Your Directors are pleased to present 23rd Directors' Report on thebusiness and operations of your Companytogether with the Audited Financial Statements fortheyear ended March 31 2019.
The financial highlights for the year under review compared to theprevious financial year are given below: ( In Lakhs except EPS data)
|PARTICULARS ||Standalone ||Consolidated |
| ||31.3.2019 ||31.3.2018 ||31.3.2019 ||31.3.2018 |
|Revenue ||45209.49 ||50 ||45213.32 ||39499.36 |
|from || || || || |
|Earnings before Interest || || || || |
|financial Charges ||1062.92 ||759.21 ||989.28 ||686.47 |
|Depreciation Tax & Amortization EBIDTA Less: Finance Cost ||3741.30 ||3667.21 ||3752.32 ||3686.03 |
|Less: Depreciation & amortization expenses ||2122.17 ||2224.88 ||2123.28 ||2225.98 |
|Add: Exceptional items ||4398.05 ||0.00 ||4389.05 ||0.00 |
|Pro t Before Tax ||402.51 ||(5132.87) ||(488.27) ||(5225.54) |
|Tax Expense ||0.00 ||0.00 ||6.57 ||12.26 |
|Pro t After Tax (PAT) ||402.51 ||(5132.87) ||(494.84) ||(5237.80) |
|Other Comprehensive ||15.90 ||(1.93) ||15.90 ||0.47 |
|Income || || || || |
|Pro t Attributable to group ||(386.61) ||(5134.80) ||(444.92) ||(5186.40) |
|Earnings per Share ||(1.89) ||(28.46) ||(2.32) ||(29.05) |
|(Basic) (in ) || || || || |
|Earnings per Share ||(1.88) ||(28.45) ||(2.32) ||(29.03) |
|(Diluted) (in ) || || || || |
PERFORMANCE REVIEW (CONSOLIDATED BASIS)
Revenue from operations increased by 14.48%: 45213 Lakhs(Previous Year 39499 Lakhs).
Operating EBIDTA (Earnings before Interest financial ChargesDepreciation Tax & Amortization) before exceptional items increased by 44.11%: 989(Previous Year 686 Lakhs).
Net loss before exceptional items reduced by 6.59%: 4893 Lakhs(Previous Year 5238 Lakhs)
Net loss after exceptional items reduced by 90.55% : 494.84(Previous Year 5237.80 Lakhs)
Since the Company incurred loss during the year under review theCompany does not propose to transfer any amount to reserve.
The Company has registered 17.58% growth in standalone revenue fromoperation during the year under review with sale turnover of 45209 lakhs as compared toprevious year of 38450 lakhs mainly due to increase in orders of Tata Motors Ltd and Non-TML customers. The Company recorded net loss of Rs. 4801 lakhs before the income fromexceptional items against the previous year's loss of 5133 lakhs. The net loss of the
Company decreased by 6.46% because of the rise in sales volume and theexecution of various cost cutting measures in the Company which resulted in reduction ofEmployee Costs and other expenses with respect to the sales of the corresponding years.The Net loss after the exceptional items reduced substantial to 403 lakhs against theprevious year's loss of 5133 lakhs. The income from exceptional items of 4398.05lakhs comprises the additional VAT subsidy claim amount of 4460.57 lakhs sanctioned by theGovernment of Maharashtra as reduced by the payment made of 62.52 lakhs towards TDScompounding fees.
In view of losses incurred during the year under review the Board ofDirectors do not recommend dividend for the financial year 2018-19. No dividend wasdeclared in the previous year.
STATE OF THE COMPANY' S AFFAIRS AND BUSINESS OVERVIEW
Your Company is one of the largest automotive sheet metal componentsmanufacturer in India and engages inproduction of Heavy Sheet Metal Components &Assemblies Exhaust Systems Pedal System Door Assemblies Load body Door hinges &Skin panels etc. and supply to OEMs directly. Your Company is focused on optimumutilization of available infrastructure and cost cutting measures such as manpoweroptimization material cost reduction elimination of redundant processes consolidationof business activities etc. simultaneously the efforts to tap the new markets as wellascustomers are well under way. During the year under review the Country's domesticsales and exports in the automotive market saw a major surge across all segments. The saleof Passenger Vehicles grew by 2.70 percent in 2018- 2019. Within the Passenger Vehiclesthe sales of Passenger Cars Utility Vehicle & Vans grew by 2.05 percent 2.08 percentand 13.10 percent respectively in April-March 2019 over the same period last year.Autosector is in the phase to transform from conventional vehicles to electric vehicles andits successful foundation will drive the growth of autosector. India has a large enoughmarket to consume the conventional as well as electric vehicles and your Company being alargest automotive sheet metal components and tools manufacturer will get bene ted for thegrowth of either or both segments since stamping tooling and other areas where yourCompany operate arecommon for both the segments.
