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United Spirits Ltd.

BSE: 532432 Sector: Consumer
NSE: MCDOWELL-N ISIN Code: INE854D01024
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OPEN 553.00
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VOLUME 388861
52-Week high 723.75
52-Week low 443.00
P/E 163.51
Mkt Cap.(Rs cr) 39,566
Buy Price 544.50
Buy Qty 243.00
Sell Price 546.00
Sell Qty 100.00
OPEN 553.00
CLOSE 550.75
VOLUME 388861
52-Week high 723.75
52-Week low 443.00
P/E 163.51
Mkt Cap.(Rs cr) 39,566
Buy Price 544.50
Buy Qty 243.00
Sell Price 546.00
Sell Qty 100.00

United Spirits Ltd. (MCDOWELL-N) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 21st Report of Directors of yourCompany and the audited financial statements for the year ended March 31 2020.

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
The working of your Company for the year under review resulted in
Revenue from operations 285892 285123 288237 288725
Profit / Loss from operations 13609 11626 13824 12256
Exceptional and other non-recurring 13 (267) 666 (26)
Less:
Depreciation 2275 1445 2853 2147
Taxation (including deferred tax) 4300 3328 5397 3281
Profit / (Loss) after tax 7047 6586 6206 6836
Profit B/F from previous year (28396) (34624) (32159) (38802)
Impact of Change in Revenue Recognition policy on adoption of IND AS 115 - (368) - (368)
Reinstated Profit B/F from previous year (28396) (34992) (32159) (39170)
Minority Interest appropriation - - 383 166
Foreign Currency Translation Reserve Considered separately - - (49) (20)
Total Comprehensive Income (274) 10 (220) 28
Transfer between reserves - - - -
Profit / (Loss) available for appropriation (21623) (28396) (25840) (32159)
Your Directors have made the following appropriations:
General Reserve NIL NIL NIL NIL
Dividend paid in respect to previous years NIL NIL NIL NIL
Proposed dividend NIL NIL NIL NIL
Balance carried to the Balance Sheet (21623) (28396) (25840) (32159)
EPS-Basic & Diluted (Rupees) 9.70 9.06 9.29 9.87
Balance carried to the Balance Sheet (28396) (34624) (32159) (38802)
EPS-Basic & Diluted (Rupees) 9.06 38.65 9.87 44.68

As can be seen from the above table the revenue from operations increased by 0.27%during the year on standalone basis and decreased by 0.17% on consolidated basis. Profitafter tax has increased during the year by 7% on standalone basis and decreased by 9.22%on consolidated basis. The challenges which the company faced during the year and theenvironment in which the company operates have been detailed in Management Discussion andAnalysis Report which is forming part of this Report.

1. Performance of the company

During the year under review your Company's sales volume was about 79.7 million casesresulted in a volume decline of 2.3% compared to prior period. After adjusting for thefranchise model changes in Popular segment underlying volume declined 2.1% compared toprior period. Net sales/income from operations of your Company grew 1.2% in the financialyear ended March 31 2020 and stood at INR 90909 million net of duties and taxes(previous year INR 89806 million). Adjusted for the franchise model changes and one-offsale of bulk Scotch net sales/income from operations declined 1.5% for the year. Salesvolume of the Company's brands in the 'Prestige and Above' segment declined 1.5% in thefinancial year ended March 31 2020 and stood at 40.9 million cases (previous year 41.6million cases). Net sales of the 'Prestige and Above' segment grew 0.4% and stood at INR59311 million net of duties and taxes (previous year INR 59095 million). The 'Prestigeand Above' segment represented 65.2% of total net sales and 51.3% of total sale volumeduring the year.

2. Subsidiary companies

In accordance with Section 129(3) of the Companies Act 2013 ('Companies Act') astatement containing salient features of the financial statements of the subsidiarycompanies in Form AOC-1 is provided as Annexure - 1 to this report.

3. Board's responses to observations qualifications and adverse remarks in auditor'sreport

The Statutory Auditors have given unqualified opinion on the financial statements forthe year ended March 31 2020 and hence this is not applicable.

The Secretarial Auditor has given an unqualified opinion in the Secretarial AuditReport for the year ended March 312020 and Secretarial Audit Report is annexed as Annexure- 3.

