Amal Ltd Annual Report 2022-23
The logo of Amal Ltd is a diya whose constituents are an earthen pot, ghee, a wick and a flame. Our actions (symbolised by ghee) will remain within the boundary of ethics (symbolised by the earthen pot ) and we will through hard work (symbolised by the wick) achieve our purpose (symbolised by the flame). Contents Youmay have to fight a battlemore than once towin it. ~ Margaret Thatcher 1 Corporate profile 40 Notice 2 Purpose 53 Standalone performance trend 3 Values Standalone Financial Statements 4 Letter to the shareholders 54 Independent Auditor’s Report 5 Directors’ Report 66 Financial Statements 11 Annexure to the Directors’ Report Consolidated Financial Statements 20 Management Discussion and Analysis 119 Independent Auditor’s Report 21 Corporate Governance Report 128 Financial Statements Forward looking statements In this annual report, we have shared information and made forward looking statements to enable investors to know our product portfolio, business logic and direction and thereby comprehend our prospects. Such statements that we make are based on our assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘believe’, ‘estimate’, ‘intend’, ‘plan’, ‘project’ or words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward looking statements will be realised although we believe we have been prudent in our assumptions. The actual results may be affected because of uncertainties, risks and even inaccurate assumptions. If uncertainties or known or unknown risks materialise or if underlying assumptions prove inaccurate, actual results can vary materially from those anticipated, believed, estimated, intended, planned or projected. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise.
1 Corporate profile Amal Ltd is engaged in the manufacturing and marketing of bulk chemicals such as Sulphuric acid and Oleum and their downstreamproducts such as Sulphur dioxide and Sulphur trioxide. The plant is located in Ankleshwar, Gujarat, India. Amal Ltd was promoted by Piramal Group in 1974-75; the controlling interest of the Company was sold to Atul Ltd in 1985-86. The Company incorporated a wholly-owned subsidiary, Amal Speciality Chemicals Ltd (ASCL) on October 12, 2020. ASCL is engaged in the manufacturing and marketing of bulk chemicals such as Sulphuric acid 98%, Oleum 25%, Oleum 65% and liquid Sulphur trioxide. It has a production capacity of 300 tpd. It commissioned its manufacturing facility in the quarter ended on September 30, 2022.
Amal Ltd | Annual Report 2022-23 Purpose We are committed to significantly enhancing value for our stakeholders by: fostering a spirit of continuous learning and innovation adopting developments in science and technology providing high quality products and services, thus becoming the most preferred partner having people who practice Values and exemplify a high standard of behaviour seeking sustained, dynamic growth and securing long-term success taking responsible care of the surrounding environment improving the quality of life of the communities we operate in
3 Values In an environment where change is a way of life, continuity of Values provides stability and is fundamental to us. We have therefore formalised key Values and are committed to institutionalising them. We will seek to create an environment wherein these Values are consistently practised and nurtured and ensured that they are not compromised. INTEGRITY Working with honesty, following the highest standards of professionalism. Integrity is when our decisions and actions remain consistent with our thoughts and words, written or spoken. UNDERSTANDING How well we work with others depends on our ways to connect and this in turn is based on our level of Understanding of human relationships. This certainly does not mean that we accept poor performance, but that we do it the right way. Understanding is the external manifestation of internal realisation. UNITY Working together and taking advantage of synergy while harnessing the unique abilities of each of us to achieve a larger goal. Unity is the realisation that though we may work in different areas, we are finally interconnected and that interdependence is a higher order of living than independence. Though we may be many, we share a common purpose. RESPONSIBILITY Delivering value and taking ownership of actions. Responsibility must also give us the realisation that what is good for the business must be in the overall good. In essence, we must work with a spirit of trusteeship for the shareholders and other stakeholders. What comes to us must be returned many times over. EXCELLENCE A drive that is more from inside than outside; it is about us seeking to continuously improve and develop an eye for innovation even in day to day work. Excellence is about excelling in everything we do and not giving up. Excellence is also a journey, not simply a destination in itself.
