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Scooters India Ltd.

BSE: 505141 Sector: Auto
NSE: N.A. ISIN Code: INE959E01011
BSE 10:26 | 03 Feb 28.10 -0.30
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NSE 05:30 | 01 Jan Scooters India Ltd
OPEN 29.00
PREVIOUS CLOSE 28.40
VOLUME 652
52-Week high 35.95
52-Week low 26.00
P/E 19.65
Mkt Cap.(Rs cr) 245
Buy Price 28.15
Buy Qty 1.00
Sell Price 28.70
Sell Qty 50.00
OPEN 29.00
CLOSE 28.40
VOLUME 652
52-Week high 35.95
52-Week low 26.00
P/E 19.65
Mkt Cap.(Rs cr) 245
Buy Price 28.15
Buy Qty 1.00
Sell Price 28.70
Sell Qty 50.00

Scooters India Ltd. (SCOOTERSINDIA) - Director Report

Company director report

Dear Shareholders

The Board of Directors of your Company is pleased to present the 49th AnnualReport on the business and operations of the Company together with the audited BalanceSheet and statement of Profit and Loss Account and Auditors' Report thereon for financialyear ended 31st March 2021.

1. PRODUCTION REVIEW (Nos.)
Description 2019-20 2020-21
Three Wheeler 3857 11

2 SALES REVIEW

The Sales performance for the year is shown below:

Description 2019-20 2020-21
Physical Financial Physical Financial
(Rs. In lakhs) (Rs. In lakhs)
Three Wheeler 4599 23
6757.21 125.42
Spares 347.72 227.43
Petrol Diesel Lubricants etc. Nil 0.00
Other Operating Revenue 95.72 147.44
Total 7200.65 500.31

3. FINANCIAL REVIEW

The salient features of the Company's financial results for the year under review areas follows:

(Rs. In lakhs)
Description 2019-20 2020-21
a) Profit/Loss before Depreciation Interest Taxes Prior Year Items & Other Income. (1572.96) (5085.99)
b) Profit/Loss before Depreciation Interest Taxes & (1572.96) (5085.99)
Other income
c) PBIDT (1365.54) (4648.00)
d) Profit/(Loss) for the year (1572.51) (4864.63)

During the year under report:

I. Loss before depreciation interest taxes prior year items & other incomeincreased by Rs. 3513.03 lakhs as compared to the previous year.

II. Loss before depreciation interest taxes & other income increased by Rs.3513.03 Lakhs as compared to the previous year.

III. Loss before depreciation interest & taxes increased by Rs. 3282.46 lakhs ascompared to the previous year.

IV. Loss for the year increased by Rs. 3292.12 lakhs as compared to the previous year.

4 CONTRIBUTION TO EXCHEQUER

The company has contributed a sum of Rs. 102.35 lakhs (towards duties & taxes) tothe exchequer during the period under review vis-a-vis Rs. 1110.37 lakhs during previousfinancial year.

5. DIVIDEND

In view of losses the Directors did not recommend final dividend for the FinancialYear 2020-21.

6. TRANSFER TO RESERVES

In view of the losses the Company does not propose to transfer to the general reservesout of the amount available for apportion.

7 ISSUE OF SHARES WITH OR WITHOUT DIFFERENTIAL RIGHT SWEAT EQUITY ESOP:

The Company has not issued any share with differential right sweat equity employeestock option during the year hence not applicable.

8. EXPORT

The export during the year was NIL.

9. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:

Expenditure on account of advertisement and publicity was NIL in the year.

10. STATUS OF REPAYMENT OF LOAN FROM GOI

The Government of India Ministry of Industries & Public Enterprises Department ofHeavy Industry released funds by way of interest free plan loan amounting to Rs. 2000.00lakhs during the financial year 2013-14 for working capital under an approved revivalpackage of Scooters India Limited by Cabinet/ Misc. Application approved by BIFR. As persanction 23.7.2013/BIFR order the loan was repayable in 5 installments commencing from23.7.2016 onwards i.e. 3 years from date of sanctioning i.e. beginning w.e.f. 23.7.2016.In accordance with the Board's decision in their meeting held on 8th April 2016 and in thebackground of letter F.No. 3(15)/2013-PE-VI dated 5th March 2015 the interest on CAPEXfunds temporarily deployed as FDR remitted to Government of India in April 2014 amountingto Rs. 128.11 lakhs was adjusted against the installment of Rs. 400.00 lakhs due on 23rdJuly 2016. Accordingly principal of Rs 1600 lacs is outstanding. The cabinet sanctioned aloan of Rs. 65 crores out of which a loan of Rs 41 crore was disbursed on 28.03.2021 forVRS/VSS scheme of employees and other vendor payments.

11. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED FROM 01.04.2021 TO DATE

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021from DHI the operations of the Company had been stopped and process for closure of SILhas been initiated. In terms of the said communication all regular employees had beenreleased and from 29.04.2021 the regular strength of the Company is NIL. The Company hasceased to be a going concern and necessary steps as per the said communications are beingimplemented.

Global Pandemic - Covid-19

The outbreak of Coronavirus (COVID-19) pandemic globally and in India has causedsignificant disturbance and slowdown of economic activity. In many countries businessesare being forced to cease or limit their operations for long or indefinite periods oftime. Measures taken to contain the spread of the virus including travel bansquarantines social distancing and closures of non-essential services have triggeredsignificant disruptions to businesses worldwide resulting in an economic slowdown. Theworld is in the mid of COVID-19 pandemic and it is yet unclear how it will unfold in nearfuture. The governments across the world are deploying drastic measures such aslockdowns to contain this pandemic.

