DIRECTORS' REPORTTo the Members,Your Directors have pleasure in presenting the 74th Annual Report on the business and operations of the Company together with Audited Statements of Accounts for the financial year ended 31st March, 2015. DIVIDEND Your Directors are pleased to recommend dividend of Rs.5/- per Equity Share of Rs.10/- each (i.e. 50%) for the year ended 31st March, 2015, the same as paid last year. OPERATIONS • During the year under review, the revenue from operations declined to Rs.4,956.11 lacs as against Rs.5,493.52 lacs in the previous year. The revenue from operations is low mainly on account of low volumes at Dairy Division and slow real estate off-take; • The operating profit (EBIDTA) recorded during the year was higher by 34.87% at Rs.1,690.51 lacs as against Rs.1,253.40 lacs in the previous year. The net profit after tax for the year was Rs. 1,091.25 lacs as against Rs. 886.09 lacs in the previous year; • The production of dairy milk & milk products during the year was 6,494 KL as against 8,041 KL in the previous year, a decline of 19.24%. There has been a decline in production across all product categories, particularly in flavoured milk as the Mother Dairy has put-up its own facility for processing of flavoured milk and our arrangement with them has ceased for the time-being. The raw milk prices which were relatively stable in the initial period of the year started declining from the third quarter. The costs of other inputs, mainly relating to plant maintenance, were higher for better upkeep of the Plant. The packaging capacity was augmented with the addition of one imported packaging machine. Dairy Division is now focussing on high value specialty products which are being developed for various FMCG companies; • During the year, the real estate business recorded turnover of Rs.320.06 lacs as against Rs. 722.45 lacs in the previous year. The profit before tax in the real estate business was Rs.203.94 lacs during the year against Rs. 489.09 lacs in the previous year; • In the Services segment, the Company provides business advisory and BPO services to the group companies as well as trading in commodities; • The Company has deployed funds in treasury operations. The Other Income during the year was Rs.1,491.38 lacs as against Rs. 1,237.13 lacs in the previous year recording an increase of 20.55%. The Management Discussion & Analysis Report on these businesses for the year ended 31st March, 2015 also appears as a separate statement in the Annual Report. FINANCE (i) Share Capital The paid-up Equity Share Capital as on 31st March, 2015 was Rs.321.32 lacs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. (ii) Fixed Deposits The Company has discontinued the public deposit scheme in terms of the provisions of Section 73 of the Companies Act, 2013 and repaid all outstanding deposits amounting to Rs. 202.02 lacs together with accrued interest thereon, before 31st March, 2015. There are no fixed deposits remaining unpaid/unclaimed with the Company as on 31st March, 2015 nor there was any default in repayment of deposits or payment of interest thereon during the year. (iii) Particulars of loans, guarantees or investments Particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements. ASSOCIATE/JV COMPANIES Amrit Banaspati Company Ltd. ("ABCL"), an associate company, recorded revenue from trading operations of Rs. 4,086.40 lacs and profit before tax of Rs. 841.59 lacs, including income from treasury operations. The Company has sold the entire shareholding of M/s Amrit Digvijay Infra-Tech Pvt.Ltd., joint venture company since it decided to abandon the housing project at Dehradun due to land related issues. The JV Company has also repaid the unsecured loan together with interest obtained by it from the Company. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES The Company strongly believes in sustainable development which is beneficial for the society at large and to practice the corporate values through commitment to grow in socially and environmentally responsible way while meeting the interest of our stake-holders. The Company has formulated a Corporate Social Responsibility (CSR) Policy to undertake CSR initiatives as specified in Schedule VII of the Companies Act, 2013. The Company has constituted a robust and transparent governance structure to oversee the implementation of our CSR policy, in compliance with the requirement of Section 135 of the Companies Act, 2013. During the year, the Company has undertaken CSR initiatives in the areas of education, health, water and sanitation and also contributed directly to Prime Minister's National Relief Fund, National Mission for Clean Ganga and Swachh Bharat Kosh. The Company has established a CSR Trust, namely, "Amrit CSR Foundation" (ACF) for carrying on the CSR activities. Skill development and language training programmes for the unemployed youth from socially and economically backward sections of the society directly through ACF and/or in partnership with NGOs, so as to make them employable, will be a focus area of the CSR initiatives of the Company. The Company will also promote and sponsor the sanitation initiatives of the Govt. of India and actively participate in public health, water and education. BUSINESS RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. On the recommendation of the Risk Management Committee, the Board has adopted Risk Management Policy, which outlines the programme implemented by the Company to ensure appropriate risk management within its system and culture. The Risk Management Policy is also posted on the website of the Company. The Company's risk management programme comprises of a series of processes, structures and guidelines which assist the Company to identify, assess, monitor and manage its business risks, including any material changes to its risk profile. To achieve this, the Company has clearly defined the responsibility and authority of the Company's Board of Directors and of the Risk Management Committee to oversee and manage the risk management programme while conferring responsibility and authority on the Company's senior management to develop and maintain the risk management programme in light of the day to day needs of the Company. Regular communication and review of risk management practices provide the Company with important checks and balances to ensure the efficacy of its risk management programme. VIGIL MECHANISM/WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Company has formulated a Whistle Blower Policy to establish a vigil mechanism for directors and employees of the Company. The purpose and objective of this Policy is to provide a framework to promote responsible and secure whistle blowing. It protects the employees wishing to raise a concern about serious irregularities within the Company. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company. RELATED PARTY TRANSACTIONS No Related Party Transactions were entered into during the financial year 2014-15. All Related Party Transactions entered into in the past were on an arm's length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with promoters, directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interests of the Company at large. On the recommendation of the Audit Committee, the Board of Directors has adopted a policy on Related Party Transactions, which is also uploaded on the website of the Company (www.amritcorp.com ) under the head 'Investor Relations'. The Policy envisages the procedure governing related party transactions required to be followed to ensure compliance with the applicable laws and regulations as well as to ensure that the Related Party Transactions are managed and disclosed in accordance with the strict legal and accounting requirements. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms & conditions of the transactions. The statement is supported by a certificate from the CEO and CFO. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant and material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. DIRECTORS (i) Appointment The Board of Directors has appointed Shri Sujal Shah and Smt. Ketaki Sood as Additional Directors of the Company in the category of Independent Directors with effect from 24th February, 2015 to hold office as Directors upto the date of next Annual General Meeting of the Company. Shri Sujal Shah and Smt. Ketaki Sood, subject to approval of the shareholders in the next Annual General Meeting, are proposed for appointment as Independent Directors for a period of 5 years. Further details of the above Directors are given in the Corporate Governance Report as well as in the Notice of the Annual General Meeting being sent to the shareholders along with the Annual Report. (ii) Retirement by rotation In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Shri G.N.Mehra retires by rotation and is eligible for re-appointment. (iii) Declarations by Independent Directors All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. (iv) Board Evaluation In compliance with the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination & Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. (v) Nomination & Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. More details of the same are given in the Corporate Governance Report. (vi) Board Meetings During the year, five (5) Board Meetings and four (4) Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of the Section 134(3)(c) of the Companies Act, 2013: (i) That in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) That such accounting policies, as mentioned in the Financial Statements as 'Significant Accounting Policies' have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2015 and of the profit of the Company for the year ended on that date; (iii) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) That the annual financial statements have been prepared on a going concern basis; (v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; (vi) That proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. AUDITORS (i) Statutory Auditors M/s V.Sahai Tripathi & Co., Chartered Accountants, have been appointed as Statutory Auditors of the Company for a period of 3 years at the last annual general meeting held on 12th August, 2014 subject to ratification of their appointment by the members at every annual general meeting. The shareholders at the ensuing annual general meeting will consider ratification of the appointment of the Statutory Auditors. As required under Clause 41 of the Listing Agreement, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. (ii) Cost Audit The goods produced by the Company are not covered under cost audit and, therefore, pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Company is not required to maintain the cost audit records. (iii) 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 Company has appointed M/s RSM & Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure - B". CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO The information relating to conservation of energy, technology absorption and foreign exchange earnings & outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure - C". EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure - D". CORPORATE GOVERNANCE A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance pursuant to Clause 49 of the listing agreement with stock exchanges is annexed herewith as "Annexure - E". PERSONNEL Employee relations continued to be cordial throughout the year in the Company. The Directors express their appreciation for the contribution made by the employees to the operations of the Company during the year. PARTICULARS OF EMPLOYEES The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs.60 lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs.60 lacs during the financial year 2014-15. The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as "Annexure - F". ACKNOWLEDGEMENT Your Directors convey their sincere thanks to the various agencies of the Central Government, State Governments, Banks and other concerned agencies for all the help and cooperation extended to the Company. The Directors also deeply acknowledge the trust and confidence the shareholders and investors have placed in the Company. Your Directors also record their appreciation for the dedicated services rendered by the workers, staff and officers of the Company. For and on behalf of the Board N.K. BAJAJ Chairman & Managing Director May 13, 2015 Noida |