Your Directors have pleasure in presenting this 34th Annual Report together withAudited Accounts of the Company for the financial year ended 31st March 2019.
The financial performance of the Company for the year ended 31st March 2019 issummarised below:
| || ||(Rs. in Lacs) |
|Particulars ||Year ended 31-03-2019 ||Year ended 31-03-2018 |
|Gross Income ||124423.81 ||133110.68 |
|Profit before Dep. & Tax ||3311.95 ||10896.44 |
|Less : Depreciation ||864.00 ||759.18 |
|Less: Provision for Taxation including deferred tax ||866.95 ||1925.54 |
|Profit after tax ||1581.00 ||8211.72 |
|Add: Surplus from Previous year ||14541.04 ||6653.29 |
|Add: Other Comprehensive income ||85.00 ||- |
|Amount available for appropriation ||16207.04 ||14865.01 |
|Less Appropriations || || |
|Transfer to General Reserves ||250.00 ||250.00 |
|Dividend & tax thereon paid during the year ||73.97 ||73.97 |
|Closing Balance ||20582.23 ||14541.04 |
Your Company has reported total Income from Operations of Rs. 123997.27 Lacs in theCurrent Financial Year against total Income from Operations of Rs. 124883.51 Lacs in thePrevious Financial Year. The Company's profit before tax is Rs. 2447.95 Lacs as comparedto profit before tax of Rs. 10137.26 Lacs of previous year. The previous year's profitincludes a profit of Rs. 7864.97 Lacs on account of sale of land situated at Goa. Duringthe year 2018-19 your company sold 25698 Maruti Vehicles (including 325 Vehicles underDirect Billing) as compared with 26793 Maruti Vehicles (including 1235 Vehicles underDirect Billing) sold during the previous year.
Keeping in view the current economic scenario and the future fund requirements of theCompany your directors are pleased to recommend a final dividend of Rs. 1.00 per EquityShare of Rs. 10/- each for the year ended 31st March 2019 which if approved byshareholders at the forthcoming Annual General Meeting will be paid to those shareholderswhose names appear on the Register of Members as on book closure dates.
TRANSFER TO RESERVES
An amount of Rs. 2.50 Crores has been transferred to the reserves.
During the year your Company has received following Awards & Recognition by MarutiSuzuki India Limited:
1 Highest Sales in DGS & D in Delhi & NCR
2 NEXA - ALFA Dealer Award in Delhi / NCR
HIMACHAL PRADESH REGION
1 NEXA - ALFA Dealer Award in Himachal Pradesh
2 Best NEXA Showroom in Hamirpur
3 ARENA - Royal Platimum Awards in Himachal Pradesh
DIRECTORS AND KEY MANAGERIAL PERSONS
The Independent Directors have confirmed and declared that they are not disqualified toact as an Independent Director in compliance with the provisions of the Companies Act2013 and Securities Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred as the Listing Regulations). TheBoard is also of the opinion that the Independent Directors fulfills all the conditionsspecified in the Companies Act 2013 & Listing Regulations making them eligible to actas Independent Directors.
In terms of appointment of Mrs. Kavita Ahuja and as required under Companies Act2013 Mrs. Kavita Ahuja shall retire by rotation being longest in the office and beingeligible she offers herself for re-appointment. The Board recommends her re-appointment.On January 06 2019 there was sudden and sad demise of Mr. O. P. Tandon IndependanetDirector further Mr. S. L. Tandon has expressed his desire to retire from hisdirectorship after his tenure is completed in ensuing Annual General Meeting.
Mr. Raj Chopra Chairman & Managing Director and Mr. K. K. Mehta Whole-TimeDirector whose terms expires on August 31 2019 and August 22 2019 respectively seeks tobe re-appointed for another term of Five years in the ensuing Annual General Meeting.Also Term of existing Independent Directors namely Mr. Ramesh Chander Murada & Mr.Rohit Gogia expires in ensuing Annual General Meeting. The Nomination and RemunerationCommittee has approved and recommended all of above re-appointments. Also the Nominationand Remuneration Committee has shortlisted and recommended Mr. Raman Sehgal forappointment as Independent Director in place of Mr. S. L. Tandon who has expressed hisdesire to retire from the Directoship after his tenure is completed in ensuing AnnualGeneral Meeting.
The Boards recommends the above appointment and reappointments of Directors in theensuing Annual General Meeting. Brief resume of the Directors seeking appointment andre-appointment is given in Corporate Governance Report Annexed to this Report.
