DIRECTORS' REPORT To, The Members Automobile Products of India Limited 1) Your Directors have pleasure in presenting their Sixty-Fourth Annual Report together with the Audited Financial Statements for the financial year ended 31st March, 2015 2) OPERATIONS: Your Company earned Total Income of Rs. 206.38 lac during the financial year ended 31st March, 2015 as compared to Rs.388.02 Lakhs in the previous year. Your company has undertaken various business developments which are expected to yield fruits in future and the management is confident that the same will be reflected in improved financial health of the Company. 3) DIVIDEND: In view of the carried forward losses, your Directors do not recommend payment of any dividend on equity shares. 4) EXTRACTS OF ANNUAL RETURN: The details forming part of the extracts of the Annual Return in Form MGT-9 are annexed herewith as Annexure-A. 5) BOARD MEETINGS AND COMMITTEES: During the year, Five Board Meetings were held. The provisions of Companies Act, 2013 were adhered to while considering the time gap between two Board meetings. i) Audit Committee: The Company Is having an Audit Committee comprising of the following Directors: During the year, Four Audit Committee Meetings were held. li) Whistle Blower Policy; In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. Thus, Whistle Blower Policy/Vigil mechanism provides a mechanism for the Directors/employees to report violations without fear of victimization of any unethical behavior, suspected or actual fraud and violation of Code of conduct etc. which are detrimental to the organizations interest The Directors and Employees of the Company will have direct approach to the Chairman of the Audit Committee to report any grievances. iii) Nomination and Remuneration Committee: The Company has constituted a Nomination and Remuneration Committee comprising of the following Directors: iv) Stakeholders Relationship Committee: The Company has constituted a Stakeholders Relationship Committee comprising of following Directors: v) Independent Directors' Meeting: In Compliance with Schedule IV of the Companies Act, 2013, the Independent Directors held their meeting without the attendance of Non-independent Directors and members of management, to inter alia: i) Review the performance of Non-independent Directors and the Board as a whole. ii) Assess the Quality, Quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. 6) DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirements under Section 134 (5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed:- l) that in the preparation of the accounts for the financial year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company and of the loss of the Company for the year under review; iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the Directors have prepared the accounts for the year ended 31st March, 2015 on a 'going concern' basis; v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; vi) that Directors had devised proper systems to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively. 7) DIRECTORS! i) Independent Directors: Independent Directors have given declarations under Section 149(6) of the Companies Act, 2013 that they meet the criteria of independence. ii) Retirement by Rotation: In accordance with Section 152 of the Companies Act, 2013, Shri Kumar Srinivasan (DIN : 00054057) Director of Company, retires by rotation at the ensuing Annual General Meeting. However, he has indicated to the Company that he is not seeking re-appointment Board has decided not to fill up the vacancy so caused on the board. 8) FORMULATION OF POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION: The Nomination and Remuneration Committee recommended and Board approved the policy for selection of appointment of directors and their remuneration. The key provisions of this policy are as follows: i) Criteria of selection of Non-Executive Directors: a. The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board. b. In case of appointment of Independent Directors, the Committee shall satisfy itself with regard to the independence of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively. c. The Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 ofthc Companies Act, 2013. d. The Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director: i. Qualification, expertise and experience of the Directors in their respective fields; ii. Personal, Professional or business standing. e. In case of re-appointment of Non-Executive Director, the Board shall take into consideration the performance evaluation of the Director and his engagement leveL ii). Remuneration; The Non-Executive Directors may be paid remuneration by way of sitting fees for participation in the Board / Committee meetings and commission as may be decided by the Board from time to time. 9) SUBS1DIARY/I01NT VENTURE/ASSOCIATE COMPANIES: The Company does not have any subsidiary, Joint Venture, Associate Companies. 10) SIGNIFICANT AND MATERIAL ORDER; There was no order passed by any regulator or court or tribunal impacting the going concern status and Company's Operations. 11) INTERNAL FINANCIAL CONTROLS: There are adequate internal financial controls with reference to Financial Statements. 