Your Directors feel great pleasure in presenting 28 Annual Report of your Company comprising the Audited Financial Statements for the year ended 31 March 2019.
FINANCIAL HIGHLIGHTS : (Rs.in lakhs)
|Sr. No.||Particulars ||For the Year ended 31 March 2019||For the Year ended 31 March 2018 |
|1||Total Revenue (Net)||17541.38||14678.20|
|2 ||Profit before Depreciation & Amortization Expenses Finance Cost and Tax||4445.81||3833.98|
|3||Less : Depreciation and Amortization Expenses||481.80||407.69|
|4||Profit before Tax||3610.20||3233.51|
|5||Less: Provision for Tax||1080.52||1126.16|
|6||Profit after Tax||2529.68||2107.35|
|Other Comprehensive Income||5.47||28.68|
|7||Balance of Profit as per last Balance Sheet||6244.31||5026.39|
|8||Balance Available for Appropriation||8779.46||7162.42|
|9||Rate of paid Dividend||175%||125%|
|11||Tax on Dividend||199.65||142.61|
|12||Transfer to General Reserve||75.00||75.00|
|13||Balance of Profit carried to Balance Sheet||7524.11||6244.31|
The Company has adopted the Indian Accounting Standard ('Ind AS') w.e.f. 1st April 2017. These financial statements have been prepared in accordance with the recognition and measurement principles stated therein and as prescribed under Section 133 of the Companies Act 2013 read with relevant rules issued thereunder and the other accounting principles generally accepted in India.
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. 17541.38 Lakhs (previous year Rs. 14678.20) and Net Profit after Tax of Rs. 2529.68 Lakhs (previous year Rs. 2107.35 Lakhs)(before other comprehensive income).
The Company's overall performance during the year under review was satisfactory. Based on the performance your directors had the pleasure of declaring payment of interim dividend of Rs.1.50 per Equity Share (previous year 1 interim dividend of Re.0.75 and 2 interim dividend of Re. 0.50 and final dividend Re. 0.25 per Equity Share) being 150% of the paid up Equity Share Capital of the Company for the Financial Year ended on 31 March 2019.
SHARE CAPITAL OF THE COMPANY:
During the financial year under review there was no change in paid up share capital of the Company.
CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY:
There was no change in the nature of business activities of the Company during the Financial Year under review.
During the financial year under review Rs. 75 lakhs (previous year Rs. 75 lakhs) were transferred to the General Reserve.
SUBSIDIARIES ASSOCIATE AND JOINT VENTURE COMPANIES:
The Company does not have any subsidiary associate or joint venture. .
During the financial year under review the Company has not accepted or renewed any deposits within the meaning of Section 73 and 76 of the Companies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.
EXTRACT OF ANNUAL RETURN:
As required under Section 92 of the Act and rules framed thereunder the extract of annual return in Form MGT-9 is given in Annexure I which forms part of this report.
DIRECTORS AND KMP:
a) Retirement by rotation
In accordance with the provisions of Section 152 of the Companies Act 2013 read with Companies (Management and Administration) Rules 2014 and Articles of Association of the Company Mr. R. D. Dixit (DIN:00626827) Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment and your Board recommends his re-appointment.
Mr. Arun Aradhye (DIN: 03052587) CFO of the Company was appointed as Whole Time Director (designated as WTD & CFO) of the Company for a period of 5 (five) years w.e.f. 31 January 2019. Further Dr. Santosh Prabhu (DIN 00506595) was appointed as an Independent Director of the Company for a period of 5 years w.e.f. 24 October 2018. The shareholders have approved these appointments by passing necessary resolutions through postal ballot process result of which was declared on 20 March 2019.
The Members pursuant to Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 approved the appointment of Mr. Gajendra Vasa as an Independent Director of the Company who was appointed as such for the period of 5 (five) years w.e.f. 30 December 2017and has attained the age of 75 years by way of passing special resolution through Postal Ballot process result of which was declared on 20 March 2019 and holds office upto 29 December 2022.
