To the Members:
The Directors have pleasure in presenting the Fifty Sixth Annual Report along with theAudited Statement of Accounts of the Company for the year ended March 312019.
1. SUMMARY OF THE FINANCIAL RESULTS:
| || ||(Rs. 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 was up by 34% profitbefore tax was up by 40% and profit after tax was up by 43% as compared to previousfinancial year.
| || ||(Rs. 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 was up by 24%profit before tax was up by 21% and profit after tax was up by 19% as compared to previousfinancial year.
During the financial year 2018-19 there was no change in the business activities ofthe Company.
Detailed information on overview of the industry and important changes in the industryduring the last year external environment and economic outlook and growth of the Companyand other related disclosures are made in the Management Discussion & AnalysisReport' 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 Rs.43.85 million (excluding dividend tax of Rs. 9.01 million).
Based on the performance of the Company for the year the Board of Directors is pleasedto recommend a final dividend of Rs. 1.50 per equity share subject to approval of theShareholders at the Annual General Meeting which if approved will absorb Rs. 21.93million towards dividend and Rs. 4.51 million as dividend tax.
The aggregate amount of interim dividends paid during the year and the final dividendrecommended for the financial year ended March 31 2019 amounts to Rs. 4.50 per share i.e.Rs. 65.78 million (excluding dividend tax of Rs. 13.52 million).
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 2018-19. Hence the entire amount of profit has beencarried forward to the Profit & Loss Account.
4. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND 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 312019 are set out as AnnexureA' forming a part of this Report.
During the financial year 2018-19 Karamsad Investment Limited and Karamsad HoldingsLimited subsidiaries of the Company have applied for Members' Voluntary Winding up underSection 59 of the Insolvency and Bankruptcy Code 2016.
Except as stated above there are no companies which have become or ceased to besubsidiaries associates joint venture companies.
5. SHARE CAPITAL:
There was no change in Authorised and Paid up Share Capital of the Company and neitherthere was any reclassification of sub division of equity shares during the year underreview.
6. ACQUISITION OF INDUSTRIAL MIXING SOLUTIONS DIVISION OF SUDARSHAN CHEMICAL INDUSTRIESLIMITED:
On April 26 2019 the Company has acquired the Industrial Mixing Solutions Division ofSudarshan Chemical Industries Ltd. Pune. This acquisition is expected to enhance GMMPfaudler's industrial mixing business vertical by bringing in new products technologiescustomers and industry segments. Significant cost synergies are expected due to economiesof scale value engineering and by leveraging the strengths of both the organisations intheir markets. The two businesses once consolidated would become India's premierindustrial mixing solutions provider.
7. REVISION OF FINANCIAL STATEMENTS:
None of Financial Statements of the Company pertaining to previous financial yearswere revised during the financial year under review.
8. 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.
9. 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 andsubmit its reports to the Audit Committee on a quarterly basis. The said Reports do notcontain any observation of any serious lapse in the system.
10. 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 forming part ofthis Report.
11. CORPORATE GOVERNANCE:
The Report on Corporate Governance as stipulated under Regulation 34 of the SEBIListing Regulations together with a Certificate from the Company's Auditors is presentedin a separate section forming a part of this Report.
The requisite certificate from M/s. Deloitte Haskins & Sells LLP CharteredAccountants Statutory Auditors confirming compliance with the conditions of corporategovernance as stipulated under the aforesaid Schedule V is enclosed to the Report onCorporate 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 available on the Company's website athttp://www.gmmpfaudler.com/content/ CorporateSocialResponsibilityPolicy.pdf
The composition of the Committee contents of CSR Policy and report on CSR activitiescarried out during the financial year ended March 312019 in the format prescribed underRule 9 of the Companies (Corporate Social Responsibility Policy) Rules 2014 are set outas Annexure B' forming a part of this Report.
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 party transactions are being reviewed and certified by an IndependentConsultant and placed before the Audit Committee from time to time for their approval andalso been taken on record by the Board.
The Board of Directors has approved the criteria for granting omnibus approval by theAudit Committee within the overall framework of the Policy on related party transactions.Prior omnibus approval is obtained for related party transactions which are of repetitivenature and entered in the ordinary course of business and at arm's length.
Policy on dealing with related party transactions is available on the Company'swebsite at http:// www.gmmpfaudler.com/content/PolicyonRelated PartyTransactions.pdf
For details please refer to Note 36 to the Stand-alone Financial Statements which setsout related party disclosures.
14. RISK MANAGEMENT POLICY:
The Company has formulated and adopted a Risk Management Policy to prescribe riskassessment management reporting and disclosure requirements of the Company. The saidpolicy is available under the Investors Section on the Company's website 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 the provisions of Section149 of the Companies Act 2013.
During the year under review Mr. P. Krishnamurthy Independent Director resigned asDirector of the Company w.e.f. May 14 2018 pursuant to proviso of sub-section (1) ofSection 167 of the Companies Act 2013 notified by the Ministry of Company Affairs videnotification dated May 7 2018. Mr. Nakul Toshniwal was appointed as an IndependentDirector of the Company w.e.f. May 16 2018 to fill in the casual vacancy created by theresignation of Mr. P. Krishnamurthy.
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. KhurshedThanawalla and Mr. Thomas Kehl Directors being longest in the office will retire byrotation at the ensuing Annual General Meeting of the Company and being eligible haveoffered themselves for re-appointment. The Board recommends their re-appointment. Inaccordance with the provisions of the Comanies Act 2013 none of the Independent Directorsis liable to retire by rotation.
