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Godfrey Phillips India Ltd.

BSE: 500163 Sector: Consumer
BSE 00:00 | 21 Jan 1117.10 -13.70






NSE 00:00 | 21 Jan 1122.25 -7.20






OPEN 1126.55
52-Week high 1409.85
52-Week low 831.85
P/E 13.84
Mkt Cap.(Rs cr) 5,809
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1126.55
CLOSE 1130.80
52-Week high 1409.85
52-Week low 831.85
P/E 13.84
Mkt Cap.(Rs cr) 5,809
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Godfrey Phillips India Ltd. (GODFRYPHLP) - Director Report

Company director report



Your Directors are pleased to present the 84th Annual Report on the businessand operations along with the Audited

Financial Statements of the Company for the financial year ended March 31 2021.


The global economy was impacted by Covid-19 pandemic from early 2020 and as a result ofwhich World GDP contracted by 3.3% in 2020 from a growth of 2.8% in 2019. The unfortunateoutbreak of Covid-19 pandemic played havoc with an unprecedented health and economiccrisis around the world. The first half of 2020 saw the lockdowns and other curbs acrossthe world to contain the spread of the virus. Businesses and manufacturing facilities wereshut down completely and restrictions were put in place for movement of citizens bothinternally as well as externally. There was a sharp fall in both consumer demand andindustrial output in the first half of 2020. However in the second half of 2020 thegovernments started easing lockdown restrictions to facilitate re-opening of the economy.Businesses were allowed to function under various policy parameters and guidelines set outby central/federal governments and local authorities. During the year the central banksalso acted swiftly to prevent the economic fallout through preventive measures in theirrespective countries by providing excess liquidity in the markets by way of loweringinterest rates. The governments unleashed relief packages by way of distribution of foodand essential supplies as well as direct money transfer specially to the economicallyweaker sections of the society. With the governments easing lockdown measures graduallyand central banks continually extending liquidity measures the second half of 2020 saw animprovement in economic activities on the back of consumption demand pick up and the hopeof vaccine development and availability in different geographies. Led by steady recoveryin demand and consequential rise in output the emerging economies saw a drop in GDP by4.7% as against the projected decline of 6.1% as per the World Economic Outlook report ofApril 2021. Indian economy contracted by 8.0% in 2020 as compared to a growth of 4.0% in2019. India was the second worst hit country in the world due to Covid-19 pandemic. Theeconomic crisis deepened in India due to Covid-19 induced business lockdown andrestrictions across industries and sectors. The auto manufacturing construction and realestate sectors had come to a grinding halt for better part of 2020. The Indian governmentacted swiftly to avert this unprecedented crisis by providing relief packages toindividuals and households by way of direct money transfers and free ration supplies andhelped businesses stay afloat by introducing several policy changes to ease thetimelines/deadlines for various compliances. The RBI too provided liquidity in the marketby lowering the interest rates for borrowing and easing NPA norms for banks whilemaintaining an accommodative stance in the monetary policy. All these measures helpedreviving the Indian economy in the latter half of 2020 when lockdown began to ease andeconomic activities began to pick up. The automobile sector saw a rebound in sales due topent-up demand as restrictions on movement were relaxed and consumer spending increased.The government also undertook various initiatives for the revival of Infrastructure andReal Estate sector and as a result the sectors saw increased investments from both publicand private players. In the wake of these measures the Indian economy was able to putitself on the path of a strong recovery and IMF too revised its growth forecast for Indiafor 2021 to a projected 12.5% growth from 7.4% in its earlier report of 2020. HoweverApril and May 2021 brought back the era of uncertainty as economic activities took thedownturn with the arrival of the second wave which turned out to be much more severe inimpact on the mankind than the first one. But the manufacturing logistics and industrialactivities continued albeit at a slower pace under the state government guidelines andpolicies. With the easing of restrictions in June the economic outlook looks buoyantaided by the mass vaccination drive conducted by the government.


