About
ZF Commercial Vehicle Control System India Ltd
ZF Commercial Vehicle Control Systems India Limited (Formerly known as Wabco India Limited) is a part of the Commercial Vehicle Solutions (CVS) division of the ZF Group. The Company designs, manufactures and markets conventional braking products, advanced braking systems, and other related air assisted products and systems. It operates five manufacturing facilities across India, an advanced technology development center, a vehicle testing facility near Chennai and a nation-wide aftermarket distribution and services network.
ZF Commercial Vehicle Control Systems India Limited was originally incorporated on November 18, 2004 as a Public Limited Company with the name 'Auto (India) Engineering Limited'. Thereafter, name of the Company was changed to Wabco India Limited on August 2, 2011. Effective from 7 March 2022, name of the Company was again changed from Wabco India Limited to ZF Commercial Vehicle Control Systems India Limited. The Company is primarily engaged in manufacture of air brake actuation systems for commercial vehicles. Apart from this, it is engaged in rendering of software development and other services as well.
The Company's Erstwhile ultimate holding company (Wabco Holding Inc.,) has signed a definitive agreement with ZF Friedrichshafen (the acquirer) for merger of Wabco Holding Inc., with a wholly owned subsidiary of the acquirer. Pursuant to completion of aforesaid acquisition of the Company & parent company by ZF Friedrichshafen AG, the Company is now a subsidiary of ZF Friedrichshafen AG.
During the year 2007-08, the company commenced operations in their new manufacturing facility in a Special Economic Zone (SEZ) at 'Mahindra World City' near Chennai. In March 2008, the company entered into the scheme with Sundaram Clayton Ltd in which the company took over the Brakes Business of Sundaram Clayton Ltd with effect from the appointed date January 1, 2007.
In June 3, 2009, WABCO Holdings Inc, USA a global technology leader and tier-one supplier to the commercial vehicle industry, raised their ownership position through indirectly owned subsidiary Clayton Dewandre Holdings Ltd, Rotterdam to 75%, which acquired 67,95,684 equity shares from the Indian promoters, namely TVS group, constituting 35.83% of the paid up capital of the company. Thus, the company became the subsidiary of Clayton Dewandre Holdings Ltd.
During the year 2009-10, the company obtained 'Super Platinum' award, for their manufacturing excellence from Frost & Sullivan. In February 2010, the company agreed to an agreement with Mahindra Navistar Automotives Ltd for development and long term supply of air compressor technology, products for braking systems and clutch servo technology with series production starting in 2010.
During 2011, Company changed its name from Wabco-TVS (India) Ltd. to WABCO India Ltd. In 2012, the company inaugurated its new manufacturing facility at Pantnagar, Uttarkhand. The company also inaugurated its plant 2 at SEZ, Mahindra worldcity, Chennai.
During 2015, the company received various awards like, Daimler India's Innovations Award for the year 2014-15, Tata Motors Supplier of the year award for the year 2014-15, Ashok Leylands Best in class performance in Quality award for the year 2014-15, Volvo Eicher Overall cost excellence award for 2015.
On 1 April 2016, WABCO India informed the stock exchanges that the company has entered into an agreement which is on arms-length basis with M/s WABCO Europe BVBA, a related party, for payment of royalty at the rate of 4% on the net sales for using licensed intangibles and technical knowhow.
On 28th March 2019, WABCO Holdings Inc., US the ultimate parent company of WABCO India Ltd., had announced that it has entered
into a definitive merger agreement with ZF Friedrichshafen AG (ZF), a privately held global leader in driveline and chassis technologies.
Under this agreement, ZF had acquired all outstanding shares of WABCO Holdings Inc., US for $136.50 per share in an all-cash transaction for an equity value of over $7 billion, which concluded in May, 2020. This transaction brought together two global
technology leaders with highly complementary and innovative technology offerings. The said transaction, resulted in the indirect acquisition by ZF of WABCO Asia Private Limited, an indirect subsidiary of WABCO Holdings LLP, US and holds 75% of the voting share capital of WABCO India Ltd. Accordingly, upon completion of said transaction, ZF became entitled to, through WABCO Asia. Post conclusion of transaction, an open offer was made to shareholders in August 2020 for acquisition of up to 4,741,900 fully paid-up equity shares of face value of Rs 5/- each of WABCO India Limited, representing 25% of the total voting equity capital of WABCO India Limited, comprising fully of public shareholders was given by ZF Friedrichshafen AG. Pursuant to the open offer, ZF International UK had acquired 18.11% of the shares from public shareholders taking consolidated promoter shareholding to 93.11%. To comply with the listing regulations of minimum public shareholding of 25%, ZF International, UK had in March 2021 sold 12.68% shares through offer for sale to the public shareholders. As on date, the consolidated promoter shareholding stands at 80.43%. Post acquisition by ZF, the WABCO Group has become ZF CVCS division and operates as a seperate division until integration.
