory Auditors of the
Company at the ensuing Annual General Meeting.
The Company has received letters from them to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified for re-appointment.
The Board of Directors recommends to the shareholders the appointment
of M/s. S.S. Kothari Mehta & Co. as Statutory Auditors of the Company
for the financial year 2015-16.
Explanation to Auditors'' Remarks
The comments on statement of accounts referred to in the report of the
auditors are self explanatory.
Material Changes Affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial
position of the company which have occurred between the end of the
financial year of the company to which the financial statements relate
and on the date of this report.
Your Company was able to raise the short-term/long term funds needed
for its working capital related requirements & term loans for new
capital expenditure at reasonable rates. By efficient management of
working capital, the Company has been able to reduce some interest
cost. The Company continues to focus on judicious management of its
working capital. During the year under review, the financial position
of the Company was satisfactory.
Significant or Material Orders passed by the Regulators
No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company''s
operations in future.
Changes in the Nature of Business
There is no change in the nature of the business of the Company during
the Financial Year 2014-15.
Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The Company continues to use the latest technologies for improving the
productivity and quality of its products and components. The details of
Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are
attached as Annexure - D to this Report.
The promoters of the Company i.e. Dayanand Munjal Investments Private
Limited (DMIPL) hold 37,397,975 equity shares of Rs. 2/- each which
represents 74.80% of the paid up equity capital of the Company.
Your company continues to be a subsidiary company of DMIPL.
Subsidiary Companies, Joint Ventures Or Associate Companies
The Company neither has any Subsidiaries, joint ventures or associate
companies nor any company have become or ceased to be its Subsidiaries,
joint ventures or associate companies during the year.
Details of Directors and Key Managerial Personnel
Mr. Satyanand Munjal, Mr. Brijmohan Lal Munjal and Mr. O. P. Munjal have
resigned from the Board of Directors of Company w.e.f August 06, 2014.
The Board of Directors places on record their appreciation for the
valuable services and guidance provided by them as Directors of the
Mr. Davendra Ujlayan, Chief Financial Officer has resigned from the
post of Company Secretary w.e.f. February 14, 2015 and Ms. Shivani
Kakkar has been appointed as the Company Secretary and Compliance
Officer of the Company w.e.f. February 14, 2015.
Mrs. Charu Munjal and Dr. Anil Kumar Gupta, Whole Time Directors of the
Company, retire by rotation at the ensuing Annual General Meeting and
being eligible, offer themselves for re-appointment. Brief profile of
the Director, as required by the Listing Agreement provisions, is given
in the Notice / Corporate Governance Report forming part of this Annual
The appointment/re-appointments form part of the Notice of the Tenth
Annual General Meeting and the relevant Resolutions are recommended for
Declaration by Independent Director
The Company has received necessary declaration from each Independent
Director under section 149 (7) of the Companies Act, 2013, that he/she
meets the criteria of Independence laid down in Section 149(6) of
Companies Act, 2013 and Clause 49 of the Listing Agreement.
Statement in Respect of Adequacy of Internal Financial Control with
Reference to the Financial Statements Your company has adequate
internal control for its business processes across departments to
ensure efficient operations, compliance with internal policies,
applicable laws and regulations. The internal controls are
complemented, on an on-going basis, by an extensive program of internal
audits being implemented throughout the year. The internal controls are
designed to ensure that the financial and other records of the company
are reliable for preparing financial statement and other data for
maintaining the accountability of assets in conformity with established
accounting principles and that the assets of the company are adequately
safe-guarded against any significant misuse or loss.
The Company also has an internal audit system which is conducted by an
independent firm of Chartered Accountants. A summary of Internal audit
report and observations thereon are reviewed by the Audit Committee on
regular basis and have been found to be adequate.
During the year, the Company has not accepted any fixed deposit.
