Directors Report of Atul Auto Ltd.

Mar 31, 2023

BOARD''S 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:

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 company''s 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,
auditor''s 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
Company''s 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 Valeo''s

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, it''s 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 Company''s 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 arm''s 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 Board''s 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 Company''s
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 Company''s 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 Company''s 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 is embedded in your Company''s operating
framework. Your Company believes that managing risks help in
maximizing returns. The Company''s 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 Company''s
subsidiaries;

• There has been no instance of any revision in the Board''s
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 Company''s 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

---

Mar 31, 2018

BOARD''S REPORT

Dear Members,

The Board of Directors are pleased to present Thirtieth Annual Report along with the audited financial statements for the financial year ended March 31, 2018.

FINANCIAL RESULTS

The financial performance of the Company on standalone basis for the year ended March 31, 2018 is summarized below:

(Rs. in Lacs except EPS)

Particulars	2017-18	2016-17
Revenue from Operations	56,933	53,191
Other Income	257	247
Total Income	57,190	53,438
Operating Costs	49,679	47,242
Profit Before Depreciation, Interest, Exceptional Items and Tax (PBDIT)	7,511	6,196
Depreciation & Amortization Expense	526	528
Profit before Interest, Exceptional Items and Tax	6,985	5,668
Interest	42	58
Exceptional Items	-	-
Profit before Tax (PBT)	6,943	5,610
Tax Expense	2,324	1,905
Profit after Tax (PAT)	4,619	3,705
Other Comprehensive Income	18	11
Total Comprehensive Income for the period	4,637	3,716
Opening Balance in Profit and Loss Account	14,702	12,746
Appropriations
Dividend	933	1,152
Tax on Dividend	190	235
Transfer to General Reserve	--	373
Balance carried to Balance Sheet as Retained Earnings	18,216	14,702
Earnings per Share (Rs.)	21.05	16.88

FINANCIAL REVIEW AND HIGHLIGHTS

The Company has performed well during the financial year 2017-18 and reached to the new scale of business operations. The Highlights of the Company''s financial performance (Standalone) for the year ended March 31, 2018 are as under:

- The Company has sold 42,744 vehicles in FY 2017-18 in compare to 38,795 in previous year. Thus, the Company has achieved the growth of double digit i.e. 10.18% as committed.

- The Company has achieved highest ever turnover in FY 2017-18

i.e. Rs.55,122 Lacs

- Revenue from operations increased by 7.03% to Rs.56,933 Lacs (Previous year Rs.53,191 Lacs)

- Export revenue increased by 53.45% to Rs.4,005 Lacs (Previous year Rs.2,610 Lacs)

- PBDIT increased by 21.22 % to Rs.7,511 Lacs (Previous year Rs.6,196 Lacs)

- Profit before tax (PBT) increased by 23.77% to Rs.6,943 Lacs (Previous year Rs.5,610 Lacs)

- Net Profit (PAT) increased by 24.68% to Rs.4,619 Lacs (Previous year Rs.3,705 Lacs)

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

DIVIDEND

During the financial year 2017-18, the Board of Directors of the Company declared and paid an interim dividend of Rs.2.75 (Rupees two and paisa Seventy Five Only) (55%) per equity share of the face value of Rs.5 (Rupees Five Only) each in the month of December 2017. In addition to that, your Directors recommend payment of Rs.2.50 (Rupees Two and Fifty Paisa Only) (50%) per equity share of the face value of Rs.5 (Rupee Five Only) each as final dividend for the financial year 2017-18, subject to the approval of the shareholders at the ensuing AGM. If approved, the total dividend (interim plus final dividend) for the financial year 2017-18 will be Rs.5.25 (Rupees Five and Twenty Five Paisa only) (105%) per equity share of the face value of Rs.5 (Rupees Five Only) each as against the total dividend of Rs.4.25 (Rupees Four and paisa Twenty Five Only) (85%) per equity share of the face value of Rs.5 (Rupees Five Only) paid for the previous financial year 2016-17.

The Company has maintained its dividend payout ratio for the year inclusive of dividend distribution tax at 30%. The total dividend (interim plus final dividend) pay-out (including dividend distribution tax) for the financial year 2017-18 will be Rs.1387 Lacs.

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

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 there under, the Consolidated Financial Statements of the Company for the financial year 2017-18 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.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

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 Company''s subsidiaries, Associates and Joint Ventures in Form AOC-1 is attached to this report as Annexure [A].

Khushbu Auto Finance Limited

The Company is having an Associate Company namely, Khushbu Auto Finance Limited ("KAFL"), a Non-Banking Finance Company categorized as Asset Finance Company ("AFC"). KAFL, registered with RBI as Asset Finance Company (AFC) is primarily in the business of financing of automobile vehicles.

During the financial year 2017-18, KAFL disbursed loan of Rs.10,044 Lacs to 6050 customers. The Asset Under Management (AUM) of the Company as on March 31, 2018 was Rs.11470 Lacs in compare to Rs.3299 Lacs as on March 31, 2017. During FY 2017-18, the Company has generated operational revenue of Rs.1549 Lacs in compare to last year of Rs.286 Lacs. The Profit before Tax of the Company converts in positive numbers from FY 2017-18 i.e. Rs.474 Lacs in compare to loss of Rs.61 Lacs in previous year. The Company has earned net profit after tax of Rs.861 Lacs in the year under review. (The financial figures provided here are as per I-GAAP and not as per Ind-AS though the consolidation of accounts has been done as per Ind-AS.)

Sr No	Name of Bank/ Financial Institutions	Guarantee Given (Rs. In Lacs)	Utilization of Credit Facilities by KAFL as on March 31, 2018
1	IDBI Bank	2500	0
2	ICICI Bank	2500	2420
3	Yes Bank	5000	3192
4	Clix Finance India Private Limited	5000	2500

During the year, the Company has invested following amounts in equity share capital of the Company:

Sr No	Name of Company	Type of Company	Investment (Rs. in Lacs)	Nature of Investment
1	Khushbu Auto Finance Limited	Associate	5400	Subscribed 27 Lacs right equity shares of face value of Rs.10/-each at a premium of Rs.10/-
2	Atul Green Automotive Private Limited	Wholly Owned Subsidiary	1	Initial subscription money for 10,000 equity shares of Rs.10/-each on incorporation of the Company

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 and Karnataka through Direct Branch Operations/ IDPs.

To meet with the requirements of working capital, KAFL had increased equity share capital of Rs.18 Crores by right issue of 90 lacs equity shares of face value of Rs.10/- at a premium of Rs.10/-each. KAFL had also secured conventional working capital finance facilities from various Banks/ NBFCs for a total amount of Rs.150 Crores as on March 31, 2018. Atul Auto Limited has provided the corporate guarantee for repayment of these facilities to the Lenders.

KAFL had incorporated a Wholly Owned Subsidiary namely Sanand Home Finance Limited on June 27, 2017 with an object to commence the business of housing finance. KAFL has invested Rs.5 Lacs as initial equity share capital in Sanand Home Finance Limited. The business will be commenced after obtaining the required license from National Housing Bank (NHB).

Atul Green Automotive Private Limited

Atul Auto Limited has incorporated a Wholly Owned Subsidiary namely Atul Green Automotive Private Limited with an object of exploring opportunities in providing e-mobility and green energy. The Registrar of Companies, Gujarat, had issued the Certificate of Incorporation on February 12, 2018. The Company has invested Rs.1 Lac as an initial equity share capital in the Company. This Company is planning to commence its business in financial year 2018-19.

The Company does not have any Joint Venture as on March 31, 2018.

LOANS, GUARANTEES AND INVESTMENTS

During the year under Report, the Company has not given any loans or provided security to any person or body corporate beyond the limit as prescribed under Section 186 of the Companies Act, 2013.

The Company has provided the corporate guarantee of total amounting to Rs.150 Crores in favour of below Banks/ Financial Institutions guarantying the repayment of credit facilities in case of default by Khushbu Auto Finance Limited. Khushbu Auto Finance Limited will utilize the money borrowed for the purpose of onward lending to their customers:

LIQUIDITY

We continue to be debt-free company and maintain sufficient cash to meet our strategic objectives. 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. We believe that our working capital is sufficient to meet our current requirements. As on March 31, 2018 we had liquid assets of Rs.6181 lacs as against Rs. 5668 lacs at the previous year end. These funds comprise cash, bank balance and investment in liquid mutual funds.

CAPITAL EXPENDITURE

The Company has made the expenditure for plant and building at Bhayla, Bavla near Ahmadabad for future expansion. The Company incurred total capital expenditure Rs.685 Lacs (including Capital-work-in progress of Rs.220 Lacs) whereas in previous year, it was Rs.821 Lacs (including Capital-work-in progress of Rs.30 Lacs). The entire capital expenditure was funded out of internal accruals only.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Independent Directors of Company are not liable to retire by rotation. Mr. Mahendra J Patel, Whole-time Director & CFO is liable to retire by rotation at the ensuing AGM pursuant to 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.

Ms. Margie S Parikh has been appointed as an Independent Director of the Company at Twenty Seventh Annual General Meeting of the Company for an initial period of 3 (Three) years with effect from August 31, 2015 and this term expires on August 30, 2018. On the basis of recommendations of the Nomination and Remuneration Committee, the Board of Directors has decided to extend her term for two years more as permissible under the Act. This is subject to approval of the shareholders at the ensuing Annual General Meeting.

The terms of office of all three Executive Directors of the Company namely Mr. J J Chandra, Mr. Mahendra J Patel and Mr. Niraj J Chandra are expiring in coming months. Considering their performance, the Nomination and Remuneration Committee has recommended the Board to re-appoint them for further three years and also to revise the remuneration with performance of the Company. The Board has decided to do so with approval of the shareholders in ensuing Annual General Meeting

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 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.

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

NUMBERS OF MEETINGS OF BOARD

The Board met five times during financial year 2017-18, 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.

COMMITTEES OF THE BOARD

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.

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 operating management confirm that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2018, 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, 2018 and of the profit and loss 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, 2018.

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, 2018.

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, 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

At last Annual General Meeting, M/s. Kamlesh Rathod & Associates, Chartered Accountants (ICAI Firm Registration No. 117930W) have been appointed as Statutory Auditors of the Company from the conclusion of last annual general meeting until the conclusion of the Thirty Forth annual general meeting of the Company.

In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

M/s. Kamlesh Rathod & Associates, Chartered Accountants (ICAI Firm Registration No. 117930W) have confirmed their eligibility and qualification required under Section 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Auditors'' Report for the financial year ended March 31, 2018 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.

