Your directors have pleasure in presenting the 34th annual report together with theaudited financial statements for the year ended 31st March 2015.
The Companys financial performance during the year 2014-15 as compared to theprevious year 2013-14 is summarised below: (Rs. in million)
| ||2014-15 ||2013-14 |
|Total revenue ||508022 ||445235 |
|Profit before tax ||48682 ||36585 |
|Tax expense ||11570 ||8755 |
|Profit after tax ||37112 ||27830 |
|Balance brought forward ||173849 ||153043 |
|Impact of revision of useful lives of certain fixed assets ||(792) ||- |
|Profit available for appropriation ||210169 ||180873 |
|Appropriations: || || |
|General reserve ||3711 ||2783 |
|Proposed dividend ||7552 ||3625 |
|Corporate dividend tax ||1538 ||616 |
|Balance carried forward to balance sheet ||197368 ||173849 |
The total revenue (net of excise) was Rs. 508022 million as against Rs. 445235million in the previous year showing an increase of 14 per cent. Sale of vehicles in thedomestic market was 1170702 units as compared to 1053689 units in the previous yearshowing an increase of_11 per cent. Total number of vehicles exported was 121713 units ascompared to 101352 units in the previous year showing an increase of 20 percent.
Profit before tax (PBT) was Rs. 48682 million against Rs. 36585 million showing anincrease of 33 per cent and profit after tax (PAT) stood at Rs. 37112 million against Rs.27830 million in the previous year showing an increase of 33 per cent. Price earningratio (based on last quoted price on NSE) as on 31st March 2014 and 31st March 2015was 21.40 and 30.10 respectively.
The Government of India came out with an offer for sale at a price of Rs.125/- per share in 2003. The market capitalisation as on 31st March 2014 and 31st March2015 was Rs. 595400 million and Rs. 1117394 million respectively. This is based onmarket price of the Companys shares (BSE closing) of Rs. 1971 and Rs. 3699 as at31st March 2014 and 31st March 2015 respectively. The share price of the Company increasedby 2859 percent as on 31st March 2015 vis--vis the price of allotted shares at the timeof said offer for sale.
The board recommends a dividend of Rs. 25 per equity share of Rs. 5 each for the yearended 31st March 2015 amounting to Rs. 7552 million.
The operations are exhaustively discussed in Management Discussion andAnalysis forming part of the annual report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard 21 on Consolidated FinancialStatements read with Accounting Standard 23 on Accounting for Investments inAssociates and Accounting
Standard - 27 on Financial Reporting of Interest in Joint Ventures the auditedconsolidated financial statements are provided in the annual report.
A report on the performance and financial position of each of the subsidiariesassociates and joint venture companies as per the Companies Act 2013 is provided asannexure to the consolidated financial statement and hence not repeated here for thepurpose of brevity. No company has become or ceased to become a subsidiary joint ventureor associate company during 2014-15.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 is attachedas Annexure A.
In accordance with Clause 49(V) (D) of the Listing Agreement the Company hasformulated a policy for determining material subsidiaries. The policy has been uploaded onthe website of the Company at http://www.marutisuzuki.com/policy-on-subsidiary-companies.aspx.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes forming part of the financialstatements.
A calendar of meetings is prepared and circulated in advance to the directors. Duringthe year six board meetings were held the details of which are given in the CorporateGovernance Report.
For composition of the audit committee please refer to the Corporate GovernanceReport.
The Company has received declarations of independence in terms of Section 149 of theCompanies Act 2013 read with Clause 49 of the Listing Agreement from all the independentdirectors.
The details of the familiarisation programmes for the independent directors have beenuploaded on the website of the Company athttp://www.marutisuzuki.com/familiarisation-programmes.aspx.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained in terms of Section 134 of the Companies Act 2013 your Directorsstate that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and proper explanations provided relating to material departures if any;
b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year and of the profit ofthe Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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 andare operating effectively; and
f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Mr. Shigetoshi Torii was appointed as a Whole-time Director designated as Director(Production) with effect from 31st July 2014 to fill the casual vacancy caused by theresignation of Mr. Masayuki Kamiya who resigned as Director (Production) from the close ofthe business hours of 30th July 2014. Mr. Kamiya resigned as his nomination was withdrawnby Suzuki Motor Corporation. The appointment of Key Managerial Personnel i.e. ManagingDirector & CEO Company Secretary and Chief Financial Officer were taken on recordwith effect from 1st April 2014.
Pursuant to the provisions of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee the details of which are given in the CorporateGovernance Report. The Company has developed a risk management policy and identified risksand taken appropriate steps for their mitigation. For more details please refer to theManagement Discussion and Analysis (MD&A).
INTERNAL FINANCIAL CONTROLS
Internal financial controls have been discussed under CEO/CFO Certificationin the Corporate Governance Report.
The Company already had an established and effective mechanism called the WhistleBlower Policy (Policy). The mechanism under the Policy has been appropriately communicatedwithin the organisation. The purpose of this Policy is to provide a framework to promoteresponsible whistle blowing by employees. It protects employees wishing to raise a concernabout serious irregularities unethical behaviour actual or suspected fraud within theCompany.
The Chairman of the audit committee is the ombudsperson and direct access has beenprovided to the employees to contact him through e-mail post and telephone for reportingany matter.
RELATED PARTY TRANSACTIONS
The Company has formulated a policy on related party transactions which has beenuploaded on the Companys website at http://www.marutisuzuki.com/policy-on-related-party-transactions.aspx. In terms of Section 134(3) (h)of the Companies Act 2013 read with Rule 15 of the Companies (Meetings of Board and itsPowers) Rules 2014 there are no transactions to be reported in Form AOC 2.
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of its committees. Theevaluation criteria inter-alia covered various aspects of the boards functioningincluding its composition attendance of Directors participation levels bringingspecialised knowledge for decision making smooth functioning of the Board and effectivedecision making.
The performance of individual directors was evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders time devoted etc. The Directors expressed theirsatisfaction with the evaluation process. The criteria laid down by the Nomination andRemuneration Committee for evaluation of performance of independent directors includedinter-alia the extent of engagement including attendance at the board/ committeemeetings ability to discharge their duties and provide effective leadership exerciseindependence of judgement and safeguarding the interest of all the stakeholders includingthe minority shareholders.
NOMINATION AND REMUNERATION POLICY
Based on the recommendations of the Nomination and Remuneration Committee the Boardapproved a Nomination and Remuneration Policy which is attached as Annexure B.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The composition of the CSR committee CSR Policy etc. 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 requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. The Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. During the period under review one complaint wasreceived by the ICC and the same was disposed of.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with Section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is attached as Annexure D.
The Company has complied with the corporate governance requirements as stipulatedunder Clause 49 of the Listing Agreement and the certificate of compliance is contained inthis annual report.
SECRETARIAL AUDIT REPORT
In accordance with the provisions of Section 204 of the Companies Act 2013 read withThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard appointed M/s RMG & Associates a firm of Company Secretaries in practice toundertake the Secretarial Audit for 2014-15. The report on secretarial audit is attachedas Annexure E. The report does not contain any qualification.
As required by the provisions of Section 197 of the Companies Act 2013 read with Rule5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theparticulars of the employees are set out in Annexure F. However as per the provisions ofSection 136 of the Companies Act 2013 the annual report is being sent to all the membersof the Company excluding the aforesaid information. The said information is available forinspection by the members at the registered office of the Company up to the date of theensuing Annual General Meeting. Any member interested in obtaining such particulars maywrite to the company secretary at the registered office of the Company.
The auditors M/s Price Waterhouse Firm Registration Number FRN301112E CharteredAccountants hold office until the conclusion of the ensuing annual general meeting andbeing eligible are recommended for re-appointment. A certificate from the auditors hasbeen received to the effect that their re-appointment if made would be in accordancewith Section 139(1) of the Companies Act 2013. A certificate has also been obtained fromthe Auditors to the effect that the Company is in compliance with the conditions ofForeign Direct Investment for the downstream investment made by the Company in subsidiarycompanies. The auditors report to the shareholders for the year under review doesnot contain any qualification.
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 thefinancial strength of the Company in terms of the highest safety with regard to timelyfulfillment of its financial obligations.
The Company was awarded ISO/IEC 27001:2005 certification by STQC Directorate(Standardisation Testing and Quality Certificate) Ministry of Communications andInformation Technology Government of India after re-assessment.
The Company has established and is maintaining an information security managementsystem. During the year re-certification audit under ISO-14001 was carried out by M/sAVI Belgium for the manufacturing plants located at Gurgaon and Manesar. The auditorsrecommended re-certification under ISO-14001 of all manufacturing facilities.
The quality management system of the Company is certified against the ISO 9001:2008standard. Re-assessment of the quality systems is done at regular intervals andre-certification assessments are done at every three years by an accredited third partyagency. Recently the Manesar powertrain plant including the two wheeler engine plant wasadded in the ISO-9001 certification scope in time with other plants of the Company. Alsothe Company has an internal assessment mechanism to verify and ensure adherence to definedquality systems across the Company.
The Company got the following awards/ recognitions/rankings during the year:
JD Power CSI Study ranked the Company highest.
Alto emerged as the Worlds Bestselling Small Car for 2014 andAlto K10 AGS awarded Idea of The Year by BBC Top Gear Magazine.
Celerio named Hatchback of The Year by NDTV Car & BikeAwards;Midsize Hatchback of The Year by Zeeginition Auto Awards 2015;Transmission of The Year and Technology of The Year by Auto TechReview magazine for the auto gear shift.
Ciaz named Compact Sedan of The Year by NDTV Car & Bike Awardsand Sedan of The Year by Auto Bild Golden Steering Wheel Awards 2015 andBest of 2014 by Auto X Magazine Awards.
Manufacturer of the year - 2015 (four wheelers) honored to theCompany by CNBC TV18 Overdrive.
Golden Peacock Award honored to the Company for CSR in theautomobile sector and the occupational health and safety for 2014.
Greentech CSR Award under Platinum category in automobile sector.
The board of directors would like to express its sincere thanks for the co-operationand advice received from the Government of India and the Haryana Government. Yourdirectors also take this opportunity to place on record their gratitude for timely andvaluable assistance and support received from Suzuki Motor Corporation Japan. The boardalso places on record its appreciation for the enthusiastic co-operation hard work anddedication of all the employees of the Company including the Japanese staff dealersvendors customers business associates auto finance companies state governmentauthorities and all concerned without which it would not have been possible to achieve allround progress and growth of the Company. The directors are thankful to the shareholdersfor their continued patronage.
For and on behalf of the board of directors
|R.C. BHARGAVA ||KENICHI AYUKAWA |
|Chairman ||Managing Director & CEO |
|New Delhi || |
|27th April 2015 || |