To
The Members,
The Directors are pleased to present the 64th Annual Report, together
with the audited standalone and consolidated Financial Statements for the Financial
Yearended on 31stMarch 2023.
1. Financial Results
(Rs In Lakh) Standalone
| Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
5,02,859 |
3,24,004 |
| Other Income |
6,203 |
5,188 |
| Profit / (Loss) before Depreciation, Exceptional Items &
Taxes |
32,305 |
7,759 |
| Depreciation |
24,074 |
19,094 |
| Profit / (Loss) before Exceptional Items and Tax |
8,231 |
(11,335) |
| Exceptional Items |
20,832 |
-- |
| Profit / (Loss) Before Tax |
29,063 |
(11,335) |
| Provision for Taxation |
13,858 |
(3,875) |
| Profit / (Loss) After Tax |
15,205 |
(7,460) |
| Other Comprehensive Income |
664 |
765 |
| Comprehensive Income for the year |
15,869 |
(6,695) |
| Equity Dividend |
1,318 |
659 |
| Balance in Retained Earnings |
1,48,572 |
1,34,472 |
(Rs In Lakh) Consolidated
| Particulars |
2022-23 |
2021-22 |
| Revenue from Operations |
5,02,898 |
3,24,042 |
| Other Income |
6,203 |
5,188 |
| Profit / (Loss) before Depreciation, Exceptional Items &
Taxes |
32,344 |
7,797 |
| Depreciation |
24,074 |
19,094 |
| Share of Profit/(Loss) of Joint Venture |
(1,860) |
(1,667) |
| Profit / (Loss) before Exceptional Items and Tax |
6,410 |
(12,964) |
| Exceptional Items |
20,832 |
-- |
| Profit / (Loss) Before Tax |
27,242 |
(12,964) |
| Provision for Taxation |
13,868 |
(3,865) |
| Profit / (Loss) After Tax |
13,374 |
(9,099) |
| Other Comprehensive Income |
669 |
771 |
| Comprehensive Income for the year |
14,043 |
(8,328) |
| Attributable to : |
|
|
| (a) Equity holders of the Company |
14,033 |
(8,337) |
| (b) Non-controlling Interest |
10 |
9 |
| Net Transfer to General Reserve |
5 |
5 |
| Equity Dividend |
1,318 |
659 |
| Balance in Retained Earnings |
1,42,749 |
1,30,489 |
We do not propose to transfer any amount to general reserve.
2. State of Company's Affairs and Future Outlook
It can be noted with pleasure that demand in the market for Company's
products has steadily risen over the last several quarters. After severe contraction of
business over 2 years, due to the impact of Covid where significant market segments like
school buses, employee transport and tour & travels were severely affected, today
fortunately all three markets are performing well, as was expected. From the last quarter
of the financial year 2022-23, the business has been steadily rising. Along with the top
line, the bottom line has also performed well. We do believe that this trend will
continue.
The new generation products introduced by the Company, comprising of
the completely new platform of Vans - an extension to the Traveler range - and branded the
"Urbania", also the very high-tech monocoque 33 and 41-seater Monobuses, (first
anywhere in the world - approximately 1 ton lighter than competition), and the very
attractive and rugged, the new platform of "Gurkha", are all seeing increasing
demand. The Urbania isin the initial stages of marketing. The foot print for sales is
being increased in a calibrated manner. Feedback from users is very positive and
encouraging, for all the three new technology and improved product platforms.
We now have, in full flow production the Engines meeting the rigorous
emission requirements of BS 6.2 level, while maintaining our excellent standards of
reliability and performance. The development of the latest engines enables us to offer
excellent power output and fuel economy, on the Traveller, Trax, Gurkha, Urbaniaand
Monobus series.
The Component businesses of the Company for supply of engines, both to
Mercedes-Benz India Pvt. Ltd. and BMW India Pvt. Ltd. has improved on robust demand
volumes. These high-end world-class vehicles, in the top bracket of the passenger car
market, are seeing good demand due to the stability and improving spending ability in the
market. The dedicated Plants for these products are functioning well.
