Dear Members,
The Directors have pleasure in presenting the Twenty Ninth Annual Report on business and operations of your Company along with the audited financial statements for the financial year ended March 31, 2019.
FINANCIAL AND OPERATIONAL HIGHLIGHTS
(Rs. in lakhs)
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Standalone
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Consolidated
|
| |
2018-19
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2017-18
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2018-19
|
2017-18
|
|
Revenue from operations (Net)
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107,370
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92,864
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118,160
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101,349
|
|
Other Income
|
982
|
857
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1,045
|
947
|
|
Total Income
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108,352
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93,721
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119,205
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102,296
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Earnings before interest, tax, depreciation and amortization (EBITDA)
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14,188
|
11,160
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14,961
|
11,765
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|
Less: Depreciation and amortization expense
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3,528
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2,990
|
3,808
|
3,221
|
|
Earnings before interest and tax (EBIT)
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10,660
|
8,170
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11,153
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8,544
|
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Less: Finance costs
|
3,376
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2,880
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3,534
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2,987
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Profit/ (loss) before tax (PBT)
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7,284
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5,289
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7,619
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5,557
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Less: Tax expense
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2,265
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1,672
|
2,324
|
1,689
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Profit/ (loss) after tax (PAT)
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5,019
|
3,617
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5,295
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3,868
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Other comprehensive income/ (loss), Net of Tax
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(60)
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50
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(10)
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54
|
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Total comprehensive income/(loss), Net of Tax
Earnings per share(In Rs.)
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4,959
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3,667
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5,285
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3,922
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|
Basic
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37.26
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27.61
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39.31
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29.52
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Diluted
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36.08
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26.64
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38.06
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28.49
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COMPANY PERFORMANCE
Your directors are glad to report that your Company delivered a record performance for the financial year 2018 - 2019, despite a challenging environment for the Automobile Industry.
On standalone basis, the Company registered a growth of 16% in revenue whereas pre-tax profit improved by 38% compared to previous year. The total revenue from operations including other income was Rs. 108,352 lakhs for the financial year ended 31st March, 2019 as against Rs. 93,721 lakhs in the financial year 2017-2018. Profit before Tax (PBT) for the financial year under review stood at Rs. 7,284 lakhs as against Rs. 5,289 lakhs a year ago.
On consolidated basis also both revenue and pre-tax profit showed a remarkable improvement. Total revenue including other income for the year under review was Rs. 119,205 lakhs as against Rs. 102,296 lakhs in the previous financial year, a growth of 17% on a year-on-year basis. Profit before Tax (PBT) was Rs. 7,619 lakhs as against Rs. 5,557 lakhs a year ago, a jump of 37%.
GLOBAL BUSINESS
Company’s revenue from Global Business delivered a robust growth of 26% to Rs. 23,710 lakhs in the financial year 2018 -2019 as compared to Rs. 18,766 lakhs in 2017-2018. Global business constitutes 20% of the total revenue, which is in line with the Company’s stated objective.
DIVIDEND
The Board of Directors in its meeting held on February 06, 2019 had declared an interim dividend of Rs. 2/- per Equity Share of Rs. 5/- each. Considering the improved financial results, your Directors are pleased to recommend a final dividend of Rs. 5/- per Equity Share of Rs. 5/- each, which is subject to the approval of the Members at the ensuing Annual General Meeting.Thus, the total dividend for the financial year under review will be Rs. 7/- per shares i.e. 140 % as against 125% (Rs. 6.25/- per share) paid in the previous year.
During the year under review the total cash outflow on account of dividend will be Rs. 1,013.72 lakhs including dividend distribution tax.
SHARE CAPITAL
On November 11, 2018, 270,000 and on December 21, 2018, 4,611 equity shares of Rs. 5/- each were allotted to the employees of the Company on their exercise of Options granted to them under Employee Stock Options Scheme. Consequently, the issued and paid-up share capital of the Company as on March 31 2019 stood at Rs. 68,200,605 divided into 13,640,121 equity shares of Rs. 5/- each.
The Company has not issued any Equity shares with differential voting rights. Hence, no information as required under Section 43(a)(ii) of the Companies Act, 2013 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 is furnished. The Company has only one class of Equity Shares with face value of Rs. 5/- each ranking pari-passu.
CONSOLIDATED FINANCIAL STATEMENTS AND SUBSIDIARIES
Consolidated Financial Statements are prepared in accordance with the Indian Accounting Standard (IND AS) based on the financial statements of the subsidiary companies. The said consolidated accounts form part of this report and accounts.
