The Board of Directors (Board) presents the Annual Report of Amal Ltd together with theaudited financial statement for the year ended March 31 2017.
01. Financial results
| || ||(Rs. 000) |
| ||2016-17 ||2015-16 |
|Revenue from operations ||286729 ||258257 |
|Other income ||768 ||644 |
|Total revenue ||287497 ||258901 |
|Profit / (Loss) from operations before tax and exceptional items ||88866 ||13480 |
|Exceptional items: income / (expense) ||- ||- |
|Profit / (Loss) for the year after exceptional items ||88866 ||13480 |
|Other Comprehensive income (net of tax) ||164 ||161 |
|Profit / (Loss) after tax ||89030 ||13641 |
|Balance brought forward ||(446785) ||(460426) |
|Balance carried forward ||(357755) ||(446785) |
02. Financial performance
During 2016-17 sales increased by 11% from Rs. 2583 lakhs to Rs. 2867 lakhs. TheCompany reported a profit of Rs. 890 lakhs in 2016-17 against a profit of Rs. 136 lakhs in2015-16.
The Board regrets its inability to recommend dividend due to carried forward losses.
04. BIFR status
Revised Draft Rehabilitation Scheme (DRS) submitted by the Company through IDBI BankLtd (Operating Agency) to the Board for Industrial And Financial Reconstruction (BIFR) wassanctioned by it as Modified Sanctioned Scheme (MS-13) on July 01 2013. The Company hasinitiated actions as per MS-13.
The Board approved the proposed merger of the Company with Atul Ltd. A share swap ratioof 1 Equity share of face value of Rs. 10 each fully paid up of Atul Ltd for every 50Equity shares of the face value of Rs. 10 each fully paid up of Amal Ltd has been approvedat its meeting held on December 05 2014 subject to BIFR and other statutory approvals.The appointed date of the proposed Scheme was April 01 2014.
The Company has submitted the Modified Draft Rehabilitation Scheme (MDRS) Covering theproposed merger to the BIFR through the Operating Agency on March 31 2016 for obtainingtheir approval. The Central Government vide notification dated November 26 2016 notifiedthe Sick Industrial Companies (Special Provisions) Repeal Act 2003 effective December 012016. As a result the BIFR and the Appellate Authority for Industrial and FinancialReconstruction (AAIFR) were abolished and the Sick Industrial Companies (SpecialProvisions) Act 1985 got repealed. Pursuant to the aforesaid all proceedings or appealsof whatever nature pending before the BIFR / AAIFR got abated. Consequently draft mergerScheme pending for approval of the BIFR got abated. In this regard the Board of Directorsin the meeting held on March 24 2017 decided not to proceed with the Merger Scheme.However any scheme of revival which has been sanctioned by the BIFR in the past andunder implementation will continue to be in force. Accordingly the modified sanctionedscheme (MS-13) approved by BIFR in the past and under implementation will continue to bein force.
05. Conservation of energy technology absorption foreign exchange earnings and outgo
This is given at page number 07.
The Company has taken adequate insurance to cover the risks to its employees propertyplant and equipment buildings and other assets and third parties.
07. Risk Management
The Management at various levels takes accountability for risk identificationappropriateness of risk analysis and timeliness as well as adequacy of risk mitigationdecisions at both individual and aggregate levels. It is also responsible for theimplementation tracking and reporting of defined mitigation plans including periodicreporting to the Audit Committee and the Board.
08. Internal Financial Controls
The Internal Financial Controls over financial reporting are designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof the Financial Statements.
These include those policies and procedures that i) pertain to the maintenance ofrecords which in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company ii) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of the Financial Statementsin accordance with Generally Accepted Accounting Principles and that receipts andexpenditures are being made only in accordance with authorisations of the Management andthe Directors of the Company and iii) provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the assets that canhave a material effect on the Financial Statements.
The Management assessed the effectiveness of the Internal Financial Controls overfinancial reporting as of March 31 2017 and the Board believes that the controls areadequate.
09. Fixed deposits
During 2016-17 the Company did not accept any fixed deposits.
10. Related Party Transactions
Particulars of contracts or arrangements with related parties are given in the Notes toAccounts at page number 80.
11. Extract of Annual Return
This is given on page number 07.
Haribhakti & Co. LLP Statutory Auditors carried out Audit for the year 2016-17.The relevant notes forming part of the accounts are self-explanatory and give fullinformation and explanation in respect of the observations made by the Auditors in theirreport.
Haribhakiti & Co. LLP Statutory Auditors of the Company has desired not tocontinue as Statutory Auditors from the year 2017-18 onwards in view of theirpreoccupations.
The Company received a special notice under Section 140(4)(i) of the Companies Act2013 from the Members proposing the appointment of Deloitte Haskins & Sells LLP(Deloitte) as the Statutory Auditors. Based on the recommendation of the Audit Committeethe Board at its meeting held on April 21 2017 recommended the appointment of Deloitteto act as a Statutory Auditors in place of Haribhakti & Co. LLP.
Deloitte gave their written consent showing their willingness to act as StatutoryAuditors of the Company.
