Your Directors have pleasure in presenting the Thirtieth Annual Report on business andoperations of your Company along with the audited financial statements for the financialyear ended March 31 2020.
| || || || ||(Rs in Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from operations (Net) ||85621 ||108100 ||95719 ||118890 |
|Other Income ||251 ||252 ||279 ||316 |
|Total Income ||85872 ||108352 ||95998 ||119206 |
|Earnings before interest tax depreciation and amortization (EBITDA) ||10431 ||14188 ||10869 ||14962 |
|Less: Depreciation and amortization expense ||4095 ||3528 ||4403 ||3809 |
|Earnings before interest and tax (EBIT) ||6336 ||10659 ||6466 ||11153 |
|Less: Finance costs ||3851 ||3376 ||3934 ||3534 |
|Profit/ (loss) before tax (PBT) ||2485 ||7284 ||2532 ||7619 |
|Less: Tax expense ||801 ||2265 ||828 ||2324 |
|Profit/ (loss) after tax (PAT) ||1684 ||5019 ||1704 ||5295 |
|Other comprehensive income/ (loss) Net of Tax ||(4) ||(60) ||(66) ||(10) |
|Total comprehensive income/(loss) Net of Tax ||1680 ||4959 ||1638 ||5285 |
|Earnings per share (In Rs) || || || || |
|Basic ||12.27 ||37.26 ||12.41 ||39.31 |
|Diluted ||12.10 ||36.08 ||12.24 ||38.06 |
On standalone basis the Company achieved a total income of Rs 85872/- Lacs includingother income of Rs 251/- Lacs for the financial year ended March 31 2020 as against Rs108352/- Lacs in the previous year. In spite of several odds the Company earned a profitbefore tax of Rs 2485/- Lacs as against Rs 7284/- Lacs for the earlier year. EBIDTA forthe year under review was Rs 10431/- Lacs.
On a consolidated basis the total income for the year under review was Rs 95998/-Lacs including other income of Rs 279/- Lacs as against Rs 119206 Lacs in the last year.Profit before tax was Rs 2532/- Lacs as against Rs 7619/- Lacs a year ago. EBIDTA forthe year under review was 10869/- Lacs.
The Board of Directors has not proposed to transfer any amount to reserves.
A detailed analysis on the working of the Company and also various challenges faced bythe Company during the year under review and current scenario is given separately underManagement Discussion and Analysis which forms parts of Annual Report.
The Board of Directors in its meeting held on March 12 2020 had declared aninterim dividend of Rs 1.25/- per Equity Share of Rs 5/- each (25%). Considering theuncertain economic situation due to COVID-19 pandemic worldwide and consequent need toconserve the financial resources to meet exigencies of fund your directors havenot recommended any final dividend. Interim dividend which was declared on March 12 2020be considered as final one.
On August 23 2019 135000 equity shares of Rs 5/- each were allotted to the employeesof the Company on their exercising Options granted to them under Employee Stock OptionsScheme. Consequently the issued and paid-up share capital of the Company as on March 312020 stood at Rs 68875605/- divided into 13775121 equity shares of Rs 5/- each.
The Company has not issued any Equity Shares with differential voting rights. Hence noinformation as required under Section 43(a) (ii) of the Companies Act 2013 read with Rule4(4) of the Companies (Share Capital and Debentures) Rules 2014 is furnished. The Companyhas only one class of Equity Shares having face value of Rs 5/- each.
CONSOLIDATED FINANCIAL STATEMENTS AND SUBSIDIARIES:
Consolidated Financial Statements are prepared in accordance with the IndianAccountings Standard (IND AS) based on the financial statements of the subsidiarycompanies. The said consolidated accounts form part of this report and accounts.
Your Company has three foreign subsidiaries viz. Alicon Holding GmbH IllichmannCastalloy S.R.O. and Illichmann Castalloy GmbH. Alicon Holding GmbH is a 100% subsidiaryof your Company who in turn holds 100% capital of Illichmann Castalloy S.R.O. IllichmannCastalloy GmbH is a 100% subsidiary of Illichmann Castalloy S.R.O. Pursuant to theprovisions of Section 136 of the Act the Consolidated Financial Statements along withrelevant documents and separate audited financial statements in respect of Subsidiariesare available on the website of the Company.
A statement containing the performance and financial position of each of thesubsidiaries in Form AOC-1 is annexed as Annexure I and forms part of this report.
Your Company is committed to provide quality products and solutions. This commitment issecured by highly proficient workforce including a team of 200 engineers who constantlywield their expertise to drive products of the highest quality. Based on the principlesand benchmarks set by our Japanese collaborator we continuously improve and streamlinemanufacturing process and systems year-on-year. Unbaiting desire to ensure componentoptimization and the lowest levels of product rejection makes your Company the partner ofchoice for leading names worldwide.
