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Mohan Meakin Ltd.

BSE: 590039 Sector: Consumer
NSE: N.A. ISIN Code: INE136D01018
BSE 05:30 | 01 Jan Mohan Meakin Ltd
NSE 05:30 | 01 Jan Mohan Meakin Ltd

Mohan Meakin Ltd. (MOHANMEAKIN) - Director Report

Company director report

TO THE MEMBERS :

The Directors present their 83rd Annual Report on the business andoperations of the Company with the Audited Financial Statements for the financial yearended 31st March 2017 together with the report of Auditors Messrs. A.F.Ferguson Associates.

FINANCIAL HIGHLIGHTS :-
Year ended 31-03-2017 Year ended 31-03-2016
(Amt. in lacs) (Amt. in lacs)
Rs. Rs.
Revenue from Operations 58177.73 57507.29
Less: Excise duty 11620.53 13213.71
Revenue from Operation (Net) 46557.20 44293.58
Other Income 403.75 897.77
Net Revenue from Operation & Other income 46960.95 45191.35
Less: Total Expenditure excluding
Exceptional items 46322.95 44670.18
Profit/(Loss) before exceptional items & tax 638.00 521.17
Exceptional items - -
Profit/(loss) before tax 638.00 521.17
Tax Expenses:
Provision for current tax 168.00 107.00
Minimum alternate tax (MAT) credit entitlement (168.00) (107.00)
Deferred tax charges/(benefits) (59.11) 135.51
Provision for taxation relating to earlier year - 11.78
Profit/(Loss) from continuing operations 697.11 373.88
Profit/(Loss) from discontinuing operations - -
Profit/(Loss) for the year 697.11 373.88
Balance brought forward from previous year 1458.11 1084.23
Balance carried to Balance Sheet 2155.22 1458.11

RESULTS:

The total net revenue after adjusting excise duty from operations and other income ofthe Company registered an increase from Rs. 45191 lacs last year to Rs. 46961 lacs. Theprofit during the year amounting to Rs.697 lacs as compared to Rs.374 lacs last year isquite satisfactory in the face of stiff competition in the trade.

DIVIDEND:

In view of the growth requirements of the business and the inadequacy of profits of theCompany the Directors have not recommended any Dividend for the year ended 31.3.2017.

DIRECTORS:

It is with a sense of profound sorrow and grief we have to inform that Shri J.K. JainDirector of your Company passed away on 15.11.2016. We have been deprived of his maturedand valuable advice and wise counsel for all times to come .

Shri Swaraj Suri Director of the Company having resigned due to health reasons hasceased to be Director during the year. The Board places on record its deep appreciationfor his valuable services from time to time. The Board of Directors of the Companypursuant to the recommendation of Nomination & Remuneration Committee appointed ShriMurugan Navamani I.A.S. (Retd.) (DIN 01309393 ) as Additional Director of the Companyw.e.f. 15.9.2016 who shall hold office as per the provisions of Section 161 of theCompanies Act 2013 till the date of ensuing Annual General Meeting. The Company hasreceived a Notice as per the provisions of Section 160(1) of the Companies Act from aMember in writing proposing his candidature for the office of Director along withrequisite deposit. Resolution seeking approval of the Shareholders for his appointment asIndependent Director has been incorporated in the Notice of the forthcoming Annual GeneralMeeting of the Company. The Board of Directors of the Company pursuant to therecommendation of Nomination & Remuneration Committee appointed Shri R.C. Jain (DIN00256210 ) as Additional Director w.e.f. 14.8.2017 subject to the approval of the Membersat the ensuing Annual General Meeting of the Company. The Company has received Noticealong with requisite deposit from a Member of the Company for his candidature as aDirector pursuant to the provisions of Section 160 (1) of the Companies Act 2013.Resolution seeking approval of the Shareholders for his appointment as Director has beenincorporated in the Notice of the forthcoming Annual General Meeting of the Company.

Appointment of Whole-time Director:

The Board of Directors of the Company pursuant to the recommendation of Nomination& Remuneration Committee appointed Shri R.C. Jain (DIN 00256210) as a Whole-timeDirector designated as Director Finance-cum-Chief Financial Officer of the Company w.e.f.1st October 2017 for a period of 3 years subject to the approval of the Members at theensuing Annual General Meeting of the Company.

Re-appointment of Director

In terms of the Articles of Association of the Company and in accordance with theprovisions of Companies Act 2013 Shri Vinay Mohan Director (DIN No.AEQPM4866E) retiresby rotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment. We recommend his re-appointment as his advice from time to time isbeneficial to the Company.