On 28th March 2019, WABCO Holdings Inc., US the ultimate parent company of WABCO India Ltd., had announced to the New York
stock exchange that it has entered into a definitive merger agreement with ZF Friedrichshafen AG (ZF), a privately held global leader in driveline and chassis technologies, which resulted in an indirect acquisition by ZF from WABCO USA of 1,42,25,684 equity shares of the Company, constituting 75% of its total voting share capital, making ZF as the Promoter of the Company in the place of WABCO USA. This indirect acquisition mandated ZF to make an Open Offer to the Company's public shareholders, and acquired upto 47,41,900 fully paid up equity shares of Rs.5/- each, constituting 25% of the voting share capital of the Company. Accordingly, ZF, along with entities acting in concert with them (PAC), made the Open Offer at an offer price of Rs. 7,067.51 per Equity Share, which opened on 13th
August 2020 and closed on 26th August 2020. In response to Open Offer, 34,34,775 equity shares of Company were tendered by public shareholders and were acquired by ZF International UK Limited, a PAC (ZF UK), which constituted 18.11% of total voting share capital of the Company and consequently, Promoters' shareholding in the Company increased to 1,76,60,459 equity shares constituting to 93.11%.
In 2023, the Company introduced numerous products through the aftermarket channel including air suspension with ECAS technology, tandem master cylinder, and clutch master cylinders. It increased the market share for Diesel Exhaust Fluid (DEF).
During the year 2022-23, new business lines were set up for Inversion Relay Valves, Trailer Control Valves, Integrated Pedal Units, and Graduated Hand Control Valves creating additional manufacturing capacities including a special focus on realizing self-reliant plants. Manufacturing capacities were scaled up for the export of Twin Cylinder Compressors and Air Supply Units to Europe and actuators for the domestic market to capitalize on growth opportunities. New products such as electric compressors, air supply units, vacuum pumps, electronic braking systems, actuators, and push-type connectors were launched to international and Indian OEMs. E-compressors were launched for EVs pioneering transformation towards next generation mobility technologies. Significant gains in productivity & quality were realized through new process technologies such as fully automated crankshaft & flange machining cells and vision-based PDI systems combined with traceability implementation.
ZF CV Control Systems Manufacturing India Private Limited was incorporated with effect from 5th January 2022 as a wholly owned subsidiary (WoS) of the Company in 2022-23.
ZF Commercial Vehicle Control System India Ltd
Company History
ZF Commercial Vehicle Control Systems India Limited (Formerly known as Wabco India Limited) is a part of the Commercial Vehicle Solutions (CVS) division of the ZF Group. The Company designs, manufactures and markets conventional braking products, advanced braking systems, and other related air assisted products and systems. It operates five manufacturing facilities across India, an advanced technology development center, a vehicle testing facility near Chennai and a nation-wide aftermarket distribution and services network.
ZF Commercial Vehicle Control Systems India Limited was originally incorporated on November 18, 2004 as a Public Limited Company with the name 'Auto (India) Engineering Limited'. Thereafter, name of the Company was changed to Wabco India Limited on August 2, 2011. Effective from 7 March 2022, name of the Company was again changed from Wabco India Limited to ZF Commercial Vehicle Control Systems India Limited. The Company is primarily engaged in manufacture of air brake actuation systems for commercial vehicles. Apart from this, it is engaged in rendering of software development and other services as well.
The Company's Erstwhile ultimate holding company (Wabco Holding Inc.,) has signed a definitive agreement with ZF Friedrichshafen (the acquirer) for merger of Wabco Holding Inc., with a wholly owned subsidiary of the acquirer. Pursuant to completion of aforesaid acquisition of the Company & parent company by ZF Friedrichshafen AG, the Company is now a subsidiary of ZF Friedrichshafen AG.
During the year 2007-08, the company commenced operations in their new manufacturing facility in a Special Economic Zone (SEZ) at 'Mahindra World City' near Chennai. In March 2008, the company entered into the scheme with Sundaram Clayton Ltd in which the company took over the Brakes Business of Sundaram Clayton Ltd with effect from the appointed date January 1, 2007.
In June 3, 2009, WABCO Holdings Inc, USA a global technology leader and tier-one supplier to the commercial vehicle industry, raised their ownership position through indirectly owned subsidiary Clayton Dewandre Holdings Ltd, Rotterdam to 75%, which acquired 67,95,684 equity shares from the Indian promoters, namely TVS group, constituting 35.83% of the paid up capital of the company. Thus, the company became the subsidiary of Clayton Dewandre Holdings Ltd.
