Your directors are pleased to present the 22nd Report of Directors of your Company andthe audited financial statements for the year ended March 31 2021.
Rs in Million
| ||Standalone ||Consolidated |
|Particulars ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|The working of your Company for the year under review resulted in Revenue from operations ||271764 ||285892 ||274185 ||288237 |
|Profit / Loss from operations ||8697 ||13609 ||9033 ||13790 |
|Exceptional and other non-recurring ||(1514) ||13 ||(643) ||666 |
|Less: || || || || |
|Depreciation ||2493 ||2275 ||2991 ||2853 |
|Taxation (including deferred tax) ||1587 ||4300 ||1778 ||5397 |
|Profit / (Loss) after tax ||3103 ||7047 ||3621 ||6206 |
|Profit B/F from previous year ||(21623) ||(28396) ||(25840) ||(32159) |
|Impact of change in Revenue Recognition policy on adoption of IND AS 115 ||- ||- ||- ||- |
|Reinstated Profit B/F from previous year ||(21623) ||(28396) ||(25840) ||(32159) |
|Minority Interest appropriation ||- ||- ||217 ||382 |
|Foreign Currency Translation Reserve Considered separately ||- ||- ||(15) ||(49) |
|Total Comprehensive Income ||57 ||(274) ||63 ||(220) |
|Transfer between reserves ||- ||- ||- ||- |
|Profit / (Loss) available for appropriation ||(18463) ||(21623) ||(21954) ||(25840) |
|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 ||(18463) ||(21623) ||(21954) ||(25840) |
|EPS-Basic & Diluted (Rupees) ||4.27 ||9.70 ||5.41 ||9.29 |
|Balance carried to the Balance Sheet ||(21623) ||(28396) ||(25840) ||(32159) |
|EPS-Basic & Diluted (Rupees) ||4.27 ||9.70 ||5.41 ||9.29 |
As can be seen from the above table the revenue from operations decreased by 4.94%during the year on standalone basis and decreased by 4.88% on consolidated basis. Profitafter tax has decreased during the year by 55.97% on standalone basis and decreased by41.64% on consolidated basis. The challenges which the Company faced during the year andthe environment in which the Company operates have been detailed in Management Discussionand Analysis Report which is forming part of this Annual Report (Report').
1. Performance of the Company
During the year under review your Company's sales volume was about 70.7 million casesresulting in a volume decline of_ 11.3% compared to previous year. Net sales/income fromoperations (net of duties and taxes) of your Company declined by 13.2% in the financialyear ended March 31 2021 which stood at Rs 78890 million (previous year Rs 90908million). Adjusted one-off sale of bulk Scotch net sales/ income from operations declinedby 10.8% for the year. Sales volume of the Company's brands in the Prestige andAbove' segment declined by 9% in the financial year ended March 31 2021 which stood at37.2 million cases (previous year 40.9 million cases). Net sales of the 'Prestige andAbove' segment declined by 7.2% which stood at Rs 55035 million net of duties and taxes(previous year Rs 59311 million). The 'Prestige and Above' segment represented 69.8% oftotal net sales and 52.6% of total sale volume during the year.
2. Board's responses to observations qualifications and adverse remarks inauditor's report
The statutory and secretarial auditors have given unqualified opinion on the financialstatements and in the secretarial audit report for the year ended March 31 2021 and hencethis is not applicable.
Secretarial Audit Report for financial year 2020-21 is annexed as Annexure 3.
3. Material changes and commitments / events subsequent to the date of thefinancial statements
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. The sharp rise in COVID-19 cases across India_has led toimplementation of lockdown order at most of the states in the country while some stateshave imposed strict lockdown orders others are partial in nature. Out of the 47manufacturing sites including tie-up manufacturing units 3 factories are not in operationcurrently due to complete lockdown while 6 factories are operating with governmentrestrictions.
4. Change in nature of business if any
The details of change in nature of business if any are provided under ManagementDiscussion and Analysis Report and the Report on Risk Management forming part of thisReport.
In view of the accumulated losses of the preceding years your directors could notrecommend any dividend.
6. Transfer to reserve
During the year under review there was no amount transferred to reserves of theCompany.
