Your Directors are pleased to present 21st Directors Report on the business andoperations of your Company together with the Audited Financial Statements for the yearended March 31 2017.
The financial highlights for the year under review compared to the previous financialyear are given below:
( Rs. in Million except EPS data)
|PARTICULARS ||Standalone ||Consolidated |
| ||31.3.2017 ||31.3.2016 ||31.3.2017 ||31.3.2016 |
|Revenue from operations (Net) ||3552.36 ||3110.72 ||3552.86 ||3111.16 |
|Earnings before Interest Financial Charges Depreciation Tax & Amortization EBIDTA ||47.31 ||79.07 ||38.51 ||76.30 |
|Less: Finance Cost ||327.59 ||273.91 ||328.63 ||274.44 |
|Less: Depreciation & amortization expenses ||234.82 ||244.27 ||234.97 ||245.35 |
|Add: Exceptional items ||(194.18) ||70.59 ||(194.18) ||70.59 |
|Add: Extraordinary items ||(110.33) ||(16.11) ||(110.33) ||(16.11) |
|Profit Before Tax ||(819.61) ||(384.63) ||(829.61) ||(389.02) |
|Tax Expense ||(125.99) ||1.30 ||(125.62) ||1.30 |
|Profit After Tax but before deducting minority interest(PAT) ||(693.63) ||(385.93) ||(703.98) ||(390.33) |
|Minority Interest ||- ||- ||(6.49) ||(1.87) |
|Profit Attributable to group ||- ||- ||(697.49) ||(388.45) |
|Earnings per Share ||(48.53) ||(30.65) ||(49.25) ||(31.00) |
|(Basic) (in Rs.) || || || || |
|Earnings per Share ||(48.52) ||(30.67) ||(49.25) ||(31.02) |
|(Diluted) (in Rs.) || || || || |
PERFORMANCE REVIEW (CONSOLIDATED BASIS)
Revenue from operations (Net) Rs. 3552.86 Million (Previous Year Rs. 3111.16Million).
Operating EBIDTA (Earnings before Interest Financial Charges Depreciation andTax & Amortization) decreased from Rs. 76.30 Million to Rs. 38.51 Million.
Profit before Tax (PBT) decreased from Rs. (389.02) Million to Rs. (829.61)Million.
Profit after Tax (PAT) decreased fromRs. (390.33) Million to Rs. (703.98)Million.
During the year under review your Company has registered 14.20% growth in standalonerevenue from operation with sales turnover of Rs. 3552.36 Million (net of excise duty).Your Company earned this growth after recording year on year decline in previouscontinuous four years and this rise gestures towards the Companys commitment andability to sustain and grow in the challenging time. Unfortunately the bottom line of theCompany is still in red with net loss of Rs. 693.63 Million as compared to theprevious years loss of Rs. 385.93 Million. The net loss of the Company increasedsubstantially as against previous year mainly because of negative contribution fromextraordinary and exceptional items and insufficient working capital due to continuouscash loss since last four years which effected the performance of the Companysignificantly.
The Companys efforts are well underway to maximize the profits and value ofstakeholders by undertaking financial and operational restructuring implementing costcutting measures improving operational efficiencyby consolidation of businessdiversification of products as well as customers etc. and outturn of the same shall bevisualized in couple of years.
Since the Company has incurred loss during the year under review the Company does notpropose to transfer any amount to reserves.
In view of loss incurred during the year under review the Board of Directors do notrecommend dividend for the financial year 2016-17. No dividend was declared in theprevious year.
STATE OF ThE COMPANYS AFFAIRS AND BUSINESS OVERVIEW
The automobile sector in India has come a long way. The automobile industry is one ofIndias major sectors and rapidly growing with embracing the advance and state of artdesigns and technologies. Automobile industry witnessed a domestic consolidated growth of5.41% in all categories of vehicles in FY 2016-17. The performance of Auto-componentindustry wherein your Company operate is completely dependent on the performance ofAutomobile industry and rise in Auto sales bring back growth at Auto-component industry.
