Dear Shareholders,
Your Directors present herewith the Twenty Fourth Annual Report on the
business and operations of the Company together with financial statements for the
financial year ended 31st March, 2023.
SUMMARISED STATEMENT OF PROFIT AND LOSS:
Rs in million
Particulars |
Standalone |
Consolidated |
|
Financial Year 2022-23 |
Financial Year 2021-22 |
Financial Year 2022-23 |
Financial Year 2021-22 |
Revenue from operations |
67,675.07 |
56,970.87 |
88,040.46 |
75,491.40 |
Other income |
282.00 |
243.94 |
454.27 |
410.38 |
Total income |
67,957.07 |
57,214.81 |
88,494.73 |
75,901.78 |
Raw Material Cost |
45,326.04 |
37,583.26 |
53,295.23 |
44,201.44 |
Employee Benefit expenses |
3,241.77 |
2,903.13 |
7,636.05 |
6,943.58 |
Finance cost |
42.70 |
18.20 |
205.77 |
63.54 |
Depreciation |
2,407.08 |
2,037.38 |
4,215.80 |
3,817.26 |
Other expenses |
11,314.92 |
9,197.90 |
16,746.52 |
14,700.00 |
Total expenditure |
62,332.51 |
51,739.87 |
82,099.37 |
69,725.82 |
Profit before exceptional
items and tax |
5,624.56 |
5,474.94 |
6,395.36 |
6,175.96 |
Exceptional Items |
102.85 |
314.50 |
102.85 |
314.50 |
Profit before tax |
5,521.71 |
5,160.44 |
6,292.51 |
5,861.46 |
Net Tax expense |
1,432.54 |
1,343.01 |
1,496.76 |
1,254.37 |
Net profit for the year |
4,089.17 |
3,817.43 |
4,795.75 |
4,607.09 |
DIVIDEND:
The Board of Directors, at its meeting held on 17th May, 2023, has
recommended dividend of Rs 7 per equity share of Rs 10 each (@ 70%) (previous year Rs 6.25
per equity share), for the financial year 2022-23, for consideration of the Members at the
ensuing Twenty Fourth Annual General Meeting ("AGM").
The dividend, if approved by the Members, will result in an outgo of Rs
984.64 million.
The dividend pay-out is in accordance with the Company's Dividend
Distribution Policy.
Dividend Distribution Policy
This policy has been framed and adopted in terms of Regulation 43A of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("Listing Regulations"). The policy, inter alia, lays down various parameters
relating to declaration / recommendation of dividend. There has been no change to the
policy during the financial year 2022-23.
The policy is placed on the Company's website https: / / www.e nd
urancegro up.com/wp-content/ uploads/2022/1 1 /Dividend-Distribution-Policy.pdf
Transfer to reserves
The Company has not transferred any amount of profits to reserves.
INDUSTRY OVERVIEW AND COMPANY'S PERFORMANCE:
The performance of the auto industry reflected a positive sentiment.
During the financial year ended 31st March, 2023, the auto industry recorded a growth of 1
1.8% as compared to the previous financial year. The sales of two wheelers also witnessed
an increase by 8.3% and three wheeler sales increased by 12.2%. Despite inflation trending
higher through the year and disruption in supply chain due to volatile geo-political
situation, a combination of improved chip supply, higher incomes and pent-up demand
resulted in increased sales of automobiles.
During the year under review, the Company posted a total income of Rs
67,957.07 million on a standalone basis as against Rs 57,214.81 million in the previous
year. The total income on a consolidated basis was Rs 88,494.73 million compared to Rs
75,901.78 million in the previous year. The Company's total income on standalone and
consolidated basis grew by 1 8.8% and 1 6.6%, respectively. In the financial year 2022-23,
77% of Company's consolidated total income, including other income came from Indian
operations and the balance 23% came from the overseas operations.
The Company's profit after tax grew by 7.1 % in the financial year
2022-23 at Rs 4,089.17 million as against Rs 3,817.43 million in the previous year, on
standalone basis; while consolidated profit after tax grew by 4.09% at Rs 4,795.75 million
as against Rs 4,607.09 million in the previous year.
Acquisition of Maxwell Energy Systems Private
Limited
The Company acquired 51% share capital of Maxwell Energy Systems
Private Limited ("Maxwell") on 1st July, 2022, through a combination of primary
issuance and secondary purchase, comprising 69,873 shares of face value of Rs 1 each. The
acquisition was for a total investment of Rs 1,350 million and was effective 1st July,
2022, pursuant to which Maxwell became a subsidiary of the Company.
Maxwell was a wholly owned subsidiary of a US based company, ION Energy
Inc. ("ION"). Maxwell is in the business of embedded electronics particularly in
Battery Management Systems ("BMS") for vehicles including electric vehicles
("EV"). Maxwell also designs and develops BMS for stationary batteries / energy
storage solutions. Maxwell's BMS leverages on proprietary algorithms to improve battery
life and performance.
The acquisition will facilitate the group's foray into an EV-centric
product line as an early participant to offer BMS to auto OEMs. It is expected that, as a
preferred tier-1 auto component supplier, the Company will effectively leverage its
business relationships to further grow the acquired business with its OEM customers.
