Board of Directors of your company takes great pleasure in presenting to you their40thAnnual Report and the audited statement of accounts for the year ended March 31 2020.
FINANCIAL PERFORMANCE SUMMARY (As per INDAS)
Rs in Lakhs
|A. FINANCIAL RESULTS: ||FY 2019-20 ||FY 2018-19 |
|Revenue for Operations (Excluding Taxes) ||33317.15 ||42617.30 |
|Total Expenditure ||32346.08 ||39484.40 |
|Operating Profit ||971.07 ||3132.90 |
|Other Income ||1038.17 ||1000.26 |
|Earnings before Interest Tax OCI Exceptional item || || |
|Depreciation and Amortization ||2009.24 ||4133.16 |
|Finance Cost ||18.53 ||14.41 |
|Cash Profit ||1990.71 ||4118.75 |
|Provision for Depreciation & Amortization ||522.62 ||528.61 |
|Profit before exceptional Item OCI and Tax ||1468.09 ||3590.14 |
|Exceptional item ||(135.40) ||(417.02) |
|Profit before tax (before OCI) ||1332.69 ||3173.12 |
|Provision for Tax (net) ||336.99 ||1086.63 |
|Profit after Tax (before OCI) ||995.70 ||2086.49 |
|Other comprehensive income (net of Taxes) ||(29.42) ||(72.81) |
|Total comprehensive income for the year ||966.28 ||2013.68 |
|Balance in P & L A/c brought forward from the previous year ||10583.47 ||9924.62 |
|Profit available for appropriation ||11549.75 ||11938.30 |
|B. APPROPRIATIONS: || || |
|Equity Dividend || || |
|Interim ||304.43 ||321.08 |
|Final ||802.70 ||802.70 |
|Tax on Dividend ||227.60 ||231.05 |
|Balance carried to retained earnings ||10215.02 ||10583.47 |
Note : - Figures are rounded off to nearest thousand & adjusted.
TRANSFER TO RESERVES
The Company has not transferred any amount to the General Reserve out of the amountavailable for appropriations.
Your Company has paid an Interim Dividend of 50% (Rs. 5/- per Equity Share) to theshareholders on February 20 2020.
The Board of Directors has recommended a Final Dividend of 50% (Rs 5/- per equityshare) to the Equity shareholders.
Thus the aggregate dividend for the year works out to 100% (Previous year 175%).
The said dividend if approved by the members would involve a total cash outflow ofRs. 671.45 lakhs (inclusive of Interim Dividend Final Dividend and Dividend DistributionTax thereon on Interim Dividend) for the FY 2019-20 and result in a payout of 69% of thecurrent profit after tax (Previous year 67%).
The paid up Equity Share Capital as on 31st March 2020 was Rs 608.86 lakhs (Previousyear Rs. 642.16 lakhs). During the year under review the Company has not issued anyshares.
During the year the Company bought back 333000 equity shares of Rs. 10 eachrepresenting 5.19% of total number of equity shares fully paid-up for an aggregate amountof Rs. 1998 lakhs (excluding taxes and transaction cost) at Rs. 600 per equity share. Theequity shares bought back were extinguished on 15th November 2019.
The bus segment has maintained its dominance in contributing to your company's revenueand profit. Proportion of bus division's revenue in total revenue of the company clocked83% during the year under review. Large portion of our workforce is operating in the bussegment at Goa. Revenue has shown decline as compared to last year mainly due to reductionin the volumes from Tata Motors and Tata Cummins. The sales is largely affected by subduedeconomic conditions and regulatory changes.
Your Company's Product Sales (with other income) for the financial year 2019-20 was Rs.343.55 Crores as against Rs. 436.18 Crores (including other income and excluding taxes) inthe preceding financial year. The Company's profit before tax during the financial year2019-20 was at Rs.13.33 Crores (after exceptional expense of Rs 1.35 Crores related to VRSand before other comprehensive income) as against Rs.31.73 Crores in the precedingfinancial year (after exceptional expense of Rs 4.17 Crores related to VRS and beforeother comprehensive income). Net profit after tax stood at Rs.9.66 Crores as compared toRs.20.14 Crores in the preceding financial year. During FY 2019-20 your Company sold5221 buses.
Operations of the Company and business overview have been discussed in greater detailin the 'Management Discussion and Analysis' forming a part of this report.
Bus Body Segment
Revenue from product sales in Bus Segment reduced by 13.00% at Rs. 276 Crores (net oftaxes and excluding other income) in FY 2019-20 as compared to Rs. 317 Crores in thepreceding financial year. In FY 2019-20 5221 buses were sold as compared to 5775 busesin preceding financial year which is decrease of 554 buses. Out of the 5221 buses soldduring the financial year 2019-20 1047 buses were towards Export Application which waslower by 46% as compared to the preceding financial year.