4. Material changes and commitments/events subsequent to the date of the financialstatements

Certain events arising out of COVID 19 Virus Pandemic having impact on businessesworldwide have been covered in detail in the Management Discussion and Analysis Reportforming part of this report. Company's manufacturing units were shut down during March2020 and April 2020 owing to nationwide lockdown imposed by Government of India andoperations have since resumed in a phased manner.

5. Change in nature of business if any

The details of change in nature of business are provided under Management Discussionand Analysis Report and the Report on Risk Management forming part of this Annual Report.

6. Dividend

In view of the accumulated losses of the preceding years your directors could notrecommend any dividend. No amount is proposed to be carried to reserves.

7. Capital

The total authorized share capital of your Company remains unchanged at 2740000000equity shares of Rs2/- each and preference shares of 171200000 Preference Shares ofRs10/- each.

8. Details of subsidiary companies joint ventures and associate companies and theirfinancial position

Your Company currently has 17 subsidiary companies and one Associate Company. On June25 2018 the Company subscribed to 4567568 equity shares of Hip Bar Private Limited("Hip Bar") constituting 26% of the paid-up equity share capital of Hip Bar. InApril 2020 compulsory convertible preference shares (CCPS) were issued by Hip Bar to HipBar's promoter Group for ' 3 Crores. While the exact conversion ratio of these CCPS wouldbe fixed at a later date the dilution of Company's equity in Hip Bar consequent to theaforesaid CCPS issuance is expected to be in the range of 2.4% to 3.4%. Accordingly therevised shareholding of the Company (on a fully diluted basis) is expected to be between22.6% and 23.6%. The information required under the first proviso to section 129(3) of theCompanies Act 2013 is given in form AOC- 1 in Annexure - 1. The Company's policy fordetermining material subsidiaries is available at Company's website www.diageoindia.com.

Performance of Associates Subsidiaries and Joint Ventures and their contribution tooverall performance of the Company is covered as part of the consolidated financialstatements and in form AOC-1 in Annexure - 1 annexed and forming part of thisAnnual Report.

In accordance with the third proviso to Section 136(1) of the Companies Act 2013 theannual report and financial statements of each of the subsidiary companies have also beenplaced on the website of the Company www.diageoindia.com

9. Prospects/outlook

The details about prospects/outlook of your Company are provided under the ManagementDiscussion and Analysis Report forming part of this Annual Report.

10. Depository system

The trading in the equity shares of your Company is under compulsory dematerialisationmode. As on March 31 2020 equity shares representing 99.30% of the equity share capital

are in dematerialised form. As the depository system offers numerous advantagesmembers are requested to take advantage of the same and avail the facility ofdematerialisation of the Company's shares. Moreover transfer of shares of the company byphysical means has been barred from April 01 2019 pursuant to SEBI's Notification dated 3rdDecember 2018.

11. Board meetings board of directors key

managerial personnel & committees of directors.

Details on appointments changes in designation resignation of Directors keymanagerial personnel and Committees of Directors as well as on Board and Committeemeetings of your Company and the matters required to be specified pursuant to Sections134 177 and 178 of the Companies Act 2013 and the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (SEBI (LODR) Regulations) are provided in theCorporate Governance Report that is annexed to and forming part of this Annual Report.

A. Re-appointment of Directors

As per the provisions of the Companies Act 2013 Mr Randall Ingber retires by rotationat the ensuing Annual General Meeting (AGM) and being eligible offered himself forre-appointment.

Members may please note that Mr Randall Ingber who is a nominee of Relay B V wasappointed as a Director at the 18th Annual General Meeting (AGM) held on August 30 2017.Mr. Randall Ingber is not debarred from holding the directorship under any statutoryregulations.

A brief profile of Mr Randall Ingber is provided as an Annexure to the Notice convening21st AGM.

During the financial year 2019-20 Mr. Mahendra Kumar Sharma Mr. D Sivanandhan Mr.Rajeev Gupta and Dr (Mrs) Indu Shahani were re-appointed for a further period of fiveyears and in the opinion of the Board the said directors possess integrity expertise andexperience to effectively discharge their duties as directors of the Company.

Mr Anand Kripalu was reappointed at the Annual General Meeting of the Company held onAugust 21 2019 for the period upto August 13 2022 in continuation of his earlierappointment. Members may note that as approved by the Board of Directors at its meetingheld on May 29 2019 while re-appointing Mr. Anand Kripalu as Managing Director and ChiefExecutive Officer Mr. Anand Kripalu is not liable to retire by rotation.

