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Maharashtra Scooters

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Directors Report Year End : Mar '17    Mar 16

DIRECTORS’ REPORT

INTRODUCTION:

The Directors present their forty-second (42nd) Annual Report and Audited Financial Statements for the year ended 31 March 2017, prepared in due compliance of extant provisions of the Companies Act, 2013 and Schedule III thereto.

REVIEW OF OPERATIONS:

During the year under review, the business activities of the Company continued to be restricted to the (i) manufacture of die casting dies, jigs and fixtures, primarily meant for the automobiles industry and (ii) treasury operations involving management of surplus funds invested by the Company.

Sales attributed to manufacture of die casting dies, jigs and fixtures were marginally lower at '' 843.29 lakhs, as compared to Rs, 892.96 lakhs during the previous year.

The turnover of the Company during the year under review amounted to Rs, 2923.63 lakhs as against Rs, 11714.99 lakhs during the previous year, which included additional dividend received during that year by way of interim dividend and consequently, the figures are not strictly comparable. CLASSIFICATION AS A CORE INVESTMENT COMPANY: The Company continued to fulfill the criteria for being classified as a Core Investment Company (CIC) exempted from registration with Reserve Bank of India pursuant to section 45-IA of RBI Act, 1934. The continued classification of the Company as a Core Investment Company, however, had no significant impact on the operations / finances of the Company. FINANCIAL HIGHLIGHTS:

(Rs, in lakhs)

2016-17

2015-16

Net sales and other income

2923.63

11714.99

Gross profit before depreciation

1425.20

10173.38

Depreciation

55.32

73.50

Profit before tax

1369.88

10099.88

Tax expense

148.00

116.00

MAT credit entitlement

(34.00)

(116.00)

Profit after tax

1255.88

10099.88

Earnings per Share (Rs,)

10.99

88 . 37

RECOMMENDATION ON DIVIDEND:

For the financial year ended 31 March 2017, the Directors are pleased to recommend for consideration of the Shareholders at the ensuing Annual General Meeting, payment of dividend @ Rs, 30 per share (300%) on 11,428,568 equity shares of Rs,10 each. For the financial year ended on 31 March 2016, the Company had paid interim dividend @ Rs, 30 per share (300%), which was confirmed by the Shareholders as final dividend.

The amount of dividend inclusive of tax thereon for the financial year 2016-17 amounts to Rs, 4126.55 lakhs, same as paid during the financial year 2015-16.

SHARE CAPITAL:

The paid up Equity Share Capital as on 31 March 2017 was Rs, 11.42 crores. During the year under review, there was no public issue, rights issue, bonus issue or preference share issue, nor had the Company issued shares with differential voting rights or granted stock options or sweat equity.

PRESENTATION OF FINANCIAL STATEMENTS:

The financial statements for the year ended 31 March 2017 are prepared in due compliance of the Schedule III to the Companies Act, 2013.

CASH FLOW STATEMENT:

A Cash Flow Statement for the year 2016-17 is included in the annexed Statement of Accounts.

EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of section 92(3) of the Companies Act, 2013 and Rules framed there under, an extract of Annual Return as on 31 March 2017 in the prescribed Form No. MGT-9 is annexed to this Report (Annexure-I).

NUMBER OF MEETINGS OF THE BOARD:

There were four (4) meetings of the Board held during the year. Detailed information is given in the annexed Corporate Governance Report.

DIRECTORS’ RESPONSIBILITY STATEMENT:

As required pursuant to clause (c) of sub-section (3) of section 134 of the Companies Act, 2013, the Directors, to the best of their knowledge and belief, state that -

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departure;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS, IF ANY, REPORTED BY THE AUDITORS:

No offence involving fraud committed against the Company by officers or employees of the Company was reported by the Auditors to the Audit Committee or the Board pursuant to section 143(12) of the Companies Act, 2013.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have submitted declarations to the Company to the effect that they meet the criteria of independence as provided in sub-section (6) of section 149 of the Companies Act, 2013.

