Your Directors are pleased to present 22nd Directors Report on the business andoperations of your Company together with the Audited Financial Statements for the yearended March 31 2018.
The financial to the previous financial year are given below:
( Rs. in Lakhs except EPS data)
|PARTICULARS ||Standalone ||Consolidated |
| ||31.3.2018 ||31.3.2017 ||31.3.2018 ||31.3.2017 |
|Revenue from operations (including excise duty) ||39490.77 ||38961.55 ||39499.36 ||38966.47 |
|Earnings before Interest Financial Charges Depreciation Tax & Amortization EBIDTA ||759.21 ||1054.61 ||686.47 ||966.13 |
|Less: Finance Cost ||3667.21 ||3664.75 ||3686.03 ||3675.17 |
|Less: Depreciation & amortization expenses ||2224.88 ||2345.45 ||2225.98 ||2347.00 |
|Add: Exceptional items ||0.00 ||(3390.97) ||0.00 ||(3390.97) |
|Add: Extraordinary items ||0.00 ||0.00 ||0.00 ||0.00 |
|Profit Before Tax ||(5132.87) ||(8346.56) ||(5225.54) ||(8447.00) |
|Tax Expense ||0.00 ||(1259.86) ||12.26 ||(1256.24) |
|Profit After Tax but ||(5132.87) ||(7086.70) ||(5237.80) ||(7190.76) |
|before deducting || || || || |
|minority interest(PAT) || || || || |
|Other Comprehensive ||(1.93) ||(6.38) ||0.47 ||(5.90) |
|Income || || || || |
|Minority Interest ||0.00 ||0.00 ||(50.93) ||(64.91) |
|Profit Attributable to ||(5134.80) ||(7093.08) ||(5186.40) ||(7131.75) |
|group || || || || |
|Earnings per Share ||(28.46) ||(49.58) ||(29.05) ||(50.31) |
|(Basic) (in Rs. ) || || || || |
|Earnings per Share ||(28.45) ||(49.57) ||(29.03) ||(50.30) |
|(Diluted) (in Rs. ) || || || || |
Note: The previous years figures are made comparable with current yearsfigures due to IND AS applicability in the current year.
PERFORMANCE REVIEW (CONSOLIDATED BASIS)
Revenue from operations (including excise duty) Rs. 39499.36 Lakhs (Previous Year Rs.38966.47 Lakhs).
Operating EBIDTA (Earnings before Interest Financial Charges Depreciation Tax &Amortization) decreased from Rs. 966.13 Lakhs to Rs. 686.46 Lakhs.
Profit Before Tax (PBT) increased from Rs. (8446.90) Lakhs to Rs. (5225.54) Lakhs.
Profit after Tax (PAT) increased from Rs. (7190.76) Lakhs to Rs. (5237.80) Lakhs.
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 2018was Rs. 39490.77 Lakhs (net of excise duty) up by approximate 8% as compared to previousyear of Rs. 38961.55 Lakhs (net of excise duty) mainly due to increase in order of TataMotors Ltd. The Company registered net loss of Rs. 5132.87 Lakhs as compared to theprevious years loss of Rs. 4955.60 Lakhs before exceptional items. The net loss ofthe Company increased marginally mainly because of increase in raw material cost and underutilization of capacity.
During the year under review your Company strongly focused to develop new customersand advance products and to increase highlights for the year under review compared salesvolume. Despite of incurring losses it could effectively manage acute cash flow byimproving operational efficiencies. To emerge from the current distress situation yourcompanys efforts are well under way which include carrying out strong financialdiscipline and to utilize surplus capacity and existing infrastructure of the Company andthe outcome of the same shall be visualized in the coming years.
In view of losses incurred during the year under review the Board of Directors do notrecommend dividend for the financial year 2017-18. No dividend was declared in theprevious year.
STATE OF THE COMPANYS AFFAIRS AND BUSINESS OVERVIEW
Your Company is one of the largest automotive sheet metal components manufacturer inIndia and engage in production of Heavy Sheet Metal Components & Assemblies ExhaustSystem Pedal System Door Assemblies Load body Door hinges & Skin panels etc. andsupply to OEMs directly. Automobile industry accounts for 7.1% to Indias GrossDomestic Product (GDP). Financial Year 2017-18 turned out to be a major success for theIndian automotive industry which has registered almost double-digit growth during lastfiscal year.
