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HOME   >  CORPORATE INFO >  DIRECTORS REPORT
Directors Report      
Godfrey Phillips India Ltd.
March 2015

DIRECTORS' REPORT & MANAGEMENT DISCUSSION AND ANALYSIS

Your Directors feel privileged to present the 78th Annual Report on the business and operations of the Company along with the Audited Accounts for the financial year, ended March 31, 2015.

ECONOMIC ENVIRONMENT

The global economic recovery continued to be uneven during 2014-15, with low inflation turning to deflation in many countries, while advanced economies reported a pick-up in growth and emerging and developing economies continued to slow down resulting in modest global economic growth of 3.4% in 2014. Geopolitical tensions, stagnation and deflationary conditions and continued slowdown in China with its consequent adverse impact on commodity prices, represents some of the key challenges to global economic recovery. IMF, in their latest outlook, has marked the global economic growth for 2015 at 3.3%. Later in the year, it is expected that the US Fed and Bank of England will reverse the interest rate cycle leading to flight of capital to these regions. This is likely to further impact the emerging economies negatively.

Compared to the trends of other emerging and developing economies, the Indian economy showed some resilience with a growth of 7.4% in 2014-15 based on the new GDP series as compared with 6.9% in 201 3-14. There was room for cheers on some counts, as there was a 2.8% growth in IIP, robust 10.6% growth in the services sector, declining rate of inflation (both CPI and WPI), containing fiscal deficit within the target at 4% of GDP, narrowing current account deficit at 1.3% of GDP, improved investor sentiment, healthy foreign exchange reserves at over $ 350 billion, stable Rupee and rising stock markets. IMF has estimated that India will grow at 7.5% in 2015-16 and therefore, India shall continue to remain, one of the fastest growing economies in the world. However, if India has to live up to its true potential, there is an urgent need to focus on job creation and skill up-gradation to address the issue of unemployment, especially among the youth. And, for this the manufacturing sector needs to get the required boost and the Modi government's call for 'Make in India' should travel beyond the realms of mere sloganeering.

TOBACCO INDUSTRY

The global tobacco industry accounted for a 4 % growth with a value of USD 81 6 billion in 2014; likewise the global cigarette industry saw a growth of 3 % i.e. USD 744 billion, keeping the value growth intact. Global cigarette volumes declined by about 0.4 % in 2014 which were driven by volume decline in North America and Europe by 4 % and 5 %, respectively. The industry's growth engine - Asia Pacific grew by 1 % in 2014.

New generation products such as electronic vaping devices (EVD) and nicotine gums are gaining global acceptance. Sales of e-cigarettes grew by 60 % globally in 2014 as consumers perceive this segment to be less harmful. Taking a cue from this, your Company has also forayed into the same category with the test marketing of "ZESTT" brand in Delhi - NCR.

The Indian cigarettes industry is passing through tough times. A significant part of the cigarettes value is comprised of excise and VAT, unlike other tobacco products. In the last 4 fiscal years, the weighted excise increased at about 18% year-over-year. Consequently, all companies are facing pricing and margin pressures. Yet, the industry has been successful in maintaining a value growth albeit at the cost of volume decline.

India's taxation policy and regulatory regime is somewhat skewed against cigarettes over the years. This has led to the share of legal cigarettes in overall tobacco consumption progressively declining from 21% in 1981-82 to about 12% in 2014-15 even as overall tobacco consumption has increased in India. According to a study by Euromonitor International, India is now the 5th largest market for illegal cigarettes in the world and that the illegal cigarette trade accounts for nearly one-fifth of the overall cigarette industry in India.

Initially it was felt that the cigarette segment of 'length not exceeding 65mm' will rope in tobacco consumers from categories like bidi, khaini, chewing tobacco, gutkha, etc., but cumulative increase of 1 15% in excise duty in July 2014 and February 2015 has belied those hopes completely.

A dominant industry trend in India is that of polarization, wherein cigarette consumers are drifting from regular size towards either kings size segment or 64mm. This is also reflected in price bands where the premium and popular segments are being diluted with movement toward economy segment.