Tobacco has always been an important commercial crop in India and the country is thesecond largest producer of tobacco in the world with an annual production of around 800million kgs. The industry generates enormous benefits for the nation in terms ofemployment in the agricultural sector income to farmers revenue generation and foreignexchange earnings. The tobacco industry provides employment to over 45.7 million people inIndia directly and indirectly with various varieties of tobacco are grown across 13states in the country. India is also the largest exporter of tobacco and tobacco relatedproducts and generates foreign exchange earnings of around Rs. 6000 crores annually. Interms of consumption tobacco consumption in India in the form of cigarettes is less than2% of the global consumption even though the country accounts for 18% of the population inthe world. India's per capita consumption of cigarettes is also the lowest in the worldwith just 89 cigarettes per annum. India also accounts for 84% of world's smokelesstobacco consumption. Only 9% of tobacco consumed in India constitute legal cigaretteswhile 91% are from traditional products and illicit cigarettes. This 9% contributes to 80%of the taxes collected from the industry by the Government of India.

The tobacco industry faces enormous challenges in India despite contributing more thanRs 43000 crores annually to the government exchequer through taxes and levies. With 85%coverage India has one of the largest pictorial warning size on the packs in the worldwhen compared with global average of 40%. Also the most alarming fact is the rise inillicit options that are cheaper non-regulated as well as inferior in quality whichundermine public health. Around 68% of tobacco consumption comes from the unorganisedsector which are non-compliant and therefore adversely impact government's tax receipts.Over the time the volumes of illicit cigarettes have seen a sharp spurt and currently itis estimated to be 1/3rd of the legal volumes sold in India. India is considered to be the4th largest illicit cigarette market in the world with a volume of 28 billion sticks in2019 which has increased from 26.5 billion in 2018 registering a growth of ~6% year onyear.

The tobacco industry like many others also came to a grinding halt due to thenationwide lockdown and closure of manufacturing facilities. During the periodavailability of Cigarettes was impacted which further aided the illicit cigarettes in thedomestic market. Also the tobacco farmers too suffered by not being able to getremunerative prices firstly due to somewhat lower quality of crop and then inability tomarket the crop owing to disruption in auctions restriction on participation of farmersin auctions absence of international buyers logistical challenges etc. As the lockdownmeasures were eased in the second half of 2020 increased consumer spending helped thetobacco industry remain afloat as the broader FMCG sector was also able to keep thegrowth momentum and saw double digit growth in the fourth quarter of 2020-21 particularlyin urban markets. However the ongoing second wave has slowed down the growth momentum andis posing a challenge for both the government and the legal tobacco industry.

The challenges faced by the tobacco industry in India can be addressed by balancing thetax policies revisiting the existing regulations based on inputs from industry expertsand implementing stricter measures on illicit trade.


India's FMCG sector is the fourth largest contributor to the economy. It contributes10% to the GDP and 8% to the employment in India. According to estimates Indian retailsector was worth $883 billion in 2020 and is projected to reach $1.3 trillion by 2024. Thegrocery is the largest segment with contribution of $608 billion. With the onset ofpandemic at the beginning of 2020 and subsequent lockdown measures implemented by thegovernment India's consumer spending saw a decline as various restrictions were put inplace. The effects of decrease in spending were felt by the retail industry barringessential services such as food and grocery. The offline retailers saw their sales declineas shops were shut due to the containment measures put in place by local and centralgovernments across states. The online retailers on the other hand saw their sales volumegrow exponentially and as a result the investments in e-commerce grew significantly fromboth domestic and international players. The rise in online retailing is attributed toincrease in digital adoption smartphone penetration technological advancements inpayments system increasing consumer awareness young population and large consumermarket. The Government of India's initiatives such as ‘Digital India' programme hascontributed significantly to the growth of e-commerce segment. In addition to this theretail industry in India also has 100% FDI in single-brand retail and 51% FDI inmulti-brand retail. With the gradual rise in consumer demand both in urban and ruralareas the retail sector is expected to recover to pre-covid levels sooner than later.

The retail industry's high growth potential low economic risk and moderate politicalrisk has attracted international investors to capture this segment in India. The Indianretail industry both offline and online has witnessed a slew of investments and mergersand acquisitions in 2020 and 2021. The e-commerce industry is expected to reach $111billion by 2024. The online grocery market too witnessed strong investments from domesticand international players in both B2B and B2C segments. India has also occupied aremarkable position in global retail rankings and currently ranks 15th in FDI ConfidenceIndex and is expected to become 3rd largest consumer market in the world by 2025.