The countrys domestic sales and exports in the automotive market saw a majorsurge across all segments. In the domestic market the passenger vehicle market saw agrowth of 7.89% with a sale of 3.28 million vehicles in April to March 2018 majorly ledby utility vehicle sales which itself saw a growth of 20.97%. Within the passengervehicles segment a sale of passenger cars utility vehicle and vans grew by 3.33% 20.97%and 5.78% respectively over the same period last fiscal year.
Prospectus of the auto components industry for Financial Year 2018-19 looks veryattractive and expecting the Indian automotive industrys growth to carry themomentum forward in upcoming years across a majority of segments. Increased vehicle demandwould convert into increased revenue for the components industry. Your Company isconstantly striving to grab and retain new opportunities generating from the positivedevelopment and industry promotion measures.
During the recently concluded fiscal year your Company took a number of initiatives tooptimize the operations and derisk the business while making all the possible attempts tobring the pace back.
Issue of fresh Equity Shares on Preferential Basis
With the intention to infuse own long term funds in the
Company and finance the working capital requirements of the Company along withrepayment of loans the Board of the Company with the approval of members of the Companyhas allotted 4969134 Equity Shares having face value of
Rs. 10/- each at a price of Rs. 81/- each (Including premium of
Rs. 71/- each) on preferential basis to the promoters of the
Company and other strategic investors in the Month of November 2017. Thereby yourCompany has received capital to the tune of Rs. 40.25 Crores and utilized it for repaymentof loans and working capital requirements. With this issue paid up share capital of theCompany has increased to Rs. 210001880/- divided into 21000188 equity shares of Rs.10/- each. This will also support the Net Worth of the Company. The newly allotted shareshave been listed on BSE Limited and National Stock Exchange of India Limited.
Overseas Business Association
With an aim to make presence in overseas market and to increase operating efficienciesand to achieve cost optimization your Company entered into Memorandum of Understandingwith T. S. Eng. Co. Ltd Korea ("Tae Sung") on April 19 2018 for gettingtechnical assistance for low cost manufacturing of stamping die prototype parts pedalbox automotive camera etc. and to collaborate with Tae Sung for the development ofproducts as well as markets local and overseas. Tae Sung Group has worldwide presence as amanufacturer and supplier and it is the forefront Enterprise for Automotive Die andElectronics Stamping Part Design and First Grade Supplier to the various OriginalEquipment
Manufacturers (OEMs). Your company is confident about the new venture and this willsurely help to develop new innovative products cost control methodologies and develop newcustomer base.
Both the parties after getting success in technical collaboration may proceed to setup joint venture. The discussion is going on to finalize the technical assistanceagreement.
Consolidation of Business
Currently your Company is operating through 8 manufacturing facilities and in-houseTool & Design Centre. Your Company believes that it can save money and operate moreefficiently by reducing the number of facilities in a business. This consolidation canalso improve communication between business functions such as production and marketingand achieve savings by decreasing head counts overheads and consolidating systems andprocesses. To unlock the benefits of business consolidation the Company during the yearunder review has shifted one of its manufacturing facility situated at F-II 24/25 MIDCPimpri Pune ("F-II Plant") to its existing units where the infrastructure werealready available to get settle the F-II Plant. After shifting of manufacturing facilitiesof F-II plant the Company has disposed-off leased hold land and building constructedthereon for a consideration of Rs. 11.00 Crores the fund has been used for repayment of aterm loan availed from Axis Bank Ltd which will reduce finance cost to the Company.
Your Company is further planning to consolidate one more unit situated at Survey No.613 Mahalunge Chakan Pune to achieve the object of cost reduction and improve theoperational performance and the sale proceeds will be used for the repayment of entireoutstanding loan amount of Axis Bank Ltd. (Pledgee of above asset) and thereby theCompany will be able to get free its other assets which are charged to Axis Bank. Thisconsolidation will give multiple benefits to the Company.
