Menon Pistons Ltd Directors Report.
The Members of Menon Pistons Limited
The Directors take pleasure in presenting the 42 Annual Report together with the audited financial statements for the year ended 31st March 2019. The Management Discussion and Analysis Report have also been incorporated into this report.
Directors have tried to maintain coherence in disclosures and flow of the information by clubbing required information topic-wise and thus certain information which is required in Directors Report is clubbed elsewhere and has to be read as a part of Directors Report.
1. FINANCIAL HIGHLIGHTS:
( Rs. in Lakhs )
|Current Year||Previous Year|
|Revenue from Operations (Net)||15610.12||14972.01|
|Profit before Depreciation & Amortisation Expenses, Finance|
|Cost and Tax|
|Less: Depreciation & Amortisation Expenses||483.11||440.86|
|Profit Before Tax||1403.90||1185.10|
|Less: Tax Expenses||396.30||482.60|
|Profit After Tax||1007.60||702.50|
|Other Comprehensive Income||(14.67)||(16.85)|
|Total Comprehensive income||992.93||685.65|
|Balance of profit /loss for earlier years||4780.54||4401.80|
|Less: Transferred to General Reserve||(100.00)||-|
|Less: Dividend on Equity Shares||(306.00)||(255.00)|
|Less: Dividend Distribution Tax||(62.90)||(51.91)|
|Balance Carried Forward||5304.57||4780.54|
STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK:
The Company has recorded another steady year of growth, despite performing in a highly competitive environment. The Companys endeavour is to leverage its technology to meet the needs of the market and strengthen its position in its area of business.
In spite of adverse market conditions, the Company had achieved Rs.156.10 Crores turnover as compared to Rs.149.72 Crores in the previous financial year. The Company is taking steps to perform better by overcoming the adverse market condition.
CHANGE IN NATURE OF BUSINESS, IF ANY:
During the year there was no change in the nature of business of the Company.
TRANSFER TO RESERVES:
The Board of Director of your Company proposes to transfer an amount of Rs. 100 Lakhs to General Reserve. The total balance in General Reserve account as on 31st March, 2019 is Rs. 1098.89 Lakhs.
Your Directors have recommended a final dividend of Re. 0.75 /- (Paise Seventy Five only) per equity share of Re. 1/- each (i.e. 75 %). The total outgo amounts to Rs.3,82,50,000/- (Rupees Three Crores Eighty Two Lakh Fifty Thousand only) and dividend distribution tax of Rs.78,62,400/- (Rupees Seventy Eight Lakh Sixty Two Thousand Four Hundred only).
SHARE CAPITAL OF THE COMPANY:
The paid up equity share capital as on 31st March 2019 was Rs. 510 Lakhs. During the year there was no public issue, rights issue, bonus issue or preferential issue, etc. The Company has not issued shares with differential voting rights, sweat equity shares, nor has it granted any stock options.
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company has no Subsidiary/Joint Ventures/Associate Companies. The Company also does not have any holding Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
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 to which the financial statements relate and the date of this report. The Company has proposed a final dividend which as per the provisions of Schedule III has not been included in the part of the Balance Sheet but forms part of the Notes to accounts.
The following table provides information of the credit rating of Menon Pistons Limited from "CARE" ratings agency.
|Facilities||Amount (In Crores)||Rating|
|Cash Credit facilities - Fund Based||18||CARE BBB+ (Stable)|
|Packing Credit facilities - Fund Based||02||CARE A2|
|Bank Guarantee facilities - Non Fund Based||01||CARE BBB+ (Stable)|
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company has made the necessary disclosures in this Report in terms of Section 134 (3) of the Companies Act, 2013 read with Rules 8 of the Companies (Accounts) Rules, 2014. The Company has always strived to optimize energy consumption. Details of the same are provided in Annexure - 1.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All related party transactions which were entered into during the financial year were on an arms length basis and in the ordinary course of business. All Related Party Transactions are placed before the Audit Committee for their approval and to the Board, as and when required.
