Atul Auto Ltd Directors Report.

Dear Members,

The Board of Directors are pleased to present Thirty First Annual Report along with the audited financial statements for the financial year ended March 31, 2019.


The financial performance of the Company on standalone basis for the year ended March 31, 2019 is summarized below:

(Rs. in Lacs except EPS)
Particulars 2018-19 2017-18
Revenue from Operations 66,676 56,933
Other Income 687 257
Total Income 67,363 57,190
Operating Costs 58,528 49,679
Profit Before Depreciation, Interest, Exceptional Items and Tax (PBDIT) 8,835 7,511
Depreciation & Amortization Expense 554 526
Profit before Interest, Exceptional Items and Tax 8,281 6,985
Interest 86 42
Exceptional Items - -
Profit before Tax (PBT) 8,195 6,943
Tax Expense 2,883 2,324
Profit after Tax (PAT) 5,312 4,619
Other Comprehensive Income -3 18
Total Comprehensive Income for the period 5,309 4,637
Opening Balance in Profit and Loss Account 18,216 14,702
Dividend 1,152 933
Tax on Dividend 236 190
Balance carried to Balance Sheet as Retained Earnings 22,137 18,216
Earnings per Share (Rs.) 24.21 21.05


The Company has performed well during the financial year 2018-19 and reached to the new scale of business operations. The Highlights of the Companys financial performance (Standalone) for the year ended March 31, 2019 are as under:

The Company has sold 50,049 vehicles in FY 2018-19 in compare to 42,744 in previous year. Thus, the Company has achieved the growth of 17.09%.

The Company has achieved highest ever turnover in FY 2018-19 i.e. Rs.66,135 Lacs.

Revenue from operations increased by 17.11% to Rs.66,676 Lacs (Previous year Rs.56,933 Lacs)

Export revenue increased by 59.93% to Rs.6,405 Lacs (Previous year Rs.4,005 Lacs)

PBDIT increased by 17.63% to Rs.8,835 Lacs (Previous year Rs.7,511 Lacs)

Profit before tax (PBT) increased by 18.03% to Rs.8,195 Lacs (Previous year Rs. 6,943 Lacs)

Net Profit (PAT) increased by 15% to Rs. 5,312 Lacs (Previous year Rs. 4,619 Lacs)

The highlights of consolidated results with performance of associate and subsidiary company are described in this report separately.


During the financial year 2018-19, the Board of Directors of the Company declared and paid an interim dividend of Rs.2.75 (Rupees two and Seventy Five Paisa Only) per equity share of the face value of Rs.5.00 (Rupees Five Only) each in the month of November 2018. In addition to that, your Directors recommend payment of Rs.1.25 (Rupee One and Twenty Five Paisa Only) per equity share as nal dividend for the financial year 2018-19, subject to the approval of the shareholders at the ensuing AGM. If approved, the total dividend (interim plus nal dividend) for the financial year 2018-19 will be Rs.4.00 (Rupees Four Only) (80%) per equity share as against the total dividend of Rs.5.25 (Rupees Five and Paisa Twenty Five Only) (105%) per equity share paid for the previous financial year 2017-18.

The dividend payout ratio for the year inclusive of dividend distribution tax decreased to 20% considering the future need of the fund for capital expenditure like capacity expansion, investment for e-vehicle, investment to meet with BS VI norms etc. The total dividend (interim plus nal dividend) pay-out (including dividend distribution tax) for the financial year 2018-19 will be Rs.1058 Lacs.

The nal dividend, if declared will be paid to the shareholders within thirty days from the date of AGM.


As per Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") and applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, the Consolidated Financial Statements of the Company for the financial year 2018-19 have been prepared in compliance with applicable Accounting Standards and on the basis of audited financial statements of the Company, its subsidiary and associate company, as approved by the respective Board of Directors.

In accordance with Section 136 of the Act, the financial statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the AGM. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at



Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Companys subsidiaries, Associates and Joint Ventures in Form AOC-1 is attached to the consolidated financial statements.