Your Board is very much optimistic about the growth in automobile sector and yourCompany is well positioned to ride high on the growing demand of Automobile. Your Companyhas well organized manufacturing set up spread out in the Country and adheres to thestrict delivery schedule and supply requirements of customers and is able to supply autocomponents and designing /engineering services to most of the Domestic and InternationalOriginal Equipment Manufacturers (OEMs) such as Tata Motors General Motors VolkswagenAshok Leyland Ford Motors Fiat AMW Asia Mahindra Cummins Nissan Ashok LeylandDaimler (Bharat Benz) etc.
Issue of fresh Equity Shares on Preferential Basis
During the year under review your Company has issued Equity Shares on Preferentialbasis to the Promoters and other Investors including foreign investors. With the intentionto infuse own long term funds in the Company the Board of the Company after obtainingthe approval of members has allotted 2800000 Equity Shares having face value of Rs.10/- each at a price of Rs. 60/- each (Including premium of Rs. 50/- each) onpreferential basis to the promoters and other investors of the Company in the Month ofNovember 2016. Thereby your Company has received long term funds to the tune of Rs. 16.80Crores and utilized it for repayment of loans and working capital requirements. With thisissue paid up share capital of the Company has increased to Rs. 160310540/-divided into 16031054 equity shares of Rs. 10/- each. The newly allotted shares havebeen listed on BSE Limited and National Stock Exchange of India Limited.
Commencement of Operations at new manufacturing facilities
As reported in previous Annual Report that your Company is in the process to set up anew manufacturing facility at Chennai and Dharwad the said facilities commenced theiroperations in the third quarter of Financial Year 2016-17. The customers started floatingRequest for Quotations (RFQs) to these facilities for new businesses.
The facility in Chennai will give comfort and sense of corporeal presence of Autolinein Chennai to new as well as existing customers and open up more business opportunities tothe Company as Chennai has emerged automobile hub in India. The New facility at Dharwad ismainly to cater with the increased demand of Tata Motors.
Diversification - Products as well as Customers
Your Company experienced that over-dependence on the vehicle market does not providesustainability during the stressed market conditions and believe to venture into non-autosector and to diversify the customer base so as to ensure sustainability and growth inlong term and increase the stakeholders value. To tap Non-auto sector with minimuminvestment the Company has identified various non-auto projects which can be started inexisting infrastructure and with low investment and currently working on the project ofpollution control units railways products defense equipment tooling projects etc. YourCompany understand that till the time lag to establish in non-auto segment and diversifythe customer base the Company needs revival in sales volume of existing auto products andefforts are being taken to get minimum assured auto business from existing customers.Change in Object clause to diversify: Your Company has taken major step towardsdiversification during the year under review the Company has altered its Object clause byinserting new clause which permit the Company to carry on real estate business. The Boardof the Company considered that at present the Company does not require to invest majoramount to start with the real estate business and it can commence the activity withminuscule investment. The Company being a holding company of Autoline Industrial ParksLimited which holds special township project can start works related to development of thetownship project including but not limited to rendering consultancy advisory andliasoning services obtaining and dealing in all necessary approvals from concernedgovernment and other authorities. In addition of above the Company may explore thepossibility to make further investment in real estate business in the times to come.
Future Business Strategy
Your Company has been able to penetrate newer customer product segments anddiversification after continuous efforts over the last 3 years and the continuous hardendeavors is going to result award of monthly minimum committed order of Rs. 16 crores byTata Motors Limited and with this assured additional business the Companys supply toTML will be approximately Rs. 40 Crores per month from July 2017 onwards. This alone hasthe potential to touch the breakeven point. Your Company is targeting turnover of Rs. 455Crores for FY 2017-18 and trying hard to escort bottom line in green in the year to come.Your Company is focusing on optimum utilization of underutilized existing infrastructureby grabbing the opportunity in Auto sector as well as non-auto sector. The Companysturnaround has been delayed by more than 2 years compared to projected plan due to marketconditions and more particularly high dependency on single major customer. Simultaneouslythe monetization of township land of subsidiary company did not fructify due to overalleconomic environment in addition to tax implications implementation of Real Estate(Regulation and Development) Act ("RERA") and Goods andService Tax ("GST") but the Company is now well set to materialize the townshipland in FY 2017-18.
In order to achieve the goals set for turnaround the Company needs additional fundsdebt as well as equity and the Company is seeking debt funds from its existing bankers aswell as approaching to new lenders along with structuring the existing debts. Towards thismove recently the Company has taken credit facility of Rs. 49 Crores from Tata MotorsFinance Solution Limited for re-organizing its existing loans of Rs. 39 Crores as well asworking capital requirements.
