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Marico

BSE: 531642|NSE: MARICO|ISIN: INE196A01026|SECTOR: Personal Care
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Directors Report Year End : Mar '19    Mar 17

To the Members,

The Board of Directors (“Board”) are pleased to present the Thirty First Annual Report of Marico Limited (“Marico” or “the Company” or “your Company”), for the financial year ended March 31, 2019 (“the year under review” or “the year” or “FY19”).

In compliance with the applicable provisions of Companies Act, 2013, (including any statutory modification(s) or re-enactment(s) thereof, for time being in force) (“the Act”) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the SEBI Regulations”), this report covers the financial results and other developments during the financial year April 1, 2018 to March 31, 2019 and upto the date of the Board meeting held on May 6, 2019 to approve this report, in respect of Marico and Marico Consolidated comprising Marico, its subsidiaries and associate companies. The consolidated entity has been referred to as “Marico Group” or “Your Group” or “the Group” in this report.

FINANCIAL RESULTS - AN OVERVIEW

(Rs. in Crore)

Particulars

Year ended March 31, 2019

Year ended March 31, 2018

Consolidated Summary for the Group

Revenue from Operations

7,334

6,333

Profit before Tax

1,263

1,117

Profit after Tax

1,135

827

Marico Limited - Revenue from Operations

5,971

5,181

Profit before Tax

1,187

954

Less: Provision for Tax for the current year

55

236

Profit after Tax for the current year

1,132

718

Other Comprehensive Income for the current year

(1)

(1)

Add: Surplus brought forward

2,348

2,266

Profit available for appropriation

3,480

2,984

Appropriations: Distribution to shareholders

613

549

Tax on dividend

89

87

702

636

Surplus carried forward

2,777

2,348

REVIEW OF OPERATIONS

During FY19, Marico posted revenue from operations of INRS. 7,334 Crores, a growth of 16% over the previous year. Volume growth for the year was 8%. The value growth was led by price increases taken in core portfolios of the domestic business to counter significant input cost push and favorable forex impact on translation of overseas revenues. The business delivered an operating margin of 17.5% and recurring bottom line of INRS. 930 Crores (excluding the impact of the tax adjustments for earlier years), a growth of 14% over the last year. The reported bottom line was INRS. 1,118 Crores.

Marico India, the domestic FMCG business, achieved a turnover of INRS. 5,756 Crores in FY19, a growth of 16% over the last year. Volume growth for the year was 8%, in line with the medium term aspiration. The value growth was led by price hikes taken in core portfolios in response to rising input costs. The operating margin (before corporate allocations) for the India business was at 19.6% in FY19. Profitability for the year was subdued by gross margin contraction, which was only partly contained by the price hikes taken in respective portfolios.

During the year, Marico International, the International FMCG business, posted a turnover of INRS. 1,578 Crores, a growth of 16% over the last year. The business reported a 9% constant currency growth (volume growth of 8%) during the year. The operating margin (before corporate allocations) for the International business was at 19.1% in FY19, a sustained structural shift over the last few years from levels of below 10%.

There are no material changes and commitments affecting the financial position of your Company, which have occurred between the end of the FY19 and the date of this report.

Further, there has been no change in the nature of business of the Company.

RESERVES

There is no amount proposed to be transferred to the Reserves.

DIVIDEND

Your Company’s wealth distribution philosophy aims at sharing its prosperity with its shareholders, through a formal earmarking/ disbursement of profits to its shareholders. The Dividend Distribution Policy (“DD Policy”) adopted by your Company is available on the Company’s website which can be accessed using the link https://marico.com/investorspdf/ Dividend Distribution Policy.pdf. The Policy also forms part of the Corporate Governance Report.

Based on the principles enunciated in the DD Policy, your Company’s distribution to equity shareholders during FY19 comprised the following:

- First Interim Dividend of 200% on the equity base of RS.129.09 Crores aggregating to RS. 258.17 Crores declared by your Board of Directors on November 1, 2018 and

- Second Interim Dividend of 275% on the equity base of RS.129.09 Crores aggregating to RS.354.99 Crores declared by your Board of Directors on February 5, 2019.