CONSOLIDATED FINANCIAL STATEMENTS:
As per Regulation 33 of the Listing Regulations and Section 129 of the
Companies Act, 2013 ("Act") read with the rules issued thereunder, consolidated
financial statements of the Company for the financial year 2022-23 have been prepared in
compliance with applicable accounting standards. The audited financial statements of the
Company and its subsidiaries (including step-down subsidiaries) have been approved by the
board of directors of respective entities.
During the year under review, the Board of Directors reviewed the
affairs of the subsidiary companies in accordance with Section 129(3) of the Act.
Consolidated financial statements together with the statutory auditor's report thereon
form part of this Annual Report.
SUBSIDIARIES:
The Company has eleven operating subsidiaries as on 31st March, 2023
and as on the date of this Report, as tabulated below. Details of the subsidiary companies
and their performance are detailed in the Management Discussion and Analysis Report,
forming part of this Annual Report.
Sr. no. |
Name of subsidiary |
Brief particulars |
1. |
Endurance Overseas S.r.L, Italy (EOSrl),
Direct Subsidiary |
A special purpose vehicle (SPV) in Italy for
making strategic overseas investments and it is a direct subsidiary of the Company. |
2. |
Endurance SpA, Italy Step-down subsidiary |
Engaged in the activity of carrying out high
pressure aluminium die casting and machining operations from its plants in Lombardore and
Chivasso, Italy. |
3. |
Endurance Engineering S.r.L, Italy Step-down
subsidiary |
Engaged in the production of plastic
components for automotive applications from its plant in Grugliasco, Italy. |
4. |
Endurance Castings SpA, Italy Step-down
subsidiary |
Primarily engaged in manufacturing of high
pressure die casting and machining components having a plant in Bione, Italy. |
5. |
Endurance Adler SpA, Italy Step-down
subsidiary |
The company is having a plant in Rovereto,
Italy and manufactures clutches and braking systems. |
6. |
Veicoli S.r.l, Italy Step-down subsidiary |
The company offers a software platform to
companies that operate fleets of commercial and passenger. It operates from Turin, Italy. |
7. |
Frenotecnica Sri, Italy Step-down subsidiary |
The company is located in Rovereto, (Trento),
Italy. It is engaged in the business of designing and manufacturing of friction materials
and components for braking systems for two-wheeler vehicles. The primary business activity
comprises sale of brake pads under its registered trademark "Brenta" for
aftermarket and replacement business. |
8. |
New Fren Sri, Italy Step-down subsidiary |
The company is located in Cirie, Turin,
Italy. It manufactures brake discs, centrifugal clutches, pads and brake shoes for
two-wheeler vehicles through aftermarket channels and replacement business. |
9. |
GDS Sari, Hammas Sousse, Tunisia
Step-down subsidiary |
The company is a subsidiary of New Fren Sri
with its manufacturing facility in Hammas Sousse, Tunisia. It supports its parent entity
in the same line of business activities. |
10. |
Endurance GmbH, Germany Direct Subsidiary |
The company is primarily engaged in the
manufacturing of high pressure die casting and machining components with plants in
Massenbachhausen, Germany. |
11 |
Maxwell Energy Systems Private Limited,
India, Direct Subsidiary |
The Company is located in Mumbai,
Maharashtra, India and it is into the business of advanced embedded electronics for BMS
for EVs. |
Further, as on 31st March, 2023 and as on the date of this report, the
Company has one associate company, TP Green Nature Limited ("TP Green"). During
the year under review, the Company has invested Rs 65.85 million in TP Green and holds
6,584,488 equity shares of Rs 10 each being 26% of its paid-up equity share capital. TP
Green is an 'associate company' of the Company, in terms of Section 2(6) of the Act.
However, the Company does not exercise any 'significant influence' in the management of
its business affairs nor has any rights / obligations, except as its shareholder.
Therefore, financial statements of TP Green are not required to be considered for
consolidation in terms of Section 129 of the Act.
TP Green is a special purpose vehicle incorporated by TATA Power
Renewable Energy Limited and is engaged in the business of solar power generation with a
capacity of 12.5 MW. This investment enables the Company to qualify itself as a captive
consumer as per the captive mechanism rules under the Electricity Act for procuring solar
energy from TP Green for its certain manufacturing plants located in Chakan and Waluj,
Maharashtra.
There has been no material change in the nature of business of the
subsidiaries. During the year under review:
1. EOSrl acquired 100% equity stake in Frenotecnica Sri, Italy
("Frenotecnica") for an aggregate value of Rs 5,289,900, which includes
acquisition cost of 29,900. The effective date of acquisition was 10th June, 2022.
Frenotecnica, based in Rovereto (Trento), Italy, is engaged in the
business of designing and manufacturing of friction materials and components for braking
systems for application in two-wheelers.
2. The Company acquired 51% share capital of Maxwell Energy Systems
Private Limited ("Maxwell") on 1st July, 2022, through a combination of primary
issuance and secondary purchase, comprising 69,873 shares of face value of Re. 1 each. The
acquisition was for a total investment of Rs 1,350 million and was effective 1st July,
2022.
Maxwell is in the business of advanced embedded electronics,
particularly in BMS for automobiles (including EVs), energy storage systems and battery
packs.
3. EOSrl acquired 100% equity stake in New Fren Sri, Italy ("New
Fren") for a total investment of 1,1 65,394 which includes consideration of
1,150,000 and acquisition cost of 15,394. The effective date of acquisition
was 16th November, 2022.
