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Force Motors Ltd.

BSE: 500033 Sector: Auto
NSE: BAJAJTEMPO ISIN Code: INE451A01017
BSE 16:01 | 27 Mar 2018 Force Motors Ltd
NSE 05:30 | 01 Jan 1970 Force Motors Ltd
OPEN 2765.00
PREVIOUS CLOSE 2741.80
VOLUME 27544
52-Week high 4810.00
52-Week low 2749.10
P/E 25.73
Mkt Cap.(Rs cr) 3,635
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2765.00
CLOSE 2741.80
VOLUME 27544
52-Week high 4810.00
52-Week low 2749.10
P/E 25.73
Mkt Cap.(Rs cr) 3,635
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Force Motors Ltd. (BAJAJTEMPO) - Director Report

Company director report

To

The Members

The Directors present the 56th Annual Report together with the Audited FinancialStatements for the Financial Year ended on 31st March 2015.

1. Financial Results

Standalone

2014-15 2013-14
Rs. Rs.
Income from 26389020260 23011377716
Operations (Gross)
Other Income 657763716 599350506
Gross Profit (Profit before Depreciation & Taxes) 2062274829 1474654600
Depreciation 812843342 848384924
Profit before Tax 1249431487 626269676
Provision for Tax 235804250 (150673127)
Profit after Tax 1013627237 776942803
Transfer to -- 77694281
General Reserve
Proposed Dividend 65881310 39528786
Provision for Tax on 13411855 6717918
Distributed Profit
Balance in Profit & Loss Account carried forward 8979655520 8071044173

Consolidated

2014-15 2013-14
Rs. Rs.
Income from 26392721873 23014756082
Operations (Gross)
Other Income 657872797 599350506
Gross Profit (Profit before Depreciation & Taxes) 2066044254 1477995584
Depreciation 812843342 848384924
Profit before Tax 1253200912 629610660
Provision for Tax 236968730 (149638127)
Profit after Tax 1016232182 779248787
Less : Profit for the year attributable to Minority Interest 874606 774230
Profit for the year 1015357576 778474557
(after Minority Interest)
Transfer to General 652000 78271281
Reserve
Proposed Dividend 65881310 39528786
Provision for Tax on 13411855 6717918
Distributed Profit
Balance in Profit & Loss Account carried forward 8993527180 8083618586

Considering the strong reserve position of the Company the Board of Directors of yourCompany decided not to transfer further amount from the profits for the Financial Yearunder report to General Reserve.

The Audited Consolidated Financial Statement in accordance with the Companies Act 2013(the Act for brevity) and Accounting Standard - 21 on Consolidated FinancialStatement is provided in this Annual Report.

2. State of Company’s Affairs and Future Outlook

The business of the Company has grown steadily. Vans and Tractors produced by theCompany have achieved improved sales and market shares. Systematic and detailed effortshave improved distribution and service network of the Company which has yielded goodresults both for Vans and Tractors.

The Company has been preparing for the change in the regulatory environment arisingfrom new emission norms revised requirements for School Buses and Ambulances and alsospecifically taking into account customer requirements for the type of vehicles theCompany produces.

The Company’s plants have shown good improvement in productivity and quality.Rationalization of procurement policies and focus on cost saving has also yieldedbenefits.

Thus product development manufacturing material procurement and sales promotionactivities of the Company have all contributed to the steady progress.

The establishment of engine manufacturing factory as a dedicated factory for BMW IndiaPvt. Ltd. at Chennai and the project to establish a new engine and axle productionfacility for Mercedes Benz at Chakan near Pune has enabled the Company to participate inthe rapidly growing high performance luxury vehicles market in India by working togetherwith companies with leadership positions. It is expected that these businesses will alsodevelop and grow rapidly.

Besides the Pithampur Plant which is Company’s main plant producing Traveller andTrax range of vehicles and having its own facilities for production of enginestransmissions etc. the Company has now separate factories in Chennai and Pune forproducing engines and transmissions as stated above for leading luxurious car makers.

The Akurdi factory of the Company focuses mainly on the production of tractors.

