To the Members:
The Directors have pleasure in presenting the Fifty Sixth Annual Reportalong with the Audited Statement of Accounts of the Company for the year ended March312019.
1. SUMMARY OF THE FINANCIAL RESULTS:
| || ||(र in Million) |
| || |
|Particulars ||31.03.2019 ||31.03.2018 |
|Revenue from operations (Net of excise duty) ||4187.02 ||3124.10 |
|Profit before tax ||612.73 ||438.95 |
|Profit after tax ||406.35 ||283.75 |
During the financial year 2018-19 on a standalone basis revenue wasup by 34% profit before tax was up by 40% and profit after tax was up by 43% as comparedto previous financial year.
| || ||(र in Million) |
| || |
|Particulars ||31.03.2019 ||31.03.2018 |
|Revenue from operations (Net of excise duty) ||5026.43 ||4056.99 |
|Profit before tax ||732.70 ||606.51 |
|Profit after tax ||505.81 ||426.76 |
During the financial year 2018-19 on a consolidated basis revenue wasup by 24% profit before tax was up by 21% and profit after tax was up by 19% as comparedto previous financial year.
During the financial year 2018-19 there was no change in the businessactivities of the Company.
Detailed information on overview of the industry and important changesin the industry during the last year external environment and economic outlook and growthof the Company and other related disclosures are made in the Management Discussion& Analysis Report' attached and forms part of this Report.
During the year under review the Board of Directors declared and paidthree interim dividends of र 1.00 per share each aggregating to र 3.00 pershare. The total amount distributed as interim dividends on the paid-up share capital forthe year amounted to र 43.85 million (excluding dividend tax of र 9.01million).
Based on the performance of the Company for the year the Board ofDirectors is pleased to recommend a final dividend of र 1.50 per equity sharesubject to approval of the Shareholders at the Annual General Meeting which if approvedwill absorb र 21.93 million towards dividend and र 4.51 million as dividendtax.
The aggregate amount of interim dividends paid during the year and thefinal dividend recommended for the financial year ended March 31 2019 amounts to 寤.50 per share i.e. र 65.78 million (excluding dividend tax of र 13.52million).
3. TRANSFER TO RESERVES:
No amount is proposed to be transferred to General Reserve out of thenet profits of the Company for the financial year 2018-19. Hence the entire amount ofprofit has been carried forward to the Profit & Loss Account.
4. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:
The performance and financial position of GMM Mavag AG and Mavag AGthe wholly owned subsidiaries of the Company for the year ended March 312019 are set outas Annexure A' forming a part of this Report.
During the financial year 2018-19 Karamsad Investment Limited andKaramsad Holdings Limited subsidiaries of the Company have applied for Members'Voluntary Winding up under Section 59 of the Insolvency and Bankruptcy Code 2016.
Except as stated above there are no companies which have become orceased to be subsidiaries associates joint venture companies.
5. SHARE CAPITAL:
There was no change in Authorised and Paid up Share Capital of theCompany and neither there was any reclassification of sub division of equity shares duringthe year under review.
6. ACQUISITION OF INDUSTRIAL MIXING SOLUTIONS DIVISION OF SUDARSHANCHEMICAL INDUSTRIES LIMITED:
On April 26 2019 the Company has acquired the Industrial MixingSolutions Division of Sudarshan Chemical Industries Ltd. Pune. This acquisition isexpected to enhance GMM Pfaudler's industrial mixing business vertical by bringing innew products technologies customers and industry segments. Significant cost synergiesare expected due to economies of scale value engineering and by leveraging the strengthsof both the organisations in their markets. The two businesses once consolidated wouldbecome India's premier industrial mixing solutions provider.
7. REVISION OF FINANCIAL STATEMENTS:
None of Financial Statements of the Company pertaining to previousfinancial years were revised during the financial year under review.
8. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statementsas designed and implemented by the Company are adequate. During the year under review nomaterial or serious lapses have been observed by the Internal Auditors of the Company forinefficiency or inadequacy of such controls.
9. INTERNAL CONTROL SYSTEMS:
The Company's internal control procedure which includes internalfinancial controls ensures compliance with various policies practices and statuteskeeping in view the organization's pace of growth and increasing complexity ofoperations. The Internal Auditors carry out extensive audits throughout the year acrossall functional areas and submit its reports to the Audit Committee on a quarterly basis.The said Reports do not contain any observation of any serious lapse in the system.
10. MANAGEMENT DISCUSSION & ANALYSIS:
Management Discussion & Analysis Report for the year under reviewunder Regulation 24 of the SEBI Listing Regulations is presented in a separate sectionand forming part of this Report.
