The Directors have pleasure in presenting their 101st Annual Report of Greaves Cotton Limited ('the Company') on the business and operations and the Audited Financial Statements for the Financial Year ended 31st March 2020.
|Year Ended 31st March 2020||Year Ended 31st March 2019||Year Ended 31st March 2020||Year Ended 31st March 2019|
|Profit Before Tax and|
|(Loss) / Gain on|
|Profit Before Tax||168.99||239.92||196.67||246.33|
|Less: Provision for Tax||41.72||77.29||49.16||77.03|
|Profit for the year||127.27||162.63||147.51||169.30|
|Income for the year||128.47||164.02||148.95||170.68|
|Dividend paid and Tax|
|Balance of the Profit|
REVIEW OF OPERATIONS
The Company registered total revenue of Rs. 1840.95 crore during the year under review as against Rs. 2029.45 crore in the previous financial year.
The profit after tax was Rs. 147.51 crore for the year under review as against Rs. 169.30 crore in the previous financial year.
The profit after tax for the year under review includes an exceptional gain of Rs. 4.71 crore as against exceptional loss of Rs. 17.87 crore in the previous financial year.
The profit before tax and exceptional items as a percentage of total revenue for the year under review was at 10.43% as against 13.02% in the previous financial year.
During the year under review the Company has not revised its financial statement or the Report in respect of any of the three preceding financial years either voluntarily or pursuant to the order of a judicial authority.
The Company's performance and outlook of each business has been discussed in detail in the 'Management Discussion and Analysis' which forms a part of this Annual Report.
state of affairs
The Company is one of the most diversified engineering companies in India with core competencies in diesel/petrol engines farm equipment and generator sets. The Company has sustained its leadership through 5 manufacturing units which produce world class products backed by comprehensive spares and service through its 3500+ service outlets across India.
Authorised Share Capital
During the year under review Authorised Share Capital of the Company was reclassified from Rs. 750000000 (Rupees Seventy - Five Crores) divided in to 2500000 (Twenty-Five Lakhs) Redeemable Preference Shares of Rs. 100 each (Rupees One Hundred only) and 250000000 (Twenty-Five Crores) Equity Shares of Rs. 2 each (Rupees Two only) to Rs. 750000000 (Rupees Seventy-Five Crores) divided into 375000000 (Thirty-Seven Crores Fifty Lakhs) Equity Shares of Rs. 2 each (Rupees Two only).
Issued subscribed and paid-up share capital
During the year under review the Company on 15th November 2019 extinguished / physically destroyed its 13000000 fully paid- up equity shares of Rs. 2 each consequent to the Buy-back offer of the Company.
Consequently the issued subscribed and paid-up share capital of the Company as on 31st March 2020 was Rs. 462413590/- (Rupees Forty Six Crores Twenty Four Lakhs Thirteen Thousand Five Hundred and Ninety) divided into 231206795 (Twenty Three Crores Twelve Lakhs Six Thousand Seven Hundred and Ninety Five) equity shares of face value of Rs. 2 each.
TRANSFER TO RESERVES
During the year under review the Company has transferred Rs. 2.6 Crores in Capital Redemption Reserve upon buyback of shares in accordance with Section 69 of the Companies Act 2013 ('Act').
The Directors do not recommend any dividend for the Financial Year ended on 31st March 2020.
DIVIDEND DISTRIBUTION POLICY
Securities and Exchange Board of India (SEBI) by its notification dated 8th July 2016 has amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) introducing new Regulation 43A mandating the top 500 listed entities based on market capitalization calculated as on 31st March of every financial year to formulate a Dividend Distribution Policy and disclose the same in their Annual Reports and on their websites.
Accordingly the Board of the Company has adopted a Dividend Distribution Policy which is attached as Annexure 1. The Policy is also available on the website of the Company under the Investors section at http://www.greavescotton.com/php/media/brochure files/dividend distribution policy.pdf.
During the year under review the Company has neither accepted nor renewed any deposits from public falling under the ambit of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014.
REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
During the year under review the Company acquired the remaining entire stake of Ampere Vehicles Private Limited (Ampere) and thus Ampere became the wholly owned subsidiary of the Company effective from 5th December 2019.