As seen in previous few months the automotive industry in India is introuble as the production and sales numbers continue to decline. The slowdown isaccentuated by low customer sentiment some regulatory changes tightening of lendingnorms and liquidity issues. However the prospects of the auto mobile and componentsindustry are optimistic. The recent slump in automobile is transitory and variousgovernment reforms such as to recapitalize banks to improve the availability of creditfurther liberalising FDI policy to tap overseas capital at lower rate government's newpolicies and their stability strengthening the ease of doing business by simpli cation oflabour laws will de nitely boost the growth prospects for automobile and auto componentindustries.
The below are the highlights where your company has worked majorly:
Issue of fresh Equity Shares and Share warrants on Preferential Basis
During the year under review the equity fund of Rs 4625 lakhs infusedin the Company to nance the working capital requirements of the Company along withrepayment of loans. The Board of the Company after obtaining the requisite approvalsallotted 4794520 Share Warrants at a price of Rs 73/- each on preferential basis toIndiaNivesh Renaissance Fund a private equity fund in the month of December 2018 uponreceipt of upfront 50% of Issue price. The warrants converted into Equity shares in themonth of March 2019 upon receipt of payment of remaining 50% of issue price. The Boardallotted 1232877 Equity Shares having face value of Rs. 10/- each at a price of Rs. 73/-each (Including premium of Rs. 63/- each) to the promoters of the Company upon receipt offull consideration amount and also allotted 1232877 Convertible Share Warrants at aprice of Rs.73 each on preferential basis to the Promoters of the Company upon receipt ofpayment of upfront 25% of issue price. The remaining 75% of the Issue Price of Warrantshall be payable by the warrant holders on or before the exercise of the entitlementattached to Warrants to subscribe for Equity Share(s) and should be exercised by theWarrant Holders within 18 months from the date of allotment of warrants. With this issuepaid up share capital of the Company has increased from Rs. 210001880/- to Rs.270275850/- divided into equity shares of Rs. 10/- each. The new allotment improves theNet Worth of the Company by 88% as on March 31 2019. The newly allotted shares have beenlisted on BSE Limited and National Stock Exchange of India Limited.
As stated in the previous Annual Report your Company has entered intoMemorandum of Understanding with T.S. Eng. Co. Ltd Korea ("Tae Sung") on April19 2018 for getting technical assistance for low cost manufacturing of stamping dieprototype parts pedal box automotive camera etc. and to collaborate with Tae Sung forthe development of products as well as markets local and overseas. During the year underreview technical team of Tae Sung visited India and demonstrated their advanced productsand technology among the prestigious customers of the Company. The discussion is going onto venture with T.S. Eng. Co. Ltd that will support Autoline for low cost manufacturing byutilizing available infrastructure and skills with advance technology and will also opennew avenues to participate in vehicle development and other possible markets.
Manufacturing Facility at Hosur
During the year under review your Company has shifted its Chennaifacility to Hosur Karnataka to optimize the production ef ciency and to achieve bettercost reduction. Shifting of Chennai operations to Hosur will yield direct saving intransportation cost since the plant of Ashok Leyland to whom Chennai unit supplies majorquantity is located in Hosur and there is strong possibility of new business being awardedby Ashok Leyland since the Company's presence in Hosur will give them con dence aboutthe immediate availability of products. Established Automobile majors such as HyundaiMotors India Renault KIA Motors TI Cycles IndiaToyotetsu PSA Group Royal En eld andTVS Motors have their manufacturing plants in Hosur which will be added advantage to theCompany. This will help the Company to acquire new business and increase revenue with thesupport of cost saving .
Consolidation of Business
Consolidation of business and monetization of surplus assets are themajor area wherein your Company is working from previous 4 years. Your Company believesthat it will able to operate more efficiently and economically by reducing the number offacilities in a business. During the year under review the Company shifted themanufacturing facility carried out at rented premises in Dharwad to its own premisessituated at Plot No. 186 - A Belur Industrial Area Growth Centre Dharwad after buildingthe necessary infrastructure. The consolidation will also improve communication betweenbusiness functions and achieve savings by decreasing head counts overheads andconsolidating systems and processes.
Moving forward the Company entered into Memorandum of Understanding("MOU") on December 24 2018 with one of the prospective buyers to transfer landadmeasuring 11611 Sq. Mtr. bearing Survey Nos. 392/1B and 613 at Mahalunghe("Mahalunge property"). Currently the Company is carrying on manufacturingactivities thereat and will move the manufacturing facilities i.e. plant / machineriesshed employees etc. to its other existing units in Pune.
To monetize the surplus assets the Company entered into MOU withprospective buyer to sell land admeasuring about 549.78 Sq. mtr. bearing Gat No. 825Kudalwadi Pune and building Structures ("Kudalwadi property") constructed thereupon. The said property was lying empty after consolidating the manufacturing facility toother units long before.
The sell transactions of Mahalunge and Kudalwadi properties areexpected to complete in first half of FY 2019-20 and the sale proceeds would be utilizedto pay outstanding term loans of Axis Bank since both the properties are mortgaged withAxis Bank and the Company would be able to settle entire term loan of Axis Bank.
