The Board of Directors of your Company is pleased to present the 45th 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 2017.
1. PRODUCTION REVIEW:
The Production performance for the year is shown below in physical terms:
| || ||(Nos.) |
|Description ||2015-16 ||2016-17 |
|Three Wheelers ||8176 ||6540 |
The reduced numbers of physical production may be seen in context of the ongoing capexinstallations during the year under reference.
2. SALES REVIEW:
The Sales performance for the year is shown below:
| || |
|Description ||Physical ||Financial ||Physical ||Financial |
| ||(In Nos.) ||(Rs in lakhs) ||(In Nos.) ||(Rs in lakhs) |
|Three Wheelers ||9326 ||13513.41 ||6349 ||10300.56 |
|Spares || ||270.81 || ||337.95 |
|Petrol Diesel Lubricants etc. || ||1419.93 || ||216.93 |
|Other Sales || ||6.42 || ||- |
|TOTAL || ||15210.57 || ||10855.44 |
3. FINANCIAL REVIEW:
The salient features of the Company's financial results for the year under review areas follows:
| || ||(Rs in lakhs) |
|Description ||2015-16 ||2016-17 |
|a) Profit/Loss before Depreciation Interest Taxes Prior Year Items & Other Income ||(52.06) ||(1178.44) |
|b) Profit/Loss before Depreciation Interest Taxes & Other Income ||(52.06) ||(1179.30) |
|c) PBDIT ||901.60 ||(756.54) |
|d) Profit /(Loss) for the Year ||548.38 ||(1027.67) |
During the year under report:
(1) Loss before depreciation interest taxes prior year items & other incomeincreased by Rs. 1126.38 lakhs as compared to the previous year.
(2) Loss before depreciation interest taxes & other income increased by Rs.1127.24 Lakhs as compared to the previous year.
(3) Profit before depreciation interest & taxes decreased by Rs. 1658.14 lakhs ascompared to the previous year.
(4) Net profit for the year decreased by Rs. 1576.05 lakhs as compared to the previousyear.
4. OPERATIONAL REVIEW
During the year under report the operations of the company remained under stress due toconstraints in marketing and disruption in supplies leading to lower production sales& profits. Further the Ministry of Road Transport and Highways vide notification no.GSR - 643(E) dated 19.08.2015 amended Rule 115 of Central Motor Vehicles Rules 1989 toprovide that the Mass Emission Standards for Bharat Stage IV shall come into force allover the country in respect of vehicles manufactured on or after the 1st April 2017.Hon'ble Supreme Court of India in I.A.NO. 487/2017 I .A. NO. 491/2017 I.A. NO. 494/2017I.A. NO. 489/2017 I.A. NO. 495/2017 in Writ Petition (Civil) No.13029/1985 in M C MehtaVs. Union of India & Others vide order dated 29.03.2017 held that:
a) On and from 1st April 2017 such vehicles that are not BS-IV compliant shall not besold in India by any manufacturer or dealer that is to say that such vehicles whether twowheeler three wheeler four wheeler or commercial vehicles will not be sold in India byany manufacturer or dealer on and from 1 st April 2017.
b) All the vehicle registering authorities under the Motor Vehicles Act 1988 areinitially prohibited for registering such vehicles on and from 1 st April 2017 that donot meet BS-IV emission standards except on proof that such a vehicle has already beensold on or before 31st March 2017.
Due to the above change the operations during the initial part of the current year2017-18 were also under stress. The Company has got type approval of few models of BS-IVvehicles however liquidity crunch further stressed the operations.
1 MW Roof Top Solar Power Plant has been installed and shall commence operations soonwhich will lead to substantial savings in energy cost.
5. CONTRIBUTION TO NATIONAL EXCHEQUER
The company has contributed a sum of Rs. 2167.26 lakhs (towards duties & taxes) tothe exchequer during the period under review vis-a-vis Rs. 3480.60 lakhs lakhs duringprevious financial year.
The company has not made any exports during the period under review. Further theroyalty income during the year by way of foreign exchange remittances also remained nilin view of ongoing legal cases.
7. EXPENDITURE ON ADVERTISEMENT AND PUBLICITY:
An expenditure of Rs. 13.06 lakhs was incurred on account of advertisement andpublicity in the year.