During the year 2009-10, the company obtained 'Super Platinum' award, for their manufacturing excellence from Frost & Sullivan. In February 2010, the company agreed to an agreement with Mahindra Navistar Automotives Ltd for development and long term supply of air compressor technology, products for braking systems and clutch servo technology with series production starting in 2010.
During 2011, Company changed its name from Wabco-TVS (India) Ltd. to WABCO India Ltd. In 2012, the company inaugurated its new manufacturing facility at Pantnagar, Uttarkhand. The company also inaugurated its plant 2 at SEZ, Mahindra worldcity, Chennai.
During 2015, the company received various awards like, Daimler India's Innovations Award for the year 2014-15, Tata Motors Supplier of the year award for the year 2014-15, Ashok Leylands Best in class performance in Quality award for the year 2014-15, Volvo Eicher Overall cost excellence award for 2015.
On 1 April 2016, WABCO India informed the stock exchanges that the company has entered into an agreement which is on arms-length basis with M/s WABCO Europe BVBA, a related party, for payment of royalty at the rate of 4% on the net sales for using licensed intangibles and technical knowhow.
On 28th March 2019, WABCO Holdings Inc., US the ultimate parent company of WABCO India Ltd., had announced that it has entered
into a definitive merger agreement with ZF Friedrichshafen AG (ZF), a privately held global leader in driveline and chassis technologies.
Under this agreement, ZF had acquired all outstanding shares of WABCO Holdings Inc., US for $136.50 per share in an all-cash transaction for an equity value of over $7 billion, which concluded in May, 2020. This transaction brought together two global
technology leaders with highly complementary and innovative technology offerings. The said transaction, resulted in the indirect acquisition by ZF of WABCO Asia Private Limited, an indirect subsidiary of WABCO Holdings LLP, US and holds 75% of the voting share capital of WABCO India Ltd. Accordingly, upon completion of said transaction, ZF became entitled to, through WABCO Asia. Post conclusion of transaction, an open offer was made to shareholders in August 2020 for acquisition of up to 4,741,900 fully paid-up equity shares of face value of Rs 5/- each of WABCO India Limited, representing 25% of the total voting equity capital of WABCO India Limited, comprising fully of public shareholders was given by ZF Friedrichshafen AG. Pursuant to the open offer, ZF International UK had acquired 18.11% of the shares from public shareholders taking consolidated promoter shareholding to 93.11%. To comply with the listing regulations of minimum public shareholding of 25%, ZF International, UK had in March 2021 sold 12.68% shares through offer for sale to the public shareholders. As on date, the consolidated promoter shareholding stands at 80.43%. Post acquisition by ZF, the WABCO Group has become ZF CVCS division and operates as a seperate division until integration.
On 28th March 2019, WABCO Holdings Inc., US the ultimate parent company of WABCO India Ltd., had announced to the New York
stock exchange that it has entered into a definitive merger agreement with ZF Friedrichshafen AG (ZF), a privately held global leader in driveline and chassis technologies, which resulted in an indirect acquisition by ZF from WABCO USA of 1,42,25,684 equity shares of the Company, constituting 75% of its total voting share capital, making ZF as the Promoter of the Company in the place of WABCO USA. This indirect acquisition mandated ZF to make an Open Offer to the Company's public shareholders, and acquired upto 47,41,900 fully paid up equity shares of Rs.5/- each, constituting 25% of the voting share capital of the Company. Accordingly, ZF, along with entities acting in concert with them (PAC), made the Open Offer at an offer price of Rs. 7,067.51 per Equity Share, which opened on 13th
August 2020 and closed on 26th August 2020. In response to Open Offer, 34,34,775 equity shares of Company were tendered by public shareholders and were acquired by ZF International UK Limited, a PAC (ZF UK), which constituted 18.11% of total voting share capital of the Company and consequently, Promoters' shareholding in the Company increased to 1,76,60,459 equity shares constituting to 93.11%.
In 2023, the Company introduced numerous products through the aftermarket channel including air suspension with ECAS technology, tandem master cylinder, and clutch master cylinders. It increased the market share for Diesel Exhaust Fluid (DEF).
During the year 2022-23, new business lines were set up for Inversion Relay Valves, Trailer Control Valves, Integrated Pedal Units, and Graduated Hand Control Valves creating additional manufacturing capacities including a special focus on realizing self-reliant plants. Manufacturing capacities were scaled up for the export of Twin Cylinder Compressors and Air Supply Units to Europe and actuators for the domestic market to capitalize on growth opportunities. New products such as electric compressors, air supply units, vacuum pumps, electronic braking systems, actuators, and push-type connectors were launched to international and Indian OEMs. E-compressors were launched for EVs pioneering transformation towards next generation mobility technologies. Significant gains in productivity & quality were realized through new process technologies such as fully automated crankshaft & flange machining cells and vision-based PDI systems combined with traceability implementation.