Finally, while looking today at the future outlook, one can feel more
confident about the prospects of the Indian economy, and thereby of the essential
manufacturing industry over the next several years. The energy in the economy is higher
than before. Steadiness of demand and increasing opportunities to enter new segments, and
introduce world class products, is a matter which enthuses the Company's Management Team.
3. Change in Nature of Business, if any
During the year under review, there is no change in the nature of
business of the Company.
4. Dividend
The Board recommended a dividend of' 10/- per share for the year under
review, at its Meeting held on 29th May 2023. The same will be paid subject to the
approval of shareholders at the ensuing Annual General Meeting (aGm) of the Company.
The total payout w.r.t. the dividend recommended for the Financial Year
2022-23 will be' 13.18 Crore as against' 13.18 Crore for the previous financial year.
The details of dividend and shares transferred to the Investor
Education and Protection Fund during the year under review, are covered in the Report of
Corporate Governance.
5. Share Capital
The paid-up equity share capital as on 31st March 2023 was '13.18
Crore. The Company did not issue any shares by way of public issue, rights issue, bonus
issue or preferential issue etc. during the year under review. The Company has not issued
any shares with differential voting rights or granted stock options or sweat equity,
during the year under review.
6. Annual Return
The Annual Return as on 31st March 2023, pursuant to the provisions of
Section 92 of the Act and the Rules made there under, is available on the website of the
Company at https:// www.forcemotors.com/investors#shareholders-information.
7. Number of Meetings of the Board of Directors
The Board met four times during the financial year. The meeting details
are provided in the Corporate Governance Report that forms part of this Annual Report.
8. Particulars of Loans, Guarantees or Investments
The Company has not made any investments, given any loans, guarantees
under Section 186 of the Companies Act, 2013 ("the Act") during the year under
review. Particulars of investments made by the Company upto the period under report are
provided in the Financial Statement attached to this Report.
9. Particulars of Contracts or Arrangements with Related Party During
the Financial Year 2022-23, pursuant to Section 177 of the Act and Regulation 23 of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ('the SEBI (LODR) Regulations, 2015'), all Related Party Transactions
(RPTs) were placed before the Audit Committee for its approval.
During the year under review, the Company has not entered into RPTs in
excess of the limits specified under Regulation 23 of the SEBI (LODR) Regulations, 2015.
All RPTs entered during the year were entered in the ordinary course of
business and on arm's length basis. As required under the Act, the prescribed Form AOC-2
is a part of this Annual Report.
10. Explanation/Comments on any Qualification of the Auditors
There are no qualifications, reservations or adverse remarks made
either by the Statutory Auditors or by the Secretarial Auditor in their respective audit
reports.
11. Material Changes and Commitments
There have been no material changes and commitments affecting the
financial position of the Company, which have occurred after the end of the period under
review.
12. Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The Company has continued its efforts to ensure incremental
improvements in energy conservation across plant locations, various equipment etc. by use
of improved technological solutions.
Increasing use of solar power has enabled the Company to reduce its
dependence on normal power supply, utilising the large areas offered by factory roofing in
various plants.
The installation of 480 KW Solar Power Plant at Chennai Manufacturing
Facility, has been completed. Power generation from this plant will start after obtaining
necessary permissions. At the Chakan facilities of the Company, installation of solar
power plant having a capacity of 750 KW is in progress as on 31st March 2023. During the
year under review the Company has generated Solar Power of 8.71 Lakh KW at its Akurdi Pune
location which resulted in to annual electrical energy savings of' 90 Lakh and saving CO2
emission of 702 Tonne.
Efforts such as preventing compressed air leakages, using compressors
with optimum capacity and their periodic preventive maintenance, auto cut off systems,
localised switches, large scale switchover to LED lamps etc. have continued across all the
facilities of the Company.