The factors supporting the growth potential of the retail industry are improvingdistribution and logistics network offline retail expansion through exclusive storenetworks retailing through multiple channels leveraging partnerships and joint venturesoffering value added services and focussing on strong supply chain network.

Currently India is in the middle of ongoing second wave which has had much severeimpact on human health and economy however the impact on consumer spending and demandhas not been dented to the extent as it was during the same time in last year. The firstquarter is expected to witness the impact of second wave yet it is expected to postyear-on-year growth on account of low base and minimal disruption in manufacturing andlogistics sector. Furthermore the vaccination drives conducted by government andcontinued investments in retail industry is expected to build consumer confidence whichin turn is expected to keep the demand and growth prospects robust for the industry in thenear term.



The cigarettes industry has seen negative growth in FY 2021 largely due to theunprecedented headwinds of the

COVID-19 pandemic increase in taxation on cigarettes towards the end of last fiscaland the ever-increasing penetration and prevalence of the illicit and contrabandcigarettes in the country. In the backdrop of this challenging situation and restrictionsled by disruptions in the industry supply chains and the distribution channels acrossmarkets at the beginning of the year your Company has been able to register a growth inits leading operating segment of Regular Sized Filter Tipped (RSFT) Cigarettes over FY2020. Your Company has been able to quickly respond to the new ways of working under thisnew business environment and has put all plans in place to ensure business continuity byincorporating new processes at an organization-wide level. With the resurgence shown inthe RSFT segment and coupled with sharper cost optimization mindset adopted your Companyhas tried very hard to minimize the impact of the pandemic on its business outcomes.

Your Company is committed to driving shareholder value in the coming years byaggressively pursuing growth via portfolio expansion to accommodate varying consumerpreferences and by increasing its footprint through expanded distribution infrastructureaccelerated digital capabilities and cost optimization.

Chewing Products

Chewing business continues to be aligned with the objective to make the businessprofitable by focusing on premium segment and strengthening the flagship brand of thebusiness ‘Pan Vilas'.

This year was an unprecedented year as the pan masala and chewing tobacco industry gotsignificantly affected due to the pandemic led disruptions and restrictions put in placeby the authorities. For large part of the year core markets of Pan Vilas and its variantswere non-operational which led to significant decline in consumption. After easing ofrestrictions and lifting of lockdown your Company has launched a first of its kind andinnovative pan masala by the name ‘Pan Vilas Flavour Blast' which is a unique flavourbeads concept in pan masala and delivers a delightful and unique taste experience. Theinitial response is quite encouraging and we are taking it to more markets. Confectionarybusiness also got adversely affected due to restricted distribution but is graduallyreviving back with added focus on availability. The Company is gearing up to launchinnovative candy products to cater to strong consumer needs in wellness space and changingpreferences.


The following table shows the status of exports for different products during the yearunder report:

2020-21 2019-20
Commodity/Product Value (Rs. in crores) Value (Rs. in crores)
Cigarettes 139.57 163.66
Unmanufactured tobacco/CLB 421.35 377.94
Cut tobacco 36.53 55.70
Candy/Tea Nil 0.48
Total 597.45 597.78

Unmanufactured tobacco exports have done exceptionally well despite adverse conditionsexperienced due to COVID-19 by registering growth of 11.5% over last financial year. Covidled supply chain disruptions took toll on cigarette and cut tobacco exports due toprolonged shutdown of Rabale plant. For some time we serviced our clients by gettingcigarettes contract manufactured in the UAE. Your Company has done reasonably well in thecut tobacco business across CIS acquiring multiple new clients. In line with otherbusiness goals it has started to make a foothold in the markets of Canada CroatiaMorocco

Netherland and Sweden.


24Seven is India's only twenty-four hours convenience store chain with more than 90stores spread across Delhi NCR and Chandigarh. The brand continuously evolves and upgradesto meet the urban consumers' needs living up to its mantra ‘Awesome through the dayAwesome through the night'. The year began amidst a strict lockdown post the emergence ofthe Coronavirus and despite the challenges posed by it we looked at opportunities andsuccessfully reduced operating costs and brought in more operating efficiency. As aresult during FY 2021 gross sales value dropped by 13% to Rs.355 crores from Rs.410crores during previous year owing to reduced operating days and restricted operatinghours. During the year we have introduced some new products under our private label withencouraging response from the customers. We adopted all safety protocols as mandated andrecommended by the authorities to safeguard the health and well-being of our customers andemployees. We continue to follow these at all our stores.


