The Board of Directors (Board) presents the Annual Report of Amal Ltd together with theaudited Financial Statements for the year ended March 31 2020.
01. Financial results
(Rs. in lakhs)
| ||2019-20 ||2018-19 |
|Sales and other income ||3434 ||3344 |
|Profit before tax ||1270 ||998 |
|Provision for tax ||350 ||223 |
|Profit for the year ||920 ||775 |
|Other comprehensive income (net of tax) ||0 ||(1) |
|Profit after tax ||920 ||774 |
|Balance brought forward ||(1832) ||(2607) |
|Balance carried forward ||(912) ||(1832) |
During 2019-20 sales and other income increased by 3% from Rs. 3344 lakhs to Rs.3434 lakhs. Reduction in selling prices by 25% was compensated by higher sales volume of28%. The Company reported a profit tax of Rs. 1270 lakhs in 2019-20 against a profitbefore tax of Rs. 998 lakhs in 2018-19.
Under the extant laws the Company cannot declare a dividend in view of its carriedforward losses.
04. Conservation of energy technology absorption foreign exchange earnings and outgo
Information required under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 as amended from time totime forms a partto of this Report which is given at page number 10.
The Company has taken adequate insurance to cover the risks to its employees property(land and buildings) plant equipment other assets and third parties.
06. Risk management
Risk management is an integral part of business practices of the Company. The frameworkof risk management concentrates on formalising a system to deal with the most relevantrisks building on existing management practices knowledge and structures. With the helpof a reputed international consultancy firm before Company has developed and implementeda comprehensive risk management system to ensure that risks to the continued existence ofthe Company as a going concern and to its growth are identifiedand remedied on a timelybasis. While defining and developing the formalised risk management system leadingstandards and practices have been considered. The risk management system is relevant tobusiness reality pragmatic and simple and involves the following:
i) Risk identification and definition -
Focuses on identifying relevant risks creating updating clear definitions ensureundisputed understanding along with details of the underlying root causes contributingfactors.
ii) Risk classification -Focuses on understanding the various impacts of risks and thelevel of influence on its root causes. This involves identifying various processesgenerating the root causes and a clear understanding of risk interrelationships.
iii) Risk assessment and prioritisation
- Focuses on determining risk priority and risk ownership for critical risks. Thisinvolves assessment of the various impacts taking into consideration risk appetite andexisting mitigation controls.
iv) Risk mitigation - Focuses on addressing critical risks to restrict their impact(s)to an acceptable level (within the risk appetite). This involves a clear definition ofactions responsibilities and milestones.
v) Risk reporting and monitoring - Focuses on providing to the Audit Committee and theBoard periodic information on risk profile evolution and mitigation plans.
Roles and responsibilities
The Board has approved the Risk Management Policy of the Company. The Company has laiddown procedures to inform the Board on i) to iv) above. The Audit Committee periodicallyreviews the risk management system and gives its recommendations if any to the Board.The Board reviews and guides the Risk Policy.
Implementation of the Risk Management Policy is the responsibility of the Management.
It ensures functioning of the risk management system as per the guidance of the AuditCommittee. The Company has Risk Management Oversight Structure and has a Chief Risk andCompliance Officer.
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 mitigation plans including periodic reportingto the Audit Committee and the Board.
07. 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. Defined These include those policies and procedures that:
i) pertain to the maintenance of records which in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company
ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the Financial Statements in accordance with Generally Accepted Accounting
Principles and that receipts and expenditures are being made only in accordance withauthorisations of the Management and the Directors of the Company
iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or . disposition of the assets that can have a materialeffect on the Financial Statements. A reputed international consultancy firm has reviewedthe adequacy of the internal financial controls with respect to the Financial Statements.
The Management assessed the effectiveness of the internal financial controls overfinancial reporting as of March 31 2020 and the Board believes that the controls areadequate.
08. Fixed deposits
During 2019-20 the Company did not accept any fixed deposits.
09. Related party transactions
All the transactions entered into with the related parties were in ordinary course ofbusiness and on arm's length basis. Details of such transactions are given at page number89. No transactions were entered into by the Company which required disclosure in FormAOC-2.
10. Corporate Social Responsibility
Composition of the Corporate Social Responsibility (CSR) Committee the CSR Policy andthe CSR Report are given at page number 10.
11. Extract of the Annual Return
This is given at page number 12.
Deloitte Haskins & Sells LLP Chartered Accountants were appointed as the StatutoryAuditors of the Company at the 43rd Annual General Meeting (AGM) held on June30 2017 until the conclusion of the 48th AGM.