Technology Absorption
Technology absorption efforts, though severely disrupted during the
Covid-19 pandemic, are continuing. The large scale use of virtual meetings and remote
working has enabled a reasonable level of activity to be maintained for most part of the
year.
(Rs In Lakh)
| Particulars |
2022-23 |
2021-22 |
| Capital Expenditure on R & D |
11,931 |
8,663 |
| Revenue Expenditure on R & D |
14,497 |
10,594 |
| Total R&D Expenditure |
26,428 |
19,257 |
| Total Income |
5,09,062 |
3,29,192 |
| % of total R&D Expenditure to Total Income |
5.19% |
5.85% |
| Revenue from Operations |
5,02,859 |
3,24,004 |
| % of total R&D Expenditure to Revenue from Operations |
5.26% |
5.94% |
Foreign exchange earnings and Outgo
The foreign exchange earned by the Company during the year under review
was of' 81.48 Crore as against' 92.82 Crore during the previous year.
Total foreign exchange outflow during the year under review was '
1,984.79 Crore as compared to ' 1,519.86 Crore during the previous year.
13. Subsidiaries
The Company has two subsidiaries, viz., Force MTU Power Systems Private
Limited (FMTU) and Tempo Finance (West) Private Limited.
FMTU was incorporated on 7th August 2018, as a joint venture between
the Company and Rolls-Royce Power Systems AG, through its subsidiary company, viz.
Rolls-Royce Solutions GmbH (erstwhile MTU Friedrichshafen GmbH) for engaging in the
business of development, manufacture and marketing of engines, engines for power
generation, complete power generators and engines for various applications like Rail. By
virtue of Company's majority shareholding, 'FMTU' is a subsidiary of the Company since its
incorporation.
The Company's subsidiary Force MTU Power Systems Private Limited (FMTU)
has now gone into smooth production after over two years delay, caused by Covid. Both, for
the ramp up of operations in India, and for demand from markets mainly abroad, the
situation is rapidly improving. There is good demand for the product. However, the
inflation in Europe (from where there still is significant import), is holding down the
margins.
Demand from various institutional customers in India and abroad is
encouraging. With increasing localization which is aggressively being taken up, margins
should improve and the stress on the bottom line of the subsidiary, it is hoped, should be
relieved by end of this financial year.
During the year under review, FMTU achieved a top line of' 231.61 Crore
as compared to top line of' 78.29 Crore during the Financial Year 2021-22. It recorded net
loss of ' 36.47 Crore during the Financial Year 2022-23, as compared to the loss of' 32.69
Crore, during the previous Financial Year.
Tempo Finance (West) Private Limited achieved a top line of' 0.39 crore
as compared to top line of' 0.38 Crore during the Financial Year 2021-22. It recorded net
profit of ' 0.29 Crore during the Financial Year 2022-23, as compared to the net profit
of' 0.28 Crore, during the previous Financial Year.
The Company does not have any other subsidiaries, joint ventures and
associate companies. During the year under review there was no change in the subsidiaries
of the Company. As per Section 129 of the Act, the Company has prepared the Consolidated
Financial Statement of the Company, which forms part of the Annual Report. A statement
containing the salient features of the Financial Statement of subsidiaries in the
prescribed format AOC-1, forms part of the Audited Financial Statements of the Company.
The Audited Financial Statements of the above mentioned subsidiaries
are available on the website of the Company www.forcemotors.com, for inspection by any
Member of the Company.
The policy for 'Determining Material Subsidiaries & its Governance
Framework' is also available on the Company's website www.forcemotors.com.
14. Risk Management
The Company has in place a comprehensive Risk Management framework to
identify, monitor, review and take all necessary steps towards mitigation of any risk
elements which can impact the business health of the Company, on a periodic basis.
All the identified risks are managed through continuous review of
business parameters by the Management and the Risk Management Committee. The Board of
Directors are also informed of the risks and concerns.
The details of composition and meetings of the Risk Management
Committee held during the financial year are covered in the Report on Corporate
Governance.
