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Force Motors Ltd.

BSE: 500033 Sector: Auto
BSE 00:00 | 24 Jan 1226.20 -78.90






NSE 00:00 | 24 Jan 1227.40 -78.45






OPEN 1300.85
52-Week high 1740.00
52-Week low 1051.35
Mkt Cap.(Rs cr) 1,616
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1300.85
CLOSE 1305.10
52-Week high 1740.00
52-Week low 1051.35
Mkt Cap.(Rs cr) 1,616
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Force Motors Ltd. (FORCEMOT) - Director Report

Company director report


The Members

The Directors are pleased to present the 62nd Annual Report togetherwith the audited standalone and consolidated Financial Statements for the Financial Yearended on 31st March 2021.

1. Financial Results

( Lakh)


Particulars 2020-21 2019-20
Revenue from Operations 198782 308013
Other Income 2489 4277
Profit / (Loss) before Depreciation Exceptional Items & Taxes 940 28341
Depreciation 17367 19452
Profit / (Loss) before Exceptional Items and Tax (16427) 8889
Exceptional Items - (3906)
Profit / (Loss) before Tax (16427) 4983
Provision for Taxation (5241) (836)
Profit / (Loss) AfterTax (11186) 5819
Other Comprehensive Income 981 (146)
Comprehensive Income for the year (10205) 5673
Equity Dividend 1318 1318
Tax on Equity Dividend -- 271
Balance in Retained Earnings 142281 154608


Particulars 2020-21 2019-20
Revenue from Operations 198819 308052
Other Income 2489 4277
Profit / (Loss) before Depreciation 977 28380
Exceptional Items & Taxes
Depreciation 17367 19452
Share of Profit/(Loss) of Joint Venture (1195) (821)
Profit / (Loss) before Exceptional (17585) 8107
Items and Tax
Exceptional Items -- (3906)
Profit / (Loss) before Tax (17585) 4201
Provision for Taxation (5231) (826)
Profit / (Loss) After Tax (12354) 5027
Other Comprehensive Income 982 (147)
Comprehensive Income for the year (11372) 4880
Attributable to:
(a) Equity holders of the Company (11381) 4870
(b) Non Controlling Interest 9 10
Net Transfer to General Reserve 5 5
Equity Dividend 1318 1318
Tax on equity dividend - 271
Balance in Retained Earnings 139945 153505

Considering the reserves' position of the Company the Board ofDirectors of your Company decided not to transfer further amount from the profits for theFinancial Year under report to General Reserve.

The Audited Consolidated Financial Statements in accordance with theCompanies Act 2013 (the Act1) and Indian Accounting Standard 110 onConsolidated Financial Statements are provided in this Annual Report.

2. State of Company's Affairs and Future Outlook

The Financial Year 2020-21 was a huge disruption not only in society atlarge but in many otherwise very stable activities such as Schools Tours and TravelsHealth Infra Hospitality Industry etc. The severity of the two successive Covid-19 wavesresulted in inflicting huge economic damage which was strongly felt in the above sectorsof the economy which virtually closed down.

The schools remained closed tens of thousands of school buses in useall over the country remained idle. Fleet replacement fleet growth etc. suffered.Similarly the lockdowns and the prohibition on international and interstate travel asalso on gatherings of people in the course of pilgrimage social events etc. virtuallyshutdown the tours and travels as also the hospitality industry. This heavily affected theCompany's business in which the demand for school buses tours and travels vehicleshospitality capable vehicles as also vehicles or vans especially for ferrying the workingpopulation to and from work are very important segments. Thus the market for theseproducts came to a virtual standstill.

In the healthcare sector where the need for ambulances for ferryingpeople to hospitals and to provide intensive care during transit was severely felt. Thesudden and frantic demand for ambulances was largely successfully met by the Company. Thisserved both the critical need of the hour and also provided to the Company to itsemployees suppliers and dealers - essential business.

It is hoped that by the mid of the Financial Year 2021-22 the countrywill overcome the severity of Covid-19 on account of the extraordinary effort atvaccinating large numbers in the population as also due to the large portion of thepopulation having gained immunity from previous Covid-19 infections. Normalcy in economiclife is expected to return.

The component business of the Company for supply of engines and axlesto ‘Mercedes Benz' and ‘BMW' also suffered during this period. Howeveran on-going recovery is seen.