The reduction in Product Sales primarily owes to the reduction in volumes due tosubdued economic conditions in domestic and export markets BS-VI transition liquidityissue with retail dealers and lockdown announced by the Government for prevention ofCOVID-19 at the end of financial year.
Revenue from Press Segment decreased to Rs 57 Crores (net of taxes and excluding otherincome) in FY 2019-20 as compared to Rs 109 Crores in the preceding financial year.
This decrease in the revenue is a result of reduction in volume due to subdued economicconditions BS-VI transition liquidity issue with retail dealers change in axle loadnorms and lockdown announced by the Government for prevention of COVID-19 at the end offinancial year.
The employee cost stood at 13.26% of total revenue (net of taxes) notwithstandinggeneral increase in salaries VDA increase in the wages and reduction in sales value. Thestrength of permanent employees (excluding Graduate Trainees) reduced to 525 as on 31stMarch 2020 against 556 on 31st March 2019. Industrial Relations with staff and workmenacross the Plants at Goa Jejuri and Dharwad continue to be cordial.
CORPORATE SOCIAL RESPONSIBILITY
The key focus areas of the ACGL's CSR program are education (EDUNITY) empoweringtowards employability (UTKARSH) special Needs (UDAAN) for aiding & supporting specialchildren and Environment Sustainability. These projects are in accordance with ScheduleVII of the Companies Act 2013. The details thereof are stated in Annexure I of thisreport.
Brief outline of the CSR Policy:
In ACGL Corporate Social Responsibility (CSR) philosophy revolves around engagementsin socially relevant activities for the underprivileged sections of the society. TheCompany believes in inclusive growth to facilitate creation of a value-based and empoweredsociety through continuous and purposeful engagement with communities around its area ofoperations. Our commitment to CSR is focused on initiatives that make a constructivecontribution to the community and encourage sustainable development.
A policy on CSR has been formulated by the Corporate Social Responsibility Committee(CSR Committee) and adopted by the Board of Directors. The contents of this policy areavailable on the website of the Company.
Your Company is committed to allocate at least 2% of its average Net Profits madeduring the three immediately preceding financial years calculated in accordance with theprovisions of the Act and the Rules made thereunder towards Corporate SocialResponsibility projects. The Company would undertake one or more of the activities whichrelate to schedule VII of the Act as its projects for CSR activities.
Composition of the Committee:
As per Section 135 (1) of the Companies Act 2013 the Company has constituted aCorporate Social Responsibility Committee. The composition of the Committee as on date isas under:
|Dr. Vaijayanti Pandit ||Chairman |
|Mr. Shrinivas V Dempo ||Member |
|Mr. Yatin Kakodkar ||Member |
|Mr. O V Ajay ||Member |
The Annual Report on CSR activities for FY 2019-20 is annexed as "AnnexureA".
A separate section on Corporate Governance forming part of the Directors' Report andAuditors' certificate regarding compliance of conditions of Corporate Governance have beenincluded in the Annual Report.
Borrowings of the Company in the form of Cash Credits as at end March 2020 stood atRs. Nil (previous year Rs. Nil). Cash and bank balance including earmarked balances stoodat Rs.1173.28 lakhs (previous year Rs. 365.95 lakhs).
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment and Retirement of Directors:
During the year Mr. Aasif Huseini Malbari has been appointed as Additional (NonExecutive) Director on the Board of the Company effective July 8 2019. Pursuant to theprovisions of Section 161 of the Act and the Articles of Association of the Company Mr.Aasif Huseini Malbari vacates office and is eligible for appointment as Non-Executive/ NonIndependent Director of the Company whose office shall be liable to retirement byrotation.
All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulation 16(1) (b) of the Listing Regulations. In the opinion of the Board they fulfill theconditions of independence as specified in the Act and the Rules made there under and areindependent of the management.
In accordance with the provisions of Section 152 of the Act and the Articles ofAssociation of the Company Mr. Girish Wagh is liable to retire by rotation and iseligible for re-appointment.
Further the Board recommends the re-appointment of its Independent Director Mr.Shrinivas V Dempo who is liable to retire on September 11 2020 and has offered himself forre-appointment. Mr. Dempo is vastly experienced in diverse areas and adds tremendousvalue to the Board.
Members are requested to refer to Item No.3 4 and 5 of the Notice of the AnnualGeneral Meeting for details. Key Managerial Personnel: In terms of Section 203 of the ActThe following are the Key Managerial Personnel (KMP) of the Company;
|Sr. No Name of the KMP ||Designation |
|1 O V Ajay ||CEO & Executive Director |
|2 Raghwendra Singh Butola ||Chief Financial Officer |
|3 Manisha Naik Shirgaonkar (up to 24.11.2019) ||Company Secretary |
The Board of the Company has adopted Governance Guidelines on Board Effectiveness. TheGovernance Guidelines cover aspects related to composition and role of the Board Chairmanand Directors Board diversity definition of independence Director Term Retirement Ageand Committees of the Board. It also covers aspects relating to nomination appointmentinduction and development of Directors Director Remuneration and Subsidiary oversightCode of Conduct Board Effectiveness Review and Mandates of Board Committees.
Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee (NRC) is responsible for identifying anddeveloping competency requirements for the Board based on the industry and strategy of theCompany. Board composition analysis reflects in-depth understanding of the Companyincluding its strategies environment operations financial condition and compliancerequirements.
The NRC conducts a gap analysis and indulges in deliberations regarding successionplanning to refresh the Board on a periodic basis including each time a Director'sappointment or re-appointment is required. The Committee is also responsible for reviewingand vetting the CVs of potential candidates' vis--vis the required competencies andmeeting potential candidates prior to making recommendations of their nomination to theBoard. At the time of appointment specific requirements for the position includingexpert knowledge expected is communicated to the appointee.
Criteria for Determining Qualifications Positive Attributes and Independence of aDirector:
The NRC has formulated the criteria for determining qualifications positive attributesand independence of Directors in terms of provisions of Section 178 (3) of the Act andRegulation 19 read with Part D of Schedule II of the LODR.
Independence: In accordance with the above criteria a Director will be considered asan 'Independent Director' if he/she meets with the criteria for 'Independent Director' aslaid down in the Act and Regulation 16 (1)(b) of the LODR.
Qualifications: A transparent Board nomination process is in place that encouragesdiversity of thought experience knowledge perspective age and gender. It is alsoensured that the Board has an appropriate blend of functional and industry expertise.While recommending the appointment of a Director the NRC considers the manner in whichthe function and domain expertise of the individual will contribute to the overallskill-domain mix of the Board.
Positive Attributes: In addition to the duties as prescribed under the Act theDirectors on the Board of the Company are also expected to demonstrate high standards ofethical behavior strong interpersonal and communication skills and soundness of judgment.Independent Directors are also expected to abide by the 'Code for Independent Directors'as outlined in Schedule IV to the Act.
Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors:
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an annual evaluation of its own performance performance of the all theDirectors as well as the evaluation of the working of its Committees.
The NRC has defined the evaluation criteria procedure and time schedule for thePerformance Evaluation process for the Board its Committees and Directors.
The criterion for the performance evaluation of the Board of Directors includes aspectssuch as the Board of Directors' composition and structure and the effectiveness of theBoard processes information flow and functioning. The criteria for the performanceevaluation of the individual Directors includes aspects such as the Director'scontribution to our Board of Directors and Committee meetings including preparation onthe issues to be discussed meaningful and constructive contribution and input duringmeetings. In addition the Chairperson is evaluated on the key aspects of his role. Areason which the Committees of the Board were assessed included degree of fulfillment of keyresponsibilities adequacy of Committee composition and effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole. The NRC also reviewed the performance ofthe Board its Committees and of the Directors.
The Chairman of the Board provided feedback to the Directors on an individual basis asappropriate. Significant highlights learning and action points with respect to theevaluation were presented to the Board.
The Company has adopted a Remuneration Policy for the Directors Key ManagerialPersonnel and other employees pursuant to the provisions of the Act and ListingRegulations.
The philosophy for remuneration of Directors Key Managerial Personnel and all otheremployees of the Company is based on the commitment of fostering a culture of leadershipwith trust. The Remuneration Policy of the Company is aligned to this philosophy.
The NRC has considered the following factors while formulating the Policy:
i) The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;
ii) Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
iii) Remuneration to Directors Key Managerial Personnel and Senior Management involvesa balance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the Company and its goals.
It is affirmed that the remuneration paid to Directors Key Managerial Personnel andall other employees is as per the Remuneration Policy of the Company. Details of theRemuneration Policy are given in the Corporate Governance Report.
Board and Committee Meetings
The Meetings dates are circulated in advance to the Directors. During the year SixBoard Meetings and Four Audit Committee Meetings were convened and held. There have beenno instances during the year when recommendations of the Audit Committee were not acceptedby the Board.
Details of the composition of the Board and its Committees and of the Meetings held andattendance of the Directors at such Meetings are provided in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Act and the Listing Regulations.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultant including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring the financial year 2019-20.
Accordingly pursuant to Section 134 (3) (c ) and 134(5) of the Companies Act 2013the Board of Directors to the best of their knowledge and ability confirm that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
ii) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period;
iii) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv) They have prepared the annual accounts on a going concern basis;
v) They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively;
vi) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
(This does not include advances against supply of spare parts and scrap notappropriated against supply of goods or provision of services within a period of 365 daysfrom the date of acceptance of such advance).