The economic impact of the 2021 corona virus pandemic in India has been disruptive butthere are signs of improvement as India's growth in the fourth quarter of the fiscal year2021 showed slight pick up as India's economy grew at 1.6% however due to Covid-19 secondwave hitting the economy hard. In the full Fiscal Year the economy shrunk by -7.3% Thecontraction in FY21 GDP is worse in more than 40 Years the government data shows.

For the Company the main focus is ensuring the health and well-being of all employeesand on minimizing disruption to services for all our customers globally. From a highlycentralized model consisting of work spaces set in large delivery campuses capable ofaccommodating thousands of employees the switch to work from home for employees.

This being an unprecedented crisis humankind is facing the full assessment of theimpact on the business will be possible only with the passage of time.

The pandemic Covid-19 has significantly and adversely affected the business sentimentand economy in general. The Company has evaluated the impact of COVID - 19 on thefunctioning of the company till the year end which is insignificant considering theoverall operations of the company for the year and the decision of the Government to closethe company.

12. Management Discussion and Analysis:

Industry structure and development : Automotive industry in India is one of the mainpillars of the economy. With strong backward and forward linkages it is a key driver ofgrowth. Liberalization and conscious policy interventions over the past few years createda vibrant competitive market and brought several new players resulting in capacityexpansion in automobile industry and generation of huge employment. Aptly the sector waschristened as the 'Sunrise Sector' of the economy.

Even before Covid it was clear that real GDP growth was on a downward trend. Then camethe full nationwide lockdown from 25 March 2020 right upto 31 May 2020. GDP growth crashedby 24.4% in April-June 2020 which was the worst quarterly slump ever. July-September 2020also posted a negative GDP growth of 7.3%. Then things slowly began to look up. ForOctober-December 2020 GDP growth swung into the positive zone tiny at 0.4% versus samequarter in the previous year but positive nevertheless. As of now we do not have thedata for January- March 2021 which will be published only at the end of May. However theCentral Statistical Organisation estimates annual GDP growth for FY2021 at (-) 8%.

Three Wheelers

Domestic Sales (In Numbers)

Market Share (In Percentage)

Manufacturers

April-March

April-March

2019-20 2020-21 2019-20 2020-21
Atul Auto Limited 40711 15349 6.39 7.10
Bajaj Auto Ltd 365315 109304 57.34 50.56
Mahindra & Mahindra Ltd 62185 20525 9.76 9.49
Piaggio Vehicles Pvt Ltd 152366 62730 23.92 29.02
Scooters India Ltd 4550 23 0.71 0.01
Force Motors Limited 4 0 0.00 0.00
TVS Motor Company Ltd 11934 8266 1.87 3.82
Total 637065 216197 100.00 100.00

In this financial year the automotive industry is now suffering from excess capacityand suppressed demand leading to lay-offs. Some of the areas causing distress in theautomotive sector are: slowdown in economic growth high cost of vehicle finance highinterest rates high fuel prices high inflation and negative market sentiments increasein the commodity prices high customs duty on Alloy Steel Aluminum Alloy and SecondaryAluminum Alloy.

The Automobile market has witnessed negative trend during the entire financial year.The demand during 2020-21 were low because of several factor like entire supply chainstarted restricting their supplies in view of the BS-VI norms. Electric Vehiclesregistration is a challenge in Passenger segment because of CMVR Rules mandating plying ofcontract carriage three wheelers with permits to be decided by states. The Pandemic alsoplayed a major role in decrease in demand.

MISSION VISION & OBJECTIVE

VISION SIL Vision is to grow as an organization in the field of automobiles with greater emphasis on E- Mobility.
MISSION Our Mission is to strengthen SIL presence in E-Mobility by foraying into Electric Vehicle market and thus to provide cleaner mobility solutions for future generations.

OBJECTIVE

• Design Development and Commercialization of two variants of Electric 3-Wheeler/one variant of BS-VI 3-Wheeler by 2020-21.

• Design Development and Commercialization of two more variants of Electric3-Wheeler/BS-VI 3-Wheeler by 2021-22.

• Consolidation of E-Mobility business and BS-VI 3-Wheelers to make SIL a force ofdomination in 3-Wheeler Industry.

• Creating Niche markets in Electric Vehicle Market.

However as the Department of Heavy Industries in the letter No.3 (1) 2020-PE-VI dated28t January 2021 has ordered for closure of SIL therefore the afore-mentionedobjectives cannot be achieved anymore.

B. MARKET SCENARIO-SEGMENT /PRODUCT WISE PERFORMANCE

I. (i). The total number of 3-Wheelers produced and sold in the domestic market bymanufactures in India during the year 2020-21 as against 2019-20 is given below:

Category

Productions

Segment/ Sub- segment April'19- March'20 April'20-March'21
Passenger Carrier 1016175 259226
Goods Carrier 116807 85993
Total 1132982 345219

Domestic Sales (In Nos.)

Passenger Carrier 526000 134000
Goods Carrier 112000 82000
Total 638000 216000

Note : Scooters India Limited has been a pioneer in bringing out various models of 3-Wheelers running on Diesel Electric LPG and CNG for applications as both passengers andload carrier versions. Company has played an important role in popularization of3-Wheelers of larger capacity in the country. SIL has achieved sales of 4599 nos. in2019-20.This has also resulted in increase the SIL market share from 0.61% in 2018-19 to0.71% in 2019-20.The company continues to be the leader in larger capacity of vehiclesi.e. passenger carrier (6+1) segment and goods carrier exceeding 1 ton of vehicles. Themarket share of company was 100% in 2019-20 (SIL sales 1190 nos. out of 1190 nos.).

i) 3- Wheelers growth drivers in future are as under:

Rapid development of infrastructure and focus of both Central as well as State Govt.on infrastructure mainly on roads the demand of 3- wheeler may see an upward trend incoming years. The demand driver for 3-Wheelers are its affordability as an economicalviable transport solution. However the demand for 3-Wheeler passenger carrier depends onthe availability of permits issued by Local RTO's.