The details of the performance of the subsidiary companies are as follows:
Greaves Leasing Finance Limited (GLFL)
GLFL a wholly owned subsidiary of the Company is a non-banking finance company. It reported a total revenue of Rs. 0.49 crore and loss of Rs. 0.32 crore during the year under review.
Dee Greaves Limited (DGL)
DGL a wholly owned subsidiary of GLFL did not undertake any business during the year under review. It reported a total revenue of Rs. 0.01 crore and loss of Rs. 0.0026 crore during the year under review.
Ampere Vehicles Private Limited (Ampere)
Ampere a wholly owned subsidiary of the Company has reported a total revenue of Rs. 90.07 crore and loss of Rs. 21.33 crore during the year under review.
A statement containing salient features of the Financial Statements in Form AOC-1 as required under Section 129 (3) of the Act forms a part of this Annual Report. The audited Financial Statements of all the subsidiaries shall be kept open for inspection at the Registered Office of the Company on every working day of the Company between 10 a.m. to 12 noon up to the date of the ensuing Annual General Meeting ('AGM').
Further pursuant to the provisions of Section 136 of the Act the financial statements of the Company consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Company at http://www.greavescotton.com/ investors.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company for FY 201920 are prepared in compliance with the applicable provisions of the Act including Indian Accounting Standards specified under Section 133 of the Act. The audited Consolidated Financial Statements together with the Auditors' Report thereon forms part of the Annual Report. The same is with unmodified opinion (unqualified).
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 read with Schedule V of the Listing Regulations the Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report.
CORPORATE GOVERNANCE REPORT
A Company follows the principles of Corporate Governance in letter and spirit. Requirements relating to Board of Directors its Committees related party transactions disclosures etc. as prescribed under Schedule V of the Listing Regulations have been duly complied with. The quarterly Corporate Governance Report confirming that the Company has complied with statutory provisions has been filed with the Stock Exchanges where the shares of the Company are listed and also placed before the Board of Directors. A detailed report on Corporate Governance for the financial year ended 31st March 2020 alongwith the Statutory Auditor's certificate on compliance with the provisions of Corporate Governance under Listing Regulations is forming part of this Annual Report.
BUSINESS RESPONSIBIUTY REPORT
A separate section on Business Responsibility Report as required pursuant to Regulation 34(2)(f) of Listing Regulations forms part of this Annual Report.
compliance with THE CODE OF CONDUCT
A declaration signed by the Managing Director & CEO affirming compliance with the Company's Code of Conduct by the Directors and Senior Management for the Financial Year 2019-20 as required under Schedule V of the Listing Regulations forms a part of this Annual Report.
ENVIRONMENT HEALTH AND SAFETY
The Company's manufacturing units are governed by Environment Health and Safety Policy and are certified as per ISO 14001 and ISO 45001 assessment standards. The Company has various safety guidelines in place which help identify unsafe actions or conditions in the Company premises. These guidelines form the corner stone on which the Company can operate smoothly devoid of any mishap or accidents at the work place.
The Company has taken various steps to promote environment health and safety measures across the Company which inter alia includes:
1. Systems implementation to ensure zero compromise on safety through 'Work permit system' and ownership of adherence to the safety norms.
2. Regular safety drives coupled with effective trainings are conducted to help spread awareness among employees on how to maintain a safe work environment.
3. The Company places equal emphasis on safety processes behavioural safety and strives to create safety positive culture towards achieving the ultimate goal of zero accidents.
4. Increased focus on training & awareness safety observations and various audits like Internal Audit SMAT audit theme based safety inspection safety patrolling fire equipment audit & emergency equipment audit.
5. Identification of safety hazards near misses and accident- prone areas through safety management audit.
6. Employees are also required to take a safety oath and are encouraged to actively participate in various competitions like poster slogan poem essay competition during the national safety week celebration.
7. Annual health check-up of all the employees conducted to take care of their wellbeing.
8. Various health programs like blood donation camps neuropathy eye check-up tetanus toxoid vaccination camp and sessions on stress management brain stroke etc.
9. World environment day and earth day are observed on annual basis.
10. Environmental measures like planting saplings is conducted across all the facilities.
Exercising higher standards of excellence in Safety and Health Practice in Factory
It is an honour to be awarded for the measures we take at our plant in terms of Safety Health & Welfare initiatives. We are delighted about our Aurangabad Plant winning the First Prize at the Industrial Safety & Health Awards 2019 by the Government of Maharashtra.