The Company could not divest its assets as compared to previous two years wherein theCompany had disposed off its assets (overseas as well as Indian) and booked income to itsProfit and Loss Statement. The Company believes and experienced that consolidation wouldresult more operational efficiency and cost savings which ultimately support the bottomline of the Company. The Company is considering consolidation of its existing two unitssituated in Pune to its Chakan Unit and to dispose off land and building of said units soas to achieve advantages of consolidation and reduce debt burden.
Details on future business plans opportunities challenges risks etc. are given inManagement Discussion and Analysis Report which forms part of this Annual Report.
SUBSIDIARIES AND THEIR PERFORMANCE:
I. Autoline Industrial Parks Limited Pune India (AIPL):
AIPL was incorporated to develop Industrial Parks Township Projects etc. Movingtowards this object AIPL has purchased a piece of land at Village Mahalunge Taluka KhedDistrict Pune (MH) India for setting up of Township under the Special Township Project(STP) of Government of Maharashtra. AIPL had received locational clearance on September10 2014 for the project valid for one year which the Government of Maharashtra on theapplication of AIPL has extended for further period i.e. upto September 10 2017 and nowAIPL is pursuing for Environment Clearance for its special township project andsimultaneously working on various other activities for STP.
At present AIPL is in the process to set up Township under STP and due to the recurringexpenses and non-availability of source of income during the year under review the lossesincreased to Rs. (11136580) in the Financial Year 2016-17 from Rs. (3313560) in thefinancial year 2015-16. Further Profit/(Loss) after Tax (PAT) increased to Rs.(11545020) from Rs. (3323020) for FY 2015-16.
AIPL is working for monetization of STP and discussion is going on with one of the Punebased Developers to develop a township project on approved special township scheme at its104 Acre land located at Mahalunge Chakan Pune. The ongoing discussion was supposed toreach to its conclusion during the year under review but due to inter-aliaimplementation of enacted Real Estate (Regulation and Development) Act 2016 and GST theexecution of Joint Development Agreement is getting delayed.
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 implementation.
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 mass-manufacturing 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 and is confident toestablish itself as an independent profit making organization.
Its Turnover stood at Rs. 18633613 in FY 2016- 17. Profit before tax for FY 2016-17increased to Rs. 1649786 from Rs. 602816 for FY 2015-16. Further Profit after Tax(PAT) increased toRs. 1696642 from Rs. 602816 for FY 2015-16.
ADSL is entering into E-Cycle project which would be exclusively made for AutolineIndustries Limited. The design and costing are completed and initial 2 prototypes weredemonstrated to members of the Company in the last Annual General Meeting. ADSL providesengineering design tooling services to the orders Company for efficiently well in timeand gives comfort of in-house availability of engineering design capabilities to thecustomers of the Company and in that manner it is directly contributing in the performanceof the Company.
III. Koderat Investments Limited Cyprus (Koderat):
In September 2008 the Company 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 in Milan these companies areinto the business of developing designing and 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 it has voluntarily declared in liquidation. Your Company is examiningabove matters carefully and impact thereof is yet to be ascertained. Koderat is an SPV anddue to above mentioned reasons it has not contributed directly to the performance of theCompany during the year under review.
Profit/(Loss) before tax for FY 2016-17 decreased to EUR (6220) from EUR (22852) forFY 2015-16. Further Profit/(Loss) after Tax (PAT) decreased to EUR (6876) from EUR(22852) for FY 2015-16.
A Report/Statement on the financial position of each of the subsidiaries of the Companypursuant to Rule 8 (1) read with Rule 5 of Companies (Accounts) Rules 2014 in Form AOC-1is 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. There were no changesin the directors or key managerial personnel by way of appointment with reference toreporting of details in previous annual report except change in Chief Financial Officer akey managerial personnel. Mr. Pramod Datar was appointed as Chief Financial Officer of theCompany with effect from June 1 2017 on the recommendations of Nomination andRemuneration Committee in place of Mr. R. T. Goel who tendered his resignation andrelieved from the post of Chief Financial Officer from the close of business hours of May31 2017.
The Board placed on record its sincere appreciation for valuable contribution made byMr. R T Goel during his tenure with the Company.