Increased demand from semi urban & rural areas for 3-Wheelers because of itshigh product maneuverability and drivability

Suitability of 3-Wheelers for congested Indian roads and tropical conditions.

Self employment opportunity for a large no of youths especially with the Govt. focuson various schemes for the unemployed youths.

3-Wheelers of smaller capacity are in great demand in load carrier segment becauseof increase in organizing retail marketing across the country which requires faster andeconomical transportation.

C OPPORTUNITIES AND THREATS

C 1 : Strengths

Integrated plant with capability to produce majority of components by exercisingchecks on incoming RM quality and operations.

Induction of new Machinery through CAPEX has improved quality of critical componentsas well as Productivity.

Skilled manpower at reduced cost by re-engaging retired personnels.

Scope of doubling/tripling the production with minimum investment.

Company has the advantage of E-Vehicle experience in late 90's as the automotivemarket is poised for growth in E-Mobility in coming years

C 2 : Weakness

Depleting manpower.

Sourcing of material at economical costs is difficult due to low volumes. This isalso resulting in weak supply chain.

The plant is located far way from automotive hubs like NCR Pune Chennai

Not able to introduce new models/variants due to low volumes of production.

Not having strong "vehicles finance" tie ups.

C 3 : Opportunities

Expected exponential growth in E-Mobility sector

Untapped markets - South East & Exports

Developing hub and spoke transportation model

Increasing allocation of funds for E-Mobility under FAME Schemes

Rapidly growing awareness about vehicular pollution leading to policy formulationfor increase use of alternate fuel vehicles such as Electric Vehicle

Navratna companies like BHEL NTPC have joined hands with SIL to promote E-Mobility.

C 4 : Threats

Implementation of BSVI emission norms w.e.f. 01/04/2020 for which the enginemanufacturer are not ready with their engine and solution.

Lockdown due to COVID-19 pandemic under Disaster Management Act resulting affectedbusiness activities.

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated

Rs 28.01.2021 from DHI the operations of the Company had been stopped and process forclosure of SIL has been initiated.

Growing Electric vehicle market but the allied motor controllers & Li-Ionbattery manufacturing facilities are adversely affected because of Indo-China adverserelation as-well-as Covid-19 scenario.

Increase in product substitution effect by rapidly growing 4 Wheeler SCV Increasedcompetition both from organized and unorganized players. Frequent changes in MarketDynamics Volatility in Raw Materials prices / input and difficulty in passing on costincrease.

D : Future Outlook:

The need for new design features in the existing product combined with improvedquality features demands significant investment in Research & Development and also inplant & machinery. Existing over-lived plant & machinery is an area of concern.

Manpower is a challenge on all fronts. The average age profile of the employees isvery high. The manpower cost in the company is still high because of low volumes. Thecompany needs to reduce its manpower cost even while putting efforts to infuse fresh bloodsimultaneously.

The Automobile Industry as a whole has witnessed negative growth in the past 02financial consecutively. The entire automobile engineering and especially commercialvehicles is facing tough challenge on the front of approaching BS VI implementation. The3-wheelers industry is facing competition from 4- wheelers SCV in 1.0 ton and sub 1.0 toncategory which is expected to aggravate the extremely competitive scenario and impact thevolumes and margins.

Strict regulatory laws combined with restriction on holding release of new passengerpermits shall act as deterrent for company growth.

Employees' aspiration for implementation of 2007 wage and salary revision.

Covid-19 Pandemic situation is still in force. The Country has been under lockdowntill the end of May 20 and still unlock phase is not complete. As a result of businessenvironment as suffered badly because the focus of customers has shifted from buying newgoods to take care of health first safe.

E. Strategic Road Map:

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021from DHI the operations of the Company had been stopped and process for closure of SILhas been initiated. In terms of the said communication all regular employees had beenreleased and from 29.04.2021 the regular strength of the Company is NIL. Earlier theCompany initiated various initiatives to meet the forth coming challenges for BSVIdeadlines with strategic planning of Electric vehicles:

• Type Approval of Vikram 3 Wheeler Electric (6P+D) Passenger and Goods Carrierobtained from ICAT.

• The Type Approved vehicle has successfully qualified for FAME-II criteria ofGovernment which indicate that vehicle is energy efficient.

• Introduction of Vikram Electric 3 Wheeler in (6P+D) (3P+D) Passenger and GoodsCarrier with different makes of Li Ion Battery pack DC Motor & Controller.

• Development of Electric 2 Wheeler with Vijai Super / Lambretta design.

ADEQUACY OF INTERNAL CONTROL:

The Company has proper and adequate system of internal controls to ensure that allactivities are monitored and controlled against any unauthorized use of disposal ofassets and that the transactions are authorized recorded and reported correctly.

The Company ensures adherence to all internal control policies and procedures as wellas compliance with all regulatory guidelines. The Company has in place adequate internalfinancial controls with reference to financial statements. The Statutory Auditors of theCompany tested such controls and no reportable material weakness in the design oroperation was observed.

OPERATIONAL REVIEW vs FINANCIAL REVIEW

During the year under report the company operations reported a decrease in productionnos. as well as revenue from operations and as a result of which the net losses areincreased significantly as compared to previous financial year. The operations of companyremained under stress as vide letter no. F. No. 3(1)/2020- PE-VI dated 28.01.2020 it wascommunicated that CGD Hon'ble Minister (Hi&PE) has given in-principle approval forinitiating the process of closure of SIL and further the company received the letter no.F.No.3(1)/2020-PE-VI dated 28.01.2021 from DHI for closure of the company.