The policy on Related Party Transactions as approved by the Board of Directors is uploaded on the Companys website, i.e. www.menonpistons.com. Pursuant to the provisions of Section - 134 (3) (h) of the Companies Act, 2013 the particulars of contracts or arrangements with related parties referred to in Section 188 (1) of the Companies Act, 2013 and prescribed in Form AOC-2 of the Companies (Accounts) Rules, 2014, are appended as
Annexure - 2 to this report. Related Party Transactions during the year have been disclosed as a part of Financial Statements as required under Indian Accounting Standards issued by the Institute of Chartered Accountants of India. The approval of the members is sought by way of an ordinary resolution for the further related party transactions which are at Arms Length and Ordinary Course of business at the forthcoming Annual General meeting as per provisions of Section 188 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a) Appointment / Re-appointement
As recommended by Nomination and Remuneration Committee, Mr. Ajitkumar Belur (DIN:00205336) and Mr. Subhash Kutte (DIN: 00233322) have been appointed as an Additional (Independent) Director 1st of the Company w.e.f. 01 April, 2019 and 10 May, 2019 respectively, subject to approval of members of the Company. The approval of members by way of special resolution is also sought for the continuation of Mr. Ajitkumar Belur as an Independent Director (Non-Executive) as per the provisions of Regulation 17 (1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and also because he completed his first term as an Independent Director of the Company on 31 March 2019 as per the Companies Act 2013 and has been appointed as an Additional (Independent) Director of the Company for a term of five consecutive years with effect from 1 April, 2019. Further Mr. Ramesh Dattatraya Dixit (DIN: 00626827) who retires by rotation at ensuing Annual General Meeting and being eligible offers himself for re-appointment.
The Company has informed to Dr. Shivram Bhoje (DIN: 03352809) vide letter dated 20 March, 2019, about the completion of his tenure as an Independent Director of the Company w.e.f. 31 March, 2019. The Company has also received an acknowledgement of the same from Dr. Shivram Bhoje effective as on date. The Board places on record their appreciation for contributions made by Dr. Shivram Bhoje during his tenure.
c) Committees of the Board:
The Board of Directors have constituted committees in order to effectively cater its duties towards diversified role under "the Act" and Listing Agreement with the Stock Exchanges and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). Details of the constitution, terms of references of each committee and number of meetings attended by individual director etc. are provided in the Corporate Governance Report.
d) Policy on Directors Appointment and Remuneration:
The Policy of the Company on Directors Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of the directors and other matters provided under Section 178 (3) of the Act and Listing Regulations adopted by the Board and details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. We affirm that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
e) Board Performance Evaluation Mechanism:
Pursuant to the provisions of "the Act" and Listing Regulations, the Board has carried out the annual performance evaluation. Details of the evaluation mechanism are provided in the Corporate
Governance Report. A meeting of Independent Directors was held on 16 October 2018 for evaluation of Board performance.
f) Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Listing Regulations.
g) Key Managerial Personnel:
The Key Managerial Personnel of the Company as per Section 2(51) and 203 of the Act are as follows:
|Mr. Sachin Menon||Chairman & Managing Director|
|Mr. S B P Kulkarni||CFO & Associate Vice President|
|Mr. Pramod Suryavanshi||Company Secretary & Compliance Officer|
NUMBER OF MEETINGS OF THE BOARD:
A calendar of meetings is prepared and circulated in advance to the Directors. During the year Four (4) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under "the Act", Secretarial Standards issued by the Institute of Company Secretaries of India and Listing Regulations.
PARTICULARS OF LOAN, GUARANTEES, INVESTMENTS:
Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer notes 2 and 8 of the standalone financial statements)
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
As per Regulation 34 (2) (e) of Listing Regulations, the Management Discussion and Analysis Report and the Corporate Governance Report is appended as a part of Annual Report. The Company has obtained a Certificate from the Statutory Auditors confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V (E) of Listing Regulations and the same forms part of this Annual Report.
EXTRACT OF THE ANNUAL RETURN:
Extract of the Annual Return as prescribed under Section 92 (3) of the Companies Act, 2013 in the Form MGT-9 is appended as Annexure - 3 which forms part of this Report. Further the copy of annual return will be placed on the website of the company i.e. www.menonpistons.com under Investor Relations segment.
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on Severity, Likelihood and Effectiveness of current detection. Such risks are reviewed by the Risk Management Committee on a quarterly basis.
