To,
The Members
Your Directors have pleasure in presenting the Fortieth Annual
Report together with audited financial statement for the financial year ended 31st
March, 2016. This report pertains to financial year that commenced from April 01, 2015 and
the contents herein are governed by the relevant provisions/ sections/ rules of Companies
Act, 2013 and Regulations of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015.
This report also includes Management Discussion & Analysis (MD&A).
1. Financial Results
|
|
(Rs. In crores) |
Particulars |
Year Ended 31.03.2016 |
Year Ended 31.03.2015 |
Gross Sales and Other Income |
160.32 |
212.58 |
Profit/(loss) before Interest, Depreciation, Exceptional Items & Taxation |
(21.68) |
(25.46) |
Interest |
47.33 |
43.02 |
Cash Loss |
69.01 |
68.48 |
Depreciation, Amortizations & Impairment of Fixed Assets |
9.35 |
12.61 |
Loss before Taxation |
78.36 |
81.09 |
Provision for taxation: - Current Tax |
- |
- |
Exceptional Items |
- |
- |
Net Profit/ (Loss) |
(78.36) |
(81.09) |
Production (Nos.) |
12632 |
35205 |
Sales (Nos.) (excluding CKD sales) |
12913 |
38086 |
In view of loss, no amount is proposed to be carried to or transferred to any type of
reserves.
2. Dividend
Directors regret their inability, in view of the losses, to recommend any dividend for
the year.
3. Operations
The Companys operations during last few years have been adversely affected due to
a dramatic shift in consumer preference from 2-stroke geared scooters to 4-stroke
motorcycles and 4-stroke gearless scooters. The situation was further aggravated during
the year due to general economic slowdown in the Indian economy. The turmoil in the
African market and economic slow down in developed economies has adversely affected the
Companys export during the year. The Company is registered as a Sick Industrial
Company under the provisions of the Sick Industrial Companies (Special Provisions) Act,
1985 (SICA). The Company has temporarily suspended production activity (of 2-wheeler)
w.e.f. 6th May, 2016 to enable it to carry out maintenance work which is overdue for long,
check adequacy / suitability of the present facility for taking up the manufacturing light
three wheeler and to realign the plant & machinery and other work / activity for the
same, if so, required and this is likely to take about 3 months time. The Company is
working on development and industrialization of various new products and technology,
including new generation 4-stroke two wheelers and light 3-wheeler vehicle. Barring
unforeseen circumstances, it is expected to launch light 3 wheeler vehicle during FY
2016-17.
Export and Domestic sales performance of your Company was as follows:
Particulars |
Year Ended 31.03.2016 |
Year Ended 31.03.2015 |
|
(Nos.) |
(Nos.) |
Scooters |
|
|
- Export |
8688 |
26184 |
- Domestic |
4225 |
11902 |
Total |
12913 |
38086 |
4. Exports
Exports were 8688 vehicles during the year as against 26184 units during the previous
year. Companys exports are made to many countries including USA, countries in the
European Union, Africa, Latin America, Asia etc.
5. Directors Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the
Directors confirm:
a) that in the preparation of the annual accounts, the applicable accounting standards
have been followed and that no material departures have been made from the same;
b) that they have selected such accounting policies and applied them consistently and
made judgments and estimates 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
losses of the Company for that period;
c) that theyhavetakenproperandsufficient 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;
d) that they have prepared the annual accounts on a going concern basis;
e) that they have laid down the internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively;
f) that they have devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively.
6. Corporate Governance
As required under Regulations 34(3) of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, a detailed Report on Corporate Governance is enclosed. A
certificate from the Auditors of your Company regarding compliance of the conditions of
Corporate Governance as stipulated in Schedule V (E) of the SEBI (LODR) Regulations, 2015
is annexed. The Chairman & Managing Director and Chief Financial Officer of the
Company have given necessary Certificate to the Board in terms of Regulations 17 (8) of
SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 for the
financial year ended 31st March. 2016.
7. Audit Committee
The Board of Directors has an Audit Committee with a composition as specified in the
Section 177 of the Companies Act, 2013 and Regulations 18 of SEBI (Listing Obligations
& Disclosure Requirements) Regulations, 2015. The details of Audit Committee are
specified in Corporate Governance Report which forms part of this Annual Report. The Board
has accepted recommendations of the Committee on all matters.
8. Management Discussion and Analysis
(a) Macro-economic Developments and overall review
The world economies are still not out of the adverse effect of the financial crises
which started in 2008.
Due to the persistent slow growth in advanced economies and continuing headwinds for
emerging market, significant downside risks remain and events that make those risks more
salient may well trigger renewed financial turbulence, impairing confidence and demand in
a self confirming negative feedback loop. In addition there are signs of several stresses
of non-economic origin related to geopolitical conflicts, political discord, terrorism,
refugee flows or global epidemics in some countries and regions which threaten economic
activity.
The Indian economy continues to suffer due to continuous monsoon deficit for last two
years coupled with un-seasonal rain which has adversely affected rural demand. As per the
latest forecast, the monsoon in the current year is expected to be normal which may help
in recovery and growth of economy. However, a number of factors could impinge upon the
growth outlook for 2016-17, like slow investment recovery, low capacity utilisation in
industrial sector, slow revival of private investment and tepid global output and trade
growth, dragging down net exports.
