Your Directors are pleased to present 20th Directors Report on thebusiness and operations of your Company together with the Audited Financial Statements forthe year ended March 312016.
The financial highlights for the year under review compared to the previous financialyear are given below:
(Rs. in Millions except EPS data)
|PARTICULARS || |
| ||31.3.2016 ||31.3.2015 ||31.3.2016 ||31.3.2015 |
|Revenue from operations (Net) ||3110.72 ||3617.83 ||3111.16 ||5067.20 |
|Earnings before Interest Financial Charges Depreciation Tax & Amortization - EBIDTA ||79.07 ||(150.74) ||76.30 ||(43.06) |
|Less: Finance Cost ||273.91 ||308.99 ||274.44 ||323.67 |
|Less: Depreciation & amortization expenses ||244.27 ||262.87 ||245.36 ||276.29 |
|Add: Exceptional items ||70.59 ||66.24 ||70.59 ||66.24 |
|Add: Extraordinary items ||(16.11) ||341.07 ||(16.11) ||16.23 |
|Profit Before Tax ||(384.63) ||(315.29) ||(389.02) ||(560.55) |
|Tax Expense ||1.30 ||10.72 ||1.30 ||10.11 |
|Profit After Tax but before deducting minority interest(PAT) ||(385.93) ||(326.01) ||(390.33) ||(570.66) |
|Minority Interest || || ||(1.87) ||(1.44) |
|Profit Attributable to group || || ||(388.45) ||(569.22) |
|Earnings per Share (Basic) (in Rs.) ||(30.55) ||(25.57) ||(30.90) ||(45.47) |
|Earnings per Share (Diluted) (in Rs.) ||(30.50) ||(25.50) ||(30.85) ||(45.37) |
PERFORMANCE REVIEW (CONSOLIDATED BASIS)
Revenue from operations (Net) Rs. 3111.16 Million (Previous Year Rs. 5067.20Million).
Operating EBIDTA (Earnings before Interest Financial Charges Depreciation Tax& Amortization) increased from Rs. (43.06) Million (F.Y 2014-15) to Rs. 76.30 Million.
Profit Before Tax (PBT) increased from Rs. (560.55) Million (F.Y. 2014-15) toRs. (389.02) Million.
Profit after Tax (PAT) increased from Rs. (570.66) Million (F.Y. 2014-15) to Rs.(390.33) Million.
Performance on consolidated basis is not comparative because of sale of overseassubsidiary of the Company in the month of December 2014.
Since the Company has incurred loss during the year under review the Company does notpropose to transfer any amount to reserve.
The standalone revenue from operations of the Company for the year ended March 31 2016was Rs. 3110.72 Million (net of excise duty) down by 16% as compared to previous year ofRs. 3617.83 Million (net of excise duty). The fall in the price of Sheet Metal upto 11%which is the basic raw material for the Companys final products was the primereason for decrease in the revenue as compared to previous year. The bottom line of theCompany during the year under review is in negative but it would be significant to notehere that the loss of the Company for the year ended March 31 2016 before consideringincome from Extra-ordinary Items and Tax expenses decreased by Rs. 287.84 million i.e.43.85% as compared to previous year losses of Rs. 656.36 Million in spite of decline intop line. The Company could control the losses on account of various efforts taken duringthe year under review such as cost cutting in materials logistics maintenance manpowerincrease in operational efficiency consolidation of business etc.
On net basis the Company registered loss of Rs. 385.93 Million as compared to the lossfor previous year of Rs. 326.01 Million. Previous years Extra-ordinary Itemsincluded Profit from Sale of USA subsidiary of Rs. 341.07 Million.
The Auto-Component Industry is completely dependent on the performance of OriginalEquipment Manufacturers (OEMs). Stagnant position or nominal growth of the OEMs majorlyimpacted the performance of Auto-Component Industry. Your Companys performance isalso dependent on the performance of few OEM customers and segment in which the Companysupply its manufactured items.
In view of losses incurred during the year under review the Board of Directors do notrecommend dividend for the financial year 2015-16. No dividend was declared in theprevious year.