The Company has been working strenuously to develop emission efficientengines to meet ‘BSVI.2' requirements mandated from the year 2023 onwards inboth diesel and CNG versions. Along with the Monocoque light weight bus platformsdeveloped by the Company these upgrades in power trains will be essential for futuresuccess. Work on electric drive for various platforms of vehicles produced by the Companyis on-going.

The new Van platform for shared mobility a completely clean sheet ofpaper design featuring current international standard technology showcased at the lastAuto Expo is expected to be introduced only during the current financial year. The severeCovid-19 pandemic greatly affected the supply chain for capital goods causing nearly ayears' delay.

The successor model for the ‘Trax' having been introducedtowards the end of the previous financial year has met with good acceptance in themarket.

The Company expects to introduce the all new and exciting 4x4 GurkhaSUV platform by the end of Q2 of the current financial year. We look forward with optimismto its success.

3. Change in Nature of Business if any

During the year under review there is no change in the nature ofbusiness of the Company.

4. Dividend

The Board recommended a dividend of Rs. 5/- per share for the yearunder review in its Meeting held on 28th May 2021.

The details of the dividends and shares transferred to the InvestorEducation and Protection Fund during the year under review are covered in the Report ofCorporate Governance.

5. Share Capital

The paid-up equity share capital as on 31st March 2021 was Rs. 13.18Crore. There was no public issue rights issue bonus issue or preferential issue etc.during the year under review. The Company has not issued any shares with differentialvoting rights or granted stock options or sweat equity during the year under review.

6. Annual Return

The Annual Return as on 31st March 2021 pursuant to the provisions ofSection 92 of the Act and the Rules framed there under is available on the website of theCompany at information

7. Number of Meetings of the Board of Directors

During the Financial Year 2020-21 six meetings of the Board ofDirectors of the Company were held on 11th May 202029th June 202010th August 20206thNovember 202011th January 2021 and 12th February 2021. Detailed information is providedin the Report of Corporate Governance.

8. Particulars of Loans Guarantees or Investments

The Company has not given any loans guarantees under Section 186 ofthe Act during the year under review. During the year the Company has made an investmentof Rs. 255000000/- in Force MTU Power Systems Private Limited a subsidiary of theCompany. Particulars of investments made by the Company upto the period under report areprovided in the Financial Statement attached to this Report.

9. Particulars of Contracts or Arrangements with Related Party

During the Financial Year 2020-21 pursuant to Section 177 of the Actand Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 all related party transactions (RPTs) were placed before the AuditCommittee for its requisite approval.

All RPTs entered during the year were on arm's length basis. There wereno material related party contract(s) or arrangement(s) or transaction(s) during the yearunder review as defined under Regulation 23 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

10. Explanation / Comments on any Qualification of Auditors Thereare no qualifications reservations or adverse remarks made either by the StatutoryAuditors or by the Company Secretary in Practice (Secretarial Auditor) in their respectiveaudit reports.

11. Material Changes and Commitments

There have been no material changes and commitments affecting thefinancial position of the Company which have occurred after the end of the period underreview.

12. Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

The Company has continued its efforts to ensure incrementalimprovements in energy conservation across plant locations various equipment etc. by useof improved technological solutions.

Increasing use of solar power has enabled the Company to reduce itsdependence on normal power supply utilising the large areas offered by factory roofing invarious plants.

Efforts such as controlling compressed air leakages improvedpreventive maintenance auto cut off systems localised switches large scale switchoverto LED lamps etc. have continued.

Technology Absorption

Technology absorption efforts though severely disrupted during theCovid-19 pandemic are continuing. The large scale use of virtual meetings and remoteworking has enabled a reasonable level of activity to be maintained for most part of thepandemic period.

(Rs. in Lakh)

Particulars 2020-21 2019-20
Capital Expenditure onR&D 10845 19991
Revenue Expenditure onR&D 11209 8948
Total R&D Expenditure 22054 28939
Total Income 201271 312290
% of total R&D Expenditure to Total Income 10.96 9.27
Revenue from Operations 198782 308013
% of total R&D Expenditure to Revenue from Operations 11.09 9.40

Foreign Exchange Earnings and Outgo

The foreign exchange earned by the Company during the year under reviewwas of Rs. 73.47 Crore as againstRs.45.58 Crore during the previous year.

Total foreign exchange outflow during the year under review was Rs.622.88 Crore as compared to Rs. 1042.38 Crore during the previous year.

13. Subsidiaries

Tempo Finance (West) Private Limited is a subsidiary of the Company.The Board of Directors of the Company have reviewed the affairs of the Subsidiary Company.

