DIRECTORS' REPORT Dear Members, The Board of Directors (Board) presents the Annual Report of Amal Ltd together with the audited statement of accounts for the year ended March 31, 2015. Financial performance During 2014-15, net sales increased by 16% from Rs. 1,624 lacs to Rs. 1,882 lacs. The Company reported a loss of Rs. 63 lacs in 2014-15 against a profit of Rs. 43 lacs in 2013-14 from operations. Dividend The Board regrets its inability to recommend dividends due to carried forward losses. BIFR status Revised Draft Rehabilitation Scheme (DRS) submitted by the Company through IDBI Bank Ltd (Operating Agency) to the Board for Industrial and Financial Reconstruction (BIFR) was sanctioned by it as Modified Sanctioned Scheme (MS-13) on July 01, 2013. The Company has initiated actions as per MS-13. The Board has approved the proposed merger of the Company with Atul Ltd. A share swap ratio of 1 Equity share of face value of Rs. 10 each fully paid up of Atul Ltd for every 50 Equity shares of the face value of Rs. 10 each fully paid up of Amal Ltd has been approved at its meeting held on December 05, 2014 subject to BIFR and other statutory approvals. The appointed date of the proposed Scheme is April 01, 2014. The Company is in the process of submitting the Modified Draft Rehabilitation Scheme (MDRS) covering the proposed merger to the BIFR through the Operating Agency for obtaining their approval. Upon approval of the Scheme by the BIFR, effect of the Scheme will be given in the books of account. Conservation of energy, technology absorption, foreign exchange earnings and outgo This is given at page number 7. Insurance The Company has taken adequate insurance to cover the risks to its people, plant and machineries, buildings and other assets, profits and third parties. Risk Management The Management at various levels takes accountability for risk identification, appropriateness of risk analysis, and timeliness as well as adequacy of risk mitigation decisions at both individual and aggregate levels. It is also responsible for the implementation, tracking and reporting of defined mitigation plans, including periodic reporting to the Audit Committee and the Board. 08. Fixed deposits During 2014-15 the Company did not accept any fixed deposits. 09. Related Party Transactions Particulars of contracts or arrangements with related parties are given in the Notes to Accounts at page number 70. 10. Extract of Annual Return This is given on page number 7. 11. Auditors Haribhakti & Co LLP, the Statutory Auditors of the Company, will retire at the conclusion of the ensuing Annual General Meeting (AGM). They have given their consent to continue to act as the Auditors for 2015-16, if reappointed. The relevant notes forming a part of the accounts are self explanatory and give full information and explanation in respect of the observations made by the Auditors in their report. The Shareholders appointed R Nanabhoy & Co. as the Cost Auditors for 2015-16 on August 01, 2014. The Board appointed Nilesh A Pradhan & Co, Practising Company Secretary as the Secretarial Auditor for 2014-15 on April 25, 2014 and his report is given at page number 12. 12. Directors' responsibility statement Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors confirm this to the best of their knowledge and belief: 12.1 The applicable Accounting Standards were followed along with proper explanations relating to material departures in the preparation of the annual accounts. 12.2 The Accounting Policies were selected and applied consistently and judgments and estimates were made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period. 12.3 Proper and sufficient care was taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 12.4 The attached annual accounts for the year ended March 31, 2015 were prepared on a going concern basis as the Company has restarted its manufacturing operations at Ankleshwar and intends to expand and diversify its operations as per the proposal submitted to the BIFR. The Company is in the process of putting up the MDRS covering the proposed merger with Atul Ltd. 13. Directors 13.1 Appointments Reappointments Cessations 13.1.1 Subject to the approval of the Members in the AGM: i) Ms S Mahalakshmi was appointed by the Board as an Independent Director, effective August 05, 2014. ii) Mr T T P Shaheel was appointed by the Board as the Managing Director effective October 18, 2014 and he has resigned on July 11, 2015. iii) Mr P N Ogale was appointed by the Board as the Managing Director effective July 12, 2015. 13.1.2 According to Article 134 of the Articles of Association of the Company, Mr T R Gopi Kannan retires by rotation and being eligible, offers himself for reappointment at the forthcoming AGM scheduled on September 25, 2015. 