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Globus Spirits Ltd.

BSE: 533104 Sector: Consumer
NSE: GLOBUSSPR ISIN Code: INE615I01010
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OPEN 67.15
PREVIOUS CLOSE 67.20
VOLUME 2521
52-Week high 115.90
52-Week low 62.05
P/E 44.63
Mkt Cap.(Rs cr) 190
Buy Price 66.05
Buy Qty 18.00
Sell Price 66.45
Sell Qty 5.00
OPEN 67.15
CLOSE 67.20
VOLUME 2521
52-Week high 115.90
52-Week low 62.05
P/E 44.63
Mkt Cap.(Rs cr) 190
Buy Price 66.05
Buy Qty 18.00
Sell Price 66.45
Sell Qty 5.00

Globus Spirits Ltd. (GLOBUSSPR) - Director Report

Company director report

To the Members

Your Directors are pleased to present the Twenty-second Annual Report and AuditedAccounts for the year ended 3131 March 2015.

FINANCIAL RESULTS

Particulars

Current Year 2014-2015

Previous Year 2013-2015
Standalone Consolidated" Standalone
Total Revenue 59003 59038 49939
Total Expenses 57973 58028 49016
Profit before
Explanatory items &Tax 1030 1010 923
Profit before tax
after extraordinary items 1030 1010 327
Less: Provision for
taxation including
Deferred tax 323 336 (101)
Profit/ (Loss) aftertax 707 674 428
Basic EPS 1.96 1.84 0.16
Diluted EPS 1.93 1.81 0.15

* During the year the Company formed two Wholly Owned Subsidiaries namely M/s GlobusTrade Bay Limited (incorporated in UAE) M/s Uber Blenders & Distillers Limited(Subsequently name changed to M/s Unibev Limited w.e.f. 04*' June 2015 (IndianSubsidiary) hence consolidated financials have been prepared.

PERFORMANCE REVIEW

During the year under review the Total Revenue of the Company has increased by 18% fromRs 49939lacs (Previous year) to Rs 59002lacs (Current year) and an increase in PBT by Rs702lacs from the previous year and an increase in PAT by Rs 279lacs from the previousyear. The Basic EPS of the Company is Rs 1.96/- as compared to Rs 0.16/- and the dilutedEPS of the Company is Rs 1.93/- as compared to Rs 0.15/- in the previous year.

THE YEAR IN PERSPECTIVE

In the year under review your Company reported a revenue growth of 18% driven bysuccessful implementation of several initiatives across business verticals. Though marketconditions continued to be difficult your Company's strategy of straddling all segment ofthe spirits value chain paid off.

While the consumer business showed signs of revival posting a growth of 13% themanufacturing vertical continued to outperform with growth of 22%. As a consequenceproportion of manufacturing in revenues grew from 54% in FY13-14 to 56% in FY14-15.

Growth in the manufacturing vertical was largely driven by higher volumes of thirdparty bottling (38%) and improved realizations in bottling and bulk alcohol. Your Companysuccessfully scaled up contracts with United Spirits and ABD and also started bottling forJagatjit Industries in Rajasthan. Exports business showed strong performance growing to 3xits size in the previous year. The growth in manufacturing was aided by higher capacityutilizations at both facilities. In a major milestone your Company launched Distiller'sDried Grains with Solubles a value added by-product which has application in animal feedas a valuable protein source.

In the consumer vertical your Company witnessed strong volume growth in Rajasthan IMIL(20%) as efforts on brand building and widening of distribution reach yielded results.This was partly dampened by weak performance in Haryana one of your Company's keymarkets where adverse competitive conditions continued to persist. In a move to deriskfrom geographical concentration your Company entered the Bihar IMIL market marking itsentry in East India.

Further your Company continued its efforts in R&D to enhance productivity therebyreducing cost of production. Raw material prices stabilized after an extended period ofhigh prices and volatility.

