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Omax Autos Ltd.

BSE: 520021 Sector: Auto
BSE 00:00 | 24 Apr 2020 Omax Autos Ltd
NSE 05:30 | 01 Jan 1970 Omax Autos Ltd

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OPEN 26.80
52-Week high 80.00
52-Week low 18.70
P/E 3.89
Mkt Cap.(Rs cr) 53
Buy Price 24.55
Buy Qty 100.00
Sell Price 26.80
Sell Qty 107.00
OPEN 26.80
CLOSE 25.70
52-Week high 80.00
52-Week low 18.70
P/E 3.89
Mkt Cap.(Rs cr) 53
Buy Price 24.55
Buy Qty 100.00
Sell Price 26.80
Sell Qty 107.00

Omax Autos Ltd. (OMAXAUTO) - Director Report

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Company director report

Dear Shareholders

Your Board of Directors are pleased to present the 36th Annual Report on the businessand operations of the Company together with the Audited Financial Statements for thefinancial year ended 31st March 2019.


The summary of the financial performance of the company for the financial year ended31st March 2019 as compared to the previous year is as below:

Amounts in Rs. Lakh

Particulars 2018-19 2017-18
Revenue from operations and other income 100443.47 122003.00
Profit before Tax 515.44 57.06
Total tax expenses 472.11 (708.73)
Profit (Loss) for the period 43.33 765.79
Other Comprehensive income (154.69) 200.46
Total Comprehensive income (111.36) 966.46
Earnings per Share (EPS) 0.20 3.58


No amount is proposed to be transferred to the General Reserve of the Company for thefinancial year 2018-19.


Your Directors do not recommend any dividend for the financial year 2018-19.


From last few years the Company is going through a tough time. Due to continuous lowdemand from two wheeler manufacturers coupled with increasing labour costs and fixedcosts the Company has not been doing well in two-wheeler business. Consequently theCompany with the consent of shareholders has sold various assets of its Sprocket PlantDharuhera and Speedomax Plant Sidhrawali and has closed operation of these plants inJune 2019. As the Company is doing well in other business areas these events may notaffect the overall financial position of the Company significantly. In opinion of theBoard there have been no material changes and commitments affecting the financialposition of the Company which have occurred between the end of the financial year underreview to which the financial statements relate and the date of this Report except theabove mentioned matters


During the year under review there has been no change in the nature of business of theCompany. The main business activity of the Company primarily continues to be manufacturingand supply of sheet metal components. The Company is continuously exploring thepossibility of venturing into new business areas to minimize its business risks. IndianRailways has been one of the main growth drivers in recent times for the Company so it wasproposed to venture into new products in this area.


During the financial year 2018-19 the total revenue of the Company was Rs. 1004.43Crores as compared to total revenue of Rs. 1220.03 Crores during the previous financialyear 2017-18 thus resulting in a de-growth over previous year. However Profit before taxfor the year under review was Rs. 5.15 Crore as against Rs. 0.57 Crore for the previousfinancial year.

Financial year 2018-19 was a challenging year for the Company. The demand from 2Wheelers (2W) manufacturers declined continuously. Increasing labour costs and fixed costsimpacted the business of the Company adversely. Consequently the Company had to resort toleaning of its workers. Later the Company had to take tough decision to close operationsin two of its plants. However during the year under review demand from commercialvehicle manufacturers and Indian Railways witnessed a very good growth and poised to growfurther in coming years also.

The management in recent past has realigned its focus on non-two wheeler businessareas. The management is continuously working on to increase its customer base &product portfolio for Indian Railways passenger car manufacturers and Commercial Vehiclemanufacturers. Recently the Board has approved setting up of two manufacturing units inUttar Pradesh to cater to Commercial Vehicle Customer and Indian Railways.

For further details Shareholders may refer to Management Discussion and Analysis andCorporate Governance Report that forms part of this Report.


The Authorised Share Capital of the Company is Rs. 30.00. 00.000 (Rupees Thirty CroresOnly) divided into 2.65.00. 000 equity shares of Rs. 10 each; 2000000 equity shares withdifferential voting rights of Rs. 10 each and 150000 Optionally Convertible CumulativePreference Shares (12%) of Rs. 100 each. The paid up share capital of the Company as on31st March 2019 was 213882130 divided into 21388213 equity shares of Rs. 10 each.

The Company has not issued shares with differential voting rights. As on 31st March2019 none of the Directors of the Company hold instruments convertible into equity sharesof the Company.


In terms of Regulation 34(2)(e) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report has beenappended separately which forms part of the Annual Report.