8. STATUS OF REPAYMENT OF LOAN FROM GOI
In terms of Cabinet approval the existing term plan & non-plan loan as of 31stMarch 2012 of Rs 85.21 Crores (Plan loan - Rs 1.93 Crores & Non-plan - Rs. 83.28crores) has been converted into equity share capital of Rs. 85.21 crores by issue of 8.52crores equity shares of Rs. 10/- each at par and further the Equity share Capital of theCompany has been reduced by 85.21 crores by cancellation of aforesaid Rs. 85.21 croresequity share capital held by Government of India in terms of BIFR Order dated 24.06.2013.The existing interest Accrued as on 31st March 2012 amounting to Rs. 2367Lacs on GOI loan (Plan loan of Rs. 193 lakhs & Non-plan loan of Rs. 8328 lacs) hasbeen written off against accumulated losses and no further interest has been provided onthe aforesaid loan from 31st March 2012 onwards. No provision of interest onNon-Plan loan of Rs. 189 lakhs released during the financial year 2012- 13 has been made.This matter has been taken up with Department of Heavy Industry/ Board of Industrial &Financial Reconstruction for maintaining the status quo. After review an adjustment may bemade ex-post facto. The Government of India Ministry of Industries & PublicEnterprises Department of Heavy Industry released funds by way of interest free plan loanamounting to Rs. 2000.00 lakhs during the financial year 2013-14 for working capital underan approved revival package of Scooters India Limited by Cabinet/Misc. Applicationapproved by BIFR. As per sanction 23.7.2013 the Moratorium period for the loan is 3 yearsand Installment commence from 31.3.2015. The company sought by way of Reliefs &Concessions in the Draft Rehabilitation Scheme (DRS) submitted to Operative Agency (SBI)for submission of BIFR for recovery of 5 installments commencing from 23.7.2016 onwardsi.e. 3 years from date of sanctioning ie. beginning w.e.f. 23.7.2016.
9. AUDITORS' REPORT
M/s D S Shukla & Company Chartered Accountants have been appointed by theComptroller And Auditor General of India as Statutory Auditors of the Company for theyear 2016-17. The Statutory Auditors' Report on the accounts of the Company for thefinancial year ended 31st March 2017 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 Comptroller And Auditor General of India has appointed M/s Dhawan & MadanChartered Accountants as Statutory Auditors of the Company for the year 2017-18.
10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED FROM 01.04.2017 TO DATE:
No material change and commitment have been made by the company from 01.04.2017 to datethat has adverse effect on the financial position.
11. MANAGEMENT DISCUSSION AND ANALYSIS:
(A) MISSION VISION & OBJECTIVE
VISION Scooters India's vision is to grow as a recognized automotive company withmarket presence in public transport provision in Goods Passenger & Special PurposeCarriers in India & abroad.
MISSION Our mission is to build on the reliability we possess in niche markets andevolve into an economic enabler with stronger after-market support for our customers whotrust us when plying our vehicles in service.
To prosper into defined areas delineated by the revival plan in 2013
To achieve 2 % decrease in cost and rationalize input materials expense.
Growing resources & JV partners to fill strategic gaps in skills andoperations.
To reduce energy input per unit of production with renewables.
(B) MARKET SCENARIO
(i). The total number of 3-Wheelers produced and sold in the domestic market bymanufacture in India during the year 2016-17 as against 2015-16 is given below:
|Category || |
Production (In Nos.)
|Segment/ Sub- segment ||April'15- March'16 ||April'16- March'17 |
|Passenger Carrier ||834253 ||670978 |
|Goods Carrier ||99851 ||112171 |
|Total ||934104 ||783149 |
| || |
Domestic Sales (In Nos.)
|Passenger Carrier ||440978 ||402034 |
|Goods Carrier ||97230 ||109624 |
|Total ||538208 ||511658 |
Note: Sales excluding Export of 404441 nos. in 2015-16 and 271894 nos. in 2016-17
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. With focused efforts and approach SIL has achieved salesof 6348 nos. in 2016-17. By achieving these sales SIL has utilized 74.61 % of theircapacity. This has also resulted in decreasing the SIL market share from 1.74 % in 2015-16to 1.23 % in 2016-17.