B. Retirement and appointment of company secretary

The Board of Directors at its meeting held on 27th January 2020 appointed Mr. MitalSanghvi as Company

Secretary and Key Managerial Personnel of the Company with effect from 1st June 2020.Board also took on record the retirement of Mr. V. Ramachandran as Company Secretaryeffective end of day 31st May 2020 consequent to his retirement. The Board of Directorsplaced on record its appreciation of the services rendered by Mr. V. Ramachandran duringhis tenure as Company Secretary and welcomed Mr. Mital Sanghvi.

C. independent directors

Your Company did not appoint any new Independent Director or Nominee Director in thefinancial year 2019-20. Criteria for selection/appointment or reappointment of IndependentDirectors include skills expertise of the Director qualifications experience and domainknowledge. The required skills of Independent Directors are leadership managerialexperience diversity risk management and corporate governance. All our IndependentDirectors viz. Mr. Mahendra Kumar Sharma Mr. V.K. Viswanathan Mr. D Sivanandhan Mr.Rajeev Gupta and Dr (Mrs) Indu Shahani possess the aforesaid skills.

Executive director

Your company did not appoint any new Executive Director for the year 2019-20.

D. independent directors

Independent Directors have given a declaration pursuant to sub-section (6) of section149 of the Companies Act 2013. In the opinion of the Board Independent Directors fulfillthe conditions specified in Securities and Exchange and Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR) Regulations) andare independent of the management.

E. Number of meetings of the board

The details of the Board Meetings and other Committee Meetings held during thefinancial year 2019-20 are stated in the Corporate Governance Report which forms part ofthis Annual Report.

F. Board committees

The Company has the following committees of the Board :

• Audit and Risk Management Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship and General Committee

• Corporate Social Responsibility Committee.

The composition of each of the above Committees their respective roles andresponsibilities are provided in the Corporate Governance Report which forms part of thisAnnual Report.

G. Policies:

The Company has adopted all policies as required to be maintained by the Company underthe provisions of the Companies Act 2013 and SEBI (LODR) Regulations 2015 and the sameare uploaded on the website of the Company wherever required including under Section 178and the salient features of the same are detailed in Corporate Governance Report.

H. Recommendations of the audit and risk management committee and other committees

All the recommendations of the Audit and Risk Management Committee and of the otherCommittees from time to time were accepted by the Board.

i. Details of remuneration to directors

As required under section 197(12) of the Companies Act 2013 information relating toremuneration paid to Directors during the financial year 2019-20 is provided in theCorporate Governance Report and in form MGT 9 that is annexed to and forming part of thisAnnual Report as Annexure - 4.

As stated in the Corporate Governance Report sitting fees are paid to IndependentDirectors for attending Board/Committee meetings. They are also entitled to reimbursementof actual travel expenses boarding and lodging conveyance and incidental expensesincurred in attending such meetings in accordance with the travel policy for directors. Inaddition the Independent Directors are also eligible for commission every year as may berecommended by the Nomination and Remuneration Committee and approved by the Board withinthe overall limit of higher of '4 Crores or 1% of the net profits of the Companycalculated in accordance with section 198 of the Companies Act 2013 whichever is higheras approved by the shareholders at the AGM held on September 30 2014 and Postal BallotResolution effective January 18 2019. Criteria for payment of remuneration to IndependentDirectors are as given below:

1. Membership of Committees

2. Chairmanship of the Committees/Board

3. Benchmarking with other companies

The Board of Directors have approved for payment of commission of INR 20 million tofive independent directors after applying the criteria stated above for the financial year2019-20.

The criteria for payment of remuneration to executive

directors is determined by the Nomination and Remuneration Committee based on variouscriteria including performance criteria. Remuneration Policy is available on the websitewww.diageoindia.com.

J. Board evaluation criteria

Pursuant to the provisions of the Companies Act 2013 and regulation 17 of the SEBI(LODR) Regulations the Board has carried out an annual performance evaluation of its ownperformance the Directors individually as well as the Committees of the Board. Theevaluation process considered the effectiveness of the Board and the committees withspecial emphasis on the performance and functioning of the Board and the Committees. Theevaluation of the Directors was based on the time spent by each of the Board Memberstheir core competencies expertise and contribution to the effectiveness and functioningof the Board and its Committees which was carried out through a peer feedback mechanism.

