<dhhead>DIRECTORS REPORT</dhhead>
Dear Shareholders,
Your directors present the forty-eighth Annual Report along with the
audited financial statements for FY2023.
Company overview
Maharashtra Scooters Ltd. (‘MSL’ or ‘the Company’)
is an unregistered Core Investment Company (‘CIC’). As a CIC, a minimum of 90%
of its assets stand invested in the Bajaj group and the balance representing accumulated
surpluses is invested in debt and other instruments with the sole objective of earning a
reasonable rate of return whilst protecting the principal.
The Company also sees an opportunity in manufacturing of pressure die
casting dies, castings, jigs, and fixtures, primarily meant for the two and three -
wheeler industry amongst other industries, which is the current manufacturing activity of
the Company, though on a very limited scale basis.
Review of operations
During the year under review, the business operations of the Company
continued to be (i) treasury operations involving management of surplus funds invested by
the Company and (ii) manufacture of die casting dies, fixtures and die casting components,
primarily meant for the automobiles industry.
Total income of the Company during FY2023 is C 21,776 lakh, as against
C 19,446 lakh during the previous year. Income from investments aggregating to C 19,891
lakh represented major portion of the turnover, which during the previous year was C
17,691 lakh.
Financial Highlights
The highlights of the financial results are given below:
|
|
(C in Lakh) |
| Particulars |
FY2023 |
FY2022 |
| Total income |
21,775.53 |
19,445.60 |
| Gross profit before depreciation |
19,510.27 |
17,420.41 |
| Depreciation |
202.07 |
196.67 |
| Profit before tax |
19,308.20 |
17,223.74 |
| Tax expenses |
(220.64) |
2,952.39 |
| Profit for the year |
19,528.84 |
14,271.35 |
| Earnings per share (C) |
170.88 |
124.87 |
Continued classification as a Core Investment Company
Under the Master Circular Core Investment Companies (Reserve Bank)
Directions, 2016, as amended, the Company is termed as an unregistered CIC as per Reserve
Bank of India Guidelines dated 13 August 2020. As an unregistered CIC, the Company must
invest at least 90% of its net assets in Group companies, of which at least 60% must be
through equity investments.
The Company continued to meet the conditions for being classified as an
unregistered CIC, exempted from registration with Reserve Bank of India (‘RBI’).
The Company did not transfer any amount to reserves during FY2023 nor does it propose to
carry to any reserve during FY2024.
Dividend Distribution Policy
Pursuant to the provisions of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’), the
Company had formulated a Dividend Distribution Policy, which sets out the parameters and
circumstances to be considered by the Board in determining the distribution of dividend to
its shareholders and/ or retaining profit earned. The Dividend Distribution Policy enables
the Company to maintain a minimum dividend pay-out of 50% of distributable profit on
standalone basis each year. The policy is available on the website of the Company and can
be accessed at https://www.mahascooters.com/pdf/Dividend%20 Distribution%20Policy.pdf
Dividend
Final dividend
The Board of Directors recommend for consideration of the members at
the ensuing Annual General Meeting (‘AGM’), payment of final dividend of C 60
per equity share (600%) of face value of C 10, for the financial year ended 31 March 2023.
Interim dividend
The Board, at its meeting held on 13 September 2022, declared an
interim dividend of C 100 per equity share (1000%) of face value of C 10, for the year
ended 31 March 2023. The record date fixed for the purpose of declaration of divided was
23 September 2022. The total dividend pay-out on account of interim dividend was C
11,428.57 lakh.
The total dividend pay-out (including interim dividend) for FY2023
would be C 18,285.71 lakh.
The dividend declared/recommended is in accordance with the principles
and criteria set out in the Dividend Distribution Policy.
The dividend, if declared, at the ensuing AGM will be taxable in the
hands of the members of the Company pursuant to Income Tax Act, 1961. For further details
on taxability, please refer to Notice of AGM.
Subsidiary, associates and joint ventures
The Company neither has any subsidiary or associate nor the Company has
entered into a joint venture with any company.
Directors and Key Managerial Personnel (KMP)
(i) Director liable to retire by rotation
V Rajagopalan (DIN: 02997795) retires by rotation at the ensuing AGM
and being eligible, offers himself for re-appointment. Brief details of V Rajagopalan, who
is seeking re-appointment, are given in the Notice of AGM.
(ii) Changes in KMP: a) Resignation
Shriniwas Pathak, Manager & Chief Executive Officer, tendered his
resignation and was relieved from the services of the Company with effect from close of
business hours on 15 December 2022.
b) Appointment
Consequent upon the resignation of Shriniwas Pathak, the Board at its
meeting held on 19 October 2022, after taking into consideration the recommendation of
Nomination & Remuneration Committee, appointed Sanjay Uttekar as the Chief Executive
officer of the Company with effect from 16 December 2022.
Declaration by Independent Directors
The independent directors have submitted declaration of independence,
as required under section 149(7) of the Companies Act, 2013 (‘the Act’), stating
that they meet the criteria of independence as provided in section 149(6) of the Act and
Regulation 16 of the SEBI Listing Regulations, as amended.
The independent directors have also confirmed compliance with the
provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules,
2014, as amended, relating to inclusion of their name in the databank of independent
directors.
The Board took on record the declaration and confirmation submitted by
the independent directors regarding them meeting the prescribed criteria of independence,
after undertaking due assessment of the veracity of the same in terms of the requirements
of regulation 25 of the SEBI Listing Regulations.
Policy on Directors’ appointment and remuneration
The Board on the recommendation of the Nomination and Remuneration
Committee has framed a Remuneration Policy. The policy, inter alia, provides for: a) the
criteria for determining qualifications, positive attributes and independence of
directors; and b) a policy on remuneration for directors, key managerial personnel and
other employees. The policy is directed towards a compensation philosophy and structure
that will reward and retain talent and provides for a balance between fixed and incentive
pay reflecting short and long-term performance objectives appropriate to the working of
the Company and its goals.
The detailed Remuneration Policy is placed on the Company’s
website at https://www.mahascooters.com/pdf/ Remuneration%20Policy.pdf
Compliance with Code of Conduct
All Board members and senior management personnel have affirmed their
compliance with the Company’s Code of Conduct for FY2023.
A declaration to this effect signed by the Chief Executive Officer is
included in this Annual Report.
Annual return
A copy of the annual return as provided under section 92(3) of the Act,
in the prescribed form, which will be filed with the Registrar of Companies/Ministry of
Corporate Affairs within the Regulatory timelines will be hosted on the Company’s
website and can be accessed at https://www.mahascooters.com/investors. html#annualReports
Number of meetings of the Board
Six (6) meetings of the Board were held during FY2023. Details of the
meetings and attendance thereat forms part of the Corporate Governance Report.
Directors’ responsibility statement
In accordance with the provisions of section 134(3)(c) of the Act and
based on the information provided by the Management, the directors state that: a) in the
preparation of the annual accounts, the applicable Accounting Standards have been followed
along with proper explanation relating to material departure, if any; b) they 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 at the end of the financial year and of the profit of the
Company for that period; c) they 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) 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 and that
such internal financial controls were adequate and were operating effectively; and f) they
have devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
Audit Committee
The Audit Committee comprises of Yogesh Shah (DIN: 00137526) as
Chairman, Naresh Patni (DIN: 00045532) and Lila Poonawalla (DIN: 00074392) as members.
During FY2023, all recommendations of the Audit Committee were accepted
by the Board.
The brief terms of reference and attendance record of members are given
in the ‘Corporate Governance Report’.
Particulars of loans, guarantees and investments
The Company has not given any loans or provided any security. Full
particulars of the investments covered under the provisions of section 186 of the Act,
made by the Company are detailed in the Financial Statements attached to this Report.
Share capital
As on 31 March 2023, the paid-up share capital of the Company stood C
1,143 lakh consisting of 11,428,568 shares of C 10 each. There was no public issue, rights
issue, bonus issue or preferential issue, etc. during the year. The Company has not issued
shares with differential voting rights or sweat equity shares, nor has any scheme for
grant of stock option.
Related party transactions
All contracts/arrangements/transactions entered by the Company during
FY2023, with related parties were in compliance with the applicable provisions of the Act
and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained
for all related party transactions which are of foreseen and repetitive nature as well as
for transactions which are not foreseen and details of which are not available, up to the
limits as in the SEBI Listing Regulations. Pursuant to the said omnibus approval, details
of transactions entered into are also reviewed by the Audit Committee on a quarterly
basis.
All related party transactions entered during FY2023 were on arm’s
length basis and in the ordinary course of business of the Company under the Act and not
material under the SEBI Listing Regulations. None of the transactions required
members’ prior approval under the Act or SEBI Listing Regulations.
Details of transactions with related parties during FY2023 are provided
in the notes to the financial statements. There were no material related party
transactions requiring disclosure as per the Act. Hence, the prescribed Form AOC 2 does
not form a part of this report.
The Policy on Materiality of and Dealing with Related Party
Transactions is placed on the Company’s website and can be accessed at
https://www.mahascooters.com/pdf/Policy%20on%20Materiality%20of%20and%20
dealing%20with%20Related%20Party%20Transactions.pdf
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.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
Details pursuant to Rule 8(3) of the Companies (Accounts) Rules, 2014
| Conservation of energy |
Replacement of LED Lamps in
the factory has contributed in saving of electricity. |
| Technology absorption |
No expenditure was incurred
by the Company attributable to technology absorption during the year. |
| Foreign exchange earnings and Outgo |
The foreign exchange earned
by the Company during the year was Rs 41.66 lakh, while outgo was Rs 2.05 lakh. |
Corporate Social Responsibility (CSR)
Considering the CSR spend of the Company not exceeding fifty lakh
rupees, the Company is not required to constitute a CSR committee and the functions of the
CSR Committee are being discharged by the Board. Detailed information on CSR Policy and
its salient features forms part of ‘Annual Report on CSR activities’ which is
annexed to this Report.
The policy has been hosted on the website of the Company and can be
accessed at https://www.mahascooters.com/pdf/CSR%20Policy.pdf
The Chief Financial Officer has certified that the funds disbursed have
been utilised for the purpose and in the manner approved by the Board for FY2023.
Formal Annual Evaluation of the performance of the Board, its
Committees and Directors
Pursuant to section 178 of the Act, the Nomination and Remuneration
Committee (NRC) and the Board has decided that the evaluation shall be carried out by the
Board only and the NRC will only review its implementation and compliance.
Further as per Schedule IV of the Act and provisions of SEBI Listing
Regulations, the performance evaluation of Independent Directors shall be done by the
entire Board of Directors excluding the Director being evaluated, on the basis of
performance and fulfillment of criteria of independence and their independence from
management. Accordingly, the Board has carried out an annual performance evaluation of its
own performance, that of its Committees, Chairperson and individual Directors.
The manner in which formal annual evaluation of performance was carried
out by the Board for the period from 1 January 2022 to 31 December 2022, is given below: A
questionnaire-cum-rating sheet was deployed using an IT platform for seeking feedback of
the directors with regards to the performance of the Board, its Committees, the
Chairperson and individual directors, which is on the basis of the Board approved criteria
for evaluation of the Board, its Committees, Chairperson and individual directors.
From the individual ratings received from the directors, a report on
summary of ratings in respect of performance evaluation of the Board, its Committees,
Chairperson and individual directors for the period from 1 January 2022 to 31 December
2022 and a consolidated report thereof was arrived at. The report of performance
evaluation so arrived at was then noted and discussed by the Board at its meeting held on
21 January 2023.
The NRC reviewed the implementation and compliance of the performance
evaluation at its meeting held on 21 January 2023.
Under the law, as per the report of performance evaluation, the Board
shall determine, inter alia, whether to continue the term of appointment of an independent
director. Based on the report and evaluation, the Board and NRC at their meeting held on
21 January 2023, determined that the appointment of all independent directors may
continue.
For FY2023, the criteria and process followed by the Company was
reviewed by the NRC and the Board, which opined to be compliant with the applicable
provisions and found satisfactory. The criteria for evaluation of the Board, its
Committees, Chairperson and individual directors is placed on the website of the Company
and can be accessed at https://www.mahascooters.com/pdf/Board%20Evaluation%20Criteria.pdf
Other than the Chairman of the Board and the NRC, no director had access to the individual
ratings given by the directors.
Orders passed by the Regulators or Courts
During FY2023, there were no significant or material orders passed by
any regulator or court or tribunal impacting the going concern status and Company’s
operations in future.
Internal Audit
The internal audit function provides an independent view to its Board
of Directors, the Audit Committee and Senior Management on the quality and effectiveness
of the internal controls, risk management and governance related systems and processes.
At the beginning of each financial year, an audit plan is rolled out
after approval of the Audit Committee. The Audit Committee on a quarterly basis reviews
the internal audit reports. The Committee also reviews adequacy and effectiveness of
internal controls based on such reports. Significant audit observations, corrective and
preventive actions thereon are presented to the Audit Committee on a quarterly basis.
Internal financial controls
The Company has in place adequate financial controls commensurate with
its size, scale and complexity of operations with reference to its financial statements.
Internal financial controls of the Company are also similarly commensurate. These have
been designed to provide reasonable assurance about recording and providing reliable
financial information, ensuring integrity in conducting business, accuracy and
completeness in maintaining accounting records and prevention and detection of frauds and
errors.
The Board is of the opinion that internal financial controls with
reference to the financial statements were adequate and operating effectively.
Risk Management
Managing risk is fundamental to any business in general and in
particular to financial services industry. Considering the nature of business of MSL,
i.e., investments in securities of group companies for a long-term horizon, the risk
perceived is low. However, risks arising out of businesses of the group companies are the
key risks of the Company. MSL has a risk governance framework in place which provides an
integrated approach for identifying, monitoring and mitigating risks associated with its
business.
Key risks exposure of MSL includes market risk, credit risk, governance
risk, reputation risk and compliance risk. The Risk Management Committee of the Board,
assists the Board in monitoring various risks, review and analysis of risk exposures and
mitigation plans related to the Company.
A Risk Management Policy has been adopted by the Board of Directors
which, inter alia, sets out risk strategy, approach and mitigation plans, liquidity risk
management and asset liability management.
The group companies have their own risk management frameworks in line
with their strategic business operations as appropriate to the industry in which they
operate. Business operations of each of the group companies, the risks faced by them and
the risk mitigation tools followed by them are reviewed periodically by the Risk
Management Committees and the Boards of the respective group companies.
The details of meetings of Risk Management Committee of the Company and
the members who attended the same are mentioned in the Corporate Governance Report.
Whistle Blower Policy/Vigil Mechanism
The Company has a Whistle Blower Policy encompassing Vigil Mechanism
pursuant to the requirements of the section 177(9) of the Act and regulation 22 of the
SEBI Listing Regulations. The whistle blower framework has been introduced with an aim to
provide employees and directors with a safe and confidential channel to share their inputs
about such aspects which are adversely impacting their work environment. The Policy/Vigil
Mechanism enables directors, employees and other persons to report their concerns about
unethical behaviour, actual or suspected fraud or violation of the Company’s Code of
Conduct or ethics policy and leak or suspected leak of unpublished price sensitive
information.
During FY2023, there were no complaints received under the above
mechanism nor was any employee denied access to the Audit Committee. The Audit Committee
reviews the functioning of the Vigil Mechanism/Whistle Blower Policy once a year.
The policy is uploaded on the website of the Company and can be
accessed at https://www.mahascooters. com/pdf/Whistle%20Blower%20Policy.pdf
Corporate Governance
Pursuant to SEBI Listing Regulations, a separate section titled
‘Corporate Governance’ has been included in this Annual Report, along with the
reports on Management Discussion and Analysis and General Shareholder Information.
The Chief Executive Officer and the Chief Financial Officer have
certified to the Board with regard to the financial statements and other matters as
specified in the SEBI Listing Regulations.
A certificate from the statutory auditors of the Company regarding
compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility and Sustainability Report
Pursuant to amendment in SEBI Listing Regulations, top 1000 listed
entities based on market capitalisation are required to submit a Business Responsibility
and Sustainability Report (‘BRSR’) with effect from FY2023. Accordingly, the
Company, being one of the top 1000 listed entity, has adopted a policy on BRSR. A detailed
BRSR in the format prescribed by SEBI describing various initiatives, actions and process
of the Company towards the ESG endeavor forms the part of Annual Report and has also been
hosted on Company’s website at
https://www.mahascooters.com/investors.html#annualReports
Secretarial Standards of ICSI
The Company has complied with the requirements prescribed under the
Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings
(SS-2) read with the MCA circulars.
Auditors and Auditors’ Report
Statutory Auditors
Pursuant to the provisions of section 139 of the Act and based on the
recommendations of the Audit Committee and Board of Directors, the members at the 47th AGM
of the Company held on 25 July 2022, had appointed KKC & Associates LLP, Chartered
Accountants (Firm Registration No.105146W/ W100621) as the Statutory Auditors of the
Company, from the conclusion of 47th AGM till the conclusion of 52nd AGM, covering a term
of five consecutive years.
The statutory audit report given by KKC & Associates LLP, for
FY2023 does not contain any qualification, reservation or adverse remark or disclaimer.
Secretarial Auditor
Pursuant to the provisions of section 204 of the Act and Rules made
thereunder, the Company had re-appointed, Shyamprasad D Limaye, Practising Company
Secretary (FCS No. 1587, CP No. 572) to undertake the secretarial audit of the Company for
FY2023. The secretarial audit report for FY2023, as issued by him in the prescribed form
MR-3 is annexed to this Report.
The said secretarial audit report does not contain any qualification,
reservation or adverse remark or disclaimer made by the secretarial auditor.
Pursuant to Regulation 24A(2) of SEBI Listing Regulations, a report on
secretarial compliance for FY2023 has been issued by Shyamprasad D Limaye and the same
will be submitted with the stock exchanges within the given timeframe. There are no
observations, reservations or qualifications in the said report. The report will be
available on the website of the Company at
https://www.mahascooters.com/investors.html#stockExchange. The auditors i.e. statutory
auditors and secretarial auditors have not reported any matter under section 143(12) of
the Act, and therefore, no detail is required to be disclosed under section 134(3)(ca) of
the Act.
Statutory Disclosures
The financial results of the Company are placed on the Company’s
website at https://www.mahascooters. com/investors.html#financialResults Details as
required under the provisions of section 197(12) of the Act, read with rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended,
containing, inter alia, ratio of remuneration of Directors and KMP to median remuneration
of employees and percentage increase in the median remuneration, to the extent applicable,
are annexed to this Report.
Details as required under the provisions of section 197(12) of the Act,
read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended, will be made available to any member by way of email,
as per provisions of section 136(1) of the said Act. The provisions of section 148 of the
Act, are not applicable to the Company. Accordingly, there is no requirement of
maintenance of cost records as specified under sub-section (1) of section 148 of the Act.
The Company has a Policy on Prevention of Sexual Harassment at the workplace. There was no
case reported during the year under review, under the said policy. Further, as there were
no women employees employed in the Company during FY2023, the Internal Complaints
Committee has not been constituted as required under Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
There was no change in the nature of business of the Company during
FY2023.
Neither any application was made, nor any proceeding is pending under
the Insolvency and Bankruptcy Code, 2016, against the Company.
The Company has not accepted any fixed deposits under Chapter V of the
Companies Act, 2013 and as such no amount of principal and interest were outstanding as on
31 March 2023.
During FY2023, the Company had not borrowed any funds from any banks or
Financial Institutions.
Industrial relations
During FY2023, the industrial relations remained cordial.
On behalf of the Board of Directors
Sanjiv Bajaj
Chairman
DIN: 00014615
Pune: 24 April 2023
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