The total equity dividend for FY19 (including dividend distribution tax) aggregated to R702.62 Crores. Thus, dividend pay-out ratio was 76% of the consolidated profit after tax as compared to 78% in the previous year.

CHANGES IN SHARE CAPITAL

During FY19, there was no change in the paid up share capital of the Company.

SUBSIDIARIES AND ASSOCIATE COMPANIES

A list of bodies corporate which are subsidiaries/associates/ joint ventures of your Company is provided as part of the notes to Consolidated Financial Statements. During the year under review, the Company entered into Shareholders’ Agreement and Share Subscription Agreement with Revolutionary Fitness Private Limited (“Revofit”) and acquired 22.46% of its equity stake. Consequently, Revofit became an associate company of Marico.

The Company incorporated the following subsidiaries during the year under review:

a. A non-profit company limited by guarantee in India named ‘Parachute Kalpavriksha Foundation’ to undertake the Company’s CSR initiatives towards community and ecological sustenance and

b. A private limited company named ‘Marico (Lanka) Private Limited’ in Sri Lanka to strengthen the Company’s business in that country.

A separate statement containing the salient features of the financial statements of all subsidiaries and associate companies/ joint ventures of your Company (in Form AOC -1) forms part of this report.

The financial statements of the subsidiary companies and related information are uploaded on the website of your Company and 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 and Sundays up to the date of the 31st Annual General Meeting (“31st AGM”), as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office Address.

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 https://marico.com/investorspdf/Policy for Determining Material subsidiaries.pdf As per this Policy, your Company did not have any material subsidiary as on March 31, 2019. However, based on financials of FY 19, Marico Bangladesh Limited has been identified as material subsidiary in FY 2019-20.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of the loans, guarantees and investments covered under Section 186 of the Act, form part of the notes to the standalone financial statement of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed Management Discussion and Analysis forms an integral part of this Report and, inter-alia, gives an update on the following matters:

- Macro-Economic Indicators & FMCG Industry

-Opportunities and threats

-Risks and concerns

-Internal control systems and their adequacy

-Discussion on financial and operational performance

-Outlook

-Segment-wise performance

-Human capital Initiative outlook

-Details of significant changes in key financial ratios, etc.

-Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

I. Re-appointment of Mr. Rajeev Bakshi, Mr. B. S. Nagesh, Ms. Hema Ravichandar and Mr. Nikhil Khattau as Additional Directors (Independent) of the Company.

The tenure of Mr. Rajeev Bakshi (DIN: 00044621), Mr. B. S. Nagesh (DIN: 00027595), Ms. Hema Ravichandar (DIN:00032929)andM r. Nikhil Khattau(DIN:00017880), Independent Directors was due to expire on March 31, 2019. The Board of Directors at its Meeting held on March 12, 2019, approved the re-appointment of the said Directors as Additional Directors (Independent) to hold office as Independent Directors for a tenure as mentioned below, subject to the approval of the shareholders by a Special Resolution at the ensuing 31st AGM of the Company. Accordingly, the matters with respect to their re-appointment are proposed in the Notice of the 31st AGM. Brief profile of each of the said Director and other related information is appended in the Corporate Governance Report.

Sr.

No.

Names of the Independent Director

No. of year(s) re-appointed for

Tenure

1.

Mr. Rajeev Bakshi

1

From April 1, 2019 to March 31, 2020

2.

Mr. B.S. Nagesh

3

From April 1, 2019 to March 31, 2022

3.

Ms. Hema Ravichandar

5

From April 1, 2019 to March 31, 2024

4.

Mr. Nikhil Khattau

5

From April 1, 2019 to March 31, 2024

II. Re-appointment of Mr. Saugata Gupta as the Managing Director of the Company

As the tenure of Mr. Saugata Gupta, Managing Director & Chief Executive Officer was due to expire on March 31, 2019, the Board of Directors at their meeting held on March 12, 2019, re-appointed him for another term of 5 years with effect from April 1, 2019, subject to the approval of the Shareholders. Accordingly, the matter with respect to the re-appointment of Mr. Saugata Gupta is proposed in the Notice of the 31st AGM. A brief profile of Mr. Saugata Gupta and other related information is appended in the Corporate Governance Report.