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 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is set out in Annexure [B] to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Company is not required to get its cost records audited for the financial year 2017-18.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee 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 Company''s 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 year under review were on arm''s 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 there under 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 developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

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 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 35 to the Standalone Financial Statements of the Company.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return as on March 31, 2018 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out in Annexure [C] to this report.

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).

Except Managing Director and Whole-time Directors, there is no employee in the Company who have been paid the remuneration in excess of the limit specified in rule 5(2)(i) and (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Details of employee as per Rule 5(2)(iii) & 5(3) of 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.

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 [D].

CORPORATE SOCIAL RESPONSIBILITY

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 Company''s CSR policy. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure [E] 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.

VIGIL MECHANISM

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.

Any incidents that are reported are investigated and suitable action taken in line with the whistle blower policy. The Whistleblower Policy is also available on your Company''s website.

CREDIT RATING

The CRISIL has reaffirmed 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 Company''s above-average financial risk profile, marked by low gearing, above average debt protection metrics, improving market share, established distribution network and efficient working capital management.

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

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, 2018 are annexed to this report as Annexure [F].

RISK MANAGEMENT

Risk management is embedded in your Company''s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company''s 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.

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

OTHER DISCLOSURES

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

- The paid up Equity Share Capital as at March 31, 2018 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, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

- 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 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 Board''s Report or the financial statement, hence disclosure under Section 131(1) of the Act.

- During the year under review, there were no cases filed 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 Company''s 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

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 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)

May 19, 2018

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Mar 31, 2016

The Directors have pleasure in presenting the 28th Annual Report along with the audited financial statements for the year ended 31st March, 2016.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March, 2016 is summarized below:

(Rs, In Lacs except EPS)

2015-16 2014-15

Revenue from Operations 53,104 49,280

Profit before Tax (PBT) 7,152 5,761

Exceptional Item - (165)

Profit before Tax after Exceptional Item 7,152 5,926

Less: Current Tax 2,434 1,920

Deferred Tax (22) (52)

Profit after Tax (PAT) 4,740 4,058

Add: Balance in Profit and Loss Account 9,231 6,977

Amount available for appropriations 13,971 11,035 Appropriations

Transfer of WDV of assets completing its useful life - 120

Deferred Tax on assets completing its useful life - (41)

Interim Dividend Declared 603 549

Tax on Interim Dividend 123 110

Proposed Dividend 548 548

Tax on Proposed Dividend 112 112

Transfer to General Reserve 474 406

Balance Carried to Balance Sheet 12,111 9,231

Earnings Per Share (Rs,) 21.60 18.49

OPERATING RESULTS AND BUSINESS OPERATIONS

During the year under review, your Company''s operating and financial performance scaled new heights which can be demonstrated by following highlights:

- Number of vehicles sold increased by 5.52% to 43,893 (Previous year 41,598)

- Revenue from operation increased by 7.76% to Rs, 53,104 Lacs (Previous year Rs, 49,280 Lacs)

- Export revenue increased by 8.74% to Rs, 1,827 Lacs (Previous year Rs,1,681 Lacs)

- Profit before depreciation, fnance cost, other income, exceptional items and tax (PBDIT) increased by 31.70 % to Rs,7,628 Lacs (Previous year Rs,5,792 Lacs)

- Profit before tax (PBT) increased by 21% to Rs, 7,152 Lacs (Previous year Rs, 5,926 Lacs)

- Tax expense increased by 29% to Rs, 2,412 Lacs (Previous year Rs,1,868 Lacs)

- Profit after tax (PAT) increased by 17% to Rs,4,740 Lacs (Previous year Rs, 4,058 Lacs)

TRANSFER TO RESERVE

Your Directors propose to transfer Rs, 474 Lacs to the General Reserve out of amount available for appropriation, and an amount of Rs, 1,211 Lacs is proposed to be retained in surplus in the Statement of Profit and Loss.

DIVIDEND

During the financial year 2015-16, your Company declared and paid an interim dividend of Rs, 2.75 (Rupees two and paise Seventy Five only) per equity share of the face value of Rs, 5 (Rupees Five) each in the month of November 2015. In addition, your Directors recommend payment of Rs, 2.50 (Rupees Two and paise Fifty only) per equity share of the face value of Rs, 5 (Rupee Five) each as final dividend for the financial year 2015- 16, subject to the approval of the shareholders at the ensuing AGM. If approved, the total dividend (excluding dividend distribution tax) (interim and final dividend) for the financial year 2015-16 will be Rs, 5.25 (Rupees Five and paise Twenty Five only) per equity share of the face value of Rs, 5 (Rupees Five) each as against the total dividend of Rs, 5 (Rupees Five only) per equity share of the face value of Rs, 5 (Rupees Five) paid for the previous financial year 2014-15.

The dividend payout ratio for the year inclusive of dividend distribution tax will be 29.25% as against 32.50% in the previous year. The total dividend (interim & final dividend) pay-out (including dividend distribution tax) for the financial year 2015- 16 will be Rs, 1,386 Lacs.

The Register of Members and Share Transfer Books will remain closed from 10th September, 2016 to 16th September, 2016 (Both days inclusive) for the purpose of payment of final dividend for the financial year ended on 31st March, 2016 and Annual General Meeting. The Annual General Meeting is scheduled to be held on Friday, 16th September, 2016.

PUBLIC DEPOSITS

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).

LOANS, GUARANTEES AND INVESTMENTS

During the year under Report, the Company has not given any loans or provided guarantee or security to any person or body corporate, in terms of Section 186 of the Companies Act, 2013.

LIQUIDITY

We continue to be debt-free and maintain sufficient cash to meet our strategic objectives. We understand that 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. We believe that our working capital is sufficient to meet our current requirements. As on 31st March, 2016 we had liquid assets of Rs, 1,282.50 lacs as against Rs, 2,580.45 lacs at the previous year end. These funds comprise cash, bank balance and investment in liquid mutual funds.

CAPITAL EXPENDITURE

The Company has made the expenditure for the initial development of the land purchased at Bhayla, Bavla near Ahmadabad for future expansion. The Company incurred a capital expenditure of Rs, 1,079 Lacs (Rs, 3,359 Lacs in the previous year). The entire capital expenditure was funded out of internal accruals.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary or Joint Venture.

The Company is having an Associate Company namely, Khushbu Auto Finance Limited, a Non-Banking Finance Company. Since the operations of this associate company is not significant and hence immaterial for consolidation. Accordingly, the accounts have not been consolidated.

CREDIT RATING

The credit rating for the cash credit facility of Rs, 15 Crores approved to the Company by IDBI Bank Limited has been upgraded to CRISIL "A" with stable outlook from CRISIL "A-" with stable outlook. The rating continues to effect the Company''s above-average financial risk profile, marked by low gearing, above average debt protection metrics, improving market share, established distribution network and efficient working capital management

AWARD AND RECOGNITION

Gujarat Innovation Society recognized and honored the jewels of Gujarat who are continuously engaged in Innovation activities and its promotion for more than two decades in any field touching the human lives with Gujarat Ratna Award. Mr. Jayantibhai J Chandra, Chairman and Managing Director of the Company has been awarded as "Gujarat Ratna" for the best performance of the Company in Auto Sector by Mrs. Anandiben Patel, the Chief Minister of Gujarat State in the award ceremony held at Ahmedabad on evening of 12th March, 2016.

PARTICIPATION AT AUTO EXPO

Your Directors are pleased to inform you that the Company had participated in the motor show – the Auto Expo 2016 held between 5th February, 2016 to 9th February, 2016 at Noida, Delhi NCR. The Company has put up prototype of the three wheeler automobile. This Expo spread over 58 acres of land with around 60,000 sqm exhibition area & convention facilities, business lounges, VIP lounges, business centre, restaurants, food courts, parking area, storage and warehouse facilities which is organized by ACMA, CII and SIAM. Almost all giants of the Auto Sectors world over took part in the expo.

Atul Auto Limited is the only Company in India who is having presence in all the above segments of three wheeler automobiles. All the vehicles of the Company have been approved by the Automotive Research Association of India. The Company sells its vehicles under the brand name "Atul Shakti", "Atul Gem" "Atul Smart", "Atul Gemini" etc.

QUALITY INITIATIVE

We continue our journey of delivering value to our customers through significant investments in quality programs. The Company has designed its operational cycle with a strong insistence of maintaining and further improving the quality of the product. The Company takes reviews directly from the customers on the regular basis and the product related requirements of the customers are duly intimated to Research and Development department for the improvements and innovations. The Company also obtains the reviews of the dealers who are in constant touch of the Customers of the vehicles. Your Directors understands that the quality of the product is the base of business.

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, performance and state of afairs of your Company''s various businesses viz., the decorative business, international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2015-16.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Independent Directors of your Company are not liable to retire by rotation. Mr. Niraj J Chandra, Whole-time Director is liable to retire by rotation at the ensuing AGM pursuant to 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 have offered himself for reappointment.

The term of Mr. Hakubhhai Lalakiya, Mr. Hasmukhbhai Adhvaryoo and Mr. Hemantkumar Bhatt, Independent Directors of the Company expires on 11th August, 2016. Your Directors proposes to extend term of Office of all three Directors for three more years.

The term of Mr. Jayantibhai J Chandra, Chairman & Managing Director and Mr. Mahendrakumar J Patel, Whole-time Director & CFO expired on 31st March, 2016. The Board has reappointed Mr. J J Chandra as the Chairman & Managing Director, and Mr. M J Patel as Whole-time Director & CFO, subject to approval of Members of the Company. Further, the Board has also approved increase in remuneration of Mr. J J Chandra, Mr. M J Patel and Mr. Niraj Chandra w.e.f. 1st June 2016 subject to approval of Members of the Company.

Necessary resolutions for the re-appointment of the aforesaid directors have been included in the notice convening the ensuing AGM and details of the proposal for re-appointment are mentioned in the explanatory statement of the notice. Your directors commend their re-appointment.

Further, the Board has appointed Ms. Margie S Parikh as Additional Independent Director of the Company pursuant to section 149, 161 and Schedule IV of the Companies Act, 2013 with effect from 19th January, 2015. The said appointment has been approved by the shareholders in the Twenty Seventh Annual General Meeting with effect from 31st August, 2015 for three years.

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.