Indian leaf tobacco exports in 2014-15 fell way short of the target and were pegged at Rs. 5600 crore, even lower than last year's actual of Rs. 6100 crore.

Regulation and Taxation

The regulatory environment is getting stricter by the day. For the fourth consecutive year, the Union budget in February 2015 hiked excise rates for cigarettes in the range of 12-22 per cent; the hike was even steeper in the range of 11-72 per cent as presented in the July 2014 budget.

The state government controlled VAT rates are also moving upwards. Share of VAT within total taxes to the cigarettes industry, has increased from 28 per cent in 2010-11 to 43 per cent in 2014-15. It is imperative that GST comes in to play from April 1, 2016 and streamlines the varied tax structure. It is imperative that revenue sensitive goods like cigarettes are subjected to uniform standard rates of tax applicable to general category of goods to ensure revenue buoyancy and rein in the growth of illicit trade. A multi-VAT regime promotes arbitrage and cross border trade which hurts the state governments and legal business infrastructure in receiving states.

There are several proposals under consideration by the government concerning regulations of tobacco sector. One such proposal relates to increase in size of graphic health warnings to cover 85% of the surface area of both sides of the pack as compared to the current requirement of covering 40% of the area of one side of the pack. This was originally mandated to be effective from 1st April, 2015, but is currently being examined by the Parliament Committee on Subordinate Legislation and therefore its implementation stands deferred. Others relate to amendments to COTPA to regulate in-shop and on-shop displays. It is also rumoured that the government is contemplating ban on sale of loose cigarettes.

Your Company, however, remains committed to regulatory adherence as a responsible corporate entity. Our endeavour is to seek harmony between legal compliance and efficient realizations from the business.

SEGMENTWISE PERFORMANCE IN 2014-2015

Cigarettes

The domestic cigarette industry continues to reel under pressure of increased indirect taxes with volumes declining by over 9% in 2014-15. Though your Company has witnessed decline in volume, it still was able to register a growth of 4.2% in terms of operating revenue from Rs. 3263 crore in previous year to Rs. 3400 crore. We have been able to increase volume in the 64 mm segment despite aggressive competitive moves, but kept a balanced mix of the lower margin 64 mm and the higher margin 69 mm segments.

Despite the challenging scenario faced by it, your Company is aiming for steady growth through balanced brand portfolio, consumer engagement programs, quicker response to environmental changes and data-driven decision making process. Multiple cross-functional integrated projects are currently underway towards making our brands consumer centric in the market place to gain market share.

In view of the pricing pressure on consumers, your Company has already enhanced its focus on more economical price points to regain volume growth. We are offering increasingly superior products at multiple price points which are affordable to various sections of society. Our effort will be to improve consumer satisfaction with our brands through quality and innovation, using the latest techniques in consumer research, R&D and manufacturing excellence.

Tea

Domestic tea business remained subdued during the year with income lower at Rs. 102 crore against Rs.116 crore last year. Efforts were made towards premiumization of brand portfolio, leading to value contribution of premium brands to total turnover growing from thirteen per cent last year to twenty one per cent this year. The Company is proud of its foray into the prestigious Canteen Stores Department (CSD), an organization under the aegis of the Ministry of Defense, catering to India's Armed Forces. To provide quality products to the discerning consumers, the Company has installed a new state-of-the-art blending drum at its Kolkata factory. In order to grow the business and stay ahead of the curve in the coming years, your Company is focusing on contemporary formats and value added teas and is hopeful of better performance during the current year.

Chewing Products

Your Company suffered a setback in its foray into chewing business during the year despite investing significant time and money to develop the business. The Company is following a consumer centric approach to gain deeper understanding of consumer behaviour and his unfulfilled needs. Introduction of larger SKUs and expansion of geographical footprint are some other measures planned by the Company to drive growth.

