Menon Pistons Ltd

<dhhead>DIRECTOR’S REPORT</dhhead>

To,

The Members of Menon Pistons Limited

The Directors’ take pleasure in presenting the 47th Annual Report together with the Audited Standalone and Consolidated Financial Statements for the year ended 31st March 2024. The Management Discussion and Analysis Report have also been incorporated into this report.

Directors have tried to maintain coherence in disclosures and flow of the information by clubbing required information topic-wise and thus certain information which is required in Directors’ Report is clubbed elsewhere and has to be read as a part of Directors’ Report.

FINANCIAL HIGHLIGHTS : (Rs.In Lakhs)

* Lunar Enterprise Private Limited became wholly owned subsidiary of Menon Pistons Limited in previous year, hence previous year and current year figures are not comparable.

Note: Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.

CONSOLIDATED FINANCIAL STATEMENTS

As per Listing Regulations and applicable provisions of the Companies Act, 2013 ("the Act") read with the Rules issued thereunder, the Consolidated Financial Statements of the Company for the Financial Year 2023-24, have been prepared in compliance with applicable Accounting Standards and on the basis of Audited Financial Statements of the Company and its subsidiary Company, as approved by the respective Board of Directors. The Consolidated Financial Statements together with the Auditors’ Report forms part of this Annual Report.

STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK:

During the year the company has achieved turnover of Rs. 20882.11 Lakhs from operations as compared to Rs. 20821.08 Lakhs in previous financial year. Further, the Profit after tax for the year 2023-24 was to Rs. 2419.51 Lakhs

as compared to Profit after tax of Rs. 2364.27 Lakhs in previous financial year. This is another steady year of growth, despite performing in a highly competitive environment. The Company’s endeavour is to leverage its technology to meet the needs of the market and strengthen its position in its area of business.

The Management is continuously working on increasing the revenue and to give better results in coming years by introducing new technologically advanced products at competitive rates, by adding new customers by venturing into new market and areas. The company is continuously monitoring the economic conditions and has outlined certain measures to deal with the economic changes and to minimize the impact on its business.

TRANSFER TO RESERVES:

The Board of Directors of your company have decided not to transfer any amount to the reserves for the year under review.

DIVIDEND:

The Board of Directors of your company after considering the company’ performance and financial position recommended a final dividend of Re. 1/- (Rupee one only) per equity share of Re. 1/- each (i.e. 100%). The total outgo amounts to Rs.5,10,00,000/- (Rupees Five Crore Ten Lakhs only).

CHANGE IN NATURE OF BUSINESS, IF ANY:

During the year there was no change in the nature of business of the company.

SHARE CAPITAL OF THE COMPANY:

The paid up equity share capital as on 31st March, 2024 was Rs. 510 Lakhs. During the year there was no public issue, rights issue, bonus issue or preferential issue etc. The company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options.

PUBLIC DEPOSITS:

Your company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company has the following subsidiaries as on 31st March 2024:

1. Rapid Machining Technologies Private Limited

2. Lunar Enterprise Private Limited

Pursuant to the provisions of Section 129(3) of ‘the Act’, a statement containing salient features of the financial statements, highlights of performance of subsidiaries is attached as Annexure-1 to the Directors’ Report of the company in Form AOC-1.

The details regarding contribution of subsidiaries to the overall performance of the company during the financial year have been included in Consolidated Financial Statements of the company for the financial year 2023-24. During the year, no company ceased to be a subsidiary. The company also does not have any holding company.

The company has formulated a policy for determining material subsidiary(ies) and such policy has been disclosed on the Company’s website and its weblink is https://menonindia.in/wp-content/uploads/2023/02/Policy-on-Determining- Material-Subsidiary.pdf

Pursuant to the requirements of Regulation 34 (3) read with Schedule V of the Listing Regulations the details of Loans/ Advances made to, and investments made in the subsidiary company have been furnished in the Notes forming part of the Accounts. The audited accounts of both the Wholly Owned Subsidiary companies are placed on the company’s website.

MATERIAL CHANGES AND COMMITMENTS 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 to which the financial statements relate and the date of this report.

CREDIT RATINGS:

The following table provides information of the credit rating assigned to credit facilities.

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 act’ read with Rules 8 of the Companies (Accounts) Rules, 2014. The company has always strived to optimize energy consumption. Details of the same are provided in Annexure-2.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions which were entered into during the financial year were on an arm’s length basis and in the ordinary course of business. All related party transactions are placed before the Audit Committee and also before the Board and members of the company for their approval, as and when required.