Apart from above there was no change in Key Managerial Personnel of the Company.
The Company has devised a Policy for performance evaluation of Independent DirectorsBoard Committees and other individual Directors which include criteria for performanceevaluation of the non-executive directors and executive directors. Based upon the Policyfor performance evaluation of Independent Directors Board Committees and otherindividual Directors a process of evaluation was followed by the Board for its ownperformance and that of its Committees and individual Directors.
CODE OF CONDUCT
All Directors Key Managerial Personnel and Senior Management of the Company haveconfirmed the Compliance with the Code of Conduct applicable to the Directors andemployees of the Company.
The Chairman and Managing Director have given a declaration that the members of theBoard of Directors and Senior Management Personnel have affirmed compliance with the Code.The Code of Conduct is available on the Company's website www.competent-maruti.com.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledges the responsibility for ensuring compliance withprovisions of the Companies Act 2013 and the Listing Regulations in the preparation ofthe annual accounts for the year ended on March 31 2019 and state that: a) in thepreparation of the annual accounts the applicable accounting standards have been followedand no material departures have been made from the same; b) The Directors have selectedsuch accounting policies and applied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company at the end of the financial year and of the profit for the year ended onthat period; c) The Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities. d) The Directors had prepared the annual accounts on a going concernbasis. e) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively. f) The Directors has devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.
Your Company reaffirms its commitment to good Corporate Governance practices. Pursuantto the Listing Regulations Corporate Governance Report and Auditors Certificate regardingcompliance of conditions of Corporate Governance are enclosed as Annexure A & Band forms an integral part of this report.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A report on Management Discussion and Analysis as required under the ListingRegulations is enclosed as Annexure C and forms an integral part of this report.
The Audit Committee comprises of Mr. R. C. Murada Chairman; Mr. Rohit Gogia and Mrs.Kavita Ahuja as members. All the recommendations made by the Audit Committee were acceptedby the Board.
CORPORATE SOCIAL RESPONSIBILITY
The CSR Committee comprises of Mr. R. C. Murada as Chairman and Mr. Rohit Gogia andMrs. Kavita Ahuja as members of the Committee. The CSR policy may be accessed on theCompany's website: www.competent-maruti.com and is enclosed as Annexure D and formsthe part of this Report of the Directors.
During the year the CSR has been implemented by the Company. The Company has madecontribution to HR Education & Charitable Foundaiton. The total contribution made tothe implementing agency is Rs. 4400000/- (Rupees Forty Four Lakhs only). Annual Reporton CSR is enclosed herewith as Annexure E.
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Regulations. Protected Disclosures by a whistle blower should beaddressed to the MD at the Registered Office of the Company.
The MD shall submit a report about all PD cases annually to the Audit Committee of theCompany. The Policy on vigil mechanism and whistle blower policy may be accessed on theCompany's website: www.competent-maruti.com.
NOMINATION AND REMUNERATION COMMITTEE
The Committee is comprised of Mr. R. C. Murada as Chairman and Mr. Rohit Gogia and Mr.S. L. Tandon as members of the Committee. The Policy of Nomination and Remuneration isavailable on Company's website www.competent-maruti.com and is enclosed as Annexure F.
STAKEHOLDERS' RELATIONSHIP COMMITTEE
The Stakeholders' Relationship Committee shall consider and resolve the grievances ofsecurity holders of the company.
MEETINGS OF THE BOARD
Twelve meetings of the Board of Directors were held during the year. For furtherdetails please refer report on Corporate Governance of this Annual Report.
PARTICULARS OF LOANS INVESTMENTS GUARANTEES AND SECURITIES
The Company has not given any loan nor made any investment to other body corporates orgiven any guarantees or provided any security in connection with a loan to any other bodycorporate or person during the year under review.
INVESTOR EDUCATION AND PROTECTION FUND
In compliance with provisions of Section 124 of Companies Act 2013 the Company hastransferred Rs. 79217/- to IEPF being unpaid and unclaimed dividend for the FY 2010-11.
LISTING FEE OF SHARES
Your Company's Equity Shares are listed with BSE Limited (BSE) and Listing Fee for thefinancial year 2019-20 has been paid in advance by the Company.
