To the Members:
The Directors have pleasure in presenting the Fifty
Seventh Annual Report along with the Audited Statement of Accounts of the Company forthe year ended March 31
1. SUMMARY OF THE FINANCIAL RESULTS:
| || ||(Rs in Million) |
| ||STANDALONE |
|Particulars ||31.03.2020 ||31.03.2019 |
|Revenue from operations ||5163.55 ||4187.02 |
|Profit before tax ||820.36 ||612.73 |
|Profit after ||621.23 ||406.35 |
During the financial year 2019-20 on standalone basis revenue was up by 23% Profitbefore tax was up by 34% and Profit after tax was up by 53% as compared to previousfinancial year.
(Rs in Million)
| ||CONSOLIDATED |
|Particulars ||31.03.2020 ||31.03.2019 |
|Revenue from operations ||5910.72 ||5026.43 |
|Profit before tax ||922.70 ||732.70 |
|Profit after ||711.33 ||505.81 |
During the financial year 2019-20 on consolidated basis revenue was up by 18% Profitbefore tax was up by 26% and Profit after tax was up by 41% as compared to previousfinancial year.
During the financial year 2019-20 there was no change in the business activities ofthe Company. Detailed information on Overview of the industry and important changes in theindustry during the last year External environment and economic outlook and growth of theCompany 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 paid three interimdividends of Rs 1.00 per share each aggregating to Rs 3.00 per share. The total amountdistributed as interim dividends on the paid-up share capital for the year amounted to Rs43.85 million (excluding dividend tax of Rs 9.01 million). Based on the performance of theCompany for the year the Board of Directors is pleased to recommend a final Rs 2.00 perequity share subject todividendof approval of the Shareholders at the Annual GeneralMeeting which if approved will absorb Rs 29.23 million towards dividend. The aggregateamount of interim dividends paid during the year and the final dividend for the financialyear ended March 31 2020 amounts to Rs 5.00 per share i.e. Rs 73.09 million.
The dividend declared and/or paid by the Company for the financial year 2019-20 is incompliance with the Dividend Distribution Policy. The Dividend Distribution Policy of theCompany is set out as Annexure A' forming a part of this Report and is alsoavailable on Company's website at http://www.gmmpfaudler.com/content/DividendDistibutionPolicy. pdf
3. TRANSFER TO RESERVES:
No amount is proposed to be transferred to General Reserve out of the net profits ofthe Company for the financial year 2019-20. Hence the entire amount of profit has beencarried forward to the Profit & Loss Reserve Account.
4. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:
The Company has four subsidiaries namely
Karamsad Holdings Limited Karamsad Investments Limited GMM Mavag AG and Mavag AG.During the year under review Karamsad Holdings Limited and Karamsad Investments Limitedhad applied for Voluntary liquidation pursuant to the provisions of Section 59 of theInsolvency and Bankruptcy Code 2016 to National Company Law Tribunal (NCLT). The windingup order for both these subsidiaries have been received from NCLT and Karamsad HoldingsLimited stands dissolved w.e.f. December 18 2019 and Karamsad Investments Limited standsdissolved w.e.f. December 31 2019. Except as stated above there are no companies whichhave become or ceased to be subsidiaries associates joint venture companies.
The performance and financial position of GMM Mavag AG and Mavag AG the wholly ownedsubsidiaries of the Company for the year ended March 31 2020 are set out asAnnexure B' forming a part of this Report.
5. SHARE CAPITAL:
There was no change in Authorised and Paid up Share Capital of the Company and neitherthere was any reclassification nor sub-division of equity shares during the year underreview.
6. REVISION OF FINANCIAL STATEMENTS:
None of Financial Statements of the Company pertaining to previous financial yearswere revised review duringthefinancial year under
7. DISCLOSURE OF INTERNAL FINANCIAL CONTROLS:
The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. During the year under review no material orserious lapses have been observed by the Internal Auditors of the Company for inefficiencyor inadequacy of such controls.
8. INTERNAL CONTROL SYSTEMS:
The Company's internal control procedure which includes internal financial controlsensures compliance with various policies practices and statutes keeping in view theorganization's pace of growth and increasing complexity of operations. The InternalAuditors carry out extensive audits throughout the year across all functional areas andsubmitted its reports to the Audit Committee. The said Reports do not include anyobservation of any serious lapses in the system.