The R&D activities the production engineering and the tool manufacturingactivities are located at Akurdi and have been expanded and modernized to tackle futurechallenges.

3. Change in Nature of Business if any

During the year there is no change in the nature of business of the Company.

4. Dividend

The Board of Directors has recommended a dividend of Rs. 5 per share on 13176262equity shares of Rs. 10 each fully paid up.

5. Share Capital

The paid up equity share capital as on 31st March 2015 was Rs. 13.17 crore. During theperiod under review the Company has not issued any shares with differential voting rightsor granted stock options or sweat equity.

6. Extract ofAnnual Return

The extract of Annual Return as on 31st March 2015 pursuant to the provisions ofSection 92 of the Act and Rules framed thereunder in the prescribed form is annexed tothis report.

7. Meetings of the Board of Directors

During the Financial Year 2014-15 the Meetings of the Board of Directors of theCompany were held on 29th April 2014 24th May 2014 26th July 2014 30th July 2014 11thAugust 2014 20th September 2014 18th October 2014 16th January 2015 26th February 2015and 12th March 2015.

8. Particulars of Loans Guarantees or Investments

The Company has not given loans guarantees or made investments under Section 186 oftheAct during the year under report. Particulars of investments made upto the previousfinancial year by the Company are provided in the Financial Statement attached to thisreport.

9. Particulars of Contracts or Arrangements with Related Party

All Related Party Transactions (RPTs) entered during the year were on arm’s lengthbasis. There were no material related party contract(s) or arrangement(s) ortransaction(s) during the year as defined under Clause 49 of the Listing Agreement andthere are no details in this regard to be disclosed in FormAOC-2.

During the year 2014-15 pursuant to Section 177 of the Act and Clause 49 of theListing Agreement all RPTs were placed before Audit Committee for its required approval.The policy on RPTs as approved by the Board is uploaded on the Company’s websitewww.forcemotors.com and can be accessed at weblink: http://www.forcemotors.com/page/index/shareholders information.

10. Explanation / Comments on any Qualification of Auditors

There were no qualifications reservations or adverse remarks made by either theAuditors or by the Company Secretary in Practice in their respective reports.

11. Material Changes and Commitments

There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the Financial Year i.e. 31st March 2015 and thedate of Report.

12. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo

Conservation of Energy

Several steps are taken such as –

• Power factor is maintained to "UNITY"

• Auto switch off facility is installed for shop floor lighting during lunch andrecess

• Machines are switched off when not in use

• Increasing use of transparent sheets for roofing to cater for natural lighting

• Strong effort on controlling air leakages and equipment maintenance to minimizelosses

• LED lighting for street lights for the Company’s plants are nowincreasingly being installed

• Increased use of well water for select consumption

Technology Absorption

Company has been focusing on developing extremely light weight vans. The T-2 family ofTraveller vehicles has a self weight which is approximately 1000 kg less than mostcompetitive vehicles. Similar effort is under way to develop light weight options forother seating capacities. This development has called for strong effort in engineeringincluding product and process development as also material selection.

The Company has completed the development aspect of a full range of Common rail engineswhich will be highly fuel efficient enabling a low carbon foot print.

The Company has developed a new family of transmissions with higher efficiency lowfriction and high reliability using light weight materials. All these weight reductionactivities and development of new engines and transmissions have called for significanttechnology development and absorption activity.

The expenditure on Research & Development for new products including theexpenditure on Projects and Tool Engineering was 2.69 % of the operational turnover ofthe Company for the year under report. The Company continues to maintain its emphasis onResearch Development and Tool Engineering activities.

Foreign Exchange Earnings and Outgo

The foreign exchange outgo arising out of the import of raw materials components andcapital goods is as per the details mentioned in the Notes to Financial Statements.

