Bata India Ltd.
|BSE: 500043||Sector: Others|
|NSE: BATAINDIA||ISIN Code: INE176A01028|
|BSE 15:57 | 16 Jan||728.15||
|NSE 15:47 | 16 Jan||727.60||
|Mkt Cap.(Rs cr)||9,358|
|Mkt Cap.(Rs cr)||9358.18|
Bata India Ltd. (BATAINDIA) - Director Report
Company director report
Your Directors are pleased to present the 84th Annual Report covering theoperational and financial performance of your Company along with the Audited FinancialStatements for the financial year ended March 312017.
(Rs. in Million)
Your Company has prepared the Financial Statements for the financial year ended March31 2017 under Section 133 of the Companies Act 2013 read with the Companies (IndianAccounting Standards) Rules 2015 and has recast the Financial Statements relating to theprevious financial year ended March 31 2016 in orderto make them comparable.
During the financial year ended March 312017 your Company recorded a turnover ofRs.24972.4 Million as compared to the turnover of Rs.24485.9 Million recorded during theprevious financial year ended March 312016. The Net Profit of your Company for thefinancial year ended March 31 2017 stood at Rs.1587.5 Million as against the Net Profitof Rs.2175.9 Million for the financial year ended March 31 2016. However the Net Profitfor the financial year ended March 31 2017 included one-time Exceptional expense ofRs.216.7 Million whereas the Net Profit for the financial year ended March 31 2016included one-time Exceptional income of Rs.747.1 Million. Accordingly the Profit beforeExceptional Items and Tax for the financial year ended March 312017 reflects a growth of15% over the corresponding Profit for the financial year ended March 312016. Details ofthe Exceptional Items for both the aforesaid financial years have been mentioned in NoteNo.26 of the Notes to the Financial Statements in this Annual Report.
On a consolidated basis your Company recorded a turnover of Rs.25043.4 Million duringthe financial year ended March 31 2017 and achieved consolidated Net Profits ofRs.1589.5 Million forthe said financial year.
Your Company has been the leading footwear brand of choice for its style comfort andquality at affordable price. During the year under review your Company endeavored tomaintain the stature with an added focus to tap the fashion conscious youth working womenand children through introduction of newer and trendier styles of footwear and has alsolaunched premium collections of footwear for men and women. Over the past couple of yearsthere have been considerable changes in customers' shopping preferences. Technologicaladvancements and availability of smartphones have resulted in exponential growth of onlinebusinesses especially in retail segment. Your Company's e-commerce website had witnesseda great response as it caters to evolving shopping habits of the consumers who look forease and convenience. Your Company being the market leader in the organized footwearsector over the past several decades always endeavors to meet the expectations of itsstakeholders and takes all steps possible to enhance the Bata brand value.
The Authorized Share Capital of your Company as on March 31 2017 stands at Rs.700000000/- divided into 140000000 equity shares of Rs. 5/- each. The Issued ShareCapital of your Company is Rs. 642850000/- divided into 128570000 equity shares of Rs.5/- each and the Subscribed and Paid-up Share Capital is Rs. 642637700/- divided into128527540 equity shares of Rs. 5/- each fully paid-up.
Your Board has recommended a dividend of Rs.3.50 per share on an Equity Share of Rs.5/- each (i.e. 70%) for the financial year ended March 31 2017. The dividend ifdeclared by the Members at the forthcoming Annual General Meeting (AGM) shall be paid tothe eligible Members of the Company from Friday July 28 2017 onwards. The total payoutof aforesaid dividend would be approximately Rs.450 Million excluding the corporatedividend distribution tax as applicable.
The recommendation of aforesaid dividend is in line with the Dividend DistributionPolicy of the Company approved by your Board. The said Dividend Distribution Policy hasbeen uploaded on the website of your Company www.bata.in and is available at thelink http://bata.in/0/pdf/DividendDistributionPoiicy-BiL.pdf .