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans/guarantees/investments have been disclosed in the financialstatements. The said loans/guarantees/investments are within the limits stipulated in theSection 186 (2) of the Companies Act 2013.
PARTICULARS OF EMPLOYEES AND REMUNERATION:
The information required under Section 197 (12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedas "Annexure B". The information required under Rule 5 (2) and (3) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedin the Annexure forming part of the Report.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGOINGS:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 of TheCompanies (Accounts) Rules 2014 is annexed as "Annexure C".
(1) Statutory Auditors
The Company had appointed M/s B S R & Co. LLP Chartered Accountants (ICAI firmregistration no. 101248W/W-100022) (BSR) as the Statutory Auditors of the Company for aperiod of 5 years commencing from the conclusion of 37th AGM till the conclusion of 42ndAGM to be held in the calendar year 2022
As per the amendment in the Act the appointment of BSR & Co. LLP is no longerrequired to be ratified at the Annual General Meeting.
(2) Cost Audit
Cost audit for the financial year 2019-20 is not applicable to the Company.
(3) 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 Board of Directorsof the Company had appointed Mr Shivaram Bhat a Practicing Company Secretary Membership no. 10454 to undertake the Secretarial Audit of the Company for FY 2019-20. TheReport of the Secretarial Auditor is annexed herewith as "Annexure D".
The Statutory Auditors' Report and the Secretarial Audit Report for the financial yearended March 31 2020 do not contain any qualification reservation adverse remark ordisclaimer.
The Institute of Company Secretaries of India had revised the Secretarial Standards onMeetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings(SS-2) with effect from October 1 2017. The Company has devised proper systems to ensurecompliance with its provisions and is in compliance with the same.
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to Section 124(5) of the Companies Act 2013 Unpaid Dividend amount of thecompany which remained unpaid or unclaimed for a period of seven years from the date ofsuch transfer has been transferred to the Investor Education and Protection Fund (IEPF)established under sub-section (1) of section 125.
Further in line with Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Rules 2016 ('Principal Rules') and General CircularNo.12/2017 dated October 16 2017 issued by MCA the Company has transferred the shares byway of 'corporate action' to the IEPF authority.
The details of Dividend and shares transferred to IEPF for the FY 2019-20 is givenbelow:
Details of the transfer/s to the IEPF made during the year:
|i. Amount of unclaimed/unpaid dividend (In Rs.) ||1548325 |
|ii. Corresponding shares (Nos) ||3150 |
THE EXTRACT OF THE ANNUAL RETURN FILED WITH MCA
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT 9 is annexed as"Annexure E".
Annual Return of the Company is uploaded on the Company's website at the web link:http://acglgoa.com/wp-content/uploads/2019/05/MGT-9-2019-v1_-24.4.19.pdf
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder. The Policy aims toprovide protection to employees at the workplace and prevent and redress complaints ofsexual harassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee known as the Prevention of Sexual Harassment(POSH) Committee to inquire into complaints of sexual harassment and recommendappropriate action.
The Company has not received any complaint of sexual harassment during the financialyear 2019-20.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a whistle blower policy to deal with instances of fraud andmismanagement if any. The details of this Policy are explained in the CorporateGovernance Report and also posted on the website of the Company. It is affirmed that nopersonnel of the Company has been denied access to the Audit Committee.
MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION
There are no material changes affecting the financial position of the Companysubsequent to the close of the Financial Year 2019-20 till the date of this report
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
However Members attention is drawn to the Statement on Contingent Liability formingpart of the Financial Statement.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were incompliance with the applicable provisions of the Companies Act 2013 ('the Act') and theListing Regulations.
Tata Motors Limited (TML) is a "Related Party" of the Company under ListingRegulations. The transactions with TML exceed the materiality threshold as prescribedunder regulation 23 of LODR. The Members at their 39th Annual General Meeting held onJune 27 2019 have accorded their approval to the Board of Directors to enter into suchmaterial contracts/arrangements/transactions with Tata Motors Limited for the financialyear 2019-20. Similarly a fresh approval is also sought for transactions for the nextfinancial year 2020-21.
Further Tata Cummins Private Limited (TCPL) exceeded the materiality threshold asprescribed under regulation 23 of LODR in FY 2019-20. Approval is also sought from themembers for entering to such material contracts/arrangements/transactions with TataCummins Private Limited for the next financial year FY 2020-21.
All Related Party Transactions are placed before the Audit Committee for approval.Prior omnibus approval of the Audit Committee is put in place for the transactions whichare repetitive in nature. A statement of all Related Party Transactions is placed beforethe Audit Committee for its review on a quarterly basis specifying the nature value andterms and conditions of the transactions.
The Board recommends both the ordinary resolutions related to material related partytransactions to the shareholders for their approval.
POLICY ON MATERIALITY AND DEALING WITH RELATED PARTY TRANSACTIONS
The Company has adopted a Related Party Transactions Policy in line with Notificationissued by SEBI on 9th May 2018 on SEBI LODR (AMENDMENT) Regulations 2018 whereinRegulation 23(1) required listed entities to formulate a policy on materiality of relatedparty transactions (RPT) and on dealing with related party transactions including clearthreshold limits duly approved by the board of directors.
The Policy has been approved by the Board on the recommendation of the Audit Committeeand is uploaded on the Company's website at the web link:http://acglgoa.com/wp-content/uploads/2019/Revised-Materiality-of-Related-Party-and-dealing-with-Related-Party-Transactions-policy.pdf.Details of the transactions with Related Parties are provided in the accompanyingfinancial statements. There were no transactions during the year which would require to bereported in Form AOC 2.
The Board has laid down a clear Risk Policy to identify potential business risks andinstall effective mitigation processes to protect Company's assets and business risks.Risk Assessment and minimization plan are reviewed by the Risk Management Committee of theBoard on a periodic basis.
Risk Management Committee meeting was held on May 10 2019 to discuss on EnterpriseRisk Management Plan with a Mitigation plan for 10 major Enterprise risks associated withthe Company.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report as required under Listing Regulations isprovided as an Annexure to this Report.
Your Directors would like to place on record their sincere appreciation for the supportand assistance extended by the Company's suppliers bankers and business associates. YourDirectors are thankful to the esteemed shareholders for their continued support and theconfidence reposed in the Company and its Management. The Directors wish to place onrecord their appreciation for the support and guidance provided by its parent companyTata Motors.
The Directors place on record their sincere thanks for the help and support receivedfrom Government of Goa and related Government and semi-Government agencies. Your Directorsacknowledge the unstinted service rendered by the employees of the Company at all levelstowards its overall success.
ANNEXURE A TO DIRECTORS' REPORT
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
|1 A brief outline of the Company's CSR Policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs ||ACGL has been an early adopter of Corporate Social Responsibility initiatives. In ACGL Corporate Social Responsibility (CSR) philosophy revolves around engagements in socially relevant activities for the under- privileged sections of the society. The Company believes in inclusive growth to facilitate creation of a value-based and empowered society through continuous and purposeful engagement of society around. Our commitment to CSR is focused on initiatives that make a constructive contribution to the community and encourage sustainable development. |
| ||A policy on CSR has been formulated by the Corporate Social Responsibility Committee (CSR Committee) and adopted by the Board of Directors. The contents and overview of CSR projects and programs along with the CSR policy are available on the website of the Company at the following web link http://acglgoa.com/up-content-of-the-CSR-Policy-Jan-2017.pdf |
|2 The Composition of the CSR Committee (As on 31st March 2020) ||Dr. Vaijayanti Pandit Chairman |
| ||Mr. Shrinivas V Dempo Member |
| ||Mr. Yatin Kakodkar Member |
| ||Mr. O V Ajay Member |
|3 Average net profit of the Company for last three financial years ||Rs 3250.56 Lakhs |
|4 Prescribed CSR Expenditure (not less than two percent of the amount as specified at item 3 above) ||Rs 65.02 Lakhs |
|5 Details of CSR spent for the financial year: || |
|a. Total amount spent for the financial year. ||Rs 4.47 Lakhs |
|b. Amount committed but unspent if any. ||Rs. 60.55 Lakhs |
|c. Manner in which the amount spent during the financial year is detailed below: ||Report annexed |
|6 In case the Company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof the Company shall provide the reasons for not spending the amount in its Board report ||The unspent amount of Rs. 1.53 lakhs for FY 2018-19 (Final milestone payment) on the project for "Promoting Education & Entrepreneurship for women" will be spend during FY 2020-21. |
|7 A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company ||The implementation and monitoring of CSR Policy is in compliance with CSR objectives and the Policy of the Company. |
The manner of the CSR amount spent during the financial year is detailed as follows:
(Amount in Lakhs)
|Sr. CSR Project identified No. ||Agency ||Amount given Directly OR through Implementing Agency ||Amount spent for the Project |
|1 Promoting Education among children distribution of School uniforms and laptops to meritorious students of Bhumika Higher Secondary Paryem Goa and Govt. High School Bhuimpal Goa ||Direct ||Direct ||Rs. 4.22 |
|2 Promoting Education among children distribution of School Note Books to poor and needy School students of School nearby Jejuri Pressing Unit Jejuri Pune ||Direct ||Direct ||Rs. 0.25 |
|Sub Total || || ||Rs. 4.47 |
The manner of the CSR amount allocated during the financial year is detailed asfollows:
(Amount in Lakhs)
|Sr. No. CSR Project identified ||Agency ||Amount given Directly OR through Implementing Agency ||Amount allocated for the Project |
|1 Promoting Education Employment& Entrepreneurship for Women imparting livelihood skills for Women with lower income group from Sattari Taluka ||Sambhav Foundation ||Sambhav Foundation ||Rs. 1.02 |
|2 Promoting Education Up-gradation of Computer Laboratory - Shri Hanuman Vidyalaya Valpoi Sattari Goa ||Direct ||Direct ||Rs. 9.19 |
|3 Promoting Education - Upgrading of facilities (construction of 2 classes in first floor) by Our Lady of Lourdes High School Valpoi Sattari Goa ||Direct ||Direct ||Rs. 15.79 |
|4 Promoting Education - Amenities for Science Laboratory and Library for Dada Jadhavrao Vidyalaya Jejuri Purandar Dist Pune ||Direct ||Direct ||Rs. 1.73 |
|5 Promoting Education - Computer Laboratory by Govt. High School Guleli Valpoi Sattari Goa ||Direct ||Direct ||Rs. 5.82 |
|6 Promoting Education - construction of School Class Room by Shri Bhumika Primary School Poriem Sakhali Goa. ||Direct ||Direct ||Rs. 9.44 |
|7 Promoting Education - Amenities for Science Laboratory and Library for Tagore Educational Institute Kothambe Pale Bicholim Goa. ||Direct ||Direct ||Rs. 2.28 |
|8 Promoting Education - construction of teaching class room with furniture by Sai Nursing Institute Sakhali Goa. ||Direct ||Direct ||Rs. 15.00 |
|9 Amount on hold for contingencies || || ||Rs. 0.28 |
|Sub Total || || ||Rs. 60.55 |
|Total || || ||Rs. 65.02 |
Note : 1. Out of an amount of Rs.3.83 Lakhs which had remained unspent towardsPromoting Education Employment & Entrepreneurship for women Rs. 2.30 Lakhs was spentduring FY 2019-20. The balance amount of Rs. 1.53 Lakhs (last milestone payment) shall bespent during FY 2020-21.
2. Out of an amount of Rs.3.37 Lakhs which remained unspent during FY 2018-19 towardsproviding 1 School bus for special children of Keshav Seva Sadhana has been spent duringFY 2019-20.
3. The unspent amount of Rs 60.55 Lakh approved by the CSR Committee and Board in themeeting held on 23rd January 2020 shall be spent on the allocated projects in FY2020-21.The process for finalization of suppliers / contractors is in progress and amount will bespent after the end of lockdown announced by government for prevention of COVID-19.
ANNEXURE B TO DIRECTORS' REPORT
[Pursuant to Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014]
1. The ratio of the remuneration of each Director to the median remuneration of theEmployees of the Company for the financial year:
(i) the expression "median" means the numerical value separating the higherhalf of a population from the lower half and the median of a finite list of numbers may befound by arranging all the observations from lowest value to highest value and picking themiddle one;
(ii) if there is an even number of observations the median shall be the average of thetwo middle values)
2. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
The ratio of remuneration of each Director to the Median Remuneration of all employeeswho were on the payroll of the Company for the full financial year and the percentageincrease in remuneration of the Directors during the financial year 2019-20 are givenbelow: (Also refer Corporate Governance Section on Remuneration to Directors for furtherdetails)
|Name of the Director ||Remuneration Paid FY19-20 ||Remuneration Paid in FY 18-19 ||Ratio to Median ||Percentage increase in Remuneration |
|Non- Executive Director @ || || || || |
|Mr. Shrinivas V Dempo ||390000 ||420000 ||0.69:1 ||-7.14% |
|Mr. R Pisharody (upto 28.7.18) ||Nil ||776000 ||- ||NA |
|Mr. Steven A Pinto ||1270000 ||1264000 ||2.26:1 ||0.47% |
|Mr. R Ramakrishnan (upto 28.7.18 ) ||Nil ||434000 ||- ||NA |
|Dr. Vaijayanti Pandit ||900000 ||649000 ||1.60:1 ||38.67% |
|Mr. Yatin Kakodkar ||1090000 ||997000 ||1.94:1 ||9.33% |
|Mr. Abhay Bawale (upto 27.06.19)* ||610000 ||750000 ||1.09:1 ||NA |
|Mr. Girish Wagh ||1020000 ||635000 ||1.82:1 ||60.63% |
|Mr. Rohit Srivastava* ||840000 ||185000 ||1.50:1 ||NA |
|Mr. Aasif Huseini Malbari (w.e.f. 8.7.19)* ||360000 ||- ||0.64:1 ||NA |
|CEO & Executive Director# || || || || |
|Mr. O V Ajay ||11935991 ||13975050 || ||-14.59% |
|Key Managerial Personnel $ || || || || |
|Mr. Raghwendra Singh Butola-CFO ||6841134 ||6572127 || ||4.09% |
|Ms. Manisha Naik Shirgaonkar - CS* (upto 24.11.19) ||622692 ||838017 || ||NA |
Incentive Remuneration for FY 2018-19 is included above if any paid in FY 2019-20.Similar principle is applied for the previous year's figures.
