DIRECTORS REPORT TO THE MEMBERS Your Directors are pleased to present the Twenty-second Annual Report and Audited Accounts for the year ended 3131 March, 2015 PERFORMANCE REVIEW During the year under review the Total Revenue of the Company has increased by 18% from Rs. 49,939lacs (Previous year) to Rs. 59,002lacs (Current year) and an increase in PBT by Rs.702lacs from the previous year and an increase in PAT by Rs.279lacs from the previous year. The Basic EPS of the Company is Rs.1.96/- as compared to Rs.0.167- and the diluted EPS of the Company is Rs.1.93/- as compared to Rs.0.15/- in the previous year. THE YEAR IN PERSPECTIVE In the year under review, your Company reported a revenue growth of 18% driven by successful implementation of several initiatives across business verticals. Though market conditions continued to be difficult, your Company's strategy of straddling all segment of the spirits value chain paid off. While the consumer business showed signs of revival, posting a growth of 13%, the manufacturing vertical continued to outperform with growth of 22%. As a consequence, proportion of manufacturing in revenues grew from 54% in FY13-14 to 56% in FY 14-15. Growth in the manufacturing vertical was largely driven by higher volumes of third party bottling (38%) and improved realizations in bottling and bulk alcohol. Your Company successfully scaled up contracts with United Spirits and ABD and also started bottling for Jagatjit Industries in Rajasthan. Exports business showed strong performance growing to 3x its size in the previous year. The growth in manufacturing was aided by higher capacity utilizations at both facilities. In a major milestone, your Company launched Distiller's Dried Grains with Solubles, a value added by-product, which has application in animal feed as a valuable protein source. In the consumer vertical, your Company witnessed strong volume growth in Rajasthan IMIL (20%) as efforts on brand building and widening of distribution reach yielded results. This was partly dampened by weak performance in Haryana, one of your Company's key markets, where adverse competitive conditions continued to persist. In a move to de-risk from geographical concentration, your Company entered the Bihar IMIL market, marking its entry in East India. Further, your Company continued its efforts in R&D to enhance productivity, thereby reducing cost of production. Raw material prices stabilized after an extended period of high prices and volatility. Despite delays in land acquisition, the expansion plans to East India are progressing well. Construction has started at both sites and your Company is expecting to commission both Greenfield facilities in FY2016-17. DIVIDEND Your Directors do not recommend any dividend for the financial year 2014-15. PUBLIC DEPOSITS The Company has not accepted or invited deposits covered under the provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules 2014 from any person during the year under Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year Mr. Vivek Gupta, Non-Executive & Independent Director of the Company has been appointed as Chairman of the Company w.e.f. 28th March 2015. Ms. Ruchika Bansal, has been appointed as Additional Director of the Company on 28th March 2015 and pursuant to section 161 (1) of the Companies Act, 2013, Ms. Ruchika Bansal will hold office only upto the date of forthcoming AGM of the Company and is eligible for appointment as Director. The Board recommends her appointment and accordingly resolution seeking approval of the members for her appointment has been included in the Notice of forthcoming Annual General Meeting of the Company along with her brief profile. Mr. Gautam Premnath Khandelwal, Independent Director & Chairman of the Company has been resigned from the Board of the Company w.e.f. 14* November, 2014. The Directors place on record their appreciation of the valuable contribution made by him. Mr. Manik Lal Dutta, Executive Director of the Company and Sh. Rajesh Sehgal, Non-Executive Director of the Company, retire by rotation and being eligible offer themselves for reappointment. The Board recommends their re-appointment. SUBSIDIARY COMPANIES Your Company has two wholly owned subsidiaries viz., M/s Unibev Limited (formerly known as M/s Uber Blenders & Distillers Limited), (Indian subsidiary) and M/s Globus Trade Bay Limited (foreign subsidiary) in UAE. In terms of proviso to sub section (3) of Section 129 of the Act, the salient features of the financial statement of the subsidiaries is set out in the prescribed form AOC-1, which forms part of the annual report. Performance and financial position of the subsidiary companies is given in Annexure-I. CORPORATE GOVERNANCE As per requirement of Clause 49 of the Listing Agreement with the Stock Exchanges, a Compliance Report on Corporate Governance has been annexed as part of the Annual Report. CORPORATE SOCIAL RESPONSIBILITY(CSR) The CSR Policy of the Company and the details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in Annexure-lll to this Report. Further details of composition of the Corporate Social Responsibility Committee