The Board appointed Nilesh A Pradhan & Co Practising Company Secretary as theSecretarial Auditor for 2016-17 on April 22 2016 and his report is given at page number15.
13. Directors' responsibility statement
Pursuant to Section 134 (5) of the Companies Act 2013 the Directors confirm that tothe best of their knowledge and belief:
13.1 The applicable Accounting Standards were followed along with proper explanationsrelating to material departures in the preparation of the annual accounts.
13.2 The Accounting Policies were selected and applied consistently and judgments andestimates were made that were reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year and of the profit andloss of the Company for that period.
13.3 Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities.
13.4 The attached annual accounts for the year ended March 31 2017 were prepared on agoing concern basis as the Company has restarted its manufacturing operations atAnkleshwar and intends to expand and diversify its operations as per the revival scheme(MS-13) sanctioned by BIFR.
13.5 Adequate Internal Financial Controls to be followed by the Company were laid downand the same were adequate and operating effectively.
13.6 Proper systems were devised to ensure compliance with the provisions of allapplicable laws and the same were adequate and operating effectively.
14.1 Appointments / Reappointments / Cessations 14.1.1 Mr R Kumar was appointed as theManaging Director effective March 24 2017.
14.1.2 Mr T R Gopi Kannan retires by rotation and being eligible offers himself forreappointment at the forthcoming AGM scheduled on June 30 2017
14.1.3 Mr P N Ogale resigned as the Managing Director effective December 14 2016. TheBoard placed on record appreciation of his services.
14.2 Policies on appointment and remuneration
While recommending appointment of the Directors the Nomination and RemunerationCommittee considers the following factors:
i) Qualification: well-educated and experienced in senior leadership positions inindustry / profession
ii) Traits: positive attributes and qualities
iii) Independence: criteria prescribed in Section 149 (6) of the Companies Act 2013for the Independent Directors including no pecuniary interest and conflict of interest
14.2.2 Remuneration of the Non-executive Directors: Sitting fees of Rs. 20000 forattending meeting of the Board and Rs. 10000 for attending any meeting of the Committeethereof.
14.3 Criteria and method of annual evaluation
14.3.1 The criteria for evaluation of performance of a) the Non-independent Directors(Executive) b) the Non- Independent Directors (Non-executive) c) the Independent Directorsd) the Chairman e) the Committees of the Board f) the Board as a whole are summarised inthe table at the end of the Directors' Report at page number 05.
14.3.2 The Independent Directors have carried out annual:
i) Review of performance of the Non-independent Directors - Executive
ii) Review of performance of the Non-independent Directors - Non-executive
iii) Review of performance of the Chairman
iv) Assessment of quality quantity and timeliness of the flow of information to theBoard
v) Review of performance of the Board as a whole
14.3.3 The Board has carried out annual evaluation of performance of:
i) Its Committees namely Audit Nomination and Remuneration Stakeholders Relationship
ii) The Independent Directors
The templates for the above purpose were circulated in advance for feedback of theDirectors. In addition the Chairman also held discussions with the Directorsindividually.
15. Key Managerial Personnel and other employees
15.1 Appointments and cessations of the Key Managerial Personnel
15.1.1 Mr P N Ogale ceased to be the Managing Director effective December 14 2016.
15.1.2 Mr R Kumar was appointed as the Managing Director effective March 24 2017.
The Remuneration Policy of the Key Managerial Personnel and other employees is asunder:
i) Fixed pay
a) Basic salary
ii) Variable pay
15.2.2 Factors for determining and changing fixed pay
i) Existing compensation
iv) Salary bands
vi) Market benchmark
15.2.3 Factors for determining and changing variable pay
i) Company performance
ii) Individual performance
16. Analysis of remuneration
A table containing information in accordance with the provisions of Sections 134 (3)(q)and 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration ofManagerial Personnel Rules 2014 is given at page number 22.
The Company is not required to disclose the information required pursuant to Sections13 (3) (q) and 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time totime as there were no employees during 2016-17 drawing remuneration exceeding the limitspecified there under.
17. Management Discussion and Analysis
Management Discussion and Analysis Report covering performance is given at page number23.
18. Corporate Governance
18.1 Statement of declaration given by the Independent Directors:
The Independent Directors have given declarations under Section 149 (6) of theCompanies Act 2013.
The Corporate Governance Report is given at page number 24. Details about the number ofmeetings of the Board held during 2016-17 are given at page number 27. The composition ofthe Audit Committee is given at page number 31. All the recommendations given by the AuditCommittee were accepted by the Board.
18.3 Whistle-blowing policy
The Board on the recommendation of the Audit Committee had approved a vigil mechanism(Whistle-blowing Policy). The policy provides an independent mechanism for reporting andresolving complaints pertaining to unethical behavior actual or suspected fraud andviolation of the Code of Conduct of the Company and is displayed on the website (of theCompany) at http://www.amal. co.in/pdf/whistle_blowing_policy.pdf
No personnel has been denied access to the Audit Committee
The Board expresses its sincere thanks to all the customers employees investorslenders suppliers regulatory and Government authorities and the Stock Exchange for theirsupport.
| ||For and on behalf of the Board of Directors |
|Mumbai ||S S Lalbhai |
|April 21 2017 ||Chairman |