DIRECTORS' REPORT INTRODUCTION: The Directors present their forty-first (41st) Annual Report and Audited Financial Statements for the year ended March 31, 2016, prepared in due compliance of extant provisions of the Companies Act, 2013 and Schedule III thereto. REVIEW OF OPERATIONS: Business activities of the company, during the year under review, continued to be restricted to the manufacture of die casting, jigs and fixtures, primarily meant for the automobile industry and management of investments of surplus funds of the company. During the year under review, sales on account of manufacture of die casting dies, jigs and fixtures, increased to Rs. 892.96 lakhs as compared to Rs. 687.83 lakhs achieved during the previous year. This increase was on account of the concerted efforts made for a smooth flow of work orders, aided by enhanced productivity and better quality. During the year under review, the turnover of the company went up from Rs. 6986.19 lakhs to Rs. 11714.99 lakhs, mainly on account of certain additional dividend received by way of interim dividend. CLASSIFICATION AS A CORE INVESTMENT COMPANY: Considering the fact that the company fulfills the criteria for being qualified as a Core Investment company, exempted from registration with RBI pursuant to Section 45-IA of the RBI Act, 1934, RBI has confirmed the classification of the Company as such. Such classification of the company by RBI, however has no significant impact on the operations / finances of the company. RECOMMENDATION ON DIVIDEND: At the board meeting of the company held on March 15, 2016, the Directors had recommended an interim dividend of Rs. 30 per share (300%) on 11,428,568 equity shares of Rs. 10 each for the financial year 2015-16 (same as last year), which was paid on March 30, 2016 to all eligible shareholders as on March 23, 2016, being the record date fixed for the purpose. The Directors have not recommended any additional dividend and the interim dividend already paid is being proposed to be declared as the final dividend for the financial year 2015-16. The amount of dividend inclusive of tax thereon for the financial year 2015-16 amounts to Rs. 4,126.55 lakhs, same as paid during the financial year 2014-15. SHARE CAPITAL: The paid up Equity Share Capital as on March 31, 2016 was Rs. 11.42 Crore. During the year under review, there was no public issue, rights issue, bonus issue or preference share issue, nor had the Company issued shares with differential voting rights or granted stock options or sweat equity. PRESENTATION OF FINANCIAL STATEMENTS: The financial statements for the year ended March 31, 2016 are prepared in due compliance of the Schedule III of the Companies Act, 2013. CASH FLOW STATEMENT: A Cash Flow Statement for the year 2015-16 is included in the annexed Statement of Accounts. EXTRACT OF ANNUAL RETURN: Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 and Rules framed thereunder, an extract of Annual Return as on March 31, 2016 in the prescribed Form No. MGT-9 is annexed to this Report (Annexure-I). NUMBER OF MEETINGS OF THE BOARD: There were five (5) meetings of the board held during the year. Detailed information is given in the annexed Corporate Governance Report. DIRECTORS' RESPONSIBILITY STATEMENT: As required pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, state that - (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure; (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 at the end of the financial year and of the profit and loss of the company for that period; (c) that the Directors have 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. DETAILS IN RESPECT OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS: During the year under review, no offence involving fraud committed against the company by officers or employees of the company was reported by the Auditors to the Audit Committee or the Board pursuant to Section 143(12) of the Companies Act, 2013. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS: All the Independent Directors have submitted declarations to the company to the effect that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013. DIRECTORS' APPOINTMENT AND REMUNERATION POLICY: Information regarding Directors' Remuneration Policy and criteria for determining the qualification, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Companies Act, 2013 are contained in the Corporate Governance Report. The Policy is also available on the website of Company i.e. www.mahascooters.com PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS: The company has not given any loans or guarantees or provided any security. Full particulars of the investments made by the company are provided in the Financial Statements attached to this Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: During the year under review, the Company had not entered into any transactions with the related parties which invoked the provisions of Section 188 of the Companies Act, 2013, thereby necessitating its approval by the Board or prior approval of the Shareholders. There being no such contract with related parties which are 'material' in nature, there are no details to be disclosed in Form AOC - 2, under the Companies Act, 2013. During the year under review, pursuant to the provisions of Section 177 of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations, all Related Party Transactions were placed before the Audit Committee for its prior / omnibus approval. The Policy on Related Party Transactions as approved by the board is uploaded on the Company's website: www.mahascooters.com ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS: Pursuant to provisions of the Companies Act, 2013 and Regulation 25(4) of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Committees. The manner in which formal annual evaluation was made is provided