All Directors have given a certificate to the Compliance Officer confirming theadherence to the Code of Conduct & Ethics Policy of the Company for the financial year2018-19.
B. INDEPENDENT DIRECTORS:
The Independent Directors of the Company have given the declaration and confirmation tothe Company as required under Section 149(7) of the Companies Act 2013 and Regulation25(8) of the SEBI Listing Regulations confirming that they meet the criteria ofindependence and that they are not aware of any circumstance or situation which exist ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgment and without any external influence.
C. KEY MANAGERIAL PERSONNEL:
Mr. Tarak Patel Managing Director Mr. Ashok Pillai Chief Operating Officer Mr.Jugal Sahu Chief Financial Officer and Ms. Mittal Mehta Company Secretary &Compliance officer are the Key Managerial Personnel of the Company. There was no change inKey Managerial Personnel during the year under review.
D. 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 312019 the Board ofDirectors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors have made judgments and estimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Company as at March 312019 and of theprofit of the Company for that year;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
E. MEETINGS OF THE BOARD:
Four (4) Meetings of the Board of Directors were held during the financial year endedMarch 312019. The details of the Board Meetings with regard to their dates and attendanceof each of the Directors thereat have been provided in the Corporate Governance 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. Dominic Deller(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 the Stakeholder's RelationshipCommittee constituted by the Board of Directors to deal with the matters related tostakeholders' grievances met 3 times during the financial year.
The details of meetings of the Committee held during the financial year under reviewalong with attendance of members thereof and status of grievances received from variousstakeholders during the financial year are furnished in the Corporate Governance ReportSection of the Board' Report.
H. 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 C' forming a part of this Report.
I. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and the SEBI ListingRegulations the Board has carried out the annual performance evaluation of the Directorsindividually as well as evaluation of the working of the Board and of the Committees ofthe 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 Reward Scenarios;
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 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 312019 are available on the Company'swebsite at http://www.gmmpfaudler. com/contentFamilarization Programme.pdf
K. SECRETARIAL STANDARDS:
The Directors state that all applicable Secretarial Standards issued by the Instituteof 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 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 employees ofthe 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 to report their concern/ grievance to theChairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations.
No instance under the Whistle Blower Policy was reported during the financial year2018-19.
17. PUBLIC DEPOSITS:
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 during the year under review.
Hence the requirement for furnishing of details of deposits which are not incompliance 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 appointedas Statutory Auditors of the Company for a term of consecutive five yearsi.e. from theconclusion of 52nd Annual General Meeting till the conclusion of 57th Annual GeneralMeeting by the shareholders of the Company. They have confirmed that they are notdisqualified from continuing as Auditors of the Company.
The Auditors' Report for the financial year ended March 31 2019 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 2018-19 is set out at Annexure D' forminga part of this Report.
The Secretarial Auditors Report for the financial year ended March 31 2019 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 re-appointed M/s. Rathi and Associates PracticingCompany Secretaries for conducting Secretarial Audit Report of the Company for thefinancial year 2019-20.
C. COST AUDITORS:
Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 the Company maintains the cost accounting records in respect ofits manufacturing activities.
M/s. Dalwadi & Associates Cost Accountants Ahmedabad Cost Auditors of theCompany for the financial year 2018-19 have been reappointed as Cost Auditors forconducting audit of the cost accounting records maintained by the Company in respect ofits manufacturing activities for the financial year 2019-20.
Necessary resolution for ratification of payment of remuneration to the said CostAuditors is included in the Notice of Annual General Meeting dated May 30 2019.
D. INTERNAL AUDITORS:
M/s. Kalyaniwalla & Mistry Chartered Accountants has been re-appointed as InternalAuditors of the Company for the financial 2019-20.
19. CREDIT RATING:
CRISIL has re-affirmed "A1+" rating to the Company's short-term bankingfacilities which is considered to have very strong degree of safety regarding timelypayment of financial obligations carrying lowest credit risk.
CRISIL has also re-affirmed its rating of the Company's long-term bank facilities to"AA-/stable" which is considered to have high degree of safety regarding timelyservicing of financial obligations carrying low credit risk.
20. STATUTORY STATEMENTS:
A. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
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 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 the financial position ofthe Company since the close of financial year i.e. since March 312019. Further it ishereby confirmed that there has been no change in the nature of business 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 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 312019 made under the provisions ofSection 92(3) of the Companies Act 2013 is set out at Annexure G' forming a part ofthis Report.
E. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURES ASPER 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 underRule 5 of the Companies (Appointment & Remuneration) Rules 2014 are set out atAnnexure F' 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 FinancialStatements. During the financial year the Company has neither provided any securities norprovided corporate guarantees 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 aremuneration 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 Act 2013 read withthe "Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Amendment Rules 2017" the amounts of dividends remaining unclaimed for aperiod of seven years and shares thereon are transferred to the Investor Education andProtection Fund ("IEPF").
During the year under review the Company has transferred Rs. 263884/- on account ofunclaimed/ unpaid dividend and 6909 equity shares of face value Rs. 2/- each to the IEPF.
Details of the Nodal Officer: Ms. Mittal Mehta Company Secretary & ComplianceOfficer.
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 2018-19:
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 by employeesunder a scheme pursuant to Section 67(3) of the Companies Act 2013 read with Rule 16(4)of Companies (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 Directorsrecognize and appreciate the efforts of all employees that ensured accelerated growth in achallenging 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. || |