To the Members
Your Directors are pleased to present the 27th Annual Report together with the AuditedFinancial Statements of the Company for the year ended March 31 2020.
(Rs in lakh)
|Particulars ||Year ended March 31 2020 ||Year ended March 31 2019 |
|Revenue from Operations and Other Income ||141710.64 ||132659.98 |
|Finance Costs ||3588.47 ||3454.45 |
|Gross Profit after Finance Costs but before Depreciation and Taxation ||19245.63 ||15814.36 |
|Depreciation ||3151.06 ||2745.28 |
|Profit before Tax and Exceptional Items ||16094.57 ||13069.08 |
|Exceptional Items ||- ||- |
|Profit before Tax and after Exceptional Items ||16094.57 ||13069.08 |
|Provisions for Taxation ||2810.37 ||2814.58 |
|Tax expense of previous year (net) ||- ||5.58 |
|Deferred Tax ||1609.32 ||784.57 |
|Net Profit for the year ||11674.88 ||9464.35 |
|Other Comprehensive Income (Net of Tax) ||(88.24) ||(2.89) |
|TOTAL COMPREHENSIVE INCOME ||11586.64 ||9461.46 |
STATE OF COMPANY'S AFFAIRS
N R Agarwal Industries Limited is pleased to present record revenues and profit aftertax in 2019-20 which surpassed the best it had achieved in the previous financial year.During the year under review the company reported profitable growth as revenues increased6.58 per cent while EBIDTA increased 18.50 per cent and profit after tax strengthened23.36 per cent. The improvement in performance was also accompanied by an improvement inbusiness health. The company reported an increase in EBIDTA margin from 14.62% in 2018-19to 16.25% in 2019-20.
During the year under review the combined production from Packaging Board Writing& Printing paper and Copier stood at 338988 MT and the capacity utilization stood atan average of 93%. The Company is continuously focusing on improving operating andreducing costs with for better financial performance. The Company continues to enjoy thedominant position of being a world class quality manufacturer of Duplex Board in India.
The performance of the company was affected from the second half of March 2020 when thefirst signs of the Covid-19 pandemic began to become evident across India.
The packaging board which is almost 50% of our total production has good potential asit is used to package the essentials like pharmaceutical food cereals etc. However theother grades like writing and printing and copier may witness downward or no growth indemand with work from home practices online education systems and other digital platformstaking a lead due to the pandemic. However we are confident about our ability to managethis crisis through our financial stability our dealers and consumers our committedemployees and our quality of leadership.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments which affected the financial position ofthe Company between March 31 2020 and date of this report i.e. September 3 2020.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
There were four meetings of the Company's Board of Directors during the financial year2019-20.
TRANSFER TO RESERVES
There was no transfer made to the General Reserve.
In view of the ongoing covid crises and future expansion plans of the Company theBoard has not recommended any dividend for the financial year 2019-20.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri R N Agarwal Whole Time Director retires by rotation at the forthcoming AnnualGeneral Meeting and being eligible offers himself for re-appointment in terms of theprovisions of Section 152 of the Companies Act 2013. The Board at its meeting held onOctober 22 2019 has recommended the appointment of Shri Rohan Agarwal as the Whole TimeDirector for a period of three years from November 1 2019 to October 31 2022 subject tothe approval of the shareholders. The necessary resolution seeking approval of the membersfor the appointment of Shri Rohan Agarwal as Whole Time Director has been incorporated inthe notice of the forthcoming Annual General Meeting of the Company. Shri Ajay NairIndependent Director of the Company has resigned with effect from February 12 2020 due toother pre-occupations.
With a view to strengthen the Board and also to meet the regulatory requirements theBoard of Directors of the Company on the recommendation of Nomination and RemunerationCommittee appointed Shri S N Chaturvedi and Smt. Sunita Nair as Additional IndependentDirectors of the Company with effect from October 22 2019 and April 1 2020 to holdoffice for a period of five years. The said appointment is subject to the approval of themembers of the Company in General Meeting.
Apart from the above there has been no change with respect to the Directors and KeyManagerial Personnel during the year 2019-20.
INDEPENDENT DIRECTORS DECLARATION
The Company has received declarations from all Independent Directors that they meet thecriteria of independence as laid out in sub-section (6) of Section 149 of the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") as amended from time to time and there has been nochange in the circumstances which may affect their status as independent director duringthe year. In the opinion of the Board the independent directors possess appropriatebalance of skills experience and knowledge as required.
The primary objective of the Committee is to monitor and provide effective supervisionof the Management's financial reporting process to ensure accurate and timely disclosureswith the highest levels of transparency integrity and quality of financial reporting.There have been no instances of non-acceptance of any recommendation of the AuditCommittee.
The Committee members met four times during the year under review. Details of themeetings are given in the Corporate Governance Report including the Committee'scomposition.
The Company has adopted a Whistle Blower Policy dealing with any instance of fraud orany unethical or improper practices. A copy of this policy is available on the Company'swebsite. A copy of this policy prescribes adequate safeguards against the victimization ofemployees who avail of the mechanism and also provide direct access to the Audit CommitteeChairman. It is affirmed that no Company personnel has been denied access to the AuditCommittee. The Whistle Blower Policy (Vigil Mechanism) is uploaded on the Company'swebsite at http://www.nrail. com/company_policies.html.
PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS
The Nomination and Remuneration Committee is responsible for developing the competencyrequirements of the Board based on the industry and the Company's individual strategy.The Boards Composition Analysis reflects an in-depth understanding of the Company'sstrategies environment operations financial condition and compliance requirements.
The Nomination and Remuneration Committee conducts a gap analysis to refresh the Boardon a periodic basis inter-alia on a Director's appointment or re-appointment which isenvisaged every time. The Committee is also responsible for reviewing and vetting the CVsof potential candidates' vis--vis the requisite competencies and meeting potentialcandidates prior to making nomination recommendations to the Board. At the time ofappointment specific requirements for the position including expert knowledge expectedis communicated to the appointee.
CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES & INDEPENDENCE OF ADIRECTOR
The Nomination and Remuneration Committee has besides the requisite qualifications& experience formulated the criteria for determining positive attributes andindependence of Directors in terms of provisions of Section 178 (3) of the Act andRegulation 19 read with Part D of Schedule II of the Listing Regulations.
Independence: A Director will be considered as an Independent Director' if he/she meets with the criteria for Independent Director' as laid down in the Act andRegulation 16 (1) (b) of the Listing Regulations.
Other factors: A transparent Board nomination process is in place that encouragesthought experience knowledge perspective age and gender diversity. It is also ensuredthat the Board has an appropriate blend of functional and industrial expertise. Whilerecommending Director Appointments the Nomination and Remuneration Committee considersthe manner in which the individual function and domain expertise will contribute to theoverall skill-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 inter-personal relations and communication skills besidessoundness of judgment.
Independent Directors are also expected to abide by the Code for IndependentDirectors' as outlined in Schedule IV to the Act.
The Company has adopted the Nomination and Remuneration
Committee Charter which includes the Company's policy on Directors' appointment andremuneration besides the criteria for determining the qualifications positive attributesindependence of a Director and other matters provided under Section 178(3) of theCompanies Act 2013.
Pursuant to Section 178(4) of the Companies Act 2013 the Company also adoptedremuneration policy relating to remuneration for the Directors Key Managerial Personneland Senior Executives. The remuneration policy is attached as Annexure 1 and is alsoavailable on Company's website http://www.nrail.com/company_policies.html.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of ListingRegulations 2015 the Board has carried out the annual performance evaluation of its ownperformance as well as the evaluation of the working of its Committees. The criteria forperformance evaluation of the Board and committees included aspects such as compositionstructure effectiveness of Board and Committee processes etc. A separate exercise wascarried out to evaluate individual
Directors' performance including that of the Chairman & Managing Director and alsothe Whole Time Directors who were evaluated on parameters such as engagement levelcontribution independence of judgment safeguarding the Company interests and itsminority shareholders etc. The Board of Directors expresses its satisfaction with theevaluation process.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors hereby confirm and declare that:-
(i) in the preparation of annual accounts the applicable accounting standards had beenfollowed along with proper explanations relating to material departures;
(ii) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the financial year ended March 31 2020 and ofthe office profit of the Company for the year;
(iii) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) they had prepared the annual accounts on a going concern basis;
(v) they had laid down internal financial controls to be followed by the Company andsuch controls are adequate and operating
(vi) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such efficiently; systems are adequate and operating
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed. The reporton the Internal Financial Control issued by the Statutory Auditors of the Company underthe provisions of Companies Act 2013 is given elsewhere in the report.
DETAILS OF SUBSIDIARIES/ JOINT VENTURES/ ASSOCIATES
The Company does not have any subsidiary/ joint ventures/ associates.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on March 31 2020 as required under sub-section 3 ofSection 92 of the Companies Act 2013 in Form No. MGT 9 is attached as Annexure 2. Theextract of Annual Return in Form MGT- 9 as per provisions of the Act and Rules thereto isalso available on the Company's website at www.nrail.com.
AUDITORS' AND AUDITORS' REPORT a. Statutory Auditors
M/s. GMJ & Co. Chartered Accountants have been appointed as the StatutoryAuditors of the Company for a period of five years at the Annual General Meeting("AGM") of the Company held on September 20 2017 to hold till the conclusionof the 29th AGM of the Company to be held in the year 2022.
The Auditors' Report for the financial year ended March 31 2020 does not contain anyreservation or adverse remark.
During the year under review there were no instances of fraud reported by theauditors under Section 143(12) of the Companies Act 2013 to the Audit Committee or theBoard of Directors. b. Secretarial Auditors
Pursuant to the provisions of Section 204(1) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhad appointed Parikh & Associates Company Secretaries in-practice for the financialyear 2019-20 to undertake the Secretarial Audit of the Company. The Secretarial AuditReport is annexed herewith as Annexure 3.