III. Director retiring by rotation

In accordance with the provisions of Section 152 of the Act read with Rules made thereunder and the Articles of Association of the Company, Mr. Harsh Mariwala (DIN: 00210342) is liable to retire by rotation at the AGM and being eligible, has offered himself for re-appointment. Accordingly, the appointment of Mr. Harsh Mariwala is being placed for the approval of the Members at the 31st AGM. A brief profile of Mr. Harsh Mariwala and other related information is appended in the Corporate Governance Report.

IV. Declaration by Independent Directors

The Company has received declaration from each of its Independent Directors confirming that they satisfy the criteria of independence as prescribed under the provisions of the Act and the SEBI Regulations.

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164(2) of the Companies Act, 2013 and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014.

V. Key Managerial Personnel

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

Mr. Saugata Gupta was re-appointed by the Board, subject to the approval of the shareholders, as the Managing Director & CEO of the Company for another term of5 consecutive years with effect from April 1,2019.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Act, the Directors of your Company, to the best of their knowledge and based on the information and explanations received from the Company confirm that:

a. in the preparation of the annual financial statement for the financial year ended March 31, 2019, the applicable accounting standards have been followed and there are no material departures from the same;

b. 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, 2019 and of the profit of your Company for the said period;

c. 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;

d. the annual accounts have been prepared on a ‘going concern’ basis;

e. proper internal financial controls to be followed by the Company were laid down and such internal financial controls are adequate and were operating effectively and

f. proper systems to ensure compliance with the provisions of all applicable laws were devised and that such systems were adequate and operating effectively.

PERFORMANCE EVALUATION

In accordance with the relevant provisions of the Act read with the corresponding Rules framed thereunder, the SEBI Regulations, evaluation of the performance of the individual Directors, Chairman of the Board, the Board as a whole and its individual statutory Committees was carried out for the year under review. The manner in which the evaluation was carried out and the outcome of the evaluation are explained in the Corporate Governance Report.

BUSINESS RESPONSIBILITY REPORT & SUSTAINABILITY REPORT

The current financial year marks an important milestone in the Company’s corporate reporting journey as it is transitioning towards Integrated Reporting, which focuses on the imperatives of how the Company creates value over the short, medium and long term for all its stakeholders. The Company’s maiden Integrated Report for the period 1 April 2018 to 31 March 2019 has been prepared as per the framework developed by International Integrated Reporting Council (IIRC).

Your Company strives to create value for all stakeholders whilst growing responsibly and sustainably. Accordingly, your Company has aligned its sustainability efforts towards reducing environmental footprint and increasing positive social impact. Consequently, your Company has taken ambitious targets in relation to increasing the number of farmer beneficiaries, reducing energy intensity, reducing GHG emission intensity, achieving water stewardship and responsible sourcing.

During the year under review, the Company has subsumed the sustainability disclosures in the Integrated Report, which has been exhibited in line with the Global Reporting Initiative (GRI) Sustainability Reporting Standards (SRS) core guidelines. The Company has also presented the Business Responsibility Report (BRR) as per the requirements of Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 describing the environmental, social and governance initiatives taken by the Company. The Integrated Report of the Company for the financial year 2018-19 can be accessed on its website using this link https://marico.com/india/investors/documentation.

AUDITORS & AUDITORS REPORT

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Act, the Members at the 29th Annual General Meeting held on August 1, 2017 had approved the appointment of M/s. B S R & Co. LLP, Chartered Accountants, for a term of five years, to hold office till the conclusion of the 34th Annual General Meeting of the Company. The requirement for the annual ratification of the appointment of the Statutory Auditors by Shareholders at every AGM has been omitted pursuant to the Companies (Amendment) Act, 2017 notified on May 7, 2018 and accordingly the same is not placed for ratification.

The Statutory Auditors have confirmed their eligibility for acting as the Statutory Auditors of the Company for the financial year 2019-20.

