To the Members
Your Directors have pleasure in presenting the 80th Annual Report on thebusiness and operations of the Company together with the audited financial statements forthe financial year ended 31st March 2021.
The summarized financial results of the Company for the financial year 2020-21 aregiven hereunder:
| || ||(Rs.in lakhs) |
| ||2020-21 ||2019-20 |
|Revenue from operations & other income ||7041.68 ||7162.21 |
|Operating Profit (EBIDTA) ||2496.32 ||(447.35) |
|Finance Cost ||18.80 ||29.14 |
|Gross Profit (PBD) ||2477.52 ||(476.49) |
|Depreciation & amortization ||246.85 ||224.23 |
|Profit/(Loss) before tax ||2230.67 ||(700.72) |
|Provision for || || |
|- Current Tax (net) || ||58.62 |
|- Deferred Tax ||590.81 ||(500.05) |
|Net Profit/(Loss) ||1639.86 ||(259.29) |
|Other Comprehensive Income ||8.58 ||(38.06) |
|Total Comprehensive Income for the year ||1648.44 ||(297.35) |
|Opening balance of Retained Earnings ||7793.61 ||9045.87 |
|Amount available for appropriation ||9135.96 ||8758.46 |
|Dividend on Equity Shares and Dividend Distribution Tax || || |
|- For the financial year 2018-19 || ||271.17 |
|- For the financial year 2019-20 || ||193.68 |
|Transferred to General Reserve ||750.00 ||500.00 |
|Closing Balance of Retained Earnings ||8385.96 ||7793.61 |
The Board of directors are pleased to recommend payment of dividend of Rs.7.50 perequity share of Rs.10/- each (i.e. 75%) for the financial year ended March 31 2021subject to approval of the shareholders at the ensuing annual general meeting as againstthe dividend of Rs.5/- per equity share of Rs.10/- each (i.e. 50%) paid for the year endedMarch 31 2020.
The Covid-19 pandemic has led to an unprecedented health crisis and has disrupted humanlife and economic activities. The Govt. of India imposed stringent nationwide lockdownw.e.f. March 24 2020 which has severally impacted the dairy operations of the Company.Even after relaxation/ lifting of restrictions by the authorities after the first wave ofpandemic revenue and profitability of the Company's dairy operations continued to beadversely impacted. The members are aware that majority of our dairy business is B2B andthe customers we service are mostly quick service restaurants (QSRs) andhotels/restaurants/cafes (HORECA) which were closed since the outbreak of Covid-19. Therewas gradual improvement in the second half of FY 2020-21 in production and off-take of ourdairy products as the QSRs ramped up their take-out drive-thro' and home deliverycapabilities and adopted new and innovative marketing practices to reach consumers e.g.online ordering mechanism contactless deliveries cloud kitchens value offers etc.However the scale of operations was miniscule as the consumers were hesitant to visitQSRs for the sheer fear of the pandemic and discretionary spending also came down for fearof loss of income.
The second wave of the pandemic has hit again in April 2021 with many State Govts.imposing mobility restrictions. The magnitude and speed of Covid-19 with its mutatedcontagious strain has been unprecedented and has hit hard the customers economy and themarket. The potential impact to our manufacturing operations going forward will depend toa large extent on future developments regarding covid-19 that cannot be accuratelypredicted at this time including the duration and severity of the pandemic the extentand effectiveness of the containment actions. The management is closely monitoring thedeveloping situation in collaboration with our customers and is confident to manage thecrisis. The demand revival is expected once mobility restrictions are lifted by theregulatory authorities.
OVERVIEW OF COMPANY'S OPERATIONAL & FINANCIAL PERFORMANCE
- The production of dairy milk & milk products during the year was lower by 39.64%at 5567 KL as against 9223 KL in the previous year. The outbreak of COVID-19 andsubsequent lockdowns leading to restrictions in transportation travel ban socialdistancing norms and such other emergency measures caused wide-spread disruption inproduction and supply. The operations of Company's major customers i.e. QSRs and HORECAwere severally impacted as they were closed since the outbreak of Covid-19. As a resultthe off-take of Company's products by these customers was low. There has been someimprovement in the second half upon lifting of the restrictions by the regulatoryauthorities.
- During the year under review the revenue from dairy operations decreased by 50.73%to Rs. 3658.41 lakhs as against Rs. 7424.68 lakhs in the previous year;
- Raw milk and SMP prices were lower by about Rs.8-10 per kg during the year incomparison to the previous year. The stock of other inputs remained largely unchangedduring the year;
- Dairy Division has posted operating loss (EBIDTA) of Rs.106.42 lakhs during the yearunder review as against operating profit of Rs.750.50 lakhs in the previous year. The lossbefore tax was Rs.301.14 lakhs as against profit of Rs. 578.39 lakhs in the previous year.