ADEQUACY OF INTERNAL FINANCIAL CONTROL:
The Board is responsible for establishing and maintaining adequate internal financial control as per Section
134 of the Act. The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Companys policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy which provides adequate safeguards against victimization of persons who may blow whistle. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit Committee. Whistle Blower Policy may be accessed on the Companys website at the link: www.menonpistons.com. We affirm that during the financial year 2018-19, no employee or director was denied access to the Audit Committee.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013:
The Company has constituted Internal Complaints Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, comprising of senior executives of the Company. During the year 2018-19 there was no complaint received before the committee.
CODE OF CONDUCT COMPLIANCE:
A declaration signed by the Managing Director affirming compliance with the Companys Code of Conduct by the Directors and Senior Management for the Financial Year 2018-19 as required by Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of 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) 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 31 March, 2019 and of the profit of the company for that period; c) 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; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors 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) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES:
The table containing the names and other particulars of employees in accordance with the provisions of Section 197 (12) of the Act, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure - 4 which forms part of this Report.
During the year Industrial relations at the Companys plants continue to be cordial. The Company has taken initiative for safety of employees and implemented regular safety, imparted machine safety training, wearing protective equipment etc.
a) STATUTORY AUDITORS:
The Statutory Auditors, M/s. P. G. Bhagwat, Chartered Accountants, Pune, (FRN-101118W) were appointed for the period of 5 consecutive years at the 40 Annual General Meeting of the Company. The Companies Act, 2013 was amended to remove the provisions related to ratification of the Auditors and therefore there is no requirement of ratification of Auditors of the Company.
No adverse remarks/ comments/observations are made by the Statutory Auditors in their report for the year ended 31st March, 2019, except some delay in transfer of Shares to IEPF authority as required under IEPF rules.
During the year under review, the Statutory Auditors had not reported any fraud under Section 143(12) of the Act, therefore no detail is to be disclosed as required under Section 134 (3)(ca) of the Act.
b) INTERNAL AUDITOR:
Mr. Abhay Golwalkar, Chartered Accountant, Kolhapur was appointed to conduct the internal audit of the Company for the financial year 2018-19, as required under Section 138 of the Act and the Companies (Accounts) Rules, 2014.
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board and also to the Managing Director. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Recommendations along with corrective actions thereon are presented to the Audit Committee of the Board and accordingly implementation has been carried out by the process owners.
c) SECRETARIAL AUDITORS:
M/s. DVD & Associates, Company Secretaries, Pune was appointed to conduct the Secretarial Audit of the Company for the Financial Year 2018-19, as required under Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 for Financial Year 2018-19 is appended which forms part of this Directors Report as Annexure - 5.
Annual Secretarial Compliance Report The Company has received the Annual Secretarial Compliance Report from M/s. DVD & Associates, Company Secretaries, Pune as per the provisions of Regulation 24 A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is appended which forms part of this Directors Report as Annexure - 6.
There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors in their report, except some delay in transfer of Shares to IEPF authority as required under IEPF rules.
d) COST AUDITORS:
Pursuant to Section 148 of the Act read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s. C S Adawadkar & Co., Cost Accountants, Pune to audit the cost accounts of the company for the financial year 2018-19 on a remuneration of Rs.1.50 Lakhs.
As required under the Act the remuneration payable to the cost auditor is required to be placed before the members at a general meeting for their determination. Accordingly, a resolution seeking members determination for the remuneration payable to M/s. C S Adawadkar & Co., Cost Accountants, Pune is included at Item No.4 of the notice convening the Annual General Meeting. The Cost Audit Report does not contain any qualification, reservation or adverse remark.
The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI). The Company has devised proper systems to ensure compliance with its provisions and is in compliance with the same.
CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
The Board of Directors of the Company has constituted the Corporate Social Responsibility Committee (CSR Committee), as per the requirement of the Section 135 of "the Act" read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The said Committee has formulated the CSR Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR activities. Additionally, the CSR Policy has been uploaded on the website of the Company at www.menonpistons.com. During the year 2018-19, the Company has contributed Rs.20,60,140/- towards Corporate Social Responsibility by way of contribution to eligible charitable institutions and Company has spent for promotion of education, promotion of traditional art and culture, poverty upliftment, encouragement of sports, medical facility to economically poor families. The details as per the provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 are annexed herewith as Annexure - 7.
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companys executives, staff and workers.
By Order of the Board
For Menon Pistons Limited
Sachin Menon Place : Kolhapur
Chairman & Managing Director Date : 10.05.2019 DIN: 00134488