ANNUAL REPORT
2016-17
Our
PEOPLE
Our PRIDE
ROBUST PERFORMANCE
4
HIGHER SHAREHOLDER VALUE INCREASE
23
%
Volume Growth
(Y-o-Y growth)
%
of revenue from
International Business
ROBUST BALANCE SHEET
522 47
%
Net cash surplus
on books
ROCE up from 24%
in FY 2013
37
12
RONW up from
25% in FY 2013
%
EVA (Y-o-Y growth)
with a 5 year CAGR
of 23%
0.13 AA
Debt/Equity Ratio
64
increase in
shareholder value
during the year
Dividend Pay-out
Ratio increased from
19% in FY 2013
+
52
24.3
%
Gross margins
309 bps expansion
for the year
16.5 19.5
%
International
business operating
margins in FY 2017
12
%
Long-term Credit Rating
upgraded to Positive from
AA+ Stable
PAT (Y-o-Y growth)
with a 5 year CAGR
of 18%
4
8
4
Volume Growth (Y-o-Y
growth) in Parachute
Coconut Oil (Coconut Oil
Market Share down –
from 59% LY to 58%)
Our People Our Pride
%
Volume Growth (Y-o-Y
growth) in the Saffola
Edible Oil Category
(Market Share Up –
from 63% LY to 66%)
%
India business
operating margins
in FY 2017
STRONG PORTFOLIO
%
%
HIGHER PROFITABILITY
Cr
%
21
%
%
Volume Growth (Y-o-Y
growth) in the Value
Added Hair Oils Segment
(Market Share Up –
from 32% LY to 33%)
%
Operating margins
208 bps expansion
for the year FY 2017
Our people make us different.
We take pride in the significant contributions that
come from the diversity of individuals and ideas.
At Marico, we are passionate about making a
measurable impact in everything we do. It is the
power of our people, our unique culture and our
innovative approach which helps us deliver enduring
results. Marico celebrates and empowers the
individuality of each of its members and their unique
strengths that have led to the success it has reached
today.
Strategic Report
Statutory Reports
2
The World of Marico
6
Marico Brands - India
8
Marico Brands - International
10 Key Performance Indicators
12 Consolidated Quarterly Financials
13 Economic Value Creation & Sustainable Wealth Creation
14 Chairman's Lettter
16 MD & CEO's Message
18 Our People. Our Pride
30 Brand Campaigns
36 Sustainable & Social Purpose
42 Board of Directors
44 Awards & Accolades
46
66
80
118
Management Discussion
& Analysis
Business Responsibility Report
Board’s Report
Corporate Governance Report
Financial Statements
141 Consolidated Financial
Statements
230 Standalone Financial
Statements
THE WORLD
OF MARICO
25+
Years of
Rich Experience
25+
PARACHUTE 1 OUT OF
is the world’s largest
EVERY 3
coconut oil brand
1 OUT OF
EVERY 10
Indians’ lives are
touched by Marico
coconuts grown in India
are used by Marico
17%
25%
16
11
topline CAGR
growth since inception
bottomline CAGR
growth since inception
manufacturing units
(9 in India and
7 in Overseas)
acquisitions
in 11 years
95%
150 Million
170 Million
4.6 Million
of our portfolio enjoys
market leadership
(No.1 or No.2)
packs sold
every month
households touched
every month
retail outlets serviced
by its nationwide
distribution network
>10,000
47%
50%
35%
population town mostly
covered by Marico’s
distribution network
of the total workforce
are millennials
of our talent in consumer
facing functions
of Technology and
Marketing are women
of our leadership talent in
consumer facing functions
of Technology and
Marketing are women
25%+
total Shareholder
Return since listing
in 1996
Our People Our Pride
countries presence across
emerging markets
of Asia & Africa
3
MARICO AT A GLANCE
About Marico
CORE VALUES
Our values form the base of the unique culture we have at
Marico. It is the guiding force behind our actions.
Boundarylessness
Seeking support and influencing others beyond the
function and organisation to achieve a better outcome/
decision without diluting one’s accountability.
Opportunity Seeking
Identifying early opportunity signals in the environment
to generate growth options.
Innovation
Experimentation and calculated risk taking to increase
success probability of radical/pioneering ideas to get
quantum results.
Strategic Report
Marico Limited is one of India’s leading consumer products companies
operating in the beauty and wellness space. Present in over 25 countries
across emerging markets of Asia and Africa, Marico has nurtured multiple
brands in the categories of hair care, skin care, edible oils, health foods, male
grooming, and fabric care. In India, Marico is used by 1 in every 3 Indian and
is available through its gamut of household brands like Parachute, Parachute
Advansed, Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, Set Wet, Mediker
and Revive. In the international market, Marico is represented by brands like
Parachute, HairCode, Fiancée, Caivil, Hercules, Black Chic, Code 10, Ingwe,
X-Men and Thuan Phat that are localised to fulfil the lifestyle needs of our
international consumers.
Marico will continue
to focus on creating
winning brands,
winning culture and
a winning talent pool
to create a virtuous
cycle of great talent
and an enabling
culture, driving
innovation driven
growth.
Transparency & Openness
Allowing diversity of opinion by listening without bias,
giving, and receiving critique, with mutual respect and
trust for the other.
Consumer Centric
Keeping consumer as the focus and a partner in
creating and delivering solutions.
Bias For Action
Preference for quick thoughtful action as opposed to
delayed action through analysis.
Excellence
Continuous improvement of performance standards and
capability building for sustained long-term success.
Global Outlook
Sensitivity and adaptability to cultural diversity and
learning from different cultures.
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
4
GEOGRAPHICAL
PRESENCE
With a presence in over 25 countries,
Marico is expanding in emerging
markets across Asia & Africa.
North Africa
& Middle East
South
Asia
South
East Asia
South and
Sub-Saharan
Africa
Marico aspires to be a leading emerging MNC with
a leadership position in two core categories of
nourishment and male grooming in its chosen
markets of Asia and Africa.
Our People Our Pride
DOMESTIC PRESENCE:
INDIA
Strategic Report
1
5
2
5
3
4
6
41
9
8
9
8
11
10
23
27
18
18
18
19
26
25
24
33
17
20
21
21
16
7
14
13
22
27
15
12
11
28
30
29
30
30
31
32
Marico reaches to almost
every Indian town with
a population of over
34 34
37
10,000
39
38
35
36
40
People
1
Jammu
3
2
11
Jaipur
Parwanoo
13
Ranchi
23
Chandigarh
15
Siliguri
25
Baddi
12
4
Zirakpur
6
Paonta Sahib
16
Sonipath
18
Ghaziabad
20
5
7
8
9
10
Silamahekhaity
NCR
14
17
19
Lucknow
21
Indore
31
Vijaywada
Factories
Paldhi
33
Gauripur
Depots
Nagpur
35
Chennai
37
Coimbatore
22
Ahmedabad
24
Jalgaon
Guwahati
26
Raipur
36
Kolkata
28
Bhiwandi
38
Jabalpur
30
Hyderabad
40
Patna
Agartala
Cuttack
27
29
Mumbai
Pune
32
34
39
41
Hubli
Bangalore
Regional Offices
Pondicherry
Redistribution Centres
Perundurai
Kanjikode
Consignment Sales Agent
Head Office
Cochin
Dehradun
MARICO LIMITED | Annual Report 2016-17
6
MARICO BRANDS
Our India business has nurtured various trusted household brands such as
Parachute, Parachute Advansed, Saffola, Hair & Care, Nihar, Nihar Naturals,
Livon, Set Wet, Mediker and Revive that are not just bought by our
consumers but also add value to their lives. Marico today touches the lives
of 1 out of every 3 Indians.
DOMESTIC BRANDS
Hair Oil
- Nihar Naturals Sarson Kesh Tel
- Nihar Naturals Shanti Amla Badam Hair Oil
- Parachute Advansed Deep Conditioning Hot Oil
- Parachute Advansed Aloe Vera Enriched Coconut Hair Oil
- Parachute Advansed Coconut Hair Oil
- Parachute Advansed Jasmine Hair Oil
- Hair & Care Fruit Oils
- Nihar Naturals Coconut Hair Oil
Coconut Oil
- Parachute Coconut Oil
- Nihar Naturals Coconut Oil
- Nihar Naturals Uttam Coconut Oil
Hair Serum
- Livon Silky Potion Hair Serum
- Hair & Care Silk n Shine Hair Serum
Our People Our Pride
Anti-Hairfall
- Livon Hair Gain Tonic
- Parachute Advansed Ayurvedic Hair Oil
- Parachute Advansed Ayurvedic Gold Hair Oil
- Parachute Advansed Scalp Therapie Hair Oil
7
Wellness
- Saffola Oils
- Saffola Aura - Olive & Flaxseed Oil
- Saffola Masala Oats
- Saffola Multigrain Flakes
Strategic Report
Male Grooming & Styling
- Parachute Advansed Men’s Hair Cream Range
- Set Wet Beard Styling Gel
- Set Wet Deodarants
- Set Wet Styling Gel
Skincare
- Parachute Advansed Body Lotion
This section covers Marico's marque brands, but is not exhaustive
MARICO LIMITED | Annual Report 2016-17
8
23% of Marico’s revenues are generated from
the international markets and the organisation
is growing its footprint across South Asia, South
East Asia, South and Sub-Saharan Africa and North
Africa & Middle East.
INTERNATIONAL BRANDS
BANGLADESH
Hair Care
- Parachute Advansed Cooling Hair Oil
- Parachute Advansed Extra Care Hair Oil
- Nihar Shanti Amla Badam Hair Oil
- Parachute Advansed Ayurvedic Gold Hair Oil
- Parachute Advansed Beliphool Hair Oil
- Parachute Advansed Enriched Hair Oil
- Hair Code Hair Dye
Skincare
- Parachute Advansed
Body Lotion
MIDDLE EAST
Hair Care
- Parachute Gold Range
Our People Our Pride
Male Grooming/Styling
- Set Wet Deodorants
- Set Wet Styling Gel
Coconut Oil
- Parachute Coconut Oil
Wellness
- Saffola Masala Oats
- Saffola Oils
MALAYSIA
Male Grooming
- Code 10
Hair Care
- Parachute Gold Range
MYANMAR
Male Grooming
- Code 10
9
Strategic Report
EGYPT
Male Grooming
- Hair Code
- Fiancee
SOUTH AFRICA
Hair Care
- Caivil
- Black Chic
Hair Care
- Silk-n-Shine
- Parachute Advansed
VIETNAM
Male Grooming
- XMen Range
Healthcare
- Ingwe
- Hercules
Food
- Thuan Phat
This section covers Marico's marque brands, but is not exhaustive
MARICO LIMITED | Annual Report 2016-17
10
KEY PERFORMANCE INDICATORS
FY 2016-17 was a successful year with decent volume and profit growth
despite the macro-environment headwinds. The consolidated top line
declined by 1% owing to price reductions in the coconut oil portfolio in India
and Bangladesh and currency devaluation in the Egypt region in H2FY17 on
the back of an underlying volume growth of 4%. The consolidated profit
after tax grew strongly by 12% compared to last year. The India business
top line, declined by 2% over last year and recorded a volume growth
of 4% for FY17, its value growth diminished owing to price reductions in
the coconut oil portfolio. The operating margin for the India business was
healthy at 24%. At the international front, the business grew by 1% in
constant currency terms while sustaining operating margins at 17%.
SALES & SERVICES
(` in Crores)
SHARE OF INTERNATIONAL
FMCG BUSINESS
(%)
FY13 4,596
FY13 22
FY14
4,687
FY14
25
FY15 5,733
FY15 22
FY16 6,024
FY16 22
FY17 5,936
FY17 23
* F
Y16 and FY17 numbers are as per IND - AS and hence not
comparable with earlier years which were as per I-GAAP
EBIDTA MARGINS
(%)
NET PROFIT
(` in Crores)
FY13 13.6
FY13 396
FY14
16.0
FY14
485
FY15 15.2
FY15 573
FY16 17.5
FY16 711
FY17 19.5
FY17 799
* F
Y16 and FY17 numbers are as per IND - AS and hence not
comparable with earlier years which were as per I-GAAP
EARNINGS PER SHARE
DEBT/EQUITY
FY13 6.1
FY13 0.4
FY14
7.5
FY14
0.5
FY15 8.9
FY15 0.2
FY16 5.5
FY16 0.2
FY17 6.2
FY17 0.1
* F
Y16 & FY17 Earnings per share has been calculated on the
post bonus number of shares
Our People Our Pride
11
Strategic Report
CASH PROFIT
(` in Crores)
RETURN ON CAPITAL
EMPLOYED
(%)
FY13 481
FY13 24
FY14
573
FY14
30
FY15 656
FY15 39
FY16 807
FY16 45
FY17 890
FY17 47
RETURN ON NET WORTH
(%)
LOAN ON BOOKS
(` in Crores)
FY13 25
FY13 872
FY14
30
FY14
680
FY15 36
FY15 428
FY16 37
FY16 333
FY17 37
FY17 241
EVA
(` in Crores)
MARKET CAPITALISATION
(` in Crores)
FY13 283
FY13 13,684
FY14
313
FY14
13,517
FY15 407
FY15 25,293
FY16 491
FY16 31,605
FY17 552
FY17 38,108
DIVIDEND PAYOUT RATIO
(%)
SURPLUS ON BOOKS
FY13 19
-470
FY13 FY14
24
-85
FY14
FY15 30
FY15 82
FY16 69
FY16 466
FY17 64
FY17 522
(` in Crores)
MARICO LIMITED | Annual Report 2016-17
12
CONSOLIDATED
QUARTERLY FINANCIALS
2016-17
Particulars
(` in Crore)
Three Month Ended
Annual
30-Jun-16
30-Sep-16
31-Dec-16
31-Mar-17
FY17
Total Revenue
1,781.8
1,467.5
1,440.0
1,344.4
6,033.2
Total Expenditure
1,380.3
1,189.8
1,144.3
1,062.7
4,776.7
Finance Charges
5.4
2.1
4.4
4.7
16.6
396.1
275.7
291.2
277.0
1,240.0
20.8
20.9
21.3
27.3
90.3
375.3
254.8
270.0
249.7
1,149.7
-
-
-
-
-
375.3
254.8
270.0
249.7
1,149.7
Gross profit after Finance Charges but before
Depreciation and Taxation
Depreciation and Amortisation
Profit before Taxation and Exceptional Item
Exceptional Item
Profit before Tax
Minority Interest and Goodwill on consolidation
4.0
3.8
2.9
2.6
13.4
Profit before Tax after minority interest &
goodwill
371.3
251.0
267.0
247.0
1,136.3
Tax Expense (net of MAT credit entitlement)
107.2
74.0
78.1
78.4
337.7
Profit after Tax
264.1
176.9
188.9
168.7
798.6
Equity Share Capital
129.0
129.0
129.0
129.0
129.0
Earning per Share - (`)
2.1
1.4
1.5
1.3
6.2
2015-16
Particulars
(` in Crore)
Three Month Ended
Annual
30-Jun-15
30-Sep-15
31-Dec-15
31-Mar-16
FY16
Total Revenue
1,781.9
1,471.0
1,546.5
1,318.4
6,117.8
Total Expenditure
1,431.9
1,224.7
1,240.4
1,076.1
4,973.1
Finance Charges
4.5
3.7
5.7
6.8
20.6
345.5
242.7
300.4
235.4
1,124.1
18.8
22.1
22.9
31.1
94.9
326.7
220.6
277.6
204.4
1,029.2
-
-
-
-
-
326.7
220.6
277.6
204.4
1,029.2
3.7
3.4
2.9
2.5
12.4
323.0
217.2
274.7
201.9
1,016.9
98.2
67.6
71.7
67.8
305.4
224.8
149.6
203.0
134.1
711.5
Equity Share Capital
64.5
64.5
129.0
129.0
129.0
Earning per Share - (`)
1.8
1.2
1.6
1.1
5.5
Gross profit after Finance Charges but before
Depreciation and Taxation
Depreciation and Amortisation
Profit before Taxation and Exceptional Item
Exceptional Item
Profit before Tax
Minority Interest and Goodwill on consolidation
Profit before Tax after minority interest &
goodwill
Tax Expense (net of MAT credit entitlement)
Profit after Tax
Our People Our Pride
ECONOMIC
VALUE-ADDED
13
a) Average Capital Employed
FY11
FY12
FY13
FY14
FY15
FY16
FY17
1,411
1,852
2,421
2,395
2,180
2,330
2,493
c) Weighted Average Cost of Capital
(%)
b) Average Debt / Total capital (%)
43.2
42.0
34.2
30.9
25.4
16.3
11.4
8.9%
8.7%
8.9%
8.7%
8.3%
10.1%
10.4%
d) Profit After Current Tax
(excluding extraordinary items)
269.1
324.8
456.7
496.6
572.0
711.5
798.6
31.8
34.1
42.7
25.0
16.3
14.5
11.7
e) Add: Interest Post Tax
300.9
358.9
499.4
521.6
588.3
726.0
810.3
g) Less: Cost of Capital
f)
Net Operating Profit After Tax
126.1
160.2
216.0
208.3
180.9
235.1
258.6
h) Economic Value-Added
174.7
198.6
283.3
313.3
407.4
490.9
551.7
SUSTAINABLE
WEALTH CREATION
Investment
Through
Shares
Value ( in `)
Indexed Value
April 1996 - Original Purchase
IPO
100
17,500
100
August 2002
Bonus (Equity 1:1)
200
-
-
September 2002
Bonus (Preference 1:1)
200
-
-
May 2004
Bonus (Equity 1:1)
400
-
-
February 2007
Share Split (10:1)
4,000
-
-
December 2015
Bonus (Equity 1:1)
8,000
-
-
4,000
17,500
100
Shares
Value ( in `)
Indexed Value
8,000
2,362,400
13,499
200
2,000
11
111,899
639
2,476,299
14,150
27%
27%
Holdings and Cost as on March 31, 2017
Return
Through
March 31, 2017
Market value
March 2004
of Bonus Preference
April 1996 - March 2017
Dividend Received*#
Redemption proceeds
shares
Gross Returns
Compound Annual Return since IPO
* Dividends are inclusive of those received on Bonus Preference Shares.
# Subject to taxes as applicable
14,150
27%
CAGR
100
1996
2017
`100 invested in
Marico in 1996 was
worth `14,150 on
March 31, 2017.
That's a CAGR of 27%.
MARICO LIMITED | Annual Report 2016-17
Strategic Report
(` in Crore)
14
CHAIRMAN’S LETTER
Dear Shareholders,
It gives me great pleasure to share with you an update on the overall performance of
your Company in 2016-17. Brand, talent and culture remain our key assets to deliver
sustainable business and earnings growth, thereby creating long-term value for our
shareholders. The year under review had a decent volume and profit growth given the
macro-environment headwinds. We were able to achieve this as a result of an effective
category choice making framework and the strategic building blocks we have put in
place - strengthening the core, creating the portfolio of the future, managing costs, and
investing in people and process capability ahead of the growth curve. I believe, these will
continue to hold us in good stead in the long run.
India has continued to
perform amidst global
turmoil and delivered
7.1%
GDP growth
for 2016-17
I strongly feel that focus will lead to depth, and
depth will lead to excellence. Mr. Saugata Gupta,
Managing Director (MD) & CEO of your Company,
continues to run the day-to-day operations of the
Company, and steer it towards its medium-term
aspiration of becoming a significant emerging
markets multinational company.
I continue to act as the Non-Executive Chairman
of the Board, mentoring and advising the MD for
your Company’s strategy and future road map,
ensuring highest levels of corporate governance
at all times. I also lead the efforts to improve
the collective functioning of the Board and am
actively involved in the Company’s Corporate
Social Responsibility (CSR) initiatives.
It was yet another difficult year for the global
economy, characterised by subdued growth
and geopolitical uncertainties. Financial Year
(FY) 2016-17 was an eventful one- with Brexit,
Donald Trump’s victory in the US Presidential
Elections, demonetisation of the Indian currency,
and results of the largest state elections in the
country. The biggest international risks to the
Indian economy include crude oil prices, traderelated tensions between major economies,
and growing protectionism. Even as the world
experiences economic turbulence and slowdown,
contributing to a general lack of cheer as far as
economic growth goes, India continues to deliver
a standout performance and grow at a rapid pace.
India has continued to perform amidst global
turmoil and delivered 7.1% GDP growth for
FY 2016-17.
In India, rural demand continued to be sluggish
in the early part of the year, on the back of two
consecutive poor monsoons. The overall market
showed signs of recovery in the latter half of
the year, but faced a temporary slowdown in
November due to demonetisation. Nonetheless,
India’s economy is in the midst of a recovery
with lower fiscal and current account deficit,
lower inflation, and benign commodity prices.
The government’s initiatives like ‘Make in India’,
Our People Our Pride
Goods and Services Tax (GST) is
one of the biggest indirect tax reforms
which India has ever witnessed.
I strongly believe that GST is a
progressive step which will transform
the fiscal architecture of modern India
with regard to matters of taxation,
and enhance the overall business
environment. Due to elimination of
cascading impact of taxes, it will
benefit the end consumers in the
form of lower prices of products.
It will provide an upward push to
consumption, which augurs well for
consumer goods companies. It will
also lead to supply chain efficiencies,
which will further unlock value for the
companies. The enactment of the GST
legislation has been a milestone reform
that will create a win-win environment
for all stakeholders with an integrated
and productive economy, and is
expected to further boost economic
growth. However, there could be
temporary transition challenges during
the cut-over.
Going beyond economic returns,
your Company believes that it is
geared to build purpose-driven
brands that offer a win-win for the
Company and society at large.
Brands and businesses are important
constituents of modern society. It is
their responsibility to be good citizens
of this society. Brands with a purpose
can help build a strong connect with
the consumer and create a sustainable
business while contributing to society.
With this balance between purpose
and consumer equity in its brands, the
Company ensures that sustainability
is coded at the centre of its core
business.
During the year, your Company
remained committed to this purpose
with various initiatives. Nihar Shanti
Amla supports the cause of education
of underprivileged children across
India. Saffolalife, a not-for-profit
initiative of Saffola, has been on a
mission to make people realise the
need and importance of heart health.
Through these various campaigns,
Marico’s brands have touched the lives
of many Indians, and built meaningful
relationships that go beyond the
transactional nature.
As an FMCG company, your
Company puts a lot of thrust on
innovation and believes that innovation
will help accelerate its growth. With
this mission, Marico Innovation
Foundation (MIF) a not-for-profit wholly
owned subsidiary of your Company
works towards fuelling the innovation
journey in the country. MIF works with
various social enterprises through
the Social Innovation Acceleration
Program (SIAP), with the objective
of providing them with customised
capacity building support. MIF also
leverages student teams from leading
management institutes to help these
social organisations with research
(primary and secondary) and critical
inputs on their businesses. The
Directors’ Report carries a detailed
update on these initiatives.
Your Company’s efforts to achieve
and sustain highest standards of
corporate governance were duly
Your Company was
recognised in Forbes
India’s Super 50
companies 2016.
recognised during the year. Your
Company was recognised in Forbes
India’s Super 50 companies 2016.
Our vision for the future is to
continue to strive hard to fulfil
Marico’s potential, and contribute
to India’s economic & social growth
story as an emerging market MNC.
We will continue to work with our
stakeholders to propel strong yet
sustainable growth. I firmly believe that
the “Business of Business is beyond
Business”, and therefore I would
like to re-affirm our commitment to
innovation and purpose-driven growth
which maximises the potential of all
stakeholders.
Finally, I would like to thank your
Company’s employees, whom we call
‘members’, and all other stakeholders
for their consistent commitment,
engagement and encouragement
in our journey. I would also express
my gratitude for your ongoing trust
and support, and on behalf of the
entire Marico team across the world,
I thank you for accompanying us on
the exciting journey ahead. We will
continuously seek and strive to do
good, act better, and do what is best
for us and society at large.
With warm regards,
Harsh Mariwala
Chairman
MARICO LIMITED | Annual Report 2016-17
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Strategic Report
“Digital India” and “Startup India” will
strengthen India’s position on the
world map. I believe that India is a
standout among emerging markets,
and the country’s growth seems
poised to return to a high-growth path.
Goods and Services Tax (GST) is one of the biggest
indirect tax reforms which India has ever witnessed.
I strongly believe that GST is a progressive step which
will transform the fiscal architecture of modern India
with regard to matters of taxation and enhance the
overall business environment. Due to elimination
of cascading impact of taxes, it will benefit the end
consumers in the form of lower prices of products. It
will provide an upward push to consumption, which
augurs well for consumer goods companies.
16
MD & CEO'S MESSAGE
Dear Shareholders,
We are pleased to inform you that we have ended yet another successful year
with satisfactory results. Despite the increasingly challenging environment, we
continue to grow our business profitably. This would not have been possible
without our people. At Marico, our members are passionate about making
a measurable impact in everything we do. It is the power of our people, our
unique culture and innovative approach, which helps us deliver enduring results.
Marico celebrates and empowers the individuality of each of its members and
their unique personalities that have led to the success we have reached today.
At Marico, we believe that only when you are empowered with freedom and
opportunity, you rise above the task at hand and take complete ownership to
make a difference.
FY2017 Overview
Your Company’s brands have been
able to stand firm in a difficult year.
The single biggest event that left
its mark on each and every sector
of the domestic economy was
demonetisation. Coming at a time
when the economy was just beginning
to look up, the Central Government’s
decision to demonetise almost 86%
of the currency notes in circulation
caused severe cash shortage in the
domestic economy, where cash is the
preferred mode of payments. This
cash shortage led to a strain on the
consumption demand and business
activity for the greater part of the third
quarter but your Company was able to
pull off a fast recovery in Quarter 4. We
firmly believe that this initiative will lead
to a long-term gain for the economy
and organised players since it will driver
greater compliance in the system.
The consolidated top line declined
by 1% due to price reductions in the
Coconut Oil portfolio, on the back of
an underlying volume growth of 4%.
The consolidated profit after tax grew
strongly by 12% compared to last year.
During the year, your Company’s
India business declined by 2% with
an underlying volume growth of 4%.
We continued to expand our franchise
faster than the category resulting
in market share gains reflecting the
strong equity of our brands. The
India business improved operating
margins to 24%, led by softer input
costs and pullback of ASP spends in
a stressed macro environment post
demonetisation in Q3 FY17.
Our People Our Pride
The International business grew
by 1% in constant currency terms,
while sustaining operating margins at
17%, which has structurally shifted
from 8-9% four years ago. The
severe macro-economic headwinds
in the Middle East & North Africa
(MENA) region have led to the muted
growth in the overall International
business this year. Excluding MENA,
international geographies grew at a
constant currency rate of 5% in FY17.
International business growth potential
looks encouraging with strategic
investments planned in core markets
of Bangladesh, Vietnam, MENA and
South Africa, coupled with expansion
in adjacent markets of South Asia and
Indo China region.
Building A
Responsible Business
We endeavour to make Marico
a responsible corporate not only
by becoming future-ready for
sustainable growth in a VUCA
world, but also by making societal
value creation the bedrock of our
business strategy. During the year,
we continued to work on various
sustainability initiatives across our
different markets in areas like energy
management, water management,
farm productivity improvement, and
sustainable procurement. Our brands
with a purpose also drove long-term
sustainability, with Saffolalife and
Nihar Shanti Amla taking up socially
relevant causes in the areas of heart
health and education respectively.
I am also happy to share that your
Company is the first in Himachal
Pradesh to have bagged a Gold
certification under the GreenCo
Rating system (accredited by the
Confederation of Indian industry (CII) )
for its Baddi unit.
The Marico R&D centre located
in Suburban Mumbai also received
the distinguished Indian Green
Building Code (IGBC) certification for
innovative and efficient use of energy
and water, facility management and
health standards.
All of this has helped us in
aligning our business, social, and
environmental objectives.
We will continue our journey as a
responsible corporate entity and build
further momentum on our consistent
track record of sustainable, profitable
growth. Marico, as a responsible
corporate citizen, is fully committed to
its purpose to ‘Make a Difference’.
We are engaging in meaningful
dialogue with all our stakeholders,
while striving to improve social,
environmental and economic
performance of our operations.
GST Impact
The new financial year has started
on an encouraging note with the
Government keenly pushing the
implementation of the Goods and
Services Tax (GST) from the second
quarter of the financial year. GST is
the most significant tax reform since
independence for what is now Asia's
third largest economy. It will be far
simpler than the current system, where
a good is taxed multiple times and
at different rates in different states.
It subsumes the messy plethora of
indirect taxes, duties, surcharges and
cesses into a single tax, thus making
the movement of goods cheaper and
seamless across the country.
We have taken a 360 degree
approach towards getting ready
for GST. We are working towards
making the entire ecosystem ready
12%
The consolidated profit after tax
grew strongly by 12% compared
to last year.
Business Outlook
We believe that the soft consumption
environment has bottomed out and the
performance of the Company will pick up steadily
going forward. We will continue to invest behind
brand & capability building to secure long-term
profitable growth. We will strive to build new
vectors of growth while building strong moats
around our core.
As we move from current tax regime to GST
regime, we expect the consumer demand to
remain intact in the short-term. While in the
long run, GST will be beneficial for organised
players, it will bring near term uncertainty that
may disrupt trade in H1 FY18. Although the
government has come up with the transitional
provisions, which appear to be reasonably fair,
the wholesalers and retailers may take cautious
approach and lower down the stock levels as
on the date of transition. However, it will be
short lived and business should come back to
normalcy in subsequent quarter(s).
While macros are stable, good monsoons
play a key role in consumption revival. The initial
forecasts on monsoon are also encouraging
and this gives hope for a strong consumption
demand from the rural segment. On the other
hand, raw material prices have moved up
significantly over the last few quarters, putting
pressure on margins.
We expect consumption to pick up in the latter
half of the year and remain confident of delivering
improved volume growth in India, and a constant
currency growth in the International business.
We will invest in the core & the new products, for
which we have an exciting calendar ahead. We
remain committed to our long-term objective of
building enduring consumer franchises in India
and International markets. In our International
business, political stability in markets of Egypt,
Bangladesh, Saudi Arabia and Nepal would be the
key for sustained performance. Our operating
margins, which are very healthy, may see a bit of
contraction. We believe that focus on franchise
expansion with threshold margins will stand us
in good stead as we write a long-term profitable
growth story.
Vision 2022
By FY2022, your Company aspires to be a
leading emerging market MNC with a leadership
position in two core categories of nourishment
and male grooming in five chosen markets in
Asia and Africa, and in the process, double its
revenue over FY17. The Company has already
initiated definitive steps to meet this aspiration
by seeking to win amongst consumers, trade,
and talent. Towards this goal, the Company
will continue to step up efforts to become
future ready in its five areas of Transformation
where it will develop top quartile capability and
processes. They are Innovation, Go To Market
Transformation, Talent Value Proposition,
IT & Analytics, and Value Management. While
driving growth, we will also continue to retain
our focus on best in class governance and risk
management.
Lastly, I take this opportunity to express my
sincere gratitude to our shareholders, Board of
Directors, Management, dedicated members,
esteemed customers, suppliers, bankers and
investors, for their unrelenting dedication,
support and commitment to Marico.
With warm regards,
Saugata Gupta
Managing Director and CEO
OUR PEOPLE, OUR PRIDE
Your Company has taken definitive steps in creating an enabling
environment to promote diversity. I am happy to inform you that
50% of our talent in consumer facing functions of Technology and
Marketing, and 35% of our leadership talent in consumer facing
functions of Technology and Marketing are women. We are also
actively promoting multi-cultural diversity in our overseas units
and driving higher mix of millennials in our managerial talent. I am
pleased to let you know that your company has moved up 24 places
in the Economic Times & The Great Place to Work 2017 study and is
now ranked 40th. Your Company is also among the best companies
to work in the FMCG industry. Marico is also amongst the Top 100
companies to work for women in India as per the 2016 study by
Working Mother Media & AVTAR.
MARICO LIMITED | Annual Report 2016-17
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Strategic Report
for this reform, which comprises our sales
channel partners, procurement vendors,
supply chain & logistics partners, and other
business associates. We are educating our
business partners through training sessions,
and providing all the necessary support for a
smooth transition to GST.
18
OUR PEOPLE OUR PRIDE
At Marico, our core value proposition is to
provide challenging, enriching and fulfilling
opportunities that maximise our people’s
potential. We believe that our ability to
deliver on this proposition by providing early
responsibility, fast paced learning & growth and
an entrepreneurial, and flexible work culture
make us one of the great places to work.
Our People Our Pride
Marico IT Team: (Picture Courtesy)
Mukesh Kripalani, Chief – Business Process Transformation & IT
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Strategic Report
Marico represents
a distinctive people
culture – a culture that
sets us apart.
We call our people ‘members’, and invite
them to a wholesome membership
where they have the opportunity to
determine and participate in Marico’s
growth story.
Our members are our pride. Our
sustainable growth story rests on
an empowering work culture that
encourages them to take complete
ownership, and make a difference to the
entire business ecosystem.
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
20
LEADERS OF TODAY.
LEADERS OF TOMORROW
Marico builds leaders. Members are developed as leaders by leveraging
a combination of proven, experiential and futuristic approaches. Early
responsibility, empowered roles and the bedrock of our values give
each member a purpose to make a difference in what they do.
BOTTOM’S-UP - MARICO’S REVERSE
MENTORING INITIATIVE
An initiative to bridge the gap
between the experienced and
the millennials
Marico has three generations of members,
with Gen X and millennials comprising more
than 40% of Marico’s workforce. It is important
for these two generations to appreciate each
other for a cohesive work culture. Towards this,
Marico has launched a new reverse mentoring
initiative called ‘Bottom’s Up’.
The goal of the ‘Bottom’s-Up’ program is to
groom our younger population to be leaders
of tomorrow with strong leadership skills and
cross functional exposure. At the same time,
it is aimed at making our senior leaders more
digitally savvy, and helping them understand
the preferences and working styles of the
millennials better.
As one of the early adopters of this concept,
Marico has leveraged Reverse Mentoring to
create an environment that not only benefits
the organisation, but also helps the mentors
and the mentees through:
• Contemporary skill development for senior
members
• Leadership Development for young
members
Our People Our Pride
The outcome
It has been received very well by all the
mentors and the mentees. The entire top
leadership team at Marico has been through
the ‘Bottom’s-Up’ program, and has derived
immense learning from their interactions with
the young mentors. The program has now been
extended to the next level of leaders within the
organisation.
MENTEES
" This is a meaningful program.
I think we are learning from
each other. It has prompted
me to think in certain areas
which otherwise were not on
my radar."
"It has been an enriching and
enlightening experience."
MENTORS
"I was really surprised
with the openness and the
willingness to learn from the
mentees."
"He dedicated a whole lot of
time in counselling me about
my career - something that
lifted my confidence and
gave me clarity of thought."
"I think I gained more than
I was able to give."
MARICO'S YOUNG BOARD
Shaping Marico’s future
The youth are game changers with their new
ideas, fresh perspectives, high aspirations,
and risk taking appetite. We, at Marico, have
endeavoured to harness this edge through our
Young Board.
The Young Board comprises young home
grown leaders from different functions
and geographies. The Board is entrusted
with responsibilities to spot new business
opportunities, identify potential pitfalls and work
on select high-impact organisation building
initiatives. The first Young Board was set up in
2015 and the Board members change every year.
Since inception, each Young Board, has
contributed to building Marico’s business and
the institution by• Developing new business ideas and models
• Identifying opportunities across business
units
• Recommending initiatives to strengthen the
culture at Marico
• Proposing ideas for the future of the
organisation
The platform has enriched our young leaders.
It has facilitated in building a broader business
perspective, and necessitating them to look
at things from a holistic and organisational
perspective, rather than from an individual or
functional perspective.
The launch of the Saffola Masala Oats
Dispenser, Saffola Fit Foodie’s association with
Holachef, the formation of the Growth Hacking
team and creating the Hangout Zone in Marico’s
Corporate Office are the highlights of the work
done by the Young Boards.
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Strategic Report
• Sensitisation to Generational diversity and
the different outlooks of all generations at
work
‘Bottoms-Up’ invigorates the organisation to
be younger in ways and mature in style, thus
creating a win-win opportunity.
22
MARICO 2.0
INNOVATION JAM
The concept of Innovation Jam stems from
the assumption that an idea can come from
anywhere and any member can possess an
idea that can transform the organisation for the
better. This year, Marico launched an Innovation
Jam to crowdsource ideas from members
to make Marico an awesome workplace. The
objective was to hear from members on their
breakthrough and innovative ideas that will
make Marico a workplace for the future. It
covered four main themes:
1. Experimentation with work practices: Ideas
on discovering new workplace practices
which will make everyone more efficient at
work
2. Learning and development: Ideas on how
members can be empowered for their
growth & development
3. Creating life experiences: Ideas around
creating life experiences that members will
cherish, including involving their family and
loved ones
4. Member Well-being: Ideas for a healthy,
stress-free work environment where
members can pursue their interests with
support from the organisation
It is all about
the 'big idea'.
A total of 939 ideas were received from
members. The ideas have been rigorously
screened by the Executive Committee Jury,
and the top five high-impact ideas have been
selected. The five winning ideas came from
sixteen members from different functions and
will be implemented in the coming year.
Our People Our Pride
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Strategic Report
Over the last couple
of years, the digital
forces have brought
about a lot of changes
WORKPLACE @ FACEBOOK
Our internal culture and diagnostic studies
suggested the need for more direct, participative,
inclusive, and interactive communication in
the organisation. We learnt from our members,
more than 40% of whom are millennials, that
members prefer instant, short, visually appealing
and interactive communication. Hence, it was
important to go beyond the conventional ways
of communication, and select a channel of
communication that was empowering, inclusive
and easy to use. This led us to select Workplace
by Facebook as one of our key internal
communication channels.
With its strategy built on 4 pillars of
Organisation Communication, Collaboration,
Leadership Connect and Emotional Capital, the
platform has very quickly become a common
communication platform for ‘One Marico’. The
multiple features replicating the original social
media platform, have helped Mariconians share,
collaborate and bond with each other within and
across functions and geographies like never
before.
Regular updates on team members,
organisation news and announcements,
celebration of personal milestones, along with
posts on “Humans of Marico” created a sense of
belongingness and pride amongst the members.
Leaders can now connect with the members
with a single click of a button. With features like
hosting events, and soliciting feedback through
polls and messenger, Workplace has given us a
tremendous platform to make Marico an even
better place to work.
in the business
environment. Marico
87%
has also recognised
the opportunities
presented by such
forces and has
Today 87% of our
workforce is on the
platform and as per
Facebook, we are among
the top companies in
India to use Facebook
Workgroups effectively.
developed a strategy
to harness them in
order to empower its
members.
Regular updates
on team members,
Organisation news
and announcements,
Celebration of
personal milestones
along with Posts on
“Humans of Marico”
created a sense
of belongingness
and pride for the
members.
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
24
ILEARN
>700
This year, more than 700
members have taken
courses on iLearn, which
has supported their
developmental growth.
Our People Our Pride
Making learning available,
anytime and anywhere.
Marico has always believed and also instilled
this belief in all its members that “each member
is responsible for his or her own development”.
To empower our members and provide them
access to learning anytime, anywhere, we
launched iLearn- our e-learning offering. iLearn
has behavioural and functional content, and is
accessible to all members worldwide.
25
Strategic Report
The T3 team, as it is called, visited Innovation Labs of
different companies, participated in workshops on
Digital and Internet of things, got inputs from thought
leaders to be inspired to come with great ideas.
TECHNOLOGY THINK TANK
Leveraging the technical bent
of younger generation
It all started with the idea of bringing together
the young, tech savvy minds of different
functions to leverage new and emerging
technologies and propose game changing
business, and productivity improvement ideas.
Their mandate was to pitch an idea which
would excite and persuade the leadership
team to fund it for further development. The
Technology Think Tank, or the T3 team as it
is called, visited Innovation Labs of different
companies, participated in workshops on
Digital and got inputs from thought leaders in
order to be inspired to create great ideas. The
team researched and brainstormed on various
ideas, and finally proposed two powerful ideas
which are currently being tested. This provided
an exciting learning experience to the T3 team,
who have generated many potential business
ideas for Marico’s future.
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26
MARICO MEMBER EXPERIENCE
(ME@MARICO)
PARENTAL POLICIES
Marico Member Experience is an endeavour
aimed at creating meaningful and enriching
member experiences. Aptly named ME@
Marico, the focus behind creating these
experiences is the ME-mbers.
This year, as an effort to enhance the
Member Experience, we upgraded our
parental benefits. We extended our maternity
leave with full pay to 26 weeks. This leave can
be supplemented with Privilege leave, Flexiworking hours and Leave without pay option,
till the child becomes one year old. In addition
to this, we now provide a Wellness package for
mothers. They can use this package to enrol
in various classes during and after pregnancy,
attend counselling sessions, buy reading
material, etc., which will help them maintain
Marico is amongst the Top 100
companies to work for women
in India, as per the 2016 study by
Working Mother Media & AVTAR
Best Companies for Women in
India.
Maternity leave of
26 weeks and 15 days
of Paternity leave
alongwith a Wellness
package to support the
new parent.
Our People Our Pride
a healthy lifestyle and support them in good
parenting. We continue to extend financial
support for day care facilities.
The paternal benefits for the male members
have been upgraded too. They now get 15
continuous calendar days of paternity leave,
and also the Wellness package to support
them as new fathers.
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Strategic Report
Hangout Zone has a cosy
indoor set up with state-ofthe-art audio-visual devices,
a library and a coffee shop
experience all rolled into one.
At Marico it’s not only
about work, but a
combination of work
and play. We ensure
that our members
have fun at work,
nestled in a happy
zone thus creating
meaningful and
enriching member
experiences.
THE HANGOUT ZONE
The ‘Hangout Zone’ at Marico’s Corporate
office is, just as the name suggests, a place
to hang out. This idea was proposed and
implemented by Marico’s Young Board to
provide a place to members to take a break
and have some fun at work.
Perched on the 8th floor, this space offers a
cosy indoor setup with state-of-the-art
audio-visual devices, a library, and a coffee
shop experience all rolled into one. The
outdoors of this space provide for a garden
seating arrangement with coffee tables,
football tables, etc., all lending to the aura of
a young-paced and ecologically friendly zone
within the walls of the office.
OUR
PEOPLE
OUR
PRIDE
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28
LIVING WITH PURPOSE
MARICO MENTOR PROGRAM
The Marico Mentors Program provides
an opportunity to our members to live a life
of purpose and make a difference. Many of
our members have already activated their
purpose through this platform. The program
is anchored by Marico Innovation Foundation
and was created in 2014 to enable Marico
members to contribute their professional skills
and experiences towards creating sustainable
impact for innovative social enterprises.
The program engages with members on
pre-identified challenges of the innovative
social enterprise. The deep rooted
engagements are function specific. Members
have the opportunity to mentor and guide
the social enterprise in solving some of their
critical business challenges affecting their
Our People Our Pride
25+
Organisations have helped
in addressing scale-up
challenges in social
enterprises
90+
Marico members actively
working on the projects
29
30+ 13+
CEO Mentors are
supporting the
program
Sectors across healthcare,
livelihood, agriculture,
solar, education, among
others have benefitted
“After intense deliberations and field visits with the founders to
study IsolarLite’s nascent distribution model, I am excited about
creating an implementable and economical distribution model for
them from scratch that will help them in their journey to scale up!”
Kunal Bhardwaj, Marketing, Marico
“Little did I know that my efforts to put a structured procurement
process in place for buying Kits for Educate girls would lead to
6,000 more educated girls in India. What is Business as usual for
us is rocket science for them! At the same time, another exciting
project with Atomberg will give me opportunity to learn a lot about
the consumer durables industry by working under guidance of
Industry experts like Mr. Sudhir Trehan. I am loving it!”
Nirlay Sheth, Procurement, Marico
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Strategic Report
scale and impact. On an average the project
duration ranges from 5-8 months depending
on the intensity of the intervention. The project
concludes when the challenge is resolved and
the organisation is ready to scale up.
The Marico Mentorship Program is a platform
through which we deliver on our Talent Value
Proposition, which is to continuously challenge,
enrich & fulfil our members’ aspirations and
maximise their potential. This program yet
again epitomises Marico’s pride- the distinctive
people culture- as it provides wholesome
membership by participating in an innovation’s
growth story.
30
BRAND CAMPAIGNS
INDIAN
CAMPAIGNS
Parachute Advansed Hot Oil –
Magic of Warmth
Parachute Advansed is one of the
largest and most trusted consumer
franchises in the hair oils category.
As the brand expands its market
footprint from South & West India
to the North of the country, one
of our key tasks is to continually
increase the functional relevance
of Parachute Advansed for the
consumers in the North over other
hair oils. This is where Parachute
Advansed Hot Oil, a self-heating oil
comes in. In October-March, as the
North of the country gets gripped
with biting cold, a hot oil massage
gives therapeutic relief, as well as
freedom from frizz and dryness
through deeper oil penetration.
The communication narrative
for the latest ‘Magic of Warmth’
campaign was built around a simple
insight – warmth has a healing
power, not just when it comes to
hair, but also to relationships as well.
The campaign brings this thought
alive through a relationship between
two siblings that has run cold in due
course. It's a champi with Parachute
Advansed Hot Oil placed at the
heart of the film that brings their lost
connection and warmth back. After
a 3 year hiatus, this campaign has
led the brand to deliver double digit
growth numbers.
Parachute Advansed Jasmine –
Shine Karke Toh Dekho
(Try to shine and you will see)
Over the years, Parachute
Advansed Jasmine has carved a
space for itself with the small town
girl. With the cultural tailwind of girl
empowerment and the media-led
lure of the sky being the limit, the
girl is forever waiting for the right
opportunity to make her mark, to
shine. Parachute Advansed aids this
journey with its promise of helping
her through the moments that
count.
‘Shine Karke toh Dekho’
is the latest in the series of
communications with this
proposition. With this new campaign,
the brand has steadily gained share.
Parachute Advansed Ayurvedic –
Guchcha (Strands of hair that fall
daily)
Since 2014, Parachute Advansed
Ayurvedic has consistently urged
consumers to not ignore their hairfall, and act upon it before it gets out
of hand. The 2016 communication
continues to build on this brand
thought by bringing consumers’
attention to the blind spot of the
‘daily guccha’ which mindlessly gets
thrown away. The brand urges the
consumer to be conscious of this
habit, recognise their hairfall problem, and act on it.
The campaign resonated with the
consumers, with market share in
South increasing, post the campaign
launch (Sep’16 to Mar’17) vs the
same period last year. The brand
exited the year on the highest ever
share in the Hair Fall Segment in
South.
Hairsutras.com
With the focus to truly engage
the young, female, digital consumer
beyond traditional advertising,
Parachute Advansed has launched a
content platform called Hairsutras.
The website seeks to provide the
modern consumer time-tested
secrets to gorgeous hair, while
seamlessly weaving in messaging
on the goodness of oiling into the
content. The objective is to make
her re-discover the category in a
completely new light.
Parachute Advansed
Hot Oil – Magic of Warmth
Our People Our Pride
Nihar Naturals Shanti Amla- Dikho
Khoobsurat, Karo Khoobsurat (Look
beautiful and do beautiful)
Nihar Naturals Shanti Amla is
one of the fastest growing hair oil
brands in the country. Its latest
31
campaign, ‘Dikho Khoobsurat, Karo
Khoobsurat’, is in tandem with its
long term commitment to further
children’s education in the country.
The campaign captures the essence
of our brand purpose of giving
consumers fantastic looking healthy
black hair, while furthering the cause
of children’s education. The brand
has stayed on this 'Look good & do
good' premise for four years now,
and it's paying rich dividends.
become either a spa manager or a
customer, and learn the different
techniques of oiling through fun-filled
massages like the 'Rockstar' and 'Chill
Pill' massage. Massages are taught
through unique, easy-to-follow music
Strategic Report
Nihar Naturals Shanti Amla is
one of the fastest growing hair
oil brands in the country
Our brand campaigns
focus on fostering
deeper connections
with our consumers.
Parachute Advansed @KidZania
Parachute Advansed decided
to introduce oiling into the lives
of India’s kids by catching them
young. The idea was to pass on the
traditional Indian oiling ritual to the
next generation in a fun and relatable
way. The brand launched its first ever
Hair Spa at KidZania Mumbai, an
award winning Global Indoor Theme
park that inspires and educates kids
through real life role play. They could
Hair Spa at Kidzania Mumbai
OUR
PEOPLE
OUR
PRIDE
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32
'Brand for me'
scores for Livon grew by
20%
videos, and are finished with trending
oiled hairstyles like Elsa Braid.
Livon ‘Salon Nahin Livon’ (No need
for the salon, when you have Livon)
With the launch of its new
proposition, Salon Finish Hair at
home in the campaign titled ‘Salon
Nahin Livon’, Livon Serum has
captured a differentiated & strong
functional benefit in the large and
cluttered post-wash space in India.
This proposition is well synced to
deliver superlative, fabulous hair for
the young millennial of today who
wants to look fabulous all the time.
And in true millennial style, the brand
revamped its media model to be
‘digital first’ in its approach to speak
to the consumer where they’re
spending maximum time.
The brand also strengthened
salience & relevance by partnering
with India’s Next Top Model
(INTM) - the ultra-mod, super-style
destination for young girls. The
‘Salon Finish Hair’ proposition
created a unique space for the brand
in the post-wash space, and yielded
instant business results. Via INTM,
the brand reached more than 20
million girls through TV & digital.
Overall imagery scores for the
brand shot up by 11%: ‘Brand for me;
scores grew by 20%, ‘Makes My Hair
Beautiful’ scores grew from 29%
to 41%, and Livon Serum became
synonymous with high-glam.
Our People Our Pride
Set Wet Gels: Pura Din Set
(Set for the entire day)
Set Wet is a styling brand for men
of a younger age group, looking to
make an impact. While the overall
penetration of hair styling products
in India is low, a lot of younger men
style their hair with oil and water.
The objective of the ‘Poora Din Set’
campaign was to drive penetration
for Set Wet Gels and upgrade these
consumers to gels by driving the
superiority of the gels in giving the
hold and style for a full day compared
to their current habit which can keep
the style only for an hour or so. The
campaign has been very effective
for the brand, with the brand offtakes
growing in double digits.
Parachute Advansed Body Lotion #confidentinmyskin
Parachute Advansed Body Lotion
(PABL) successfully re-staged itself
to become a brand of choice for
the modern young woman in West
Bengal last year. The communication
#confidentinmyskin is built around
the insight that women in India are
judged no matter what they wear,
if they reveal body skin (seen as
bold) as well if they cover (seen as
conservative). PABL decided to
take on this judgement head on
by bringing this cultural tension
to light through a very real &
relatable depiction of women & the
judgements they face in everyday
life. PABL encourages women to
confidently wear what they choose to,
by delivering beautiful glowing skin.
Post the campaign, PABL witnessed
a jump in Brand Equity scores within
the first three months of launch
in the test market of West Bengal.
Household penetration for PABL saw
an increase among the bull’s eye
33
Strategic Report
Saffola World Heart Day with
Shilpa Shetty, Kunal Kapur and
Cyrus Sahukar
~50,000
target group of 15-25 years, SEC
A households aiding a complete
turnaround.
Saffola World Heart Day 2016
World Heart Federation findings
have established the co-relation
between our everyday lifestyle and
heart health. The findings show that
- “Staying Active, Eating Better and
Being Happy can make your heart
up to 50% healthier”. This became
the core thought of the Saffolalife
campaign in September 2016, which
was brought to life with• The development of Healthy
Lifestyle Score- a unique tool
that correlates one’s healthy
lifestyle score to heart health
• The Saffolalife Research Study,
which found the Healthy Lifestyle
Score of India to be 68, and
further showcased how the
sedentary lifestyle of India was
pulling its healthy lifestyle index
down
• The Saffolalife Study Event for
Lifestyle Media, where celebrities
Shilpa Shetty, Chef Kunal Kapur
& Cyrus Sahukar were brought
in to highlight each vector of the
Healthy Lifestyle
• The Saffolalife Communication
with the campaign coined
"Chhote Kadam – Dil ke bade
kaam ke" (Taking small steps go
a long way for a healthy heart)
as a creative idea to inspire
consumers towards taking small
steps towards a healthier heart
consumers took
up the Healthy
Lifestyle Score.
>2Lakh
consumers visited the
Saffolalife website
www.saffolalife.com.
The campaign resulted in a
significant increase in overall brand
imagery scores of Saffola. Over 2
lakh consumers visited the Saffolalife
website, www.saffolalife.com, and
~50,000 consumers took up the
Healthy Lifestyle Score.
MARICO LIMITED | Annual Report 2016-17
34
order to strengthen its leadership
position, Caivil’s Just for Kids (JFK)
needed to differentiate itself from
other contenders to the throne
by “partnering” with moms across
SA during the critical first year of
school. Forming a close knit triad of
mom-school-JFK during this critical
period, JFK initiated an informative
yet entertaining campaign across
SA, highlighting to young girls
the importance of having a good
grooming routine in a fun, interactive
way.
Parachute Advansed
Beliphool - the
perfumed light oil
experienced an
incredible growth of
57% in FY16-17
57%
INTERNATIONAL
CAMPAIGNS
Bangladesh
Parachute Advansed
Thematic Campaign
Parachute Advansed has been
awarded as the best Hair Oil brand
and the 8th Best Brand of Bangladesh in 2016 by Bangladesh Brand
Forum. The key task for the brand
was to maintain market share in an
ever increasing competitive market.
Keeping this objective in mind, an
attractive new thematic campaign
of Parachute Advansed, “Ek din
por por” (Every alternate day), was
launched.
The communication was well
received by consumers, who found
it easy to comprehend, likeable and
relevant. It also led to significant
improvement in key parameters like
Our People Our Pride
overall brand image, ‘suitable for
regular usage’ and ‘beneficial for
hair’.
Parachute Advansed Beliphool Nandini
Parachute Advansed Beliphool
is the leading VAHO brand in
Marico Bangladesh’s portfolio.
The perfumed light hair oil has
experienced a tremendous growth
journey in FY 16-17, with 57%
growth in off takes. This has been
stemmed by a range of brand
activities. One of the key highlights
of last year was the ‘Parachute
Advansed Beliphool – Nandini’
activation. The activation was done
with the objective to gain awareness
and increase penetration through
attaining more new triers.
During the activation, benefits
of Parachute Advansed Beliphool
were communicated through a
drama, followed by a quiz and
game amongst participants, and
finally sampling to all attendees.
The second phase of the activation
was conducted with school/college
students, where further awareness
was raised via amplification through
digital media.
South Africa
Caivil Just For Kids
The South African (SA) kid’s ethnic
haircare segment is one of the
fastest growing and as such, it has
become extremely competitive. In
Using dance and songs, the kids
were engaged to remember their
early morning routine mimicked
in a popular dance sequence. The
animated character Thandi was
introduced so that the kids were
able to relate and interact with her.
For consistent brand presence and
visibility, JFK supplied the schools
with tools such as educational
posters, stationery and timetables
for each learner. As a result, JFK
reported a double digit value growth
of 15.1% vs last year (growing ahead
of the category and driving growth),
and is still the leader in the Kids
Ethnic hair care segment with 69%
value share. [Nielsen Sep 2016].
Caivil Beauty Parlour
Caivil represents sophistication
and everyday luxury – a premium
hair care brand with a salon heritage.
Over the years, Caivil lost ground with
its stronghold - the sophisticated
Black woman. In order to address
that, Caivil, in collaboration with SA’s
largest commercial radio station,
used celebrity stylists associated
with the Caivil Academy to style
celebrity guests at the Caivil Beauty
Parlour for the much publicised
Metro FM Annual Awards. This was
preceded by an exclusive promotion
with key retailer Clicks. Over 300
high profile celebrities, ranging
from musicians, actors, government
officials and entertainers, were styled
by Caivil, generating significant
attention in the social media buzz
around the event.
XMEN had the task of making hair styling
aspirational for the youth in Vietnam
X-Men decided to lead the hair
styling category in Vietnam in
order to strengthen its equity as a
champion male grooming brand. In
an underpenetrated category, the
brand had the task of making the
category aspirational and accessible
to the youth. The breakthrough came
when they signed up 365DABAND,
a boys band which was on the verge
of a split, and launched their last
ever music video with them. The
theme was around band members
competing with each other on who
has the best hairstyle. With this, the
brand announced a competition –
‘Show your Style’- an online platform
where college student could
participate by uploading unique hair
styles, & the winning college gets
something all Vietnamese teens
wanted - The Last Live Performance
from 365DABAND.
The brand signed up leading KOLs,
whose role was to create camps for
their ex-colleges and encourage
more teens to join in. College
activation as well as strategic
tie-ups with Circle K, a youth
hangout 24/7 chain, were executed
to further promote the campaign.
Unique reach on digital platform was
10 Mn (76% of TG) over 8 weeks, with
15 Mn views on the Music Video and
how-to videos. Post-campaign over
pre-campaign, total secondary sales
growth of 75%, Circle K growing at
250%
Strategic Report
Vietnam
X-Men Vietnam –
Show Your Style Campaign
35
X- Men for Boss Master Brand- Boss
Leads Bosses
X-Men for Boss wanted to ride
the upgradation trend, so as to
put Romano VIP under pressure.
The objectives were to strengthen
X-Men's premium positioning and
great perfume imagery, along with
driving up-trading to X-Men for Boss
across categories, with shampoo
as the biggest inspiration. X-men
believed that a real Boss was an
aspirational leader, not a follower.
With that insight, X-Men developed
the campaign idea ‘Boss Leads
Bosses’ to support the whole range.
X-Men leveraged this idea across
key touchpoints to maximise
awareness. ‘Boss Leads Bosses’
went big on digital, as a result
garnering 3.1 Mn views, with 53%
watching full 2’ clip (vs 30%). The
breakthrough came by an on-ground
activation with the idea to ‘find the
best start-up idea worth 1Bio VND’,
which resonated strongly with our
TG.
Marico aspires to be
a leading emerging
MNC with a leadership
position in two
core categories of
nourishment and
male grooming in five
chosen markets in
Asia and Africa.
XMEN for Boss - Boss Leads Bosses
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
36
SUSTAINABILITY
AND SOCIAL
PURPOSE
At Marico, we believe it is fundamental to integrate
sustainability into our core business strategy, to enable
a long-term win-win situation for all stakeholders.
Our stated purpose is to “Make a Difference”
by ensuring a positive impact.
Marico works closely with its ecosystem to create a sustainable and inclusive
growth for all. We have worked on various sustainability initiatives across our different
markets in the areas of energy management, water management, farm productivity
improvement, etc. Brands with a purpose also drove long-term sustainability, with two of
our lead brands taking up socially relevant causes. Such steps have helped us in aligning
our business, social and environmental objectives.
Our People Our Pride
37
Strategic Report
CREATION OF GOOD CLIMATE BY REDUCTION IN
LIFE CYCLE GHG EMISSIONS OF OUR PRODUCTS:
Improving energy efficiency
We initiated project EnCon towards improving energy
efficiencies. This project was also aimed at creating
standards for processes, modifying process design,
as well as equipment selection. Energy mapping was
conducted to identify the low efficiency areas, followed
by providing energy efficiency solutions. This facilitated a
7.81% reduction in energy consumption over the last year.
ENERGY INTENSITY
(FUEL + ELECTRICITY)
32%
reduction
in energy
consumption
over 5 years
As a part of our
sustainability journey,
2.0
we had identified
specific goals, along
1.0
0
with our focus areas
for each of the goals.
FY13 FY14 FY15 FY16 FY17
Various projects were
undertaken at the
start of the year in our
endeavour to achieve
Becoming a responsible consumer
of renewable energy
them.
At Marico, we have always aimed to utilise power
generated from renewable sources. At our Perundurai
plant in South India, we were facing frequent power
cuts leading to productivity losses. We took this as
an opportunity, followed the group captive model and
moved our energy source from Tamil Nadu Electricity
Board (TNEB) to renewable power from wind energy. The
transformer capacity has increased to 1,000 kVA and
power allocation increased to 875 kVA. We have achieved
a peak annual savings of INR 16 lacs and a reduction in
GHG emissions of 1,700 tonnes of CO2e/year.
RENEWABLE ENERGY (%)
120%
improvement
in renewable
energy over
5 years
100
50
0
64%
70%
70%
74%
33%
FY13 FY14 FY15 FY16 FY17
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
GHG EMISSIONS (SCOPE 1 + II)
38
150
100
50
FY13 FY14 FY15 FY16 FY17
60%
We undertook 26 projects last
year that led to savings of
` 374.35 lacs and helped us in
reducing the quantity of raw
materials used in our products.
OPTIMISING OF EARTH’S RESOURCES
Becoming a water positive organisation
In our pursuit to become a water positive organisation,
we undertook projects to reduce specific water
consumption at our plants. We were successful in
reducing the water consumption by 21% at our Baddi
plant in North India (from 1.61KL/MT in 2015-16 to 1.27
KL/MT in 2016-17). Along with this, we also worked
towards water conservation at adjacent villages located
around our plants in Pondicherry (Sanyassikuppam
village) and Baddi (Trirla Village in Nalagarh Taluka). We
also worked towards infrastructure development, which
benefited around 3,000 people.
SPECIFIC WATER CONSUMPTION
(PRODUCT MANUFACTURING)
1.2
1.0
Our People Our Pride
FY14
FY15
FY16
At Marico, we make meticulous efforts to work on
conserving raw materials, and promoting usage of
sustainable packaging material for our products. The
process begins at the R&D stage, and is followed in
the entire life cycle of our products. We undertook 26
projects last year that led to savings of ` 374.35 lacs, and
helped us in reducing the quantity of raw materials used
in our products. Reduction in laminate usage by 3%-5%
(about 40 MT per annum) was achieved in a joint project
led by the procurement team along with suppliers.
Sustainable procurement
• Safflower extension program
Safflower, by virtue of being a minor crop, does
not receive the extension and research support
from publicly funded organisations. As a result,
the productivity and consequently, the income of
Safflower farmers have not grown to the same extent
as farmers of other traditional crops. Marico, being
a responsible stakeholder in the Safflower value
chain, works relentlessly to address this problem. It
has launched a program which aims to improve the
income of Safflower farmers by making Safflower
a profitable crop. Various programs like seed
development and propagation program, popularising
the high yielding varieties seeds, testing and
propagation of yield enhancing agriculture inputs, etc.
were conducted. These programs have benefitted
around 40,000 farmers.
reduction in CHG emissions from
baseline
0.8
Resource optimisation
FY17
SAFFLOWER
EXTENSION PROGRAM
40,000
farmers benefitted.
• Coconut extension program
Marico’s study on prevalent
farming practices & best cultivation
methodologies leads us to believe that
farmers can produce 25% more in their
fields by adopting the correct practices
with no or negligible increase in costs. In
order to make a difference in the lives of
our farmers, Marico took upon itself the
task to educate the coconut growers and
help them increase the productivity, thus
creating long-term crop sustainability
and higher returns. There were various
initiatives taken during this program,
including farmer trainings, awareness
on coconut cultivation, management
practices, and soil testing among
others. The program has worked to the
advantage of around 4,500 farmers.
39
Strategic Report
COCONUT
EXTENSION PROGRAM YIELDED
25%
increase in production by
adopting the correct practices
25+
11 7
Organisations
Social
Enterprises
Sectors
6 4
Marico
Mentors
External
Mentors
RESPONSIBLE CORPORATE CITIZENSHIP
Marico’s CSR Philosophy
Marico’s stated purpose is to “Make a Difference”. This
purpose has defined our reason to exist, which goes
beyond just generating profits and creating shareholder
value. We firmly believe that all stakeholders in any
organization, whether it is Shareholders, Consumers,
Associates, Employees, Environment, and the Society we
operate in, are closely interlinked in an interdependent
ecosystem. A compelling sense of higher purpose
creates an extraordinary degree of engagement amongst
all stakeholders, and catalyses creativity, innovation, and
commitment.
1 . Marico Innovation Foundation (MIF)
Marico Innovation Foundation, a Company incorporated
under section 25 of the Companies Act, 1956, is a wholly
owned subsidiary of your Company. MIF is a not-for-profit
organisation working towards the cause of innovation
since 2003. The Foundation creates impact through its
below mentioned programs:
• MIF Scale Up Program
The Scale Up program is a sector-agnostic initiative that
works with for-profit and not-for-profit organisations. It
focuses on innovative organisations which are driven
MARICO LIMITED | Annual Report 2016-17
40
to achieve large scale social impact. The program also
focuses on creating ‘scalable and sustainable impact’
by solving the critical business challenges faced by
an organisation. The program follows a hands-on
engagement process. In the financial year 2016-17, the
Foundation worked closely with organisations like Tara
Livelihood Academy, Fractal Microspin, Yuva Parivartan
and Zaya Labs.
• Marico Innovation Foundation in association with
Villgro incubated an organisation called Yostra Labs
Private Limited. Yostra is a healthcare technology firm
pioneering smart innovations to make healthcare more
effective and affordable. Yostra has developed two
products, specifically to enable mass screening and
treatment of diabetic patients at primary and secondary
healthcare centres and resource-poor settings, making
treatment accessible to patients from all socioeconomic strata.
2. Brands with A Purpose
• Saffolalife “Chhote Kadam – Dil ke Bade Kaam ke”
Saffola life: Healthy lifestyle is the key to a Healthy Heart:
For the World Heart Day campaign this year, the findings
revealed that - “Staying Active, Eating Better and Being
Happy can make the heart up to 50% healthier”. The
43,000
healthy lifestyle tests taken till date
campaign coined "Chhote Kadam – dil ke bade kaam
ke" (Small steps to go a long way for heart) as a creative
idea to drive home the point. It educates people about
how making a small effort & bringing about minimal
alteration in your daily habits could lead to your heart
health improving by 50%. Saffolalife Research Study
was conducted amongst consumers across metros with
Neilsen and SRL Labs to release India’s healthy lifestyle
score. The study went further to bring out insights on
country’s physical activity levels, eating habits and
stress levels. Saffolalife Research Study released
Healthy Lifestyle Score of India at 68. During the year we
had 43,542 consumers taking the test online.
• Nihar Shanti Amla “Chhote Kadam Pragati Ke Aur”
Nihar Shanti Amla’s initiative “Chotte Kadam Pragati ke
Aur” (Small Steps towards Progress) is an endeavor to
support the education of underprivileged children. This
year, one of the priorities of education intervention was
to focus was on improving learning outcomes within the
age group of 4-14 years. Under this program, the brand
partnered with two organisations in the year ended
2017.
• Educate Girls: Initiatives carried out in Udaipur
and Jalore district of Rajasthan in North India
Our People Our Pride
• Sesame India Workshop: Conducted in
Farrukabad, Shahjahanpur and Kannauj districts
of Uttar Pradesh, and also in North India
3. Advocating Green Practices
•GreenCo
Our Baddi unit in North India secured a Gold
Certification under the GreenCo Rating system,
accredited by the Confederation of Indian industry
(CII). This was an endeavour to benchmark and
calibrate our practices with the Green Company Rating
System. This acts as a holistic framework to assess
and evaluate the performance of the Company's
activities in its pursuit of ecologically sustainable
growth. We are the first Company in Himachal Pradesh
to have bagged a Gold certification.
Our Baddi unit secured
a Gold Certification
under the GreenCo
Rating System.
• Marico R&D Centre goes green
The Marico R&D Centre building received the
distinguished Indian Green Building Code (IGBC)
certification for innovative and efficient use of energy
and water, facility management and health standards.
•Samyut
Advocating sustainability with all our Suppliers
through annual event Samyut. It aims at creating
long term valuable relationships with suppliers and
encourages them to drive sustainability agendas in their
organisations.
41
4. Making a difference to the community
Strategic Report
Health checkups at plants: Our plants have organised
numerous health camps for the members as well as the
community, which have benefitted around 580 people. The
camps dealt with issues comprising women’s health, dental
& eye check-up, oral hygiene, and blood donation camps.
• Teach Little Minds
The aim of this initiative is to nurture young minds and
create awareness among students by enlightening them
on importance of ‘quality practices’ in their day to day
life. Teams visit primary schools where students are
taught on Good Hygiene, Safety, Food Habits, Behaviour
and Manner in innovative and interactive ways. This
initiative has also been cascaded to various teams
from our manufacturing and business verticals, who
have taken the lead and started engaging with schools
directly. We have covered almost 1,300+ students
across India, and it is gaining momentum day by day
since its launch.
Marico, as a
responsible
corporate citizen,
is fully committed
• Empowering the girl child
The “Sakshar Beti” (Translation: Literate Daughter)
program was conducted for female students of Govt.
Inter College, Selaqui, Dehradun, and Govt.
Sr. Secondary School, Majhra, Paonta Sahib, both in
North India. As a part of the program, career orientation
sessions were organized and stationery kits were
distributed to around 240 girl students.
to its purpose to
‘Make a Difference’.
We are engaging
in meaningful
1,300+
240
students across
India and over
dialogue with all our
stakeholders, while
striving to improve
social, environmental
and economic
performance of our
operations.
girl students were
reached out
Our suppliers at the Samyut event.
OUR
PEOPLE
OUR
PRIDE
MARICO LIMITED | Annual Report 2016-17
BOARD OF DIRECTORS
42
Mr. Harsh Mariwala
Mr. Saugata Gupta
Mr. Anand Kripalu
Mr. Ananth Narayanan
Mr. Atul Choksey
Mr. B. S. Nagesh
Ms. Hema Ravichandar
Mr. Nikhil Khattau
Mr. Rajen Mariwala
Mr. Rajeev Bakshi
Mr. Rishabh Mariwala
Chairman & Non-Executive
Director
Independent Director
(Ceased to be a Director
w.e.f. April1, 2017)
Non-Executive Director
Managing Director & CEO
Independent Director
Independent Director
Corporate Information
COMPANY SECRETARY &
COMPLIANCE OFFICER
Mr. Surender Sharma
AUDIT COMMITTEE
Mr. Nikhil Khattau - Chairman
Ms. Hema Ravichandar - Member Mr. B. S. Nagesh - Member
Mr. Rajen Mariwala - Member
Mr. Surender Sharma - Secretary to the
Committee
CORPORATE GOVERNANCE COMMITTEE
Ms. Hema Ravichandar - Chairperson
Mr. Anand Kripalu - Member
Mr. B.S. Nagesh - Member
Mr. Rajeev Bakshi - Member
Our People Our Pride
Independent Director
Independent Director
Additional (Independent)
Director
(w.e.f. June 26, 2017)
Independent Director
Additional (Non-Executive)
Director
(w.e.f. May 2, 2017)
Mr. Ashutosh Telang - Secretary to the
Committee
CORPORATE SOCIAL
RESPONSIBILITY COMMITTEE
Mr. Atul Choksey* - Chairman
Mr. Rajeev Bakshi** - Chairman
Mr. Harsh Mariwala - Member
Mr. Rajen Mariwala - Member
Mr. Saugata Gupta - Member
Ms. Priya Kapadia - Secretary to the
Committee
*Ceased to be the Chairman w.e.f.
April 1, 2017
**Elected as the Chairman w.e.f. May 2, 2017
RISK MANAGEMENT COMMITTEE
Mr. Harsh Mariwala - Chairman
Mr. Saugata Gupta - Member
Mr. Vivek Karve - Member & Secretary to
the Committee
Members of top Management
Team - Permanent Invitees
STAKEHOLDER RELATIONSHIP
COMMITTEE
Mr. Nikhil Khattau - Chairman
Mr. Rajen Mariwala - Member
Mr. Surender Sharma - Secretary to the
Committee
MANAGEMENT TEAM
43
Strategic Report
Mr. Saugata Gupta
Ms. Anuradha Aggarwal
Mr. Ashish Joshi
Mr. Ashutosh Telang
Mr. Jitendra Mahajan
Mr. Mukesh Kripalani
Mr. Pankaj Saluja
Mr. Sanjay Mishra
Dr. Sudhakar Mhaskar
Mr. Suresh M. S. Jagirdar
Mr. Vivek Karve
Managing Director & CEO
Chief Supply Chain Officer
Chief Technology Officer
Chief Marketing Officer
Chief Business Process
Transformation & IT
Chief Legal Counsel
BANKERS
Axis Bank Limited, Barclays Bank PLC, BNP
Paribas, Citibank N.A., HDFC Bank Limited,
ICICI Bank Limited, Kotak Mahindra Bank
Limited, Standard Chartered Bank, State
Bank of India, The Hong Kong and Shanghai
Banking Corporation Limited
STATUTORY AUDITORS
M/s. Price Waterhouse, Chartered
Accountants
INTERNAL AUDITORS
Ernst & Young LLP
Chief Operating OfficerSouth East Asia, Middle
East & Africa Business
Chief Strategy, M & A
and New Business
Chief Human
Resources Officer
Chief Operating Officer India Sales & Bangladesh
Business
Chief Financial Officer
COST AUDITOR
M/s Ashwin Solanki & Associates
SECRETARIAL AUDITOR
Dr. K. R. Chandratre
REGISTERED OFFICE
7th Floor, Grande Palladium,
175, CST Road, Kalina,
Santacruz (East), Mumbai 400 098
OUR PRESENCE
Factories - 16 (9 in India and 7 overseas)
Regional Offices - 4 in India
Depots - 32 in India
Overseas Offices - 11
WEBSITES
www.marico.com
www.maricobd.com
www.maricoinnovationfoundation.org
www.parachuteadvansed.com
www.saffolalife.com
www.setwet.com
www.livonhairgain.com
www.livonilovemyhair.com
www.fitfoodie.in
www.artofoiling.com
www.indiaparenting.com/bio-oil/
MARICO LIMITED | Annual Report 2016-17
44
AWARDS AND
ACCOLADES
CORPORATE
• Marico recognized in Forbes India’s Super 50
companies 2016
• Marico India Business received a ‘level 4 TCM
Enabled Company’ by CII on its propriety Total Cost
Management Maturity Model
• Marico won the Risk Management Solution Award in
the Adam Smith Awards Asia 2016
• Marico Bangladesh received a Silver Award for
Excellence in Corporate Governance from Institute of
Chartered Secretaries of Bangladesh
• Marico won the Lakshya Gold Award for their work
on “Demand Sensing Analytics” project in the annual
NITIE Avartan Business fest contest
• Marico Treasury Team was awarded “The Best
Treasury Team in Asia” by Corporate Treasurer
MANAGEMENT
• Ms. Anuradha Aggarwal, Chief Marketing Officer
ranked 8th in Impact's 50 Most Influential Women 2016
• Mr. Mukesh Kripalani, Chief – Business Process
Transformation & IT was honored with the Digitalist
Award 2017 at Mint-SAP Digitalist Conclave
MARKETING
• The Exchange4Media Pitch Top 50 Brands 2016
recognized Saffola in Evergreen category and
Parachute Advansed in Bottom of the Pyramid
category
• Marico Limited won 3 awards at the Exchange 4 Media
‘Primetime” Awards - Saffola Active won a Silver for
Best Integration of Brand & Movie – Ki and Ka, as did
Nihar Naturals #iamcapable for Best use of Regional
Entertainment channel. “Rock the spotlight” with Livon
won a Bronze in the category of best use of Influencers
/ Celebrities
• Marico bags 4 awards at EMVIES 2016, 1 Gold &
2 Silver for Saffolalife and 1 Bronze for Parachute
Advansed Body Lotion
• Parachute Advansed #KhulkeKheloHoli campaign won
a Silver at APPIES 2016
• Black Chic Mega Black and Caivil Fusion Oil won
‘Product Of The Year’ and ‘Best Innovative brand’ award
Our People Our Pride
respectively at Africa Hair Awards 2016
• Saffolalife #protecttherheart wins Gold & Bronze from
IPRCC for its PR Campaign
• Marico won 4 STEVIEs at International Business
Awards 2016, 1 Gold & 1 Silver for Saffolalife best
marketing & PR campaign. Nihar Naturals won 1 Gold &
1 bronze for best marketing & PR campaign
QUALITY
• Marico won 2 awards at World Quality Congress- Best
end to end consumer solutions and 50 most impactful
Quality professionals
• Marico Baddi Unit wins IMC Ramkrishna Bajaj National
Quality Award
HR
• Marico is among the 100 Best Companies for Women
to work in India in a study conducted by AVTAR and
Working Mother Media in 2016
• Marico is among the Top 50 India’s Best Companies
to Work For in the Economic Times and Great Place to
Work Institute’s India’s 2017 study
SUSTAINABILITY
• Marico's Baddi unit awarded CII GreenCo Gold
certification
• Marico’s R&D centre located in Suburban Mumbai,
(“Marks”) received the distinguished IGBC Green
Building Certification for innovative and efficient use
of energy and water, facility management and health
standards
STATUTORY
Reports
46 Management Discussion & Analysis
66 Business Responsibility Report
80 Board's Report
118 Corporate Governance Report
7KLVGLVFXVVLRQFRYHUVWKHƮQDQFLDOUHVXOWVDQG
other developments for the year ended 31st
March, 2017 in respect of Marico Consolidated
comprising its domestic and international
business. The Consolidated entity has been
referred to as ‘Marico’ or ‘Group’ or ‘Company’
in this discussion.
Some statements in this discussion describing
projections, estimates, expectations or outlook
may be forward looking. Actual results may
KRZHYHU GLƬHU PDWHULDOO\ IURP WKRVH VWDWHG RQ
account of various factors such as changes in
government regulations, tax regimes, economic
developments, exchange rate and interest rate
movements, impact of competing products
and their pricing, product demand and supply
constraints within India and the countries within
which the Group conducts its business.
7.1%
India's GDP Growth
UPDATE ON MACRO ECONOMIC INDICATORS
India
GDP GROWTH
5.50
6.50
7.20
7.90
7.10
FY14
FY15
FY16
FY17
(%)
FY13
46
MANAGEMENT DISCUSSION
AND ANALYSIS
Source: Asian Development Bank
Our People Our Pride
India’s burgeoning young
workforce is the largest
and youngest in the world.
Simultaneously, this vast nation
is amid a massive wave of
urbanisation.
As per the Central Statistics Organisation (CSO)
and International Monetary Fund (IMF), India has
emerged as the fastest growing major economy
LQ WKH ZRUOG RYHU WKH ODVW ƮYH \HDUV ,Q India's GDP grew by 7.1%, a tad lower compared
to 2016. The capital formulation was lower than
expected. Moreover, demonetisation brought a
liquidity crunch impacting demand in H2 FY17.
However, India’s economic fundamentals
remain robust. The Forex Reserves stand at
ELOOLRQ 86' XS IURP ELOOLRQ 86' ƮYH
\HDUV DJR 7KH ƮVFDO GHƮFLW DW RI *'3
LV GRZQ IURP ƮYH \HDUV DJR &RQVXPHU
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3.8%. The country is marching towards power
VXƱFLHQF\DFURVVYDULRXVVWDWHVZKLOHWKHSDFH
of constructing roads is sustained at 100 km per
day. These fundamentals auger well for India’s
future.
India’s
burgeoning
young
workforce
is the largest and youngest in the world.
Simultaneously, this vast nation is amid a
massive wave of urbanisation. How India shapes
LWV VLJQLƮFDQW KXPDQ SRWHQWLDO DQG UHLPDJLQHV
its mushrooming towns and cities will largely
determine its future.
India is poised at a critical juncture. It needs
massive investments to create jobs, housing,
and infrastructure to meet the soaring
aspirations of its people. Tidal growth that lifts
all boats will be the key for a prosperous future.
GST will soon usher in one of the biggest
regulatory reforms since independence. It is
expected to improve compliance, further control
LQưDWLRQ LPSURYH WD[ UHYHQXHV DQG FUHDWH D
OHYHOSOD\LQJƮHOGIRUFRPSOLDQWLQGXVWU\SOD\HUV
While it may lead to short term hiccups, over
the medium term, it is expected to simplify the
indirect tax administration and compliance; and
probably pave way for progressive reduction in
tax rates.
47
Vietnam
Vietnam is one of the fastest growing countries
in South East Asia. Since 1990, Vietnam’s GDP
per capita growth has been among the fastest in
the world, averaging at 6.4% a year in the 2000s.
Despite uncertainties in the global environment,
Vietnam’s economy remains resilient. The
country’s medium-term outlook remains
favourable, while its fundamental drivers of
growth – resilient domestic demand and export
oriented manufacturing – remain in force.
According to data issued by the Government
6WDWLVWLFV 2ƱFH *62 LWV *'3 H[SDQGHG E\
6.2% in 2016, just shy of the government’s
projection of 6.3% and slightly above the IMF’s
estimate of 6.1%. The business environment
has improved remarkably with tax reforms and
slashing of ‘red tapism’ in the country.Better
business conditions are sustaining healthy
)', LQưRZV ZKLFK LV DQ LPSRUWDQW JURZWK
driver in Vietnam’s export-oriented economy.
Robust investment, surging exports and the
government’s commitment to macroeconomic
stability prompted credit rating agencies Fitch
and Moody’s to upgrade the country’s outlook
in May to BB- and B1 respectively.
Middle East and North Africa (MENA)
The Middle East, especially the Gulf Cooperation
&RXQFLO*&&FRXQWULHVDUHFXUUHQWO\DƬHFWHG
E\ PDFURHFRQRPLF GRZQWXUQ DQG D GLƱFXOW
job market, primarily due to the slump in oil
prices. This calls for a thorough and challenging
transformation for the GCC countries to be
able to achieve desirable growth. Being highly
dependent on oil, GCC countries have been
GHHSO\ DƬHFWHG E\ WKH UHFHQW RLO SULFH GURS
(~60% since 2013). This has brought macroeconomic instability that hinders job creation
and slows down growth. The dip in oil prices
KDV ODUJHO\ LPSDFWHG *&&oV SXEOLF ƮQDQFHV
predominantly generated by the oil sector, and
has hampered Foreign Direct Investment (FDI).
Only UAE has rebounded to its pre-crisis level.
The slowdown impacted the job market, already
riddled with a large youth unemployment rate
and a population overly employed by stateowned companies. Further, a non-oil private
sector that remains relatively small has limited
the chances of growth and employment. GDP
growth in GCC countries is forecasted at +2.3%
in 2017, far from the growth experienced in the
past.
Looking forward, GCC countries should
decrease their dependence on oil through
GLYHUVLƮFDWLRQ %HVLGHV VZLWFKLQJ IRFXV RI
growth from public to private sector, developing
an ideal environment for SMEs and improving
the banking system’s liquidity and solvency will
help these economies revive.
Egypt has embarked on a major economic
reform programme, including the liberalisation
RIWKHH[FKDQJHUDWHUHJLPHƮVFDOFRQVROLGDWLRQ
measures and reforms in the business
environment. The liberalisation of the exchange
rate regime is a key step towards restoring the
economy’s competitiveness and bolstering
private sector activity which had been severely
impeded by shortages of foreign currency. Yet,
the reforms are exacerbating social pressures
LQ WKH VKRUW WHUP ZLWK LQưDWLRQ UHDFKLQJ VRPH
of the highest recorded rates and currency
depreciating by more than 52% in one year.
GDP is expected to grow by 3.9% in FY17 and
will be largely driven by public investment and
to some extent net exports. Private investment
is expected to pick up only in the second half of
FY17; supported by enhanced competitiveness
following the currency depreciation and the
MARICO LIMITED | Annual Report 2016-17
Statutory Reports
Bangladesh
Bangladesh population is estimated at more
than 160 million. It is largely an ethnically
homogenous society with the highest
population density in the world.
Despite global headwinds that crimped
remittances, Bangladesh’s GDP recorded
robust growth of 7.1% in FY2017 on higher
private investment and exports. The current
DFFRXQWVXUSOXVH[SDQGHGDQGLQưDWLRQVORZHG
Continued high growth will require a rebound
in remittances and higher exports. Productive
jobs are needed in manufacturing and modern
services for the large number of new entrants to
the labour force. Moreover, the country needs to
engage its surplus farm labour and encourage
female workforce participation.
In the long term, Bangladesh promises
substantial potential in terms of socioeconomic growth. A developing economy with a
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FRQVXPHUEDVHIRUWKH)0&*VHFWRUWRưRXULVK
Political stability will further help the cause.
48
gradual implementation of business climate
reforms. Besides, tourism is expected to steadily
recover on the back of a weaker currency.
Prudent monetary policy is projected to bring
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WKH RQHRƬ HƬHFWV RI GHSUHFLDWLRQ VXEVLG\
reforms, and the introduction of VAT dissipate.
According to World Bank’s semi-annual MENA
Economic Monitor, economies in the MENA
region will witness growth of 2.6% in 2017,
down from 3.5% in 2016. This will be primarily
owing to the political unrest, war and low oil
prices. The sustainability of economic recovery
LQWKHUHJLRQZLOOGHSHQGRQWKHHƬHFWLYHQHVVRI
any future peace-building and reconstruction
HƬRUWV
South Africa
South Africa is the second largest economy in
Africa. The country is rich in natural resources
and is a leading producer of platinum, gold,
chromium and iron. From 2002 to 2008, South
Africa grew at an average of 4.5% year-on-year,
its fastest expansion since the establishment
of democracy in 1994. However, in recent years,
successive governments have failed to address
structural problems such as the widening
gap between rich and poor; low-skilled labour
force; high unemployment rate; deteriorating
infrastructure; high corruption; and crime rates.
Consequently, since the recession in 2008,
South Africa’s growth has been sluggish and
below African average. With the South African
GDP declining by 0.3% in 2016 compared to
1.3% expansion in 2015, its economy continues
to languish. While manufacturing recovered and
retail sales posted strong growth in March 2017,
economic activity remains weak and is still at
risk of falling into a technical recession. Two
credit rating agencies downgraded the country,
which could dent private consumption and
investment, and thereby dampen its economic
prospects. This spells bad news at a time when
DQHZSROLWLFDOFULVLVLVHQJXOƮQJWKHHPEDWWOHG
President and could distract the government
IURPHFRQRPLFDƬDLUV
Economic growth is projected to continue to
be weak in 2017 before picking up moderately
in 2018. The revival of the economy will be on
the back of rising private consumption and
exports due to recovery in commodity prices
and growth in export markets. Unemployment
DQG LQHTXDOLW\ ZLOO UHPDLQ KLJK UHưHFWLQJ ODUJH
VNLOOJDSVDQGORZHGXFDWLRQTXDOLW\,QưDWLRQKDV
been above target, due to the rand depreciation
and rising food prices, but is easing.
Our People Our Pride
OVERVIEW OF THE CONSUMER
PRODUCTS INDUSTRY
India’s FMCG sector at USD 41.1 billion is one
of the largest sectors in India [Source: Nielsen].
2YHUWKHODVWƮYH\HDUVWKHVHFWRUKDVJURZQDW
compounded annual growth rate of 9.3%, ahead
of the GDP growth. During the year under review,
WKH JURZWK UDWH KDV WDSHUHG RƬ PDLQO\ GXH WR
GHưDWLRQ DQG WKH LPSDFW RI GHPRQHWLVDWLRQ
While sentiment appears to have improved, it
has not yet translated to tangible improvement
in consumption across the sector. However,
there is a silver lining. The recent ‘normal
monsoon’ forecast augurs well for the sector.
Some other factors expected to drive the
recovery are a stronger GDP growth (leading to
investments in various sectors, which eventually
results in employment generation); moderate
FRQVXPHU LQưDWLRQ HQDEOLQJ JRYHUQPHQW
policy framework; continuing input cost
EHQHƮWV *RRGV DQG 6HUYLFH 7D[ *67 'LUHFW
%HQHƮW7UDQVIHU6FKHPH'%72QH5DQN2QH
Pension (OROP) for ex-Military servicemen; and
increased pay-outs to government employees
consequent to implementation of 7th Pay
Commission recommendations.
Indian consumer segment is broadly
segregated into urban and rural markets, and it
attracts companies from across the world. The
sector comprises a large middle class, relatively
ODUJH DƲXHQW FODVV DQG D VPDOO HFRQRPLFDOO\
disadvantaged class, with spending anticipated
to more than double by 2025.
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V FRQVXPHU FRQƮGHQFH LQGH[ VWRRG DW
136 in the fourth quarter of calendar 2016. It
topped the global list of countries on the same
parameter, as a result of strong consumer
sentiment, according to market research
agency, Nielsen. Further, in the discretionary
spending category, 68% respondents from
India indicated the next 12 months as being
good to buy; thus, ensuring once again that
India leads the global top 10 countries on this
parameter during the quarter.
Global corporations view India as one of the
key markets from where future growth is likely
to emerge. The growth in India’s consumer
market would be primarily driven by a favourable
demographics and increasing disposable
incomes. McKinsey Global Institute’s recent
study (MGI) suggests that if India continues to
grow at the current pace, average household
incomes will triple over the next two decades.
This will help India jump to the spot of the world’s
ƮIWKODUJHVW FRQVXPHU HFRQRP\ E\ XS
from the current 12th position.
India’s robust economic growth and rising
household incomes are expected to increase
consumer spending to US$ 3.6 trillion by 2020#.
#
According to a report by Boston Consulting Group (BCG), a
JOREDO FRQVXOWLQJ ƮUP DQG WKH &RQIHGHUDWLRQ RI ,QGLDQ
Industry(CII), an all-India industry association.
†
According to a report by The Associated Chambers
of Commerce of India (ASSOCHAM), an all-India industry
association and TechSci Research, a market research
company.
OVERVIEW OF THE BEAUTY AND
WELLNESS BUSINESS
The personal care industry makes up 22%
of India’s market for consumer-packaged
goods and experts agree that India is full of
opportunities and is a potential gold mine for
many beauty and personal care companies.
As per analysts, the Ayurvedic market is
estimated to be at ` 4,500 crore at present (~700
million USD). Currently, the herbal products
form 6-7% of the overall personal care products
market; while the estimates are that it could
grow to about 10% of the segment by FY20 as
the trend accelerates. Consequently, various
players are rebooting their business strategies
and investing in new products or making new
DFTXLVLWLRQVWRUHDSLQWKHEHQHƮWRIWKHKHUEDO
wave. With a CAGR of 40%, the spa industry is
WKHVXEVHFWRUZLWKWKHPRVWVLJQLƮFDQWJURZWK
prospects among all personal care subsectors
in India.
$FFRUGLQJ WR LQGXVWU\ H[SHUWV WKH PDUNHW VL]H
of India’s beauty, cosmetics and grooming
market will touch 20 billion USD by 2025 from
the current level of 6.5 billion dollars. The rising
awareness of personal care products, growing
disposable incomes, changes in consumption
SDWWHUQV DQG OLIHVW\OHV ZLOO LQưXHQFH WKH
industry. Moreover, improved purchasing
power of women promises exciting times for
the personal care industry. These trends are
anticipated to boost the personal care market
in India and raise the consumption of personal
FDUH SURGXFWV DQG VHUYLFHV WKHUHE\ RƬHULQJ
extensive opportunities for domestic and
international players.
The speed and stress of modern day living in
India has brought the need for 'wellness' to the
centre stage, paving way for accelerated growth
of this segment.
The wellness industry in India is set to cross
the ` 500 billion mark by the end of this year.
The latest trends depict that the market will rise
by 30% every year.
Another important factor that has driven the
beauty and wellness business to a successful
level is the increase in disposable income.
The contemporary population is well aware
of health and tends to inculcate new ideas for
healthy lifestyle immediately. Going forward, the
presence of appropriate supply channels will
KHOS LQ UHDFKLQJ WKH HQG FXVWRPHUV HƱFLHQWO\
This is the right time to harness the potential
market prospect by utilising the scope available
with the wellness companies that provide
franchise all over the country.
THE MARICO GROWTH STORY
Marico revenues stood at ` 5,986 crore (USD
886 million) for FY17, recording a decline of
1% over FY16. Volume growth for the year was
at 4%. The value growth was lower owing to
price reductions in the coconut oil portfolio in
India and Bangladesh and currency devaluation
in the Egypt region in H2FY17. The operating
margin was at 19.5%. The business reported
bottom line of ` 799 Crores (USD 119 million), a
satisfactory growth of 12% over last year.
2YHUWKHSDVWƮYH\HDUV0DULFRoVWRSOLQHDQG
PAT have grown at a compounded annual growth
rate (CAGR) of 10% and 18% respectively. This
places Marico in the top quartile in this sector.
India’s FMCG sector at USD
41.1 billion is one of the largest
sectors in India. Over the last
five years, the sector has grown
at compounded annual growth
rate of 9.3%, ahead of the
GDP growth.
MARICO LIMITED | Annual Report 2016-17
49
Statutory Reports
The maximum consumer spending is likely to
occur in food, housing, consumer durables,
and transport and communication sectors. The
report further stated that India's share of global
consumption would expand more than twice to
5.8% by 2020.
The growing purchasing power and rising
LQưXHQFH RI WKH VRFLDO PHGLD KDYH HQDEOHG
Indian consumers to spend more on
discretionary items. India’s consumer sector
has grown at an annual rate of 5.7% between
FY2005 and FY2015. Annual growth in the
Indian consumption market is estimated to
be 6.7% during FY2015-20 and 7.1% during
FY2021-25.
India’s fast-moving consumer goods (FMCG)
companies are now collectively bigger than their
multinational peers. The combined revenue of
India's seven leading FMCG companies stood
at US$ 11.1 billion in FY 2015-16, vis-à-vis US$
9.4 billion revenues generated by select seven
multinational companies (MNCs)†.
Domestic Business: Marico India
50
Marico India, the domestic business, achieved
a turnover of ` 4,579 Crores (USD 683 million)
in FY17, a decline of 2% over last year. While
it recorded a volume growth for FY17 at 4%,
its value growth diminished owing to price
reductions in the coconut oil portfolio. The
black swan event of demonetisation in Q3FY17
acted as a dampener on the overall annual
volume growths due to liquidity crunch in India’s
informal economy. The operating margin for
the India business was healthy at 24.3% before
corporate allocations. Higher operating margins
can be attributed mainly to gross margin
expansion led by softer input costs.
Coconut Oil
Parachute’s rigid portfolio (packs in blue
bottles) recorded a volume growth of 4% for
FY17 over FY16. Going forward, the volume
growth in Parachute rigid is likely to remain in
the range of 5-7%. Moreover, Marico aimed to
protect the consumer franchise and maintain
the volume momentum over maintaining shortterm margins. Thus, the Company restricted
the price increase in March 2017 to 8% in
UHVSRQVH WR DQ LQưDWLRQ RI LQ FRPPRGLW\
prices in H2FY17. For the full year, copra prices
were down 12% corresponding to 14% price
GHưDWLRQLQWKHFRFRQXWRLOFDWHJRU\
The non-focused part of the portfolio
(comprising Nihar and Oil of Malabar along
ZLWKSRXFKSDFNVLQ3DUDFKXWHUHPDLQHGưDWLQ
volume terms during the year.
Of the total coconut oil market, approximately
30-35% in volume terms is available in loose
form. This loose component provides headroom
for growth to branded players. The Company’s
ưDJVKLS EUDQG 3DUDFKXWH EHLQJ WKH PDUNHW
OHDGHU LV ZHOO SODFHG WR FDSWXUH D VLJQLƮFDQW
Parachute’s rigid
portfolio (packs
in blue bottles)
recorded a volume
growth of 4% for
FY17 over FY16.
Our People Our Pride
share of this growth potential on a sustainable
basis. The Company would continue to exercise
a bias for franchise expansion as long as margins
remain within a band. Towards that end, Marico
will continue to invest behind brand building,
distribution expansion and tactical inputs to
remain competitive. It is generally observed that
D PRGHUDWH LQưDWLRQDU\ HQYLURQPHQW VZLQJV
the competitive position to the Company’s
advantage putting pressure on the working
capital requirements of marginal players. This
leads to market share gain and better volume
growths.
During the year under review, Marico’s
coconut oil portfolio achieved a volume and
value market share at 58% and 59% on MAT
basis respectively.
Foods: Super premium refined edible oils and
oat cereals
7KH6DƬRODUHƮQHGHGLEOHRLOVIUDQFKLVHFORFNHG
an 8% growth in volume terms during FY17 over
FY16.
7KH 6DƬROD UDQJH RI EOHQGHG UHƮQHG RLOV
DYDLODEOH LQ ƮYH YDULDQWV RSHUDWHV LQ WKH
premium and super-premium niches of the
UHƮQHGHGLEOHRLOVPDUNHW7KHVHRLOVSURYLGHD
balance of PUFA (polyunsaturated fatty acids)
and MUFA (mono-unsaturated fatty acids); and
thus, help consumers to proactively manage a
healthy lifestyle. With rising awareness about
healthy living in the country, this provides
VLJQLƮFDQW FKDQFHV IRU JURZWK 7KH &RPSDQ\
has been driving growth through building
relevance of the Brand among proactive
KHDOWKFRQVFLRXV FRQVXPHUV ZLWK 6DƬROD
Active communication on the ‘Stay Fit & Active’
proposition.
Over the last few years, a new sub-segment of
super premium edible oil has emerged and has
been growing rapidly. Marico believes that it can
SDUWLFLSDWHLQWKLVJURZWKZLWKLWVGLƬHUHQWLDWHG
proposition. Accordingly, in Q4FY17, it launched
WKHƮUVWRILWVNLQGEOHQGRI2OLYHDQG)OD[VHHG
RLOXQGHUDVXEEUDQG6DƬRODn$XUDo$EOHQGRI
WZR VXSHUIRRGV 6DƬROD $XUD FRPELQHV WKH
EHQHƮWVRI2PHJDDQG$QWLR[LGDQWVLQVLQJOH
oil. It has been launched in Extra Virgin and
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WKLV ODXQFK 6DƬROD UHDƱUPHG LWV SRVLWLRQ LQ
WKH SUHPLXP VHJPHQW RƬHULQJ KHDOWK EHQHƮWV
across divisions.
The brand gained market share of 283 bps and
further strengthened its leadership position in
WKHVXSHUSUHPLXPUHƮQHGHGLEOHRLOVVHJPHQW
to 66% during the 12 months ended March
2017. The near-term outlook for the blended oil
franchise is positive with double digit volume
growth prospects.
