atul auto ltd Directors report


Dear Members,

The Board of Directors are pleased to present Thirty Fifth Annual Report along with the audited financial statements for the financial year ended March 31,2023.

FINANCIAL RESULTS

The financial performance of the Company on standalone basis for the year ended March 31,2023 is summarized below:

(Rs. in lacs except per share data)

Particulars 2022-23 2021-22
Revenue from Operations 47,470 29,382
Other Income 280 239
Total Income 47,750 29,621
Operating Costs 45,159 31,537
Profit Before Depreciation, Interest, Exceptional Items and Tax (PBDIT) 2,591 -1,916
Depreciation & Amortization Expense 1,360 933
Profit before Interest, Exceptional Items and Tax 1,231 -2,849
Interest 633 400
Exceptional Items - -
Profit before Tax (PBT) 598 -3,249
Tax Expense 158 -762
Profit after Tax (PAT) 440 -2,487
Other Comprehensive Income 2 43
Total Comprehensive Income for the period 442 -2,444
Opening Balance in Profit and Loss Account 23,157 25,601
Balance carried to Balance Sheet as Retained Earnings 23,599 23,157
Earnings per Share (Rs.) 2.00 -11.33

FINANCIAL REVIEW AND HIGHLIGHTS

During the financial year 2022-23, the performance of the company has improved and the Company could successfully achieved the positive year-end results. The highlights of the standalone financial statements for the year are as under:

• The Company sold 25,549 vehicles in FY 2022-23 in compare to 16,061 in previous year. Thus, sale of the Company increased by 59.07%.

• The Company has achieved total revenue from operations of Rs.47,470 Lacs in FY 2022-23 in compare to Rs.29,382 Lacs in FY 2021-22. Thus it is increased by 61.56%.

• Export revenue of the Company increased to Rs.4,098 Lacs in compare to Rs. 2,562 Lacs in Previous year. Thus it is increased by 59.95%

• Profit before depreciation, interest and tax reached to Rs.2,591 Lacs against the loss of Rs.1,916 Lacs in previous year.

• Profit before taxes reached to Rs.598 Lacs compare to loss before tax of Rs.3,249 Lacs in previous year.

• Net Profit after tax reached to Rs.440 Lacs compare to net loss after tax of Rs.2,487 Lacs previous year.

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

DIVIDEND

Considering the future need of the fund for business operations of the Company, the Board of Directors of the Company does not declare dividend for the year ended March 31,2023.

CAPITAL STRUCTURE AND PREFERENTIAL ISSUE OF WARRANTS

Upon receipt of necessary approvals of the members of the Company, stock exchanges, the Company has issued made a preferential issue of warrants of Rs.115 Crore during the year. Upon receipt of an amount aggregating to Rs.28.75 Crore, being 25% of the total consideration payable ("Warrant Subscription Price"), the Securities Allotment Committee of the Board of Directors of the Company at its meeting held on November 15, 2022 allotted 58,08,080 Fully Convertible Warrants ("Warrants") to Shri Jayantibhai J Chandra, M/s. Khushbu Auto Private Limited and Mr. Vijay K Kedia (collectively called the "Allottees") on preferential issue basis with a right to the warrant holders to apply for and be allotted 1 (one) equity share of Rs.5/- each of the Company at an issue price of Rs.198/- per share (including premium of Rs.193/- per share) for each warrant, within a period of eighteen months from the date of allotment of the said warrants in compliance with the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

During the year under review, the paid up share capital increased from Rs.10,97,16,000/- (Rupees Ten Crore Ninety Seven Lac Sixteen Thousand Only) divided into 2,19,43,200 equity shares of Rs.5/- each to Rs.11,93,96,135/- (Rupees Eleven Crore Ninety Three Lac Ninety Six Thousand One Hundred and Thirty Five Only) divided into 2,38,79,227 upon allotment of 19,36,027 equity shares against receipt of exercise price aggregating to Rs.28.75 Crore on 19,36,027 warrants. Further, the Securities Allotment Committee of Board of Directors of the Company at its meeting held on June 26, 2023 allotted 21,71,717 equity shares against receipt of exercise price aggregating to Rs.32.25 Crore on 21,71,717 warrants. Thus, the Company has received Rs.89.75 Crore out of preferential issue of Rs.115 Crore and the remaining amount is expected to be received soon.