15. Changes in the Directors and Key Managerial Personnel
During the year under review, Mr. Pratap Pawar, Mr. S. Padmanabhan, Dr.
Indira Parikh, Mr. Arun Sheth and Mr. Nitin Desai ceased to be the directors of the
Company w.e.f. 12th September 2022, due to completion of second term as Independent
Directors. The Board placed on record its appreciation towards the valuable contributions
made by each of these Directors during their association with the Company.
Further, the shareholders approved appointment of Mr. Vallabh Bhanshali
(DIN : 00184775) and Mr. Mukesh Patel (DIN : 00053892), as Independent Directors of the
Company for aterm of 5 years w.e.f. 13th August 2022 and Ms. Sonia Prashar (DIN :
06477222) as an Independent Director of the Company for a term of 5 years w.e.f. 28th
September 2022, by way of passing Special Resolutions.
The shareholders of the Company also approved re-appointment of Mr.
Prashant V. Inamdar (DIN : 07071502), the Director of the Company, who was liable to
retire by rotation.
During the year under review, Mr. Kishore P. Shah resigned as the
Company Secretary and Compliance Officer of the Company w.e.f. 8th April 2022. Mr. Gaurav
Deshmukh was appointed as the
Company Secretary and Compliance Officer of the Company w.e.f. 27th May
2022.
Further, Mr. Gaurav Deshmukh, Company Secretary of the Company resigned
from the office effective from 13th May 2023. Consequent upon his cessation, Mr. Nikhil
Deshpande, was appointed as Company Secretary and Compliance Officer of the Company
effectivefrom 29th May 2023.
16. Declaration of Independent Directors
The Independent Directors have submitted their declarations to the
Board that they fulfill all the criteria of independence as stipulated in Section 149(6)
of the Act and in Regulation 16 (1)(b) of the SEBI (LODR) Regulations, 2015. The Board
after assessing its veracity, has taken the same on record.
17. Details of Significant and Material Orders Passed by the Regulators
or Court or Tribunal
There was no significant and material order passed by any regulator or
court or tribunal impacting the going concern status of the Company's operations in
future, during the year under report.
As reported earlier, petition challenging the decision of the Hon'ble
High Court of Judicature at Bombay, in respect of change in the name of the Company is
still under consideration of the Hon'ble Supreme Court of India.
18. Adequacy of Internal Financial Controls
M/s. Capri Assurance & Advisory Services, Chennai and M/s. Jugal S.
Rathi, Chartered Accountants, Pune, are the Internal Auditors of the Company. The internal
financial controls are adequate with reference to the financial status, size and
operations of the Company.
19. Fixed Deposits
The Company currently has no Fixed Deposit Scheme in place. The details
of earlier deposits are furnished hereunder:
| Sr. No. Particulars |
Nos. |
Amount (Rs In Lakh) |
| a) Accepted or renewed during the year |
0 |
0 |
| b) Remained unpaid or unclaimed as at the end of the year
(31st March 2023)* |
05 |
0.60 |
| 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 |
0 |
0 |
| (ii) maximum during the year |
0 |
0 |
| (iii) at the end of the year |
0 |
0 |
* The deposits are matured, claimed but have been withheld on the
instructions of the Statutory Authorities (CBI) and will be repaid up on their approval.
20. Corporate Social Responsibility (CSR)
The Annual Report on the CSR activities of the Company, pursuant to
Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed
to this Report.
21. Audit Committee
The Audit Committee of the Board consists of 3 members. Details of
composition of the Audit Committee are covered in the Corporate Governance Report. During
the year, all recommendations made by the Audit Committee were accepted by the Board.