11. CORPORATE GOVERNANCE:
The Report on Corporate Governance as stipulated under Regulation 34 ofthe SEBI Listing Regulations together with a Certificate from the Company's Auditorsis presented in a separate section forming a part of this Report.
The requisite certificate from M/s. Deloitte Haskins & Sells LLPChartered Accountants Statutory Auditors confirming compliance with the conditions ofcorporate governance as stipulated under the aforesaid Schedule V is enclosed to theReport on Corporate Governance.
12. CORPORATE SOCIAL RESPONSIBILITY POLICY:
The Board has constituted a Corporate Social Responsibility("CSR") Committee as per the provisions of Section 135 of the Companies Act2013. The Board has also framed a CSR Policy as per the recommendations of the CSRCommittee.
The CSR Policy is available on the Company's website athttp://www.gmmpfaudler.com/content/ CorporateSocialResponsibilityPolicy.pdf
The composition of the Committee contents of CSR Policy and report onCSR activities carried out during the financial year ended March 31
2019 in the format prescribed under Rule 9 of the Companies (CorporateSocial Responsibility Policy) Rules 2014 are set out as Annexure B' forming apart of this Report.
13. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into by the Companyduring the financial year were in ordinary course of business and at arm's lengthbasis. Also there were no related party transactions which could be considered materialin accordance with the Policy of the Company on materiality of related party transactions.
All related party transactions are being reviewed and certified by anIndependent Consultant and placed before the Audit Committee from time to time for theirapproval and also been taken on record by the Board.
The Board of Directors has approved the criteria for granting omnibusapproval by the Audit Committee within the overall framework of the Policy on relatedparty transactions. Prior omnibus approval is obtained for related party transactionswhich are of repetitive nature and entered in the ordinary course of business and atarm's length.
Policy on dealing with related party transactions is available on theCompany's website at http:// www.gmmpfaudler.com/content/PolicyonRelatedPartyTransactions.pdf
For details please refer to Note 36 to the Stand-alone FinancialStatements which sets out related party disclosures.
14. RISK MANAGEMENT POLICY:
The Company has formulated and adopted a Risk Management Policy toprescribe risk assessment management reporting and disclosure requirements of theCompany. The said policy is available under the Investors Section on the Company'swebsite at http:// www.gmmpfaudler.com/content/Risk_Management_ Policy_&_Strategy.pdf
15. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):
The present composition of the Board is in compliance with theprovisions of Section 149 of the Companies Act 2013.
During the year under review Mr. P. Krishnamurthy IndependentDirector resigned as Director of the Company w.e.f. May 14 2018 pursuant to proviso ofsub-section (1) of Section 167 of the Companies Act 2013 notified by the Ministry ofCompany Affairs vide notification dated May 7 2018. Mr. Nakul Toshniwal was appointed asan Independent Director of the Company w.e.f. May 16 2018 to fill in the casual vacancycreated by the resignation of Mr. P. Krishnamurthy.
Pursuant to the provisions of Section 152 of the Companies Act 2013Mr. Khurshed Thanawalla and Mr. Thomas Kehl Directors being longest in the office willretire by rotation at the ensuing Annual General Meeting of the Company and beingeligible have offered themselves for re-appointment. The Board recommends theirre-appointment. In accordance with the provisions of the Comanies Act 2013 none of theIndependent Directors is liable to retire by rotation.
All Directors have given a certificate to the Compliance Officerconfirming the adherence to the Code of Conduct & Ethics Policy of the Company for thefinancial year 2018-19.
B. INDEPENDENT DIRECTORS:
The Independent Directors of the Company have given the declaration andconfirmation to the Company as required under Section 149(7) of the Companies Act 2013and Regulation 25(8) of the SEBI Listing Regulations confirming that they meet thecriteria of independence and that they are not aware of any circumstance or situationwhich exist or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any externalinfluence.
C. KEY MANAGERIAL PERSONNEL:
Mr. Tarak Patel Managing Director Mr. Ashok Pillai Chief OperatingOfficer Mr. Jugal Sahu Chief Financial Officer and Ms. Mittal Mehta Company Secretary& Compliance officer are the Key Managerial Personnel of the Company. There was nochange in Key Managerial Personnel during the year under review.
D. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 and in relationto the audited financial statements of the Company for the year ended March 312019 theBoard of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistentlyand the Directors have made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company as at March 312019and of the profit of the Company for that year;
c. proper and sufficient care was taken for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a goingconcern basis;
e. internal financial controls have been laid down to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively;
f. proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
E. MEETINGS OF THE BOARD:
Four (4) Meetings of the Board of Directors were held during thefinancial year ended March 312019. The details of the Board Meetings with regard to theirdates and attendance of each of the Directors thereat have been provided in the CorporateGovernance Report.
