The Members of Menon Pistons Limited
The Directors' take pleasure in presenting the 42 Annual Report together with theaudited financial statements for the year ended 31st March 2019. The Management Discussionand Analysis Report have also been incorporated into this report.
Directors have tried to maintain coherence in disclosures and flow of the informationby clubbing required information topic-wise and thus certain information which is requiredin Directors' Report is clubbed elsewhere and has to be read as a part of Directors'Report.
1. FINANCIAL HIGHLIGHTS:
( Rs. in Lakhs )
| ||Current Year ||Previous Year |
|Particulars ||2018 -19 ||2017-2018 |
|Revenue from Operations (Net) ||15610.12 ||14972.01 |
|Other Income ||68.45 ||149.79 |
|Profit before Depreciation & Amortisation Expenses Finance || || |
| ||1929.13 ||1724.78 |
|Cost and Tax || || |
|Less: Depreciation & Amortisation Expenses ||483.11 ||440.86 |
|Finance Cost ||42.12 ||98.82 |
|Profit Before Tax ||1403.90 ||1185.10 |
|Less: Tax Expenses ||396.30 ||482.60 |
|Profit After Tax ||1007.60 ||702.50 |
|Other Comprehensive Income ||(14.67) ||(16.85) |
|Total Comprehensive income ||992.93 ||685.65 |
|Balance of profit /loss for earlier years ||4780.54 ||4401.80 |
|Less: Transferred to General Reserve ||(100.00) ||- |
|Less: Dividend on Equity Shares ||(306.00) ||(255.00) |
|Less: Dividend Distribution Tax ||(62.90) ||(51.91) |
|Balance Carried Forward ||5304.57 ||4780.54 |
STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:
The Company has recorded another steady year of growth despite performing in a highlycompetitive environment. The Company's endeavour is to leverage its technology to meet theneeds of the market and strengthen its position in its area of business.
In spite of adverse market conditions the Company had achieved Rs.156.10 Croresturnover as compared to Rs.149.72 Crores in the previous financial year. The Company istaking steps to perform better by overcoming the adverse market condition.
CHANGE IN NATURE OF BUSINESS IF ANY:
During the year there was no change in the nature of business of the Company.
TRANSFER TO RESERVES:
The Board of Director of your Company proposes to transfer an amount of Rs. 100 Lakhsto General Reserve. The total balance in General Reserve account as on 31st March 2019 isRs. 1098.89 Lakhs.
Your Directors have recommended a final dividend of Re. 0.75 /- (Paise Seventy Fiveonly) per equity share of Re. 1/- each (i.e. 75 %). The total outgo amounts toRs.38250000/- (Rupees Three Crores Eighty Two Lakh Fifty Thousand only) and dividenddistribution tax of Rs.7862400/- (Rupees Seventy Eight Lakh Sixty Two Thousand FourHundred only).
SHARE CAPITAL OF THE COMPANY:
The paid up equity share capital as on 31st March 2019 was Rs. 510 Lakhs. During theyear there was no public issue rights issue bonus issue or preferential issue etc. TheCompany has not issued shares with differential voting rights sweat equity shares norhas it granted any stock options.
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company has no Subsidiary/Joint Ventures/Associate Companies. The Company also doesnot have any holding Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report. The Company hasproposed a final dividend which as per the provisions of Schedule III has not beenincluded in the part of the Balance Sheet but forms part of the Notes to accounts.
The following table provides information of the credit rating of Menon Pistons Limitedfrom "CARE" ratings agency.
|Facilities ||Amount (In Crores) ||Rating |
|Cash Credit facilities - Fund Based ||18 ||CARE BBB+ (Stable) |
|Packing Credit facilities - Fund Based ||02 ||CARE A2 |
|Bank Guarantee facilities - Non Fund Based ||01 ||CARE BBB+ (Stable) |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company has made the necessary disclosures in this Report in terms of Section 134(3) of the Companies Act 2013 read with Rules 8 of the Companies (Accounts) Rules 2014.The Company has always strived to optimize energy consumption. Details of the same areprovided in Annexure - 1.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All related party transactions which were entered into during the financial year wereon an arm's length basis and in the ordinary course of business. All Related PartyTransactions are placed before the Audit Committee for their approval and to the Board asand when required.