Amal Ltd | Annual Report 2022-23 Letter to the shareholders Fellow shareholders, Our Company had a peak carried forward loss of ` 56 cr till 2007-08 – it was able to wipe out the last remaining loss of ` 0.29 cr in 2021-22. We were therefore hopeful that our Companywill be able to recommend a dividend in 2022-23 however, this was not to be; on the contrary, it incurred a loss at consolidated level of ` 16 cr because of the following two main reasons. One, on the one hand, the price of Sulphur remained high and on the other, the demand and consequently the prices of f inished products remained low. In 2022-23, the standalone sales of our Company at ` 39 cr came down from ` 43 cr and standalone PBT at ` 1.37 cr came down from ` 3.32 cr (which itself was much lower than the peak of ` 12.69 cr achieved in 2019-20). Two, Amal Speciality Chemicals, the only whollyowned subsidiary of our Company, commissioned a plant to manufacture 300 tpd equivalent Sulphuric acid products during Q2. It took us 12 months to overcome the problems related to technology and supply of steam. We were therefore unable to run the plant fully, and the subsidiary incurred a loss of ` 17 cr. The CapEx also went up from the earlier envisaged ` 71 cr to ` 96 cr mainly because of the increase in the price of steel | few modifications. In light of the above, we considered it prudent to increase the equity of our Company to better the debt equity ratio – after the rights issue of ` 49.94 cr, the debt has decreased by ` 36 cr. The promoter shareholding is up by four percentage points to 71%. During 2022-23, we debottlenecked the capacity of Sulphur dioxide, a key product, from 17 tpd to 28 tpd. Furthermore, we strengthened the management team and in all added (including for the new plant of Amal Speciality Chemicals) 15 team members. At full capacity, on a 12-month basis, our Company has the potential to deliver consolidated sales of ` 99 cr. For the first quarter of 2023-24, consolidated sales of our Company were at ` 17 cr (against sales of ` 11 cr in the same period of 2022-23) – sales were lower because of the annual shut down and also shut down because of somemodifications. Consolidated loss was ` 3 cr (against loss of ` 2 cr in the same period of 2022-23). Despite this, we expect our Company to do better in 2023-24. Our first priority is to run both the plants, one of our Company and the other of Amal Speciality Chemicals, most efficiently and productively and achieve high capacity utilisation. It will be our endeavour to repay the remaining debt at the earliest and become financially more resilient. We value the hard work and perseverance of every member of team Amal. We thank the customers for their business. We are grateful to the Independent Directors for their guidance and value addition. Within the coming 12 months, Mr Abhay Jadeja, Mr Sujal Shah and Ms Mahalakshmi Subramanian will step down as they complete their tenure. The Board will appoint new Independent Directors during 2023-24. Indeed, there was an adverse impact on the financials of our Company in 2022-23 and in the first quarter of 2023-24 mainly because of our own operating problems and to some extent lower demand. We are not only facing and overcoming the problems, but also articulating a project to emerge stronger. In all this, we thank you for your unstinted support. Sincerely, (Rajeev Kumar) (Sunil Lalbhai) Managing Director Chairman
5 Directors’ Report Dear Members, The Board of Directors (Board) presents the annual report of Amal Ltd together with the audited Financial Statements for the year ended March 31, 2023. 01. Financial results (` lakhs) Standalone Consolidated* 2022-23 2021-22 2022-23 2021-22 Revenue from operations 3,916 4,348 6,132 4,348 Sales and other income 4,319 4,530 6,215 4,379 Profit | (loss) before tax 137 332 (1,569) 162 Provision for tax 64 90 42 51 Profit | (loss) for the year 73 242 (1,611) 111 Other comprehensive income (net of tax) 3 (1) 3 (1) Total comprehensive income | (expense) 76 241 (1,608) 110 Balance brought forward 212 (29) 69 (40) Balance carried forward 288 212 (1,539) 69 * Consolidated results for 2022-23 and 2021-22 are not comparable because of the commencement of operations by Amal Speciality Chemicals Ltd (ASCL), a wholly-owned subsidiary in the quarter ended on September 30, 2022. 02. Performance Standalone During 2022-23, revenue from operations decreased by 10% (decrease in selling price by 8% and decrease in sales volume by 2%) from ` 4,348 lakhs to ` 3,916 lakhs. The Company reported profit before tax (PBT) of ` 137 lakhs in 2022-23 against PBT of ` 332 lakhs in 2021-22 on account of decrease in price realisation and volume due to sluggish demand. Consolidated Consolidated revenue fromoperations increased from ` 4,348 lakhs to ` 6,132 lakhs on account of sales from 300 tpd Sulphuric acid plant, commissioned in ASCL, a whol ly-owned subsidiary in the quarter ended on September 30, 2022. The consolidated loss is ` 1,569 lakhs against the standalone PBT of ` 137 lakhs. The negative PBT is on account of technology related problems (being resolved), lower utilisation | sale of steam and lower sales due to subdued demand and higher interest and depreciation. 03. Dividend Directors have not recommended dividend considering the loss of ` 1,611 lakhs on consolidated basis. 04. Rights issue of equity shares Dur ing 2022-23, the Company al lot ted 29,37,662 equity shares of ` 10 each at a premium of ` 160 per share aggregating to ` 4,994 lakhs on a rights basis to eligible shareholders. Post issue, equity share capital of the Company is ` 1,236.27 lakhs. 05. 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 12. 06. Insurance The Company has taken adequate insurance to cover the risks to its employees, property (land