New Fren is engaged in the business of designing, manufacturing and
sale of brake discs, centrifugal clutches, pads and brakes shoes for two-wheeler vehicles.
New Fren has a subsidiary namely, GDS Sari ("GDS"), situated
at Hammas Sousse, Tunisia, wherein it held 99% shareholding.
4. During the period under review, EOSrl acquired residual 1% stake in
GDS for an aggregate value of 2,600, equivalent to 8,580 Tunisian dinar. The
effective date of acquisition was 9th March, 2022.
In terms of Section 129(3) of the Act, a statement in Form AOC-1,
containing salient features of the financial statements of the Company's subsidiaries,
forms part of the Annual Report. A copy of the audited financial statements of each of the
subsidiary companies and English translation thereof will be available for inspection by
any shareholder of the Company at its registered office during business hours. These
financial statements are also placed on the Company's website at https://www.
endurancegroup.com/investor-relation/ annual-reports-of-subsidiaries.
SHARE CAPITAL:
The paid-up equity share capital as on 31st March, 2023, was Rs
1,406,628,480. There was no public issue, rights issue, bonus issue or preferential issue,
during the financial year under review. The Company has not issued shares with
differential voting rights, sweat equity shares, neither has it granted any employee stock
options nor issued any convertible securities.
DIRECTORS:
The composition of the Board of the Company, as on the date of this
Report is as follows:
Sr. No. |
Name of Director |
Position |
1. |
Mr. Soumendra Basu (DIN 01125409) |
Chairman
(Non-executive, Independent) |
2. |
Mr. Anurang Jain (DIN 00291662) |
Managing Director (Executive) |
3. |
Mr. Roberto Testore (DIN 01935704) |
Independent Director (Non-executive) |
4. |
Mr. Ramesh Gehaney Director and Chief
Operating (DIN 02697676) Officer (Executive) |
|
5. |
Mr. Satra jit Ray (DIN 00191467) |
Director and Group Chief Financial Officer
(Executive) |
6. |
Ms. Anjali Seth (DIN 05234352) |
Independent Director (Non-executive) |
7. |
Mr. Massimo Venuti (DIN 06889772) |
Director
(Non-executive) |
8. |
Mrs. Varsha Jain (DIN 08947297) |
Director and Head - CSR and Facility
Management (Executive) |
9. |
Mr. Indrajit Banerjee (DIN 01365405) |
Independent Director (Non-executive) |
10. |
Mr. Anant Talaulicar (DIN 00031051) |
Independent Director (Non-executive) |
Retirement of directors by rotation
In terms of Section 152(6) of the Act, Mr. Massimo Venuti, who retires
by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment.
Information as required under Regulation 36(3) of the Listing Regulations is provided in
the Notice convening the AGM.
KEY MANAGERIAL PERSONNEL:
The following officials are 'Key Managerial Personnel' of the Company
in terms of the provisions of Sections 2(51) and 203 of the Act:
i. Mr. Anurang Jain, Managing Director;
ii. Mr. Ramesh Gehaney, Director and Chief Operating Officer (Whole
Time Director);
iii. Mr. Satrajit Ray, Director and Group Chief Financial Officer
(Chief Financial Officer);
iv. Mrs. Varsha Jain, Director and Head - CSR and Facility Management
(Whole Time Director); and
v. Mr. Sunil Lalai, Company Secretary and Executive Vice President -
Legal (Company Secretary).
There has been no change in the Key Managerial Personnel during the
year under review.
Board of Directors and its Committees
During the financial year under review, the Board met five times. A
detailed update on the Board, its composition and attendance of the Directors at each
meeting is provided in the Corporate Governance report.
The Board has constituted six Committees, namely, Audit Committee,
Nomination and Remuneration Committee, Corporate Social Responsibility Committee,
Stakeholders' Relationship Committee, Risk Management Committee and Finance Committee (a
non-statutory committee). All recommendations made during the year by the Committees
including the Audit Committee were accepted by the Board.
A detailed charter including terms of reference of various Board
constituted committees, number of committee meetings held during the financial year
2022-23 and attendance of members at each meeting, also forms part of the Corporate
Governance report.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) of the Act, the Directors, based on the
representation received from the management, confirm that:
i. in the preparation of the annual accounts for the year ended 31st
March, 2023, the applicable accounting standards have been followed and there are no
material departures;
ii. the directors 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 profit of the Company for that period;
iii. the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
iv. the directors have prepared the annual accounts on a going concern
basis;
v. the directors have laid down internal financial controls to be
followed by the Company and such internal financial controls are adequate and are
operating effectively; and
vi. the directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and are operating
effectively.
DECLARATION BY INDEPENDENT DIRECTORS:
In terms of Section 149(7) of the Act and Regulation 16(1) (b) of the
Listing Regulations, the Independent Directors of the Company have submitted their
declarations confirming compliance with the criteria of independence as stipulated
thereunder.
All Independent Directors of the Company have affirmed compliance with
the Company's Code of Conduct for Directors and Senior Management Personnel for the
financial year 2022-23.
The Board took on record declaration and confirmation submitted by the
Independent Directors regarding their fulfilment of the prescribed criteria of
independence, after assessing veracity of the same as required under Regulation 25 of the
Listing Regulations.
