Board's Report Your Directors feel great pleasure in presenting 25th Annual Report of the Company comprising the Audited Financial Statements for the year ended 31st March, 2016. REVIEW OF OPERATIONS During the year under review, the Company has registered a sale of Rs. 11,191.14 Lakhs (previous year Rs. 10,391.11 Lakhs) and Net Profit after Tax of Rs. 1,489.06 Lakhs (previous year Rs.1,154.49 Lakhs). The Company continues to operate in the business of manufacturing of "Auto Components" and there was no change in business activities. No material changes or commitments affecting the financial position of the Company occurred between end of the financial year and the date of this report. DIVIDEND: The Company's overall performance during the year under review was satisfactory. Based on the performance, your directors had the pleasure of declaring payment of an interim dividend of Rs.1.00 per Equity Share (Previous Year final dividend Rs.0.80 per Equity Share), being 100% of the paid-up Equity Share Capital of the Company for the Financial Year ended on 31st March, 2016.This absorbed total cash outflow of Rs.562.07 Lakhs (previous year Rs.437.09 Lakhs) including Corporate Dividend Distribution Tax of Rs.95.07 Lakhs (previous year Rs. 63.49 Lakhs). SHARE CAPITAL OF THE COMPANY: During the year under review, shares of the Company were sub-divided from face value of Rs. 5/- to Rs.1/- per Equity share w.e.f. 10th April, 2015. Consequently, issued, subscribed and paid up Equity share capital of the Company after sub- division of the face value of Equity shares is Rs.4,67,00,000/- (Rupees Four Crores Sixty Seven Lakhs only) divided into 4,67,00,000 ( Four Crores Sixty Seven Lakhs ) Equity shares of the face value of Rs. 1 (Rupee one) each. DIRECTORS AND KMP: In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Sachin Menon, Non-Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment and your Board recommends his re-appointment. The Board of Directors of the Company appointed Mr. M. L. Shinde as an Additional (Independent) Director of the Company for a period of five years w.e.f. 29th January, 2016, subject to approval of shareholders at the ensuing Annual General Meeting. The Company has received a notice along with requisite deposit from a member of the Company under Section 160 of Companies Act, 2013 proposing his candidature for the office of Director of the Company. Your Board recommends his appointment. The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and under Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As stipulated under the Regulation 36 (3) of the SEBI (Listing Obligations and Disclosure Requiraments) Regulations, 2015, brief resume of the Directors proposed to be appointed/re-appointed are given in the Notice convening 25thAnnual General Meeting. PUBLIC DEPOSITS: During the year under review, the Company has not accepted any deposits within the meaning of Section 73 and 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014. EXTRACT OF ANNUAL RETURN: An extract of Annual Return in Form MGT 9 is appended to this Report as Annexure I. MEETINGS OF THE BOARD: The Board meets at regular interval to discuss and decide on Company / business policy and strategy apart from other Board business. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board's approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. The notice of Board meeting is given well in advance to all the Directors of the Company. Usually, meetings of the Board are held in Kolhapur, Maharashtra. The agenda of the Board / Committee meetings is circulated 7 days prior to the date of the meeting. The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to take an informed decision. During the year the Board met five times, the details of which are given in the Report on Corporate Governance. The intervening gap between the two consecutive meetings was within the period prescribed under the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the provisions contained in Section 134(3) (c) of the Companies Act, 2013, the Board of Directors state that: a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; if any b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 31stMarch,2016 and of the profit of the Company for that period; c. they 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; d. they have prepared the annual accounts on a going concern basis; e. they have 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. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. REMUNERATION POLICY: Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI ( Listing Regulations and Disclosure Requirements ) Regulations, 2015 and on the recommendation of Nomination and Remuneration Committee, the Board has adopted policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Report on Corporate Governance . RISKS AND AREAS OF CONCERN: The Company has laid down a well defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. CORPORATE SOCIAL RESPONSIBILITY INITIATIVE: Pursuant to the provisions of Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, the Company has constituted Corporate Social Responsibility (CSR) Committee and framed a Policy on Corporate Social Responsibility. As part of its initiatives under CSR, the Company has identified various projects. These projects are in accordance with Schedule VII of the Companies Act, 2013. The details as per the provisions of Rule 8 of Companies (Corporate Social Responsibility) Rules, 2014 is annexed herewith as "Annexure II.". PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES: The particulars of contracts or arrangements with related parties referred to in Section 188 (1) of Companies Act, 2013, as prescribed in Form AOC - 2 of the Rule (8) of Companies (Accounts) Rules, 2014 is appended as "Annexure III." PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The details of loans, guarantees or investments made by the Company under the provisions Section 186 of the Companies Act, 2013 are provided in the Notes on of Financial Statements. ANNUAL PERFORMANCE EVALUATION BY THE BOARD: Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI ( Listing Regulations and Disclosure Requirements) Regulation , 2015, the performance evaluation of Independent Directors was done by the entire Board excluding the Director being evaluated and evaluation of the Board as a whole was done by Independent Directors. The evaluation framework for assessing the performance of Directors comprises of the following key areas: i. Attendance at Board Meetings and Committee Meetings; ii. Quality of contribution to Board deliberations; iii. Strategic perspectives or inputs regarding future growth of Company and its performance; iv. Providing perspectives and feedback going beyond information provided by the management. The manner in which the evaluation has been carried out has been explained in the Report on Corporate Governance . DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE: There was no order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on Company's operations in future. AUDIT COMMITTEE AND ITS COMPOSITION: The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process. As on 31st March, 2016, the Audit Committee comprised of