automobile corporation of goa ltd Directors report

To

The Members,

The Directors present the 43rd Annual Report of Automobile Corporation of Goa Limited ("the Company" or "ACGL") along with the audited financial statements for the financial year ended March 31, 2023 .

1. Financial Results (Rs. in Lakhs)

	Standalone
Particulars	FY 2022-23	FY 2021-22
Revenue	50,621.46	28,178.02
Other income	793.13	729.21
Total income	51,414.59	28,907.23
Expenses
Operating expenditure	47,523.51	27,471.67
Depreciation and amortization expenses	467.55	497.48
Total Expenses	47,991.06	27,969.15
Profit before finance cost, tax and exception items	3,423.53	938.08
Exceptional items	296.69	(594.22)
Finance cost	8.26	9.41
Profit before tax and OCI (PBT)	3,711.96	334.45
Tax expense	927.35	(9.69)
Other comprehensive loss(net of tax)	(154.99)	(127.24)
Profit for the year	2,629.62	216.90
Attributable to:
Shareholders of the company	2,629.62	216.90
Non-Controlling Interest	-	-
Opening Balance of retained earning	8,949.92	8,733.02
Profit for the Year	2,784.61	344.14
Less: Other comprehensive losses	154.99	127.24
Total comprehensive income	2,629.62	216.90
Dividend	152.22	-
Transfer to reserve	-	-
Closing balance of retained earnings	11,427.32	8949.92

2. Dividend

Your Company has paid an Interim Dividend of 25% (i.e. Rs. 2.50 per Equity Share) to the Equity shareholders on February 15, 2023.

Based on the Companys performance, the Board of Directors has recommended a final dividend of 150% (i.e. Rs. 15/- per equity share) to the Equity shareholders for the financial year ended March 31, 2023, which is subject to the approval of shareholders in forthcoming Annual General Meeting ("AGM")

Thus, the aggregate dividend is 175% for the financial year 2022-23

The dividend would involve a total cash outflow of Rs. 1,065.51 Lakhs (Inclusive of Interim Dividend and Final Dividend) for FY 2022-23 and result in a payout of 40.52% of current profit after tax.

3. Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit for Financial Year ended 31 March,2023 in the statement of profit and loss.

4. Companys Performance

On a standalone basis, the revenue for FY 2022-23 was Rs.506.21 crore, higher by 80% over the previous years revenue of Rs. 281.78 crore in FY 2021-22. The profit after tax (PAT) attributable to the shareholders for FY 2022-23 was Rs. 26.30 crore registering a growth of 1112% over the PAT of Rs. 2.17 crore for FY 2021-22.

5. Subsidiary Companies

The Company does not have any subsidiary, associates, and joint venture companies.

6. Directors Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the audit committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY2022-23 .

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; ii. 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 the end of the financial year and of the profit of the Company for that period; iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. they have prepared the annual accounts on a going concern basis; v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

7. Directors and Key Managerial Personnel

In accordance with provision of the Act and Articles of Association of the Company, Mr. Girish Wagh (DIN:03119361), Director of the Company retires by rotation and being eligible, offers himself for re-appointment. A resolution seeking shareholders approval for his re-appointment forms part of the Notice.

Mr Aasif Malbari (DIN:07345077) resigned from the directorship of the Company w.e.f. May 8, 2023.

During the year under review Mrs. Sanu Kapoor has resigned from the post of Company Secretary and Compliance Officer of the company w.e.f. March 18, 2023 and Mr. Sanjay Chourey appointed as Compliance Officer w.e.f. March 19, 2023.

At the forthcoming AGM, approval of Members will be sought to the following appointment:

Mr. Vishal Badshah (DIN:10106666) was appointed as an Additional Non-Executive (Non-Independent) Director of the Company by the Board w.e.f May 8, 2023, liable to retire by rotation, subject to approval of Members at this AGM. He shall hold office as an Additional Director upto the date of this AGM and is eligible for appointment as a Director.

Mr. G V Ramanan (DIN:01446016) was appointed as an Additional Non-Executive (Non-Independent) Director of the Company by the Board w.e.f May 8, 2023, liable to retire by rotation, subject to approval of Members at this AGM. He shall hold office as an Additional Director up to the date of this AGM and is eligible for appointment as a Director.

The Members at the 42nd Annual General Meeting held on June 24, 2022 had approved for continuation of Mr. O. V. Ajay (DIN: 07042391) as Chief Executive Officer & Executive Director ("CEO & ED") of the Company upto March 31, 2023 including payment of remuneration upto the end of his tenure i.e. March 31, 2023. Mr. O V Ajay has been deputed by the Companys promoter Tata Motors Ltd (TML) and as per TML policy his retirement date is March 31, 2023.