Amal Ltd | Annual Report 2022-23 and buildings), plant, equipment, other assets and third parties. 07. 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 business reality, pragmatic and simple and involves the following: i) 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. ii) Ri sk c lass i f i cat i on - 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. iii) Risk assessment and prioritisation - Focuses on determining risk priority and risk ownership for critical risks. This involves assessment of the various impacts taking into consideration risk appetite and the existing mitigation controls. iv) 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. v) 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 i) to iv) 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 Implementationof theRiskManagement Policy is the responsibility of the Management. It ensures 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 accountab i l i t y fo r r i sk i dent i f i cat i on , 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 repor ting to the Audit Committee and Board. 08. 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
7 Statements. These include those policies and procedures that: i) pertain to the maintenance of records, which in reasonable detail, accurately and fai r ly ref lect the transact ions and dispositions of the assets of the Company, ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the Financial Statements in accordancewith 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, iii) provide reasonable assurance regarding the prevention or timely detection of unauthorised acquisition, use or disposition of the assets that can have a mater ial effect on the Financial Statements. A reputed international consultancy firm has reviewed the adequacy of the internal f inancial controls with respect to the Financial Statements. The Managemen t assessed t he effectiveness of the internal financial controls over financial reporting as of March 31, 2023, and the Board believes that the controls are adequate. 09. Fixed deposits During 2022-23, the Company did not accept any fixed deposits. 10. Loans, guarantees, investments and security Particulars of loans, guarantees, investments and security provided are given on page numbers 86. 11. Subsidiary, joint venture and associate company There were no changes in the subsidiary, joint venture and associate company, which were reported earlier. 12. Related party transactions All the transactions entered into with the related parties were in ordinary course of business and on an arm’s length basis. Details of such transactions are given on page number 99. No transactions were entered into by the Company that required disclosure in Form AOC-2. 13. Corporate social responsibility The Corporate Social Responsibility (CSR) Policy, the CSR Report and the composition of the CSR Committee are given on page number 12. 14. Annual return Annual return for 2022-23, is available on the website of the Company at www.amal.co.in/investors/information-forstakeholders/annual-general-meeting 15. Auditors Statutory Auditors Deloi tte Haskins & Sel ls LLP, Char tered Accountants (DHS) 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 March 31, 2023, does not contain any qualification, reservation or adverse remark. The report is enclosedwith the Financial Statements in this annual report. Secretarial Auditors SPANJ & Associates, Company Secretaries, continue to be the Secretarial Auditors for 2022-23 and their report is given on page number 16. 16. Directors’ responsibility statement 16.1 In preparation of the annual accounts for the financial year ended March 31, 2023, the
Amal Ltd | Annual Report 2022-23 applicable accounting standards have been followed and there are no material departures. 16.2 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. 16.3 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. 16.4 The attached annual accounts for the year ended March 31, 2023, were prepared on a going concern basis. 16.5 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 08. 16.6 Proper systems were devised to ensure compliance with the provisions of all applicable laws and the same were adequate and operating effectively. 17. Directors 17.1 Appointments | Reappointments | Cessations 17.1.1 According to the Articles of Association of the Company, Mr Gopi Kannan Thirukonda retires by rotation and being eligible, offers himself for reappointment at the AGM scheduled on September 08, 2023. 