Khushbu Auto Finance Limited

The Company is having an Associate Company namely, Khushbu Auto Finance Limited ("KAFL"), a Non-Banking Finance Company categorized as Investment and Credit Company (NBFC-ICC), earlier Asset Finance Company (AFC). KAFL is primarily in the business of financing of automobile vehicles. KAFL aggressively provides the finance to the customers of Atul Auto Ltd in the regions where other financers are not easily available.

During the financial year 2018-19, KAFL disbursed loan of Rs.9896.68 Lacs to 6592 customers. The Asset Under Management (AUM) of the Company as on March 31, 2019 was Rs.13,980 Lacs in compare to Rs.11,470 Lacs as on March 31, 2018. During FY 2018-19, the Company has generated operational revenue of Rs.3,098 Lacs in compare to last year of Rs.1,533 Lacs. KAFL has registered Profit before Tax of Rs.1,063 Lacs in FY 2018-19 in compare to Rs.474 Lacs in previous year. The profit after tax decreased to Rs.764 Lacs from Rs.861 Lacs in previous year.

KAFL is currently focusing on establishing the network and infrastructure through Direct Branch Operations as well as through Income Distribution Partner (IDP) and tie-up with Dealers for collection. KAFL has presence in various locations in state of Gujarat, Haryana, Andhra Pradesh, Telangana, Punjab and Karnataka through Direct Branch Operations/ IDPs.

KAFL is having a Wholly Owned Subsidiary namely Sanand Home Finance Limited with an object of housing finance activities. The business will be commenced only after obtaining the required license from regulatory authority.

Atul Green Automotive Private Limited

Atul Auto Limited is having Wholly Owned Subsidiary namely Atul Green Automotive Private Limited with an object of exploring opportunities in providing e-mobility and green energy.

The Company has incorporated it with the initial investment of Rs.1 Lac as an initial equity share capital on February 12, 2018. This Company is planning to commence its business operations in financial year 2019-20.

The Company does not have any material subsidiary.

Joint Venture

The Company does not have any joint venture.


Particulars of the loans given, investment made or guarantee given pursuant to section 186 of the Companies Act, 2013 and the purpose for which the loan or guarantee or investment is proposed to be utilized by the recipient of the loan or guarantee are provided in Note Nos. 5, 12 and 28 to the Standalone Financial Statements.

No security has been provided during the year 2018-19.


We continue to maintain debt-free status for scal 2019, too. We understand that the liquidity in the Balance Sheet has to balance between earning adequate returns and the need to cover financial and business risks. Liquidity enables us to make a rapid shift in direction, if there is a market demand. As on March 31, 2019 we had liquid assets of Rs.1892 lacs as against Rs.6181 lacs at the previous year end. These funds comprise cash, bank balance and investment in liquid mutual funds.

The Company has pre-approved bank credit facilities of Rs.1500 Lacs from IDBI Bank Limited and $3.50 Million from EXIM Bank in the form of cash credit, working capital demand loan and pre/ post shipment credit to meet the requirement of working capital in future.


The Company has made the expenditure for plant and building at Bhayla, Bavla near Ahmedabad for future expansion. The Company incurred total capital expenditure Rs.6,983 Lacs (including Capital work-in progress and advance for capital good amounting to Rs.5,710 Lacs) whereas in previous year, it was Rs.899 Lacs (including Capital-work-in progress and advance for capital goods amounting to Rs.425 Lacs). The entire capital expenditure was funded out of internal accruals only.


The term of three Independent Directors namely Mr. Hakubhai Lalakiya, Mr. Hasmukhbhai Adhvaryoo and Mr. Hemantkumar Bhatt expires on August 11, 2019. The Board places on record its deep sense of gratitude and appreciation for their immense contribution, strategic guidance provided during his tenure as an Independent Director and members of various committees of the Company.

