The Board of Directors (''Board'') is pleased to present the Twenty
Seventh Annual Report of your Company, Marico Limited, for the year
ended March 31,2015 (''the year under review'', ''the year'' or ''FY15'').
In line with the requirements of the Companies Act, 2013 and the
Listing Agreement entered with the BSE Limited and the National Stock
Exchange of India Limited this report covers the financial results and
other developments during April 2014 to March 2015 in respect of Marico
Limited (''Marico'') and Marico Consolidated comprising Marico and its
subsidiaries in India and overseas. The consolidated entity has been
referred to as ''Marico'' or ''Group'' or ''Your Group'' in this report.
FINANCIAL RESULTS - AN OVERVIEW
Year ended March 31,
Consolidated Summary Financials for the Group
Revenue from Operations 5,732.98 4,686.52
Profit before Tax 821.65 694.58
Profit after Tax 573.45 485.38
Marico Limited - financials
Revenue from Operations 4,681.20 3,682.49
Profit before Tax 731.04 717.28
Less: Provision for Tax for the current year 185.87 140.06
Profit after Tax for the current year 545.17 577.22
Add : Surplus brought forward 1,393.63 1162.84
Profit available for Appropriation 1,938.80 1,740.06
Distribution to shareholders 161.24 257.94
Tax on dividend 13.72 9.37
Transfer to General Reserve - 57.72
Debenture Redemption Reserve 11.17 20.86
Surplus carried forward 1,753.12 1,394.17
Total 1,938.80 1,740.06
The Company proposes to transfer an amount of Rs. 25 Crore from the
Debenture Redemption Reserve to the General Reserves.
Your Company''s distribution policy has aimed at sharing its prosperity
with its shareholders, through a formal earmarking/disbursement of
profits to shareholders.
Your Company''s distribution to equity shareholders during FY15
comprised the following:
First Interim dividend of 100% on the equity base of Rs. 64.49 Crore.
Second Interim dividend of 150% on the equity base of Rs. 64.50 Crore.
The total equity dividend for FY15 (including dividend tax) aggregated
to Rs. 174.51 Crore. The overall dividend payout ratio hence is 30% as
compared to 47% during FY14. The shareholders may note that the
dividend pay-out in FY14 included a one-time silver jubilee dividend of
1 75% of the paid up equity capital of Rs. 64.49 Crore.
REVIEW OF OPERATIONS
During FY15 Marico posted revenue from operations of INR 5,733 Crore, a
growth of 22% over the previous year. The business delivered a volume
growth of 4% with an operating margin of 15.2%. The business reported
bottom line of INR 573 Crore, growth of 18% over last year.
Marico India achieved a turnover of INR 4,449 Crore in FY15, a growth
of 26% over last year. Volume growth for the year was at 6%. The
overall sales growth was bolstered by the price increases taken across
the portfolio to cover a major part of the significant input cost push.
The operating margin for the India business was healthy at 17.7% before
corporate allocations despite the hyper-inflation in commodity costs.
During the year, Marico International posted a turnover of INR 1,284
Crore, a growth of 10% over FY14 in constant currency terms. The
operating margin for the year was at 17.1% (before corporate
allocations) reflecting a structural shift based on the cost management
projects undertaken by your Company and Synergies of One Marico.
Your Company has demonstrated steady growth on both the top line and
the bottom line. Over the last 5 years, the top line has grown by 18%
and bottom line by 15% at a Compounded Annual Growth Rate.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed Management Discussion and Analysis, which inter alia, covers
the following forms part of the Annual Report.