The policy on Related Party Transactions as approved by the Board of Directors isuploaded on the Company's website i.e. www.menonpistons.com. Pursuant to the provisionsof Section - 134 (3) (h) of the Companies Act 2013 the particulars of contracts orarrangements with related parties referred to in Section 188 (1) of the Companies Act2013 and prescribed in Form AOC-2 of the Companies (Accounts) Rules 2014 are appended as
Annexure - 2 to this report. Related Party Transactions during the year have beendisclosed as a part of Financial Statements as required under Indian Accounting Standardsissued by the Institute of Chartered Accountants of India. The approval of the members issought by way of an ordinary resolution for the further related party transactions whichare at Arms Length and Ordinary Course of business at the forthcoming Annual Generalmeeting as per provisions of Section 188 of the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
a) Appointment / Re-appointement
As recommended by Nomination and Remuneration Committee Mr. Ajitkumar Belur(DIN:00205336) and Mr. Subhash Kutte (DIN: 00233322) have been appointed as an Additional(Independent) Director 1st of the Company w.e.f. 01 April 2019 and 10 May 2019respectively subject to approval of members of the Company. The approval of members byway of special resolution is also sought for the continuation of Mr. Ajitkumar Belur as anIndependent Director (Non-Executive) as per the provisions of Regulation 17 (1A) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations 2015 and also because he completed his first term as anIndependent Director of the Company on 31 March 2019 as per the Companies Act 2013 and hasbeen appointed as an Additional (Independent) Director of the Company for a term of fiveconsecutive years with effect from 1 April 2019. Further Mr. Ramesh Dattatraya Dixit(DIN: 00626827) who retires by rotation at ensuing Annual General Meeting and beingeligible offers himself for re-appointment.
The Company has informed to Dr. Shivram Bhoje (DIN: 03352809) vide letter dated 20March 2019 about the completion of his tenure as an Independent Director of the Companyw.e.f. 31 March 2019. The Company has also received an acknowledgement of the same fromDr. Shivram Bhoje effective as on date. The Board places on record their appreciation forcontributions made by Dr. Shivram Bhoje during his tenure.
c) Committees of the Board:
The Board of Directors have constituted committees in order to effectively cater itsduties towards diversified role under "the Act" and Listing Agreement with theStock Exchanges and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations"). Details of the constitution terms ofreferences of each committee and number of meetings attended by individual director etc.are provided in the Corporate Governance Report.
d) Policy on Director's Appointment and Remuneration:
The Policy of the Company on Director's Appointment and Remuneration including criteriafor determining qualifications positive attributes independence of the directors andother matters provided under Section 178 (3) of the Act and Listing Regulations adopted bythe Board and details of the remuneration paid to the Board of Directors are provided inthe Corporate Governance Report. We affirm that the remuneration paid to the Directors isas per the terms laid down in the Nomination and Remuneration Policy of the Company.
e) Board Performance Evaluation Mechanism:
Pursuant to the provisions of "the Act" and Listing Regulations the Boardhas carried out the annual performance evaluation. Details of the evaluation mechanism areprovided in the Corporate
Governance Report. A meeting of Independent Directors was held on 16 October 2018 forevaluation of Board performance.
f) Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Listing Regulations.
g) Key Managerial Personnel:
The Key Managerial Personnel of the Company as per Section 2(51) and 203 of the Act areas follows:
|Mr. Sachin Menon ||Chairman & Managing Director |
|Mr. S B P Kulkarni ||CFO & Associate Vice President |
|Mr. Pramod Suryavanshi ||Company Secretary & Compliance Officer |
NUMBER OF MEETINGS OF THE BOARD:
A calendar of meetings is prepared and circulated in advance to the Directors. Duringthe year Four (4) Board Meetings were convened and held the details of which are given inthe Corporate Governance Report. The intervening gap between the meetings was within theperiod prescribed under "the Act" Secretarial Standards issued by the Instituteof Company Secretaries of India and Listing Regulations.