Value-added hair oils
Marico’s value-added hair oil brands registered
a volume growth of 4% during the year,
despite declining by 12% in Q3FY17 due to
demonetisation. Marico continues to grow
faster than the value added hair oils market of
` 6,500 crore (USD 970 million). During the year,
12
14
21
FY07
FY12
FY17
6DƬRODoV IRUD\ LQWR KHDOWK\ IRRGV 6DƬROD
Oats continues to consolidate its strong second
position in the oats category with a value
PDUNHWVKDUHRI6DƬROD2DWVLVWKHKLJKHVW
distributed oats brand in the country. Focus on
YDOXHDGGHGRƬHULQJVLQWKHRDWVVHJPHQWKDV
enabled the Company to capture 69% value
VKDUHLQWKHưDYRUHGRDWVPDUNHWRQD0$7EDVLV
The Company’s ability to localise the product to
suit the Indian palate and drive consumption
by increasing the occasion of use apart from
breakfast to in-between meals has been the
key catalyst in creating and succeeding in this
category.
During FY17, the category slowed down due SHARE OF HAIR OILS TO GROUP
to strong the competitive headwinds, resulting REVENUE
LQưDWJURZWK7KH&RPSDQ\UHDOLVHVWKDWIXWXUH
growth will come from expanding the category
10 YEAR VALUE
with continuous innovation in product and
CAGR >20%
SDFNDJLQJ DQG LW KDV WDNHQ GHƮQLWLYH VWHSV
towards this end. Marico will further invest in
sampling and distribution, which are the other
two growth pivots for the segment. Besides, the
Company is focused on improving margins with
concentrated cost management initiatives that
will provide resources to plough back for growth.
7KH &RPSDQ\ ODXQFKHG 6DƬROD 0XOWLJUDLQ
)ODNHV LWV QHZ RƬHULQJ LQ WKH EUHDNIDVW FHUHDO
space in February ’17 in the cities of Mumbai
DQG %HQJDOXUX 6DƬROD 0XOWLJUDLQ )ODNHV
EULQJV WRJHWKHU WKH SRZHU RI ƮYH JUDLQV LQ
one breakfast bowl and is a superior breakfast
RSWLRQWRRWKHUVLQJOHJUDLQưDNHV
Over the past five years, Marico’s
top line and PAT have grown at
a compounded annual growth
rate (CAGR) of 10% and 18%
respectively. This places Marico
in the top quartile in this sector.
MARICO LIMITED | Annual Report 2016-17
51
Statutory Reports
the Company further strengthened its market
leadership in the segment by 150 bps to 33%
volume share (for 12 months ended March
2017) and with value share gain of 100 bps to
26% for the same period. The Company will
continue to focus on premiumisation to drive
growth in the category. The Company’s valueadded hair oils portfolio crossed ` 1,250 crore
(USD 187 million) landmark this year with a
bouquet of four strong brands.
Value-added hair oils portfolio has grown
at 10 year CAGR of more than 20% and now
accounts for 21% of the Company’s business
in India.
52
Nihar Shanti Amla is the key growth driver, and
continues to gain market share. It achieved a
volume market share of 39% for 12 months
ending March 2017 in the Amla hair oil category
(MAT March '16: 37%). The exit market share of
1LKDU6KDQWL$PODDWUHưHFWVWKHFRQWLQXHG
strong growth trajectory. The increased scale of
WKH IUDQFKLVH HQDEOHV WKH &RPSDQ\ WR EHQHƮW
from operating leverage, thereby improving net
margins, despite competitive pricing. Marico
aims to become the volume market leader in the
Amla hair oil category in near future.
Three growth pivots: (a) Targeting the bottom
of the pyramid segment; (b) inducting a new
consumer base and (c) premiumising the
category will bring further growth to the category.
As an endeavour to further strengthen its
presence in the low unit pack segments, Marico
forayed into low unit packs with a prototype of
` 1 sachet of Parachute Advansed Jasmine hair
oil in Gujarat and Nihar Naturals hair oil in Bihar.
The Company’s prototype of ` 5 spout pack
under Nihar Shanti Amla is now being extended
to one more Hindi speaking state. During the
year, the Company also launched an ` 10 rigid
bottle of Parachute Advansed Jasmine hair
oil and Nihar Naturals hair oil to fast-track the
consumer recruitment process.
Nihar Naturals Sarson Kesh Tel, a valueadded mustard oil targeting loose mustard
oil pool continues to expand its reach, post
its launch across markets in North and parts
of East India. It has a meaningful share in the
perfumed mustard oil category (MAT March
’17: 6%). The Company will continue to invest in
the brand encouraged by a large source pool of
unorganised mustard oil. The Company’s rural
go-to-market activities will help further scale up
of these initiatives.
Value-added hair oils
portfolio has grown at 10
year CAGR of more than
20% and now accounts
for 21% of the Company’s
business in India.
Our People Our Pride
Marico aims to become the
volume market leader in the
Amla hair oil category in near
future.
Parachute Advansed Aloe Vera Hair Oil was
launched in the markets of Andhra Pradesh,
Telangana and Tamil Nadu in November after
being prototyped in Maharashtra for a year.
The Company will continue to aggressively
invest behind the brand in these markets to
premiumise it.
Hair fall control
Hair fall control oils now comprise 14% of the
WRWDO YDOXHDGGHG KDLU RLOV PDUNHW 7KH VL]H RI
this sub-category is now ` 900 Crore (USD 134
million).
Marico participates in the segment with two
YDOXHDGGHGRƬHULQJV
• Parachute Advansed Ayurvedic Oil, with
presence in southern states, continues to
hold market shares.
• Parachute Advansed Ayurvedic Gold Hair
oil, operating in all non-southern states has
been performing below its action standards.
However, the Company continues to be
excited about the brand’s long-term potential
and therefore, will continue to invest in brand
building and expansion initiatives.
The Company expects to cross top line
milestone of ` 100 Crore (USD 15 million) by
FY19.
The Value-added hair oils category has
EHHQ DPRQJ WKH IDVWHVW JURZLQJ ODUJH VL]HG
FMCG segments in India and compares very
well with other highly penetrated personal
care categories. The new-age hair oils in the
developed markets could create a superpremium segment in India too. This serves to
emphasise that hair oils can drive both beauty
and nourishment. Marico will continue to focus
on upgrading the portfolio by playing across
segments that cater to consumer needs of
nourishment and problem solution.
Youth portfolio
value growth in FY17. Moreover, it has started
to unlock the potential in e-commerce channel.
In a bid to accelerate trials, Livon prototyped
its sachet at ` 3 in Gujarat in October, 2016;
which has performed well with reach of one lakh
outlets in less than six months of launch.
The categories of hair gels and creams (Set
Wet and Parachute) and leave-in conditioners
(Livon and Silk and Shine) are at a very nascent
stage; as their penetration in India is far lower
as compared to other emerging markets. Being
market leaders, the Company is determined to
innovate and grow the market. Overall, given the
initiatives rolled out for all three verticals, the
Distribution
Marico’s rural sales declined by 6% while
XUEDQ VDOHV ZHUH ưDW LQ )< 7KLV \HDU WKH
rural channel remained sluggish in H1FY17 as
an aftermath of bad monsoons in the last two
\HDUVDQGZDVLQưXHQFHGE\GHPRQHWLVDWLRQLQ
H2FY17, despite a good monsoon. Hence, the
Company’s rural sales dropped to 31% of total
India sales in FY17.
Sales in Modern Trade (10% of the India
turnover) continued the good run with growth of
12% in FY17. CSD and institutional sales (7% of
the domestic turnover) declined by 3% in FY17
due to stock correction.
Go-To-Market Transformation has been
LGHQWLƮHG DV RQH RI WKH SLOODUV RI ORQJWHUP
growth. The Company has been systematically
investing behind processes and IT infrastructure
to augment its capabilities. An update on
the Company’s go-to-market transformation
journey during FY17 is as under:
• Project ONE (outlet network expansion) aims
at expanding the direct distribution of Marico
and thus, has added 86,000 outlets across
34 cities over the last three years, yielding
a turnover of ` 88 Crores every year. The
Company plans to add further 14,000 outlets
in FY18.
• The new Distributor Management System
along with Order Management Platform
ZDVUROOHGRXWSDQ,QGLD,WOHGWRVLJQLƮFDQW
increase in range service levels with
optimised inventory leading to lower loss of
sales.
• Handheld devices powered with visual
analytics and rich dashboards have enabled
WKHVDOHVIRUFHWRWDUJHWLWVHƬRUWVDWWKHULJKW
channel and right outlets. This has helped
JHQHUDWH HƬHFWLYH VDOHV OHDGV DQG LPSURYH
VDOHVIRUFHHƬHFWLYHQHVV
• The Assortment Mix Analytics has been
successfully implemented fully in one city,
Project ONE (outlet network
expansion) aims at expanding the
direct distribution of Marico and
thus, has added 86,000 outlets
across 34 cities over the last three
years, yielding a turnover of ` 88
Crores every year.
MARICO LIMITED | Annual Report 2016-17
53
Statutory Reports
The youth brands portfolio plays in following
categories i.e., hair gels, deodorants, hair gain
tonic and leave-in serums. For the full year,
the franchise grew by 5% in value terms. The
&RPSDQ\KDVGHƮQHGDPXOWLSURQJHGVWUDWHJ\
for long-term sustainable growth of this
business:
1. Set Wet Gels: Drive penetration and
category growth;
2. Set Wet Deodorants: Drive market share
WKURXJK D GLƬHUHQWLDWHG LPDJHU\ DQG LQ
store presence;
3. Livon Hair Gain: Drive trials and repeats
WKURXJK HƱFDFLRXV SURGXFW RƬHULQJ
while simultaneously blocking out unfair
competition with innovative packaging; and
/LYRQ +DLU 6HUXP 'ULYH DƬRUGDELOLW\
penetration and relevance in the niche
segment of hair serums.
The value market share of Set Wet gel
has grown by 391 bps in last 12 months and
currently stands at 58%. The gels now comprise
more than 40% of total youth portfolio. Set Wet
deodorants portfolio achieved a volume market
share of about 3.3% for the 12 months ended
March 2017 in the deodorants category (MAT
March '16: 2.6%).
Livon serum’s core proposition of ‘salon
ƮQLVK KDLU DW KRPHo ODXQFKHG LQ $XJXVW with a focus on metro markets has been building
relevance for the brand. Despite the macroeconomic headwinds post demonetisation, the
brand showed signs of positive traction with
&RPSDQ\ LV FRQƮGHQW RI D GRXEOHGLJLW YDOXH
growth in FY18.
54
•
•
•
and has now been extended to two more
cities in order to help drive cross-sales
opportunities.
The Company completed one successful
prototype of the geo-tag based analytics-led
route optimisation in Mumbai. The project
has the potential to optimise the feet on
street and drive higher outlet coverage with
redeployment of the released manpower.
Output from the analytics models of Category
Growth Drivers and Market Mix modelling
have been used for the annual planning of
resource allocation between marketing- and
sales-led inputs.
The Company also launched a new Demand
Sensing model, which helps improve
response to intra-month forecast changes,
thereby lowering the possibility of stockouts.
Project Edge
The Company, during Q1FY17 launched Project
EDGE, a new initiative aimed at improving the
HƱFLHQF\ DQG HƬHFWLYHQHVV RI FXUUHQW WUDGH
and marketing spends. The savings from this
project will be redeployed to fuel growth –
hard working spends to accelerate growth,
distribution expansion and so on. The gains
started accruing from Q4FY17 and annualised
gains of ~` 35 crores will accrue from FY18.
These will be ploughed back to further augment
the sales infrastructure and fuel volume growth.
E-Commerce
As part of its plan to remain relevant to the
internet-savvy new age consumers and other
stakeholders, the Company, in coming quarters,
will focus on various digital initiatives. As a result,
e-commerce has become an important pivot of
JURZWK7KH&RPSDQ\KDVWDNHQGHƮQLWLYHVWHSV
to stay ahead of the curve in this space; and has
LGHQWLƮHG DQG DSSRLQWHG GHGLFDWHG UHVRXUFHV
for e-commerce including top-class consulting
resources.
The non-coconut oil
portfolio is now ~23%
of the total business in
Bangladesh compared to
10% five years back.
Our People Our Pride
Summing up the story of India Business in FY17
FY17 was an eventful year for Marico. The
rural demand remained weak due in FY17 due
to various factors, but returned to normalcy in
40RUHRYHUZKLOH+ZDVGHưDWLRQDU\IRUWKH
&RPSDQ\ + ZDV LQưDWLRQDU\ HVSHFLDOO\ 4
There are three macro factors to consider as the
&RPSDQ\SODQVIRUWKHQH[WƮQDQFLDO\HDU
r ,QưDWLRQLQNH\FRPPRGLWLHV
• GST, India’s biggest indirect tax reform ZKLOH LQ WKH ORQJ UXQ LW ZLOO EH EHQHƮFLDO IRU
organised players, it will bring near-term
uncertainties that may shrink trade pipeline.
This will lead to volatility and uncertainty at
least in H1FY18; and
• Monsoon
With this backdrop, the Company is targeting
8-10% volume growth and healthy market share
gains. Going forward, Marico will support its
growth strategies with increased investment
in core portfolio, aggressive new product
launches, distribution expansion, and judicious
call on pricing and tighter cost management.
International FMCG Business: Marico
International
Marico’s international business (its key
geographical constituents being Bangladesh,
South East Asia, the Middle East, Egypt and
South Africa) comprised 23% of the Marico
Groups turnover in FY17. The business reported
a 1% constant currency growth (volume growth
of 3%) during the year. The severe macroeconomic headwinds during H2FY17 in the
MENA region have led to the muted growth
of the overall international business in FY17.
Excluding MENA, international geographies
grew at a constant currency rate of 5% in
FY17. The operating margin for the full year
was healthy at 16.5% (before corporate costs
allocations).
During the year, the international business
continued to focus on the key pivots of growth
in its chosen emerging markets of Asia and
Africa:
1. Aggressive growth in non-Parachute
portfolio in Bangladesh
2. Recovery in the Middle East and South East
Asia
3. Go-to-market transformation in Egypt
4. Investment in new markets
Overall, the strategy of focusing on
strengthening the core and investing behind
capabilities has started showing positive results
and should help accelerate growth in coming
years.
Bangladesh (44% of the International
Business)
South East Asia (28% of the International
Business)
Business in South East Asia (of which Vietnam
LVDVLJQLƮFDQWFRQWULEXWRUJUHZE\LQ)<
in constant currency terms. In Vietnam, X-Men
maintained its leadership in male shampoos and
attained market leadership in the male aerosol
deodorants category. Over the medium term,
the Company remains well poised to participate
in the category growths. The Foods business
also delivered healthy growths during the year.
The Company continues to scale its presence
in neighbouring countries like Myanmar. Marico
ended the year in Myanmar with a turnover of
USD 7 million.
this franchise at a high single-digit constant
currency growth in FY18.
The trend of consumer upgradation from base
oils to value-added hair oils continued during
The Middle East and North Africa (MENA)
the year. Riding on this trend, the Company’s
(15% of the International Business)
value-added hair oils portfolio grew at a rate of
The MENA business declined by 13% in
14% in constant currency terms led by strong
constant currency terms in FY17 over FY16. As
JURZWKLQWKHưDJVKLSEUDQGn%HOLSKRROo2YHUDOO
the macro headwinds continued, the Company
the non-coconut oil portfolio grew by 10% in
constant currency terms in FY17. To mitigate
the impact of increase in inputs costs, the
Company initiated price increase of 8% in valueadded hair oils (VAHO) portfolio in the later part
of Q4FY17.
,QWKHUHFHQWSDVW0DULFRKDVPDGHVLJQLƮFDQW
investments to expand its non-coconut oil
portfolio such as value added hair oils (VAHOs),
deodorants, gels, leave-in conditioners, body
lotion, packaged masala oats and premium
edible oils. These products have been accepted
well and are expected to create a portfolio,
going forward. Consequent to these initiatives,
the non-coconut oil portfolio is now ~23% of chose to correct the distributor inventory levels
the total business in Bangladesh compared to in Q4FY17, both in the Middle East and Egypt
ƮYH\HDUVEDFN7KHQHZODXQFKHVRƬHUD businesses.
MARICO LIMITED | Annual Report 2016-17
55
Statutory Reports
The Bangladesh business reported a topline
constant currency decline of 2% (volume
growth of 2%) in FY17 due to price corrections
of Parachute Coconut Oil on a Y-o-Y basis.
Parachute coconut oil declined by 5% in
constant currency terms (volume decline of 1%)
during the year; however, it further consolidated
leadership position with 86% volume market
share. With commodity prices increasing, the
Company has increased the prices in the
coconut oil portfolio by 10% towards the end of
)<7KLVZLOOHQVXUHLQưDWLRQOHGYDOXHJURZWK
in FY18. The scope of growth in coconut oil
segment is limited as the category has matured.
+RZHYHUWKH&RPSDQ\LVFRQƮGHQWRIJURZLQJ
substantial proposition for future growth. The
Company is leveraging its strong distribution
network and learning from the India market to
quickly scale up its new product introductions
in Bangladesh. The non-coconut oil portfolio
is likely to become ~30-40% over next two to
three years from the current share of ~ 23%.
Overall, in the near term, the Company is
FRQƮGHQW RI GHOLYHULQJ D GRXEOHGLJLW FRQVWDQW
currency growth in this important market.
56
CONSOLIDATED RESULTS OF
OPERATIONS – AN OVERVIEW
The Middle East business declined by 19% in
FY17 on constant currency basis, while the
Egypt business declined by 4% in FY17 in
constant currency terms.
Egyptian Pound (EGP) has depreciated by
52% against INR over the last 12 months putting
pressure on margins and value growth.
We remain cautiously optimistic about
this region in the near term. Given the equity
of brands such as Hair Code in Egypt and
Parachute in the Middle East, we remain positive
about the medium-term outlook on these
markets. Overall, a marathon innings will be
required for long-term victory in this region.
TOTAL INCOME
South Africa (7% of the International Business)
1.
During the year ended 31st March 2017 (FY17),
Marico registered consolidated revenue from
operations of ` 5,936 crore, a decline of 1% over
previous year. The volume growth underlying
this revenue growth was 4%. The value growth
was lower owing to price reductions in the
coconut oil portfolio and currency devaluation
in the Egypt region in H2FY17.
3URƮWDIWHUWD[3$7IRU)<ZDV` 799 crore,
a growth of 12% over FY16.
Our total income consists of the following
The business reported a constant currency
growth of 5% during the year, despite
challenging macro conditions.
Revenue from operations includes sales
from ’consumer products’ - including
coconut oil, value-added hair oils, premium
UHƮQHG HGLEOH RLOV DQWLOLFH WUHDWPHQWV
fabric care, functional and other processed
foods, hair creams and gels, hair serums,
shampoos, shower gels, hair relaxers and
straighteners, deodorants; and other similar
consumer products, by-products, scrap
sales and certain other operating income.
2
WKHU LQFRPH SULPDULO\ LQFOXGHV SURƮWV RQ
sale of investments, dividends, interest and
miscellaneous income.
The following table states the details of income
from sales and services for FY17 and FY16
(` Crores)
Particular
Revenue from
Operations
Summing up the story of International
Business in FY17
FY17 has been a tough year for Marico’s
international business as a whole. The business
KDV DOPRVW UHPDLQHG ưDW FRPSDUHG WR ODVW
year. On the positive side, the EBITDA margins
have remained healthy. Further, there have
been green shoots. The value-added hair oil
portfolio in Bangladesh is looking up and the
Vietnam market is growing at a healthy pace
Growth in new country markets such as Nepal
and Myanmar is promising. On the downsides,
MENA region has been at the receiving end of
stress and turmoil and we remain cautiously
optimistic about this region.
Our People Our Pride
FY17
FY16
5,935.9
6,024.5
Other Income
97.3
93.3
Total Income
6,033.2
6,117.8
There has been 1% decline in revenue from
operations on account of 2% decline in Marico
India and 1% growth in Marico International.
EXPENSES
The following table sets the expenses and
FHUWDLQRWKHUSURƮWDQGORVVDFFRXQWOLQHLWHPV
for the years FY17 and FY16:
Particular
% of Revenue
5,935.9
2016
` Crores
% of
Revenue
6,024.5
Expenditure
Cost of Materials
2,849.1
48.0%
3,119.0
51.1%
Employees Cost
404.2
6.8%
373.4
6.2%
Advertisement and Sales Promotion
659.5
11.1%
692.7
11.5%
Other Expenditure
PBIDT margins
Depreciation, Amortisation and
Impairment
Finance Charges
863.9
14.6%
829.3
13.8%
1,159.3
19.5%
1,051.4
17.5%
90.3
1.5%
94.9
1.6%
16.6
0.3%
20.6
0.3%
Tax
337.7
5.7%
305.4
5.1%
3URƮWDIWHU7D[
798.6
13.5%
711.5
11.8%
Cost of materials
Cost of material comprises consumption of raw
PDWHULDOSDFNLQJPDWHULDOVHPLƮQLVKHGJRRGV
SXUFKDVH RI ƮQLVKHG JRRGV IRU UHVDOH H[FLVH
duty and increase or decrease in the stocks
RI ƮQLVKHG JRRGV E\SURGXFWV DQG ZRUN LQ
progress.
The prices of copra, one of the main
ingredients, declined by 12% compared to last
year. Rice bran oil prices were up 17%, while
OLTXLGSDUDƱQSULFHVGURSSHGE\GXULQJWKH
\HDUDQGVDƲRZHURLOSULFHVURVHE\+'3(D
key ingredient in packaging material) price was
down by 2% compared to FY16. Considering
copra accounts for a major proportion of input
costs, the overall cost of materials reduced
by 3% during FY17 leading to gross margin
expansion.
Employee cost
year under review, employee cost grew by 8%
over FY16 on account of annual salary revisions
RƬVHWE\UHYHUVDOLQ6WRFN$SSUHFLDWLRQ5LJKWV
(STAR) provisions and lower employee costs
LQ ,15 WHUPV GXH WR WKH VLJQLƮFDQW FXUUHQF\
devaluation in Egypt.
Advertisement and Sales Promotion (ASP)
The Company continues to invest in existing and
new products. ASP spends on new products
comprises a meaningful part of the overall ASP.
Overall, decrease in ASP spends for the full year
was 5%. The Company increased its ASP spends
by 5% in H1FY17 but post demonetisation
in Q3FY17, it pull backed the ASP spends
LQ +)< 7KLV HQVXUHG HƬHFWLYHQHVV RI
spends in tough and volatile macro-economic
conditions. However, the Company intends to
continue spending on ASP in the near term for
ensuring long-term sustainable growth. The
Company expects to operate in a band of 1112% in the medium term.
Employee cost includes salaries, wages, annual
performance incentives, provision towards
long-term incentives, statutory bonus and
gratuity, contribution to provident and other Depreciation, amortisation and impairment
IXQGV DQG VWDƬ ZHOIDUH VFKHPHV H[SHQVHV For the year as a whole, depreciation has
The Company has an extensive process of decreased from ` 94.9 crore in FY16 to ` 90.3
performance
management
enhancement crore in FY17. The decrease is on account of the
through the deployment of MBR (Management one-time depreciation impact due to change in
By Results), which is intended to create an useful life of moulds in FY16.
environment, where employees are encouraged
to challenge and stretch themselves. Based
on the Company’s target achievement
and the individual’s performances against
JRDOV LGHQWLƮHG SHUIRUPDQFH LQFHQWLYHV DUH
determined. Long-term incentive provisions are
towards Employee Stock Option Plan (ESOP)
and Stock Appreciation Rights Scheme (the
Company’s long-term incentive plan). During the
During the year ended 31st
March 2017 (FY17), Marico
registered consolidated
revenue from operations of
` 5,936 crore
MARICO LIMITED | Annual Report 2016-17
Statutory Reports
2017
` Crores
Revenue from Operations
57
For the year ended March 31,
Indian Accounting Standard
2%
Total
863.9
829.3
4%
a.
b.
Fixed Expenses include items such as rent,
legal and professional charges, foreign
exchange losses and donation. The hit
on account of realised exchange losses
on repayment of external commercial
borrowing (ECB) was lower by ` 30.4 Crore
in FY17 compared to FY16. The ECB was
borrowed to fund the acquisition in Vietnam
LQ )< ([FOXGLQJ WKH VDPH RWKHU Ʈ[HG
expenses have increased by 23% largely
due to increased professional charges and
costs towards enhancement of IT and sales
infrastructure.
Variable Expenses include items such as
freight, subcontracting charges, power and
fuel, warehousing, input and output taxes,
among others. The variable expenses have
increased by 2%; in line with the volume
JURZWKSDUWLDOO\RƬVHWE\UHGXFHGFRQWUDFW
manufacturing charges and freight costs
on account of rate negotiation with the
vendors and transporters, respectively.
Finance Charges
Finance charges comprise interest on loans
DQG RWKHU ƮQDQFLDO FKDUJHV 5HGXFWLRQ LQ
ƮQDQFH FKDUJHV LV LQ OLQH ZLWK UHGXFWLRQ LQ WKH
Company’s Debt (refer balance sheet).
Direct Tax
CAPITAL UTILISATION
Given below is a snapshot of various capital
HƱFLHQF\UDWLRVIRU0DULFR
FY17
FY16
Return on Capital Employed
Ratio
47.1%
45.4%
Return on Net Worth
36.8%
37.0%
15
67
54
13
58
45
Working Capital Ratios (Group)
- Debtors Turnover (Days)
- Inventory Turnover (Days)
- Net Working Capital (Days)
including surplus cash
Debt: Equity (Group)
Finance Costs to Turnover (%)
(Group)
Our People Our Pride
0.20
0.3%
The ratios have continued to be healthy for the
year.
The Company’s ROCE has been on a rise for
WKHSDVWƮYH\HDUVZLWKWKH&RPSDQ\IRFXVLQJ
on organic growth. The chart below shows the
yearly trend.
RETURN ON CAPITAL EMPLOYED
7KH (ƬHFWLYH 7D[ 5DWH (75 IRU WKH &RPSDQ\
during FY17 was 29.4% vis-à-vis 29.7%
during FY16.
In an endeavour to
maximise returns to
its shareholders, the
Company increased
its dividend payout in
FY17 to 350% vis-à-vis
337.5% during FY16.
0.13
0.3%
Note: Turnover Ratios calculated on the basis of average
balances.
47
8%
FY17
299.0
530.3
45
324.4
539.5
FY16
Fixed
Variable
39
% variation
FY15
FY16
30
FY17
FY14
(` Crores)
Other Expenses
The new accounting standards – Ind AS, have
EHFRPH HƬHFWLYH IURP st April, 2016 and the
ƮQDQFLDO VWDWHPHQWV SUHVHQWHG LQ WKLV $QQXDO
Report comply with these new accounting
standards.
The change in balance sheet items as per Ind
AS has been explained in details in the Financial
Statements.
24
Other expenses
D 7KH RWKHU H[SHQVHV FRQVLVW RI Ʈ[HG
expenses (about 1/3rd) and expenditures, which
are variable in nature (about 2/3rd).
FY13
58
(%)
SHAREHOLDER VALUE
Dividend declared
Keeping in mind steady increase in operating
FDVK ưRZV DQG LQ DQ HQGHDYRXU WR PD[LPLVH
returns to its shareholders, the Company
increased its dividend payout in FY17 to
350% vis-à-vis 337.5% during FY16. The
overall dividend payout ratio was 64% of PAT
compared to 69% during FY16. Subject to its
fund requirements towards inorganic growth,
working capital, and capacity creation the
Company shall endeavour to maintain a dividend
payout ratio at ~ 50-60% in the medium term.
19
24
30
69
64
FY13
FY14
FY15
FY16
FY17
DIVIDEND PAYOUT RATIO
HUMAN RESOURCES
(%)
Talent and culture continue to be key focus
areas for Marico to achieve its business
DVSLUDWLRQVDQGPDNHDGLƬHUHQFHWRWKHOLYHVRI
the 2,297 members. The HR function’s strategy
is focused on creating a future-ready workplace,
strengthening the Company culture, building
capability for business and nurturing careers to
its people.
Over the last year, we have taken several
initiatives in this direction, the key highlights for
which are presented below:
Building depth of talent is a strategic thrust
area to build capability for business. To facilitate
this, and structured development for its
members, the Company articulated functional
and behavioural competency frameworks. The
FRPSHWHQF\LQIUDVWUXFWXUHVKDYHEHHQGHƮQHG
considering Marico’s current and emerging
business requirements. They clearly outline
the competency levels required for successful
SHUIRUPDQFH LQ GLƬHUHQW UROHV ZLWKLQ WKH
organisation.
Moreover, the Company has developed
career architectures for the business functions
Talent and culture continue to
be key focus areas for Marico to
achieve its business aspirations
and make a difference to the
lives of the 2,297 members.
MARICO LIMITED | Annual Report 2016-17
59
Statutory Reports
The Company’s dividend distribution policy
is aimed at sharing its prosperity with its
shareholders subject to maintaining an
adequate chest for liquidity and growth.
to facilitate career and leadership development.
7KHDUFKLWHFWXUHVRƬHUưH[LEOHFURVVIXQFWLRQDO
and diverse career path options to its members
for their development; simultaneously, building
capability for business.
In the last few years, the Company has
actively leveraged young leaders to build the
Marico of tomorrow. Towards this, Marico has
IRUPHGLWVƮUVW<RXQJ%RDUGDFRKRUWRIPLGGOH
level managers) in 2014 and constituted an
Information Technology Think Tank. Currently,
Young Board 3 is working on initiatives to spot
new business opportunities and strengthen
the Company’s culture. Additionally, last year,
Growth Hacking team was constituted, to
FDSLWDOLVH RQ VSHFLƮF JURZWK RSSRUWXQLWLHV WR
build Marico’s future business. Besides, Marico
launched an interesting reverse mentoring
programme, Bottoms-up. The programme
is designed to enable our senior leaders to
connect with the younger workforce and pick
up useful contemporary skills like digital and
social media savviness. The programme further
facilitates in grooming the future leaders with
direct access to senior leaders through whom
they can learn broader business perspectives
and leadership skills.
Automation and digital have been important
technology levers for building the workplace
of the future. Last year, Marico launched its
integrated talent management suite, globally
(SAP Success Factors). Named Membrain, this
suite serves as a single platform for a member’s
lifecycle progresses covering talent acquisition,
on-boarding, development, performance and
compensation management. The Company
continues to leverage iLearn, Marico’s global
technology enabled learning platform that
provides on-demand training and learning
inputs.
Additionally, Marico has enhanced its
digital footprint both, within and outside the
organisation. Workplace by Facebook was
implemented, globally, as one of Marico’s
internal
communication
and
social
media platforms. Organisation news and
60
announcements, leadership communication,
team updates, celebration of personal
milestones, fun activities and events, and
Listen
member connect and collaboration now
happens on Workplace.
Reach
Automation
Further, the Company engages with lateral
and campus talent through Linkedin, Instagram
DQG 2YHU WKH :DOO 0DULFRoV ưDJVKLS FDPSXV
engagement programme on Marico Campus
Integrated Consumer
Connections (on Facebook). Initiatives like
Experience
Get a Job: Season 2 on MTV by LinkedIn,
Analytics
Engage
implementing a Chatbot on Facebook for
enhancing discussions with business schools,
curating blog series on InsideIIM.com have
VLJQLƮFDQWO\HQKDQFHG0DULFRoVGLJLWDOSUHVHQFH
Sell
Innovate
among potential talent and contributed to
strengthening the Company’s employer brand.
As part of our endeavour to create a futureready workplace, this year’s Innovation Jam
focused on crowdsourcing ideas from members INFORMATION TECHNOLOGY AND
on making Marico a great place to work. DIGITAL
Innovation Jams are theme based initiatives Marico had developed a framework to harness
to crowd source ideas from Marconians and the opportunities presented by prevalence of
has helped the Company garner over 900 new-age digital technologies, and transform to
ideas for experimenting with new age work become a digitally savvy consumer company.
practices. Ideas include empowering learning Various technologies in the realm of I-SMAC
DQG GHYHORSPHQW HQKDQFLQJ ưH[LELOLW\ DQG (IOT, Social, Mobile Analytics, Cloud) as well as
inclusiveness and ensuring health and wellness platforms, AR and conversational assistants
for the Marconians. The Company has selected have been piloted to deploy the agenda
high impact ideas from these and will be LGHQWLƮHGXQGHUWKLVLQIUDVWUXFWXUH
implementing them in the coming year. One ,WKDVWKHIROORZLQJƮYHLQWHUGHSHQGHQWHOHPHQWV
such idea that has already been implemented is so that a better and integrated experience can
the upgrading of our parental policy. Last year, be delivered to the associates and consumers.
Marico introduced its new parental policy, which 1. Consumer Engagement to listen, reach
and engage with consumers
includes enhanced parental leave (26 weeks
for mothers, 15 days for fathers). Additionally, 2. Sell with a focus on e-commerce and online
sales
WKH SROLF\ HQFRPSDVVHV LPSURYHG ưH[L ZRUN
DUUDQJHPHQWV DQG ZHOOQHVV EHQHƮWV WR H[WHQG 3. Innovation through digital business models
better care and support to its members during 4. Data Analytics to drive agile business
decisions
this special phase in their lives.
for
business
process
7KHVH LQLWLDWLYHV DQG HƬRUWV RYHU WKH ODVW 5. Automation
HƱFLHQFLHV
few years, have won the Company quite a few
accolades, such as
1. Marico is ranked no. 30 in the Campus Track CONSUMER ENGAGEMENT
Survey Report by Nielsen, which is a positive The Company enabled consumer engagement
initiative through various means by using digital
shift from rank 34 from last year.
2. Marico has moved up 24 places and is ranked as a media platform and reinforcing category
No. 40 in the Economic Times and Great Place leadership through various engagement
to Work Institute’s India’s Best Companies to platforms. Reach, frequency and cost
HƱFLHQF\ ZDV DFKLHYHG WKURXJK NH\ EUDQGV
Work for 2017 study.
3. Marico is among the Top 100 companies having a higher digital index like Livon Serums,
to work for women in India as per the 2016 Set Wet, Bio Oil and Parachute Advansed
study for Working Mother and AVTAR Best Body Lotion. Programmatic buying helped the
communication to reach the right consumers
Companies for Women in India.
through relevant micro moment algorithmic
WDUJHWLQJZKLFKKHOSHGLQFUHDVHHƱFLHQF\
%XLOGLQJ RQ LQVLJKWV ZKLFK KDYH KLJK DƱQLW\
with consumers online made your Company
create ‘Made for Digital’ content to drive
Our People Our Pride
Besides, a content platform – www.HairSutras.
com was launched, which shares ancient and
timeless secrets to have great and good looking
healthy hair.
Both the above platforms will be scaled
further in the coming year to help drive category
leadership. The Company is also exploring
the use of digital devices to drive brand
GLƬHUHQWLDWLRQWKURXJK,QWHUQHWRI7KLQJV,27
E-COMMERCE
Marico has established a dedicated team of
professionals and is launching digital asset
management tools to build capabilities for
driving sales in the online and e-commerce
channel. The Company has mapped the current
and future categories based on their propensity
to move online versus the starting position.
%DVHG RQ WKLV D GLƬHUHQWLDWHG SOD\ DFURVV
GLƬHUHQWFDWHJRU\FKDQQHOFRPELQDWLRQVKDYH
been worked out.
brand. It is a fast growing online male
grooming brand, which helps the
Company get a foothold in the online
business and enhances Marico’s
digital engagement capabilities. In
addition, Parachute Advansed Gold
Hair Oil range was launched on online
channels only.
Moreover, the Company is running
experiments with various startup companies across the value
chain to identify various innovation
opportunities.
ANALYTICS AND AUTOMATION
In analytics and automation, the Company’s
strategy has been to capitalise on the latest
advancements in technology for improving the
business performance. A quick snapshot of
initiatives across the value chain is provided
below:
• The Company scaled its new Distributor
Management System nationally during
the year under review, which helped
OLQN LWV FXVWRPHUV HƬHFWLYHO\ DQG
improve sales productivity, visibility and
commercial controls. On the back of the
lower data storage costs and increased
internet bandwidth coverage across the
country, the granular secondary sales
data was centralised which enabled new
opportunities in analytics.
• A newly enabled Forecasting System
increased the forecasting accuracy by over
10% points.
• The Project Retina – Sales Assortment
Analytics model was extended to a few more
cities that enabled Marico to garner higher
volume growths through recommendation
of cross-sell / upsell opportunities.
• The project automated performance
management dashboards (Project Prime)
was extended across the sales hierarchy. It
enabled rich and visual descriptive analytics
DIGITAL BUSINESS INNOVATIONS
Marico announced a strategic investment in Zed
Lifestyle Private Limited, which owns the Beardo
MARICO LIMITED | Annual Report 2016-17
61
Statutory Reports
engagement at scale. Some examples include
Parachute Advansed Hot Oil (which had 66Mn
impressions, 11Mn reach); Parachute Advansed
Coconut Hair Oil Holi Film (76Mn impressions)
and Parachute Advansed Body Lotion (78 Mn
impressions, 5.5Mn reach)
6DƬROD )LW)RRGLH SODWIRUP, the health
SODWIRUP IRU 6DƬROD )RRGV UHFRUGHG Mn Visits and 3.85 Mn page views and drove
engagement. In addition to the FitFoodie app, a
QHZ FRQYHUVDWLRQDO DVVLVWDQW 6DƬROD )LW)RRGLH
Buddy – a personal Chefbot on FB Messenger
platform was launched to suggest convenient
recipes to consumers depending on the time of
the day and the choice of ingredients they have
at home.
WRKHOSGULYHHƬRUWVLQWKHULJKWFKDQQHODQG
right outlets. Such dashboards have now
been enabled on mobile devices.
• Analytics-led category growth drivers
model and deployment of marketing
mix models enabled planning of revenue
growth and marketing spends.
• Project EDGE led to optimisation of sales
DQG RƬHU VSHQGV LQ WKH WUDGLWLRQDO WUDGH
channel contributing to a savings of over
` 350 million, which will be redeployed to fuel
growth and strengthen sales infrastructure.
• Further initiatives are being piloted in geotag based sales route optimisation and
demand sensing models to help improve
sales growth.
An end to end automation of demand planning
DQG IXOƮOPHQW V\VWHP WKURXJK 3URMHFW 3ULPH
2 was completed. This enabled the company
to utilise the new SAP platform along with
RSWLPLVHGưRZVWRLPSURYHUDQJHVHUYLFHOHYHOV
and availability. The project further helped to
automate and outsource routine, repetitive tasks
in the Procure to Pay (P2P), Order to Cash (O2C)
62
and Record to Report (R2R) processes. Similar
automation of Treasury ưRZV HQDEOHG EHWWHU
FDVKưRZIRUH[DQGLQYHVWPHQWPDQDJHPHQW
Marico App World, an internal app was
deployed for employees, which helped improve
HƱFLHQF\ VHHN DSSURYDOV DQG KDQGOH FODLPV
HƱFLHQWO\ RQWKHJR $ QHZ WDE HQDEOHG
Mobile PDA was relaunched for the sales
representatives that improved their daily
ZRUNLQJVLJQLƮFDQWO\DQGVDOHVHƬHFWLYHQHVV
Automation in HR processes through the
use of Membrain – a SuccessFactors based
platform as well as Workplace has enabled
greater connect and collaboration. Chatbots
were used along with Marico Campus
Connections platform to improve Marico’s
connect with B-school campuses from where it
KLUHVVLJQLƮFDQWO\
Road ahead
Marico will deepen the initiatives along the digital
IUDPHZRUNLGHQWLƮHGDERYHZLWKJUHDWHUXVHRI
consumer engagement and online sales along
with analytics. This will enhance the Company’s
Our People Our Pride
VXVWDLQDEOH SURƮWDEOH MRXUQH\ 0DULFR KDV DOVR
piloted sensor & IOT based automation in its
manufacturing plants, which will be scaled up in
the coming year.
OUTLOOK
Marico India
As the Company enters FY18, there is a
backdrop of three macro factors for the
Company to consider:
r ,QưDWLRQLQNH\FRPPRGLWLHV
• GST; and
• Monsoon
With this background, the Company is
targeting 8-10% volume growth and healthy
market share gains, backed by increased
investment in core portfolio, aggressive new
product launches, distribution expansion,
judicious call on pricing and tighter cost
management. The cost push and increased
ASP investment would mean that the operating
PDUJLQV ZKLFK KDYH H[SDQGHG VLJQLƮFDQWO\
during FY17 may get corrected to 20%+ levels.
In Parachute rigids, the Company aims to grow
volumes in the range of 5-7% in the medium
WHUP:LWKWKHFRPPRGLW\LQưDWLRQFRPLQJEDFN
the Company has already taken price increases
LQ 0DUFK OHDGLQJ WR LQưDWLRQOHG JURZWK
from Q1FY18. 6DƬROD is likely to continue the
growth rate of circa 10% in the near term. In the
medium term, the Company expects to continue
growing at double-digit volume growth. In the
healthy foods franchise, the Company will
innovate aggressively to cater to the consumer
need of tasty and healthy options and is in the
process of reviving a double-digit value growth.
In value-added hair oils space, the Company
aims to grow this franchise at a double-digit
volume growth on the back of growth in core
portfolio and scaling of new launches. On the
back of a continued healthy performance of
gels, traction in deodorants and expected
demand in Livon franchise, the youth portfolio
is expected to grow at in double-digit in FY18
and at 15% in the medium term. The Company’s
go-to-market strategy will be focused on
improving the width and depth of its distribution
– both direct and wholesale. Strategic initiatives
in sales and supply chain will aim at ushering
LQ HƱFLHQF\ LQ VHOOLQJ DQG JRWRPDUNHW 7KH
Company is focusing on digital initiatives in
a big way to improve consumer engagement,
drive sales through e-commerce for internet
savvy consumers and build data analytics
capabilities. Investment in Zed Lifestyle is likely
to enhance its capability in e-commerce and
salons over the medium term.
Marico International
RISKS AND CONCERNS
63
Changing consumer preferences
'HPDQG FDQ EH DGYHUVHO\ DƬHFWHG E\ D VKLIW LQ
consumer preferences. Given the explosion of social
media, the speed of such shift could be very swift.
0DULFR LQYHVWV VLJQLƮFDQWO\ LQ FRQVXPHU
in-sighting to adapt to changing preferences.
The Company also actively watches social
media trends to spot early trends in consumer
preferences.
Input costs
Unexpected changes in commodity prices
can impact margins. The last few years have
ZLWQHVVHG ZLGH ưXFWXDWLRQV LQ WKH LQSXW
materials prices. As a result, the overall level
of uncertainty in the environment continues to
remain high.
However, brands with greater equity and
SULFLQJ SRZHU PD\ ƮQG LW HDVLHU WR DGMXVW
prices when the input prices increase and
hold prices when the input prices decline. The
Marico Limited
The Company will aim at a volume growth &RPSDQ\oV EUDQGV HQMR\ D VLJQLƮFDQW HTXLW\
of 8-10% and a topline growth of ~12-15% with its consumers and thus, it holds adequate
GHSHQGLQJ RQ LQưDWLRQ LQ WKH PHGLXP WHUP purchasing power. Moreover, Marico has
The Company will focus on fewer but bigger EHHQ LQYHVWLQJ VLJQLƮFDQWO\ LQ HQKDQFLQJ LWV
innovations to create growth engines of forecasting capabilities.
the future. Market growth initiatives in core
categories and expansion into adjacent Goods and service tax (GST)
categories will be supported by investments in While GST will streamline the indirect tax
ASP in a band of 11-12% of sales with focus compliance framework, it may also bring in
on brand building. Project Edge is aimed at short-term disruptions. The trade may downPDNLQJIURQWHQGVSHQGVHƬHFWLYH,Q)<WKH stock for some time. The initial teething issues
Company will implement this initiative in a few around going live and compliances may eat up
select international geographies. Operating substantial managerial bandwidth.
margin is expected to be maintained in a
Marico has anticipated some of these issues
band of 17-18% over the medium term. In the and plans to extend all possible assistance to
QHDU WHUP WKLV PD\ PHDQ D ORZ SURƮW JURZWK its channel partners. It will also augment internal
However, the Company has chosen to focus resources to cope up with go-live glitches, if any.
RQ JURZWK RYHU VKRUWWHUP SURƮWDELOLW\. 7KH&RPSDQ\ƮUPO\EHOLHYHVWKDW*67LVJRRG
Marico believes that social, environmental and for the long-term growth of the organised FMCG
economic values are interlinked and it belongs industry as it would improve overall compliance
to an interdependent ecosystem comprising levels.
shareholders,
consumers,
associates,
employees, government, environment and Macro-economic factors
society. Marico’s stated purpose is to ‘make a In situations of economic constraints, items
GLƬHUHQFH’ by ensuring a positive impact on which are in the nature of discretionary spending
all the stakeholders. The Company staunchly DUHWKHƮUVWWREHFXUWDLOHG)DFWRUVVXFKDVORZ
EHOLHYHV D ƮUP KDV WR ZRUN FORVHO\ ZLWK LWV *'3JURZWKDQGKLJKIRRGLQưDWLRQFDQUHVXOWLQ
ecosystem to create a sustainable and inclusive down trading from branded to non-branded or
growth for all. Thus, Marico has focused premium to mass-market products.
The Company continuously drives towards
approach in identifying sustainability goals in
line with its business strategy and purpose. Its making its value-added products available to
social responsibility (CSR) initiatives are an PDVVHVDWDƬRUGDEOHSULFHV/RZXQLWSDFNVRI
LQWHJUDO SDUW RI 0DULFRoV VXVWDLQDELOLW\ HƬRUWV its value-added hair oils is an attempt in this
and it is committed to making a sustainable direction.
impact on the society.
MARICO LIMITED | Annual Report 2016-17
Statutory Reports
Over the last 12-18 months, the Company has
systematically invested in the core international
markets to strengthen both the brands and
the organisational capability to handle growth.
:LWKVXFKDXJPHQWHGHƬRUWVWREXLOGDrobust
organic growth capability and a stronger
organisation, the Company will selectively
explore inorganic growth opportunities. The
Company believes that the core markets of
Bangladesh, South East Asia and MENA are
‘invest to grow’ markets. And the Company will
continue to drive growth with brand restages,
new product launches and capability building
initiatives apart from aggressively tapping
and growing new markets. It expects to clock
a double-digit organic topline growth in
constant currency in near to medium term.
The structural shift in operating margins is
expected to be sustained at around ~17%.
64
Political risks
Unrest and instability in countries of operation
FDQVLJQLƮFDQWO\LPSDFWWKHEXVLQHVV
Marico operates in the developing and
emerging economies of Asia and Africa and
is exposed to political risk and unrest in these
markets. However, the Company operates
ZLWK ZHOOGHƮQHG ULVN PDQDJHPHQW SROLFLHV WR
mitigate various risks.
Competition
Increase in number of competing brands in
the market place, counter campaigning and
aggressive pricing by competitors have the
potential of creating a disruption.
In the last few years, Marico has entered
categories such as mass skin care, breakfast
cereals, hair styling, post wash leave-in
conditioners, deodorants and hair colours.
The competitive intensity in these segments is
relatively higher compared to the segments it
has been operating in hitherto, such as coconut
RLOKDLURLOVDQGUHƮQHGHGLEOHRLOV
Renewed focus on Ayurveda/Naturals/Indian
E\ D IHZ QHZ SOD\HUV KDV EURXJKW LQ GLƬHUHQW
competitive dimensions in Marico’s core portfolio.
The Company believes that healthy
competition is good for businesses as it
IRFXVHV PDQDJHPHQW DWWHQWLRQ RQ RƬHULQJ LWV
FRQVXPHUVGLƬHUHQWLDWHGKLJKTXDOLW\SURGXFWV
that address consumers’ needs. With such
service approach, the Company expects to win
and retain its consumer franchise. Additionally,
Marico focuses on protecting volumes in
SUHIHUHQFH WR VKRUWWHUP SURƮWDELOLW\ )XUWKHU
the Company concentrates on being nimblefooted so that scarce resources can be deployed
towards brand building and sales infrastructure.
Product innovation and new product launches
Success rate for new product launches in the
FMCG sector is typically low. New products may
not be accepted by the consumer or may fail to
achieve the sales target. This risk is even more
pronounced in cases where industry leaders
invest behind creating new categories.
Marico has a well-established
and comprehensive internal
control structure across the value
chain to ensure that all assets
are safeguarded and protected
against loss from unauthorised
use or disposition.
Our People Our Pride
Marico has adopted the prototyping
approach to new product introductions that
helps maintain a healthy pipeline and at the
same time limits the downside risks with its fail
fast approach.
Foreign currency exposure
0DULFRKDVDVLJQLƮFDQWSUHVHQFHLQ%DQJODGHVK
South East Asia, the Middle East, Egypt and
South Africa. The Group is exposed to a wide
variety of currencies like US Dollar, South
African Rand, Bangladeshi Taka, UAE Dirham,
Egyptian Pound, Malaysian Ringgit, Myanmar
Chats and Vietnamese Dong. Import payments
are made in various currencies including but not
limited to the US Dollar, Australian Dollar and
Malaysian Ringgit.
6LJQLƮFDQW ưXFWXDWLRQ LQ WKHVH FXUUHQFLHV
FRXOG LPSDFW WKH &RPSDQ\oV ƮQDQFLDO
performance. The Company is, however,
conservative in its approach and uses plain
vanilla hedging mechanisms.
Funding costs
Though the FMCG sector is not capital intensive,
fund requirements arise on account of
inventory position building, capital expenditure
XQGHUWDNHQ RU ƮQDQFLQJ LQRUJDQLF JURZWK
Changes in interest regime and in the terms of
ERUURZLQJZLOOLPSDFWWKHƮQDQFLDOSHUIRUPDQFH
of the Group.
The Group maintains comfortable liquidity
positions, thereby insulating itself from shortterm volatility in interest rates.
Acquisitions
Acquisitions may divert management attention
or result in increased debt burden on the parent
entity. Further, it may expose the Company to
FRXQWU\ VSHFLƮF ULVN ,QWHJUDWLRQ RI RSHUDWLRQV
and cultural harmonisation may also take time,
WKHUHE\ GHIHUULQJ EHQHƮWV RI V\QHUJLHV RI
XQLƮFDWLRQ
Marico has been able to integrate its
acquisitions with the mainstream with focus
on talent and processes. Given its comfortable
liquidity position and conservative capital
management practices, the acquisitions have
QRWSXWDQ\VLJQLƮFDQWSUHVVXUHRQWKHƮQDQFLDO
position of the Group.
Private labels
Expansion of modern trade can lead to
emergence of private labels. While the risk of
private labels has been low in India, this can
change quickly with e-commerce gaining
traction in urban India.
MARICO LIMITED | Annual Report 2016-17
65
Statutory Reports
to ensure that the ERP and other IT systems
Inappropriate hiring and inability to retain top used for transaction processing have adequate
WDOHQWPD\UHVXOWLQDƮUPoVLPSRWHQF\WRSXUVXH internal controls embedded to ensure preventive
LWVJURZWKVWUDWHJLHVHƬHFWLYHO\
and detective controls. The audit report is
Marico invests heavily in ‘hiring right’ and reviewed by the management for corrective
‘talent development and engagement’. This helps actions and the same is also presented to and
SURYLGHIXOƮOOLQJFDUHHUVWRPHPEHUVLQ0DULFR reviewed by the Audit Committee of the Board.
0DULFR KDV LGHQWLƮHG KDYLQJ D UREXVW WDOHQW Internal audits are undertaken on a continuous
value proposition as one of the transformation basis, covering various areas across the value
areas to drive sustainable growth over long run. chain like procurement, manufacturing, supply
FKDLQ VDOHV PDUNHWLQJ DQG ƮQDQFH 7KH
Compliance
internal audit programme is reviewed by the
Inadequate compliance systems and processes Audit Committee at the beginning of the year
pose a reputation risk for an organisation. They to ensure that the coverage of the areas is
PD\UHVXOWLQƮQDQFLDOORVVHVDQGSHQDOWLHV
adequate. Reports of the internal auditors are
Marico has invested in compliance systems regularly reviewed by the management and
and processes to ensure that all its functions corrective action is initiated to strengthen the
and units are aware of the laws and regulations FRQWUROV DQG HQKDQFH WKH HƬHFWLYHQHVV RI WKH
to comply with and that adequate monitoring existing systems. Summaries of the reports are
mechanism are put in place to ensure presented to the Audit Committee of the Board.
compliance.
Ernst & Young LLP has been carrying out
internal audits for Marico for the last three years.
INTERNAL CONTROL SYSTEMS AND
The work of internal auditors is coordinated by
an internal team at Marico. This combination
THEIR ADEQUACY
Marico
has
a
well-established
and of Marico’s internal team and expertise of a
comprehensive internal control structure SURIHVVLRQDOƮUPHQVXUHVLQGHSHQGHQFHDVZHOO
across the value chain to ensure that all assets DVHƬHFWLYHYDOXHDGGLWLRQ
are safeguarded and protected against loss from
unauthorised use or disposition, all transactions Internal Financial Controls (IFC)
are authorised, recorded and reported correctly As per section 134 (5) (e) of Companies Act
DQGWKDWRSHUDWLRQVDUHFRQGXFWHGLQDQHƱFLHQW 2013, IFC means the policies and procedures
DQGFRVWHƬHFWLYHPDQQHU7KHNH\FRQVWLWXHQWV adopted by company for ensuring:
of the internal control system are:
• Accuracy and completeness of accounting
records
• Establishment and periodic review of
r 2UGHUO\ DQG HƱFLHQW FRQGXFW RI EXVLQHVV
business plans
including adherence to policies
r ,GHQWLƮFDWLRQRINH\ULVNVDQGRSSRUWXQLWLHV
• Safeguarding of its assets
and regular reviews by top management
• Prevention and detection of Frauds
and the Board of Directors
For Listed companies, requirement is to
• Policies on operational and strategic risk have IFC framework in place and ensure
management
RSHUDWLQJ HƬHFWLYHQHVV RI FRQWUROV 0DULFR
r &OHDU DQG ZHOOGHƮQHG RUJDQLVDWLRQ India developed IFC framework basis review of
VWUXFWXUHDQGOLPLWVRIƮQDQFLDODXWKRULW\
Policies, procedures and processes. Controls
r &RQWLQXRXVLGHQWLƮFDWLRQRIDUHDVUHTXLULQJ for each of the processes were documented.
strengthening of internal controls
'HVLJQDQGRSHUDWLQJHƬHFWLYHQHVVRIFRQWUROV
• Operating
procedures
to
ensure was tested by management and later audited by
HƬHFWLYHQHVVRIEXVLQHVVSURFHVVHV
the statutory auditors. Your statutory auditors
• Systems of monitoring compliance with have given a clean report after checking
statutory regulations
HƬHFWLYHQHVVRIFRQWUROV
r :HOOGHƮQHG SULQFLSOHV DQG SURFHGXUHV
The management believes that strengthening
for evaluation of new business proposals/ IFC is a continuous process and therefore it will
capital expenditure
FRQWLQXHLWVHƬRUWVWRPDNHWKHFRQWUROVVPDUWHU
with focus on preventive and automated controls
• A robust management information system
as opposed to mitigating and manual controls.
• A strong internal audit and review system
• A sturdy framework on Internal Financials Over a period, the Company will also extend
Controls
this framework to its overseas subsidiaries. To
start with, IFC framework has already been
r $QHƬHFWLYHZKLVWOHEORZLQJPHFKDQLVP
The statutory auditors, as part of their audit implemented in Marico Bangladesh Limited,
process, carry out a systems and process audit your Company’s largest subsidiary.
Talent acquisition and retention
66
BUSINESS
RESPONSIBILITY REPORT
SECTION A: GENERAL INFORMATION ABOUT THE COMPANY
No.
Particulars
Company Information
1
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Statutory Reports
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75
Statutory Reports
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77
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MARICO LIMITED | Annual Report 2016-17
79
Statutory Reports
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BOARD’S REPORT
80
To the Members,
Your Board of Directors (“Board”) is pleased to present the Twenty
Ninth Annual Report of Marico Limited (“Marico” or “the Company”
or “your Company”), for the financial year ended March 31, 2017
(“the year under review” or “the year” or “FY17”).
In line with the requirements of the 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, 2016 to March 31, 2017 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
Particulars
Year ended
March 31, 2017
(r in Crore)
Year ended
March 31, 2016
Consolidated Summary Financials for
the Group
Revenue from Operations
5,935.92
6,024.45
Profit before Tax
1,148.70
1,028.70
810.97
723.33
Marico Limited – Revenue from
Profit after Tax
4,868.88
4,867.99
Profit before Tax
1,141.72
935.74
Less: Provision for Tax for the current year
299.02
244.48
Profit after Tax for the current year
842.70
691.26
(1.18)
(1.87)
Add: Surplus brought forward
1,933.31
1,744.78
Profit available for appropriation
2,774.83
2,434.16
451.59
435.43
Operations
Other Comprehensive Income for the
current year
Appropriations: Distribution to
shareholders
Tax on dividend
Surplus carried forward
57.03
65.43
508.62
500.86
2,266.21
1,933.31
REVIEW OF OPERATIONS
During 2017, Marico achieved revenue from operations of INR
5,986 Crore, a decline of 1% over FY16. Volume growth for the year
was at 4%. The value growth was lower owing to price reductions
in the Coconut Oil portfolio in India and Bangladesh and currency
devaluation in the Egypt region in H2FY17. The operating margin
was at 19.5%. The business reported bottom line of INR 799
Crores, a satisfactory growth of 12% over last year.
Marico India, the domestic business, achieved a turnover of
r4,579 Crores in FY17, a decline of 2% over last year. Volume
growth for the year was at 4%. The value growth was lower owing
to price reductions in the Coconut Oil portfolio. This year witnessed
the demonetization impact in Q3FY17 which acted as a dampener
on the overall annual volume growths. The operating margin for the
India business was healthy at 24.3% before corporate allocations.
Higher operating margins can be attributed mainly to gross margin
expansion led by softer input costs.
During the year, Marico International, the International FMCG
business, posted a turnover of R1,356 Crores, a growth of 1%
over FY16 in constant currency terms. The operating margin for
the year was at 16.5% (before corporate allocations) reflecting a
sustained structural shift over the last few years.
Over the last 5 years, at a consolidated level, the top line has
grown by 10% and bottom line by 18% at a Compounded Annual
Growth Rate.
There are no material changes and commitments affecting the
financial position of your Company which have occurred between
the end of the FY17 and the date of this report.
SUBSIDIARIES AND ASSOCIATE COMPANIES
A list of bodies corporate which are subsidiaries/associate of
your Company is provided as part of the notes to Consolidated
Financial Statement. During the period under review, in Vietnam,
Thuan Phat Foodstuff Joint Stock Company merged with its
Holding Company, Marico South East Asia Corporation (Formerly:
International Consumer Products Corporation) with effect from
December 1, 2016. Your Company acquired 35.44% equity
stake in Zed Lifestyle Private Limited (“Zed”) on March 17, 2017.
Consequently, Zed became an associate company of Marico.
A separate statement containing the salient features of the
financial statement of all subsidiaries and associate companies of
your Company (i.e. Form AOC - 1) forms part of the consolidated
financial statement in compliance with Section 129 and other
applicable provisions of the Act.
The financial statement 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 29th Annual General Meeting (“29th AGM”), as
required under Section 136 of the Act. Any Member desirous of
obtaining a copy of the said financial statement 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 http://marico.com/
investorspdf/Policy_for_determining_Material_Subsidiaries.pdf.
As per this Policy, your Company does not have any material
subsidiary.
INDIAN ACCOUNTING STANDARDS
The Ministry of Corporate Affairs (“MCA”), vide its notification
dated February 16, 2015 issued Indian Accounting Standards
(“IND AS”) applicable to certain classes of companies. In exercise
of the powers conferred by Section 133 read with section 469
81
The following are the key areas which had an impact on account
of IND AS transition:
•
Revenue reclassification
•
Fair valuation of certain financial instruments
•
•
•
Macro Economic Indicators & FMCG Industry, opportunities and
threats, risks and concerns, internal control systems and their
adequacy, discussion on financial and operational performance,
segment-wise performance, human capital initiatives outlook, etc.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
I
Resignation of Mr. Atul Choksey
II
Appointment of Mr. Rishabh Mariwala and Mr. Ananth
Narayanan
Share based payments
Defined employee benefit obligations
Intangible assets
The detailed reconciliation of the transition from IGAAP to IND
AS has been provided in Note 35 in the notes to accounts of
Standalone Financial Statement and Note 39 in the notes to
accounts of Consolidated Financial Statement.
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. During the year under
review, your Board adopted a Dividend Distribution Policy (“DD
Policy”) pursuant to Regulation 43A of the SEBI Regulations.
The DD Policy is available on the website of the Company at
http://marico.com/india/investors/documentation/corporategovernance.
Based on the principles enunciated in the DD Policy, your
Company’s distribution to equity shareholders during FY17
comprised the following;
•
•
First Interim Dividend of 150% on the equity base of R129.02
Crores; and
Second Interim Dividend of 200% on the equity base of
129.04 Crores.
The total equity dividend for FY17 (including dividend distribution
tax) aggregated to R508.64 Crores. Thus, dividend pay-out
ratio is 64% of the consolidated profit after tax as compared to
69% (including one-time special third interim dividend of 100%)
during FY16.
PA RT I C U L A R S O F LOA N S, G UA R A N T E E S A N D
INVESTMENTS
Details of the loans, guarantees and investments covered under
the Section 186 of the Act, are given in 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
III
Mr. Atul Choksey (DIN: 00002102), Independent Director of
the Company stepped down from the Board of Directors
with effect from April 1, 2017 on account of paucity of
time. The Board of Directors of Marico placed on record, its
appreciation for the invaluable contribution that Mr. Choksey
has made during his long tenure with the Company as an
Independent Director.
The Board at its meeting held on May 2, 2017 appointed
Mr. Rishabh Mariwala (DIN: 03072284) as an Additional
(Non-Executive) Director of your Company with effect
from May 2, 2017. Further, the Board vide a resolution
passed by circulation on June 26, 2017 appointed
Mr. Ananth Narayanan (DIN: 07527676) as an Additional
(Independent) Director of the Company with effect from
the said date i.e. June 26, 2017.
Mr. Rishabh Mariwala and Mr. Ananth Narayanan shall
hold office as an Additional (Non-Executive) Director and
Additional (Independent) Director, respectively, upto
the date of the 29 th AGM of the Company. Notices in
writing, signifying their candidature for appointment as
Non-Executive Director and Independent Director,
respectively, under Section 160 of the Act has been received
from the shareholders of the Company. Accordingly, the
matter relating to their appointment is being placed for the
approval of the shareholders at the 29th AGM.
Directors 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 29th AGM
and being eligible, has offered himself for re-appointment.
Accordingly, the matter relating to re-appointment of
Mr. Harsh Mariwala is being placed for the approval of the
shareholders at the 29th AGM.
The Company has received declarations from all the Independent
Directors confirming that they satisfy the criteria of independence
as prescribed under the provisions of the Act and the
SEBI Regulations.
Brief profiles of Mr. Rishabh Mariwala, Mr. Ananth Narayanan and
Mr. Harsh Mariwala and other related information is appended in
the Corporate Governance Report. The revised composition of the
Board of the Company is also stated in the said Report.
Statutory Reports
of the Act and Section 210A(1) of the Companies Act, 1956, the
Central Government, in consultation with the National Advisory
Committee on Accounting Standards, has replaced the existing
Indian GAAP with IND AS. For Marico, IND AS is applicable for the
accounting periods beginning April 1, 2016, with the transition
date of April 1, 2015.
82
IV
Key Managerial Personnel
During the year under review, the Board of Directors at its
meeting held on April 29, 2016 appointed Mr. Surender
Sharma as the Company Secretary & Compliance Officer
in place of Ms. Hemangi Ghag, who had tendered her
resignation with effect from April 29, 2016. Ms. Ghag
continues as an employee with the Company in a different
role. There were no other changes in the Key Managerial
Personnel of the Company.
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.
b.
c.
d.
e.
f.
in the preparation of the annual financial statement for
the financial year ended March 31, 2017, the applicable
accounting standards have been followed and there are no
material departures from the same;
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, 2017 and of the profit of your Company for the
said period;
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;
the annual accounts have been prepared on a ‘going concern’
basis;
proper internal financial controls to be followed by the
Company were laid down and such internal financial controls
are adequate and were operating effectively;
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 relevant provisions of the Act read with Rules
made thereunder, Regulation 17(10) of the SEBI Regulations and
the Guidance Note on Board Evaluation issued by SEBI vide its
circular dated January 5, 2017, the 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 is explained in the Corporate Governance Report.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS
COMMITTEES
Five meetings of the Board of Directors were held during the
year.The details of the meetings of the Board and its Committees
held during the year under review are stated in the Corporate
Governance Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 34 of the SEBI Regulations, a separate
report on Corporate Governance along with the certificate from
the Statutory Auditor on its compliance, forms an integral part of
this report.
BUSINESS RESPONSIBILITY REPORT & SUSTAINABILITY
REPORT
Pursuant to Regulation 34 of the SEBI Regulations, the Company
had published its maiden Business Responsibility Report in
the Annual Report for the previous financial year. During the
year under review, the Board adopted the Sustainability Policy
through a resolution passed by circulation on June 20, 2016.
The Sustainability Policy envisages the broad principles which
would drive the sustainability activities of the Company. The said
Sustainability Policy can be accessed at this link http://marico.
com/make-a-difference/sustainability
Further, the Board of Directors of your Company constituted the
Sustainability Committee to drive the sustainability activities of the
Company and review the business responsibility and sustainability
performance of the Company on annual basis. The Chief Supply
Chain Officer of the Company heads the Sustainability Committee
and it comprises three more Senior Managerial Personnel of the
Company. The composition of the Committee is detailed in the
Corporate Governance Report. The Managing Director & CEO of
the Company is the Director responsible for ensuring the Business
Responsibility activities of the Company.
During the year under review, the Company has also made available
its maiden Sustainability Report which is a voluntary report and
exhibits your Company’s approach towards sustainability. The
Sustainability Report has been exhibited in line with the Global
Reporting Initiative (GRI) G4 core guidelines. The said Report
presents the sustainability performance of the Company across
three pillars of sustainability i.e. economic, environmental and
social aspects as per the GRI G4 guidelines. All the relevant aspects
related to standard, specific disclosures and sector supplement
have been referred to, while defining the report content. The
Sustainability Report of the Company can be accessed at this link
http://marico.com/make-a-difference/sustainability
AUDITOR & AUDITOR’S REPORT
Statutory Auditor
The Members at the 26th Annual General Meeting had appointed
M/s Price Waterhouse, Chartered Accountants as the Statutory
Auditor of the Company to hold office until the conclusion of the
29th AGM. Pursuant to Section 139 of the Act and Rules made
thereunder, M/s Price Waterhouse retire as the Statutory Auditor
at the 29th AGM and are not eligible for re-appointment in view of
completion of their tenure.
Accordingly, the Board at its meeting held on May 2, 2017 based
on the recommendation of the Audit Committee, approved the
appointment of B S R & Co. LLP, Chartered Accountants as the
Statutory Auditor of the Company in place of the retiring Auditor
for a term of five years to hold office from the conclusion of the
83
The Company has received written consent and certificate of
eligibility in accordance with Sections 139, 141 and other applicable
provisions of the Act and Rules made thereunder from B S R & Co.
LLP. Further, the Company has also received a written confirmation
stating that B S R & Co. LLP holds a valid Peer Review Certificate
issued by the Institute of Chartered Accountants of India.
The Auditor’s Report for the year ended March 31, 2017 on the
financial statement of the Company forms part of Annual Report.
There has been no qualification, reservation or adverse remark
or disclaimer in the said Auditor’s Report. During the year under
review, the Auditor had not reported any fraud under Section
143(12) of the Act, therefore no detail is required to be disclosed
under Section 134(3)(ca) of the Act.
M/s. Price Waterhouse over many years successfully met the
challenge that the size and scale of the Company’s operations
pose for the Auditor and have maintained the highest level of
governance, ethical standards, rigour and quality in their audit
The Board places its sincere appreciation for services rendered
by M/s. Price Waterhouse as Statutory Auditor of the Company.
COST AUDITOR
As per Section 148 of the Act read with the Companies (Cost
Records and Audits) Rules, 2014, the Board of Directors at its
meeting held on May 2, 2017, based on the recommendation of
the Audit Committee, approved the appointment of M/s. Ashwin
Solanki & Associates, Cost Accountants as the Cost Auditor to
conduct audit of the cost records of the Company for the financial
year ending March 31, 2018. The Company has received written
consent and certificate of eligibility in accordance with Section 148
read with Section 141 and other applicable provisions of the Act
and Rules made thereunder from M/s. Ashwin Solanki & Associates.
The remuneration payable to the Cost Auditor has been
approved by the Board at its aforesaid meeting, based on the
recommendation of the Audit Committee. In terms of the provisions
of Section 148(3) of the Act read with the Companies (Audit and
Auditors) Rules, 2014, as amended, the remuneration payable to
the Cost Auditor has to be ratified by the Members of the Company.
Accordingly, the matter relating to ratification of the remuneration
payable to the Cost Auditor for the financial year ending March 31,
2018 is being placed at the 29th AGM.
During the year under review, the Cost Auditor had not reported
any fraud under Section 143(12) of the Act, therefore no detail is
required to be disclosed under Section 134(3)(ca) of the Act
SECRETARIAL AUDIT
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 2, 2017, based on the
recommendation of the Audit Committee, approved 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, 2018. The Company has received consent from
Dr. K. R. Chandratre to act as such.
The Secretarial Audit Report for the FY17 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,
therefore no detail is 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 Constitution of the Risk Management Committee (‘RMC’) is
stated in the Corporate Governance Report. 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 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
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’
Statutory Reports
29th AGM till the conclusion of the 34th Annual General Meeting of
the Company, subject to ratification of their appointment by the
shareholders of the Company at every Annual General Meeting
held thereafter.
84
Responsibility Statement contains a confirmation as regards
adequacy of the internal financial controls.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The composition of the CSR Committee is disclosed in the
Corporate Governance Report.
A brief outline of the CSR Policy of the Company, the CSR initiatives
undertaken during the financial year 2016-17 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 B” to this Report.
RELATED PARTY TRANSACTIONS
All transactions with related parties are placed before the Audit
Committee for its 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 R1 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 FY17
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. 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
made thereunder.
The Policy on Related Party Transactions is uploaded on
the Company’s website and can be accessed using the link
http://marico.com/investorspdf/Policy_on_Related_Party_
Transactions.pdf.
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 C” 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 given in an annexure to the
Annual Report. In terms of Section 136(1) of the Act, 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 twenty one days prior to the date of the
29th 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 and Sundays up to the
date of the 29th AGM. Any Member desirous of obtaining a copy
of the said annexure may write to the Company Secretary at the
Registered Office Address.
MARICO EMPLOYEE BENEFIT SCHEME/PLAN
•
COMPANY’S POLICY ON NOMINATION, REMUNERATION,
BOARD DIVERSITY, EVALUATION AND SUCCESSION
In terms of the applicable provisions of the Act, read with the
Rules made thereunder and the SEBI Regulations, 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 (“NR Policy”). The remuneration paid to
Directors of the Company is as per the terms laid down in the
NR Policy of the Company. The Managing Director & CEO of
your Company does not receive remuneration from any of the
subsidiaries of your Company.
The salient aspects of the said Policy are outlined in the
Corporate Governance Report and can be accessed using this link
http://marico.com/investorspdf/Policy_on_Nomination,_Removal,_
Remuneration_and_Board_Diversity.pdf
Marico Employee Stock Option Scheme 2014
The Members of the Company at its Extra Ordinary General
Meeting held on March 25, 2014, had approved the Marico
Employee Stock Option Scheme 2014 (‘the Scheme’) for the
benefit of the Managing Director & Chief Executive Officer of
the Company (‘MD & CEO’). The objective of this Scheme was to
give a wealth building dimension to the remuneration structure
of the MD & CEO. Further, it also aimed at promoting desired
behavior for meeting organization’s long term objectives and
to enable retention through a customized approach.
The Corporate Governance Committee, responsible for
administering the Scheme, had granted 3 lac stock options
to the MD & CEO. As at March 31, 2016, the said 3 lac stock
options have increased to 6 lacs on account of issue of
bonus equity shares by the Company in the ratio of 1:1.
These stock options are now vested in the MD & CEO and
constitute 0.02% of the paid up equity share capital of the
Company as on the date of this report.
During the year under review, out of the stock options
vested as above, the MD & CEO had exercised, in aggregate
3 lacs stock options on November 15, 2016, December 26,
2016 and March 24, 2017, respectively. Pursuant to the
exercise of stock options, the Securities Issue Committee
of the Board had approved, in aggregate, allotment of 3 lac
equity shares, vide resolutions passed by circulation on
November 21, 2016, December 29, 2016 and March 29,
2017 respectively. The perquisite value in respect of the
stock options exercised has been included as part of the
disclosure on remuneration of the MD & CEO in the Corporate
Governance Report.
85
•
•
Marico MD CEO Employee Stock Option Plan 2014
The Members at the 26 Annual General Meeting of the
Company held on July 30, 2014, 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.
th
The Corporate Governance Committee entrusted with the
responsibility of administering the Plan and the Scheme(s)
notified thereunder had granted 46,600 stock options to
MD & CEO. As at March 31, 2016, the said 46,600 stock
options have increased to 93,200 on account of issue of
bonus equity shares by the Company in the ratio of 1:1.
These stock options are now vested in the MD & CEO and
constitute 0.007% of the paid up equity share capital of the
Company as on the date of this report. So far, MD & CEO has
not exercised any stock options under this Plan.
In view of the implementation of Marico Employee Stock
Option Plan, 2016, as explained below, no further grant of
stock options is envisaged under this 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 to grant Options to any single employee not exceeding
0.15% of the issued equity share capital of the Company as
on the commencement date.
The Corporate Governance Committee is entrusted with the
responsibility of administering the Plan and the Scheme(s)
notified thereunder. Accordingly, the details of Schemes
notified under the Plan and the Options granted thereunder
are given in “Annexure D” to this report.
Marico Employees Stock Appreciation Rights Plan, 2011
The Members at the 27 Annual General Meeting of the
Company held on August 5, 2015, had approved the Marico
Stock Appreciation Rights Plan, 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
th
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, 2017 an aggregate of 34,35,730 STARs
were outstanding which constitute about 0.27% of the paid
up equity share capital of the Company.
STATUTORY INFORMATION ON ESOS, STAR AND TRUST
Disclosure on ESOS, STAR and Trust in terms of Section 62(1)(b) of
the Act, read with Rule 12(9) of the Companies (Share Capital and
Debentures) Rules, 2014, Regulation 14 of the SEBI (Share Based
Employee Benefits) Regulations, 2014 and SEBI Circular dated
June 16, 2015 is enclosed as “Annexure D” and forms part of this
report. Further, the Company has complied with the applicable
accounting standards in this regard.
The statutory auditor of the Company i.e. M/s. Price Waterhouse,
have certified that implementation of all the above employee
benefit Schemes/Plans is in accordance with the SEBI (Share
Based Employees Benefits) Regulations, 2014, as applicable, and
the resolutions passed by the Members at the respective General
Meetings approving such employee benefit Schemes/Plans.
AUDIT COMMITTEE
The Audit Committee comprises Independent Directors namely
Mr. Nikhil Khattau (Chairman), Mr. B. S. Nagesh, Ms. Hema
Ravichandar and Non-Executive 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.
VIGIL MECHANISM
Your Company has a robust vigil mechanism in the form of
Unified Code of Conduct which enables employees to report
concerns about unethical behavior, 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 Company 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.
Statutory Reports
•
86
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 sub-committees namely:
•
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 for 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, the Audit Committee and the Corporate Governance
Committee are informed periodically on the matters reported to
CCC and the status of resolution of such cases.
The Company affirms that no personnel has been denied access
to the Audit Committee.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
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,
Pro h i b i t i o n & Re d re s s a l ) Ac t , 2 0 1 3 a n d R u l e s m a d e
thereunder, your Company has constituted PoSH Committee
During FY17, this Committee received 1 complaint on sexual
harassment and the same was disposed of in accordance with
applicable laws and the policy of your Company.
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 2016-17 or the previous financial year. Your Company did not
accept any deposit during FY17.
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.
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 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 Act, read with the
Companies (Management and Administration) Rules, 2014, are
enclosed as “Annexure F” to this report.
ACKNOWLEDGEMENT
Your Board takes this opportunity to thank Company’s members
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, vendors, 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
Date : June 29, 2017
Harsh Mariwala
Chairman
(DIN: 00210342)
ANNEXURE ‘A’ SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2017
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Marico Limited
7th Floor, Grande Palladium
175, CST Road, Kalina
Mumbai 400 098
I have conducted the secretarial audit of the compliance of
applicable statutory provisions and the adherence to good
corporate practices by Marico Limited (hereinafter called the
Company). Secretarial Audit was conducted in a manner that
provided me a reasonable basis for evaluating the corporate
conducts/statutory compliances and expressing my opinion
thereon.
Based on my verification of the Company’s books, papers, minute
books, forms and returns filed and other records maintained by
the Company and also the information provided by the Company,
its officers, agents and authorized representatives during the
conduct of secretarial audit, I hereby report that in my opinion,
the Company has, during the audit period covering the financial
year ended on 31 March 2017 (‘Audit Period’) complied with the
statutory provisions listed hereunder and also that the Company
has proper Board-processes and compliance-mechanism in place
to the extent, in the manner and subject to the reporting made
hereinafter:
I have examined the books, papers, minute books, forms and
returns filed and other records maintained by the Company for
the financial year ended on 31 March 2017 according to the
provisions of:
(i)
The Companies Act, 2013 (‘the Act’) and the rules made
thereunder;
(ii)
The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and
the rules made thereunder;
(iii)
The Depositories Act, 1996 and the Regulations and Bye-laws
framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules
and regulations made thereunder to the extent of Overseas
Direct Investment and External Commercial Borrowings;
(v)
The following Regulations and Guidelines prescribed under
the Securities and Exchange Board of India Act, 1992
(‘SEBI Act’):(a) The Securities and Exchange Board of India (Substantial
Acquisition of Shares and Takeovers) Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition
of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009
(Not Applicable to the Company during the Audit
Period);
(d) The Securities and Exchange Board of India (Share
Based Employee Benefits) Regulations, 2014;
(e) The Securities and Exchange Board of India (Issue
and Listing of Debt Securities) Regulations, 2008 (Not
Applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars
to an Issue and Share Transfer Agents) Regulations, 1993
regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting
of Equity Shares) Regulations, 2009 (Not Applicable to
the Company during the Audit Period); and
(h) The Securities and Exchange Board of India (Buyback
of Securities) Regulations, 1998 (Not Applicable to the
Company during the Audit Period).
(vi) During the Audit Period, no law was specifically applicable
to the Company.
I have also examined compliance with the applicable clauses of
the following:
(i)
(ii)
Secretarial Standards issued by The Institute of Company
Secretaries of India;
The Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015.
During the Audit Period the Company has complied with the
provisions of the Act, Rules, Regulations, Guidelines, Standards,
etc. mentioned above.
I further report that
The Board of Directors of the Company is duly constituted with
proper balance of Executive Directors, Non-Executive Directors
and Independent Directors. There were no changes in the
composition of the Board of Directors during the Audit Period.
Adequate notice is given to all Directors to schedule the Board
Meetings, agenda and detailed notes on agenda were sent at
least seven days in advance, and a system exists for seeking and
obtaining further information and clarifications on the agenda
87
Statutory Reports
FORM NO. MR.3
SECRETARIAL AUDIT REPORT
88
items before the meeting and for meaningful participation at the
meeting.
All decisions at Board Meetings and Committee Meetings are
carried out unanimously as recorded in the minutes of the meetings
of the Board of Directors or Committee of the Board, as the case
may be.
I further report that there are adequate systems and processes
in the Company commensurate with the size and operations of the
Company to monitor and ensure compliance with applicable laws,
rules, regulations and guidelines.
I further report that during the audit period the Company had no
specific events/actions having a major bearing on the Company’s
affairs in pursuance of the above referred laws, regulations,
guidelines, standards etc.
Place:Pune
Date : 2 May 2017
Dr. K. R. Chandratre
Company Secretary in
Practice
FCS 1370
CP No 5144
ANNEXURE ‘B’ TO THE BOARD’S REPORT
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
A Brief Outline of the Company’s CSR Philosophy,
including overview of projects or program proposed to
be undertaken and the web-link to the CSR Policy and
projects or programs.
Marico’s CSR Philosophy
Marico’s stated purpose is to “Make a Difference”. This
purpose has defined our reason to exist; we have always
believed that we exist to benefit the entire ecosystem
of which we are an integral part. We firmly believe that
we belong to an interdependent ecosystem comprising
Shareholders, Consumers, Associates, Employees,
Government, Environment and Society and that we have a
commitment to all these stakeholders.
We believe that economic value and social value are
interlinked. A firm creates economic value by creating social
value – by playing a role in Making a Difference to the lives
of its key stakeholders. Furthermore, a firm cannot do this
in isolation; it needs the support and participation of other
constituents of the ecosystem. Sustainability comes from
win-win partnerships in the ecosystem.
Marico’s CSR Policy is therefore anchored on the core
purpose of “Make a Difference” to the lives of all its
stakeholders to help them achieve their full potential.
The policy can be accessed on http://marico.com/india/
investors/documentation/corporate-governance.
The CSR Pivots:
While the Ministry of Corporate Affairs has spelt out the CSR
activities under Schedule VII to the Companies Act, 2013, in
order to build focus and have a more impactful execution –
with a view to make a difference - Marico’s CSR efforts will
be primarily dedicated in areas which include the following:
Scalability of social organisations
Marico believes in unlocking the potential of social
enterprises in India through its intervention to aid them
scale faster and thus create a sustainable and equitable
impact on the social ecosystem. Marico will strive to foster
this value through innovation and other means to deliver
scale and direct impact thereby benefiting the underserved
communities.
Community Development
Community Development is integral for building a
harmonious relationship with the community dwelling in
the periphery where Marico operates which will go long in
supporting one another for a sustainable growth. Marico will
therefore work towards the upliftment of communities and
villages that border Marico’s workplaces/units.
Education
Marico also believes that one of the most significant
indicators of social progress is education, which also plays
a decisive role for a society to achieve self – sustainable
and equitable development. Further, infusing innovation
in Education will enable further impact. With an increasing
global realization of how business community can and should
contribute to social objectives, education deserves a higher
level of corporate involvement.
Health Care
Marico is a keen proponent of Healthcare and hopes to
innovatively create impact in this sector. We aim towards
preventative as well as facilitative health care of India’s
populace.
Livelihood enhancement
Providing livelihood opportunities is critical for economic
empowerment of the nation. Creating sustainable livelihood
and enhanced earning potential to the farmer community
through knowledge, innovation and transformative actions
is therefore another thrust of our CSR.
Implementation Strategy for CSR initiatives:
Your Company aims to achieve its CSR objectives through:
1.
2.
3.
Marico Innovation Foundation (MIF)
A.
MIF Scale Up Program:
Its wholly owned subsidiary, Marico Innovation
Foundation (details given below);
Its brands – your Company believes that brands too
have a purpose and they can contribute meaningfully
to the Company’s CSR efforts; and
Functional initiatives by its manufacturing locations and
procurement operations.
MIF, a Company incorporated under section 25 of the
Companies Act, 1956, is a wholly owned subsidiary of your
Company. MIF is a not-for-profit organisation working
towards the cause of innovation since 2003. The Foundation
creates impact through its below mentioned programs:
The Scale Up program works with ‘For Profit’ and ‘Not For
Profit’ organisations and is sector agnostic. It focuses on
the innovative ideas and the impact an organization wishes
to achieve. The Program also focuses on creating ‘scalable
and sustainable impact’ by solving the critical business
challenges faced by an organisation. The program follows
a hands-on engagement process.
The Scale up program is also aided through multiple
interventions:
a)
b)
The Foundation leverages Marico members, external
CEO’s and sectoral experts as Mentors to utilize their
knowledge and skills. This is done through measured
and structured interventions which have been designed
by the Foundation to leverage their knowledge capital;
Student teams from leading B-Schools in India are
brought in annually to help social organization with
research (primary and secondary) and with critical
inputs on their business; and
Statutory Reports
I.
89
ANNEXURE ‘B’ TO THE BOARD’S REPORT
90
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
c)
In the financial year 2017 the Foundation worked closely with
the following organisations to scale up their impact:
(i)
The Foundations’ ecosystem connects also enables
the scale up program to draw synergies with likeminded partners who assist the Foundation on specific
interventions.
Tara Livelihood Academy:
TARA Livelihood Academy (TLA) was established in 2007 by
the Development Alternatives Group (DAG) as yet another
vehicle to fulfill its mandate of disseminating Sustainable
Development, by providing skills to the youth, women and
community groups. TLA exited our portfolio in March 2017.
MIF helped TLA through:
1.
Creation of an asset light model of operations;
3.
4.
Right GTM Strategy - Identification of right markets for
TLA to offer their training services;
5.
(ii)
Fractal Microspin:
2.
Streamlining of the process and reducing the cost of
recruitment of potential candidates;
Pivot from training to livelihood – Ensuring trained youth
are connected to appropriate livelihood opportunities.
SOP creation- Creating standardized SOP’s for the 4
prototypes for TLA to use as templates during scale-up
to new geographies.
Microspin Machine Work was established by Fractal
Foundation in 2011 to ensure that farmers didn’t have to
settle with the raw end of the cotton value chain. A machine
that can easily be installed in a farmer’s backyard, Microspin
mechanically converts raw cotton into yards of fabric.
Mr. Pramod Gothi, Ex-Managing Director, Morarjee Mills
mentored Fractal Microspin. Microspin exited our cohort in
January 2017.
(iv) Zaya Labs:
1.
2.
Leveraging the established networks and ecosystems
with leading apparel manufacturers for the acceptance
and adoption of Crafted Yarn; and
Facilitating creation of communication tools that help
Microspin sell its concept with garment corporates.
a)
Supply chain and Logistics Management;
c)
Creation of the value proposition for the app and the
cloud platform processes.
The primary objective of YP is to provide Livelihoods to
deprived, out of school youth through Vocational Training
and provide access to wage or self-employment. YP exited
the MIF cohort in March 2017.
The intervention areas of MIF included:
1.
2.
3.
Helping YP improve its field staff’s operation
effectiveness;
Assisting YP in the creation of a mobile app for overall
monitoring and tracking; and
Getting YP to benchmark best practices in sales by
getting their ASMs shadow Marico’s Sales team.
b)
KPI and KRA creation for their entire Zaya portfolio; and
(v)Atomberg
Atomberg is an organization that has developed India’s most
energy efficient ceiling fan, the Gorilla fan. MIF is helping
Atomberg with the following:
a)
b)
Manufacturing and Supply Chain problem and;
Go to market challenge for the B2C Segment.
(vi)I-SolarLite
i-Solarlite addresses the issues of unreliable electricity
among the rural populations of the developing countries.
They do this by providing state-of-the-art solar products
including solar room lights, solar home lights and solar
lamps. MIF is helping them with their Sales and Distribution
Challenge.
(vii) Educate Girls
Established in 2007, Educate Girls is holistically tackling
issues at the root cause of gender inequality in India's
education system that has helped to ensure over 90%
enrollment and significantly higher attendance for all
girls as well as improved school infrastructure, quality of
education and learning outcomes for all children. In the first
intervention, MIF helped the organisation save an estimated
cost of around Rs 1.3 Crore in FY17 and FY18. We are
currently helping them with their public relations and advocacy
challenge.
(viii) Green Salute
(iii) Yuva Parivartan (YP):
MIF helped Zaya in the following areas:
MIF helped Microspin through:
Zaya is an education-technology startup based in Mumbai.
Since Zaya also uses hardware, as they scale the business;
their supply chain had to be geared to support the increase
in volumes. Zaya exited MIF’s cohort in March 2017.
Green Salute is a waterless car wash solution, with the
cleaning service included. This solution results in saving the
water which is wasted while washing cars. We are currently
working with them on their GTM strategy.
B.Incubation:
MIF is in association with Villgro incubated an organisation
called Yostra Labs Private Limited. Yostra is a healthcare
technology firm pioneering smart innovations to make
healthcare more effective and affordable.
Yostra has developed two products specifically to enable
mass screening and treatment of diabetic patients
at primary and secondary healthcare centres and
resource-poor settings making treatment accessible
to patients from all socio-economic strata.
ANNEXURE ‘B’ TO THE BOARD’S REPORT
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
MIF Talkies- Web Series:
MIF Talkies is a web series created by MIF. As part of this
on-going series, MIF is sharing some of the most amazing
innovations of India that are truly transforming lives,
communities, businesses and more.
Brand CSR
Nihar Shanti Amla (NSA): promoting child education
In 2012, your Company, under its hair oil brand name Nihar Shanti
Amla, launched a programme called “Chotte Kadam Pragati
ke Aur” to support the education of underprivileged children.
Retention, learning outcomes and training in soft and life skills
within the age group of 4-14 years were identified as three priority
education interventions. Under this program NSA partnered with
two organisations in the year ended 2017:
1.
Educate Girls: Udaipur and Jalore district of Rajasthan.
2.
Sesame India Workshop: Farrukabad, Shahjahanpur and
Kannauj districts of Uttar Pradesh.
1. 2. Educate Girls:
Objective: Provide quality education for all underserved
and marginalized girls by mobilizing public, private and
community resources thus improving access to education
and school quality and achieving behavioural, social and
economic transformation for all girls in India’s gender gap
districts thereby creating an India where all children have
equal opportunities to access quality education.
Impact: Total number of children benefitted from the Educate
Girls Program in FY 2016-17 is 35,307 .
Sesame Workshop India:
Objective: Using media to engage children and aid their
basic academic and life skills to help them reach their
maximum potential. Galli Galli Sim Sim is India’s only
educational program for children that harnesses the
power of television to provide a strong early childhood
educational foundation to pre-schoolers and promotes
children’s overall cognitive, socio-emotional and physical
development while celebrating India’s cultural diversity.
Impact: Total children benefitted from Sesame Workshop
India in FY 2016-17 is 70,000 children.
Mobile Pathshala:
In FY 17, Nihar Shanti Angrezi Mobile Pathshala evolved to become
Nihar Shanti Pathshala Funwala. In the new property the content
structure for basic spoken English was taken from Pratham and
creatively put into audio modules with the introduction of 2 new
characters. The property went live on March 7, 2017.
Your company also tied up with All India Radio(AIR) and is run as
a 5 min radio show on AIR in Uttar Pradesh and Madhya Pradesh
everyday Monday to Friday. In addition to Radio, School contact
program was also started to promote the property in UP at the
end of March this year.
Impact- The response till now has been amazing. The average
engagement rate which was 1.2 minutes per caller has gone up to
12 Minutes per caller. The Patshala Funwala has received. 2.46 lac
calls since its launch in March 2017 with 10,000 + hrs of content
consumption.
Saffola: Healthy lifestyle is the key to a Healthy Heart
Saffolalife is the non-profit arm of the Saffola brand, which remains
committed to its vision of creating a Heart Healthy India. The brand
has led many initiatives consistently over the years, to educate
consumers on the importance of taking care of their heart.
Various consumer studies have revealed that most people see
achieving heart health as a daunting task and find it difficult to
make big changes in their current lifestyle. This is the reason that
despite being aware, there is inertia towards taking proactive steps
regarding heart health. Taking cognizance of this barrier, Saffolalife
took on the objective of enabling people to integrate heart health
in their everyday lifestyle. The objective was to inspire people to
adopt a healthier everyday lifestyle so as to have a healthy heart.
For the World Heart Day campaign this year World Heart Federation
findings which establish the co-relation between our everyday
lifestyle and heart health became the core thought of the Saffolalife
campaign. The findings show that - “Staying Active, Eating Better
and Being Happy can make your heart up to 50% healthier”.
Campaign Legs:
Saffolalife Communication: The campaign coined "Chhote Kadam
– dil ke bade kaam ke" as a creative idea to drive home the point.
It showcases people in all walks of life taking tiny steps towards a
healthy lifestyle – regular walks, playing a sport, indulging in dance
or yoga, being happy and having fun, eating mindfully by avoiding
junk food or consuming in small portions, etc. It educates people
about how making a small effort and bringing about minimal
alteration in your daily habits could lead to your heart health
improving by 50%.
Development of Healthy Lifestyle Score: The Saffolalife Healthy
Lifestyle Score has been developed in conjunction with eminent
cardiologists, dieticians and doctors with the mission to educate
people on early heart health measures. Association of Physicians
of India, Hypertension Society of India and the India Academy of
Diabetes have supported the Saffola Healthy Lifestyle Score with
a view to promote proactive Heart Health in India. It is a unique tool
that correlates one’s lifestyle to heart health.
The Healthy Lifestyle Score was converted into an online tool and
was launched on www.saffolalife.com; targeted digital campaigns
were run during the year to raise awareness and divert traffic
towards Saffolalife.com for the consumers to take the healthy
lifestyle score test online.
Impact: During the year we had 43,542 consumers took the
test online.
Saffolalife Research Study: The Healthy Lifestyle Score further
became the core of the Saffolalife Research study as well.
Statutory Reports
C.
91
ANNEXURE ‘B’ TO THE BOARD’S REPORT
92
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
Saffolalife Research Study was conducted amongst consumers
across Delhi, Mumbai, Bangalore, Kolkata and Chandigarh with
Nielsen and SRL Labs to arrive at the Healthy Lifestyle Score of
India. The study went further to bring out insights on country’s
physical activity levels, eating habits and stress levels.
•
•
Saffolalife Research Study released Healthy Lifestyle Score
of India at 68. Further breaking the different components
of Healthy Lifestyle score - India’s Eat Better Score at
58, Happiness Score at 55 and Active Score at 35. This
showcases how the sedentary lifestyle of India is pulling its
healthy lifestyle index down.
Saffolalife Study PR conference for dissemination to
Medical Journalists: Findings of the Saffolalife study were
disseminated though PR conferences across Delhi, Mumbai
and Kolkata by Medical Experts.
Saffolalife Study Event for Lifestyle Media: The brand further
ropes in experts to highlight each vector of the Healthy Lifestyle;
Shilpa Shetty representing Stay Active vector, Chef Kunal Kapur
representing Eating Better and veteran comic Cyrus Sahukar
talking about benefits of Staying Happy.
Other Initiatives
Expenses incurred towards improving agricultural productivity:
Oats Local Variety Development:
Your Company has understood the need to improve production
of Oats in India which pales in comparison to other cash crops
and hence stepped in by funding the research for developing of
an Oats variety in India in association with Tamil Nadu Agricultural
University (TNAU) and Indian Agricultural Research Institute (IARI)
fit for processing for human consumption. These efforts have
shown positive results.
The new variety of Oats seeds would be available to the Indian
farmers for sowing in the FY2019.
Impact: The Advance Varietal Trial (AVT) stage was successfully
completed with production of 70 MT of Oats across 2 selected
varieties with 60 farmers in 5 States. The Local Oats development
project will move into the advanced Varietal Trail-II in this, the Oats
will be cultivated in different locations for second year in different
soil types and cultivation conditions.
Coconut Productivity Improvement: Thennaivalam – A wellbeing Initiative
Coconut is an important crop in India cultivated in the Southern
States by close to 1 million farmers. Most of the farmers based
there do not have the knowledge on making the most from their
coconut farm. They depend on traditional practices which they
have learnt by experience and observing others. But they struggle
to get the best productivity from their farm.
Marico team collected all such practices from various Universities
and agri-experts, published a booklet and distributed it to farmers
for their understanding.
In addition, Marico conducted 71 training programs which were
attended by more than 1,280 farmers whereby the farmers were
educated about the package of practices and disease management
techniques to improve the productivity of Coconut. This takes the
total farmers trained to over 4,500 under the program.
504 farmers enrolled into the Focussed Productivity Improvement
Program in addition to 120 farmers already enrolled last year. In
this program Marico employee visits the farm once every month
and provides improvement advice. The early adopters have seen
excellent results in productivity improvement.
As soil is the core for any plant growth, it was essential to
understand the availability of nutrients and other parameters.
In an initial phase we have carried out soil testing for more than
100 farmers.
In order to further improve productivity, your Company also
believes in researching cutting edge methods of productivity
improvements by doing on field trails of new practices. Your
Company continues to do about 7 Design of Experiments to
ascertain benefits of specific practices or inputs which can
become a part of recommendation, if proven.
Impact: Over 4,500 farmers trained for techniques to improve
productivity and 120 farmers who enrolled in the Focussed
Productivity Program in FY16 were able to realize 33% increase in
productivity compared to control farms in the same area.
Perendurai Model Farm:
The objective of the program is to evaluate the performance of
different varieties and hybrids of coconuts available in India under
different package of practices and demonstrate the differences
to enable the farmers to select the right hybrids or varieties. 18
saplings each of 6 different hybrids have been planted. There
are 3 different levels of cultivation practices which are followed
for each variety. The plants are currently in the second year. The
morphological characteristics of the plants are being tracked.
In addition to the Perendurai model farm, 20 more trail farms have
been taken up for hybrid cultivation demo to showcase the benefits
of hybrid (which can double productivity) to the farmers.
Impact: Once the plants enter into 4th year (CY 2019), the farmers
would be invited to see the performance of different varieties and
cultivation conditions so that they can adopt the best variety and
best cultivation conditions.