All Independent Directors have given the Declarations under Section 149 (6) of theCompanies Act and Regulation 16(1) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 that they meet the criteria of independence.

CHANGES IN KEY MANAGERIAL PERSONNEL.

The resignation of Brig. (Dr) Kapil Mohan VSM (Retd.) Ph.D. Managing Director wasexpressing his inability to continue as Director and Managing Director accepted duringthe year and in his place Shri Hemant Mohan took over as the Managing Director of theCompany. Except the above here is no change in the Key Managerial Personnel during theyear under Report.

BOARD PERFORMANCE EVALUATION:

The Company has devised a Performance Evaluation Framework and Policy which sets amechanism for the evaluation of the Board Board Committees and Directors. PerformanceEvaluation of the Board Committees and Director was carried out through an evaluationmechanism in terms of the aforesaid Performance Evaluation Framework and Policy.

The performance evaluation of each individual Director the Board and Committees wascarried out through deliberations. The said performance evaluation was done based on theparameters stated in the templates designed under the aforesaid Framework and after takinginto consideration the guidance note issued by the Securities and Exchange Board of Indiaon January 5 2017.

INDEPENDENT DIRECTORS' MEETING:

One Meeting of the Independent Directors was held on 30th May 2017 withoutthe presence of the Executive Directors or management personnel. At the IndependentDirectors Meeting held on 30th May 2017 the Independent Directors carried outperformance evaluation of Non-Independent Directors and the Board of Directors as a wholeperformance of Chairman of the Company the quality content and timelines of flow ofinformation between the Management and the Board based on the Performance Evaluationframework of the Company. All the Independent Directors except one were present at theaforesaid Meeting.

FAMILIRIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Company has in place a Familiarization Program for Independent Directors to provideinsights into the Company's business to enable them contribute significantly to itssuccess. The Executive Directors and Senior Management makes presentations periodically tofamiliarize the Independent Directors with the strategy operations and functions of theCompany.

AUDITORS:

The Shareholders of the Company at the 80th Annual General Meeting of theCompany held on 25th September 2014 had appointed M/s. A.F. FergusonAssociates Chartered Accountants New Delhi (Firm Regn. No.102849W) as Statutory Auditorsof the Company in the year 2014 for a period of 3 years to hold office till theconclusion of the Annual General Meeting of the Company to be held in the calendar year2017 to conduct the audit of the Company. Under Section 139(2) of the Companies Act 2013and Rules framed thereunder it is mandatory to rotate the Statutory Auditors oncompletion of term including the transition period permitted under the said Section . M/s.A.F. Ferguson Associates had held office as Statutory Auditors of the Company from theconclusion of 79th AGM i.e. from 28th September 2013. Pursuant toSection 139(2) of the Companies Act 2013 read with Rules framed thereunder M/s. A.F.Ferguson Associates Chartered Accountants have completed the transition period of 3 yearsfrom the date of commencement of Companies Act 2013. In terms of the said Section M/s.A.F. Ferguson Associates are holding the office of Statutory Auditors upto the conclusionof the 83rd Annual General Meeting. Accordingly the Board of Directors basedon the recommendation of Audit Committee and subject to the approval of the Shareholdersat the ensuing 83rd Annual General Meeting of the Company has proposed toappoint M/s. Haribhakti & Co. LLP Chartered Accountants New Delhi (Firm Regn.No.103523W/ W100048) as Statutory Auditors of the Company for a term of one year in placeof M/s. A.F. Ferguson Associates Chartered Accountants New Delhi (Firm Regn. No.102849W)to hold office from the conclusion of the 83rd AGM of the Company till theconclusion of 84th AGM to be held in the Calendar year 2018 to conduct theaudit of accounts of the Company at such remuneration as may be mutually agreed betweenthe Board of the Company and the Auditors. The Company has also received a written consentand a certificate from M/s. Haribhakti & Co. LLP Chartered Accountants to the effectthat their appointment if made would be in accordance with the provisions of Section 139and that they satisfy the criteria provided in Section 141 of the Companies Act 2013 readwith Rules framed thereunder.

M/s. Mohan & Co. Chartered Accountants Lucknow appointed for the audit ofaccounts of the Company's Lucknow Branch will retire at the conclusion of the forthcomingAnnual General Meeting. They have completed the transition period of 3 years from the dateof the commencement of the Companies Act 2013. In terms of said Section M/s. Mohan &Co. Chartered Accountants will be holding office of Branch Auditor upto the conclusion ofthe forthcoming 83rd Annual General Meeting.