In terms of the amended Rules, an independent director is required to
apply online to the Indian Institute of Corporate Affairs ("MCA") for inclusion
of his / her name in the data bank for such period till he / she continues to hold office
of an independent director in any company.
In terms of Section 150 of the Act read with Rule 6 of the Rules,
Independent Directors of the Company have confirmed that they have registered themselves
with the databank maintained by IICA. Independent Directors are also required to undertake
online proficiency self-assessment test conducted by the IICA within a period of 2 (two)
years from the date of inclusion of their names in the data bank, unless they meet the
criteria specified for exemption. All Independent Directors of the Company are exempt from
the requirement to undertake online proficiency self-assessment test.
Opinion of the Board with regard to integrity,
expertise and experience (including proficiency) of the Independent Directors:
The Board is of the opinion that the Independent Directors of the
Company are professionally qualified and well experienced in their respective domains and
meet the criteria regarding integrity, expertise, experience and proficiency. Their
qualification and vast experience in varied fields helps in strengthening the Company's
systems and processes to align the same with good industry practices and
institutionalising tenets of corporate governance.
DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR
MATTERS UNDER SECTION 178 OF THE ACT:
In terms of Section 178 of the Act, the Nomination and Remuneration
Policy covers Directors, Key Managerial Personnel and Senior Management Personnel of the
Company. The policy, inter alia, lays down the principles relating to appointment,
cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior
Management Personnel of the Company.
Details of the Company's policy on directors' appointment and
remuneration, including criteria for determining qualifications, positive attributes,
independence of a director and other matters as stipulated under sub-section (3) of
Section 178 of the Act, forms part of the Corporate Governance report.
The policy was last revised by the Board at its meeting held on 18th
April, 2023 and pursuant to the Listing Regulations is also placed on the Company's
website at https://www. end urancegroup.com/wp-con tent/ uploads/2022/1 1
/nomination-and-remuneration-Policy- approved-by-the-Board-on-1 8-04-2023 .pdf.
PERFORMANCE EVALUATION:
In compliance with the provisions of Section 178 of the Act, the
Nomination and Remuneration Policy ("NR Policy") of the Company, inter alia,
specifies that the Board will conduct annual evaluation of its own performance, its
Committees and the directors individually. Performance evaluation of Directors shall be
done by the entire Board (excluding the Director being evaluated). The Nomination and
Remuneration Committee is responsible for implementation of the methodology followed by
the Company in this regard. The NR Policy of the Company is placed on the Company's
website at https://www.endurancegroup.com/wp-content/ uploads/2022/1 1
/nomination-and-remuneration-Policy- approved-by-the-Board-on-1 8-04-2023.pdf.
Performance of the Board is evaluated based on inputs from all the
directors on a structured questionnaire covering various aspects such as criteria of board
composition and structure, effectiveness of board processes, information and functioning,
orientation towards corporate governance and its contribution in effective management of
the Company. Assessment and observations on the performance of Board are discussed and key
action areas for the Board, Committees and Directors are noted for implementation.
Information and other details on annual performance assessment are
given in the Corporate Governance report.
SECRETARIAL STANDARDS:
The Company is in compliance with the Secretarial Standards on Meetings
of Board of Directors (SS-1) and General Meetings (SS-2).
INFORMATION ON BOARD MEETING PROCEDURE AND ATTENDANCE DURING THE
FINANCIAL YEAR 2022-23:
Board meetings of the Company are conducted as per the provisions of
the Act, the Listing Regulations and applicable Secretarial Standards. In the last meeting
of each calendar year, the Board decides the schedule of meetings to be held in the
succeeding year.
Based on the dates of meetings decided by the Board, adequate notice is
given to all directors and Committee members; an agenda with detailed notes thereon is
sent at least seven days before the respective meeting. If any board meeting is to be held
at a shorter notice, permission of at least one independent director is ensured. The notes
to agenda contain relevant information and supporting documents along with recommendation
from the management, for meaningful deliberation and / or decision on the agenda items.
A gist of Board and Committee meetings held during the year along with
attendance record of each Director forms part of the Corporate Governance report.
AUDIT COMMITTEE:
Audit Committee of the Company is constituted in terms of Section 177
of the Act and Regulation 18 of the Listing Regulations.
As on 31st March, 2023, the Committee comprised the following directors
as its members:
i. Mr. Indrajit Banerjee, Chairman;
ii. Mr. Soumendra Basu; and
iii. Ms. Anjali Seth.
All of the Committee members are non-executive independent directors
and are financially literate as required under Regulation 18(1) (c) of the Listing
Regulations.
The Committee invites the Managing Director, the Director and Group
Chief Financial Officer, the Director and Chief Operating Officer, to attend meetings of
the Committee. The Statutory Auditors and the Chief Internal Auditor are also invited for
specific agenda matters.
Mr. Sunil Lalai, Company Secretary and Executive Vice President - Legal
acts as Secretary to the Committee.
There was no change in the composition of the Committee during the year
under review.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:
The Corporate Social Responsibility ("CSR") Committee is
constituted in compliance with Section 135 of the Act.
As on 31st March, 2023, the CSR Committee comprised the following
directors as its members:
i. Mr. Anurang Jain, Chairman;
ii. Mr. Soumendra Basu;
iii. Mr. Ramesh Gehaney; and
iv. Mrs. Varsha Jain.
There was no change in the composition of the Committee during the year
under review.