in the annexed Corporate Governance Report DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR RESIGNED DURING THE YEAR: a) Western Maharashtra Development Corporation Limited, one of the two Promoters of the Company, withdrew the nomination of Shri N.K. Poyam as its Nominee Director on the board of the company and appointed Shri Vikram Kumar, IAS, in his place. b) Ms. Vrushali Agashe, one of the Independent Directors of the company, resigned during the year, owing to personal reasons. On the recommendations of Nomination and Remuneration Committee, the board at its meeting held on February 2, 2016, appointed Mrs. Charu Desai as an Independent Director / Woman Director, for a period of 5 years, effective February 2, 2016, subject to the approval of the Shareholders at the ensuing Annual General Meeting. c) The Board records its sincere appreciation for the valuable contribution made by Shri N.K. Poyam and Ms. Vrushali Agashe during their tenure on the Board. MATERIAL ORDERS, IF ANY, PASSED BY THE REGULATORS, COURTS ETC.,: No material Orders were passed by any Regulators or Courts or Tribunals during the financial year under review impacting the going concern status of the company's operations in future. DETAILS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: The Company has documented its Internal Financial Controls considering the essential components of various critical processes, physical and operational, and which includes its design, implementation and maintenance along with periodical internal review of operational effectiveness and sustenance. This ensures orderly and efficient conduct of its business, including adherence to company's policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The internal financial controls with reference to the financial statements were adequate and operating effectively. RISK MANAGEMENT POLICY: The company has adopted a Risk Management Framework for the company, including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company. MATERIAL CHANGES AND COMMITMENTS: 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 of the company and the date of this report. CORPORATE GOVERNANCE: In terms of Regulation 34 of Listing Regulations, a Report on Corporate Governance together with the Auditors Certificate thereon, Management Discussion and Analysis Report and CSR Report forms integral part of Corporate Governance Report. SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013, the company had appointed Shri Shyamprasad D. Limaye a Fellow Member of the Institute of Company Secretaries of India and a Company Secretary in Practice (FCS No.1587, Certificate of Practice No.572) to conduct the secretarial audit and give a Secretarial Audit Report for the year 2015-16 to be annexed to the Report of Board of Directors. Secretarial Audit Report of Shri Shyamprasad D. Limaye in the prescribed Form MR-3 is annexed to this Report (Annexure-II). The Report does not contain any qualification, reservation, disclaimer or adverse remarks. SECRETARIAL STANDARDS OF ICSI: The company is in compliance of Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India. INTERNAL AUDIT: Shri Jayesh A. Kulkarni, a Chartered Accountant acted as Internal Auditor of the company. The internal financial controls established with the approval of Audit Committee of the Board are adequate with reference to the financial statements and size and operations of the company. STATUTORY AUDITORS: At the 39th Annual General Meeting of the company, the Shareholders had approved the appointment of M/s. P.C. Parmar & Co., Chartered Accountants as Statutory Auditors for a period until the conclusion of 42nd Annual General Meeting, subject to ratification of the appointment by the members at every Annual General Meeting and accordingly, the Notice convening the 41st Annual General Meeting contains a proposal for ratification of their appointment along with their remuneration by the members for the year 2016-17. AUDITORS' REPORT: The Statutory Audit Report does not contain any qualification, reservation or adverse remark or disclaimer made by Statutory Auditor. COST AUDIT / AUDITORS: Pursuant to the provisions of Section 148 of the Companies Act, 2013 and Companies (Cost Records and Audit) Rules, 2014, the company was not required to get its cost records audited by a Cost Auditor. INDUSTRIAL RELATIONS: During the year under review, the industrial relations remained cordial. The wage agreement entered into with the company's Union elapsed on March 31, 2016 and negotiations with the Union for an amicable wage settlement are in progress. ESTABLISHMENT OF VIGIL MECHANISM: Pursuant to the provisions of Section 177(9) of the Companies Act, 2013 and Rules framed thereunder, the company has established a vigil mechanism for directors and employees to report genuine concerns and to provide for adequate safeguards against victimizations of persons who use such mechanism and the details thereof are disclosed on the website of the company www.mahascooters.com DETAILS OF DIRECTORS AND EMPLOYEES REMUNERATION: The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors and employees of the Company are placed on the Company's website www.mahascooters.com as an annexure to the Directors' Report. A physical copy of the same will be made available to any shareholder on request. During the year under review, none of the employees of the company was in receipt of remuneration of more than Rs. 60 lakhs per year or Rs. 5 lakhs per month, referred to in Section 197(12) of the Companies Act, 2013 and Rule 5(2) and (3) of the Rules aforesaid. CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORTING: Annual Report on CSR pursuant to Rule 8 of Companies (CSR) Rules, 2014 is annexed to this Report (Annexure-III). On behalf of the Board of Directors Madhur Bajaj Chairman Pune, May 23, 2016 |