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ASL Industries Ltd.

BSE: 538418 Sector: Auto
NSE: ASLIND ISIN Code: INE617I01024
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ASL Industries Ltd. (ASLIND) - Director Report

Company director report

Dear Members

The Board of Directors of your Company are pleased to present the 29thAnnual Report covering the operational and business performance of your Company alongwith the Audited Financial Statements for the financial year ended March 31 2020.

Financial Highlights

Financial results of your Company for the year ended 31st March 2020 issummarized below:

Amount in Rs.
Particulars 2019-2020 2018-2019
Revenue from operations 134215746 672689719
Other Income 8868025 2251216
Total Revenue 143083771 674940935
Total Expenses 161916772 721678941
Profit/Loss before Exceptional Item (18832951) (46738005)
Exceptional item (Loss/(Profit) from Sale of Assets) (43208182) 727003
Profit before taxation 24375231 (47465008)
Less: Current Tax 2641091 -
Deferred Tax 274321 (13446173)
Profit/Loss after taxation 21459819 (34018835)
Earnings Per Share (EPS) 1.42 (3.27)

Description of State of Company Affairs

The gross revenue has decrease to Rs. 1342.15 Lacs as compared to Rs. 6726.89 Lacs overthe corresponding period in the previous year.

However the Company has made a profit of Rs. 243.75 lacs as compared to loss of 474.65Lacs for the previous year by way of Sale of Assets of the Company.

After providing for taxation expenses the Company recorded a profit of Rs. 214.59 Lacsas against loss of Rs. 340.18 Lacs in the previous year.

COVID-19

Pursuant to SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated May 20 2020 thedisclosure on material impact of COVID-19 pandemic on the Company under Regulation 30 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 has been made toNational Stock Exchange Emerge SME Platform.

Due to the lockdown announced by the Government of India and State Governmentsoperations of the Company came to a halt for the period 24th March 2020 to 18thMay 2020.

During this lockdown period the Company implemented Work from Home (WFH) policy for allthe administrative staffs and was quite successful in implementing the same.

General Reserves

No amount has been transferred to the General Reserve for the financial Year 201920.

Dividend

No dividend is declared for the Financial Year ended 31st March 2020.

Share Capital

The Authorized Capital of the Company is Rs. 110000000.00 and the SubscribedPaid-up and Issued Capital of the Company is Rs. 104170900.00 as on 31st dayof March 2020.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed as Annexure-I which forms an integral partof this Report.

The same is also available on the Company's website www.https://aslindustries.in.

Material changes and commitments affecting the financial position of the Company whichhave occurred between the end of the financial year of the Company to which the financialstatements relate and the date of the report:

a) Due to current economic slowdown and poor Demand in automobile and steel sector theCompany has sold its existing shed & Building with super structure and other assetsattached thereto along with leasehold rights to M/s Hi-tech Chemicals Pvt. Ltd. videagreement dated 22.04.2019 for a consideration of Rs 30 Crores (Rupees Thirty Croresonly). In addition to above Plant and Machineries and other assets of the company werealso disposed off during the year. The Company has decided to use the sale proceeds fromthe above assets to repay existing debts and make the company debt free and enable thecompany to use the balance funds to carry out its Asset Light model and pursue otherbusiness activities in line with this Model. This will not affect the Company's ability tocontinue as a Going Concern.

b) The remaining Plant & Machinery along with inventory have been shifted to jobworker's premises for further processing.

c) Excess funds available to the company has been given as short term loans andadvances to generate higher returns.

Particulars of Loans Guarantees or Investments by the Company

Your Company has given any Loan or provided any guarantees or made any investmentscovered under the provisions of section 186 of the Companies Act 2013 during theFinancial Year 2019-20. The details of which is mentioned under Note- 10 of theFinancial Statement.

Related Party Transactions

The Company's major related party transactions are generally with its group Companies.The related party transactions are entered into based on considerations of variousbusiness exigencies.

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis.

During the year under review there have been no Related Party Transactions havingpotential conflict with the interest of the Company.

For details please refer to the Financial Statement Note-26 (h) of the Companyincluded in Annual Report.

Audit and Auditors:

Statutory Auditors:

M/s. M B A H & Co. Chartered Accountants (FRN: 121426W) were appointed asStatutory Auditors of the company for a period of 5 years from the F.Y. 01.04.2019 up to31.03.2024 at the Annual General Meeting held on 30.09.2019.

Auditor Report

The reports given by the Auditors on the Standalone Financial Statements of the Companyfor the financial year ended March 31 2020 form part of this Annual Report and there isno qualification reservation adverse remark or disclaimer given by the Auditors in theirReports.

The Auditors of the Company have not reported any fraud in terms of the second provisoto Section 143(12) of the Act.

Secretarial Audit and Report

In terms of Section 204 of the Companies Act 2013 and read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Shikha Naredi (ICSI Membership No. A43824 and COP 16103) of M/s. ShikhaNaredi & Associates Company Secretary to as the Secretarial Auditor of the Companyto conduct the Secretarial Audit for the financial year ended March 31 2020 and to submitSecretarial Audit Report.

The Secretarial Audit Report as received from Ms. Shikha Naredi in the prescribed FormNo. MR - 3 is annexed to this Board's Report and marked as Annexure - II.

The Secretarial Audit Report contains qualification reservation adverse remark ordisclaimer.

 

The website of the Company was not updated due to technical glitch as on the date ofthe Secretarial Audit. The same was brought to the notice of the Board and has beensubsequently updated.

Subsidiaries/ Associate/ Joint Venture

Your Company does not have any subsidiary associate or Joint Venture.

Deposits

Your Company has not accepted any deposits covered under ‘Chapter V-Acceptance ofDeposits by Companies' under the Act during the financial year ended March 31 2020

Board Evaluation

The Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the working of its Audit Nomination &Remuneration Committees.

The same has been discussed in details in Management Discussion and Analysis Report attachedherewith.

Due to clerical error the Management Discussion and Analysis Report 2019 was notprinted in the Annual Report 2018-19 the same has been attached herewith for thereference of the members of the Company.

Corporate Governance:

As per Regulation 15.2 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Regulation 17 to 27 shall not apply to any Listed entity listed at SMEExchange.

The Corporate Governance Report is not applicable to the Company as per the saidprovisions.

However the Board has prepared a Corporate Governance Report for the year 2019 and2020. Both annexed herewith.

Corporate Social Responsibility

The provision of Corporate Social Responsibility not applicable to the Company.

Change In Nature Of Business

Due to current economic slowdown and poor demand in automobile and steel sector theCompany has sold its existing shed & Building with super structure and other assetsattached thereto along with leasehold rights to M/s Hi-tech Chemicals Pvt. Ltd. videagreement dated 22.04.2019 for a consideration of Rs 30 Crores (Rupees Thirty Croresonly). In addition to above Plant and Machineries and other assets of the company werealso disposed off during the year. The Company has decided to use the sale proceeds fromthe above assets to repay existing debts and make the company debt free and enable thecompany to use the balance funds to carry out its Asset Light model and pursue otherbusiness activities in line with this Model.

Significant and Material Litigations/Orders

During the year under review there were no significant material orders passed by theRegulators/Courts and no litigation was outstanding as on March 31 2020 which wouldimpact the going concern status and future operations of your Company.

The details of litigation on tax matters are disclosed in the Auditor's Report andFinancial Statements which form part of this Annual Report.

Details In Respect Of Adequacy Of Internal Financial Controls With Reference To TheFinancial Statements

a) The Board of Directors of the Company have adopted various policies and proceduresfor ensuring the orderly and efficient conduct of its business the safeguarding of itsassets prevention and detection of frauds and errors the accuracy and completeness ofthe accounting records and the timely preparation of reliable financial information.

b) The Company has appointed M/s. Harnathka & Associates Chartered Accountantsas Internal Auditor to test the Internal Controls and to provide assurance tothe Board that business operations of the organization are in accordance with the approvedpolicies and procedures of the Company. The Internal Auditor presents the Internal AuditReport highlighting internal audit findings and status of Management Action Plan on theInternal Audit observations.

Board Of Directors Board Meetings And Key Managerial Personnel

Composition:

Your Company's Board is duly constituted and is in compliance with the requirements ofthe Act the Listing Regulations and provisions of the Articles of Association of theCompany. Your Board has been constituted with requisite diversity wisdom expertise andexperience commensurate to the scale of operations of your Company.

Meetings:

During the year 9 (Nine) Board Meetings were convened and held and the intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.

The dates on which the Board Meetings were held areas under: 16.04.2019 23.04.201930.05.2019 19.07.2019 13.09.2019 18.11.2019 30.11.2019 31.12.2019 and 10.01.2020.

Changes in Board Composition

Details of changes in the Board composition during the year under review are as under:

Sr. No. Name of Directors Designation and Category Reasons and date of appointment/re-appointment/resignation/retirement
1. Jayshree Goyal (DIN: 00033314) Non-Executive Woman Director Retired by rotation and re-appointed pursuant to Section 152(6) of the Act at the 28th AGM held on September 30 2019.

Directors seeking appointment /re-appointment

Mr. Dilip Kumar Goyal retires by rotation and being eligible offers himself forreappointment.

Declaration by independent Directors

All independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and underregulation 25 of the SEBI (Listing obligations and disclosure requirements) Regulations2015.

Audit Committee

The Board of Directors of your Company has duly constituted an Audit Committee incompliance with the provisions of Section 177 of the Act the Rules framed thereunder readwith Regulation 18 of the Listing Regulations. The recommendations made by the AuditCommittee are accepted by your Board.

The Composition of the Committee is as under:

Name of the Member Designation
Ashish Lodha Chairman
Murari Lal Khandelwal Member
Akshay Goyal Member

Nomination & Remuneration Policy and Committee

Your Board has adopted a Remuneration Policy. The Policy provides criteria for fixingremuneration of the Directors KMPs SMPs as well as other employees of the Company. ThePolicy enumerates the powers roles and responsibilities of the Nomination andRemuneration Committee.

In terms of the provisions of Section 178(3) of the Companies Act 2013 the Nominationand Remuneration Committee is responsible for formulating the criteria for determining thequalifications attributes and Independence of a Director.

The Board has constituted Nomination and Remuneration Committee as required underCompanies Act 2013.The Composition of the Committee is as under:

Name of the Member Designation
Ashish Lodha Chairman
Murari Lal Khandelwal Member
Akshay Goyal Member

Stakeholder Relationship Committee

The Board has constituted Stakeholder Relationship Committee as required underSecurities Exchange Board of India (Listing obligations and Disclosure Requirements)Regulations 2015 ("Regulations").

Name of the Member Designation
Ashish Lodha Chairman
Murari Lal Khandelwal Member
Akshay Goyal Member

Risk Management Policy

The Company has formulated a Risk Management Policy for dealing with different kinds ofrisks which it faces in day to day operations of the Company. Risk Management Policy ofthe Company outlines different kinds of risks and risk mitigating measures to be adoptedby the Board. The Company has adequate internal control systems and procedures to combatthe risk. The Risk management procedure will be reviewed by the Audit Committee and Boardof Directors on time to time basis.

Vigil Mechanism

The Company has formulated a Whistle Blower Policy and has established vigil mechanismfor employees including Directors of the Company to report genuine concerns. Theprovisions of this Policy are in line with the provisions of the Section 177(9) of theCompanies Act 2013.

Confirmation Of Compliance On Prevention Of Sexual Harassment Of Women At Workplace

In order to prevent Sexual Harassment of Women at Workplace a new act "The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013"has been notified on 9th December 2013. Under the said Act every Company isrequired to set up an Internal Complaints Committee to look into complaints relating tosexual harassment at work place of any women employee.

The Company has adopted "Anti-Sexual Harassment Policy" constituted"Redressal Committee" as required under section 4 (1) of Sexual harassment ofwomen at work place (prevention prohibition and Redressal) Act 2013.

During the financial year under review the Company has not received any complaint.

Non-Applicability of Maintenance of Cost Records

The Central Government has not prescribed the maintenance of cost records under Section148(1) of the Act and Rules framed thereunder with respect to the Company's nature ofbusiness.

Conservation Of Energy Research And Development Technology Absorption ForeignExchange Earnings And Outgo Energy Conservation

Conservation of Energy

The Company has not carried any activities relating to the conservation of energy.

Technology Absorption

The Company has not acquired any technologies during the year under review.

Details of Foreign exchange earnings and outgo

Expenditure in foreign Currency NIL.

Earning in foreign currency NIL.

Director's Responsibility Statement

To the best of knowledge and belief and according to the information and explanationsobtained by them your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act 2013:

i. That in the preparation of the Annual Accounts for the year ended March 31 2020 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

ii. That the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2020 andof the profit of the Company for the year ended on that date;

iii. That the Directors have taken proper and sufficient care 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. That the annual accounts have been prepared on a going concern basis;

v. That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

vi. That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

Acknowledgement

On behalf of the Board we would like to thank the management and staff of ASLIndustries Limited who have worked hard for the growth and future of the Company. Weextend our heartfelt gratitude to our Customers for their continued faith in our productsand our business partners for their support to our business. Finally we thank ourShareholders for the trust and confidence they have placed in us. With your belief in uswe are confident of keeping up the growth momentum and report even better results in theyears to come.

For and on behalf of the Board of Directors

For ASL Industries Limited
SD/- SD/-
Ankit Goyal Dilip Kumar Goyal
Managing Director & CFO Director
DIN: 00963125 DIN: 00033590
DATE: 30.06.2020
PLACE: Jamshedpur