The Company has not transferred any amount to the General Reserve during the financialyear ended March 312017.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THEFINANCIAL YEAR AND DATE OF REPORT
Subsequent to the end of the financial year on March 31 2017 till date there has beenno material change and/or commitment which may affectthe financial position ofthe Company.
During the year under review ICRA Limited (ICRA) has reaffirmed the Credit Rating of'[ICRA]AA+' (pronounced as ICRA double A plus) for the Non-Fund Based Facilities of yourCompany. The outlook on the Long Term Rating is 'Stable'.
Your Company has no unclaimed / unpaid matured deposit or interest due thereon sinceDecember 31 2013. Your Company has not accepted any deposits covered under 'Chapter V -Acceptance of Deposits by Companies' under the Companies Act 2013during the financialyear ended March 312017.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
In terms of Section 186 of the Companies Act 2013 and Rules framed thereunder detailsof the Loans given and Investments made by your Company have been disclosed in Note No. 5of the Notes to Financial Statements for the year ended March 31 2017 which forms partof this Annual Report. Your Company has not given any guarantee or provided any securityduring the year under review.
RELATED PARTY TRANSACTIONS
During the financial year ended March 31 2017 all transactions with the RelatedParties as defined under the Companies Act 2013 read with Rules framed thereunder were inthe 'ordinary course of business' and 'at arm's length' basis. Your Company does not havea Material Unlisted Subsidiary' as defined under Regulation 16(1)(c) ofthe SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ['ListingRegulations']. Your Board shall formulate a Policy to determine Material UnlistedSubsidiary as and when considered appropriate in the future.
During the year under review your Company did not have any Related Party Transactionwhich required prior approval of the Members. All Related Party Transactions of yourCompany had prior approval of the Audit Committee and the Board of Directors.Subsequently the Audit Committee and the Board have reviewed the Related PartyTransactions on quarterly basis. Your Company has an internal mechanism for the purpose ofidentification and monitoring of Related Party Transactions.
There has been no materially significant Related Party Transactions during the yearunder review having potential conflict with the interest of the Company. Necessarydisclosures required under the Ind AS-24 have been made in the Note No. 38 of the Notes tothe Financial Statements for the year ended March 31 2017.
Your Company has three Subsidiaries. Bata Properties Limited and Way Finders BrandsLimited continue to be wholly- owned subsidiaries of your Company whereas CoastalCommercial & Exim Limited continues to be the step down wholly-owned subsidiary ofyour Company.
The Annual Reports of these Subsidiaries will be made available for inspection by theMembers of the Company at the Registered Office of the respective subsidiary Companies andat the Registered Office of your Company at 27B Camac Street 1st Floor Kolkata - 700016between 11:00 a.m. and 1:00 p.m. on any working day. Annual Reports along with the AuditedFinancial Statements of each of the Subsidiaries of your Company are also available on thewebsite of the Company at www.bata.in . The Annual Reports of the abovementionedSubsidiaries for the financial year ended March 31 2017 shall be provided to the Membersof the Company upon receipt of written requests from them.
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of Companies (Accounts of Companies) Rules 2014 a statement containing salientfeatures of financial statements of the aforesaid Subsidiaries has been provided in FormNo. AOC-1 and included in this Annual Report.
The Audited Consolidated Financial Statements (CFS) of your Company for the financialyear ended March 312017 as prepared in compliance with the provisions of Ind AS-27issued by the Institute of Chartered Accountants of India are also forming part of thisAnnual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the Form No. MGT-9 as on March 31 2017 is annexed tothis Board's Report and marked as Annexure I.
AUDIT AND AUDITORS
(i) Change in Auditors
In terms of the provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. S. R. Batliboi & Co. LLP CharteredAccountants (ICAI Firm Registration No. 301003-E / E-300005) the Auditors of your Companyshall hold office till the conclusion of the ensuing AGM and they shall not be eligiblefor re-appointment due to expiry of the maximum permissible tenure as the Auditors of yourCompany. Your Board places on record its deep appreciation for the valuable contributionsof the Auditors during their long association since the inception of your Company andwishes them success in the future.