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

COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

I. Audit Committee

II. Remuneration and Nomination Committee

III. Stakeholders'' Relationship Committee

IV. 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.

DECLARATION OF INDEPENDENCE

Your 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 and Rules issued there under as well as Regulation 16(1)(b) of Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force).

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board''s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Policy is available on the website of the Company.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

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).

Except Managing Director and Whole-time Directors, there is no employee in the Company who have been paid the remuneration in excess of the limit specified in rule 5(2)(i) and (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

None of the employees of the Company was in receipt of remuneration in financial year 2015-16 which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that 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.

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 [A].

NUMBER OF MEETINGS OF BOARD

The Board met four times during FY 2015-16. 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.

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 operating management confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from the same;

b) the directors 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 and loss of the company for that period;

c) the directors 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) the directors have prepared the annual accounts on a going concern basis; and

e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31st March, 2016 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure [B] to this report.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. The Company has a structured induction process at allocations and management development programs to upgrade skills of managers. Objective appraisal systems based on Key Result Areas (KRAs) are in place for senior management staf.

The Company is committed to nurturing, enhancing and retaining top talent through superior Learning & Organizational Development. This is a part of Corporate HR function and is a critical pillar to support the organization''s growth and its sustainability in the long run.

HEALTH, SAFETY AND ENVIRONMENT

The Company is taking continuous steps and also developing environment friendly processes for effective resource management with specific focus to energy, water and basic raw materials. Monitoring and periodic review of system regarding health, safety and environment is done on a continuous basis with emphasis and focus given to safety at workplace.

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

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 31st March, 2016 are annexed to this report as Annexure [C].

CORPORATE SOCIAL RESPONSIBILITY

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, sanitation etc. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company''s 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 i.e. www.atulauto.co.in

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, (Registration Number: 124872W) who are Statutory Auditors of the Company hold Office up to the ensuing Annual General Meeting and are recommended for re-appointment for the financial year 2016-17. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Maharishi & Co that their appointment, if made, would be in conformity with the limits specified in the said Section.

There is no Audit Qualification for the year under review. The statutory auditors have not put any adverse remark, reservation or disclaimer that the Board need to reply.

Secretarial Auditors

In terms of provisions of Section 204 of the Companies Act, 2013, read with Rules made there under, the Company has appointed M/s. Bunty Hudda & Associates, Practicing Company Secretaries (CP No. 11560) to undertake the Secretarial Audit of the Company for the financial year 2015-16. The Secretarial Audit Report is attached to this Report as Annexure [E].

There is no secretarial audit Qualification for the year under review.

The Company is not required to get its cost records audited for the financial year 2015-16.

INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s 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 year under review were on arm''s 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 there under 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 developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee as also to the Board for 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 Internal Auditor 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 policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. Your Directors draw attention of the members to Note no. 42 to the financial statement which sets out related party disclosures for the year under review.

VIGIL MECHANISM

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 confect with the Code of Business Principles of the Company. The details of the same have been described in more depth in Corporate Governance Report.

Any incidents that are reported are investigated and suitable action taken in line with the whistle blower policy. The Policy is also available on your Company''s website.

RISK MANAGEMENT

Risk management is embedded in your Company''s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company''s 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.

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

ADOPTION OF NEW ARTICLE OF ASSOCIATION OF THE COMPANY

The new Articles of Association of your Company were adopted in accordance with the provisions of the Companies Act, 2013 read with the Rules issued there under at Twenty Seventh Annual General Meeting of the Company held on 31st August, 2015.

OTHER DISCLOSURES:

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

- The paid up Equity Share Capital as at 31st March, 2016 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 31st March, 2016, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

- 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.

- There has been no instances of any revision in the Board''s Report or the financial statement, hence disclosure under Section 131(1) of the Act.

- During the year under review, there were no cases fled 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 Company''s 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.

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 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]



Place : Shapar (Dist. Rajkot)

Date : 30th May, 2016

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 27th Annual Report and the audited financial statements for the year ended March 31, 2015.

1. Financial Results

The summarized financial highlight is depicted below:

(Rs In Lacs)

Particulars 2014-15 2013-14

Profit before Tax (PBT) 5,925 4,275

Less: Current Tax 1,920 1,132

Deferred Tax (52) 163

Profit after Tax (PAT) 4,057 2,980

Add: Balance in Profit and Loss Account 6,977 5,259

Amount available for appropriations 11,034 8,239

Appropriations

Transfer of WDV of assets completing its useful life 120 -

Deferred Tax on assets completing its useful life (41) -

Interim Dividend Declared 549 439

Tax on Interim Dividend 110 75

Proposed Dividend 549 384

Tax on Proposed Dividend 112 66

Transfer to General Reserve 406 298

Balance carried to Balance Sheet 9,231 6,977

Earnings per Share 18.49 13.58

2. Operating Results and Business Operations

During the year under review, your Company's operating and financial performance scaled new heights which can be demonstrated by following highlights:

- Number of vehicles sold increased by 11% to 41,598 (Previous year 37,557)

- Sales of vehicles in overseas market increased by almost 3 times to 1464 vehicles (Previous year 585 vehicles)

- Operating revenue increased by 15% to Rs. 49,280 Lacs (Previous year Rs. 43,013 Lacs)

- Profit before depreciation, finance cost, other income, exceptional items and tax (PBDIT) increased by 28% to Rs. 5,792 Lacs (Previous year Rs. 4,538 Lacs)

- Other income and exceptional items remained at Rs. 586 Lacs and Rs. 165 Lacs respectively (Previous year Rs. 292 Lacs and Nil respectively)

- Profit before tax (PBT) increased by 39% to Rs. 5,925 Lacs (Previous year Rs. 4,275 Lacs)

- Tax expense increased by 44% to Rs. 1,868 Lacs (Previous year Rs. 1,295 Lacs)

- Profit after tax (PAT) increased by 36% to Rs. 4,057 Lacs (Previous year Rs. 2,980 Lacs)

The Company could achieve these results due to increase in efficiency at floor level. The raw material consumption ratio has also improved which was awaited. The operating EBITDA has improved by 125 basis point to 11.82% which was 10.57% in previous year.

The increase in other income is due to settlement of a legal case filed against one of the suppliers which was written off as bad debts in earlier years. The exceptional items include provision for diminution in value of investment of associate and receipt on account of litigation settlement.

The net profit margin reached to 8.28% in FY 2014-15 as against 6.94% during the previous year. In terms of earning per share, it has improved from Rs. 13.58 to Rs. 18.49, up by 36.15% precisely.

3. Transfer to Reserve

The Company proposes to transfer Rs. 406 Lacs to the General Reserve out of amount available for appropriation, and an amount of Rs. 9,231 Lacs is proposed to be retained in the Statement of Profit and Loss.

4. Dividend

In November 2014, the Company paid an interim dividend

of Rs. 2.50 per equity share of Rs. 5/- each. Your Board has recommended final dividend for FY 2014-15 at Rs. 2.50 per equity share of Rs. 5/- whereby making total dividend for the year of Rs. 5 per equity share of Rs. 5/- each (excluding dividend distribution tax) i.e. 100% on paid up share capital of the Company against Rs. 7.50/- per equity of Rs. 10/- each in last year i.e. 75% on paid up share capital of the Company.

The total dividend pay-out (excluding dividend distribution tax) for the current year is Rs. 1,097 Lacs as against Rs. 823 Lacs in the previous year.

The Dividend recommended by the Board of Directors, if approved by the Members at the AGM, will be paid on or after September 21, 2015 but before September 30, 2015 to those members whose names appear on the Company's Register of Members as on close of business hours of August 24, 2015. In respect of shares held in electronic form, the dividend will be payable on the basis of beneficial ownership as at the close of business hours on August 24, 2015 as per the details furnished by the Depositories, viz., National Securities Depository Limited (NSDL)/Central Depository Services (India) Limited (CDSL) for the purpose as on that date.

5. Product

The Company manufactures three-wheeled auto rickshaws targeting the passenger segment and cargo segment. The company manufactures the diesel powered carrier for carrying 3 to 6 passengers and also the CNG and LPG driven vehicles. In cargo segment, the company manufactures vehicles with a rated carrying capacity of up to 0.50 tones. Both these vehicles have been approved by the Automotive Research Association of India.

The company's existing products are various types of Front Engine & Rear Engine Three wheelers under the brand name "Atul Shakti", "Atul Gem" "Atul Smart" & "Atul Gemini -Dz".

The broad categories of the Products are as follow:

1. Goods Carriers 2 Passengers Carriers

3. Special Purpose Vehicle (SPVs)

I. Chicken Carrier

II. Tripper

III. Water Tank Carrier

IV. Soft Drink Carrier

V. Mobile Shop

VI. Hopper

VII. Bio Hazard

VIII. Vegetable vending

Atul Shakti, Atul Gem & Atul Smart (Loading)

It is suitable for transportation of small volumes of cargo from transit station to main offices and vice versa. It has a capacity of 500 kgs and is fitted with 7.5 HP, 4 Stroke air cooled engine. It has distinct advantages over the other pick up vans, which have mostly petrol engines. Other unique features of the vehicle include auto ignition start, fuel efficiency etc. The company has also introduced different types of vehicle to cater to the specific demand of the customers as enumerated above under category SPVs.

Atul Shakti, Atul Gem, Atul Smart & Atul Gemini-Dz (Passenger Rickshaw)

This vehicle has an approved capacity to carry 3 passengers (excluding driver) or in terms of pay load capacity it can carry 500 kgs and in case of Gemini-Dz can carry 253 kgs. The vehicle is fitted with 7.5 HP, 4 strokes air cooled diesel engine having handle bar, auto start and dry clutch facilities.

6. Quality initiative

The production process is oriented towards production of optimum product. The customer satisfaction is the top priority of the Company. The Company continues to strengthen its drive to improve quality and product offering while maintaining its low cost product development/ sourcing advantage. To improve the quality of product testing, the Company has imported the product testing machine from Singapore during the year.

7. Capital Expenditure

The Company has completed a process and procedure for acquiring a land measuring 54 acres near Ahmedabad for future expansion. The Company incurred a capital expenditure of Rs. 3,359 Lacs (Rs. 1057 Lacs in the previous year). The entire capital expenditure was funded out of internal accruals.

8. Liquidity

The Company has maintained its status of "Debt Free Company" in fiscal 2015, too. The Company does not have any borrowings at the end of the financial year. We clearly understand that the liquidity in the Balance sheet has to balance between earning adequate returns and the need to cover financial and business risk. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2015, internal cash flows have more than adequately covered working capital requirements, capital expenditure and dividend payments. As at March 31, 2015, the Company had liquid assets of Rs. 8,917 lacs as against Rs. 8,508 lacs at the end of previous fiscal 2014. Out of these liquid assets, the Company has invested Rs. 2,138 lacs in mutual fund to earn the dividend.