(b) Two wheeler Industry in India
Two-wheeler industry struggled during the year. The rural economy is a big market for
two-wheelers. Farm incomes reduced and rural demand took a hit as poor monsoons wreaked
havoc on crop production which impacted demand for two-wheelers. Exports growth was also
subdued because of currency problems in markets like Africa and Asia. However, with
expected revival of Indian economy, the demand for two-wheeler is likely to pick up.
Domestic Sales
|
2013-14 (April 13-March 14) |
2014-15 (April 2014 March 2015) |
2015-16 (April 2015March 2016) |
Industry Structure |
Sale in Mn. |
Sale in Mn. |
Growth % Over |
Category Share % of |
Sale in Mn. |
Growth % Over |
Category Share % |
|
|
|
2013-14 |
14-15 |
|
2014-15 |
of 15-16 |
Scooters |
3.602 |
4.503 |
25 |
28 |
5.032 |
12 |
31 |
Motorcycles |
10.479 |
10.708 |
2 |
67 |
10.700 |
0 |
65 |
Mopeds |
0.722 |
0.687 |
-5 |
4 |
0.724 |
9 |
4 |
Total |
14.803 |
15.898 |
7 |
100 |
16.456 |
4 |
100 |
Export Sales
|
2013-14 (April 13-March 14) |
2014-15 (April 2014 March 2015) |
2015-16 (April 2015March 2016) |
Industry Structure |
Sale in Mn. |
Sale in Mn. |
Growth % Over 2013-14 |
Category Share % of |
Sale in Mn. |
Growth % Over |
Category Share % of |
|
|
|
|
14-15 |
|
2014-15 |
15-16 |
Scooters |
0.093 |
0.196 |
111 |
8 |
0.257 |
31 |
10 |
Motorcycles |
1.982 |
2.259 |
14 |
92 |
2.209 |
-2 |
89 |
Mopeds |
0.007 |
0.008 |
14 |
0 |
0.015 |
88 |
1 |
Total |
2.082 |
2.463 |
18 |
100 |
2.481 |
1 |
100 |
(c) Company Performance
Companys performance during the year was adversely affected inter alia due to
global recessionary conditions and specially political and economic condition prevailing
in African and developed economies as well as weak domestic demand.
(d) Opportunities and Threats
LML stands for the highest standards of technical expertise, product innovation and has
one of the finest R & D capabilities, particularly relating to designing, rapid
proto-typing, CAD - CAM, tooling and industrialization. It is harnessing these strengths
and its vast experience coupled with a aggressive business strategy for its revival and
turnaround.
(e) Outlook
As stated elsewhere in this report the Company has been working for its revival
including development of new products including those having state of the art technology.
(f) Performance Review
Due to various reasons and problems the Company could not leverage its rich
technological strengths during the year under review and the sales volume was 12913 units
in financial year 2015-16 as compared to 38086 units in financial year 2014-15..
(g) Financial Review
Revenues - Gross Sales and Other Income during the year was Rs. 160.32 crores as
compared to Rs. 212.58 crores in the previous financial year 2014-15.
Operating Profit/Loss The Company reported a net Operating Loss during the
year of Rs 21.68 crores as compared to net operating loss of Rs. 25.46 crore in the
previous financial year 2014-15.
Interest Interest was Rs 47.33 crores during the year as compared to Rs.
43.02 crores in the previous financial year 2014-15.
Depreciation, Amortization & Impairment of Fixed Assets Depreciation,
Amortization & Impairment of Fixed Assets during the year was at Rs 9.35 crores as
compared to Rs. 12.61 crores in the previous financial year 2014-15.
Loss before tax - The Company reported a loss before tax and exceptional items
during the year of Rs 78.36 crores as compared to Rs. 81.09 crores in the previous
financial year 2014-15.
Share Capital Companys Paid-up Equity Share Capital is Rs. 81.98
crores as on 31.03.2016.
(h) Human Resources
Your Company treats human resource a very important asset. Your Company continuously
invest in attraction, retention and development of talent on an ongoing basis.
9. Directorate
Mr Sanjeev Shriya (DIN: 00014402) and Mr Anurag Kumar Singhania (DIN: 00080925)
Directors of the Company are liable to retire by rotation and being eligible, offer
themselves for re-appointment as Directors of the Company. The Nomination &
Remuneration Committee and Board have recommended to re-appoint Mr. Deepak Kumar Singhania
(DIN-00012037) as Chairman & Managing
Director and Mr. Ram Kumar Srivastava (DIN: 00763948) as Whole-time Director of the
Company as per details given in annual general meeting notice.
During the year under review, no Director has been appointed or resigned from the Board
of Directors All the Independent Directors have submitted their declaration of
independence, as required under section 149(7) of the Companies Act, 2013, stating that
they meet the criteria of independence as provided in section 149(6) of the Companies Act,
2013 and under Regulations 25 of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015.
10. Whole Time Key Managerial Personnel (KMP)
In pursuance of the compliance of Section 203 of the Companies Act, 2013 the following
persons have been designated as Whole Time Key Managerial Personnel of the Company:-
1. Mr. Deepak Kumar Singhania Chairman & Managing Director
2. Mr. K. C. Agarwal Sr. President (Commercial) & Company Secretary
3. Mr. Mahesh Kumar Kanodia Chief Financial Officer
During the year under review, no KMP has resigned from the Company.