RISK MANAGEMENT COMMITTEE:
The Risk Management Committee ("RMC") is constituted in
compliance with Regulation 21 of the Listing Regulations.
As on 31st March, 2023, the RMC comprised the following directors as
its members:
i. Mr. Anurang Jain, Chairman;
ii. Mr. Indrajit Banerjee;
iii. Mr. Ramesh Gehaney; and
iv. Mr. Satrajit Ray.
The Risk Management Policy of the Company is reviewed annually and it
was last revised in August, 2022. The updated policy is placed on the Company's website
https://www.endurancegroup.com/wp-content/ uploads/2022/1 1 /Risk-Management-Policy.pdf.
The policy lays down a framework for risk management and mitigation
process commensurate with the scale and nature of the Company's business. The policy also
identifies the risk categories in line with the Company's growth strategy, continually
changing business environment and legislative requirements. As per the terms of reference
of RMC, it is entrusted with the responsibility to periodically review the risk management
framework.
The risk management framework defines thresholds against each of the
identified risk events and mitigation measures to be adopted. The framework is reviewed
periodically by the respective functions, for necessary updates. The senior management
team reviews the critical risk events and implements action plans to avoid recurrence of
such events. A risk report is submitted bi-annually for review by the RMC and the same is
also placed before the Board for advice on matters of significance.
There was no change in the composition of the Committee during the year
under review.
CREDIT RATING:
During the year under review, CRISIL Ratings Limited (a subsidiary of
CRISIL Limited), a credit rating agency registered with the SEBI, has reaffirmed the
long-term rating for bank credit facilities and the short-term rating for bank credit
facilities / Commercial Papers as CRISIL AA+/Stable and CRISIL A1+, respectively. ICRA
Limited, a credit rating agency registered with SEBI had reaffirmed the ICRA AA+ (Stable)
rating for long term borrowing and ICRA A1+ rating for short term borrowing.
INTERNAL FINANCIAL CONTROLS:
In terms of Section 1 34(5)(e) of the Act, the term Internal Financial
Control means the policies and procedures adopted by a company for ensuring orderly and
efficient conduct of its business, including adherence to its policies, safeguarding of
its assets, prevention and detection of frauds and errors, accuracy and completeness of
the accounting records, and timely preparation of reliable financial information.
The Company has adequate Internal Financial Control systems in the form
of policies and procedures. It follows a structured mechanism of function-specific reviews
and risk reporting by senior management of the Company and critical matters are brought to
the attention of the Audit Committee and the Board. Further, internal Standard Operating
Procedures (SOPs) and Schedule of Authority (SOA) are well defined and documented to
provide clear guidance to ensure that all financial transactions are authorised, recorded
and reported correctly.
In order to record day-to-day financial transactions and ensure
accuracy in reporting thereof, the Company uses an established Enterprise Resource
Planning (ERP) system, which is equipped with 'maker and checker' mechanism and has an
audit trail of all transactions. Adequate controls and checks are built in the ERP system
to integrate the underlying books of account and prevent any kind of control failure.
Mapping of policies and procedures including SOPs and SOA is done through ERP and audit of
these processes forms part of the work scope of both internal and statutory auditors of
the Company.
The Company has an in-house Internal Audit (IA) team lead by a Chief
Internal Auditor. The Chief Internal Auditor, who functionally reports to the Audit
Committee and administratively reports to the Managing Director is responsible for leading
the IA department. The scope of work, accountability, responsibility, reporting and
authority of the IA department is defined in the Internal Audit Charter, which is reviewed
by the Audit Committee, annually.
The IA team draws up an internal audit plan before the start of a
financial year, which is approved by the Audit Committee and progress thereof is reviewed
by the Committee at its quarterly meetings. In order to ensure objectivity and
independence of the audit mechanism, internal audit activities for certain plants are
outsourced. The IA team conducts audits of plants and corporate functions, specifically
emphasising on systems, processes, procedures, guidelines and controls as also statutory
compliances, adherence to policies / SOPs, and internal guidelines issued by the
management. Implementation of the audit recommendations are monitored by the IA team.
Report on audit findings and corrective measures taken by the
respective process owners, is reviewed periodically by the senior management team of the
Company comprising the Managing Director, the Director and Group Chief Financial Officer,
and the Director and Chief Operating Officer. Significant observations and status of
implementation of recommendations of the IA team are presented to the Audit Committee. The
Committee reviews the report and advises on improving the systems and processes, where
necessary.
The Company's internal control mechanism is commensurate with the scale
of its operations thereby ensuring compliance with the Act and the Listing Regulations.
CORPORATE GOVERNANCE:
In compliance with Regulation 34 of the Listing Regulations, a separate
report on Corporate Governance along with a certificate from the statutory auditors
towards compliance with the provisions of Corporate Governance, forms an integral part of
this Annual Report.
The Managing Director and the Director and Group Chief Financial
Officer have certified to the Board with regard to financial statements and other matters
as required under Regulation 17(8) read with Schedule II to the Listing Regulations.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:
In terms of Regulation 34(2) of the Listing Regulations, a Business
Responsibility and Sustainability Report for the financial year 2022-23 forms part of this
Annual Report.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING AND FAIR DISCLOSURE
OF UNPUBLISHED PRICE SENSITIVE INFORMATION:
The Company has adopted a 'Code of Conduct for Prevention of Insider
Trading' ("PIT Code") in terms of the SEBI (Prohibition of Insider Trading)
Regulations, 2015, ("PIT Regulations"). Further, the Company has also adopted a
'Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive
Information' ("UPSI Code").