9. Credit rating

CRISIL has reaffirmed its long term rating of the Company at 'CRISIL A-/Stable'. The rating continues to reflect the Company's above-average financial risk profile, marked by low gearing, above average debt protection metrics, improving market share, established distribution network and efficient working capital management

10. Subsidiaries, Joint Ventures and Associate Companies

The Company doesn't have any subsidiary or joint venture companies. The Company is holding 49.91% of the paid up share capital of Khushbu Auto Finance Limited, a Non- Banking Finance Company. Khushbu Auto Finance Limited is engaged in the business of financing of three wheelers. Atul Auto Limited is holding 22,96,000 equity share of having face value of Rs. 10/- each in Khushbu Auto Finance Limited. The investment value of the same as on March 31, 2015 is Rs. 98,72,800/-

11. 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 operating management confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed and there are no material departures from the same;

b) the directors 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 and loss of the company for that period

c) the directors 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) the directors have prepared the annual accounts on a going concern basis; and

e) the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

12. Extract of the Annual Return

In accordance with section 134(3)(a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format is appended as Annexure-A to the Board's Report.

13. Numbers of meeting of Board

The Board met eight times during FY 2014-15. 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.

14. Directors

Mr. Hakubhai J. Lalakiya, Mr. Subodhchandra T Shah, Mr. Hemant J Bhatt and Mr. Hasmukh H Adhvaryoo, are Independent Directors of the Company and have been holding the position for last few years. In addition to new provisions of the Companies Act, 2013 made applicable w.e.f. April 1, 2014, the Securities and Exchange Board of India (SEBI) has amended Clause 49 of the Listing Agreement inter alia stipulating the conditions for the appointment of Independent Directors by a listed company. Hence, all four Directors have been reappointed with amended terms and conditions in the 26th Annual General Meeting of the Company held on August 12, 2014.

The Board has also appointed Dr. (Ms.) Margie S Parikh on the Board of the Company w.e.f. January 19, 2015 as Independent Director (Additional) of the Company under section 161 of the Companies Act, 2013. As per provisions of the Act, Dr. Margie S Parikh will hold the position upto conclusion of the 27th Annual General Meeting. The Company has also received the notice under section 160 of the Companies Act, 2013 from the member of the Company proposing her candidature for Director of the Company. The Board recommends the same for your approval.

Mr. J J Chandra, Chairman and Managing Director, retires by rotation and being eligible, has offered himself for re- appointment. The Board recommends the same for your approval.

The Board has accepted the resignation of Mr. S T Shah, Independent Director of the Company at its meeting held on May 9, 2015. Mr. Shah has resigned from the Board due to ailing health with effect from close of business hours on

May 9, 2015. The Board places on record its deep appreciation for the valuable contribution made by him during his tenure as Director of the Company.

15. Declaration of independence

The Company has four Independent Directors on the Board of the Company. The Company has practice to take declaration of independence from all Independent Directors of the Company on his/ her appointment/ re-appointment and also in first meeting of the Board of Directors every year. All these Directors are abiding to intimate to the Board about any change in their status of independence in the very next board meeting after such change.

The Company has received the declarations from each Independent Director under section 149(7) of the Companies Act, 2013 that he/ she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

16. Policy on Directors' appointment and remuneration

The Board of Directors has renamed the Remuneration Committee as the Nomination and Remuneration Committee in its board meeting held on May 20, 2014 as required under section 178 of the Companies Act, 2013. Mr. Hasmukh Adhvaryoo is the Chairman of the Committee. Mr. Hakubhai Lalakiya and Mr. S T Shah were the members of the Committee. All three are Independent Directors of the Company.

The Committee has drafted the policy for nomination and appointment of directors on the board of the Company which contains the criteria determining qualifications, positive attributes and independence of a Director. The Committee has also drafted a policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees. Both these policies have been submitted to the Board for their approval. The Board has approved the same in its meeting held on May 9, 2015. The same has been uploaded on the website of the Company. The same will be reviewed by the Committee on regular basis.

Further, the Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.

17. Qualification, reservation or adverse remark or disclaimer made by the auditors

The statutory auditors have not qualified the report on the financial statements of the Company for the financial ended

on March 31, 2015. The statutory auditors have not put any adverse remark, reservation or disclaimer that the Board need to reply.

The same is the case for secretarial audit report for the financial year ended on March 31,2015.

18. Contract or arrangement with related party

The Company has not entered into any contract or arrangement with related party which is not at arms' length requiring approval of shareholders in the general meeting as required under section 188 of the Companies Act, 2013.

The Audit Committee reviews all the transactions with related party on quarterly basis and recommends the same to the Board for their approval.

Your Directors draw attention of the members to Note no. 40 to the financial statement which sets out related party disclosures.

19. Risk management

The Company has framework for managing its risk. It has led down detail procedure to inform Board member about the Risk assessment and Minimization Procedure. The Company has made the policy in this regard and the same is reviewed periodically to ensure the executive management control risk through means of proper define framework.

20. Internal Financial Control

Adequate internal control systems are in place commensurate to the size and nature of operations. The Company continues to comply with high standards of corporate governance and provide our stakeholders accurate accounting and management information.

The Audit Committee directly oversees the work content of Internal Audit. The scope of work and coverage are periodically monitored and specific issues are looked into as needed.

21. Corporate Social Responsibility

The Corporate Social Responsibility Committee ("the CSR Committee") has been formulated by the Company which is headed by Mr. J J Chandra, Chairman and Managing Director of the Company. Mr. Hakubhai Lalakiya and Mr. Hasmukhbhai Adhvaryoo, Independent Directors of the Company are members of the Committee.

The Committee has recommended to the Board, a CSR Policy indicating the activities to be undertaken by the Company and specifying its implementation schedules and monitoring process. The same has been approved by the Board of Directors of the Company. One can access the same on website of the Company.

The CSR activities of the Company focus on quality health, quality education and environmental friendly production process. In addition to these three focus area, the Company also undertake need base initiatives in compliance with the schedule VII of the act.

The annual report on CSR in the format specified under rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been annexed to this report as Annexure-B:

22. Particulars of employees

Except Managing Director and Whole-time Directors, there is no employee in the Company who have been paid the remuneration in excess of the limit specified in rule 5(2)(i) and (ii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

None of the employees of the Company was in receipt of remuneration in financial year 2014-15 which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that 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.

The details required to be disclosed as per rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been detailed as Annexure-C.

The Company assists and supports the individuals who believe that they have been subjected to coercive, disruptive behavior with appropriate support and remedial action.

The Company has been working towards creating and maintaining a safe working environment wherein all employees treat each other with courtesy, dignity irrespective of their gender, race, and religion.

23. Health, Safety, and Environment

The Company is taking continuous steps and also developing environment friendly processes for effective resource management with specific focus to energy, water and basic raw materials. Monitoring and periodic review of system regarding health, safety and environment is done on a continuous basis with emphasis and focus given to safety at workplace.

24. Listing Status

The Company is listed on BSE Limited and National Stock Exchange of India Limited.

25. Corporate Governance

Your Company has always practiced sound corporate governance and takes necessary actions at appropriate times for meeting stakeholders' expectations while continuing to comply with the mandatory provisions of corporate governance.

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis, Corporate Governance as well as the Statutory Auditors' Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report.

26. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars of conservation of energy, 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, 2015 are annexed to this report as Annexure-D.

27. Statutory Auditors

M/s Maharishi & Co., Chartered Accountants, who are the statutory auditors of the company, hold office, in accordance with the provisions of the Act till the conclusion of the forthcoming annual general meeting and are eligible for reappointment. M/s Maharishi & Co., Chartered Accountants, has sought the re-appointment and has confirmed that their re-appointment if made shall be within the limits of section 139(1) of the companies Act, 2013. The audit committee and the board of directors recommended the re-appointment of M/s. Maharishi & Co., Chartered Accountants, as the Statutory Auditors of the company for the fiscal year ending on March 31,2016.

28. Secretarial Auditors

The Board has appointed Ms. Nayna Parasmalji Chopra, Practising Company Secretary, to conduct the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed herewith as Annexure-E to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

29. Other Disclosures:

The Company has not entered into few transactions and hence no disclosure is required. The list of such transactions is as under:

- The Company has not granted any loan or provided any guarantee or made any investment exceeds the limit specifies in section 186(2) of the Companies Act, 2013. Hence no approval from the shareholders in this regard is required.

- Your Company has not invited/ accepted any Fixed Deposits under the provisions of section 73 of the Companies Act, 2013 and the Rules made there under.

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

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

- No material changes and commitments have occurred after the close of the year till the date of this Report, which affect the financial position of the Company.

- The Company is not required to get its cost records audited for the financial year 2014-15.

Acknowledgements

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidence reposed in the management.

For and on behalf of the Board Of ATUL AUTO LIMITED

Place : Shapar (Dist. Rajkot) J. J. Chandra Date : May 9, 2015 Chairman and Managing Director [DIN: 00057722]

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Mar 31, 2014

Dear Meembers,

The Directors recommend the above Resolution for your approval as a Special Resolution.

Directors'' Report

Dear Members,

Your directors are pleased to present 26th Annual report and Audited Financial statements of the company for the financial year ended March 31, 2014.

