The Board of Directors of your Company is pleased to present the 48th Annual Report onthe business and operations of the Company together with the audited Balance Sheet andstatement of Profit and Loss Account and Auditors' Report thereon for financial year ended
31 March 2020.
1. PRODUCTION REVIEW
|Description || ||2018-19 || ||2019-20 |
|ThreeWheeler || ||4703 || ||3857 |
|2. SALESREVIEW || || || || |
|The Sales performance for the year is shown below: || || || || |
|Description || ||2018-19 || ||2019-20 |
| ||Physical ||Financial ||Physical ||Financial |
| || ||(` In lakhs) || ||(` In lakhs) |
|Three Wheeler ||4252 ||6196.53 ||4599 ||6757.21 |
|Spares || ||185.67 || ||347.72 |
|Petrol Diesel Lubricants etc. || ||Nil || ||Nil |
|Other Operating Revenue || ||3.00 || ||95.72 |
|Total || ||6385.20 || ||7200.65 |
3. FINANCIAL REVIEW
The salient features of the Company's financial results for the year under review areas follows: (` In lakhs)
|Description ||2018-19 ||2019-20 |
|a) Profit/Loss before Depreciation Interest ||(484.48) ||(1572.96) |
|Taxes Prior Year Items & Other Income. || || |
|b) Profit/Loss before Depreciation Interest ||(484.48) ||(1572.96) |
|Taxes & Other income || || |
|c) PBIDT ||(269.96) ||(1365.54) |
|d) Profit/(Loss) for the year ||(463.26) ||(1572.51) |
During the year under report:
I. Loss before depreciation interest taxes prior year items & other incomeincreased by
Rs.1088.48 lakhs as compared to the previous year.
II. Loss before depreciation interest taxes & other income increased by Rs.1088.48
Lakhs as compared to the previous year.
III. Loss before depreciation interest & taxes increased by Rs. 1095.58 lakhs ascompared to the previous year.
IV. Loss for the year increased by Rs.1091.87 lakhs as compared to the previous year.
The company has contributed a sum of Rs.1110.37 lakhs (towards duties & taxes) tothe exchequer during the period under review vis--vis Rs. 684.93 lakhs during previousfinancial year.
In view of losses the Directors did not recommend final dividend for the FinancialYear 2019-20.
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 RIGHTS WE AT EQUITY ESOP:
The Company has not issued any share with differential right sweat equity employeestock option during the year hence not applicable.
The company has exported 04 truck loads of vehicles to Nepal in 2019-20. Another lotcould have been dispatched but because of Covid 19 Lockdown the same could not bematerialized.
9. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:
An expenditure of Rs.188.56 Lakhs was incurred on account of advertisement andpublicity 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.
11. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL
POSITION OF THE COMPANY WHICH HAVE OCCURRED FROM 01.04.2020 TO DATE
No material change and commitment have been made by the company from 01.04.2020 to datethat has adverse effect on the financial position.
Global Pandemic - Covid-19
The outbreak of Corona virus (COVID-19) pandemic globally and in India is causingsignificant 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 2020 corona virus pandemicin India has been largely disruptive. India's growth in the fourth quarter of the fiscalyear 2020 went down to 3.1% according to the Ministry of Statistics. The Chief EconomicAdviser to the Government of India said that this drop is mainly due to the corona viruspandemic effect on the Indian economy. Notably India had also been witnessing apre-pandemic slowdown and according to the World Bank the current pandemic has"magnified pre-existing risks to India's economic outlook".
For the Company the focus immediately shifted to ensuring the health and well-being ofall employees and on minimizing disruption to services for all our customers globally.From a highly centralized model consisting of work spaces set in large delivery campusescapable of accommodating thousands of employees the switch to work from home foremployees.
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.
12 Management Discussion and Analysis:
Industry structure and development :
Automotive industry in India is one of the main pillars of the economy. With strongbackward and forward linkages it is a key driver of growth. Liberalization and consciouspolicy interventions over the past few years created a vibrant competitive market andbrought several new players resulting in capacity expansion in automobile industry andgeneration of huge employment. Aptly the sector was christened as the 'Sunrise Sector' ofthe economy.