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 is 100% in 2016-17 (SIL sales 1847 nos. out of 1847 nos.).
(ii). 3-Wheelers growth drivers in future are as under:
Rapid development of infrastructure and focus of both Central as well asState Govt on infrastructure mainly on roads the demand of 3-wheeler may see an upwardtrend in coming years. The demand driver for 3- Wheelers are its affordability as aneconomical viable transport solution. However the demand for 3-Wheeler passenger carrierdepends on the availability of permits issued by Local RTO's.
Increased demand from semi urban & rural areas for 3-Wheelers becauseof its high product maneuverability and drivability.
Suitability of 3-Wheelers for congested Indian roads and tropicalconditions.
Self employment opportunity for a large no of youths especially with theGovt focus on various schemes for the unemployed youths.
3-Wheelers of smaller capacity are in great demand in load carrier segmentbecause of increase in organizing retail marketing across the country which requiresfaster and economical transportation.
3-Wheeler is a low cost transport solution to daily commuting passenger.Hence the market for 3-wheeler shall continue to be there because of higher cost oftransportation in other modes of transport like taxi contract carriages buses etc.
3-Wheeler are also better earning opportunity for unemployed youths. Witha minimum expenditure i.e Rs. 45000 - 50000 (margin money) one can start earningRs.300-400 per day right from the day one of purchasing a new 3-Wheeler.
(C) Resources and Liquidity:
In view of the continuing cash losses the company's liquidity position was understrain.
Your company is an ISO 9001:2000 company. The company has taken several initiativesincluding manufacturing of no problem vehicle and up-gradation of its products to ensurethat the best quality products are made available to its customers. Vehicle reliabilityhas improved significantly which has generated goodwill leading to better sales.
(E) Opportunities & Threats:
> Growing automobile sector
> Untapped markets - of South West East & Exports
> Developing hub and spoke transportation model
> Increasing allocation of funds for poverty alleviation under various Govt. Schemeslike PMRY SC/ST NREGS etc.
> Rapidly growing awareness about vehicular pollution leading to policy formulationfor increase use of alternate fuel vehicles
> Options for technology infusion
> Rapidly growing network for CNG/LPG supply
> Replacement market of 4W SCV like Tata Ace.
> Government regular focus and thrust on pushing 3W e- rickshaws
> Increase in product substitution effect by rapidly growing 4Wheel Small CommercialVehicle
> Increased competition both from organized and unorganized players
> Strict enforcement of the pollution norms and Passenger Vehicle permits
> Increased customer expectations
> Rising interest and fuel cost could dampen demand for company's products.
> Volatility in Raw Materials prices/input and difficulty in passing on costincrease.
(F) Future Outlook:
Challenges faced by the Company:
> The need for consistency in quality demands for enhanced investment in R&D andupgradation of plant & machinery. Existing over-lived plant & machinery is a causeof concern.
> Manpower cost in the company is still high and so is the average age profile ofthe employees. While your company needs to reduce its manpower cost at the same time italso needs to infuse fresh blood.
> Retention of young officers who joined in the last couple of years is difficult asprivate/other PSUs are offering substantially higher remuneration. Young
executives are regularly leaving for greener pastures.
> Though 3-wheelers as an industry continue to grow but increase in competition andavailability of 4-wheelers in 1.0 ton and sub 1.0 ton category is expected to aggravatethe extremely competitive scenario and impact the volumes and margins.
> Strict regulatory laws concerning pollution and their strict implementation bybanning sale of diesel vehicles in certain states shall act as deterrent for companygrowth.
> SIL has lesser presence in small 3-wheeler segment which has strong marketpreference. In this segment contribution is lower and competition is higher as establishedplayers viz. Piaggio Mahindra etc. dominate the market.
> Employees' aspiration for effecting revision in salary and wages.
(J) Strategic Road Map:
Although there has been negative growth in three wheeler segment of Auto sector inIndia the performance of your company has also not been well in comparison to theprevious year. Your company is evaluating various new product development options to caterto various market segments with a view to higher production and sales.