The authorized share capital of your Company remains unchanged at 2740000000 equityshares of Rs 2/- each and 171200000 preference shares of Rs 10/- each. The issuedsubscribed and paid-up capital of the Company is 726638715 equity shares of Rs 2/- eachaggerating ` 1453277430. There was no change in the issued subscribed andpaid-up capital of the Company during the year under review.
8. Details of subsidiary companies and associate companies and their financialposition
The performance of subsidiaries and associate Companies and their contribution to theoverall performance of the Company is covered as part of the consolidated financialstatement and form AOC-1 annexed as part of this Report as Annexure 1.The Company has 14 subsidiary companies and 1 associate company. Out of 14 subsidiarycompanies 12 subsidiary companies are non-operative.
During the year 3 companies ceased to be subsidiary viz. (i) UB SportsManagement Overseas Limited a wholly owned overseas subsidiary consequent upon its mergerwith Palmer Investment Group Limited another wholly owned overseas subsidiary; (ii)Liquidity Inc an overseas subsidiary consequent upon the sale of entire stake held bythe Company and (iii) Tern Distilleries Private Limited a wholly owned subsidiaryconsequent upon sale of entire stake held by the Company.
After the end of financial year 2020-21 Montrose International (S.A.) Panama awholly owned overseas subsidiary of your Company was liquidated effective April 16 2021and thus ceased to be a subsidiary.
On June 25 2018 the Company had subscribed to 4567568 equity shares of Hip BarPrivate Limited ("Hip Bar") constituting 26% of the paid-up equity sharecapital of Hip Bar. In April 2020 compulsory convertible preference shares (CCPS) wereissued by Hip Bar to Hip Bar's promoter Group for ` 3 crore to which the Company did notsubscribe. While the exact conversion ratio of these CCPS would be fixed at a later datethe dilution of Company's equity in Hip Bar consequent to the aforesaid CCPS issuance isexpected to be in the range of 2.4% to 3.4%. Further in October 2020 the Company made aninvestment of Rs 1.95 crore in CCPS of Hip Bar which is expected to be 2.4% to 3.4% basedon the valuation at the time of conversion. The shareholding of the Company in Hip Bar onfully diluted basis including the existing shareholding is expected to be 26% when theCCPS is exercised. During the year investment in Hip Bar has been impaired as theoperations have been closed.
The Board of Directors ("Board") of Pioneer Distilleries Limited a listedsubsidiary of the Company ("PDL") and of the Company at their meetings held onDecember 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. Upon completion of_ the merger the non-promoter shareholders of PDLwill receive 10 equity shares of the Company (face value of Rs 2 each) for every 47 equityshares of PDL (face value of Rs 10 each) held by them as on the record date. Post themerger the Company's issued capital is expected to expand by 712138 shares and therevised shareholding of Relay BV (the holding Company a subsidiary of Diageo PLC) in theCompany will change from 55.94% to 55.88%. The Scheme is subject to the receipt ofrequisite approvals from the relevant statutory authorities and the respectiveshareholders and creditors of PDL and of the Company. The BSE Limited and the NationalStock Exchange of India Limited have issued their no-objection to the draft scheme andrelated documents filed vide observation letters dated October 21 2020 and October 222020 respectively. The Company jointly with PDL have filed application under Sections 230to 232 of the Companies Act 2013 on November 27 2020 with the National Company LawTribunal Bangalore ("NCLT") and again an Interlocutory Application was filedbefore NCLT on April 07 2021.
Royal Challengers Sports Private Limited (RCSPL) a wholly owned subsidiary of yourCompany reported a revenue from operations of Rs 272 million during the year which wasmainly attributed to the increase in central rights income from Board of Cricket Controlof India (BCCI) and as a result of Royal Challengers Bangalore a franchisee team ofIndian Premier League (IPL) securing fourth position in the IPL Season 2020. RCSPL alsoaccounted for a Profit of Rs 541 million with an increase of Rs 504 million accounting to326% of increase during the year.
The Company's policy for determining material subsidiaries is available at theCompany's website at https://www. diageoindia.com/investors/shareholder-centre/policies/policy-for-determining-material-subsidiaries/.
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 https://www.diageoindia.com/investors/subsidiaries-financial/.
The details about prospects/outlook of your Company are provided under the ManagementDiscussion and Analysis Report forming part of this Report.