MATERIAL DEVELOPMENTS INHUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT AND NUMBER OF PEOPLEEMPLOYED:

The manpower strength of the Company as on 31 March 2021 was 75 only. In terms of thecommunication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021 from DHI theoperations of the Company had been stopped and process for closure of SIL has beeninitiated. In terms of the said communication all regular employees had been released andfrom 29.04.2021 the regular strength of the Company is NIL.

The Company has put continued efforts to build capabilities for the workforce byadopting specific and targeted interventions for different categories of the work force.The Company conducted several in-house programs at specific locations with both internaland external training program which includes Mergers & Acquisition incl. Disinvestmentcompliances Corporate Governance Financial Management and Decision Making Total QualityManagement Contract Management & Negotiation skills GST Implementation issues &Challenges Cost Optimization in CPSEs IIFRS HR Audit & HR Analytics etc. TheCompany maintained harmonious industrial relation in all unit of the Company during 2020

21. SIGNIFICANT CHANGES IN FINANCIAL RATIOS

[Pursuant to Schedule V(B) to the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015]

Key Financial Ratios for the financial year ended 31st March 2021 along with detailsof significant changes (i.e. change of 25% or more as compared to the immediately previousfinancial year) in key financial ratios and the detailed explanations are providedbelow:

Financial Ratio Standalone Change

Reason for such change
2020-21 2019-20
Operation Profit Margin -1016.57 -21.2331 Due to closure of operations and payment of outstanding dues.
Net Profit Margin -972.32 -21.2270 Due to closure of operations and payment of outstanding dues.

Status before BIFR

On 18th February 2010 BIFR has declared the Company as sick industrial company interms of the provisions of section 3(1)(o) of the Sick Industrial Companies (SpecialProvisions) Act 1985 (SICA) on reference being made after full erosion of the Net- worthof the Company as per annual accounts for the year ended at 31st March 2009.BIFR approved the miscellaneous application filed by the Company for seeking necessarypermission/ appropriate directions for reliefs & concessions enabling issue of sharesrestructuring of balance sheet and for release of funds for capital expenditure andworking capital in line with the cabinet decision for revival of SIL. The DraftRehabilitation Scheme (DRS) was submitted by the Operating Agency (SBI) for submissionwith BIFR. BIFR in its hearing dated15.09.2015 directed that SIL ceases to be a sickindustrial company within the meaning of Section 3(1)(o) of the SICA as its net worth hasturned positive and It is therefore discharged from the purview of SICA/BIFR.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of section 134(3)(c) and 134(5) of the Companies Act2013 your Directors to the best of their knowledge confirm that:

a) in preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards have been followed and that there are no materialdepartures in adoption of these standards.;

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 ended on March 312021 and of the losses of the Company for year ended on that date;

c) they have taken proper and sufficient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing 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 are operating effectively to thebest of their knowledge and ability; and

f) Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and are operating effectively.

14. DIRECTORS KEY MANAGERIAL PERSONNEL APPOINTED AND RESIGNED:

Government of India Ministry of Heavy Industries & Public Enterprises Departmentof Heavy Industry has vide its Order No. F. No.:1(1)/2016-PE-VIdated 26th September 2016appointed Shri Renati Sreenivasulu as Chairman & Managing Director of SIL for theperiod of five years or till the date of his superannuation or until further orderswhichever is earliest. Shri Renati Sreenivasulu has joined as Chairman & ManagingDirector of SIL w.e.f. 06.10.2016. On 25.04.2021 Mr. Rupesh Telang GM BHEL FSIP wasappointed as Chairman & Managing Director of SIL on additional charge basis w.e.f.April 25 2021 for the period of One year vide Govt. of India Ministry of HeavyIndustries & Public Enterprises Department of Heavy Industry New Delhi. vide letterNo. F. No. 3(23)/2012-Pe-VI (Part Il) Dt 23.04.2021. Mr. Renati Sreenivasulu ceases asChairman & Managing Director w.e.f. April 25 2021.

Government of India Ministry of Heavy Industries & Public Enterprises

Department of Heavy Industry has vide its Letter No. F. No.3(4)/2018-PE-VI dated

27.08.2020 appointed during the year Shri Mukesh Kumar as Director Finance (AdditionalCharge) of Scooters India Limited w.e.f.30.08.2020 and cessation of Shri S. Sakthimani asDirector Finance.

During the year there was appointment of Mr. Rama Kant Singh Director DHI as partTime Official on Board of Scooters India Limited in place of Mrs. Ritu Pande Ex-DirectorDHI as per Govt. of India Ministry of Heavy Industries & Public EnterprisesDepartment of Heavy Industry New Delhi vide letter No. F. No.2- 03/2/2017-PE-VI Dtd.10.11.2020.

Government of India Ministry of Heavy Industries & Public Enterprises

Department of Heavy Industry has vide its order No. 3(20)/2013-PE-VI dated 28.01.2020appointed Shri Mahendra Pratap Singh and Smt Rakesh Sharma as an Independent Directors forthe period of three years or till further orders. The Board commends for members approvalfor appointment of Independent Directors at ensuing AGM. Further the Government of IndiaMinistry of Heavy Industries & Public Enterprises Department of Heavy Industry hasvide its order No. 3(20)/2013-PE-VI dated 02.11.2021 appointed Shri Raj Kumar as anIndependent Director for the period of three years or till further orders. The approval ofthe shareholders of the Company is sought by way of special resolution at ensuing AGM.