STATE OF THE COMPANYS AFFAIRS AND BUSINESS OVERVIEW
Your Company is operating in Auto-component Autoancillary sectors and last few yearshave been very tough for the Auto-Component Industry in India. Continued slump in vehiclesales not only curbed revenue growth for the component sector but also put severepressure on the cash flows and industrys ability to stand for survival. YourCompanys long standing position profitable investment well designed corporatestrategy and quality works helped to absorb the set back and could hold the strongposition in the Industry during the challenging times for Auto Industry.
After a bleak of few years the Indian automobile and autocomponent industry is showingsigns of a turnaround. According to data of Society of Indian Automobile Manufacturer(SIAM) the growth in domestic sales of passenger vehicles de-railed during 2013-14 whichrestored during the year 2014-15 and registered growth of 7.24% during the year 2015-16.The domestic sales of Commercial Vehicles registered growth of 11.50% during the year201516 over the period 2014-15.
The Government of India too is proactive and intervened positively on several countsfor the Industry. Reform in Government policy such as 100 per cent FDI under the automaticroute which encouraging the foreign investment in the automobile sectorMake-in-India campaign to make India a manufacturing hub plans to set up aseparate independent department for Transport comprising of experts from the automobilesector to resolve issues such as those related to fuel technology motor bodyspecifications and fuel emissions apart from exports giving boost to the Automobilesector.
Apart from government initiatives low manufacturing and labor cost accompanied byavailability of manpower large and growing domestic automobile market of Indiacompetitive advantages facilitating emergence of outsourcing hub etc. are the factorsdriving growth in the Indian auto component sector. The large overseas automotivecompanies like Volvo VW GM Bosch Magna etc. are investing into the Indian automotivemarket which will create not only a large market but a global manufacturing and export hubin India.
Your Company has geared up to grab the new opportunities generating from the positivedevelopment and industry promotion measures and the company has initiated various steps toovercome from the current distress position.
Issue of fresh Equity Shares on Preferential Basis
With the intention to infuse own long term funds in the Company the Board of theCompany with the approval of members of the Company has allotted 890000 Equity Shareshaving face value of Rs. 10/- each at a price of Rs. 70/- each (Including premium of Rs.60/- each) on preferential basis to the promoters of the Company in the Month of December2015. Thereby your Company has received capital to the tune of Rs. 6.23 Crores andutilized it for repayment of loans and working capital requirements. With this issue paidup share capital of the Company has increased to Rs. 132310540/- divided into13231054 equity shares of Rs. 10/- each. The newly allotted shares have been listed onNSE and BSE.
Set-up of new manufacturing facility at Chennai
Chennai has been emerged as an automobile hub in India and to tap this growing marketand to meet the requirement of existing valuable customers your Company has set up amanufacturing /assembly unit in Chennai on rented premises. Set up in Chennai will givecomfort and sense of local presence of the Company to new as well as existing customersand open up more business opportunities to the Company. This facility will be operationalby the end of second quarter of Financial Year 2016-17.
Launching of own products in Auto and Non-Auto Segment
As reported in previous Annual Report that your Company is in the process to enter intodesigning and manufacturing of four wheeler accessories and it has turned into reality.Your Company has launched its own designed and manufactured four wheeler accessories forselected models during the year under review. Your Company is confident that the growingfour wheeler accessories market in India will support the Company to capture accessoriesmarket gradually.
Your Company has also entered into hospital equipment like special foldable beds alltype of tables stands etc. by using existing infrastructure and available resources withthe Company. These new launches unfold strength and capabilities of your company and openup new opportunities even in the persisting adverse market conditions.
Installation of Durability Testing Chamber for ABC Pedal Assembly
Your Company is one of the major manufacturer of owned design Accelerator Brake &Clutch (ABC) pedals. Currently the Company is supplying pedals to renowned OriginalEquipment Manufacturers (OEMs) which contribute approx. 10% to its Top Line.
Accelerator Brake & Clutch (ABC) pedals are most important components in anautomotive. Designing of ABC Pedal Assembly plays a crucial role in enhancingdriving comfort safety & performance of the vehicle and also gives feeling ofconfidence and satisfaction to the Automobile manufacturers OEMs directly or indirectly.