New Products Diversification - Products as well as
In order to derisk the business from dependence on Auto and Single customer inparticular the company has identified various non-auto projects which can be started onexisting infrastructure with low investments likewise your company is working to developnew customers or to get new projects of the existing customers; some of these includeHyundai Constructions Mahindra Ashok Leyland Tata Hitachi etc. and new product linessuch as pollution control units tooling projects etc. The Company has also designed andis under development stage of e-cycle which is a niche and growing market in the country.Although the agenda of diversifying to non-auto businesses has been on radar for severalyears now whose launching delayed due to the working capital shortage. Going forward asworking capital pressure eases gradually the Company would be able to capitalize theseniche products.
Future Business Strategy
Under utilization of capacity and shortage of working capital are the prime concern toaddress to achieve the turnaround of the Company. Your Company does not need to investanything substantial to reach a top-line of Rs. 800 to Rs. 1000 crores which manifeststhe current under-utilization of assets and very low requirement for capex over the nextfew years. For the current fiscal year the company is targeting a turnover in between Rs.520 to 540 crore which is capable to generate cash flow operation. Though the currentturnover is primarily driven by the committed orders from Major customer the Managementis keen on diversification to reduce the over dependency on its major customer andauto-sector and most of actions are in line with drive. The Management expects thebottom-line to turn black in next fiscal and will be able to receive additional subsidyfor its to units. The Company carried out debt restructuring exercise in 2014 with thehope of coming out cash flow mismatches. Though the company has improved its operationssince then but still faces cash flow mismatches to honour its debt obligations on timeapart from working capital shortage to execute orders on hand. The Company is planning toreduce its debts substantially and taking steps to un-lock values of non-core assets. Forthis purpose the Company is working on various fund raising options to raise funds inbetween Rs. 100 to 115 crores and to attain this target your Board is in discussion withvarious reputed investment funds and investors to get equity funds in the Company.
Further your Company has applied to the Government of Maharashtra for grant ofIndustrial Promotion Subsidy for Mega Project under Package Scheme of Incentive 2007("IPS") for its two more units where the fresh investment was made by theCompany in addition of currently enjoying VAT/ CST Subsidy for its one unit situated atChakan since 2009 and the Company is expecting to get the approval during the currentfiscal and will be able to receive additional VAT
Subsidy for its two units.
In addition of above the efforts are going expeditiously towards monetization oftownship land of its Subsidiary Company since Subsidiary company has entered intoMemorandum of Understanding with Poddar Habitat Pvt. Ltd. a Mumbai based Developer(Subsidiary of Poddar Housing and Development Ltd.) on August 22 2017 to discuss theproject and the discussion is in process with the said Developer for Joint development ofproject or otherwise monetize the township land. Your Board is assured that townshipproject would be one of the milestone to result in turnaround the Company. Your Board isalso exploring other strategic options to maximise the value of investment made by yourCompany in its subsidiary.
Your Company is constantly in discussion with its prime customer for extending pricerise of its supply on account of increased cost of inflation and award new business to the
Company since your Company is key supplier partner of Tata Motors. To get support fromthe lenders of the Company your Company is working on various proposals.
Your directors are confident that all the above efforts shall bring back your companyinto the growth path. Further details on opportunity challenges risks and concern etc.are given in Management Discussion and Analysis Report which forms part of this AnnualReport.
SUBSIDIARIES AND THEIR PERFORMANCE:
i Autoline Industrial Parks Limited Pune India (AIPL):
Autoline Industrial Parks Limited (AIPL) a subsidiary of the Company owned andpossessed Township Land spread in 104 acres of land at Village Mahalunge Taluka KhedDistrict-Pune (MH) India for setting up of Township under the Integrated Township Project("ITP") of Government of Maharashtra. AIPL had received locational clearance onSeptember 10 2014 and was pursuing for Environment Clearance for its township project andvarious other activities are also going on simultaneously. The Directors are pleased toinform that AIPL has received Environment Clearance (EC) from the Ministry of EnvironmentForest & Climate Change Government of India on November 22 2017.
Also District Collector Pune vide its letter no. Khed/NA/ SR/23/2018 dated March 312018 has issued the Letter of Intent (LOI) valid for two years for commencing the furtheractivities for the Special Township Project and thus AIPL has obtained almost allrequisite approvals except the Master Layout and Sanctioning of Plans by the PuneMetropolitan Regional Development Authority (PMRDA).