17.2 Policies on appointment and remuneration 17.2.1 Appointment While recommending appointment of the Directors, the Nomination and Remuneration Committee considers the following factors: i) Qual i f i cat ion: wel l -educated and experienced in senior leadershippositions 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 17.2.2 Remuneration of the Non-executive Directors i) Sitting fees: up to ` 30,000 for attending a Board, Committee and any other meeting ii) Commission: up to 1% of net profit as may be decided by the Board based on the following factors: a) Membership of committee(s) b) Profit c) Attendance d) Category (Independent or Nonexecutive) 17.2.3 Remuneration of the Managing Director This is given under para number 18.2. 17.3 Criteria and method of annual evaluation 17.3.1 The criteria for evaluation of the performance of i) the Executive Directors, ii) the Non-executive Directors (other than Independent Directors), iii) the Independent Directors, iv) the Chairman, v) the Committees of the Board and vi) the Board as a whole are summarised in the table at the end of the Directors’ Report at page number 10. 17.3.2 The Independent Directors have carried out annual: i) review of the per formance of the Executive Directors ii) review of the per formance of the Non-executive Directors (other than Independent Directors) iii) reviewof theperformanceof theChairman,
9 assessment of quality, quantity and timeliness of the flow of information to the Board and iv) review of the performance of the Board as a whole. 17.3.3 The Board has carried out an annual evaluation of the performance of: i) its committees namely Audit, Corporate Social Responsibility, Nomination and RemunerationandStakeholdersRelationship ii) the Independent Directors The templates for the above purpose were circulated in advance for feedback of theDirectors. 17.4 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 SeniorManagement on thenatureof the industries in which it operates, its vision and strategy, its organisation structure and relevant regulatory changes. 18. Key manager ial personnel and other employees 18.1 Appointments and cessations of the key managerial personnel There were no appointments | cessations of the key managerial personnel during 2022-23. 18.2 Remuneration The Remuneration Policy of the key managerial personnel and other employees consists of the following: 18.2.1 Components: i) Fixed pay a) Basic salary b) Allowances c) Perquisites d) Retirals ii) Variable pay 18.2.2 Factors for determining and changing fixed pay: i) Existing compensation ii) Education iii) Experience iv) Salary bands v) Performance vi) Market benchmark 18.2.3 Factors for determining and changing variable pay: i) Business performance ii) Individual performance iii) Work level 19. 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 at page number 19. The Company is not required to disclose the information required as therewere no employees dur ing 2022-23 drawing remunerat ion exceeding the limit specified. 20. Management Discussion and Analysis The Management Discussion and Analysis cover ing per formance is given at page number 20. 21. Corporate Governance Report 21.1 Declaration given by the Independent Directors The Independent Di rectors have given declarations under Section 149(6) of the Act. 21.2 Report The Corporate Governance Report is given at page number 21. Details about the number of
Amal Ltd | Annual Report 2022-23 meetings of the Board held during 2022-23 are given at page number 26. The composition of the Audit Committee is given at page number 29. All the recommendations given by the Audit Committee were accepted by the Board. 21.3 Whistleblowing Policy The Board, on the recommendation of the Audi t Commi t tee, had approved a vigi l mechanism (Whistleblowing Pol icy). 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. 21.4 Secretarial standards Secretarial standards as applicable to the Company were followed and complied with during 2022-23. 21.5 Prevention, prohibition and redressal of sexual harassment Details required under the Sexual Harassment ofWomen atWorkplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder are given at page number 33. 22. 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. For and on behalf of the Board of Directors (Sunil Lalbhai) Mumbai Chairman April 20, 2023 DIN: 00045590 Evaluation of Evaluation by Criteria Executive Director Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Transparency, Communicat ion, Business leadership, People leadership, Investor relations Non-executive Director (other than Independent Directors) Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Independence, Communication, Preparedness, Participation and Value addition Independent Director All other Board Members Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Independence, Communication, Preparedness, Participation and Value addition Chairman Independent Directors Qualification, Experience, Availability and attendance, Integrity, Commitment, Governance, Impartiality, Communicat ion, Business leadership, People leadership and Meeting conduct Committees Board Members Composition, Process and Dynamics Board as a whole Independent Directors Composition, Process and Dynamics Note: DIN stands for Director identification number.