The company has opened new markets across categories and added value to the business by putting greater thrust in building brand saliency and thereby equity across the globe. The cigarettes and cut tobacco business now cover a wide footprint across continents. The Company has successfully collaborated with partners in Latin America, UAE and Nepal by placing dedicated resources in these markets.

As part of the growth strategy, the branch office in Dubai is now being converted into a wholly-owned subsidiary named 'Godfrey Phillips Middle East'. The same will be fully operational very soon and is expected to help the company expand its operations further across the globe. Work is on for launching our cigarette brands in UAE and Qatar markets soon. Your company has also made inroads with the cigarette brand "Jaisalmer" into the India duty free cigarettes sales with presence in the Delhi duty free at the Delhi International Airport.

The regional hubs in Dubai and Singapore is a step in the direction to be closer to our customers, build greater consumer confidence and long term relationships translating into sustainable business.

Leaf tobacco exports have done exceptionally well registering a growth of 42% over last year. Our Competitive pricing resulted into higher business from all regions including Greece, South Africa, Bulgaria, Brazil, Taiwan and Egypt. Our Customer base is expanding to include new destinations like Zimbabwe, Jordan, Korea, France, Portugal, Serbia, Switzerland, Lithuania. We are participating in all tobacco fairs and exhibitions for new contracts in pursuit of new opportunities in times to come. Also, we are participating in the tenders floated by the Tobacco monopolies overseas.

Tea exports suffered a de-growth of sixteen per cent, owing to the sharp fall in prices of competing Kenyan teas. However, this decline was in line with the overall industry decline of seventeen per cent.

Your company has opened a new market with the launch of own packaged premium tea brand 'Symphony' in Oman. We are confident of gaining a market share of 4% there by end of this fiscal year with a presence in over 1500 outlets. Further, we have plans to launch our own brand in UAE and Central Asia during this fiscal year.

Your company launched 'Raag Gold' Pan Masala and 'Raagaa Gold' Zarda in Nepal, with Mahanayak Rajesh Hamal as the brand ambassador. The product has been well appreciated in Nepal and expected to gain 5% market share by end of this fiscal year.

Also, the Company has a number of pursuits lined up for doing business in Australia and Dubai and also exploring partnerships in Bangladesh to take its brands to a global platform.

Retail

Company's foray into retail business through 24x7 convenience stores is making slow but steady progress. New business models are currently under evaluation with the help of Japanese consultants and we hope to scale greater heights in times to come.

HUMAN RESOURCE DEVELOPMENT

Your Company strongly believes in consistently taking steps towards talent management, leadership development and employee engagement. Your Company has taken firm steps towards fostering a performance driven culture through integration of organizational goals, aligning of business and functional expectations and pivoting performance conversations based on past and projected outputs.

A robust Talent Management initiative called 'Spotlight' has been initiated to identify and develop future leaders through their involvement in multi-faceted business projects significant to your Company's growth. In order to provide state of the art experience to new employees and ensuring their smooth integration into business environment and organizational culture, a new joiner experience program named 'Inspirit' has been initiated. Annual health check-up for all employees continued this year also, in quest to make your Company a healthy organization.

CORPORATE DEVELOPMENT

Corporate Development team remains pivotal in executing the growth strategy of your Company. The Corporate Development team is involved in the business monitoring process to ensure all initiatives and projects are aligned to their objectives, plays a key role in the annual budgeting and long term planning exercise, undertakes strategic projects with a long term growth impact and regularly scans the external environment including regulatory volatility, competitive landscape and the global tobacco industry in order to assess their implications on your Company.

INFORMATION TECHNOLOGY (IT)

Your Company is continuously making investment in Information Technology to improve operational efficiency and enhance productivity. It is aiming to leverage IT in its selling and distribution processes in order to drive improvement in sales system efficiencies and converting sales information into actionable data points. IT team has implemented enterprise mobile solution to capture real time data for leaf tobacco procurement and also helping in crop development activity.

Your Company is keenly monitoring developments in the digital space and looking for suitable opportunity to participate in its evolution to enhance its business landscape in times to come.