and other details are provided the Corporate Governance Report which forms part of this report. AUDITORS Pursuant to provisions of Section 139 of the Companies Act 2013, M/s Deloitte Haskins & Sells, Firm Regn No.015125N, Chartered Accountants, having their office at 7th Floor, Building 10, DLF Cyber City Complex, DLF City Phase-ll, Gurgaon-122002, Haryana, were appointed in the 2181 AGM as statutory auditors of the Company for a period of the first term of five consecutive years till the conclusion of 26th AGM, subject to ratification at every annual general meeting in terms of the Companies Act 2013. AUDITORS' REPORT The Auditors in their Report to Members, have given a qualification and the response of your Directors with respect to it as follows :- In Standalone Accounts: As at March 31, 2015, Fixed Assets include Intangible Assets aggregating to Rs. 2,164.95 Lacs (March 31, 2014 - Rs. 2,886.60 Lacs) under the head "Knowhow and New Brand Development" representing intangibles internally generated by the Company through expenditure on advertisement and promotional expenses. Such recognition of expenses as an intangible asset is not in accordance with Accounting Standard (AS 26) "Intangible Assets". Had the Company complied with requirements of AS-26, Fixed Assets as at March 31, 2015 would have been lower by Rs. 2,164.95 Lacs (March 31, 2014 - Rs. 2,886.60 Lacs), Depreciation and amortisation expense for the year would be lower by Rs. 721.65 Lacs. Net Profit after taxes for the year would be converted into Net Loss after taxes of Rs. 709.00 Lacs and the Reserves and Surplus would be lower by Rs. 1,415.70 Lacs. In Consolidated Accounts: As on March 31, 2015, Fixed Assets include Intangible Assets aggregating to Rs. 2,164.95 Lacs under the head "Knowhow and New Brand Development" representing intangibles internally generated by the Holding Company through expenditure on advertisement and promotional expenses. Such recognition is not in accordance with Accounting Standard - 26 "Intangible Assets". Had the Holding Company complied with requirements of AS-26, Fixed Assets as at March 31, 2015 would have been lower by Rs. 2,164.95 Lacs, Depreciation and amortisation expense for the year would be lower by Rs. 721.65 Lacs, Net profit after taxes for the year would be converted into net losses after tax of Rs. 741.69 Lacs and Reserves and Surplus would be lower by Rs. 1,415.70 Lacs. And the response of your Directors with respect to it as follows:- During the current period the expenses incurred on brand promotion were expensed off, however, up to 31/03/2013 the same were being capitalised since the brands were under establishment during that period. Further, during the year, an amount of Rs. 721.65 Lacs has been debited to Statement of Profit and Loss to amortise these assets over 5 years. COST AUDIT The board subject to the approval of the Central Government, if required, has re-appointed M/s Niraj Kumar Vishwakarma & Associates, Cost Accountants, having Firm's registration no. 101683, its branch office at N-60,4™ Floor, Narain Nagar, Lalita Park, Delhi-110092, as Cost Auditor for conducting the Cost Audit for the financial year 2015-16. The audit committee recommended his appointment and remuneration. The Company has also received necessary certificate under Section 141 of the Act 2013 conveying his eligibility for re-appointment. The remuneration fixed by the board, based on the recommendation of the audit committee is required to be ratified by the members at the AGM as per the requirement of Section 148(3) of the Act 2013. SECRETARIAL AUDIT REPORT Secretarial Audit Report has been annexed &forms part of the Annual Report. CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / RESEARCH & DEVELOPMENT ETC. Particulars as required under Rule 8 (3) of the Companies (Accounts) Rules, 2014 are given in Annexure II and form part of this report. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's Discussion and Analysis Report has been annexed &forms part of the Annual Report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed 1. That in preparation of the Annual Accounts for the financial year 2014-15, the applicable Accounting Standards have been followed along with explanation relating to material departures, if any. 2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at 31st March, 2015 and of the results of the Company for that period. 3. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. 4. That the directors had prepared the Annual Accounts for the financial year 2014-15 on a going concern basis. 5. That they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly ; and 6. That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT The Board wishes to place on record its appreciation for the wholehearted support and valuable co-operation extended to the Company by the Central & the State Governments, Bankers, Suppliers, Associates, Contractors, employees and shareholders. For and on behalf of the Board of Directors (Dr. Bhaskar Roy) Executive Director & CFO DIN-02805627 (Ajay K. Swarup) Managing Director DIN-00035194 Place: New Delhi Date: 13/08/2015 |