Despite delays in land acquisition the expansion plans to East India are progressingwell. Construction has started at both sites and your Company is expecting to commissionboth Greenfield facilities in FY2016-17.

DIVIDEND

Your Directors do not recommend any dividend for the financial year 2014-15.

PUBLIC DEPOSITS

The Company has not accepted or invited deposits covered under the provisions ofSection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit)Rules 2014 from any person during the year under Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year Mr. Vivek Gupta Non-Executive & Independent Director of theCompany has been appointed as Chairman of the Company w.e.f. 28th March 2015.

Ms. Ruchika Bansal has been appointed as Additional Director of the Company on 28thMarch 2015 and pursuant to section 161 (1) of the Companies Act 2013 Ms. Ruchika Bansalwill hold office only upto the date of forthcoming AGM of the Company and is eligible forappointment as Director. The Board recommends her appointment and accordingly resolutionseeking approval of the members for her appointment has been included in the Notice offorthcoming Annual General Meeting of the Company along with her brief profile.

Mr. Gautam Premnath Khandelwal Independent Director & Chairman of the Company hasbeen resigned from the Board of the Company w.e.f. 14"1 November 2014.The Directors place on record their appreciation of the valuable contribution made by him.

Mr. Manik Lai Dutta Executive Director of the Company and Sh. Rajesh SehgalNon-Executive Director of the Company retire by rotation and being eligible offerthemselves for reappointment. The Board recommends their re-appointment.

SUBSIDIARY COMPANIES

Your Company has two wholly owned subsidiaries viz. M/s Unibev Limited (formerly knownas M/s Uber Blenders & Distillers Limited) (Indian subsidiary) and M/s Globus TradeBay Limited (foreign subsidiary) in UAE.

In terms of proviso to sub section (3) of Section 129 of the Act the salient featuresof the financial statement of the subsidiaries is set out in the prescribed form AOC-1which forms part of the annual report.

Performance and financial position of the subsidiary companies is given in Annexure-I.

CORPORATE GOVERNANCE

As per requirement of Clause 49 of the Listing Agreement with the Stock Exchanges aCompliance Report on Corporate Governance has been annexed as part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY(CSR)

The CSR Policy of the Company and the details about the initiatives taken by theCompany on CSR during the year as per the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 have been disclosed in Annexure-lll to this Report. Further details ofcomposition of the Corporate Social Responsibility Committee and other details areprovided the Corporate Governance Report which forms part of this report.

AUDITORS

Pursuant to provisions of Section 139 of the Companies Act 2013 M/s Deloitte Haskins& Sells Firm Regn No.015125N Chartered Accountants having their office at 7thFloor Building 10 DLF Cyber City Complex DLF City Phase-ll Gurgaon-122002 Haryanawere appointed in the 2181 AGM as statutory auditors of the Company for aperiod of the first term of five consecutive years till the conclusion of 26thAGM subject to ratification at every annual general meeting in terms of the Companies Act2013.

AUDITORS' REPORT

The Auditors in their Report to Members have given a qualification and the response ofyour Directors with respect to it as follows :-

In Standalone Accounts:

As at March 31 2015 Fixed Assets include Intangible Assets aggregating to Rs 2164.95Lacs (March 312014 - Rs 2886.60 Lacs) under the head "Knowhow and New BrandDevelopment" representing intangibles internally generated by the Company throughexpenditure on advertisement and promotional expenses. Such recognition of expenses as anintangible asset is not in accordance with Accounting Standard (AS 26) "IntangibleAssets". Had the Company complied with requirements of AS-26 Fixed Assets as atMarch 312015 would have been lower by Rs 2164.95 Lacs (March 31 2014 - Rs 2886.60Lacs) Depreciation and amortisation expense for the year would be lower by Rs 721.65Lacs. Net Profit after taxes for the year would be converted into Net Loss after taxes ofRs 709.00 Lacs and the Reserves and Surplus would be lower by Rs 1415.70 Lacs.