Corporate Governance is the application of best Management Practices Compliance ofLaws in true letter and spirit and adherence to ethical standards for effective managementand distribution of wealth and discharge of social responsibility for sustainabledevelopment of all stakeholders i.e. shareholders management employees customersvendors regulators and the community at large. Your Company places prime importance onreliable financial information integrity transparency empowerment and compliance withthe law in letter and spirit.

The regulators have also emphasised on the requirement of good corporate governancepractices in corporate management. Your Company also takes proactive approach and revisitsits governance practices from time to time so as to meet business and regulatoryrequirements.

The provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 with respect to the Corporate Governance for the year 2018-19 has been provided inthe Corporate Governance Report which is attached here separately along with aCertificate from Practicing Company Secretary on compliance with corporate governancenorms and forms part of the Annual Report.


The Board of Directors of the Company has optimum combination of executive andnon-executive directors including independent directors and woman directors in compliancewith the provisions of the Companies Act 2013 ("the Act") and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

The Board in its meeting held on 19th July 2018 appointed Mr. Devashish Mehta as anAdditional Director of the Company with immediate effect. Further the Board appointed Mr.Devashish Mehta as Joint Managing Director of the Company also with immediate effect whichwas later approved by the Shareholders at 35th Annual General Meeting of the Company heldon 17th September 2018.

In terms of the provisions of the Act and Article of Association of the Company Mr.Jatender Kumar Mehta (DIN: 00028207) and Mrs. Sakshi Kaura (DIN: 02094522) retire byrotation at the ensuing Annual General Meeting and being eligible offers themselves forre-appointment.


The Board in its meeting held on 19th July 2018 has appointed Mr. Bharat Kaushal asan Additional Director of the Company in the category of Independent Director withimmediate effect. Further appointment of Mr. Bharat Kaushal as an Independent Director ofthe Company was approved by the shareholders at 35th Annual General Meeting of the Companyheld on 17th September 2018.

The Board in its meeting held on 22nd October 2018 has appointed Mr. Panja PradeepKumar as an Additional Director of the Company in the category of Independent Directorwith immediate effect. Further appointment of Mr. Panja Pradeep Kumar as an IndependentDirector of the Company is subject to approval of the shareholders in the ensuing AnnualGeneral Meeting. Accordingly subject to the approval of the members the Board ofDirectors of the Company at its meeting held on 13th August 2019 have recommended theappointment of Mr. Panja Pradeep Kumar as Independent Directors of the Company for a termof five years to the members in ensuing Annual General Meeting.

The Shareholders of the Company has approved by passing of Special Resolutions at theExtra-Ordinary General Meeting meeting held on 16th February 2019 the continuation ofDr. Ramesh Chandra Vaish and Mr. Triloki Nath Kapoor as a Non-Executive IndependentDirectors who have attained the age of 75 years for the remaining period of their termin the Company.

All Directors of the Company have given declarations that they are not debarred fromholding the office of Director by virtue of any SEBI Order or any other such statutoryauthority as required under the Circular dated June 20 2018 issued by BSE Limited andNational Stock Exchange of India Limited.

Further there is no change in the composition of Key Managerial Personnel (exceptmentioned above) of the Company.


During the year under review 9 (Nine) meetings of the Board of Directors were heldrespectively on 17th April 2018 12th May 2018 7th June 2018 19th July 2018 7thSeptember 2018 22nd October 2018 3rd December 2018 18th January 2019 and 16thFebruary 2019. Details of Board Meetings and Committee Meetings and attendance thereof isdisclosed in the Corporate Governance Report attached separately to this report.


During the year under review the Board has in its meeting held on 19th July 2018inducted Mr. Devashish Mehta Joint Managing Director and Mr. Deep Kapuria IndependentDirector into the Audit Committee of the Board. Further subsequent to the year underreview the Board in its meeting held on 30th May 2019 has inducted Mr. Panja PradeepKumar Independent Director into the Audit Committee. Currently the composition of AuditCommittee is as follows:

1. Dr. Ramesh Chandra Vaish - Chairman (Nonexecutive Independent Director)

2. Dr. Triloki Nath Kapoor - Vice-Chairman (Nonexecutive Independent Director)

3. Mr. Jatender Kumar Mehta - Member (Executive Director)

4. Mrs. Novel Singhal Lavasa - Member (Nonexecutive Independent Director)

5. Mr. Deep Kapuria - Member (Non-executive Independent Director)

6. Mr. Devashish Mehta - Member (Executive Director)

7. Mr. Panja Pradeep Kumar - Member (Nonexecutive Independent Director)

There has been no instance wherein the Board had not accepted any recommendation of theAudit Committee.