ZF CV Control Systems Manufacturing India Private Limited was incorporated with effect from 5th January 2022 as a wholly owned subsidiary (WoS) of the Company in 2022-23.
ZF Commercial Vehicle Control System India Ltd
Directors Reports
The Directors have pleasure in presenting the 19th Annual Report of ZF
Commercial Vehicle Control Systems India Limited (‘the Company') along with the
audited financial statements for the financial year ended 31st March 2023.
1. FINANCIAL HIGHLIGHTS
Rs in lakhs
|
Stand alone |
Consol idated |
| Particulars |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
Year ended 31.03.2023** |
Year ended 31.03.2022* |
| Revenue from Operations |
344,458.60 |
254,335.39 |
344,424.53 |
254,335.39 |
| Other Income |
6,701.31 |
3,752.92 |
6,698.21 |
3,752.92 |
| Total Income |
351,159.91 |
258,088.31 |
351,122.74 |
258,088.31 |
| Profit before interest depreciation and tax |
53,731.74 |
29,007.64 |
53,733.88 |
29,007.64 |
| Finance Costs |
566.54 |
190.18 |
566.54 |
190.18 |
| Depreciation |
10,476.38 |
9,243.17 |
10,477.68 |
9,243.17 |
| Profit before tax Provision for taxation |
42,688.82 |
19,574.29 |
42,689.66 |
19,574.29 |
| (including deferred tax and tax relating to earlier years) |
10,921.48 |
5,366.85 |
10,922.48 |
5,366.85 |
| Profit after tax Other Comprehensive |
31,767.34 |
14,207.44 |
31,767.18 |
14,207.44 |
| Income / (Loss) for the year net of tax Total Comprehensive Income for the year |
12.69 |
(353.58) |
12.69 |
(353.58) |
| Net of Tax |
31,780.03 |
13,853.86 |
31,779.87 |
13,853.86 |
* Consolidation of financials for FY 2021-22 was considered for 3 months since
incorporation of Wholly owned subsidiary Company (ZF CV Control Systems Manufacturing
India Private Limited) w.e.f. 5th January 2022.
** Consolidation of financials for FY 2022-23 is considered for 15 months, as first
financial year is ending on 31st March 2023 for the Wholly owned subsidiary
Company (ZF CV Control Systems Manufacturing India Private Limited).
2. DIVIDEND
The Board of Directors has recommended a dividend of Rs 13/- per share for the year
ended 31st March 2023 and dividend payout ratio of 7.76%, absorbing a sum of Rs
2,465.79/- lakhs, for approval of the shareholders at the ensuing annual general Meeting.
Transfer of Unclaimed Dividend to IEPF:
Dividends that are unclaimed/unpaid for a period of seven years are required to be
transferred to the Investor Education and Protection Fund (“IEPF”) administered
by the Central Government, as per Companies Act 2013. An amount of Rs 3,56,680/- (Rupees
Three Lakhs Fifty-Six Thousand Six Hundred and Eighty only) being unclaimed Final dividend
of the Company for the financial year ended 31st March, 2015 was transferred in
September, 2022 to IEPF.
3. PERFORMANCE
During the year 2022-23, the Company achieved highest ever total income of Rs 3,512
crores as against Rs 2,581 crores in the previous year. The profit before tax was Rs427
crores as against
Rs 196 crores in the previous year and the Profit after tax was Rs 318 crores as
against Rs 142 crores in the previous year. There has been no change in the nature of
business of the Company during the financial year ended 31st March 2023.
4. CAPITAL EXPENDITURE
Capital expenditure of Rs 88.88 Crores was incurred during the year 2022-23 as against
the revised estimate of Rs 121 Crores. Capital Expenditure of Rs 278 Crores is planned for
the year 2023-24.
5. DIRECTORS
Mr. Alexander De Bock has resigned from the Board with effect from the close of
business hours on 30th March 2023 due to his resignation from the ZF Group. The
Board expressed its deep sense of appreciation for Mr. Alex's leadership and acknowledges
his immense efforts and contributions towards his financial expertise and business
decisions.
Retirement by rotation
Mr. Philippe Colpron, Non-executive and non-independent director, whose office is
liable to retire at the ensuing AGM, being eligible, offer himself, for reappointment at
the 19th AGM of the Company scheduled to be held on 27th July 2023.
The composition of the Board is in compliance with the Companies Act, 2013 (“the
Act”) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (“Listing regulations”) - three independent directors, two non-executive
non-independent directors and an executive director as on date.