Fit for purpose capability is pivotal to an organisation's growth and success. At Greaves Cotton we continued our focus on attracting retaining and developing the right talent to meet current and future business needs of the Company. The Company seeks to create an environment of fairness transparency and mutual respect wherein the aspirations of employees and goals of the enterprise are aligned to achieve mutual benefit on a continuous long-term basis.
The Company launched a structured Campus Recruitment Programme to bring in 37 Graduate Engineer Trainees and Management Trainees in line with our endeavour to attract and grow diverse young talent from reputed Engineering Colleges and Business Schools. We strengthened our efforts behind DEEP (Development Education Empowerment Progress) a Community Partnership intervention to empower socio-economically underprivileged youth for independent livelihood by engaging them to acquire and apply fit for purpose vocational skills thereby improving their employability for a better future. Our efforts in this area saw the Company receiving the prestigious Asian CSR Award.
In FY 2019-20 the Company hired 68 DEEP Trainees under this programme and currently has 199 DEEP Trainees enrolled for the same.
In FY 2019-20 the relations of the Company with all its employees and trade unions remained harmonious. The payroll count of Company's permanent employees was 1521 on 31st March 2020.
Disclosures pertaining to the Sexual Harassment of Women at the Workplace (Prevention Prohibition and Redressal) Act 2013
Pursuant to the requirements under the Prevention of Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 the Company has enacted a Policy on Prevention Prohibition and Redressal of Sexual Harassment at Work Place and constituted Internal Complaints Committee. There were no cases filed during the year under review.
GREAVES CoTToN - EMPLoYEES SToCK oPTIoN PLAN 2019
In order to ring fence and incentivize key talent for driving long term objectives of the Company and ensuring that employee payoffs match the long gestation period of certain key initiatives whilst simultaneously fostering ownership behaviour and collaboration amongst employees the Members of the Company through postal ballot dated 1st November 2019 have approved the Greaves Cotton - Employees Stock Option Plan 2019 (the Scheme) for grant of 2000000 (Twenty lakhs) Employee Stock Options ('the Options') to the eligible employees of the Company and its subsidiary/ies.
The Scheme has been formulated in accordance with the provisions of the Act as amended and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014.
The Greaves Cotton - Employees Stock Option Plan 2019 is being administered and monitored by the Nomination and Remuneration Committee ('NRC') of the Company in accordance with the SEBI Guidelines.
Appropriate disclosures prescribed under the said Regulations with regard to the Scheme are available on the website of the Company at www.greavescotton.com.
Appointment of Executive Director
The Board of Directors of the Company on 5th November 2019 basis recommendation of the NRC appointed Mr. Mohanan Manikram as an Additional Director on the Board of the Company to hold office effective from 5th November 2019 upto the date of ensuing AGM.
In the said meeting the Board basis recommendation of the NRC appointed Mr. Mohanan Manikram as Executive Director with effect from 5th November 2019 for the period of three (3) years or his employment with the Company whichever is earlier. Further the NRC and Board of Directors of the Company have recommended the appointment of Mr. Mohanan Manikram as Executive Director of the Company to the Members at the ensuing AGM.
Re-appointment of Managing Director
During the year under review basis on recommendation of NRC and Board of Directors the members of the Company has approved reappointment of Mr. Nagesh Basavanhalli as Managing Director & CEO of the Company for a period of five (5) years effective from 27th September 2019 up to 26th September 2024 by way of postal ballot.
Appointment and re-appointment of Independent Directors
During the year under review the members of the Company in their 100th AGM has appointed Mr. Vikram Tandon as an Independent Directors of the Company to hold the office for a second term for a period of five (5) years with effect from 18th November 2018. In the same meeting the members has also appointed Mr. Arvind Kumar Singhal as an Independent Director of the Company to hold the office for a second term for a period of five (5) years with effect from 1st April 2019.
The tenure of appointment of Ms. Sree Patel as an Independent Woman Director has expired on 13th February 2020. Pursuant to the provisions of Section 149 and 152 of the Act the recommendation of the NRC and the report of performance evaluation the Board recommends re-appointment of Ms. Sree Patel as an Independent Woman Director for a second term of five (5) years with effect from 14th February 2020.