TREASURY OPERATIONS

Your Company continues to enjoy the highest rating of 'CRISIL A1+' for Short Term Debt Programme, 'CRISIL AA+/Stable' for Long Term Loan, 'CRISIL AA+/Stable' for fund based Credit Limit and 'CRISIL A1 +' for non-fund based. With these ratings in place, your Company is able to raise funds at most competitive terms.

Guided by the policy of safe, liquid and tax efficient returns, the Company has been deploying its long term surplus funds primarily in debt oriented schemes of reputed mutual funds. Also, the Company continued to park its temporary surpluses in liquid schemes of various mutual funds.

During the year ended March 31, 2015, the Company registered operating revenue of Rs. 4453 crore as against Rs. 41 93 crore during corresponding previous financial year, a growth of almost 6.2%. The profit after tax was higher at Rs. 183.08 crore against Rs. 170.64 crore last year.

The Union Budget 2015 has yet again increased the excise duty on cigarette which works out to around 15% on weighted average volume base of your Company and this is apart from some State Governments hiking VAT rates. The trend of steep increase in taxation on cigarette as prevalent over the last several years is likely to continue.

SUB-DIVISION OF SHARES

Pursuant to the approval of the Shareholders obtained at last Annual General Meeting held on 23rd September, 2014, each equity share of nominal face value of Rs.10/- (Rupees Ten) each was sub-divided into 5 (Five) equity shares of face value of Rs.2/- (Rupees Two) each with effect from 1st December, 2014.

DIVIDEND

Your Directors are pleased to recommend the same dividend as last year of 400% i.e. Rs. 8/- per equity share of face value of Rs. 2/- each.The proposed dividend (including tax thereon) will absorb Rs. 5006.29 lacs.

DEPOSITS

Your Company has not accepted any deposits, covered under Chapter V of the Companies Act, 2013 and hence no details pursuant to Rules 8(v) and 8(vi) of the Companies (Accounts) Rules, 2014 are reported.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 as on 31st March, 2015 is attached as 'Annexure - 1' to this Report.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on 31st March, 2015, your Company had six subsidiaries and three associate companies. The basic details of these companies form part of the extract of Annual Return given in 'Annexure-1'.

Form AOC-1containing the salient features of financial statements of the Company's subsidiaries and associates is attached as 'Annexure - 2'. The audited financial statements of these entities will be available for inspection during business hours at the Registered Office of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Accounting Standard 21 - Consolidated Financial Statements, Group Accounts form part of this Annual Report. The Group Accounts have been prepared on the basis of audited financial statements received from the subsidiary and associate companies, as approved by their respective Boards.

INTERNAL CONTROL SYSTEMS

Your Company has a robust system of internal controls commensurate with the size of the Company and the nature of its business, which ensures that transactions are recorded, authorised and reported correctly apart from safeguarding its assets against loss from wastage, unauthorised use and disposition.

The internal control systems are supplemented by well documented policies, guidelines and procedures, an extensive programme of internal audit by a firm of chartered accountants and management reviews.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

CORPORATE SOCIAL RESPONSIBILITY

As a long-standing business, led by a promoter family with philanthropy ingrained in them, your Company has always strived to be a responsible corporate citizen. As a successful cigarette manufacturing company, we feel an even greater obligation to take our social responsibility efforts further to cover a wide spectrum of social issues.

In its endeavour to benefit co-communities of the Company, the project Amodini is focussing on improvement of quality of lives of contractual women labourers engaged in leaf tobacco grading in Ongole, Andhra Pradesh.This initiative has not just made women financially aware with thrift and credit, but also supported them in becoming economically independent through vocational training and skill development and has been able to promote gender equality.

Another large project for conflict ridden women was initiated in Kashmir, a major market of the Company. Already equipped with traditional skills in Kashmiri handicraft, these women are being provided technical inputs on the aspects of marketing, design and financial management to ensure a sufficient and consistent income for sustainable livelihood.

Our commitment to be responsible to the environment from which we extract resources is reflected in our Good Agricultural Practices (GAP) initiative with farmers. And to minimise the impact of our business on the environment, we have ISO 14001:2004 (Environment Management System) certification for our manufacturing plants and use methods that have been proven to be environmentally safe.