Independent Directors:
In terms of Section 149 of the Act and SEBI Listing Regulations, Mr. M Lakshminarayan,
Dr. Lakshmi Venu and Mr. Mahesh Chhabria are the Independent Directors of the Company as
on date of this report.
All Independent Directors of the Company have given requisite declarations under
Section 149(7) of the Act, that they meet the criteria of independence as laid down under
Section 149(6) of the Act along with Rules framed thereunder, Regulation 16(1)(b) of SEBI
Listing Regulations and have complied with the Code of Conduct of the Company as
applicable to the Board of Directors and Senior Management. In terms of Regulation 25(8)
of the SEBI Listing Regulations, the Independent Directors have confirmed that they are
not aware of any circumstance or situation, which exists or may be reasonably anticipated,
that could impair or impact their ability to discharge their duties with an objective
independent judgement and without any external influence. The Company has received
confirmation from all the Independent Directors about their registration on the
Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in
terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014.
In the opinion of the Board, the Independent Directors possess the requisite expertise
and experience and are persons of high
integrity and repute. They fulfill the conditions specified in the Act as well as the
Rules made thereunder and are independent of the management.
6. AUDITORS
M/s. B S R & Co. LLP, Chartered Accountants, holding firm Registration No 101248W /
W-100022 have been appointed as statutory auditors of the Company by the shareholders for
a term of five consecutive years from the conclusion of 15th Annual General
Meeting up to the conclusion of the 20th Annual General Meeting as per the
Section 139 of the Companies Act, 2013.
The Consolidated remuneration paid to Auditors / affiliated firms / entities for Audit
and services rendered in other capacities is provided in the notes to the standalone
financial statements.
The Auditors' report for the financial year 2022-23 does not contain any qualification,
reservation or adverse remark or disclaimer and the same is attached with the annual
financial statements.
7. SECRETARIAL AUDITOR
M/s. S Krishnamurthy & Co., Company Secretaries have carried out Secretarial Audit
under the provisions of Section 204 of the Act, for the financial year 2022-23 and
submitted their report, which is annexed to this report. The report does not contain any
qualification, reservation or adverse remark or disclaimer.
8. COST AUDITOR
As specified by the Central Government under Section 148(1) of the Companies Act, 2013,
the cost records are required to be maintained by the Company and accordingly such
accounts and records are being maintained. The Board of Directors of the Company upon
recommendation made by the audit committee has re-appointed M/s A. N Raman &
Associates, Cost Accountants, as Cost Auditor of the Company for the financial year ending
31st March 2024 and has recommended his remuneration to the shareholders for
their ratification at the ensuing Annual General Meeting.
The cost audit report for the year 2021-22 has been filed with the Ministry of
Corporate Affairs in the prescribed form within due date. The cost audit report for the
year 2022-23 will also be filed within the stipulated time.
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial
Auditor have not reported any instances of frauds committed in the Company by its Officers
or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013.
9. KEY MANAGERIAL PERSONNEL
In terms of Section 203 of the Companies Act, 2013 read with the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, the Key Managerial Personnel of the
Company for the FY 2022-23 are:
Mr. P Kaniappan - Managing Director
Mr. R S Rajagopal Sastry - Chief Financial Officer
Ms. Muthulakshmi M - Company Secretary
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS During the year under review,
the Company has not provided any Loan nor Guarantee nor security to any person or other
body
corporate under Section 186 of the Act.
The Company had invested a sum of ^ 175 Lakhs as paid-up share capital (1,750,000
equity shares of Rs 10 each) in Enerparc Solar Power 3 Private Limited on 21st
March 2023 as part of Captive Power Purchase.
11. WHOLLY OWNED SUBSIDIARY
ZF CV Control Systems Manufacturing India Private Limited was incorporated with effect
from 5th January 2022 as a wholly owned subsidiary (WoS) of the Company, to
Manufacture, buying, selling and trading in auto ancillary parts for domestic and export
markets (Commercial Vehicle (CV) Control Systems).
The Share capital of the WoS is Rs 100 Lakhs and it has commenced its commercial
production with effect from 03rd March 2023. The Revenue from Operations of WoS
was at Rs 62.98 Lakhs for the financial year ended 31st March 2023 and the
Profit after Tax for the year ended 31st March 2023 was at Rs 1.60 Lakhs. The
Board of WoS has not recommended any dividend as it has just kick started its operations.
Statement containing salient features of the financial statement of Subsidiary is given in
Annexure 4 and forms part of this Report.
