India Motor Parts & Accessories Ltd

Your Directors are pleased to present the 70th Annual Report together with Audited Accounts for the year ended 31st March, 2024. The summarised financial results of the Company are presented hereunder:

(Rs in Crores)

Management Discussion and Analysis Report

Your company's turnover grew to Rs. 721.78 Crores in the financial year 2023-24 from Rs. 705.05 Crores over the previous financial year. During the year under review, there were downward revisions in prices of Spare Parts due to softening of commodity prices and increased competition from car and truck OEMs. The PBT for the year under review was at Rs. 89.16 Crores as against Rs. 91.78 Crores for the previous financial year ending March, 2023. Our Other Income went up to Rs. 34.96 Crores.

During the year under review, your Company opened four new branches and added a new product line, which would contribute to sales growth in the coming years.

Outlook:

Current expectations are that there will be a pick-up in rural spend, in the second half of the financial year 2024-25.

Anticipated increase in spending on road infrastructure is expected to increase spare parts business of heavy vehicles.

Dividend:

Your Directors in January, 2024 declared an interim dividend of Rs.9.00 per equity share. Your Directors are pleased to recommend a final dividend of Rs.18.00 per equity share, which, together with the interim dividend, aggregates to a total dividend of Rs.27.00 per share. Our Company's paid-up share capital is Rs.12.48 Crores.

The Dividend Distribution Policy is hosted on our website - www.impal.net/investor.htm

Subsidiary Company:

CAPL Motor Parts Private Limited (CAPL) had a sales of Rs.16.96 Crores and a profit after tax of Rs.1.41 Crores for the financial year 2023-24.

During the year under review, CAPL has submitted to the National Company Law Tribunal (NCLT) an application for amalgamation of CAPL with India Motor Parts & Accessories Limited and subject to regulatory clearances, we expect a favourable order from the NCLT.

Internal Control Systems:

The Company's Internal Control Systems are adequate and commensurate with its size. Appropriate policies and procedures are in place to fulfill the compliance / operational requirements.

The Internal Audit Department regularly evaluates the internal control policies and compliances. The Senior Management and Audit Committee periodically review the internal audit findings as well as the effectiveness of the internal control measures.

IT systems

The Company's home-grown ERP solution has been in operation for more than 20 years and is time- tested. The system has been regularly updated to meet the technological changes and compliance requirements. The Company has an inhouse IT Department and is also supported by an external service provider. This helps the Company to continuously carry out its operations without any interruption.

Consolidated Financial Statements

A statement containing salient features of the Financial Statements of CAPL Motor Parts Private Limited, a Wholly Owned Subsidiary, in Form AOC-1 is provided in Annexure "A", forming part of this Report.

The Financial Statements of the Subsidiary CAPL Motor Parts Private Limited are hosted in our website - www.impal.net/audit.htm

Board & Committee

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

Risk Management

The Risk Management Committee had 2 meetings during the year under review. The Committee reviewed the anticipated risks and the mitigation measures.

Directors

During the year under review, the Board had appointed Sri Srinivasan Ravindran (DIN 00045076) and Sri Srinivas Acharya (DIN 00017412) as Independent Directors for a term of 5 (five) years with effect from 30th October, 2023. Ms. Sriya Chari (DIN 07383240) was also reappointed as an Independent Director at the Board Meeting held on 30th October, 2023. This appointment is for a further term of 5 years with effect from 07th February, 2024. These appointments were approved by the Shareholders through a Postal Ballot on 07th December, 2023.

Sri Srivats ram (DIN 00063415), Director, is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

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

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

Annual Board Evaluation

The Board has made a formal evaluation of its own performance and that of its Committees and individual Directors, as required under Section 134(3)(p) of the Companies Act, 2013.

A Separate Meeting of Independent Directors was held during the year, in which the Independent Directors evaluated the performance of the Non-Independent Directors, the Board as a whole and the Chairman. The criteria for evaluation and the remuneration Policy of the Company are attached vide Annexures "B" & "C".

Related Party Transactions

All related Party Transactions that were entered into, during the financial year, were in the ordinary course of business and at arm's length. The Material related Party Transaction(s) entered during the year in terms of regulation 23 of SEBI (Listing Obligations & Disclosure requirements) regulations, 2015, were approved by the shareholders at the 69th Annual General Meeting held on 31st July, 2023. Since, these transactions are in the ordinary course of business and at arm's length, disclosure in form AOC-2 is not required.

There are no material related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons that may have a potential conflict with the interest of the Company at large.

The Policy on Related Party Transactions as approved by the Board is available on the Company's Website at www.impal.net

Corporate Social Responsibility

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has contributed to various projects in the areas of Health, Education, Sanitation, Social Welfare, Arts & Culture and Sports. Annual Report on CSR activities, containing necessary details is provided in Annexure "D".

Business Responsibility Report

Business Responsibility Report is attached vide Annexure "E".

Secretarial Audit

The Secretarial Auditor Report is attached vide Annexure "F".

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

The Company has set up an Internal Complaints Committee (ICC) to redress complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received during the year 2023-24.

Corporate Governance

A detailed report on corporate governance, is attached forming part of this report.

Comments on Auditors' report

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditor in their Reports respectively.

Annual Return

Annual Return in Form MGT-7 is posted on the website of the Company at www.impal.net/audit.htm Particulars of Employees

The details under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Rules") is provided below:

(i)&(ii) The ratio of average remuneration of Non-Whole Time Directors with that of the median remuneration of the employees for the financial year is 0.50 times and that of the Deputy Managing Director (inclusive of commission) is 69 times and Managing Director (inclusive of Commission) is 97 times.

(iii) The number of permanent employees on the rolls of the Company as on 31st March 2024 is 872

(iv) Percentage increases in median remuneration of staff for the financial year, are 7.5% for staff and 4.1% for Key Managerial Personnel.

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

The information as per rule 5(2) and rule 5(3) of the rules, forms part of this report. The report and financial statements are being sent to the members of the Company, excluding the statement of particulars of employees under rule 5(2) and rule 5(3) of the rules. The said statement is available for inspection by the members, at the registered office of the Company, during office hours till the date of Annual General Meeting.

Statutory Statements

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

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

The company tries to regulate the usage of Air Conditioners and other energy consumption devices in a very optimal manner. Lights and fans are not used except when essential. Your Company has no activity relating to technology absorption. The Company did not have any foreign exchange earnings or outgo. your Company has not accepted any public deposits during the year under review.

The Company has not given any loans or guarantees.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the year under review.

The Company has complied with applicable secretarial standards during the year under review. Directors' Responsibility Statement

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

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

ii) The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year ended 31st March, 2024.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

Acknowledgement

Your Directors wish to thank our Customers and Suppliers for their continued support. Your Directors also wish to thank ICICI Bank for its continued support. your Directors would like to place on record the appreciation, of the efforts of the employees, staff and executives during the year under review.