In accordance with the provisions of the Companies Act 2013 and Company's Articles ofAssociation Mr. Umesh Chavan (DIN: 06908966) 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 21st 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 the Annual Accounts for the year ended March 31 2017 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures if any;
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 2017 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 five (5) times in the year under review. The details ofwhich 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. 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 Clause 16 (b) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) 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 Company's website and can be accessed at thelink 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.The performance evaluation of the Independent Directors was carried out by the entireBoard. The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. The Board also carried out annual performanceevaluation of the working of its Audit Committee Nomination and Remuneration Committee aswell as Stakeholder Relationship Committee. The Directors expressed their satisfactionwith the evaluation process.
NOMINATION & REMUNERATION COMMITTEE AND COMPANY'S POLICY ON DIRECTORS' APPOINTMENTAND 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 Risks and Concern in Management Discussion and Analysis Report which forms partof this Annual Report.
INTERNAL CONTROL SYSTEM 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 in accordance with the requirement of theCompanies Act 2013 and composition of CSR Committee is given in the Corporate GovernanceReport 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 arenot applicable to your Company. The Company usually performs its social responsibilitytowards society and people by donating in orphanages schools etc. and extending itssupport to needy people.
ENVIRONMENT hEALTh AND SAFETY
Your Company is committed to provide a safe secure and healthy workplace and alwaysendeavor to enhance safety measures in the workplace. All the Plants of the Company havebeen certified for TS 16949. All plants are especially focused on the wellness initiative.
During the year the approach to safety has been further strengthened in all operationsof your Company. Regular safety drills and safety audits are conducted at all plants. Therequisite training is provided to the employees about Safety. There is a continued focuson tracking of "near miss" incidences which has resulted not only in reductionof reportable accidents but even in first aid injuries and non- reportable accidents.Safety competitions presentations on safety kaizens mock drills etc. are conducted forachieving a safe and healthy work environment.
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. There have been no instances ofrecommendations given by the Audit Committee not being accepted by the Board during theyear 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 the Board of the Company for the purposes of Secretarial Audit for the yearended March 31 2017.
Secretarial Audit Report in terms of Section 204 (1) is enclosed as "AnnexureD".
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 related partytransactions made owned subsidiary Koderat by the Company Investments LimitedCyprus for the financial year 2015-16. Thus to that extent it has not complied withRegulation 15 of the Foreign Exchange Management (Transfer or Issue of Any ForeignSecurity) 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 KoderatInvestment Limited for the financial year 2015-16 is yet not completed and AnnualPerformance Report has not filed. The Company will file the same immediately after receiptof Audited Accounts of Koderat Investment Limited.
2. In the financial year 2014-15 the Company had disinvested its entire investment inAutoline Industries Inc. USA a wholly owned subsidiary. However the Company filed partIV of Form ODI reporting such disinvestment as per the Foreign Exchange Management(Transfer or Issue of Any Foreign Security) Regulations 2000 with the Authorised Dealeron 15th April 2017 which is beyond the period stipulated under FEMA Notification120/RB-2004 dated July 7 2004 as amended.
Comments by the Board of Directors: The Company was in process of changing theauthorised dealer with RBI the formalities regarding the same took time and caused theunanticipated delay in filing of Part IV of Form ODI.
As reported by the Secretarial Auditors the Company has filed the Part IV of Form ODIon April 15 2017.
Your Company had appointed M/s. Ketan H. Shah & Associates Chartered AccountantsPune as Internal Auditors for the financial year 2016-17 and Internal Auditors havecompleted the internal audit for said period. Further the Company has re-appointed themas Internal Auditors for financial year 2017-18 under Section 138 of the Companies Act2013.
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 PARTY 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 were nomaterially significant with Promoters Directors Key Managerial Personnel or otherdesignated persons and their associates /relatives which could have a potential conflictwith the interest of the Company at large.
All the Related Party Transactions were approved by the Audit Committee. The AuditCommittee has also granted omnibus approval for related party transactions that wererepetitive in nature by following the requirements as laid down in the Companies Act 2013and Rules made thereunder and Clause 23 (3) of Securities and Exchange Board of India(Listing Obligations 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 are alsouploaded on your Companys website.