The tenure of appointment of Mr. Vinay Sanghi as an Independent Director will conclude on 3rd August 2020. Pursuant to the provisions of Section 149 and 152 of the Act and the report of performance evaluation the Board recommends re-appointment of Mr. Vinay Sanghi as an Independent Director for a second term of two (2) years with effect from 4th August 2020.
After the end of Financial Year 2019-20 the Board of Directors of the Company through circular resolution approved on 30th May 2020 has appointed Mr. Subbu Venkata Rama Behara as an Additional Director of the Company with effective from 28th May 2020 to hold office upto the date of ensuing AGM.
Further through circular resolution approved on 30th May 2020 the Board recommended the appointment of Mr. Subbu Venkata Rama Behara as an Independent Director of the Company for a period of five (5) years with effect from 28th May 2020 to the members of the Company.
Re-appointment of Director liable to retire by rotation
Mr. Karan Thapar retires by rotation at the ensuing AGM and being eligible offers himself for re-appointment.
Profiles of Directors to be appointed/re-appointed at the ensuing AGM as required by Regulation 36 (3) of the Listing Regulations and Secretarial Standard - 2 on General Meetings are given in the notice of the ensuing AGM.
The above appointments and re-appointments form a part of the notice of the ensuing AGM and the resolutions are recommended for members' approval.
Cessation of Directors
During the year under review Mr. Vijay Rai and Mr. Navneet Singh ceased to be Directors of the Company with effect from 8th August 2019 on expiry of their respective terms.
Mr. Vikram Tandon Independent Director resigned from the Board of the Company with effect from 27th April 2020 due to his other work constraints. He has confirmed that there were no other material reasons for his resignation other than the one stated above.
The Board places on record their appreciation of the valuable contribution made by Mr. Vijay Rai Mr. Navneet Singh and Mr. Vikram Tandon during their tenure as Directors of the Company.
KEY MANAGERIAL PERSoNNEL
Ms. Neetu Kashiramka has ceased to be Chief Financial Officer of the Company with effect from 6th April 2020. Further Mr. Amit Mittal has been appointed as Chief Financial Officer of the Company with effect from 27th April 2020.
As on the date of this report the Company had the following Key Managerial Personnel (KMP) as per section 2(51) of the Act:
|Sr. No.||Name of the KMP||Designation|
|1||Mr. Nagesh Basavanhalli||Managing Director & CEO|
|2||Mr. Amit Mittal||Chief Financial Officer|
|3||Mr. Atindra Basu||Head - Legal Internal Audit &|
STATEMENT ON DECLARATION GIVEN BY THE INDEPENDENT DIRECTORS
The Company's Independent Directors have submitted requisite declarations confirming that they continue to meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct.
The Ministry of Corporate Affairs (MCA) vide Notification Number G.S.R. 804(E) dated 22nd October 2019 and effective from 1st December 2019 has introduced the provision relating to inclusion of names of Independent Directors in the Data Bank maintained by Indian Institute of Corporate Affairs (IICA). All Independent Directors of the Company are registered with IICA.
In the opinion of the Board the Independent Directors hold highest standard of integrity and possess the requisite qualifications experience expertise and proficiency.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Act the Directors state that to the best of their knowledge and belief and according to the information and explanations obtained by them:
1. In the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanation relating to material departures;
2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2020 and of the profit of the Company for that period;
3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. The Directors had prepared the annual accounts on a going concern basis;
5. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
The Company has constituted a NRC and formulated the criteria for determining the qualifications positive attributes and independence of a Director (the Criteria). The said Committee has recommended to the Board a policy relating to the remuneration for Directors Key Managerial Personnel and other employees as required under Section 178 (3) of the Act. The Remuneration Policy is given in Annexure 2 to this Directors' Report. The criteria include inter alia a person to be appointed on the Board of the Company should possess in addition to the fundamental attributes of character and integrity appropriate qualifications skills experience and knowledge in one or more fields of engineering banking management finance marketing and legal a proven track record etc. The criteria for making payments to Non-Executive Directors is disclosed in the Corporate Governance Report which forms a part of this Annual Report.
During the year under review the Managing Director and Wholetime Director of the Company confirms that they did not receive any remuneration or commission from any subsidiary of the Company as required under Section 197 (14) of the Act.
RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THE EMPLOYEES
The information as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is given as Annexure 3 to this Directors Report. In terms of Section 136 (1) read with relevant proviso to Rule 5 of the Act the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto.