In terms of the provisions of the Companies Act 2013 the Directors confirm that—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


All independent directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulations 16(1)(b) & 25(8) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.


In terms of Section 178(3) of the Companies Act 2013 upon recommendation of theNomination and Remuneration Committee the Board has adopted the Nomination andRemuneration Policy of the Company. The Policy includes the criteria for determiningqualifications positive attributes independence of a director and other prescribedmatters are governed by such policy. During the Financial Year 2018-19.

In terms of Section 178(4) of the Act such policy is disclosed on website of theCompany at the below link: .


The evaluation of performance of the Board its Committees and individual directors forthe financial year 2018-19 was carried out in accordance with the policy for evaluation ofthe performance of the Board of Directors of the Company. The evaluation forms andcriteria for evaluation of Board of Directors Managing Director / Executive DirectorsNon-Executive Independent Directors Board Committees and Chairman of the Company werecirculated to all the directors for their feedback/ ratings. The forms were submitted backto the Company by the directors with their feedback/ ratings. On the basis of theirfeedback/ratings the Board evaluated the performance of Board of Directors ManagingDirector / Executive Director Non-Executive Independent Director Board Committees andthe Chairperson of the Company. The Board was satisfied with the evaluation results.


The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations. The Company has established a vigil mechanism and hasadopted the "Vigil Mechanism/ Whistle Blower Policy". As per the policyobjective the Company encourages its employees who have concerns about suspectedmisconduct to come forward and express these concerns without fear of punishment orunfair treatment. A vigil mechanism provides a channel to the employees and directors toreport to the management concerns about unethical behaviour actual or suspected fraud orviolation of the Codes of conduct or policy. The mechanism provides for adequatesafeguards against victimization of employees and directors to avail the mechanism andalso provide for direct access to the Managing Director/Chairman of the Audit Committee inexceptional cases. Such policy is available on the website of the Company . During the Financal Year 2018-19 the policy was revised on 30th March2019.


As a good corporate citizen the Company understands the significance of inclusivegrowth and wellbeing of all stakeholders including the society at large. Your Company hasbeen taking initiatives under Corporate Social Responsibility (CSR) for society at largewell before it has been prescribed under Companies Act 2013. The Company has awell-defined Policy on CSR as per the requirement of Section 135 of the Companies Act2013 which covers the activities as prescribed under Schedule VII of the Companies Act2013.

During the year under review your Company has carried out activities primarily relatedto promoting/providing education to the poor and underprivileged children.

The details about the policy developed and implemented by the Company on CorporateSocial Responsibility initiatives taken during the year the reasons for the unspentamount on CSR and Composition of CSR Committee as required under clause (o) ofsub-section (3) of the Section 134 of the Companies Act 2013 are provided in the CSRAnnual Report in terms of Rule 8 of the Companies (Corporate Social responsibility) Rules2014 which is attached as Annexure-1 and forms part of this report.

The CSR Liability for the FY 2018-19 was Rs. 31.11 Lacs. Out of the budgeted amount ofRs. 35.50 Lacs (out of cumulative funds available) for approved projects an amount of Rs.31.12 Lacs (including Rs. 0.64 Lakh spent for project of previous year) was spent duringthe year. As the budget was based on estimation the actual amount was below the estimatedexpenses. The unbudgeted amount and the unutilized portion of the budgeted amount will beutilized to fund future CSR projects. The unspent CSR amount as on 31.03.2019 for previousfinancial years are as follows.

Amounts in Rs. Lacs

Sl. No. Particulars 2018 19 2017 18 2016 17 2015 16 2014 15 Total
1. CSR Liability (2% of Net Profit) 31.11 17.32 12.42 18.11 51.11 130.07
2. Amount Spent 31.75 45.32 6.30 0.00 25.16 108.53
3. Amount outstanding as Unspent at 31.03.2019 21.54

The detailed report on initiatives taken by the company during the year under reviewcan be accessed at the website of the company at .


The Board of Directors of the Company has adopted a policy as the Risk ManagementPolicy of the Company with main objective of to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. The functions of the Risk Management Committeeincludes preparation of company-wide framework for risk management fixing roles andresponsibilities communicating the risk management objective allocating resourcesdrawing action plan determining criteria for defining major and minor risks decidingstrategies for escalated major risk areas updating company-wide Risk register andpreparing MIS report for review of Audit Committee.