The PIT Code and the UPSI Code are drawn up on the principle that the
Company's directors and employees owe a fiduciary duty, inter alia, to the shareholders of
the Company to place the interest of shareholders above their own and conduct their
personal securities transactions in a manner that does not give rise to any conflict of
interest.
The PIT Code lays down guidelines for 'designated persons' on the
procedures to be followed and disclosures to be made while dealing in securities of the
Company and also stipulates the consequences of non-compliances or leak of confidential
price sensitive information.
The UPSI Code documents the manner of disseminating Unpublished Price
Sensitive Information ("UPSI") for making it accessible to the public on
non-discriminatory basis. The UPSI Code was last reviewed and revised by the Board of
Directors at its meeting held on 8th February, 2023.
Any information is determined to be UPSI, based on the principles
enumerated in the Company's Policy on Determination of Materiality of Event / Information.
In addition to the above, the Company also maintains a Structured
Digital Database in terms of Regulation 3(5) of the PIT Regulations containing the nature
of UPSI and the names of persons sharing the information, names of persons with whom
information is shared along with the Permanent Account Number or any other identifier
authorised by law.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo as stipulated under Section 1 34(3) (m) of the Act
read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure I.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:
In terms of Section 135 of the Act read with Schedule VII to the Act
and Company's Corporate Social Responsibility ("CSR") Policy, the Company
undertakes CSR projects under the aegis of Sevak Trust, with whom it has been associated
for more than a decade. The CSR projects and programmes recommended by the CSR Committee
and approved by the Board are aimed towards enhancing employability by imparting
skill-building vocational training to unemployed youth and undertaking developmental
activities in villages to improve living standards and welfare through education,
promoting health and hygiene, water conservation and
agriculture oriented initiatives, providing community facilities, etc.
As part of its CSR initiatives, the Company has also undertaking the responsibility of
upgrading the Sevak Trust Balwadi. The land parcel admeasuring 6,000 sq. mtr. was
purchased in June 2022 at Waluj, Aurangabad and construction of new school premises has
been initiated in the financial year under review. The upgraded Balwadi will be equipped
with latest infrastructure and learning tools for primary education.
Salient features of the CSR Policy, are available on the Company's
website at https://www.endurancegroup. com/wp-content/uploads/2022/1 1 /Corporate-Social-
Responsibility-Policy, pdf. The Annual Report on CSR activities is attached as Annexure
II to this Report.
In terms of Section 1 35 of the Act read with Rule 4(5) of the
Companies (Corporate Social Responsibility Policy) Rules, 2015, the Director and Group
Chief Financial Officer of the Company has provided requisite certificate that the funds
disbursed by the Company to Sevak Trust during the financial year 2022-23 have been
utilised for the respective purposes and in the manner as approved by the Board.
Expenditure towards CSR activities
As per the requirements under the Act, the Company earmarked an amount
of Rs 1 10.26 million for the financial year 2022-23, calculated based on the average net
profit before tax of the immediate preceding three financial years. The Board of Directors
approved the following projects / programmes to be undertaken as CSR activities during the
financial year 2022-23, and all of these activities were as per Schedule VII to the Act
and the CSR Policy of the Company:
1. Village Development Project;
2. Setting up and running of Vocational Training Centre; and
3. Purchase of land parcel for construction of new building of Sevak
Trust Balwadi and recurring expenses for running the school on existing premises taken on
rent.
The total amount spent by the Company, during the financial year
2022-23 towards approved CSR projects and programmes was Rs 112.67 million, which included
administrative overheads, as against the budget of Rs 110 million towards CSR expenses.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:
During the year under review, no instances of fraud have been reported
under Section 143(12) of the Act.
AUDITORS:
Statutory Auditors
Based on the recommendation of the Board, the Members of the Company at
their Twenty Third AGM held on 24th August, 2022, approved appointment of M/s. S R B C
& CO. LLP (ICAI Registration No. 324982E/E300003) ("SRBC") as Statutory
Auditors of the Company for a second term of five consecutive years. This appointment was
from the conclusion of the Twenty Third AGM held in the year 2022 till the conclusion of
the Twenty Eighth AGM to be held in the year 2027, covering financial years from 2022-23
to 2026-27.
The Statutory Auditors of the Company have issued an unmodified opinion
on the financial statements, both standalone and consolidated, for the financial year
ended 31st March, 2023. The Auditors Reports for the financial year ended 31st March, 2023
on the financial statements of the Company forms part of this Annual Report.
Cost Auditor
As per the provisions of Section 148 of the Act and Rule 3 of the
Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost
records with respect to the manufacturing activities, viz. manufacturing of engine
components, manufacturing of dies and moulds, and generation of electricity through
windmills, and get the same audited.
Based on the recommendation of the Audit Committee, the Board has
appointed Mr. Jayant B. Galande, Cost Accountant (Membership No. M-5255) as Cost Auditor
of the Company for the financial year 2023-24. The remuneration proposed is Rs 450,000 and
is subject to ratification by the shareholders at the ensuing AGM. The said remuneration
is excluding applicable taxes and out-of-pocket expenses, if any, payable at actuals.
