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Menon Bearings Ltd.

BSE: 523828 Sector: Engineering
NSE: MENONBE ISIN Code: INE071D01033
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OPEN 54.00
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VOLUME 2054
52-Week high 64.15
52-Week low 27.00
P/E 19.35
Mkt Cap.(Rs cr) 302
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.00
CLOSE 53.50
VOLUME 2054
52-Week high 64.15
52-Week low 27.00
P/E 19.35
Mkt Cap.(Rs cr) 302
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Menon Bearings Ltd. (MENONBE) - Director Report

Company director report

To

The Members

Your Directors feel great pleasure in presenting the 29th Annual Report ofyour Company along with the Audited Financial Statements for the financial year ended 31stMarch 2020.

FINANCIAL HIGHLIGHTS :

(Rs.in Lakhs)

Particulars No. For the Year ended 31st March 2020 For the Year ended 31st March 2019
1 Total Revenue (Net) 14035.59 17541.38
2 Profit before Depreciation & Amortization Expenses Finance Cost and Tax 3105.16 4445.81
3 Less : Depreciation and Amortization Expenses 687.80 481.80
Finance Cost 456.69 353.81
4 Profit before Tax 1960.67 3610.20
5 Less: Provision for Tax 520.87 1080.52
6 Profit after Tax 1439.80 2529.68
Other Comprehensive Income 3.48 5.47
7 Total Comprehensive Income 1443.28 2535.15
8 Balance of Profit as per last Balance Sheet 7524.11 6244.31
9 Balance Available for Appropriation 8967.39 8779.46
10 Rate of Paid Dividend 250% 150%
11 Dividend Paid 1401.00 980.70
12 Tax on Dividend 285.21 199.65
13 T ransfer to General Reserve 75.00 75.00
14 Balance of Profit carried to Balance Sheet 7206.18 7524.11

COVID-19 PANDEMIC :

During the month of March the spread of COVID-19 pandemic increased expeditiously inIndia and across the world this global crisis forced the Governments to enforce lock-downof all economic activities. In India the Government announced lock-down from third week ofMarch 2020 as a preventive measure against the COVID-19 pandemic. The Company's focus isalways to ensure the health and well-being of all employees accordingly the Companysuspended its operational activities and implemented 'work from home policy' from 23rdMarch 2020 to minimize disruption to services for all our customers globally. From awell-equipped broad work space to coordinating the work from home the Company adapted thechange very well as per the need of the hour. Further after ensuring compliance with allthe safety measures directed by the Government like social distancing and maintaininghygiene the Company resumed it's operations from 5th May 2020 with thepermission from District Administration. The situation created by Covid-19 continues tohold some uncertainties for the future; however the Board and the Management will do it'sbest to address the same as the situation evolves in the interests of all stakeholdersof the Company.

REVIEW OF OPERATIONS:

The Company is engaged in the business of manufacturing of "Auto Components".During the year under review the Company has registered a turnover of Rs. 14035.59/-Lakhs (previous year Rs. 17541.38/-) and Net Profit after Tax of Rs. 1439.80/- Lakhs(previous year Rs. 2529.68/- Lakhs).

DIVIDEND:

The Company's overall performance during the year under review was satisfactory. Basedon the performance your directors had the pleasure of declaring payment of 1stinterim dividend of Rs. 1.25/- per Equity Share and 2nd interim dividend of Rs.1.25/- per Equity Share (previous year interim dividend of Rs. 1.50/- per Equity Share andfinal dividend of Re. 0.25/- per Equity Share) being 250% of the paid-up Equity ShareCapital of the Company for the Financial Year ended on 31st March 2020.

SHARE CAPITAL OF THE COMPANY:

During the financial year under review there was no change in paid up share capital ofthe Company. As on 31st March 2020 the paid up capital of the Company was Rs.56040000/- divided into 56040000/- equity shares of Re. 1/- each.

CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY:

There was no change in the nature of business activities of the Company during thefinancial year under review.

RESERVES:

During the financial year under review Rs. 75 Lakhs (previous year Rs. 75 Lakhs) weretransferred to the General Reserve.

SUBSIDIARIES ASSOCIATE AND JOINT VENTURE COMPANIES:

The Company does not have any subsidiary associate or joint venture companies.

PUBLIC DEPOSITS:

During the financial year under review the Company has not accepted or renewed anydeposits from public within the meaning of Section 73 and 76 of the Companies Act 2013read with Companies (Acceptance of Deposits) Rules 2014.

EXTRACT OF ANNUAL RETURN:

As required under Section 92 of the Act and rules framed thereunder the extract ofannual return in Form MGT- 9 is given in "Annexure I" which forms part of thisreport.

DIRECTORS AND KMP:

a) Retirement by rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 and Articles of Association of theCompany Mr. Nitin Menon (DIN:00692754) Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible has offered himself forre-appointment and your Board recommends his re-appointment.

b) Appointment

No new director was appointed during the financial year under review.

c) Cessation

Mr. Ram Menon Emeritus Chairman of the Company passed away on 17th July2019. He was the promoter and founder of the Company. The Company owes its existence anddominant position to his vision and foresight which saw the Company attain marketleadership in its businesses. His qualifications and experience research oriented bent ofmind and passion for developments resulted in the continuous adoption of newtechnologies and saw the Company enter several new business areas. The fact that yourCompany is widely recognised today is almost entirely due to his work and guidance.

The Board places on record its sincerest gratitude to the Founder and Promoter of yourCompany and assures the Members that it will strive to continue in the pursuit of theselofty principles.

d) Declaration from Independent Directors

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and pursuant to Regulation 25 of the saidRegulations that they are not aware of any circumstance or situation which exist or maybe reasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence.

e) Number of Directors

As per Regulation 17 (c) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company is required to appoint minimum six (6) directors includingone women director on its Board. At present your Company has seven directors consisting offour Independent Directors including a woman Director and three Executive Directors.

f) Annual Performance and Board Evaluation

The Board has devised a policy pursuant to the provisions of the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 forperformance evaluation of the Chairman Board and individual Directors (includingIndependent Directors) and Committees which includes criteria for performance evaluationof Non-executive Directors and Executive Directors.

The Board has devised questionnaire to evaluate the performances of Board BoardCommittees and individual Directors and Chairperson. The Chairman of respective BoardCommittees shared the report on evaluation with the respective Committee members. Theperformance of each Committee was evaluated by the Board based on report on evaluationreceived from respective Board Committees. The reports on performance evaluation of theindividual directors were reviewed by the Chairman of the Board.

The evaluation framework for assessing the performance of directors comprises of thefollowing key areas:

i. Attendance at Board Meetings and Committee Meetings;

ii. Quality of contribution to the deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and itsperformance;

iv. Providing perspectives and feedback going beyond information provided by themanagement.

g) Key managerial Personnel (KMP)

The details of Key Managerial Personnel of the Company are as follows:

Sr. No. Name of the Director Designation
1 Mr. R. D. Dixit Chairman & Managing Director
2 Mr. Nitin Menon Vice Chairman & Joint Managing Director
3 Mr. Arun Aradhye Whole Time Director & CFO
4 Mr. Suraj Patil Company Secretary and Compliance Officer

Apart from the above no other Director or KMP were appointed or retired or resignedduring FY 2019-20.

Brief resume of the director retiring by rotation proposed to be re-appointed asstipulated under Regulation 36(3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Secretarial Standard - 2 on General Meetings is givenin the Notice convening the 29th Annual General Meeting of the Company.

MEETINGS OF THE BOARD:

The Board meets at regular intervals to discuss and decide on Company / businesspolicies and strategy apart from other Board business. A tentative annual calendar of theBoard and Committee meetings is informed to the directors in advance to facilitate them toplan their schedule accordingly and to ensure meaningful participation in the meetings.However in case of a special and urgent business need the Board's approval is taken bypassing resolutions through circulation as permitted by law which are noted in thesubsequent meeting of the Board of Directors.