The contribution of this sector to the National GDP rose from 2.77% in 1992-93 to about7.1% now. It provides direct and indirect employment to over 19 million people. India isfast turning into a global automotive hub. For the last two financial years incontinuation the 3-wheeler industry has gone up ward.
|Manufacturers || |
Domestic Sales (In Numbers)
Market Share (In Percentage)
| || |
| ||2018-19 ||2019-20 ||2018-19 ||2019-20 |
|Atul Auto Limited ||44513 ||40711 ||6.35 ||6.40 |
|Bajaj Auto Ltd ||398825 ||364817 ||56.89 ||57.31 |
|Mahindra & Mahindra Ltd ||66140 ||58145 ||9.44 ||9.13 |
|Mahindra Electric Mobility Ltd ||559 ||4042 ||0.08 ||0.63 |
|Piaggio Vehicles Pvt Ltd ||169970 ||152366 ||24.25 ||23.94 |
|Scooters India Ltd ||4288 ||4550 ||0.61 ||0.71 |
|TVS Motor Company Ltd ||16709 ||11934 ||2.38 ||1.87 |
|Total ||701005 ||636569 ||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 Aluminium Alloy and SecondaryAluminium Alloy.
The Automobile market has witnessed negative trend during the entire financial year.The demand during 2019-20 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.
MISSION VISION & OBJECTIVE
VISION SIL Vision is to grow as an organization in the field of automobiles withgreater emphasis on E- Mobility.
MISSION Our Mission is to strengthen SIL presence in E-Mobility by foraying intoElectric Vehicle market and thus to provide cleaner mobility solutions for futuregenerations.
? Design Development and Commercialization of two variants of Electric 3-Wheeler/ onevariant 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 market sin Electric Vehicle Market.
B. MARKET SCENARIO-SEGMENT /PRODUCT WISE PERFORMANCE
I. (i) The total number of 3-Wheelers produced and sold in the domestic market bymanufacture sin India during the year 2019-20 as against 2018-19 is given below:
|Category ||Productions || |
|Segment/ Sub- segment ||April'18- March'19 ||April'19-March'20 |
|Passenger Carrier ||1132700 ||1017051 |
|Goods Carrier ||136023 ||116807 |
|Total ||1268723 ||1133858 |
| ||Domestic Sales (In Nos.) || |
|Passenger Carrier ||572392 ||525015 |
|Goods Carrier ||128619 ||111554 |
|Total ||707011 ||636569 |
Note : Sales excluding Export of 567683 nos. in 2018-19 and 502169 nos. in 2019-20.
Scooters India Limited has been a pioneer in bringing out various models of 3-Wheelersrunning on Diesel Electric LPG and CNG for applications as both passengers and loadcarrier versions. Company has played an important role in popularization of 3-Wheelers oflarger capacity in the country. SIL has achieved sales of 4599 nos. in 2019-20. This hasalso resulted in increase the SIL market share from 0.61% in 2018-19 to 0.71% in 2019-20.
The company continues to be the leader in larger capacity of vehicles i.e. passengercarrier (6+1) segment and goods carrier exceeding 1 ton of vehicles. The market share ofcompany was100%in2019-20 (SIL sales 1190 nos. out of 1190 nos.). i) 3- Wheelers growthdrivers in future are as under: Rapid development of infrastructure and focus of bothCentral as well as State Govt. on infrastructure mainly on roads the demand of 3- wheelermay see an upward trend in coming years. The demand driver for 3-Wheelers are its affordability as an economical viable transport solution. How ever the demand for 3-Wheelerpassenger carrier depends on the availability of permits issued by Local RTO's.
Increased demand from semiurban & rural areas for 3-Wheelers because of its highproduct maneuverability and drivability Suitability of 3-Wheelers for congested Indianroad sand tropical conditions.
Self employment opportunity for a large no of youths especially with the Govt. focuson various schemes for the unemployed youths.