Brief resume of the director proposed to be re-appointed as stipulated under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and Secretarial Standard 2 on General Meetings is given in the Notice convening the 28 Annual General Meeting of the Company.
Pursuant to the provisions of Section 203 of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 6 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Mr. Suraj Patil has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 1 February 2019.
Capt. Sudheer Naphade (DIN: 02011352) Independent Director of the Company resigned from the directorship of the Company with effect from 14 April 2018 due to old age and other personal reasons. The Board places on record its sincere appreciation for the valuable contribution made by him during his tenure as director of the Company.
Mr. Anup Padmai resigned as Company Secretary and Compliance Officer of the Company w.e.f. the close of business hours of 31 January 2019. The Board places on record its sincere appreciation for the valuable contribution made by him during his tenure as Company Secretary of the Company.
d) Declaration from Independent Directors
The Company has received declaration from its all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and pursuant to Regulation 25 of the said Regulations that they are not aware of any circumstance or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
e) Annual Performance and Board Evaluation
The Board has devised a policy pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 for performance evaluation of the Chairman Board and individual directors (including Independent Directors) and Committees which includes criteria for performance evaluation of Non-executive Directors and Executive Directors.
The Board has devised questionnaire to evaluate the performances of Board Board Committees and individual Directors and Chairperson. The Chairman of respective Board Committees shared the report on evaluation with the respective Committee members. The performance of each Committee was evaluated by the Board. The reports on performance evaluation of the individual directors were reviewed by the Chairman of the Board. The evaluation framework for assessing the performance of directors comprises of the following key areas: i. Attendance at Board Meetings and Committee Meetings; ii. Quality of contribution to the deliberations; iii. Strategic perspectives or inputs regarding future growth of Company and its performance; iv. Providing perspectives and feedback going beyond information provided by the management.
f) 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 |
|(Whole Time Director w.e.f. 31 January 2019)|
|4||Mr. Anup Padmai||Company Secretary and Compliance Officer |
|(upto 31 January 2019)|
|5||Mr. Suraj Patil||Company Secretary and Compliance Officer |
|(w.e.f. 1 February 2019)|
Apart from the above no other Director or KMP were appointed or retired or resigned during FY 2018-19.
MEETINGS OF THE BOARD:
The Board meets at regular intervals to discuss and decide on Company / business policies and strategy apart from other Board business. A tentative annual calendar of the Board and Committee Meetings is informed to the Directors in advance to facilitate them to plan their schedule 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 by passing resolutions through circulation as permitted by law which are noted in the subsequent meeting of the Board of Directors.
The notice of meeting of the Board of Directors and Committees is given well in advance to all the Directors of the Company. Usually meetings of the Board are held in Kolhapur Maharashtra. The agenda of the Board / Committee meetings is circulated at least 7 days prior to the date of the meeting. The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed at the meeting to enable the Directors to make an informed decision.
During the year under review the Board of Directors met 4 (Four) times the details of which are given in the Report on Corporate Governance. The intervening gap between two consecutive meetings was within the period prescribed under the 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 the information and explanations obtained by them and as required Section 134 (5) of the Companies Act 2013 state that:
a. in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanation relating to material departures if any;
b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 31 March 2019 and of the profit of the company for that period;
c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
COMMITTEES OF THE BOARD:
In accordance with the provisions of the Companies Act 2013 and Listing Regulations the 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 held during the year are provided in the Report on Corporate Governance a part of this Annual Report.
The Audit Committee is duly constituted as per the provisions of Section 177 of the Companies Act 2013 and Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As on 31 March 2019 the Audit Committee comprised of Mr. M. L. Shinde Mr. Gajendra Vasa Mrs. Kailash A Nevagi and Mr. R. D. Dixit. Mr. M. L. Shinde is the Chairman of Audit Committee and the Company Secretary and Compliance Officer of the Company acts as the Secretary to the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company.
