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Your Directors have pleasure in presenting the 37th annual report together
with the audited financial statements for the year ended 31st March, 2018.
Financial Results
The Company's financial performance during the year 2017-18 as compared to the previous
year 2016-17 is summarised below:
(Rs. in million)
| Particulars |
2017-18 |
2016-17 |
| Total revenue |
840,399 |
795,663 |
| Profit before tax |
110,034 |
99,603 |
| Tax expense |
32,816 |
26,101 |
| Profit after tax |
77,218 |
73,502 |
| Retained Earnings |
|
|
| Balance at the beginning of the year |
313,189 |
250,037 |
| Addition due to amalgamation |
- |
2,475 |
| Profit for the year |
77,218 |
73,502 |
| Other comprehensive income arising from remeasurement of defined benefit obligation* |
(131) |
(100) |
| Payment of dividend on equity shares |
(22,656) |
(10,573) |
| Corporate dividend tax paid |
(4,612) |
(2,152) |
| Balance at the end of the year |
363,008 |
313,189 |
*net of income tax of Rs. 65 million (previous year Rs. 58 million)
Financial Highlights
The total revenue (net of excise) was Rs. 818,082 million as against Rs. 703,349
million in the previous year showing an increase of 16.31%. Sale of vehicles in the
domestic market was 1,653,500 units as compared to 1,444,541 units in the previous year
showing an increase of 14.46%. Total number of vehicles exported was 126,074 units as
compared to 124,062 units in the previous year showing an increase of 1.62%.
Profit before tax (PBT) was Rs. 110,034 million against Rs. 99,603 million showing an
increase of 10.47% and profit after tax (PAT) stood at 77,218 million against Rs. 73,502
million in the previous year showing an increase of 5.06%.
Dividend
The Board recommends a dividend of Rs. 80 per equity share of Rs. 5/- each for the year
ended 31st March, 2018 amounting to Rs. 29,134 million including dividend distribution tax
of Rs. 4,968 million. The Company has formulated a dividend distribution policy which
forms part of the annual report.
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)
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT-9 is attached
as Annexure - A.
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 the website of the Company
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 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 from all the Independent Directors. 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)
Ms. Renu Sud Karnad was appointed as an Independent Director on the Board of the
Company with effect from 27th July, 2017 Mr. Kazunari Yamaguchi was appointed
as a Whole-time Director designated as Director (Production) with effect from 26th
January, 2018 in place of Mr. Shigetoshi Torii who resigned with effect from 25th
January, 2018.
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 a concern
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.
Performance Evaluation
Pursuant to the provisions of the Act and the Listing Regulations, the Board has
carried out the annual performance evaluation of its own performance, the Directors
individually as well as the evaluation of its committees. The evaluation criteria,
inter-alia, covered various aspects of the Board's functioning including its composition,
attendance of Directors, participation levels, bringing specialised knowledge for decision
making, smooth functioning of the Board and effective decision making. The Board and its
committees had been highly effective in achieving their respective charters of monitoring
the overall performance of the Company, overseeing the performance of the management and
thus overall upholding high standards of corporate governance. The board meetings were
well run and the members of the Board acted with sufficient diligence and care.
The performance of individual directors was evaluated on parameters such as level of
engagement and contribution to the affairs of the Company including by way of attendance
in board/ committee meetings, level of independence of judgement, care undertaken in
safeguarding the interest of the Company and its minority shareholders. Considering the
high performance of the Company in most spheres and the value delivered to all
stakeholders, including customers, shareholders, the community and others, it was apparent
that Directors had been diligent, meticulous and faithful in the performance of their
duties. The Directors expressed their satisfaction with the evaluation process.
The criteria laid down by the Nomination and Remuneration Committee for evaluation of
performance of Independent Directors included, inter-alia, the extent of engagement
including attendance at the board/ committee meetings, ability to discharge their duties
and provide effective leadership, exercise independence of judgement and safeguarding the
interest of all the stakeholders including the minority shareholders.
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. The Internal Complaints Committee (ICC) has been set up to redress complaints
received regarding sexual harassment. During the period under review, two complaints were
received by the ICC.
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 various regulations of 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 2017-18. The report on secretarial audit is attached as Annexure
- E. The report does not contain any qualification.
Secreterial 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
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 2018-19.
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.
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 was awarded ISO/IEC 27001:2005 certification by STQC Directorate
(Standardisation, Testing and Quality Certificate), Ministry of Communications and
Information Technology, Government of India after re-assessment. In 2015, the
certification has been upgraded to 27001:2013.
The Company has established and is maintaining an environment management system. During
the year, re-certification for ISO- 14001 was carried out by M/s AVI, Belgium for the
manufacturing plants located at Gurgaon, 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 after the ISO 9001:2015
standard. Re-assessment of the quality systems is done at regular intervals and
re-certification assessments are done 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
Mr. Kenichi Ayukawa was awarded ‘Champion of Champions', Best CEO (Large
Companies) and Best CEO (Auto & Ancillaries) by Business Today. He was also awarded
‘Autocar Professional Man of the year' by Autocar.
The Company received many awards/recognitions/rankings during the year. Some of these
are mentioned hereunder:
• ‘Company of the year, 2017' by The Economic Times and Business Standard.
• ‘MNC of the year' by AIMA at Managing India Awards, 2017
• ‘Car manufacturer of the year' by NDTV at NDTV Car and Bike Awa rds.
• ‘Manufacturer of the year' by Autocar, Times of India, Overdrive and Top
Gear.
• Golden Peacock Training Award and Occupational Health and Safety Award.
• ‘Corporate Social Responsibility Champion of the Year' by Motoring World.
• ‘2 GOOD' rating by The Economic Times for all-round excellence in the field
of Corporate Social Responsibility.
• ‘Certificate of Appreciation' for best Corporate Social Responsibility
practices by Haryana Government.
• Amar Ujala Corporate Social Responsibility award for outstanding work in the
field.
• ‘PR team of the year' and ‘HDFC ERGO Safety Award' by NDTV at NDTV Car
and Bike Awards for ‘#PehniKyaRs.' campaign.
• Gold at ASSOCHAM's Skilling India Awards, 2017
• Rajasthan Government Award for employing highest number of youth.
• ‘Best Solution in India' to the Treasury team at Adam Smith Asia Award 2017
• Dzire won the following awards:
- ‘Best of 2017' by Auto X.
- ‘Compact car of the year' by News 18 TV and CNBC Overdrive.
- ‘Sub-compact sedan of the year' by NDTV Car & Bike Awards, Smart Photography
and T3.
- ‘Compact Sedan of the year' by Auto Car, Motoring World and Times Auto EVO.
- ‘Sub 4 meter car' and ‘Automobile of the year' by The Auto Show.
• Ignis won the following awards:
- ‘Hatchback of the year' by NDTV Car & Bike Show, Times Auto EVO & BBC
Top Gear.
- ‘Compact Car of the Year' & 'Design of the year' by Motoring World.
• Baleno RS won the award for ‘Hatchback of the year' by News 18 TV.
• S-Cross won ‘Crossover of the Year' by Motoring World.
• Concept Future - S won Best Concept car at Auto Expo 2018 by NDTV Car & Bike
and SIAM awards for excellence.
• Super Carry was awarded ‘Commercial Vehicle of the Year' and ‘Small
Commercial Vehicle (SCV) of the year' by Apollo Tyres Commercial Vehicle Magazine.
Acknowledgment
The Board of Directors would like to express its sincere thanks for the co-operation
and advice received from the Government of India, Haryana Government and the Gujarat
Government. 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 |
| New Delhi |
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| 27th April, 2018 |
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