India Motor Parts & Accessories Ltd Directors Report.

Your Directors are pleased to present the 67th Annual Report together with Audited Accounts for the year ended 31st March 2021. The summarized financial results of the Company are presented hereunder:

FINANCIAL HIGHLIGHTS: STANDALONE

(Rs in Crores)
Particulars 31.03.2021 31.03.2020
Profit before tax 65.49 60.02
Less: Provision for taxation (including deferred tax) 15.21 11.12
Profit after Tax 50.28 48.90
Add : Balance in P&L Account brought forward from previous year 43.13 46.49
Profit available for appropriation 93.41 95.39
Appropriations
Transfer to General Reserve 30.00 19.16
Dividend paid - 27.46
Dividend Tax paid - 5.64
Surplus Balance in Profit & Loss Account 63.41 43.13

Management Discussion and Analysis Report

Your Companys good performance in Financial Year 2020-21 resulted in a Profit after Tax of Rs 50.28 crores. This higher profit was on account of increased operating profits.

The onset of Covid - 19 in Q1 of last year, resulted in a drastic drop in sales in the first quarter. As the virus spread to all parts of the country, operations were affected and sales levels dropped by more than 50% compared to the year before. While, the lockdown measures brought into control the spread of the virus, it also disrupted the movement of vehicles and people. This affected our business.

However, after July 2020, relaxation of restrictions allowed businesses to come back. In Q3 and Q4 of last year, pent up demand generated higher sales in spare parts. Due to the earlier disruption to the components industry, dealers stocks were low and this helped us catch up with the previous years sales.

We had concentrated on cost control in the year under review, without affecting our employees pay. Most of our employees, above 45 years of age have been vaccinated and we plan to vaccinate employees below 45 years in the next two-three months.

Coming back to the market outlook for the year 2021-22, the farm sector has been doing well, given the higher production and higher support prices. Pent up demand for passenger cars may lead to higher sales from July onwards, when we expect restrictions on movement of vehicles to be relaxed. This should revive the spare parts market in Q3 and Q4.

Hopefully the measures put in by the Government on vaccination and other measures, which, if people follow strictly, could help us avoid a third wave. however, our sales in the current year, exceeding last years appears unlikely.

During the year under review and in the coming year, the company will be making strategic investments in some companies, from whom, the Company sources important lines of spare parts.

Subsidiary:

The functioning of our subsidiary CAPL Motor Parts Private Ltd located in Ahmedabad was also affected by COVID-19. The Company recorded a turnover of Rs 13.79 Crores during the year under review as against Rs 14.82 Crores achieved during the year ended 31st March 2020. The accounts of CAPL has been consolidated in the preparation of our consolidated financial statements.

Dividend:

The Board has recommended a Dividend of Rs 10/- Per share (100%) on the paid up capital of Rs 12.48 crores for the year 2020-21 which shall be paid subject to approval of the shareholders at the ensuing Annual General Meeting.

Internal Control Systems

The Company has an established and adequate Internal Control System covering all areas of operations commensurate with the size of the business. The Internal Audit Department monitors and evaluates the efficacy and adequacy of the internal control systems of the Company. Senior Management and Audit Committee regularly review the internal audit findings as well as the effectiveness of the internal control measures.

IT systems

The application software and database are hosted on a "cloud" environment with sufficient firewalls, thereby ensuring 100% availability of data access from remote locations with sufficient safeguards built- in. This has helped and is helping the Company to carry out its regular business without interruption even during the lockdown phases during COVID -19. The MIS reports are also available instantly to the Functional Heads for review.

Consolidated Financial Statements

In accordance with the provisions of the Companies Act 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report.

A statement containing the salient features of the financial statement of the Subsidiaries and Associate Companies in Form AOC - 1 is provided in Annexure "A" forming part of this report.

The financial statements of the subsidiary, M/s CAPL Motor Parts Private Limited is also hosted in our website - www.impal.net

Board & Audit Committee

The details regarding number of Board meetings held during the financial year and composition of Audit Committee are furnished in Corporate Governance Report.

Directors

Sri Srivats ram was co-opted as additional Director with effect from 08th March, 2021 and holds office upto the date of the ensuing annual General meeting. The Company has also received due notice from a member, proposing his appointment as Director of the Company.