11. Extract of Annual Return
Pursuant to section 92(3) of the Companies Act, 2013 (the Act) and rule
12(1) of the Companies (Management and Administration) Rules, 2014, the required extract
of Annual Return in prescribed form MGT-9 is attached as Annexure A
with this Board Report.
12. Nomination & Remuneration Policy
The Company has, on the recommendations and approval of Nomination & Remuneration
Committee, formulated a Nomination & Remuneration Policy which governs Directors
appointment including criteria for determining their qualifications, positive attributes,
their independence and remuneration for the Directors, KMPs and other employees which was
passed by the Board in its meeting held on 8th November, 2014. The Nomination and
Remuneration Policy is attached as Annexure B with this Board Report.
13. Particulars of Loan, Guarantees or Investments
No loan, guarantee or investments were made during the year by the Company under
Section 186 of the Companies Act, 2013.
14. Related Party Disclosure
Particulars of contracts or arrangements with Related Party referred in Section 188 (1)
of the Companies Act, 2013 in prescribed form AOC-2 is attached as Annexure
C with this Board Report. As required under Regulations 23 of SEBI
(Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has
formulated a policy for dealing with Related Party Transactions. The Policy is available
on the website of the Company www.lmlworld.com) ( with a Weblink :http://www.lmlworld.com/Pdf/RPT-Policy.pdf
15. Material changes and commitments
No material Changes or commitments affecting the financial position of the Company
occurred between the end of the financial year to which the financial statements relates
and the date of the report.
16. Risk Management Policy
The Board has established a Risk Management Policy which formalizes the Companys
approach to overview and manage material business risks. Risks and effectiveness of their
management are internally reviewed and reported regularly to the Board. There are adequate
systems and procedures in place to identify, assess, monitor and manage risks.
17. Annual Evaluation
The Board has carried out the Annual Performance Evaluation of its own, its Committees
and individual Directors based on the Performance Evaluation Report submitted by the
Nomination & Remuneration Committee, as per Performance Evaluation Policy of the
Company, and Performance Evaluation of non-Independent Directors, Chairman and the Board
as a whole done by the Independent Directors in their separate meeting during the year.
18. Number of Board Meetings
The details of the number of meetings of the Board held during the Financial Year
2015-16 along with attendance details of each director forms part of the Corporate
Governance Report which forms part of this Annual Report.
19. Corporate Social Responsibility
The provision related to Corporate social responsibility under the Companies Act, 2013
is not applicable to the Company in view of losses and negative net- worth and turnover
being below prescribed amount.
20. Details of Committees
The details of Committees of the Board forms part of Corporate Governance Report which
forms part of this Annual Report.
21. Whistle Blower Policy
The Company has a Whistle Blower Policy, including vigil mechanism to report genuine
concerns of grievances, providing direct access to the Chairperson of the Audit Committee
in appropriate and exceptional cases. The Whistle Blower Policy has been posted on the
website of the Company www.lmlworld.com) ( with a weblink: http://www.
lmlworld.com/Pdf/LML-Whistle-Blower-Policy.pdf During the year , no matter has been
reported to the Audit Committee
22. Internal Financial Control
The Company has in place adequate internal financial controls with reference to
financial statements. During the year, such controls were tested and no material weakness
was observed by the internal auditor of the Company.
23. Subsidiary/ Associate Companies
There is no Subsidiary of the Company. However, policy of determining
"material" subsidiaries formulated by the Company is placed on the web-site of
the Company www. ( lmlworld.com) . The Company is a promoter of one Associate
Company namely M/s VCCL Limited. The consolidated financial statement of VCCL
Limited is enclosed as part of this Report.
There are no companies which have become or ceased to be its Subsidiaries, joint
ventures or associate companies during the year.
Statement pursuant to Section 129(3) of the Companies Act, 2013 related to Associate
Company in prescribed form AOC-1 is attached as Annexure D with
this Board Report.
24. Deposits
Your Company has not accepted any deposits from public in terms of provisions of
Companies Act, 2013.
25. Personnel
The Company had 2558 employees as on 31.03.2016. As per Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, none of the employee
was in receipt of remuneration of Rs. 60.00 Lacs or more per annum throughout the year or
Rs. 5.00 Lacs per month for the part of the year. Further, none of the employees is in
receipt of remuneration which is in excess of the remuneration drawn by Managing Director
or Whole-time Director or any manager of the Company and who also holds by himself or
along with his/ her spouse and dependent children, not less than 2% of equity shares of
the Company.
a. Pursuant to the Rule 5(1) Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the information required to be disclosed by every Listed Companies
in its Board Report are as follows:-
Name of Director/ KMP and Designation |
Remuneration of Directors/ KMPs for FY 2015-16 |
% age increase in remuneration in FY 2015-16 |
Ratio of Remunera- tion of each Director / to the median remunera-
tion of employee |
Comparison of the remuneration of the KMP against the performance of
the company |
Lalit Kumar Singhania Whole-time Director * |
17,74,701 |
86.65 |
68.41 |
|
Deepak Kumar Singhania Chairman & Managing Director * |
17,96,294 |
1.13 |
69.24 |
|
Anurag Kumar Singhania Whole-time Director * |
17,89,229 |
81.80 |
68.97 |
|
Ram Kumar Srivastava Whole-time Director |
18,00,000 |
NIL |
69.39 |
Loss before and after tax of the Company |
Khushahal Chand Agarwal Sr. President (Comml.) & Company Secretary ** |
41,74,689 |
(0.26) |
N.A. |
decreased by 3.37% in FY 2015-16. |
Mahesh Kumar Kanodia Chief Financial Officer ** |
21,94,864 |
0.09 |
N.A. |
|
* The remuneration to all Directors are within permissible limits as approved by MCA.
