We had in 2015-16 sluggish demand for spare parts with your Company witnessing a 2%
drop in sales. On the commercial vehicle end upgradation of power train specifications
have increased replacement cycle for engine, gearbox and axle parts. Increased focus of
vehicle manufacturers to market spare parts through vehicle dealerships have curtailed
sales levels of these parts from us. Relative stability of commodity prices have
encouraged lower stock holding at our parts dealers.
Vigorous steps are being taken by your Company to grow the business in this difficult
market. 5 new outlets have been opened and sales commenced in two new product lines early
in the year under review. While the margins dropped in the first half, it was possible to
maintain better margins in the second half. We are hopeful that this trend will continue
in 2016-17.
Non-operating income at Rs 7.44 crores is lower compared to the year 2014-15, where
non-operating income was Rs 9.53 crores.
The Indian economy is expected to grow above 7% in 2016-17 driven by services sector
growth and impetus given by the Government of India for investments in infrastructure. The
prediction of an above normal monsoon is likely to increase agricultural output and likely
growth in demand for consumer goods in rural areas.
Your Company also plans to open more outlets in this fiscal year 2016-17 to have
greater access to the markets.
Internal Control Systems
The Company has an effective and adequate Internal Control System commensurate with the
size of the business. The scope of the Internal Audit function is defined in the Internal
Audit Plan. Additional staff have been added to the internal audit team in line with
increase in number of branch outlets. During the year under review, your Company appointed
an Independent Chartered Accountant for audit of Internal Financial Controls over
Financial Reporting.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of the
internal control systems of the Company. The Internal Audit Team ensures compliance with
systems and procedures through their regular visits to all branches.
The Internal Audit Reports are reviewed by the Internal Auditor, Senior Management and
Audit Committee periodically. Based on the reports, corrective action, as required are
undertaken.
Consolidated Financial Statements
In accordance with the provisions of Sections 129(3) 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 Associate
Company in Form AOC - 1 is provided in Annexure "A" forming part of this report.
Information as per Sec 134 (3) (f) - Events subsequent to the date of financial
statements
There have been no material changes and commitments affecting the financial position of
the Company between 31.03.2016 and the date of the report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the Regulators / Courts which
impacts the going concern status of the Company and its future operations. There are no
material changes and commitments, if any, 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 to and the date of the report,
Finance
a) Fixed Deposits
Your Company has not accepted any public deposits during the year 2015-16.
b) Particulars of Loans, Guarantees or Investments
The company has not given any loans or guarantees covered under the provisions of
section 186 of the Companies Act, 2013. The details of the investments made by company is
given in the notes to the financial statements.
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
All Directors and Senior Management Personnel have affirmed compliance with the Code of
Conduct approved and adopted by the Board of Directors.
The Independent Directors of the Company have given a declaration as required under
Section 149 (6) of the Companies Act, 2013.
Sri Ananth Ramanujam, Director retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for re-appointment.
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 (10) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has
carried out an annual performance evaluation of its own performance, the directors
individually as well as the evaluation of the working of its Audit Committee.
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 (3) & (4)
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a
Separate Meeting of Independent Directors was 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 of the Company. The criteria for evaluation is attached
vide Annexure "B".
Familiarisation Programme
The Company has a program to familiarise Independent Directors with regard to their
roles, rights, responsibilities in the Company, nature of the industry in which the
Company operates, the business model of the Company etc. and the same is available on the
website of the Company at www.impal.net/investor.htm.
Remuneration Policy
The Remuneration policy of the company is attached vide Annexure "C". The
Nomination & Remuneration Committee followed the policy for selection and appointment
of Directors, Senior Management and their remuneration.
Key Managerial Personnel
The following persons are the Key Managerial Personnel of the Company under Section 203
of the Companies Act, 2013.
1. Sri N Krishnan - Managing Director
2. Sri S Ramasubramanian - Chief Financial Officer
3. Sri S Kalyanaraman - Company Secretary & Compliance Officer
Vigil Mechanism/Whistle Blower Policy
The Company has a vigil mechanism policy in place to deal with instance of fraud and
mismanagement, if any and the same is also posted on the website of the Company at
www.impal.net/investor.htm.
Related Party Transactions
All Related Party Transactions that were entered into during the financial year were in
the ordinary course of business at arm’s length. Due to change in the constitution of
a Related party entity with which the company has been contracting with, such contract
with that related party amounted to a Material Related Party transaction in terms of
Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements) Regulations
2015. In terms of the above regulations the company during the year had sought the
approval of shareholders by an Ordinary Resolution through Postal Ballot in March 2016.
The shareholders voted in favour of the resolution. Out of the total votes polled 98.96%
voted in favour of the resolution. The results of the postal ballot and e-voting is
available in the website of the Company at www.impal.net/investor.htm
Since, the said contract is in ordinary course of business at arm’s length, it is
not a Related Party transaction in terms of Section 188 of the Companies Act 2013 and
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.