The implementation and monitoring of this policy is currently assigned to the AuditCommittee of the Board. Though the Board is striving to identify various elements of riskhowever in the opinion of the Board there has been no element of risk which may threatenthe existence of the Company.


M/s. BGJC Associates LLP Chartered Accountants (Firm Registration No. 003304N) wereappointed as Statutory Auditor of the Company at the 34th Annual General Meeting (AGM)till the conclusion of 39th AGM of the Company.


In terms of Section 204 of the Companies Act 2013 read with the rules made thereunderand upon the recommendation of the Audit Committee the Board of Directors has appointedM/s. Chandrasekaran Associates Company Secretaries as the Secretarial Auditors of theCompany to conduct Secretarial Audit for the financial year 2019-20.


In terms of Section 138 of the Companies Act 2013 read with Companies (Accounts)Rules 2014 the Board of Directors on recommendation of the Audit Committee hasre-appointed M/s. HM & Associates Chartered Accountants M/s. Singhi Chugh &Kumar Chartered Accountants and M/s. N. Kochhar & Co. Chartered Accountants asInternal Auditors of the Company for the financial year 2019-20.


The Board of Directors of the Company on the recommendations made by the AuditCommittee has appointed M/s. JSN & Co. Cost Accountants (Firm Registration No.000455) as the Cost Auditor of the Company to conduct the audit of the cost records forthe financial year 2019-20. The remuneration proposed to be paid to the Cost Auditorsubject to ratification by the shareholders of the Company at the ensuing 36th AGM wouldnot exceed Rs. 1.2 Lakhs excluding taxes and out of pocket expenses if any.

The Company has received consent from M/s. JSN & Co. Cost Accountants to act asthe Cost Auditor for conducting audit of the cost records for the financial year 2019-20along with a certificate confirming their independence and arm's length relationship.

AUDITORS' REPORT Statutory Audit Report

M/s. BGJC Associates LLP Chartered Accountants (Firm Registration No. 003304N)Statutory Auditors of the Company have submitted their reports on the financial statementsof the Company for the financial year ended 31st March 2019. There has been noobservation or comment of the auditors on financial transactions or matters which has anyadverse effect on the functioning of the company; further there is also no qualificationreservation or adverse remarks in the Auditors' Reports on the financial statement of theCompany for the financial year ended 31st March 2019.

Fraud Reporting

There has been no fraud reported by the Statutory Auditors under Section 143(12) of theCompanies Act 2013 for the financial year 2018-19.

Secretarial Audit Report

In terms of Section 204(1) of the Act a Secretarial Audit Report given by M/s.Chandrasekaran Associates the Secretarial Auditor of the Company in prescribed form hasbeen annexed as Annexure-2 hereto and forms part of this Report. Further there has beenno qualification reservation or adverse remarks or disclaimer or qualification made bythe Secretarial Auditors in their report for the financial year ended 31st March 2019except delay in filing 2(two) e-form with the Registrar of Companies during the FinancialYear 2018-19 which was beyond the prescribed time period of 30 days.

In this regard it is clarified that Company has inadvertently missed filing of the two-forms within the prescribed time period of 30 days. The Company will take care of notrepeating the similar instances in future.

Cost Audit Report

M/s. JSN & Co. Cost Accountants (Firm Registration No. 000455) Cost Auditors ofthe Company have submitted their reports on the cost records of the Company for thefinancial year ended 31st March 2019. There has been no qualification reservation oradverse remarks in the Auditors' Reports on the cost records of the Company for thefinancial year ended 31st March 2019.


The Company does not have any subsidiary company or joint venture or associate company.There was no company which had become or ceased to be the subsidiary joint venture orassociate company of the Company during the year under review.


During the year under review the Company had not invited or accepted any deposits frompublic under Chapter V of the Companies Act 2013 and the Rules made thereunder.


There has been no significant and material order passed by any regulator courts ortribunals impacting the going concern status and operations of the Company in future.


For the purposes of effective internal financial control the Company has adoptedvarious policies and procedures for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. Forfurther discussion on adequacy of internal financial controls please refer the discussionin Management Discussion and Analysis that forms part of this Report.


During the financial year under review the Company has not given any loan or guaranteeor made any investment in terms of Section 186 of the Companies Act 2013.


During the year under review there were new transaction with related parties fallingunder the purview of Section 188 of the Act. All the transactions with the related partieswere in ordinary course of business and on arm's length basis therefore the Company isnot required to give details of related party transactions in Form AOC-2. All transactionswith related parties were duly reviewed by the Audit Committee of the Board. In terms ofRegulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 read with Para A of Schedule V thereto the Related Party disclosures have beenprovided separately in the Corporate Governance Report which form part of the AnnualReport.