The Auditor’s Report for the year ended March 31, 2019 on the financial statements of the Company forms part of Annual Report. There is no qualification, reservation or adverse remark or disclaimer in the said Auditor’s Report. During the year under review, the Auditors have not reported any fraud under Section 143 (12) of the Act and therefore no detail are required to be disclosed under Section 134(3)(ca) of the Act.

COST AUDITORS

In terms of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost accounting records and have them audited every year. The Board at its meeting held on May 6, 2019, based on the recommendation of the Audit Committee, approved the appointment of M/s. Ashwin Solanki & Associates, Cost Accountants, as the Cost Auditors of the Company to conduct audit of the cost records of the Company for the financial year ending March 31, 2020, at a fee of Rs. 9.5 lacs plus applicable taxes and out of pocket expenses subject to the ratification of the said fees by the Members at the ensuing 31st AGM. Accordingly, the matter relating to ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2020 is placed at the 31st AGM. The Company has received a written consent and certificate of eligibility from M/s. Ashwin Solanki & Associates.

During the year under review, the Cost Auditor had not reported any fraud under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, at its meeting held on May 6, 2019, based on the recommendation of the Audit Committee, approved the appointment of Dr. K. R. Chandratre, Practicing Company Secretary (Certificate of Practice No. 5144) as the Secretarial Auditor to conduct audit of the secretarial records of the Company for the financial year ending March 31, 2020. The Company has received consent from Dr. K. R. Chandratre to act as such.

The Secretarial Audit Report for FY19 is enclosed as “Annexure A” to this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Secretarial Auditor had not reported any fraud under Section 143(12) of the Act and therefore no details are required to be disclosed under Section 134 (3)(ca) of the Act.

RISK MANAGEMENT

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:

-Periodic assessment and prioritization of risks that affect the business of your Company;

-Development and deployment of risk mitigation plans to reduce the vulnerability to the prioritized risks;

-Focus on both the results and efforts required to mitigate the risks;

-Defined review and monitoring mechanism wherein the functional teams, the top management and the Board review the progress of the mitigation plans;

-Embedding of the Risk Management processes in significant decisions such as large capital expenditures, mergers, acquisitions and corporate restructuring;

-Wherever, applicable and feasible, defining the risk appetite and install adequate internal controls to ensure that the limits are adhered to.

The Risk Management Committee (“RMC”) constituted by the Board 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 Board may deem fit. The detailed terms of reference and the composition of RMC are set out in the Corporate Governance Report.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Internal Financial Controls are an integrated part of the risk management process which in turn is a part of Corporate Governance addressing financial and financial reporting risks. The Internal Financial Controls have been documented, embedded in the business processes. 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. Assurances on the effectiveness of Internal Financial Controls is obtained through management reviews, self-assessment, continuous monitoring by functional heads as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

On a voluntary basis, your Company’s largest overseas subsidiary, Marico Bangladesh Limited (MBL) has also adopted this framework and progress is reviewed by MBL’s Audit Committee and its Board of Directors, which exhibits Marico’s commitment to good governance at a group level.

RELATED PARTY TRANSACTIONS

All transactions with related parties are placed before the Audit Committee for its approval. An omnibus approval from the Audit Committee is obtained for the related party transactions which are repetitive in nature. In case of transactions which are unforeseen or 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 approvals so granted on a quarterly basis.

All transactions with related parties entered into during FY19 were at arm’s length basis and in the ordinary course of business and in accordance with the provisions of the Act and the Rules made thereunder, the SEBI Regulations and the Company’s Policy on Related Party Transactions. There were no transactions which were material (considering the materiality thresholds prescribed under the Act and Regulation 23 of the SEBI Regulations). Accordingly, no disclosure is made in respect of the Related Party Transactions in the Form AOC-2 in terms of Section 134 of the Act and Rules framed thereunder.