The Human Resource function remained committed and focused in ensuring that the Companyyet again gets recognised among Best Places to Work in India consecutively for the thirdyear. During the trying times of pandemic your Company left no stone unturned in ensuringproper care concern support and reaching out to its employees and associates by putting‘people first' on its agenda. The camaraderie and discretionary efforts displayed byworkforce further strengthened the DNA of your Company in these tough times. While itremained humane in its approach towards people by continuing its benevolent peoplepolicies and practices the very foundation of its culture that drives the passion forwinning ensured constant performance focus and results delivery. Various initiativesalong the year kept the workforce virtually connected engaged and motivated. Withcontinued focus on developing internal people and leadership capabilities your Companyalso has been able to cultivate a talent pipeline that minimises future attrition risksand ensures business continuity.


There have been rapid advances in the areas of Information Technology and Digitaloffering new avenues for value creation. The Company has a strategic approach forleveraging modern technologies. We have implemented complete Work-from-Home (WFH)solutions which were tested and enhanced during the Covid crisis and the entire employeebase adopted and adapted to this in double-quick time. This was the initiation of movingtowards a digital workplace with further initiatives launched this year towards employeeself-service.

We have already implemented Robotic Process Automation (RPAs) in several of ourbusiness processes. We have also launched a Mobile App to give a seamless experience toour employees and further increase engagement levels. We are in the process ofimplementing Digital Supply Chain solutions that leverage iOT AI and ML. We have alsoembarked on a journey to utilize Video Intelligence capabilities and building DigitalVideo libraries. All these have been conceptualized with enhanced standards ofCybersecurity at the Core several measures have been taken in this regard to improveend-point security network and data centre security enhanced WFH measures and SOC/SIEMsetups.

With all the above your Company has embarked on a structured digital transformationprogram for the organization aligned to strategic business goals and adopting the best oftechnologies practices and methodologies.


Your Company continues to enjoy the highest rating of ‘CRISIL A1+' for Short TermDebt Programme ‘CRISIL AA+/ Stable' for Long Term Loan ‘CRISIL AA+/Stable' forfund-based credit facilities and long term non-fund based Facilities & ‘CRISILA1+' for short term non-fund-based facilities. With these ratings in place your Companycan raise funds at most competitive terms. Following the principles of liquidity safetyand tax efficient returns the Company has been deploying its long term surplus fundsprimarily in debt-oriented schemes of reputed mutual funds. Also the

Company continued to park its temporary surpluses in liquid schemes of various mutualfunds.


2020-21 2019-20
Rs. in Lakhs Rs. in Lakhs
Profit before Depreciation and Tax 60340.45 66828.19
Less: Depreciation and amortization 13845.10 15238.39
Profit before tax 46495.35 51589.80
Less: Provision for tax
-current tax 10235.44 12613.16
-deferred tax 565.81 188.67
Profit after tax for the year 35694.10 38787.97
Add: Other comprehensive income/(loss)-net of tax (135.95) (1018.81)
Total comprehensive income 35558.15 37769.16

During the year the gross sales value registered a negative growth of 10.3% byreaching the level of Rs. 6408 crores from Rs. 7144 crores last year. Similarly theprofit after tax was Rs. 356.94 crores as compared to Rs. 387.88 crores last year.


Your Directors are pleased to recommend the dividend of 1200% i.e. Rs. 24 per equityshare of face value of Rs.2/- each. The proposed dividend will absorb Rs. 12478.54 lakhs.


Your Company has not accepted any deposits covered under Chapter V of the CompaniesAct 2013 and hence no details pursuant to Rules 8(v) and 8(vi) of the Companies(Accounts) Rules 2014 are required to be reported.


As required under Section 134(3)(a) and section 92(3) of the Act the Annual Return hasbeen uploaded on the Company's website and can be accessed at


As on 31st March 2021 your Company had seven subsidiaries and threeassociate companies. The basic details of these companies form part of the Annual Return.

Form AOC-1 containing the salient features of financial statements of the Company'ssubsidiaries and associates is attached as ‘Annexure - 1'. Note 46 of theconsolidated financial statements shows the share of each subsidiary and associate companyin the consolidated net assets and profits of the Company. The audited financialstatements of these entities will be available for inspection during business hours at theRegistered Office of the Company.