SUBSIDIARY COMPANIES
Your Company has three foreign subsidiaries viz. Alicon Holding GmbH, Illichmann Castalloy S.R.O. and Illichmann Castalloy GmbH. Alicon Holding GmbH is a 100% subsidiary of your Company, who in turn holds 100% capital of Illichmann Castalloy S.R.O. Illichmann Castalloy GmbH is a 100% subsidiary of Illichmann Castalloy S.R.O. Pursuant to the provisions of Section 136 of the Act, the Consolidated Financial Statements along with relevant documents and separate audited financial statements in respect of Subsidiaries are available on the website of the Company.
A statement containing the performance and financial position of each of the subsidiaries in Form AOC-1 is annexed as Annexure I and forms part of this report.
STATE OF THE COMPANY’S AFFAIRS
Alicon is one of the largest integrated manufacturers of Aluminum castings. The Company is a pioneer in low-pressure die-casting technology and gravity die-casting technology in the domestic markets.
Your Company provides end-to-end casting solutions to a diversified base of clients within and outside India, catering to various sectors such as automobile, infrastructure, aerospace, energy, agriculture, defense.
Our robust and innovative product pipeline is delivered from our state-of-the-art manufacturing facilities located in Shikrapur and Chinchwad in Pune, Maharashtra and Binola, Haryana, in India. In addition, through our Subsidiary, Illichmann Castalloy we are present in Europe.
We have developed foundries at strategic locations close to key markets, enabling increased speed-to-market and better cost efficiencies. We enjoy long-standing relationships with major local and international OEMs including leading two wheeler OEMs, four-wheeler OEMs, as well as several tier-I and other non-auto brands. With our key customers, we have created a strong and differentiated position as an integrated solution provider.
Your Company Offers Design, Engineering, Casting, Machining and Assembly, Painting and Surface Treatment of Aluminum Components. We are proud to operate one of the largest Aluminum foundries in India. We are leaders in the development of Pro-Cast and Magma space in India.
NEW EXPANSION AND FUTURE OUTLOOK
Management of your Company continue to focus on new product lines to address the ever-evolving needs of customers. In the medium-term to longer-term, your Company continue to implement our business strategy across our operational models, augmenting solid gains in the business. Your Company is fully geared up its position to capitalize on the enormous growth potential across the customer industries.
In the financial year 2018-2019, the Company has added two new Export Customers TitanX and UQM. First container was supplied to TitanX by end of December, 2018 and a few more business opportunities are expected with this customer. UQM is from e-mobility. Now, the Company is exclusively working on this sector because that could be the next future for our industry.
During the year under review, the Company spent Rs. 8,162.02 lakhs towards Capex.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
A detailed report on the Management Discussion & Analysis is provided as a separate section in the Annual Report which forms part of this Directors’ Report.
MATERIAL CHANGES AND COMMITMENT
No material change and commitment, which could affect your Company’s financial position, has occurred between the end of the financial year 2018-19 and the date of this report.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business of the Company during the financial year ended March 31, 2019.
INTERNAL FINANCIAL CONTROLS AND ADEQUACY
The Company has a comprehensive internal control system to provide reasonable assurance about the achievement of its objective, reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedures, laws and regulations, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are built in place to ensure that such control systems are adequate and are operating effectively. The monitoring and reporting of financial transactions is supported by a web-based system SAP, which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures at all levels of the organization.
Risk Management Policy: The Company has adopted an Enterprise Risk Management policy and established a risk management framework with an objective of timely identification, mitigation and control of the risks, which may threaten the existence of the Company.
CORPORATE GOVERNANCE
Your Company is committed to maintain the highest standard of Corporate Governance and adhere to Corporate Governance guidelines, as laid out in the SEBI Listing Regulations. All the Directors and the Senior Management personnel have affirmed in writing their compliance with and adherence to the Code of Conduct as adopted by the Company.
The annual report of the Company contains a certificate by the Managing Director in terms of SEBI Listing Regulations on the compliance declarations received from the Directors and the Senior Management personnel.
A separate report on Corporate Governance is annexed to this Report as Annexure II.
The Statutory Auditors of the Company have examined the requirements of Corporate Governance and have certified the compliance, as required under SEBI Listing Regulations. The Certificate in this regard is annexed to this Report.
The Chief Executive Officer and Chief Financial Officer certification as required under the SEBI Listing Regulations is annexed to this Report.
RELATED PARTY TRANSACTION AND POLICY:
All contracts/arrangements/transactions entered into the Company with Related Parties were in ordinary course of business and on arm’s length basis. All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated by the Company.
The details of the Related Party Transactions as per IND AS - 24 are set out in Notes to the Financial Statements of the Company. Since all the transactions with related parties entered into by the Company were in ordinary course of business and on arm’s-length basis, Form AOC-2 is not applicable to the Company.
The Company has formulated a policy on Related Party Transactions, which is available on the Company’s website at www.alicongroup.co.in. There was no materially significant Related Party Transaction entered into by the Company with Promoters, Directors or Key Managerial Personnel, which may have a potential conflict in the interest of the Company, at large.
WHISTLE Blower POLICY AND VIGIL MECHANISM
Your Company is committed to conduct its business in accordance with the highest standard of business ethics, openness, probity, accountability and seriously takes any unethical or unlawful conduct by any of its Stakeholders. To that end, any concern related to malpractice or impropriety is treated by the Alicon with utmost seriousness. The Whistle-blower Policy enables Stakeholders associated with your Company to voice their genuine concerns in a responsible and effective manner.
The Company has adopted a Whistle Blower Policy to deal with instances of fraud and misconduct. No person has been denied access to the Chairman of the Audit Committee. The said policy has been uploaded on the website of the Company www.alicongroup.co.in.
SECRETARIAL STANDARDS
The Board of Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.
DIRECTORS & KEY MANAGERIAL PERSONNEL
The Board in its meeting held on February 06, 2019, had recommended to re-appoint Mr. A.D. Harolikar (DIN: 00239460) and Mr. Vinay Panjabi (DIN: 00053380) as Independent Directors of the Company for the further period of five (5) years w.e.f. April 01, 2019. The Company is seeking approval of Members by way of Special Resolutions through Postal Ballot in this regard.
Mr. J. Suzuki (DIN:02628162) shall retire by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment. Information and brief profile of Mr. J. Suzuki is provided in the Corporate Governance Report, which forms part of this Annual Report. Further, the business item relating to the Re-appointment of the above Director has been included in the Notice of the AGM.
Mrs. Swapnal Patane joined the Company as Company Secretary with effect from March 11, 2019. She is Associate Member of the Institute of Company Secretaries of India and holds Bachelor Degree of Commerce. She has 8 years of experience in Legal field, Corporate Laws and Secretarial practices.
During the year under review, none of the non-executive directors had any pecuniary relationship or transactions with the Company.
Pursuant to the provisions of Section 203 of the Companies Act, 2013 and SEBI Listing Regulations Mr. S. Rai is the Managing Director, Mr. Rajeev Sikand is Chief Executive Officer, Mr. Vimal Gupta is the Chief Finance Officer and Mrs. Swapnal Patane is the Company Secretary of the Company.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS
In compliance with the provisions of Section 149 (6) of the Companies Act, 2013 requisite declarations have been received from the Independent Directors regarding meeting the criteria of Independence.
NUMBER OF BOARD MEETINGS AND COMMITTEES OF BOARD
The Board of Directors met five (5) times during the Financial Year. The details on attendance of Directors in each Board Meetings and other Committee Meetings of Board of Directors are provided in Corporate Governance Report, which forms part of the Directors’ Report.
AUDIT COMMITTEE & COMPOSITION
The composition of the Audit Committee is in terms of requirements of the Companies Act, 2013 read with the rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The details pertaining to the audit committee are included in the Corporate Governance Report, which forms part of this report.
THE NOMINATION AND REMUNERATION POLICY
The Board has adopted a policy on Nomination, Remuneration and Board Diversity which sets out the criteria for determining qualifications, positive attributes and independence of a Director.
The Company’s Policy relating to appointment of directors, payment of managerial remuneration, directors’ qualifications, positive attributes, independence of directors and other related matters is annexed to this Report as Annexure III.
PERFORMANCE EVALUATION OF BOARD, COMMITTEE AND DIRECTORS
In accordance with applicable provisions of the Companies Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the evaluation of the Board as a whole, Committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Board.
DIRECTORS’ Responsibility STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge, confirms that -
a) in the preparation of the accounts the applicable accounting standards have been followed along with proper explanations relating to material departure;
b) appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are 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 of the Company for that period;
c) proper and sufficient care has been 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 annual accounts have been prepared on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES
Information on Particulars of Employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this Report and the same is annexed to this report as Annexure IV.
The information required pursuant to section 197 of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of your Company is available for inspection by the Members at the registered Office of the Company during business hours on working days up to the date of ensuing AGM. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, whereupon a copy would be sent.
EMPLOYEES STOCK OPTION SCHEME (ESOS) Disclosure as required under Section 62(1 )(b) of the Companies Act,2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules and Regulations 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014 is given in Annexure V to this report. The certificate from the statutory auditors of the Company stating that Alicon Castalloy Ltd. - Employees Stock Option Scheme, 2015 and Alicon Castalloy Ltd. - Employees Stock Option Scheme, 2017 have been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 are also appended thereto.
RECEIPT OF REMUNERATION BY MANAGING DIRECTOR FROM SUBSIDIARY COMPANIES
Mr. S. Rai, Managing Director of the Company, has not received any remuneration from any of its subsidiary companies.
STATUTORY AUDITOR
M/s. Kirtane & Pandit LLP, Chartered Accountants (ICAI Registration No. 105215W/W100057), were appointed as the Statutory Auditors of the company to hold the office for a term of five (5) years from the conclusion of the 27th Annual General Meeting until the conclusion of the 32nd Annual General Meeting of the Company to be held in the year 2022.
Pursuant to the notification issued by the Ministry of Corporate Affairs on 7th May, 2018, the mandatory requirement of ratification of appointment of the Statutory Auditors in every Annual General Meeting has been omitted. Hence, ratification of appointment of M/s. Kirtane & Pandit LLP, Chartered Accountant, in ensuing AGM is not proposed.
According to Board of Directors, there is no adverse remark made by Statutory Auditors in their report. Notes to the accounts are self-explanatory to comments/observation made by the auditors in their report. Hence, no separate explanation is given.
SECRETARIAL AUDIT REPORT
During the year, Secretarial Audit was carried out by Mr. Upendra C. Shukla, Practicing Company Secretary, Mumbai for the financial year 2018-19. The report on the Secretarial Audit is appended as Annexure VI to this report. According to the Board of Directors the report does not have any adverse remark calling for an explanation.
COST RECORDS
As per the Board of Directors of the Company, maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not required by the Company and accordingly such accounts and records are not maintained.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:
There was no frauds which was reported by Auditors for the year under review.
EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT-9 in pursuance to the provisions of Section 92(3) of the Companies Act, 2013 is placed on the Website of the Company www. alicongroup.co.in.
CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES
At Alicon, we believe that sustainability is our collective responsibility. This is why we are closely engaged in various endeavors to serve our communities, our country and the environment.It is this inherent quality that prompted us to initiate our CSR and Rural Outreach programmes in 2007, seven years before it was made mandatory by law in India.
We sincerely believe that a holistic approach to sustainability, paired with positive action, has the power to transform the individual, the country and the world. The Bansuri Foundation, through which we conduct a majority of our corporate social responsibility (CSR) activities, works closely with other trusts and NGOs to create new stories of change. We also work independently with other NGOs like Social Venture Partners to fulfill our societal goals.
Alicon’s CSR programme focuses on rural development, education, health & sanitation. We also encourage our employees to initiate projects within their own communities.
Brief outline on the Corporate Social Responsibility (CSR) Policy of the Company and the initiative undertaken by the Company on CSR activities during the year are set out in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and is annexed as Annexure VII to this report.The CSR Policy is hosted on the Company’s websitewww.alicongroup.co.in.
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any Deposit under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
The particulars of loans, guarantees and investments covered under the provisions of section 186 of Companies Act, 2013 are given in the Notes to financial statements.
ENVIRONMENT HEALTH & SAFETY
To ensure long-term environmental sustainability, Alicon has pioneered several green initiatives. Across all our facilities, we have implemented a range of activities to control our carbon footprint and continuously seek new ways to work towards our mission of sustainability. Here are a few highlights from our Environmental Program:
- Modifying LPDC machines and switching to LED lights to help save thousands of kilowatts of energy each day
- Installing rooftop solar technology to power plants
- Ensuring a year-on-year reduction in Greenhouse gas emissions
- Sourcing locally and eliminating packaging waste
INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Disclosure of information regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo etc. under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed separately as an Annexure VIII .
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant and material order is passed by the Regulators / Courts / Tribunals, which would impact the going concern status of the Company and its future operations.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
In accordance with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has adopted the “Prevention of Sexual Harassment at Workplace Policy” and constituted an Internal Complaints Committee (ICC) for prohibition, prevention and redressal of sexual harassment of women at workplace and matters connected therewith or incidental thereto covering all the related aspects.
The Committee meets as and when required. However minimum one meeting is ensured during the Financial Year to discuss strengthening safety of employees at workplace and also to resolve/address related issues, if any reported during the year.
INDUSTRIAL RELATIONS
Industrial relations across all the manufacturing locations of your Company were cordial and very positive through the year under review.
In order to develop skills and foster togetherness at the work place, your Company rolled out multiple training and engagement programs covering a wide range of topics such as stress managements, attitude, creativity, team spirit, quality, skill building, safety and environment, customer focus, etc.
ACKNOWLEDGEMENT
Your Directors wish to thank Enkei Corporation, Japan, our technical collaborator, for their valued support and guidance for development of new parts.Your Directors also take this opportunity to thank all the customers, vendors, bankers and other business associates for their continued support. Your Directors also thank all the employees for their commitment, hard work and contribution to the Company’s excellent performance. Your Directors are thankful to all the Shareholders of the Company for their unstinted support and confidence reposed in the Management of the Company.
On behalf of the Board of Directors,
S. Rai A.D. Harolikar
Managing Director Director
DIN: 00050950 DIN: 00239460
Place: Shikrapur, Pune
Date: April 19, 2019
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