TO THE SHAREHOLDERS
The Board of Directors are pleased to present their 61st Annual Reporttogether with the Audited Financial Statements of the Company for the financial year endedMarch 312019.
1. FINANCIAL RESULTS
| ||2018-19 ||2017-18 |
|Particulars ||Rupees in Lacs ||Rupees in Lacs |
|Gross total revenue ||66387.82 ||56142.13 |
|Net revenue ||61068.11 ||51310.97 |
|Earnings before interest depreciation tax & amortizations (EBIDTA before exceptional item) ||11640.17 ||10420.39 |
|Profit before tax ||9396.30 ||8743.75 |
|Provision for tax (FBT Current & Deferred tax) ||3025.13 ||2687.93 |
|Net profit after tax ||6371.17 ||6055.82 |
During the year under review Company recorded a 19.02% growth in Net revenues. Profitbefore tax registered a 7.46% growth and the Net profit of the Company improved by 5.21%.
Detailed information on the business operations and state of affairs of the Companyincluding full analysis and discussion on the business outlook is included the headingManagement Discussion and Analysis'.
3. MANAGEMENT DISCUSSION AND ANALYSIS
A detailed overview of the business operations and performance of all the segments ofthe Company including future outlook opportunities threats exports etc. is provided inthe Management Discussion and Analysis' as Annexure A' to this Report.
The Board of Directors has recommended a dividend @ 60% i.e. Re. 0.60 on Equity Sharesof Face Value of Re. 1/- each for the financial year ended March 312019 and seeks yourapproval for the same. The dividend paid for the previous financial year was 60% i.e. Re.0.60 on Equity Shares of Face Value of Re. 1/- each.
5. MATERIAL CHANGE
No material changes and commitments have occurred that affect the financial position ofthe Company between the end of the financial year 2018-19 and the date of this report.Further there has been no change in the nature of business of the Company.
There has been no change in the nature of business of the Company. However on the basisof resource allocation assessment of performance and review of operating statementsoperating segments have been reclassified into three segments viz. Surface FinishingsEngineering and Shoppertaintment.
6. CAPACITY EXPANSION AND MATERIAL EVENTS
Expansion of the Paints plant at Dadra unit was completed during the year. The expandedcapacity of this plant is now at 12000 KL p.a. Similarly an expansion of capacity formanufacture of Paints at Barotiwala unit was completed raising the capacity from 1200 KLp.a. to 3600 KL p.a.
An incident of explosion and fire took place at the Chemical Intermediate plant of theCompany situated at Vapi on January 12019 which leads to loss of building plant andmachinery and materials. No human injury or fatality was suffered. The production at thisplant came to a standstill impacting the Chemical Intermediates and Lubricant businesses.Since then the production of Lubricants as well as Chemicals has been partially restoredback. A claim has been lodged with the Insurance Company and the Company has received anad-hock amount against the claim. The loss on account of the accident has been providedfor in the Financial Statements of the financial year 2018-19.
7. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS
There were no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
8. SHARE CAPITAL
The paid up Equity Share Capital as at March 31 2019 stood at Rs. 2267.05 Lacs.During the year under review the Company has not issued shares with differential votingrights nor has it granted any Stock Options or Sweat Equity Shares. As on March 312019none of the Directors of the Company held instruments convertible into Equity Shares ofthe Company.
9. CORPORATE GOVERNANCE
In compliance with Regulation 34 of SEBI Listing Regulations a report on CorporateGovernance along with certificate from Statutory Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is annexed and forms an integralpart of this Report. (Annexure B')
During the year there is delay of 1 day in submitting the quarterly CorporateGovernance Report required to be submitted with the Stock Exchange pursuant to Regulation27(2) of SEBI Listing Regulations for the quarter ended December 312018 for which BSELtd. has imposed fine of Rs. 2000/- and the same has been paid. The delay in submittingthe report was mainly due to non availability of clarifications sought from BSE Ltd.
10. CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) initiatives of the Company are under thethrust area of Education Healthcare Preventive Healthcare Sanitation EnvironmentalSustainabilities and Ecological Balance etc. These activities are largely in accordancewith Schedule VII of the Companies Act 2013 and Company's CSR Policy which is availableon the website of Company (https://growel.com/subpage/Policy).
The report on CSR activities undertaken during the financial year ended March 312019as required under Section 135 of the Companies Act 2013 and Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out in Annexure C' forming part ofthis Report.
