Management’s Communique

The automotive industry will be the frontliner, tackling disruptions head-on, as well as the torch bearer, leading this change.

Dear Stakeholders,

The COVID-19 pandemic continues to present huge challenges. These are anxious times that present numerous challenges which have made their mind up against growth, yet despite all the downsides, humanity continues to impress with its grit, vigour, and more so, with compassion. There may have been doubts on whether humans can work in a unison, but evidently, keeping all our differences aside, we, the people of the world, came together and accomplished impossible feats during such unprecedented times. Vaccines were developed for a disease no one had heard of, within 6 months. This in itself truly shows the power of unity. The obstacle may have been greater, but our keen efforts to move forward has been remarkable.

We, at Lumax, are confident that with resilience and grit, we will overcome every obstacle. As a brand that is built on the premise of togetherness, we were yet again reminded of just how closely-knit our Lumax family really is.

In FY 2020-21, as businesses dropped globally, we had two core goals:

Sustaining the growth momentum, while also protecting our people. It gives us immense pleasure to inform you that we met a resounding success at both.

About workforce health, we were quick to take sweeping measures nationwide, setting up our own quarantine centers in just a few weeks. In spite of temporary production shutdowns, the Company managed to record commendable performance in FY 2020-21 too. Though COVID-19 tried its best and the lockdowns affected public movements, the Company had been a step ahead with its 7-decade-old multilocation footprint, assisting us to reach our customers despite the limitations.

Lumax is indebted to its associates for their untiring work, as well as for their willingness to shoulder considerable responsibility. The agreements needed for this were finalised in constructive dialogue with the employee representatives. We are also humbled by the generous loyalties our customers and suppliers have displayed, as well as our shareholders and supervisory board members, whose guidance and unwavering support led us through these tough times.

As the global economy rebounds from the COVID-19, the path to resumption is not unmarked by obstacles. Challenges with a mass vaccination exercise continue to weigh on activity within India as well as globally. The COVID- 19-induced lockdown in the first half of the year resulted in 23% lower output, consumption, and deeply impacted GDP in the first quarter. The fiscal stimulus provided by the Center and the RBI provided some relief, and was aided by phased unlocking in from September.

The Indian economy recorded a V-Shaped recovery and showed optimistic signs of revival. The vaccination initiative taken by the Government brought confidence in the economy. However, the second wave of COVID-19 forced the Government to impose lockdown in major states and cities, leading to cramping of financial momentum resulting in repeated economic slowdown by the end of the fourth quarter.

Lumax had already taken massive procedural shifts during the last year to accommodate the new normal. Our collective efforts ensured business continuity and achievement of innovative milestones. Going forth, it is our togetherness that will lead to success.

The world, as we know it, won’t be the same after the pandemic is dealt with. Even currently, we are experiencing paradigm shifts that are both economic and social, fuelled by continuing digitalisation, climate change, and compounded by the impact of the Coronavirus pandemic. These enormous challenges can only be met by venturing off the beaten path and pursuing approaches marked by creativity and responsibility. With innovations sparked by inspiration, based on technological excellence, and characterised by reliability, we are shaping the future of business, society, and technology. The Automotive Industry will be the frontliner, tackling disruptions head-on, and emerging as a torchbearer of change.

The Automotive market has a crucial role in the Indian economy, and while the Indian Automotive Industry faced many recent challenges, including COVID-19 pandemic, experts say its growth potential is huge and clear.

Financial Snapshot

The FY 2020-21 has been a challenging year for every industry. However, the Automotive Industry, true to its reputation, doesn’t get knocked out easily. The pandemic had its day, but since the onset of the third quarter, the automotive demand has shown tremendous resilience, post facing the worst-ever downturn witnessed in the last two decades. While the first quarter saw a complete washout of sales as the pandemic peaked, the second quarter saw a V-Shaped recovery for the Company. The first half proved to be challenging from the cashflow perspective, the Company achieved commendable record performance in FY 2020-21 too. Our healthy relations with our clients and vendors helped us stay afloat during this time. With the gradual resumption of activities and pent-up demand across segments, we recorded very good sales for the next two quarters, that is before, of course, the second wave of pandemic hit us. We credit this success to our amazing workforce, who never resisted challenges and tirelessly worked towards the Company’s vision.

Operational Snapshot

Characterised by difficult challenges and unforeseen events, the year held testimony to our effective leadership, which kept motivating our workforce while constantly engaging with them. We learnt a new way of operating, ‘working from home’ - enabled by our digitally sourced platform.

On the operational front, our expansion into Printed Circuit Board (PCB) business is intact and the greenfield site at Bawal, Harayana will be commissioned soon. Our focus on continually innovating new products remained unfazed, while moving with the industry trends. We expanded our product portfolio in electronics and started a JV extension with our ageold partner and Japan’s automotive pioneer, Stanley. Going forward, we are optimistic that Automotive Industry has a bright future ahead, with a sure increase in per capita consumption.

As an employer, we see the future as a fastpaced world of innovation, passion, and the courage to embrace change. People are the key to future success, and this is why, our talented people are the very essence of the Lumax future story.

With our EHS strategy for sustainable products, we consider opportunities and risks throughout our products’ life cycles. We are stepping up to the challenge of climate change with new building technology concepts.

The key importance of environmental protection for our future success is also reflected in our target vision for sustainability: five of the six issues – energy, climate, water, urbanisation, and health – are directly related to the protection of our livelihoods and the conservation of natural resources. We have been working to reduce our ecological footprint for many years. Our environmental management ensures that we consistently pursue the goals we set ourselves. These efforts are coordinated by the EHS (Environment, Health, and Safety) and Sustainability corporate sector.

Though FY 2020-21 was a watershed year for all of us, it also showed how collaboration and sharper strategies can work miracles. While 2020 tested our capabilities and endurance, 2021 is setting the stage for a new era of growth and sustainability. We thank you all for your commitment and support and invite you to partner towards an inclusive growth for all our stakeholders.