The relevant Notes forming part of the Financial Statements are self-explanatory andgive full information and explanation in respect of the observations made by the Auditorsin their report.
Nirali Solanki & Co. was appointed as the Secretarial Auditor by the Board ofDirectors in its meeting held on October 17 2019 and its report is given at page number20.
13. Directors' responsibility statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm best oftheir 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 judgements 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 themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
13.4 The attached annual accounts for the year ended March 31 2020 were prepared on agoing concern basis.
13.5 Adequate internal financial controls to be followed by the Company were laid downand they were adequate and operating effectively. 13.6 Proper systems were devised toensure compliance with the provisions of all applicable laws and the same were adequateand operating effectively.
14.1 Appointments Reappointments Cessations
14.1.1 According to the Articles of Association of the Company Mr S S Lalbhai retiresby rotation and being eligible offers himself for reappointment at the forthcoming AGMscheduled on August 14 2020.
14.2 Policies on appointment and remuneration
14.2.1 Appointment While recommending appointment of the Directors the Nomination andRemuneration Committee considers the following factors:
i) Qualification : well-educated and experienced in senior leadership positionsin industry profession
ii) Traits: positive attributes and qualities
iii) Independence: criteria prescribed in Section 149(6) of the Companies Act2013 for the Independent Directors including no pecuniary interest and conflict ofinterest 14.2.2 Remuneration of the Non-executive Directors Sitting fees: Rs. 20000 forattending a Board meeting and Audit Committee meeting and Rs. 10000 for attending anyother Committee meeting
14.3 Criteria and method of annual evaluation
14.3.1 The criteria for evaluation of performance of
- the Non-independent Directors (Executive)
- the Non-independent Directors (Non-executive)
- the Independent Directors
- the Chairman
- the Committees of the Board and
f) the Board as a whole are summarised in the table at the end of the Directors' Reportat page number 8. 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 and
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 Corporate Social Responsibility Nomination andRemuneration Stakeholders Relationship.
ii) the Independent Directors.
14.3.4 The templates for the above purpose were circulated in advance for feedback ofthe Directors. 14.3.5 Familiarisation programs for the Independent Directors.
The Company has Familiarisation programs for its Independent Directors. It comprisesamongst others presentations by and discussions with the Senior Management on the natureof the industries in which it operates its vision and strategy its organisationstructure and relevant regulatory changes.
14.3.6 In the opinion of the Board the Independent Directors reappointed during theyear possess integrity rich experience and expertise relevant to the Company. Furthertheir reappointments are on the basis of the reports of their performance evaluationexpertise and meeting eligibility criteria for Independent Directors under the Act.
15. Key Managerial Personnel and other employees
15.1 Appointments and cessations of the Key Managerial Personnel
There were no appointments cessations of the Key Managerial Personnel during 2019-20.
The Remuneration Policy of the Key Managerial Personnel and other employees consiststhe following: 15.2.1 Components:
a. Basic salary
c. Perquisites d. Retirals
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:
- Business performance
ii) Individual performance
16. Analysis of remuneration
The information required pursuant to Sections 134(3)(q) and 197(12) of theCompanies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given at page number 25.
The Company is not required to disclose the information required as there were noemployees during 2019-20 drawing remuneration exceeding the limit specified.
17. Management Discussion and Analysis
The Management Discussion and Analysis Report covering performance is given at pagenumber 26.
18. Corporate Governance Report
18.1 Statement of declaration given by the Independent Directors.
The Independent Directors have given declarations under Section 149(6) of the CompaniesAct 2013.
The Corporate Governance Report is given at page number 27. Details about the number ofmeetings of the Board held during 2019-20 are given at page number 32. The composition ofthe Audit Committee is given at page number 35. 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 behaviour actual or suspected fraud andviolation of the Code of Conduct of the Company and is displayed on the website (of theCompany) at www. amal.co.in/investors/policies No personnel has been denied access to theAudit Committee.
18.4 Secretarial standards
Secretarial standards as applicable to the Company were followed and complied withduring 2019-20.
The COVID-19 pandemic is a worldwide crisis and has meant that the economies will haveto operate alongside the disease now as the attention has started shifting from lockdownto safe reopening.
The Company strictly followed the guidelines issued by the local state and centralgovernments and beyond to protect the health and well-being of its workforce and ensuredminimum disruption to its customers.
The Company closed its manufacturing facilities for a month and is taking all possiblesteps required to adjust to the new normal of working and growing.
Atul Foundation took up initiatives to serve the society particularly in Valsad andBharuch districts. The Foundation also contributed in its own small way to Gujarat ChiefMinister Relief Fund and PM CARES Fund.