12. ANNUAL EVALUATION OF THE BOARD'S PERFORMANCE
The Board adopted a formal mechanism for evaluating its performance and as well as that
of its Committees and Directors, including the Chairman of the Board as per the
requirements as specified in the guidance note issued by the Securities Exchange Board of
India (SEBI) and the provisions of the Companies Act, 2013. The performance evaluation
exercise was carried out through a structured evaluation process (by circulation of
detailed evaluation matrix to all the Directors and was reviewed & confirmed by each
Director) covering various aspects of the functioning of the Board and Committees such as
their composition, experience & competencies, performance of specific duties &
obligations, governance issues etc.
NRC reviewed the performance of individual Directors on the basis of criteria as
specified in the Guidance note and in a separate meeting of independent directors,
performance of Non-Independent Directors and the Board as a whole was evaluated. The above
evaluations were then discussed in the Board meeting and performance evaluation of
Independent directors was done by the entire Board, excluding the Independent Director
being evaluated and the Board was satisfied with their performances, which reflected the
overall engagement of the Board, Committees and the directors with the Company.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair and
transparent manner by adopting the highest standards of professionalism, honesty,
integrity and ethical behaviour. In line with the ZF Code of Conduct (‘CoC'), any
actual or potential violation, howsoever insignificant or perceived as such, would be a
matter of serious concern for the Company. The role of the employees in pointing out such
violations of the CoC cannot be undermined. Hence, the Company has established a vigil
mechanism through “ZF
Commercial Vehicle Control Systems India Limited Whistle Blower Policy” to enable
employees, trainees, directors and Vendors of the Company, to report genuine concerns,
unethical behavior, actual or suspected fraud, violation of Company's Insider Trading
Code, any unlawful act or violation of the Company's Code of Conduct. The mechanism
provides for adequate safeguards against victimization of the whistle blower and also
provides for direct access to the Chairman of the audit committee.
There were no whistle blower complaints received by the Company during the year.
14. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORTING
SEBI has mandated that the Business Responsibility and Sustainability Reporting (BRSR)
shall be applicable to the top 1,000 listed entities (by market cap) for reporting on a
mandatory basis from FY 2022-23. For the FY 2021-22, the company had published BRSR report
voluntarily.
The Company is in 218th Position (BSE) as per the market cap as on 31st
March 2023 and hence as per the SEBI Regulations, the Company has prepared the BRSR for
the year ended March 31, 2023 as per the prescribed format which forms part of the annual
report.
Mr. P Kaniappan, Managing Director of the Company is responsible for the implementation
and oversight of the Policies relating to various principles of BRSR and to take forward
the ESG initiatives.
15. STATUTORY STATEMENTS
15.1 Conservation of energy, Research & Development Expenses and foreign exchange
earnings and outgo
Information regarding conservation of energy, research & development expenses and
foreign exchange earnings and outgo is given in Annexure 1 to this report, as per the
requirements of Section 134(3)(m) of the Act.
During the financial year 2022-23, the Company had incurred a capital expenditure of ^
244.48 lakhs towards installation of roof top solar panels at MWC Plant w.r.t. renewable
energy commitments. Total of 55 energy reduction projects implemented during the year
which yielded energy savings of 11.62 Lakhs units and cost savings of ^ 110.39 Lakhs per
annum.
15.2 Corporate Social Responsibility
As required under Section 134(3)(o) of the Act, details about policy developed and
implemented by the Company on Corporate Social Responsibility initiatives taken during the
year ended 31st March 2023 are given in Annexure 2 to this report.
15.3 Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Act, it is hereby confirmed that;
a. I n the preparation of the annual accounts, the applicable accounting standards have
been followed and there are no material departures.
b. The directors had 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 as at 31st March 2023 and of the profit of
the Company for the year ended on that date;
c. That directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d. The directors had prepared the annual accounts on a going concern basis;
e. The directors had laid down internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were operating
effectively; and
f. The directors had devised proper systems to ensure compliance with the provisions of
all applicable laws and that such systems were adequate and operating effectively
16. DISCLOSURES UNDER COMPANIES ACT, 2013
16.1 Extract of the Annual Return:
In accordance with the Companies Act, 2013, the annual return in the prescribed format
is available at
https://www.zf.com/mobile/en/company/investor_relations/zf_cvjndiajnvestor_relations/zf_cvjndiajr.html
16.2 Number of Board Meetings:
The Board of Directors met six times during the year 2022-23. The details of the Board
meetings and the attendance of the Directors is provided in the Corporate Governance
Report.
16.3 Committees of Board of Directors:
Details of memberships and attendance of various committee meetings are given in
Corporate Governance Report. The Board has accepted / considered all recommendations made
by the Committees to the Board during the financial year.
16.4 Related Party Transactions:
All related party transactions that were entered into during the financial year were on
an arm's length basis and were in the ordinary course of business. There are no related
party transactions made by the company with promoters, Directors, Key Managerial Personnel
or other designated persons which may have a potential conflict with the interest of the
Company at large.
