Your Directors have pleasure in presenting the 39th annual report together with the
audited financial statements for the year ended 31st March, 2020.
Financial Results
The Company's financial performance during 2019-20 as compared to the previous year
2018-19 is summarised below:
|
|
(Rs in million) |
|
|
|
Particulars |
2019-20 |
2018-19 |
Total revenue |
790,314 |
885,813 |
Profit before tax |
70,648 |
104,656 |
Tax expense |
14,142 |
29,650 |
Profit after tax |
56,506 |
75,006 |
Retained Earnings |
|
|
Balance at the beginning of the year |
407,016 |
363,008 |
Profit for the year |
56,506 |
75,006 |
Other comprehensive income arising from remeasurement of defined benefit obligation* |
(518) |
(284) |
Amount transferred to employee welfare fund |
(750) |
(772) |
Income on employee welfare fund |
(117) |
(36) |
Expenses on employee welfare fund |
132 |
- |
Amount transferred to scientific research fund |
(750) |
(772) |
Payment of dividend on equity shares |
(24,166) |
(24,166) |
Corporate dividend tax paid |
(4,968) |
(4,968) |
Balance at the end of the year |
432,385 |
407,016 |
*net of income tax of Rs 200 million (previous year Rs 151 million)
Financial Highlights
The total revenue was Rs 790,314 million as against Rs 885,813 million in the previous
year showing a decrease of 10.78%. Sale of vehicles in the domestic market was 1,461,126
units as compared to 1,753,700 units in the previous year showing a decrease of 16.7%.
Total number of vehicles exported was 102,171 units as compared to 108,749 units in the
previous year showing a decrease of 6.05%.
Profit before tax (PBT) was Rs 70,648 million against Rs 104,656 million showing a
decrease of 32.50% and profit after tax (PAT) stood at Rs 56,506 million against Rs 75,006
million in the previous year showing a decrease of 24.66%.
Dividend
The Board recommends a dividend of Rs 60/- per equity share of Rs 5/- each for the year
ended 31st March, 2020 amounting to Rs 18,125 million. The Company has formulated a
dividend distribution policy which forms part of the annual report. No amount was carried
to General Reserve.
Operational Highlights
The operations are exhaustively discussed in the Management Discussion and
Analysis' forming part of the annual report.
Consolidated Financial Statements
In accordance with Indian Accounting Standard (IND AS) - 110 on Consolidated Financial
Statements read with Indian Accounting Standard (IND AS) - 28 on Investments in Associates
and Joint Ventures, the audited consolidated financial statements are provided in the
annual report.
A report containing the names of the companies which have become or ceased to become
subsidiaries, joint ventures and associates, their performance, financial position and
their contribution to the overall performance of the Company as required by the Companies
Act, 2013 (Act') is provided as an annexure to the consolidated financial statements
and hence are not repeated here for the purpose of brevity. (Form AOC-1).
Annual Return
The details forming part of the extract of the annual return in Form MGT-9 is attached
as Annexure - A. The annual return of the Company for the year 2018-19 is available on its
website at https:// www.marutisuzuki.com/corporate/investors/company-reports
Material Subsidiaries
In accordance with Regulation 16(1)(c) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (Listing Regulations'), the Company has a policy for
determining material subsidiaries. The policy is available on its website at
https://marutistoragenew.blob.core.windows.net/msilintiwebpdf/ Policy on Subsidiary
Companies.pdf
Particulars of Loans, Guarantees and Investments
Details of loans, guarantees and investments, if any, covered under the provisions of
Section 186 of the Act are given in the notes forming part of the financial statements.
Board Meetings
A calendar of meetings is prepared and circulated in advance to the Directors. During
the year, five board meetings were held, the details of which are given in the Corporate
Governance Report
Audit Committee
For composition of the audit committee, please refer to the Corporate Governance
Report.
Independent Directors
The Company has received declarations of independence in accordance with the provisions
of Section 149 of the Act and Listing Regulations from all the Independent Directors.
Under the relevant provisions of the Companies Act and the Listing Regulations, one
separate meeting of the Independent Directors was held during 2019-20. The Board is of the
opinion that the Independent Directors of the Company possess requisite qualifications,
experience and expertise and hold highest standards of integrity. The details of the
familiarisation programmes for the Independent Directors are available on the website of
the Company at https://marutistoragenew.blob.core.
windows.net/msilintiwebpdf/Familiarization Programme.pdf
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information and
explanations obtained, in terms of Section 134 of the Act, your Directors state that:
a) in the preparation of the annual accounts, the applicable accounting standards have
been followed and proper explanations provided relating to material departures, if any;
b) such accounting policies have been selected and applied consistently and judgments
and estimates made 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 of
the Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) internal financial controls were followed by the Company and they are adequate and
are operating effectively; and
f) proper systems have been devised to ensure compliance with the provisions of all
applicable laws and such systems are adequate and operating effectively
Directors and Key Managerial Personnel (KMP)
Mr. K. Ayukawa and Mr. T. Hashimoto shall retire by rotation in the ensuing Annual
General Meeting of the Company and, being eligible, have offered themselves for
re-appointment.