Receipt of any commission by MD / WTD from a Company
Details of commission received by Mr. Neeraj Munjal, Managing Director
and Mrs. Charu Munjal, Whole Time Director is as follows:
(Amount in Lacs)
Mr. Neeraj Munjal, Mrs. Charu Munjal,
Managing Director Whole Time Director
Commission 50.00 79.00
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 M/s Satyender Kumar &
Associates, a proprietorship firm of Company Secretaries to undertake
the Secretarial Audit of the Company. Secretarial Audit Report in
prescribed format MR-3 is annexed as Annexure - E to this Board''s
Corporate Social Responsibility (CSR) Policy
During the year, your directors have constituted the Corporate Social
Responsibility Committee comprising with the following members:
Mr. Bhagwan Dass Narang - Chairman
Dr. Anil Kumar Gupta - Member
Mrs. Charu Munjal - Member
The details about the policy indicating the activities to be undertaken
by the Company, activities implemented by the company and the amount
spent on CSR activities as per the provisions of Companies (Corporate
Social Responsibility Policy) Rules, 2014, is annexed as Annexure - F to
The Audit Committee comprises mainly of Independent Directors and the
composition is as under:
Mr. Surrinder Lal Kapur - Chairman
Mr. Bhagwan Dass Narang - Member
Dr. Vinayshil Gautam - Member
Mr. Sunil Kant Munjal - Member
Dr. Anil Kumar Gupta - Member
The terms of reference of the Audit Committee are wide enough to cover
the matters specified for the Audit Committee under Clause 49 of the
Listing Agreement as well as Section 177 of the Companies Act, 2013;
the detailed terms of reference are as mentioned in the Annexure B of
the Board Report. During the year, the Board has accepted all
recommendation of Audit Committee and accordingly no disclosure is
required to be made in respect of non-acceptance of the recommendation
of the Audit Committee by the Board.
Nomination & Remuneration Committee
Nomination and Remuneration Committee (NRC) has been constituted
according to section 178(5) of the Companies Act, 2013 and the
composition is as under:
Dr. Vinayshil Gautam - Chairman
Mr. Bhagwan Dass Narang - Member
Mr. Surrinder Lal Kapur - Member
Mr. Sunil Kant Munjal - Member
The detailed terms of reference are as mentioned in the Annexure B of
the Board Report.
Risk Management Policy
In order to mitigate the risks, the Company has adopted the
implementation of the risk management policy focusing on the elements
of risks which in the opinion of the Board may threaten the existence
of the company.
The Company has constituted a risk management committee, the
constitution and the terms of reference of the same are mentioned in
the Annexure B of the Board Report.
The Board of Directors has carried out an annual evaluation of its own
performance, Board committees and individual directors pursuant to the
provisions of the Act and the corporate governance requirements as
prescribed by Securities and Exchange Board of India (SEBI) under
Clause 49 of the Listing Agreements (Clause 49).
The performance of the Board was evaluated by the Board after seeking
inputs from all the directors on the basis of the criteria such as the
Board composition and structure, effectiveness of board processes,
information and functioning, etc.
The performance of the committees was evaluated by the board after
seeking inputs from the committee members on the basis of the criteria
such as the composition of committees, effectiveness of committee
meetings, etc. The Board and the Nomination and Remuneration Committee
(NRC) reviewed the performance of the individual directors on the
basis of the criteria such as the contribution of the individual
director to the Board and committee meetings like preparedness on the
issues to be discussed, meaningful and constructive contribution and
inputs in meetings, etc. In addition, the Chairman was also evaluated
on the key aspects of his role.
Separate Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act 2013
and clause 49 of the listing agreement, a separate meeting of
Independent Directors was held on March 24, 2015. In a separate meeting
of independent Directors, performance of non-independent directors,
performance of the board as a whole and performance of the Chairman was
evaluated, taking into account the views of executive directors and
non-executive directors. 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
Postal Ballot updates
During the year under review, the Company conducted the postal ballot
for taking approval of shareholders and declared the results on
December 29, 2014 for passing the following resolutions:
(a) Creation of Mortgage/Charge over the movable and immovable
properties of the Company under Section 180(1)(a) of the Companies Act,
(b) Increase in Sitting Fees/Commission of Independent Directors
Policy on directors'' appointment and remuneration and other details
The Company''s policy on directors'' appointment and remuneration and
other matters provided in Section 178(3) of the Act has been disclosed
in the corporate governance report, which forms part of the Board''s
Disclosure on Establishment of a Vigil Mechanism
The Company has adopted a policy on vigil mechanism for directors and
employees to report their genuine concerns or grievance to be the
Vigilance and Ethics Officer. The policy is available on the company''s
website www. shivamautotech.com.