The Secretarial Audit Report for the financial year ended March 31 2020 does notcontain any qualification reservation or adverse remark. c. Cost Auditors
N. Ritesh & Associates Cost Accountants have been appointed to conduct CostAudits for all the units of the Company for the year ending March 31 2020 in terms ofSection 148 of the Act read with Companies (Audit and Auditors) Rules 2014 and asrequired Cost Audit Report for the financial year 2018-19 was duly filed with Ministry ofCorporate Affairs Government of India on August 19 2019.
The Cost Audit of the Company for the financial year ended March 31 2020 was conductedby the said firm and the Report has been submitted to the Ministry of Corporate AffairsGovernment of India within the prescribed time.
TECHNOLOGY ABSORPTION ENERGY CONSERVATION & FOREIGN EXCHANGE EARNING & OUTGO
Particulars of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are given in Annexure 4 attachedand forms part of this Report.
PARTICULARS OF EMPLOYEES & RELATED DISCLOSURES
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 furnishedin Annexure 5.
The information required under Rule 5(2) and (3) of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided in the Annexure forming partof the Report. In terms of the first proviso to Section 136 of the Act the Report andAccounts are being sent to the Shareholders excluding the aforesaid Annexure. AnyShareholder interested in obtaining the same may write to the Company Secretary at theRegistered Office of the Company.
The Company has not accepted any deposits from public in terms of Section(s) 73 and/or74 of the Act.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
Details of loans guarantees investments covered under provisions of Section 186 ofthe Act are provided in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
Particulars of transactions with Related Parties' pursuant to Section 134(3)(h) of theAct read with Rule 8(2) of the
Companies (Accounts) Rules 2014 are given in Form AOC-2 and the same forms part ofthis report as Annexure 6.
There are no materially significant related party transactions made by the Company withpromoters key managerial personnel or other designated persons which may have potentialconflict with interest of the Company at large. The Board of Directors have approved apolicy on related party transactions which is placed on the Company's website at the weblink: http://www.nrail.com/ companypolicies.html.
Pursuant to Section 134(3)(n) of the Companies Act 2013 and relevant provisions ofListing Regulations the Company has adopted Risk Management Policy for identification andimplementation of Risk Mitigation Plan for the Company. The Company has laid downappropriate procedures to inform the Board about the risk assessment and minimizationprocedures. The Board periodically revisits and reviews the overall risk management planfor making desired changes in response to the dynamics of the business.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Section 135 of the Companies Act 2013 mandates every Company having a minimum networth threshold limit turnover or net profit as prescribed to constitute a CorporateSocial Responsibility Committee formulating a Corporate Social Responsibility Policy thatshall indicate activities to be undertaken by the Company as specified in
Schedule VII to the Companies Act 2013 and duly approved by the Board as well as fixthe amount of expenditure to be incurred on the activities and monitor the CSR Policy fromtime to time.
Since your Company falls within the minimum threshold limit it has constituted a CSRCommittee of the Board and formulated a CSR Policy. The focus areas of CSR Policy areeducation preventive health care sanitation environment and engagement. During thefinancial year 2019-20 the Company has spent a total amount of H 2.04 Crores towards CSRinitiatives. The CSR Report forming part of this Report is furnished in Annexure 7.
PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance policy for sexual harassment at workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment of women atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention
Prohibition and Redressal) Act 2013 and the rules there under for prevention andredressal of complaints of sexual harassment at workplace. Internal Complaints Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Allwomen employees (permanent contractual temporary trainees) are covered under thispolicy. No complaint on sexual harassment was received during the financial year 2019-20.
SUSTAINABILITY AND BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the Listing Regulations the Sustainability andBusiness Responsibility Report of the Company for the financial year ended March 31 2020is given in a separate section and forms part of this report.
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
The Corporate Governance Report and Management's Discussion & Analysis Report andthe Auditor's Certificate regarding compliance with conditions of Corporate Governanceforms part of the Annual Report.
The Company has paid the listing fees to BSE and NSE for the year 2020-2021.
INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE
The Board of Directors have adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 which isavailable on our website (http://www.nrail.com/ company_policies.html)
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.
There is a continuous effort to improve the working environment with focus on employeewell-being and capability building to enable them to perform at their best for theCompany. The Company develop leaders at global platforms at regular intervals as a part ofits commitment to engage and retain talent. The Company offers robust leadershipdevelopment efforts to hone employee skills and help keep the Company ahead of the curve.
People are the real strength of the Company while pursuing best-in-class performance.The Company is significantly increasing investment in its employees with training anddevelopment. NRAIL invests in training and knowledge at all levels in order to alignemployees with requirements on safety customer support market needs operationalexcellence technology upgradation process improvements innovation and behavioralcompetencies.
Your Directors place on record their deep appreciation of the employees at all levelsfor their hard work dedication and commitment. The enthusiasm and unstinting efforts ofthe employees have enabled the Company to remain an industry leader. Your Directors alsotake this opportunity to thank all the Shareholders Clients Dealers Vendors BanksGovernment and Regulatory Authorities for their continued support and confidence in theCompany's Management
| ||On behalf of the Board of Directors |
|Place: Mumbai ||R N AGARWAL |
|Date: September 3 2020 || |
Chairman & Managing Director