Based on the recommendation of the Audit Committee your Board at its meeting held onFebruary 9 2017 appointed M/s. B S R & Co. LLP Chartered Accountants (ICAI FirmRegistration No. 101248-W / W-100022) as the Auditors of the Company in place of theretiring auditors M/s. S. R. Batliboi & Co. LLP Chartered Accountants to hold officefrom the conclusion of the ensuing 84th AGM until conclusion of the 89thAGM of your Company to be held in the year 2022 subject to approval of the Members of theCompany at the ensuing AGM and ratification by the Members of the Company every yearthereafter if required.
Your Company has received a certificate from M/s. BSR & Co. LLP CharteredAccountants confirming their eligibility to be appointed as Auditors of the Company interms of the provisions of Section 141 of the Companies Act 2013 and Rules framedthereunder. They have also confirmed that they hold a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India (ICAI) as required underthe provisions of Regulation 33 of the Listing Regulations. The proposal for theirappointment has been included in the Notice convening the 84th AGM forobtaining approval of the Members of the Company.
(ii) Secretarial Auditor
In terms of the provisions of Section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourBoard at its meeting held on February 9 2017 appointed M/s. P Sarawagi & AssociatesCompany Secretaries 27 Brabourne Road Kolkata - 700001 as the Secretarial Auditorsofthe Company to conduct the Secretarial Audit forthe financial year ended March 31 2017and to submit Secretarial Audit Report in Form No. MR-3.
A copy of the Secretarial Audit Report received from M/s. P Sarawagi & Associatesin the prescribed Form No. MR-3 is annexed to this Board's Report and marked as AnnexureII.
(iii) Qualification reservation or adverse remark in the Auditors' Reports andSecretarial Audit Report
There is no qualification reservation or adverse remark made by the Auditors in theirAuditors' Reports to the Financial Statements (Standalone and Consolidated) or by theSecretarial Auditor in their Secretarial Audit Report for the financial year ended March31 2017.
SIGNIFICANT AND MATERIAL LITIGATIONS / ORDERS
During the year under review there were no significant material orders passed by theRegulators / Courts and no litigation was outstanding as on March 312017 which wouldimpact the going concern status and future operations of your Company. The details oflitigation on tax matters are disclosed in the Auditors' Report and Financial Statementswhich forms part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
In compliance with the provisions of Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 a statement containing information onconservation of energy technology absorption foreign exchange earnings and outgo of theCompany in the prescribed format is annexed to this Board's Report and marked asAnnexure III.
RESEARCH & DEVELOPMENT ACTIVITIES AND ENERGY CONSERVATION
During the year under review your Company's Research & Development activitiesincluded technological improvement of the products introduction of advanced footwearmoulds and improvement in manufacturing processes. Such activities resulted in improvingthe quality of footwear and productivity in manufacturing. Your Company incurred anexpenditure of approx. Rs.59.6 Million on Research & Development (including productdevelopment initiatives) as against Rs.62 Million spent during the year 2015-16. YourCompany has adopted a series of energy conservation measures like replacing conventionaltubes with energy efficient LED lights installation of energy efficient screwcompressors etc. at its Manufacturing Units across India. Such energy saving measures ledto a savings of energy cost worth approx. Rs. 7.4 Million during the year under review.Your Company shall continue to invest on Research & Development activities and energysaving measures in its manufacturing units in the future as well. Your Company continuedto emphasize on creating a pollution-free and a safe work environment for its employees.
CORPORATE SOCIAL RESPONSIBILITY
Your Board has constituted a Corporate Social Responsibility (CSR) Committee of theBoard under the Chairmanship of an Independent Director. A CSR sub-committee comprising ofSenior Executives of the Company and a dedicated CSR team undertake and monitor all CSRprojects of your Company. Compositions of CSR Committee of your Company and other relevantdetails have been provided in the Corporate Governance Report which forms part of thisAnnual Report.