As per section 139 of the Companies Act 2013 read with Rules made thereunder theStatutory Auditors of the Company M/s Ambani & Associates LLP (FRN 016923N)Chartered Accountants New Delhi has been appointed for the five years period and subjectto the ratification by the members in every Annual Meeting. Consequent to Commencement ofthe Companies (Amendment) Act 2017 it is not necessary to place ratification of Auditorsto the members of the Company; therefore the Auditors are appointment for the period of 5yrs. without the ratification by the members.
The observations made by the Auditors in their Report are self-explanatory and do notcall for any further comments.
The Board has appointed M/s P. P. Agarwal & Co. Practicing Company SecretariesFirm to conduct Secretarial Audit for the financial year 2018-19. The Secretarial AuditReport for the financial year ended March 31 2019 is annexed herewith marked as AnnexureG to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
INFORMATION PURSUANT TO SECTION 134 OF THE COMPANIES ACT 2013
Your Company does not own any manufacturing facility it is therefore the requirementspertaining to disclosure of particulars relating to conservation of energy research &development and technology absorption as prescribed under Section 134(3)(m) of theCompanies Act 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2013 arenot applicable.
The foreign exchange earnings and expenditure of the Company during the year underreview were Nil and Rs. 12.11 Lacs respectively as compared to Rs. Nil and Rs. 10.40 lacsin the previous year respectively.
The prescribed particulars of employees required under section 197(12) of the CompaniesAct 2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is enclosed as Annexure H and forms the part of this Reportof the Directors.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is available at Company's websitewww.competent-maruti.com and is also enclosed herewith as Annexure I.
The Company has not accepted any deposit from Public and shareholders.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
There are no material changes and commitments affecting financial position of thecompany which have occurred between the end of the financial year of the company and dateof the report.
INTERNAL FINANCIAL CONTROLS & RISK MANAGEMENT
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
Further the Board has risk management plan in place and the board reviews the same oncontinuous basis.
DETAILS OF SUBSIDIARIES AND THEIR PERFORMANCE
The company has no subsidiary associate or joint venture company as defined underCompanies Act 2013.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website:www.competent-maruti.com Your Directors draw attention of the members to Note no. 41 a b& c to the financial statement which sets out related party disclosures.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Internal Complaint Committee in line with requirements ofThe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaint Committee has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year 2018-19.
- No. of complaints received : 0
- No. of complaints disposed : 0
The Board wishes to place on record its appreciation to the contribution made by theemployees of the Company during the year under review. Your Directors thank the customersclients vendors and other business associates for their continued support in theCompany's growth. The Directors also wish to thank the Government Authorities BanksFinancial Institutions and Shareholders for their cooperation and assistance extended tothe Company.
| ||For and on behalf of the Board |
| ||For Competent Automobiles Co. Limited |
| ||Raj Chopra |
|Place: New Delhi ||Chairman & Managing Director |
|Date: 31.07.2019 ||DIN 00036705 |
CORPORATE SOCIAL RESPONSIBILITY POLICY
Competent Automobiles Co. Ltd. (CACL) is committed to social development andempowerment. CACL views Corporate Social Responsibility as a way of conducting businesswhich enables creation and distribution of wealth for the betterment of local populaceits stakeholders and society at large through implementation and integration of ethicalsystems and sustainable management practices.
We appreciate the importance of working for the inclusive growth of the society.Through various socially relevant initiatives we strive to create a positive impact on thesociety. Efficient implementation of such interventions which involve different partnersfor various activities requires a robust process to maximize the intended impact.
Through CSR our focus shall be on addressing social environmental and economic needsof the marginalized/ underprivileged section of the society and creating Social Capital.
The key purpose of this policy is to:
Define what CSR means to us and the approach adopted to achieve our Good &Green goals
Define the kind of projects that will come under the ambit of CSR
Identify broad areas of intervention in which the company will undertakeprojects
Serve as a guiding document to help execute and monitor CSR projects
Elucidate criteria for partner implementation agencies
Explain the manner in which the surpluses from CSR projects will be treated
CACL will have a Board Level Sub-Committee hereinafter referred to as CSR Committeeconsisting of three or more Directors out of which at least one shall be an independentdirector.
The role/responsibilities of the CSR Committee include:
1. Formulate and recommend to the Board a Corporate Social Responsibility Policy whichshall indicate the activities to be undertaken by the company as specified in Schedule VIIof the Companies Act 2013.