The Company has established a vigil mechanism, formulated a
Whistleblower Policy, and the Committee oversees the genuine concerns expressed by the
employees and other Directors. The Company has also provided adequate safeguards against
victimization of employees and Directors who express their concerns. The mechanism
provides direct access to the Chairman of the Audit Committee in exceptional cases. The
details of the mechanism / policy are disclosed on the website of the Company
https://www.forcemotors.com/themes/frontend/docs/share-holder-info/other/Whiste-Blower-Policy.pdf
22. Policy on Directors Appointment and Remuneration
The Remuneration Policy of the Company and other related matters as
provided under Section 178 (3) of the Act are available on the website of the Company
https://www.forcemotors.com/ assets/Others/Remuneration-Policy-New.pdf. The Policy covers
criteria for recommending and approving the remuneration of non- executive and executive
directors, key managerial persons as well as senior management employees of the Company.
23. Formal Annual Evaluation of the Performance of Board / Committees
and Directors
Information on the manner in which formal annual evaluation is made by
the Board, of its own performance, that of its committees and the individual Directors, is
given in the Report on Corporate Governance.
24. Corporate Governance
The Company has taken all necessary steps to implement the provisions
of the SEBI (LODR) Regulations, 2015 and a detailed report on the various matters,
including the Auditors' Certificate on Corporate Governance, is annexed to this Report.
25. Business Responsibility and Sustainability Report
In terms of the Regulation 34(2) of the SEBI (LODR) Regulations, 2015,
the Business Responsibility and Sustainability Report (BRSR) forms part of the Annual
Report.
26. Details of Directors and Employees' Remuneration
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; 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; which form part of this report, will be
made available to any shareholder on request, as per provisions of Rule 5(3) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
27. Disclosure on Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013
The Company has adopted Anti-Sexual Harassment Policy, in line with the
requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints,
if any, received regarding sexual harassment. All employees, as defined under the said
Act, are covered under this policy. Awareness programs were carried out against sexual
harassment. There were no complaints received during the year under review. Further, there
are no complaints pending as on 31st March 2023.
28. Details of Frauds Reported by Auditors
There are no frauds against the Company reported by the Auditors for
the period underreport.
29. Directors' Responsibility Statement
The Directors of your Company to the best of their knowledge and
belief, and according to the information and explanations obtained by them, make the
following statements in terms of Section 134 (3)(c) of the Act:
(a) in the preparation of the Annual Financial Statements for the year
ended 31st March 2023, the applicable accounting standards have been followed along with
proper explanation relating to material departures;
(b) for the Financial Year ended 31st March 2023, such accounting
policies as mentioned in the Notes to the Financial Statements have been applied
consistently and judgments and estimates that are reasonable and prudent have been made so
as to give a true and fair view of the state of affairs of the Company and of the profit
of the Company for the year ended 31st March 2023;
(c) that proper and sufficient care has been taken 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 Annual Financial Statements have been prepared on a going
concern basis;
(e) that proper internal financial controls were followed by the
Company and that such internal financial controls are adequate and were operating
effectively;
(f) that proper systems to ensure compliance with the provisions of all
applicable laws were in place and that such systems were adequate and operating
effectively.
30. Secretarial Standards of the ICSI
The Company has complied with the Secretarial Standards on the Meetings
of Board of Directors (SS-1) and General Meetings (SS-2), as issued and amended, by the
Institute of Company Secretaries of India ('the ICSI').
31. Statutory Auditor
The Shareholders, at their 63rd AGM held on 28th September 2022, have
appointed M/s. Kirtane & Pandit LLP Chartered Accountants (Firm Registration No.
105215W/W100057), Pune, as the Statutory Auditors of the Company for the second term of
period of five years, i.e. upto the conclusion of the 68th AGM to be held in the year
2027, with an authority to the Board to decide / revise remuneration of the Statutory
Auditors from time to time during their term.
32. Cost Accountant
The Board of Directors of the Company had appointed M/s. Joshi Apte
& Associates, Cost Accountants, Pune, for verification and review of the Cost Records
of the Company, for the Financial Year 2022-23. M/s. Joshi Apte & Associates, Cost
Accountants, Pune, have verified and reviewed the said records for the Financial Year
2022-23.