During the year under review as part of its CSR activities your Company focused onpromotion of educational initiatives by supporting the schools near its area ofoperations. Your Company contributed to the "Prime Minister's Swachh BharatAbhiyan" by building toilets and facilities for drinking water and hand wash in thesemi urban and rural schools. It also participated in the "Prime Minister's SkillIndia campaign" by enhancing employability skills of the underprivileged youth. Inaddition to such core CSR areas your Company has always remained sensitive to theunderprivileged people of the society and support them in improving their lives with theaim to eradicate poverty promote preventive healthcare and promote education. Furtheryour Company also donated shoes to the affected people in areas hit by natural calamities/disasters and also to the underprivileged children under its campaign "No childshould walk barefoot". Your Company spent over Rs.60 Million i.e. more than 2% ofthe average net profits for the past three years towards various CSR activities duringthe financial year ended March 31 2017.
Pursuant to the provisions of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Annual Report on CSRActivities has been annexed to this Board's Report and marked as Annexure IV.
SUPPORT FROM BATA SHOE ORGANIZATION
Your Company continues to receive supports from the Holding Company - Bata (BN) BV.Amsterdam The Netherlands and also from Bata Shoe Organization (BSO). Your Company alsoenjoys the benefits of technical research through Global Footwear Services Pte. Ltd.Singapore (GFS). Your Company has renewed the Technical Collaboration Agreement with GFSwith effect from January 1 2011 for a period of ten years. In terms of the said TechnicalCollaboration Agreement your Company receives guidance training of personnel andservices from GFS in connection with research & development marketing branddevelopment footwear technology testing & quality control store location layout& design environment health & safety risk & insurance management etc. YourCompany continues to obtain expertise and experience from the personnel of GFS and otherBSO group Companies to improve its product range and operational processes throughout theyear. In terms of the renewed Agreement as aforesaid your Company has paid a technicalservices fee of Rs. 233.5 Million to GFS during the financial year ended March 31 2017which is less than 1% ofthe Turnover ofyour Company.
BOARD OF DIRECTORS AND BOARD MEETINGS
Your Company's Board is duly constituted which is in compliance with the requirementsof the Companies Act 2013 the Listing Regulations and provisions of the Articles ofAssociation of the Company. Your Board has been constituted with requisite diversitywisdom and experience commensurate to the scale of operations of your Company.
During the year under review a total of five Meetings of your Board of Directors washeld i.e. on May 30 2016; August 3 2016; November 25 2016; December 21 2016 andFebruary 9 2017. Details of Board composition and Board Meetings held during thefinancial year2016-17 have been provided in the Corporate Governance Reportwhich formspart of this Annual Report.
During the year under review there has been no change in the Board of Directors of yourCompany which indicates continuity of your Board. At the 83rd AGM your Companyheld on August 4 2016 approval of the Members was obtained to the re-appointment of Mr.Rajeev Gopalakrishnan as the Managing Director of your Company and appointment of Mr. RamKumar Gupta as the Director Finance for a period of five years from the date of theirrespective appointments on your Board. Your Board is of the opinion that continuousassociation of Mr. Rajeev Gopalakrishnan and Mr. Ram Kumar Gupta with the Board shall bebeneficial to your Company and help it achieve its desired business goals. At theaforesaid AGM the Members also approved the appointment of Mr. Christopher Kirk as aDirector of your Company liable to retire by rotation.
Mr. Shaibal Sinha Non-Executive Director is due to retire by rotation at the ensuingAGM and being eligible offers himself for re-appointment. A brief profile along withnecessary disclosures of Mr. Shaibal Sinha has been annexed to the Notice convening theensuing AGM and forms an integral part of this Annual Report. Your Board recommendsre-appointment of Mr. Shaibal Sinha as a Director of the Company liable to retire byrotation.
Mr. Uday Khanna Mr. Ravindra Dhariwal Mr. Akshay Chudasama and Ms. Anjali BansalIndependent Directors of your Company have declared to the Board of Directors that theymeet the criteria of Independence as laid down in Section 149(6) of the Companies Act2013 and Regulation 16(1)(b) of the Listing Regulations and there is no change in theirstatus of Independence. Your Board places on records its deep appreciation for theircontinuous guidance support and contribution to the Management of the Company in itspursuit to achieve greater heights.