There is no increase in rem- -uneration during the year Variations are on account of
increase/decrease in availment of perquisites.
** The remuneration to Key Managerial Personnel are as per last year and as per
sanctions. There is no increase in remuneration during the year. Variations are on account
of Increase / decrease in availment of perquisites.
b. The Median remuneration of employees of the
Company during the financial year was Rs. 25942.
c. The percentage decrease in the median remuneration of employees in the financial
year was 47.85.
d. Variations in the market capitalization of the company, price earnings ratio as at
the closing date of the current financial year and previous financial year percentage
increase over decrease in the market quotations of the shares of the company in comparison
to the rate at which the company came out with the last public offer in case of listed
companies, and in case of unlisted companies, the variations in the net worth of the
company as at the close of the current financial year and previous financial year;
Companys market capitalization increased by 9.75% to Rs. 59,02,87,104 as of March
31, 2016 from Rs. 53,78,17,139 as of March 31, 2015. The price earning ratio was (0.75) as
of March 31, 2016 in comparison to (0.66) as compared to March 31, 2015. The closing price
of the Company equity shares on the NSE and BSE as of March 31, 2016 was Rs. 7.20 and Rs.
7.20 respectively.
e. Average percentile increase already made in the salaries of employees other than the
managerial personnel in the last financial year and its comparison with the percentile
increase in the managerial remuneration and justification thereof and point out if there
are any exceptional circumstances for increase in the managerial remuneration: Since
Company is a Sick Industrial company and in view of losses, no increase was made in the
managerial remuneration.
f. The key parameters for any variable component of remuneration availed by the
directors: No variable component of remuneration was availed by the Directors of the
Company.
g. The ratio of the remuneration of the highest paid Director to that of the employees
who are not Directors but receive remuneration in excess of the highest paid Director
during the year:
The highest paid Director in the Company is Mr. R. K. Srivastava with annual
remuneration of Rs. 18 Lakhs as per Central Govt. approval. The ratio of remuneration of
employees receiving in excess to that is as follows:-
S. No. |
Name of Employees |
Ratio to highest paid Director |
1 |
MR RAVINDRA KUMAR |
1.11 |
2 |
MR S K MAHAJAN |
1.22 |
3 |
MR AJAY KUMAR GOYAL |
1.20 |
4 |
MR SUMIT CHATTERJEE |
1.21 |
5 |
MR MAHESH KUMAR KANODIA |
1.22 |
6 |
MR G N SRIVASTAVA |
1.22 |
7 |
MR VIPIN CHAUDHARY |
1.50 |
8 |
MR GIRISH R MARATHE |
1.85 |
9 |
MR P P S CHOUDHARY |
1.92 |
10 |
MR ASHOKE KUMAR SINHA |
2.27 |
11 |
MR KHUSHAHAL CHAND AGARWAL |
2.32 |
12 |
Mr KAMAL GOYAL |
1.21 |
h. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy
of the Company.
26. Auditors and their reports
a) Statutory Auditors
M/s. Khandelwal Jain & Co. (FRN 105049W), Chartered Accountants, were appointed as
Statutory Auditor of the Company for a period of three years and M/s. Parikh & Jain
(FRN 001105C), Chartered Accountants, were appointed as Statutory Auditor of the Company
for a period of two years in previous Annual General Meeting held on 23.09.2014. The Board
proposes to members of the Company to ratify the appointment of M/s Khandelwal Jain &
Co. (FRN 105049W), Chartered Accountants for the financial year 2016-17, pursuant to the
provisions of Section 139 of the Companies Act, 2013, at the ensuing Annual General
Meeting of the Company. M/s Parikh & Jain (FRN 001105C) are not eligible for
re-appointment.
In respect of observations made by the Statutory Auditors in their Report, your
Directors wish to state that the respective notes to the accounts are self-explanatory and
do not call for any further comments.
b) Secretarial Auditors
M/s. Adesh Tandon & Ass., Practicing Company Secretary (FCS. 2253, CP No. 1121) of
Kanpur, reappointed as Secretarial Auditors of the Company for the FY 2016-17 and
submitted their Secretarial Audit Report for the Financial Year 2015-16, pursuant to the
Section 204 of the Companies Act, 2013 which is being attached herewith as Annexure
E No adverse observations are made by the Secretarial Auditors in
their Report.
c) Internal Auditors
Pursuant to Section 138 of the Companies Act, 2013, Board has appointed M/s Onkar
Tandon & Co., Chartered Accountants (FRN 000953C) of Kanpur as Internal Auditor of the
Company for the financial year 2016-17 as recommended by the Audit Committee of the
Company.
d) Cost Auditors
As per the Companies (Cost Accounting Records) Rules, 2013 issued by the Ministry of
Corporate Affairs, the Company is not required to appoint the Cost Auditor.
27. Conservation of Energy
Company continued to envisage and implement energy conservation measures in various
manufacturing operations leading to savings of quantitative consumption of power, fuel
& oil etc. Energy conservation during the year under various heads resulted into an
estimated saving of Rs. 3.30 lacs (in previous financial year 2014-15: Rs. 2.70 lacs).