Force MTU Power Systems Private Limited (the 'FMTU') was incorporatedon 7th August 2018 as a joint venture between the Company and Rolls Royce Power SystemsAG (RR) through its subsidiary company namely MTU Friedrichshafen GmbH for engaging inthe business of development manufacture and marketing of engines engines for powergeneration complete power generators and engines for various applications like Rail. Byvirtue of Company's majority shareholding the 'FMTU' is also a subsidiary of the Companysince its incorporation.

The FMTU is ready to go into regular production. Initial high-techhigh-performance engines are delivered to Rolls Royce Power Systems at their MTU plantfor evaluation. Although the project was nearly completed in early 2020 therepresentatives from MTU were unable to visit India for close to a year thus theprocesses related to certifying conformance to manufacturing process and product qualitysystems were severely delayed. There is significant pressure from the internationalmarket for supply of the engines meant to be produced in this plant. It is expected thatregular functioning of this subsidiary will be achieved over the next quarter adding tothe diversification of the Company's business comprising of—vehicles in the VanMinibus and SUV Segment as also - engines and transmissions for high-technologyhigh-value vehicles and now - the high-technology diesel engines for meetinginternational requirement of power generation and railway traction engines etc.

As per Section 129 of the Act the Company has prepared theConsolidated Financial Statements of the Company and its subsidiaries which forms part ofthe Annual Report. A statement containing the salient features of the Financial Statementof subsidiaries in the prescribed format AOC-1 forms part of the Audited FinancialStatement of the Company.

The Audited Financial Statements of the subsidiary companies areavailable on the website of the Company for inspection by any Memberof the Company.

These financial statements and the policy for 'Determining MaterialSubsidiaries & its Governance Framework1 is placed on the Company's

14. RiskManagement

The Company has in place a comprehensive Risk Management frameworktoidentify monitor review and take all necessary steps towards mitigation of any riskelements which can impact the business health of the Company on a periodic basis.

All the identified risks are managed through continuous review ofbusiness parameters by the Management and the Board of Directors are also informed of therisks and concerns.

Further in compliance with the notification dated 5th May 2021 issuedby SEBI amending Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board of Directors have formed the Risk Management Committee. Thedetails of the Committee are covered in the Report on Corporate Governance.

15. Changes in the Directors and Key Managerial Personnel

During the year under review the shareholders of the Company approvedthe re-appointment of Mr. Prashant V. Inamdar (DIN: 07071502) the Executive Director(Operations) of the Company who was liable to retire by rotation in the Annual GeneralMeeting held on 29th September 2020.

There was no change in the Key Managerial Personnel during the yearunder review.

16. Declaration of Independent Directors

The Independent Directors have submitted their declarations to theBoard that they fulfill all the criteria of independence as stipulated in Section 149(6)of the Act and in Regulation 16 (1)(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The Board after assessing veracity of the same has takenthe same on record.

17. Details of Significant and Material Orders Passed by the Regulatorsor Court or Tribunal

There were no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status of the Company's operations infuture during the year under report.

As reported earlier petition challenging the decision of the Hon'bleHigh Court of Judicature at Bombay in respect of change in the name of the Company isstill under consideration of the Hon'ble Supreme Court of India.

18. Adequacy of Internal Financial Controls

M/s. Capri Assurance & Advisory Services Chennai and M/s. Jugal S.Rathi Chartered Accountants Pune are the Internal Auditors of the Company. The internalfinancial controls are adequate with reference to the financial status size andoperations of the Company.

19. Fixed Deposits

The Company currently has no Fixed Deposit Scheme in place. The detailsof earlier deposits are furnished hereunder:

SI. No. Particulars Nos. (in Lakh)
a) accepted or renewed during the year 0 0
b) remained unpaid or unclaimed as at the end of the year (31st March 2021)* 08 1.70
c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved.
i) at the beginning of the year Nil Nil
ii) maximum during the year Nil Nil
Hi) at the end of the year Nil Nil

* Includes 5 nos. fixed deposits amounting to Rs. 60000 which arematured claimed but have been withheld on the instructions of Statutory Authorities (CBI)and will be repaid upon their approval.

20. Corporate Social Responsibility (CSR)

The Annual Report on the CSR activities of the Company pursuant toRule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 is annexedto this Report.

21. Audit Committee

The Audit Committee of the Company consists of Mr. Pratap Pawar Mr.Arun Sheth Dr. Indira Parikh and Mr. Sudhir Mehta. Of the above Mr. Pratap Pawar Mr.Arun Sheth and Dr. Indira Parikh are the independent directors. For more details of theCommittee please refer heading Audit Committee of the Report on Corporate Governance.