The overall performance evaluation exercise was completed to the satisfaction of theBoard. The Board & the Nomination & Remuneration Committee noted the progress onthe observations from the previous year's evaluation. Current year's observations werealso noted and the same would be actioned upon appropriately.

K. Vigil Mechanism

The Company has a whistle-blower mechanism known as SpeakUp operated by a third-partyagency. Employees or representatives acting on behalf of the Company are encouraged toraise their compliance concerns through this mechanism apart from other internalreporting channels viz. Line Manager or HR Business Partner Legal Business Partner andBusiness Integrity member. The Company has a structured Breach Management Standard inplace which is in line with the Global standard for timely and conclusive resolution ofcompliance concerns raised through the whistle blower mechanism. The decision on sanctionson the reported breaches are determined and monitored by a Compliance Committee in orderto ensure that there is a collective and a fair decisionmaking process and consistentaction in resolving the breaches.

The quality of investigation reports and remedial actions are reviewed and monitored bythe Global Business Integrity team. Access to the Chairman of the Audit Committee isprovided as required under the Companies Act 2013 and the SEBI (LODR) Regulations.

L. Related party transactions

The Company's policy on dealing with related party transactions was adopted by theBoard on June 15 2015 and further amended from time to time. This policy is available onthe Company's website www.diageoindia. com.

The details of related party transactions required under section 134(3)(h) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are given inform AOC-2 and the same is enclosed as Annexure -2.

Except the transactions stated in Form AOC-2 annexed to this Report as Annexure-2 allrelated party transactions that were entered into during the financial year were at arm'slength basis and were in the ordinary course of business. There are no materialsignificant related party transactions entered into by the Company with promotersdirectors key managerial personnel or other designated persons which may have a conflictof interest with the Company atlarge.

M. Meeting amongst independent directors

The Independent Directors met amongst themselves without the presence of any otherpersons on May 29 2019 July 22 2019 and October 24 2019.

12. Auditors Financial audit

M/s. Price Waterhouse & Co. Chartered Accountants LLP (FRN 304026E / E-300009)Statutory Auditors of your Company were appointed as Auditors of your Company from theconclusion of the 17th AGM for a period of 5 years. Since the appointment is not subjectto ratification of the appointment by the members at every AGM no resolution is proposedat this AGM pursuant to the provisions of Companies (Amendment) Act 2017.

Secretarial audit

Pursuant to section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 a Secretarial Audit has been carriedout by Mr Sudhir V Hulyalkar Practicing Company Secretary (FCS: 6040 and CP No. 6137) andhis report is annexed as Annexure - 3.

In addition the company has also obtained Secretarial Compliance Report for the yearended March 31 2020 in terms of the SEBI Circular issued on February 08 2019 which isannexed as Annexure - 3A. The said report has been

submitted to the stock exchanges and is also available on the Company's website viz. www.diageoindia.com.

Cost audit

The Company is not covered by the requirement of maintenance of cost records asspecified under sub-section (1) of section 148 of the Companies Act 2013.

13. Listing of shares of the company

The equity shares of your Company continue to be listed with the BSE Limited (BSE) andNational Stock Exchange of India Limited (NSE). No Listing fees are due as on date.

14. Corporate governance

A Corporate Governance Report is annexed separately as part of this report. Boardconfirms compliance with Secretarial Standards.

15. Management discussion and analysis report

The Management Discussion and Analysis Report is annexed separately as part of thisreport.

16. Fixed deposits

As reported in the previous year's annual report your Company discontinued acceptingfixed deposits from the public and shareholders effective January 1 2014. In additionpursuant to section 74(1)(b) of the Companies Act 2013 the Board of Directors at theirmeeting held on August 1 2014 decided to repay all fixed deposits maturing on or afterMarch 31 2015 by March 31 2015 by paying additional interest of 1% per annum on thosefixed deposits before the maturity date pursuant to the contract entered into with theFixed Deposit holders. Fixed Deposits from the public and shareholders which remainedunclaimed and for which no discharge certificates were received from the depositors as onMarch 31 2020 stood at '4426000. This amount was transferred into a separatenon-interest bearing escrow account opened specifically for the purpose of re-paymentpursuant to the provisions of the Companies Act 2013 and the rules made thereunder. Outof this amount a sum of '1014017/- has since been paid as per instructions receivedafter the year end and balance unclaimed amount as of May 27 2020 is '3411983/-. Thebalance unclaimed fixed deposits continue to remain in the escrow account as on May 272020.

