Globus Spirits Ltd.
|BSE: 533104||Sector: Consumer|
|NSE: GLOBUSSPR||ISIN Code: INE615I01010|
|BSE 00:00 | 05 Aug||716.50||
|NSE 00:00 | 05 Aug||708.40||
|Mkt Cap.(Rs cr)||2,064|
|Mkt Cap.(Rs cr)||2063.52|
Globus Spirits Ltd. (GLOBUSSPR) - Director Report
Company director report
To the Members
Your Board of Directors are pleased to present the Twenty-seventhAnnual Report and Audited Accounts for the year ended 31st March 2020.
(Rs. In Lakhs)
During the year under review the company reported a growth of 16% innet revenue as compare to previous year and PBT has been increased by Rs.36.75crores fromthe previous year and also PAT has been increased by Rs. 28.74crores from the previousyear. The Basic and Diluted EPS of the Company is Rs. 20.60/- as compared to Rs.10.64/- inthe previous year.
THE YEAR IN PERSPECTIVE
The fiscal year 2019-20 was characterised by global headwinds andsubdued domestic growth. While the economic slowdown and outbreak of coronavirus impactedconsumer demand the year was mostly positive for the distillery sector. The Government ofIndia maintained its focus on ethanol blending and with an upsurge in world-wide demandfor alcohol driven by higher requirements of disinfectants/ sanitizers the realizationsmoved up. This combined with price hikes in multiple states particularly the ones in whichyour company is present contributed to healthy profitable growth.
In FY19-20 your Company reported a growth of 17.7% in net revenues toreach Rs. 1167.9 crore and 151bps increase in EBITDA margins to reach 11.8% levels. Netprofit grew 93% from Rs.30.6 crore in FY18-19 to Rs. 59.3 crore in the year under review.Profitability improved significantly driven by higher realizations in both manufacturingand consumer businesses.
The fourth quarter performance was impacted by lockdown which led toclosure of plants.
The revenue growth was led by manufacturing business which grew by 31%during the year driven by higher realizations in bulk alcohol and DDGS combined withhigher production volumes. Capacity augmentation by de-bottlenecking in Rajasthancontributed to volume growth. ENA realizations continued to trend upwards as large part ofdistillery capacitiies were focused on ethanol production and consequently ENA remainedshort in supply. DDGS prices also improved as prices of alternate protein products stayedat high levels.
Driven by strong performance of bulk alcohol the proportion ofmanufacturing business in revenues grew from 58% in FY18-19 to 64% in the year underreview.
The consumer business comprising IMIL grew by 0.7% during the yearwhich was driven by price hikes. Dip in volumes partly offset the higher realizations.Increased competition both in Haryana and Rajasthan led to volume declines albeit ourmarket share in Rajasthan was at 29% just marginally lower than the previous year.
Your Company's premium IMFL venture Unibev also made big stridesas it expanded its presence to reach 10 states.
Your Directors are pleased to recommend dividend of Rs. 1/- i.e. 10%per equity share of the company for the year 2019-20.
The Company has not accepted or invited deposits covered under theprovisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 from any person during the year under Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year Mr. Joginder Singh Dhamija have resigned from theBoard of Directors of the company w.e.f. 03rd August 2019. The Directors place on recordhis appreciation of the valuable contribution made by him. Mr. Vivek Gupta have beeninducted in the Board of Directors w.e.f. 03rd August 2019 and he has also been appointedas Chairman of the Board of Directors of the company on the same date.
Mr. Manik Lal Dutta Executive Director of the company and Dr. BhaskarRoy Director of the Company retire by rotation and being eligible offer themselves forre-appointment. The Board recommends their re-appointment.
Your Company has one subsidiary viz. M/s Unibev Limited (formerlyknown as M/s Uber Blenders & Distillers Limited) (Indian subsidiary).
In terms of proviso to sub section (3) of Section 129 of the Act thesalient features of the financial statement of the subsidiary is set out in the prescribedform AOC-1 which forms part of the annual report.