The Policy on Related Party Transactions is uploaded on the Company’s website and can be accessed using the link https://marico.com/investorspdf/Policv on Related Party Transactions.pdf

NOMINATION AND REMUNERATION COMMITTEE AND COMPANY’S POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY, EVALUATION AND SUCCESSION

Your Company has in place the Nomination and Remuneration Committee (“formerly known as Corporate Governance Committee”) which performs the functions as mandated under the provisions of Section 178 of the Act and SEBI Regulations. The composition of the Committee is detailed in the Corporate Governance Report.

In terms of the applicable provisions of the Act, read with the Rules framed thereunder and the SEBI Regulations, your Board has in place a Policy for appointment, removal and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) and also on Board Diversity, Succession Planning and Evaluation of Directors (“NR Policy”). The remuneration paid to Directors, KMP and SMP of the Company are as per the terms laid down in the NR Policy of the Company. The Managing Director & CEO of your Company does not receive remuneration or commission from any of the subsidiaries of your Company.

The salient features of this Policy are outlined in the Corporate Governance Report and the Policy can be accessed using this link - https://marico.com/mvestorspdf/PoNcy on Nomination, Remuneration and Evaluation.pdf

MARICO EMPLOYEE BENEFIT SCHEME/PLAN

- Marico Employee Stock Option Plan, 2016

The Members at the 28th Annual General Meeting held on August 5, 2016, had approved the Marico Employee Stock Option Plan, 2016 (“Marico ESOP 2016” or “the Plan”) for issuance of the employee stock options (“Options”) to the eligible employees of the Company including the Managing Director & CEO and the eligible employees of its subsidiaries, whether in India or outside India. Marico ESOP 2016 aims to promote desired behavior among employees for meeting the Company’s long term objectives and enable retention of employees for desired objectives and duration, through a customized approach.

The Plan envisages to grant options, not exceeding in aggregate, 0.6% of the issued equity share capital of the Company as on August 5, 2016 (“the Commencement Date”) to the eligible employees of the Company and its subsidiaries and not exceeding 0.15 % of the issued equity share capital of the Company as on the commencement date to any individual employee.

The Nomination and Remuneration Committee is entrusted with the responsibility of administering the Plan and the Scheme(s) notified thereunder.

As on March 31, 2019, an aggregate of 3,059,590 Options were outstanding which constitute about 0.24% of the issued equity share capital of the Company.

- Marico Employees Stock Appreciation Rights Plan, 2011

The Company had adopted Marico Stock Appreciation Rights Plan, 2011 (‘STAR Plan’) in the year 2011, for the welfare of its employees and those of its subsidiaries. Under the Plan, various schemes have been notified from time to time for conferring cash incentive benefit to the eligible employees through grant of stock appreciation rights (STARs). The Nomination and Remuneration Committee acts as the Compensation Committee for the purpose of the administration of the Plan. The Committee notifies various Schemes for granting 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 Income Tax. The STAR Plan involves secondary market acquisition of the Equity 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 Equity Shares, subject to statutory ceilings.

As at March 31, 2019 an aggregate of 980,940 STARs were outstanding which constitute about 0.076% of the current paid up equity share capital of the Company.

STATUTORY INFORMATION ON

ESOS, STAR AND TRUST

Disclosure on ESOS, STAR and Trust in terms of Regulation 14 of the SEBI (Share Based Employee Benefits) Regulation, 2014 and SEBI Circular dated June 16, 2015 is made available on the website of the Company and can be accessed using the link: https://marico.com/india/investors/documentation. Further, the Company has complied with the applicable accounting standards in this regard. Also, during the year under review, your Company has not given loan to any of its employees for purchase of shares of the Company.

All schemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014 as applicable, and the resolutions passed by the Members at the General Meetings approving such employee benefit Schemes/Plans. Further, a certificate to that effect has been obtained from the Statutory Auditors of the Company i.e. M/s. B S R & Co. LLP.

DISCLOSURES

MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES

Seven (7) meetings of the Board of Directors were held during the financial year under review. The details of the meetings of the Board and its Committees held during the year under review are stated in the Corporate Governance Report.