Contribution towards JSW Group Sports Initiative:
Your Company made a contribution worth Rs. 25 Lacs towards
the Sports Division of the JSW Group which is engaged in driving
a variety of sporting programs that strives to give Indian athletes
exposure to cutting edge facilities and sports science.
II.
Composition of the Corporate Social Responsibility
Committee:
The composition of the Corporate Social Responsibility
Committee has been disclosed in the Corporate Governance
Report of the Annual Report.
a
2
CSR project or activity
identified
MIF Scale Up Program
I-SolarLite
Educate Girl
Atomberg
Zaya Labs
WoW Wash
Thought Leadership
Incubation support to Yostra Healthcare
Labs
i
k
2
3
j
Eco Cooker
Agrostar
UE Lifesciences
h
g
Infusing innovation through
thought leadership
Conservation of natural
resource
Education
Conservation of natural
resource
Agriculture
Healthcare
Livelihood Enhancement
Project
Fractal Microspin
f
Livelihood Enhancement
Project
Yuva Parivartan
e
Livelihood Enhancement
Project
Tara Livelihood
Alternative Energy Project
Education
Alternative Energy Project
d
Ex - Projects:
c
b
a
Current Projects
1
3
Sector in which the project
is covered
Bangalore
PAN India
Mumbai, Maharashtra
PAN India
Mumbai, Maharashtra
Maharashtra, Rajasthan,
Gujarat
Maharashtra
Vidarbha, Maharashtra
PAN India
Madhya Pradesh & Uttar
Pradesh
Bihar and Uttar Pradesh
Rajasthan
Mumbai, Maharashtra
4
Projects or programs:
(1) Local area or other
(2) Specify the State and
district where projects
or Programs was
undertaken
5
-
1,830,000
709,116
Amount outlay
(budget)
project
or Program
wise
(Amount in ₹)
Manner in which the amount spent during the financial year is detailed below:
Amount unspent , if any- Nil
(A) Marico Innovation Foundation (MIF)
1
Sr.
No.
c
b
Total amount to be spent for the financial year: R 13.15 Crores
Details of CSR spent during the financial year: R 13.21 Crores
Prescribed CSR Expenditure (2% of the amount as in item III above): R 13.15 Crores
V
IV
Average net profit of the Company for the last three financial years : R. 657.48 Crores
2,000,000
2,342,469
161,011
6
Amount spent on the
projects or programs
subheads: (1) Direct
expenditure on projects
or programs (2)
Overheads (Amount in ₹)
MIF is a not for Profit institution established in
2003, registered as a section 8 company. It helps
business and social organizations enhance
economic and social value using breakthrough
innovation. There is no implementing agency
since this project is being managed in-house
by the Marico Innovation Foundation.
8
Amount spent:
Direct or through implementing agency*
2,000,000 Partnered with Villgro to give funding support to
Yostra Labs which is creating a multi-parameter
screening device to help early diagnosis of
Diabetic Peripheral Neuropathy (DPN).
3,251,616 Dissemination of content through various
platforms. Launched MIF Talkies a web series
that gives innovators a platform to showcase
innovations
3,789,954 Through Implemention agency : Marico
Innovation Foundation (MIF).
7
Cumulative
expenditure
upto the
reporting
period
(Amount in ₹)
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
Statutory Reports
III
ANNEXURE ‘B’ TO THE BOARD’S REPORT
93
1
Hackathon
Going to School (GTS)
Sesame Workshop India Trust Promoting Education
(SWIT)
IMRB
c
d
Impact assessment
Promoting Education
Educate Girls (EG) Udaipur project Promoting Education
b
a
Nihar Shanti Amla : Education initiative(s)
-
3
Sector in which the project
is covered
1
(B) Brand Led CSR Initiatives
TOTAL (A)
4
2
CSR project or activity
identified
Impact assessment of the
three projects:
1. Educate Girls (Udaipur)
2. Sesame Workshop
India Trust
3. Going to School
(Impact assessment is
excluding Educate Girls
Jalore project)
Farukkhabad
Shahjahanpur
Kannauj
Districts of Uttar Pradesh
Muzzafarpur District, Bihar
Udaipur district, Rajasthan
-
4
Projects or programs:
(1) Local area or other
(2) Specify the State and
district where projects
or Programs was
undertaken
3,205,050
10,293,774
–
2,375,687
10,845,508
746,862
23,201,729
4,503,480
4,119,216
26,817,707
-
6
Amount spent on the
projects or programs
subheads: (1) Direct
expenditure on projects
or programs (2)
Overheads (Amount in ₹)
1,580,100
5
Amount outlay
(budget)
project
or Program
wise
(Amount in ₹)
8
Amount spent:
Direct or through implementing agency*
5,655,271
IMRB is the impact evaluation partner who wiill
be conducting the baseline, midline (in case of
Educate Girls) and endline to help us understand
the impact.
22,461,504 Sesame Workshop India Trust (SWIT) is leading
the movement to change the educational
equation through its innovative projects that
puts children at the center of development.
Under its flagship initiative Galli Galli Sim Sim
(GGSS), SWI works in low resourced classrooms
and communities to bring to children and their
caregivers, language and strategies that has
a proven impact on their literacy, numeracy,
physical wellbeing and social emotional skills
4,953,355 Going to School (GTS) is a creative non-profit
education trust with a 12-year track record
of creating design driven, inspiring stories
with heroes, children can identify themselves
with. GTS motivates children, especially girls,
to stay in schools, learn entrepreneurial skills
and use their education to transform their
lives and create opportunities for themselves.
GTS’s current focus is to teach entrepreneurial
skills predominantly in government secondary
schools through a one year program to children
in grade nine through the Be! Schools program.
The ultimate goal is to equip children with the
skills that they need to eventually become
entrepreneurs and secure gainful employment.
36,392,386 Ed u ca te G i r l s i s a n o n - g ove r n m e n t a l
organization that holistically tackles issues
at the root of gender inequality in India’s
educational system. With a focus on enrollment,
retention and learning, Educate Girls aims
to provide quality education for all underserved and marginalized girls by mobilizing
and leveraging public, private, and community
resources to improve access to education and
school quality.
16,048,392
7,006,821 MIF did not undertake a Hackathon in the
current year. In its place we incubated an
organisation with Villgro.
7
Cumulative
expenditure
upto the
reporting
period
(Amount in ₹)
94
Sr.
No.
ANNEXURE ‘B’ TO THE BOARD’S REPORT
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
1
Sports
Calamity
Livelihood enhancement
9,421,640
6,262,311
131,508,526
145,627,027
6,934,620
138,692,407
9,327,000
125,246,216
-
2,500,000
-
2,500,000
6,921,640
124,767,287
111,800,000
6,827,000
58,447,596
29,149,904
6
Amount spent on the
projects or programs
subheads: (1) Direct
expenditure on projects
or programs (2)
Overheads (Amount in ₹)
45,000,000
26,483,469
5
Amount outlay
(budget)
project
or Program
wise
(Amount in ₹)
293,409,714
17,032,583
276,377,132
18,991,322
2,500,000 Direct
2,300,000 Direct
14,191,322 Direct
241,337,418
131,261,545 Direct
Place : Mumbai
Date : May 2, 2017
Saugata Gupta
Managing Director & CEO
Rajeev Bakshi
Chairman of the CSR Committee
Disclosure on Corporate Social Responsibility (‘‘CSR’’)
Statutory Reports
VII The CSR Committee confirms that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the Company.
8
Amount spent:
Direct or through implementing agency*
40,613,357 Nihar Shanti Amla had launched the Angrezi
mobile pathshala, which is a first of its kind
property, that provides its callers an opportunity
to learn simple English words through stories &
characters, completely free of cost to the caller.
The intention is to take learning as close to the
consumer with this property.
7
Cumulative
expenditure
upto the
reporting
period
(Amount in ₹)
*Give details of implementing agency: The details are captured above.
TOTAL CSR SPEND (A)+(B)+(C)+(D)
-
-
Money paid to Tamil Nanu
Agricultural University for
doing the development.
All India
To promote education
through mobile pathshala
4
Projects or programs:
(1) Local area or other
(2) Specify the State and
district where projects
or Programs was
undertaken
(D) Capacity Building and Administrative Expenditure (Limited to the cap of 5% of total spent)
TOTAL CSR SPEND (A)+(B)+(C)
TOTAL (C)
JSW Initiative for Sports
Calamity Led Initiative
2
2
Expenses incurred towards
improving agricultural
productivity
1
(C) Other Initiatives
TOTAL (B)
Saffola World Heart Day CSR - Preventive Healthcare
Saffolalife Free Cholesterol tests
2
Promoting Education
3
Sector in which the project
is covered
Mobile Pathshala Initiative
2
CSR project or activity
identified
e
Sr.
No.
ANNEXURE ‘B’ TO THE BOARD’S REPORT
95
ANNEXURE ‘C’ TO THE BOARD’S REPORT
96
Information 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
A)
Ratio of Remuneration of each Director to the median
remuneration of all the employees of your Company for
the financial year 2016-17 is as follows :
Name of Director
B)
Total
Remuneration*
(₹)
Ratio of
remuneration
of Director to
the Median
remuneration***
Mr. Harsh Mariwala
55,220,000
62.77
Mr. Saugata Gupta**
165,514,148
188.15
Mr. Anand Kripalu
2,530,000
2.88
Mr. Atul Choksey
2,550,000
2.90
Mr. B. S. Nagesh
2,790,000
3.17
Ms. Hema Ravichandar
2,940,000
3.34
Mr. Nikhil Khattau
2,850,000
3.24
Mr. Rajeev Bakshi
2,590,000
2.94
Mr. Rajen Mariwala
2,650,000
3.01
*The remuneration to Non-Executive Directors includes sitting fees
paid during the financial year 2016-17.
**The remuneration of Mr. Saugata Gupta, Managing Director & CEO
includes the perquisite value of the stock options excercised by him
during the financial year 2016-17 amounting to R 77,217,500.
***The median remuneration of the Company for all its employees is
R 8,79,698 for the financial year 2016-17. For calculation of median
remuneration, the employee count taken is 1,095 which comprises
employees who have served for whole of the financial year 2016-17.
Details of percentage increase in the remuneration of
each Director, Chief Executive Officer, Chief Financial
Officer and Company Secretary in the financial year 201617 are as follows :
Name
Designation
Remuneration
(₹)
2016-17
2015-16
Increase/
(Decrease)
Chairman & Non
55,220,000
55,284,000
0%
Mr. Saugata
Managing Director 165,514,148
80,630,477
105%
-Executive Director
2015-16
40%
Mr. Nikhil
Independent
2,850,000
2,000,000
43%
Mr. Rajeev
Independent
2,590,000
1,860,000
39%
Mr. Rajen
Non- Executive
2,650,000
1,980,000
34%
Mr. Vivek Karve Chief Financial
24,278,909
19,641,043
24%
336,436
3,501,025
N.A.
10,622,448
*'N.A.
N.A.
Khattau
Bakshi
Mariwala
Director
Director
Director
Promoter Director
Officer
Ms. Hemangi
Ghag***
Mr. Surender
Sharma****
Company
Secretary &
Compliance Officer
Company
Secretary &
Compliance Officer
*The remuneration of Mr. Saugata Gupta, Managing Director & CEO includes
the perquisite value of the stock options excercised by him during the
financial year 2016-17 amounting to R 77,217,500. Hence the remuneration
paid to him in the financial years 2016-17 and 2015-16 is not comparable.
** Mr. Atul Choksey has ceased to be an Independent Director of the
Company w.e.f. April 1, 2017
*** Ms. Hemangi Ghag ceased to be the Company Secretary & Compliance
Officer of the Company w.e.f April 28, 2016 and hence the remuneration paid
to her in the financial year 2016-17 is not comparable with the remuneration
paid to her in the financial year 2015-16
****Mr. Surender Sharma was appointed as the Company Secretary &
Compliance Officer of the Company w.e.f. April 29, 2016 and hence was
paid remuneration for the said designation only in the financial year 2016-17
C) Percentage increase in the Median Remuneration of all
employees in the financial year 2016-17
2016-2017
Median* remuneration of all
employees per annum
2,530,000
1,780,000
42%
Mr. Atul
Independent
2,550,000
1,780,000
43%
D)
Mr. B. S. Nagesh Independent
2,790,000
1,960,000
42%
Director
2016-17
2,100,000
Independent
Director
(%)
2,940,000
& CEO
Choksey**
Increase/
(Decrease)
Independent
Ravichandar
Mr. Anand
Director
Remuneration
(₹)
Ms. Hema
Gupta*
Kripalu
Designation
(%)
Mr. Harsh
Mariwala
Name
2015-2016 Increase ( %)
Median
Median
879,698
833,557
6%
* For calculation of median remuneration, the employee
count taken is 1,095 and 981 for the financial year
2016-17 and 2015-16, respectively, which comprise
employees (excluding workmen) who have served for the
whole of the respective financial years.
Number of permanent employees on the rolls of company
as of March 31, 2017
1,588 (inclusive of workmen)
ANNEXURE ‘C’ TO THE BOARD’S REPORT
Information 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
Comparision of average percentage increase in
remuneration of all employee other than the Key
Managerial Personnel and the percentage increase in the
remuneration of Key Managrial Personnel
% Increase/
(Decrease)
Average percentage increse in the Remuneration of all
Employees* other than Key Managerial Personnel
20.4%
Average Percentage increase in the Remuneration
of Key Managerial Personnel**
Mr. Saugata Gupta, Managing Director & CEO
105.3%
Mr. Vivek Karve, Chief Financial Officer
23.6%
Ms. Hemangi Ghag, Company Secretary &
-
Mr. Surender Sharma, Company Secretary &
-
Compliance Officer
Compliance Officer
*Employees who have served for whole of the respective financial
years have been considered.
**Kindly refer the explanations given under point No. B of this
disclosure for better comprehension of the details given hereinabove.
F)
Affirmation
Pursuant to Rule 5(1)(xii) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, it
is affirmed that the remuneration paid to the Directors, Key
Managerial Personnel and Senior Management is as per the
Remuneration Policy of your Company.
Statutory Reports
E)
97
Marico Employee Stock Option
Scheme 2014 (Marico ESOS 2014)
Marico MD CEO Employee Stock
Option Plan 2014 (Marico MD CEO
ESOP Plan 2014)
Marico Employee Stock Option Plan
2016 (Marico ESOP 2016)
Stock options granted under Marico Stock options granted under Marico MD O p t i o n s s h a l l ve s t n o t e a r l i e r
ESOS 2014 shall vest after two years CEO ESOP Plan 2014 shall vest after one t h a n o n e y e a r a n d n o t l a t e r
from the Grant Date.
year from the Grant Date.
than five years from the Grant
Date.
Exercise Price: ₹ 1.00 per share, i.e. at Exercise Price: ₹ 1.00 per share, i.e. at E xercise Price: The Corporate
face value. Exercise Price Formula: NA face value. Exercise Price Formula: NA. Governance Committee to determine
the price under the various Scheme(s)
notified under Marico ESOP 2016 in
accordance with applicable provisions
of the SEBI (Share Based Employee
Benefits) Regulations, 2014.
To be exercised within a period of 18 To be exercised within a period of 12 Exercise period to commence from
months from the Vesting Date.
months from the Vesting Date.
the Vesting Date and will expire on
the completion of such period not
exceeding 5 years from the Vesting
Date.
The source of Shares is Primary.
c Vesting requirements
d Exercise price or pricing formula
e Maximum term of options granted
f
Fair Value
2 Method used to account for Stock Options - Intrinsic or fair value.
3 Where the company opts for expensing of the options using the As per IND AS requirement, the Company has to use fair value method.
intrinsic value of the options, the difference between the employee
compensation cost so computed and the employee compensation
cost that shall have been recognized if it had used the fair value of
the options shall be disclosed. The impact of this difference on profits
and on EPS of the company shall also be disclosed.
There was no variation in terms of Options.
g Variation in terms of options
Source of shares (primary, secondary or combination)
Not more than 3,00,000 stock Equity shares to arise out of exercise
options.
of stock options not to exceed 0.5%
of issued equity share capital of the
Company as on the date of the grant
of options.
Total number of stock options to be
granted to the eligible employees of
the Company and its subsidiaries shall
not exceed in the aggregate, 0.6% of
the issued equity share capital of the
Company as on the commencement of
Marico ESOP 2016 i.e. August 5, 2016.
At the Extra Ordinary General Meeting At the Annual General Meeting held on At the Annual General Meeting held on
held on March 25, 2014.
July 30, 2014.
August 5, 2016.
b Total number of options approved under ESOS
a Date of shareholders’ approval
1 Description of each Employee Stock Option Plan/Scheme that existed at any time during the year, including the general terms and conditions of each such Scheme/Plan :
Details related to ESOS
98
A
ANNEXURE ‘D’ TO THE BOARD’S REPORT
Disclosures under section 62(1)(b) of the Companies Act, 2013 read with Rule 12 (a) of the Companies (Share Capital
and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014
b
a
A description of the method and significant assumptions used
during the year to estimate the fair value of options including
the following information:
7
-
-
-
80,000
NA
-
-
-
-
-
80,000
-
Scheme I
-
-
939,700
NA
-
-
-
-
-
939,700
-
Scheme II
-
-
101,080
NA
-
-
-
-
-
101,080
-
Scheme III
Marico Employee Stock
Option Plan 2016 (Marico ESOP 2016)
3.50%
6.60%
0.96%
3.15 years
25.80%
₹ 1.00 per
share
₹ 296.65
Fair Value
8.00%
3.50%
8.00%
23.66%
3 years and 3 months
₹ 1.00 per share
₹ 329.95
6.60%
0.96%
25.80%
3.15 years
₹ 280.22
₹ 296.65
6.75%
0.96%
3.5 years
26.10%
₹ 1.00 per
share
₹ 255.30
6.75%
0.96%
26.10%
3.5 years
₹ 256.78
₹ 255.30
Marico MD CEO Employee
Marico Employee Stock Option Plan 2016 (Marico ESOP 2016)
Stock Option Plan 2014 (Marico
Scheme I
Scheme II
Scheme III
Scheme IV
MD CEO ESOP Plan 2014)
26.62%
₹ 1.00 per share
₹ 209.15
Marico Employee Stock
Option Scheme 2014
(Marico ESOS 2014)
No employee of the Company received grant of options during the year amounting to 5% or more of options granted or
exceeding 1% of issued capital of the Company.
-
-
719,830
NA
-
-
-
-
-
719,830
-
Scheme IV
Empoyee wise details 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 29th Annual General Meeting.
-
93,200
NA
-
-
1.00
vi) the weighted-average values of the risk-free interest rate
The method used and the assumptions made to incorporate the
effects of expected early exercise;
-
-
93,200
3 years
v) the weighted-average values of expected dividends
-
-
93,200
Marico MD CEO Employee
Stock Option Plan 2014 (Marico
MD CEO ESOP Plan 2014)
300,000
300,000
NA
300,000
300,000
300,000
-
-
600,000
iv) the weighted-average values of expected option life
iii) the weighted-average values of expected volatility
ii) the weighted-average values of exercise price
i) the weighted-average values of share price
(c) identified employees who were granted option, during
any one year, equal to or exceeding 1% of the issued capital
(excluding outstanding warrants and conversions) of the
company at the time of grant.
6
(a) senior managerial personnel;
Employee wise details (name of employee, designation,
number of options granted during the year, exercise price) of
options granted to -
Weighted-average exercise prices and weighted-average fair
values of options shall be disclosed separately for options
whose exercise price either equals or exceeds or is less than
the market price of the stock.
Number of options exercisable at the end of the year
Number of options outstanding at the end of the year
Loan repaid by the Trust during the year from exercise price
received
Money realized by exercise of options (INR), if scheme is
implemented directly by the company
Number of shares arising as a result of exercise of options
(b) any other employee who receives a grant in any one year
of option amounting to 5% or more of option granted during
that year; and
5
4
Number of options exercised during the year
Number of options vested during the year
Number of options forfeited / lapsed during the year
Number of options granted during the year
Number of options outstanding at the beginning of the period
Marico Employee Stock
Option Scheme 2014
(Marico ESOS 2014)
Statutory Reports
Option movement during the year (For each ESOS):
ANNEXURE ‘D’ TO THE BOARD’S REPORT
Disclosures under section 62(1)(b) of the Companies Act, 2013 read with Rule 12 (a) of the Companies (Share Capital
and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014
99
Details related to SAR
STAR Scheme VI
STAR Scheme VII
Approved by the Corporate
Governance Committee of
the Board of Directors on
August 5, 2015*.
A p p r o v e d b y t h e Approved by the Corporate Governance
Corporate Governance Committee of the Board of Directors on
Committee of the Board December 8, 2016*.
of Directors on December
2, 2015*.
None
Source of acquisition is Secondary.
Variation in terms of scheme
Source of shares (primary, secondary or combination)
i
Method of settlement is Cash settlement.
Choice of settlement (with the company or the employee or Choice vests with the Company.
combination)
Method of settlement (whether in cash or equity)
f
The Vested STAR shall be matured as on the Vesting Date according to the terms and conditions as determined and set forth
under the STAR Plan and relevant notified Schemes.
Average of Closing Market Price for a period of 22 Working Days (of the the Stock Exchange) immediately preceding the Grant
date.
g
Maximum term of SAR granted
e
As determined by the Corporate Governance Committee in the respective Schemes notified under the Plan.
i. not be more than 5% of the paid up equity share capital of the Company as at the end of the financial year,
immediately preceding the year in which approval of the shareholder was obtained for such secondary acquisition;
ii. not be more than 2% in a financial year of the paid up equity share capital as at the end of the preceeding financial year; and
iii. not be more than 0.5% of the paid up equity share capital of the Company during a financial year.
Vesting requirements
*The Marico Employee Stock Appreciation Rights Plan 2011 (STAR Plan) was initially approved by the Board of Directors of the
Company at its meeting held on January 27, 2011 and subsequently the modified STAR Plan was approved by the Board of
Directors at its meeting held on June 22, 2015 and the same was recommended to the shareholders. The same was then approved
by the Shareholders at their meeting held on August 5, 2015, in order to align the STAR Plan with the requirements of the SEBI
(Share Based Employee Benefits) Regulations, 2014. The Corporate Governance Committee of the Board has, from time to time,
notified STAR schemes under the STAR Plan as authorized under the aformentioned resolutions.
Approved by the Corporate
Governance Committee of the
Board of Directors on October
29, 2013*
The secondary acquisition by the Trust shall:
SAR price or pricing formula
h
STAR Scheme V
Historical volatility of the share of
the Company over the previous 3.5
years ended December 1, 2016,
based on the life of options
Total number of shares approved under the SAR scheme
Date of shareholders’ approval:
d
c
b
a
STAR Scheme IV
NA
NA
Historical volatility of the
share of the Company over
the previous 3.15 years
ended August 5, 2016,
based on the life of options
Description of each Stock Appreciation Rights (SAR) scheme that existed at any time during the year, including the general terms and conditions of each SAR scheme, including -
B
1
8
Whether and how any other features of the option grant were
incorporated into the measurement of fair value, such as a market
condition.
Disclosures in respect of grants made in three years prior to
IPO under each ESOS until all options granted in the three years
prior to the IPO have been exercised or have lapsed, disclosures
of the information specified above in respect of such options
shall also be made.
d
c
Historical volatility of the share of
the Company over the previous
3 years and 3 months ended
January 4, 2015, based on the
life of options
100
How expected volatility was determined, including an explanation Historical volatility of the
of the extent to which expected volatility was based on historical share of the Company over
volatility; and
the previous 3 years ended
March 31, 2014, based on
the life of options
ANNEXURE ‘D’ TO THE BOARD’S REPORT
Disclosures under section 62(1)(b) of the Companies Act, 2013 read with Rule 12 (a) of the Companies (Share Capital
and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014
identified employees who were granted SAR, during any one year,
equal to or exceeding 1% of the issued capital (excluding outstanding
warrants and conversions) of the company at the time of grant.
Disclosures in respect of grants made in three years prior to IPO
under each SAR scheme until all SARs granted in the three years
prior to the IPO have been exercised or have lapsed, disclosures
of the information specified above in respect of such SARs shall
also be made.
6
-
-
96,100
-
-
-
96,100
-
Tranche II
STAR VI
NA
Nil
Nil
No STARs were granted to the Senior Managerial Personnel during the year under review
c
-
1,240,600
any other employee who receives a grant in any one year of
amounting to 5% or more of SAR granted during that year; and
-
-
-
-
167,200
74,400
1,333,400
b
-
136,400
-
-
5,400
-
5,400
Senior managerial personnel
-
951,200
-
-
-
44,800
91,600
Tranche I
a
-
Number of options exercisable at the end of the year
-
-
-
146,000
6,000
1,091,200
Tranche I Tranche II Tranche III
Employee-wise details (name of employee, designation, number of SAR granted during the year, exercise price) of SAR granted to -
-
Number of options outstanding at the end of the year
-
347,800
71,600
-
419,400
Tranche II
5
-
1,066,400
108,600
Number of SARs exercised/settled during the year
Number of SARs vested during the year
Number of SARs forfeited / lapsed during the year
-
1,175,000
Number of SARs outstanding at the beginning of the year
Number of SARs granted during the year
Tranche I
Particulars
STAR V
-
56,510
-
-
-
56,510
-
Tranche III
SAR movement during the year (For each SAR scheme):
4
STAR IV
Where the company opts for expensing of SAR using the intrinsic Not Applicable. As per IND AS requirement, the company has to use fair value method.
value of SAR, the diff erence between the employee compensation
cost so computed and the employee compensation cost that
shall have been recognized if it had used the fair value of SAR,
shall be disclosed. The impact of this difference on profits and
on EPS of the company shall also be disclosed.
3
-
340,140
-
-
19,270
359,410
-
Tranche I
STAR VII
-
2,820,950
-
1,414,200
518,070
637,220
4,116,000
Total
Statutory Reports
Fair Value
Method used to account for SAR - Intrinsic or fair value.
2
ANNEXURE ‘D’ TO THE BOARD’S REPORT
Disclosures under section 62(1)(b) of the Companies Act, 2013 read with Rule 12 (a) of the Companies (Share Capital
and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014
101
Particulars
Details - FY17
-
Held at the end of the year
2,837,070
-
Sold during the year (After Bonus Issue)
Acquired during the year (After Bonus issue)
-
2,837,070
1,414,200
1,414,200
163,488
4,087,782
2,837,070
Vesting of STAR Scheme IV
1,414,200
1,414,200
282.39
0.01%
163,488
-
-
-
-
4,087,782
NIL
542,551,230
-
IDBI Trusteeship Services Limited
Welfare of Mariconian Trust
Adjustment on account of bonus issue in the ratio of 1:1
Subtotal
Transferred to the employees during the year (No. of shares vested)
Sold during the year (Before Bonus Issue)
Acquired during the year (Before Bonus issue)
Held at the beginning of the year
Number of shares
3 In case of secondary acquisition of shares by the Trust
(f) Number of shares held at the end of the year.
(e) Purpose of shares sold
(d) Number of shares vested to the employees
(c) Number of shares sold
(b) Shares bought after Bonus Issue
(a) Shares bought before Bonus Issue
Weighted average cost of acquisition per share
Acquisition as a percentage of paid up equity capital as at the end of the previous financial year,
After Bonus Issue
Before Bonus Issue
(ii) through secondary acquisition
(i) through primary issuance
(b) Number of shares acquired during the year :
(a) Number of shares held at the beginning of the year;
2 Any other contribution made to the Trust during the year
security or guarantee
Amount of loan, if any, taken from any other source for which company / any company in the group has provided any
Amount of loan outstanding (repayable to company / any company in the group) as at the end of the year
Amount of loan disbursed by company / any company in the group, during the year
Details of the Trustee(s)
Name of the Trust
Details - FY16
223.98
4,087,782
-
656,278
3,431,504
1,715,752
700,900
727,400
1,011,411
1,431,741
4,087,782
Vesting of STAR Scheme III
700,900
727,400
409.68
0.21%
656,278
1,011,411
-
-
-
1,431,741
NIL
665,580,410
545,000,000
IDBI Trusteeship Services Limited
Welfare of Mariconian Trust
1 The following details, inter alia, in connection with transactions made by the Trust meant for the purpose of administering the schemes under the regulations are to be disclosed:
Details related to Trust
102
B
ANNEXURE ‘D’ TO THE BOARD’S REPORT
Disclosures under section 62(1)(b) of the Companies Act, 2013 read with Rule 12 (a) of the Companies (Share Capital
and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits) Regulations, 2014
ANNEXURE ‘E’ TO THE BOARD’S REPORT
103
Conservation of Energy
1.
Baddi
Steps taken/impact on conservation of energy and the
steps taken for utilising alternate sources of energy;
The Company undertook several initiatives in power and
fuel consumption reduction at its Baddi plant. These
initiatives resulted in savings of 45,034 units & 460 MT of
fuel corresponding to reduction in carbon footprint by 37
MT of CO2 last year.
Details of Initiatives are as below:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Elimination of unnecessary operating of Caustic Pump
Flash steam recovery from old boiler De-aerator
•
Following are the initiatives taken in 2016-17 as energy
saving projects:
1.
Auto cut-off of vacuum assembly at desired vacuum.
4.
5.
6.
7.
Kanjikode Plant has achieved consistent improvement in
specific fuel consumption by 0.33 Ltrs/MT in FY 16-17.
This led to overall savings of 7.5 KL of fuel. Specific power
consumption reduction through Power Task Force has
resulted in overall savings of 46,800 Units in FY 16-17.
Cooling and chilling automation in De-waxing
Flash Steam recovery from Dewaxing
Condensate Recovery from plant
Separator Seal Cooling Water and elimination of hot
water overflow
Close De-aerator tank vent
Elimination of Leakage water from DM tank
Gums line modification below S-1 to have smooth flow
of Gums Elimination of water addition.
Traps replacement Main steam line Near Blow down
•
Anion back wash water usage in wet scrubber
•
Enclosed condensate return tank
Softener discharge water to be used for ETP Chemicals
mixing
Compare to a motor driven conveying system: 91 Metric
ton of CO2 equivalent
Compare to lift driven conveying system : 45.4 Metric
ton of CO2 equivalent
DM water transfer pump changed from 2hp to 0.75 hp
savings of around 27,000 per year.
Looping of chiller circulation pump with chiller
compressor to prevent unnecessary run at idle time.
Manual cleaning replaced with Cleaning Gun saving
both water and electricity.
ETP submersible pump 5hp replaced with overhead
centrifugal pump of 3hp.
Street lights in plant replacing with CFL Lights for energy
savings
20TR chiller replacing with 5TR chiller.
Kanjikode
Stoppage of Raw water usage for Gardening
For transfer of finished goods from First floor and second
floor to Ground floor. The system is using gravity for
the material movement. There is a potential saving in
Greenhouse gas emission of
•
Paonta Sahib
3.
Spiral Conveying system-
Avoided start stop operation in screw compressor by
providing a VFD system in the screw compressor. The VFD
will vary the screw rpm based on load requirement. This will
give savings in the power taken by motor. The total savings
in Greenhouse gas emission is 35.1 Metric ton of CO 2
equivalent.
Guwahati
•
Deo down time reduction
VFD installed in screw compressors
We had used the interior lights and street lights in LED fittings
instead of CFL fittings. The potential savings in Greenhouse
gas emission is : 40.1 Metric ton of CO2 equivalent
2.
•
Dewaxing tray heating modification for reducing losses
LED lights instead of CFL fittings inside the buildings
Heat Loss Reduction in DOT tank
Details of Initiatives are as below:
•
Compressor Shifting in Open Area
In addition, to the above various water conservation
initiatives undertaken which resulted in saving of more than
70KL of water per day.
Heat Loss Reduction in wax tank
Various Initiatives taken in Kanjikode have led to reduction
in overall CO2 emissions by 64 MT.
Fitch Catalyst has been fixed in FO line to reduce
Specific fuel consumption. This has resulted in a
Savings of 0.33 Ltr / MT.
Power Consumption profile study has been conducted
in Oil Mill equipment and identified the opportunities to
de-rate the motor capacity as follows :
o
o
o
•
One of the Expeller Motor Capacity reduced from
50 to 40 HP.
Conditioner Motor Capacity reduced from 20 to
12.5 HP.
Blower motor reduced from 10 to 7.5 HP.
Implementation of the above drive motor changes in the
Oil Mill has resulted in SPC reduction of 46,800 Units /
Annum.
Statutory Reports
A.
ANNEXURE ‘E’ TO THE BOARD’S REPORT
104
Pondicherry
Pondicherry Energy Conservation Initiatives have resulted
in a reduction of 83,134 Units/Year equivalent to 94.85 MT
of CO2 emissions through following initiatives:
•
•
•
•
•
•
•
•
VFD replacement for Compressor, Cooling water pump,
Cooker, ID Fan and FD Fan.
Replacement of Lower Efficiency Motor with Higher
Efficiency (IE3) Motors in Compressor, Expeller
329A,B,D and Cooker-A. For Fuel Consumption reduction:
•
B. Technology Absorption
•
1.
Reduction of Operating hours of Magnetic drum motor
and Cake Conveyor.
Motor size optimisation for Cooling water pump and
WTP pump.
LED/CFL Lights replaced from conventional lights
in Lab, Farm Tank shed and DG Room Locations.
Air conditioners: Replacement of Conventional AC Into
Variable Refrigerant Flow AC and Installation of 8 nos
Eco Plug Sensors in Air conditioners to conserve energy
Increasing the number of beaters in grinder for
achieving particle size of 95% from 90% resulting in
Briquette savings of 48 MT/Annum
Capital investment on energy conservation equipments
during the year was R15.5 Lacs. Perundurai
Perundurai Energy Conservation Initiatives have resulted in
a reduction of 10,044 Units/Year, 24 KL HSD savings and
utilisation of 100% Green Power. This has resulted in 1,710
MT of CO2 emissions reduction
Following are the Energy Conservation initiatives
implemented:
•
Conversion of Electricity Source from Thermal to 100%
Wind power:
o
o
Reduction in Diesel Consumption from 33KL to
7KL in FY 16-17.
Total Cost Savings of R16 Lacs /Annum.
•
Air Conservation in PLF Operation.
•
Increased the Feed Water Temperature in Boiler.
•
Variable Frequency Drive Installation for Cooker Blower.
Jalgaon
The Company undertook the following initiatives at its
Jalgaon plant to reduce carbon footprint. These initiatives
enabled a saving of 1,02,528 units & 1,163 MT of agri fuel
last year equivalent to 115.85 MT of CO2 emissions.
For Power Consumption reduction:
•
•
Improvement in soft oil productivity in refinery.
•
Replacement with LED lights in the plant.
•
Implementation of variable frequency drive in boiler area.
Modification with reduced bends for cooling tower line
to reduce load on the motors.
Replacement of Thermic Fluid Heater with high efficient
one.
Improving heat regeneration with additional shell and
tube heat exchanger in refinery
Delivering products to serve “Jobs” in consumer life!
Marico Research and Development has been following
a new approach of creating innovations through a
Jobs roadmap. We have been looking at innovations
not through the products, but what are the underlying
jobs consumers want to get done. By combining
deep understanding of consumer needs, attitudes
and behaviours with data on the market landscape,
the job roadmap enabled us to arrive at insights and
solutions that are original and profitable. The jobs were
decoded into perceivable benefits the products need
to deliver during their regular use. We have created
the consumer sensory maps around these categories
to enable us to know which are unmet and under-met
needs. The way we have holistic understanding of the
benefits of hair oiling likewise we have created insightful
understanding in the male grooming category. Our
expertise in science enabled us to quickly resolve the
pain points for consumer which ultimately became
the product opportunities. The food habits in India
have a difficult paradigm to solve “health with taste”.
With the successful launch of Masala Oats, we have
realised the need to understand the diverse taste
nuances existing in India every 100 kms. The formats
were developed to satisfy the “Jobs” in healthy food
consumptions. The jobs at functional level in foods
were served by addressing and controlling various
biochemical pathways based on nutritional approach.
The culmination of the roadmap was delivered through
intensive consumer studies and rigorous clinical trials
in consumers.
We measure our success in the market through the
strong equity of our brands in consumer mind and the
equity is reinforced through the pipeline of products
created by a capable team comprising of 92 members:
PhD –
Masters –
Scientists –
2.
9
30
Total 39
Research and Development (R&D)
Specific areas in which R & D was carried out by your
Company:
R&D efforts were directed towards core areas of
nourishing formats such as Hair Oils, Leave-In
formats, Male Grooming formats, deodorants,
premium edible oils, Oats & Packaging innovations
across the global markets. The major change in the
approach in New Product Development was to employ
ANNEXURE ‘E’ TO THE BOARD’S REPORT
105
3.
In design thinking approach across the product
development works in four steps, Observations,
Empathy, Insights, and Cultural Elements. The
products were based on strong consumer insights
which were unique and relevant. The emphasis in
nourishment portfolio was on to create new hair oils
with strong hair care benefits with global application.
Many process optimisation efforts have created good
savings in energy intensive Ayurvedic formulations.
The Bottom of the Pyramid formulations were created
to offer stronger benefits for loose hair oil users. R &
D team was quick enough to understand the unmet
as well as emerging needs of Male segment and
develop unique products through deeper consumer
interactions. Special attention was given to the
perfume creation in Deo category. Efforts of the
Consumer Technical insights group were targeted
towards generating insights of product usage and
attitudes across geographies and tailoring the
product sensory accordingly. The packaging efforts
were focussed on creating unique differentiated
packaging for premium hair care and male grooming,
as well as creating sustainable packaging through
reduction of polymer usage. In foods, considerable
efforts were directed towards creating new flavours.
Work on premium edible oils and new technologies
for applications of edible oils for lifestyle diseases
were continued. Quality Assurance department
made a major change in approach in creating
consumer quality standards than conventionally
used “Manufacturing quality”. The approach uses a
consumer lens in ensuring the quality.
Benefits derived as the result of the above efforts
o
Launch of new products – Value added mustard
oil and coconut oil, Male grooming formats,
Multigrain flakes, blend oil Olive and Flaxseed oil,
new shampoo range in Vietnam
o
o
o
Future Plan of Action
4.
Understanding of Hair Biology to create new
actives for hair problems
Strong claim support for new products based on
robust clinical
5.
6.
7.
platforms in the area of hair & skin nourishment and
grooming. Efforts will also be made to harmonize
products across geographies, design new products
for specific lead geographies and re-apply the same
to similar target segments in different regions. Special
efforts will be targeted in improving measurement
science, process engineering and innovation capability
development.
Technology absorption, adaptation and innovation
Efforts, in brief, made towards technology absorption,
adaptation and innovation and benefits derived as a
result of the same:
New technologies sourced from vendors, partners,
universities were worked upon to adapt them to Marico
business needs. The techniques of Problem solving
tools like FMEA, TRIZ, DOE were used to create unique
solutions for the problems. The help of Contract
Research Organisation was sought to help in designing
and conducting clinical. A few university experts were
consulted on regular basis in developing in depth basic
knowledge and stronger claims. Special efforts were
undertaken to leverage digital technology for proving
the efficacy of products to consumers at point of sale
and also during usage.
The Company has not imported any technology during
last three years reckoned from the beginning of the
financial year.
The expenditure incurred on Research and
Development:
Particulars
2017
₹ in Crore
2016
₹ in Crore
2.69
2.44
(a) Capital
(b) Recurring
29.85
25.05
Total
32.55
27.48
0.67
0.56
As a % of revenues
C.
The expenditure above includes a capital expenditure of
R0.59 Crore (LY R 0.05 Crore) and a revenue expenditure
of R 6.70 Crore (LY R6.93 Crore) towards the edible oils
and foods business of Your Company.
Foreign Exchange Earnings and Outgo
The details of Foreign exchange earnings and outgo during
the period under review is as under:
Particulars
As at March 31,
2017
₹ in Crore
2016
₹ in Crore
Foreign Exchange earned
419.03
293.28
Foreign Exchange used
239.90
246.31
Infusion of Digital in R & D work programs in
Diagnostic and Simulations
R&D will continue to focus on generating in-depth
consumer insights, develop strong technology
As at March 31,
Statutory Reports
Design Thinking which has resulted in products which
create value in consumer life through appealing
sensory, effective functionality and best benefit/price
ratio. The processes used in the manufacturing place
were environmentally friendly and least polluting.
Efforts to understand consumers in international
geographies and align systems and processes across
the business continued.
ANNEXURE ‘F’ TO THE BOARD’S REPORT
106
FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN
As on financial year ended March 31, 2017
Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies
(Management & Administration) Rules, 2014.
I.
REGISTRATION & OTHER DETAILS:
i
CIN
ii
L15140MH1988PLC049208
Registration Date
October 13, 1988
iii Name of the Company
Marico Limited
iv Category/Sub-category of the Company
v Address of the Registered office & contact details
vi Whether listed company
vii Details of the Stock Exchanges where shares are listed
II.
Public Company / Limited by Shares
7th Floor, Grande Palladium, 175, CST Road, Kalina,
Santacruz (East), Mumbai – 400 098, Maharashtra.
Tel: (+91-22) 6648 0480
Fax: (+91-22) 2650 0159
Website: www.marico.com
E-mail address: investor@marico.com
Yes
BSE Limited (BSE) : 531642
The National Stock Exchange of India Limited (NSE): MARICO
viii Name, Address & contact details of the Registrar & Transfer Link Intime India Private Limited
Agent, if any.
C 101, 247 Park, LBS Marg, Vikhroli West, Mumbai 400 083
Tel: (+91-22) 49186000
Fax: (+91-22) 49186060
Website: www.linkintime.co.in
E-mail address: rnt.helpdesk@linkintime.co.in
PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10% or more of the total turnover of the company
Sl.
No.
1
2
Name & Description of main products/
services
Edible Oils
Value Added Hair Oils
NIC Code of the Product /service
% to total turnover of the company
10402
58%
20236
30%
ANNEXURE ‘F’ TO THE BOARD’S REPORT
107
Sl.
No.
1
2
3
4
5
PARTICULARS OF HOLDING , SUBSIDIARY AND ASSOCIATE COMPANIES
Name & Address of the Company
CIN/GLN
Holding/
Subsidiary/
Associate
Company
% of
Applicable
Shares Held
Section
Marico Bangladesh Limited (“MBL”)
NA
Subsidiary
90%
2(87)(ii)
Marico Middle East FZE (“MME”)
NA
Subsidiary
100%
2(87)(ii)
Marico South Africa Consumer Care (Pty) Limited (“MSACC”)
NA
Subsidiary
100%
2(87)(ii)
NA
Subsidiary
100% through
2(87)(ii)(a)
NA
Subsidiary
100%
2(87)(ii)
U24233MH2012PLC229972
Subsidiary
100%
2(87)(ii)
U24240MH2011PTC239427
Subsidiary
–
–
U93090MH2009NPL193455
Subsidiary
Section 8
2(87)(i)
House-1, Road-1, Sector-1, Uttara, Dhaka-1230
Office No. LOB 15326, Jebel Ali, Dubai, UAE
Units 1-5, Site 2 East, Riverside Business Park, 74 Prince
Umhlangane Road, Avoca, Durban 4051
Marico South Africa (Pty) Limited (“MSA”)
Units 1-5, Site 2 East, Riverside Business Park, 74 Prince
Umhlangane Road, Avoca, Durban 4051
Marico South East Asia Corporation (Formerly know as
International Consumer Products Corporation) (“Marico SEA”)
MSACC
28th floor, Pearl Plaza, 561 Dien Bien Phu, Binh Thanh District,
6
7
HO CHI MINH City, Vietnam
Marico Consumer Care Limited (“MCCL”)
7th Floor, Grande Palladium, 175, CST Road, Kalina,
Santacruz (East), Mumbai - 400 098
Halite Personal Care India Private Limited
(A Company under Voluntary Liquidation) 7th Floor, Grande
Palladium, 175, CST Road, Kalina, Santacruz (East),
8
Mumbai - 400 098
Marico Innovation Foundation (“MIF”)
7th Floor, Grande Palladium, 175, CST Road,
Kalina, Santacruz (East), Mumbai - 400 098
9
Guarantee
Company without
Share Capital
MBL Industries Limited (“MBLIL”)
NA
Subsidiary
100% through
2(87)(ii)(a)
10 MEL Consumer Care S.A.E. (“MELCC”)
NA
Subsidiary
100% through
2(87)(ii)(a)
NA
Subsidiary
100% through
2(87)(ii)(a)
NA
Subsidiary
100% through
2(87)(ii)(a)
NA
Subsidiary
100% through
2(87)(ii)(a)
NA
Subsidiary
99.99% through
2(87)(ii)(a)
House-1, Road-1, Sector-1, Uttara, Dhaka-1230, Bangladesh
Building 3, Section 1141, 34, IBAD Elrahman Street,
Masaken Sheraton, Nozha District-Cairo-Egypt
11 Marico Egypt For Industries S.A.E. (“MEIC”)
Building 3, Section 1141, 34, IBAD Elrahman Street,
Masaken Sheraton, Nozha District-Cairo-Egypt
12 Egyptian American Investment and Industrial Development
Company S.A.E (“EAIIDC”)
Building 3, Section 1141, 34, IBAD Elrahman Street,
Masaken Sheraton, Nozha District-Cairo-Egypt
13 Marico Malaysia Sdn. Bhd. (“MMSB”)
Ground Floor, Lot 7, Block F, Saguking Commercial Building,
Jalan Patau 87000, Labuan F.T. Malaysia
14 Thuan Phat Foodstuff Joint Stock Company (“TPF”)*
39B Truong Son Street, Ward 4, Tan Binh District,
Ho Chi Minh City, Vietnam.
MME
MME
MELCC
MME
MME
Marico SEA
Statutory Reports
III.
ANNEXURE ‘F’ TO THE BOARD’S REPORT
108
Sl.
Name & Address of the Company
No.
CIN/GLN
Holding/
% of
Applicable
Associate
45%
2(6)
Associate
35%
2(6)
Subsidiary/
Associate
15 Bellezimo Professionale Products Private Limited
Eucharistic Congress Buliding No. 2, 3rd floor, 5 Convent Street,
U24110MH2015PTC265935
Shares Held
Company
Section
Near Electric house, Colaba, Mumbai -400 001,
Maharashtra, India
16 Zed Lifestyle Private Limited ("Zed")**
U74999GJ2016PTC091839
Office 04, T.F. 32, Swastik Society,
Om Complex Opp. Bhagwati Chambers,
C. G. Road, Navrangpura, Ahmedabad - 380009, Gujarat, India
*
** TPF - was a step down subsidiary of Marico Limited upto November 30, 2016. Thereafter, TPF got merged into its holding Company
Marico SEA w.e.f. December 1, 2016.
Zed - became an associate company of Marico Limited w.e.f. March 17, 2017 pursuant to acquisition of 35.44% of total equity
share capital of ZED by Marico Limited.
IV. SHAREHOLDING PATTERN (Equity Share capital Break up as % to total Equity)
(i) Categorywise Shareholding
Category of Shareholders
No. of Shares held at the beginning
No. of Shares held at the end
of the year (As on 01.04.2016)
Demat
Physical
Total
% change
of the year (As on 31.03.2017)
% of Total
Demat
Shares
Physical
Total
during the year
% of Total
Shares
A. Promoters
(1) Indian
a) Individual/HUF
750,411,040
-
750,411,040
58.16
750,600,240
-
750,600,240
58.16
-
-
-
-
-
-
-
-
-
17,644,000
-
17,644,000
1.37
18,297,000
-
18,297,000
1.42
3.70
d) Bank/FI
-
-
-
-
-
-
-
-
-
e) Any other
-
-
-
-
-
-
-
-
-
768,055,040
0.00
768,055,040
59.53
768,897,240
0.00
768,897,240
59.58
0.11
b) Central Govt./ State Govt.
c) Bodies Corporate
SUB TOTAL:(A) (1)
0.03
(2) Foreign
1,800,000
0.00
1,800,000
0.14
1,800,000
0.00
1,800,000
0.14
0.00
b) Other Individuals
a) NRI- Individuals
-
-
-
-
-
-
-
-
-
c) Bodies Corp.
-
-
-
-
-
-
-
-
-
d) Banks/FI
-
-
-
-
-
-
-
-
-
e) Any other
-
-
-
-
-
-
-
-
-
1,800,000
0.00
1,800,000
0.14
1,800,000
0.00
1,800,000
0.14
0.00
769,855,040
0.00
769,855,040
59.67
770,697,240
0.00
770,697,240
59.72
0.11
SUB TOTAL (A) (2)
Total Shareholding of
Promoter
(A)= (A)(1)+(A)(2)
B. PUBLIC SHAREHOLDING
(1) Institutions
a) Mutual Funds
12,443,222
-
12,443,222
0.96
17,721,561
-
17,721,561
1.37
42.42
b) Banks/FI
1,204,137
-
1,204,137
0.09
497,116
-
497,116
0.04
-58.72
c) Central Govt/State Govt.
1,607,516
-
1,607,516
0.12
1,929,720
-
1,929,720
0.15
20.04
-
-
-
-
-
-
-
-
-
27,013,742
-
27,013,742
2.09
33,434,560
-
33,434,560
2.59
23.77
d) Venture Capital Fund
e) Insurance Companies
ANNEXURE ‘F’ TO THE BOARD’S REPORT
109
No. of Shares held at the beginning
Demat
f) FIIs
g) Foreign Venture Capital
Funds
h) Foreign Portfolio Investor
(Corporate)
No. of Shares held at the end
of the year (As on 01.04.2016)
Physical
Total
% change
of the year (As on 31.03.2017)
% of Total
Demat
Shares
199,902,103
10,000
199,912,103
15.50
-
-
-
-
173,884,977
-
173,884,977
13.48
Physical
81,129,891
Total
10,000
291,648,966
during the year
% of Total
Shares
81,139,891
6.29
-59.41
-
-
-
291,648,966
22.60
67.73
i) Others (specify)
-
-
-
-
-
-
-
-
-
SUB TOTAL (B)(1):
416,055,697
10,000
416,065,697
32.25
426,361,814
10,000
426,371,814
33.04
2.48
39,823,660
76,000
39,899,660
3.09
34,296,454
68,000
34,364,454
2.66
-13.87
-
-
-
-
-
-
-
-
-
i) Individual shareholders
holding nominal share capital
upto R1 lakh
38,116,186
1,282,204
39,398,390
3.05
37,491,382
1,295,209
38,786,591
3.01
-1.55
ii) Individuals shareholders
holding nominal share capital in
excess of R 1 lakh
18,115,223
-
18,115,223
1.40
13,562,382
-
13,562,382
1.05
-25.13
1. NRI
3,505,680
-
3,505,680
0.27
3,700,761
-
3,700,761
0.29
5.56
2. Clearing member
1,154,716
-
1,154,716
0.09
1,182,234
-
1,182,234
0.09
2.38
295,554
-
295,554
0.02
154,058
-
154,058
0.01
-47.87
1,881,238
-
1,881,238
0.00
1,651,664
-
1,651,664
0.13
-12.20
(2) Non Institutions
a) Bodies corporates
i) Indian
ii) Foreign
b) Individuals
c) Others (specify)
3. Trusts
4. HUF
SUB TOTAL (B)(2):
102,892,257
1,358,204
104,250,461
8.08
92,038,935
1,363,209
93,402,144
7.24
-10.41
Total Public Shareholding
(B)= (B)(1)+(B)(2)
518,947,954
1,368,204
520,316,158
40.33
518,400,749
1,373,209
519,773,958
40.28
-0.10
-
-
-
-
-
-
-
-
-
1,373,209 1,290,471,198
100
0.02
C. Shares held by Custodian
for GDRs & ADRs
Grand Total (A+B+C)
1,288,802,994
1,368,204 1,290,171,198
100 1,289,097,989
Statutory Reports
Category of Shareholders
ANNEXURE ‘F’ TO THE BOARD’S REPORT
110
(ii) & (iii) Shareholding of Promoters & Changes in Promoters’ shareholding
Sl.
Name
No
Shareholding at the
beginning (01.04.2016)/end
Date
of the year(31.03.2017)
No.of Shares
No. of Shares
(Increase/
Reason
Decrease
No.of
shareholding)
shares of
(For Valentine Family Trust)
2 Harsh Mariwala with Kishore Mariwala
(For Aquarius Family Trust)
3 Harsh Mariwala with Kishore Mariwala
(For Taurus Family Trust)
4 Harsh Mariwala with Kishore Mariwala
(For Gemini Family Trust)
5 Arctic Investment & Trading Company
Private Limited
146,752,000
11.37 1-Apr-16
─
─ 15-Mar-17
─
% of total
Shares
the company
1 Harsh Mariwala with Kishore Mariwala
during the year
(01.04.2016 to 31.03.2017)
in
% of total
Cumulative Shareholding
─
449,500
shares of
the Company
146,752,000
11.37
147,201,500
11.41
─
─ 22-Mar-17
449,500
147,651,000
11.44
─
─ 28-Mar-17
419,200 Inter-se Transfer
148,070,200
11.48
─
─ 29-Mar-17
152,600
148,222,800
11.49
─
─ 30-Mar-17
114,400
148,337,200
11.49
148,337,200
11.49 31-Mar-17
─
─
148,337,200
11.49
146,752,000
11.37 1-Apr-16
─
─
146,752,000
11.37
─
─
17-Mar-17
449,500
147,201,500
11.41
─
─
22-Mar-17
449,500
147,651,000
11.44
─
─
28-Mar-17
419,800 Inter se Transfer
148,070,800
11.48
─
─
29-Mar-17
152,800
148,223,600
11.49
─
─
30-Mar-17
114,600
148,338,200
11.49
148,338,200
11.49 31-Mar-17
─
─
148,338,200
11.49
146,752,000
11.37 1-Apr-16
─
─
146,752,000
11.37
147,201,500
11.41
─
─ 15-Mar-17
449,500
─
─ 22-Mar-17
449,500
147,651,000
11.44
─
─ 28-Mar-17
419,700 Inter se Transfer
148,070,700
11.47
─
─ 29-Mar-17
152,800
148,223,500
11.49
─
─ 30-Mar-17
114,500
148,338,000
11.49
148,338,000
11.49 31-Mar-17
─
─
148,338,000
11.49
146,752,000
11.37 1-Apr-16
─
─
146,752,000
11.37
147,201,500
11.41
─
─ 15-Mar-17
449,500
─
─ 22-Mar-17
449,500
147,651,000
11.44
─
─ 28-Mar-17
419,800 Inter se Transfer
148,070,800
11.47
─
─ 29-Mar-17
152,800
148,223,600
11.49
─
─ 30-Mar-17
114,500
148,338,100
11.49
148,338,100
11.49 31-Mar-17
─
─
148,338,100
11.49
17,570,000
1.36 1-Apr-16
─
─
17,570,000
1.36
─
─ 9-Nov-16
124
17,570,124
1.36
─
─ 11-Nov-16
500,000
─
─ 15-Nov-16
46,410
Purchase
18,070,124
1.40
18,116,534
1.40
─
─ 17-Nov-16
11,466
18,128,000
1.40
─
─ 5-Dec-16
95,000
18,223,000
1.40
─
─ 24-Mar-17
18,223,000
0
0.00
0
0.00
Gratuitous
transfer to The
Bombay Oil
Private Limited
0
0.00 31-Mar-17
─
─
ANNEXURE ‘F’ TO THE BOARD’S REPORT
111
Name
Shareholding at the
beginning (01.04.2016)/end
Date
of the year(31.03.2017)
No.of Shares
No. of Shares
(Increase/
Reason
Decrease
No.of
shareholding)
shares of
Shares
the company
6 The Bombay Oil Private Limited
74,000
─
0.01 1-Apr-16
─ 24-Mar-17
during the year
(01.04.2016 to 31.03.2017)
in
% of total
Cumulative Shareholding
─
18,223,000
─
Gratuitous
transfer
% of total
shares of
the Company
74,000
0.01
18,297,000
1.42
from Arctic
Investment
& Trading
Company Private
Limited
7 Mr. Harsh Mariwala
8 Harshraj C Mariwala (HUF)
9 Mrs. Archana Mariwala
10 Ms. Rajvi Mariwala
11 Mr. Rishabh Mariwala
12 Mrs. Preeti Gautam Shah
13 Mrs. Pallavi Jaikishen
14 Mrs. Malika Chirayu Amin
15 Mr. Kishore Mariwala
18,297,000
1.42 31-Mar-17
─
─
18,297,000
1.42
19,909,200
─
1.54 1-Apr-16
─
─
19,909,200
1.54
─ 6-Dec-16
24,704
19,933,904
1.54
─
─ 7-Dec-16
129,582
20,063,486
1.55
─
─ 8-Dec-16
36,914
20,100,400
1.56
20,100,400
1.56 31-Mar-17
─
─
20,100,400
1.56
12,240,000
0.95 1-Apr-16
─
No Change
12,240,000
0.95
12,240,000
0.95 31-Mar-17
12,240,000
0.95
24,600,000
1.91 1-Apr-16
Purchase
─ during the year
─
─
─
─ 15-Mar-17
899,000
─
─ 28-Mar-17
256,900
23,444,100
1.82 31-Mar-17
─
─
29,200,000
2.26 1-Apr-16
─
─
─
─ 17-Mar-17
449,500
─
─ 28-Mar-17
342,500
28,408,000
2.20 31-Mar-17
─
26,200,000
2.03 1-Apr-16
─
Sale
24,600,000
1.91
23,701,000
1.84
23,444,100
1.82
23,444,100
1.82
29,200,000
2.26
28,750,500
2.23
28,408,000
2.20
─
28,408,000
2.20
─
26,200,000
2.03
25,750,500
2.00
24,976,500
1.94
1.94
Sale
─
─ 15-Mar-17
449,500
─
─ 28-Mar-17
774,000
24,976,500
1.94 31-Mar-17
─
─
24,976,500
1,800,000
0.14 1-Apr-16
─
No Change
0.14
1,800,000
0.14 31-Mar-17
─ during the year
1,800,000
1,800,000
0.14
1,832,000
0.14 1-Apr-16
─
1,832,000
0.14 31-Mar-17
─ during the year
1,800,000
0.14 1-Apr-16
─
1,800,000
0.14 31-Mar-17
2,963,320
0.23 1-Apr-16
─
─ 4-May-16
Sale
No Change
1,832,000
0.14
1,832,000
0.14
─ during the year
1,800,000
0.14
1,800,000
0.14
─
2,963,320
0.23
2,961,320
0.23
Sale
2,656,220
0.21
─
2,656,220
0.21
No Change
─
2,000 Gift of Shares to
Grand Children
─
─ 28-Mar-17
305,100
2,656,220
0.21 31-Mar-17
─
Statutory Reports
Sl.
No
ANNEXURE ‘F’ TO THE BOARD’S REPORT
112
Sl.
No
Name
Shareholding at the
beginning (01.04.2016)/end
Date
of the year(31.03.2017)
No.of Shares
No. of Shares
(Increase/
Reason
Decrease
No.of
shareholding)
shares of
Shares
the company
16 Mrs. Hema Mariwala
17 Mr. Rajen Mariwala
18 Mrs. Anjali Mariwala
7,832,280
20 Mrs. Paula Mariwala
21 Kishore Mariwala for Arnav Trust
22 Kishore Mariwala for Vibhav Trust
23 Kishore Mariwala for Taarika Trust
24 Kishore Mariwala for Anandita Trust
─
─
─ 29-Mar-17
7,679,480
0.60 31-Mar-17
─
6,886,400
0.53 1-Apr-16
─
152,800
─
─ 22-Mar-17
899,000
─
─ 30-Mar-17
454,500
5,532,900
0.43 31-Mar-17
─
7,418,200
0.57 1-Apr-16
─
19 Dr. Ravindra Mariwala
0.61 1-Apr-16
─ 30-Mar-17
during the year
(01.04.2016 to 31.03.2017)
in
% of total
Cumulative Shareholding
─
3,500
% of total
shares of
the Company
─
7,832,280
0.61
Sale
7,679,480
0.60
─
7,679,480
0.60
─
6,886,400
0.53
Sale
─
5,987,400
0.46
5,532,900
0.43
5,532,900
0.43
─
7,418,200
0.57
Sale
7,414,700
0.57
7,414,700
0.57 31-Mar-17
─
─
7,414,700
0.57
15,084,640
1.17 01-Apr-16
─
─
15,084,640
1.17
─
─ 20-Sep-16
2,000
─
─ 22-Mar-17
899,000
─
─ 29-Mar-17
229,100
13,954,540
1.08 31-Mar-17
─
7,418,200
0.57 01-Apr-16
─
─
─ 29-Mar-17
229,100
7,189,100
0.56 31-Mar-17
15,082,640
1.17
14,183,640
1.10
13,954,540
1.08
─
13,954,540
1.08
─
7,418,200
0.57
Sale
7,189,100
0.56
─
─
7,189,100
0.56
─
─
4,700
0.00 1-Apr-16
─
─ 4-May-16
5,200
0.00 31-Mar-17
─
4,700
0.00 1-Apr-16
─
─
─ 4-May-16
5,200
0.00 31-Mar-17
─
4,700
0.00 1-Apr-16
─
─
─ 4-May-16
5,200
0.00 31-Mar-17
─
4,700
0.00 1-Apr-16
─
─
─ 4-May-16
5,200
0.00 31-Mar-17
Gift
Sale
4,700
0.00
5,200
0.00
─
5,200
0.00
─
4,700
0.00
5,200
0.00
─
5,200
0.00
─
4,700
0.00
5,200
0.00
─
5,200
0.00
─
4,700
0.00
5,200
0.00
5,200
0.00
500 Transferred from
Kishore Mariwala
500 Transferred from
Kishore Mariwala
500 Transferred from
Kishore Mariwala
500 Transferred from
Kishore Mariwala
─
─
ANNEXURE ‘F’ TO THE BOARD’S REPORT
113
Sl.
Name
No
Shareholding at the beginning
(01.04.2016)/end of the
Date
year(31.03.2017)
No. of Shares
Reason
(Increase/
Cumulative Shareholding
**
Decrease
during the year
(01.04.2016 to 31.03.2017)
% of total shares
in shareholding)
3.81
─
─
49,132,001
─
─
10,538,977
Purchase
59,670,978
2 ARISAIG PARTNERS (ASIA) PTE LTD. A/C
35,169,950
2.73
3 LIFE INSURANCE CORPORATION OF INDIA
22,690,678
1.76
─
─
─
─
No.of
1 FIRST STATE INVESTMENTS ICVC-
STEWART INVESTORS ASIA PACIFIC
LEADERS FUND
ARISAIG INDIA FUND LIMITED
4 CARTICA CAPITAL LTD
5 PRAZIM TRADING AND INVESTMENT CO.
PVT. LTD.
Shares
49,132,001
─
─
─
6 KUWAIT INVESTMENT AUTHORITY - FUND
9,864,089
7 BARCLAYS MERCHANT BANK (SINGAPORE)
9,849,000
NO. 208
LTD.
─
─
─
of the company
─
558,928
Sale
22,131,750
1.72
─
0.76
─
16,372,395
Purchase
16,372,395
1.27
─
3,066,484
─
Sale
9,864,089
6,797,605
0.69
─
─
─
─
─
9,849,000
0.76
980,627
Purchase
10,371,114
0.80
1,571,449
Purchase
10,326,809
0.80
─
─
767,130
─
900,042
122,807
─
─
─
Sale
─
Purchase
Sale
─
8,755,360
9,986,060
9,218,930
7,255,643
8,155,685
8,032,878
7,902,328
0.68
0.77
0.71
0.56
0.63
0.62
0.61
─
1,480,000
Sale
6,422,328
0.50
─
3,803,980
Sale
5,082,732
0.39
16,172,395
1.25
─
─
─
─
─
─
─
─
─
─
256,056
Purchase
200,000
Purchase
16,372,395
─
Sale
8,886,712
0.69
5,338,788
0.41
16,372,395
1.27
16,172,395
0
•
Paid up Share Capital of the Company (Face Value Re. 1.00) at the end of the financial year 2016-17 was 129,04,71,198 Shares.
•
The details of holding has been clubbed based on PAN.
•
0.76
0.53
0.73
8,886,712
•
1.93
9,390,487
12 ABU DHABI INVESTMENT AUTHORITY -
Notes:
2.18
24,903,037
Sale
0.61
COMPANY PRIVATE LIMITED
28,135,950
Purchase
458,513
7,902,328
13 HASHAM INVESTMENT AND TRADING
Purchase
─
11 MATTHEWS INDIA FUND
MONSOON
6,004,200
24,903,037
0.90
─
─
1.76
11,580,725
─
INTERNATIONAL EQUITY INDE X FUND
─
22,690,678
Purchase
0.56
INDEX FUND, ASERIES OF VANGUARD
─
4,783,120
7,255,643
CONSUMER FUND (SINGAPORE) PTE. LTD.
─
─
0.76
0.77
10 VANGUARD EMERGING MARKETS STOCK
2.73
2.22
9,986,060
─
4.62
28,647,339
9 ARISAIG PARTNERS (ASIA) PTE LTD. A/C
ARISAIG GLOBAL EMERGING MARKETS
3.81
Sale
8,755,360
─
35,169,950
of the Company
6,522,611
8 FRANKLIN TEMPLETON MUTUAL FUND A/C
FRANKLIN INDIA PRIMA PLUS
─
% of total shares
─
During the
─ financial year
0.68
─
─
No.of
Shares
1.25
0
% of total shares of the Company is based on the paid up capital of the Company at the end of the financial year 2016-17.
The above information is based on the weekly beneficiary positions received from Depositories. The date wise increase/decrease in shareholding
of the top ten shareholders is available on the website of the Company.
Statutory Reports
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and holders of GDRs & ADRs)
ANNEXURE ‘F’ TO THE BOARD’S REPORT
114
(v)
Shareholding of Directors and Key Managerial Personnel
Sl.
Name
No
Shareholding at the beginning
Date
(01.04.2016)/end of the
No. of Shares
year(31.03.2017)
Decrease
1 Mr. Harsh Mariwala
(Non Executive Director & Chairman)
of the company
19,909,200
─
─
─
2 Mr. Rajen Mariwala
(Non-Executive Director)
Mr. Atul Choksey*
(Independent Director)
4 Atul Choksey (HUF)
7 Mr. Nikhil Khattau
(Independent Director)
8 Mr. Rajeev Bakshi
(Independent Director)
─
7-Dec-16
36,914
─
─
22-Mar-17
899,000
5,532,900
0.43
31-Mar-17
─
21,736
0.00
─
─
-
─
0.53
─
-
─
No.of
─
129,582
8-Dec-16
─
1-Apr-16
─
30-Mar-17
454,500
-
─
─
Sale
─
- Nil Holding
1-Apr-16
─
2-Jun-16
7,300
17-Nov-16
─
Inter Se
28,826 Purchase
57,862
0.00
─
─
2-Jun-16
7,300
Inter Se
─
2-Jun-16
3,650
Gift
14,600
0.00
─
0
0.00
─
─
─
1-Apr-16
─
2-Jun-16
31-Mar-17
3,650
─
% of total shares
─
of the Company
19,909,200
19,933,904
20,063,486
1.54
1.54
1.55
20,100,400
1.56
6,886,400
0.53
5,532,900
0.43
20,100,400
5,987,400
5,532,900
-
1.56
0.46
0.43
-
21,736
0.00
57,862
0.00
29,036
57,862
0.00
0.00
─
14,600
0.00
Gift
3,650
0.00
─
7,300
0
0
0.00
0.00
0.00
─
─ Nil Holding
─
─
─
─ Nil Holding
─
─
─
─
─
─ Nil Holding
─
─
─
─
─
─ Nil Holding
─
─
* Ceased as an Independent Director of the Company w.e.f. April 1, 2017.
─
31-Mar-17
during the year
Shares
24,704 Purchase
31-Mar-17
─
6 Ms. Hema Ravichandar
(Independent Director)
─
─
1-Apr-16
6-Dec-16
1.56
6,886,400
─
5 Mr. B. S. Nagesh
(Independent Director)
─
20,100,400
─
3 Mr. Anand Kripalu
(Independent Director)
1.54
Cumulative Shareholding
(01.04.2016 to 31.03.2017)
in shareholding)
No.of Shares % of total shares
Directors
Reason
(Increase/
─
ANNEXURE ‘F’ TO THE BOARD’S REPORT
115
Name
Shareholding at the beginning
(01.04.2016)/end of the
Date
No. of Shares
year(31.03.2017)
in
17,400
0.00
─
─
29-Dec-16
0.02
31-Mar-17
─
─
─
2 Mr. Surender Sharma
(Company Secretary & Compliance
Officer)
3 Mr. Vivek Karve
(Chief Financial Officer)
V. INDEBTEDNESS
317,400
─
2
0.00
2
0.00
139,900
0.01
49,900
0.00
─
─
during the year
(01.04.2016 to 31.03.2017)
No.of
shareholding)
of the company
1 Mr. Saugata Gupta
(Managing Director & Chief Executive
Officer)
Cumulative Shareholding
Decrease
No.of Shares % of total shares
Key Managerial Personnel
Reason
(Increase/
1-Apr-16
─
21-Nov-16
─
100,000 Equity Shares acquired
100,000 pursuant to exercise of
stock options vested
100,000 under Marico Employee
Stock Option Scheme,
2014
29-Mar-17
─
1-Apr-16
─
31-Mar-17
─
1-Apr-16
─
90,000
31-Mar-17
─
Company
17,400
0.00
217,400
0.02
0.01
317,400
0.02
317,400
0.02
2
0.00
─
139,900
0.01
─
49,900
0.00
2
year
Sale
0.00
49,900
0.00
Indebtedness of the Company including interest outstanding/accrued but not due for payment
Secured Loans
Unsecured
excluding
Indebtness at the beginning of the financial year ( As on 01.04.2016)
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
Total (i+ii+iii)
Change in Indebtedness during the financial year
Additions (Principal)
deposits
20,470.44
-
75.40
20,545.84
16,200.00
26,216.63
Net Change
-9,635.64
Adjustment ( Exchange Rate difference )
Indebtedness at the end of the financial year(As on 31.03.2017)
i) Principal Amount
ii) Interest due but not paid
iii) Interest accrued but not due
(R in Lacs)
Deposits
Loans
Reduction (Principal)
Total (i+ii+iii)
shares of the
117,400
No Change during the
─
27-Mar-17
% of total
Shares
-
-
-
-
-
Total
Indebtedness
-
20,470.44
-
75.40
-
-
-
-
20,545.84
16,200.00
-
26,216.63
380.99
-
-
-9,635.64
10,834.80
-
-
10,834.80
-
21.48
-
21.48
10,856.27
-
-
-
-
-
380.99
-
10,856.27
Statutory Reports
Sl.
No
ANNEXURE ‘F’ TO THE BOARD’S REPORT
116
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole time director and/or Manager:
Sl.No
1
Particulars of Remuneration
Name of the Managing
Director - Mr. Saugata Gupta
(R In Lacs)
Gross salary
(a) Salary as per provisions contained in Section 17(1) of the Income Tax, 1961.
867.00
(b) Value of perquisites u/s 17(2) of the Income tax Act, 1961
2
3
4
5
15.96
(c ) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961
-
Stock option$
772.18
Sweat Equity
-
Commission
-
- as % of profit
-
Others, Please specify*
-
Total (A)
1655.14
Ceiling as per the Act**
$ Perquisite value of Stock Options exercised during the financial year 2016-17 under the Marico Employee Stock Option
Scheme, 2014.
* Company’s contribution to Provident Fund amounting to R18,58,512 has not been included in the remuneration stated
above.
** Remuneration paid to the Managing Director is within the ceiling provided under Section 197 of the Companies Act, 2013.
B. Remuneration to other directors:
Sl.No
Particulars of Remuneration
1
Independent Directors
(a) Fee for attending Board /
Committee Meetings
(b) Commission
Name of other Directors
Mr. Atul
Total (1)
Other Non Executive Directors
(a) Fee for attending Board /
Committee Meetings
(b) Commission
Ms. Hema
Kripalu
Ravichandar
Total
Mr. Rajeev
Mr. Nikhil
Bakshi
Mr. B. S.
Khattau
Nagesh
2.00
3.30
5.90
3.90
5.00
5.90
26.00
23.50
22.00
23.50
22.00
23.50
22.00
136.50
-
-
-
-
-
-
-
25.30
29.40
25.90
28.50
27.90
162.50
25.50
Mr. Harsh
Mariwala
Mr. Rajen
Mariwala
2.20
4.50
6.70
550.00
22.00
572.00
-
-
-
552.20
26.50
578.70
(c ) Others, please specify
Total B(1+2)
741.20
Total Managerial Remuneration
2,396.34
(Total A+B)
Overall Ceiling as per the Act
Mr. Anand
Choksey*
(c) Others, please specify
2
(R in Lacs)
R12,743.55 lacs (being 11% of Net Profits of the Company calculated as per Section 198 of the Companies
Act, 2013)
ANNEXURE ‘F’ TO THE BOARD’S REPORT
117
Statutory Reports
C. Remuneration To Key Managerial Personnel Other than Managing Director /Manager/Whole Time Director
Sl.No
1
Particulars of Remuneration
Key Managerial Personnel
Mr. Vivek Karve Chief Financial Officer
Mr. Surender Sharma Head Legal - International
Business & Company
Secretary
(R In Lacs)
(R In Lacs)
Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961.
242.47
115.56
0.32
0.32
(c) Profits in lieu of salary under section 17(3) of the Income Tax Act, 1961
-
-
2
Stock Option*
-
-
3
Sweat Equity
-
-
4
Commission
-
-
- as % of profit
-
-
(b) Value of perquisites u/s 17(2) of the Income tax Act, 1961
5
Others, Please specify
Total
-
-
242.79
115.88
*Perquisite value of the equity stock options exercised during the year.
VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES
Type
Section of the
Companies Act
Brief Description
Details of Penalty/
Punishment/
Compounding fees
imposed
Authority (RD/NCLT/
Court)
Appeal made if any
(give details)
Penalty
-
-
-
-
-
Compounding
-
-
-
-
-
A. COMPANY
Punishment
B. DIRECTORS
-
-
-
-
Penalty
-
-
-
-
-
Compounding
-
-
-
-
-
Punishment
C. OTHER OFFICERS IN
DEFAULT
-
-
-
-
-
Penalty
-
-
-
-
-
Compounding
-
-
-
-
-
Punishment
-
-
-
-
-
-
There were no penalties/punishment/compounding of offences for violation of the provisions of the Companies Act, 2013 against
the Company or its Directors or other officers in default during the year.
CORPORATE GOVERNANCE REPORT
118
This report on Corporate Governance is divided into the following
parts:
I.
Philosophy on Code of Corporate Governance
III.
Audit Committee
II.
IV.
V.
VI.
Board of Directors (“the Board”)
Corporate Governance Committee (“CGC”) (acting as
Nomination & Remuneration Committee)
Stakeholders’ Relationship Committee
Corporate Social Responsibility Committee
VII. Risk Management Committee
the framework of Corporate Governance for India Inc.
For Marico, however, Corporate Governance has always
been a cornerstone of the entire management process,
the emphasis being on professional management, with
a decision making model based on decentralization,
empowerment and meritocracy. Marico’s Board believes that
a robust framework and flawless implementation of highest
standards of Corporate Governance provides a sustainable
competitive advantage to a firm. Together, the Management
and the Board ensure that Marico remains a Company of
uncompromised integrity and excellence. Marico’s Board
has adopted a vision to be the ‘best in class organization’
surpassing the expectations of all stakeholders.
VIII. Other Committees
X. •
•
Marico’s Risk Management processes therefore envisage
that all significant activities are analysed across the value
chain keeping in mind the following types of risks:
IX.
General Body Meetings
Material Related Party Transactions
Risk assessment and risk mitigation framework
Marico believes that:
XI. Weblink
XII. Means of Communication
XIII. General Shareholder Information
I.
PHILOSOPHY ON CODE OF CORPORATE GOVERNANCE
Basic Philosophy
Corporate Governance encompasses laws, procedures,
practices and implicit rules that determine the Management’s
ability to make sound decisions vis-à-vis all its stakeholders
– in particular, its shareholders, creditors, the State and
employees. There is a global consensus on the objective
of Good Corporate Governance: Maximising long-term
shareholder value.
Since shareholders are residual claimants, this objective
follows from a premise that in well-performing capital and
financial markets, whatever maximises shareholder value
must necessarily maximise corporate value and best satisfy
the claims of the creditors, the employees and the State.
A company which is proactively compliant with the law and
which adds value to it through the Corporate Governance
initiatives would also command a higher value in the eyes
of present and prospective shareholders.
Marico therefore believes that Corporate Governance is
not an end in itself but is a catalyst in the process towards
maximization of shareholder value. Therefore, shareholder
value, as an objective, is woven into all aspects of Corporate
Governance – the underlying philosophy, the development
of roles and the creation of structures and continuous
compliance with standard practices.
The 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”) has strengthened
Risks are an integral part of any business environment
and it is essential that we create structures that are
capable of identifying and mitigating the risks in a
continuous and vibrant manner.
Risks are multi-dimensional and therefore have to be
looked at in a holistic manner, straddling both, the
external environment and the internal processes.
•
Business Risks;
•
Governance Risks.
•
Controls Risks and;
This analysis is followed by the relevant functions in your
Company by prioritizing the risks, basis their potential impact
and then tracking and reporting status on the mitigation
plans for periodic management reviews. This is aimed at
ensuring that adequate checks and balances are in place
with reference to each significant risk.
Your Company has constituted a Risk Management
Committee on November 7, 2014 pursuant to the provisions
of the SEBI Regulations which assists the Board in monitoring
and reviewing the risk management plan and implementation
of the risk management framework of the Company. The
terms of reference of the Committee are captured in the
latter part of this report. At defined periodicity, Marico’s
Board also reviews progress on the plans for mitigation of
the top risks that your Company is exposed to.
Your Company has an internal audit system commensurate
with the size of the Company and the nature of its business.
The Audit Committee of the Board has the authority and
responsibility to select, evaluate and where appropriate,
replace the Independent Internal Auditor in accordance
with the law. All possible measures are taken by the Audit
Committee to ensure the objectivity and independence of
the Internal Auditor. The Audit Committee, independent of
119
We believe that this framework ensures a unified and
comprehensive perspective.
Cornerstones of Corporate Governance at Marico
Your Company follows Corporate Governance practices
around the following philosophical cornerstones:
Generative transparency and openness in information
sharing
Marico believes that sharing and explaining all the relevant
information on the Company’s policies and actions to all
those to whom it has responsibilities, with transparency
and openness, generates an ambience which helps all the
stakeholders to take informed decisions about the Company.
This reflects externally in making maximum appropriate
disclosures without jeopardising the Company’s strategic
interests as also internally in the Company’s relationship
with its employees and in the conduct of its business.
The Company announces its financial results each quarter,
usually within a month of the end of the quarter. Apart from
disclosing these in a timely manner to the Stock Exchanges,
the Company also hosts the results on its website together
with a detailed information update and media release
discussing the results. The financial results are published
in leading newspapers. The Company also sends an email
update to the Members who have registered their email
addresses with the Company. Generally, once the quarterly
results are announced, the Company conducts a call with
the analyst community explaining to them the results and
responding to their queries. The transcripts of such calls
are posted on the Company’s website. Marico participates in
analyst and investor conference calls, one-on-one meetings
and investor conferences where analysts and fund managers
get frequent access to the Company’s Senior Management.
A detailed investor presentation is uploaded on the website
and is reviewed periodically which gives details about the
history, current and future potential of the business. Through
these meetings, presentations and information updates the
Company shares its broad strategy and business outlook.
with the investors community. The Company promptly
discloses the details of the conference calls, Investor
meetings and road shows being conducted within the
quarters in and outside the Country to the Stock Exchanges
and update its website with the same simultaneously.
The Board has also adopted a comprehensive Policy for
Determination of Materiality of Event or Information in
accordance with Regulation 30 of the SEBI Regulations and the
Company makes prompt disclosures to the Stock Exchanges
where the shares of the Company are listed regarding material
events/ information so as to keep the Stakeholders apprised
and enable them to make informed decisions.
Your Company continues to use the electronic platform for
sharing the information with the Directors and maintains
a seamless and secured flow of information between
the Management and the Board through MeetX, an iOS
based platform. While being secure, this platform is also
environment friendly.
Constructive separation of Ownership and Management
Marico’s philosophy to have constructive separation of the
Management of the Company from its Owners manifests
itself in the composition of the Board of Directors which
comprises 6 Independent Directors, 3 Non-Executive
Directors (all belonging to the Promoter Group) and 1
Managing Director & Chief Executive Officer as on the date
of this Report. The Independent Directors ensure protection
of interests of all stakeholders of the Company. The Board
includes a Woman Director in line with the provisions of
the Act and Rules made thereunder. The Board does not
consist of representatives of creditors or banks. The Board
composition attempts at maximizing the effectiveness of
both, Ownership and Management by sharpening their
respective accountability.
The participation of the Senior Management Personnel
is ensured at Board and/or Committee meetings so that
the Board/Committees can seek and get explanations as
required from them.
All Directors, Promoters and Designated Persons are
required to comply with Marico Insider Trading Rules, 2015,
which form part of Marico’s Unified Code of Conduct, for
trading in the securities of the Company.
The Company’s Internal, Statutory, Cost and Secretarial
Auditors are not related to any of your Company’s Directors.
Accountability
The Board plays a supervisory role rather than an executive
role. Members of the Board provide constructive critique on
the strategic business plans and operations of the Company.
Mr. Saugata Gupta, Managing Director & Chief Executive
Officer, continues to head the Company’s business and is
responsible for its day to day management and operations
and reports to the Board.
The Audit Committee and the Board of Directors meet at least
once in every quarter to consider inter-alia, the business
performance and other matters of importance. The Audit
Committee also meets once in a quarter, in addition to the
above to have detailed deliberations on matters relating to
Governance, Risk Management, Statutory Compliances,
Internal Controls, Internal Audit, Related Party Transactions
of the Company etc.
Statutory Reports
Management, holds periodic one to one discussions with the
Internal Auditors to review the scope and findings of the audit
and to ensure adequacy of the internal audit system in the
Company. The Audit Committee reviews the internal audit
plan for every year and approves the same in consultation
with the Top Management and the Internal Auditor.
120
Discipline
Marico’s Senior Management is always sensitive to the need
for good Corporate Governance practices. Your Company
places significant emphasis on good Corporate Governance
practices and endeavours to ensure that the same is followed
at all levels across the organisation.
Your Company continues to focus on its core business
of beauty and wellness in the categories of Hair and Skin
Nourishment and male grooming. In its international business
too, it is focussed on growing in the emerging economies
of Asian and African continents. This would result in the
Company building depth in its selected segments and
geographies rather than spreading itself thin.
Your Company has always adopted a conservative policy
with respect to debt and foreign exchange exposure
management. All actions having financial implications are well
thought through. The Company raises funds, which are used
for expansion of business either organically or inorganically.
The Company has also stayed away from entering into exotic
derivative transactions.
During the year under review, pursuant to the provisions
of the SEBI Regulations, the Board, at its meeting held on
August 5, 2016 has adopted Dividend Distribution Policy (“DD
Policy”), which is in line with its dividend philosophy. The DD
Policy of the Company ensures the right balance between the
quantum of dividend paid and amount of profits re-deployed
to find organic and inorganic growth of the Company. The
Company has improved the dividend pay-out ratio over the
last 5 years consistently and would endeavour to maintain
a satisfactory pay-out ratio in future. The link to access the
DD Policy has been given in the Board’s Report.
Responsibility
The Company has put in place various mechanisms
and policies to ensure orderly and smooth functioning
of operations and also defined measures in case of
transgressions by members.
The Company has integrated its internal regulations relating
to these mechanisms, into a Unified Code of Conduct. In
order to ensure that such Code of Conduct reflects the
changing environment, both social and regulatory, given
the increasing size and complexity of the business and the
human resources deployed in them, the CGC reviews the
Unified Code of Conduct periodically.
The Company’s Unified Code of Conduct is applicable to all
members viz: the employees (whether permanent or not),
Members of the Board and Associates (in some cases). The
Unified Code of Conduct prescribes the guiding principles
of conduct of the members to promote ethical conduct in
accordance with the stated values of Marico and also to
meet statutory requirements. The Whistle Blower Policy is
embedded in the Unified Code of Conduct.
The CEO declaration in accordance with Para D of Schedule
V to the SEBI Regulations, to certify the above, has been
appended to this report.
Fairness
All actions taken are arrived at after considering the impact
on the interests of all shareholders including minority
shareholders. All shareholders have equal rights and can
convene general meetings, if they feel the need to do so, in
accordance with the provisions of the Act. Investor Relations
is given due priority. There exists a separate department
for handling this function. Full disclosures are made in
the general meeting for all matters. Notice of the general
meetings are comprehensive and the presentations made at
the meetings are informative. Also, the Board is remunerated
commensurately with the growth in the Company’s profits.
Your Company is an equal opportunity employer and
promotes diversity in its workforce, in terms of skills,
ethnicity, nationalities and gender.
Social Awareness
The Company has an explicit policy emphasising ethical
behaviour. It follows a strict policy of not employing any
minor. The Company believes in gender equality and does
not practise any type of discrimination. All policies are free
of bias and discrimination. Environmental responsibility
is given high importance and measures have been taken
at all locations to ensure that members are educated and
equipped to discharge their responsibilities in ensuring
protection of the environment.
Value-adding Checks & Balances
Marico relies on a robust structure with value adding checks
and balances designed to:
*
prevent misuse of authority;
*
ensure effective management of risks, especially those
relating to statutory compliance.
*
facilitate timely response to change and;
At the same time, the structure provides scope for adequate
executive freedom, so that bureaucracies do not take value
away from the Governance Objective.
Board / Committee Proceedings
The process of the conduct of the Board and Committee
proceedings is explained in detail later in this Report.
Other Significant Practices
Other significant Corporate Governance Practices followed
are listed below:
Checks & Balances
*
All Directors are provided with complete information
relating to the operations and Company finances to
enable them to participate effectively in the Board
121
•
*
•
Administrative Committee approves routine
transactional / operational matters.
*
Each Non-Executive Director brings value through his
or her specialisation.
•
Investment and Borrowing Committee supervises
management of funds.
*
•
Audit Committee covers approval to related party
transactions, review of internal controls and audit
systems, oversight on risk management systems,
financial reporting, compliance issues and vigil
mechanism, appointment and remuneration to
various auditors of the Company and their scope,
Shareholders’ grievances etc.
*
*
*
*
*
*
II.
BOARD OF DIRECTORS
In line with the applicable provisions of the Act and the
SEBI Regulations, your Company’s Board has an optimum
combination of Executive and Non-Executive Directors
with more than half of the Board comprising Independent
Directors.
*
Proceedings of Board are logically segregated and
matters are delegated to Committees as under:
•
•
The CGC approves remuneration of the Directors,
Key Managerial Personnel and their relatives and
Senior Management Personnel. The CGC also
acts as the Compensation Committee for the
purpose of administration and superintendence
of the Marico Employees Stock Option Scheme
2014, the Marico MD CEO ESOP Plan 2014, the
Marico Stock Appreciation Rights Plan 2011 and
the Marico Employee Stock Option Plan, 2016.
The CGC is also entrusted with the responsibility
of evaluating the performance of each Director of
the Board and ensuring Board effectiveness.
Vigil Mechanism and Code of Conduct cases
are discussed and reviewed in detail by the
Audit Committee jointly with the CGC. The Audit
Committee reviews the effectiveness of this
process to ensure that there is an environment
that is conducive to escalation of issues, if any,
in the system.
•
Share Transfer Committee approves transfer
formalities and other share-related procedures.
•
Stakeholders’ Relationship Committee supervises
redressal of stakeholders’ grievances.
•
Securities Issue Committee approves the issue
and allotment of securities and allied matters.
•
Corporate Social Responsibilit y (“C SR”)
Committee recommends, reviews and monitors
the CSR initiatives taken by the Company.
•
Risk Management Committee assists the Board
in monitoring and reviewing the risk management
plan and implementation of the risk management
framework of the Company.
Sustainability Committee steers the sustainability
initiatives of the Company and ensures sufficient
assistance to the Business Responsibility Report
Head from time to time.
Other directorships held by Directors are within the
ceiling limits specified.
Committee Memberships and Chairmanship of
Directors are also within the permissible limits.
Statutory compliance report along with the Compliance
Certificate is placed before the Audit Committee and
Board at every quarterly meeting.
All Directors endeavour to attend all the Board/
Committee meetings as also the General Meetings of
the Company. The Chairpersons of the Audit Committee
and the CGC attend the Annual General Meeting to
address shareholders’ queries, if any.
The Chief Financial Officer, the Chief Human Resources
Officer and the Company Secretary & Compliance
Officer in consultation with the Chairman of the Board/
Committee and the Managing Director & CEO, formalise
the agenda for each of the Board /Committee Meetings.
The Board/Committees, at their discretion, invite
Senior Management Personnel of the Company and/or
external Advisors to any of the meetings of the Board/
Committee.
The Company ensures compliance with Secretarial
Standards issued by the Institute of Company
Secretaries of India in respect of the meetings of the
Board/Committee and Shareholders.
The Company has complied with the provisions of
the SEBI Regulations including the circulars issued
thereunder from time to time.
Your Company actively seeks to adopt best global
practices for an effective functioning of the Board and
believes in having a truly diverse Board whose wisdom and
strength can be leveraged for earning higher returns for its
stakeholders and better corporate governance. Therefore,
Marico’s Board is an ideal mix of knowledge, perspective,
professionalism, divergent thinking and experience. Marico
Board’s uniqueness lies in the fact that the Board balances
several deliverables, achieves sound corporate governance
objectives in a promoter-owned organisation and acts as a
catalyst in creation of stakeholder value.
Statutory Reports
discussions. The Directors are also appraised on a
regular basis by uploading information in the Directors’
Corner in the ‘MeetX’ application, which they can view
on their personalized devices provided by the Company.
122
The composition of the Board along with the details of the
Board meetings and last Annual General Meeting held and
attended during the period April 1, 2016 to March 31, 2017
is as under:
Name of the Director
Mr. Harsh Mariwala
Mr. Saugata Gupta
Mr. Anand Kripalu
Mr. Atul Choksey*
Category
Chairman & NonExecutive Director
Managing Director &
CEO
Independent Director
Independent Director
Mr. Ananth Narayanan** Additional
(Independent) Director
Mr. B. S. Nagesh
Independent Director
Ms. Hema Ravichandar Independent Director
Mr. Nikhil Khattau
Mr. Rajeev Bakshi
Mr. Rajen Mariwala
Independent Director
Independent Director
Non-Executive Director
Mr. Rishabh Mariwala*** Additional (NonExecutive) Director
III.
AUDIT COMMITTEE
The Audit Committee met 8 (Eight) times during the period
April 1, 2016 to March 31, 2017 viz. on April 11, 2016; April
29, 2016; July 11, 2016; August 5, 2016; October 12, 2016;
October 28, 2016; January 11 2017 and February 2, 2017.
The composition of the Committee along with the details of
the meetings held and attended during the aforesaid period
is detailed below:
No. of Board
Meetings
Attendance
at Last
Held Attended AGM held
on August
5, 2016
5
5
Yes
5
5
Yes
5
3
No
-
-
-
5
4
5
4
5
4
5
Yes
Yes
5
Yes
5
No
5
4
-
-
5
No
No
-
*ceased to be an Independent Director of the Company w.e.f. April 1, 2017
**appointed as an Additional (Independent) Director w.e.f. June 26, 2017.
***appointed as an Additional (Non-Executive) Director w.e.f. May 2, 2017.
The Board met 5 (Five) times during the aforesaid period viz: on
April 29, 2016; June 29, 2016; August 5, 2016; October 28, 2016
and February 2, 2017.
Further, the number of Board or Board Committees of which a
Director is a member or chairperson (#) is as under:
Name of the
Director
Category
Mr. Harsh Mariwala Chairman &
Non Executive
Director
Mr. Saugata Gupta
Mr. Anand Kripalu
Managing
Director &
CEO
Mr. Atul Choksey**
Mr. B. S. Nagesh
Ms. Hema
Ravichandar
Mr. Rajen Mariwala
Held
6
Independent
Director
NonExecutive
Director
Attended
1
Nil
1
1
Nil
1
Nil
Nil
7
Mr. Nikhil Khattau
Mr. Rajeev Bakshi
Number
Number of Number of
of Outside
Committee Committees
Directorships Memberships (*) in which
($) held
in other
Chairperson
Companies
(*)
3
1
2
3
2
2
4
3
Nil
2
1
1
Nil
Nil
3
Nil
In line with the provisions of section 177 of the Act and
Regulation 18 of the SEBI Regulations read with Part C of
Schedule II thereto, a four Member Audit Committee of
the Board comprises three Independent Directors and one
Non-Executive Director. All Members of the Committee
are financially literate. The Committee invites the Statutory
Auditor and the Internal Auditor for one-on-one discussion
independent of the Management. Further, the Chief Financial
Officer and Members of the Finance Team associated with
Internal Audit and Governance, Risk & Compliance (GRC)
are present at the Audit Committee meetings for relevant
agenda matters. Members of Senior Management team also
attend the meetings depending on the agenda. The Head
Legal-International Business & Company Secretary acts as
the Secretary to the Committee.
Name of the Director
Nature of
Membership
No. of Committee
Meetings
Held
Attended
Mr. Nikhil Khattau
Independent
Chairman
8
8
Mr. B. S. Nagesh
Independent
Member
8
8
Ms. Hema Ravichandar
Independent
Member
8
8
Non-Executive
Member
8
7
Mr. Rajen Mariwala
There was no change in the composition of the Audit
Committee during the year ended March 31, 2017. The
charter of the Committee, inter-alia, articulates its role,
responsibility and powers as follows:
1.
2.
3.
4.
Nil
# As on March 31, 2017.
$ Excludes directorship in private limited companies, foreign companies
and Section 8 companies.
* Only two committees, namely, Audit Committee and Stakeholders’
Relationship Committee have been considered as per Regulation 26(1)(b)
of the SEBI Regulations.
** ceased to be a Director of the Company w.e.f. April 1, 2017.
Director
Category
Oversight of the Company’s financial reporting
processes and the disclosure of its financial information
to ensure that the financial statement is correct,
sufficient and credible.
Recommendation for appointment, remuneration and
terms of appointment of Auditors of the Company.
Approval of payment to statutory auditors for any other
services rendered by the statutory auditors.
Reviewing, with the Management, the annual financial
statements before submission to the Board for
approval, with particular reference to:
a.
b.
Matters required to be included in the Directors’
Responsibility Statement to be included in the
Board’s Report in terms of section 134(3)(c) of
the Act;
Changes, if any, in accounting policies and
practices and reasons for the same;
123
c.
d.
e.
f.
g.
5.
6.
7.
Major accounting entries involving estimates
b a se d o n t h e exe rc i se o f j u d g m e n t by
Management;
Significant adjustments made in the financial
statements arising out of audit findings;
Compliance with listing and other legal
requirements relating to financial statements;
Disclosure of any related party transactions, if
any;
Modified opinion(s) in the draft audit report;
Reviewing with the Management, the quarterly financial
statements before submission to the Board for
approval.
Reviewing with the Management, the statement of
uses / application of funds raised through an issue
(public issue, rights issue, preferential issue, etc.), the
statement of funds utilized for purposes other than
those stated in the offer document/ prospectus/ notice
and the report submitted by the monitoring agency,
monitoring the utilization of proceeds of a public or
rights issue and making appropriate recommendations
to the Board to take up steps in this matter.
18. Valuation of undertakings or assets of the Company,
wherever it is necessary.
19. Reviewing mandatorily the following information:
a.
b.
c.
d.
e.
a.
Reviewing with the Management, performance of
statutory and internal auditors, adequacy of the internal
control systems.
b.
c. d.
e.
9.
10. Reviewing the adequacy of internal audit function,
if any, including the structure of the internal audit
department, staffing and seniority of the official
heading the department, reporting structure coverage
and frequency of the internal audit.
17. Scrutiny of inter-corporate loans and investments.
16. Approval of all transactions with related parties and any
subsequent modification of such transactions including
omnibus approval for repetitive transactions and for
unforeseen transactions not exceeding Rs 1 Crore.
8.
15. Approval of appointment of Chief Financial Officer
after assessing the qualifications, experience and
background, etc. of the candidate.
Review and monitor the auditor’s independence and
performance and effectiveness of audit process.
Evaluation of internal financial controls and risk
management systems.
11. Discussion with the internal auditors on any significant
findings and follow up thereon.
12. Reviewing the findings of any internal investigations
by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting the
matter to the Board.
13. Discussion with the statutory auditors before the audit
commences, about the nature and scope of audit as
well as post-audit discussion to ascertain any area of
concern.
14. To look into the reasons for substantial defaults
in payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared
dividends) and creditors, if any.
IV.
Management discussion and analysis of financial
condition and results of operations;
Statement of significant related party transactions,
submitted by Management;
Management letters / letters of internal control
weaknesses issued by the statutory auditors;
Internal audit reports relating to internal control
weaknesses; and
The appointment , removal and terms of
remuneration of the internal auditor.
20. Vigil Mechanism:
To ensure establishment of vigil mechanism for
its Directors and employees to report genuine
concerns;
To provide for adequate safeguards against
victimization of persons who use such mechanism
and make provision for direct access to the
Chairman of the Audit Committee in appropriate
or exceptional cases;
To ensure that the existence of vigil mechanism is
appropriately communicated within the Company
and also made available on Company’s website;
To oversee the functioning of vigil mechanism and
decide on the matters reported thereunder; and
To ensure that the interests of a person who uses
such a mechanism are not prejudicially affected
on account of such use.
CORPORATE GOVERNANCE COMMITTEE (“CGC”)
The CGC acts as the Nomination and Remuneration
Committee as per section 178 of the Act and Regulation
19 of the SEBI Regulations read with Part D of Schedule II
thereto. Further, the CGC also acts as the Compensation
Committee under the provisions of the SEBI (Share Based
Employee Benefits), Regulations, 2014. The CGC comprises
of four Members all of whom are Independent Directors. The
Chief Human Resources Officer acts as the Secretary to the
Committee.