F. AUDIT COMMITTEE:
The Audit Committee as on date comprises of four members viz. Dr. S.Sivaram Dr. Amrita Patel Mr. Nakul Toshniwal (Independent Directors) and Dr. DominicDeller (Non-Executive Director). The details of meetings of the Committee held during thefinancial year under review along with attendance of members thereof and Role of theCommittee is provided in the Corporate Governance Report annexed to this Report. All therecommendations made by the Audit Committee during the year were accepted by the Board.
G. STAKEHOLDERS RELATIONSHIP COMMITTEE:
Pursuant to Section 178 of the Companies Act 2013 theStakeholder's Relationship Committee constituted by the Board of Directors to dealwith the matters related to stakeholders' grievances met 3 times during the financialyear.
The details of meetings of the Committee held during the financial yearunder review along with attendance of members thereof and status of grievances receivedfrom various stakeholders during the financial year are furnished in the CorporateGovernance Report Section of the Board' Report.
H. NOMINATION REMUNERATION AND EVALUATION POLICY:
The Board of Directors has formulated a Policy which set standards forthe nomination remuneration and evaluation of the Directors and Key Managerial Personneland aims to achieve a balance of merit experience and skills amongst its Directors andKey Managerial Personnel.
Details of the Nomination Remuneration and Evaluation Policy are setout at Annexure C' forming a part of this Report.
I. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and the SEBIListing Regulations the Board has carried out the annual performance evaluation of theDirectors individually as well as evaluation of the working of the Board and of theCommittees of the Board by way of individual and collective feedback from Directors.
The Evaluation Criteria applied are:
(a) For Independent Directors:
Knowledge and Skills
Duties roles and functions
(b) For Executive Directors
Performance as Team Leader/ Member;
Evaluating Business Opportunity and analysis of Risk RewardScenarios;
Key set Goals/ KRA and achievements;
Professional Conduct Integrity;
Sharing of Information with the Board.
The Directors expressed their satisfaction with the evaluation process.
J. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company proactively keeps its Directors informed of the activitiesof the Company its management and operations and provides an overall industry perspectiveas well as issues being faced by the industry.
The Familiarization Programme for the Board and details of variousfamiliarization programmes conducted during the year ended March 312019 are available onthe Company's website at http://www.gmmpfaudler. com/contentFamilarizationProgramme.pdf
K. SECRETARIAL STANDARDS:
The Directors state that all applicable Secretarial Standards issued bythe Institute of Company Secretaries of India have been duly followed by the Company.
16. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES:
The Board of Directors of the Company has pursuant to the provisionsof Section 178(9) of the Companies Act 2013 read with Rule 7 of the Companies (Meetingsof Board and its Powers) Rules 2014 framed Whistle Blower Policy' forDirectors and employees of the Company to provide a mechanism which ensures adequatesafeguards to employees and Directors from any victimization on raising of concerns of anyviolations of legal or regulatory requirements incorrect or misrepresentation of anyfinancial statements and reports etc.
The employees of the Company have the right to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere tothe highest standards of ethical moral and legal conduct of business operations.
No instance under the Whistle Blower Policy was reported during thefinancial year 2018-19.
17. PUBLIC DEPOSITS:
The Company has not accepted or renewed any amount falling within thepurview of provisions of Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposit) Rules 2014 during the year under review.
Hence the requirement for furnishing of details of deposits which arenot in compliance with the Chapter V of the Companies Act 2013 is not applicable.
18. AUDITORS AND AUDITORS' REPORT:
A. STATUTORY AUDITORS:
Deloitte Haskins & Sells LLP Chartered Accountants (FRN 117366W)were appointed as Statutory Auditors of the Company for a term of consecutive fiveyearsi.e. from the conclusion of 52nd Annual General Meeting till the conclusion of 57thAnnual General Meeting by the shareholders of the Company. They have confirmed that theyare not disqualified from continuing as Auditors of the Company.
The Auditors' Report for the financial year ended March 31 2019report does not contain any reservation qualification or adverse remark. The notes onfinancial statement referred to in the Auditors' Report are self-explanatory and donot call for any further comments.
B. SECRETARIAL AUDIT:
Secretarial Audit Report obtained pursuant to the provisions of Section204 of the Companies Act 2013 and Rules made there under from M/s. Rathi and AssociatesPracticing Company Secretaries for the financial year 2018-19 is set out at AnnexureD' forming a part of this Report.
The Secretarial Auditors Report for the financial year ended March 312019 does not contain any reservation qualification or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013and Rules made there under the Board of Directors has re-appointed M/s. Rathi andAssociates Practicing Company Secretaries for conducting Secretarial Audit Report of theCompany for the financial year 2019-20.