Further as per the TML policy Mr. O V Ajay has been Superannuated on 31st March 2023, and the Nomination and Remuneration Committee deliberated to the board on the succession plan for the position of CEO & ED considering the current situations and the ongoing projects, The Committee reviewed few important ongoing projects such as engineering and manufacturing transformations and also, ongoing IR issues led by Mr. O V Ajay, CEO & ED. Therefore, on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on January 19, 2023, approved the extension of term of Mr. O V Ajay as CEO & Executive Director of the Company for a period of one year commencing from April 1, 2023 till March 31, 2024, upon the terms and conditions agreed between Mr. Ajay and the Company including remuneration, subject to the approval of the Members.

Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). There has been no change in the circumstances affecting their status as independent directors of the Company. In terms of Regulation 25(8) of SEBI Listing Regulations, they have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

None of the Directors of your Company is disqualified for being appointed as Director, as specified in Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014 as amended.

Brief resume and other details of the Director(s) being appointed/re-appointed at the ensuing AGM as stipulated under Secretarial Standard-2 issued by the Institute of Company Secretaries of India and Regulation 36 of the SEBI Listing Regulations, are separately disclosed in the Notice of the ensuing AGM.

The resolutions seeking approval of the Members for appointment/re-appointment of Directors of the Company forms part of the notice convening 43rd Annual General Meeting. The Board recommends their appointment/re-appointment at the ensuing Annual General Meeting.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2023 are:

1. Mr. O V Ajay (DIN: 07042391) - CEO & Executive Director

2. Mr. Raghwendra Singh Butola – Chief Financial Officer

3. Mrs. Sanu Kapoor- Company Secretary*

*Mrs. Sanu Kapoor has resigned w.e.f. March 18, 2023.

8. Number of Meetings of the Board

Six (6) meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report.

9. Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the board was evaluated by the board after seeking inputs from all the directors based on criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the board after seeking inputs from the committee members based on criteria such as the composition of committees, effectiveness of committee meetings etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and the Chairman of the Company was evaluated, considering the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors based on criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings etc.

In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

10. Policy on Directors Appointment and Remuneration and other Details

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on website of the Company at http://acglgoa.com/wp-content/uploads/2022/05/Final-ACGL-Remuneration-Policy-for-Directors-KMP..v2.pdf

11. Internal Financial Control Systems and their Adequacy

The Companys internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate.

Other details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

12. Committees of the Board

a. Audit Committee b. Nomination and Remuneration Committee c. Stakeholders Relationship Committee d. Corporate Social Responsibility Committee e. Risk Management Committee f. Capital Investment Committee

The details including to the composition of the committee (term of reference/ attendance) are included in the Corporate Governance Report, which is a part of this report.

13. Auditors

M/s. BSR & Co. LLP, Chartered Accountants (ICAI Firm Registration No.101248W/W-100022) were re-appointed as the Statutory Auditors at the 42nd Annual General Meeting of the Company for a period of five years commencing from the conclusion of the 42ndAnnual General Meeting until the conclusion of the 47th Annual General Meeting of the Company.

14. Auditors Report and Secretarial Audit Report

The statutory auditors report and the secretarial audit report do not contain any qualifications, reservations, or adverse remarks or disclaimer. Secretarial audit report is attached to this report.

15. Risk Management

The Board of Directors of the Company has formed a Risk Management Committee to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report.

16. Particulars of Loans, Guarantees or Investments

Particulars of loans, guarantees given and investments made during the year under review in accordance with Section 186 of the Companies Act, 2013 have been disclosed in the financial statements.

17. Related Party Transactions

In line with the requirements of the Act and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Companys website at http://acglgoa.com/wp-content/uploads/2021/03/Policy-on-Materiality-and-Dealing-with-Related-Party-Transactions.pdf. During the year under review, all transactions entered into with related parties were approved by the Audit Committee. Details of transactions with related party as per Form AOC-2 are provided in Annexure-I to this report.

Pursuant to SEBI Listing Regulations, the resolution for seeking approval of the shareholders on material related party transactions is being placed at the AGM.

18. Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure II of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on website of the Company at http://acglgoa.com/wp-content/uploads/2017/02/Contents-of-the-CSR-Policy-Jan-2017.pdf

19. Annual Return

As per the requirements of Section 92(3) of the Act and Rules framed there under, the Annual Return in Form MGT-7 for FY 2021-22 is available on website of the Company at https://acglgoa.com/annual-return/

20. Particulars of Employees

The information required under Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given below:

a. The ratio of the remuneration of each director to the median remuneration of the employees of the Company and percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the financial year: 2022-23

Name of Directors	Ratio of Median	Percentage increase in Remuneration
Non Executive Directors
Mr. Shrinivas V Dempo	0.82:1	46%
Dr. Vaijayanti Pandit	0.65:1	36%
Mr. Yatin Kakodkar	1.10:1	25%
Mr. Girish Wagh	0.74:1	55%
Mr. Rohit Srivastava	0.61:1	56%
Mr. Aasif Huseini Malbari	0.79:1	38%
Mr. Nagesh Pinge	0.79:1	28%
Executive Directors
Mr. O V Ajay, CEO & ED #	20.34:1	22%
Chief Financial Officer		16%
Mr. Raghwendra Singh Butola
Company Secretary
Mrs. Sanu Kapoor (upto March 18, 2023)*	-	NA
Mr. Anil Kumar Sharma (upto May 28, 2021)*	-	NA

Further Non-Executive Directors of the Company opted not to receive commission for FY2021-22 payable in FY2022-23 due to stressed financial performance of the company in FY2021-22.

# On deputation from Tata Motors Limited, Salary amount includes Deputation Charges paid through Tata Motors Ltd (exclusive of taxes) and Incentive remuneration paid/payable directly by the Company. The remuneration to Executive Director is within overall limits approved by the shareholders and within the limits prescribed under the Schedule IV of the Companies Act, 2013.

* Since the remuneration is only for part of the year, the ratio of their remuneration to median remuneration and percentage increase in remuneration is not comparable and hence, not stated.

b. The percentage increase in the median remuneration of employees in the financial year: 3%

c. The number of permanent employees on the rolls of Company 462

d. Average percentile increases 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 justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

During the year Company gave increments to staff members and VDA increase to permanent workers for FY 2022-23.

The increase in KMP salary is as a result of general increment and variable pay increase in FY2022-23, which was reduced in the previous year due to inadequacy of profits.

e. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms that the remuneration is as per the remuneration policy of the company.

f. The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary.

21. Disclosure Requirements

As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors Certificate thereon, and the Management Discussion and Analysis are attached, which forms part of this report.

A Business Responsibility Report as per Regulation 34 of the SEBI Listing Regulations, and the Dividend Distribution Policy as per Regulation 43A of the SEBI Listing Regulations are not applicable to the Company.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

22. Deposits from Public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

23. Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo [Pursuant to Companies (Accounts) Rules, 2014]

A. Conservation of Energy

The Company has always tried to improve energy efficiency significantly. During the year under review the steps taken by the Company to conserve energy include:

l At its plants, the Company has carried out various actions to optimize energy consumption and reduce losses. l Optimization of shifts done to reduce the power consumption. l In its plants and offices, the Company has replaced conventional light fixtures with energy efficient fixtures such as LED lights and tubes. l Speed Control of Fan Motor for Air Balancing at Paint shop to reduce power consumption. l Compressed air leakages checked periodically for the necessary repairs which had resulted in energy saving. l Paint Shop baking oven blower fan speed controlled and achieved reduction in power upto 4KWH (Rs.18/- per bus) at plant II of Goa. l At Plant I the Company has replaced conventional High bay lights (400 W) with energy efficient LED High bay lights (200 W).

B. Absorption of Technology

1. Efforts made towards Technology Absorption:

The Company has under taken the following initiatives for technology absorption during the year 2022-23

l Major changes carried out by the Company on LPO 1618/62 Euro-IV, Dubai A/C bus

2. Benefits derived from R&D and future plan of action:

The Company is focusing on the innovation and technology development to enhance the value of the products and manufacturing procedures in order to cater varied market demands.

3. In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): Not Applicable

4. Expenditure on Research and Development:

a)	Capital	Rs. 14.07	lakhs
b)	Recurring	Rs.155.22	lakhs
c)	Total	Rs. 169.29	lakhs
d)	Total as a percentage of net turnover	0.34%
	(Excluding other income and taxes)

.

C. Foreign Exchange earnings and outgo:

Earnings: i. On export of goods calculated on FOB basis - Rs.48.19 Lakhs ii. The Company has exported bus bodies and component parts thereof through a merchant exporter – Rs.17,015.88 Lakhs (excluding taxes)

Outgo: i. Travelling expenses – Rs. 2.56 Lakhs ii. Procurement of raw material – Nil

24. Cost Auditors

Maintenance of cost records as specified by the Central Government under Section 148 (1) of the Act is not applicable to the Company.

25. Acknowledgement

The Directors thank the Companys employees, customers, vendors, investors and academic partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

The Directors appreciate and value the contribution made by every member of the ACGL family.

The Directors appreciate and value the contributions made by all our employees and their families for making the Company what it is.