Earlier the Company was dependent on one of the overseas resources for designvalidations process which was extremely time consuming and expensive.
A machine known as Durability Testing Chamber has been successfully installed andcommissioned at the premises of the Company during the year under review. This will putyour Company in the category of holding dominant position in Pedal Business in India andlead towards becoming a world leader in pedal business in near future.
Durability Testing Chamber is used to conduct the pedal box assembly Life cycle test bysubjecting the unit to environmental conditions of heat cold and humidity during a load /deflection cycle. Results of Accelerator Brake and Clutch (ABC) are examined underextreme or typical operating conditions. For continuous improvement in product quality andreliability it was important to build this rare testing facility in-house. This willboost the Companys commitment to convert their "Customers Satisfaction toCustomers Delight" by consistently striving hard and improving the Quality Cost& Delivery of the product and improve the profitability.
As reported in the previous Annual Report that Joint Lender Forum (formed by Bank ofBaroda The Catholic Syrian Bank Ltd Axis Bank Ltd. NKGSB Co-op. Bank Ltd. and VidyaSahakari Bank Ltd.) has approved restructuring of existing debts of the Company witheffect from December 1 2014 and issued their sanction letters. Accordingly the Companyhas got moratorium of 24 Months for payment of interest and repayment of principalinstallments. Interest rate has been reduced to 12% p.a. by all the Bankers of theCompany.
The Bankers had sanctioned fresh term loans of Rs. 25 Crores to support the Companyduring the process of debt restructuring and out of above Rs. 22 Crores have beendisbursed and balance of Rs. 3 Crores is expected to be disbursed shortly. Repayment offresh term loan and interest thereon will commence after moratorium period.
Financial assistance through Debt Restructuring revitalized the Company and the Companycould concentrate to generate more business which ultimately is the source of generatingfunds.
Diversification- Products as well as Customers
To tap Non-auto sector with minimum investment the Company had started working on theprojects of Indian Railways and Ministry of Defence and the process for VendorRegistration was completed in the previous year. During the year under review your Companyhas participated in various bids and received request for quotations (RFQs) for railwayand defence projects. The Company has also got valuable orders from Indian Railways andconfident for further orders.
Two years back your company had planned for customer diversification and results ofyour Companys efforts are very enthusiastic. The Company is working to bring theratio to 70:30 by March 2018. Your Company is also exploring business in constructionequipment sector and is in discussion with Tata Hitachi Wirtgen India and Hyundaiconstruction for supplying construction and earthmoving components/items.
Your Company has well planned manufacturing set up keeping in mind transportation costand adherence to strict delivery schedule. Your Company has also completed construction offactory shed/ building in 8100 Sq. mtrs of land situated at Plot No. 186 A of BelurIndustrial Area Dharwad. The Company is in the process to install plant and machinery byshifting the same from existing premises and/or purchase of balancing equipment/machinery.The Company is hoping to commence commercial production during 2nd half ofcurrent financial year. With these two new set up Dharwad as well as Chennai yourCompanys presence expanded and diversified as per the requirement of customers.
Your Company is having full of range of Mechanical / Hydraulic Presses right fromsmallest 40 Ton to highest 2000 Ton Capacity and is the one of few companies in Pune tohave 2000 Ton Capacity Press. Your Company is second largest in Pune for the Stateof the Art Tool Room with capability for making upto 3.5 Meter long Dies/ Tools andis spread over 60000 sq. ft. premises.
Your Company is supplying auto components and/or designing/engineering services toalmost all Domestic and International Original Equipment Manufacturers (OEMs) such asTata General Motors Volkswagen Ashok Leyland Nissan Renault Ford Fiat AMW AsiaMahindra Cummins etc. Your Company is providing Value Added Engineering Services in termsof both cost reduction and adaptation to Indian conditions with considerable cost savings.Continuous R & D efforts and development of new design and products is an ongoingactivity in the Company and make your Companys position strong in the auto industry.