The equity shares allotted upon conversion of the warrants, shall rank pari passu in all respects with the existing equity shares of the Company.

As on March 31, 2023, the companys authorised share capital was Rs.15,00,00,000/- (Rupees Fifteen Crores Only) divided into 3,00,00,000 (Three Crore only) equity shares of Rs.5/- (Rupees Five only) each. During the year under review, there is no change in authorized share Capital.

There is no change in share capital of the Company during the year except mention above.

CONSOLIDATED FINANCIAL STATEMENTS

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 2022-23 have been prepared in compliance with applicable Accounting Standards and on the basis of audited financial statements of the Company and its subsidiary companies, as approved by the respective Board of Directors.

In accordance with Section 136 of the Act, the financial statements, including consolidated financial statements, if any, auditors report and every other document required by law to be annexed or attached to the financial statements are available for inspection at 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 consolidated financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company at https://atulauto.co.in/subsidiaries-reports.aspx

PERFORMANCE OF SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINTVENTURES

Pursuant to 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.

During the year under review, there are no companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies. The Company does not have any Associate Company or Joint Venture. The performance of subsidiary companies during financial year 2022-23 are as under:

Khushbu Auto Finance Limited

Khushbu Auto Finance Limited ("KAFL") a Non-Banking Finance Company categorized as Investment and Credit Company (NBFC- ICC), earlier Asset Finance Company (AFC) is wholly owned subsidiary of the Company. KAFL is primarily in the business of financing of three-wheelers of Atul Auto Limited and two- wheelers of various brands. KAFL provides the finance to the customers of Atul Auto Limited in the regions where other financers are not available.

With more than 20% growth in business, FY 2022-23 has been a remarkable year for KAFL. The revenue from financing activities showed a strong growth of 20% and the bottom line for reflected a significant increase of 140% with profit of Rs.389 lakhs.

With COVID effect averaging out in market, total disbursement for FY 22-23 stood at Rs.116.51 Crore.

KAFL has opened 17 new location in the year 22-23 covering a total of 12 states resulting in presence at total 53 locations at the end of the year.

As per explanation provided under the Regulation 24 of the SEBI (Listing Obligations and Disclosure Requirements) regulations, 2015, the term "material subsidiary" shall mean a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. KAFL, wholly owned subsidiary of the Company is to be considered as unlisted material subsidiary since net-worth of KAFL is more than 20% of net-worth of the Company as on March 31,2022.

Smt. Aarti J Juneja (DIN: 06872059), Independent Director of the Company is Director of KAFL in compliance with regulation 24 of the SEBI Listing Regulations.

Atul Green Automotive Private Limited

Atul Green Automotive Private Limited is wholly owned subsidiary of the Company. It is in the business of sales of spare parts of Atul vehicles to certain international markets.

The Investment in share capital of Atul Green Automotive Private Limited was Rs.45 Lacs as on March 31,2023. Its revenue during the year was Rs.114 Lacs and earned after tax profit of Rs.7 Lacs.

Atul Greentech Private Limited

Atul Greentech Private Limited ("AGPL"), incorporated in the year 2020 is in the business of electric three wheelers as well as electric vehicle spares and parts including battery packs, battery management system, battery charger etc. for the purpose of L5 Category electric vehicles of Atul Auto Limited and various other applications and electric motor vehicles.

At the end of financial year 2022-23, the investment in share capital of AGPL was Rs.999.99 Lacs. In the month of May 2022, AGPL has raised Rs.15 Crore by way of allotment of 25,00,000 equity shares of Rs.10/- each at a price of Rs.60/- each (evaluated by Registered Valuer) on private placement basis to the shareholder/s other than the Company including Mr. Vijay K Kedia, Non-Executive Director of the Company. Post-allotment, the Company holds eighty percent stake in AGPL.