The said information shall be kept open for inspection at the Registered Office of the Company on every working day of the Company between 10 a.m. to 12 noon up to the date of the ensuing AGM. If any Member is interested in obtaining a copy thereof such Member may write an e-mail to email@example.com.
FAMILIARISATION PROGRAMME FOR DIRECTORS
The Company follows a structured orientation programme including presentations by key personnel information about the various codes policies etc. to familiarize the Directors with the Company's operations. In addition Plant visits are organised to familiarise the Directors with the Company's products production process etc. Presentations made at the Board / Committee Meetings inter alia
cover the business strategies human resource matters budgets initiatives risks operations of subsidiaries etc. where the Directors get an opportunity to interact with the Senior Management.
The Directors' Familiarisation Programme is displayed on the Company's website http://www.greavescotton.com/php/media/ brochure files/Familiarisation%20Programmes%20for%20 Directors%202019-20.pdf.
EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board has established a comprehensive and participative annual process to evaluate its own performance its Committees and the individual Directors. The performance evaluation matrix defining the criteria of evaluation was prepared by NRC. The criteria for performance evaluation includes inter alia relevant experience and skills ability and willingness to speak up ability to carry others ability to disagree stand his / her ground integrity focus on shareholder value creation and high governance standards. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated).
During the FY 2019-20 the Independent Directors met once without the presence of the management and Non-Executive Directors. The Independent Directors inter alia discussed matters arising out of Board and Board Committee agendas company performance and other board-related matters and to review the performance of Independent Directors the Chairman and the Board as a whole and assess the effectiveness and promptness of the information flow inter se the Board and the management. The Chairman of the meeting briefed the Board on the proceedings of the Meeting.
LOANS GUARANTEES AND INVESTMENTS
Particulars of loans guarantees and investments as on the 31st March 2020 are given in the Notes to the Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
During the year under review the Company did not enter into any Material transaction (as defined in the Company's Policy on Related Party Transactions) with related parties. All Related Party Transactions are placed before the Audit Committee for review. Prior omnibus approval is obtained for Related Party Transactions on a yearly basis for transactions which are repetitive in nature. All other transactions of the Company with related parties were in the ordinary course of business and at an arm's length. Details of transactions with related parties are disclosed in the Notes to the Standalone Financial Statements forming a part of this Annual Report.
The Form AOC - 2 as required under Section 134 (3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 is given in Annexure 4 to this Directors' Report.
The policy on dealing with related party transactions is available on the Company's website at http://www.greavescotton.com/ php/media/brochure files/Related%20Partv%20Transaction%20 Policy.pdf.
number OF meetings OF THE BOARD
The details of the number of Meetings of the Board and other Committees are given in the Corporate Governance Report which forms a part of this Annual Report.
The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.
extract of annual return
As required under Section 134 (3) (a) read with section 92(3) of the Act an extract of Annual Return in the prescribed Form MGT-9 is placed on Company's website www.greavescotton.com and is given in Annexure 5 to this Directors' Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars of conservation of energy technology absorption foreign exchange earnings and outgo as prescribed in Rule 8 (3) of the Companies (Accounts) Rules 2014 are given in Annexure 6 to this Directors' Report.
RISK MANAGEMENT POLICY
The Company has a Risk Management Committee of Directors to oversee the risk management efforts. The Company has put in place a robust Enterprise Risk Management (ERM) Policy which covers strategic risks operational risks regulatory risks and catastrophic risks and provides a clear identification of Risks That Matter (RTM). These RTMs are periodically monitored by the Management and the Risk Management Committee. Implementation of this ERM Policy effectively supports the Board and the Management in ensuring that risks if any which may significantly impact the Company are adequately highlighted and mitigation actions are implemented in a time-bound manner to reduce the risk impact. There are no risks which in the opinion of the Board threaten the existence of the Company. However the risks that may pose a concern are set out in the Management Discussion and Analysis Report which forms a part of this Annual Report.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to the provisions of Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules 2014 the Company has adopted a Corporate Social Responsibility (CSR) Policy as recommended by the CSR Committee covering the objectives initiatives outlay implementation monitoring etc. The CSR Policy is displayed on the Company's website http://www.greavescotton. com/php/media/brochure files/CSR-Policv05-06-2020.pdf.
A report on the CSR activities in the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules 2014 duly signed by the Managing Director & CEO and the Chairperson of the CSR Committee is given in Annexure 7 to this Directors' Report.