13. Subsidiary Company

Tempo Finance (West) Private Limited is the subsidiary of the Company. The Board ofDirectors of the Company has reviewed the affairs of the Subsidiary Company. As perSection 129 of the Act the Company has prepared the Consolidated Financial Statements ofthe Company and the Subsidiary Company which form a part of the Annual Report. Astatement containing the salient features of the Financial Statement of the SubsidiaryCompany in the prescribed format AOC-1 forms part of the Audited Financial Statement ofthe Company. A copy of the Audited Financial Statements of Subsidiary Company will be madeavailable to the Members of the Company seeking such information. The Audited FinancialStatements of Subsidiary Company will be kept for inspection by any Member at itsRegistered Office during business hours. The same is placed on the Company’s websiteand can be accessed at weblink: http://www.forcemotors.com/page/index/ shareholdersinformation.

14. Risk Management

The Company has deployed a comprehensive Risk Management framework - to identifymonitor review and take all necessary steps towards mitigation of various risk elementswhich can impact the existence of the Company on a periodic basis.

All the identified risks are managed through continuous review of business parametersby the Management and the Board of Directors are also informed of the risks and concerns.

15. Directors and Key Managerial Personnel

Mr. Vinay Kothari Director of the Company retires by rotation and being eligibleoffers himself for reappointment. All necessary information regarding the Directorretiring by rotation is a part of the Statement attached to Notice dated 31st July 2015and/or Report on Corporate Governance.

Mr. L. Lakshman Mrs. Anita Ramachandran Mr. Atul Chordia Mr. S. A. Gundecha and Mr.R. B. Bhandari have ceased to be Directors of the Company by resignation during the yearunder report. Board places on record its appreciation for the services rendered by them intheir capacity as Directors.

Mr. Nitin Desai and Dr. Indira Parikh were appointed as Additional Directors of theCompany during the year under report. Mr. Desai and Dr. Parikh were appointed asIndependent Directors by the Members of the Company in their Meeting held on 20thSeptember 2014. Mr. Prashant V. Inamdar was appointed as an Additional Director of theCompany w.e.f. 16th January 2015 designated as Executive Director (Operations) subject tothe Members’ approval at the ensuing Annual General Meeting. Mr. Sanjay Bohra wasappointed as the Chief Financial Officer and Key Managerial Personnel of the Companyw.e.f. 16th January 2015. Mr. Pradeep Dhadiwal was the Chief Financial Officer from 26thJuly 2014 till 16th January 2015 who continues to head the Controlling and IT functions.

16. Declaration of Independent Directors Terms of Appointment & DisclosureofAppointment

The five Independent Directors – Mr. Pratap Pawar Mr. S. Padmanabhan Mr. ArunSheth Mr. Nitin Desai and Dr. Indira Parikh have been appointed by the Members of theCompany as Independent Directors for a period of 3 years w.e.f. 20th September 2014. Theterms of their appointment are posted on the Company’s website at www.forcemotors.comand can be accessed at weblink: http://www.forcemotors.com/ page/index/shareholders_information.

The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of theAct so as to qualifythemselves to be continued as Independent Directors under the provisions of the Act andthe relevant Rules.

17. Details of Significant and Material Orders Passed by the Regulators or Court orTribunal

There were no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operation in future forthe year under Report.

As reported earlier petition challenging the decision of the Hon’ble High Courtof Judicature at Bombay in respect of change in the name of the Company is still underconsideration of the Hon’ble Supreme Court of India.

18. Adequacy of Internal Financial Controls

M/s. Capri Assurance & Advisory Services Chennai & M/s. Jugal S. RathiChartered Accountants Pune are appointed as the Internal Auditors of the Company. Theinternal financial controls are adequate with reference to the Financial Statement andsize and operations of the Company.

19. Fixed Deposits

The details of deposits accepted/renewed during the year under review are furnishedhereunder:

Sr. No. Particulars Nos. Amount in ( Rs. )
a) accepted or renewed during the year 4 5300000
b) remained unpaid or unclaimed as at the end of the year (31st March 2015)* 113 4965000
c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved -- --
i) at the beginning of the year -- --
ii) maximum during the year -- --
iii) at the end of the year -- --

* includes 5 nos. fixed deposits amounting to Rs. 60000 which are matured claimedbut have been withheld on the instructions of Statutory Authorities and will be paid upontheir approval.