AGPL announced its foray into the electric space with the unveiling of 2 electric three-wheelers, Atul Mobili & Atul Energie at the Auto Expo 2023 in New Delhi. Atul Mobili is a passenger vehicle and Atul Energie is a cargo variant with distinct looks, robust build quality and powerful performance.

During the year, AGPL has collaborated with Honda Power Pack Energy India Pvt. Ltd. and Valeo to develop the prototype Cargo and Passenger three wheeler with the most reliable Honda Mobile Power Pack e: Swap & Valeo powertrain system. AGPL would launch the e-vehicle after successful completion of field trials. The vehicle with swapping battery will be equipped with Valeos integrated compact electric powertrain system. This world class swappable solution from AGPL will enable our fleet and individual customers to lower the Total Cost of Ownership and up front capital expenditure.

LOANS, GUARANTEES AND INVESTMENTS

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 No. 45 to the Standalone Financial Statements. These loan, guarantee and investments are in compliance with section 186 of the Companies Act, 2013.

No security has been provided during the year 2022-23.

LIQUIDITY

The Company has cash and cash equivalents of Rs.336 Lacs as on March 31,2023. Moreover, the Company has sanctioned working capital facilities Rs.3000 Lacs from IDBI Bank, Rs.750 Lacs from ICICI Bank and pre/post shipment credit facilities of USD 3.50 Million or equivalent INR from Export Import Bank of India as on March 31,2023 to meet the liquidity requirement.

TERM DEBT

The company has been sanctioned a term loan of Rs.90 Crore from EXIM Bank, for part financing the green field project at Bhayla, Dist. Ahmedabad from which the company has utilised Rs.7500 Lacs as on March 31,2023 only. Out of the proceeds of the preferential issue, the Company has started pre-payment and the same has been pre-paid in full in FY 2023-24. Now, its Debt free company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Shri Jayantibhai J Chandra is liable to retire by rotation at the ensuing AGM in compliance 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 the 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 confirmed that they are not disqualified 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 confirming 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 modification(s) or re- enactment(s) for the time being in force). The Board is of the opinion that Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs (IICA). Smt. Aarti Juneja, Shri Mohan Jit Walia and Dr. Jaichander Swaminathan have cleared the test. Shri Vijay Goel is exempted for passing the test pursuant to third proviso of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The details of policy on Directors Appointment, its remuneration including criteria for determining qualifications, 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.

During the year under review, the first term of Shri Mohan Jit Walia and Shri Jaichander Swaminathan as Independent Directors of the Company has been completed on August 09, 2022 and August 25, 2022 respectively and as they further qualifies and being eligible, on the recommendations of the Nomination and Remuneration Committee of the Company, the Board of Directors has reappointed Shri Walia by passing the resolution through circulation on August 08, 2022 and Shri Swaminathan at its Meeting held on August 13, 2022, for three more years i.e. upto August 08, 2025 and August 24, 2025 respectively and the same has been approved by shareholders at its Thirty Fourth Annual general Meeting held on September 27, 2022.

Further, the Board at its meeting held on August 11, 2023 has accepted the Resignation of Shri Vijay Kumar Goel (DIN: 05014980) from the post of Independent Director w.e.f. close of business hours on June 02, 2023 in compliance with section 168 of the Companies Act, 2013 and to fill this casual vacancy, the Board, on the recommendations of Nomination and Remuneration Committee, appointed Shri Gurudeo M Yadwadkar (DIN: 01432796) as Additional Independent Director with effect from August 11, 2023 and it is proposed to regularize him in ensuing Annual general Meeting of the Company. The Company has, in terms of Section 160(1) of the Act, received in writing a notice from Member, proposing his candidatures for the office of Independent Director. His brief profile is annexed to the notice of AGM.

The Board at its meeting held on May 20, 2023 appointed Shri Jayantibhai J Chandra as Chairman and Whole-time Director (DIN: 00057722) (Holding the position of Chairman and Managing Director) with effect from June 01, 2023 and appointed of Shri Neeraj J Chandra as Managing Director (DIN: 00065159) (Holding the position of Whole-time Director) with effect from June 01, 2023. The company has issued the postal ballot notice dated July 13, 2023 for seeking approval of shareholders for the said appointments.

