Asahi Industries Ltd Directors Report.

Dear Members,

This is to apprise the members that pursuant to an application made by Dena Bank, the Honble National Company law Tribunal, Mumbai Bench("Adjudicating Authority"), vide its order dated 21st January, 2019 had ordered the commencement of the corporate insolvency resolution ("CIR") process in respect of your company under the provision of the Insolvency and bankruptcy Code,2016 (the "Code"). Thereafter, in accordance with Section 17 of the Code, the powers of the Board of Directors("Board") stood suspended and Mr. Ankur Kumar appointed as interim resolution professional of the Company who was later confirmed as Resolution Professional of the Company on 20th February, 2019 for the management of the affairs of the Company ("RP"/"Resolution Professional").

In compliance with the provision of Section 134(3) of the Companies Act, 2013, a report containing the details and information as required to be disclosed in the Directors Report to the Shareholders of the Company is provided hereunder.

This Reort was discussed in a meeting held with the Key Management Persons and thereafter taken on record by the Resolution Professional. Accordingly, Report for the year ended 31st March, 2019 is as under.

FINANCIAL HIGHLIGHTS

2018-2019 2017-2018
(Rs. in Lacs) (Rs. in Lacs)
Revenue from operations 1,957.36 12466.18
Finance Cost 20.34 127.85
Depreciation and Amortization Expense 428.92 1151.40
Provision for Tax
Current Tax 0.00 0.00
Deferred Tax Assets / (Liabilities) (365.93) 217.40
Profit/Loss after Tax (820.93) (1035.25)

Note: Previous year figures have been regrouped/ rearranged wherever necessary.

DIVIDEND

Due to inadequacy of profits during the year under report, there is no recommendation of Dividend on the Equity Shares of the Company.

REVIEW OF PERFORMANCE

During the year, the Turnover of Company has substantially decreased to Rs 1957.36 Lacs as against Rs. 12466.18 Lacs in respect of the previous Financial Year ended 31st March, 2018. The Profit/ Loss after Tax decreased to Rs (820.93) Lacs in the Financial Year ended 31st March, 2019 as against Rs. (1035.25) Lacs in the previous financial year ended 31st March, 2018 after considering deferred tax of Rs. (365.93) Lacs as against 217.40 Lacs in the previous financial year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

All the Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Clause 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") entered into with the Stock Exchanges. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. Further, the Composition is given in the Corporate Governance Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure A".

MEETINGS OF THE BOARD

Three meetings of the Board of Directors and Three Meeting of audit committee were held during the year. For further details, please refer report on corporate governance section in this Annual Report.

COMMITTEES OF THE BOARD

The Board has five committees: the audit committee, nomination and remuneration committee, Management and Finance Committee, Sexual Harassment Committee and stakeholders relationship committee. All committees except Management and Finance Committee and Sexual Harassment Committee consist entirely of independent directors.

A detailed note on the Board and its committees is provided under the corporate governance report section in this Annual Report.

DIRECTOR EVALUATION

In terms of SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2018, a company Undergoing CIR process is not required to comply with the requirement of conducting evaluation of the independent directors. Therefore, subsequent to commencement of the CIR process the evaluation of the independent directors of the company was Not required to be carried out under the provisions of the Regulation 17(10) SEBI LODR Regulations. Further, in accordance with Rule 8(4) of the Companies (Accounts) Rules, 2014, the board of directors of a company are required to evaluate its own performance and that of its committees and individual directors. However pursuant to commencement of the CIR process of the company, the powers of the board of directors stand suspended and are exercised by the interim resolution professional or the resolution professional, as the case may be, in accordance with the provisions of the Code.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company familiarizes its Independent Directors with the Company, their roles, rights, responsibilities in the company, nature of the industry in which the company operates, business model of the company etc. through various programmers. The details of such familiarization programmed shall be disclosed on the Companys website at the following web link: http:// asahiind.com/wp/

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT / STATEMENT BY THE COMPANY SECRETARY AND TAKEN ON RECORD BY RESOLUTION PROFESSIONAL:

To the best of knowledge and beliefs and according to the information and explanations obtained by management, Company Secretary make the following statement in terms of Section 134(3)(c) of the companies Act 2013:

a. that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed and there is no material departures;

b. the Company Secretary have selected such accounting policies and applied them consistently and made judgment and estimates 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, 2019 and of the profit of the Company for the year ended on that date;

c. the Company Secretary have taken proper and sufficient care 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;

d. the Company Secretary have prepared the annual financial statements have been prepared on a going concern basis;

e. the Company Secretary have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f. the Company Secretary have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as "code of business conduct" which forms an Appendix to the Code. The Code has been posted on the Companys website www.asahiind.com. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a vigil mechanism named Fraud and Risk Management Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has a Fraud Risk and Management Policy to deal with instances of fraud and mismanagement, if any. The Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has duly set up an Internal Complaints Committee (ICC) in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, to redress complaints received regarding sexual harassment.

The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19.

No of complaints received : Nil
No of complaints disposed off : Nil

PREVENTION OF INSIDER TRADING:

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

RELATED PARTY TRANSACTIONS:

All transactions entered by the Company with Related Parties were in the Ordinary Course of Business and at Arms Length pricing basis. There were no materially significant transactions with Related Parties during the financial year 2018-19 which were in conflict with the interest of the Company. Suitable disclosures as required under AS-18 have been made in Notes to the financial statements. The Company has also adopted Related Party Transaction Policy as required under Regulation 23 of SEBI Listing Regulations.

The Board has approved the policy on Related Party Transactions. The policies have been uploaded on the Companys website, under the web link:http://asahiind.com/wp/related-party-transactions.

All related Party Transactions prior to the commencement of the CIR process were authorised by the Audit Committee / Board, as applicable for approval and thereafter by the Resolution Professional who in turn, was authorized by the CoC.

Material changes and commitments affecting the financial position of the Company which have occurred between March 31, 2019

There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31, 2019).

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure -B to the Boards report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Disclosures relating to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of the employees of the company, will be provided upon request.

In terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

FIXED DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Detail of loans, investments, guarantees and securities covered under the provision of section 186 of Companies Act 2013 are given in the notes to the financial statement.

INSURANCE:

The properties, stock, assets of your Company are adequately insured.

REPORT ON CORPORATE GOVERNANCE

The Company is fully compliant with the Corporate Governance guidelines, as laid out in Chapter IV of SEBI Listing Regulations. The details of the Code of Conduct are furnished in the Corporate Governance Report attached to this Report. The Managing Director has given a certificate of compliance with the Code of Conduct, which forms part this Directors Report, as required under Chapter IV of SEBI Listing Regulations. M/s. Rishi Sekhari & Associates., Practicing Chartered Accountants, Statutory Auditor of the Company has examined the requirements of Corporate Governance with reference to Chapter IV of SEBI Listing Regulations and has certified the compliance, as required under Chapter IV of SEBI Listing Regulations. The Certificate in this regard is attached to this Report.

HUMAN RESOURCES MANAGEMENT

The Company recognizes that in a people-intensive business, major gains can be scored in the area of productivity management. In view of this, the Company has strengthened its people management through performance-linked incentives, amenities, training, Multi-skilling and career path identification.

The Company is of firm belief that good Human Resource (HR) Management would ensure success through high performance. HR strategy and plans of the Company are deeply embedded with the organizational goals. In order to enhance the manpower productivity, the goal is set to increase the production capacity of the plant and rationalize the manpower through scientific study. All the operational goals of the top management emanate from the business plan. The goals of MD are shared with his subordinates who in turn share their goal with their respective subordinates and so on. Regular visits by HR team is being made to the plant to meet the employees and also interaction meetings are conducted to get their feedback, based on which HR policies are improved continuously. The process has resulted in better employer-employee relationship.

The Company lays due emphasis on all-round development of its human resource. Hence, training of the employees is aimed at systematic development of knowledge, skills, aptitude and team work. Training is designed for the development of personal skills necessary for the performance of the present job and to prepare them for future growth. Individual development is given top priority to groom high caliber manpower.

INDUSTRIAL RELATIONS:.

During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexure, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Chapter IV of SEBI Listing Regulations.

CONSERVATION OF ENERGY:

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilisation of energy are not quantitative, its impact on cost cannot be stated accurately.

FOREIGN EXCHANGE EARNINGS AND OUT-GO:

During the period under review there was no foreign exchange earnings or out flow.

AUDITORS REPORT / SECRETARIAL AUDIT REPORT:

The observation made in the Auditors Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Certain observations made in the report with regard to non filing of some forms were mainly due to ambiguity and uncertainty of the applicability of the same for the relevant period. However, the company would ensure in future that all the provisions are complied to the fullest extent.

SECRETARIAL AUDITOR:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Ajay Goyal & Associates, Company Secretaries in practice to undertake the Secretarial Auditor of the Company.

COST AUDITOR

As per the requirements of Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013, your Company carries out an audit of cost records every year.

STATUTORY AUDITOR

M/s. Rishi Sekhri & Associates, Chartered Accountants, (Membership No. 126656 & Firm Registration No.128216W) has been appointed as Auditors of the Company. In accordance with the provisions of Section 139 of the Act, M/s. Rishi Sekhri & Associates, Chartered Accountants, (Membership No. 126656 & Firm Registration No.128216W) to hold office till the conclusion of the Twenty Eight Annual General Meeting of the Company to be held in the year 2022, subject to ratification of such appointment by the Members at every subsequent Annual General Meeting, if so required under the Act.

ACKNOWLEDGEMENT

The Resolution Professional together with the KMP expresses their sincere thanks to all employees and support extended by Banks, Consultants, Solicitors, Shareholders and Employees of the Company.

Sd/- Sd/-
Place: Mumbai Mansi Wadkar Swaroop Singh Bhati
Date: 13.12.2019 (Suspended Director) (Company Secretary)
DIN: 05309693
Taken on record
sd/-
Ankur Kumar
Resolution Professional