Future Business Strategy
Your Company is focusing on optimum utilization of underutilized existinginfrastructure by grabbing the opportunity in Auto sector as well as non-auto sector. TheCompany is taking efforts to improve its performance and exploring various businessopportunities which can be executed with the support of existing infrastructure andminimum possible investment. Your Company has started to reap the fruits of hard work theCompany has procured new orders in addition of regular business from Tata Motors worthof approx Rs. 47 crores and Ford Motors worth of approx Rs. 6 crores in first two monthsof current financial year. The Company has received Request for Quotations (RFQs) near toRs. 130 crores from existing customers and Rs. 50 crores from new customers during theprevious year and till this reporting. Details on future business plans opportunitychallenges risks etc. are given in Management Discussion and Analysis Report which formspart of this Annual Report.
I. Autoline Industrial Parks Limited (AIPL)
AIPL was incorporated to develop Industrial Parks Township Projects etc. Movingtowards this object AIPL has purchased a piece of land at Village Mahalunge TalukaKhed District Pune (MH) India for setting up of Township under the Special TownshipProject (STP) of Government of Maharashtra. AIPL had received locational clearance onSeptember 10 2014 for the project and is pursuing for Environment Clearance for itsspecial township project and various other activities are also going on simultaneously.The Government of Maharashtra on the application of AIPL has extended the locationalclearance for further period of 1 year i.e. upto September 10 2016. Application forEnvironment clearance has been submitted to State Expert Appraisal Committee and is at theadvanced stage of approval.
II. Autoline Design Software Limited (ADSL)
ADSL is a multifaceted end-to-end Engineering Solutions Company that providesEngineering and Designing Software Services and Business Solutions. With the help andsupport of ADSL the Companys position to its customers has improved as a providerof high end design value engineering and massmanufacturing capabilities that cancontinually innovate through process engineering re-engineering and re-tooling to improvemanufacturing efficiency. The Company is able to provide one stop complete solution to itsvalued customers enabling a quick & fast response to customer from design concept torapid prototype manufacturing. With the help of proven team of Design Engineers Strongtool room and manufacturing backup ADSL is exploring new business opportunities withdifferent customers for off-shore and onsite engineering services.
ADSL has completed self-initiated projects of four wheeler accessories and medicalequipment for Autoline Industries Limited and the project of B562-I Pedal System (MT &AT) awarded by Ford India for worth of Rs. 1.74 crore during the year under review. ADSLis also working on couple of new projects of Ford Motors and other valuable customers andexpecting sizeable orders. ADSL is in hand one another self-initiative project and hopingfor successful execution in the current financial year.
III. Koderat Investments Limited Cyprus - (Koderat)
In September 2008 the Company acquired 100% stake in Koderat Investments Limited"Koderat" a Company incorporated and existing under the laws of Cyprus; actingas a Special Purpose Vehicle (SPV). Further "Koderat" acquired 49% equity sharecapital of "SZ Design Srl" and "Zagato Srl" Italian limitedliability companies Milan these companies are into the business of developing designingand providing engineering services.
The net worth of the SZ Design Srl has been eroded due to various write offs. SZDesign Srl has been declared bankrupt by the Tribunal of Milan on January 2 2015 andjudiciary receiver has been appointed by the Bankruptcy Tribunal. The impact thereof isyet to be ascertained.
Net assets value of Zagato Srl has turned into negative due to incurring of losses inprevious years and majority shareholder of Zagato Srl has passed resolution to excludeKoderat Investment Ltd. as a shareholder. Your Company is examining this matter carefullyand impact of thereof is yet to be ascertained.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in the prescribed Form MGT-9 is enclosed as"Annexure-A" to this Annual Report.
A Report on the performance and financial position of each of the subsidiaries of theCompany pursuant to Rule 8 (1) read with Rule 5 of Companies (Accounts) Rules 2014 inForm AOC-1 is annexed as "Annexure -B" and forms a part of this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company is duly constituted with adequate mix andcomposition of executive nonexecutive and independent directors. There were no changes inthe directors or key managerial personnel by way of appointment re-designationresignation death or disqualification variation made or withdrawn etc. with reference toreporting of details in previous annual report.