In accordance with the provisions of Section 152 of the Act read with the Articles ofAssociation of the Company Mr. Rama Kant Singh Director & Mr. S K Singh will retireby rotation at the ensuing AGM and being eligible offer himself for reappointment. TheBoard has recommended his reappointment. The Board commends for his re-appointment.

The Board of Directors of the Company are appointed by the Government of India as perguidelines issued by the Department of Public Enterprises (DPE) Government of India fromtime to time. The remuneration of Managing Director/Whole time Director is fixed as pergrade and other terms and conditions issued by the DPE. The Government Directors on theBoard of the Company draw their remuneration from Government of India and not from theCompany. The independent directors if any are paid the sitting fee only (within thelimits prescribed under the Companies Act)as per Articles of Association besidesreimbursement of the expenses to attend the meeting. No other remuneration is paid to theindependent directors.

During the year Company Secretary and Compliance Officer had resigned and relieved fromthe services w.e.f 01.06.2020. The Company has appointed Mr. Samarth Dave as a CompanySecretary & Compliance Officer w.e.f. July 20 2021.

As regards the appointment and remuneration of Key Managerial Personnel and otheremployees the appointment of all employees below board level is made as per Recruitment&Promotion Rules of the Company and remuneration is paid to them as per DPEguidelines.

The Nomination & Remuneration Committee (NRC) has been constituted. As appointmentsof Directors are made by the Government of India accordingly evaluation of Directors aredone by the Government of India. It may also be noted that Ministry of Corporate Affairsvide notification dated 5th June 2015 has exempted Government Companies from theprovisions of section 178(2) (3) and(4) which requires formulation of criteria fordetermining qualifications positive attributes independence and annual evaluation ofDirectors & Policy relating to remuneration of Directors. Similar exemption isanticipated from SEBI under SEBI LODR. The other matters relating to remuneration if anyare placed to Nomination and Remuneration Committee.

15. NUMBER OF MEETINGS OF THE BOARD

The Board met 07 times during the financial year the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013 andthe Listing Agreement Regulations.

16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Your company is an ISO 9001: 2000 certified which focuses on quality management system.A statement giving details of conservation of energy technology absorption foreignexchange earnings and outgoing accordance with the Section 134(3)(m) of the Companies Act2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is provided at ANNEXURE-11-A and1-B to this report.

17 PARTICULARS OF EMPLOYEES:

Information under Section 197(12) of the Companies Act 2013 read with rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 be treated asNIL as none of the employee of the company is getting salary more than the prescribedlimit.

18. INDUSTRIAL RELATION:-

During the period under review the industrial relations have been by and largesatisfactory however non-regular employee [ATTs/Cont. (JT)] has been protesting hard forsafe guarding their services in closure activity for while Ministry had already providedin principle approval.

19. TRAINING AND DEVELOPMENT

Employees of the Company are the most important constituent and Company understandsthat without their motivation and development the Company cannot progress. The Company hasbeen analyzing developmental needs in technical and managerial areas and provide requisitetraining and exposure to all employees at all

levels in the area on Professional Excellence through motivation etc. employees S weretrained during 01.04.2020 to 31.03.2021 on course of Fire Fighting Vigilance IndustrialSafety & Health Corporate Governance Financial Management and Decision Making TotalQuality Management Contract Management & Negotiation skills GST Implementationissues & Challenges Cost Optimization in CPSEs International Financial ReportingStandards HR Audit & HR Analytics etc.

Programme Details Officers Staffs Workmen Trainees Total
External 29 0 0 01 30
Internal 140 05 37 158 498
Total 169 05 37 159 528

20 VIGILANCE:

Vigilance Group continues to function with particular emphasis on preventive andcorrective vigilance. Strict vigil was exercised over various activities as part ofPreventive Vigilance measures and suggestions were made to the Management for systemimprovement. Company also observed Vigilance Awareness Week from 28th October2020 to 2nd November 2020. During the Vigilance Awareness Week employeesparticipated in various programmes enthusiastically.

21. HUMAN RESOURCE DEVELOPMENT:

Employees of the Company are the most important constituent and Company understandsthat without their motivation and development Company cannot progress. The Company hasbeen analyzing developmental needs in technical and managerial areas and providesrequisite training and exposure to the employees at all levels in the area on ProfessionalExcellence through Motivation Advance Engine Combustion & Diagnostics CompetenceBuilding for Effective Management Healthcare Services Part Programming for CNC MachinesLeadership Strategies for Building Excellence Quest for Excellence Imperatives for IndiaPSUs Health Safety Environment Protection through Legal Reforms & technologicalInnovations Building & Leading Effective Teams Safety Engineering & ManagementValue Based Management Legal framework for Cost Audit Compliances Finance forNon-finance Executives International Commercial Practices Energy Conservation HouseKeeping etc.

22. HINDI IMPLEMENTATION

Official Language Implementation Committee monitors and reviews the progress ofimplementation of the Annual Programme issued by Department of Official Language Ministryof Home Affairs Government of India. Hindi Divas is commemorated every year by observingofficial language week in the month of September. Various competitions are organized foremployees and winners are felicitated on Republic Day.

23. REPRESENTATIVE FOR SCHEDULED CASTES & SCHEDULE TRIBE:

As on 31.03.2021 the total strength of the company is 75 Out of these 23 employeesbelong to Scheduled Castes and 01 employee to Scheduled Tribe.