PARTICULARS OF LOAN GUARANTEES INVESTMENTS:
Loans guarantees and investments covered under Section 186 of the Act form part of thenotes to the financial statements provided in this Annual Report. (Refer notes 2 and 8 ofthe standalone financial statements)
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
As per Regulation 34 (2) (e) of Listing Regulations the Management Discussion andAnalysis Report and the Corporate Governance Report is appended as a part of AnnualReport. The Company has obtained a Certificate from the Statutory Auditors confirmingcompliance with conditions of the Code of Corporate Governance as stipulated in Schedule V(E) of Listing Regulations and the same forms part of this Annual Report.
EXTRACT OF THE ANNUAL RETURN:
Extract of the Annual Return as prescribed under Section 92 (3) of the Companies Act2013 in the Form MGT-9 is appended as Annexure - 3 which forms part of this Report.Further the copy of annual return will be placed on the website of the company i.e.www.menonpistons.com under Investor Relations segment.
Business Risk Evaluation and Management is an ongoing process within the Organization.The Company has a robust risk management framework to identify monitor and minimize risksas also identify business opportunities. As a process the risks associated with thebusiness are identified and prioritized based on Severity Likelihood and Effectiveness ofcurrent detection. Such risks are reviewed by the Risk Management Committee on a quarterlybasis.
ADEQUACY OF INTERNAL FINANCIAL CONTROL:
The Board is responsible for establishing and maintaining adequate internal financialcontrol as per Section
134 of the Act. The Board has laid down policies and processes in respect of internalfinancial controls and such internal financial controls were adequate and were operatingeffectively. The internal financial controls covered the policies and procedures adoptedby your Company for ensuring orderly and efficient conduct of business including adherenceto your Company's policies safeguarding of the assets of your Company prevention anddetection of fraud and errors accuracy and completeness of accounting records and timelypreparation of reliable financial information.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy which provides adequate safeguards againstvictimization of persons who may blow whistle. Protected disclosures can be made by awhistle blower through an email or dedicated telephone line or letter to the ManagingDirector of the Company or Letter to the Chairman of Audit Committee. Whistle BlowerPolicy may be accessed on the Company's website at the link: 'www.menonpistons.com'. Weaffirm that during the financial year 2018-19 no employee or director was denied accessto the Audit Committee.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION
PROHIBITION AND REDRESSAL) ACT 2013:
The Company has constituted Internal Complaints Committee as required under Section 4of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 comprising of senior executives of the Company. During the year 2018-19 therewas no complaint received before the committee.
CODE OF CONDUCT COMPLIANCE:
A declaration signed by the Managing Director affirming compliance with the Company'sCode of Conduct by the Directors and Senior Management for the Financial Year 2018-19 asrequired by Schedule V (D) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is included in the Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134 (3) (c) of the Companies Act 2013 the Boardof Directors state that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any; b)the Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable 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 31 March2019 and of the profit of the company for that period; c) the Directors have taken properand sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities; d) the Directors have prepared the annualaccounts on a going concern basis; e) the Directors have laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively; and f) the Directors have devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES:
The table containing the names and other particulars of employees in accordance withthe provisions of Section 197 (12) of the Act read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is appended as Annexure- 4 which forms part of this Report.
During the year Industrial relations at the Company's plants continue to be cordial.The Company has taken initiative for safety of employees and implemented regular safetyimparted machine safety training wearing protective equipment etc.
a) STATUTORY AUDITORS:
The Statutory Auditors M/s. P. G. Bhagwat Chartered Accountants Pune (FRN-101118W)were appointed for the period of 5 consecutive years at the 40 Annual General Meeting ofthe Company. The Companies Act 2013 was amended to remove the provisions related toratification of the Auditors and therefore there is no requirement of ratification ofAuditors of the Company.