12) AUDITORS: i) Statutory Auditors: M/s. S G C O & Co., Chartered Accountants, Mumbai, [ICAI Registration No. 112081W) were appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 27th September, 2014 for a period of 5 years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM. There was no adverse Audit Remark by the Auditor in his Report ii) Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed JM & Associates, Company Secretaries to undertake the secretarial audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure B". As regards observation of the Secretarial Auditor, your Company would like to state that the Company is in process of appointing required Key Managerial Personnel iii) Internal Auditors: M/s Harish K. Kothari & Co., Chartered Accountants, Mumbai [ICAI Registration No. 127830W) performs the duties of Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time. 13) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Your Company has not given any Loan or any Guarantee and has not made any investments in securities which are covered under the provisions of Section 186 of the Companies Act, 2013. 14) RELATED PARTY TRANSACTIONS: There were no related parly transactions entered during the year which are covered under Section 188 of the Companies Act 2013. 15) MATERIAL CHANGES AND COMMITMENTS: There are no material changes and commitments that may affect the financial position of the Company from the date of the Balance sheet till the date of this report. 16) INFORMATION AS REQUIRED UNDER SECTION 134 f3l fml OF THE COMPANIES ACT. 2013: i). Conservation of Energy: Your Company is making continuous efforts to conserve energy consumption wherever practicable by economizing on the use of power and fuel in the factory and offices. ii). Technology Absorption: No new technology absorption has been made during the financial year 2014-15. iii). Foreign Exchange Earnings and Outgo: There were no Foreign exchange earnings and outgo during the financial year 2014-15. 17) BUSINESS RISK MANAGEMENT: The Company has formulated Risk Management Policy and main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. 18) PUBLIC DEPOSITS: During the year under review, the Company has not accepted any deposit within the meaning of Section 73 and 75 of the Companies Act, 2013. 19) CORPORATE SOCIAL RESPONSIBILITY: Since the Company does not meet the prescribed threshold, provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company. 20) FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD: Pursuant to the provisions of the Section 134 (3) (p) of the Companies Act, 201 3, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit; Nomination & Remuneration and Stakeholders Committee. The Directors expressed their satisfaction with the evaluation process. The performance evaluation of Non-independent Directors was carried out by the Independent Directors. 21) PARTICULARS OF EMPLOYEES: i) Particulars of Employees within the meaning of Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended are Nil as none of the Company's employees were in receipt of the remuneration of more than Rs. 60,00,000/- during the year ended 31st March, 2015 or more than Rs. 5,00,000/- per month during any part of the said year. Further, there is no details lobe reported as required pursuant to Rule 5(2)(iii] of the Companies [Appointment and Remuneration of Managerial Personnel) Rules, 2014, since there was no employee in receipt of remuneration in excess of the limits prescribed therein. ii) Since none of the Directors has been paid any remuneration, there arc no further details tobe reported under Section 197 (12) read with applicable Rules under Companies Act, 2013. iii) There were 2 employees on the rolls of the Company as on 31" March, 2015 whose salary increased by 7.29% over previous year whereas the profit for the year has decreased by 33%. iv) Shares of the Company are suspended for Trading. v) The remuneration paid is as per the remuneration policy of the Company. 22) CHANGE IN THE NATURE OF BUSINESS. IF ANY: During the year under review, your Company has not changed its business. 23) CORPORATE GOVERNANCE: As per SEBI Circular No. CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014 issued in respect to amendments to Clause 49 of the Equity Listing Agreement, Compliance with the provisions of Clause 49 of the Listing Agreement is not applicable to the Companies having Paid up Equity Share Capital not exceeding Rs. 10 Crore and Net Worth not exceeding Rs.25 crore, as on the last day of the previous financial year. Since the Company falls under the above criteria, Compliance with the provisions of Clause 49 will not be mandatory to the Company. In this regard, your Company has informed BSE limited vide letter dated 14th October, 2014 regarding the non-submission of Compliance report on Corporate Governance till Clause 49 becomes applicable to the Company. 24) COMPLIANCES REGARDING INSIDER TRADING: The Company was required to formulate a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI), which the Company needs to follow in order to adhere to each of the principles set out in Schedule A to the Securities and Exchange Board of India ( Prohibition of Insider Trading) Regulations, 2015. Further, Regulation 9[1) of these Regulations requires a Company to Formulate Code of Conduct to Regulate, Monitor and Report Trading by its employees and other connected persons towards achieving Compliance with said Regulations, adopting the minimum Standards as set out in Schedule B to the Regulations. Accordingly, your Company has approved and adopted following Codes: 1) Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ["Code of Fair Disclosures") as required under Regulation 8 of the Regulations, 2015. 2) Code of Conduct for Prevention of Insider Trading in Securities of Automobile Products of India Limited as required under Regulation 9(1) of the said Regulations. 25) ACKNOWLEDGEMENTS. Your Directors wishes to express its gratitude and record its sincere appreciation of the dedicated efforts by all employees and are thankful to esteemed shareholders for their support and confidence reposed in the Company. For and on behalf of the Board AUTOMOBILE PRODUCTS OF INDIA LIMITED DIRECTOR SHYAM AGARWAL (DIN:00039991) DIRECTOR SIDDHARTH AGARWAL (DIN:02055700 PLACE: MUMBAI DATE: 28th MAY, 2015 |