* Industry structure and development
* Opportunities and Threats
* Risks and Concerns
* Internal control systems and their adequacy
* Discussion on financial and operational performance
* Segment-wise performance
In addition, a Review of Operations of your Company has been given in
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
Your Board of Directors during the year under review approved the
Corporate Social Responsibility (CSR) Policy for your Company pursuant
to the provisions of Section 135 of the Companies Act, 2013 read with
the Companies (Corporate Social Responsibility Policy) Rules, 2014,
based on the recommendations of the CSR Committee. The CSR Policy is
available on the website of the Company at
The composition of the CSR Committee is disclosed in the Corporate
A brief outline of the CSR Policy of the Company, the CSR initiatives
undertaken during the financial year 2014-15 together with the progress
thereon and the Annual Report on CSR activities as required by the
Companies (Corporate Social Responsibility Policy) Rules, 2014, are set
out in Annexure A to this Report.
The list of companies which are subsidiaries of your Company is
provided in the notes to Consolidated Financial Statements. During the
period under review, there were no companies which have become
subsidiaries or ceased to be subsidiaries of your Company.
A separate statement containing salient features of the financial
statements of all subsidiaries of your Company forms part of the
Consolidated Financial Statements in compliance with Section 129 and
other applicable provisions, if any, of the Companies Act, 2013. The
statement reflects the performance and financial position of each of
The financial statements of the subsidiary companies and related
information shall be uploaded on the website of your Company which can
be accessed using the link
http://marico.com/india/investors/documentation and the same are
available for inspection by the Members at the Registered Office of
your Company during business hours on all working days except Saturdays
up to the date of the Annual General Meeting, as required under Section
136 of the Companies Act, 2013. Any Member desirous of obtaining a copy
of the said financial statements may write to the Company Secretary at
the Registered Office address of your Company.
Your Company has approved a policy for determining material
subsidiaries and the same is uploaded on the Company''s website which
can be accessed using the link
RELATED PARTY TRANSACTIONS
All transactions with related parties entered into during the financial
year 2014-15 were at arm''s length basis and in the ordinary course of
business and in accordance with the provisions of the Companies Act,
2013 and the Rules made thereunder (the Act). There were no
transactions which were material (considering the materiality
thresholds prescribed under the Act). Accordingly, no disclosure is
made in respect of the Related Party Transactions in the prescribed
Form AOC-2 in terms of Section 134 of the Act.
All transactions with related parties are placed before the Audit
Committee for approval. An omnibus approval of the Audit Committee is
obtained for the related party transactions which are repetitive in
nature. In case of transactions which are unforeseen and in respect of
which complete details are not available, the Audit Committee grants an
omnibus approval to enter into such unforeseen transactions provided
the transaction value does not exceed Rs. 1 Crore (per transaction in a
financial year). The Audit Committee reviews all transactions entered
into pursuant to the omnibus approval(s) so granted on a quarterly
During the year under review, your Board approved a policy on Related
Party Transactions as required under Clause 49 of the Listing
Agreement. The policy is uploaded on the Company''s website and can be
accessed using the link http://marico.com/investorspdf/
There were no outstanding deposits within the meaning of Sections 73
and 74 of the Companies Act, 2013 read with the Companies (Acceptance
of Deposits) Rules, 2014, at the end of the financial year 2014-15 or
the previous financial year. Your Company did not accept any such
deposit during the financial year 2014-15.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
notes to the Standalone Financial Statements of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
To the best of their knowledge and information and based on the
information and explanations provided to them by the Company, your
Directors make the following statement in terms of Section 134(3)(c) of
the Companies Act, 2013 (the Act):
* that in the preparation of the annual financial statements for the
year ended March 31,2015, the applicable accounting standards have been
followed and there are no material departures from the same;
* 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 your Company as at March 31,2015 and of the profit and loss of your
Company for the said period;
* that proper and sufficient care has been taken 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;
* that the annual accounts have been prepared on a ''going concern''
* that proper internal financial controls to be followed by the Company
were laid down and such internal financial controls are adequate and
were operating effectively;
* that proper systems to ensure compliance with the provisions of all
applicable laws were devised and that such systems were adequate and
Your Board of Directors had re-designated Mr. Harsh Mariwala as
Non-Executive Chairman and appointed Mr. Saugata Gupta, the Chief
Executive Officer of the Company as an Additional Director and Managing
Director, of your Company, both with effect from April 1,2014.
