The Board of Directors (Board) presents the annual report of Amal Ltd together with the audited Financial Statements for the year ended on March 31, 2024.
01. Financial results
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Rs. in Lakhs
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Standalone
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Consolidated
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2023-24
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2022-23
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2023-24
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2022-23
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Revenue from operations
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3,133
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3,916
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8,609
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6,132
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Sales and other income
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3,337
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4,319
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8,627
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6,215
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Profit | (loss) before tax
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345
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137
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278
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(1,569)
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Provision for tax
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103
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64
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107
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42
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Profit | (loss) for the year
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243
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73
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170
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(1,611)
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Other comprehensive income (net of tax)
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0
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3
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(0)
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3
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Total comprehensive income | (expense)
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243
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76
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170
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(1,608)
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Balance brought forward
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288
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212
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(1,539)
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69
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Balance carried forward
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531
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288
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(1,388)
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(1,539)
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02. Performance
Standalone revenue for the year at ' 3,133 lakhs decreased by 20% compared to that of last year. The decline was the outcome of decrease in price realisation by 28% and increase in volume by 8%. PBT at ' 345 lakhs increased by 152% mainly because of decrease in input prices.
Consolidated revenue for the year at ' 8,609 lakhs increased by 40% compared to that of last year. The increase was the outcome of full year of operations of Amal Speciality Chemicals Ltd. The Company earned a profit before tax of ' 278 lakhs during the year. As a result, the consolidated loss for the year stood at ' 1,388 lakhs, compared to that of ' 1,539 lakhs last year.
03. Dividend
The Board did not recommend any dividend considering the loss of ' 1,388 lakhs on a consolidated basis.
04. Energy conservation, technology absorption and foreign exchange earnings and outgo
Information required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended from time to time, forms a part of this report which is given on page number 14.
05. Insurance
The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third-parties.
06. Risk management
Risk management is an integral part of the business practices of the Company. The framework of risk management concentrates on formalising a system to deal with the most relevant risks, building on existing management practices, knowledge and structures. With the help of a reputed international consultancy firm,
the Company has developed and implemented a comprehensive risk management system to ensure that risks to the continued existence of the Company as a going concern and to its growth are identified and remedied on a timely basis. While defining and developing the formalised risk management system, leading standards and practices have been considered. The risk management system is relevant to the business reality, is pragmatic and simple and involves the following:
a) Risk identification and definition -Focuses on identifying relevant risks, creating | updating clear definitions to ensure undisputed understanding along with details of the underlying root causes | contributing factors.
b) Risk classification - Focuses on understanding the various impacts of risks and the level of influence on their root causes. This involves identifying various processes, generating the root causes and a clear understanding of risk inter-relationships.
c) Risk assessment and prioritisation -Focuses on determining risk priority and risk ownership for critical risks. This involves the assessment of the various impacts taking into consideration the risk appetite and the existing mitigation controls.
d) Risk mitigation - Focuses on addressing critical risks to restrict their impact(s) to an acceptable level (within the defined risk appetite). This involves a clear definition of actions, responsibilities and milestones.
e) Risk reporting and monitoring - Focuses on providing to the Audit Committee and the Board, periodic information on risk profile evolution and mitigation plans.
Roles and responsibilities
Governance
The Board has approved the Risk Management Policy of the Company. The Company has laid down procedures to inform the Board on a) to d) listed above. The Audit Committee periodically reviews the risk management system and gives its recommendations, if any, to the Board.
The Board reviews and guides the Risk Management Policy.
Implementation
Implementation of the Risk Management Policy is the responsibility of the Management. It ensures the functioning of the risk management system as per the guidance of the Audit Committee. The Company has a risk management oversight structure in which each sub-segment has a Chief Risk and Compliance Officer.
The Management at various levels takes accountability for risk identification, appropriateness of risk analysis and timeliness as well as the 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.
As per the requirements of Rule 3(1) of the Companies (Accounts) Rules 2014, the Company uses only such accounting software for maintaining its books of account that records the audit trail of all the transactions, creates an edit log of all the changes made in the books of account along with when such changes are made and by whom. This feature of recording the audit trail has operated throughout the year and was not tampered with during the year.