The notice of meeting of the Board of Directors and Committees is given well in advanceto all the Directors of the Company. Usually meetings of the Board are held in KolhapurMaharashtra. The agenda of the Board / Committee meetings is circulated atleast 7 daysprior to the date of the meeting. The agenda for the Board and Committee meetings includesdetailed notes on the items to be discussed at the meeting to enable the directors makeinformed decisions.

During the year under review the Board of Directors met 5 (five) times the details ofwhich are given in the Report on Corporate Governance forming part of this report. Theintervening gap between two consecutive meetings was within the period prescribed underthe Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

DIRECTORS' RESPONSIBILITY STATEMENT:

Your directors to the best of their knowledge and belief and according to theinformation and explanations obtained by them and as required under Section 134 (3) readwith Section 134 (5) of the Companies Act 2013 state that:

a. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

b. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year 31stMarch 2020 and of the profit of the company for that period;

c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 andthat such internal financial controls are adequate and were operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

COMMITTEES OF THE BOARD:

In accordance with the provisions of the Companies Act 2013 and Listing Regulationsthe Company has constituted four committees of the Board namely:

1. Audit Committee

2. Stakeholders' Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the Report on Corporate Governance forming part of thisAnnual Report.

AUDIT COMMITTEE:

The Audit Committee is duly constituted as per the provisions of Section 177 of theCompanies Act 2013 and Regulation 18 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

As on 31st March 2020 the Audit Committee comprised of Mr. Mukund L.Shinde Mr. Gajendra Vasa Mrs. Kailash A Nevagi and Mr. R. D. Dixit. Mr. Mukund L. Shindeis the Chairman of Audit Committee and the Company Secretary and Compliance Officer of theCompany acts as the Secretary to the Audit Committee.

The Audit Committee of the Company reviews the reports to be submitted to the Board ofDirectors with respect to auditing and accounting matters. It also supervises theCompany's internal control and financial reporting process and vigil mechanism.

All the recommendations made by the Audit Committee were accepted by the Board ofDirectors of the Company.

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

The Company has adopted Vigil Mechanism / Whistle Blower Policy as per the provisionsof Section 177 of Companies Act 2013 and Regulation 22 of the Listing Regulations to dealwith instance of fraud. It also provides adequate safeguards against victimization ofdirectors or employees or any other person who avail the mechanism and its provides fordirect access to the Chairman of the Audit Committee in exceptional cases. The details ofthe Vigil Mechanism is explained in the Report on Corporate Governance and also posted onthe website of the Company at

https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/55681f95e4b0f3550bf6e656/143288

7189523/Whistle+Blower+Policy.pdf

We affirm that during the financial year 2019-20 no employee or director was deniedaccess to the Chairman of the Audit Committee.

PARTICULARS OF EMPLOYEES:

The information as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given inAnnexure II forming part of this report.

The statement containing particulars of employees as required under section 197(12) ofthe Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rule 2014 is provided in this Report as Annexure III forming partof this report.

REMUNERATION POLICY:

Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation 19of the Listing Regulations and on recommendation of Nomination and Remuneration Committeethe Board of Directors has adopted policy for selection and appointment of DirectorsSenior Management and their remuneration. The Remuneration Policy has been placed on thewebsite of the Company and is available on https://menonbearings.in/investorrelations.

STATUTORY AUDITORS:

As per provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014 the Members of the Company in their 26th Annual GeneralMeeting held on 29th June 2017 appointed M/s. ARNa & Associates (FRN:122293W) Chartered Accountants Kolhapur as the Statutory Auditors of the Company for aterm of consecutive 5 years i.e. from the conclusion of 26th Annual GeneralMeeting till the conclusion of 31st Annual General Meeting of the Company to beheld for the financial year ending 31st March 2022 subject to ratification bythe members every year. However after the amendment in Section 139 of the Act effective7th May 2018 ratification by shareholders every year for the appointment ofthe Statutory Auditors is no longer required.