24. INDEPENDENT DIRECTOR'S DECLARATION

Directors on the Board of the Company are appointed by the Administrative Ministry.Ministry appointed the Independent Directors after several request of SIL. The appointmentof Independent directors made by the Ministry vide its order no. 3(20)/2013/PE-VI dated28.01.2020. During the year two independent director were appointed on the board of theCompany. As per the requirement of section 149(7) the Company has received a declarationfrom every Independent Director that he or she meets the criteria of independence as laiddown under section 149(6) read with rule 5 of the Companies (Appointment and Qualificationof Directors) Rule 2014 and Regulation 25 of the SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015. The Independent Directors of your Companyhave confirmed that (a) they meet the criteria of Independence as prescribed under Section149 of the Act and Regulation 16 of the Listing Regulations 2015 (b) they are not awareof any circumstance or situation which could impair or impact their ability to dischargeduties with an objective independent judgment and without any external influence and (c)they have registered their names in the Independent Directors' Databank. Further in theopinion of the Board the Independent Directors fulfill the conditions prescribed underthe Listing Regulations 2015 and are independent of the management of the Company. TheIndependent Directors meeting was held on financial year 2020-21. The Meeting wasconducted without the presence of the Chairman Executive Directors and any otherManagerial Personnel.

25. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS:

During the year 2019-20 two Independent Directors were appointed on the Board of SILand no re-appointment has been made during the year under report. Hence disclosurepertaining to reappointment of independent directors does not apply.

26. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT &REMUNERATION INCLUDING CRITERIA FORDETERMINING QUALIFICATIONS ATTRIBUTES INDEPENDENCE ETC.:

The Board of Directors of the Company are appointed by the Government of India as perguidelines issued by the Department of Public Enterprises (DPE) Government of India fromtime to time. The remuneration of Managing Director/Whole time Director is fixed as pergrade and other terms and conditions issued by the DPE. The Government Directors on theBoard of the Company draw their remuneration from Government of India and not from theCompany. The independent directors if any are paid the sitting fee only (within thelimits prescribed under the Companies Act) as per Articles of Association besidesreimbursement of the expenses to attend the meeting. No other remuneration is paid to theindependent directors.

As regards the appointment and remuneration of Key Managerial Personnel and otheremployees the appointment of all employees below board level is made as per Recruitment& Promotion Rules of the Company and remuneration is paid to them as per DPEguidelines.

The Nomination & Remuneration Committee (NRC) has been constituted. As appointmentsof Directors are made by the Government of India accordingly evaluation of Directors aredone by the Government of India. It may also be noted that Ministry of Corporate Affairsvide notification dated 5th June 2015 has exempted Government Companies from theprovisions of section 178(2) (3) and (4) which requires formulation of criteria fordetermining qualifications positive attributes independence and annual evaluation ofDirectors & Policy relating to remuneration of Directors. Similar exemption isanticipated from SEBI under SEBI LODR. The other matters relating to remuneration if anyare placed to Nomination s and Remuneration Committee

27. ANNUAL EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEE AND DIRECTORS

The Company enters into MoU with the Administrative Ministry in the month of Marchevery year for the next financial year. Before signing the MoU the targets are negotiatedwith the Company in detail by the MoU Task Force constituted by the DPE. The evaluation ofperformance of the Company against MoU parameter is done by DPE every year and MoU scoreis communicated by it to the Company through the Administrative Ministry.

28. ATTRIBUTES QUALIFICATIONS & INDEPENDENCE OF DIRECTORS AND THEIR APPOINTMENT

Being a Government Company the Non-Executive Directors are drawn from amongst pool ofeminent persons with experience in business/finance/law/public administration andenterprises. The Board Diversity Policy of your Company requires the Board to have balanceof skills experience and diversity of perspectives appropriate to the Company. Theskills expertise and competencies of the Directors as identified by the Board areprovided in the 'Report on Corporate Governance' forming part of the Report and Accounts.The Articles of Association of your Company provide that the strength of the Board shallnot be fewer than three nor more than fifteen. Directors are appointed/re-appointed withthe approval of the Members for a period of three to five years or a shorter duration inaccordance with retirement guidelines and as may be determined by the Board from time totime. All Directors other than Independent Directors and Managing Director are liable toretire by rotation unless otherwise approved by the Members. One-third of the Directorswho are liable to retire by rotation retire every year and are eligible for re-election.

29. BOARD EVALUATION

In keeping with SIL's belief that it is the collective effectiveness of the Board thatimpacts Company's performance the primary evaluation platform is that of collectiveperformance of the Board as a whole. Board performance is assessed against the role andresponsibilities of the Board as provided in the Act and the Listing Regulations 2015 readwith the Company's Governance Policy. The parameters for Board performance evaluation havebeen derived from the Board's core role of trusteeship to protect and enhance shareholdervalue as well as to fulfill expectations of other stakeholders through strategicsupervision of the Company. Evaluation of functioning of Board Committees is based ondiscussions amongst Committee members and shared by the respective Committee Chairman withthe Board. Individual Directors are evaluated in the context of the role played by eachDirector as a member of the Board at its meetings in assisting the Board in realizing itsrole of strategic supervision of the functioning of the Company in pursuit of its purposeand goals. The evaluation of individual Directors was carried out against the laid downparameters anonymously in order to ensure objectivity.

The separate meeting of Independent Directors was held in financial year 2020-21 toreview the performance of then on-Independent Directors and the Board pursuant toSchedule IV to the Act and Regulation 25 of the Listing Regulations 2015.

30. GOING CONCERN STATUS

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021from DHI the operations of the Company had been stopped and process for closure of SILhas been initiated and the Company has ceased to be a going concern and necessary steps asper the said communications are being implemented.

31. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION FROM HOLDING OR SUBSIDIARYCOMPANY:

The Company has no holding or subsidiary company hence not applicable.