DIRECTORS’ APPOINTMENT AND REMUNERATION POLICY:

Information regarding Directors'' Remuneration Policy and criteria for determining the qualification, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 of the Companies Act, 2013 are contained in the Corporate Governance Report. The Policy is also available on the website of the Company i.e. www.mahascooters.com

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The Company has not given any loans or provided any security. Full particulars of the investments made by the Company are provided in the Financial Statements attached to this Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the year under review, the Company had not entered into any transactions with the related parties which invoked the provisions of section 188 of the Companies Act, 2013, thereby necessitating its approval by the Board or prior approval of the Shareholders.

There being no such contract with related parties, which are ''material'' in nature, there are no details to be disclosed in Form AOC - 2, under the Companies Act, 2013.

Pursuant to the provisions of section 177 of the Companies Act, 2013 and Regulation 23 of the SEBI Listing Regulations, all Related Party Transactions were placed before the Audit Committee for its prior / omnibus approval.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website, www.mahascooters.com

DETAILS PURSUANT TO RULE 8(3) OF THE COMPANIES (ACCOUNTS) RULES, 2014:

Conservation of energy

The Company continued to maintain power factor to unity throughout the year, resulting in getting maximum rebate in electricity bills. Company has initiated steps to introduce energy saving LED lamps in a phased manner all over the factory premises.

Technology absorption

No expenditure was incurred by the Company attributable to technology absorption during the year.

Expenditure on Research & Development

No expenditure was incurred by the Company attributable to Research & Development during the year.

Foreign exchange earnings and Outgo

The Company did not earn any foreign exchange, while the outgo was Rs, 36.15 lakhs.

ANNUAL EVALUATION OF THE BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS:

Pursuant to provisions of the Companies Act, 2013 and Regulation 25(4) of the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the Directors individually, as well as the evaluation of the working of its Committees. The manner in which formal annual evaluation was made is provided in the annexed Corporate Governance Report.

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR RESIGNED DURING THE YEAR:

a) Mrs. Charu Desai, one of the Independent Directors of the Company and Woman Director on its Board resigned during the year, owing to personal reasons. The Board records its sincere appreciation of the valuable contribution made by Mrs. Charu Desai during her tenure on the Board.

b) On the recommendations of Nomination and Remuneration Committee, the Board at its meeting held on 24 January 2017 appointed Mrs. Richa Bagla as an Independent Director / Woman Director, for a period of 5 years, effective 24 January 2017, subject to the approval of the Shareholders at the ensuing Annual General Meeting.

c) There was no change in the Key Managerial Personnel during the period under review.

d) In light of provisions of the Companies Act, 2013, Shri Sanjiv Bajaj retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under regulation 36(3) of the SEBI Listing Regulations, 2015, in case of re-appointment of the director is provided in the Notice of the ensuing annual general meeting

e) Detailed information on the directors is provided in the Corporate Governance Report.

MATERIAL ORDERS, IF ANY, PASSED BY THE REGULATORS, COURTS ETC.,:

No material Orders were passed by any Regulators or Courts or Tribunals during the financial year under review impacting the going concern status of the Company''s operations in future. DETAILS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has documented its Internal Financial Controls considering the essential components of various critical processes, physical and operational, and which includes its design, implementation and maintenance along with periodical internal review of operational effectiveness and sustenance during the financial year 2015-16. The controls and processes remained unchanged during the year 2016-17 and as such the internal financial controls with reference to financial statements were adequate and operative effectively during the year 2016-17.

This ensures orderly and efficient conduct of its business, including adherence to Company''s policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The internal financial controls with reference to the financial statements were adequate and operating effectively.

RISK MANAGEMENT POLICY:

The Company has adopted a Risk Management Framework for the Company, including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company.

MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

CORPORATE GOVERNANCE:

In terms of Regulation 34 of Listing Regulations, a Report on Corporate Governance together with the Auditors’ Certificate thereon, Management Discussion and Analysis Report & CSR Report forms integral part of Corporate Governance Report. BUSINESS RESPONSIBILITY REPORT:

Pursuant to Regulation 34(2) of the SEBI Listing Regulations, 2015, Annual Report of top 500 listed companies by market capitalization, calculated as on 31 March of every financial year, are required to include a Business Responsibility Report, describing therein the initiatives taken by them from environmental, social and governance perceptive, in the format prescribed by SEBI.