Accordingly the Board of Directors based on recommendation of the Audit Committee andsubject to the approval of the Shareholders at the ensuing 83rd Annual GeneralMeeting has proposed to appoint M/s. Saxena & Saxena Chartered Accountants New Delhi(Firm Regn. No.006103N) in place of M/s. Mohan & Co. Chartered Accountants Lucknowas Branch Auditor of the Company for audit of accounts of Company's Lucknow Branch for aterm of one year from the conclusion of 83rd Annual General Meeting till theconclusion of 84th AGM to be held in the Calendar year 2018.

The Company has also received a written consent and a certificate from M/s. Saxena& Saxena Chartered Accountants to the effect that their appointment if made would bein accordance with the provisions of Section 139 and that they satisfy the criteriaprovided in Section 141 of the Companies Act 2013 read with Rules framed thereunder.

The Notes of the financial statements referred to in the Auditors' Report issued byM/s. A.F. Ferguson Associates for the financial year ended 31st March 2017 are selfexplanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.

SECRETARIAL AUDIT:

Shri Pradeep Kumar Tuli Prop. M/s. Tuli Pradeep & Associates as Practising CompanySecretary was appointed to conduct the Secretarial Audit for the financial year 2016-17 asrequired under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report for financial year 2016- 2017 forms part of the Annual Report asAnnexure-I to the Board's Report.

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

The Board has appointed Shri Pradeep Kumar Tuli Prop. M/s. Tuli & AssociatesPractising Company Secretary to carry out the Secretarial Audit of the Company for thefinancial year 2017-18.

CONSOLIDATED FINANCIAL STATEMENT IN RESPECT OF THE SUBSIDIARIES ASSOCIATE COPANY ANDJOINT VENTURES.

There is no subsidiary Company of Mohan Meakin Limited but in view of the extendeddefinition as provided under Section 129(3) of the Companies Act 2013 a separatestatement containing the salient features of the financial statement of the associateCompanies are annexed in the prescribed format ‘AOC-1' – Annexure II.

RELATED PARTY TRANSACTIONS:

Section 188 of the Companies Act 2013 prescribes that no Company shall enter intoAgreements/Arrangements/ Contracts with related party unless the consent of the Board ofDirectors is given in Resolution at the Meeting of the Board. It bars the related party tovote on such Special Resolution. It also provides that no Contract or Arrangement shall beentered into except with the prior approval of the Company by Special Resolution. Althoughthe Company has entered into Agreements/ Arrangements/Contracts with related parties andthe Board has thoroughly examined that these Agreements/ Contracts are on arm's lengthbasis however the Board thinks it fit to place all the Agreements/Arrangements/Contracts where the Directors are interested being common Director or otherwise with theserelated parties before the Shareholders.

Although according to Board of Directors these transactions were entered into by theCompany in its ordinary course of business much earlier before the Companies Act 2013came into force yet out of abundant caution these are placed before the shareholders byway of Special Resolution as prescribed under the Companies Act 2013 and Regulation 23 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The parties withwhom the Company has entered into Agreements/Arrangements/Contracts for a term of one yearfrom 1.4.2017 to 31.3.2018 are as under :-

1. M/s.Mohan Breweries & Distilleries Ltd. Chennai

2. " Mohan Rocky Springwater Breweries Ltd. Mumbai.

3. " Mohan Zupack Ltd. New Delhi

4. " Mohan Closures Ltd. New Delhi

5. " Trade Links (P) Ltd. New Delhi

6. " John Oakey & Mohan Ltd. Delhi

7. " National Cereals Products Ltd. Solan Brewery Most of theAgreements/Arrangements/Contracts are continuing since long time with the parties to givebottling rights of different brands of Beer/Whisky at different stations like ChennaiMumbai so that the Company's products are available throughout the Country whereverpossible otherwise the Company's production/sales would be affected which ultimately wouldaffect its profitability. It is economically unviable for the Company to dispatch itsgoods to these stations from its own manufacturing centers which are based in the North.

With these arrangements the Company is getting handsome amount of Royalty/Commissionevery year. The Board and Audit Committee are of the view that these are in the ordinarycourse of business and are at arm's length and these Agreements/Arrangements/Contractsshould continue. The transactions are of repetitive nature. Disclosure requirements asstipulated in Schedule V-A(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is not applicable to the Company.

Disclosure of particulars in the prescribed Form of Contracts/Arrangement entered intoby the Company with related parties referred to in Section 188(2) of the Companies Act2013 is annexed as per Annexure-III. All related party transactions are placed on aquarterly basis before the Audit Committee for approval and before the Board forconsideration and noting .