32. ADEQUACY OF INTERNAL CONTROL:

The Company has proper and adequate system of internal controls to ensure that allactivities are monitored and controlled against any unauthorized use of disposal ofassets and that the transactions are authorized recorded and reported correctly.

The Company ensures adherence to all internal control policies and procedures as wellas compliance with all regulatory guidelines. The Company has in place adequate internalfinancial controls with reference to financial statements. The Statutory Auditors of theCompany tested such controls and no reportable material weakness in the design oroperation was observed.

(i) Reporting of Fraud

There was no instance of fraud during the year under review which require theStatutory Auditor to report to the Audit Committee / and or Board under section 143(12) ofthe Act and rules made thereunder.

33. FIXED DEPOSITS

The Company has not accepted any deposits under the provisions of the Companies Act2013 during the year.

34. AUDITORS'REPORT

M/s Asija & Associates LLP were appointed as Statutory Auditor of the Company byComptroller & Auditor General of India for the financial year 2020-21.

The Statutory Auditors' Report on the accounts of the Company for the financial yearended 31st March 2021 are enclosed at ANNEXURE-2.

The Accounts of the Company were submitted to the Comptroller and Auditor General ofIndia for their report under section 143(5) of the Companies Act 2013 and their report isappended as ANNEXURE-3.

The management replies to the comments made by Auditors are placed at Annexure - 3A.

35. STATUTORY AUDITOR

Comptroller and Auditor General of India has appointed Asija & Associates LLP asstatutory Auditor of the Company for the year 2021-22.

36. CORPORATE GOVERNANCE:

Your Company is in compliance with all the applicable provisions of CorporateGovernance as stipulated under Chapter IV of the Listing Regulations. A detailed report onCorporate Governance as required under the Listing Regulations is provided in a separatesection and forms part of the Annual Report.

A Certificate from M/s Amit Gupta & Associates Company Secretaries regardingcompliance of conditions of Corporate Governance as stipulated under regulation 34(3) ofthe SEBI Listing regulations 2015 along with the report on Corporate Governance isattached as Annexure - 4 & 4A to this report.

37. SECRETARIALAUDITOR:

M/s Amit Gupta & Associates Practicing Company Secretaries were appointed assecretarial auditors of the Company for the year 2020-21 as required under Section 204 ofthe Companies Act 2013 and Rules made there under. The secretarial audit report in FormMR-3 for FY 2020-21 forms part of the Directors Report and is placed at ANNEXURE-5.Regarding comments/qualifications in the said report it is submitted that the Company hastaken up matter regarding appointment of Independent Directors/women Director with DHI andwith the said appointments the Board has became duly constituted in accordance with theprovisions of the Companies Act 2013 & Listing agreement-Regulations and necessarycompliances regarding constitution of various Committees viz. Audit Committee Nomination& Remuneration Committee etc. has also be made. Further the Company is in process offiling of necessary returns with the Registrar of Companies Kanpur.

38. SECRETARIALSTANDARDS

The Directors state that applicable Secretarial Standards i.e. SS-1and SS-2 relatingto' Meetings of the Board of Directors' and' General Meetings' respectively have beenduly followed.

39. SIGNIFICANT AND MATERIAL ORDERS

In terms of the communication vide letter no. F. No. 3(1)/2020-PE-VI dated 28.01.2021from DHI the operations of the Company had been stopped and process for closure of SILhas been initiated and the Company has ceased to be a going concern and necessary steps asper the said communications are being implemented. There are no other significant andmaterial orders passed by the regulators or courts or tribunals impacting the goingconcern status and the Company's operations in future.

40. AUDIT COMMITTEE AND VIGIL MECHANISM

In view of appointment of Independent Directors by GOI the Company is having AuditCommittee pursuant to requirement of section 177(1) of Companies Act 2013 read with Rule6 of the Companies (Meeting of Board and its Powers) Rules 2014 and Regulation18 of theSEBI Listing Regulations 2015 & erstwhile clause 49 of Listing Agreement.

The Vigil Mechanism of the Company which also incorporates a Whistle Blower Policy interms of the Listing Agreement may be accessed on the Company's website at the link:http://www.scootersindia.com. The policy includes appointment of a Whistle Officer whowill look into the matter conduct detailed investigation and take appropriatedisciplinary action. Protected disclosures can be made by a whistle blower through ane-mail or dedicated telephone line or a letter to the Whistle Blower Officer. During theyear under review no employee was denied access to Whistle Blower Officer.

41. WEB-LINK OF ANNUAL RETURN:

The Annual Return of your Company is available on its corporate website atwww.scootersindia.com.

42. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHERDISCLOSURES

During the year the remuneration of Chairman & Managing Director was Rs. 24.76lakhs and median employee's remuneration was Rs. 7.78 lakhs. The Chairman & ManagingDirector remuneration comes to 314.52% of median employees' remuneration. (ANNEXURE-8).

43. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

As per the requirement of section 186(4) of Companies Act 2013 particulars of loansgiven investments made guarantees given or securities provided along with the purposefor which the loan or guarantee or security is proposed to be utilized by the recipientare provided in the financial statements on page number 71. The Company is in compliancewith the limits as prescribed under Section 186 of Companies Act 2013 read with rule11 ofthe Companies (Meeting of Board and its Powers) Rules 2014.

44. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE 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.

Particulars of contracts or arrangements with related parties referred to in section188(1) of the Companies Act 2013 as required under section 134(3)(h) of the Act read withRule 8(2) of the Companies (Accounts) Rules 2014 are presented in Annexure-9 to theDirectors' Report in Form AOC 2.

The Board has adopted a Policy for dealing with Related Party Transaction. The Policyas approved by the Board may be viewed on the Company website at theweblink:www.scootersindia.com.