Mr. Rajeev Gopalakrishnan Managing Director & Chief Executive Officer Mr. RamKumar Gupta Director Finance & Chief Financial Officer and Mr. Maloy Kumar GuptaCompany Secretary & Compliance Officer continue to be the Key Managerial Personnel ofyour Company.
The Board of Directors of your Company has a duly constituted Audit Committee in termsof the provisions of Section 177 of the Companies Act 2013 read with the Rules framedthereunder and Regulation 18 of the Listing Regulations. The terms of reference of theAudit Committee has been approved by the Board of Directors. Composition of the AuditCommittee number of meetings held during the year under review brief terms of referenceand other details have been provided in the Corporate Governance Report which forms partof this Annual Report. Recommendations made by the Audit Committee are generally acceptedby your Board.
NOMINATION AND REMUNERATION POLICY
Your Board has adopted a Remuneration Policy for identification selection andappointment of Directors Key Managerial Personnel (KMPs) and Senior Management Personnel(SMPs) of your Company. The Policy provides for criteria for fixing remuneration of theDirectors KMPs SMPs as well as other employees of the Company. The Policy enumerates thepowers roles and responsibilities of the Nomination and Remuneration Committee.
Your Board on the recommendations of the Nomination and Remuneration Committeeappoints Director(s) of the Company based on his / her eligibility experience andqualifications and such appointment is approved by the Members of the Company at GeneralMeetings. Generally the Managing Director and Whole-time Directors (Executive Directors)are appointed for a period of five years. Independent Directors of the Company areappointed to hold their office for a term up to five consecutive years on the Board ofyour Company. Based on their eligibility for re-appointment the outcome of theirperformance evaluation and based on the recommendation by the Nomination and RemunerationCommittee the Independent Directors may be re-appointed by the Board for another term offive consecutive years subject to approval of the Members of your Company. The DirectorsKMPs and SMPs shall retire as per the applicable provisions of the Companies Act 2013 andthe policy of the Company. While determining remuneration of the Directors KMPs SMPs andother employees the Nomination and Remuneration Committee ensures that the level andcomposition of remuneration
are reasonable and sufficient to attract retain and motivate them and insure thequality required to run the Company successfully the relationship of remuneration toperformance is clear and meets appropriate performance benchmarks and such remunerationcomprises a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working ofthe Company and its goals. The Companyfollows a compensation mix offixed pay benefits allowances perquisites performancelinked incentives and retirement benefits for its Executive Directors KMPs SMPs andother employees. Performance Linked Incentive is determined by overall businessperformance of your Company. Annual increments are decided by the Nomination andRemuneration Committee within the salary scale approved by the Board and Members of theCompany. The Company pays remuneration to Independent Directors by way of sitting fees andcommission on the net profits ofthe Company. Non-Executive Directors of your Company donot accept any sitting fees / commission on the net profits from the Company. Remunerationto Directors is paid within the limits as prescribed under the Companies Act 2013 and thelimits as approved by the Members of the Company from time to time.
The aforesaid Nomination and Remuneration Policy has been uploaded on the website ofyour Company www.bata.in and is available at the link: http://bata.in/0/pdf/Remuneration-Policy_2015.pdf. Your Company conducts a Board Evaluation process for the Board of Directors as awhole Board Committees and also for the Directors individually through self-assessmentand peer assessment. The details of Board evaluation for the year 2016-17 have beenprovided in the Corporate Governance Report which forms part of this Annual Report.
DISCLOSURES ON REMUNERATION OF DIRECTORS AND EMPLOYEES OF THE COMPANY
Information as required under Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014and subsequent amendments thereto is annexed to this Board's Report and marked asAnnexure V.