The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process and vigil mechanism.
WHISTLE BLOWER POLICY / VIGIL MECHANISM:
The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instances of fraud and mismanagement if any. The mechanism also provides for adequate safeguards against victimization of Directors and employees who avails the same in the exceptional cases. The details of the Vigil Mechanism/Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the website of the Company at https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/5d008ce9be4f020001580c21/15603 17231963/Whistle+Blower+Policy.pdf We affirm that during the financial year 2018-19 no employee or director was denied access to the Chairman of the Audit Committee.
PARTICULARS OF REMUNERATION:
Disclosure pertaining to remuneration and other details as required under Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided in this Report as Annexure II and forms a part of this report.
The statement containing particulars of employees as required under section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 is provided in this Report as Annexure III and forms a part of this report.
Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation 19 of the Listing Regulations and on recommendation of Nomination and Remuneration Committee the Board of Directors have adopted policy for selection and appointment of Directors Senior Management and their remuneration. The Remuneration Policy has been placed on the website of the Company and is available on https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/56f8c9c4a3360c3a90bf041e/145914 5236512/Policy+on+criteria+for+appointment+%26+remuneration+of+directors%2C+KMPs+%26+Senior+ Management+personnel.pdf.
STATUTORY AUDITORS :
As per provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules 2014 the Members of the Company in their 26 Annual General Meeting held on 29 June 2017 appointed M/s. ARNA & Associates (FRN: 122293W) Chartered Accountants Kolhapur as the Statutory Auditors of the Company for a term of consecutive 5 years i.e. from the conclusion of 26 Annual General Meeting till the conclusion of 31 Annual General Meeting of the Company to be held for the financial year ending 31 March 2022 subject to ratification by the members every year. However after the amendment in Section 139 of the Act effective 7 May 2018 ratification by members every year for the appointment of the Statutory Auditors is no longer required.
M/s. ARNA & Associates Chartered Accountants have furnished a certificate of their eligibility under Section 141 of the Act and the Companies (Audit and Auditors) Rules 2014 confirming that they are eligible for continuance as Statutory Auditors of the Company. The Statutory Auditors' Report for FY 2018-19 on the financial statements of the Company forms part of this Annual Report.
The Statutory Auditors' report on the financial statements for FY 2018-19 does not contain any qualifications reservations or adverse remarks or disclaimer.
The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso to Section 143(12) of the Act.
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 the Company to conduct audit of cost records for the Financial Year 2019-20 at a remuneration of Rs. 125000/- (Rupees One Lakh Twenty Five Thousand Only) plus taxes as applicable and out of pocket expenses on actual basis. A resolution seeking approval of the members for ratifying the remuneration payable to the Cost Auditors for FY 2019-20 is provided in the Notice of the ensuing Annual General Meeting.
The Cost accounts and records as required to be maintained under Section 148 (1) of Act are duly made and maintained by the Company.
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. M Baldeva Associates Company Secretaries Thane to undertake Secretarial Audit of the Company for the year 2018-19. The Secretarial Audit Report is annexed 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 would like to state that: (a) delay in filing of some e-forms with Registrar of Companies (ROC) was inadvertent; and
(b) delay in processing of one dematerialisation request was due to tremendous volume of transfer and demat requests at RTA which was processed on 31 day.
Pursuant to the provisions of Section 138 of the Companies Act 2013 read with Companies (Accounts) Rules 2014 the Board on recommendation of the Audit Committee re-appointed Mr. Abhay Golwalkar Chartered Accountants Kolhapur as Internal Auditor of the Company. Internal Auditor submits his reports to the Audit Committee on quarterly basis.
Based on the report of internal auditor management undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.
INTERNAL FINANCIAL CONTROL:
The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business including adherence to Company's Policies safeguarding of assets prevention and detection of frauds and errors the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.
The Audit Committee evaluates the efficiency and adequacy of financial control system in the Company its compliance with operating systems accounting procedures at all locations of the Company and strives to maintain the standard in Internal Financial Control.