Also the Company sold a 1000 ton press machine which was not beingused by the Company and was also not required for future business. The said machine waspledged with JM financial Assets Reconstruction Company and the Company repaid loan of Rs.1 Crore from the sale proceeds of press machine. Post consolidation your Company isoperating through 7 manufacturing facilities and in-house Tool & Design Centre.
Additional Vat subsidy claim
During the Year under review the Government of Maharashtra hasapproved an amount of Rs.44.61 Crores as the additional Industrial Promotion Subsidy forMega Project under Package Scheme of Incentive 2007 (Vat Subsidy) for its two more unitswhere the fresh investment was made by the Company in addition of currently enjoying VAT/CST Subsidy and out of the said approved amount the Company has received 35.12 Crores byJuly 8 2019 and the remaining amount is expected to receive during the year 2019-20.
Diversi cation - Products as well as Customers
The agenda of diversifying to non-auto businesses as well as clientbase has been on radar for several years to reduce the over dependency on its one majorcustomer and auto-sector and most of actions are in line with drive. During the past yearyour Company have taped prestigious clients like JCB Sany Carraro Agratalia etc. Thecontinued efforts in this direction from past few years has resulted in sales contributionfrom clients other than Tata Motors went up from 22.7% in FY 2016-17 to 28.4% inFY2018-19.
The Company achieved sales contribution of Rs3241 lakhs from newproducts/business range diversify the product portfolio. The objective is to diversify theproducts range without much capex.
Future Business Strategy
The year 2018-19 was challenging as well as re-energizes for AutomobileIndustry. Automobile industry registered a growth of 6.26% in production of vehicles and14.50% growth in export during the financial year 2018-19 although there is domestic salesdeclined of 4.91% as compared to previous year.
Underutilization of capacity and shortage of working capital are stillthe prime concern to address to achieve the turnaround of the Company. The Company hasworked tremendously on the said areas and able to address the working capital worry tocertain extent by raising equity fund of Rs. 46.25 crores and ensuring additional VATsubsidy claim of Rs. 44.61 crores along with some rearranging of debts and rate revisionfrom Tata Motors. Your Company has succeeded to get the price rise from Tata Motors forHigh Deck Load Body and Mega Excel Load Body parts supplied during the year 2018-19 andwill get the difference amount in current year. The Company is planning to reduce itsdebts substantially with the support of extraordinary income and restructuring of debt andtaking steps to un-lock values of non-core assets.
The Company constantly approaching the OEMs and OEM vendors for newbusiness by demonstrating its capabilities such as available infrastructure in-housedesign and tooling center and more than 20 years sound presence. The management is condent to add more business from long associated customers such as TML Ashok LeylandMahindra Cummins Daimler Volkswagen Ford General Motors etc. and join hands with newcustomers. The Management is very keen and con dent to diversify the company'soperation and exploring various possibilities to enter into JV new ventures etc.
Regarding the monetization of township land of Subsidiary Company viz.Autoline Industrial Parks Ltd. ("AIPL") the Subsidiary has received master planapproval for its Integrated Township Project from the Office of Pune Metropolitan RegionalDevelopment Authority which is a prime and vital approval for the project. As informedearlier Subsidiary company has entered into an Agreement with Poddar Habitat Pvt.Ltd. aMumbai based Developer (Subsidiary of Poddar Housing and Development Ltd.) on September24 2018 to develop the residential project on land. Now the parties are nalizing theterms and conditions to move ahead the project and are discovering the available options.The Developer is also exploring the proposed development under"Pradhanmantri AavasYojna" (PMAY) scheme brought by the government which has several benefits andadvantages to drive the fast disposal of Project. Your Board is assured that townshipproject would be one of the milestones to result in turnaround the Company. Your Board isalso exploring other strategic options to maximize the value of investment made by yourCompany in its subsidiary.
Large numbers of activities effectuated during the year under review inthe Company as well as its subsidiary companies and your directors are con dent to bringback the company into the growth path. Further details on opportunity challenges risksand concern etc. are given in Management Discussion and Analysis Report which forms partof this Annual Report.
SUBSIDIARIES AND THEIR PERFORMANCE:
i. Autoline Industrial Parks Limited Pune India :
Autoline Industrial Parks Limited ("AIPL") a subsidiary ofthe Company owned and possessed Township Land spread in 102.50 acres of land at VillageMahalunge Taluka Khed District-Pune (MH) India for setting up of Township under theIntegrated Township Project ("ITP") of Government of Maharashtra. AIPL hadreceived locational clearance on September 10 2014 and received Environment Clearance(EC) from the Ministry of Environment Forest & Climate Change Government of India onNovember 22 2017. Also District Collector Pune vide its letter no. Khed/NA/ SR/23/2018dated March 31 2018 has issued the Letter of Intent (LOI) valid for two years forcommencing the further activities for the Special Township Project.