10. Appointment/reappointment and resignation/ retirement/step down of ExecutiveDirectors and Key Managerial Personnel during the financial year:
A. i) Retirement of Mr. V Ramachandran as Company
Secretary & appointment of Mr. Mital Sanghvi as Company Secretary (CS) KeyManagerial Personnel (KMP)
As already updated in the annual report for the year ended 2019-20 the Board atits meeting held on January 27 2020 appointed Mr. Mital Sanghvi as CS of the Company witheffect from June 01 2020 in the place of Mr. V Ramachandran erstwhile CS who retiredfrom the services of the Company effective end of day May 31 2020.
ii) Resignation of Executive Director and Chief Financial Officer (ED & CFO) Key Managerial Personnel (KMP)
The Board at its meeting held on September 18 2020 noted the resignation of Mr.Sanjeev Churiwala as ED & CFO of the Company effective end of day September 30 2020.Mr. Sanjeev Churiwala resigned as an ED & CFO as he was promoted within Diageo groupat Singapore.
iii) Appointment of Chief Financial Officer (CFO)
The Board at its meeting held on September 18 2020 appointed Mr. Pradeep Jain as CFOof the Company with effect from October 01 2020.
iv) Stepping down of Mr. Anand Kripalu as Managing Director and Chief Executive Officer(MD & CEO) Key Managerial Personnel (KMP)
The Board at its meeting held on December 10 2020 approved the stepping down of Mr.Anand Kripalu as MD & CEO of the Company effective end of day June 30 2021. Mr. AnandKripalu is stepping down as MD & CEO owing to his retirement.
v) Appointment of Managing Director and Chief Executive Officer (MD & CEO)
The Board at its meeting held on December 10 2020 approved the appointment of Ms. HinaNagarajan (Ms. Nagarajan) as Additional Director and MD & CEO with effect from July01 2021. Ms. Nagarajan assumed office as Chief Executive Officer Designate witheffect from April 01 2021 and continue in that position till June 30 2021. Details aboutMs. Nagarajan is provided in the Notice of the 22nd annual general meeting of the Company.
Apart from the aforesaid appointment there was no appointment of executive directorduring the year.
vi) Re-appointment of Mr. John Thomas Kennedy
As per the provisions of the Companies Act 2013 Mr. John Thomas Kennedy (Mr. Kennedy)retires by rotation at the ensuing annual general meeting (AGM) and being eligibleoffered himself for reappointment.
Members may please note that Mr. Kennedy who is a nominee of Relay B V was appointedas a director at the 19th AGM held on September 07 2018. Mr. Kennedy is not debarred fromholding the directorship under any statutory regulations. Details about Mr. Kennedy isprovided in the Notice of the 22nd annual general meeting of the Company.
vii) Appointment of Mr. Vegulaparanan Kasi Viswanathan as an Independent Director ofthe Company for the second term.
The tenure of office of Mr. Vegulaparanan Kasi Viswanathan (Mr. V K Viswanathan) whowas appointed as an Independent Director of the Company on October 17 2016 and whosefirst term of 5 years expires on October 16 2021. The Board of Directors at their meetingheld on May 21 2021 has accepted the recommendation of the Nomination & RemunerationCommittee for re-appointment of Mr. V K Viswanathan as an Independent Director fora further period of 5 years with effect from October 17 2021. Details about Mr. V KViswanathan is provided in the Notice of the 22nd annual general meeting of the Company.
viii) Continuation of Mr. Mahendra Kumar Sharma as Director of the Company oncompletion of 75 years of age.
Mr. Mahendra Kumar Sharma (Mr. M K Sharma) non-executive Chairman was re-appointed asan Independent Director at the Annual General Meeting of the Company held on August 212019 for a further period of 5 years. During his tenure in the office he will beattaining the age of 75 years. Details about Mr. M K Sharma is provided in the Notice ofthis 22nd annual general meeting of the Company.
B. Independent Directors
Your Company did not appoint any new Independent Director or Nominee Director in thefinancial year 2020-21. Criteria for selection/appointment or re- appointment ofIndependent Directors include skills expertise of the Director qualificationsexperience and domain knowledge. The required skills of Independent Directors areleadership managerial experience diversity risk management and corporate governance.All our Independent Directors viz. Mr. Mahendra Kumar Sharma Mr. V K Viswanathan Mr. DSivanandhan Mr. Rajeev Gupta and Dr. (Mrs.) Indu Shahani possess the aforesaid skills.