1. Financial Results

Company''s financial performance for the year ended March 31, 2014 is summarized below-

Rs. In Lacs

Particulars 31-03-2014 31-03-2013

a Revenue from Operations 43,013 36,384

b Cost of materials consumed 33,039 28,349

c Changes in inventories of fnished goods work-in-progress 126 74

d Employee benefits expense 2,736 2,101

e Other expenses

- Manufacturing Expense 534 328

- Selling and distribution Expense 1,569 1,087

- General Admin Expense 470 435

f Operating Profit before interest, depreciation, taxes and amortization (PBIDTA) 4,538 4,008

g Finance costs 35 40

h Depreciation and amortization expense 521 444

i Operating Profit Before Tax 3,982 3,524

j Other Income 292 198

k Net Profit before tax and exceptional item 4,275 3,722

l Provision for Taxation 1,295 1,130

m Net Profit after tax and before exceptional item 2,979 2,592

n Net Profit after tax and exceptional item 2,979 2,592

o Profit and loss account balance brought forward 5,259 3,696

p Less Appropriation

Interim Dividend 439 -

Proposed Dividend 384 658

Tax on Dividend (Interim & Proposed) 140 112

Amount transfer to general reserve 298 259

q Balance in Profit and loss account 6,977 5,259

r Earnings per share

Basic & Diluted - 27 24

2. Dividend

Following the practice of the company to distribute 25 % of distributable Profits to the shareholders and based on the company''s performance, the directors are pleased to recommend a final dividend of Rs. 3.5 per share. Interim dividend declared by the company was Rs. 4 per share for the financial year 2013-14. During the year ended 31st March, 2014 the amount of per share dividend recognized as distributed to equity shareholders is Rs. 7.5 (previous year Rs. 6 per share) on the capital of 1,09,71,600 equity shares of Rs. 10 each. The total cash outflow because of dividend is Rs. 963 lacs, as against Rs. 770 lacs in the previous year. The dividend for the year includes Rs. 140 lacs Dividend Distribution Tax, as compared to last year of Rs. 112 lacs. The Dividend payout is subject to approval of members at the ensuing annual general meeting.

The dividend will be paid to the members whose name appear in the register of members as on closing of working hours on 06th August, 2014 , in respect of shares held in dematerialized form , it will be paid to the members whose name are furnished by NSDL, CDSL & Registrar and Share Transfer Agent, M/s Sharex Dynamic (India) Private Ltd., as beneficial owners on that date.

3. Transfer to reserve

The company Proposed to transfer Rs. 298 lacs (Rs. 259 lacs) to the general reserve out of the amount available for appropriation of Rs. 2,979 lacs (Rs. 2,592 Lacs).

4. Business and capitalization

Company has sold 37,557 vehicles compared to 32,040 vehicles in previous years and operation income of the company rose from Rs. 36,384 lacs to 43,013 lacs registering growth of 17.22 % and 18.22 % respectively.

Company incurred a capital expenditure of Rs. 1,057 lacs (Rs. 960 lacs) funded out of internal accruals.

5. Liquidity

The company does not have borrowings at the end of the financial year. We clearly understand that the liquidity in the Balance sheet has to balance between earning adequate returns and the need to cover financial and business risk. Liquidity also enables us to make a rapid shift in direction, should the market so demand. Internal cash flow for the year adequately covered working capital requirements, capital expenditure and dividend payments. At the end of the year, company had liquid assets of Rs. 8,508 lacs (Rs. 6,986 lacs). Out of these liquid assets, company invested Rs. 1,811 lacs in mutual fund to earn dividend.

6. Share Capital

During the year under Report, authorized share capital of the Company is Rs. 1,500 lacs divided into 150 lacs equity shares of Rs.10/- each.

7. Listing of securities of the company on National Stock Exchange of India Ltd

Equity shares of the company have been listed on National Stock Exchange of India Ltd, w.e.f. 26th June 2013. This will be an additional listing of shares apart from listing on BSE.

8. Credit rating

The Company continues to have the credit ratings of A- from CRISIL (S&P subsidiary) for bank Loan. Stable credit rating refects the Company''s financial discipline and prudence.

9. Management''s Discussion and Analysis Report

Management''s Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

As per clause, 49 of the Listing Agreements entered into with the stock exchange, Corporate governance Report and Auditors'' Certifcate thereon are attached and form part of this Report.

10. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under sub-section (1)(e) of section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to this Report.

11. Particulars of Employees

In terms of the provisions of the section 217(2A) of the Companies Act,1956, read with the Companies (Particulars of employees) Rule, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. Having regard to the provisions of section 219(1) (b) (IV) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered ofce of the Company.

12. Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

Pursuant to the requirement of Section 217(2AA) of the Act, and based on the representations received from the operating management, the Directors hereby confirm that:

(i) In the preparation of the annual accounts for the financial year 2013-14, the applicable accounting standards have been followed and there are no material departures;

(ii) They have selected such accounting policies and applied them consistency and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of afairs of the company at the end of the financial year and of the Profit of the company for the financial year;

(iii) They have taken proper and sufcient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared annual accounts on a going concern basis.

13. Directors

Pursuant to Section 149 of the Companies Act, 2013, the Board at its meeting held on May 20, 2014 recommended appointment of Mr. Hakubhai J. Lalakiya, Mr. Subodhchandra T Shah, Mr. Hemant J Bhatt and Mr. Hasmukh H Adhvaryoo as Independent Directors of the Company, not liable to retire by rotation for a period of two years from the date of 26th Annual General Meeting subject to approval of the Members of the Company.

In terms of the Articles of Association of the Company, Mr. Vijay K Kedia, Director, retire at the ensuing Annual General Meeting and being eligible, ofer themselves for reappointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

14. Auditors

M/s Maharishi & Co., Chartered Accountants, who are the statutory auditors of the company, hold office, in accordance with the provisions of the Act till the conclusion of the forthcoming annual general meeting and are eligible for reappointment. M/s Maharishi & Co., Chartered Accountants, has sought the re-appointment and has confirmed that their re-appointment if made shall be within the limits of section 224(1) (B) of the companies Act, 1956. The audit committee and the board of directors recommended the re-appointment of M/s Maharishi & Co., Chartered Accountants, as the Auditors of the company for the fiscal year ending on March 31, 2015.

15. Cost Auditors

The Company has appointed M/s Ashish Bhavsar & Associates for conducting the cost audit for financial year 2013-14.

16. Awards and Recognition

ET Now honoured Atul Auto Limited with "IndiaMart - Leaders of Tomorrow Award 2013" in West Zone. This award was presented to the Company at the auspicious awards ceremony held on the evening of December 04, 2013 at Mumbai.

17. Acknowledgments

The directors thank the company''s customers, vendors, investors and bankers for their continued support during the year. It is unfinching support and hard work put in by employees which made the growth of the company possible, The directors'' put sincere appreciation on record for employees. Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support. The directors also thank the government and Semi Government agencies of Government of India and state governments and approving agency Automotive Research Association of India (ARAI) for their support, and look forward to their continued support in the future.

For and on behalf of the Board

CHANDRA J. J.

May 20, 2014 Chairman & Managing Director

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Mar 31, 2013

Dear Members,

The are delighted to present the report on our business and operations for the year ended on March 31, 2013.

1. Financial Results

(Rs. in lacs)

Particulars 2013 2012

Revenue from Operations 36,384 29,882

Cost of materials consumed 28,315 24,186

Changes in inventories of finished goods work-in-progress 74 -430

Margin 7,994 6,126

Employee benefits expense 2,101 1,660

Other expenses

- Manufacturing Expense 368 474

- Selling and distribution Expense 1,087 899

- General Admin Expense 430 339

Operating Profit before interest, depreciation, taxes and 4,008 2,754 amortization (PBIDTA)

Finance costs 40 76

Depreciation and amortization expense 444 426

Operating Profit Before Tax 3,524 2,252

Other Income 198 59

Net Profit before tax and exceptional item 3,722 2,311

Provision for Taxation 1,130 765

Net Profit after tax and before exceptional item 2,592 1,546

Exceptional Item 0 13

Net Profit after tax and exceptional item 2,592 1,559

Profit and loss account balance brought forward 3,696 2,718

Proposed Dividend 658 366

Tax on Proposed Dividend 112 59

Amount transfer to general reserve 259 156

Balance in Profit and loss account 5,259 3,696

Earnings per equity share

Basic & Diluted - Before Bonus 35.44 24.77

Basic & Diluted - After Bonus 23.62 16.51

2. Dividend

Based on the company''s performance, the directors are pleased to recommend for the approval of the members a final dividend of Rs.6 per share for the financial year 2012-13 (previous year Rs.5 per share) on the capital of 1,09,71,600 equity shares of Rs.10 each. The total cash outflow on account of dividend is Rs..770 lacs, as against Rs.425 lacs in the previous year. The dividend for the year includes Rs.112 lacs Dividend Distribution Tax, as compared to last year of Rs.59 lacs. The company adheres to proclaimed policy of distributing 25% of distributable profits to the shareholders.

3. Transfer to Reserve

The company Proposed to transfer Rs.259 lacs to the general reserve out of the amount available for appropriation and an amount of Rs.5,259 lacs is proposed to be retained in the statement of profit and loss.

4. Business

Company''s total income increased to Rs.36,384 lacs from Rs. 29,882 lacs in the previous year, at a growth rate of 21.76% and No. of Vehicles sold during the year increased from 27,000 to 32,040 indicated growth of 18.67%.

Gross profit of vehicle sales amounted to Rs.6,363 lacs (17.49% of the revenue) as against Rs.4,662 lacs (15.60% of revenue) in the last year. The operating Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs.4,008 lacs (11.02% of revenue) as against Rs. 2,754 lacs (9.21% of revenue) in the previous year. Sale and marketing cost were 2.99% and 3.01% of our revenue for the year ended March 31, 2013 and March 31, 2012, respectively. Administration expenses were 1.01% and 1.59% of our revenues during the current year and previous year, respectively and General admin expenses were 1.18% and 1.13% of our revenue for the year ended march 31, 2103 and March 31, 2012. The net profit after tax before exceptional item was Rs. 2,592 lacs (7.12% of revenue) as against Rs. 1,546 lacs (5.17% of revenue) in the previous year.

5. Products

Company manufactures 3 - Wheelers in India in the sub 1 tonne category targeting the passenger segment and cargo segment. In passenger segment, the company manufactures the diesel powered carrier for carrying 3 to 6 passengers and also the CNG, LPG and Petrol driven vehicle. In cargo segment, the company manufactures vehicles with a rated carrying capacity of up to 0.50 tonne. Both these vehicles have been approved by the Automotive Research Association of India. It also provides customized vehicles like tippers, hydraulic hoppers, vegetable vending vans etc. The vehicles find wide application in courier services, industrial products, laundry construction, dairies, caterers, FMCG distribution, LPG distribution etc.

Company produces auto rickshaw under Atul Shakti, Atul Smart, Atul Gem and Atul Gemini-DZ product names.

Products:

The company''s existing products are various types of Front Engine & Rear Engine Three wheelers under the brand name "Atul Shakti", "Atul Gem" "Atul Smart" & "Atul Gemini -Dz".