In accordance with the provisions of the Companies Act 2013 and CompanysArticles of Association Mr. Amit Goela (DIN: 01754804) Non-executive Director of theCompany is liable to retire by rotation at the conclusion of this Annual General Meetingand being eligible he has offered himself for re- appointment at upcoming Annual GeneralMeeting.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Companies Act 2013 the Directorshereby confirm that:
i) In the preparation of the Annual Accounts for the year ended March 31 2016 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures;
ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as on March 31 2016 and of the loss ofthe Company for that period;
iii) The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 theCompany and such controls are adequate and are operating effectively.
vi) The Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and such systems are adequate and are operating effectively whichare being further strengthened.
NUMBER OF BOARD MEETINGS
The Board of Directors duly met Seven (7) times in the year. The details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
Mr. Prakash Nimbalkar (DIN: 00109947) Mr. Vijay Thanawala (DIN: 00001974) and Dr.Jayashree Fadnavis (DIN: 01690087) are the Independent Directors on the Board of theCompany and have remained independent throughout the year as contemplated in section149(6) of the Companies Act 2013. Further all the Independent Directors have givendeclarations that they meet the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 and Regulation 16 (b) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Company familiarizes the Independent Directors through various Programmes regardingthe Company their roles rights and responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. The details ofsuch familiarisation programmes are put on the Companys website and can access atthe link http://www.autolineind.com/Rs.page id=916
Pursuant to the provisions of the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on various parameters such as levelof engagement contribution and independence of judgment; thereby safeguarding theinterest of the Company. The performance evaluation of the Independent Directors wascarried out by the entire Board. The performance evaluation of the Non-IndependentDirectors was carried out by the Independent Directors. The Board also carried out annualperformance evaluation of the working of its Audit Nomination and Remuneration as well asStakeholder Relationship Committee. The Directors expressed their satisfaction with theevaluation process.
NOMINATION & REMUNERATION COMMITTEE AND COMPANYS POLICY ON DIRECTORSAPPOINTMENT AND REMUNERATION
Your Company has duly established a Nomination and Remuneration Committee. TheCommittee has presented to the Board the policy with respect to appointment of directorsincluding criteria for determining qualifications positive attributes independence ofdirectors remuneration for the directors key managerial personnel and other senioremployees etc. and thereafter the Board approved the same. The Nomination and RemunerationPolicy of your Company is enclosed to this Annual Report as "Annexure-C".
The Non-executive Directors have no pecuniary relationship or transactions with theCompany. Further the Company makes no payments to the Non-executive Directors other thansitting fees which is in accordance with the provisions of the Companies Act 2013 and theRules made there under.
RISK MANAGEMENT POLICY
Your Directors have formed a Risk Management Committee chaired by Mr. Prakash Nimbalkar(DIN: 00109947). A Risk Management Policy is also in place. The Management has put inplace adequate and effective system and resources for the purposes of risk management.
At present your company has not identified any element of risk which may threaten theexistence of your company except the general and business risks as given under the paraThreats and Risks and Concern in Management Discussion and Analysis Report which formspart of this Annual Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Audit Committee of the Board. The Internal Auditors/AuditDepartment monitors and evaluates the efficacy and adequacy of internal control system inthe Company its compliance with operating systems accounting procedures and policies atall locations of the Company and its subsidiaries. Based on the report of internal auditfunction process owners undertake corrective action in their respective areas and therebystrengthen the controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted CSR Committee and composition of CSR Committee is given inthe Corporate Governance Report of the Company.
The Company has incurred losses during previous three financial years and hence theprovisions of Section 135 of the Companies Act 2013 with respect to CSR activities arenot applicable to your Company.
Your Company has established an Audit Committee whose composition and other details arementioned in the Corporate Governance report.
The Audit Committee on a regular basis gives its recommendation to the Board. TheBoard gives due consideration to those recommendations. However there have been noinstances of recommendations given by the Audit Committee not being accepted by the Boardduring the year under review.
M/s. A.R. Sulakhe & Co. Chartered Accountants (FRN 110540W) who are the statutoryauditors of your Company hold office in accordance with the provisions of the CompaniesAct 2013 up to twenty third Annual General Meeting of the Company and whose appointmentis subject to ratification by the Members at every Annual General Meeting and at aremuneration as may be decided by the Board. They have confirmed their eligibility forbeing Auditors of the Company under the Companies Act 2013 and that they are notdisqualified.