Secretarial Auditor
In terms of the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
had appointed Mr. Sachin Bhagwat (Membership No. A10189, CP No. 6029) Practicing Company
Secretary, to conduct an audit of the secretarial records for the financial year 2022-23.
The Secretarial Audit report for the financial year 2022-23 is set out
as Annexure III to this Report. The said report does not contain any qualification,
reservation or adverse remark.
DISCLOSURES:
Policies of the Company
The Listing Regulations mandate formulation of certain policies for
listed companies. Accordingly, the Board of
Directors has, from time to time, framed and approved policies as
required under the Listing Regulations as well as under the Act.
Certain key policies that have been framed by the Company include:
Sr.no. |
Name of Policy |
1. |
Nomination and Remuneration Policy |
2. |
Corporate Social Responsibility Policy |
3. |
Dividend Distribution Policy |
4. |
Vigil Mechanism-cum-Whistle Blower Policy |
5. |
Risk Management Policy |
6. |
Code of Conduct for Prevention of Insider
Trading |
7. |
Code of Conduct for Directors and Senior
Management Personnel |
8. |
Code of Practices and Procedures for Fair
disclosure of Unpublished Price Sensitive Information |
9. |
Policy for determination of Materiality of
Subsidiaries |
10. |
Policy for Determination of Materiality of
and Dealing with Related Party Transactions |
11. |
Policy for Determination of Materiality of
Events / Information |
12. |
Policy for Preservation of Documents |
13. |
Archival Policy for disclosures to Stock
Exchanges |
The above-mentioned policies are available on the Company's website at
the link www.endurancegroup.com/ investor-relations.
These policies are periodically reviewed by the Committees responsible
therefor and changes, if any, are recommended to the Board for approval. Changes to the
policies also factor amendments in statutes or governing regulations. During the period
from 1st April, 2022, till the date of this Report, the following policies were revised:
Sr.
No. |
Name of Policy |
Revised effective |
i. |
Policy for Determination of Materiality of
Event / Information |
29th April, 2022 |
2. |
Archival Policy for disclosures to Stock
Exchanges |
|
3. |
Nomination and Remuneration Policy ("NR
Policy") |
1 9th May, 2022 and later on 1 8th April,
2023 |
4. |
Risk Management Policy |
10th August, 2022 |
5. |
Corporate Social Responsibility Policy
("CSR Policy") |
7th November, 2022 |
6. |
Fraud Prevention and Detection Policy |
|
7. |
Code of Conduct for Directors and Senior
Management Personnel |
8th February, 2023 |
8. |
Code of Practices and Procedures for Fair
disclosure of Unpublished Price Sensitive Information |
|
The Board of Directors, at its meeting held on 7th November, 2022 has
approved the revised CSR Policy of the Company to align it with "National Guidelines
on Responsible Business Conduct" ("NGRBC") issued by the Ministry of
Corporate Affairs and based on the recommendation made by the Corporate Social
Responsibility ("CSR") Committee at its meeting held on 7th November, 2022.
Kindly refer Annexure II for salient features of the CSR Policy enumerated in the
Annual Report on Corporate Social Responsibility activities.
Further, based on the recommendation of Nomination and Remuneration
Committee, the NR Policy was revised by the Board, at its meeting held on 18th April,
2023. Certain sections of the NR Policy were redrafted to align with the practice being
followed by the Company for appointment of directors and review of their remuneration.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
Disclosure of remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are annexed herewith as Annexure IV.
A statement containing particulars of employees as required under
Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is provided as a separate annexure
forming part of this Report. In terms of Section 136 of the Act, the Annual Report and
financial statements are being sent to the shareholders excluding the aforesaid annexure.
The said annexure is available for inspection at the registered office of the Company
during business hours and will be made available to any shareholder on request.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has not advanced any loans or given guarantees covered
under the provisions of Section 1 86 of the Act. Particulars of investments form part of
the notes to financial statements. Kindly refer notes nos. 4, 4A and 4B of the standalone
financial statements for the details of investments made by the Company as on 31st March,
2023.
FIXED DEPOSITS:
During the year under review, the Company has not accepted any deposits
from the public.
VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:
In terms of the provisions of Section 177(9) of the Act, read with Rule
7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has
established a vigil mechanism, which forms part of the Vigil Mechanism-Cum- Whistle Blower
Policy in terms of Regulation 22 of the Listing Regulations for directors and employees.
The objective of this policy is to provide a reporting mechanism for any person who
observes any unethical behaviour, actual or suspected fraud, or violation of the Company's
Code of Conduct for Directors and Senior Management Personnel and the Endurance Code of
Conduct for all employees ("Codes of Conduct"). Such person can report the same
to the Ombudsman appointed under the policy. The said policy also encompasses reporting of
instances of leak of Unpublished Price Sensitive Information ("UPSI").
Protected disclosures can be made by a whistle blower to a dedicated
e-mail ID and or postal address of Ombudsman, appointed under the policy. The policy has
been hosted on the Company's website at https://www.endurancegroup.com/
wp-content/uploads/2022/1 1 /Whistle-Blower-policv.pdf.
An Ombudsman has been appointed in terms of the provisions of the Act
to independently investigate protected disclosures communicated under the policy and
matters of violation to the Codes of Conduct.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
COMPANY BETWEEN 31st MARCH, 2023 AND DATE OF BOARD'S REPORT:
There have been no material changes and commitments affecting the
financial position of the Company, which have occurred between the end of the financial
year and the date of this Report.