The Company has received the letter from National Stock Exchange of India Limited ("NSE") on July 17, 2019 asking for the clarification in respect of non-compliance due to continuance of directorship of Mr. Hasmukhbhai Adhavryoo from April 01, 2019 even if his age is more than 75 years. The Company has submitted the clarification to NSE with the proof of ordinary resolution passed in 28th AGM on September 16, 2016 with special majority in respect of extension of his term upto August 11, 2019.

The Company has conveyed the matter to Mr. Hasmukhbhai Adhavryoo who has voluntarily given his resignation on July 17, 2019 with reason that there would not be any further non-compliance if it is there. The Board Meeting of the Company has accepted the said resignation at its meeting held on July 20, 2019. The Board has also decided to ratify continuance of directorship of Mr. Hasmukhbhai Adhvaryoo for the period April 01, 2019 to July 17, 2019 by passing special resolution in the forthcoming AGM of the company and the same has been proposed at item no. 7.

On the basis of recommendations of the Nomination and Remuneration Committee, the Board of Directors has appointed Ms. Aarti J Juneja, Mr. Mohanjit Singh Walia and Mr. Jaichander Swaminathan as Independent Directors (Additional) of the Company to ll the casual vacancy who will hold office till the ensuing AGM. The Nomination and Remuneration Committee has recommended the regularization of office of all three Independent Directors in upcoming AGM. The Company has, in terms of Section 160(1) of the Act, received in writing a notice from Member(s), proposing their candidatures for the office of Directors. The brief pro les of them are annexed to the notice of AGM.

Mr. Jayantibhai J Chandra, Chairman and Managing Director of the Company is liable to retire by rotation at the ensuing AGM to comply with the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for reappointment. The Independent Directors of Company are not liable to retire by rotation as per provisions of section 149(13) of the Companies Act, 2013.

All the directors of the Company have con rmed that they are not disquali ed from being appointed as directors in terms of Section 164 of the Companies Act, 2013. The Company has received declarations from all the Independent Directors con rming that they meet the criteria of independence as prescribed under 149(6) of the Companies Act, 2013 read with Rules issued there under as well as Regulation 16(1)(b) of the Listing Regulations (including any statutory modi cation(s) or re-enactment(s) for the time being in force).

The details of policy on Directors Appointment, its remuneration including criteria for determining quali cations, positive attributes, independence of a director and other matters provided under subsection (3) of section 178; and performance evaluation has been described in detail in the report on Corporate Governance of the Company which forms and integral part of the report.

There was no change in the Key Managerial Personnel during the year.


The Board met four times during financial year 2018-19, the details of which are provided in the Corporate Governance Report. The gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI Listing Regulation.


The Board of Directors has the following Committees:

(a) Audit Committee

(b) Nomination and Remuneration Committee

(c) Stakeholders Relationship Committee

(d) Corporate Social Responsibility Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.


The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for evaluating the performance of Individual Directors, Committees of the Board and the Board as a whole.

In terms of the requirement of the Companies Act, 2013 and the Listing Regulations, an annual performance evaluation is undertaken. The details of the evaluation process, parameters etc. are set out in the Corporate Governance Report which forms a part of this Annual Report.


Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, the Directors, based on the information and representations received from the Board of Directors con rm that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards had been followed and there are no material departures from the same;

b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2019 and of the Profit of the company for that period;

c) they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

and e) they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively during the financial year ended March 31, 2019.

f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively throughout the financial year ended March 31, 2019.


The Management Discussion and Analysis forms an integral part of this report and gives details of the overall industry structure, economic developments, outlook, operational performance and state of affairs of your Company.


In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with Certificate from the Auditors on its compliance forms an integral part of this report.


Statutory Auditors

M/s. Kamlesh Rathod & Associates, Chartered Accountants (ICAI Firm Registration No. 117930W) were appointed as statutory auditors of the Company at twenty ninth AGM to hold office upto thirty forth AGM. M/s. Kamlesh Rathod & Associates have con rmed that they are not disquali ed from continuing as Auditors of the Company.

The Auditors Report for the financial year ended March 31, 2019 on the financial statements (Standalone and consolidated) of the Company is a part of Annual Report. The auditors report does not contain any quali cation, reservation or adverse remark.