11 Annexure to the Directors’ Report No. Subject title Page 1. Energy conservation, technology absorption and foreign exchange earnings and outgo 12 2. Subsidiary, joint venture and associate company 12 3. Corporate social responsibility 12 3.1 A brief outline of the CSR Policy of the Company 12 3.2 Composition of the CSR Committee 13 3.3 Details of URL for disclosure of the composition of CSR Committee, CSR Policy and CSR projects on the website of the Company 13 3.4 Impact assessment 13 3.5 CSR obligation 13 3.6 Details of CSR amount spent | unspent for the financial year 13 3.7 Details of unspent amount for preceding three financial years 14 3.8 Details relating to the capital asset created or acquired through CSR spent 14 3.9 Reasons for not spending two percent of the average net profit 15 4. Secretarial Audit Report 16 5. Statement of particulars under Sections 134(3)(q) and 197(12) of the Companies Act, 2013 19
Amal Ltd | Annual Report 2022-23 1. 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. However, as per the provisions of Section 136 of the Companies Act, 2013 the report and accounts are being sent to all the members excluding the information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo. 2. Subsidiary, joint venture and associate company (` lakhs) No. Name Equity sharecapital Reserves and surplus Total assets Total liabilities Investments Revenue Profit before tax Provision for tax Profit after tax Dividend % shareholding Reporting currency Subsidiary company 1. Amal Speciality Chemicals Ltd 772 2,205 10,124 7,148 - 2,306 (1,655) - (1,655) - 100% INR 3. Corporate social responsibility 3.1 A brief outline of CSR Policy, programs and scope of the Company 3.1.1 Policy The Company will volunteer its resources to the extent it can reasonably afford to contribute towards enhancing the quality of life, thereby the standard of living of people, particularly the marginalised sections of society. Essentially, the indicative beneficiaries are the needy, who are living below the poverty line in rural or urban areas, particularly where Atul is operating. The endeavour is to uplift them through the chosen programs (mentioned below) so that they can live with dignity and self-respect. 3.1.2 Programs and scope Atul Foundation will take up projects and | or carry out activities under three broad programs: i) Education and Empowerment, ii) Health and Relief and iii) Conservation and Infrastructure with varied scope of work. i) Education and Empowerment a. Enhance education in rural areas b. Establish and | or support educational institutions c. Establish and | or support vocational institutions d. Promote integrated development of rural | tribal areas e. Promote sustainable livelihood opportunities f. Support needy and | or meritorious students ii) Health and Relief a. Eradicate hunger and malnutrition b. Establish and | or improve medical care centers c. Promote health, hygiene and sanitation d. Promote sports and fitness e. Support deserving | needy patients f. Support during natural calamities
13 iii) Infrastructure and Conservation a. Conserve natural resources b. Develop and | or improve rural amenities c. Develop and | or improve rural utilities d. Protect and | or promote art and culture e. Protect flora and fauna f. Restore sites of historical importance 3.2 Composition of the CSR Committee: No. Name of Directors Designation | Nature of Directorship Number of meetings held during the year Number of meetings attended during the year 1. Abhay Jadeja Chairman | Independent Director 1 1 2. Gopi Kannan Thirukonda Member | Non-Independent Director 1 1 3. Rajeev Kumar Member | Managing Director 1 1 3.3. Details of URL for disclosure of composition of the CSR Committee, CSR Policy and CSR projects on the website of the Company: www.amal.co.in/investors/policies3 3.4 Impact assessment: not applicable 3.5 CSR obligation: (` lakhs) a) Average net profit of the Company as per Section 135(5) 1,042.60 b) 2% of the average net profit of the Company as per Section 135(5) 20.85 c) Surplus arising out of the CSR projects or programs or activities of the previous financial years - d) The amount required to be set-off for the financial year - e) Total CSR obligation for the financial year [b)+c)-d)] 20.85 3.6 a) Details of amount spent (ongoing projects and other than ongoing projects) for the financial year: ` 20.85 lakhs b) Amount spent on administrative overheads: nil c) Amount spent on impact assessment: nil d) Total amount spent for the financial year [a)+b)+c)]: ` 20.85 lakhs
Amal Ltd | Annual Report 2022-23 e) CSR amount spent or unspent for the financial year: (` lakhs) Amount unspent Total amount spent for the financial year Total amount transferred to the Unspent CSR Account as per Section 135(6) Amount transferred to any fund specified under Schedule VII as per the second proviso to Section 135(5) Amount Date of transfer Name of the fund Amount Date of transfer 20.85 Nil NA NA - NA NA: not applicable f) Excess amount for set-off, if any: No. Particulars Amount (i) 2% of the average net profit of the Company as per Section 135(5) 20.85 (ii) Total amount spent for the financial year 20.85 (iii) Excess amount spent for the financial year [(ii)-(i)] Nil (iv) Surplus arising out of the CSR projects or programs or activities of the previous financial years Nil (v) Amount available for set-off in succeeding financial years [(iii)-(iv)] Nil 3.7 Details of unspent CSR amount for the preceding three financial years: No. Preceding financial year Amount transferred to the unspent CSR account under Section 135 (6) Amount in unspent CSR account under Section 135(6) Amount spent in the financial year Amount transferred to any fund specified under Schedule VII as per Section 135(5), if any Amount remaining to be spent in succeeding financial years Deficiency, if any Amount Date of transfer - - - - - - - - - 3.8 Whether any capital assets have been created or acquired through CSR spend in the financial year? No