Rabale factory was bestowed with 'Greentech Environment Gold' award for outstanding achievement in Environment Management, 'Super Achiever' award for outstanding achievement in Safety Management and also 'Silver' award in IRIM Global Manufacturing Competitiveness.

The Company has constituted Corporate Social Responsibility (CSR) Committee of the Board in accordance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The brief outline of the CSR policy, overview of the activities undertaken with amounts spent thereon during the year and composition of the Committee have been disclosed in 'Annexure - 3'.

DIRECTORS

Mr. Samir Kumar Modi (DIN 00029554) and Mr. R. Ramamurthy (DIN 00030463) are liable to retire by rotation in accordance with the provisions of Section 152 of the Companies Act, 2013 at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Mr. Lalit Kumar Modi vacated his office as the Director of the Company with effect from 28th May, 2015 by virtue of the provisions of Section 167 (1) (b) of the Companies Act, 2013.

Mr. Atul Kumar Gupta (DIN 01734070) was appointed as Additional Director w.e.f. 20th June, 2015 and holds office upto the date of the ensuing Annual General Meeting. The Company has received notice pursuant to Section 1 60 of the Companies Act, 201 3 from one of its members proposing his candidature for appointment as a Director.

PERFORMANCE EVALUATION OF THE BOARD, ETC.

The details pertaining to the manner in which evaluation of the Board, its Committees and individual Directors has been carried out, forms part of Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

Mr. K.K. Modi, President & Managing Director, Mr. Samir Kumar Modi, Executive Director, Mr. R. Ramamurthy, Whole-time Director, Mr. Sunil Agrawal, Chief Financial Officer and Mr. Sanjay Gupta, Company Secretary of the Company are deemed to be Key Managerial Personnel of the Company as per the provisions of Companies Act, 201 3 and rules made thereunder. All of these officials were already in the office prior to commencement of the Companies Act, 2013.

BOARD MEETINGS

The details of the meetings of the Board held during the year, forms part of the Corporate Governance Report.

AUDIT COMMITTEE

The composition, functions and details of the meetings of the Audit Committee held during the year, forms part of the Corporate Governance Report.

RISK MANAGEMENT

Your Company considers that risk is an integral part of its business and therefore, it takes proper steps to manage all risks in a proactive and efficient manner. The Company management periodically assesses risks in the internal and external environment and incorporates suitable risk treatment processes in its strategy, and business and operating plans. The details of practices being followed by the Company in this regard, forms part of the Corporate Governance Report.

There are no risks which, in the opinion of the Board, threaten the very existence of your Company. However, some of the challenges faced by it have been dealt with under Management Discussion and Analysis which forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 (the 'Act'), the Directors, to the best of their knowledge confirm that:

(i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) appropriate accounting policies have been applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Annual Accounts have been prepared on a going concern basis;

(v) the internal financial controls to be followed by the Company have been laid down and such internal financial controls are adequate and are operating effectively; and

(vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

The above statements were noted by the Audit Committee at its meeting held on July 31, 2015.

RELATED PARTY TRANSACTIONS

Form AOC-2 containing particulars of contracts or arrangements entered into by the Company with related parties referred in Section 188(1) of the Companies Act, 2013 are attached as 'Annexure -4'.

The details of related party disclosures form part of the notes to the financial statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered by the provisions of Section 1 86 of the Companies Act, 2013 are given in the notes to the financial statements.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The details of Whistle Blower Policy/Vigil Mechanism forms part of the Corporate Governance Report.

REMUNERATION AND NOMINATION POLICY

The details of remuneration and nomination policy for the Directors forms part of the Corporate Governance Report.

The remuneration policy for other senior management employees including key managerial personnel aims at attracting, retaining and motivating high calibre talent and ensures equity, fairness and consistency in rewarding the employees. The remuneration to management grade employees involves a blend of fixed and variable component with performance forming the core. The components of total remuneration vary for different employee grades and are governed by industry practices, qualifications and experience of the employee, responsibilities handled by him, his potentials etc.