The Policy on related party transactions as approved by the Board is uploaded on theCompany's website www.mohanmeakin.com.

DEPOSITS FROM PUBLIC:

During the financial year under review the Company has not accepted any deposits frompublic. However the amount of interest remaining unpaid on the deposits is beingdeposited in the Investor Education and Protection Fund as per provisions of Section 205A& 205C of the Companies Act 1956.

Transfer of Amounts to Investor Education and Protection Fund:

Complying with the provisions of Sections 205 A and 205 C of the Companies Act 1956which is still in force amounts remaining unpaid or unclaimed for a period of seven yearshave been transferred by the Company from time to time on due dates to the InvestorEducation and Protection Fund.

Pursuant to the provisions of Investor education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with Companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company onthe Company's website www.mohanmeakin.com

Corporate Social Responsibility Committee:

As prescribed under Section 135 of the Companies Act 2013 all Companies having networth of Rs.500 crore or more or turnover of Rs.1000 crore or more or a net profit ofRs.5 crore or more during any financial year are required to constitute a Corporate SocialResponsibility (CSR) Committee of the Board of Directors comprising three or moreDirectors at least one of whom should be an Independent Director and such Company shallspend at least 2% of the average net profits of the Company's three immediately precedingfinancial years towards Corporate Social Responsibility activities.

The Company constituted the Corporate Social Responsibility Committee as required underSection 135 of the Companies Act 2013. However the Company does not meet the criterialaid down in Clause 5 of Section 135 of the Companies Act as such no activities could beundertaken by the Company so far.

BUSINESS RESPONSIBILITY REPORT:

Regulation 34 (2)(f) of the Securities & Exchange Board of India (ListingObligations and Disclosures Requirements) Regulations 2015 mandated inclusion of theBusiness Responsibility Report (BRR) as part of the Annual Report for listed entities.However as the Company does not fall under the ambit of said Regulation of SEBI theBusiness Responsibility Report is not required ; hence not being placed.

INSURANCE:

All the insurable instrument of the Company including Building Machinery and otherassets etc. is adequately insured.

PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES:

In terms of the provisions of Section 197(12) of the Companies Act 2013 the ratio ofthe remuneration of each Director to the median Employees' Remuneration is annexedherewith as Annexure-V to this Report. The Statement showing the particulars under Rule 5(2) and 5 (3) of the Companies (Appointment & Remuneration of Managerial Personnel)Rules 2014 required to be included in the Directors' Report is not applicable as noemployee of the Company was in receipt of Remuneration equal to or above the limitmentioned in the said Rules.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure-IV andforms part of this Report.

CASH FLOW STATEMENT:

Cash Flow Statement for the year 2016-2017 is attached to the Balance Sheet.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS & OUTGO.

The information on conservation of energy technology absorption foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure"VI".

DIRECTORS RESPONSIBILITY STATEMENT:

Your Directors make the following statements in terms of Section 134(3)(c)of theCompanies Act 2013: a. that in the preparation of the annual financial statements for theyear ended 31st March 2017 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures if any ; b. thatsuch accounting policies as mentioned in Note 2 of the Notes to the Financial Statementshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at 31st March 2017 and of the profit of the Company to the yearended on that date. c. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; d. that the annual financial statements have been prepared on agoing concern basis; e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively. f. that systems to ensurecompliance with the provisions of all applicable laws were in place and were adequate andoperating effectively.

CORPORATE GOVERNANCE & MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Corporate Governance & Management's Discussion and Analysis Reports for the yearunder review as stipulated under Schedule V-C (Regulation 34(3) and 53(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 is presented in aseparate Section forming part of the Annual Report.

Compliance Certificate of Practising Company Secretary regarding compliance of theconditions of Corporate Governance as stipulated in Schedule V(E) of the SEBI (ListingObligations and Disclosure Requirements) Regulation 2015 is annexed and forms a part ofthe Annual Report.

ACKNOWLEDGEMENT:

The Directors would like to thank all Shareholders Customers Bankers ContractorsSuppliers Joint Venture Partners and Associates of your Company for the support receivedfrom them during the year. The Directors would also like to place on record theirappreciation of the dedicated efforts put in by the employees of the Company.

Shri Hemant Mohan Managing Director
" L.K. Malhotra Director
" M. Nandagopal Director
" Yash Kumar Sehgal Director
" Murugan Navamani Director
" Vinay Mohan Director
Mrs. Shalini Mohan Director

Mohan Nagar – 14th August 2017. (Ghaziabad) U.P.