In accordance with Indian Accounting Standard (Ind AS-110) - Consolidated FinancialStatements Group Accounts form part of this Annual Report. The Group Accounts have beenprepared based on financial statements received from the subsidiary and associatecompanies as approved by their respective Boards.


Your Company has a robust system of internal controls commensurate with the size of theCompany and the nature of its business which ensures that transactions are recordedauthorised and reported correctly apart from safeguarding its assets against loss fromwastage unauthorised use and disposition.

The internal control systems are supplemented by well documented policies guidelinesand procedures which are in line with the internal financial control frameworkrequirements. There is an extensive programme of internal audit by a firm of charteredaccountants followed by periodic management reviews.

The Audit Committee actively reviews the adequacy and effectiveness of the internalcontrol systems and suggests improvements to strengthen the same.


The Company is committed to inclusive growth and improved lives. This focus ismanifested through the Company's CSR initiatives undertaken around farmers who arefundamental to the core of our business. Strategically integrated into our business ourCSR programme drives sustainable development and livelihood for Burley Tobacco farmingcommunities in Andhra Pradesh. Most vulnerable to the impacts of environment

Company's long term initiatives focus on water and soil conservation through check damsand localised recharges biodiversity alternate energy source while short to mid-terminitiatives look at access to safe drinking water improving earning capacity sustainableagricultural practices better health elimination of child labour and access toeducation.

The Company has also initiated intensive programs around theircorporateofficeregionDelhi NCR that focuses on promotion of healthcare and education by holding health campsHIV awareness programs life skill training for adults and children. Company has alsoundertaken infrastructure development of government schools along with new modern methodsof teaching and learning to ensure access to quality education.

In the times of pandemic the Company also invested in providing aid to marginalisedwith dry ration and distribution of safety kits in partnership with local bodies.

The Company has constituted a CSR Committee of the Board in accordance with theprovisions of Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014. The brief outline of the CSR policy overviewof the activities undertaken with amounts spent thereon during the year and composition ofthe Committee has been disclosed in ‘Annexure - 2'.


Mr. Samir Modi (DIN:00029554) will retire by rotation at the ensuing Annual GeneralMeeting in accordance with the provisions of Section 152 of the Companies Act 2013 andbeing eligible has offered himself for re-appointment. Mr. Ruchir Kumar Modi (DIN:07174133) will retire by rotation at the ensuing Annual General Meeting in accordancewith the provisions of Section 152 of the Companies Act 2013. The Nomination andRemuneration Committee (NRC) after due consideration has recommended againstre-appointment of Mr. Ruchir Kumar Modi. Subsequently the Boardin its meeting hasaccepted the recommendation of the NRC to not re-appoint Mr Ruchir

Kumar Modi and subject to the approval of the shareholders has resolved that thevacancy created by retirement of

Mr. Ruchir Kumar Modi be not filled for the time being. Accordingly a resolution fornot filling the vacancy created by retirement of Mr. Ruchir Kumar Modi forms part of theNotice of the ensuing Annual General Meeting. During the year under review Mr. SumantBharadwaj (DIN: 08970744) was appointed as Additional Director to serve as Non-ExecutiveIndependent Director of the Company in the board meeting held on 13th February 2021. Asper provisions of the Companies Act 2013 Mr. Sumant Bharadwaj's appointment is subjectto the approval of the members in the ensuing Annual General Meeting. Accordingly aresolution proposing appointment of Mr. Sumant Bharadwaj as Non-Executive IndependentDirector of the Company for a term of five years forms part of the Notice of the ensuingAnnual General Meeting.

The Independent Directors of your Company have confirmed that (a) they meet thecriteria of Independence as prescribed under Section 149 of the Companies Act 2013 andRegulation 16 of the SEBI (LODR) Regulations 2015 and (b) they are not aware of anycircumstance or situation which could impair or impact their ability to discharge dutieswith an objective independent judgement and without any external influence. Further inthe opinion of the Board the Independent Directors fulfill the conditions prescribedunder the Listing Regulations and are independent of the management of the Company.


Details pertaining to the way evaluation of the Board its committees and individualDirectors has been carried out form part of Corporate Governance Report.