The broad categories of the Products are as follow:

1. Goods Carriers

2. Passengers Carriers

3. Special Purpose Vehicle

a) Chicken Carrier

b) Tripper

c) Water Tank Carrier

d) Soft Drink Carrier

e) Mobile Shop

f) Hopper

g) Bio Hazard

h) Vegetable vending

Atul Shakti, Atul Gem & Atul Smart (Loading)

It is suitable for transportation of small volumes of cargo from transit station to main offices and vice versa. It has a capacity of 500 kgs and is fitted with 7.5 HP, 4 Stroke air cooled engine. It has distinct advantages over the other pick up vans, which have mostly petrol engines. Other unique features of the vehicle include auto ignition start, fuel efficiency etc. The company has introduced different types of vehicle to cater to the specific demand of the customers like Pack Body Vehicles, Soft Drink Carrier, High Deck, Chicken Carrier, Hydraulic Tipper, Ice - Cream shop, Hopper, Water tank carrier and Open Box type body etc.

Atul Shakti, Atul Gem, Atul Smart & Atul Gemini-Dz (Passenger Rickshaw)

This vehicle has an approved capacity to carry 3 passengers (excluding driver) or in terms of pay load capacity it can carry 500 kgs and in case of Gemini-Dz can carry 253 kgs. The vehicle is fitted with 7.5 HP, 4 strokes air cooled diesel engine having handle bar, auto start and dry clutch facilities.

6. Quality Initiative

To optimize the customer satisfaction, the Company continues to intensify its drive to improve quality and product offering while maintaining its low cost product development/sourcing advantage.

7. Capital Expenditure

The Company incurred a capital expenditure of Rs. 960 lacs( Rs. 847 lacs in the previous year). The entire capital expenditure was funded out of internal accruals.

During the year, the Company capitalized Rs. 760 lacs to gross block of Tangible Fixed Assets comprising Rs.219 lacs for investment in building, Rs.477 lacs on plant & machinery, Rs.11 lacs on furniture & fixtures and Rs.29 lacs on vehicles and Rs.24 lacs in office equipments.

Last year, the Company added Rs.287 lacs to the gross block of Tangible Fixed Assets, including investment in Rs.14 lacs for investment in building, Rs.160 lacs on plant & machinery, Rs.5 lacs on furniture & fixtures and Rs.67 lacs on vehicles and Rs.41 lacs office equipment.

8. Liquidity

The company does not have any long term borrowings and any long term and short term borrowings at the end of the financial year. We clearly understand that the liquidity in the Balance sheet has to balance between earning adequate returns and the need to cover financial and business risk. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2013, internal cash flows have more than adequately covered working capital requirements, capital expenditure and dividend payments. As at March 31, 2013, we had liquid assets of Rs.6,981lacs as against Rs.4,926 lacs at the end of previous year - 2011-12. Out of these liquid assets, we have invested Rs. 3,382 lacs in mutual fund to earn dividend.

9. Increase in Share Capital

During the year under Report, authorized share capital of the Company had been increased from Rs.800 lacs divided into 80 lacs equity shares of Rs. 10/- each to Rs. 1,500 lacs divided into 150 lacs equity shares of Rs. 10/- each. Further, the Company had issued & allotted 36,57,200 equity shares of Rs. 10/- fully paid up as Bonus shares in ratio of one share for every two shares held by the members of the Company on book closure date (i.e 5th July, 2012).

10. Application to the National Stock Exchange Ltd (NSE) for listing of securities of the Company

In month of November, 2012, the Company had made application for listing of its securities in the National Stock Exchange Ltd, Mumbai, and the approval is pending as on 31st March, 2013. This will be an additional listing of securities apart from current listing on the BSE Ltd. On listing at NSE, investors will have one more platform for liquidity of securities of the Company.

11. Corporate Governance

As per clause 49 of the Listing Agreements entered into with the stock exchange, corporate governance Report with Auditors'' Certificate thereon and a Management discussion and analysis Report are attached and form part of this Report.

12. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under sub-section (1)(e) of section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to this Report.

13. Particulars of Employees

In terms of the provisions of the section 217(2A) of the companies Act,1956, read with the companies (Particulars of employees) Rule, 1975 as amended, the names and other particulars of the employees are required to be set out in the Directors Report. Having regard to the provisions of section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.

14. Directors'' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

Pursuant to the requirement of Section 217(2AA) of the Act, and based on the representations received from the operating management, the Directors hereby confirm that:

(i) In the preparation of the annual accounts for the financial year 2012-13, the applicable accounting standards have been followed and there are no material departures;

(ii) They have selected such accounting policies and applied them consistency 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 the financial year;

(iii) 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 the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared annual accounts on a going concern basis.

15. Directors

CA S T Shah was appointed as an additional Director w.e.f. 10th November, 2012 ; CA Hemantkumar J Bhatt and Hasmukh H Adhvaryoo were also appointed as an additional Director w.e.f. 27th December, 2012.

Mahendra J Patel and Niraj J Chandra, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Ramniklal Kotecha resigned from Board w.e.f. 10th November, 2012 and Suresh Kaneria and CA Rajesh Dhruva have resigned from board w.e.f. 27th December, 2012. The board appreciates the efforts put in by them for their contribution.

16. Auditors

M/s Maharishi & Co., Chartered Accountants, who are the statutory auditors of the company, hold office, in accordance with the provisions of the Act till the conclusion of the forthcoming annual general meeting and are eligible for reappointment. M/s Maharishi & Co., Chartered Accountants, has sought the re-appointment and has confirmed that their re-appointment if made shall be within the limits of section 224(1B) of the companies Act, 1956. The audit committee and the board of directors recommended the re-appointment of M/s Maharishi & Co., Chartered Accountants, as the Auditors of the company for the fiscal year ending on March 31, 2014.

17. Cost Auditors

The Company has appointed M/s. Ashish Bhavsar & Associates, practising Cost Accountants, for conducting the cost audit for Financial year 2012-2013.

18. Acknowledgments

The directors thank the company''s customers, vendors, investors and bankers for their continued support during the year. It is unflinching support and hard work put in by employees which made the growth of the company possible, The directors'' put sincere appreciation on record for employees. Company''s consistent growth was made possible by their hard work, solidarity, cooperation and support. The directors also thank the government and Semi Government agencies of Government of India and state governments and approving agency Automotive Research Association of India (ARAI) for their support, and look forward to their continued support in the future.

For and on behalf of the Board

J J Chandra

Chairman & Managing Director

On 18th May, 2013 at Shapar (Dist. Rajkot)

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Mar 31, 2012

We are delighted to present the report on our business and operations for the year ended on March 31, 2012.

A Results of our operations

(Rs in lacs) 2012 2011

Revenue from Operations 29,882 20,204

Cost of materials consumed 24,186 15,749

Profit 5,696 4,455

Change in inventories of finished goods, work in progress (430) 98

Selling and marketing expenses 617 249

Employee benefits expenses 1,648 1,160

General and administration expenses 1,107 1,004

Operating profit Before Interest, Depreciation, Taxes and 2,754 1,944 Amortization (PBIDTA)

Finance Cost 76 183

Depreciation and amortization 426 425

Operating Profit before tax 2,252 1,336

Other income 59 61

Net profit before tax and exceptional item 2311 1397

Provisions for taxation 765 454

Net profit after tax and before exceptional item 1546 943

Exceptional Items 13 _

Net profit after tax and exceptional items 1559 943

Profit and loss account balance brought forward 2718 2141

Proposed dividend 366 234

Tax on proposed dividend 59 38

Amount transferred to general reserve 156 94

Balance in Profit and loss account 3696 2718

EPS before exceptional item (Basic & Diluted) 24.57 16.11

EPS after exceptional item (Basic & Diluted) 24.77 16.11

B. Business

Our total income increased to Rs 29,882 lacs form Rs 20,204 lacs in the previous year, at a growth rate of 47.9%. Our product export revenues aggregated to Rs 369 lacs up by 15.3% from Rs 320 in the previous year. Out of total revenue, 1.23% came from exports.

Our revenues from Domestic Market have increased from Rs 19,883 lacs to Rs 29,513 lacs with growth rate of 48.4%.

Our gross profit amounted to Rs 4,992 lacs (16.7% of the revenue) as against Rs 3,589 lacs (17.8% of revenue) in the previous year. The Profit Before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs 2,814 lacs (9.4% of revenue) as against Rs 2,005 lacs (9.9% of revenue) in the previous year. Sale and marketing cost were 2.1% and 1.2% of our revenue for the year ended March 31, 2012 and March 31, 2011, respectively. General and Administration expenses were 3.7% and 5.0% of our revenues during the current year and previous year, respectively. The net profit after tax before exceptional item was Rs 1,546 lacs (5.2% of revenue) as against Rs 943 lacs (4.7% of revenue) in the previous year.

C. Products

Company manufactures 3 - Wheelers in India in the sub 1 tonne category targeting the passenger segment and cargo segment. In passenger segment, the company manufactures the diesel powered carrier for carrying 3 to 6 passengers and also the CNG, LPG and Petrol driven vehicle. In cargo segment, the company manufactures vehicles with a rated carrying capacity of up to 0.50 tonne. Both these vehicles have been approved by the Automotive Research Association of India

We manufacture customized vehicles like tippers, hydraulic hoppers, vegetable vending vans etc. The vehicles find wide application in courier services, industrial products, laundry construction, dairies, caterers, FMCG distribution, LPG distribution etc. The company produces auto rickshaw under Atul Shakti, Atul Smart and Atul Gem brand names.

Products:

The company's existing products are various types of Front Engine & Rear Engine Three wheelers under the brand name "Atul Shakti", "Atul Gem" & "Atul Smart".

The broad categories of the Products are as follow:

1. Goods Carriers

2. Passengers Carriers

3. Special Purpose Vehicle

a) Chicken Carrier

b) Tripper

c) Water Tank Carrier

d) Soft Drink Carrier

e) Mobile Shop

f) Hopper

g) Bio Hazard

h) Vegetable vending

Atul Shakti, Atul Gem & Atul Smart (Loading)

It is suitable for transportation of small volumes of cargo from transit station to main offices and vice versa. It has a capacity of 500 kgs and it fitted with 7.5 HP, 4 Stroke air cooled engine. It has distinct advantages over the other pick up vans, which have mostly petrol engines. Other unique features of the vehicle include auto ignition start, fuel efficiency etc. The company has introduced different types of vehicle to cater to the specific demand of the customers like Pack Body Vehicles, Soft Drink Carrier, High Deck, Chicken Carrier, Hydraulic Tipper, Ice - Cream shop, Hopper, Water tank carrier and Open Box type body etc.