During the year under review CSR spending of the Company increased to Rs. 30.51 Lacs(Rs. 10.35 Lacs) against Rs. 141.39 Lacs to be spent as per Section 135 of the CompaniesAct 2013. Company continuously endeavors to increase its CSR expenditure and search ofspecific projects/programmes where Company can spent its CSR fund which will result intooverall social and economic growth development and prosperity of the communities residingin the vicinity of the operations of the Company. Despite undertaking various CSRactivities the Company was unable to spend the required amount since enough projects andopportunities were not available.
11. INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS AND THEIR ADEQUACY
The Company always believes that strong internal control framework is a base of anybusiness for its future growth expansion development and diversification and is a partof good governance practice. The Company has well defined adequate and strong internalcontrol system commensurate with the size scale complexity and nature of itsoperations. The Audit Committee periodically reviews the internal control systems andconsults the Internal Auditor Statutory Auditor of the Company on regular basis tostrengthen it from time to time.
Though as per provisions of Companies Act 2013 and SEBI Listing Regulations Companyis not required to form Risk Management Committee Company has a well defined process andsystems in place to ensure appropriate identification and mitigation of risks. ExecutiveDirectors along with senior management directly looking after risk management systemsrisk identification process its effectiveness formulation of mitigation plan correctiveactions for identified risks etc. on regular basis.
During the year M/s M. M. Nissim & Co. has been appointed as an Internal Auditorsof the Company who reports directly to the Board of Directors/Audit Committee/Chairman ofthe Company. The Internal Auditor monitors and evaluates the efficacy and adequacy ofinternal financial control system in the Company its compliance with operating systemsaccounting procedures and policies at all locations of the Company and its subsidiaries.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions thereon are presented to the Audit Committee of theBoard.
12. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has set up vigil mechanism through its Whistle Blower Policy framedpursuant to Section 177 of the Companies Act 2013 and the Regulation 22 of SEBI ListingRegulations to enable its Directors and employees to report genuine concerns about anyinstance of any irregularity breach of code of conduct abuse of authority fraudunethical behavior and/or misconduct directly to the Chairman of Audit Committee.
The Whistle Blower policy is available on the website of Company(https://growel.com/subpage/Policy). The policy ensures that strict confidentiality ismaintained whilst dealing with concerns and also that no discrimination will be meeted outto any person for a genuinely raised concern. The policy is reviewed by the AuditCommittee from time to time and no concerns or irregularities have been reported byemployees/directors during the financial year ended March 312019.
13. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return of the Company as on March 31 2019 in the prescribed FormNo. MGT-9 as per Section 92(3) of the Companies Act 2013 read with Rule 12 of Companies(Management & Administration) Rules 2014 is annexed hereto as Annexure D' andforms part of this Report. The same is also available on the website of the Company(https://growel.com/subpage/annual-report).
Pursuant to Section 134(3)(a) of the Companies Act 2013 Annual Return of the Companywill be available on the website of the Company ( https://growel.com/Page/investors)immediately after uploading with Ministry of Corporate Affairs (MCA) portal.
14. FIXED DEPOSITS
During the year under review the Company has not accepted any deposits from the publicfalling within the ambit of Section 73 and 74 of the Companies Act 2013 read with TheCompanies (Acceptance of Deposits) Rules 2014. There is no outstanding Deposit at thebeginning and end of financial year.
15. LOANS GUARANTEES AND INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 read with the Companies (Meetings of Board and its Powers)Rules 2014 as on March 31 2019 forms part of the notes to the Standalone FinancialStatements provided in this Annual Report.
16. RELATED PARTY TRANSACTIONS
All related party transactions affected during the financial year were on an arm'slength basis and were in the ordinary course of business. Except to the extent of theshares held in the Company and the remuneration paid if any there were no materiallysignificant related party transactions made by the company with Promoters Directors orKey Managerial Personnel or other designated persons which may have a potential conflictwith the interest of the company at large.
Prior omnibus approval of the Audit Committee is obtained for all the transactionswhich are of repetitive nature. A statement giving details of all related partytransactions were placed before the Audit Committee and the Board of Directors for theirapproval. The details of all the related party transactions as per Indian AccountingStandards (Ind AS) - 24 forms part of the notes to the Standalone Financial Statementsprovided in this Annual Report.