Ms. Lira Goswami was appointed as an Independent Director in the last Annual General
Meeting (AGM) for a period of five years from 28th August, 2019 to 27th August, 2024. Mr.
D. S. Brar and Mr. R. P. Singh were re-appointed as Independent Directors in the last AGM
for a period of five years from 28th August, 2019 to 27th August, 2024. Ms. Renu Sud
Karnad, Independent Director, resigned with effect from close of the business hours of
31st March, 2020 due to the reasons given in the Corporate Governance Report. On the
recommendation of the Nomination and Remuneration Committee, the Board appointed Mr.
Maheswar Sahu as an Independent Director for a period of five years with effect from 14th
May, 2020 till 13th May, 2025 subject to the approval of the shareholders in the Annual
General Meeting. Pursuant to the nominations by Suzuki Motor Corporation, Mr. Seiji
Kobayashi was appointed as a Non-executive Director with effect from 25th October, 2019
and held his office till 4th December, 2019. Mr. Hiroshi Sakamoto was appointed as a
Non-executive Director with effect from 27th July, 2019 and held his office till 24th
October, 2019. Mr. Kenichiro Toyofuku was appointed as an Additional Director and
Whole-time Director designated as Director (Corporate Planning) with effect from 5th
December, 2019.
Risk Management
Pursuant to Regulation 21 of Listing Regulations, the Company has a Risk Management
Committee, the details of which are given in the Corporate Governance Report. The Company
has a Risk Management Policy and identified risks and taken appropriate steps for their
mitigation. For more details, please refer to the Management Discussion and Analysis
(MD&A).
Internal Financial Controls
Internal financial controls have been discussed under CEO/CFO Certification' in
the Corporate Governance Report.
Vigil Mechanism
The Company has in place an established and effective mechanism called the Whistle
Blower Policy (Policy). The mechanism under the Policy has been appropriately communicated
within the organisation. The purpose of this Policy is to provide a framework to promote
responsible whistle blowing by employees. It protects employees wishing to raise concerns
about serious irregularities, unethical behavior, actual or suspected fraud within the
Company.
The Chairman of the audit committee is the ombudsperson and direct access has been
provided to the employees to contact him through e-mail, post and telephone for reporting
any matter.
Related Party Transactions
The Company has a policy on related party transactions which is available on the
Company's website at https://marutistoragenew. blob.core.windows.net/msilintiwebpdf/Policy
on Related Party Transactions.pdf In terms of Section 134(3) (h) of the Act read with Rule
15 of the Companies (Meetings of Board and its Powers) Rules, 2014, there was no
transaction to be reported in Form AOC 2. The disclosure with respect to the transactions
with promoter and promoter group which is holding 10% or more of the shareholding in the
Company are given in the notes forming part of the financial statements.
Performance Evaluation
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the
annual performance evaluation of the Board, its committees and the Directors was carried
out as per the Nomination and Remuneration Policy of the Company. The evaluation of the
performance of the Board, its Chairman and the Non-independent Directors was carried out
by the Independent Directors. The evaluation of the performance of the Directors
individually was done by the Nomination and Remuneration Committee and the evaluation of
the performance of the Board, its committees and the individual Directors was done by the
Board. The criteria for the evaluation of individual Directors included a) the extent of
engagement and contribution to the affairs of the Company including by way of attendance
in board and committee meetings; b) ability to discharge their duties and obligations
diligently in the best interest of the Company; c) ability to provide effective leadership
and checks and balances towards sustaining the highest levels of corporate governance; d)
exercise duty of care and skill in the discharge of their functions; e) exercise
independence of judgment and bring about objectivity to the board process; and f)
safeguarding the interest of all the stakeholders specially the minority shareholders. The
evaluation criteria of the performance of the Board and its committees included,
inter-alia, their composition, attendance of Directors, participation levels, bringing
specialised knowledge for decision making, smooth functioning of the Board/committees and
effective decision making. The Directors expressed their satisfaction with the evaluation
process. The Board also noted that the Independent Directors had fulfilled the
independence criteria as specified in the Listing Regulations and were independent from
the management.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy is attached as Annexure B.
Corporate Social Responsibility (CSR)
The annual report on CSR activities containing details of CSR Policy, composition of
the CSR Committee and other prescribed details are given in Annexure C.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013
The Company has in place an Anti- Sexual Harassment Policy in line with the
requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and has also complied with its provisions relating to the
constitution of Internal Complaints Committee to redress complaints received regarding
sexual harassment.