RELATED PARTY TRANSACTIONS:
As per the Listing Regulations, all Related Party Transactions
("RPT") and any modifications thereto are placed before the Audit Committee for
approval. Further, the Audit Committee accords specific / omnibus approval for RPTs, which
are in ordinary course of business and satisfy the principles / conditions of being at
arm's length basis. The Audit Committee reviews, on a quarterly basis, the details of the
RPTs entered pursuant to the aforementioned omnibus approval.
Particulars of RPTs entered during the year
2022-23
During the financial year, the Company did not enter into any contract
/ arrangement / transaction with related parties, which could be considered material for
which shareholders' approval, is required in accordance with Section 188 of the Act and
the Policy on Determining Materiality of and Dealing with Related Party Transaction
("RPT Policy").
Accordingly, there is no information to be disclosed in Form AOC-2,
while the particulars of all RPTs in terms of Indian Accounting Standard (Ind AS) - 24 are
forming part of the financial statements.
The RPT Policy of the Company, as approved by the Board, can be
accessed on the Company's website at https://www.e ndurancegroup.com/wp-con tent/
uploads/2022/1 1 /Policy-for-Determination-of-Materiality-of-
and-Dealing-with-Related-Party-Transactions.pdf.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY
REGULATORS OR COURTS:
There were no significant material orders passed by Regulators / Courts
which would impact the going concern status of the Company and its future operations.
ANNUAL RETURN:
In terms of Section 92(3) read with Section 1 34(3)(a) of the Act, the
annual return of the Company for the financial year ended 31st March, 2023 shall be
available on the Company's website: https://www.endurancegroup.com/
investor-relation/annual-return/.
DISCLOSURE UNDERTHE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has adopted a "Policy on Safety & Security and
Prevention of Sexual Harassment of Women Employees" ("POSH Policy") in line
with the requirements of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. The POSH Policy aims to provide a safe, friendly,
positive and productive working environment and promote an atmosphere in which employees
can realise their maximum potential. The policy applies to all permanent and temporary
employees and also to workforce engaged by the Company through contractors.
The Company observes zero tolerance towards any kind of violation of
the aforementioned POSH Policy. As per POSH Policy, the Company has constituted Internal
Committees ("1C") for all its locations. Such committees are chaired by a female
employee and other senior management officials of the Company are its members along with
an external member who has experience in dealing with cases relating to sexual harassment.
The 1C is responsible for redressal of complaints related to sexual harassment and follows
the guidelines provided in the POSH Policy.
During the year under review, three complaints were received by the 1C
under the POSH Policy. Out of three complaints, one has been satisfactorily resolved, and
inquiry and investigation of the other two complaints has been completed and 1C is in the
process of concluding the same.
INDUSTRIAL RELATIONS:
During the year under review, the industrial relations remained
cordial.
As on the date of this Report, the Company has twelve agreements
entered into with labour unions for the Company's plants located at Waluj (Aurangabad,
Maharashtra), Chakan (Dist. Pune, Maharashtra) and Pantnagar (Uttarakhand), out of which
eight agreements were due for renewal during the period under review and were accordingly
executed.
INVESTOR EDUCATION AND PROTECTION FUND:
In accordance with the provisions of Sections 124 and 125 of the Act
and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules,
2016 ("IEPF Rules"), dividends of a company that remain unpaid or unclaimed for
a period of seven years from the date of transfer to the Unpaid Dividend Account shall be
transferred by such company to the Investor Education and Protection Fund
("IEPF").
In terms of the foregoing provisions of the Act, no dividend amount or
shares were required to be transferred to the IEPF by the Company during the year ended 3
1st March, 2023.
The Company has uploaded details of unpaid and unclaimed dividend
amounts lying with the Company as on 15th December, 2022, on the Company's website
https://www.end urancegroup.com/investor-relation/ unclaimed-unpaid-dividends.
The following table provides dates on which unclaimed dividend would
become due to be transferred to the IEPF:
Financial
Year |
Date of declaration of dividend/ interim
dividend |
Amount of unpaid dividend as on 31st
March, 2023 (in Rs) |
Due date for transfer to IEPF |
2016-17 |
28*'July, 2017 |
47,632.50 |
31st August, 2024 |
2017-18 |
6th September, 201 8 |
41,592.00 |
1 1th October, 2025 |
2018-19 |
8th August, 2019 |
45,325.50 |
1 2th September, 2026 |
2019-20 |
3rd March, 2020 |
122,100.00 |
7th April, 2027 |
2020-21 |
25*1 August, 2021 |
45,145.00 |
24th September, 2028 |
2022-23 |
24*1 August, 2022 |
53,236.00 |
23rd September, 2029 |
ACKNOWLEDGMENTS:
Your Directors take this opportunity to express their sincere
appreciation for the commitment, hard work and support of all its employees and workmen
during the year.
The Directors also express their gratitude to the shareholders, workmen
unions, customers, vendors, dealers, bankers, government authorities of India and other
countries where the Company operates and all other business associates for their continued
support extended to the Company and for reposing their confidence in the management. The
management looks forward to their continued support in future.
|
For and on behalf of the Board |
|
Soumendra Basu |
|
Chairman |
Date: 17th May, 2023 |
DIN 01125409 |
|