Statutory Reports
124
The CGC met 5 (Five) times during the period April 1, 2016
to March 31, 2017 viz: on April 28, 2016; August 5, 2016;
October 28, 2016; February 2, 2017 and March 31, 2017.
The composition of the CGC along with the details of the
meetings held and attended during the aforesaid period is
detailed below:
Name of the Director
Director
Category
Nature of
Membership
No. of Committee
Attended
Ms. Hema Ravichandar Independent Chairperson
5
5
Mr. Anand Kripalu
Independent
Member
5
4
Mr. B. S. Nagesh
Independent
Member
5
5
Mr. Rajeev Bakshi
Independent
Member
5
5
There was no change in the composition of the CGC
during the year ended March 31, 2017. The charter of the
Committee, inter-alia, articulates its responsibilities and
authority as follows:
Formulate criteria for qualifications, positive attributes
and independence of Directors, Key Managerial
Personnel & Senior Management (i.e. top management
team one level below Executive Director including
Functional Heads i.e. presently the members of the
Executive committee);
2.
3.
4.
5.
6.
8.
10. Participate in the review of Vigilance Mechanism
conducted by Audit Committee of the Board;
7.
9.
Meetings
Held
1.
Identify the candidates who are qualified to be
appointed as Director, Key Managerial Personnel and
Senior Management and recommend to the Board their
appointment and removal;
Recommend to the Board a policy relating to the
remuneration of the Director, Key Managerial Personnel
and Senior Management;
Devise a policy on Board diversity;
The NR Policy covers the following aspects:
•
•
•
The NR Policy of the Company can be accessed at
the following link http://marico.com/india/investors/
documentation/corporate-governance
Carry out the evaluation of each Director’s performance;
Decide whether to extend/continue the term of
appointment of Independent Directors on the basis of
their performance evaluation report;
12. Administer Long Term Incentive Schemes such as
Employee Stock Option Plan(s) (including Schemes
notified thereunder) and Stock Appreciation Rights
Pursuant to the requirements of Section 178 of the Act and
corresponding provisions contained in Regulation 17 of the
SEBI Regulations, the CGC at its meeting held on February
21, 2015, approved the policy on Nomination, Removal,
Remuneration and Board Diversity ( hereinafter referred to
as ‘NR Policy’).
•
Devise a succession plan for the Board, Key Managerial
Personnel & Senior Management;
11. Design for Board Retreat and Board Effectiveness; and
POLICY ON NOMINATION, REMOVAL, REMUNERATION
AND BOARD DIVERSITY
Approve the remuneration (including revisions thereto)
of the Director, Key Managerial Personnel and Senior
Management;
Formulate criteria for evaluation of Directors, Board and
its Committees and Chairpersons;
Plan(s) (including Schemes made there under) and such
other employee benefit schemes / plans as the Board
may approve from time to time.
•
•
Appointment and removal of Directors, Key Managerial
Personnel and employees in Senior Management;
Remuneration to the Directors, Key Managerial
Personnel and employees in Senior Management;
Familiarization Programme for Independent Directors;
Succession plan for Directors, Key Managerial
Personnel and employees in Senior Management;
Board Diversity; and
Evaluation of individual Directors, Chairperson of the
Board, the Board as a whole and the Committees of the
Board.
Remuneration to Executive Director
The Company’s Board presently consists of only one
Executive Director viz: Mr. Saugata Gupta, Managing
Director & Chief Executive Officer (“MD & CEO”). The CGC
(comprising Independent Directors) approves annual
revision in remuneration of the MD & CEO within the overall
limit approved by the Members of the Company which is then
placed before the Board for noting.
The annual remuneration to the MD & CEO comprises
two broad terms – Fixed Remuneration and Variable
Remuneration in the form of performance incentive.
The performance incentive is based on the NR Policy of
the Company. Additionally, the MD & CEO is entitled to
employee stock options granted under Employee Stock
Option Scheme(s) and Stock Appreciation Rights granted
under Stock Appreciation Rights Plan of the Company and
Schemes notified thereunder. The MD & CEO is not paid
sitting fees for any of the Board or Committee meetings
attended by him. The details of the stock options granted to
the MD & CEO under various schemes/plans are provided in
the Board’s Report.
Remuneration to Non-Executive Directors
The Non-Executive Directors add substantial value to the
Company through their contribution to the Management of
125
The Company, therefore has a structure for remuneration
to Non-Executive Directors, based on certain financial
parameters like the performance of the Company, its market
capitalization, etc., industry benchmarks, role of the Director
and such other relevant factors. Non-Executive Directors
shall not be entitled to any stock option or stock appreciation
rights of the Company.
At the 27 th Annual General Meeting held on August 5,
2015, the Members approved payment of remuneration
to Non-Executive Directors (in addition to the sitting fees),
in aggregate, not exceeding 3% of the net profits of the
Company calculated in accordance with the provisions of
the Act, with a liberty to the Board of Directors to decide
the mode, the quantum, the recipients and the frequency of
payment of such remuneration within the said limit.
Accordingly, the Board at its meeting held on October 28,
2016, based on the recommendation of the CGC, approved
revision in the remuneration of the Non-Executive Directors
of the Company, details whereof are provided below:
Particulars
1. Fixed Remuneration
2. Additional Remuneration to
Chairpersons of Audit Committee,
CGC and
CSR Committee
3. Sitting Fees:
a) For Board Meetings
b) For meetings of following:
Remuneration*
₹ 22,00,000 per annum per
Director** for the whole year’s
directorship.
₹ 1,50,000 per annum to
Chairperson of each Committee
stated herein
₹1,00,000 per meeting attended
(either physically or through video
conferencing)
₹ 50,000 per meeting attended
- Audit Committee
(either physically or through video
- GC
conferencing)
- Stakeholders’ Relationship
Committee
- CSR Committee
- Separate Meeting of
Independent Directors
* applicable for financial years 2016-17 and 2017-18.
** excluding the remuneration to Chairman & Non-Executive Director.
Remuneration to Chairman & Non – Executive Director:
The Chairman presides over the meetings of the Board and
of the shareholders of the Company. The Chairman is also
a Member of various Committees such as CSR Committee,
Investment and Borrowing Committee, Securities Issue
Committee, Share Transfer Committee and the Risk
Management Committee.
Mr. Harsh Mariwala as the Chairman of the Board continues
to foster and promote the integrity of the Board while
nurturing an environment so as to ensure harmony amongst
the Directors for the long term benefit of all its stakeholders.
The Chairman is entrusted with the responsibility of ensuring
effective governance in the Company and continues to play
an important role in guiding the Managing Director & CEO and
the Top Management team for strategic business planning,
leadership development, corporate social responsibility,
image building, Board effectiveness and sustainable
profitable growth of the Company.
The Chairman of the Board is entitled to remuneration which
commensurate with his engagement beyond the Board
meetings. The remuneration payable to all Non-Executive
Directors including the Chairman does not exceed the overall
limit of 3% of the net profits of the Company calculated in
accordance with the provisions of the Act, as approved by
the Members.
Details of Remuneration to Directors
The remuneration of the Non-Executive Directors for the
financial year ended March 31, 2017 is as under:
Name
Director
Category
Mr. Harsh Mariwala
Non-Executive
(Chairman)
Mr. Anand Kripalu
Remuneration
(₹ per annum)
Sitting Fees*
(₹)
5,50,00,000
2,20,000
Independent
22,00,000
3,30,000
Mr. Atul Choksey
Independent
23,50,000
2,00,000
Mr. B. S. Nagesh
Independent
22,00,000
5,90,000
Ms. Hema Ravichandar
Independent
23,50,000
5,90,000
Mr. Nikhil Khattau
Independent
23,50,000
5,00,000
Mr. Rajeev Bakshi
Independent
22,00,000
3,90,000
Mr. Rajen Mariwala
Non-Executive
22,00,000
4,50,000
*sitting fee for the period April 1, 2016 to October 28, 2016 was paid @
of R 20,000 per Board / Committee meeting and sitting fee for the Board /
Committee meetings held after October 28, 2016 was paid as per the revised
structure (detailed alongside).
Statutory Reports
the Company and thereby they safeguard the interests of
the stakeholders at large by playing an appropriate control
role. Non-Executive Directors bring in their vast experience
and expertise to bear on the deliberations at the Marico’s
Board and its Committees. Although the Non-Executive
Directors would contribute to Marico in several ways,
including deliberations with the Managing Director & CEO,
the bulk of their measurable inputs comes in the form of their
contribution at Board/Committee meetings.
126
The remuneration paid to Mr. Saugata Gupta, Managing Director
and CEO, for the financial year ended March 31, 2017 is as under:
Salary &
Perquisite
# (₹)
114,188,589
Annual Star
Annual
Performance
Incentive (₹)
Pension Funds (₹)
41,040,558
10,285,001
1,858,512
Shareholding of Non-Executive Directors:
Mr. Harsh Mariwala
201,00,400
Nil
Mr. Atul Choksey*
57,862
Mr. Ananth Narayanan**
Nil
Mr. B.S. Nagesh
Nil
Ms. Hema Ravichandar
Nil
Mr. Nikhil Khattau
Nil
Mr. Rajeev Bakshi
Nil
55,32,900
Mr. Rishabh Mariwala***
2,49,76,500
Total
5,06,67,662
* ceased to be an Independent Director w.e.f. April 1, 2017
**appointed as Additional (Independent) Director w.e.f June 26, 2017
*** appointed as Additional (Non-Executive) Director w.e.f May 2, 2017
PERFORMANCE EVALUATION
The performance evaluation is conducted through structured
questionnaires which covers various aspects of the
Board’s functioning such as adequacy of the composition
of the Board and its Committees, Member’s strengths and
contribution, execution and performance of specific duties,
obligations and governance. Performance evaluation is
facilitated by the Chairperson of the CGC along with the
Chairman of the Board in the following manner based
on the feedback received from Directors on structured
questionnaires:
Your Board is committed to assessing its own performance
as a Board in order to identify its strengths and areas in
which it may improve its functioning. Towards this end, the
Corporate Governance Committee (CGC) had laid down
the criteria and processes for performance evaluation of
Individual Directors, Chairperson of the Board, the Board as
a whole and the Committees of the Board.
�
�
�
�
The performance evaluation exercise conducted during
the year under review has resulted in identification of the
following focus areas by the Board, for it to work upon in the
coming years:
No. of Shares held
(As on March 31, 2017)
Mr. Anand Kripalu
Mr. Rajen Mariwala
to Provident &
# Includes perquisite value of stock options exercised during the year
R77,217,500.
Name of Non-Executive Director
�
Contribution
Incentive
(₹)
A meeting of the CGC was first held to conduct
evaluation of all Directors.
Such meeting was followed by a meeting of the
Independent Directors wherein performance of Non
Independent Directors, Chairman of the Board and of
the entire Board was evaluated.
The entire Board met to discuss the findings of the
evaluation with the Independent Directors. The Board
then evaluated the performance of the Chairman
of the Board, the Board as a whole and its individual
Committees.
On completion of the above process, feedback was
shared with each Director at the Board Meeting held
subsequently on April 1, 2017.
The Directors were satisfied with the evaluation
process and have expressed their satisfaction with the
evaluation process.
a.
b.
c.
The Board is also committed to review the progress on these
priorities during the annual Board Retreats held once a year.
V.
Intensifying its efforts in guiding the organization to be
future-ready with focus on new growth drivers and long
term capability building;
Mentoring the Senior Management to set them up
for success and helping in creating a process for
succession and
Revisiting the Board composition with an eye on future
trends especially in the digital era.
DIRECTOR FAMILIARISATION PROGRAMME
The Company had designed a Director Familiarisation
Programme which is imparted at the time of appointment of
the Director on Board as well as annually. The Programme
aims to provide insights into the Company to enable the
Directors to understand its business in depth, to acclimatise
them with the processes, business and functionaries of
the Company and to assist them in performing their role as
Directors of the Company. Apart from review of matters as
required by the Charter, the Board also discusses various
business strategies periodically. This deepens the Directors’
understanding and appreciation of Company’s business
and thrust areas. On the new trends and regulations, the
Management also organises presentations by experts.
The Policy of conducting the Familiarisation Programme
has been disclosed on the website of the Company at
http://marico.com/india/investors/documentation/
corporate-governance.
STAKEHOLDERS’ RELATIONSHIP COMMITTEE
Pursuant to the provisions of section 178 of the Act and
Regulation 20 of the SEBI Regulations read with Part D of
Schedule II thereto, the Shareholders’ Committee of the
Board was reconstituted as the Stakeholders’ Relationship
Committee. This Committee comprises an Independent
Director and a Non-Executive Director. The Head
127
The Stakeholders’ Relationship Committee met once during
the period April 1, 2016 to March 31, 2017 viz: on February
2, 2017. The composition of the Committee along with
the details of the meetings held and attended during the
aforesaid period is detailed below:
Name of the
Director
Mr. Nikhil Khattau
Mr. Rajen Mariwala
VI.
Director
Category
Nature of
Membership
Independent
Chairman
NonExecutive
No. of Committee
Meetings
Held
Attended
1
1
1
Member
1
There was no change in the composition of the Stakeholders’
Relationship Committee during the year ended March
31, 2017. The terms of reference of the Stakeholders’
Relationship Committee include redressal of shareholder
complaints relating to transfer of shares, non-receipt of
annual report, non-receipt of dividends declared, etc.
Name and Designation of Compliance Officer:
Mr. Surender Sharma, Head, Legal – International Business
and Company Secretary
Status Report of Investor Complaints for the year ended
March 31, 2017
No. of Complaints Received -
52
No. of Complaints Pending
-
0
No. of Complaints Resolved
-
52
The Company obtains half-yearly certificate from a Company
Secretary in Practice confirming the issue of certificates
for transfer, sub-division, consolidation, etc. within the
prescribed timelines and submits a copy thereof to the
Stock Exchanges in terms of Regulation 40(9) of the SEBI
Regulations. Further, the Compliance Certificate under
Regulation 7(3) of the SEBI Regulations, confirming that all
activities in relation to both physical and electronic share
transfer facility are maintained by Registrar and Transfer
Agent is also submitted to the Stock Exchanges on a half
yearly basis.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
In line with the provisions of section 135 of the Act read
with Rules made thereunder, the Board constituted
CSR Committee comprising Independent Directors,
Non-Executive Directors and the Managing Director & CEO
of the Company. The Head - Marico Innovation Foundation
acts as the Secretary to this Committee.
The CSR Committee met twice during the period April 1,
2016 to March 31, 2017 viz: on April 25, 2016 and October
24, 2016. The composition of the CSR Committee along
with the details of the meetings held and attended during
the aforesaid period is detailed below:
Name of the Director
Director
Category
Nature of
Membership
No. of Committee
Meetings
Held
Attended
Mr. Atul Choksey*
Independent
Chairman
2
2
Mr. Rajeev Bakshi**
Independent
Chairman
2
1
Mr. Harsh Mariwala
Non-Executive
Member
2
2
Mr. Rajen Mariwala
Non-Executive
Member
2
1
Mr. Saugata Gupta
Executive Managing
Director & CEO
Member
2
1
*Resigned as an Independent Director w.e.f. April 1, 2017 and consequently
ceased to be the Chairman of the CSR Committee.
**Member of the CSR Committee elected as the Chairman w.e.f May 2, 2017.
The CSR Committee is entrusted with the following
responsibilities:
1.
2.
3.
4.
5.
6.
To formulate and approve revisions to the CSR Policy
and recommend the same to the Board for its approval.
To recommend the annual CSR expenditure budget to
the Board for approval.
To approve unbudgeted CSR expenditure involving an
annual outlay of R 1 Crore and get such spends ratified
by the Board of Directors.
To nominate Members of the CSR Team and advise the
team for effective implementation of the CSR programs.
To establish monitoring mechanisms to track each CSR
project and review the same on a half yearly basis or at
such intervals as the Committee may deem fit.
To undertake wherever appropriate benchmarking
exercises with other corporates to reassure itself of
the effectiveness of the Company’s CSR spends.
a.
CSR Spent – Tracking the Actual spends against
the Budgeted spends for the year;
b.
Progress Report highlighting impact of CSR
programs undertaken;
c.
d.
7.
8.
To review the adequacy of CSR Charter at such intervals
as the Committee may deem fit and recommendation,
if any, shall be made to the Board to update the same
from time to time.
9.
Report on feedback obtained, if any, from the
beneficiaries on the CSR programmes; and
Outcome of social audit, if any, conducted with
regards to the CSR programmes.
To carry out any other function as delegated by
the Board from time to time and/or enforced by any
statutory notification, amendment or modification
as may be applicable or as may be necessary or
appropriate for the performance of its duties.
To approve the disclosures which would form part of
the Annual Report and publish the same on website of
the Company.
Statutory Reports
Legal-International Business & Company Secretary acts as
the Secretary to this Committee.
128
VII. RISK MANAGEMENT COMMITTEE
In line with the provisions of Regulation 21 of the SEBI
Regulations, the Board constituted Risk Management
Committee comprising the Chairman of the Board, the
Managing Director & CEO and the Chief Financial Officer. The
Members of the Leadership Team are Permanent Invitees to
this Committee and the Chief Financial Officer acts as the
Secretary to the Committee.
The Risk Management Committee met once during the period
April 1, 2016 to March 31, 2017 viz: on January 20, 2017. The
composition of the Committee along with the details of the
meetings held and attended during the aforesaid period is
detailed below:
Name of the
Member
Nature of
Membership
No. of Committee
Meetings
Held
Attended
Mr. Harsh Mariwala
NonExecutive
Chairman
1
1
Mr. Saugata Gupta
Executive
-Managing
Director &
CEO
Member
1
1
Chief
Financial
Officer
Member
1
1
Mr. Vivek Karve
Designation
There was no change in the composition of the Risk
Management Committee during the year ended March 31,
2017. The primary responsibility of the Risk Management
Committee is to assist the Board in monitoring and reviewing
the risk management plan and implementation of the risk
management framework of the Company. The terms of
reference of the Committee, inter-alia, include:
1.
�
�
�
�
2.
3.
�
�
�
�
Reviewing the Company’s risk management
policies from time to time and approve and
recommend the same to the Board for its
approval.
Be aware and concur with the Company’s Risk
Appetite, including risk levels, if any, set for
financial and operational risks.
Ensure that the Company is taking appropriate
measures to achieve prudent balance between
risk and reward in both ongoing and new business
activities.
Being apprised of significant risk exposures
of the Company and whether Management is
responding appropriately to them in a timely
manner.
Implementation of Risk Management Systems and
Framework.
Risk Assessment and Mitigation Procedures:
Calendar for reviews of existing risks of every
function with the objective to refresh the
prioritized risks.
Review the top prioritized risks of every function
at defined periodicity.
Refresh at defined intervals the top risks at the
group level so that the Board can refresh the risk
review calendar.
Ensure review of top risks at group level by the
Board as per the agreed calendar.
VIII. OTHER COMMITTEES
ADMINISTRATIVE COMMITTEE
The Head Legal-International Business & Company Secretary
acts as the Secretary to the Committee. The composition of
the Committee along with the details of the meetings held
and attended during the aforesaid period is detailed below:
The Administrative Committee constituted by the Board
has an oversight on operational matters such as banking
relations, authorizations / issuance of power of attorney,
appointment of nominees under various statutes, etc. The
Committee met 12 (Twelve) times during the period April
1, 2016 to March 31, 2017 viz: on April 1, 2016; May 26,
2016; July 14, 2016; August 29, 2016; September 19, 2016;
October 24, 2016; November 3, 2016; November 4, 2016;
December 1, 2016; January 2, 2017; February 2, 2017 and
March 9, 2017.
Name of
the Member
Designation
No. of Committee
Meetings
Held
Framing and monitoring the risk management plan for
the Company:
Attended
Mr. Saugata Gupta
Managing Director & CEO
12
6
Mr. Rajen Mariwala
Non - Executive Director
12
8
Mr. Vivek Karve
Chief Financial Officer
12
12
Mr. Pawan Agrawal
Head - Finance, Marico Limited
12
9
Mr. Ravin Mody*
Head – Treasury, IR and M&A
12
12
*ceased to be the Member of the Administrative Committee w.e.f May
INVESTMENT & BORROWING COMMITTEE
2, 2017, consequent to his resignation.
The Board constituted Investment & Borrowing Committee
for approving investment in trade instruments, borrowing /
lending monies, extending guarantee/ security with a view to
ensure smooth operation and timely action. Such investment,
loan, borrowing, guarantees/ security transactions are
sanctioned by the Committee within the monetary ceiling
limits approved by the Board from time to time.
The Committee is also entrusted with powers relating
to certain preliminary matters in connection with any
acquisition/ takeover opportunity that the Company may
explore. The Head Legal - International Business & CompanySecretary acts as the Secretary to the Committee.
129
The Committee met 6 (Six) times during the period April
1, 2016 to March 31, 2017; viz: on April 12, 2016; May 31,
2016; July 20, 2016; October 12, 2016; January 2, 2017 and
March 9, 2017. The composition of the Committee along
with the details of the meetings held and attended during
the aforesaid period is detailed below:
Name of the
Director
Director
Category
Nature of
No. of Committee
Membership
Meetings
Held
Attended
Mr. Harsh Mariwala
Non-Executive
Chairman
6
5
Mr. Rajen Mariwala
Non-Executive
Member
6
5
Mr. Saugata Gupta
Executive
- Managing
Director &
CEO
Member
6
4
There was no change in the composition of the Investment
& Borrowing Committee during the year ended March 31,
2017.
SECURITIES ISSUE COMMITTEE
The Board constituted Securities Issue Committee to
approve matters pertaining to issuance of securities,
matters incidental thereto and to do all such acts as may
be entrusted to it by the Board from time to time. The Head
Legal - International Business & Company Secretary acts as
the Secretary to the Committee.
The composition of the Securities Issue Committee
comprises following Members:
The Share Transfer Committee met 7 (Seven) times during
the period April 1, 2016 to March 31, 2017; viz: on May 31,
2016; August 8, 2016; August 29, 2016; November 17, 2016;
January 11, 2017; January 20, 2017 and February 6, 2017.
The composition of the Committee along with the details of
the meetings held and attended during the aforesaid period
is detailed below:
Name of the
Director
Director
Nature of
Membership
No. of Committee
Meetings
Held
Attended
Mr. Harsh Mariwala Non-Executive
Member
7
7
Mr. Nikhil Khattau
Independent
Member
7
3
Mr. Rajen Mariwala
Non-Executive
Member
7
6
Mr. Saugata Gupta
Executive –
Managing
Director & CEO
Member
7
5
There was no change in the composition of the Share
Transfer Committee during the year ended March 31, 2017.
SUSTAINABILITY COMMITTEE
The Board constituted the Sustainability Committee on
January 30, 2016 to steer the sustainability activities of
the Company and to ensure sufficient assistance to Mr.
Jitendra Mahajan, the Business Responsibility Report (“BRR”)
Head and Mr. Saugata Gupta, the Director responsible for
implementation of BRR.
Mr. Harsh Mariwala
Non-Executive
Mr. Nikhil Khattau
Independent
Mr. Rajen Mariwala
Non-Executive
Mr. Saugata Gupta
Executive - Managing Director & CEO
Name of the Member
Designation
Nature of
Membership
Mr. Jitendra Mahajan
Chief Supply
Chain Officer
Chairman
2
2
Mr. Vivek Karve
Chief Financial
Officer
Member
2
2
Mr. Suresh M. S.
Jagirdar
Chief Legal
Counsel
Member
2
2
Chief Human
Resources
Officer
Member
2
2
Director Category
There was no change in the composition of the Securities
Issue Committee during the year ended March 31, 2017.
There were no meetings of the Committee held during
the period April 1, 2016 to March 31, 2017. However, the
approval of the Committee on relevant matters was obtained
through resolutions passed by circulation.
SHARE TRANSFER COMMITTEE
The Board constituted Share Transfer Committee to approve
transfer, transmission, sub-division, consolidation and
issuance of duplicate share certificate requests lodged by
the shareholders of the Company, if they, are found to be in
order. The Head Legal - International Business & Company
Secretary acts as the Secretary to the Committee.
Category
The Committee met twice during the period April 1, 2016 to
March 31, 2017 viz: on April 28, 2016 and February 2, 2017.
The composition of the Committee along with the details of
the meetings held and attended during the aforesaid period
is detailed below:
Name of the Director
No. of
Committee
Meetings
Held Attended
Mr. Ashutosh Telang
Statutory Reports
130
IX.
Year
There was no change in the composition of the Sustainability
Committee during the year ended March 31, 2017.
GENERAL BODY MEETINGS
(a) & (b): Details of the last three Annual General Meetings :
Venue
Date
2014 I n d i a n E d u c a t i o n July 30,
S o c i e t y ( ‘ I E S ’ ) , 2014
Manik Sabhagriha,
Vishwakarma, M. D.
Lotlikar Vidya Sankul,
Opp. Lilavati Hospital,
Bandra Reclamation,
Bandra ( West ),
Mumbai - 400 050
Time
Nature of Special Resolutions
Passed
10.00
a.m.
1.Structuring
and
implementation of Marico MD
& CEO Stock Options Plan 2014
(‘Marico MD-CEO ESOP 2014’).
2. Increase in the Borrowing
powers of the Company.
3. Issue and offer of NonConvertible Debentures.
1. Adoption of new set of
Articles of Association
incorporating the provisions
of the Companies Act, 2013 &
Rules made thereunder.
National Stock
Exchange of India
Ltd, Gr. Floor, Dr. R.
H. Patil Auditorium,
E x c h a n g e P l a z a , August
2015
G -Block , Plot No. 5, 2015
C 1 , B a n d ra Ku r l a
C o m p l ex , B a n d ra
(East), Mumbai
400051
National Stock
Exchange of India
Ltd, Gr. Floor, Dr. R.
H. Patil Auditorium,
E x c h a n g e P l a z a , August
2016
G -Block , Plot No. 5, 2016
C 1 , B a n d ra Ku r l a
C o m p l ex , B a n d ra
(East), Mumbai
400051
2. Approval of Marico Employee
Stock Appreciation Rights Plan,
2011 for the employees of the
Company.
9.00
a.m.
9.00
a.m.
(c) Resolutions passed through postal ballot and details of
the voting pattern:
During the year under review, no resolution was passed
through postal ballot and there is no proposal to pass any
special resolution by postal ballot.
DISCLOSURES
3. Approval of Marico Employee
Stock Appreciation Rights Plan,
2011 for the employees of the
subsidiary company (ies) of the
Company.
There has not been any non-compliance, penalties or
strictures imposed on the Company by the Stock Exchanges,
SEBI or any other statutory authority, on any matter relating
to the capital markets during the last three years.
The Company has a well-defined vigil mechanism embedded
in the Unified Code of Conduct and it is fully implemented by
the Management.
No personnel have been denied access to the Audit
Committee.
Compliance with mandatory and non-mandatory
requirements of the SEBI Regulations
The Company has complied with mandatory requirement
of the SEBI Regulations requiring it to obtain a certificate
from either the Auditor or Practising Company Secretary
regarding compliance of conditions of Corporate Governance
as stipulated in this clause and annex the certificate to the
Board’s Report, which is sent annually to all the shareholders
of the Company. We have obtained a certificate to this effect
from the statutory auditors and the same is given as an
annexure to the Board’s Report.
4. Authority to the Employee
Welfare Trust for Secondary
Acquisition for implementation
of the Marico Employee Stock
Appreciation Rights Plan, 2011.
5. Approval for making provision
of money by the Company
to t h e E m p l oye e We l fa re
Trust for purchase of the
shares of the Company for
the implementation of Marico
Employee Stock Appreciation
Rights Plan, 2011.
•
•
VIGIL MECHANISM
X.
MATERIAL RELATED PARTY TRANSACTIONS
1. Approval of the Marico
Employee Stock Option Plan
2016 and grant of stock options
to the eligible employees of the
Company under the said plan.
2. Approval of the grant of
stock options to the eligible
employees of the Company’s
subsidiaries under the Marico
Employee Stock Option Plan
2016.
The clause further states that the non-mandatory
requirements adopted by the Company be specifically
highlighted in the Annual Report. Accordingly, Company has
complied with the following non-mandatory requirements:
The office of Chairman and Managing Director & CEO
is held by distinct individuals.
The Internal Auditor of the Company directly report to
the Audit Committee of the Board of Directors.
The vigil mechanism has been explained in detail in the
Board’s Report.
There were no material related party transactions entered
into by the Company during the financial year 2016-17.
XI.WEBLINK
A.
B.
Web link of Policy for determining ‘material’ subsidiaries
and;
Web link of Policy on dealing with related party
transactions is: http://marico.com/india/investors/
documentation/corporate-governance
131
Quarterly and Annual Financial results for Marico Limited
and consolidated financial results for the Marico Group are
published in an English financial daily (Free Press Journal)
and a vernacular newspaper (Navshakti). The Company also
sends the same through email updates to the shareholders
who have registered their email address with the Company
or Depository Participant(s).
All official news releases and financial results are
communicated by the Company through its corporate
website - www.marico.com. Presentations made to
Institutional Investors/ Analysts at Investor Meets organized
by the Company are also hosted on the website for wider
dissemination.
The Quarterly Results, Shareholding Pattern and all other
corporate communication to the Stock Exchanges are filed
through NSE Electronic Application Processing System
(NEAPS) and BSE Listing Centre, for dissemination on their
respective websites.
The Management Discussion and Analysis Report forms part
of the Annual Report.
XIII. GENERAL SHAREHOLDER INFORMATION
INFORMATION REQUIRED UNDER REGULATION 36(3) OF
THE SEBI REGULATIONS AND SECRETARIAL STANDARD
2 WITH RESPECT TO DIRECTOR’S RE-APPOINTMENT AND
APPOINTMENT:
Directorship Details*
• Kaya Limited
• Eternis Fine Chemicals Limited
• L & T Finance Holdings Limited
• Aster DM Healthcare Limited
• Thermax Limited
Membership/Chairmanship of Stakeholders’ Relationship Committee
Committees of other Boards* • L & T Finance Holdings Limited - Member
Shareholding in the Company
(**) Only two committees, namely, Audit Committee and Stakeholders’
Relationship Committee have been considered as per Regulation 26(1)(b)
of the SEBI Regulations.
Mr. Rishabh Mariwala
Director Identification Number 03072284
Date of first appointment to May 2,2017
the Board
Age
35 years
Qualification
Graduate from Zarb School of Business, Hofstra
University, New York, USA.
Brief Profile
Mr. Rishabh Mariwala is a second generation
family business entrepreneur. His engagement
at Kaya Skin Care (chain of Dermatology Clinics
across India) from 2008 – 2011 gave him an
opportunity to gain holistic organizational
experience. In 2010, he launched a new business
line "Soap Opera” catering to the masstige
and luxury consumer segment. His passion for
innovative product formulations and the deep
consumer insight was instrumental in introducing
the luxury range of skincare products called
“PureSense" in 2016. Mr. Rishabh Mariwala
founded Sharrp Ventures and presently heads
the same. Sharrp Ventures is engaged in public
markets, private equity and start-ups. This
experience has provided him great insight into
India's vibrant start-up space and immense
learning about global best practices.
Directorship Details*
Arctic Investment & Trading Company Private
Limited (Subsidiary of Eternis Fine Chemicals
Limited)
Director Identification Number 00210342
Date of first appointment to October 13, 1988
the Board
66 years
Qualification
Graduate in Commerce from Mumbai University
Brief Profile
Mr. Harsh Mariwala leads Marico Limited as
its Chairman. He is also Chairman & Managing
Director of Kaya Limited. Over the past three
decades, Mr. Mariwala has transformed
traditional commodities driven business into
a leading consumer products and services
company in the Beauty and Wellness space.
Mr. Mariwala's entrepreneurial drive and
passion for innovation, enthused him to
establish the Marico Innovation Foundation
in 2003. The Foundation acts as a catalyst to
fuel innovation in India. Mr Mariwala started
ascent in 2012, a not-for-profit expression of
his passion to create a unique trust based peerto-peer platform for high potential growthstage entrepreneurs that leverages the “power
of the collective” and enables them to share
and exchange experiences, ideas, insights and
create a healthy ecosystem to learn from each
other and grow their enterprise. 201,00,400 Equity Shares of Re. 1/- each
(*) Excludes directorship in private limited companies, foreign companies
and Section 8 companies.
Mr. Harsh Mariwala
Age
• Marico Consumer Care Limited
Membership/Chairmanship of Nil
Committees of other Boards**
Shareholding in the Company 249,76,500 Equity Shares of Re. 1/- each
(*) Excludes directorship in private limited companies, foreign companies
and Section 8 companies.
(**) Only two committees, namely, Audit Committee and Stakeholders’
Relationship Committee have been considered as per Regulation 26(1)(b)
of the SEBI Regulations.
Statutory Reports
XII. MEANS OF COMMUNICATION
132
Mr. Ananth Narayanan
Date of first appointment to June 26, 2017
the Board
Age
40 years
Qualification
Bachelor’s degree in Engineering from University
of Madras and a Masters from the University
of Michigan, in Industrial Engineering and
Operations Research.
Brief Profile
Mr. Ananth Narayanan is the Chief Executive
Officer at Myntra and Jabong, The country’s
largest online platforms for fashion and lifestyle
products. Under his leadership, Myntra has made
multiple strategic acquisitions including Jabong
from Global Fashion Group; making it India’s
biggest fashion shopping destination. Featured
as one of “India’s Hottest 40 under 40 Business
Leaders” in 2014, Mr. Ananth Narayanan has deep
expertise in driving performance improvement
and product development. He started his career
with Mckinsey & Company where he worked for
15 years across four offices (Chicago, Shanghai,
Taipei and Chennai). In his most recent role as
Director in the company, he was responsible for
leading the Product Development practice in Asia
and worked with several companies on strategy,
operations and organizational models. He is also
on the Industry Advisory Board of University of
Michigan’s Tauber Institute.
Directorship Details*
Nil
Membership/Chairmanship of Nil
Committees of other Boards**
Shareholding in the Company Nil
(*) Excludes directorship in private limited companies, foreign companies
and Section 8 companies.
(**) Only two committees, namely, Audit Committee and Stakeholders’
Relationship Committee have been considered as per Regulation 26(1)(b)
of the SEBI Regulations.
Annual General Meeting
Date
: Tuesday, August 1, 2017
Time
: 4.30 p.m.
Venue
: Indian Education Society (‘IES’),
Manik Sabhagriha, Vishwakarma,
M. D. Lotlikar Vidya Sankul, Opp.
Lilavati Hospital, Bandra Reclamation,
Bandra (West), Mumbai - 400 050
Book Closure dates
: Friday, July 28, 2017 to Tuesday,
August 1, 2017, both days inclusive
Interim Dividends
Payment Date
: December 2, 2016 (1st Interim
Dividend) and March 3, 2017 (2nd
Interim Dividend)
Financial calendar
Financial Year
: April 1 - March 31
For the year ended March 31, 2017, results were announced on
• First quarter
: August 5, 2016
• Third quarter
: February 2, 2017
• Half year
• Annual
: October 28, 2016
: May 2, 2017
Tentative Schedule for declaration of financial results during
the financial year 2017-18
• First quarter
: August 1, 2017
• Half year
: October 30, 2017
• Third quarter
: February 2, 2018
• Annual
: May 4, 2018
Listing Details
Name of Stock
Exchange
Stock/ Scrip Code
BSE Limited
Phiroze Jeejeebhoy
Towers, Dalal Street,
Mumbai 400 001
: 531642
The National Stock
Exchange of India
Limited (NSE),
Exchange Plaza,
Bandra Kurla Complex,
Mumbai 400 051
: MARICO
ISIN
: INE 196A01026
Company Identification : L15140MH1988PLC049208
Number (CIN)
The Company hereby confirms that it has made the payment of
Annual Listing Fees for the FY 2017-2018 to BSE Limited and
The National Stock Exchange of India Limited.
Transfer of Unclaimed Dividend to Investor Education and
Protection Fund (IEPF)
Section 124 of the Act read with the Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund)
Rules, 2016 (“the Rules”) stipulates transfer of dividend that has
remained unclaimed for a period of seven years, from the unpaid
dividend account to the Investor Education and Protection Fund
(IEPF). Further, the Rules also stipulate transfer of shares in respect
whereof the dividend has not been paid or claimed for a period
of seven consecutive years or more to the demat account of the
IEPF Authority.
133
Bombay Stock Exchange
Type of
Dividend
Rate (%)
2010-11
1st Interim
Dividend
30
26/10/2010 01/12/2017
71,255
2nd Interim
Dividend
36
02/05/2011 07/06/2018
72,274
1st Interim
Dividend
30
04/11/2011 10/12/2018
97,574
2nd Interim
Dividend
40
03/05/2012 08/06/2019
89,587
1st Interim
Dividend
50
02/11/2012 07/12/2019
1,31,274
2nd Interim
Dividend
50
30/04/2013 05/06/2020
1,51,819
1st Interim
Dividend
75
29/10/2013 04/12/2020
1,70,470
2nd Interim
Dividend
100
31/01/2014 08/03/2021
2,11,740
3rd Interim
Dividend
175
25/03/2014 30/04/2021
2,84,455
1st Interim
Dividend
100
07/11/2014 13/12/2021
2,48,575
100
2nd Interim
Dividend
150
03/02/2015 11/03/2022
2,44,371
80
1st Interim
Dividend
175
04/11/2015 10/12/2022
3,02,220
60
2nd Interim
Dividend
150
30/01/2016 08/03/2023
2,03,722
3rd Interim
Dividend
100
10/03/2016 17/04/2023
2,94,051
1st Interim
Dividend
150
04/11/2016 10/12/2023
2,54,473
2nd Interim
Dividend
200
02/02/2017 11/03/2023
4,09,112
266.1
Jul-16
Aug-16
263.5
240.2
269.25
261
289.35
270
302.75
247.5
290
306.9
279.3
292
272
272.6
234.55
278.15
264.95
252.35
264.5
Feb-17
282
Jan-17
Mar-17
238.55
253
300
276
262.5
289.9
279
261.45
247.25
278.75
Nov-16
Dec-16
240
240.05
306.9
302.65
Oct-16
Low
266.5
Sep-16
269.2
234.8
261.6
238.05
282.8
252.55
252.65
299.95
276.25
PERFORMANCE IN COMPARISON: BSE SENSEX, S & P CNX
NIFTY AND BSE FMCG
140
12-Jan-17
7-Feb-17
5-Mar-17
31-Mar-17
12-Jan-17
7-Feb-17
5-Mar-17
31-Mar-17
17-Dec-16
26-Oct-16
21-Nov-16
30-Sep-16
4-Sep-16
9-Aug-16
14-Jul-16
18-Jun-16
23-May-16
Marico
NSE Index
140.00
120.00
100.00
80.00
Marico
BSE Sensex
17-Dec-16
21-Nov-16
26-Oct-16
30-Sep-16
4-Sep-16
9-Aug-16
14-Jul-16
60.00
18-Jun-16
Reminder letters are periodically sent by the Company to
concerned shareholders advising them to encash their dividend
warrant or lodge their claims with respect to unclaimed dividends.
Shareholders may note that both the unclaimed dividend and
corresponding shares transferred to IEPF including all benefits
accruing on such shares, if any, can be claimed back from IEPF
following the procedure prescribed in the Rules. No claim shall lie
in respect thereof with the Company.
120
23-May-16
2016-17
Jun-16
(In ₹)
High
263.4
269.9
27-Apr-16
2015-16
May-16
Exchange (NSE)
Low
263.4
27-Apr-16
2014-15
Apr-16
1-Apr-16
2013-14
(In ₹)
High
1-Apr-16
2012-13
National Stock
Limited (BSE)
Month
Financial
Year
2011-12
Date of
Due Date
Amount
Declaration for transfer unclaimed
to IEPF
as on March
31, 2017
Market Price Data
Statutory Reports
In view of the above, dividend for the following years will be
transferred to IEPF on respective dates. Further, if the dividend
remains unclaimed for seven consecutive years, the corresponding
shares will also be transferred to the demat account of the
IEPF Authority.
134
Categories of Shareholding as on March 31, 2017
140.00
Category
130.00
120.00
110.00
100.00
No. of Shares held Percentage of
7706,97,240
59.72
FIIs (including Foreign Portfolio Investors)
3727,88,857
28.89
540,00,637
4.18
Individuals & HUF
90.00
Marico
5-Mar-17
31-Mar-17
7-Feb-17
12-Jan-17
17-Dec-16
21-Nov-16
26-Oct-16
4-Sep-16
30-Sep-16
9-Aug-16
14-Jul-16
18-Jun-16
23-May-16
1-Apr-16
27-Apr-16
80.00
BSE FMCG
Bodies Corporate & Trusts
345,18,512
2.67
Life Insurance Corporation
283,74,596
2.20
Mutual Funds and UTI
177,21,561
1.37
GIC & Subsidiaries
50,59,964
0.39
Non Resident Indians
37,00,761
0.29
Central Government
19,29,720
0.15
4,97,116
0.04
Financial Institution & Banks
Share Transfer
System
: Transfers in physical form are registered
by the Registrar and Share Transfer
Agents immediately on receipt of
completed documents and certificates
are issued within 15 days of date of
lodgement of transfer.
Invalid share transfers are returned within
15 days of receipt.
The Share Transfer Committee generally
meets as may be warranted by the
number of share transaction requests
received by the Company.
All requests for dematerialisation of shares
are processed and the confirmation
is given to respective Depositories i.e.
National Securities Depository Limited
and Central Depository Services (India)
Limited, generally within 21 days.
Registrar & Transfer : Link Intime India Pvt Limited (Unit: Marico
Agents
Ltd.) C 101, 247 Park, LBS Marg, Vikhroli
West, Mumbai – 400 083
Distribution of Shareholding as on March 31, 2017:
No. of Equity
Shares held
1- 500
501-1000
1001 -2000
2001-3000
3001-4000
4001- 5000
5001-10000
10001 &
above
Total
No. of
Shareholders
% of
Shareholders
No. of Shares
held
% of
Shareholding
4,165
6.62
33,41,691
0.26
52,625
2,272
670
650
247
998
1,282
62,906
83.66
3.61
1.07
1.03
0.39
1.59
58,25,345
37,21,643
17,31,163
24,67,936
11,58,326
75,98,220
0.45
0.29
0.13
0.19
0.09
0.59
2.04 126,46,26,874
98.00
100 129,04,71,198
100
Shareholding
Promoters
Clearing Members
Total
Shareholding as on March 31, 2017
11,82,234
0.09
129,04,71,198
100.00
135
In terms of the notification issued
by SEBI, trading in the equity shares
of the Company is permitted only in
dematerialised form with effect from
May 31, 1999.
Outstanding GDR : The Company has not issued any GDR
/ ADR / Warrants / ADR / Warrants or any convertible
or any convertible instruments.
instruments,
conversion date and
impact on equity
Commodity price risk : Please refer to Management Discussion
or foreign exchange and Analysis Report for the same.
risk and hedging
activities
Plant Locations
: Kanjikode, Perundurai, Pondicherry,
Jalgaon, Baddi, Paladhi, Paonta Sahib,
Dehradun and Guwahati.
Shareholders / Investors Complaint’s received and redressed :
The Company gives utmost priority to the interests of the
investors. All the requests / complaints of the shareholders
have been resolved to the satisfaction of the shareholders
within the statutory time limits. During the financial year
ended March 31, 2017, 52 complaints were received from the
shareholders as per the details given below.
Nature of Complaint
Non-Receipt of Dividend
Received
32
Resolved
32
Non-Receipt of Shares Certificates
4
4
Others (e.g. non-receipt of Annual Report etc.)
16
16
Total
52
52
Address for
correspondence
: Shareholding related queries
Company’s Registrar & Transfer Agent:
Link Intime India Pvt Limited
Unit: Marico Limited
C 101, 247 Park, LBS Marg, Vikhroli
West, Mumbai 400 083
Tel.: +91-022 –49186270
Fax: +91-022 - 49186060
E-mail: rnt.helpdesk@linkintime.co.in
General Correspondence
Grande Palladium, 9th Floor, 175,
CST Road, Kalina, Santa Cruz (East),
Mumbai 400 098
Tel.: +91-022 – 66480480,
Fax: +91-022 – 26500159
E-mail: investor@marico.com
Statutory Reports
Dematerialization of : As on March 31, 2017, 99.88% of
Shares and Liquidity
shareholding was held in Dematerialised
form with National Securities Depository
Limited and Central Depository Services
(India) Limited.
Chief Executive Officer (CEO) Declaration
136
This is to confirm that the Company has adopted a Code of Conduct for its Board Members and Senior Management Personnel. This
Code of Conduct is available on the Company’s website.
I hereby declare that all the Members of the Board of Directors and Senior Management Personnel have affirmed compliance with the
Code of Conduct as adopted by the Company.
This certificate is being given pursuant to Part D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
Saugata Gupta
Managing Director & CEO
Place: Mumbai
Date : May 2, 2017
Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification
We hereby certify that:
(a)
We have reviewed financial statements and the cash flow statement for the financial year ended March 31, 2017 and to the best
of our knowledge and belief:
(i)
these statements do not contain any materially untrue statement or omit any material fact or contain statements that might
be misleading;
(ii)
these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting
standards, applicable laws and regulations.
(b)
There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are
fraudulent or illegal or violative of the Company’s code of conduct.
(c)
We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated
the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the
auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware
and the steps we have taken or propose to take to rectify these deficiencies.
(d)
We have indicated to the auditors and the Audit Committee:
(i)
significant changes in internal control during the year;
(ii)
significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial
results; and
(iii)
Instances of significant fraud of which we have become aware and the involvement therein, if any, of the Management or
an employee having a significant role in the Company’s internal control system over financial reporting.
This certificate is being given to the Board pursuant to Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
Thank you.
Yours truly,
For Marico Limited
For Marico Limited
Managing Director & CEO
Chief Financial Officer
Saugata Gupta
Place:Mumbai Date : May 2, 2017
Vivek Karve
Place:Mumbai
Date : May 2, 2017
137
To the Members of Marico Limited
We have examined the compliance of conditions of Corporate Governance by Marico Limited, for the year ended March 31, 2017 as
stipulated in Regulations 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C,
D and E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (collectively referred to as “SEBI Listing Regulations, 2015).
The compliance of conditions of Corporate Governance is the responsibility of the Company’s Management. Our examination was carried
out in accordance with the Guidance Note on Certification of Corporate Governance, issued by the Institute of Chartered Accountants
of India and was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the
conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
We certify that the Company has complied with the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations,
2015.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.
For Price Waterhouse
Chartered Accountants
Firm Registration Number: 301112E
Uday Shah
Date : May 2, 2017
Membership Number: 46061
Place : Mumbai Partner
Statutory Reports
Auditors’ Certificate regarding compliance of conditions of Corporate Governance
Marico Egypt for industries SAE
Marico Malaysia Sdn.Bhd
Marico South East Asia Corporation
(Formerly known as International
Consumer Products Corporation)
Marico Innovation Foundation
8
9
10
11
12
1.000
0.00285
14.654
3.593
4.835
4.835
3.593
3.593
17.656
1.000
0.814
0.814
Exchange
Rate
15th March, 2013
18th February, 2011
4th December, 2009
1st January, 2008
1st November, 2007
17th October, 2007
19th December, 2006
1st October, 2006
8th November, 2005
20th April, 2012
2nd August, 2003
6th September, 1999
Date of acquiring
subsidiary
31st March, 2017
31st March, 2017
31st March, 2017
31st March, 2017
31st March, 2017
End date of the
Reporting Period
31st March, 2017
31st March, 2017
1st April, 2016
1st April, 2016
1st April, 2016
0.00
0.00
27.18
9,535.90
25.88
1.77
4.41
1.23
26.52
5.48
29.04
6.01
2.48
0.69
0.09
0.03
38.84
2.20
20.66
20.66
0.08
0.10
31.50
25.64
Share Capital
-0.15
-0.15
-1.70
-595.53
-25.68
-1.75
39.00
10.85
12.14
2.51
19.47
4.03
-5.95
-1.66
-6.41
-1.78
-209.88
-11.89
11.49
11.49
0.34
0.41
126.51
102.98
Reserves
0.00
0.00
127.26
44,654.08
0.21
0.01
56.10
15.61
54.55
11.28
48.52
10.04
0.49
0.14
31.27
8.70
55.28
3.13
32.86
32.86
0.69
0.84
375.21
305.42
Total Assets
0.15
0.15
101.78
35,713.72
0.01
0.00
12.68
3.53
15.88
3.29
0.01
0.00
3.96
1.10
37.59
10.46
226.32
12.82
0.71
0.71
0.27
0.33
217.20
176.80
Total
Liabilities
0.46
0.46
377.20
132,352.60
0.02
0.00
40.39
11.24
102.00
21.10
0.00
0.00
0.00
0.00
0.00
0.00
190.00
10.76
7.80
7.80
0.00
0.00
691.61
562.97
Turnover
0.00
0.00
15.18
5,327.55
-0.01
-0.00
-1.15
-0.32
3.05
0.63
0.20
0.04
0.72
0.20
-1.08
-0.30
-15.25
-0.86
6.80
6.80
0.29
0.35
192.70
156.86
Profit /( Loss)
Before Tax
0.00
0.00
-2.66
-934.90
0.00
0.00
0.10
0.03
-0.90
-0.19
-0.06
-0.01
0.00
0.00
0.00
0.00
0.00
0.00
2.45
2.45
0.10
0.12
39.62
48.68
Provision
for Tax
0.00
0.00
12.52
4,392.66
-0.01
-0.00
-1.05
-0.29
2.16
0.45
0.15
0.03
0.72
0.20
-1.08
-0.30
-15.25
-0.86
4.35
4.35
0.19
0.23
117.23
144.02
Profit /
(Loss) After
Tax
5)
Thuan Phat Foodstuff Joint stock Company, a wholly owned subsidiary of Marico South East Asia Corporation (MSEA) got merged into its Holding Company i.e. MSEA w.e.f 1st December, 2016.
Marico Innovation Foundation, a company incorporated under Section 25 of the Companies Act, 1956 (being a private company limited by guarantee not having share capital) primarily with an objective of fuelling
and promoting innovation in India, is a wholly owned subsidiary of the Company with effect from March 15, 2013. Based on the Control assessment carried out by Marico Limited, the same is not consolidated as
per IND AS 110.
100
100
100
100
100
100
100
100
100
100
100
90
%
of Share
holding
6)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
128.21
157.50
Proposed
Dividend
including
Dividend declared during
the year
There are no subsidiaries which are yet to commence operations. Halite Personal Care Private Limited , a step down subsidiary of the Company which has not been included in the above statement is under
members voluntary liquidation and has concluded final distribution of its assets. The Indian rupee equivalents of the figures given in foreign currencies in the accounts of the subsidiary companies, have been given based on the exchange rates as on 31st March, 2017
0.00
0.00
30.27
10,619.89
0.00
0.00
2.60
0.72
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
31.37
31.37
0.00
0.00
105.66
129.81
Details of
Investment
(Excluding
Investment in
Subsidiaries)
The amounts given in the table above are from the annual accounts made for the respective financial year end for each of the Companies.
31st March, 2017
31st March, 2017
31st March, 2017
1st January, 2016 31st December, 2016
1st April, 2016
1st April, 2016
1st January,2016 31st December, 2016
1st April, 2016
1st April, 2016
1st April, 2016
1st October, 2015
1st April, 2016
Start date of the
Reporting Period
(All figures except exchange rate are in R Crore)
4)
3)
2)
1)
Rs.
Rs.
Rs.
VND
Rs.
MYR
Rs.
EGP
Rs.
ZAR
Rs.
ZAR
Rs.
EGP
Rs.
EGP
Rs.
AED
Rs.
Rs.
Rs.
BDT
Rs.
BDT
Reporting
Currency
% of Shareholding includes direct and indirect holding through subsidiary.
Marico South Africa (Pty) Limited
7
Notes:
Marico South Africa Consumer
Care (Pty) Limited
6
Marico Middle East FZE
4
MEL Consumer Care SAE
Marico Consumer Care Limited
3
Egyptian American Company
for Investment and Industrial
Development SAE
MBL Industries Limited
2
5
Marico Bangladesh Limited
Name of the subsidiary
1
Sr. No.
Part “A” : Subsidiaries
Statement containing salient features of the financials statements of subsidiaries
Pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014
FORM AOC - 1
138
Part ‘B’ : Associates & Joint Ventures
Statement pursuant to section 129(3) of the Companies Act, 2013 related to Associate Companies and Joint
Ventures.
(r in Crore)
Name of Joint Venture
Bellezimo Zed Lifestyle Pvt. Ltd.
Professionale
Products Pvt. Ltd.
1. Latest audited Balance Sheet
March 31, 2017
March 31, 2017
- Number
0.16
0.00
- Amount of Investment In Associates/Joint Venture
1.62
16.30
- Extend of Holding
45%
35.43%
3. Description of how there is significant influence
Shareholder's
agreement
Shareholder's
agreement
4. Reason why the joint venture is not consolidated
Not Applicable
Not Applicable
(0.51)
0.93
i. Considered in consolidation
(1.00)
0.00
ii. Not Considered in consolidation
(1.22)
0.17
2. Shares of Joint Venture held by the Company on the year end
5. Networth attributable to shareholding as per latest audited Balance Sheet
6. Profit/Loss for the year
Note:- Refer note 31(b) of the consolidated financial statements for information on joint venture.
1.
2.
Names of Associates or joint ventures which are yet to commence operations. - Nil
Names of Associates or joint ventures which have been liquidated or sold during the year. - Nil
For and On behalf of Board of Directors HARSH MARIWALA Chairman SAUGATA GUPTA Managing Director and CEO VIVEK KARVE Chief Financial Officer [DIN 00210342] [DIN 05251806] SURENDER SHARMA [Membership No.A13435] Company Secretary
Place : Mumbai Date : May 2, 2017 Statutory Reports
139
140
FINANCIAL
Statements
141 Consolidated Financial Statements
230 Standalone Financial Statements
CONSOLIDATED AUDITORS’ REPORT
141
To the Members of Marico Limited
Report on the Consolidated Indian Accounting Standards (Ind
AS) Financial Statements
1.
2.
We have audited the accompanying consolidated Ind
AS financial statements of Marico Limited (“hereinafter
referred to as the Holding Company”) and its subsidiaries
(the Holding Company and its subsidiaries together
referred to as “the Group”) and its joint ventures; (Refer
Note 31 to the attached consolidated financial statements),
comprising of the consolidated Balance Sheet as at
31st March, 2017, the consolidated Statement of Profit
and Loss (including Other Comprehensive Income), the
consolidated Cash Flow Statement for the year then
ended and the Statement of Changes in Equity for the
year then ended, and a summary of significant accounting
policies and other explanatory information prepared
based on the relevant records (hereinafter referred to as
“the Consolidated Ind AS Financial Statements”).
Management’s Responsibility for the Consolidated Ind
AS Financial Statements
The Holding Company’s Board of Directors is responsible
for the preparation of these consolidated Ind AS
financial statements in terms of the requirements of the
Companies Act, 2013 (hereinafter referred to as “the
Act”) that give a true and fair view of the consolidated
financial position, consolidated financial performance,
consolidated cash flows and changes in equity of the
Group including its joint ventures in accordance with
accounting principles generally accepted in India
including the Indian Accounting Standards specified in
the Companies (Indian Accounting Standards) Rules,
2015 (as amended) under Section 133 of the Act. The
Holding Company’s Board of Directors is also responsible
for ensuring accuracy of records including financial
information considered necessary for the preparation of
consolidated Ind AS financial statements. The respective
Board of Directors of the companies included in the Group
and of its joint ventures are responsible for maintenance
of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets
of the Group and its joint ventures respectively and for
preventing and detecting frauds and other irregularities;
the selection and application of appropriate accounting
policies; making judgements and estimates that are
reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the Ind AS financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error,
3.
4.
5.
6.
7.
which has been used for the purpose of preparation of the
consolidated Ind AS financial statements by the Directors
of the Holding Company, as aforesaid.
Auditors’ Responsibility
Our responsibility is to express an opinion on these
consolidated Ind AS financial statements based on our
audit. While conducting the audit, we have taken into
account the provisions of the Act and the Rules made
thereunder including the accounting standards and
matters which are required to be included in the audit
report.
We conducted our audit of the consolidated Ind AS
financial statements in accordance with the Standards on
Auditing specified under Section 143(10) of the Act and
other applicable authoritative pronouncements issued
by the Institute of Chartered Accountants of India. Those
Standards and pronouncements require that we comply
with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the
consolidated Ind AS financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the
consolidated Ind AS financial statements. The procedures
selected depend on the auditors’ judgement, including
the assessment of the risks of material misstatement of
the consolidated Ind AS financial statements, whether
due to fraud or error. In making those risk assessments,
the auditor considers internal financial control relevant to
the Holding Company’s preparation of the consolidated
Ind AS financial statements that give a true and fair view,
in order to design audit procedures that are appropriate
in the circumstances. An audit also includes evaluating
the appropriateness of the accounting policies used and
the reasonableness of the accounting estimates made
by the Holding Company’s Board of Directors, as well as
evaluating the overall presentation of the consolidated Ind
AS financial statements.
We believe that the audit evidence obtained by us and the
audit evidence obtained by the other auditors in terms of
their reports referred to in sub-paragraph 8 of the Other
Matters paragraph below, other than the unaudited Ind
AS financial statements as certified by the management
and referred to in sub-paragraph 9 of the Other Matters
paragraph below, is sufficient and appropriate to provide
a basis for our audit opinion on the consolidated Ind AS
financial statements.
Opinion
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
consolidated Ind AS financial statements give the
Financial Statements
Independent Auditors’ Report
142
information required by the Act in the manner so required
and give a true and fair view in conformity with the
accounting principles generally accepted in India of the
consolidated state of affairs of the Group and its joint
ventures as at 31st March, 2017, and their consolidated
profit (including other comprehensive income), their
consolidated cash flows and consolidated changes in
equity for the year ended on that date.
Other Matters
8.
We did not audit the financial statements of six subsidiaries
and one firm whose financial statements reflect total
assets of Rs. 540.06 Crore and net assets of Rs. 98.35
Crore as at 31st March, 2017, total revenue of Rs. 1,273.50
Crore, net profit Rs. 110.69 Crore and net cash outflows
amounting to Rs.37.46 Crore for the year ended on that
date, as considered in the consolidated Ind AS financial
statements. The consolidated Ind AS financial statements
also include the Group’s share of net loss of Rs.1.01 Crore
for the year ended 31st March, 2017 as considered in the
consolidated Ind AS financial statements, in respect of
two joint venture companies whose financial statements
have not been audited by us. These financial statements
have been audited by other auditors whose reports have
been furnished to us by the Management and our opinion
on the consolidated Ind AS financial statements in so far
as it relates to the amounts and disclosures included in
respect of these subsidiaries and joint ventures and our
report in terms of sub-section (3) of Section 143 of the
Act in so far as it relates to the aforesaid subsidiaries and
joint ventures is based solely on the reports of the other
auditors.
9.
Our opinion is not qualified in respect of these matters.
10.
As required by Section 143 (3) of the Act, we report, to the
extent applicable, that:
Report on Other Legal and Regulatory Requirements
(a) We have sought and obtained all the information and
explanations which to the best of our knowledge
and belief were necessary for the purposes of our
audit of the aforesaid consolidated Ind AS financial
statements.
(b)
In our opinion, proper books of account as required
by law maintained by the Holding Company, its
subsidiary included in the Group and joint ventures
incorporated in India including relevant records
relating to preparation of the aforesaid consolidated
Ind AS financial statements have been kept so far as
it appears from our examination of those books and
records of the Holding Company and the reports of
the other auditors.
(c) The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss (including other
comprehensive income), Consolidated Cash Flow
Statement and the Consolidated Statement of
Changes in Equity dealt with by this Report are
in agreement with the relevant books of account
maintained by the Holding Company, its subsidiary
included in the Group and joint ventures incorporated
in India including relevant records relating to the
preparation of the consolidated Ind AS financial
statements.
(d) In our opinion, the aforesaid consolidated Ind
AS financial statements comply with the Indian
Accounting Standards specified under Section 133
of the Act.
Our opinion on the consolidated Ind AS financial
statements and our report on Other Legal and Regulatory
Requirements below, is not modified in respect of the
above matters with respect to our reliance on the work
done and the reports of the other auditors and the financial
statements certified by the Management.
The comparative financial information of the Company for
the year ended 31st March, 2016 and the transition date
opening balance sheet as at 1st April, 2015 included in
these consolidated Ind AS financial statements, are based
on the previously issued statutory financial statements for
the years ended 31st March, 2016 and 31st March, 2015
prepared in accordance with the Companies (Accounting
Standards) Rules, 2006 (as amended) which were audited
by us, on which we expressed an unmodified opinion
dated 29th April, 2016 and 30th April, 2015 respectively.
The adjustments to those financial statements for the
differences in accounting principles adopted by the
Company on transition to the Ind AS have been audited by
us.
(f)
(g) With respect to the other matters to be included in
the Auditors’ Report in accordance with Rule 11 of
(e)
On the basis of the written representations received
from the directors of the Holding Company as on
31st March, 2017 taken on record by the Board of
Directors of the Holding Company and the reports
of the statutory auditors of its subsidiary company
and joint ventures incorporated in India, none of
the directors of the Group companies and its joint
ventures incorporated in India is disqualified as on
31st March, 2017 from being appointed as a director
in terms of Section 164 (2) of the Act.
With respect to the adequacy of the internal financial
controls over financial reporting of the Holding
Company, its subsidiary company and joint ventures
incorporated in India and the operating effectiveness
of such controls, refer to our separate Report in
Annexure A.
143
i. The consolidated Ind AS financial statements
disclose the impact, if any, of pending litigations
as at 31st March, 2017 on the consolidated
financial position of the Group and its joint
ventures– Refer Note 33 to the consolidated Ind
AS financial statements.
ii.
Provision has been made in the consolidated
Ind AS financial statements, as required under
the applicable law or accounting standards, for
material foreseeable losses, if any, on long-term
contracts including derivative contracts as at
31st March, 2017, in respect of such items as it
relates to the Group and its joint ventures.
iii. There has been no delay in transferring amounts,
required to be transferred, to the Investor
Education and Protection Fund by the Holding
Company and its subsidiary company and joint
ventures incorporated in India during the year
ended 31st March, 2017.
iv. In the consolidated financial statements, holdings
as well as dealings in Specified Bank Notes
during the period from 8th November, 2016 to
30th December, 2016 by the Holding Company
and it’s subsidiary company and joint ventures
incorporated in India has been requisitely
disclosed, on the basis of information available
with the Company. Based on audit procedures
and relying on the management representation
we report that the disclosures are in accordance
with books of account maintained by the Holding
Company and its subsidiary company and its joint
ventures incorporated in India and as produced
to us by the Management and the reports of the
other auditors – Refer Note [6(e)]
For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Place: Mumbai Date: May 2, 2017
Uday Shah
Partner
Membership Number: 46061
Financial Statements
the Companies (Audit and Auditors) Rules, 2014, in
our opinion and to the best of our information and
according to the explanations given to us:
ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT
144
Referred to in Paragraph 11(F) of the Independent Auditors’ Report of even date to the members of Marico Limited on
the Consolidated Financial Statements for the year ended 31st March, 2017.
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Act
1. 2. 3. 4. In conjunction with our audit of the consolidated Ind AS
financial statements of the Company as of and for the
year ended 31st March, 2017, we have audited the internal
financial controls over financial reporting of Marico Limited
(hereinafter referred to as “the Holding Company”) and its
subsidiary company and its jointly controlled companies,
which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial
Controls
The respective Board of Directors of the Holding
company, its subsidiary company, and its jointly
controlled companies, which are companies incorporated
in India, are responsible for establishing and maintaining
internal financial controls based on ,internal control over
financial reporting criteria established by the Company
considering the essential components of internal
control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India (ICAI). These
responsibilities include the design, implementation and
maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence
to the respective company’s policies, the safeguarding
of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial
information, as required under the Act.
5. 6. Auditor’s Responsibility
Our responsibility is to express an opinion on the
Company’s internal financial controls over financial
reporting based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the
“Guidance Note”) issued by the ICAI and the Standards on
Auditing deemed to be prescribed under Section 143(10)
of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to
an audit of internal financial controls and both issued by
the ICAI. Those Standards and the Guidance Note require
that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial
reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls system over financial reporting and their
operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining
an understanding of internal financial controls over
financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on
the assessed risk. The procedures selected depend on
the auditor’s judgement, including the assessment of the
risks of material misstatement of the financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained and
the audit evidence obtained by the other auditors in terms
of their reports referred to in the Other Matters paragraph
below, is sufficient and appropriate to provide a basis
for our audit opinion on the Company’s internal financial
controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial
Reporting
A company’s internal financial control over financial
reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles. A company’s internal financial
control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance with
generally accepted accounting principles, and that
receipts and expenditures of the company are being made
only in accordance with authorisations of management
and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the
company’s assets that could have a material effect on the
financial statements.
Inherent Limitations of Internal Financial Controls Over
Financial Reporting
7. Because of the inherent limitations of internal financial
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation
of the internal financial controls over financial reporting
to future periods are subject to the risk that the internal
financial control over financial reporting may become
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
145
8. In our opinion, the Holding Company, its subsidiary
company and its joint ventures, which are companies
incorporated in India, have, in all material respects,
an adequate internal financial controls system over
financial reporting and such internal financial controls
over financial reporting were operating effectively as
at 31st March, 2017, based on the internal control over
financial reporting criteria established by the Company
considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute
of Chartered Accountants of India.
9. Other Matters
Our aforesaid reports under Section 143(3)(i) of the Act
on the adequacy and operating effectiveness of the
internal financial controls over financial reporting in so
far as it relates to one subsidiary company and two joint
ventures, which are companies incorporated in India, is
based on the corresponding reports of the auditors of
such companies incorporated in India. Our opinion is not
qualified in respect of this matter.
For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Place: Mumbai Date: May 2, 2017
Uday Shah
Partner
Membership Number: 46061
Financial Statements
Opinion
CONSOLIDATED BALANCE SHEET
as at 31st March, 2017
146
Particulars
ASSETS
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
Goodwill
Other intangible assets
Investment accounted for using equity method
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Deferred tax assets (Net)
Other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than (iii) above
(v) Loans
(vi) Other financial assets
Current tax assets
Other current assets
Assets classified as held for sale
Total current assets (Net)
Total assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Reserves and Surplus
Other reserves
Equity attributable to owners
Non-controlling interests
Total equity
LIABILITIES
Non-current liabilities
Financial liabilities
(i) Borrowings
Employee benefit obligations
Deferred tax liabilities (Net)
Total non-current liabilities
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities
Provisions
Employee benefit obligations
Current tax liabilities (Net)
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Significant accounting policies
Critical estimates and judgements
As at
31st March, 2016
As at
1st April, 2015
547.19
11.16
29.98
479.45
28.08
16.30
524.34
36.73
30.67
497.36
28.73
0.82
556.67
3.04
17.99
489.15
30.10
-
6(a)
6(c)
6(f)
7
8
58.41
3.73
15.71
9.54
18.22
1,217.77
42.58
3.75
13.75
64.93
30.57
1,274.23
34.91
3.49
15.09
136.93
24.83
1,312.20
9
1,253.44
925.56
994.72
6(a)
6(b)
6(d)
6(e)
6(c)
6(f)
17
10
533.50
246.99
33.97
193.31
6.12
3.17
0.92
97.88
2,369.30
12.45
2,381.75
3,599.52
469.79
252.09
93.16
223.98
5.00
7.07
1.98
115.86
2,094.49
12.45
2,106.94
3,381.17
300.61
176.75
79.06
132.05
5.01
1.54
0.12
95.73
1,785.59
28.71
1,814.30
3,126.50
12(a)
129.05
129.02
64.50
12(b)
12(c)
2,232.99
(36.36)
2,325.68
13.34
2,339.02
1,907.64
(19.29)
2,017.37
14.31
2,031.68
1,784.66
(48.70)
1,800.46
13.65
1,814.11
13(a)
15
16
15.86
22.03
37.89
12.81
22.84
35.65
168.40
13.60
16.28
198.28
13(a)
13(c)
13(b)
14
15
17
18
238.80
696.60
26.64
56.41
52.03
32.57
119.56
1,222.61
1,260.50
3,599.52
152.79
669.04
209.07
50.64
54.25
38.07
139.98
1,313.84
1,349.49
3,381.17
165.44
564.42
122.44
42.25
53.97
39.02
126.57
1,114.11
1,312.39
3,126.50
Note
3
3
4
5
5
11
12(c)
1
2
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
(r in Crore)
As at
31st March, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No. A13435]
Place: Mumbai
Date: May 2, 2017
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2017
Particulars
Year ended
31st March, 2017
(r in Crore)
Year ended
31st March, 2016
20
97.31
6,033.23
93.33
6,117.78
21(a)
2,765.23
122.39
(56.67 )
18.13
404.18
90.30
1,523.39
16.58
4,883.53
1,149.70
2,855.56
154.89
60.10
7.13
373.40
94.86
1,521.99
20.62
5,088.55
1,029.23
31
(1.00)
1,148.70
1,148.70
(0.53)
1,028.70
1,028.70
26
26
292.21
45.52
337.73
810.97
250.30
55.07
305.37
723.33
15
(1.37)
(4.25)
0.41
(0.96)
1.30
(2.95)
(33.77)
25.52
(4.05)
51.18
(8.83)
(17.08)
(18.04)
792.93
(17.72)
29.41
26.46
749.79
798.59
12.38
810.97
711.48
11.85
723.33
(18.03)
(0.01)
(18.04)
26.47
(0.01)
26.46
780.56
12.37
792.93
737.95
11.84
749.79
6.21
6.20
5.53
5.53
Note
Revenue from operations
19
21(b)
Current tax
Deferred tax
Total tax expense
Profit for the year (A)
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
Income tax relating to items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
Total
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Change in fair value of hedging instruments
Income tax relating to items that may be reclassified to profit or loss
Change in fair value of hedging instruments
Total
Other comprehensive income for the year (B)
Total comprehensive income for the year (A+B)
Net Profit is attributable to:
Owners
Non-controlling interests
22
23
24
25
Other comprehensive income attributable to:
Owners
Non-controlling interests
Total comprehensive income attributable to:
Owners
Non-controlling interests
Earnings per equity share for profit attributable to owners:
Basic earnings per share
Diluted earnings per share
Significant accounting policies
Critical estimates and judgements
36
1
2
5,935.92
The above consolidated statement of Profit and Loss should be read in conjunction with the accompanying notes.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No. A13435]
Place: Mumbai
Date: May 2, 2017
6,024.45
Financial Statements
Other income
Total Income
Expenses
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, stock-in-trade and work-in progress
Excise duty
Employee benefit expenses
Depreciation and amortization expense
Other expenses
Finance costs
Total expenses
Profit before exceptional items, share of net profits of investments accounted for using equity
method and tax
Share of net profit/(loss) of joint ventures accounted for using the equity method
Profit before exceptional items and tax
Exceptional items
Profit before tax from continuing operations
Income tax expense
147
Equity Share Capital
12 (a)
12 (a)
Note
64.50
64.52
129.02
0.03
129.05
(r in Crore)
411.28
12(b)
-
2.82
408.46
408.46
0.49
407.97
Securities
premium reserves
12(b)
12(b)
12(b)
12(c)
12(c)
12(c)
12(b)
12(b)
12(b)
-
12(b)
12(b)
12(b)
12(b)
12(c)
12(c)
12(c)
Note
(508.62)
2,254.98
1,965.97
798.59
(0.96)
797.63
(502.43)
1,965.97
1,759.87
711.48
(2.95)
708.53
Retained
earnings
298.70
-
298.70
298.70
(64.51)
-
363.21
General
reserve
Place: Mumbai
Date: May 2, 2017
UDAY SHAH
Partner
Membership No. 46061
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
44.82
24.64
-
20.18
20.18
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
-
2.66
17.52
VIVEK KARVE
Chief Financial Officer
(723.72)
-
(723.72)
(723.72)
-
(723.72)
Weoma
reserve
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
(60.69)
7.68
-
(68.37)
(68.37)
(40.08)
-
(28.29)
Capital
reduction*
HARSH MARIWALA
Chairman
[DIN 00210342]
For and on behalf of the Board of Directors
7.62
4.02
(2.82)
6.42
6.42
3.46
-
2.96
Treasury
shares
Attributable to owners
Share based option
outstanding account
Reserves and surplus
* Adjustment pursuant to the scheme of Capital Reduction of MCCL (Refer note 12(c))
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Balance as at 1st April, 2016
Profit for the year
Other comprehensive Income for the year
Total comprehensive income for the year
Issue of equity share, net of transaction cost
Purchase/sale of treasury shares by the Trust during the year (net)
Income of the trust for the year
Gain/ (loss) transferred to Income Statement
Deferred Hedging Gain/ (loss) on hedging instruments
Deferred tax on hedge reserve
Employee stock option expense
Transactions with owners in their capacity as owners:
Dividends (including dividend distribution tax of Rs. 57.03 Crore)
Balance as at 31st March, 2017
Balance as at 1st April, 2015
Profit for the year
Other comprehensive income for the year
Total Comprehensive income for the year
Issue of equity share, net of transaction cost
Purchase/sale of treasury shares by the Trust during the year (net)
Income of the trust for the year
Employee stock option expense
Gain/ (loss) transferred to Income Statement
Deferred Hedging Gain/ (loss) on hedging instruments
Deferred tax on hedge reserve
Transactions with owners in their capacity as owners:
Issue of bonus shares
Dividends (including dividend distribution tax of Rs. 67 Crore)
Balance as at 31st March, 2016
Other Equity
As at 1st April, 2015
Changes in equity share capital
As at 31st March, 2016
Changes in equity share capital
As at 31st March, 2017
B. A.
1.46
35.20
(26.36)
(8.83)
16.69
16.69
(15.24)
(15.24)
67.02
(49.89)
(17.13)
33.46
33.46
(48.70)
(508.62)
(37.82) 2,196.63
(4.05) 1,888.35
798.59
(33.77)
(18.03)
(33.77)
780.56
7.68
24.64
35.20
(26.36)
(8.83)
4.02
(64.51)
(502.43)
(4.05) 1,888.35
Total
other
Equity
- 1,735.96
711.48
(4.05)
26.47
(4.05)
737.95
0.49
(40.08)
17.52
3.46
67.02
(49.89)
(17.13)
Foreign currency
translation reserve
Other reserves
Hedge
reserve
(13.45)
13.34
0.11
14.31
12.38
(0.01)
12.37
(11.88)
14.31
0.70
13.65
11.85
(0.01)
11.84
Noncontrolling
interests
(522.07)
2,209.97
1,902.66
810.97
(18.04)
792.93
7.68
24.64
35.20
(26.25)
(8.83)
4.02
1,749.61
723.33
26.46
749.79
0.49
(40.08)
17.52
3.46
67.02
(49.19)
(17.13)
(64.51)
(514.31)
1,902.66
Total
equity
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
148
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31st March, 2017
149
Year ended
31st March, 2017
Year ended
31st March, 2016
1,148.70
1,028.70
Depreciation, amortisation and impairment
90.30
94.86
Finance costs
16.58
20.62
Particulars
A
CASH FLOW FROM OPERATING ACTIVITIES
PROFIT BEFORE INCOME TAX
Adjustments for:
Share of net profit/(loss) of joint ventures accounted for using the equity method
0.53
Interest income from financial assets at amortised cost
(36.32)
(32.36)
Gain on sale of investments
(30.46)
(2.06)
Net Gain on disposal of property, plant and equipment
Gain on fair value of financial assets and investment
Profit on divestment of business
Dividend income from investment mandatorily measured at fair value through Profit and Loss
Employees stock option charge
Stock appreciation rights expense charge/ (reversal)
Provision for impaiment of investment
Provision for doubtful debts, advances, deposits and others
Operating Profit before working capital changes
Change in operating assets and liabilities:
(Increase)/ Decrease in inventories
(Increase)/ Decrease in trade receivables
(Increase)/ Decrease in other financials assets
(Increase)/ Decrease in other non-current assets
(2.77)
(18.56)
-
(9.54)
(1.39)
(9.62)
-
(25.59)
13.89
15.74
-
1.39
4.02
0.09
3.46
-
37.77
56.04
1,186.47
1,084.74
(327.88)
5.10
1.67
(0.22)
66.38
(76.10)
(4.19)
(5.75)
(Increase)/ Decrease in other current assets
17.98
(20.13)
Increase in trade payables
27.56
105.65
(14.03)
(16.24)
(Increase)/ Decrease in loans and advances and other bank balances
Increase/ (Decrease) in provisions
Increase in employee benefit obligations
Increase/ (Decrease) in other current liabilities
Increase/ (Decrease) in other financial liabilities
29.14
5.77
(20.43)
(3.15)
Changes in Working Capital
(278.49)
Income taxes paid (net of refunds)
(296.41)
Cash Generated from Operations
B
1.00
NET CASH INFLOW GENERATED FROM OPERATING ACTIVITIES
CASH FLOW FROM INVESTING ACTIVITIES
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
817.62
(87.09)
5.61
17.91
Payment for purchase of Inter-corporate deposits placed
Proceeds from redemtion of Inter-corporate deposits placed
Dividend income from investments measured at fair value through profit or loss
Interest received
NET CASH (OUTFLOW) / INFLOW FROM INVESTING ACTIVITIES
6.46
(19.72)
611.57
Effect of translation differences on Goodwill on consolidation
Investment in joint venture
14.31
1,065.03
10.57
Consideration received on sale of BCS
8.60
907.98
Effects of translation of differences on fixed assets
(Purchase) / Sale of investments (net)
(98.71)
(247.40)
(100.74)
14.33
0.77
1.49
(118.01)
-
14.38
(249.49)
(55.40)
-
25.59
(63.04)
(196.88)
(16.57)
220.50
34.03
(8.81)
(1.35)
-
32.36
Financial Statements
(r in Crore)
CONSOLIDATED CASH FLOW STATEMENT
150
for the year ended 31st March, 2017
(r in Crore)
Year ended
31st March, 2017
Particulars
C
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital (net of share issue expenses)
(Purchase) / Sale of Investment by WEOMA Trust (Net)
E
F
G
(13.34)
(11.11)
Finance charges paid
(17.19)
NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES
Effect of exchange difference on translation of foreign currency cash and cash equivalents
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C+D)
Cash and cash equivalents at the beginning of the financial year
Less: Cash and bank balances adjusted upon Sale of BCS
Cash and cash equivalents at end of the year (Refer note 6 (d))
(508.76)
(59.19)
18.32
93.16
-
33.97
As per our attached report of even date.
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No. A13435]
Place: Mumbai
Date: May 2, 2017
(20.89)
(502.28)
(600.99)
(33.77)
The above consolidated statement of Cash Flows should be read in conjunction with the accompanying notes.
UDAY SHAH
Partner
Membership No. 46061
(44.65)
(573.95)
The cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7) statement of cash flows.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
0.50
(22.56)
(67.01)
Dividends paid to company's shareholders
D
0.03
32.32
Other borrowings (repaid) / taken (net)
Increase / (decrease) in Minority interest
Year ended
31st March, 2016
(1.43)
79.06
4.22
93.16
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Marico Limited (herein after referred to as ‘the Company’),
headquartered in Mumbai, Maharashtra, India, together with
its subsidiaries is referred as ‘Marico’ or ‘Group’. Marico carries
on business in branded consumer products. In India, Marico
manufactures and markets products under the brands such as
Parachute, Parachute Advansed, Nihar, Nihar Naturals, Saffola,
Hair & Care, Revive, Mediker, Livon, Set-wet, etc. Marico’s
international portfolio includes brands such as Parachute,
Parachute Advansed, Fiancée, Hair Code, Caivil, Hercules, Black
Chic, Code 10, Ingwe, X-men, Thuan Phat etc.
•
defined benefit plan assets measured at fair value;
and
•
share-based payment liability measured at fair
value
b)
Principles of consolidation and equity accounting
i.
Subsidiaries
The acquisition method of accounting is used to
account for business combinations by the group.
The group combines the financial statements of the
parent and its subsidiaries line by line adding together
like items of assets, liabilities, equity, income and
expenses. Intercompany transactions, balances and
unrealised gains on transactions between group
companies are eliminated.
Note 1: Significant accounting policies:
This note provides a list of the significant accounting policies
adopted in preparation of these consolidated financial statements.
These policies have been consistently applied to all the years
presented unless otherwise stated.
The consolidated financial statements were approved for issue
by Board of Directors on 2nd May, 2017.
a)
Basis of preparation:
i. Compliance with IND AS:
ii.
These consolidated financial statements comply in all
material aspects with Indian Accounting Standards
(Ind AS) notified under section 133 of the Companies
Act, 2013 (the Act) read with rule 4 of the Companies
(Indian Accounting standards) Rules, 2015 & other
relevant provisions of the Act.
These consolidated financial statements for the year
ended 31st March, 2017 are the first financials with
comparatives prepared under Ind AS. For all periods
upto and including the year ended 31st March,
2016, the Group prepared its financial statements in
accordance with the generally accepted accounting
principles (hereinafter referred to as ‘Previous GAAP’)
used for its statutory reporting requirement in India
immediately before adopting Ind AS.
The date of transition to Ind AS is 1st April, 2015.
Refer Note 38 for the first time adoption exemptions
availed by the Group.
Reconciliations and explanations for the effect of
the transition from Previous GAAP to Ind AS on the
Group’s Consolidated Balance Sheet, Statement of
Profit and Loss and Statement of Cash Flows are
provided in note 38.
Historical cost convention:
The consolidated financial statements have been
prepared on a historical cost basis, except for the
following:
•
•
certain financial assets and liabilities (including
d e r i va t i ve i n s t r u m e n t s ) a n d co n t i n g e n t
consideration that are measured at fair value;
assets held for sale measured at lower of cost or
fair value less cost to sell;
ii.
iii.
iv.
Subsidiaries are all entities over which the group has
control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability
to affect those returns through its power to direct
the relevant activities of the entity. Subsidiaries are
fully consolidated from the date on which control is
transferred to the group. They are deconsolidated
from the date that control ceases.
Joint ventures
Interests in joint ventures are accounted for using
the equity method (see (iii) below), after initially being
recognised at cost in the consolidated balance sheet.
Equity method
Under the equity method of accounting, the
investments are initially recognised at cost and
adjusted thereafter to recognise the group’s share of
the post-acquisition profits or losses of the investee
in consolidated profit and loss, and the group’s share
of other comprehensive income of the investee in
consolidated other comprehensive income.
Dividends received or receivable from associates
and joint ventures are recognised as a reduction in
the carrying amount of the investment.
When the group’s share of losses in an equityaccounted investment equals or exceeds its interest
in the entity, including any other unsecured long-term
receivables, the group does not recognise further
losses, unless it has incurred obligations or made
payments on behalf of the other entity.
Changes in ownership interests
The group treats transactions with non-controlling
interests that do not result in a loss of control as
transactions with equity owners of the group. A
change in ownership interest results in an adjustment
between the carrying amounts of the controlling
and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between
the amount of the adjustment to non-controlling
Financial Statements
Back ground and operations
151
NOTES
152
To Consolidated Financial Statements for the year ended 31st March, 2017
interests and any consideration paid or received is
recognised within equity.
c)
Segment Reporting:
d)
Operating segments are reported in a manner consistent
with internal reporting provided to the Chief Operating
Decision Maker (CODM). The Managing Director & CEO is
designated as the CODM.
ii.
e)
Revenue recognition:
The Group recognizes revenue when the amount can be
reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria have
been met for each of the Group’s activities as described
below. The Group bases its estimates on historical results,
taking into consideration the type of customer, the type of
transaction and the specifics of each arrangement
Foreign currency transactions:
i.
Goodwill and fair value adjustments arising on the
acquisition of a foreign operation are treated as
assets and liabilities of the foreign operation and
translated at the closing rate.
iii)
Functional and presentation currencies:
Items included in the consolidated financial
statements of each of the Group’s entities are
measured using the currency of the primary
economic environment in which the entity operates
(‘the functional currency’). The consolidated
financial statements are presented in INR which is
the functional and presentation currency for Marico
Limited.
Transactions & Balances:
Foreign currency transactions are translated into the
functional currency at the exchange rates on the date
of transaction. Foreign exchange gains and losses
resulting from settlement of such transactions and
from translation of monetary assets and liabilities at
the year-end exchange rates are generally recognized
in the Statement Profit and Loss. They are deferred in
equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in the
statement of profit and loss, within finance costs. All
other foreign exchange gains and losses are presented
in the statement of profit and loss on a net basis.
Non-monetary foreign currency items are carried at
cost and accordingly the investments in shares of
foreign subsidiaries are expressed in Indian currency
at the rate of exchange prevailing at the time when
the original investments are made or fair values
determined.
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue
are inclusive of excise duty and net of returns, trade
allowances, rebates, value added taxes and amounts
collected on behalf of third parties.
i.
Timing of recognition: Sale of goods is recognized
when substantial risks and rewards of ownership are
passed to the customers, depending on individual
terms, and are stated net of trade discounts, rebates,
incentives, subsidy, sales tax and value added tax
except excise duty.
Measurement of revenue: Accumulated experience
is used to estimate and provide for discounts, rebates,
incentives & subsidies. No element of financing is
deemed present as the sales are made with credit
terms, which is consistent with market practice.
ii.
f)
Income recognition
i.
ii.
iii.
Group Companies:
The results and financial position of foreign
operations that have a functional currency different
from the presentation currency are translated into
the presentation currency as follows:
•
assets and liabilities are translated at the closing
rate as on that balance sheet date
•
income and expenses are translated at average
exchange rates, and
•
all resulting exchange differences are recognised
in other comprehensive income
When a foreign operation is sold, the associated
exchange differences are reclassified to profit or
loss, as part of the gain or loss on sale.
Sale of goods:
Revenue from services is recognized in the
accounting period in which the services are rendered.
Interest income from debt instruments is recognised
using the effective interest rate method. The effective
interest rate is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to the gross carrying amount
of a financial asset. When calculating the effective
interest rate, the Group estimates the expected
cash flows by considering all contractual terms of
the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
Dividends are recognised in profit or loss only when
the right to receive payment is established, it is
probable that the economic benefits associated with
the dividend will flow to the Group, and the amount of
the dividend can be measured reliably.
Revenue from royalty income is recognized on
accrual basis.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
h)
Government Grants:
Grants from the government are recognized at their fair
value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached
conditions.
Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to
compensate and reduce from corresponding cost.
Income from export incentives such as premium on sale
of import licenses, duty drawback etc. are recognized
on accrual basis to the extent the ultimate realization is
reasonably certain.
Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities
as deferred income and are credited to profit or loss on a
straight-line basis over the expected lives of the related
assets and presented within other operating income.
Income Tax:
i)
Income tax expense or credit for the period is the tax
payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction
adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences and to
unused tax losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the
company and its subsidiaries and associates operate
and generate taxable income. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject
to interpretation. It establishes provisions, where
appropriate, on the basis of amounts expected to be paid
to the tax authorities.
Deferred income tax is provided in full, using the Balance
Sheet method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply
when the related deferred income tax asset is realised or
the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in the Statement of
Profit and Loss, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively
Minimum Alternative Tax (MAT) credit, which is equal to the
excess of MAT (calculated in accordance with provisions
of Section 115JB of the Income tax Act, 1961) over normal
income-tax is recognized as an item in deferred tax asset
by crediting the Statement of Profit and Loss only when
and to the extent there is convincing evidence that the
Group will be able to avail the said credit against normal
tax payable during the period of fifteen succeeding
assessment years.
Property, plant and equipment:
Freehold land is carried at historical cost. All other items
of property, plant and equipment are stated at historical
cost, less accumulated depreciation/amortisation and
impairments, if any. Historical cost includes taxes,
duties, freight and other incidental expenses related to
acquisition and installation. Borrowing cost attributable
to acquisition, construction of qualifying assets are
capitalized until such time as the assets are substantially
ready for their intended use. Indirect expenses during
construction period, which are required to bring the asset
in the condition for its intended use by the management
and are directly attributable to bringing the asset to its
position, are also capitalized.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs
& maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Capital work-in-progress comprises cost of fixed assets
that are not yet ready for their intended use at the year
end.
Transition to IND AS
On transition to Ind AS, the Group has elected to continue
with the carrying value of all of its property, plant and
equipment recognised as at 1st April, 2015 measured as
per the previous GAAP and use that carrying value as the
deemed cost of the property, plant and equipment.
Depreciation and amortization:
Depreciation is calculated using the straight-line method
to allocate cost of property, plant and equipment, net of
residual values, over their estimated useful lives.
Financial Statements
g)
153
NOTES
154
To Consolidated Financial Statements for the year ended 31st March, 2017
As per technical evaluation of the Group, the useful life
considered for the following items is lower than the life
stipulated in Schedule II to the Companies Act, 2013:
Assets
Motor Vehicle – Motor Car, Bus and Lorries,
Motor Cycle, Scooter
Useful Life (Years)
5
Office equipment - Mobile and Communication
tools
Leasehold lands
Assets
Factory and office building
Furniture & fixtures (including leasehold improvements)
Vehicles
5 to 25
2 to 15
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in profit or loss within other gains/(losses).
Intangible Assets:
i
Goodwill:
Goodwill on acquisitions of subsidiaries is included in
intangible assets. It is not amortised but it is tested
for impairment annually or more frequently if events
or changes in circumstances indicate that it might
be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses arising on the
disposal of an entity are calculated after netting of
the carrying amount of Goodwill relating to the entity
sold, from the proceeds of disposal.
Goodwill is allocated to cash-generating units for
the purpose of impairment testing. The allocation is
made to those cash-generating units or groups of
cash-generating units that are expected to benefit
from the business combination in which the goodwill
arose.
Intangible assets with finite useful life:
Intangible assets with finite useful life are stated at
cost of acquisition, less accumulated depreciation/
amortisation and impairment loss, if any. Cost
includes taxes, duties and other incidental expenses
related to acquisition and other incidental expenses.
Amortisation is recognised in profit or loss on a
straight-line basis over the estimated useful lives of
respective intangible assets, but not exceeding the
useful lives given here under:
Assets
Computer software
Useful Life (Years)
3
iii.
Intangible assets with indefinite useful life:
iv.
Research & Development:
v.
k)
Investment property
i.
ii.
3 to 10
Depreciation on additions / deletions during the year is
provided from the month in which the asset is capitalized
up to the month in which the asset is disposed off.
2 to 15
Fixtures in leasehold premises are amortized over the
primary period of the lease or useful life of the fixtures
whichever is lower.
Useful Life
(Years)
Assets individually costing Rs. 25,000 or less are
depreciated fully in the year of acquisition.
6
Lease period
Depreciation in respect of assets of foreign subsidiaries
is provided on a straight line basis based on useful life of
the assets as estimated by the Management which are as
under:
Plant & Machinery
ii.
3
Extra shift depreciation is provided on “Plant” basis.
j)
2
Computer – Server and Network
Plant & Machinery – Moulds
Intangible assets with indefinite useful lives are
measured at cost and are not amortised, but are
tested for impairment annually or more frequently if
events or changes in circumstances indicate that it
might be impaired.
Capital expenditure on research and development is
capitalized and depreciated as per accounting policy
mentioned in para i & j above. Revenue expenditure is
charged off in the year in which it is incurred.
Transition to Ind AS:
On transition to Ind AS, the Group has elected to
continue with the carrying value of all of its intangible
assets recognised as at 1st April, 2015 measured as
per the previous GAAP and use that carrying value as
the deemed cost of intangible assets.
Property (land or a building-or part of a building-or both)
that is held (by the owner or by the lessee under a finance
lease) for long term rental yields or for capital appreciation
or both, rather than for:
use in the production or supply of goods or services
or for administrative purposes; or
sale in the ordinary course of business:
is recognized as Investment Property in the books
Investment property is measured initially at its
cost, including related transaction costs and where
applicable borrowing costs. Subsequent expenditure
is capitalized to the assets carrying amount only
when it is probable that future economic benefits
associated with the expenditure will flow to the Group
and the cost of the item can be measured reliably. All
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Depreciation is provided on all Investment Property
on straight line basis, based on useful life of the
assets determined in accordance with para “i” above.
cost is charged to the profit or loss over the lease
period so as to produce a constant periodic rate of
interest on the remaining balance of the liability for
each period.
The estimated useful lives, residual values and
depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
Transition to IND AS
l)
Non-current assets are classified as held for sale if their
carrying amount will be recovered principally through a
sale transaction rather than through continuing use and a
sale is considered highly probable. They are measured at
the lower of their carrying amount and fair value less costs
to sell, except for assets such as deferred tax assets,
assets arising from employee benefits, financial assets
and contractual rights under insurance contracts, which
are specifically exempt from this requirement.
An impairment loss is recognised for any initial or
subsequent write-down of the asset to fair value less
costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell an asset, but not
in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by
the date of the sale of the non-current asset is recognised
at the date of derecognition.
Non-current assets are not depreciated or amortised
while they are classified as held for sale.
ii.
n)
Investment & Other financial assets:
Non-Current Asset held for Sale:
m)
On transition to Ind AS, the Group has elected to
continue with the carrying value of all of its investment
properties recognised as at 1st April, 2015 measured
as per the previous GAAP and use that carrying value
as the deemed cost of investment properties.
Leases in which a significant portion of the risks
and rewards of ownership are not transferred to the
Group as lessee are classified as operating leases.
Payments made under operating leases (net of any
incentives received from the lessor) are charged to
profit or loss on a straight-line basis over the period
of the lease unless the payments are structured to
increase in line with expected general inflation to
compensate for the lessor’s expected inflationary
increase.
As a lessor
Lease income from operating leases where the Group
is a lessor is recognised in income on a straight-line
basis over the lease term unless the receipts are
structured to increase in line with expected general
inflation to compensate for the expected inflationary
cost increases. The respective leased assets are
included in the Balance Sheet based on their nature.
i. Classification:
The Group classifies its financial assets in the
following measurement categories:
•
•
Classification of debt assets will be driven by
the Group’s business model for managing the
financial assets and the contractual cash flow
characteristics of the financial assets.
For assets measured at fair value, gains and
losses will either be recorded in profit or loss or
other comprehensive income. For investments
in debt instruments, this will depend on the
business model in which the investment is held.
For investments in equity instruments, this
will depend on whether the Group has made
an irrevocable election at the time of initial
recognition to account for the equity investment
at fair value through other comprehensive
income.
Lease:
i.
As a leasee
Leases of property, plant and equipment where
the Group, as lessee, has substantially all the risks
and rewards of ownership are classified as finance
leases. The same is accounted at the lower of fair
value of the leased property or the present value of
the minimum lease payments. The corresponding
rental obligations, net of finance charges, are
included in borrowings or other financial liabilities
as appropriate. Each lease payment is allocated
between the liability and finance cost. The finance
those measured at amortised cost.
Non-current assets classified as held for sale are
presented separately from the other assets in the balance
sheet.
those to be measured subsequently at fair value
(either through other comprehensive income, or
through profit or loss), and
ii.
Measurement:
At initial recognition, the Group measures a
financial asset at its fair value plus, in the case
of a financial asset not at fair value through
profit or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
Financial Statements
other repairs and maintenance costs are expensed
when incurred. When part of an investment property
is replaced, the carrying amount of the replaced part
is derecognised.
155
NOTES
156
To Consolidated Financial Statements for the year ended 31st March, 2017
carried at fair value through profit or loss are
expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments
depends on the group’s business model
for managing the asset and the cash flow
characteristics of the asset.
•Amortised Cost: Assets that are held for
collection of contractual cash flows where
those cash flows represent solely payments of
principal and interest are measured at amortised
cost. A gain or loss on a debt investment that is
subsequently measured at amortised cost and is
not part of a hedging relationship is recognised
in profit or loss when the asset is derecognised
or impaired. Interest income from these financial
assets is included in finance income.
•Fair value through other comprehensive
income (FVOCI): Assets that are held for
collection of contractual cashflows & for selling
the financial assets, where the assets cash
flow represent solely payments of principal and
interest, are measured at fair value through other
comprehensive income (FVOCI). Movements
in the carrying amount are taken through
OCI, except for the recognition of impairment
gains or losses, interest revenue and foreign
exchange gains and losses which are recognised
in profit and loss. When the financial asset
is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified
from equity to profit or loss and recognised in
other gains/ (losses). Interest income from these
financial assets is included in other income.
•Fair value through profit or loss: Assets that
do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit
or loss. A gain or loss on a debt investment that
is subsequently measured at fair value through
profit or loss and is not part of a hedging
relationship is recognised in profit or loss and
presented net in the statement of profit and loss
within other gains/(losses) in the period in which
it arises. Interest income from these financial
assets is included in other income.
iii.
iv.
Impairment of financial assets:
The Group assesses if there is any significant increase
in credit risk pertaining to the assets and accordingly
creates necessary provisions, wherever required.
Derecognition of financial assets:
A financial asset is derecognised only when
•
the Group has transferred the rights to receive
the cash flows from the financial asset or
•
the Group retains the contractual rights to
receive the cash flows of the financial assets,
but assumes a contractual obligation to pay the
cash flows so received to one or more recipients
Where the entity has transferred an asset, the Group
evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset.
In such cases, the financial asset is derecognised.
Where the entity has not transferred substantially all
risks and rewards of ownership of the financial asset,
the financial asset is not derecognised.