C. Declaration by 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 ful_llthe conditions specified in Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 (SEBI (LODR) Regulations) and areindependent of the management.
D. Number of meetings of the Board
The details of the Board Meetings and other Committee Meetings held during thefinancial year 2020-21 are stated in the Corporate Governance Report which is forming partof this Report.
E. Board Committees
The Company has the following committees of the Board: Audit Committee Risk ManagementCommittee Nomination and Remuneration Committee Stakeholders Relationship and GeneralCommittee 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 thisReport.
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 and the same areuploaded on the website of the Company wherever required and the salient features of thepolicies are detailed in Corporate Governance Report.
G. Recommendations of the audit committee and other committees
All the recommendations of the Audit Committee and of the other Committees wereaccepted by 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 2020-21 is provided in theCorporate Governance Report. The Company has also prepared a draft annual return inrevised e-form MGT-7 for FY 2020-21 and uploaded the same on Company's website athttps://www.diageoindia.com/investors/financials/annual-and-financial-reports/annual-return-2020-21. Members may also note that the annualreturn uploaded on the website is a draft and the final annual return will be uploadedafter the same is filed with the Ministry of Corporate Affairs (MCA').
As stated in the Corporate Governance Report sitting fees is 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 Rs 4 Crore or 1% of the net Profits of the Company calculated inaccordance with Section 198 of the Companies Act 2013 whichever is higher as approvedby the shareholders through Postal Ballot Resolution effective January 18 2019. Criteriafor payment of remuneration to Independent Directors are as given below:
i. Membership of Committees
ii. Chairmanship of the Committees/Board
iii. Benchmarking with other companies The Board of Directors have approved payment ofcommission of Rs 20 million to five independent directors after applying the criteriastated above for the financial year 2020-21.
The criteria for payment of remuneration to executive directors is determined by theNomination and Remuneration Committee based on various criteria including performancecriteria. Remuneration Policy is available on the Company's website at https://www.diageoindia.com/investors/shareholder-centre/policies/remuneration-reward-policy/.
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 based onparameters whichinter alia include performance of the Board on deciding strategyrating the composition & mix of Board members discharging of their duties andhandling critical issues etc. The parameters for the performance evaluation of theDirectors include contribution made at the Board meeting attendance instances of sharinginformation on best practices applied in other industries domain knowledge visionstrategy engagement with senior management etc. The Independent Directors at theirseparate meetings review the performance of non-independent directors and the Board as awhole. Chairperson of the Company after taking into account the views of ExecutiveDirector and non-executive directors reviews the quality quantity and timeliness of flowof information between the management and the Board for the Board to effectively andreasonably perform their duties. Based on the outcome of the performance evaluationexercise areas have been identified for the Board to engage itself with and the samewould be acted upon. The details of the evaluation process are set out in the CorporateGovernance Report which forms part of this Report.
J. Vigil Mechanism
The Company has a whistle blower mechanism known as SpeakUp which is independentlyoperated by a third-party agency. The Company encourage the employees/ representativesacting on behalf of the Company to raise their compliance concerns through this mechanismapart from other internal reporting channels viz. Line Manager or HR Business PartnerLegal Business Partner and Business Integrity partner. A structured Breach ManagementStandard is in place which is in line with the Global Standard for timely and conclusiveresolution of compliance concerns raised through the whistle blower mechanism. The qualityof investigation reports and remedial actions are reviewed and monitored by the GlobalBusiness Integrity team. The decision on sanctions on the reported breaches are determinedand monitored by a Compliance Committee in order to ensure that there is a collective anda fair decision-making process and consistent action is undertaken in resolving thebreaches.
This mechanism also provides for adequate safeguards against the victimization ofemployees who avail the vigil mechanism for reporting the compliance complaint in goodfaith and without fear of being punished for raising that concern. Access to the Chairmanof the Audit Committee is provided as required under the Companies Act 2013 and the SEBI(LODR) Regulations.
The SpeakUp channel is available on the Company's website athttps://www.diageoindia.com/about-us/ corporate-governance/speak-up/ and the toll-freenumber is available in english and other prominent regional languages.
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. This policy is available onthe Company's website at https://www.diageoindia.com/investors/shareholder-centre/policies/policy-on-related-party-transactions/. Form AOC-2 pursuant to Section 134(3)(h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 is set outin the Annexure-2 to this Report.