15 Details relating to the asset(s) created or acquired through CSR spend in the financial year: No. Short particulars of the property | asset(s) [including complete address and location of the property] Pincode of the property | asset(s) Date of creation Amount of CSR amount spend Details of entity | authority | beneficiary of the registered owner CSR registration number, if applicable Name Registered address - - - - - - - - 3.9 Reasons if the Company has failed to spend two percent of the average net profit as per Section 135(5): not applicable Chairman CSR Committee Managing Director Abhay Jadeja DIN: 03319142 Rajeev Kumar DIN: 07731459
Amal Ltd | Annual Report 2022-23 4. Secretarial Audit Report Form number MR – 3 Secretarial Audit Report For the financial year ended March 31, 2023 {Pursuant to Section 204(1) of the Companies Act, 2013 and Rule number 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014} To the members of Amal Ltd We have conducted the Secretarial Audit of the compliancewith applicable statutory provisions and the adherence to good corporate practices by Amal Ltd (hereinafter called the Company). The Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conducts | statutory compliances and expressing my opinion thereon. Based onmy verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of the Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended March 31, 2023, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company as per Annexure I for the financial year ended March 31, 2023, according to the provisions of: i. The Companies Act, 2013 (Act ) and the rules made thereunder; ii. The Securities Contracts (Regulation) Act, 1956 and the rules made thereunder; iii. The Depositories Act, 1996 and the regulations and bye-laws framed thereunder; iv. The Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of foreign direct investment, overseas direct investment and external commercial borrowings; v. The following regulations and guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Act ): a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 d. The Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 e. The Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with clients g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2021 h. The Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 i. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018
17 Other sector specific laws as applicable to the Company, including product laws, pollution laws, manufacturing laws and safety laws as per confirmations of compliances placed before the Board of Directors, for our verification carried out on a test-check basis and considered as assurance for existence of a proper compliance management system. However, it has been found that there were no instances requiring compliance with the provisions of the laws indicated at points (c), (d), (e) and (g) of para (v) mentioned hereinabove during the period under review. We have also examined compliance with the applicable clauses of the following: i. Secretarial standards issued by the Institute of Company Secretaries of India. ii. The Listing Agreements entered into by the Company with BSE Ltd and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended). During the period under review, the Company has complied with the provisions of the Act, rules, regulations, guidelines, standards, mentioned hereinabove and there is an adequate compliance management system for the purpose of other sector-specific laws. We have relied on the representations made by the Company and its officers for systems andmechanisms formed by the Company for compliance sector-specific laws and regulations applicable to the Company. We further report that the Board of Directors of the Company is duly constituted with the proper balance of the Executive Directors and the Non-executive Directors (Independent and Non-independent ). The changes in the composition of the Board that took place during the period under review were carried out in compliance with the provisions of the Act. Adequate notice was given to all the Directors to schedule the Board meetings, agenda and detailed notes on agendawere sent at least seven days in advance and a systemexists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through, while the views of the dissenting members are captured and recorded as part of the minutes, wherever required. We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with the applicable laws, rules, regulations and guidelines. We further report that during the audit period, there were no specific events | or actions having a major bearing on the affairs of the Company in pursuance of the above-referred laws, rules, regulations, guidelines, standards, etc, except following; i) Pursuant to the Modified Sanctioned Scheme (MS-10 and MS-13) approved by the Board of Industrial Finance and Reconstruction, the Company has redeemed 20,00,000, (0%) redeemable and non-convertible preference shares of ` 10 each issued to Atul Ltd. ii) The Board of Directors at their meeting held on December 14, 2022, approved the rights issue amounting to less than ` 5,000 lakhs. The rights issue was open from March 06, 2023 to March 14, 2023. The allotment of 29,37,662 equity shares of ` 10 each at a premium of ` 160 per share aggregating to ` 4,994 lakhs were done on March 21, 2023. The Trading approval for the securities was received on March 23, 2023. For SPANJ & Associates Company Secretaries (Ashish C Doshi) Partner Membership number: F 3544 Certificate of practice number: 2356 Ahmedabad UDIN: F003544E000149921 April 20, 2023 Peer review certificate number: 702 | 2020 Note: This report is to be read with our letter of even date, which is annexed as Annexure I and forms an integral part of this report.