The Company has established a vigil mechanism formulated aWhistleblower Policy and the Committee would oversee the genuine concerns expressed bythe employees and other Directors. The Company has also provided adequate safeguardsagainst victimization of the employees and the Directors who express their concerns. Themechanism provides direct access to the Chairman of the Audit Committee in exceptionalcases. The details of the mechanism / policy are disclosed on the website of the Company

22. Policy on Directors Appointment and Criteria

The Policy and other related matters as provided under Section 178 (3)of the Act is available on the website of the Company

23. Formal Annual Evaluation of the Performance of Board / Committeesand Directors

Information on the manner in which formal annual evaluation is made bythe Board of its own performance that of its committees and the individual directors isgiven in the Report on Corporate Governance.

24. Corporate Governance

The Company has taken all necessary steps to implement the provisionsof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and adetailed report on the various matters including the Auditors' Certificate on CorporateGovernance is annexed to this Report.

25. Business Responsibility Report

In terms of the Regulation 34(2) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Business Responsibility Report forms partof the Annual Report.

26. Details of Directors and Employees' Remuneration

Details as required under the provisions of Section 197 (12) of the theAct read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended; are annexed to this report.

Details as required under the provisions of Section 197 (12) of the theAct read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended; which form part of this report will bemade available to any shareholder on request as per provisions of Rule 5(3).

27. Disclosure on Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013

The Company has adopted Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaints Committee has been set up to redress complaintsif any received regarding sexual harassment. All the employees as defined under the saidAct are covered under this policy. Awareness programs were carried out against sexualharassment. There were no complaints received during the year under review.

28. Details of Frauds Reported by Auditors

There are no frauds against the Company reported by the Auditors fortheperiod underreport.

29. Directors' Responsibility Statement

The Directors of your Company to the best of their knowledge andbelief and according to the information and explanations obtained by them make thefollowing statements in terms of Section 134 (3) (c) of the Act:

(a) in the preparation of the Annual Financial Statements for the yearended 31st March 2021 the applicable accounting standards have been followed along withproper explanation relating to material departures;

(b) for the Financial Year ended 31st March 2021 such accountingpolicies as mentioned in the Notes to the Financial Statements have been appliedconsistently and judgments and estimates that are reasonable and prudent have been made soas to give a true and fair view of the state of affairs of the Company and of the loss ofthe Company for the year ended 31st March 2021;

(c) that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Actforsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Annual Financial Statements have been prepared on a goingconcern basis;

(e) that proper internal financial controls were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

(f) that proper systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.

30. Secretarial Standards of the ICSI

The Company is in compliance with the Secretarial Standards on theMeetings of Board of Directors (SS-1) and General Meetings (SS-2) as issued and amendedby the Institute of Company Secretaries of India.

31. Statutory Auditor

The Shareholders at the 58th Annual General Meeting appointed M/s.Kirtane & Pandit LLP Chartered Accountants (Firm Registration No. 105215W/W100057)Pune as the Statutory Auditors of the Company for a period of five years i.e. upto theconclusion of 63rd Annual General Meeting.

32. Cost Accountant

The Board of Directors of the Company had appointed M/s. Joshi Apte& Associates Cost Accountants Pune for verification and review of the Cost Recordsof the Company for the Financial Year 2020-21. M/s. Joshi Apte & Associates CostAccountants Pune have verified and reviewed the said records for the Financial Year2020-21.

33. Secretarial Audit Report

Mr. I. U. Thakur Company Secretary in Practice having Membership No.FCS 2298 was appointed to conduct the Secretarial Audit of the Company for the FinancialYear 2020-21 as required under Section 204 of the Act and Rules made thereunder. TheSecretarial Audit Report in Form MR-3 for the Financial Year 2020-21 is annexed to thisreport.

34. Industrial Relations

The industrial relations at all the Plants of the Company have beencordial during the year.

35. Appreciation

The Directors express their gratitude to the Dealers Suppliers andBanks for their support and express their warm appreciation for the sincere co-operationand dedicated work by the employees of the Company.

For and on behalf of the Board of Directors Force Motors Limited
Abhaykumar Firodia Chairman DIN: 00025179
Pune 28th May 2021
Registered Office: Mumbai-Pune Road Akurdi Pune - 411 035.
CIN:L34102PN1958PLC011172 Website: Phone: (Board)+91 20 2747 6381 E-mail: