To the Members
Your Directors have pleasure in presenting the 79th AnnualReport on the business and operations of the Company together with the audited financialstatements for the financial year ended 31st March 2020.
The summarized financial results of the Company for the financial year2019-20 are given hereunder:
| || ||(Rs.in lakhs) |
| ||2019-20 ||2018-19 |
|Revenue from operations & other income ||7162.21 ||7863.81 |
|Operating Profit (EBIDTA) ||(447.35) ||1288.96 |
|Finance Cost ||29.14 ||77.14 |
|Gross Profit (PBD) ||(476.49) ||1211.82 |
|Depreciation & amortization ||224.23 ||168.88 |
|Profit/(Loss) before tax ||(700.72) ||1042.94 |
|Provision for || || |
|- Current Tax (net) ||58.62 ||115.36 |
|- Deferred Tax (incl. MAT Credit Entitlement) ||(500.05) ||(211.15) |
|Net Profit/(Loss) ||(259.29) ||1138.73 |
|Other Comprehensive Income ||(38.06) ||(97.82) |
|Total Comprehensive Income for the year ||(297.35) ||1040.91 |
|Opening balance of Retained Earnings ||9045.87 ||9242.15 |
|Amount available for appropriation ||8758.46 ||10355.30 |
|Dividend on Equity Shares and Dividend Distribution Tax || || |
|- For the financial year 2018-19 ||271.17 ||309.43 |
|- For the financial year 2019-20 ||193.68 ||- |
|Transferred to General Reserve ||500.00 ||1000.00 |
|Closing Balance of Retained Earnings ||7793.61 ||9045.87 |
The Board of Directors at its meeting held on August 13 2019 approvedfirst interim dividend of Rs.2.50 per equity share of Rs.10/- each (i.e.25%). Secondinterim dividend of Rs.2.50 per equity share of Rs.10/ - each (i.e.25%) was also approvedby the Board of Directors at its meeting held on March 12 2020. These interim dividendswere paid to the shareholders on August 28 2019 and March 27 2020 respectively. Thetotal amount of dividend and tax thereon aggregates to Rs. 193.68 lakhs. The directorsrecommend for consideration of the shareholders at the ensuing annual general meeting theabove-referred interim dividends as final dividend for the year ended March 312020 asagainst final dividend of Rs.7/- per equity share of Rs.10/- each (i.e. 70%) for thefinancial year ended March 312019.
- The production of dairy milk & milk products during the year waslower by 4.92% at 9223 KL as against 9700 KL in the previous year. The decrease inproduction is mainly on account of slow off-take of cooking creamer and liquid toned milk.The increased prices of finished products due to increase in prices of raw milk also ledto low volumes. The outbreak of novel corona virus (COVID-19) and subsequent lockdown inthe month of March 2020 also disrupted the production and supply;
- During the year under review the revenue from dairy operationsincreased by 11.71% to Rs. 7424.68 lakhs as against Rs. 6646.57 lakhs in the previousyear. The growth is mainly due to increased volumes of ice-cream mix dessert mix softserve mix and coffee dairy drink and high product prices due to increased raw milk prices.The increase in revenue would have been still higher but for the lockdown in the month ofMarch 2020 which is a high sales month for our products;
- Raw milk prices have risen sharply this year. The other input costsmainly of utilities have also been higher during the year due to
change in fuel on account of environmental issues;
- Dairy Division recorded lower operating profit (EBIDTA) of Rs.750.50lakhs as against Rs.1096.82 lakhs in the previous year. The profit before tax was alsolower at Rs.578.39 lakhs as against Rs.960.68 lakhs in the previous year.
In the case of Real Estate no sale has been booked during theyear.
The Company has deployed surplus funds by way of investment infinancial assets which as on the closing date of the Financial Statements are measured atfair value through profit & loss account. The spread of COVID-19 and the subsequentlockdown in most part of the world led to sharp meltdown and triggered volatility infinancial markets across the globe in the month of March 2020 the emerging markets beingthe worst affected. The meltdown resulted in sharp erosion in values of the Company'sinvestments as on March 31 2020. The loss on mark-to-market recording of the value ofinvestments amounted to Rs. 1100.39 lakhs during the financial year ended March 312020;
The erosion in the value of the investments of the Company (onmark-to-market basis) due to meltdown in financial markets in the month of March 2020arising out of Covid-19 crisis EBIDTA has been adversely impacted. Accordingly there isoperating loss (EBIDTA) of Rs.447.35 lakhs for the financial year 2019-20 as againstoperating profit of Rs. 1288.96 lakhs in the previous financial year.
- In the case of real estate no new project is being planned. There issome inventory of a few commercial built-up shops in the Gagan Enclave which are in theprocess of being sold. Further converting the residential property of the Company atHaridwar into a hospitality project (Boutique Guest House) has led to many regulatory andother issues and has been abandoned. The residential property which was lying unused andbeing
unproductive has been disposed off to a realeted party during thecurrent financial year after obtaining necessary approvals of the Audit Committee and theBoard of Directors. As such there is no Real Estate business segment in the Company now.
- The Company in the past was providing business advisory & BPOservices to the Group companies. With effect from 1st April 2015 andthereafter no service activities have been carried on by the Company nor there seems tobe any possibility of restarting the same in the near future. Therefore the Servicesbusiness segment no longer exists in the Company.
- In the light of the above with effect from the current financialyear (i.e. 2020-21) the Company has only one business segment i.e. Dairy Milk andMilk Products.
The outbreak of Coronavirus (COVID-19) pandemic globally and in Indiahas shattered the world economy and is causing significant disturbance and slow-down ofeconomic activities. The nationwide total lockdown announced by the Government from March25 2020 due to COVID- 19 pandemic is being gradually lifted based on the impact of theoutbreak. The changes forced on the people and businesses by the pandemic are likely tolast for some time and the industry in general will have to brace itself for the economicshocks of the pandemic. The companies will have to prepare contingency plans such as workfrom home enhanced safety measures strategies for continuity of business and rapidrestoration of the operations. The Company's dairy business has been enormouslyimpacted as its major customers are quick service restaurants (QSRs) likeMcDonald's Burger King etc. which were closed since the outbreak of COVID-19 inmany parts of the country and there are looming uncertainties about the opening and fulloperation of QSRs in different places. The economic shocks of COVID- 19 on the dairybusiness of the Company will extend to a large part of the year and there is likely to besignificant adverse impact on the operations of the Company during the current financialyear 2020-21.
THE MANAGEMENT DISCUSSION & ANALYSIS
As required by Regulation 34(2) of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBILODR) Management Discussion and Analysis Report for the year ended 31.03.2020 isappended.
(i) Share Capital
The paid-up Equity Share Capital as on 31st March 2020 wasRs.321.32 lakhs. During the year under review the Company has not issued shares withdifferential voting rights nor granted stock options nor sweat equity.
In terms of the provisions of Section 68 of the Companies Act 2013 andthe Securities and Exchange Board of India (Buy-Back of Securities) Regulations 2018 theBoard of Directors of the Company at its meeting held on June 22 2020 has approved buyback of 175000 equity shares of Rs.10/- each of the Company (representing 5.45% of thetotal number of Equity Shares in the paid-up Equity Share capital of the Company) at aprice of Rs. 825/- per Equity Share for an aggregate consideration of Rs. 1443.75 lakhsbeing 7.32% of the fully paid-up equity share capital and free reserves as per the auditedbalance sheet of the Company for the financial year ended March 312020. The Record Datefor ascertaining the eligibility of the Shareholders to participate in the Buyback ofEquity Shares was fixed as 3rd July 2020. Further necessary stepsincluding approvals from SEBI BSE Ltd. and other authorities if any are being taken inaccordance with the relevant provisions of the Companies Act 2013 and SEBI (Buy Back ofSecurities) Regulations 2018. The entire buy back process is expected to be completedwithin the current financial year.
(ii) Fixed Deposits
Your Company has not accepted any public deposits under Chapter 4 ofthe Companies Act 2013 (the Act). As such no amount of principal
or interest on deposits from the public was outstanding as on the dateof the Balance Sheet.
(iii) Particulars of loans guarantees or investments
Particulars of loans guarantees and investments covered under theprovisions of Section 186 of the Act are given in the Notes to the Financial Statements.
The Company is committed to uphold the highest standard of corporategovernance and believe that business relationship can be strengthened through corporatefairness transparency and accountability. Your Company is fully compliant with all themandatory provisions of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. A Report on Corporate Governance with a Certificate from the Auditorsof the Company regarding compliance of the conditions of Corporate Governance is annexedas Annexure-A and forms part of this Annual Report.
A Certificate from the Chairman & Managing Director and ChiefFinancial Officer confirming the correctness of the financial statements adequacy ofinternal control measures and reporting of matters to the Audit Committee in terms of SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 and a Declaration bythe Chairman & Managing Director for compliance with the Company's Code ofConduct are annexed as Annexure-A and form part of this Report.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has put in place a Corporate Social Responsibility Policyin line with Section 135 and Schedule VIII of the Act. The Policy is available on thewebsite of the Company at www.amritcorp.com. As per the Policy the CSR activities arecarried on in areas of skill development & language training for employabilitylivelihood and income generation preventive health and sanitation waste resourcemanagement and water conservation and also contribute to Prime Minister's NationalRelief Fund National Mission for Clean Ganga and Swachh Bharat Kosh.
The Annual Report on CSR activities as required under the Companies(Corporate Social Responsibility
Policy) Rules 2014 has been appended as Annexure- B and forms integralpart of this Report.
BUSINESS RISKS & OPPORTUNITIES
Your Company has a robust governance structure with well-defined rolesand responsibilities for each vertical. This helps in identifying and managing businessrisks in a proactive manner and at the same time empowers the management to encashbusiness opportunities.
The governance structure interalia includes a comprehensive frameworkfor strategic planning implementation and performance monitoring of the business planwith a view to systematically identify risks and opportunities and monitor their movement.A strong and independent internal audit function at the corporate level carries out riskfocused audits across all business verticals enabling identification of areas where riskmanagement processes may need to be improved. The Audit Committee reviews internal auditfindings and provides strategic guidance on internal controls monitors the internalcontrol environment within the Company and ensures that internal audit recommendations areeffectively implemented.
Your Company over the years has established a reputation for doingbusiness with integrity and displays zero tolerance for any form of unethical behavior.Pursuant to Section 177(9) of the Companies Act 2013 the Company has formulated aWhistle Blower Policy to establish a vigil mechanism for directors and employees of theCompany. The purpose and objective of this Policy is to provide a framework to promoteresponsible and secure whistle blowing. It protects the employees wishing to raise aconcern about serious irregularities within the Company. The details of the Whistle BlowerPolicy are explained in the Corporate Governance Report and also posted on the website ofthe Company at www.amritcorp.com.
INTERNAL CONTROL SYSTEMS
(a) Internal Audit and its adequacy
With a view to maintain independence and objectivity in its workingthe Internal Audit function is carried out by outside chartered accountancy firms whichare appointed on the recommendations of
the Audit Committee. At the beginning of the each financial yearannual audit plan is rolled out. The audit plan is aimed at evaluation of the efficacy andadequacy of internal control systems and compliance thereof robustness of internalprocesses policies and accounting procedures compliance with laws and regulations.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
(b) Internal Controls over financial reporting
The internal financial controls within the Company are commensuratewith its operations. The Company has robust policies and procedures which interalia ensureintegrity in conducting its business safeguarding of its assets timely preparation ofreliable financial information accuracy and completeness in maintaining accountingrecords and prevention and detection of frauds and errors. The Audit Committee evaluatesthe internal financial control system periodically.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which isapplicable to the members of the Board and all employees in the course of day to daybusiness operations of the Company. The Company believes in zero tolerance againstbribery corruption and unethical dealings/ behaviours of any form. The Code has beenposted on the Company's website at www.amritcorp.com. The Code lays down the standardprocedure of business conduct which is expected to be followed by the Directors and thedesignated employees in their business dealings and in particular on matters relating tointegrity in the work place in business practices and in dealing with stakeholders. Allthe Board Members and the senior management personnel have confirmed compliance with theCode. A Declaration by the Chairman & Managing Director regarding compliance with theCompany's Code of Conduct is attached to the Report on Corporate Governance.
RELATED PARTY TRANSACTIONS
No Related Party Transactions were entered into during the financialyear 2019-20. All Related Party
T ransactions entered into in the past were on an arm's lengthbasis and were in the ordinary course of business. There are no materially significantRelated Party Transactions made by the Company with promoters directors Key ManagerialPersonnel or other designated persons during the year which may have potential conflictwith the interest of the Company at large.
On the recommendation of the Audit Committee the Board of Directorshas adopted a policy on Related Party Transactions which is also uploaded on the websiteof the Company (www.amritcorp.com) under the head Investor Relations'. ThePolicy envisages the procedure governing related party transactions required to befollowed to ensure compliance with the applicable laws and regulations as well as toensure that the Related Party T ransactions are managed and disclosed in accordance withthe strict legal and accounting requirements.
A statement of all related party transactions in the ordinary course ofbusiness and on arm's length entered in the past is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms & conditions ofthe transactions. The statement is supported by a certificate from the CEO and CFO.
None of the Directors has any pecuniary relationships or transactionsvis-a-vis the Company.
PREVENTION OF SEXUAL HARASSMENT
The Company believes that all employees have right to be treated withdignity and to work in an environment free of sexual harassment. The Company will notpermit or condone sexual harassment at workplace. The Company will make every effort toensure that no employee or visitor or any other person is subjected to sexual harassmentat any of the Company's workplaces and the allegations of sexual harassment will bedealt with seriously expeditiously and confidentially. The Company has in place a formalpolicy for prevention of sexual harassment which has been framed in accordance with theprovisions of The Sexual Harassment of Woman at Workplace (Prevention Prohibitionand Redressal) Act 2013 and Rules framed thereunder. No complaints of sexualharassment was received during the financial year 2019-20.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by theRegulators/Courts which would impact the going concern status of the Company and itsfuture operations. However othe directions of the hon'ble National Green Tribunalthe U.P Pollution Control Board filed a complaint against the company together with theother factories in Ghaziabad region in the special court of Judicial Magistrate (Water& Air Pollution Control) Lucknow under section 43 of the Water (Prevention andControl of Pollution) Act 1974 (Water Act') for contravention of the provisionsof section 24 of the Act. Against this the Company approached the Hon'ble AllahabadHight Court of Judicature at Allahabad (Lucknow Bench) for quashing the complaint filed byUPPCB and the Hon'ble High Court Vide order dated 30th September 2019 stayed theproceedings of the complaint. The stay is still continuing.
The details pertaining to composition of the Audit Committee areincluded in the Report on Corporate Governance. All the recommendations made by theCommittee were accepted by the Board.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
Two Independent Directors namely Shri Sujal Anil Shah and Smt. KetakiSood have been appointed as non-executive Independent Directors of the Company for asecond term of five consecutive years w.e.f. July 7 2020 by passing special resolutionsthrough Postal Ballot as per the requirements of Sections 149 153 and other applicableprovisions of the Companies Act 2013 and SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015.
(ii) Retirement by rotation
The Independent Directors hold office for a fix term of five years fromthe date of their last appointment and are not liable to retire by rotation. Out of theremaining four Directors Shri Ashwini Kumar Bajaj retires by rotation and being eligibleoffers himself for re-appointment as Director in accordance with the provisions of theCompanies Act 2013 and Articles of Association of the Company.
(iii) Declarations by Independent Directors
All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Act.
(iv) Board Evaluation
In compliance with the provisions of the Act and Regulations 17 and 19read with Part D of Schedule II to the SEBI LODR the Board has carried out annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Nomination & Remuneration Committee. The manner inwhich the evaluation has been carried out has been explained in the Corporate GovernanceReport. The Directors expressed satisfaction with the evaluation process and performanceof the Board of Directors and the Committees.
(v) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination &Remuneration Committee framed a Policy for selection appointment and remuneration ofDirectors and Key Managerial Personnel. More details of the same are given in theCorporate Governance Report.
(vi) Directors' Training and Familiarization Programme
The newly appointed Independent Directors are taken through a training& familiarization programme to familiarize them with their role rights andresponsibility as Directors the working of the Company nature of industry in which theCompany operates business model etc.
The Directors are regularly informed during meetings of the Board andCommittees of the activities of the Company its operations and issues facing theindustry. Considering the long association of the Directors with the Company and theirseniority and expertise in their respective areas of specialization continuous
training and familiarization every year is not considered necessary forthe existing Directors and accordingly no such programmes were conducted during theyear.
(vii) Data Bank of Independent Directors
The Ministry of Corporate Affairs (MCA) vide Notification NumberG.S.R.804(E) dated 22nd October 2019 effective from 1st December 2019 has introduced aprovision relating to inclusion of names of Independent Directors in the Data Bankmaintained by Indian Institute of Corporate Affairs (IICA). All Independent Directors ofthe Company are registered with IICA.
(i) Board Meetings
During the year six (6) Board Meetings were convened and held. Thedetails are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
(ii) Audit Committee
The Audit Committee comprises four members. The Chairman of theCommittee is an Independent Director. The Committee met four times during the year.Details of the role and responsibilities of the Audit Committee the particulars ofmeetings held and attendance of the members at such meetings are given in the CorporateGovernance Report.
(iii) CSR Committee
The CSR Committee comprises of four members of which two areIndependent Directors. The Committee met twice during the reporting period. Details of therole and functioning of the Committee are given in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of the section 134(3)(c) of the Companies Act 2013:
(i) that in the preparation of the annual financial statements for theyear ended March 312020
the applicable accounting standards have been followed along withproper explanation relating to material departures if any;
(ii) that such accounting policies as mentioned in the FinancialStatements have been selected and applied consistently and judgments and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company as at March 312020 and of the profit of the Company for theyear ended on that date;
(iii) that proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(iv) that the annual financial statements have been prepared on a goingconcern basis;
(v) that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively;
(vi) that proper systems to ensure compliance with the provisions ofall applicable laws were in place and were adequate and operating effectively.
(i) Statutory Auditors
At the 76th Annual General Meeting held on 19th September2017 M/s Mukesh Aggarwal & Co. Chartered Accountants New Delhi (ICAI RegistrationNo. 011393N) have been appointed as the Statutory Auditors of the Company for an initialperiod of 5 years from the conclusion of 76th annual general meeting till theconclusion of 81st annual general meeting.
The Report given by M/s Mukesh Aggarwal & Co. CharteredAccountants on the financial statements of the Company for the year 201920 is part of theAnnual Report. There has been no qualification reservation or adverse remark ordisclaimer in their Report. During the year under review the Auditors had not reportedany matter under Section 143(12) of the Companies Act 2013 therefore no detail isrequired to be disclosed.
(ii) Cost Auditors
The goods produced by the Company are not covered under cost audit andtherefore pursuant to Section 148 of the Companies Act 2013 read with the Companies(Cost Records and Audit) Amendment Rules 2014 the Company is not required to maintainthe cost audit records.
(iii) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theCompany has appointed M/s RSM & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed herewith as Annexure-C.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS & OUTGO
The information relating to conservation of energy technologyabsorption and foreign exchange earnings & outgo as required under Section 134(3)(m)of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isAnnexed herewith as Annexure-D.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in formMGT 9 is annexed herewith as Annexure-E.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors affirm that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Companies Secretaries of Indiarelating to Meetings of the Board and its Committees which have mandatory application.
TRANSFER OF EQUITY SHARES AND UNPAID/ UNCLAIMED DIVIDEND TO THEINVESTOR EDUCATION AND PROTECTION FUND
In line with statutory requirements the Company has transferred to theInvestor Education and Protection Fund set up by the Government of India equity shares in
respect of which dividend has remained unpaid/ unclaimed for a periodof seven consecutive years within the time line laid down by the Ministry of CorporateAffairs. Unpaid/unclaimed dividend for seven years or more has also been transferred tothe Investors Education and Protection Fund pursuant to the requirements under the Act.
Employee relations continued to be cordial throughout the year in theCompany. The Directors express their appreciation for the contribution made by theemployees to the operations of the Company during the year.
PARTICULARS OF EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment& Remuneration of Managerial Personnel) Rules 2014 requiring particulars of theemployees in receipt of remuneration in excess of Rs. 102 lakhs per year to be disclosedin the Report of Board of Directors are not applicable to the Company as none of theemployees was in receipt of remuneration in excess of Rs.102 lakhs during the financialyear 2019-20.
The information required under Section 197(12) of the Companies Act2013 read with Rule 5 of the Companies (Appointment & Remuneration of ManagerialPersonnel) Rules 2014 is given in the Statement annexed herewith as Annexure-F.
Your Directors convey their sincere thanks to the various agencies ofthe Central Government State Governments Banks and other concerned agencies for all thehelp and cooperation extended to the Company. The Directors also deeply acknowledge thetrust and confidence the shareholders and investors have placed in the Company. YourDirectors also record their appreciation for the dedicated services rendered by theworkers staff and officers of the Company.
| ||For and on behalf of the Board |
|Ghaziabad ||N.K. BAJAJ |
|August 5 2020 ||Chairman & Managing Director |