M/s. ARNA & Associates Chartered Accountants have furnished a certificate of theireligibility under Section 141 of the Act and the Companies (Audit and Auditors) Rules2014 confirming that they are eligible for continuance as Statutory Auditors of theCompany.

The Statutory Auditors' Report for FY 2019-20 on the financial statements of theCompany forms part of this Annual Report.

The Statutory Auditors' report on the financial statements for FY 2019-20 does notcontain any qualifications reservations or adverse remarks or disclaimer.

The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso to Section 143(12) of the Act.

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.C. S. Adawadkar & Co. Cost Accountants Pune (FRN: 100401) as Cost Auditors of theCompany to conduct audit of cost records for the Financial Year 2020-21 at a remunerationof Rs. 125000/- (Rupees One Lakh Twenty Five Thousand Only) plus taxes as applicableand out of pocket expenses on actual basis. A resolution seeking approval of the membersfor ratifying the remuneration payable to the Cost Auditors for FY 2020-21 is provided inthe Notice of the ensuing 29th Annual General Meeting.

COST RECORDS:

The Cost accounts and records as required to be maintained under Section 148 (1) of Actare duly made and maintained by the Company.

SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. M Baldeva Associates Company Secretaries Thane to undertakeSecretarial Audit of the Company for the year 2019-20. The Secretarial Audit Report isannexed to this report as Annexure IV and forms part of this report.

With respect to observations made by the Secretarial Auditors in their report we wouldlike to state as follows:

Sr. No. Observations Explanation of Board of Directors
1. Delay in filling of e-forms DPT-3 with the Registrar of Companies: Delay was due to non-functioning of MCA (Ministry of Corporate Affairs) Portal on which e-forms are filed.
2. Delay in giving intimation to the stock exchanges for loss of share certificates / issue of duplicate share certificates in some cases: Delay was due to heavy rains and flood in Kolhapur district in month of August 2019.
3. Delay in furnishing prior intimation about the meeting of the Board of Directors for declaration of interim dividend: The delay was inadvertent. The Board has instructed the management of the Company to ensure timely compliance in future as per applicable Acts / Rules / Regulations / Notifications / circulars thereof from time to time.

Your Company always endeavor to comply with all applicable rules and regulations.

INTERNALAUDITOR:

Pursuant to the provisions of Section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the Board on recommendation of the Audit Committeere-appointed Mr. Abhay Golwalkar Chartered Accountants Kolhapur as Internal Auditor ofthe Company. Internal Auditor submits his reports to the Audit Committee on quarterlybasis.

Based on the report of internal auditor management undertakes corrective action intheir respective areas and thereby strengthens the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee.

INTERNAL FINANCIAL CONTROL:

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to Company's Policies safeguardingof assets prevention and detection of frauds and errors the accuracy and completeness ofthe accounting records and timely preparation of reliable financial disclosures.

The Audit Committee evaluates the efficiency and adequacy of financial control systemin the Company its compliance with operating systems accounting procedures at alllocations of the Company and strives to maintain the standard in Internal FinancialControl.

RISKS AND AREAS OF CONCERN:

The Company has laid down a well defined Risk Management Policy covering the riskmapping trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitoring ofboth business and non-business risk. The Board periodically reviews the risks and suggestssteps to be taken to control and mitigate the same through a properly defined framework.