In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of Companies(Accounts) Rules 2014 a statement containing details of conservation of energytechnology absorption foreign exchange earnings and outgo in the manner as prescribedunder the Companies (Accounts) Rules 2014 is given in Annexure - 3 hereto and forms partof this Report.


In terms of Section 197(12) of the Act read with Rule 5(1) 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (includingany statutory modification and amendments thereto) the ratio of the remuneration of eachdirector to the median employee's remuneration and such other details as are requiredunder such rules are attached separately as Annexure - 4 which forms part of this report.


As required by Section 92(3) read with Rule 12 of the Companies (Management andAdministration) Rules 2014 the Extract of Annual Return of the Company in the prescribedForm MGT-9 is annexed to this Report as Annexure - 5.


The Company has in place a Policy on Prevention of Sexual Harassment at the Workplacein line with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. The Company has constituted an Internal ComplaintsCommittee to redress complaints received regarding sexual harassment.

The Directors further state that during the year under review there was no complaintfiled/received pursuant to the Sexual Harassment of Women at Workplace [PreventionProhibition and Redressal] Act 2013.


Your Company is committed for adhering to best Environmental Safety & HealthPractices during its manufacturing processes. It targets to achieve 100% EnvironmentalLegal compliances with 100% customer's satisfaction along with continuous trainings andawareness programs on different Environmental Burning Issues from time to time. In orderto ensure effective implementation of OMAX's EHS Policy the same is systematicallycommunicated across all the levels and the employees are trained from time to time to notonly build commitment at their levels but also encourage them to be effective promoters ofthis philosophy and take EHS as one of their key roles in day to day functioning.Environment Health and Safety programs in the organization is the prime focus of topmanagement to make safe and healthy work environment. The EHS programs protect theenvironment conserve the natural resources provide safe and healthy conditions for workand comply with applicable laws and regulations.

The Company is committed for adopting Zero Incident free work environment by followingcontinuous workplace and classrooms trainings work permit systems third party safetyaudits and stringent safety standards in the workplace. Safety and health compliancesstart from our gates and occupy the topmost position in the yearly goals of the Company.

The Company targets to maintain minimum Zero Severity Rate and Frequency Rate toachieve Zero injury. All safety compliances being monitored via In-house and third partymonthly safety audits to know least non-conformance to ensure our 100% safety compliancesfor our employees associates and machinery to improve productivity. A dedicated EHS teamis available in each unit under guidance of corporate EHS on day-to-day basis.

All EHS activities are monitored by monthly EHS MIS review mechanism with allocation ofsufficient resources under separate cost centre for better accountability. The Company isalso dedicated to save our precious natural resources with conservation of water byrecycling our effluent after treatment by installing Reverse Osmosis Plants. Forcontinuous monitoring and to operate our all ETPs at highest efficiency we haveestablished dedicated ETP Labs at all major locations with dedicated ETP Chemists toachieve and fulfil our commitment towards Zero Liquid Discharge. The Company's strength isEmployee engagement and under this celebrations of Environment and Safety Day Fire &Mock Drills EHS awareness training programs covering all employees and associates underscheduled classroom and floor level training are conducted. EHS Legal Compliance trainingprograms are organized for all senior and middle management for better understandingthroughout the year to create more vibrant environment amongst the employees so that each& every employee takes the responsibilities & guides others about non pollutedenvironment. The Company also ensures 100% disposal of all generated Hazardous wastes asper Pollution Control guidelines. The Company has also started disposal of E-waste toauthorized re-cyclers.


The Company has hosted certain policies/documents/ information including inter aliaPolicy for determining ‘Material Subsidiaries' Policy on dealing with Related PartyTransactions Familiarization programmes for Independent Directors etc. as per therequirement of law or otherwise.

Following link could be used for accessing such polices/ documents/information: .


During the financial year 2018-19 the Directors have devised proper systems to ensurecompliance with the provisions of all applicable Secretarial Standards and that suchsystems are adequate and operating effectively.


The Directors wish to convey their appreciation to business associates for theirsupport and contribution during the year. The Directors would also like to thank theemployees shareholders customers suppliers alliance partners bankers and governmentagencies for the continued support given by them to the Company and their confidencereposed in the management. We look forward for your continued support in the future.

For Omax Autos Limited
Tavinder Singh Jatender Kumar Mehta
(Whole-time Director) (Managing Director
DIN:01175243 DIN:00028207
Place : Gurugram
Date : 13th August 2019

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