The Company is working for the betterment of society and environment. Under CSR projects are selected in such a way that it directly makes a positive impact. Our projects are socially responsible diverse and focusing on inclusion of all our stakeholders. India is a land of almost 33.4 % young population of the world. Under DEEP - A skill training Programme of Greaves where we are focusing on making the youth of India (coming from under privileged families) to turn into pioneers of technical knowledge in manufacturing.
Prime Meet- a reskilling and training workshop for mechanics in which Greaves conducts one-day workshops in different parts of the country under the supervision of industry experts.
According to UNICEF 1 out of 5 children in school-going age are out of school because they can't afford education.Under Greaves Scholarship Programme (GSP) we support students who belongs to the families of auto rickshaw/ e-rickshaw drivers/farmers who needs financial assistance to complete their education.
Humans have always taken from the mother earth as of today's scenario it is the time when we start living sustainably for our future generations and for this planet. Supporting Cauvery Calling project is one such approach in the same direction taken up by the Company.
In these uncertain times we have been carefully choosing projects which enable us to become Socially Responsible.
Amid the Crisis of COVID-19 we are supporting people who are fighting on the front with the pandemic. 6400 masks were distributed as token of gratitude to the Karnataka Police. 4100 masks were distributed to the families affected in the region of Coimbatore Ranipet & Aurangabad.
Dry ration and hygienic kits were distributed in the worst affected areas of Delhi-NCR and Mumbai to the daily wage workers who are unable to earn due to lockdown.
Greaves proceeded to create a direct and maximum impact on stakeholders and help the society in 360 angle approach.
The Company has established a vigil mechanism through a Whistle Blower Policy where under the Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle-blowing mechanism not
only helps the Company in detection of fraud but is also used as a corporate governance tool leading to prevention and deterrence of misconduct. It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairperson of the Audit Committee where necessary. The Company ensures that genuine Whistle Blowers are accorded complete protection from any kind of unfair treatment or victimisation. The Whistle Blower Policy is available on the website of the Company at http:// www.greavescotton.com/php/media/brochure files/Whistle%20 Blower%20Policy.pdf.
INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
To safeguard its assets and ensure efficient productivity at all levels the Company has robust internal control systems in place commensurate with the size and industry in which it operates. The internal control systems and benchmarks conform to the globally accepted framework as issued by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) Internal Control - Integrated Framework (2013). The Company ensures that the systems are periodically upgraded to keep pace with changing norms and ensures their effectiveness.
The internal controls are designed to ensure that the following conditions are met with:
Operations are effective and performed efficiently
Assets are adequately safeguarded
Frauds and errors are prevented and detected in time
Accounting records are accurate and complete across all businesses
Financial information is prepared on time and are reliable
In addition standardised operating procedures policies and guidelines regular monitoring procedures and self-assessment exercises are also followed. All employees are required to adhere to the Code of Conduct in their regular work.
Employees are benefited by a well-defined whistle blower policy that ensures and encourages reporting of any misconduct unethical behaviour or any behaviour with possibility of conflict of interest. Highest standards of integrity and transparency are adhered to and further encouraged by a self-monitoring mechanism.
During the fiscal year key controls were adequately tested and appropriate measures were initiated where deviation from normal was identified. The Internal Auditors and Corporate Assurance Department monitors and controls the effectiveness of the internal control systems. The implementation of the corrective actions and improvements in business processes are regularly followed up by the Corporate Assurance Dept. It is also committed in ensuring that the operations are carried out within the purview of applicable laws and statutory requirements.
M/s. Deloitte Haskins & Sells LLP Chartered Accountants were appointed as the Statutory Auditors of the Company at the 96th AGM held on 6th August 2015 to hold office from the conclusion of the 96th AGM till the conclusion of the 101st AGM of the Company.
Accordingly pursuant to the recommendation of the Audit Committee the Board of Directors of the Company at its meeting held on 5th June 2020 recommended the re-appointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FRN.: 117366W / W-100018) as Statutory Auditor of the Company for a period of five (5) consecutive years i.e. from the conclusion of 101st AGM of the Company till the conclusion of the 106th AGM of the Company subject to the approval of shareholders of the Company at the ensuing AGM.
