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Automobile Products of India Ltd.

BSE: 505032 Sector: Others
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Automobile Products of India Ltd
NSE 05:30 | 01 Jan Automobile Products of India Ltd

Automobile Products of India Ltd. (AUTOPRODINDIA) - Director Report

Company director report

To

The Members

Automobile Products of India Limited

Your Directors are delighted in presenting their Sixty-Eighth Annual Reporttogether with the Audited Financial Statement for the financial year ended 31stMarch 2019.

1) FINANCIAL HIGHLIGHTS:

(Rs. In Lakh)

Particulars 2018-19 2017-18
Rs. Rs.
Total Income 122.10 212.55
Less Expenditure: 166.74 348.72
Profit/(Loss) before tax (44.63) (136.17)
Less: Tax Expenses:
- Earlier Year Tax (0.01) -
- Deferred Tax (1.96) (2.14)
Profit/(Loss) after tax (42.66) (134.03)

2) OPERATIONS:

Your Company earned a total income of Rs. 122.10 Lakhs during the financial year ended31st March 2019 as compared to Rs. 212.55 Lakhs in the previous year. TheCompany has incurred loss of Rs. 42.66 Lakh in the year under review as compared to theloss of Rs. 134.03 in the previous year.

3) MANAGEMENT DISCUSSION AND ANALYSIS:

Your company is focusing on various opportunities in businesses like vehicle managementservices trading in goods especially targeting B to B segment etc. Your Company istargeting to increase its focus in services sector which is growing at faster pace ascompared to other sectors.

4) DIVIDEND:

In view of the accumulated losses your Directors do not recommend payment of anydividend on equity shares.

5) RESERVES:

In view of the loss incurred during the year and the carried forward losses no amounthas been transferred to reserves.

6) EXTRACTS OF ANNUAL RETURN:

The details forming part of the extracts of the Annual Return in Form MGT-9 are annexedherewith as Annexure-A.

7) BOARD AND COMMITTEE MEETINGS:

a) Board Meetings:

During the financial year under review Five (5) meetings of the Board of Directorswere held on the following dates in due compliance with the Companies Act 2013(‘the Act') and Secretarial Standard – 1:

Apr – June July – Sep Oct – Dec Jan – Mar
30-May-18 13-Aug-18 14-Nov-18 22-Jan-19
- - - 13-Feb-19

The attendance of Director(s) at the meetings of the Board of Directors held during thefinancial year ended 31st March 2019 were as under:

Name of Director(s) Status No. of Board Meetings attended during the year
Shri. Shyam Agarwal Director 5
Shri Siddharth S Agarwal Director 2
Smt. Priti Kataria Independent Director 5
Shri Ramnivas Saboo* Independent Director 5

*Ceased to be a Director for details refer para 10(c) hereinbelow.

b) Audit Committee Meetings:

The Audit Committee presently comprises of the following Directors:

Sr. No. Names of the Members Designation Category
1. Shri Ramnivas R. Saboo* Chairman Independent Director
2. Smt. Priti P. Kataria Member Independent Director
3. Shri Siddharth Agarwal Member Director

*Ceased to be a Director for details refer para 10(c) hereinbelow.

During the year under review four (4) meetings of the Audit Committee were held on thefollowing dates:

Apr – June July – Sep Oct – Dec Jan – Mar
30-May-18 13-Aug-18 14-Nov-18 13-Feb-19

The attendance of Committee Members at the meetings of the Audit Committee held duringthe financial year ended 31st March 2019 were as under:

Sr. No. Name of the Members No. of Committee Meetings attended during the year
1. Shri Ramnivas R. Saboo 4
2. Smt. Priti P. Kataria 4
3. Shri Siddharth Agarwal 2

All the recommendations made by the Audit Committee were accepted by the Board.

c) Nomination & Remuneration Committee Meetings:

The Nomination and Remuneration Committee (‘NRC') presently comprises of thefollowing Directors:

Sr. No. Names of the Members Designation Category
1. Smt Priti P. Kataria Chairperson Independent Director
2. Shri Ramnivas R. Saboo* Member Independent Director
3. Shri Shyam Agarwal Member Director

*Ceased to be a Director for details refer para 10(c) hereinbelow.