In respect of the aforesaid accounting software, after thorough testing and validation, the audit trail was not enabled for direct data changes at the database level in view of the possible impact on the efficient performance of the system. In respect of audit trail at the database level, the Company has established and maintained an adequate internal control framework over its financial reporting and based on its assessment, concluded that the internal controls for the year ended on March 31, 2024, were effective. It is in the process of upgrading the system to meet the database level audit trail requirement and expects to implement this from May 01, 2024.
07. Internal financial controls
The internal financial controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Financial Statements. These include those policies and procedures that:
a) pertain to the maintenance of records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company,
b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Financial Statements in accordance with Generally Accepted Accounting Principles and that receipts and expenditures are being made only in accordance with authorisations of the Management and the Directors of the Company,
c) provide reasonable assurance regarding the prevention or timely detection of unauthorised acquisition, use or disposition of the assets that can have a material effect on the Financial Statements. A reputed international consultancy firm has reviewed the adequacy of the internal financial controls with respect to the Financial Statements.
The Management assessed the effectiveness of the internal financial controls over financial reporting as of March 31, 2024, and the Board believes that the controls are adequate.
08. Fixed deposits
During 2023-24, the Company did not accept any fixed deposits.
09. Loans, guarantees, investments and security
Particulars of loans, guarantees, investments and security provided are given on page numbers 96 and 97.
10. Subsidiary, joint venture and associate company
Amal Speciality Chemicals Ltd has been classified as the material subsidiary in accordance with the applicable provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). There were no other changes in the subsidiary, joint venture and associate company which were reported earlier.
11. Related party transactions
All the transactions entered into with the related parties were in the ordinary course of business and on an arm's length basis. During 2023-24, material-related party transactions, in terms of the Listing Regulations, were approved by the members. Details of such transactions are given on page number 109. No transactions were entered into by the Company that required disclosure in Form AOC-2.
12. Corporate social responsibility
The Corporate Social Responsibility (CSR) Policy, the CSR Report and the composition of the CSR Committee are given on page number 14.
13. Annual return
Annual return is available on the website of the Company at:
www.amal.co.in/investors/information-for-
stakeholders/annual-general-meeting
14. Auditors Statutory Auditors
Deloitte Haskins & Sells LLP, Chartered Accountants were reappointed as the Statutory Auditors of the Company at the 48th Annual General Meeting (AGM) held on September 08, 2022, until the conclusion of the 53rd AGM.
The Auditor's Report for the financial year ended on March 31, 2024, does not contain any qualification, reservation or adverse remark. The report is enclosed with the Financial Statements in this annual report.
Secretarial Auditors
SPANJ & Associates, Company Secretaries, continue to be the Secretarial Auditors for 2023-24 and their report is given on page number 18. The Secretarial Audit Report of Amal Speciality Chemicals Ltd, the material subsidiary is also given on page number 21.
15. Directors' responsibility statement
a) In preparation of the annual accounts for the financial year that ended on March 31, 2024, the applicable accounting standards have been followed and there are no material departures.
b) The accounting policies were selected and applied consistently and judgements and estimates thus made 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.
c) 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.
d) The attached annual accounts for the year ended March 31, 2024, were prepared on a going concern basis.
e) Adequate internal financial controls to
be followed by the Company were laid down and they were adequate and operating effectively. This is given under para number 7.
f) Proper systems were devised to ensure compliance with the provisions of all applicable laws and the same were adequate and operating effectively.
16. Directors
16.1 Appointments | Reappointments | Cessations
a) According to the Articles of Association of the Company, Mr Sunil Lalbhai retires by rotation and being eligible offers himself for reappointment at the AGM scheduled on September 05, 2024.
b) Ms Dipali Sheth, Ms Drushti Desai and Mr Venkatraman Srinivasan were appointed as Independent Directors effective February 01, 2024, for a period of five years.
c) Mr Sujal Shah and Mr Abhay Jadeja, Independent Directors of the Company ceased to be a Director on March 31, 2024, on account of their compulsory retirement.
The Board places on record its deep appreciation for their valuable contribution through sustained involvement, critical analysis and insightful guidance.
In the opinion of the Board, Ms Dipali Sheth, Ms Drushti Desai and Mr Venkatraman Srinivasan, Independent Directors possess knowledge, experience and expertise relevant to the Company.