In this regard M/s. Deloitte Haskins & Sells LLP Chartered Accountants (FRN.: 117366W / W-100018) have submitted their written consent that they are eligible and qualified to be appointed as Statutory Auditors of the Company in terms of Section 139 of the Act and also satisfy the criteria provided in Section 141 of the Act.
STATUTORY AUDITORS' REPORTS
Reports issued by the Statutory Auditors on the Standalone and Consolidated Financial Statements for the financial year ended 31st March 2020 are with unmodified opinion (unqualified).
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
The Statutory Auditor of the Company has not reported any instances of fraud as specified under the second proviso to Section 143(12) of the Act.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFEcTING THE FINANcIAL pOSITION OF THE COMPANY
The Company has repositioned itself in the market with its new initiatives and businesses. The 160-year-old player known primarily for its diesel engines for three-wheelers has been successful in implementing a well-carved out strategy which has paved the way for not only transforming this traditional company into an agile and robust entity to face the rapidly-changing market place more effectively but also propel it into new growth trajectory with a diversified offering.
The Covid-19 crisis has caused a slowdown to the whole industry and we are not immune to it. The pandemic has directly affected both the demand and supply side which has created a severe impact for the overall economy. There is no denying that this situation will have a negative impact on liquidity and would likely to put downward pressure on the Indian automotive sector as a whole. Since the market will take its course of time to evolve from the setback we have re-evaluated and accelerated certain plans to bounce back.
Our business practices and strong enterprise risk management framework (ERM) has helped in dealing with such an unprecedented crisis. Our approach has been to respond and not react to critical situations. In these testing times focussing on business continuity plans adopting new ways of doing business and to the new normal have been our priority along with nurturing relationship with our stakeholders by supporting them. The challenges posed by COVID-19 led to closing our plant operations as per Government of India's directives and thus impacting production. We utilised this opportunity to prepare ourselves to respond to the post COVID-19 reality by focussing on readiness to jumpstart operations by implementing social distancing at factories with cautious optimism. Now the Company has partially resumed its manufacturing at its various facilites and is looking to step up the operations going forward as the restrictions ease. The Company has prepared a well-chalked out plan to deal with this crisis situation and is putting in place a comprehensive action plan across its various functions in order to face the challenges. The demand for entire auto industry is sluggish but with our strong presence in semi-urban and rural markets we expect demand to improve. We are also seeing pent up demand in other sectors like Gensets Engines and Farm equipment.
The Company has been able to buck the market slowdown through investments in new businesses and it has helped us in facing vagaries in market demand more effectively.
Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company engaged the services of M/s. Pradeep Purwar & Associates Company Secretary in Practice Thane to conduct the Secretarial Audit of the Company for the financial year ended 31st March 2020.
The Secretarial Audit Report (Form MR - 3) is attached as Annexure 8 to this Directors' Report. The said report is unqualified.
annual secretarial compliance report
The Company has undertaken an audit for the Financial year 201920 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by the Practising Company Secretary is available on the website of the Company at www.greavescotton.com.
MAINTENANCE OF COST RECORDS
Pursuant to the provisions of Section 148 (1) of the Act read with clause (ix) of Rule 8(5) of the Companies (Accounts) Rules 2014 adequate Cost accounts and records are made and maintained by the Company as specified by the Central Government.
Pursuant to the provisions of Section 148 (3) of the Act the Board has appointed M/s. Dhananjay V. Joshi & Associates Cost Accountants (Firm Registration Number: 000030) as the Cost Auditors of the Company to conduct an audit of the cost records maintained by the Company for the financial year ending 31st March 2021 at a remuneration as mentioned in the notice convening the AGM.
As required under the Act read with the Companies (Cost Records and Audit) Rules 2014 the remuneration payable to the Cost Auditors must be placed before the members at a general meeting for ratification. Hence a resolution for the same forms part of the notice of the ensuing AGM.
The Directors confirm that during the financial year under review-
there were no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its operations;
there was no issue of equity shares with differential rights as to dividend voting or otherwise; there was no issue of shares (including sweat equity shares) to the employees of the Company under any scheme and there are no shares held in trust for the benefit of the employees of the Company.
The Board wishes to place on record its appreciation for all the employees for their hard work solidarity cooperation and dedication during the year.
The Board sincerely conveys its appreciation to other stakeholders for their continued support.
|For and on behalf of the Board|
|5th June 2020||Chairman|