Sri ananth ramanujam retires by rotation at the ensuing annual General meeting and being eligible, offers himself for re-appointment.

Ah Directors and Senior management Personnel have affirmed compliance with the Code of Conduct approved and adopted by the Board of Directors.

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies act, 2013 that the Independent Directors of the Company meet the criteria of the Independence laid down in Section 149 (6) of the Companies act, 2013.

Annual Board Evaluation

The Board has made a formal evaluation of its own performance and that of its committees and individual directors as required under Section 134(3) (p) of the Companies act, 2013. Separate meeting of Independent Directors were held during the year, in which the Independent Directors evaluated the performance of the non-Independent Directors, the Board as a whole and the Chairman. The criteria for evaluation and the remuneration policy of the Company is attached vide annexure "B" & "C".

Related Party Transactions

Ah related Party Transactions that were entered into during the financial year were in the ordinary course of business and at arms length. The material related Party transaction entered during the year in terms of regulation 23 of SEBI (Listing Obligations & Disclosure requirements) regulations, 2015, was approved by the shareholders in march, 2016 for entering into such transactions on a year on year basis.

Since, the transaction was in the ordinary course of business and at arms length, hence disclosure in form AOC-2 is not required.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The policy on related Party Transactions as approved by the Board is uploaded on the Companys Website.www.impal.net/investor.htm.

Corporate Social Responsibility

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has contributed to various Projects in the areas of Health, Education and Livelihood. The constitution of the CSR Committee and the report as required under the Companies act, 2013, is attached vide annexure "D".

Business Responsibility Report

Business responsibility report is attached vide annexure "E".

Disclosure under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has set up an Internal Complaints Committee (ICC) to redress complaints. No complaints were received during the year 2020-21.

Secretarial Audit

The report of the Secretarial auditor is attached vide annexure "F".

Comments on Auditors report

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory auditors and the Secretarial auditor in their reports respectively.

Extract of Annual Return

an extract of the annual return in Form MGT-9 is posted on the website of the Company at www.impal. net/investor.htm.

Particulars of Employees

There is no employee, particulars of whom are to be furnished under Section 197 read with rule 5 (2):

(i) & (ii) The ratio of average remuneration of Non-Whole Time Directors with that of the median remuneration of the employees for the financial year is 0.30 times and that of the Executive Director (inclusive of commission) is 45 times and managing Director (inclusive of Commission) is 91 times.

(iii) The number of permanent employees on the rolls of the Company as on 31st march 2021 is 783.

(iv) Percentage increase in median remuneration of staff for the financial year - 5.93 % for staff and 4.19% for Key managerial Personnel.

(v) The Company affirms that remuneration is as per the existing remuneration policy.

Statutory Statements

There are no material changes and commitments, affecting the financial position of the Company between the end of the financial year of the Company and the date of the report.

There are no significant material orders passed by the Regulators / Courts which impacts the going concern status of the Company and its future operations.

Your Company has no activity relating to conservation of energy or technology absorption. The Company did not have any foreign exchange earnings or outgo.

your Company has not accepted any public deposits during the year 2020-21.

The Company has not given any loans or guarantees.

The details of the investments made by the Company are given in the notes to the financial statements. Directors responsibility statement

As required under Section 134(5) of the Companies Act, 2013, your Directors state that:

i) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March, 2021, and the profit of the Company for that year;

iii) 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) the Directors have prepared the annual accounts on a going concern basis and;

v) the Directors have laid down adequate internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

Corporate Governance

a detailed report on Corporate Governance, together with a certificate from the Statutory auditors in compliance with regulation 34 (3) read with schedule V of SEBI (Listing obligation and Disclosure requirements) regulations, 2015 is attached, forming part of this report.

Acknowledgement

Your Directors thank all its suppliers and dealers for their continued support and co-operation during the year under review. They also wish to thank the bankers for their support and assistance.

The 12-month ending March 31st 2021 has been a challenging period due to CoVID-19. The Board wishes to place on record their appreciation for the additional efforts and commitment displayed by all the Staff and Executives of the Company.

on behalf of the Board of Directors
Chennai S Ram
18th June, 2021 Chairman