13.1.3 During 2014-15 Mr V Koppaka resigned as the Managing Director effective October 18, 2014 and Mr N C Singhal resigned effective February 01, 2015. The Board placed on record appreciation of thier services. 13.2 Policies on appointment and remuneration 13.2.1 Appointment While recommending appointment of the Directors, the Nomination and Remuneration Committee considers the following factors: i) Qualification: well educated and experienced in senior leadership positions in industry profession ii) Traits: positive attributes and qualities iii) Independence: criteria prescribed in Section 149 (6) of the Companies Act, 2013 for the Independent Directors, including no pecuniary interest and conflict of interest 13.2.2 Remuneration of the Non-executive Directors Sitting fees of Rs. 20,000 for attending meeting of the Board and Rs. 10,000 for attending any meeting of the Committees thereof. 13.3 Criteria and method of annual evaluation 13.3.1 The criteria for evaluation of performance of a) the Non-independent Directors (Nonexecutive) b) the Independent Directors c) the Chairman d) the Committees of the Board e) the Board as a whole are summarised in the table at the end of the Directors' Report at page number 5. 13.3.2 The Independent Directors have carried out annual: i) Review of performance of the Non-independent Directors - Nonexecutive ii) Review of performance of the Chairperson iii) Assessment of quality, quantity and timeliness of the flow of information to the Board iv) Review of performance of the Board as a whole 13.3.3 The Board has carried out annual evaluation of performance of: i) Its Committees namely Audit, Nomination and Remuneration, Stakeholders Relationship ii) The Independent Directors The templates for the above purpose were circulated in advance for feedback of the Directors. In addition, the Chairman also held discussions with the Directors individually. 14. Key Managerial Personnel and other employees 14.1 Appointments and cessations of the Key Managerial Personnel 14.1.1 Mr V Koppaka ceased to be the Managing Director effective October 18, 2014 and Mr T T P Shaheel was appointed as the Managing Director effective October 18, 2014 up to July 11, 2015. 14.1.2 Mr P N Ogale was appointed as the Managing Director effective July 12, 2015. 14.1.3 Mr S R Kalra was appointed as the Chief Financial Officer effective October 16, 2014. 14.1.4 Mr A N Chhajer ceased to be the Company Secretary effective February 05, 2015. 14.2 Remuneration The Remuneration Policy of the Key Managerial Personnel and other employees is as under: 14.2.1 Components i) Fixed pay a) Basic salary b) Allowances c) Perquisites d) Retirals e) Reimbursements ii) Variable pay 14.2.2 Factors for determining and changing fixed pay i) Existing compensation ii) Education iii) Experience iv) Salary bands v) Performance 17.2 vi) Market benchmark 14.2.3 Factors for determining and changing variable pay i) Company performance ii) Individual performance iii) Grade 15. Analysis of remuneration A table containing information in accordance with the provisions of Sections 134 (3)(q) and 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given at page number 18. The Company is not required to disclose the information required pursuant to Sections 134 (3)(q) and 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time as there were no employee during 201415 16. Management Discussion and Analysis Management Discussion and Analysis Report covering performance, is given at page number 20. 17. Corporate Governance 17.1 Statement of declaration given by the Independent Directors The Independent Directors have given declarations under Section 149 (6) of the Mumbai Companies Act, 2013. July 11, 2015Report The Corporate Governance Report along with the certificate from the Statutory Auditors regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the Listing Agreements is given at page number 36. Details about the number of meetings of the Board held during 2014-15 are given at page number 23. The composition of the Audit Committee is given at page number 27. All the recommendations given by the Audit Committee were accepted by the Board 18. Safety, health and environment The Company accords high priority to safety, health and environment. It has its own effluent treatment plant at Ankleshwar designed to fully comply with the norms stipulated by the Gujarat Pollution Control Board. The treated water is discharged into common effluent discharge pipeline of Narmada Clean Tech Ltd. 19. Acknowledgements The Board expresses its sincere thanks toall the customers, employees, investors, lenders, suppliers, regulatory and Government authorities and the Stock Exchanges for their support For and on behalf of the Board of Directors S S Lalbhai Chairman Date : July 11, 2015 Place : Mumbai |