Your Directors have pleasure in presenting the 25th AnnualReport of your Company together with the Audited Financial Statement for the year ended 31stMarch 2020.
The Company's financial performance for the year ended on 31stMarch 2020 is summarised below:
( ` Rs in Lakhs)
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|Particulars || |
Year Ended 31st March 2020
Year Ended 31st March 2019
Year Ended 31st March 2020
Year Ended 31st March 2019
|Revenue from Operation || |
|Profit before Interest and Depreciation || |
|Less: Interest || |
|Profit Before Depreciation || |
|Less: Depreciation || |
|Profit Before Tax || |
|Less: Provision for taxation || |
|Profit After Tax || |
|Transfer from Comprehensive Income || |
|Dividend Paid || |
|Dividend distribution tax (net) || |
|Balance carried forward || |
|Balance brought forward from previous year || |
|Balance carried to Balance Sheet || |
|Earnings per Share || |
FINANCIAL HIGHLIGHTS & STATE OF AFFAIRS OF THE COMPANY
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( ` Rs in Lakhs)
|Particulars || |
|Net Sales || |
|EBIDTA || |
|Profit before tax || |
CONSOLIDATED OPERATING RESULTS
The consolidated sales and operating income increased to
Rs 122453.47 lakhs from Rs 118666.17 lakhs in the previous year showinga growth of 3.19%. The consolidated EBT margin for the year was Rs 5718.31 lakhs asagainst Rs 3289.66 lakhs in previous year. The consolidated net profit during the year2019-20 was Rs 4604.58 lakhs compared to consolidated net profit amounting to Rs 2305.68lakhs in the previous year.
THE STATE OF COMPANY'S AFFAIRS
The Company is engaged in the business of Tiles (Wall/Vitrified/Ceramics) Marble & Quartz and any other businesses as may be specified in the objectclause of MOA of the Company. In addition to this the Company has forays into Bathwaredivision to make our Company the complete solution destination.
MANAGEMENT DISCUSSION AND ANALYSIS (MDA)
The details of operating performance of the Company for the year thestate of affairs and the key changes in the operating environment have been analysed inthe Management Discussion and Analysis section which forms a part of the Annual Report.
TRANSFER TO RESERVES
The Board of Directors of the Company has decided not to transfer anyamount to the Reserves for the year under review.
As on 31st March 2020 the Authorised Share Capital of theCompany consist of 36250000 Equity Shares of Rs 10/- each and issued subscribed andpaid up Capital consist of 30087446 Equity Shares of Rs 10/- each fully paid up. TheCompany has allotted 4700000 fully convertible warrants during the year.
PREFERENTIAL SHARE WARRANTS
During the year under review After receiving in principal approval fromthe Stock Exchanges and from Shareholders the Company has allotted 4700000 "FullyConvertible Warrants" at price of Rs 180/- each (at a face value of Rs 10/- each andPremium of Rs 170/- Per Convertible Warrant) which will be converted into equity sharesin one or more tranches for the below mentioned objectives: i) To fund long term capitalrequirements for future growth of the Company; ii) To meet working capital requirement andreducing debts; and iii) To meet General Corporate Purpose.
The 25% of Rs 180/- i.e. Rs 45/- per convertible warrant (Rs 45/-*4700000 convertible warrants) = Rs 2115 Lakhs have been received during the currentfinancial year and remaining 75% balance amounting to Rs 6345 Lakhs will be receivedwithin 18 months from the date of allotment. Amount received had been utilised for thepurpose mentioned above.
The Board of Directors at its meeting held on 30th June2020 have recommended a payment of final dividend of Rs 0.7/- (7%) per equity share of theface value of Rs 10/- each for the Financial year ended 31st March 2020subject to approval of the shareholders of the Company at the ensuing Annual GeneralMeeting. The total dividend for the financial year 2019-20 will be Rs 0.70/- per equityshare of face value Rs 10/- each.
Adapting to change is quintessential to a growing organization'slongevity. Over the time Company has changed to adapt and evolve with the changingeconomic landscape while keeping its core values firmly entrenched.
The Human Resource Department has strategic and functionalresponsibilities for all of the Human Resource disciplines in this changing scenario.There are four corresponding roles for Human Resource:
(a) as a strategic partner working to align Human Resource and businessstrategy
(b) as an administrative expert working to improve organizationalprocesses and deliver basic Human Resource services
(c) as an employee champion listening and responding toemployees' needs and
(d) as a change agent managing change processes to increase theeffectiveness of the organization.
Within organization Human Resource Department has active engagementwith employee issues listening to their concerns and building a professional and stablerelation between employees and employers. Managing expectations being flexiblecommunicating and adequate training are few of the most significant factors in keepingemployees contented.
Human Resource Department conducts performance appraisals careerdevelopment and up skilling developing effective reward systems and designing jobs to fitboth the needs of the business and employees.
On the Industrial front the Company continued to foster cordialIndustrial Relations with its work force during the year. The Company has a diverse workforce of 1878 employees as on 31st March 2020 vis-a-vis 2334 employees as on31st March 2019. Going forward the Company will continue to focus onnurturing the right talent to achieve the business goal.
Pursuant to the provisions of section 177(9) & (10) of theCompanies Act2013 and Regulation 22 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Vigil Mechanism or Whistle Blower Policy'for directors employees and other stakeholders to report genuine concerns has beenestablished. The Audit Committee reviews the functioning of the Whistle Blower mechanismon a quarterly basis. The same is uploaded on the website of the companyhttps://www.aglasiangranito.com/investor-relation
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has in place a Prevention of Sexual Harassment Policy inline with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The objective of this policy is to provideprotection against sexual harassment of women at workplace and for redressal of any suchcomplaint of harassment.
Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. We have not received any sexual harassmentcomplaints during the year 2019-20.
The Company has formalized Risk Management system by formulating andadopting Risk Management Policy to identify evaluate monitor and minimize theidentifiable business risk in the Organisation. Board has also formed Risk ManagementCommittee which regularly monitors probable risk of the Company and reports to the AuditCommittee. This is an ongoing process and the Audit Committee periodically reviews all therisk and suggests the necessary steps to mitigate the risk if any which may threaten theexistence of the Company. The Company is taking sufficient measures to mitigate variousrisks to the Company.
ENVIRONMENT HEALTH AND SAFETY
We believe that Environment Health and Safety (EHS) are essential andparamount pillars for sustainable growth of our business.
We have developed policies and guidelines which take our EHS compliancebeyond the regulatory requirements. The policies also ensure consistent and continuousimplementation of the EHS requirements throughout the Company.
A responsibility towards the environment is part of our mandate. Wecontinuously endeavour to minimize adverse environmental impact and demonstrate ourcommitment to protect the environment.
During the year all our manufacturing sites remained compliant withapplicable EHS regulations.
HOLDING SUBSIDIARIES ASSOCIATE JOINT VENTURE COMPANIES AND THEIRPERFORMANCE
As of 31st March 2020 the Company has five subsidiariesout of which one is step down subsidiary and one is associate company.
During the year under review Company has made disinvestment with itsJV Company AGL Panaria Private Limited on 21st May 2019. Company had madedisinvestment in Subsidiary Company Camrola Quartz Limited on 18th March 2020.Company had incorporated one more Wholly-owned Subsidiary Company named AGL Global TradePrivate Limited on 17th March 2020.
A report on performance and financial position (Form AOC-1) of each ofthe subsidiaries as per the Companies Act 2013 is provided as Annexure-A which formspart of this Annual Report.
The annual accounts of the Subsidiary Companies will be made availableto any Member of the Company seeking such information at any point of time and are alsoavailable for inspection by any Member of the Company at the Registered Office of theCompany on any working day during business hours up to the date of the Annual GeneralMeeting. The annual accounts of the Subsidiary Companies are also available on the websiteof the Company at https://www.aglasiangranito.com/ investor-relation
RELATED PARTY TRANSACTIONS
For all related party transactions prior omnibus approval of the AuditCommittee is obtained on a yearly basis for the transactions which are of a foreseen andrepetitive nature and such approval is in the interest of the Company. The transactionsentered into pursuant to the omnibus approval so granted are audited and a statementgiving details of all related party transactions is placed before the Audit Committee andthe Board of Directors for their approval. All related parties transactions are disclosedin note 37 to the financial statements. In accordance with the related party transactionpolicy of the Company and pursuant to the provisions of Section 188(1) of the CompaniesAct 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 particulars of allcontracts and/or arrangements entered between the Company and the related parties areannexed herewith in form AOC-2 as Annexure-B which forms part of this Annual Report.
The Related Party Transactions Policy as approved by the Board isuploaded on the Company's website i.e. https://www.aglasiangranito.com/investor-relation
Your Company has not accepted any deposits from the public within themeaning of Section 73 and 74 of the Companies Act 2013 and read with the Companies(Acceptance of Deposits) Rules 2014 for the year ended 31st March 2020.
PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS
Details of Loans granted Investments and Guarantees given and madeduring the year under review covered under the provisions of Section 186 of the CompaniesAct 2013 are given in note no. 5 4 and 38 to the Financial Statements.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company believes that a strong internal control framework isnecessary for business efficiency management effectiveness and safeguarding assets. TheCompany has a well-defined internal control system in place which is designed to providereasonable assurance related to operation and financial control. The Management of theCompany is responsible for ensuring that Internal Financial Control has been laid down inthe Company and that controls are adequate and operating adequately.
The audit scope mythology to be used reporting framework is definedin charter of the Internal Audit which is approved by the Audit Committee of the Board ofDirectors. The Internal Auditors evaluates the efficacy and adequacy of internal controlsystem its compliance with operating systems and policies of the Company and accountingprocedures at all the locations of the Company. Based on the report of the InternalAuditors process owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon areplaced before the Audit Committee of the Board. The Internal Audit also continuouslyevaluates the various processes being followed by the Company and suggests value additionto strengthen such processes and make them more effective.
INTERNAL CONTROLS WITH RESPECT TO FINANCIAL STATEMENTS
The Company has an adequate system of internal financial control inplace with reference to financial statements. The Company has policies and procedures inplace for ensuring proper and efficient conduct of its business the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial information.
The Company's plant property equipments and stocks areadequately insured against major risks. The Company also has appropriate liabilityinsurance covers particularly for product liability. The Company has also takenDirectors' and Officers' Liability Policy to provide coverage against theliabilities arising on them.
In accordance with the provisions of the Companies Act 2013 andArticles of Association of the Company Mr. Kanubhai B. Patel (holding DIN: 00386852) willretire by rotation at the ensuing Annual General Meeting and is eligible forreappointment.
There is no appointment or resignation of any of the Directors duringthe year under review.
All Independent Directors (IDs) have given declaration that they meetthe criteria of independence as laid down under section 149(6) of the Companies Act 2013and Regulation 16(1) (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details terms of appointment of IDs are disclosed on thecompany's website with following link http:// aglasiangranito.com/index.php/investor-relation
MEETINGS OF THE BOARD
During the year Five Board Meetings and one IndependentDirectors' meeting was held the details of which are given in Corporate GovernanceReport. The provisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 were adhered to while considering the time gap between twomeetings. Details of the number and dates of Board Meeting held during the year forms partof the Corporate Governance Report.
During the year the Board of Directors of the Company has passed theCircular Resolution by majority on 18th May 2019 for Disinvestment in AGLPanaria Private Limited and the Board took note of the same in the Board Meeting on 28thMay 2019 other circular resolution was passed in 09th September 2019 forallotment of convertible warrants and the Board took note of the same in the Board Meetingon 12th November 2019.
COMMITTEES TO THE BOARD
In compliance with the requirement of applicable laws and as part ofbest governance practices the Company has following Committees of the Board as on 31stMarch 2020: i. Audit Committee ii. Stakeholders Relationship Committee iii.Nomination and Remuneration Committee iv. Corporate Social Responsibility Committee v.Administrative Committee
The details with respect to the aforesaid Committees forms part of theCorporate Governance Report.
FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
The Independent Directors have been updated with their roles rightsand responsibilities in the Company by specifying them in their appointment letter alongwith necessary documents reports and internal policies to enable them to familiarise withthe Company's procedures and practices. The Company endeavours through presentationsat regular intervals to familiarize the Independent Directors with the strategyoperations and functioning of the Company. Site visits to various plant locations areorganized for the Directors to enable them to understand the operations of the Company.
