The Board of Directors (Board) presents the annual report of Amal Ltdtogether with the audited Financial Statements for the year ended March 31 2022.
01. Financial results
| ||2021-22 ||2020-21 |
|Sales and other income ||4530 ||3166 |
|Profit before tax ||332 ||1086 |
|Provision for tax ||90 ||202 |
|Profit for the year ||242 ||885 |
|Other comprehensive income (net of tax) ||(1) ||(1) |
|Profit after tax ||241 ||884 |
|Balance brought forward ||(29) ||(913) |
|Balance carried forward ||212 ||(29) |
During 2021-22 sales and other income increased by 43% (increase inselling price by 30% and sales volume of 13%) from ' 3166 lakhs to ' 4530 lakhs. TheCompany reported a profit before tax of ' 332 lakhs in 2021-22 against a profit before taxof ' 1086 lakhs in 2020-21 due to high input cost.
The Directors have not declared a dividend to partially meet therequirement of fund for the on-going project in Amal Speciality Chemicals Ltd awholly-owned subsidiary company.
04. Conservation of energy technology absorption foreign exchangeearnings and outgo
Information required under Section 134(3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 as amended from time totime forms a part of this report which is given at page number 12.
The Company has taken adequate insurance to cover the risks to itsemployees property (land and buildings) plant equipment other assets and thirdparties.
06. Risk management
Risk management is an integral part of business practices of theCompany. The framework of risk management concentrates on formalising a system to dealwith the most relevant risks building on existing management practices knowledge andstructures. With the help of a reputed international consultancy firm the Company hasdeveloped and implemented a comprehensive risk management system to ensure that risks tothe continued existence of the Company as a going concern and to its growth are identifiedand remedied on a timely basis. While defining and developing the formalised riskmanagement system leading standards and practices have been considered. The riskmanagement system is relevant to business reality pragmatic and simple and involves thefollowing:
i) Risk identification and definition - Focuses on identifying relevantrisks creating updating clear definitions to ensure undisputed understanding along withdetails of the underlying root causes contributing factors.
ii) Risk classification - Focuses on understanding the various impactsof risks and the level of influence on its root causes. This involves identifying variousprocesses generating the root causes and a clear understanding of riskinter-relationships.
iii) Risk assessment and prioritisation - Focuses on determining riskpriority and risk ownership for critical risks. This involves assessment of the variousimpacts taking into consideration risk appetite and the existing mitigation controls.
iv) Risk mitigation - Focuses on addressing critical risks to restricttheir impact(s) to an acceptable level (within the defined risk appetite). This involves aclear definition of actions responsibilities and milestones.
v) Risk reporting and monitoring - Focuses on providing to the AuditCommittee and the Board periodic information on risk profile evolution and mitigationplans.
Roles and responsibilities
The Board has approved the Risk Management Policy of the Company. TheCompany has laid down procedures to inform the Board on i) to iv) listed above. The AuditCommittee Risk Management Committee periodically reviews the risk management system andgives its recommendations if any to the Board.
The Board reviews and guides the Risk Management Policy.
Implementation of the Risk Management Policy is the responsibility ofthe Management. It ensures functioning of the risk management system as per the guidanceof the Audit Committee Risk Management Committee. The Company has a risk managementoversight structure in which each sub-segment has a Chief Risk and Compliance Officer.
The Management at various levels takes accountability for riskidentification appropriateness of risk analysis and timeliness as well as adequacy ofrisk mitigation decisions at both individual and aggregate levels. It is also responsiblefor the implementation tracking and reporting of defined mitigation plans includingperiodic reporting to the Audit Committee and Board.
07. Internal financial controls
The internal financial controls over financial reporting are designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of the Financial Statements. These include those policies and procedures that:
i) pertain to the maintenance of records which in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany
ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of the Financial Statements in accordance with GenerallyAccepted Accounting Principles and that receipts and expenditures are being made only inaccordance with authorisations of the Management and the Directors of the Company
iii) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the assets that can have amaterial effect on the Financial Statements. A reputed international consultancy firm hasreviewed the adequacy of the internal financial controls with respect to the FinancialStatements.
The Management assessed the effectiveness of the internal financialcontrols over financial reporting as of March 31 2022 and the Board believes that thecontrols are adequate.
08. Fixed deposits
During 2021-22 the Company did not accept any fixed deposits.
09. Loans guarantees investments and security
Particulars of loans guarantees investments and security provided aregiven at page numbers 86.
10. Subsidiary joint venture and associate entities
There is no change in subsidiary joint venture and associate entitiesduring 2021-22.
11. Related party transactions
All the transactions entered into with the related parties were inordinary course of business and on arm's length basis. Details of such transactions aregiven at page number 99. No transactions were entered into by the Company that requireddisclosure in Form AOC-2.
12. Corporate social responsibility
Composition of the Corporate Social Responsibility (CSR) Committee theCSR Policy and the CSR Report are given at page number 12.
13. Annual return
Annual return for 2021-22 is available on the website of the Companyat www.amal.co.in/ investors/information-for-stakeholders/annual- general-meeting/
Deloitte Haskins & Sells LLP Chartered Accountants (DHS) wereappointed as the Statutory Auditors of the Company at the 43rd Annual GeneralMeeting (AGM) held on June 30 2017 until the conclusion of the 48th AGM.