For the financial year ended 31 March 2016, the name of your Company was listed in the top 500 companies by market capitalization and consequently, as part of the Annual Report for the financial year 2016-17, the Company has presented its first Business Responsibility Report.

In its quest of Green Initiative, the Company has hosted the Business Responsibility Report on its website viz., www.mahascooters.com On request, a physical copy of said Report would be made available to any Shareholder, free of cost.

SECRETARIAL AUDIT REPORT:

Pursuant to the provisions of section 204 of the Companies Act, 2013, the Company had appointed Shri Shyamprasad D. Limaye, a Fellow Member of the Institute of Company Secretaries of India and a Company Secretary in Practice (FCS No.1587, Certificate of Practice No. 572), to conduct the secretarial audit and give a Secretarial Audit Report for the year 2016-17 to be annexed to the Report of Board of Directors. Secretarial Audit Report of Shri Shyamprasad D. Limaye in the prescribed Form MR-3 is annexed to this Report (Annexure-II). The Report does not contain any qualification, reservation, disclaimer or adverse remarks.

SECRETARIAL STANDARDS OF ICSI:

The Company is in compliance of Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

STATUTORY AUDITORS:

The current Auditors were last re-appointed by the Members at their Annual General Meeting held on 25 July 2016, to hold the office of Auditor from the conclusion of the 41st Annual General Meeting till the conclusion of this 42nd Annual General Meeting. As per the provisions of section 139 Companies Act, 2013, no listed company shall appoint an audit firm as auditors for more than two terms of five consecutive years. The Act also provided for additional transition period of three years from the commencement of the Act i.e. 1 April, 2014. The current

Auditors had completed a period of ten years at the commencement of the said Act and hence, on their completing the additional transition period of three years provided under the Act, the term of the current Auditors expires at the conclusion of the ensuing Annual General Meeting.

The Board of Directors at its meeting held on 16 May 2017, based on the recommendation of the Audit Committee, has recommended the appointment of M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration No.105215W/W100057), as the Statutory Auditors of the Company for approval by the members.

M/s. Kirtane & Pandit LLP, Chartered Accountants have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under section 141(3)(g) of the said Act and that they are not disqualified to be appointed as statutory auditors in terms of section 143 of the Act.

M/s. Kirtane & Pandit LLP, Chartered Accountants will be appointed as the statutory auditors of the Company from the conclusion of 42nd Annual General Meeting till the conclusion of 47th Annual General Meeting, covering one term of five consecutive years, subject to ratification by the members at each intervening Annual General Meeting, on such terms and conditions as may be mutually agreed.

The members are, therefore, requested to appoint M/s. Kirtane & Pandit LLP, Chartered Accountants (Firm Registration No.105215W/W100057), as auditors of the Company for a term of five years from the conclusion of the ensuing annual general meeting till the conclusion of the 47th annual general meeting, to be scheduled in 2022, subject to ratification at each annual general meeting and to fix their remuneration for the year 2017-18.

AUDITORS’ REPORT:

The Statutory Audit Report does not contain any qualification, reservation or adverse remark or disclaimer made by Statutory Auditor.

INDUSTRIAL RELATIONS:

During the year under review, the Company had an amicable wage settlement agreement with the Workmen, valid through 30 September 2019 and the relations with the Workmen remained cordial.

ESTABLISHMENT OF VIGIL MECHANISM:

Pursuant to the provisions of section 177(9) of the Companies Act, 2013 and Rules framed there under, the Company has established a vigil mechanism for directors and employees to report genuine concerns and to provide for adequate safeguards against victimizations of persons who use such mechanism and the details thereof are disclosed on the website of the Company www.mahascooters.com DETAILS OF DIRECTORS AND EMPLOYEES REMUNERATION:

Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed to this Report (Annexure-III).

During the year under review, none of the employees of the Company was in receipt of remuneration as referred to in section 197(12) of the Companies Act, 2013 read with Rule 5(2) and (3) of the Rules aforesaid.

CORPORATE SOCIAL RESPONSIBILITY (CSR) REPORTING:

Detailed information on Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to section 135 of the Companies Act, 2013 is given in the Annual Report on CSR activities annexed to this Report (Annexure-IV).

On behalf of the Board of Directors

Madhur Bajaj

Pune, 16 May 2017 Chairman

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