*Part of the year.
@ Remuneration paid to Non-Executive Directors includes sitting fees paid to themduring FY 2019-20 and Commission for FY 2018-19 paid in FY 2019-20. The Commission for theFY 2019-20 shall be paid in FY 2020-21. Similar principle is applied for the previousyear's figures. The remuneration to Non-Executive Directors is within overall limitsapproved by the shareholders and within the limits defined under the Companies Act 2013.
# On deputation from Tata Motors Limited Salary amount includes Deputation Chargespaid through Tata Motors (exclusive of taxes) and Incentive remuneration paid /payabledirectly by the company. The remuneration to Executive Director is within overall limitsapproved by the shareholders and within the limits defined under the Company Act 2013.
$ Remuneration payment to KMPs includes actual payment made during the financial year(including taxable perquisites performance linked pay non taxable reimbursements notcovered in taxable perquisites and excluding retiral benefits). Performance Linked Payment(PLP) for FY 2018-19 paid in FY 2019-20. The PLP for FY 19-20 will be paid in FY 20-21.
3. The percentage increase in the median remuneration of employees in the financialyear is 0.89% as compared to previous year's 2.70%. For calculation of medianremuneration 525 permanent employees (Staff and Associates) who were on the rolls of theCompany as on March 31 2020 are taken. The provision for long term settlement (underdiscussion) and bonus payable to the permanent workmen is not considered while computingmedian remuneration for the financial year 2019-20.
4. The number of permanent employees on the rolls of Company as on 31st March 2020 was525.
5. The explanation on the relationship between average increase in remuneration andCompany performance:
Remuneration of staff employees has a close linkage with the performance of the Companyand an Individual. The Performance Linked Payment (PLP) which is a variable component inthe remuneration for all the staff employees has a direct correlation with the Company'sand an individual's performance.
Remuneration of associate employees has a linkage with Long Term Settlement signedbetween trade union and management after every 3 years. The basis of Long Term Settlementis driven by the productivity of associate employees adherence to the terms agreed inpast Long Term Settlement and performance of their business segment. The Long TermSettlement is under negotiation with Union which is due from 1st April 2018 for the periodof 3 years.
6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
The Total Revenue (including other income and excluding taxes) of the Company for theyear 2019-20 was Rs. 343.55 crores. Profit before tax (after OCI and exceptional item)during 2019-20 was Rs.12.93 crores while Profit after Tax (after OCI and exceptionalitem) for the year stood at Rs.9.66 crores. The Company's performance and individualperformance for the relevant financial year is considered while approving the variable payand the increase in remuneration for the Key Managerial Personnel.
7. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto the rate at which the Company came out with the last public offer in case of listedcompanies:
The last public offer for the shares of the Company was a Right Issue made in the year2007 for 1481913 fully paid Equity Shares of Rs 10/- each at a Premium of Rs 465.00 pershare. The market price of the Equity Shares of the Company as on March 31 2020 was Rs293.70 for shares of face value of Rs. 10/- each a decrease of 47.55% in price over theperiod.
The market capitalization of the Company based on closing rates in stock exchange as atMarch 31 2020 is Rs.178.82 crores as against Rs. 359.58 crores as at March 31 2019 adecrease of 50.27 % during the year under review. The price earnings ratio of the Companyas at March 31 2020 is 18.58 as against 17.23 as at March 31 2019.
8. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The general increase in the salaries of staff other than the managerial personnel inthe financial year 2019-20 is 4% (this increase computed on the employees present in therolls of the company in FY 2018-19 and FY 2019-20). In addition Performance Link Pay (PLP)paid to the staff based on company and individual performance. There is an increase in theassociate workers wages due to change in VDA rates. The general increment given to eachindividual staff is based on the consumer inflation rate company performance andbenchmarked against a comparable basket of relevant companies in India. The Long TermSettlement is under negotiation with Union which is due from 1st April 2018 for the periodof 3 years. The basis of Long Term Settlement is driven by the productivity of associateemployees adherence to the terms agreed in past Long Term Settlement and performance oftheir business segment.
9. Comparison of each remuneration of the Key Managerial Personnel against theperformance of the Company:
The Total Revenue (including other income and excluding taxes) of the Company for theyear 2019-20 was Rs. 343.55 crores. Profit before tax (after OCI and exceptional item)during 2019-20 was Rs. 12.93 crores while Profit after Tax (after OCI and exceptionalitem) for the year stood at Rs.9.66 crores. Remuneration to the Key Managerial Personnel(KMPs) is reviewed in terms of the performance of the Company and accordingly a marketcompetitive increase in remuneration is provided to the KMPs.