Atul Shakti, Atul Gem & Atul Smart (Passenger Rickshaw)

This vehicle has an approved capacity to carry 3 passengers (excluding driver) or in terms of pay load capacity it can carry 500 kgs. The vehicle is fitted with 7.5 HP, 4 strokes air cooled diesel engine having handle bar, auto start and dry clutch facilities.

D. Quality

To counter the threat of growing competition, the Company continues to intensify its drive to improve quality and product offering while maintaining its low cost product development/sourcing advantage.

E. Branding, awards and recognition

We provide comprehensive business solutions in the light of transport vehicle segment to help customers gain market differentiation and competitive advantage. We are known by the brand, "Atul" to all stakeholders and the general public.

In 2011-12, as in the years preceding, we were awarded:

"Most promising SME in Auto & engineering" by CNBC-TV18-ICICI Bank Emerging India Awards 2012, on March 22, 2012 at Mumbai.

F. Capital Expenditure

We incurred a capital expenditure of Rs 846 lacs (Rs 425 lacs in the previous year). The entire capital expenditure was funded out of internal accruals.

During the year, we capitalized Rs 287 lacs to our gross block of Tangible Fixed Assets comprising Rs 14 lacs for investment in building, Rs 155 lacs on plant & machinery, Rs 5 lacs on furniture & fixtures, Rs 67 lacs on vehicles and Rs 14 lacs office equipments. And we capitalized Rs 74 lacs to our gross block of Intangible Fixed Assets, by investing in SAP software and Rs 32 lacs in Information system infrastructure.

Last year, we added Rs 503 lacs to our gross block of Tangible Fixed Assets, including investment in Rs 57 lacs for investment in building, Rs 310 lacs on plant & machinery, Rs 24 lacs on furniture & fixtures, Rs 109 lacs on vehicles and Rs 4 lacs office equipments.

G. Liquidity

We clearly understand that the liquidity in the Balance sheet has to balance between earning adequate returns and the need to cover financial and business risk. Liquidity also enables us to make a rapid shift in direction, should the market so demand. During fiscal 2012, internal cash flows have more than adequately covered working capital requirements, capital expenditure and dividend payments. As at March 31, 2012, we had liquid assets of Rs 4,926 lacs as against Rs 2,888 lacs at the end of previous year - 2010-11.

The funds have been invested in liquid mutual funds.

H. Increase in Share Capital

(a) Right Issue

During the year, company has issued 14,62,880 Equity shares of Rs 10/- each for cash at a price of Rs 30/- each including a premium of Rs 20/- per Equity share aggregating to an amount of Rs 439 lacs on Right Basis in the ratio of 1 Equity share for every 4 Equity shares on 25th October, 2011. These shares are listed & available for trading at the Bombay Stock Exchange Limited (BSE).

(b) Increase in Authorised Share Capital & issue/ allotment of Bonus shares:

Members are aware that Company is planning for business expansions, for which the Company may require funds in future. Further, the Board has also recommended, subject to approval of members in the ensuing Annual General Meeting, the issue and allotment of bonus shares in the ratio of One equity share for every Two shares held in the company at record date to be decided by Board at later date. Therefore, it is required to increase the authorized share capital of the Company so as to accommodate the future increase in paid up share capital. It is proposed to increase share capital of the Company from Rs. 800 lacs divided into 80 lacs each shares of Rs. 10/- each to Rs. 1500 lacs divided into 150 lacs equity shares of Rs. 10/- each. Necessary Resolutions are given in the Notice of the Annual General Meeting given in this Annual Report.

I. Appropriations

Dividend

The Board has recommended a final dividend of 50% or Rs 5/- per share for the financial year ended on 31st March, 2012. The dividend will be paid on total paid up share capital of Rs. 7,31,44,000 divided into 73,14,400 equity shares of Rs. 10/- each.

The total dividend amount pay out is Rs 425 lacs, as against Rs 272 lacs in the previous year. The dividend for the year includes Rs 59 lacs Dividend Distribution Tax, as compared to last year of Rs 38 lacs.

The declaration and payment of dividends on Equity shares is recommended by the Board of Directors and approved by the shareholders of the company. The amount paid as dividend in past is not indicative of company's dividend policy in future.

The register of members and share transfer books will remain closed on 5th July, 2012. Company's Annual General Meeting is scheduled to be held on 26th June, 2012.

Transfer to Reserves

We propose to transfer Rs 156 lacs (10% of the net profit for the year) to the general reserve. An amount of Rs 3,696 lacs are proposed to be retained in the profit and loss account.

J. Corporate Governance

We continue to benchmark our corporate governance polices with the best in Industry.

The company is managed with utmost professionalism, transparency and adherence to the legal framework. The company believes that the corporate governance is all about effective management of relationship among constituents of the system, i.e. shareholders, management, employees, customers, vendors, regulators and the society. The company has strong belief that this relationship can only be built and strengthen through corporate fairness, transparency, and accountability. For fiscal year 2012, the compliance report is provided in the corporate governance report section of the Annual Report. The Auditors' certificate on compliance with the mandatory requirements of Clause 49 of the Listing Agreement is given in the Annexure to the Directors' report.

We have documented our internal policies on corporate governance. In line with the committee's recommendations, the Management's Discussion and Analysis of the financial position of the Company is provided in this Annual Report.

K. Conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under sub-section (1)(e) of section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988, are provided in the Annexure to this Report.

L. Particulars of Employees

There are no employee in the Company drawing remuneration more than Rs. 5 lacs per month or 60 lacs per annum, the limits specified in the Companies (Particulars of Employees) Rules, 1975 as amended by the Companies (Particulars of Employees) (Amendment) Rules, 2011 dated 31st March, 2011 .

M. Directors' responsibility statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956, to the extent applicable to us, and guidelines issued by SEBI on the historical cost convention as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Directors accepts responsibility for the integrity and objectivity of these financial statements. The accounting polices used in the preparation of the financial statements have been consistently applied. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transaction, and reasonably present our state of affairs and profits for the year.

We have taken sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

N. Directors

Mr. Chandra Niraj was appointed as an additional Director effective March 1, 2012. He was also appointed as whole time director for three years, subject to approval of Members at the ensuing Annual General Meeting. In terms of Section 260 of the Companies Act, 1956, he will hold office only up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing his candidature for the office of Director liable to retire by rotation.

Mr. Chandra J. J. and Advocate Mr. H.K. Lalakiya, Directors of the company are liable to retire by rotation at the ensuing Annual General Meeting and being eligible to offer themselves for reappointment.

Mr. Sunilkumar Mittal, has resigned from Board effective from 12th December, 2011 and board appreciates the efforts put in by him in growth of the company.

O. Auditors

M/s Maharishi & Co., Chartered Accountants, auditors of the company retire at the ensuing Annual General meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

P. Green Initiatives

During the previous fiscal, the Company had started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Keeping in view the underlying theme and the circulars issued by MCA, the Company proposes to send documents like Notice convening General Meeting (s), Audited Financial Statements, Directors' Report, Auditors' Report or any other communication in electronic form, to the mail address provided by shareholders and made available to the Company by the Depository Participants. Members are requested to register their email ID with their Depository Participants, in case e-mail address is not already registered.

Members can also register their email address with Company on the following e-mail address: [email protected]

Additional details are available on Company's website www.atulauto.co.in

Q. Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent growth was made possible by their hard work, solidarity, cooperation and support.

We also thank the government and Semi Government agencies of Government of India and state governments and approving agency Automotive Research Association of India (ARAI) for their support, and look forward to their continued support in the future.

For and on behalf of the Board

J. J. CHANDRA Chairman & Managing Director

Signed at Rajkot on May 12, 2012

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Mar 31, 2011

The Board of Directors is delighted to present 23rd Annual Report on Companys Business and Operations for the year ended 31st March, 2011.

Financial Highlights

(Rs. in Lacs)

Particulars 2010-11 2009-10

Net sales & other income 20266 12108

Total Expenditure 18264 10687

Gross profit before exceptional items, interest & depreciation 2006 1420

Interest 171 316 Depreciation 425 387

Impairment Loss - 2

Profit Before Taxation 1406 715

Tax Expenses 464 261

Profit After Tax 942 454

Balance brought forward from previous years 2141 1858

Proposed Dividend (inclusive of dividend tax) 272 137

Transfer to General Reserve 94 34

Balance carried in Profit & Loss Account 2718 2141

Earning Per Share(Rs.) 16.11 7.76

Profits

Your Company has shown a substantial growth in Net income by 67.38% to Rs. 20266 Lacs in the year under review as compared to Rs. 12108 Lacs in Financial year 2009-10. Profit after tax was Rs. 942 Lacs as against Rs. 454 Lacs in the previous year clocking an increase of 107.49%.

Dividend

The Board of Directors are pleased to recommend dividend of 40% (Rs. 4.00 per share) on the paid up share capital of the company, for the financial year ended 31st March, 2011(Last year Rs. 2.00 per share). This is the highest ever payout in history of company. The total dividend payment amounts to Rs. 2,72,03,131/- (including Dividend Distribution Tax of Rs. 37,97,051/-).

Operations

Your company recorded total sales of 19398 vehicles as compared to 12329 vehicles in the previous year registering a growth of 57.33%.

On domestic sales front, your company sold 19141 vehicles registering a growth of 55.97% over previous years volume of 12272 vehicles. In the overseas market, your company sold 257 vehicles as compared to 57 vehicles in the previous year registering a growth of 350.88%.

New Projects

Your company has also launched improvised version for its front engine three wheeler under brand name of ATUL SMART.

Credit Rating

The company has been awarded improved credit rating from ICRA from LBBB-(Pronounced as L triple B minus) to LBBB (pronounced as L triple B) for long term bank facilities and from A3 (pronounced as A three) to A2 (pronounced as A two) for short term bank borrowings

Management Discussion & Analysis Report

A detailed analysis of the Companys performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Corporate Governance

Your Company has adopted good Corporate Governance Practices since its inception. The Com- pany is being managed with utmost professionalism, transparency and adherence to the legal framework. The Company believes that the Corporate Governance is all about effective manage- ment of relationship among constituents of the system, i.e. shareholders, management, employ- ees, customers, vendors, regulators and the society. The Company has strong belief that this relationship can only be built and strengthen through corporate fairness, transparency, and ac- countability.

A detailed report on Corporate Governance is attached to this Report. A separate Report of Board of Directors on Corporate Governance giving details of compliance of various provisions of Clause 49 (Corporate Governance) of the Listing Agreement is attached to this Report. A Certificate from M/s Maharishi & Co., Chartered Accountants, the Statutory Auditors, is also attached to the Report.