The duly approved policy on related party transactions are available on the website ofthe Company (www.growel.com/subpage/policies). Since all related party transactionsentered into by the Company were in the ordinary course of business and on an arm's lengthbasis and there were no material related party transactions Form AOC - 2 is notapplicable to the Company.
17. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
a. Retirement by rotation - Shri Rohitkumar More
As per provisions of Section 152 of the Companies Act 2013 and in terms of Articles ofAssociation of the Company Shri Rohitkumar More Whole-time Director of the Companyliable to retires by rotation at the forthcoming Annual General Meeting and beingeligible offered himself for re-appointment. The Board recommends his re-appointment.
Brief profile of the Director Companies in which he hold directorships andmemberships/chairmanships of Board and Committees shareholding and relationships betweenthe Directors inter-se as stipulated under Regulation 36(3) of the SEBI ListingRegulations forms part of the Notice of the Annual General Meeting and is annexed to thisAnnual Report.
In accordance with the provisions of Companies Act 2013 rules made thereunder theSEBI Listing Regulations 2015 and the Articles of Association of the Company AdditionalDirector Independent Directors and the Managing Director of the Company are not liable toretire by rotation.
b. Re-appointment of Independent Directors - Smt. Aarti Shah
In the 57th Annual General Meeting of the Company held on August 20 2015Members appointed Smt. Aarti Shah as Independent Non-Executive Director of the Company tohold office for a period of 5 (five) consecutive years w.e.f. October 24 2014 not liableto retire by rotation. Her term of appointment expires on October 23 2019. As perprovision of Section 149(10) of the Act Company by passing a Special Resolutionre-appoints Independent Director for another term of 5 years. Considering her knowledgeexperience and skill set in respective fields and based on contribution made by her duringlast five years the Board on the recommendations of the Nomination and RemunerationCommittee proposes her re-appointment as Independent Non-Executive Directors not liableto retire by rotation for another term of 5 years w.e.f. October 24 2019.
Smt. Aarti Shah gave declaration that she continue to meet the criteria of independenceas laid down under Section 149(6) of the Act and rules made thereunder Schedule IV of theAct and under the SEBI Listing Regulations. Based on the declaration provided by theDirector she is not disqualified from being appointed/re-appointed as Directors undersection 164 of the Act and is independent from the management.
Resolution for the aforementioned re-appointment along with brief profile of theDirector Companies in which she hold directorships and memberships/chairmanships of Boardand Committees shareholding and relationships between the Directors inter-se asstipulated under Regulation 36(3) of the SEBI Listing Regulations forms part of theNotice of the Annual General Meeting and is annexed to this Annual Report.
c. Independent Director
The Company continued to carries out training/familiarization programme for IndependentDirectors with a view to familiarize them with the business operations importantfunctions and other critical aspects of the business of the Company to enable them tocontribute on full informed basis and discharge their responsibilities effectivelydetails of which are set out in the Corporate Governance Report.
Pursuant to Section 149(7) of the Companies Act 2013 and Regulation I6(l)(b) of theSEBI Listing Regulations all the Independent Directors of the Company have givendeclarations to the Company that they meet the criteria of independence as required underthe Act Rules Schedules and the Regulations. In terms of Regulation 25(8) of the ListingRegulations the Independent Directors have confirmed that they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact their ability to discharge their duties.
d. Policy on appointment and remuneration of Directors
The Nomination & Remuneration Committee framed a policy for selection andappointment of Directors Senior Management Personnel and their remuneration. The same isavailable on website of Company (www.growel.com/subpage/policies).
e. Performance evaluation
Pursuant to the provisions of Companies Act 2013 and SEBI Listing Regulationsevaluation of the performance of individual Directors including Independent DirectorsCommittees of the Board and the Board as a whole for the financial year 2018-19 wascarried out by the Board on the basis of parameters and process suggested by theNomination and Remuneration Committee for performance evaluation.