TO THE BOARD'S REPORT FOR THE YEAR ENDED 31ST MARCH 2017

Information pursuant to Section 134(3)(q) and Section 197 of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014:

1. The ratio of the remuneration of each Director to the median employee's remunerationfor the financial year :

Name Designation Ratio
Brig.(Dr) Kapil Mohan Managing Director 0.65%
Shri Hemant Mohan Managing Director 3.17%
" Vinay Mohan Non-Executive Non-Independent -
Smt. Shalini Mohan Non-Executive Non-Independent -
Shri L.K. Malhotra Non-Executive Independent -
" J.K. Jain Non-Executive Independent -
" M.Nandagopal Non-Executive Independent -
" Swaraj Suri Non-Executive Independent -
" Yash Kumar Sehgal Non-Executive Independent -

For this purpose sitting fees and reimbursement of out of pocket expenses incurred inattending the Board and Committees Meetings paid to the Directors have not been consideredas remuneration.

The Members have at the Annual General Meeting of the Company held on 25thSeptember 2014 approved payment of Commission to the non-Executive Directors within theceiling of 1% of the of net profits of the Company as computed under applicable provisionsof the Act. The said Commission is decided each year by the Board of Directors anddistributed amongst the Non-Executive Directors based on their attendance and contributionat the Board and certain Committee Meetings as well as the time spent on operationalmatters other than at the Meetings.

However no Commission was paid to the Non-Executive Directors for the financial year2016-17 in view of inadequacy of profits.

2. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year.

The Managing Director and the Dy. Managing Director got annual increase in the salarygrade already approved by the shareholders in the Annual General Meeting. Non-ExecutiveDirectors have not been paid any remuneration during the year.

There is no increase in the remuneration of Chief Financial Officer and the CompanySecretary during the financial year 2016-17.

3. The percentage increase in the median remuneration of employees in the financialyear :

The average percentage increase in the median remuneration of employees in thefinancial year was around 8.67%. The calculation of percentage increase in MedianRemuneration is done based on comparable employees. Employees who were not eligible forany increment have been excluded for the purpose of this calculation.

4. The Number of permanent Employees on the rolls of the Company:

The number of permanent employees on the rolls of the Company as on 31stMarch 2017 are – 820.

5. The explanation on the relationship between average increase in remuneration and theCompany performance: The criteria for increase in the remuneration amongst other thingsis also related to the individual performance the Company's performance and such otherfactors as briefly described in the Policy for Remuneration of Key Managerial Personneland Employees as given in the Corporate Governance Report under the head "Nomination& Remuneration Committee" which forms part of this Report.

To maintain smooth relations with the workmen the Company is giving increase inremuneration as per Agreement(s) entered into with the Labour Unions and the Company fromtime to time. As regards staff and officers the slab of increase is fixed according tobasic salary drawn by them. The Bonus Dearness and House Rent allowances are linked withthe basic salary wherever applicable under the terms of appointment.

6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company: The Key Managerial Personnel were paid around 15.79% of theprofit after tax (PAT) for the Financial Year 2016-17.

7. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer and the variation inthe Net Worth of the Company as at the close of the current financial year and previousfinancial year: There is no variation in the market capitalization of the Company in viewof small number of transfer of shares during the last few years as a result the shares arenot being quoted by Calcutta Stock Exchange where the shares of the Company are listed.

However the maximum average rate of Company's share transacted during the year as perShare Transfer Register is Rs.35/-. The shares were not being frequently traded at theCalcutta Stock Exchange.

8. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and exceptionalcircumstances for increase in the managerial remuneration if any : As per Company Policy& designation of the Employees taking into consideration their qualificationexperience and the job involved.

9. Comparison of the remuneration of each of the Key Managerial Personnel against theperformance of the Company: The comparison of remuneration of each of the KMP against theperformance of the Company is as under :-

Designation % of PAT
Managing Director 13.22
Company Secretary 1.32
Chief Financial Officer 1.25

10. The key parameters for any variable component of remuneration availed by theDirectors:

There is no variable Components of remuneration availed by the Directors & KeyManagerial Personnel. 11. The ratio of the remuneration of the highest paid Director tothat of the employees who are not Directors but receive remuneration in excess of thehighest paid Director during the year : Not Applicable.

12. Affirmation that the remuneration is as per the remuneration policy of the Company:Yes General Notes:

The Remuneration for the purpose of this table is defined as "Total Cost to theCompany (TCC) + Approved Bonus" for all the employees wherever applicable under theterms of appointment. KMPs remuneration is as per the Form 16 (on an annualized basis).