The shares of your Company are listed at The National Stock Exchange of
India Limited and BSE Limited, and pursuant to Clause 38 of the Listing
Agreement, the Annual Listing fees for the year 2015-16 have been paid
to them well before the due date i.e. April 30, 2015. The Company has
also paid the annual custodian fees for the year 2015- 16 in respect of
Shares held in dematerialized mode to National Securities Depository
Limited (NSDL) & Central Depository Services Limited (CDSL).
Your Company is committed to follow the highest standards and
principles of Corporate Governance with all integrity and fairness. The
Company always places major thrust on managing its affairs with
diligence, transparency, responsibility and accountability thereby
upholding the important dictum that an organisation''s corporate
governance philosophy is directly linked to high performance.
A certificate from the Practising Company Secretary regarding the
compliance of the conditions of Corporate Governance by the Company
stipulated under Clause 49 of the Listing Agreement is also attached to
Separate detailed chapters on Corporate Governance, Additional
Shareholder information and Management Discussion and Analysis are
attached herewith and form part of this Report Declaration by CEO/CFO
that the Board Members and Senior Management Personnel have complied
with the Code of Conduct for the Financial Year 2014-15 is annexed with
The information required under Section 197 of the Act read with Rcxule
5 of Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is attached as Annexure - G to this Report.
Disclosures under Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013
Your Company is committed to provide work environment that ensures
every employee is treated with dignity and respect and afforded
equitable treatment. The Company has adopted the policy for prevention
of sexual harassment at workplace. An appropriate complaint mechanism
in the form of Complaints Committee has been created in the Company
for time-bound redressal of the complaint made by the victim.
Directors'' Responsibility Statement
Pursuant to the provisions of Section 134 (5) of the Companies Act,
2013, as amended, with respect to the directors'' responsibility
statement, it is hereby confirmed:
(i) That in preparation of accounts for the financial year ended March
31, 2015, the applicable accounting standards have been followed along
with proper explanation relating to the material departures;
(ii) That the directors'' of the company have selected such accounting
policies and applied them consistently and made judgements and
estimates 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, 2015
and of the profits of the Company for the year ended March 31, 2015;
(iii) That the directors'' of the company 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; and
(iv) That the directors'' of the company have prepared the annual
accounts on a going concern basis.
(v) That the directors, in the case of a listed company, had laid down
internal financial controls to be followed by the company and that such
internal financial controls are adequate and were operating
(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.
Environment, Health & Safety
The Company is very keen on its responsibilities with respect to the
clean environment. Company''s Health and Safety Policy commits to
provide a healthy and safe work environment to all employees.
The Company regularly conducts counselling and safety review meetings
for the employees to appraise and educate them on the adoption of
safety measures and avoidance of unsafe practices. Safe operating
procedures, standards and systems have been laid down at all
manufacturing locations. Prompt medical assistances is provided to its
employees. The Company has an internal plant dispensary which operates
round the clock and is managed by the qualified doctors supported by
staff who are available for addressing health issues of employees.
Human Resource Development
The Company continues its focus on retention through employee engagement
initiatives and provides a holistic environment where employees get
opportunities to realize their potential. The Company believes that its
human capital is the most valuable asset that helps it remain
competitive. The Company''s policy not only meets all applicable
statutory requirements but also focuses on motivation, learning and
training of employees. Human resources being one of the most important
factors of production, the Company is initiating measures towards
competence and overall development of people at all levels to be future
ready. The Company arranges training sessions for its employees to
empower and upgrade them to achieve business motives and help them build
The Company encourages long-term commitment by rewarding its people for
the opportunities they create through KAIZEN activities and the value
generated for customers and shareholders. The Company''s progressive
workforce policies and benefits, various employee engagement and
welfare initiatives program, have addressed stress management, promoted
work life balance and helped the Company maintain a low attrition rate.
The Directors are pleased to record their appreciation for the services
rendered by the employees and staff at all levels.
The Directors express their appreciation for the sincere co-operation
and assistance of Central and State Government Authorities, Bankers,
Customers, Suppliers and Business Associates. Your Directors also wish
to place on record their deep sense of appreciation for the committed
services by your Company''s employees. Your Directors acknowledge with
gratitude the encouragement and support extended by our valued
For and on behalf of the Board For and on behalf of the Board
Neeraj Munjal Dr. Anil Kumar Gupta
Managing Director Whole Time Director
DIN: 00037792 DIN: 02643623
Place: New Delhi
Date: August 4, 2015