Thereafter, the Members at the 26th Annual General Meeting held on July
30, 2014 approved the appointment and terms of remuneration of Mr.
Saugata Gupta as the Managing Director & CEO for a period of 5 years
with effect from April 1,2014.
At the said Annual General Meeting, the Members also appointed Mr.
Rajeev Bakshi, Mr. Atul Choksey, Mr. Nikhil Khattau, Mr. Anand Kripalu,
Ms. Hema Ravichandar and Mr. B. S. Nagesh, as Independent Directors of
the Company, each for a term of five years beginning April 1,2014.
There is no other change in the composition of the Board.
During the financial year under review, declarations were received from
all Independent Directors of the Company that they satisfy the
criteria of Independence as defined under Clause 49 of the Listing
Agreement and Section 149(6) of the Companies Act, 2013 read with the
Schedules and Rules made thereunder.
DIRECTORS RETIRING BY ROTATION
In accordance with the provisions of the Companies Act, 2013 and in
terms of the Memorandum and Articles of Association of the Company, Mr.
Harsh Mariwala is liable to retire by rotation at the 27th Annual
General Meeting (AGM) and being eligible has offered himself for
re-appointment. His re-appointment is being placed for your approval at
the AGM. The brief profile of Mr. Mariwala and other related
information has been detailed in the Corporate Governance Report. Your
Directors recommend his re-appointment as the Non-Executive Director of
KEY MANAGERIAL PERSONNEL
As stated above, Mr. Saugata Gupta was appointed as the Managing
Director & CEO of your Company with effect from April 1,2014. Further,
Mr. Vivek Karve was appointed as the Chief Financial Officer of the
Company with effect from April 1,2014. Ms. Hemangi Ghag continues to be
the Company Secretary of the Company.
The details of the meetings of the Board of Directors of the Company
held during the year under review are given in the Corporate Governance
The composition of the Audit Committee of the Board of Directors is
stated in the Corporate Governance Report.
COMPANY''S POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY,
EVALUATION AND SUCCESSION
In terms of the applicable provisions of the Companies Act, 2013 read
with the Rules made thereunder and Clause 49 of the Listing Agreement
entered into by the Company with Stock Exchanges, your Board has
formulated a Policy on appointment, removal and remuneration of
Directors, Key Managerial Personnel and Senior Management Personnel and
also on Board Diversity, Succession Planning and Evaluation of
Directors. Salient features of the Policy are stated in the Corporate
Your Board is committed to assessing its own performance in order to
identify its strengths and areas in which it may improve its
functioning. Towards this end the Corporate Governance Committee of the
Board (which functions as the Nomination and Remuneration Committee of
the Company for the purpose of the Companies Act, 2013) established the
criteria and processes for evaluation of performance of individual
Directors, Chairman of the Board, the Board as a whole and its
individual statutory Committees. The appointment/re-appointment/
continuation of Directors are subject to the outcome of the annual
evaluation process. The manner in which the evaluation has been carried
out has been explained in the Corporate Governance Report.
DISCLOSURE RELATING TO REMUNERATION
The information required pursuant to Section 197(12) read with Rule
5(1) of The Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 is disclosed in Annexure B'' to this report.
The Managing Director and CEO of your Company does not receive
remuneration from any of the subsidiaries of your Company.