REPORT ON CORPORATE GOVERNANCE:

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the following have been made a part of theAnnual Report and are enclosed / annexed to this report:

• Management Discussion and Analysis

• Report on Corporate Governance

• Declaration on compliance with Code of Conduct

• Certificate from Practicing Company Secretary that none of the directors on theBoard of the Company has been debarred or disqualified from being appointed or continuingas directors of companies

• Auditors' certificate regarding compliance of conditions of CorporateGovernance.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVE:

Pursuant to the provisions of Section 135 read with Companies (Corporate SocialResponsibility) Rules 2014 the Company has constituted Corporate Social Responsibility(csR) Committee and has framed a policy on Corporate Social Responsibility. As part of itsinitiatives under CSR the Company has identified various projects. These projects are inaccordance with Schedule VII of the Companies Act 2013.

The details as required under Rule 8 of Companies (Corporate Social Responsibility)Rules 2014 are annexed as Annexure V and forms part of this report.

PARTICULARS OF CONTRACTS OR 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 and are reported in the Notes to Accounts on the Financial Statements.

The details of material related party transactions as referred to in Section 188(1) ofthe Companies Act 2013 in the prescribed Form AOC-2 under Companies (Accounts) Rules2014 are given in Annexure VI which and forms part of this report.

In accordance with the provisions of Regulation 23 of Listing Regulations the Companyhas formulated the Related Party Transaction Policy and the same is uploaded on theCompany's website athttps://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/5d008e42360cb400017e598d/1560317680147/Related+Party+Transaction+Policy.pdf.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL

STATEMENTS RELATES AND THE DATE OF THE REPORT:

There have been no material changes or commitments affecting the financial position ofthe Company occurred between end of the financial year to which the financial statementsrelate and the date of this report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The details of loans or guarantees given or investments made by the Company under theprovisions of Section 186 of the Companies Act 2013 are given under Notes to Accounts onthe Financial Statements forming part of this Annual Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

There was no significant or material order passed by any regulator or court ortribunal which impacts the going concern status of the Company or will have bearing oncompany's operations in future.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 125 of the Companies Act 2013 read with theIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ('the rules') allunpaid or unclaimed dividends are required to be transferred by the Company to the IEPFestablished by the Government of India which remained unpaid/unclaimed for seven years ormore. Further according to the said Rules the shares on which dividend remained unpaidor unclaimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. Accordingly the Company hastransferred 35852 shares to the IEPF Authority during the F.Y. 2019-20 on which dividendsremained unpaid/unclaimed for seven consecutive years.

In terms of the provisions of Section 125 of the Companies Act 2013 and read withInvestor Education and Protection Fund (Accounting Audit Transfer & Refund) Rules2016 during the year an amount of Rs. 870248.50/- remained unpaid and unclaimeddividend for the F.Y. 2011-12 was transferred to the IEPF.

Further the unpaid and unclaimed dividend amount lying with the Company for F.Y.2012-13 is due to transfer to the IEPF in the month of September 2020.The details of thesame are available on the Company's website viz.www.menonbearings.com/Investorrelations/IEPF.

The Board has appointed Mr. Arun Aradhye Whole-Time Director & CFO of the Companyas the Nodal officer effective from 21st October 2016 to ensure compliancewith the IEPF Rules.

INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has constituted an Internal Complaint Committee as required under Section 4of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. During the year no complaint was filed before the said Committee. No compliantwas pending at the beginning or end of the year under review.

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 withRule 8 of the Companies (Accounts) Rules 2014 details regarding Conservation of EnergyTechnology absorption Foreign exchange earnings and outgo is given as in Annexure VII andforms part of this report.

COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand your directors confirm compliance of the same during the year under review.

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their gratitude for the continued co-operationand patronage extended by the esteemed customers both in OEM and Replacement Marketsegments. The Directors would also like to place on record their sincere appreciation forthe continued co-operation guidance support and assistance extended during the yearunder report by our bankers customers suppliers and Government agencies. The Board ofDirectors wishes to express its appreciation for the valuable contribution made by theemployees at all levels during the year under report.

For and on behalf of the Board of Directors
of Menon Bearings Limited
R.D.Dixit
Place : Kolhapur Chairman & Managing Director
Date : 26th May 2020 DIN : 00626827

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