During the year under review two (2) meetings of the NRC were held on the followingdates:

Apr – June July – Sep Oct – Dec Jan – Mar
30-May-18 - - 22-Jan-19

The attendance of Committee Members at the meetings of NRC held during the financialyear ended 31st March 2019 were as under:

Sr. No. Name of Members No. of Committee Meetings attended during the year
1. Smt Priti P. Kataria 2
2. Shri Ramnivas R. Saboo 2
3. Shri Shyam Agarwal 2

Upon resignation of Shri Ramnivas R. Saboo Independent Director the Boardre-constituted the NRC by nominating Shri Siddharth Agarwal for the time-being onlyfor the purpose to identify and re-commend the appointment of an Independent Director tothe Board/ shareholders as in compliance with Section 149 and Regulation 17 of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (‘LODR').

d) Stakeholders Relationship Committee Meetings:

The Stakeholders Relationship Committee (‘SRC') presently comprises of thefollowing Directors:

Sr. No Name Status Category
1. Shri Shyam Agarwal Chairman Non Executive Director
2. Shri R. R. Saboo* Member Independent Director
3. Smt. Priti Kataria Member Independent Director

*Ceased to be a Director for details refer para 10(c) hereinbelow.

During the year under review one (1) meetings of the SRC were held on the followingdates:

Apr – June July – Sep Oct – Dec Jan – Mar
30-May-18 - - -

The attendance of Committee Members at the meetings of SRC held during the financialyear ended 31st March 2019 were as under:

Sr. No. Name of Members No. of Committee Meetings attended during the year
1. Shri Shyam Agarwal 1
2. Shri R. R. Saboo 1
3. Smt. Priti Kataria 1

e) Independent Directors' Meeting:

The Independent Directors held their meeting without the attendance of Non-ExecutiveDirectors and members of management in compliance with Schedule IV of the Act to interalia: i) Review the performance of Non-Independent Directors and the Board as a whole. ii)Assess the Quality Quantity and timeliness of flow of information between the CompanyManagement and the Board that is necessary for the Board to effectively and reasonablyperform their duties.

8) SECRETARIAL STANDARDS (SS-1):

In accordance with Clause 9 of SS-1 the Company has complied with applicableSecretarial Standards during the year under review.

9) WHISTLE BLOWER POLICY/ VIGIL MECHANISM:

In pursuance of the provisions of section 177(9) & (10) of the Act a vigilmechanism for stakeholders directors and employees to report genuine concerns has beenestablished. Thus Whistle Blower Policy/ Vigil mechanism provides a mechanism for theDirectors/ Employees to report violations without fear of victimization of any unethicalbehavior suspected or actual fraud and violation of Code of conduct etc. which aredetrimental to the organization's interest.

The Directors and Employees of the Company can directly approach to the Chairman of theAudit Committee to report about any grievances.

10) DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'Responsibility Statement it is hereby confirmed:

i) that in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards have been followed and there is nomaterial departure from the same;

ii) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;

iii) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors have prepared the annual accounts for the year ended 31stMarch 2019 on a ‘going concern' basis.

v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi) that Directors had devised proper systems to ensure compliances with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

11) DIRECTORS:

a) Declaration from Independent Directors:

Your Company has received statements of declaration of Independence from Shri R. R.Saboo (DIN: 03294755) and Smt. Priti P. Kataria (DIN: 00088975) IndependentDirectors of the Company and these Directors have confirmed that they meet the criteria ofindependence as provided in Section 149(6) of the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

b) Retirement by Rotation:

Shri Shyam Agarwal (DIN: 00039991) Director of the Company retires by rotation at theensuing Annual General Meeting in accordance with the provisions of Section 152 of theAct and being eligible offers himself for re-appointment.

The Board recommends his re-appointment to the Members at their ensuing Annual GeneralMeeting.

c) Resignation of Shri Ramnivas R. Saboo:

Shri Ramnivas R. Saboo (DIN: 03294755) Independent Director of the Company hasresigned with effect from close of business hours on 30th May 2019 due to hispre-occupations.

The Board has placed its sincere appreciation for the valuable services rendered andcontribution made by him during his tenure. The Company is in a process of identifyingIndependent Director in place of Shri Ramnivas R. Saboo.