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

NUMBERS OF MEETINGS OF BOARD

The Board met six times during financial year 2022-23, the details of which are provided in the Corporate Governance Report. The gap between any two meetings was within the period prescribed by the Act and the SEBI Listing Regulations.

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees as on March 31,2023:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Risk Management Committee

e. Securities Allotment Committee

As the liability for CSR for FY 2022-23 for the Company was Rs.14,13,487/-, the Board of directors at its meeting held on May 27, 2022 dissolved the CSR 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.

PERFORMANCE EVALUATION

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 SEBI 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.

DIRECTORS RESPONSIBILITY STATEMENT

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 confirm that:

a. in the preparation of the annual accounts for the financial year ended March 31, 2023, 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 31,2023 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;

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 31,2023; and

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 31,2023.

MANAGEMENT DISCUSSION AND ANALYSIS

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.

CORPORATE GOVERNANCE

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.

AUDITORS AND AUDITORS REPORT Statutory Auditors

M/s. Maharishi & Co., Chartered Accountants (ICAI Firm Registration No. 124872W) ("Existing Auditors") were appointed as statutory auditors of the Company at Thirty Fourth AGM to hold office upto thirty ninth AGM of the Company to audit the financial statements from FY 2022-23 to FY 2026-27. They have confirmed that they are not disqualified from continuing as Auditors of the Company. The peer review certificate of M/s. Maharishi & Co. is valid upto May 31,2025.

The Auditors Reports for the financial year ended March 31,2023 on the financial statements (Standalone and consolidated) of the Company is a part of Annual Report. The auditors report does not contain any qualification, reservation or adverse remark.

During the year under review, the tenure of five year as Statutory Auditors of the Company has been completed by M/s. Kamlesh Rathod & Associates, Chartered Accountants (ICAI Firm Registration No. 117930W) on the conclusion of the thirty forth AGM of the Company held on September 27, 2022.

Secretarial Auditors

The Board of Directors of the Company at its Meeting held on May 20, 2023 has appointed CS Hardik Hudda (ICSI Membership No.: A39621, CP No.:14697), Proprietor of M/s. Hardik Hudda & Associates in whole time practice having valid peer review certificate No.1805/2022 to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023 is set out in Annexure [A] to this report. Further, the Secretarial Audit Report for the financial year ended March 31, 2023 of Khushbu Auto Finance Limited (Material Unlisted Subsidiary of the Company) is set out in Annexure [B] to this Report as per requirement of regulation 24A of the SEBI Listing Regulations. The secretarial auditors report does not contain any qualification, reservation or adverse remark except non-appointment of internal auditors which have been appointed now.

The Company is not required to get its cost records audited for the financial year 2022-23.

REPORTING OF FRAUDS BY AUDITORS

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.

INTERNAL FINANCIAL CONTROLS

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.

RELATED PARTY TRANSACTIONS

All transactions entered with related parties for the financial year 2022-23 were on arms length basis and in the ordinary course of business and that the provisions of Section 188(1) 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 complies with the policy on related party transactions while identification 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.

During the year, the Company has obtained the approval of the shareholders through postal ballot on April 22, 2023 to material related party transactions with Atul Greentech Private Limited, Subsidiary of Company (i) to provide/ extend guarantee to lending banks/ financial institutions up to a maximum aggregate amount which shall not exceed Rs.125 Crore at any point of time during the period of five years w.e.f. FY 2023-24 and (ii) to sale/ supply of goods and rendering of services including jobwork up to a maximum aggregate amount Rs.125 Crore during a financial year 2023-24 with an increase of 25% on the previous year limit year on year upto FY 2027-28.

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 reviewed by Audit Committee and a statement giving details of all related party transactions are placed before the Audit Committee and the Board for review on a quarterly basis. The Company has made necessary modifications to the said policy in line with the amendments introduced by the SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021.

The details of the related party transactions as per Indian Accounting Standards (Ind AS) - 24 are set out in Note No. 41 to the Standalone Financial Statements of the Company.