A statement containing the Information of top ten employees in terms of remunerationdrawn and particulars of every employee ofthe Company who was in receipt of remunerationnot less than the limits specified under Section 197(12) of the Companies Act 2013 readwith Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and subsequent amendments thereto is annexed to this Board'sReport and marked as Annexure VI.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to provisions of Section 134 of the Companies Act 2013 the Directors to thebest of their knowledge and belief hereby confirmthat:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2017 and of the profit of theCompany for that period;
(c) they have taken proper and sufficient care 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) they have prepared the annual accounts on a going concern basis;
(e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
(f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
In terms of provisions of Section 177 of the Companies Act 2013 and Rules framedthereunder read with Regulation 22 of the Listing Regulations your Company has a vigilmechanism in place for the Directors and Employees of the Company through which genuineconcerns regarding various issues relating to inappropriate functioning of theorganization can be communicated. For this purpose your Board has a Whistle Blower Policyand has been uploaded on the website of the Company at www.bata.in and the same isavailable at the link http://bata.in/0/pdf/Whistle-Blower-Policypdf . A VigilMechanism Committee under the Chairmanship of the Audit Committee Chairman has beenconstituted. The Policy provides access to the Head of Legal Department of the Company andto the Chairman of the Audit Committee in certain circumstances.
No person has been denied an opportunity to have access to the Vigil MechanismCommittee including the Audit Committee Chairman. During the year under review there hasbeen no incidence reported which requires action by the Vigil Mechanism Committee.
POLICY ON PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
Your Company has adopted a Policy under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder. YourCompany is committed to provide a safe and secure environment to its women employeesacross its functions and other women stakeholders as they are considered as integral andimportant part of the Organization.
An Internal Complaints Committee (ICC) with requisite number of representatives hasbeen set up to redress complaints relating to sexual harassment if any received fromwomen employees and other women associates. All employees (permanent contractualtemporary trainees) are covered under this policy which also extends to cover all womenstakeholders of the Company.
The following is a summary of sexual harassment complaints received and disposed offduring the financial year ended March 31 2017:
No. of Complaints received : NIL
No. of Complaints disposed off : Not Applicable
Your Company has been conducting awareness campaign across all its manufacturing unitswarehouses retails stores and office premises to encourage its employees to be moreresponsible and alert while discharging their duties.
RISK MANAGEMENT AND ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company's internal financial control ensures that all assets of the Company aresafeguarded and protected proper prevention and detection of frauds and errors and alltransactions are authorized recorded and reported appropriately. Your Company operatesthrough definitive Chart of Authorities (COAs) and Standard Operating Procedures (SOPs) inrespect of its operations including financial transactions. Such COAs and SOPs areregularly monitored and if required modified from time to time depending on businessrequirements.
Your Company has an adequate system of internal financial controls commensurate withits size and scale of operations which includes policies and procedures pertaining tomaintenance of records containing reasonable details accurate and fair reflectionsoffinancial transactions and dispositions ofthe assets ofthe Company.
Such practice provides reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with the applicablelegislations and that the same are well within the COAs and SOPs without exception. YourCompany also monitors through its Internal Audit Team the requirements of processes inorder to prevent or timely detect unauthorized acquisition use or disposition of theCompany's Assets which could have a material effect on the Financial Statements of theCompany.
The Audit Committee of your Board has devised a Risk Management Policy approved byyour Board which outlines the risk management framework for the functions involved withinyour Company. As per the said Policy Risk Management Committee of your Board has beenentrusted with the role and responsibilities to formulate monitor and review riskmanagement plans of your Company.
The Internal Audit Report and Risk Inventory Report are reviewed periodically by theAudit Committee of the Board of Directors. The Chief Internal Auditor is a permanentinvitee to the Audit Committee Meetings. The Audit Committee advises on various riskmitigation exercises on a regular basis. Your Company has been maintaining a separateInternal Audit Team headed by the Chief Internal Auditor appointed by the Audit Committeeof your Board.
Your Board has also constituted a Risk Management Committee comprising of the Directorsand Senior Executives of the Company under the chairmanship of the Managing Director ofthe Company. The Terms of Reference of the Risk Management Committee and a Risk ManagementPolicy of the Company have also been approved and adopted.
Your Board is of the opinion that the Internal Financial Controls affecting theFinancial Statements of your Company are adequate and are operating effectively.