Further Independent Directors at a separate meeting evaluated performance of theNon-Independent Directors Board as a whole and of the Chairman of the Board. Board ofDirectors was satisfied with the evaluation process. Manner in which the evaluation hasbeen carried out and matters incidental thereto have been detailed in the CorporateGovernance Report which forms part of this report.
f. Meeting of Board and Committee
A calendar of board meetings and committee meetings is prepared and circulated inadvance to the Directors. During the year 4 (four) board meetings and 4 (four) auditcommittee meetings were convened and held the details of which are given in the CorporateGovernance Report. The intervening gap between the meetings was within the periodprescribed under the Companies Act 2013.
g. Board Committees
Currently Board has Four Committees viz. Audit Committee Nomination and RemunerationCommittee CSR Committee and Stakeholders Relationship Committee. Detailed note on thecomposition of committees numbers of meetings held during the year and other relateddetails are provided in the Corporate Governance Report.
h. Key Managerial Personnel
Shri Nirajkumar More-Managing Director (DIN : 00113191) Shri Vinod Haritwal - CEO& Director (DIN : 00112862) Shri Gurinder Singh Gulati-Chief Financial Officer (FCANo. 90728) and Shri Chintan K. Gandhi - Company Secretary (ACS No. : 21369) are theWhole-time Key Managerial Personnel of the Company as on the date of this Report.
18. POLICY ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has been employing about 90 women employees in various cadres. The Companyhas in place a Sexual Harassment Policy in line with the requirements of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Internal Complaint Redressal Committee has been constituted to redress the complaint ofSexual Harassment. All women employees (permanent contractual temporary trainees) arecovered under the policy. During the financial year 2018-19 no complaint was receivedfrom any employee. No complaint is outstanding as on March 31 2019 for redressal.
19. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of our knowledge and belief and according to the information andexplanations obtained by us we make the following statements in terms of Section134(3)(c) of the Companies Act 2013:
a. that in the preparation of annual financial statements for the year ended March 312019 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b. that such accounting policies as mentioned in Note No. I of the Notes to thefinancial statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on March 31 20I9 and of the profit of theCompany for the year ended on that date;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
20. SUBSIDIARY & ASSOCIATES COMPANIES
As on date Company has 3 (three) Overseas Subsidiaries viz. Grauer & Weil(Shanghai) Limited in China Grauer & Weil (UK) Limited in United Kingdom and GrowelChemicals Co. Limited in Thailand. During the year the Board of Directors reviewed theaffairs of Subsidiaries.
During the year under review Company also has 3 (three) Associates Companies viz.Grauer & Weil (Thailand) Co. Limited Grauer & Weil Engineering Private Limited(Previously known as Growel Goema (India) Private Limited) and Growel Sidasa IndustriesPrivate Limited.
There has been no material change in the nature of business of subsidiary and associateCompanies. Statement containing salient features of financial statements of subsidiariesand associates Companies pursuant to section 129 of the Companies Act 2013(Act") read with Rule 5 of the Companies (Accounts) Rules 2014 in theprescribed format AOC - 1 is annexed to this Report. Details of the Subsidiariesand Associates Companies form part of financial statements.
21. CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Companies Act 2013 Regulation 33 of SEBI ListingRegulations and IND AS 21 the Annual Audited Consolidated Financial Statements of theCompany for the financial year 2018-19 together with the Auditors' Report form part ofthis Annual Report.
22. AUDITORS AND AUDIT REPORTS
a. Statutory Auditors
At the 59th Annual General Meeting held on September 25 2017 M/s SCA &Associates Chartered Accountants (ICAI Firm Registration No. 101174W) were appointed asstatutory auditors of the Company to hold office till the conclusion of the 64thAnnual General Meeting of the Company to be held in the calendar year 2022 subject toratification by the shareholders every year.
Pursuant to the amendment of Section 139 of the Act ratification of appointment of theStatutory Auditors at every Annual General Meeting is no longer required and accordinglythe notice of Annual General Meeting does not include the proposal for seekingshareholders' approval for ratification of appointment of Statutory Auditors. In terms ofthe SEBI Listing Regulations the auditors have confirmed that they hold a validcertificate issued by the Peer Review Board of the ICAI.
The Company has obtained a Eligibility Certificate from M/s SCA & Associates underSection 139(1) of the Companies Act 2013 that appointment is in accordance with theprovisions of Section 141 of the Companies Act 2013 and they are not disqualified to becontinued as Auditors of the Company under Section 141(3) of the Companies Act 2013.
b. Cost Auditors
Pursuant to the provisions of Section 148 of the Companies Act 2013 and rules madethereunder Board has appointed the M/s V J. Talati & Co. as Cost Auditors forconducting the audit of cost records of the Company for the financial year 2018-19. TheCompany has received consent from M/s V. J. Talati & Co. Cost Accountants toact as the Cost Auditors for conducting audit of the cost records for the financial year2019-20. The Board on the recommendation of Audit Committee and based on consent letterhas re-appointed M/s V. J. Talati & Co. Firm of Cost Auditors as CostAuditors of the Company for the financial year 2019-20.