The Notes on financial statement referred to in the Auditors Report areself-explanatory and do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. KANJ &Associates Company Secretaries Pune a firm of Practicing Company Secretaries wereengaged by your Board for the purposes of Secretarial Audit for the year ended March 312016.
Secretarial Audit Report in terms of Section 204(1) is enclosed as "AnnexureD".
The Secretarial Auditors in their Secretarial Audit Report have observed that:
A. Listing Agreement
1. The audited financial results for the year ended 31st March 2015 werefled within the time limits prescribed under clause 41 (1) (c) (ii) of the ListingAgreement. However the same were not accompanied by the Auditors Report whichwas submitted to Stock Exchanges on 27th August 2015.
Comments by the Board of Directors: The Company inadvertently missed to submit theAuditors Report to the Stock Exchanges within prescribed time which resulted indelayed submission.
B. Foreign Exchange Management Act 1999
1. The Company has not fled Annual Performance Report of its wholly owned subsidiaryKoderat Investments Limited Cyprus for the financial year 2014-15. Thus to that extentit has not complied with Regulation 15 of the Foreign Exchange Management (Transfer orIssue of Any Foreign Security) Regulations 2000.
Comments by the Board of Directors: Koderat Investment Limited is acting as specialpurpose vehicle and acquired 49% stake of "SZ Design Srl" and "ZagatoSrl" Italian limited liability companies and these companies are into liquidation/bankruptcy stage and the audited accounts of these companies for the relevant period arenot released and made available to us and therefore the Audit of Accounts of KoderatInvestment Limited for the financial year 2014-15 is yet not completed and AnnualPerformance Report of Koderat Investment Limited (wholly owned subsidiary) has not filed.The Company will file the same immediately after receipt of Audited Accounts of KoderatInvestment Limited.
2. In the financial year 2014-15 the Company had disinvested its entire investmentin Autoline Industries Inc. USA a wholly owned subsidiary. However the Company has notyet fled part IV of Form ODI reporting such disinvestment as per the Foreign ExchangeManagement (Transfer or Issue of Any Foreign Security) Regulations 2000.
Comments by the Board of Directors: At the time of disinvestment in Autoline IndustriesInc. USA the Company applied for change in authorized dealer to facilitate inwardremittance. Since the RBI formalities relating to change in authorized dealer are still inprocess the Company could not file part IV of Form ODI reporting and will be filed as soonas the said formalities relating to change in Authorised dealer are completed.
Your Company has appointed M/s. Ketan H. Shah & Associates Chartered AccountantsPune as Internal Auditors for financial year 2016-17 under Section 138 of the CompaniesAct 2013.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism in the form of Whistle Blower Policy (WBP) to dealwith instances of fraud and mismanagement if any. The details of the Whistle BlowerPolicy is explained in the Corporate Governance Report and also posted on the website ofthe Company.
LOANS GUARANTEES AND INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Your Company has not accepted any deposits from the public falling within the ambit ofSection 73 under chapter V of the Companies Act 2013 and The Companies (Acceptance ofDeposits) Rules 2014.
RELATED PARTIES TRANSACTIONS
All related party transactions that were entered into during the financial year wereon an arms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons and their associates/relatives which may have a potential conflict with the interest of the Company at large.
All the Related Party Transactions were approved by the Audit Committee and also by theBoard wherever necessary. The Audit Committee has also granted omnibus approval forrelated party transactions that were repetitive in nature by following the requirements aslaid down in the Companies Act and Rules made thereunder Clause 49 of the erstwhileListing Agreement and Regulation 23 (3) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015.
The Company has not entered into any transactions with related parties during the yearunder review which require reporting in Form - AOC-2 in terms of Companies Act 2013 readwith Companies (Accounts) Rules 2014. The policy on Related Party Transactions and thePolicy on Determination of Material Subsidiaries as approved by the Board is also uploadedon your Companys website www.autolineind.com.
i. No significant or material orders were passed by the Regulators or Courts orTribunals which will impact the going concern status and Companys operations infuture.
ii. The Company has in place an Anti-Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) of the Company and its associates are covered under this policy.
