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Mazda Ltd.

BSE: 523792 | NSE: MAZDA |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE885E01034 | SECTOR: Engineering

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

To,

THE MEMBERS,

MAZDA LIMITED

The Directors are pleased to present the 28th Annual Report on the business and operations of the company together with the Audited Accounts for the financial year ended March 31, 2018.

1. FINANCIAL PERFORMANCE

(Rs. In Lacs)

Sr.No.

Particulars

2017-18

2016-17

Total revenue

11297.46

12455.33

(Less): Total expenditure

9488.93

10649.59

ii

Profit before depreciation, finance cost & tax

1808.53

1805.74

v

(Less): Finance cost

58.76

47.07

v

(Less): Tax Expenses

414.60

202.96

vi

Cash Profit

1335.17

1555.71

vii

(Less): Depreciation

305.57

263.82

viii

Profit for the year

1029.60

1291.89

ix

Items of OCI for the year

19.05

3.47

x

Surplus brought forward

11371.26

10414.12

xi

Profit after tax available for appropriation

12419.91

11709.48

xii

Dividend on equity shares

310.83

281.03

xiii

Tax on distributed profits

63.28

57.21

xiv

Surplus carried forward

12045.80

11371.26

Note: The previous year figures have been regrouped whenever necessary.

2. DIVIDEND

Your company has a steady dividend payment history and in line with the financial performance of the year 2017-18, your Directors recommend dividend for the year ended 31st March, 2018 at the rate of Rs. 8.10 (i.e. 81%) per equity share of Rs. 10/- each (last year Rs. 7.30 per equity share) amounting to total payment of Dividend of Rs. 344.90 Lacs. The company will pay the Tax on dividend as per the provisions of the Income Tax Act, 1961. The payment of dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting (“AGM”).

3. OPERATIONS

During the year under review, total revenue is reduced by 9% and profit after tax reduced by 20% from the previous financial year.

4. FINANCE AND ACCOUNTS

There are no term loans or interest thereon outstanding during the year under review. Your company is at present using financial assistance in the form of working capital facilities from State Bank of India, Ahmedabad with overall banking limits upto Rs. 22.38 Crores to capture its fund based and non-fund based requirements. The fund based limits are in the form of Cash credit / PCFC loans and non-fund based limits are in the form of Bank Guarantees and LCs.

Your company is sufficiently funded from the internal accruals which has been invested in debt market instruments like fixed maturity plans, liquid funds and bond funds. The market value of the investment has increased from the previous year from Rs. 47.01 Crores to Rs. 56.84 Crores in the year under review.

During the year under review, ICRA has conducted the surveillance of credit facilities and re-affirmed the long term credit ratings to ‘A’ and short term credit ratings to ‘A1’. The outlook of the long term ratings is stable.

5. EXPORTS AND TECHNOLOGY DEVELOPMENTS

Exports for the year were at Rs. 33.70 Crores as compared to Rs. 31.01 Crores for the previous year showing increase by 8.68%.

Your Directors expect moderate improvement in export business in the financial year 2018-19 in anticipation of improved global economic environment.

6. FIXED DEPOSITS

In pursuance of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014, your company has not accepted deposits from the public.

7. INSURANCE

Taking into consideration the multiple risks from riot, fire, earthquake, terrorism and other risks considered by the management, your company’s assets and interest of the company are adequately insured.

8. EMPLOYEE STOCK OPTION

Your company has not issued any Stock Option to their employees.

9. SUBSIDIARIES AND JOINT VENTURES

There are no subsidiaries or joint ventures of your company.

10. DIRECTORS

Your Board of Directors, has always believed in achieving organizational growth by closely monitoring the performance of the company and management. Your Board ensures statutory and ethical conduct with high quality financial reporting. It holds itself accountable to the shareholders as well as other stakeholders for the long-term well-being of the company.