The statement containing particulars of remuneration of employees as
required under Section 197(12) of the Companies Act, 2013 read with
Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is given in an annexure to the
Annual Report. In terms of Section 136(1) of the Companies Act, 2013,
the Annual Report is being sent to the Members excluding the aforesaid
annexure. However, this annexure shall be made available on the website
of the Company 21 days prior to the date of the Annual General Meeting
(AGM). The information is also available for inspection by the
Members at the Registered Office of the Company during business hours
on all working days except Saturdays up to the date of the AGM. Any
Member desirous of obtaining a copy of the said annexure may write to
the Company Secretary at the Registered Office address of your Company.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
Your Company''s approach on Corporate Governance has been detailed out
in the Corporate Governance Report. Your Company has deployed the
principles enunciated therein to ensure adequacy of Internal Financial
Controls with reference to the financial statements. Your Board has
also reviewed the internal processes, systems and the internal
financial controls and the Directors'' Responsibility Statement contains
a confirmation as regards adequacy of the internal financial controls.
Your Company has a robust vigil mechanism in the form of Unified Code
of Conduct which enables employees to report concerns about unethical
behaviour, actual or suspected fraud or violation of the Code. The
Company''s Unified Code of Conduct can be accessed on its website using
the link http://marico.com/investorspdf/CoC_book_09-04-14.pdf.
This mechanism also provides for adequate safeguards against
victimization of employees who avail of the mechanism and also provide
for direct access to the Chairman of the Audit Committee in exceptional
cases. The guidelines are meant for all Members of the Organization
from the day they join and are designed to ensure that they may raise
any specific concern on integrity, value adherence without fear of
being punished for raising that concern. The guidelines also cover our
associates who partner us in our organizational objectives and
customers for whom we exist.
To encourage employees to report any concerns and to maintain
anonymity, the Company has provided a toll free helpline number and a
website, wherein the grievances / concerns can reach the Company. For
administration and governance of the Code, a Committee called the Code
of Conduct Committee (CCC) is constituted. The CCC has the following
* HR Committee - with an objective to appoint investigation team for
investigation of HR related concerns / complaints.
* IT Committee - with an objective of implementing the IT policy and
resolution of IT related concerns / complaints under the Code.
* Whistle Blower Committee - with an objective to appoint an
investigation team for investigation of whistle blower complaints.
* Prevention of Sexual Harassment Committee (PoSH Committee) — with
an objective to ensure a harassment free work environment including but
not limited to appointment of investigation team for investigation of
sexual harassment concerns/complaints.
The Board and its Audit Committee are informed periodically on the
matters reported to CCC and the status of resolution of such cases.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As stated earlier your Company has a policy for the prevention of
sexual harassment which is embedded in the CCC. As per the requirement
of the Sexual Harassment of Women at Workplace (Prevention, Prohibition
& Redressal) Act, 2013 and Rules made thereunder, your Company has
constituted an Internal Complaints Committees (ICC). During the
financial year 2014-15, the ICC received 2 complaints on sexual
harassment and the same were disposed of in accordance with applicable
laws and the policy of your Company.
For your Company, Risk Management is an integral and important
component of Corporate Governance. Your Company believes that a robust
Risk Management ensures adequate controls and monitoring mechanisms for
a smooth and efficient running of the business. A risk-aware
organization is better equipped to maximize the shareholder value.
The key cornerstones of your Company''s Risk Management Framework are:
1. Periodic assessment and prioritization of risks that affect the
business of your Company;
2. Development and deployment of risk mitigation plans to reduce the
vulnerability to the prioritized risks;
3. Focus on both the results and efforts required to mitigate the
4. Defined review and monitoring mechanism wherein the functional
teams, the top management and the Board review the progress of the
5. Embedding of the Risk Management processes in significant decisions
such as large capital expenditures, mergers, acquisitions and corporate
6. Wherever, applicable and feasible, defining the risk appetite and
install adequate internal controls to ensure that the limits are
In terms of Clause 49 of the Listing Agreement with Stock Exchanges,
your Board of Directors during the year under review constituted a Risk
Management Committee (RMC). The RMC assists the Board in monitoring
and reviewing the risk management plan, implementation of the risk
management framework of the Company and such other functions as the
Board may deem fit. The detailed terms of reference and the composition
of RMC are set out in the Corporate Governance Report.