Dr. Bina Modi Managing Director Mr. Samir Modi Executive Director Mr. SharadAggarwal Whole-time Director Mr. Sunil Agrawal Chief Financial Officer and Mr. SanjayGupta Company Secretary of the Company are deemed to be Key Managerial Personnel of theCompany as per the provisions of Companies Act 2013 and rules made thereunder.


Details of the meetings of the Board held during the year form part of the CorporateGovernance Report.


The composition functions and details of the meetings of the Audit Committee heldduring the year form part of the Corporate Governance Report.


Your Company considers that risk is an integral part of its business and therefore ittakes proper steps to manage all risks in a proactive and efficient manner. The Companymanagement periodically assesses risks in the internal and external environment andincorporates suitable risk treatment processes in its strategy and business and operatingplans. The details of practices being followed by the Company in this regard form part ofthe Corporate Governance Report. There are no risks which in the opinion of the Boardthreaten the very existence of your Company. However some of the challenges faced by ithave been dealt with under Management Discussion and Analysis which forms part of thisReport.

Details regarding constitution of Risk Management Committee its role &responsibility form part of the Corporate Governance Report.


Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 (the‘Act') the Directors to the best of their knowledge confirm that:

(i) In the preparation of the Annual Accounts the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures if any;

(ii) Appropriate accounting policies have been applied consistently and judgements andestimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the

Company at the end of the financial year and of the profit of the Company for theperiod;

(iii) Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities;

(iv) The Annual Accounts have been prepared on a going concern basis;

(v) The internal financial controls to be followed by the Company have been laid downand such internal financial controls are adequate and are operating effectively; and

(vi) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.

The above statements were noted by the Audit Committee at its meeting held on 25thJune 2021.


Form AOC-2 containing particulars of contracts or arrangements entered into by theCompany with related parties referred in Section 188(1) of the Companies Act 2013 isattached as ‘Annexure - 3'.

Details of related party transactions and related disclosures are given in the notes tothe financial statements.


Details of loans guarantees and investments covered by the provisions of Section 186of the Companies Act 2013 are given in the notes to the financial statements.


Details of Whistle Blower Policy/Vigil Mechanism form part of the Corporate GovernanceReport.


The appointment and remuneration of Directors is governed by the recommendation ofNomination and Remuneration

Committee and then decided by the Board subject to approval of the shareholders.

The remuneration payable to the Directors is decided keeping into consideration longterm goals of the Company apart from the individual performance expected from Director(s)in pursuit of the overall objectives of the Company. The remuneration of ExecutiveDirector(s) including Managing Director(s) and Whole-time Director(s) is governed by therecommendation of Nomination and Remuneration Committee as per the criteria recommended byit and then approved by the Board subject to approval of the Shareholders.

The Non-executive Director(s) may be paid remuneration by way of commission either byway of monthly payments or specified percentage of net profits of the Company or partly byone way and partly by the other as may be recommended by Nomination and RemunerationCommittee and then decided by the Board subject to approval of the Shareholders. Inaccordance with the provisions of the Articles of Association of the Company and theCompanies Act 2013 a sitting fee (presently fixed at Rs. 100000 per meeting) is paidto the Non-executive Directors of the Company who are not drawing any remunerationdescribed hereinabove for attending any meeting of the Board or of any Committee thereof.The remuneration payable to Directors shall be governed by the ceiling limits specifiedunder section 197 of the Companies Act 2013.

The remuneration policy for other senior management employees including key managerialpersonnel aims at attracting retaining and motivating high calibre talent and ensuresequity fairness and consistency in rewarding the employees. The remuneration tomanagement grade employees involves a blend of fixed and variable component withperformance forming the core. The components of total remuneration vary for differentemployee grades and are governed by industry practices qualifications and experience ofthe employees responsibilities handled by them their potentials etc. Remuneration ofsenior management employees is also being looked at by the Nomination and RemunerationCommittee.


As mandated by the Listing Regulations the Board has formulated a dividenddistribution policy and the same is attached as ‘Annexure - 7' and is alsoavailable on the Company's website at:


Key Financial Ratios for the financial year 2020-21 with comparatives for the year2019-20 are disclosed in ‘Annexure - 8'.


As mandated by the Listing Regulations the Business Responsibility Report has beenincluded as part of the Annual Report.