The first term of five years of DHS is expiring at the ensuing AGM.Pursuant to Section 139 of the Companies Act 2013 and Rules made thereunder the Companycan reappoint DHS for second term of five years. Accordingly based on the recommendationof the Audit Committee the Board at its meeting held on April 22 2022 recommended thereappointment of DHS as the Statutory Auditors of the Company for a second term of fiveyears. DHS will hold the office for a period of five consecutive years from the conclusionof the 48th AGM of the Company till the conclusion of the 53rd AGMto be held in the year 2027 subject to the approval of the members of the Company at theensuing AGM. DHS has given its consent to act as the Auditors and confirmed itseligibility for reappointment.
The Auditor's Report for the financial year ended March 31 2022 doesnot contain any qualification reservation or adverse remark. The report is enclosed withthe Financial Statements in this annual report.
The Board appointed SPANJ & Associates as the Secretarial Auditorson January 21 2022 and their report is given at page number 15.
15. Directors' responsibility statement
Pursuant to Section 134(5) of the Companies Act 2013 the Directorsconfirm that to the best of their knowledge and belief:
15.1 In preparation of the annual accounts for the financial year endedMarch 31 2022 the applicable accounting standards have been followed and there are nomaterial departures.
15.2 The accounting policies were selected and applied consistently andjudgements and estimates thus made were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period.
15.3 Proper and sufficient care was taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
15.4 The attached annual accounts for the year ended March 31 2022were prepared on a going concern basis.
15.5 Adequate internal financial controls to be followed by the Companywere laid down and they were adequate and operating effectively.
15.6 Proper systems were devised to ensure compliance with theprovisions of all applicable laws and the same were adequate and operating effectively.
16.1 Appointments Reappointments Cessations
16.1.1 According to the Articles of Association of the Company MrSunil Lalbhai retires by rotation and being eligible offers himself for reappointment atthe AGM scheduled on September 08 2022.
16.1.2 Subject to the approval of the members in the AGM:
a) Mr Rajeev Kumar was reappointed as the Managing Director for aperiod of five years effective March 24 2022.
b) Mr Jyotin Mehta was appointed as an Independent Director for aperiod of five years effective April 22 2022.
In the opinion of the Board the Independent Directors possessintegrity experience and expertise relevant to the Company.
16.2 Policies on appointment and remuneration
While recommending appointment of the Directors the Nomination andRemuneration Committee considers the following factors:
i) Qualification: well-educated and experienced in senior leadershippositions in industry profession
ii) Traits: positive attributes and qualities
iii) Independence: criteria prescribed in Section 149(6) of theCompanies Act 2013 for the Independent Directors including no pecuniary interest andconflict of interest
16.2.2 Remuneration of the Non-executive Directors Sitting fees: '30000 for attending a Board meeting and Audit Committee meeting and ' 10000 forattending any other Committee meeting.
16.3 Criteria and method of annual evaluation
16.3.1 The criteria for evaluation of performance of
i) the Executive Directors
ii) the Non-executive Directors (other than
iii) the Independent Directors
iv) the Chairman
v) the Committees of the Board and
vi) the Board as a whole are summarised in the table at the end of theDirectors' Report at page number 10.
16.3.2 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 assessment of qualityquantity and timeliness of the flow of information to the Board and
iv) review of performance of the Board as a whole.
16.3.3 The Board has carried out annual evaluation of performance of:
i) its committees namely Audit Corporate Social ResponsibilityNomination and Remuneration and Stakeholders Relationship
ii) the Independent Directors
The templates for the above purpose were circulated in advance forfeedback of the Directors.
16.4 Familiarisation programs for the Independent Directors
The Company has familiarisation programs for its Independent Directors.It comprises amongst others presentations by and discussions with the Senior Managementon the nature of the industries in which it operates its vision and strategy itsorganisation structure and relevant regulatory changes.
17. Key Managerial Personnel and other employees
17.1 Appointments and cessations of the Key Managerial Personnel
Mr Rajeev Kumar has been reappointed as a Managing Director for aperiod of five years effective March 24 2022 subject to approval of the members.
The Remuneration Policy of the Key Managerial Personnel and otheremployees consists of the following:
i) Fixed pay
a ) Basic salary
ii) Variable pay
17.2.2 Factors for determining and changing fixed pay:
i) Existing compensation
iv) Salary bands
vi) Market benchmark
17.2.3 Factors for determining and changing variable pay:
i) Business performance
ii) Individual performance
18. Analysis of remuneration
The information required pursuant to Sections 134(3)(q) and 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given at page number 18.
The Company is not required to disclose the information required asthere were no employees during 2021-22 drawing remuneration exceeding the limit specified.
19. Management Discussion and Analysis
The Management Discussion and Analysis covering performance is given atpage number 19.
20. Corporate Governance Report
20.1 Statement of declaration given by the Independent Directors
The Independent Directors have given declarations under Section 149(6)of the Companies Act 2013.
The Corporate Governance Report is given at page number 20. Detailsabout the number of meetings of the Board held during 2021-22 are given at page number 25.The composition of the Audit Committee is given at page number 28.
All the recommendations given by the Audit Committee were accepted bythe Board.
20.3 Whistleblowing Policy
The Board on the recommendation of the Audit Committee had approved avigil mechanism (Whistleblowing Policy). The policy provides an independent mechanism forreporting and resolving complaints pertaining to unethical behaviour actual or suspectedfraud and violation of the code of conduct of the Company and is displayed on the websiteof the Company at www.amal.co.in/investors/policies/
No personnel has been denied access to the Audit Committee.
20.4 Secretarial standards
Secretarial standards as applicable to the Company were followed andcomplied with during 2021-22.
The Board expresses its sincere thanks to all the employees customerssuppliers lenders regulatory and government authorities stock exchanges and investorsfor their support.