ANNUALRETURN

The Companies (Management and Administration) Amendment Rules, 2020 has done away the requirement of attaching extract of Annual Return in Form MGT-9 to Boards Report. The annual return in Form MGT-7 as required under Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the website of the Company at https://atulauto.co.in/subsidiaries- reports.aspx

EMPLOYEE AND RELATED DISCLOSURES

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 modification(s) or re-enactment(s) for the time being in force).

During FY 2022-23, there was no such employee in the Company who employed throughout the year and was in receipt of remuneration of not less than one crore and two lakh rupees or not less than eight lakh and fifty thousand rupees per month if employed for a part of the financial year. Further, there is no such employees who was in receipt of remuneration in excess of drawn by the managing director or whole-time director or manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

Details of top ten 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 https://atulauto.co.in/subsidiaries-reports.aspx

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].

CORPORATE SOCIAL RESPONSIBILITY

The 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 Eradicating Hunger and Poverty. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Companys CSR policy. The Report on CSR activities which is reviewed by the Board at its meeting held on May 20, 2023 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 of directors at its meeting held on May 27, 2022 dissolved the CSR Committee with immediate effect in compliance with section 135 of the Companies Act, 2013.

The Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website at https://atulauto.co.in/corporate-governance-reports.aspx.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

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 whistle blower Policy is also available on Companys website at weblink https://atulauto.co.in/corporate-governance- reports.aspx.

CREDIT RATING

During the year under review, CRISIL Limited, the Credit Rating Agency, has assigned CRISIL BBB+/Negative (Downgraded from CRISIL A-/Stable) to long term bank facilities and CRISIL A2 (Downgraded from CRISIL A2+) to short term bank facilities of the Company. Further, CRISIL Limited, the Credit Rating Agency, has assigned CRISIL BBB+/Stable (Outlook revised from Negative; Rating Reaffirmed) to long term bank facilities and CRISIL A2 (Reaffirmed) to short term bank facilities of the Company vide its letter dated August 02, 2023.

Further, CRISIL Limited has also withdrawn its rating on the Rs.71.46 crore long-term bank facility on the request of the company as the same has been paid in full. This is in line with the withdrawal policy of CRISIL Ratings.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

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 31,2023 are annexed to this report as Annexure [E].

RISK MANAGEMENT

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks help 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 of Directors.

The Company has Risk Management Committee with the following Members as on March 31,2023:

Mahendra J Patel Member
Neeraj J Chandra Member
Jaichander Swaminathan Member
Hiren V Patel Member

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

SECRETARIAL STANDARDS OF ICSI

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.

INDIAN ACCOUNTING STANDARDS

The Company adopted Indian Accounting Standards (Ind AS) from April 1, 2017. Accordingly, the financial statements have been prepared in compliance 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 the preparation of financial statements, no treatment which is different from that prescribed in an Accounting Standard has been followed.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with 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 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 IEPF is provided in the General Shareholders Information section of this Annual Report.

OTHER DISCLOSURES

Few statutory disclosures the Company is required to do are as under:

• The Board of Director of the Company has not proposed any amount for transfer to the reserve for the financial year ended March 31,2023.

• 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 modification(s) or re-enactment(s) for the time being in force).

• The phase-II of Bhayla (Dist. Ahmedabad) Plant has been commenced.

• 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 Companys subsidiaries;

• 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 complaints/ cases filed/ pending/ disposed-off pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Company has complied with the provisions relating to the constitution of Internal Complaints Committee and other provisions under the said Act.

• No application made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the financial year ended March 31,2023.

• 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 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 nature of 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.

• The Dividend Distribution Policy is uploaded on https://atulauto.co.in/upload/investor- relation/attachment/140/aal_dividend- distributionpolicy_august-2021.pdf

• The details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof - Not Applicable

APPRECIATION

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 dealers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support.

For and on behalf of the Board of
Atul Auto Limited
Neeraj J Chandra Mahendra J Patel
Managing Director Whole-time Director & CFO
DIN: 00065159 DIN: 00057735
Place: Bhayla (Dist. Ahmedabad)
Date: August 11, 2023