globus spirits ltd share price Directors report

<dhhead>Board’s Report</dhhead>

To the Members

Your Board of Directors are pleased to present the Twenty-ninth Annual Report and Audited Accounts for the year ended 31^st March, 2022.

 

FINANCIAL PERFORMANCE

(?. In Lakhs)

Particulars	Current Year (2021-22)	Previous Year (2020-21)
Total Revenue	235046.16	167869.01
Total Expenses	206922.13	147640.56
Profit before Exceptional items & Tax	28124.03	20228.45
Less: Provision for taxation including Deferred tax	9398.60	5829.03
Profit/ (Loss) after tax	18725.43	14399.42
Basic EPS	65.01	50
Diluted EPS	65.01	50

 

PERFORMANCE OVERVIEW

During the year under review the company reported a growth of 40% in revenue as compare to previous year and PBT has been increased by 78.96crores from the previous year and also PAT has been increased by 43.26crores from the previous year. The Basic and Diluted EPS of the Company is 65.01/- as compared to 50.00/- in the previous year.

 

THE YEAR IN PERSPECTIVE

The Fiscal 2022 was characterised as a year that saw a resurgence of demand, albeit tempered due to two waves of Covid that saw some disruption. Despite this, your company has been able to deliver a robust performance. In Fiscal 2022,

your Company reported a growth of 28% in net revenues to reach 1,579 crore and 28% growth in EBITDA to reach 335 Crores. Despite higher input costs and impact of plant shutdown, EBITDA margin remained stable at 21.2%, led by higher share of Value Plus segment and better realizations. Net profit grew 30% from 144 crores in FY20-21 to 187 Crores in the year under review.

The share of consumer business was 41% in Fiscal 2022. The Company continued to perform well in its key markets like Rajasthan with higher growth in the Value Plus (Medium Liquor) segment; the Haryana market improved in the past fiscal on the back of Government’s support to eradicate the illicit liquor market, and the West Bengal market continues to offer significant headroom for growth. Our market share improved in Rajasthan to almost 32% and in Haryana 10% during the year under review.

Your Company has been working on building a strong portfolio of premium segment brands and currently has 5 brands spread across 8 states. There are several launches of new products in select markets and existing products in new markets that is being planned in the forthcoming year.

 

DIVIDEND

Your Directors are pleased to recommend dividend of 3/- ,

i.e. 30% per equity share of the company for the year 2021-22.

 

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

Dr. Bhaskar Roy, Executive Director of the company, retire by rotation and being eligible offer himself for re-appointment. The Board recommends his re-appointment.

Mr. Manik Lal Dutta, have resigned from the Board of Directors of the company w.e.f. 31^st July 2022. The Directors place on record his appreciation of the valuable contribution made by him.

 

SUBSIDIARY COMPANIES

Your Company’s subsidiary, M/s Unibev Limited has been merged with its parent and holding company vide order dated 09.09.2021 passed by Hon’ble NCLT, Principal Bench, New Delhi.

 

CORPORATE GOVERNANCE

As per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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-II 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. The policy on Corporate Social Responsibility as approved by the Board of Directors is available on the website of the Company www. globusspirits.com.

 

NOMINATION AND REMUNERATION POLICY

The Nomination & Remuneration Policy as approved by the Board on recommendation of the Nomination & Remuneration Committee is available on website of the Company www. globusspirits.com.

 

AUDITORS

The Company, in terms of Section 139 (1) and (2) of the Act 2013, have appointed M/s Deloitte Haskins & Sells, Firm Regn No. 015125N, Chartered Accountants, having their office at 7^th Floor, Building 10, DLF Cyber City Complex, DLF City Phase-II, Gurgaon-122002, Haryana as statutory auditors for 04^th term of their remaining four years vide AGM dated 24^th September 2021.

 

AUDITORS’ REPORT

The notes on accounts appearing in the schedule and referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments or explanations. There are no adverse remarks/qualifications in the auditor’s report.

 

COST AUDIT

The board subject to the approval of the Central Government, if required, has appointed M/s JSN & Co., Cost Accountants, having Firm’s registration no. 455, its office at 462/1, 1^st Floor, Old MB Road, Lado Sarai, New Delhi-110030, as Cost Auditor for conducting the Cost Audit for the financial year 2022-23. 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 herewith & forms part of the Annual Report.