Secretarial Auditors

The Board of Directors of the Company has appointed CS Bunty Hudda (CP No. 11560) to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 is set out in Annexure [A] to this report. The Secretarial Audit Report does not contain any quali cation, reservation or adverse remark.

The Company is not required to get its cost records audited for the financial year 2018-19.


During the year under review, the Statutory Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee or Central Government under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.


The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.


All transactions entered with Related Parties for the year under review were on arms length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there is no material transaction with any related party during the year under review. The Company has complies with the policy on related party transactions while identi cation and monitoring it.

All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated by the Company. There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee as also to the Board for review and approval. Omnibus approval of the Audit Committee was obtained for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Audit Committee and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note No. 35 to the Standalone Financial Statements of the Company.


The extract of annual return in Form MGT-9 as required under Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure [B] to this Annual Report. The Annual Return is also available on the website of the Company at


The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations (including any statutory modi cation(s) or reenactment(s) for the time being in force).

Details of employee as per Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available at the Registered Office of the Company during working hours, 21 days before the Annual General Meeting and shall be made available to any Shareholder on request. Such details are also available on your Companys website

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure [C].


Your Company has always laid emphasis on progress with social commitment. We believe strongly in our core values of empowerment and betterment of not only the employees but also our communities. Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities. The Company has undertaken projects in the area of promoting education, promoting health care, ensuring environment sustainability, eradicating hunger and poverty etc. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companys CSR policy. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure [D] and forms an integral part of this Report.

The Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website at


The Company has adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the Internal Rules/ Code of Conduct of the Company. The details of the same have been described in more depth in Corporate Governance Report.

The Company has established system for reporting, investigation and suitable action in line with the whistle blower policy. The Whistleblower Policy is also available on your Companys website at weblink


The CRISIL has reaf rmed his rating as CRISIL "A" with stable outlook for the cash credit facility of Rs.15 Crores approved to the Company by IDBI Bank Limited. The rating continues to reflect the Companys above-average financial risk pro le, marked by low gearing, above average debt protection metrics, improving market share, established distribution network and efficient working capital management.


The particulars of conservation of energy, research and development, technology absorption and foreign exchange earnings and outgo in terms of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 for the year ended March 31, 2019 are annexed to this report as Annexure [E].


Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee. The Company is not required to constitute Risk Management Committee as per regulation 21 of the Listing Regulations.

Some of the risks that the Company is exposed to are: Financial Risk, Commodity Price Risk, Regulatory Risk, Human Resource Risk, Strategic Risk etc.


Pursuant to the approval given on April 10, 2015 by the Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India (ICSI), the Secretarial Standards on

Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from July 1, 2015. The Company is in compliance with the same.


The Company adopted Indian Accounting Standards (Ind AS) from April 1, 2017. Accordingly, the financial statements have been prepared in accordance with Ind AS as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Act and other relevant provisions of the Act.


In accordance with the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund ) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority. The details relating to amount of dividend transferred to the IEPF is provided in the General Shareholders Information section of this Annual Report.


Few statutory disclosures, the Company are required to be disclosed are as under:

The paid up Equity Share Capital as at March 31, 2019 stood at Rs.10.97 Crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

The Board of Director of the Company does not propose any amount for transfer to the reserve for the financial year ended March 31,2019.

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modi cation(s) or re-enactment(s) for the time being in force).

The Company has not paid any commission to any of its Directors and hence, provision of disclosure of commission paid to any Director as mentioned in Section 197(14) is not applicable.

The Managing Director of the Company has not received any remuneration or commission from any of Companies subsidiary;

There has been no instance of any revision in the Boards Report or the financial statement under Section 131(1) of the Act.

During the year under review, there were no cases led pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

There have been no material changes /commitments, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report. There has been no changes in the nature of the business of the Company.

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

The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors.


Your Directors wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year.

Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of

Atul Auto Limited

(J J Chandra)

Chairman and Managing Director

[DIN: 00057722]

Shapar (Dist. Rajkot)

August 26, 2019