9. MANAGEMENT DISCUSSION & ANALYSIS:
Management Discussion & Analysis Report for the year under review under Regulation24 of the SEBI Listing Regulations is presented in a separate section and forms a part ofthis Report.
10. BUSINESS RESPONSIBILITY REPORT:
Business Responsibility Report for the year under review under Regulation 34 of theSEBI Listing Regulations detailing the various initiatives taken by the Company on theenvironmental social and governance front is presented in a separate section and forms apart of this Report.
11. CORPORATE GOVERNANCE:
The Report on Corporate Governance as stipulated under Regulation 34 of the SEBIListing Regulations together Certificatefrom the Company's with
Auditors is presented in a separate section forms an integral part of this Report. fromDeloitte Haskins & Sells Therequisitecertificate LLP Chartered Accountants confirmingcompliance with the conditions of corporate governance as stipulated under the aforesaidSchedule V is enclosed to the Report on Corporate Governance.
12. CORPORATE SOCIAL RESPONSIBILITY POLICY:
The Board has constituted a Corporate Social Responsibility ("CSR") Committeeas per the provisions of Section 135 of the Companies Act 2013. The Board has also frameda CSR Policy as per the recommendations of the CSR Committee. The CSR Policy is availableon the Company's website at http://www.gmmpfaudler.com/content/CorporateSocialResponsibilityPolicy.pdf The composition of the Committee contents of CSRPolicy and report on CSR activities carried out during the financial year ended March 312020 in the format prescribed under Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 are set out as Annexure C' forming a part of thisReport.
13. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into by the Company during thefinancial year were in ordinary course of business and at arm's length basis. Also therewere no related party transactions which could be considered material in accordance withthe Policy of the Company on materiality of related party transactions. All related partytransactions are being reviewed and certified by an Independent Consultant and placedbefore the Audit Committee from time to time for their approval and also been taken onrecord 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 at arm'slength. Policy on dealing with related party transactions is available on the Company'swebsite at http://www. gmmpfaudler.com/content/PolicyonRelatedParty Transactions.pdf
For details please refer to Note 38 to the Stand-alone Financial Statements which setsout related party disclosures pursuant to Ind AS.
14. RISK MANAGEMENT POLICY:
The Company has formulated and adopted a Risk
Management Policy to prescribe risk assessment management reporting and disclosurerequirements of the Company. The said policy is available under the Investors Section onthe Company's website at http:// www.gmmpfaudler.com/content/Risk_Management_
15. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP): A. DIRECTORS:
The present composition of the Board is in compliance with the provisions of Section149 of the Companies Act 2013. During the year under review Dr. Amrita PatelIndependent Director and Mr. Khurshed Thanawalla Non-Executive Director (PfaudlerRepresentative) retired as Directors of the Company w.e.f. March 31 2020. Mr. VivekBhatia and Ms. Bhawana Mishra were appointed as Independent Directors of the Companyw.e.f. April 1 2020. Mr. Harsh Gupta was appointed as Non-Executive Director andRepresentative of Pfaudler w.e.f. April 1 2020.
As on date Mr. Nakul Toshniwal Dr. S. Sivaram Ms. Bhawana Mishra and Mr. VivekBhatia are the Independent Directors on the Board. All the Independent Directors havegiven a declaration to the Board that they meet the criteria of independence as providedunder section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulationsand amendments effective from April 1 2019.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Ashok Pateland Mr. Thomas Kehl Directors being longest in the office will retire by rotation at theensuing Annual General Meeting of the Company and being eligible have offered themselvesfor re-appointment. The Board recommends their re-appointment. In accordance with theprovisions of the Act none of the Independent Directors is liable to retire by rotation.
All Directors have certificateto thegiven Compliance Officer confirming theadherence to the Code of Conduct & Ethics Policy of the Company for the financial year2019-20.
B. KEY MANAGERIAL PERSONNEL:
Mr. Tarak Patel Managing Director Mr. Ashok Pillai Chief Operating Officer Mr.Jugal Sahu Officer and Ms. Mittal Mehta Company Secretary Compliance officer are the KeyManagerial Personnel of the Company. There was no change in Key Managerial Personnelduring the year under review.