Where the entity has neither transferred a financial
asset nor retains substantially all risk and rewards of
ownership of the financial asset, the financial asset is
decrecognised if the Group has not retained control
of the financial asset. Where the Group retains control
of the financial asset, the asset is continued to be
recognised to the extent of continuing involment in
the financial asset.
o)
Derivatives and hedging activities:
The Group designates certain derivatives as either:
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting
period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item
being hedged.
•
•
Equity instruments
The Group subsequently measures all equity
investments at fair value. Where the Group’s
management has elected to present fair value
gains and losses on equity investments in other
comprehensive income, there is no subsequent
reclassification of fair value gains and losses to
profit or loss. Dividends from such investments
are recognised in profit or loss as other income
when the company’s right to receive the dividend is
established.
hedges of the fair value of recognised assets or
liabilities or a firm commitment (fair value hedges)
hedges of a particular risk associated with the cash
flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges).
The Group documents at the inception of the hedging
transaction the relationship between hedging
instruments and hedged items, as well as its risk
management objective and strategy for undertaking
various hedge transactions. The Group also
documents its assessment, both at hedge inception
and on an ongoing basis, of whether the derivatives
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
The fair values of various derivative financial
instruments used for hedging purposes are disclosed
in Note 27. Movements in the hedging reserve in
shareholders’ equity are shown in Note 12(c). The
full fair value of a hedging derivative is classified as
a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months;
it is classified as a current asset or liability when the
remaining maturity of the hedged item is less than
12 months. Trading derivatives are classified as a
current asset or liability.
s)
Borrowings:
Borrowings are removed from the balance sheet when
the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred
until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment
for liquidity services and amortised over the period of the
facility to which it relates.
Cash flow hedge reserve
The effective part of the changes in fair value of hedge
instruments is recognized in other comprehensive
income, while any ineffective part is recognized
immediately in the statement of profit and loss.
p)
Inventories:
Work-in-progress, finished goods and stock-in-trade
(traded goods) are valued at lower of cost and net
realizable value.
q)
r)
Raw materials, packing materials, stores and spares are
valued at lower of cost and net realizable value.
By-products and unserviceable / damaged finished goods
are valued at estimated net realizable value.
Cost of raw materials and traded goods comprises cost
of purchases. Cost of work-in progress and finished
goods comprises direct materials, direct labour and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis of
normal operating capacity. Cost of inventories also
includes all other costs incurred in bringing the inventories
to their present location and condition. Cost is assigned
on the basis of weighted average method.
In case of Marico Middle East FZE costs of inventories are
ascertained on First In First Out basis instead of weighted
average basis, the impact of which is not material. Costs
of purchased inventory are determined after deducting
rebates and discounts.
Net realisable value is the estimated selling price in the
ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the
sale.
Trade Receivables:
Trade receivables are recognised initially at fair value
and subsequently measured at cost less provision for
impairment.
Trade and other payables:
These amounts represent liabilities for goods and services
provided to the Group prior to the end of financial year
t)
Borrowing Cost:
Investment income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation.
General and specific borrowing costs that are directly
attributable to the acquisition or construction of a
qualifying asset are capitalised during the period of time
that is required to complete and prepare the asset for its
intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready
for their intended use or sale.
u)
Other borrowing costs are expensed in the period in which
they are incurred.
Employee Benefits:
i.
Short term obligations:
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled
wholly within 12 months after the end of the period
in which the employees render the related service
are recognised in respect of employees’ services
upto the end of the reporting and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
Financial Statements
which are unpaid. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months after the reporting period.
that are used in hedging transactions have been
and will continue to be highly effective in offsetting
changes in fair values or cash flows of hedged items.
157
NOTES
158
To Consolidated Financial Statements for the year ended 31st March, 2017
ii.
iii.
iv.
v.
vi.
Superannuation Fund:
The Group makes contribution to the Superannuation
Scheme, a defined contribution scheme, administered
by insurance companies. The Group has no obligation
to the scheme beyond its monthly contributions.
Provident fund:
Provident fund contributions are made to a trust
administered by the Group in India. The Group’s
liability is actuarially determined (using the Projected
Unit Credit method) at the end of the year and any
shortfall in the fund balance maintained by the Trust
set up by the Company is additionally provided for
in India. Actuarial losses and gains are recognized
in other comprehensive income and shall not be
reclassified to the Statement of Profit and Loss in a
subsequent period.
Gratuity:
Liabilities with regard to the gratuity benefits payable
in future are determined by actuarial valuation at each
Balance Sheet date using the Projected Unit Credit
method and contributed to Employees Gratuity Fund.
Actuarial gains and losses arising from changes
in actuarial assumptions are recognized in other
comprehensive income and shall not be reclassified
to the Statement of Profit and Loss in a subsequent
period.
Leave encashment / Compensated absences:
The Group provides for the encashment of leave
with pay subject to certain rules. The employees are
entitled to accumulate leave subject to certain limits,
for future encashment / availment. The liability is
provided based on the number of days of unutilized
leave at each Balance Sheet date on the basis of an
independent actuarial valuation. Actuarial gains and
losses arising from changes in actuarial assumptions
are recognised in the Statement of Profit and Loss.
•
including any market performance conditions
(e.g. the entity’s share price)
•
excluding the impact of any service and nonmarket performance vesting conditions (e.g.
profitability, sales growth targets and remaining
an employee of the entity over a specified time
period), and
including the impact of any non-vesting
conditions (e.g. the requirement for employees
to save or holding shares for a specific period
of time).
The total expense is recognised over the vesting
period, which is the period over which all of the
specified vesting conditions are to be satisfied.
vii. Employee Stock Appreciation Rights Scheme
v)
Provisions and Contingent Liabilities:
Provisions are recognised when the Group has a present
legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required
to settle the obligation and the amount can be reliably
estimated. Provisions are not recognised for future
operating losses.
Employee Stock Option Plan:
The fair value of options granted under the Group’s
employee stock option scheme (excess of the fair
value over the exercise price of the option at the
date of grant) is recognised as an employee benefit
expense with a corresponding increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted.
•
Liability for the Group’s Employee Stock Appreciation
Rights (STAR), granted pursuant to the Group’s
Employee Stock Appreciation Rights Plan, is
measured, initially and at the end of each reporting
period until settled, at the fair value of the STARs,
by applying an option pricing model, be and is
recognized as employee benefit expense over the
relevant service period. The liability is presented as
employee benefit obligation in the Balance Sheet.
Contingent Liabilities are disclosed in respect of possible
obligations that arise from past events but their existence
will be confirmed by the occurrence or non-occurrence
of one or more uncertain future events not wholly within
the control of the Group or where any present obligation
cannot be measured in terms of future outflow of
resources or where a reliable estimate of the obligation
cannot be made.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting
period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability. The increase in the provision due
to the passage of time is recognised as interest expense.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as
a whole. A provision is recognized even if the likelihood
of an outflow with respect to any one item included in the
same class of obligations may be small.
A contingent asset is disclosed, where an inflow of
economic benefits is probable. An entity shall not
recognise a contingent asset unless the recovery is
virtually certain.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Cash and Cash Equivalents:
For the purpose of presentation in the Statement of Cash
Flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other shortterm, highly liquid investments with original maturities of
three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant
risk of changes in value.
x)
Impairment of assets:
y)
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events
or changes in circumstances indicate that they might
be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which
asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is higher of an asset’s fair value
less cost of disposal and value in use. For the purposes
of assessing impairment,assets are grouped at the lowest
levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating
units). Non financial assets other than goodwill that
suffered impairment are reviewed for possible reversal of
the impairment at the end of each reporting period.
ab)
i.
Basic earnings per share: Basic earnings per share is calculated by dividing:
•
the profit attributable to owners of the Group
•
by the weighted average number of equity shares
outstanding during the financial year, adjusted for
bonus elements in equity shares issued during
the year and excluding treasury shares.
Diluted earnings per share: Diluted earnings per
share adjusts the figures used in the determination of
basic earnings per share to take into account:
ii.
•
the after income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and
•
the weighted average number of additional
equity shares that would have been outstanding
assuming the conversion of all dilutive potential
equity shares.
z)
Contributed Equity:
Incremental costs directly attributable to the issue of new
Equity shares are classified as equity.
Dividend:
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the reporting period but not distributed at the end of the
reporting period.
Rounding off:
All amounts disclosed in the financial statement and
notes have been rounded off to the nearest Crore, unless
otherwise stated
ac) Amendments to Ind AS 7, ‘Statement of cash flows’ on
disclosure initiative: Earnings Per Share:
aa)
shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
ad)
The amendment to Ind AS 7 introduced an additional
disclosure that will enable users of consolidated financial
statements to evaluate changes in liabilities arising
from financing activities. This includes changes arising
from cash flows (e.g. drawdowns and repayments of
borrowings) and non-cash changes (i.e. changes in fair
values), changes resulting from acquisitions and disposals
and effect of foreign exchange differences. Changes in
financial assets must be included in this disclosure if the
cash flows were, or will be, included in cash flows from
financing activities. This could be the case, for example,
for assets that hedge liabilities arising from financing
liabilities. The Group is currently assessing the potential
impact of this amendment. These amendments are
mandatory for the reporting period beginning on or after
1st April, 2017.
Amendments to Ind AS 102, ‘Share based payments’
The amendment to Ind AS 102 clarifies the measurement
basis for cash settled share-based payments and the
accounting for modifications that change an award from
cash-settled to equity-settled. It also introduces an
exception to the principles in Ind AS 102 that will require
an award to be treated as if it was wholly equity-settled,
where an employer is obliged to withhold an amount for
the employee’s tax obligation associated with a sharebased payment and pay that amount to the tax authority.
The Group is currently assessing the potential impact of
this amendment. These amendments are mandatory for
the reporting period beginning on or after 1st April, 2017.
The group intends to adopt the amendments when it
becomes effective. There are no other standards or
amendments that are not yet effective and that would be
expected to have a material impact on the Group in the
current or future reporting periods and on foreseeable
future transactions.
Financial Statements
w)
159
NOTES
160
To Consolidated Financial Statements for the year ended 31st March, 2017
2
Critical Estimates and Judgements
The preparation of financial statements requires the use
of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to
exercise judgement in applying the group's accounting
policies. This note provides an overview of the areas that
involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due
to estimates and assumptions turning out to be different
than those originally assessed. Detailed information about
each of these estimates and judgements is included in
relevant notes together with information about the basis
of calculation for each affected line item in the financial
statements.
The preparation of the financial statements in conformity
with GAAP requires the Management to make estimates
and assumptions that affect the reported balances
of assets and liabilities and disclosures relating to
contingent assets and liabilities as at the date of the
financial statements and reported amounts of income
and expenses during the period. These estimates
and associated assumptions are based on historical
experience and management’s best knowledge of current
events and actions the Group may take in future.
(a)
(b) Estimation of defined benefit obligations (Note 15)
(d) Estimated impairment of intangible assets with
indefinite useful life (Note 5)
Impairment of financial assets (including trade
receivable) (Note : 29)
(e) Estimation of provisions and contingencies (Note 14)
(a) Impairment of financial assets (including trade
receivable)
Allowance for doubtful receivables represent the
estimate of losses that could arise due to inability
of the Customer to make payments when due.
These estimates are based on the customer ageing,
customer category, specific credit circumstances
and the historical experience of the group as well
as forward looking estimates at the end of each
reporting period.
(b) Estimation of defined benefit obligations
The liabilities of the group arising from employee
benefit obligations and the related current service
cost, are determined on an actuarial basis using
various assumptions Refer (note 15) for significant
assumption used. Taxes recognized in the financial statements reflect
management’s best estimate of the outcome based
on the facts known at the balance sheet date. These
facts include but are not limited to interpretation
of tax laws of various jurisdictions where the group
operates. Any difference between the estimates and
final tax assessments will impact the income tax as
well the resulting assets and liabilities.
(d) Estimated impairment of Goodwill and intangible
assets with indefinite useful life
Impairment testing for Goodwill & intangible assets
with indefinite useful life is done at least once annually
and upon occurrence of an indication of impairment.
The recoverable amount of a cash generating
unit (CGU) is determined based on value-in-use
calculations which require the use of assumptions.
Goodwill with indefinite useful life held in Vietnam
and South Africa business, are considered significant
CGUs in terms of size and sensitivity to assumptions
used. No other CGUs are considered significant in
this respect.
Particulars
Period of Cash flow projections
Avg Sales Growth (%)
Avg Gross Margins (%)
Terminal Sales Growth (%)
(c) Estimation of current tax expenses and payable (Note
26)
Information about critical estimates and assumptions that
have a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities are included
in the following notes:
(c) Estimation of current tax expenses and payable
Pre- tax discount rate
Vietnam
South Africa
14%
10%
10 years
10 years
48%
2%
13%
3%
10%
The growth rates and margins used to make estimate
future performance are based on past performance
and our estimates of future growths and margins
achievable in the CGUs. Pre-tax discount rates reflect
specific risks relating to the relevant segments and
geographies in which the CGUs operate.
(e) Estimation of provisions and contingencies
31%
Provisions are liabilities of uncertain amount or timing
recognised where a legal or constructive obligation
exists at the balance sheet date, as a result of a past
event, where the amount of the obligation can be
reliably estimated and where the outflow of economic
benefit is probable. Contingent liabilities are possible
obligations that may arise from past event whose
existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future
events which are not fully within the control of the
group. The group exercises judgement and estimates
in recognizing the provisions and assessing the
exposure to contingent liabilities relating to pending
litigations. Judgement is necessary in assessing the
likelihood of the success of the pending claim and to
quantify the possible range of financial settlement.
Due to this inherent uncertainty in the evaluation
process, actual losses may be different from originally
estimated provision.
0.56
0.72
(0.05)
1.23
30.91
16.65
31.73
17.54
32.29
0.14
(0.29)
32.14
0.56
0.56
-
17.54
(0.03)
(0.86)
16.65
32.26
0.15
(0.12)
32.29
16.60
0.14
0.68
0.12
17.54
Leasehold
land
0.18
0.95
1.13
235.62
14.20
14.46
(1.00)
27.66
265.49
4.92
(0.55)
(5.45)
264.41
0.18
0.18
251.11
14.24
(0.04)
14.20
260.59
5.37
(0.54)
0.07
265.49
Buildings
6.14
(0.95)
0.13
5.32
240.97
57.78
61.58
(2.95)
(3.81)
112.60
271.82
99.97
(4.70)
(8.20)
358.89
6.14
6.14
207.90
59.08
(0.97)
(0.33)
57.78
230.60
42.53
(1.57)
0.26
271.82
Plant and
machinery
0.52
0.46
0.98
7.55
2.38
3.52
(0.15)
(0.13)
5.62
12.09
2.74
(0.43)
(0.25)
14.15
9.71
2.40
(0.01)
(0.01)
2.38
9.52
2.16
(0.02)
0.03
0.40
12.09
Furniture and
fittings
1.64
0.55
0.77
(0.11)
(0.18)
1.03
1.65
1.89
(0.29)
(0.58)
2.67
1.10
0.63
(0.06)
(0.02)
0.55
1.12
0.75
(0.15)
(0.07)
1.65
Vehicles
0.05
(0.03)
0.00
0.02
3.75
5.73
3.25
(0.06)
(0.13)
8.79
10.21
2.70
(0.11)
(0.24)
12.56
0.05
0.05
4.43
5.73
5.73
4.76
5.41
(0.01)
0.05
10.21
Office
Equipment
10.10
1.04
1.04
0.82
10.32
11.14
0.82
-
1.22
(0.40)
0.82
Leasehold
improvements
6.37
0.49
0.59
7.45
547.19
81.20
85.34
(3.27)
(5.30)
157.97
611.91
122.68
(6.11)
(15.87)
712.61
6.37
6.37
524.34
82.64
(1.04)
(0.40)
81.20
556.67
56.36
(2.29)
1.17
611.91
Total
Financial Statements
11.16
-
36.73
93.45
(118.84)
(0.18)
11.16
36.73
-
-
3.04
91.64
(58.00)
0.05
36.73
(r in Crore)
CWIP
(i) Property, plant and equipment pledged as security
First ranking pari passu charge over all current and future plant and machinery for External Commercial Borrowings loan as on 31st March, 2016 and 1st April, 2015 (Refer note 13(a)).
(ii) Impairment loss
Impairment provision mainly pertains to building, plant & machinery, furniture & fittings and office equipment which are lying idle, damaged and having no future use.
(iii) Contractual obligations
Refer to Note 34 for disclosure of contractual commitments for acquisition of property, plant and equipment.
(iv) Capital work-in-progress
Capital work-in-progress mainly comprises new manufacturing units set up in Guwahati, India (North Eastern Region).
(v) Leased assets
Gross carrying amount of leasehold land represents amounts paid under lease agreements which are due for renewal in the years ranging from 2070 to 2109. In one case where the lease is expiring in
2070, the company has an option to purchase the property.
Year ended 31st March, 2017
Gross carrying amount
Opening gross carrying amount
Additions
Disposals / transfers
Exchange Differences
Adjustments
Closing gross carrying amount
Accumulated depreciation
Opening accumulated depreciation
Depreciation charge during the year
Disposals / transfers
Exchange Differences
Closing accumulated depreciation
Impairment loss
Opening Impairment Loss
Impairment charge/(reversal) during the year
Exchange Differences
Closing Impairment loss
Net carrying amount
Year ended 31st March, 2016
Gross carrying amount
Deemed Cost as at 1st April, 2015
Additions
Disposals / transfers
Exchange Differences
Adjustments
Closing gross carrying amount
Accumulated depreciation
Depreciation charge during the year
Disposals / transfers
Exchange Differences
Closing accumulated depreciation
Impairment loss
Impairment charge/(reversal) during the year
Exchange Differences
Closing impairment loss
Net carrying amount
Freehold land
To Consolidated Financial Statements for the year ended 31st March, 2017
Property, Plant And Equipment
Particulars
3
NOTES
161
NOTES
162
To Consolidated Financial Statements for the year ended 31st March, 2017
4
Investment Properties
(r in Crore)
Particulars
As at
31st March, 2017
As at
31st March, 2016
Opening gross carrying amount/Deemed cost
31.41
17.99
Closing gross carrying amount
31.41
31.41
Gross carrying amount
Additions (Refer note (v) below)
-
Accumulated Depreciation
0.74
Closing accumulated depreciation
1.43
0.74
29.98
30.67
Rental income
1.20
0.91
Profit from investment properties before depreciation
1.05
0.71
Depreciation charge during the year*
0.69
Net carrying amount
(i)
* Includes exchange difference
Amounts recognised in profit or loss for investment properties
Direct operating expenses for property that generated rental income
0.15
Depreciation
(0.43)
Profit from investment properties
(ii)
0.62
-
0.74
0.20
(0.43)
0.28
Leasing arrangements
Investment properties are leased to tenants under long-term operating leases with rentals payable monthly. Minimum
lease payments receivable under non-cancellable operating leases of investment properties are as follows:
Particulars
Within one year
Later than one year but not later than 5 years
Later than 5 years
13.42
(iii) Fair value
As at
31st March, 2016
As at
1st April, 2015
1.36
2.56
3.47
As at
31st March, 2017
As at
31st March, 2016
1.20
-
0.91
-
Particulars
Investment properties
(r in Crore)
As at
31st March, 2017
58.09
56.05
0.64
-
(r in Crore)
As at
1st April, 2015
29.33
Estimation of fair value
The group obtains independent valuations for its investment properties at least annually. The best evidence of fair value
is current prices in an active market for similar properties.
(iv) The fair values of investment properties have been determined by independent valuer who holds recognised and relevant
professional qualification. The main inputs used are rental growth rates, expected vacancy rates, terminal yields and
discount rates based on comparable transactions and industry data. All resulting fair value estimates for investment
properties are included in level 3.
(v) During the year 2015-16 building appearing as asset held for disposal of net carrying value of Rs.12.74 Crore (Deemed
cost of Rs. 12.96 Crore less depreciation of Rs. 0.22 Crore) has been reclassified as investment property.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Other Intangible assets
Particulars
Year ended 31st March, 2016
Gross carrying amount
Deemed cost as at 1st April, 2015
Additions
Disposals
Exchange differences
Closing gross carrying amount
Accumulated amortisation
Amortisation charge for the year
Disposals
Exchange differences
Closing accumulated amortisation
Closing net carrying amount
Year ended 31st March, 2017
Opening gross carrying amount
Additions
Disposals
Exchange differences
Closing gross carrying amount
Accumulated amortisation
Amortisation charge for the year
Disposals
Computer software
Total
Goodwill
23.69
6.41
30.10
489.15
-
(1.86)
4.47
-
0.11
4.47
-
(1.75)
8.21
21.83
10.99
32.82
497.36
0.01
4.07
4.08
-
-
0.01
0.01
-
0.01
-
4.08
-
4.09
-
-
21.82
6.91
28.73
497.36
21.83
10.99
32.82
497.36
-
-
-
0.22
0.86
2.35
(0.12)
2.57
0.74
22.91
13.22
36.13
0.01
4.08
4.09
0.22
-
3.81
-
4.03
-
Exchange differences
(0.02)
(0.05)
(0.07)
Closing net carrying amount
22.70
5.38
28.08
Closing accumulated amortisation
(r in Crore)
Trademarks and copyrights
(refer note (i), (ii) and (iii)
below )
0.21
7.84
8.05
-
(17.91)
479.45
-
-
-
-
479.45
(i)
During the year ended 31st March, 2007, the Company carried out financial restructuring scheme (‘Scheme’) under the
relevant provisions of the Companies Act, 1956 which was approved by the shareholders on 8th February , 2007 and
subsequently by the Hon’ble High Court vide its order dated 23rd March, 2007. In terms of the Scheme, the Company
adjusted the carrying value of Rs. 448.15 Crore of intangible assets such as trademarks, copyrights, business and
commercial rights as on 31st January, 2007 and related deferred tax adjustment of Rs. 139.06 Crore (net adjustment
of Rs. 309.09 Crore) against the balance in Securities Premium Reserve of Rs. 129.09 Crore and Capital Redemption
Reserve of Rs. 180 Crore.
(ii)
(iii)Trademarks of Rs 18.56 Crore as at 31st March, 2017 (Rs. 18.56 Crore as at 31st March, 2016 and as at 1st April, 2015)
are pending registration/ recording in the name of the Company, in certain countries.
During the year ended 31st March, 2014, Capital Reduction scheme pertaining to Marico Consumer Care Limited (“MCCL”)
for adjustment of intangible assets aggregating Rs. 723.72 Crore, was duly approved and given effect to.
Financial Statements
5
163
NOTES
164
To Consolidated Financial Statements for the year ended 31st March, 2017
6(a)Investments
Particulars
Non current investment
Equity instruments
In others
Intercorporate deposits
Bonds
Government securities
Mutual funds
Current investments
Intercorporate deposits
Debentures
Mutual funds
Government or trust securities
Total Investments
Non current investment
Investment in equity instruments (fully paid-up)
In others
Quoted at FVPL
Nil (31st March, 2016: 17,102, 1st April, 2015: 29,648) equity shares of Kaya Limited
Unquoted at cost FVPL
136,500 (31st March, 2016 : Nil, 1st April, 2015 : Nil) equity shares of Rs. 10 each of Clover
energy private limited
Total (equity instruments)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
0.14
15.77
24.78
0.01
17.71
58.41
1.47
24.78
0.01
16.32
42.58
4.52
24.78
0.01
5.60
34.91
131.62
15.94
383.97
1.97
116.16
348.27
5.36
60.76
239.85
-
533.50
469.79
300.61
591.91
512.37
335.52
-
1.47
4.52
0.14
-
-
0.14
1.47
4.52
2.96
2.96
2.96
Indian Railway Finance Corporation
21,751 (31st March, 2016 : 21,751, 1st April, 2015 : 21,751) Secured, Redeemable, Tax
free Non-convertible Bonds , 8.00% , face value of Rs. 1,000/- each, redeemable on 23rd
February, 2022.
2.26
2.26
2.26
National Highways Authority of India
24,724 (31st March, 2016 : 24,724, 1st April, 2015 : 24,724) Secured, Redeemable, Tax
free Non-convertible Bonds , 8.20% , face value of Rs. 1,000/- each, redeemable on 25th
January, 2022.
2.57
2.57
2.57
Rural Electrification Corporation Limited
61,238 (31st March, 2016 : 61,238, 1st April, 2015 : 61,238) Secured, Redeemable, Tax
free Non-convertible Bonds , 8.12% , face value of Rs. 1,000/- each, redeemable on 29th
March, 2027.
6.50
6.50
6.50
Rural Electrification Corporation Limited
50 (31st March, 2016 : 50, 1st April, 2015 : 50) Secured, Redeemable, Tax free Non-convertible
Bonds , 8.46% , face value of Rs. 1,000,000/- each, redeemable on 29th August, 2018.
5.25
5.25
5.25
Housing & Urban Development Corporation Ltd
50 (31st March, 2016 : 50, 1st April, 2015 : 50) Secured, Redeemable, Tax free Non-convertible
Bonds , 8.56% , face value of Rs. 1,000,000/- each, redeemable on 2nd September, 2028.
Total investment in Bonds
5.24
5.24
5.24
24.78
24.78
24.78
Investment in bonds (at amortised cost)
Quoted
Power Finance Corporation Limited
28,479 (31st March, 2016 : 28,479, 1st April, 2015 : 28,479) Secured, Redeemable, Tax free
Non-convertible Bonds, 8.20% , face value of Rs. 1,000/- each, redeemable on 1st February,
2022.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
165
As at
31st March, 2016
As at
1st April, 2015
Investment in government securities at amortised cost
Unquoted
National Savings Certificates (Deposit with government authorities)
0.01
0.01
0.01
Total
0.01
0.01
0.01
11.13
10.24
-
DHFL Pramerica Fixed Maturity Plan Series 62 - Regular Plan - Growth
41,25,148 (31st March, 2016 : 41,25,148, 1st April, 2015 : 20,000,000) units of Rs. 10 each
fully paid
5.29
4.89
4.50
Reliance Fixed Horizon Fund-XXVI-Series 2-Growth Plan
1,000,000 (31st March, 2016 : 1,000,000, 1st April, 2015 : 1,000,000) units of Rs. 10 each
fully paid
1.29
1.19
1.10
Total investment in mutual funds
17.71
16.32
5.60
Aggregate amount of quoted investments
Market value/ Net asset value of quoted investments
Aggregate amount of unquoted investments
42.49
58.39
0.15
42.57
43.09
0.01
34.90
35.12
0.01
15.94
-
-
15.94
-
-
-
-
8.79
-
15.17
-
-
-
7.76
-
-
4.26
Birla Sunlife Floating Rate Long Term -Growth-Regular
1,022,046 (31st March, 2016 : 275,258, 1st April, 2015 : 304,582) Units of Rs. 100 each
fully paid
20.32
5.01
5.10
Birla Sun Life Savings Fund - Growth-Regular Plan
1,043,788 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 100 each fully paid
33.26
-
-
DHFL Pramerica Low Duration Fund - Growth
Nil (31st March, 2016 : 10,371,654, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
-
21.18
-
Particulars
Investment in mutual funds at FVPL
Quoted
Reliance Fixed Horizon Fund-XXIX-Series 16-Growth Plan
10,000,000 (31st March, 2016 : 10,000,000, 1st April, 2015 : Nil) units of Rs. 10 each fully paid
Current investments
Investment in debentures at amortised cost
Quoted
Kotak Mahindra Prime Ltd
150 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Unsecured, Non convertible debentures face
value of Rs.1,000,000 each
Total investment in bonds
Investment in mutual funds at FVPL
Quoted
LIC Nomura MF Fixed Matuirity Plan Series 77-396 Days-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 80,00,000) units of Rs. 10 each fully paid
ICICI Prudential FMP Series 78-95 Days-Plan K-Cumulative
Nil (31st March, 2016 : 15,000,000, 1st April, 2015 : Nil) units of Rs. 10 each fully paid
Unquoted
Axis Treasury Advantage Fund - Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 50,053) Units of Rs. 1,000 each fully paid
Birla Sunlife Cash Plus -Growth-Regular
Nil (31st March, 2016 : Nil, 1st April, 2015 : 190,148) Units of Rs. 100 each fully paid
Financial Statements
(r in Crore)
As at
31st March, 2017
NOTES
166
To Consolidated Financial Statements for the year ended 31st March, 2017
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
HDFC Liquid Fund - Growth
Nil (31st March, 2016 : 16,801, 1st April, 2015 : 7,674,464) Units of Rs. 1000 each fully paid
-
5.01
21.16
HDFC Cash Management Fund-Savings Plan-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,897,404) Units of Rs. 10 each fully paid
-
-
5.54
28.21
25.53
-
HDFC Banking and PSU Debt Fund-Reg-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 :1,813,187) Units of Rs. 10 each fully paid
-
-
2.00
HDFC Short Term Plan - Regular Plan - Growth
8,277,730 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
26.83
-
-
ICICI Prudential Money Market Fund -Regular Plan -Growth
601,824 (31st March, 2016 : Nil, 1st April, 2015 : 1,036,048) units of Rs. 100 each fully paid
13.50
-
20.02
ICICI Prudential Ultra Short Term - Growth
7,140,093 (31st March, 2016 : 9,948,137, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
24.36
15.23
-
IDFC Ultra Short Term Fund -Growth-Regular Plan
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,301,391) Units of Rs. 10 each fully paid
-
-
2.54
IDFC Money Manager Fund-Treasury Plan-Growth
Nil (31st March, 2016 : 8,045,461, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
-
19.04
-
Kotak Liquid Scheme Plan A-Growth
Nil (31st March, 2016 : 18,754, 1st April, 2015 : 70,607) Units of Rs. 1,000 each fully paid
-
5.76
20.03
38.02
25.25
-
-
10.68
-
1.42
-
-
L&T Ultra Short Term Fund-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,011,382) units of Rs. 10 each fully paid
-
-
2.29
Principal Debt Opportunities Fund Corporate Bond Plan-Regular Plan Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 47,877) Units of Rs. 1,000 each fully paid
-
-
10.29
Reliance Liquid Fund-Treasury Plan-Growth
58,368 (31st March, 2016 : 4,696, 1st April, 2015 : 76,423) Units of Rs. 1,000 each fully paid
23.08
1.73
26.03
Reliance Medium Term Fund-Growth
2,120,390 (31st March, 2016 : 7,986,353, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
7.24
25.06
-
Reliance Short Term Fund-Growth
5,355,039 (31st March, 2016 : 5,355,039, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
16.50
15.14
-
Religare Invesco Ultra Short Term Fund-Growth
53,098 (31st March, 2016 : Nil, 1st April, 2015 : 56,982) Units of Rs. 1,000 each fully paid
11.47
-
10.97
Religare Invesco Credit Opportunities Fund-Growth
236,227 (31st March, 2016 : 149,408, 1st April, 2015 : 60,034) Units of Rs. 1,000 each fully paid
43.85
25.84
9.56
Particulars
DWS Treasury Fund -Cash-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,001,013) Units of Rs. 100 each fully paid
HDFC Corporate Debt Opportunities Fund - Regular - Growth
20,803,342 (31st March, 2016 : 20,803,342, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
Kotak Bond (Short Term) - Growth
12,368,951 (31st March, 2016 : 8,959,674, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
LIC Nomura Liquid Fund-Growth
Nil (31st March, 2016 : 38,956, 1st April, 2015 : Nil) Units of Rs. 1000 each fully paid
LIC MF Savings Plus Fund - Regular Growth Plan-St-Gp
571,671 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
-
-
15.02
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
167
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Religare Invesco Medium Term Bond Fund-Growth
Nil (31st March, 2016 : 70,172, 1st April, 2015 : Nil) Units of Rs. 1,000 each fully paid
-
10.70
-
SBI Magnum Insta Cash -Reg Plan-Growth
Nil (31st March, 2016 : 58,764, 1st April, 2015 : 64,792) Units of Rs. 1,000 each fully paid
-
15.09
20.02
SBI Treasury Advantage Fund-Regular Plan-Growth
Nil (31st March, 2016 : 181,028, 1st April, 2015 : Nil) Units of Rs. 1,000 each fully paid
-
30.37
-
Templeton India TMA-SIP-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 16,797) Units of Rs. 1,000 each fully paid
-
-
3.51
Baroda Pioneer Treasury Advantage Fund- Plan A-Growth
197,177 (31st March, 2016 : 187,598, 1st April, 2015 : Nil) units of Rs. 1,000 each fully paid
37.38
32.60
-
JM Money Manager Fund-Super Plus Plan-Bonus Option-Bonus Units
3,748,072 (31st March, 2016 : 3,748,072 , 1st April, 2015 : 3,748,072) units of Rs. 10 each
fully paid
5.24
4.85
4.47
JM Money Manager Fund-Super Plan-Bonus Option-Bonus Units
4,524,192 (31st March, 2016 : 4,524,192, 1st April, 2015 : 4,524,192) units of Rs. 10 each
fully paid
5.83
5.44
5.03
-
-
20.47
2.64
2.49
2.30
Birla Sun Life Floating Rate Fund-Short Term Plan-Growth
Nil (31st March, 2016 : Nil, 1st April. 2015 : 551,505) units of Rs. 100 each fully paid
-
-
10.27
LIC Nomura MF Liquid Fund - Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 9,550) units of Rs. 1,000 each fully paid
-
-
2.42
Tata Short Term Bond Fund Regular Plan - Growth
999,164, (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 1000 each fully paid
3.05
-
-
UTI-Short Term Income Fund- Institutional Option - Growth
2,273,863 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
4.53
-
-
33.74
31.10
-
3.50
-
-
Total
Investments in government or trust securities at amortised cost
Unquoted
Investments in government or trust securities
Total
383.97
348.27
239.85
1.97
1.97
5.36
5.36
-
Total Current Investments
385.94
353.63
239.85
15.94
15.17
8.79
385.93
338.46
231.06
Particulars
JP Morgan India Treasury Fund-SIP-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 11,140,952) units of Rs. 10 each fully paid
Edelweiss Liquid Fund - Super IP - Gr (Formerly known as JP Morgan India Liquid FundSIP-Growth)
1,269,009 (31st March, 2016 : 1,269,009, 1st April, 2015 : 1,269,009) units of Rs. 10 each
fully paid
UTI Floating Rate Fund-STP-Growth
127,081 (31st March, 2016 : 127,081, 1st April, 2015 : Nil) units of Rs. 1000 each fully paid
UTI Money Market - IP - Growth
19,238 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 1000 each fully paid
Aggregate amount of quoted investments
Market value/ Net asset value of quoted investments
Aggregate amount of unquoted investments
15.94
15.17
8.79
Financial Statements
(r in Crore)
NOTES
168
To Consolidated Financial Statements for the year ended 31st March, 2017
6(b) Trade receivables
Particulars
Trade receivables
Less: Allowance for doubtful debts
As at
31st March, 2016
(3.02)
(3.39)
250.01
255.48
(r in Crore)
As at
1st April, 2015
179.91
(3.16)
Total receivables
246.99
252.09
176.75
Current Portion
246.99
252.09
176.75
Non-Current Portion
Break up of security details
Secured, considered good
-
-
-
-
-
-
Unsecured, considered good
246.99
252.09
176.75
Total
250.01
255.48
179.91
Total trade receivables
246.99
252.09
176.75
As at
31st March, 2017
As at
31st March, 2016
Doubtful
Allowance for doubtful debts
As at
31st March, 2017
3.02
(3.02)
3.39
(3.39)
3.16
(3.16)
For credit risk and provision for loss allowance refer note 28(A)
6(c)Loans
Particulars
Non current
Unsecured, considered good
Loans to employees
Total non current loans
3.73
3.75
(r in Crore)
As at
1st April, 2015
3.49
3.73
3.75
3.49
Loan to related parties (Refer Note 32)
1.89
0.74
0.66
Total current loans
6.12
5.00
5.01
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
12.87
65.28
47.73
Current
Unsecured, considered good
Loan to employees
4.23
4.26
6(d) Cash and Cash Equivalents
Particulars
Bank balance in current accounts
Deposits with maturity of less than three months
Remittance in transit
Cheques on hand
Cash on hand
Total cash and cash equivalents
17.98
2.89
-
0.23
33.97
26.43
-
4.35
(r in Crore)
29.80
-
-
0.76
93.16
79.06
1.45
0.77
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
169
Particulars
Fixed deposits with maturity more than 3 months but less than 12 months
Balances with banks for unclaimed dividend
Total bank balance other than cash and cash equivalents
As at
31st March, 2017
As at
31st March, 2016
0.33
0.44
192.98
193.31
223.54
223.98
(r in Crore)
As at
1st April, 2015
131.78
0.27
132.05
The details of specified bank notes (SBN) held and transacted during the period 8th November, 2016 to 30th December,
2016 as provided in the table below:
During the year, the companies incorporated in India including amounts in respect of joint ventures had specified bank notes
or other denomination notes as defined in the MCA notification G.S.R. 308 (E) dated 31st March, 2017 on the details of the
specified bank notes (SBN) held and transacted during the period from 8th November, 2016 to 30th December, 2016. The
denomination wise SBNs and other notes as per the notification are given below:
(r in Crore)
Details
Closing cash in hand as on 8th November, 2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on 30th December, 2016
SBNs*
0.14
-
-
0.14
-
Other
denomination
notes
Total
0.17
0.17
0.07
0.21
0.15
0.15
-
0.09
0.09
* For the purpose of this clause, the term ‘Specified Bank notes’ shall have the same meaning provided in the notification of the
Government of India, in the ministry of finance, department of Economic Affairs number S.O. 3407 (E ), dated 8th November,
2016.
6(f) Other Non current financial assets
Particulars
Unsecured considered good (Unless otherwise stated)
Security deposits with public bodies and others
Considered good
Considered doubtful
Less: Provision for doubtful deposits
Fixed deposits-maturing after 12 months (Refer Note below)
Total other non current financial assets
0.14
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
15.23
12.73
13.42
16.24
13.73
13.42
15.23
12.73
13.42
15.71
13.75
15.09
1.01
(1.01)
0.48
1.00
(1.00)
1.02
-
-
1.67
Note : Fixed deposits with banks include Rs. 0.12 Crore (Rs. 0.21 Crore as at 31st March, 2016 and Rs. 0.21 Crore as on 1st
April, 2015) deposited with sales tax authorities, Rs. 0.06 Crore (Rs. 0.36 Crore as at 31st March, 2016 and Rs. 0.39 Crore as
on 1st April, 2015) held as lien by banks against guarantees issued on behalf of the Group and Rs. 0.12 Crore (Rs. Nil as at 31st
March, 2016 and Rs. 0.57 Crore as on 1st April, 2015) for other earmarked balances.
Financial Statements
6(e) Bank balances other than cash and cash equivalents
NOTES
170
To Consolidated Financial Statements for the year ended 31st March, 2017
6(f) Other current financial assets
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
(i) Derivatives
Foreign exchange forward contracts, options and interest rate swaps
2.11
4.15
0.58
2.11
4.15
0.58
Security deposits
0.04
0.32
0.18
Other deposits
1.02
0.65
0.73
-
1.95
0.05
1.06
2.92
0.96
3.17
7.07
1.54
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Liabilities / provisions that are deducted for tax purposes when paid
3.23
27.32
20.79
Defined benefit obligations
1.48
1.08
0.46
-
9.41
12.46
(ii) Others
Insurance claim receivable
Total other current financial assets
7
Deferred Tax Assets (Net)
The balance comprises temporary differences attributable to :
Particulars
On Intangible assets adjusted against Capital Redemption Reserve and Securities
premium account under the Capital Restructuring scheme
MAT Credit entitlement
(r in Crore)
-
57.08
119.02
4.71
94.89
152.73
Other items:
On hedge reserve
-
8.80
25.94
Provision for doubtful debts/ advances that are deducted for tax purposes when
written off
-
1.68
1.00
6.07
2.02
3.15
Other timing differences
Total deferred tax assets
6.07
12.50
30.09
10.78
107.39
182.82
(0.02)
39.89
44.64
-
2.45
1.00
Deferred tax liability:
Additional depreciation/amortisation on property, plant and equipment, and
investment property for tax purposes due to higher tax depreciation rates.
Financial assets at fair value through Profit and loss
Other timing differences
1.26
0.12
0.25
Total deferred tax liabilities
1.24
42.46
45.89
Net deferred tax assets
9.54
64.93
136.93
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Movement in deferred tax assets
Particulars
(r in Crore)
Liabilities /
provisions that
are deducted
for tax
purposes when
paid
Defined benefit
obligations
On Intangible
assets*
MAT Credit
entitlement
Other items
Total
deferred tax
assets
20.79
0.46
12.46
119.02
30.09
182.82
6.53
-
(3.05)
(56.53)
1.11
(51.94)
to other comprehensive income
-
0.62
-
-
(17.05)
(16.43)
Deferred tax on basis adjustment
-
-
-
(5.41)
(1.65)
(7.06)
27.32
1.08
9.41
57.08
12.50
107.39
As at 1st April, 2015
(Charged)/credited:
to Profit and loss
As at 31st March, 2016
(Charged)/credited:
to Profit and loss
(24.09)
-
(9.41)
(57.08)
3.04
(87.54)
to other comprehensive income
-
0.40
-
-
(8.81)
(8.41)
Deferred tax on basis adjustment
-
-
-
-
(0.66)
(0.66)
3.23
1.48
-
-
6.07
10.78
As at 31st March, 2017
*On Intangible assets adjusted against Capital Redemption Reserve and Securities premium account under the Capital
Restructuring scheme. (Refer Note 12(c)).
Movement in deferred tax liabilities
Particulars
As at 1st April, 2015
Property plant and
equipment and
Investment
property
44.64
Other items
Total deferred
tax liabilities
1.00
0.25
45.89
(Charged)/credited :
to Profit and loss
(r in Crore)
Change in fair
value of hedging
instruments
(4.75)
1.45
(0.13)
(3.43)
to other comprehensive income
-
-
-
-
Deferred tax on basis adjustment
-
-
-
-
39.89
2.45
0.12
42.46
(39.91)
(2.45)
1.14
(41.22)
(0.02)
-
1.26
1.24
As at 31st March, 2016
(Charged)/credited :
to Profit and loss
to other comprehensive income
Deferred tax on basis adjustment
As at 31st March, 2017
8
Other Non Current Assets
Particulars
Capital advances
Advances to vendors
Prepaid expenses
Fringe benefit tax payments
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
-
0.30
-
0.85
0.71
1.24
6.01
18.58
As at
1st April, 2015
12.37
0.48
0.48
0.48
Deposits with statutory/government authorities
10.88
10.50
10.74
Total other non-current assets
18.22
30.57
24.83
Financial Statements
171
NOTES
172
To Consolidated Financial Statements for the year ended 31st March, 2017
9Inventories
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
569.03
288.08
356.66
50.69
71.25
10.85
85.96
75.21
77.10
0.05
-
-
159.35
137.21
128.78
361.83
322.50
387.03
0.40
0.33
-
13.12
17.71
19.80
By-Products
3.51
3.79
6.03
Stores and Spares
9.50
9.48
8.47
1,253.44
925.56
994.72
Raw Materials
- In Stock
- In Transit
Packing materials
- In Stock
- In Transit
Work-in-progress
Finished goods
- In Stock
- In Transit
Traded goods
Total inventories
Refer note 1(p) for basis of valuation
Write-downs/ (reversals) of inventories during the year to net realisable value amounted to Rs. (1.59) Crore (31st March, 2016
Rs 2.61 Crore). These were recognised as an expense during the year and included under “change in value of inventories’ of
work-in-progress, stock-in-trade and finished goods in statement of profit and loss.
10
Amounts recognised in profit or loss
Other Current Assets
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Deposits with statutory/government authorities (Refer note below)
31.75
14.36
11.48
Prepaid expenses
13.68
13.12
10.76
0.22
0.20
0.37
97.88
115.86
95.73
Advances to vendors
Others
Total other current assets
52.23
88.18
73.12
Deposits with government authorities and others includes government grants of Rs. 6.75 Crore for the year ended 31st March,
2017.
11
Assets Classified as Held for Sale
Particulars
Land and Building (Refer note 4 (v))
Total assets classified as held for sale
Non-recurring fair value measurements
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
12.45
12.45
28.71
12.45
12.45
28.71
Fair value of Building classified as held for sale was Rs.40.69 Crore as at 31st March, 2017, Rs.39.12 Crore as at 31st March,
2016 and Rs.47.45 Crore as on 1st April, 2015. Building classified as held for sale during the reporting period was measured
at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. The fair values of these
assets have been determined by independent valuer who holds recognised and relevant professional qualification. The
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
173
The Company decided to sell land and building which was classified as asset held for sale as on 31st March, 2015. The assets
situated at Goa were sold during the year ended 31st March, 2016, and the gain of Rs. 9.23 Crore was included in net gain
on disposal of Property, Plant and Equipment in Note 20. The other asset was reclassified to investment property during the
year ended 31st March, 2016. The delay in respect of the remaining asset (building) which the group has committed to sell is
caused by certain event and circumstances which are beyond the entity’s control.
12(a)Equity Share Capital
Particulars
Authorised share capital
As at 1st April, 2015
No. of shares
(in Crore)
(r in Crore)
Amount
Equity shares of Re. 1/- each
115.00
115.00
Total
125.00
215.00
Equity shares of Re. 1/- each
150.00
150.00
Total
156.50
215.00
Equity shares of Re. 1/- each
150.00
150.00
Total
156.50
215.00
Preference shares of Rs. 10/- each
As at 31st March, 2016
Preference shares of Rs. 10/- each
As at 31st March, 2017
Preference shares of Rs. 10/- each
Issued, subscribed and paid-up as at 31st March, 2017
1,290,471,198 equity shares of Re. 1/- each fully paid-up (refer note (v) below)
Total
10.00
6.50
6.50
129.05
100.00
65.00
65.00
129.05
129.05
129.05
No of shares
(in Crore)
Equity Share
capital (par value)
(i) Movements in equity share capital
Particulars
As at 1st April, 2015
Shares issued during the year - ESOP (Refer note 35)
Bonus Issue (Refer note (v) below)
As at 31st March, 2016
Equity shares of Re. 1/- each
Shares issued during the year - ESOP (Refer Note 35)
As at 31st March, 2017
(ii)
(iii) Shares reserved for issue under options
64.50
0.01
64.51
64.50
0.01
64.51
129.02
129.02
0.03
0.03
-
129.05
-
129.05
Rights, preferences and restrictions attached to equity shares
Equity Shares: The Company has one class of equity shares having a par value of Re.1 per share. Each shareholder
is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation,
the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
Information relating to Marico ESOS 2007, Marico ESOS 2014, MD CEO ESOP Plan 2014 and Marico ESOP 2016,
including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of
the reporting period, is set out in note 35.
Financial Statements
main inputs include details obtained from “The Ready Reckoner”, location factor and physical verification of the property. All
resulting fair value estimates for assets held for sale are included in level 3.
NOTES
174
To Consolidated Financial Statements for the year ended 31st March, 2017
(iv) Details of shareholders holding more than 5% shares in the company
Name of Shareholder
Equity Shares of Re. 1/- each fully paid-up
As at 31st March, 2016
% of Holding
No. of Shares held
148,337,200
11.49
146,752,000
11.37
Harsh C Mariwala with Kishore V Mariwala (For Aquarius Family Trust)
148,338,200
11.49
146,752,000
11.37
Harsh C Mariwala with Kishore V Mariwala (For Taurus Family Trust)
148,338,000
11.49
146,752,000
11.37
Harsh C Mariwala with Kishore V Mariwala (For Gemini Family Trust)
148,338,100
11.49
146,752,000
11.37
97,225,880
7.53
108,091,457
8.38
(v) During the year ended 31st March, 2016, the Company has issued 645,085,599 fully paid-up bonus equity shares of
face value Re. 1 each in the ratio of 1:1 with record date of 24th December, 2015. As a result EPS has been adjusted for
reporting as well as for all the comparative periods.
Aggregate number of shares allotted as fully paid-up by way of bonus shares
For the year ended
31st March, 2016
Equity shares allotted as fully paid-up bonus shares by capitalization of general reserve
645,085,599
12(b) Reserves and Surplus
Particulars
Securities premium reserve
General reserve
Share based option outstanding account
Treasury Shares
WEOMA reserve
As at
31st March, 2016
As at
1st April, 2015
298.70
298.70
363.21
7.62
6.42
2.96
(60.69)
(68.37)
(28.29)
411.28
408.46
407.97
44.82
20.18
2.66
2,254.98
1,965.97
1,759.87
Adjustment pursuant to the Scheme of Capital Reduction of MCCL
(Refer note 12 (c))
(723.72)
(723.72)
(723.72)
2,232.99
1,907.64
1,784.66
(i)
Securities premium reserve
Particulars
Opening Balance
Add: Receipt on exercise of employee stock options
Less : Amount adjusted towards bonus share issue expenses
Closing Balance after Minority Interest
(r in Crore)
As at
31st March, 2017
Retained earnings
Total Reserves and surplus
% of Holding
Harsh C Mariwala with Kishore V Mariwala (For Valentine Family Trust)
First State Investments Services (UK) Ltd (along with Persons acting
in concert)
As at 31st March, 2017
No. of Shares held
As at
31st March, 2017
408.46
Opening Balance
Less: Transferred to share capital on account of issue of bonus shares
Closing Balance after Minority Interest
As at
31st March, 2016
407.97
2.82
0.58
-
(0.09)
411.28
408.46
(ii) General Reserve
Particulars
(r in Crore)
As at
31st March, 2017
298.70
(r in Crore)
As at
31st March, 2016
363.21
-
(64.51)
298.70
298.70
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
(iii) Share based option outstanding account (refer note 35)
Particulars
As at
31st March, 2017
Opening Balance
6.42
Appropriations during the year
-
4.02
3.46
Closing Balance after Minority Interest (ESOP)
7.62
6.42
(iv) Treasury Shares (refer note 38)
Particulars
7.68
(40.08)
(60.69)
(68.37)
As at
31st March, 2017
Opening Balance
As at
31st March, 2016
(v) WEOMA reserve (refer Note 38)
Particulars
20.18
(28.29)
(r in Crore)
As at
31st March, 2016
2.66
Add : Income of the trust for the year
24.64
17.52
Closing Balance after Minority Interest
44.82
20.18
(vi) Retained earnings
Particulars
Opening Balance
Remeasurement of post empoyment benefit obligation, net of tax
Less: Dividend
Less: Tax on dividend (net of tax on dividend received from Indian and foreign subsidiaries of Rs. 34.89
Crore) (Previous year Rs. 23.22 Crore)
Closing Balance (Retained earnings after Minority Interest)
As at
31st March, 2016
798.59
711.48
1,759,87
(0.96)
(2.95)
(451.59)
(435.43)
(57.03)
(67.00)
2,254.98
1,965.97
12(c)Other Reserves
Particulars
(r in Crore)
As at
31st March, 2017
1,965.97
Net Profit for the period
(r in Crore)
As at
31st March, 2017
(68.37)
Closing Balance after Minority Interest
2.96
Compensation of option granted during the year
Add : (Purchase)/sale of treasury shares by the trust during the year (net)
As at
31st March, 2016
(2.82)
Opening Balance
(r in Crore)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
Foreign currency translation reserve
(37.82)
(4.05)
-
Total other reserves
(36.36)
(19.29)
(48.70)
Hedge reserve
1.46
(15.24)
As at
1st April, 2015
(48.70)
Financial Statements
175
NOTES
176
To Consolidated Financial Statements for the year ended 31st March, 2017
Hedge reserve
Particulars
As at
31st March, 2016
Deferred Hedging Gain / (Loss) on hedging instruments
(9.67)
(16.43)
Gain / (Loss) transferred to Income Statement
35.20
67.02
Deferred tax on hedge reserve
(8.83)
(17.13)
1.46
(15.24)
Opening balance
Closing Balance hedge reserve
(15.24)
Foreign currency translation reserve
Particulars
Opening balance
As at
31st March, 2017
(4.05)
Less: Transferred to retained earnings
(r in Crore)
As at
31st March, 2017
(48.70)
(r in Crore)
As at
31st March, 2016
-
-
-
Exchange gain/(loss) on translation during the year
(33.77)
(4.05)
Closing Balance Foreign currency translation reserve
(37.82)
(4.05)
Non controlling interest (NCI)
Particulars
Opening balance
Total Comprehensive Income for the year
Less : Dividend distributed to minority shareholders
Other adjustments
Closing Balance Non controlling interest (NCI)
As at
31st March, 2017
14.31
(r in Crore)
As at
31st March, 2016
13.65
12.37
11.84
(13.45)
(11.88)
0.11
0.70
13.34
14.31
Nature and purpose of other reserves
Securities premium account
General Reserve
Securities premium account is used to record the premium on issue of shares. The reserve is utilised in accordance with
the provisions of the Act.
The General Reserve is used from time to time to record transfer of profit from retained earnings, for appropriation
purposes. As general reserve is created by transfer from one component of equity to another and it is not an item of other
comprehensive income, item included in the General Reserve will not be reclassified subsequently to Profit or Loss.
Share based option outstanding account
The share based option outstanding account is used to recognise the grant date fair value of options issued to employees
under group’s employee stock option schemes.
WEOMA reserve and Treasury shares
Profit on sale of treasury shares by WEOMA trust is recognised in WEOMA reserve. (refer note 38)
The group uses forward and options contracts to hedge its risks associated with foreign currency transactions relating
to certain firm commitments and forecasted transactions. The group also uses Interest rates swap contracts to hedge
its interest rate risk exposure. The group designates these as cash flow hedges. These contracts are marked to market
as at the year end and resultant exchange differences, to the extent they represent effective portion of the hedge, are
recognized directly in hedge reserve. The ineffective portion of the same is recognized immediately in the Statement of
Profit and Loss.
Hedge Reserve
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Exchange differences taken to hedge reserve account are recognized in the Statement of Profit and Loss upon
crystallization of firm commitments or occurrence of forecasted transactions or upon discontinuation of hedge
accounting resulting from expiry / sale / termination of hedge instrument or upon hedge becoming ineffective.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign operations are recognised in other comprehensive income as
described in accounting policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified
to profit or loss when the net investment is disposed-off.
Adjustment pursuant to the Scheme of Capital Reduction of MCCL
During the year ended 31st March, 2014, Hon’ble High Court of Bombay had approved the Scheme of Capital Reduction
vide its order dated 21st June, 2013 in accordance with the provisions of Section 78 (read with Sections 100 to 103) of
the Companies Act, 1956, pertaining in the group’s wholly owned subsidiary, Marico Consumer Care Limited (MCCL).
Pursuant to the Capital Reduction Scheme, intangible assets aggregating Rs. 723.72 Crore, were adjusted against the
Share capital to the extent of Rs. 53.96 Crore and securities premium to the extent of Rs. 669.76 Crore. Consequently, in
the consolidated financial statements of Marico, intangible assets to the extent of Rs. 723.72 Crore were adjusted under
reserves and surplus.
13(a)Non-Current Borrowings
Maturity Date
Terms of repayment
USD 6 million due on 11th August, 2015
USD 9 million due on 11th February,
2016
USD 12 million due on 11th August,
2016
USD 15 million due on 11th February,
2017
The loan is repayable
over a period of 6
years commencing
from 11th February,
2011 on semiannual
installments
Coupon /
Interest rate
Secured
(r in Crore)
As at
31st March,
2017
As at
31st March,
2016
-
179.28
262.78
-
179.28
262.78
-
0.75
As at
1st April,
2015
Term Loan
From banks
External commercial
borrowing from The
Hongkong and Shanghai
Banking Corporation
Limited (Refer note (ii)
below)
Total non-current borrowings
3 months
LIBOR + 2.1%
Less: Current Maturities of long-term debt (Refer note 13 (b))
-
Non-current borrowings
-
Less: Interest accrued (Refer note 13 (b))
178.53
-
93.36
1.02
168.40
Financial Statements
177
NOTES
178
To Consolidated Financial Statements for the year ended 31st March, 2017
13(a)Current Borrowings
Maturity Date
Terms of
repayment
Coupon /Interest rate
Payable on demand
Payable on
demand
(r in Crore)
As at
31st March,
2017
As at
31st March,
2016
As at
1st April,
2015
6.00% to 12.25% per annum
33.87
16.72
8.64
For a term of
twelve months
1.00% to 1.4% per annum
(FY 16 - Nil)
48.35
-
-
Bank Base rate/Relevant
Benchmark rate plus applicable
spread ranging between 6.7%
to 9.5% per annum less Interest
Subvention of 3% per annum
(FY 16 - Bank Base rate plus
applicable/Relevant Benchmark
rate spread ranging between
8.9% to 9.5% per annum less
Interest Subvention of 3% per
annum)
20.00
15.00
-
Loans repayable on demand
Secured
From banks
Cash credit (Refer Note (i)
below)
Pre-shipment credit in Foreign
Currency (Refer Note (i) below)
Repayable on 9th
June, 2017 Rs. 21.25
Crore and repayable
on 21st July, 2017
Rs. 27.10 Crore (FY
16 - Nil)
Export Packing credit (Refer
Note (i) below)
Repayable on 31st
May, 2017 Rs. 10
Crore and 25th
September, 2017
Rs. 10 Crore (FY 16
- Repayable on 27th
May, 2016 and 20th
June, 2016 for Rs.
10 Crore and 5 Crore
respectively)
For a term of two
months to six
months (FY 16 For a term of two
to four months)
Working capital demand loan
(Refer Note (i) below)
Repayable on
18th October, 2017 Rs. 10 Crore
19th October, 2017 Rs. 10 Crore
15th December, 2017
- Rs. 34.19 Crore
For a term of
twelve months
Bank Base rate/Relevant
Benchmark Rate plus applicable
spread ranging between 0.1%
to 0.2% per annum (FY 16 - Nil)
54.19
14.82
13.97
Repayable on 31st
May, 2017 - Rs.57.89
Crore and 29th
December, 2017 Rs.18.99 Crore.
for terms upto
twelve months
LIBOR plus applicable spread
ranging from 0.80% to 1.10%
per annum (FY 16 LIBOR plus
applicable spread ranging from
0.80% to 1.10% per annum)
76.88
78.07
112.69
5.78
28.31
30.22
239.07
152.92
165.52
238.80
152.79
165.44
Unsecured
Working capital demand loan
Cash credit
Total current borrowings
Payable on demand
Less: Interest accrued (Refer Note 13(b))
Current borrowings as per
balance sheet
(i)
(ii)
Payable on
demand
LIBOR plus applicable spread
ranging from 0.80% to 1.10%
per annum (FY 16 LIBOR plus
applicable spread ranging from
0.80% to 1.10% per annum)
0.27
0.13
0.08
Export Packing Credit, Cash Credit, Pre-shipment credit in foreign currency and Working capital demand loan is secured by
hypothecation of inventory and debtors, value of Rs. 1,500.43 Crore as at 31st March, 2017, Rs. 1,177.65 Crore as at 31st
March, 2016 and Rs. 1,171.47 Crore as at 1st April, 2015.
ECB loan was secured by (i) Pledge of shares of Marico South East Asia Corporation (a Subsidiary company, formerly known
as International Consumer Products Corporation), carrying value of Rs. 254.98 Crore as at 1st April, 2015, 31st March, 2016
and 31st March, 2017 (ii) First ranking pari passu charge over all current and future plant and machinery, carrying value of Rs.
188.57 Crore as at 1st April, 2015, Rs. 175.38 Crore as at 31st March 2016 and the said loan has been repaid during the year
and (iii) Mortgage on land and building situated at Andheri, Mumbai (Mortgage was only for previous year ended 31st March,
2015), carrying value of Rs. 44.08 Crore as at 1st April, 2015.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
179
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Current
Current maturities of long-term debt (refer note 13(a))
Interest accrued and not due on borrowings (refer note 13(a))
Capital Creditors
-
178.53
93.36
0.27
0.88
1.10
4.66
5.20
4.43
11.25
7.69
6.62
Bonus payable
5.38
13.81
13.21
Security deposits from customer and others
1.25
0.43
1.49
Unclaimed dividend (refer note below)
0.33
0.44
0.27
Others liabilites
0.36
0.28
0.43
3.14
1.42
0.36
-
0.39
1.17
26.64
209.07
122.44
Salaries and benefits payable
Derivative designated as hedges
Foreign-exchange forward contracts
Foreign-exchange interest Rate Swaps used as designated interest rate hedges
contracts
Total other current financial liabilities
Note : Amount payable to Investor Education and Protection Fund Rs. Nil as on 1st April, 2015, 31st March, 2016 and 31st March, 2017.
13(c)Trade Payables
Particulars
Current
As at
31st March, 2017
As at
31st March, 2016
(r in Crore)
As at
1st April, 2015
Trade payables
696.60
669.04
564.42
Total trade payables
696.60
669.04
564.42
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Disputed indirect taxes (refer note (a))
56.41
50.64
42.25
Total current provisions
56.41
50.64
42.25
14Provisions
Particulars
Current
(r in Crore)
(a) Provision for disputed indirect taxes mainly pertains to Entry tax dispute in the state of Himachal Pradesh and West
Bengal where company has filed a writ petition in both the states before the honourable high court and the matter is
sub judice. It is not practicable to state the timing of the judgement & final outcome. Management has assessed that
unfavourable outcome of the matter is more than probable and therefore has created provisions for necessary amounts.
(b) Movement in provisions
Disputed indirect taxes
Charged / (credited) to profit or loss
Add: Additional provision recognised
Less: Amount used during the year
Less: Unused amounts reversed during the year
Balance as at the end of the year
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
6.02
12.41
17.60
(0.25)
(4.02)
-
50.64
42.25
25.15
-
-
(0.50)
56.41
50.64
42.25
Financial Statements
13(b)Other Financial Liabilities
NOTES
180
To Consolidated Financial Statements for the year ended 31st March, 2017
15
Employee benefit obligations current
Particulars
Leave encashment/Compensated absences (refer note (iii) below)
Incentives / Bonus
Gratuity (refer note (i) below)
Share-appreciation rights (refer note (v) below)
Others
Total employee benefit obligations current
Particulars
Leave encashment/Compensated absences (refer note (iii) below)
Incentives / Bonus
30.38
25.65
28.23
7.88
16.68
14.84
52.03
54.25
53.97
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
-
-
0.13
9.59
3.68
0.50
8.37
3.11
0.44
1.18
1.38
5.28
6.22
Others
1.75
1.21
Total employee benefit obligations non current
As at
1st April, 2015
Gratuity (refer note (i) below)
Share-appreciation rights (refer note (v) below)
As at
31st March, 2016
Employee benefit obligations non current
(r in Crore)
As at
31st March, 2017
7.65
15.86
4.00
12.81
7.53
2.85
0.52
(r in Crore)
1.20
3.91
7.76
0.60
13.60
Notes:
(i)Gratuity
The group provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. Amount of gratuity payable on retirement/termination is
the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number
of years of service. The gratuity plan in India is funded through gratuity trust in India.
(ii)
(iii) Leave Encashment/Compensated absences.
Provident fund
Contributions are made to a trust administered by the group. The group’s liability is actuarially determined (using the
Projected Unit Credit method) at the end of the year and any shortfall in the fund balance maintained by the Trust set up
by the group is additionally provided for. There is no shortfall as at 31st March, 2017, 31st March 2016 and 1st April, 2015.
The group provides for the encashment of leave with pay subject to certain rules. The employees are entitled to accumulate
leave subject to certain limits, for future encashment / availment. The liability is provided based on the number of days of
unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation.
(r in Crore)
Particulars
Current leave obligations expected to be settled within the next 12
(iv)Superannuation
(v)
As at
31st March, 2017
9.59
As at
31st March, 2016
8.37
As at
1st April, 2015
7.53
Marico India makes contribution to the Superannuation Scheme, a defined contribution scheme, administered by
Insurance companies. The company has no obligation to the scheme beyond its monthly contributions.
Share-appreciation rights
In respect of Employee Stock Appreciation Rights (STAR) granted pursuant to the group’s Employee Stock Appreciation
Rights Plan, 2011, the liability shall be measured, initially and at the end of each reporting period until settled, at the fair
value of the share appreciation rights, by applying an option pricing model, (excess of fair value as at the period end over
the Grant price) is recognized as employee compensation cost over the vesting period (refer note 38).
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Balance sheet amounts - Gratuity
Particulars
(r in Crore)
Present value
of obligation
Fair value
of plan assets
Net Amount
15.07
6.76
2.46
-
2.46
-
4.11
(1.94)
(1.94)
(1.94)
(Gain)/loss from change in financial assumptions
1.35
-
1.35
Total amount recognised in other comprehensive income
3.46
0.79
4.25
(2.77)
(2.17)
1st April, 2015
Current service cost
Interest expense
Interest income
Total amount recognised in profit or loss
Remeasurements
Experience (gains)/ losses
Employer contributions
Benefit Payments
21.83
1.65
-
2.11
0.79
-
1.65
2.17
-
2.90
3.25
(3.25)
9.33
(0.60)
31st March, 2016
26.63
17.30
1st April, 2016
26.63
17.30
9.33
3.09
-
3.09
-
5.08
(1.34)
(1.34)
(1.34)
0.95
-
0.95
Experience (gains)/ losses
(0.07)
(0.62)
(0.69)
Employer contributions
(0.41)
3.41
(3.82)
31st March, 2017
29.43
20.47
8.96
Current service cost
Interest expense
Interest income
Total amount recognised in profit or loss
Remeasurements
(Gain)/loss from change in demographic assumptions
(Gain)/loss from change in financial assumptions
Total amount recognised in other comprehensive income
Benefit Payments
1.99
-
1.11
-
1.99
(0.62)
(3.86)
(2.20)
The Net liability disclosed above relates to funded & unfunded plans are as follows
Particulars
Present value of funded obligations
Fair value of plan assets
Deficit of funded plan
Unfunded plans
Deficit of gratuity plan
31st March, 2016
23.42
19.98
(20.47)
(17.30)
6.01
6.65
8.96
3.74
-
1.11
1.37
(1.66)
(r in Crore)
31st March, 2017
2.95
1.99
2.68
9.33
1st April, 2015
17.67
(15.07)
2.60
4.16
6.76
Financial Statements
(a)
181
To Consolidated Financial Statements for the year ended 31st March, 2017
2.95
(20.47)
23.42
India
2.96
-
2.96
Bangladesh
17.00%
Attrition rate
17.50%
12.00%
NA
11.00%
Bangladesh
5.25%
5.00%
NA
3.18%
Dubai
0.48
-
0.48
Eygpt
10.00%
14.40%
NA
8.00%
Eygpt
8.96
(20.47)
29.43
Total
17%
10%
7.72%
7.72%
India
2.68
(17.30)
19.98
India
0.48
-
2.23
Dubai
17.50%
12.00%
NA
11.00%
Bangladesh
5.25%
5.00%
NA
3.18%
1.01
-
1.01
Eygpt
Dubai
31st March, 2016
3.41
-
3.41
Bangladesh
31st March, 2016
10.00%
14.40%
NA
8.00%
Eygpt
9.33
(17.30)
26.63
Total
17%
10%
7.89%
1.46
-
1.46
Dubai
17.50%
12.00%
NA
11.00%
Bangladesh
5.25%
5.00%
NA
3.15%
0.84
-
0.84
Eygpt
Dubai
1st April, 2015
1.86
-
1.86
Bangladesh
7.89%
India
2.60
(15.07)
17.67
India
1st April, 2015
NA
12.00%
NA
12.50%
Eygpt
6.76
(15.07)
21.83
Total
(r in Crore)
**The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion, and other relevant factors such as supply and demand factors
in the employment market. (The expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario.)
*The expected rate of return on plan assets is based on expectation of the average long term rate of return expected on investment of the fund during the estimated term of the
obligations.
10.00%
6.77%
Rate of return on Plan assets*
Future salary rise**
6.77%
Discount rate
India
31st March, 2017
2.57
-
2.57
Dubai
31st March, 2017
The significant actuarial assumptions were as follows
Total liability
Fair value of plan assets
Present value of obligations
Plan type
The following table shows a breakdown of the defined benefit obligation (Gratuity) and plan assets by country: NOTES
182
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Sensitivity Analysis
The sensitivity of defined benefit obligation to changes in the weighted principal assumptions is:
(r in Crore)
Projected benefit obligation on current assumptions
As at
31st March, 2017
As at
31st March, 2016
(1.39)
(1.18)
29.43
Delta effect of +1% change in rate of discounting
Delta effect of -1% change in rate of discounting
1.55
Delta effect of +1% change in rate of salary increase
Delta effect of +1% change in rate of Employee turnover
1.32
1.17
Delta effect of -1% change in rate of salary increase
26.63
1.03
(1.10)
(0.96)
0.21
0.12
(0.19)
Delta effect of -1% change in rate of Employee turnover
(0.12)
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the
defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been
applied as when calculating the defined benefit liability recognised in the Balance Sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior
period.
The major categories of plans assets are as follows:
Special deposit scheme
Amount
31st March, 2017
0.53
31st March, 2016
(r in Crore)
1st April, 2015
in %
Amount
in %
Amount
in %
2.59%
-
0%
-
0%
Insurer Managed funds
19.91
97.26%
17.30
100%
15.07
100%
Total
20.47
100%
17.30
100%
15.07
100%
Other
(b)
0.03
0.15%
-
0%
-
0%
Provident Fund
Amount recognised in the Balance sheet
Particulars
Liability at the end of the year
Fair value of plan assets at the end of the year
Present value of benefit obligation as at the end of the period
Difference
Unrecognized past service cost
(Assets) / Liability recognized in the Balance Sheet
(r in Crore)
31st March, 2017
31st March, 2016
1st April, 2015
122.01
98.60
85.80
-
-
(117.45)
(94.43)
(82.31)
(4.56)
(4.17)
(3.49)
31st March, 2017
31st March, 2016
1st April, 2015
8.75
7.20
6.75
4.56
-
4.17
-
Changes in defined benefit obligations:
Particulars
Liability at the beginning of the year
Interest cost
Current service cost
94.43
8.49
Employee contribution
10.78
Liability Transferred out
(6.38)
Liability Transferred in
Benefits paid
Actuarial (gain)/loss on obligations (Due to change in financial obligation)
Actuarial (gain)/loss on obligations (Due to Experience)
Liability at the end of the year
-
7.11
82.31
6.73
9.40
2.82
(3.33)
(5.73)
(10.70)
-
-
-
117.45
-
94.43
3.49
-
(r in Crore)
81.83
6.01
8.21
2.99
(4.15)
(19.34)
-
-
82.31
Financial Statements
183
NOTES
184
To Consolidated Financial Statements for the year ended 31st March, 2017
Changes in fair value of plan assets:
Particulars
Fair value of plan assets at the beginning of the year
31st March, 2016
8.77
7.21
98.60
Expected return on plan assets
85.80
(r in Crore)
1st April, 2015
82.59
6.75
Contributions
18.74
16.12
14.24
Transfer to other Company
(6.38)
(3.33)
(4.15)
Transfer from other Company
7.11
Benefits paid
Actuarial gain/(loss) on plan assets
2.82
2.99
(5.73)
(10.84)
(19.34)
122.01
98.60
85.80
31st March, 2017
31st March, 2016
1st April, 2015
8.77
7.20
0.90
Fair value of plan assets at the end of the year
31st March, 2017
0.82
2.72
Expenses recognised in the Statement of Profit and Loss :
Particulars
Current service cost
7.96
Interest cost
Expected return on plan assets
Net actuarial (gain)/loss to be recognized
6.72
6.02
6.75
(8.77)
(7.20)
(6.75)
7.96
6.72
6.02
-
(Income) / Expense recognised in the Statement of Profit and Loss
(r in Crore)
-
-
The major categories of plans assets are as follows :
Particulars
Central Government securities
31st March 2017
Amount
in %
14.18
11.62%
Public Sector Units
38.50
Equity / Insurance Managed Funds
State loan/State government
Guaranteed Securities
Private Sector Units
Others
Total
31st March, 2016
Amount
Amount
15.43%
15.32
24.37
24.72%
31.55%
43.33
45.03
36.91%
3.63
122.01
100.00%
98.60
13.71
7.41
3.18
11.24%
6.07%
2.61%
15.21
7.81
4.25
1st April, 2015
in %
in %
20.03
23.34%
43.94%
40.05
46.68%
3.68%
-
0.00%
85.80
100.00%
7.92%
6.50
4.31%
3.90
100.00%
17.86%
7.57%
4.55%
The significant actuarial assumptions were as follows:
Particulars
Discount rate
Rate of return on Plan assets*
Future salary rise**
Attrition rate
Mortality
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
8.85%
8.80%
8.75%
6.67%
10%
17%
7.72%
10%
17%
7.89%
Indian Assured Lives Mortality (2006-08) Ultimate
10%
17%
*The expected rate of return on plan assets is based on expectation of the average long term rate of return expected
on investment of the fund during the estimated term of the obligations.
**The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion, and other relevant factors such as supply and demand factors in the employment market. (The expected
rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario.)
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Privileged leave (Compensated absences for employees):
Amount recognized in the Balance Sheet and movements in net liability:
Opening balance of compensated absences (a)
(r in Crore)
31st March, 2017
31st March, 2016
1st April, 2015
10.77
9.75
8.73
9.75
Present value of compensated absences (As per actuarial valuation) as at
the year end (b)
8.73
6.78
The privileged leave liability is not funded.
(d)
Superannuation fund
Marico India has recognised Rs. Nil for the year ended 31st March, 2017, Rs. 0.15 Crore for the year ended 31st
March, 2016 and Rs. 0.22 Crore for the year ended 31st March, 2015 towards contribution to superannuation fund
in the Statement of Profit and Loss.
Marico India has recognised Rs. 0.12 Crore for the year ended 31st March, 2017, Rs. 0.05 Crore for the year ended
31st March, 2016, towards employee state insurance plan in the Statement of Profit and Loss.
Risk exposure (For Gratuity and Provident Fund)
Through its defined benefit plans, the group is exposed to below risk:
Asset volatility : The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets
underperform this yield, this will create a deficit. Most of the plan assets has investments in insurance/equity managed
fund, fixed income securities with high grades, public/private sector units and government securities. Hence assets
are considered to be secured.
Changes in bond yields : A decrease in bond yields will increase plan liabilities, although this will be partially offset
by an increase in the value of the plans’ bond holdings.
The Trust ensures that the investment positions are managed within an asset-liability matching (ALM) framework
that has been developed to achieve long-term investments that are in line with the obligations under the employee
benefit plans. Within this framework, the group’s ALM objective is to match assets to the obligations by investing in
long-term fixed interest securities with maturities that match the benefit payments as they fall due.
Defined benefit liability and employer contributions
The weighted average duration of the gratuity for the group ranges from 4.88 to 12.37 years as at 31st March, 2017,
5.59 to 12.32 years as at 31st March, 2016 and 5.51 to 12.71 years as at 1st April, 2015.
The expected maturity analysis of gratuity is as follows:
(r in Crore)
31st March, 2017
31st March, 2016
1st April, 2015
4.07
3.82
3.31
Between 2 and 5 years
14.85
17.27
11.65
Between 6 and 10 years
15.79
23.31
11.87
Total
34.71
44.40
26.83
Within the next 12 months
Financial Statements
(c)
185
NOTES
186
To Consolidated Financial Statements for the year ended 31st March, 2017
16
Deferred Tax Liabilities (Net)
The balance comprises temporary differences attributable to :
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
22.15
-
-
7.06
-
-
Deferred tax assets
Liabilities / provisions that are deducted for tax purposes when paid
On Intangible assets adjusted against Capital Redemption Reserve and Securities
Premium Account under the Capital Restructuring Scheme
MAT Credit entitlement
7.74
-
-
36.95
-
-
Provision for doubtful debts / advances that are deducted for tax purposes when
written off
1.77
-
-
Other timing differences
0.42
-
-
2.19
-
-
39.14
-
-
-
-
40.35
1.00
0.07
7.96
0.21
0.13
11.85
21.63
16.08
1.01
-
-
Total deferred tax liabilities
61.17
22.84
16.28
Net deferred tax liabilities
22.03
22.84
16.28
Other items:
Total deferred tax assets
Deferred tax liability:
Additional depreciation/amortisation on property, plant and equipment, and investment
property for tax purposes due to higher tax depreciation rates.
Financial assets at fair value through Profit & Loss
Outside basis tax
Other timing differences
Movement in deferred tax assets
Particulars
(r in Crore)
Liabilities /
provisions that
are deducted
for tax purposes
when paid
On intangible
assets
MAT credit
entitlement
Other items
Total deferred tax
assets
-
-
-
-
-
to Profit and loss
-
-
-
-
-
to other comprehensive income
-
-
-
-
-
Deferred tax on basis adjustment
-
-
-
-
-
As at 31st March, 2016
-
-
-
-
-
22.15
7.06
7.74
2.19
39.14
-
-
-
-
-
22.15
7.06
7.74
2.19
39.14
As at 1st April, 2015
(Charged)/credited :
-
(Charged)/credited :
to Profit and loss
to other comprehensive income
As at 31st March, 2017
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Movement in deferred tax liabilities
Particulars
As at 1st April, 2015
(r in Crore)
Property plant
and equipment
and
Investment
property
Financial assets
at fair value
through Profit &
Loss
Outside basis tax
Other items
Total deferred
tax liabilities
0.07
0.13
16.08
-
16.28
(Charged)/credited :
to Profit and loss
0.93
0.08
5.55
-
6.56
to other comprehensive income
-
-
-
-
-
Deferred tax on basis adjustment
-
-
-
-
-
1.00
0.21
21.63
-
22.84
As at 31st March, 2016
(Charged)/credited :
to Profit and loss
39.35
7.75
(9.78)
1.01
38.33
to other comprehensive income
-
-
-
-
-
Deferred tax on basis adjustment
-
-
-
-
-
40.35
7.96
11.85
1.01
61.17
As at 31st March, 2017
17
Current tax liabilities
Particulars
Opening balance
292.21
250.30
38.90
Less: Taxes paid
(296.41)
(252.82)
Closing balance
31.65
36.09
Current Tax liabilities
32.57
38.07
Foreign Currency Translation Reserve
(0.24)
Current Tax assets
0.92
The Current tax assets and liabilities has been derived at based on individual entity.
18
Other current liabilities
As at
31st March, 2016
36.09
Add: Current tax payable for the year
(r in Crore)
As at
31st March, 2017
Particulars
(0.29)
1.98
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
40.88
33.89
30.34
-
12.55
4.36
Other current liabilities
40.88
46.44
34.70
Contractual obligation
54.61
65.23
61.79
Advance from customer
23.16
26.92
28.86
Statutory dues including provident fund, Tax deducted at source and others
Book overdraft
Other payable
Total Other payables
Total other current liabilities
0.91
1.39
1.22
78.68
93.54
91.87
119.56
139.98
126.57
Financial Statements
187
NOTES
188
To Consolidated Financial Statements for the year ended 31st March, 2017
19
Revenue From Operations
Particulars
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
5,788.94
5,884.63
129.09
130.16
Export incentives
8.49
4.86
Other incentives
2.14
-
Sale of Scrap
7.26
4.80
5,935.92
6,024.45
Sale of products including excise duty
Finished goods*
By-products
Other operating revenue:
Total Revenue from continuing operations
*Finished goods includes traded goods
20
Other Income
Particulars
(a) Other income
Rental income
Dividend income from investments measured at fair value through profit or loss
Interest income from financial assets at amortised cost
Others
Total of other income
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
1.20
0.91
-
25.59
36.32
32.36
8.00
11.86
45.52
70.72
(b) Other gains/(losses):
Net gain on disposal of property, plant and equipment / business
2.77
19.16
Net gain on financial assets mandatorily measured at fair value through profit or loss and net gain on sale of
investments*
49.02
3.45
Total of other gain/(losses)
51.79
22.61
Total other income
97.31
93.33
*Includes net gain on financial assets mandatorily measured at fair value through Profit or Loss of Rs 18.56 Crore (31st March,
2016: Rs.1.39 Crore)
21(a)Cost of Materials Consumed
Particulars
Raw materials at the beginning of the year
Add: Purchases
Less: Raw materials at the end of the year
Total raw materials consumed
Packing materials at the beginning of the year
Add: Purchases
Less: Packing materials at the end of the year
Total packing materials consumed
Total cost of materials consumed
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
2,573.18
2,374.08
359.33
367.51
619.72
359.33
2,312.79
2,382.26
75.21
77.10
463.24
471.41
86.01
75.21
452.44
473.30
2,765.23
2,855.56
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
189
Particulars
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
Finished goods
322.83
387.03
Work-in-progress
137.21
128.78
Opening inventories
By-products
3.79
6.03
17.71
19.80
Finished goods
362.23
322.83
Work-in-progress
159.35
137.21
Stock-in-trade
Closing inventories
By-products
Stock-in-trade
Total changes in inventories of finished goods, stock-in-trade and work-in-progress
22 Employee Benefit Expense
Particulars
Salaries, wages and bonus
Contribution to provident fund (Refer Note 15)
Employee share-based payment expense (Refer Note 35)
Stock appreciation right expenses (Refer Note 35)
Staff welfare expenses
3.79
13.21
17.71
(56.67)
60.10
Year ended
31st March, 2017
Year ended
31st March, 2016
14.28
11.73
342.36
(r in Crore)
321.84
4.02
3.46
13.89
15.74
29.63
20.63
404.18
373.40
Year ended
31st March, 2017
Year ended
31st March, 2016
Depreciation on Investment properties (Refer Note 4)
0.44
1.77
Amortisation of intangible assets (Refer Note 5)
4.03
4.08
Impairment loss / (reversal of loss) of capitalised assets (Refer Note 3)
0.49
6.37
90.30
94.86
Total employee benefit expense
23
3.51
Depreciation and Amortization Expense
Particulars
Depreciation on Property, Plant and Equipment (Refer Note 3)
Total Depreciation and amortization expense
85.34
(r in Crore)
82.64
Financial Statements
21(b)Changes in Inventories of finished goods, stock-in-trade and work-in-progress
NOTES
190
To Consolidated Financial Statements for the year ended 31st March, 2017
24 Other Expenses
Particulars
Consumption of stores and spares
Power, fuel and water
Contract manufacturing charges
Rent and storage charges
Repairs to:
- Building
- Plant and equipment
- Others
Freight, forwarding and distribution expenses
Advertisement and sales promotion
Insurance
29.32
Travelling, conveyance and vehicle expenses
Royalty
Commission to Non-executive directors
Provision for doubtful debts, loans, advances and investments
Add: Bad debts written off
Miscellaneous expenses (Refer note (i) below)
Total
(i)
10.81
21.24
5.22
238.59
659.46
8.94
Labour charges
Training and seminar expenses
3.06
7.31
33.35
45.60
0.31
1.82
0.09
39.37
20.03
4.15
229.94
692.72
7.69
36.79
5.60
9.44
2.56
5.15
61.06
43.17
0.25
1.31
1.33
-
0.06
150.63
112.96
0.09
1.39
1,523.39
1,521.99
Year ended
31st March, 2017
Year ended
31st March, 2016
26.03
(r in Crore)
20.61
8.48
7.54
Outside services
30.01
21.55
Legal and professional charges
60.33
39.34
5.73
8.84
Year ended
31st March, 2017
Year ended
31st March, 2016
Donation
(ii)
6.06
Miscellaneous expenses include :
Particulars
31.06
11.65
50.56
10.36
Research and development expenses
18.11
188.43
Communication expenses
Net Losses on foreign currency transactions and translations (Refer note (iii))
(r in Crore)
Year ended
31st March, 2016
187.35
31.16
Printing and stationery
21.31
Rates and taxes
Commission to selling agents
Year ended
31st March, 2017
Corporate social responsibility expenditure
Particulars
Amount required to be spent as per the section 135 of the Act
13.15
(r in Crore)
11.35
Amount spent during the year on:
(i) Construction/acquisition of an asset
(ii) On purposes other than (i) above
-
-
14.56
10.02
(iii) Net Losses on foreign currency transactions and translations is other than as consider in finance cost.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
191
Particulars
Interest and finance charges on financial liabilities not at fair value through profit or loss
Year ended
31st March, 2017
9.24
Bank and other financial charges
2.29
Fair value changes on interest rate swaps designated as cash flow hedges transfer from OCI
(0.39)
Exchange differences regarded as an adjustment to borrowing costs
4.89
Other borrowing costs
0.55
Finance costs expensed in profit or loss
26
16.58
Income Tax Expense
Particulars
a) Income tax expense
Current tax
(Decrease)/ Increase in deferred tax liabilities
55.07
45.52
Income tax expense
55.07
337.73
305.37
(b) Reconciliation of tax expense and the accounting profit multiplied by India’s tax rate:
Particulars
Profit before income tax expense
India tax rate
Tax at the Indian tax rate
Tax effect of amounts which are not deductible/ (allowable) in calculating taxable income :
Exempt Income
Corporate social responsibility expenditure
Employee share based expense
Expenses not deductible for tax purposes
Other items
Deduction under various Section of Income Tax Act,1961
Dividend to be taxed at lower rate
Long Term Capital Gains on sale of land taxed at different rate
Interest income on loan to WEOMA Trust eliminated in financial statement
Provision for Impairment of Investment in joint venture
Other
Difference in overseas tax rate
Adjustment to current tax of prior periods
Income tax expense
2.44
20.62
250.30
45.52
Total deferred tax expense/(benefit)
5.92
250.30
292.21
Deferred tax
2.50
(0.78)
Year ended
31st March, 2016
292.21
Total current tax expense
10.54
(r in Crore)
Year ended
31st March, 2017
Current tax on profits for the year
(r in Crore)
Year ended
31st March, 2016
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
34.608%
34.608%
(0.77)
(12.67)
5.96
6.27
1,148.70
397.54
5.40
-
(73.57)
1,028.70
356.01
2.42
1.58
(50.22)
(39.44)
(12.76)
1.18
0.73
-
0.56
(0.22)
(1.50)
-
(1.06)
42.38
21.77
337.73
305.37
(1.29)
(5.20)
Financial Statements
25 Finance Costs
NOTES
192
To Consolidated Financial Statements for the year ended 31st March, 2017
27
Fair Value Measurements
(a)
Financial Instruments by category
Particulars
Note
FVPL
31st March, 2017
FVOCI
Amortized
Cost
Financial Assets
Investments
Equity Instruments
6(a)
0.14
-
Mutual funds
6(a)
401.68
-
Trade receivables
6(b)
-
Loans
6(c)
Bonds and debentures
6(a)
Government securities
6(a)
Inter corporate deposits
6(a)
Derivative financial assets
Security deposits
Cash and bank balances
Fixed deposits
Insurance claim receviable
6(f)
6(f)
6(d),6(e)
6(d),6(e)&6(f)
Total financial assets
Financial Liabilities
Borrowings
-
-
-
401.82
13(c)
-
Capital creditors
13(b)
Total financial liabilities
-
-
13(b)
Others
-
13(a)
Derivative financial liabilities
Trade payables
6(f)
-
13(b)
Amortized
Cost
1.47
-
-
364.59
-
-
246.99
-
-
9.85
40.72
-
1.98
2.11
-
147.39
16.29
21.43
-
-
-
-
-
206.33
2.11
690.98
366.06
-
239.07
-
-
696.60
-
-
18.57
-
-
-
3.14
-
-
4.66
958.90
Amortized
Cost
-
-
245.45
-
-
252.09
-
-
8.75
-
5.37
-
-
116.16
-
-
-
-
13.70
-
289.84
4.15
-
24.78
-
0.01
-
-
176.75
-
8.50
-
0.58
60.76
-
14.33
-
-
181.18
740.96
249.97
0.58
497.96
-
332.20
-
-
428.30
-
669.04
-
-
564.42
-
22.65
-
22.02
-
-
-
-
1.81
-
-
-
-
1.81
-
FVOCI
4.52
-
-
1st April, 2015
-
24.78
4.15
-
-
FVPL
-
-
-
-
3.14
-
FVOCI
-
-
-
-
FVPL
(r in Crore)
31st March, 2016
28.32
1.95
-
-
-
5.20
-
-
1.53
-
-
-
1,029.09
-
-
1.53
31.60
0.05
-
4.43
1,019.17
Fair value hierarchy
(b) This section explains the judgements and estimates made in determining the fair values of the financial instruments that
are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed
in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value,
the group has classified its financial instruments into the three levels prescribed under the accounting standard. An
explanation of each level follows underneath the table.
(r in Crore)
Note
Level 1
Level 2
Level 3
Total
Financial assets and liabilities measured at fair value - recurring fair value
measurements as 31st March, 2017
Financial assets
Equity Instruments
6(a)
-
-
0.14
0.14
Mutual funds - growth plan
6(a)
17.71
383.97
-
401.68
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(f)
-
17.71
2.11
-
386.08
0.14
3.14
-
2.11
403.93
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Total financial liabilities
13(b)
-
3.14
-
3.14
3.14
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
193
Note
Level 1
Level 2
Level 3
Total
Financial assets and liabilities measured at amortized cost for which fair value
are disclosed as 31st March, 2017
Financial Assets
Investments
Bonds and debentures (including interest accrued)
6(a)
42.75
-
Inter - corporate deposits (including interest accrued)
6(a)
-
-
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
Total financial liabilities
6(a)
13(a)
-
42.75
-
-
-
-
42.75
147.39
147.39
1.98
149.37
239.07
-
239.07
1.98
192.12
239.07
239.07
Financial assets and liabilities measured at fair value - recurring fair value
measurements as 31st March, 2016
Financial assets
Listed equity instrument
Mutual funds - growth plan
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(a)
6(a)
16.32
1.47
348.27
-
-
364.59
1.47
6(f)
-
17.79
4.15
352.43
-
4.15
370.22
-
1.42
-
1.42
-
1.81
-
1.81
-
26.46
116.16
116.16
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Foreign-exchange Interest Rate Swaps used as designated Interest rate hedges
contracts
13(b)
13(b)
Total financial liabilities
-
0.39
-
0.39
Financial assets and liabilities measured at amortized cost for which fair value
are disclosed as 31st March, 2016
Financial Assets
Investments
Bonds (including interest accrued)
6(a)
26.46
-
Inter - corporate deposits (including interest accrued)
6(a)
-
-
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
6(a)
13(a)
-
26.46
-
-
5.37
5.37
-
121.53
147.99
-
332.20
332.20
Financial Statements
(r in Crore)
NOTES
194
To Consolidated Financial Statements for the year ended 31st March, 2017
(r in Crore)
Note
Total financial liabilities
Level 1
Level 2
-
Level 3
Total
-
332.20
-
-
332.20
Financial assets and liabilities measured at fair value - recurring fair value
measurements as 1st April, 2015
Financial assets
Listed of equity instruments
Mutual funds - growth plan
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(a)
6(a)
6(f)
4.52
5.60
-
239.85
-
4.52
245.45
10.12
240.43
0.58
-
250.55
0.58
-
0.36
-
0.36
-
1.53
-
1.53
-
26.16
60.76
60.76
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Foreign-exchange Interest Rate Swaps used as designated Interest rate hedges
contracts
13(b)
13(b)
Total financial liabilities
-
1.17
-
1.17
Financial assets and liabilities measured at amortized cost for which fair value
are disclosed as 1st April, 2015
Financial Assets
Investments
Bonds (including interest accrued)
6(a)
26.16
-
Inter corporate deposits (including interest accrued)
6(a)
-
-
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
Total financial liabilities
6(a)
13(a)
-
26.16
-
-
-
-
0.01
60.77
428.30
428.30
0.01
86.93
428.30
428.30
The fair value of financial instruments as referred to in note above has been classified into three categories depending
on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market
for identical assets or liabilities (level 1 measurement) and lowest priority to unobservable inputs (level 3 measurements).
The categories used are as follows:
Level 1: Financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds,
mutual funds, bonds and debentures, that have quoted price and NAV published by the mutual funds. The fair value of all
equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the
reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is considered here.For example, the fair value of forward exchange contracts, currency swaps and interest
rate swaps is determined by discounting estimated future cash flows using a risk-free interest rate.
Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs
that are not based on observable market data (unobservable inputs). When the fair value of unquoted instruments cannot
be measured with sufficient reliability, the group carries such instruments at cost less impairment, if applicable.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
The Group’s policy is to recognize transfers into and transfer out of fair value hierarchy levels as at the end of the reporting
period.
(c) Fair value of financial assets and liabilities measured at amortised cost
Note
Financial Assets
Investments
Bonds and debentures
Government securities
Inter - corporate deposits
Total financial assets
Financial liabilities
Borrowings
Total financial liabilities
31st March, 2017
Carrying
Value
Fair Value
(r in Crore)
31st March, 2016
Carrying
Value
Fair Value
1st April, 2015
Carrying
Value
Fair Value
6(a)
40.72
42.76
24.78
26.46
24.78
26.16
6(a)
147.39
147.39
116.16
116.16
60.76
60.76
6(a)
13(a)
1.98
1.98
5.37
5.37
0.01
0.01
190.09
192.12
146.31
147.99
85.55
86.93
239.07
239.07
332.20
332.20
428.30
428.30
239.07
239.07
332.20
332.20
428.30
428.30
The carrying amounts of trade receivables, trade payables, capital creditors, loans and advances, security deposit, fixed
deposit, insurance claim receivable, other financial liabilities and cash and cash equivalents are considered to be the
same as their fair values, due to their short-term nature.
28
Financial Risk Management
In the course of its business, the group is exposed to a number of financial risks: credit risk, liquidity risk, market risk (including
foreign currency risk and interest rate risk, commodity price risk and equity price risk). This note presents the group’s
objectives, policies and processes for managing its financial risk and capital.
Financial Risks
Board of Directors of the group have approved Risk Management Framework through policies regarding Investment , Borrowing
and Foregin Exchange Management policy. Management ensures the implementation of strategies and achievement of
objectives as laid down by the Board through central treasury function.
Approved Treasury Management Guidelines define and classify risks as well as determine, by category of transaction, specific
approval, execution and monitoring procedures.
In accordance with the aforementioned policies, the group only enters into plain vanilla derivative transactions relating to
assets, liabilities or anticipated future transactions.
(A) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
group. Credit risk arises on liquid assets, financial assets, derivative assets, trade and other receivables.
In respect of its investments, the group aims to minimize its financial credit risk through the application of risk management
policies. Credit limits are set based on a counterparty value. The methodology used to set the list of counterparty limits
includes, counterparty Credit Ratings (CR) and sector exposure. Evolution of counterparties is monitored regularly, taking
into consideration CR and sector exposure evolution. As a result of this review, changes on credit limits and risk allocation
are carried out. The group avoids the concentration of credit risk on its liquid assets by spreading them over several asset
management companies and monitoring of underlying sector exposure.
Trade receivables are subject to credit limits, controls & approval processes. Due to large geographical base & number
of customers, the group is not exposed to material concentration of credit risk. Basis the historical experience, the risk of
default in case of trade receivable is low. Provision is made for doubtful receivables on individual basis depending on the
customer ageing, customer category, specific credit circumstances & the historical experience of the group.
The gross carrying amount of trade receivables is Rs 246.99 Crore as at 31st March, 2017 (Rs. 252.09 as at 31st March,
2016 and Rs. 176.75 Crore as at1st April, 2015).
Financial Statements
195
NOTES
196
To Consolidated Financial Statements for the year ended 31st March, 2017
Reconciliation of loss allowance provision- Trade receivables
Particulars
Loss allowance at the beginning of the year
(r in Crore)
31st March, 2017
31st March, 2016
(0.37)
0.23
3.02
3.39
3.39
Add : Changes in loss allowances
Loss allowance at the end of the year
3.16
Security deposits are interest free deposits given by the group for properties taken on lease. Provision is taken on a case
to case basis depending on circumstances with respect to non recoverability of the amount. The gross carrying amount
of security deposit is Rs. 16.28 Crore as at 31st March, 2017, Rs. 14.05 Crore as at 31st March, 2016 and Rs. 13.61 Crore
as at 1st April, 2015.
Reconciliation of loss allowance provision- Deposits/advances
Particulars
Loss allowance at the beginning of the year
31st March, 2016
(1.00)
1.00
-
1.00
1.00
Add : Changes in loss allowances due to provision
Loss allowance at the end of the year
(r in Crore)
31st March, 2017
-
(B) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market
positions. Due to the dynamic nature of the underlying businesses, group treasury maintains flexibility in funding by
maintaining availability under committed credit lines.
The current ratio of the group as at 31st March, 2017 is 1.96 (as at 31st March, 2016 is 1.60, as at 1st April, 2015 is 1.63)
whereas the liquid ratio of the group as at 31st March, 2017 is 1.08 (as at 31st March, 2016 is 1.01, as at 1st April, 2015 is
0.82)
Maturities of financial liabilities
Particulars
Note
Contractual maturities of financial liabilities 31st March, 2017
Non-derivatives
Borrowings
13(a)
Other Financial Liabilities
13(b)
Trade Payables
Total Non- derivative liabilities
Derivative (Net - Settled)
Foreign exchange forward contracts
Total derivative liabilities
13(c)
13(b)
Less than
1 year
247.58
696.60
23.23
1 year to
2 years to
2 years
3 years
-
-
-
(r in Crore)
3 years
Total
and above
-
-
-
-
247.58
-
696.60
-
23.23
967.41
-
-
-
967.41
3.14
-
-
-
3.14
3.14
-
-
-
3.14
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Note
Less than
1 year
Contractual maturities of financial liabilities 31st March, 2016
Non-derivatives
Borrowings
13(a)
Other financial liabilities
13(b)
Trade payables
Total Non- derivative liabilities
Derivative (Net - Settled)
Foreign exchange forward contracts
Total derivative liabilities
1 year to
13(c)
2 years
339.42
27.85
-
-
1.81
-
266.93
175.40
339.42
-
669.04
-
1,036.31
-
-
-
1.81
-
-
-
1,036.31
Total
and above
-
-
(r in Crore)
3 years
3 years
-
669.04
13(b)
2 years to
-
27.85
-
-
1.81
-
1.81
Contractual maturities of financial liabilities 1st April, 2015
Non-derivatives
Borrowings
13(a)
Other Financial Liabilities
13(b)
Trade Payables
Total Non- derivative liabilities
Derivative (Net - Settled)
Foreign exchange forward contracts
Total derivative liabilities
13(c)
564.42
26.45
-
175.40
1.53
-
-
-
442.33
-
564.42
-
1,033.20
-
-
-
1.53
-
-
-
857.79
13(b)
-
-
26.45
-
-
1.53
-
1.53
(C) Market Risk
The group is exposed to risk from movements in foreign currency exchange rates, interest rates and market prices that
affect its assets, liabilities and future transactions.