C. COST AUDITORS:
Pursuant to Section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit) Rules 2014 the Company maintains the cost accounting records inrespect of its manufacturing activities.
M/s. Dalwadi & Associates Cost Accountants Ahmedabad CostAuditors of the Company for the financial year 2018-19 have been reappointed as CostAuditors for conducting audit of the cost accounting records maintained by the Company inrespect of its manufacturing activities for the financial year 2019-20.
Necessary resolution for ratification of payment of remuneration to thesaid Cost Auditors is included in the Notice of Annual General Meeting dated May 30 2019.
D. INTERNAL AUDITORS:
M/s. Kalyaniwalla & Mistry Chartered Accountants has beenre-appointed as Internal Auditors of the Company for the financial 2019-20.
19. CREDIT RATING:
CRISIL has re-affirmed "A1+" rating to the Company'sshort-term banking facilities which is considered to have very strong degree of safetyregarding timely payment of financial obligations carrying lowest credit risk.
CRISIL has also re-affirmed its rating of the Company's long-termbank facilities to "AA-/stable" which is considered to have high degree ofsafety regarding timely servicing of financial obligations carrying low credit risk.
20. STATUTORY STATEMENTS:
A. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m)of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 inrespect of conservation of energy technology absorption foreign exchange earnings andoutgo etc. are set out at Annexure E' forming a part of this Report.
B. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
There have been no material changes and commitments affecting thefinancial position of the Company since the close of financial year i.e. since March312019. Further it is hereby confirmed that there has been no change in the nature ofbusiness of the Company.
C. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL:
No orders have been passed by any Regulator or Court or Tribunal whichcan have impact on the going concern status and on the Company's operations infuture.
D. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act2013 Extract of the Annual Return for the financial year ended March 312019 made underthe provisions of Section 92(3) of the Companies Act 2013 is set out at AnnexureG' forming a part of this Report.
E. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 ANDOTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The ratio of the remuneration of each Director to the medianremuneration of the employees of the Company for the financial year under review and otherdisclosures under Rule 5 of the Companies (Appointment & Remuneration) Rules 2014 areset out at Annexure F' forming a part of this Report.
F. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
The particulars of loans given and investments made during thefinancial year under Section 186 of the Companies Act 2013 are given at Notes formingpart of the Financial Statements. During the financial year the Company has neitherprovided any securities nor provided corporate guarantees for loans availed by the others.
G. PAYMENT OF REMUNERATION / COMMISSION TO MANAGING DIRECTOR FROMHOLDING OR SUBSIDIARY COMPANIES:
During the year under review Mr. Tarak Patel Managing Directorreceived a remuneration of 35000 CHF from Mavag AG Subsidiary of the Company.
H. INVESTOR EDUCATION AND PROTECTION FUND:
Pursuant to the provisions of Section 123 and 125 of the Companies Act2013 read with the "Investor Education and Protection Fund Authority (AccountingAudit Transfer and Refund) Amendment Rules 2017" the amounts of dividends remainingunclaimed for a period of seven years and shares thereon are transferred to the InvestorEducation and Protection Fund ("IEPF").
During the year under review the Company has transferred /- on account of unclaimed/ unpaid dividend and 6909 equity shares of face valueर 2/- each to the IEPF.
Details of the Nodal Officer: Ms. Mittal Mehta Company Secretary &Compliance Officer.
21. SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013:
The Company has in place a Policy on Prevention of Sexual Harassment inline with the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the year under review theCompany has not received any complaint.
The Board of Directors confirm that no disclosure or reporting isrequired in respect of the following matters as there were no transactions on thesematters during the financial year 2018-19:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise;
2. Issue of shares (including sweat equity shares or Stock options) toemployees of the Company;
3. non-exercising of voting rights in respect of shares purchaseddirectly by employees under a scheme pursuant to Section 67(3) of the Companies Act 2013read with Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014;
4. Material or serious instances of fraud falling within the purview ofSection 143(12) of the Companies Act 2013 and Rules made there under.
The Board of Directors of the Company acknowledge with gratitude thesupport received from shareholders bankers customers suppliers and business partners.The Directors recognize and appreciate the efforts of all employees that ensuredaccelerated growth in a challenging business environment.
|For and on behalf of the Board of Directors |
|Dr. S. Sivaram ||Tarak Patel |
|Chairman ||Managing Director |
|DIN : 00009900 ||DIN : 00166183 |
|Place: Mumbai || |
|Date: May 30 2019 || |
|Registered Office: Vithal Udyognagar || |
|Anand - Sojitra Road || |
|Karamsad - 388 325 Gujarat. || |