Both approvals (EC and LOI) were the prime and vital requirements to proceed furtherwith the Project. After receipt of the above significant Company is confident to monetizethe township project soon.
During the period under review AIPL has not contributed to the performance of theCompany since there is no other activity in AIPL except to monetize the township landwhich is under consideration.
In order to develop township project AIPL had entered into Non-binding Memorandum ofUnderstanding on July 15 2016 with one of the Pune based Developer for having withoutprejudice discussion with respect to jointly develop township project. Since both theparties could not reach mutually acceptable terms and no satisfactorily agreement wasarrived at AIPL discontinued the discussion with the Developer. Moving forward tomonetize township project AIPL has entered into Memorandum of Understanding with Mumbaibased developer Poddar Habitat Private Limited a subsidiary company of Poddar Housing andDevelopment Ltd on August 22 2017 to discuss modalities for developing a townshipproject. The talks are on to discuss and finalize the terms and conditions to developtownship project which maximize the return to all the parties including its shareholders.The discussion is taking time on account of some challenges that have cropped up along theway of the implementation of recently enacted Real Estate (Regulation and Development)Act 2016 and Goods and Service Tax Act and which further magnificent due to continuouschanges in GST and RERA. Both the parties have cleared most of the issues involved in thedevelopment of township project with the support of experts of the fields.
Lots of activities carried out during the year under review to start the project ontownship land and your directors are confident that the time has come to reap the benefitsof hard works done towards setting up the project.
ii Autoline Design Software Limited (ADSL):
ADSL is a wholly owned subsidiary of the Company and it is a multifaceted andend-to-end Engineering Solutions Company which provides Engineering and Designing SoftwareServices and Business Solutions. ADSL is also planning to work with in association withyour Company T.S.Eng.Co. Ltd Korea to get technical assistance for design the stampingdie camera prototype parts etc.
ADSL is able to provide one stop complete solution to its valued customers enabling aquick & fast response to customer from design concept to rapid prototypemanufacturing. ADSL is aggressively working to develop new customers as well as productsby offering off-shore and onsite engineering services. ADSL has completed trial and errortesting of its E-cycle project and verified it with different aspects so as to make theproject technically and commercially strong and more viable. The Company is also lookingfor suitable partner for its e-cycle project.
ADSL provides engineering design tooling services to the Company for efficientlyaccomplish the work orders well in time and give comfort of in-house availability ofengineering design capabilities to the customers of the Company and in that manner it isdirectly contributing in the performance of the Company.
iii Koderat Investments Limited Cyprus (Koderat):
In September 2008 Autoline acquired 100% stake in Koderat Investments Limited"Koderat" (making it Wholly Owned Subsidiary) a Company incorporated andexisting under the laws of Cyprus; acting as a Special Purpose Vehicle (SPV). Further"Koderat" acquired 49% equity share capital of "SZ Design Srl" and"Zagato Srl" Italian limited liability companies Milan these companies areinto the business of developing designing and providing engineering services.
The net worth of SZ Design Srl has been eroded due to various write offs. SZ Design Srlhas been declared bankrupt by the Tribunal of Milan on January 2 2015 and judiciaryreceiver has been appointed by the Bankruptcy Tribunal.
Net assets value of Zagato Srl has turned into negative due to incurring of losses inprevious years and it declared voluntarily in liquidation. Your Company is examining theseboth matters carefully and impact of thereof is yet to be ascertained.
Koderat is an SPV and due to above mentioned reasons it has not contributed directlyto the performance of the Company during the year under review.
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 -A" and forms a part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in the prescribed Form MGT-9 is enclosed as"Annexure-B" to this Annual Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company is duly constituted with adequate mix andcomposition of executive non-executive and independent directors. With reference to thechanges in Key managerial Personnel Mr. Pramod Datar resigned from the post of ChiefFinancial Officer w.e.f.
December 10 2017 and the Board of Directors appointed
CA Gokul Naik as Chief Financial Officer with effect from
December 11 2017.