The ‘Board of Directors’ is constituted with appropriate combination of Executive Directors, Non- Executive Directors, Independent Directors and Woman Directors, as per the prevailing regulatory requirements who have immense knowledge and experience of their respective fields.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with provisions of the Articles of Association of the company, Mr. Samuel Croll - III and Mrs. Houtoxi Contractor, Directors retire by rotation and being eligible, offer themselves for re-appointment.

Brief resume, area of expertise and other details of these Directors forms integral part of the Notice of the Annual General Meeting.

11. KEY MANAGERIAL PERSONNEL

Pursuant to provisions of Sections 2(51) and 203 of Companies Act, 2013 read with rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons are acting as Key Managerial Personnel of the company as on 31st March, 2018;

- Mr. Sorab Mody, Managing Director

- Mr. Percy Avari, Whole-Time Director

- Mrs. Shanaya Mody Khatua, Whole-Time Director

- Mr. Cyrus Bhagwagar, Chief Financial Officer

- Mr. Nishith Kayasth, Company Secretary

None of the Key Managerial Personnel, has resigned during the year ended on 31st March, 2018.

12. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 as required under section 92(3) of the Companies Act, 2013 is attached as Annexure - A.

13. NO. OF MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the financial year 2017-18, the gap of which not exceeding the period as prescribed under the Companies Act, 2013. The relevant details, including composition of the Board, dates of meetings, attendance and various committees of the Board are given in the Corporate Governance Report forming part of this report.

14. INDEPENDENT DIRECTOR’S FAMILIARIZATION PROGRAMME AND EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

The company has devised a policy for performance evaluation of the Board, Committees and other Directors (including Independent Directors) which includes criteria for performance evaluation of the Non- Executive Directors and Executive Directors.

The Independent Directors carried out annual performance evaluation of the Board, Board Committees and Individual Directors, Chairman and members of the respective Board Committee members. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Board Committees.

The details pertaining to Independent Directors familiarization programme and evaluation of Board, their Committees and of the Directors are included in the Corporate Governance Report, which forms part of this report.

15. AUDIT COMMITTEE

The Composition of the Audit Committee is in line with the provisions of Section 177 of the Act read with Regulation 18 of Securities And Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations, 2015(“SEBI LODR, 2015”). The Chairman of the Audit Committee is an Independent Director. The Audit Committee invites such of the executives as it considers appropriate to be present at the meeting particularly the Managing Director, the Chief Financial Officer, the representative of Statutory and Cost Auditors and the Internal Auditor of the company. All the members of Audit Committee are financially literate and majority of them have accounting and financial management expertise. Besides having access to all required information within the company, the Committee may investigate any activity within its terms of reference, seek information from any employee. The Board accepted the recommendations of the Audit Committee, if any during the year.

The details pertaining to composition of audit committee, their attendance are included in the Corporate Governance Report, which forms part of this report.

16. SHARE CAPITAL

During the year under review, there has been no change in the paid-up capital of the company. The paid-up equity share capital of the company as on 31st March, 2018 is Rs. 4,25,80,000/During the year under review, the company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

17. DIRECTORS’ RESPONSIBILITY STATEMENT Your Directors confirm that:

(i) In the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have 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 as at 31st March, 2018 and of the profit of the company for the year ended on that date;

(iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud & other irregularities;

(iv) The Directors have prepared the annual accounts on a going concern basis;

(v) The Directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

18. DECLARATION BY INDEPENDENT DIRECTORS

Your company has received the declarations in the prescribed format from each Independent Director conforming that they meet the criteria of independence as envisaged in the provisions of Section 149 of the Companies Act, 2013, read with Regulation 25 of the SEBI LODR, 2015.

19. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The requisite details as required by Section 178(3) & (4) of the Companies Act, 2013 and as per the requirement of SEBI LODR, 2015 is attached as Annexure - B.

The policy of the company on directors’ appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, i.e. www.mazdalimited.com.