The policy on related party transactions as approved by the Board of Directors is uploaded on the company’s website i.e. www.menonindia.in. Pursuant to the provisions of Section 134(3)(h) of the Companies Act, 2013 the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 and prescribed in Form AOC-2 of the Companies (Accounts) Rules, 2014 are appended as Annexure-3 to this report.

Related party transactions have been disclosed as a part of financial statements as required under Indian Accounting Standards issued by the Institute of Chartered Accountants of India. During the year approval of the members was taken by way of a special resolution passed through postal ballot on 23rd March, 2024 for the related party, which are at arm’s length and ordinary course of business as per provisions of Section 188 of the Companies Act, 2013 and the Listing Regulations.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNAL:

There are no significant material orders passed by the regulators/courts/tribunal which would impact the going concern status of the company and its future operations.

a) Appointment / Re-appointment

o Ms. Neha Avinash Marathe, Independent Director completed her first term as an Independent director on 31st October, 2023. Further after considering her integrity, expertise and experience, and based on the ecommendation of Nomination and Remuneration Committee, the board has re-appointed her as Independent Director for second term of three years, which has been further approved by the members of the Company by way of special resolution in the Annual General Meeting, held on 10th August, 2023.

o Based on the recommendation of Nomination and Remuneration Committee, the Board has appointed Mr. R C Nathan, as an Additional Director (Non-Executive & Independent Director Category) w.e.f. 01st February 2024 for the period of three years, which has been further approved as per the Listing Regulations and as per the provisions of the Companies Act, 2013, by the members of the Company by way of special resolution through postal ballot as on 23rd March, 2024.

o Ms. Sharanya Menon (DIN- 09159300) and Ms. Devika Menon (DIN: 09694895), who were appointed as an Additional Director (Executive) in the meeting of Board of Directors held on 29th May, 2024 with effect from 01st August, 2024 whose term expires at the ensuing Annual General Meeting of the Company and in respect of whom the Company has received a notice in writing under Section 160 of the Companies Act, 2013 from a member proposing their candidature for the office of Director under executive category.

o Mr. Sachin Menon who retires by rotation at ensuing Annual General Meeting and being eligible offers himself for re-appointment.

b) Cessation

o During the year Mr. Ajitkumar Belur has completed his tenure of second term as an Independent Director w.e.f. from 31st March, 2024. Except this no director is ceased from the office of the board of directors.

o During the year first term of Independent Director of Ms. Neha Marathe has been completed as on 31st October, 2023. Further she was appointed for second term of three years w.e.f. 01st November, 2023.

c) Committees of the Board:

The Board of Directors have constituted committees in order to effectively cater its duties towards diversified role under the Act and Listing Regulations.

Details of the constitution, terms of references 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 criteria for determining qualifications, positive attributes, independence of the directors and other matters provided under Section 178(3) of the Act and Listing Regulations adopted by the Board and details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. We affirm that the remuneration paid to the Directors is as 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 Board has carried out the annual performance evaluation. Details of the evaluation mechanism are provided in the Corporate Governance Report. A meeting of Independent Directors was held on 31st January, 2024 for evaluation of Board performance.

f) Declarations from the Independent Directors:

The company has received declarations from all the Independent Directors of the company confirming that they meet the criteria of independence as prescribed both under the Act and Listing Regulations.

g) Key Managerial Personnel:

The Key Managerial Personnel of the company as per Section 2(51) and 203 of the Act are as follows as on 31st March 2024:

NUMBER OF MEETINGS OF THE BOARD:

A calendar of meetings is prepared and circulated in advance to the Directors. During the year Four (4) board meetings were convened and held the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act, Secretarial Standards issued by the ICSI and Listing Regulations.

PARTICULARS OF LOAN, GUARANTEES, INVESTMENTS:

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report. (Refer note 2 of the financial statements)

MANAGEMENT DISCUSSION AND ANALYSIS REPORT AND CORPORATE GOVERNANCE REPORT:

As per Regulation 34(2)(e) of Listing Regulations, the Management Discussion and Analysis Report and the Corporate Governance Report is appended as a part of Annual Report. The company has obtained a Certificate from the Statutory Auditors confirming compliance 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.

ANNUAL RETURN:

The copy of annual return will be placed on website of the company i.e. www.menonindia.in under Investor Relations tab once the same is filed with Registrar of Companies. The Annual Return for the year 2022-23 has been uploaded on the same link.

RISK MANAGEMENT:

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 risks as also identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the Risk Management Committee on a quarterly basis.

ADEQUACY OF INTERNAL FINANCIAL CONTROL:

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act. The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your company for ensuring orderly and efficient conduct of business including adherence to your company’s policies, safeguarding of the assets of your company, prevention & detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The company has a Whistle Blower Policy which provides adequate safeguards against victimization of persons who may blow whistle. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the company or Letter to the Chairman of Audit Committee. Whistle Blower Policy may be accessed on the company’s website i.e.www.menonindia.in under Investor Relations tab.