Dr. Jayashree Fadnavis was appointed as an Independent Director on the Board of theCompany for three years till March
27 2018. She has completed first terms of appointment and shown her willingness forre-appointment. The Board at its meeting held on February 10 2018 has re-appointed herfor three years to hold office of Independent Director for second consecutive termssubject to the approval of Members by way of special resolution. As per the requirement ofSection 149 of the Companies Act 2013 the special resolution of her re-appointment is tobe placed in the 22nd Annual General Meeting for the approval of members. IndependentDirector and Chairman Mr. Prakash Nimbalkar has attained the age of 75 years during theterm of his appointment and the resolution of his continuation as an Independent Directorand Chairman of the company is being placed for the approval of the members. In accordancewith the provisions of the Companies Act 2013 and Companys Articles of AssociationMr. Sudhir Mungase (DIN: 00006754) Whole Time Director of the Company is liable to retireby rotation at the conclusion of this Annual General Meeting and being eligible he hasoffered himself for re- appointment at the 22 nd Annual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the
Companies Act 2013 the Directors hereby confirm that: i. In the preparation of theAnnual Accounts for the year ended March 31 2018 the applicable Accounting Standardshave been followed along with proper explanations relating to material departures; ii. TheDirectors have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on March 31 2018 and of the loss of the Companyfor that period; iii. The Directors have taken proper and the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv. The Directors have prepared the annual accounts on a going concernbasis. 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 Directorshave devised proper system to ensure compliance with the provisions of all applicable lawsand such systems are adequate and are operating effectively which are being furtherstrengthened.
NUMBER OF BOARD MEETINGS
The Board of Directors duly met Eight (8) times in the year under review. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within 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. One of the Independent Directors Dr. Jayashree
Fadnavis (DIN: 01690087) whose first term of appointment as Independent Directorcompleted on March 27 2018 is proposed to be re-appointed with the approval of membersfor a term of 3 years as stated in the notice of 22nd Annual General Meeting.
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 16(b) of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Company familiarizes the Independent Directors through various Programmes with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company etc. The details of suchfamiliarisation programmes are put on the Companys website and can be accessed atthe link http://www.autolineind.com/code-of-conduct-policies
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 as per the criteria formulated byNomination
& Remuneration Committee; thereby safeguarding the interest of the Company. Theperformance evaluation of the Independent Directors was carried out by the entire Boardexcluding the director being evaluated. The performance evaluation of the Chairman and theNon-Independent Directors was carried out by the Independent Directors.
Annual evaluation of the performance of the Board and its committees such as AuditNomination and Remuneration as well as Stakeholder Relationship Committee were carriedout. The Directors expressed their satisfaction with the evaluation 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 salient features of theNomination and Remuneration Policy of the Company and its web link is given as under: TheNomination and Remuneration Policy of the company is in compliance with the requirementsof the Section 178 of the Companies Act 2013 and Regulation 19 read with Part D ofSchedule II of the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.The Policy extensively provides for the identification of the persons who are qualified tobecome Directors of the Board and those who may be appointed in the Senior Management inaccordance with the criteria laid down and recommend to the Board for their appointment.The policy also provides that the Nomination and Remuneration Committee shall ensure thatthe level and composition of remuneration is reasonable and is to attract retain andmotivate Directors and the Employees of Senior Management.
The Policy provides that remuneration to directors key managerial personnel and seniormanagement involves a balance between fixedand incentive pay reflecting short term andlong-term performance objective. Policy also has unique feature of providing DirectorsKey Managerial Personnel and Senior Management reward linked directly to their effortperformance dedication and achievement relating to the Companys operations.
The complete policy is available at http://www.autolineind.com/code-of-conduct-policies/ The Non-executive Directors have no pecuniary relationshipor transactions with the Company during the year under review. Further the Company makesno payments to the Non-executive Directors other than sitting fees which is in accordancewith the provisions of the Companies Act 2013 and the Rules 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. TheCompanys future growth is linked to general economic conditions prevailing in themarket. The details about Threats Risks and Concerns is given in Management Discussionand Analysis Report which forms part 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. The Internal Auditors/Audit Department monitors andevaluates the efficacy and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company and its subsidiaries. Based on the report of internal audit function /InternalAuditors 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 four financial years and hence theprovisions of Section 135 of the
Companies Act 2013 with respect to CSR activities are not applicable to your Company.Although the Company has not carried out CSR activities in accordance with section 135 ofthe Companies Act 2013 however your company have been undertaking CSR initiativesvoluntarily such as tree plantation visit and helping to orphanages and needy ones etc.