- The Company has deployed surplus funds by way of investment in financial instruments.The Company's treasury operations continued to focus on the deployment of excess funds onthe back of effective portfolio management of funds within a well defined risk managementframework. All investment decisions in deployment of funds continued to be guided by thetenets of safety of principal and liquidity During the year investment portfolio mix wasrebalanced in line with the evolving markets environment.
- When the pandemic erupted in 2020 mobility and economic activities fell sharplyacross the world. This had a concomitant effect on the capital markets. The benchmark BSESensex collapsed to 25981 points on March 23 2020 the lowest value in the last fiveyears. Since then the sensex has almost doubled itself in the last 14 months. Unlike thefirst wave of pandemic stock markets have been remarkably resilient in India during thesecond wave with PE multiples hitting peak levels. Foreign investors have been providingsupport to the Indian market as they are extremely bullish.
- For the year ended March 31 2021 the income from treasury stood at Rs.3323.95lakhs as against loss of Rs.374.56 lakhs in the previous year. The treasury profitabilitysharply improved during the year to Rs.2602.74 as against loss of Rs.1197.85 lakhs inthe previous year Besides the normal gains on sale/redemptions and interest/dividendincome the treasury clocked mark-to-market gains of Rs.1858.13 lakhs in the year underreview.
- The assets under management as on March 31 2021 were Rs.146.30 crores.
Company as a whole
During the year under review the gross revenue is lower by 1.68% at Rs.7041.68 lakhsas against Rs.7162.21 lakhs in the previous year. The operating profit (EBIDTA) ofRs.2496.32 lakhs has been recorded in the financial year 2020-21 as against operatingloss of Rs.447.35 lakhs in the previous year.
MANAGEMENT DISCUSSION & ANALYSIS
In terms of the provisions of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI
LODR") Management Discussion and Analysis for the year ended March 31 2021 isappended and forms an integral part of this Report.
The Company is committed to uphold the highest standard of corporate governance andbelieve that business relationship can be strengthened through corporate fairnesstransparency and accountability. Your Company is fully compliant with all the mandatoryprovisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015("SEBI LODR"). In terms of Regulation 34 of SEBI LODR a Report on CorporateGovernance with a Certificate from the Auditors of the Company regarding compliance of theconditions of Corporate Governance is annexed as Annexure-A and forms part of this AnnualReport.
FINANCE (i) Share Capital
The paid-up Equity Share Capital as on 31st March 2020 stood at Rs.321.32lakhs divided into 3213231 equity shares of the face value of Rs. 10/- each. During theyear under review the Board of Directors of the Company at the meeting held on June 222020 approved buy-back of 175000 equity shares of Rs. 10/- each (representing 5.45% ofthe paid-up Equity Share Capital) at a price of Rs. 825/-per equity share for an aggregateconsideration of Rs. 1443.75 lakhs being 7.32% of the fully paid-up equity share capitaland free reserves as per audited balance sheet of the Company for the financial year endedMarch 31 2020 pursuant to the provisions of Sections 68 69 70 and other applicableprovisions if any of the Companies Act 2013 and Rules made thereunder and theprovisions of Securities and Exchange Board of India (Buy-Back of Securities) Regulations2018 as amended. After necessary approvals from SEBI BSE Ltd. and other authorities thebuy-back process was concluded during the financial year 2020-21. As a result of thebuy-back the paid-up equity share capital has been reduced by Rs.17.50 lakhs and standsat as Rs.303.82 lakhs divided into 3038231 equity shares of the face value of Rs. 10/-each as on March 31 2021.
During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity.
Your Company has not accepted any deposits falling under the ambit of Section 73 of theCompanies Act 2013 ("the Act") and the Rules framed thereunder during the yearunder review and there are no unpaid/unclaimed deposits nor any amount of principal orinterest on public deposits outstanding as on the date of the Balance Sheet.
(iii) Particulars of loans guarantees or investments
Loans guarantees and investments covered under the provisions of Section 186 of theAct form part of the Notes to the financial statements provided in this Annual Report.
(iv) Related Party Transactions
The particulars of contracts or arrangements with related parties as per Section 188of the Companies Act 2013 and Rules made thereunder and as per the Related PartyTransactions ("RPT") Policy of the Company during the financial year ended March31 2021 in prescribed Form AOC-2 is annexed to this Report (Annexure-B). All transactionswith related parties during the year were on arm's length basis and were in the ordinarycourse of business. There are no materially significant related party transactions made bythe Company with promoters directors key managerial persons or others which may havepotential conflict with the interest of the Company at large or which warrant the approvalof the shareholders.
On the recommendation of the Audit Committee the Board of Directors has adopted apolicy on Related Party Transactions which is also uploaded on the website of the Company(www.amritcorp.com) under the head Investor
Relations'. The Policy envisages the procedure governing related party transactionsrequired to be followed to ensure compliance with the applicable laws and regulations aswell as to ensure that the Related Party Transactions are managed and disclosed inaccordance with the strict legal and accounting requirements.
All transactions with related parties are placed before the Audit Committee as well asthe Board of Directors for approval. Prior omnibus approval of the Audit Committee and theBoard is obtained for RPTs which are repetitive or foreseeable. A statement giving detailsof all RPTs is placed before the Audit Committee on a quarterly basis.
(v) Material changes and commitment affecting financial position between the end of thefinancial year and the date of the Report
There are no material changes and commitments affecting the financial position of theCompany which occurred after the end of the financial year i.e. March 31 2021 exceptCOVID-19 pandemic explained above.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has put in place a Corporate Social Responsibility Policy in line withSection 135 and Schedule VIII of the Act. The CSR Policy as approved by the Board ofDirectors is available on the website of the Company at www.amritcorp.com. As per thePolicy the CSR activities are carried on in areas of skill development & languagetraining for employability livelihood and income generation preventive health andsanitation waste resource management and water conservation and also contribute to PrimeMinister's National Relief Fund National Mission for Clean Ganga and Swachh Bharat Kosh.
The Annual Report on CSR activities as required under Sections 134 and 135 of the Actread with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 andRule 9 of the Companies (Accounts) Rules 2014 has been appended as Annexure-C and formsintegral part of this Report.
Your Company has a robust governance structure with well-defined roles andresponsibilities for each vertical. This helps in identifying and managing business risksin a proactive manner and at the same time empowers the management to encash businessopportunities.
The governance structure inter alia includes a comprehensive framework for strategicplanning implementation and performance monitoring of the business plan with a view tosystematically identify risks and opportunities and monitor their movement. A strong andindependent internal audit function at the corporate level carries out risk focused auditsacross businesses enabling identification of areas where risk management processes mayneed to be improved. The Audit Committee reviews internal audit findings and providesstrategic guidance on internal controls monitors the internal control environment withinthe Company and ensures that internal audit recommendations are effectively implemented.
Your Company over the years has established a reputation for doing business withintegrity and displays zero tolerance for any form of unethical behavior. Pursuant toSection 177(9) of the Companies Act 2013 the Company has formulated a Whistle BlowerPolicy to establish a vigil mechanism for directors and employees of the Company. Thepurpose and objective of this Policy is to provide a framework to promote responsible andsecure whistle blowing. It protects the employees wishing to raise a concern about seriousirregularities within the Company. The details of the Whistle Blower Policy are explainedin the Corporate Governance Report and also posted on the website of the Company atwww.amritcorp.com.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct which is applicable to themembers of the Board and all employees in the course of day to day business operations ofthe Company. The Company believes in zero tolerance against bribery corruption andunethical dealings/ behavior of any form. The Code has been posted on the Company'swebsite at www.amritcorp.com. The Code lays down the standard procedure of businessconduct which is expected to be followed by the Directors and the designated employees intheir business dealings and in particular on matters relating to integrity in the workplace in business practices and in dealing with stakeholders. All the Board Members andthe senior management personnel have confirmed compliance with the Code. A Declaration bythe Chairman & Managing Director regarding compliance with the Company's Code ofConduct is attached to the Report on Corporate Governance.
INTERNAL CONTROL SYSTEMS (a) Internal Audit and its adequacy
With a view to maintain independence and objectivity in its working the Internal Auditfunction is carried out by outside chartered accountancy firms which are appointed on therecommendations 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 commensurate with itsoperations. The Company has robust policies and procedures which inter alia 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.
PREVENTION OF SEXUAL HARASSMENT
The Company believes that all employees have right to be treated with dignity and towork in an environment free of sexual harassment. The Company will not permit or condonesexual harassment at workplace. The Company will make every effort to ensure that noemployee or visitor or any other person is subjected to sexual harassment at any of theCompany's workplaces and the allegations of sexual harassment will be dealt withseriously expeditiously and confidentially. The Company has in place a formal policy forprevention of sexual harassment which has been framed in accordance with the provisionsof "The Sexual Harassment of Woman at Workplace (Prevention Prohibition andRedressal) Act 2013" and Rules framed thereunder. No complaints of sexual harassmentwas received during the financial year 2020-21.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/ Courts whichwould impact the going concern status of the Company and its future operations.
The details pertaining to composition of the Audit Committee are included in the Reporton Corporate Governance. All the recommendations made by the Committee were accepted bythe Board.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) (i) Appointment
No changes have taken place in the Board of Directors and Key Managerial Personnel(KMP) from the date of last Annual Report. The details of the Directors are given in theCorporate Governance Report annexed hereto.