17. Extract of annual return

The extract of the Annual Return in Form MGT-9 is annexed as

Annexure - 4.

18. Transfer to investor Education and Protection Fund (iEPF)

The details of unclaimed/unpaid dividends and fixed deposits which have not beentransferred to the IEPF account as the period of seven years have not been completed isgiven below pursuant to the provisions of the Companies Act 2013 and the applicable rulesthere under.

Dividend:

Financial Year for which the dividend is declared No. of Members who have not claimed their dividend Unclaimed dividend as on March 31 2020 (Amount in iNR) Unclaimed dividend as % to total dividend Date of declaration Last date for claiming the dividend prior to its transfer to IEPF
2012-13 10836 2212092.50 0.61 24-Sep-2013 29-Oct-2020

The Company has not declared any dividend from financial year 2013-14 onwards owing toaccumulated losses. Hence there are no unclaimed/unpaid dividends from financial year2013-14 onwards.

No shares were transferred during the year ended March 31 2020 to Investor Educationand Protection Fund pursuant to Section 124(6) of the Companies Act 2013.

Fixed Deposits:

1. Accepted during the year NIL
2. Remained unpaid or unclaimed as atthe end of the year '4426000
3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved NIL
4. The Details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act 2013 Not Applicable

Necessary compliance under rule 3 of the Investor Education and Protection Fund(Uploading of information regarding unpaid and unclaimed amounts lying with companies)Rules 2012 has been ensured.

19. Human resources

Employee relations remained cordial at all the locations of the Company. Particulars ofemployees drawing an aggregate remuneration of '10200000/- or above per annum or'850000/- or above per month as well as additional information on employee remunerationas required under

the provisions of rule 5(1) 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as part of this report in Annexure- 5 hereto.

20. Employees stock option scheme

Your Company has not offered any stock options to its employees during the year 2019-20within the meaning of SEBI (Share Based Employee Benefit) Regulations 2014.

21. Particulars of loans guarantees and investments

Loans guarantees and investments covered under section 186 of the Companies Act 2013are detailed in Notes to the financial statements which are as follows:

Note 4 is relating to investments note 5 is relating to loans given as per thestandalone financial statements for the year ended March 31 2020 which includes thesedisclosures. The Company has not given any guarantee to any company as on March 31 2020.

22. Risk management

Details on Risk Management is annexed as Annexure - 6 hereto. The Company hasnot done any commodity hedging.

23. internal financial controls

During the year Controls Compliance & Ethics (CC&E) team have implemented adetailed plan under the direction of the Executive Committee of the Company to reinforcethe code of business conduct and to further embed compliance across the business. TheCC&E team also undertook comprehensive review of existing controls (SOX & non-SOXcontrols) & added additional attributes in the existing controls. The same has beenshared with the statutory auditors who have confirmed that they are aligned with the same.The controls with additional attributes have been tested both by Management tester(Deloitte) and by the Statutory auditors in March 2020 for its effectiveness. The Boardafter considering the materials placed before it reviewed the confirmation received fromexternal parties and reviewed the effectiveness of the policies and procedures adopted bythe Company for ensuring orderly and efficient conduct of its business includingadherence to Company's policy safeguarding its assets prevention and detection of fraudsand errors and completeness of accounting records and timely preparation of financialstatements The Board has satisfied itself that the Company has laid down internalfinancial controls which are commensurate with the size of the company and that suchinternal financial

controls are broadly adequate and are operating effectively. The certification by theauditors on internal financial control forms part of the audit report. A statement to thiseffect is also appearing in the Directors' Responsibility Statement.

24. Corporate social responsibility

Information on the composition of the Corporate Social Responsibility (CSR) Committeeis provided in the Corporate Governance Report that forms part of this Annual Report.Furthermore as required by Section 135 of the Companies Act 2013 and the rules madethereunder additional information on the policy and implementation of CSR activities byyour Company during the year are provided in Annexure - 7 to this report. BusinessResponsibility Report under Regulation 34(2) of the SEBI (LODR) Regulations has beenenclosed as Annexure - 9 and also uploaded on to the Company's website www.diageoindia.com.