(i)
Foreign currency risk
The group is exposed to foreign currency risk from transactions and translation.
Transactional exposures arise from transactions in foreign currency. They are managed within a prudent and systematic
hedging policy in accordance with the group’s specific business needs through the use of currency forwards and
options.
The Group’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 31st
March, 2017.
(r in Crore)
Particulars
Financial assets
Foreign currency debtors for export of goods
Bank balances
Cash on hand
Other receivable / (payable)
Derivative asset
Foreign exchange forward contracts sell foreign currency
Net Exposure to foreign currency risk (assets)
CAD
0.24
EUR
-
GBP
SGD
USD
-
-
60.98
-
0.11
0.06
-
-
0.01
-
-
0.24
-
-
0.11
-
-
0.07
-
-
0.01
-
0.01
VND
THB
-
-
12.58
0.01
0.38
-
-
(8.87)
65.07
-
-
0.01
IDR
-
-
0.04
0.01
-
-
-
0.01
0.01
-
0.05
Financial Statements
Particulars
197
NOTES
198
To Consolidated Financial Statements for the year ended 31st March, 2017
(r in Crore)
Particulars
Financial liabilities
Foreign currency Creditors for Import of goods and services
EUR
LKR
GBP
AUD
USD
SAR
SGD
0.02
0.11
1.30
-
26.49
3.91
0.15
-
-
-
-
177.40
-
-
Foreign Currency Loan
Derivative liabilities
Foreign exchange forward contracts buy foreign currency
(1.86)
Net Exposure to foreign currency risk (liabilities)
(1.84)
Foreign exchange Option contracts buy option
-
-
-
(1.19)
-
0.11
(62.09)
(3.91)
1.30
-
(13.46)
(5.10)
-
-
128.34
-
3.91
0.15
The Group’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 31st March,
2016.
Particulars
Financial assets
Foreign currency debtors for export
of goods
ARS
BDT
CAD
EUR
GBP
SGD
USD
VND
0.01
-
-
0.19
2.02
-
-
61.82
-
-
8.82
0.01
0.02
Bank balances
Cash on hand
Other receivable / (payable)
(r in Crore)
AED
-
-
-
-
-
-
-
-
1.88
0.01
0.75
0.01
-
-
IDR
-
-
0.01
0.40
-
-
-
-
0.01
0.01
0.01
-
0.02
-
-
-
-
-
-
-
(1.23)
-
-
0.02
0.01
0.01
0.19
4.67
0.02
0.01
69.81
0.01
0.02
Derivative asset
Foreign exchange forward contracts
sell foreign currency
Net Exposure to foreign currency
risk (assets)
(r in Crore)
Particulars
Financial liabilities
Foreign currency creditors for import of goods and services
Foreign Currency Loan
Other receivable / (payable)
Derivative liabilities
BDT
LKR
GBP
AUD
USD
IDR
0.10
0.06
1.02
-
100.55
-
-
-
0.08
0.01
52.41
0.05
-
-
-
-
127.03
-
Foreign exchange forward contracts buy foreign currency
-
-
-
(4.83)
(42.11)
-
Foreign exchange option contracts buy option
-
-
-
(4.83)
(12.72)
-
0.10
0.06
1.11
(9.65)
225.16
0.05
Net Exposure to foreign currency risk (liabilities)
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
The Group’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 1st April,
2015.
(r in Crore)
Particulars
Financial assets
Foreign currency debtors for export
of goods
AED
ARS
AUD
EUR
GBP
SGD
USD
VND
IDR
THB
0.01
-
-
-
-
-
47.19
-
-
-
Others
-
Bank balances
Cash on hand
Other receivable / (payable)
-
-
-
-
-
-
-
-
-
-
0.05
0.53
-
-
-
-
2.59
0.01
0.01
0.04
-
-
-
0.01
0.01
0.01
0.02
0.03
0.01
-
0.02
0.84
-
-
0.14
-
-
-
-
-
-
-
-
-
-
0.02
0.01
0.01
0.05
0.06
0.02
51.19
0.01
0.01
Derivative asset
Net Exposure to foreign currency
risk (assets)
-
-
-
-
0.14
(r in Crore)
Particulars
BDT
EUR
GBP
SGD
USD
AUD
THB
IDR
Foreign currency creditors for import of goods
and services
-
0.65
1.49
0.01
107.00
3.89
0.01
-
Foreign currency Creditors for Capital goods
-
-
-
-
0.87
-
-
-
Foreign Currency Loan
-
Financial liabilities
-
-
-
117.51
-
-
-
0.04
-
-
-
-
-
0.13
0.01
-
-
-
-
-
-
-
-
(3.22)
-
-
(23.68)
(1.16)
-
-
Bank Balances
Other receivable / (payable)
Derivative liabilities
Foreign exchange forward contracts buy foreign
currency
Foreign exchange option contracts buy option
Net Exposure to foreign currency risk
(liabilities)
-
-
-
-
(20.76)
(2.73)
-
-
0.01
(2.53)
1.49
0.01
180.94
-
0.01
0.13
Excludes Loans payable of Rs. 178.87 Crore [USD 27,000,000] (Rs. 262.49 Crore [USD 42,000,000]) assigned to hedging
relationship against highly probable forecast sales. The Cash flows are expected to occur and impact the Statement of
Profit and Loss within the period of 1 year ( Previous year: 2 years).
(r in Crore)
Particulars
USD Sensitivity
INR/USD Increase by 6% (31 March 2016-5%)
INR/USD Decrease by 6% (31 March 2016-5%)
AUD Sensitivity
INR/AUD Increase by 6% (31 March 2016-6%)
INR/AUD Decrease by 6% (31 March 2016-6%)
Impact on profit after tax
2017
31st March,
Impact on other component of equity
2016
2017
31st March,
(5.10)
(6.83)
6.83
(2.62)
(1.75)
-
-
0.20
0.32
5.10
-
-
2.62
2016
(0.20)
1.75
(0.32)
Financial Statements
199
NOTES
200
To Consolidated Financial Statements for the year ended 31st March, 2017
ii)
Interest Rate Risk
The group is exposed primarily to fluctuation in USD interest rates. Interest rate risk on financial debt is managed
through interest rate swaps.
The group manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Under these swaps,
the group agrees with other parties to exchange, at specified intervals (mainly quarterly), The difference between fixed
contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.
The group’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as
defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change
in market interest rates.
The exposure of the group’s borrowing to interest rate changes at the end of the reporting period are as follows:
Particulars
Variable rate borrowings
31st March, 2016
53.30
31.72
47.92
239.07
332.20
428.30
185.77
Fixed rate borrowings
Total borrowings
Bank Overdrafts,
Bank Loans
Interest rate Swaps
(Notional principal
amount)
Net Exposure to
Cash Flow Interest
rate Risk
300.48
1st April, 2015
380.38
As at the end of the reporting period, the group had the following variable rate borrowings and interest rate swap contracts
outstanding:
Particulars
(r in Crore)
31st March, 2017
31st March, 2017
Weighted
Average
Interest Rate
Balance
% of Total
Loans
3.40%
185.77
77.70%
-
-
-
185.77
31st March, 2016
Weighted
Average
Interest Rate
Balance
% of Total
Loans
2.88%
300.48
90.45%
-
1.25%
(89.64)
-
-
210.84
1st April, 2015
Weighted
Average
Interest Rate
Balance
% of Total
Loans
2.95%
380.38
88.81%
-
1.25%
(131.39)
-
-
-
248.99
-
Financial assets classified at amortized cost have fixed interest rate. Hence, the group is not subject to interest rate risk
on such financial assets.
Sensitivity
Particulars
Interest rates - Increase by 50 basis point (50 bps)
Interest rates - decrease by 50 basis point (50 bps)
(r in Crore)
Impact on profit after tax
31st March,
2017
0.61
(0.61)
31st March,
2016
0.98
(0.98)
Impact on other component of equity
31st March,
2017
-
-
31st March,
2016
(0.29)
0.29
iii) Price risk
Mutual fund Net Asset Values ( NAVs) are impacted by a number of factors like interest rate risk, credit risk, liquidity
risk , market risk in addition to other factors. A movement of 1% in NAV on either side can lead to a gain/loss of Rs.
4.01 Crore on the overall portfolio as at 31st March, 2017 and Rs. 3.64 Crore as at 31st March, 2016.
Impact of hedging activities
Derivate Asset and Liabilities through Hedge Accounting
Derivative Financial Instruments
The group’s derivatives mainly consist of currency forwards and options ; interest rate swaps. Derivatives are mainly used
to manage exposures to foreign exchange, interest rate and commodity price risk as described in section Market risk
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Derivatives are initially recognised at fair value. They are subsequently remeasured at fair value on a regular basis
and at each reporting date as a minimum, with all their gains and losses, realised and unrealised, recognised in the
statement of Profit and Loss unless they are in a qualifying hedging relationship.
Hedge Accounting
The group designates and documents certain derivatives and other financial assets or financial liabilities as hedging
instruments against changes in fair values of recognised assets and liabilities (fair value hedges), highly probable forecast
transactions (cash flow hedges). The effectiveness of such hedges is assessed at inception and verified at regular
intervals.
Fair value hedges
The group uses fair value hedges to mitigate foreign currency and interest rate risks of its recognised assets and
liabilities.
Changes in fair values of hedging instruments designated as fair value hedges and the adjustments for the risks being
hedged in the carrying amounts of the underlying transactions are recognised in the statement of profit and loss.
The group uses cash flow hedges to mitigate a particular risk associated with a recognised asset or liability or highly
probable forecast transactions, such as anticipated future export sales, purchases of equipment and raw materials
The effective part of the changes in fair value of hedging instruments is recognised in other comprehensive income, while
any ineffective part is recognised immediately in the statement of Profit and Loss.
Type of hedge and risks
31st March, 2017
Nominal value
Assets
Liabilities
Carrying amount of
Hedging Instrument
Assets
Maturity
date
Hedge
ratio
effectiveness
Weighted
average strike
price/rate
Changes in
fair value
of hedging
instrument
Change in the value
of hedged item used
as the basis for
recognising hedge
effectiveness
1.24
(1.24)
0.49
(0.49)
Liabilities
Cash flow Hedge
Foreign Exchange Risk
April
2017March
2018
1:1
April
2017February
2018
1:1
1 USD - Rs.
67.6804
1 AUD - Rs.
52.0500
1 EUR - Rs.
71.2450
Foreign Exchange Forward
Contracts
86.14
16.78
2.47
(0.52)
Foreign Exchange Options
Contracts
50.70
17.37
1.16
0.07
-
48.36
-
(1.69)
April
2017July 2017
1:1
1 USD - Rs.
71.6750
(1.57)
1.57
Foreign Exchange Forward
Contracts
123.08
48.89
0.90
(0.20)
1:1
(1.10)
1.81
17.55
0.02
0.72
USD 1 - Rs.
68.4673
AUD 1 - Rs.
49.4850
1.10
Foreign Exchange Options
Contracts
April
2016February
2017
0.16
(0.16)
Foreign Exchange Forward
Contracts
(For Foreign Currency Loan)
1 USD - Rs.
67.1404
1 AUD - Rs.
51.2200
31st March, 2016
Cash flow Hedge
Foreign Exchange Risk
April
2016March
2017
1:1
USD 1 - Rs.
66.8584
AUD 1 - Rs.
47.4090
Financial Statements
201
NOTES
202
To Consolidated Financial Statements for the year ended 31st March, 2017
Type of hedge and risks
Interest Rate Risk
Interest Rate Swap
Nominal value
Assets
Carrying amount of
Hedging Instrument
Liabilities
Assets
Maturity
date
Hedge
ratio
effectiveness
Weighted
average strike
price/rate
Changes in
fair value
of hedging
instrument
Change in the value
of hedged item used
as the basis for
recognising hedge
effectiveness
0.78
(0.78)
Liabilities
-
89.43
-
(0.39)
April
2016February
2017
1:1
1.25%
Foreign Exchange Forward
Contracts (Foreign Currency
Loan)
1.35
53.00
(19.58)
(0.11)
1:1
0.15
-
53.00
-
1.76
April
2016February
2017
1:1
USD 1 - Rs.
68.8736
ZAR 1 - Rs.
4.4355
(0.15)
Foreign Exchange Options
Contracts (Foreign Currency
Loan)
April
2016February
2017
USD 1 - Rs.
66.4009
1.76
(1.76)
Foreign Exchange Forward
Contracts
7.47
28.06
0.01
(0.40)
April
2015 to
October
2015
1:1
(1.03)
1.03
Foreign Exchange Options
Contracts
27.33
23.49
0.08
0.50
April
2015 to
November
2015
1:1
USD 1 - Rs.
63.2336
AUD 1 - Rs.
50.8264
EUR 1 - RS.
72.8490
USD 1 - Rs.
62.1052
AUD 1 - Rs.
48.9800
(0.59)
0.59
-
131.25
-
(1.17)
April
2015February
2017
1:1
1.25%
0.60
(0.60)
5.44
-
0.03
-
April
2015December
2016
1:1
ZAR 1 - Rs.
5.1514
(0.17)
0.17
Fair Value hedge
Foreign Exchange Risk
1st April, 2015
Cash flow Hedge
Foreign Exchange Risk
Interest Rate Risk
Interest Rate Swap
Fair Value hedge
Foreign Exchange Risk
Foreign Exchange Forward
Contracts (Foreign Currency
Loan)
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
203
Type of hedge
Change in the value of
the hedging instrument
recognised in other
comprehensive income
(r in Crore)
Hedge
ineffectiveness
recognised in profit
or loss
Amount reclassified
from cash flow
hedging reserve to
profit or loss
Line item affected in
Statement of Profit
and Loss because of
the reclassification
31st March, 2017
Cash Flow
Foreign Exchange Risk
1.74
-
(1.95)
Other expenses
Foreign Exchange Risk
(1.57)
-
1.65
Finance cost
Interest Rate Risk
-
-
(0.39)
Finance cost
(r in Crore)
Type of hedge
Change in the value of
the hedging instrument
recognised in other
comprehensive income
Hedge
ineffectiveness
recognised in profit
or loss
Amount reclassified
from cash flow
hedging reserve to
profit or loss
Line item affected in
Statement of Profit
and Loss because of
the reclassification
0.85
Other expenses
(0.04)
Finance cost
31st March, 2016
Cash Flow
Foreign Exchange Risk
Interest Rate Risk
Foreign Exchange Risk
29
–
1.61
–
_
(1.55)
Finance cost
Capital Management
(a) Risk Management
The group’s capital management is driven by group’s policy to maintain a sound capital base to support the continued
development of its business. The Board of Directors seeks to maintain a prudent balance between different components
of the group’s capital. The Management monitors the capital structure and the net financial debt at individual currency
level. Net financial debt is defined as current and non-current financial liabilities less cash and cash equivalents and shortterm investments.
The debt equity ratio highlights the ability of a business to repay its debts. As at 31st March, 2017, the ratio was 10.22%.
The Group complies with all statutory requirement as per the extant regulations.
(r in Crore)
Particulars
31st March 2017
31st March 2016
1st April 2015
Total equity
2,339.02
2,031.70
1,814.10
10.22%
16.35%
23.61%
31st March, 2017
31st March, 2016
451.59
435.43
Net Debt
Net Debt to equity ratio
1.26
(0.78)
239.08
332.20
(b)Dividend
Particulars
Equity shares
Interim dividend for the year
428.31
(r in Crore)
Financial Statements
Disclosure of effects of Hedge Accounting on Financial Performance
NOTES
204
To Consolidated Financial Statements for the year ended 31st March, 2017
30
Segment Information
(i) (ii) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (“CODM”) of the group. The CODM, who is responsible for allocating resources and assessing performance
of the operating segments, has been identified as the Managing Director and CEO of the group. The CODM examine
the group performance from a geographic perspective and has identified two of its following business as identifiable
segments:
a)
b)
India - this part of the business includes domestic consumer goods
International
The amount of the group’s revenue is shown in the table below.
Particulars
(r in Crore)
31st March, 2017
31st March, 2016
Segment revenue (Sales and other operating income)
India
4,579.45
4,679.58
International
1,356.47
1,344.87
Total segment revenue
5,935.92
6,024.45
Less : Inter segment revenue
Total
6,024.45
Revenue from similar products from external customers
Particulars
Edible
Hair Oils
Personal care
Others
Total
5,935.92
(r in Crore)
31st March, 2017
31st March, 2016
1,419.85
1,366.83
404.14
381.21
3,293.82
818.11
5,935.92
3,427.32
849.09
6,024.45
The country is domicile in India. The amount of its revenue from external customers broken down by location of the
customers is shown in the table below:
Particulars
31st March, 2017
Bangladesh
591.32
India
Vietnam
Others
Segment results (Profit before tax and interest)
4,579.45
380.15
385.00
5,935.92
(r in Crore)
31st March, 2016
4,679.58
592.23
303.90
448.74
6,024.45
India
1,058.83
Total segment results
1,257.49
1,170.52
91.21
120.67
International
Less : (i) Finance cost
(ii) Other un-allocable expenditure net of unallocable income
198.66
16.58
963.12
207.40
20.62
Profit before tax
1,149.70
1,029.23
Profit Before Tax after share of profit/ (loss) of Joint Venture
1,148.70
1,028.70
Share of profit/ (loss) of Joint Venture
(1.00)
(0.53)
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Segment assets
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
1,695.72
1,369.68
1,376.76
989.36
1,030.43
India
International
914.44
Unallocated
Total segment assets
981.06
967.61
782.13
3,599.52
3,381.17
3,126.50
India
703.05
723.07
670.58
Unallocated
269.80
324.73
Segment liabilities
International
287.65
Total segment liabilities
1,260.50
301.67
220.98
420.84
1,349.47
1,312.40
Geographical non-current assets (Property, plant and equipment, capital work in progress, investment properties,
goodwill, other intangible assets and other non-current assets) are allocated based on the location of the assets.
Information regarding geographical non-current assets is as follows:
Particulars
India
As at
31st March, 2017
As at
31st March, 2016
50.43
55.25
544.54
Bangladesh
Vietnam*
Others
31
As at
1st April, 2015
519.84
59.48
481.66
500.51
486.02
1,114.08
1,148.40
1,121.78
37.45
45.84
56.44
* Includes Goodwill on consolidation amounting to Rs. 453.92 as at 31st March, 2017, Rs. 473.03 Crore as at 31st March,
2016 and Rs. 461.29 Crore as at 1st April, 2015.
Interests in Other Entities
(a)
546.80
(r in Crore)
Subsidiaries
The group’s subsidiaries at 31st March, 2017 are set out below. Unless otherwise stated, they have share capital
consisting solely of equity shares that are held directly by the group, and the proportion of ownership interests held
equals the voting rights held by the group. The country of incorporation or registration is also their principal place of
business.
Name of Entity
Place of
Business/
Country of
Incorporation
Ownership interest held by the group
31st March, 31st March,
2017
2016
%
%
1st April,
2015
Ownership interest held by the non
controlling interest
31st March,
2017
31st March,
2016
1st April,
2015
%
%
%
%
Subsidiary companies:
Marico Bangladesh Limited (MBL)
Bangladesh
90
90
90
10
10
10
UAE
100
100
100
Nil
Nil
Nil
Bangladesh
100
100
100
Nil
Nil
Nil
Egypt
100
100
100
Nil
Nil
Nil
Marico Malaysia Sdn. Bhd. (MMSB)
Malaysia
100
100
100
Nil
Nil
Nil
MEL Consumer Care SAE (MELCC)
Egypt
100
100
100
Nil
Nil
Nil
Marico Egypt Industries Company (MEIC)
Egypt
100
100
100
Nil
Nil
Nil
Marico Middle East FZE (MME)
Marico Bangladesh Industries Limited (MBLIL)
Egyptian American Company for Investment and
Industrial Development SAE (EAIIDC)
Financial Statements
Particulars
205
NOTES
206
To Consolidated Financial Statements for the year ended 31st March, 2017
Name of Entity
Place of
Business/
Country of
Incorporation
Ownership interest held by the group
31st March, 31st March,
2017
2016
Ownership interest held by the non
controlling interest
1st April,
2015
31st March,
2017
31st March,
2016
1st April,
2015
Marico South Africa Consumer Care (Pty) Limited
(MSACC)
South Africa
100
100
100
Nil
Nil
Nil
Marico South Africa (Pty) Limited (MSA)
South Africa
100
100
100
Nil
Nil
Nil
Marico South East Asia Corporation (Formerly known
as International Consumer Products Corporation)
Vietnam
100
100
100
Nil
Nil
Nil
Beaute Cosmetique Societe Par Actions (BCS)
Vietnam
Nil
Nil
99
Nil
Nil
1
Thuan Phat Foodstuff Joint Stock company (TPF)
Vietnam
Nil
99.99
99.99
Nil
0.01
0.01
Marico Consumer Care Limited (MCCL)
India
100
100
100
Nil
Nil
Nil
Marico Innovation Foundation (MIF)
India
NA
NA
NA
NA
NA
NA
Egypt
99
99
99
1
1
1
Subsidiary firm:
MEL Consumer Care & Partners - Wind (Through
MELCC)
During the previous year ended 31st March, 2015, Marico South East Asia Corporation (formerly known as International
Consumer Product Corporation), a subsidiary of the Company in Vietnam has bought back its shares resulting into
increase in the percentage of the Company’s shareholding to 100%.
The principle activity of the group is consumer goods business.
Marico Innovation Foundation (“MIF”), a company incorporated under Section 25 of the Companies Act, 1956 (being
a private company limited by guarantee not having share capital) primarily with an objective of fuelling and promoting
innovation in India, is a wholly owned subsidiary of the Company with effect from 15th March, 2013. Based on control
assessment carried out by Marico Limited, the same is not consolidated as per IND AS 110
During the year ended 31st March, 2016, Marico South East Asia Corporation (formerly known as International Consumer
Product Corporation) a subsidiary of the Company divested its entire stake in Beaute Cosmetique Societe Par Actions
(BCS) on 14th May, 2015. Accordingly the financial statements of BCS are consolidated from 1st April, 2015 to 14th May,
2015. The profit on sale of this divestment amounting to Rs. 9.62 Crore has been included in Other Income under the
Statement of Profit and Loss Account.
(b) Interest in joint ventures
Name of entity
Carrying
Amount
as at 31st
March, 2017
Carrying
Amount
as at 31st
March, 2016
-
0.82
-
Zed Lifestyle Pvt Limited
16.30
-
-
Total equity accounted investments
16.30
0.82
-
Bellezimo Professionale Products
Private Limited
Carrying
Amount
as at 1st
April, 2015
Accounting
method
Share in Profit/(loss)
31st March,
2017
31st March,
2016
1st April,
2015
Equity
Method
(1.01)
(0.53)
-
Equity
Method
0.01
-
-
(1.00)
(0.53)
-
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Financial Statements
32
207
Related Party Transactions
I
Name of related parties and nature of relationship:
(a)
Joint venture:
Bellezimo Professionale Products Private Limited
Zed Lifestyle Pvt Limited
(b)
Key management personnel (KMP):
Mr. Saugata Gupta, Managing Director and CEO
Mr. Harsh Mariwala, Chairman and Non Executive Director
Mr. Rajeev Bakshi, Independent Director
Mr. Atul Choksey, Independent Director
Mr. Nikhil Khattau, Independent Director
Mr. Anand Kripalu, Independent Director
Mr. Rajen Mariwala, Non Executive Director
Mr. B.S. Nagesh, Independent Director
Ms. Hema Ravichandar, Independent Director
Individual holding directly / indirectly an interest in voting power and their relatives (where transactions have taken
place) - Significant Influence:
(c)
Mr.Harsh Mariwala, Chairman & Non Executive Director
Mr.Rishabh Mariwala, son of Mr.Harsh Mariwala
Post employment benefit controlled trust
(d)
Marico Limited Employees Provident Fund
Marico Limited Employees Gratuity Fund
Others - Entities in which above (c) has significant influence and transactions have taken place:
(e)
Marico Kaya Enterprises Limited (upto 18th April, 2015)
Kaya Limited
Kaya Middle East FZE
II Transactions with related parties
The following transactions occurred with related parties:
Key management personnel compensation
Particulars
(r in Crore)
31st March, 2017
31st March, 2016
0.19
0.16
Employee share-based payment
11.83
3.88
Total compensation
16.59
8.07
2.19
1.54
Short-term employee benefits
Post-employment benefits
Remuneration / Sitting fees to Non-Executive Director (Exluding Non-Executive Chairman)
4.57
4.03
The above remuneration to Key Management personnel compensation does not include contribution to gratuity fund, as
this contribution is a lump sum amount for all relevant employees based on actuarial valuation.
Contribution to post employment benefit controlled trust (refer note 15).
NOTES
208
To Consolidated Financial Statements for the year ended 31st March, 2017
Particulars
(r in Crore)
Joint Venture
(Referred in I (a), (b) and (c) above)
Others
(Referred in I (e) and (f) above)
31st March, 2017
31st March, 2016
31st March, 2017
31st March, 2016
Expenses paid on behalf of related parties
-
-
0.61
1.24
Marico Kaya Enterprises Limited
-
-
Kaya Limited
Others
Expenses paid by Related parties on behalf of Marico Limited
Kaya Middle East FZE
Sale of goods
Kaya Limited
Sale of assets
Others
Lease Rental Income
Kaya Limited
Others
Loans and Advances Recovered
-
-
-
-
-
-
-
0.11
0.11
-
-
0.87
0.72
-
-
Donation Given / CSR Activities
0.46
2.15
-
Loans given
1.50
Provision for Impairment of Investment
0.08
Bellezimo Professionale Products Private Limited
Bellezimo Professionale Products Private Limited
Professional fees paid
Mr. Harsh Mariwala, Chairman and Non Executive Director
Others
1.50
0.08
-
-
-
0.01
0.05
1.35
-
0.71
-
0.27
Kaya Limited
-
-
Investments made during the year
Deposit Taken
0.24
1.99
-
0.46
0.87
0.24
1.95
-
Marico Innovation Foundation
0.11
-
Others
0.27
0.23
0.11
-
Bellezimo Professionale Products Private Limited
0.18
-
-
-
1.06
0.23
-
Kaya Limited
Marico Kaya Enterprises Limited
0.61
1.35
2.15
-
-
-
1.95
-
-
1.64
0.30
-
-
-
-
-
0.10
-
-
0.10
-
-
-
-
-
-
6.36
6.36
-
0.01
0.01
-
6.35
6.35
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
III Outstanding balances
Particulars
(r in Crore)
Joint Venture
(Referred in I (a), (b) and (c) above)
For the year ended
As at
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties
Trade receivables
Kaya Limited
Interest Accrued on Loan and advances
Bellezimo Professionale Products Private Limited
Security Deposit Payable
Kaya Limited
Dues Payable
Others
31st March,
2017
As at
31st March,
2016
-
0.11
0.11
-
-
-
-
-
-
-
-
As at
As at
1st April,
2015
-
-
Others
(Referred in I (g) above)
For the year ended
As at
31st March,
2017
31st March,
2016
-
0.12
0.12
-
-
-
-
-
-
0.10
0.10
-
0.10
-
As at
1st April,
2015
-
-
-
0.10
-
-
-
-
-
0.11
-
0.74
0.60
1.97
-
0.87
0.72
0.62
0.11
(e) Loans to/from related parties
Kaya Limited
Beginning of the year
Expense incurred on behalf of kaya limited
Rent Income
Remittance received
Balance at the end
Bellezimo Professionale Products Private Limited
Beginning of the year
Loan given during the year
Balance at the end
Others
-
-
-
-
-
-
1.62
-
-
-
-
-
-
-
-
-
1.06
(1.95)
(1.64)
0.27
0.74
-
-
-
-
1.27
(3.26)
0.60
-
-
-
-
-
-
-
-
-
-
-
-
0.06
All the transactions are at arms length and in normal course of business.
Loans and advances in the nature of loans to joint venture :
Disclosure for loans and advances in terms of Securities & Exchange Board of India (Listing obligation and disclosure
requirements) Regulations 2015.
Particulars
Loans to joint venture:Bellezimo Professionale Products Private Limited
Balance as at the year end
Maximum amount outstanding at any time during the year
-
-
0.61
1.62
Terms and conditions of transaction with related parties
-
The joint ventures do not hold any shares in the Company.
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
1.62
-
-
1.62
-
-
Financial Statements
209
NOTES
210
To Consolidated Financial Statements for the year ended 31st March, 2017
33
Contingent Liabilities
Particulars
Disputed tax demands / claims:
Sales tax / VAT
Income tax
Service tax
Customs duty
Agricultural produce marketing cess
Employees state insurance corporation
Excise duty on subcontractors
Excise duty on CNO dispatches (Refer note below)
Excise duty on By-product
Excise duty on Oats
Claims against the Company not acknowledged as debts
Corporate guarantees given to banks on behalf of Broadcast Audience Research
Council (BARC)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
116.55
94.01
47.55
0.17
0.17
0.17
59.90
0.31
-
0.18
0.54
-
60.35
0.31
9.69
0.18
0.54
47.14
0.31
9.69
0.18
0.54
685.50
565.62
18.97
19.66
18.74
0.60
0.60
0.60
4.68
20.23
4.67
4.67
It is not practicable for the group to estimate the timings of cash outflows, if any, in respect of the above contingent liabilities
pending resolution of the respective proceedings.
Note:
This contingent liability pertained to a possible obligation in respect of pure coconut oil packs up to 200 ml. This claim had
been contested by the excise department. Based on the various judicial pronouncements, management believed that the
probability of success in the matter was more likely than not and accordingly, the possible excise obligation was treated as
a contingent liability in accordance with requirements of Indian Accounting Standard (Ind AS) 37 “Provisions, Contingent
Liabilities and Contingent Assets”. The possible obligation of Rs. 563.73 Crores as at 31st March, 2016 (Rs. 443.85 Crores
as at April 1, 2015) for the clearances made after June 3, 2009 (i.e. the date of issue of Board circular) till March 31, 2016 and
Rs. 121.77 Crores as at March 31, 2016 (Rs. 121.77 Crores as at April 1, 2015) for clearances made prior to June 3, 2009
was disclosed as contingent liability to the extent of the time horizon covered by show cause notices issued by the excise
department within the normal period of one year (from the date of clearance) as per the excise laws.
The aforementioned amount has not been considered under contingent liability as on 31st March 2017 as the matter has
now been settled by orders of different adjudication authorities in the current financial year holding that clearance of pure
coconut oil packs up to 200ml merits classification under chapter 15 and not under chapter 33 as contemplated by the excise
department and accordingly the excise department has also withdrawn its circular dated June 3,2009 .
Consequently pending show cause notices issued by the excise authorities will not survive and therefore the contingent
liability has been deleted from current financial year.
34Commitments
(a)
Capital commitments: Particulars
Estimated amount of contracts remaining to be executed on capital account and
not provided for (net of advances)
Total
(b)
Non-cancellable operating leases
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
59.09
59.80
14.60
59.09
59.80
14.60
The group’s significant leasing arrangements are in respect of residential flats, office premises, warehouses, vehicles etc.
taken on lease. The arrangements range between 11 months to 3 years and are generally renewable by mutual consent
or mutually agreeable terms. Under these arrangements refundable interest-free deposits have been given.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
211
Particulars
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
- not later than one year
30.09
24.21
18.86
- later than five years
16.85
20.91
Lease rental payments recognized in the Statement of Profit and Loss.
In respect of assets taken on non-cancellable operating lease:
44.22
33.57
33.45
Lease obligations
Future minimum lease rental payments
- later than one year but not later than five years
Total
35
63.20
110.14
55.01
100.13
25.00
0.16
44.02
Share-Based Payments
(a) Employee stock option plan
The Corporate Governance Committee of the Board of Directors of Marico Limited had granted stock options to certain
eligible employees of the Company and it’s subsidiaries pursuant to the Marico Employees Stock Options Scheme 2007
(“the Scheme”). Each option represents 1 equity share in the Company. The vesting period and the exercise period under
the Scheme was not less than one year and not more than 5 years. The Scheme was administered by the Corporate
Governance Committee of the Board comprising Independent Directors. All stock options granted under the Scheme
were exercised on 10th June, 2015.
Marico ESOS 2007
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Balance as at beginning of the year
-
103,600
212,600
Less : Exercised during the year (prior to bonus issue, refer Note 12 (a))
-
103,600
109,000
-
-
103,600
-
-
0.03
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Granted during the year
Forfeited / lapsed during the year
Balance as at end of the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
-
-
57.46
55.40
During the year ended 31st March, 2015, the Company implemented the Marico Employee Stock Option Scheme 2014
(“Marico ESOS 2014”). Marico ESOS 2014 was approved by the shareholders of the Company at the Extra Ordinary
General Meeting held on 25th March, 2014 enabling the grant of 300,000 stock options to the Chief Executive Officer of
the Company (Currently designated as Managing Director & CEO).
Pursuant to the said approval, on 1st April, 2014 the Company granted 300,000 stock options to the Managing Director &
CEO of the Company, at an exercise price of Re.1 per stock option. Each option represents 1 equity share in the Company.
The vesting period is 2 years from the date of grant and the exercise period is 18 months from the date of vesting. As at
31st March 2016, the aforesaid 300,000 stock options have increased to 600,000 on account of issue of bonus equity
shares by the Company in the ratio of 1:1.
Financial Statements
(r in Crore)
NOTES
212
To Consolidated Financial Statements for the year ended 31st March, 2017
Marico ESOS 2014
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Balance as at beginning of the year
Adjustment on account of bonus issue (Refer note 12 (a))
Granted during the year
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
600,000
300,000
-
-
-
300,000
1.00
-
-
300,000
-
Less : Exercised during the year
300,000
Balance as at end of the year
300,000
600,000
300,000
0.50
1.00
2.00
Forfeited / lapsed during the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
-
-
-
-
-
-
During the year ended 31st March, 2015, the Company implemented the Marico MD CEO Employee Stock Option Plan
2014 (“MD CEO ESOP Plan 2014” or “the Plan”). The MD CEO ESOP Plan 2014 was approved by the shareholders at the
26th Annual General Meeting held on July 30, 2014 enabling grant of stock options not exceeding in the aggregate 0.5%
of the number of issued equity shares of the Company, from time to time, through notification of one more Scheme(s)
under the Plan. Each stock option represents 1 equity share in the Company. The vesting period and the exercise period
under the Plan is not less than one year and not more than 5 years.
Pursuant to the aforesaid approval, on 5th January, 2015, the Company notified Scheme I under the Plan and granted
46,600 stock options to the Managing Director & CEO of the Company, at an exercise price of Re.1 per stock option. The
vesting date for stock options granted under the Scheme I is 31st March, 2017. Further, the exercise period is one year
from the date of vesting. As at 31st March 2016, the said 46,600 stock options have increased to 93,200 on account of
issue of bonus equity shares by the Company in the ratio of 1:1. In view of the implementation of Marico Employee Stock
Option Plan, 2016, as explained below, no further grant of stock options is envisaged under this Plan.
MD CEO ESOP Plan 2014
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Balance as at beginning of the year
Adjustment on account of bonus issue (Refer note 12 (a))
Granted during the year
Less : Exercised during the year
Forfeited / lapsed during the year
Balance as at end of the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
As at
31st March, 2017
As at
31st March, 2016
93,200
46,600
-
-
-
-
-
-
-
46,600
-
-
As at
1st April, 2015
-
-
46,600
-
-
93,200
93,200
46,600
1.00
2.00
3.00
Marico ESOP 2016
Marico ESOP 2016 was approved by the shareholders during the current year ended 31st March, 2017, enabling grant of
stock options not exceeding in the aggregate 0.60% of the aggregate number of issued equity shares of the Company,
from time to time. The plan envisages to grant stock options to employees of Marico on an annual basis through one
or more Schemes notified under the Plan. Each option represents 1 equity share in the Company. The Vesting Period
and the Exercise Period, both range from 1 year to 5 years. Pursuant to the said approval, the Company notified below
schemes under the plan :
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Scheme I
Scheme II
Scheme III
1.00
280.22
1.00
80,000
Exercise price
Vesting date
31st March,2019
Particulars
939,700
31st March,2019
Scheme I
Marico ESOP 2016
-
Balance as at beginning of the year
-
Adjustment on account of bonus issue (Refer note 12 (a))
Less : Exercised during the year
Balance as at end of the year
Weighted average remaining contractual life of options outstanding at
end of period (in years)
Scheme IV
-
-
-
-
80,000
939,700
101,080
719,830
-
-
-
-
-
-
-
-
80,000
939,700
101,080
719,830
3.00
3.00
3.67
3.67
Particulars
Aggregate of all stock options to current paid-up equity share capital
(percentage)
Scheme III
-
-
Forfeited / lapsed during the year
256.78
30th Nov,2019
-
-
Granted during the year
719,830
30th Nov, 2019
Scheme II
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Scheme IV
101,080
2017
2016
2015
0.17%
0.05%
0.07%
The following assumptions were used for calculation of fair value of grants (figures in bracket represent previous year):
Particulars
Risk-free interest rate (%)
Marico ESOS
2014
(8.00%)
Expected life of options (years)
(3 years)
Expected volatility (%)
(26.62%)
Dividend yield (%)
(3.5%)
MD CEO ESOP
Plan 2014
Marico ESOP
2016
Scheme I
Marico ESOP
2016
Scheme II
Marico ESOP
2016
Scheme III
Marico ESOP
2016
Scheme IV
(3 years 3
months)
3 years 2
months
3 years 2
months
3 years 6
months
3 years 6
months
(3.5%)
1%
1%
0.96%
0.96%
(8.00%)
(23.66%)
7%
26%
7%
26%
6.75%
26.10%
6.75%
26.10%
Financial Statements
Particulars
Options granted
213
408,600
-
1,414,600
134,600
1,280,000
-
Classified as short-term
Classified as long-term
Carrying amount of liability included in employee benefit
obligation
Number of grants at the end of
the year
Less : Exercised during the year
-
2015
-
STAR IV
15.79
7.76
911,600
-
146,000
1,823,200 1,057,600
Less : Forfeited during the year
Add : Granted during the year
-
2016*
As at 31st March
1,414,600
2017
30th November, 2016
104.48
2nd December, 2013
Number of grants outstanding at
the beginning of the year
Vesting Date
Grant Price (Rs.)
Grant Date
Classified as short-term
Classified as long-term
Carrying amount of liability - included in employee benefit obligation
Number of grants at the end of the year
Less : Exercised during the year
Less : Forfeited during the year
Add : Granted during the year
Number of grants outstanding at the beginning of the year
Vesting Date
Grant Price (Rs.)
Grant Date
-
-
-
-
-
-
-
104.48
2016
-
-
-
-
-
-
-
-
-
347,800
81,600
429,400
-
0.89
429,400
126,000
555,400
2016*
2015
As at 31st March
-
217.46
-
-
-
2017
-
219,400
6.88
-
-
2.33
1,360,000
-
161,600
1,521,600
2015
-
-
-
88,500
As at 31st March
2016*
-
62,700
151,200
30th November, 2017
- 1,140,600
-
-
-
-
-
2015
5th August, 2015
-
-
-
-
-
-
- 1,360,000
-
-
-
-
549,500
30th November, 2016
2017
-
71,100
620,600
2016
As at 31st March
30th November, 2014
213.91
1st December, 2012
2017
STAR II
2015
5th August, 2015
2017
As at 31st March
30th November, 2014
148.53
1st December, 2011
-
-
-
-
-
-
-
-
-
-
-
-
-
1.00
142,700
13,500
156,200
-
0.22
156,200
-
-
156,200
2016*
-
2015
-
-
-
-
-
12.58
897,600
As at 31st March
2017
-
176,600
1,074,200
208.96
-
2016
-
2015
-
5,400
5,400
-
0.01
5,400
-
-
5,400
2016*
-
2015
-
-
-
-
-
2.26
184,100
As at 31st March
2017
-
18,200
202,300
30th November, 2017
203.63
-
-
154,200
29,900
184,100
1st December, 2015
-
-
-
-
-
As at 31st March
30th November, 2015
2nd December, 2013
2017
STAR III
2015
30th November, 2017
197.61
STAR V
-
-
700,400
197,200
897,600
2016
As at 31st March
4th November, 2015
2017
30th November, 2015
213.91
1st December, 2012
Details of STAR Scheme:
Particulars
The Corporate Governance Committee has granted Stock Appreciation Rights (“STAR”) to certain eligible employees pursuant to the Company’s Employee
Stock Appreciation Rights Plan, 2011 (“Plan”). The grant price is determined based on a formulae as defined in the Plan. There are schemes under each Plan with
different vesting periods. Scheme I to IV have matured on their respective vesting dates. Under the Plan, the specified eligible employees are entitled to receive
a Star Value which is the excess of the maturity price over the grant price subject to certain conditions. The Plan is administered by Corporate Governance
Committee comprising independent directors.
(b) Share appreciation rights
214
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
-
-
6.82
1,417,800
-
284,400
1,702,200
-
-
1.44
1,702,200
-
21,600
1,723,800
2016*
-
0.22
135,800
-
-
135,800
-
2016
As at 31st March
2017
2017
As at 31st March
30th November, 2018
280.22
5th August, 2016
30th November, 2018
203.63
1st December, 2015
STAR VI
-
-
-
-
-
-
-
-
-
0.14
122,460
-
15,240
137,700
2017
2016
As at 31st March
30th November, 2018
256.78
2nd December, 2016
-
-
-
-
-
-
-
STAR VII
256.78
-
-
0.47
495,070
-
41,190
536,260
2017
2016
As at 31st March
30th November, 2019
1st December, 2016
Financial Statements
-
-
-
-
-
-
-
The Company has formed “Welfare of Mariconians Trust” (The Trust) for the implementation of the schemes that are notified or may be notified from time to time by the Company under the Plan. The Company
has advanced Rs.54.26 Crore as at 31st March, 2017 (Rs. 66.56 Crore as at 31st March, 2016 and Rs. 28.16 Crore as on 1st April, 2015) to the Trust for purchase of the Company’s shares under the Plan As per
the Trust Deed and Trust Rules, upon maturity, the Trust shall sell the Company’s shares and hand over the proceeds to the Company. The Company, after adjusting the loan advanced and interest thereon (on
loan advanced after 1st April, 2013), shall utilize the proceeds towards meeting its STAR Value obligation.
* Numbers are adjusted for 1:1 bonus issued in December 2015, wherever required.
Classified as short-term
Classified as long-term
Carrying amount of liability - included in employee benefit obligation
Number of grants at the end of the year
Less : Exercised during the year
Less : Forfeited during the year
Add : Granted during the year
Number of grants outstanding at the beginning of the year
Vesting Date
Grant Price (Rs.)
Grant Date
Particulars
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
215
NOTES
216
To Consolidated Financial Statements for the year ended 31st March, 2017
The fair value of the STARs was determined using the Black-Scholes model using the following inputs at the grant date
and as at each reporting date:
Particulars
Share price at measurement date (INR per share)
Expected volatility (%)
Dividend yield (%)
(c)
31st March, 2017
31st March, 2016
1st April, 2015
24.5% - 27.1%
26.2% - 28.6%
24%-27%
6%
7%
7%
294.9
0.96%
Risk-free interest rate (%)
Employee stock option plan
0.57%
Total employee share based payment expense
(r in Crore)
31st March, 2017
31st March, 2016
13.89
15.74
4.02
Stock appreciation rights
3.46
17.91
19.20
Year ended
31st March, 2017
Year ended
31st March, 2016
Basic earnings per share attributable to the equity holders of the company
6.21
5.53
Diluted earnings per share attributable to the equity holders of the company
6.20
5.53
798.59
711.48
Weighted average number of equity shares outstanding
1,290,233,390
1,290,164,173
Weighted average number of equity shares in calculating basic earnings per share
1,286,567,229
1,286,569,730
Weighted average number of equity shares and potential equity shares used in calculating diluted
earnings per share
1,288,573,342
1,287,259,939
Earnings Per Share
Particulars
(a) Basic earnings per share
(b) Diluted earnings per share
(c) Earnings used in calculating earnings per share
Basic earnings per share
Diluted earnings per share
(d)Weighted average number of shares used as the denominator
Shares held in controlled trust
Options
0.96%
385.8
Expense arising from share-based payment transactions recognised in profit or loss as part of employee benefit expense
were as follows:
Particulars
36
244.3
798.59
(3,666,161)
2,006,113
711.48
(3,594,443)
690,209
(e) Information concerning the classification of securities
(i)Options
Options granted to employees under Marico ESOS 2014,MD CEO ESOP Plan 2014 and Marico Employee Stock Option
Plan 2016 are considered to be potential equity shares. They have been included in the determination of diluted
earnings per share to the extent to which they are dilutive. The options have not been included in the determination
of basic earnings per share. Details relating to the options are set out in note 35.
(ii)
Treasury shares
Treasury shares are excluded for the purpose of calculating basic and diluted earnings per share.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
Financial Statements
37
217
Additional information required by Schedule III
Name of the Entities
Net Assets i.e. total assets minus total liabilities
As a % of consolidated
net assets
Amount
Share in profit or loss
As a % of consolidated
profit or loss
Amount
31st
March,
2017
31st
March,
2016
31st
March,
2017
31st
March,
2016
125.02%
108.52%
2,924.24
2,538.31
103.91%
85.24%
842.69
691.26
Marico Consumer Care Limited
1.37%
1.19%
32.15
27.80
0.54%
0.54%
4.35
4.41
Marico Bangladesh Limited
5.50%
6.78%
128.62
158.59
15.17%
14.73%
122.99
119.44
-7.37%
-6.82%
(171.04)
(159.45)
-1.88%
-0.97%
(15.24)
(7.85)
1.55%
3.91%
36.33
91.39
-1.58%
0.40%
(12.82)
3.25
-0.07%
-0.44%
(1.74)
(10.35)
0.67%
-0.24%
5.43
1.65%
1.46%
38.66
33.87
0.26%
0.29%
2.13
Parent:
Marico Limited
Subsidiaries:
- Indian
- Foreign
Marico Bangaldesh Industries Limited
Marico Middle East
MEL Consumer Care
Marico Egypt Industries Company
Egyptian American Company for Investment and
Industrial Development SAE
Marico South Africa Consumer Care
Marico South Africa
MEL Consumer Care & Partners - Wind
Marico Malaysia Sdn Bhd
Marico South East Asia Corporation
Beaute Cosmetique Societe Par Actions
Thuant Phat Foodstuff Joint Stock Company
Joint Ventures
- Indian
Bellezimo Professionale Products Private Limited
Zed Lifestyle Private Limited
Subtotal
Intercompany Elimination & Consolidation
Adjustments
Grand total:
Minority Interest in all subsidiaries
0.02%
-0.27%
2.17%
0.01%
-0.46%
0.42
(6.32)
31st
March,
2017
0.25
(10.88)
-0.23%
-0.27%
0.18
(1.81)
(2.18)
(1.92)
-1.34%
(19.56)
(31.42)
-0.92%
-0.69%
(7.43)
(5.58)
1.09%
2.73%
25.56
63.81
1.65%
5.07%
13.41
41.16
0.57%
14.80
13.40
(0.52)
0.00%
-
-
3,050.83
2,768.07
0.00%
0.63%
0.00%
0.00%
0.33%
0.00%
-30.43%
-31.48%
0.57%
0.61%
-
-
(711.81)
2,339.02
13.34
0.25
7.63
-
0.00%
-0.01%
0.15
0.04
-0.84%
0.20
0.00%
31st
March,
2016
48.51
0.01%
0.02%
0.00%
31st
March,
2017
1.92%
0.01%
44.87
0.02%
31st
March,
2016
(0.01)
2.35
(0.06)
0.00%
-0.11%
-0.06%
2.04
0.00%
0.00%
-
-
956.06
842.87
0.25%
0.00%
0.00%
-
0.00
-
(0.93)
-
(736.39)
-17.89%
-14.74%
(145.09)
(119.54)
14.31
1.53%
1.46%
12.38
11.85
2,031.68
810.97
723.33
NOTES
218
To Consolidated Financial Statements for the year ended 31st March, 2017
Name of the Entities
Parent:
Marico Limited
Subsidiaries:
- Indian
Marico Consumer Care Limited
- Foreign
Marico Bangladesh Limited
Share in other comprehensive income
As a % of other
comprehensive income
31st
March,
2017
31st
March,
2016
Share in total comprehensive income
Amount
31st
March,
2017
As a % of total
comprehensive income
31st
March,
2016
31st
March,
2017
31st
March,
2016
Amount
31st
March,
2017
31st
March,
2016
86.03%
-130.15%
15.52
23.048
108.23%
90.14%
858.21
714.74
0.00%
0.00%
-
-
0.55%
0.56%
4.35
4.41
0.00%
0.00%
5.42%
0.64
(0.98)
15.59%
14.94%
123.63
118.46
-33.50%
-0.30%
(0.23)
-
-1.95%
-0.99%
(15.47)
(7.85)
Marico Egypt Industries Company
0.00%
0.00%
-
0.41%
(12.82)
Marico South Africa Consumer Care
0.00%
Marico Bangaldesh Industries Limited
Marico Middle East
MEL Consumer Care
Egyptian American Company for Investment and
Industrial Development SAE
Marico South Africa
-3.55%
1.29%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
-
-
-
-
-
-
-
-
0.02%
-0.23%
-0.27%
0.68%
-0.24%
0.27%
0.30%
-1.62%
-
-
-
0.01%
0.02%
0.00%
0.18
0.04
(1.81)
(2.18)
5.43
(1.92)
2.13
2.35
0.15
3.25
0.00
MEL Consumer Care & Partners - Wind
0.00%
0.00%
-
-
-0.94%
-0.70%
(7.43)
(5.58)
Marico Malaysia Sdn Bhd
0.00%
0.00%
-
-
0.00%
-0.01%
(0.01)
(0.06)
0.00%
-0.12%
Marico South East Asia Corporation
Beaute Cosmetique Societe Par Actions
Thuant Phat Foodstuff Joint Stock Company
Joint Ventures
0.00%
0.00%
0.00%
0.51%
0.00%
0.00%
-
(0.09)
-
-
-
1.69%
-
0.26%
5.18%
13.41
41.07
-0.07%
2.04
(0.52)
-
(0.93)
- Indian
Bellezimo Professionale Products Private
Limited
Zed Lifestyle Private Limited
Subtotal
Intercompany Elimination & Consolidation
Adjustments
Grand total:
Minority Interest in all subsidiaries
0.00%
0.00%
0.00%
0.00%
188.30%
-22.45%
0.06%
0.05%
-
-
15.93
(33.97)
(18.04)
(0.01)
-
0.00%
0.00%
0.00%
4.05
-22.58%
(0.01)
1.56%
22.41
26.46
38
First time adoption of Ind AS
These are the Group’s first financial statements prepared in accordance with Ind AS.
0.00%
-
-
-
-
-
971.99
865.28
-14.57%
(179.06)
(115.49)
1.49%
12.37
11.84
792.93
749.79
Transition to Ind AS
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st
March, 2017, the comparative information presented in these financial statements for the year ended 31st March, 2016 and
in the preparation of an opening Ind AS balance sheet at 1st April, 2015 (the Group’s date of transition). In preparing its
opening Ind AS balance sheet, the Group has adjusted the amounts reported previously in financial statements prepared in
accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and
other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Group’s financial position, financial
performance and cash flows is set out in the following tables and notes.
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
A.
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from
previous GAAP to Ind AS.
A.1 Ind AS optional exemptions
A.1.1Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date
prior to the transition date. This provides relief from full retrospective application that would require restatement of
all business combinations prior to the transition date.
The Group has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date.
Business combinations occurring prior to the transition date have not been restated.
The Group has applied same exemption for investment in subsidiaries, associates and joint ventures. A.1.2Cumulative translation differences
Ind AS 101 permits cumulative translation gains and losses to be reset to zero at the transition date. This provides
relief from determining cumulative currency translation differences in accordance with Ind AS 21 from the date a
subsidiary or equity method investee was formed or acquired.
The group elected to reset all cumulative translation gains and losses to zero by transferring it to opening retained
earnings at its transition date. A.1.3Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and
equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the
previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for
de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 - Intangible
Assets and investment property covered by Ind AS 40 - Investment Properties.
Accordingly, the group has elected to measure all of its property, plant and equipment, intangible assets and investment
property at their previous GAAP carrying value.
A.1.4 Share-based payment transactions
Ind AS 102 deals with the accounting and disclosure requirements related to share-based payment transactions.
The standard addresses three types of share-based payment transactions: equity-settled, cash-settled, and with
cash-alternatives. A first-time adopter is encouraged, but is not required, to apply Ind AS 102 to:
(i) equity instruments that vested before the date of transition to Ind AS,
(ii) liabilities arising from share-based payment transactions that were settled before the date of transition to Ind AS.
The Group has availed this exemption and has not applied fair value to the equity instruments and liabilities that
were vested and settled before the date of transition to Ind AS.
A.2 Ind AS mandatory exceptions
A.2.1Hedge accounting
Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge
accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the
supporting documentation can not be created retrospectively. As a result, only hedging relationships that satisfied
the hedge accounting criteria as of 1st April, 2015 are reflected as hedges in the Group’s result under Ind AS.
The Group had designated various hedging relationships as cash flow hedges under the previous GAAP. On date of
transition to Ind AS, the entity had assessed that all the designated hedging relationship qualifies for hedge accounting
as per Ind AS 109. Consequently, the Group continues to apply hedge accounting on and after the date of transition
to Ind AS.
Financial Statements
219
NOTES
220
To Consolidated Financial Statements for the year ended 31st March, 2017
A.2.2Estimates
An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates
made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with
previous GAAP. The Group made estimates for Investment in equity instruments carried at FVPL in accordance with
Ind AS at the date of transition as these were not required under previous GAAP. A.2.3De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for
transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to
apply the de-recognition requirement provided that the information needed to apply Ind AS 109 to financial assets
and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting
for those transactions.
The Group has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition
to Ind AS.
A.2.4Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt
instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Ind AS 101 requires the Group to reconcile equity, total comprehensive income, and cash flow for prior periods. The
following reconciliation provide the explanantions and quantification of the differences arising from the transition
from previous GAAP to Ind AS in accordance with Ind AS 101:
(A) Reconciliation of Equity as at 1st April, 2015 and as at 31st March, 2016
(B) Reconciliation of statement of profit and loss for the year ended 31st March, 2016 and
(C) The impact on cash flows from operating, investing and financing activities for the year ended 31st March, 2016
B: Reconciliation between previous GAAP and Ind AS
Reconciliation of Balance sheet as at date of transition (1st April, 2015)
Particulars
ASSETS
Notes to first
time adoption
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
Goodwill
14
Other intangible assets
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
1 (d) , 8
1 (c)
9
10
9
Inventories
(r in Crore)
Adjustments
Ind AS
556.67
-
556.67
17.99
-
17.99
3.04
489.15
30.10
Current assets
Financial assets
Previous GAAP*
29.92
-
3.04
-
489.15
4.99
34.91
(1.89)
15.09
-
30.10
11.89
(8.40)
111.17
25.76
136.93
1,290.71
21.49
1,312.20
994.72
-
994.72
16.98
23.80
-
1.03
3.49
24.83
(i) Investments
8
297.81
2.80
300.61
(iii) Cash and cash equivalents
1
78.80
0.26
79.06
(ii) Trade receivables
176.75
-
176.75
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
(iv) Bank balances other than (iii) above
(v) Loans
(vi) Other financial assets
Current tax assets (net)
Other current assets
Assets classified as held for sale
Total current assets
Notes to first
time adoption
Previous GAAP*
1
129.75
9
1.14
1 (c)
9
14
Total assets
(r in Crore)
Adjustments
24.77
0.12
95.33
Ind AS
2.30
132.05
0.40
1.54
0.40
95.73
(19.76)
5.01
-
0.12
1,799.19
(13.60)
1,785.59
1,827.90
(13.60)
1,814.30
64.50
-
64.50
(56.80)
1,784.66
(24.30)
1,800.46
1,838.41
(24.30)
1,814.11
168.75
(0.35)
168.40
0.07
16.21
28.71
3,118.61
-
7.89
28.71
3,126.50
EQUITY AND LIABILITIES
Equity
Equity Share capital
Other Equity
Reserves and Surplus
Other reserves
Equity attributable to owners
1(a), 1(b), 4, 2
5, 10
Non-controlling interests
1,727.86
32.40
1,824.76
13.65
Total equity
LIABILITIES
(81.10)
-
(48.70)
13.65
Non-current liabilities
Financial liabilities
(i) Borrowings
6
Deferred tax liabilities
10
Employee benefit obligation
3
8.78
177.60
4.82
20.68
13.60
16.28
198.28
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities
165.44
564.42
-
-
165.44
564.42
6
122.83
(0.39)
122.44
Employee benefit obligations
3
42.13
11.84
53.97
Other current liabilities
1
126.53
0.04
Provisions
Current tax liabilities
Total current liabilities
Total liabilities
42.25
39.00
0.02
ASSETS
Notes to first
time adoption
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
14
Other intangible assets
7,16
Goodwill
Investment accounted for using the equity method
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
1 (d) , 8
1 (c)
9
39.02
126.57
11.51
1,114.11
3,118.61
7.89
3,126.50
32.19
Reconciliation of Balance Sheet (31st March, 2016)
Particulars
42.25
1,102.60
1,280.20
Total equity and liabilities
-
Previous GAAP*
(r in Crore)
Adjustments
Ind AS
524.34
-
30.67
-
36.73
1,312.39
-
524.34
36.73
30.67
497.96
(0.60)
497.36
-
0.82
0.82
21.50
39.92
54.34
15.48
7.23
28.73
2.66
42.58
(1.73)
13.75
(50.59)
3.75
Financial Statements
Particulars
221
NOTES
222
To Consolidated Financial Statements for the year ended 31st March, 2017
Particulars
Deferred tax assets
Other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
(i) Investments
(ii) Trade receivables
Notes to first
time adoption
10
64.93
1,309.11
(34.88)
1,274.23
16
925.81
(0.25)
925.56
8
463.28
6.51
469.79
16
(v) Loans
1 (c)
Current tax assets (net)
Other current assets
Assets classified as held for sale
Total current assets
Ind AS
6.75
1, 16
(vi) Other financial assets
(r in Crore)
Adjustments
58.18
9
(iii) Cash and cash equivalents
(iv) Bank balances other than (iii) above
Previous GAAP*
1, 9
9
14
Total assets
29.99
-
0.58
30.57
-
252.43
(0.34)
223.98
-
223.98
(1.36)
7.07
90.36
2.80
20.97
(15.97)
1.97
0.01
8.43
115.32
0.54
252.09
93.16
5.00
1.98
115.86
2,102.55
(8.06)
2,094.49
2,115.00
3,424.11
(8.06)
(42.94)
2,106.94
129.02
-
129.02
17.63
1,907.64
(79.53)
2,017.37
2,111.21
(79.53)
2,031.68
0.41
(0.41)
12.45
-
12.45
3,381.17
EQUITY AND LIABILITIES
Equity
Equity Share capital
Other Equity
Reserves and Surplus
Other reserves
Equity attributable to owners
1(a), 1(b), 4, 2
5, 10
Non-controlling interests
1,890.01
77.87
2,096.90
14.31
Total equity
(97.16)
-
(19.29)
14.31
LIABILITIES
Non-current liabilities
Financial liabilities
(i) Borrowings
Employee benefit obligations
Deferred tax liabilities
Total non-current liabilities
16
3
10
11.61
0.94
12.96
-
1.20
12.81
22.69
35.65
21.90
22.84
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities
Provisions
Employee benefit obligations
Current tax liabilities
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
16
6, 16
3
1
1, 16
152.79
-
152.79
669.08
(0.04)
669.04
50.64
-
50.64
209.50
(0.43)
40.04
14.21
139.85
0.13
38.04
0.03
209.07
54.25
38.07
139.98
1,299.94
13.90
1,313.84
3,424.11
(42.94)
3,381.17
1,312.90
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
36.59
1,349.49
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
223
Particulars
Continuing operations
Revenue from operations
Other income
Total Income
Expenses
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, stock-in-trade and work-in
progress
Excise duty
Employee benefit expense
Notes to first
time adoption
12, 16
1, 1(d), 8 , 9
12, 16
11
(r in Crore)
Adjustments
Ind AS
6,139.17
(114.72 )
6,024.45
6,232.53
(114.75 )
6,117.78
2,848.64
6.92
2,855.56
60.10
-
60.10
7.13
-
93.36
154.89
-
93.33
154.89
7.13
373.40
1,641.60
(119.61)
1,521.99
5,198.76
(110.21)
5,088.55
-
(0.53 )
(0.53 )
Profit before exceptional items and tax
1,033.77
(5.07)
1,028.70
Profit before tax from continuing operations
1,033.77
(5.07)
1,028.70
249.55
0.75
250.30
8.24
305.37
Other expenses
Finance costs
Total expenses
Profit before exceptional items, share of net profits of investments
accounted for using equity method and tax
Share of net profit/(loss) of associates and joint ventures accounted for
using the equity method
7, 16
1, 5, 9, 12, 16
6, 16
Current tax
Deferred tax
Total tax expense
Profit for the year (A)
102.15
20.25
1,033.77
16
Exceptional items
Income tax expense
364.00
(0.03 )
9.40
Depreciation and amortization expense
2, 3, 13, 16
Previous GAAP*
-
1, 15
10
(7.29)
0.37
(4.54)
-
47.58
7.49
736.64
(13.31)
297.13
94.86
20.62
1,029.23
-
55.07
723.33
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
(4.25 )
Remeasurements of post employment benefit obligations
1.30
Income tax relating to items that will not be reclassified to profit or loss
Total
(2.95)
Exchange differences on translation of foreign operations
(4.05 )
Items that may be reclassified to profit or loss
Change in fair value of hedging instruments
Income tax relating to items that will be reclassified to profit or loss
Change in fair value of hedging instruments
Total
Other comprehensive income for the year (B)
Total comprehensive income for the year (A+B)
51.18
(17.72)
29.41
26.46
749.79
Financial Statements
Reconciliation of total comprehensive income for the year ended 31st March, 2016
NOTES
224
To Consolidated Financial Statements for the year ended 31st March, 2017
Reconciliation of Balance Sheet as at 31st March, 2016 and 1st April, 2015
Particulars
Shareholder’s equity under previous GAAP
Add/Less :
Gain/ (loss) on fair valuation of investments
(Increase)/ decrease due to fair valuation accounting of Share based payments
Increase/ (decrease) due to WEOMA Trust consolidation
Increase/ (decrease) due to reversal of amortisation of brands
Other adjustments
Tax impact of above Ind AS adjustments
Shareholder’s equity under Ind AS
Notes to First time adoption
(r in Crore)
31st March, 2016
1st April, 2015
2,096.84
1,8
1,824.78
4.66
3
3.27
(30.78)
1
(16.66)
(45.67 )
7
(21.11)
7.28
6,9
10
-
0.20
0.67
2,017.39
1,800.45
(15.14 )
9.50
Reconciliation of total comprehensive income for the year ended 31st March, 2016
(r in Crore)
Notes to First time adoption
Profit after tax as per previous GAAP
Add/Less :
Fair valuation of investments
31st March, 2016
736.63
8
Share based payments
1.39
2, 3
Increase/ (decrease) due to WEOMA Trust consolidation
(13.79)
1
Increase/ (decrease) due to reversal of amortisation of brands
(1.99 )
7
Remeasurement of post employment benefit obligation
7.28
13
Time value of option reclassfied to OCI
4.13
5
Other adjustments
(1.68 )
9
Tax impact on the above
(0.40 )
(8.24 )
Total adjustments
(13.30 )
Net profit/loss as per Ind AS
Other comprehensive income
723.33
15
Total comprehensive income as per IndAS
26.46
749.79
Impact of Ind AS adoption on the statements of cash flows for the year ended 31st March, 2016
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Previous GAAP
832.56
(235.66)
Adjustments
(14.94)
38.78
(r in Crore)
Ind AS
817.62
(196.88)
(579.85)
(21.14)
(600.99)
Cash and cash equivalents as at 1st April, 2015
77.39
1.67
79.06
Cash and bank balances adjusted upon divestment of business
(4.22 )
-
(4.22)
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents as at 31st March, 2016
17.05
(1.43)
88.79
2.70
-
4.37
19.75
(1.43)
93.16
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
C: Notes on First-time adoption
1
Consolidation of the Trust
The company has formed Welfare of Mariconions Trust (WEOMA trust) for implementation of the schemes that are
notified or may be notified from time to time by the Company under the plan, providing share based payment to its
employees. WEOMA purchases shares of the Company out of funds borrowed from the Company. The Company treats
WEOMA as its extension and shares held by WEOMA are treated as treasury shares.
The Consolidation of the WEOMA trust financials statements with that of the Company does not in any manner affect the
independence of the trustees where the rights and obligations are regulated by the trust deed.
Own equity instruments (treasury shares) are recognised at cost and deducted from equity. Profit on sale of treasury
shares by WEOMA trust is recognised in WEOMA reserve. (i)
The sources and application of funds of the Trust consolidated as at 31st March, 2016 and 1st April, 2015 were as
follows:
Particulars
Corpus Fund
Current Liabilities
Cash & Bank equivalents
Fixed deposits
1st April, 2015
0.35
0.09
2.64
0.26
-
1.47
Net asset
1.56
(ii) 2.66
2.98
Non current investments
Other Current Assets
(r in Crore)
31st March, 2016
2.30
4.52
0.10
0.06
4.39
Impact on the Company’s profit and loss post WEOMA Trust consolidation for the year 31st March, 2016
Particulars
Income
Interest on Fixed Deposits with Bank
0.15
Administrative Expenses
0.02
Expenditure
Interest derecognition on loan from WEOMA-Consolidation
2.12
Impact on profit before tax
(r in Crore)
31st March, 2016
(iii)
(1.99)
Summarised statement of cash flows of the Trust consolidated for the year ended 31st March, 2016
Particulars
Cash and cash equivalents 1st April, 2015
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents 31 March 2016
(r in Crore)
31st March, 2016
0.26
2.73
-
2.99
Other items adjusted owing to the Trust consolidation include :
Upon consolidation, the investment in the Company’s equity shares made by WEOMA Trust is debited to the Company’s
equity as treasury shares amounting to Rs. 68.37 Crore as at 31st March, 2016 (Rs. 28.29 Crore as at 1st April, 2015).
(a) Treasury shares
(b)
WEOMA reserve
The income of the Trust till date forms a part of WEOMA reserve amounting to Rs. 20.18 Crore as at 31st March, 2016 (Rs.
2.66 Crore as at 1st April, 2015).
Financial Statements
225
NOTES
226
To Consolidated Financial Statements for the year ended 31st March, 2017
(c)
(d)Investments
2
3STAR
4
5
Other Non Current Financial Assets and other income
Loan advanced to the Trust is eliminated on consolidation amounting to Rs. 50.59 Crore as at 31st March, 2016 (Rs. 8.40
Crore as at 1st April, 2015) forming a part of non current loans and Rs. 15.97 Crore as at 31st March, 2016 (Rs. 19.76
Crore as at 1st April, 2015) being current loans in previous GAAP Accordingly, interest on above loan is also eliminated
amounting to Rs. 2.12 Crore.
The fair value of investments held by the Trust consolidated as per Ind AS amounts to Rs 1.47 Crore as at 31st March,
2016 (Rs. 4.52 Crore as at 1st April, 2015). The profit for the year ended 31st March, 2016 decreased by Rs. 3.05 Crore.
Employee Stock Option Liability
Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic
value method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the
options as at the grant date. Consequently, the amount recognised in share option outstanding account decreased by
Rs. 0.64 Crore as at 31st March, 2016 (1st April, 2015 - Rs. 0.31 Crore). The profit for the year ended 31st March, 2016
increased by Rs. 0.33 Crore. There is no impact on total equity.
Under the previous GAAP, the cost of cash-settled employee share-based plan were recognised using the intrinsic value
of the rights (excess of market value as at year end and the Grant price) over the vesting period after adjusting amount
recoverable from WEOMA trust. As per Ind AS 102, the Share appreciation rights liability shall be measured, initially and
at the end of each reporting period until settled, at the fair value of the share appreciation rights, by applying an option
pricing model, taking into account the terms and conditions on which the share appreciation rights were granted, and the
extent to which the employees have rendered service to date. There is an increase in liability by Rs. 15.41 Crore whereby
Rs. 1.20 Crore (Rs 4.82 Crore as at 1st April, 2015) is long term and Rs. 14.21 Crore (Rs 11.84 Crore as at 1st April, 2015)
is short term. The profit for the year ended 31st March, 2016 decreased by Rs. 14.12 Crore. Equity has decreased by Rs
30.78 Crore as at 31st March, 2016 (1st April, 2015 - Rs 16.66 Crore)
Retained Earnings
Retained earnings as at 1st April, 2015 has been adjusted consequent to the above Ind AS transition adjustments
Time Value reclassified to OCI
Under previous GAAP, the Group recognised movements in time value of options and forward element of forward
contracts and Interest rate swaps in profit or loss in the period in which they arose. Under Ind AS, these movements are
reclassified to OCI and thereby decreasing hedge reserve balance by Rs. 2.15 Crore as at 31st March, 2016 (1st April,
2015 Rs. 0.47 Crore). The profit for the year ended 31st March, 2016 is decreased by Rs 1.68 Crore. There is no impact
on total equity.
6Borrowings
7
8
Under previous GAAP, transaction costs incurred towards origination of borrowings were charged to profit or loss as and
when incurred. Ind AS 109 requires these transaction costs to be deducted from the carrying amount of borrowings on
initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest
expense by applying the effective interest rate method.
Accordingly, borrowings as at 31st March, 2016 have been reduced by Rs. 0.35 Crore (1st April, 2015 Rs. 0.73 Crore) with
a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the
year ended 31st March 2016 reduced by Rs. 0.39 Crore as a result of the additional interest expense.
Other Intangible assets
In previous GAAP, there was a rebuttable presumption that the useful life of an intangible asset will not exceed ten years
from the date when the asset is available for use. As per Ind AS 38, assets having an indefinite life are not amortised and
tested annually for impairment. The amortisation charged on copyrights and trademarks is reversed thereby increasing
the value of intangible assets, retained earning and profit by Rs 7.28 Crore as at 31st March, 2016.
Fair valuation of investments
Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments
or current investments based on the intended holding period and realisability. Long-term investments were carried at
cost less provision for other than temporary decline in the value of such investments. Current investments were carried
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
9
Security deposits
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease
term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair
value. Accordingly, the Group has fair valued these security deposits under Ind AS. Difference between the fair value and
transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount
of security deposits decreased by Rs 1.18 Crore as at 31st March, 2016 (1st April, 2015 Rs 1.49 Crore). The prepaid rent
increased by Rs. 1.12 Crore as at 31st March, 2016 (1st April, 2015 - INR 1.40 Crore).Total equity decreased by Rs 0.06
Crore as on 1st April, 2015. The profit for the year and total equity as at 31st March, 2016 decreased by Rs 0.02 Crore due
to amortisation of the prepaid rent of Rs 0.53 Crore which is partially off-set by the notional interest income of Rs 0.55
Crore recognised on security deposits.
10
Deferred tax has been recognised on adjustments made on transition to Ind AS
Revenue from operations
11 Excise duty
12 Revenue, Advertisement and Sales Promotion (ASP) and other expense
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue
from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement
of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the
year ended 31st March 2016 by Rs. 7.13 Crore. There is no impact on the total equity and profit
The group will recognise revenue at the fair value of consideration received or receivable. Any sales incentive, discounts
or rebates in any form, including cash discounts given to customers will be considered as selling price reductions
and accounted as reduction from revenue. Under IGAAP, some of these costs were included in ‘advertising and sales
promotion’ expenses. Accordingly, Rs. 85.41 Crore has been reclassified from advertising and sales promotion expenses
to Sales, Rs. 7.12 Crore has been reclassified from advertising and sales promotion expenses to cost of goods sold and
Rs 28.92 Crore from other expenses to sales.
Employee benefits expense
13 Remeasurements of post-employment benefit obligations
14 Investment property and Asset held for sale
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included
in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of
profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a
result of this change, the profit for the year ended 31st March, 2016 increased by Rs. 4.13 Crore. There is no impact on
the total equity as at 31st March, 2016.
Under the previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS,
investment properties are required to be separately presented on the face of the balance sheet. There is no impact on
the total equity or profit as a result of this adjustment.
Under the previous GAAP, asset held for sale were presented as part of other current assets. Under Ind AS, asset held for
sale are required to be separately presented on the face of the balance sheet. There is no impact on the total equity or
profit as a result of this adjustment.
15 Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period,
unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but
are shown in the statement of profit and loss includes remeasurements of defined benefit plans, effective portion of gains
and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous
GAAP.
Financial Statements
at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting
fair value changes of these investments have been recognised in retained earnings as at the date of transition and
subsequently in the profit or loss for the year ended 31st March, 2016. This increased the retained earnings by Rs. 4.66
Crore as at 31st March, 2016 (1st April, 2015 - Rs 3.27 Crore). The profit for the year ended 31st March, 2016 increased
by Rs. 1.39 Crore.
227
NOTES
228
To Consolidated Financial Statements for the year ended 31st March, 2017
16 Investment in Joint venture
Under previous GAAP, Bellizimo Professionale Product Private Limited was classified as jointly controlled entity and
accounted for using the proportionate consolidation method. Under Ind AS, Bellizimo Professionale Product Private
Limited has been classified as a joint venture and accounted for using the equity method since the company is a
limited liability company whose legal form offers separation of the company from the investors. The parties to the joint
arrangements do not have direct rights to the assets and liabilities of Bellizimo Professionale Product Private Limited.
(i)
The following assets and liabilities were previously proportionately consolidated under previous GAAP:
Particulars
(r in Crore)
Proportionate share of assets and liabilities
As at 31 March, 2016
Non-current assets
Fixed assets
0.05
Other financial asset
0.04
Current assets
Inventories
0.25
Trade receivables
0.34
Cash and cash equivalents
0.18
Current tax asset (net)
0.01
0.87
Current liabilities
Short-term borrowings
0.41
Trade payables
0.04
Other current financial liabilities
0.10
Other current liabilities
0.09
0.64
Net assets derecognised
0.23
(ii) The following items of income and expenditure were previously proportionately consolidated under previous GAAP:
(r in Crore)
Particulars
Revenue from operations
As at 31 March, 2016
0.39
Expenses:
Cost of material consumed
Changes in inventories of finished goods, work-in-progress and Stock-in-Trade
Employee benefits expense
0.45
(0.25)
0.26
NOTES
To Consolidated Financial Statements for the year ended 31st March, 2017
As at 31 March, 2016
Finance costs
0.02
Depreciation and amortisation expense
0.01
Other expenses
0.43
Total expenses
0.92
Profit(Loss) for the period
(0.53)
Impact on account of equity accounting of the joint venture under Ind AS:
Share of profits of joint venture recognised as per equity method
(iii)
(0.53)
Summarised statement of cash flows for the year ended 31 March, 2016 not considered under Ind AS in the consolidated
statement of cash flows:
(r in Crore)
Particulars
As at 31 March, 2016
Opening cash and cash equivalents 1st April, 2015
-
Cash flow from operating activities
(0.91)
Cash flow from investing activities
(0.06)
Cash flow from financing activities
1.15
Closing cash and cash equivalents 31st March, 2016
0.18
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
Financial Statements
Particulars
229
INDEPENDENT AUDITORS’ REPORT
230
To the Members of Marico Limited
Report on the Standalone Indian Accounting Standards (IND
AS) Financial Statements
1.
2.
3.
4.
5.
We have audited the accompanying standalone Ind AS
financial statements of Marico Limited (“the Company”),
which comprise the Balance Sheet as at 31st March,
2017, the Statement of Profit and Loss (including Other
Comprehensive Income), the Cash Flow Statement and
the Statement of Changes in Equity for the year then
ended, and a summary of the significant accounting
policies and other explanatory information.
6. Management’s Responsibility for the Standalone Ind AS
Financial Statements
The Company’s Board of Directors is responsible for the
matters stated in Section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these
standalone Ind AS financial statements to give a true and
fair view of the financial position, financial performance
(including other comprehensive income), cash flows and
changes in equity of the Company in accordance with
the accounting principles generally accepted in India,
including the Indian Accounting Standards specified in
the Companies (Indian Accounting Standards) Rules,
2015 (as amended) under Section 133 of the Act. This
responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company
and for preventing and detecting frauds and other
irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the standalone Ind AS
financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or
error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these
standalone Ind AS financial statements based on our
audit.
We have taken into account the provisions of the Act and
the Rules made thereunder including the accounting and
auditing standards and matters which are required to be
included in the audit report under the provisions of the Act
and the Rules made thereunder.
We conducted our audit of the standalone Ind AS
financial statements in accordance with the Standards
on Auditing specified under Section 143(10) of the Act
7.
and other applicable authoritative pronouncements
issued by the Institute of Chartered Accountants of India.
Those Standards and pronouncements require that we
comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether
the standalone Ind AS financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and the disclosures in the
standalone Ind AS financial statements. The procedures
selected depend on the auditors’ judgment, including
the assessment of the risks of material misstatement
of the standalone Ind AS financial statements, whether
due to fraud or error. In making those risk assessments,
the auditor considers internal financial control relevant
to the Company’s preparation of the standalone Ind
AS financial statements that give a true and fair view, in
order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and
the reasonableness of the accounting estimates made
by the Company’s Directors, as well as evaluating the
overall presentation of the standalone Ind AS financial
statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion on the standalone Ind AS financial statements.
Opinion
Other Matter
8.
9.
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone Ind AS financial statements give the
information required by the Act in the manner so required
and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March, 2017,
and its profit (including other comprehensive income), its
cash flows and the changes in equity for the year ended
on that date.
The financial information of the Company for the year
ended 31st March, 2016 and the transition date opening
balance sheet as at 1st April, 2015 included in these
standalone Ind AS financial statements, are based on
the previously issued statutory financial statements for
the years ended 31st March, 2016 and 31st March, 2015
prepared in accordance with the Companies (Accounting
Standards) Rules, 2006 (as amended) which were audited
by us, on which we expressed an unmodified opinion
dated 29th April, 2016 and 30th April, 2015 respectively.
The adjustments to those financial statements for the
differences in accounting principles adopted by the
231
10.
11.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor’s Report) Order,
2016, issued by the Central Government of India in terms
of sub-section (11) of Section 143 of the Act (“the Order”),
and on the basis of such checks of the books and records
of the Company as we considered appropriate and
according to the information and explanations given to
us, we give in the Annexure B a statement on the matters
specified in paragraphs 3 and 4 of the Order.
(g) With respect to the other matters to be included in
the Auditors’ Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our knowledge and belief
and according to the information and explanations
given to us:
i.
ii.
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by the
Company during the year ended 31st March,
2017.
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss
(including other comprehensive income), the Cash
Flow Statement and the Statement of Changes in
Equity dealt with by this Report are in agreement with
the books of account.
(d) In our opinion, the aforesaid standalone Ind
AS financial statements comply with the Indian
Accounting Standards specified under Section 133
of the Act.
(e) On the basis of the written representations received
from the directors as on 31st March, 2017 taken
on record by the Board of Directors, none of the
directors is disqualified as on 31st March, 2017 from
being appointed as a director in terms of Section 164
(2) of the Act.
(f)
With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to
our separate Report in Annexure A.
The Company has disclosed the impact, if any,
of pending litigations as at 31st March, 2017
on its financial position in its standalone Ind AS
financial statements – Refer Note 31;
iv.
The Company has made provision as at 31st
March, 2017, as required under the applicable
law or accounting standards, for material
foreseeable losses, if any, on long-term
contracts including derivative contracts;
The Company has provided requisite
disclosures in the Ind AS financial statements as
to holdings as well as dealings in Specified Bank
Notes during the period from 8th November,
2016 to 30th December, 2016. Based on audit
procedures and relying on the management
representation we report that the disclosures
are in accordance with books of account
maintained by the Company and as produced
to us by the Management – Refer Note [6(e)];
For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
Place: Mumbai Date: May 2, 2017
Uday Shah
Partner
Membership Number: 46061
Financial Statements
Company on transition to the Ind AS have been audited by
us.
ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT
232
Referred to in paragraph [11 (f)] of the Independent Auditors’ Report of even date to the members of Marico Limited
on the Standalone Ind AS financial statements for the year ended 31st March, 2017.
controls system over financial reporting and their
Report on the Internal Financial Controls under Clause (i) of
operating effectiveness. Our audit of internal financial
Sub-section 3 of Section 143 of the Act
1.
controls over financial reporting included obtaining
We have audited the internal financial controls over
an understanding of internal financial controls over
financial reporting of Marico Limited (“the Company”) as
financial reporting, assessing the risk that a material
of 31st March, 2017 in conjunction with our audit of the
weakness exists, and testing and evaluating the design
standalone financial statements of the Company for the
and operating effectiveness of internal control based on
year ended on that date.
Management’s Responsibility for Internal Financial
2.
The
the assessed risk. The procedures selected depend on
the auditor’s judgement, including the assessment of the
Controls
Company’s
management
is
responsible
for
establishing and maintaining internal financial controls
based on the internal control over financial reporting
risks of material misstatement of the financial statements,
whether due to fraud or error.
5.
criteria established by the Company considering the
Financial Reporting issued by the Institute of Chartered
Accountants of India (ICAI). These responsibilities include
the design, implementation and maintenance of adequate
internal financial controls that were operating effectively
system over financial reporting.
Meaning of Internal Financial Controls Over Financial
6.
A company’s internal financial control over financial
purposes
safeguarding of its assets, the prevention and detection
of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit
preparation of financial statements in accordance with
in accordance with the Guidance Note on Audit of
generally accepted accounting principles, and that
Internal Financial Controls Over Financial Reporting (the
receipts and expenditures of the company are being made
“Guidance Note”) and the Standards on Auditing deemed
only in accordance with authorisations of management
to be prescribed under Section 143(10) of the Act to the
and directors of the company; and (3) provide reasonable
extent applicable to an audit of internal financial controls,
assurance regarding prevention or timely detection
both applicable to an audit of internal financial controls
of unauthorised acquisition, use, or disposition of the
and both issued by the ICAI. Those Standards and the
company’s assets that could have a material effect on the
Guidance Note require that we comply with ethical
and maintained and if such controls operated effectively
in all material respects.
4.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
accepted
reflect the transactions and dispositions of the assets
reporting based on our audit. We conducted our audit
financial controls over financial reporting was established
generally
records that, in reasonable detail, accurately and fairly
Company’s internal financial controls over financial
reasonable assurance about whether adequate internal
with
and procedures that (1) pertain to the maintenance of
reliable financial information, as required under the Act.
requirements and plan and perform the audit to obtain
accordance
control over financial reporting includes those policies
the accounting records, and the timely preparation of
Our responsibility is to express an opinion on the
in
accounting principles. A company’s internal financial
of frauds and errors, the accuracy and completeness of
3.
reporting is a process designed to provide reasonable
and the preparation of financial statements for external
business, including adherence to company’s policies, the
Auditors’ Responsibility
Reporting
assurance regarding the reliability of financial reporting
for ensuring the orderly and efficient conduct of its
is sufficient and appropriate to provide a basis for our
audit opinion on the Company’s internal financial controls
essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over
We believe that the audit evidence we have obtained
financial statements.
Inherent Limitations of Internal Financial Controls Over
7. Because of the inherent limitations of internal financial
Financial Reporting
controls over financial reporting, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur
233
financial reporting criteria established by the Company
to future periods are subject to the risk that the internal
stated in the Guidance Note on Audit of Internal Financial
of the internal financial controls over financial reporting
financial control over financial reporting may become
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
considering the essential components of internal control
Controls Over Financial Reporting issued by the Institute
of Chartered Accountants of India.
deteriorate.
Opinion
8.
In our opinion, the Company has, in all material respects,
For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
an adequate internal financial controls system over
financial reporting and such internal financial controls
over financial reporting were operating effectively as
at 31st March, 2016, based on the internal control over
Place: Mumbai Date: May 2, 2017
Uday Shah
Partner
Membership Number: 46061
Financial Statements
and not be detected. Also, projections of any evaluation
ANNEXURE ‘B’ TO INDEPENDENT AUDITORS’ REPORT
234
Referred to in paragraph [11 (f)] of the Independent Auditors’ Report of even date to the members of Marico Limited
on the Standalone Ind AS financial statements for the year ended 31st March, 2017.
i. ii. (a) The Company is maintaining proper records showing
full particulars, including quantitative details and
situation, of fixed assets.
(b) The fixed assets are physically verified by the
Management according to a phased programme
designed to cover all the items over a period of two
years which, in our opinion, is reasonable having
regard to the size of the Company and the nature
of its assets. Pursuant to the programme, a portion
of the fixed assets has been physically verified by
the Management during the year and no material
discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed
in Note 3 on fixed assets to the Standalone Ind AS
financial statements, are held in the name of the
Company.
The physical verification of inventory including stocks with
third parties have been conducted at reasonable intervals
by the Management during the year. Further in respect of
inventory lying with third parties, these have substantially
been confirmed by them. The discrepancies noticed on
physical verification of inventory as compared to book
records were not material and have been appropriately
dealt with in the books of accounts.
iii. The Company has not granted any loans, secured
or unsecured, to companies, firms, Limited Liability
Partnerships or other parties covered in the register
maintained under Section 189 of the Act. Therefore, the
provisions of Clause 3(iii), (iii) (a), (iii)(b) and (iii)(c) of the said
Order are not applicable to the Company.
iv. v. vi. vii. In our opinion, and according to the information and
explanations given to us, the Company has complied
with the provisions of Section 186 of the Companies Act,
2013 in respect of the loans and investments made, and
guarantees and security provided by it. The Company
has not granted any loans or made any investments
or provided any guarantees or security to the parties
covered under Section 185 of the Companies Act, 2013.
The Company has not accepted any deposits from the
public within the meaning of Sections 73, 74, 75 and 76
of the Act and the Rules framed there under to the extent
notified.
Pursuant to the rules made by the Central Government of
India, the Company is required to maintain cost records
as specified under Section 148(1) of the Act in respect of
its products. We have broadly reviewed the same, and are
of the opinion that, prima facie, the prescribed accounts
and records have been made and maintained. We have
not, however, made a detailed examination of the records
with a view to determine whether they are accurate or
complete.
(a) According to the information and explanations given
to us and the records of the Company examined by us,
in our opinion, the Company is regular in depositing
the undisputed statutory dues, including provident
fund, employees’ state insurance, income tax, sales
tax, service tax, duty of customs, duty of excise, value
added tax, cess and other material statutory dues, as
applicable, with the appropriate authorities.
(b) According to the information and explanations given
to us and the records of the Company examined by
us, the particulars of dues of income tax, sales tax,
service tax, duty of customs and duty of excise at
31st March, 2017 which have not been deposited on
account of a dispute, are as follows:
Name of the
statute
Nature of dues Amount
(R in Crore)
Period to which Forum where
the amount
the dispute is
relates
pending
The Central
sales Tax Act
and Local Sales
Tax / value
added tax
Sales tax
including
interest and
penalty as
applicable
4.98
Various years
Additional
Commissioner
- Sales Tax
Appeals
2.34
Various years
Deputy
Commissioner
- Sales Tax
Appeals
9.46
Various years
Joint
Commissioner
sales tax
(Appeals)
1.26
Various years
Sales Tax
Tribunal
0.07
Various years
High Court
The Indian
Customs Act,
1962
Redemption
0.3
fine and penalty
2002-2004
Customs Excise
and Service
Tax Appellate
Tribunal
The Indian
Customs Act,
1962
Customs duty
0.01
2008
Assistant
Commissioner of
Customs
The Central
Excise duty
Excise Act, 1964
4.67
June 2010 to
March 2014
Customs Excise
and Service
Tax Appellate
Tribunal
The Central
Service tax
Excise Act, 1964
0.17
2005-10
Commissioner
of Customs,
Central Excise
and Service tax.
Income Tax Act, Income tax
1961
9.04
Assessment
year
Income Tax
Appellate
Tribunal
Income Tax Act, Income tax
1961
12.44
Assessment
year
Commissioner
of Income Tax
(Appeals)
Income Tax Act, Income tax
1961
0.37
Assessment
year
Pending before
Commissioner
of Income Tax
Appeals
2009-10
2010-11
2012-13
viii. According to the records of the Company examined
by us and the information and explanation given to us,
ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT
Referred to in paragraph [11 (f)] of the Independent Auditors’ Report of even date to the members of Marico Limited
on the Standalone Ind AS financial statements for the year ended 31st March, 2017.
x. xi. xii. The Company has not raised any moneys by way of
initial public offer, further public offer (including debt
instruments) and term loans. Accordingly, the provisions
of Clause 3(ix) of the Order are not applicable to the
Company.
During the course of our examination of the books and
records of the Company, carried out in accordance with
the generally accepted auditing practices in India, and
according to the information and explanations given to
us, we have neither come across any instance of material
fraud by the Company or on the Company by its officers or
employees, noticed or reported during the year, nor have
we been informed of any such case by the Management.
The Company has paid/ provided for managerial
remuneration in accordance with the requisite approvals
mandated by the provisions of Section 197 read with
Schedule V to the Act.
xiv. The Company has not made any preferential allotment or
private placement of shares or fully or partly convertible
debentures during the year under review. Accordingly, the
provisions of Clause 3(xiv) of the Order are not applicable
to the Company.
xv. xvi.
The Company has not entered into any non-cash
transactions with its directors or persons connected with
him. Accordingly, the provisions of Clause 3(xv) of the
Order are not applicable to the Company.
The Company is not required to be registered under
Section 45-IA of the Reserve Bank of India Act, 1934.
Accordingly, the provisions of Clause 3(xvi) of the Order
are not applicable to the Company.
For Price Waterhouse
Firm Registration Number: 301112E
Chartered Accountants
As the Company is not a Nidhi Company and the Nidhi
Rules, 2014 are not applicable to it, the provisions
of Clause 3(xii) of the Order are not applicable to the
Company.
xiii. The Company has entered into transactions with related
parties in compliance with the provisions of Sections
Place: Mumbai Date: May 2, 2017
Uday Shah
Partner
Membership Number: 46061
Financial Statements
ix.
177 and 188 of the Act. The details of such related party
transactions have been disclosed in the Ind AS financial
statements as required under Indian Accounting Standard
(AS) 24, Related Party Disclosures specified under
Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
the Company has not defaulted in repayment of loans
or borrowings to any financial institution or bank or
Government or dues to debenture holders as at the
balance sheet date.
235
BALANCE SHEET
as at 31st March, 2017
236
Particulars
ASSETS
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
Other intangible assets
Investment in subsidiaries and joint venture
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Deferred tax assets (Net)
Other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
(i) Investments
(ii) Trade receivables
(iii) Cash and cash equivalents
(iv) Bank balances other than (iii) above
(v) Loans
(vi) Other financial assets
Current tax assets (net)
Other current assets
Assets classified as held for sale
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Reserves and Surplus
Other reserves
Total equity
LIABILITIES
Non-current liabilities
Financial liabilities
(i) Borrowings
Employee benefit obligations
Deferred tax liabilities (Net)
Total non-current liabilities
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities
Provisions
Employee benefit obligations
Current tax liabilities (Net)
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
Significant accounting policies
Critical estimates and judgements
As at
31st March, 2016
As at
1st April, 2015
3
3
4
5
6(a)
473.91
7.94
23.86
21.58
1,105.64
436.18
36.54
24.29
23.38
1,090.69
458.00
2.07
11.76
23.56
1,089.34
6(a)
6(c)
6(f)
7
8
57.12
3.73
27.11
16.78
1,737.67
41.39
3.75
27.77
54.58
26.39
1,764.96
33.81
5.04
32.44
132.41
24.46
1,812.89
9
1,082.96
767.56
791.59
6(a)
6(b)
6(d)
6(e)
6(c)
6(f)
16
10
501.49
227.61
5.06
63.47
4.36
25.45
71.69
1,982.09
12.45
1,994.54
3,732.21
438.79
192.10
15.58
124.59
4.03
25.39
1.86
91.22
1,661.12
12.45
1,673.57
3,438.53
269.46
130.55
21.96
78.67
6.25
11.59
74.50
1,384.57
28.71
1,413.28
3,226.17
12(a)
129.05
129.02
64.50
12(b)
12(c)
2,793.73
1.46
2,924.24
2,424.49
(15.24)
2,538.27
2,319.08
(48.70)
2,334.88
13(a)
15
7
6.44
9.75
16.19
2.97
2.97
168.40
6.39
174.79
13(a)
13(c)
13(b)
14
15
16
17
108.35
476.24
11.01
56.41
42.55
1.08
96.14
791.78
807.97
3,732.21
25.83
484.78
188.56
50.64
48.67
98.81
897.29
900.26
3,438.53
8.64
405.55
103.01
42.25
48.21
7.68
101.16
716.50
891.29
3,226.17
Note
11
1
2
The above balance sheet should be read in conjunction with the accompanying notes.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
(r in Crore)
As at
31st March, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2017
Particulars
Note
Revenue from operations
18
Other income
19
Total Income
Expenses:
Year ended
31st March, 2016
4,868.88
4,867.99
5,130.74
5,058.55
261.86
190.56
Cost of materials consumed
20(a)
2,352.21
2,485.46
Changes in inventories of finished goods, stock-in-trade and work-in progress
20(b)
(47.44)
37.06
Purchases of stock-in-trade
Excise duty
169.44
18.13
79.95
7.13
Employee benefit expenses
21
250.92
228.20
Other expenses
23
1,169.07
1,201.02
3,989.02
4,122.81
243.52
189.53
299.02
244.48
(1.80)
(2.83)
Depreciation and amortization expense
22
Finance costs
24
Total expenses
Profit before tax
64.10
12.59
1,141.72
Income tax expense
Current tax
25
Deferred tax
7
Total tax expense
Profit for the year (A)
55.50
842.70
68.82
15.17
935.74
54.95
691.26
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
Income tax relating to items that will not be reclassified to profit or loss
15
Remeasurements of post employment benefit obligations
0.62
0.96
Total
(1.18)
(1.87)
Change in fair value of hedging instruments
25.52
51.18
Items that may be reclassified to profit or loss
Income tax relating to items that may be reclassified to profit or loss
Change in fair value of hedging instruments
Total
16.69
(8.83)
(17.72)
Other comprehensive income for the year, net of tax (B)
15.51
31.59
858.21
722.85
Total comprehensive income for the year (A+B)
Earnings per equity share for profit attributable to owners (in r.)
34
Basic earnings per share
Diluted earnings per share
Significat accounting policy
1
Critical estimates and judgements
6.55
6.53
2
The above statment of profit and loss should be read in conjunction with the accompanying notes.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
33.46
5.37
5.37
237
Financial Statements
Revenue:
(r in Crore)
Year ended
31st March, 2017
Equity Share Capital
Other Equity
12 (a)
12 (a)
Note
64.50
64.52
129.02
0.03
129.05
(r in Crore)
12 (b)
12 (b)
12 (b)
12 (b)
12 (c)
12 (c)
12 (c)
12 (b)
12 (b)
12 (b)
12 (b)
12 (b)
12 (b)
12 (b)
12 (c)
12 (c)
12 (c)
12 (b)
Note
1,933.31
842.70
(1.18)
841.52
(508.62)
2,266.21
237.80
Place: Mumbai
Date: May 2, 2017
UDAY SHAH
Partner
Membership No. 46061
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
(500.86)
1,933.31
Retained
earnings
1,744.78
691.26
(1.87)
689.39
234.98
2.82
-
0.49
234.98
Securities Premium Reserve
234.49
-
Place: Mumbai
Date: May 2, 2017
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
VIVEK KARVE
Chief Financial Officer
7.62
6.42
(2.82)
4.02
3.46
6.42
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
297.97
297.97
-
(64.51)
297.97
(60.69)
(68.37)
7.68
-
(40.08)
(68.37)
Attributable to owners
44.82
20.18
24.64
-
17.52
20.18
Reserves and surplus
General
Share based option out- Treasury WEOMA
reserve
standing account
shares
reserve
362.48
2.96
(28.29)
2.66
-
HARSH MARIWALA
Chairman
[DIN 00210342]
For and on behalf of the Board of Directors
The above statement of changes in equity should be read in conjunction with the accompanying notes.
Balance as at 31st March, 2017
Balance as at 1st April, 2016
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Issue of equity share, net of transaction cost
Purchase/sale of treasury shares by the Trust during the year (net)
Dividend paid (including dividend distribution tax of Rs. 57.03 Cr)
Income of the Trust for the year
Gain/ (loss) transferred to Income Statement
Adjustments on account of exchange movement
Deferred Hedging Gain/ (loss) on hedging instruments
Appropriation during the year
Compensation for options granted during the year
Issue of equity share, net of transaction cost
Issue of bonus shares
Purchase/sale of treasury shares by the Trust during the year (net)
Dividend paid (including dividend distribution tax of Rs. 65.43 Cr)
Income of the Trust for the year
Gain/ (loss) transferred to Income Statement
Deferred Hedging Gain/ (loss) on hedging instruments
Deferred tax on hedge reserve
Compensation for options granted during the year
Balance as at 31st March, 2016
Balance as at 1st April, 2015
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
B. As at 1st April, 2015
Changes in equity share capital
As at 31st March, 2016
Changes in equity share capital
As at 31st March, 2017
A.