Amal Ltd | Annual Report 2022-23 Amal Ltd Annexure – I to the Secretarial Audit Report To the members of Amal Ltd Subject: Secretarial Audit Report for the financial year ended on March 31, 2023 Our report of even date is to be read along with this letter. 1. Maintenance of secretarial records is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. We believe that the processes and practices we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and books of accounts of the Company. 4. Wherever required, we have obtained the Management’s representation about the compliance of laws, rules and regulations and the happening of events, etc. 5. The compliance with the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of the Management. Our examination was limited to the verification of procedures on a test basis. 6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company. For SPANJ & Associates Company Secretaries (Ashish C Doshi) Partner Membership number: F 3544 Certificate of practice number: 2356 Ahmedabad UDIN: F003544E000149921 April 20, 2023 Peer review certificate number: 702 | 2020
19 5. Statement of particulars under Sections 134(3)(q) and 197(12) of the Companies Act, 2013* No. Particulars Status Number of times If total remuneration of the Director is considered If total remuneration of the Director, excluding variable pay and commission is considered i) Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the finacial year Sujal Shah 0.15 0.15 Abhay Jadeja 0.16 0.16 Mahalakshmi Subramanian 0.15 0.15 Jyotin Mehta 0.07 0.07 Rajeev Kumar 0.41 0.41 ii) Percentage increase in remuneration of the Directors, the Chief Financial Officer, the Chief Executive Officer, the Company Secretary or theManager, if any, in the financial year Directors Sujal Shah 27% Abhay Jadeja 30% Mahalakshmi Subramanian 27% Jyotin Mehta - Managing Director Rajeev Kumar - Company Secretary Ankit Mankodi - iii) Percentage increase in the median remuneration of employees in the financial year 8.63% iv) Number of permanent employees on the rolls of Company 37 v) Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentile increase in themanagerial remuneration and justification thereof. Also provide explanation if there are any exceptional circumstances for increase in the managerial remuneration Average increase for key managerial personnel and for other employees was about 8.63% . There is no exceptional increase in remuneration of key managerial personnel. vi) Affirmation that the remuneration is as per the Remuneration Policy of the Company It is affirmed that the remuneration is as per the Remuneration Policy of the Company. *Read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and forming part of the Directors’ Report for the year ended March 31, 2023.
Amal Ltd | Annual Report 2022-23 Management Discussion and Analysis The Company manufactures bulk chemicals such as Sulphuric acid and Oleum and their downstream products such as Sulphur dioxide and Sulphur trioxide at its manufacturing site at Ankleshwar. These chemicals find their use in several industries like Dyestuff, Fertiliser, Personal care, Petrochemical, Pharmaceutical, Textile, etc. These chemicals are generally sold locally within a radius of 200 km from the manufacturing site. During 2022-23, revenue from operations decreased by 10% from ` 4,348 lakhs to ` 3,916 lakhs. The world market for Sulphuric acid is estimated at about 283 million tones per annum and the Indian market at about 16 million tones per annum. Both, the world and Indian markets are growing at about 3% per annum. The manufacturing plant of the Company at Ankleshwar has an installed capacity of 140 tones per day of Sulphuric acid (including downstreamproducts). Optimising the product mix is a key factor. The way to succeed in these products is to ensure high capacity utilisation, excellent conversion efficiency and full deployment of the steam. The Company incorporated a wholly-owned subsidiary namely, Amal Speciality Chemicals Ltd (ASCL), in 2020-21. ASCL commenced its operations in the second quarter of 2022-23 and has a capacity to manufacture 300 tones per day of Sulphuric acid (including downstream products). This will help the Company to have a higher market share. The products manufactured by the Company are commodity in nature whose prices and contributions fluctuate significantly. The price of the key raw material Sulphur, varies from month to month. INTERNAL CONTROL SYSTEMS The internal control systems of the Company are commensurate with the nature of its business and size and complexity of its operations. These are routinely tested, certified and upgraded wherever required by the Statutory as well as the Internal Auditors covering all key areas of business. Significant audit observations and follow-up actions and recommendations there on are reported to the Senior Management and Audit Committee for their review. The Company is working with reputed firms specialised in internal audit function. The combined efforts are helping the Company to introduce best practices required to manage its business. HUMAN RESOURCES The Company believes that people are the foundation on which the business is built, and this remains a key focus area. It continued with its drive to institutionalise and upgrade HR processes. In particular, it focused on improving its processes related to recruitment, training and development, performance management and succession planning in order to manage a dynamic and growing business. The training needs are identified based on selfassessment and L+1 assessment. In addition, there are certain standard courses which everyone is expected to go through, depending upon his (her) grade.
21 Corporate Governance Report The sincerity of conviction and purity of motive is destined to prevail against all odds. - Swami Vivekananda
Amal Ltd | Annual Report 2022-23 1. Philosophy Transparency and accountability are the two basic tenets of Corporate Governance. Amal is proud to belong to a Group whose Founder lived his life with eternal Values and built the business enterprises on the foundation of good governance. The Company is committed to conducting business in the right way, which means taking decisions and acting in a way that is ethical and in compliance with the applicable legal requirements. It endeavours to continuously improve its Corporate Governance performance with a view to earning the trust and respect of all its stakeholders. The Board of Directors (Board) is responsible for and is committed to good Corporate Governance and plays a critical role in overseeing how the Management serves the short and long-term interests of the shareholders and other stakeholders. 2. Board 2.1. Board business The normal business of the Board comprises: 2.1.1 Approving: i) capital expenditure and operating budgets ii) commission payable to the Directors within the limit set by the shareholders iii) contracts in which the Director(s) are deemed to be interested iv) creation of charge on assets in favour of lenders v) declaration of interim dividend vi) joint ventures, collaborations, mergers and acquisitions vii) loans and investments viii) matters requiring statutory | Board consent ix) sale of investments and assets x) short, medium or long-term borrowings xi) unaudited quarterly financial results and audited annual accounts, both consolidated and on a standalone basis, including segment revenue, results and capital employed 2.1.2 Monitoring: i) effectiveness of the governance practices and making desirable changes ii) implementation of performance objectives and corporate performance iii) potential conflicts of interest of the Management, the Board Members and the shareholders, including misuse of corporate assets and abuse in related party transactions iv) the Board nomination process such that it is transparent and results in diversity of experience, gender, knowledge, perspective and thoughts in the Board
23 v) the Management and providing strategic guidance while ensuring that encouraging positive thinking does not result in over-optimism that either leads to significant risks not being recognised or exposes the Company to excessive risk 2.1.3 Noting: i) general notices of interest of the Directors ii) minutes of the meetings of the Board and its Committees and also the resolution(s) passed by circulation 2.1.4 Recommending: i) appointment of the Statutory Auditors ii) final dividend 2.1.5 Reviewing: i) corporate strategy, major plans of action, Risk Policy, annual budgets and business plans ii) default in payment of statutory dues iii) fatal or serious accidents, dangerous occurrences and material environmental matters iv) foreign exchange exposure and exchange rate movement v) the integrity of the accounting and financial reporting systems, and that appropriate systems of control are in place, in particular, systems for risk management, financial and operational control, and compliance with the law and relevant standards 2.1.6 Setting: i) a well-defined mandate, composition and working procedures of the Committees ii) corporate culture and the Values 2.1.7 Others: i) Acting on a fully informed basis, in good faith, with due diligence and care, and in the best interest of the Company and the shareholders ii) Aligning remuneration of the key executives and the Board Members with the long-term interests of the Company and the shareholders iii) Applying high ethical standards iv) Assigning a sufficient number of the Non-executive Board Members capable of exercising independent judgement to items where there is a potential for conflict of interest v) Assisting the Executive Management by challenging the assumptions underlying strategy, strategic initiatives (such as acquisitions), risk appetite, exposures and the key areas of focus of the Company vi) Encouraging training of the Directors on a continuous basis to ensure that the Board Members are kept updated
Amal Ltd | Annual Report 2022-23 vii) Exercising objective and independent judgement on corporate affairs viii) Facilitating the Independent Directors to perform their role effectively as the Board Members and also as the members of Committees ix) Meeting the expectations of operational transparency of the stakeholders while maintaining the confidentiality of information in order to foster a culture of good decision-making 2.2 Appointment and tenure 2|3rd of the Directors (other than the Independent Directors) are rotational Directors. 1|3rd of rotational Directors retire in every Annual General Meeting (AGM) and, if eligible, offer themselves for reappointment. The Managing Director is appointed by the members for a period of up to five years. 2.3 Composition, name, other directorships | committee memberships The Board comprises experts drawn from diverse fields | and professions. At this time, it consists of seven members comprising six Non-executive Directors (four Independent and two Non-independent ) and one Managing Director. The Independent Directors account for 57% of the strength of the Board, as against the minimum requirement of 50% as per the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Regulations) and 33.33% as per the Companies Act, 2013. The Independent Directors fulfil the conditions specified in the Regulations and are independent of the Management. The Board has identified the following skills | expertise | competence as required to be possessed by the Board of Directors to ensure effective functioning of the business(es) and sectors of the Company. The mapping of these skills | expertise | competence among the Directors is as given here: Skills | expertise | competence Names of Directors Commercial Sunil Lalbhai, Rajeev Kumar Domain industry Sunil Lalbhai, Rajeev Kumar Finance Sujal Shah, Mahalakshmi Subramanian, Gopi Kannan Thirukonda, Jyotin Mehta General management Sunil Lalbhai, Rajeev Kumar Legal, including laws related to corporate governance Abhay Jadeja, Gopi Kannan Thirukonda, Jyotin Mehta Sales and marketing Sunil Lalbhai, Rajeev Kumar Science and technology Sunil Lalbhai, Rajeev Kumar The Non-executive Directors are eminent professionals drawn from the above area. Relevant details about the Board Members are as under:
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