20. CHANGES IN THE NATURE OF BUSINESS, IF ANY

During the year under review, no changes are found in the nature of business carried on by the company. The company has not changed the class of business in which the company has an interest.

21. REPORTING OF FRAUD BY STATUTORY AUDITORS

There are no incidences of fraud reported by the auditors as required under section 143 (12) of the Companies Act, 2013.

22. AUDITORS AND AUDITORS’ REPORT

- Statutory Auditor

At the 27th Annual General Meeting held on 12th September, 2017, the members have approved appointment of M/s Mayank Shah & Associates, Chartered Accountants, Ahmedabad (Registration No. 106109W) to hold office from 27th AGM up to the conclusion of 32nd Annual General Meeting subject to ratification of their appointment at every Annual General Meeting on such remuneration as may be fixed by the Board apart from reimbursement of out of pocket expenses as may be incurred by them for the purpose of audit.

In accordance with Companies Amendment Act, 2017 enforced on 7th May, 2018 by Ministry Of Corporate Affairs, the appointment of statutory auditors is not required to be ratified at every Annual General Meeting.

During the year under review, M/s Mayank Shah & Associates, Chartered Accountants have informed to the company that their appointment, if made, would be within the limits prescribed under section 141 of the Act. They have also furnished a declaration confirming that their independence as well as their arm’s length relationship with the company and that they have not taken up any prohibited non-audit assignments for the company.

There are no qualifications, reservations or adverse remarks or disclaimers made by the auditors in their report on the financial statements of the company for the financial year ended 31st March, 2018. The notes on the Financial Statements referred to in the Auditors’ Report are self-explanatory and do not call for any comments or explanations.

- Secretarial Auditor

Pursuant to requirement of Section 204 of the Companies Act, 2013 M/s Rutul Shukla & Associates, Practicing Company Secretaries, has conducted secretarial audit of the company for the financial year 2017-18. Secretarial Audit Report given by Rutul Shukla & Associates, Practicing Company Secretaries is attached as Annexure-C.

There are no qualifications, reservations or adverse remarks or disclaimers made by the auditor in their report on the financial statements of the company for the financial year ended 31st March, 2018. The Secretarial Audit Report are self-explanatory and do not call for any comments or explanations.

- Cost Auditor

As per the requirement of Section 148 of the Companies Act read with the Companies (Cost Records and Audit) Rules, 2014, the Board of directors have, based on the recommendation of the Audit Committee, appointed V. H. Shah & Co., Cost Accountant, Ahmedabad (Registration No. 100257) to audit the cost accounts of the company for the financial year 2017-18. As required under the act, necessary resolution seeking members’ ratification for the remuneration payable to V. H. Shah & Co., is part of the notice.

The Cost Audit Report for the financial year 2017-18 will be submitted to the Central Government in the prescribed format within stipulated time period.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT

Particulars of loans and guarantees given and the investments made by the company as at 31st March, 2018 are forming part of financial statements. During the financial year under review, the company has made investments in schemes of various mutual funds market value of which as on 31st March, 2018 is Rs. 56.84 Crores.

24. PARTICULARS OF RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS

All contracts/ arrangements/ transactions entered by the company during the financial year with related parties were in ordinary course of business and on arm’s length basis. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all Related Parties transactions is placed before the Audit Committee for their approval on quarterly basis. There are no materially significant related party transactions that may have potential conflict with interest of the company at large.

The Particulars of RPTs are stated in note No. 43 in the financial statements of the company.

The policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board may be accessed on the company’s website www.mazdalimited.com.

The RPT policy of the company approved by the Board of Directors is displayed on website of the company.

25. STATE OF AFFAIRS OF THE COMPANY

The state of affairs of the company are mentioned in the Management Discussion and Analysis Report.

26. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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, except as disclosed elsewhere in the report.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT & FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed in terms of Section 134 of the Act, read with the Companies (Accounts) Rules, 2014, is attached as Annexure - D.

28. RISK MANAGEMENT POLICY

Your company has an elaborate Group Risk Management Framework, which is designed to enable to be identified, assessed and mitigated appropriately. The details related to risk management is given in the Management Discussion and Analysis Report.

29. CORPORATE SOCIAL RESPONSIBILITY POLICY (CSR)

Being a responsible Indian Corporate Citizen and guided by the prevailing regulatory requirements, the company has constituted a ‘Corporate Social Responsibility (CSR) Committee’ in accordance with Section 135 of the Companies Act, 2013 and framed a policy on CSR, summary of which together with details of CSR activities undertaken by the company during the year 2017-18 are available at the website of the company. Pursuant to provisions of Section 135 of the Companies Act, 2013, Mrs. Sheila Mody is the Chairperson of the Committee and Mr. Mohib Khericha and Mr. Percy Avari are members to the Committee.

Your company constantly identifies and implements unique initiatives which are scalable and sustainable and which have the capacity to create a positive impact on the lives of people especially the weaker and undeserved or marginalized sections by contributing to development of health and education of them.

This policy lays a framework to identify and implement different CSR initiatives of the company within the context of this policy and in alignment with relevant provisions of the Companies Act, 2013 while following high standards of Corporate Governance.

CSR Committee of the Board reviews, improves, directs and monitors effective implementation of this policy.

The requisite details on CSR activities pursuant to Section 135 of the Act and as per Annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014 are attached as Annexure - E.

30. PARTICULARS OF REMUNERATION OF MANAGERIAL PERSONNEL AND RELATED DISCLOSURES

The ratio of each director to the median employee’s remuneration and other details in terms of section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and remuneration of Managerial personnel) Rules, 2014 forms part of this report and is attached as Annexure - F.

The particulars of employees as required under section 197(12) of the Companies Act, 2013 read with rule 5(2) & 5(3) of the Companies (Appointment and remuneration of Managerial personnel) Rules, 2014 - Not Applicable.

31. REPORT ON CORPORATE GOVERNANCE

The company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Practicing Secretarial Auditors confirming compliance with the conditions of Corporate Governance to the Report on Corporate Governance is attached as Annexure-G.

32. SIGNIFICANT ORDERS PASSED BY THE REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANY’S OPERATIONS

To the best of our knowledge, the company has not received any such orders passed by the regulators, courts or tribunals during the year, which may impact the going concern status or company’s operations in future.

33. THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your company has always believed that appropriate standard of conduct should be maintained by the employees in their conduct and that there should be a safe, indiscriminately and harassment free (including sexual harassment) work environment for individual working in the company. It aims at prevention of harassment of employees and lays down the guidelines for reporting and prevention of sexual harassment.

The company has in place a policy against Sexual Harassment at workplace in line with the requirement of Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent and contractual) are covered under this policy. No complaints were received by the Committee during the year under review.

34. VIGIL MECHANISM / WHISLTE BLOWER POLICY

Your company has formulated and established a Vigil Mechanism Framework to enable Directors and Employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of Code of Conduct. The objective of this mechanism is to maintain a redressal system which can process all complaints concerning questionable accounting practices, internal controls or fraudulent reporting of financial information.

The mechanism framed by the company is in compliance with the requirements of the Act and Listing Regulations and available on the website of the company at www.mazdalimited.com.

35. APPRECIATION

Your Board of Directors would like to express their sincere appreciation for the assistance, co-operation and support received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Board of Directors also wish to place on record the deep sense of appreciation for the committed services by the company’s executive, staff and workers.

36. CAUTIONARY NOTE

The statements forming part of the Directors’ Report may contain certain forward looking remarks within the meaning of applicable security laws and regulations. The actual results, performance, achievements of the company may be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements.

For and on behalf of the Board,

Place : Ahmedabad

Date : 29/05/2018 Sorab Mody Percy Avari

Managing Director Whole-Time Director

Director’s Report