All Related Party Transactions are placed before the Audit Committee as also the Board
for approval. Prior approval of the Audit Committee is obtained on a quarterly basis for
the transactions which are predictive and repetitive in nature. The transactions entered
into pursuant to the approval are audited and a statement giving details of all related
party transactions is placed before the Audit Committee and the Board of Directors for
their approval on a quarterly basis. The policy on Related Party Transactions as approved
by the Board is uploaded on the Company’s 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, Livelihood, Adoption of
Village Schools, Empowering Women etc., These projects are in accordance with Schedule VII
of the Companies Act, 2013. The CSR Committee frames the CSR policy, monitors and execute
the CSR activities. The Committee defines the parameters and observes them for effective
discharge of the social responsibility of your Company. The Board has further approved the
CSR Policy of the Company to provide a guideline for CSR activities of the Company.
The Company has spent Rs. 50.30 lakhs towards CSR during the year. The constitution of
the CSR Committee and the report as required under the Companies Act, 2013 are provided as
Annexures "D" & "D1" to this Report.
Auditors
The Auditors, M/s Sundaram & Srinivasan, Chartered Accountants, Chennai, retire at
the ensuing Annual General Meeting and have confirmed their eligibility and willingness to
accept office, if reappointed. A certificate under Section 141 of the Companies Act, 2013
has been received from them.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed M/s. Damodaran & Associates, a firm of Company Secretaries in Practice to
undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor is
attached vide Annexure "E".
Comments on Auditors’ report
There are no qualifications, reservations or adverse remarks or disclaimers made by the
Statutory Auditors and Company Secretary in Practice in their reports respectively. The
Statutory Auditors have not reported any incident of fraud to the Audit Committee of the
Company in the year under review.
Extract of Annual Return
As required under Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the
Companies (Management and Administration) Rules 2014 an extract of the Annual Return in
Form MGT-9 is attached as a part of this report vide Annexure "F".
Information as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The
Companies (Accounts) Rules, 2014
Your Company has no activity relating to conservation of energy or technology
absorption. During 2015-2016, the Company did not have any foreign exchange earnings or
outgo.
Particulars of Employees
There is no employee, particulars of whom are to be furnished under Section 197 read
with Rule 5 (2). The information required under Section 197(12) read with Rule 5, of The
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given
hereunder:
i & ii The ratio of remuneration of each director to the median remuneration of the
employees of the company for the financial year:
The ratio of average remuneration of Non-Whole Time Directors with that of the median
remuneration of the employees for the financial year is 0.40 times and that of the
Managing Director (inclusive of his Commission) is 82 times.
(iii) Percentage increase in median remuneration of employees in the financial year -
8%
(iv) The number of permanent employees on the rolls of the Company as on 31st March
2016 is 635.
(v) Explanation on the relationship between average increase in remuneration and
Company performance:
The Company’s Profit Before Tax for the year under review has decreased by 12.98
%. The average increase in remuneration of employees was 11.76% on their gross earnings.
(vi) Comparison of the remuneration of the Key Managerial Personnel against the
performance of the Company.
| Name |
Designation |
CTC (Rs. In Lakhs) |
% Increase in CTC |
PBT (Rs, In Lakhs) |
% decrease in PBT |
| Sri N Krishnan |
Managing Director |
141,85* |
0,20 |
|
|
| Sri S Ramasubramanian |
cfo |
39,36 |
7,08 |
3786,82 |
12,98 |
| Sri S Kalyanaraman |
Company Secretary |
11,29 |
7,52 |
|
|
*Includes commission of 1.5% on Net profit.
(vii) Variations in the market capitalization of the Company, price earnings ratio as
at the closing date of the current financial year and previous financial year and
percentage increase or decrease in the market quotations of the shares of the company in
comparison to the rate at which the company came out with the last public offer:
| Date |
Issued Capital (Shares) |
Closing Market Price |
EPS |
PE Ratio |
Market Capitalisation |
| 31,03,2015 |
8319575 |
660,60 |
37,27 |
17,72 |
549,59 crs |
| 31,03,2016 |
8319575 |
672,55 |
32,10 |
20,95 |
559,53 crs |
| Increase/Decrease |
Nil |
11,95 |
|
|
9,94 crs |
| %Increase /Decrease |
|
1,81% |
|
|
1,81% |
(viii) Average percentile increase 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:
Percentage increase in median remuneration of employees in the financial year - 8 % for
employees other than KMPs and 5% for KMPs in totality.
(ix) Comparison of the remuneration for each of the Key Managerial Personnel against
performance of the Company: - Refer Point - (vi)
(x) The Key parameters for any variable component of remuneration availed by the
Directors: Commission within the ceiling of 1% of the net profits of the Company, as
approved by the shareholders.
(xi) The ratio of the remuneration of the highest paid director to that of the
employees who are not directors but receive remuneration in excess of the highest paid
director during the year;
Not Applicable ; and
(xii) Affirmation that the remuneration is as per the remuneration policy of the
company:
Yes
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, 2016, 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 the suppliers and dealers for their continued support and
co-operation during the year under review. They also wish to thank State Bank of India for
its support and assistance.
Your Directors place on record their appreciation for the commitment, initiative and
excellent contribution of all the staff and executives of the Company.
|
On behalf of the Board of Directors |
| Chennai |
S Ram |
| 30th May 2016 |
Chairman |
+91-9892691696