Your Company has established an Audit Committee whose composition and other details arementioned in the Corporate Governance report. sufficient The Audit Committee on a regularbasis gives its recommendation to the Board. The Board gives due consideration to thoserecommendations. However there have been no instances of recommendations given by theAudit Committee not being accepted by the Board during 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
Companies Act 2013 up to twenty third Annual General Meeting of the Company at aremuneration as may be decided by the Board time to time. They have confirmed theireligibility for being Auditors of the Company under the
Companies Act 2013 for financial year 2018-19 and that they are not disqualified.
The Notes on financial statement referred to in the Auditors
Report are self-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 & Co.LLP Company Secretaries (Erstwhile M/s.
KANJ & Associates Company Secretaries) Pune a firm of Practicing CompanySecretaries was engaged by your Board for the purposes of Secretarial Audit for the yearended March 31 2018.
Secretarial Audit Report in terms of Section 204 (1) is enclosed as "AnnexureC".
The Secretarial Auditors in their Secretarial Audit Report have observed that:
FOREIGN EXCHANGE MANAGEMENT ACT 1999
1. The Company has not filed Annual Performance Report of its wholly owned subsidiaryKoderat Investments
Limited Cyprus for the financial year 2015-16 and
2016-17. Thus to that extent it has not complied with Regulation 15 of the ForeignExchange Management (Transfer or Issue 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 werenot released and made available to us and therefore the Audit of Accounts for Koderat
Investment Limited for the financial years 2015-16 and 2016-17 is yet not completed andAnnual Performance Report has not filed. The Company will file the same immediately afterreceipt of Audited Accounts of Koderat Investment Limited.
INTERNAL AUDITORS or material orders were passed by Your Company had appointedM/s. Ketan H. Shah & Associates Chartered Accountants Pune as Internal
Auditors for the financial year 2017-18 and Internal Auditors have carried out theinternal audit for said period. Further the Company has re-appointed them as InternalAuditors for financial year 2018-19 under Section 138 of the Companies
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
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 were onan arms length basis and were in the ordinary course of business. There are nomaterially significant with Promoters Directors Key Managerial Personnel or otherdesignated persons and their associates /relatives which may have a potentialconflict fromthe Companys Auditorswiththeinterestofthe
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 and Clause 23 (3) of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
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 2013read with Companies (Accounts) Rules 2014. Required disclosure has been made in the Notesto the Financials Statements. The policy on Related Party Transactions and the Policy onDetermination of Material Subsidiaries as approved by the Board is also uploaded on yourCompanys website.
MATERIAL CHANGES AND COMMITMENTS OCCURRED DURING APRIL 1 2018 TILL THE DATE OF THISREPORT WHICH WOULD AFFECT THE FINANCIAL POSITION OF YOUR COMPANY.
No such material changes and commitments occurred during April 1 2018 till the date ofthis report which would affect the Financial Position of your Company.
THEI. NO SIGNIFICANT
Regulators or Courts or Tribunals which will impact the going concern status andCompanys operations in future. ii. The Company has in place an Anti-SexualHarassment Policy in line with the requirements of The Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013. Internal ComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) of the Company andits 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 notissued Equity Shares with differential rights as to Dividend Voting or Otherwise. iv. TheCompany has not issued shares (including Sweat Equity Shares) to Employees of the Companyunder any Scheme. v. There has not been any change in the nature of business of theCompany during the year under review. vi. The Company has prepared Financial Statementsfor the Financial Year 17-18 in accordance with Indian Accounting Standards (Ind AS).
As per the Listing Obligation and Disclosure Requirement (Regulations) 2015 a separatesection on corporate governance practices followed by your Company together with acertificate compliance forms an integral part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company prepared in accordance with theCompanies (Indian Accounting Standards) Rules 2015 (Ind AS) prescribed under Section 133of the Companies Act 2013 and other recognized accounting practices and policies to theextent applicable and form part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGICAL ABSORPTION FOREIGN EXCHANGE EARNINGS AND
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-D".