1.46
(15.24)
16.69
16.69
35.20
(26.36)
(8.83)
-
67.02
(49.89)
(17.13)
(15.24)
(48.70)
33.46
33.46
Other reserves
Hedge reserve
2,795.19
2,409.25
842.70
15.51
858.21
2.82
7.68
(508.62)
24.64
35.20
(26.36)
(8.83)
(2.82)
4.02
0.49
(64.51)
(40.08)
(500.86)
17.52
67.02
(49.89)
(17.13)
3.46
2,409.25
2,270.38
691.26
31.59
722.85
Total other
equity
(r in Crore)
STATEMENT OF CHANGE IN EQUITY
238
CASH FLOW STATEMENT
For the year ended 31st March, 2017
239
Year ended
31st March, 2017
Year ended
31st March, 2016
1,141.72
935.74
64.10
68.82
Interest income from financial assets at amortised cost
(24.87)
(18.59)
Gain on sale of investments
(30.31)
(1.94)
Particulars
A
CASH FLOW FROM OPERATING ACTIVITIES
PROFIT BEFORE INCOME TAX
Adjustments for:
Depreciation, amortisation and impairment
Finance costs
Net (Gain)/ Loss on disposal of property, plant and equipment
Gain on fair value of financial asset and investment
Dividend income from investments mandatorily measured at fair value through profit or loss
Dividend income from subsidiaries
Employees stock option charge
Stock appreciation rights expense charge/(reversal)
Provision for doubtful debts, advances, deposits and others
Operating profit before working capital changes
Change in operating assets and liabilities:
(Increase)/ Decrease in inventories
(Increase)/ Decrease in trade receivables
(Increase)/ Decrease in other financials assets
(Increase)/ Decrease in other non-current assets
(Increase)/ Decrease in other current assets
(Increase)/ Decrease in loans and other bank balances
Increase/ (Decrease) in provisions
Increase/ (Decrease) in employee benefit obligations
0.91
(18.16)
-
15.17
(9.13)
(1.14)
(25.10)
(171.39)
(114.06)
(3.86)
(1.41)
(165.35)
(81.96)
976.37
853.78
4.02
1.62
(315.40)
(35.51)
0.34
(0.52)
19.53
61.56
5.77
3.46
1.96
24.03
(61.55)
(9.09)
0.71
(16.72)
(45.42)
8.39
0.04
(3.42)
(8.54)
79.23
Changes in Working Capital
(273.78)
(25.70)
Income taxes paid (net of refunds)
(240.58)
(199.07)
(62.50)
(84.67)
(2,352.67)
(3,137.70)
Increase/ (Decrease) in other current liabilities
Increase/ (Decrease) in trade payables
Increase/ (Decrease) in other financial liabilities
Cash generated from Operations
B
12.59
NET CASH INFLOW GENERATED FROM OPERATING ACTIVITIES
CASH FLOW FROM INVESTING ACTIVITIES
Payment for property, plant and equipment
Proceeds from sale of property, plant and equipment
Payment for purchase of investments
Proceeds from sale of investments
Investment in Joint Venture
Payment for purchase of inter-corporate deposits placed
Proceeds from redemption of inter-corporate deposits placed
(Given)/ Repayment of loans by related parties
Dividend income from subsidiaries
Dividend income from investments mandatorily measured at fair value through Profit or Loss
Interest received
NET CASH (OUTFLOW) / INFLOW FROM INVESTING ACTIVITIES
(2.67)
1.62
702.59
462.01
0.76
2,355.15
(16.30)
(249.50)
220.50
(0.22)
171.39
-
20.87
87.48
(2.35)
0.49
828.08
629.01
13.51
2,997.85
(1.35)
(94.50)
62.00
4.19
114.06
25.10
15.60
(85.91)
Financial Statements
(r in Crore)
CASH FLOW STATEMENT
240
For the year ended 31st March, 2017
(r in Crore)
Year ended
31st March, 2017
Particulars
C
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of share capital (net of share issue expenses)
(Purchase)/ Sale of Investments by WEOMA Trust (Net)
Repayment of borrowings
(13.13)
Dividends paid to company's shareholders
E
F
0.03
32.32
(70.50)
Interest paid
D
Year ended
31st March, 2016
NET CASH (OUTFLOW) / INFLOW FROM FINANCING ACTIVITIES
NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (A+B+C)
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at end of the year (Refer note 6 (d))
(508.73)
(560.01)
(10.52)
15.58
5.06
The cash flow statement has been prepared under the indirect method as set out in Indian Accounting Standard (Ind AS 7) statement of cash flows.
The above statement of Cash Flows should be read in conjunction with the accompanying notes.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
0.50
(22.56)
(11.29)
(15.44)
(500.69)
(549.48)
(6.38)
21.96
15.58
NOTES
To Financial Statements for the year ended 31st March, 2017
Marico Limited (“Marico” or ‘the Company’), headquartered in
Mumbai, Maharashtra, India, carries on business in branded
consumer products. Marico manufactures and markets products
under the brands such as Parachute, Parachute Advansed, Nihar,
Nihar Naturals, Saffola, Hair & Care, Revive, Mediker, Livon, Setwet, etc. Marico’s products reach its consumers through retail
outlets serviced by Marico’s distribution network comprising
regional offices, carrying & forwarding agents, redistribution
centers & distributors spread all over India.
Note 1: Significant accounting policies:
This note provides a list of the significant accounting policies
adopted in preparation of these financial statements. These
policies have been consistently applied to all the years presented
unless otherwise stated.
The financial statements were approved for issue by Board of
Directors on 2nd May, 2017.
a)
Basis of preparation:
i. Compliance with IND AS :
These financial statements comply in all material
aspects with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act,
2013 (the Act) read with rule 4 of the Companies
(Indian Accounting standards) Rules, 2015 and other
relevant provisions of the act.
These financial statements for the year ended 31st
March, 2017 are the first financials with comparatives
prepared under Ind AS. For all periods upto and
including the year ended 31st March, 2016, the
Company prepared its financial statements in
accordance with the generally accepted accounting
principles (hereinafter referred to as ‘Previous GAAP’)
used for its statutory reporting requirement in India
immediately before adopting Ind AS.
The date of transition to Ind AS is 1st April, 2015.
Refer Note 35 for the first time adoption exemptions
availed by the Company.
Reconciliations and explanations for the effect of
the transition from Previous GAAP to Ind AS on the
Company’s Balance Sheet, Statement of Profit and
Loss and Statement of Cash Flows are provided in
Note 35.
ii.
•
•
•
•
certain financial assets and liabilities (including
derivative
instruments)
and
contingent
consideration that are measured at fair value;
assets held for sale measured at lower of cost
or fair value less cost to sell;
share-based payment liability measured at fair
value
b)
Segment Reporting:
c)
Foreign currency transactions:
Operating segments are reported in a manner consistent
with internal reporting provided to the Chief Operating
Decision Maker (CODM). The Managing Director & CEO is
designated as CODM.
i.
Functional and presentation currencies:
Items included in the financial statements of the
Company are measured using the currency of the
primary economic environment in which the entity
operates (‘the functional currency’). The financial
statements are presented in INR which is the
functional and presentation currency for Marico
Limited.
ii.
Transactions and Balances:
Foreign currency transactions are translated into the
functional currency at the exchange rates on the date
of transaction. Foreign exchange gains and losses
resulting from settlement of such transactions and
from translation of monetary assets and liabilities
at the year-end exchange rates are generally
recognized in the profit and loss. They are deferred in
equity if they relate to qualifying cash flow hedges.
Foreign exchange differences regarded as an
adjustment to borrowing costs are presented in the
Statement of Profit and Loss, within finance costs.
All other foreign exchange gains and losses are
presented in the Statement of Profit and Loss on a
net basis.
Non-monetary foreign currency items are carried at
cost and accordingly the investments in shares of
foreign subsidiaries are expressed in Indian currency
at the rate of exchange prevailing at the time when
the original investments are made or fair values
determined.
d)
Historical cost convention:
The financial statements have been prepared on a
historical cost basis, except for the following:
defined benefit plan assets measured at fair
value; and
Revenue recognition:
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue
are inclusive of excise duty and net of returns, trade
allowances, rebates, value added taxes and amounts
collected on behalf of third parties.
The company recognizes revenue when the amount can
be reliably measured, it is probable that future economic
benefits will flow to the entity and specific criteria
have been met for each of the company’s activities as
described below. The company bases its estimates on
Financial Statements
Back ground and operations
241
NOTES
242
To Financial Statements for the year ended 31st March, 2017
historical results, taking into consideration the type of
customer, the type of transaction and the specifics of
each arrangement
i.
Sale of goods:
Timing of recognition: Sale of goods is recognized
when substantial risks and rewards of ownership are
passed to the customers, depending on individual
terms, and are stated net of trade discounts, rebates,
incentives, subsidy, sales tax and value added tax
except excise duty.
Measurement of revenue: Accumulated experience
is used to estimate and provide for discounts, rebates,
incentives and subsidies. No element of financing is
deemed present as the sales are made with credit
terms, which is consistent with market practice.
ii.
e)
Income recognition:
f)
i.
ii.
g)
Revenue from services is recognized in the
accounting period in which the services are rendered.
Interest income from debt instruments is recognised
using the effective interest rate method. The effective
interest rate is the rate that exactly discounts
estimated future cash receipts through the expected
life of the financial asset to the gross carrying amount
of a financial asset. When calculating the effective
interest rate, the company estimates the expected
cash flows by considering all the contractual terms
of the financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
Dividends are recognised in profit or loss only when
the right to receive payment is established, it is
probable that the economic benefits associated with
the dividend will flow to the company, and the amount
of the dividend can be measured reliably.
iii. Revenue from royalty income is recognized on
accrual basis.
Government Grants:
Grants from the government are recognized at their fair
value where there is a reasonable assurance that the
grant will be received and the company will comply with all
attached conditions.
Government grants relating to income are deferred and
recognised in the profit or loss over the period necessary
to match them with the costs that they are intended to
compensate and reduce from corresponding cost.
Income from export incentives such as premium on sale
of import licenses, duty drawback etc. are recognized
on accrual basis to the extent the ultimate realization is
reasonably certain.
Government grants relating to the purchase of property,
plant and equipment are included in non-current liabilities
as deferred income and are credited to profit or loss on a
straight-line basis over the expected lives of the related
assets and presented within other operating income.
Income Tax:
The income tax expense or credit for the period is the tax
payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction
adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences and to
unused tax losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate
on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the Balance
Sheet method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the financial statements. Deferred income
tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of
the reporting period and are expected to apply when
the related deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets
and liabilities and when the deferred tax balances relate
to the same taxation authority. Current tax assets and
tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on
a net basis, or to realise the asset and settle the liability
simultaneously.
Current and deferred tax is recognised in the Statement of
Profit and Loss, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
Minimum Alternative Tax (MAT) credit, which is equal
to the excess of MAT (calculated in accordance with
provisions of Section 115JB of the Income tax Act,
1961) over normal income-tax is recognized as an item
in deferred tax asset by crediting the Statement of Profit
NOTES
To Financial Statements for the year ended 31st March, 2017
Property, plant and equipment:
Freehold land is carried at historical cost. All other items
of property, plant and equipment are stated at historical
cost, less accumulated depreciation/amortisation and
impairments, if any. Historical cost includes taxes,
duties, freight and other incidental expenses related to
acquisition and installation. Indirect expenses during
construction period, which are required to bring the asset
in the condition for its intended use by the management
and are directly attributable to bringing the asset to its
position, are also capitalized.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the company and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs
and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Capital work-in-progress comprises cost of fixed assets
that are not yet ready for their intended use at the year
end.
i)
Fixtures in leasehold premises are amortized over the
primary period of the lease or useful life of the fixtures
whichever is lower.
Depreciation on additions / deletions during the year is
provided from the month in which the asset is capitalized
up to the month in which the asset is disposed off.
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for
on a prospective basis.
An asset’s carrying amount is written down immediately
to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount.
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
included in profit or loss within other gains/(losses).
Intangible Assets:
i.
Transition to IND AS
On transition to Ind AS, the company has elected to
continue with the carrying value of all of its property, plant
and equipment recognised as at 1st April, 2015 measured
as per the previous GAAP and use that carrying value as
the deemed cost of the property, plant and equipment.
Intangible assets with finite useful life are stated at
cost of acquisition, less accumulated depreciation/
amortisation and impairment loss, if any. Cost
includes taxes, duties and other incidental expenses
related to acquisition and other incidental expenses.
Amortisation is recognised in profit or loss on a
straight-line basis over the estimated useful lives of
respective intangible assets, but not exceeding the
useful lives given here under:
Assets
Computer software
ii.
As per technical evaluation of the Company, the useful life
considered for the following items is lower than the life
stipulated in Schedule II to the Companies Act, 2013:
iii. Research and Development:
iv. Transition to IND AS:
Assets
Motor Vehicle – Motor Car, Bus and Lorries, Motor
Cycle, Scooter
Useful Life (Years)
2
Computer – Server and Network
Plant & Machinery – Moulds
Leasehold lands
5
Office equipment - Mobile and Communication tools
Intangible assets with finite useful life:
Depreciation and amortization
Depreciation is calculated using the straight-line method
to allocate cost of property plant and equipment, net of
residual values, over their estimated useful lives.
3
6
Lease period
Extra shift depreciation is provided on “Plant” basis.
Assets individually costing Rs. 25,000 or less are
depreciated fully in the year of acquisition.
Useful Life (Years)
3
Intangible assets with indefinite useful life:
Intangible assets with indefinite useful lives are
measured at cost and are not amortised, but are
tested for impairment annually or more frequently if
events or changes in circumstances indicate that it
might be impaired.
Capital expenditure on research and development
is capitalized and depreciated as per accounting
policy mentioned in para h and i above. Revenue
expenditure is charged off in the year in which it is
incurred.
On transition to Ind AS, the company has elected to
continue with the carrying value of all of its intangible
assets recognised as at 1st April, 2015 measured as
per the previous GAAP and use that carrying value as
the deemed cost of intangible assets.
Financial Statements
h)
and Loss only when and to the extent there is convincing
evidence that the Company will be able to avail the said
credit against normal tax payable during the period of
fifteen succeeding assessment years.
243
NOTES
244
To Financial Statements for the year ended 31st March, 2017
j)
Investment property:
Property (land or a building-or part of a building-or both)
that is held for long term rental yields or for capital
appreciation or both, rather than for:
i.
ii.
use in the production or supply of goods or services
or for administrative purposes; or
sale in the ordinary course of business.
is recognized as Investment Property in the books.
Investment property is measured initially at its
cost, including related transaction costs and where
applicable borrowing costs. Subsequent expenditure
is capitalized to the assets carrying amount only
when it is probable that future economic benefits
associated with the expenditure will flow to the
company and the cost of the item can be measured
reliably. All other repairs and maintenance costs are
expensed when incurred. When part of an investment
property is replaced, the carrying amount of the
replaced part is derecognised.
Depreciation is provided on all Investment Property
on straight line basis, based on useful life of the
assets determined in accordance with para “h”above.
The estimated useful lives, residual values and
depreciation method are reviewed at the end of each
reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
the date of the sale of the non-current asset is recognised
at the date of derecognition.
Non-current assets are not depreciated or amortised
while they are classified as held for sale.
Non-current assets classified as held for sale are
presented separately from the other assets in the balance
sheet.
l)Lease:
i. As a leasee
Transition to IND AS
k)
On transition to Ind AS, the company has elected to
continue with the carrying value of all of its investment
properties recognised as at 1st April, 2015 measured
as per the previous GAAP and use that carrying value
as the deemed cost of investment properties.
Non-Current Asset held for Sale:
Non-current assets are classified as Non-Current asset
held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through
continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount
and fair value less costs to sell, except for assets such
as deferred tax assets, assets arising from employee
benefits, financial assets and investment property that
are carried at fair value and contractual rights under
insurance contracts, which are specifically exempt from
this requirement.
An impairment loss is recognised for any initial or
subsequent write-down of the asset to fair value less
costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell an asset, but not
in excess of any cumulative impairment loss previously
recognised. A gain or loss not previously recognised by
Leases of property, plant and equipment where the
company, as lessee, has substantially all the risks and
rewards of ownership are classified as finance leases
at the fair value of the leased property or, if lower,
the present value of the minimum lease payments.
The corresponding rental obligations, net of finance
charges, are included in borrowings or other financial
liabilities as appropriate. Each lease payment is
allocated between the liability and finance cost. The
finance cost is charged to the profit or loss over the
lease period so as to produce a constant periodic rate
of interest on the remaining balance of the liability for
each period.
Leases in which a significant portion of the risks
and rewards of ownership are not transferred to the
company as lessee are classified as operating leases.
Payments made under operating leases (net of any
incentives received from the lessor) are charged to
profit or loss on a straight-line basis over the period
of the lease unless the payments are structured to
increase in line with expected general inflation to
compensate for the lessor’s expected inflationary
increase.
ii.
As a lessor
m)
Investment and Other financial assets:
Lease income from operating leases where the
company is a lessor is recognised in income on
a straight-line basis over the lease term unless
the receipts are structured to increase in line with
expected general inflation to compensate for the
expected inflationary cost increases. The respective
leased assets are included in the balance sheet
based on their nature.
i. Classification:
The Company classifies its financial assets in the
following measurement categories:
•
•
those to be measured subsequently at fair value
(either through other comprehensive income,
or through profit or loss), and
those measured at amortised cost.
NOTES
To Financial Statements for the year ended 31st March, 2017
For assets measured at fair value, gains and
losses will either be recorded in profit or
loss or other comprehensive income. For
investments in debt instruments, this will
depend on the business model in which the
investment is held. For investments in equity
instruments, this will depend on whether the
company has made an irrevocable election at
the time of initial recognition to account for the
equity investment at fair value through other
comprehensive income.
ii.Measurement:
At initial recognition, the company measures a
financial asset at its fair value plus, in the case
of a financial asset not at fair value through
profit or loss, transaction costs that are directly
attributable to the acquisition of the financial
asset. Transaction costs of financial assets
carried at fair value through profit or loss are
expensed in profit or loss.
Debt instruments
gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and
recognised in other gains/ (losses). Interest
income from these financial assets is included
in other income.
Classification of debt assets will be driven by
the Company’s business model for managing
the financial assets and the contractual cash
flow characteristics of the financial assets.
Subsequent measurement of debt instruments
depends on the company’s business model
for managing the asset and the cash flow
characteristics of the asset.
•Amortised Cost: Assets that are held for
collection of contractual cash flows where
those cash flows represent solely payments
of principal and interest are measured at
amortised cost. A gain or loss on a debt
investment that is subsequently measured at
amortised cost and is not part of a hedging
relationship is recognised in profit or loss when
the asset is derecognised or impaired. Interest
income from these financial assets is included
in finance income.
•Fair value through other comprehensive
income (FVOCI): Assets that are held for
collection of contractual cashflows and for
selling the financial assets, where the assets
cash flow represent solely payments of
principal and interest, are measured at fair
value through other comprehensive income
(FVOCI). Movements in the carrying amount are
taken through OCI, except for the recognition
of impairment gains or losses, interest revenue
and foreign exchange gains and losses which
are recognised in profit and loss. When the
financial asset is derecognised, the cumulative
•Fair value through profit or loss: Assets that
do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit
or loss. A gain or loss on a debt investment that
is subsequently measured at fair value through
profit or loss and is not part of a hedging
relationship is recognised in profit or loss and
presented net in the statement of profit and
loss within other gains/(losses) in the period
in which it arises. Interest income from these
financial assets is included in other income.
Equity instruments
The company subsequently measures all equity
investments at fair value. Where the company’s
management has elected to present fair value
gains and losses on equity investments in other
comprehensive income, there is no subsequent
reclassification of fair value gains and losses to
profit or loss. Dividends from such investments
are recognised in profit or loss as other income
when the company’s right to receive the dividend is
established.
iii. Impairment of financial assets:
iv. Derecognition of financial assets:
The Company assesses if there is any significant
increase in credit risk pertaining to the assets and
accordingly create necessary provisions, wherever
required.
A financial asset is derecognised only when
•
•
The company has transferred the rights to
receive cash flows from the financial asset or
retains the contractual rights to receive the
cash flows of the financial asset, but assumes a
contractual obligation to pay the cash flows to
one or more recipients
Where the entity has transferred an asset, the
company evaluates whether it has transferred
substantially all risks and rewards of ownership
of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not
transferred substantially all risks and rewards
of ownership of the financial asset, the financial
asset is not derecognised.
Where the entity has neither transferred a
financial asset nor retains substantially all
risks and rewards of ownership of the financial
Financial Statements
245
NOTES
246
To Financial Statements for the year ended 31st March, 2017
asset, the financial asset is derecognised if
the company has not retained control of the
financial asset. Where the company retains
control of the financial asset, the asset is
continued to be recognised to the extent of
continuing involvement in the financial asset.
n)
Derivatives and hedging activities:
The Company designates certain derivatives as either:
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting
period. The accounting for subsequent changes in fair
value depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item
being hedged.
•
•
hedges of the fair value of recognised assets or
liabilities or a firm commitment (fair value hedges)
hedges of a particular risk associated with the cash
flows of recognised assets and liabilities and highly
probable forecast transactions (cash flow hedges).
The Company documents at the inception of the
hedging transaction the relationship between
hedging instruments and hedged items, as well
as its risk management objective and strategy
for undertaking various hedge transactions. The
Company also documents its assessment, both at
hedge inception and on an ongoing basis, of whether
the derivatives that are used in hedging transactions
have been and will continue to be highly effective
in offsetting changes in fair values or cash flows of
hedged items.
The fair values of various derivative financial
instruments used for hedging purposes are disclosed
in Note 27. Movements in the hedging reserve in
shareholders’ equity are shown in Note 12(c). The
full fair value of a hedging derivative is classified as
a non-current asset or liability when the remaining
maturity of the hedged item is more than 12 months;
it is classified as a current asset or liability when the
remaining maturity of the hedged item is less than
12 months. Trading derivatives are classified as a
current asset or liability.
p)
q)
The effective part of the changes in fair value of hedge
instruments is recognized in other comprehensive
income, while any ineffective part is recognized
immediately in the statement of profit and loss.
o)Inventories:
Raw materials, packing materials, stores and spares are
valued at lower of cost and net realizable value.
By-products and unserviceable / damaged finished goods
are valued at estimated net realizable value.
Cost of raw materials and traded goods comprises cost
of purchases. Cost of work-in progress and finished
goods comprises direct materials, direct labour and an
appropriate proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis
of normal operating capacity. Cost of inventories
also includes all other costs incurred in bringing the
inventories to their present location and condition. Cost is
assigned on the basis of weighted average method. Costs
of purchased inventory are determined after deducting
rebates and discounts. Net realisable value is the
estimated selling price in the ordinary course of business
less the estimated costs of completion and the estimated
costs necessary to make the sale.
Trade Receivables:
Trade receivables are recognised initially at fair value
and subsequently measured at cost less provision for
impairment.
Trade and other payables:
These amounts represent liabilities for goods and services
provided to the Company prior to the end of financial year
which are unpaid. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months after the reporting period.
r)Borrowings:
Cash flow hedge reserve
Work-in-progress, finished goods and stock-in-trade
(traded goods) are valued at lower of cost and net
realizable value.
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings. Fees paid on the establishment of loan
facilities are recognised as transaction costs of the loan
to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred
until the draw down occurs. To the extent there is no
evidence that it is probable that some or all of the facility
will be drawn down, the fee is capitalised as a prepayment
for liquidity services and amortised over the period of the
facility to which it relates.
Borrowings are removed from the balance sheet when
the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished
or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
NOTES
To Financial Statements for the year ended 31st March, 2017
t)
Borrowing Cost
General and specific borrowing costs that are directly
attributable to the acquisition or construction of a
qualifying asset are capitalised during the period of time
that is required to complete and prepare the asset for its
intended use or sale. Qualifying assets are assets that
necessarily take a substantial period of time to get ready
for their intended use or sale.
Investment income earned on the temporary investment
of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation.
Other borrowing costs are expensed in the period in which
they are incurred.
Employee Benefits:
i.
ii.
v.
vi. Employee Stock Option Plan:
The Company provides for the encashment of leave
with pay subject to certain rules. The employees are
entitled to accumulate leave subject to certain limits,
for future encashment / availment. The liability is
provided based on the number of days of unutilized
leave at each Balance Sheet date on the basis of an
independent actuarial valuation. Actuarial gains and
losses arising from changes in actuarial assumptions
are recognised in the Statement of Profit and Loss.
The fair value of options granted under the company’s
employee stock option scheme (excess of the fair
value over the exercise price of the option at the
date of grant) is recognised as an employee benefit
expense with a corresponding increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted.
•
•
The Company makes contribution to the
Superannuation Scheme, a defined contribution
scheme, administered by insurance companies. The
Company has no obligation to the scheme beyond its
monthly contributions.
•
Provident fund contributions are made to a trust
administered by the Company. The Company’s
liability is actuarially determined (using the Projected
Unit Credit method) at the end of the year and any
shortfall in the fund balance maintained by the Trust
set up by the Company is additionally provided for.
Actuarial losses and gains are recognized in other
comprehensive income and shall not be reclassified
to the Statement of Profit and Loss in a subsequent
period.
Liabilities with regard to the gratuity benefits payable
in future are determined by actuarial valuation at each
Balance Sheet date using the Projected Unit Credit
method and contributed to Employees Gratuity Fund.
Actuarial gains and losses arising from changes
in actuarial assumptions are recognized in other
comprehensive income and shall not be reclassified
u)
including any market performance conditions
(e.g. the entity’s share price)
excluding the impact of any service and nonmarket performance vesting conditions (e.g.
profitability, sales growth targets and remaining
an employee of the entity over a specified time
period), and
including the impact of any non-vesting
conditions (e.g. the requirement for employees
to save or holding shares for a specific period
of time).
The total expense is recognised over the
vesting period, which is the period over which
all of the specified vesting conditions are to be
satisfied.
vii. Employee Stock Appreciation Rights Scheme:
iv.Gratuity:
Leave encashment / Compensated absences:
Superannuation Fund:
iii. Provident fund:
Short term obligations:
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled
wholly within 12 months after the end of the period
in which the employees render the related service
are recognised in respect of employees’ services
upto the end of the reporting and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
to the Statement of Profit and Loss in a subsequent
period.
Liability for the company’s Employee Stock
Appreciation Rights (STAR), granted pursuant to the
Company’s Employee Stock Appreciation Rights
Plan, 2011, shall be measured, initially and at the end
of each reporting period until settled, at the fair value
of the STARs, by applying an option pricing model, be
and is recognized as employee benefit expense over
the relevant service period. The liability is presented
as employee benefit obligation in the balance sheet.
Provisions and Contingent Liabilities:
Contingent Liabilities are disclosed in respect of possible
obligations that arise from past events but their existence
will be confirmed by the occurrence or non-occurrence
of one or more uncertain future events not wholly
Financial Statements
s)
247
NOTES
248
To Financial Statements for the year ended 31st March, 2017
v)
w)
within the control of the Company or where any present
obligation cannot be measured in terms of future outflow
of resources or where a reliable estimate of the obligation
cannot be made.
Provisions are recognised when the Company has a
present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will
be required to settle the obligation and the amount can
be reliably estimated. Provisions are not recognised for
future operating losses.
Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting
period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market
assessments of the time value of money and the risks
specific to the liability. The increase in the provision due
to the passage of time is recognised as interest expense.
Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as
a whole. A provision is recognized even if the likelihood
of an outflow with respect to any one item included in the
same class of obligations may be small.
A contingent asset is disclosed, where an inflow of
economic benefits is probable. An entity shall not
recognise a contingent asset unless the recovery is
virtually certain.
Cash and Cash Equivalents:
For the purpose of presentation in the statement of cash
flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other shortterm, highly liquid investments with original maturities of
three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant
risk of changes in value.
Impairment of assets:
Intangible assets that have an indefinite useful life are
not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes
in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is
recognised for the amount by which asset’s carrying
amount exceeds its recoverable amount. The recoverable
amount is higher of an asset’s fair value less cost of
disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from
other assets or group of assets (cash-generating units).
x)
y)
Non-financial assets other than goodwill that suffered
impairment are reviewed for possible reversal of the
impairment at the end of each reporting period.
Investment in subsidiaries and joint ventures:
Investment in subsidiaries and joint ventures are
recognised at cost as per Ind AS 27. Provision for
diminution, if any, in the value of investments is made to
recognise a decline in value, other than temporary.
Earnings Per Share
i.
•
Basic earnings per share: Basic earnings per share is calculated by dividing:
•
ii.
the profit attributable to owners of the Company
by the weighted average number of equity
shares outstanding during the financial year,
adjusted for bonus elements in equity shares
issued during the year and excluding treasury
shares.
Diluted earnings per share: Diluted earnings per
share adjusts the figures used in the determination of
basic earnings per share to take into account:
•
•
the after income tax effect of interest and
other financing costs associated with dilutive
potential equity shares, and
the weighted average number of additional
equity shares that would have been outstanding
assuming the conversion of all dilutive potential
equity shares.
z)
Contributed Equity:
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Equity shares are classified as equity.
aa)Dividend:
ab)
Provision is made for the amount of any dividend
declared, being appropriately authorised and no longer
at the discretion of the entity, on or before the end of
the reporting period but not distributed at the end of the
reporting period.
Rounding off:
All amounts disclosed in the financial statement and
notes have been rounded off to the nearest crore, unless
otherwise stated
ac) Amendments to Ind AS 7, ‘Statement of cash flows’ on
disclosure initiative: The amendment to Ind AS 7 introduced an additional
disclosure that will enable users of financial statements
to evaluate changes in liabilities arising from financing
activities. This includes changes arising from cash flows
NOTES
To Financial Statements for the year ended 31st March, 2017
ad) Amendments to Ind AS 102, ‘Share based payments’
The amendment to Ind AS 102 clarifies the measurement
basis for cash settled share-based payments and the
accounting for modifications that change an award from
cash-settled to equity-settled. It also introduces an
exception to the principles in Ind AS 102 that will require
an award to be treated as if it was wholly equity-settled,
where an employer is obliged to withhold an amount for
the employee’s tax obligation associated with a sharebased payment and pay that amount to the tax authority.
The Company is currently assessing the potential impact
of this amendment. These amendments are mandatory for
the reporting period beginning on or after 1st April, 2017.
The Company intends to adopt the amendments when
it becomes effective. There are no other standards or
amendments that are not yet effective and that would be
expected to have a material impact on the Company in the
current or future reporting periods and on foreseeable
future transactions.
Financial Statements
(e.g. drawdowns and repayments of borrowings) and
non-cash changes (i.e. changes in fair values), changes
resulting from acquisitions and disposals and effect of
foreign exchange differences. Changes in financial assets
must be included in this disclosure if the cash flows
were, or will be, included in cash flows from financing
activities. This could be the case, for example, for assets
that hedge liabilities arising from financing liabilities. The
Company is currently assessing the potential impact
of this amendment. These amendments are mandatory
for the reporting period beginning on or after 1st April,
2017.
249
NOTES
250
To Financial Statements for the year ended 31st March, 2017
2
well as forward looking estimates at the end of each
reporting period.
Critical Estimates and Judgements
The preparation of financial statements requires the use
of accounting estimates which, by definition, will seldom
equal the actual results. Management also needs to
exercise judgement in applying the Company’s accounting
policies. This note provides an overview of the areas that
involved a higher degree of judgement or complexity, and
of items which are more likely to be materially adjusted due
to estimates and assumptions turning out to be different
than those originally assessed. Detailed information about
each of these estimates and judgements is included in
relevant notes together with information about the basis
of calculation for each affected line item in the financial
statements.
The preparation of the financial statements in conformity
with GAAP requires the Management to make estimates
and assumptions that affect the reported balances
of assets and liabilities and disclosures relating to
contingent assets and liabilities as at the date of the
financial statements and reported amounts of income
and expenses during the period. These estimates
and associated assumptions are based on historical
experience and management’s best knowledge of current
events and actions the Company may take in future.
Information about critical estimates and assumptions that
have a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities are included
in the following notes:
(a) Impairment of financial assets (including trade
receivable) (Note 27)
(b) Estimation of defined benefit obligations (Note 15)
(c) Estimation of current tax expenses and payable (Note
25)
(d) Estimated impairment of intangible assets with
indefinite useful life (Note 5)
(e) Estimation of provisions and contingencies (Note 14
and 31)
(a) Impairment of financial assets (including trade
receivable)
Allowance for doubtful receivables represent the
estimate of losses that could arise due to inability
of the customer to make payments when due.
These estimates are based on the customer ageing,
customer category, specific credit circumstances
and the historical experience of the Company as
(b) Estimation of defined benefit obligations
(c) Estimation of current tax expenses and payable
(d) Estimated impairment of intangible assets with
indefinite useful life
The liabilities of the Company arising from employee
benefit obligations and the related current service
cost, are determined on an actuarial basis using
various assumptions. Refer note 15 for significant
assumptions used.
Taxes recognized in the financial statements reflect
management’s best estimate of the outcome based
on the facts known at the balance sheet date. These
facts include but are not limited to interpretation of
tax laws of various jurisdictions where the company
operates. Any difference between the estimates and
final tax assessments will impact the income tax as
well the resulting assets and liabilities.
Impairment testing for intangible assets with
indefinite useful life is done at least once annually and
upon occurrence of an indication of impairment. The
recoverable amount of a cash generating unit (CGU)
is determined based on value-in-use calculations
which require the use of assumptions.
(e) Estimation of provisions and contingencies
Provisions are liabilities of uncertain amount or
timing recognised where a legal or constructive
obligation exists at the balance sheet date, as a result
of a past event, where the amount of the obligation
can be reliably estimated and where the outflow of
economic benefit is probable. Contingent liabilities
are possible obligations that may arise from past
event whose existence will be confirmed only by
the occurrence or non-occurrence of one or more
uncertain future events which are not fully within the
control of the Company. The Company exercises
judgement and estimates in recognizing the
provisions and assessing the exposure to contingent
liabilities relating to pending litigations. Judgement is
necessary in assessing the likelihood of the success
of the pending claim and to quantify the possible
range of financial settlement. Due to this inherent
uncertainty in the evaluation process, actual losses
may be different from originally estimated provision.
0.18
0.95
1.13
215.89
8.08
7.85
15.93
231.52
1.43
232.95
0.18
223.26
8.08
(0.00)
8.08
229.46
2.60
(0.54)
231.52
Buildings
6.46
(1.16)
5.30
211.44
43.33
47.03
(2.77)
87.59
225.17
83.35
(4.19)
304.33
6.46
175.38
43.33
43.33
225.17
188.57
37.36
(0.76)
Plant and
machinery
0.04
0.04
6.90
1.64
2.35
(0.00)
3.99
9.09
1.84
(0.00)
10.93
7.45
1.64
1.64
8.25
0.45
(0.01)
0.40
9.09
Furniture and
fittings
Refer to Note 32 for disclosure of contractual commitments for acquisition of property, plant and equipment.
Capital work-in-progress mainly comprises new manufacturing unit set up in Guwahati, India (North Eastern Region).
9.93
1.04
1.04
0.65
10.32
10.97
0.65
-
1.05
(0.40)
0.65
Leasehold improvements
6.69
(0.20)
6.49
473.91
58.11
60.83
(2.84)
116.10
500.98
99.99
(4.47)
596.50
6.69
436.18
58.11
(0.00)
58.11
458.00
44.30
(1.32)
(0.00)
500.98
Total
7.94
-
36.54
72.63
(101.23)
7.94
36.54
-
2.07
82.03
(47.56)
36.54
CWIP
(r in Crore)
Gross carrying amount of leasehold land represents amounts paid under lease agreements which are due for renewal in the years ranging from 2070 to 2109. In one case where the
lease is expiring in 2070, the company has an option to purchase the property.
Leased assets
(iv) Capital work-in-progress
0.05
(0.03)
0.02
1.68
4.60
1.84
(0.01)
6.43
6.64
1.55
(0.06)
8.13
0.05
1.99
4.60
(0.00)
4.60
2.76
3.89
(0.01)
6.64
Office Equipment
Impairment loss mainly pertains to Building, Plant and machinery, Furniture and fittings and Office equipment which are lying idle, damaged and having no future use.
(iii) Contractual obligations
(v) 1.21
0.07
0.32
(0.06)
0.33
0.26
1.50
(0.22)
1.54
0.19
0.07
0.07
0.26
0.26
Vehicles
First ranking pari passu charge over all current and future plant and machinery for External Commercial Borrowings loan as on 31st March, 2016 and 1st April, 2015 (Refer note 13(a)).
Impairment loss
(ii) 25.02
1.84
Property, plant and equipment pledged as security
0.39
0.40
0.79
-
25.42
1.84
25.81
25.81
0.39
0.39
-
1.84
1.84
25.93
(0.12)
25.81
Leasehold
land
1.72
0.12
1.84
Freehold land
(i) Year ended 31st March, 2017
Gross carrying amount
Opening gross carrying amount
Additions
Disposals / transfers
Adjustments
Closing gross carrying amount
Accumulated depreciation
Opening accumulated depreciation
Depreciation charge during the year
Disposals / transfers
Closing accumulated depreciation
Impairment loss
Opening accumulated impairment
Impairment charge/(reversal) during the year
Closing balance
Net carrying amount
Year ended 31st March, 2016
Gross carrying amount
Deemed Cost as at 1 April, 2015
Additions
Disposals / transfers
Adjustments
Closing gross carrying amount
Accumulated depreciation
Depreciation charge during the year
Disposals / transfers
Closing accumulated depreciation
Impairment loss
Impairment charge/(reversal) during the year
Net carrying amount
Property, Plant and Equipment
To Financial Statements for the year ended 31st March, 2017
Financial Statements
3
NOTES
251
NOTES
252
To Financial Statements for the year ended 31st March, 2017
4
Investment Properties
Particulars
As at
31st March, 2016
Opening gross carrying amount/Deemed cost
24.72
11.76
Closing gross carrying amount
24.72
24.72
Gross carrying amount
Additions (Refer note (v) below)
-
0.43
Closing accumulated depreciation
0.86
0.43
23.86
24.29
0.43
Net carrying amount
As at
31st March, 2017
Rental income
1.20
Direct operating expenses
0.15
(r in Crore)
As at
31st March, 2016
0.91
0.20
Profit from investment properties before depreciation
1.05
0.71
Profit from investment properties
0.62
0.28
Depreciation
0.43
0.43
(ii) Leasing arrangements
Investment properties are leased to tenants under long-term operating leases with rentals payable monthly. Minimum
lease payments receivable under non-cancellable operating leases of investment properties are as follows:
Particulars
Within one year
Later than one year but not later than 5 years
Later than 5 years
-
0.43
(i) Amounts recognised in profit or loss for investment properties
Particulars
12.96
Accumulated Depreciation
Depreciation charge
(r in Crore)
As at
31st March, 2017
(iii) Fair value
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
1.36
2.56
3.47
1.20
-
0.91
-
0.64
-
Particulars
Investment properties
As at
31st March, 2017
41.54
As at
31st March, 2016
39.06
(r in Crore)
As at
1st April, 2015
13.07
Estimation of fair value
The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair
value is current prices in an active market for similar properties.
(iv) The fair values of investment properties have been determined by independent valuer who holds recognised and relevant
professional qualification . The main inputs used are rental growth rates, expected vacancy rates, terminal yields and
discount rates based on comparable transactions and industry data. All resulting fair value estimates for investment
properties are included in level 3.
(v) During the year 2015-16 building appearing as asset held for disposal having a net carrying value of Rs.12.74 Crore
(Deemed cost of Rs. 12.96 Crore less depreciation of Rs. 0.22 Crore) has been reclassified as Investment property.
NOTES
To Financial Statements for the year ended 31st March, 2017
Other Intangible Assets
(r in Crore)
Trademarks and
copyrights
(refer note 7(i))
Computer software
Total
18.56
5.00
23.56
Year ended 31st March, 2016
Gross carrying amount
Deemed cost as at 1st April, 2015
Additions
Closing gross carrying amount
-
3.26
3.26
18.56
8.26
26.82
Accumulated amortisation
Amortisation charge for the year
-
3.44
3.44
Closing accumulated amortisation
-
3.44
3.44
18.56
4.82
23.38
18.56
8.26
26.82
Closing net carrying amount
Year ended 31st March, 2017
Gross carrying amount
Opening gross carrying amount
Additions
-
1.24
1.24
18.56
9.50
28.06
Opening accumulated amortisation
-
3.44
3.44
Amortisation charge for the year
-
3.04
3.04
Closing accumulated amortisation
-
6.48
6.48
18.56
3.02
21.58
Closing gross carrying amount
Accumulated amortisation
Closing net carrying amount
Note
Trademarks of Rs 18.56 Crore as at 31st March, 2017 (Rs. 18.56 Crore as at 31st March, 2016 and as at 1st April, 2015) are
pending registration/ recording in the name of the Company, in certain countries.
Financial Statements
5
253
NOTES
254
To Financial Statements for the year ended 31st March, 2017
6(a)Investments
Particulars
Non-current Investments
Investment in Subsidiaries and Joint venture
Equity instruments
Subsidiaries
Joint venture
Other Non Current Investments
Equity instruments
Others
Intercorporate deposits
Bonds
Government securities
Mutual funds
Current Investments
Intercorporate deposits
Debentures
Mutual funds
Total Investments
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
1,089.34
16.30
1,105.64
1,089.34
1.35
1,090.69
1,089.34
1,089.34
0.14
15.77
24.78
0.01
16.42
57.12
1.47
24.78
0.01
15.13
41.39
4.52
24.78
0.01
4.50
33.81
110.79
15.94
374.76
501.49
94.74
344.05
438.79
60.76
208.70
269.46
1,664.25
1,570.87
1,392.61
0.86
0.86
0.86
27.99
27.99
27.99
59.81
59.81
59.81
254.98
254.98
254.98
745.70
745.70
745.70
1,089.34
1,089.34
1,089.34
-
1.35
-
Non-current Investments
Investment in equity instruments (fully paid-up)
Quoted at cost
In Subsidiary company
Marico Bangladesh Limited
28,350,000 (31st March, 2016 : 28,350,000, 1st April, 2015 : 28,350,000) equity shares of
Bangladesh taka 10 each fully paid
(Quoted on Dhaka Stock exchange and Chittagong Stock exchange).
Unquoted at cost
In Subsidiary companies
Marico Middle East FZE (wholly owned)
22 (31st March, 2016 : 22, 1st April, 2015 : 22) equity share of UAE dirham 1,000,000 fully paid
Marico South Africa Consumer Care (Pty) Limited (wholly owned)
1,247 (31st March, 2016 : 1,247, 1st April, 2015 : 1,247) equity shares of SA Rand 1.00 fully
paid
Marico South East Asia Corporation (formerly known as International Consumer Products
Corporation) (Wholly owned with effect from 10th December, 2014) (Refer note (i) below)
9,535,495 (31st March, 2016 : 9,535,495, 1st April, 2015 : 9,535,495) equity shares of VND
10,000 fully paid
Marico Consumer Care Limited (wholly owned)
20,660,830 (31st March, 2016 : 20,660,830, 1st April, 2015 : 20,660,830) equity shares of Rs.
10 each fully paid
Total investment in subsidiaries
Unquoted at cost
In Joint Venture
Bellezimo Professionale Products Private Limited (Joint Venture with effect from
21st October, 2015) (refer note (ii) below)
1,350,000 (31st March, 2016 : 1,350,000, 1st April, 2015 : Nil) equity shares of Rs. 10 each
fully paid
NOTES
To Financial Statements for the year ended 31st March, 2017
255
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
16.30
1.35
-
-
1.47
4.52
0.14
-
-
0.14
1.47
4.52
2.96
2.96
2.96
Indian Railway Finance Corporation
21,751 (31st March, 2016 : 21,751, 1st April, 2015 : 21,751) Secured, Redeemable, Tax free
Non-convertible Bonds, 8.00%, face value of Rs. 1,000/- each, redeemable on 23rd February,
2022)
2.26
2.26
2.26
National Highways Authority of India
24,724 (31st March, 2016 : 24,724, 1st April, 2015 : 24,724) Secured, Redeemable, Tax free
Non-convertible Bonds, 8.20%, face value of Rs. 1,000/- each, redeemable on 25th January,
2022)
2.57
2.57
2.57
Rural Electrification Corporation Limited
61,238 (31st March, 2016 : 61,238, 1st April, 2015 : 61,238) Secured, Redeemable, Tax free
Non-convertible Bonds, 8.12%, face value of Rs. 1,000/- each, redeemable on 29th March,
2027)
6.50
6.50
6.50
Rural Electrification Corporation Limited
50 (31st March, 2016 : 50, 1st April, 2015 : 50) Secured, Redeemable, Tax free Non-convertible Bonds, 8.46%, face value of Rs. 1,000,000/- each, redeemable on 29th August, 2028)
5.25
5.25
5.25
Housing & Urban Development Corporation Ltd
50 (31st March, 2016 : 50, 1st April, 2015 : 50) Secured, Redeemable, Tax free Non-convertible Bonds, 8.56%, face value of Rs. 1,000,000/- each, redeemable on 2nd September, 2028)
5.24
5.24
5.24
24.78
24.78
24.78
Investment in government securities at amortised cost
Unquoted
National Savings Certificates (Deposited with the government authorities)
0.01
0.01
0.01
Total investment in government securities
0.01
0.01
0.01
11.13
10.24
-
Particulars
Zed Lifestyle Private Limited (refer note (iii) below)
3,784 (31st March, 2016 : Nil, 1st April, 2015 : Nil) equity shares of Rs. 10 each fully paid
Total investment in Joint Venture
Quoted at FVPL
In others
Nil (31st March, 2016 : 17,102, 1st April, 2015 : 29,648) equity shares of Kaya Limited
Unquoted at FVPL
136,500 (31st March, 2016 : Nil, 1st April, 2015 : Nil) equity shares of Clover Energy Private
Limited
Total investment in others
Investment in bonds at amortised cost
Quoted
Power Finance Corporation Limited
28,479 (31st March, 2016 : 28,479, 1st April, 2015 : 28,479) Secured, Redeemable, Tax free
Non-convertible Bonds, 8.20%, face value of Rs. 1,000/- each, redeemable on 1st February,
2022)
Total investment in Bonds
Investment in mutual funds at FVPL
Quoted
Reliance Fixed Horizon Fund-XXIX-Series 16-Growth Plan
10,000,000 (31st March, 2016 : 10,000,000, 1st April, 2015 : Nil) units of Rs. 10 each fully paid
16.30
-
-
Financial Statements
NOTES
256
To Financial Statements for the year ended 31st March, 2017
Particulars
DHFL Pramerica Fixed Maturity Plan Series 62 - Regular Plan - Growth
41,25,148 (31st March, 2016 : 41,25,148, 1st April, 2015 : 41,25,148) units of Rs. 10 each
fully paid
Total investment in mutual funds
Aggregate amount of quoted investments
Market value/ Net asset value of quoted investments
Aggregate amount of unquoted investments
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
16.42
15.13
2,361.48
3,173.59
5.29
42.06
1,120.70
4.89
42.24
1,089.84
As at
1st April, 2015
4.50
4.50
34.66
3,342.14
1,088.49
Notes:
(i) During the previous year ended 31st March, 2015, International Consumer Product Corporation, a subsidiary of the Company in Vietnam had bought
back its shares resulting into increase in the percentage of Company’s shareholding to 100%.
(ii) During the year ended 31st March, 2016, the Company had acquired 45% stake in Bellezimo Professionale Products Private Limited, a joint venture.
During the year ended 31st March, 2017, the Company has impaired its investment in Bellezimo Professionale Products Private Limited.
(iii) During the year ended 31st March, 2017, the Company has acquired 35.43% stake in Zed Lifestyle Private Limited, a joint venture, on 17th March, 2017.
Current investments
Investment in debentures at amortised cost
Quoted
Kotak Mahindra Prime Limited
150 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Unsecured, Non convertible debentures face
value of Rs.1,000,000 each
15.94
-
-
Total investment in bonds
15.94
-
-
-
-
8.79
-
15.17
-
-
-
7.76
-
-
4.26
Birla Sun life Floating Rate Long Term -Growth-Regular
1,022,046 (31st March, 2016 : 275,258, 1st April, 2015 : 304,582) Units of Rs. 100 each fully
paid
20.32
5.01
5.10
Birla Sun Life Savings Fund - Growth-Regular Plan
1,043,788 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 100 each fully paid
33.26
-
-
DHFL Pramerica Low Duration Fund - Growth
Nil (31st March, 2016 : 10,371,654, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
-
21.18
-
DWS Treasury Fund -Cash-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,001,013) Units of Rs. 100 each fully paid
-
-
15.02
HDFC Liquid Fund - Growth
Nil (31st March, 2016 : 16,801, 1st April, 2015 : 3,990,799) Units of Rs. 1000 each fully paid
-
5.01
11.01
HDFC Cash Management Fund-Savings Plan-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,897,404) Units of Rs. 10 each fully paid
-
-
5.54
28.21
25.53
-
Investment in mutual funds at FVPL
Quoted
LIC Nomura MF Fixed Maturity Plan Series 77-396 Days-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 80,00,000) units of Rs. 10 each fully paid
ICICI Prudential FMP Series 78-95 Days-Plan K-Cumulative
Nil (31st March, 2016 : 15,000,000, 1st April, 2015 : Nil) units of Rs. 10 each fully paid
Unquoted
Axis Treasury Advantage Fund - Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 50,053) Units of Rs. 1,000 each fully paid
Birla Sun life Cash Plus -Growth-Regular
Nil (31st March, 2016 : Nil, 1st April, 2015 : 190,148) Units of Rs. 100 each fully paid
HDFC Corporate Debt Opportunities Fund - Regular - Growth
20,803,342 (31st March, 2016 : 20,803,342, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
NOTES
To Financial Statements for the year ended 31st March, 2017
257
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
HDFC Banking and PSU Debt Fund-Reg-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 :1,813,187) Units of Rs. 10 each fully paid
-
-
2.00
HDFC Short Term Plan - Regular Plan - Growth
8,277,730 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
26.83
-
-
ICICI Prudential money market fund-regular plan growth
601,824 (31st March, 2016 : Nil, 1st April, 2015 : 1,036,048) units of Rs. 100 each fully paid
13.50
-
20.02
ICICI Prudential Ultra Short Term - Growth
7,140,093 (31st March, 2016 : 9,948,137, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
24.36
15.23
-
IDFC Ultra Short Term Fund -Growth-Regular Plan
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,301,391) Units of Rs. 10 each fully paid
-
-
2.54
IDFC Money Manager Fund-Treasury Plan-Growth
Nil (31st March, 2016 : 8,045,461, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
-
19.04
-
Kotak Liquid Scheme Plan A-Growth
Nil (31st March, 2016 : 18,754, 1st April, 2015 : 70,607) Units of Rs. 1,000 each fully paid
-
5.76
20.03
38.02
25.25
-
-
10.68
-
1.42
-
-
L&T Ultra Short Term Fund-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 1,011,382) units of Rs. 10 each fully paid
-
-
2.29
Principal Debt Opportunities Fund Corporate Bond Plan-Regular Plan Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 47,877) Units of Rs. 1,000 each fully paid
-
-
10.29
20.01
-
20.03
Reliance Medium Term Fund-Growth
2,120,390 (31st March, 2016 : 7,986,353, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
7.24
25.06
-
Reliance Short Term Fund-Growth
5,355,039 (31st March, 2016 : 5,355,039, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
16.50
15.14
-
Religare Invesco Short Term Fund-Growth
53,098 (31st March, 2016 : Nil, 1st April, 2015 : 56,982) Units of Rs. 1,000 each fully paid
11.47
-
10.97
Religare Invesco Credit Opportunities Fund-Growth
236,227 (31st March, 2016 : 149,408, 1st April, 2015 : 60,034) Units of Rs. 1,000 each fully
paid
43.85
25.84
9.56
Religare Invesco Medium Term Bond Fund-Growth
Nil (31st March, 2016 : 70,172, 1st April, 2015 : Nil) Units of Rs. 1,000 each fully paid
-
10.70
-
SBI Magnum Insta Cash -Regular Plan-Growth
Nil (31st March, 2016 : 58,764, 1st April, 2015 : 64,792) Units of Rs. 1,000 each fully paid
-
15.09
20.02
SBI Treasury Advantage Fund-Regular Plan-Growth
Nil (31st March, 2016 : 181,028, 1st April, 2015 : Nil) Units of Rs. 1,000 each fully paid
-
30.37
-
Particulars
Kotak Bond ( Short Term) - Growth
12,368,951 (31st March, 2016 : 8,959,674, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
LIC Nomura Liquid Fund-Growth
Nil (31st March, 2016 : 38,956, 1st April, 2015 : Nil) Units of Rs. 1000 each fully paid
LIC MF Savings Plus Fund - Regular Growth Plan-Short term growth
571,671 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
Reliance Liquid Fund-Treasury Plan-Growth
50,597 (31st March, 2016 : Nil, 1st April, 2015 : 58,818) Units of Rs. 1,000 each fully paid
Financial Statements
NOTES
258
To Financial Statements for the year ended 31st March, 2017
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
-
-
3.51
37.38
32.60
-
JM Money Manager Fund-Super Plus Plan-Bonus Option-Bonus Units
3,748,072 (31st March, 2016 : 3,748,072, 1st April, 2015 : 3,748,072) units of Rs. 10 each
fully paid
5.24
4.85
4.47
JM Money Manager Fund-Super Plan-Bonus Option-Bonus Units
4,524,192 (31st March, 2016 : 4,524,192, 1st April, 2015 : 4,524,192) units of Rs. 10 each
fully paid
5.83
5.44
5.03
-
-
20.46
Tata Short Term Bond Fund Regular Plan - Growth
999,164, (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 1,000 each fully paid
3.05
-
-
Uti-Short Term Income Fund- Institutional Option - Growth
2,273,863 (31st March, 2016 : Nil, 1st April, 2015 : Nil) Units of Rs. 10 each fully paid
4.53
-
-
33.74
31.10
-
374.76
344.05
208.70
15.94
15.17
8.79
485.55
423.62
260.67
Particulars
Templeton India TMA-SIP-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 16,797) Units of Rs. 1,000 each fully paid
Baroda Pioneer Treasury Advantage Fund- Plan A-Growth
197,177 (31st March, 2016 : 187,598, 1st April, 2015 : Nil) units of Rs. 1,000 each fully paid
JP Morgan India Treasury Fund-SIP-Growth
Nil (31st March, 2016 : Nil, 1st April, 2015 : 11,140,952) units of Rs. 10 each fully paid
UTI Floating Rate Fund-STP-Growth
127,081 (31st March, 2016 : 127,081, 1st April, 2015 : Nil) units of Rs. 1,000 each fully paid
Total investment in mutual funds
Aggregate amount of quoted investments and market value thereof
Aggregate amount of unquoted investments
6(b) Trade Receivables
Particulars
Trade receivables
Receivables from related parties (refer note 30)
Less: Allowance for doubtful debts
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
57.20
30.32
18.34
173.33
(2.92)
164.75
(2.97)
115.10
(2.89)
Total receivables
227.61
192.10
130.55
Current Portion
227.61
192.10
130.55
Non-Current Portion
Break up of security details
Secured, considered good
-
-
-
-
-
-
Unsecured, considered good
227.61
192.10
130.55
Total
230.53
195.07
133.44
Total trade receivables
227.61
192.10
130.55
Unsecured, considered doubtful
Allowance for doubtful debts
Note:
For credit risk and provision for loss allowance refer note 27(A)
2.92
(2.92)
2.97
(2.97)
2.89
(2.89)
NOTES
To Financial Statements for the year ended 31st March, 2017
259
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Loans to employees
3.73
3.75
3.49
Total non current loans
3.73
3.75
5.04
Loan to related parties (refer note below)
1.61
1.39
4.03
Total current loans
4.36
4.03
6.25
Non current
Unsecured, considered good
Loans to subsidiaries (refer note below)
-
-
1.55
Current
Unsecured, considered good
Loan to employees
2.75
2.64
Note: The above loan was given to a subsidiary/joint venture for various operational requirement and acquisition of brands and
carries interest rate of Prime Lending Rate published by South African Reserve Bank for a subsidiary and 12% per annum for
a joint venture. The said loan is repayable within a period of one year from 31st March, 2017 and 31st March, 2016 (As on 1st
April, 2015 it is repayable within two years) and has been disclosed as short term loans and advances as on 31st March, 2017
and 31st March, 2016.
6(d) Cash and Cash Equivalents
Particulars
Bank balances in current accounts
Deposits with maturity of less than three months
Cheques on hand
Cash on hand
Total cash and cash equivalents
As at
31st March, 2017
As at
31st March, 2016
3.76
3.40
1.23
-
12.01
Particulars
Fixed deposits with maturity more than 3 month but less than 12 months
Balances with banks for unclaimed dividend
Total bank balance other than cash and cash equivalents
As at
1st April, 2015
14.27
6.75
0.76
5.06
15.58
21.96
As at
31st March, 2017
As at
31st March, 2016
0.33
0.44
0.07
0.17
63.14
63.47
124.15
124.59
0.18
(r in Crore)
As at
1st April, 2015
78.40
0.27
78.67
The details of specified bank notes (SBN) held and transacted during the period 8th November, 2016 to 30th December, 2016
as provided in the table below:
During the year, the company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R.
308 (E ) dated 31st March, 2017 on the details of the specified bank notes (SBN) held and transacted during the period from 8th
November, 2016 to 30th December, 2016. The denomination wise SBNs and other notes as per the notification are given below:
Details
Closing cash in hand as on 8th November, 2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
(r in Crore)
-
6(e) Bank balances other than cash and cash equivalents
2.22
Closing cash in hand as on 30th December, 2016
SBNs*
0.14
-
0.14
0.00
Other denomination notes
(r in Crore)
Total
0.06
0.20
0.14
0.14
0.15
0.00
0.07
0.15
0.14
0.07
* For the purpose of this clause, the term ‘Specified Bank notes’ shall have the same meaning provided in the notification of the
Government of India, in the ministry of finance, department of Economic Affairs number S.O. 3407 (E ), dated 8th November, 2016.
Financial Statements
6(c)Loans
NOTES
260
To Financial Statements for the year ended 31st March, 2017
6(f) Other Non current financial assets
Particulars
Unsecured considered good (unless otherwise stated)
Advances to Subsidiaries ( Refer Note 30)
Considered good
Considered doubtful
Less: Provision for doubtful advances
Security deposits with public bodies and others
Considered good
Considered doubtful
Less: Provision for doubtful deposits
Fixed Deposits-Maturing after 12 months (refer note below)
Total other non-current financial assets
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
13.27
15.78
19.51
13.27
16.60
19.51
13.27
15.78
19.51
13.40
11.01
11.40
14.41
12.01
11.40
13.40
11.01
11.40
-
-
1.01
(1.01)
0.44
27.11
0.82
(0.82)
1.00
(1.00)
0.98
27.77
-
-
1.53
32.44
Note : Fixed deposits with banks include Rs. 0.12 Crore (31st March, 2016 : Rs. 0.21 Crore, 1st April, 2015 : Rs. 0.21 Crore)
deposited with sales tax authorities, Rs. 0.06 Crore (31st March, 2016 : Rs. 0.36 Crore, 1st April, 2015 : Rs. 0.39 Crore) held
as lien by banks against guarantees issued on behalf of the Company and Rs.0.12 Crore (31st March, 2016 : Rs. Nil, 1st April,
2015: Rs. 0.57 Crore) for other earmarked balances.
6(f) Other current financial assets
Particulars
(i) Derivatives
Foreign exchange forward contracts, options and interest rate swaps
(ii) Others
Advances to Subsidiaries ( Refer Note 30)
Security deposits
Insurance claim receivable
Total other current financial assets
As at
31st March, 2017
2.11
As at
31st March, 2016
4.15
(r in Crore)
As at
1st April, 2015
0.58
2.11
4.15
0.58
22.71
18.75
10.57
-
1.95
0.63
0.54
0.39
0.05
23.34
21.24
11.01
25.45
25.39
11.59
NOTES
To Financial Statements for the year ended 31st March, 2017
Deferred Tax Asset/ (Liabilities)
The balance comprises temporary differences attributable to :
Particulars
Deferred tax Asset :
As at
31st March, 2017
As at
31st March, 2016
22.15
18.78
Liabilities / provisions that are deducted for tax purposes when paid
On Intangible assets adjusted against Capital Redemption Reserve and Securities premium account under the Capital Restructuring scheme (refer note (i) below)
7.06
MAT Credit entitlement
7.75
On hedge reserve
1.78
Other timing differences
Additional depreciation/amortisation on property plant and equipment, and investment
property for tax purposes due to higher tax depreciation rates.
Financial assets at fair value through Profit and loss
Other timing differences
Net deferred tax assets/ (liabilities)
8.80
25.94
1.00
1.53
2.67
12.01
97.28
176.52
40.17
40.13
42.86
7.96
2.45
1.00
(48.91)
(42.70)
(44.11)
0.78
Total deferred tax liabilities
146.91
2.20
39.16
Deferred tax liability :
119.02
85.27
1.68
0.42
Total deferred tax assets
15.43
12.46
57.08
-
Provision for doubtful debts/ loans/ advances that are deducted for tax purposes when
written off
As at
1st April, 2015
9.41
36.96
Other items:
(r in Crore)
29.61
0.12
(9.75)
0.25
54.58
132.41
Movement in deferred tax assets
Particulars
Defined
benefit
obligations
As at 1st April, 2015
-
(Charged)/credited :
-
(r in Crore)
Liabilities / provisions that are
deducted for tax
purposes when paid
*On Intangible
assets
MAT Credit
entitlement
Other items
Total
deferred tax
assets
15.43
12.46
119.02
29.61
176.52
to Profit and Loss
-
3.35
(3.05)
(56.53)
(0.13)
(56.36)
to other comprehensive income
-
-
-
-
(17.13)
(17.13)
Deferred tax on basis adjustment
-
-
-
(5.41)
(0.34)
(5.75)
As at 31st March, 2016
-
18.78
9.41
57.08
12.01
97.28
(Charged)/credited :
to Profit and loss
to other comprehensive income
As at 31st March, 2017
0.03
3.37
(2.35)
(49.33)
(1.01)
(49.29)
(0.03)
-
-
-
(8.80)
(8.83)
-
22.15
7.06
7.75
2.20
39.16
*On Intangible assets adjusted against Capital Redemption Reserve and Securities premium account under the Capital
Restructuring scheme.
Financial Statements
7
261
NOTES
262
To Financial Statements for the year ended 31st March, 2017
Movement in deferred tax liabilities
Particulars
(r in Crore)
Property plant and
equipment and
Investment property
Change in fair
value of hedging
instruments
Other items
Total deferred
tax liabilities
42.86
1.00
0.25
44.11
to Profit and loss
(2.73)
1.45
(0.13)
(1.41)
As at 31st March, 2016
40.13
2.45
0.12
42.70
0.04
5.51
0.66
6.21
-
-
-
-
40.17
7.96
0.78
48.91
As at 1st April, 2015
Charged/(credited) :
to other comprehensive income
-
-
-
-
(Charged)/credited :
to Profit and loss
to other comprehensive income
As at 31st March, 2017
During the year ended 31st March, 2007 the Company carried out financial restructuring scheme (‘Scheme’) under the relevant
provisions of the Companies Act, 1956 which was approved by the shareholders on 8th February, 2007 and subsequently by
the Hon’ble High Court vide its order dated 23rd March, 2007. In terms of the Scheme, the Company adjusted the carrying
value of Rs. 448.15 Crore of intangible assets such as trademarks, copyrights, business and commercial rights as on 31st
January, 2007 and related deferred tax adjustment of Rs. 139.06 Crore (net adjustment of Rs. 309.09 Crore) against the
balance in Securities Premium Reserve of Rs. 129.09 Crore and Capital Redemption Reserve of Rs. 180 Crore.
8
Other Non Current Assets
Particulars
Capital Advances
Fringe benefit tax payments
Deposits with statutory/government authorities
Prepaid expenses
As at
31st March, 2017
4.57
As at
31st March, 2016
14.70
12.06
0.48
0.48
0.48
10.88
10.50
10.74
0.85
0.71
1.18
26.39
24.46
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
- In Stock
499.47
214.72
247.39
- In Transit
24.33
49.37
-
9Inventories
Particulars
Raw Materials
(r in Crore)
Packing materials
65.24
56.97
61.44
Work-in-progress
142.37
120.03
107.20
Finished goods
327.06
300.53
346.30
Traded goods
As at
1st April, 2015
16.78
Total other non-current assets
(r in Crore)
13.27
14.68
16.40
By-Product
3.14
3.16
5.56
Stores and Spares
8.08
8.10
7.30
1,082.96
767.56
791.59
Total inventories
Refer note 2(o) for basis of valuation
Amounts recognised in profit or loss
Write-downs/ (reversals) of inventories during the year to net realisable value amounted to Rs. (7.32) Crore (31st March,
2016 Rs. 8.33 Crore). These were recognised during the year and included under “change in value of inventories’ of work-inprogress, stock-in-trade and finished goods in Statement of Profit and Loss.
NOTES
To Financial Statements for the year ended 31st March, 2017
Other Current Assets
Particulars
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Prepaid Expenses
11.97
10.51
8.65
Deposits with government authorities and others (refer note below)
26.01
8.48
6.53
0.21
0.18
0.21
71.69
91.22
74.50
Advances to vendors
Others
Total other current assets
33.50
72.05
59.11
Deposits with government authorities and others includes government grants of Rs. 6.75 Crore as on 31st March, 2017.
11
Assets Classified as Held for Sale
Particulars
Land and Building (refer note 4(v))
Total assets classified as held for sale
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
12.45
12.45
28.71
12.45
12.45
28.71
Non-recurring fair value measurements
The company decided to sell land and building which was classified as asset held for sale as on 31st March, 2015. The assets
situated at Goa were sold during the year ended 31st March, 2016, and the gain of Rs. 9.23 Crore was included in net gain on
disposal of Property, Plant and Equipment in Note 19. The other asset was reclassified to investment property during the year
ended 31st March, 2016. The delay in respect of the remaining asset (building) which the company has committed to sell is
caused by certain event and circumstances which are beyond the entity’s control.
Fair value of Building classified as held for sale was Rs. 40.69 Crore as at 31st March, 2017, Rs. 39.12 Crore as at 31st March,
2016 and Rs. 47.45 Crore as on 1st April, 2015. Building classified as held for sale during the reporting period was measured
at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. The fair values of these
assets have been determined by independent valuer who holds recognised and relevant professional qualification. The
main inputs include details obtained from “The Ready Reckoner”, location factor and physical verification of the property. All
resulting fair value estimates for asset held for sale are included in level 3.
12(a)Equity Share Capital
Particulars
(r in Crore)
No. of shares
(in Crore)
Amount
Equity shares of Re. 1/- each
115.00
115.00
Total
125.00
215.00
Equity shares of Re. 1/- each
150.00
150.00
Total
156.50
215.00
Equity shares of Re. 1/- each
150.00
150.00
Total
156.50
215.00
Authorised share capital
As at 1st April, 2015
Preference shares of Rs. 10/- each
As at 31st March, 2016
Preference shares of Rs. 10/- each
As at 31st March, 2017
Preference shares of Rs. 10/- each
Issued, subscribed and paid-up as at 31st March, 2017
1,290,471,198 equity shares of Re. 1/- each fully paid-up (refer note (v) below)
Total
10.00
6.50
6.50
129.05
129.05
100.00
65.00
65.00
129.05
129.05
Financial Statements
10
263
NOTES
264
To Financial Statements for the year ended 31st March, 2017
(i)
Movements in equity share capital
Particulars
No of shares
(in Crore)
As at 1st April, 2015
64.50
Shares issued during the year - ESOP (refer note 33(a))
64.51
129.02
Increase during the year
Shares issued during the year - ESOP (refer note 33(a))
129.02
0.03
As at 31st March, 2017
0.03
129.05
(ii)
(iii) Shares reserved for issue under options
(iv) Details of shareholders holding more than 5% shares in the company
129.05
Rights, preferences and restrictions attached to equity shares
Equity Shares: The Company has one class of equity shares having a par value of Re.1 per share. Each shareholder
is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation,
the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential
amounts, in proportion to their shareholding.
Information relating to Marico ESOS 2007, Marico ESOS 2014, MD CEO ESOP Plan 2014 and including details of options
issued, exercised and lapsed during the financial year and options outstanding at the end of the reporting period, is set
out in note 33.
Name of Shareholder
Equity Shares of Re. 1/- each fully paid-up
As at 31st March, 2017
No. of Shares held
As at 31st March, 2016
% of Holding
No. of Shares held
% of Holding
Harsh C Mariwala with Kishore V Mariwala (For Valentine Family Trust)
148,337,200
11.49
146,752,000
11.37
Harsh C Mariwala with Kishore V Mariwala (For Taurus Family Trust)
148,338,000
11.49
146,752,000
11.37
Harsh C Mariwala with Kishore V Mariwala (For Aquarius Family Trust)
Harsh C Mariwala with Kishore V Mariwala (For Gemini Family Trust)
First State Investments Services (UK) Ltd (along with Persons acting
in concert)
0.01
64.51
As at 31st March, 2016
64.50
0.01
Bonus Issue (refer note (v) below)
Equity Share capital
(par value)
148,338,200
148,338,100
97,225,880
11.49
11.49
7.53
146,752,000
146,752,000
108,091,457
11.37
11.37
8.38
(v) During the year ended 31st March, 2016, the Company has issued 645,085,599 fully paid-up bonus equity shares of
face value Re. 1 each in the ratio of 1:1 with record date of 24th December, 2015. As a result EPS has been adjusted for
reporting as well as for all the comparative periods. Aggregate number of shares allotted as fully paid-up by way of bonus shares
For the year ended
31st March, 2016
Equity shares allotted as fully paid-up bonus shares by capitalization of general reserve
645,085,599
12(b)Reserves and Surplus
Particulars
Securities premium reserve
Retained earnings
General reserve
Share based option outstanding account
Treasury Shares
WEOMA reserve
Total Reserves and surplus
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
2,266.21
1,933.31
1,744.78
7.62
6.42
237.80
297.97
234.98
297.97
234.49
362.48
2.96
(60.69)
(68.37)
(28.29)
2,793.73
2,424.49
2,319.08
44.82
20.18
2.66
NOTES
To Financial Statements for the year ended 31st March, 2017
(i)
Securities premium reserve
Particulars
Opening Balance
Add: Receipt on exercise of employee stock options
Less : Amount adjusted towards bonus share issue expenses
Closing balance
Particulars
Less: Transferred to share capital on account of issue of bonus shares
Closing balance
Particulars
Appropriations during the year
As at
31st March, 2016
234.49
0.58
-
(0.09)
237.80
234.98
As at
31st March, 2017
297.97
(r in Crore)
As at
31st March, 2016
362.48
-
(64.51)
297.97
297.97
As at
31st March, 2017
6.42
(r in Crore)
As at
31st March, 2016
2.96
(2.82)
-
Add : Compensation for options granted
4.02
3.46
Closing balance
7.62
6.42
(iv) Treasury Shares (refer note 35)
Particulars
Opening Balance
Add :( Purchase)/sale of treasury shares by the trust during the year (net)
Closing balance
(r in Crore)
2.82
(iii) Share based option outstanding account (refer note 33)
Opening Balance
234.98
(ii) General Reserve
Opening Balance
As at
31st March, 2017
As at
31st March, 2017
(68.37)
As at
31st March, 2016
(28.29)
7.68
(40.08)
(60.69)
(68.37)
(v) WEOMA reserve (refer Note 35)
Particulars
(r in Crore)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
Add : Income of the Trust for the year
24.64
17.52
Closing balance
44.82
20.18
Opening Balance
20.18
2.66
Financial Statements
265
NOTES
266
To Financial Statements for the year ended 31st March, 2017
(vi) Retained earnings
Particulars
Opening Balance
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
842.70
691.26
1,933.31
Net Profit for the year
1,744.78
Items of other comprehensive income recognised directly in retained earnings
Remeasurements of post-employment benefit obligation, net of tax
Less: Dividend
Less: Tax on dividend (net of tax on dividend received from Indian and foreign subsidiaries of Rs. 34.89
Crore) (Previous year Rs. 23.22 Crore)
Closing balance
(1.18)
(1.87)
(451.59)
(435.43)
(57.03)
(65.43)
2,266.21
1,933.31
12(c)Other reserves
Hedge reserve
(r in Crore)
Particulars
As at
31st March, 2017
As at
31st March, 2016
Deferred Hedging Gain / (Loss) on hedging instruments
(9.67)
(16.43)
Gain / (Loss) transferred to Income Statement
35.20
67.02
Deferred tax on hedge reserve
(8.83)
(17.13)
1.46
(15.24)
As per last Balance Sheet
(15.24)
Closing Balance Hedge Reserve
(48.70)
Nature and purpose of reserves
Securities premium account is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of the Act.
Securities premium account
General Reserve
The General Reserve account is used from time to time to record transfer of profit from retained earnings, for appropriation
purposes. As General Reserve is created by transfer from one component of equity to another and it is not an item of other
comprehensive income, item included in the General Reserve will not be reclassified subsequently to Profit or Loss.
Share based option outstanding account
The share based option outstanding account is used to recognise the grant date fair value of options as on the grant date,
issued to employees under Company’s employee stock option schemes.
WEOMA reserve and Treasury shares
Profit on sale of treasury shares by WEOMA trust is recognised in WEOMA reserve. (refer note 35)
Hedge Reserve
The Company uses forward and options contracts to hedge its risks associated with foreign currency transactions relating
to certain firm commitments and forecasted transactions. The Company also uses Interest rates swap contracts to hedge its
interest rate risk exposure. The Company designates these as cash flow hedges. These contracts are marked to market as at
the year end and resultant exchange differences, to the extent they represent effective portion of the hedge, are recognized
directly in hedge reserve. The ineffective portion of the same is recognized immediately in the Statement of Profit and Loss.
Exchange differences taken to hedge reserve account are recognized in the Statement of Profit and Loss upon crystallization
of firm commitments or occurrence of forecasted transactions or upon discontinuation of hedge accounting resulting from
expiry / sale / termination of hedge instrument or upon hedge becoming ineffective.
NOTES
To Financial Statements for the year ended 31st March, 2017
267
Particulars
Maturity Date
Terms of repayment
Coupon /Interest rate
USD 6 million due on
11th August, 2015
USD 9 million due on
11th February, 2016
USD 12 million due on
11th August, 2016
USD 15 million due on
11th February, 2017
The loan is repayable
over a period of 6 years
commencing from
11th February, 2011 on
semi-annual instalments
3 months LIBOR + 2.1%
Secured
(r in Crore)
As at
31st March,
2017
As at
31st March,
2016
-
179.28
262.78
-
179.28
262.78
As at
1st April,
2015
Term Loan
From banks
External commercial borrowing
from The Hongkong and
Shanghai Banking Corporation
Limited (refer note (ii) below)
Total non-current borrowings
Less: Current Maturities of long-term debt (refer note 13(b))
Less: Interest accrued (refer note 13(b))
Non-current borrowings
-
178.53
0.75
-
13(a)Current Borrowings
Particulars
Maturity Date
Terms of repayment
Coupon /Interest rate
Payable on demand
Payable on demand
9.5% to 12.25% per annum
Pre-shipment credit in Foreign
Currency
(refer note (i) below)
Repayable on 9th June,
2017 Rs. 21.25 Crore and
Repayable on 21st July,
2017 Rs. 27.10 Crore (FY
16 - Nil)
For a term of twelve
months
Working Capital Demand Loan
(refer note (i) below)
Repayable on
18th October, 2017 - Rs.
10 Crore
19th October, 2017 - Rs.
10 Crore
15th December, 2017 Rs. 20 Crore
93.36
1.02
168.40
(r in Crore)
As at
31st March,
2017
As at
31st March,
2016
-
10.83
8.64
1.00% to 1.4% per annum
(FY 16 - Nil)
48.35
-
-
For a term of twelve
months
Bank Base rate/relevant
Benchmark Rate plus
applicable spread ranging
between 0.1% to 0.2% per
annum (FY 16 - Nil)
40.21
-
-
For a term of two
months to six
months (FY 16 - For
a term of two to four
months)
Bank Base rate/relevant
Benchmark rate plus
applicable spread ranging
between 6.7% to 9.5% per
annum less Interest Subvention of 3% per annum
(FY 16 - Bank Base rate plus
applicable/relevant Benchmark rate spread ranging
between 8.9% to 9.5% per
annum less Interest Subvention of 3% per annum)
20.00
15.00
-
108.56
25.83
8.64
108.35
25.83
8.64
Loans repayable on demand
As at
1st April,
2015
Secured
From banks
Cash credit
(refer note (i) below)
Export Packing credit
(refer note (i) below)
Repayable on 31st May,
2017 Rs. 10 Crore and
25th September, 2017
Rs. 10 Crore (FY 16 Repayable on 27th May,
2016 and 20th June,
2016 for Rs. 10 Crore and
5 Crore respectively)
Total current borrowings
Less: Interest accrued (refer note 13(b))
Current borrowings as per balance sheet
0.21
-
-
Financial Statements
13(a)Non-Current Borrowings
NOTES
268
To Financial Statements for the year ended 31st March, 2017
Note:-
(i)
(ii)
Cash Credit, Pre-shipment Credit in Foreign Currency, Working Capital Demand Loan and Export Packing Credit is secured
by hypothecation of Inventory and Debtors, value of Rs. 1,310.57 Crore as at 31st March, 2017,Rs. 959.66 Crore as at 31st
March, 2016 and Rs. 922.14 Crore as at 1st April, 2015.
ECB Loan was secured by (i) Pledge of shares of Marico South East Asia Corporation (a Subsidiary company, formerly known
as International Consumer Products Corporation), carrying value of Rs. 254.98 Crore as at 1st April, 2015, 31st March, 2016
and 2017 (ii) First ranking pari passu charge over all current and future plant and machinery, carrying value of Rs. 188.57
Crore as at 1st April, 2015, Rs. 175.37 Crore as at 31st March, 2016 and the said loan has been repaid during the year and (iii)
Mortgage on land and building situated at Andheri, Mumbai (Mortgage was only till previous year ended 31st March, 2015),
carrying value of Rs. 44.08 Crore as at 1st April, 2015.
13(b)Other Financial Liabilities
Particulars
Current
Current maturities of long-term debt (refer note 13(a))
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
-
178.53
93.36
Interest accrued but not due on borrowings (refer note 13(a))
0.21
0.75
1.02
Capital Creditors
4.00
3.14
4.28
Salaries and benefits payable
1.25
0.28
0.24
Bonus Payable
0.57
2.94
1.86
Security Deposits from customers and other
1.25
0.43
0.21
Unclaimed Dividend (refer note below)
0.33
0.44
0.27
Foreign-exchange forward contracts
3.14
1.42
0.36
-
0.39
1.17
Foreign-exchange Interest Rate Swaps used as designated Interest rate hedges contracts
Other liabilities
Total other current financial liabilities
(r in Crore)
0.26
0.24
0.24
11.01
188.56
103.01
Note : Amount payable to Investor Education and Protection Fund Rs. Nil as on 1st April, 2015, 31st March, 2016 and 31st
March, 2017.
13(c)Trade Payables
Particulars
Current
Trade payables (refer note below)
Trade payables to related parties (refer note 30)
Total trade payables
Note:
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
473.97
479.83
402.26
2.27
4.95
3.29
476.24
484.78
405.55
The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006
(‘MSMED Act’). The disclosures pursuant to the said MSMED Act are as follows:
NOTES
To Financial Statements for the year ended 31st March, 2017
Principal amount due to suppliers registered under the MSMED Act and remaining
unpaid as at year end.
Interest due to suppliers registered under the MSMED Act and remaining unpaid as at
year end.
Principal amounts paid to suppliers registered under the MSMED Act, beyond the
appointed day during the year.
Interest paid other than under Section 16 of MSMED Act to suppliers registered under
the MSMED Act, beyond the appointed day during the year.
Interest paid under Section 16 of MSMED Act to suppliers registered under the MSMED
Act beyond the appointed day during the year.
Interest due and payable towards suppliers registered under MSMED Act for payments
already made.
Further interest remaining due and payable for earlier years.
Total
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
10.80
16.01
7.31
0.03
0.06
0.01
-
-
-
-
-
-
-
-
-
-
-
-
0.07
0.01
0.01
10.90
16.08
As at
31st March, 2017
As at
31st March, 2016
14Provisions
Particulars
Current
7.33
(r in Crore)
As at
1st April, 2015
Disputed indirect taxes (refer note (a) & (b) below)
56.41
50.64
42.25
Total current provisions
56.41
50.64
42.25
(a) Provision for disputed indirect taxes mainly pertains to Entry tax dispute in the state of Himachal Pradesh and West Bengal
where company has filed a writ petition in both the states before the honourable high court and the matter is sub judice.
It is not practicable to state the timing of the judgement and final outcome. Management has assessed that unfavourable
outcome of the matter is more than probable and therefore has created provisions for necessary amounts.
(b) Movement in provisions
Disputed indirect taxes
Charged / (credited) to profit or loss
Add: Additional provision recognised
Less: Amount used during the year
Less: Unused amounts reversed during the year
Balance as at the end of the year
15
(r in Crore)
As at
31st March, 2016
As at
1st April, 2015
6.02
12.41
17.60
(0.25)
(4.02)
-
50.64
42.25
Particulars
Leave encashment/Compensated absences (refer note (iii) below)
Gratuity (refer note (i) below)
Share-appreciation rights (refer note (v) below)
25.15
-
-
(0.50)
56.41
50.64
42.25
As at
31st March, 2017
As at
31st March, 2016
2.95
2.68
Employee Benefit Obligation Current
(r in Crore)
As at
31st March, 2017
8.19
6.60
6.71
13.93
(r in Crore)
As at
1st April, 2015
6.02
2.60
11.94
Incentives / Bonus
24.31
25.35
27.65
Total employee benefit obligations current
42.55
48.67
48.21
Others
0.50
-
-
Financial Statements
Particulars
269
NOTES
270
To Financial Statements for the year ended 31st March, 2017
Employee benefit obligation non current
Particulars
Share-appreciation rights (refer note (v) below)
Total employ benefit obligations non current
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
6.44
2.97
6.39
6.44
2.97
6.39
Notes:-
(i)Gratuity
(ii) Provident fund
(iii) Leave Encashment/Compensated absences.
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who
are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/
termination is the employee’s last drawn basic salary per month computed proportionately for 15 days salary multiplied
for the number of years of service. The gratuity plan is funded through gratuity trust.
Contributions are made to a trust administered by the Company. The Company’s liability is actuarially determined (using
the Projected Unit Credit method) at the end of the year and any shortfall in the fund balance maintained by the Trust
set up by the Company is additionally provided for. There is no shortfall as at 31st March, 2017, 31st March, 2016 and
1st April, 2015.
The Company provides for the encashment of leave with pay subject to certain rules. The employees are entitled to
accumulate leave subject to certain limits, for future encashment / availment. The liability is provided based on the
number of days of unutilized leave at each Balance Sheet date on the basis of an independent actuarial valuation. The
company encourages its employees to plan and avail their leave within a year, hence the company has classified leave
encashment provision amount as current.
Particulars
Current leave obligations expected to be settled within the next 12 months
(iv) Super annuation
(v) Share-appreciation rights
As at
31st March, 2017
8.19
As at
31st March, 2016
6.71
(r in Crore)
As at
1st April, 2015
6.02
The Company makes contribution to the Superannuation Scheme, a defined contribution scheme, administered by
Insurance companies. The company has no obligation to the scheme beyond its monthly contributions.
In respect of Employee Stock Appreciation Rights (STAR) granted pursuant to the Company’s Employee Stock
Appreciation Rights Plan, 2011, the liability shall be measured, initially and at the end of each reporting period until settled,
at the fair value of the share appreciation rights, by applying an option pricing model, (excess of fair value as at the period
end over the Grant price) and is recognized as employee compensation cost over the vesting period (refer note 33).
(a)
Balance sheet amounts - Gratuity
Particulars
1st April, 2015
Current service cost
Interest expense
Interest Income
Fair value of plan
assets
Net Amount
1.05
-
1.05
17.67
1.39
15.07
-
-
0.14
2.83
(Gain)/loss from change in financial assumptions
0.14
Total amount recognised in other comprehensive income
2.04
0.79
(2.17)
(2.17)
Employer contributions
Benefit Payments
31st March, 2016
1.90
-
19.98
1.39
(1.94)
2.44
Experience (gains)/ losses
2.60
1.94
Total amount recognised in profit or loss
Remeasurements
(r in Crore)
Present value of
obligation
1.94
0.79
0.50
2.69
3.25
(3.25)
17.30
2.68
-
NOTES
To Financial Statements for the year ended 31st March, 2017
1st April 2016
Current service cost
Interest expense
Interest Income
Fair value of plan
assets
Net Amount
1.68
-
1.68
19.98
17.30
1.54
-
(1.34)
-
0.95
1.80
(Gain)/loss from change in financial assumptions
0.95
Total amount recognised in other comprehensive income
2.42
(0.62)
(2.20)
(2.20)
Employer contributions
Benefit Payments
31st March, 2017
1.34
1.47
Present value of funded obligations
Fair value of plan assets
Deficit of gratuity plan
-
23.42
Discount rate
Rate of return on Plan assets*
Future salary rise**
Attrition rate
0.85
3.41
(3.41)
20.47
2.95
-
(r in Crore)
31st March, 2017
31st March, 2016
23.42
19.98
1st April, 2015
17.67
(20.47)
(17.30)
(15.07)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
6.77%
7.72%
2.95
2.68
2.60
The significant actuarial assumptions were as follows
Particulars
1.88
(0.62)
The Net liability disclosed above relates to funded and unfunded plans are as follows
Particulars
1.54
1.34
3.22
Experience (gains)/ losses
2.68
-
Total amount recognised in profit or loss
Remeasurements
(r in Crore)
Present value of
obligation
Mortality
6.77%
10.00%
17.00%
7.72%
10.00%
17.00%
7.89%
7.89%
10.00%
17.00%
Indian Assured Lives Mortality (2006-08) Ultimate
*The expected rate of return on plan assets is based on expectation of the average long term rate of return expected
on investment of the fund during the estimated term of the obligations.
**The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion, and other relevant factors such as supply and demand factors in the employment market. (The expected
rate of return on plan assets is based on the current portfolio of assets, investment strategy and market scenario.)
Sensitivity Analysis
The sensitivity of the defined benefit obligations to the changes in the weighted principal assumptions is as under:
(r in Crore)
Particulars
Projected benefit obligation on current assumptions
Delta effect of +1% change in rate of discounting
Delta effect of -1% change in rate of discounting
Delta effect of +1% change in rate of salary increase
Delta effect of -1% change in rate of salary increase
Delta effect of +1% change in rate of Employee turnover
Delta effect of -1% change in rate of Employee turnover
As at
31st March, 2017
As at
31st March, 2016
(0.99)
(0.81)
23.42
1.09
0.72
19.98
0.89
0.60
(0.71)
(0.59)
0.12
0.05
(0.11)
(0.05)
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating
Financial Statements
Particulars
271
NOTES
272
To Financial Statements for the year ended 31st March, 2017
the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present
value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting
period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the
prior period.
The major categories of plans assets are as follows :
Particulars
Special deposit scheme
31st March, 2017
Amount
0.53
in %
2.59%
31st March, 2016
Amount
-
in %
Amount
0.00%
(r in Crore)
1st April, 2015
-
in %
0.00%
Insurer Managed funds
19.91
97.26%
17.30
100.00%
15.07
100.00%
Total
20.47
100.00%
17.30
100.00%
15.07
100.00%
Other
0.03
0.15%
-
0.00%
-
0.00%
(b)
Provident Fund
Amount recognised in the Balance sheet
Particulars
Liability at the end of the year
Fair value of plan assets at the end of the year
Present value of benefit obligation as at the end of the period
Difference
Unrecognized past service Cost
(Assets) / Liability recognized in the Balance Sheet
Liability at the beginning of the year
Interest cost
Current service cost
31st March, 2016
1st April, 2015
122.01
98.60
85.80
-
-
(94.43)
(82.31)
(4.56)
(4.17)
(3.49)
4.56
-
4.17
-
Liability at the end of the year
8.75
7.20
6.75
8.49
7.11
82.31
6.73
9.40
2.82
(3.33)
(5.73)
(10.70)
-
-
-
-
Fair value of plan assets at the beginning of the year
Expected return on plan assets
81.83
6.01
8.21
2.99
(4.15)
(19.34)
-
-
117.45
94.43
82.31
31st March, 2017
31st March, 2016
1st April, 2015
8.77
7.21
Changes in fair value of plan assets:
Particulars
(r in Crore)
1st April, 2015
(6.38)
Actuarial (gain)/loss on obligations (Due to Experience)
-
31st March, 2016
94.43
Liability Transferred out
Actuarial (gain)/loss on obligations (Due to change in financial obligation)
3.49
31st March, 2017
10.78
Benefits paid
-
(117.45)
Employee contribution
Liability Transferred in
31st March, 2017
Changes in defined benefit obligations:
Particulars
(r in Crore)
98.60
85.80
(r in Crore)
82.59
6.75
Contributions
18.74
16.12
14.24
Transfer to other Company
(6.38)
(3.33)
(4.15)
Transfer from other Company
Benefits paid
Actuarial gain/(loss) on plan assets
Fair value of plan assets at the end of the year
7.11
2.82
2.99
(5.73)
(10.84)
(19.34)
122.01
98.60
85.80
0.90
0.82
2.72
NOTES
To Financial Statements for the year ended 31st March, 2017
Expenses recognised in the Statement of Profit and Loss :
Particulars
Current service cost
31st March, 2017
31st March, 2016
8.77
7.20
7.96
Interest cost
Expected return on plan assets
Net actuarial (gain)/loss to be recognized
Central Government securities
31st March, 2017
Amount
in %
14.18
11.62%
Public Sector Units
Equity / Insurance Managed Funds
Others
Total
7.96
6.72
6.02
-
31st March, 2016
-
Amount
(r in Crore)
Amount
15.43%
15.32
17.86%
40.05
46.68%
-
0.00%
85.80
100.00%
38.50
31.55%
43.33
43.94%
45.03
36.91%
3.63
3.68%
122.01
100.00%
98.60
7.41
3.18
6.07%
7.81
2.61%
4.25
1st April, 2015
in %
15.21
20.03
7.92%
6.50
4.31%
3.90
100.00%
in %
23.34%
7.57%
4.55%
The significant actuarial assumptions were as follows:
Discount rate
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
8.85%
8.80%
8.75%
6.67%
Rate of return on Plan assets*
Future salary rise**
Attrition rate
Mortality
(6.75)
11.24%
13.71
Particulars
(c)
(7.20)
24.72%
Private Sector Units
6.75
(8.77)
24.37
State loan/State government Guaranteed Securities
6.02
The major categories of plans assets are as follows :
Particulars
6.72
-
(Income) / Expense recognised in the Statement of Profit and Loss
(r in Crore)
1st April, 2015
10%
17%
7.72%
7.89%
10%
17%
10%
Indian Assured Lives Mortality (2006-08) Ultimate
17%
*The expected rate of return on plan assets is based on expectation of the average long term rate of return expected
on investment of the fund during the estimated term of the obligations.
**The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion, and other relevant factors such as supply and demand factors in the employment market. (The
expected rate of return on plan assets is based on the current portfolio of assets, investment strategy and market
scenario.)
Privileged leave (Compensated absences for employees):
Amount recognized in the Balance Sheet and movements in net liability:
Particulars
Opening balance of compensated absences (a)
Present value of compensated absences (As per actuarial valuation) as at
the year end (b)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
8.19
6.71
6.02
6.71
6.02
4.41
The privileged leave liability is not funded.
The Company has recognised Rs. Nil for the year ended 31st March, 2017, Rs. 0.15 Crore for the year ended 31st
March, 2016 and Rs. 0.22 Crore for the year ended 31st March, 2015 towards contribution to superannuation fund
in the Statement of Profit and Loss.
(d)
Superannuation fund
Financial Statements
273
NOTES
274
To Financial Statements for the year ended 31st March, 2017
The Company has recognised Rs.0.12 Crore for the year ended 31st March, 2017, Rs. 0.05 Crore for the year ended
31st March, 2016, Rs. 0.08 Crore for the year ended 31st March, 2015 towards employee state insurance plan in the
Statement of Profit and Loss.
Risk exposure (For Gratuity and Provident Fund)
The Company is exposed to below risks, pertaining to its defined benefit plans.
Asset volatility : The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan
assets underperform this yield, this will create a deficit. Most of the plan assets has investments in insurance/equity
managed fund, fixed income securities with high grades, public/private sector units and government securities.
Hence assets are considered to be secured.
Changes in bond yields : A decrease in bond yields will increase plan liabilities, although this will be partially offset
by an increase in the value of the plans’ bond holdings.
The Trust ensures that the investment positions are managed within an asset-liability matching (ALM) framework
that has been developed to achieve long-term investments that are in line with the obligations under the employee
benefit plans. Within this framework, the group’s ALM objective is to match assets to the obligations by investing in
long-term fixed interest securities with maturities that match the benefit payments as they fall due.
Defined benefit liability and employer contributions
The weighted average duration of the Gratuity is 6 years as at 31st March, 2017, as at 31st March, 2016 and as at
31st March, 2015.
The expected maturity analysis of Gratuity is as follows:
Particulars
As at
31st March, 2016
As at
1st April, 2015
Between 2 and 5 years
11.84
13.43
9.38
Between 6 and 10 years
9.82
16.20
7.42
25.24
32.92
19.84
Within the next 12 months
Total
16
3.58
3.29
Current Tax Liabilities/ (Assets)
Particulars
Opening balance (Receivables)/Payables
Less : Taxes paid
Closing balance Liabilities/(Assets)
Particulars
(r in Crore)
As at
31st March, 2016
243.52
189.53
(240.58)
(199.07)
1.08
(1.86)
Other Current Liabilities
3.04
As at
31st March, 2017
(1.86)
Current tax payable for the year
17
(r in Crore)
As at
31st March, 2017
7.68
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Contractual obligations
45.72
60.03
57.78
Advance from Customer
16.43
17.83
26.09
Statutory dues, including provident fund and tax deducted at source
Other payable
Total other current liabilities
33.92
20.90
17.29
0.07
0.05
-
96.14
98.81
101.16
NOTES
To Financial Statements for the year ended 31st March, 2017
Revenue from Operations
The company derives the following types of revenue:
Particulars
Sale of Products (including Excise Duty)
Finished goods
Traded goods
By-product sales
Other operating revenue:
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
4,513.16
4,616.39
108.51
111.20
230.22
131.22
Export incentives
8.49
4.82
Sale of scrap
6.36
4.36
Other incentives
Total Revenue
a) Details of Sales (Finished goods)
Edible oils
Hair oils
Personal care
Others
Total
2.14
-
4,868.88
4,867.99
2,805.62
2,947.22
275.50
273.07
1,301.89
130.15
4,513.16
1,262.54
133.56
4,616.39
b) Details of Sales (Traded goods)
Oil seeds (Copra)
Personal care
Others
Total
19
114.17
88.86
230.22
131.22
Year ended
31st March, 2017
Year ended
31st March, 2016
33.97
Other Income
Particulars
(a) Other income
Lease rental income
8.14
82.08
34.22
(r in Crore)
1.20
0.91
-
25.10
171.39
114.06
Interest income from financial assets at amortised cost
24.87
18.59
Royalty Income
10.40
10.10
Dividend income from investments mandatorily measured at fair value through profit or loss
Dividend income from subsidiaries
Others
Total
5.53
9.59
213.39
178.35
-
9.13
48.47
3.08
(b) Other gains/(losses):
Net gain on disposal of property, plant and equipment
Net gain on financial assets mandatorily measured at fair value through profit or loss and Net gain on sale of
investments*
Total
Total Other Income
48.47
12.21
261.86
190.56
*Includes net gain on financial assets mandatorily measured at fair value through profit or loss of Rs. 18.16 Crore ( 31st March,
2016: Rs. 1.14 Crore)
Financial Statements
18
275
NOTES
276
To Financial Statements for the year ended 31st March, 2017
20(a)Cost of materials consumed
Particulars
Raw materials at the beginning of the year
Year ended
31st March, 2016
2,223.66
2,096.10
264.09
Add: Purchases
Less: Raw materials at the end of the year
Total Raw materials consumed
Packing materials at the beginning of the year
Add: Purchases
Less: Packing materials at the end of the year
Total Packing materials consumed
Total cost of materials consumed
247.39
523.80
264.09
1,963.95
2,079.40
56.97
61.44
396.53
401.59
65.24
56.97
388.26
406.06
2,352.21
2,485.46
20(b)Changes in inventories of finished goods, stock-in-trade and work-in-progress
Particulars
(r in Crore)
Year ended
31st March, 2017
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
Finished goods
300.53
346.30
Work-in-progress
120.03
107.20
Opening inventories
By-products
3.16
5.56
14.68
16.40
Finished goods
327.06
300.53
Work-in-progress
142.37
120.03
Stock-in-trade
Closing inventories
By-products
3.14
3.16
13.27
14.68
(47.44)
37.06
Year ended
31st March, 2017
Year ended
31st March, 2016
Raw oils (other than Copra and Kardi seeds)
781.06
717.43
Others
315.49
425.22
1,963.95
2,079.40
Year ended
31st March, 2017
Year ended
31st March, 2016
Personal care
52.51
48.96
Others
26.33
23.94
169.44
79.95
Stock-in-trade
Total changes in inventories of finished goods, stock-in-trade and work-in-progress
a.