RISKS AND AREAS OF CONCERN:
The Company has laid down a well defined Risk Management Policy covering the risk mapping trend analysis risk exposure potential impact and risk mitigation process. A detailed exercise is being carried out to identify evaluate manage and monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.
REPORT ON CORPORATE GOVERNANCE:
Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the following have been made a part of the Annual Report and are enclosed / annexed to this report:
Management Discussion and Analysis
Report on Corporate Governance
Declaration on compliance with Code of Conduct
Certificate from Practicing Company Secretary that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of companies
Auditors' certificate regarding compliance of conditions of Corporate Governance.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVE:
Pursuant to the provisions of Section 135 read with Companies (Corporate Social Responsibility) Rules 2014 the Company has constituted Corporate Social Responsibility (CSR) Committee and has framed a policy thereon. As part of its initiatives under CSR the Company has identified various projects. These projects are in accordance with Schedule VII of the Companies Act 2013.
The details as required under Rule 8 of Companies (Corporate Social Responsibility) Rules 2014 are annexed to this report 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 financial year with related parties were in the ordinary course of business and on an arm's length basis 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) of the Companies Act 2013 in the prescribed Form AOC-2 under Companies (Accounts) Rules 2014 is annexed to this report as Annexure VI and forms part of this report.
In accordance with the provisions of Regulation 23 of Listing Regulations the Company has formulated the Related Party Transaction Policy and the same is uploaded on the Company's website at https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/5d008e42360cb400017e598d/15603 17680147/Related+Party+Transaction+Policy.pdf
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY 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 of the Company occurred between end of the financial year to which the financial statements relate 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 the provisions of Section 186 of the Companies Act 2013 are given under Notes to Accounts on the Financial Statements forming part of this Annual Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
There was no significant or material order passed by any regulator or court or tribunal which impacts the going concern status of the Company or will have bearing on company's operations in future.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 125 of the Companies Act 2013 read with the IEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ('the Rules') all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India which remained unpaid/unclaimed for seven years or more. Further according to the said Rules the shares on which dividend remained unpaid or unclaimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly the Company has transferred 143100 shares to the IEPF Authority on which dividends remained unpaid/unclaimed for seven consecutive years.
In terms of the provisions of Section 125 of the Companies Act 2013 and read with Investor Education and Protection Fund (Accounting Audit Transfer & Refund) Rules 2016 during the year an amount of Rs. 919578/- being unpaid and unclaimed dividend for the F.Y. 2010-11 was transferred to the IEPF.
Further the unpaid and unclaimed dividend amount lying with the Company for F.Y. 2011 - 12 is due to transfer to the IEPF in the month of September 2019.The details of the same are available on the Company's website viz. www.menonbearings.com/Investor relations/IEPF.
The Board has appointed Mr. Arun Aradhye Whole-Time Director & CFO of the Company as the Nodal Officer effective from 21 October 2016 to ensure compliance with the IEPF Rules.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has constituted an Internal Complaint Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. During the year no complaint was filed before the said Committee. No compliant was 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 with Rule 8 of the Companies (Accounts) Rules 2014 details regarding Conservation of Energy Technology absorption Foreign exchange earnings and outgo is given in Annexure VII and forms part of this report.
COMPLIANCE WITH SECRETARIAL STANDARDS:
The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and your directors confirm compliance of the same during the year under review.
Your Directors wish to place on record their gratitude for the continued co-operation and patronage extended by the esteemed customers both in OEM and Replacement Market segments. The Directors would also like to place on record their sincere appreciation for the continued co-operation guidance support and assistance extended during the year under report by our bankers customers suppliers and Government agencies. The Board of Directors wishes to express its appreciation for the valuable contribution made by the employees at all levels during the year under report.
|For and on behalf of the Board of Directors|
|Place : Kolhapur||Chairman & Managing Director|
|Date : 23 April 2019||DIN : 00626827|