C. DIRECTORS' RESPONSIBILITY STATEMENT:
In terms of Section 134(5) of the Companies Act 2013 and in relation to the auditedfinancial statements of the Company for the year ended March 31 2020 the Board ofDirectors hereby confirms that: a. in the preparation of the annual accounts theapplicable accounting standards had been followed along with proper explanation relatingto material departures; b. such accounting policies have been selected and appliedconsistently and the Directors have made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as atMarch 31 2020 and of the profit of the Company for that year; c. proper and maintenanceof adequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; 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 by theCompany and that such internal financial controls are adequate and were operatingeffectively; f. proper systems have been devised to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively
D. MEETINGS OF THE BOARD:
Six (6) Meetings of the Board of Directors were held during the financial year endedMarch 31 2020. The details of the Board Meetings with regard to their dates andattendance of each of the Directors thereat have been provided in the Corporate GovernanceReport.
E. AUDIT COMMITTEE:
The Audit Committee as on date comprises of five Financial members viz. Dr. S. SivaramMr. Nakul Toshniwal & Mr. Vivek Bhatia Independent Directors and Dr. Dominic Dellerand Mr. Harsh Gupta Non-Executive Directors. The details of meetings of the Committeeheld during the financial year under review along with attendance of members thereofchanges in the composition of Audit Committee and Role of the Audit Committee is providedin the Corporate Governance Report annexed to this Report. All the recommendations made bythe Audit Committee during the year were accepted by the Board.
F. ST AKEHOLDERS RELATIONSHIP
Pursuant to Section 178 of the Companies Act 2013 the Nomination and RemunerationCommittee and Stakeholder's Relationship Committee constituted by the Board of Directorsto deal with the matters as specified in the reference given to the respective committees.The details of roles powers and meetings of the
Committees held during the financial year under review along with attendance of membersthereof and status of grievances received from various stakeholders during the financialyear are furnished in the Corporate
Governance Report Section of the Board' Report.
G. NOMINATION REMUNERATION AND EVALUATION POLICY:
The Board of Directors has formulated a Policy which set standards for the nominationremuneration and evaluation of the Directors and Key Managerial Personnel and aims toachieve a balance of merit experience and skills amongst its Directors and Key ManagerialPersonnel.
Details of the Nomination Remuneration and Evaluation Policy are set out atAnnexure D' forming a part of this Report.
H. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out the annual performance evaluation of the Directors individually aswell as evaluation of the working of the Board and of the Committees of the Board by wayof 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 Reward Scenarios;
Key set Goals / KRA and achievements;
Professional Conduct Integrity;
Sharing of Information with the Board.
The Directors were satisfied with the evaluation process undertaken during the year.
I. & FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Company proactively keeps its Directors informed of the activities of the Companyits management and operations and provides an overall industry perspective as well asissues being faced by the industry. The
Familiarization Programme for the Board and details of various familiarizationprogrammes conducted during the year ended March 31 2020 are available on the
Company's website at http://www.gmmpfaudler.com/content/FamiliarizationProgramme2019_20.pdf
J. SECRETARIAL STANDARDS:
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave 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 provisions of Section 178(9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Whistle Blower Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc.
The employees of the Company have the right/option to report their concern / grievanceto the Chairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations. No instance underthe Whistle Blower Policy was reported during the financial year 2019-20.
17. PUBLIC DEPOSITS:
The company has notacceptedorrenewedany amount falling within the purview of provisionsof 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 detailsof deposits which are not in compliance with the Chapter V of the Act 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 ofconsecutive five years i.e. from the conclusion of 52nd Annual General Meeting till theconclusion of 57th Annual General Meeting by the shareholders of the Company.
Since the term of the Statutory Auditors is coming to an end at the ensuing AnnualGeneral Meeting approval of shareholders is sought as set out at Item No. 5 of the noticeof this Annual General Meeting for reappointment of M/s. Deloitte Haskins & SellsChartered Accountants Ahmedabad as Statutory auditors of the Company for a period of fiveconsecutive years i.e. from the conclusion of the 57th Annual General Meeting till theconclusion of the 62nd Annual General Meeting. They have confirmed that they are notdisqualified from being re-appointed as Auditors of the Company.
The Auditors' Report for the financial year ended March 31 2020 report does notcontain any reservation qualification or adverse remark. The notes on financial statementreferred to in the Auditors' Report are self-explanatory and do not call for any furthercomments.