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 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 at large.
L. Meeting amongst Independent Directors
Schedule IV of the Companies Act 2013 SEBI (LODR) Regulaions and Secretarial Standard- 1 on Meetings of the Board of Directors mandates that the Independent Directors of theCompany hold at least one meeting in a year without the attendance of Non-IndependentDirectors.
The Independent Directors met amongst themselves without the presence of any otherpersons on May 27 2020 July 27 2020 and November 04 2020.
11. Auditors i) Financial audit
M/s Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E-300009)were appointed as Statutory Auditors of your Company at the 17th AGM of the Company for aperiod of 5 years and their term comes to an end at the conclusion of the 22nd AGM of theCompany. The Audit Committee at their meeting held on May 20 & 21 2021 recommendedthe re-appointment of M/s Price Waterhouse & Co Chartered Accountants LLP (FRN304026E/E-300009) (PWC') who have given their consent and willingness to bere-appointed as Auditors of your Company. PWC being one of the reputed internationalaudit firm and given their expertise in the field of audit the Board of Directors attheir meeting held on May 21 2021 approved the recommendation of the Audit Committee andproposed to re-appoint PWC as Auditors of your Company for a period of 5 years from theconclusion of the ensuing 22nd AGM till the conclusion of the 27th AGM of the Companysubject to the approval of the members of the Company at the ensuing AGM.
ii) Secretarial audit
Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 a Secretarial Audit has beencarried out by Mr. Sudhir V Hulyalkar Practicing Company Secretary (FCS: 6040 and CP No.6137) and his report is annexed as Annexure 3.
In addition Pursuant to Regulation 24A of the SEBI (LODR) Regulation theSecretarial Compliance Report for the financial year ended March 31 2021 in relation tocompliance of all applicable SEBI Regulations/ circulars/guidelines issued thereunder isannexed as Annexure 3A. The Secretarial Compliance Report has beenvoluntarily disclosed as part of this Report as good disclosure practice. The said reporthas been submitted to the stock exchanges and is also available on the Company's websiteat https://www.diageoindia.com/investors/shareholder-centre/notice-board/annual-secretarial-compliance-report-2021/.
iii) 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.
12. Reporting of fraud by Auditors
During the year under review neither the statutory auditors nor the secretarialauditor have reported to the Audit Committee or the Board under Section 143(12) of theCompanies Act 2013 any instances of fraud committed against the Company by its Officersor employees the details of which would need to be mentioned in this Report.
13. Corporate governance
A Corporate Governance Report is annexed separately as part of this Report. Boardconfirms compliance with Secretarial Standards.
14. Management discussion and analysis report
The Management Discussion and Analysis Report is annexed separately as part of thisReport.
15. Fixed deposits
As reported in the earlier annual reports your Company discontinued accepting fixeddeposits from the public and shareholders effective January 1 2014. In addition pursuantto section 74(1)(b) of the Companies Act 2013 the Board of Directors at their meetingheld on August 1 2014 decided to repay all fixed deposits maturing on or after March 312015 by March 31 2015 by paying additional interest of 1% per annum on those fixeddeposits repaid 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 2021 stood at _1797000. Unclaimed 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 _115000/- has since been paid as per instructions receivedafter the year end and balance unclaimed amount as of May 21 2021 is _1682000/-. Thebalance unclaimed fixed deposits continue to remain in the escrow account as on May21 2021.
16. Annual return
The draft Annual Return of the Company as on March 31 2021 in E-Form MGT - 7 inaccordance with Section 92(3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 is available on the website of the Company athttps://www.diageoindia.com/investors/financials/annual-and-financial-reports/annual-return-2020-21.
17. 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. i) Dividend:
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 2021 to Investor Educationand Protection Fund pursuant to Section 124(6) of the Companies Act 2013.
ii) Fixed Deposits:
|1. Accepted during the year ||NIL |
|2. Remained unpaid or unclaimed as at the end of the year ||_1797000 |
|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.
18. Human resources
Employee relations remained cordial at all the locations of the Company. Particulars ofemployees drawing an aggregate remuneration of Rs 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 (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is annexed as part of this Report inAnnexure 4 hereto.
19. Employees stock option scheme
Your Company has not offered any stock options to its employees during the year 2020-21within the meaning of SEBI (Share Based Employee Benefit) Regulations 2014.