Details of Raw materials consumed
Particulars
Oil seeds (Copra and Kardi seeds)
Total
b.
867.40
Details of Purchases of Stock-in-trade
Particulars
Oil seeds (Copra)
Total
90.60
(r in Crore)
936.75
(r in Crore)
7.05
NOTES
To Financial Statements for the year ended 31st March, 2017
c.
Value of imported and indigenous Raw materials consumed
Particulars
Imported
21
253.41
1,780.81
1,825.99
Total
1,963.95
2,079.40
Year ended
31st March, 2017
Year ended
31st March, 2016
Contribution to provident and other funds (refer note 15)
12.63
10.23
Employee share-based payment expense (refer note 33)
4.02
3.46
Stock appreciation right expenses (refer note 33)
13.21
14.65
Staff welfare expenses
15.11
11.88
250.92
228.20
Year ended
31st March, 2017
Year ended
31st March, 2016
Depreciation on Investment properties (refer note 4)
0.43
0.43
Amortisation of intangible assets (refer note 5)
3.04
3.44
Employee Benefit Expenses
Particulars
Salaries, wages and bonus
Total Employee Benefit Expense
205.95
Depreciation and Amortization Expense
Particulars
Depreciation on property, plant and equipment (refer note 3)
23
183.14
(r in Crore)
Year ended
31st March, 2016
Indigenous
22
Year ended
31st March, 2017
60.83
(r in Crore)
187.98
(r in Crore)
58.26
Impairment loss / (reversal of loss) of capitalised assets (refer note 3)
(0.20)
6.69
Total Depreciation and Amortization Expense
64.10
68.82
Year ended
31st March, 2017
Year ended
31st March, 2016
Other Expenses
Particulars
Consumption of stores and spare parts
Power, fuel and water
Contract manufacturing charges
Rent and storage charges
Repairs to:
- Building
- Machinery
- Others
Freight, forwarding and distribution expenses
Advertisement and sales promotion
Rates and taxes (net)
Commission to selling agents
Communication expenses
Printing and stationery
Travelling, conveyance and vehicle expenses
Royalty
Insurance
18.77
26.46
157.37
39.30
8.95
(r in Crore)
15.91
28.31
168.36
27.99
8.69
20.05
19.31
179.62
177.60
30.96
36.70
2.54
467.47
2.79
7.90
2.17
2.25
511.49
2.52
7.26
1.53
27.28
24.99
6.78
6.23
5.78
5.30
Financial Statements
277
NOTES
278
To Financial Statements for the year ended 31st March, 2017
Particulars
Year ended
31st March, 2016
- Statutory audit fees (including Limited Review)
1.13
1.09
- for reimbursement of expenses
0.05
Payments to the auditor as :
- for other services as statutory auditors
Net loss on foreign currency transactions and translation (Refer note (a) below)
Commission to Non-executive directors
Provision for doubtful debts, loans, advances and investments
Miscellaneous expenses (Refer note (b) below )
Total Other Expenses
0.10
0.12
0.02
31.09
57.70
1.82
1.31
1.62
1.96
129.07
94.38
1,169.07
1,201.02
(a) Net loss on foreign currency transactions and translation is other than as considered in finance cost.
(b) Miscellaneous expenses include :
Particulars
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
6.91
5.21
Outside services
26.06
19.38
Legal and professional charges
48.93
33.91
4.56
7.59
Year ended
31st March, 2017
Year ended
31st March, 2016
Labour charges
Training and seminar expenses
Donation
(r in Crore)
Year ended
31st March, 2017
19.68
(c) Corporate social responsibility expenditure
Particulars
Amount required to be spent as per the section 135 of the Act
13.15
13.37
(r in Crore)
11.35
Amount spent during the year on
(i) Construction/acquisition of an asset
(ii) On purposes other than (i) above
-
-
14.56
10.02
(d) Research and Development expenses aggregating to Rs. 6.70 Crore for food and edible items and Rs. 23.15 Crore for
others have been included under the relevant heads in the Statement of Profit and Loss. (Previous year ended 31st
March, 2016 aggregating Rs. 25.04 Crore). Further Capital expenditure pertaining to this of Rs. 0.59 Crore for food and
edible items and Rs. 2.11 Crore for others have been incurred during the year (Previous year ended 31st March, 2016
aggregating Rs. 2.43 Crore). 24
Finance Costs
Particulars
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
0.18
0.58
(0.39)
(0.78)
Bank and other financial charges
1.36
1.30
Exchange differences regarded as an adjustment to borrowing costs
4.89
5.92
12.59
15.17
Interest and finance charges on financial liabilities not at fair value through profit or loss
Other borrowing costs
Fair value changes on interest rate swaps designated as cash
flow hedges transfer from OCI
Finance Costs
6.55
8.15
NOTES
To Financial Statements for the year ended 31st March, 2017
Income Tax Expense
Particulars
(r in Crore)
Year ended
31st March, 2017
Year ended
31st March, 2016
243.83
196.56
(0.31)
(7.03)
243.52
189.53
(Decrease) /Increase in deferred tax liabilities
55.50
54.95
Total deferred tax expenses/(benefit)
55.50
54.95
299.02
244.48
Profit from operations before income tax expense
1,141.72
935.74
India tax rate
34.608%
34.608%
395.12
323.84
(0.81)
(12.42)
Corporate social responsibility expenditure
4.39
2.42
Employee share based expense
5.96
6.27
Deduction under various sections of Income Tax Act, 1961
(73.51)
(50.20)
Dividend income from subsidiaries to be taxed at lower rate
(29.66)
(18.31)
-
(1.50)
Interest income on loan to WEOMA trust eliminated in financial statement
1.18
0.73
Provision for impairment of investment in joint venture
0.56
-
(3.90)
0.68
(a) Income tax expense
Current tax
Current tax on Profit for the year
Adjustment to current tax of prior periods
Total current tax expenses
Deferred tax
Total Income tax expense
(b) Reconciliation of tax expense and accounting profit multiplied by India tax rate
Tax at India tax rate
Tax effect of amounts which are not deductible (allowable) in calculating taxable income :
Exempt income
Other items :
Long Term Capital Gains on sale of land taxed at different rate
Others
Adjustment to current tax of prior periods
Total Income tax expense
(0.31)
(7.03)
299.02
244.48
Financial Statements
25
279
NOTES
280
To Financial Statements for the year ended 31st March, 2017
26
Fair Value Measurements
(a) Financial Instruments by category
Particulars
(r in Crore)
Note
31st March, 2017
FVPL
FVOCI
31st March, 2016
Amortized
Cost
FVPL
FVOCI
1st April, 2015
Amortized
Cost
FVPL
FVOCI
Amortized
Cost
Financial Assets
Investments
Equity Instruments
6(a)
0.14
-
-
1.47
-
-
4.52
-
-
Bonds and debentures (including interest accrued)
6(a)
-
-
40.72
-
-
24.78
-
-
24.78
Mutual funds
6(a)
391.18
-
-
359.18
-
-
213.20
-
-
Government securities
6(a)
-
-
0.01
-
-
0.01
-
-
0.01
Trade receivables
6(b)
-
-
227.61
-
-
192.10
-
-
130.55
Inter corporate deposits (including interest accrued)
6(a)
-
-
126.56
-
-
94.74
-
-
60.76
Loans
6(c)
-
-
8.09
-
-
7.78
-
-
11.29
Derivative financial assets
6(g)
-
2.11
-
-
4.15
-
-
0.58
-
6(f),6(g)
-
-
14.03
-
-
11.55
-
-
11.79
6(d)
-
-
1.63
-
-
12.62
-
-
15.48
6(d),6(e)&6(f)
-
-
67.34
-
-
128.53
-
-
86.68
6(f),6(g)
-
-
35.98
-
-
34.53
-
-
30.08
Security deposits
Cash and cash equivalent
Fixed deposits
Advances to subsidaries
Insurance claim receviable
6(g)
Total financial assets
-
-
-
-
-
1.95
-
-
0.05
391.32
2.11
521.97
360.65
4.15
508.59
217.72
0.58
371.47
Financial Liabilities
Borrowings (including interest
accrued)
13(a)
-
-
108.56
-
-
205.11
-
-
271.42
Derivative financial liabilities
13(b)
-
3.14
-
-
1.81
-
-
1.53
-
Trade payables
13(c)
-
-
476.24
-
-
484.78
-
-
405.55
Capital creditors
13(b)
-
-
4.00
-
-
3.14
-
-
4.28
Others
13(b)
-
-
3.66
-
-
4.33
-
3.14
592.46
-
1.81
697.36
Total financial liabilities
Fair value hierarchy
2.82
-
1.53
684.07
(b) This section explains the judgements and estimates made in determining the fair values of the financial instruments that
are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed
in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value,
the Company has classified its financial instruments into the three levels in accordance with the applicable Accounting
Standard. An explanation of each level follows underneath the table.
NOTES
To Financial Statements for the year ended 31st March, 2017
281
Notes
Level 1
Level 2
Level 3
Total
Financial assets and liabilities measured at fair value - recurring fair value
measurements as 31st March, 2017
Financial assets
Equity Instruments
6(a)
-
-
0.14
0.14
Mutual funds
6(a)
16.42
374.76
-
391.18
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(f)
-
16.42
2.11
-
376.87
0.14
3.14
-
2.11
393.43
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Total financial liabilities
13(b)
-
3.14
3.14
-
3.14
-
42.75
126.56
126.56
Financial assets and liabilities measured at amortized cost for which fair value
are disclosed as 31st March, 2017
Financial Assets
Investments
Bonds and debentures (including interest accrued)
6(a)
42.75
-
Inter - corporate deposits (including interest accrued)
6(a)
-
-
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
Total financial liabilities
6(a)
13(a)
-
42.75
-
-
-
-
0.01
126.57
108.56
-
108.56
-
-
0.01
169.32
108.56
108.56
Financial assets and liabilities measured at fair value - recurring fair value measurements as 31st March, 2016
Financial assets
Listed equity instrument
Mutual funds
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(a)
6(a)
6(f)
1.47
30.30
-
328.88
-
1.47
359.18
31.77
333.03
4.15
-
-
364.80
4.15
-
1.42
-
1.42
-
1.81
-
1.81
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Foreign-exchange Interest Rate Swaps used as designated Interest rate hedges
contracts
Total financial liabilities
13(b)
13(b)
-
0.39
-
0.39
Financial Statements
(r in Crore)
NOTES
282
To Financial Statements for the year ended 31st March, 2017
(r in Crore)
Notes
Level 1
Level 2
Level 3
Total
Financial assets and liabilities measured at amortized cost for which fair value are
disclosed as 31st March, 2016
Financial Assets
Investments
Bonds (including interest accrued)
6(a)
26.46
-
Inter - corporate deposits (including interest accrued)
6(a)
-
-
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
Total financial liabilities
6(a)
13(a)
-
26.46
-
-
-
-
-
26.46
94.74
94.74
0.01
94.75
205.11
-
205.11
-
-
0.01
121.21
205.11
205.11
Financial assets and liabilities measured at fair value - recurring fair value measurements as 1st April, 2015
Financial assets
Listed equity instruments
Mutual funds
Derivative designated as hedges
Foreign exchange forward contracts, options and interest rate swaps
Total financial assets
6(a)
6(a)
6(f)
4.52
13.29
-
199.91
-
4.52
213.20
17.81
200.49
0.58
-
218.30
0.58
-
0.36
-
0.36
-
1.53
-
1.53
26.16
-
-
26.16
-
-
Financial liabilities
Derivatives designated as hedges
Foreign exchange forward contracts
Foreign-exchange Interest Rate Swaps used as designated Interest rate hedges
contracts
13(b)
13(b)
Total financial liabilities
-
1.17
-
1.17
Financial assets and liabilities measured at amortized cost for which fair value are
disclosed as 1st April, 2015
Financial Assets
Investments
Bonds (including interest accrued)
6(a)
Inter corporate deposits (including interest accrued)
6(a)
Government securities
Total financial assets
Financial liabilities
Borrowings (including interest accrued)
Total financial liabilities
6(a)
13(a)
-
26.16
-
-
-
-
0.01
60.76
60.77
271.42
271.42
0.01
60.76
86.93
271.42
271.42
The fair value of financial instruments as referred to in note above has been classified into three categories depending
on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market
for identical assets or liabilities (level 1 measurement) and lowest priority to unobservable inputs (level 3 measurements).
The categories used are as follows:
Level 1: Financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds,
mutual funds, bonds and debentures, that have quoted price. The fair value of all equity instruments (including bonds)
which are traded in the stock exchanges is valued using the closing price as at the reporting period. NOTES
To Financial Statements for the year ended 31st March, 2017
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little
as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is considered here.For example, the fair value of forward exchange contracts, currency swaps and interest
rate swaps is determined by discounting estimated future cash flows using a risk-free interest rate. The mutual funds are
valued using the closing NAV pubhlished by mutual fund
Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs
that are not based on observable market data (unobservable inputs). When the fair value of unquoted instruments cannot
be measured with sufficient reliability, the company carries such instruments at cost less impairment, if applicable.
The Company policy is to recognize transfers into and transfer out of fair value hierarchy levels as at the end of the
reporting period.
(c) Fair value of financial assets and liabilities measured at amortised cost
Particulars
Note
Financial Assets
Investments
Bonds and debentures
Government securities
Inter - corporate deposits
Total financial assets
Financial liabilities
Borrowings
Total financial liabilities
31st March, 2017
Carrying
Value
Fair Value
(r in Crore)
31st March, 2016
Carrying
Value
Fair Value
1st April, 2015
Carrying
Value
Fair Value
6(a)
40.72
42.75
24.78
26.46
24.78
26.16
6(a)
126.56
126.56
94.74
94.74
60.76
60.76
6(a)
13(a)
0.01
167.29
108.56
108.56
0.01
169.32
108.56
108.56
0.01
119.53
205.11
205.11
0.01
121.21
205.11
205.11
0.01
85.55
271.42
271.42
0.01
86.93
271.42
271.42
The carrying amounts of trade receivables, trade payables, capital creditors, loans and advances, security deposit, fixed
deposit, insurance claim receivable, other financial liabilities and cash and cash equivalents are considered to be the
same as their fair values, due to their short-term nature.
27
Financial Risk Management
Financial Risks
Board of Directors of the Company has approved Risk Management Framework through policies regarding Investment,
Borrowing and Foreign Exchange Management policy. Treasury Management Guidelines define,determine and classify risk,by
category of transaction, specific approval, execution and monitoring procedures.
In the course of its business, the Company is exposed to a number of financial risks: credit risk, liquidity risk, market risk
(including foreign currency risk and interest rate risk, commodity price risk and equity price risk). This note presents the
Company’s objectives, policies and processes for managing its financial risk and capital.
In accordance with the aforementioned policies, the company only enters into plain vanilla derivative transactions relating to
assets, liabilities or anticipated future transactions.
(A) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
company. Credit risk arises on liquid assets, financial assets, derivative assets, trade and other receivables.
In respect of its investments the company aims to minimize its financial credit risk through the application of risk
management policies. Credit limits are set based on a counterparty value . The methodology used to set the list of
counterparty limits includes, counterparty Credit Ratings (CR) and sector exposure. Evolution of counterparties is
monitored regularly, taking into consideration CR and sector exposure evolution. As a result of this review, changes on
Financial Statements
283
NOTES
284
To Financial Statements for the year ended 31st March, 2017
credit limits and risk allocation are carried out. The Company avoids the concentration of credit risk on its liquid assets by
spreading them over several asset management companies and monitoring of underlying sector exposure.
Trade receivables are subject to credit limits, controls and approval processes. Due to large geographical base and number
of customers, the Company is not exposed to material concentration of credit risk. Basis the historical experience, the
risk of default in case of trade receivable is low. Provision is made for doubtful receivables on individual basis depending
on the customer ageing, customer category, specific credit circumstances and the historical experience of the Company.
The gross carrying amount of trade receivables is Rs. 227.61 Crore as at 31st March, 2017, Rs. 192.10 Crore as at 31st
March, 2016 and Rs. 130.55 Crore as at 1st April, 2015.
Reconciliation of loss allowance provision- trade receivables
Particulars
Loss allowance at the beginning of the year
Add : Changes in loss allowances
Loss allowance at the end of the year
31st March, 2017
31st March, 2016
(0.05)
0.08
2.92
2.97
2.97
2.89
Security deposits are interest free deposits given by the Company for properties taken on lease. Provision is taken on
a case to case basis depending on circumstances with respect to non recoverability of the amount. The gross carrying
amount of Security deposit is Rs. 15.04 Crore as at 31st March, 2017, Rs. 12.55 Crore as at 31st March, 2016 and Rs.
11.79 Crore as at 1st April, 2015.
Advances are given to subsidiaries and joint venture for various operational requirements. Provision is taken on a case to
case basis depending on circumstances with respect to non recoverability of the amount. The gross carrying amount of
loans and advances is Rs. 37.59 Crore as at 31st March, 2017, Rs. 36.74 Crore as at 31st March, 2016 and Rs. 35.66 Crore
as at 1st April, 2015
Reconciliation of loss allowance provision- deposits/advances
Particulars
Loss allowance at the beginning of the year
Add : Changes in loss allowances due to provision/(reversal/write off)
Loss allowance at the end of the year
(r in Crore)
(r in Crore)
31st March, 2017
1.82
31st March, 2016
-
(0.81)
1.82
1.01
1.82
(B) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market
positions. Due to the dynamic nature of the underlying businesses, company treasury maintains flexibility in funding by
maintaining availability under committed credit lines.
The current ratio of the company as at 31st March, 2017 is 2.52 (as at 31st March, 2016 is 1.87, as at 1st April, 2015 is
1.97) whereas the liquid ratio of the company as at 31st March, 2017 is 1.42 (as at 31st March, 2016 is 1.15, as at 1st April,
2015 is 1.01).
NOTES
To Financial Statements for the year ended 31st March, 2017
285
Particulars
Note
Contractual maturities of financial liabilities 31st March, 2017
Non-derivatives
Borrowings
13(a)
Other Financial Liabilities
13(b)
Trade Payables
Total Non- derivative liabilities
Derivative
Foreign exchange forward contracts
Principal swap
13(c)
13(b)
Total derivative liabilities
Less than
1 year
115.41
476.24
1 year to
2 years
2 years to
3 years
-
-
-
-
and above
-
(r in Crore)
Total
115.41
-
476.24
7.66
-
-
-
599.31
3.14
-
-
-
3.14
3.14
-
-
-
3.14
599.31
-
3 years
-
7.66
Contractual maturities of financial liabilities 31st March, 2016
Non-derivatives
Borrowings
13(a)
Other financial liabilities
13(b)
Trade payables
Total Non- derivative liabilities
Derivative
Foreign exchange forward contracts
Total derivative liabilities
13(c)
13(b)
211.08
484.78
7.47
703.33
1.81
-
-
-
-
1.81
-
110.21
174.37
-
-
-
-
-
-
211.08
-
484.78
-
703.33
-
-
-
7.47
1.81
1.81
Contractual maturities of financial liabilities 1st April, 2015
Non-derivatives
Borrowings
13(a)
Other Financial Liabilities
13(b)
Trade Payables
Total Non- derivative liabilities
Derivative
Foreign exchange forward contracts
Total derivative liabilities
13(b)
405.55
7.10
522.86
1.53
1.53
-
-
174.37
-
-
-
-
-
-
-
-
-
284.58
-
405.55
-
697.23
-
-
-
7.10
1.53
1.53
(C) Market Risk
13(c)
The Company is exposed to risk from movements in foreign currency exchange rates, interest rates and market prices
that affect its assets, liabilities and future transactions.
(i)
Foreign currency risk
The Company is exposed to foreign currency risk from transactions and translation.
Transactional exposures arise from transactions in foreign currency. They are managed within a prudent and
systematic hedging policy in accordance with the Company’s specific business needs through the use of currency
forwards and options.
Financial Statements
Maturities of financial liabilities
NOTES
286
To Financial Statements for the year ended 31st March, 2017
The company’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 31st
March, 2017
(r in Crore)
Particulars
Financial assets
Foreign currency Debtors for export of goods
Bank balances
AED
AUD
BDT
CAD
EGP
GBP
SGD
USD
-
-
-
0.24
-
-
-
64.59
0.01
0.01
0.01
-
-
0.01
0.01
0.38
2.88
-
10.98
-
0.22
-
-
-
-
-
-
2.89
0.01
10.99
0.24
0.22
-
Other receivable / (payable)
Loans and advances to subsidiaries including
interest accrued
Derivative asset
Foreign exchange forward
contracts sell foreign currency
Foreign exchange option contracts sell option
-
-
Net Exposure to foreign currency risk
(assets)
-
-
-
-
-
-
-
THB
-
-
0.03
0.01
-
0.01
-
20.05
1.37
-
-
-
(86.14)
-
-
0.01
0.01
(51.79)
1.38
0.01
-
-
VND
-
-
(50.70)
-
-
-
(r in Crore)
Particulars
EUR
LKR
GBP
0.01
0.11
1.30
-
-
48.35
Foreign exchange forward contracts buy foreign currency
(1.86)
-
-
(1.19)
Net Exposure to foreign currency risk (liabilities)
(1.85)
Financial liabilities
Foreign currency Creditors for Import of goods and services
Foreign Currency Loan
-
Derivative liabilities
Foreign exchange Option contracts buy option
-
-
-
AUD
-
-
0.11
(3.91)
1.30
(5.10)
USD
SGD
-
0.15
(62.09)
-
-
(13.46)
-
(27.20)
0.15
The Company’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 31st
March, 2016
(r in Crore)
Particulars
Financial assets
Foreign currency debtors for export
of goods
Bank balances
Other receivable / (payable)
Loans and advances to subsidiaries
including interest accrued
AED
ARS
BDT
CAD
EGP
EUR
SGD
USD
VND
ZAR
0.01
-
-
0.19
-
1.18
-
52.15
-
-
-
-
-
-
-
-
-
0.03
0.01
-
0.01
0.01
-
12.30
-
0.49
-
0.02
0.01
-
7.23
-
1.34
-
-
-
-
-
-
-
(123.08)
-
(1.35)
-
-
-
-
-
-
-
(1.81)
-
-
3.79
0.01
12.31
0.19
0.49
1.20
0.01
(65.21)
0.01
(0.01)
3.77
0.01
-
-
0.27
-
-
Derivative asset
Foreign exchange forward contracts
sell foreign currency
Foreign exchange option contracts
sell option
Net Exposure to foreign currency
risk (assets)
NOTES
To Financial Statements for the year ended 31st March, 2017
287
Particulars
Financial liabilities
Foreign currency creditors for import of goods and services
Foreign currency debtors for export of goods
BDT
LKR
GBP
AUD
USD
0.10
0.06
0.98
-
-
-
-
-
0.00
-
-
(4.83)
-
Other receivable / (payable)
Derivative liabilities
Foreign exchange forward contracts buy foreign currency
-
-
Foreign exchange option contracts buy option
Net Exposure to foreign currency risk (liabilities)
0.00
-
-
-
(44.06)
-
-
-
(4.83)
(12.72)
0.10
0.06
0.98
(9.66)
(56.78)
The company’s exposure to foreign currency risk at the end of the reporting period expressed in INR as on 1st April,
2015.
(r in Crore)
Particulars
AED
ARS
AUD
BDT
EGP
EUR
SGD
USD
VND
ZAR
Foreign currency debtors for export
of goods
0.01
-
-
-
-
-
-
35.95
-
-
Other receivable / (payable)
0.01
0.01
0.01
-
-
0.01
0.02
0.37
0.03
0.01
-
-
1.11
-
-
15.13
0.51
-
-
12.73
-
5.44
-
-
-
-
-
-
-
(7.47)
-
(5.44)
-
-
-
-
-
-
-
(27.33)
-
-
1.13
0.01
0.01
15.13
0.51
0.01
0.02
14.28
0.01
(0.00)
Financial assets
Bank balances
Loans and advances to subsidiaries
including interest accrued
-
-
-
-
-
-
-
-
Derivative asset
Foreign exchange forward contracts
sell foreign currency
Foreign exchange option contracts
sell option
Net Exposure to foreign currency
risk (assets)
(r in Crore)
Particulars
BDT
EUR
GBP
SGD
USD
AUD
-
0.09
1.47
0.01
-
-
Foreign exchange forward contracts buy foreign currency
-
(3.22)
-
-
(23.68)
(1.16)
Foreign exchange option contracts buy option
-
-
-
-
(20.76)
(2.73)
0.01
(3.13)
1.47
0.01
(44.44)
(3.89)
Financial liabilities
Foreign currency creditors for import of goods and services
Other receivable / (payable)
0.01
-
-
-
-
-
Derivative liabilities
Net Exposure to foreign currency risk (liabilities)
Excludes Loans payable of Rs. 178.87 Crore [USD 27,000,000] (Rs. 262.49 Crore [USD 42,000,000]) assigned to hedging
relationship against highly probable forecast sales. The Cash flows are expected to occur and impact the Statement of
Profit and Loss within the period of 1 year (Previous year: 2 years).
Financial Statements
(r in Crore)
NOTES
288
To Financial Statements for the year ended 31st March, 2017
(r in Crore)
Particulars
Impact on profit after tax
31st March,
2017
USD Sensitivity
INR/USD Increase by 6% (31 March 2016-5%)
31st March,
2016
1.44
INR/USD Decrease by 6% (31 March 2016-5%)
AUD Sensitivity
INR/AUD Increase by 6% (31 March 2016-6%)
INR/AUD Decrease by 6% (31 March 2016-6%)
Impact on other component of equity
31st March,
2017
1.95
(1.44)
(1.95)
0.01
(0.01)
(0.01)
0.01
31st March,
2016
(2.40)
(2.23)
2.40
2.23
0.17
0.32
(0.17)
(0.32)
ii)
Interest rate risk
The Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Under these
swaps, the Company agrees with other parties to exchange, at specified intervals (mainly quarterly), the difference
between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional
principal amounts. The Company is exposed primarily to fluctuation in USD interest rates. Interest rate risk on financial debt is managed
through interest rate swaps.
The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate
risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a
change in market interest rates.
The exposure of the Company’s borrowing to interest rate changes at the end of the reporting period are as follows:
Particulars
Variable rate borrowings
31st March, 2016
48.35
25.83
8.64
108.56
205.12
271.43
60.21
Fixed rate borrowings
Total borrowings
Bank Overdrafts,
Bank Loans
Interest rate Swaps
(Notional principal
amount)
Net Exposure to
Cash Flow Interest
rate Risk
262.79
31st March, 2017
Weighted
Average
Interest Rate
Balance
% of Total
Loans
5.55%
60.21
55.47%
-
-
-
60.21
31st March, 2016
Weighted
Average Interest Rate
Balance
% of Total
Loans
2.88%
179.29
87.41%
-
1.25%
(89.64)
-
-
89.65
1st April, 2015
Weighted
Average Interest Rate
Balance
% of Total
Loans
2.95%
262.79
96.82%
-
1.25%
(131.39)
-
-
-
131.40
-
Financial assets are classified at amortized cost have fixed interest rate. Hence, the Company is not subject to interest
rate risk on such financial assets.
Sensitivity
179.29
1st April, 2015
As at the end of reporting period, the company had the following variable rate borrowings and interest rate swap contracts
outstanding:
Particulars
(r in Crore)
31st March, 2017
The sensitivity analysis below have been determined based on the exposure to interest rates for both derivatives and
non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming
the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year.
NOTES
To Financial Statements for the year ended 31st March, 2017
Interest rates - Increase by 50 basis point (50 bps)
31st March,
2017
Interest rates - decrease by 50 basis point (50 bps)
(r in Crore)
Impact on profit after tax
0.20
(0.20)
31st March,
2016
0.59
(0.59)
Impact on other component of equity
31st March,
2017
-
-
31st March,
2016
(0.29)
0.29
iii) Price risk
Mutual fund Net Asset Values ( NAVs) are impacted by a number of factors like interest rate risk, credit risk, liquidity risk,
market risk in addition to other factors. A movement of 1% in NAV on either side can lead to a gain/loss of Rs. 3.91 Crore,
Rs. 3.59 Crore and Rs. 2.13 Crore, on the overall portfolio as at 31st March, 2017, 31st March, 2016 and 1st April, 2015
respectively.
Impact of hedging activities
Derivate Asset and Liabilites through Hedge Accounting
Derivative financial instruments
The Company’s derivatives mainly consist of currency forwards and options ; interest rate swaps. Derivatives are mainly
used to manage exposures to foreign exchange, interest rate and commodity price risk as described in section Market
risk.
Derivatives are initially recognised at fair value. They are subsequently remeasured at fair value on a regular basis and
at each reporting date as a minimum, with all their gains and losses, realised and unrealised, recognised in the Profit and
Loss statement unless they are in a qualifying hedging relationship.
Hedge Accounting
The Company designates and documents certain derivatives and other financial assets or financial liabilities as hedging
instruments against changes in fair values of recognised assets and liabilities (fair value hedges) and highly probable
forecast transactions (cash flow hedges).The effectiveness of such hedges is assessed at inception and verified at
regular intervals.
Fair value hedges
The Company uses fair value hedges to mitigate foreign currency and interest rate risks of its recognised assets and
liabilities.
Changes in fair values of hedging instruments designated as fair value hedges and the adjustments for the risks being
hedged in the carrying amounts of the underlying transactions are recognised in the Statement of Profit and Loss.
The Company uses cash flow hedges to mitigate a particular risk associated with a recognised asset or liability or highly
probable forecast transactions, such as anticipated future export sales, purchases of equipment and raw materials.
The effective part of the changes in fair value of hedging instruments is recognised in other comprehensive income, while
any ineffective part is recognised immediately in the Statement of Profit and Loss.
Financial Statements
Particulars
289
NOTES
290
To Financial Statements for the year ended 31st March, 2017
Type of hedge and risks
Nominal value
Assets
31st March, 2017
Liabilities
Carrying amount of
Hedging Instrument
Assets
Maturity
date
Hedge
ratio
Weighted average strike
price/rate
Changes in
fair value
of hedging
instrument
Liabilities
Change in the value
of hedged item used
as the basis for
recognising hedge
effectiveness
Cash flow Hedge
Foreign Exchange Risk
Foreign Exchange
Contracts
Forward
Foreign Exchange
Contracts
Options
Net Investment Hedge
Foreign Exchange Forward
Contracts
(For Foreign Currency Loan)
86.14
16.78
2.47
(0.52)
April
2017March
2018
April
2017February
2018
1:1
50.70
17.37
1.16
0.07
-
48.36
-
(1.69)
April
2017July 2017
April
2016February
2017
1:1
April
2016March
2017
1:1
1:1
1:1
1 USD - Rs.
67.6804
1 AUD - Rs.
52.0500
1 EUR - Rs.
71.2450
1.24
(1.24)
0.49
(0.49)
1 USD - Rs.
71.6750
(1.57)
1.57
USD 1 - Rs.
68.4673
AUD 1 - Rs.
49.4850
1.10
(1.10)
USD 1 - Rs.
66.8584
AUD 1 - Rs.
47.4090
0.16
(0.16)
0.78
(0.78)
(0.15)
0.15
1.76
(1.76)
1 USD - Rs.
67.1404
1 AUD - Rs.
51.2200
31st March, 2016
Cash flow Hedge
Foreign Exchange Risk
Foreign Exchange
Contracts
Forward
123.08
48.89
0.90
(0.20)
Foreign Exchange
Contracts
Options
1.81
17.55
0.02
0.72
-
89.43
-
(0.39)
April
2016February
2017
1:1
1.25%
Foreign Exchange Forward
Contracts (Foreign Currency
Loan)
1.35
53.00
(19.58)
(0.01)
1:1
Foreign Exchange Options
Contracts (Foreign Currency
Loan)
-
53.00
-
1.76
April
2016February
2017
USD 1 - Rs.
68.8736
ZAR 1 - Rs.
4.4355
Interest Rate Risk
Interest Rate Swap
Fair Value hedge
Foreign Exchange Risk
April
2016February
2017
1:1
USD 1 - Rs.
66.4009
NOTES
To Financial Statements for the year ended 31st March, 2017
1st April, 2015
Nominal value
Assets
Carrying amount of
Hedging Instrument
Liabilities
Assets
Maturity
date
Hedge
ratio
Weighted average strike
price/rate
Changes in
fair value
of hedging
instrument
Liabilities
Change in the value
of hedged item used
as the basis for
recognising hedge
effectiveness
Cash flow Hedge
Foreign Exchange Risk
Foreign Exchange Forward
Contracts
7.47
28.06
0.01
(0.40)
April 2015
- October
2015
1:1
Foreign Exchange Options
Contracts
27.33
23.49
0.08
0.50
April
2015 November
2015
1:1
-
131.25
-
(1.17)
April 2015
- February
2017
1:1
1.25%
5.44
-
0.03
- April 2015December
2016
1:1
ZAR 1 - Rs.
5.1514
Interest Rate Risk
Interest Rate Swap
Fair Value hedge
Foreign Exchange Risk
Foreign Exchange Forward
Contracts (Foreign Currency
Loan)
USD 1 - Rs.
63.2336
AUD 1 - Rs.
50.8264
EUR 1 - RS.
72.8490
USD 1 - Rs.
62.1052
AUD 1 - Rs.
48.9800
(1.03)
1.03
(0.59)
0.59
0.60
(0.60)
(0.17)
0.17
Disclosure of effects of Hedge Accounting on Financial Performance
Type of hedge
Change in the value of the hedging
instrument recognised in other
comprehensive income
(r in Crore)
Hedge ineffectiveness
recognised in profit or loss
Amount reclassified
from cash flow hedging reserve to
profit or loss
Line item affected
in Statement of
Profit and Loss
because of the
reclassification
As at
31st March, 2017
As at
31st March, 2016
As at
31st March, 2017
As at
31st March, 2016
As at
31st March, 2017
As at
31st March, 2016
1.74
1.26
-
-
(1.95)
0.85
Other expenses
-
(0.78)
-
-
(0.39)
(1.55)
Finance cost
(1.57)
1.61
-
-
1.65
(0.04)
Finance cost
Cash Flow
Foreign Exchange Risk
Interest Rate Risk
Foreign Exchange Risk
Financial Statements
Type of hedge and risks
291
NOTES
292
To Financial Statements for the year ended 31st March, 2017
28
Capital Management
(a) Risk Management
Capital management is driven by Company’s policy to maintain a sound capital base to support the continued
development of its business. The Board of Directors seeks to maintain a prudent balance between different components
of the Company’s capital. The Management monitors the capital structure and the net financial debt at individual currency
level. Net financial debt is defined as current and non-current financial liabilities less cash and cash equivalents and shortterm investments. The debt equity ratio highlights the ability of a business to repay its debts. Refer below for Debt equity
ratio as on 31st March, 2017, 31st March, 2016 and 1st April, 2015.
The Company complies with all statutory requirement as per the extant regulations.
31st March, 2017
31st March, 2016
1st April, 2015
Total equity
2,924.24
2,538.27
2,334.88
4%
8%
12%
31st March, 2017
31st March, 2016
451.59
435.43
Net debt
Net debt to equity ratio
(r in Crore)
Particulars
108.35
204.36
(b)Dividend
Particulars
Equity shares
Interim dividend for the year
270.42
(r in Crore)
29
Segment Information
(ii) The amount of the Company’s revenue from external customers broken down by each product and service is shown in
the table below.
(i) Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating
Decision Maker (“CODM”) of the company. The CODM, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Managing Director and CEO of the Company. The
Company operates only in one business segment i.e. manufacturing and sale of consumer products within India, hence
does not have any reportable segment as per Indian Accounting Standard 108 “operating segments” in Standalone. The
company while presenting the consolidated financial statements has disclosed the segment information as required
under Indian Accounting Standard 108 “operating segments”.
Particulars
Edible
Hair Oils
Others
Personal care
Total
(r in Crore)
31st March, 2017
31st March, 2016
1,301.89
1,262.54
275.50
273.07
2,805.62
2,947.22
130.15
133.56
4,513.16
4,616.39
(iiii) Revenue from external customer outside India and assets located outside India are not material. Further, the Company
does not have revenue more than 10% of total revenue from single customer.
NOTES
To Financial Statements for the year ended 31st March, 2017
Related Party Transactions
I
Name of related parties and nature of relationship:
a)
Subsidiary Companies:
Name of Entity
Place of Business/Country of
Incorporation
Ownership interest held by the group
Ownership interest held by the non
controlling interest
31st March,
2017
31st March,
2016
1st April,
2015
31st March,
2017
31st March,
2016
1st April,
2015
%
%
%
%
%
%
Subsidiary companies:
Marico Bangladesh Limited (MBL)
Marico Middle East FZE (MME)
Marico Bangladesh Industries Limited (MBLIL)
Egyptian American Company for Investment and Industrial Development SAE (EAIIDC)
Bangladesh
90
90
90
10
10
10
UAE
100
100
100
0
0
0
Bangladesh
100
100
100
0
0
0
Egypt
100
100
100
0
0
0
Marico Malaysia Sdn. Bhd. (MMSB)
Malaysia
100
100
100
0
0
0
MEL Consumer Care SAE (MELCC)
Egypt
100
100
100
0
0
0
Egypt
100
100
100
0
0
0
Marico South Africa Consumer Care (Pty) Limited
(MSACC)
Marico Egypt Industries Company (MEIC)
South Africa
100
100
100
0
0
0
Marico South Africa (Pty) Limited (MSA)
South Africa
100
100
100
0
0
0
Vietnam
100
100
100
0
0
0
Marico South East Asia Corporation (Formerly known
as International Consumer Products Corporation)
Beaute Cosmetique Societe Par Actions (BCS)
Vietnam
Nil
Nil
99
Nil
Nil
1
Thuan Phat Foodstuff Joint Stock company (TPF)
Vietnam
Nil
99.99
99.99
Nil
0.01
0.01
Marico Consumer Care Limited (MCCL)
India
100
100
100
0
0
0
Halite Personal Care India Private Limited (A Company
under Voluntary Liquidation)
India
0
0
0
0
0
0
Marico Innovation Foundation (MIF)
India
NA
NA
NA
0
0
0
b)
The Marico Innovation Foundation (“MIF”), a company incorporated under Section 25 of the Companies Act, 1956
(being a private company limited by guarantee not having share capital) primarily with an objective of fuelling and
promoting innovation in India, is a wholly owned subsidiary of the Company with effect from 15th March, 2013.
During the year ended 31st March, 2016, Marico South East Asia Corporation (formerly known as International
Consumer Product Corporation) a subsidiary of the Company divested its entire stake in Beaute Cosmetique
Societe Par Actions (BCS) on 14th May, 2015.
Thuan Phat Food stuff Joint Stock company has been merged with Marico South East Asia Corporation (formerly
known as International Consumer Product Corporation) w.e.f 1st December, 2016.
Subsidiary firm:
MEL Consumer Care & Partners - Wind (Through MELCC)
c)
Joint venture:
Bellezimo Professionale Products Private Limited (During the year ended 31st March, 2016, the Company has
acquired 45% stake on 21st October, 2015)
Zed Lifestyle Private Limited (During the year ended 31st March, 2017, the Company has acquired 35.43% stake on
17th March, 2017)
Financial Statements
30
293
NOTES
294
To Financial Statements for the year ended 31st March, 2017
d)
Key management personnel (KMP):
Mr. Saugata Gupta, Managing Director and CEO
Mr. Harsh Mariwala, Chairman and Non Executive Director
Mr. Rajeev Bakshi, Independent Director
Mr. Atul Choksey, Independent Director
Mr. Nikhil Khattau, Independent Director
Mr. Anand Kripalu, Independent Director
Mr. Rajen Mariwala, Non executive Director
Mr. B.S. Nagesh, Independent Director
Ms. Hema Ravichandar, Independent Director
e)
Individual holding directly / indirectly an interest in voting power and their relatives (where transactions have taken place)
- Significant Influence:
Mr. Harsh Mariwala, Chairman and Non Executive Director
Mr. Rishabh Mariwala, son of Mr. Harsh Mariwala
f)
Post employment benefit controlled trust
Marico Limited Employees Provident Fund
Marico Limited Employees Gratuity Fund
g)
Others - Entities in which above (e) has significant influence and transactions have taken place:
Marico Kaya Enterprises Limited (upto 18th April, 2015)
Kaya Middle East FZE
II
Kaya Limited
Transactions with related parties
The following transactions occurred with related parties:
Key management personnel compensation
Particulars
31st March, 2017
31st March, 2016
11.83
3.88
Short-term employee benefits
4.57
4.03
Post-employment benefits
0.19
0.16
16.59
8.07
2.19
1.54
Employee share-based payment
Total compensation
Remuneration / sitting fees to Non-Executive and Independent Directors
(Excluding Chairman)
(r in Crore)
The above remuneration to Key management personnel compensation does not include contribution to gratuity fund, as
this contribution is a lump sum amount for all relevant employees based on actuarial valuation.
Contribution to post employment benefit controlled trust : refer note 15.
NOTES
To Financial Statements for the year ended 31st March, 2017
Sale of goods
Marico Bangladesh Limited
Marico Middle East FZE
Subsidiaries and Joint Venture
(Referred in I (a), (b) and (c)
above) For the year ended
31st March,
2017
206.47
115.13
31st March,
2016
98.56
16.98
(r in Crore)
Others (Referred in I (e) and (g)
above)
For the year ended
31st March,
2017
0.11
-
31st March,
2016
0.24
-
60.73
79.03
-
-
Others
3.82
0.12
0.11
0.24
Sale of assets
0.64
-
0.11
Others
0.02
-
0.11
-
6.59
6.54
-
-
-
0.05
-
-
10.40
10.10
2.98
3.74
-
-
0.39
0.55
-
-
171.39
114.06
50.73
-
-
-
-
8.26
-
-
Interest income
0.14
0.31
Bellezimo Professionale Products Private Limited
0.11
-
-
-
15.33
12.83
0.61
1.24
2.36
2.36
-
-
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Marico Bangladesh Limited
Purchases of goods
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Wind Company
Other transactions
Royalty income
Marico Bangladesh Limited
Marico Middle East FZE
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Others
Dividend income
Marico Bangladesh Limited
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Others
Marico South Africa Consumer Care (pty) Limited
Expenses paid on behalf of subsidiaries / Promoter Group Companies
Marico Bangladesh Limited
Marico Egypt Industries Company
Marico Middle East FZE
Kaya Limited
26.79
0.62
-
5.59
1.44
120.66
0.03
4.40
3.58
-
2.43
-
5.81
105.80
0.31
3.62
3.84
-
-
-
-
-
-
-
-
-
-
-
0.61
-
-
-
-
-
-
-
-
-
-
1.06
Financial Statements
Particulars
295
NOTES
296
To Financial Statements for the year ended 31st March, 2017
Particulars
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Subsidiaries and Joint Venture
(Referred in I (a), (b) and (c)
above) For the year ended
31st March,
2017
3.83
Others
1.16
Expenses paid by related parties on behalf of Marico Limited
1.08
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
Kaya Middle East FZE
Lease Rental Income
Kaya Limited
Royalty Expense
Marico Consumer Care Limited
Loans and Advances Recovered
Kaya Limited
Marico Bangladesh Limited
Marico South Africa Consumer Care (pty) Limited
Marico Egypt Industries Company
Marico Middle East FZE
Marico South East Asia Corporation (Formerly known as International Consumer Products Corporation)
31st March,
2016
2.51
0.50
31st March,
2017
-
31st March,
2016
-
-
0.18
1.08
-
-
-
0.23
-
-
-
0.23
-
0.87
0.72
-
-
(r in Crore)
Others (Referred in I (e) and (g)
above)
For the year ended
-
-
5.78
5.30
5.30
-
-
24.74
23.32
1.95
1.94
9.16
11.42
-
5.78
-
1.43
3.00
8.10
-
4.07
1.39
3.37
0.87
-
-
1.95
-
-
-
0.72
-
1.64
-
-
-
-
2.46
2.33
-
-
Others
0.59
0.74
-
0.30
Investments made during the year
0.27
1.35
Donation Given / CSR Activities
0.46
2.15
Bellezimo Professionale Products Private Limited
Marico Innovation Foundations
Deposit taken
0.27
0.46
-
Kaya Limited
-
Loans given
1.50
Bellezimo Professionale Products private Limited
Provision for doubtful advances
Marico Bangladesh Limited (Written off in the current year ended 31st
March, 2017)
Provision for Impairment of Investment
Bellezimo Professionale Products Private Limited
Professional fees paid
Mr. Harsh Mariwala, Chairman and Non Executive Director
Others
1.35
2.15
-
-
1.50
-
-
0.82
-
1.62
1.62
-
-
-
0.82
-
-
-
-
-
-
-
-
0.10
-
-
-
-
0.10
-
-
-
-
-
-
-
-
6.36
6.36
-
0.01
0.01
-
6.35
6.35
NOTES
To Financial Statements for the year ended 31st March, 2017
III Outstanding balances
Particulars
Subsidiaries and Joint Venture
(Referred in I (a), (b) and (c) above)
For the year ended
As at
As at
As at
As at
1,090.69
745.70
745.70
90.01
88.66
-
-
-
Trade payables (purchases of goods and services)
0.92
3.69
2.12
-
-
-
Marico South East Asia Corporation (Formerly known as International
Consumer Products Corporation)
0.91
3.68
1.79
-
-
(0.01)
(0.01)
(0.01)
-
-
1.35
1.26
1.06
-
-
Marico Consumer Care Limited
Others (The share capital of Bellezimo Professionale Products Private
Limited is fully provided in books Rs. 1.62 Crore)
Wind Company
Others
Dues Payable (Royalty payable)
Marico Consumer Care Limited
Others
254.98
106.59
0.02
1.35
-
254.98
0.02
1.26
-
1,089.34
254.98
745.7
0.34
1.06
-
Trade receivables (sale of goods and services)
57.20
30.20
18.29
Marico Bangladesh Limited
12.69
8.93
-
Marico Middle East FZE
Marico South East Asia Corporation (Formerly known as International
Consumer Products Corporation)
Others
24.68
19.66
0.17
Interest Accrued on Loan and advances
0.11
Bellezimo Professionale Products Private Limited
0.11
Marico South Africa Consumer Care (pty) Limited
Security Deposit Payable
Kaya Limited
Stand-by Letter of Credit given to banks
Marico Middle East FZE
IV
-
-
-
136.83
136.83
20.88
0.26
0.13
0.04
0.04
-
-
-
139.78
139.78
17.25
31st March,
2016
As at
1,107.27
Investments
31st March,
2017
As at
31st March,
2016
Marico South East Asia Corporation (Formerly known as International
Consumer Products Corporation)
1st April,
2015
Others
(Referred in I (g) above)
For the year ended
31st March,
2017
The following balances are outstanding at the end of the reporting
period in relation to transactions with related parties
(r in Crore)
-
-
-
-
-
-
-
-
-
-
-
-
Marico South Africa Consumer Care (pty) Ltd
Beginning of the year
Loans advanced
Loan repayments received
Interest charged
Interest received
Exchange Gain
Interest accrued
Balance at the end of the year
Marico Bangladesh Limited
-
-
-
-
0.11
-
0.11
-
0.12
0.05
-
-
-
-
-
-
-
-
-
-
1.04
-
0.12
0.05
0.14
-
-
-
0.14
-
-
-
131.87
131.87
-
-
-
0.10
0.10
-
-
-
-
0.10
-
-
-
0.10
-
-
Loans/advances to/from related parties Particulars
1st April,
2015
For the Year ended
-
-
(r in Crore)
31st March, 2017
31st March, 2016
1.39
5.58
(1.43)
(3.68)
-
(0.39)
-
(0.09)
-
-
0.04
-
-
0.31
(0.34)
1.39
Financial Statements
297
NOTES
298
To Financial Statements for the year ended 31st March, 2017
Particulars
Beginning of the year
31st March, 2017
31st March, 2016
4.40
3.62
21.70
Expenses paid on behalf of MBL
Exchange Gain
1.27
-
(0.82)
(9.16)
(11.42)
Beginning of the year
6.68
2.40
Exchange Gain
0.16
0.07
Royalty Charged
5.59
Royalty received
Balance at the end of the year
5.81
22.07
Marico Middle East FZE
Expenses paid on behalf of MME
21.70
3.58
Royalty Charged
3.84
2.98
Royalty received
3.74
(8.10)
(3.37)
Beginning of the year
1.91
1.57
Exchange Gain
0.16
0.16
Balance at the end of the year
5.30
Marico South East Asia Corporation (Formerly known as International Consumer Products
Corporation)
Expenses paid on behalf of subsidiary
6.68
3.83
Royalty Charged
2.51
1.44
Remittance received
TDS receivable
-
(2.46)
(2.33)
4.79
1.91
(0.09)
Balance at the end of the year
V
23.24
(0.46)
BG provision
(r in Crore)
For the Year ended
-
Loans/advances to/from related parties-Others
Outstanding balances
Subsidiaries and Joint Venture
(Referred in I (a), (b) and (c) above)
For the year ended
As at
Others
31st March,
2017
5.14
As at
31st March,
2016
3.51
As at
As at
1st April,
2015
Others
(Referred in I (g) above)
For the year ended
31st March,
2017
2.32
0.29
As at
31st March,
2016
0.73
(r in Crore)
As at
1st April,
2015
0.55
Terms and conditions of transaction with related parties
All the transactions are at arms length and in normal course of business.
Loans and advances in the nature of loans to subsidiaries/joint venture :
Disclosure for loans and advances in terms of Securities and Exchange Board of India (Listing Obligation and
Disclosure Requirements) Regulations 2015.
Particulars
Loans to subsidiary: Marico South Africa Consumer Care (pty) Limited
Balance as at the year end
Maximum amount outstanding at any time during the year
Loans to joint venture:Bellezimo Professionale Private Limited
Balance as at the year end
Maximum amount outstanding at any time during the year
The subsidiaries do not hold any shares in the Company.
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
-
1.34
7.41
11.94
1.62
-
-
3.63
1.62
-
As at
1st April, 2015
5.44
-
NOTES
To Financial Statements for the year ended 31st March, 2017
Contingent Liabilities and Contingent Assets
The Company had contingent liabilities in respect of : (a) Contingent liabilities
Particulars
Disputed tax demands / claims :
Sales tax
Income tax
Customs duty
Agricultural produce marketing cess
As at
31st March, 2016
As at
1st April, 2015
22.26
22.58
14.67
0.31
0.31
0.31
59.89
-
47.14
9.69
Employees state insurance corporation
0.18
0.18
Service Tax
0.17
0.17
Excise duty on subcontractors
Excise duty on CNO dispatches (Refer note below)
Excise duty on By-Product
Excise duty on Oats
Claims against the Company not acknowledged as debts
(r in Crore)
As at
31st March, 2017
0.54
0.54
-
685.50
20.23
-
4.68
4.67
47.14
9.69
0.18
0.54
0.17
565.62
4.67
-
0.08
0.08
0.14
0.60
0.60
0.60
136.83
139.78
131.87
-
-
31.84
Guarantees excluding financial guarantees:
Corporate guarantees given to banks on behalf of Broadcast Audience Research Council
(BARC)
Stand by Letter of Credit (SBLC) issued by the Company's banks on behalf of subsidiaries
for credit and other facilities granted by banks. (Credit and other facilities availed by the
subsidiaries as at the year end - Rs. 120.90 Crore (Rs. 119.95 Crore)) These SBLC are given
for working capital requirement and are generally renewed every year.
Letter of credit
It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above contingent liabilities
pending resolution of the respective proceedings.
Note:
This contingent liability pertained to a possible obligation in respect of pure coconut oil packs up to 200 ml. This claim had
been contested by the excise department. Based on the various judicial pronouncements, management believed that the
probability of success in the matter was more likely than not and accordingly, the possible excise obligation was treated as
a contingent liability in accordance with requirements of Indian Accounting Standard (Ind AS) 37 “Provisions, Contingent
Liabilities and Contingent Assets”. The possible obligation of Rs. 563.73 Crores as at 31st March, 2016 (Rs. 443.85 Crores
as at April 1, 2015) for the clearances made after June 3, 2009 (i.e. the date of issue of Board circular) till March 31, 2016 and
Rs. 121.77 Crores as at March 31, 2016 (Rs. 121.77 Crores as at April 1, 2015) for clearances made prior to June 3, 2009
was disclosed as contingent liability to the extent of the time horizon covered by show cause notices issued by the excise
department within the normal period of one year (from the date of clearance) as per the excise laws.
The aforementioned amount has not been considered under contingent liability as on 31st March 2017 as the matter has
now been settled by orders of different adjudication authorities in the current financial year holding that clearance of pure
coconut oil packs up to 200ml merits classification under chapter 15 and not under chapter 33 as contemplated by the excise
department and accordingly the excise department has also withdrawn its circular dated June 3,2009 .
Consequently pending show cause notices issued by the excise authorities will not survive and therefore the contingent
liability has been deleted from current financial year.
Financial Statements
31
299
NOTES
300
To Financial Statements for the year ended 31st March, 2017
32Commitments
Particulars
a) Capital commitments
Estimated amount of contracts remaining to be executed on capital account and not
provided for (net of advances)
(r in Crore)
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
15.70
12.02
11.83
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
20.44
12.45
b) Non-cancellable operating leases
The Company’s significant leasing arrangements are in respect of residential flats,
office premises, warehouses, vehicles etc. taken on lease. The arrangements range
between 11 months to 3 years and are generally renewable by mutual consent or
mutually agreeable terms. Under these arrangements refundable interest-free deposits
have been given.
Particulars
Lease rental payments recognized in the Statement of Profit and Loss.
In respect of assets taken on non-cancellable operating lease:
32.95
24.00
(r in Crore)
22.33
Lease obligations
Future minimum lease rental payments
- not later than one year
23.79
- later than five years
16.85
- later than one year but not later than five years
Total
33
49.12
49.87
89.76
90.99
20.68
19.93
0.06
32.44
Share-Based Payments
(a) Employee stock option plan
The Corporate Governance Committee of the Board of Directors of Marico Limited had granted stock options to certain
eligible employees of the Company and it’s subsidiaries pursuant to the Marico Employees Stock Options Scheme 2007
(“the Scheme”). Each option represents 1 equity share in the Company. The vesting period and the exercise period under
the Scheme was not less than one year and not more than 5 years. The Scheme was administered by the Corporate
Governance Committee of the Board comprising Independent Directors. All stock options granted under the Scheme
were exercised on 10th June, 2015.
Marico ESOS 2007
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
Balance as at beginning of the year
-
103,600
212,600
Less : Exercised during the year (prior to bonus issue, refer Note 12(a)(v))
-
103,600
109,000
Balance as at end of the year
-
-
103,600
-
0.03
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Granted during the year
Forfeited / lapsed during the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
-
-
-
57.46
-
55.40
-
During the year ended 31st March, 2015, the Company implemented the Marico Employee Stock Option Scheme 2014
(“Marico ESOS 2014”). Marico ESOS 2014 was approved by the shareholders of the Company at the Extra Ordinary
General Meeting held on March 25, 2014 enabling the grant of 300,000 stock options to the Chief Executive Officer of the
Company (Currently designated as Managing Director & CEO).
Pursuant to the said approval, on 1st April, 2014 the Company granted 300,000 stock options to the Managing Director &
CEO of the Company, at an exercise price of Re.1 per stock option. Each option represents 1 equity share in the Company.
The vesting period is 2 years from the date of grant and the exercise period is 18 months from the date of vesting. As at
31st March, 2016, the aforesaid 300,000 stock options have increased to 600,000 on account of issue of bonus equity
shares by the Company in the ratio of 1:1.
NOTES
To Financial Statements for the year ended 31st March, 2017
Weighted average share price of options exercised
As at
As at
As at
31st March, 2017
31st March, 2016
1st April, 2015
1.00
-
-
Number of options granted, exercised, and forfeited Balance as at beginning of the year
600,000
300,000
Adjustment on account of bonus issue (Refer note 12(a)(v))
-
300,000
-
Granted during the year
-
-
300,000
300,000
-
-
Less : Exercised during the year
Forfeited / lapsed during the year
Balance as at end of the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
-
-
-
300,000
600,000
300,000
0.50
1.00
2.00
During the year ended 31st March, 2015, the Company implemented the Marico MD CEO Employee Stock Option Plan
2014 (“MD CEO ESOP Plan 2014” or “the Plan”). The MD CEO ESOP Plan 2014 was approved by the shareholders at the
26th Annual General Meeting held on July 30, 2014 enabling grant of stock options not exceeding in the aggregate 0.5%
of the number of issued equity shares of the Company, from time to time, through notification of one more Scheme(s)
under the Plan. Each stock option represents 1 equity share in the Company. The vesting period and the exercise period
under the Plan is not less than one year and not more than 5 years.
Pursuant to the aforesaid approval, on 5th January, 2015, the Company notified Scheme I under the Plan and granted
46,600 stock options to the Managing Director & CEO of the Company, at an exercise price of Re.1 per stock option. The
vesting date for stock options granted under the Scheme I is 31st March, 2017. Further, the exercise period is one year
from the date of vesting. As at 31st March, 2016, the said 46,600 stock options have increased to 93,200 on account of
issue of bonus equity shares by the Company in the ratio of 1:1. In view of the implementation of Marico Employee Stock
Option Plan, 2016, as explained below, no further grant of stock options is envisaged under this Plan.
MD CEO ESOP Plan 2014
Weighted average share price of options exercised
Number of options granted, exercised, and forfeited Balance as at beginning of the year
Adjustment on account of bonus issue (Refer note 12(a)(v))
Granted during the year
Less : Exercised during the year
Forfeited / lapsed during the year
Balance as at end of the year
Weighted average remaining contractual life of options outstanding at end of
period (in years)
Marico ESOP 2016
As at
31st March, 2017
As at
31st March, 2016
As at
1st April, 2015
93,200
46,600
-
-
-
46,600
-
-
-
-
-
-
-
46,600
-
-
-
93,200
93,200
46,600
1.00
2.00
3.00
During the current year ended 31st March, 2017, the Company implemented Marico Employee Stock Option Plan, 2016
(“Marico ESOP 2016” or “the Plan”). The Marico ESOP 2016 was approved by the shareholders at the 28th Annual General
Meeting held on 5th August, 2016, enabling grant of stock options to the eligible employees of the Company and its
subsidiaries not exceeding in the aggregate 0.6% of the issued share equity share capital of the Company as on the
commencement date of the Plan i.e. 5th August, 2016. Further, the stock options to any single employee under the Plan
shall not exceed 0.15% of the issued equity share capital of the Company as on the commencement date (mentioned
above). The Marico ESOP 2016 envisages to grant stock options to eligible employees of the Company and it’s subsidiaries
on an annual basis through one or more Scheme(s) notified under the Plan. Each option represents 1 equity share in the
Company. The vesting period and the exercise period under the Plan is not be less than one year and not more than five
years. Pursuant to the said approval, the Company notified below schemes under the Plan:
Financial Statements
Marico ESOS 2014
301
NOTES
302
To Financial Statements for the year ended 31st March, 2017
Particulars
Options granted
Scheme I
Scheme II
Scheme III
Scheme IV
1.00
280.22
1.00
256.78
80,000
Exercise price
Vesting date
939,700
719,830
31-Mar-19
31-Mar-19
30-Nov-19
30-Nov-19
Scheme I
Scheme II
Scheme III
Scheme IV
80,000
939,711
101,080
719,830
-
-
-
-
Marico ESOP 2016
Weighted average share price of options exercised
-
Number of options granted, exercised, and forfeited Balance as at beginning of the year
Granted during the year
-
-
Less : Exercised during the year
Forfeited / lapsed during the year
Weighted average remaining contractual life of options
outstanding at end of period (in years)
-
-
-
Balance as at end of the year
-
-
-
-
-
-
80,000
939,711
101,080
719,830
3.00
3.00
3.67
3.67
2017
2016
2015
0.17%
0.05%
0.07%
Particulars
Aggregate of all stock options to current paid-up equity share capital
(percentage)
101,080
The following assumptions were used for calculation of fair value of grants (figures in bracket represent previous year):
Particulars
Risk-free interest rate (%)
Expected life of options (years)
Expected volatility (%)
Dividend yield (%)
Marico ESOS
2014
MD CEO ESOP
Plan 2014
Marico ESOP
2016
Scheme I
Marico ESOP
2016
Scheme II
Marico ESOP
2016
Scheme III
Marico ESOP
2016
Scheme IV
8.00%
8.00%
7.25%
7.25%
6.75%
6.75%
(8.00%)
(8.00%)
-
-
-
-
3 years
3 years 3
months
3 years 2
months
3 years 2
months
3 years 6
months
3 years 6
months
(3 years)
(3 years 3
months)
-
-
-
-
26.62%
23.66%
25.80%
25.80%
26.10%
26.10%
(26.62%)
(23.66%)
-
-
-
-
3.50%
3.50%
0.96%
0.96%
0.96%
0.96%
(3.50%)
(3.50%)
-
-
-
-
Classified as short-term
Classified as long-term
Carrying amount of liability included in employee benefit
obligation
Number of grants at the end of the
year
Less : Exercised during the year
Less : Forfeited during the year
Add : Granted during the year
Number of grants outstanding at
the beginning of the year
Vesting Date
Grant Price (Rs.)
Grant Date
Details of STAR Scheme:
Classified as short-term
Classified as long-term
-
-
-
1,066,400
-
108,600
-
13.07
1,175,000
-
-
334,400
1,509,400
2016*
As at 31st March
1,175,000
2017
-
6.39
754,700
-
-
133,500
888,200
STAR IV
2015
30th November, 2016
104.48
2nd December, 2013
Carrying amount of liability - included in employee benefit obligation
Number of grants at the end of the year
Less : Exercised during the year
Less : Forfeited during the year
Add : Granted during the year
Number of grants outstanding at the beginning of the year
Vesting Date
Grant Price (Rs.)
Grant Date
Share appreciation rights
-
-
-
-
-
-
-
104.48
2016
-
-
-
-
-
-
-
-
-
347,800
-
71,600
419,400
0.86
419,400
126,000
-
545,400
2016*
-
-
-
-
-
-
-
-
-
-
-
-
217.46
-
-
-
-
-
-
-
2015
5.74
951,200
-
6,000
146,000
-
1.70
1,091,200
-
145,000
1,236,200
2016*
As at 31st March
2015
-
-
-
-
-
-
-
-
-
88,500
30th November, 2017
2017
-
51,100
139,600
5th August, 2015
- 1,091,200
-
-
-
472,100
2015
As at 31st March
2017
-
70,100
542,200
2016
As at 31st March
30th November, 2014
213.91
1st December, 2012
2017
STAR II
2015
30th November, 2016
5th August, 2015
2017
As at 31st March
30th November, 2014
148.53
1st December, 2011
-
-
-
-
-
-
STAR V
-
-
600,800
170,800
771,600
2016
0.86
136,400
44,800
91,600
-
0.13
91,600
-
-
91,600
2016*
-
-
-
-
-
-
-
10.45
2015
As at 31th March
2017
-
771,600
30th November, 2017
197.61
-
166,500
938,100
208.96
-
2016
-
2015
-
-
-
-
-
5,400
5,400
-
0.01
5,400
-
-
5,400
2016*
-
2015
1.49
121,100
As at 31st March
2017
-
12,500
133,600
30th November, 2017
203.63
-
-
100,100
21,000
121,100
1st December, 2015
-
-
-
-
-
As at 31st March
30th November, 2015
2nd December, 2013
2017
STAR III
2015
4th November, 2015
2017
As at 31st March
30th November, 2015
213.91
1st December, 2012
-
-
-
-
-
-
-
The Corporate Governance Committee has granted Stock Appreciation Rights (“STAR”) to certain eligible employees pursuant to the Company’s Employee Stock
Appreciation Rights Plan, 2011 (“Plan”). The grant price is determined based on a formulae as defined in the Plan. There are schemes under each Plan with different
vesting periods. Scheme I, II, III and IV have matured on their respective vesting dates. Under the Plan, the specified eligible employees are entitled to receive
a Star Value which is the excess of the maturity price over the grant price subject to certain conditions. The Plan is administered by Corporate Governance
Committee comprising independent directors.
Details of STAR Scheme:
To Financial Statements for the year ended 31st March, 2017
Financial Statements
(b)
NOTES
303
-
5.89
1,240,600
-
167,200
74,400
1,333,400
-
-
1.13
1,333,400
-
21,600
1,355,000
-
0.15
96,100
-
-
96,100
-
2016
As at 31st March
2017
2016*
As at 31st March
2017
280.22
30th November, 2018
5th August, 2016
30th November, 2018
203.63
STAR VI
-
-
-
-
-
-
-
256.78
-
-
0.07
56,510
-
-
56,510
2017
2016
As at 31st March
30th November, 2018
2nd December, 2016
-
-
-
-
-
-
-
STAR VII
256.78
-
-
0.33
340,140
-
19,270
359,410
2017
2016
As at 31st March
30th November, 2019
1st December, 2016
-
-
-
-
-
-
-
* Numbers are adjusted for 1:1 bonus issued in December, 2015, wherever required.
The Company has formed “Welfare of Mariconians Trust” (The Trust) for the implementation of the schemes that are notified or may be notified from time to time by the Company under the Plan. The Company has
advanced Rs. 54.26 Crore as at 31st March, 2017 (Rs. 66.56 Crore as at 31st March, 2016 and Rs. 28.16 Crore as on 1st April, 2015) to the Trust for purchase of the Company’s shares under the Plan as per the Trust
Deed and Trust Rules, upon maturity, the Trust shall sell the Company’s shares and hand over the proceeds to the Company. The Company, after adjusting the loan advanced and interest thereon (on loan advanced
after 1st April, 2013), shall utilize the proceeds towards meeting its STAR Value obligation.
Classified as short-term
Classified as long-term
Carrying amount of liability - included in employee benefit obligation
Number of grants at the end of the year
Less : Exercised during the year
Less : Forfeited during the year
Add : Granted during the year
Number of grants outstanding at the beginning of the year
Vesting Date
Grant Price (Rs.)
1st December, 2015
304
Grant Date
NOTES
To Financial Statements for the year ended 31st March, 2017
NOTES
To Financial Statements for the year ended 31st March, 2017
The fair value of the STAR’s was determined using the Black-Scholes model using the following inputs at the grant date and as
at each reporting date:
Particulars
Share price at measurement date (INR per share)
Expected volatility (%)
Dividend yield (%)
Risk-free interest rate (%)
31st March, 2017
31st March, 2016
1st April, 2015
24.5% - 27.1%
26.2% - 28.6%
24%-27%
6%
7%
7%
294.9
0.96%
Employee stock option plan
Stock appreciation rights
Total Employee share based payment expense
31st March, 2016
13.21
14.65
4.02
3.46
Year ended
31st March, 2017
Year ended
31st March, 2016
Basic earnings per share attributable to the equity holders of the Company (in Rs.)
6.55
5.37
Diluted earnings per share attributable to the equity holders of the Company (in Rs.)
6.53
5.37
Earnings Per Share
(b) Diluted earnings per share
(c) Earnings used in calculating earnings per share
Basic earnings per share
Diluted earnings per share
842.70
691.26
842.70
691.26
Weighted average number of equity shares outstanding
1,290,233,390
1,290,164,173
Weighted average number of equity shares in calculating basic earnings per share
1,286,567,229
1,286,569,730
Weighted average number of equity shares and potential equity shares in calculating diluted earning
per share
1,288,573,342
1,287,259,939
(d) Weighted average number of shares used as the denominator
Shares held in controlled trust
Dilutive impact of Share Options
(3,666,161)
2,006,113
(3,594,443)
690,209
Information concerning the classification of securities
(i)
(r in Crore)
31st March, 2017
18.11
(a) Basic earnings per share
0.57%
17.23
Particulars
0.96%
385.8
(c) Expense arising from share-based payment transactions recognised in Profit or Loss as part of employee benefit expense
were as follows:
Particulars
34
244.3
Share Options
Options granted to Employees under Marico ESOS 2014,MD CEO ESOP Plan 2014 and Marico Employee Stock Option
Plan 2016 are considered to be potential equity shares. They have been included in the determination of diluted earnings
per share to the extent to which they are dilutive. The options have not been included in the determination of basic
earnings per share. Details relating to the options are set out in note 33.
(ii) Treasury shares
The weighted average number of shares takes into account the weighted average effect of changes in treasury share
transactions during the year.
Financial Statements
305
NOTES
306
To Financial Statements for the year ended 31st March, 2017
35
First time adoption of Ind AS
These are the Company’s first financial statements prepared in accordance with Ind AS.
Transition to Ind AS
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st
March, 2017, the comparative information presented in these financial statements for the year ended 31st March, 2016 and
in the preparation of an opening Ind AS Balance Sheet at 1st April, 2015 (the Company’s date of transition). In preparing its
opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared
in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended)
and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial
performance and cash flows is set out in the following tables and notes.
A.
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from
previous GAAP to Ind AS.
A.1 Ind AS optional exemptions
A.1.1
Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date
prior to the transition date. This provides relief from full retrospective application that would require restatement of
all business combinations prior to the transition date.
The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition
date. Business combinations occurring prior to the transition date have not been restated.
The Company has applied same exemption for investment in subsidiaries and joint ventures.
A.1.2Deemed cost
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and
equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the
previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments
for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 - Investment Properties.
Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and
investment property at their previous GAAP carrying value.
A.1.3 Share-based payment transactions
Ind AS 102 deals with the accounting and disclosure requirements related to share-based payment transactions.
The standard addresses three types of share-based payment transactions: equity-settled, cash-settled, and with
cash-alternatives. A first-time adopter is encouraged, but is not required, to apply Ind AS 102 to:
(i) equity instruments that vested before the date of transition to Ind AS,
(ii) liabilities arising from share-based payment transactions that were settled before the date of transition to Ind
AS.
The Company has availed this exemption and has not applied fair value to the equity instruments and liabilities that
were vested and settled before the date of transition to Ind AS.
A.1.4Investments in subsidiaries When an entity prepares separate financial statements, Ind AS 27 requires it to account for its investments in
subsidiaries, joint ventures and associates either at cost; or in accordance with Ind AS 109.
If a first-time adopter measures such an investment at cost in accordance with Ind AS 27, it shall measure that
investment at one of the following amounts in its separate opening Ind AS Balance Sheet:
NOTES
To Financial Statements for the year ended 31st March, 2017
(a) cost determined in accordance with Ind AS 27; or
(b) deemed cost. The deemed cost of such an investment shall be its:
(i) fair value at the entity’s date of transition to Ind ASs in its separate financial statements; or
(ii) previous GAAP carrying amount at that date.
A first-time adopter may choose either (i) or (ii) above to measure its investment in each subsidiary, joint venture or
associate that it elects to measure using a deemed cost.
The Company has availed the exemption and has measured its investment in subsidiaries at deemed cost being the
previous GAAP carrying amount at that date.
A.2 Ind AS mandatory exceptions
A.2.1
Hedge accounting
The Company had designated various hedging relationships as cash flow hedges under the previous GAAP. On
date of transition to Ind AS, the entity had assessed that all the designated hedging relationship qualifies for hedge
accounting as per Ind AS 109. Consequently, the company continues to apply hedge accounting on and after the
date of transition to Ind AS.
A.2.2Estimates
Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge
accounting criteria in Ind AS 109, at that date. Hedging relationships cannot be designated retrospectively, and the
supporting documentation can not be created retrospectively. As a result, only hedging relationships that satisfied
the hedge accounting criteria as of 1st April, 2015 are reflected as hedges in the company’s result under Ind AS.
An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates
made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting
policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with
previous GAAP. The company made estimates for Investment in equity instruments carried at FVPL in accordance
with Ind AS at the date of transition as these were not required under previous GAAP. A.2.3De-recognition of financial assets and liabilities Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for
transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to
apply the de-recognition requirement provided that the information needed to apply Ind AS 109 to financial assets
and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting
for those transactions.
The company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of
transition to Ind AS .
A.2.4Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt
instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Ind AS 101 requires the company to reconcile equity, total comprehensive income, and cash flow for prior periods.
The following reconciliations provide the explanantions and quantification of the differences arising from the
transition from previous GAAP to Ind AS in accordance with Ind AS 101:
(A) Reconciliation of Equity as at 1st April, 2015 and as at 31st March, 2016
(B) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2016 and
(C) The impact on cash flows from operating, investing and financing activities for the year ended 31st March, 2016.
Financial Statements
307
NOTES
308
To Financial Statements for the year ended 31st March, 2017
B: Reconciliation between previous GAAP and Ind AS
Reconciliation of Balance sheet as at date of transition (1st April, 2015)
Particulars
ASSETS
Notes to first
time adoption
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
Other intangible assets
14
Investment accounted for using the equity method
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
1 (d), 8
Assets classified as held for sale
Total current assets
-
11.76
-
1,089.34
4.89
33.81
(1.89)
32.44
23.56
28.92
-
2.07
23.56
106.78
25.63
132.41
1,791.63
21.26
1,812.89
791.59
-
791.59
266.93
2.53
21.70
0.26
26.01
(19.76)
9
1
Other current assets
11.76
10
9
(iii) Cash and cash equivalents
(vi) Other financial assets
458.00
-
(8.40)
8
(v) Loans
-
2.07
13.44
(i) Investments
(iv) Bank balances other than (iii) above
Ind AS
1 (c)
Inventories
(ii) Trade receivables
(r in Crore)
Adjustments
458.00
1,089.34
Current assets
Financial assets
Previous GAAP*
1
1 (c)
9
34.33
23.43
130.55
76.37
24.46
269.46
-
130.55
2.30
78.67
21.96
6.25
0.40
11.59
1,398.47
(13.90)
1,384.57
1,427.18
(13.90)
1,413.28
64.50
-
64.50
2,353.36
(34.28)
2,319.08
2,342.89
(8.01)
2,334.88
168.74
(0.34)
168.40
170.44
4.35
174.79
8.64
-
6
103.40
(0.39)
103.01
3
36.82
11.39
48.21
101.16
-
9
14
Total assets
11.19
1.03
5.04
74.13
28.71
3,218.81
0.37
-
7.36
74.50
28.71
3,226.17
EQUITY AND LIABILITIES
Equity
Equity Share capital
Other Equity
Reserves and Surplus
Other reserves
Total equity
1(a), 1(b), 4, 2
5, 10
LIABILITIES
(74.97)
26.27
(48.70)
Non-current liabilities
Financial liabilities
(i) Borrowings
Employee benefit obligations
Total non-current liabilities
6
3
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
(iii) Other financial liabilities
Provisions
Employee benefit obligations
Current tax liabilities (Net)
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
1
1.70
405.55
42.25
7.66
4.69
-
-
0.02
6.39
8.64
405.55
42.25
7.68
101.16
705.48
11.02
716.50
3,218.81
7.36
3,226.17
875.92
15.37
891.29
NOTES
To Financial Statements for the year ended 31st March, 2017
309
Particulars
ASSETS
Notes to first
time adoption
Non-current assets
Property, plant and equipment
Capital work-in-progress
Investment properties
Other intangible assets
Investment accounted for using the equity method
Financial assets
(i) Investments
(ii) Loans
(iii) Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
14
7
9
(i) Investments
8
(iii) Cash and cash equivalents
1
(iv) Bank balances other than (iii) above
(v) Loans
(vi) Other financial assets
Current tax assets (net)
Other current assets
Assets classified as held for sale
Total current assets
24.29
-
24.29
17.95
1,090.69
29.50
Inventories
(ii) Trade receivables
436.18
9
10
1 (c)
1, 9
1
9
14
Total assets
Ind AS
-
36.54
38.95
1 (c)
(r in Crore)
Adjustments
436.18
1 (d), 8
Current assets
Financial assets
Previous GAAP*
54.34
47.91
-
5.43
36.54
23.38
-
1,090.69
2.44
41.39
(1.73)
27.77
(50.59)
3.75
6.67
54.58
1,802.16
(37.20)
1,764.96
767.56
-
767.56
432.72
6.07
12.60
2.98
20.00
(15.97)
1.87
(0.01)
1,668.87
(7.75)
1,661.12
1,681.32
3,483.48
(7.75)
(44.95)
1,673.57
129.02
-
129.02
2,494.13
(69.64)
2,424.49
2,597.68
(59.41)
2,538.27
25.81
192.10
124.59
26.75
90.68
12.45
0.58
26.39
438.79
-
192.10
-
124.59
(1.36)
25.39
0.54
91.22
-
15.58
4.03
1.86
12.45
3,438.53
EQUITY AND LIABILITIES
Equity
Equity Share capital
Other Equity
Reserves and Surplus
Other reserves
Total equity
1(a), 1(b), 4, 2
5, 10
(25.47)
10.23
(15.24)
LIABILITIES
Non-current liabilities
Financial liabilities
Employee benefit obligations
Total non-current liabilities
3
2.14
0.83
2.14
0.83
25.83
-
2.97
2.97
Current liabilities
Financial liabilities
(i) Borrowings
(ii) Trade payables
484.78
25.83
-
484.78
-
50.64
(iii) Other financial liabilities
6
188.91
(0.35)
Employee benefit obligations
3
34.89
13.78
883.66
13.63
897.29
3,483.48
(44.95)
3,438.53
Provisions
Other current liabilities
Total current liabilities
Total liabilities
Total equity and liabilities
1
50.64
98.61
885.80
0.20
14.46
* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
188.56
48.67
98.81
900.26
Financial Statements
Reconciliation of Balance sheet (31st March, 2016)
NOTES
310
To Financial Statements for the year ended 31st March, 2017
Reconciliation of total comprehensive income for the year ended 31st March, 2016
Particulars
Continuing operations
Revenue from operations
Other income
Total Income
Expenses
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, stock-in-trade and work-in progress
Excise duty
Employee benefit expense
Depreciation and amortization expense
Other expenses
Finance costs
Total expenses
Notes to first
time adoption
Previous GAAP*
11, 12
1, 1(d), 8, 9
Current tax
Deferred tax
Total tax expense
4,867.99
5,145.36
(86.80)
5,058.55
2,478.34
7.12
2,485.46
37.06
-
37.06
11
7.13
2, 3, 13
7
6
(0.29)
-
-
190.56
79.95
7.13
217.35
10.85
228.20
1,292.40
(91.38)
1,201.02
4,201.26
(78.45)
4,122.81
0.74
189.53
2.24
244.48
74.25
14.78
Profit before tax from continuing operations
Income tax expense
(86.51)
79.95
1, 5, 9, 12
Ind AS
4,954.50
190.86
12
(r in Crore)
Adjustments
944.10
1, 15
188.79
10
53.45
242.24
Profit for the year (A)
701.86
(5.43)
0.39
(8.36)
1.50
(10.60)
68.82
15.17
935.74
54.95
691.26
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
(2.83)
Income tax relating to items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
0.96
Total
(1.87)
Change in fair value of hedging instruments
51.18
Change in fair value of hedging instruments
(17.72)
Items that may be reclassified to profit or loss
Income tax relating to items that will be reclassified to profit or loss
Total
33.46
Other comprehensive income for the year (B)
31.59
Total comprehensive income for the year (A+B)
722.85
Reconciliation of total equity as at 31st March, 2016 and 1st April, 2015
Particulars
Shareholder’s equity under previous GAAP
Add/Less :
Gain/ (loss) on fair valuation of investments
(Increase)/ decrease due to fair valuation accounting of Share based payments
Increase/ (decrease) due to WEOMA Trust consolidation
Increase/ (decrease) due to reversal of amortisation of brands
Other adjustments
Tax impact of above Ind AS adjustments
Shareholder’s equity under Ind AS
Notes to First time adoption
1,8
31st March, 2016
2,597.68
4.04
3
(30.10)
7
5.43
1
6,9
10
(45.67)
0.26
6.63
2,538.27
(r in Crore)
1st April, 2015
2,342.89
2.89
(16.08)
(21.11)
-
0.71
25.58
2,334.88
NOTES
To Financial Statements for the year ended 31st March, 2017
311
(r in Crore)
Notes to First time adoption
Profit after tax as per previous GAAP
Add/Less :
Gain/ (loss) on fair valuation of investments
31st March, 2016
701.86
1,8
(Increase)/ decrease due to fair valuation accounting of Share based payments
1.14
2,3
Increase/ (decrease) due to WEOMA Trust consolidation
(13.68)
1
Increase/ (decrease) due to reversal of amortisation of brands
(1.99)
7
Remeasurements of post employment benefit obligation
13
Gain/ (Loss) on fair valuation of security deposits
9
Time value of option reclassified to OCI
Gain/ (Loss) on borrowings - transaction cost adjustment
Tax impact of above Ind AS adjustments
5.43
2.83
5
(1.68)
6
(0.38)
(0.02)
10
Total adjustments
Net profit/loss as per Ind AS
Other comprehensive income
(2.25)
(10.60)
691.26
15
Total comprehensive income as per Ind AS
31.59
722.85
Impact of Ind AS adoption on the statements of cash flows for the year ended 31st March, 2016
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents as at 1st April, 2015
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents as at 31st March, 2016
Previous GAAP
656.73
Adjustments
(r in Crore)
Ind AS
(27.72)
629.01
(532.32)
(17.16)
(549.48)
14.95
7.01
21.96
6.38
15.58
(130.16)
(5.75)
-
9.20
44.25
(0.63)
-
(85.91)
(6.38)
-
C: Notes on First-time adoption
1
Consolidation of the Trust
The company has formed Welfare of Mariconions Trust (WEOMA trust) for implementation of the schemes that are
notified or may be notified from time to time by the Company under the plan, providing share based payment to its
employees. WEOMA purchases shares of the Company out of funds borrowed from the Company. The Company treats
WEOMA as its extension and shares held by WEOMA are treated as treasury shares.
The Consolidation of the WEOMA trust financials statements with that of the Company does not in any manner affect the
independence of the trustees where the rights and obligations are regulated by the trust deed.
Own equity instruments (treasury shares) are recognised at cost and deducted from equity. Profit on sale of treasury
shares by WEOMA trust is recognised in WEOMA reserve.
(i) The sources and application of funds of the Trust consolidated as at 31st March, 2016 and 1st April, 2015 were
as follows:
Particulars
Corpus Fund
Current Liabilities
Cash & Bank equivalents
Fixed deposits
1st April, 2015
0.35
0.09
2.64
2.98
-
Non current investments
1.47
Net asset
1.56
Other Current Assets
(r in Crore)
31st March, 2016
0.10
2.66
0.26
2.30
4.52
0.06
4.39
Financial Statements
Reconciliation of total comprehensive income for the year ended 31st March, 2016
NOTES
312
To Financial Statements for the year ended 31st March, 2017
(ii) Impact on the Company’s profit and loss post WEOMA Trust consolidation for the year 31st March, 2016
Particulars
(r in Crore)
31st March, 2016
Income
Interest on Fixed Deposits with Bank
0.15
Administrative Expenses
0.02
Expenditure
Interest derecognition on loan from WEOMA-Consolidation
2.12
Impact on profit before tax
(iii)Summarised statement of cash flows of the Trust consolidated for the year ended 31st March, 2016
Particulars
Cash and cash equivalents 1st April, 2015
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Cash and cash equivalents 31st March, 2016
(1.99)
(r in Crore)
31st March, 2016
0.26
2.73
-
2.99
Other items adjusted owing to the Trust consolidation include :
(a) Treasury shares
Upon consolidation, the investment in the Company’s equity shares made by WEOMA Trust is debited to the Company’s
equity as treasury shares amounting to Rs. 68.37 Crore as at 31st March, 2016 (Rs. 28.29 Crore as at 1st April, 2015).
(b) WEOMA reserve
(c)
(d)Investments
2
3STAR
The income of the Trust till date comprising of profit on sale of Marico shares, forms a part of WEOMA reserve amounting
to Rs. 20.18 Crore as at 31st March, 2016 (Rs. 2.66 Crore as at 1st April, 2015).
Other Non Current Financial Assets and other income
Loan advanced to the Trust is eliminated on consolidation amounting to Rs. 50.59 Crore as at 31st March, 2016 (Rs. 8.40
Crore as at 1st April, 2015) forming a part of non current loans and Rs. 15.97 Crore (Rs. 19.76 Crore as at 1st April, 2015)
being current loans in previous GAAP Accordingly, interest on above loan is also eliminated amounting to Rs. 2.12 Crore.
The fair value of investments held by the Trust consolidated as per Ind AS amounts to Rs 1.47 Crore as at 31st March,
2016 (Rs. 4.52 Crore as at 1st April, 2015). The profit for the year ended 31st March, 2016 decreased by Rs. 3.05 Crore.
Employee Stock Option Liability
Under the previous GAAP, the cost of equity-settled employee share-based plan were recognised using the intrinsic value
method. Under Ind AS, the cost of equity settled share-based plan is recognised based on the fair value of the options
as at the grant date. Consequently, the amount recognised in share based option outstanding account decreased by
Rs. 0.64 Crore as at 31st March, 2016 (1st April, 2015 - Rs. 0.31 Crore). The profit for the year ended 31st March, 2016
increased by Rs. 0.33 Crore. There is no impact on total equity.
Under the previous GAAP, the cost of cash-settled employee share-based plan were recognised using the intrinsic value
of the rights (excess of market value as at period end over the Grant price) over the vesting period after adjusting amount
recoverable from WEOMA trust. As per Ind AS 102, the Share appreciation rights liability shall be measured, initially and
at the end of each reporting period until settled, at the fair value of the share appreciation rights, by applying an option
pricing model, taking into account the terms and conditions on which the share appreciation rights were granted, and the
extent to which the employees have rendered service to date. There is an increase in liability by Rs. 14.61 Crore whereby
Rs. 0.83 Crore (Rs. 4.69 Crore as at 1st April, 2015) is long term and Rs. 13.78 Crore (Rs. 11.39 Crore as at 1st April, 2015)
is short term. The profit for the year ended 31st March, 2016 decreased by Rs. 13.99 Crore. Equity has decreased by Rs.
30.10 Crore as at 31st March, 2016 (1st April, 2015 - Rs. 16.08 Crore)
NOTES
To Financial Statements for the year ended 31st March, 2017
4
Retained Earnings
5
Time Value reclassified to OCI
6Borrowings
7
8
9
Retained earnings as at 1st April, 2015 has been adjusted consequent to the above Ind AS transition adjustments
Under previous GAAP, the company recognised movements in time value of options and forward element of forward
contracts and Interest rate swaps contract in profit or loss in the period in which they arose. Under Ind AS, these
movements are reclassified to OCI and thereby decreasing hedge reserve balance by Rs. 2.15 Crore as at 31st March,
2016 (1st April, 2015 Rs. 0.47 Crore). The profit for the year ended 31st March, 2016 is decreased by Rs 1.68 Crore. There
is no impact on total equity.
Under previous GAAP, transaction costs incurred towards origination of borrowings were charged to profit or loss as
and when incurred. Ind AS 109 requires these transaction costs to be deducted from the carrying amount of borrowings
on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the
interest expense by applying the effective interest rate method. Accordingly, borrowings as at 31st March, 2016 have
been reduced by Rs. 0.35 Crore (1st April, 2015 Rs. 0.73 Crore) with a corresponding adjustment to retained earnings.
The total equity increased by an equivalent amount. The profit for the year ended 31st March, 2016 reduced by Rs. 0.38
Crore as a result of the additional interest expense.
Other Intangible assets
In previous GAAP, there was a rebuttable presumption that the useful life of an intangible asset will not exceed ten years
from the date when the asset is available for use. As per Ind AS 38, Intangible Assets having an indefinite life are not
amortised and tested annually for impairment. The amortisation charged on copyrights and trademarks is reversed
thereby increasing the value of intangible assets, retained earning and profit by Rs. 5.43 Crore as at 31st March, 2016.
Fair valuation of investments
Under the previous GAAP, investments in equity instruments and mutual funds were classified as non current investments
or current investments based on the intended holding period and realisability. Non current investments were carried at
cost less provision for other than temporary decline in the value of such investments. Current investments were carried
at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting
fair value changes of these investments have been recognised in retained earnings as at the date of transition and
subsequently in the profit or loss for the year ended 31st March, 2016. This increased the retained earnings by Rs. 7.09
Crore as at 31st March, 2016 (1st April, 2015 - Rs. 2.89 Crore). The profit for the year ended 31st March, 2016 increased
by Rs. 4.20 Crore.
Security deposits
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease
term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value.
Accordingly, the company has fair valued these security deposits under Ind AS. Difference between the fair value and
transaction value of the security deposit has been recognised as prepaid rent. Consequent to this change, the amount of
security deposits decreased by Rs. 1.18 Crore as at 31st March, 2016 (1st April, 2015 - Rs. 1.49 Crore). The prepaid rent
increased by Rs. 1.12 Crore as at 31st March, 2016 (1st April, 2015 - Rs. 1.40 Crore). Total equity decreased by Rs. 0.06
Crore as on 1st April, 2015. The profit for the year and total equity as at 31st March, 2016 decreased by Rs. 0.02 Crore
due to amortisation of the prepaid rent of Rs. 0.53 Crore which is partially off-set by the notional interest income of Rs
0.55 Crore recognised on security deposits.
10 Deferred tax has been recognised on adjustments made on transition to Ind AS.
Revenue from operations
11 Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue
from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the Statement
of Profit and Loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the
year ended 31st March, 2016 by Rs. 7.13 Crore. There is no impact on the total equity and profit.
Financial Statements
313
NOTES
314
To Financial Statements for the year ended 31st March, 2017
12 Revenue, Advertisement and Sales Promotion (ASP) and other expense
The Company will recognise revenue at the fair value of consideration received or receivable. Any sales incentive,
discounts or rebates in any form, including cash discounts given to customers will be considered as selling price
reductions and accounted as reduction from revenue. Under IGAAP, some of these costs were included in ‘advertising
and sales promotion’ expenses. Accordingly, Rs. 60.78 Crore has been reclassified from Advertisement and Sales
Promotion to Sales, Rs. 7.12 Crore has been reclassified from Advertisement and Sales Promotion to Cost of Goods Sold
and Rs. 25.73 Crore from other expense to Sales.
Employee benefits expense
13 Remeasurements of post-employment benefit obligations
14 Investment property and Asset held for sale
Under Ind AS, remeasurements i.e. actuarial gains and losses and return on plan assets, excluding amounts included in
the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of
profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a
result of this change, the profit for the year ended 31st March, 2016 increased by Rs. 2.83 Crore. There is no impact on
the total equity as at 31st March, 2016.
Under the previous GAAP, investment properties were presented as part of non-current investments. Under Ind AS,
investment properties are required to be separately presented on the face of the Balance Sheet. There is no impact on
the total equity or profit as a result of this adjustment.
Under the previous GAAP, asset held for sale were presented as part of other current assets. Under Ind AS, asset held for
sale are required to be separately presented on the face of the Balance Sheet. There is no impact on the total equity or
profit as a result of this adjustment.
15 Other comprehensive income
36
Event occuring after Balance sheet date
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period,
unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but
are shown in the statement of profit and loss includes remeasurements of defined benefit plans, effective portion of gains
and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous
GAAP.
As at 2nd May, 2017, the date of approval for issue of the standalone financial statement by the Board of Directors, the
Company has no subsequent event which either warrant a modification in value of assets and liabilities or any other disclosure.
As per our attached report of even date.
For Price Waterhouse
Chartered Accountants
Firm Registration No. 301112E
UDAY SHAH
Partner
Membership No. 46061
Place: Mumbai
Date: May 2, 2017
For and on behalf of the Board of Directors
HARSH MARIWALA
Chairman
[DIN 00210342]
SAUGATA GUPTA
Managing Director and CEO
[DIN 05251806]
VIVEK KARVE
Chief Financial Officer
SURENDER SHARMA
Company Secretary
[Membership No.A13435]
Place: Mumbai
Date: May 2, 2017
10 YEAR FINANCIAL HIGHLIGHTS
(` in Crore)
Income from Operations
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
5,935.9
1,905.0
2,388.4
2,660.8
3,135.0
3,979.7
4,596.2
4,686.5
5,733.0
6,024.5
EBITDA
246.4
304.0
375.1
418.1
484.4
625.8
748.0
870.1
1,051.4
Profit before Tax
194.5
244.7
Profit before Tax (PBT)
205.0
Profit before Interest & Tax (PBIT)
333.3
368.5
444.4
15.0
9.8
(48.9)
1.8
(33.2)
518.7
694.6
229.6
299.7
371.4
395.4
542.1
675.9
810.2
1,017.4
1,137.3
Cash Profits (Profit after Current Tax +
Depreciation + Amortisation)
169.1
188.7
235.4
286.4
317.1
395.9
485.4
573.5
711.5
798.6
220.1
258.4
334.5
400.3
391.6
481.1
573.4
656.3
806.9
889.9
Economic Value Added
131.5
144.4
196.0
174.7
198.6
283.3
313.3
407.4
490.9
551.7
397.6
395.5
395.5
254.3
497.4
479.5
88.9
295.6
151.6
310.5
283.8
513.2
608.2
-
-
-
-
-
-
Profit after Tax (PAT)
Goodwill on consolidation
(10.6)
84.2
85.0
307.7
85.0
327.5
Net Fixed Assets
257.3
311.1
399.7
457.8
Net Current Assets
233.0
355.3
483.3
607.5
Investments
Miscellaneous Expenditure
Net Non Current Assets
0.0
-
-
-
1,422.4
532.2
674.1
-
844.6
1,049.8
-
-
-
637.8
670.7
821.7
489.2
1,029.2
589.8
620.5
748.7
654.6
1,166.3
1,149.7
-
616.4
864.4
98.2
64.1
61.6
-
129.9
205.2
250.5
212.6
162.8
-
64.9
35.3
21.8
Total Capital Employed
672.7
828.5
1,112.4
1,711.5
1,952.7
2,894.3
2,085.8
2,274.2
2,385.9
2,599.8
60.9
-
82.7
501.9
729.0
Deferred Tax Asset (Net)
Equity Share Capital
-
13.0
402.1
576.7
1,159.3
280.4
Extraordinary / Exceptional items
225.1
60.9
60.9
29.9
61.4
22.3
61.5
-
64.5
-
64.5
64.5
129.0
9.5
129.0
Reserves
253.7
392.6
593.0
854.0
1,081.5
1,917.0
1,296.1
1,760.3
1,888.4
2,196.6
Net Worth
314.6
453.5
654.0
915.5
1,143.0
1,981.5
1,360.6
1,824.8
2,017.4
2,325.7
0.1
-
12.5
21.9
24.9
35.1
35.8
13.7
14.3
13.3
Minority interest
Borrowed Funds
358.0
375.0
445.9
774.2
784.8
871.9
679.8
427.9
331.3
238.8
Total Funds Employed
672.7
828.5
1,112.4
1,711.5
1,952.7
2,894.3
2,085.8
2,274.2
2,385.9
2,599.8
12.9
12.7
14.1
13.3
12.2
13.6
16.0
15.2
17.5
19.5
8.9
7.9
8.8
9.1
8.0
8.6
10.4
10.0
11.8
13.5
Deferred Tax Liability
EBITDA Margin (%)
-
-
-
-
-
5.8
9.6
7.9
22.8
22.0
Profit before Tax to Turnover (%)
10.8
Return on Net Worth (%)
(PAT / Average Net Worth $)
66.7
49.1
42.5
36.5
30.8
25.3
30.1
36.0
37.0
36.8
Return on Capital Employed
(PBIT / Average Total Capital Employed @)
40.3
37.4
34.5
26.1
24.3
23.8
30.4
38.7
45.1
46.8
Net Cash Flow from Operations per share
(Rs.) (Refer Cash Flow Statement)
2.3
3.0
3.4
4.0
6.5
6.7
10.2
10.3
6.5
4.7
Earning per Share ( EPS ) (Rs.)
(PAT / No. of Equity Shares)
2.8
3.1
3.9
4.7
5.2
6.1
7.5
8.9
5.5
6.2
Economic Value Added per share (Rs.)
Dividend per share (Rs.)
2.2
0.7
2.4
3.2
2.8
3.2
4.4
4.9
6.3
3.8
4.3
Debt / Equity
1.1
0.8
0.7
0.8
0.7
0.4
0.5
0.2
0.2
0.1
Book Value per share (Rs.)
(Net Worth / No. of Equity Shares)
5.2
7.4
10.7
14.9
18.6
30.7
21.1
28.3
15.6
18.0
3.4
3.2
2.2
2.2
1.9
2.0
2.6
2.6
2.4
Profit after Tax to Turnover (%)
Sales to Average Capital Employed @
Sales to Average Net Working Capital #
10.9
9.6
0.7
8.1
11.3
0.7
2.7
6.3
11.8
0.7
5.3
9.9
0.7
7.0
11.8
1.0
7.6
14.4
3.5
6.6
@ Average Capital Employed = (Opening Capital Employed + Closing Capital Employed)/2
$ Average Net Worth = (Opening Net Worth + Closing Net Worth)/2
# Average Net Working Capital = (Opening Net Current Assets + Closing Net Current Assets)/2
Note 1: FY11 onwards the financial figures are as per revised Schedule VI
Note 2: Profit Before Tax is after minority interest
Note 3: FY14 onwards, financials will not include Kaya as it has been demerged from Marico Group effective April 1,2013.
Note 4: FY16 and FY17 numbers per share numbers are calculated on the post bonus number of shares
Note 5: FY16 and FY17 numbers are as per IND - AS and hence not comparable with earlier years.
14.1
2.5
8.1
16.9
3.4
8.6
19.2
3.5
7.8
Purpose Statement
To transform in a sustainable manner, the lives of
those we touch, by nurturing and empowering them
to maximise thier true potential.
www.facebook.com/MaricoCampusConnections
Registered Office
Marico Limited
7th floor, Grande Palladium
175, CST Road, Kalina,
Santa Cruz (East)
Mumbai 400098
www.youtube.com/user/MaricoLimited
www.linkedin.com/company/marico-ltd@Maricocareers
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