3-Wheelersofsmallercapacityareingreatdemandinloadcarriersegment because of increasein organizing retail marketing across the country which requires faster and economicaltransportation.
C OPPORTUNITIESANDTHREATS 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 ofdoubling/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
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 Notable to introduce new models/variants due to low volumes of production. Not havingstrong "vehicles finance" tieups.
C 3 : Opportunities
Expected exponential growth in E-Mobility sector Untapped markets-South East& Exports Developing huband 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 companieslike BHEL NTPC have joined hands with SIL to promote E-Mobility .
C 4 : Threats
Implementation of BSVIe mission norms w.e.f. 01/04/2020 for which the enginemanufacturer are not ready with their engine and solution.
In the last month of FY 2020 GOI notified implementation of countrywide lockdowndue to COVID-19 pandemic under Disaster Management Act resulting affected businessactivities. Growing Electric vehicle market but the allied motor controllers &LiIon battery manufacturing facilities are adversely affected because of Indo-Chinaadverse relation as-well-as Covid-19 scenario. Increase in product substitution effectby rapidly growing 4 Wheeler SCV Increased competition both from organized and unorganizedplayers. Frequent changes in Market Dynamics Volatility in Raw Materials prices / inputand difficulty in passing on cost increase.
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 is veryhigh. The manpower cost in the company is still high because of low volumes. The companyneeds 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 1.0toncategory which is expected to aggravate the extremely competitives cenario 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:
Although there are several challenges faced by commercial vehicle segment andautomobile industry in country the performance of your company has improved consider ablyin comparison to the previous year because of increased production and sales. Your companyhave already initiated various initiatives to meet the forth coming challenges for BSVIdead lines with strategic planning of Electric vehicles: Type Approval of Vikram 3Wheeler Electric (6P+D) Passenger and Goods Carrier obtained from ICAT.
The Type Approved vehicle has successfully qualified for FAME-II criteria ofGovernment which indicate that vehicle is energy efficient. Introduction of VikramElectric 3 Wheeler in (6P+D) (3P+D) Passenger and Goods Carrier with different makes ofLiIon Battery pack DC Motor & Controller is under way. Development of Electric 2Wheeler with Vijai Super/Lambretta design is under process.
Working on E-Bus E-Bicycle E-4 wheeler is under way.
In long term it is planned to introduce electric Passenger/Load Carrier vehicleswith Li-Ion Battery and AC Motor.
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 transaction sare 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 an increase in productionnos. as well as revenue from operations and as a result of which the net losses areminimized significantly as compared to previous financial year. The operations of companyremained under stress for following reasons :
a) The company received the letter no. F.No.3(1)/2020-PE-VI dated 28.01.2020 from DHIwherein it was intended for closure of SIL in principle. As are sult of this allstakeholders of company started exercising restraints in business relations with SILsensing following apprehensions: Dealers & Customers: Dealers reported thatcustomers have started refraining from buying SIL 3 wheelers perceiving future servicecredibility issues like Warranty/ Free services & supply of Spare Parts.
Vendors : All vendors supplying material to company started restricting theirsupplies & credit exposure. Most vendors changed their payment terms from Credit toadvance.
Financial Institutions: All Banks & Financial institutions restricted themselvesfor extending Cash Credit Over Draf to rany other operational Credit to SIL. b) As perGovernment of India plan BS-IV norms were valid up to 31.03.2020 only as are result ofwhich the entire supply chain as-well-as customer started restricting both supply ofcomponents as-well-as new purchases considering the fact that their inventory should notbe blocked. Further Covid-19 has worsened the situation.Duetotheabovechangetheoperationsduringthecurrentyear2020 are also under stress.
MATERIAL DEVELOPMENTS INHUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT AND NUMBER OF PEOPLEEMPLOYED:
The man powers trength of the Company as on 31 March 2020 was 579 no. including regularand non-regular employees. Only 93no. of employees are regular includingOfficers/staff's/Workmen.
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. Disinvestment compliances Corporate Governance Financial Management and Decision MakingTotal Quality Management Contract Management & Negotiation skills GST Implementationissues & Challenges Cost Optimization in CPSEs IIFRS HR Audit & HR Analyticsetc The Company maintained harmonious industrial relation in all unit of the Companyduring 2019-20.