12) KEY MANAGERIAL PERSONNEL:

a) Resignation of Company Secretary:

Mrs. Palak Mehta Company Secretary and Compliance Officer of the Company of theCompany had resigned with effect from close of business hours of 30thNovember 2018.

The Board has placed its sincere appreciation for the valuable services rendered andcontribution made by her during her tenure as a Company Secretary.

b) Appointment of Company Secretary of the Company:

Pursuant to the provisions of Section 203 of the Act and Rule 8 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 and based on therecommendations of the Nomination and Remuneration Committee Ms. Aakanksha Mittal Memberof Institute of Company Secretaries of India bearing membership Number A57489 has beenappointed as a Company Secretary and whole-time Key Managerial Personnel of the Companywith effect from 22nd January 2019. Mr. Ajith Kathariya continues to be asChief Executive Officer and Mr. Indra Prasad Jain continues to be Chief Financial Officerof the Company.

13) FORMULATION OF POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIRREMUNERATION:

The Nomination and Remuneration Committee recommended and Board approved the policy forappointment and removal of Directors Key Managerial Personnel (‘KMP') SeniorManagement Personnel and other employees and their remuneration is aimed at commitment offostering a culture of high performance in line with its Vision Mission and Values. Thekey principles governing this remuneration policy are as follows:

i) Criteria of Appointment and Removal of Directors KMPs and Senior Management:

a. The Non-Executive Directors shall be of high integrity with relevant expertise andexperience so as to have a diverse Board.

b. In case of appointment of Independent Directors the Committee shall satisfy itselfwith regard to the independence of the Directors vis--vis the Company so as to enablethe Board to discharge its function and duties effectively.

c. The Committee shall ensure that the candidate identified for appointment as aDirector is not disqualified for appointment under Section 164 of the Act.

d. The Committee shall consider the following attributes / criteria whilstrecommending to the Board the candidature for appointment as Director:

i. Qualification expertise and experience of the Directors in their respective fields;

ii. Personal Professional or business standing;

e. In case of re-appointment of Non-Executive Director the Board shall take intoconsideration the performance evaluation of the Director and his or her engagement level.

ii) Remuneration:

The Remuneration Policy ("the Policy") is in line with aforesaid philosophy.The overall remuneration and practices are endeavored to be aligned and be consistent withthe organization's prevailing/ benchmark practices. The key factors governing formulationof the policy are in line with the provisions of Section 178(4) of the Act.

The Non-Executive Directors may be paid remuneration by way of sitting fees forparticipation in the Board / Committee meetings based on the recommendation of Nominationand Remuneration Committee and approval of the Board. The Board subject to the complianceof the Act may also consider payment of commission from time to time.

With regards to remuneration to persons other than directors the Company follows aholistic remuneration practice which are consistent with organization's philosophy visionand values and which supports to build capacity as well as capabilities of the manpower.

The copy of the aforesaid Policies will be available for inspection of members at theRegistered office of the Company during working hours and on the website of the Company athttp://www.apimumbai.com/investor-relations/policies-and-codes.aspx.

14) SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES:

The Company does not have any subsidiary joint venture associate companies.

15) BUSINESS RESPONSIBILITY REPORT:

The Business Responsibility Reporting (BRR) as part of the Annual Report as required byRegulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is not applicable to your Company for the financial year ended on 31stMarch 2019.

16) SIGNIFICANT AND MATERIAL ORDER:

There was no order passed by any regulator or court or tribunal impacting the goingconcern status of the Company and Company's Operations.

17) INTERNAL FINANCIAL CONTROLS:

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of Company's business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

18) AUDITORS

a) STATUTORY AUDITORS:

M/s. S G C O & Co. LLP Chartered Accountants Mumbai (ICAI Registration No.112081W/ W100184) the Statutory Auditors of the Company were appointed as the StatutoryAuditors of the Company for a term of 4 years upto the conclusion of the Annual GeneralMeeting of the Company to be held for the calendar year 2019.

Your Board has recommended to consider re-appointment of M/s. S G C O & Co. LLP asStatutory Auditors of the Company for a term of four (4) consecutive years upto theconclusion of the Annual General Meeting of the Company to be held in the calendar year2023 in accordance with the applicable provisions of Section 139 of the Companies Act2013.