In Consolidated Accounts:

As on March 31 2015 Fixed Assets include Intangible Assets aggregating to Rs 2164.95Lacs under the head "Knowhow and New Brand Development" representing intangiblesinternally generated by the Holding Company through expenditure on advertisement andpromotional expenses. Such recognition is not in accordance with Accounting Standard - 26"Intangible Assets". Had the Holding Company complied with requirements ofAS-26 Fixed Assets as at March 312015 would have been lower by Rs 2164.95 LacsDepreciation and amortisation expense for the year would be lower by Rs 721.65 Lacs Netprofit after taxes for the year would be converted into net losses after tax of Rs 741.69Lacs and Reserves and Surplus would be lower by Rs 1415.70 Lacs.

And the response of your Directors with respect to it as follows:-

During the current period the expenses incurred on brand promotion were expensed offhowever up to 31/03/2013 the same were being capitalised since the brands were

under establishment during that period. Further during the year an amount of Rs.721.65 Lacs has been debited to Statement of Profit and Loss to amortise these assets over5 years.

COST AUDIT

The board subject to the approval of the Central Government if required hasre-appointed M/s Niraj Kumar Vishwakarma & Associates Cost Accountants having Firm'sregistration no. 101683 its branch office at N-60 4th Floor Narain NagarLalita Park Delhi-110092 as Cost Auditor for conducting the Cost Audit for the financialyear 2015-16. The audit committee recommended his appointment and remuneration. TheCompany has also received necessary certificate under Section 141 of the Act 2013conveying his eligibility for re-appointment. The remuneration fixed by the board basedon the recommendation of the audit committee is required to be ratified by the members atthe AGM as per the requirement of Section 148(3) of the Act 2013.

SECRETARIAL AUDIT REPORT

Secretarial Audit Report has been annexed &forms part of the Annual Report.

PARTICULARS OF EMPLOYEES

Statement pursuant to u/s 197 (12) of the Companies Act 2013 read with the apllicablerules made thereunder the name & other particulars of the employees are as follows:-

Name Age Designation Remuneration received () Qualification Experience In years Date of Commencement of employment Particulars of last employment
Sh. Ajay K. Swarup 56 Years Managing Director 4770000/- PGDBM (IIM Kolkata) 30 December 01 2006 M/s SVP Industries Ltd.

Notes:

1. Sh. Ajay K. Swarup holds more than 2% equity shares of the Company.

2. Sh. Ajay K. Swarup has adequate experience to discharge the responsibilitiesassigned to him and his designation is indicative of nature of his duties.

3. Sh. Ajay K. Swarup has been re-appointed as Managing Director of the Company for aperiod of 5 years w.e.f. 01.12.2011.

CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / RESEARCH & DEVELOPMENT ETC.

Particulars as required under Rule 8 (3) of the Companies (Accounts) Rules 2014 aregiven in Annexure II and form part of this report.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Management's Discussion and Analysis Report has been annexed &forms part of theAnnual Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed

1. That in preparation of the Annual Accounts for the financial year 2014-15 theapplicable Accounting Standards have been followed along with explanation relating tomaterial departures if any.

2. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the State of Affairs of the Company as at 31stMarch 2015 and of the results of the Company for that period.

3. That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

4. That the directors had prepared the Annual Accounts for the financial year 2014-15on a going concern basis.

5. That they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and operating properly ; and

6. That they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Board wishes to place on record its appreciation for the wholehearted support andvaluable co-operation extended to the Company by the Central & the State GovernmentsBankers Suppliers Associates Contractors employees and shareholders.

For and on behalf of the Board of Directors
Sd/- Sd/-
(Dr. Bhaskar Roy) (Ajay K. Swarup)
Executive Director & CFO Managing Director
DIN-02805627 DIN-00035194
Place: New Delhi
Date: 13/08/2015