(iii) Status Before BIFR
On 18th February 2010 BIFR has declared the Company as sick industrialcompany in terms of the provisions of section 3(1 )(o) of the Sick Industrial Companies(Special Provisions) Act1985 (SICA) on reference being made after full erosion of theNetworth of the Company as per annual accounts for the year ended at 31stMarch 2009. BIFR approved the miscellaneous application filed by the Company for seekingnecessary permission/appropriate directions for reliefs & concessions enabling issueof shares restructuring of balance sheet and for release of funds for capital expenditureand working capital in line with the cabinet decision for revival of SIL. The DraftRehabilitation Scheme (DRS) was submitted by Co Operating Agency (SBI) for submission withBIFR. BIFR in its hearing dated 15.09.2015 directed that SIL ceases to be a sickindustrial company with in the meaning of Section 3(1 )(o) of the SICA as its net worthhas turned positive and It is therefore discharged from the purview of SICA/BIFR.
12. 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 outgo in accordance with the Section 134 (3) (m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is provided atAnnexure-11-A and 1-B to this report.
13. PARTICULARS OF EMPLOYEES:
Information under Sec. 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.
14. INDUSTRIAL RELATIONS:
During under period under review i.e. 01.04.2016 to 31.03.2017 the industrial relationin the company remained normal. No. agitation and strike took place during the aforesaidperiod.
15. TRAINING AND DEVELOPMENT:
Employees of the Company are the most important constituent and Company understandsthat without their motivation and development the Company can not progress. The Companyhas been 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 etc. employees were trained during 01/04/2016 to 31/03/2017on course of vigilance environmental Hazards & its Management in Industry andIntegration of CPSEs/ autonomous bodies under department of Heavy Industry RTI onlineportal.
|Programme Details ||Officers ||Staffs ||Workmen ||Trainees ||Total |
|Internal ||NIL ||- ||- ||- ||NIL |
|External ||4 ||- ||- ||- ||4 |
|Total ||4 ||- ||- ||- ||4 |
Vigilance group continues to function with particular emphasis on the aspects ofpreventive and corrective vigilance. Strict vigil was exercised over various activities aspart of Preventive Vigilance measures and suggestions were made to the Management forsystem improvement. Company also observed Vigilance Awareness Week from 31.10.2016 to05.11.2016.
17. HUMAN RESOURCE DEVELOPMENT:
Employees of the Company are the most important constituent and Company understandsthat without their motivation and development Company can not 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.
18. 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.
19. RESERVATION FOR SCHEDULED CASTES & SCHEDULED TRIBE:
As on 31.03.2017 the total strength of the company is 259. Out of these 72 employeesbelong to Scheduled Castes and 01 employee to Scheduled Tribe.
20. DIRECTORS KEY MANAGERIAL PERSONNEL APPOINTED AND RESIGNED
Ministry of Heavy Industries & Public Enterprises Department of Heavy IndustryGovernment of India nominated Shri Pravin Agarwal Director DHI for discharge of dutiesof CMD SIL during the absence of Smt. Vinita Srivastava the then CMD w.e.f. 14.04.2016 to30.06.2016 for attending Chevening Fellowship at Oxford.
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 September2016 appointed Shri Renati Sreenivasulu as Chairman & Managing Director of SIL forthe period of five years or till the date of his superannuation or until further orderswhich ever is earliest. Shri Renati Sreenivasulu has joined as Chairman & ManagingDirector of SIL w.e.f. 06.10.2016 and Mrs. Vinita Srivastava Director Ministry of HeavyIndustries & Public Enterprises Department of Heavy Industry Government of India hasrelinquished the charge of Chairperson & Managing Director w.e.f. 05.10.2016.
In pursuance of the Order No. F. No. 3(15)/2012-PE-VI dated February 01 2017 issued byMinistry of Heavy Industries & Public Enterprises Department of Heavy Industries Mr.Rahul Bali as per his request dated 06.10.2016 for joining back parent organization Oiland Natural Gas Corporation Limited (ONGC) before completion of his five years lien(effective from 02.04.2013 vide letter no. File No. 3 -15/2012 - PE VI dated 04.01.2013)has been relieved from the position of Director (Technical) Scooters India Limited (SIL)w.e.f. the evening of 01.02.2017.
The Board records the appreciation for contribution made by Smt. Vinita Srivastava CMD& Shri Rahul Bali D(T) during their association with the Company.