During financial year 2019-20 your Company has received large prestigious orders withglobal OEMs like with leading Global OEMs and Tier 1 Suppliers such as Jaguar Land RoverDaimler Samsung SDI & MAHLE. The orders received are for supply of aluminium chassisheavy truck engine parts e-mobility parts and cooling modules of heavy engine trucks.These long duration contracts demonstrate Alicon's readiness to adapt to emergingtechnologies and remain a preferred supplier to these major global OEMs and Tier 1suppliers. This will result in steady and consistent volumes in the future. These newcontracts exemplify Alicon's technological excellence and innovation capabilities in thealuminium castings space. With a rich legacy of over 50 years Alicon is a proven leaderin the low-pressure die-casting and gravity die-casting technology in the domestic marketand through its European Subsidiary your Company is steadily enhancing its globalpresence with industry leading OEMs.
Though currently all manufacturing units are operating at lower capacity themanagement of your Company will leave no stone unturned to achieve its long term strategyof multiplying current scale of operation once situation turns normal and economicactivities are picked-up.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A detailed report on the Management Discussion & Analysis is presented separatelyin the Annual Report.
MATERIAL CHANGES AND COMMITMENT
No material change and commitment which could affect your Company's financialposition has occurred between the end of the financial year 2019-20 and the date of thisreport.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company during the financial yearended March 31 2020.
INTERNAL FINANCIAL CONTROLS AND ADEQUACY
The Company has a comprehensive internal control system to provide reasonable assuranceabout the achievement of its objective reliability of financial reporting timelyfeedback on achievement of operational and strategic goals compliance with policiesprocedures laws and regulations safeguarding of assets and economical and efficient useof resources. Appropriate review and control mechanisms are built in place to ensure thatsuch control systems are adequate and are operating effectively. The monitoring andreporting of financial transactions is supported by a web-based system SAP which helps inobtaining accurate and complete accounting records and timely preparation of reliablefinancial disclosures at all levels of the organization.
Risk Management Policy: The Company has adopted an Enterprise Risk Managementpolicy and established a risk management framework with an objective of timelyidentification mitigation and control of the risks which may threaten the existence ofthe Company.
Your Company is committed to maintain the highest standard of Corporate Governance andadhere to Corporate Governance guidelines as laid out in the SEBI Listing Regulations.All the Directors and the Senior Management personnel have affirmed in writing theircompliance with and adherence to the Code of Conduct as adopted by the Company.
The annual report of the Company contains a certificate by the Managing Director interms of SEBI Listing Regulations on the compliance declarations received from theDirectors and the Senior Management personnel.
A separate report on Corporate Governance is annexed to this Report as Annexure II.
The Statutory Auditors of the Company have examined the requirements of CorporateGovernance with reference to SEBI Listing Regulations and have certified the complianceas required under SEBI Listing Regulations. The Certificate in this regard is annexed tothis Report.
The Chief Executive Officer and Chief Financial Officer certification as required underthe SEBI Listing Regulations is annexed to this Report.
Your Company has been conducting business from an Environment Social and Governanceperspective that not only delivers long term shareholder value but also benefits thesociety. The Business Responsibility Report as per Regulation 34 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is annexed as Annexure IIIand forms an integral part of this Annual Report.
RELATED PARTY TRANSACTION AND POLICY:
All contracts/arrangements/transactions entered into by the Company with RelatedParties were in ordinary course of business and at arm's length basis. All transactionswith related parties were reviewed and approved by the Audit Committee and are inaccordance with the Policy on Related Party Transactions formulated by the Company.
The details of the Related Party Transactions as per IND AS - 24 are set out in Notesto the Financial Statements of the Company. Since all the transactions with relatedparties entered into by the Company were in ordinary course of business and onarm's-length basis Form AOC-2 is not applicable to the Company.
The Company has formulated a policy on Related Party Transactions which is availableon the Company's website at https://www.alicongroup.co.in/wpontent/uploads/2018/10/Related_Party_Transactions_Policy.pdf.
There was no materially significant related party transaction entered into by theCompany with Promoters Directors or Key Managerial Personnel or their relatives whichmay have a potential conflict in the interest of the Company at large.