Right Issue

The directors are pleased to inform the Members that company has filed draft letter of offer with SEBI, on 07th January, 2011 for issue of total 14,62,880 (Fourteen lacs Sixty two Thousands Eight hundred and Eighty only) Equity shares of face value of Rs. 10/- each at a premium of Rs. 20/- per equity share amounting to Rs. 4,38,86,400/-(Rupees Four Crores Thirty Eight lacs Eighty Six Thou- sands and Four Hundred only)]. The proceeds of the right issues are proposed to be used towards business expansion in few more states of the country & for repayment of term loan.

Conservation of Energy, research and development, technology absorption, foreign ex- change earnings and outgo

The particulars as prescribed under Sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) RULES 2988, are provided in the Annexure to the directors report.

Particulars of Employees

The Company has no employee drawing remuneration exceeding limits as specified in the Compa- nies (Particulars of Employees) Rules, 1975, as amended till date, and hence, particulars as mentioned in Section 217(2A) of the Companies Act, 1956, are not required to be given.

Directors

Shri Sunil K Mittal, Shri Ramnik Kotecha and Shri Vijay Kedia, directors of the company retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment. The Board of Directors of the company has passed resolution for reappointment & fixation of remuneration of Shri Sunilkumar Mittal as Wholetime Director, w.e.f. 1st April, 2011, subject to approval of the members in the ensuing Annual General Meeting. A brief resume of Directors

containing details of nature of their expertise in specific functional areas and names of the companies in which they hold directorship, membership and chairmanship of the board commit- tees, as stipulated in clause 49 of the Listing Agreement with the Stock Exchange in India, are provided in the report of Corporate Governance forming part of the Annual Report.

Directors Responsibility Statement

As required by sub-section (2AA) of section 217 of the Companies Act, 1956, Directors state that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed;

(ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and these have been applied consistently and reasonable and prudent judgments and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The annual accounts have been prepared on a going concern basis.

Secretarial Audit

As directed by the Securities and Exchange Board of India (SEBI), Secretarial Audit is being carried out on quarterly basis, by M/s. MJP Associates, Practising Company Secretaries. The findings of the Secretarial Audit were satisfactory

Auditors

M/s Maharishi & Co., Chartered Accountants, and Statutory Auditors retires as Auditors of the company and have given their consent for reappointment. The members are requested to appoint Maharishi & Co., as auditors for the period from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and to fix their remuneration. The company has received letter from auditors to effect that their appointment, if made, will be within the prescribed limits under section 224(1B) of the Companies Act 1956 and that they are not disqualified for such appointment / reappointment within the meaning of section 226 of the Companies Act 1956, & Rules/Regulations /code of conduct framed by the Institute of Chartered Accountants of India (ICAI).

Acknowledgments

We thank our customers, vendors, investors and bankers for their continuous support during the year. We place on record our appreciation of the contribution made by our employees at all levels. We also put on record our gratitude to IDBI Bank for their support. We thank the Government of India, the State governments and other government agencies for their support, and look forward to their continuous support in the future.

For and on behalf of the Board

(J. J. CHANDRA) Chairman & Managing Director

RAJKOT Date: 30th May, 2011

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Mar 31, 2010

We are delighted to present the report on our business and operations for the year ended March 31, 2010.

1. Results of Operations (Rs. in lacs)

2009-10 2008-09

Sales of Products and Income From Operations 11,984.74 11,748.25

Manufacturing Expenses 10,010.66 10,509.44

Sellings Marketing Expenses 334.54 766.18

General & Administration Expenses 342.04 249.47

Operating Profit before Interest and Depreciation

1,297.50 223.17 (PBIDTA)

Interest and Bank Charges 316.10 279.86

Depreciation and Amortization 389.30 252.84

Operating Profit Before Tax 592.10 -309.53

Other Income 122.92 345.70

Net Profit Before Tax 715.02 36.17

Provision for Taxation 261.15 13.42

Net Profit after Tax and before exceptional Items 453.87 22.75

Exceptional Items 0.00 23.22

Net Profit after exceptional Items 453.87 45.97

2. Business

Our total income increased to Rs.11,984.74 Lacs from Rs.11,748.25 Lacs in the previous year, The profit before depreciation, taxes and amortization (PBIDTA) amounted to Rs. 1,297.50 (10.83% of revenue) as against Rs. 223.17 Lacs (1.90% of revenue) in the previous year. Sales and marketing costs were 2.79% of our revenue for the year ended March 31, 2010 and 6.52% of revenue for the year ended March 31, 2009. General and administration expenses increased from 2.12% in the previous year to 2.85% in the current year. We continue to reap the benefits of economies of scale. The net profit after tax was Rs. 453.87 Lacs (3.79% of revenue) as against Rs.45.97 Lacs (0.39% of revenue) in the previous year.

3. Capital Expenditure

We have incurred a capital expendutire of Rs. 193.74 Lacs for the year ended March 31, 2010 as compared to Rs. 1386.02 Lacs for the previous year ended March 31, 2009.

4. Appropriations

Dividend

We are pleased to recommend dividend of 20% (Rs. 2.00 per share) on the paid up share capital of the company, which is subject to approval of members in the ensuring Annual General Meeting. This is the highest payout on account of dividend in history of company. The total dividend payment amounts to Rs. 1,36,92,557/- (including Dividend Distribution Tax of Rs.19,89,517/-). If approved as stated, the Final Dividend will be paid to the shareholders whose names shall appear on the Companys Register of Members on July 19, 2010. In respect of shares held in dematerialized form, the dividend will be paid on the basis of particulars of beneficial ownership furnished by the Depositories as at the end of business on July 19, 2010

Transfer to Reserves

We propose to transfer Rs.34.04 Lacs (7.5% of the net profit for the year) to the General Reserve and an amount of Rs. 2,141.12 Lacs is proposed to be retained in the Profit & Loss account.

5. Corporate Governance

Your Company has adopted good Corporate Governance Practices since its inception. The Company is being managed in professional manner coupled with transparency and adherence to the legal framework. The Company believes that the Corporate Governance is all about effective management of relationship among constituents of the system, i.e. shareholders, management, employees, customers, vendors, regulatory and the society. The Company has strong belief that this relationship can only be built and strengthen through corporate fairness, transparency, and accountability. A detailed report on Corporate Governance is attached to this Report. The Securities and Exchange Board of India (SEBI) has made efforts to strengthen the Clause 49 of the Listing Agreement. Accordingly, a separate Report on Corporate Governance as well as the Certificate from M/s Maharishi & Co., Chartered Accountants, and the statutory Auditors of the Company are given in the Annual Report.

6. Conservation of Energy, research and development, technology absorption, foreign exchange earnings and outgo

The particulars as prescribed under Sub-section (l)(e) of Section 217 of the Companies

Act, 1956, read with the Companies (Disclosure of particulars in the report of the Board of Directors) RULES 2988, are provided in the Annexure to the directors report section.

7. Particulars of Employees

The Company has no employee drawing remuneration exceeding limits as specified .in the Companies (Particulars of Employees) Rules, 1975, as amended till date, and hence, particulars as mentioned in Section 217(2A) of the Companies Act, 1956, are not required to be given.

8. Directors responsibility Statement as required under Section 217 (2AA) of the Companies Act, 1956

The financial statements are prepared in accordance with the accounting standards issued by the Institute of Chartered Accountants of India and requirements of Companies Act, 1956, to the extent applicable to us and guidelines issued by SEBI on the historical cost convention, as a going concern and on the accrual basis. There are no material departures from prescribed accounting standards in the adoption of the accounting standards.

The Board of Director accepts responsibility for the integrity and objectivity of these financial statements. The accounting policies used in the preparation of the financial statements have been consistently applied except as otherwise stated in the notes accompanying the respective tables. The estimates and judgments related to the financial statements have been made on a prudent and reasonable basis, in order that the financial statements reflect in a true and fair manner the form and substance of transactions, and reasonably present our state of affairs and profits for the year.

We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

9. Directors

Shri M. J. Patel and Shri Rajesh Dhruv, directors of the company retire by rotation at the ensuring Annual General Meeting and being eligible offer himself for reappointment.

The board of director of the company has passed resolution for reappointment of Shri J.J. Chandra as chairman & Managing Director and Shri Sunilkumar Mittal as Whholetime Director, w.e.f. 1st April, 2010, subject to approval of the members in the ensuring Annual General Meeting. Shri J. J. Chandra is one of the founder promoter of the company and is associated with the company since its inception. Mr. Chandra has, through his foresight and visionary approach, coupled with sound understanding of the automobile industry, has led the Company to the path of growth. Mr. M. J. Patel, is has been associated with the Company since long. Mr. Patel is supervising the production facility of the Company and has proven management skill. The Company has benefited a lot from the expertise and vision of Mr. Patel. Mr. Mittal is a B.E. Mechanical. He is engineer by profession and has developed expertise in designing complete vehicle and components wide experience of more than twenty years in automobile industry. He had joined the company from 1st December 2006 as Vice President Technical. Mr. Mittal has been entrusted with research & development of new vehicle of the Company viz. Atul Gem (three-wheeler with rear engine).

A brief resume of Mr. Rajesh Dhruva containing details of nature of their expertise in specific functional areas and names of the companies in which they hold directorship, membership and chairmanship of the board committees, as stipulated in clause 49 of the Listing Agreement with the Stock Exchange in India, are provided in the report of Corporate Governance forming part of the Annual Report.

10. Auditors

M/s Maharishi & Co., Chartered Accountants, and Statutory Auditors of the Company, hold office until the conclusion of the ensuing annual general meeting and are eligible for reappointment.

The company has received letter from auditors to effect that their appointment, if made, will be within the prescribed limits under section 224(1B) of the companies act 1956 and that they are not disqualified for such appointment / reappointment within the meaning of section 226 of the Companies Act 1956.

Acknowledgments

We thank our customers, vendors, investors and bankers for their continued support during the year. We place on record our appreciation of the contribution made by our employees at all levels. We also put on record our gratitude to IDBI for their support. Our consistent growth was made possible by their hard work, solidarity, cooperation and support. We thank the government of India, particularly the Customs and Excise Departments, the Income Tax Department the Ministry of Commerce, the Ministry of Finance, the state governments and other government agencies for their support, and look forward to their continued support in the future.

Date: 28/05/2010 For, ATUL AUTO LIMITED,

Place: Shapar (Veraval)

(J. S. CHANDRA) Chairman & Managing Director