The Company is not having Independent Directors as well as women Director in terms ofthe provisions of the Companies Act 2013 & Listing agreement. However the matter hasbeen taken up the with Ministry for filling up the vacant positions of IndependentDirectors women Director as well as Director (Finance) on the Board.
Government of India Ministry of Heavy Industries & Public Enterprises Departmentof Heavy Industry vide its letter No. 20-9/1998-PE-VI dated 02.03.2016 has conveyed theappointment of Shri Ram Krishna Swarnkar IPS (UP:96) as Chief Vigilance officer for aninitial deputation tenure of 3 years which is extendable for further period of 2 years inthe same organization or three years on transfer to another organization after completionof initial 3 years with prior approval of CVC & DOPT. He has joined the Company w.e.f.July 05 2016.
21. INDEPENDENT DIRECTOR'S DECLARATION:
Directors on the Board of the Company are appointed by the Administrative Ministry. SILhas been requesting the Ministry to appoint the independent directors. The appointment ofIndependent directors is yet to be made by the Ministry. During the year there was noindependent director on the board of the Company. Thus the declaration pertaining toindependent director does not apply.
22. DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTORS:
During the year there was no independent director on the Board of the Company. Hencedisclosure pertaining to reappointment of independent directors does not apply.
23. NUMBER OF MEETINGS OF THE BOARD
The Board met eight times during the financial year the details of which are given inthe Corporate 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.
24. COMPANY'S POLICY ON DIRECTORS' APPOINTMENT & REMUNERATION INCLUDING CRITERIAFOR 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. 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.
In absence of Independent Directors on the Board the Nomination & RemunerationCommittee (NRC) has also not been constituted. The other matters relating to remunerationif any are placed directly to the Board of Directors.
25. 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. For evaluation ofthe performance of the Managing Director by the Administrative Ministry a weightage of75% is given for the achievement of MoU parameters by the Company. 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.
26. MANAGING DIRECTOR RECEIVING COMMISSION OR REMUNERATION FROM HOLDING OR SUBSIDIARYCOMPANY:
The Company has no holding or subsidiary company hence not applicable.
27. RATIO OF DIRECTORS' REMUNERATION TO MEDIAN EMPLOYEES' REMUNERATION AND OTHERDISCLOSURES:
During the year the remuneration of Director (Technical) was Rs. 20.22 lac and medianemployee's remuneration was Rs. 4.15 lac. The Director (Technical) remuneration comes to487.23% of median employees' remuneration. (Annexure - 7)
28. 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 rule 11of the Companies (Meeting of Board and its Powers) Rules 2014.
29. 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 are presented in Annexure 8 to the Directors' Report inForm AOC 2.
30. DIRECTORS' RESPONSIBILITY STATEMENT:
In accordance with the provisions of section 134(3)(c) of the Companies Act 2013 yourDirectors confirm that:
a) in preparation of the annual accounts for the year ended March 312017 theapplicable accounting standards read with the requirements set out under Schedule III ofthe Act have been followed and that there are no material departures from the same;
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 March312017 and of the profit 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) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and are operating effectively.
31. 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.
32. FIXED DEPOSITS:
The Company has not accepted any deposits under the provisions of the Companies Act2013 during the year.
33. SECRETARIAL AUDITOR
M/s Amit Gupta & Associates Practicing Company Secretaries were appointed assecretarial auditors of the Company for the year 2016-17 as required under Section 204 ofthe Companies Act 2013 and Rules made thereunder. The secretarial audit report in FormMR-3 for FY 2016-17 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 shall become duly constituted in accordance with theprovisions of the Companies Act 2013 & Listing agreement and necessary compliancesregarding constitution of various Committees viz. Audit Committee Nomination &Remuneration Committee etc. shall also be made. Further the Company is in process offiling of necessary returns with the Registrar of Companies Kanpur.
34. CORPORATE GOVERNANCE:
A Certificate from M/s D S Shukla & Co Auditors of the Company 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 to this report.
35. SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the Company's operations in future.
36. AUDIT COMMITTEE AND VIGIL MECHANISM
In view of non appointment of Independent Directors by GOI the Company is not havingAudit Committee pursuant to requirement of section 177(1) of Companies Act 2013 read withRule 6 of the Companies (Meeting of Board and its Powers) Rules 2014 and Regulation 18 ofthe SEBI 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.
37. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure - 6 to thisReport.
38. ISSUE OF SHARES WITH DIFFERENTIAL RIGHT SWEAT EQUITY EMPLOYEE STOCK OPTION:
The Company has not issued any share with differential right sweat equity employeestock option during the year hence not applicable.
39. RISK MANAGEMENT
SIL aims to have a formalised 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.
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.
41. 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 turnover 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. The Company has duly constituted a Corporate Social Responsibility (CSR)Committee pursuant to the requirement of Section 135(1) of Companies Act 2013 and theRules made thereunder. However in absence of an Independent Director Committee constituonis not proper. Accordingly to conserve the resources for business operations the Companyhas decided not to spend any amount towards Corporate Social Responsibility during theyear under report.
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 theco-operation and advice received from Govt of India particularly Deptt. 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.
For and on behalf of the Board
| ||Renati Sreenivasulu |
| ||DIN:07634253 |
| ||Chairman & Managing Director |
| ||Scooters India Limited Lucknow -226008 |
|Place: New Delhi || |
|Date: August 042017 || |
I. CONSERVATION OF ENERGY:
(a) Measures being taken
> Judicious usage of all resources including compressed air water & power etc.
> Periodic servicing of suction filters moisture traps unloader and deliveryvalves.
> Monitoring of control of water wastage.
> Recycling of cooling water.
> Arresting of Water & Air leakages on continuous basis.
> Reduction of Contract Demand from 500kVA to 3000kVA by optimizing the MaximumDemand by Shift Managements etc.
> Overhauling & Changing of Transformer Oil with fresh Transformer Oil of 02nos. 5MVAMain Transformer 05nos. 1500kVA. 01 no. 500kVA& 01 no. 560kVA DistributionTransformers.
> Replacement of 50 nos. old Conventional motors with New IE2 motors.
> Replacement of 22nos. 15HP (over rated) Mono-Block pumps with New 7.5HP EnergyEfficient EFFI Mono-Block Pumps for air cooling system.
> Installation of 05nos. new VFDs in the Die Casting Shop & Paint Shop tooptimize the use of motors & conserve energy.
> Stopping usage of heaters during winter seasons for personal Heating Purpose.
> Reduction in operation Time of FDVs by 01 Hour in order to Conserve Energy.
> Stopping of water Sprinklers in FDVs during Humid Seasons to Conserve Energy.
> Operation of 30HP water pump to fill SIL Over Head Tank has been restricted from3-Shift to 2-Shifts only.
> Operation Hours of 04nos. of 120 HP Compressors has been reduced by 10 Hour in aweek by proper planning in order to conserve energy.
> Arresting of Water & Air leakages on continuous basis.
> Energy unit consumed during FY 2016-17 reduced to 3929800 kWh(Unit) as against4159800 kWh(Unit) consumed during FY 2015-16.
(b&c) Impact of Energy Consumption Measures Total energy consumption and energyconsumption per unit of production as per Form A' in respect of industries specifiedin the scheme thereto
The Company has reduced its energy cost. The details are given in attached Annexure1-A.
II) TECHNOLOGY ABSORPTION:
Efforts made in technology absorption attached as Annex.1-B.
III) FOREIGN EXCHANGE EARNINGS AND OUTGO:
Efforts and initiative in relation to exports:
Foreign Exchange earned by way of export of goods was Rs NIL in 2016-17 as compared toRs NIL during previous financial year.