WHISTLE BLOWER POLICY AND VIGIL MECHANISM
The management of your Company is committed to conduct its business inaccordance with the highest standard of business ethics openness probity andaccountability and oppose and seriously takes any unethical or unlawful conduct by any ofits stakeholders. To that end any concern related to malpractice or impropriety istreated with utmost seriousness. The Whistle-blower Policy ("Policy") enablesStakeholders associated with your Company to voice their genuine concerns in a responsibleand effective manner. It is a fundamental aspect of every contract of employment that anemployee shall faithfully serve the employer shall not misuse his/her position in theCompany and shall not disclose confidential information about the employer's affairs forpersonal gain.
The Company has adopted a Whistle Blower Policy and has established the necessary vigilmechanism for Directors and employees to report concerns about unethical behavior. Noperson has been denied access to the Chairman of the Audit Committee. The said policy hasbeen uploaded on the website of the Company at https://www.alicongroup.co.in/wp-content/uploads/2018/10/ Whistle_Blower_Policy.pdf .
The Board of Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board in its meeting held on October 15 2019 had appointed Mrs. Veena Mankar(DIN: 00004168) as an Additional Non-Executive Independent Director of the Company. Mrs.Veena Mankar has over four decades of experience in financial services with banksnon-banking financial institutions and as a strategy consultant. Her expertise is in tradeand structured finance including factoring and forfaiting finance for SMEs and financialinclusion. Mrs. Mankar is B.A. in Economics from Lady Shree Ram College Delhi Universityand post-graduate in Business Administration from the Indian Institute of ManagementAhmedabad. Mrs. Veena Mankar would be vacating the office of Director in the forthcomingAnnual General Meeting (AGM) pursuant to the provisions of Section 161 of the CompaniesAct 2013. The Company has received an intimation from a shareholder conveying hisintention of proposing her appointment as an Independent Director in the ensuing AGM.
The Board in its meeting held on March 12 2020 had decided to seek members' consent tothe re-appoint Mr. Ajay Nanavati (DIN: 02370729) as an Independent Director of the Companyfor a further period of five (5) years w.e.f. April 30 2020. Necessary special resolutionis included in the notice convening the AGM.
To comply with the requirement of the Companies Act2013 and Articles of Association ofthe Company Mrs. P. Rai Director (DIN: 00050999) shall retire by rotation at theforthcoming AGM and being eligible has offered herself for re-appointment.
Information and brief profile of Directors seeking appointment/re-appointment areprovided in the separate annexure to the Notice convening 30th AGM. Thisannexure forms part of this Annual Report.
During the year under review none of the non-executive directors had any pecuniaryrelationship or transactions with the Company.
Mr. S. Rai is the Managing Director Mr. Rajeev Sikand is Chief Executive Officer Mr.Vimal Gupta is the Chief Finance Officer and Mrs. Swapnal Patane is the Company Secretaryof the Company.
DECLARATION BY INDEPENDENT DIRECTORS
In compliance with the provisions of Section 149 (6) of The Companies Act 2013requisite declarations have been received from the Independent Directors regarding meetingthe criteria of Independence.
NUMBER OF BOARD MEETINGS AND COMMITTEES OF BOARD
The Board of Directors met six (6) times during the Financial Year under review viz.April 19 2019 July 26 2019 October 15 2019 November 28 2019 January 28 2020 andMarch 12 2020. A separate meeting of Independent Directors was also held on March 122020. The details on attendance of Directors in each Board Meetings and other CommitteeMeetings of Board of Directors are provided in Corporate Governance Report which formspart of the this Report.
AUDIT COMMITTEE & COMPOSITION
The composition of the Audit Committee is in terms of requirements of the CompaniesAct 2013 read with the rules made thereunder and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The details pertaining to the audit committee are included in the Corporate GovernanceReport which forms part of this report.
THE NOMINATION AND REMUNERATION POLICY
The Board has adopted a policy on Nomination Remuneration and Board Diversity whichsets out the criteria for determining qualifications positive attributes and independenceof a Director.
The Company's Policy relating to appointment of Directors payment of managerialremuneration Directors' qualifications positive attributes independence of Directorsand other related matters is annexed to this Report as an Annexure IV.
PERFORMANCE EVALUATION OF BOARD COMMITTEE AND DIRECTORS
In accordance with applicable provisions of the Companies Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the evaluation of the Board asa whole Committees and all the Directors was conducted as per the internally designedevaluation process approved by the Board.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directorsto be best of their knowledge confirm that
a) in the preparation of the accounts the applicable accounting standards have beenfollowed along with proper explanations relating to material departure;
b) appropriate accounting policies have been selected and applied consistently and havemade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
c) proper and sufficient care has been 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;
d) the annual accounts have been prepared on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 forms an integral part of this Report as an Annexure V.
The information required pursuant to section 197 of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of your Company is available for inspectionby the Members at the registered Office of the Company during the business hours onworking days up to the date of ensuing AGM. If any Member is interested in obtaining acopy thereof such Member may write to the Company Secretary whereupon a copy would besent.