25. Conservation of energy technology absorption foreign exchange earnings and outgo

The particulars prescribed under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 are set out in Annexure - 8 to thisreport.

26. Details of significant and material orders passed by the regulators or courtsimpacting the going concern status and company's operations in future pursuant to Rule8(5)(vii) of Companies (Accounts) Rules 2014

The Company has not received any significant or material order passed by regulators orcourts or tribunals impacting the Company's going concern status or the Company'soperations in future. The Management Discussion and Analysis Report read with the reporton Risk Management contains impact on the business due to regulatory changes and due torecent COVID-19 Pandemic. The details of notices received from regulatory authorities andrelated matters have been disclosed as part of note no. 45 to the audited standalonefinancial statements for the year ended March 31 2020 and as note no. 46 of theconsolidated financial statements for the year ended March 31 2020.

27. Disclosure as required under section 22 of Sexual Harassment of Women at Workplace(prevention prohibition and redressal) Act 2013

The Company has implemented the policy and framework in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)

Act 2013 (SHWWA). Moreover the Company's policy is all gender inclusive our processensures complete anonymity and confidentiality of information.

Various Internal Committees (IC) have been constituted for all locations to considerand resolve all complaints reported on sexual harassment at workplace. Investigation isconducted and decisions are made by the IC at the respective location and a senior womanemployee is the presiding officer over every case. While maintaining the highestgovernance norms the various Internal Committee (IC) has appointed internal members andan external member who has extensive experience in the field. The IC's meet on quarterlybasis to discuss the matters on policy awareness best practices judicial trends etc.

During the year one complaint with allegations of sexual harassme3nt was received bythe Company and it was investigated and resolved as per the provisions of the SHWWA. Tobuild awareness in this area the Company has been publishing newsletter emailersposters conducting Online training module and IBegin-induction face to face training fornew joining employees. Besides the face to face training programmes are conducted in theorganisation on a continuous basis for employees consultants contract employees andpermanent workers. The IC has also conducted informal sessions to check the pulse at thegrassroot levels.

28. Highlights of performance of subsidiaries associates and joint venture companiesof the company

The highlights of performance of subsidiaries associates and joint venture companiesof the Company and their contribution to the overall performance of the Company is coveredas part of the consolidated financial statement and form AOC-1 annexed as part of thisreport. Out of 17 subsidiary companies 15 subsidiary companies are non-operativecompanies.

The Board of Directors ("Board") of PDL and of the Company at their meetingsheld on December 2 2019 considered and approved a scheme of amalgamation and arrangement(the "Scheme") in relation to the proposed merger of PDL with the Company undersections 230 - 232 and other applicable provisions of the Companies Act 2013 and therules thereunder. The Scheme is subject to the receipt of requisite approvals from therelevant statutory authorities including Securities and Exchange Board of India NationalStock Exchange of India Limited BSE Limited the National Company Law Tribunal and therespective shareholders and creditors of PDL and of the Company

29. Directors' responsibility statement

Pursuant to Section 134 (5) of the Companies Act 2013 in

relation to financial statements (together with the notes to

such financial statements) for the year 2019-20 the Board of

Directors report that:

(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit/ loss of the Company for that period;

(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) the Directors have prepared the financial statements on a going concern basis;

(v) the Directors have laid down internal financial controls to be followed by theCompany commensurate with the

size and nature of its business and the complexity of its operations and that suchinternal financial controls are adequate and are operating effectively.

(vi) the Company has a system of securing reports of statutory compliances periodicallyfrom the units and has implemented an automated process having comprehensive systems toensure compliance with the provisions of all applicable laws which is adequate and isoperating effectively.

Your Directors place on record their sincere appreciation for the continued supportfrom the shareholders customers suppliers government banks and financial institutionsand other business associates.

A particular note of thanks to all employees of your Company without whosecontribution your Company could not have achieved the year's performance.

By Order of the Board

Anand Kripalu Mahendra Kumar Sharma
Managing Director & Chairman
Chief Executive Officer DIN:00327684
DIN:00118324
Place : Bengaluru
Date : May 27 2020

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