2. Recommend the amount of budgeted expenditure to be incurred on the activitiesreferred to in clause (1) above.
3. Monitor the Corporate Social Responsibility Policy of the company from time to time
4. Institute a transparent monitoring mechanism for implementation of the CSRprojects/programs/activities
5. Monitor implementation of CSR activities on quarterly basis.
CSR Committee Members:
a) Mrs. Kavita Ahuja
b) Mr. R. C. Murada
c) Mr. Rohit Gogia
CSR Focus Area Projects/Programs/Activities:
CACL's CSR focus area is inspired by the vision of our Chairman Mr. Raj Chopra fordevelopment of various section of society.
a) Old Age Homes
b) Education of children women and weaker section of society
c) Health Care
d) Development of Sports
e) Any other activities as permissible under law as CSR activity
Apart from above the Company intends to contribute to various programs for ruraldevelopment scientific & Prime Minister Relief Fund.
In alignment with The Companies Act 2013 the Company shall earmark as CSR Budget atleast 2% of the average of net profits of the company made during the three immediatelypreceding financial years.
Treatment of Surpluses:
Any surplus generated from CSR projects undertaken by us will be tracked andchannelized into our CSR corpus. These funds will be further used in development of theCSR projects and will not be added to the normal business profits.
NOMINATION AND REMUNERATION POLICY
This policy on nomination and remuneration of Directors Key Managerial Personnel andSenior Management has been formulated by the Committee and approved by the Board ofDirectors.
Objectives of the Committee:
The Committee shall:
i) Formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of Directors key managerial personnel and other employees;
ii) Formulation of criteria for evaluation of Independent Director and the Board;
iii) Devising a policy on Board diversity;
iv) Identify persons who are qualified to become Director and persons who may beappointed in Key Managerial and Senior Management positions in accordance with thecriteria laid down in this policy;
v) Recommend to the Board appointment and removal of Director KMP and SeniorManagement Personnel.
Effective Date: The following policy has been formulated by the Nomination andRemuneration Committee and adopted by the Board of Directors at its meeting held on12.08.2014.This policy shall be operational with immediate effect.
"Board":-Board means Board of Directors of the Company.
"Director":-Directors means Directors of the Company.
"Committee":-Committee means Nomination and RemunerationCommittee of the Company asconstituted or reconstituted by the Board from time to time.
"Company":- Company means Competent Automobiles Co. Limited.
"Independent Director":- As provided under Listing Regulationsand/or under the Companies Act 2013 Independent director' shall mean anon-executive director other than a nominee director of the company:
a. who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience;
b. (i) who is or was not a promoter of the company or its holding subsidiary orassociate company;
(ii) who is not related to promoters or directors in the company its holdingsubsidiary or associate company;
c. apart from receiving director's remuneration has or had no pecuniary relationshipwith the company its holding subsidiary or associate company or their promoters ordirectors during the two immediately preceding financial years or during the currentfinancial year;
d. none of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two percent. or more of its gross turnover or total income or fifty lakhrupees or such higher amount as maybe prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year;
e. who neither himself nor any of his relatives
i. holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;
ii. is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of
a. a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or
b. any legal or a consulting firm that has or had any transaction with the company itsholding subsidiary or associate company amounting to ten per cent or more of the grossturnover of such firm;
iii. holds together with his relatives two per cent or more of the total voting powerof thecompany; or
iv. is a Chief Executive or director by whatever name called of any non-profitorganization that receives twenty-five per cent or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two percent or more of the total voting power of the company;
v. is a material supplier service provider or customer or a lessor or lessee of thecompany;
vi. who is not less than 21 years of age.
"Key Managerial Personnel":- Key Managerial Personnel (KMP) means-
(i) Managing Director or Chief Executive Officer or manager and in their absence awhole-time director;
(ii) Company Secretary; and
(iii) Chief Financial Officer
"Senior Management":- The expression seniormanagement'' means personnel of the company who are members of its core management teamexcluding Board of Directors comprising all members of management one level below theexecutive directors including the functional heads.
Unless the context otherwise requires words and expressions used in this policy andnot defined herein but defined in the Companies Act 2013 as may be amended from time totime shall have the meaning respectively assigned to them therein.
The Policy is applicable to
Directors (Executive and Non Executive)
Key Managerial Personnel
Senior Management Personnel
Constitution of the Nomination and Remuneration Committee:
The Board has the power to constitute/ reconstitute the Committee from time to time inorder tomake it consistent with the Company's policy and applicable statutory requirement.