10. The key parameters for any variable components of remuneration availed by theDirectors:
The variable component of Non-Executive Directors' remuneration consists of commission.In terms of the Shareholders' approval obtained at the Annual General Meeting held on June27 2019 commission is paid at a rate not exceeding 1% per annum of the profits of theCompany computed in accordance with the provisions of the Companies Act 2013. Thedistribution of commission among the Non-Executive Directors is recommended by theNomination and Remuneration Committee and approved by the Board. The commission isdistributed on the basis of their attendance and contribution at the Board and CommitteeMeetings as well as guidance provided to senior management other than at meetings.
The Company pays remuneration by way of commission/incentive remuneration as variablecomponent to the Managing Director/ Whole Time Director. Commission/ IncentiveRemuneration is calculated with reference to the net profits of the Company in aparticular financial year and is determined by the Board of Directors at the end of thefinancial year based on the recommendations of the Nomination and Remuneration Committeesubject to the overall ceilings stipulated in the Companies Act 2013 and approved by theshareholders. Specific amount payable as commission/incentive remuneration is based on theperformance criteria laid down by the Board which broadly takes into account the profitsearned by the Company for the year.
11. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year:
The highest paid Director is CEO & Executive Director. No employee has receivedremuneration in excess of the remuneration paid to CEO & Executive Director during theyear.
12. Affirmation that the remuneration is as per the Remuneration Policy of the Company:
It is affirmed that the remuneration paid is as per the Remuneration Policy forDirectors Key Managerial Personnel and other employees adopted by the Company.
ANNEXURE C TO DIRECTORS' REPORT
[Pursuant to Section 134 (3) (m) of The Companies Act 2013 read with Rule 8 (3) of TheCompanies (Accounts) Rules 2014]
A. Conservation of Energy
(i) Steps Taken or Impact on Conservation of Energy:
The Company has always tried to improve energy efficiency significantly. During theyear under review the steps taken to conserve energy include:
At its plants the company has carried out various actions to optimize energyconsumption and reduce losses.
Optimization of shifts done to reduce the power consumption.
In its Plants and Offices the company has replaced conventional light fixtureswith energy efficient fixtures such as LED lights and tubes.
Speed Control of Fan Motor for Air Balancing at Paint shop to reduce powerconsumption.
Compressed air leakages checked periodically for the necessary repairs which hadresulted in energy saving.
(ii) Steps taken by the Company for utilizing alternate sources of Energy:
The Company has always been conscious of the need for conservation of energy. Energyconservation measures have been implemented at all its plants.
Various workshop and awareness programs conducted for power usage reductionthrough general awareness like switching of lights fans and other electric equipmentduring lunch tea other breaks.
Provided Polycarbonate translucent sheets on the roof of manufacturing shopswhich enhances natural illumination and has resulted in power saving during the day time.
Close monitoring of energy consumption for necessary action in the relevantareas of high consumption.
(iii) Capital Investment on Energy Conservation Equipments:
The Energy Conservation Equipment are procured on the need basis. There was nosignificant capital investment made for Energy Conservation Equipment during the yearunder consideration.
B. Absorption of Technology
1 Efforts made towards Technology Absorption:
The Company has undertaken the following initiatives for Technology Absorption duringthe FY 2019-20.
Upgrading designing processes from 2D to 3D.
Implementation of new regulations like R-Pass AIS-153 GSO regulations for theupcoming models.
Development of new bus models for BS-VI.
Development of new model on ILCV chassis for staff application.
Design optimization using value engineering and best practices.
2 Benefits derived from R & D and future plan of action:
The company has received in-house R&D Recognition from the Department of Scientificand Industrial Research (DSIR) for a period of 3 years starting from October 28 2016which was further extended upto March 31 2022.
The company is focusing on the innovation and technology development to enhance thevalue of the products and manufacturing procedures in order to cater varied marketdemands.
3 In case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year):
4. Expenditure on Research and Development:
|a) Capital ||Rs. 9.57 lakhs |
|b) Recurring ||Rs. 197.60 lakhs |
|c) Total ||Rs. 207.17 lakhs |
|d) Total as a percentage of net turnover ||0.62% |
|(Excluding other income and taxes) || |
C. Foreign Exchange earnings and outgo:
|Earnings: ||i. On export of goods calculated on FOB basis - Rs. 30.63 Lakhs |
| ||ii. The Company has exported bus bodies and component parts thereof through a merchant exporter - |
| ||Rs. 8409.57 Lakhs (excluding taxes) |
|Outgo : ||i. Travelling expenses - Rs. 19.07 Lakhs |
| ||ii. Procurement of raw material - Rs. Nil |
|On behalf of the Board of Directors ||Place : Panaji Goa. |
|Shrinivas V Dempo ||Date : 28 May 2020 |
|Chairman || |