Recently AIPL has received Master plan approval under IntegratedTownship Project Regulation from Pune Metropolitan Regional Development Authority (PMRDA).The proposed development is envisaged in few phases. After receipt of these significantapprovals the Subsidiary Company can proceed for commencement of the construction activityon land.
During the period under review AIPL has not contributed to theperformance of the Company since there is no other activity in AIPL except to monetize thetownship land which is under consideration. In order to develop township project AIPL hasentered into an Agreement with Poddar Habitat Pvt. Ltd. a Mumbai based Developer(Subsidiary of Poddar Housing and Development Ltd.) on September 24 2018 to develop theresidential project on land. The Developer had conducted the title search of the entireland held by AIPL and the Title & Search Report was found satisfactory and few issueson land as pointed out by the Developer have been sorted out. After the receipt of Masterplan approval AIPL and Poddar group are working on execution of Conveyance deed ofphase-I land. Sluggish economy slowdown in the entire Real Estate Sector and continuousregulatory changes are the prime concerns and the successful execution of above proposedtransaction amidst the above challenges would be a significant achievement for theCompany.
ii Autoline Design Software Limited (ADSL):
ADSL is a wholly owned subsidiary of the Company and it is amultifaceted and end-to-end Engineering Solutions Company which provides Engineering andDesigning Software Services and Business Solutions. ADSL is also planning to work with inassociation with your Company T.S. Eng. Co. Ltd Korea to get technical assistance fordesign the stamping die camera prototype parts etc. ADSL is able to provide one stopcomplete solution to its valued customers enabling a quick & fast response tocustomer from design concept to rapid prototype manufacturing. ADSL is aggressivelyworking to develop new customers as well as products by offering off-shore and onsiteengineering services.
E-cycle project led by ADSL has successfully launched during the yearunder review and the production of E-cycle has been started during the year after gettingARAI approval. ADSL has orders of more than 100 numbers of e-cycles in hand. Now ADSL isworking on feedback received/to be received from the customer and simultaneously exploringJV proposal for E-cycles and this project will open up new possibilities in electricsegment for the Company. ADSL is also performing testing and validation activities andorders are being awarded by Ashok Leyland Tata Motors Autoline etc. and exploringbusiness with other OEMs for testing and validation services. ADSL is also in discussionwith various prospective customers for E-vehicles GPS system auto break etc.
ADSL provides engineering design tooling services to the Company forefficiently accomplish the work orders well in time and during the year under reviewalmost Rs. 50 crores business is performed for the Company and it gives comfort ofin-house availability of engineering design capabilities to the customers of the Companyand in that manner it is directly contributing in the performance of the Company.
iii Koderat Investments Limited Cyprus (Koderat):
In September 2008 Autoline acquired 100% stake in Koderat InvestmentsLimited ("Koderat") (making it Wholly Owned Subsidiary) a Company incorporatedand existing under the laws of Cyprus; acting as a Special Purpose Vehicle (SPV). Further"Koderat" invested funds in "SZ Design Srl" and "Zagato Srl"Italian limited liability companies Milan and acquired 49% equity share capital of saidItalian companies. These companies were into the business of developing designing andproviding engineering services.
The net worth of SZ Design Srl has been eroded due to various writeoffs. SZ Design Srl has been declared bankrupt by the Tribunal of Milan on January 2 2015and judiciary receiver has been appointed by the Bankruptcy Tribunal. Net assets value ofZagato Srl has turned into negative due to incurring of losses in previous years and itdeclared voluntarily in liquidation. Your Company is examining these both matterscarefully and impact of thereof is yet to be ascertained. Koderat is an Special PurposeVehicle ("SPV") and due to above mentioned reasons it has not contributeddirectly to the performance of the Company during the year under review.
A Report on the performance and financial position of each of thesubsidiaries of the Company pursuant to Rule 8 (1) read with Rule 5 of Companies(Accounts) Rules 2014 in Form AOC-1 is annexed as "Annexure -A" and forms apart of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in the prescribed Form MGT-9 isenclosed as "Annexure- B" to this Annual Report. Also in compliance withSection 92(3) of the Companies Act 2013 the annual return is also available on thecompany's website at: www.autolineind.com
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of your Company is duly constituted withadequate mix and composition of executive non-executive and independent directors. Duringthe year under review Mr. Amit Goela (DIN: 01754804) Non- Executive Director hasresigned on July 24 2018. The Board places appreciation for the services rendered by Mr.Amit Goela during his tenure as a Non-Executive Director on the Board of the Company.There was no change in the Key Managerial Personnel.
Mr. Umesh Chavan (DIN: 06908966) Executive Director & CEO wasappointed for five years at the 18th Annual General Meeting held on July 31 2014 tillJune 25 2019. On the recommendation of Nomination and Remuneration Committee and subjectto the approval of the members the Board at its meeting held on May 30 2019 reappointedMr. Umesh Chavan as Executive Director and CEO for the period of Five years starting fromJune 25 2019 to June 24 2024 and approved the payment of remuneration for the period ofthree years effective from June 25 2019 to June 24 2022.