28. Pollution Control
Relevant and necessary effluent treatment plants and other measures for control of
water, air and environmental pollution are in place and steps have been taken to further
strengthen and consolidate pollution control measures. No Objection
Certificates from the U.P. Pollution Control Board are obtained from time to time.
29. Technology Absorption
Requisite information in prescribed form is given in Annexure F to
this report.
30. Foreign Exchange Earnings and Outgo
Your Company earned during the year Foreign Exchange of Rs. 127.09 crores (previous
financial year Rs. 144.57 crores) while Foreign Exchange outgo during the year amounted to
Rs. 4.12 crores (previous financial year - Rs. 13.09 crores)
31. Stock Exchange Listing
The Equity Shares of the Company are listed on the following Stock Exchanges (with
respective scrip codes/ symbol):-
(i) BSE Limited (BSE), Mumbai (500255);
(ii) National Stock Exchange of India Limited (NSE), Mumbai (LML).
The Equity and Preference Shares of the Company were also listed on the U.P. Stock
Exchange Limited, Kanpur. However, as per SEBI circular dated May 30th 2012 read with
circular dated May 22nd 2014 related to Companies exclusively listed on De-recognized/
Non-operational Stock Exchanges, U.P. Stock Exchange Limited, Kanpur got de-recognized on
account of non fulfillment of the prescribed conditions.
The Company confirms that it has paid the annual listing fee to BSE and NSE.
32. Depository System
SEBI vide its Circular No. SMDRP/Policy/CIR-01/2000 dated 6th January, 2000 notified
that trading in Equity Shares of the Company is permitted only in dematerialized form
w.e.f. 17 th January, 2000. Requests received for dematerialization of shares are
processed and confirmation is given to the respective depositories i.e. National
Securities Depository Limited (NSDL) and Central Depository Services (India) Limited
(CDSL) within the stipulated time. As on 31st March, 2016, 95.91% equity shares of the
Company have been dematerialized.
33. General
The Company became a Sick Industrial Company within the meaning of Section 3(1)(o) of
Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) due to erosion of its net
worth and the Company was declared a Sick Industrial company by BIFR on 8th May, 2007. The
Company is working for its revival under the aegis of BIFR. In view of this, no impact is
foreseen on the going concern status of the Company and the Companys operations in
future. The matter is pending before the Honble BIFR.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 is not applicable to the Company, as there is no woman employee in the Company.
34. Cautionary Statement
The statement in the Directors report and MD&A, detailing the Companys
objectives and expectations, may contain forward looking statements within the
meaning of applicable securities laws and regulations. The actual results inter-alia may
differ materially from those expressed or implied, depending upon changes in global and
Indian demand-supply conditions as well as changes in government regulations, tax regimes,
economic and market developments, movements.
35. Other disclosures
(i) Statutory Auditors of the Company has not reported any incident relating to fraud
during the financial year to the Audit Committee or Board of Directors under section
143(12) of the Companies Act 2013 (ii) No significant and material orders has been passed
by the Regulators or courts or tribunals impacting the going concern status and
Companys operations in future.
.
36. Acknowledgement
Your Directors take this opportunity to appreciate deeply the valuable co-operation
extended by the Central and State Government authorities and are extremely grateful to the
Financial Institutions and Banks for their continued assistance, guidance and support.
Your Directors are also grateful to all stake-holders, including Customers, Shareholders,
Employees, Vendors, Distributors, Dealers / Sub-dealers, and the general public for their
support and confidence reposed in the Management.
|
For and on behalf of Board of Directors |
|
for LML Limited |
|
Deepak Kumar Singhania |
Place : Gurgaon |
Chairman & Managing Director |
Dated: 26.05.2016 |
DIN No.: 00012037 |
ANNEXURE B TO BOARDS REPORT
NOMINATION AND REMUNERATION & BOARD DIVERSITY POLICY INTRODUCTION
In compliance with Section 178 of the Companies Act, 2013 (Act) read with
the Rules made there under and Regulation 19 of the SEBI (LODR) Regulations, 2015, the
policy known as Nomination and Remuneration & Board Diversity Policy for
inter-alia setting up the criteria of nomination and policy for remuneration of Directors,
Key Managerial Personnel, Senior Management Personnel and other employees has been
formulated by the Nomination and Remuneration Committee and approved by the
Board of Directors of the Company.
Definitions
For the purpose of this Policy:
Act shall mean the Companies Act, 2013;
Board shall mean the Board of Directors of LML Limited;
Committee shall mean the Nomination and Remuneration Committee (NCR)
of the Company, constituted and reconstituted by the Board from time to time;
Company shall mean LML Limited;
Directors shall mean the directors of the Company;
Independent Director shall mean a director referred to in Section
149 (6) of the Companies Act, 2013;
Key Managerial Personnel (KMP) shall mean the following:
(i) Executive Chairman and / or Managing Director (MD) and/or Manager
(ii)Whole-time Director (WTD);
(iii) Company Secretary (CS);
(iv) Chief Financial Officer (CFO);
(v) Such other officer as may be prescribed.
Senior Management Personnel (SMP) shall mean personnel of the
company who are members of its core management team excluding the Board of Directors. This
would also include all members of management one level below the executive directors
including the functional heads.