 

PARTICULARS OF EMPLOYEES

Statement pursuant to u/s 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the particulars of top ten employees are as follows :-

 

Particulars of Top Ten Employees:

Name	Designation	Nature of Employment	Age	Date of Joining	Qualifications & Experience	Previous Employment	%age of Equity shares held	Gross Remuneration
Ajay Kumar Swarup	Managing Director	Permanent	63	16-Jan-1993	PGDBM (38 years of experience)	M/s SVP Industries Ltd.	6.68%	26250012
Shekhar Swarup	Joint Managing Director	Permanent	36	27-Oct-2008	Degree in Business & Management (15 years of experience)	N.A.	2.66%	22500000
Paramjit Singh Gill	CEO- Consumer Division	Permanent	61	01-Nov-2020	M.Phil - Decision making, knowledge management & values (32 years of experience)	M/s Allied Blenders & Distillers Ltd.	0.00%	20000000
Bhaskar Roy	Executive Director & COO	Permanent	60	04-Oct-2005	Mcom, FCA, PHD (33 years of experience)	M/s Saraya Industries Limited	0.00%	8817996
R.K. Malik	President (Operation- North)	Permanent	65	15/Aug/2000	MBA (44 years of experience)	M/s Golden Bottling	0.00%	6000000
Manik Lal Dutta	Executive Director	Permanent	76	01-Aug-2006	M.Tech, PGDBM (48 years of experience)	M/s United Spirits Limited	0.00%	5873472
Jasbeer Singh	Vice President - Exports	Permanent	64	01-Oct-2014	BSc., MBA(over 21 years of experience)	N.A.	0.00%	5168900
Amitabh Singh	Vice President	Permanent	55	16-Apr-2013	B.Sc. Engineering (31 years of experience)	M/s Radico Khaitan Limited	0.00%	5600000
Pankaj Tyagi	Vice President	Permanent	48	14-May-2015	B.Sc. Engineering (24 years of experience)	M/s Brahamaputra Biochem Pvt. Ltd.	0.00%	5168900

 

Notes:

1. The percentage of equity share holding mentioned as above is as on 31^st March 2022.

2. None of the Directors or employees are inter related to each other except Sh. Ajay K. Swarup, Managing Director of the company is the father of Sh. Shekhar Swarup, Joint Managing Director of the company.

 

EMPLOYEE STOCK OPTION SCHEME

The Employee Stock Option Scheme was approved by the shareholders in the Annual General Meeting held on September 24, 2021. Total 2,87,992 Options were approved under the Employee Stock Option Scheme. However no option was granted during the Financial Year. AS per the scheme option granted can be vested after minimum period of one year. However during the period neither Option granted nor vested. The Employee Stock Option Scheme containing all the relevant terms & conditions can be access at https://www.globusspirits.com/investors_corporate_ governance.php. This is to further inform to the shareholders that i) The Shares arising out of Exercise of Vested Options shall not be subject to any lock-in period from the date of allotment of such Shares under ESOP 2021 and ii) The shares issued under ESOP are not subject to buyback scheme.

 

ANNUAL RETURN

Annual Return of the Company in Form MGT-7, in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, is available on Company’s website www.globusspirits.com and can be accessed through link https://www.globusspirits.com/ investors_corporate_governance.php.

 

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 I 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 2021-22, 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 31^st March, 2022 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 2021-22 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.

 

NUMBER OF MEETINGS OF THE BOARD

4 meetings of the Board of Directors of the Company were held during the year. For detail of the meetings, please refer to the Corporate Governance Report, which forms part of this Report.

 

AUDIT COMMITTEE

Composition and other details pertaining to Audit Committee has been disclosed in the Corporate Governance Report.

 

INDEPENDENT DIRECTORS’ DECLARATION

Mr. Santosh Kumar Bishwal, Mr. Vivek Gupta, Mr. Kunal Agarwal, Mr. Sunil Chadha and Ms. Ruchika Bansal, who are Independent Directors, have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, there has been no change in the circumstances which may affect their status as independent director during the year.

 

POLICY OF DIRECTORS’ APPOINTMENT AND REMUNERATION

Company’s policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered in Corporate Governance Report which forms part of this Report.

 

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT

The Directors and members of Senior Management have affirmed compliance with the Code of Conduct for Directors and Senior Management of the Company. A declaration to this effect has been signed by the Managing Director and forms part of the Annual Report.