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 2020 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:
|FinancialRatio || |
|Change ||Reason for such change |
| ||2019-20 ||2018-19 || || |
|Operation Profit Margin ||-21.2331 ||-0.10615 ||-21.13 ||Due to Increase in Sales of three wheeler |
|Net Profit Margin ||-21.2270 ||-0.07019 ||-21.16 ||Due to Increase in Sales of three wheeler |
Status before BIFR
On18th February2010 BIFR has declared the Company as sick industrial company in termsof the provisions of section 3(1)(o) of the Sick Industrial Companies (Special Provisions)Act1985 (SICA) on reference being made after full erosion of the Net- worth of theCompany st as per annual accounts for they ear ended at 31 March 2009. BIFR approved themiscellaneous application filed by the Company for seeking necessarypermission/appropriated rections 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 dated 15.09.2015 directed that SIL ceases to be a sickindustrial company with in them eaning of Section 3(1)(o) of the SIC Aasits 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 2020 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 reason able and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year ended onMarch 312020 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 in ternal 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-VI dated 26th September 2016appointed Shri Renati Sreenivasulu as Chairman & Managing Director of SIL for theperiod of five years or till the date of his super annuation or until further orderswhichever is earliest. Shri Renati Sreenivasulu has joined as Chairman & ManagingDirector of SIL w.e.f. 06.10.2016. Mr. Sakthimani Seshamani has been appointed as aDirector (Finance) of Scooters India Limited on additional charge basis w.e.f. 30.05.2018in terms of Letter no. F.No.3 (4)/2018-PE-VI dated 30th May 2018 issued by Govt. of IndiaMinistry of Heavy Industries & Public Enterprises Department of Heavy Industry NewDelhi. The appointment was made for the period of three months however was extended fromtime to time.
Government of India Ministry of Heavy Industries & Public Enterprises Departmentof Heavy Industry has vide its order No. 3(20)/2013-PE-VI dated 28.01.2020 appointed ShriMahendra Pratap Singh and Smt Rakesh Sharma as an Independent Directors for the period ofthree years or till further orders. The Board commends for members approval forappointment of Independent Directors at ensuing AGM. In accordance with the provisions ofSection 152 of the Act read with the Articles of Association of the Company Mr. RenatiSreenivasulu Director will retire by rotation at the ensuing AGM and being eligibleoffer himself for reappointment. The Board has recommended his reappointment. The Boardcommends for his re-appointment. The Board of Directors of the Company are appointed bythe Government of India as per guidelines issued by the Department of Public Enterprises(DPE) Government of India from time to time. There muneration of Managing Director/Wholetime Directoris fixed as per grade and other terms and conditions issued by the DPE. TheGovernment Directors on the Board of the Company draw their remuneration from Governmentof India and not from the Company. The independent directors if any are paid the sittingfee only (with in the limits prescribed under the Companies Act) as per Articles ofAssociation besides reimbursement of the expenses to attend theme eting. No otherremuneration is paid to the independent 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 and Remuneration Committee.