Form for Disclosure of particulars with respect to Conservation of Energy
|Description ||2015-16 ||2016-17 |
|A Power and fuel consumption || || |
|1. Electricity || || |
|a) Purchased || ||392980034700974 8.830 |
|Unit* || || |
|Total Amount (Rs.) ||4159800 || |
|Rate/Unit (Rs.) ||390572639.38921 || |
| ||1020 ||12201.720 |
|b) Own Generation ||0.9107 ||33.706 |
|i) Through Diesel Generator || ||NA |
|Unit* ||57.5701 ||NIL |
| ||NA ||NIL |
| ||NIL ||NIL |
|Units per litre of diesel oil ||NIL || |
|Cost per Unit (Rs.) ||NIL || |
|ii) Through Steam Turbine/Gen || || |
|Unit* Unit per litre of diesel oil || || |
|Cost/Unit (Rs.) || || |
|2. Coal ||N.A. ||N.A. |
|Quantity (Ton) ||NIL ||NIL |
|Total Cost ||NIL ||NIL |
|Average rate ||NIL ||NIL |
|3 a) Furnace Oil || || |
|Quantity (Ton) ||49.510 ||44.49 1285984.00 Rs.28.91 |
|Total Amount (Rs.) ||1284091.4225.936 ||per Kg 18.00 Kits. |
|Average Rate per Kg.(Rs.) ||50.00 ||1837489.00 |
|b) Light Diesel Oil ||1804409.34 || |
|Quantity (Kilo litres) || || |
| || ||Rs.46.53 per lit. |
|Total Amount (Rs.) ||36.088 || |
|Average Rate per Kg.(Rs.) || || |
|4. Others/internal generation ||N.A. ||N.A. |
|(Please give details) || || |
|Quantity ||NIL ||NIL |
|Total Cost ||NIL ||NIL |
|Rate/Unit ||NIL ||NIL |
B Consumption per unit of production
|Description ||Standards (if any) ||2015-16 ||2016-17 |
|Production (in Nos.) || ||8176 508.7818 ||5578 704.5177 |
|Electricity (Unit) || || || |
|Furnace Oil (Ton) || ||NIL ||NIL |
|Light Diesel Oil (Kilo litres) || ||NIL ||NIL |
|Coal (specify quality) || || || |
|Others (specify) || || || |
Unit denotes KWH
"Higher KWH/Vehicle because of low number of production
Form for disclosure of particulars with respect to technology absorption
Research & Development (R&D)
|01 ||Specific areas in which R&D carried out by the company || Developed and manufactured Pilot batch of complete body built vehicles for 3-wheeler models of VIKRAM 450D 750D 1000CG and VIKRAM 1500 CG in both Load Carrier and Passenger Carrier variants.- Development of Non Metallic Internal Mud Guard (Wheel Arch) with the help of M/s CIPET (Central Institute of Plastics Engg. & Technology) Lucknow is completed and prototype sample made. Some modifications & corrections is done based on feedback incorporated & finalized the design. The same will be used for regular production of BSIV vehicles. |
|02 ||Benefits derived as a result of the above R&D || Customer feedback taken and with suitable changes incorporated and the same to be implemented in BSIV vehicles. |
|03 ||Future Plan of Action || Upgradation & Regularization of all vehicle models and its variants for BSIV norms compliance. |
| || || Development of Electric Vehicle as per market requirement. |
| || || Concept vehicle with Dry Type Single plate Clutch System on Small platform is made and put under Endurance Trials for regularization in future. |
| || || Product upgrades with Self Adjusting Brake System is put under Endurance Trials. |
| || || Standardization of Electrical items Rubber and Plastic Parts is to be carried out & implemented at regular intervals. |
|04 ||Expenditure on R&D || |
| ||a) Capital ||Nil |
| ||b) Recurring ||Rs 23.46 lakhs |
| ||c) Total ||Rs 23.46 lakhs |
| ||d) Total R&D Expenditure as a percentage of Total turnover ||0.22% |
| ||Technology absorption .adaption and innovation || |
|01 ||Efforts in brief made towards technology absorption .adaption and innovation ||Officers and Staff of the R&D have been sponsored for Exhibition (Auto-Expo) demonstration of the new contemporary automotive products expositions and association with Testing agencies like ARAI ICAT and GCL for development of BSIV compliant automotive products. |
|02 ||Benefits derived as a result of the above efforts e.g. product improvement cost reduction .product development etc. ||Exercises in Value Engineering carried out for improvement reliability cost and weight reduction in the existing products. |
|03 ||In case of imported technology imported technology (imported during the last five years reckoned from the beginning of the financial year) following information may be furnished: || |
| ||a) Technology imported ||Nil |
| ||b) Year of Import || |
| ||c) Has technology been fully absorbedRs || |
| ||d) If not fully absorbed areas where this has not been taken place reasons therefore and future plan of action || |