Mr. Krishankant Rathi being the representative of IndiaNiveshRenaissance Fund ("the Investor") is appointed as a Non-executive NomineeDirector with effect from April 12 2019 on the Board of the Company not liable to retireby rotation by virtue of the Investment Agreement entered with Investor. The Investor hasinvested Rs 35 Crores in equity capital of the Company and acquired 16.97% shares (postconversion of outstanding share warrants) in the Company.
Mr. Prakash Nimbalkar and Mr. Vijay Thanawala were
the Company for five years in the 18 appointed as an IndependentDirectors on the Board of th Annual General
Meeting of the Company. They have completed first terms of theirappointment and shown their willingness for re-appointment. The Board at its meeting heldon May 30 2019 has re-appointed them for five years to hold office of IndependentDirector for second consecutive terms subject to the approval of Members by way of specialresolution. As per the requirement of Section 149 of the
appointment are to be placed in the 23 Companies Act 2013 the specialresolutions of their re- rd Annual General
Meeting for the approval of members.
Mr. Prakash Nimbalkar has attained the age of 76 years. The Boardbased on the performance evaluation of Independent Directors and as per the recommendationof the Nomination and Remuneration Committee considered that given his backgroundexperience and contributions made by him during his tenure the continued association ofMr. Prakash Nimbalkar (DIN: 00109947) would be of immense benefit for the Company and itis desirable to continue him as an Independent Director and accordingly Board hasrecommended reappointment of Mr.Prakash Nimbalkar.
Mr. Vijay Thanawala age of 72 years will be attaining the age of75 years during the course of term of his reappointment. The Board based on theperformance evaluation of Independent Directors and as per the recommendation of theNomination and remuneration Committee considers that given his background experienceand contributions made by him during his tenure the continued association of Mr. VijayThanawala (DIN: 00001974) would be of immense benefit for the Company and it is desirableto continue him as an Independent Director and accordingly the Board has recommendedre-appointment of Mr. Vijay Thanawala. In accordance with the provisions of the CompaniesAct 2013 and Company's Articles of Association Mr. Umesh Chavan (DIN: 00006754)Executive Director & CEO of the Company is liable to retire by rotation at theconclusion of this Annual General Meeting and being
23 eligible he has offered himself for re- appointment at the rdAnnual General Meeting.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Companies Act2013 the Directors hereby con rm that: i) in the preparation of the Annual Accounts forthe year ended March 31 2019 the applicable Accounting Standards have been followedalongwith proper explanations relating to material departures; ii) The Directors haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as on March 312019 and of the loss of the Company for thatperiod; 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 goingconcern basis. v) The directors have laid down internal financial controls to be followedby the Company and such controls are adequate and are operating effectively. vi) TheDirectors have devised proper system to ensure compliance with the provisions of allapplicable laws and such systems are adequate and are operating effectively which arebeing further strengthened.
NUMBER OF BOARD MEETINGS
The Board of Directors duly met Eight (8) times in the year underreview. The details of which are given in the Corporate Governance Report. The interveninggap between the Meetings 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 theBoard of the Company and have remained independent throughout the year as contemplated insection 149(6) of the Companies Act 2013. Mr. Prakash Nimbalkar (DIN: 00109947) wasappointed as an Independent Director on the Board of the Company for five years upto theconclusion of twenty third Annual General Meeting. The Board at its meeting held on May30 2019 has re-appointed him for five years effective from September 29 2019 tillSeptember 28 2024 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 his re-appointmentis to be placed in the 23rd Annual General
Meeting for the approval of members.
Mr. Vijay Thanawala (DIN: 00001974) was appointed as an IndependentDirector on the Board of the Company for five years upto the conclusion of twenty thirdAnnual General Meeting. The Board at its meeting held on May 30 2019 has re-appointed himfor five years effective from September 29 2019 till September 28 2024 to hold office ofIndependent Director for second consecutive terms subject to the approval of Members byway of special resolution. As per the requirement of Section 149
of the Companies Act 2013 the special resolution of his reappointmentis to be placed in the 23rd Annual General
Meeting for the approval of members.
All the Independent Directors have given declarations that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Clause 16 (b) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The Company familiarizes the IndependentDirectors through various Programmes with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. The details of such familiarisation programmes are puton the Company's website and can be accessed at the link : http://www.autolineind.com/code-of-conduct-policies
Pursuant to Section 178 (2) of the Companies Act 2013 and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate exercise was carried out to evaluate the performance ofIndividual Directors including the Chairman of the Board who were evaluated on variousparameters such as level of engagement contribution and independence of judgment as perthe criteria formulated by Nomination & Remuneration Committee; thereby safeguardingthe interest of the Company. The performance evaluation of the Independent Directors wascarried out by the entire Board excluding the director being evaluated. The performancewas evaluated on the basis of 1-5 scores (Min: 1 Max: 5) each on the basis aboveparameters.