15. NUMBER OF MEETINGS OF THE BOARD
The Board met 06 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 earning sand out going accordance with the Section134(3)(m) of the CompaniesAct2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is provided at ANNEXURE-11-Aand1-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 area sand provider equisitetraining and exposure to all employees at all levels in the area on ProfessionalExcellence through motivation etc. employees were trained during 01.04.2019 to 31.03.2020on course of Fire Fighting Vigilance Industrial Safety & Health CorporateGovernance Financial Management and Decision Making Total Quality Management ContractManagement & Negotiation skills GST Implementation issues & Challenges CostOptimization in CPSEs International Financial Reporting Standards HR Audit & HRAnalytics 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 |
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 the systemimprovement. Company also observed Vigilance Awareness Week from 28 nd October 2019 to 2November 2019. During the Vigilance Awareness Week employees participated in variousprogrammes 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 Health care Services Part Programming for CNCMachines Leadership Strategies for Building Excellence Quest for Excellence Imperativesfor India PSUs Health Safety Environment Protection through Legal Reforms &technological Innovations Building & Leading Effective Teams Safety Engineering& Management Value Based Management Legal frame work for Cost Audit CompliancesFinance for Non-finance Executives International Commercial Practices EnergyConservation House Keeping 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 31.03.2020 the total strength of the company is 93 Out of these 22 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 declaration fromevery Independent Director that he or she meets the criteria of independence as laid downunder section 149(6) read with rule 5 of the Companies (Appointment and Qualification ofDirectors) Rule 2014 and Regulation 25 of the SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015. The Independent Directors of your Company have confirmedthat
(a) they meet the criteria of Independence as prescribed under Section 149 of the Actand Regulation 16 of the Listing Regulations 2015
(b) they are not aware of any circumstance or situation which could impair or impacttheir ability to discharge duties with an objective independent judgement and without anyexternal influence and
(c) they have registered their names in the Independent Directors' Databank. Furtherin the opinion of the Board the Independent Directors fulfil the conditions prescribedunder the Listing Regulations 2015 and are independent of the management of the Company.The Independent 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 two Independent Directors were appointed on the Board of SIL .Hencedisclosure pertaining to reappointment of independent directors does not apply.
26. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION
INCLUDING CRITERIA FOR DETERMINING 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. There muneration 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 and Remuneration Committee
27. ANNUAL EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEE AND
The Company enters in to 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
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 'Reporton 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 trustees hip 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 an any mously in order to ensure objectivity.
As appointment of Independent Directors by DHI was made almost at end of the financialyear the exclusive meeting of Independent Directors was held in financial year 2020-21 toreview the performance of the non-Independent Directors and the Board pursuant toSchedule IV to the Act and Regulation 25 of the Listing Regulations 2015.
30. GOING CONCERN STATUS
There is no significant or material order passed during the year by any regulatorcourt or tribunal impacting the going concern status of the Company or its futureoperations.
31. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION FROM
HOLDING OR SUBSIDIARY COMPANY:
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. TheCompany ensures adherence to all internal control policies and procedures as well ascompliance 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 section143(12) ofthe Act and rules made there under.
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 have been appointed as Statutory Auditor of the Companyby Comptroller & Auditor General of India on 31.07.2019. The Statutory Auditors'Report on the accounts of the Company for the financial year stended 31 March 2020 areenclosed at ANNEXURE-2. The Accounts of the Company were submitted to theComptroller and Auditor General of India for their report under section 143(5) of theCompanies Act 2013 and their report is appended as ANNEXURE-3.The managementreplies 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 2019-20.
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 Bhavya Taneja & 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. SECRETARIAL AUDITOR:
M/s Amit Gupta & Associates Practicing Company Secretaries were appointed assecretarial auditors of the Company for the year 2019-20 as required under Section 204 ofthe Companies Act 2013 and Rules made there under. The secretarial audit report in FormMR-3 for FY2019-20 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. SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and' General Meetings' respectively have beenduly followed.
39. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunal simpacting the going concern status and the Company's operations in future.
40. AUDIT COMMITTEE AND VIGILMECHANISM
In view of appointment of Independent Directors by GOI the Company is having AuditCommittee pursuant to requirement of section177(1) of Companies Act 2013 read with Rule 6of the Companies (Meeting of Board and its Powers) Rules 2014 and Regulation 18 of theSEBI Listing Regulations 2015 & erst while 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. EXTRACT OF ANNUAL RETURN:
Pursuant to Section 92(3) of the Act and Rule12(1) of the Companies (Management andAdministration) Rules 2014 the extract of the Annual Return in the prescribed formi.e.Form MGT-9 is annexed herewith as Extract of Annual Return of the Company is annexedhere with as ANNEXURE-7 to this report.
42. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES'
REMUNERATION AND OTHER DISCLOSURES
During the year the remuneration of Chairman & Managing Director was Rs.26.64lakhs and median employee's remuneration was Rs. 6.71 lakhs. The Chairman & ManagingDirector remuneration comes to 370.64% 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 recipientareprovided in the financial statements on page number 71. The Company is incompliance withthe limits as prescribed under Section 186 of Companies Act 2013 read with rule 11 of theCompanies (Meeting of Board and its Powers) Rules 2014.
44. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED
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 section
188(1)of the Companies Act 2013 as required undersection134(3)(h)of the Act read withRule 8(2) of the Companies (Accounts) Rules 2014 are presented in Annexure-9 tothe Directors' Report in Form AOC2.
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.Theobjective of the Company's risk management process is to support a structured andconsistent approach to identify prioritize manage monitor and report on the principalrisks and uncertainties that can impact its ability to achieve its strategic objectives.The Company has introduced several initiatives for risk management including theintroduction of audit functions and processes to identify and create awareness of risksoptimal risk mitigation and efficient management of internal control and assuranceactivities.
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 the Companies Act 2013 all companies with a net worth of Rs. 500 crore ormore or turn over of Rs.1000 crore or more or a net profit of Rs.5 crore or more duringany financial year are required to constitute a Corporate Social Responsibility (CSR)committee of the Board of Directors comprising of three or more directors at least one ofwhom should be an independent director and such company shall spend at least 2% of theaverage net profits of the company's immediately preceding three financial years on CSRactivities. In view of losses the Company has ceased to fall in the requirement of doingCSR.
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 2019-20 8 (Eight) complaints related to procurement and corruptions wereinvestigated by Vigilance Department out of which 5 (five) complaints related toprocurement were carried to a logical conclusion and appropriate disciplinary decision hasbeen taken. The remaining 3 (three) related to procurement and corruptions were undervarious stages of investigation as on 31.03.2020.
49. RIGHT TO INFORMATION CASES:
In pursuance of Order No. F.No.26(1)/2016PE-VI dated January 242018 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 2018-19
| ||Application Received in FY 2019-20 ||No. of cases transferred to other Public Authorities ||Decisions where request/ appeals rejected* ||Decisions where request/ appeals accepted ||Cases Disposed off in FY 2018-19 ||Cases Pending |
|Requests ||32 ||NIL ||02 ||30 ||30 ||NIL |
|First Appeal ||0 ||NIL ||NIL ||0 ||0 ||NIL |
|Second Appeal ||NIL ||NIL ||NIL ||NIL ||NIL ||NIL |
50. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company's has always had a very strict policy on the sexual harassment issues andhas zero tolerance in this matter. Ensuring a safe environment for its women employees isa major priority for the Company and its management. The Company has complied withprovisions relating to the constitution of Internal Complaints Committee under Sexualharassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. It hasformed an Internal Compliant Committee (ICC) to deal with all the matters or mattersincidental thereof. In your Company's legacy of more than 40 years no instance of sexualharassment has ever been reported by any employee. During the year 2019-20 the Company hasreceive one complaint which is under investigation.
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: l Details relating to deposits covered under Chapter V of the Act. l Issue ofequity shares with differential rights as to dividend voting or otherwise. l Issue ofshares (including sweat equity shares) to employees of the Company under any schemeincluding Employees Stock Options Plan. l The Company does not have any scheme ofprovision of money for the purchase of its own shares by employees or by trustees for thebenefit of employees. l Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
l No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company' operations in future. l Nofraud has been reported by the Auditors to the Audit Committee or the Board.
This Report contains forward-looking statements that involve risks and un certaities.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.
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-operationandadvicereceivedfromGovt.ofIndiaparticularlyDepartmentofHeavy Industry andPublic Enterprises BIFR BRPSE the State Govt. and the local authorities for theircontinued support co-operation and guidance.
Your Directors wish to place on record their deep sense of appreciation fort he devotedservices of employees and are deeply grateful to the shareholders for reposing theconfidence and faithinus.
| ||By the order of Board of Directors |
| ||Sd/- Renati Sreenivasulu |
| ||DIN : 07634253 |
| ||Chairman &ManagingDirector |
| ||Scooters India Limited |
|Place : Lucknow |
Date : August 24 2020