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United Spirits Ltd.

BSE: 532432 Sector: Consumer
NSE: MCDOWELL-N ISIN Code: INE854D01024
BSE 00:00 | 24 Feb 702.05 -21.15
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698.00

NSE 00:00 | 24 Feb 702.85 -20.30
(-2.81%)
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698.05

OPEN 723.00
PREVIOUS CLOSE 723.20
VOLUME 76294
52-Week high 742.95
52-Week low 511.30
P/E 62.68
Mkt Cap.(Rs cr) 51,014
Buy Price 702.05
Buy Qty 20.00
Sell Price 702.05
Sell Qty 4.00
OPEN 723.00
CLOSE 723.20
VOLUME 76294
52-Week high 742.95
52-Week low 511.30
P/E 62.68
Mkt Cap.(Rs cr) 51,014
Buy Price 702.05
Buy Qty 20.00
Sell Price 702.05
Sell Qty 4.00

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

Company director report

Dear Members

Your Directors are pleased to present the 20th Report of Directors of your Company andthe audited financial statements for the year ended March 31 2019.

INR in Million

Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
The working of your Company for the year under review resulted in Revenue from operations 285123 260691 288725 265559
Profit / Loss from operations 11626 9664 12256 11486
Exceptional and other non-recurring (267) 90 (26) 445
Less:
Depreciation 1445 1351 2147 1923
Taxation (including deferred tax) 3328 2786 3281 2599
Profit / (Loss) after tax 6586 5617 6836* 6519*
Profit B/F from previous year (34624) (40324) (38802) (45248)
Impact of Change in Revenue (368) - (368) -
Recognition policy on adoption of IND
AS 115
Reinstated Profit B/F from previous year (34992) (40324) (39170) (45248)
Minority Interest appropriation - - 166 (181)
Foreign Currency Translation Reserve - - (20) 71
Considered separately
Total Comprehensive Income 10 83 28 17
Transfer between reserves - - - -
Profit / (Loss) available for appropriation (28396) (34624) (32159) (38802)
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 (28396) (34624) (32159) (38802)
EPS–Basic & Diluted (Rupees) 9.06 7.73** 9.87 8.94**
Balance carried to the Balance sheet (34624) (40324) (38802) (45248)
EPS–Basic & Diluted (Rupees) 38.65 11.69 44.68 7.06

* Excluding minority interest.

** EPS has been revised considering the efiect of Share Split.

*- As can be seen from the above table the revenue from operations increased by 9.37%during the year on standalone basis and 8.72% on consolidated basis. Profit after tax hasalso improved during the year by 17.25% on standalone basis and 4.86% on consolidatedbasis. The challenges which the company faced during the year and the environment in whichthe company operates have been detailed in Management Discussion and Analysis Report whichis forming part of this Report.

1. Performance of the Company

During the year under review your Company has achieved a sales volume of about 81.6million cases and this resulted in a growth of 4.0% compared to prior period. Afteradjusting for the franchise model changes in Popular segment underlying volume grew 5.4%compared to prior period. Net sales/income from operations of your Company grew 9.9% inthe financial year ended March 31 2019 and stood at INR 89806 million net of duties andtaxes (previous year INR 81701 million). Adjusted for the franchise model changes Netsales/income from operations grew 10.5% for the year. Sales volume of the Company’sbrands in the ‘Prestige and Above’ segment grew 11.8% in the financial yearended March 31 2019 and stood at 41.6 million cases (previous year 37.2 million cases).Net sales of the ’Prestige and Above’ segment grew 15.2% and stood at INR 59095million net of duties and taxes (previous year INR 51276 million). The ’Prestige andAbove’ segment represented 71% of total net sales and 50.9% of total sale volumeduring the year.

2. Subsidiary Companies

In accordance with section 129(3) of the Companies Act 2013 (‘CompaniesAct’) a statement containing salient features of the financial statements of thesubsidiary companies in Form AOC-1 is provided as Annexure - 1 to this report.

3. Board’s Responses to Observations Qualifications and Adverse Remarks inAuditor’s Report

The Statutory Auditors have given unqualified opinion on the Financial Statements forthe year ended March 31 2019 and hence this is not applicable.

The Secretarial Auditor has given an unqualified opinion in the Secretarial AuditReport for the year ended March 31 2019 and the Secretarial Audit Report is annexed as

Annexure - 3.