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:
|Particulars || || |
|(i) The ratio of the remuneration of each director to the median ||Name of the Directors || |
|remuneration of the employees of the Company for the ||Mr. Shivaji Akhade ||33.69 |
|financial year ||(DIN: 00006755) || |
| ||Mr. Sudhir Mungase ||13.48 |
| ||(DIN: 00006754) || |
| ||Mr. Umesh Chavan ||34.37 |
| ||(DIN: 06908966) || |
|(ii) Percentage increase in remuneration of each director CEO ||Name of the Directors & KMPs || |
|CFO and CS in the financial year 2017-18. ||% Increase || |
| ||Mr. Shivaji T Akhade (Director) ||NIL |
| ||Mr. Sudhir Mungase (Director) ||NIL |
| ||Mr. Umesh Chavan (Director) ||NIL |
| ||Mr. Pramod Datar*(CFO) ||NIL |
| ||Mr. Gokul Naik* (CFO) ||NIL |
| ||Mr. Ashish Gupta (CS) ||NIL |
|(iii) Percentage increase in the median remuneration of || ||2.86% |
|employees in the financial year 2017-18 || || |
|(iv) Number of permanent employees on the rolls of Company; || ||1301 |
|(v) 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. ||9% increase is given in the salaries of employees other than the managerial personnel. There is no increase made in the salaries of managerial personnel in the financial year 2017-18. the Directors and other employees is as per the remuneration policy of the Company. |
|(vi) Affirmation The Board affirms that the remuneration paid to || |
*CA Pramod Datar resigned as CFO w.e.f. December 10 2017 and CA Gokul Naik wasappointed as CFO w.e.f. December 11 2017
Information as per Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules
Particulars of Top Ten Employees in terms of remuneration drawn and the name of everyemployee whose remuneration aggregated to Rs. 1.02 Crores per annum or Rs. 8.50 lakhs permonth during FY 2017-18: NIL
During the year under review there is no employee employed throughout the financialyear or part thereof was in receipt of remuneration which in the aggregate or at a ratewhich in the aggregate is in excess of that drawn by the Managing Director or Whole TimeDirector and holds by himself or along with his spouse and dependent children not lessthan 2% of the equity shares of the Company.
SHAREHOLDING OF DIRECTORS AS ON MARCH 31 2018
|Name of the Director ||DIN || |
No. of Equity Shares
|1 Mr. Prakash Nimbalkar ||00109947 ||6700 ||0.04 |
|2 Mr. Shivaji Akhade ||00006755 ||2653063 ||12.63 |
|3 Mr. Sudhir Mungase ||00006754 ||2126513 ||10.12 |
|4 Mr. Umesh Chavan ||06908966 ||NIL ||NIL |
|5 Mr. Amit Goela ||01754804 ||125000 ||0.78 |
|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) and Mr. Shivaji Akhade (Managing Director) arebrother-in-law.
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 noemployees holding options have resigned.
The options lapsed are available for re-issue. The details of the scheme as perCompanies (Share Capital and debentures)
Rules 2014 SEBI (ESOP and ESPS) Guidelines 1999 and SEBI (Employee based benefitsScheme) Regulations 2014 are given in the "Annexure-E" 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 and Lenders specifically Bank ofBaroda The Catholic Syrian Bank Ltd. Axis Bank Ltd. J M Financial Asset ReconstructionCompany Limited NKGSB Co-op. Bank Ltd. for extending financial support by way ofsanctioning credit facilities and fresh term loans for the Company and to Tata MotorsLtd. Tata Capital Financial Services Ltd. Tata Motors Finance Solutions Limited fortheir continued help and support during a very challenging times of the Company. Thedirectors also gratefully acknowledge the support given by and trust entrusted by allshareholders of the Company and directors also wish to place on record their deep sense ofappreciation for unstinted commitment and committed services by all the employees of theCompany.
| ||For and on Behalf of the Board |
| ||Prakash Nimbalkar |
| ||ChAIRMAN |
| ||DIN: 00109947 |
|Pune May 30 2018 || |