CORPORATE GOVERNANCE

The Company is committed to maximise the value for its stakeholders by adopting the principles of good Corporate Governance in line with the provisions of law and in particular those stipulated in the Listing Agreement with the Stock Exchanges. Its objective and that of its management and employees is to manufacture and market the Company's products in a way so as to create value that can be sustained over the long term for consumers, shareholders, employees, business partners and the national economy in general.

Certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in clause 49 of the Listing Agreement with the Stock Exchanges, is enclosed.

Certificate from Mr. K.K. Modi, Managing Director as the Chief Executive Officer (CEO) and Mr. Sunil Agrawal, Executive Vice President - Finance as the Chief Financial Officer (CFO) in relation to the financial statements for the year along with declaration by the CEO regarding compliance with the code of business conduct of the Company by the directors and the members of the senior management team of the Company during the year, were submitted to and taken note of by the Board.

STATUTORY AUDITOR

M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 015125N), were appointed as the Statutory Auditor of your Company at the last Annual General Meeting held on 23rd September, 2014 for a term of three years. However, as per the provisions of Section 1 39 of the Companies Act, 201 3, their appointment is required to be ratified by the Shareholders at every Annual General Meeting.

Auditors' Report on the financial statements of the Company forms part of the Annual Report and doesn't contain any qualification, reservation, adverse remark or disclaimer.

COST AUDIT

M/s. Chandra Wadhwa & Co., Cost Accountants (Firm Registration No.00239), have been appointed as the Cost Auditor of the Company for the financial year 2015-1 6 to audit the cost accounting records for 'Tea' business, at a fee of Rs. 2.50 lacs plus applicable taxes and out of pocket expenses, subject to ratification by the Shareholders at the ensuing Annual General Meeting.

SECRETARIAL AUDIT

M/s. Chandrasekaran Associates, Practicing Company Secretaries, have been appointed as the Secretarial Auditor of the Company.

The Secretarial Audit Report for the year under review is attached as 'Annexure - 5' and the observation of the Secretarial Auditor with regard to absence of one out of two Independent Directors at the Audit Committee Meetings held on 28th May, 2014 and 9th November, 2014, has been addressed in the para 3(ii) of the Corporate Governance Report for the year ended 31st March, 2015.

Except for one observation as mentioned above, the Secretarial Audit Report doesn't contain any qualification, reservation, adverse remark or disclaimer.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant and material order was passed by the Regulators/Courts that could impact the going concern status of the Company and its future operations.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as 'Annexure -6'.

Pursuant to the provisions of Section 136(1) of the Act and as advised, the statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be available for inspection at the Registered Office of the Company during working hours and Members interested in obtaining a copy of the same may write to the Company Secretary and the same will be furnished on request. Hence, the Annual Report is being sent to all the Members of the Company excluding the aforesaid information.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars prescribed under Section 143(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are attached as 'Annexure -7'.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy on prevention, prohibition and redressal of sexual harassment of women at work place in line with the requirements of the above Act.

Under the said policy, an Internal Complaints Committee (ICC) has been set up to redress complaints received relating to sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, one complaint was filed with the Company and the same was investigated by the ICC and resolved as per the provisions of the Act.

THE FUTURE

Your Company has the requisite infrastructure, best in class technology, vast distribution network and talented pool of human resources to drive growth in various business and product categories both in domestic and international markets. Your Directors are confident that the Company will continue to create value for its shareholders in times to come.

ACKNOWLEDGEMENT

Your Directors wish to place on record their sincere appreciation to the Government authorities, Company's bankers, customers, vendors, investors and all other stakeholders for their continued support during the year. Your Directors are also pleased to record their appreciation for the dedicated services of employees at all levels of operations in the Company.

Respectfully submitted on behalf of the Board

R.A. SHAH

CHAIRMAN

 PLACE : New Delhi

Dated : July 31, 2015

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