No adverse remarks/ comments/observations are made by the Statutory Auditors in theirreport for the year ended 31st March 2019 except some delay in transfer of Shares toIEPF authority as required under IEPF rules.
During the year under review the Statutory Auditors had not reported any fraud underSection 143(12) of the Act therefore no detail is to be disclosed as required underSection 134 (3)(ca) of the Act.
b) INTERNAL AUDITOR:
Mr. Abhay Golwalkar Chartered Accountant Kolhapur was appointed to conduct theinternal audit of the Company for the financial year 2018-19 as required under Section138 of the Act and the Companies (Accounts) Rules 2014.
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined. To maintain its objectivity and independence the Internal Auditor reports to theChairman of the Audit Committee of the Board and also to the Managing Director. Based onthe report of internal audit function process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. Recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board andaccordingly implementation has been carried out by the process owners.
c) SECRETARIAL AUDITORS:
M/s. DVD & Associates Company Secretaries Pune was appointed to conduct theSecretarial Audit of the Company for the Financial Year 2018-19 as required under Section204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. The Secretarial Audit Report in Form MR-3 for Financial Year 2018-19 isappended which forms part of this Directors Report as Annexure - 5.
Annual Secretarial Compliance Report The Company has received the Annual SecretarialCompliance Report from M/s. DVD & Associates Company Secretaries Pune as per theprovisions of Regulation 24 A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is appended which forms part of this Directors Report as Annexure- 6.
There are no qualifications reservations adverse remarks or disclaimers made by theSecretarial Auditors in their report except some delay in transfer of Shares to IEPFauthority as required under IEPF rules.
d) COST AUDITORS:
Pursuant to Section 148 of the Act read with The Companies (Cost Records and Audit)Amendment Rules 2014 the cost audit records maintained by the Company in respect of itsmanufacturing activity is required to be audited. Your Directors had on therecommendation of the Audit Committee appointed M/s. C S Adawadkar & Co. CostAccountants Pune to audit the cost accounts of the company for the financial year 2018-19on a remuneration of Rs.1.50 Lakhs.
As required under the Act the remuneration payable to the cost auditor is required tobe placed before the members at a general meeting for their determination. Accordingly aresolution seeking member's determination for the remuneration payable to M/s. C SAdawadkar & Co. Cost Accountants Pune is included at Item No.4 of the noticeconvening the Annual General Meeting. The Cost Audit Report does not contain anyqualification reservation or adverse remark.
The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India (ICSI). The Company has devised proper systems to ensurecompliance with its provisions and is in compliance with the same.
CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
The Board of Directors of the Company has constituted the Corporate SocialResponsibility Committee (CSR Committee) as per the requirement of the Section 135 of"the Act" read with the Companies (Corporate Social Responsibility Policy)Rules 2014. The said Committee has formulated the CSR Policy indicating the activities tobe undertaken by the Company monitoring the implementation of the frame work of the CSRPolicy and recommending the amount to be spent on CSR activities. Additionally the CSRPolicy has been uploaded on the website of the Company at www.menonpistons.com. During theyear 2018-19 the Company has contributed Rs.2060140/- towards Corporate SocialResponsibility by way of contribution to eligible charitable institutions and Company hasspent for promotion of education promotion of traditional art and culture povertyupliftment encouragement of sports medical facility to economically poor families. Thedetails as per the provisions of Rule 8 of the Companies (Corporate Social Responsibility)Rules 2014 are annexed herewith as Annexure - 7.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany's executives staff and workers.
By Order of the Board
For Menon Pistons Limited
Sachin Menon Place : Kolhapur
Chairman & Managing Director Date : 10.05.2019 DIN: 00134488