Details of significant and material orders passed by the regulators
There were no significant/material orders passed by the regulators or
courts or tribunals impacting the going concern status of your Company
and its operations in future.
ESOP /Stock Appreciation Rights Schemes
Marico Employee Stock Option Scheme 2007
Your Company had formulated and implemented an Employee Stock Options
Scheme (the Scheme) in 2007 for grant of Employee Stock Options (ESOS)
to certain employees of the Company and its subsidiaries. The Corporate
Governance Committee (''CGC'') of the Board of Directors of your Company
is entrusted with the responsibility of administering the Scheme and in
pursuance thereof, the CGC has granted 11,376,300 stock options (as at
March 31,2015) comprising about 1.76% of the current paid up equity
capital of the Company as at March 31,2015. An aggregate of 1,03,600
options were outstanding as on March 31,2015.
None of the Non-Executive Directors (including Independent Directors)
have received stock options in pursuance of the above Scheme.
Likewise, no employee has been granted stock options, during the year
equal to or exceeding 0.5% of the issued capital (excluding outstanding
warrants and conversions) of the Company at the time of grant.
Marico Employee Stock Option Scheme 2014
The Members of the Company at its Extra Ordinary General Meeting held
on March 25, 2014 approved the Marico Employee Stock Option Scheme 2014
(the Scheme) for the benefit of the Chief Executive Officer of the
Company (now Managinig Director & Chief Executive Officer). The
objective of this Scheme is to give a wealth building dimension to the
remuneration structure of the Managinig Director & Chief Executive
Officer. Further, it also aimed at promoting desired behaviour for
meeting organization''s long term objectives and to enable retention
through a customized approach.
The CGC is responsible for administrating the Scheme in pursuance of
which on April 1, 2014 it granted 3,00,000 stock options comprising
about 0.05% of the current paid up equity capital of the Company as at
March 31,2015 to the Managing Director & CEO.
Marico MD CEO Employee Stock Option Plan 2014
At the 26th Annual General Meeting (AGM) of the Company held on July
30, 2014, the Members had approved the Marico MD CEO Employee Stock
Option Plan 2014 (MD CEO ESOP Plan 2014 or the Plan) for the
benefit of Managing Director & Chief Executive Officer (MD & CEO) of
the Company. The objective of this Plan is to enable grant of stock
options on an annual basis to the MD & CEO as a part of his
remuneration through one or more Scheme(s) notified under the Plan. The
number of equity shares that may arise on a cumulative basis upon
exercise of stock options under this Plan shall not exceed in aggregate
0.5% of the total paid up equity share capital of the Company.
The CGC is entrusted with the responsibility of administering the Plan
and the Schemes notified thereunder. Accordingly, the CGC on January 5,
2015 notified Scheme I under the Marico MD CEO ESOP Plan 2014 for grant
of 46,600 stock options to the Managing Director & CEO under the said
Scheme. These stock options constitute 0.007% of the paid up equity
share capital of the Company as on the date of this Report.
Statutory information on ESOS
Additional information on ESOS in terms of section 62(1 )(b) of the
Companies Act, 2013 read with Rule 12(9) of the Companies (Share
Capital and Debentures) Rules, 2014 is enclosed as ''Annexure C'' and
forms part of this report. Further, the Company has complied with the
applicable accounting standards in this regard.
The Statutory Auditors of the Company i.e. M/s. Price Waterhouse, have
certified that implementation of all the above ESOP Schemes/ Plan is in
accordance with the erstwhile SEBI ESOP Guidelines, 1999, the SEBI
(Share Based Employees Benefits) Regulations, 2014, as applicable and
the resolutions passed by the Members at the respective General
Meetings approving the ESOP Schemes/Plan.