OBJECTIVE & PURPOSE
The objective and purpose of this Policy are as follows:
To lay down criteria and terms and conditions with regard to identifying persons
who are qualified to become Directors (Executive and Non-Executive) and persons who may be
appointed as Senior Management and Key Managerial personnel and to determine remuneration
of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP).
To determine remuneration based on the Companys size and financial
position and trends and practices on remuneration prevailing in peer companies in the auto
industry.
To provide them reward linked directly to their efforts, performance, dedication
and achievement relating to the Companys operations.
To retain, motivate and promote talent and to ensure long term sustainability of
talented managerial persons and create competitive advantage.
SCOPE OF THE POLICY
The policy shall be applicable to the following in the Company:
Directors
Key Managerial Personnel (KMP)
Senior Management Personnel (SMP)
Other employees of the Company
CONSTITUTION
The Nomination and Remuneration Committee will comprise of the following members:-
S. No. |
Name |
Designation |
Profile |
1 |
Mr. Satinder Kumar Aggarwal |
Chairman |
Independent Director |
2 |
Mr. Shiromani Sharma |
Member |
Independent Director |
3 |
Mr. Anish Babu Venugopal |
Member |
Nominee Director, IFCI |
4 |
Dr. Vivek Agnihotri |
Member |
Independent Director |
5 |
Mr. Khushahal Chand Agarwal |
Secretary |
Company Secretary |
The Board of the Company may re-constitute / make any changes in the Committee from
time to time in order to fall in line with the Companys policy and or applicable
statutory requirement as and when necessary.
1. Appointment criteria and qualifications:
A. General
1.1 The Committee shall identify and ascertain the integrity and probity,
qualification, expertise and experience for appointment to the position of Directors, KMPs
& SMPs and accordingly recommend to the Board his/her appointment.
1.2 The Director/ Independent Director/ KMP/ Senior Management Personnel shall be
appointed as per the procedure laid down under the provisions of the Companies Act, 2013,
rules made thereunder, Listing Agreement or any other enactment for the time being in
force.
1.3 The other employees shall be appointed and removed as per the policy and procedure
of the Company.
1.4 Letter of appointment shall be issued based on the basis of the guidelines for the
same under the Companies Act, 2013 or the internal policy of the Company.
B. Directors
1.5 The Committee shall determine the suitability of appointment of a person to the
Board of Directors of the Company by ascertaining the fit and proper criteria
of the candidate. The candidate shall, at the time of appointment, as well as at the time
of renewal of directorship, fill in such form as approved by the Committee to enable the
Committee to determine the Fit and Proper Criteria. The indicative form to be
filled out is placed as (Annexure 1) to this Policy.
1.6 The Company shall not appoint or continue the employment of any person as Whole
Time Director who has attained the age of seventy years, Provided that appointment of a
person who has attained the age of seventy years may be made by passing a special
resolution in which case the explanatory statement annexed to the notice for such motion
shall indicate the justification for appointing such person.
1.7 The potential candidate to be appointed as Director / Independent Director/KMPs/
SMPs has not been disqualified under the Companies Act, 2013, Rules made there under,
Listing Agreement or any other enactment for the time being in force.
2. Term / Tenure:
2.1 Chairman &Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Chairman & Managing
Director, Executive Chairman, Managing Director or Executive Director for a term not
exceeding three years at a time.
No re-appointment shall be made earlier than one year before the expiry of term of the
Director appointed.
2.2 Independent Director
An Independent Director shall hold office for a term up to five years on the Board of
the Company and will be eligible for re-appointment on passing of a special resolution by
the Company and disclosure of such appointment in the Boards report.
No Independent Director shall hold office for more than two consecutive terms, but such
Independent Director shall be eligible for re-appointment in the Company as Independent
Director after the expiry of three years from the date of cessation as such in the
Company. The Committee shall take into consideration all the applicable provisions of the
Companies Act, 2013 and the relevant rules, as existing or as may be amended from time to
time.
2.3 Key Managerial personnel / Senior management or Other Employees.
The Term/ Tenure of the KMPs/ Senior Management Personnel and other employees
shall be as per the companies prevailing internally policy.
2 Removal
3 Removal
Due to reasons for any disqualification mentioned in the
Companies Act, 2013 and rules made thereunder or under any other applicable Act, rules
and regulations, or any other reasonable ground, the Committee may recommend to the Board
for removal of a Director, KMP or SMP subject to the provisions and compliance of the Act,
rules and regulations.
4 Retirement
(a) The Director shall retire as per applicable provisions of the Companies Act, 2013
along with the Rules made thereunder.
(b) The KMPs & SMPs shall retire on attaining the age of 60 (sixty) years or later
as may be so decided by the CMD (Shri Deepak Kumar Singhania) and or WTD (Shri A K
Singhania
(c) Existing KMPs and or SMPs who are of over 60 years of age shall continue in service
of the Company till such time as may be decided by CMD (Shri Deepak Kumar Singhania) and
or WTD (Shri A K Singhania).
(d) Any new appointment of KMP(s) and SMP(s) who are 60 years of age or above can be
made by the CMD (Shri Deepak Kumar Singhania) and or WTD (Shri A K Singhania) and such
person(s) shall retire as may be decided by the aforesaid CMD / WTD.
5 Diversity on the Board of the Company
The Company aims to enhance the effectiveness of the Board by diversifying it and
obtain the benefit out of it by better and improved decision making. In order to ensure
that the Companys board room has appropriate balance of skills, experience and
diversity of perspectives that are imperative for the execution of its business strategy,
the Company shall consider a number of factors, including but not limited to skills,
industry experience, background, race and gender.