The remuneration payable to Cost Auditors is subject to ratification by shareholders atthe ensuing Annual General Meeting. Accordingly resolution seeking Members' ratificationof their remuneration forms part of the Notice convening the 61st AnnualGeneral Meeting.
c. Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder Board had appointed M/s GMJ & Associates Firm of Practicing CompanySecretaries to undertake the Secretarial Audit of the Company for the financial year2018-19. The Secretarial Audit Report for the financial year ended March 312019 isannexed herewith marked as Annexure E' to this Report.
The Board on the recommendation of Audit Committee has re-appointed M/s GMJ &Associates Firm of Practicing Company Secretaries as Secretarial Auditor of the Companyfor the financial year 2019-20.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pursuant to Section I34(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 regarding details of conservation ofenergy technology absorption and foreign exchange earnings and outgo are given in AnnexureF' to this Report.
24. PARTICULARS OF EMPLOYEES
Information required under Section 197 of the Companies Act 2013 and Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof Directors and employees of the Company is annexed to this Report as AnnexureG'. Information pursuant to Rule 5(2) & 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 will be provided upon request andsame is available for inspection to the Members at the Registered Office of the Company onany working days between 10.00 am to 12.00 noon upto the date of the Annual GeneralMeeting. If any Member is interested in obtaining a copy thereof such Member may write tothe Company Secretary in this regard.
25. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has substantially complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meetings.
26. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 125 of the Companies Act 2013 read with InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") all dividends which remain unclaimed for a period of 7 (seven)years are transferred to the IEPF. Further the shares on which dividend has not beenclaimed by the shareholders for 7 (seven) consecutive years or more are transferred to thedemat account of the IEPF Authority.
During the year the Company has received a Notice from Investor Education andProtection Fund Authority under section 206(4) of the Companies Act 2013 calling forinformation or explanations from the financial year 2005-06 on compliance of Section124(6) of the Companies Act 2013 of which Company has submitted the information whichwas available at that time and is in the process of submitting a detailed reply.
27. SAFETY ENVIRONMENTAL CONTROL AND PROTECTION
The Company has cordial industrial relations throughout the year. All the necessarysteps were taken by the Company for safety environmental control and protection at allits plants. Recognizing the important role play by the workers/employees of the Companyin growth development and diversification of the business health and safety of theworkforce is the prime importance for the Company. All plants of the Company fully complywith the laws regulations and requirements stipulated by the concerned Pollution ControlBoards.
The Equity Shares of the Company are at present listed with BSE Limited PhirozeJeejeebhoy Towers Dalal Street Mumbai - 400 001. The Company is regular in payment oflisting fees.
29. SIGNIFICANT BENEFICIAL OWNER
Attention of the Members are invited to the Companies (Significant BeneficialOwnership) Amendment Rules 2019 issued by the Ministry of Corporate Affairs whereby aperson is considered as a Significant Beneficial Owner (SBO) if he/she whether actingalone together or through one or more individuals or trust holds a beneficial interest ofat least 10%. The beneficial interest could be in the form of a company's shares or theright to exercise significant influence or control over the company. If any Shareholdersholding shares in the Company on behalf of other or fulfilling the criteria as mentionedin the Companies (Significant Beneficial Ownership) Amendment Rules 2019 is required togive a declaration specifying the nature of his/her interest and other essentialparticulars in the prescribed manner and within the permitted time frame.
The Board wishes to put on record their appreciation for the continues assistanceco-operation and support of all the Bankers shareholders suppliers distributorsagents customers and associates. Their efforts continue to be integral to our Company'songoing success.
The Board also place on record their sincere gratitude and appreciation for all theemployees/workers/staff at all levels for their hard work solidarity co-operation anddedication during the year.
|Registered Office: ||For & on behalf of the Board of || |
|Growel Corporate ||Grauer & Weil (India) Limited || |
|Akurli Road Kandivli [East] || || |
|Mumbai - 400 101 || || |
|Date : May 16 2019 ||Nirajkumar More ||Vinod Haritwal |
| ||Managing Director ||CEO & Whole-time Director |