20. Secretarial Audit Report

Mr. I. U. Thakur Company Secretary in Practice having Membership no. FCS 2298 wasappointed to conduct the secretarial audit of the Company for the Financial Year 2014-15as required under Section 204 of the Act and Rules made there under. The Secretarial AuditReport in the prescribed Form MR-3 for the Financial Year 2014-15 is annexed to thisreport.

21. Corporate Social Responsibility (CSR)

The Annual Report on the CSR activities of the Company pursuant to Rule 8 of theCompanies (Corporate Social Responsibility Policy) Rules 2014 is annexed to this report.

22. Audit Committee

The Audit Committee consists of Mr. Pratap Pawar Mr. S. Padmanabhan Mr. Arun Shethand Mr. Vinay Kothari.

The above composition of the Audit Committee consists of Independent Directors viz.Mr. Pratap Pawar Mr. S. Padmanabhan and Mr. Arun Sheth who form the majority.

The Company has established a vigil mechanism formulated a Whistleblower Policy andthe Committee would oversee the genuine concerns expressed by the employees and otherDirectors. The Company has also provided adequate safeguards against victimization ofemployees and Directors who express their concerns. The mechanism provides direct accessto the Chairman of the Audit Committee in exceptional cases. The details of the mechanism/policy are disclosed on the website of the Company www.forcemotors.com.

23. Policy on Directors Appointment and Criteria

The Company’s Policy relating to appointment of Directors payment of Managerialremuneration Directors’ qualifications positive attributes independence ofDirectors and other related matters as provided under Section 178(3) of the Act isavailable on the website of the Company www.forcemotors.com.

24. Formal Annual Evaluation of the Performance of Board/Committees and Directors

Information on the manner in which formal annual evaluation has been made by the Boardof its own performance and the directors is given in the Report on Corporate Governance.

25. Corporate Governance

The Company has taken all necessary steps to implement the provisions of the ListingAgreement and a detailed report on the various issues including the Auditors’Report on Corporate Governance is attached to this report.

26. Details of Directors and Employees’ Remuneration

The information required pursuant to Section 197 of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provided upon request. In terms of Section 136 of theAct the Report and the Accounts are being sent to the Members and others entitledthereto excluding the information on employees’ particulars which is available forinspection by the Members at the Registered Office of the Company during business hours onworking days of the Company upto the date of ensuing Annual General Meeting. If any Memberis interested in obtaining a copy thereof such Member may write to the Company Secretaryin this regard.

27. Disclosure on Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013

The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees are covered under this policy. Thereare no complaints received during the year under report.

28. Details of Frauds Reported by Auditors

There are no such frauds against the Company reported by the Auditors for the periodunder report.

29. Directors’ Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134(3) (c) of the Act :

a) in the preparation of the Annual Financial Statements for the year ended 31st March2015 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

b) for the Financial Year ended 31st March 2015 such accounting policies as mentionedin the Notes to the Financial Statements have been applied consistently and judgments andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company and of the profit and loss of the Company forthe year ended 31st March 2015; c) that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and were operating effectively;

f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.

30. You are requested to appoint Auditors for the current year and fix theirremuneration. M/s. P. G. Bhagwat Chartered Accountants Pune Auditors to the Companywho retire at the ensuing Annual General Meeting are eligible for reappointment.

31. The Company appointed M/s. Joshi Apte &

Associates Cost Accountants Pune for verification and review of the Cost Records ofthe Company for the Financial Year 2014-15.

32. The industrial relations at the Pithampur Plant continued to be cordial. Thelitigation connected with recognition of labour union at the Company’s Akurdi PunePlant is still pending before the Hon’ble Supreme Court of India.

33. The Directors express their grateful thanks to the Dealers Suppliers and Banksfor their support and express their warm appreciation of the sincere co-operation anddedicated work by a majority of the employees of the Company.

For and on behalf of the Board of Directors
Pune - 411 035 ABHAYKUMAR FIRODIA
31st July 2015. Chairman
DIN:00025179