As per requirement of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Compliance Report on Corporate Governance has beenannexed as part of the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy of the Company and the details about the initiativestaken by the Company on CSR during the year as per the Companies (Corporate SocialResponsibility Policy) Rules 2014 have been disclosed in Annexure-II to this Report.Further details of composition of the Corporate Social Responsibility Committee and otherdetails are provided the Corporate Governance Report which forms part of this report. Thepolicy on Corporate Social Responsibility as approved by the Board of Directors isavailable on the website of the Company www. globusspirits.com.
NOMINATION AND REMUNERATION POLICY
The Nomination & Remuneration Policy as approved by the Board onrecommendation of the Nomination & Remuneration Committee is available on website ofthe Company www. globusspirits.com.
The Company in terms of Section 139 (1) and (2) of the Act 2013 haveappointed M/s Deloitte Haskins & Sells Firm Regn No. 015125N Chartered Accountantshaving their office at 7th Floor Building 10 DLF Cyber City Complex DLF City Phase-IIGurgaon-122002 Haryana as statutory auditors for 2nd term of their remaining four yearsvide AGM dated 03rd September 2020.
The notes on accounts appearing in the schedule and referred to in theAuditors Report are self-explanatory and therefore do not call for any further comments orexplanations. There are no adverse remarks/qualifications in the auditor's report.
The board subject to the approval of the Central Government ifrequired has appointed M/s JSN & Co. Cost Accountants having Firm'sregistration no. 455 its office at 462/1 1st Floor Old MB Road Lado Sarai NewDelhi-110030 as Cost Auditor for conducting the Cost Audit for the financial year2020-21. The audit committee recommended his appointment and remuneration. The Company hasalso received necessary certificate under Section 141 of the Act 2013 conveying hiseligibility for re-appointment. The remuneration fixed by the board based on therecommendation of the audit committee is required to be ratified by the members at the AGMas per the requirement of Section 148(3) of the Act 2013.
SECRETARIAL AUDIT REPORT
Secretarial Audit Report has been annexed herewith & forms part ofthe Annual Report.
PARTICULARS OF EMPLOYEES
Statement pursuant to u/s 197 (12) of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theparticulars of top ten employees are as follows :-
Particulars of Top Ten Employees:
Notes: 1. The percentage of equity share holding mentioned as above isas on 31st March 2020.
2. None of the Directors or employees are inter related to each otherexcept Sh. Ajay K. Swarup Managing Director of the company is the father of Sh. ShekharSwarup Joint Managing Director of the company.
CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / RESEARCH &DEVELOPMENT ETC.
Particulars as required under Rule 8 (3) of the Companies (Accounts)Rules 2014 are given in Annexure I and form part of this report.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS.
Management's Discussion and Analysis Report has been annexed &forms part of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Companies Act2013 with respect to Directors Responsibility Statement it is hereby confirmed
1. That in preparation of the Annual Accounts for the financial year2019-20 the applicable Accounting Standards have been followed along with explanationrelating to material departures if any.
2. That the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the State of Affairs of the Company as at 31stMarch 2020 and of the results of the Company for that period.
3. That the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
4. That the directors had prepared the Annual Accounts for thefinancial year 2019-20 on a going concern basis.
5. That they have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and operatingproperly ; and
6. That they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as provided under Sub-Section
(3) of Section 92 of the Companies Act 2013 ( the "Act") is
enclosed at Annexure-III in the prescribed form MGT-9 and
forms part of this Report.
NUMBER OF MEETINGS OF THE BOARD
5 meetings of the Board of Directors of the Company were held duringthe year. For detail of the meetings please refer to the Corporate Governance Reportwhich forms part of this Report.
Composition and other details pertaining to Audit Committee has beendisclosed in the Corporate Governance Report.
INDEPENDENT DIRECTORS' DECLARATION
Mr. Santosh Kumar Bishwal Mr. Vivek Gupta Mr. Kunal Agarwal and Mr.Sunil Chadha who are Independent Directors have submitted a declaration that each ofthem meets the criteria of independence as provided in Sub-Section (6) of Section 149 ofthe Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Further there has been no change in the circumstances which may affect their status asindependent director during the year.
POLICY OF DIRECTORS' APPOINTMENT AND REMUNERATION
Company's policy on Directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence of adirector and other matters provided under section 178(3) of the Act are covered inCorporate Governance Report which forms part of this Report. Further information aboutelements of remuneration package of individual directors is provided in the extract ofAnnual Return as provided under Section 92(3) of the Act is enclosed at Annexure-III inthe prescribed form MGT-9 and forms part of this Report and can be accessed on thecompany's website www.globusspirits. com.
CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT
The Directors and members of Senior Management have affirmed compliancewith the Code of Conduct for Directors and Senior Management of the Company. A declarationto this effect has been signed by the Managing Director and forms part of the AnnualReport.
RELATIONSHIP BETWEEN DIRECTORS INTER-SE
None of the Directors are related to each other within the meaning ofthe term "relative" as per Section 2(77) of the Act and SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 except Sh. Shekhar Swarup(Joint Managing Director) is the son of Sh. Ajay Kumar Swarup (Managing Director) of theCompany.
ANNUAL PERFORMANCE EVALUATION
The company has a mechanism for annual performance evaluation of everyIndividual Directors and the Board as a whole as well as its various committees.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
There have been no loans guarantees and investments under Section 186of the Act during the financial year 2019-20 except to its Subsidiary M/s Unibev Limited(formerly known as M/s Uber Blenders & Distillers Limited).
All the provisions of Secretarial standards has been complied by theCompany during Financial Year 2019-20.
TRANSACTIONS WITH RELATED PARTIES
The Company has entered into contract / arrangements with the relatedparties in the ordinary course of business and on arm's length basis. The details arementioned in the notes to accounts of the financial statements. Policy on materiality ofRelated Party Transactions can be accessed on the company's website www.globusspirits.com.
The information about internal controls is set out in the ManagementDiscussion & Analysis report which is attached and forms part of this Report.
The Company has a Risk Management Committee & also it has in placea Risk Management Policy to deal with various risks arising in the course of business. Thekey responsibilities of Risk Management Committee are namely Identification of risksImplementing and monitoring the risk management plan for the Company and reframe the riskmanagement plan and policy as it may deem fit lay down procedures to inform Board membersabout the risk assessment and minimization procedures Monitoring and reviewing of therisk management plan from time to time and activities as may be required to be done underthe Companies Act 2013 or SEBI listing Regulations.
The Company has established a vigil mechanism for Directors andemployees to report their genuine concerns.
PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES
Financial position of the subsidiary M/s Unibev Limited (Formerly knownas M/s Uber Blenders & Distillers Ltd.) is provided in a separate statement AOC-1attached to the Financial Statement pursuant to first proviso to Section 129(3) of theAct.
PARTICULARS OF REMUNERATION
The information required under section 197 of the Companies Act 2013and the rules made there under in respect of employees of the Company is follows :-
(a) The ratio of the remuneration of each director to the medianremuneration of the employees of the Company
* for the purpose of comparison 12 months salary has been consideredfor all the employees even though any employee has worked for less than 12 months
(b) The percentage increase in remuneration of each Director ChiefExecutive Officer Chief Financial Officer Company Secretary or Manager if any in thefinancial year
(c) The percentage increase in the median remuneration of employees inthe financial year 10% (Since there is lot of variation in the no. of employees during thecurrent year as compare to previous year comparison of the exact median remuneration maynot be accurate.)
(d) The number of permanent employees on the rolls of Company as on31/03/2020: 519
(e) The average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in themanagerial remuneration
The average increase in salaries of employees other than managerialpersonnel in 2019-20 was 10% approximately. Percentage increase in the managerialremuneration for the year was also approximately 19.75%.
(f) The affirmation that the remuneration is as per the remunerationpolicy of the Company
The Company's remuneration policy is driven by the success andperformance of the individual employees and the Company. Through its compensation packagethe Company endeavors to attract retain develop and motivate a high performance staff.The Company follows a compensation mix of fixed pay benefits and performance basedvariable pay. Individual performance pay is determined by business performance and theperformance of the individuals measured through the annual appraisal process. The Companyaffirms remuneration is as per the remuneration policy of the Company.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NONEXECUTIVE DIRECTORS
During the year the Non-Executive Directors of the Company had nopecuniary relationship or transactions with the Company.
The Board wishes to place on record its appreciation for thewholehearted support and valuable co-operation extended to the Company by the Central& the State Governments Bankers Suppliers Associates Contractors employees andshareholders