4. Material Changes and Commitments/Events Subsequent to the date of theFinancial Statements

During the year the company has sub-divided 548000000 equity shares of face value ofBaba 10/- per equity share into 2740000000 equity share of Baba 2/- per equity shareand also 1200000 preference shares of face value of Baba 100/- per preference share into12000000 preference shares of Baba 10/- per preference share of the company. There areno other material changes and commitments/Events subsequent to the date of the FinancialStatements.

5. Change in nature of Business if any

The details of change in nature of business are provided under ManagementDiscussion and Analysis Report and the Report on Risk Management forming part of thisAnnual 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 however the FaceValue of 548000000 equity shares of Baba 10/- per share have been sub-divided into2740000000 equity shares of Baba 2/- each and brought uniformity between two classes ofpreference shares resulting in 171200000 Preference Shares of Baba 10/- each.

8. Details of Subsidiary Companies Joint Ventures and Associate Companies andtheir Financial Position

Your Company currently has 17 subsidiary companies and one Associate Company. Duringthe financial year the entire stake of the company in one of the subsidiary viz. FourSeasons Wines Limited was divested on January 16 2019. On June 25 2018 the Companysubscribed to 4567568 equity shares of Hip Bar Private Limited ("Hip Bar")constituting 26% of the paid-up equity share capital of Hip Bar . The information requiredunder the first proviso to section 129(3) of the Companies Act 2013 is given in form AOC-1 in Annexure - 1. The Company’s policy for determining material subsidiariesis 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 2019 equity shares representing 99.23% of the equity share capitalare in dematerialised form. As the depository system offers numerous advantages membersare requested to take advantage of the same and avail the facility of dematerialisation ofthe Company’s shares. Moreover transfer of shares of the company by physical meanshas been barred from April 01 2019 pursuant to SEBI’s Notification dated 3rdDecember 2018.

11. Board Meetings Board of Directors Key Managerial Personnel & Committees ofDirectors.

A. Appointment change in designation and resignation

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.

B. Re-appointment

As per the provisions of the Companies Act 2013 Mr Vinod Rao retires by rotation atthe ensuing Annual General Meeting (AGM) and being eligible offered himself forre-appointment.

Members may please note that Mr Vinod Rao who is a nominee of Relay B V was appointedas a Director at the 17th Annual General Meeting (AGM).

A brief profile of Mr Vinod Rao is provided as an Annexure to the Notice convening 20thAGM.

Mr. Anand Kripalu was appointed as Managing Director and Chief Executive Officereffective August 14 2014 for a period of five years which is ending on August 13 2019.Nomination and Remuneration Committee and Board of Directors have approved hisre-appointment for a further period of three years effective August 14 2019 to August 132022 which is subject to the approval of the members at the 20th Annual General Meeting

Re-Appointment of Independent Directors

On the recommendation of the Nomination and Remuneration Committee (NRC) and apporovalby the Board of Directors following Independent Directors will be re-appointed asIndependent Directors. The first term of the following independent directors are ending onthe following dates:

• Dr (Mrs) Indu Shahani September 29 2019

• Mr. D Sivanandan September 29 2019

• Mr. Rajeev Gupta December 22 2019

• Mr. Mahendra Kumar Sharma March 31 2020.

It is being proposed to re-appoint the aforesaid independent directors for a secondterm of five years which are as follows: a. Dr (Mrs.). Indu Shahani be and is herebyre-appointed as an Independent Director of the Company for a period of 5 years with efiectfrom September 30 2019 to September 29 2024 subject to approval of the Members at theensuing general meeting. b. Mr. D Sivanandan be and is hereby re-appointed as anIndependent Director of the Company for a period of 5 years with efiect from September 302019 to September 29 2024 subject to approval of the Members at the ensuing generalmeeting. c. Mr. Rajeev Gupta be and is hereby re-appointed as an Independent Director ofthe Company for a period of 5 years with efiect from December 23 2019 to December 222024 subject to approval of the Members at the ensuing general meeting. d. Mr. MahendraKumar Sharma be and is hereby re-appointed as an Independent Director of the Company for aperiod of 5 years with efiect from April 01 2020 to March 31 2025 subject to approval ofthe Members at the ensuing general meeting.