(ii) Retirement by rotation
The Independent Directors hold office for a fix term of five years from the date oftheir last appointment and are not liable to retire by rotation. Out of the remaining fourDirectors Shri Girish Narain Mehra retires by rotation and being eligible offers himselffor re-appointment as Director in accordance with the provisions of the Companies
Act 2013 and Articles of Association of the Company.
(iii) Declarations by Independent Directors
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act.
(vi) Board Evaluation
In compliance with the provisions of the Act and Regulations 17 and 19 read with Part Dof Schedule II to the SEBI LODR the Board has carried out annual performance evaluationof its own performance the directors individually as well as the evaluation of theworking of its Nomination & Remuneration Committee. The manner in which the evaluationhas been carried out has been explained in the Corporate Governance Report. The Directorsexpressed satisfaction with the evaluation process and performance of the Board ofDirectors the Committees and the Managing Director.
(vii) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. More details of the same are given in the Corporate GovernanceReport.
(viii) Directors' Training and Familiarization Programme
The newly appointed Independent Directors are taken through a training &familiarization programme to familiarize them with their role rights and responsibilityas Directors the working of the Company nature of industry in which the Companyoperates business model etc. The Directors are regularly informed during meetings of theBoard and Committees of the activities of the Company its operations and issues facingthe industry. Considering the long association of the Directors with the Company and theirseniority and expertise in their respective areas of specialization continuous trainingand familiarization every year is not considered necessary for the existing Directors andaccordingly no such programmes were conducted during the year.
(ix) Data Bank of Independent Directors
The Ministry of Corporate Affairs (MCA) vide Notification Number G.S.R.804(E) dated 22ndOctober 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 five (5) Board Meetings were convened and held. The details are givenin the Corporate Governance Report. The intervening gap between the Meetings was withinthe period prescribed under the Companies Act 2013.
(ii) Audit Committee
The Audit Committee comprises four members. The Chairman of the Committee is anIndependent Director. The Committee met four times during the year. Details of the roleand responsibilities of the Audit Committee the particulars of meetings held andattendance of the members at such meetings are given in the Corporate Governance Report.
(iii) CSR Committee
The CSR Committee comprises of four members of which two are Independent Directors. TheCommittee met twice during the reporting period. Details of the role and functioning ofthe Committee are given in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofthe section 134(3)(c) of the Companies Act 2013: (i) that in the preparation of theannual financial statements for the year ended March 31 2021 the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures 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 31 2020 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 havebeen prepared on a going concern basis; (v) that proper internal financial controls werein place and that the financial controls were adequate and were operating effectively;(vi) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
(i) Statutory Auditors
At the 76th Annual General Meeting held on 19th September 2017M/s Mukesh Aggarwal & Co. Chartered Accountants New Delhi (ICAI Registration No.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. Chartered Accountants on thefinancial statements of the Company for the year 2020-21 is a part of the Annual Report.There has been no qualification reservation or adverse remark or disclaimer in theirReport. During the year under review the Auditors had not reported any matter underSection 143(12) of the Companies
Act 2013; therefore no detail is required to be disclosed.
(ii) Cost Auditors
The goods produced by the Company are not covered under cost audit and thereforepursuant to Section 148 of the Companies Act 2013 read with the Companies (Cost Recordsand Audit) Amendment Rules 2014 the Company is not required to maintain the cost auditrecords.
(iii) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s RSM & Co. a firm of Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewithas Annexure-D.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
The information relating to conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is Annexed herewith asAnnexure-E.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure-F.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Board of Directors affirm that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India relatingto Meetings of the Board and its Committees which have mandatory application.
TRANSFER OF EQUITY SHARES AND UNPAID/ UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION ANDPROTECTION FUND
In line with statutory requirements the Company has transferred to the InvestorEducation and Protection Fund set up by the Government of India equity shares in respectof which dividend has remained unpaid/ unclaimed for a period of seven consecutive yearswithin the time line laid down by the Ministry of Corporate Affairs. Unpaid/unclaimeddividend for seven years or more has also been transferred to the Investors Education andProtection Fund pursuant to the requirements under the Act.
Employee relations continued to be cordial throughout the year in the Company. TheDirectors express their appreciation for the contribution made by the employees to theoperations of the Company during the year.
PARTICULARS OF EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs.102 lakhs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs.102 lakhs during the financial year 2020-21.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 is given in the Statement annexed herewith as Annexure-G.
Your Directors convey their sincere thanks to the various agencies of the CentralGovernment State Governments Banks and other concerned agencies for all the help andcooperation extended to the Company. The Directors also deeply acknowledge the trust andconfidence the shareholders and investors have placed in the Company. Your Directors alsorecord their appreciation for the dedicated services rendered by the workers staff andofficers of the Company.
For and on behalf of the Board
|Ghaziabad ||N.K. BAJAJ |
|June 14 2021 || |
Chairman & Managing Director