The performance evaluation of the Non-Independent Directors was carriedout by the Independent Directors. Annual evaluation of the performance of the Board andits committees such as Audit Nomination and Remuneration as well as StakeholderRelationship Committee were carried out. The Directors expressed their satisfaction withthe evaluation process.
NOMINATION & REMUNERATION COMMITTEE AND COMPANY'S POLICY ONDIRECTORS' APPOINTMENT AND REMUNERATION
Your Company has duly established a Nomination and RemunerationCommittee. The Committee has presented to the Board the policy with respect to appointmentof directors including criteria for determining quali cations positive attributesindependence of directors remuneration for the directors key managerial personnel andother senior employees etc. and thereafter the Board approved the same. In compliance withSection 178(4) of the Companies Act 2013 and the rules made thereunder the salientfeatures of the Nomination and Remuneration Policy of the Company and its web link isgiven as under: The Nomination and Remuneration Policy of the Company is in compliancewith the requirements of the Section 178 of the Companies Act 2013 and Regulation 19 readwith Part D of Schedule II of the SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015. The Policy extensively provides for the identi cation of the personswho are qualified to become Directors of the Board and those who may be appointed in theSenior Management in accordance with the criteria laid down and recommend to the Boardtheir appointment. The policy also provides that the Nomination and Remuneration Committeeshall ensure that the level and composition of remuneration is reasonable and issufficient to attract retain and motivate Directors and the employees of seniormanagement. The Policy provides that remuneration to directors key managerial personneland senior management involves a balance between xed and incentive pay re ecting shortterm and long-term performance objective. Policy also has unique feature of providingDirectors Key Managerial Personnel and Senior Management reward linked directly to theireffort performance dedication and achievement relating to the Company's operations.
The complete policy is available at :http://www.autolineind.com/code-of-conduct-policies/ The Non-executive Directors have nopecuniary relationship or transactions with the Company.
Further the Company makes no payments to the Non-executive Directorsother than sitting fees which is in accordance with the provisions of the Companies Act2013 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. TheManagement has put in place adequate and effective system and resources for the purposesof risk management. At present your company has not identified any element of risk whichmay threaten the existence of your company except the general and business risks as givenunder the para Threats and Risks and Concern in Management Discussion and Analysis Reportwhich forms part of this Annual Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an Internal Control System commensurate with thesize scale and complexity of its operations. During the year under review your Companyreplaced the internal auditor after three years to bring more expertise more transparencyand new approach in the Audit work and appointed multidiscipline and multi locational rmsMoore Stephens Singhi Advisors LLP as Internal Auditors for FY 2019-20. The InternalAuditors/Audit Department monitors and evaluates the ef cacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company and its subsidiaries. Based on thereport of internal audit function /Internal Auditors process owners undertake correctiveaction in their respective areas and thereby strengthen the controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted CSR Committee and composition of CSRCommittee is given in the Corporate Governance Report of the Company. The Company hasincurred losses during previous four financial years and hence the provisions of Section135 of the Companies Act 2013 with respect to CSR activities are not applicable to yourCompany. Although the Company has not carried out CSR activities in accordance withsection 135 of the Companies Act 2013 however your company have been undertaking CSRinitiatives voluntarily such as tree planation visit and helping to orphanages and needyones etc.
Your Company has established an Audit Committee whose composition andother details are mentioned in the Corporate Governance report.
The Audit Committee on a regular basis gives its recommendation tothe Board. The Board gives due consideration to those recommendations. However there havebeen no instances of recommendations given by the Audit Committee not being accepted bythe Board during the year under review.
AUDITORS STATUTORY AUDITORS
M/s. A.R. Sulakhe & Co. Chartered Accountants (FRN 110540W) who arethe statutory auditors of your Company hold of ce in accordance with the provisions ofthe Companies Act 2013 up to twenty third Annual General Meeting of the Company. TheBoard at its meeting held on May 30 2019 after considering the recommendation of theAudit Committee of the Company reappointed M/s. A.R. Sulakhe & Co. CharteredAccountants (Registration No. 110540W) as the Auditors of the Company subject to theapproval of the members of the Company for a second term of 3 (three) consecutive yearsto hold office from the conclusion of this Annual General Meeting to the conclusion of thetwenty sixth Annual General Meeting. Statutory Auditors have submitted their consent toact as an Auditor and they have con rmed their eligibility for being re-appointed asStatutory Auditors of the Company under the Companies Act 2013 and that they are notdisquali ed.
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 2013and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s.KANJ & Co. LLP Company Secretaries (Erstwhile M/s. KANJ & Associates CompanySecretaries) Pune a rm of Practicing Company Secretaries was engaged by your Board forthe purposes of Secretarial Audit for the year ended March 31 2019. Secretarial AuditReport in terms of Section 204 (1) is enclosed as "Annexure C". The SecretarialAuditors in their Secretarial Audit Report have observed that:
A) THE COMPANIES ACT 2013 AND THE RULES MADE THEREUNDER:
The Company has transferred shares in respect of which dividend has notbeen claimed for seven consecutive years or more in the name of Investor Education andProtection Fund pertaining to the financial Year 2011-12 with a delay of 2 months & 22days and to that extent the Company has not complied with the provisions of Section 124(6) of the Companies Act 2013 read with the Rules made thereunder.