During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
iii. The Company has not issued Equity Shares with differential rights as to DividendVoting or Otherwise.
iv. The Company has not issued shares (including Sweat Equity Shares) to employees ofthe Company under any Scheme.
v. No material changes and commitments occurred during April 1 2015 till the date ofthis Report which would affect the financial position of your Company.
vi. There has not been any change in the nature of business of the Company during theyear under review.
As per the Regulation a separate section on corporate governance practices followed byyour Company together with a certificate from the Companys Auditors confirmingcompliance forms an integral part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company prepared in accordance withrelevant Accounting Standards (AS) viz. AS 21 AS 23 and AS 27 issued by the Institute ofChartered Accountants of India form part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGICAL ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-E".
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as under:
|Sr. No. ||Particulars || |
|(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year ||Name of the Director || |
| ||Mr. Shivaji Akhade (DIN: 00006755) || |
| ||Mr. Sudhir Mungase (DIN: 00006754) || |
| ||Mr. Umesh Chavan (DIN: 06908966) || |
|(ii) Percentage increase in remuneration of each director CEO CFO and CS in the financial year 2015-16. ||Name of the Director & KMPs || |
| ||Mr. Shivaji Akhade || |
| ||Mr. Sudhir Mungase || |
| ||Mr. Umesh Chavan || |
| ||Mr. R T Goel (CFO) || |
| ||Mr. Ashish Gupta (CS) || |
|(iii) Percentage increase in the median remuneration of employees in the financial year 2015-16 ||0.55% |
|(iv) Number of permanent employees on the rolls of Company; ||1238 |
|(v) Explanation on the relationship between average increase in remuneration and Company performance ||The Company has incurred loss during the financial year 2015-16 of Rs. 385.93 million as compared to loss of Rs. 326.01 million during the financial year 2014-15 and after considering overall performance of the Company the remuneration was not increased during the financial year20l5-16 exceptforfew cases. |
|(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company; ||Performance of the Company was not satisfactory for the financial year 2015-16. Since the Company has incurred loss during the financial year 2015-16 of Rs. 385.93 million as compared to loss of Rs. 326.01 million during the financial year 2014-15 there is no increase in the remuneration of Key Managerial Personnel during the financial year 2015-16. |
| ||The remuneration paid to the KMP of the Company is in accordance with the remuneration policy of the Company which while deciding such remuneration gives due consideration to trend in the industry qualification experience contribution to Company past performance past remuneration and other relevant factors. |
|(vii) Variations in the market capitalization of the Company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies. ||Particulars ||March 31 2016 ||March 31 2015 |
| ||Market Capitalization ||Rs. 49.12 Cr ||Rs. 73.61 Cr. |
| ||PE Ratio ||(1.22) ||(2.33) |
| ||Market Capitalization decreased by 24.49 Cr. as compared to previous year (based on BSE and NSE average date). PE ratio is in negative because of losses incurred by the Company during FY 2014-15 and 2015-16. |
| ||The Company had allotted equity shares on public offer of equity shares on January 24 2007 at a price of Rs. 225/- each and closing price on BSE & nSe (Average) was Rs. 37.13 as on March 312016. Thus market price per share has decreased by 83.50% since last public offer. |
|(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||There is average 1% increment arrived in the salary of employees other than Key Managerial Personnel during the F. Y. 2015-16 on account of increment given to one group of Non-Managerial employees. There is no increase in the salary of Key Managerial Personnel. |
|(ix) Comparison of the each remuneration of the Key Managerial Personnel Against the performance of the Company ||The Company has incurred losses during the financial year 201516 of Rs. 385.93 million and during the financial year 2014-15 of Rs. 326.01 million. There is no increase in the remuneration of KMP during financial year2015-16. |