C. Independent Directors and Nominee Directors

Your Company did not appoint any new Independent Director or Nominee Director in theFinancial Year 2018-2019. Criteria for selection of Independent Directors include skillsexpertise of the Director qualifications experience and domain knowledge. IndependentDirectors are also expected to have the following skills expertise and competencies: i.Bringing objectivity and independence to board discussions and to provide essentialleadership to the Company’s strategy performance risk management as well asensuring high standards of financial probity and corporate governance. ii. Fulfil the roleand duties including the ones assigned by the Board from time to time and as stated inSchedule IV of the Companies Act 2013

Executive Director

Your company did not appoint any new Executive Director for the Company for the year2018-19.

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 SEBI (LODR) Regulations and are 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 2018-19 are stated in the Corporate Governance Report which forms part ofthis Annual Report.

F. Board Committees

The Company has setup 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. Recommendations of the Audit and Risk Management Committee and other Committees

All the recommendations of the Audit and

Risk Management Committee and of the other Committees from time to time were acceptedby the Board.

H. 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 2018-19 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 Baba 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

Pursuant to the provisions of the Companies Act 2013 the Commission payable by theCompany to the Independent Directors for the FY 2018-19 is INR 20 Million.

The criteria for payment of remuneration to executive directors is determined by theNomination and Remuneration Committee which includes various criteria includingperformance criteria.

I. 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 Board and the Nomination and Remuneration Committee identified certain aspects andareas to make the Board’s functioning even better. The Board also reviewed theachievements during the year against those observations arising from the evaluation inearlier years.

J. Vigil Mechanism

Your Company has a well-established vigil mechanism named as ‘SpeakUp’ inplace which is overseen by the compliance & ethics team. ‘SpeakUp’ is aconfidential service available to employees and others to make a report of any breach ofthe code policies or applicable laws. ‘SpeakUp’ is managed by an externalagency with stafi who are trained to deal with the calls and translators who areimmediately available to assist if required. The details of establishment of Speak Up isdisclosed in the website of the Company www. diageo.com. Access to the Chairman of theAudit Committee is provided in appropriate/exceptional cases as required under theCompanies Act 2013 and the SEBI (LODR) Regulations. All complaints are investigated bythe compliance and ethics team and appropriate action taken in accordance with yourCompany’s policies.

K. 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 last one being on January 232019 effective April 01 2019.

This policy has been amended from time to time and is available on the Company’swebsite www.diageoindia. com.

All related party transactions that were entered into during the financial year wereat arm’s length basis and were in the ordinary course of business. There are nomaterial significant related party transactions entered into by the Company withpromoters directors key managerial personnel or other designated persons which may havea confiict of interest with the Company at large.

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.

L. Meeting amongst Independent Directors

The Independent Directors met amongst themselves without the presence of any otherpersons on May 24 2018 and July 23 2018 respectively.

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. Fees paid tothe statutory auditors and their network of firms/ entities in India during the year bythe Company and its subsidiaries are as follows; By United Spirits Limited – Baba 49Million By the subsidiaries of United Spirits Limited – Baba 5 Million

Further details on fees to statutory auditors are disclosed in the Standalone andConsolidated Financial Statements.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 a Secretarial Audithas been carried out by Mr Sudhir V Hulyalkar Practicing Company Secretary (FCS: 6040 [CPNo. 6137]) and his report is annexed as Annexure – 3.

In addition the company has also obtained Secretarial Compliance Report for the yearended March 31 2019 in terms of the SEBI Circular issued on February 08 2019. The saidreport has been submitted to the stock exchanges and is also available on theCompany’s website viz. www.diageoindia.com.

Cost Audit

The Company is not covered by the requirement of maintenance of cost records asspecified under subsection (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.

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 discontinuedaccepting fixed deposits from the public and shareholders effective January 1 2014. Inaddition pursuant to section 74(1)(b) of the Companies Act 2013 the Board of Directorsat their meeting held on August 1 2014 decided to repay all fixed deposits maturing on orafter March 31 2015 by March 31 2015 by paying additional interest of 1% per annum onthose fixed deposits before the maturity date pursuant to the contract entered into withthe Fixed 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 2019 stood at Baba 6759000. This amount was transferred into a separatenon-interest bearing escrow account opened specifically for the purpose of re-payment hasbeen re-paid consistent with the provisions of the Companies Act 2013 and the rules madethereunder. Of this amount a sum of Baba 613000 (as of May 29 2019) has since beenpaid as per instructions received after the year end. The balance unclaimed fixed depositscontinue to remain in the escrow account as on May 29 2019.