Marico Employees Stock Appreciation Rights Plan, 2011
Your Company had implemented a long term incentive plan namely, Marico
Stock Appreciation Rights Plan in 2011 (''STAR Plan'') for the welfare of
its employees and those of its subsidiaries. Under the STAR Plan the
Corporate Governance Committee notifies various Schemes for granting
Stock Appreciation Rights (STARs) to the eligible employees. Each STAR
is represented by one equity share of the Company. The eligible
employees are entitled to receive in cash the excess of the maturity
price over the grant price in respect of such STARs subject to
fulfillment of certain conditions and applicability of tax. The STAR
Plan involves secondary market acquisition of the shares of your
Company by an independent Trust set up by your Company for the
implementation of the STAR Plan. Your Company lends monies to the Trust
for making secondary acquisition of shares.
During the year under review, no fresh grants were made by the Company
as the SEBI (Share Based Employee Benefit) Regulations, 2014, notified
in October, 2014, require the Company to seek approval of its Members
for implementation of any stock appreciation rights scheme.
Accordingly, appropriate resolutions for seeking approval of the
Members for implementation of the STAR Plan are set out in the Notice
convening the 27th Annual General Meeting.
As at March 31,2015 an aggregate of 19,93,300 STARs were outstanding
which comprises about 0.31% of the current paid up equity share capital
of the Company.
The Members at the 26th Annual General Meeting (AGM) had approved the
appointment of M/s. Price Waterhouse as Statutory Auditors of your
Company for a period of 3 years to hold office from the conclusion of
the 26th AGM until the conclusion of the 29th AGM. In terms of section
139 of the Companies Act, 2013 such appointment is subject to the
ratification by the Members at each AGM. M/s. Price Waterhouse have
confirmed their eligibility to act as the Auditors of your Company.
Further, as required under Clause 49 of the Listing Agreement with
Stock Exchanges, the Auditors have confirmed that they hold a valid
certificate issued by the Peer Review Board of the Institute of
Chartered Accountants of India.
Accordingly, your Directors seek ratification of the appointment of the
Statutory Auditors for the financial year 2015-1 6.
M/s. Ashwin Solanki & Associates, Cost Accountants, were appointed as
the Cost Auditor for the financial year 2014-15 to conduct the audit of
the cost records of your Company. Your Directors have re-appointed M/s.
Ashwin Solanki & Associates, Cost Accountants as the Cost Auditors of
the Compnay for the financial year 2015-16 at a remuneration of
Rs.8,00,000 (plus applicable taxes) in addition to out of pocket
expenses incurred, if any, in connection with the audit. In terms of
the provisions of Section 148(3) of the Companies Act, 2013 read with
the Companies (Audit and Auditors) Rules, 2014, as amended the
remuneration payable to the Cost Auditors has to be ratified by the
Members of the Company. Accordingly, the Board seeks ratification of
the remuneration payable to the Cost Auditors for the financial years
2015-1 6 at the 27th Annual General Meeting.
Pursuant to Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, your Company appointed Dr. K.R. Chandratre, Practicing Company
Secretary, to conduct the Secretarial Audit of your Company. The
Secretarial Audit Report is enclosed as ''Annexure D'' to this report.
The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
STATUTORY AUDITORS'' REPORT
The Auditors'' Report for the year ended March 31,2015 does not contain
any qualification, reservation or adverse remark. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with Stock Exchanges, a
separate section on corporate governance practices followed by the
Company together with a certificate from the Company''s Statutory
Auditors confirming compliance thereto is annexed to this report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 is enclosed as ''Annexure E'' to this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form
MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013
read with the Companies (Management and Administration) Rules, 2014,
are enclosed as ''Annexure F'' to this report.
Your Board takes this opportunity to thank all its employees for their
dedicated service and firm commitment to the goals of the Company. Your
Board also wishes to place on record its sincere appreciation for the
wholehearted support received from shareholders, distributors, bankers
and all other business associates, and from the neighborhood
communities of the various Marico locations. We look forward to
continued support of all these partners in progress.
On behalf of the Board of Directors
Place : Mumbai Harsh Mariwala
Date : April 30, 2015 Chairman