The Policy shall conform with the following two principles for achieving diversity on
its Board:
Decisions pertaining to recruitment, promotion and remuneration of the directors
will be based on their performance and competence; and
For embracing diversity and being inclusive, best practices to ensure fairness
and equality shall be adopted and there shall be zero tolerance for unlawful
discrimination and harassment of any sort whatsoever. In order to ensure a balanced
composition of executive, non-executive and independent directors on the Board, the
Company shall consider candidates from a wide variety of backgrounds, without
discrimination based on the following factors:
Gender- The Company shall not discriminate on the basis of gender in the
matter of appointment of director on the Board. Age- Subject to the applicable provisions
of Companies Act, 2013, age shall be no bar for appointment of an individual as director
on the Board of the Company.
Nationality and ethnicity- The Company shall promote having a board room
comprising of people from different ethnic backgrounds so that the directors may
efficiently contribute through their knowledge, sources and understanding for the benefit
of Companys business;
Physical disability- The Company shall not discriminate on the basis of any
immaterial physical disability of a candidate for appointment on Companys Board, if
he/she is able to efficiently discharge the assigned duties.
Educational qualification- The proposed candidate shall possess desired team
building traits that effectively contribute to his/ her position in the Company. The
Directors of the Company shall have a mix such as of finance, legal and management
background, that taken together, provide the Company with considerable experience in a
range of activities including varied industries, education, government, banking, and
investment.
6 Remuneration
In discharging its responsibilities the Committee shall have regard to the following
Policy objectives :
(a) The level and composition of remuneration is sufficient to attract,reasonable
retain and and motivate Directors, KMPs, SMPs and other employees of the quality, required
to run the Company successfully;
(b) The remuneration to Directors, KMPs SMPs & other employees will be by way of
fixed pay as per current policy of the Company and as per the provisions of Companies Act,
2013 and rules made there under. Company will introduce incentive pay as and when feasible
depending upon its revival.
The payment structure of remuneration will be as follows:
6.1 Non-Executive / Independent Directors :
The Independent Directors will be paid remuneration by way of sitting fee for attending
meeting of the Board or any Committee thereof, provided that such amount shall be subject
to the ceiling of the limit as prescribed under the Companies Act, 2013 or Rules made
there under or any other enactment for the time being in force and the same is to be
approved by the Board of Directors as recommended by the Committee.
6.2 Chairman & Managing Director (CMD) / Whole-time Director (WTD) :
The remuneration/ compensation payable to CMD / WTD shall be governed by the provisions
of Companies Act, 2013 and Rules made there under or any other enactment for the time
being in force and will be subject to approval of the Board of Directors, shareholders and
the Central Government wherever required and shall be in compliance with Schedule V of the
Companies Act. 2013.
6.3 Key Managerial Personnel (KMP)/Senior Management Personnel (SMP):
Since the Company is a sick industrial Company registered with the Honble Board
for Industrial and Financial Reconstruction ("BIFR") under the provisions of
Section 15 (1) of the Sick Industrial Companies (Special Provisions) Act, 1985
("SICA"), the remuneration policy for KMPs & SMPs has been designed to
provide multiple options inter-alia for the purpose of operational convenience and
requirement.
(a) The existing KMPs & SMPs shall be eligible for a monthly fixed remuneration as
per the existing terms of employment.
(b) For any appointment of new KMP/SMP, the remuneration will be as decided by the
Board on receipt of recommendation by the NRC. However, CMD, Shri Deepak Kumar Singhania
and / or WTD, Shri Anurag Kumar Singhania, may approve the appointment of any new
KMP(s)/SMP(s) which shall be done by the Company and such appointment will be intimated to
the Committee for their consideration and recommendation to the Board for their
confirmation.
(c) Any increment which is beyond the policy of the Company to the existing
remuneration / compensation of the KMPs/SMPs will be recommended by the Committee to the
Board for their approval based on performance evaluation.
(d) The CMD and / or WTD shall have power to approve that the Company grants and pays
any ex-gratia amount not exceeding 100% of any persons annual remuneration and or
upto 50% increase in the persons annual remuneration to KMP(s)/SMP(s) depending upon
their performance.
(e) The said increment and or ex-gratia approved by the CMD / WTD will be intimated to
the Committee at its subsequent meeting.
6.4 Other Employees
The power to decide / determine structure of remuneration for other employees has been
delegated to the HR Department of the Company and which will be made in consultation /
consent of CMD, Shri Deepak Kumar Singhania and / or WTD, Shri Anurag Kumar Singhania.
6.5 Loans / advances
i) The power to give loans & advances to employees, including Key Managerial (CS
and CFO) / Senior Management Personnel is delegated to Chairman & Managing Director,
Shri Deepak Kumar Singhania and / or Whole-time Director, Shri Anurag Kumar Singhania and
they may give loans / advances to employees, including Key Managerial Personnel (CS and
CFO) / Senior Management Personnel on the terms & conditions of the Company as
formulated with or without interest as they may deem proper and decide (Annexure
2).
ii) The existing loans & advances to the employees including Key Managerial
Personnel (CS and CFO) / Senior Management Personnel will continue on the existing terms
& conditions or as may be decided by the Chairman & Managing Director, Shri Deepak
Kumar Singhania and / or Whole-time Director, Shri Anurag Kumar Singhania.