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 divided is declared No. of Members who have not claimed their dividend Unclaimed dividend as on March 31 2019 Unclaimed dividend as % to total dividend Date of declaration Last date for claiming the dividend prior to its transfer to IEPF
(Amount in NR) I
2011-12 16215 3056067.50 0.93 25-Sep-2012 14-Nov-2019
2012-13 10866 2214265.00 0.61 24-Sep-2013 15-Sep-2020

The Company has not declared any dividend from financial year 2013-14 onwards. Hencethe aforesaid details do not include unpaid dividends from financial year 2013-14 onwards.

The number of Unclaimed equity shares transferred during the year ended March 31 2019to Investor Education and Protection Fund pursuant to section 124(6) of the Companies Act2013 is 580975.

Fixed Deposits:

1. Accepted during the year NIL
2. Remained unpaid or unclaimed as at the end of ` 6759000
the year
3. Whether there has been any default in
repayment of deposits or payment of interest
NIL
thereon during the year and if so number of such
cases and the total amount involved
4. The Details of deposits which are not in
compliance with the requirements of Chapter V of Not
the Companies Act 2013 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 Baba 10200000/- or above per annum orBaba 850000/- or above per month as well as additional information on employeeremuneration as required under the provisions of rule 5(1) 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial personnel) Rules 2014 is annexed as part ofthis report in Annexure - 5 hereto.

20. Employees Stock Option Scheme

Your Company has not offered any stock options to its employees during the year2018-19.

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 2019 include thesedisclosures. The Company has not given any guarantee to any company as on March 31 2019.

22. Risk Management

Details on Risk Management are annexed as part of this report in Annexure - 6hereto. The Company has not done any commodity hedging.

23. Internal Financial Controls

Please refer to note no 48 of Standalone financial Statements and Note no 50 ofConsolidated Financial Statements for the year ended March 31 2019. During the yearControls Compliance & Ethics (CC&E) team have commenced implementation of adetailed plan agreed with the Executive Committee of the Company to reinforce the code ofbusiness conduct and to further embed compliance across the business. The CC&E teamalso undertook comprehensive review of existing controls (Sox & non-Sox controls)& added additional attributes in the existing controls. The same has been shared withthe statutory auditors who have confirmed that they are aligned with the same. Thecontrols with additional attributes have been tested both by Management tester (Deloitte)and by the Statutory auditors in March 19 for its effectiveness. The Board afterconsidering the materials placed before it reviewed the confirmation received fromexternal parties and reviewing the effectiveness of the policies and procedures adopted bythe Company for ensuring orderly and eficient conduct of its business including adherenceto Company’s policy safeguarding its assets prevention and detection of frauds anderrors 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 size of the company and that such internalfinancial controls are broadly adequate and are operating effectively. The certificationby the auditors on internal financial control forms part of the audit report. A statementto this efiect 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 websitewww.diageoindia.com.

25. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo Theparticulars prescribed under section 134(3)(m) of the Companies Act 2013 read with Rule 8of 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 toRule 8(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 theCompany’s operations in future. The Management Discussion and Analysis Report readwith the report on Risk Management contains impact on the business due to regulatorychanges. The details of notices received from regulatory authorities and related mattershave been disclosed as part of Note No. 45 to the Audited Standalone Financial statementsfor the year ended March 31 2019 and as Note

No. 47 of the Consolidated Financial Statements for the year ended March 31 2019.

27. Disclosure as required Under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013

The Company has implemented a prevention of sexual harassment policy and constituted aninternal complaints committee in line with the requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 (SHWWA). An InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment and on-going training is provided to employees in compliance with therequirements of SHWWA. During the financial year 2018-19 one complaint was received andresolved.

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 and 1 associate company 15 subsidiary companiesare non-operative companies.

29. Directors’ Responsibility Statement

Pursuant to section 134 (5) of the Companies Act 2013 in relation to financialstatements (together with the notes to such financial statements) for the year 2018-19the Board of Directors report that: (i) in the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanation relatingto material departures; (ii) the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of afiairs of the

Company at the end of the financial year and of the profit/ loss of the Company forthat period; (iii) the Directors have taken proper and suficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; (iv) the Directors have prepared the financial statements on a goingconcern basis; (v) the Directors have laid down internal financial controls to be followedby the Company commensurate with the size and nature of its business and the complexity ofits operations and that such internal financial controls are adequate and are operatingeffectively.

(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
MD & CEO Chairman
Bengaluru
May 29 2019