Mr. M. L. Shinde, Mr. B. S. Ajitkumar, Capt. Sudheer S. Naphade, Independent Directors and Mr. R. D. Dixit, Vice Chairman and Managing Director of the Company. Mr. B. S. Ajitkumar was the Chairman of the Audit Committee of the Company upto 31st January, 2016. Mr. M.L. Shinde was appointed as Chairman of Audit Committee of the Company w.e.f. 1st February, 2016. Mr. Anup Padmai, Company Secretary and Compliance Officer of the Company, acts as the Secretary to the Audit Committee. WHISTLE BLOWER POLICY / VIGIL MECHANISM: The Company has adopted a Vigil Mechanism / Whistle Blower Policy as per the provisions of section 177 of Companies Act, 2013 and Regulation 22 of SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 to deal with instance of fraud and provides for adequate safeguards against victimization of directors or employees or any other person who avail the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The details of Vigil Mechanism Policy is explained in the Report on Corporate Governance and also posted on the website of the Company i.e. <http://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/55681f95e4b0f3550bf6e656/14328871> 89523/Whistle+Blower+Policy.pdf. We affirm that during the financial year 2015-16, no employee or director or any other person was denied access to the Audit Committee. SECRETARIAL AUDIT REPORT: Pursuant to the provisions of Section 204 of the Companies Act, 2013, read with Companies ( Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Secretarial Audit Report received from M/s. Manish Ghia & Associates, Company Secretaries, Mumbai is annexed as Annexure - IV and forms part of this report. As per the observation of the Secretarial Auditor, the vacancy caused by the resignation of an Independent Director was to be filled in by the Company on or before 16th July, 2015, however the same was filled by 29th January, 2016. The Company was trying to identify and appoint a suitable person on its Board, whose presence can benefit the Company in particular and the shareholders at large. Since, the Company is situated at remote place at Kolhapur, Maharashtra, it was difficult to identify the right person on the Board of the Company and hence there was delay in appointment of Independent Director. INTERNAL AUDIT: Pursuant to the provisions of Section 138 of the Companies Act, 2013, read with Companies ( Accounts) Rules, 2014, the Board on recommendation of the Audit Committee reappointed Mr. Abhay Golwalkar, Chartered Accountants, Kolhapur as an Internal Auditor of the Company. The Internal Auditor submits his reports on quarterly basis to the Audit Committee. Based on the report of internal audit, management undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. INTERNAL FINANCIAL CONTROL: The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company Policies, safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The Audit Committee evaluates the efficiency and adequacy of financial control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and strives to maintain the Standard in Internal Financial Control. REPORT ON CORPORATE GOVERNANCE : Pursuant to Regulations 34 & 53 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the following have been made a part of the Annual Report and are enclosed / annexed to this report: • Management Discussion and Analysis • Report on Corporate Governance • Declaration on Compliance with Code of Conduct • Auditors' Certificate regarding compliance of conditions of Corporate Governance COMMITTEES OF THE BOARD: During the year, in accordance with the Companies Act, 2013, the Board re-constituted one of its Committees. There are currently Five Committees of the Board, as follows: 1. Audit Committee 2. Stakeholders' Relationship Committee 3. Nomination and Remuneration Committee 4. Corporate Social Responsibility Committee 5. Internal Complaint Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, forming part of this Annual Report. PARTICULARS OF THE EMPLOYEES AND REMUNERATION: Pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1), Rule 5(2) and Rule (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, statement showing the details of remuneration paid in excess to the prescribed limits and details of the ratio of remuneration of each Director to the median employee's remuneration are appended to this Report as "Annexure V" and "Annexure VI" respectively. STATUTORY AUDITORS AND BRANCH AUDITORS: M/s. P. M. Vardhe & Co., Chartered Accountants, Kolhapur, (having FRN-111274W ) the Statutory Auditors of the Company hold office as such up to the conclusion of ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from them to the effect that they are willing to continue as Statutory Auditors and if re-appointed, their re-appointment would be within the limits prescribed under Section 139 of the Companies Act, 2013. The Board recommends the re-appointment of M/s. P. M. Vardhe & Co., Chartered Accountants, Kolhapur, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting upto the conclusion of next Annual General Meeting of the Company and to audit Financial Statements for the Financial Year 2016-17. The Company had appointed M/s. Rajesh Lohia & Co. Chartered Accountants, Kolhapur, (having FRN-108416W ) as Branch Auditors, to hold office from the conclusion of 23rd AGM until the conclusion of sixth consecutive AGM of the Company and to audit the Financial Statement of Menon Alkop (Division of the Company). However, such an appointment of Branch Auditors was subject to ratification at every AGM held after the 23rdAGM. Hence, the Board recommends for the ratification of appointment of M/s. Rajesh Lohia & Co, Chartered Accountant, Kolhapur, as Branch Auditor of the Company in the ensuing Annual General Meeting. No adverse remark/comments/observations are made by the Statutory Auditors in their report. COST AUDITORS: As per the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company has appointed M/s. Chandrashekhar S. Adawadkar, Cost Accountant, Pune ( having FRN-100401) as Cost Auditors of the Company to conduct audit of cost records for the Financial Year 2016-17, at a remuneration of S. 1,25,000/- (Rupees One Lac Twenty Five Thousand Only) plus service tax and out of pocket expenses, subject to approval of Shareholders in the ensuing Annual General Meeting. INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review no complaint was filed before the said Committee. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies ( Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo for the year under review is given as " Annexure VII". ACKNOWLEDGMENT: Your Directors wish to place on record their gratitude for the continued co-operation and patronage extended by the esteemed customers both in OEM and Replacement Market segments. The Directors would also like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance extended during the year under report by our bankers, customers, suppliers and Government agencies. The Board of Directors wishes to express its appreciation for the valuable contribution made by the employees at all levels during the year under report. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS RAM MENON Chairman Management Discussion and Analysis Place: Kolhapur Date :10th May, 2016 |