Comments by the Board of Directors: the Company inadvertently missed totransfer the shares to the Investor Education and Protection Fund within the prescribedtime being this was the new requirement and there is a delay of 2 months & 22 days.
(B) THE SECURITIES AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS ANDDISCLOSURE REQUIREMENTS) REGULATIONS 2015 ("LODR") -
resignation on 24 Mr. Amit Goela Non-Executive Director tendered histh July 2018 which was taken note in the Board Meeting dated 11th August 2018 and thesaid resignation was reported to the stock exchanges on the same day. The Listed Entityhas made delayed compliance with the provisions of the Regulation 30 (2) read withRegulation 30 (6) of the LODR as there was a delay in reporting of the resignation of Mr.Amit Goela to the Stock Exchanges.
Comments by the Board of Directors: The Company has reported theresignation of Mr. Amit Goela immediately after the Board meeting held on August 11 2018wherein the matter of resignation was placed. There was a gap of 17 days in resignationdate and the date of Board Meeting and therefore there was a delay of 17 days to informthe resignation to Stock Exchanges which was an inadvertent mistake.
(C) FOREIGN EXCHANGE MANAGEMENT ACT 1999
The Company has not led Annual Performance Report of its wholly ownedsubsidiary Koderat Investments Limited Cyprus for the financial years 2015-16 2016-17and 2017-18. Thus to that extent it has not complied with Regulation 15 of theForeignExchange 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 KoderatInvestment Limited for the financial years 2015-16 2016-17 and 2017-18 is yet notcompleted and Annual Performance Report has not led. The Company will le the sameimmediately after receipt of Audited Accounts of Koderat Investment Limited.
Your Company had appointed M/s Ketan H. Shah & AssociatesChartered Accountants Pune as Internal Auditors for the financial year 2018-19 andInternal Auditors have carried out the internal audit for said period and submitted theirreport to the Audit Committee and Board of the Company. Further the Company has appointedM/s. Moore Stephen Singhi Advisors LLP as Internal auditors for FY 2019-20 under Section138 of the Companies Act 2013 to carry out internal audit assignment.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
During the year under review there were no frauds reported by theauditors to the Audit Committee or the Board under Section 143(12) of the Companies Act2013
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has a vigil mechanism in the form of Whistle Blower Policy(WBP) to deal with instances of fraud and mismanagement if any. The details of theWhistle Blower Policy is explained in the Corporate Governance Report and also posted onthe website of the Company.
LOANS GUARANTEES AND INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to thefinancial Statements.
Your Company has not accepted any deposits from the public fallingwithin the ambit of Section 73 under chapter V of the Companies Act 2013 and TheCompanies (Acceptance of Deposits) Rules 2014.
RELATED PARTIES TRANSACTIONS
All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personsand their associates /relatives which may have a potential conflict with the interest ofthe Company at large. All the Related Party Transactions were approved by the AuditCommittee and also by the Board wherever necessary. The Audit Committee has also grantedomnibus approval for related party transactions that were repetitive in nature byfollowing the requirements as laid down in the Companies Act and Rules made thereunder andClause 23 (3) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The Company has not entered into anytransactions with related parties during the year under review which require reporting inForm AOC-2 in terms of Companies Act 2013 read with Companies (Accounts) Rules 2014. Thepolicy on Related Party Transactions and the Policy on Determination of MaterialSubsidiaries as approved by the Board is also uploaded on your Company's website.
MATERIAL CHANGES AND COMMITMENTS OCCURRED DURING APRIL 1 2019 TILL THEDATE OF THIS REPORT WHICH WOULD AFFECT THE FINANCIAL POSITION OF YOUR COMPANY.
No such material changes and commitments occurred during April 1 2019till the date of this report which would affect the financial Position of your Company.
I. No significant or material orders were passed by the Regulators orCourts or Tribunals which will impact the going concern status and Company'soperations in future. ii.
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee (ICC) has been setup to redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) of the Company and its associates are covered under thispolicy. During the year under reviewthere were no cases led pursuant to the SexualHarassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. iii.The Company has not issued Equity Shares with differential rights as to Dividend Votingor Otherwise. iv.The Company has not issued shares (including Sweat Equity Shares) toEmployees of The Company under any Scheme. v. There has not been any change in the natureof business of the Company during the year under review.
As per the Listing Obligations and Disclosure Requirement(Regulations) 2015 a separate section on corporate governance practices followed by yourCompany together with a certi cate from the Company's Auditors con rming complianceforms an integral part of this Annual Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated financial Statements of your Company prepared inaccordance with the Companies (Indian Accounting Standards) Rules 2015 (Ind AS)prescribed under Section 133 of the Companies Act 2013 and other recognized accountingpractices and policies to the extent applicable and forms part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGICAL ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewithas "Annexure-D".