The Independent Directors also met with senior management team of theCompany in informal gatherings.
The details of such familiarization programmes for IndependentDirectors are posted on the website of the Company and can be accessed athttps://www.aglasiangranito.com/investor-relation.
BOARD PERFORMANCE EVALUATION
Pursuant to the provisions of companies Act 2013 and SEBI ListingRegulations the Board has carried out annual performance evaluation of its ownperformance its Committees and the Directors including Chairman.
The evaluation manner has been carried out and has been explained inthe Corporate Governance Report.
KEY MANAGERIAL PERSONNEL
Mr. Kalidas J. Patel resigned with effect from 12thNovember 2019 from the post of Chief Financial Officer and Mr. Amarendrakumar Guptaresumed office as Chief Financial Officer with effect from 15th November 2019.
CORPORATE SOCIAL RESPONSIBILITY
In compliance with the requirements of section 135 of the CompaniesAct 2013 the company has laid down a CSR policy. The contributions in this regard havebeen also made to the Asian Institute of Technology which is engaged in activities invarious fields like provides technical education to students who are below poverty line orlow income group in Idar etc. The composition of the committee contents of CSR policyand report on CSR activities carried out during the financial year ended 31st March2020 in the format prescribed under Rule 9 of the Companies (Accounts) Rules 2014 isannexed herewith as Annexure C forming part of this Annual report.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the provisions of section 134(3)(c) of the Act2013 in relation to financial statements of the Company for the year ended 31st March2020 the Board of Directors state that:
i) In the preparation of the annual accounts for the year ended on 31stMarch 2020 the applicable accounting standards have been followed and that no materialdepartures have been made from the same;
ii) Appropriate accounting policies have been selected and appliedconsistently and judgements and estimates made are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as on 31st March2020 and the profit and loss of the Company for the period 31st March 2020;
iii) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) The annual accounts have been prepared on a going concern basis;
v) The Company is following up the proper Internal financial controlsand such internal financial controls are adequate and are operating effectively; and
vi) The Company has devised proper system to ensure the Compliance withthe provisions of all the applicable laws and that such systems are adequate and operatingeffectively.
NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination
& Remuneration Committee framed a policy for selection andappointment of Directors Senior Management and their remuneration. Details ofRemuneration under Section 197(12) of the Companies Act 2013 and details required underRule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 are also stated in Annexure-D which forms part of this Annual report.
M/s. Manubhai Shah & LLP Chartered Accountants Ahmedabad (FRN:106041W/W100136) has resigned as Statutory Auditors of the Company from 31stAugust 2019 and M/s. R R S & Associates Chartered Accountants (FRN: 118336W) wereappointed by Board on 31st August 2019 as Statutory Auditors of the Companywhich has been approved by shareholders in 24th Annual General meeting held on30th September 2019.
M/s. R R S & Associates Chartered Accountants have carried out theStatutory Audit of the Company for the FY 2019-20 and the Report of the Statutory Auditorforms part of the Annual Report.
IMPACT OF COVID-19
In view of the unprecedented COVID-19 pandemic the management has madea detailed assessment of its liquidity position for the next one year and recoverabilityof Property Plant and Equipment Investments Trade Receivables and Inventories as at thebalance sheet date. The Company's manufacturing facilities and factory office atIdar Dalpur and Radhu retail showroom all over India outsourced manufacturing partnersat Morbi and corporate office at Ahmedabad remained completely shut from March 24 2020 toMay 4 2020 due to lockdown imposed by the Government. The Company partially reopened thesame in phased manner in accordance with applicable guidelines issued by Ministry of HomeAffairs Government of India and various State Governments where lockdown restrictions havebeen reduced to certain extent. In assessing the recoverability the Company hasconsidered internal and external information upto the date of approval of these Ind ASfinancial results and has concluded that there are no material impact on the operationsand the financial position of the Company. However the impact of the global healthpandemic may be different from that estimated at the date of approval of these financialresults and the Company will continue to closely monitor any material changes to futureeconomic conditions.
M/s. Rajesh Parekh & Co. Practicing Company Secretaries havecarried out the Secretarial Audit of the Company for FY 2019-20 and the Report ofSecretarial Auditors in Form MR-3 is annexed with this Report as Annexure-E.
The observations of the Secretarial Auditor and the reply of themanagement is as under:
|Sr. No ||Observations of Secretarial Auditor ||Reply of the Management |
|1. ||One of the Designated Persons has not complied with the Regulation 7(2)(a) of SEBI (Prohibition of Insider Trading) Regulations 2015 ||One of the inactive Promoter traded inadvertently during closed trading window. Company sought clarification from concerned promoter and after considering the gravity of default the Company had imposed penalty of ` _ 10000 which has been deposited to SEBI IPEF account. |
|2. ||Code of Conduct under Regulation 9 (1) of SEBI (Prohibition of Insider Trading) Regulations 2015 was violated by three designated persons by trading in shares of the Company when the trading window was closed. ||Company sought clarification from concerned Designated Persons and after considering the gravity of default the Company had imposed total penalty of Rs 35000/- which has been deposited to SEBI IPEF account. The Company has also received an undertaking from two designated persons assuring that they will take sufficient care that such transactions will not happen in future and will abide by Code of Conduct and SEBI (PIT) Regulations 2015 |
|3. ||The Company has not put in place adequate and effective system for internal controls of prevention of Insider Trading as per Regulation 9A (1) of SEBI (Prohibition Trading) Regulations 2015. ||The Company is trying to maintain digital database internally and regularly checking compliance of code of conduct of Insider and exploring various services available for adequate and effective system for internal control. |
During the year pursuant to SEBI (Listing Obligations and DisclosuresRequirement) Regulations 2015 the Company has complied with applicable provision ofCorporate Governance and a separate report of Corporate Governance is included as a partof Annual Report along with requisite certificate from M/s. Rajesh Parekh & Co.Practicing Company Secretaries confirming compliance with the conditions of corporategovernance is attached to the Report on corporate governance.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return required under Section 134 (3) (a) and 92(3) of the Companies Act 2013 read with Rule 12(1) of the Companies (Management andAdministration) Rules 2014 in Form MGT-9 forms part of this Annual report as Annexure-F.
The Copy of Annual Return is placed on the website of the Company. Theweb-link of such Annual Return is https://www. aglasiangranito.com/investor-relation.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith asAnnexure-G to this report.
PARTICULARS OF EMPLOYEES
Your Company does not have any employee drawing remuneration exceedingRs 1.02 Crores per annual during FY 2019-20 pursuant to Section 197 (12) read with Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
There has been material changes and commitments affecting the financialposition of the Company taken place as during the year. Company has divested itsinvestments with its Italian JV AGL Panaria Private Limited on 21st May 2019and has also signed JV termination agreement with Camrola Quartz Limited on 18thMarch 2020 resulting that now AGL Panaria Private Limited is not a JV Company of theCompany and Camrola Quartz Limited has ceased to be a subsidiary Company of the Company.Company has formed one more Wholly-owned subsidiary Company named AGL Global Trade PrivateLimited on 17th March 2020.
NATURE OF BUSINESS
There has been no change in the nature of business of the Company otherthan the Company has started Bathware division.
LISTING OF SHARES
The Equity Shares of the Company are listed on the BSE Limited (BSE)with scrip code No. 532888 and on National Stock Exchange of India Limited (NSE) withscrip code of ASIANTILES. The Company confirms that the annual listing fees to both thestock exchanges for the financial year 2020-21 have been paid.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators /Courts which would impact the going concern status of the Company and its futureoperations.
Your Directors thanks all Customers Investors Vendors BankersAuditors Consultants and Advisors for their continued support during the year. We alsoplace on record our appreciation of the contributions of employees at all levels. YourDirectors thanks Governments of various countries where we have our operations especiallyGovernment of India and its various Ministries.
Your Directors looks forward for their continued support in the futurefor the consistent growth of the Company.
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For and on behalf of the Board
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Kamleshbhai B. Patel
|Place: Ahmedabad || |
Chairman and Managing Director
|Date: 19th August 2020 || |