Approval of shareholders through postal ballot was obtained for the material related
party transactions entered for the year ended 31st March 2023 between the
Company and M/S. ZF CV Systems Global GmbH & ZF CV Systems Europe BV, fellow
subsidiaries of the Company, on 15.01.2022 and the actual transactions for the year ended
31st March 2023 with these two entities was enclosed as Annexure - 5 to this
report.
Also, prior approval of shareholders for the proposed material related party
transactions for the financial year 2023-24 between the Company and M/s. ZF CV Systems
Global GmbH & M/s. ZF CV Systems North America LLC, fellow subsidiaries of the
company, were obtained through postal ballot on 12.03.2023.
The Company pays royalty to M/s ZF CV Systems Europe BV, a fellow subsidiary and
related party at the rate of 4% per annum
on the net sales (Total sales (less) inter-company sales (less) intercompany purchases)
effective 1st January 2016 for the intellectual property, knowhow and processes
supplied by ZF CV Systems Europe BV. M/s ZF CV Systems Europe BV charges Royalty to all
its associated entities in line with the global practices and transfer pricing norms.
For the FY 2022-23, royalty of ^ 87.37 crores was paid to M/s ZF CV Systems Europe BV
which amounts to 3.39 % of the total turnover for the financial year 2021-22.
All transactions with related parties are placed before the audit committee and prior
approval of the audit committee is obtained. The Company has developed a Related Party
Transactions Policy for the purpose of identification and monitoring of such transactions.
Details of material Related Party Transactions entered by the company as required under
Section 134(3)(h) of the Act and the Listing regulation are given in Annexure 5 to this
report.
17. POLICIES
The following policies approved by the Board of Directors of the Company were uploaded
and are available in the Company's website at the web link:
https://www.zf.com/mobile/en/company/investor_relations/zf_cvjndia
investor_relations/zf_cvjndiajr.html
17.1.1 Code of Business conduct and ethics by the Board Members & Senior Management
17.1.2 Corporate Social Responsibility Policy
17.1.3 Related Party Transaction Policy
17.1.4 Nomination and Remuneration Policy
17.1.5 Whistle Blower Policy
17.1.6 Policy for Prohibition of Insider Trading
17.1.7 Policy on Criteria for Determining Materiality of Events
17.1.8 Dividend Distribution Policy
17.1.9 Corporate Governance Policy
17.1.10 Policy on Familiarisation of Independent Directors and Other Programs
17.1.11 Material subsidiary policy
17.2 Company's policy on directors' appointment and remuneration including criteria
determining for qualification, positive attributes, independence of a director and other
matters provided under Section 178(3) of the Act is provided in the Corporate Governance
Report.
18. PARTICULARS OF DISCLOSURES AS REQUIRED UNDER SECTION 197 OF THE COMPANIES ACT, 2013
18.1 The ratio of the remuneration of each director to the median remuneration of the
employees for the financial year and such other details as required are as given below:
| Name |
Ratio |
| Mr. P. Kaniappan, Managing Director |
45.98:1 |
| Mr. M. Lakshminarayan, Independent Director |
2.65:1 |
| Mr. Mahesh Chhabria, Independent Director |
2.98:1 |
| Dr. Lakshmi Venu, Independent Director |
2.09:1 |
Directors other than those mentioned above have not drawn any remuneration including
Sitting Fees & Commission, for the financial year 2022-23.
18.2 The percentage increase in remuneration of each Director, Managing Director, Chief
Financial Officer and Company Secretary in the financial year are as follows:
| Mr. M. Lakshminarayan, Independent Director |
42.86 |
| Mr. Mahesh Chhabria, Independent Director |
17.18 |
| Dr. Lakshmi Venu, Independent Director |
20.72 |
| Mr. P. Kaniappan, Managing Director |
9.85 |
| Mr. R.S Rajagopal Sastry, Chief Financial Officer |
11.55 |
| Ms. M. Muthulakshmi, Company Secretary |
16.08 |
18.3 The percentage increase in the median remuneration of employees in the financial
year: 10%
18.4 The number of permanent employees on the rolls of company as on 31st
March 2023: 2181.
18.5 Average percentage increase already made in the salaries of employees other than
the managerial personnel in the last financial year: 10.25% Percentage increase in the
managerial remuneration in the last financial year: 22.65%. There are no exceptional
circumstances for increase in the managerial remuneration. With respect to the Managerial
Personnel, variable component is paid in the form of incentive, as per the remuneration
policy of the Company and based on the financial and non-financial parameters and based on
their individual performance and the performance of the Company. The Board at its meeting
dated 24th May 2023, approved the commission to be paid to nonexecutive
independent directors as Rs 30 Lakhs to Mr. M. Lakshminarayan, Rs 35 Lakhs to Mr. Mahesh
Chhabria and Rs 25 Lakhs to Dr. Lakshmi Venu respectively.