16.2 Policies on appointment and remuneration
The salient features of the Policy are as under:
16.2.1 Appointment
While recommending the appointment of the
Directors, the Nomination and Remuneration
Committee considers the following factors:
a) Qualification: well-educated and experienced in senior leadership positions in industry | profession. .
b) Traits: positive attributes and qualities.
c) Independence: criteria prescribed in the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Regulations), for the Independent Directors, including no pecuniary interest and conflict of interest.
16.2.2 Remuneration of the Non-executive Directors
a) Sitting fees: up to ' 40,000 for attending a Board, Committee and any other meeting
b) Commission: up to 1% of net profit as may be decided by the Board based on the following factors:
i) Membership of committee(s)
ii) Profit
iii) Attendance
iv) Category (Independent or Non- executive)
16.2.3 Remuneration of the Managing Director This is given under para number 17.2.
16.3 Criteria and method of annual evaluation
16.3.1 The criteria for evaluation of the performance of
a) the Executive Directors, b) the Non-executive Directors (other than Independent Directors), c) the Independent Directors, d) the Chairman, e) the Committees of the Board and f) the Board as a whole are summarised in the table at the end of the Directors' Report at page number 12.
16.3.2 The Independent Directors have carried out annual:
a) review of the performance of the Executive Directors
b) review of the performance of the Non-executive Directors (other than Independent Directors)
c) review of the performance of the Chairman, assessment of quality, quantity and timeliness of the flow of information to the Board and
d) review of the performance of the Board as a whole.
16.3.3 The Board has carried out an annual evaluation of the performance of:
a) its committees, namely, Audit, Corporate Social Responsibility, Nomination and Remuneration and Stakeholders Relationship
b) the Independent Directors
The templates for the above purpose were circulated in advance for feedback from the Directors.
16.4. Familiarisation programs for the Independent Directors
The Company has familiarisation programs for its Independent Directors. It comprises, amongst others, presentations by and discussions with the Senior Management on the nature of the industries in which it operates, its vision and strategy, its organisation structure and relevant regulatory changes.
17. Key Managerial Personnel and other employees
17.1 Appointments and cessations of the Key Managerial Personnel
There were no appointments | cessations of the Key Managerial Personnel during 2023-24.
17.2 Remuneration
The Remuneration Policy of the Key Managerial Personnel and other employees consist of the following:
17.2.1 Components:
a) Fixed pay
i) Basic salary
ii) Allowances
iii) Perquisites
iv) Retirals, and
b) Variable pay
17.2.2 Factors for determining and changing fixed pay:
a) Existing compensation
b) Education
c) Experience
d) Salary bands
e) Performance
f) Market benchmark
17.2.3 Factors for determining and changing variable pay:
a) Company performance
b) Business performance
c) Individual performance
d) Work level
18. Analysis of remuneration
The information required pursuant to Sections 134(3)(q) and 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given on page number
25.
The Company is not required to disclose the information required as there were no employees during 2023-24, drawing remuneration exceeding the limit specified.
19. Management Discussion and Analysis
The Management Discussion and Analysis covering performance is given on page number
26.
20. Corporate Governance Report
20.1 Declaration given by the Independent Directors
The Independent Directors have given declarations under Section 149(6) of the Act.
20.2 Report
The Corporate Governance Report is given on page number 27. Details about the number of
meetings of the Board held during 2023-24, are given on page number 32. The composition of the Audit Committee is given on page number 36.
All the recommendations given by the Audit Committee were accepted by the Board.
20.3 Whistleblower Policy
The Board, on the recommendation of the Audit Committee, had approved a vigil mechanism (Whistleblower Policy). The Policy provides an independent mechanism for reporting and resolving complaints pertaining to unethical behaviour, actual or suspected fraud and violation of the Code of Conduct of the Company and is displayed on the website of the Company at www.amal.co.in/investors/ policies/
No personnel has been denied access to the Audit Committee.
20.4 Secretarial standards
Secretarial standards as applicable to the Company were followed and complied with during 2023-24.
20.5 Prevention, prohibition and redressal of sexual harassment
Details required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and rules thereunder are given on page number 40.
21. Acknowledgements
The Board expresses its sincere thanks to all the employees, customers, suppliers, lenders, regulatory and government authorities, stock exchanges and investors for their support.
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