MATERIAL CHANGES AND COMMITMENTS OCCURRED DURING APRIL 1 2017 TILL THE DATE OF THISREPORT WHICH WOULD AFFECT THE FINANCIAL POSITION OF YOUR COMPANY
With reference to Stock Purchase Agreement dated December 23 2014 ("SPA")entered into by the Company with CJ Holdings North America LLC ("CJ Holdings")for selling of its entire holding in its Overseas Subsidiaries i.e. Autoline IndustriesUSA Inc. Autoline Industries Indiana Inc. and its step down subsidiaries CJ Holdingsalleged the accuracy of certain representations and warranties in the SPA and theconsummation of the transactions contemplated in the SPA and claimed that it sustainedsubstantial damages. After in depth study of claim and thorough discussion with USCounsel/Attorney of the Company and independent firm of CPAs the matter wasconsidered by the Board of Directors of the Company and after deliberation in the matterit was noted that the Company does not accept any of the allegations of CJ Holdings butconsidering the high likeliness that CJ Holding will recover certain amount under SPA asindemnification damages cap high cost of litigating a lawsuit in US uncertainty ofoutcome of litigation etc. the Board has approved and accepted settlement of claim for anamount of $ 1.7 million which is to be paid in installments upto June 16 2018 subject toRBI and other necessary approvals. Thefrom the Companys Auditors confirming Companyhas executed settlement agreement on April 18 2017.
Regulators or Courts or Tribunals which will impact the going concern status andCompanys operations in future.
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 of The Company under any Scheme. v. There has not been any change in thenature of business of the Company during the year under review.
As per the Regulation a separate section on corporate governance practices followed byyour Company together with a certificate compliance forms an integral part of this AnnualReport.
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 ||Ratio |
| ||Mr. Shivaji Akhade (DIN: 00006755) ||36.23 |
| ||Mr. Sudhir Mungase (DIN: 00006754) ||14.49 |
| ||Mr. Umesh Chavan (DIN: 06908966) ||36.23 |
|(ii) Percentage increase in remuneration of each director CEO CFO and CS in the financial year 2016-17. ||Name of the Director & KMPs ||% Increase |
| ||Mr. Shivaji Akhade ||NIL |
| ||Mr. Sudhir Mungase ||NIL |
| ||Mr. Umesh Chavan ||NIL |
| ||Mr. R T Goel (CFO) ||NIL |
| ||Mr. Ashish Gupta (CS) ||NIL |
|(iii) Percentage increase in the median remuneration of employees in the financial year 2016-17 ||24.77 || |
|(iv) Number of permanent employees on the rolls of Company; ||1185 || |
(v) Average percentile increase already made in the salaries There is average 0.45 %increment arrived in the salary of employees other than the managerial personnel ofemployees other than Key Managerial Personnel in the last financial year and itscomparison with the during the F. Y. 2016-17 on account of increment given percentileincrease in the managerial remuneration to one group of Non-Managerial employees. There isand justification thereof and point out if there are any no increase in the salary of KeyManagerial Personnel. exceptional circumstances for increase in the managerialremuneration.
|(vi) 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. |
|(vii) 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 Top Ten Employees in terms of remuneration drawn and the name of everyemployee whose remuneration aggregated to Rs. 1.02 Crore per annum or Rs. 8.50 lakhs permonth during FY 2016-17: NIL.
SHAREHOLDING OF DIRECTORS AS ON MARCH 31 2017
|Sr. No. Name of the Director ||DIN ||No. of Equity Shares ||Percentage holding |
|1 Mr. Prakash Nimbalkar ||00109947 ||6700 ||0.04 |
|2 Mr. Shivaji Akhade ||00006755 ||1603681 ||10.00 |
|3 Mr. Sudhir Mungase ||00006754 ||1570958 ||9.80 |
|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 relationship 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 1446 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. JMFinancial Asset Reconstruction Company Limited NKGSB Co-op. Bank Ltd. Vidya SahakariBank Ltd. for extending financial support by way of sanctioning credit facilities andfresh term loans and to Tata Motors Ltd. Tata Capital Financial Services Ltd. TataMotors Finance Ltd. Tata Motors Finance Solutions Limited for their continued help andsupport during very challenging times of the Company. The directors gratefully acknowledgethe support given by and trust entrusted by all shareholders of the Company and also wishto place 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 27 2017 ||DIN: 00109947 |