AUDIT COMMITTEE

The Audit Committee comprises Independent Directors namely Mr. Nikhil Khattau (Chairman), Mr. B. S. Nagesh, Ms. Hema Ravichandar and Non-Executive (Non-Independent) Director, Mr. Rajen Mariwala. Powers and role of the Audit Committee are included in the Corporate Governance Report. During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The ratio of remuneration of each Director to the median employee’s remuneration as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2016 is disclosed in “Annexure B” to this report.

The statement containing particulars of remuneration of employees as required under Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is available on the website of the Company . In terms of Section 136(1) of the Act, the Annual Report is being sent to the Members excluding the aforesaid annexure. Any Member desirous of obtaining a copy of the said annexure may write to the Company Secretary at the Registered Office Address.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 of the SEBI Regulations, a separate report on Corporate Governance along with the certificate from the Statutory Auditors on its compliance is annexed to this report as “Annexure C”.

VIGIL MECHANISM

Your Company has a robust vigil mechanism in the form of Unified Code of Conduct (“CoC”) which enables the stakeholders to report concerns about unethical/inappropriate behaviour, actual or suspected fraud or violation of the Code. Considering the changes, in the internal as well as external environment, the Board has revised and adopted the amended CoC on May 6, 2019. The CoC can be accessed on its website using the link http://marico.com/investorspdf/Marico CoC.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 Company from the day they join the organization 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.

Your Company has a policy for the prevention of sexual harassment which is embedded in the CoC. 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 Committee (“IC”) to deal with complaints relating to sexual harassment at workplace. During the FY19, this Committee has received and resolved one complaint on sexual harassment.

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 Code of Conduct Committee (“CCC”) is constituted.

All new employees go through a detailed personal orientation on CoC. Further, all employees have to mandatorily complete the online learning cum certification course on CoC. Your Company seeks an affirmation on compliance of CoC on an annual basis from all the employees and on a quarterly basis from the employees at senior level. Additionally, separate trainings (classroom/online) on Anti-Sexual Harassment Policy & Insider Trading Rules are conducted to educate the employees on the said Policy/Rules. The education and sensitization is further strengthened through periodic email communications and focused group discussions with the employees to ensure the CoC is followed in spirit and failures are minimized.

The Board and the Audit Committee are informed periodically on the matters reported to CCC and the status of resolution of such cases.

The Company affirms that no person has been denied access to the Audit Committee.

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 Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is enclosed as “Annexure D” to this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The composition of the CSR Committee is disclosed in the Corporate Governance Report.

A brief outline of the CSR Philosophy, salient features of the CSR Policy of the Company and changes therein, the CSR initiatives undertaken during the financial year 2018-19 together with progress thereon and the report on CSR activities as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014, are set out in “Annexure E” to this Report and the CSR policy can be accessed through the link https://marico.com/investorspdf/CSR Policy (1).pdf.

SECRETARIAL STANDARDS

The Company has complied with all the applicable provisions of Secretarial Standard - 1 and Secretarial Standard - 2 issued by Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs of India.

DEPOSITS

There were no outstanding deposits within the meaning of Sections 73 and 74 of the Act, read together with the Companies (Acceptance of Deposits) Rules, 2014, at the end of the financial year 2018-19 or the previous financial year. Your Company did not accept any deposits during FY19.

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.

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 Act, read with the Companies (Management and Administration) Rules, 2014, are enclosed as “Annexure F” to this report.

Pursuant to Section 134 (3) (a) of the Act, annual return will be placed on the website of the Company and can be accessed using the link: htttps://marico.com/india/investors/ documentation.

COST RECORDS

The maintenance of cost records as specified under Section 148 of the Act is applicable to the Company and accordingly all the cost records are made and maintained by the Company and audited by the cost auditors.

ACKNOWLEDGEMENT

Your Board takes this opportunity to thank Company’s employees for their dedicated service and firm commitment to the goals &vision of the Company. Your Board also wishes to place on record its sincere appreciation for the wholehearted support received from shareholders, distributors, third party manufacturers, 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.

Harsh Mariwala

Place : Mumbai Chairman

Date : May 6, 2019 DIN: 00210342

Source : Dion Global Solutions Limited
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