6 Evaluation
7 Evaluation
7.1 Criteria for evaluation of Executive Directors:
(i) The Executive Director(s) shall be evaluated on the basis of targets / Performance
of the Company / any other Criteria as may be given to them by the Board from time to
time.
(ii) The Executive Director(s) shall be evaluated by the Independent Directors in their
separate meeting where the performance of nonindependent director(s) and the Board
as a whole shall be considered
7.2 Criteria for evaluation of Non-Executive Directors:
The performance evaluation of Independent Directors shall be done by the entire Board
of Directors excluding the Director being evaluated.
The Non-Executive Directors shall be evaluated on the basis of the following criteria
i.e. whether they :
(a) act objectively and constructively while exercising their duties;
(b) exercise their responsibilities in a bona fide manner in the interest of the
company; sufficient time
(c) devote and attention to their professional obligations for informed and balanced
decision making;
(d) do not abuse their position to the detriment of the company or its shareholders or
for the purpose of gaining direct or indirect personal advantage or advantage for any
associated person;
(e) refrain from any action that would lead to loss of his independence
(f) inform the Board immediately when they lose their independence,
(g) assist the company in implementing the best corporate governance practices.
(h) strive to attend all meetings of the Board of Directors, the Committees and the
general meetings of the Company;
(i) participate constructively and actively in the committees of the Board in which
they are chairpersons or members;
(k) keep themselves well informed about the company and the external environment in
which it operates;
(l) do not to unfairly obstruct the functioning of an otherwise proper Board or
committee of the Board;
(m) moderate and arbitrate in the interest of the company as a whole, in situations of
conflict between management and shareholders interest.
(n) abide by Companys Memorandum and Articles of Association, Companies Act,
rules made thereunder and Listing agreement, companys policies and procedures
including code of conduct, insider trading guidelines etc.
(o) Any other factor that the Independent Director(s) / Board of Directors may consider
necessary for such evaluation.
(p) Safeguarded the confidentiality.
7.3 Criteria for evaluating performance of Key Managerial Personnel and Senior
Management Personnel:
Criteria for evaluating performance of KMPs and Senior Management Personnel shall
be as per the KRAs given to them at the beginning of the year by their respective
reporting heads.
7.4 Criteria for evaluating performance of Other Employees:
The power to decide the criteria for evaluating performance of other employees has been
delegated to HR Department of the Company.
MINUTES OF COMMITTEE MEETING
Proceedings of all meetings must be recorded as minutes and signed by the Chairman of
the Committee within the prescribed period, and the said Minutes of the Committee meetings
will be tabled at the subsequent Board and Committee meeting. The company should prepare
the minutes and get it signed in such manner as prescribed in Companies Act, 2013 and
Secretarial Standards issued by Institute of Company Secretaries of India.
DISCLOSURE OF THIS POLICY
The policy shall be disclosed in the Annual report of the Company, as required under
Companies Act, 2013, rules made there under and the Listing Agreement, as amended from
time to time and as may be required under any other law for the time being in force.
REVIEW
The Committee as and when required shall assess the adequacy of this Policy and make
any necessary or required amendments to ensure it remains consistent with the Boards
objectives, current law and best practice.
ANNEXURE-1 TO THE POLICY ANNEXED WITH BOARDS REPOR
Criteria for determination of the Fit and Proper Criteria. Name of
Company: LML Limited
Declaration and Undertaking
I. Personal details of the Candidate/ Director
a. Full name
b. Date of Birth
c. Educational Qualifications
d. Relevant Background and Experience
e. Permanent Address
f. Present Address
g. E-mail Address/ Telephone Number
h. Permanent Account Number under the Income Tax Act
i. Relevant knowledge and experience
j. Any other information relevant to Directorship of the Company.
II. Relevant Relationships of Candidate/ Director
a. List of Relatives if any who are connected with the Company (w.r.t. the Section
2(76) & 2(77) of the Companies Act, 2013)
b. List of entities, if any, in which he/ she is considered as being interested [
w.r.t. Section 184 of the Companies Act, 2013]
c. Names of other Companies in which he/ she is or has been a member of the board
during the last 3 years (giving details of period during which such office was held)
III. Records of professional achievements
a. Relevant Professional achievements
IV. Proceedings, if any, against the Candidate/ Director
a. If the person is a member of a professional association/ body, details of
disciplinary action, if any, pending or commenced or resulting in conviction in the past
against him/her or whether he/ she has been banned from entry of at any profession/
occupation at any time.
b. Whether the person attracts any of the disqualifications envisaged under Section 164
of the Companies Act 2013?
c. Whether the person in case of appointment as Executive Chairman, Managing Director,
Whole-time Director attracts any of the disqualification envisaged under Schedule V of
Companies Act, 2013 ?
d. Whether the person at any time come to the adverse notice of a regulator such as
SEBI, IRDA, MCA ?
V. Any other explanation/ information in regard to items I to III and other information
considered relevant for judging fit and proper.
Undertaking
1. I confirm that the above information is to the best of my knowledge and belief true
and complete. I undertake to keep the Company fully informed, as soon as possible, of all
events which take place subsequent to my appointment which are relevant to the information
provided above.
2. I also undertake to execute the deed of covenant required to be executed by all
directors of the Company.
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