B. SECRETARIAL AUDIT:
Secretarial Audit Report obtained pursuant to the provisions of Section 204 of theCompanies Act 2013 and Rules made there under from M/s. Rathi and Associates PracticingCompany Secretaries for the financial year 2019-20 is set out at Annexure E' forminga part of this Report.
The Secretarial Auditors Report for the financial year ended March 31 2020 does notcontain any reservation qualification or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and Rules madethere under the Board of Directors has appointed M/s. Rathi and Associates PracticingCompany Secretaries for conducting Secretarial Audit Report of the Company for thefinancial year 2020-21.
C. COST AUDITORS:
M/s. Dalwadi & Associates Cost Accountants
Ahmedabad Cost Auditors of the Company for the financial year 2019-20 have beenreappointed as Cost Auditors for conducting audit of the cost accounting recordsmaintained by the Company in respect of its manufacturing activities for the financialyear 2020-21. Necessary resolution for ratification of payment of remuneration to the saidCost Auditors is included in the Notice of Annual General Meeting dated May 23 2020.
D. INTERNAL AUDITORS:
M/s. Kalyaniwalla & Mistry Chartered Accountants has been appointed as InternalAuditors of the Company for the financial year 2020-21.
19. CREDIT RATING:
"A1+" rating to the Company's CRISILhas re-affirmed short-term bankingfacilities which is considered to have very strong degree of safety regarding timelypayment of financial obligations carrying lowest credit risk.
20. STATUTORY STATEMENTS:
A. CONSERVATION OF ENERGY TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are set out at Annexure F' 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 the financial position ofthe Company since the closure of financial year i.e. since March 31 2020.
C. DISCLOSURE OF ORDERS PASSED BY
REGULATORS OR COURTS OR TRIBUNAL:
No orders have been passed by any Regulator or Court or Tribunal which can have impacton the going concern status and on the Company's operations in future.
D. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2020 made under the provisions ofSection 92(3) of the Act is set out at Annexure H' forming a part of this Report.
E. DISCLOSURE UNDER SECTION 197(12) OF THE
COMPANIES ACT 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT &REMUNERATION) RULES 2014:
The ratio of the remuneration of each Director to the median remuneration of theemployees of the
Company for the financial year under review and other disclosures under Rule 5 of theCompanies (Appointment & Remuneration) Rules 2014 are set out at Annexure H'forming a part of this Report.
F. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
The particulars of loans given and investments made during the financial year underSection 186 of the
Companies Act 2013 are given at Notes forming part of the Financial Statements. Duringthe financial year the Company has neither provided any securities nor provided corporateguarantees for loans availed by the others.
G. PAYMENT OF REMUNERATION / COMMISSION TO MANAGING DIRECTOR FROM HOLDING OR SUBSIDIARYCOMPANIES:
During the year under review Mr. Tarak Patel Managing Director received a remunerationof CHF 35000 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 Act 2013 read withthe "Investor
Education and Protection Fund Authority (Accounting Audit Transfer and Refund)Amendment Rules 2017" the amounts of dividends remaining unclaimed for a period ofseven years and shares thereon are required to be transferred to the Investor Educationand Protection Fund ("IEPF").
During the year under review the Company has transferred Rs 270017/- on account ofunclaimed/ unpaid dividend along with corresponding 1005 equity shares of face value Rs2/- each to the IEPF. Details of the Nodal Officer appointed under the said provisionsare:
Ms. Mittal Mehta Company Secretary & Compliance Officer Email:firstname.lastname@example.org
21. SEXUAL HARASSMENT OF WOMEN AT THE
WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT 2013:
The Company has in place a Policy on Prevention of Sexual Harassment in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibitionand Redressal) Act 2013.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. During the year under review the Company has not receivedany complaint.
The Board of Directors confirm that no disclosure or reporting is required in respectof the following matters as there were no transactions on these matters during thefinancial year 2019-20:
1. Issue of equity shares with differential rights as to dividend voting or otherwise;
2. Issue of shares (including sweat equity shares or Stock options) to employees of theCompany; 3. non-exercising of voting rights in respect of shares purchased directly byemployees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) ofCompanies (Share Capital and Debentures) Rules 2014;
4. Material or serious instances of fraud falling within the purview of Section 143(12)of the Companies Act 2013 and Rules made there under.
The Board of Directors of the Company acknowledge with gratitude the support receivedfrom 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: Pune ||Place: Lonavala |
|Date: May 23 2020 || |