 

CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a comprehensive ‘Code of Conduct to Regulate, Monitor and Report of Trading by Insiders’and also a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information’ relating to the Company, under the provisions of the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Board of Directors have approved and adopted the ‘Code of Conduct to Regulate, Monitor and Report of Trading by Insiders’ and a ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information’.

 

RELATIONSHIP BETWEEN DIRECTORS INTER-SE

None of the Directors are related to each other within the meaning of the term "relative" as per Section 2(77) of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 except Sh. Shekhar Swarup (Joint Managing Director) is the son of Sh. Ajay Kumar Swarup (Managing Director) of the Company.

 

ANNUAL PERFORMANCE EVALUATION

The company has a mechanism for annual performance evaluation of every Individual Directors and the Board as a whole as well as its various committees.

 

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

There have been no loans, guarantees and investments under Section 186 of the Act during the financial year 2021-22.

 

SECRETARIAL STANDARDS

All the provisions of Secretarial standards has been complied by the Company during Financial Year 2021-22.

 

TRANSACTIONS WITH RELATED PARTIES

The Company has entered into contract / arrangements with the related parties in the ordinary course of business and on arm’s length basis. The details are mentioned in the notes to accounts of the financial statements. Policy on materiality of Related Party Transactions can be accessed on the company’s website www. globusspirits.com.

 

INTERNAL CONTROL

The information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

 

RISK MANAGEMENT

The Company has a Risk Management Committee & also it has in place a Risk Management Policy to deal with various risks arising in the course of business. The key responsibilities of

Risk Management Committee are namely, Identification of risks, Implementing and monitoring the risk management plan for the Company and reframe the risk management plan and policy as it may deem fit, lay down procedures to inform Board members about the risk assessment and minimization procedures, Monitoring and reviewing of the risk management plan from time to time and activities as may be required to be done under the Companies Act 2013 or SEBI listing Regulations.

 

VIGIL MECHANISM

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns.

 

DIVIDEND DISTRIBUTION POLICY

As required under Regulation 43A of the Listing Regulations, the Company has formulated a Dividend Distribution Policy. This policy can be viewed on the Company’s website at www. globusspirits.com.

 

PARTICULARS OF REMUNERATION

The information required under section 197 of the Companies Act, 2013 and the rules made there under, in respect of employees of the Company, is follows :-

(a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company

Executive Directors	Ratio to the Median Remuneration*
Mr. Ajay Kumar Swarup	105.32
Mr. Shekhar Swarup	90.28
Mr. Manik Lal Dutta	35.38
Dr. Bhaskar Roy	23.57
Non-Executive Directors (Sitting Fees only)
Sh. Santosh Kumar Bishwal	1.32
Sh. Vivek Gupta	1.32
Sh. Kunal Agarwal	0.54
Sh. Sunil Chadha	0.72
Ms. Ruchika Bansal	0.30

 

* for the purpose of comparison 12 months salary has been considered for all the employees even though any employee has worked for less than 12 months

(b) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year

Name of the Person	% increase in Remuneration
Mr. Ajay Kumar Swarup (Managing Director)	20%
Mr. Shekhar Swarup (Joint Managing Director)	20%
Mr. Manik Lal Dutta (Executive Director)	8%
Dr. Bhaskar Roy (Executive Director)	8%
Sh. Santosh Kumar Pattanayak (Company Secretary)	12%

 

(c) The percentage increase in the median remuneration of employees in the financial year

8% (Since there is lot of variation in the no. of employees during the current year as compare to previous year, comparison of the exact median remuneration may not be accurate.)

(d) The number of permanent employees on the rolls of Company as on 31/03/2022: 746

 

(e) The average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration

The average increase in salaries of employees other than managerial personnel in 2021-22 was 9% approximately. Percentage increase in the managerial remuneration for the year was also approximately 13.6%.

 

(f) The affirmation that the remuneration is as per the remuneration policy of the Company

The Company’s remuneration policy is driven by the success and performance of the individual employees and the Company. Through its compensation package, the Company endeavors to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals measured through the annual appraisal process. The Company affirms remuneration is as per the remuneration policy of the Company.

 

PECUNIARY RELATIONSHIP OR TRANSACTIONS OF NON-EXECUTIVE DIRECTORS

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company.

 

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)	(Ajay K. Swarup)
	Executive Director & COO	Managing Director
Place : New Delhi	(Santosh Kumar Pattanayak)	(Shekhar Swarup)
Date : August 09, 2022	Company Secretary	Joint Managing Director