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 ofThe Companies (Appointment and Remuneneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company is as under:
|No. ||Particulars || |
|(i) The ratio of the remuneration of each director ||Name of the Director ||Ratio |
|to the median remuneration of the employees of the Company for the financial year ||Mr. Shivaji Akhade ||31.25:1 |
| ||(DIN: 00006755) || |
| ||Mr. Sudhir Mungase ||12.5:1 |
| ||(DIN: 00006754) || |
| ||Mr. Umesh Chavan ||31.25:1 |
| ||(DIN: 06908966) || |
|(ii) Percentage increase in remuneration of each director CEO CFO and CS in the financial year 2018-19. ||Name of the Director & ||% Increase |
| ||Mr. Shivaji T Akhade ||Nil |
| ||Mr. Sudhir Mungase ||Nil |
| ||Mr. Umesh Chavan ||Nil |
| ||Mr. Gokul Naik (CFO) ||5% |
| ||Mr. Ashish Gupta (CS) ||20% |
|(iii) Percentage increase in the median emuneration of employees in the financial year 2018-19 ||8% |
|(iv) Number of permanent employees on the rolls of Company; || |
| ||8% |
|(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 justi cation thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. ||Due to financial constraint there is no regular annual increment to the salaries of the employees and the increment is being given slab/grade wise and accordingly the 9% increment was given to non-managerial personnel upto certain grade in the previous financial year 2017-18 and 1% increment was given to few higher grade nonmanagerial personnel during financial year 2018- 19 and further due to more than 10% reduction in head count during the financial year 2018-19 the average percentile increase made noncomparable. Average 3% increase made in the salaries of managerial personnel in the FY 2018- 19 as mentioned above no increment was given to managerial personnel in FY 2017-18. |
|*Managerial personnel includes KMPs. || |
| ||The increment given to each individual employee is based on the employees' performance and also benchmarked against a comparable basket of relevant companies in India. |
|(vi) Af rmation ||The Board af rms 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 andRemuneration of Managerial Personnel) Rules 2014:
Particulars of Top Ten Employees in terms of remuneration drawn and thename of every employee whose remuneration aggregated to Rs. 1.02 Crores per annum or Rs.8.50 lakhs per month during FY 2018-19: NIL
During the year under review there is no employee employed throughoutthe financial year or part thereof was in receipt of remuneration which in the aggregateor at a rate which in the aggregate is in excess of that drawn by the Managing Directoror Whole Time Director and holds by himself or along with his spouse and dependentchildren not less than 2% of the equity shares of the Company.
SHAREHOLDING OF DIRECTORS AS ON MARCH 31 2019
|Name of the Director ||DIN ||No. of Equity Shares ||Percentage Holding |
|1 Mr. Prakash Nimbalkar ||00109947 ||6700 ||0.03 |
|2 Mr. Shivaji Akhade ||00006755 ||3064022 ||13.78 |
|3 Mr. Sudhir Mungase ||00006754 ||2537472 ||11.41 |
|4 Mr. Umesh Chavan ||06908966 ||NIL ||NIL |
|5 Mr. Amit Goela ||01754804 ||125000 ||0.56 |
|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 thatMr. Sudhir Mungase (Whole-time Director) and Mr. Shivaji Akhade (Managing Director) arerelated to each other that Mr. Sudhir Mungase is brother-in-law of Mr. Shivaji Akhade.
EMPLOYEES' STOCK OPTION SCHEME ESOS
In accordance with SEBI (Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines 1999 the Company has instituted Employee Stock OptionScheme 2008 (Autoline ESOS 2008) pursuant to the Special Resolution passed by Shareholdersat 12th Annual General Meeting held on September 27 2008. As per Autoline ESOS 2008160000 options were granted to 171 Permanent employees and 15000 options were grantedto 5 Independent Directors. During the year under review no options were exercised and 4employees holding 1510 options have resigned. 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-E"to this Annual Report.
Your Directors express their sincere appreciation for the assistanceand co-operation received from the various Central and State Government DepartmentsCustomers Vendors and Lenders speci cally Bank of Baroda The Catholic Syrian Bank Ltd.Axis Bank Ltd. J M financial Asset Reconstruction Company Limited NKGSB Co-op. Bank Ltd.for extending financial support by way of sanctioning credit facilities and fresh termloans for the Company and to Tata Motors Ltd. Tata Capital financial Services Ltd. TataMotors Finance Solutions Limited for their continued help and support during a verychallenging times of the Company. The directors also gratefully acknowledge the supportgiven by and trust entrusted by all shareholders of the Company and directors also wish toplace on record their deep sense of appreciation for unstinted commitment and committedservices by all the employees of the Company.
|For and on Behalf of the Board |
|Prakash Nimbalkar |
|DIN: 00109947 |
|Pune August 14 2019 |