The Board expresses its sincere thanks to all the employees customers supplierslenders regulatory and government authorities Stock Exchange and investors for theirsupport.
|Evaluation of ||Evaluation by ||Criteria |
|Non-independent Director (Executive) ||Independent Directors ||Qualification Experience Availability and attendance Integrity Commitment Governance Transparency Communication Business leadership People leadership Investor relations |
|Non-independent Director (Non-executive) ||Independent Directors ||Qualification Experience Availability and attendance Integrity Commitment Governance Independence Communication Preparedness Participation and Value addition |
|Independent Director ||All other Board Members ||Qualification Experience Availability and attendance Integrity Commitment Governance Independence Communication Preparedness Participation and Value addition |
|Chairman ||Independent Directors ||Qualification Experience Availability and attendance Integrity Commitment Governance Impartiality Communication Business leadership People leadership and Meeting conduct |
|Committees ||Board Members ||Composition Process and Dynamics |
|Board as a whole ||Independent Directors ||Composition Process and Dynamics |
Annexure to the Director's Report
1. Conservation of energy technology absorption and foreign exchange earningsand outgo
Information required under Section 134(3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 as amended from time to time forms a part ofthis Report. However as per the provisions of Section 136 of the Companies Act 2013 theReport and Accounts are being sent to all the Members excluding the information relatingto conservation of energy technology absorption foreign exchange earnings and outgo.
2. Subsidiary associate and joint venture companies
The Company does not have any subsidiary associate and joint venture company.
3. Corporate Social Responsibility
3.1 Policy programs and scope
Amal will help enhance the quality of life of the people belonging to the marginalisedsections of the society and volunteer its resources to the extent it can reasonably affordto Atul Foundation Trust (AFT) and (or) other entities under its umbrella. The Foundationwill particularly undertake projects in and around the locations where the Companyoperates.
3.1.2 Programs and scope
AFT will take up projects and or carry out activities under three broad programs:
- Education and Empowerment
ii) Health and Relief and
iii) Infrastructure and Conservation with varied scope of work.
i) Education and Empowerment
a) Establish and or support schools
b) Establish and or support colleges
c) Encourage sports
d) Establish and or support vocational institutes
e) Promote integrated development of tribal areas
ii) Health and Relief
a) Enhance rural hygiene and sanitation
b) Establish mobile medical care facilities
c) Establish medical care centres
d) Organise medical camps
e) Assist during natural calamities
iii) Infrastructure and Conservation
a) Protect environment
b) Develop and or maintain rural utilities
c) Develop and or maintain rural amenities
d) Restore sites of historical importance
e) Promote use of renewable resources
Please refer to the following URL for details of policy programs and projects:www.amal.co.in/investors/policies
A R Jadeja (Chairman)
T R Gopi Kannan R Kumar
3.3 Expenditure: determination and actual spent
(Rs. in lakhs)
|Particulars ||Amount |
|Average net profit of the Company for the last three financial years ||1204.00 |
|Prescribed CSR expenditure at 2% of above ||24.08 |
|Total amount spent for the financial year ||24.08 |
|Amount unspent by the Company ||nil |
3.4 Manner in which spent
|No. ||Program ||Project Activity ||Location Village ||Budget ||Spent ||Cumulative ||Implementing agency |
| || || || ||Rs. lakhs ||Rs. lakhs ||Rs. lakhs || |
|1. ||Health ||Improvement of hygiene through construction of toilets ||Five villages in Valsad* ||24.08 ||24.08 ||48.86 ||AFT ARDF |
|Total direct expenditure || ||24.08 ||24.08 ||48.86 || || || |
|Administrative overheads (OH) || ||- ||- ||- || || || |
|Total (direct expenditure + OH) || ||24.08 ||24.08 ||48.86 || || || |
AFT: Atul Foundation Trust
ARDF: Atul Rural Development Fund Trust
*Five villages covered for improvement of hygiene through construction of toilets:Faldhara Kanjan Ranchod Kotlav and Panchalai
3.5 Implementing agencies
3.5.1 Atul Foundation Trust (AFT) (Atul Gujarat):
Established in 2011 AFT is the embodiment of the purpose towards serving the society.It is the apex trust through which all CSR initiatives of the Company are undertaken.
3.5.2 Atul Rural Development Fund (ARDF) (Atul Gujarat):
Established in 1978 ARDF implements projects for upliftment of the marginalisedsections of the communities.
3.6 Confirmation of compliance
The CSR Committee confirms that the implementation and monitoring of the CSR Policy isin compliance with its objectives and policy of the Company.
|Managing Director ||Chairman CSR Committee |
|R Kumar ||A R Jadeja |