|(x) The key parameters for any variable component of remuneration availed by the directors ||The remuneration package of Mr. Umesh Chavan CEO & Executive Director contains variable component. The key parameters for the variable component are: |
| ||1. 1% of Net profit on new business developed by Mr. Umesh Chavan. |
| ||2. 10% on Cost reduction achieved in material and direct manufacturing costs every year as compared to previous financial years. |
|(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year. ||There are no employees in the Company who are paid remuneration in excess of the highest paid Director during the year. |
|(xii) Affirmation ||The Board affirms that the remuneration paid to the Directors and other employees is as per the remuneration policy of the Company. |
Information as per Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
Particulars of Employees whose remuneration aggregated to Rs. 60 Lakhs per annum or Rs.5 lakhs per month during FY 2015-16
|Sr. No. ||Name ||Age ||Designation ||Remuneration Total (Rs. in Million) ||Qualification ||Exp. in Years ||Date of Joining ||Last Employment ||Nature of Employment whether Contractual or Otherwise ||% of Equity Shares Held ||Whether any such employee is relative ofany Director and ifsonameofsuch Director |
|1 ||Mr. Shivaji Akhade ||50 ||Manging Director ||6.00 ||B.Com ||24 ||01-10 2011 || ||Contractual ||8.15 ||Mr. Sudhir Mungase (Whole-time Director) is brother-in -law of Mr. Shivaji Akhade |
|2 ||Mr. Umesh Chavan ||43 ||Executive Director & CEO ||6.00 ||BE MBA Ex. MBA ||22 ||06-06 2014 ||Cummins India Limited ||Contractual ||Nil || |
SHAREHOLDING OF DIRECTORS AS ON MARCH 31 2016
|Sr. No. ||Name of the Director ||DIN ||No. of Equity Shares ||Percentage Holding |
|1 ||Mr. Prakash Nimbalkar ||00109947 ||6700 ||0.05% |
|2 ||Mr. Shivaji Akhade ||00006755 ||1078681 ||8.15% |
|3 ||Mr. Sudhir Mungase ||00006754 ||1045958 ||7.91% |
|4 ||Mr. Umesh Chavan ||06908966 ||NIL ||NIL |
|5 ||Mr. Amit Goela ||01754804 ||125000 ||0.94% |
|6 ||CA Vijay Thanawala ||00001974 ||2525 ||0.02% |
|7 ||Dr. Jayashree Fadnavis ||01690087 ||NIL ||NIL |
INTER SE RELATIONSHIP BETWEEN DIRECTORS
There are no inter se relationships between the Directors except that Mr. SudhirMungase Whole-time Director of the Company is brother-in-law of Mr. Shivaji AkhadeManaging Director of the Company.
EMPLOYEES STOCK OPTION SCHEME - ESOS
In accordance with SEBI (Employee Stock Option Scheme and Employee Stock PurchaseScheme) Guidelines 1999 the Company has instituted Employee Stock Option Scheme 2008(Autoline ESOS 2008) pursuant to the Special Resolution passed by Shareholders at 12thAnnual General Meeting held on September 27 2008. As per Autoline ESOS 2008 160000Options were granted to 171 Permanent employees and 15000 options were granted to 5Independent Directors. During the year under review no options were exercised and twoemployees holding 1638 options have resigned.
These options are available for re-issue. The details of the scheme as per Companies(Share Capital and debentures) Rules 2014 SEBI (ESOP and ESPS) Guidelines 1999 and SEBI(Employee based benefits Scheme) Regulations 2014 are given in the "Annexure-F"to this Annual Report.
Your Directors express their sincere appreciation for the assistance and co-operationreceived from the various Central and State Government Departments customers vendors andlenders specifically Bank of Baroda The Catholic Syrian Bank Ltd. Axis Bank Ltd. NKGSBCo-op. Bank Ltd. Vidya Sahakari Bank Ltd. for extending financial support by way ofsanctioning Debt Restructuring Package and fresh term loans and to Tata Motors Ltd. TataCapital Financial Services Ltd. for their continued help and support during a verychallenging times of the Company. The directors also gratefully acknowledge the supportgiven by and trust entrusted by all shareholders of the Company and directors also wish toplace on record their deep sense of appreciation for unstinted commitment and committedservices by all the employees of the Company.
| ||For and on Behalf of the Board |
| ||Prakash Nimbalkar |
| ||CHAIRMAN |
|Pune May 28 2016 ||DIN: 00109947 |