45. RISK MANAGEMENT:

SIL aims to have a formalized and systematic approach for managing risks across theCompany. It encourages knowledge and experience sharing in order to increase transparencyon the key risks to the Company to the extent possible. This approach increases riskawareness and ensures proper management of risks as part of the daily managementactivities.

The policy on Risk Management may be accessed on the Company's website at the link:http//www.scootersindia.com.The objective of the Company's risk management process is tosupport a structured and consistent approach to identify prioritize manage monitor andreport on the principal risks and uncertainties that can impact its ability to achieve itsstrategic objectives. The Company has introduced several initiatives for risk managementincluding the introduction of audit functions and processes to identify and createawareness of risks optimal risk mitigation and efficient management of internal controland assurance activities.

46. LISTING:

The Company is listed at BSE Limited and has connectivity from both National SecuritiesDepository Limited (NSDL) & Central Depository Services Limited (CDSL). Delhi StockExchange Limited Delhi has been de-recognized by SEBI vide its order dated November 192014.The Company has paid due listing fees with the stock exchange.

47. CORPORATE SOCIAL RESPONSIBILITY:

SIL strongly believes in concept of sustainable development and is committed to operateand grow its operations in a socially and environmentally responsible way. As per theCompanies Act 2013 all companies with a net worth of Rs. 500 crore or more or turnoverof Rs.1000 crore or more or a net profit of Rs.5 crore or more during any financial yearare required to constitute a Corporate Social Responsibility (CSR) committee of the Boardof Directors comprising of three or more directors at least one of whom should be anindependent director and such company shall spend at least 2%of the average net profits ofthe company's immediately preceding three financial years on CSR activities. In view oflosses the Company has ceased to fall in the requirement of doing CSR.

48. VIGILANCE CASES:

In pursuance of Order No. F.No.26(1)/2016PE-VI dated January 24 2018 issued byMinistry of Ministry of Heavy Industries & Public Enterprises; Department of HeavyIndustries Committee recommends including vigilance cases during the year. The Report isas follows:

During 2020-21no complaints related to procurement and corruptions were investigatedby Vigilance Department hence no complaints related to procurement and corruptions wereinvestigated by Vigilance Department is NIL as on 31.03.2021.

RIGHT TO INFORMATION CASES:

In pursuance of Order No.F.No.26(1)/2016PE-VI dated January 24 2018 issued by Ministryof Ministry of Heavy Industries & Public Enterprises; Department of Heavy IndustriesCommittee recommends including RTI matters during the year. The Report is as follows:

RTI CASES STATUS FOR FY 2020-21

Application Received in FY 2020-21 No. of cases transferred to other Public Authorities Decisions where request/ appeals rejected* Decisions where request/ appeals accepted Cases Disposed off in FY 2019-20 Cases Pending
Requests 7 NIL NIL 7 32 NIL
First Appeal 3 NIL NIL 3 0 NIL
Second Appeal NIL NIL NIL NIL NIL NIL

49. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITIONAND REDRESSAL)ACT2013

TheCompany'shasalwayshadaverystrictpolicyonthesexualharassmentissues and has zerotolerance in this matter. Ensuring a safe environment for its women employees is a majorpriority for the Company and its management. The Company has complied with provisionsrelating to the constitution of Internal Complaints Committee under Sexual harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013.It has formed anInternal Compliant Committee (ICC) to deal with all the matters or matters incidentalthereof. In your Company's legacy of more than 40 years no instance of sexual harassmenthas ever been reported by any employee. During the year 2020-21 also the Company has notreceived any complaints of sexual harassment.

50. GENERAL

Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview:

Details relating to deposits covered under Chapter V of the Act.

Issue of equity shares with differential rights as to dividend voting or otherwise.

Issue of shares (including sweat equity shares) to employees of the Company underany scheme including Employees Stock Options Plan.

The Company does not have any scheme of provision of money for the purchase of itsown shares by employees or by trustees for the benefit of employees.

Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company' operations in future.

No fraud has been reported by the Auditors to the Audit Committee or the Board.

There are no details of application made or any proceeding pending under theInsolvency and Bankruptcy Code 2016 during the year along with their status as at the endof the financial year as no such proceedings initiated or pending.

The details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof are not required as there was no instance ofonetime settlement with any Bank or Financial Institution.

52 FORWARD-LOOKINGSTATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties.When used in this Report the words 'anticipate'' believe' 'estimate'' expect' 'intend''ill' and other similar expressions as they relate to the Company and/or its Businesses areintended to identify such forward-looking statements. The Company undertakes no obligationto publicly update or revise any forward-looking statements whether as a result of newinformation future events or otherwise. Actual results performances or achievementscould differ materially from those expressed or implied in such forward- lookingstatements. Readers are cautioned not to place undue reliance on these forward-lookingstatements that speak only as of their dates. This Report should be read in conjunctionwith the financial statements included herein and the notes thereto.

53. ACKNOWLEDGEMENT:

The Board of Directors would like to express their grateful appreciation for thesincere support and co-operation extended by its Bankers Financial Institutions Dealersand Suppliers. The Directors would also like to express their sincere thanks for the co-operation and advice received from Govt. of India particularly Department of HeavyIndustry and Public Enterprises BIFR BRPSE the State Govt. and the local authoritiesfor their continued support co-operation and guidance.

Your Directors wish to place on record their deep sense of appreciation for the devotedservices of employees and are deeply grateful to the shareholders for reposing theconfidence and faith in us.

By the order of Board of Directors
Sd/-
Rupesh Telang DIN:09218342
Chairman & Managing Director
Scooters India Limited
Lucknow-226008
Place :Lucknow
Date : 12.11.2021

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