We affirm that during the financial year 2023-24, no employee or director was denied access to 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 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, comprising of senior executives of the company. During the year 2023-24 there was no complaint received before the committee.

CODE OF CONDUCT COMPLIANCE:

A declaration signed by the Chairman & Managing Director affirming compliance with the company’s Code of Conduct by the Directors and Senior Management for the financial year 2023-24 as required by Schedule V(D) of the Listing Regulations 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 Board of 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 departures, if any;

b) 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 at the end of the financial year 31st March, 2024 and of the profit of the company for that period;

c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

e) 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; and

f) 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.

PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES:

The table containing the names and other particulars of employees in accordance with the 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.

INDUSTRIAL RELATIONS:

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 safety, imparted machine safety training, wearing protective equipment etc.

¦ STATUTORY AUDITORS:

The members of the company at the 45th Annual General Meeting held on 9th August 2022, approved the appointment of P G BHAGWAT LLP, Chartered Accountants, Pune, (FRN-101118W / W100682), for a second term of 5 (five) years to hold office till the conclusion of 50th Annual General Meeting of the Company. The Statutory Auditors have confirmed their eligibility and submitted the certificate in writing that they are not disqualified to hold the office of the Statutory Auditor.

As required under Regulation 33(1)(d) of the Listing Regulations, the Statutory Auditors have also confirmed that they hold a valid certificate issued by Peer Review Board of the Institute of Chartered Accountants of India.

The report given by P G BHAGWAT LLP, Chartered Accountants on the financial statements of the company for the financial year 2023-24 is a part of the Annual Report. The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the Statutory Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is to be disclosed as required under Section 134 (3)(ca) of the Act.

¦ INTERNAL AUDITOR:

Mr. Abhay Golwalkar, Chartered Accountant, Kolhapur was appointed to conduct the internal audit of the company for the financial year 2023-24, as required under Section 138 of the Act and the Companies (Accounts) Rules, 2014.

The company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board and also to the Managing Director. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Recommendations along with corrective actions thereon are presented to the Audit Committee and accordingly implementation has been carried out by the process owners.

¦ SECRETARIAL AUDITORS:

M/s. DVD & Associates, Practicing Company Secretaries, Pune was appointed to conduct the Secretarial Audit of the company for the financial year 2023-24, as required under section 204 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 2023-24 is appended which forms part of this Directors Report as Annexure-5.

Further as per the requirements of the Listing Regulations, Secretarial Auditors of the unlisted material subsidiary of the Company have undertaken secretarial audit of such subsidiary for financial year ended 31st March, 2024. The Secretarial Audit Report in Form MR-3 of such unlisted material subsidiary viz. Lunar Enterprise Private Limited is appended as Annexure-6. There are no qualifications, adverse remarks in the said Secretarial Audit Report.

The company has received the Annual Secretarial Compliance Report from M/s. DVD & Associates, Practicing Company Secretaries, Pune as per the provisions of Regulation 24A of the Listing Regulationsis appended which forms part of this Directors Report as Annexure-7.

There are no qualifications, reservations, adverse remarks or disclaimers made by the Secretarial Auditors in their report.

¦ 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 its manufacturing activity is required to be audited. Your Directors had, on the recommendation of Audit Committee, appointed M/s. C S Adawadkar & Co., Cost Accountants, Pune to audit the cost accounts of the company for the financial year 2023-24 on a remuneration of Rs.1.50 Lakhs.

As required under the Act the remuneration payable to the cost auditor is required to be placed before the members at a general meeting for their determination. Accordingly, a resolution seeking member’s determination for the remuneration payable to M/s. C S Adawadkar & Co., Cost Accountants, Pune for the year 2024-25 is included at Item No.4 of the notice convening the AGM. The Cost Audit Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL STANDARDS:

The company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI). The company has devised proper systems to ensure compliance 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 Social Responsibility 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 to be undertaken by the company, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR activities. Additionally, the CSR Policy has been uploaded on the website of the company at www. menonindia.in. During the year 2023-24, the company was required to spend Rs. 44,55,748.57/- towards Corporate Social Responsibility. However the Company has spent Rs. 46,40,327.52/- by way of directly as well as contribution to eligible charitable institutions for promotion of education, sports health care, poverty upliftment, social welfare, women empowerment and promotion of ancient art and culture. The details as per the provisions of rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 are annexed herewith as Annexure-8.

ACKNOWLEDGMENT:

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