The Company has received written consent from the Statutory Auditors to suchre-appointment and a certificate stating that they are qualified to act as StatutoryAuditors of the Company pursuant to Section 141 of the Companies Act 2013 and theirappointment if made would be within the statutory limits.

b) SECRETARIAL AUDITORS:

Pursuant to the provisions of Section 204 of the Act and Rule 9 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Shri Yogesh Singhvi Practicing Company Secretary to carry out the secretarialaudit of the Company for the financial year ended 31st March 2019. TheSecretarial Audit Report is annexed herewith as ‘Annexure B'.

As regard to the observation of the Secretarial Auditor your Company would like tostate that the Company was in BIFR since 2000 and the trading in the securities weresuspended since 2002. Further the Company has received an Initial Public Notice dated 19thMay 2018 pursuant to Regulation 22 (3) of the Delisting of Equity Shares Regulations2009 from the recognized stock exchange for compulsory delisting of shares since thetrading of the shares were suspended for more than six months. The Company has approachedthe Bombay Stock Exchange (BSE) for updating the Company's Capital in their recordshowever BSE has not been actively supporting the Company for updating the capital inspiteof repeated submissions. Upon the update of the capital in the records of BSE the sharesof the Company will be admitted for dematerialization with NSDL/CDSL. Thereafter theCompany will take necessary steps to comply with minimum public shareholding in terms ofClause 38 of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and other compliances relating thereto. The delay of oneday in printing of Annual Results in the newspaper was caused by the newspaper publicationhouse. The quarterly compliance report on Corporate Governance pursuant to Regulation27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 for thequarter ended 31st December 2018 was filed with a delay of one (1) day and thequarterly financial results for the quarter ended 30th September 2018 werepublished in the newspapers but the clipping of the newspapers were not submitted to theBombay Stock Exchange due to inadvertence.

c) INTERNAL AUDITORS:

M/s. C. R. Mohnot & Co. Chartered Accountants Mumbai (Firm Registration No.144750W) performed the duties of Internal Auditors of the Company to conduct internalaudit of the function and activities of the Company for the F.Y. 2018-19.

19) EMPHASIS OF MATTER MADE BY AUDITORS IN AUDIT REPORT:

With regards to the Emphasis of matter made by Auditors in their Audit Report aboutpresentation of accounts on principles of going concern despite complete erosion of NetWorth of the Company during the year under review your Directors would like to state thatthe Holding company of the Company has indicated its intention to extend the financialsupport to maintain the Company as a going concern. The same is also disclosed in Note No.31 to the financial statement annexed hereto.

Other than the aforesaid Emphasis of matter there are no adverse remarks/observations/ qualifications made by the Auditors in their report for the financial year2018-19.

20) PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Your Company has not given any Loan or any Guarantee or provided any security and hasnot made any investments in securities which are covered under the provisions of Section186 of the Act.

21) RELATED PARTY TRANSACTIONS:

During the year under review the Company has not entered into any related partytransaction falling within preview of Section 188 of the Act.

However the Company has made disclosures in relation to the transactions with therelated parties pursuant to Indian Accounting Standards (IND AS – 24) which areprovided in Note No. 25 forming part of the Financial Statement annexed hereto.

22) MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments occurred from the end of financial yearof the Company ended on 31st March 2019 till the date of this report that mayaffect the financial position of the Company.

23) CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING ANDOUTGO

The operations of your Company are not energy-intensive. However your Company wouldtake steps from time to time wherever required/possible to conserve energy. Your Companywould also take requisite actions in order to introduce technology for optimizing itsoperations.

During the year under review the Company has not imported any technology for itsoperations. During the year under review the Company has neither earned nor spent anyforeign exchange.

24) RISK MANAGEMENT POLICY:

The Company has formulated and implemented a Risk Management Policy for review andidentification of elements of risks. In the opinion of the Board there are no risks whichmay threaten the existence of the Company.

The Company has formulated Risk Management Policy and main objective of this policy isto ensure sustainable business growth with stability and to promote a pro-active approachin reporting evaluating and resolving risks associated with the business. In order toachieve the key objectives the policy establishes a structured and disciplined approachto Risk Management in order to guide decisions on risk related issues.

25) PUBLIC DEPOSITS:

During the year under review the Company has not accepted any deposit within themeaning of Section 73 of the Act.