General Appointment Criteria:
i) The Committee shall consider the ethical standards of integrity and probityqualification expertise and experience of the person for appointment as Director KMP orat Senior Management level and accordingly recommend to the Board his / her appointment.
ii) The Company should ensure that the person so appointed as Director/ IndependentDirector/ KMP/ Senior Management Personnel shall not be disqualified under the CompaniesAct 2013 rules made thereunder Listing Agreement or any other enactment for the timebeing in force.
iii) The Director/ Independent Director/ KMP/ Senior Management Personnel shall beappointed as per the procedure laid down under the provisions of the Companies Act 2013rules made thereunder Listing Agreement or any other enactment for the time being inforce.
Additional Criteria for Appointment of Independent Directors:
The Committee shall consider qualifications for Independent Directors as mentioned inherein earlierunder the head Definitions' and also their appointment shall begoverned as per the provisions of the Listing Regulations (as amended from time to time )and Companies Act 2013.
Term / Tenure:
The Term / Tenure of the Directors shall be governed as per provisions of the CompaniesAct 2013 and rules made thereunder as amended from time to time.
Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations or any otherreasonable groundthe Committee may recommend to the Board for removal of a Director KMPor Senior Management Personnel subject to the provisions and compliance of the said Actrules and regulations.
Criteria for Evaluation of Independent Director and the Board:
Following are the Criteria for evaluation of performance of Independent Directors andthe Board:
1. Executive Directors:
The Executive Directors shall be evaluated on the basis of targets / Criteria given toExecutive Directors by the board from time to time
2. Non - Executive Director:
The Non - Executive Directors shall be evaluated on the basis of the following criteriai.e.whether they:
a) act objectively and constructively while exercising their duties;
b) exercise their responsibilities in a bona fide manner in the interest of thecompany;
c) devote sufficient time and attention to their professional obligations for informedand balanced decision making;
d) do not abuse their position to the detriment of the company or its shareholders orfor the purpose of gaining direct or indirect personal advantage or advantage for anyassociated person;
e) refrain from any action that would lead to loss of his independence
f) inform the Board immediately when they lose their independence
g) assist the company in implementing the best corporate governance practices.
h) strive to attend all meetings of the Board of Directors and the Committees;
i) participate constructively and actively in the committees of the Board in whichtheyare chairpersons or members;
j) strive to attend the general meetings of the company;
k) keep themselves well informed about the company and the external environment inwhich it operates;
l) do not to unfairly obstruct the functioning of an otherwise proper Board orcommittee of the Board;
m) moderate and arbitrate in the interest of the company as a whole in situations ofconflict between management and shareholder's interest.
n) abide by Company's Memorandum and Articles of Association company's policiesandprocedures including code of conduct insider trading guidelines etc.
Policy on Board diversity:
The Board of Directors shall have the optimum combination of Directors from thedifferent areas /fields like production Management Quality Assurance Finance Sales andMarketing Supply chain Research and Development Human Resources etc. or as may beconsidered appropriate.
The Board shall have atleast one Board member who has accounting or related financialmanagement expertise and atleast three members who are financially literate.
The Committee will recommend the remuneration to be paid to the Managing DirectorWhole-time Director KMP and Senior Management Personnel to the Board for their approval.
The level and composition of remuneration so determined by the Committee shall bereasonable and sufficient to attract retain and motivate directors Key ManagerialPersonnel and Senior Management of the quality required to run the company successfully.The relationship of remuneration to performance should be clear and meet appropriateperformance benchmarks. The remuneration should also involve a balance between fixed andincentive pay reflecting short and long-term performance objectives appropriate to theworking of the company and its goals:
1. Director/ Managing Director
Besides the above Criteria the Remuneration/ compensation/ commission etc to be paidto Director/ Managing Director etc. shall be governed as per provisions of the CompaniesAct 2013 and rules made thereunder or any other enactment for the time being in force.
2. Non-executive Independent Directors
The Non-Executive Independent Director may receive remuneration by way of sitting feesfor attending meetings of Board or Committee thereof. Provided that the amount of suchfees shall be subject to ceiling/ limits as provided under Companies Act 2013 and rulesmade thereunder or any other enactment for the time being in force.
3. KMPs / Senior Management Personnel etc.
The Remuneration to be paid to KMPs/ Senior Management Personnel shall be based on theexperience qualification and expertise of the related personnel and governed by thelimits if any prescribed under the Companies Act 2013 and rules made thereunder or anyother enactment for the time being in force.
4. Directors and Officers' Insurance
Where any insurance is taken by the Company on behalf of its Directors KMPs/ SeniorManagement Personnel etc. for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel.