Your Directors are pleased to present the 82nd Annual Report on the businessand operations along with the Audited Financial Statements of the Company for thefinancial year ended March 31 2019.
The global economy which registered a robust growth across all major countries in theyear 2017 saw the momentum continuing in the first half of 2018. However during thesecond half of 2018 the economic activity started to slow down due to escalation of theUS-China trade tensions financial crisis in Argentina and Turkey auto sector slowdown inGermany due to the introduction of new emission norms and tighter credit policies inChina. Federal Reserve's tighter monetary policy with multiple interest rates hikes addedfurther pressure on all the major economies. The combination of these factors has resultedin a weaker consumer and business sentiments leading to decelerated industrial productionand lower trade between countries. Global economic woes added downward pressure on oilprices whereas consumer price inflation remained muted across advanced economies due to adecline in commodity prices.
Amidst these challenging market conditions global economic growth declined from 3.8%in 2017 to 3.6% in 2018. The downturn is expected to continue in 2019 and global growth isprojected to decline to 3.3%. However the second half of 2019 is expected to pick upowing to the policy accommodations made by major economies. The US Federal Reserve haspaused interest rate increases. The European Central Bank the Bank of Japan and the Bankof England have all shifted to a more accommodative stance. The US-China trade tensionshave eased as prospects of a trade agreement take shape although it is an uneasy truceand tensions could flare up at anytime. Despite a challenging global macroeconomicenvironment India continued to emerge as one of the fastest growing economies in theworld registering GDP growth of 7.1% in 2018. This clearly reflects the macroeconomicstrength of the Indian economy which was well supported with prudent fiscal and monetarypolicies. However the last year was challenging due to overall economic slowdown whichwas further impacted by the non-banking financial sector crisis leading to lower privateinvestment and muted exports due to select US trade sanctions. A stable government coupledwith a reform-focused policy framework is expected to provide a conducive businessenvironment. As per the International Monetary Fund India is projected to register a GDPgrowth of 7.3% in 2019 and 7.5% in 2020 underpinned by recovery of investments strongconsumption and favourable monetary and fiscal reforms.
According to Euromonitor the global cigarettes industry is estimated at 5.3 trillionsticks worth US$ 714 billion. In volume terms the industry has declined by 0.7% in 2018whereas in value terms the industry has grown by 3.0%. While the smoking rate hasdeclined in developed countries over the years the sales of cigarettes continue to risein developing markets such as China. After four consecutive years of decline Indiancigarette industry reported an increase of 1.5% in 2018. Cigarette taxes in India areamong the highest in the world. Therefore high tax rates make cigarettes unaffordable toa large section of consumers and in turn the overall tobacco market experiences slowgrowth. The cigarette industry in India has declined from 100.9 billion sticks in 2013 to82.5 billion in 2018. During the same period retail sales value has increased from Rs.568 billion to Rs. 831 billion. High level of taxation relative to other tobacco productsand stringent regulations have also led to the rise in illicit cigarette trade andconsequent loss of revenue to the government. Trade of illicit cigarettes has grown fromabout 21.8 billion sticks in 2013 to 26.5 billion in 2018. During 2013-2018 period whilelegitimate cigarette market has declined by 3.9% illicit cigarette has grown at a similarrate. India is now the fourth largest illicit cigarette market in the world. Your Companyoperates in the tobacco segment which is an extremely important crop providing livelihoodto over 45 million people. India is the third largest producer and third largest exporterof tobacco in the world. Tobacco and tobacco products are one of the major contributors tothe government revenue. Despite just a 10% share of tobacco consumption legal cigarettescontribute to 86% of the total tax revenue from tobacco products. Cigarette ismanufactured using Flue Cured Virginia (FCV) tobacco in India which is grown across thestates of Andhra Pradesh Telangana Karnataka and Gujarat. Increase in illicit cigarettesand influx of non-duty paid international brands have resulted in a decline in demand ofFCV tobacco in India. It is estimated that since FY2014 the earnings of FCV tobaccofarmers have declined cumulatively by more than Rs. 4000 Crore. To curb this variousindustry bodies and corporates have urged the government to consider bringing the taxationon cigarettes to pre-GST levels.
Over the past decade the government has initiated several tobacco control measures butthe rate at which smoking prevalence is dropping has remained low. Globally electroniccigarettes or Electronic Nicotine Delivery Systems (ENDS) have emerged as a viablesolution to reduce the harmful effect of traditional cigarettes. Recently an industryassociation has requested the government to set up a panel to independently review theexisting global regulations supporting evidence showcasing relative less harmful impactof ENDS and the potential of these products to supplement tobacco control measures inIndia.
CONSUMER AND RETAIL INDUSTRY
India has emerged as one of the most attractive investment destinations in the worldwith increasing disposable incomes rapid industrialization and a favourable demographicprofile. Consumer sector is one of the best performing sectors due to inherent strengthsof the Indian economy. Nearly 60% of India's GDP is driven by consumption. With a medianage of 28 years India has a large young population which will lead to rise in workforceincrease in household incomes and ultimately leading to higher consumption. Technology isalso playing a pivotal role in the rise of consumerism in India. Cheaper availability ofsmartphones deeper internet penetration emergence of plastic money wallets have allresulted in a radical shift in consumer behaviour further driving consumer spending.India's Retail segment is expected to reach US$ 1.2 trillion by 2021 as it continues toexpand at a CAGR of 10.8%. India's robust economic growth and rising household incomes areexpected to increase consumer spending with the maximum consumer spend likely to occur inthe food household transport and communication segments. India's share of globalconsumption is also forecasted to expand to more than twice its current levels by 2020.The growth over the next 5 years will also be driven by organised brick-and-mortar retailand ecommerce.
Notwithstanding the significant growth in consumption critical societal challengeswill need to be addressed including skills development and employment of the futureworkforce socio-economic inclusion of rural India and creating a healthy and sustainablefuture for its citizens. The consumer & retail industry in India is quickly emergingas one of the largest sectors in the economy. However the traditional unorganized retailsector is predominant but the shift towards organized retail sector is evident and isexpected to grow further in the coming years. Godfrey Phillips with its established chainof 24seven convenience stores is well positioned to meet the growing demand of new ageconsumers and deliver an international shopping experience.
SEGMENTWISE PERFORMANCE IN 2018-19 Cigarettes
After several years of high tax increases the year under report saw stability of taxand the consequential price stability has led to a modest recovery in cigarette industryvolumes. However the threat of illicit and tax-evaded cigarettes continues to loom large.
Your Company was able to show a significant improvement in its volumes and profits.Strong brand health and some geographical expansion led to the growth in market share aswell. Our main brands led by Four Square continued to perform strongly especially in ourcore markets. Improvement in margins was also achieved by driving mix improvementeffective sourcing strategies and process innovations.
Your Company is committed to further fueling its growth through efforts in sharpeningconsumer insights improving capabilities for faster product development and innovationsdriving supply chain efficiencies and implementing cost optimization measures.
This year the Company carried out tremendous work on value engineering to improveprofitability situation of the chewing business by bringing about some positive changes ingross marginal contribution and product mix. Various initiatives and innovations inbusiness processes were undertaken which resulted in improved product quality and consumersatisfaction. Pan Vilas your Company's flagship brand in the premium category continuedto grow on the backing of innovations and consumer acquisition programs and strategiesthat has led to a growth of 6% in volumes. New initiatives and innovative product linesare planned for the upcoming years to further strengthen this brand. Similarly in the lessprofitable mid-premium segment your Company's brand Raag continued to hold onto itsmarket share in important markets and consumer satisfactions scores though the toplineshowed the declining trend on overall basis.
Your Company also showcased continued growth of 21% in gross sales revenue in theconfectionary segment backed by launch of highly innovative Imli Candy. Through productinnovation and leveraging strength in distribution your Company aims to accelerate thisgrowth momentum further.
The following table shows the status of exports for different products during the yearunder report:
| ||2017-18 ||2018-19 |
|Commodity/Product ||Value (Rs. in crores) ||Value (Rs. in crores) |
|Cigarette ||145.07 ||178.85 |
|Unmanufactured tobacco ||189.43 ||266.01 |
|Cut tobacco/CLB ||36.07 ||46.19 |
|Tea ||34.18 ||0.66 |
|Candy ||1.86 ||1.88 |
Overall exports of your Company were at Rs. 494 crores as against Rs. 407 crores in thelast financial year and there was improvement in gross margins as well. This growth hasprimarily been due to increase in business from major customers of unmanufactured tobaccoand good cigarette volumes across all Regions. This is also attributed to our focus onhigh margin business for both cigarettes and cut tobacco and some competitive costadvantage availed by the Company.
All out efforts are being made to develop new customers and new markets across variousgeographies for cigarette and tobacco exports. Your Company has been focusing on growth ofown brands and has been successful in seeding brands such as Stellar Originals Time 7and Business Kings in markets of Latin America / EEMA and South East Asia. Some newinitiatives are planned in a few markets of Latin America with our flagship brandJaisalmer. Also plans are to introduce innovative products in new formats such as Superslims.
The 24Seven chain of convenience stores had shown a rapid growth during FY 19 andopened 43 new stores. In 2018-19 gross sales value increased by 61% to Rs.308 crores fromRs.191 crores during previous year and number of stores increased from 61 to 104.
It has built a set of unique assets critical to success in this business and is nowfocusing on building sustainable scalable model for profitable growth and expansion.
HUMAN RESOURCE DEVELOPMENT
Your Company has been recognized as one of India's Best Places to Work primarily on thestrength of its people processes culture and the positivity built on the foundation oftrust pride & camaraderie among its workforce. Riding on the back of right strategicfocus on people and performance various initiatives have led to marked increase in energylevel morale & enthusiasm of employees resulting in superlative individual andorganizational performance. Empowerment of Line Managers on a number of initiatives takenis ensuring prevalence of right beliefs & behaviours winning mind-sets employeeengagement and long-term positive business outcomes.
CORPORATE DEVELOPMENT (GROWTH OFFICE)
Growth Office continues to play a pivotal role in executing the growth strategy of yourCompany. It holds end to end ownership along with the business teams for designing andtracking the strategic growth projects across the organization. The external and internalrisks are also identified to ensure suitable mitigation actions are initiated and thegrowth plan remains sacrosanct. Within this process stakeholder management is a criticalrole undertaken by this team towards development of the envisioned growth strategy. It isimperative that the strategy is cascaded to everyone in the organization; the GrowthOffice continues to support cross functional communication on this aspect as well.
INFORMATION TECHNOLOGY (IT)
The world of information technology is changing fast and we are continuously working onincreasing efficiency while reducing cost within various businesses using latesttechnology. We continue to leverage secure cloud based solutions like mailing and otherbusiness solutions. Last year we implemented a first of its kind cloud-based analyticsautomation. This gives us graphical visibility into all available data and helps us takedecisions based on data.
Our goal remains efficiency improvement. We have implemented robotics on some of ourprocesses which has resulted in faster and error free results. We have experimented withIoT at factory level which has given good results. These technologies will be expanded toother processes / factories to ensure we get benefits at scale. All this while securityremains our highest priority and we will continue to invest in state of the art securitysolutions.
Your Company continues to enjoy the highest rating of CRISIL A1+' for Short TermDebt Programme CRISIL AA+/Stable' for Long Term Loan CRISIL AA+/Stable' forfund based credit facilities and CRISIL A1+' for non-fund based facilities. Withthese ratings in place your Company is able to raise funds at most competitive terms.Following the principles of liquidity safety and tax efficient returns the Company hasbeen deploying its long term surplus funds primarily in debt oriented schemes of reputedmutual funds. Also the Company continued to park its temporary surpluses in liquidschemes of various mutual funds.
| ||2018-19 ||2017-18 |
| ||Rs. In Lakhs ||Rs. in lakhs |
|Profit before Depreciation Exceptional Items and Tax ||45855.55 ||30993.53 |
|Less : Depreciation and amortization ||9591.82 ||9564.73 |
|Profit before exceptional items and tax ||36263.73 ||21428.80 |
|Exceptional items ||- ||2000.00 |
|Profit before tax ||36263.73 ||23428.80 |
|Less : Provision for tax || || |
|- current tax ||12030.75 ||7100.69 |
|- deferred tax ||136.25 ||251.87 |
|Profit after tax for the year ||24096.73 ||16076.24 |
|Add: Other comprehensive income/(loss)-net of tax ||(182.62) ||474.84 |
|Total comprehensive income ||23914.11 ||16551.08 |
During the year the gross sales value registered a growth of 6.74% by reaching thelevel of Rs. 6194 crores from Rs. 5803 crores last year. Similarly the profit after taxjumped to Rs. 240.97 crores from Rs. 160.76 crores last year.
Your Directors are pleased to recommend the dividend of 500% i.e. Rs.10/- per equityshare of face value of Rs.2/- each. The proposed dividend (including tax thereon) willabsorb Rs. 6268.14 lakhs.
Your Company has not accepted any deposits covered under Chapter V of the CompaniesAct 2013 and hence no details pursuant to Rules 8(v) and 8(vi) of the Companies(Accounts) Rules 2014 are required to be reported.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as on 31st March 2019 isattached as Annexure - 1' to this Report.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
As on 31st March 2019 your Company had seven subsidiaries apart from oneother subsidiary which is an AOP and three associate companies. The basic details of thesecompanies form part of the extract of Annual Return given in Annexure - 1'.
Form AOC-1 containing the salient features of financial statements of the Company'ssubsidiaries and associates is attached as Annexure - 2'. Note 46 of theconsolidated financial statements shows the share of each subsidiary and associate companyin the consolidated net assets and profits of the Company. The audited financialstatements of these entities will be available for inspection during business hours at theRegistered Office of the Company. During the year the Company's subsidiary Unique SpaceDevelopers Limited divested its stake in step-down subsidiary Gopal Krishna Infrastructure& Real Estate Limited. Also the Company divested its stake in its associate SuccessPrinciples India Limited.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with Indian Accounting Standard (Ind AS-110) - Consolidated FinancialStatements Group Accounts form part of this Annual Report. The Group Accounts have beenprepared on the basis of financial statements received from the subsidiary and associatecompanies as approved by their respective Boards.
INTERNAL CONTROL SYSTEMS
Your Company has a robust system of internal controls commensurate with the size of theCompany and the nature of its business which ensures that transactions are recordedauthorised and reported correctly apart from safeguarding its assets against loss fromwastage unauthorised use and disposition.
The internal control systems are supplemented by well documented policies guidelinesand procedures which are in line with the internal financial control frameworkrequirements. There is an extensive programme of internal audit by a firm of charteredaccountants followed by periodic management reviews.
The Audit Committee actively reviews the adequacy and effectiveness of the internalcontrol systems and suggests improvements to strengthen the same.
CORPORATE SOCIAL RESPONSIBILITY
Our strategic CSR programme created with focus on sustainable development andlivelihood for Burley Tobacco farming communities in parts of Andhra Pradesh continueswith the main objective of improving the livelihood for the marginalised with initiativesto improve earning capacity through exposure to good agricultural practicescollectivisation of farmers/workers into Farmers Development Societies/SHGs water andsoil conservation measures and availability of safe drinking water health education andsanitation facilities. This year we touched 65 villages under the above program. As thecommunity and beneficiaries are directly associated with the industry the impact of theprogram has been positive and at a faster rate. The program was recognised by the officeof District Magistrate Andhra Pradesh Govt. and through awards like Greentech FoundationCSR Gold Award 2019 CSR Leadership Award 2019 and 8th Asia's Best CSRPractices Award 2018.
Other CSR initiative of the Company centres around promotion of healthcare andeducation in parts of Delhi NCR by holding health camps conducting HIV awarenessprograms operating life skill training centre for adult children holdingteacher-orientation session in primary schools connecting children to schools andfacilitating meritorious children through suitable means.
The Company has constituted a CSR Committee of the Board in accordance with theprovisions of Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014. The brief outline of the CSR policy overviewof the activities undertaken with amounts spent thereon during the year and composition ofthe Committee has been disclosed in Annexure - 3'.
Mr. Samir Modi (DIN 00029554) and Mr. Ruchir Kumar Modi (DIN 07174133) will retire byrotation at the ensuing Annual General Meeting in accordance with the provisions ofSection 152 of the Companies Act 2013 and being eligible offer themselves forre-appointment.
Mrs. Nirmala Bagri (DIN 01081867) was appointed as Additional Director w.e.f. 1stApril 2019 to serve as Woman Independent Director and holds office upto the date of theensuing Annual General Meeting. The Company has received notice pursuant to Section 160 ofthe Companies Act 2013 from one of its members proposing her candidature for appointmentas a Director.
As per the provisions of the Companies Act 2013 Independent Directors are required tobe appointed for a term of five consecutive years and shall not be liable to retire byrotation. Accordingly resolutions proposing re-appointment of Dr. Lalit Bhasin (DIN00001607) and Mr. Anup N. Kothari (DIN 00294737) as Independent Directors of the Companyfor another term of five years form part of the Notice of the ensuing Annual GeneralMeeting.
The Securities and Exchange Board of India ("SEBI") vide its notificationdated 9th May 2018 inserted Regulation 17(1A) to the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations') witheffect from 1st April 2019 whereby the listed Company shall not appoint orcontinue the directorship of a person who has attained the age of 75 years unless specialresolution is passed to that effect.
Therefore the appointment of Mrs. Nirmala Bagri who would attain the age of 75 yearsduring her proposed term as an Independent Director and re-appointment of Dr. Lalit Bhasinand Mr. Anup N. Kothari as an Independent Director who have already attained the age of75 years is recommended to be approved by passing special resolutions at the ensuing AGM.The Independent Directors of your Company have confirmed that (a) they meet the criteriaof Independence as prescribed under Section 149 of the Companies Act 2013 and Regulation16 of the SEBI (LODR) Regulations 2015 and (b) they are not aware of any circumstance orsituation which could impair or impact their ability to discharge duties with anobjective independent judgement and without any external influence. Further in theopinion of the Board the Independent Directors fulfill the conditions prescribed underthe Listing Regulations and are independent of the management of the Company.
The Board has recommended approval from shareholders by way of special resolution forpayment of remuneration to Mr. Ruchir Kumar Modi (DIN 07174133) for a further period ofthree years effective from 1st July 2019.
PERFORMANCE EVALUATION OF THE BOARD ETC.
Details pertaining to the manner in which evaluation of the Board its Committees andindividual Directors has been carried out form part of Corporate Governance Report.
KEY MANAGERIAL PERSONNEL
Mr. K.K. Modi Managing Director Mr. Samir Modi Executive Director Mr. SharadAggarwal Whole-time Director Mr. Sunil Agrawal Chief Financial Officer and Mr. SanjayGupta Company Secretary of the Company are deemed to be Key Managerial Personnel of theCompany as per the provisions of Companies Act 2013 and rules made thereunder.
Details of the meetings of the Board held during the year form part of the CorporateGovernance Report.
The composition functions and details of the meetings of the Audit Committee heldduring the year form part of the Corporate Governance Report.
Your Company considers that risk is an integral part of its business and therefore ittakes proper steps to manage all risks in a proactive and efficient manner. The Companymanagement periodically assesses risks in the internal and external environment andincorporates suitable risk treatment processes in its strategy and business and operatingplans. The details of practices being followed by the Company in this regard form part ofthe Corporate Governance Report. There are no risks which in the opinion of the Boardthreaten the very existence of your Company. However some of the challenges faced by ithave been dealt with under Management Discussion and Analysis which forms part of thisReport.
Details regarding constitution of Risk Management Committee its role &responsibility form part of the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 (theAct') the Directors to the best of their knowledge confirm that:
(i) in the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures if any; (ii)appropriate accounting policies have been applied consistently and judgements andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the period; (iii) proper and sufficient care has been taken formaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (iv) the Annual Accounts have been prepared on a going concernbasis; (v) the internal financial controls to be followed by the Company have been laiddown and such internal financial controls are adequate and are operating effectively; and(vi) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
The above statements were noted by the Audit Committee at its meeting held on 10thAugust 2019.
RELATED PARTY TRANSACTIONS
Form AOC-2 containing particulars of contracts or arrangements entered into by theCompany with related parties referred in Section 188(1) of the Companies Act 2013 isattached as Annexure - 4'.
Details of related party transactions and related disclosures are given in the notes tothe financial statements.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans guarantees and investments covered by the provisions of Section 186of the Companies Act 2013 are given in the notes to the financial statements.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
Details of Whistle Blower Policy/Vigil Mechanism form part of the Corporate GovernanceReport.
REMUNERATION AND NOMINATION POLICY
The appointment and remuneration of Directors is governed by the recommendation ofNomination and Remuneration Committee and then decided by the Board subject to approval ofthe shareholders.
The remuneration payable to the Directors is decided keeping into consideration longterm goals of the Company apart from the individual performance expected from adirector(s) in pursuit of the overall objectives of the Company.
The remuneration of Executive Director(s) including Managing Director(s) and Whole-timeDirector(s) is governed by the recommendation of Nomination and Remuneration Committee asper the criteria recommended by it and then approved by the Board subject to approval ofthe Shareholders.
The Non-executive Director(s) may be paid remuneration by way of commission either byway of monthly payments or specified percentage of net profits of the Company or partly byone way and partly by the other as may be recommended by Nomination and RemunerationCommittee and then decided by the Board subject to approval of the Shareholders.
In accordance with the provisions of the Articles of Association of the Company and theCompanies Act 2013 a sitting fees (presently fixed at Rs. 100000 per meeting) is paidto the Non-executive Directors of the Company who are not drawing any remunerationdescribed hereinabove for attending any meeting of the Board or of any Committee thereof.
The remuneration payable to Directors shall be governed by the ceiling limits specifiedunder section 197 of the Companies Act 2013.
The remuneration policy for other senior management employees including key managerialpersonnel aims at attracting retaining and motivating high calibre talent and ensuresequity fairness and consistency in rewarding the employees. The remuneration tomanagement grade employees involves a blend of fixed and variable component withperformance forming the core. The components of total remuneration vary for differentemployee grades and are governed by industry practices qualifications and experience ofthe employees responsibilities handled by them their potentials etc. Remuneration ofsenior management employees is also being looked at by the Nomination and RemunerationCommittee.
DIVIDEND DISTRIBUTION POLICY
As mandated by the Listing Regulations the Board has formulated a dividenddistribution policy and the same is attached as Annexure - 8' and is also availableon the Company's website.
KEY FINANCIAL RATIOS
Key Financial Ratios for the financial year 2018-19 with comparatives for the year2017-18 are disclosed in Annexure - 9'.
BUSINESS RESPONSIBILITY REPORT
As mandated by the Listing Regulations the Business Responsibility Report has beenincluded as part of the Annual Report.
UNCLAIMED SHARE CERTIFICATES
Status of the unclaimed shares as on 31st March 2019 has been mentioned inthe Report on Corporate Governance.
The Company is committed to maximise the value for its stakeholders by adopting theprinciples of good Corporate Governance in line with the provisions of law and inparticular those stipulated in the Listing Regulations. Its objective and that of itsmanagement and employees is to manufacture and market the Company's products in a way soas to create value that can be sustained over the long term for consumers shareholdersemployees business partners and the national economy in general. Certificate from theauditors of the Company regarding compliance of the conditions of Corporate Governance asstipulated in the Listing Regulations is enclosed.
Certificate from Mr. K.K. Modi Managing Director as the Chief Executive Officer (CEO)and Mr. Sunil Agrawal Executive Vice President Finance as the Chief FinancialOfficer (CFO) in relation to the financial statements for the year along with declarationby the CEO regarding compliance with the code of business conduct of the Company by thedirectors and the members of the senior management team of the Company during the yearwere submitted to and taken note of by the Board.
In compliance with the provisions of Section 139 and other applicable provisions of theCompanies Act 2013 and the Companies (Audit and Auditors) Rules 2014 (including anystatutory modification(s)/re-enactment(s)/ amendment(s) thereof for the time being inforce) S.R.Batliboi & Co. LLP Chartered Accountants (FRN 301003E) were appointed asStatutory Auditors at the Eightieth Annual General Meeting of the Company held on 15thSeptember 2017 to hold office for a term of five (5) consecutive years from theconclusion of the Eightieth Annual General Meeting until the conclusion of the EightyFifth Annual General Meeting subject to the ratification at the Annual General Meeting ineach of the subsequent years during the aforementioned term of their appointment. Howeverthe requirement of annual ratification has been dispensed with under the Companies(Amendment) Act 2017 which has been notified on 7th May 2018.
Auditors' Report on the financial statements of the Company forms part of the AnnualReport and doesn't contain any qualification reservation adverse remark or disclaimer.
The provisions of Cost Audit are not applicable on the Company.
M/s. Chandrasekaran Associates Practicing Company Secretaries have been appointed asthe Secretarial Auditor of the Company.
The Secretarial Audit Report for the year under review is attached as Annexure -5' and doesn't contain any qualification reservation adverse remark or disclaimer.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING
Pursuant to Clause 9 of Revised Secretarial Standard -1 (SS -1) your Company hascomplied with applicable Secretarial Standards issued by Institute of Company Secretariesof India during the financial year under review.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant and material order was passed by theRegulators/Courts that could impact the going concern status of the Company and its futureoperations.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as Annexure - 6'.
Pursuant to the provisions of Section 136(1) of the Act and as advised the statementcontaining particulars of employees as required under Section 197(12) of the Act read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 will be available for inspection at the Registered Office of the Company duringworking hours and Members interested in obtaining a copy of the same may write to theCompany Secretary and the same will be furnished on request. Hence the Annual Report isbeing sent to the Members excluding the aforesaid information.
CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are attached as Annexure -7'.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy on prevention prohibition and redressal of sexualharassment of women at work place in line with the requirements of the above Act. Underthe said policy an Internal Complaints Committee (ICC) has been set up to redresscomplaints received relating to sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy. During the year under review nocomplaint was filed with the Company.
Availability of best in the class manufacturing facilities with right blend oftechnology vast distribution network adequate financial resources stable tax regime andmotivated manpower will facilitate your Company to continue to drive growth across itsvarious businesses and product categories both in domestic and international markets. YourDirectors are confident that the Company will continue to create value for itsshareholders and other stakeholders.
Your Directors wish to place on record their sincere appreciation to the Governmentauthorities Company's bankers customers vendors investors and all other stakeholdersfor their continued support during the year. Your Directors are also pleased to recordtheir appreciation for the dedicated services of employees at all levels of operations inthe Company.
|Respectfully submitted on behalf of the Board |
|R.A. SHAH |
|New Delhi |
|Dated: 10th August 2019 |