26) CORPORATE SOCIAL RESPONSIBILITY:

Since the Company does not meet the prescribed threshold limit provisions of Section135 of the Act are not applicable to the Company.

27) BOARD EVALUATION:

Pursuant to the provisions of Section 178 134(3)(p) of the Companies Act 2013 readwith Schedule IV of the Companies Act 2013 the Nomination and Remuneration Committee(‘NRC') has carried out an annual performance evaluation of the Board the Directorsindividually as well as that of Committees.

The evaluation has been carried out based on evaluation questionnaire set for theBoard/ Committee and individual Directors. Each of the Directors submitted the evaluationform on the functioning and overall level of engagement of the Board and its committees onparameters such as composition quality quantity and timeliness of flow of informationdeliberations at the meeting etc. Thereafter the NRC reviewed the evaluationquestionnaire (including specific feedback) submitted by each of Directors as anindividual and also as the member of the Committee and/or Board. The NRC expressed itssatisfaction of the annual evaluation.

28) PARTICULARS OF EMPLOYEES:

i) The particulars of Employees within the meaning of Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are notapplicable as none of the Company's employees were in receipt of the remuneration of morethan Rs. 10200000/- during the year ended 31st March 2019 or more than Rs.850000/- per month during any part of the said year and therefore the details to bereported pursuant to Rule 5(2)(iii) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is also not applicable.

ii) Since none of the Directors have been paid any remuneration the disclosure underSection 197 (12) read with applicable Rules under the Act is not applicable.

iii) There were 5 permanent employees on the rolls of the Company as on 31stMarch 2019 and 5 employees in the previous year. There were 5 employees whose salaryincreased by an average of 12.90% over previous year whereas the Company incurred loss ofRs. 42.66 lakhs for the year.

iv) The remuneration paid to the employees are as per the remuneration policy of theCompany.

29) CHANGE IN THE NATURE OF BUSINESS IF ANY:

During the year under review the Company has not changed its business.

30) CORPORATE GOVERNANCE:

Pursuant to Regulation 15(2)(a) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the provisions relating to the disclosure pertaining toCorporate Governance shall not apply to the listed Companies having Paid up Equity ShareCapital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore as on thelast day of the previous financial year. Since the Company falls under the above criteriacompliance with the disclosure requirements of the Corporate Governance are not applicableto the Company.

31) DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT:

The report on Disclosures with respect to Demat suspense account or unclaimed suspenseaccount as stipulated under para F of the Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 are not required to be given as the shares ofthe Company are at present in Physical form. Your Company is taking steps to establish theconnectivity with National Securities Depository Limited (NSDL) and Central DepositoryServices Limited (CDSL). However the Capital Confirmation from Bombay Stock Exchange isawaited. The Company has approached the Bombay Stock Exchange (BSE) for updating theCompany's Capital in their records however BSE has not been actively supporting theCompany for updating the capital inspite of repeated submissions.

32) PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has adopted a policy on prevention prohibition and redressal of sexualharassment in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 [POSH Act] and applicable Rules madethereunder. However pursuant to the provisions of Section 6 of POSH Act the Company isnot required to constitute an Internal Complaints Committee since the Company has lessthan ten (10) workers or employees in the Company during the year. Accordingly complaintin respect thereof if any can be referred to ‘Local Complaint Committee' constitutedby district officer within the appropriate jurisdiction.

Further during the year under review there was no case reported under the said Policyto the Company.

33) SHIFTING OF REGISTERED OFFICE:

The Company has shifted its registered office from the State of Tamil Nadu to the Stateof Maharashtra. The registered office of the Company is situated at Unit No. F-1 1stFloor Shanti Nagar Co-Operative Industrial Estate Limited Vakola Santacruz (East)Mumbai - 400055.

34) ACKNOWLEDGEMENTS:

Your Directors take this opportunity to express their appreciation for the excellentassistance and cooperation received from all its stakeholders. The Board of Directorswishes to express its gratitude and record its sincere appreciation of the dedicatedefforts by all employees. Your Directors are thankful to esteemed shareholders for theirsupport and confidence reposed in the Company.

For and on behalf of the Board
Sd/- Sd/-
SHYAM AGARWAL SIDDHARTH AGARWAL
Place: Mumbai DIRECTOR DIRECTOR
Date: 30th May 2019 DIN: 00039991 DIN: 02055700