The status of the complaints received by the Company during the year is as under:
a) Number of complaints filed |
4 |
b) Number of complaints disposed of |
2 |
c) Number of complaints pending as on the end of financial year |
2 |
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
Information in accordance with Section 134(3) (m) of the Act read with Rule 8 of the
Companies (Accounts) Rules, 2014 is attached as Annexure D.
Corporate Governance
The Company has complied with the corporate governance requirements, as stipulated
under the Listing Regulations. A certificate of compliance by auditors shall form part of
the annual report.
Secretarial Audit Report
In accordance with the provisions of Section 204 of the Act read with The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed
M/s RMG & Associates, a firm of Company Secretaries in practice to undertake the
Secretarial Audit for 2019-20. The report on secretarial audit is attached as Annexure E.
The report does not contain any qualification.
Secretarial Standards
The Company has complied with the Secretarial Standards issued by the Institute of
Company Secretaries of India.
Management Discussion and Analysis Report
The annual report has a detailed report on Management Discussion and Analysis.
Personnel
As required by the provisions of Section 197 of the Act read with Rule 5 of The
Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the particulars of the employees are set out in
Annexure F. However, as per the provisions of Section 136 of the Act, the annual report is
being sent to all the members of the Company excluding the aforesaid information. The said
information is available for inspection by the members at the registered office of the
Company up to the date of the ensuing Annual General Meeting. Any member interested in
obtaining such particulars may write to the Company Secretary at the registered office of
the Company.
Cost Auditors and Records
In accordance with the provisions of Section 148 of the Act read with Companies (Cost
Records and Audit) Rules, 2014, M/s R. J. Goel & Co., Cost Accountants, New Delhi
(Registration No. 000026) were appointed as the Cost Auditors of the Company to carry out
the cost audit for 2020-21. The maintenance of cost records as specified by the Central
Government under Section 148 (1) of the Act is required by the Company and such accounts
and records are made and maintained.
Auditors
The auditors, M/s Deloitte Haskins & Sells LLP were appointed in the 35th Annual
General Meeting and hold their office till the conclusion of the 40th Annual General
Meeting. A certificate has been obtained from Deloitte Haskins & Sells to the effect
that the Company is in compliance with the conditions of Foreign Direct Investment for the
downstream investment made by the Company.
CRISIL Ratings
The Company was awarded the highest financial credit rating of AAA/stable (long term)
and A1+ (short term) on its bank facilities by CRISIL. The rating underscores the
financial strength of the Company in terms of the highest safety with regard to timely
fulfillment of its financial obligations.
Quality
The Company has established and is maintaining an environment management system. During
the year, surveillance audit for ISO-14001 was carried out by M/s AVI, Belgium for the
manufacturing plants located at Gurugram, Manesar and R&D Centre in Rohtak. The
auditors recommended continuance of ISO-14001 for all manufacturing facilities.
The quality management system of the Company is certified as per ISO 9001:2015
standard. Regular assessments of the quality systems are done through surveillance audits
and re-certification assessments are done at every three years by an accredited third
party agency. The Company has an internal assessment mechanism to verify and ensure
adherence to defined quality systems across the Company.
Awards/Recognition/Rankings
The Company received many awards/recognitions/rankings during the year. Some of these
are mentioned hereunder:
a) National safety award' by Ministry of Labour and Employment, Government of
India and Platinum safety award' by FICCI.
b) Marketer of the year' for the 3rd time in a row by Marquee Award 2019.
c) The enterprise of the year-2019.'
d) Exceed platinum award'.
e) Swift won Motoring world car of the year' and Hatchback of the year' at
Motoring Awards.
f) Ertiga won MUV of the year' at Motoring Awards.
g) Mini SUV S-Presso won the following awards:
i) Hatchback of the year 2019' by News 18 Tech and Auto Awards 2019'.
ii) 'Budget Car of the year' by Autocar Awards 2020'.
iii) Entry level hatchback of the year' at Car India Awards 2020.
Acknowledgment
The Board of Directors would like to express its sincere thanks for the co-operation
and advice received from the Government of India, the State Governments of Haryana and
Gujarat. Your Directors also take this opportunity to place on record their gratitude for
timely and valuable assistance and support received from Suzuki Motor Corporation, Japan.
The Board also places on record its appreciation for the enthusiastic co-operation, hard
work and dedication of all the employees of the Company including the Japanese staff,
dealers, vendors, customers, business associates, auto finance companies, state government
authorities and all concerned without which it would not have been possible to achieve all
round progress and growth of the Company. The Directors are thankful to the members for
their continued patronage.
For and on behalf of the Board of Directors
|
|
R.C. Bhargava |
Kenichi Ayukawa |
Chairman |
Managing Director & CEO |
Gurugram |
|
13th May, 2020 |
|
|