20. 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 under Note 4 relating to investmentsand Note 5 relating to loans given as per the standalone financial statements for the yearended March 31 2021. The Company has not given any guarantee to any Company as on March31 2021.
21. Risk management
Details on Risk Management is annexed as Annexure 5 to this Report.
22. 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 2021 for its effectiveness. The Boardafter considering the materials placed before it reviewed the confirmation received fromexternal parties and the effectiveness of the policies and procedures adopted by theCompany for ensuring orderly and efficient conduct of its business including adherence toCompany's policy safeguarding its assets prevention and detection of frauds and errorsand completeness of accounting records and timely preparation of financial statements. TheBoard has satisfied itself that the Company has laid down internal financial controlswhich are commensurate with the size of the Company and that such internal financialcontrols 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.
23. 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 Report. Furthermore as required by Section 135 of the Companies Act 2013 and the rules made thereunderadditional information on the policy and implementation of CSR activities by your Companyduring the year are provided in Annexure 6 to this Report.
24. 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 7 tothis Report.
25. 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 details of notices received from regulatory authorities andrelated matters have been disclosed as part of note no. 40(e) to the audited standalonefinancial statements for the year ended March 31 2021 and as note no. 40(e) of theconsolidated financial statements for the year ended March 31 2021.
26. Disclosure as required under Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
As per requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 (SHWWA) the Company has implemented the policy andframework. Moreover the Company's policy is all gender inclusive and the process ensurescomplete anonymity and confidentiality to the parties.
Internal Committees (IC) have been constituted for all locations. While maintaining thehighest governance norms the various Internal Committee has appointed internal membersand an external member who have extensive experience in the field. The IC's meet onquarterly basis to discuss the matters on policy awareness best practices judicialtrends etc. During the year IC has also been trained on nuances of the SHWWA.
The IC's role is to consider and resolve the complaints reported on sexual harassmentat workplace. Investigation is conducted and decisions are made by the IC at therespective location and a senior woman employee is the presiding Officer over every case.
i) Number of complaints filed during the financial year: 1
ii) Number of complaints disposed of during the financial year : 1
iii) Number of complaints pending as on end of the financial year: NIL
To build awareness in this area the Company has been publishing newsletter emailersposters conducting online training module and IBegin-induction training for newly joinedemployees. Besides the refresher virtual training programmes are conducted in theorganisation on a continuous basis for employees consultants contractual employees andpermanent/contractual workers in regional languages. The IC has also conducted informalsessions to check the pulse at the grassroot levels.
27. Business Responsibility Report (BRR)
In accordance with the SEBI (LODR) Regulations 2015 the BRR has been placed on theCompany's website at https://www.diageoindia.com/investors/financials/annual-and-financial-reports/business-responsibility-report-2020-21.
28. Other Disclosures
a) The Company has not issued equity shares with differential rights as to dividendvoting or otherwise.
b) The Company has not issued any sweat equity shares to its directors or employees.
c) No application has been made under the Insolvency and Bankruptcy Code; hence therequirement to disclose the details of application made or any proceeding pending underthe Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year along with theirstatus as at the end of the financial year is not applicable. d) The requirement todisclose the details of difference between amount of the valuation done at the time ofonetime settlement and the valuation done while taking loan from the Banks or FinancialInstitutions along with the reasons thereof is not applicable.
29. Directors' responsibility report
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 2020-21the Board of Directors report that:
(i) in the preparation of the annual accounts for the financial year ended March 312021 the applicable accounting standards have been followed and there are no materialdepartures;
(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 as at March 31 2021 and of the Profit ofthe Company for year ended on that date;
(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 itsoperations and that such internal financial controls are adequate and are operatingeffectively.
(vi) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws by implementing an automated process having comprehensive systems andsecuring reports of statutory compliances periodically from the functional units and thatsuch systems are adequate and are operating effectively.
The Board of Directors place on record sincere gratitude and appreciation for all theemployees at all levels for their hard work solidarity cooperation and dedication duringthe year. The Board conveys its appreciation for its customers shareholders suppliers aswell as vendors bankers business associates regulatory and government authorities fortheir continued support.
| ||By Order of the Board |
| ||Mahendra Kumar Sharma |
| ||Chairman |
| ||DIN: 00327684 |
|Place : Mumbai || |
|Date : May 21 2021 || |