Status of the unclaimed shares as on 31st March 2021 has been mentioned inthe Report on Corporate Governance.


The Company is committed to maximise the value for its stakeholders by adopting theprinciples of good Corporate Governance in line with the provisions of law andparticularly those stipulated in the Listing Regulations. Its objective and that of itsmanagement and employees is to manufacture and market the Company's products in a way soas to create value that can be sustained over the long term for consumers shareholdersemployees business partners and the national economy in general.

Certificate from the auditors of the Company regarding compliance of the conditions ofCorporate Governance as stipulated in the Listing Regulations is enclosed.

Certificate from Dr. Bina Modi ManagingDirectorastheChiefExecutiveOfficer (CEO) andMr. Sunil Agrawal Executive Vice President FinanceastheChiefFinancialOfficer (CFO) inrelation to the financial statements for the year along with declaration by the CEOregarding compliance with the code of business conduct of the Company by the directors andthe members of the senior management team of the Company during the year were submittedto and taken note of by the Board.


In compliance with the provisions of Section 139 and other applicable provisions of theCompanies Act 2013 and the Companies (Audit and Auditors) Rules 2014 (including anystatutory modification(s)/re-enactment(s)/ amendment(s) thereof for the time being inforce) S.R.Batliboi & Co. LLP Chartered Accountants (FRN 301003E/ E300005) wereappointed as Statutory Auditors at the Eightieth Annual General Meeting of the Companyheld on 15th September 2017 to hold officefor a term of five (5) consecutiveyears from the conclusion of the Eightieth Annual General Meeting until the conclusion ofthe Eighty Fifth Annual General Meeting subject to the ratification at the Annual GeneralMeeting in each of the subsequent years during the aforementioned term of theirappointment. However the requirement of annual ratification has been dispensed with underthe Companies (Amendment) Act 2017 which has been notified on 7 th May 2018.forms part of the Annual Report and does not contain Auditors'Reportonthe anyqualification reservation adverse remark or disclaimer.


The provisions of Cost Audit are not applicable on the Company.


M/s. Chandrasekaran Associates Practicing Company Secretaries have been appointed asthe Secretarial Auditor of the Company. The Secretarial Audit Report for the year underreview is attached as ‘Annexure - 4' and does not contain any qualificationreservation adverse remark or disclaimer.


Pursuant to Clause 9 of Revised Secretarial Standard -1 (SS -1) your Company hascomplied with applicable Secretarial Standards issued by Institute of Company Secretariesof India during thefinancial year under review.


During the year under review no significant and material order was passed by theRegulators/Courts that could impact the going concern status of the Company and its futureoperations.

There is no proceeding pending under the Insolvency and Bankruptcy Code 2016. Therewas no instance of onetime settlement with any Bank or Financial Institution.


Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are attached as ‘Annexure - 5'.

Pursuant to the provisions of Section 136(1) of the Act and as advised the statementcontaining particulars of employees as required under Section 197(12) of the Act read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 will be available for inspection at the RegisteredOfficeof the Company duringworking hours and Members interested in obtaining a copy of the same may write to theCompany Secretary and the same will be furnished on request. Hence the Annual Report isbeing sent to the Members excluding the aforesaid information.


The particulars prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are attached as ‘Annexure -6'.


The Company has in place a policy on prevention prohibition and redressal of sexualharassment of women at workplace in line with the requirements of the above Act. Under thesaid policy an Internal Complaints Committee (ICC) has been set up to redress complaintsreceived relating to sexual harassment. All employees (permanent contractual temporaryand trainees) are covered under this policy.

During the year under review no complaint was filedwith the Company.


The ongoing COVID-19 pandemic has adversely impacted the business operating environmentand has led to slowdown in the economic activity. Your Company is pro-actively taking allpossible steps to accelerate the recovery process and to get back to pre-Covid businesslevels as soon as possible. However there continues to be a sense of uncertaintyprevalent as of now but the Company is highly optimistic of robust performance in timesto come.


Your Directors wish to place on record their sincere appreciation to the Governmentauthorities Company's bankers customers vendors investors and all other stakeholdersfor their continued support during the year. Your Directors are also pleased to recordtheir appreciation for the dedicated services of employees at all levels of operations inthe Company.

Respectfully submitted on behalf of the Board



New Delhi

Dated: 25th June 2021