18.6 The key parameters for any variable component of remuneration availed by the
directors: Independent directors have been paid sitting fees for attending meetings of the
Board and Committees and paid a profit related commission, but not exceeding 1% of the net
profit of the Company for the financial year. No sitting fee and commission is paid to
non-executive and non-independent Directors of the Company. However, variable component is
paid in the form of incentive, as per the Remuneration Policy of the Company and based on
the financial and non-financial parameters, to Mr. P. Kaniappan, Managing Director.
18.7 The remuneration of Directors and employees are as per the remuneration policy of
the Company.
18.8 The statement of particulars of employees as per Section 197 of the Companies Act,
2013, read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014, for the year ended 31st March 2023, is given in
Annexure 6 and forms part of this Report.
19. CORPORATE GOVERNANCE
The Company has complied with the provisions of the Listing Regulations concerning
corporate governance and a report to this effect is attached, as required by Under
Schedule V of the Listing Regulation. The certificate issued by the auditors of the
Company regarding compliance with the corporate governance requirements is also annexed to
this report. The Managing Director (CEO) and the Chief Financial Officer (CFO) of the
Company have certified to the board on financial statements and other matters in
accordance with Regulation 17(8) of the Listing Regulations pertaining to CEO / CFO
certification for the financial year ended 31st March 2023. Further, applicable
Secretarial Standards have been complied with. The management discussion and analysis
report, as required by the Listing Regulation and various disclosures required under the
Act is also attached and forms part of this report.
20. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has a structured familiarization program for independent Directors of the
Company which also extends to other Non-Executive Directors to ensure that Directors are
familiarized with their function, role, rights, responsibilities and the nature of the
company Business viz., automotive component industry and ZF global business model, etc.
The Board of Directors has complete access to the information within the Company.
Presentations are made to the Board of Directors at all the Meetings and all Committees of
the Board on various matters, where Directors get an opportunity to interact with Senior
Management. Presentations, inter alia, cover the Company's strategy, business model,
operations, markets, organization structure, product offerings, finance, risk management
framework, quarterly and annual results, human resources, technology, quality and such
other areas as may arise from time to time.
The Company also issues appointment letters to the Independent Directors which also
incorporates their role, duties and responsibilities. Further, regulatory updates on
regulatory changes are also periodically placed before the Board. The details of
familiarisation programme have been hosted in the web site of the Company under the
weblink
https://www.zf.com/mobile/en/company/investor_relations/zf_cvjndiajnvestor_relations/zf_cvjndiajr.html
21. OTHER PARTICULARS
• The Company has not accepted any deposits from the public within the meaning of
Sections 76 of the Companies Act, 2013 for the year ended 31st March 2023.
• There are no significant and material orders passed by regulators or courts or
tribunals, which would impact the going concern status of the Company and its future
operations.
• The Company does not have any associate or joint venture during the financial
year 2022-23, apart from one wholly owned subsidiary.
• The Company has not raised any funds during the year.
• The Company has not taken any loan during the year and neither there are any
outstanding loans as on 31st March 2023. Hence there were no instances of any
one time settlement nor any valuation done in this regard.
• The Company neither filed an application during the year under review nor there
are any proceedings pending against the Company under the Insolvency and Bankruptcy Code,
2016 as at March 31,2023.
• The Company has not transferred any amount to general reserves during the year
ended 31st March 2023.
• There are no material changes and commitments, affecting the financial position
of the company which have occurred between the end of the financial year 31st
March 2023 and at the date of this report.
• DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013 - The Company has adopted the AntiSexual Harassment
Policy in line with the requirements of the Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. In compliance with the provisions
under Section 4 of the Sexual Harassment of Women at the Workplace (Prevention,
Prohibition & Redressal) Act, 2013, Internal Complaints Committee (ICC) of the Company
has been constituted to redress complaints regarding sexual harassment. No complaint was
received during the year 2022-23.
Acknowledgement
The directors thank the vehicle manufacturers, distributors, vendors and bankers for
their continued support and assistance. The directors gratefully acknowledge the support
rendered by ZF Friedrichshafen AG. The directors wish to place on record their
appreciation of the excellent work done by employees of the Company at all levels during
the year. The directors specially thank the shareholders for the confidence reposed by
them in the Company.
|
For and on behalf of the board |
|
M. LAKSHMINARAYAN |
| Chennai |
Chairman |
| 24th May 2023 |
DIN: 00064750 |
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