Further, the provisions of Section 148 of the Act relating to
maintenance of cost records are applicable to the Company.
33. Secretarial Audit Report
SIUT & Co LLF, Practicing Firm of Company Secretaries having
Registration No. LLPIN: ABA-6960, was appointed to conduct the Secretarial Audit of the
Company for the Financial Year 2022-23, as required under Section 204 of the Act and Rules
made thereunder. The Secretarial Audit Report, in Form MR-3, for the Financial Year
2022-23, is annexed to this report.
34. Industrial Relations
The industrial relations at all the Plants of the Company have been
cordial during the year.
35. Appreciation
The Directors express their gratitude to the Dealers, Suppliers and
Banks for their support, and express their warm appreciation for the sincere co-operation
and dedicated work by the employees of the Company.
ANNEXURETOTHEBOARD'SREPORT
Details pertaining to remuneration as required under Section 197(12) of
the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014:
1. The ratio of the remuneration of each director to the median
remuneration of the Employees of the Company for the Financial Year 2022-23 & increase
in the remuneration in the Financial Year 2022-23:
| Sl. No. Name |
Ratio of Remuneration to each Director/
to median remuneration of employees |
% Increase / Decrease in the Financial
Year |
| (A) Whole-time Director / Managerial Personnel |
|
|
| 1. Mr. Prasan Firodia, Managing Director |
83.40 |
373.37* |
| 2. Mr. Prashant V. Inamdar, Executive Director (Operations) |
32.17 |
17.04 |
| (B) Non-Executive Directors # |
|
|
| 3. Mr. Arvind Mahajan |
NA |
NA |
| 4. Mr. Arun Sheth (Upto 12.09.2022) |
NA |
NA |
| 5. Mr. Pratap Pawar (Upto 12.09.2022) |
NA |
NA |
| 6. Mr. S. Padmanabhan (Upto 12.09.2022) |
NA |
NA |
| 7. Mr. Nitin Desai (Upto 12.09.2022) |
NA |
NA |
| 8. Dr. Indira J. Parikh (Upto12.09.2022) |
NA |
NA |
| 9. Lt. Gen. Dr. D. B. Shekatkar (Retd.) |
NA |
NA |
| 10. Mr. Vallabh Bhanshali (From 13.08.2022) |
NA |
NA |
| 11. Mr. Mukesh Patel (From 13.08.2022) |
NA |
NA |
| 12. Ms. Sonia Prashar (From 28.09.2022) |
NA |
NA |
| (C) Key Managerial Personnel |
|
|
| 13. Mr. Sanjay Kumar Bohra, Chief Financial Officer |
NA |
-1.11 |
| 14. Mr. Kishore P Shah, Company Secretary (Upto 08.04.2022) |
NA |
NA |
| 15. Mr. Gaurav Deshmukh (From 27.05.2022) |
NA |
NA |
Note: The% increase in remuneration is provided only for those
directors and KMP who have drawn remuneration from the Company for full FY 2023 and full
FY 2022. The ratio of remuneration to median remuneration is provided only for those
directors and KMP who have drawn remuneration from the Company for the full FY 2023.
* The % increase is due to payment of Commission on the net profits of
the Company for the Financial Year 2022-23.
# Non-Executive Directors are paid sitting fees only during the
Financial Year 2022-23.
2. Mr. Abhay kumar Firodia, Chairman of the Company, has not drawn any
remuneration from the Company during the year under review.
3. The percentage decrease in the median remuneration of employees
is-3%for the FinancialYear2022-23.
4. There were 5101 permanent employees excluding trainees and
contractual employees on the rolls of the Company as on 31st March2023.
5. The average percentage increase inthe salaries of employees other
than the managerial personnel in the Financial Year 2022-23 was - 2%, whereas average
percentage increase in the managerial remuneration was 130.44%for the same Financial Year.
6. It is affirmed that the remuneration paid is as per the Remuneration
Policy of the Company.
|