EMPLOYEES STOCK OPTION SCHEME (ESOS)
Disclosure as required under Section 62(1)(b) of the Companies Act2013 read with Rule12(9) of the Companies (Share Capital and Debentures) Rules and Regulations 14 of the SEBI(Share Based Employee Benefits) Regulations 2014 is given in Annexure VI to thisreport. The Company has received a certificate from the statutory auditors of the Companystating that Alicon Castalloy Ltd. - Employees Stock Option Scheme 2015 and AliconCastalloy Ltd. Employees Stock Option Scheme 2017 have been implemented inaccordance with the SEBI (Share Based Employee Benefits) Regulations 2014.
RECEIPT OF REMUNERATION BY MANAGING DIRECTOR FROM SUBSIDIARY COMPANIES
Mr. S. Rai Managing Director of the Company has not received any remuneration fromany of its subsidiary companies.
M/s. Kirtane & Pandit LLP Chartered Accountants (ICAI Registration No.105215W/W100057) were appointed as the Statutory Auditors of the company to hold theoffice for a term of five (5) years from the conclusion of the 27th AGMuntil the conclusion of the 32nd AGM of the Company to be held in the year2022.
Pursuant to notification issued by the Ministry of Corporate Affairs on May 7 2018the mandatory requirement of ratifying the appointment of the Statutory Auditors in everyAnnual General Meeting has been repealed.
According to Board of Directors there is no adverse remark made by Statutory Auditorsin their report. Notes to the accounts are self-explanatory to comments/observation madeby the auditors in their report. Hence no separate explanation is given.
Further no fraud was reported by the auditors of the Company under Section 143(12) ofthe Companies Act2013.
SECRETARIAL AUDIT REPORT
Secretarial Audit was carried out by Mr. Upendra C. Shukla Practicing CompanySecretary Mumbai for the financial year 2019-20. The report on the Secretarial Audit isappended as an Annexure VII to this report. According to the Board of Directors thereport does not have any adverse remark.
As per the Board of Directors of the Company maintenance of cost records as specifiedby the Central Government under sub-section (1) of section 148 of the Companies Act 2013is not required by the Company and accordingly such accounts and records are not made andmaintained.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT-9 in pursuance to the provisions of Section92(3) of the Companies Act 2013 is placed in the Website of the Company www.alicongroup.co.in.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
The management of your Company do believes that sustainability is its collectiveresponsibility. This is why your Company is closely engaged in various endeavors to servethe communities. The main focus remains on rural development education and healthincluding sanitation.
Your Company undertakes majority of its activities relating to corporate socialresponsibilities through Bansuri Foundation. It also works closely with other trusts andNGOs.
Brief outline on the Corporate Social Responsibility (CSR) Policy of the Company andthe initiative undertaken by the Company on CSR activities during the year are set out inthe format prescribed in the Companies (Corporate Social Responsibility Policy) Rules2014 and is annexed as an Annexure VIII to this report. The CSR Policy is hosted onthe Company's website www.alicongroup.co.in.
During the year under review the Company has not accepted any Deposit under Section 73of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The particulars of loans guarantees and investments covered under the provisions ofsection 186 of Companies Act 2013 are given in the Notes to financial statements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosure of information regarding Conservation of Energy Research & DevelopmentTechnology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m)of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 is annexedseparately as an Annexure IX.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There was no significant and material orders passed by the Regulators / Courts /Tribunals which would impact the going concern status of the Company and its futureoperations.
SEXUAL HARASSMENT OFWOMENATWORKPLACE
In compliance with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 your Company has duly constituted aninternal complaint committee. The Committee has formulated policy to ensure protection toits female employees.
Industrial relations across all the manufacturing locations of your Company werecordial and very positive through the year under review.
In order to develop skills and foster togetherness at the work place your Companyrolled out multiple training and engagement programs covering a wide range of topics suchas stress managements attitude creativity team spirit quality skill building safetyand environment customer focus etc.
Your Directors wish to thank Enkei Corporation Japan our technical collaborator fortheir valued support and guidance for development of new parts. Your Directors also takethis opportunity to thank all the customers vendors bankers and other businessassociates for their continued support. Your Directors also thank all the employees fortheir commitment hard work and contribution to the Company's excellent performance. YourDirectors are thankful to all the Shareholders of the Company for their unstinted supportand confidence reposed in the Management of the Company.
| ||On behalf of the Board of Directors |
|S. Rai ||A.D. Harolikar |
|Managing Director ||Director |
|Place: Pune || |
|Date: June 26 2020 || |